City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 1
The assets of the City Parochial Foundation derive from the
BRIEF philanthropy of the people of London. Around 1,400 separate
charitable gifts and bequests, some of them 400 years old, were
HISTORY held by the 112 parishes within the City of London, to be used for
the benefit of the churches or, more often, the poor of those
parishes. During the 19th century, the City grew to be a world
financial centre and the income of these charities, many endowed
with City properties, rose substantially. In contrast, the numbers of
beneficiaries fell. Some parishes had no residents at all.
On 10 August 1878, a Royal Commission was appointed to
investigate the parochial charities of the City of London. Its report
resulted in the City of London Parochial Charities Act, 1883. This
Act provided that the five largest parishes should continue to
manage their own charitable endowments, but that the bulk of the
remainder should be administered by a new corporate body, to be
known as the Trustees of the London Parochial Charities, with
perpetual succession and a Common Seal. The Act further
provided that the Charity Commissioners should prepare Schemes
for the proper application of these funds. It defined the area of
benefit as the City of London and the Metropolitan Police District
of London, the largest boundary definition available for Greater
London. The outcome was a Scheme promulgated on 23 February
1891 which brought all the endowments together into two funds, a
City Church Fund and a Central Fund. Together these constituted
the City Parochial Foundation, with the Trustees under the 1883
Act serving as the Foundation's Central Governing Body.
In 1986 the Foundation became the Trustee of the Trust for London.
At the outset the Trust was endowed with £10m derived from the
sale of the Greater London Council’s assets. It targets small locally
based community organisations which are independent of larger
The Foundation is governed by the 1891 Central Scheme and
various subsequent amending Schemes and orders.
At 1 January 2002 a single Common Investment Fund was
established to pool the investment assets of the Central and City
Church Funds and manage the endowment in a more effective and
The entitlement of the two participating funds in the Combined
Fund at 1 January 2002 was 60% Central Fund and 40% City
Church Fund, such proportions being settled by reference to the ten
year historical average of distributable income of each fund prior to
that date. The entitlement of the two funds may change over time.
By an Order of the Charity Commissioners dated 10 November
2003, the Foundation was authorised to adopt a “Total Return”
approach to the management of its investment portfolio. The
Foundation made this important change to enable it to exercise
more effectively its statutory duty to be even-handed in its
treatment of both present and future beneficiaries of the Foundation
and elected to initiate this approach with effect from 1 January
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 2
The Central Fund and the City Church Fund receive funds from the
ORGANISATION Combined Fund into their income funds. Use of income from the
OBJECTIVES Central Fund is restricted to the area of benefit. It cannot be used
for the advancement of religion but may be spent on furthering any
AND POLICIES charitable purpose which is directed to the assistance of poor
inhabitants in the area of benefit. The income may also be applied
to assist poor persons who are for the time being located within the
area of benefit. In furtherance of these objects, the Trustee makes
grants to charitable organisations or projects that work, directly or
indirectly, to benefit poor inhabitants of that area.
In 1992 the Foundation applied funds to the conversion of a
property to house the Resource Centre (London) Limited then
known as the London Voluntary Sector Resource Centre Limited at
356 Holloway Road, London N7. This branch of the Foundation is
itself a registered charity and is incorporated as a company limited
by guarantee. The objective of the Resource Centre is to provide
office accommodation, and meeting and conference facilities for
London voluntary sector organisations.
In 1997, the Foundation took direct control of Bellingham
Community Project Limited (then known as the Bellingham
Recreation Project Limited). The Project operates playing fields
owned by the Foundation in Lewisham, London SE6, and is
running a leisure and lifestyle centre on it for the benefit of the local
Income from the City Church Fund, apart from a number of minor
prepayments, is applied in the following proportions: one third is
given to the City churches within the City of London and two thirds
to the six Dioceses of the Church of England, in whole or in part
within the area of benefit, in such proportions as are determined by
the Church Commissioners. These proportions have always been
according to population. The purposes to which the City Church
Fund has to be applied are essentially religious including repairs to
churches, the maintenance of services and the payment of stipends.
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 3
The 21 governing body members are appointed by a variety of
GOVERNING nominating bodies and only four governing body members are
BODY directly appointed by the Trustee itself. Unlike many other grant
making trusts, it is guided neither by the spirit of a founder nor by
MEMBERS, family pride or ethos. It is more akin to a public body. The Trustee
is always concerned to take a long-term view, particularly important
OFFICERS AND in relation to property endowments, and to work to ensure that all
its activities benefit the poor of London. The governing body
ADVISERS members have an appropriate balance of skills and experience in the
field of estates and finance, as well as that of grant-making and
serve on five main Committees in order to ensure that the policies
of the Foundation are implemented and that the work is properly
A staff team, currently 14, works to the Trustee providing
appropriate input into the policy debates, and the means of
implementing all the decisions taken. In addition another 6 are
employed by the Resource Centre and two at the Bellingham
Whilst the more visible part of the Foundation’s work relates to
grant-making, the work of the financial and administrative staff is
equally important; any ineffectiveness in that area has the direct
consequence of reducing the money available to benefit the poor of
London. Efforts continue within the Foundation to develop the
staff team as a whole, emphasising the contribution that each and
every one makes to the ultimate purpose of the Foundation.
The advisers to the Foundation, namely the Solicitors, the Property
Investment Advisers, the Property Valuers, the Property Managing
Agents, the Investment Managers and the Auditors, play a vital role
in raising issues and in some cases working with the staff on
preliminary policy papers. The close collaboration between staff
and advisers is important in the light of the demands made upon the
voluntary sector through the Charities Act 1993 and other
accounting regulations including the Statement of Recommended
Practice – Accounting and Reporting by Charities (SORP 2000),
with which the financial statements comply. The more collaborative
the relationship between the Foundation and advisers, the more
effective the Foundation becomes.
Professor Gerald Manners ended eight years as Chairman of the
Central Governing Body in January 2004. Ms Maggie Baxter took
over as Chair, having been voted Chair-elect during 2003.
Professor Manners, who is remaining as a member of the governing
body, is thanked for his enormous contribution over the years as are
those governing body members stepping down from office in April
2005 being Professor Julian Franks, Charles Edward Lord, John
Barnes, Jyoti Munsiff and Albert Tucker.
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 4
The Trustees of The City Parochial Foundation Trustee (as at 13 May 2005)
The City Parochial Foundation Trustee’s governing body members are appointed by the following bodies:
The Crown Ms Maggie Baxter (Chair) A,E,F,G,I
Mr Tzeggai Yohannes Deres
Ms Elahe Panahi E,G
Mr Nigel Pantling (Vice Chairman) A,E,F,G,I
Mr Peter Williams A, G, F, I
Corporation of London Revd Dr Martin Dudley
Mr Robert Hughes-Penney G, I
Mr Ian Luder A,F,I
Church Commissioners The Archdeacon of London E, G
Mr Peter Dale A,E,F, G, I
Council of the University of London Mrs Gillian Roberts A,F
University College London Professor Gerald Manners A,E,I
City and Guilds of London Institute Mr Paul Wates
Bishopsgate Foundation Mr Miles Barber F,I
King’s College London Mr John Muir A,F,G
City Parochial Foundation Mrs Ingrid Posen G
Mrs Lynda Stevens E,G
Mr Neville Walton I
Ms Jane Wilmot F,G
Association of London Government Cllr. Raj Chandarana
Greater London Authority Ms Murziline Parchment F,G
All the governing body members are appointed on a five-year term by their nominating body. Their period of
appointment commences on 4 April.
Key to Committees
A Asset Allocation Committee E Estate Committee
G Grants Committee F Finance & Resources Committee
I Investment Committee
Clerk Mr Bharat Mehta Director of Finance and Administration Miss Carol Harrison
Principal Officer (Grants) Mr Mubin Haq Principal Officer (Programmes & Evaluation) Ms Sioned Churchill
Solicitors Farrer & Co, 66 Lincoln’s Inn Fields, London WC2A 3LH
Property Investment CB Richard Ellis, 64 North Row, London W1K 6DA (until 31 December 2004)
Advisers BH2, 15 Basinghall Street, London EC2V 5BR (from 1 January 2005)
Property Managing Agents Allsop Commercial Management Limited, 1 Great Cumberland Place, London
W1H 7AL (from 1 January 2005)
Property Valuers Cluttons, 26-28 Albion Place, Maidstone, Kent, ME14 5DZ
Auditors KPMG LLP, 8 Salisbury Square, London EC4Y 8BB
Bankers Lloyds TSB Bank plc, Public and Community Sector, 25 Gresham Street, London
Investment Managers RCM (UK) Ltd, 155 Bishopsgate, London EC2M 3AD
S G Asset Management UK Limited, 100 Ludgate Hill, London EC4M 7NL
Veritas Asset Management (UK) Limited, Elizabeth House, 39 York Road,
London SE1 7NQ
Morley Fund Management, 1 Poultry, London EC2R 8EJ
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 5
The charity’s investment powers are governed by a Scheme sealed
INVESTMENT on 16 September 1988.
POWERS The investment powers of the charity apply to both funds. All
investments acquired by the Foundation have been acquired in
accordance with these powers.
TOTAL Over at least two decades at the end of the 20th Century, the
Foundation saw the value of its Endowment Fund grow much faster
RETURN than the Retail Price Index, while the increase in its investment
income failed to keep pace. The impact on the Foundation’s
beneficiaries was to put those seeking grants at a disadvantage
compared to future beneficiaries, contrary to the Foundation’s
statutory duty to maintain an even-handed approach. The Foundation
therefore determined to apply to the Charity Commission for
permission to change to a “Total Return” approach to the recognition
The Total Return approach enables the charity to supplement its
investment income with a proportion of the capital gains that have
accumulated. To do so, the Foundation is required to identify the
“Unapplied Total Return", that is the proportion of its assets in
excess of the endowment uplifted for the effects of inflation. The
Foundation selected 31 December 1942, the earliest date on which
all property owned by the Foundation was valued, as the basis for
The Foundation then considered the proportion of the Unapplied
Total Return that should be retained to cover future possible
reductions in the endowment fund caused by adverse market
conditions conscious that should the Unapplied Total Return be
exhausted then grant distribution would have to stop. From the
balance, it decided to allocate up to £2 million for grant making for
each of the four years beginning 1 January 2003 (adjusted for
inflation), subject to annual confirmation by the Asset Allocation
At 1 January 2004 the Unapplied Total Return stood at £70 million.
At the year end, the Unapplied Total Return stood at £80.0 million
In reaching these decisions the Foundation has sought professional
advice from its investment managers and property advisers. The
governing body itself includes individuals with experience and skills
in both investment and financial matters. The Trustee’s objective
remains to keep the value of the endowment and the income
available for grant giving constant in real terms using the Retail
Price Index as the benchmark.
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 6
A chart showing the movement in the Unapplied Total Return is
City Parochial Foundation - Total return
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Total fund RPI-ed Endowment fd
REVIEW OF Incoming Resources
ACTIVITIES Income from investment properties represented 54% of the
Foundation’s incoming resources. The total income from
DURING THE investment properties rose from £4,958,923 in 2003 to £5,110,436 in
Bank and other interest rose to £912,690 in 2004 from £869,276 in
2003. Income from listed investments rose from £1,868,691 in 2003
to £1,898,440 in 2004. The increase in bank and other interest
related to a continued holding of cash and rising interest rates. The
equity income was partly offset by the tapering of tax relief, which
ended in March 2004.
The Foundation is very pleased to have received £649,023 from the
Clothworkers’ Foundation in respect of its share of capital on the
winding up of the William Heron Trust.
A commentary on the Resource Centre’s and the Bellingham
Community Project’s activities is given below.
Cost of generating income
Expenditure on generating income was £788,035 (2003: £704,130).
This includes property management costs of £368,910 (2003:
£333,994) and investment management costs of £237,512 (2003:
£191,462). The latter costs are based on the value of the investment
portfolio. Of these management charges, £194,367 (2003:
£174,646) has been charged against the endowment funds as relating
to those funds.
Total grants payable in the year were £8,713,550 (2003:
£8,885,960). Of this amount £5,058,855 (2003: £5,092,005) was
payable from the Central Fund and £3,654,695 (2003: £3,793,955)
was payable from the City Church Fund.
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 7
Grants made from the Central Fund
2004 is the third year of the present quinquennium 2002-2006 during
which the Foundation is allocating grants with the following
• Organisations providing advice, information and
• Organisations developing, promoting and providing
education, training and employment schemes;
• Organisations that are attempting to develop initiatives that
tackle violence and hate crimes against the target groups.
The Foundation also appreciates the importance of back up or
development work for the voluntary sector and funds the following:
• Core Costs and Management Costs;
• Policy Change;
• Second Tier and Infrastructure Organisations;
• Collaborative responses.
• Alliance Funding
The Foundation also has a Small Grants programme and may
provide continuation funding for work funded by itself under the
previous quinquennial policy.
An analysis of grants made from the Central Fund in 2004 other
than that to Bellingham is shown in the chart below:
The Analysis of Grants by Category
Quinquennial Categories 2004
Collaborative Needs Grants
Work 1% 1% Advice and Information and
1% Individual Advocacy
Second Tier and Infrastructure Foundation's
Schemes to Reduce/Tackle Education, Training and
Violence/Hate Crimes Employment Schemes
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 8
The policy of making mainly revenue grants was continued with
99% of the grants falling into this category.
The boroughs receiving more than £100,000 of grant money were:
Barking and Dagenham, Brent, Camden, Ealing, Hackney,
Islington, Lambeth, Lewisham, Newham, Redbridge, Southwark,
Sutton, Tower Hamlets and Westminster.
An analysis of the number of grant applications received and of
grants made from the Central Fund is published in the Annual
Grants Review which is available from the Clerk on request.
A reconciliation of grants shown in that publication is given below:
Grants detailed in
Grants Review 5,347,023 5,229,234
Grants written back (216,593) (135,431)
Other (71,575) (1,798)
Net Central Fund grants 5,058,855 5,092,005
No. of grants made 202 189
The Foundation and Trust were winners of the best Grant maker
category at the 2004 Charity Awards.
Grants made from the City Church Fund
The Foundation divides the income from this fund between the
Church Commissioners, the six Metropolitan Dioceses and the City
Churches Grants Committee in accordance with the City Parochial
Foundation’s governing instruments. One third of the income is
allocated to the City churches and, after a contribution of £67,775
towards prior charges made by the Church Commissioners, two
thirds of the income is payable to the six Dioceses in the
proportions listed below:
London 44.37 Rochester 6.18 Chelmsford 15.30
Southwark 29.05 Guildford 2.27 St Albans 2.83
As given in note 6, the grants payable from the City Church Fund
Church Commissioners and
Dioceses 2,436,463 2,529,303
City Churches Grants Committee 1,187,092 1,233,512
Schedule VII payments to City
Churches 31,140 31,140
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 9
Schedule VII payments are historic fixed payments to the Church
Councils of certain of the City Churches that form a first call on the
monies available to the City Churches Grants Committee.
The Foundation allocates funds to the salaries and assisted costs of
employing a team of grants staff and their assistants. It is the
Foundation’s view that proper assessment and monitoring of
charitable priorities in London cannot be achieved without this
work, particularly the visits to all grant applicants not carried out by
the majority of other grant makers. In addition the Foundation
employs consultants to help, support and make more effective the
grants made from its Central Fund. The costs of such work and a
representative proportion of overheads are charged to Support costs.
As a percentage of gross income, support costs amounted to 8%
Management and administration
Expenditure on Management and Administration was £234,765
These costs have been split across the various headings under
The Foundation has decided not to split realised and unrealised
gains on listed investments, as allowed by the Charity Commission.
THE RESOURCE The performance of the Resource Centre, a subsidiary of the
Foundation, is shown within the Restricted Funds of the charity.
Some 2,700 organisations used the Centre during the year and the
conference facilities remain in high demand.
The accounts of the Resource Centre show incoming resources of
£967,883 (2003: £929,684) and resources expended of £854,734
(2003: £846,613) making net incoming resources £113,149 (2003:
£83,071), after payment of £284,109 (2003: £283,851) to the
Foundation as rent for the premises.
The full statutory accounts of the Resource Centre are available
from the Clerk to the Foundation at 6 Middle Street, London EC1.
The Foundation owns property in Lewisham, London SE6. The
BELLINGHAM Bellingham site comprises a 12 acre playing field. The playing
fields are the direct responsibility of the Foundation through its
COMMUNITY subsidiary, the Bellingham Community Project Limited, a
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 10
PROJECT The Project had net incoming resources of £353,225 (2003:
£4,384,533) after receipt of grants of £62,510 (2003: £1,250,121)
LIMITED from the Foundation. The Project is overseeing the running of a
leisure and lifestyle centre on the site for the benefit of the local
community. The Centre opened at Easter 2004 and is managed on a
day-to-day basis by Greenwich Leisure Limied.
The principal funders of this £4 million building were Sport
England, the Foundation itself and Lewisham Borough Council.
Bellingham Community Project Management Company Limited, a
wholly owned subsidiary of the Project, did not trade during the
year (2003: nil).
The results of the Project are incorporated in these Financial
Statements as a branch of the Foundation as defined by SORP
Accounting and Reporting by Charities.
There are no restrictions on the Foundation’s power to invest.
The Foundation’s permanent endowment requires the Foundation to
POLICY preserve the capital value of its investments in real terms whilst
maximising the income available to its beneficiaries without taking
The Foundation has adopted a Total Return Approach. As a result,
investment decisions can be made without regard to whether any
particular asset or class of assets generates income rather than
capital growth. Paying due regard to investment risks, the
Foundation’s investments are managed with a view to maximising
their total return, consistent with maintaining an appropriate level of
The Central Governing Body retains the Foundation’s overall
power of investment but has delegated investment powers to the
Foundation’s Asset Allocation, Investment and Estate Committees.
The Asset Allocation Committee considers and determines into
which markets it is prepared to invest and the proportional target
share of asset classes including property, property unit trusts,
equities, gilts and cash. Investment in any hedge instruments,
derivatives, foreign currencies, warrants or other leveraged
securities or investments would require the specific approval of the
The Foundation’s Estate Committee oversees the property portfolio
and the Investment Committee oversees equities, bonds and cash.
Both the Investment and Estate Committees in turn have delegated
authority to appoint, monitor and, if necessary, dismiss the
Foundations’ Investment Managers, Property Investment Advisers,
Property Valuers and Property Managing Agents. Both committees
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 11
establish with their advisers the objectives for their particular
portfolios and set appropriate benchmarks and other criteria against
which performance can be evaluated. Meetings with the relevant
advisers and managers are held at regular intervals to review market
conditions and performance against benchmarks. The suitability of
the managers and advisers is reviewed every five years.
The Asset Allocation Committee has delegated authority to make
ASSET decisions regarding the medium and longer-term objectives of the
Foundation’s investment policies, and to set the short and medium
ALLOCATION term objectives of the Investment and Estate Committees.
The Foundation decided some years ago to reduce the amount of
property held by itself over time from its historic base of 100% in
City of London property to a level that permitted proper
diversification in other asset classes, to provide for more consistent
returns and balanced risks. The Committee has overviewed this
process and set the following targets to achieve by 31 December
• 35 to 45 per cent property including property unit trusts
• 35 to 45 per cent equities
• 10 to 20 per cent cash and gilts
whilst maintaining a directly managed property portfolio of
between £62 and £77 million at December 2002 values.
The Asset Allocation Committee has reviewed the asset mix of the
Foundation’s portfolio half-yearly in order to monitor the progress
of the Investment and Estate Committees in moving towards the
agreed asset allocation targets.
City Parochial Foundation's
investment assets at 31 December 2004
Cash & gilt portfolio
As the following pie chart shows, this target had been achieved by
31 December 2004: Cash & gilts within equities
Property Unit Trusts
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 12
INVESTMENT During the year, CB Richard Ellis Limited (formerly CB Hillier
Parker Limited) managed the property portfolio on a non-
PROPERTIES discretionary basis and were set targets to reduce the size of the
Foundation’s portfolio in absolute terms, as opportunities arise; to
diversify the nature of the portfolio; and to increase the yield of the
portfolio to a level that is more consistent with the Investment
Property Databank norm.
The investment property portfolio was valued at 31 December 2004
by Cluttons. This has been shown in the accounts at an open
market value of £72,817,140 (2003: £65,418,686). Following a
property disposal in the year with proceeds of £2.05 million
showing a realised gain of £0.5 million, the remaining portfolio
showed an unrealised gain of £8.9 million. Based on this valuation,
the results for this year showed a positive total return of 25.8%,
which compares to an IPD UK annual index total return of 18% and
a negative total return of 6.0% for the previous year. This high
performance was almost entirely due to the concentration of the
portfolio on a single sector, City of London offices. So long as the
Foundation maintains a preponderance of property in the City the
performance of the portfolio will reflect the volatile economic
performance of the financial companies located
The Foundation’s progress in achieving its objectives for its
property portfolio is summarised in the table below:
Position as at 31
December 2001 2002 2003 2004
Portfolio value £86.5m £76.2m £65.4m £72.8m
% in Central London 81% 78.5% 79% 82%
Annual income £5.5m £5.3m £5.0m £4.9m
Income yield 5.6% 6.0% 7.0% 6.6%
CB Richard Ellis came to the end of their five year appointment on
31 December 2004 and did not wish to be reappointed. BH2 were
appointed from 1 January 2005 after a tendering process. Allsop
Commercial Management Limited were appointed to manage the
operational aspects of the portfolio.
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 13
INVESTMENT The Foundation holds units in the Falcon Property Unit Trust as
part of its strategy of diversification away from City of London
PROPERTY UNIT properties. These had a value of £3,803,668 (2003: £3,466,714).
The aim is to out perform the IPD UK annual index. The total
TRUSTS return has been 16.0% (2003: 11.5%) against the IPD UK annual
index of 18.3% (2003: 10.9%).
INVESTMENTS The Foundation employs the services of four investment managers.
They are set targets to outperform or match set benchmarks over
rolling three year periods.
RCM (UK) Ltd manages part of the assets of the Combined Fund
through passive index tracking Common Investment Funds. The
portfolio thus replicates the performance of relevant market indices
for different asset classes and aims to match the performance of the
WM Charity Fund Index (ex property) for the portfolio as a whole.
The total return for the year has been 11.1% (2003: 17.5%) and has
been in line with the tracking benchmark.
The market value of the passive endowment held as listed
investments including uninvested cash rose to £29,844,426 as at 31
December 2004 from £27,550,073 at 31 December 2003 in line
with improved market conditions.
SG Asset Management UK Limited manages listed investments of
the Combined Fund on a discretionary basis with a mandate to
actively outperform the FTSE, S&P, Topix and Saloman Bros.
indices over given asset classes by one per cent (net of fees). The
total return for the year has been 9.4% against a benchmark of
10.7% (2003: 20.5% against a benchmark of 18.1%). Veritas Asset
Management (UK) Limited manages a smaller fund on a
discretionary basis and had a slightly more ambitious mandate to
actively outperform the Global FT World Enquity Index by two per
cent (gross of fees). The total return has been 9.4% against a
benchmark of 8.2% (2003: 10.3% against a benchmark of 20.4%).
The market value of the active listed investments including
uninvested cash rose to £43,619,033 at 31 December 2004 from
£40,877,601 at 31 December 2003.
The Foundation also invests liquid funds in the money market. At
the year end £20,590,846 of Combined funds were held in a cash
portfolio which was managed by Morley Fund Management.
Morley’s objective was to outperform the three month London
Interbank Bid Rate (LIBID) by 0.75 per cent (net of fees), given a
maximum allowable portfolio duration of three years. The total
return for the year has been 4.60% against a benchmark of 4.63%
(2003: 3.45% against a benchmark of 3.69%).
TRUST FOR The Trust for London is a charity connected to the Foundation but
whose accounts are not consolidated with the Foundation. It was
LONDON formed in 1986. It has an expendable endowment fund which at 31
December 2004 stood at £16 million. This fund produced an
income of £576,119 in 2004 (2003: £630,969). Grants are applied
to projects which target small locally based community
organisations with charitable purposes and which are independent
of larger bodies.
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 14
EVENTS Since the end of the year the Foundation has sold two properties
with proceeds of £8.9 million and a profit of £1.1 million.
ACCOUNTING There were no changes in accounting policies.
RESERVES It is the Foundation’s policy not to maintain any unrestricted
Law applicable to charities in England and Wales requires the
GOVERNANCE Trustee to prepare financial statement for each financial year which
give a true and fair view of the state of affairs of the charity and of
AND INTERNAL the group at the end of the year and of its financial activities during
the year. In preparing those financial statements the Trustee is
CONTROLS required to:
• select suitable accounting policies and then apply them
• make judgments and estimates that are reasonable and
• state whether applicable accounting standards and
statements of recommended practice have been followed,
subject to any material departures disclosed and explained
in the financial statements;
• prepare the financial statements on the going concern basis.
The Trustee has overall responsibility for ensuring that the charity
has appropriate systems of control, financial and otherwise. It is
responsible for keeping accounting records which disclose with
reasonable accuracy at any time the financial position of the charity
and which enables it to ensure that the financial statements comply
with the Charities Act 1993 and have been properly prepared in
accordance with the Central Scheme approved by Her Majesty in
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 15
Council on 23 February 1891 and subsequent amending Schemes
and orders. It has general responsibility for taking such steps as are
reasonably open to it to safeguard the assets of the charity and to
prevent and detect fraud and other irregularities.
The systems of control are designed to provide reasonable, but not
absolute assurance against material misstatement or loss. They
• an annual budget approved by the Trustee;
• regular consideration by the Trustee of financial results,
variance from budgets, non-financial performance
indicators and bench marking reviews;
• delegation of authority and segregation of duties;
• identification and management of risks.
The Foundation has, with advice from its auditors, introduced a
formal risk management process to assess business risks and
implement risk management strategies. This involved identifying
the types of risks it faces, categorising them in terms of potential
impact and likelihood of occurrence, and identifying means of
mitigating the risks. As part of the process the Foundation has
reviewed the adequacy of the Foundation’s internal controls.
By order of the Trustee
Ms Maggie Baxter
13 May 2005
City Parochial Foundation Trustee’s Annual Report and Consolidated Financial Statements 2004 page 16
REPORT OF We have audited the financial statements on pages 17 to 29.
THE This report is made solely to the charity’s trustee in accordance with section
43 of the Charities Act 1993 and regulations made under section 44 of that
Act. Our audit work has been undertaken so that we might state to the
INDEPENDENT charity’s trustee those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by
AUDITORS TO law, we do not accept or assume responsibility to anyone other than the
charity and the charity’s trustee for our audit work, for this report, or for the
THE TRUSTEE opinions we have formed.
Respective responsibilities of Trustee and Auditors
OF THE You are responsible as the Trustee for preparing the trustee’s report and, as
described on page 14, the financial statements in accordance with applicable
CITY United Kingdom law and accounting standards. Our responsibilities, as
independent auditors, are established in the United Kingdom by Statute, the
PAROCHIAL Auditing Practices Board and by our profession’s ethical guidance.
We have been appointed as auditors under section 43 of the Charities Act
FOUNDATION 1993 and report in accordance with regulations made under section 44 of
that Act. We report to you our opinion as to whether the financial
statements give a true and fair view and are properly prepared in
accordance with the Charities Act 1993. We also report to you if, in our
opinion, the trustees’ report is not consistent with the financial statements,
if the charity has not kept proper accounting records or if we have not
received all the information and explanations we require for our audit.
We read the other information accompanying the financial statements and
consider whether it is consistent with those statements. We consider the
implications for our report if we become aware of any apparent mis-
statements or material inconsistencies with the financial statements.
Basis of opinion
We conducted our audit in accordance with Auditing Standards issued by
the Auditing Practices Board. An audit includes examination, on a test
basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and
judgments made by the Trustee in the preparation of the financial
statements, and of whether the accounting policies are appropriate to the
charity’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial
statements are free from material mis-statement, whether caused by fraud
or other irregularity or error. In forming our opinion we also evaluated the
overall adequacy of the presentation of information in the financial
In our opinion the financial statements give a true and fair view of the
charity and group’s state of affairs, as at 31 December 2004 and of their
incoming resources and application of resources, in the year then ended
and have been properly prepared in accordance with the Charities Act
8 Salisbury Square
London EC4Y 8BB
13 May 2005
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