BAPTISTS TOGETHER INANCIAL STATEMENTS 2022 BAPTIST UNION CORPORATION LTD YEAR ENDED 31 DECEMBER 2022 BAPTIST UNION CORPORATIOM LTD INTRODUCTION The Directors of the Baptist Unlon Corporath)n Ltd I'Trie Corporatlon") present their Annual Report together wkth the audited financial statements forthe year ènded 31 December 2022 which comply with the CompanSes Act 2006, CharIt￿S Act 2011 and Accounting and Reportlng by Charities.. Statement ol Recommended Practice ISORPI appllcable to charltles preparing thelr accounts in accordance wlth thè Flnancial Reportlng Standard appllcablè Sn thè UK and Rewblic of Ireland IFRS1021. The Annual Report and Flnancial Statement5 are structured as folknys: DeKrlptbon What we set out to do How wè dts thin8S What we have done so far Wh* we plan to do next About our finances Who we are Oblertr¥e5 and ActNitie5 Structure, Governance and Managemènt Achievements and Performance Plans for Future Perlods Financial Review Who WeArè Directors. ResponslbllStSes Audltors, Report Financial Statements Page 2 Page 3-5 Page 6 Page 7 Page 8 Page 8 Page 10 Page 11-14 Page 15-25 (￿r Finances in detail BAPTIST UNION CORPORATION LTD REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2022 SECTION I- OUR OBJECTIVES AND ACTIVITIES Our ObJectl¥Ys The princlpal objert of the Corporation Is the advancement of Christian Falth ènd Its Practice, especially by the means of and in accordance wlth the princlples of the Baptlst Denomination. Its activity Is dlrected towards helping Baptist churrhe5 in thelr Work, not least through encouragi￿ the effective management of theira5sets nd rèSoUr￿s. Thè Corporation's principal actlvities are to act as custodlanlholdlng trustee of many Baptlst Churches. admlnlstering the Baptist Union Loan Fund and operating the Baptist Unlon GSft Aid Scheme. It also helps churches with guidance on legal, property and charlty matters as well as havlng responsibility forvarlous funds and Investments. The charitable Corporatlon is partof the fami￿ of Baptlstorganlsations Se￿ng the needs of many of the Baptlst Churches In Great and works especially closely with thè Baptist Union of Great Britaln. Publk Benefft Havin8 re8ard to the guldance published by the Charty C0￿MiSsion IP821, the Charity Tnjstees contlnued to provide public benefit by seèking to advance the Chrlstian Falth and Practi￿ in accordancè with the principle5 of the Baptist Denomlnation. Throu8hout 2022 thè Corporation continued to support the Baptist Union and tt5 member churches, Reg￿nal Associations and Colleges in a wlde range of actIV￿leS includln8'. Providing a wlde range of support services, includlng legal and general advice. GIftAld servlce and acting as tustodlan trustees. Making Loans to churches for new bulldlngs. for extensions andlor refurblshment of church premises as well a5 the Sale and purchase of church manses. Helplng churches 8enerate income wlth a range of interest-bearing deposits. Supporting the Baptist denomination through the provision of a £20m loan to support the Fami Solution to reduce the deficit in the Baptist Pension Schemè. Our Strategles to a¢hlfft success The Corporation operates in line wbth fts agreed 5-year strate8ic plan for 2017- 2022 whith covers the core areas of its work settirig objective5, measurable goa15 and assessing achievements year on year agalnst these. Key features of the stratwc plan are Dèlivering high quality le8al support to churches Supporting churches In property transactions Equipping churche5 and other 8aptist bodies through offerlng kjans and deposlts that offer market leading rates of interest. Managlng the Corporatlon's activitles In Ilne with good prartice. We revlewed and updated the Strategic Plan during the year, adopting the updated version at our meetlng In October 2022. The Corporation monitors the quality of services dellvered through church satlsfactk)n suNeys to evaluate the qualoty and èffectlveness of the work undertsken. BAPTIST UNION CORPORATIOM LTD REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2022 SECTION 2- sTRU￿URE, GOVERNANCE AND MANAGEMENT 6ty4ernlng D￿lment The Corporatlon Is governed by Its Memorandum and Articles of Assoclation dated 14 November 1890, as amended by Special Resolutlons dated 14 Apdl 1950, 12 March 1963, 22 November 2￿1, IS, March 2￿5, 20" March 2006, 3 May 2013, 24" June 2014, and 30" June 2016. Recrultment arKI Trdlnlng of DtreLtors The Corporation is run by a Board of Dlrectors who act a5 directors of the Corporation, and who met four times in 2021. The Board of Dlrectois consist5 of.. Up to two sensor staff chosen by the Bapt15t Union of Great Britaln, and the Treasurer forthe time bein8 of the Baptist Union of Great Britain,. who serNe èx-offldo. The Moderator of the Corporatlon,. appolnted by the members In the Annual General Meeting. Thirteen Association Directors,. one appointed by each of the thirteen Assoclations designated by the Baptist Unlon of Great Brltsln. as set out bèlow. Up to fi've Directors.. COqOPted by the remainin8 Director Prospective Directors are asked to conflrm they are not disqualified from serving as charity trustee5. After appolntment th￿ are provided wbth Informatlon at*)ut governance and the Corporatk)n's principal attivities and PToces5es. Updates on current legAI Issues are regularly provlded to the Directors. For thf* purposes of good governance. the Memorandum and Artlcles of Association of the Corwration had previously been amènded by a 5pedal Resolution of the membèrs to provlde tèrm limits for the Directors. Dlrector5 may be appointed for a maximum of three terms of three year5. The Dirèctors also completed a Skllls Survey to identify the spe¢lfl¢ contrlbutlon they could bring to the Board and to enable the Corporation to identify areas where the èxperlence of the Board could be strengthened and ecruit to the Board accordlngty- During 2018. the Directors established a governance subcommittee to re¥￿W the govemance of the Corporation against the recommendatlons of the Charlty Govemance Code. The subcommittee produced an initial report to Direttors in Decembèr 2019. The resulting action plan was agreed by the board in 2020 and a number of Improvements have been Implemented in a numberof areas including recrufitment of directors, the inductlon pro￿$5 for new directors and the settlng of the agenda for boar(i meetlngs. Followlng the refresh of the Charlty Governance Code in December 2020 the directOf5 rolled 50me r(ems into the Strategic Plan framework so they are part of the revSew of governance undertaken for that Plan. Dlre¢tors' Interests No Director had any benefKial interest in the CorporatloTr or in anycontract orarrangementof a materlal nature with the Corporatlon durlng the year under revlew. although two churthes12021.. twol of which a Director is a member, have loans from the Corporatlon in the ordinary course of thelr buslness. Expenses were paid to 11 Direttors12021= 51 amountlng to £1,75S12021: £2,342). Relatsd Partles The members of the Corporatlon are the members of the Trustee Board of the Baptist Union of Great Brltain. The Home Mi55ion Fund 15 the principal working fund of that Union. The Home Mission Fund provSdes staff, offices and anclllary support to the Corporation, a5 well as substantial capital. Details of thesè costs and interest paid are set out in note 17 of these flnandal ststements. BAPTIST UNION CORPORATION LTD REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2022 SECTION 2- STRucfuRE, GOVERNANCE AND MANAGEMENT Key mana8ement personnel remuneratlon Key management personnel are considered to be.. Thè Board of Directors for the CorTM)ratlon- as detailed below under the settlon ￿h0 we are" Support SeNlces Team Leader and Company Secretary Mr Richard Wilson luntil 3 Feb 20231 Baptist Union Corporation Ltd Manager Mrs Carollne Sanderson Commercial and Church Support Mana8er Mr Tim Chowns 8apt15t Un￿n Corporation Ltd Finance Officer Lord lan Wakeham All staff of the Corporation are employed bythe Baptlst Union of Great BrTrtaln and the arrangementsfor settlng the pay and remuneration bs the responslblllty of the Trustee Board of the BaptSst Union.There 15 a managemènt fee In place whereby the Corporation relmburses staff costs to 8UG8 in prop)rtion to the work done on behair of the Corporation and the Union. Rlsk Manaloment The Corporatton maintaln5 a Risk Management Matrix which is re¥￿ved annually by the Directors and key management personnel as a means of Identifying the risk5, firancial and non-financial that might affect the workand ￿PU￿tIon of the Corporatlon. The alm istoe5tablSsh and operate appropriate and adequate controls. A full revlew of the Matrlx Is presented to the Directors annually, and highlights are also given every meeting. The key rfsks Identlfied Sn the m05t recent revlew were.. Approach to monltorlng and mana8emènt of the rlsk A requirement to wmply with a new set of Ad¥￿e has been taken from Leading Counsel on the banking laws or re8ulatknns that is of such hi8h regulatory environment faced by the Corporation for its cost as to be a threat to the BUC business financlal Servi￿5. The Corporation's solicitors actively modèl. monitor developmènts In banking regulation and report to the board annually. Breach of statutory regulations leading to The Corporation's solicitors a¢tively monitor relevant legal reputational damage andlor ertemal developments and report to thè board annually. enforcement action Risk Failure of governance and control of the The Corporatlon's sollcltors provide regular Input to the Corporation. board to ensure good governance is followed. A long term significant economic decline Lendin8 policy in platè with balance of loans tracked and causing a collapse af loan applicatlons wlth an reviewed. Appropriate level of capital held to absorb Increased number of loan default5 borrower defaults. BAPTIST UNION CORPORATION LTD REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2022 SEcfioN 2- STRucfuRE, GOVERNANCE AND MANAGEMENT Funds and Property Held as Custodian Trustee on Behalf of Others The charity holds financial assets as Custodian Trustee for 22 Baptist organisations which have objects that are compatible with the charitable objects of the Corporation. The Corporation acts solely as an Agent and carries no decision-making capacity. Type of Assets Held Cash Deposits £'ooo 262 Organisations | Income Units National Saving5 Income Bonds UK Equitie5 Total 468 13 2,112 2,855 20 The Charity also acts as property trvstee for 1032 churches and charity organisations. Arrangements are made for the safe custody of deeds and documents, with each set stored in a labelled packet, and included in an index system. For all financial accounts a separate account is kept for each beneficial owner and a spreadsheet is maintained of the beneficial owner of each account. The names of the churches and other charities for whom the Corporation acts as a Custodian Trustee are available at www.ba tist.or custodianlist2022. The organisations are all Baptist organisations and therefore have objects that are compatible with the charitable objects of the Corporation. BAPTIST UNION CORPORATION LTD REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2022 SECTION 3- ACHIEVEMENTS AND PERFORMANCE The Corporatlon continued to offer le8al an(i practScal Information on trusteeship. property and other Issues, provlde churthes with access to fundin8 and offer deposit facilities. The Corporation made avallable £4.283k12021 £5,751kl In loans to 19 chur£he512021.. 16 churches), of whlth E3,972k12021'. £4,203kl was to support church acquisltlon and development of church property, E311k12021.. £1,103kl was in connection wlth manses. There were no bans approved for paying off pension deficits and 12021: £14kl for paying off pension deficlts. All qualifying applications were met as requlred. The totsl loans outstanding decrÈased from £41.7m120211 to E40.2m. The Gift Aid Scheme continued to act on behalf of the churches and £82k12021 £61kl In tax was reclalmed for churches. The scheme is being wound up and wlll be closed In 2023. The Corporation asslsted many churches to buy, sell, let or alter their property. In 2022 property transacth)ns totalling over £9.7m12021.. £13.ISml were completed. The directors were able to make from the Corporation's surplus a donation of £319k12021.' £198kl to the Baptist Home Mission Fund and E550k12021.' £550kl to the Baptist Unlon Pellsion ReseThe. The Corporation continue5 to publlsh leaflets and other Information for churches, all of which are available from the BaptlSt Union of Great Britain websote at Mvw.baptist.or8.uk. An expanded pro8ramme of webinars was delbvered to support churches with practical and technical matters. Two meM￿r$ of staff of the Baptlst Union hold Practislng Certificates from the Sollcitors Regulation Authority to undertake reserved activity legal work on behalf of the Corporation. Durin8 the year the Corporation undertooktrust Work on an agency basi5 on bèhalf of the East Mldland Baptlst Trust Companv. The Directors continued to oversee the Baptist Union Llsted Bulldlng Advlsory Commlttee which deals wlth consent for alteratlons to Baptlst listed bulldings under the ecclesiastical exemption scheme. BAPTIST UNION CORPORATION LTD REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2022 SECTION 4- WHAT WE HAVE DONE SO FAR The Corporatlon Intènds to contbnue to respond to the needs of Baptlst churches and to offerguidance to them on leglslatlve and other statutory developments affèctlng churches. The Corporation will continue to malntain and develop its sulte of 8uidance leaflets available to churches and will offer tralnlng, Includlvg webinar5, to support churches on various toplcs of Interèst. The Corporatlon continues to develop its offeringof loans and deposits for churches and plans to grow both Its portfollo loans and deposits In the coming year. 202.2 was a challengin8 yearforthe Corporaticjn as churches continued to recoverfrom the CoronaviTUS impact of the past few years then the rapld increase in cost of living and Bank of England base rates towards thè Ènd of the year. This has put strain and pressure on church flnance BAPTIST UNION CORPORATION LTO REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2022 SEcfioN 5- FINANCIALREVIEW Revlew of Flnandal Results Overall deposits (excludin8 from the Baptist Union of Great Britain) grew during the year from £54.9m to £67.7m, an Increase of £12.8m.123%1, demonstratlng the continued value of the deposit offering to Baptist organlsatlons. Due to the increase in the Bank of England base rate, total interest paid to Bapt15t depositors increased from £290k ta £1,036k, an increase of 357% due to the continued low Bank of England base rates. Excluding the loans to the Retired Baptist Ministerfs Hausing Organisation IRBMHO, charlty no. 11776491, loan5 decreased from £19.7m to E18.Sm, a decrease of £1.2m16.0%1. The balance on the RBMHO loans remained unchanged at £22.Om12021.' £22.Oml. Support Costs Increased slightly from £375k to £411k, an increase of 9.6%. Overall, the operating result (income less expenditure other than gifts to the Baptist Union of Great Britain as dlsclosed in note 71 was a surplus of £0.9m compared to a surplus of £0.8m in 2021, an Increase of £O.Im. Pollcyon Reserb One of the principal ways of meeting its charitable objective Is for the Coiporatlon to operate the 8aptist Union Loan Fund. The Corporatlon needs to ensure it has sufficient capital available In the forni of re￿rVèI order to be in a position to absorb bad debts on loans wlthout damaging rts ability to repay depositors. Due to the loan provlsion being made in 2020, additional capital was neèded to maintain the necessary capltal requlrements set by the Board. At thè Ènd of September 2021, Elm was Injected by the Bapts'st Unlon of Great Britain to provide capital to support the ongoing operat40n and growth of the Loan Fund. This has been treattd ai an Expendable Endowment WTthin the BUC accounts. At thè end of theyear, the total RèseThes remained at £4.39Fn12021.. £4.39ml. This compa￿5 to an estimate of minlmum required reserves of £3.9m (see anatysis below). The current level of reseNes Is con5Idered by the directors to be appropriate a5 the Corporatlon wishes to operate with a lèvel of prudence and have reserves capacity to SUPPOrt growth in loans in 2023 and beyond. EstIm￿e of Mlnlmum Reqwired Re5erye5 LLwel Are• 6 month5, operatlng expenses Windlng up costs Deposlt rbsk Lending Risk Estimated Reserves Required Actual Reserves Available Bas15 for reserves 255 Based on budgeted operutin9 expendlture (excl gift5 to BUGB) 100 Redundanry costs plu5 Qther 1.256 11% of rlsk-weighted dewsits withfiftortclal institutions 2,288 Il% of rlsk-welghted loans 3,899 4.387 BAPTIST UNI(hY CORPORATION LTD REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2022 SECTION 6- WHO WE ARE The Baptbt Unlon Cwporatkn Ltd Company Number 00032743 Charlty Re8lstratlon No 249635 Registered and Prlntipal Office Baptist Fknuse. 129 Broadway, Dldcot, Oxll 8RT Directors Moderator and Dlrector Ms K Martindale Ex-officio Mr J Levi¢k Treasurer Mr R Wilson Ireslgned 3 Fèb 20231 Team Leader Support Services Mrs C Sanderson (appointed 3 Feb 20231 Legal & Ops Manager Mr T Chowns lappolnted 3 Feb 20231 Commercial & Support Manager Appolnted by Assoclatlons Mr P Wa115 Mr R English Mr J Ponsford Mr S Pownev The Revd A Che5WOrth Vacancy Rev D LÈnnox Rev C Lewis Vocancy Mr O Obldlpe Dr C Hanning Mr M Southcombe Mr A Hawksworth Central Baptlst Associatlon West of England Baptist Assoclation Southern Countles Baptist Associatio Eastem Baptist A5sociatlon Yorkshire Baptlst AssocSatlon South West Baptbst Assoclation Northem Baptlst AssocSation South Wales Baptist Association Heart of England Baptlst Assoclation London Baptist Assoclatb)n East Mldlands Baptlst Assoclatlon South Eastern Baptist Association North West Baptlst Assoclatlon Co-opted Mr Swelch Mr G Ward Key Management Personnel Secretary Manager Flnance Offlcer Mr R Wilson Iresigned 3, Feb 20231 Mrs C Sanderso Lord l D Wakeham Auditor oore Kingston Smith LLP, 9 Appold Street, London. EC2A 2AP Bankers HSSC, 186 Broadway, Didcot, OXII 8RP Solkltors Anthony ColliDS Solicltors LLP, 134 Edmund Street, 8irmlngham. 82 2EF Savllls, Exchan8e House, Petworth. GU28 08F BApnsT iINION CORPORATION LTD DIRE￿oR5, RESPONSIBILITIES The Directors of the Baptfist Unbjn Corporation Limited are responsSble for preparing the Directors, Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards Iunlted Klngdom Generally Accepted A¢￿U￿tIng Practice). The law applicable to charitiès In England & WaleslNorthern Ireland requlres the Dlrectors as Trustees to prepare financial statements for each financial year which give a true and fair vlew of the state of affalrs of the charity and of the Incoming resources and application of resoLJrces of thÈ charity for that perfod. In preparing these flnancial statements. the Dlre¢tors as Trustees are requlred to.. Select suitable accounting policies and thén app￿ them conslstentlv,. Observe the mèthods and principles in the Charities SORP 2015 IFRS 1021,. Make judgements artd estimates that are reasonable and prudent,. State whether appllcable accountlng standards have been followed, Subject to any material departures diKlosed and explained In the flnancial statements; Prepare the financial statements on the golng concem basis unless it Is Inappropriate to presume that the Charity will continue in operation. The Directors asTrustees are res￿nsible forkeeping accountlng recordsthatdisclose with reasonable accuracv at any time the financial position of the charity and Ènable them lo ensure that the flnanclal statements cornply wlth the Charitie5 Act 2011. They are also responslble for safeguarding thè assets of the charity and hence for takin8 reasonable Steps for the prevention and detection of fraud and other irregularltles. In so far as Directors as Trustees are aware.. There is no relevant audit Information of which the Corporation's auditor 15 unaware,. The Directors as Trustee5 have taken all steps that they ought to have taken to make themselves aware of any relevant audit infomiation and to e5tabllsh th* the audltor is awa￿ of that Infom)atKsn. On bEhalfofthe board M5 Karen Martindale Director io 8APTIST UNION CORPORATION LTD INDEPENDENT AUDITORS, REPORTTO THE MEMBERS OF THE BAPTIST UNION CORPORATION LTD Opinion We have audited the financial Statements of The Baptist Union Corporatlon I'the Corporation'l for the year ended 31 December 2022 which comprise the Statement of Financial Activities, the Balance Sheet, the Statement of Cash Flow5 and notes to the financial statements, including significant accDuntin8 policies. The financial rew)rtin8 framework that has been applied in their preparation 15 applicable law and United KSngdom Accounting Standard5, including FRS 102 Yhe Financial Reportlng Standard Applicable in the UK and Republic of Ireland, Iunited Kingdom Generally Accepted Accounting Practice). In our oplnlon the financial statements: glve a true and fair view of the state of the Corporation's affairs as at 31 December 2022 and of its incoming resources and application of resource5, including its income and èxpendSture, for the yearthen ended,. have been properly prepared in accordance with United Kingdom Generalty Accepted Accountlng practi￿,. and have been prepared in accordance with the requlrement5 of the Companies Act 2006. Basls for oplnlon We conducted our audit in accordance wlth International Standards nn Auditing IUKI IISAS IUKII and applicable law. Oui re5pon5ibilitie5 under those standards are further descrlbed In thè Audltorfs Re5ponsibilitie5 for the audit of the flnanclal statemènts sectbon of tsur report. We are independent of the Corporation In accordance wth the ethlcal requirements that are relevant to our audit of the financial statewnents in the UK, including the FRC'S Ethical Standard. and we have fulfilled our other ethical responsibilities in accord3nce with these ￿quIrements. We belleve that the audlt evldence we have obtained Is sufficlent and approprlate to provide a basis for our opinion. Conclusions relatin8 to 8oln8 concern In auditing the financial statements. we have wncluded that tbe director< use of the going concèm basis of accountlng in the preparatb)n of thè financial statements is appropriate. Based on the work we have performed, we have not identified any materlal uncertainties relating to events or conditiors that, Individual￿ or collectively, may £a5t significant doubt on the Corporation's ability to continue as a going concem for a period of at least twelve months from when the financial statements are authori5ed for issue. Our responsibilities and the responsibilities of the directors with rÈspÈct to 80ing concern are described in the relevant sections of this rèport. Other information The other information comprises the informatlon Included in the annual report, other than the financial statements and ou¥ auditor's report thèreon. The directors are responsible for the other informatlor contained within the annual rep)rt. Our opinion on the financial Statements does not cover the other nformation and, èxcept to the exfent otherwise explicitly stated in our repoo we do not express any form of assurance conclusKJn thereon. Our responsibility is to lead the other information and, in doing so. consider whether the other Information is materially incons15tent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially mi5ststed. If we identify such material incansistencies or apparent material mls5tatements. we Bre required to determine whether there Is a material m15Statement in the li BAPTIST UNION CORPORATION LTD INDEPENDENT AUDrroRS' REPORT TO THE MEMBERS OF THE BAPTIST UNION CORPORATION LTD financial statements themselves. If, based on the work we have performed, we concludè that there is a materlal mlsstatement of this other infoTmatlon, we are required to report that fact. We have nothing to report in this regard. Opinlons on other matters prescrlbed by the Companles Art 2th16 In aur oplnion, based on the work undertaken in the course of the audit.. the information gNen In the Direttors report for the financlal year for which the fSnancial statements are prepared is consistent with the financial statement5,' and the Dirertors. report ha5 been prepared in accordance with applicable legal requlrements. Matter5 on whlch we are required to roport by exception In the li8ht of the knowledge and understandiny of the Corporation and its environment obtained in the course of the audit, we have not identifled materlal misstatements Dlrectors, report. We have nothing to report in respect of the followinE matters where the Companies Act 2006 requires us to report to you If, in our opinion.. adequate accounting records have n¢t been kept, or retums adequate for our audit have not been received from branches llot visited by us,. or the financial statement5 are not in agreement with the accountlng records and returns; or certain disclosures of dirertors, remuneration specifled by law are not made,. or we have not received all thè Infonnation and explanations we requlre for our audr(. Responsibilities ol dlrectors As explained more fully in the dirèttors, reswnsibilities statement set out on page 9. the directors are responsible for the preparation of the finoncial statements and for being satisfied that they give a true and fair view. and for such internal control as the directors determinels necèssary to enable the preparatlon of financlal statements that are free from material misststement, whether due to fraud or error. In preparin8 the financial statements. the directors are responslble for assessin8 the Corporatlon's ability to continue as a 8oing concèrn, disclosing, as applicable, matters related to going concern and uslng the golng concern basis of accountln8 unless the dSrectors either intend to liquidate the Corporation or to cease operations, or have no realistic alternative but to do so. Auditorfs Responslbllltles for the audft of the tlnan¢lal statements Our objectives are to obtain reasonable assurance about whether the financlal statements as a wholè are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that Includes our opinlon. Reasonable assurano Ss a high level of assurance, but is not a 8uarantee that an audit conducted in accordance wlth ISAS IUKI wlll alway5 detect a material misstatement when it exists. Mlsstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic deci5ion5 of usèrs taken on the ba515 of these finaNcial ststements. As part of an audlt in accordance with ISAS IUKI we exercise professional judgement and malntain professlonal 5cepticlsm throughout the audit. We a150'. Identlfy and assess the risks of material mi55tatement of the financial statements, vthether due to fraud or error, design and perform audit procedures responsive to those rlsks. and obtain audlt evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detedlng a material 12 8APTIST UNION CORPORATION LTD INDEPENDENT AUDITORS, REPORT TO THE MEMBERS OF THE BAPTIST UNION CORPORATION LTD misstatement rèsulting from fraud is hwher than for one resulting from error, as fraud may invo￿@ collusion, forgery, Intentlonal omlssions, mlsrepresentatlons, or the overrlde of internal control. Obtain an understardin8 of internal control relevant to the audit in ordèr to design audit procedures that are appropriate in the cirCumstan￿s, but not for the purposes of expressin8 an opinlon on the effectNeness of the Corporation's internal control. Evaluate the appropriatèness of accountin8 policies used and the reasonableness of accountlng estlmates and related di5cIosures rnade by the direttors. Conclude on the appropriateness of the dlrectors, use of the going concern basis of accounting and. based on the audit evidence obtained, whether a material uncertainty exists related to events or condittons that may cast slgnlNcant doubt on the Corporation's ability to continue as a going concem. If we conclude that a material uncertainty exists, we are required to draw attention in our audltor'5 report to the related disclosures in the financial statements or, if such disclosure5 are inadequate. to modify our opinion. Our conclusions are b35ed the audit evidence obtained up to the date of our audltorfs fepurt. HoweveT, future event5 or conditions may cause the Corporation to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclll5ures, and whether the financial statements represent thè underlyin8 transactions and evenls in a mannor that achleves falr presentstlon. We communicate with those Charged wlth 8overnance regardin& among other matters, thè planned sco and timing of the audit and significant audit findings* Indudlng any slgniflcant deflclèncles In Internal control that we Identlfy during our audlt. Explanation as to what extent the audit was considered capable of detecting irregularities. includlng fraud Irre8ularitie5, Sncluding fraud, are instances of non-compliance wbth laws and regulation5. We design procedures in line with our responsibilitles. Qutllned above, to detect material misstatements in respect of irregularities, includin8 fraud. The extent to which our procedures are capable of detecting irreBularitie5, including fraud is detailed below. The objectives of our audit in respect of fraud. are,. to Identfy and assess the risks of material misstatement of the financial 5tatement5 due to fraud.. to obtain suffiuent appropiiatÈ audit èvidèncè rè8ardin8 the assessed risks of material misstatement due to fraud, through de5ignin8 and implementin8 appropriate responses to those as5e55ed risk5,' and to respond approprfiate￿ to Insiances of fraud or suspected fraud identified dU￿ng the audit. However, the primary responsibility for the preventlon and detection of fraud rests with both management and those charged with governallce of the Corporation. Our approach was as follows.. We obtained an understaThJing of the le8al and regulatory requirements applicable to the Corporation and considered that the most 518nificant are the Companle5 Act 2006. the Charities Act 2011. the Charfty SORP, and UK financial reporting standards as i￿ued by the Financial Reporting Council We obtained an understandbng of how the Corporation complies with these requirements by discussions with rnanagement and those charged with govemance. We assessed the rlsk of material misstatement of the financial statements, Sndudlng the risk of material mi5Statement due to fraud and how it might occur. by holding discussions with management and those charged with governance. We inquired of management and those charged with Bovernance as to any known instances of non- compliance or suspected non-complian￿ wlth laws and regulations. Based on this understsndin& we designed specific appropriate audlt procéduresto identfy instances of non-compliance with laws and regulations. This included makin8 enquiries of rnanagement and those charged with governance and obtaining addltional corroboratlve evldence as required. 13 BAPTIST UNION CORPORATION LTD INDEPENDEf+JT AUDITORS, REPORT TO THE MEMBERS OF THE BAPTIST UNION CORPORATION LTD There are Inherent limitations in the audlt procedures described abovè. We are less likely to become aware of Instance5 of non-cornpliance wlth laws and regulatiOll5 that are not closely related to events and transaction5 reflected In the financial statements. Also. the risk of not detetting a material misstatement due to fraud Is hlgher than the risk of not detècting one resulting from error, as fraud may involve dellberate concealment by, for example, forgery or intentional mlsrepresentation5, or throu8h collusion. Use of our report Thls report Is made solely to the Corporation's members, a5 a body, in accordance with Chapter 3 of Part 16 of the Companles Act 2006. Our audit work has been undertaken so that we might state to thè company's mèmbers those matter5 we are required to state to them in an audltor's report and for no other purpose. To the fullest extent perTnitted by law, we do not accèpt or assume responsibility to any party other than the Corporation and Corpoiats'on's members as a body, for our auditworK for this report, or for the opinions we have formed. Date 4 April 2023 Andrew Stickland (Senior Statutory Auditor) for and on behalf of Moore Kingston Smith LLP, Statutory Auditor 9 Appold Street London EC2A 2AP 14 BAPTIST UNION CORPORATION LTO STATEMENT OF FINANCIAL AcfiviTIES YEAR {INCLUDING INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 DECEMBER 2022 Note$ Unrestrlcted 2022 Endowment 2022 TOTAL 2022 TOTAL 2021 Income Donatlons and leg3cie5 Charltable activits.es Investment income Other income 32,144 2,014,530 304,175 32,144 2,014,530 304,175 1,000,000 1,406,198 58,382 Total Income 2.350.849 2.350.849 2.464.S80 Expenditure Raising funds Charitable activities Other expendlture 2,350.849 2,350,849 1,464,580 Total Expendlture 2,350.849 2,350,849 IA64.580 Net movement in funds i.LXJO.000 RECONCIUATION OF FUNDS Totsl fund5 brought forward 3.386.677 I,ooo,( 4,386ffi77 3,386,677 Total funds Carried foThvard 3.386.677 I,(￿,{ 4.386.677 4,386,677 The notes on pages 17 to 24 form an Integral part of these flnanclal statements 15 BAPTIST UNION CORPORATION LTD BALANCE SHEEf AT 31 DECEMBER 2022 Notes 2022 2021 Current assets Debtors Cash and Bank 12 13 44,400,498 28.775,797 73,176,295 41,013,152 24.243,738 65,256,890 Current liabilities Creditors.. Amounts falling due within one year 14 68,789,618 60,870,213 Net assets 4.386.677 4.386.677 FUNDS OF THE CHARITY Unrestrlcted funds Expendable Endowment funds 3,386.677 1,000.000 3,386,677 I,C#JO,000 16 Total fund5 4,386,677 4,386,677 The financl31 statements were appfoved bythe Dlrettors on 28, March 2023 and signed on thelr behalf by GfJ¢b(> en Martindale Direttor Caroline Sanderson Company Secretary The notes on pages 17 to 24 form an 5ntegral part of these flnanclal statements 16 BAPTIST UNION CORPORATION LTD STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2022 Notes 2022 2021 Net income forthe reporting period I,0￿,000 Adjustments for: Dividends and interest from investments Ilncreaselldecrease In debtors Increase In credltor5 and provosions 1304.1751 13,387.3461 7,919,405 158,3821 391.995 4,757545 Net cash pro¥lded by operatin8 activlties 4,227.883 6,091,158 Cash flows from investln8 activities Dlvldènds and Interest from Investments 3¢X,175 58.382 Net cash used In Investlng actlvltles 304.175 58,382 ChanBes In cash and cash equlvalents In theyear 4,sa2,059 6,149,540 Cash and Cash equlvalents brought forward 24,243,738 18,094,198 Cash and cash equl¥alents cairled forward 28,775,796 24.243.738 The noteson pages 17to 24form an integral part of these flnanclal Statements. 17 BAPTIST UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022 I. ACCOUNTING pouaES The prfnclpal accounting policles adopted, judgements and key sources of estlmatlon un￿rtaInty in the preparation of the financial st3tèmènts are as follow5: {al Basls of Accountln8 The financial statements have been prepared in accordance with the Charities Statement of Recommended Practice (Charities SORP IFRS 10211, Financial Reporting Standard IOZ and the CharitSes Act 2011, the Financial Reportin8 Standard applicable in the UK and Republic of Ireland IFRS 1021 and the Companies Act 2C(6. Baptist Union Corporation LimltÈd is a registered charity, no. 249635, and meets the definition of 3 public benefit entity under FR5102. Assets and liabilities are initially recognised at historical C05t or transaction value unle$5 Otherwise stated in the relevant 2ccountlng policy notes. Ibl Preparatlon of the finanrial statÈments on a going concern basis The Trustees consider that there are sufficient reserves held at year end to manage any stagnatlon or foreseeable downtum In the economy in the UK. The Trustees have a reasonablè expectation that the Corp)ratlon has adequate resources to contlnue in operational existence for the foreseeable future. The Corporation has therefore continued to adopt the golng concern basls In preparing its financial statements. {cl Funds Accounting Unrestricted Funds- General unrestricted funds represent funds whl¢h are expendable at thè discretion of the Corporatlon In the furtherance of the objects of the charity and which havè not been designated for other purpo￿%. Id) Income Income Is re¢ognlsed In the Statement of Financlal Actlvitles when the Corporation has entitlement to the funds. any performance conditions attached to the itemlsl of income have been met, it is probable that income will be re￿IVed and the amount can be measured reliably. Danatlons areaccounted for grosswhen received. Legacies are accountèd for at the earlier of the Estate accounts ￿Ing flnallsÈd and notrfied, and cash recelved. Interest receivable from loans is accounted for on an accruals basis. Expense5 received on trusts are included durin8 the period in which they are re￿Ived. The 8ift aid scheme is administered as agent on behalf of churches and other Baptbst organisations, and t1￿ charltls fee Is reco8nised on receipt of HMRC5 tax rebate for rÈmittance to the church. Investment income is accountèd for on an accruals basls where the amount can be measured rellabty. lel Expenditure Expenditure Is recognised In the Statement of Flnancial Activities once there is a leg31 or censtructive obligation to make a payment to a third party, it Is probable that settlement will be required and the amount of the obligation can be measured reliably. Charitable activities represent expenditure In the furtherancè of the object of the Corporation, and indudes interest payablè on dep)sits, supportingthe BaptlSt Home Mission Fund, interest payable to the Baptist Union of Grèat Britain. management charges payable to Baptist Union of Great Britain and general support costs 18 BAPTIST UNIChY CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022 Support Costs represent governance, central flnance and computer facilftles, togetherwith an appropriate allowance for salaries and other office costs. Irrecoverable VAT is charged as a cost a8ainst the actfvity farwhich the expenditure was incurred. (hl Oebtors Accrued Income is recogni5ed in the period to which it relates. Loan5 aTe considered concesslonary loans made as they are made by the Coipofatlon to further its purposès. Loans are Initially measured atthe amount paid. with the carrying amount adjusted subsequently to reflect repayments and any interest receNable. Where any loan made is considered to be irrecoverable an impairment loss is recognised. Prepayments and other debtors are recognised at the Sett￿ment amount due. Debtors arè mèasured at their recoverable amount. Durlng 2022, the Corporation made a payment to the parent compan¥, Baptist Union of Great Brltain, of £3m for it to create an ESCROW account belng requested by the pension Company while thè buyout of the DB pension scheme is completed. A furthèr £lm was also transferred in order for the Baptist Union to make a bank term deposit with an Institution it already had buslness dealing5 Wlth. Cash at bank and in hand Cash at bank and In hand Includes notlce dewslts and short-term deposits. u) Creditors Creditors are reco8ni5ed where the Corporation has a present obligation rèsulting from a past event that will probably resu￿ in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliab￿. Accruals and other creditor5 are reco8ni5ed at their settlement amount due. Trust accounts and loan fund deposits are recognised where held at the amount rÈceived and the carrying amount is adjusted to reflect any interest payable. Loans are considered concesslonary loans received as they are made to the Corporatlon to further its purposes and any Irterest charged is below the prevailing market rates. Ik) Flnanclal Instruments The Corporation onty has flnanclal 355et5 and liabilitbes of a kind that qualify as basic financial Instruments. 8asi¢ financS31 instruments are initially recognised at transactlon value and subsequently measured at their Settlement value. Assèts held as custodian trustee These financial statements do not Indude any assets held by the Charlty as Custodian Trustee with the ex¢eptlon of assets held on Miscellaneous Trust Accounts and CovenantTrust Accounts shown below. %)22 2021 Miscellaneous Trust Account Assets Covenant Trust Account Assets Miscellaneous Trust Account Creditors Covenant Trust Account Creditors Total 1,548,945 1,496 11,$48,9451 11,4961 1,769,686 323 11,769,686) 13231 19 BAPTI￿ UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022 (m) Tjxation The Corporation Is consldered to pass the tests set ovf In Paragraph I Schedule 6 Finance Art 2010 and therefore meet the defi'nition of a Corporation for UK fLJrporation tax purposes. Accordingly, the charitv 15 Potentially exempt from taxation In respect of income or capltal galns recelve(I wirhln categorles covered by Chapter 3 Part11 Corporation Tax Act 2010 or Section 256 of thèTaxation of Chargeable Gains Art 1992, to the extent that such income or 8ains are applied exclusively to charltable purposes. (n) L￿31 status of th• corp￿ The charity is a company limited by guarantee and has no Share capltsl. The liabllity of each member in the event of winding-up is limited to £0.2Sp (o) Judgernnt and K•y Source% ol estlnotlons Un￿rt Estimates and ludgements are continually evaluated and are based on historical expèriencè and other fattors, including expectations of future events that are believed to be reasonable under the circumstsn¢es. Theie are no key assumptlons concernlng the future and other key sources of estlmation uncertainty at the reportin8 datè that have a signrficant risk of causing a material adjustment to the carryln8 amounts of assets and liabilltlès withln the next financial year. 20 BAPTIST UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022 2. DONATIONS AND LEGACIES Unrestricted 2021 Endowment 2022 TOTAL 2022 TOTAL 2021 Donatlons Le8acles 32,144 32,144 I,(M)O,OIK) 31144 32,144 i.000.Th)o 3. CTrL4RrrABLE AcnvtriES UnrEstricted Z022 Endowment 2022 TOTAL 2022 TOTAL 2021 Interest receivable from loans Expenses receivable on trusts Fee for operating gift aid scheme Accommodation fees Other Income 1,919,743 66,114 3,167 6,000 19,S06 2.014.530 1,919,743 66,114 3,167 1.304,597 89,¢JJ4 2,107 19,506 2.014.530 4,490 1.406.198 4. INVE5TMEpifiNCOME Unrestrlcted 2022 Endowment 2022 TOTAL 2022 TOTAL lrterest on Cash 304.175 904.175 304,175 304,175 58,382 58,382 5. OTHER INCOME There was no other income in 2022 or 2021 6. PAISING FUNDS There was no other expenditu￿ In 2022 or 2021 21 8APTisf UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022 7. CHARITABLE AcfivmES Unre5trf¢ted Endowment 2022 TOTAL 2022 2021 Interest paid.. Deposits and trust account5 Bad Debt & Doubtful Debts Glft to Baptlst Union Home Mission Baptlst Union Pension Reserve Support Costs Inote 81 1,035,841 34,331 1,035,841 34,331 290,446 50,715 319,174 sso.oc 411,503 2,350,849 319,174 550,iY)O 411,503 2.350,849 198,452 550,0 374,546 1,464,580 8. SUPPORT cosrs Unrestrlrted 2022 Endowment 2022 TOTAL 2022 TOTAL 2021 Costs Mana8ement charges Office facilities Computer expenses Other support costs Toial 241,218 51,000 16,123 28,096 336,437 241.218 51,000 16,123 28,096 336,437 219,597 51,CQO 13,585 17,024 300.785 Governance Costs Auditor< Remuneration (note 101 Legal & Professional Trustee Insurancè Total Governance cost5 23,249 32,679 19,137 75,(*5 23,249 32,679 19.137 75,065 29,362 34.487 9.911 73,760 Total Support Costs 411,502 411.502 374,545 9. OThER EXPENDtllJRE There was no other expenditure in 2022 or 2021 10. INCOME FOR ThE YEA9 •• 2022 2021 This is stated after Auditor5, remuneratlon- Audit work 23,249 29362 22 BAPTIST UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022 11. EMPLOYEES AND DIREcf0115 No director as trustee ￿￿"￿ed any ern0lum￿ts from the Cfjip¢yaticr during the year (2021.. £nil). A total of £1,75512021'. £2,342) was pald to 11 Dlrectors as trust￿[2021. 15) In reIt￿ur￿￿t of travelling and ￿￿sister￿e exFense5 as Directors. There are no dtrect empbyees ofthe Cowatron. 12. DE8TORS 2022 2021 Loans: Manses Churches Pensions RBMHO Other Total Loans 4,544,175 12,202.277 330.493 21,991.778 328 274 39396.997 4,589,163 12,731,999 393,957 21,976,969 1985 870 41.677.958 Provision for doubrful debts Prepayments and other debtors Interest due but unpaid Amounts due from closed churches Baptist Union of Great Brltain I8￿,000) 11.645 31,265 92,284 3,735 180,46S 111,104 4,708,197 Total Debtors 44.400.498 41.013.152 In respect of the outstandillg loans of £39,396,99712021'. £41.667.9581, £478,81612021.. £1,￿1,563) Is due to be repald withfin 12 month5, £439,45112021: £2,519,698) is dLbe to be paid between 12 & 24 months, £1,146,84712021.' £3,547,182) is due to be repaid between three and five years, and £37,331,88312021.. £33,709,515) is due to be repald In more than five years. Loans totalllng £1,102,671 12021.. £2,253,288) have been appmved but not taken up as at 31 Decèmber 2022. 13. CASH AND 8ANK BALIJ4 2022 2021 Notlce Deposits Short-term deposlts Total 10.424.346 18,351.451 28,775,797 10,173,688 14,070,050 Z4,243,738 Notice deposits are available in les5 than three months: short-term deposits are avallable in more than three months but less than 12 months, 23 BAPTIST UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022 14. CREDtroKs 2022 zo21 Loan fund deposlts General Deposlts Deposlts from Trust Accounts Bapt15t Union of Great Britain Total Dep051ts Amoullts falllnR due within one year.. Accruals and other creditors Covenant Trust Account asset5 TDtal Creditors 47,651,314 13.108,956 883 60.761.153 41,617,297 13.272.652 1.103,251 55.993.200 108,738 322 60A70,213 118,924 544 56.112.668 15. ANALYSIS OF CASH AND CASH EI2UIVALErirs l Jan 2021 Cash Flow 31 DK 2022 Notice deposits short-term dep051ts 10,173.688 14,070,050 24,243,738 9,120,905 14,588,847 4.532.058 19.2S4,593 9,481,203 28,775,796 16. ENDOWMEpir ljan 2022 IntomÈ Expenditure Gains and IL055e51 Transfer5 31 Dec Z02Z Loan Capital Fund I,i)Jo,oco I,￿j.000 Flxed Assets Investsnenl Current Assèts Total Loan Capltal Fund I,000,(KJO i.￿0.000 The Loan Capltal Fund Is an expendable endowment fund providÈd by the 8aptist Union of Great Brftain to support the ongoing operation and gr0￿h of the Loan Fund. 17. REIATED PAfftTRAtr1&4CTIONS The members of the Corporation arè the Trustees of Baptist UnSon of Great Britain Icharlty registration number 11813921; therefore the Baptist Union of Great Br￿aIn is a related party to the Corporation and Its Ultimate Controllin8 Party. al During the year ended 31 December 2022, the Corwratlon: Incurred management charges and office and andllary costs totalllng E284,182 IZOZI.. £284,182) from the Baptist Home MSsslon Fund b. Glfted £550,OC(112021'. £550,ttsJi to the 8aptist Union Pension ReseNe. 24 BAPTIST UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022 c. Allocated thè total yearf5 Unre5tTlcted surplus of £319,17412021'. £198,452) for the Baptist Union Home Mission Fund bl At 31 December 2022 the Baptist Union of Great Britaln Corporation owed the Corporation £4,708,197 12021- Corporation owed the Baptist Union £8831 In connection with these transactions. cl In December2018, a long-term loan was provided to R8MHO, who have a common controlling party In Baptist Union of Great Britain, of £20m and secured on properties held within their property portfolio as a flxe