for the year ended 31 December2017 (Registered Charity

Presbyterian Church of Wales

(Registered Charity Number 7732022)

Annual report for the year ended 31 December2017


Annual Report for the Year Ended 31 December 2017

Contents

Page

Trustees, officers and advisers 3

Annual Report of the trustees 5

Statement of Trustees’ Responsibilities 13

Independent Auditors’ report 14

Consolidated Statement of Financial Activities 16

Consolidated and Parent Charity Balance Sheets 17

Consolidated Cash Flow Statement 18

Notes to the financial statements 19

2

Presbyterian Church of WalesTrustees, Officers and Advisers

Legal status of the Presbyterian Church of Wales

The Presbyterian Church of Wales (‘the Church’) is a charity registered with the Charity Commission(charity number 1132022) and is governed by its constitution. The Church was registered with the CharityCommission on 7 October 2009 having previously been an excepted charity.

Trustees

The trustees are elected at the Annual General Meeting held at the General Assembly each year beforecompleting induction activities. The trustees, who served during the year to 31 December 2017, and up tothe date of approval of the financial statements, are as follows:

Mr Brian LopezMr ldris 0 Hughes

Rev J Robert BebbProf John Gwynfor JonesRev Brian H JonesRev Dafydd Andrew JonesRev Wyn Rhys MorrisMr Cliff Williams

Mr Hywyn PritchardRev Robert 0 Roberts

Rev J Paul MorganRev Marcus RobinsonMr Dewi Lewis-Jones

Principal Officers

Rev Meirion MorrisRev Ifan RobertsRev Gwyn Rhydderch

Rev Nan Powell-DaviesMr Andrew BrittonMr Neil PoultonMrs Shanta RupaliaMrs Ff ion WilliamsMrs Sian EdwardsMr Owain EdwardsMiss Mair JonesMiss Carys MoselyRev Dr Watcyn JamesRev W Bryn WilliamsMrs Delyth Oswy Shaw

Principal Address

Treasurer of the Association in the EastTreasurer of the Association in the North — retired 1 January 2018Chair of the Resources Department and Properties Board - appointed23 November 2017Chair of the Ministries DepartmentModerator of General Assembly — retired 4 July 2017Moderator of General Assembly - appointed 4 July 2017Clerk of the Association in the South — retired 4 July 2017Clerk of the Association in the South — appointed 4 July 2017Treasurer of the Association in the South and Chair of TrusteesTreasurer of the General Assembly - retired 1 January 2018Treasurer of the General Assembly — appointed 1 January 2018Chair of the Resources Department and Properties Board — retired 23November 2017Clerk of the Association in the EastClerk of the Association in the NorthTreasurer of the Association in the North — appointed 1 January 2018

General SecretaryChief Administrator - appointed 1 January 2018Director and Children’s Work Co-ordinator - resigned 1 February 2018Head of Projects and Communication - appointed 1 February 2018Assistant Director of MinistriesHead of FinanceHead of PropertyHead of HR and Legal SupportHead of Strategic SupportManager — Coleg y Bala (joint)Manager — Coleg y Bala (joint)Manager — Coleg Trefeca

Church and Society Liaison OfficerEditor of ‘Y Goleuad’ and Publications Officer -resigned 31.8.2017Academic Director - appointed 1 July 2017Training Co-ordinator

Presbyterian Church of WalesTabernacle Chapel81 Merthyr RoadWhitchurchCardiffCF14 1DD

3

Presbyterian Church of WalesTrustees, Officers and Advisers

Bankers V Independent Auditors

Barclays Bank plc PricewaterhouseCoopers LLP

85 High Street V One Kingsway

Blackwood Cardiff

NP21ZA CF1O3PWV

Investment Managers Actuaries and Pension Administrator

Investec Bank plc Barnett Waddingham LLP

2 Gresham Street St James’s House

London St James’s Square

EC2V 7QN CheltenhamGlos GL5O 3PR

Investment Managers (Cash Deposit) Health and Safety Advisors

Barclays Private Bank CDM Consultant Limited

1 Churchill Place 12 Moriah Mews

Canary Wharf Risca

London NewportE145HP NP11 6RL

Employment Advisors Connexional Solicitors

Keelys LLP ADVE Solicitors

28 Dam Street 33 Hih Street

Lichfield Lam peter

Staffordshire Ceredigion

WS136AA SA487BB

4

Presbyterian Church of WalesAnnual Report of the Trustees

The trustees are pleased to present their annual report together with the audited consolidated financialstatements of the Presbyterian Church of Wales (“the Church”) for the year ended 31 December 2017.The financial statements have been prepared on a going concern basis in compliance with the applicableaccounting standards in the United Kingdom including the Statement of Recommended Practice (SORP):Accounting and Reporting by charities in preparing their accounts in accordance with the FinancialReporting Standard (FRS) applicable in the UK and Republic of Ireland (FAS 102).

Charitable Status

The Church was registered as a charity with the Charity Commission for England and Wales on 7 October2009. Prior to registration the Presbyterian Church of Wales was an excepted charity. This registrationcovers the central body of the Presbyterian Church of Wales only and does not cover local churches,Presbyteries or the Association in the three provinces. Discussions are on-going with the CharityCommission in relation to the constitution and whether or not one central registration could cover thewhole Church in the future.

Church objectives

The purpose of the Church is to worship God and spread the Gospel of the Lord Jesus Christ as it isrevealed in the Holy Scriptures and expounded in our Doctrinal standards, by establishing and maintainingfellowships of people worshipping God and believing in the Lord Jesus Christ. We seek to achieve thispurpose by:

• preaching the Gospel, administering the sacraments, pastoral care of local churches, holdingmeetings for fellowship and prayer;

• religious biblical education and training in the Faith;

• missionary work and evangelising at home and abroad, setting people aside for this work;

• providing and publishing literature;

• setting an example of Christian life and good works;

• serving our communities and our country through practical activity;

• taking a stand for justice and peace in the world;

• safeguarding our environment in every possible way.

In order to meet its objectives the General Assembly, together with the trustees, and its constituent courtsreview annually the developments, activities, achievements and performance of the Church.

In planning and reviewing its activities the Church has considered the Charity Commission’s guidance onpublic benefit and in particular the specific guidance on charities for the advancement of religion.

Organisational structure

The ultimate decision making body of the Presbyterian Church of Wales is the General Assembly whichmeets annually. The General Assembly is representative of the whole Church with representatives beingnominated by the Board and Departments of General Assembly and also the Association in the threeProvinces and the 14 Presbyteries.

The day to day running of the Presbyterian Church of Wales and the implementation of the decisions ofGeneral Assembly is carried out by the General Assembly Board and its Executive/Trustee Group withspecific issues dealt with by seven departments. Each department presents a report annually to theGeneral Assembly through the General Assembly Board.

It is only the transactions and the assets and liabilities controlled by the Board and the Departments whichare included in these financial statements. The charity registration covers these funds only. Inter-fundgrants, debtors and creditors are eliminated on consolidation.

5


All transactions and assets/liabilities administered by local churches, presbyteries and the Association in

the three provinces are excluded from these accounts.

The Properties Board is the custodian trustee of the Presbyterian Church of Wales. The Board administers

funds on behalf of local churches, presbyteries, the Association and other funds affiliated to the

Presbyterian Church of Wales. All such funds are used in accordance with the objects of the Presbyterian

Church of Wales.

The funds are held separately from other assets of the Presbyterian Church of Wales. The ‘Properties

Board has a separate bank account and the majority of funds are held in cash deposits of no more than

three years duration which are managed by Barclays Private Bank (see note 19).

At a local level, the Presbyterian Church of Wales is comprised of the Association in the three provinces

(the North and South Association being mainly Welsh speaking with the Association in the East being the

English speaking section of the Church). Each Association is divided into presbyteries of which there are

14 in total. Each individual local church is a member of a presbytery; the sizes of the current presbyteries

vary from 26 churches up to 71 churches. There were 587 churches at 31st December 2017 (2016: 603

churches).

Related parties

The Church undertakes some of its work at its centres at Bala and Trefeca. These centres have been

established as separate charities although they both report to the Resources Department and Properties

Board. The Candidates and Training department has also been established as a separate charity and

reports to the Ministries Department.

The transactions of these three charities are fully consolidated into the financial statements. The principal

contact addresses and main activities of each charity are:

Coleg y Bala, Ffordd Frydan, Y Bala, Gwynedd, LL23 7RY

• Coleg y Bala continues to be the Church’s training centre for children and young people and continues

to employ gap year students as part of its programme.

Coleg Trefeca, Treteca, Brecon, Powys, LD3 OPP

• Coleg Trefeca continues to be the Lay Training Centre for the Church and the work is guided by the

Candidates and Training Department.

Candidates and Training Department, Tabernacle Chapel, Merthyr Road, Cardiff, CF14 1DD

• The object of the charity is to provide training for ministry for the Presbyterian Church of Wales.

In addition, the Church is the ultimate controlling party of the Welsh Calvinistic Methodist Assurance Trust.

The principal activity of the company was that of an insurance company. However, the company ceased

to trade in 2006 and is currently dormant.

Copies of the accounts of all the above entities can be obtained from the General Secretary of the

Presbyterian Church of Wales at the principal address shown on page 3. A summary of the results and

financial position of the three charities is set out below:

6


Income

Coleg Y Bala

Year Ended31 December2077

£‘OOO

Coleg Trefeca

Year ended31 December2077

£‘OOO

Candidates andTraining

DepartmentYear ended

31 December 2017£‘OOO

From Presbyterian Church of Wales

Charitable Activities (Inc course fees)

Investment income and interest

Other

Expenditure

Salaries and wages

Other

(Deficit) / Surplus

Tangible Fixed Assets

Heritage Assets

Investments

Fixed Assets

Net Current Assets

Unrestricted Funds

Restricted Funds

Total Funds

101

62

2

50 148

54

1 13

Summary of developments, activities, achievements and performance

The developments, activities and achievements of the Church are reviewed in the reports of its Board anddepartments published in the General Assembly proceedings.

The main items during the year were:

• the Church and Society Department continues to focus on social affairs in Wales and overseasincluding international issues, education matters, environmental and social issues and specificmatters including refugees and asylum, poverty, and Welsh Constitutional issues; the Church isrepresented on the interdenominational Cytun Working Party on Wales and Europe;

• the annual review of the Strategy Plans for ministry and mission of the 14 Presbyteries;

• changes to the parameters of the Properties Board Deposit to obtain a better return for the churches,Presbyteries and other funds deposited with the Properties Board;

• the development of national and local projects including the Mission Programme, CAMU, Dorcas,Sou led Out and the Gap Year at Coleg y Bala;

22 9 -

187 114 161

51 43 36

149 121 98

200 164 134

(13) (50) 27

Coleg Y Bala Coleg Trefeca Candidates andTraining

Department31 December 2017 31 December 2017 37 December 2017

£‘OOO £‘OOO £‘OOO

145 268 -

- 198 -

368

145 466 368

101 104 295

246 570 663

246 372 663- 198 -

246 570 663

7


• the adoption of a new Ministry and Mission Contribution, with effect from 1 January 2018, to replace

the Connexional Contribution as the basis for calculating the annual levy due from the churches;

• the hosting by Coleg Treteca of a number of families affected by the Grenfell fire tragedy;

• an administrative review resulting in a change to the job description of the General Secretary and

the appointment of a part time Chief Administrator to the Central Office;

• the appointment of a part time Academic Director;

• the celebrations to mark the three hundredth anniversary of the birth of William Williams, Pantycelyn

including those at Coleg Trefeca in July 2017;

• the work of the interdenominational protection panel, safeguarding training for ministers and workers

and the appointment of a voluntary Protection Co-ordinator; and

• the publication of the latest volume of the history of the Church 1814-1914.

Financial review

Incoming resources

The Church’s income decreased from £4.27 million in 2016 to £3.96 million in 2017, primarily as a result

of a decrease within other income - Income from sale of property decreased from £749,000 in 2016 to

£521,000 in 2017. In addition there was a fall in Connexional Contribution income from £2,482,000 in

2016 to £2,379,000 in 2017.

The primary source of income continues to be the Connexional Contribution which is used to finance our

Ministers, Mission and Field workers and administrative staff throughout the Church. The continuing

financial viability of the Church is dependent upon the contributions of membership as assessed annually

and reflected in the Connexional Contribution.

A summary of the main categories of income is shown below:£‘OOO %

Connexional Contributions 2,379 60.1

Donations, legacies and grants 433 10.9

Investment income and interest 431 10.9

Income from Colleges and Centres 117 3.0

Other 598 15.1

Total 3,958 700

Expenditure

The main item of expenditure continues to be ministerial benefits which comprises the stipend, employer

pension contributions and employers national insurance of all ministers. In addition the salary, employer

pension contributions and employers national insurance of contracted employees promoting the interests

of the Church through the Ministries Department are included as ministerial benefits.

8


A summary of the main categories of expenditure and their percentage of the total is as follows:

£‘OOO %Ministerial benefits 3,472 72.1Ecumenical contributions 828 17.2Colleges and centres Costs 482 10.0Other 32 0.7Total 4,814 100

Results

The net outgoing resources, before movements in investments, has increased from a deficit of £407k in2016 to a deficit of £856k in 2017.

The movement can be principally attributed to the decrease in income as noted above together with anincrease in expenditure from £4,681k in 2016 to £4,814k in 2017.

The net movement in funds in 2017 after investment gains and losses and actuarial gains and losses onthe pension scheme was a surplus of £336k (2016: surplus of £704k).

Connexional contribution

A detailed review of overdue debts is regularly undertaken by the Association in each of the threeprovinces. During the year, there has been an increase of £26k in the total debt with the total gross debtorat 31 December 2017 being £31 6k.

A bad debt provision of £1 27k has been made against overdue Connexional contributions. The provisionhas increased from £84k in 2016 and represents a specific provision against 13 overdue amounts.

Capital expenditure

During the year, capital expenditure of £lOk (2016: 11k) was incurred, of which £8k was in respect ofcomputer and telephone equipment at the central office.

Heritage Assets

In accordance with the provisions of FRS 102 (para 34.50 -34.56), the value of the Howell Harris Museumtogether with artefacts transferred from the National Library of Wales, Aberystwyth in 2014, located atColeg Trefeca and included in the accounts of Coleg Trefeca has been included as a fixed asset in thegroup balance sheet at a value of £1 98k (2016: £202k). The valuation used an insurance value and thetrustees consider this a cost effective valuation method for this type of asset. There are further details inNote 1 — Statement of accounting policies and Note 11 — Heritage assets to the financial statements.

Investment policy and performance

The Church has an agreed customised benchmark for measuring performance with the investmentmanagers. The benchmark is based on mid points of asset allocation parameters and was changed atthe 2016 General Assembly with cash being removed from the benchmark. The new parameters andbenchmark are noted together with the previous in brackets:

Asset Allocation BenchmarkParameters

UK Equities 75% - 85% (70% - 80%) 80% (75%)Fixed Interest 15% - 25% f 15% - 25%) 20% (20%)Cash 0% - 5% (0% - 10%) 0% (5%)

During the year to 31 December 2017, the performance of our fund was +9.7% with the benchmark of+10.8%. Both the equity element and the fixed interest element of the portfolio underperformed againstthe benchmark.

9


The Church has adopted the provisions of the Trustee Act 2000 subject to our ethical policy.

Investment performance is monitored by a sub committee appointed by the Executive/Trustee Committee

and the Resources Department and Properties Board by means of quarterly reports and at least one

meeting per year with the investment manager.

Investment properties

The Church holds seven properties for investment purposes all of which were valued in 2017. Five

properties were valued by Prys Jones & Booth (Chartered Surveyors), Abergele and two by Seel & Co

(Chartered Surveyors), Cardiff. In the intervening years market values are adjusted using a recognised

index. All properties will be valued again in 2020.

Six properties are residential; the seventh property was acquired in 2012 at a market value of £180,000,

as per a chartered surveyors report. The property is a commercial property, located next to the central

office in Whitchurch, Cardiff and was previously managed by the trustees of Tabernacle Chapel,

Whitchurch, Cardiff.

Resources expended

The Church does not undertake any fund raising activities and, consequently, there are no costs of

generating funds to disclose.

Charitable Expenditure can be broadly divided into three activities:

i) Ministers Benefits are costs of service (including stipend, employers national insurance and pension

costs) for ministers in pastorates together with those ministers serving the Church in other posts.

This amount also includes the costs of those employees serving the Church through the Ministries

Department.

ii) Ecumenical Contributions are amounts paid to partner organisations throughout Wales and

worldwide to promote the objects of the Church through Mission and Ministry. The contributions are

analysed between internal Church amounts, those relating to Wales/United Kingdom and those tointernational churches and church bodies. These sums include annual affiliations to UK and

International inter-church organisations.

iii) Colleges and centres costs relate to all amounts incurred by Coleg y Bala and Coleg Trefeca in their

work as the centre for training children and young people and lay training centre respectively.

Support costs are allocated based upon an estimate of the proportion of staff time that has been spent on

each charitable activity. The appropriateness of this split is reviewed annually as part of the preparation

of the financial statements; and the current percentage allocation is 55% ministerial benefits, 35%

ecumenical contributions and 10% colleges and centres costs.

Risk management

The Church has developed a risk strategy to identify, assess and monitor the risks that the Church may

be exposed to. A comprehensive risk register is reviewed annually by the General Assembly Board and

the trustees.

The trustees, in conjunction with the Board, have developed a rolling plan to mitigate the major risks to

which the organisation is exposed. Major risks are those which may have significant impact on:

• the effective governance of the Church;

• the ability to finance all current activities;

• legislative compliance including Health and Safety, Employment Law and the protection of children

and vulnerable adults.

• the reputation of the Church; and10


• operational performance given the continued decline in ministers and members.

The Board and trustees prioritise the risks according to the likelihood of occurrence and potential impactand has set up a sub-group to undertake this task and they report to the trustees annually.

The trustees have linked the setting and monitoring of objectives to this risk management exercise bydefining risks as those occurrences which prevent the Presbyterian Church of Wales from achieving itsobjectives.

Reserves policy

The Church’s policy is to maintain the amount of total reserves at the equivalent of 2 years’ worth ofexpenditure. Current levels of annual expenditure require reserves to be maintained at £1 Omillion. At thislevel, the trustees believe that they would be able to continue the current activities of the Church in theevent of a drop in income. At 31 December 2017 total reserves were £18.7million (2016: £18.4million)and the trustees have agreed a financial forecast to reduce reserves to £l2million over a five to ten yearperiod (excluding any Pension reserve). Further consideration is to be given to ensuring sufficientreserves are held in cash and whether a specific sum should be set aside to fund any future deficit in theChurch’s defined benefit pension scheme. It is therefore deemed that sufficient and appropriate resourcesare held to enable each fund to be applied in accordance with any restrictions.

Total unrestricted funds had a surplus (including investment gains or losses) of £1 00k for the year to 31December 2017 compared to a surplus of £484k for the year to 31st December 2016.

The value in the pension reserve has been calculated in accordance with the provisions of FRS1O2.

Investment review

Market review

Investments markets again performed much better than expected in 2017 with the fund and thebenchmark showing positive returns in each of the four quarters. The largest gain was in the final quarterwith the fund returning +4.1% against a benchmark return of 4.4% and the FTSE rising to over 7,600 bythe end of the year. Equities outperformed fixed interest in each quarter.

The extraordinary quantitative measures employed by central banks in response to the financial crisishave depressed bond yields to unprecedented lows but it is a widely held belief that this surplus liquidityhas been a major driving force behind the ongoing gains in global stock markets during 2017.

Despite domestic political uncertainty surrounding Brexit and the strength of the Government sterling hadchanged little on a trade weighted basis and strengthened against the US dollar. The domestic uncertaintytogether with beneficial exchange rates saw UK companies and sectors with overseas earnings performwell. Sectors such as mining, general industries and support services rose by 26%, 14% and 13% overthe year respectively whilst general retailers rose by just 2% and there were negative returns fromconstruction and building and utilities of -2% and -16% respectively.

Over the final quarter UK Government bond prices rose marginally from a low point reached at the end ofSeptember. The portfolio remains underweight in fixed interest with 15.3% of the portfolio in Fixed Interestagainst a benchmark of 20%; Equities represented 81.5% and cash 3.3% of the portfolio againstrespective benchmarks of 80% and 0% (see page 9 above)

Performance

The total return on Presbyterian Church of Wales fund was 9.7% for 2017 compared with the return fromthe benchmark of 10.8%. Part of the underperformance is attributable to the Church’s ethical policy asalcohol and tobacco stocks continued to perform well in 2017. The value of the fund solely managed byInvestec Bank was £10.83million as at 31 December 2017 (10.28million: 2016). There was no withdrawalfrom the portfolio in either 2016 or 2017.

11


Outlook

The Presbyterian Church of Wales funds are long-term investments and there has been no change in

2017 to the asset allocation and benchmark within the portfolio (see section on investment policy and

performance on page 9); the Church will continue to review its future cash flow requirements in the light

of the current reserves policy.

In the UK, all policy is overshadowed by Brexit negotiations. Investment has suffered from the uncertainty

and this will likely continue until the full terms of Brexit are decided. The weaker pound, despite having

rallied towards the year end, means UK assets and products look cheap to overseas buyers, who

themselves are operating in a better economic environment.

Two of the main themes of recent years have focussed on the effects of the rise of populism in the politics

and a shift in global monetary policy. Whilst both remain important for the economic outlook the fears of

the effect from both have diminished in the latter part of 2017. There has been uncertainty in respect of

the outcomes of elections in Netherlands, France and Germany although there is believed to be enough

economic momentum in Europe despite these political uncertainties.

Monetary policy presents a greater challenge to markets in 2018 with the UK, USA and Canada having

already raised the base rate of interest. Future decisions on interest will depend greatly on inflation and

economists are unable to rea’ch a consensus on the outlook going forward. A further issue comes from

reduction and ultimate reversal of quantitative easing and whilst the full impact is impossible to quantity it

must be noted that financial assets have benefited by central bank liquidity since 2009. Therefore the

changing in policy represent a risk for investors in 2018 and beyond.

Further global uncertainty exists in particular the situation between the USA and China but economies

and markets continue to grow. However the current period of continued gains with little volatility is longer

than average and such periods are often followed by a significant market correction.

Future developments

The following items will be considered by the Board and departments in 2018 with recommendations or

progress updates presented to the General Assembly in 2018.

• the possibility of changes to the provision of theological education in Wales; the Academic Director

is in consultation with a number of colleges and other denominations in Wales;

• a consultation to discuss the administration and responsibilities of Presbyteries;

• the restoration of the archive in the National Library;

• the preparation of a discussion document on viable Ministry taking account of the size and shape of

pastorates;

• the possibility of updating rules regarding the election of elders and responsibility of managing

trustees;

• the new Data Protection legislation;

• an update on the Christian Aid ‘Typhoon of Love’ appeal for the Philippines;

• the production of a pastoral leaflet to assist churches when responding to the needs of members

who are no longer able to attend as they are in residential / care homes;

• the upgrading of the accommodation at Coleg Trefeca; and

• receiving reports and updates from all of the workers and projects through the Ministries Departmentincluding the potential for church planting in various locations.

12

Presbyterian Church of WalesStatement of Trustees’ Responsibilities

The trustees are responsible for preparing the Trustees’ Annual Report and the financial statements inaccordance with applicable law and United Kingdom Accounting Standards (United Kingdom GenerallyAccepted Accounting Practice).

The law applicable to charities in England and Wales requires the trustees to prepare financialstatements for each financial year which give a true and fair view of the state of affairs of the charity andthe group and of the incoming resources and application of resources of the group for that period.

In preparing these financial statements, the trustees are required to:

• select suitable accounting policies and then apply them consistently;• observe the methods and principles in the Charities SORP;• make judgments and estimates that are reasonable and prudent;• state whether applicable accounting standards, comprising FRS 102, have been followed,

subject to any material departures disclosed and explained in the financial statements; and• prepare the financial statements on the going concern basis unless it is inappropriate to

presume that the charity will continUe in business.

The trustees are responsible for keeping proper accounting records that disclose with reasonableaccuracy at any time the financial position of the charity and enable them to ensure that the financialstatements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008They are also responsible for safeguarding the assets of the charity and the group and hence for takingreasonable steps for the prevention and detection of fraud and other irregularities.

In so far as the trustee is aware:

• there is no relevant audit information of which the Charity’s auditor is unaware; and• it has taken all steps that it ought to have taken to make itself aware of any relevant audit

information and to establish that the auditor is aware if that information.

The trustee’s confirm that they have had regard to the Charity Commission’s guidance on public benefitin reporting on the charity’s objectives and achievements.

The trustee is responsible for the maintenance and integrity of the Charity’s website. Legislation in theUnited Kingdom governing the preparation and dissemination of financial statements may differ fromlegislation in other jurisdictions.

By order of the trustees

Tr ste

Date: 10 May2018

13

Presbyterian Church of WalesConsolidated Statement of Financial Activitiesfor the year ended 31 December 2017

Report on the financial statements

Opinion

In our opinion, the Presbyterian Church of Wales’s group financial statements and parent charity financialstatements (the financial statements”):

• give a true and fair view of the state of the group’s and of the parent charity’s affairs as at 31 December2017 and of the group’s and parent charity’s incoming resources and application of resources, and ofthe group’s cash flows, for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted AccountingPractice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial ReportingStandard applicable in the UK and Republic of Ireland”, and applicable law); and

• have been prepared in accordance with the requirements of section 144 of the Charities Act 2011 andRegulation 8 of The Charities (Accounts and Reports) Regulations 2008).

We have audited the financial statements, included within the Annual Report (the “Annual Report”), whichcomprise: the consolidated and parent charity balance sheets as at 31 December 2017; the consolidatedstatement of financial activities, the consolidated cash flow statement; the notes to the financial statements, which

include a summary of significant accounting policies.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISA5 (UK)”) andapplicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for theaudit of the financial statements section of our report. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the charity in accordance with the ethical requirements that are relevant to ouraudit of the financial statements in the UK, which includes the FRC’s Ethical Standard and we have fulfilled ourother ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report toyou when:

• the trustees’ use of the going concern basis of accounting in the preparation of the financialstatements is not appropriate; or

• the trustees’ have not disclosed in the financial statements any identified material uncertainties thatmay cast significant doubt about the group’s and parent’s ability to continue to adopt the goingconcern basis of accounting for a period of at least twelve months from the date when the financialstatements are authorised for issue.

However, because not all future events or conditions can be predicted, this statement is not a guarantee as tothe group’s and parent’s ability to continue as a going concern.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statementsand our auditors’ report thereon. The trustees are responsible for the other information. Our opinion on thefinancial statements does not cover the other information and, accordingly, we do not express an audit opinionor, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, indoing so, consider whether the other information is materially inconsistent with the financial statements or ourknowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparentmaterial inconsistency or material misstatement, we are required to perform procedures to conclude whetherthere is a material misstatement of the financial statements or a material misstatement of the other information.If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothing to report based on these responsibilities.

Based on the responsibilities described above and our work undertaken in the course of the audit, ISAs (UK)require us also to report certain opinions and matters as described below.

14


Trustees’ Report

Under the Charities Act 2011 we are required to report to you if, in our opinion the information given in theTrustees’ Annual Report is inconsistent in any material respect with the financial statements. We have noexceptions to report arising from this responsibility.

Responsibi’ities for the financia’ statements and the audit

Responsibilities of the Trustees for the financial statements

As explained more fully in the Statement of Trustees’ Responsibilities set out on page 13, the trustees areresponsible for the preparation of the financial statements in accordance with the applicable framework and forbeing satisfied that they give a true and fair view. The trustees are also responsible for such internal control asthey determine is necessary to enable the preparation of financial statements that are free from materialmisstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the group’s and parent ability tocontinue as a going concern, disclosing as applicable, mailers related to going concern and using the goingconcern basis of accounting unless the trustees either intend to liquidate the group and parent or to ceaseoperations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are freefrom material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes ouropinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted inaccordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if, individually or in the aggregate, they could reasonably beexpected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the FinancialReporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of ourauditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the charity’s trustees as a body inaccordance with section 144 of the Charities Act 2011 and regulations made under section 154 of that Act(Regulation 24 of The Charities (Accounts and Reports) Regulations 2008)and for no other purpose. We do not,in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whomthis report is shown or into whose hands it may come save where expressly agreed by our prior consent inwriting.

Other required reporting

Charities Act 2011 exception reporting

Under the Charities Act 2011 we are required to report to you if, in our opinion:

• we have not received all the information and explanations we require for our audit; or

• sufficient accounting records have not been kept by the parent charity; or

• the financial statements are not in agreement with the accounting records and returns.

We hay o exceptions to report arising from this responsibility.

PricewaterhouseC pers LLPChartered Accountants and Statutory AuditorsCardiff

Date: 10 May 2018

PricewaterhouseCoopers LLP is eligible to act, and has been appointed, as auditor under section 144(2) of theCharities Act 2011.

15


Income trom investments

Income from charitable activities:Colleges and centresOther incomeTotal

Expenditure on:Charitable activities:Ministers benefitsEcumenical and PCW contributionsColleges and centres costs

OtherTotal resources used

Net income I (expenditure)Net gains on investmentsNet income / expenditureTransfers between fundsOther recognised (losses) I gains:Valuation of heritage assetsActuarial gains on defined pensionschemeNet movement on funds

The statement of financial activities incorporates the statement of comprehensive income.

All activities are continuing.

Activities have been split between unrestricted and restricted for 2016 in note 21.

Income from generated funds:

Connexional contnbutionsDonationsLegaciesGrants

Note Unrestricted Restricted Total Totalfunds funds funds funds

2017 2016£‘OOO £‘OOO £‘OOO £‘OOO

2,379 - 2,379 2482145 140 285 226

52 30 82 143

6 60 66 74

3 166 265 431 399

- 117 117 124

4 594 4 598 826

3,342 616 3,958 4,274

67

12

11

9

1,195 2,277 3,472 3,354531 297 828 779102 380 482 516

1,828 2,954 4,782 4,649

23 9 32 32

1,851 2,963 4,814 4,681

1,491 (2,347) (856) (407)

255 392 647 7641,746 (1,955) (209) 357

(2,195) 2,195 - -

•

- (4) (4) 3

549 - 549 344

100 236 336 704

8,057 10,354 18,411 17,707

8,157 10,590 18,747 18,411

Reconciliation of funds:

Total funds brought forward

Total funds carried forward

16

Presbyterian Church of WalesConsolidated and Parent Charity Balance Sheets as at

Fixed assets

Tangible fixed assets

Heritage assets

Investments

Current assets

Stock

Debtors

Short term deposits

Cash at bank and in hand

Creditors: amounts falling duewithin one yearNet current assets

Net assets excluding pensionscheme asset

Pension scheme surplus

Net assets including pensionscheme asset

Funds

Unrestricted

Pension reserve

31 December 2017

The financial statements on pages 16 to 33 were approved by the Board of Trustees on 1 0th

May 2018 and signed on its behalf by:

Trustee Trustee

Group2017

£‘OOO

Charity2017

£‘OOO2016

£‘OOO2016

£‘OOO

1,090

202

11,474

12,766

997

198

12,121

13,316

584 595

Note

10

11

12

13

14

15

9

16

16

16

17

11,753 11,124

12,337 11,719

4 5 - -

1,969 2,261 2,029 2,313

368 307 12 12

220 627 122 526

2,561 3,200 2,163 2,851

(588) (602) (729) (745)1,973 2,598 7,434 2,706

15,289 15,364 13,771 13,8253,458 3,047 3,458 3,047

18,747 78,411 17,229 16,872

4,699 5,010 4,699 5,010

3,458 3,047 3,458 3,047

8,157 8,057 8,157 8,057

10,590 10,354 9,072 8,815

18,747 78,417 17,229 16,872

Restricted

Total funds

17

Presbyterian Church of WalesConsolidated Cash Flow Statement for the year ended 31 December 2017

Note2077 2076

£‘OOO £‘OOO

Reconciliation of net expenditure to net cash used inoperating activitiesNet expenditure (856) (407)

Adjustments for:Investment income 3 (431) (399)

Pension Fund 9 138 (125)

Depreciation charges 10 103 103

Add:Decrease in stocks 13 1 1

Decrease / (increase) in debtors 14 292 (464)

Decrease in creditors 15 (14) (119)

Net cash used in operating activities (767) (1,410)

Statement of cash flowsCash flows from operating activitiesNet cash used in operating activities (767) (1,410)

Cash flows from investing activities:Interest from investments 431 399

Purchase of investments (2,081) (1 ,566)

Proceeds from sale of investments 2,081 1,566

Purchase of property, plant and equipment (10) (11)

Net cash provided by investing activities 421 388

Change in cash and cash equivalents (346) (1,022)

Cash & cash equivalents at 1 January 934. 1,956

Cash & cash equivalents at 37 December 588 934

18

Presbyterian Church of WalesNotes to the financial statements for the year ended 31 December 2017

1. Principal accounting policies

Basis of preparation

The financial statements have been prepared on a going concern basis and under the historical costconvention, with the exception of the revaluation of certain land and buildings, heritage assets andinvestments which are included on a market value basis. The financial statements have been preparedin accordance with the Statement of Recommended Practice — Accounting and Reporting by Charities2015 (SORP 2015), Financial Reporting Standard applicable in the United Kingdom and the Republicof Ireland (FRS 102) and the Charities Act 2011, using consistently applied accounting policies.

The accounts consolidate those of Coleg y Bala, Trefeca College, the Candidates and TrainingDepartment Fund and the Welsh Calvinistic Methodist Assurance Trust (dormant). In accordance withthe Charities SORP, no separate Statement of Financial Activities has been presented for the Churchalone.

Fund accounting

The purpose of the unrestricted funds (note 16) is to finance the general running of the PresbyterianChurch of Wales. The primary source of income is the Connexional Contribution, the levy paid by eachchurch within the Connexion. Unrestricted funds are used to finance the day to day running of the Churchincluding the General Assembly and its constituent Boards and the administrative office in Cardiff.

Restricted funds (note 17) are funds subject to specific restrictive conditions imposed by the donor orby the purpose of an appeal. The principal restricted fund relates to the Ministries Department (formerlyLife and Witness Board) General Fund (an amalgamatidn of the JJ Maintenance of Ministry, MissionBoard and Christian Education Board Funds), the purpose of which is restricted to financing ministerialcosts and mission work.

All income and expenditure is shown in the Statement of Financial Activities.

Accruals

The accounts have been prepared on an accruals basis. All liabilities are recognised at their settlementvalue.

Incoming resources

Income from donations and gifts, legacies and grants is recognised on a receivable basis when there issufficient certainty of receipt and the value of the incoming resource can be measured with sufficientreliability.

Property

Churches and manses and other ecclesiastical land or property which have been transferred to,bequeathed or given to the Presbyterian Church of Wales and were held by the Church (and managedby the trustees of local congregations or Presbyteries) at the balance sheet date have had no valueplaced on them.

Each local church, Presbytery and Association undertakes its own transactions and has its own trustees.The Elders, Ministers and Officers of each local church are the managing trustees. Therefore, alltransactions undertaken by each Association, Presbytery and local congregation are excluded fromthese accounts. Transactions relating to these properties e.g. repairs, insurance, or any rental incomeare included in the books of each local church.

Tangible fixed assets

The cost of tangible fixed assets is their purchase cost together with any incidental costs of acquisition.Expenditure on tangible fixed assets with a cost below £2,000 is not capitalised.

19


Depreciation is charged by equal annual instalments to write down the cost of the assets to theirexpected residual values over their estimated useful lives at the following rates:

Buildings 2% per annumMotor vehicles 20% per annumComputer equipment 20% per annumFixtures and fittings 10% - 20% per annumProperty improvements 5% per annum

Freehold land is not depreciated. The useful economic lives of fixed assets are reviewed at the end ofeach accounting period along with a review for impairment where indicators of potential impairment areidentified. There has been no change in the rates of depreciation in the year.

Heritage Assets

The Howell Harris Museum at Coleg Trefeca shows aspects of the life of Howell Harris, whose 1735conversion led to the founding of Welsh Methodism; also the community ‘Teulu Trefeca’, which heestablished at the College in 1752. The displays include a room as it might have been in Harris’ time,an outdoor preaching scene and panels telling his story. A collection of 32 religious books, most of whichwere printed by the ‘Trevecka press’ in the late eighteenth century are displayed in rotation in themuseum along with artefacts and furniture from Harris’s period at the College.

The museum also houses artefacts of the Presbyterian Church of Wales which were previously housedat the National Library of Wales. Items include furniture, silverware and other items of historicalsignificance.

In accordance with the provisions of FRS 102, heritage assets have been included in the financialstatements at their insurance valuation contained within the College policy with Ecclesiastical Insurance.The insurance value is reassessed annually. Any costs to maintain the museum or its artefacts arecharged to the Statement of Financial Activities as incurred. The assets are deemed to haveindeterminate lives and therefore no depreciation is charged.

The museum is managed by the trustees of College and on a day to day basis by the centre manager.Details of the artefacts are kept at the College. Additions to the museum can be made by way ofdonation. Any purchases or disposals (in exceptional circumstances) require the approval of the trusteesand the Church through the General Assembly Board. The museum and artefacts are generallyaccessible Monday to Friday between lOam and 4pm.

The Charity has a number of further heritage assets which include furniture, paintings, silverware andother objects of historical interest relating to the Church. The collection, located at various locationsacross Wales and beyond, includes artefacts dating back to the nineteenth century and forms a uniquerecord of the history of the Church. At this date it has not been possible to value these assets.

Fixed asset Investments

(a) Listed investments are stated at market values based on bid prices at 31 December 2017. Profitsand losses on sales of investments are calculated by reference to the opening carrying amountand are transferred directly to the relevant funds. Unrealised revaluation surpluses or deficits arealso included in the relevant funds movement. Both profits and losses on disposals and unrealisedsurpluses or deficits arising on revaluation of investments are reported in the Statement ofFinancial Activities.

(b) Investment properties are included in the balance sheet at fair value. Professional valuations areperformed every three years on each property and market values are index linked in theintervening years. Depreciation is not provided on investment properties as the properties are notheld for consumption but for investment and the trustees consider that systematic annualdepreciation would be inappropriate. Depreciation or amortisation is only one of the many factorsreflected in the property valuation and the amount which might otherwise have been showncannot be identified.

20


Stock

Stock is stated at the lower of cost and net realisable value.

Pensions

The Church operates a defined benefit pension scheme. The fund is valued every three years byqualified actuaries.

The scheme is accounted for in accordance with the requirements of FRS 102, with the annuallycalculated notional surplus or deficit on the funding of the Scheme shown in the accounts as a separatefund entitled ‘Pension Reserve’ which is deducted from General Funds in the Balance Sheet. Details ofthe pension scheme are given in Note 9 to the financial statements.

In order to comply with auto enrolment regulations the Church operates a defined contribution schemeadministered by AEGON for those ministers and employees who do not join the defined benefit scheme.

Taxation

The Church is a registered charity and as such is entitled to certain tax exemptions on income andprofits from investments, and surpluses on any trading activities carried out in the furtherance of theChurch’s primary objectives, if these profits and surpluses are applied solely for charitable purposes.

Consolidation

The consolidated financial statements incorporate the results of the Church and each of its subsidiariesfor the financial year ended 31 December 2017. Intra-group balances and transactions are eliminatedon consolidation. Uniform accounting policies are applied across the group.

Course fees

Shop sales

Donations and Legacies

Investment income

Sundry income

Total incoming resources

Resources Expended

Charitable activities

Other

Total resources expended

Net outgoing resources

104 119

4 4

31 168

13 12

2. Results of Connected Charities *

(“ excludes grant received from the Church)

Incoming resources

2017

£‘OOO

2016

£‘OOO

10 2

163 305

493 512

5 5

498 517

(335) (212)

21


Investment Income

Unit Trusts

Fixed Interest and cash

Equities

Investment Property

Bank interest

Loan interest receivable

Profit on sales of chapels and manses

Sundry income

Total — Group

Ministers benefits

Ecumenical contributions

College and centre costs

Other

Total Charity

College and centre costs

Total Group

2017 2016 2017 2016£‘OOO £‘OOO £‘OOO £‘OOO

37 28 36 27

72 67 70 65

278 257 268 248

2,581

219

563

3,363

2,647

222

292

3,161

3. Investment income

Group Charity

4. Other Income

5. Total resources used

44 47 44 47

431 399 418 387

Unrestricted Restricted Total Totalfunds funds funds funds

2017 2016£‘OOO £‘OOO £‘OOO £‘OOO

- 3 3 6

41 - 41 37

521 - 521 749

32 1 33 34

594 4 598 826

Staff costs Other Total Total

£‘OOO costs 2017 2016

£‘OOO £‘OOO £‘OOO

3,051 421 3,472 3,354

170 658 828 779

48 70 118 114

- 32 32 32

3,269 1,181 4,450 4,279

94 270 364 402

3,363 1,451 4,814 4,681

Staff costs

Stipends, wages and salaries

Social security costs

Pension costs

22


The total number of employees by function was: 31 December 31 December2017 2016

Ministers — full time 45 50Ministers — part time 6 8Field workers 35 31Colleges and centres 6 6Administration 19 17

111 112

Trustees4 of the trustees (2016: 5) received a total of £122,171 in 2017 (2016: £116,243) in stipend as Ministerswithin the Presbyterian Church of Wales.

7 of the trustees (2016: 7) received a total of £2,500 in 2017 (2016: £2,450) in honoraria payments asrecognition for their work within the Church’s various boards, departments and panels.

11 of the trustees (2016: 12) who served during the year received a total of £9,549 in 2017 (2016:£11,810) as reimbursement for travel and subsistence expenses incurred in their capacity as trustees,officers or ministers within the Church.

No employee, officer or minister received remuneration of more than £60,000. The number of employeeswho received emoluments in the following ranges was:

31 December 31 December2017 2016

£0 to £10,000 9 (9*) 5 (5*)

£10,001 to £20,000 20 (17*) 25 (19*)

£20,001 to £30,000 39 (9) 37 (5*)

£30,001 to £40,000 36 40£40,001 to £50,000 7 5£50,001 to £60,000 0 0

111 (35*) 112 (29*)

*Denotes part time staff

23

7. Ecumenical and PCW Contributions


6. Ministers benefits

Unrestricted Restricted Total Totalfunds funds 2077 2076£‘OOO £‘OOO £‘OOO £‘OOO

2,172 2,221 2,310

20 20 31

85 647 629

2,277 2,888 2,970

49

562

611

Stipends and salaries

Pastoral expenses

Support costs (note 8)

Pension costs:

Contributions paid **

Current service pension costs

Pension audit

Pension finance income

Total ministers benefits

425 - 425 487

222 - 222 (24)

21 - 21 22

(84) - (84) (101)

584 - 584 384

7,195 2,277 3,472 3,354

** Included within contributions paid is £8k (2076: £4k) which relates to auto enrolment contributions made as partof the defined contribution scheme.

International

Wales/UKMinisters, workers, candidates, Association,presbyteries and local churches

Support costs (note 8)

Unrestricted Restricted Total Totalfunds funds 2017 2016

• £‘OOO £‘OOO £‘OOO £‘OOO

39 4 43 79

77 162 239 183

57 77 134 117

358 54 412 400

531 297 828 779

24


8. Support costs

Salaries & wages

Travelling & subsistence

Utility costs

Property & general insurances

Printing & stationery

Postage & telephoneRepairs, maintenance &improvementsLeasing charges

Equipment & materials

Legal & professional charges

Audit fees

Depreciation

Advertising & publicity

Course fees

Bad debt provision

Publishing costs

Total 2017 Total£‘OOO 2016

£‘OOO

485 468

167 159

19 30

25 25

24 27

96 105

49 43

21 20

5 4

1 2

43 20

23 -

1,143

Basis of allocationSupport costs are allocated on the basis of the estimated percentage allocation of staff time spent on each charitableactivity.

Ministers Allocation of CollegeBenefits Ecumenical and

Contributions Centre£‘OOO £‘OOO costs

£‘OOO267 170 48

92 58 17

22 14 4

16 10 3

63 41 12

19 12 3

10 7 2

14 9 2

13 9 2

53 33 10

26 18 5

12 7 2

3 1 1

24 15 4

12 8 3

40

29

116

34

48

30

130

32

647 412 118 1,177

25


9. Pension costs

The Presbyterian Church of Wales (the Church) operates a defined benefit pension arrangement called

the Presbyterian Church of Wales Pension Scheme (the Scheme). The Scheme provides benefits based

on final salary and length of service on retirement, leaving service or death.

The Scheme is subject to the Statutory Funding Objective under the Pensions Act 2004. A valuation of

the Scheme is carried out at least once every three years to determine whether the Statutory Funding

Objective is met. As part of the process the Church must agree with the trustees of the Scheme the

contributions to be paid to address any shortfall against the Statutory Funding Objective.

The most recent comprehensive actuarial valuation of the Scheme was carried out as at 31 December

2015.

Assumptions

The principal assumptions used to calculate Scheme liabilities are:


Discount rate 2.40% 2.60%

Inflation assumption: RPI 3.50% 3.60% paCPI 2.50% 2.60% pa

Pension increases in paymentPre April 1997 0.00% 0.00%Post April 1997 (LPI 5%) 2.40% 2.50%Post April 2005 (LPI 2.5%) 1 .90% 2.00%

Salary Increases 3.00% 3.10%

Retirements All members retire at National Retirement Age (NRA)

2017 95% of the S2PXA tables with the CMI_201 5 projectionsbased on a long term rate of improvement of 1.25%

Post retirement mortality assumption 2016 95% of the S2PXA tables with the CMI_201 5 projectionsbased on a long term rate of improvement of 1.25%

Members are assumed to take 80% of the maximum tax freeTax-free cash .

cash possible using current commutation factors

Assets

The major categories of assets as a percentage of total assets are as follows:


Equities 26% 30%

Property 0% 0%

Other assets 9% 6%

GUts 30% 30%

Bonds 32% 32%

Cash 3% 2%

Total 100% 100%

The actual return on the Scheme’s assets net of expenses over the period to the Review Date was

£1,627,000.

The assets do not include any investment in the Church. -

26


Notes to the financial statements for the year ended 31 December 2017

Fair value ot plan assets

Present value of funded obligations

_____________________________

Surplus

_____________________

Amounts Recognised in the Summary of Financial Activities over the year

2017 2076£‘OOO £‘OOO

Current service cost 443 281Administrative costs 128Interest on liabilities 693Interest on assets (794)Past service cost 50Total

Remeasurements over the year

Loss I (gain) on scheme assets in excess of interest

Experience losses / (gains) on liabilities

Losses / (gains) from changes to demographic assumptionsLosses I (gains) from changes to financial assumptions

Total

Reconciliation of assets and Defined Benefit Obligation

The change in assets over the year was:

Fair value of assets at the beginning of the yearInterest on assets

Employer contributions

Contributions by Scheme participants

Benefits paid (net of expenses)

Administration costs

Return on plan assets less interest

Fair value of assets at the end of the year

110

Amounts Recognised in the Balance Sheet

2017£‘OOO

26,428

(22,970)

3,458

2016£‘OOO

25,542

(22,495)

3,047

86

571

(655)

555 358

2077 2016£‘OOO £‘OOO

(972) (3,607)

1 (153)- (343)

422 3,759

(549) (344)

2077 2016£‘OOO £‘OOO25,542 21,802

655 794

417 483

147 145

(1,219) (1,161)

(86) (128)

972 3,607

26,428 25,542

27

70. Tangible fixed assets

Group

Costlvaluation

Ati January2017

Additions

At 31 December 2017

Accumulated Depreciation

At 1 January 2017

Charge for the year

At 31 December 2017

Net book value

At31 December2017

At 31 December 2016

CharityCosUvaluation

Ati January2017

Additions

At 31 December 2017

Accumulated Depreciation

At1 January2017

Charge for the year

At 31 December 2017

Net book value

At31 December2077

At 31 December 2016

2017£‘OOO

22,495

443

147

110

571

(1,219)

422

22,970

2076£‘OOO

19,224

281

145

50

693

(1,161)

(153)

(343)

3,759

22,495


The change in defined benefit obligation over the year was:

Defined benefit obligation at the beginning of the year

Current service cost

Contributions by Scheme participants

Past service cost

Interest cost

Benefits paid (net of expenses)

Experience (gain) I loss on defined benefit obligation

Changes to demographic assumptions

Changes to financial assumptions

Computerequipment/

Motor Land and fixtures and Property

vehicles buildings fittings improvements Total

£‘OOO £‘OOO £‘OOO £‘OOO £‘OOO

13 636 457 1,371 2,477

2 - 8 - 10

15 636 465 1,371 2,487

11 62 387 927 1,387

2 13 22 66 103

13 75 409 993 1,490

2 561 56 378 997

2 574 70 444 1,090

- 636 88 - 724

2 - 8 - 10

2 636 96 - 734

- 62 67 - 129

- 13 8 - 21

- 75 75 - 150

2 567 21 - 584

- 574 21 - 595

28

2017 2016£‘OOO £‘OOO

31 December 198 202

There were no additions or disposals in 2017 and the estimated decrease in the value of the heritage assetsof £4,000 has been credited as an unrealised loss on valuation of Heritage Asset.

The Charity has a number of further heritage assets which include furniture, paintings, silverware andother objects of historical interest relating to the Church. The collection, located at various locationsacross Wales and beyond, includes artefacts dating back to the nineteenth century and forms aunique record of the history of the Church. At this date it has not been possible to value these assets.

12. Fixed Asset Investments

2017

6.86%

5.25%

5.18%5.01%

2016

5.76%


11. Heritage Assets

The Group’s Heritage assets are included at the insurance valuation as follows:

Group Charity2077 2016 2017 2076

£‘OOO £‘OOO £‘OOO £‘OOO11,474 10,710 11,124 10,3862,081 1,566 2,010 1,513

(2,081) (1,566) (2,010) (1,513)647 764 629 738

12,121 17,474 11,753 71,124

At 1 JanuaryAdditionsDisposals

Gains on investments

At31 December

Cost at 31 December

UK Investments

Investment property

Unit trustsFixed interest securitiesEquities

Cash

Market value of investments

9,859 9,832 9,524 9,498

1,210 1,129 1,210 1,1291,060 835 1,024 8071,655 1,624 1,599 1,5697,842 7,555 7,578 7,299

354 331 342 32012,121 11,474 11,753 17,124

The Charity has recognised realised gains on sales of investments of £nil (2016: £nil).

The following represent investments valued at greater than 5% of the total market value of quotedinvestments.

Royal Dutch Shell ‘B’ Ordinary Shares

UK Government Fixed Interest 1.75%, 2022

HSBC Holdings Ordinary SharesThreadneedle UK Mid 250 Accumulation

Investment properties consist of 7 properties (2016: 7) throughout Wales. All are valued every 3 yearsand all 7 were valued at market value during 2017, five properties by Prys Jones & Booth (CharteredSurveyors), Abergele and two by Seel & Co (Chartered Surveyors), Cardiff. Market values forintervening years are calculated using the Nationwide property value index (Wales region).

Six properties are residential and one is a commercial property which was acquired in 2012 from a localchurch.

29

Creditors and accruals

Amounts due to group entities

Other liabilities

Group2017

£‘OOO

Charity2017

£‘OOO


73. Stocks

2016£‘OOO

2016£‘OOO

Goods for resale and consumables

14. Debtors

Debtors less than one year:

Connexional contributions

Loans and mortgages

Other debtors and prepayments

Debtors more than one year:

Loans and mortgages

4 5 - -

Group Charity2017 2016 2017 2016

£‘OOO £‘OOO £‘OOO £‘OOO

212 225 212 225

180 302 180 302

495 435 555 487

887 962 947 1,014

1,082 1,299 1,082 1,299

1,969 2,261 2,029 2,313

Loans and mortgages comprise car loans and mortgages relating to residential property which are made available

to employees of the church.

The maximum car loan available is £6,500 repayable over a maximum period of 5 years, at an interest rate of 3%.

The car loans are unsecured loans. The aggregate value of such included above was £155,000 (2016: £148,000).

The maximum mortgage available is £175,000 repayable over a maximum period of 30 years, at an interest rate of

3%. There are certain exceptions to these terms within the mortgage rules set by the Church and each case will be

considered on an individual basis. The mortgage is secured by a first charge against the property.

15. Creditors: amounts falling due within one year

Group Charity2017 2016 2017 2016

£‘OOO £‘OOO £‘OOO £‘OOO

364 415 364 415

-- 141 143

224 187 224 187

588 602 729 745

30

Unrestricted Funds

Pension fund

Total Group and Charity

4,699

3,458

8,157

Ministries Department

Robert Davies Trust

Historical Society

Christian Aid

Mission Programme Fund

Moderators Fund

Davies Lecture TrustSale of Theological CollegeFundSale of Chapels Fund

Total Charity

Coleg y Bala

Coleg TrefecaHowell Harris Museum andArtefactsCandidates and TrainingDepartment FundWelsh Calvinistic MethodistAssurance Trust

Total Group

5,691

383

2

(2)

27

35

81

1,410

2,528 271

- 19

2 -

62 -

48 -

6 -

5,841

402

2

4

29

29

98

1,479


16. Movement in Unrestricted Funds

At Income Expenditure7 January

2017 £‘OOO £‘OOO£‘OOO

4,352 4,9175,010

3,047

At 31December

2077£000

Gains/(losses)

£000

254

411

17. Movement in Restricted Funds

8,057 4,352 4,917 665

At Income Expenditure Gains/ At 311 January (losses) December

2017 £000 2017£‘OOO £000

£‘OOO£‘OOO

2,407

2

68

50

2 15

69

1,188 - - - 1,188

8,815 2,529 2,646 374 9,072

259 187 200 - 246

422 114 164 - 372

202 - - (4) 198

617 161 134 19 663

39 - - - 39

1,539 462 498 15 1,518

10,354 2,991 3,744 389 70,590

31


78. Analysis of Group Net Assets

Tangible and At 31heritage fixed Net assets December

assets Investments £‘OOO 2017£‘OOO £‘OOO £‘OOO

Unrestricted funds 584 4,624 (509) 4,699

Total 584 4,624 (509) 4,699

Restricted funds

Ministries Department - 5,331 510 5,841

Robert Davies Trust - 368 34 402

Moderators Fund - - 29 29

Historical Society - - 2 2

Christian Aid - - 4 4

Mission Programme Fund - - 29 29

Davies Lecture Trust - 76 22 98

Sale of Theological College Fund - 1,354 125 1,479

SaleofChapelsFund - - 1,188 1,188

ColegYBala 145 - 101 246

Coleg Trefeca 268 - 104 372

Howell Harris Museum 198 - - 198

Candidates & Training Fund Charity - 368 295 663

Welsh Calvinistic Methodist Assurance -

- 39 39TrustTotal 611 7,497 2,482 10,590

1,195 12,121 1,973 15,289

79. Funds held on behalf of others

The Properties Board is the custodian trustee of the Presbyterian Church of Wales. The Board

administers funds on behalf of local churches, presbyteries, the Association and other funds affiliated to

the Presbyterian Church of Wales. The funds held are:

2017 2016£‘OOO £‘OOO

Short-term deposits 21,967 22,739

756 570

22,723 23,309

The Church holds funds of £220,000 on behalf of Coleg y Bala, £20,000 on behalf of Coleg Trefeca and

these balances have been consolidated on the face of the balance sheet. The Church also holds

£12,000 on behalf of the Davies Lecture Trust, £30,000 on behalf of the Welsh CM Assurance Trust and

£nil on behalf of the Historical Society.

Total net assets (excluding pensionasset)

Cash

Total funds

32

S


20. Related Party Transactions

In accordance with paragraph 33.1A of FRS 102, the Church does not need to disclose related partytransactions with entities within the group.

At the year-end no trustees (2016: two) of the Church had an outstanding mortgage from the Church witha value of £nil (2016: £204,601). One trustee (2016: one) had an outstanding car loan from the Church witha value of £1,934 (2016: £2,774). Additionally, five members of senior staff of the Church (2016: three) hadoutstanding mortgages and car loans from the Church with a value of £193,142 at year end (2016:£186,693). Total interest of £5,896 was payable in relation to these balances relating to trustees and seniorstaff during the year. A daughter of another trustee is employed by the Church and has a car loan from theChurch with a value of £4,520 (2016: £1 ,209). Total interest of £450 was payable in relation to this balanceduring the year.

Three of the trustees (2016: three) of the Candidates and Training Department of the Presbyterian Churchof Wales have outstanding mortgages and car loans from the Church with an aggregate value of £215,919(2016: £263,056) at year end. Total interest of £4,695 was payable in relation to these balances during theyear. The father of another trustee is a Minister in the Church and has a car loan from the Church with avalue of £5,487 (2016: £nil). Total interest of £487 was payable in relation to this balance during the year.

Two of the trustees’ (2016: three) of Coleg Trefeca have outstanding mortgages and car loans from theChurch with an aggregate value of £5,498 (2016: £109,040) at year end. Total interest of £2,250 waspayable in relation to these balances during the year. A daughter of another trustee is employed by theChurch and has a car loan from the Church with a value of £4,520 (2016: £1,209). Total interest of £450was payable in relation to this balance during the year.

Six of the trustees’ (2016: five) of Coleg y Bala have outstanding mortgages and car loans from the Churchwith an aggregate value of £163,057 (2016: £176,122) at year end. Total interest of £5,313 was payable inrelation to these balances during the year. The wife of a trustee is employed by the Church and has car loanfrom the Church with a value of £6,690 (2016: £nil). Total interest of £390 was payable in relation to thisbalance during the year.

The Church provides accommodation for the General Secretary who is also a trustee of Coleg y Bala, ColegTrefeca, and the Candidates and Training Department. The wife of the General Secretary, together with twosons were employed in the year by the Church as workers on the CAMU/STEP project, youth workers, andstudents on the Mission Programme. They have outstanding mortgages and car loans from the Church witha value of £20,382 (2016: £18,522).Total interest of £488 (2016: £1,429) was payable in relation to thesebalances during the year.

The husband of another senior staff member, who is also a trustee of Coleg y Bala, is a minister of theChurch and has a mortgage and car loan from the Church with a value of £87,604 (2016: £92,761). Totalinterest of £2,778 (2016: £2928) was payable in the year in relation to these balances.

The Church also provides accommodation for one other member of staff who is a trustee of Coleg Trefeca.

Job related accommodation is also provided for three other senior staff members, the manager at ColegTrefeca, and the joint managers at Coleg y Bala.

33


27. Prior year analysis of unrestricted and restricted income and expenditure

Income from generated funds:

Connexional contributionsDonationsLegaciesGrants

Income from investments

Income from charitable activities:Colleges and centresOther incomeTotal

Expenditure on:Charitable activities:Ministers benefitsEcumenical and PCW contributionsColleges and centres costs

OtherTotal

Net income / (expenditure)Net gains/(losses) on investmentsNet income I expenditureTransfers between fundsOther recognised gains I (losses):Valuation of heritage assetsActuarial gains on defined pensionschemeNet movement on funds

Reconciliation of funds:

Total funds brought forward

Total funds carried forward

- 2,48297 226

142 14370 74

Unrestricted Restricted Totalfunds funds funds

2016£‘OOO £‘OOO £‘OOO

2,482129

4

157

8213,594

242

1245

680

399

124826

4,274

970 2,384 3,354512 267 779

98 418 516

1 ,580 3,069 4,649

18 14 32

1,598 3,083 4,681

1,996 (2,403) (407)

260 504 7642,256 (1,899) 357

(2,116) 2,116 —

- 3 3

344 - 344

484 220 704

7,573 10,134 17,707

8,057 10,354 18,411

34

Documents

for the year ended 31 December2017 (Registered Charity