2020-09-30-accounts

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Girls Friendly Society in England and Wales

Annual Report and Financial Statements

30 September 2020

Company Limited by Guarantee Registration Number 3172713 (England and Wales)

Charity Registration Number 1054310

Reports

Reports	Reports
Reference and administrative details of
the charity, its trustees and advisers	1
Chair’s report	3
Trustees’ report	5
Independent auditor’s report	25
Financial statements
Statement of financial activities - year to
30 September 2020	28
Comparative statement of financial
activities -
year to 30 September 2019	30
Balance sheet	30
Statement of cash flows	31
Principal accounting policies	32
Notes to the financial statements	39

Girls Friendly Society in England and Wales

Reference and administrative details of the charity, its trustees and advisers

Trustees	Ms I Vidal (Chair)
	Mrs C Charlesworth (Wales President)
	(resigned 5 December 2020)
	Ms E Dickinson
	Ms D Farrow (resigned 28 March 2020)
	Mrs M Hughes (Vice Chair)
	Ms L Massey (appointed 5 December 2020)
	Ms C Osborne
	Ms S Schibli (Treasurer) (resigned 30 August
	2020)
	Ms R Turton (appointed 30 March 2020)
	Mrs M Winks (England President)
	Miss P Winks
	Ms M Young (Treasurer) (appointed 30 August
	2020)
Chief Executive	Ms L Sercombe (appointed January 2020)
Registered office	Unit 12, Angel Gate
and head office	326 City Road
	London
	EC1V 2PT
Company registration	3172713 (England and Wales)
number
Charity registration	1054310
number
Website	www.girlsfriendlysociety.org.uk
Facebook	www.facebook.com/girlsfriendlysocietyuk
Twitter	www.twitter.com/gfsenglandwales
Instagram	www.instagram.com/girlsfriendlysociety/
LinkedIn	www.linkedin.com/company/girls-friendly-
	society-in-england-and-wales

Girls Friendly Society in England and Wales

Reference and administrative details of the charity, its trustees and advisers

Auditor	Buzzacott LLP
	130 Wood Street
	London
	EC2V 6DL
Solicitors	Bates Wells & Braithwaite London LLP
	2-6 Cannon Street
	London
	EC4M 6YH
Custodians	Schroders & Co Limited (to November 2020)
	1 London Wall Place
	London
	EC2Y 5AU
Principal investment	Schroders & Co Limited (to November 2020)
managers	1 London Wall Place
	London
	EC2Y 5AU
	Rathbone Investment Management (from
	November 2020)
	8 Finsbury Circus
	Finsbury
	London
	EC2M 7AZ
Principal bankers	Barclays Bank plc
	1 Churchill Place
	London
	E14 5HP

Girls Friendly Society in England and Wales 2

Chair’s report 30 September 2020

The Girls Friendly Society in England and Wales (GFS) has a long and rich history of renewal and innovation. In its 145 years, our charity has seen six British monarchs, two world wars and the introduction of modern technology to the home and workplace. And yet, even our great organisation has been challenged in the last 12 months, by the debilitating effects of the coronavirus pandemic.

This is the greatest challenge we have faced – nationally and globally – in a generation, and it has tested humanity’s capacity to collaborate, communicate and care for each other as never before. These values are ones which have fuelled our movement for many years, and the individual and collective endeavours of GFS women and girls has been heartening to see. From the unstoppable volunteers delivering care packages to girls isolated at home, to the inspiring staff members rapidly changing plans to accommodate online sessions. From the dedicated trustees and committee members who devoted extra time to support the running of the charity to our fearless girls and young women who led with ideas to keep us connected. This is the true spirit of GFS and a legacy that Mary Townsend would be proud of.

Despite the disruption, as a team, GFS achieved and delivered in a number of strategic areas:

We focused on reforming and strengthening our culture, revising our policies to ensure a safe environment and creating more space for learning and collaboration across the organisation.
We opened new groups physically and virtually, introduced new programmes and sessions, and provided our girls with extra support during these challenging times.
We continued to work towards building a sustainable future for the charity, with a growth in fundraised income despite the difficult environment and a supported plan to release a portion of our permanent endowment to ensure that the charity continues for future generations.

As ever, all of this could not have been achieved without the love, commitment and support of our incredible girls, staff, volunteers and supporters. We will continue to build on the strong and inspiring roots of our movement, to develop a safe haven for girls and young women across England and Wales where they can learn more about themselves and the world, make new friends and importantly, have fun.

Iana Vidal

Chair

Girls Friendly Society in England and Wales

Chair’s report 30 September 2020

Girls Friendly Society in England and Wales 4

Trustees’ report 30 September 2020

The trustees of Girls Friendly Society in England and Wales (GFS) present the Trustees’ Report and Financial Statements for the year ended 30 September 2020.

This report has been prepared in accordance with Part VI of the Charities Act 2011 and constitutes a directors’ report for the purposes of company legislation.

The financial statements have been prepared in accordance with the accounting policies set out on pages 33 to 39 of the attached financial statements and comply with the charitable company’s memorandum and articles of association and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102), effective from accounting periods commencing 1 January 2015 or later.

OBJECTS, ACTIVITIES AND PUBLIC BENEFIT

Objects

GFS is established for the public benefit and for general charitable purposes according to the laws of England and Wales and in particular, but not exclusively, to advance education and any other charitable purpose for the benefit of women and girls. The charity works with women and girls of all religious faiths and of none.

Public benefit aims

The trustees have referred to the Charity Commission’s guidance on public benefit when reviewing the charity’s aims and activities for the year and the organisational plans for future periods.

Our approach

Our vision is a world where all girls and young women fulfil their potential.

Our mission is to provide opportunities for girls and young women to develop their confidence, self-esteem, wellbeing and resilience to enable them to fulfil their potential.

Our values: we endeavour to engage every girl, young woman, parent, volunteer and member of staff with the following principles of behaviour:

Kindness  Respect
Humility  Empathy
Trust
Compassion

Girls Friendly Society in England and Wales 5

Trustees’ report 30 September 2020

OBJECTS, ACTIVITIES AND PUBLIC BENEFIT (continued)

The need

In 2020, there were a number of key pieces of research launched including that of Plan International UK who released The State of Girls’ Rights in the UK, 2020 which identified that:

Girls do not feel safe in public;
2 in 3 girls aged 14-21 have been sexually harassed in public;
Mental health issues amongst girls are rising and they don’t feel this is being taken seriously; and
Where a girl lives affects her experiences and opportunities.

In addition, The Fawcett Society shared its Unlimited Potential Report on the effect of gender stereotypes on young children. Some of their key findings remind us all why the work of GFS remains so important:

36% girls aged 7-10 say they are made to feel their looks are their most important attribute;
66% of people think people treat girls and boys differently because of their gender; and
56% of primary school teachers had one session or less on challenging gender stereotypes during their teacher training and 44% haven’t had any since.

Research such as this remains vital to ensure our work is evidence based but, alongside such research, it is also so very helpful to hear from individuals such as Alicia in Bishop Auckland who wrote to say:

'Can I just say that it has honestly made me so happy that an organisation like GFS exists? I would have loved to have been part of something like this when I was younger! There is so much pressure on women at any age but especially as young adults to look, perform, speak and act a certain way, and without guidance from an organisation like yourselves they will get their guidance from Instagram. And that's not a world I want to see. Girls at any age should be standing up strong and working for what they believe in and your charity gives them a voice and keeps them safe! I'm only 25 so it wasn't so long ago I felt the pressures as a teenager! Thank you for helping our future women! '

What we do

It is well known that girls and young women start to lose confidence at key times in their development. GFS is there to support them through these difficult transitions by providing opportunities for them to come together in a safe environment that is designed to inspire and empower. The GFS role models offer this while girls have fun, make friends and develop their understanding about themselves and the world around them to enable them to go on to achieve their personal vision and live as confident, independent women.

Girls Friendly Society in England and Wales

Trustees’ report 30 September 2020

OBJECTS, ACTIVITIES AND PUBLIC BENEFIT (continued)

We developed our programme in consultation with the groups and informed by the issues girls and young women face today, and current academic thinking in youth development. Our small staff team and national network of more than 200 trained volunteers deliver a genderspecific programme of activities, services and support to girls and young women aged between 5 - 25 in a safe, single gender, non-judgmental environment throughout England and Wales designed to:

Build self-esteem, wellbeing and resilience;
Create support networks and foster friendship; and
Develop healthy life coping and decision-making skills.

Our groups meet weekly for one to two hours. A typical session will start with check-in and circle time where girls discuss their week and any plans for future sessions. This is followed by one or two activities selected from the themes below. Sessions end with reflection time.

GFS Programme Framework

Self- esteem	"I feel good about myself"	Happy to Be Me "I like myself and am aware of issues affecting girls and young women like me"	Issues	issues affecting girls and young women
			Relationships	relating to others
		My Community "I feel a sense of belonging and connection to people and places"	Volunteer	making a contribution to society
			Trips Out	personal development
Wellbeing	"I am happy and healthy"	Be Creative "I can express myself and have interests and talents"	Arts and Crafts	creativity and self- expression
			Music and Drama	development through performance
		Get Active "I enjoy feeling healthy and positive"	Physical	being active, fit and healthy
Resilience	"I can deal with problems"	Have Fun "I have fun, take risks and like working in a team"	Games	social and emotional skills interpersonal skills and teamwork
			Group Challenge
		Skills for Life "I know how to look after myself and others"	Skill-based	essential life skills

Girls Friendly Society in England and Wales

Trustees’ report 30 September 2020

OBJECTS, ACTIVITIES AND PUBLIC BENEFIT (continued)

For many of the girls and young women, our groups provide stability and an opportunity for them to develop their understanding of the importance of supporting each other and accepting one another, regardless of economic status, race, religion, cultural background, sexual orientation or ability.

We provide guidance, advice and information about a number of topics, issues and themes including friendship, healthy living, positive relationships, happiness and independent living. We also support and promote campaigns addressing issues affecting girls and young women such as sexualisation, abusive relationships, discrimination, the lack of equality in the workplace and everyday sexism.

Strategic aims and objectives

The Board and staff team worked together in 2020 to develop a five year plan that looked back to our roots of 1875 and ahead to our 150[th] anniversary in 2025. We built a plan around the reality that this is an organisation that is needed just as much today as it was when it was founded. The plan has three core fundamentals.

Our first priority is to build on what we have in terms of culture and make the most of the strengths of our people that resulted in a brave, collaborative team that was able to deliver a safe and relevant service for the girls and young women we serve.

Our second priority is to acknowledge that we are proud of what the volunteer groups achieve across England and Wales and grow our impact by implementing an ambitious growth plan to ensure that we can continue to offer support where it is needed, but in an efficient and impactful way.

Our third priority is sustainability and therefore has a focus on assuring the long-term future of the charity. The Third Sector has faced challenges around sustainability and GFS is no different. To continue to build on our founder’s vision and the 150 years of dedication offered by our volunteers, we owe it to them to build a sound and sustainable financial plan.

ACHIEVEMENTS AND PERFORMANCE

Culture

COVID dominated the year for GFS as it did for everyone. The team was dedicated, hardworking and creative which meant that GFS was able to constantly pivot and find a way to continue to provide services for girls and young women who we saw being disproportionately affected by the pandemic. They needed the service more than ever before and we recognised that our commitment to have an effective and supportive culture was vital during this time.

When the Pandemic started we had already carried out a review of the structure, roles and responsibilities. This was to empower the team to focus on what was important but also develop a spirit of responsibility and

Girls Friendly Society in England and Wales

Trustees’ report 30 September 2020

ACHIEVEMENTS AND PERFORMANCE (continued)

accountability. A key part of this work was to establish a Leadership Team which was vital as they worked closely together to carry the team and organisation through COVID. As well as refining job descriptions and developing more effective teams, we developed banks of policies and procedures so that there was real clarity for staff and volunteers and that they felt enabled to make decisions and manage locally.

The staff team adopted a new approach which was all about ensuring the volunteers were served better by us, the employees. The Board worked with the staff team to support the initiative and carried out vital work streams such as an organisational governance review. This also included the launch of BBS - Better Board Staff – to have a more supportive and collaborative approach so that volunteers and girls would all benefit. For example, we made the most of ‘Zoom’ with staff and board members all making a commitment to join volunteer regional and national meetings to develop more meaningful and effective working relationships. We also set up a regular CEO coffee morning to support volunteers through a virtual ‘open door policy’.

We worked hard before, and during, COVID to build excellent relationships with volunteers, support their needs, improve our training and development offer; investing in them so that girls and young women benefitted. We saw the development and implementation of a suite of volunteer training modules as well as a separate one for group leaders. We know that this, alongside our new Group Leader Handbook, will mean we can succession plan and assure a high quality service. We also developed a virtual safeguarding course so we can update and refresh everyone’s safeguarding knowledge annually and ensure a high degree of knowledge to support vulnerable girls and young women.

One of the key parts of our work under culture was to reinvigorate our work to hear girls’ voices. The most notable project was to establish our pilot focus group - the Jane Bonds . They have been meeting weekly to feed into key strands of our strategic planning, decision making and programme development. Their work is going to be an important part of our future alongside such projects as Voices of the Frontline , a project in the North West funded by ROSA that sets out to support girls to have confidence in their own thoughts and voices. This exciting piece of work resulted in the launch of a campaign, designed and implemented by the girls.

The staff team, like others in our sector, saw increased demand for our service alongside operational and funding challenges making it difficult for us to respond. It was so important to keep the team united and strong, especially when we could not be together. We met on Zoom every week and once a month did a training session together as well as a monthly wellness session. Nothing could replace being together but we did all we could to address that gap so that we were as effective and mutually supportive as possible.

Girls Friendly Society in England and Wales

Trustees’ report 30 September 2020

ACHIEVEMENTS AND PERFORMANCE (continued)

We also supported key campaigns such as Show the Salary and Black Lives Matter . We invested in our learning and development as well as initiating important work streams. For example we established an Equality Diversity and Inclusion Taskforce to initiate learning, policy and practice across all teams and the organisation. This was supported by our Day of Learning when we all committed to learning about how to ensure we could be an anti-racist charity.

Growth

Growing our impact is a core ambition for the organisation and in the year of the Pandemic this became all about adapting what we did to develop our offering for girls. GFS responded quickly to the sudden and dramatic impact of COVID; a core team was assembled to monitor external developments, manage decision making and share vital communications for the charity. Of course we had no choice but to close all GFS groups in March 2020, and the closure of the London office in the same month.

The staff team were supported to work from home and they developed an online offer with interactive groups to keep girls connected and supported. At the same time, the team developed a support network for volunteers to keep them connected to the organisation, which for some, was central to their lives and mental wellbeing. Despite the challenges during this time we managed to deliver 13 virtual groups, open two new groups, as well as launch a national online programme: Big Dreamers Club.

In addition we wrote, revised and revised again a regional development plan to plan for safe return and our development. We also developed a bank of regular print-free #StayConnected resources for girls at home. We then went onto prepare the national team by developing a plan, communications, training and resources for a safe return to groups. This was a difficult time but the organisation achieved growth as well as establishing new work.

The Voices from the Frontline campaigning project was important work that will feed into our efforts to become more ‘girl shaped’ as well as enable us to grow our impact with the simple objective of encouraging them to have confidence in their thoughts and then voicing those thoughts.

The organisation has an objective to raise our profile and during this time we supported campaigns as well as contributing to Black History Month with communications such as #sharethemic. We enjoyed working in partnership with others such as International Women’s Day and a related project with Google, and International Day of the Girl and our work with Festival of the Girl. Our communication is vital for this and we invested some time to agree key messaging to, for example, develop our organisational position on feminism, revise our values, as well as early work to review our strategic plan.

Girls Friendly Society in England and Wales 10

Trustees’ report 30 September 2020

ACHIEVEMENTS AND PERFORMANCE (continued)

Our impact measurement and our ability to comment on this relies heavily on our data and we recognise how important it is to get this right for the charity, our partners and supporters. We took some time to develop a database baseline in SalesForce, establish a decluttered layout, as well as review our data. We have more work to do on this but are excited about what this early work will be able to do in terms of clear reporting.

Sustainability and future plans

Our work to address this fundamental foundation stone was also challenged by COVID. We developed a fundraising strategy and started to build a team, a case for support and key processes and policies. COVID meant that income was significantly reduced across the sector for fundraising and investments because of the financial crisis in the markets which had an impact for GFS as it did for others in the sector.

A variety of funders announced emergency funding for charities, but these were not open to GFS as our charitable objects did not meet the criteria for support. There was increased competition and funders often chose to continue to support charities they had already worked with rather than new organisations. Despite this the team did well and we started to see a pipeline that generated income from trusts and foundations as well as corporate partnerships such as Legal & General.

The charity was advised by its investment managers that the impact on financial markets would affect our returns for 2019/20, and we recognised these in our reporting by developing a reforecast and being mindful of keeping costs down as much as possible. Furthermore, we were proud to successfully work through a retender process and achieve a positive outcome for the charity. This review of our investment programme will ensure that we have a total return approach so that the capital is better protected and less at risk.

We were assisted through this by the strong leadership of the team which was vital to us steering a steady course through such difficult times. It enabled us to implement our new fundraising strategy and develop new financial practices in an effort to support volunteers and governance, as well as review key lines of expenditure to save funds – approximately £40k this year.

An important contributing factor was to successfully apply to the Charity Commission to release £3.5M from permanent endowments and designate this to invest in the fundraising strategy and give the charity time to achieve our strategic plan. In 2019, to support the organisation’s five year strategic plan, " A Clear View Ahead ", trustees applied to the Charity Commission to release part of the Permanent Endowment in order to that it can be applied towards the implementation of a new fundraising strategy for the charity, in furtherance of the Objects. The new fundraising strategy was designed so that the charity could invest in the adoption of

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ACHIEVEMENTS AND PERFORMANCE (continued)

a more diverse approach to income streams, including trusts & foundations, corporate giving, legacy, individual and regular giving as well as membership.

These plans for long term sustainability were rooted in the fact that the charity sought to invest this sum in stages over a period of ten years. This was to allow the charity to invest more confidently in the first few years to establish this change programme and weather any financial shock or market volatility, with a view to reassessing funding needs in later years when a diversified income strategy is successfully embedded. Building a sustainable fundraising base is a long-term project and whilst we will see income generated in year one of the plan, we assume that no meaningful impact will be seen before 2-3 years because it takes time to develop the team, the resources and the pipeline.

During this time we not only need investment to continue to deliver the services in place but also to invest in growing the income generation team. Therefore we will seek to grow the team by recruiting two members of the team in 2020 and a further two in 2021 before reviewing our progress and having the flexibility to adjust our plans in line with the financial and strategic needs of the organisation. Estimating where to invest is not straightforward. However, the fundraising strategy has been developed around the best ROI and around opportunity allowing time for these income streams to mature and come to fruition.

Since writing the original strategy, it is worth noting that COVID-19 has made every strand of this plan more challenging. Operationally the need has grown; the girls we work with have become isolated, vulnerable and in need of a service. There is much evidence from organisations such as NSPCC and Young Minds that suggest this need is going to increase and that post COVID-19 charities such as GFS will need to address the ‘Post Traumatic Stress’ that young people are going to emerge with. Financially it is challenging because investments have declined and certain areas of fundraising declined dramatically. This is reinforcing that we need to diversify our income streams but with a real focus on areas of success.

FINANCIAL REVIEW

Results for the year

The statement of financial activities on page 29 shows net expenditure for the year before investment losses of £87,853 (2019 – £240,106) being a deficit on unrestricted funds of £34,398 (2019 – £155,646), a deficit on restricted funds of £53,455 (2019 – £83,348) and a deficit on the endowment funds of £nil (2019 – £1,112).

Total income for the year was £649,543 (2019 – £550,093) with income from investments and interest receivable comprising 74% (2019 – 95%)

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FINANCIAL REVIEW (continued)

of the total and amounting to £481,259 (2019 – £509,539). Included in the income is the gain from the sale of freehold land and buildings amounting to £131,086. Although the income yield from investments is welcome, it may not be sustainable and there is a need for it to be supplemented by substantial other sources of income in the future to ensure the financial security which will safeguard the charity’s services for the long term.

Expenditure in the year totalled £737,396 (2019 – £790,199) with expenditure on community and school based programmes amounting to £639,822 (2019 – £719,163). The charity’s largest expense item continues to be staff costs reflecting the importance of people to the successful achievement of the organisation’s aims – both paid staff and volunteers. The trustees continue to strive to achieve the charity’s aims within the framework of providing a high quality service to the girls and young women who require the charity’s support.

The final net movement in funds for the year, after net investment losses of £940,231 (2019 – £138,042) amounted to losses of £1,028,084 (2019 – £378,148).

Over recent years the charity has made substantial deficits on its continuing activities. Like many other charitable organisations, the impact of COVID, changes in Government policy, together with the economic climate have had a major effect on fundraising plans. Despite this, we have developed a sensible strategy, recruited a team and had some good successes in grant and corporate relationships.

Financial position

Free reserves and reserves policy

GFS’ policy is to maintain adequate level of cash or free reserves, net of the pension fund deficit, of around 3-4 months’ expenditure, so that the charity can at least fund a baseline service, should it ever be in a position of not being able to meet its short-term cash flow needs. The reserves are, in the main, restricted to generate income to fund the service; we are unable to access these as free reserves. However, the Trustees have structured the reserves to protect the service and also allow the charity to continue to fundraise in order to prevent any shortfall in cash flow (should it arise) becoming an on-going issue.

The charity carries a pension deficit or £226,360 that also needs to be mitigated by our reserves. The endowment interest provides the charity with a more sustainable income stream to fund the baseline service and to help erode the pension deficit over time. The additional fundraising income is being built on top of the strong financial foundation the endowment provides, to allow the charity to innovate and to meet the growing demand for our services.

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Trustees’ report 30 September 2020

FINANCIAL REVIEW (continued)

Free reserves and reserves policy (continued)

In 2019, the Leadership Team and Board of Trustees recognised that the charity needed to adopt a new strategy to be able to meet the growing need our service users and volunteers were facing in the communities. Across the country other youth services had been systematically closing due to years of austerity measures taking their toll.

In 2020, we were successful in our application to the Charity Commission to move £3.5m from the restricted endowment to designated funds. These funds are now designated to fund the growth in our fundraising capability so that we can develop a sustainable future for the charity by diversifying our income portfolio beyond being solely reliant on our endowment.

In order for GFS to remain socially impactful, we also need to evolve our services to fully meet the changing needs of the girls we serve. While the reserves may appear significant, they cannot contribute to our innovation or expansion costs financially or legally. In actuality, our unrestricted free reserves net of the pension fund deficit, and therefore the ones that are available to us, totalled £242,612 at the year end. This equates to just below 4 months expenditure and therefore is in line with the reserves policy.

The new and evolving fundraising team are working on a plan that allows GFS to evolve our clubs digitally, geographically, diversify our volunteers and introduce more robust impact measurements. All of which proved crucial when responding to the pandemic. It is early days but we have seen success evolving in attracting funds from the National Lottery, a Community Fund, Trusts and our first corporate partnership in Legal & General. Alongside this we are managing costs better and finding more affordable ways to deliver our services.

Being a 150 year old youth organisation, we know how remaining relevant to the needs of the girls we serve is vital to making a lasting and meaningful impact. The blended finance of the core model being underpinned by the endowment, but kept fresh and versant by the fundraised income enables GFS to continue to meet our impact goals even as needs change and demand increases.

GFS's fundraising strategy currently focuses on two income streams, Trusts and Foundations and Corporate Social Responsibility. The level of reserves is reflective of the risks and levels of uncertainty associated with these two income streams, and takes into consideration the fact that GFS is still in the very early stages of fundraising rather than being fully funded by our endowment. The reserves policy is reviewed at least annually.

Other funds

In addition to its endowment funds, at 30 September 2020, GFS had restricted funds which totalled £2,273,044 (2019 – £2,391,681) most of

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FINANCIAL REVIEW (continued)

which are restricted to being spent in certain geographic areas and, in particular, specific dioceses. Full details of the funds are given in notes 17 to 19 to the attached financial statements.

As noted above, the charity has certain designated funds which at 30 September 2020 totalled £3,886,167 (2019 – £436,039) and comprise monies invested, in part, to generate income. The increase being attributed to the charity commission granting the release of £3,500,000 from the endowment fund which has been released to designate into the organisational growth and sustainability.

The pension deficit fund of minus £226,360 matches the liability on the balance sheet in respect to the defined benefit pension scheme which the charity contributes to on behalf of certain of its employees. Details of the scheme and the deficit funding determined by an actuary are given in note 24 to the attached financial statements.

The tangible fixed assets fund of £6,610 (2019 – £10,032) represents the net book value of those tangible fixed assets held as part of the charity’s unrestricted funds.

Investment policy

The charity has a portfolio of investments which had a market value as at 30 September 2020 of £9,134,345 (2019 – £10,200,749) comprising listed investments of £9,117,488 (2019 – £10,159,464), and cash awaiting investment of £16,857 (2019 – £41,285). The investment portfolio represents in part the charity’s endowment funds, the capital of which cannot be spent.

Following the worldwide outbreak of the Coronavirus pandemic and its impact on global markets, between 1 October 2019 and 31 March 2020 the market value of the charity’s investments had fallen by approximately 9%. However, since 31 March the value of the investment portfolio has recovered.

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Trustees’ report 30 September 2020

FINANCIAL REVIEW (continued)

Investment policy (continued)

Independent investment managers, who operate within specific guidelines that are set and regularly reviewed by the trustees, manage the charity’s investments. The investment objectives are to achieve the highest possible yield from the portfolio and long term capital growth whilst maintaining the underlying risk at acceptable levels.

The trustees meet with the investment managers regularly to review the performance of the portfolio and the investment strategy.

The charity’s assets

Tangible fixed assets, as well as acquisitions and disposals of fixed assets during the year are recorded in note 11 to the financial statements.

PRINCIPAL RISKS AND UNCERTAINTIES

The trustees have assessed the major risks to which the charity is exposed. Finance, Legal and Regulatory, Operational, People and Safety, Information Security and Impact. The trustees believe that by monitoring these and developing controls they will have established effective systems to mitigate such risks. These activities are designed to identify and manage, rather than eliminate, the risk of failure to achieve the charity’s objectives or to successfully deliver on our strategy.

The trustees discuss risks at every Board meeting, although risks may be raised by the Chief Executive to the Board at any time. The risk management process includes:

Risk identification – including principal risks
Risk assessment – of potential likelihood and estimated severity
Risk response – to accept or remediate current risk, determine corrective action if needed
Risk reporting and monitoring – by staff, RDCs, and Investment and Finance and Audit Committees, and by trustees

The Board uses a Risk Rating matrix to help it focus on the principal risks where we need to develop and execute on mitigating plans of action. The risk rating ensures risks are prioritised – with the lowest priority starting at ‘no action’, increasing to ‘monitor’, then ‘action’, and the highest priorities given to ‘urgent action’ and ‘stop’. There are currently no risks assessed as ‘urgent action’ and ‘stop’.

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PRINCIPAL RISKS AND UNCERTAINTIES (continued)

A summary of the top ten principal risks and uncertainties that have been identified by the trustees follows:

Strategic risk	Operational risk	Outcome	Plans to mitigate risk
Finance	Continuing to run charity on a deficit	Funding to run out in 8-10 years	 Strategic plan developed to generate funds  Fundraising strategy reviewed by Board December 2020  CC has given permission to unlock endowment fund to the value of £3.5M and is now designated
	Failure in investments and/or markets	Reduced funds because of COVID	 This was raised as a risk because of COVID markets  Appropriate reserves in place  Reserves policy in place  Re-tender process achieved  Investment policy in place  Regular monitoring  Good quality financial advice
	Failure to meet regulatory requirements	Action taken by Charity Commission, Companies House, Fundraising Regulator, Information Commissioner's Office	 Understanding legal and regulatory requirements  Monitoring compliance of requirements  Ensuring appropriate skills at board, staff and volunteer level
	Mismanageme nt of staff team or service delivery as a result of COVID-19	Diagnosed case of Coronavirus at GFS in staff team and/or group	 COVID task force managed transition to remote working and digital offer for girls  COVID task force will manage a cautious return to office and re- opening of groups but nothing before March 2021 at earliest

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Trustees’ report 30 September 2020

			 Safe Return policy and pack in place – project lead appointed
	Non- compliance with GDPR	Action taken by the Charity Commission, Companies House or Information Commissioner's Office, Reputational damage, Fine	 GDPR Compliance Forms for groups to sign  GDPR updates required by groups and families  Regular GDPR compliance monitoring  Training and support for staff and volunteers  This will be reviewed as part of budget and post budget action plan
	Unjustified cost per beneficiary ratio	Reduced reach and impact because of COVID	 Possibility of some groups not returning post COVID and our cost per beneficiary ratio worsening in the short term  Virtual groups, volunteer comms planning, online resources  Strategy to increase number of beneficiaries but this has been further delayed because of COVID  Regular monitoring of numbers of beneficiaries  Regular financial monitoring 

Girls Friendly Society in England and Wales 18

Trustees’ report 30 September 2020

PRINCIPAL RISKS AND UNCERTAINTIES (continued)

Strategic risk	Operational risk	Outcome	Plans to mitigate risk
Impact	Inadequate quality of programme	Reduced reach and impact because of COVID	 Continued programme development  Regular training for volunteers  Monitoring of programme delivery and development of QA process  Evaluation process for beneficiaries in development  Virtual programme and BDC
	Inadequate quality of delivery/ operations	Reduced reach and impact because of COVID	 Regular monitoring of stakeholder journey Development of evaluation process for beneficiaries
	Closure of GFS groups due to unwillingness to be compliant	Reduced reach and impact because of COVID	 Clear comms from HO to groups regarding compliance position  Clarity of support for compliance  Decisive action if this is not achieved – two groups closed August 20 
	Any finance, legal, regulatory, operational, safeguarding, cyber security or impact issue or incident with GFS worldwide or a GFS in another country	Reduced reach and impact because of COVID	 Clarification of GFS England & Wales’ role in and relationship with GFS worldwide  Engagement with GFS worldwide on the topic at next World Council  Request that GFS worldwide monitor and report any incidents  Prepare and plan for PR communications

Girls Friendly Society in England and Wales 19

Trustees’ report 30 September 2020

GOVERNANCE, STRUCTURE, MANAGEMENT AND POLICIES

Governance

Girls Friendly Society in England and Wales is a company limited by guarantee (Company Registration No. 3172713) and is registered under the Charities Act 2011 (Charity Registration No. 1054310).

The board of trustees consists of up to eight elected representatives and four co-opted representatives. The elected representatives comprise the English President, the Welsh President, four GFS members with appropriate skills and two 15-25 year-old representatives.

Trustees are elected by members of GFS in accordance with procedures laid out in the Bye Laws. Newly elected trustees are formally interviewed and their appointment is for a three year term. Trustees may serve for two consecutive terms of office and thereafter must take a break from office. The trustees may from time to time appoint additional trustees either to fill casual vacancies or by way of co-option to the Board.

Each new trustee receives an induction pack, and an existing board member becomes their mentor for at least one year. Trustees are encouraged to attend individual in-house and external training events with or without staff. Trustees also have a member of the Senior Leadership Team as a mentor and who they meet informally to ensure good staffboard communication. This is an initiative that has been started since the launch of the Better Board Staff Focus Group in 2020.

The trustees constitute directors of the charity for the purposes of the Companies Act 2006.

The trustees take responsibility for monitoring the charity’s activities and constant regard is had to the skills mix of the trustees to ensure that the board of trustees has all the necessary skills required to contribute fully to the charity’s development.

No trustee received any remuneration for services as a trustee during the period. No trustee had any beneficial interest in any contract with the charity during the period.

The names of the trustees who served during the year are set out as part of the reference and administrative details on page 1 of this annual report and financial statements.

Statement of trustees’ responsibilities

The trustees (who are also directors of GFS for the purposes of company law) are responsible for preparing the trustees’ report and financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Girls Friendly Society in England and Wales 20

Trustees’ report 30 September 2020

GOVERNANCE, STRUCTURE, MANAGEMENT AND POLICIES (continued)

Statement of trustees’ responsibilities (continued)

Company law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the income and expenditure of the charitable company for that period. Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of the income and expenditure of the charitable company for that period.

select suitable accounting policies and then apply them consistently;
observe the methods and principles in Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102);
make judgements and estimates that are reasonable and prudent;
state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation.

The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Each of the trustees confirms that:

so far as the trustee is aware, there is no relevant audit information of which the charitable company’s auditor is unaware; and
the trustee has taken all the steps needed as a trustee in order to make herself aware of any relevant audit information and to establish that the charitable company’s auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.

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Trustees’ report 30 September 2020

GOVERNANCE, STRUCTURE, MANAGEMENT AND POLICIES

(continued)

Statement of trustees’ responsibilities (continued)

The trustees are responsible for the maintenance and integrity of 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.

Employees

GFS aims to be an equal opportunities employer and applies objective criteria to assess merit. It aims to ensure that no job applicant or employee receives less favourable treatment on the grounds of age, race, colour, nationality, religion, ethnic or national origin, gender, marital status, sexual orientation or disability.

Selection criteria and procedures are reviewed to ensure that individuals are selected, promoted and treated on the basis of their relevant merits and abilities. All employees are given equal opportunity and, where appropriate and possible, special training to enable them to progress both within and outside the organisation. GFS is committed to a programme of action to make this policy effective, and brings it to the attention of all employees.

Key management personnel

The trustees consider that they, together with the Chief Executive and Leadership Team, comprise the key management of the charity in charge of directing and controlling, running and operating the charity on a day to day basis. None of the trustees receives any remuneration in connection with their role as key management personnel.

The remuneration of the Chief Executive and Leadership Team is determined by the trustees after considering and benchmarking against salaries paid for similar roles by other organisations. It is reviewed on an annual basis and staff salaries are externally benchmarked every two years.

Structure and management reporting

Overall responsibility for the charity rests with the trustees who are charged with setting and monitoring the overall strategic direction of the charity and for establishing policy. The trustees, who meet on a regular basis, delegate the day-to-day operation of the charity to the Chief Executive and her Leadership team. The Chief Executive meets with the Chair at least once a month and reports to the trustees on a regular basis. The trustees meet quarterly.

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Trustees’ report 30 September 2020

GOVERNANCE, STRUCTURE, MANAGEMENT AND POLICIES

(continued)

Structure and management reporting (continued)

Within GFS there are three sub-committees: the Investment Committee, the Finance and Audit Committee and the Youth Committee (currently being re-designed). Each comprises two or more trustees, existing GFS members with relevant skills and external specialists. The Board has reviewed its practice and committed to complying with the Charity Governance Code to ensure GFS governance is best practice and has a sense of audit of its own.

Trustees

The trustees who were in office during the year and up to the date of signing the financial statements are listed on page 1 and our thanks goes to them for their incredible support during a difficult year.

Our volunteers

We would like to thank our volunteers, without whom we would not be able to deliver our programme of activities to girls and young women and whose dedication to the girls and young women they serve has been extraordinary during COVID-19.

Fundraising policy

The charity aims to achieve best practice in the way in which it communicates with supporters. It takes care with both the tone of its communications and the accuracy of its data to minimise the pressures on supporters.

The charity’s fundraising activities have always been aligned to professional and ethical practices. We are committed to this approach and are therefore registered with the Fundraising Regulator and signed up to the Fundraising Preference Service. Each year we carry out an annual audit of our practice against the Regulator’s standards as part of our audit process.

Our fundraising practice and performance is regularly monitored against our own fundraising policy and ethical practices which include a commitment to protect the public, vulnerable people, from unreasonably intrusive, persistent or pressurised fundraising practice.

We do not work with commercial fundraising organisations and do not carry out face to face door to door or telephone and digital fundraising. We do not sell or buy personal data and are proud to say that we have received no fundraising complaints in the past year.

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Trustees’ report 30 September 2020

GOVERNANCE, STRUCTURE, MANAGEMENT AND POLICIES

(continued)

Fundraising Policy (continued)

Our donors

We thank the following individuals and organisations who have supported the charity during 2019-20 and formally acknowledge our thanks as a condition of the grant:

Northumbria Police and Crime Commissioner
ROSA Fund for Women

Trustees’ report approved by and signed on behalf of the trustees:

I. Vidal Trustee Approved on: 27 March 2021

Girls Friendly Society in England and Wales 24

Independent auditor’s report Year to 30 September 2020

Independent auditor’s report to the members of Girls Friendly Society in England and Wales

Opinion

We have audited the financial statements of Girls Friendly Society in England and Wales (the ‘charitable company’) for the year ended 30 September 2020 which comprise the statement of financial activities, the comparative statement of financial activities, the balance sheet, the statement of cash flows, the principal accounting policies and the notes to the financial statements. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

give a true and fair view of the state of the charitable company’s affairs as at 30 September 2020 and of 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

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Independent auditor’s report Year to 30 September 2020

the trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the charitable company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The trustees are responsible for the other information. The other information comprises the information included in the annual report and financial statements, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

the information given in the trustees’ report, which is also the directors’ report for the purposes of company law and includes the strategic report, for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the trustees’ report, which is also the directors’ report for the purposes of company law and includes the strategic report, has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ report including the strategic report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report

Girls Friendly Society in England and Wales 26

Independent auditor’s report Year to 30 September 2020

to you if, in our opinion:

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of trustees’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Girls Friendly Society in England and Wales 27

Independent auditor’s report Year to 30 September 2020

Use of our report

This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Amanda Francis (Senior Statutory Auditor) 30 March 2021 For and on behalf of Buzzacott LLP, Statutory Auditor 130 Wood Street London EC2V 6DL

Girls Friendly Society in England and Wales 28

Statement of financial activities

(incorporating an income and expenditure account) Year to 30 September 2020

Notes	General funds £	Designated funds £	Restricted funds £	Endowment funds £	2020 Total funds £	2019 Total funds £
*Income and expenditure* Income from: Donations and legacies 1 Investment income and interest receivable 2 Gain on disposal of tangible fixed asset Charitable activities . Community and school based programmes: grants receivable Other sources . Miscellaneous income Total income Expenditure on: Raising funds 3 Charitable activities: . Community and school based programmes 4 Total expenditure Net expenditure before net investment losses 7 Net losses on investments Net expenditure *Statement of recognised gains* *and losses* Actuarial gains on defined benefit pension scheme 24 Net movement in funds before transfers Transfers between funds 20 Net movement in funds Reconciliation of funds: Fund balances brought forward at 1 October 2019 Fund balances carried forward at 30 September 2020	13,522 395,569 131,086 1,970 7,354	— — — — —	14,352 85,690 — — —	— — — — —	27,874 481,259 131,086 1,970 7,354	25,486 509,539 — 2,808 12,260
	549,501	—	100,042	—	649,543	550,093
	97,574 486,325	— —	— 153,497	— —	97,574 639,822	71,036 719,163
	583,899	—	153,497	—	737,396	790,199
	(34,398) —	— (49,872)	(53,455) (65,182)	— (825,177)	(87,853) (940,231)	(240,106) (138,042)
	(34,398) —	(49,872) —	(118,637) —	(825,177) —	(1,028,084) —	(378,148) —
	(34,398) —	(49,872) 3,500,000	(118,637) —	(825,177) (3,500,000)	(1,028,084) —	(378,148) —
	(34,398) 283,620	3,450,128 436,039	(118,637) 2,391,681	(4,325,177) 7,212,767	(1,028,084) 10,324,107	(378,148) 10,702,255
	249,222	3,886,167	2,273,044	2,887,590	9,296,023	10,324,107

All of the charity’s activities derived from continuing operations during the above financial period and the immediately preceding financial period.

All recognised gains and losses are included in the above statement of financial activities.

A full comparative statement of financial activities for the year to 30 September 2019 is set out on page 30.

Girls Friendly Society in England and Wales 29

Comparative statement of financial activities

(incorporating an income and expenditure account) Year to 30 September 2019

Notes	General funds £	Designated funds £	Restricted funds £	Endowment funds £	2019 Total funds £
Income and expenditure Income from: Donations and legacies 1 Investment income and interest receivable 2 Charitable activities . Community and school based programmes: grants receivable Other sources . Miscellaneous income Total income Expenditure on: Raising funds 3 Charitable activities: . Community and school based programmes 4 Total expenditure Net expenditure before net investment losses 7 Net (losses) gains on investments Net expenditure Statement of recognised gains and losses Actuarial gains on defined benefit pension scheme 24 Net movement in funds before transfers Transfers between funds 17 Net movement in funds Reconciliation of funds: Fund balances brought forward at 1 October 2018 Fund balances carried forward at 30 September 2019	25,486 409,508 2,808 12,260	— — — —	— 100,031 — —	— — — —	25,486 509,539 2,808 12,260
	450,062	—	100,031	—	550,093
	71,036 534,672	— —	— 183,379	— 1,112	71,036 719,163
	605,708	—	183,379	1,112	790,199
	(155,646) 3,848	— (12,547)	(83,348) 51,688	(1,112) (181,031)	(240,106) (138,042)
	(151,798) —	(12,547) —	(31,660) —	(182,143) —	(378,148) —
	(151,798) 350,000	(12,547) (350,000)	(31,660) —	(182,143) —	(378,148) —
	198,202 85,418	(362,547) 798,586	(31,660) 2,423,341	(182,143) 7,394,910	(378,148) 10,702,255
	283,620	436,039	2,391,681	7,212,767	10,324,107

Girls Friendly Society in England and Wales 30

Balance sheet 30 September 2020

Notes	2020 £	2020 £	2019 £	2019 £
Fixed assets Tangible assets 11 Investments 12 Current assets Debtors 13 Short term deposits Cash at bank and in hand Liabilities: Creditors: amounts falling due within one year 14 Net current assets Total net assets less current liabilities Provisions for liabilities 15 Total net assets The funds of the charity: Funds and reserves Permanent endowment funds 16 Restricted income funds . Trust funds 18 . Diocesan funds 19 Unrestricted income funds . Designated funds 20 . General funds . Tangible fixed assets fund . Free reserves . Pension deficit fund 24	110,479 88,019 262,178	6,610 9,134,345	120,349 78,531 201,665	68,388 10,200,749
		9,140,955 381,429		10,269,137 330,970
	460,676 (79,248)		400,545 (69,575)
	243,018 2,030,026		250,959 2,140,722
		9,522,383 (226,360)		10,600,107 (276,000)
		9,296,023		10,324,107
		2,887,590 2,273,044 4,135,389		7,212,767 2,391,681 719,659
	3,886,167		436,039
	6,610 468,972 (226,360)		10,032 549,588 (276,000)
	249,222		283,620

		9,296,023		10,324,107

The financial statements were approved by the trustees of Girls Friendly Society in England and Wales Company Registration No. 3172713 (England and Wales) and signed on its behalf by:

I. Vidal

Trustee

Approved on: 27 March 2021

Girls Friendly Society in England and Wales 31

Statement of cash flows Year to 30 September 2020

Notes	2020 £	2019 £
Cash flows from operating activities: Net cash used in operating activities A Cash flows from investing activities: Investment income received Interest received Purchase of tangible fixed assets Proceeds from the disposal of tangible fixed assets Proceeds from the disposal of investments Purchase of investments Net cash provided by investing activities Change in cash and cash equivalents in the year Cash and cash equivalents at 1 October 2019 B Cash and cash equivalents at 30 September 2020 B	(721,763)	(798,225)
	476,129 561 (1,076) 190,000 563,471 (461,749)	521,901 434 (7,680) — 1,082,441 (809,510)
	767,336	787,586
	45,573 321,481	(10,639) 332,120
	367,054	321,481

Notes to the statement of cash flows for the year to 30 September 2020.

A Reconciliation of net movement in funds to net cash used in operating activities

activities
	2020 £	2019 £
Net movement in funds (as per the statement of financial activities) Adjustments for: Depreciation charge Losses on investments Investment income Interest receivable Gain on disposal of tangible fixed assets Decrease in debtors Increase (decrease) in creditors Decrease in pension provision Net cash used in operating activities	(1,028,084) 3,939 940,231 (480,698) (561) (131,086) 14,463 9,673 (49,640)	(378,148) 5,943 138,042 (509,105) (434) — 4,396 (11,919) (47,000)
	(721,763)	(798,225)

B Analysis of cash and cash equivalents

Analysis of cash and cash equivalents
	2020 £	2019 £
Cash at bank and in hand Short term deposits (less than three months) Cash held by investment managers Total cash and cash equivalents	262,178 88,019 16,857	201,665 78,531 41,285
	367,054	321,481

Girls Friendly Society in England and Wales 32

Principal accounting policies 30 September 2020

The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are laid out below.

Basis of preparation

These financial statements have been prepared for the year to 30 September 2020 with comparative information provided in respect to the year to 30 September 2019.

The financial statements have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant accounting policies below or the notes to these accounts.

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (Charities SORP FRS 102) issued on 16 July 2014, the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

The charity constitutes a public benefit entity as defined by FRS 102.

The financial statements are presented in sterling and are rounded to the nearest pound.

Critical accounting estimates and areas of judgement

Preparation of the financial statements requires the trustees and management to make significant judgements and estimates.

The items in the financial statements where these judgements and estimates have been made include:

estimating the useful economic life of tangible fixed assets for the purpose of determining the annual depreciation charge;
the underlying assumptions used by the actuary in determining the deficit on the defined benefit pension scheme;
the allocation of expenditure across charitable activities; and
the estimation of future income and expenditure flows for the purpose of assessing going concern (see below).

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Principal accounting policies 30 September 2020

Assessment of going concern

The trustees have assessed whether the use of the going concern assumption is appropriate in preparing these accounts. The trustees have made this assessment in respect to a period of at least one year from the date of approval of these accounts.

The trustees have concluded that there are no material uncertainties related to events or conditions that may cast significant doubt on the ability of the charity to continue as a going concern. The trustees are of the opinion that the charity will have sufficient resources to meet its liabilities as they fall due. In making their assessment, the trustees have considered the impact of the Covid-19 pandemic on the charity. The Covid-19 pandemic has had a significant economic impact in ways which have been outside of the charity’s control. The full impact on the charity’s income and expenditure and financial position following the emergence of the global Covid-19 pandemic is still unknown. In the next financial year, the charity’s investment income may again be adversely affected because of continuing volatility in listed investment markets and the impact of the pandemic on company dividends. Other categories of income may continue to be affected for at least another year. However, the pandemic has led also to some positive new initiatives and the successful application to the Charity Commission to release £3.5m from permanent endowment funds has given the charity the flexibility and time to achieve its strategic plan. Despite the disruption caused by Covid-19, as a team, GFS achieved and delivered in a number of strategic areas:

There was focus on reforming and strengthening the charity’s culture, revising its policies to ensure a safe environment and creating more space for learning and collaboration across the organisation.
The charity opened new groups physically and virtually, introduced new programmes and sessions, and provided girls with extra support during these challenging times.
The charity continued to work towards building a sustainable future, with a growth in fundraised income despite the difficult environment and a supported plan to release a portion of our permanent endowment to ensure that the charity continues for future generations.

The trustees will continue to keep both income and expenditure under review but do not anticipate that the impact on the charity’ finances will be material or impact on the charity’s going concern.

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Principal accounting policies 30 September 2020

ASSESSMENT OF ONGOING CONCERN (continued)

The most significant areas of judgement that affect items in the accounts are detailed above. With regard to the next accounting period, the year ending 30 September 2021, the most significant areas that affect the carrying value of the assets held by the charity are the level of investment return and the performance of the investment markets (see the investment policy and the risk management sections of the trustees’ report for more information).

Income recognition

Income is recognised in the period in which the charity has entitlement to receipt, the amount can be measured reliably and it is probable that the funds will be received.

Income comprises donations, legacies, investment income, interest receivable, income from charitable activities and miscellaneous income. Donations are recognised when the charity has confirmation of both the amount and settlement date. In the event of donations pledged but not received, the amount is accrued for where the receipt is considered probable. In the event that a donation is subject to conditions that require a level of performance before the charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those conditions is wholly within the control of the charity and it is probable that those conditions will be fulfilled in the reporting period.

In accordance with the Charities SORP FRS 102 volunteer time is not recognised.

Legacies are included in the statement of financial activities when the charity is entitled to the legacy, the executors have established that there are sufficient surplus assets in the estate to pay the legacy, and any conditions attached to the legacy are within the control of the charity.

Entitlement is taken as the earlier of the date on which either: the charity is aware that probate has been granted, the estate has been finalised and notification has been made by the executor to the charity that a distribution will be made, or when a distribution is received from the estate. Receipt of a legacy, in whole or in part, is only considered probable when the amount can be measured reliably and the charity has been notified of the executor’s intention to make a distribution. Where legacies have been notified to the charity, or the charity is aware of the granting of probate, but the criteria for income recognition have not been met, then the legacy is treated as a contingent asset and disclosed if material.

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Principal accounting policies 30 September 2020

Income recognition (continued)

Dividends are recognised once the dividend has been declared and notification has been received of the dividend due.

Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank.

Income from charitable activities comprises grants from government and other agencies. Such income is recognised when the charity has entitlement to the funds under agreements or other the contractual arrangements for the payment of each grant.

Expenditure recognition

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to make a payment to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably.

All expenditure is accounted for on an accruals basis. Expenditure comprises direct costs and support costs. All expenses, including support costs, are allocated or apportioned to the applicable expenditure headings. The classification between activities is as follows:

a. Expenditure on raising funds includes all expenditure associated with raising funds for the charity. This includes investment management fees, staff costs associated with fundraising and an allocation of support costs.
b. Expenditure on charitable activities includes all costs associated with furthering the charitable purposes of the charity through the provision of its charitable activities as described in the trustees’ report i.e. providing opportunities for girls and young women to develop their self confidence, wellbeing and resilience to enable them to fulfil their potential. Such costs include:
Staff costs and associated expenses
Day to day running expense of schemes and projects
Special projects and equipment
Maintenance and building costs for the schemes and projects.

This expenditure includes both costs that can be allocated directly to such activities and those indirect costs necessary to support them.

All expenditure is stated inclusive of irrecoverable VAT.

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Principal accounting policies 30 September 2020

Allocation of costs

Support costs are those costs that enable charitable activities to be carried out. These costs include expenses relating to personnel development, financial procedures, provision of office services and equipment, and a suitable working environment.

Governance costs comprise the costs involving the public accountability of the charity (including audit costs) and costs in respect to its compliance with regulation and good practice.

Support costs and governance costs are apportioned to expenditure headings based on the headcount relating to each activity.

Tangible fixed assets

All assets costing more than £1,000 and with an expected useful life exceeding one year are capitalised.

Freehold land and buildings Freehold land and buildings are stated in the financial statements at cost and after deducting depreciation.

Depreciation is charged at the following annual rate based on net cost:

Freehold buildings 2%

No depreciation is charged on freehold land.

Other tangible fixed assets All other tangible fixed assets are stated at cost. Depreciation is calculated at the following annual rates in order to write off the cost of each asset over its estimated useful life:

 Computer equipment 33% on cost

Office equipment 20% on cost
Other equipment and furniture 10% on cost
Fittings in leased property Over the period of the lease

Fixed asset investments

Listed investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price.

The charity does not acquire put options, derivatives or other complex financial instruments.

Girls Friendly Society in England and Wales 37

Principal accounting policies 30 September 2020

Fixed asset investments (continued)

Realised gains (or losses) on investment assets are calculated as the difference between disposal proceeds and their opening carrying value or their purchase value if acquired subsequent to the first day of the financial year. Unrealised gains and losses are calculated as the difference between the fair value at the year end and their carrying value at that date. Realised and unrealised investment gains (or losses) are combined in the statement of financial activities and are credited (or debited) in the year in which they arise.

Debtors

Debtors are recognised at their settlement amount, less any provision for non-recoverability. Prepayments are valued at the amount prepaid. They have been discounted to the present value of the future cash receipt where such discounting is material.

Cash at bank and in hand

Cash at bank and in hand represents such accounts and instruments that are available on demand or have a maturity of less than three months from the date of acquisition. Deposits for more than three months but less than one year have been disclosed as short term deposits.

Creditors and provisions

Creditors and provisions are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Creditors and provisions are recognised at the amount the charity anticipates it will pay to settle the debt. They have been discounted to the present value of the future cash payment where such discounting is material.

Fund structure

The general funds comprise free reserves, the tangible fixed assets fund and the pension deficit fund. The free reserves those net assets are which may be used towards meeting the charitable objectives of the charity and which may be applied at the discretion of the trustees.

The pension deficit fund represents the liability in respect to the defined benefit pension scheme to which the charity contributes on behalf of certain of its employees.

The designated funds comprise monies set aside by the trustees for specific purposes.

The restricted funds are monies raised for, and their use restricted to, a specific purpose, or donations subject to donor imposed conditions.

Girls Friendly Society in England and Wales 38

Principal accounting policies 30 September 2020

The permanent endowment funds comprise monies which must be held indefinitely as capital. The income therefrom can be used for general purposes and is credited directly to general funds.

Leased assets

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged to the statement of financial activities on a straight line basis over the lease term.

Pension contributions

The growth plan pension scheme is a multi-employer scheme providing benefits for some 1,300 non-associated employers. It is therefore not possible to identify the underlying share of the charity’s assets and liabilities within the scheme. However, as a member of the scheme, the charity has a legal obligation to make pension deficit reduction payments when required by the scheme’s actuary. The full cost of these repayments, discounted to present values, is recognised in the year a pension deficit reduction plan is agreed.

In July 2014, all eligible members of staff were required to enrol in the charity’s workplace pension scheme, under auto-enrolment. Staff members were entitled to opt out of this scheme. The percentage contribution of salary into the scheme is a minimum rate of 2.5%. The charity pays employer’s contributions at a rate of 7.5%.

Girls Friendly Society in England and Wales 39

Notes to the financial statements 30 September 2020

1 Income from: Donations and legacies

Income from: Donations and legacies
	General funds £	Restricted funds £	Total 2020 funds £
Donations and similar income Legacies 2020 Total funds	10,113 3,409	14,352 —	24,465 3,409
	13,522	14,352	27,874
	General funds £	Restricted funds £	Total 2019 funds £
Donations and similar income Legacies 2019 Total funds	25,456 30	— —	25,456 30
	25,486	—	25,486

2 Income from: Investment income and interest receivable

	General funds £	Restricted funds £	Total 2020 funds £
Investment income (see below) Interest receivable 2020 Total funds	395,008 561	85,690 —	480,698 561
	395,569	85,690	481,259
	General funds £	Restricted funds £	Total 2019 funds £
Investment income (see below) Interest receivable 2019 Total funds	409,074 434	100,031 —	509,105 434
	409,508	100,031	509,539

Investment income was received from the following sources:

	Total 2020 funds £ 58,192 110,160 74,701 174,729 62,916 480,698	Total 2019 funds £
UK equities Overseas equities UK fixed interest based common investment funds Property unit trusts Alternatives		81,889 84,002 90,572 200,784 51,858
		509,105

Girls Friendly Society in England and Wales 40

Notes to the financial statements 30 September 2020

3 Expenditure on: Raising funds

Expenditure on: Raising funds
	General funds £	Restricted funds £	Total 2020 funds £
Investment manager’s fees Staff costs 2020 Total funds	28,950 68,624	— —	28,950 68,624
	97,574	—	97,574
	General funds £	Restricted funds £	Total 2019 funds £
Investment manager’s fees Staff costs 2019 Total funds	31,984 39,052	— —	31,984 39,052
	71,036	—	71,036

4 Expenditure on: Charitable activities – community and school based programmes

programmes
	General funds £	Restricted funds £	Endowment funds £	Total 2020 funds £
Staff costs and recruitment Staff travel, training and subsistence Direct volunteer costs Direct project costs Direct restricted project costs Premises Office, administration and miscellaneous Marketing and communications Governance costs (note 6) 2020 Total funds	311,917 8,173 6,257 25,287 — 64,238 40,321 3,103 27,029	100,492 2,339 1,790 7,208 3,122 18,383 11,540 888 7,735	— — — — — — — — —	412,409 10,512 8,047 32,495 3,122 82,621 51,861 3,991 34,764
	486,325	153,497	—	639,822

	General funds £	Restricted funds £	Endowment funds £	Total 2019 funds £
Staff costs and recruitment Travel, training and subsistence Direct volunteer costs Direct project costs Premises Office, administration and miscellaneous Marketing and communications Governance costs (note 6) 2019 Total funds	333,801 14,170 18,493 37,530 69,336 37,020 4,595 19,727	117,221 4,979 6,497 8,768 24,361 13,007 1,615 6,931	— — — — 1,112 — — —	451,022 19,149 24,990 46,298 94,809 50,027 6,210 26,658
	534,672	183,379	1,112	719,163

Girls Friendly Society in England and Wales 41

Notes to the financial statements 30 September 2020

5 Support costs

Support costs are those costs which enable the charitable work of GFS. They include indirect overheads and many of the head office costs which facilitate the branches and projects.

Support costs included within raising funds and community and school based programmes are as follows:

	General funds £	Restricted funds £	Endowment funds £	Total 2020 funds £
Staff costs and related costs Travel, training and subsistence Premises Office administration and miscellaneous Governance costs (note 6) 2020 Total funds	94,240 8,173 64,026 42,629 27,029	26,580 2,339 18,323 12,198 7,735	— — — — —	120,820 10,512 82,349 54,827 34,764
	236,097	67,175	—	303,272

	General funds £	Restricted funds £	Endowment funds £	Total 2019 funds £
Staff costs and related costs Travel, training and subsistence Premises Office administration and miscellaneous Governance costs (note 6) 2019 Total funds	114,947 14,021 63,903 35,233 19,727	26,666 4,927 22,452 12,379 6,931	— — 1,112 — —	141,613 18,948 87,467 47,612 26,658
	247,831	73,355	1,112	322,298

Supports costs are allocated across the expenditure headings in notes 3 and 4 as follows:

	Charitable activities (note 4) £	Total 2020 £	Basis of apportionment
Staff costs and related costs Other support costs: . Travel, training and subsistence . Premises . Office administration and miscellaneous . Governance costs 2020 Total	52,196 10,512 82,349 54,827 34,764		Headcount
		120,820 10,512 82,349 54,827 34,764
	234,648	303,272

Staff costs and related costs Other support costs: . Travel, training and subsistence . Premises . Office administration and miscellaneous . Governance costs 2019 Total	Raising funds (note 3) £ 39,052 — — — — 39,052	Charitable activities (note 4) £ 102,561 18,948 87,467 47,612 26,658 283,246	Total 2019 £	Basis of apportionment
				Headcount
			141,613 18,948 87,467 47,612 26,658
			322,298

Girls Friendly Society in England and Wales 42

Notes to the financial statements 30 September 2020

6 Governance costs

Governance costs
	General fund £	Restricted funds £	Total 2020 funds £
Legal and professional fees Committee expenses 2020 Total funds	25,706 1,323	7,356 379	33,062 1,702
	27,029	7,735	34,764
	General fund £	Restricted funds £	Total 2019 funds £
Legal and professional fees Committee expenses 2019 Total funds	14,441 5,286	5,073 1,858	19,514 7,144
	19,727	6,931	26,658

7 Net expenditure before net investment losses

Net expenditure before net investment losses is stated after charging:

	2020 £	2019 £
Staff costs (note 8) Auditor’s remuneration . Audit – current year’s fee Depreciation Operatinglease rentals	475,332 14,400 3,939 59,839	428,888 19,800 6,253 58,003

8 Staff costs

Staff costs
	2020 £	2019 £
Staff costs during the year were as follows: Wages and salaries Social security costs Pension costs Pension scheme adjustment	417,607 31,715 75,650 (49,640)	367,539 34,351 73,181 (46,183)
	475,332	428,888

Girls Friendly Society in England and Wales 43

Notes to the financial statements 30 September 2020

8 Staff costs (continued)

Staff costs (including wages and staff travel, training and subsistence) by function were as follows:

	Direct costs £	Support costs £	Total 2020 £
Charitable activities Cost of raising funds 2019 Total funds	360,213 —	62,708 68,624	422,921 68,624
	360,213	131,332	491,545
	Direct costs £	Support costs £	Total 2019 £
Charitable activities Cost of raising funds 2019 Total funds	348,289 —	102,561 39,052	450,850 39,052
	348,289	141,613	489,902

The number of employees who earned £60,000 per annum or more (including taxable benefits) during the year was as follows:

	2020	2019
£60,000 - £70,000 £80,000 - £90,000	1 —	— 1

The average number of full time equivalent employees in 2020 was 15 (2019 – 14).

The key management personnel of the charity in charge of directing and controlling, running and operating the charity on a day-to-day basis comprise the trustees, Chief Executive and, from the current year, the Leadership Team. The total remuneration (including taxable benefits and employer's pension contributions) of key management personnel for the year was £220,156 (2019 – £104,022).

9 Trustees’ expenses and related party transactions

During the year five trustees (2019 – two) were reimbursed a total of £1,567 (2019 – £961) for travel and subsistence.

No trustee received any remuneration in respect to their services as a trustee during the year (2019 – nil). During the year, the charity received donations from trustees totalling £641 (2019 - £185).

10 Taxation

Girls Friendly Society in England and Wales is a registered charity and therefore is not liable to income tax or corporation tax on income derived from its charitable activities, as it falls within the various exemptions available to registered charities.

Girls Friendly Society in England and Wales 44

Notes to the financial statements 30 September 2020

The charity is only able to reclaim VAT on very limited expenditure.

11 Tangible fixed assets

Tangible fixed assets
	Freehold land and buildings £	Furniture and equipment £	Total £
Cost At 1 October 2019 Additions Disposals At 30 September 2020 Depreciation At 1 October 2019 Charge for year Disposals At 30 September 2020 Net book values At 30 September 2020 At 30 September 2019	80,588 — (80,588)	23,877 1,076 (5,590)	104,465 1,076 (86,178)
	—	19,363	19,363
	22,232 — (22,232)	13,845 3,939 (5,031)	36,077 3,939 (27,263)
	—	12,753	12,753
	—	6,610	6,610
	58,356	10,032	68,388

During the year the charity disposed of its freehold land and buildings resulting a gain on disposal of £131,086.

12 Investments

Investments
	2020 £	2019 £
Listed investments Market value at 1 October 2019 Additions at cost Disposals at book value (proceeds: £563,494 realised losses £81,838) Net unrealised investment losses Market value at 30 September 2020 Cash held by investment managers	10,159,464 461,749 (645,332) (858,393)	10,570,437 809,510 (1,127,330) (93,153)
	9,117,488 16,857	10,159,464 41,285
	9,134,345	10,200,749

It has not been possible to determine the cost of listed investments at 30 September 2020 exactly, as certain investments were purchased many years ago and records of cost cannot be obtained without incurring significant time and cost, which in the opinion of the trustees, is not justified.

Girls Friendly Society in England and Wales 45

Notes to the financial statements 30 September 2020

Investments (continued)

The worldwide outbreak of the Coronavirus pandemic and its impact on global markets, between 1 October 2019 and 30 September 2020 meant that the market value of the charity’s investments had fallen by approximately 9%. As a result, the GFS Trustees reviewed the investment policy and have implemented a balanced investment objective going forwards; to move away from income return basis to a total return basis. Returns generated from a balanced approach are a combination of income and the potential for capital growth, with the intention to protect against inflation over the time horizon and unusual exceptions in market downturns, whilst providing an income for the charity in line with the portfolio aim.

Listed investments held at 30 September 2020comprised the following:

	2020 £	2019 £
UK fixed interest based common investment funds UK equity based common investment funds Overseas equity based common investment funds Property unit trusts Other	1,918,102 454,056 1,976,888 4,015,341 753,101	2,015,938 1,030,043 1,930,954 4,253,022 929,507
	9,117,488	10,159,464

All listed investments held are dealt in on a recognised stock exchange.

At 30 September 2020, the charity had the following material investment holdings:

	Market value £	Percentage of portfolio %
The Charities Property Fund CBF Fixed Interest Security Fund The Property Income Trust for Charities CBF Property Fund Schroder Income Maximiser	2,447,770 1,469,761 935,362 632,209 818,583	27 16 10 7 9

13 Debtors

Debtors
	2020 £	2019 £
Prepayments Investment income receivable Accrued grant income	4,769 105,710 —	19,129 101,118 102
	110,479	120,349

Girls Friendly Society in England and Wales 46

Notes to the financial statements 30 September 2020

14 Creditors

Creditors
	2020 £	2019 £
Expense creditors Other taxes and social security costs Other creditors Accruals	19,419 14,318 1,318 44,193	27,385 12,578 1,761 27,851
	79,248	69,575

15 Provisions for liabilities

Provisions for liabilities
	2020 £	2019 £
Provision for pension scheme deficit reduction payments (note 24) . Payable within one year . Payable within one to two years . Payable within two to five years . Payable after five years	51,000 53,000 122,360 —	50,000 51,000 163,000 12,000
	226,360	276,000

16 Endowment funds

The capital funds of the charity include permanently endowed monies, which must be retained indefinitely:

	At 1 October 2019 £	Transfers (see below) £	Investment gains £	At 30 September 2020 £
Endowment fund Francis Street fund	5,268,481 1,944,286	(2,555,000) (945,000)	(602,379) (222,798)	2,111,102 776,488
	7,212,767	(3,500,000)	(825,177)	2,887,590
	At 1 October 2018 £	Expenditure £	Investment gains £	At 30 September 2019 £
Endowment fund Francis Street fund	5,401,832 1,993,078	(1,112) —	(132,239) (48,792)	5,268,481 1,944,286
	7,394,910	(1,112)	(181,031)	7,212,767

Girls Friendly Society in England and Wales 47

Notes to the financial statements 30 September 2020

17 Transfers

On 1 June 2020, the Charity Commission for England and Wales gave the trustees the authority to spend up to £3,500,000 over a ten year period from the charity’s permanent endowment funds and to transfer that sum to unrestricted funds.

The two endowment funds are as follows:

 Endowment fund

The endowment fund was established under a Charity Commission Scheme dated 31 July 2002. The Scheme replaces former trusts, a Scheme of the Commissioners dated 15 November 1972 and declaration of trusts dated 5 September 1974 and 21 November 1976. It states that income and capital shall be used:

the trustees must first apply the income to meet the proper costs of administering the charity and of managing its assets and thereafter the remaining income must be applied in furthering the objects of the charity; and
for the object of the charity, the trustees may also apply expendable endowment and permanent endowment but only on such terms for the replacement of the amount spent as approved by the Commissioners.

 Francis Street Fund

The Francis Street Fund was established during the year ended 30 September 2004 when the Francis Street hostel, which was managed by the charity, was sold by the freeholder. Under the terms of the disposal, the net proceeds were donated to the charity to be held as a permanent endowment.

Restricted funds – summary

stricted funds – summary
	At 1 October 2019 £	Income £	Expenditure £	Investment losses £	At 30 September 2020 £
Society funds – restricted grants Trust funds (note 18) Diocesan funds (note 19)	— 250,960 2,140,721	14,352 6,999 78,691	(14,352) (14,601) (124,544)	— (340) (64,842)	— 243,018 2,030,026
	2,391,681	100,042	(153,497)	(65,182)	2,273,044

Girls Friendly Society in England and Wales 48

Notes to the financial statements 30 September 2020

Restricted funds (continued)

Restricted funds(continued)
	At 1 October 2018 £	Income £	Expenditure £ — (19,572) (163,807) (183,379)	Investment gains £	At 30 September 2019 £
Society funds – restricted grants Trust funds (note 18) Diocesan funds (note 19)	— 258,637 2,164,704	— 1,260 98,771		— 10,635 41,053	— 250,960 2,140,721
	2,423,341	100,031		51,688	2,391,681

18 Restricted funds - Trust funds

The income funds of the charity include restricted trust funds comprising the following unexpended balances of donations, grants and other income held on trusts to be applied for specific purposes:

	At 1 October 2019 £	Income £	Expenditure £	Investment gains £	At 30 September 2020 £
Packe Holiday & Housing Trust Greenlands, Peel, Isle of Man Almoners Trust Total	192,503 49,755 8,702	5,535 1,197 267	(11,200) (2,895) (506)	(270) (57) (13)	186,568 48,000 8,450
	250,960	10,214	(14,601)	(339)	243,018

	At 1 October 2018 £	Income £	Expenditure £	Investment gains £	At 30 September 2019 £
Packe Holiday & Housing Trust Greenlands, Peel, Isle of Man Almoners Trust *Total*	199,119 50,552 8,966	— 1,260 —	(15,067) (3,826) (679)	8,451 1,769 415	192,503 49,755 8,702
	258,637	1,260	(19,572)	10,635	250,960

The use of the trust funds held at 30 September 2020 is restricted to the following:

 Packe Holiday & Housing Trust

The provision of housing and holidays for the needy.

 Greenlands, Peel, Isle of Man

The furtherance of the charity’s objectives in the Isle of Man.

 Almoners Trust

The provision of support for elderly members.

Girls Friendly Society in England and Wales 49

Notes to the financial statements 30 September 2020

19 Restricted funds - Diocesan funds

The income funds of the charity include restricted Diocesan funds comprising the following unexpended balances of donations, grants and other income held on trusts for use by GFS within the specific dioceses:

	At 1 October 2019 £	Income £	Expenditure £	Investment losses £	At 30 September 2020 £ 143,887 104,326 264,020 236,062 11,691 1,270,040 2,030,026
Dioceses with branch activities: . Birmingham . Carlisle . Liverpool . Other Dioceses without branch activities: . Other Diocesan funds . Branch support funds Total	137,475 99,676 283,838 242,217 11,996 1,365,519	15,005 10,880 7,015 11,195 554 34,041	(7,998) (5,799) (16,513) (14,092) (698) (79,444)	(595) (431) (10,320) (3,258) (161) (50,076)
	2,140,721	78,691	(124,544)	(64,842)

	At 1 October 2018 £	Income £	Expenditure £	Investment gains £	At 30 September 2019 £ 137,475 99,676 283,838 242,217 11,996 1,365,519 2,140,721
Dioceses with branch activities: . Birmingham . Carlisle . Liverpool . Other Dioceses without branch activities: . Other Diocesan funds . Branch support funds Total	136,375 98,878 291,108 244,852 12,126 1,381,365	5,591 4,054 11,968 8,815 437 67,906	(10,319) (7,482) (22,029) (18,528) (918) (104,531)	5,828 4,226 2,791 7,078 351 20,779
	2,164,704	98,771	(163,807)	41,053

20 Designated funds

Designated funds
	At 1 October 2019 £	Investment losses £	Designated/ (released) £ 3,500,000	At 30 September 2020 £
Total– Transitional investment fund	436,039	(49,872)		3,886,167
	At 1 October 2018 £ 798,586	Investment losses £ (12,547)	Designated/ (released) £	At 30 September 2019 £
Total – Transitional investment fund			(350,000)	436,039

The designated fund is for future investment in the fundraising strategy and implementation of the charity’s five year strategic plan.

Girls Friendly Society in England and Wales 50

Notes to the financial statements 30 September 2020

21.Analysis of net assets between funds

	General funds	General funds	General funds	Designated funds £	Restricted funds £	Endowment funds £	Total £
	Free reserves £	Pension deficit fund £	Tangible fixed asset fund £
Fund balances at 30 September 2020 are represented by: Tangible fixed assets Investments Net current assets (liabilities) Pension provision	— — 468,972 —	— — — (226,360)	6,610 — — —	— 3,886,167 — —	— 2,360,588 (87,544) —	— 2,887,590 — —	6,610 9,134,345 381,428 (226,360)
	468,972	(226,360)	6,610	3,886,167	2,273,044	2,887,590	9,296,023

	General funds	General funds	General funds	Designated funds £	Restricted funds £	Endowment funds £	Total £
	Free reserves £	Pension deficit fund £	Tangible fixed asset fund £
Fund balances at 30 September 2019 are represented by: Tangible fixed assets Investments Net current assets (liabilities) Pension provision	— — 549,588 —	— — — (276,000)	10,032 — — —	— 463,665 (27,626) —	— 2,582,673 (190,992) —	58,356 7,154,411 — —	68,388 10,200,749 330,970 (276,000)
	549,588	(276,000)	10,032	436,039	2,391,681	7,212,767	10,324,107

22. Financial commitments

At 30 September 2020 the charity had future minimum commitments under noncancellable operating leases on land and buildings as follows:

	2020 £	2019 £
Payments falling due: . Within one year . Between one and two years	30,164 43,200	50,815 13,502
	73,364	64,317

23. Liability of members

The charity is constituted as a company limited by guarantee. In the event of the charity being wound up members are required to contribute an amount not exceeding £1.

Girls Friendly Society in England and Wales 51

Notes to the financial statements 30 September 2020

24 Pension costs and provisions

The charity participates in a multi-employer scheme which provides benefits to some 950 non-associated participating employers. The scheme is a defined benefit scheme in the UK. It is not possible for the company to obtain sufficient information to enable it to account for the scheme as a defined benefit scheme. Therefore it accounts for the scheme as a defined contribution scheme.

The scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit occupational pension schemes in the UK.

The scheme is classified as a 'last-man standing arrangement'. Therefore, the company is potentially liable for other participating employers' obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the scheme. Participating employers are legally required to meet their share of the scheme deficit on an annuity purchase basis on withdrawal from the scheme.

A full actuarial valuation for the scheme was carried out at 30 September 2017. This valuation showed assets of £794.9m, liabilities of £926.4m and a deficit of £131.5m. To eliminate this funding shortfall, the Trustee of the scheme has asked the participating employers to pay additional contributions to the scheme as follows:

Deficit contributions

£11,243,000 per annum (payable monthly and From 1 April 2019 to 31 January 2025: increasing by 3% each on 1 April

Unless a concession has been agreed with the Trustee, the term to 31 January 2025 applies.

The scheme’s previous valuation was carried out with an effective date of 30 September 2014. This valuation showed assets of £793.4m, liabilities of £969.9m and a deficit of £176.5m. To eliminate this funding shortfall, the Trustee has asked the participating employers to pay additional contributions to the scheme as follows:

Deficit contributions

£12,945,440 per annum (payable monthly and From 1 April 2016 to 30 September 2025: increasing by 3% each on 1 April) £54,560 per annum (payable monthly and From 1 April 2016 to 30 September 2028: increasing by 3% each on 1 April)

The recovery plan contributions are allocated to each participating employer in line with their estimated share of the Series 1 and Series 2 scheme liabilities.

Girls Friendly Society in England and Wales 52

Notes to the financial statements 30 September 2020

Pension costs and provisions (continued)

Where the scheme is in deficit and where the company has agreed to a deficit funding arrangement the company recognises a liability for this obligation. The amount recognised is the net present value of the deficit reduction contributions payable under the agreement that relates to the deficit. The present value is calculated using the discount rate detailed in these disclosures. The unwinding of the discount rate is recognised as a finance cost.

Present values of provision


	2020 £’000	2019 £’000	2018 £’000	2017 £’000	2016 £’000
Present value ofprovision	226	276	323	364	407

Reconciliation of opening and closing provisions

*Reconciliation of opening and closing provisions*
	2020 £’000	2019 £’000
Provision at 1 October 2019 Unwinding of the discount factor Deficit contribution paid Re-measurements – impact of any change in assumptions Remeasurements - amendments to the contribution schedule Provision at 30 September 2020	276 2 (50) 2 (4)	323 5 (47) 6 (11)
	226	276

Income and expenditure impact

*Income and expenditure impact*
	2020 £’000	2019 £’000
Interest expense Re-measurements – impact of any change in assumptions Remeasurements - amendments to the contribution schedule Costs recognised in statement of financial activities	2 2 (4)	5 6 (11)
	—	—

Assumptions

*Assumptions*
Rate of discount	2020 %	2019 % 0.98	2018 % 1.76	2017 % 1.52	2016 %
	0.58				1.15

The discount rates shown above are the equivalent single discount rates which, when used to discount the future recovery plan contributions due, would give the same results as using a full AA corporate bond yield curve to discount the same recovery plan contributions.

Girls Friendly Society in England and Wales 53

Annual Report and Financial Statements

Contents

Reports

Reference and administrative details of the charity, its trustees and advisers

Reference and administrative details of the charity, its trustees and advisers

Chair’s report 30 September 2020

Chair’s report 30 September 2020

Trustees’ report 30 September 2020

OBJECTS, ACTIVITIES AND PUBLIC BENEFIT

Objects

Public benefit aims

Our approach

OBJECTS, ACTIVITIES AND PUBLIC BENEFIT (continued)

The need

What we do

Trustees’ report 30 September 2020

OBJECTS, ACTIVITIES AND PUBLIC BENEFIT (continued)

GFS Programme Framework

OBJECTS, ACTIVITIES AND PUBLIC BENEFIT (continued)

Strategic aims and objectives

ACHIEVEMENTS AND PERFORMANCE

Culture

ACHIEVEMENTS AND PERFORMANCE (continued)

ACHIEVEMENTS AND PERFORMANCE (continued)

Growth

ACHIEVEMENTS AND PERFORMANCE (continued)

Sustainability and future plans

ACHIEVEMENTS AND PERFORMANCE (continued)

FINANCIAL REVIEW

Results for the year

FINANCIAL REVIEW (continued)

Financial position

Trustees’ report 30 September 2020

FINANCIAL REVIEW (continued)

Free reserves and reserves policy (continued)

Other funds

FINANCIAL REVIEW (continued)

Investment policy

Trustees’ report 30 September 2020

FINANCIAL REVIEW (continued)

Investment policy (continued)

The charity’s assets

PRINCIPAL RISKS AND UNCERTAINTIES

Trustees’ report 30 September 2020

PRINCIPAL RISKS AND UNCERTAINTIES (continued)

Trustees’ report 30 September 2020

PRINCIPAL RISKS AND UNCERTAINTIES (continued)

GOVERNANCE, STRUCTURE, MANAGEMENT AND POLICIES

Governance

Statement of trustees’ responsibilities

Trustees’ report 30 September 2020

Statement of trustees’ responsibilities (continued)

GOVERNANCE, STRUCTURE, MANAGEMENT AND POLICIES

Statement of trustees’ responsibilities (continued)

Employees

Key management personnel

Structure and management reporting

GOVERNANCE, STRUCTURE, MANAGEMENT AND POLICIES

Structure and management reporting (continued)

Trustees

Our volunteers

Fundraising policy

GOVERNANCE, STRUCTURE, MANAGEMENT AND POLICIES

Our donors

Independent auditor’s report to the members of Girls Friendly Society in England and Wales

Opinion

Basis for opinion

Conclusions relating to going concern

Other information

Opinions on other matters prescribed by the Companies Act 2006

Matters on which we are required to report by exception

Responsibilities of trustees

Auditor’s responsibilities for the audit of the financial statements

Use of our report

Statement of financial activities

(incorporating an income and expenditure account) Year to 30 September 2020

Comparative statement of financial activities

(incorporating an income and expenditure account) Year to 30 September 2019

Balance sheet 30 September 2020