## **`WAYPOINT`** ## `operating as` **`WAYPOINT CHURCH`** ``` (a charitable incorporated organisation) ``` ## **`TRUSTEES’ ANNUAL REPORT`** ``` and ``` ## **`AUDITED FINANCIAL STATEMENTS`** ## **`31 December 2021`** ``` Charity registration number: 1168433 ``` ## **`WAYPOINT`** `operating as` **`WAYPOINT CHURCH`** ``` (a charitable incorporated organisation) ``` ## **`CONTENTS`** ## **`31 December 2021`** ``` Page Reference and administrative details 3 Trustees’ Annual Report 4 to 8 Statement of trustees’ responsibilities 9 Audited financial statements: Independent auditor’s report 10 to 12 Balance sheet 13 Statement of financial activities 14 Statement of cash flows 15 Notes to the financial statements 16 to 31 ``` ``` 2 ``` ## **`WAYPOINT`** `operating as` **`WAYPOINT CHURCH`** ``` (a charitable incorporated organisation) ``` ## **`REFERENCE AND ADMINISTRATIVE DETAILS`** ## **`31 December 2021`** ## **`THE CHARITY`** ``` Registered name : Waypoint Operating name : Waypoint Church Legal structure : Charitable Incorporated Organisation Operating address : 255 Hunts Pond Road, Titchfield Common, Fareham, Hampshire, PO14 4PG Registered charity number : 1168433 (England and Wales) Telephone number : 01489 579669 Website : www.waypointchurch.org.uk Email address : admin@waypointchurch.org.uk ``` ## **`BOARD OF TRUSTEES`** ``` Ministers Senior Minister : Rev. Mark Madavan (1) (2) Minister : Jim Privett (1) ``` ## **`Elders`** ``` Andy Banes Graham Griffiths Rachel Keen (4) Kevin Leech Dan Richards Chris Snook ``` ## **`Other elected trustees`** ``` Office Manager and Church Secretary : Pauline Griffiths (1) (2) Church Treasurer : Graham Woodyet Facilities Team Leader : Paul Warner Mission Team Leader : Pete McNulty Children’s Ministry Team Leader and Waypoint Hub Team Leader : Claire Johnson (1) Discipleship & Small Groups Team Leader : Rev. Keith Foster (1) (3) ``` ``` (1) Staff member (2) Ceased to act or Resigned July 2021 (3) Resigned September 2021 ``` ``` (4) Also appointed as Church Secretary July 2021 ``` ``` The only change in the composition of the Board of Trustees at the date of approval of this report was the appointment of Dr Felicity Shaw as Church Secretary in April 2022. ``` ## **`PROFESSIONAL ADVISERS`** ``` Bankers: CAF Bank Ltd, 25 Kings Hill Avenue, Kings Hill, West Malling, Kent, ME19 4JQ ``` ``` Auditors: Wood, Hicks & Co Ltd, Chartered Accountants and Statutory Auditors, Units 1-2 Warrior Court, 9-11 Mumby Road, Gosport, Hampshire, PO12 1BS Solicitors: Anthony Collins Solicitors LLP, 134 Edmund Street, Birmingham, B3 2ES ``` ``` 3 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`TRUSTEES’ ANNUAL REPORT`** ## **`Year ended 31 December 2021`** ``` The Trustees have pleasure in submitting their annual report and the financial statements of Waypoint (the Church) as at and for the year ended 31 December 2021. ``` ## **`SECTION 1 – OBJECTIVES AND ACTIVITIES`** ## **`Description of the Church’s trust`** ``` The principal objective of the Church is the advancement of the Christian Faith according to the principles of the Baptist denomination including the advancement of education, community service and such other general charitable purposes in such parts of the United Kingdom and the world as the Church shall determine. ``` ## **`Aims`** ``` In order to achieve this objective, the Church provides a variety of activities both to its membership and to the community. The aim is to show the love of Jesus Christ and to bring people into a closer relationship with Him. In fulfilling this purpose, the Church engages in a range of activities either on its own or with others. Due to the Covid-19 pandemic (the Pandemic) and the resultant lockdowns, activities were restricted and new activities were developed to keep engaged with the congregation and community. ``` ## **`Strategies to achieve aims`** ``` Central to the work and witness of the Church is the provision of regular public services of Christian worship. These services take place each Sunday at and include preaching, teaching and Communion. A programme for children and young people aged 0-16 years is available during the services. There are also occasional All Age Services. The Church has a passion for reaching the community and anybody is free to attend our services. Church services, events and activities are advertised on our website at www.waypointchurch.org.uk. Due to the Pandemic, Sunday services and the Sunday programme for children and young people were reduced and adapted. Sunday services were held online and, as restrictions eased, either pre-recorded or live services were held for a limited congregation and later in the year, in person, with no restrictions. ``` ``` The Church runs a number of Life groups aimed at developing faith and discipleship and providing pastoral care. Due to the Pandemic, some Life Groups met online via Zoom. ``` ``` The Church leadership places great importance on reaching the local community in a variety of ways as can be seen from the activities undertaken set out below. ``` ## **`Measurement of attainments`** ``` Although numbers do not reflect the spiritual strength of a church, they do give an indication of growth. During 2021, eighteen persons were received into membership and 5 were baptised. As at 31 December 2021, the membership stood at 220. The Trustees believe that 2021 was a positive year in the life of the Church, particularly in its response to the Pandemic that resulted in: ``` - `(a) services and other Church meetings being successfully conducted online; and,` - `(b) the progress of the Waypoint Hub providing food and other welfare assistance to those in the local community who have been adversely affected by the lockdowns.` ``` Activities vary from time to time. Review of specific aims by the Leadership is made throughout the year with activities being initiated, expanded, or closed, as judged appropriate. While many churches have suffered a reduction in their congregations as a consequence of the lockdowns, the Trustees are thankful to God that membership has remained stable in 2021. ``` ## **`SECTION 2 – ACHIEVEMENTS AND PERFORMANCE`** ``` Our annual Summer Holiday Club was able to be in person again this year but, due to Covid-19 restrictions, in smaller numbers. We ran two separate age groups for children 0-6 years and 6-12 years along with their families. Each morning started with a fun lively celebration followed by games and activities. 24 families took part. ``` ``` 4 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`TRUSTEES’ ANNUAL REPORT`** `(continued)` ## **`Year ended 31 December 2021`** ## **`SECTION 2 – ACHIEVEMENTS AND PERFORMANCE`** `(continued)` ``` The Children’s Ministry Team Leader was involved in local primary schools. An interim Children’s Ministry Team Leader was appointed in December 2021, mainly working with Waypoint Kids on Sundays and Waypoint Tots. ``` ``` Interns worked in the youth and children’s ministry and with the technical and staff team to gain knowledge of all aspects of church life. ``` ``` Activities for senior citizens are provided regularly. Due to the Pandemic, these activities were reduced. ``` ``` Youth Alpha was held for young people interested in discovering more about Christianity. Due to the Pandemic, the course was held online. ``` ``` Kintsugi Hope is a course designed for supporting people in their mental health and wellbeing. ``` ``` The Church runs a Golf Society and Football Team and encourages membership from Church attenders and non-attenders. ``` ``` The ‘Grand 5’ supported three mission projects including Enable the Children in Sierra Leone, Rocks Project in Uganda and an orphanage in China in partnership with International China Concern. ``` ``` The Church supports a Church member who is a missionary, based in South Africa and working across countries in sub-Saharan Africa. ``` ``` Due to the Pandemic, no short-term mission trips occurred. However, we supported a young person as she commenced a six-month mission training placement with Youth With A Mission initially being based in Vancouver, Canada. ``` ``` The Church supported the Baptist Union’s Missionary Society and Home Mission Fund and Open Doors (serving persecuted Christians around the world). The Church also supported Elpitha Hope in Greece working in refugee camps. ``` ``` The Church supported emergency disaster appeals of Tearfund in their Covid-19 humanitarian crisis appeal and World Vision in their Ethiopia refugee appeal. ``` ``` The Church supported Reality Outreach Ministries who deliver the evangelistic drama Heaven’s Gates and Hell’s Flames to churches in the UK and Europe. The Church also supported Time for Marriage, a charity that offers support and resources to help renew and strengthen marriages. ``` ``` The Church has supported local mission including schools in the community and The Family Support Service in Fareham. ``` ``` Rooms in the premises are hired by an independent pre-school, the NHS for blood doning and the local council as a polling station. ``` ``` Waypoint Café re-opened in the Spring when the lockdown restrictions eased. ``` ``` Christmas services were held throughout December offering our congregation and community a variety of styles. ``` ``` A team attended a training conference for large UK churches which impacted the training and direction for Trustees. ``` ``` Church Members served as volunteers in other local charities and organisations. These included reading mentors for primary school children and collecting food and household products for Fareham and Gosport Basics Bank. ``` ``` The Trustees confirm they have complied with the duty imposed by the Charities Act 2011 and have given due regard to the guidance in respect of public benefit. ``` ``` The Church is dependent on its membership serving as volunteers in all aspects of the Church’s activities. ``` ``` 5 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`TRUSTEES’ ANNUAL REPORT`** `(continued)` ## **`Year ended 31 December 2021`** ## **`SECTION 2 – ACHIEVEMENTS AND PERFORMANCE`** `(continued)` ``` The Hub has continued to grow and help increasing numbers of people in need within the Western Wards of Fareham. Three drop-in sessions are now held each week. The main service provision is now based around food – both on a free and donation basis. In 2021 we carried out 3,107 helps. The Hub works closely with local schools, local and county councils, Citizens Advice and other local statutory and voluntary organisations. Grant funding and donations of food and finances from trusts, local organisations, businesses and individuals in our church and community continue to sustain this ministry. ``` ## **`SECTION 3 - FINANCIAL REVIEW`** ``` The financial results for the year, together with a summary of the accounting policies adopted are set out in the accompanying financial statements. The Church sustained a deficit on General Fund operations of £23,006 compared with a surplus of £73,253 in 2020. The current year deficit includes a provision of £8,098 to settle the Church’s estimated defined benefit pension liability. This liability was advised by the Scheme actuaries as a consequence of the Church’s last qualifying employee leaving the Scheme effective 31 July 2021. See Note 29 for further details. ``` ``` The Church continues to raise the funds which it needs to carry on its activities and provide for additional fitting out costs for both North and South buildings from within its own membership and congregation. ``` ``` The Church’s total reserves at 31 December 2021 were £4,236,557 (2020: £4,197,542) of which the Waypoint Hub restricted fund was £35,942 (2020: £18,921) and designated funds for functional and investment properties totalled £3,917,650 (2020: £3,820,433). Going forward, the functional freehold properties fund will be reduced by an amount equal to the capital repayments of the mortgage loan and the buildings depreciation charge each year. The investment property fund will increase or decrease according to the variation in fair value adjustment recorded in the SOFA each year. These funds can only be realised by the disposal of the properties to which they relate. ``` ``` The Church’s reserves on general fund at the balance sheet date amounted to £282,615 compared with £357,838 at 31 December 2020. Liquid resources fell from £313,527 in 2020 to £205,513 at 31 December 2021 largely as a result of finalising the building and fitting-out projects that were delayed in 2020 through the lockdowns. ``` ``` The Waypoint Café opened on 3 November 2020 and traded until 23 December 2020 when it closed because of lockdown restrictions. It resumed on 14 April 2021 and traded 2 days per week until the end of the year. Details of Café trading income and expenses are set out Notes 14 and 17. There is no payroll cost associated with the Café as this activity is run entirely by volunteers. Its net contribution to Church funds in the year was £6,920. ``` ``` Since the Café is a trading activity, the Church decided not to claim VAT zero-rating for the proportion that represented the Café’s footprint within the South Building. After obtaining appropriate professional advice, the Church paid VAT input tax of £44,783 and its accounting treatment is explained in Note 6. ``` ``` It is the policy of the Church to hold a cash reserve equivalent to six months’ general running costs (including salaries and mortgage payments but excluding depreciation) to cover unforeseen emergencies. However, in order to complete the new Church building and fit-out, the Trustees agreed in 2020 for cash reserves to be temporarily reduced to 3 months running costs. In the event, the lockdown resulted in a build-up of cash in 2020 which, together with lower than expected payroll costs because of resignations of two senior personnel, has resulted in the Church being compliant with its reserves policy at 31 December 2021. But with the desire to complete the fit-out of the South Building, the Trustees may consider the reduction of its reserves policy to 3 months running costs for a limited period, not expected to exceed 18 months. ``` ``` The Waypoint Hub is a restricted income fund that provides food and other household necessities to the needy in the local community. The activity has grown since its inception from March 2020 and is funded by personal donations and grants (see Notes 12 and 13). Its total income in the year amounted to £98,343 and its expenditure £81,322 (see Note 16). ``` ``` 6 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`TRUSTEES’ ANNUAL REPORT`** `(continued)` ``` Year ended 31 December 2021 ``` ## **`SECTION 3 - FINANCIAL REVIEW`** `(continued)` ``` The Church’s total reserves on general fund amount to £282,615 (2020: £357,838) of which £117,349 (2020: £215,309) is expendable. ``` ``` The Trustees have made an assessment of the major risks facing the Church, and are satisfied that there are policies in place to minimise these risks. ``` ``` The Church is dependent on its membership serving as volunteers in all aspects of the Church’s activities. The Trustees consider that it is impractical to place an economic value on such service. ``` ## **`SECTION 4 – PLANS FOR FUTURE PERIODS AND SUBSEQUENT EVENTS`** ## `Future commitments` ``` Completion of the South Building was confirmed by Building Control inspectors in 2019. Certain finishing works outside the scope of Building Control regulations continued throughout 2020. The Church is continuing to fundraise for further fitting out works that are expected to cost around £280,000 but no firm timetable has been set for when these works are to be carried out. Completion of these works will enable the Church to provide further activities, courses and services for the Church congregation and for the community on its premises. ``` ## `Waypoint Café` ``` Waypoint Café is to extend its opening hours to a third day and one evening per week in the Spring of 2022. ``` ## **`SECTION 5 – STRUCTURE, GOVERNANCE AND MANAGEMENT`** ## **`Legal structure`** ``` The Church is a Charitable Incorporated Organisation (CIO) which is governed by a Constitution that was filed with the Charity Commission on 26 July 2016 as part of the incorporation process. This constitution follows the model agreed by The Baptist Union Corporation of Great Britain and approved by the Church members in Special meeting. ``` ``` The Trustees are elected by a Special Church Members’ Meeting on a three-year rotation. The board of the elected Trustees is known as the Full Leadership Team and all operating decisions are made by them. ``` ## **`Governance concerning Church membership`** ``` Members of the Church are accepted in accordance with the Governing Constitution which requires them: ``` - `to be or to have been publicly baptised on the profession of faith in Jesus Christ; or,` - `following other modes of baptism to renew their public profession of faith in Jesus Christ; or,` - `who may be considering baptism.` ``` Members’ Meetings normally take place five timesper year. Due to the Pandemic, Church Meetings were reduced during 2020 and 2021 and a Church Meeting, which included the AGM and a Special Church Meeting, was held online. The members’ meeting has responsibility for the overall policy of the Church. In accordance with the Constitution, the members appoint Trustees who, together with the Ministers, Church Secretary and Treasurer, and collectively known as the Full Leadership Team, are responsible for the day-to-day running of the Church’s work and witness and for the financial and legal aspects of the Church. The Trustees meet regularly. The Staff Team meet weekly and work on the premises and are available for enquiries from the community. ``` ``` All members are encouraged to take an appropriate part in the spiritual and practical tasks involved in furtherance of the Church’s aims. ``` ``` 7 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`TRUSTEES’ ANNUAL REPORT`** `(continued)` ## **`Year ended 31 December 2021`** ## **`SECTION 5 – STRUCTURE, GOVERNANCE AND MANAGEMENT`** `(continued)` ## **`Governance concerning Church membership`** `(continued)` ``` Relevant matters may be submitted to the Church Meeting by the Trustees for guidance, or may be raised by members in Church Meetings for further consideration by the Trustees. Though the Governing Document permits decisions to be made at quorate Church Meetings by appropriate majorities, the Church seeks to work by consensus wherever possible. ``` ## **`Other governance matters`** ``` The Church is affiliated to the Baptist Union of Great Britain (the BU) and receives guidance from them on a range of regulatory matters which the Church implements as appropriate. However, the BU has no direct influence upon the operating policies of the Church. ``` ``` All decisions are taken by Trustees who are accountable to the Church Meeting and work within agreed budgets. ``` ``` The Church follows the Charity Commission guidance concerning the induction and training of Trustees. ``` ``` Staff salaries including Ministers’ stipends are reviewed annually by a pay review committee formed of unremunerated Trustees and other Church Members and their deliberations are reported to the Trustees. ``` ``` The Church operates a Safe to Grow policy and has put systems in place to ensure that all people working with those under 18 are appropriately vetted, and undergo the necessary Disclosure and Barring Service (DBS) checks. The Church operates a Safe to Belong policy and system to ensure that all people working with adults at risk are similarly vetted and DBS checked. ``` ``` The Church ensures good practice in First Aid, Food Safety and Food Hygiene by making training available. ``` ``` The Church holds Insurance with the Baptist Insurance Companyincluding Employer’s Liability Insurance. ``` ## **`By order of the Board of Trustees,`** ``` …………………………………………………………………………… F Shaw (Dr) Church Secretary ``` ``` 8 June 2022 ``` ``` 8 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`STATEMENT OF TRUSTEES’ RESPONSIBILITIES`** ## **`Responsibilities relating to the financial statements`** ``` Law applicable to charities in England and Wales requires the Trustees to prepare financial statements for each accounting period which give a true and fair view of the Charity’s financial activities during the period and of its financial position at the end of the financial period. In preparing financial statements giving a true and fair view, the Trustees should follow best practice and: ``` - `select suitable accounting policies and then apply them consistently;` - `make judgements and estimates that are reasonable and prudent;` - `state whether applicable UK Accounting Standards and recommended practice 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 Charity will continue in operation.` ## **`Other responsibilities`** ``` The Trustees are also responsible for: ``` - `keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the Charity and enable them to ensure that the financial statements comply with the Charities Act 2011.` - `safeguarding the assets of the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.` - `the maintenance and integrity of the Charity and financial information included on the Charity’s website.` ``` 9 ``` ``` The Board of Trustees Waypoint operating as Waypoint Church 255 Hunts Pond Road Titchfield Common, Fareham, Hampshire PO14 4PG ``` ## **`INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF`** ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`Opinion`** ``` We have audited the financial statements of Waypoint (the Church) for the year ended 31 December 2021 which comprise the balance sheet, statement of financial activities, statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 (FRS 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 Church’s affairs as at 31 December 2021 and of its incoming resources and application of resources for the year then ended;` - `have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;` - `have been prepared in accordance with the requirements of the Charities Act 2011 (the Act).` ## **`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 responsibilities for the audit of the financial statements section of our report. We are independent of the Church in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Ethical Standard of Financial Reporting Council (FRC), and the provisions available for small entities in the circumstances set out in Note 2, 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. ``` ## **`Auditor responsibilities in respect of reporting on irregularities, including fraud`** ``` As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit and, in doing so, assess the risks of material misstatement of the financial statements whether due to fraud or error. Such misstatements are instances of non-compliance with laws and regulations and we seek to design procedures, in keeping with our responsibilities, to detect them. The extent to which our procedures are capable of detecting any such irregularities is set out below. ``` ``` The Church’s routine internal accounting control procedures that require two Church members/staff to be involved in the handling of cash could not be applied for significant portions of the Church’s 2020 and 2021 financial years because of the Covid-19 pandemic. This difficulty was exacerbated by the creation of the Waypoint Hub (the Hub) that sought to provide welfare assistance to persons or families in the local community who had been adversely affected by the Pandemic. The Hub is managed by a senior member of Church staff and its activities are financed by grants, monetary donations and gifts of food and other household necessities. The Hub’s liquid resources are used as necessary to buy required items and these, together with donated goods, are distributed to beneficiaries according to their needs. Evidence of donations of goods and cash received was not maintained in a form that was susceptible to verification by conventional audit procedures and, therefore, we consider that the audit was not capable of detecting irregularities (should any exist) in this regard. However, we are satisfied that any misstatement of net income arising from the Hub’s activities is unlikely to be material to the financial statements as a whole and, accordingly, our opinion is not modified in this respect. ``` ``` 10 ``` ``` INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF WAYPOINT (continued) ``` ## **`Conclusions relating to going concern`** ``` In auditing the financial statements, we have concluded that the Trustees’ use of the going concern basis of accounting in the preparation of the financial statements was appropriate. ``` ``` Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Church’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. ``` ``` Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report. ``` ## **`Other information`** ``` Other information comprises the information included in the Trustees’ Annual Report and our auditor’s report thereon. The Trustees are responsible for the other information contained within the Trustees’ Annual Report. 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. 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 course of the audit or otherwise appears to have been materially misstated. ``` ``` If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. 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. ``` ## **`Matters on which we are required to report by exception`** ``` In the light of the knowledge and understanding of the Church and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees’ Annual Report. ``` ``` We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion: ``` - `sufficient accounting records have not been kept; or` - `the financial statements are not in agreement with the accounting records and returns; or` - `we have not received all the information and explanations we require for our audit.` ## **`Responsibilities of trustees`** ``` As explained more fully in the statement of trustees’ responsibilities set out on page 9, the trustees 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 Church’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 Church or to cease operations, or have no realistic alternative but to do so. ``` ``` 11 ``` ``` INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF WAYPOINT (continued) ``` ## **`Auditor 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 it 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. ``` ``` We have been appointed as auditor under section 144 of the Act and report in accordance with it and the relevant regulations made or having effect thereunder. We are eligible for appointment to act as statutory auditor under section 1212 of the Companies Act 2006. ``` ``` A fuller description of our responsibilities for the audit of financial statements is located at: https://www.frc.org.uk/auditors/audit-assurance/auditor-s-responsibilities- for-the-audit-of-the-fi/description-of-the-auditor%E2%80%99s-responsibilities-forThis description forms part of our auditor’s report. ``` ``` This report is made to the Trustees as a body, in accordance with section 144 and regulations made under section 154 of the Act. Our audit work has been undertaken so that we might state to the Church’s Trustees 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 Church and the Church’s Trustees as a body, for our audit work, for this report, or for the opinions we have formed. ``` ``` ……………………………………………………… Chartered Accountants, Wood, Hicks & Co Ltd, Units 1-2 Warrior Court, Statutory Auditor 9-11 Mumby Road, Gosport, 8 June 2022 Hampshire PO12 1BS ``` ``` 12 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`BALANCE SHEET`** ## **`31 December 2021`** ``` Note 20212020 £ £ FIXED ASSETS Tangible assets 6 5,473,739 5,482,627 Investment7 465,000 420,000 —————————————————— 5,938,739 5,902,627 —————————————————— CURRENT ASSETS Debtors 8 14,259 17,430 Cash at bank and in hand 205,513 313,527 —————————————————— Total current assets 219,772 330,957 LIABILITIES Creditors: Amounts falling due within one year 9 (126,977) (144,207) ————————— ————————— Net current assets 92,795 186,750 ————————— ————————— Total assets, less current liabilities 6,031,534 6,089,377 Creditors: Amounts falling due after more than one year10 (1,794,977) (1,891,835) ————————— ————————— NET ASSETS 24 £4,236,557 £4,197,542 ═════════ ═════════ THE FUNDS OF THE CHARITY 11 Restricted income funds 35,942 18,921 Unrestricted funds 4,200,615 4,178,621 ————————— ————————— TOTAL CHARITY FUNDS £4,236,557 £4,197,542 ═════════ ═════════ Approved by the Board of Trustees for issue on 8 June 2022 and signed on its behalf by ……………………………………………………………………………… Treasurer G Woodyet ``` ``` The notes set out on pages 16 to 31 form part of these financial statements. ``` ``` 13 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`STATEMENT OF FINANCIAL ACTIVITIES`** ## **`Year ended 31 December 2021`** ``` 2021 2020 _ Unrest- Rest- Unrest- Rest- Notericted ricted Total ricted ricted Total £ £ £ £ £ £ INCOME FROM Donations and legacies 12 409,407 71,077 480,484 481,933 37,019 518,952 Charitable activities13 19,070 27,266 46,366 31,353 12,225 43,578 Other trading 14 13,975 13,975 1,543 1,543 Investments15 16,776 16,776 13,853 13,853 ————————— —————— ————————— ————————— —————— ————————— Total income 459,228 98,343 557,571 528,682 49,244 577,926 ————————— —————— ————————— ————————— —————— ————————— EXPENDITURE ON Charitable activities 16 354,713 81,322 436,035 379,280 30,323 409,603 Other trading 17 7,055 7,055 1,057 1,057 Staff severance cost 23 43,185 43,185 - Provision for settlement of defined benefit pension liability 29 8,098 8,098 - Other 20 69,18369,183 75,092 75,092 ————————— —————— ————————— ————————— —————— ————————— Total expenditure482,234 81,322 563,556 455,429 30,323 485,752 ————————— —————— ————————— ————————— —————— ————————— NET OPERATING INCOME (23,006) 17,021 (5,985) 73,253 18,921 92,174 GAINS ON INVESTMENTS 7 45,000 45,000 - ————————— —————— ————————— ————————— —————— ————————— NET INCOME 21,994 17,021 39,015 73,253 18,921 92,174 TRANSFERS BETWEEN FUNDS - - ————————— —————— ————————— ————————— —————— ————————— NET MOVEMENT IN FUNDS 21,994 17,021 39,015 73,253 18,921 92,174 RECONCILIATION OF FUNDS Total funds brought forward 11 4,178,621 18,921 4,197,542 4,105,368 - 4,105,368 ————————— —————— ————————— ————————— —————— ————————— TOTAL FUNDS CARRIED FORWARD 11 £4,200,615 £35,942 £4,236,557 £4,178,621 £18,921 £4,197,542 ═════════ ══════ ═════════ ═════════ ══════ ═════════ ``` ``` The notes set out on pages 16 to 31 form part of these financial statements. ``` ``` 14 ``` ## **`WAYPOINT`** ## `(a charitable incorporated organisation)` ## **`STATEMENT OF CASH FLOWS`** ## **`Year ended 31 December 2021`** ``` 2021 2020 £ £ Cash flows arising from charitable operating activities Net operating income for the year(as per statement of financial activities) (5,985) 92,174 Adjustments for: Depreciation charges and losses on disposal of tangible fixed assets 81,454 76,957 Implicit finance cost in defined benefit pension liability 950 1,383 Increase in defined benefit pension liability 8,098 - Mortgage interest 58,535 60,073 Hire purchase and capital lease interest 1,429 840 Decrease/(increase) in debtors 3,171 (2,409) Increase/(decrease) in creditors 1,286 (1,045) ——————— ——————— Net cash provided by charitable operating activities148,938 227,973 ——————— ——————— Cash flows from investing activities Payments for construction of South Building (122,544) (18,142) Payments for refitting North Building - (28,242) Purchases of furniture and equipment (13,473) (37,593) ——————— ——————— Cash provided by (used in) investing activities (136,017) (83,977) ——————— ——————— Cash flows from financing activities Deficiency contributions paid in respect of defined benefit pension liability (8,071) (5,948) Amount drawn down on mortgage loan facility - 200,000 Mortgage loan payments (106,364) (60,073) Hire purchase and capital lease payments (6,900) (3,520) ——————— ——————— Cash provided by (used in) finance activities (121,335) 130,459 ——————— ——————— (Decrease) increase in cash and cash equivalents in the year (108,414) 274,455 Cash and cash equivalents at the beginning of the year 313,527 39,072 ——————— ——————— Cash and cash equivalents at the end of the year £205,513 £313,527 ═══════ ═══════ Analysis of cash and cash equivalents Cash in hand 508 331 Cash at bank on call 196,781 305,234 Cash on deposit at 60 days’ notice 8,224 7,962 ——————— ——————— £205,513 £313,527 ═══════ ═══════ ``` ``` The notes set out on pages 16 to 31 form part of these financial statements. ``` ``` 15 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ## **`31 December 2021`** ## **`NOTE 1 — LEGAL STATUS, OBJECTIVES AND AFFILIATION OF WAYPOINT`** ``` Waypoint (the Church) is a charitable incorporated organisation (CIO) incorporated in England and Wales and is governed by a constitution with the objects to: ``` - `fulfil the role of a Christian Church in the Western Wards of Fareham, Hampshire and surrounding area, and` - `provide help to others promoting the Christian faith in the UK and overseas.` ``` The Church is a Public Benefit Entity within the meaning of FRS 102 and is a member church of the Baptist Union of Great Britain (BUGB), an unincorporated charitable trust registration no. 1125912. ``` ## **`NOTE 2 – ACCOUNTING FRAMEWORK AND COMPLIANCE`** ``` The financial statements have been set out in accordance with the accounting framework required under: ``` - `the Charities (Accounts and Reports) Regulations 2008;` - `the accounting regulations set out under the Charities Act 2011;` - `Financial Reporting Standard 102 (FRS 102);` - `the Statement of Recommended Practice (the SORP).` ``` There were no material departures from those standards. ``` ``` To assist the Church’s compliance with this framework, the Auditor provides accountancy services permitted under the FRC Ethical Standard 6 – Provisions Available to Auditors of Small Entities. These services are conducted on the basis that the Church has informed management who understand and approve the accountancy work the Auditor carries out. ``` ## **`NOTE 3 — NATURE AND PURPOSE OF PRINCIPAL FUNDS`** ``` The principal designated and restricted funds are as follows: ``` ## **`Designated funds`** - `(a)` _`Functional premises`_ `– funds representing the carrying value of the North and South buildings, net of related mortgage loan.` - `(b)` _`Investment property`_ `– funds representing the fair value of a former manse that is currently commercially let.` ## **`Restricted fund`** - `(c)` _`Waypoint Hub`_ `– for the provision of social welfare including food, clothing and other essentials to the needy in the local community from March 2020 funded by local authority and community grants, and corporate and personal donations.` ## **`NOTE 4 — ACCOUNTING POLICIES`** ``` The principal accounting policies adopted in the preparation of these financial statements set out below have remained unchanged from the previous year and been consistently applied in the year under review. ``` ## **`(a) Basis and content of the financial statements`** ``` The financial statements have been prepared on the basis of historical cost as modified by the fair valuation of its investment property. ``` ``` The financial statements are expressed in pounds Sterling rounded to the nearest pound and include all the assets and liabilities under the control of the Trustees of the Church. ``` ``` 16 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ``` 31 December 2021 ``` ## **`NOTE 4 — ACCOUNTING POLICIES`** `(continued)` - **`(b) Going concern`** ``` The Church’s financial statements are prepared on the going concern basis of accounting unless the Trustees intend to cease operations or have no realistic alternative but to do so. In assessing whether the going concern basis of accounting is appropriate, the Trustees take into account all available information about the future, which is at least, but not limited to, twelve months from the date when the financial statements are authorised for issue. ``` ## **`(c) Tangible fixed assets and depreciation`** ``` Functional freehold properties ``` ``` The Church premises have been capitalised at cost (estimated where actual cost information is no longer available) and are being depreciated over their economic lives at 1% straight line p.a. from the date the properties were first brought into use. ``` ``` Sums considered to represent significant enhancement expenditures but which do not extend the useful lives of the buildings are capitalised and depreciated over the remainder of the original term. Expenditures on bringing the properties and its facilities up to a modern acceptable standard are charged to the SOFA as incurred. ``` ``` Furniture, fittings and equipment ``` ``` Individual items of furniture, fittings and equipment costing not less than £500 or groups of items (such as seating) costing in total not less than £2,000 are capitalised and depreciated over their estimated economic lives at rates between 10% and 25% on a straight-line basis from the date the assets are brought into use. Lesser sums are charged to the SOFA as incurred. ``` ``` Impairment losses ``` ``` Any impairment provision considered necessary against the carrying value of functional properties or furniture, fittings and equipment is charged to the SOFA in the accounting period in which the impairment loss is recognised. ``` ``` Investment property ``` ``` The property is valued at its fair value (defined in FRS 102) as estimated by the Trustees in consultation with the letting agent at the balance sheet date. Any increase or reduction in fair value compared to the previous year is credited or charged to the SOFA as appropriate in the year in which the variation is recognised. ``` ## **`(d) Stock`** ``` Stocks of Café and Hub supplies are not counted or valued since the quantities held are limited and the stock turnover is rapid. ``` ## **`(e) Debtors`** ``` Debtors are stated at the amounts due to the Church at the balance sheet date. Prepayments are recorded for the proportion of the time-based expenditures attributable to the ensuing year. ``` ## **`(f) Cash and cash equivalents`** ``` Cash and cash equivalents comprise the amounts held in bank current accounts and cash in hand together with bank deposits on less than 90 days’ notice at the balance sheet date. ``` ## **`(g) Liabilities`** ## _`1 Generally`_ ``` Liabilities are recognised as soon as an outflow of economic benefits is considered more likely than not to occur under a legal or constructive obligation committing the Church to pay out resources. Creditors that are current liabilities, other than the Church’s defined benefit commitment to the Baptist Scheme, are recognised at the settlement amount expected to be paid at the balance sheet date. ``` ## _`2 Deferral of income`_ ``` Income received which cannot be recognised at the balance sheet date is deferred as a current liability. ``` ``` 17 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ## **`31 December 2021`** ``` NOTE 4 — ACCOUNTING POLICIES (continued) ``` - **`(g) Liabilities`** `(continued)` ## _`3 Defined benefit pension contributions`_ ``` A minister was a participant in a section of the Baptist Pension Scheme until ceasing to act effective 31 July 2021. This scheme is a multi-employer scheme that provided defined benefit (DB) pensions up to 31 December 2011 when the Scheme was closed to future DB accrual. Since the Church no longer has a member in the Scheme, in accordance with the Scheme rules a ‘cessation event’ has been triggered. As a consequence, it is required that an annuity is purchased that meets the Church’s employer debt. As explained in Note 29, the Church has provided for the whole cost of the estimated employer debt including the professional fees related thereto as notified by the Scheme trustee. ``` ``` In previous years, the Scheme had a substantial overall funding deficit. A plan was devised to recover this deficit and provision for the Present Value (PV) of the deficiency contributions payable was recorded in the financial statements as though made under defined contribution arrangements as required by sections 28.11, 28.13A and 28.17 of FRS 102. ``` ``` Fuller details of these matters are provided in Note 29. ``` ## **`(h) Funds`** ``` Tithes, donations and grants received for non-specific purposes or general funding are available for utilisation at the discretion of the Trustees and are dealt with through the General Fund. ``` ``` Certain designated funds have been created by the Trustees to ring-fence resources that are (1) not considered to be readily expendable or (2) held for specific non- restricted future purposes. ``` ``` Grants and donations received for specific charitable projects are treated as restricted income funds available only for use on such specified projects. Restricted fund deficits are carried forward provided the Trustees are satisfied that future funding will cover such deficits on a last-in-first-out basis. ``` ## **`(i) Contingencies`** ``` 1 Contingent assets ``` ``` Contingent assets (including reductions to known recorded liabilities) are not recognised in the financial statements unless the benefit is virtually certain to be obtained. Where an inflow of economic benefits is probable, a description of the nature of the contingent asset is made in the Notes to the Financial Statements together with an estimate of the financial effect where this is practical to ascertain. No disclosure is made of less certain contingent assets. ``` ## _`2 Contingent liabilities`_ ``` A description of a possible but uncertain obligation or a present obligation that cannot be reliably estimated is made in the Notes to the Financial Statements providing where practical: ``` - `an estimate of its financial effect;` - `an indication of the uncertainties relating to the amount or timing of any outflow; and, the possibility of any reimbursement.` - **`(j) Income recognition`** ``` Income is brought into account when it is more likely than not that the economic benefit will accrue to the Church. ``` ``` 1 Tithes and donations General tithes and donations received without pre-conditions attached are recognised on receipt. Gifts subject to performance-related or other conditions are recognised when such conditions are fulfilled and all the donors’ associated requirements concerning them have been complied with. ``` ## _`2 Grants receivable`_ ``` A grant that becomes receivable on the occurrence of a specified event is recognised when that event has occurred and all the grantor’s requirements with it have been complied with. ``` ``` 18 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ## **`31 December 2021`** ## **`NOTE 4 — ACCOUNTING POLICIES`** `(continued)` - **`(j) Income recognition`** `(continued)` ``` 3 Gift Aid Tax refunds receivable under gift aid arrangements are recognised by reference to the date of the related gift. Since the closure of the Building Fund on 1 September 2019, gift aid recoverable on donations to trust and special funds is credited to the General Fund. ``` ``` 4 Legacies Incoming resources from legacies are recognised when there is reasonable certainty that the legacy will be received and the value can be reliably measured. ``` ``` 5 Other operating income ``` - `Trading income is recorded separately from other income and is recognised as sales are made.` - `Charges for hire of rooms and facilities to third parties are recognised in accordance with the period of letting per the related hire agreement.` - _`6 Investment income`_ - `Property rental income is recognised in accordance with the period of letting specified in the related shorthold tenancy agreement.` - `Interest receivable is recognised in the period in which it was earned.` ``` 7 Deferral of income ``` ``` See policy note (g)2. ``` ``` 8 Gifts in kind and intangible income ``` ``` Tangible assets received as gifts for use by the Church with a market value of not less than £500 are treated as incoming resources at their actual or estimated value, including VAT where appropriate at the date the gift was made. Gifts of fixed assets are correspondingly capitalised in accordance with policy (c) above. Donated assets with a value of less than £500 are not accounted for. ``` ``` The estimated value of food and household consumables donated to the Waypoint Hub (see Note 3(c)) is recorded as voluntary income and an equal amount recorded as purchases of supplies. Donated facilities and services are recognised as incoming resources insofar as another party is bearing the financial cost of the resources supplied and the benefit is quantifiable and measurable. An equivalent cost is recorded under the appropriate expenditure caption in the SOFA. ``` ``` The Church is dependent on its congregation serving as volunteers in a wide variety of Church activities. The value of volunteers’ time is not recognised in the financial statements since there is no measurable cost for their services. ``` ## **`(k) Expenditure`** ``` Expenditure is recognised when a liability is incurred or a constructive obligation arises that results in a payment being unavoidable or a commitment to pay that is intended to be acted upon. ``` ``` 1 Charitable grant expenditure and donations ``` ``` Mission support contributions are made to organisations and individuals engaged in projects that the Church supports. Such contributions are recognised as expenditure at the earlier of payment or when they are communicated to the prospective recipient in a manner which is intended to be acted upon. The individual amounts defrayed, included in the Church life, outreach and mission caption in Note 16, are disclosed only when they are considered to be material in the context of the Church’s overall charitable activities. ``` ``` 2 Payroll cost Payroll cost includes the gross salaries, employer’s national insurance and pension contributions of Church ministers and staff net of recoveries under the government Covid-19 furlough scheme. Staff termination costs are recognised at the contractual date of severance. ``` ``` 19 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ## **`31 December 2021`** ``` NOTE 4 — ACCOUNTING POLICIES (continued) ``` - **`(k) Expenditure`** `(continued)` ``` 3 Fundraising and publicity costs ``` ``` The Church does not engage in making formal appeals outside the Church congregation that involve incurring significant costs to generate the related income. The Church has applied for grants from outside sources towards the Waypoint Hub but no external costs are incurred in making such applications. ``` ``` 4Material expenditure Where it is necessary to provide an understanding of the Church’s financial results, the nature of expenditure (including reversals of expenditure recorded in previous financial years) are recorded separately on the face of the SOFA. ``` ``` 5Other expenditure ``` ``` Insofar as it is necessary to disclose separately different elements of income, related expenditure is also disclosed separately. ``` ``` 6Defined contribution pension arrangements ``` ``` The Church operates defined pension contribution arrangements for a minister and certain staff. These contributions are charged as expenditure when they fall due and are invested separately from the Church’s assets. ``` ``` The present value (PV) of deficiency contributions required by the Scheme reduces the DB liability at PV carried in the balance sheet. The implicit finance cost representing the difference between deficiency contributions paid and their respective PVs is charged to the SOFA (see Note 21). ``` - **`(l) Value added tax`** ``` Since the Church is not registered for VAT, the cost of all input VAT charged to the Church is included with the expense to which it relates. ``` ``` Regarding the construction of the South Building referred to in (c) above, the Trustees consider that Church is the recipient of services for a relevant charitable purpose otherwise in the course or furtherance of business and, as such, is entitled to zero-rating for VAT. ``` ``` As explained in Note 6, the Church has disclaimed its zero-rating entitlement attributable to the area used by Waypoint Café for trading purposes. ``` - **`(m) Charitable support and administration`** ``` All central costs for charitable support and administrative charges are met from general funds. No attribution has been made to Waypoint Hub in 2020 or 2021 for such costs. ``` - **`(n) Corporation tax`** ``` The Church is exempted under tax legislation from liability to corporation tax on its operating surpluses, investment income or capital gains whilst it pursues its charitable objectives. ``` ## **`NOTE 5 – CRITICAL JUDGEMENTS AND ESTIMATION UNCERTAINTIES`** ## **`Judgements`** ``` In preparing these financial statements, the only judgements that have been made in applying the Church’s accounting policies, other than estimation uncertainties (see below) that have a significant effect on the amounts recognised in the financial statements, are: ``` - `(a) VAT zero-rating on construction of the South Building As stated in Note 4(i), the Church has claimed VAT zero-rating on the new build at a saving of approximately £700,000. It is open to HM Revenue and Customs to dispute the Church’s claim and seek to recover this saving plus penalties. The Trustees have been aware of this risk and have made every effort to ensure compliance with the zero-rating requirements. Accordingly, the Trustees consider that the prospect of HMRC successfully disputing the Church’s claim to be remote.` ``` 20 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ## **`31 December 2021`** ## **`NOTE 5 – CRITICAL JUDGEMENTS AND ESTIMATION UNCERTAINTIES`** `(continued)` ## **`Judgements`** ``` (b)Consideration of possible impairment of functional freehold properties ``` ``` The Trustees consider that the North and South Buildings each meet their intended service potential expectations and, notwithstanding the operating difficulties resulting from the Covid-19 pandemic, in their judgement the value in use of these premises to the Church is not impaired at 31 December 2021. ``` ## **`Estimation uncertainties`** ``` The key sources of estimation uncertainty that represent a significant risk to the carrying value of assets and liabilities within the next financial year are: ``` - `(c) Depreciation of freehold buildings` ``` Freehold properties other than freehold land are depreciated over their estimated useful lives as stated in accounting policy Note 4(c) taking into account factors affecting operating longevity, regular maintenance programmes and residual values where appropriate. The Church’s policy is to write off the construction cost of functional Church buildings over 100 years. However, this policy is reviewed annually by the Trustees and may require re-assessment for factors such as technical innovation, building regulations and changes in user preferences that could affect the future charges for depreciation. ``` ## **`NOTE 6 — TANGIBLE FIXED ASSETS`** ## **`Year ended 31 December 2021`** ``` Functional Furniture, freehold fittings & propertiesequipment Total £ £ £ Cost or valuation At beginning of year 5,630,972 243,804 5,874,776 Additions during year 59,094 13,473 72,567 Disposals during year (7,741) (7,741) ————————— ——————— ————————— At 31 December 2021 5,690,066 249,536 5,939,602 ————————— ——————— ————————— Depreciation At beginning of period 330,539 61,610 392,149 Charge for year 54,707 26,500 81,207 Eliminated on disposal (7,493) (7,493) ————————— ——————— ————————— At 31 December 2021 385,246 80,617 465,863 ————————— ——————— ————————— Net book value At 31 December 2021 £5,304,820 £168,919 £5,473,739 ═════════ ═══════ ═════════ Year ended 31 December 2020 Cost or valuation At beginning of year 5,515,335 206,211 5,721,546 Additions during year 115,637 37,593 153,230 ————————— ——————— ————————— At 31 December 2020 5,630,972 243,804 5,874,776 ————————— ——————— ————————— Depreciation At beginning of period 277,442 37,750 315,192 Charge for year 53,097 23,860 76,957 ————————— ——————— ————————— At 31 December 2020 330,539 61,610 392,149 ————————— ——————— ————————— Net book value At 31 December 2020 £5,300,433 £182,194 £5,482,627 ═════════ ═══════ ═════════ ``` ``` 21 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ## **`31 December 2021`** ## **`NOTE 6 — TANGIBLE FIXED ASSETS`** `(continued)` ``` The mortgage loan facility described in Note 10 is secured by a first legal mortgage and charge dated 20 June 2018 against the Church’s functional freehold properties that have a combined carrying value at 31 December 2021 and 31 December 2020 of £5,304,820 and £5,300,433 respectively. ``` ``` The Church, as an eligible body entitled to VAT zero-rating on the construction costs of the South Building disclaimed the part of its entitlement attributable to the area used for trading purposes by Waypoint Café. A VAT charge of £44,783 was invoiced by the building contractors on 9 April 2021 and this was duly settled and capitalised in the year. ``` ## **`NOTE 7 — INVESTMENT PROPERTY`** ``` Residential property for commercial letting: ``` ``` 2021 2020 £ £ Fair value at beginning of year 420,000 420,000 Fair value adjustment 45,000 - ——————— ——————— £465,000 £420,000 ═══════ ═══════ NOTE 8 — DEBTORS 2021 2020 £ £ Gift Aid tax recoverable 10,271 13,244 Other debtor - 1,569 Prepayments 3,988 2,617 ———————————— £14,259 £17,430 ══════ ══════ ``` ``` NOTE 9 — CREDITORS: Amounts falling due within one year ``` ``` 2021 2020 £ £ Short term portion of: - Mortgage loan 59,048 47,830 - Hire purchase and capital lease commitments 4,161 3,033 - Defined benefit pension liability (see Note 29) 46,500 8,109 Suppliers’ accounts payable 4,018 3,459 Amount due to building contractors - 69,253 Taxation and social security 1,968 3,354 Other creditors 1,676 499 Accrued charges 9,606 8,670 ——————— ——————— £126,977 £144,207 ═══════ ═══════ ``` ``` 22 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ## **`31 December 2021`** ``` NOTE 10 – CREDITORS: Amounts falling due after more than one year ``` ``` 2021 2020 £ £ Long term portion of: - Mortgage loan 1,793,122 1,852,171 - Hire purchase and lease commitments 1,855 2,250 - Defined benefit pension liability - 37,414 ————————— ————————— £1,794,977 £1,891,835 ═════════ ═════════ These long term liabilities fall due: - between the second and fifth years inclusive 325,995 287,234 - after more than five years 1,468,982 1,604,601 ————————— ————————— £1,794,977 £1,891,835 ═════════ ═════════ ``` ``` The mortgage facility provided by CAF Bank of £1,900,000 was fully drawn down in May 2020. The assets pledged as security for this loan are described at the foot of Note 6. The loan became subject to capital repayments from February 2021. ``` ## **`NOTE 11 – MOVEMENTS ON FUNDS`** ``` Year ended 31 December 2021 Funds Fund Funds brought Incoming Resources transfers carried forward resourcesexpendedandother forward £ £ £ £ £ Unrestricted funds General fund 357,838 459,228 (427,379) (107,072) 282,615 Designated funds: Functional premises 3,400,433 (54,855) 107,072 3,452,650 Investment property 420,000 45,000 465,000 Parent and Toddler 350 350 ————————— ——————— ——————— ——————— ————————— 4,178,621 504,228 (482,234) - 4,200,615 Restricted income fund Waypoint Hub 18,921 98,343 (81,322) 35,942 ————————— ——————— ——————— ——————— ————————— £4,197,542£602,571 £(563,556) £ - £4,236,557 ═════════ ═══════ ═══════ ═══════ ═════════ Year ended 31 December 2020 Unrestricted funds General fund 147,125 528,682 (402,332) 84,363 357,838 Designated funds: Functional premises 3,537,893 (53,097) (84,363) 3,400,433 Investment property 420,000 420,000 Parent and Toddler 350 350 ————————— ——————— ——————— ——————— ————————— 4,105,368 528,682 (455,429) - 4,178,621 Restricted income fund Waypoint Hub - 49,244 (30,323) 18,921 ————————— ——————— ——————— ——————— ————————— £4,105,368 £577,926 £(485,752) £ - £4,197,542 ═════════ ═══════ ═══════ ═══════ ═════════ ``` ``` 23 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ``` 31 December 2021 ``` ``` NOTE 12 — DONATIONS AND LEGACIES ``` ``` 2021 2020 _ Unrest- Rest- Unrest- Rest- ricted ricted Total ricted rictedTotal £ £ £ £ £ £ Monetary offerings and donations 347,319 40,077 387,396 396,496 22,019 418,515 Gift Aid tax refundable 62,088 62,088 65,437 65,437 Legacy - 20,000 20,000 Estimated value of gifts in kind 31,000 31,000 15,000 15,000 ——————— —————— ——————— ——————— ——————— ——————— £409,407 £71,077 £480,484 £481,933 £37,019 £518,952 ═══════ ══════ ═══════ ═══════ ═══════ ═══════ ``` ## **`NOTE 13 — INCOME FROM CHARITABLE ACTIVITIES`** ||**`2021`**`2020 _ `| |---|---| ||**`Unrest- Rest-`** `Unrest- Rest-`| ||**`ricted ricted Total`**`rictedrictedTotal`| ||**`£ £ £`**`£ £ £`| |`Room hire`|**`14,956 14,956`**`6,187 6,187`| |`Service user contributions`|**`20`** **`20`**`327 327`| |`Other income`|**`-`**`195 195`| |`Grants received from:`|| |`Hampshire County Council`|**`15,250 15,250`**`18,000 18,000`| |`Fareham Borough Council`|**`6,016 6,016`**`3,750 3,750`| |`Community organisations`|**`3,500 3,500`**`7,975 7,975`| |`Other corporate`|**`2,500 2,500`**`500 500`| |`Church life, outreach`|| |`and mission`
|**`143`** **`143`**`3,492 3,492`| |
`Children’s & youth ministries`**`3,951 3,951`**`3,152 3,152`|| ||**`—————— —————— ——————`** `—————— —————— ——————`| ||**`£19,070 £27,266 £46,336`**`£31,353 £12,225 £43,578`| ||**`══════ ══════ ══════`**`══════ ══════ ══════`| ``` NOTE 14 – OTHER TRADING INCOME ``` ``` 2021 2020 _ Unrest- Rest- Unrest- Rest- ricted ricted Total ricted rictedTotal Waypoint Café Café sales £13,975 £ - £13,975 £1,543 £ - £1,543 ══════ ═════ ══════ ═════ ═════ ═════ ``` ``` NOTE 15 — INCOME FROM INVESTMENTS ``` ``` 2021 2020 _ Unrest- Rest- Unrest- Rest- ricted ricted Total ricted rictedTotal £ £ £ £ £ £ Investment property rental 16,500 16,500 13,740 13,740 Bank interest received 276 276 113 113 —————— ————— —————— —————— ————— —————— £16,776 £ - £16,776 £13,853 £ - £13,853 ══════ ═════ ══════ ══════ ═════ ══════ ``` ``` The investment property is under a shorthold tenancy agreement cancellable at one month’s notice by the tenant. ``` ``` 24 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ## **`31 December 2021`** ## **`NOTE 16 — EXPENDITURE ON CHARITABLE ACTIVITIES`** ``` 2021 2020 _ Unrest- Rest- Unrest- Rest- ricted ricted Total ricted rictedTotal £ £ £ £ £ £ Donations and services - 324 324 Payroll cost (Note 22) 139,103 139,103 156,927 156,927 Ministers’ accommodation and expenses 18,726 18,726 23,925 23,925 Minister’s sabbatical 4,104 4,104 Team leader relocation cost - 2,504 2,504 Occupancy costs (Note 18) 56,73556,735 51,190 51,190 Conferences, training and literature 1,2811,281 2,016 2,016 Website and publicity costs 367 231 598 154 154 Office and general expenses (Note 19) 19,91889020,808 19,885 19,885 Provision of supplies for Waypoint Hub 79,79779,797 30,323 30,323 Church life, outreach and mission 30,70230,702 38,495 38,495 Children’s & youth ministries 7,5567,556 2,799 2,799 Depreciation and loss on disposal of fixed assets 80,325 404 80,729 76,957 76,957 ——————— —————— ——————— ——————— —————— ——————— £354,713 £81,322 £436,035 £379,280 £30,323 £409,603 ═══════ ══════ ═══════ ═══════ ══════ ═══════ ``` ## **`NOTE 17 – OTHER TRADING EXPENSES`** ``` 2021 2020 _ Unrest- Rest- Unrest- Rest- ricted ricted Total ricted rictedTotal £ £ £ £ £ £ Waypoint Café expenditure Purchases of café supplies 4,980 4,980 1,057 - 1,057 Repairs, maintenance and equipment expensed 397 397 - Waste collection 538 538 - Training volunteers 210 210 - Bank and card charges 205 205 - Depreciation of equipment 725725 - ————— ————— ————— ————— ————— ————— £7,055 £ - £7,055 £1,057 £ - £1,057 ═════ ═════ ═════ ═════ ═════ ══════ ``` ## **`NOTE 18 – ANALYSIS OF OCCUPANCY COSTS`** ``` 2021 2020 _ Unrest- Rest- Unrest- Rest- ricted ricted Total ricted rictedTotal £ £ £ £ £ £ Light, heat and power 24,354 24,354 17,939 17,939 Water and sewerage 544 544 252 252 Buildings insurance 6,558 6,558 6,668 6,668 Building repairs and maint. 9,949 9,949 11,548 11,548 Cleaning & consumable stores 15,330 15,330 14,783 14,783 —————— ————— —————— —————— ————— —————— £56,735 £ - £56,735 £51,190 £ - £51,190 ══════ ═════ ══════ ══════ ═════ ══════ ``` ``` 25 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ## **`31 December 2021`** ``` NOTE 19 – ANALYSIS OF OFFICE AND GENERAL EXPENSES ``` ``` 2021 2020 _ Unrest- Rest- Unrest- Rest- ricted ricted Total ricted rictedTotal £ £ £ £ £ £ Printing, photocopying, stationeryand postage 1,184 12 1,196 1,607 1,607 Telephone and internet 956 956 908 908 General insurance 1,300 1,300 1,300 1,300 Equipment testing, repairs and servicing 1,646 486 2,132 3,286 3,286 Church equipment expensed 1,308 1,308 5,941 5,941 Waste removal 980 980 1,068 1,068 Subscriptions and licences 3,116 3,116 3,534 3,534 Finance and management software 1,403 1,403 1,440 1,440 Church secretary costs 6,552 6,552 - Miscellaneous 1,473 392 1,865 801 801 —————— ——— —————— —————— ————— —————— £19,918 £890 £20,808 £19,885 £ - £19,885 ══════ ═══ ══════ ══════ ═════ ══════ NOTE 20 – OTHER EXPENDITURE 2021 2020 _ Unrest- Rest- Unrest- Rest- ricted ricted Total ricted rictedTotal £ £ £ £ £ £ Property rental expenses: Repairs and maintenance 1,405 1,405 6,085 6,085 Letting agent’s charges 1,584 1,584 1,310 1,310 Building insurance 405 405 386 386 Accountancy fees 2,400 2,400 2,400 2,400 Audit fees 2,4002,400 2,400 2,400 Finance costs (see Note 21) 60,989 60,989 62,511 62,511 —————— ————— —————— —————— ————— —————— £69,183 £ - 69,183 £75,092 £ - £75,092 ══════ ═════ ══════ ══════ ═════ ══════ ``` ``` NOTE 21 – FINANCE COSTS ``` |**`NOTE 21 – FINANCE COSTS`**|| |---|---| ||**`2021`**`2020 _`| ||**`Unrest- Rest-`** `Unrest- Rest-`| ||**`ricted ricted Total`**`rictedrictedTotal`| ||**`£ £ £`**`£ £ £`| |`Non-utilisation fees re`|| |`mortgage loan facility`
|**`-`**`215 215`| |
`Mortgage interest`|**`58,610`** **`58,610`**`60,073 60,073`| |`Hire purchase and`|| |`capital lease interest`|**`1,429`** **`1,429`**`840 840`| |`Unwinding present value`|| |`adjustment on pension`|| |`funding deficit`|**`950 950`**`1,383 1,383`| ||**`—————— ————— ——————`** _`—————— ————— ——————`_| ||**`£60,989 £ - £60,989`**`£62,511 £ - £62,511`| ||`══════ ═════ ══════ ══════ ═════ ══════`| ``` 26 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ## **`31 December 2021`** ## **`NOTE 22 - PAYROLL AND STAFFING`** ``` Staff cost is analysed below according to staff members’ main duties set out in their contracts of employment. This analysis does not include staff termination settlements that are shown separately in Note 23. ``` ``` Year ended 31 December 2021 Gross Employers’ Pension No. ofwages & nationalcontri- staff salaries insurancebutionsTotal £ £ £ £ Ministers 2 43,175 5,189 4,048 52,412 Team leadership 1 18,917 1,799 20,716 Families, children’s & youth workers 2 30,880 2,960 1,484 35,324 Administration 3 24,128 1,253 387 25,768 Caretaker 1 9,090 36 9,126 — ——————— —————— ———————————— 9 £126,190 £11,237 £5,919 143,346 ═ ═════════════ ═════ Less: Employer’s NIC allowance (4,000) Furlough recoveries (243) ——————— £139,103 ═══════ Year ended 31 December 2020 Gross Employers’ Pension No. of wages & national contri- staff salaries insurance butionsTotal £ £ £ £ Ministers 2 54,857 6,316 5,520 66,693 Team leadership 1 9,333 884 10,217 Families, children’s & youth workers 2 38,994 2,003 1,548 42,545 Administration 4 33,817 2,968 514 37,299 Caretaker 1 6,498 43 6,541 —— ——————— —————— ————— ——————— 10 £143,499 £12,214 £7,582 163,295 ══ ═══════ ══════ ═════ Less: Employer’s NIC allowance (4,000) Furlough recoveries (2,368) ——————— £156,927 ═══════ ``` ``` The average number of full-time equivalent staff is 4.5 (2020: 5.7). No employee received emoluments (excluding employer pension costs) exceeding £60,000 p.a. ``` ## **`NOTE 23 – STAFF TERMINATION SETTLEMENT`** ``` The Trustees and the senior minister, Rev M Madavan, agreed by mutual consent that his employment contract with the Church would be severed effective 31 July 2021. The termination settlement set out below included contractual pay-in-lieu-of-notice and an ex gratia sum in recognition of the esteem in which he was held by members of the Church. ``` ``` £ Gross settlement 38,703 Related employer’s national insurance contributions 2,232 Related employer’s pension contributions 2,250 —————— £43,185 ``` ``` 27 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ## **`31 December 2021`** ## **`NOTE 24 – ANALYSIS OF NET ASSETS BETWEEN FUNDS`** ``` Year ended 31 December 2021 Fixed Net curr- Other Net assetsentassets liabilitiesassets £ £ £ £ Unrestricted funds: General fund 167,121 117,349 (1,855) 282,615 Designated funds: Functional freehold properties 5,304,820 (59,048) (1,793,122) 3,452,650 Investment property 465,000 465,000 Other 350 350 ————————— ——————— ————————— ————————— 5,936,941 58,651 (1,794,977) 4,200,615 Restricted income fund: Waypoint Hub 1,798 34,144 35,942 ————————— ——————— ————————— ————————— FUNDS AT 31 DECEMBER 2021 £5,938,739 £ 92,795 £(1,794,977) £4,236,557 ═════════ ═══════ ═════════ ═════════ Year ended 31 December 2020 Fixed Net curr- Other Net assets ent assets liabilities assets £ £ £ £ Unrestricted funds: General fund 182,194 215,309 (39,665) 357,838 Designated funds: Functional freehold properties 5,300,433 (1,900,000) 3,400,433 Investment property 420,000 420,000 Other 350 350 ————————— ——————— ————————— ————————— 5,902,627 215,659 (1,939,665) 4,178,621 Restricted income fund: Waypoint Hub 18,921 18,921 ————————— ——————— ————————— ————————— FUNDS AT 31 DECEMBER 2020 £5,902,627 £234,580 £(1,939,665) £4,197,542 ═════════ ═══════ ═════════ ═════════ ``` ## **`NOTE 25 – RELATED PARTY TRANSACTIONS`** ``` Certain individuals connected with Church trustees received reward for services or reimbursement of expenses from the Church during the year as follows: Name of Nature of related party Nature of relationshipservices provided 2021 2020 £ £ Mr C Snook* Church trustee Mission support1,000 500 Miss I Madavan Relative of Church trustee Website design and development fees 40 70 Mrs R Keen** Church trustee Operational management from July 2021 6,552 - ``` ``` *Paid to Reality Outreach Ministries International of which Mr Snook is Drama Director. ``` ``` ** Payable to Printed Edge, Mrs Keen’s sole trade of which £672 remained outstanding at the balance sheet date. ``` ``` Because of Covid-19, no expenditure was incurred on leadership and training days in the year (2020: £nil). ``` ``` 28 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ## **`31 December 2021`** ## **`NOTE 26 – TRUSTEES’ REMUNERATION, BENEFITS AND EXPENSES`** ``` As permitted by the Church’s governing document, certain trustees and persons connected with them received remuneration, benefits and reimbursement of expenses for employment services rendered in the year as follows: ``` ``` Year ended31 December 2021 Gross Accomm-Payments/ Total salaryodation Pension expenses_ £ £ £ £ £ M Madavan (ceased to act 31/7/21) 29,510*18,871 8,044 2,595 J Privett 36,440 24,305 10,682 1,453 K Foster (resigned 31/8/21) 18,91718,917 C Johnson 31,764 30,280 1,484 P Griffiths 18,137 17,750 387 ——————— ——————— —————— ————— ——— £134,768 £110,123 £18,726 £5,919 £ - ═══════ ═══════ ══════ ═════ ═══ ``` ``` * Excludes termination settlement (see Note 23). ``` ``` Year ended 31 December 2020 ``` ``` Gross Accomm- Payments/ Total salary odation Pension expenses_ £ £ £ £ £ M Madavan 49,189 31,715 13,320 4,067 87 J Privett 35,107 23,142 10,513 1,452 K Foster (joined 1/9/20) 9,379 9,333 46 C Johnson 31,174 29,690 1,484 P Griffiths 23,778 23,264 514 S Sawyers (resigned 31/12/20) 9,304 9,304 ——————— ——————— —————— ————— ——— £157,931 £126,448 £23,833 £7,563 £ 87 ═══════ ═══════ ══════ ═════ ═══ ``` ## **`NOTE 27 – REMUNERATION OF KEY MANAGEMENT PERSONNEL`** ``` The Trustees listed in Note 26 above include all the key management personnel. The total employee benefits received by them including employer’s national insurance amounted to £146,005 (2020: £170,025). ``` ## **`NOTE 28 – TRUSTEE DONATIONS`** ``` The total donations received from Trustees including persons connected with them amounted to £37,431 (2020: £51,780). None of these donations attached conditions that would or might require the Church to significantly change the nature of its existing activities. ``` ## **`NOTE 29 – PENSION OBLIGATIONS`** ``` Until 31 July 2021, the Church was an employer participating in the Defined Benefits (DB) section of The Baptist Pension Scheme (the Scheme) which is administered by its pension trustee, Baptist Pension Trust Limited. The Scheme is a separate legal entity and its assets are held separately from those of the Church and the other participating employers. ``` ``` Since it is not possible to attribute the Scheme’s assets and liabilities to specific employers, it is treated as a multi-employer scheme as described in FRS 102 section 28.11A. As a consequence, the contributions are accounted for as if the Scheme were a Defined Contribution (DC) scheme where the contributions payable for benefits and expenses accruing in a year are charged to that year’s SOFA together with the impact of “deficit recovery contributions” (see below). ``` ``` 29 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ## **`31 December 2021`** ## **`NOTE 29 – PENSION OBLIGATIONS`** `(continued)` ``` The Scheme was closed to future DB accrual on 31 December 2011. From January 2012, pension provision was being made through the DC section within the Scheme. The main benefit for pre-2012 service was a DB pension of one-eightieth of final Minimum Pensionable Income (MPI) for each year of pensionable service. ``` ``` In addition to the contributions paid under the DC Plan, since the DB Plan reveals a deficit, the Scheme Trustee and BUGB agree a rate of deficit recovery contributions from the participants in the DB Plan. The Church and other employers supporting the DB Plan are collectively responsible for funding this deficit until the Scheme’s liabilities are settled in full. ``` ``` The most recent valuation was carried out at 31 December 2019 by a professionally qualified actuary using the Projected Unit method and its outcome was reported to participating employers on 2 July 2020. The Scheme Trustee reported that by virtue of a number of positive developments the estimated Plan deficit had fallen from £93m at 31 December 2016 to £18m at 31 December 2019. ``` ``` The principal consequence of this reduction is that the monthly deficit recovery contributions continue as previously but with the expectation that these might cease in June 2026. ``` ``` However, in the reporting period the employment of the Church’s sole active participant in the DB section of the Scheme was severed effective 31 July 2021 and, in accordance with the Scheme rules, a ‘cessation event’ was triggered. As a consequence, the rules require that an annuity is purchased that meets the Church’s employer debt. The Church has provided for the whole cost of the estimated employer debt liability (see below) including professional fees related thereto as notified by the Scheme trustee. Since market conditions change daily, the precise liability can only be ascertained at the time settlement is made. ``` ``` In this regard, the Church is entitled under the Scheme rules to request deferral of the settlement for a period of up to three years from 31 July 2021. In the event the Church recruits a minister who is already a member of the DB section with another participating employer during this period, the cessation event would be annulled and the regular deficiency contributions as advised by the Scheme trustee would continue to apply. The Trustees consider such an event to be possible but unlikely. ``` ``` The pension contributions paid by the Church in the year are: ``` ``` 2021 2020 £ £ DCs paid and payable in respect of employees in the year 5,919 7,550 DCs paid in connection with terminated employment (see Note 23) 2,250 - DB deficit recovery contributions paid in the year 8,071 5,870 —————— —————— £16,240 £13,420 ══════ ══════ The movements in the DB liability for the current and previous financial years are: 2021 2020 £ £ Balance at 1 January, 45,523 50,088 Deficiency contributions paid in the year (8,071) (5,948) Implicit annual finance cost in PV calculations 950 1,383 Estimated increase in Church liability as a consequence of the cessation event referred to above 8,098 - —————— —————— Liability for pension deficit at 31 December, £46,500 £45,523 ══════ ══════ ``` ``` 30 ``` ## **`WAYPOINT`** ``` (a charitable incorporated organisation) ``` ## **`NOTES TO THE FINANCIAL STATEMENTS`** ## **`31 December 2021`** ## **`NOTE 30 – GOING CONCERN`** ``` The Church constructed a building on land adjacent to the existing Church premises and arranged a 25-year commercial loan facility of £1.9m as part of the funding arrangements. The loan repayments (interest only until February 2021) are considered to be affordable out of recurring tithes and offerings of the Church congregation notwithstanding that this planned giving has noticeably declined in the latter half of 2021 and into 2022. In the current circumstances, this fall in income is sustainable because the severance of two senior employees has resulted in significant savings in payroll cost. ``` ``` At present the Church’s existing liquid resources supplemented by tithes, offerings and other income in 2022 will be sufficient to meet Church outgoings for a period of twelve months from the date of issue of these financial statements. However, the Trustees are mindful that rising interest rates could, in due course, render the mortgage repayments less affordable. Beyond this, any funding shortfalls can be met for several years by the sale of the Church’s investment property although such a course of action is not preferred by the Trustees. ``` ``` Taking all these factors into account, the Trustees are satisfied that the Church will be a going concern for the foreseeable future. ``` ``` 31 ```