BAPTISTS TOGETHER INANCIAL STATEMENTS 2023 BAPTIST UNION CORPORATION LTD YEAR ENDED 31 DECEMBER 2023
BAPTIST UNION CORPORATION LTD INTRODUCTION The Directors of the Baptist Union Corporation Ltd I'The Corporation") present their Annual Report together with the audited financial statements for the year ended 31 December 2023 which comply with the Companies Act 2{6, Charities Act 2011 and Accounting and Reporting by Charities.. Statement of Recommended Practice ISORPI applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS1021. The Annual Report arKI Financial Statements are structured as follows: Section Description What we set outto do Howwe do things Page Reference Page 2 Page 3-5 Page 6 Page 7 Page 8 Page 9-10 Page 11 Page 12-15 Page 16-26 Objectives and Activities Structure. Governance and Management Achievements and Performance What we have done so far Financial Review Who We Are Directorg Responsibilities Auditor5, Report Financial Statements About our finances Directors and key stsff Our Finances in detail
BAPT5ST UNION CORPORATION LTD REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2023 SECTION I- OUR OBJEcfivES AND A1VITIEs Our Objectives The principal object of the Corporation is the advancement of Christian Faith and its Practice, especially by the means of and in accordance with the principles of the Baptist Denomination. Its activity is directed towards helping Baptist thurches in their work, not least through encouraging the effective management of their assets and resources. The Corporation's principal actiwties are to att as custodian/holding trustee of many Baptist Churches, administering the Baptist Union Loan Fund and operating the 8aptist Union Gift Aid Scheme. It also helps churches with guidance on legal, property and charity matters as well as having responsibility for various funds and investments. The charitable Corporation is part of the family of Bapt15t organi5ations setwing the needs of many of the Baptist Churches in Great Britain and work5 especially closely with the Baptist Union of Great Brf(ain. Public 8enePrt Having regard to the guidante published by the Charity Commission IPB21, the Charity Trustees Continued to provide public benefit by seeking to advance the Christian Faith and Prartice in accordance with the principles of the Baptist Denomination. Throughout 2023 the Corporation continued to support the Baptist Union and its member churches, Regional A5$0tiations and Colleges in a wide fange of activities including: Providlng a wlde ranBe of support services, Including legal and general advice and acting as custodian trustees. Making Loans to thurches for new buildings, for extensions andlor refurbishment of churth premises as well as the sale and purchase of church manses. Helping churches generate income with a range of interest-bearinB dep051tS. Supporting the Baptist denomination through the provision of a £20m loan to 5UPPOrt the Familv Solution to reduce the deficit in the Baptist Pension Scheme. Our Strategies to achleve success The Corporation continues to operate within the core areas of its work settinR objectives, measurable goals and assessing achievements year on year against these. Key features of the strategic plan are Delivering high quality legal support to churches SupportinB churches in property transactions Equipping churches and other Bapt55t bodies through offerln8 loans Ind deposits that offer market leading rates of interest. Managlng the Corporation's artivities in line with good practice.
BAPTIST UNION CORPORATION LTD REPORT OF THE DIREOR5 FOR THE YEAR ENDED 31 DECEMBER 2023 SECTION 2- STRUCTURE, GOVERNANCE AND MANAGEMENT Governing Document The Corporation is governed by its Memorandum and Articles of Association dated 14. November 1890, as nd amended by Special Resolutions dated 14, April 1950, 12, March 1963, 22 November 2001, 15, March 2(K)5, 20, March 2006, 3 May 2013, 24, June 2014, and 30, June 2016. Recruitment and Training of Direttors The Corporation is run by a Board of Directors who act as directors of the Corporation, and who met six times in 2023. The Board of Directors consists of: Up to two senior staff chosen by the Baptist Union of Great Britain, and the Treasurerforthe time being of the Baptist Union of Great Britain,. who setve ex-officio. The Moderator of the Corporation; appointed by the members in the Annual General Meeting. Thirteen Association Directors,. one appointed by each of the thirteen Associations designated by the Baptist Union of Great Britain, as set out below. Up to five Directors,. co-opted by the remaining Directors. Prospective Directors are asked to confirm they are not disqualified from Seing as charity trvstees. After appointment they are provided with information about governance and the Corporatlon's principal activities and processes. Updates on current legal issues are regularly provided to the Directors. For the purposes of good governance, the Memorandum and Articles of Association of the Corporation had previously been amended by a Speclal Resolution of the members to provide term limits for the Dirertors. Dirertors may be appointed for a rnaximum of three terms of three years. The Direttors also completed a Skills Survey to identify the specific contribution they could bring to the Board and to enable the Corporation to identify areas where the experience of the Board coukl be strengthened and recruit to the Boar(l accordingly. During 2018, the Directors established a governance subcommittee to review the governance of the Corporation against the recommendations of the Charity Governance Code. The subcommittee produced an initial report to Directors in December 2019. The resultin8 action plan was agreed by the board in 2020 and a number of improvements have been implemented in a number of areas including recruitment of directors, the induction process for new directors and the setting of the agenda for board meetings. Following the refresh of the Charity Governance Code in December 2020 the directors rolled some Stems Into the Strategic Plan framework so they are part of the revlew of governance undertaken for that Plan. Directors, interests No D1ctOr had any beneficial interest in the Corporation or in anycontrad or arrangement of a material nature with the Corporation during the year under review, although two churches12022'. two) of whlch a Director is a member, have loans from the Corporation in the ordinary course of their business. Expenses were paid to 14 Directors12022- 111 amounting to £2,96612022: £1,755). Related Parties The members of the Corporation are the members of the Trustee Board of the Baptist Union of Great Britain. The Home Mission Fund is the principal working fund of that Union. The Home Mission Fund provides staff, offices and ancillary support to the Corporation, as well as substantial capital. Details of these costs and interest paid are set out in note 17 of these financial statements.
BAPTIST UNION CORPORAMON LTD REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2023 SECTION 2-STRUCTURE. GOVERNANCE AND MANAGEMENT Key management personnel remuneration Key management personnel are considered to be: The Board of Directors for the Corporation- as detailed below under the sertion'who we are" Support Services Team Leader and Company Secretary Mr Richard Wilson (until 3 Feb 20231 Support SeTvice5 Teom Leader and Company Secretary Mr Chris lones Ifrom 30 Aug 20231 8aptist Union Corporation Ltd Manager Mrs Caroline Sanderson (until 9 Feb 20241 Commercial and Church Support Manager Mrfim Chowns Baptist Union Corporation Ltd Finance Officer Lord lan Wakeham All staff of the Corporation are employed by the Baptist Union of Great Britain and the arrangementsfor setting the pay and remuneration is the responsibility of the Tnjstee 6oard of the Bapt15t Union. There is a management fee in place whereby the Corporation reimburses staff costs to BUGB in proportion to the work done on behalf of the Corporation and the Union. Risk Man88ement The Corporation maintains a Risk Management Matrix which is reviewed annually by the Directors and key management personnel as a means of identifying the risks, financial and non-financial that might affect the work and reputation of the Corporation. The aim is to establish and operate appropriate and adequate controls. A full review of the Matrix is presented to the Directors annually. and highlights are also given every meeting. The key risks identified in the most recent review were.. Risk Approach to monltorlng and management of the risk A requirement to comply with a new set of Advice has been taken from Leading Counsel on the banking laws or regulations that is of such high regulatory environment faced by the Corporation for its cost as to be a threat to the BUC business financial SeN1$. The Corporation's solicitors actively model. monitor developments in banking regulation and any relevant changes will be reported to the board promptly. Breach of statutory regulations leading to The Corporation's 501icitors artively monitor relevant legal reputational damage andlor external developments and report to the board onnually. enforcement action Failure of governance and control of the The Corporation's solicltors provlde regular Input to the Corpordtion. board to ensure good governance is followed. A long term significant economic decline Lending policy in place with balance of loans tracked and causing a collapse of loan applications with an reviewed. Appropriate level of capital held to absorb increased number of loan defaults borrower defaults.
BAPTIST UNION CORPORATION LTD REPORT OF THE DIREOR5 FOR THE YEAR ENDED 31 DECEMBER 2023 SECTION 2- STRUCTURE, GOVERNANCE AND MANAGEMENT Funds and Property Held as Custodian Trustee on Behalf of Other5 The charity holds financial assets as Custodian Trustee for 17 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 capècity. Type of Assets Held Cash Deposits £'ooo 263 Organisations Income Units National Savlngs Income Bonds UK Equlties Total 442 13 2,165 2.883 17 The Charity also arts as property trustee for 1013 churches and charity orEanisations. Arrangements are made forthe safe custodyof deeds and documents, with each set stored in a labelled packet, and included in an index system. For all financial accounts a separate accoLsnt is kept for each beneficial owner and 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 Trijstee are available at www.ba tist.or CUStodianlist2023. The org3nisations a all Baptist organisations and therefore have objects that are compatible wlth the charitable objects of the Corporation.
BAPTIST UNION CORPORATION LTD REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2023 SECTION 3- ACHIEVEMENTS AND PERFORMANCE The CorporatSon contlnued to offer legal and practlcal Information on trusteeship. property and other Issues, provide churches with access to funding and offer deposit facilities. The Corporation made available £9CM)k12022 £4,283kl in loans to 4 churches12022.. 19 churches), of whith £700k12022.. £3,972kl was to support churth acquisition and development of church property, £200k12022'. £311kl was in connertion with manses. A loan facility of up to £3.8m ha5 been made available to the Pension Trustees as port of Buy-out process, however. this remains undrawn. There were no loans approved for paying off pension deficits12021.' £NILI. All qualifying applications were met as required. The total loans outstsnding decreased from £39.4m120221 to £37.4m. The Corporation assisted many churches to buy, sell, let or alter their property. In 2023 property transactions totalling over £15.9m12022: £9.7ml were completed. The directors were able to make from the Corporation's surplus a donation of £399k12022: £319kl to the Baptist Home Mission Fund and £550k12022'. £550kl to the Baptist Union Pension ReseNe. The Corporation continues to publish leaflets and other information for churches, all of which are available from the Baptist Union of Great Britain website at www.baptist.org.uk. An expanded proBramme of webinars was delivered to support churches with prattical and technical matters. Two members of staff of the Baptist Union hold Practising Certificates from the SollcStors Regulation Authority to undertake reserved activity legal work on behalf of the Corporation. During the year the Corporation undertook trust work on an agency basis on behalf of the East Midland Baptist Trust Company. The Directors continued to oversee the Baptist Union Listed Building Advisory Committee which deals with consent for alterations to Baptlst liste(I buildings under the ecclesiastical exemption scheme.
BAPTIST UNION CORPORATION LTO REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2023 SECTION 4- WHAT WE HAVE DONE SO FAR The Corporation intends to continue to Tespond to the needs of Baptist churches and to offer guidance to them on legislative and other statutory developments affecting churches. The Corporation will continue to maintain and develop its suite of guidance leaflets available to churches and will offer training, including webinars, to support churches on varioijs topics of interest. The Corporation continues to develop its offering of loans and deposits for churches and plans to grow both its portfolio loans and deposits in the cominE year.
BAPTIST UNION CORPORATION LTD REPORT OF THE DIREcfoRS FOR THE YEAR ENDED 31 DECEMBER 2023 SECTION 5- FINANCIAL REVIEW Review of Financial Results Overall deposits (excluding from the Baptist Union of Great Britain) grew during the year from £68.7m to £79.Im, an increase of £10.4m,115.7%1, demonstrating the continued value of the deposit offering to Baptist or8anisations. Due to increases in the Bank of England base rate, total interest paid to Baptist depositors increased from £1,036k to £2,688k, an increase of 159% due to the continued low Bank of England base rates. Excluding the loans to the Retired Baptist Ministerfs Housing Organi5ation IRBMHO, charity no. 11776491, loans decreased from £17.4m to £15.4m. a decrease of £2.Om113.0%l. The balance on the RBMHO loans remained unchanged at £22.Om12022.. £22.Oml. Support Costs increased from £411k to £498k, an increase of 21.2%. Overall, the operating result lincome less expenditure other than gifts to the Baptist Union of Great Britain as disclosed in note 71 was a surplus of £0.95m compared to a surplus of £0.87m In 2022, an Increase of 9.2%. Policy on Reserves One of the principal ways of meeting its charitable objective is for the Corporation to operate the Baptist Union Loan Fund. The Corporation needs to ensure it has sufficient capital available in the form of reserves in order to be In a position to absorb bad debts on loans without damaging its ability to repay depositors. At the end of the year, the total ReseNes remains at £4.39m12022.. £4.39ml as a result of gifting the yearfs profit to the Baptist Union of Great Britain. This compares to an estimate of minimum required reserves of £4.1 Isee analysis below). The current level of reserves is considered by the directors to be appropriate as the Corporation wishes to operate with a level of prudence and have reseNes capacity to support growth in loans Sn 2024 and beyond. Estimate of Minirnurn Requlred Reserves Level Area 6 month< operating expenses Winding up costs Deposit risk Lendin Risk Estimated Reserves Required Actual Reserves Available Basls for reseNes 243 Bosed on budgeted operoting expenditure (exd gifts to BUG8J l(J) Redundoncy costs plus other 1,754 11% of risk-weighted deposits withfincjncial institutions 2,051 11% of risk-wel hted loons 4,148 4,387
BAPTIST UNION CORPORATION LTD REPORT OF THE DIREcfoRS FOR THE YEAR ENDED 31 DECEMBER 2023 SECTION 6- WHO WE ARE The 8aptist Union Corporation Ltd Company Number 00032743 Charity Registration No 249635 Registered and Prlnclpal Offlce Baptist House, 129 Broadway, Didcot, OXII 8RT Directors Moderator and Dlrertor Ms K Martindale luntil 31.8.20231 Dr C Hanning (from 01.09.20231 Ex-officio Mr J Levick (until 31.08.20231 Mr R Wilson luntil 03.02.20231 Mr C Jones Ifrom 01.09.20231 Mr M Pandian (from 01.09.20231 Treasurer Team Leader Support Seice$ Team Leader Support Services TaSurer Appointed by Associations Mr P Walls Mr R English Mr J Ponsford Mr S Powney (until 06.02.20231 Voconcy Ifrom 06.02.20231 The Revd A Che5WOrth Mr T Walker Ifrom 16.05.20231 Rev J Lennox Rev C Lewis Mr J Levick lfrom 01.09.20231 Mr O Obidipe Dr C Hanning (from 01.09.20231 Mr M Southcombe MrA Hawk5WOrth Central Baptist Association West of England BaptlSt Association Southern Counties Baptist A55ociation Eastern Baptist Association Eastern Baptist Association Yorkshire Baptist Associatlon South West Baptist Association Northern Baptist A550ciation South Wales Baptist Association Heart of England Baptist Association London Baptist Association East Midlands Baptist Association South Eastern Baptist Association North West Baptist Association Staff Members Mr T Chowns (from 03.02.20231 Mrs C Sanderson lfrom 03.02.2023 until 29.09.20231 Mr C Jones Ifrom 31.01.20241 Co-opted Mrswelth Mr G Ward Ms K Martindale (from 01.09.20231
BAPTIST UNION CORPORATION LTD REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 DECEMBER 2023 SECTION 6- WHO WE ARE (Cont) Key Management Personnel Secretary Secretary Mr R Wilson Iresigned 3, Feb 20231 Mrs C Sanderson (from 3 Feb 2023. resigned 9, Feb 20241 Mr C Jones (from 31" lan 20241 Mrs C Sanderson (resigned 9, Feb 20241 MrTChowns Lord l D Wakeham (resigned S Apr 20241 Manager Commercial Manager Finance Officer Audltor Moore Kingston Smith LLP, 9 Appold Street, London, EC2A 2AP Bankers HSBC, 6 High Street Abingdon OX14 5AZ Sollcltors Anthony Collins Solicitrjrs LLP. 134 Edmund Street, Birmingham, B2 2EF Surveyo 5avills, Exchange House, Petworth. GU280BF io
BAPTIST UNION CORPORATION LTD DIRECTORS. RESPONSIBILITIES The Directors of the Baptist Uniori Corporation Limited are responsible for preparing the Directors, Report and the financial statements in atcordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The law applicable to charities in England & WaleslNorthern Ireland requires the Direttors as Trustees to prepa financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources of the charity for that period. In preparing these financial statements. the Directors as Trustees are required to: Select suitable acc04Jnting policies and then apply them consistently,. Observe the methods and principles in the Charities SORP 2015 IFRS 1021,. Make judgements and estimates that are reasonable and prudent,. State whether applicable accounting standards have been followed. subject to any material departure5 disclosed and explained in the financial statements,. Prepare the financial Statements on the goinE concern basis unless it is inappropriate to presume that the charity will continue in operation. The Directors as Trustees are responsible for keeping accounting records that disclose wlth reasonable accuracy at anytime the financial position of the charity and enable them to ensure that the financial statements comply with the Companies Act 2CM)6. They 2re also responsible for safeguaidinE the asset5 of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In so far as the Directors as Trustees are aware.. There is no relevant audit information of whith the Corporation's auditor is unaware,. The Directors as Trustees have taken all steps thèt they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that infomiation. half e board Dr C Hanning Moderator li
BAPTIST UNION CORPORATION LTD INDEPENDENT AUDITORS. REPORT TO THE MEMBERS OF THE BAPTIST UNION CORPORATION LTD Oplnlon We have audited the financial statements of The 8aptist Union Corporation I'the Corporation'l for the year ended 31 December 2023 which comprise the Statement of Financial Activities, the Balance Sheet, the statement of Cash Flows and notes to the financial statements, includinB significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accovnting Standards, including FRS 102 Yhe Financial Reporting Standard Applicable in the UK and Republic of Ireland, (United Kingdom Generally Accepted Accounting Prarticel- In our opink)n the financial statements: give a true and fair view of the state of the Corporation's affairs as at 31 December 2023 and of its intoming resources and application of resour5, intILing its income and expenditure, for the year then ended,. have been properly prepared In accordante with United Kingdom Generally Accepted Accounting Practice.. and have been prepared in accordance with the reqU1MentS of the Companies Act 2CIJ6. Basis for opinion We conducted our audit in accordance wtth International Standards on Auditing IUKI IISAS IUKII and applicable law. Our responsibilities under those standards are further described in the Auditorfs Responsibilities for the audit of the financial statements section of our report. We are independent of the Corporation in aceordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRCS Ethical Standard, and we have fulfilleLI our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained Is sufficient and appropriate to provide a basis for our opinion. Concluslons relating to golng concern In auditing the financial statements, we have concluded that the directors, use of the going concern basis of accoLÈnting 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 oi conditions that, individually or collectively, may cast 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 authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are deKribed in the relevant sections of this report. Other Informatlon The other information comprises the infomiation included in the annual report, other than the financial statements and our auditor's report thereon. The dlrectors are sponsIble for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the ertent otherwise explicitly stated in our report, we do nol empress •ny fomi of assurance conclusion thereon. Our responsibility is to read the other information and, In doing $0, consider whether the other informatlon is materially inconsistent with the financlal statements or our knowledge obtained in the course of the audit or otherwise appear5 to be materialty misstated. If we identify such material inconsistencies or apparent materlal mlsstatements, we are requlred to determine whether the is a materlal mlsstatement in the 12
BAPTIST UNION CORPORATION LTD INDEPENDENT AUDITORS. REPORTTO THE MEMBERS OF THE BAPTIST UNION CORPORATION LTD financial statements themselve5. If. based on the work we have performed. we conclude that there is a material mi55t3tement of this other information, we are required to report that fact. We have nothing to report in this regard. Opinrons on other matter5 prescrlbed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit.. the information given in the Directors report for the financial year for which the financial statements are prepared is tonsistent with the financial statements,. and the Directors, report has been prepared in accordance with applicable legal requlrements. Matters on which we are required to report by exceptlon In the light of the knowledge and understanding of the Corporation and its environment obtained in the course of the audit. we have not identified material misstatements Directors, report. We have nothing to report in respect of the following matters where the Companies Art 2006 requires us to report to you if, in our opinion.. dequate acttsunting records have not been kept, or returns adequate for our audlt have not been received from blanches not visited by us; or the financial statements are not in agreement wlth the accounting records and returns- or certain disclosures of direttors, remuneration specified by law are not made,. or we have not received all the information and explanations we require for our audit. Responslbllitles of dlrertors As explained more fully in the directors, responsibilities statement set out on page 11, the dirertors are sponsible 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 dirertors determine is necessary to enable the preparation of financial statements that are free from material misstaternent, whether due to fraud or error. In preparing the financial statements, the dirertors are responsible for assessing the Corporation's ability to continue as a goinE concern, disclosing, as applicable, matters related to going concern an(J using the going concern basis of atcounting unless the directors either intend to liquidate the Corporation or to cease operation5, or have no realistic alternative but to do so. Audltorfs Responslbllltles for the audit of the financlal ststements 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 èrror, and to issue an auditorfs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a Suarantee that an audit conducted in accor(Jance with ISAS IUKI will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if. individually or in aggregate, they could reasonably be expected to inflL5ence the economic decisions of users taken on the basis of these financial statements. As part of an audit in attordar¥ce with ISAS IUKI we exercise professional judgement and malntain professional scepticism throughout the audit. We also.. Identify and assess the risks of material misstatement of the financial ststements. whether due to frau(I or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not deterting a material 13
BAPTIST UNION CORPORATION LTD INDEPENDENT AUDITORS, REPORT TO THE MEMBERS OF THE BAPTIST UNION CORPORATION LTD misstatement resulting from fraud is higher than for one resulting fmm error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. but not for the purposes of expressinE an opinion on the effectiveness of the Corporation's internal control. Evaluate the appropriateness of accounting policie5 used anij the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors, use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conijitions thal may cast signIfcant doubt on the Corporation's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorfs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorfs report. However, future events or conditions may cause the Corporation to cease to continue as a going contern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned stope and timing of the audit and significant audit findings, including any significant deficiencies In intemal control that we identify during our audit. Explanatlon as to what extent the audit was considered capable of detectlng Irregularltles, includin8 fraud Irregularities, including fraud, are instan5 of non-compliance with laws and reEulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respert of irregularities, including fraud. The extent to which our protedures are capable of detecting irregularities, includlng fraud Is detsiled below. The objectives of our aLfdit in respert of fraud, are,. to identify and assess the risks of material misstatement of the financial statements due to fraud,. to obtain sufficient appropriate audit evidence fegarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks,. and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the Corporation. Our approach was as follows: We obtained an vnderstanding of the legal and gulatOry requirements applicable to the Corporation and considered that the most signiflcant are the Companies Act 21]16, the Charitie5 Act 2011, the Charlty SORP, and UK financial reporting standards as issued by the Financial Reporting Countil We obtained an understanding of how the Corporation complies with these requirements by discussions with management and those charged with governance. We assessed the risk of material misstatement of the financlal statements, includinB the risk of m¥terial misstatement due to fraud and how it mlght occur, by holding dlscussions with management and those charged with governance. We inquired of management and those tharged with governance 35 to any known instances of non- compliance or suspected non-compliance with laws and regulations. Based on this understanding, we desi8ned specific appropriate audit procedures to identify instantes of non-compliance with laws and regulations. This inclvded makin8 enquiries of management and those charged with governance and obtaining additional corroborative evidence as required. 14
BAPTIST UNION CORPORATION LTD INDEPENDENT AUDITORS. REPORT TO THE MEMBERS OF THE BAPTIST UNION CORPORATION LTD There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulatlons that are not closely related to events 3nd tranctiOnS reflected in the financial statements. Alx>, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. Use of our report This report 15 made solely to the Corporation'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 miEht state to the company's members those matters we are required to state to them in an auditorfs report and for no other purpose. To the fullest extent permttted by law, we do not accept or assume responsibility to any party other than the Corporation and Corporation's members as a body, for our audit work, for this report, or for the opinions we have formed. Ykne LLF Date 8 May 2024 Andrew Stickland (Senior Statutory Auditor) for and on behalf of Moore Kingston Smith LLP. Statuiory Auditor 9 Appold Street London EC2A 2AP 15
BAPTIST UNION CORPORATION LTD STATEMENT OF FINANCIAL A1VITIEs YEAR IINCLUDING INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 DECEMBER 2023 Notes Unrestricted Endowment 2023 TOTAL 2023 TOTAL 2022 2023 Income Donations and legacles Cliaritable activities Investment income Other income 800 2,870,092 1,263,992 800 2,870.092 1,263,992 32,144 2,014.530 304,175 Totsl Income 4,134,884 4,134.884 2,350,849 Expendlture Raising funds Charitable activities Other expenditure 4,134,884 4,134,884 2,350,849 Total Expenditure 4.134,884 4,134,884 2,350,849 Net movement in funds RECONCILIATION OF FUNDS Total funds brought forward 3,386,677 I,000,(N)o 4,386.677 4,386,677 Tot31 funds Carried forward 3,386,677 i.000,0 4,386,677 4,386,677 The notes on pages 19 to 26 form an integral part of these financial statements 16
BAPTIST UNION CORPORATION LTD BALANCE SHEET AT 31 DECEMBER 2023 Notes 2023 2022 as restated Current assets Debtors Short-term Cash Investments Cash and Bank 12 15 13 45,493,862 26,951,641 11,463,322 83,908,825 44,4LK),499 19,658,418 9.117,378 73,176,29J Current liabilities Creditors.. Amounts falling due within one year 14 79.522,148 68.789,618 Net assets 4,386,677 4,386,677 FUNDS OF THE CHARITY Unrestricted funds Expendable Endowment funds 3,386,677 I,)0,0) 3,386,677 1,000,000 16 Total funds 4,386,677 4,386,677 Inanc statements were approved by the Directors on 26 March 2024 and signed on their behalf by Dr C Hanning Moderator The notes on pages 19 to 26 fom) an integral part of these financial statements 17
BAPTIST UNION CORPORATION LTD STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023 Notes 2023 2022 -as reststed Net Income for the reporting perSod Adjustments for.. Dividends and interest from investments Ilncreaselldecrease in debtors Increase in creditors and provisions 11,263,992) 11,093,363) 10.732,530 1304,1751 13,387,347) 7,919,405 Net cash provlded by operating 3CtlvltÈes 8.375.175 4.227.883 Cash flows from investing actlvities Amounts invested in short term deposits Amounts withdrawn from short term deposits Dividends and interest from investments 113,955,219) 6,661,997 1.263,991 112,297,508) 7,466,738 304,175 Net cash used in investing activities 16,029,231) {4,526,5951 Changes in cash and cash equlvalents in the year 2,345,944 1298,712) Cash and cash equtvalents brought forward 9,117,378 9,416,090 Cash and cash equivalents carrled lorward 11,463,322 9,117,378 The notes on pages 19 to 26form an integral part of these financial statements. 18
BAPTIST UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2023 I. ACCOUNTING POLICIES The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial ststements are as follows.. 131 Basis of Accountlng The financial statements have been prepared in accordance with the Charities Statement of Recommended Pr3Ctice (Charities SORP IFRS 10211. Financial Reporting Standard 102 and the Charities Act 2011, the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 and the Companies Act 2(Kl6. Baptist Union Corporation Limited is a reEistered charity, no. 249635, and meets the definition of a public benefit entity under FRS102. A55ets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy notes. (bl Preparation of the financlal ststements on a 80in8 contern basls The Trustees consider that there are sufficient reserves held at year end to manage anv stagnation or foreseeable downturn in the etonomy in the UK. The Trustees have a reasonable expectation that the Corporation has adequate resources to Continue in operational existence for the foreseeable future. The Corporation has therefore continued to adopt the going concern basis in preparing its financial statements. Ic) Funds Accountlng Unrestrirted Funds: General unrestricted funds represent funds which are expendable at the discretion of the Corporation in the furtherance of the objects of the charity and which have not been designated for other purposes. (dl Income Income is recognised in the Statement of Financial Activities when the Corporation has entitlement to the fijnds, any performance conditions attached to the itemlsl of income have been met, it is pmbable that income will be received and the amount can be measured reliably. Donations a accounted for gross when reteived. Legacies are accounted for at the eorfier of the Estate accounts being finalised and notified, and tash received. Inteiest receivable from loans Is accounted for on an accruals ba515. Expenses reiVed on trusts are included during the period in which they are received. The gift aid scheme is administered as agent on behalf of churches and other Baptist organisations, and the charitvs fee is COgnised on receipt of HMRCS tax bate for remittance to the church. Investment income is accounted for on an attruals basis where the amount can be measured reliably. {e) Expendfture Expenditure is recognised in the Statement of Financial Activbties once there is a legal or constructive obliÈation to make a payment to a third party, it 15 probable that settlement will be required and the amount of the obligation can be measured reliably. Charitsble activities represent expenditure in the furtherance of the object of the corration, and include5 illterest payable on deposits, supportingthe Baptist Home Mission Fund, interest payable to the Baptist Union of Great Britain, management tharges payable to Baptist Union of Great Britain and general support costs 19
BAPTIST UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2023 Support costs repsent governance. central finance and computer facilities, togetherwiih an appropriate allowance for salaries and other office cost5. Irrecoveiable VAT is charged as a cost against the activityforwhich the expenditure was incurred. (h) Debtors Accrued Income is recoEnised in the period to which it rel3te5. Loans are considered concessionary108ns made as they are made by the Corporation to further its purposes. Loans are initially measured at the amount paid, with the carrying amount adjusted Subsequently to reflect repayments and any interest recewable. Where any loan made 15 considered to be irrecoverable an impairnient loss is recognised. Prepayments and other debtors are recognised at the settlement amount due. Debtors are measured at their recoverable amount. Cash at bank and short.term Investments Cash at bank relates to short-term deposits, and is available within 3 months. Notice deposits relate to monies available between 3 and 12 months. Cash at bank and short-term deposit balances have been restated as at 31 December 2022 to more accurately reflect the maturity terms on short-term deposits held at that date. ti) Credttovs Creditors are recognised where the Corporation has a present obligation resulting from a past event that will probably result in the transfer of fund5 to a third party and the amount due to settle the obligation can lje measured or estimated reliably. Accruals and other creditors are recognised at their settlement amount due. Trust acmunts and loan fund deposits are reco8nlsed where held at the amount recelved and the carrying amount is adjusted to reflect any interest payable. Loans are Considered concessionary loans received as they are made to the Corporation to further its purwses and any interest charged is below the prevailing market rates. Ik) Flnanclal Instruments The Corporation 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. (l) Assets held as Custodlan trustee These financlal statements do not include any assets held by the Charity as Custodian Trustee with the exception of assets held on Miscellaneou5 Trust Accounts and Covenant Trust Accounts shown below. 2023 2021 Mlscellaneous Trust Account Assets Covenant Trust Account Assets Miscellaneous Trust Account Creditor5 Covenant Trust Account Creditors Total 2,882,626 266 12,882,626) 12661 1.548,945 375 11,548,945) 13751 20
BAPTIST UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2023 (m) Taxatoon The Corporation is considered to pass the tests set out in Paragraph I Schedule 6 Finance Act 2010 and therefore meet the definition of a Corporation for UK corporation tax purposes. Accordingly. the charity is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Art 1992, to the extent that such income orgains are applied exclusively to charitable purposes. (n) Legal ststus of the Corporation The charity is a company limited by guarantee and has no share capital. The liability of each member in the event of winding-up is limited to £0.25p (o) Judgement and Key Sources of Estlmatlons Uncertainty Estimates and judgements are continually evaluated and are based on historical experience and other factors, incluiling expectations of future events that are believed to be reasonable under the circumstances. There are no key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. 21
BAPTIST UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2023 2. DONATIONS AND LEGACIES Unrestrlcted 2023 Endowment 2023 TOTAL 2023 TOTAL 2022 Donations Legaties 81XJ 800 32,144 800 32,144 3. CHARITABLE AcfiviTIES Unrestrlcted 2023 Endowment 2023 TOTAL 2023 TOTAL 2022 Interest receivable from loans Expenses receivable on trusts Fee for operating gift aid scheme Accommodation fees other Income 2,754,168 107.513 2,286 6,000 125 2.870,092 2,754,168 107,513 2,286 1.919,743 66,114 3,167 125 2.870,092 19,506 2,014,530 4. INVESTMENT INCOME Unrestrfcted 2023 Endowment 2023 TOTAL 2023 TOTAL 2022 Interest on Cash 1,263,992 1,263,992 1,263,992 304,175 304,175 5. OTHER INCOME There was no other income in 2023 or 2022 6. RAISING FUNDS There was no expenditure on raising fijnds in 2023 or 2022. 22
BAPTIST UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2023 7. CHARITABLE AcfiviTIES Unrestrirted 2023 Endowment 2023 TOTAL 2023 TOTAL 2022 Interest paid.. Deposits and trust accounts Bad Debt & Doubtful Debts Giftto Baptist Union Home Mission Baptist Union Pension Reserve Support Costs Inote 81 2,687,885 2,687,885 1,035,8111 34,331 399.136 550,(K)O 497,863 4.134,884 399.136 550,000 497,863 4.134.884 319,174 550,(XK) 411,503 2.350,849 8. SUPPORT COSTS Unrestricted 2023 Endowment 2023 TOTAL 2023 TOTAL 2022 Costs Management tharges Office facilities Computer expenses Other support cost5 Total 309,777 63.750 16,752 27,482 417,761 309,777 63,750 16,752 27.482 417,761 241.218 51,000 16,123 28,096 336.437 Governance Costs Auditors, Remuneration (note 101 Legal & Professional Insurance Total Governance costs 28,890 23,486 27,726 80.102 28,890 23,486 27,726 80,102 23,249 32,679 19,137 75,065 Total Support Cost5 497.863 497.863 411,503 g. OTHER EXPENDrruRE Theie wos no other expenditure in 2023 or 2022 10. INCOME FOR THE YEAR 2023 2022 This is stated after AuditOf5' remuneralion.. Audit work 28,890 23,249 23
BAPTIST UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2023 11. EMPLOYEES AND DIREcfoRS No director as trustee wived any emoluments from the Corporation during the year (2022: £nil). A total of £2,966 {2022'. £1,755) was to 14 DItorS as trustees (2022: 11) in reiMburSent of travellir¥J and b9'stenCe expenses. The are no dlrett employees of the Corp)ration. 12. DEBTORS 2023 2022 Loans: Manses Churches Pensions RBMHO Other Total Loans 4,269,084 10,534,247 263,012 22,022,2(K) 333 367 37,421,910 4,544,175 12,202,277 330,493 21.991,778 328 274 39.396.997 Provision for doubtful debts Prepayments and other debtors Interest due but unpaid Amounts due from closed churches Baptist Union of Great Britain 6,451 593.874 81,193 7,390,434 3.735 180.465 111,104 4,708,197 Total Debtors 45.493,862 4,440,498 In respect of the outstanding loans of £37,421,910 12022.. £39,396.9971. £20.423.586 12022: £478,816) is due to be repaid within 12 months, £90,88812022: £439,4511 is due to be paid between 12 & 24 months, £246,08112022'. £1,146,8471 is due to be repaid between three and five years, and £16,661,35512022- £37.331,8831 is due to be repaid in more than five years. Loans totalling £4.235m12022.. £1.103ml have been èpproved but noi taken up a5 at 31 December 2023. 13. CJSH AND BANK BALANCES 2023 2022 4s restated Short-term dewslts Total 11,463,322 11,463,322 9,117,378 9,117.378 Short-term deposlts are avallable in less than three months. 24
BAPTIST UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2023 14. CREDITORS 2023 2022 Loan fund deposits General Deposits Deposits from Trust Accounts Baptist Union of Great Britain Total Deposits 65,883,631 12,121,873 1,107,372 79,112,876 54,399.308 13,865,400 413,203 68,678,911 Amounts falling due within one year.. Accruals and othef creditors Covenant Trust Account assets Total Creditors 409,LKJ6 266 79,522,148 110,432 375 68,789,618 IS. ANALYSIS OF CASH AND C4SH INVESWENTS l Jan 2023 -as reststed Cash Flow 31 Dec 2023 Notice deposits Cash at bank 19,658,418 9,117,378 28,775.796 7,293,223 2,345,944 9,639.167 26,951,641 11,463,322 38.414,963 Notice deposits are available between 3 and 12 months, short-term deposits are available in le55 than three months. 16. ENDOWMENT ljan 2023 Income Expenditure Galns and (Losses) Transfers 31 Dec 2023 Capital Fund i.000,L 1,000,000 Fljted Assets Investment Current Total Capital Fund 1.000.000 i,000,(x)o The Capital Fund is an expendable endowment fund provided by the Baptist Union of Great Britain to support the on80ing operatior¢ and growth of the Ltsan Fun(J. 25
BAPTIST UNION CORPORATION LTD NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2023 17. RELATED PARTY TRANSAcfioNS The members of the Corporation are the Trustees of Baptist Union of Great Britain Icharity registration number 11813921,. therefore the Baptist Union of Great Britain is a related party to the Corporation and its Ultimate Controlling Party. al During the year ended 31 December 2023, the Corporation: a. Incurred management charges and office and ancillary costs totallinE £390,27912022: £308.3401 from the Baptist Home Mission Fund b. Gifted £550,00012022= £550,(KJOI to the Baptist Union Pension Reserve. c. Allocated the total year's Unrestricted surplus of £339,13612022- £319,174) for the Baptist Union Home Mission Fund bl At 31 December 2023 the Baptist Unlon of Great Britain Corporation owed the Corporation £7,390,43412022: Corporation owed the Baptist Union £4,708,197) in connection with these transactions. cl In December 2018, a long-temi loan was provided to RBMHO, who have a common controlling party in Baptist Union of Great Britain, of £20m and secured on properties held within their property portfollo as a fixed charge. This loan formed part of the assets ond liabilities transferred to RBMHO on 31 December 2018. This loan is interest only so the balance remains at £20m. RBMHO also has a working capital loan with an outstanding balance of £2,022,200 and a deposit account with a balance of £1,137,960 at 31 December 2023. dl During the year, £2,10512022: £1,625) was paid to the Christian Conference Trust, a charity with a trustee in common with the Baptist Union Corporation, for tonferen¢inB facilities provided. 26