## **LUTHERAN COUNCIL OF GREAT BRITAIN** _(Council of Lutheran Churches)_ ## **ANNUAL REPORT AND ACCOUNTS** YEAR ENDED 31 DECEMBER 2022 > ����������������������������������� > ���������������������������������� 1 ## **Contents** |LETTER FROM THE CHAIR…………………………………………………………|3| |---|---| |TRUSTEES’ REPORT………………………………………………………………...|5| |ACHIEVEMENTS AND PERFORMANCE…………………..................................|8| |FUTURE PLANS AND STRATEGY…………………………………………………|11| |FINANCIAL REVIEW………………………………………….................................|12| |PUBLIC BENEFIT…………………………………………......................................|14| |PRINCIPAL ADVISORS………………………………………………………………|15| |STATEMENT OF TRUSTEES’ RESPONSIBILTIES………………………………|16| |INDEPENDENT AUDITORS’ REPORT………………….....................................|17| |FINANCIAL STATEMENTS|| |STATEMENT OF FINANCIAL ACTIVITIES……………….………………………..|20| |BALANCE SHEET…………………………………………………………………….|21| |STATEMENT OF CASHFLOWS………………………...…………………………..|22| |NOTES TO THE FINANCIAL STATEMENTS………….......................................|23| Company registration number 557552 Charity registration number 232042 Registered Address: Ground Floor, 46-48 Webber Street, London SE1 8QW The Lutheran Council of Great Britain has adopted the working name 'Council of Lutheran Churches' (CLC). _This report has been prepared in accordance with the special provisions of the Companies Act 2006 relating to small entities._ 2 ## **LETTER FROM THE CHAIR** _Image LWF/Albin Hillert_ ## **A New Step Forward** The year 2022 will be one of the most significant years in the soon 75 years of CLC’s history. On Reformation Day – 31st October we could open the new Lutheran Centre in Trident House, Webber Street in the Waterloo area in London. What a joy! Quite a number of guests took part in the ceremony and the social gathering afterwards. We are especially grateful for Bishop Christopher Chessun’s participation at this event – as a sign of the communion which is shared between the Church of England and the Lutheran Churches in the UK and the Nordic and Baltic countries. The new space is like a dream come true, not only for the daily work of the staff of CLC, including the International Lutheran Student Chaplaincy, but also as an office for the Lutheran Church in Great Britain. I am thankful to our General Secretary, Dr Anna Krauss, together with her staff, for all their efforts to plan and create this nice and practical space we now have got. We have already experienced the great potential this new office has, to become an important Lutheran and ecumenical meeting place in a central London location. 3 I write this letter while we have entered the new year, 2023, when we shall celebrate the existence of the Council for 75 years. We want to focus on the interesting development of the work of the Lutheran council during changing circumstances. And we are looking forward to hosting, in cooperation with the LCiGB an important meeting for European Lutherans as an Pre-Assembly to the LWF’s (Lutheran World Federation) 13th General Assembly in Krakow, Poland in September. This meeting will take place at Mansfield College in Oxford, where CLC has been involved in training Lutheran pastors in earlier days, and lately also has supported a Sanctuary Scholarship at this college. Let me also mention that the General Secretary has played an increasingly important role in ecumenical circles, like Churches Together in England (CTE) and the LWF. I am sure that the CLC is fulfilling its obligation as a charity supporting our members to serve people in times when we all face uncertainty and insecurity. That is part of the Lutheran legacy since WW II, when refugees needed social and pastoral care. We are ready to move forward in faith and with hope. ## + Tor B Jørgensen Chair Council of Lutheran Churches 4 ## **TRUSTEES' REPORT** The Trustees have pleasure in presenting their report and the audited financial statements of the Lutheran Council of Great Britain, which trades as the Council of Lutheran Churches or ‘the Council’, for the year ending 31 December 2022. ## **Who we are:** The Council is a body of churches that have come together to express their shared Lutheran heritage and identity through common work in Britain, enriched by their cultural and linguistic diversity. Each church has its own administrative structure, which may be closely linked to the church in its country of origin, or to one of its synods or dioceses. They all offer particular ministries and programmes in Britain for the language groups they serve. The Council was established in 1948 to represent and co-ordinate the common work of Lutheran churches and parishes which have congregations or chaplaincies in Great Britain from a wide range of national and linguistic backgrounds. ## � **Members** The ordinary members of the Council are nominated by the member churches or parishes and approved by the Directors. The following churches nominated members to the Council in 2022: Danish Estonian Finnish Synod of German-Speaking Lutheran, Reformed and United Congregations in Great Britain Icelandic Latvian Lutheran Church in Great Britain (including Chinese, English, Polish, Swahili speaking congregations) Norwegian Swedish ## � **Trustees and Directors** - Chair: Right Revd. Tor Berger Jørgensen - Deputy Chair: Mr. Jan-Eric Österlund - Rev Therese Bazard - Rev. Dag Magnus Havgar - Ms Salla Korteniemi - Mrs Madelaine Mason - Rev. Bernd Rapp (resigned June 2022) - Mr. Paul Renken - The Ven. Mark Steadman (resigned June 2022) - Rev Silke Halfmann (appointed September 2022) - The Rev. Dr Alun Ford (appointed February 2023) 5 - **Administrative and professional staff during 2022** General Secretary: Dr Anna Krauss Chaplain: Rebecca Daniel Outreach Coordinator: Meelis Süld Administration Manager: Emily Weller Finance Manager: Judith Edward - **Committees** The Council had the following committees in 2022: _The Finance Committee:_ Responsible for monitoring the Council's financial position, compliance with regulatory and financial requirements and risk management on behalf of the Trustees. This is achieved by considering regular management accounts in relation to budgets, reports on financial controls and reviewing the risk register. Members Mr Michael Rickard (Chair of the committee) Mr Jan-Eric Österlund Dr Anna Krauss Miss Judith Edward Mr Per Jonsson (appointed February 2023) _The Investment Committee_ : Responsible for monitoring the Council’s investment performance on behalf of the Trustees, by receiving investment reports and with meetings with investment managers. Members Mr Jan-Eric Österlund (Chair of the committee) Mrs Eva Sheppard Mr Paul Renken Dr Anna Krauss Miss Judith Edward _The Nominations Committee_ : Responsible for recommendations for Trustee appointments, by identifying current or future gaps in trustee skills and seeking suitable applicants. Members Mr Paul Renken (Chair of the committee) Revd. Lagle Heinla Right Revd. Tor Berger Jørgensen _The Grants Committee_ : Responsible for proposing grant policies and strategic direction of grant awards, to oversee the grant process and to review all grants applications. The Grants Committee is responsible for the management of the two large grant agreements with the Latvian Church and the Lutheran Church in Great Britain. Members Revd. Dag Magnus Havgar (Chair of the committee) Mr Jan-Eric Österlund Mrs Anne Trinklein Dr Anna Krauss Miss Judith Edward 6 ## **Legal structure, governance and management** The organisation is a company limited by guarantee and registered as a charity in England and Wales. The Council’s governing document is the Articles of Association. The Board of Trustees comprises the directors of the company. Trustees are elected for an initial three-year period and are eligible for a further two terms of three years. The Board of Trustees can appoint a trustee to fill a casual vacancy until the next General Meeting. The Nominations Committee supports the process by seeking suitable applicants and providing recommendations. Newly elected trustees are given induction training on their duties and responsibilities as members of the Board of Trustees. Training needs are reviewed regularly and specific training is given to trustees as required. The Board of Trustees approves the remuneration of the General Secretary and the annual pay award given to all staff. Salaries are benchmarked against comparable roles in the charity and faith sectors. ## **Relationships with other bodies and external networks** The Council is a ‘recognised council’ of the Lutheran World Federation (LWF), a global communion of Lutheran churches, and is entitled to attend but not vote at assemblies of the LWF. Founded in 1947 in Lund, Sweden, the LWF represents about 95% of all Lutherans and acts in ecumenical and inter-faith relations, theology, humanitarian assistance, human rights, communication and mission and development work. There are 148 member churches spanning 99 countries in Africa, Asia, the Pacific, Europe, Latin America and North America. The Council has been actively involved in Churches Together in Britain and Ireland (CTBI), Churches Together in England (CTE), the national ecumenical bodies, as well as Faith in Europe, and the Anglican Lutheran Society. These organisations convene meetings covering a broad range of topics related to the unity of the Church, which are attended by various Council Members and trustees. The Council is a member of Bethphage (charity no 1046225). Bethphage was founded by a US based Lutheran charity supporting adults with learning disabilities. Now an entirely secular organisation, the Council remains one of the two members of Bethphage. A representative of the Council attends the Annual general Meeting and the Council’s General Secretary is a trustee of Bethphage. The connection with Bethphage enables to Council to support a minority group of vulnerable people who are often overlooked by society. 7 ## **ACHIEVEMENTS AND PERFORMANCE** ## **Objectives** The Council's main charitable object is stated in its Articles of Association: _'The advancement of the Christian religion by bearing united witness before the World to the Gospel of Jesus Christ as the power of God for salvation.'_ In meeting this objective, the Council supports chaplaincy to young people and empowers its member churches through grant giving, material support in providing office space, administration assistance, expertise over policy development and regulatory compliance. The Council also creates outreach activities with our member churches to establish a shared sense of Lutheran identity in our churches and works together with its ecumenical partners to raise awareness about Lutherans in the UK. This increases the stability of our member churches and Lutheranism in the UK in general. Thus, CLC is engaged in serving the wider community underpinned by its Christian values and seeking to strengthen the witness to Christ’s Gospel of salvation. We regularly review the uptake of grants and participation in our student chaplaincy as well as outreach activities. ## **Background** In accordance with the 2021 strategic plan, much of the work was focused on finalising the purchase of the lease and the subsequent fit out of the ground floor of Trident House in London. After two years characterized by lockdowns and the rethinking of the Council’s structure, 2022 provided the first year of relative ‘normality’ in which the new financial strategy could be tested. Both the Council and its member churches were able to operate without any Covid-related restrictions, which saw an enormous increase of in-person gatherings and activities. 2022 was also the first full year in which the newly structured work of the student chaplaincy and the outreach strategy could be implemented. The student chaplaincy was able to establish a regular pattern of activities in collaboration with St Mary’s German church and other member churches. It has built a core community of mainly international graduate students and young adults transitioning from university to employment after their degree. The outreach programme has increased our social media following threefold and we are working on engaging member churches in face-to-face activities like seminars and trainings post pandemic. We were able to negotiate major grant agreements with two of our member churches. These agreements will stabilize the respective churches’ finances and give them time to establish a financially sustainable way into the future. The invasion of Ukraine led to strong focus on support of refugees both in the UK and of LWF churches in countries surrounding Ukraine. The inflationary economy and volatile markets were also an area of concern for the Council. ## **Investment and Investment Income** At the start of 2022 we had around £21.4 million in investments, this included £2.7 million that was set aside for the purchase of the new property. After a very strong investment performance over the prior two years, with gains of £1.2 million in 2020 and £2.3 million in 2021, the less certain economic conditions led to a reduction in market values and as a result our investments fell by £1.3 million or -7.5% in 2022. The Council’s long term investment objective is an average total return of 3.5% + inflation, so that the portfolio maintains its value over the longer term and provides a sufficient return to fund operations. We exceeded this during 2021, where the growth achieved was 14.2% and the benchmark was 8.8%, but in 2022 performance at -7.5% was below the benchmark of 8 +12.6%. The Council recognises the challenges posed by the benchmark in a period of high inflation. However the portfolio outperformed the ARC (Asset Risk Consultancy) Charity Steady Growth index over the year with two percentage units (-7.5% as compared to -9.5% for the index). At the end of 2022 we had Fixed Assets of £20.6 million of which £3.7 million was in our properties at Trident House and Sandwich Street and £16.9 million in investments. These investments were managed by two different Investment Managers and spread over a substantial number of different investment funds and individual shares and bonds diversified over different industries and countries with the majority denominated in Sterling. ## **Organisation and staff** The Council did not see any changes in staff and its operations followed the strategy established in 2021. ## **Committees** All committees are meeting regularly and report back to the board. The Grants Committee is now overseeing the major agreements with two of our member churches. ## **Property** The purchase of the ground floor of Trident House was finalised in the first half of 2022. The fit out was completed in September 2022 and the Council moved into its new headquarters in October. The property has both office and meeting spaces. The meeting rooms are well equipped for hybrid meetings and have received much positive feedback from visiting groups. One of the rooms is dedicated to digital outreach with equipment for both audio and video recordings. Member churches and associated groups are encouraged to use the space for their activities. In September 2022, the trustees decided to sell the Council’s residential property in Sandwich Street. The management of a rental property takes away too much time from the small staff team. At the time of writing, the sale is in its preparatory stages. ## **Grant Giving** In 2022 we awarded nearly £275,000 in grants to our member churches of which £118,000 were destined for 2022 and the remaining amount for future years. The majority of the grants gives support to operational costs, but one grant was awarded for a Racial Justice project to help raising awareness of and overcoming racism. The Grants Committee oversaw the negotiations of two major grants agreements which are now in place and will support the respective churches to find a sustainable long-term strategy. The grant agreements are each in place for three years until 2025. The Sanctuary Scholarship which was set up for Mansfield College, Oxford, is in its second year and the Council is looking into the possibility of funding a second three-year term starting in September 2024. However, the financial implications are not fully clear yet and the Council is in contact with Mansfield College to receive full details. As an expression of gratitude for the funds which the Council received in its early years and for the establishment of the International Lutheran Student Centre (ILSC), the board decided to set aside £100,000 and donate this amount over a 10-year period towards charitable purposes at the discretion of the trustees. This means a donation of £10,000 in total will be made each year. The donation in 2022 was given to the Lutheran World Federation for the support of churches who are facing the consequences of Russia’s invasion of Ukraine. This relates to both LWF member churches in Ukraine itself as well as churches outside Ukraine 9 supporting refugees from Ukraine. ## **Student Chaplaincy** Following the strategic goals set out in 2021, the student chaplain Rebecca Daniel established regular devotional and social activities for students and developed a network of Lutheran student chaplains across the country. The Council collaborates with St Mary’s German church and is connecting both students and student chaplains from other Lutheran churches to join services and activities. The student chaplaincy remains involved in the network of chaplains in higher education and champions diversity and integration of students of all faiths and none, as well as inclusion of people from LGBTQ+ and ethnic minority backgrounds. While the international student population in the UK remains high, chaplaincy works specifically dedicated to this group of students remains an important niche not otherwise supported by many chaplaincies. 2022 saw an increase in applications for the Student Support fund. This is due to both wider publicity of the fund’s existence and an increase in the cost of living which has hit the student population particularly hard. ## **Outreach** The Council’s regular outreach activities continue. This involves mainly digital formats such as the podcast, the weekly devotional series, coverage of special church seasons and major events, as well as webinars. The theme year has not received much attention and we are working on improving our strategy to implement this. We will continue to grow the online outreach and start our Instagram and TikTok Channel in 2023. The recording studio in our new property is well equipped and helps to produce high quality content. Both the studio and the hybrid facilities of our meeting rooms have attracted our member churches and associated groups, who can use the equipment for their own recordings and meetings. In the second half of 2022, we started a collaboration on a webinar series on story telling with Churches Together England. This series has launched in February 2023. We are also preparing for a major event in March 2023, the European Pre-Assembly of the Lutheran World Federation, which will bring 120 delegates from across Europe to Oxford. They will prepare for the global assembly later in 2023. This assembly only occurs every six to seven years and is the biggest and most important event for the Lutheran World Federation. The Council is helping the Lutheran Church in Great Britain to host the Pre-Assembly and has set aside much time, workforce and money to support this event. It will give us a chance to present the life of Lutherans in the UK to a wide audience and showcase both the pressures of a small minority church and its resilience. Our ecumenical activities continue to thrive. The General Secretary will take up a presidency of Churches Together in England in May – the other five presidents are leading figures from other church traditions, such as the Archbishop of Canterbury for the Church of England and the Archbishop of Westminster for the Roman Catholic Church. 10 ## **FUTURE PLANS AND STRATEGY** Building on the experiences of a largely uninterrupted but economically challenging year, our focus for 2023 will be on the following areas: ## **a) Property** Now that Trident House is in use, we would like to see more groups and individuals use its facilities. We have already established some good relations to groups associated with the Council who would like to use the meeting rooms on a regular basis. However, we need to do more to encourage our member churches to use the space. The sale of our residential property is a priority and should be completed by the end of 2023. The money will help to strengthen our reserves, which have suffered during a year of negative investment returns. ## **b) Refining the long-term strategy** After a year of experience with the new long-term strategy, we see small areas in need of improvement that our annual strategy meeting with staff and trustees has identified. This relates to further improving the relationship-building with our member churches through specifically targeted outreach and student chaplaincy activities as well as regular visits of the congregations. We will also need to keep a close eye on the annual budget, as 2023 will be the first full year of inhabiting the new property. With a high level of inflation, especially with the increase in energy costs, we will be able to monitor how accurate our budgeting for 2023 was. We will also need to keep a close eye on investment returns and the effect of volatile markets on our reserves policy. ## c) **Raising awareness of the situation of Lutherans in the UK** Both the European Pre-Assembly at Oxford as well as the ecumenical work done by Council members will help to raise the profile of Lutherans in the UK. It is not easy to raise awareness of the difficult situation Lutheran churches in the UK are facing. At the same time, established churches are facing decline and the problems facing old structures can profit from the experience in churches which have never experienced the comfort of being ‘established’. ## **d) Support of member churches** Beyond our grant giving support for member churches, we want to focus on other ways in which our member churches can benefit from the Council’s presence. We are open to different opportunities of focusing on educational, devotional or other forms of content and will develop this into a clear vision in the coming years. ## **Going Concern** The Council is confident that it will continue to be a going concern. The Council has a very strong balance sheet and resources that will see it through the foreseeable future. The Council’s strategy is to ensure that it is sustainable over the longer-term and the annual budget is set accordingly ensuring that both short-term and long-term goals can be met. 11 ## **FINANCIAL REVIEW** ## **Review of financial position** Incoming and outgoing resources for the year are detailed in the Statement of Financial Activities (SoFA), together with the net gains and losses on investments and fixed assets. These are shown separately for the Council’s unrestricted funds, which may be used at discretion of the Board of Trustees and the Council’s restricted funds which must be spent in accordance with the donors’ wishes. ## **Overview of 2022** The purchase of Trident House was the major financial transaction in the year and was completed in May 2022. The Council had designated £2.7 million for the project and the total capital cost including the fit-out came in slightly below this amount. Operationally expenditure was steady at £0.6 million (2021: £0.6 million), and it included the first year grant award of the 3-year agreements with the Lutheran Church in Great Britain (LCiGB) for £97,000 and the Latvian Church for £18,000. After two years of successive gains (in 2020 and 2021), our investments fell in value by -7.5% in 2022. Despite this loss we remain in a healthy financial position. Net expenditure after investment profits and losses for the year amounted to £1.9 million (2021: net income £1.8 million). Total funds carried forward at 31 December amounted to £20.7 million (2021 £22.5 million). ## **Income** Total income was £0.4 million (2021: £0.4 million). The majority of income was from investments. ## **Expenditure** Total resources expended was £0.6 million in the year (2021: £0.6 million). - The Costs of Generating Funds had a modest increase to £95,000 (2021: £92,000) due to an increase in investment management fees. - Overall Charitable Expenditure was £0.5 million (2021: £0.5 million). - Direct expenditure on Grants and other support for churches was £118,000 (2021: £169,000), this had included the first year of the new 3-year agreements with LCiGB for £97,000 and the Latvian Church for £18.000. The total grant expenditure did reduce as only one Covid Support grants was made for £3,000 (2021: £60,000) and this fund has now closed. - Support costs increased by £55,000 to £227,000 as the new premises have been occupied since October 2022 and consequently depreciation and facility costs are greater. - Direct expenditure on Outreach was similar to previous year as we undertook social media activities, podcasts and training events for members. - Direct expenditure on Chaplaincy was similar to the previous year, as we provide a range of student services and events. ## **Investment Gains** There was a net loss on investments of £1.7 million (2021: net gain £2.0 million). The investment markets did not perform well in 2022 and the fall in investment values was due to geopolitical uncertainty, increasing energy prices, rising inflation and slower growth. 12 ## **The Balance Sheet** ## **Tangible Fixed Assets** The Council holds various tangible fixed assets to support its activities. In May 2022 the leasehold of the ground floor of Trident House, 46-48 Webber Street was purchased. The cost was £2.4 million including fees. A further £0.3 million was spent on the internal fit-out to provide office and meeting spaces. The Council also owns 4 Sandwich Street, which comprises four self-contained flats that are used by staff or visiting clergy. ## **Investment policy** The performance of the financial investments is measured on a total return basis (combining income and capital growth). The total return was a loss of -7.5%. It was a difficult year. However, the investments performed better than the benchmark of comparable funds, which had a loss of -9.5%. £2.7 million was withdrawn for the purchase and fit-out of Trident House. At 31 December 2022, the total investments (apart from property) were £16.9 million (2021: £21.4 million). Investments are made according to ethical principles; investments are only made in companies that have sustainable business practices and manage their environmental, social and governance responsibilities well. Both fund managers have mechanisms in place to ensure our investments meet these criteria. ## **Reserves Policy** The policy states the minimum level of working capital that is to be held in the General Fund to ensure the Council can meet its operational and grant giving activities and maintain sufficient capital to be sustainable over the medium to longer term. The level is subject to annual review. The Board of Trustees has determined that the minimum level of the General Fund should be £16.7 million and a target level of £18.6 million. At the end of 2022 the General Fund was £16.8 million, which was above the minimum level. ## **Designated Funds** The Council has four designated funds. - Fixed Asset fund which represents the funds tied up in functional fixed assets used for charitable purpose. - Property Purchase fund was for the purchase of a new Lutheran Centre that is now the focus of our operations. - Donation fund, in recognition that the ILSC was funded by donations. When it was sold it was agreed to set up this fund to make an annual donation to causes that aligned with the Council’s mission. - Student fund. This fund is to provide support to students. Further details are given in note 18 to the financial statements. ## **Restricted Funds** In 2022 the Council approved the closure of the Student Hardship Fund, this was permissible as the Council had put the restriction in place and not the donors. The funds were transferred to the designated Student fund which has a broader purpose. 13 ## **Risk Management** The Trustees have reviewed the major risks, financial and non-financial, to which the Council is exposed in the course of its current activities. The Finance Committee reviews risks at its meetings, ensures that the risk register is current and reports regularly to the Trustees in order to ensure that the risk management is kept up to date. Trustees have assessed these risks and have ensured that appropriate systems and controls exist to minimise internal risks and that effective response mechanisms exist to respond to and minimise the impact of external risks. The Council’s principal risks and mitigation strategies includes risks to safeguarding in its member churches, reputation, health and safety, governance and finance. After mitigation and considering the impact and likelihood, the Council’s top risks and the Council’s strategy for mitigating them at year end were as follows: |**Risk**|**Mitigation**| |---|---| |�
Poor investment performance,
impacting ability to give grants and
deliver outreach programme.|�
Investment committee with
investment expertise to guide
decision making; funds invested
with 2 investment managers; regular
reports from managers to monitor
performance.| |�
Reputational risk arising from a
safeguarding incident|�
Provide safeguarding training and
support to member churches| |�
Loss of IT systems or breach of
security due to malware or virus
attack|�
IT security including virus software
and passwords; backups stored off-
site; cyber crime awareness training
for staff.| ## **PUBLIC BENEFIT** The Trustees confirm that they have complied with the duty in section 4 of the Charities Act 2006 and have taken due regard of the Charity Commission's guidance on public benefit and are satisfied that the various activities of the Council provide a public benefit. All Trustees give their time voluntarily and receive no private benefit from the Council. The Council has not performed any direct fundraising activities during the current or prior year, apart from private donations. In 2022 it received no donations (2021: £675). No complaints have been referred to the Fundraising Regulator during this period. 14 ## **PRINCIPAL ADVISERS** ## **Auditors** Price Bailey, 3[rd] Floor, 24 Old Bond Street, Mayfair London W1S 4AP ## **Solicitors** BDB Pitmans LLP, 50 Broadway, London SW1H OBL ## **Investment Managers and Advisers** Cazenove Capital Management, 1 London Wall Place, London, EC2Y 5AU Rothschild & Co Wealth Management UK Limited New Court, St Swithin's Lane London EC4N 8AL United Kingdom ## **Bankers** CAF Bank Ltd, 25 Kings Hill Avenue, Kings Hill, West Malling, Kent, ME19 4JQ STATEMENT OF TRUSTEES, RESPONSIBILITIES The Trusteey (who are aLw directtys of The Lutheran Crmjnul of Great Brita￿ for the purpose$ of ¢ompany lawl are reSpO￿l￿de for prèparing the Trustees. report and the fi￿nCial statements in accordan￿ with applicable law and United Amxjrfong Standards (United Kingdom Generally Accepted A￿nting Prxtice). Company law requires the directorsto p￿pare financia statements foreach financial year. Under that law the directors have elected lo prepare the fir¢a￿al ststements in xcordance wth United Kingdom Generally A¢c4ted Accountiftg Practice (United lQTrJdom AeeA)unting Standards and apFAicable ￿WI. Undercompany Lawthe directors must not approvethe finanrial statements unless they are satisfied Ihatthey give a true farwew ofthe state ofalFairsof the charitable cc4npany and tsfthe incotning reswrces and application of resou￿. induding the income and expe￿rtUre, ofthE charitable company forthol period. In preparin9these financBI siatements. the dffectors are requlred lo.. select suitsble acc￿nting poficies and Ihen aFvly thwn Cp)nsist•: observe the methods arKI princAF4es in the Chariknes SORP FRS102 {20191: make judgments and xounting estimates that are reasonable and pruden¢ 4. state whether apF4i(3ble UK AcrA)Unty￿ Standar(Is have been folbjwed, Subject to any material deparbjres disdosed and e￿laIr￿d in the financial statements,. 5. prepare the financial ststements on the gThThJ concem basis unless it 15 inapproprrate to presume that the charitable company will ccfflliNe in operation. The Tru51ees are respjnsible ts keeyng ade(yate accountirg re￿rdS that are sufficient lo Sh and explain the charitable companys transactions and di8dose vAth ￿8￿￿atIe accvracy at any time the finanaal position of the Charitable company and enable them to ensure that the finan¢ial statements comply with Ihe CThnpanies Act20fkl. They are also respc41slble for safeguaTding the assets of the djaritable comparry and for taking reasonable steps for the preventlon and detection of fraud and other i￿eg￿all1ies. The Twstee5 are re$wn5ible for the maintenar￿e and integrity of the corporate and financial Infomati￿ induded on the charitable c(xnparfs web$ite. Le￿SlatIOn in the United Kingdom govèming the prq)aratlC￿ and disseminat￿ of financial st*ments may differ from legi*tson in otherluri5dictions. AudltOf5 The CouncAfs 3￿rt0￿. Price Bai* LLP. a limiteil liatrAfity partnerthp. ￿Ere re-appointed at the June 2022 GM. The Tmstees las ￿l￿torS f(￿ coThpany PU￿OSes) ￿4￿) held offi¢¢ al the date of approval of the AnnLHI Report and Accounis ccrfmi that, so far as they are aware. the￿ is no relevant audit infomiation of whKh the coM￿Y'S au¢ltOf5 are unaware. and each Trustee ha8 tsken au the steps that he or she ought to have laken as a Director to make himself or herself aware of any rekvant audit inf0m￿tIOn and to eststrAish that the CoMp￿Y'S audilors ar6 aw3re of that Info￿atiOn. This report has been prepared tsking advantage of the small ￿mpanieS. exemplion of section 415A of Ihe Cc¥npaiMes Act 2(Kl6. SIGNED ON BEHALF OF THE BOARD nsen an-Eric Osterlund Deputy Chair Date.. 11 023 16 ## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE LUTHERAN COUNCIL OF GREAT BRITAIN** ## **Opinion** We have audited the financial statements of The Lutheran Council of Great Britain (the ‘charitable company’) for the year ended 31 December 2022 which comprise the Statement of Financial Activities incorporating the Income and Expenditure account, the Charitable Company Balance Sheet, the Statement of Cash Flows and the related notes to the financial statements, including significant ������������������������������������������������������������������������������������������������������ applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 _The Financial Reporting Standard applicable in the UK and Republic of Ireland_ (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: - give a true and fair view of the state of the charitable company’s affairs as at 31 December 2022, and of its incoming resources and application of resources, including its income and expenditure, for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and - have been prepared in accordance with the requirements of the Companies Act 2006. ## **Basis for opinion** We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our ������������������������������������������������������������������������������������������������� evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. ## **Conclusions relating to 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 conditions that, individually or collectively, may cast significant doubt on the charitable compa������������������������������������������������������������������������������������������������� financial statements are authorised for issue. ���������������������������������������������������������������������������������������������������������� in the relevant sections of this report. ## **Other information** The other information comprises the information included in the trustees’ annual report, other than the ����������������������������������������������������������������������������������������������her ������������������������������������������������������������������������������������������������������� 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 be 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 ������������������������������ We have nothing to report in this regard. 17 **Opinions on other matters prescribed by the Companies Act 2006** In our opinion, based on the work undertaken in the course of the audit: - the information given in the trustees’ report (incorporating the directors’ report) for the financial year for which the financial statements are prepared is consistent with the financial statements; and - the directors’ report included within the trustees’ report has been prepared in accordance with applicable legal requirements. ## **Matters on which we are required to report by exception** In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors’ 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: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors’ remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit - • the trustees were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies exemptions in preparing the trustees’ report and from the requirements to prepare a strategic report. ## **Responsibilities of trustees** As explained more fully in the trustees’ responsibilities statement, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so. ## **Auditor’s responsibilities for the audit of the financial statements** Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee ��������������������������������������������������������������������ect 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. 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: We gained an understanding of the legal and regulatory framework applicable to the Charitable Company and the sector in which it operates, and considered the risk of the Charitable Company not complying with the applicable laws and regulations including fraud in particular those regulations directly related to the financial statements, including financial reporting, and tax legislation. In relation to the operations of the Charitable Company this included compliance with the Companies Act 2006, Charities Act 2011 and SORP 2019. 18 The risks were discussed with the audit team and we remained alert to any indications of noncompliance throughout the audit. We carried out specific procedures to address the risks identified. These included the following: Reviewing minutes of Board meetings, reviewing any correspondence with the Charity Commission, agreeing the financial statement disclosures to underlying supporting documentation, and made enquiries of management and officers of the Charitable Company. The procedures in place for the reporting of any incidents to the Trustee Board including serious incident reporting of these matters as necessary with the Charity Commission and a review of legal fees during the period. Management override: To address the risk of management override of controls, we carried out testing of journal entries and other adjustments for appropriateness. We also assessed management bias in relation to the accounting policies adopted and in determining significant accounting estimates. Because of the inherent limitations of an audit, there is the risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involved intentional concealment, forgery, collusion, omission or misrepresentation. A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-andguidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-foraudit.aspx. This description forms part of our auditor’s report. ## **Use of our report** This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed. ## **Michael Cooper-Davis FCCA ACA (Senior Statutory Auditor)** for and on behalf of Price Bailey LLP Chartered Accountants and Statutory Auditor 3[rd] Floor, 24 Old Bond Street, Mayfair, London W1S 4AP > Date: 08 June 2023 19 ||||Total|2021|£||2,925||||9,476|390,877||3,093|406,371||91,945||107,439|52,088|15,441|185,817|52,896|97,292|510,973|602,918|1,971,551|1,775,004|-|1,775,004|20,772,985|22,547,989| |---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---| |||||||||||||||||||||||||||||||||| ||||Restricted|funds 2021|£||-||||-|-|||-||-||-|-|-|-|-|-|-|-|-|-|-|-|7,627|7,627| |||||||||||||||||||||||||||||||||| ||||Unrestricted|funds 2021|£||2,925||||9,476|390,877||3,093|406,371||91,945||107,439|52,088|15,441|185,817|52,896|97,292|510,973|602,918|1,971,551|1,775,004|-|1,775,004|20,765,358|22,540,362| |**STATEMENT OF FINANCIAL ACTIVITIES**|**(incorporating an Income & Expenditure Account)**|**for the year ended 31 December 2022**|**Unrestricted**
**Restricted**
**Total**|**funds 2022**
**funds 2022**
**2022**|**£**
**£**
**£**||**2,000**
**-**
**2,000**||||**125**
**-**
**125**|**423,553**
**-**
**423,553**||**-**
**-**
**-**|**425,678**
**-**
**425,678**||**94,643**
**-**
**94,643**||**137,216**
**-**
**137,216**|**71,050**
**-**
**71,050**|**15,032**
**-**
**15,032**|**147,262**
**-**
**147,262**|**56,367**
**-**
**56,367**|**96,952**
**-**
**96,952**|**523,879**
**-**
**523,879**|**618,522**
**-**
**618,522**|**(1,682,859)**
**-**
**(1,682,859)**|**(1,875,703)**
**-**
**(1,875,703)**|**7,627**
**(7,627)**
**-**|**(1,868,076)**
**(7,627)**
**(1,875,703)**|**22,540,362**
**7,627**
**22,547,989**|**20,672,286**
**-**
**20,672,286**| |||||**Notes**|**Income**|**Donations and legacies**|Grants, donations and contributions
3|**Income from charitable activities**|Rental income from 4 Sandwich Street let||to clergy and temporary staff|**Income from investments**
4|**Other income**|Sundry income
5|**Total income**|**Expenditure**|**Expenditure on raising funds**
6|**Expenditure on charitable activities**|Outreach ( Ecumenical relations and communications)|Student chaplaincy|External Grants and Donations
7|Grants and other support for churches
8|Accommodation at 4 Sandwich St|Governance costs|Total charitable activities
9|**Total expenditure**|Net (losses)/gains on investments
14|**Net (expenditure) / income**|Transfer between funds|**Net movement in funds**|Funds at 1 January|Funds at 31 December
17 / 18| FfxEO ￿$278 13 14 3￿9.?32 I￿￿.224 10 21JSg,257 16N9SH 24444581 CURRENT ASSE1¥ Dubl￿¥ Cash* bBnk*bJ Intr• 15 15.247 134. lJ7.S 144n* 16 (67J13 (44. 7T￿26 105.109 lab*y NET ASSETS 16 22,547,989 17 Desv]n￿edfi*mts a￿76.965 18.W.T97 TOTALFUNOS 19 22y7.98 Tty8J **THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552** **Statement of Cash Flows for the year ended 31 December 2022** |**Cash flows from operating activities**
Net (expenditure)/income
Depreciation charges
Losses/(Gains) on investment assets
Investment income
Trade and other receivables: decrease in debtors
Trade and other payables: increase/(decrease) in creditors
(Decrease) in pension liability provision
**Net cash (used in) operating activities**
**Cash flows from investing activities**
Purchase of fixed assets
Purchase of investments
Proceeds on disposal of investments
Net cash movement in investments
Investment income
**Net cash generated from investing activities**
**Increase/(Decrease) in cash in the period**
**Cash and cash equivalents at 1 January**
**Cash and cash equivalents at 31 December**
**Net Debt Reconciliation**
**Analysis of changes in net debt:**
Cash and cash equivalents as at 1 January 2022
Cash flows
**Cash and cash equavalents as at 31 December 2022**|**2022**
**£**
**(1,875,703)**
**59,332**
**1,682,859**
**(423,553)**
**7,851**
**22,356**
**(345)**
**(527,203)**
**(2,674,840)**
**(2,620,369)**
**2,518,350**
**2,883,053**
**423,553**
**529,747**
**2,544**
**134,799**
**137,343**
**2022**
**£**
**134,799**
**2,544**
**137,343**|2021
£
1,775,004
19,478
(1,971,551)
(390,877)
175
(37,615)
(4,068)| |---|---|---| |||(609,454)| |||(22,732)
(5,191,377)
3,707,623
1,676,786
390,877| |||561,177| |||| |||(48,277)| |||183,076| |||134,799| |||| 22 **THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2022** ## **1 BASIS OF ACCOUNTING** The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019) - (Charities SORP (FRS 102)) and the Companies Act 2006. The Lutheran Council of Great Britain meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s). The Lutheran Council of Great Britain is a charitable company limited by guarantee incorporated in England and Wales, the charitable company address is listed on the company information page. The financial statements are rounded to the nearest £. ## **2 ACCOUNTING POLICIES** The principal accounting policies applied in the preparation of the financial statements are: ## **(a) Fixed assets** Properties in the ownership of the Council are stated at the cost of additions and improvements less grants received. Office equipment, fixtures and fittings are stated at cost. ## **(b) Depreciation** Assets costing over £1,000 are capitalised. Depreciation is provided on a straight line basis by reference to the expected useful lives of the assets. Their useful lives are estimated as follows: Freehold land not depreciated Freehold and leasehold properties 50 years Leasehold improvements 20 years Kitchens and bathrooms 10 years Plant and equipment 10 years Furniture and fittings 5 years Computers and office equipment 3 years ## **(c) Income** All income is accounted for when the Council has entitlement, there is probability of receipt and the amount is measurable. ## **(d) Fund accounting** Restricted funds are the unexpended balances of donations and grants held on trust to be applied for specific purposes. Designated funds are unrestricted funds that have been set aside at the discretion of the trustees for specific purposes. The purpose and use of designated funds are described in the notes to the financial statements. General funds are the accumulated surplus of income over expenditure. They are available for use at the discretion of the trustees in furtherance of the general objectives of the charity. ## **(e) Grants payable** Grants payable include all grants commitments that have been approved during the year and recipients have been notified. **(f) Investments** Fixed asset investments are stated at market value in accordance with SORP 2019. The Statement of Financial Activities includes gains and losses arising from the revaluation of investments. Cash and cash funds held by investment managers is recognised as part of investments. ## **(g) Pension cost** The Council contributes to a group staff pension scheme. All pension schemes are defined contributions schemes. The pension cost represents contributions payable by the charity during the year. ## **(h) Expenditure** Costs of charitable activities comprise expenditure directly attributable to the Council's charitable objectives plus support costs. Grant costs include all grant commitments that have been approved during the year and the recipients have been notified. The Grants Committee can approve grants under £2,000; all other grants are approved by the Board of Trustees. Support costs comprise the costs of central management and administration insofar as these are not directly attributable to other activities. They are allocated to the costs of generating funds, charitable activities and governance according to staff time spent on each activity. ## **(i) Irrecoverable VAT** Irrecoverable VAT is charged back to the original cost category where the cost was incurred. **(j) Debtors** Trade and other debtors are recognised at the settlement amount due after any trade discounts offered. Prepayments are valued at the amount prepaid net of any trade discounts due. ## **(k) Cash at bank and in hand** Cash at bank and cash in hand includes cash and short term deposits that are held at the bank. It excludes cash and cash funds held by Investment Managers. 23 **THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2022** ## **(l) Creditors** Amounts due to creditors are measured at their settlement amount. Deferred income is recognised as the amount receivable as an advanced payment for goods or services that must be provided. ## **(m) Financial Instruments** The Charity only has financial assets and liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value, except for investments which are measured at fair value. ## **(n) LCGB TRADING LIMITED** On 21 October 2008 the Lutheran Council of Great Britain acquired the entire share capital of 100 ordinary shares of £1 in a newly established company, LCGB Trading Limited, incorporated in England under the Companies Act 2006 (CA2006) as a private limited company. LCGB Trading Ltd was dormant during this year, with no income, no expenses, and so £NIL surplus in 2022 (2021: £NIL) and the accounts were not consolidated with the Lutheran Council of Great Britain. ## **(o) Critical accounting judgements and estimation uncertainty** In preparing the financial statements it is necessary to make certain judgements, estimates and assumptions that affect the amounts recognised in the financial statements. The judgements and estimates considered by the trustees to have the most significant effect on amounts recognised in the financial statements relate to the fair value of financial investments, which is made on the basis of advice from our investment managers and would be consistent with redeemed value if the asset were to be sold. The trustees do not consider there are any further critical judgements or key sources of estimation uncertainty requiring disclosure. ## **(p) Going concern** The trustees have reviewed detailed cash flow projections to December 2024 and have agreed detailed budgets for the year ended December 2023. Both sources of income and types of expenditure have been reviewed. Whilst one of the main charitable purposes is to provide grants to support Lutheran Churches, the level of expenditure is at the discretion of the trustees and can be adjusted during the year. The trustees have also considered the Council's working capital and capital expenditure requirements. As a result of the foregoing the trustees are satisfied that it is appropriate to prepare the accounts on a going concern basis. |**3**
**DONATIONS AND GRANTS**
Unrestricted
Funds
2022
£
Subscriptions from Members
2,000
Private donations
-
2,000
**4**
**INVESTMENT INCOME**
Interest receivable
Dividends receivable
**5**
**OTHER INCOME**
Sundry income
**6**
**RAISING FUNDS**
Expenses relating to:
Investment managers' fees
Support costs for managing Sandwich Street and Investments
In 2022 and 2021 all investment income was unrestricted, there|Unrestricted
Funds
2022
£
2,000
-|Restricted
Funds
2022
£
-
-|**Total**
**Funds**
**2022**
**£**
**2,000**
**-**
**2,000**
**2022**
**£**
**8,821**
**414,732**
**423,553**
**2,022**
**£**
-
**-**
**2022**
**£**
**91,169**
**3,474**
**94,643**
d investment inco|Unrestricted
Funds
2021
£
2,250
675|Restricted
Funds
2021
£
-
-|Total
Funds
2021
**£**
2,250
675| |---|---|---|---|---|---|---| ||2,000|-||2,925|-|2,925| |||was no restricte||me.||2021
£
1,164
389,713| |||||||390,877| |||||||2,021
£
3,093| |||||||3,093| |||||||2,021
£
88,504
3,441| |||||||91,945| |**7**
**EXTERNAL GRANTS AND DONATIONS**
**Support for third parties includes the following grants during th**
Unrestricted
Funds
2022
Lutheran World Federation for Ukraine crisis
10,000
Student support grants
1,703
Anglican Lutheran Society travel bursary grant
-
Student Minds donation
-
Churches Together in Britain and Ireland donation
-
11,703
Support costs
3,329
**External grants and donations**
15,032|**7**
**EXTERNAL GRANTS AND DONATIONS**
**Support for third parties includes the following grants during th**
Unrestricted
Funds
2022
Lutheran World Federation for Ukraine crisis
10,000
Student support grants
1,703
Anglican Lutheran Society travel bursary grant
-
Student Minds donation
-
Churches Together in Britain and Ireland donation
-
11,703
Support costs
3,329
**External grants and donations**
15,032|**e year.**
Restricted
Funds
2022
-
-
-
-
-|**Total**
**2022**
**£**
**10,000**
**1,703**
**-**
**-**
**-**
11,703
**3,329**
**15,032**|Unrestricted
Funds
2021
-
-
2,000
5,000
5,000|Restricted
Funds
2021
-
-
-
-
-|Total
**2021**
£
-
-
2,000
5,000
5,000| |---|---|---|---|---|---|---| ||11,703
3,329|-
-||12,000
3,441|-
-|12,000
3,441| ||15,032|-||15,441|-|**15,441**| 24 ## **THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2022** ## **8 GRANTS AND OTHER SUPPORT FOR CHURCHES** **Other support for Members includes the following grants during the year.** |Lutheran Church in Great Britain
- Bishop, Dean and Bishop's Assistant
- support for pastors
- Chaplaincy Nottingham and Leeds
- Bishop's Assistant
- capacity building / administration support
- covid support
- racial justice project
Latvian Evangelical Lutheran Church in GB
- pastor salary support
- travel and premises for services
- covid support
Icelandic Church - Covid support
Finnish Church - Covid Support
Norwegian Church - Covid Support
Swedish Church - Covid Support
German Church - Covid Support
**Grants Disbursed to Members**
Support costs
**Total Costs for Other support for churches**|Unrestricted
Funds
2022
32,700
18,011
14,800
-
26,843
-
5,000|Restricted
Funds
2022
-
-
-
-
-
-
-|**Total**
**2022**
**£**
**32,700**
**18,011**
**14,800**
**-**
**26,843**
**-**
**5,000**
**97,354**
**14,000**
**4,000**
**-**
**18,000**
**2,730**
**-**
**-**
**-**
**-**
**118,084**
**29,178**
**147,262**|Unrestricted
Funds
2021
-
18,011
12,317
16,535
26,994
10,850
5,000|Restricted
Funds
2021
-
-
-
-
-
-
-|Total
**2021**
£
-
18,011
12,317
16,535
26,994
10,850
5,000| |---|---|---|---|---|---|---| ||97,354
14,000
4,000
-|-
-
-
-||89,707
17,500
1,150
11,285|-
-
-
-|**89,707**
17,500
1,150
11,285| ||18,000
2,730
-
-
-
-|-
-
-
-
-
-||29,935
-
12,500
12,500
12,000
11,970|-
-
-
-
-
-|**29,935**
-
12,500
12,500
12,000
11,970| ||118,084
29,178|-
-||168,612
17,205|-
-|**168,612**
17,205| ||147,262|-||185,817|-|**185,817**| In 2022 a three year grant agreement was made with the Lutheran Church in Great Britain commencing May 2022. The grant comprised year1: £74,200, year 2: £75,800 and year 3: £78,800. Due to the terms of the grant agreement only the first year commitment is accounted for in the 2022 results. A further gift-in-kind of administration support is provided on an annual basis for £23,154 (2021: £22,019). In 2022 none of the flats at 4 Sandwich Street were let to clergy at a discounted rent, but one flat was let out at a discounted rate in 2021. This represented a grant to their church, St Katharine's Danish Church, of nil (2021: £1,910). ## **9 TOTAL EXPENDITURE - UNRESTRICTED FUNDS** |Costs of raising funds
Outreach
Student chaplaincy
External grants and donations
Grants and other support for churches
Accommodation at 4 Sandwich St
Governance costs
Total charitable activities
**Prior year expenditure - unrestricted funds**
Costs of raising funds
Outreach
Student chaplaincy
External grants and donations
Grants and other support for churches
Accommodation at 4 Sandwich St
Governance costs
Total charitable activities|**Support**
**costs**
**£**
3,474|**Direct Staff**
**costs**
**£**
-|**Establishment**
**and office**
**costs**
**£**
-
848
1,231
-
-
39,264
-
41,343
**41,343**
Establishment
and office
costs
£
-
-
3,672
-
-
34,304
-
37,976
37,976|**Other**
**costs and**
**grants**
**£**
91,169|**Total**
**2022**
**£**
**94,643**|Total
2021
£
91,945| |---|---|---|---|---|---|---| ||60,055
34,489
3,329
29,178
15,085
81,022|57,154
31,841
-
23,154
2,018
-|848
1,231
-
-
39,264
-|19,159
3,489
11,703
94,930
-
15,930|**137,216**
**71,050**
**15,032**
**147,262**
**56,367**
**96,952**|107,439
52,088
15,441
185,817
52,896
97,292| ||223,158|114,167||145,211|**523,879**|510,973| ||**226,632**|**114,167**||**236,380**|**618,522**|602,918| ||Support
costs
£
3,441|Direct Staff
costs
£
-||Other
costs and
grants
£
88,504|Total
2021
£
91,945|| ||32,689
17,205
3,441
17,205
15,484
82,583|64,230
31,211
-
22,019
2,385
-|-
3,672
-
-
34,304
-|10,520
-
12,000
146,593
723
14,709|107,439
52,088
15,441
185,817
52,896
97,292|| ||168,607|119,845||184,545|510,973|| ||172,048|119,845||273,049|602,918|| A further breakdown of 'Support costs' is given in note 10. Included in total charitable expenditure under "Other costs and grants" are fees of £7,822 (2021: £9,811) payable to the auditors for audit fees. Depreciation costs included were £59,332 (2021: £19,478) for the year (see note 13). There was no restricted expenditure in 2022 (2021: nil). There are no restricted funds (see note 17). 25 ## **THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2022** |**10**
**SUPPORT COSTS**
Costs of raising funds
Outreach
Student chaplaincy
External grants and donations
Grants and other support for churches
Accommodation at 4 Sandwich St
Governance costs
Total charitable activities|**Staff**
**costs**
**£**
2,320|**Office and IT**
**costs**
**£**
1,154|**Total**
**2022**
**£**
**3,474**
**60,055**
**34,489**
**3,329**
**29,178**
**15,085**
**81,022**
**223,158**
**226,632**|Staff
costs
£
2,365|Office and IT
costs
£
1,076|Total
2021
£
3,441| |---|---|---|---|---|---|---| ||22,032
12,756
1,159
12,756
10,436
54,502|38,023
21,733
2,170
16,422
4,649
26,520|**60,055**
**34,489**
**3,329**
**29,178**
**15,085**
**81,022**|22,479
11,831
2,365
11,831
10,648
56,789|10,210
5,374
1,076
5,374
4,836
25,794|32,689
17,205
3,441
17,205
15,484
82,583| ||113,641|109,517||115,943|52,664|168,607| ||**115,961**|**110,671**||**118,308**|**53,740**|172,048| Costs are apportioned between activities according to time spent by staff on each activity. Staff costs includes costs of employees, agency staff and training. ## **11 RELATED PARTY TRANSACTIONS** The Council is one of two corporate members of Bethphage Great Britain, a registered charity with international Lutheran links, providing high quality residential care and assisted living support to about 60 people in the Midlands of England. The General Secretary is a trustee of Bethphage Great Britain. There were no related party transactions with Bethphage (2021: none). The Trustees received no remuneration (2021: no remuneration) in connection with their duties as trustees. In 2022 five (2021: two) Trustees received reimbursement for their travel expenses to meetings held during the year. These expenses, together with liaison/entertainment expenses and costs of meetings (such as catering), were £4,055 (2021: £1,087). No other payments were made directly to, or for benefit of, Trustees (2021: none). As part of its work to support Lutheran churches, the Trustees made grants during the year to one member church (LCiGB) who had a serving Trustee of the Council amongst its leaders and is detailed below. The relevant Trustee had no part in the decision regarding this grant. |Grants to member churches including a trustee amongst their pastors were:
Lutheran Church in Great Britain
German Church
Norwegian Church
Swedish Church
There are no further related party transactions (2021: none).
**12**
**STAFF COSTS**
Staff costs comprised:
Wages and salaries
Social security costs
Other pension costs
Other staff costs|**2022**
**£**
97,394
-
-
-
**97,394**
**TOTAL**
**2022**
**£**
**191,624**
**17,883**
**19,148**
**1,137**
**229,792**|2021
£
89,708
11,970
12,500
12,000| |---|---|---| |||126,178| |||TOTAL
2021
£
191,973
15,532
14,238
11,042| |||232,785| One employee had a salary higher than £60,000 during the year (2021: one). With the addition of employer's pension contributions, the General Secretary earned £67,980 in total (2021: £63,500). (This comprised salary plus employer's pension contributions before tax.) The key management personnel is considered to be the General Secretary. The average number of persons employed during the year, most of whom were part-time employees, was: |Central, Outreach and Chaplaincy|**FTE**
**2022**
3.7
**3.7**|**Headcount**
**2022**
7.3|FTE
2021
3.9|Headcount
2021
7.8| |---|---|---|---|---| |||**7.3**|3.9|7.8| 26 ## **THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2022** ## **13 TANGIBLE FIXED ASSETS** |**Cost**
At 1 January 2022
Additions
Transfers
At 31 December 2022
**Depreciation**
At 1 January 2022
Charge for the year
At 31 December 2022
**Net book value**
At 31 December 2021
At 31 December 2022|**Freehold**
**property**
**£**|**Leasehold**
**property**
**£**|**Work**
**in progress**
**£**
22,732
-
(22,732)
-
-
-
-
22,732
**-**|**Plant**
**& machinery**
**£**|**Fixtures,**
**fittings and**
**equipment**
**£**|**Total**
**£**| |---|---|---|---|---|---|---| ||1,328,966
34,623
-|-
2,483,932
22,732||-
94,463
-|35,921
61,822
-|**1,387,619**
**2,674,840**
**-**| ||1,363,589|2,506,664||94,463|97,743|**4,062,459**| |||||||| ||267,474
19,710|-
33,333||-
3,149|35,921
3,140|**303,395**
**59,332**| ||287,184|33,333||3,149|39,061|**362,727**| ||1,061,492|-||-|-|**1,084,224**| ||**1,076,405**|**2,473,331**||**91,314**|**58,682**|**3,699,732**| Capital commitments at 31 December 2022 were £5,500 (2021: NIL). This is the retention for the fit-out works at Trident House. The freehold property of four flats at 4 Sandwich Street is classed as a functional fixed asset as the flats were for the use of clergy and staff to fulfil the Council's charitable purpose. The leasehold property is for Trident House which is used for the Council's activities. |**14**
**INVESTMENTS**
**Investment in LCGB Trading Ltd (dormant)**
**Portfolio of Invested Funds**
Market value at 1 January
Additions
Less: disposals
Net movement on cash accounts
Net gains on valuation
Market value at 31 December
Listed investments
Cash on call
Market value at 31 December
**Total value at 31 December**
Details of investments:
_UK Equities_
_Global Equities_
_Bonds_
_Properties_
_Multi Asset Funds_
_Other Assets_
_Cash_
Market value at 31 December
Historical cost
Unrealised gain
Holdings greater than 5%
SUTL Cazenove Charity Responsible Multi Asset|**2022**
**£**
**100**|2021
£
100| |---|---|---| ||**21,359,257**
**2,620,369**
**(2,518,350)**
**(2,883,053)**
**(1,682,859)**|19,580,738
5,191,377
(3,707,623)
(1,676,786)
1,971,551| ||**16,895,364**|21,359,257| ||**16,415,964**
**479,400**|17,545,582
3,813,675| ||**16,895,364**|21,359,257| ||**16,895,464**|21,359,357| ||**841,658**
**3,936,764**
**1,474,106**
**-**
**8,197,356**
**1,444,980**
**1,000,500**|1,111,079
4,540,776
1,504,512
-
9,136,043
1,253,172
3,813,675| ||**16,895,364**|21,359,257| ||15,764,457|18,105,494| ||**1,130,907**
£
8,197,356|3,253,763
%
48.5%| The Lutheran Council holds 100 shares in LCGB Trading limited. The company is dormant, the surplus was £nil (2021: nil), net assets were £100 (2021: £100). 27 ## **THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2022** |**15**
**DEBTORS**
**Due within one year:**
Trade debtors
Other debtors
Prepayments and accrued income
**16**
**CREDITORS**
**Due within one year:**
Taxation and social security
Trade creditors
Grant liabilities
Accruals
**Due after one year:**
Pension accrual
See note 21 for further details of the pension liability|**2022**
**£**
**550**
**1,300**
**5,546**|2021
£
500
557
14,190| |---|---|---| ||**7,396**|15,247| ||**2022**
**£**
**-**
**15,632**
**18,550**
**33,131**|2021
£
275
11,119
22,250
11,313| ||**67,313**|44,957| |||| ||**336**|681| |||| |**17**
**RESTRICTED FUNDS**
Balance 1 January
Transfer
Expenditure
Balance at 31 December|Student
hardship
fund
£
7,627
(7,627)
-|**Total**
**2022**
**£**
**7,627**
**(7,627)**
**-**|Total
2021
£
7,627
-
-| |---|---|---|---| ||-|**-**|7,627| The Student Hardship fund comprises the unspent balance of donations for the support of students suffering hardship. The fund was effectively a designated fund, as the original conditions were set by the Council and not the donors, though it has been accounted as a restricted fund in error. In 2022 the balance of the fund was moved to the unrestricted Student Fund. |**18**
**UNRESTRICTED FUNDS**
**Designated funds**
Fixed assets fund
Student Fund
Donation Fund
Property purchase Fund
**General funds**
**Prior year unrestricted funds**
Designated funds
Fixed assets fund
Student Fund
Donation Fund
Property purchase fund
General funds|**Balance**
**1 January**
**2022**
**£**
1,084,224
2,341
90,000
2,700,000|**Income**
**& investment**
**gains**
**£**
-
-
-
-
-
(1,257,181)
**(1,257,181)**
Income
& investment
gains
£
-
-
-
-
2,377,922
2,377,922|**Expenditure**
**£**
(59,332)
(1,703)
(10,000)
-|**Transfers**
**£**
2,674,840
7,627
-
(2,653,302)|**Balance**
**31 December**
**2022**
**£**
**3,699,732**
**8,265**
**80,000**
**46,698**| |---|---|---|---|---|---| ||3,876,565
18,663,797||(71,035)
(547,487)|29,165
(21,538)|**3,834,695**
**16,837,591**| ||**22,540,362**||**(618,522)**|**7,627**|**20,672,286**| ||Balance
1 January
2021
£
1,080,970
-
-||Expenditure
£
(19,478)
-
-|Transfers
£
22,732
2,341
90,000
2,700,000|Balance
31 December
2021
£
1,084,224
2,341
90,000
2,700,000| ||1,080,970
19,684,388||(19,478)
(583,440)|2,815,073
(2,815,073)|3,876,565
18,663,797| ||20,765,358||(602,918)|-|22,540,362| _Fixed assets fund:_ this fund represents the net amount tied up in tangible fixed assets and so not available to spend. _Student fund:_ is available to support students and student related projects. In 2022 the restricted Student Hardship fund was transferred to this fund as the restriction was removed. See note 17. _Donation fund: After the sale of the ILSC in 2020, this fund was set up i_ n recognition that the ILSC was purchased with donations. The fund will make an annual donation of £10,000 to a charity/charities that aligns with the Council's mission. _Property purchase fund:_ the Council purchased a new property to carry out its activities in 2022, this fund is for the purchase and fitting out of the new premises _._ The remaining balance on the fund is for acoustic panels in the studio and external signage, the fund will be closed in 2023. _General fund:_ this fund represents the net amount held for general expenditure. The policy is to have a minimum fund of £16.7 million in General Funds as this will provide the investment returns to finance the organisations operations. At December 2022 the General Fund was £16.8 million. 28 ## **THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2022** ## **19 ANALYSIS OF NET ASSETS BETWEEN FUNDS** The net assets are held for the various funds as follows: |Tangible fixed assets
Investments
Net current assets
Long term (liabilities)|**Unrestricted**
**funds**
**2022**
**£**
**3,699,732**
**16,895,464**
**77,426**
**(336)**|**Restricted**
**funds**
**2022**
**£**
**-**
**-**
**-**
**-**|**Total**
**funds**
**2022**
**£**
**3,699,732**
**16,895,464**
**77,426**
**(336)**
**20,672,286**|Unrestricted
funds
2021
£
1,084,224
21,359,357
97,462
(681)|Restricted
funds
2021
£
-
-
7,627
-|Total
funds
2021
£
1,084,224
21,359,357
105,089
(681)| |---|---|---|---|---|---|---| ||**20,672,286**|**-**||22,540,362|7,627|22,547,989| ## **20 PENSION COSTS** The assets of the pension schemes, all of which are defined contribution schemes, are held separately from those of the Council in independently administered funds. Contributions made by the Council to the schemes during the year are shown in note 12. Contributions of £NIL were due to the schemes at the year end (2021: £271). ## **21 PENSION SCHEME OBLIGATIONS** Six members of staff of the Council participate in TPT Retirement Solutions' Growth Plan series 4, which is a defined contribution scheme open to all staff and in which the higher earners are automatically enrolled, in accordance with legislation. Two former employees are members of a multi-employer scheme (now closed) which provides benefits to some 638 non-associated participating employers. The scheme is a defined benefit scheme in the UK. It is not possible for the company to obtain sufficient information to enable it to account for the scheme as a defined benefit scheme. Therefore it accounts for the scheme as a defined contribution scheme. The scheme is in deficit and the Council's current liability is £327 (2021: £527 ) and long-term liability is £354 (2021: £681). Due to the reduced scheme liability and deficit payments made in 2022 the amount recognised in the SOFA was a net loss of £274 (2021: net gain £2,442). The scheme is subject to the funding legislation outlined in the Pensions Act 2004 which came into force on 30 December 2005. This, together with documents issued by the Pensions Regulator and Technical Actuarial Standards issued by the Financial Reporting Council, set out the framework for funding defined benefit occupational pension schemes in the UK. The scheme is classified as a 'last-man standing arrangement'. Therefore the company is potentially liable for other participating employers' obligations if those employers are unable to meet their share of the scheme deficit following withdrawal from the scheme. Participating employers are legally required to meet their share of the scheme deficit on an annuity purchase basis on withdrawal from the scheme. A full actuarial valuation for the scheme was carried out at 30 September 2020. This valuation showed assets of £800.3m, liabilities of £831.94m and a deficit of £31.6m. To eliminate this funding shortfall, the Trustee has asked the participating employers to pay additional contributions to the scheme as follows: ## **Deficit Contributions** From 1 April 2022 to 31 January 2025: £3,312,000 per annum (payable monthly) Unless a concession has been agreed with the Trustee the term to 31 January 2025 applies Note that the scheme's previous valuation was carried out with an effective date of 30 September 2017. This valuation showed assets of £794.4m, liabilities of £926.4m and a deficit of £131.5m. To eliminate this funding shortfall, the Trustee asked the participating employers to pay additional contributions to the scheme as follows: ## **Deficit Contributions** From 1 April 2019 to 30 September 2025: £11,243,000 per annum (payable monthly and increasing 3% each year on 1st April) The recovery plan contributions are allocated to each participating employer in line with their estimated share of the Series 1 and Series 2 scheme liabilities. Where the scheme is in deficit and where the company has agreed to a deficit funding arrangement the company recognises a liability for this obligation. The amount recognised is the net present value of the deficit reduction contributions payable under the agreement that relates to the deficit. The present value is calculated using the discount rate detailed in these disclosures. The unwinding of the discount rate is recognised as a finance cost. 29 ## **THE LUTHERAN COUNCIL OF GREAT BRITAIN Company limited by guarantee no. 557552 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2022** ## **21 PENSION SCHEME OBLIGATIONS (continued)** |**ent values of provision**
Present value of provision
**onciliation of opening and closing provisions**
Provision at start of period
Deficit contribution paid
Unwinding of the discount factor (interest expense)
Remeasurements - impact of any change in assumptions
Remeasurements - amendments to the contribution schedule
Provision at end of period
**umptions**
Rate of Discount (per cent per annum)
`|**31 December**
**2022**
**£**
**649**
**31 December**
**2022**
**£**
1,190
(527)
10
(24)
-
**Period ending**|31 December
2021
£
1,190
Period ending
31 December
2021
£
4,749
(1,117)
11
(14)
(2,439)| |---|---|---| ||649|1,190| ||**2022**
**4.96%**|2021
1.18%| **Present values of provision** ## **Reconciliation of opening and closing provisions** ## **Assumptions** The discount rates shown above are the equivalent single discount rates which, when used to discount the future recovery plan contributions due, would give the same results as using a full AA corporate bond yield curve to discount the same recovery plan contributions. The Council has been notified by the Pensions Trust of the estimated Employer Debt on Withdrawal from the Plan based on the financial position of the Plan as at 30 September 2016. They estimated that, after taking into account the debt due from other employers, the Council's Employer Debt on Withdrawal is estimated as £13,295 plus costs and fees of apportioning the debt among other employers. There is no current intention to leave the Plan and trigger this contingent liability. ## **22 OPERATING LEASE COMMITMENTS** |**OPERATING LEASE COMMITMENTS**
At 31 December 2022 the annual commitments under non-cancellable operating leases were as follows:
Land and buildings
Within one year
Within two to five years
Over five years
Land and buildings total|**2022**
**£**
-
-
-|2021
£
14,630
-
-| |---|---|---| ||-|14,630| ||**-**|14,630| 30