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  1. 1.             Charity No. 249986 Reports & Financial Statements   For the year ended 31 December 2007     Crosslinks Mazars LLP Times House, Throwley Way Sutton, Surrey, SM1 4JQ
  2. 2. Crosslinks Charity information Registered charity number 249986 President Rev. Dr. C. Wright General Secretary Rev. Canon A. Lines Deputy Miss J Horsman Operations Director Giles Rawlinson General Council Committee Membership Trustees Rev. M. Payne Chair Mrs. E. Clift Vice Chair Mr A. Muwowo Mission Personnel Rev. C. Blair Mission Personnel Brigadier I. Dobbie (appointed June 2007) Church Partnerships Rev M. Lacy (appointed June 2007) Mission Personnel Rev. B. Kerr Ireland Rev. G. Kovoor Mission Resources Rev L. Jesudason (appointed June 2007) Church Partnerships Rev. S. Smallwood Church Partnerships Mr. D. Batchelor Treasurer(appointed June 2007) Mission Resources General Synod Rev. J. Cook Church Partnerships (not Trustee) The General Secretary and Deputy are also non-voting members of General Council with other senior staff present by invitation. 1
  3. 3. Crosslinks Charity information (continued) Principal address 251 Lewisham Way London SE4 1XF Bankers Lloyds TSB Bank Plc 1 Butler Place PO Box 132 Coxton Street London SW1H 0PR Allied Irish Bank 40-42 Ranelagh Dublin 6 Royal Bank of Scotland Victoria Branch London SW1 Northern Bank Donegall Square North Belfast Auditors Mazars LLP Times House Throwley Way Sutton Surrey SM1 4JQ Solicitors Lewis & Dick 443 Kingston Road Ewell Surrey KT19 0DG Investment advisors UBS Wealth Management (UK) Limited 1 Curzon Street London W1J 5UB Brewin Dolphin Securities Limited 12 Smithfield Street London EC1A 9BD 2
  4. 4. Crosslinks Trustees’ annual report for the year ended 31 December 2007 The trustees are pleased to present their report together with the financial statements for the year ended 31 December 2007. Structure, governance and management The charity is governed by a TRUST DEED dated 18th October 1928 and a constitution adopted on 16th September 1946 and updated in 2003 following an independent professional report on the charity structure. Anyone can be a Member of Crosslinks if prepared to sign the Society’s Basis and Statement of Faith and signifying support the Society by prayer and gifts for at least a year. The number of Members in June 2008 was 1,151 (May 2007 – 1,231). The Board of Trustees (known as the General Council) is elected annually by members of the society by postal vote immediately prior to the society’s Annual Meeting of Members normally held in June (September 2008). The number of trustees was reduced from 16 in 2006 to a maximum of 13 in June 2007. Trustees are appointed for a period of three years and can be re-elected for a further three years but there must be a minimum gap of one year before being eligible for a further appointment. No-one who has reached the age of 70 is eligible for election to the Board. Profiles of members standing for election are sent to all members prior to the Annual Meeting of Members. The Board have the option to co-opt up to four members in addition to the eight elected members and care is taken to ensure there is a balance of skills and representation on the Board. During the year various aspects of the activities of the society are presented to the Trustees so they gain a more in-depth appreciation of them. All Trustees are required to serve on one of the four sub-committees of the society shadowing the four teams being Church Partnerships, Mission Personnel, Mission Resources and Ireland Teams. The Trustees meet four times a year. There is also a standing committee made up of Chair, Vice Chair and all the Chairs of the sub-committees (and the Treasurer if not already included) and they also meet four times a year. The Board of Trustees is responsible for the strategy and direction of the society, guarding its doctrinal position in the Christian world and monitoring performance on a regular basis. During 2007 the Trustees received a Governance review, including recommendations on a range of matters including Trustee induction and training and the introduction of new computer systems. Progress on the work arising from the review was slower than expected due to staff illness, absence and an early retirement. In the light of these setbacks, further review of the operations of the Society was initiated in the last quarter of the year and a Steering Committee was appointed to take particular responsibility for overseeing the implementation of the changes identified by the review. In June 2008 an Operations Director was appointed with all administrative functions now reporting to him. The General Secretary is not a Trustee but attends all General Council and Standing Committee meetings. He, with the assistance of his staff, is responsible for the day to day running of the society within the policies set by the Board of Trustees. 3
  5. 5. Crosslinks Trustees’ annual report for the year ended 31 December 2007 (continued) Responsibilities of the trustees Charity law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of Crosslinks as at the balance sheet date and of its incoming resources and application of resources for the financial year. In preparing those financial statements, the trustees are required to: • select suitable accounting policies and then apply them consistently; • make judgements and estimates that are reasonable and prudent; • 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, and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that Crosslinks will continue in operation. The trustees are responsible for maintaining proper accounting records which disclose with reasonable accuracy at any time the financial position of Crosslinks and to enable them to ensure that the financial statements comply with the Charities Act 1993 and the Statement of Recommended Practice (SORP) 2005. They are also responsible for safeguarding the assets of Crosslinks and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Objectives and activities In accordance with our Distinctive Statement and Vision Statement 2005-2015 our eight main objectives for 2007 and activities were: 1. Rigorously apply our priorities of evangelistic opportunities and training trainers across all programmes. 2. Strategise within regions and countries 3. Develop Schools of Biblical Training (SBTs). 4. Develop Short-term programmes. 5. Develop the Study Partner (BEST) programme. 6. Assist indigenous mission endeavours 7. Promote active engagement in mission amongst UK and Irish churches 8. Run a balanced budget. Achievements and performance against Objectives 1. The priorities have been applied across short and long term personnel selections as well as the January and July study partner and the July grants/project meetings. 2. During 2007 work was conducted on strategy papers for India, Europe, and South East Asia, papers on South Africa and China were completed and the Myanmar and Africa strategies were featured in the Crosslinks magazine. 3. A fourth year SBT with the largest team so far, was conducted in Myanmar. A second SBT was run in the refugee camps in Western Thailand. Planning was carried out for a further SBT in early 2008 in Myanmar with an emphasis on equipping national facilitators and with further non-Western participation and one booked for mid 2008 in Nigeria. A meeting was held in November to co- ordinate this work with other groups such as Langham Partnerships International. Crosslinks materials for SBTs were simplified, translated (Burmese and Karen) and produced. 4
  6. 6. Crosslinks Trustees’ annual report for the year ended 31 December 2007 (continued) 4. A new Smile (18-30) age group was organised for Uganda and plans put in motion for South Africa.13 Next volunteers went to Tanzania, Uganda, Serbia, Thailand and Ethiopia. One church team was facilitated in Mozambique. Promotion of these programmes in paper, virtual and verbal forms was carried out in Cheltenham Bible Festival, 9:38 network, CPAS Venture Leaders, former Smile volunteers, conference brochures and in churches around the country. 5. A 10% increase was made to the study partner budget and profiles produced of sponsored students for website, churches and individuals. Work was initiated on developing continuing links with study partners. Selection procedures were modified with a revised application form, tightening criteria for married students and according to the two fundamental priorities. 6. A range of new projects and project partners were taken on including new ventures in Bolivia and India in addition to continued ventures elsewhere. Payment of pledged money was carried out more regularly than previously. 7. An annual conference for the affiliated church planters was carried out in September in Sheffield and a church planter was appointed for the Dublin area. Teaching of mission has carried out in the Cheltenham Bible festival as well as at Oak Hill and Wycliffe Hall theological colleges as well as in churches in Britain and Ireland. The appointment of new local leadership for the Ireland team began to have an effect in the final quarter of 2007. This objective was not achieved but progress was made in the following areas: a. Greater co-ordination of efforts in developing partnerships for mission partners. b. Churches in Britain and Ireland were encouraged to become formal stakeholders. c. Greater emphasis was placed on developing suitable profiles fro mission personnel to take to churches and individuals. d. A campaign to increase membership was begun and updates for members included in financial updates. e. Ireland data was added to the central database allowing greater co-ordination. f. An assistant to the Individual Support Development Manager was appointed. g. Some churches have now been encouraged to give directly to central costs. Financial review Incoming resources were £2,444,848 being £113,221 lower than those received in 2006 of £2,558,069. Donations from individuals amounted to £1,101,578, an increase of 18.8% over 2006 (£927,038), donations from churches of £927,857 showed a decrease of 9.4% compared to 2006 (£1,025,248). This year we received a grant from the Irish Government (Irish Aid) for Communities of £181,277. The grant is over three (3) years and has a total value of € 379,831 (£260,823). Legacies received in the year amounted to £128,745 (2006: £215,416). Expenditure was in line with our budget and amounted to £2,662,694, being £113,417 lower than that incurred in 2006 of £2,776,111. Net outgoing resources before pension costs and other recognised gains & losses are £217,846 compared to £218,042 in 2006. The cost of the increase in pension liability of £113,100 (2006: £56,700) is net of £102,939 (2006: £98,051) cash payments to pensioners. However there were investment gains from revaluation at 31 December 2007 of £119,998 (2006: £122,937) for the year which reduced the FINAL DEFICIT for the year to £210,948 (2006: £151,805). The original budget set for 2007 showed a break-even position for the year. We are thankful for the considerable impact of the grants given by Irish Aid (the government of Ireland’s programme of assistance to developing countries) towards the support of mission partners engaged in development work. We are also thankful that our total expenditure was controlled broadly in line with budget but the further decline in income needs to be addressed with renewed vigour. 5
  7. 7. Crosslinks Trustees’ annual report for the year ended 31 December 2007 (continued) Planned measures to upgrade our accounting systems and improve our fundraising efforts during 2007 suffered a serious set back due to staff absences, illness and an unexpected retirement. Indeed the programme has run approximately a full year behind schedule and it is now unlikely that we will achieve a secure breakeven position before the end of 2009. Nevertheless we have continued to benefit from upward movements in the value of our investment and property assets. Overall our equity investments increased upon revaluation by £31,144 (2006: £100,464) and these gains have been recognised in these financial statements. The Trustees understand that the market value of our freehold properties had increased at the year end. In view of the turmoil in the property market since the year end the Trustees have decided to only recognise the benefit inherent in a previously bequeathed freehold property upon the death of its sitting tenant. As a result of the above, these financial statements show a net reserves position, after provision in full for the future financial impact of pension liabilities, of £1,129,198 (2006: £1,340,146). Of this total £912,741 are unrestricted and available for the general use of Crosslinks’ operations. The impact of the credit crunch and the weakness in the investment markets suggests that our overall financial position for the remainder of 2008 and into 2009 will show a further weakening before any long-term improvement. During 2008 the Trustees have appointed a new Director and have undertaken a comprehensive review of operations and staffing structure. At the time of finalising these financial statements, September 2008, the changes are ongoing but all backlogs and delays in our accounting systems have been dealt with. We are therefore now able to engage, with renewed focus, in our programme to control our expenditure, improve our efficiency, and enhance our fundraising. Against this background, the Trustees are satisfied that our reserves are sufficient to sustain our operations during this difficult period and that we can continue to deliver God’s Word to God’s World for the foreseeable future. Grant-making policies Crosslinks makes grants in various categories: 1. BEST programme. A panel meets twice a year to review applications and make decisions in the light of priorities. 2. Projects. Currently we are meeting once a year as a panel to agree grants under this programme. Reserves policy The Trustees have established that the level of reserves that the society ought to have would preferably be six months of budgeted expenditure for the following year, which amounts to approximately £1,250,000. The unrestricted reserves (free reserves) at 31 December 2007 were £912,741 (2006: £1,156,815) which is 21% (2006:12%) under the required preferred level. Investment policy The Trustees have delegated day to day management of the Society’s general investment portfolio to Stockbrokers (see page 2 for details) who have authority to make investment decisions within the terms of the society’s investment policy. The portfolios are mainly in UK based equity holdings, held for capital growth rather than income, and should be in companies having positive ethical criteria. The value of the portfolios increased by 13.1% in 2007 (2006:12.8%) compared to an increase of 7.36% for the FTSE 100 (2006:10.9%). The combined value of the portfolio at 31 December 2007 was £996,280 (2006: £864,826). The Treasurer of the society meets with both Stockbrokers twice a year to discuss their performance. 6
  8. 8. Crosslinks Trustees’ annual report for the year ended 31 December 2007 (continued) Cash of £92,706 at 31 December 2007 (2006: £421,847) was held by the Charities Official Investment Fund to meet day to day expenditure. A freehold property with a market value of £150,000 is held as an investment. The society also owns property for its own use as offices or accommodation for staff and this was professionally valued at 31 December 2005: £1,560,538 and is shown under the heading of Tangible Fixed Assets in the Balance Sheet. The Investments and Tangible Fixed Assets cover the Long Term Pension liability of £1,955,500, and provide cover of 74% for the Reserve policy agreed by the Trustees mentioned above. Risk management The Trustees have a RISK MANAGEMENT STRATEGY which comprises: • An annual review of the risks the society may face • The establishment of systems and procedures to mitigate those risks identified in the plan, and • The implementation of procedures designed to minimise any potential impact on the society should these risks materialise. Following the annual review the Trustees is satisfied that systems are in place to manage or mitigate exposure to major risks. Plans for future periods We have agreed the following objectives for 2008 in line with our vision statement: 1. Rigorously apply our priorities of evangelistic opportunities and training trainers across all programmes. 2. Pursue highest standards of care and service in the everyday business of the agency. 3. Strategise within regions and countries. 4. Develop Schools of Biblical Training. 5. Develop short-term programmes. 6. Develop the Study Partner (BEST) programme. 7. Assisting indigenous mission endeavours. 8. Promote active engagement in mission amongst UK and Irish churches. 9. Define Anglican identity in terms of belief not structure. Such ‘plans’ will only be achievable if supporters continue to pray and give sacrificially to the society and the need to keep income and expenditure under constant supervision. 7
  9. 9. Crosslinks Trustees’ annual report for the year ended 31 December 2007 (continued) Auditors A resolution will be proposed at the Annual Meeting that Mazars LLP be reappointed as auditors to the charity for the ensuing year. Approved by the Trustees on and signed on their behalf by: 8
  10. 10. Crosslinks Statement of financial activities for the year ended 31 December 2007 2007 2006 Notes Unrestricted Restricted Total Total Restated £ £ £ £ Incoming resources Incoming resources from generated funds Voluntary income 2 2,140,259 199,198 2,339,457 2,466,264 Investment income 3 44,859 2,845 47,704 47,668 Incoming resources from charitable activities 15,575 - 15,575 8,860 Other incoming resources 31,621 10,491 42,112 35,277 ────── ────── ────── ────── Total incoming resources 2,232,314 212,534 2,444,848 2,558,069 Resources expended Costs of generating funds Cost of generating voluntary income 4 114,296 - 114,296 124,256 Investment management costs 5,873 - 5,873 6,999 Charitable activities 5,6,7 2,245,095 210,719 2,455,814 2,619,875 Governance costs 8 86,711 - 86,711 24,981 ────── ────── ────── ────── Total resources expended 2,451,975 210,719 2,662,694 2,776,111 ────── ────── ────── ────── Net (outgoing)/incoming resources before transfers (219,661) 1,815 (217,846) (218,042) Transfers Gross transfers between funds (29,635) 29,635 - - ────── ────── ────── ────── Net (outgoing)/incoming resources before other recognised gains and losses (249,296) 31,450 (217,846) (218,042) Other recognised gains/losses Realised (losses)/gains on investment assets (1,146) - (1,146) 22,473 Unrealised gains on investment assets 11 119,468 1,676 121,144 100,464 Actuarial (loss) on pension scheme (113,100) - (113,100) (56,700) ────── ────── ────── ────── Net movement in funds (244,074) 33,126 (210,948) (151,805) Total funds brought forward 15, 16 1,156,815 183,331 1,340,146 1,491,951 ────── ────── ────── ────── Total funds carried forward 15, 16 912,741 216,457 1,129,198 1,340,146 ══════ ══════ ══════ ══════ The charity’s incoming resources and resources expended all relate to continuing operations. The charity has no recognised gains or losses other than those included above. 9
  11. 11. Crosslinks Balance sheet at 31 December 2007 Notes 2007 2006 £ £ £ £ Fixed assets Tangible fixed assets 10 1,627,245 1,623,425 Investments 11 1,255,497 1,349,641 ────── ────── 2,882,742 2,973,066 Current assets Debtors 12 148,917 116,377 Cash at bank and in hand 226,115 313,998 ────── ────── 375,032 430,375 Creditors – Amounts falling due within one year 13 (173,076) (220,895) ────── ────── Net current assets 201,956 209,480 ────── ────── Total assets less current liabilities 3,084,698 3,182,546 Provision for liabilities and charges 14 (1,955,500) (1,842,400) ────── ────── Net assets 1,129,198 1,340,146 ══════ ══════ Funds Restricted 15, 16 216,457 183,331 General: Unrestricted 16 912,741 1,156,815 ────── ────── 1,129,198 1,340,146 ══════ ══════ Approved by the Trustees on and signed on their behalf by: ………………………………… Mr D. Batchelor Treasurer ………………………………… Rev. M. Payne, Chairman 10
  12. 12. Crosslinks Notes to the financial statements for the year ended 31 December 2007 1 Accounting policies The financial statements have been prepared in accordance with the Statement of Recommended Practice “Accounting and Reporting by Charities” (SORP 2005), issued in March 2005, and applicable accounting standards. The restatement relates to a more appropriate classification of grant income. 1.1 Basis of accounting The financial statements are prepared under the historical cost convention modified to include the revaluation of investments and properties. 1.2 Income Donations, legacies and similar incoming resources are included in the year in which they are receivable, which is when the charity becomes entitled to the resource. Interest receivable is dealt with on an accruals basis. Investment income is dealt with on a cash basis. 1.3 Charitable expenditure Cost of generating funds This comprises all costs incurred in attracting voluntary income. Grants payable Grants payable include all voluntary payments made by Crosslinks to both individuals and institutions. Costs of charitable activities This comprises all costs directly related to the objects of Crosslinks. Support costs Support costs include costs incurred in supporting the objects of Crosslinks. Governance costs Governance costs comprise all costs relating to organisational administration and compliance with constitutional requirements. 11
  13. 13. Crosslinks Notes to the financial statements for the year ended 31 December 2007 (continued) 1 Accounting policies (continued) 1.4 Depreciation Material individual fixed assets are capitalised at cost. Depreciation is calculated to write off the cost of fixed assets in use at the balance sheet date on the basis described in note 10. Depreciation and profits or losses on the disposal of fixed assets used for charitable purposes are reflected in the Statement of Financial Activities before stating net incoming resources before transfers. The charity adopts a policy of revaluation for its properties. Further detail is provided in note 10. 1.5 Pension contributions The Society makes use of a defined benefits scheme administered by the Church of England Pensions Board. Contributions payable to the pension schemes are charged to the Statement of Financial Activities so as to spread the cost of pensions over the service lives of employees in the scheme. The pension charge is calculated on the basis of actuarial advice. However Mission Partners and home staff who are ordained are members of the Church of England Clergy Pension Fund for whom the Society made no contributions. See note 14 for further information. Contributions are also paid to The Representative Church Body in Ireland in respect of one member of staff. The Society also provides unfunded pensions for some former Mission Partners and home staff (see note 14). 1.6 Branch offices The results of the offices in Belfast and Dublin for the year to 31 December 2007 have been incorporated into these financial statements. 1.7 Investments Investments are stated at market value on the last day of business in the accounting period. Gains and losses on the disposal of investments together with unrealised gains or losses on the annual revaluation are disclosed in aggregate in the Statement of Financial Activities. 1.8 Operating leases Rentals applicable to operating leases where substantially all the benefits and risks of ownership remain with the leaser are charged to the Statement of Financial Activities as incurred over the term of the lease. 1.9 Foreign currencies Transactions in foreign currencies are translated at the rates prevailing at the date of the transaction. Balances denominated in foreign currency are translated at the rate of exchange prevailing at the year end. 12
  14. 14. Crosslinks Notes to the financial statements for the year ended 31 December 2007 (continued) 1 Accounting policies (continued) 1.10 Funds accounting General unrestricted funds These are funds which can be used in accordance with the charity’s objects at the discretion of the trustees. Restricted funds These are funds which can only be used for particular restricted purposes within the objects of the charity. Restrictions may arise when specified by the donor or when funds are raised for particular restricted purposes. 2 Voluntary income 2007 2006 Unrestricted Restricted Total Total restated £ £ £ £ Donations from Individuals 1,061,611 39,967 1,101,578 927,038 Donations from Churches 894,210 33,647 927,857 1,025,248 Legacies 128,745 - 128,745 215,416 Grants (including Irish Aid) 55,693 125,584 181,277 298,562 ────── ────── ────── ────── 2,140,259 199,198 2,339,457 2,466,264 ══════ ══════ ══════ ══════ 3 Investment income 2007 2006 Unrestricted Restricted Total Total £ £ £ £ Investment income is made up as follows: Rental income 3,000 - 3,000 10,000 UK Stock Exchange dividends 28,015 - 28,015 30,482 Interest received on cash held as part of investment portfolio 13,844 2,845 16,689 7,186 ───── ───── ───── ───── 44,859 2,845 47,704 47,668 ═════ ═════ ═════ ═════ 13
  15. 15. Crosslinks Notes to the financial statements for the year ended 31 December 2007 (continued) 4 Costs of generating voluntary income 2007 2006 Unrestricted Restricted Total Total £ £ £ £ Salaries and pension contributions 78,655 - 78,655 84,785 Mission education travel 2,328 - 2,328 2,567 Magazines and other literature 25,977 - 25,977 27,287 Other costs 7,336 - 7,336 9,617 ───── ───── ───── ───── 114,296 - 114,296 124,256 ═════ ═════ ═════ ═════ The above costs include 30% of the costs and overheads of the communications department and the church partnerships team. It is estimated that this proportion relates to the cost of generating voluntary income. 5 Grants 2007 £ Meknes Association (Clouds) Morocco 50,491 Maunsell’s Literature Fund Ethiopia 28,532 Martin Whittingham MCS UK 22,408 David and Rachel Williams Kenya 17,480 Bucklers’ Building Project France 16,090 Rob and Tricia MacCurrach Serbia 14,113 Dean and Paula Finnie South Africa 12,919 Keith and Elizabeth Wiseman Zimbabwe 11,400 Steve and Dawn Orange Belgium 11,070 Carlisle College TEE Kenya 7,551 Build the Church (Karamoja) Uganda 7,100 Centre de Rééducation Morocco 6,900 TEE Kilimanjaro Project Tanzania 6,742 New cathedral at Tabora Tanzania 5,613 Graham and Patty Scarratt Chile 5,139 Kampala Evangelical School of Theology Uganda 5,083 Chandiagarh Bible College India 5,021 Myanmar New Testament printing South-East Asia 5,000 Nekemte School for the Deaf Ethiopia 4,928 Lecturer for BIEC South Africa 4,325 Pradip and Amita Sudra Zimbabwe 4,191 George Whitfield, educationalist South Africa 4,042 Provincial mission support (ACT) Tanzania 3,875 Durban Church apprentice South Africa 3,713 Karamoja Diocese Uganda 3,593 Hazel Maunsell Ethiopia 3,474 Raymond and Rebekah Brown South Africa 3,220 Karen Salmon Ethiopia 3,021 14
  16. 16. Crosslinks Notes to the financial statements for the year ended 31 December 2007 (continued) 5 Grants (continued) 2007 £ David and Jennifer Ng South-East Asia 3,000 Jem and Lucy Hovil South Africa 2,735 Kayanga Church building Tanzania 2,290 Salem Project, Slough UK 2,140 Kowak Lay Training Centre Tanzania 2,000 Diocese of Tabora Tanzania 1,930 Myanmar South-East Asia 1,500 Joshua Mwaka (Williams’ project) Kenya 1,500 Reeves Computer/Scanner Appeal Tanzania 1,352 Joshua Vasby-Bernie South-East Asia 1,200 Others Various 5,848 ────── 302,529 ══════ The above figure comprises grants, and includes £96,688 (2006: £93,014) relating to fees and financial support for Study Partners and the South African Apprentices. 6 Costs of charitable activities 2007 2006 Direct costs Support costs Total Total £ £ £ £ Sponsoring mission partners and associates 1,041,953 360,136 1,402,089 1,417,434 Short-term programmes, camps and youth work 100,753 42,016 142,769 217,217 Projects and grants 302,529 60,022 362,551 503,353 Biblical training and study partners 104,245 78,029 182,274 138,601 Mission education 306,109 60,022 366,131 343,270 ────── ────── ────── ────── 1,855,589 600,225 2,455,814 2,619,875 ══════ ══════ ══════ ══════ 15
  17. 17. Crosslinks Notes to the financial statements for the year ended 31 December 2007 (continued) 7 Support costs allocation Mission Mission Church personnel resource partner- Ireland 2007 2006 team team ship team team Total Total £ £ £ £ £ £ Salaries and pensions 161,653 271,454 121,185 92,101 646,393 675,820 Office expenses and other costs 61,130 154,676 69,052 52,479 337,337 185,639 Communication costs - 36,900 - - 36,900 107,976 ---------- ---------- ---------- ---------- ------------ ----------- 222,783 463,030 190,237 144,580 1,020,630 969,435 Less costs relating to Mission Education (Note 6) - (162,061) (112,240) (31,808) (306,109) (289,933) Less costs relating to generating voluntary income (Note 4) - (64,006) (28,574) (21,716) (114,296) (124,256) Less governance costs (Note 8) - (5,000) ---------- ---------- ---------- ---------- ----------- ----------- 222,783 236,963 49,423 91,056 600,225 550,246 ====== ====== ====== ====== ====== ====== Mission Mission Church personnel resource partner- Ireland 2007 2006 team team ship team team Total Total £ £ £ £ £ £ Sponsoring mission partners and associates 133,670 142,179 29,654 54,633 360,136 285,850 Short-term programmes, camps and youth work 15,595 16,587 3,460 6,374 42,016 101,994 Projects and grants 22,278 23,696 4,942 9,106 60,022 75,204 Biblical training and study partners 28,962 30,805 6,425 11,837 78,029 33,861 Mission education 22,278 23,696 4,942 9,106 60,022 53,337 ---------- ---------- ---------- ---------- ------------ ----------- 222,783 236,963 49,423 91,056 600,225 550,246 ====== ====== ====== ====== ====== ====== The costs relating to the generation of voluntary income and Mission education have been deducted before apportioning the remaining support costs over five charitable activity headings shown in note 6 above. The allocation is based mainly on the members of staff involved in each activity. 16
  18. 18. Crosslinks Notes to the financial statements for the year ended 31 December 2007 (continued) 8 Governance costs 2007 2006 Total Total £ £ Cost of Council and other meetings 9,520 9,665 Auditors’ remuneration – Audit 7,010 5,616 Accountancy 2,000 1,500 Consultancy fees 68,181 4,700 Support costs – preparation of accounts - 3,500 ───── ───── 86,711 24,981 ═════ ═════ No trustees were remunerated during the year (2006: None) for their services as trustees. A total of £3,399 (2006: £5,413) was reimbursed to 13 (2006: 14) trustees to cover out of pocket expenses, mainly travelling. An outline review of Crosslinks Assurance Framework was undertaken in the early autumn of 2006. The report made a number of recommendations regarding the implementation of a Governance Assurance Framework, which is legal requirement of the Charity Commissioners, covering the following areas: Financial systems Income generation Corporate processes and procedures Financial reporting Risk registers Managing and developing the Governance Framework Roles and responsibilities of Council Members and staff In 2006 work was started on the Governance Assurance Framework, particularly on the 2007 budget framework and the implementation of the new financial (SAGE) and contact management systems (ThanQ). The overall budget for this work was £84,600 and is in part funded by DCI Irish Aid (£44,544). 17
  19. 19. Crosslinks Notes to the financial statements for the year ended 31 December 2007 (continued) 9 Staff costs 2007 2006 £ £ Salaries 527,012 529,688 Social security costs 48,591 48,843 Pension contributions and other pension costs 70,790 86,430 ───── ───── 646,393 664,961 ═════ ═════ Staff numbers 2007 2006 Full time Part time Full time Part time Generating income and education 8 - 8 - Mission support 12 2 12 5 ── ── ── ── 20 2 20 5 ══ ══ ══ ══ In addition there are 64 (2006: 77) Mission Partners and 43 (2006: 47) Associate Mission Partners for whom the charity is responsible. No employees were paid at a rate in excess of £35,000 (2006: £35,000) per annum. 18
  20. 20. Crosslinks Notes to the financial statements for the year ended 31 December 2007 (continued) 10 Fixed assets Freehold Furniture and property equipment Total £ £ £ Cost or valuation At 1 January 2007 1,561,112 217,498 1,778,610 Additions 40,550 7,074 47,624 Disposals - (57,938) (57,938) ────── ────── ────── At 31 December 2007 1,601,662 166,634 1,768,296 ────── ────── ────── Depreciation At 1 January 2007 18,653 136,532 155,185 Charge for the year 19,464 24,340 43,804 Disposals - (57,938) (57,938) ────── ────── ────── At 31 December 2007 38,117 102,934 141,051 ────── ────── ────── Net book value At 31 December 2007 1,563,545 63,700 1,627,245 ══════ ══════ ══════ At 31 December 2006 1,542,459 80,966 1,623,425 ══════ ══════ ══════ The historical cost of the freehold property shown above is £734,630 (2006: £694,080). The building element of freehold properties is written off on a straight line basis over 50 years. Furniture and equipment is depreciated at 15% per annum on reducing balance basis or 20-25% per annum on cost depending upon the estimated useful life of the assets. The freehold properties and the investments are registered in the name of the Bible Churchmen’s Missionary Trust Limited which holds them as bare trustee. All the fixed assets are used for charitable purposes apart from one property which is included within investments as it is a property held for investment purposes. The last property revaluation was performed for fixed asset freehold properties on 31 December 2005 by Fenton Associates, Chartered Surveyors, on the basis of open market value, with the exception of 251 Lewisham Way which was valued according to its market value due to its commercial nature. 19
  21. 21. Crosslinks Notes to the financial statements for the year ended 31 December 2007 (continued) 11 Investments 2007 2006 Market Market Cost value Cost value £ £ £ £ Listed on the Stock Exchange 619,087 996,286 491,194 864,826 Cash held as part of the investment portfolio 16,505 16,505 2,968 2,968 Charities Official Investment Fund 92,706 92,706 421,847 421,847 Other – 10 Ballyforlea Road 40,000 150,000 40,000 60,000 ────── ────── ────── ────── 768,298 1,255,497 956,009 1,349,641 ══════ ══════ ══════ ══════ Movement in investments during the year 2007 2006 £ £ Value at 1 January 2007 1,349,641 1,472,369 Additions of listed investments 195,135 96,155 Disposals of listed investments (94,818) (293,058) Movement in cash 13,537 (32,172) Unrealised gains on revaluation of investments 31,144 100,464 (Decrease)/Increase in COIF cash deposits (329,142) 325,883 Disposal of property - (320,000) Gain on revaluation of property 90,000 - ────── ────── Value at 31 December 2007 1,255,497 1,349,641 ══════ ══════ Included in the portfolio are the following investments which represent more than 5% of the total portfolios. 2007 2006 Market value Market value £ £ BP 52,890 - HSBC Holdings - 49,855 Tesco 59,656 50,562 Royal Dutch Shell 53,557 43,352 Rio Tinto 53,170 45,867 ═════ ═════ 20
  22. 22. Crosslinks Notes to the financial statements for the year ended 31 December 2007 (continued) 12 Debtors 2007 2006 £ £ Income tax recoverable 88,237 27,198 Other debtors 20,707 14,648 Prepayments and accrued income 39,973 74,531 ───── ───── 148,917 116,377 ═════ ═════ 13 Creditors 2007 2006 £ £ Loans 5,500 6,400 Grants approved but not yet paid - 113,154 Accrued expenses 167,576 101,341 ───── ───── 173,076 220,895 ═════ ═════ 14 Provisions for liabilities and charges 2007 2006 £ £ Provision for pensions at 1 January 2007 1,842,400 1,785,700 Unfunded pensions paid in the year (102,939) (98,051) Increase in provision for the year 216,039 154,751 ───── ───── 1,955,500 1,842,400 ═════ ═════ This represents the trustees’ estimate of the discounted value of future liabilities for unfunded pension payments. The provision relates to the potential liability to members and former members of the BC M S in-house pension scheme, including those who were transferred to the Scottish Amicable scheme in 1983. The main assumptions used in the valuation of this liability are the discount rate applied and the annual increase in the RPI. The discount rate was estimated at 5.8% (2006: 5.2%) for the year. The annual increase in the RPI has been estimated at 3.4% per annum for 2008 and 2009. 21
  23. 23. Crosslinks Notes to the financial statements for the year ended 31 December 2007 (continued) Unfunded pension payments The charity has agreed to make certain pension payments to former mission partners and home staff which are not funded by the arrangements with The Church of England Pension Board described above. As at 31 December 2007 the liability for the pensions is estimated by the trustees at £1,955,500 (2006: £1,842,400) and this has been provided in full, in accordance with Financial Reporting Standard 12 “Provisions, contingent liabilities and contingent assets”. The overall provision was increased by £113,100 in the year (2006: increase £56,700). Pension commitments Crosslinks participates in the Church of England Defined Benefits Scheme as part of the Church Workers Pension Fund and makes contributions into two schemes, one provided for UK home staff and another for mission staff members. At 31 December 2007, Crosslinks had 13 active home staff members, 39 active mission partner members, 24 deferred home staff members and 53 deferred mission partner members. Contributions to both schemes are determined by a qualified actuary on the basis of triennial valuations using the projected unit method. The most recent actuarial valuation for both schemes was carried out on 31 December 2007. Both schemes are classified as multi employer schemes under Financial Reporting Standard 17 “Retirement benefits”. Although the employer’s contributions are affected by a surplus or deficit in either scheme, the employer is unable to identify its share of the underlying assets and liabilities in the schemes on a consistent reasonable basis. As a result, both schemes are accounted for as if they were defined contribution pension schemes as required by Financial Reporting Standard 17. The pension cost charge therefore represents contributions payable by the Society in respect of both funds and amounted to £70,790 (2006: £84,057) for staff and £169,885 (2006: £133,110) for mission partners. 15 Restricted funds Karamoja Other Total £ £ £ Incoming resources 1,136 211,398 212,534 Resources expended - (210,719) (210,719) Gain on revaluation and disposal of investment assets 1,676 - 1,676 Transfers between funds - 29,635 29,635 ────── ────── ────── 2,812 30,314 33,126 Balance as at 1 January 2007 53,816 129,515 183,331 ────── ────── ────── Balance as at 31 December 2007 56,628 159,829 216,457 ══════ ══════ ══════ 22
  24. 24. Crosslinks Notes to the financial statements for the year ended 31 December 2007 (continued) The Karamoja fund represents donations received to fund lump sum payments to Ugandan pastors on retirement within the diocese of Karamoja. Other funds comprise some 97 (2006: 64) individual funds. These funds represent appeals made by Crosslinks for specific projects and other income for which Crosslinks acted in a trustee capacity. 16 Allocation of net assets between funds 2007 2006 Restricted Unrestricted Total Total £ £ £ £ Tangible fixed assets - 1,627,245 1,627,245 1,623,425 Investments 110,058 1,145,439 1,255,497 1,349,641 Net current assets 106,399 95,557 201,956 209,480 Provision - (1,955,500) (1,955,500) (1,842,400) ────── ────── ────── ────── Total funds at 31 December 2007 216,457 912,741 1,129,198 1,340,146 ══════ ══════ ══════ ══════ 17 Other financial commitments At 31 December 2007 the charity was committed to making the following payments under non-cancellable operating leases in the year to 31 December 2008: Other 2007 2006 Operating leases £ £ which expire within 1 years 1,209 - which expire within 2 -5 years 1,308 2,918 ==== ==== 23
  25. 25. Independent auditors’ report to the trustees of Crosslinks We have audited the financial statements of Crosslinks for the year ended 31 December 2007 which comprise the Statement of Financial Activities, the Balance Sheet and related notes. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the trustees in accordance with sections 43 and 44 of the Charities Act 1993. Our audit work has been undertaken so that we might state to the trustees 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 law, we do not accept or assume responsibility to anyone other than the charity and the charity’s trustees, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of trustees and auditors As described in the Statement of Trustees’ Responsibilities the trustees are responsible for the preparation of the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). 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, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding trustees’ remuneration and transactions with the charity is not disclosed. We read the Trustees’ Report, and consider the implications for our report if we become aware of any apparent misstatement within it. Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) 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 judgements made 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 misstatement, whether caused by fraud or other irregularity or error. In forming an opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion the financial statements give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the charity’s state of affairs as at 31 December 2007 and of its incoming resources and application of resources in the year then ended and have been properly prepared in accordance with the Charities Act 1993. CHARTERED ACCOUNTANTS and Registered Auditors Mazars LLP Times House Throwley Way Sutton, Surrey SM1 4JQ Date: 24