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2022-03-31-accounts

connect church k,Poifqnd YEAR ENDED 31ST MARCH 2022 Connect Church UK Bradford Court Business Centre 123-131 Bradford Rd, Birmingham B12 ONS.. 0121766 7600 info@connectchurchuk.com www.connectchurchuk.com Registered Charity no. 1133824 Company No. 07003576

CONNECT CHURCH UK

Trustees’ Annual Report and Financial Statements For the year ended 31 March 2022

Contents Page
Trustees’ Annual Report 3
Independent Examiner’s Report 15
Statement of Financial Activities 16
Balance Sheet 17
Notes to the Financial Statements 18

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CONNECT CHURCH UK

Trustees’ Annual Report (Including Directors’ Report) for the year ended 31 March 2022

Connect Church UK (CCUK) was founded by a small group of ‘Brummies’ during the 2nd World War in Sparkhill, Birmingham and is a part of the Assemblies of God denomination. CCUK is a welcoming, multiethnic church that spans the generations and is passionate in its worship and care for people. Our mission is to connect people into a world-transforming relationship with Jesus Christ. While the immediate focus is to minister to the community of Small Heath and the Eastside of Birmingham, the church also has a wider reach across the city and internationally.

Objectives, Achievements and Performance

Connect Church UK’s purposes as set out in the objects contained in the company’s memorandum of association are:

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WHAT WE DO - OVERVIEW

All the activities and organisational structure of CCUK fit into the pattern:

This pattern will be accomplished through providing the following public benefits:

Worship

Love

Serve

The five goals that Connect Church UK set out to achieve in 2021/2022 were:

  1. Renew our passport (to purpose);

  2. Reshape & Release Ministry;

  3. Reside in the CCUK values;

  4. Relocate to the Home & Hub;

  5. Re-engage with Mission.

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2021/2022: A YEAR IN REVIEW

The overall word for this year was RECREATE as Connect Church UK strived to provide Worship, Love and Service within the restraints and limitations due to the ebb and flow of Covid-19 over the course of the year. Quotes included here are some of the responses from a survey conducted in Summer 2021.

1. Renew our passport (to purpose)

The passport to purpose is a framework that guides an individual in their personal faith journey as a believer in Jesus Christ and includes courses and significant experiences such as water baptism or missions’ trips. This year the following courses were offered online: Alpha, Freedom in Christ, Connect to Growth, The Bible Course, and the Wellbeing course. Also a number of Connect Groups ran including The Chosen Connect, Godmothers, Men’s Boost, and Connect Prayer.

During the year, 83 people attended a Connect Group or course and 5 people were baptized in water to make a public confession of their faith.

‘I find your group work incredible. They’re informative, inclusive, extremely well planned and a delight to be a part of.’

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2. Reshape & Release Ministry

One of the effects of moving to online activities during the pandemic was that the volunteer base for CCUK was reduced and as a result placed a greater burden upon those who remained to facilitate the activities of the church. This year there has been a focus on both redesigning activities to meet needs more efficiently, while recruiting and reactivating team members.

Due to renovation work at Holy Trinity School Small Heath, Connect Church began to meet in the Cyrille Regis Sports Hall at King Solomon International Business School each week from Sunday 6 June 2021 for in-person worship. The facilities in the hall and good relationship with the school have resulted in much of the equipment being stored onsite reducing the amount of work required by the set-up team to prepare the hall each week for the service. Wi-fi technologies have also reduced the amount of equipment required for the sound system.

The Connect Kids resumed in-person activities in April 2021 and IAM Youth resumed in-person activities in September 2021. Recruiting and training personnel for each team remains an ongoing priority. In total 72 people including staff and volunteers facilitated the services and programmes of Connect Church.

‘Just great to be able to come back to church and to see so many people again face to face. Also each week to see so many people coming back and also some new faces attending as well.’

3. Reside in the CCUK values

Ten values have been identified that frame the philosophies and activities of Connect Church. The goal this year has been to consistently embed the values into all areas of the church. The ten values are:

All belong we are all valued Always Bible-based we are Bible based All in we all contribute Always building we are good stewards All original we are all innovative Always aware we are responsible leaders All together we serve collaboratively Always on mission we are people of influence All anointed we are Holy Spirit enabled Always more we are growing in faith

These values have been articulated in the ‘Living Out the Connect Values’ document for CCUK leaders and influencers. Our social media posts often carry at least one of these values as a hashtag.

Informed by our values, and a growing awareness around systemic, historic, and institutional racial bias and injustice, Connect Church UK supported, attended and assisted in the facilitation the city-wide combined churches Time4Change reconciliation event at St Andrews Football Stadium on 17 October 2021.

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4. Relocate to the Home & Hub

As the contract with the previous builder had been terminated at the end of March 2021, the trustees supported by consultant Stephen Matthew sought to identify and engage a construction company who would be able to take on the unfinished Home and Hub project and complete it. In December 2021 contracts were signed with Mayway Construction for phase 2 to practically complete the building in April 2022. The CCUK congregation and supporters continued to give faithfully and generously to this project and grant funding of £56,500 was awarded from Allchurches Trust in July 2021.

5. Re-engage with Mission

This goal was about encouraging people to move beyond mental, emotional and spiritual isolation and connect with others and contribute. During this year Connect Church re-engaged in mission by:

‘Excellent and for the church to do this for free I really appreciated it as a single parent with limited funds. Please keep me informed of any other events going on at the church for children.’

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PLANS FOR THE FUTURE

Inspired by the lead up to the Commonwealth Games taking place in Birmingham during the Summer of 2022, the following 5 goals have been identified for the year:

1. Game-changing Worship – Creating our Expression

As more people return (or begin to come) to in-person worship services, this goal is about using the innovations from the Covid 19 pandemic to enhance the worship experience without losing the unique expression of the Connect Church UK or isolating the congregation who continue to participate online. The focus will continue on recruiting and rebuilding teams to facilitate the worship services both in-person and online.

2. Game-changing Love – Growing our relationships

This goal is about increasing the number of appropriate opportunities in-person and online to encourage interactions that lead to the formation, rebuilding, repairing and restrengthening of relationships in the wake of Covid-19.

3. Game-changing Service – Reaching our Community

This year Connect Church UK will continue to build upon collaborative partnerships and initiatives within the local and global community to provide for practical needs, foster positive relationship and bring spiritual encouragement.

Key local partnerships include: Safe Families, Wyndcliffe Primary School, King Solomon International Business School and Time4Change Birmingham, ChaplaincyPlus, Birmingham Churches Together, Interserve, Birmingham City Football Club Chaplaincy, Hobmoor Oasis Community Centre, Small Heath Baby Bank.

Key global partnerships include: Samaritan’s Purse, Open Doors, Compassion, Assemblies of God Impact 25:40.

4. Game-changing Management – Stewarding what we have been given

The post-covid recovery economy has become particularly challenging as a result of the Cost-of-Living crisis with high inflation and increasing interest rates, as well as internal dimensions of changes to staff and team personnel. This goal is about navigating these challenges while continuing to press forward and realise the vision, goals and charitable objects of the church.

5. Game-changing Location – Moving into our Home & Hub

Now that Mayway Constructions have been engaged to complete the Home & Hub, the focus will be on modifying and prioritizing the work that remains to be completed before occupation can take place. The landscaping design will be redesigned to reduce costs and phase the occupation dependent on approval by Birmingham City Council. The administration of CCUK will move to the Home and Hub, followed by capacity limited public services before full occupation as funding is sourced.

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REVIEWING FINANCES

CCUK reported a net deficit of £3,815 on general funds, a drop when compared to the previous year (2021: £14,801). While income from general donations had actually increased to £212,722 (2021: £202,047) spending increased on rentals of venues for both Sunday services and offices as administration relocated from the Square to Bradford Court.

Restricted funds reflected an increased surplus of £236,023 (2021: £60,328), boosted by an increase in donations to the Vision fund totaling £247,192 in 2022 (2021: £98,346), donations of £14,814 to the Impact 25:40 appeals for Afghanistan and the Ukraine; as well as grants awarded from Allchurches (£56,000) and Access Impact (£5,000).

Income derived from voluntary donations increased by 58% to £474,686 in 2022 compared to £300,394 in 2021. Two large donations accounted for much of this increase. There was no income this year from goods in kind as the church had relocated offices in January 2021. Income from other sources (Grants, and other activities) decreased from £68,187 to £63,294. While there was some success in obtaining grants, the level of grant income towards the Home and Hub project was below what was hoped for.

Expenditure increased by 4.1%, totaling £305,773 in 2022, compared with £293,452 in 2021. The resumption of the construction of the Home and Hub, as well as the in-person ministries of the church such as Connect Kids and IAM Youth were the major contributors to the increase in expenditure.

Restricted funds

Restricted funds comprise donations given for a specific ministry purpose. As at 31 March 2022 the unspent portion of these funds amounted to £227,674 (2021: £335,768).

Fundraising policy

CCUK receives most of its donation income from its congregation. However, occasionally other organisations and grant-makers are approached to assist with special projects. The trustees are committed to maintaining the highest legal and ethical standards in the way the charity undertakes its fundraising activities. CCUK is committed to abiding by the Code of Fundraising Practice and to the Fundraising Promise.

Reserves Policy

Trustees of CCUK manage a tension between faith in God as the source of provision for the financial resources required to fund the work of the church, as well as the need to wisely steward resources to ensure that the church has sufficient working capital to meet its obligations to its employees and creditors. The Trustees aim to hold sufficient “free” reserves (equivalent to cash and liquid assets) to cover at least three months’ expenditure. Free reserves at 31 March 2022 stand at £102,859 (2021: £105,605*) against a target based on 2021-22 budgeted costs of £74,309. For 2022 the free reserves have been calculated as net current assets less restricted funds. The Trustees will remain mindful of this target in making financial decisions and allocating resources during the current year, especially with the challenge of completing the Home & Hub in a volatile financial climate.

(*Using the same method to calculate the free reserves the comparison amount for 2021 has been revised from £104,079).

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing Document

The church is a charitable company limited by guarantee, incorporated on 28 August 2009 and registered as a charity on 27 January 2010. The company was established under a Memorandum of Association and amended by special resolution(s) dated 05/02/2013 which established the objects and powers of the charitable company and is governed under its Articles of Association. In the event of the company being wound up members are required to contribute an amount not exceeding £1.

Although Connect Church UK is an autonomous charity, since the church’s commencement in 1940 it has had fellowship status with the Assemblies of God Great Britain (AoG GB), and abides by the Constitution of AoG GB, has accepted the AoG GB Statement of Faith, contributes financially to AoG GB and ensures that the Senior Minister has AoG GB Ministerial Status.

RECRUITMENT AND APPOINTMENT OF TRUSTEES

Training and Induction of Trustees

The directors of the company are also charity trustees for the purposes of charity law and are known in Connect Church UK as Vision Protectors. Under the requirements of the Memorandum and Articles of Association the Vision Protectors are identified by the Senior Minister and, after an application process, are appointed by the Vision Protectors at the Annual General Meeting. The directors are not required to retire by rotation. It is considered that all the Vision Protectors and any others who could be understood to be ‘managers’ in the activities of the charity are deemed to be ‘fit and proper’ persons under the terms of the Finance Act 2010. Trustee training is available for any new Vision Protector or those continuing to serve as a Vision Protector as part of our regular meetings as well.

Sadly, in January 2022 one of the Vision Protectors, Vernon Dore passed away. Vernon had been a long-term trustee of Connect Church and his passing is keenly felt on the board. A skills audit of the remaining trustees was undertaken, and additional trustees were recruited in June 2022.

Organisational Structure and Decision Making

The Board of Trustees met online 10 times in the 2021/2022 financial year of the company. The Trustees are responsible for the various ministries and operations of the church and make regular reports at the meetings so that issues may be highlighted and discussed. A sub-committee, called the Management Team, of staff and skilled lay members of various professional backgrounds from the church is led by the Executive Minister and their research and recommendations inform the Board of Trustees. A salary sub-committee of two Trustees and two members from the Management Team, all non-paid volunteers, reviewed and recommended the salaries of the staff for the 2022/23 budget.

Trustee’s Responsibilities

All Trustees are aware of the Charity Commission’s guidance on public benefit in their publication ‘The Advancement of Religion for Public Benefit’ and have regard to it in their administration and activities of Connect Church UK.

Risk Management

Connect Church UK recognises that in relation to ‘Risk Assessment’, risk is defined as ‘the threat of any action or event which will adversely affect an organization’s ability to achieve its objectives and execute its strategies’. It also accepts that the term ‘risk’ can include any circumstances that may, or do, have an adverse effect, and is wider than financial matters. ‘Risks’ relate not only to the negative consequences of a threat, but also to the impact of not taking advantage of opportunities.

Connect Church UK recognises it requires a practical Health and Safety Policy for any building and surrounding grounds it owns or rents in pursuit of its activities. This is reviewed on a regular basis. An Accident log is maintained.

The contents and obligations of the Equality Act 2010 and the Data Protection Act 2018 are known and complied with to the best of the church’s ability. The Trustees are aware of their responsibilities in respect of the Regulatory Reform (Fire Safety) Order 2005 and its requirement to carry out a fire assessment to identify any possible dangers and risks, to take action to minimize the risks and to create a plan to deal with any emergencies, and also to write up and keep a record of its findings and to review its assessment annually. The Trustees have appointed Matthew Hopley to be the responsible person to put these matters into operation.

There is a Protection Policy in place in respect of children and vulnerable adults. Checks have been and are made with the Disclosure and Barring Service (formerly the CRB) in respect of persons dealing regularly with young people and vulnerable adults. The Trustees’ appointed officer for this is Louison Ricketts. Whilst it is impossible to eliminate all risks and their consequences, efforts are constantly made to minimize such occurrences. The safeguarding policy is reviewed and revised annually and was approved in November 2021 by the Trustees and implemented where applicable in the various ministries of the church. Trustees are kept informed on matters affecting the church, such as health and safety, disability discrimination legislation and child protection.

Since the outbreak of the Covid-19 pandemic, the Trustees have continued to monitor Government Guidelines with regards to Places of Worship and adjust activities in order to mitigate the risks of harm while endeavouring to still provide pastoral and practical care.

In July 2021, the trustees reported a potential serious incident to the Information Commissioner’s Office and the Charity Commission. Both regulators confirmed that no further action was necessary on this occasion due to the measures put in place by CCUK.

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Principal Risks and Uncertainties

No. Potential Risk Mitigation
1. Loss of confidence by stakeholders due to the behaviour
of senior leadership or staff members.		 ●
Connect Church values are clearly defined and regularly
communicated
●
Prayer and worship are central to CCUK
●
Oversight structures are in place for senior leaders and staff.
2. Harm comes to those in our care due to lack of
appropriate and compliant child and vulnerable adult
safeguarding procedures.		 ●
Safeguarding at CCUK is overseen by a Safeguarding VP and
Management committee representative.
●
CCUK works closely withConnect2familiesandthirtyone:eight
to ensure that it models best practice in the area of
safeguarding.
3. Harm comes to visitors or staff due to lack of appropriate
and compliant Health & Safety procedures		 ●
Regular H&S reporting currently from Venue Coordinator at
Management and staff meetings.
●
When in Home & Hub: internal and external H&S Advisors
monitor and report on risk areas identified.
4. The coronavirus pandemic, and the subsequent Cost of
Living crisis, and high inflation is causing significant
operating challenges and could impact CCUK’’s income
and/or cashflow.		 ●
Expenditure is being carefully controlled and income closely
monitored as financial fragility increases.
●
CCUK relies on God’s provision and the generosity of the
congregation to meet its financial needs. Key partners would
be approached to underwrite in the event of a shortfall or to
consider merger or partnership in order to enable CCUK to
continue to operate.
5. A shortfall in income and/or inadequate cashflow results
in an inability to meet salary and creditor payments.
Specific financial risks are:
Home and Hub building project		 ●
Aim to hold at least 3 months’ working capital
●
Strong budgetary and financial controls are in place.
●
Additional funding streams are being sought specifically for
the Home and Hub.
6. Inability to operate in the event of a disaster due to lack
of adequate business continuity planning. Business
continuity compromised or critical data lost through
cyber-attack.		 ●
IT systems are backed up remotely and can be accessed
remotely.
●
Continue to invest in digital and technology systems including
technology.
●
Data audits regularly conducted.
7. Future of the organization jeopardized due to lack of
adequate succession planning for key senior roles.		 ●
Succession planning needs to start taking place for key senior
roles in the organisation.
●
VPs to be consulted on the recruitment and appointment of a
new Senior minister.
8. Poor decision-making and breach of regulatory
requirements due to weak or non-compliant governance
structures.		 ●
VP (Trustee) meetings and structures are compliant with
Charity Commission, Companies House and governing
document requirements.
●
Conflicts of interest are managed appropriately at VP level.
9. Legal risks and potential disruption arising from use of
rental venues for operations.		 ●
Try to ensure that agreements with hired premises have a
notice period that allows for alternate accommodation to be
in place.
●
Significant communication takes place to inform congregation
of changes in venue and operation.
●
Insurance policies are updated to reflect changes in operation.
10. Growth in the church services and operations unable
to be serviced by current staffing.		 ●
The creation of a strategic plan that identifies priorities in
staffing, funding levels required to recruit and potential
strategies to increase funding as well as identify suitable
volunteers.

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TRUSTEES

The current trustees of Connect Church UK and those who held office during the year are as follows:

Pastor Kirk McAtear Senior Minister/Chair Pastor Pastor Tracee McAtear Executive Minister Mrs Valerie Danelczyk Appointed 8 June 2022 Mr Vernon Dore Passed away 30 January 2022 Mrs Joycelyn Edwards Appointed 5 June 2022 Mr Simon Lakin Mr Bradford Ricketts Mrs Louison Ricketts Miss Grace Sutton Resigned 19 July 2022

Committee Members (during 2021/22)

Management Team

Tracee McAtear, Matthew Hopley, Yvette John, Valerie Danelczyk

Salary Committee

Valerie Danelczyk, Vernon Dore, Yvette John, Grace Sutton

Company Secretary

Tracee McAtear is Company Secretary of Connect Church UK.

ADVISERS

Bankers:

Lloyds Bank, 9-11 Poplar Rd, Solihull B91 3AN.

The Charity Bank Ltd, Fosse House, 182 High St, Tonbridge, Kent, TN9 1BE.

Kingdom Bank, Ruddington Fields Business Park, Mere Way, Ruddington, Nottingham, NG11 6JS. Big Issue Invest, 113-115 Fonthill Road, Finsbury Park, London N4 3HH.

Independent Examiner:

Rev’d Alan Clements, 15 Carleton Road, Great Knowley, Chorley, PR6 8TQ, MA, ACIB, FCIE.

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Statement of responsibilities of the Trustees

CCUK Board of Trustees is responsible for preparing the Annual report and financial statements in accordance with applicable law and United Kingdom generally accepted accounting practice.

Charity law requires the trustees to prepare a statement of financial activities and statement of assets and liabilities for each financial year, which gives a true and fair view of the state of affairs of the church and of its financial activities for that year and adequately distinguishes any material special trust or other restricted fund of the church.

In preparing those financial statements the CCUK Board of Trustees is required to:

We are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charity and enable us to ensure the financial statements comply with the Charities Act 2011.

We also have a responsibility to safeguard the assets of the church and to take reasonable steps to detect fraud or other irregularities and to provide reasonable assurances that:

Independent Examiner

The CCUK Board of Trustees intend to ask the existing examiners to undertake the independent examination of the Church in the following year. However this will be dependent on the income for 2023.

Approval

This report was approved by the Board of Trustees of Connect Church UK and signed on its behalf, by Pastor Kirk McAtear, Senior Minister.

Signed:

Date: 6 December 2022

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Independent Examiner’s Report to the Trustees of Connect Church UK

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CONNECT CHURCH UK

STATEMENT of FINANCIAL ACTIVITIES For the year ended 31 March 2022

Notes
INCOME FROM:
Donations and legacies
3 a)
Grants
3 b)
Income from charitable activities
3 c)
Investments
3 d)
Other
3 e)
TOTAL INCOME
EXPENDITURE ON:
Charitable activities
4 to 6
Grants and mission giving
7
Fundraising costs
8
TOTAL EXPENDITURE
NET INCOME/(EXPENDITURE) BEFORE
TRANSFERS
Fund Transfers In
Fund Transfers Out
NET INCOME/(EXPENDITURE)
Gain/Loss on Investment
NET MOVEMENT IN FUNDS
FUNDS BROUGHT FORWARD AT 1 APRIL
FUNDS BROUGHT FORWARD AT 31 MARCH		 2022
Unrestricted
Restricted
Total
funds
funds
funds
£
£
£
212,722
261,965
474,686
-
61,500
61,500
1,610
-
1,610
144
41
184
- - -
214,476
323,505
537,981
210,840 68,352
279,192
6,290 14,294
20,584
1,161
4,836
5,997
218,290 87,483
305,773
(3,815)
236,023
232,208
344,116
-
344,116
-
(344,116)
(344,116)
340,302
(108,094)
232,208
- --
340,302
(108,094)
232,208
790,044
335,768
1,125,812
1,130,346
227,674
1,358,020		 2021
Total
funds
£
300,394
25,000
1,253
234
41,700
368,580
288,844
3,944
664
293,452
75,129
63,092
(63,092)
75,129
-
75,129
1,050,684
1,125,812

The statement of financial activities includes all gains and losses recognised in the year.

All income and expenditure derive from continuing activities.

The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.

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CONNECT CHURCH UK BALANCE SHEET

As at 31 March 2022

s at 31 March 2022
Notes
FIXED ASSETS
Tangible assets
12
Investments
Total fixed assets
CURRENT ASSETS
Debtors
13
Cash at bank and in hand
14
Total current assets
Less: liabilities falling due within one year
15
Net current assets
Less: liabilities falling due in more than one year
16
NET ASSETS
FUNDS
Unrestricted
,
Restricted
22
TOTAL FUNDS		 2022
£
£
2,180,959
-
2,180,959
9,484
325,962
335,446
(4913)
330,533
2,511,492
(1,153,471)
1,358,020
1,130,346
227,674
1,358,020		 2021
£
9,484
325,962		 £
12,024
433,846		 £
1,837,911
-
1,837,911
441,373
335,446
(4913)		 445,870
(4497)
2,279,284
(1,153,471)
1,125,812
790,044
335,768
1,125,812

For the year ended March 2022 the company was entitled to exemption under section 477 of the Companies Act 2006 relating to small companies. No members have required the company to obtain an audit of its accounts for the year in question in accordance with section 476 of the Companies Act 2006.

The directors acknowledge their responsibility for complying with the requirements of the Act with respect to accounting records and for the preparation of the accounts.

These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies’ regime. The financial statements were approved by the board of trustees/directors and authorised for issue on 6 December2022 and are signed on its behalf by:

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CONNECT CHURCH UK

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2022

1. ACCOUNTING POLICIES

These financial statements are prepared on a going concern basis, under the historical cost convention, modified to include certain items at fair value through income and expenditure within the Statement of Financial Activities.

The accounts have been prepared in accordance with the charity’s governing document, the Companies Act 2006 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 UK and Republic of Ireland (FRS 102). The charity is a public benefit entity for the purposes of FRS 102.

The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.

Going Concern

At the time of approving the financial statements, the Trustees have become increasingly concerned with the level of resources that the charity currently has in order to continue in operational existence for a period of at least one year from the date of approval of the financial statements. In particular, the Trustees have considered the high levels of inflation from the Cost-of-Living Crisis and the subsequent impact on the cost of building materials, reduced availability of grant funding and pressure on donors’ ability to give. The Trustees have already implemented mitigating actions to limit the financial impact. The charity’s loan providers have also been supportive; however the impact of increasing interest rate rises on the borrowing and the impending cessation of capital repayment holidays in 2023 have raised concerns for the ongoing cashflow. As a result, the Trustees are uncertain that the charity has sufficient reserves to enable the charity to operate for the next twelve months, and have begun to explore solutions to relieve the financial pressure.

Funds

General funds represent the funds of the charity that are not subject to any restrictions regarding their use and are available for application on the general purposes of the charity. Restricted funds represent those received for specific purposes as specified by the donors. The accounts include all transactions, assets and liabilities for which the charity are responsible in law.

Income

Donations and Legacies

Donations are recognised when received by or behalf of the charity or in the case of pledged donations when the charity is notified of its legal entitlement, the amount due is quantifiable and its ultimate receipt by the charity is probable. Income tax recoverable on Gift Aid donations is recognised when the income is recognised. Grants and legacies to the charity are accounted for as soon as CCUK is notified of its legal entitlement, the amount due is quantifiable and its ultimate receipt by CCUK is probable.

Expenditure

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs relating to the category. Expenditure is recognised when there is a legal or constructive obligation to make payments to third parties, if it is probable that the settlement will be required and the amount of the obligation can be measured reliably.

Mission giving

Grants and donations are accounted for when due.

Other expenditure relating to the work of the church

CCUK’s contribution to the Assemblies of God GB is accounted for when payable.

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CONNECT CHURCH UK

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2022

Pension costs

The church contributes to a group defined contribution pension scheme. All pension costs are charged in the statement of financial activities as they fall due.

Support costs

Support costs are those that assist the work of the charity but do not directly represent charitable activities and include office costs, governance costs and other administrative costs. Where support costs cannot be directly attributed to particular headings, they have been allocated to the cost of raising funds and expenditure on charitable activities on a basis consistent with use of the resources.

Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

All assets costing more than £500 are capitalised. No depreciation is provided on freehold land.

Land and buildings

Fixed assets are for use by the church in fulfilling its objects and are capitalized and depreciated. Depreciation is provided at rates appropriate to reduce book values to estimated residual values over the useful lives of the assets concerned. Land or buildings includes construction and professional fees associated with the new building. Depreciation will commence once the buildings are commissioned. Land and buildings are then revalued periodically to reflect their net realisable value.

Computer equipment, vehicles, other equipment and furniture and fittings

All other assets are depreciated at 20% using the straight-line balance basis. The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset and is recognised in net income/(expenditure) for the year.

Financial instruments

The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all its financial instruments. Financial instruments are recognised in the charity’s balance sheet when the charity becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

With the exceptions of prepayments and deferred income all other debtor and creditor balances are considered to be basic financial instruments under FRS 102 (see notes 13, 15 and 16 in this respect)

Debtors

Amounts owing at 31 March in respect of fees and other income are shown as debtors less any provisions for amounts that may prove uncollectable.

Cash and Cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, and other short-term liquid investments with original maturities of three months or less.

Creditors

Creditors are recognised where the charity has a present obligation resulting from a past event that will probably result in a transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably.

Leases

Rentals paid under operating leases are charged to the Statement of Financial Activities on a straight-line basis over the lease term.

CONNECT CHURCH UK

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 March 2022

Employee benefits

The cost of short-term employee benefits are recognised as a liability and an expense. The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Critical accounting estimates and areas of judgement

In the application of the charity’s accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

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NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2022

CONNECT CHURCH UK

2. COMPARATIVE STATEMENT OF FINANCIAL ACTIVITIES

The following table analyses 2021’s income and expenditure between unrestricted and restricted funds

INCOME FROM:
Donations and legacies
Grants
Income from charitable activities
Investments
Other
TOTAL INCOME
EXPENDITURE ON:
Charitable activities
Grants and mission giving
Fundraising costs
TOTAL EXPENDITURE
NET INCOME/(EXPENDITURE) BEFORE
TRANSFERS
Fund Transfers In
Fund Transfers Out
NET INCOME/(EXPENDITURE)
Gain/Loss on Investment
NET MOVEMENT IN FUNDS
FUNDS BROUGHT FORWARD AT 1 APRIL
FUNDS BROUGHT FORWARD AT 31 MARCH		 Unrestricted
Restricted
Total
funds
funds
funds
£
£
£
202,047
98,346
300,394
0
25,000
25,000
1,253
0
1,253
160
73
234
41,700
0
41,700
245,160
123,420
368,580
288,844
0
288,844

3,944
0
3,944
664
0
664
293,452
0
293,452
(48,291)
123,420
75,129
63,092
0
63,092
0
(63,092)
(63,092)
14,801
60,328
75,129
- -
-
14,801
60,328
75,129
775,243
275,440
1,050,684
790,044
335,768
1,125,812

The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.

The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.

CONNECT CHURCH UK

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2022

3. INCOME

. INCOME
a. Donations and legacies
Donations and Gifts
Gift aid
Legacies Receivables
b. Grants
Grant Income
c. Income from charitable activities
Church Activities
Other Activities
d. Investments
Bank interest
e. Other
Donated Goods & Services		 Unrestricted
Restricted
funds
funds
£
£
183,437
246,046
29,285
15,919
-
-
212,722
261,965
-
61,500
-
61,500
1,445
-
165
-
1,445
-
144 41
144 41
-
-
-
-		 Total
2022
£
429,483
45,204
-
474,686
61,500
61,500
1,445
165
1,610
184
184
-
-		 Total
2021
£
253,719
40,675
6,000
300,394
25,000
25,000
656
597
1,253
234
234
41,700
41,700

4. EXPENDITURE

Expenditure analysed by staff costs, other direct costs, depreciation and include allocated support costs.

Notes
Charitable activities
Ordinary ministry of the church
5
Development of Home & Hub
6
Grants and mission giving
7
Fundraising costs
8
Total expenditure		 Salaries
Other costs
Depreciation and
Examination
£
£
£**
131,427
76,895
2,225
-
68,645
-
131,427
145,540
2,225
-
20584
-
-
5,997
-
131,427
172,121
2,225		 Total
2022
£
210,547
68,645
279,192
20,584
5,997
305,773		 Total
2021
£
236,691
52,152
288,844
3,944
664
293,452

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CONNECT CHURCH UK

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2022

5. ORDINARY MINISTRY OF THE CHURCH

The following table analyses expenditure on the ordinary ministry of the church (including support costs) between Funds; and notes the allocation of support costs to each expenditure category. All support costs are charged to unrestricted funds.

Contribution to AoG GB
Salaries and pension contributions
Staff other costs
Cost of services
Pastoral care & training
Worship
Church courses & events
Youth and children's work
Engage (local social action)		 Unrestricted funds
Restricted
Total
funds ^
£
£
5,967
-
131,427
-
10,788
-
47,304
-
1,907
-
4,101
-
4,756
-
3,063
-
1,234
-
210,547
-		 Total
2022
£
5,967
131,427
10,788
47,304
1,907
4,101
4,591
3,063
1,234
210,382		 Total
2021
£
6,105
131,252
5,008
83,874
1,739
3,342
4,377
936
58
Direct costs
Support
costs^
£
£
5,967
-
89,640
41,787
7,925
2,862
16,208
31,096
1,660
247
4,101
-
4,408
348
3,043
21
1,234
-
134,187
76,361
236,691

^ All expenditure and capital costs for the Home & Hub building have been charged to unrestricted funds first and then a transfer from restricted vision funds applied. See note 17 for the transfer details.

6. DEVELOPMENT OF HOME & HUB

Fitout
Mortgage Interest
Building Legal & Advisory
Services
Maintenance		 Unrestricted
Restricted
Grant
funds
funds
funds
£
£
£
-
100
5,025
-
47,216
-
-
6,000
975
-
9,035
-
293
-
-
293
62,352
6,000		 Total
2022
£
5,125
47,216
6,975
9,035
293
68,645		 Total
2021
£
450
48,702
3,000
-
-
52,152

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CONNECT CHURCH UK

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2022

7. GRANTS AND MISSION GIVING

Gifts for Overseas Mission
AoG Impact 25:40 Lebanon
AoG Impact 25:40 Afghanistan
AoG Impact 25:40 Ukraine
AoG Wycliffe Bible Translation
Brave Church (Sri Lanka) Support
Open Doors with Br Andrew
AoG GB Missions Champions
Compassion Sponsorships
Individuals
Adjust for Cancelled covid flight to Aus
Gifts to UK Beneficiaries
AoG Covid19 Fund
Interserve
Alabare
Individuals
Missions Costs*
Flights abroad
Missions trip costs (accomm, food, etc)
Hosting guest speakers & missions personnel
Pastoral care - missionaries		 Unrestricted
Restricted
Total
funds
funds
2022
£
£
£
-
-
-
-
6,687
6,687
-
7,607
7,607
513
-
513
1,200
-
1,200
850
-
850
-
-
-
-
-
-
-
-
-
-
-
-
2,563
14,294
16,857
-
-
-
118
-
118
200
-
200
1,497
-
1,497
1,815
-
1,815
324
-
324
80
-
80
1,351
-
1,351
157
-
157
1,912
-
1,912
6,290
14,294
20,584		 Total
2021
£
500
1,200
800
100
504
400
(360)
3,144
500
100
-
300
900
-
-
-
-
-
3944

** This relates to grants and mission giving to 1 overseas individual.

***This relates to grants and mission giving to 4 UK individuals.

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CONNECT CHURCH UK

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2022

8. COST OF RAISING FUNDS

These are the costs incurred in fundraising and the majority of these costs relate to the administration of congregational donations rather than costs incurred in approaching donors to give to the charity. This financial year a professional fundraiser was engaged to write grant applications applying for funds to build the Home & Hub using funds from the Access Impact Grant.

Fundraising Costs (Non Grant)
Fundraising Costs		 Unrestricted
Restricted
Grant
funds
funds
funds
£
£
£
1,161
-
-
-
- 4,836
1,161
-
4,836		 Total
2022
£
1,161
4,836
5,997		 Total
2021
£
664
-
664

9. SUPPORT COSTS

The following support costs (all out of unrestricted funds) have been apportioned based on identified contribution to direct or support function for both staff and expenses.

SUPPORT COSTS
Building maintenance & running costs (inc. Rents)
Covid measures
Rates and insurance
Postage
Telephone and printing
Total property-related support costs
IT
Finance
Creative Services
Executive and Legal		 2022
£
16,771
37
1,684
133
1,501
20,127
4,760
26
308
4,050
29,271		 2021
£
53,432
203
1,585
1,786
2,253
59,259
5,881
108
278
2,273
67,799

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CONNECT CHURCH UK

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2022

10. EXAMINATION COSTS AND DEPRECIATION

Provision for current year examination
Depreciation		 2022
£
400
1,825
2,225		 2021
£
400
12,219
12,619

The total depreciation in 2022 was much less at £1,825 (2021: £12,219) as the there were no assets to be written off.

As the Home and Hub is still in the process of construction the asset has not been revalued.

All purchased and costs for the Home and Hub >£500 are capitalised to the asset.

11. REMUNERATION

Wages and Salaries
Social Security costs
Contributions to pension scheme		 2022
2021
£
£
122,544
122,695
5,002
4,652
3,882
3,905
131,427
131,252

The average number of full-time equivalent employees was 4 (2021:4).

There were no employees whose total benefits (excluding pension contributions and employer national insurance) were greater than £60,000.

Details of trustee remuneration can be found in note 18 (Related Parties).

The key management personnel of CCUK comprises of the Senior Pastor and Executive Pastor. The total employee benefits (including pension and Employer NIC) of the key management personnel of the charity were £66,518 (2021: £57,306*) for 2022.

*The 2021 TAR incorrectly reported the total benefits of the key management as £77,979. However the corrected calculations should have totalled £57,306.

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CONNECT CHURCH UK

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2022

12. TANGIBLE FIXED ASSETS

COST
Opening Balance 1 April 2021
Additions
Disposals
Closing Balance 31 March 2022
DEPRECIATION
Opening Balance 1 April 2021
Charge for 2022
Disposals
Closing Balance 31 March 2022
NET BOOK VALUE
At 31 March 2021
At 31 March 2022
13. DEBTORS
Prepayments and accrued
income
Gift aid
Refunds
14. CASH AT BANK AND IN HAND
Unrestricted funds
Restricted funds		 Home
Church
Computer
Motor
& Hub
Equipment
Equipment
Vehicles
Total
£
£
£
£
£
1,831,320
5,189
3,935
-
1,840,444
344,116
-
756
-
344,873
-
-
-
-
-		 Home
Church
Computer
Motor
& Hub
Equipment
Equipment
Vehicles
Total
£
£
£
£
£
1,831,320
5,189
3,935
-
1,840,444
344,116
-
756
-
344,873
-
-
-
-
-		 Home
Church
Computer
Motor
& Hub
Equipment
Equipment
Vehicles
Total
£
£
£
£
£
1,831,320
5,189
3,935
-
1,840,444
344,116
-
756
-
344,873
-
-
-
-
-
2,175,436 5,189
4,691
1,185
2,185,317


-
-
-		 1,819
715
-
2,534
1,038
787
-
1,825
-
-
-
-
- 2,857
1,502
-
4,358
1,821,320 3,371
3,220
-
1,837,911
2,175,436 2,333
3,190 -
2,180,959
2022
£
2,435
7,049
-
9,484
102,108
223,854
325,962		 2021
£
4,663
7,361
-
12,024
104,079
329,768
433,846

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CONNECT CHURCH UK

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2022

15. LIABILITIES FALLING DUE WITHIN ONE YEAR

Creditors for goods and services
Taxation and social security
Refunds owed by CCUK		 2022
£
2,736
2,177
-
4,913		 2021
£
2,521
1,976
-
4,497

16. LIABILITIES FALLING DUE IN MORE THAN ONE YEAR

Charity Bank Mortgage
Big Issue - Development Loan (RGF)
Big Issue - Working Capital Loan		 935,683
123,009
94,779
1,153,471		 935,683
123,009
94,779
1,153,471

Capital repayment holiday was granted by both Charity Bank and Big Issue due to Covid Pandemic and has been extended until 30 June 23 at writing of this report.

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CONNECT CHURCH UK

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2022

17. MOVEMENT ON RESTRICTED FUNDS

Vision Fund
Gifts and funding towards the construction of
the Home & Hub project
Big Issue Access Capital Grant
Funding towards the fitout of the Home & Hub
Access Impact Grant
Funding to engage a Fundraiser to write grant
bids for the Home & Hub project.
Growing Lives Grant
Funding from Allchurches towards Children and
Youth programs
Synergy Legacy
Donation for activities for the elderly eg holidays
Allchurches Trust Ltd Grant
Funding towards the construction of the Home &
Hub
Missions
Appeals eg Impact 25:40 Afghanistan & Ukraine		 Opening
balance
Income
Expenditure
Transfer from
Unrestricted to
Restricted
Closing
balance
2022
2022
2022
2022
2022
£
£
£
£
£
304,768 247,192
(62,352)
(344,116)
145,492
6,000
-
(6,000)
-
-
5,000
(4,836)
-
164
19,000
-
-
-
19,000
6,000
-
-
6,000
-
56,500
-
-
56,500
-
14,814
(14,294)
-
519
335,768 323,505
(87,483)
(344,116)
227,674

Vision funds were transferred down after the expenditure from unrestricted funds to cover all costs related to the construction of the Home and Hub.

18. RELATED PARTIES

The following trustees were connected to people or organisations in receipt of payments from CCUK:

TRUSTEE RELATED PARTY TRANSACTIONS
Simon Lakin Stefanie Lakin(wife)is an employee and was a trustee of CCUK
Stefanie Lakin Simon Lakin(husband)is a trustee of CCUK and a minister in training.
Kirk McAtear Tracee McAtear (wife) is both a trustee and employee of CCUK. Kirk is also employed by AoG GB as a Director of
Missions on the National LeadershipTeam.
Tracee McAtear Kirk McAtear(husband)is both a trustee and employee of CCUK
Bradford Ricketts Louison Ricketts(wife)is a trustee of CCUK
Louison Ricketts Bradford Ricketts(husband)is a trustee of CCUK

Connected persons

Three of the Trustees, listed in the table above received a total remuneration of £66,518 (2021: £65,954*) from CCUK for 2022. Simon Lakin is a Minister in Training with the Assemblies of God Great Britain and CCUK paid £1486 in course fees and expenses. None of the remaining Trustees received any remuneration from CCUK or the related entities.

*The 2021 TAR incorrectly reported the total trustee remuneration as £86,627.

Connect Church is affiliated to the Assemblies of God, Great Britain. CCUK made an annual contribution of £5,967 (2021: £6,105) to the Assemblies of God in 2021.

Trustee donations

During 2022 CCUK received £44,278 (2021: £35,976) in donations from the Vision Protectors. The donors did not attach any conditions to their gifts which required the charity to significantly alter the nature of its existing activities.

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 March 2022

CONNECT CHURCH UK

19. CONTINGENT LIABILITIES

Home and Hub Loans

Loan facilities have been arranged with Charity Bank Ltd ("CBL") (£975,000), Big Issue Invest Ltd (“BILL”) (£125,000) and Big Issue Access Ltd ("BIAL") (£I00,000) to facilitate the construction of the Home and Hub which commenced July 2017.

The principal terms of the loans are:

Lender Amount 0/0 Rate Term Comments
Charity Bank £975,000 Base+3.25% 25 years Superior Debt
Big Issue Invest Ltd (RGF) £125,000 Base+8.75% 7 years Repayments based on 25 years with refinancing at year 8
Big Issue Access Ltd £I00,000 Base+8.75% 7 years Repayments based on 25 years with refinancing at year 8

The CBL and BIIL loans hold security in the form of charges over the land and buildings, bank account and debenture over all other net assets of the Church. All of the loan funds have been drawn down.

Change in price to complete Home and Hub

In December 2021 a JCT contract with Mayway Construction Ltd was signed to commence phase 2 of construction on the Home and Hub for the contract sum of £511,275. The schedule of work was 18 working weeks with the goal of bringing the building to a state of practical completion. A phase 3 of works to complete the building and landscaping to allow occupation for public facing activities has been quoted for when funding becomes available. The phase 3 quote includes a redesign of the landscaping to make the project more cost effective but has required the scheme to be resubmitted to Birmingham City Council planners for approval. The total value of the phase 3 tender is £575,652.

20. EVENTS AFTER THE END OF THE REPORTING PERIOD

The second phase of the building work on the Home and Hub was completed in May and the certificate of Practical Completion was issued 9 May 2022. As a result, CCUK became responsible for insuring a vacant building that they still unable to occupy, which has increased financial pressure upon the church, combined with external factors such as the Bank of England base rate rises and high inflation. From July 2022 the Trustees have been closely monitoring the cashflow of the church, streamlining spending and seeking solutions that will relieve its financial commitments as well as bring the church closer to the goal of occupying the building.

The Charity Bank extended the primary mortgage with an additional facility of £140,000 on the 29 September 22, to facilitate a schedule of reduced works from Phase 3. The goal is that CCUK will be able to occupy the Home and Hub for non-public facing activities such as administration and reduce some of their ongoing costs for office rental and storage by the start of 2023.

Grace Sutton resigned as a trustee on 19 July 2022. Two new trustees were appointed to fill the two vacancies: Joycelyn Edwards on 5 June 2022 and Valerie Danelczyk on 8 June 2022.

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