OpenCharities

This text was generated using OCR and may contain errors. Check the original PDF to see the document submitted to the regulator.

2021-03-31-accounts

Charity Registration No. 229226

Company Registration No. 455366 (England and Wales )

CHURCH COMMUNITIES UK

(A COMPANY LIMITED BY GUARANTEE)

�����������������������������

FOR THE YEAR ENDED 31 MARCH 2021

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

LEGAL AND ADMINISTRATIVE INFORMATION

Board of Trustees Bernard Hibbs
Joseph Hine
Lael Page
Gregory Winter
Darlene Keiderling
Secretary Gregory Winter
Charity Number 229226
Company Number 455366
Registered Office Darvell
Brightling Road
Robertsbridge
East Sussex
TN32 5DR
Auditors H W Fisher LLP
Chartered Accountants
Acre House
11/15 William Road
London
NW1 3ER
Bankers National Westminster Bank Plc
Hastings Branch
Havelock Road
Hastings
TN34 1GW
Solicitors Bates, Wells & Braithwaite London LLP
10 Queen Street Place
London
EC4R 1BE

2

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

����������������

The Directors of Church Communities UK, who are Trustees for the purposes of charity law, present their Annual Report, ���������������������������������������������������������������group strategic report for the company and its subsidiaries, and the audited accounts for the year ended 31 March 2021.

The accounts have been prepared in accordance with the accounting policies set out in Note 1 and comply with the governing document of Church Communities UK, applicable law and requirements of SORP 2015.

LEGAL STRUCTURE AND GOVERNANCE

������������������������������������������������������������������������������������������������������������� registered in England and Wales, company number 455366. It is a religious order, registered as a charity, registration ���������������������������������������������������������������������������������������������

Directors must be Members of Church Communities UK, and are usually elected in a general meeting. Procedures for induction and training of new Directors include resources such as the relevant Charity Commission publications as well as Board Minutes and policies. The Directors were as follows at the date they approved this Report:

Bernard Hibbs Joseph Hine Lael Page Gregory Winter Darlene Keiderling

The Board is responsible for management of the Order and all Directors are involved in its daily activities. The Board has delegated certain authority to the Finance and Corporate Affairs Committee to ensure sound financial management and regulatory compliance. Like all Members of the Order, Directors and Committee members receive no remuneration or benefit connected with these roles.

OBJECTS

The Objects of the Order, as shown in the governing document, are (in an abridged form):

The advancement of the Christian faith and the promotion of the moral and spiritual welfare of the general public in the public benefit, and in particular

3

STRATEGIC REPORT

In deciding what activities the Order should undertake, the Directors have paid due regard to Charity Commission guidance on public benefit. During the year, the Order sought to fulfil its charitable Objects through two main areas of activity: Community Life and Other Charitable Work and Mission.

Community Life

The Directors are satisfied that the most effective way of advancing the Christian faith, and furthering the Objects to benefit the public, is through founding and maintaining church communities. This means demonstrating the faith and teachings of Jesus Christ and his Apostles in everyday life. The church document, Foundations of our Faith and Calling , describes this life and its biblical basis. Members live in full community of goods and complete spiritual unity while maintaining an open door for visitors. ����������������������������������������������������������������������������������

���������������������������������������������������������������������������������������������������������������� community life. Guest accommodation is available, and the communities welcomed a number of visitors during the year. Community members and visitors usually gather for meals and worship meetings at noon or in the evenings, but the COVID-19 pandemic forced many of these activities to be suspended.

Productive labour in community departments is integral to the religious vocation of community life described in the Objects. Members do not work for a salary or any remuneration and receive no pocket money. Rather, in wholehearted devotion to Christ and his church, members attend to their duties, and their needs are met to a simple standard, this being a basic principle of church community life since the time of the Apostles (Acts 2:44-45).

Adults contribute their efforts in various community departments and businesses. For example, members make high quality wooden furniture and educational play equipment that is sold to schools and nurseries through a separate primary purpose trading subsidiary, Community Products (UK) Limited. Other members work in the registered schools, communal kitchen, laundry, garden and other departments. The COVID-19 pandemic had an impact on all these activities, and the Order relied on a dynamic assessment of the risks and opportunities to support members throughout the year.

The land, buildings and equipment at each community require on-going maintenance and improvement. Several renovations and infrastructure improvements that had been put on hold due to the financial impact of COVID-19 were resumed. These improvements included water and electricity systems upgrades, and additions to accommodation. The Order intends to continue work on these projects and other planned maintenance and improvement in the coming year.

Other Charitable Work and Mission

The Order works to further the faith and mission of Jesus Christ through the publishing work, mission journeys, and other charitable work. In some cases the Order conducts these activities and in other cases grants are made to further the work of others. During each year the Directors aim to balance appropriately the efforts and resources that support this wide variety of activities.

Distribution of books, a quarterly magazine, and on-line ������������������������������������������������������������ ��������������������������������������������������������������During the past year Plough Publishing distributed thousands of books dealing with such topics as forgiveness and reconciliation, marriage, prayer, family life and facing death.

Community members ministered to the varied needs of individuals in nearby towns and villages. As Covid restrictions allowed, members regularly attended local support groups for the elderly, visited nursing homes and hospices;

4

volunteered at Covid vaccination centres, and volunteered with other charitable organisations which support the vulnerable, the homeless and refugees. In the past year, members have continued to volunteer in Thailand and Myanmar helping churches support refugees or other vulnerable people. ��������������������������������������������� many activities undertaken at each community.

Charitable Grants: The Order fulfils its charitable Objects through the two areas of activity described above. The Order is not a grant-making charity. Nevertheless, during the year and to the extent surpluses remain after carrying out the activities described above, the Order made grants to support other charities in their work for education, reconciliation, alleviation of poverty and social need, and other mission activity within the UK and abroad. The Board has delegated authority to the Finance and Corporate Affairs Committee to approve grants of up to £25,000 and any larger grants that are part of an arrangement already approved by the Board.

Collaboration with Church Communities network: To apply available resources to best effect in advancing its Objects, the Order collaborates with other organisations within the Church Communities network in support of the vocation of church community, apostolic mission and charitable giving.

Volunteers: The Directors recognise the efforts of all volunteers. Most of them are community members who participate daily in all aspects of communal living as a religious vocation.

REVIEW OF FINANCIAL POSITION

Designated Funds: At 31 March 2021�������������������������������� (£34,015,360) include a designated Fixed Asset Fund of £ 29,318,610 which is the value of ������������� tangible fixed assets. This land, buildings and equipment is essential to the vocation of church community life and its benefit to the public. This designated fund is not readily available for expenditure.

Reserves Policy: In setting the Reserves Policy, the Directors have decided that the Order should hold a minimum of £1,000,000 to ensure continuity of funding for the activities undertaken directly by the Order and the capital expenditure relating to the real property that supports these activities.

Subsidiaries: As stated in the Objects, productive labour is a vital aspect of church community life. Therefore the wholly-owned trading subsidiary, Community Products (UK) Limited, fulfils one of the primary purposes of the ��������������������������������������������������������������������������������������������������������������� equipment and furniture. While the trading subsidiary is legally distinct from the Order, the common work it provides to members is an integral part of community life. Pursuant to the terms of a Deed of Covenant, it donates its profits to the Order, thereby providing the primary source of funding for all charitable activities. The Directors recognise that provision of meaningful work for community members and visitors is one of the most important goals of the manufacturing efforts. The Order has another subsidiary, Brightling Services Ltd, which provides services to the group and donates its profits to the Order.

Strategic Risks: The Directors regularly identify and assess the major risks to which the Order is exposed. The Board has identified loss of income or catastrophic loss of assets as the most significant strategic risk faced by the Order. The Board has established systems to mitigate all risks, including strategic risks, and is satisfied that it has taken all steps reasonably practicable to minimise the impact such events would have on the Order. Day-to-day risk management is the responsibility of the Finance and Corporate Affairs Committee. This year, the Covid-19 pandemic presented operational risks, requiring ����������������������������������������������������������� including closure ������������������������������������������������������������������������������������������������������������������������ addressed the associated financial consequences of Covid-19, such as reduced trading income, spending controls, and consideration of UK government support schemes. The Directors consider the measures implemented are adequate to address the extraordinary challenges arising from current situation, and are confident that the Order is well placed to continue as a going concern.

5

DISCLOSURE OF INFORMATION TO AUDITORS

Each of the Directors has confirmed that there is no information of which they are aware which is relevant to the audit, but of which the auditor is unaware. They have further confirmed that they have taken appropriate steps to identify such relevant information and to establish that the auditors are aware of such information.

AUDITORS

In accordance with section 485 of Companies Act 2006, a resolution proposing that H W Fisher be reappointed as auditors of the company will be put to the Annual General Meeting.

On behalf of the Board of Directors:

Bernard Hibbs

Lael Page

Dated: 10 December 2021

6

CHURCH COMMUNITIES UK

STATEMENT OF TRUSTEES' RESPONSIBILITIES

The trustees, who are also the directors of Church Communities UK for the purpose of company law, are responsible for preparing the Trustees' Report and the accounts in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

A combination of Company Law and Charity Law requires the trustees to prepare accounts for each financial year which give a true and fair view of the state of affairs of the charity and of the group and of the incoming resources and application of resources, including the income and expenditure, of the charitable group for that year.

In preparing these accounts, the trustees are required to:

The trustees are 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 accounts comply with the Companies Act 2006 and the Charities act 2011. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

7

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHURCH COMMUNITIES UK

Opinion

�������������������������������������������������������������������������������������������������������������������� the year ended 31 March 2021 which comprise the consolidated statement of financial activities, the consolidated and charity statement of financial position, the consolidated and charity cash flow statement and the notes to the accounts, 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 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the accounts:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the accounts section of our report. We are independent of the group in accordance with the ethical requirements that ��������������������������������������������������������������������������������������������������������������������� other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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 is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or ������������������������������������������������������������������������������������������������������������������������� 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

The trustees are responsible for the other information. The other information comprises the information included in ������������������������������������������������������������������������������������������������������������������ cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

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

We have nothing to report in this regard.

8

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent charity and its environment obtained in ������������������������������������������������������������������������������������������������������������������������ included within the trustees' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the statement of trustees' responsibilities, the trustees, who are also the directors of the charity for the purpose of company law, are responsible for the preparation of the accounts 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 accounts that are free from material misstatement, whether due to fraud or error.

In preparing t������������������������������������������������������������������������������������������������������������� as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the accounts

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

As part of our planning process:

9

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the trustees of the charity.

A further description of our responsibilities for the audit of the accounts is located on the Financial Reporting ����������������������������������������������������������������������������������������������art of our auditor's report.

10

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE) INDEPENDEYT AUDITOR'S REPORT {CONTINUF.D) Use ofour teport Thi$ rewn is made soldv to the ckn'itxble COmPAn!'s membets. as a ixdy. in x¢cordance Mth Chapter 3 of Part 16 of the Companies.Ict_IK)6. I￿"1 work has been utthrtaktn so thai m¥hi state to the Cl￿.it#bk comp2nv's members d￿Se tnatiers we re Tequited to State io them in an a￿￿torS, Teprt ¥nd for llo other putpose. To the fu]lest exient pennitted by law. we do Iccept or assume resp>nthhty io worte other than the chantsble cornw> 2nd the chari¢able collxpAny's members Is a b(th, lor out a￿"1 woth. for this reF￿ or for iht OPXniM5 we have formed Sailc8h Mehta (Sttsior Statutory Audiwr) for and OD behalf of H W Fisher LLP Charteted A¢couDtAQt6 Stwtory Audiior .Icr¢ I40￿¥¢ IA)ndon NWI 3ER United 11

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

GROUP/CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITY INCLUDING INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 March 2021

----- Start of picture text -----
Unrestricted Designated Total funds Unrestricted Designated Total funds
funds funds 2021 funds funds 2020
Notes £ £ £ £ £ £
Income from:
Donations and legacies 2 1,430,781 - 1,430,781 2,175,576 - 2,175,576
Charitable activities 3 17,939,883 - 17,939,883 18,809,348 - 18,809,348
Other trading activities 4 6,393 - 6,393 299,511 - 299,511
Investment income 5 83,867 - 83,867 10,025 - 10,025
Total Income 19,460,925 - 19,460,925 21,294,461 - 21,294,461
Expenditure on:
Charitable activities 6 21,507,245 - 21,507,245 20,102,580 - 20,102,580
Tax 10 27,833 - 27,833 16,782 - 16,782
Total expenditure 21,535,079 - 21,535,079 20,119,362 - 20,119,362
Net income/(expenditure) (2,074,154) - (2,074,154) 1,175,099 - 1,175,099
Transfers between funds 108,207 (108,207) - -951,469 951,469 -
Currency translation adjustment 771 771 9,967 9,967
Net movement in funds
(1,965,176) (108,207) (2,073,383) 233,597 951,469 1,185,066
Fund balances at 1 April 2020 6,661,925 29,426,818 36,088,743 6,428,329 28,475,349 34,903,677
Fund balances at 31 March 2021 4,696,750 29,318,610 34,015,360 6,661,925 29,426,818 36,088,743
----- End of picture text -----

All amounts derive from continuing activities.

All gains and losses recognised in the year are included in the Statement of Financial Activities.

The Statement of Financial Activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.

12

CHURCH COMMUNITIES UK

(A COMPANY LIMITED BY GUARANTEE)

CONSOLIDATED AND CHARITY STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2021 COMPANY NUMBER: 455366

----- Start of picture text -----
Group Charity
2021 2020 2021 2020
Notes £ £ £ £
Fixed assets
Tangible fixed assets 11 30,511,237 30,799,225 29,318,610 29,426,818
Investments 12 - - 1,777,681 1,777,681
Total Fixed Assets 30,511,237 30,799,225 31,096,291 31,204,499
Current assets
Stocks 14 2,054,895 1,828,381 20,302 30,246
Debtors 15 1,708,979 1,391,021 1,349,116 3,264,304
Cash at bank and in hand 4,017,735 3,568,700 1,180,632 1,306,683
Total Current Assets 7,781,610 6,788,101 2,550,050 4,601,233
Liabilities
Creditors: amounts falling due within
one year 16 2,553,368 1,498,583 398,593 431,053
Net current assets 5,228,242 5,289,518 2,151,457 4,170,180
Total assets less current liabilities 35,739,479 36,088,743 33,247,748 35,374,679
Creditors: amounts falling due after
more than one year 21 1,946,812 - - -
Net assets 33,792,668 36,088,743 33,247,748 35,374,679
Income funds
Unrestricted funds: - - - -
Designated funds 29,318,610 29,426,818 29,318,610 29,426,818
Other charitable funds 4,474,057 6,661,925 3,929,138 5,947,861
Total Funds 17 33,792,668 36,088,743 33,247,748 35,374,679
----- End of picture text -----

The accounts were approved by the Board of Trustees on ..................................... 10 December 2021

Bernard Hibbs Trustee

Lael Page Trustee

13

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

CONSOLIDATED CASHFLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2021

----- Start of picture text -----
2021 2020
Notes £ £
Cash flows from operating activities:
Net cash provided by operating activities 19 (515,145) 2,736,790
Cash flows from investing activities:
Interest received 4,042 10,025
Payments to acquire tangible fixed assets (1,627,795) (2,401,465)
Receipts from sales of tangible fixed assets 594,380 8,000
Net cash used by investing activities (1,029,374) (2,383,440)
Cash flows from financing activities:
Cash inflows from new loans 2,000,000 -
-
Net cash received from financing activities 2,000,000
Changes in Cash and Cash Equivalents 455,481 353,350
in the Reporting Period
Effect of exchange rate changes on cash (6,446) 10,700
Movement in net cash 449,035 364,051
Cash and Cash Equivalents Brought Forward 3,568,700 3,204,649
Cash and Cash Equivalents Carried Forward 4,017,735 3,568,700
----- End of picture text -----

14

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

NOTES TO THE CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2021

1 Accounting policies

Company information

Church Communities UK is a private charitable company limited by guarantee incorporated in England and Wales. The registered office is Darvell, Brightling Road, Robertsbridge, East Sussex, TN32 5DR.

1.1 Basis of preparation

The accounts have been prepared under the historical cost convention and in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”), “Accounting and Reporting by Charities” the Statement of Recommended Practice for charities applying FRS 102, the Companies Act 2006. The Charity is a Public Benefit Entity as defined by FRS 102.

The accounts have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a true and fair view. This departure has involved following the Statement of Recommended Practice for charities applying FRS 102 rather than the version of the Statement of Recommended Practice which is referred to in the Regulations but which has since been withdrawn.

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

The Charity is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this charity, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The Charity has therefore taken advantage of exemptions from the following disclosure requirements for parent charity information presented within the consolidated financial statements:

• Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures.

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument.

1.2 Basis of consolidation

The consolidated accounts of the Group incorporate the accounts of Church Communities UK and its subsidiary undertakings Brightling Services Limited and Community Products (UK) Limited. The subsidiaries have been consolidated on a line by line basis in accordance with section 9 of FRS 102. A separate Statement of Financial Activities (SoFA) for the Charity excluding consolidated organisations is not presented as the Order has taken advantage of the provisions of section 24 of the SoRP.

1.3 Going concern

At the time of approving the accounts, the Trustees have a reasonable expectation that the Charity has adequate resources to continue in operational existence for the foreseeable future, as the trading subsidiary has continued to provide the Charity with sufficient income to cover its activities. Thus the Trustees' continue to adopt the going concern basis of accounting in preparing the accounts.

15

NOTES TO THE ACCOUNTS (CONTINUED) NOTES TO THE CONSOLIDATED ACCOUNTS

1.4 Charitable funds

Unrestricted funds are available for use at the discretion of the Trustees in furtherance of their charitable objectives unless the funds have been designated for other purposes.

Designated funds are reserves for which no specific use was specified by a third party, but for which the trustees have allocated to a particular charitable purpose as deemed appropriate.

1.5 Incoming resources

Income is recognised when the Charity is legally entitled to it after any performance conditions have been met, the amounts can be measured reliably, and it is probable that income will be received.

Cash donations are recognised on receipt. Other donations are recognised once the Charity has been notified of the donation, unless performance conditions require deferral of the amount. Income tax recoverable in relation to donations received under Gift Aid or deeds of covenant is recognised at the time of the donation.

Trading income is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.

Government grants, which include the amounts received from the Coronavirus Business Interruption Loan Scheme that cover interest and fees payable to the lender, are recognised at the fair value of the grant received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received. The income is recognised in other income on a systematic basis over the periods in which the associated costs are incurred, using the accrual model.

1.6 Resources expended

Resources expended are recognised on an accruals basis. Management and administration expenses represent central establishment costs.

Grants payable are accounted for when the Trustees have accepted a legal or moral obligation to make a donation.

Costs are allocated to their relevant activity based on management’s assessment of which activities were primarily responsible for incurring those costs

1.7 Tangible fixed assets and depreciation

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

Tangible fixed assets with a cost of £2,000 or more are capitalised and are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost or valuation of assets less estimated residual value of each asset on a straight-line basis over its expected useful life as follows:

Freehold property 2% straight line
Plant and machinery between 10% and 50% straight line
Motor vehicles between 10% and 25% straight line
Utilities (included within freehold property)
between 2% and 50% straight line
Roads (included within freehold property) between 2% and 7% straight line

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.

1.8 Investments

Fixed asset investments are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Changes in fair value are recognised in net income/(expenditure) for the year. Transaction costs are expensed as incurred.

16

NOTES TO THE ACCOUNTS (CONTINUED) NOTES TO THE CONSOLIDATED ACCOUNTS

1.8 Investments (continued)

A subsidiary is an entity controlled by the charity. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.9 Impairment of fixed assets

At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in Statement of Financial Activity for the year, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately, unless the relevant asset is carried in at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.10 Stock and work in progress

Stock and work in progress are stated at the lower of cost and net realisable value except finished goods which are valued at 50% of sales price in order to incorporate an element of fixed and variable overheads. Cost includes all direct costs incurred in bringing the stocks to their present location and condition.

The purchase cost of raw materials is calculated on a first in first out basis. Net realisable value is based on estimated selling price less further costs expected to be incurred to completion and disposal.

1.11 Cash and cash equivalents

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

1.12 Financial instruments

The Charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of 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 in the financial statements, with the net amounts presented in the accounts 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.

17

NOTES TO THE ACCOUNTS (CONTINUED) NOTES TO THE CONSOLIDATED ACCOUNTS 1.12 Financial instruments (Continued)

Basic financial assets

Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Basic financial liabilities

Basic financial liabilities, including trade and other payables, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

1.13 Foreign exchange

Transactions denominated in foreign currencies are recorded at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. All differences are taken to the Statement of Financial Activities.

1.14 Deferred tax

Deferred tax is provided in full on timing differences which result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the accounts. Deferred tax is not provided on timing differences arising from the revaluation of fixed assets where there is no commitment to sell the assets. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. . Deferred tax is charged or credited in the Statement of Financial Activity, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

1.15 Critical accounting estimates and judgements

In the application of the charity’s accounting policies, 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 to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on-going 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.

The Trustees do not believe there to be judgements or estimates that would be considered critical to the financial statements.

18

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

NOTES TO THE ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

2 Donations and legacies

Incoming donations from members
Other incoming donations
Donations and legacies		 Unrestricted
funds
Restricted
funds
Total 2021
Unrestricted
funds
Restricted funds
Total 2020
£
£
£
£
£
£
Current Period
Current Period
Prior Period
Prior Period
285,623
-
285,623
290,018
-
290,018
-
-
1,145,159
-
-
1,885,558
285,623
-
1,430,781
290,018
-
2,175,576

3 Charitable activities

As stated in the Objects, productive labour is a vital aspect of church community life and is, in this context, a religious activity. The Charity is the sole shareholder of Community Products (UK) Limited, a business in which the community members carry out primary purpose trading: manufacture and sale of high quality educational equipment and furniture. This subsidiary donates its taxable profits to the Charity each year under a deed of covenant. Its trading results for the year, as extracted from the audited financial statements, are summarized below.

Turnover
Sales of goods
Plough publications
Turnover		 Community
Products (UK)
Ltd and
subsidiary
Charitable
trading
Total 2021
Community
Products (UK)
Ltd and
subsidiary
Charitable
trading
Total 2020
£
£
£
£
£
£
17,563,563
367,868
17,931,431
18,796,678
-
18,796,678
-
8,452
8,452
-
12,670
12,670
17,563,563
376,320
17,939,883
18,796,678
12,670
18,809,348

Turnover analysed by geographical area is as follows:

Other charitable funds
USA
UK
Rest of the World		 2021
2020
2021
2020
£
£
£
£
18,423
140,987
-
-
17,118,325
17,464,906
376,320
12,670
803,135
1,203,455
-
-
17,939,883
18,809,348
376,320
12,670
Group
Charity
Exchange rate gain/loss
Other income		 Charitable
trading
Total 2021
Total 2020
£
£
£
(127,990)
(127,990)
165,533
134,384
134,384
133,979
6,393
6,393
299,511

19

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

NOTES TO THE ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

----- Start of picture text -----
5 Investment income
Unrestricted Total 2021 Unrestricted Total 2020
funds funds
£ £ £ £
Interest income 83,867 83,867 10,025 10,025
83,867 83,867 10,025 10,025
6 Resources expended on charitable activities
Community life Charitable Primary Total 2021
work & mission purpose
trading
£ £ £ £
Activities undertaken directly
General living costs 2,268,400 - - 2,268,400
Property improvements 142,112 - - 142,112
School and education 327,146 - - 327,146
Travel 606,164 - - 606,164
Other charitable activities - 193,193 - 193,193
Cost of sales - - 10,533,570 10,533,570
Distribution costs - - 1,472,658 1,472,658
Administrative expenses - - 588,116 588,116
Depreciation 995,937 - - 995,937
- -
Gain/(Loss) on disposal of assets (83,085) (83,085)
4,256,673 193,193 12,594,344 17,044,211
Grant funding of activities
Grants to institutions - 4,324,498 - 4,324,498
- 4,324,498 - 4,324,498
Share of governance costs 21,060 - - 21,060
Share of support costs 117,476 - - 117,476
4,395,210 4,517,691 12,594,344 21,507,245
Community life Charitable work Primary Total 2020
& mission purpose trading
Prior Year Activities undertaken directly £ £ £ £
General living costs 2,650,625 - - 2,650,625
Property improvements 77,302 - - 77,302
School and education 409,309 - - 409,309
Travel 1,412,811 - - 1,412,811
Breaking the cycle - 22,418 - 22,418
Other charitable activities - 246,806 - 246,806
Cost of sales - - 10,953,665 10,953,665
Distribution costs - - 1,863,807 1,863,807
Administrative expenses - - 552,940 552,940
Depreciation 995,778 - - 995,778
- -
Gain on disposal of assets (4,280) (4,280)
5,541,545 269,224 13,370,411 19,181,181
Grant funding of activities
Grants to institutions - 742,216 - 742,216
- 742,216 - 742,216
Share of governance costs 27,710 - - 27,710
Share of support costs 151,473 - - 151,473
5,720,728 1,011,440 13,370,411 20,102,580
----- End of picture text -----

20

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

NOTES TO THE ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

6 (Continued) Resources expended on charitable activities

Grant funding for community life was made to support other communities. Grant funding for Charitable work and mission was provided to organisations in the the UK and abroad, to support their work for peace, justice, reconciliation and non-violence; the alleviation of poverty and suffering; the education of children and adults; and community and apostolic mission. To apply available resources to best effect in advancing this charitable work and mission, the Charity collaborates with other organisations within the Church Communities network which are established for purposes similar to those of the Charity. These entities maintain their own separate governing boards and financial reporting systems.

Direct activities include founding and maintaining church communities, which the Charity considers to be the most effective means of furthering its charitable objects. Grants were made from surplus funds, but in terms of strategic priorities, the Directors do not consider grant making to be a material component of the Charity's charitable activities. This is despite the fact that amounts granted may be significant when resources are available. A list of grants made to particular institutions is available by means of a separate publication upon written request to the Directors at the registered office.

7 Governance and support costs

Audit
Legal and professional
Administrative expenses		 2021
2020
2021
2020
£
£
£
£
Current Period
Prior Period
21,060
27,710
-
-
-
-
71,632
74,361
-
-
45,844
77,112
21,060
27,710
117,476
151,473
Governance
Support

Included within support costs are fees of £nil (2020: £nil) paid to the auditors in respect of taxation related services. All of the above support and governance costs have been allocated to charitable activities – community life.

8 Trustees

None of the trustees (or any persons connected with them) received any remuneration during the year, nor were they reimbursed any expenses.

9 Employees and employment costs

Number of employees

There were no employees during the year. (2020: No Employees)

10 Tax on profit of ordinary activities

Church Communities UK is a charity registered in the UK, charity number 229226. The charity has no liability to corporation tax. Corporate tax charges incurred by its subsidiaries are as shown in the Statement of Financial Activities.

21

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

NOTES TO THE ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

----- Start of picture text -----
11 Tangible fixed assets
Group Freehold Plant and Motor Assets in Total
property machinery vehicles course of
construction
£ £ £ £ £
Cost
At 1 April 2020 33,696,220 5,706,596 1,042,140 46,380 40,491,336
Additions 909,699 303,502 96,633 317,962 1,627,795
Transfers 3,182 36,981 - (40,163) -
-
Disposals (608,970) (887,019) (45,914) (1,541,903)
At 31 March 2021 34,000,131 5,160,059 1,092,859 324,179 40,577,228
Depreciation
-
At 1 April 2020 5,594,295 3,263,526 834,290 9,692,111
-
Charge for the year 677,439 642,194 91,439 1,411,072
-
On disposals (168,108) (826,483) (42,602) (1,037,193)
At 31 March 2021 6,103,626 3,079,238 883,127 - 10,065,990
Net book value
At 31 March 2021 27,896,505 2,080,821 209,732 324,179 30,511,237
At 31 March 2020 28,101,925 2,443,070 207,850 46,380 30,799,225
Charity Freehold Plant and Motor Assets in Total
property machinery vehicles course of
construction
£ £ £ £ £
Cost
At 1 April 2020 33,696,220 2,414,335 1,042,140 4,547 37,157,242
Additions 909,699 86,843 96,633 292,064 1,385,238
Transfers 3,182 1,365 - (4,547) -
-
Disposals (608,970) (244,436) (45,914) (899,321)
At 31 March 2021 34,000,131 2,258,106 1,092,859 292,064 37,643,160
Depreciation
-
At 1 April 2020 5,594,295 1,301,840 834,290 7,730,425
-
Charge for the year 677,439 227,059 91,439 995,937
-
On disposals (168,108) (191,101) (42,602) (401,812)
At 31 March 2021 6,103,626 1,337,798 883,127 - 8,324,550
Net book value
At 31 March 2021 27,896,505 920,308 209,732 292,064 29,318,610
At 31 March 2020 28,101,925 1,112,495 207,850 4,547 29,426,818
----- End of picture text -----

22

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

12 Investments

Cost
At 1 April 2020
Additions
At 31 March 2021
Net book value
At 31 March 2021
At 31 March 2020		 Group
Investment in
group
undertaking
£
-
-
-
-
-		 Charity
Investment
in group
undertaking
£
1,777,681
-
1,777,681
1,777,681
1,777,681

Church Communities UK has a £1,627,679 investment in the shares of Community Products (UK) Limited and a £150,001 investment in the shares of Brightling Services Limited, both being wholly owned subsidiaries and companies registered in England nos. 3498955 and 10683230 respectively. Results for the year are set out below.

Turnover
Cost of sales
Distribution costs
Administrative expenses
Other income/expenditure
Profit/ (Loss) on ordinary activities
before taxation		 2021
2020
£
£
16,967,775
18,426,864
(10,439,512)
(10,928,235)
(1,076,047)
(1,727,905)
(5,594,702)
(5,529,536)
98,555
3,568
(43,932)
244,755
Community Products (UK) Limited		 2021
2020
£
£
186,160
510,640
(185,091)
(447,551)
-
-
(11,683)
(67,700)
(8,175)
5,324
(18,789)
714
Brightling Services Limited

Income from Community Products (UK) Limited is shown in the consolidated accounts as primary purpose trading, net of Deed of Covenant payable of £4,986,032 (2020: £4,929,447) and rent payable of £325,428 (2020: £312,618) to Church Communities UK and interest received of £81,229 (2020: £3,568) which is included under the heading investment income. Income from Brightling Services Limited is shown net of Deed of Covenant payable of £nil (2020: £52,989).

23

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

NOTES TO THE ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

----- Start of picture text -----
12 Investments (continued)
Community Products (UK) Limited Brightling Services Limited
2021 2020 2021 2020
£ £ £ £
Turnover 16,967,775 18,426,864 186,160 510,640
Expenditure (17,011,706) (18,182,109) (204,949) (509,926)
Subsidiary income (43,932) 244,755 (18,789) 714
Subsidiary assets, liabilities and reserves: Community Products (UK) Limited Brightling Services Limited
2021 2020 2021 2020
£ £ £ £
Assets 6,682,305 6,413,566 145,313 244,886
Liabilities (4,546,760) (4,234,090) (13,387) (94,909)
Subsidiary reserves 2,135,545 2,179,477 131,926 149,977
13 Financial Instruments
Group Charity
2021 2020 2021 2020
£ £ £ £
Carrying amount of financial assets 1,602,292 1,236,393 1,319,527 3,242,673
Carrying amount of financial liabilities 2,330,676 1,498,559 385,980 418,492
14 Stocks
Group Charity
2021 2020 2021 2020
£ £ £ £
Raw materials and consumables 1,422,455 957,712 20,302 30,246
Work in progress 270,358 263,891 - -
Finished goods and goods for resale 362,083 606,778 - -
2,054,895 1,828,381 20,302 30,246
15 Debtors
Group Charity
2021 2020 2021 2020
£ £ £ £
Trade debtors 1,551,202 1,150,310 - -
Amounts owed by group undertakings - - 1,285,941 3,208,239
Other debtors 51,090 86,083 33,586 34,434
Prepayments and accrued income 106,687 154,628 29,589 21,631
1,708,979 1,391,021 1,349,116 3,264,304
Included in debtors are the following amounts due after one year:
Other Debtors 20,896 21,739 4,129 5,064
20,896 21,739 4,129 5,064
----- End of picture text -----

24

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

NOTES TO THE ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

16 Creditors: amounts falling due within one year

Bank Loans
Payments received on account
Trade creditors
Taxes
Accruals
Amounts owed to group undertakings		 2021
2020
2021
2020
£
£
£
£
222,692
-
-
-
359,595
48,850
9,381
-
1,222,554
1,027,294
352,145
396,280
660,890
381,641
-
-1,686
87,637
40,798
24,454
23,897
-
-
12,614
12,561
2,553,368
1,498,583
398,593
431,053
Charity
Group

No provision has been made for deferred tax as the reversal of the timing differences will not result in a tax charge due to the covenanting of profits.

17 Unrestricted funds

Designated funds:
Fixed asset fund
Total for Designated funds
Other charitable funds
Total Unrestricted funds
Designated funds:
Fixed asset fund
Total for Designated funds
Other charitable funds
Total Unrestricted funds		 Balance at 1
April 2020
Incoming
resources
Resources
expended
Transfers
Currency
translation
Balance at 31
March 2021
£
£
£
£
£
£
29,426,818
-
-
(108,207)
-
29,318,610
29,426,818
-
-
(108,207)
-
29,318,610
6,661,926
19,460,925
(21,535,079)
108,207
771
4,696,750
36,088,743
19,460,925
(21,535,079)
(108,207)
771
33,792,668
Balance at 1
April 2019
Incoming
resources
Resources
expended
Transfers
Currency
translation
dj
Balance at 31
March 2020
£
£
£
£
£
£
28,475,349
-
-
951,469
-
29,426,818
28,475,349
-
-
951,469
-
29,426,818
6,428,329
21,294,461
(20,119,362)
(951,469)
9,967
6,661,926
34,903,677
21,294,461
(20,119,362)
-
9,967
36,088,743
Movement in funds
Movement in funds

The Fixed asset fund represents the net book value of the Order's tangible fixed assets at the end of the year.

18 Analysis of net assets between funds

Unrestricted
funds
Designated
funds
Total 2021
Unrestricted
funds
Designated
funds
Total 2020
£
£
£
£
£
£
Fund balances at 31 March 2021 are represented by:
Tangible fixed assets
1,192,627
29,318,610
30,511,237
1,372,407
29,426,818
30,799,225
Investments
-
-
-
-
-
-
Current assets
7,781,610
-
7,781,610
6,788,101
-
6,788,101
Creditors
(4,500,180)
-
(4,500,180)
(1,498,583)
-
(1,498,583)
4,474,057
29,318,610
33,792,668
6,661,925
29,426,818
36,088,743

25

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

NOTES TO THE ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

19 Cash flow information for the group

(a) Net cash inflow from operating activities
Reconciliation to net incoming resources:
Net incoming resources
Adjusted for:
Depreciation of tangible fixed assets
Interest Income
CBILS Interest expense
Loss/(profit) on disposal of tangible fixed assets
Decrease/(increase) in stocks
Decrease/(increase) in debtors
Increase/(decrease) in creditors
Adjustments to equity
Net cash provided by operating activities
(b) Analysis of net cash
Cash at bank and in hand
Prior Year Analysis of Net Cash
Cash at bank and in hand		 2021
2020
£
£
(2,074,154)
1,175,099
1,411,072
1,472,473
(83,867)
(10,025)
26,637
-
(83,085)
(4,280)
(226,515)
(476,946)
(317,958)
754,271
832,093
(173,069)
632
(734)
(515,145)
2,736,790
1 April 2020
Cash flow
31 March 2021
£
£
£
3,568,700
449,035
4,017,735
3,568,700
449,035
4,017,735
1 April 2019
Cash flow
31 March 2020
£
£
£
3,204,649
364,051
3,568,700
3,205,422
363,278
3,568,700

20 Commitments under operating lease

At 31 March 2021 the trading subsidiary, Community Products (UK) Limited, had financial commitments for the provision of warehousing services of £378,000 expiring within one year (2020 : commitments of £378,000 expiring within one year).

At 31 March 2021 the subsidiary Brightling Services Limited had financial commitments for an asset lease of £68,412 expiring within one year (2020: £0).

26

CHURCH COMMUNITIES UK (A COMPANY LIMITED BY GUARANTEE)

NOTES TO THE ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2021

21 Creditors: amounts falling due after more than one year

----- Start of picture text -----
||||||| |---|---|---|---|---|---| |Group|Charity| |Notes|2021|2020|2021|2020| |£|£|£|£| |Bank Loans|22|1,724,119|-|-|-| |1,724,119|-|-|-| |The Coronavirus Business Interruption Loan held with National Westminster Bank PLC is secured by a debenture over all the| |Company's assets alongside a guarantee from Church Communities UK in the amount of £2,000,000.| |Amounts included above which fall due after five years are as follows:| |Payable by instalments|167,578|-|-|-| |22|Bank Loans| |Group|Charity| |2021|2020|2021|2020| |£|£|£|£| |Payable within one year|222,692|-|-|-| |Payable after one year|1,724,119|-|-|-| |1,946,812|-|-|-|

----- End of picture text -----

The Coronavirus Business Interruption Loan held with National Westminster Bank PLC is secured by a debenture over all the Company's assets alongside a guarantee from Church Communities UK in the amount of £2,000,000.

The long-term loan, being the long-term portion of the Coronavirus Business Interruption Loan held with National Westminster Bank PLC, is secured under conditions detailed in Note 21. The loan is repayable over six years, with no interest payable by the Company for the first year, a fixed rate of 2.41% for the following two years, and a variable rate of 2.09% over base rate for the following three years.

23 Post Balance Sheet Events

In August 2021, Church Communities UK purchased land and buildings in Austria totalling £3,551,561 to be used in for its charitable objectives.

27