REPORT AND ACCOUNTS - Salisbury Cathedral · 2016-10-03 · SALISBURY CATHEDRAL REPORT AND ACCOUNTS YEAR ENDED 31ST MARCH 2014 CONTENTS Page 1-2 Legal and administrative information

REPORT AND ACCOUNTS

YEAR ENDED 31ST MARCH 2014

SALISBURY CATHEDRAL REPORT AND ACCOUNTS

YEAR ENDED 31ST MARCH 2014 CONTENTS Page 1-2 Legal and administrative information 3-10 Report of the Chapter 11 Statement of Chapter's responsibilities 12 -13 Auditors' report 14-15 Principal accounting policies 16 Consolidated statement of financial activities 17 Consolidated balance sheet 18 Cathedral balance sheet 19 Consolidated cash flow statement 20-31 Notes to the accounts

SALISBURY CATHEDRAL YEAR ENDED 31ST MARCH 2014

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LEGAL AND ADMINISTRATIVE INFORMATION Full name: The Cathedral Church of the Blessed Virgin Mary Address: 6 The Close, Salisbury, Wiltshire, SP1 2EF Governing statutes: Salisbury Cathedral Constitution and Statutes dated 1st July 2001 Members of Chapter: Dean: The Very Reverend June Osborne Canons Residentiary: Canon T Clammer (Precentor) Canon E Probert (Chancellor) Canon S Mullally (Treasurer) Canons in Holy Orders: Canon Dr J Coates The Venerable A Jeans Lay Canons Mrs J Barker Dr L Brown (term of office ended August 2013) Mr C Hurford – Jones (appointed August 2013) Mr L March Mrs E Turton Executive Director/ Chapter Clerk: Mrs K Sporle

Members of Council: Lord Sharman (Chairman) The Bishop of Salisbury The Dean of Salisbury Canon T Clammer (Precentor) Canon E Probert (Chancellor) Canon S Mullally (Treasurer) Mrs J Barker Mrs K Beckett Lady Madeleine Bessborough Dr L Brown (term of office ended August 2013) Mr R Fleck Mr R Key Sir Hayden Phillips Dame Rosemary Spencer Mrs E Turton (appointed August 2013) The Venerable S Waine The Reverend J Woodhouse Mrs S Woolley


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LEGAL AND ADMINISTRATIVE INFORMATION (Continued) Finance Advisory Group: Mrs J Barker (Chairman) The Dean Mr R Creswell Mrs B Hollond Mr J Joll Mr L March Mrs E Osborne Fabric Advisory Committee: Sir Hayden Phillips (Chairman) Dr J Crook Mr P Dean Reverend Dr A Doig Mr J Goodall (appointed July 2013) The Very Reverend V Stock

Lay managers: Mr D Coulthard, Director of Marketing and Communications Mr D Halls, Director of Music Mr M Field, Director of Development Mrs S Rickett, Director of Learning and Outreach Mr R Gurd, Cathedral Accountant Mrs J Eldridge, Head of Human Resources Website address: http://www.salisburycathedral.org.uk

Professional advisers: Bankers: Lloyds plc, 38 Blue Boar Row, Salisbury, SP1 1DB Solicitors: Parker Bullen, 45 Castle Street, Salisbury, SP2 7JR Auditors: Fletcher & Partners, Crown Chambers, Bridge Street, Salisbury, SP1 2LZ Investment managers: Schroders, 12 Moorgate, London, EC2R 6DA Land agent: Strutt & Parker, 41 Milford Street, Salisbury, SP1 2BP Architect: Michael Drury St Ann's Gate Architects, The Close, Salisbury, SP1 2EB Archaeologist: Graham Keevil, 85 Kynaston Road, Didcot, Oxon, OX11 8HA

http://www.salisburycathedral.org.uk/


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THE GOVERNANCE OF THE CATHEDRAL The governance of the Cathedral is regulated by statute, the principal of which is the Cathedrals Measure 1999. This establishes the basic principles with which all cathedrals must comply and a structural framework to inform governance mechanisms. The Cathedrals Measure requires each cathedral to produce its own separate statutes. These statutes interpret the dictates of the Measure according to local or historic use, and in particular specify the functions and responsibilities of individuals, both clerical and lay, and establish the administrative framework. Cathedral Chapter Salisbury’s statutes were issued on 1 July 2001. They determine that the governing body of the Cathedral is the Chapter, consisting of the Dean, the three Residentiary Canons (Precentor, Chancellor and Treasurer), two non-residentiary canons elected by the clerical members of the College of Canons, two lay members elected by the lay canons of the College and two co-opted members appointed by Chapter. With the exception of the Dean and Residentiary Canons members hold office for three years but are eligible for re-election or re-appointment. Induction and training of new members is the responsibility of the Chapter Clerk who produces a programme of briefings and visits to ensure familiarity with the administration, management and finances of the Cathedral. Chapter undertook a comprehensive review of governance during the course of the year, producing a new code of good governance which was adopted in November 2013 following consultation with the Cathedral Council; the code is being used as an example of good practice by the Association of English Cathedrals. Cathedral Council The Cathedral Council was established under the Cathedrals Measure to “further and support the work of the Cathedral, spiritual and temporal, pastoral, evangelistic, social and ecumenical, reviewing and advising upon the direction and oversight of that work by the Chapter”. It met twice during the year under the chairmanship of Lord Sharman, taking reports on the regulation of Cathedrals, the Strategy and Programme and the Cathedral’s Annual Report. College of Canons The Cathedrals Measure requires the Cathedral to establish a College of Canons consisting of every canon of the Cathedral, including the Bishop, the Dean, the suffragan bishops and every archdeacon in the Diocese. In its membership the College expresses the close relationship between the Cathedral and the rest of the diocese of Salisbury. The College met twice during the year installing six new canons in 2013 and bidding farewell to three members. Executive Chapter is supported by a full team of Executive Directors and staff who undertake the operational administration of the Cathedral. The Executive works in total partnership with the Residentiary Canons who provide oversight and, as appropriate, managerial expertise. The Dean chairs both Chapter and the Executive briefings which ensures that Chapter leads and directs and the Executive implements the Cathedral’s objectives. Senior Directors, whilst continuing to have responsibility for departmental functions and activities, are increasingly working corporately to deliver against the Cathedral’s overriding objectives in a collegiate, mutually supportive fashion. Risk Management The risk register records the principal risks to which the Cathedral’s strategic plan is exposed. This is reviewed regularly by Chapter and the Executive and systems are in place to mitigate risks as they are identified. During the course of the year, and at the instigation of the Cathedral Council, a new overview of strategic risk was developed and implemented. The level and extent of the Cathedral’s insurance cover is reviewed at least annually to ensure that it is appropriate and Chapter’s actions are considered carefully in the light of potential reputational risk.


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STRATEGY 2013 -17 AND PROGRAMME FOR 2013/14 During the year, Chapter undertook a review of our purpose, values and ambitions, consulting with Cathedral Council, staff, volunteers and the congregation through the Community Forum. We can therefore confidently state that: Our Purpose is: Making a difference for God through exceptional worship and outreach. Our values are: Integrity, reflected in transparent, fair and consistent actions; Generosity, which generates a warm open welcome to all; Compassion, which promotes social justice, equality, diversity, dignity, consideration and respect for all. And our ambition is to be a beacon of confident, open Christianity with a reputation for warmth of welcome and willingness to engage with others. Our purpose, values and ambition are set out in full in our strategy for 2013-17 and Programme for 2013/14, which also articulates the main goals and priority actions we proposed to take to achieve measurable progress. WORSHIP As a Cathedral, we exist to sustain, enhance and develop our core purpose of offering worship to God and providing high quality liturgy and music at all times. Our focus during the year has been to continue to increase our spiritual impact through the development of worship and outreach activities so that all are offered a sense of God and the invitation to pray. We worked towards enhancing the opportunities for worship in private and in small groups by consulting on and undertaking selective re-ordering of the Cathedral. We aimed to further develop the Cathedral’s active role within the parishes and church schools in the Diocese. We set ourselves 15 priority actions all of which were met. They included developing our side chapels and beginning to re order St Michael’s Chapel and the Trinity Chapel. We reviewed and enhanced our ministry of prayer and healing. The regular rhythm of the Christian year was well represented by the familiar services at Advent, Christmas and Holy Week, and we were encouraged by the Christmas Eve Family Service in particular, which was full to capacity, and which we will develop further in response to feedback. Our tradition of excellence in Music was maintained with many glorious moments during the year. Once again we had more applications for choristers than places and again we attracted large audiences for five major concerts which included Christmas Celebration and the Faure’s Requiem. All of this takes place within the building, a magnificent gothic Cathedral, as a living monument in stone, glass and wood to the glory of God and a testament to the skills of countless craftsmen and women.

FUNDRAISING Completion of the Major Repair Programme continues to be at the heart of our fundraising endeavours. During the year we continued to benefit from the generous support from individuals and trusts, including the J. Paul Getty Jr Charitable Trust, the Garfield Weston Foundation and a very generous legacy from a local resident. We launched two initiatives during the year, a legacy campaign and the Sponsor a Stone scheme. The legacy campaign did not go as planned and lessons were learnt. The sponsor a stone initiative continues to be successful. Together, the fabric appeal donations totalled just under £1m and we are on track to complete the Major Repair Programme by 2018.


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FUNDRAISING (continued) We also took the opportunity to widen our fundraising net; a successful application for development funding from the Heritage Lottery Fund has paved the way for a new Magna Carta exhibition in 2015, with an ambitious outreach programme that will see us reaching new audiences; and a generous donation from the Sackler Trust has helped us begin to open up our other medieval treasure, the Cathedral’s library and archive collections. The Salisbury Cathedral Friends continue to underpin our fundraising efforts, with a further substantial donation towards the cost of the new Little Paradise facilities in addition to their usual and much appreciated support for flowers. Worship and music is at the heart of the Cathedral: the successful medallion scheme for the Girl Choristers is now being mirrored for the boys and we are delighted that we will be able to award our first new medallion this September. Other support for our music helped the successful choir tour to Saintes and, very importantly, the Cathedral was able to keep its commitment to give 30% of the day fees to all choristers, and ensure that children from all financial backgrounds are given an equal chance to develop their musical talents. We appreciate the support that we receive for all areas of our work, but are particularly grateful to individuals and Charitable Trusts who continue to support the Repair Programme. Their continued faithfulness means that we can now envisage a time when Salisbury Cathedral will be free from scaffolding for the first time in nearly 30 years. OUTREACH With Outreach established as a clear objective, the Cathedral has continued to support a variety of ways which provide opportunities for learning, encounter and transformation with families, young people, the local community and with schools. In our Programme for 2013 – 2014, of our 32 activities, 31 were achieved against the following priorities.

Creating opportunities to promote discovery, learning and education

Championing Social Justice and promoting reconciliation

Welcoming more visitors and enhancing their experience

Creating the right environment through the provision of excellent facilities for worshippers and visitors alike

Working with the wider diocese and external organisations

Valuing our people, both staff and volunteers

Securing our financial future through effective stewardship and focused fundraising. Good examples of the range of work include the first ‘Coping with bereavement’ evening, a successful event which sought to make a positive difference in a challenging area. Targeted projects with young people included the reshaped young volunteer programme, the excellent music experience for the Exeter House and Woodford Valley Unit and the Young People’s Gig which was the first opportunity for young people to gain access to the Cathedral space as a performance arena. The Arts Programme played a key part in attracting audiences with whom we might not otherwise engage. The Helaine Blumenfeld ‘Messenger of the Spirit’ exhibition and the ‘Faith in Focus’ Methodist Art was a means to work with a number of new school groups and individuals as well as new partners across the city and in particular draw out the spiritual connections. The schools programme developed new packages in arts, history and Religious Education along with a Gifted and Talented programme and the family activities attracted some of the biggest numbers to date. The Cathedral’s Marketing and Visitor services department, supported by many volunteer guides, attracted and managed a substantial increase in visitors, with numbers recovering from the previous Olympic summer to once again exceed 250,000. Tower Tours were particularly popular, seeing an 18% increase in visitors to top 10,000 for the first time. Donations by visitors reached just over £1m for the second year running.


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OUTREACH (continued) The shop also exceeded budget turning over £670k despite the impact of a minor refurbishment and temporary move, which were managed smoothly. It was a significant year for the Refectory Restaurant as it underwent a major refurbishment in early 2014, following the renewal of the Cathedral’s contract with partners Levy Restaurants (formaly Milburns). This saw a transformation of the dining area and improvements to the serving spaces to support the increase in visitors expected in 2015 - the new menu focussing on wholesome, home-produced baking, soups, stews and salads has been extremely well received by visitors, staff and volunteers alike. The refurbishment was extremely well managed but inevitably the impact of a temporary move to the Chapter House was seen in the overall turnover which remained at 2012/13 levels, a little in excess of £630k with a commission for the Cathedral of £119k. Two particularly significant projects were delivered during the year, with a new website launched just before Christmas as part of the Cathedral’s Digital Strategy implementation, and new signage installed in the Close to significantly improve its appearance. THE CATHEDRAL SCHOOL In accounting terms the School is financially independent of the Cathedral and its results are not included within these consolidated accounts. In practice, however, the relationship between the Cathedral and the School is both longstanding and profound, and extends beyond the mere provision of choristers. The School has occupied the Bishop’s Palace since 1947 and its current aspirations to improve its buildings are closely associated with the Cathedral’s own aspirations for the Cathedral Close, as set out in its Masterplan document. Chapter and the School’s governors are co-operating closely to provide the School with facilities which will not only complement the beauty of the Close but also help the School retain its attractiveness in a competitive sector. THE CATHEDRAL AND THE CLOSE The Cathedral in fulfilling its ambition seeks to give the widest possible access to the beauty of the Cathedral and the Close and to strengthen what is timeless in our life time. November 2013 marked an auspicious moment in progress. Little Paradise project for storage and toilet facilities was completed and opened to the public. This is a major step in both the large and small scheme of things. It is the first time ever a modern building abuts the medieval architecture of the Cathedral. It will vastly improve the visitor welcome and experience. The boilers have been re-located from the Works Yard. The computer servers will be re-located from the Gate House and staff and Volunteers have purpose built storage and facilities, liberating the Cathedral from the mundane but necessary elements of operational life. The completion of Little Paradise gives new vigour and confidence to the Cathedral’s commitment to achieving the strategic elements of the Master Plan. Equally important progress has been made in moving towards completion of the Major Repair Programme (scheduled for 2018) and the re-ordering of the interior of the Cathedral. Last year saw significant progress made on the Major Repair Programme and we completed the vaults of the North Cloister. The Works Department staff continued to offer their full support to the repair programme and a number of other projects of repair to monuments and the Cathedral floor paving.


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THE CATHEDRAL AND THE CLOSE (continued) The Close environment includes the Churchyard, Choristers’ Green and Marsh and Rack Closes: it contains one college, three schools, two museums and two further properties open to the public; management of this environment includes the upkeep and maintenance of the precincts. With the exception of income from car-parking, the cost of maintaining the Close is currently borne entirely by the Cathedral. The Close environment has continued to require attention which at times distracts from the Major Repair Programme. Essential repairs have been done by the Works Department as the need arises but have been limited in extent. While little advance was achieved on traffic management in this financial year we are now in a good place to make a substantial difference in the coming year. HUMAN RESOURCES In secular management terms the Cathedral equates to a medium-sized, not for profit business and carries all the human resource responsibilities incumbent upon an employer of both industrial and administrative staff together with over 600 volunteers. After a busy recruitment period the year before, the early part of 2013-2014 saw newly appointed staff begin to settle into their roles and highlight whether any skills gaps remained. It became clear that the structure still needed some adaptation in order to make the Cathedral completely fit for purpose and, in the autumn much work and consultation was undertaken to restructure key parts of the organisation. This led to the Facilities Manager and Head Verger posts being made redundant and three new posts being created, the Dean’s Verger, Floor Manager and Events Manager posts. The success of the first stage Heritage Lottery Fund bid has enabled the recruitment of a Cathedral Archivist and Magna Carta Project Manager, as well as paying for additional hours in the education department; all of which were necessary to enable the submission of the second round. CATHEDRAL COMMUNITY FORUM The Statutes provide for the establishment of the Salisbury Cathedral Community Forum whose membership includes people associated with the Cathedral in the broadest sense, with particular emphasis on congregation, staff and volunteers. The task of the Forum is to:

support the mission of the Cathedral in consultation and cooperation with Chapter

represent to Chapter the views of those who regularly worship or work in the Cathedral

elect two lay members to the Cathedral Council in accordance with Articles 5.2(5) and 18 of the Constitution of Salisbury Cathedral 2001.

Chapter has agreed that 5% of the moneys given at the offertory for Advent and Christmas carol services, normal Sunday and weekday services will be available for charitable giving. Proposals for the disbursement of these moneys to appropriate charities are made by the Forum. International, national and local charities received funding in this way during the year. This year the Community Forum supported us in the consultation on our values and undertook to review our material for new members of the Cathedral Congregation. They also took on co-ordination of the collection of food for local charities. FINANCIAL REVIEW Results The accounts on page 16 record a surplus of income over expenditure of £1,699k (2013:799k), before recognising gains on investment properties and investments. Surpluses such as these are most welcome and arise from significant, specific donations and grants for the Major Repair Programme in each year. This year the Cathedral has benefited from receipt of a substantial legacy of £500k for the Major Repair Programme. These gifts have to be recorded in the year in which they are received and cannot be carried forward to be matched with the expenditure in future years which they are intended to fund. The accounting treatment gives rise to swings in income and expenditure that can mask the underlying continuing financial vulnerability of the Cathedral.


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FINANCIAL REVIEW (continued) We have also been fortunate during the year to secure a generous gift from The Sackler Trust for the Library and Archive of the Cathedral and in particular support of the 2015 Magna Carta Exhibition. The Friends of Salisbury Cathedral provided a significant grant of £460k to enable the building of the new toilets known as Little Paradise. The continuing annual commitment to an average spend of £700k on the Major Repair Programme requires donations of equivalent amounts each year to fund it. We are most grateful for the donations received in the year towards these costs. They included £150k from an anonymous donor, £172k from trusts and donations from the Ivor Read Charity, Salisbury Cathedral Trust, Garfield Weston Foundation and a grant from the Cathedral Fabric Repair Fund. INVESTMENTS The Statement of Financial Activities discloses that the Cathedral made unrealised gains of £1,058k on its investments in the year. These gains are "unrealised" because they reflect the change in the market valuation of the Cathedral's investment portfolio between 31st March 2013 and 2014. Details of the movements in investments in the year are shown in note 8 to the accounts. The primary purpose of the investment portfolio is to generate income to support the Cathedral's activities. To that end the investments are concentrated in high income stocks of companies with strong balance sheets. A fluctuation in the capital value of the stocks may lead to unrealised gains or losses but not necessarily change their ability to generate income. Our portfolio is managed by professional investment managers and their performance is monitored on behalf of Chapter by the Cathedral's Finance Advisory Group. The Cathedral's Endowed Funds, both income and capital, may be used to improve the freehold properties owned by the Cathedral. During the year expenditure was primarily improvement works to houses in the Close occupied by members of the clergy, along with investment management fees. Income in the year received from the Friends of Salisbury Cathedral and the Listed Places of Worship Grant Scheme totalled £573k for Little Paradise and resulted in a surplus of £395k for the year on Endowed Funds before gains on investments were taken into account. Reserves and investment policies The Consolidated Accounts have been prepared in compliance with the Accounting and Reporting Regulations for English Anglican Cathedrals as promulgated by the Association of English Cathedrals. It is important to note that

the majority of investments are held on endowment and the capital cannot be realised to meet ordinary expenditure

the greater part of the endowment consists of the Close properties, a number of which are let on long repairing leases

the majority of the increase in funds includes unrealised gains of £1,058k (2013: £1,334k) on the revaluation of investments.

Under The Cathedrals Measure 1999 Chapter may invest the Cathedral’s funds in any of the following:

land

investments in which trustees may invest under the general power of investments in the Trustee Act 2000

the improvement or development of property belonging to the Cathedral, except that endowed funds may not be used to improve or develop the Cathedral itself or its ancillary buildings without the express authority of the Church Commissioners.

Endowed capital cannot be used to repair the Cathedral or Close properties.


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FINANCIAL REVIEW (continued) Salisbury Cathedral seeks to achieve steadily growing income and the preservation of its capital assets in real terms. The Cathedral has set an ethical investment policy (which draws on guidance given by the Church Commissioners). Its portfolio is invested in Managed Funds by reputable investment managers with a proven record of experience and success, who are responsive to our policies and standards. Managed Funds include a diversification of holdings in equities, property and fixed interest investments with the aims of producing total returns higher than the FTSE All Share Index and the FTSE British Government All Stocks Index over a rolling five-year period. The investment policy is reviewed at least once each year. The sale of one enfranchised leasehold Close property and one freehold in the year returned a realised surplus of £56k. The proceeds constitute endowed funds and so their use is restricted as set out above. OVERALL OUTCOMES AND LOOKING FORWARD The Cathedral’s unrestricted funds are those funds that are available to carry out its day to day ministry, education and outreach activities together with the basic upkeep of its buildings and precincts. Income is principally derived from visitors, property rents, investments and trading activities. Given the fluctuations in its income streams that are largely outside of its control, Chapter has an objective to retain in unrestricted reserves an amount equivalent to six months’ annual expenditure in order to maintain these necessary activities in times of income shortfall. In practice it has been difficult to attain this target however at the end of the financial year unrestricted funds stood at £2.6m representing just over six months of activity at 2013/14 levels. With continued careful financial management the Cathedral has been able to maintain these activities and is actively planning to augment its funds through fundraising, cost control and income generation. The 2014/15 budget aims to continue to achieve a routine surplus along with meeting the goals set in the programme for 2013 -2017.This will be a challenging year ahead to continue to deliver the Major Repair Programme, Cathedral’s objectives for worship and outreach, alongside focused efforts to gain a second round HLF grant with which to deliver a world class Magna Carta experience in 2015. The Cathedral will also be able to ensure investment is made in the library and archives following the recent gift by The Sackler Trust. Chapter’s intention is to ensure the Cathedral’s unrestricted reserves are able to meet six months of trading expenses in order that the Cathedral can not only meet its current commitments but also be able to realise gradually its plans to renew and develop its facilities for worshippers, visitors and staff. The Cathedral is immensely grateful for the faithful financial provision of its congregation and longstanding supporters, both personal and corporate. It continues to widen that circle of support through its fundraising initiatives, even though the current economic circumstances remain difficult.


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CONCLUSION This report sets out in detail the rich and varied nature of the life and work of this Cathedral Church. Without a doubt 2013/14 was a busy, productive, positive year of success and endeavour. It was also a year in which we took some risks and also made some mistakes, including a badly administered legacy mailing. Yet for the fourth year running, through careful stewardship of funds and generous donations we have achieved a budget surplus. So much of what we do is due to the unfailing and unstinting commitment of our dedicated volunteers, who as always deserve special mention and thanks. The thousands of visitors who come here each year are welcomed by our volunteers; independent research shows not only that our visitors rate their experience highly, but that more and more return for a repeat visit. The Major Repair Programme continues to be the Cathedral’s first call on fundraising and the focus of attention for the Cathedral Works Department of skilled and dedicated craftsmen and women. We are determined to do all we can to keep up the momentum of fundraising to ensure that the conservation of the north side of the Cathedral is completed during the Magna Carta year, and that we finish the Programme entirely by 2018. Our duty of care to both Cathedral and Close will always be with us but the removal of scaffolding from the face of the building is our current ambition. This report would not be complete without mention of Little Paradise, which was completed on time and within budget in November 2013. This simply would not have been possible without the contribution of our Friends whose partnership with us is invaluable. Much has been achieved and there is still much to do; with confidence and renewed hope we pledge ourselves to the privilege of bringing increasing innovation to the tradition that is Salisbury Cathedral.

The Very Reverend June Osborne Dean of Salisbury July 2014


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STATEMENT OF CHAPTER'S RESPONSIBILITIES FOR THE PREPARATION OF THE ACCOUNTS Members of Chapter are responsible for preparing the annual report and accounts in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice. Under the provisions of the Cathedrals Measure 1999 and the Constitution of Salisbury Cathedral Chapter is required to prepare accounts, for each financial year, which give a true and fair view of the state of the Cathedral's affairs and of its financial activities during the year. In preparing those accounts members of Chapter are required to:

select suitable accounting policies and then apply them consistently;

make judgements and estimates that are reasonable and prudent;

comply with applicable accounting standards and, in particular, prepare the accounts in accordance with the Accounting and Reporting Guidelines for English Anglican Cathedrals prepared by the Association of English Cathedrals, subject to any departures disclosed and explained in the accounts;

state whether the accounting standards and Guidelines referred to above have been followed; and

prepare the accounts on the going concern basis unless it is inappropriate to presume that the Cathedral will continue to be financially viable.

Members of Chapter are responsible for ensuring that the Cathedral keeps proper accounting records which disclose with reasonable accuracy the financial position of the Cathedral and which enable them to ensure that the accounts comply with the provisions of the Cathedrals Measure 1999 and the “Guidelines on English Anglican Cathedrals Accounts”. Members of Chapter are also responsible for safeguarding the assets of the Cathedral and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.


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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SALISBURY CATHEDRAL COUNCIL

We have audited the financial statements of Salisbury Cathedral for the year ended 31 March 2014 which comprise the Consolidated Statement of Financial Activities, the Consolidated Balance Sheet, the Entity Only Balance Sheet, the Consolidated Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law, Section 27 of the Cathedrals Measure 1999 and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the Chapter's members as a body, in accordance with Section 27 of the Cathedrals Measure 1999. Our audit work has been undertaken so that we might state to the members those matters we are required to state to them in the auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Chapter and the Chapter’s members as a body for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of the Chapter and auditor As explained more fully in the Statement of Responsibilities of the Chapter set out on page 11, the Chapter members are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:

whether the accounting policies are appropriate to the Cathedral’s circumstances and have been

consistently and adequately disclosed;

the reasonableness of significant accounting estimates made by the Chapter members; and

the overall presentation of the financial statements.

In addition, we read all the financial and non-financial statements in the Annual Report of the Chapter to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implication for our report. Opinion on the financial statements In our opinion the financial statements:

give a true and fair view of the state of the affairs of the Cathedral and its subsidiaries as at 31

March 2014 and of the net movement in funds for the year then ended.

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting

Practice and under Section 27 of the Cathedrals Measure 1999.


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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SALISBURY CATHEDRAL COUNCIL (CONTINUED) Matters on which we are required to report by exception We have nothing to report in respect of the following matters where we are required to report to you if, in our opinion:

the information given in the Annual Report of the chapter is inconsistent in any material respect

with the financial statements; or

sufficient accounting records have not been kept; or

the financial statements are not in agreement with the accounting records and returns; or

we have not received all the information and explanations we require for our audit.

FLETCHER & PARTNERS Chartered Accountants and Statutory Auditor Salisbury


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PRINCIPAL ACCOUNTING POLICIES Basis of accounting The accounts have been prepared under the historical cost convention, modified for the revaluation of properties and investments, and in accordance with applicable accounting standards and the Accounting and Reporting Guidelines for English Anglican Cathedrals prepared by the Association of English Cathedrals, as revised in November 2006. Properties Properties used for the Cathedral's own activities, apart from the Cathedral itself, are shown at existing use value, and investment properties are shown at open market value.

Depreciation is not charged on the properties used by the Cathedral because their values derive principally from their locations and, as a consequence, their residual values are not expected to be less than their current values and their lives are considered indefinite. These properties are revalued every five years and resulting adjustments are made to the carrying values shown in the Balance Sheet. No depreciation is charged on investment properties because their values are adjusted by means of the revaluation.

Other tangible fixed assets Other tangible fixed assets are capitalised and depreciated over their anticipated useful economic lives. The following annual rates of depreciation are used:

Property improvements 2% - 10% straight line basis Cathedral furniture and equipment 10% straight line basis Works department equipment and vehicles 20% straight line basis Office, shop, refectory and computer equipment 20% - 33% straight line basis

Heritage assets The Chapter is responsible for the care and maintenance of the Cathedral Church and its various furniture, ornaments, vestments and vessels. They consider that owing to their incomparable nature conventional valuation approaches lack sufficient reliability and that, even if valuations could be obtained, the costs would be onerous compared with the additional benefits derived by the Cathedral and users of the accounts. As a result, no value is reported for those assets in the Cathedral’s balance sheet. The cost of associated major repairs to the Cathedral Church is reported in the Statement of Financial Activities. Further information is given in Note 10 to the accounts. Investments Investments are carried at mid-market values quoted by the respective fund managers. Realised and unrealised gains and losses in the year are shown on the Statement of Financial Activities. Income from investments is accounted for on a receivable basis. Stock Stock consists of materials held by the works and glazing departments and goods for resale held by Salisbury Cathedral Enterprises Ltd. Work in progress relates to outside contracts. These are all valued at the lower of cost and net realisable value.


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Funds The funds of the Cathedral are classified according to their permitted usage as follows:

Endowment funds, whose capital cannot be spent, but the income from which may be used for either general or specific purposes

Restricted funds, whose capital and income are available for spending on specific purposes imposed by the original donor

Unrestricted funds, which are available for the general purposes of the Cathedral. These include amounts which have been designated for particular purposes by the Chapter but where the designation may be varied or removed in the future.

Incoming resources

Voluntary income and grants receivable, including donations, gifts and legacies are recognised when there is entitlement, certainty of receipt and the amount can be measured with sufficient reliability.

Charges in the course of mission and activities for generating funds are recognised as and when the related goods or services are provided.

Property and investment income is recognised on a receivable basis.

Lease premiums The majority of investment properties are subject to long-term leases for which a premium is charged on the grant of the lease. In accordance with the provisions of the Cathedrals Measure 1999 the lease premiums, less associated costs, are credited to endowed capital on receipt. The net proceeds are therefore shown as realised gains of the endowment funds in the year in which the lease premiums are received. Third party receipts and payments and donated goods and services When a third party pays for goods or services on behalf of the Cathedral the cost is shown as both income and expenditure in the Statement of Financial Activities. Similarly, donated goods and services are valued on an arm's length basis and shown as income and either capital or revenue expenditure as appropriate. No monetary value, however, is placed on the services provided by the many Cathedral volunteers. Legacies Legacies are included as income when it becomes reasonably certain that they will be received and the amount to which the Cathedral is entitled can be reliably ascertained. Where they are for specific purposes they are credited to the corresponding restricted fund. Repairs, restoration and maintenance of the Cathedral Expenditure on Cathedral repairs is charged in the Statement of Financial Activities as it is incurred. The costs of routine maintenance and work on the major repair programme are identified separately in notes to the accounts. Pension costs Pension scheme arrangements are operated on the basis of a defined contribution pension scheme on behalf of certain employees and one employee is a member of a defined benefit scheme. The assets of both schemes are held independently of the Cathedral. Contributions are charged to the Statement of Financial Activities in the period for which they are payable for both schemes. Taxation No corporation tax is chargeable as the Cathedral is a charity and its subsidiary companies surrender their profits to the Cathedral under Gift Aid. Income tax recoverable on donations and investment income is added to the corresponding net income. Value added tax Under the special rules applied by HM Customs and Excise the Cathedral is able to recover some of the VAT borne on its expenditure. Irrecoverable VAT is included within the support costs of the cost heading to which it relates.


16

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES

Note Unrestricted Restricted Endowment Total Total Funds Funds Funds 2014 2013 £000 £000 £000 £000 £000 ______ ______ ______ ______ ______ INCOMING RESOURCES 1 Voluntary income 1,419 1,616 468 3,503 2,358 Grants receivable 22 249 105 376 214 Charges in the course of mission 172 11 - 183 179 Activities for generating funds 1,123 1 - 1,124 1,110 Property and investments 528 109 - 637 777 Other income 72 23 - 95 129 ______ ______ ______ ______ ______ Total incoming resources 3,336 2,009 573 5,918 4,767 ______ ______ ______ ______ ______ COSTS OF GENERATING FUNDS 2 1,388 5 166 1,559 1,311 ______ ______ ______ ______ ______ EXPENDITURE ON MISSION 3 Ministry 676 304 - 980 992 Cathedral and precincts upkeep 821 663 12 1,496 1,465 Education and outreach 127 35 - 162 169 ______ ______ ______ ______ ______ 1,624 1,002 12 2,638 2,626 ______ ______ ______ ______ ______ GOVERNANCE COSTS 4 21 1 - 22 31 Total expenditure 3,033 1,008 178 4,219 3,968 ______ ______ ______ ______ ______ NET INCOMING RESOURCES 303 1,001 395 1,699 799 OTHER RECOGNISED GAINS AND LOSSES Investment properties:realised - - 56 56 60 Investment properties:unrealised - - - (73) Other properties: unrealised 9 - - 245 245 - Investments:realised - - 49 49 26 Investments:unrealised 8 - 6 1,014 1,020 1,334 Transfer Between Funds - (106) 106 - - ______ ______ ______ ______ ______ Net movement in funds 303 901 1,865 3,069 2,146 Balances at 1st April 2013 2,385 1,560 35,593 39,538 37,392 ______ ______ ______ ______ ______ BALANCES AT 31ST MARCH 2014 2,688 2,461 37,458 42,607 39,538 ______ ______ ______ ______ ______


17

CONSOLIDATED BALANCE SHEET Note Unrestricted Restricted Endowment Total Total Funds Funds Funds 2014 2013 £000 £000 £000 £000 £000 ______ ______ ______ ______ ______ FIXED ASSETS Investment assets Property 7 - - 9,755 9,755 10,226 Investments 8 1,382 1,457 15,716 18,555 16,625 ______ ______ ______ ______ ______ 1,382 1,457 25,471 28,310 26,851 Non-investment assets Property 9 - - 12,075 12,075 10,698 Other tangible assets 10 58 - - 58 53 ______ ______ ______ ______ ______ Total fixed assets 1,440 1,457 37,546 40,443 37,602 CURRENT ASSETS Stock 11 151 - - 151 154 Debtors 12 302 - - 302 608 Cash at bank and in hand 1,437 1,054 - 2,491 1,889 ______ ____ ______ ______ ______ 1,890 1,054 - 2,944 2,651 CREDITORS: Amounts falling due within one year 13 (642) - (88) (730) (655) ______ ______ ______ ______ ______ NET CURRENT ASSETS 1,248 1,054 (88) 2,214 1,996 ______ ______ ______ ______ ______ CREDITORS: Amounts falling

due after one year 14 - (50) - (50) (60)

______ ______ ______ ______ ______ NET ASSETS 2,688 2,461 37,458 42,607 39,538 ______ ______ ______ ______ ______ FUNDS Endowment funds 15 - - 37,458 37,458 35,593 Restricted funds 16 - 2,461 - 2,461 1,560 Designated funds 17 258 - - 258 259 General funds 17 2,430 - - 2,430 2,126 ______ ______ ______ ______ ______ 2,688 2,461 37,458 42,607 39,538 ______ ______ ______ ______ ______ Signed on behalf of Chapter: The Very Reverend June Osborne Jane Barker Dean Chairman, Finance Advisory Group Approved by Chapter: 25th July 2014


18

CATHEDRAL BALANCE SHEET Unrestricted Restricted Endowment Total Total Funds Funds Funds 2014 2013 £000 £000 £000 £000 £000 ______ ______ ______ ______ ______ FIXED ASSETS Investment assets Property - - 9,084 9,084 9,555 Other investments 1,382 1,332 13,688 16,402 14,514 ______ ______ ______ ______ ______ 1,382 1,332 22,772 25,486 24,069 Non-investment assets Property - - 12,074 12,074 10,698 Other tangible assets 40 6 - 46 45 ______ ______ ______ ______ ______ Total fixed assets 1,422 1,338 34,846 37,606 34,812 CURRENT ASSETS Stock 12 - - 12 14 Debtors 776 - - 776 1,098 Cash at bank and in hand 1,357 779 - 2,136 1,449 ______ ______ ______ ______ ______ 2,145 779 - 2,924 2,561 CREDITORS: Amounts falling due within one year 879 - 114 993 821 ______ ______ ______ ______ ______ NET CURRENT ASSETS 1,266 779 (114) 1,931 1,740 ______ ______ ______ ______ ______ CREDITORS: Amounts falling

due after one year - (50) - (50) (60)

______ ______ ______ ______ ______ NET ASSETS 2,688 2,067 34,732 39,487 36,492 ______ ______ ______ ______ ______ FUNDS Endowment funds - - 34,732 34,732 32,906 Restricted funds - 2,067 - 2,067 1,201 Designated funds 258 - - 258 259 Common account 2,430 - - 2,430 2,126 ______ ______ ______ ______ ______ 2,688 2,067 34,732 39,487 36,492 ______ ______ ______ ______ ______ Signed on behalf of Chapter: The Very Reverend June Osborne Jane Barker Dean Chairman, Finance Advisory Group Approved by Chapter: 25th July 2014


19

CONSOLIDATED CASH FLOW STATEMENT Note 2014 2014 2013 2013 £000 £000 £000 £000 _____________________ _______________________ Net cash flow from operating activities 18 1,437 135 Returns on investments Rents received net of expenses 132 161 Interest and dividends received 527 408 ______ ______ 659 569 ______ ______ 2,096 704 Capital expenditure and financial investment Purchase of investments (5,431) (1,816) Sales of investments 4,426 1,727 Additions to non investment property (1,144) - Sales of investment properties 527 417 Purchase of plant and equipment (35) (22) Loan repaid (10) (50) ______ ______ (1,667) 256 ______ ______ Increase in cash 18 429 960 ______ ______


20

NOTES TO THE CONSOLIDATED ACCOUNTS Unrestricted Restricted Endowment Total Total Funds Funds Funds 2014 2013 £000 £000 £000 £000 £000 1. INCOMING RESOURCES Voluntary income Congregational collections 224 2 - 226 232 Visitors 1,094 - - 1,094 1,026 Other donations 91 746 8 845 797 Friends of the Cathedral - 2 460 462 52 Cathedral Trust - 75 - 75 - Ivor Read Charity - 145 - 145 110 Legacies 10 646 - 656 141 ______ ______ ______ ______ ______ 1,419 1,616 468 3,503 2,358 ______ ______ ______ ______ ______ Grants receivable Church Commissioners - 138 - 138 138 English Heritage - - - - - Heritage Lottery Fund - 47 - 47 - Other grants 22 64 105 191 76 ______ ______ ______ ______ ______ 22 249 105 376 214 ______ ______ ______ ______ ______ Charges in the course of mission Facilities and other fees 138 11 - 149 145 Education centre 34 - - 34 34 ______ ______ ______ ______ ______ 172 11 - 183 179 ______ ______ ______ ______ ______ Activities for generating funds Flower Festival - - - - - Charges to visitors 98 - - 98 89 Shop, refectory and car park 901 - - 901 885 Masonry and glazing contracts 124 1 - 125 136 ______ ______ ______ ______ ______ 1,123 1 - 1,124 1,110 ______ ______ ______ ______ ______ Property and investments Property 271 39 - 310 315 Investments 257 70 - 327 462 ______ ______ ______ ______ ______ 528 109 - 637 777 ______ ______ ______ ______ ______ Other income Interest on short-term deposits 67 - - 67 106 Other income 5 23 - 28 23 ______ ______ ______ ______ ______ 72 23 - 95 129 ______ ______ ______ ______ ______ Total incoming resources 3,336 2,009 573 5,918 4,767 ______ ______ ______ ______ ______


21

NOTES TO THE CONSOLIDATED ACCOUNTS (continued) Unrestricted Restricted Endowment Total Total Funds Funds Funds 2014 2013 £000 £000 £000 £000 £000 2. COST OF GENERATING FUNDS Flower Festival - - - - - Cost of facilities for visitors 267 2 - 269 250 General marketing costs 97 - - 97 74 Appeals and fundraising expenses 142 1 - 143 74 Shop, refectory and car park 562 - - 562 548 Masonry and glazing contracts 120 - - 120 101 Property expenses 98 1 79 178 154 Support costs 102 1 87 190 110 ______ ______ ______ ______ ______ 1,388 5 166 1,559 1,311 ______ ______ ______ ______ ______ 3. EXPENDITURE ON MISSION Ministry Clergy stipends and expenses 22 140 - 162 158 Clergy housing costs 23 - - 23 20 Clergy support costs 38 - - 38 45 Services and music 445 164 - 609 613 Support costs 148 - - 148 156 ______ ______ ______ ______ ______ 676 304 - 980 992 ______ ______ ______ ______ ______ Cathedral and precincts upkeep Major repairs and restoration - 622 - 622 560 Maintenance and interior upkeep 513 23 - 536 520 Cathedral insurance 47 1 - 48 46 Little Paradise Development - - 12 12 90 Heritage Lottery Fund - 14 - 14 - Precincts security and garden upkeep 66 3 - 69 61 Support costs 195 - - 195 188 ______ ______ ______ ______ ______ 821 663 12 1,496 1,465 ______ ______ ______ ______ ______ Education and outreach Educational activities 82 20 - 102 109 Archives and library 1 - - 1 1 Charitable and other giving 26 15 - 41 45 Support costs 18 - - 18 14 ______ ______ ______ ______ ______ 127 35 - 162 169 ______ ______ ______ ______ ______ Total expenditure on mission 1,624 1,002 12 2,638 2,626 ______ ______ ______ ______ ______


22

NOTES TO THE CONSOLIDATED ACCOUNTS (continued) Unrestricted Restricted Endowment Total Total Funds Funds Funds 2014 2013 £000 £000 £000 £000 £000 4. GOVERNANCE COSTS Legal and professional fees 13 1 - 14 14 Advisory committees 3 - - 3 2 Strategic planning and restructuring 5 - - 5 15 _________ ________ ________ ________ ________ 21 1 - 22 31 _________ ________ ________ ________ ________ 5. STAFF NUMBERS AND COSTS The average weekly number of paid staff of all the entities included in the consolidated accounts was as follows: 2014 total 2013 total No’s FTE No’s FTE Cathedral and precincts 41 27 38 26 Visitors and education 35 16 35 15 Works and glazing departments 24 22 25 24 Administration 11 9 12 8 __ __ ___ __ 111 74 110 73 __ __ ___ __ The total staff costs of these persons were as follows: 2014 2013 £000 £000 Wages, salaries and stipends 1,805 1,698 166 Employer's national insurance 151 143 Employer’s pension contributions 77 71 _________ _________ 2,033 1,912 _________ _________ One member of staff received emoluments (excluding employer's pension contributions) of more than £60,000 during the year ended 31st March 2014. The Dean and the three Canons Residentiary were paid stipends (including the related pension provision) in accordance with scales set annually by the Church Commissioners, the Archbishop's Council and the Church of England Pensions Board. The stipends of the Dean and two Canons Residentiary are funded by the Church Commissioners. The amounts paid including employer national insurance during the year ended 31st March 2014 were as follows: Pension Stipend Contribution £ £ The Very Reverend June Osborne (Dean) 36,176 10,456 Canon E Probert (Chancellor) 29,889 8,365 Canon T Clammer ( Precentor) 27,881 8,365 Canon S Mullally (Treasurer) 28,356 8,713 These pension contributions are paid to the Church of England Funded Pensions Scheme. Full details of the Scheme are shown in note 19.


23

NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 6. AUDITORS' REMUNERATION The total remuneration of the auditors of all the entities included in the consolidated accounts was: 2014 2013 £000 £000 Audit services 15 14 ______ ______ 7. INVESTMENT PROPERTIES General Choristers' Endowment Endowment Fund Fund Total £000 £000 £000 Valuation at 1st April 2013 9,554 672 10,226 Disposals (471) - (471) Transfers from non-investment properties - - - Revaluation - - - ______ ______ ______ Valuation at 31st March 2014 9,083 672 9,755 ______ ______ ______ The properties which are currently held for investment purposes include 33 houses and 1 office within The Close and 2 houses situated elsewhere in Salisbury. All are held freehold and the majority are let on long tenant-repairing leases. The General Endowment Fund properties were valued at 31st March 2010 by Strutt & Parker LLP, Chartered Surveyors, on the basis of open market value. The Choristers Endowment Fund property, comprising the Cathedral School boarding house, was valued at 31st August 2008 by an independent chartered surveyor. 8. INVESTMENTS Unrestricted Restricted Endowment Total Funds Funds Funds £000 £000 £000 £000 MARKET VALUE At 1st April 2013 1,077 852 14,696 16,625 Additions 300 611 4,520 5,431 Disposals - (12) (4,365) (4,377) Increase/(decrease) in cash 5 - (149) (144) Revaluation - 6 1,014 1,020 ______ ______ ______ ______ At 31st March 2014 1,382 1,457 15,716 18,555 ______ ______ ______ ______ COST At 31st March 2014 1,365 1,426 13,031 15,821 At 31st March 2013 1,065 826 13,022 14,913 The market values comprise: Collective Cash investments on deposit Total £000 £000 £000 At 31st March 2014 15,601 2,954 18,555 At 31st March 2013 13,527 3,098 16,625


24

NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 9. NON-INVESTMENT PROPERTIES Little Shop and Staff Paradise refectory Offices Houses Total £000 £000 £000 £000 £000 COST OR VALUATION Valuation at 1st April 2013 - 877 1,204 9,494 11,575 Additions 1,144 - - - 1,144 Revaluation 245 - - - 245 Transfers to investment properties - - - - - ______ ______ ______ ______ ______ Valuation at 31st March 2014 1,389 877 1,204 9,494 12,964 ______ ______ ______ ______ ______ DEPRECIATION At 1st April 2013 - 877 - - 877 Charge for the year 12 - - - 12 ______ ______ ______ ______ ______ At 31st March 2014 12 877 - - 889 ______ ______ ______ ______ ______ NET BOOK VALUE At 31st March 2014 1,377 - 1,204 9,494 12,075 At 31st March 2013 - - 1,204 9,494 10,698 The offices and staff houses were valued at 31st March 2010 by Strutt & Parker LLP, Chartered Surveyors, on the basis of existing use value, apart from Wren Hall which was valued by an independent chartered surveyor on 31st August 2008. Wren Hall is owned by Salisbury Cathedral Choristers’ Endowment Fund and its valuation of £293k is included within the Offices valuation of £1,204k. 10. OTHER TANGIBLE FIXED ASSETS Workshop Shop and Building equipment Office refectory Cathedral improvements and vehicles equipment equipment inventory Total £000 £000 £000 £000 £000 £000 COST At 1st April 2013 102 194 324 54 276 950 Additions - - 25 10 - 35 - - Disposals - - - - - - - - - - ______ ______ ______ ______ ______ ______ At 31st March 2014 102 194 349 64 276 985 ______ ______ ______ ______ ______ ______ DEPRECIATION At 1st April 2013 102 172 315 53 255 897 Charge for the year - 7 7 2 14 30 On disposals - - - - - - ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ At 31st March 2014 102 179 322 55 269 927 ______ ______ ______ ______ ______ ______ NET BOOK VALUE At 31st March 2014 - 15 27 9 7 58 At 31st March 2013 - 22 9 1 21 53


25

NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 10. OTHER TANGIBLE FIXED ASSETS (continued) HERITAGE ASSETS NOT RECOGNISED IN THE BALANCE SHEET Construction of the Cathedral Church started in 1220 and it was dedicated in 1258. The spire and tower were added in c1330. The current Constitution of the Cathedral, drawn up under the terms of the Cathedrals Measure 1999, states that it is the responsibility of the Chapter to ensure that necessary repairs and maintenance in respect of the fabric of the Cathedral and its contents and monuments are carried out. The current major repair programme started in the 1980s and now approaching completion, is the latest in a series of repair programmes undertaken over the centuries. As a result of continuing repair and conservation of the Cathedral it has been possible for Christian worship to be maintained in it since 1258. The Cathedrals Fabric Commission for England (CFCE) was established by the Care of Cathedrals Measure 1990 to advise the administrative body of a cathedral church on the care, conservation, repair or development of the cathedral church, and also to consider and determine any application made to it by the Chapter. Under the same Measure all cathedrals appoint an architect to carry out certain statutory duties on behalf of the Chapter, in particular making an annual and quinquennial report on the condition of the fabric. CFCE require that an inventory of the Cathedral’s furniture, ornaments, vestments and vessels be maintained. This inventory contains no cost or valuation information. Particular items of note recorded are the Cathedral’s copy of the original 1215 Magna Carta; the oldest working mediaeval clock in the world; a glass prism by Lawrence Whistler; and a font designed by William Pye and installed in 2008, which was funded by donations. Acquisitions of heritage assets are made through purchase and donation and are intended to complement existing collections or enhance the liturgical life of the Cathedral. 2014 2013 £000 £000 11. STOCK Raw materials 29 34 Goods for resale 119 115 Work in progress 3 5 ______ ______ 151 154 ______ ______ 12. DEBTORS Trade debtors 145 218 Income tax recoverable 33 48 Investment income receivable 47 247 Other debtors 17 55 Prepayments 60 40 ______ ______ 302 608 ______ ______


26

NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 2014 2013 13. CREDITORS: amounts falling due within one year £000 £000 Unsecured loans 100 100 Bank overdraft 116 87 Trade creditors 236 143 Other creditors 38 33 Amounts due to the Friends of Salisbury Cathedral 15 15 PAYE and NIC 40 41 Accruals 102 143 Deferred income 83 93 _______ _______ 730 655 _______ _______ 14. CREDITORS: amounts falling due after one year Unsecured loan 50 60 (40) (50) _______ _______ 50 60 150 _______ _______ The loan was advanced during the year ended 31 March 2010 for the purpose of funding the Cathedral’s Social Justice programme. The loan is interest free and repayable over 10 years from 1st April 2010. 15. ENDOWMENT FUNDS Balance Transfers, gains Balance 1st April 2013 Income Expenditure and losses 31stMarch 2014 £000 £000 £000 £000 £000 Endowed capital 32,906 573 (178) 1,431 34,732 Prebendal Fund 32 - - 3 35 Choristers' Endowment Fund 2,279 - - 28 2,307 Choral Foundation 376 - - 8 384 ______ ______ ______ ______ ______ 35,593 573 (178) 1,470 37,458 ______ ______ ______ ______ ______ During the year the Cathedral used £503k from Endowment funds on the Little Paradise Project. This will be repaid over the period of 8 years. 16. RESTRICTED FUNDS Balance Transfers, gains Balance 1st April 2013 Income Expenditure and losses 31stMarch 2014 £000 £000 £000 £000 £000 Specific funds: General fabric legacy fund 818 1,154 (621) - 1,351 Specific legacy fund 270 571 (214) (103) 524 Willis organ fund 81 110 (9) - 182 Education fund 24 - (15) - 9 Prebendal fund 69 4 (3) 2 72 Choristers' Endowment 112 90 (82) - 120 Choral Foundation 178 80 (57) 1 202 Magna Carta Trust - - - - - Specific grants 8 - (7) - 1 ______ ______ ______ ______ ______ 1,560 2,009 (1,008) (100) 2,461


27

NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 16. RESTRICTED FUNDS (continued) Specific funds consist of unexpended donations and legacies for specific purposes, as follows: General fabric legacy fund: the repair and maintenance of the fabric of the Cathedral Specific legacy fund: various specific purposes including maintenance of the Cathedral and Close Willis organ fund: maintenance of the Willis organ in the Cathedral Education fund: the funding of educational activities Prebendal fund: to meet expenditure incurred by non-residentiary Canons and Lay Canons Choristers' Endowment: to fund the fees of boy choristers Choral Foundation: to promote and enhance church music in the Cathedral 17. UNRESTRICTED FUNDS Balance Surplus/ Gains/ Balance 1st April 2013 (deficit) (losses) Transfers 31stMarch 2014 £00 £000 £000 £000 £000 Designated funds: Cathedral interior development fund 31 - - - 31 Property repair reserve 15 - - - 15 General legacy fund 186 - - - 186 Library fund 27 (1) - - 26 ______ ______ ______ ______ ______ 259 (1) - - 258 General fund 2,126 304 - - 2,430 ______ ______ ______ ______ ______ 2,385 303 - - 2,688 ______ ______ ______ ______ ______ Designated funds consist of income that has been designated for the following purposes: Cathedral interior development fund: for improvements to the interior of the Cathedral Property repair reserve: for repairs to the secular properties General legacy fund: for identifying the capital element of legacies for general purposes Library fund: for the purchase of books for the Cathedral library General fund: the general accumulated fund of the Cathedral.


28

NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 18. NOTES TO THE CASH FLOW STATEMENT Reconciliation of net changes in resources to operating cash flow 2014 2013 £000 £000 Net change in resources before revaluations 1,699 799 Depreciation 42 36 Rents received (310) (315) Investment property expenses 178 154 Interest and dividends received (327) (462) Change in stocks 3 (12) Change in debtors 106 (58) Change in creditors 46 (7) __________ __________ Operating cash inflow 1,437 135 __________ __________ Reconciliation of net cash flow to movements in net funds Increase in cash 429 960 Loan repaid 10 50 __________ __________ Change in net funds 439 1,010 Net funds at 1st April 2013 4,739 3,729 __________ __________ Net funds at 31st March 2014 5,178 4,739 __________ __________ Analysis of net funds Balance Net cash Balance 1st April 2013 flow 31stMarch 2014 £000 £000 £000 Cash at bank and in hand: Unrestricted funds 1,121 316 1,437 Restricted funds 768 286 1,054 Endowment funds - - - ______ ______ ______ 1,889 602 2,491 Bank overdrafts (87) (29) (116) Investment deposits: Unrestricted funds 462 5 467 Restricted funds 408 - 408 Endowment funds 2,227 (149) 2,078 Debt due within one year (100) - (100) Debt due after one year (60) 10 (50) ______ ______ ______ 4,739 439 5,178 ______ ______ ______


29

NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 19. COMMITMENTS Capital expenditure There were no capital expenditure commitments at 31st March 2014 (2013: nil). Cathedral repair programme The Cathedral Church is currently undergoing a programme of major repairs which is being funded in part by the Cathedral Trust, other grant-making charities, and donations. The Cathedral's share of these works is funded by the general fabric legacy fund, the reserves of which are shown in note 16, and its common account. FRS17 pension disclosure

Salisbury Cathedral participates in the Church of England Funded Pensions Scheme and employs one

member of the Scheme out of a total membership of approximately 8,500 active members.

The Church of England Funded Pensions Scheme is a defined benefit scheme but Salisbury Cathedral is

unable to identify its share of the underlying assets and liabilities - each employer in that scheme

pays a common contribution rate. A valuation of the Scheme was carried out as at 31 December 2012.

This revealed a shortfall of £293m, with assets of £896m and a funding target of £1,189m, assessed

using the following assumptions:

An investment strategy of:

for investments backing liabilities for pensions in payment, an allocation to gilts, increasing

linearly from 10% at 31 December 2012 to 2/3 by 31 December 2029, with the balance in

return-seeking assets; and

for investments backing liabilities prior to retirement, a 100% allocation to return-seeking

assets.

Investment returns of 3.2% pa on gilts and 5.2% pa on equities;

RPI inflation of 3.2% pa (and pension increases consistent with this);

Increase in pensionable stipends of 3.2% pa; and

Post-retirement mortality in accordance with 80% of the S1NMA and S1NFA tables, with

allowance made for improvements in mortality rates from 2003 in line with the CMI 2012 core

projections, with a long term annual rate of improvement of 1.5% for males and females.

For schemes such as the Church of England Funded Pensions Scheme, paragraph 9(b) of FRS 17

requires Salisbury Cathedral to account for pension costs on the basis of contributions actually

payable to the Scheme in the year.

Following the results of the 2012 valuation, Salisbury Cathedral’s contribution rate is due to increase

from 38.2% to 39.9% of pensionable stipends from 1 January 2015 (of which 14.1% will be in respect of

the £293m shortfall in the Scheme and 25.8% is in respect of accrual of future benefits and the day-

to-day expenses of running the Scheme).

Contributions rates will be reviewed at the next valuation of the Scheme, due as at 31 December

2015.

Defined Contribution Pension Scheme. Employees of Salisbury Cathedral may enrol in a group personal pension scheme with Friends Life the assets are held separately from the Cathedral.


30

NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 20. SUBSIDIARY COMPANIES The consolidated accounts include the income, expenditure and net assets of the following 2 companies which are wholly owned by the Cathedral. In both cases figures relate to the year ended 31st March 2014. Salisbury Cathedral Salisbury Cathedral Works Department Ltd Enterprises Ltd £000 £000 Turnover 18 1,047 Expenditure 8 701 ________ ________ Net profit 10 346 Payments under Gift Aid Salisbury Cathedral 10 331 The Friends of Salisbury Cathedral - 15 ________ ________ Retained profit/(loss) - - ________ ________ £ £ Gross assets at 31.3.14 14 390 Net assets/(liabilities) at 31.3.14 - (1) Salisbury Cathedral Works Department Ltd is the trading arm of the Cathedral works department. It carries out outside contracts, principally repairs to historic buildings, on behalf of the works department. Salisbury Cathedral Enterprises Ltd operates the Cathedral shop and the car park, and receives commission from sales in the Cathedral Refectory restaurant which is operated by an independent catering company. It also carries out outside contracts, principally repairs to historic buildings, by the glazing department. 21. CONNECTED CHARITIES For the benefit of the Cathedral There are 4 charities whose objects are primarily or partially to support the work of the Cathedral but which are not controlled by the Chapter and whose accounts are therefore not included in these consolidated accounts. Summaries of their most recent accounts, insofar as they are for the benefit of the Cathedral, are as follows: Salisbury Cathedral The Friends of The Ivor Read Girl Choristers' Trust Salisbury Cathedral Charity Fund £000 £000 £000 £000 Year end: 31.3.14 31.3.14 5.4.14 31.8.13 (draft) (draft) Gross income 30 162 124 111 Net income before grants 29 120 119 110 Grants to or for the Cathedral 75 400 145 97 Gross assets 123 538 3,891 1,503 Net assets 122 501 3,854 1,502


31

NOTES TO THE CONSOLIDATED ACCOUNTS (continued) 21. CONNECTED CHARITIES (continued) The grants to the Cathedral shown above do not correspond exactly to the income shown in the Statement of Financial Activities due to timing differences in the recognition of grants. Salisbury Cathedral Trust is an independent charity whose objects are the furtherance of religion and education, in particular by giving priority to the repair and maintenance of Salisbury Cathedral. During the year, 2 of its 4 trustees were members of Chapter. The Friends of Salisbury Cathedral is a members' association whose object is to enhance the fabric, contents, work and worship of the Cathedral. It is an independent charity and is governed by its Executive Council which includes a member of Chapter. The Ivor Read Charity is an independent charity for the maintenance of the fabric of Canterbury and Salisbury Cathedrals in equal shares. During the year, 1 of its 4 trustees was a member of Chapter. The amounts quoted are the Cathedral’s 50% share of the Charity’s income and assets. The Salisbury Cathedral Girl Choristers' Fund is an independent charity whose objects are to pay bursaries for girl choristers at Salisbury Cathedral. During the year 1 of its 7 trustees was a member of Chapter. The grants shown were paid directly to the Cathedral School and are not shown in the Cathedral's accounts. Not for the benefit of the Cathedral The Chapter appoints the Governors of Salisbury Cathedral School, which is a company limited by guarantee of which the Cathedral as a corporation aggregate is the sole member. During the year the Cathedral received rent from the School of £78k under its lease of the School's premises and the Choristers' Endowment Fund received rent of £39k from the School under its lease of 57A The Close which belongs to that Fund. The Cathedral, the Choristers' Endowment Fund and the Choral Foundation paid £137k to the School in respect of choristers' bursaries and the Cathedral paid a further £30k to the School to pay expenses in relation to the choirs. These amounts are included in the cost of services and music. 22. OTHER RELATED PARTY TRANSACTIONS The 4 Principal persons were reimbursed with expenses totalling £6,022 (2013: £8,733).

Documents

REPORT AND ACCOUNTS - Salisbury Cathedral · 2016-10-03 · SALISBURY CATHEDRAL REPORT AND ACCOUNTS YEAR ENDED 31ST MARCH 2014 CONTENTS Page 1-2 Legal and administrative information