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Baptist Missionary Society Registered charity number: 233782 (England and Wales); SC037767 (Scotland)

BMS WORLD MISSION Annual report and financial statements

Year ended 31 October 2016

INTRODUCTION

BMS World Mission PAGE 1

Introduction The Board of Trustees of the Baptist Missionary Society (also known as ‘BMS World Mission’ and ‘BMS’) presents its annual report and financial statements for the year ended 31 October 2016. The financial statements have been prepared in accordance with the requirements of Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (Charities SORP FRS102), effective 1 January 2015. The Trustees’ Report is structured as follows:

Section Page Reference 1 Reference & administrative details 2 2 Objectives & activities 3 3 Achievements & performance 4 - 8 4 Plans for future periods 9 5 Structure, governance & management 10 - 14 6 Financial review 15 - 17 7 Directors’ responsibility statement 18 8 Independent Auditor’s report 19 Financial statements 20 - 41

The Trustees wish to put on record their thanks to our supporters, volunteers and staff around the world who commit their time and skills in helping some of the neediest people in the world. On behalf of the Board of Trustees Maureen Russell Chair of Trustees 21 March 2017

TRUSTEES’ REPORT For the year ended 31 October 2016


Reference and administrative details Who we are Members of the Board of Trustees

Mr Robert Ashurst (Honorary Treasurer) Rev Maureen Hider (from 14 May 2016) Rev Simeon Baker (from 14 May 2016) Rev David Kerrigan (General Director) Rev Dotha Blackwood (to 14 September 2016) Rev Marc Owen (to 14 May 2016) Mr Daniel Bourdanné Mrs Maureen Russell (Chair of Trustees) Rev Lindsay Caplen Mr John Slater Mr Nabil Costa Mr Adam Stacey Mrs Angela Foster (to 14 May 2016) Rev John Western Mr Iain Gordon Mrs Hannah Wilson (to 9 February 2016) Executive Directors Mr Mark Craig (Communications) Rev Peter Dunn (World Mission) Rev David Kerrigan (General Director) Rev Claire Ord (IMC) Rev Mark Ord (IMC) Mrs Marian Rudall (Deputy Director – Finance and Corporate Services) Mr Steve Sanderson (Deputy Director – World Mission) Ms Valerie Stevens (Finance and Corporate Services) Auditors BDO LLP 2nd floor 2 City Place Beehive Ring Road Gatwick RH6 0PA Solicitors Anthony Collins Solicitors LLP 134 Edmund Street Birmingham B3 2ES Bankers Barclays Bank 125 Broadway Didcot OX11 8AW Investment Managers Investec Wealth & Investment Limited 2 Gresham Street London EC2V 7QN Actuaries Punter Southall Consulting Actuaries 1 Colmore Row Birmingham B3 2BJ Principal offices Baptist Missionary Society PO Box 49, Baptist House 129 Broadway, Didcot, OX11 8XA Telephone: 01235 517700 Fax: 01235 517601 Email: [email protected] Website: bmsworldmission.org Registered charity number: 233782 (England and Wales); SC037767 (Scotland)

mailto:[email protected]

http://www.bmsworldmission.org/



Objectives and activities What we set out to do 1. Charity objects The purpose of the Society is to enable Baptist churches to respond to the call of God throughout the world by pursuing the following objects: a) To make known the gospel of Jesus Christ b) To prevent and relieve poverty c) To relieve sickness and promote and protect health d) To advance education e) To alleviate human suffering caused by disaster overseas In pursuit of these objectives, BMS has a clearly articulated mission statement: “the Highest Goal of all we do is to bring people to a faith in our Lord and Saviour Jesus Christ and an experience of the abundant life that only he can provide.” This is expressed in a strategic plan that seeks to ensure that these charitable objects are realised. The strategic plan was launched during the 2015/16 year and will be fully reported on in a new format in next year’s report. The accounts for 2015/16 retain the previous reporting structure. 2. Our Christian faith BMS World Mission embodies the conviction that the God who is Father, Son and Holy Spirit has made himself known to humankind in many ways, but supremely in the person of Jesus Christ. He is the one whose life, death and resurrection have shaped our understanding of a broken world and an alienated people, but also the hope of forgiveness and reconciliation. Through all we do, we seek to both demonstrate and proclaim this good news.

Jesus was a radical figure. He welcomed those the world counted of little value. He sided with those who were perceived as outsiders. He challenged those who held power, and he reserved his righteous anger for those he considered hypocrites.

There are millions in the world today who are denied access to life in all its fullness because they are not valued, or they are forgotten because they are powerless or simply because they have never heard the good news about Jesus. These realities demand a broad response and to that end our mission is always holistic, seeking to meet people’s physical, spiritual and emotional needs.

As we live out our faith, we will do everything we can to address these issues irrespective of the background, faith or ethnic origin of those concerned, however advantaged or disadvantaged they may be. 3. Our charitable activities We are in the final year of reporting our activities under the following four ministry headings:

i Church-based ministries We send and resource people to be involved in both starting and developing churches throughout the world. We support evangelistic initiatives, focusing on telling the story of Jesus, and we work to encourage movements of those who have come to faith from different religious backgrounds and who seek to express ‘church’ in culturally appropriate ways.

ii Partner ministries We support the mission of our partners in the worldwide Church through financial support of individuals and organisations. Partners receive grants and resources to generate long-term impact in the lives of the people they serve.

iii Compassion ministries We are committed to sending people and resources in order to alleviate suffering and combat injustice. We work in core ministries of health, education, justice, development and disaster mitigation and relief.

iv Mission mobilisation BMS mobilises support for our activities so that people will ‘pray, give, go and be informed’. Supporters, through these activities, are able to enter into an active partnership with us, and be better equipped in their own ministries.



Achievements and performance What we have done so far Summary of activities during the year 1. Church-based ministries Through local partner movements and the contribution of UK-based mission workers we have sought to share faith through word and deed. In 2015/16 our aim was to meaningfully share the gospel with 100,000 people. BMS has continued to work with its Baptist Church partners in Bangladesh, India, Thailand, Brazil, Peru, Italy and France. In France, innovative work has been spearheaded by the French Baptist Federation through the work of one of our mission families in the town of Brive. This work aims to develop a model of establishing church ‘around the dinner table’ and has seen some encouraging results. Other innovative approaches with traditional church partners have included a church planting couple in Thailand who have begun community outreach by establishing an outdoor gym through which relationships and conversations about faith are initiated. By far the most prolific of our partners is Big Life Ministries in India. In 2015/16 BMS supported Big Life Church planters in West Bengal, Odisha (Orissa) and the Punjab. We also supplied equipment to enable teams to show the Jesus film and to distribute audio-Bible devices in remote villages. In this programme alone, 28,000 people were reached, 8,200 making decisions to accept Jesus. What was intriguing about this project was less the innovative use of technology and more the bold nature of the evangelists. One evangelist recounts a visit to a local village:

“On 11th February 2016, BMS partner Big Life showed the Jesus movie in a village we were visiting. Many Hindu and Muslim brothers and sisters came to watch the film. During the movie, one of the local people came with a mob. The mob threatened our BMS/Big Life evangelists and asked us to stop the movie. They snatched our equipment and locked the evangelists in a room, began shouting and threatened to beat them if they did not leave their village. The BMS/Big Life evangelists began to pray, not only asking God for protection but for a fresh opportunity to make Jesus known. “After a short while, one of the respected elders of the village, who was watching the movie, intervened and convinced the mob to release the evangelists without harm. As the evangelists walked out of that village they met a young man who invited the evangelists to his village half a kilometre away. After the Jesus film was shown that evening, one of the BMS/Big Life workers shared the Word of God and many people responded to the gospel. Now this young man and his family have accepted Jesus into their lives and have also started a house fellowship. A few days later he showed the Jesus film in his own house to friends and neighbours. Through this family, many people have now come to know Jesus.”

Many families, in this location and elsewhere, have been impacted by the work and have noted healings, changes in attitude and improved family relationships since coming to Christ. In addition, through Big Life, we have helped to provide training to 12,000 church leaders with a desire to see them plant 12,000 new communities of faith. It is anticipated that on average between 20 to 30 people will form each new faith community. Through our BMS Kolkata mission centre we have developed a ‘Street Servants’ ministry which began this year and works with youth in conflict with the law, through providing education and health services to street dwellers and through enabling Kolkata churches to engage in effective outreach amongst those who live on the streets. This project has again been highly successful in seeing many people come to faith. Elsewhere in India, our Mizo Baptist partners have continued to expand the numbers of mission workers they send out. We support some of these workers as they venture into Cambodia. We aim to support further examples of this ‘south to south’ mission in the future. In 2015/16 it was decided that traditional church models were inappropriate at this stage to reach the large Roma community based in Tirana, Albania. Instead, Tek Ura was established by BMS as a local NGO providing much needed assistance to the Roma community. Sharing faith has now become a natural extension of providing health care, day care, electrification and food bank projects amongst a deeply deprived, marginalised and very provate Roma community. We have also supported innovative approaches in other parts of the world. In Lebanon, BMS partner, LSESD



Achievements and performance What we have done so far 1. Church-based ministries (cont) led a project aimed at providing a picture Bible to 3,600 Iraqi and Syrian refugee children as part of a Christmas programme. In Sri Lanka, following recent changes in government, there is now an openness to sharing faith in communities. BMS partner LEADS has begun a process of empowering and teaching churches to be engaged in integral mission in their communities across Sri Lanka, with many people hearing the gospel for the first time. Finally, technology continues to enable the gospel to be heard in various parts of the world. BMS has supported Christian broadcasting and TV production through Malaga Media Centre and SAT 7 for many years. Both ministries remain highly effective in reaching the people of North Africa and the Middle East, sharing the gospel and strengthening the local church. As we reflect upon learning from church based ministries over the previous year, we celebrate the partnerships we have with those who have demonstrated many years of effective witness in tough places. At the same time we marvel at the effectiveness of so many of the indigenous church planters with whom we work and anticipate deepening our commitment to such ministries in the future. 2. Partner ministries BMS aims to enable partners to develop their capacity and in turn achieve more effective ministry. This has typically and historically taken three approaches. The first is to ensure that significant partnerships are strengthened by seconding skilled UK-recruited mission personnel to serve in areas of capacity development. Second, as BMS seeks to promote local leadership, key local leadership roles are financially supported. Finally, training is provided to enhance leadership skills and help develop character. In partnerships across Tunisia, Bangladesh, Afghanistan, Albania, Mozambique, Uganda and Nepal, we continued to provide our own UK-based mission workers to lead through secondment to key roles. The outcome has often been strong and effective leadership which has enabled these organisations to withstand crises and flourish. The downside can be that these partners become vulnerable once the seconded mission workers leave. In other partnerships BMS has provided salary support to local leaders. For example, at a very local level, we have supported full time pastors to lead churches in Albania that were planted by our mission workers in past years. We have provided national project leaders for a youth outreach project in Kosovo and continue to support the Project Director’s role with the Uganda Christian Lawyers Fraternity (UCLF) in Uganda and with Family Impact’s work across Africa. We continue to invest significantly in leadership development by supporting higher learning institutions. This has included the secondment of BMS workers to the Baptist Seminary of Lima (SEBAL) in Peru, to the International Baptist Theological Study Centre (IBTSC) in Amsterdam and to the Christian College of Theology in Bangladesh (CCTB). We have also supported four students at the Arab Baptist Theological Seminary (ABTS) in Beirut, Lebanon who, like those we have supported in past years, will go on to lead churches in the Middle East. 3. Compassion ministries Through access to health, justice, education, relief and community development, we aim to see people experience abundant life by experiencing a kingdom transformation from brokenness and vulnerability to shalom and restoration. Across these sectors, BMS aimed to reach 94,000 people in 2015/16. Health: In our health work we aimed to provide health services, infrastructure and community health awareness. For example, at Guinebor 2 hospital in Chad, the head of Pharmacy is one of our workers, and over the last two years we have invested in a new Maternity Centre which officially opened in December 2015. We have also had a lead role in both the community maternal health programmes and the malnutrition prevention programmes. In 2015/16, 16,500 people received medical assistance through the work of Guinebor 2 with the result that the Minister of Health was keen to promote Guinebor 2 as Chad’s model district hospital. This is an outstanding achievement. Similarly positive outcomes have been seen elsewhere. Our community maternal health awareness programme in Afghanistan continues to produce strong outcomes. The secondment of consultant personnel in Nepal to ensure best



Achievements and performance What we have done so far 3. Compassion ministries (cont) practice standards for general practitioners through the Nick Simons Institute continues to flourish, as does the provision of high quality palliative health care services through our partner in Tunisia. In summary, BMS health work is succeeding in delivering quality care, against an effective strategy, with an effective beneficiary reach in some of the world’s least evangelised, most marginalised and most vulnerable places. Access to Justice: Our access to justice work aims to provide both preventative assistance and remedy to survivors of injustice. This area of work continues to develop down two tracks, namely legal and non-legal justice ministries. Within legal justice, our key partner, the Uganda Christian Lawyers Fraternity (UCLF) now has multiple national offices. Our joint strategy is to ensure students and lawyers are mobilised to offer pro bono services. Community rights awareness sessions are conducted through churches, land matters are resolved through mediation, people are assisted to register property, to have employment contracts and to write wills. UCLF provided assistance to nearly 140,000 people across Uganda in this last year. Although not at the same scale, our BMS legal justice partner in Mozambique, the Association of Mozambican Christian Lawyers, (AMAC) continued to grow with the addition of a Maputo office. AMAC conducted a number of community legal education seminars through churches and in prisons. Work in schools also flourished as AMAC worked to prevent male teachers selling exam passes for sex with students. BMS non-legal justice work has continued to address gender-based violence and sought a context for peace and respect for human rights in the Middle East. Projects in Kolkata and Bangkok have aimed to provide rescue opportunities and create alternative livelihoods for women caught in the commercial sex industry. Our partnership in the work of Musalaha, Middle East Concern and the Holy Land Trust all contribute to fruitful dialogue in Israel and Palestine with a view to securing longer-term peace. In Lebanon, the FEAST initiative brought together Christian and Muslim young people to dialogue effectively on matters of faith aimed at breaking down barriers of prejudice. We look forward to increasing our work in these areas in the years to come. Our most significant contribution has been to focus on Syrian refugee child education through schools and informal learning spaces in Lebanon. This has served to highlight the need to dignify, welcome and provide a future for refugees. This not only prevents radicalisation of refugee children but is also equips them with the skills necessary to rebuild their nation in the future. Access to Education: this work includes our investment in the running of schools for mission children in Nepal, Albania and Bangladesh. These are vital as a way of enabling multiple mission agencies to send and retain people in key countries. In Nepal, KISC has been proactive in reaching beyond their own school through their EQUIP programme. This enables them to work to improve teaching standards of Nepali schools across the country to great effect. The same local access to education objective has been contributed to by support of an after-school club in Kosovo, pre-school work in Mozambique, Street Servants basic literacy with street children in Kolkata, the Anusaran project’s after-school work in Delhi and work with children with learning difficulties through the SKILD programme in Beirut. Higher education work with skills training in China, Zimbabwe, Tunisia, Brazil and Nepal ultimately seeks to convert learning into a means of income as well as focusing on character and leadership. Community Development: Our aim in this area is to alleviate extreme poverty for around 20,000 people every year. We do this through emphasising an asset based approach to resilience (using the strengths and potential of the community) such as the project presently being developed in Guinea which draws upon learning from successful BMS self-help group initiatives in Haiti and Ethiopia.



Achievements and performance What we have done so far 3. Compassion ministries (cont) However, in some situations, it was necessary to provide investment in community development initiatives aimed at building a stronger context for health. In this year this has focused upon the provision of adequate Water Sanitation and Hygiene (WASH) programmes in Nepal, the provision of tube wells in Peru and our rural sanitation project (RISE) in northern Uganda. In these examples, access to safe water and safe toilets have increased health and reduced disease exposure to several hundred households. Disaster Relief: The final strand of BMS’ compassion ministry relates to disaster prevention, relief, recovery and resilience. Our aim is to respond to major sudden onset disasters and complex humanitarian emergencies in a co-ordinated manner. In 2015/16, BMS continued to see through its long-term commitments to partners in Nepal responding to the devastation left by April-May 2015 earthquakes. We continued to respond to the Syria refugee crisis in Lebanon, continued to enable post-typhoon affected communities in the Philippines, supported Ebola prevention and treatment in West Africa and supported displaced people affected by conflict in Ukraine and South Sudan. As BMS improves the quality of its disaster response, our co-ordination for the newly formed Baptist Relief and Development (BReaD) Network has played an important role. 4. Mission mobilisation Praying We are blessed to have the committed prayer support of many thousands of people across the UK and beyond. In the last year, engaging prayer support from our constituency has been expressed in our Prayer Guide, our annual Day of Prayer and through Project Cyrus, our prayer initiative for North Korea. In 2015/16, the BMS Prayer Guide was supplied on a quarterly basis to more than 22,000 supporters. Contents of the guide also fed into regular prayer points on the BMS web site and Twitter. The annual BMS Day of Prayer was held on Monday 1 February 2016, with all supporting churches and individuals asked to commit to praying for BMS on that day. A range of resources were made available online to help churches and individuals to pray on an informed basis, and the BMS staff team worldwide, along with some of our international partners, also took part. Project Cyrus is our prayer network for North Korea, which in 2015/16 was in its third year, having been extended from its original planned two-year duration as a result of the support it attracted. The network, during the year, had around 300 churches and 750 individuals committed to it. Giving There are many ways in which churches and individuals give to BMS. Some of these are long-established programmes which run successfully from year to year; an example being the Birthday Scheme, which in 2015/16 raised £290k, (2014/15 £278k). Some are one-off initiatives such as the Loans for Life project appeal in Mozambique, which raised £49k in 2015/16 and others are new ongoing developments, such as 24:7 Justice Partners, part of our successful 24:7 Partners programme. Three key giving programmes in 2015/16 are categorised as:

• General giving • 24:7 Partners • Significant Partners

‘General giving’ includes most unrestricted and undesignated giving to BMS, and it includes almost all income from churches, which is the foundation of our income. This is very largely the result of sustained good relationships between BMS and over 2,000 churches, throughout the UK, and it represents the Baptist family coming together to support mission through BMS. Our 24:7 Partners programme enables individuals to give directly, with many people choosing to designate their giving through this channel in support of particular mission workers. Around 1,500 people are 24:7 Partners (including new dedicated variants like India Partners and Justice Partners), together contributing in 2015/16 £418k (2014/15 £374k).



Achievements and performance What we have done so far 4. Mission mobilisation (cont) The Significant Partners programme was a new initiative in 2015/16, and although it has yet to contribute any significant income to BMS, we believe we are laying a foundation for the future. The Trustees are very grateful for the essential support given to BMS by many volunteers. These include volunteers serving overseas, area and church representatives and others who serve on the charity’s committees and consultative bodies. The hard work of BMS Birthday Scheme secretaries contributed to the amount raised during the year while the BMS Stamp Bureau raised £15k (2014/15: £17k). Going One key outcome of BMS’ relationship with churches and individuals stretches beyond praying and giving, into potentially life-changing commitments to serve with us in challenging overseas locations. Many serve with us long-term (over four years), others mid-term or short-term and we have a well-established and successful Action Team gap year programme. The offer of people to serve with BMS for several years is core to our ability to work effectively, build capacity and deliver successful outcomes. Being informed We continue our work to mobilise churches in the UK and beyond to understand and be equipped for the multi-faceted mission of today’s Church. In 2015/16 this took the shape of encouraging churches to be safe spaces for women by encouraging faith leaders to speak out against gender based violence. This has continued through active participation within the We Will Speak Out (WWSO) group and also through a gender awareness initiative in Kolkata. Our publication for leaders, Mission Catalyst, has addressed difficult subjects like the complicity of the West in the machinery of war, and the responsibility of churches to speak out for the plight of refugees. Our bi-annual Catalyst Live conference again brought together a number of speakers from around the world, addressing issue as diverse as faith and technology, faith and justice in respect of the plight of the Palestinian people, and the interplay between faith and the visual arts. For each of these, high quality resources are produced for which we have a strong reputation amongst our constituency.



Plans for future periods What we plan to do next Over the next year and throughout the course of the next four years, BMS will be working to a strategic plan with the aim to see one million lives transformed. Our work has been reordered into seven transformational ministries, namely church, education, justice, health, development, leadership and relief ministries. BMS will ensure universal reporting from all of our partners, encouraging a learning approach for us and our partners throughout. In January 2016, we conducted a baseline survey as the start of the strategic plan. The table below shows the number of people whose lives have been transformed through the charity’s work. The annual target of 200,000 is the average annual target number over the 5-year period of the strategy.

Baseline Total

Annual target

Difference

Church

69,656 100,000 (30,344)

Education

6,985 10,000 (3,015)

Justice

21,142 24,000 (2,858)

Development

24,195 20,000 4,195

Health

25,716 20,000 5,716

Leadership

5,490 6,000 (510)

Relief

16,689 20,000 (3,311)

169,873 200,000 (30,127) These figures demonstrate that we will need to identify effective ways to enlarge the impact we have in some of these ministry areas. Looking at the year ahead, it is unfortunately the case that the Syrian refugee crisis will continue to impact many other countries, perhaps most of all Lebanon. There is significant concern in the region that the new US administration will create greater instability and that no end to the regional conflict is in sight. It is expected that we will continue to look at ways of ensuring capacity within our key partner, LSESD, and will continue to support the relief effort through grants and co-ordination via the BReaD network referred to above. 2017 will be a year of significant change within BMS. Below are some of the major institutional challenges which are receiving close attention from the Board of Trustees:

• David Kerrigan will stand down from his position as General Director during 2017. Selection and appointment of a new General Director is a priority.

• A major refurbishment of our offices at Baptist House will be undertaken, to ensure suitability for the next 10-15 years, and also to release additional rentable space that will generate external income.

• BMS will take a major lead role in enabling our partner Big Life Ministries’ launch in the UK and mainland Europe, with the aim that the model of self-multiplying cell groups will be fruitful in a western context.

• BMS will complete the legal process of moving from an Unincorporated to an Incorporated Charity. • BMS will stay abreast of best practices in fundraising to ensure rigorous compliance with the letter and the

spirit of the Code of Fundraising Practice.



Structure, governance and management How we do things

1. Governance

i Governing document

The governing document of the charity is the constitution, which was last revised 16 May 2015. ii Restrictions to governing powers

The constitution provides instructions as to the object, membership, annual meetings, Trustee appointments, property, dissolution of the charity and revision of the constitution. There are no other specific restrictions to daily operations of the charity.

iii Council of Reference The Board of Trustees has a covenant with a Council of Reference, made up of approximately 80 people, representing the three Baptist Unions to whom we relate. The Council meets twice a year.

iv Appointment of new Trustees

New Trustees are elected by the Council of Reference and serve normally for a maximum period of six years. Those nominated as potential Trustees are reviewed to ensure they have the necessary skills to contribute to the charity’s development before the Council of Reference puts them forward for consideration.

v Induction and training of Trustees

When elected, each new Trustee receives an induction pack including the Good Trustee Guide, the Charity Commission publication The Essential Trustee: What you need to know and a range of key organisation policies and documents. All Trustees receive an induction, co-ordinated by the Chair of Trustees and the General Director, which includes a presentation on the organisation, an opportunity to meet key staff and a question and answer session. Trustees also have access to a secure intranet web-based system where they can access Board papers and other information.

vi Governance structures

The Board has discussed and agreed a Board Manual that is used as a reference guide to good governance at Board level. To help the Trustees with the governance of the charity on a day-to-day basis and in accordance with good governance practice the following committees and advisory groups have been constituted with specific terms of reference and functions delegated by the Board. These are:

The Finance and Audit Committee – to advise on all aspects of the charity’s finances, including the financial accounts, annual estimates, risk management, investments (including liaison with the investment managers), income generation, property matters including Baptist House, salaries, mission personnel allowances, pensions and employment matters. They also advise on policy matters that relate to the future planning of the charity’s finances, including such issues as reserves and the balance between the different categories of expenditure. They consider the appointment of the external auditors and any questions of their resignation or dismissal; discuss with the external auditors before the audit commences the nature and scope of the audit; receive the auditors’ management reports following completion of their audit work and review the annual financial statements before submission to the Board of Trustees.

The Remuneration Committee – to advise the Board of Trustees on the appropriate remuneration of the General Director and Executive Directors and their Terms and Conditions of employment. The Committee also provides advice to the Board regarding the remuneration policy framework for BMS home staff. Furthermore, the Committee has power to act, under instruction from the Board, as a review body prior to full Board consideration on recommendations by the General Director and Executive Directors on matters relating to remuneration and staff terms and conditions of service.

2. Organisation structure

Trustees are the final and top-level decision makers for the charity. The Board currently numbers 12 experienced and committed people who meet approximately four times per annum. The Executive



Structure, governance and management How we do things 2. Organisation structure (cont) Directors attend meetings of the Board but do not vote (with the exception of the General Director who is a Trustee).

Because of the size of the charity, staff are employed to carry out the policies set by the Trustees. Within BMS there are currently five main departments each with its own director:

• General Directorate (David Kerrigan) – providing overall leadership for BMS with major

emphasis on theological reflection, strategic thinking and representation. • Department of Finance and Corporate Services (Valerie Stevens) – responsible for all the support functions for BMS including accounting, investments, administration and IT. • Department for World Mission (Peter Dunn) – responsible for BMS mission work overseas. Key roles include recruitment and placement of mission personnel and relationships with

overseas partner bodies. • International Mission Centre, Birmingham (Claire and Mark Ord) – responsible for the delivery of training for BMS mission personnel and others and facilitating cross-cultural

mission in the UK. • Department for Communications (Mark Craig) – responsible for the BMS corporate

communications portfolio, including marketing strategy, design, publications, PR and website.

Responsibility for our work overseas is supported by Regional Team Leaders. Broadly speaking our work falls into four main regions: East Asia, Central and South Asia, sub-Saharan Africa and South America, and Europe, Middle East and North Africa. One of the requirements of the Office of the Scottish Charity Regulator is that we report separately upon the activities BMS has undertaken in Scotland. The Baptist Union of Scotland (BUS) has a very different structure from that in place in the rest of the UK, and the BMS Church Relations Team reflects this in working closely with senior BUS colleagues to establish priority issues. Together we aim to be effective in embedding BMS within the life and work of BUS, including at the Baptist Assembly in Scotland, the national ministers conference and in various local cluster groups. In this way, BMS is able to engage with, support and take feedback from Scottish supporters at all levels. BMS World Mission was the founder of BMS India, a charitable organisation based in Kolkata whose primary activity is running a guesthouse and resource centre in the city. BMS India was formally registered in India under a Trust Deed on 19 March 2015 and has been treated as a subsidiary organisation by BMS in these accounts (2015: from that date).

3. Pay and remuneration policy

The Board of Trustees and the Executive Director Team (EDT) are the key management personnel of the parent charity, in charge of directing and controlling BMS and running and operating it on a day-to-day basis. The constitution makes particular provision for the General Director to be a Trustee as well as an Executive of the charity. All other Trustees give of their time freely and no trustee remuneration was paid in the year, other than to the General Director. Details of this remuneration, trustee expenses and related party transactions are disclosed in note 11 to the accounts. Salaries of all staff, including the EDT, are reviewed annually, taking inflation and the overall financial position of BMS into consideration. Remuneration levels are also benchmarked every four to five years to ensure the level of remuneration set for key management is in line with roles in similar-sized mission organisations.

4. Related organisations and companies

i Baptist Missionary Society India BMS has worked in India since its inception more than 200 years ago, but formally registered as a charitable organisation on 19 March 2015. Its objects align with those of BMS, who appoints the Trustees. Accordingly, consolidated accounts incorporate the activity of BMS India (2015: from 19 March).



Structure, governance and management How we do things 4. Related organisations and companies (cont)

Baptist House

The charity has a 50% share in Baptist House Limited. The 50% share of assets and liabilities of this joint arrangement with the Baptist Union of Great Britain (BUGB) has been included under the appropriate headings of the Balance Sheet. In the Statement of Financial Activities external income is shown in the category ‘Other income’ and all costs relating to the arrangement are allocated to the appropriate cost heading within the ‘Expenditure’ section.

iii The Baptist Assembly Limited

This is a charitable company limited by guarantee. BMS is one of two members (the other is BUGB) and appoints half the directors of this company which is responsible for the annual joint assembly of BMS and BUGB.

iv Overseas partner organisations

The charity works overseas with partner organisations, providing funding by way of grants and/or the provision of personnel. Details of these partners and grants can be found at Note 6 of the financial statements.

5. Investment policy and review of investment performance i Investment powers The Trustees have the power to invest in such assets as they see fit. ii Investment policy

The statements of investments principles set out the principles governing decisions about investments for the general and endowment funds, and incorporate the BMS ethical investment policy. These statements are reviewed by Trustees annually.

The market value of General Fund investments at 31 October 2016 was £3.8m (2015 £3.6m); endowment and property fund investments were £1.9m (2015 £1.6m).

iii Investment selection

The Trustees consider the most appropriate policy for investing funds and use an investment manager to invest ethically in a mixture of equities, bonds, property and cash. The General Account and the Endowment Fund have different asset allocation benchmarks reflecting their differing investment requirements and balance between income and capital growth. Both asset allocations are classified as ‘Medium’ risk.

iv Investment performance during the year The performance results can be seen in the table below (returns expressed in % total return per annum).

The financial year has been an extraordinary one in many respects. Securities markets were affected markedly by the fear of Chinese economic growth in the first quarter of 2016 and the Brexit vote in June. The investment managers didn’t follow all of the differing investment themes over the twelve-month period preferring to stay with high quality long term investments that have served the portfolios well over the years. The results are disappointing and the Trustees are reviewing the charity’s investment management arrangements.

One Year

Three Year (annualised)

Five Year (annualised)

Actual Target Variance Actual Target Variance Actual Target Variance

General 10.3% 13.3% -3.0% 7.4% 8.4% -1.0% 9.2% 8.9% +0.3%

Endowment 11.9% 16.1% -4.2% 8.4% 9.3% -0.9% 10.9% 10.6% +0.3%



Structure, governance and management How we do things 6. Grant making policy

The Bible informs BMS about the value of stewardship. This value asserts that all of our resources, including financial, are a gift of God and as such need to be used with respect to the giver and wisely for the good of others. This value of Christian stewardship underpins the BMS grant making policy in that it demands our integrity, diligence, good practice and wisdom.

Grant applications must meet specific BMS principles, represent good stewardship and be able to meet BMS criteria for monitoring, evaluation and learning. Partner organisations are subject to due diligence and money laundering procedures.

In the year the charity awarded grants of £1.1m (2014/15: £1.0m). The Trustees’ policy is that grants are made against a budget, approved by the Board of Trustees and managed by the Department for World Mission. 7. Public benefit statement

BMS meets the definition of a public entity under FRS102. In compiling this report the Trustees have given due regard to the public benefit guidance issued by the Charity Commission.

BMS has consistently delivered public benefits for over two centuries.

The historic object of the charity is stated as being to “enable the Baptist churches in the British Isles in making known the gospel of Jesus Christ throughout the world”. Our purpose, in today’s language, is to make known the love of God among the world’s neediest people in spiritual and practical ways. We do this with people as our primary agents of change and accomplish our mission through our charitable activities. The charitable work of BMS is funded by over £6m of public donations per annum. The vast majority comes from churches and individuals representing communities throughout the UK and a support base of over 300,000 committed individuals from across society. The work of BMS is undertaken in more than 30 countries of the world, giving priority to the most marginalised people, the least evangelised communities and people in the most fragile states. We distribute relief aid and undertake sustainable development without prejudice, irrespective of caste or creed. Through the charity each year more than 100,000 lives are changed. With the help of God and through the work of BMS over the last 200 years, the lives of millions of people, in some of the world’s neediest countries, have been immeasurably improved, enriched and transformed. 8. Principle risks and uncertainties

Potential risk How we manage the risk BMS is dependent on the continuing financial support of its donors.

The fundraising team is implementing its strategy aimed at retaining existing donors and attracting new sources of income. BMS is committed to meeting the standards of the Fundraising Regulator.

BMS support comes primarily from the Baptist denomination which provides a loyal and consistent support base. However, BMS is vulnerable to the financial strength, risks and uncertainties of the Baptist Unions of Great Britain, Scotland and Wales and their member churches.

An independent but close relationship is maintained with the Baptist Unions to stay abreast of their own risks and uncertainties. A direct communication and church partner programme has been developed to enhance direct relationships with over 2,000 churches and our individual supporter base.

BMS’ defined benefit pension scheme is open to risks of increasing liabilities and value of investments.

The scheme is closed to future accrual. The employer covenant is strong and BMS works with the Pension Trustee and its advisers to understand and mitigate the risks.

BMS seeks protection of children and vulnerable adults in its care and in the care of mission workers.

Well-developed communication and safeguarding processes are in place and BMS has the lowest level of tolerance of this risk.

Security issues are increasingly faced by BMS mission workers and staff as a result of the BMS strategy to work in fragile states amidst pronounced global insecurity.

BMS has a comprehensive 24-hour crisis management policy, with detailed procedures for handling events of whatever nature, be they health-emergencies or issues related to personal safety. Our commitment to work in dangerous places requires us to embrace, but minimise, a certain level of risk.



Structure, governance and management How we do things 8. Principle risks and uncertainties (cont)

The Trustees regularly review the internal and external risks to BMS, and give consideration to organisational attitude to the risks. The Trustees have identified the most important potential risks and uncertainties that may seriously affect the performance, future prospects or reputation of BMS, and have assessed how the risks are being managed.



Financial review About our finances 1. Expenditure Total expenditure for 2015/16 was £7.6m (2014/15 £7.4m) of which £7.3m (2014/15 £7.1m) was committed to supporting and developing the various charitable objects of BMS; this represents 96% (2014/15 96%) of total expenditure. How we spent charitable expenditure of £7.3m

2. Income The total income was £7.6m (2014/15 £8.6m). Two years ago the Trustees put in place a progressive income generation strategy that focuses on maintaining the support from Baptist churches whilst developing new funding streams including our 24:7 Partners programme. We are very pleased to note the 6.1% growth in our core donation income to £5.2m (2014/15 £4.9m). We value the generosity and faithfulness of our supporters who left legacies amounting to £1.1m (2014/15 £1.6m). BMS India income of £0.2m was primarily from visitors to the Kolkata guesthouse compared to 2014/15 (£0.44m) when the whole of the value of BMS India was consolidated for the first time as income to the BMS World Mission accounts.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Donations Legacies Relief BMS India Investment,property &

other

£m

Income Sources

2015

2016

Compassion ministries

46% (2014/15 46%)

Mission mobilisation 13%

(2014/15 13%) Church-based ministries

29% (2014/15 27%)

Partner ministries 12%

(2014/15 14%)



Financial review About our finances 2. Income (cont) The ten-year history of underlying donation income (excluding legacies and responsive emergency appeal and relief income) is shown below. The graph indicates a drop in income following the 2008 financial crisis and six years of donations at or below £5m. This year we are pleased to report income being back very close to the 2008/09 levels. Ten-year history of donation income (excluding legacies and relief compared with RPI inflation)

3. Movement in funds Taking the charity’s funds in total, there was net expenditure of £18k for the year ended 31 October 2016, a net gain of £422k from the appreciation in value of the investment portfolio held by the charity, an actuarial loss on the defined benefit pension schemes of £3.6m and an exchange gain on assets held overseas of £83k. The overall position was therefore a net reduction in total reserves of £3.1m. 4. Reserve policy and financial position General funds The Trustees have reviewed the reserves policy taking a risk-based approach. The Trustees have examined the requirement for free reserves which are those unrestricted reserves not invested in fixed assets, designated for specific purposes or otherwise committed, but does not take account of the pension reserve. The Trustees consider that, given the nature of our work, this should equate to a range of between £3.0m to £3.5m. This would be expected to provide the flexibility and resilience to cover any short-term funding crisis or a medium-term recession. The free reserves at 31 October 2016 were £3.9m. The Trustees maintain a financial plan to manage the budget so that the target level of reserves is achieved and maintained. Such plans will take into account the long-term funding status of the charity’s pension scheme and ensure that deficit payment commitments are met. The charity also holds funds designated for specific purposes, without restricting or committing the funds legally. At the end of the year, £5.4m was held in the fixed asset fund, representing the net book value of the charity’s unrestricted fixed assets, to indicate that these resources are not available for other purposes. £0.8m was held to meet the costs of major repairs and renovations at Baptist House and £0.1m for renovations at our mission training centre in Birmingham. £0.1m was held in our Mission Innovation Fund and this will be used during 2016/17 to enable innovative mission initiatives, not included in our budgeted expenditure. £36k was held in the Carbon Offset Fund and this will be used to contribute towards environmental projects. £0.2m was held in anticipation of settling the BMS share of the Baptist House pension liability in full and as soon as practical.

0

1000

2000

3000

4000

5000

6000

7000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Donation income

Inflation (RPI)



Financial review About our finances 4 Reserve policy and financial position (cont)

The triennial valuation of the BMS defined benefit pension scheme was carried out as at 31 December 2015. The deficit was calculated to be £2.4m; however, the events of 2016 resulted in a very significant actuarial adjustment under FRS102 at 31 October 2016. The reported deficits are for BMS £5.3m and share of Baptist House Ltd £0.2m. Endowment funds Included in the balance sheet are Endowment Funds totalling £1.81m, the capital element not being available to be spent. Restricted Funds Restricted funds are subject to specific conditions imposed by donors. The reserves policy for restricted funds is for sufficient assets to be held to meet the obligations of each fund and this is the case as at 31 October 2016, total £2.1m. 5 BMS India

The accounts of BMS India have been consolidated with BMS with effect from 19 March 2015. The income and expenditure during the year were consolidated within the whole BMS activity. In 2016 actual income to BMS India was £0.2m whereas in 2015 the whole of the incoming reserves were recognised as a one-off gift on the SOFA of £0.4m. BMS India reserves are included as a restricted fund balance at 31 October 2016 of £0.5m.

6 Effectiveness of activities to generate funds BMS was a member of the Fundraising Standards Board until it was replaced by the Fundraising Regulator in July 2016, and is now registered with the Regulator. BMS is closely following changes to the Charity Commission Code of Fundraising Practices and is confident that our practices do not breach the code. We will respond to any future developments in full keeping with both the letter and spirit of any changes. Direct fundraising costs are a very small proportion of BMS expenditure (less than 5%). A large proportion of our income comes from our carefully-managed relationship between BMS and our supporting churches and their members rather than through direct fundraising activities. 7. Pension Fund arrangements Following a review in 2009/10 of our Pension Fund arrangements for UK staff and overseas mission workers, the defined benefit scheme was closed to future accruals. A defined contribution section of the scheme was opened on 1 November 2010 and this is managed by Friends Life. The performance by Friends Life has met agreed targets. The defined benefit section of the scheme has been in deficit. The triennial valuation at 31 December 2015 showed a funding deficit of £2.4m. A revised ten-year recovery plan has been agreed with the Pension Trustee and will be submitted to the Pensions Regulator. A payment of £0.38m against the last recovery plan was made during 2015/16. Under the new plan payments are due by 1 September 2019, 2022, 2025 and 2026. The Trustees are pleased that a de-risking and re-risking strategy is in place with the intention of reducing future volatility of funding levels. At 31 October 2016, the valuation of the scheme showed a deficit of £5.3m. The reduction in the Bank of England interest rate following the Brexit referendum vote has had a very significant impact on the valuation of scheme liabilities. Since the year-end the valuation has improved and Trustees support the Pension Trustee in its long-term approach to investment management. 8. Factors likely to affect the financial performance going forwards and post year-end events On 4 November 2016 the Trustees of BUGB and BMS committed to a refurbishment contract for Baptist House. The cost of the £1.5m contract will be shared and both parties have joint and several liability under the contracts.



Statement of Trustees’ responsibilities The Trustees are responsible for preparing the Trustees’ Report and the financial statements in accordance with applicable law and regulations. Charity law requires the Trustees to prepare financial statements for each financial year in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under charity law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and charity and of the incoming resources and application of resources, including the income and expenditure, of the group and charity for that period. In preparing these financial statements, the Trustees are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that

the charity will continue in business. The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charity’s transactions and disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Financial statements are published on the charity’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the charity’s website is the responsibility of the Trustees. The Trustees’ responsibility also extends to the ongoing integrity of the financial statements contained therein. Auditors BDO LLP expressed their willingness to continue in office. Maureen Russell Chair of Trustees 21 March 2017

AUDITORS’ REPORT For the year ended 31 October 2016


INDEPENDENT AUDITORS REPORT TO THE TRUSTEES OF BMS WORLD MISSION We have audited the financial statements of BMS World Mission for the year ended 31 October 2016 which comprise the Group and Parent Charity Statement of Financial Activities, the Group and Parent Charity Balance Sheets, the Group and Parent Charity Cash Flow Statements and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the charity’s Trustees, as a body, in accordance with the Charities Act 2011 and the Charities and Trustee Investment (Scotland) Act 2005. Our audit work has been undertaken so that we might state to the charity’s 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 as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of Trustees and auditor As explained more fully in the Statement of Trustees’ Responsibilities, the Trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and under section 144 of the Charities Act 2011 and report in accordance with regulations made under those Acts. 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 Financial Reporting Council’s (FRC’s) Ethical Standards for Auditors. Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the FRC’s website at frc.org.uk/auditscopeukprivate Opinion on financial statements In our opinion the financial statements: • give a true and fair view of the state of the group’s and the parent charity’s affairs as at 31 October 2016

and of the group’s incoming resources and application of resources for the year then ended; • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting

Practice; • have been prepared in accordance with the requirements of the Charities Act 2011, the Charities and

Trustee Investment (Scotland) Act 2005 and regulations 6 and 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended).

Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Charities Act 2011 and the Charities Accounts (Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion:

• the information given in the Trustees’ Annual Report is inconsistent in any material respect with the financial statements; or

• proper and sufficient accounting records have not been kept; or • the parent charity financial statements are not in agreement with the accounting records or returns; or • we have not received all the information and explanations we require for our audit.

BDO LLP Statutory Auditor Gatwick, West Sussex United Kingdom Date: BDO LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006. BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

http://www.frc.org.uk/auditscopeukprivate

BMS GROUP CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 October 2016


2016 2015

Notes

Unrestricted Funds

Restricted Funds

Endowment Funds

Total 2016

Unrestricted Funds

Restricted Funds

Endowment Funds

Total 2015

£000 £000 £000 £000 £000 £000 £000 £000 Income from: Donations and legacies 2 5,162 1,590 - 6,752 5,713 1,987 - 7,700 Charitable activities 21 - - 21 18 - - 18 Investment income 3 173 20 - 193 182 13 - 195 Other income 4 552 81 - 633 675 19 - 694 Total income 5,908 1,691 - 7,599 6,588 2,019 - 8,607 Expenditure on: Raising funds 326 - 7 333 281 - 7 288 Charitable activities Church-based ministries 1,871 226 - 2,097 1,740 251 - 1,991 Partner ministries 849 62 - 911 860 94 - 954 Compassion ministries 1,971 1,363 - 3,334 2,053 1,247 - 3,300 Mission mobilisation 942 - - 942 900 - - 900 5,633 1,651 - 7,284 5,553 1,592 - 7,145 Total expenditure 5 5,959 1,651 7 7,617 5,834 1,592 7 7,433 Net (expenditure) / income before movement on

investments (51) 40 (7) (18) 754 427 (7) 1,174 Net gains on investments 243 - 179 422 92 - 39 131 Net income 192 40 172 404 846 427 32 1,305 Transfers between funds 10 28 (29) 1 - (184) 183 1 - Other recognised gains/(losses): Actuarial (losses) / gains on defined pension scheme

(3,610)

-

-

(3,610)

18

-

-

18

Exchange differences - 83 - 83 - (28) - (28) Net movement in funds (3,390) 94 173 (3,123) 680 582 33 1,295 Reconciliation of funds: Total funds brought forward 8,383 1,971 1,637 11,991 7,703 1,389 1,604 10,696 Total funds carried forward 4,993 2,065 1,810 8,868 8,383 1,971 1,637 11,991

All operations are continuing. The notes on pages 24 to 41 also form part of these financial statements.

BMS PARENT CHARITY STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 October 2016


2016 2015

Notes

Unrestricted Funds

Restricted Funds

Endowment Funds

Total 2016

Unrestricted Funds

Restricted Funds

Endowment Funds

Total 2015

£000 £000 £000 £000 £000 £000 £000 £000 Income from: Donations and legacies 2 5,162 1,439 - 6,601 5,713 1,551 - 7,264 Charitable activities 21 - - 21 18 - - 18 Investment income 3 173 10 - 183 182 11 - 193 Other income 4 552 39 - 591 675 15 - 690 Total income 5,908 1,488 - 7,396 6,588 1,577 - 8,165 Expenditure on: Raising funds 326 - 7 333 281 - 7 288 Charitable activities Church-based ministries 1,871 226 - 2,097 1,740 251 - 1,991 Partner ministries 849 62 - 911 860 94 - 954 Compassion ministries 1,971 1,186 - 3,157 2,053 1,193 - 3,246 Mission mobilisation 942 - - 942 900 - - 900 5,633 1,474 - 7,107 5,553 1,538 - 7,091 Total expenditure 5 5,959 1,474 7 7,440 5,834 1,538 7 7,379 Net (expenditure) / income before movement on

investments (51) 14 (7) (44) 754 39 (7) 786 Net gains on investments 243 - 179 422 92 - 39 131 Net income 192 14 172 378 846 39 32 917 Transfers between funds 10 28 (29) 1 - (184) 183 1 - Other recognised gains/(losses): Actuarial (losses) / gains on defined pension scheme

(3,610)

-

-

(3,610)

18

-

-

18

Net movement in funds (3,390) (15) 173 (3,232) 680 222 33 935 Reconciliation of funds: Total funds brought forward 8,383 1,611 1,637 11,631 7,703 1,389 1,604 10,696 Total funds carried forward 4,993 1,596 1,810 8,399 8,383 1,611 1,637 11,631

All operations are continuing. The notes on pages 24 to 41 also form part of these financial statements.

BALANCE SHEET As at 31 October 2016


BMS BMS Group World Mission 2016 2015 2016 2015 Notes £000 £000 £000 £000 Fixed assets Tangible assets 12 6,322 6,446 5,931 6,107 Investments 13 5,700 5,304 5,700 5,304 Total fixed assets 12,022 11,750 11,631 11,411 Current assets Stock 14 14 14 14 Debtors 14 1,392 982 1,359 952 Investments 170 153 61 61 Cash at bank and in hand 1,609 1,846 1,562 1,825 Total current assets 3,185 2,995 2,996 2,852 Liabilities Creditors: amounts falling due within one year 15 (826) (687) (715) (565) Net current assets excluding pension liability 2,359 2,308 2,281 2,287 Defined benefit pension scheme liability 16 (5,513) (2,067) (5,513) (2,067) Total net assets 8,868 11,991 8,399 11,631 The funds of the charity 10 Endowment funds 1,810 1,637 1,810 1,637 Restricted income funds 2,065 1,971 1,596 1,611 Unrestricted funds Designated funds 6,589 5,610 6,589 5,610 General funds (free reserves) 3,917 4,840 3,917 4,840 Unrestricted funds excluding pension reserve 10,506 10,450 10,506 10,450 Pension reserve (5,513) (2,067) (5,513) (2,067) Total funds 8,868 11,991 8,399 11,631

The financial statements on pages 20 to 41 were approved by the Trustees on 21 March 2017 and signed on their behalf by: Chair of Trustees Date: 21 March 2017 The notes on pages 24 to 41 also form part of these financial statements.

CASH FLOW STATEMENT For the year ended 31 October 2016


BMS BMS Group World Mission 2016 2015 2016 2015 Notes £000 £000 £000 £000 Cash flow from operating activities: Net cash used in operating activities (673) (468) (616) (946) Cash flows from investing activities: Dividends, interest and other income from investments 193 195 183 193 Proceeds from sale of tangible fixed assets 349 421 331 421 Payments to acquire tangible fixed assets (198) (643) (188) (304) Proceeds from sales of investments 1,445 1,623 1,445 1,623 Purchase of investments (891) (1,124) (891) (1,124) Net cash provided by investing activities 898 472 880 809 Change in cash and cash equivalents in the year 225 4 264 (137) Cash and cash equivalents at the beginning of the year 2,097 2,121 1,984 2,121 Change in cash and cash equivalents due to exchange rate movements

83

(28)

-

-

Cash and cash equivalents at the end of the year 2,405 2,097 2,248 1,984 Reconciliation of net income to net cash flow from operating activities Net income for the reporting period (as per the Statement of Financial Activities) 404 1,304 378 917 Depreciation 241 186 221 186 Gains on investments (422) (131) (422) (131) Investment income (193) (195) (183) (193) Profit from sale of fixed assets (190) (285) (189) (285) Currency re-translation on fixed assets (78) - - - Increase in stocks - (1) - (1) Increase in debtors (410) (413) (407) (384) Increase in creditors 139 251 150 129 Decrease in pension fund asset (164) (1,184) (164) (1,184) Net cash used in operating activities (673) (468) (616) (946) Analysis of changes in net funds

Cash at bank and in hand 1,609 1,846 1,561 1,825 Cash held in investment portfolio 626 98 626 98 Short term deposits 170 153 61 61 2,405 2,097 2,248 1,984

At 31 October 2016, investments had been sold to provide cash for the Baptist House refurbishment. Cash held in the investment portfolio has therefore been treated as cash in the cash flow statement. The notes on pages 24 to 41 also form part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 October 2016


1. Accounting policies a Basis of preparation

The financial statements have been prepared under the historical cost convention as modified by the inclusion of investments at market value and in accordance with applicable accounting standards. In preparing the financial statements the charity has complied with the requirements of the Charities Act 2011, the Charities and Trustee Investment (Scotland) Act 2005 and the Statement of Recommended Practice ‘Accounting and Reporting by Charities applicable to charities preparing accounts in accordance with FRS102’ (effective 1 January 2015) (SORP (FRS102)). The Statement of Financial Activities (SOFA) and Group Balance Sheet consolidate the financial statements of the charity and its wholly-owned subsidiary, Baptist Missionary Society Trust, in India. The financial year end for the subsidiary is 31 March 2016 and its results are consolidated on a line-by-line basis.

b Assessment of going concern After reviewing the charity’s forecasts and projections, the Trustees have reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. The charity therefore continues to adopt the going concern basis in preparing its financial statements.

c Accounting estimates and judgments Preparation of the financial statements in accordance with FRS102 requires the Trustees to make certain judgements and estimates. The items below are considered to be the most important in understanding the financial statements:

BMS recognises its liability to its defined benefit pension scheme and that of Baptist House Ltd. These involve a number of estimates which are disclosed in note 16. BMS has accrued £856k of legacy income based on the policy set out in note f below.

d Transition to FRS102 and reconciliation with previous Generally Accepted Accounting Practice These financial statements for the year ended 31 October 2016 are the first of this charity to comply with FRS102. The date of transition is 1 November 2014. In preparing the financial statements, the Trustees have considered whether in applying the accounting policies required by the Charities SORP (FRS102), the restatement of certain comparatives was required. The transition to FRS102 has resulted in certain changes to the accounting policies used previously and the prior year comparative amounts have been restated for adjustments required on the adoption of FRS102. Details of these restatements are given in note 18.

e Fund accounting General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the objectives of the charity and which have not been designated for other purposes. Designated funds comprise unrestricted funds, which have been set aside by the Trustees for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements. Restricted funds are funds which are to be used in accordance with specific restrictions imposed by the donors or which have been raised by the charity for particular purposes. The aim and use of each restricted fund is set out in the notes to the financial statements. Endowment funds are those where donations are required to be retained as capital in accordance with the donors’ wishes – permanent or expendable according to the nature of the restriction. Investment income and gains are allocated to the appropriate fund.

f Income

All income, including donations, legacies and investment income, is recognised where there is entitlement, probability of receipt and the amount can be measured with sufficient reliability. Recognition of legacy income is dependent on the type of legacy, with pecuniary legacies recognised when probate has been granted. Residuary legacies are recognised at a discounted rate when they are measurable, probate has been granted and entitlement is clear.



1. Accounting policies (cont)

No value is included where the legacy is subject to a life interest held by another party.

Income from charitable activities includes amounts relating to the sale of overseas properties and othercharitable income streams. Charitable activities income is recognised on a receivable basis.

g ExpenditureAll expenditure is accounted for on an accruals basis and has been classified under headings that aggregate allcosts related to the category. Charitable activities include expenditure associated with mission mobilisationand the church-based, partner and compassion ministries and include both the activities, direct costs andsupport costs relating to these. Costs which cannot be directly attributed have been allocated on a basisconsistent with the use of the resources and staff time. Expenditure on raising funds are those costs incurred inseeking voluntary contributions and in the management of the charity’s investments. They do not include thecosts of disseminating information in support of BMS’ charitable activities. Governance costs are the costsassociated with the governance arrangements of the charity and include the cost of the annual audit of theaccounts, the expenses of Trustee meetings and the costs of staff involved in supporting these activities.Grants payable are payments made to third parties in the furtherance of BMS charitable objects and areaccounted for when the recipient has a reasonable expectation that they will receive a grant.

h Tangible fixed assets and depreciationTangible fixed assets costing more than £1,000 are capitalised and included at cost including any incidentalexpenses of acquisition.

Depreciation is calculated to write down the original costs of the fixed assets over their estimated useful livesas follows:Buildings over 50 years Computer (included in furniture and equipment) over 3 years Furniture and equipment over 3 - 5 years Motor vehicles used overseas written off in year of purchase Solar panels and access modifications (included in property) over 15 years For BMS India, depreciation has been applied at the rates specified by the India Income Tax Act 1961, most specifically for buildings at 5%.

i Freehold land and buildings Land and buildings are shown at original historical cost, probate value or subsequent valuation.

j Investments Investments are stated at market value at the Balance Sheet date. The Statement of Financial Activities includes the net gains and losses arising on revaluations and disposals throughout the year.

k Joint arrangement The charity has entered into a joint arrangement with the Baptist Union of Great Britain for the management of Baptist House, its headquarters building. Under the terms of this arrangement, the property is legally vested in corporate representatives of the two bodies and management of the property assigned to a management committee nominated by the two charities. The arrangement was undertaken to enable two unincorporated charities to jointly own and manage one property. The charity accounts for this arrangement by recognising its share of the relevant assets and liabilities, income and expenditure arising from this arrangement in the Balance Sheet and Statement of Financial Activities respectively. Transactions between the charity and the joint arrangement are eliminated on incorporating these amounts into the accounts of the charity.

l Stock Stock is valued at the lower of cost and estimated net realisable value.

m Pensions The charity’s defined benefit scheme is funded, with the assets of the scheme held separately from those of the charity, in separate Trustee-administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a high quality corporate bond of equivalent currency and term to the scheme’s liabilities. The actuarial valuations are obtained at least triennially and are updated at each Balance Sheet date.



m Pensions (cont)

The resulting defined benefit asset or liability is presented separately after other net assets on the face of the Balance Sheet. The current service cost, past service costs and any gains and losses on settlements and curtailments are charged in resources expended in the Statement of Financial Activities. The interest costs and the expected return on assets are shown as a net amount of other finance costs or credits and included in resources expended. Actuarial gains and losses are recognised within the ‘gains and losses’ categories of the Statement of Financial Activities as ‘actuarial gains and losses on defined benefit pension scheme’. Contributions to the charity’s defined contribution pension scheme are charged to the Statement of Financial Activities in the year in which they become payable. In addition to these schemes, the charity has a one half share in the liabilities of the Baptist Union Staff Pension Scheme (BUSPS) which relate to Baptist House Ltd. There are multiple employers in the BUSPS and there is not sufficient information to identify each employer’s share of the underlying assets and liabilities of the scheme. Accordingly, the scheme is accounted for as though it were a defined contribution scheme.

n Foreign currencies Assets and liabilities held in foreign currencies are translated into sterling at the rates of exchange ruling at the end of the financial year and the results of foreign operations are translated at the average rate of exchange for the year. Differences on exchange arising from retranslation of foreign currency bank balances and other assets are reported under income and expenditure in the Consolidated Statement of Financial Activities. All other foreign exchange differences are taken to the Statements of Financial Activities in the period in which they arise.

2. Donations and legacies 2016 £000

2015 £000

General work 4,846 4,583 Medical work Birthday scheme 290 278 Other 84 81 5,220 4,942 Emergency relief fund 282 731 5,502 5,673 Legacies 1,099 1,590 BMS India 151 437 6,752 7,700 3. Investment income

2016

2015 £000 £000 UK investment dividends 171 176 Interest on cash deposits 10 3 Bank and other interest 12 16 193 195



4. Other income

2016

2015 £000 £000 Income from property 297 313 Profit on sale of fixed assets 190 285 Sundry income 146 96 633 694 5. Analysis of expenditure

Direct costs

Grant funding

of activities

Support

costs

Total

2016

Total 2015

£000 £000 £000 £000 £000 Cost of generating funds

Cost of generating voluntary income

274

-

32

306

260

Investment management fees

27

-

-

27

28

Charitable activities

Church-based ministries

1,556

-

541

2,097

1,991

Partner ministries 147 609 155 911 954 Compassion ministries 2,231 510 593 3,334 3,300 Mission mobilisation 772 - 170 942 900

5,007 1,119 1,491 7,617 7,433

Analysis of support costs

Mission

Team Communications

Team

Central

Services

Governance

Total 2016

Total 2015

£000 £000 £000 £000 £000 £000 Cost of generating funds

Cost of generating voluntary income

-

-

32

-

32

33

Charitable activities

Church-based ministries

98

69

353

21

541

441

Partner ministries - 7 139 9 155 130 Compassion ministries

79 449 40 25 593 535

Mission mobilisation - - 161 9 170 130 177 525 725 64 1,491 1,269 Support costs have been allocated to activity cost categories on a basis consistent with the use of resources. Some have been apportioned on the proportion of floor area occupied by the activity whereas others have been apportioned on staff numbers, time used for the activity or proportion of direct costs involved.



6. Grants payable

Relief £000

Capacity Building

£000

Medical £000

Total 2016 £000

Overseas partners

Asia and Middle East

Bangladesh Bangladesh Baptist Church Sangha - 7 - 7 Lamb Hospital - - 6 6 India Baptist Church of Mizoram 4 8 - 12 Big Life Ministries - 22 - 22 Israel and Palestine Association of Baptist Churches in Israel - 14 - 14 Palestinian Baptists - 12 - 12 Lebanon Arab Baptist Theological Seminary - 31 - 31 Society for Educational and Social Development 49 54 - 103 Nepal International Nepal Fellowship

34

9

-

43

Multi-purpose Community Development Service 17 - - 17 United Mission to Nepal 175 11 - 186 Sri Lanka, Lanka Evangelical Alliance Development Service

11

8

-

19

Thailand, Karen Baptist Convention - 10 - 10

Africa

Angola, Evangelical Baptist Church - 9 - 9 Chad, Cutting Edge Foundation - 5 20 25 Mozambique, Baptist Convention - 49 - 49

Uganda Cyan Uganda - 16 - 16 Ugandan Christian Lawyers’ Fraternity - 42 - 42 Zimbabwe, Family Impact - 14 - 14

Latin America & Caribbean

Ecuador, Baptist Convention 10 - - 10

Haiti, Haiti Hospital Appeal 22 1 - 23

Peru

Evangelical Baptist Convention 13 16 - 29

El Puente Baptist Church - 11 - 11

Europe

Albania, Tek Ura - 20 - 20

Baptist Union of Bulgaria - 13 - 13

Baptist Union of Croatia - 24 - 24

Federation of Evangelical Baptist Churches of France - 12 - 12

The Netherlands, International Baptist Theological

Seminary - 12 - 12

Other partners 5 104 1 110



6. Grants payable (cont)

Relief £000

Capacity Building

£000

Medical £000

Total 2016 £000

International organisations

Asia Pacific Baptist Federation 65 - - 65

Canadian Baptist Ministries 10 - - 10

Cooperative Baptist Fellowship 24 - - 24 EBM International 18 - - 18

European Baptist Federation 16 10 - 26

UK organisations

Cyan International 4 35 - 39

Global Connections - 5 - 5

The Light Project - 6 - 6

Urban Expression - 6 - 6

Other organisations / partners - 18 1 19

477 614 28 1,119

7. Governance costs

2016

2015 £000 £000 Audit fee 32 22 Board of Trustees 11 10 Other governance costs 6 5 Support costs 15 15 64 52 8. Parent charity 2016 2015 £000 £000

Total incoming resources 7,396 8,165 Total expenditure (7,440) (7,379) (44) 786 Net gains on investment assets 422 131 Actuarial (losses) / gains on defined benefit pension scheme (3,610) 18 (Deficit) / surplus for the year (3,232) 935

9. Subsidiary BMS World Mission has a wholly owned subsidiary, Baptist Missionary Society Trust, based in India. The trust carries out mission activities from its base in Kolkata. The charity appoints the Trustees of BMS India and on the winding up or dissolution of the Trust, its assets pass to the charity. Since 19 March 2015, financial activity of BMS India has been consolidated into that of the charity.



9. Subsidiary (cont) 2016 2015 £000 £000

Total incoming resources 286 443 Total expenditure (177) (83) Surplus for the year 109 360 Total assets 580 482 Total liabilities (111) (122) Funds 469 360

10. Statement of funds

Balance

at 1.11.15

Incoming resources

Resources expended

Realised and

unrealised gains

Transfers

Balance

at 31.10.16

£000 £000 £000 £000 £000 £000 Endowment funds Cyril Edwards Trust 572 - (3) 47 - 616 Jane Mursell Trust 617 - (3) 51 - 665 Joy Bushon Sircar Trust 311 - - 70 - 381 Other endowment funds 137 - (1) 11 1 148 1,637 - (7) 179 1 1,810

The income of the Cyril Edwards Trust is available to be used in any field where the charity operates. The income of the Jane Mursell Trust is available to be used for women’s work within the charity. The income of the Joy Bushon Sircar Trust is to be used to benefit specific educational and church work in the Barisal area of Bangladesh. The Trust is invested in US dollar securities which have been converted into sterling at the rate ruling at 31 October 2016.

Balance

at 1.11.14

Incoming resources

Resources expended

Realised and

unrealised gains

Transfers

Balance

at 31.10.15

£000 £000 £000 £000 £000 £000 Endowment funds Cyril Edwards Trust 557 - (3) 18 - 572 Jane Mursell Trust 601 - (3) 19 - 617 Joy Bushon Sircar Trust 313 - - (2) - 311 Other endowment funds 133 - (1) 4 1 137 1,604 - (7) 39 1 1,637



10. Statement of funds (cont)

Balance

at 1.11.15

Incoming resources

Resources expended

Realised and

unrealised gains

Transfers

Balance

at 31.10.16

£000 £000 £000 £000 £000 £000 Restricted funds Emergency relief fund 842 327 (568) - - 601 Medical fund - 406 (452) - 46 - Restricted fixed assets reserve 734 - - - (92) 642 Restricted property funds 18 35 - - 81 134 India 360 203 (177) 83 - 469 Other restricted funds 17 720 (454) - (64) 219 1,971 1,691 (1,651) 83 (29) 2,065

The emergency relief fund represents funds received for relief and disaster response around the world primarily where the charity is involved. The transfer to the medical fund is from general reserves to cover the excess of that expenditure over income received. The restricted fixed assets reserve represents the value of properties which have been left to the charity with restricted use. Restricted property funds are held following the sale of property left to the charity with restricted use. Transfers to or from the funds reflect property transactions and depreciation. The India fund represents the net value of assets owned in India by BMS India.

Balance

at 1.11.14

Incoming resources

Resources expended

Realised and

unrealised gains

Transfers

Balance

at 31.10.15

£000 £000 £000 £000 £000 £000 Restricted funds Emergency relief fund 526 737 (421) - - 842 Medical fund - 341 (582) - 241 - Restricted fixed assets reserve 561 - - - 173 734 Restricted property funds 206 - (3) - (185) 18 India - 443 (55) (28) - 360 Other restricted funds 96 498 (531) - (46) 17 1,389 2,019 (1,592) (28) 183 1,971



10. Statement of funds (cont)

Balance at

1.11.15

Incoming resources

Resources expended

Realised and

unrealised gains

Transfers

Balance

at 31.10.16

£000 £000 £000 £000 £000 £000 Unrestricted funds

Pension reserve (2,067) - (230) (3,610) 394 (5,513) Designated Fixed assets reserve 5,373 154 - - (239) 5,288 Baptist House refurbishment - - - - 805 805 Baptist House Ltd Pension Scheme

-

-

-

-

233

233

Mission Innovation fund 100 - (54) - 75 121 Major repairs fund 105 - - - - 105 Other designated funds 32 - (8) - 13 37 5,610 154 (62) - 887 6,589

General funds

Free reserves 4,840 5,754 (5,667) 243 (1,253) 3,917

8,383 5,908 (5,959) (3,367) 28 4,993 The fixed assets reserve represents the amount set aside equivalent to the net book value of property and equipment used by the charity and purchased from unrestricted funds. The transfer from the fixed assets reserve is to the general fund to bring the reserve into line with the value of the fixed assets at the year end. The designated fund for Baptist House refurbishment will be used over the next twelve months as the renovation of Baptist House is completed. The designated fund for Baptist House Ltd Pension Scheme is to meet the costs of settling the charity’s one half share of the deficit of that scheme. It is anticipated that the payment will be made in the next two years. The Mission Innovation fund is used for innovative mission projects and will be used over the next two years. The major repairs fund is to meet the costs of large repair projects and it is anticipated that this will be used in the next two years.

Balance

at 1.11.14

Incoming resources

Resources expended

Realised and

unrealised gains

Transfers

Balance

at 31.10.15

£000 £000 £000 £000 £000 £000 Unrestricted funds

Pension reserve (3,269) - (266) 18 1,450 (2,067) Designated Fixed assets reserve 5,563 285 - - (475) 5,373 Mission Innovation fund 63 - (63) - 100 100 Major repairs fund 105 - - - - 105 Other designated funds 23 - (1) - 10 32 5,754 285 (64) - (365) 5,610

General funds

Free reserves 5,218 6,303 (5,504) 92 (1,269) 4,840

7,703 6,588 (5,834) 110 (184) 8,383



11. Employees and trustees (cont) The costs of mission personnel and other employees of the charity during the year were as follows:

2016 2015 £000 £000 Allowances and salaries 2,932 2,851 Pension contributions 440 446 National Insurance contributions 177 152 Relocation payments 12 7 3,561 3,456

Average number of employees Mission personnel 107 109 Other employees 64 61 171 170

The number of employees whose emoluments, excluding employer’s pension contributions, amounted to over £60,000 in the year was as follows:

2016 2015 Number Number £60,001 - £70,000 1 -

The total amount of employee benefits, including employer’s pension contributions, received by key management personnel for their services during the year was £348,263 (2015: £338,494). Trustees No emoluments were paid to the Trustees, with the exception of the General Director, Rev David Kerrigan, who was employed by the charity and was remunerated on the same basis as other employees but received no remuneration for his duties as a Trustee. The constitution makes particular provision for the General Director to be an employee of the charity and the Charity Commission has given formal assent to this. Mr Kerrigan’s emoluments as General Director were £60,758 (2015 – £59,806). He was also reimbursed for all necessary expenses incurred in carrying out his duties as an employee of the charity, a total of £2,446 (2015 – £2,218). He is a member of the charity’s pension scheme and contributions totalling £9,428 (2015 – £9,287) were paid by the charity during the year. During the year a total of £10,744 (2015: £9,884) was reimbursed to 15 Trustees (2015: 13) in respect of committee expenses. By the nature of our work, several Trustees have close family members who have worked overseas with us during the year. Where they were employed by us or worked as volunteers, they were remunerated or received reimbursement of expenses on the same basis as other employees or volunteers. The remuneration and reimbursement amounted to £26,624 (2015: £20,072). During the year there were two Trustees who have been previous employees of the charity and have rights within the BMS Pension Scheme as deferred pensioners. During the year, a total of £9,213 (2015: £4,923) was received as donations from Trustees. Mr Nabil Costa, who has been a trustee since 30 April 2011, is the Executive Director of the Lebanese Society for Educational and Social Development (LSESD). LSESD is a partner of BMS World Mission and has received restricted grants totalling £103k during the year ended 31 October 2016 (2015: £74k).



12a. Group tangible assets

Land and buildings

Furniture and equipment

Motor

vehicles

Total £000 £000 £000 £000 Cost 1 November 2015 8,010 856 34 8,900 Additions 49 93 56 198 Currency re-translation 66 10 2 78 Disposals (172) (69) (10) (251) 31 October 2016 7,953 890 82 8,925 Depreciation 1 November 2015 1,668 761 25 2,454 Charge for year 140 44 57 241 Disposals (21) (62) (9) (92) 31 October 2016 1,787 743 73 2,603 Net book value 31 October 2016 6,166 147 9 6,322 31 October 2015 6,342 95 9 6,446

12b. Charity tangible assets

Land and buildings

Furniture and

equipment

Motor

vehicles

Total £000 £000 £000 £000 Cost 1 November 2015 7,724 812 25 8,561 Additions 49 83 56 188 Disposals (157) (69) (9) (235) 31 October 2016 7,616 826 72 8,514 Depreciation 1 November 2015 1,668 761 25 2,454 Charge for year 130 36 55 221 Disposals (21) (62) (9) (92) 31 October 2016 1,777 735 71 2,583 Net book value 31 October 2016 5,839 91 1 5,931 31 October 2015 6,056 51 - 6,107



13. Investments held by group (charity only) 2016 2015 £000 £000 Analysis of movements in the year Market value at 1 November 5,206 5,574 Add acquisitions at cost 891 1,124 Less proceeds of disposal (1,445) (1,623) Net gains for the year 422 131 5,074 5,206 Cash deposits 626 98 Market value at 31 October 5,700 5,304 Historical cost at 31 October 4,435 4,236 Analysis of investments held at 31 October UK listed investments Direct investments 3,586 3,517 Indirect investments 1,065 1,288 4,651 4,805 Non-UK listed investments Indirect investments 423 401 Cash deposits 626 98 5,700 5,304 The following investment exceeds 5% of the total portfolio value Charities Property Fund 6.7% 9.8% Vanguard Funds plc 5.4% 3.2%

14. Debtors

Group Charity 2016 2015 2016 2015 £000 £000 £000 £000 Trade debtors 17 25 17 25 Other debtors 324 246 291 216 Prepayments 159 155 159 155 Accrued income 892 556 892 556 1,392 982 1,359 952

15. Creditors: amounts falling due within one year

Group Charity 2016 2015 2016 2015 £000 £000 £000 £000 Loans 2 80 2 3 PAYE and Social Security 38 40 38 40 Trade creditors 194 193 194 193 Other creditors 524 224 413 179 Accruals 43 37 43 37 Grants payable 25 112 25 112 Deferred income - 1 - 1 826 687 715 565



16. Pension costs a Defined benefits arrangements Until 31 October 2010 the parent charity operated a final salary defined benefit scheme for its permanent employees, which is not contracted out of the State Second Pension. The assets of the scheme are held separately from those of the charity and are invested by the scheme’s Trustee, the Baptist Missionary Society Pension Trust Limited, through delegation, within agreed parameters, to their investment managers. The contributions are determined on the advice of a qualified actuary on the basis of a triennial valuation, the most recent completed valuation being as at 31 December 2012. The actuarial valuation as at 31 December 2015 is currently being finalised. As part of the valuation, a recovery plan will be put into place under which the Employer has approved to paying deficit contributions due by September 2019 (£1,255,000), September 2022 (£579,000), September 2025 (£579,000) and September 2026 (£193,000). The Employer has also approved payments of £450,000 every three years towards the expected cost of the expenses of running the Scheme, with the first one due by the end of September 2019. A full valuation of the liabilities has not been carried out as at 31 October 2016. The liabilities of the Scheme have been calculated by updating the preliminary results of the actuarial valuation as at 31 December 2015 to allow for the passage of time, benefits paid out and changes in actuarial assumptions over the period from 31 December 2015 to 31 October 2016. There are no contributions expected to be paid to the Scheme over the year ending 31 October 2017. Assumptions

As at As at 2016 2015 Discount rate 2.80% 3.90% Inflation assumption (RPI) 3.70% 3.40% Inflation assumption (CPI) 2.70% 2.40% Rate of increase in salaries 2.80% 2.50% Pension increases: Pre 6 April 2006 benefits (RPI max 5%) 3.55% 3.30% Pre 6 April 2006 benefits (CPI max 5%) 2.65% 2.40%

Pre 6 April 2006 benefits (greater of RPI/CPI max 5%) 3.60% 3.35% Pre 6 April 2006 benefits (greater of RPI/CPI max 2.5%) 2.35% 2.25% Assumed life expectancies on retirement at age 65 are:

As at As at 2016 2015 Males retiring immediately 23.6 24.8 Females retiring immediately 24.8 26.0 Males retiring in 20 years time 25.6 27.0 Females retiring in 20 years time 27.0 28.3



16. Pension costs (cont) The assets in the scheme were:

Value at Value at 2016 2015 £000 £000 Equity 14,596 12,338 Bonds 15,319 12,947 Property and infrastructure 1,479 2,451 Cash and Net current assets 11 215 Fair value of scheme assets 31,405 27,951 The actual return on assets over the period was:

4,194

681

Present value of funded obligations 36,756 29,839 Fair value of scheme assets 31,405 27,951 Deficit in funded scheme (5,351) (1,888) Present value of funded obligations - - Unrecognised past service cost - - Deficit (5,351) (1,888) Net liability in balance sheet (5,351) (1,888)

Reconciliation of opening and closing balances of the present value of the defined benefit obligation

2016 2015 £000 £000 Benefit obligation at beginning of year 29,839 30,024 Interest cost 1,145 1,153 Actuarial (gains) / losses 6,728 (420) Benefits paid (956) (918) Benefit obligation at end of year 36,756 29,839

Reconciliation of opening and closing balances of the fair value of scheme assets

2016 2015 £000 £000 Benefit obligation at beginning of year 27,951 26,911 Interest income on scheme assets 1,076 1,060 Return on assets, excluding interest income 3,118 (379) Contributions by employers 377 1,450 Benefits paid (956) (918) Scheme administration cost (161) (173) Fair value of scheme assets at end of year 31,405 27,951



16. Pension costs (cont) The amounts recognised in profit or loss:

2016 2015 £000 £000 Service cost - administrative cost 161 173 Net interest on the net defined benefit liability 69 93 Total expense 230 266

Remeasurements of the net defined benefit liability (asset) to be shown in OCI:

2016 2015 £000 £000 Actuarial (gains) / losses on the liabilities 6,728 (420) Return on assets, excluding interest income (3,118) 379 Total remeasurement of the net defined benefit liability (asset) to be shown in OCI 3,610 (41)

Estimation of next year’s income statement

The amounts recognised in the income statement are: 2017 £000 Scheme expenses 170 Net interest on the net defined benefit liability 150 Total expense 320

Baptist House Limited For the employees of Baptist House Ltd, in which the charity has a one half share, benefits in respect of services prior to 1 January 2012 are provided through the Defined Benefit (DB) Plan within the Baptist Union Staff Pension Scheme (BUSPS). The table below summaries the main results of the most recent actuarial valuations of the BUSPS and the Defined (DB) Plan in the BPS. These valuations were performed by a professional qualified Actuary using the Projected Unit Method. Date of valuation 1 January 2014 Date of next valuation due 1 January 2017 Market value of scheme assets (A) £7.3m Technical provisions (B) £12.4m Deficit {(B) – (A)} £5.1m Funding level {(A) / (B)} 59% As a result of the valuations, it was agreed to increase deficiency contributions from their current levels to an aggregate between the employers of £759,000 pa from 1 January 2016. Under the schedule of contributions this amount will increase each January in line with RPI inflation until 31 December 2023, and is split between the BUSPS sponsoring employers in line with their estimated share of the BUSPS liabilities, the Baptist House Limited’s current share being approximately £44k pa. The Recovery Plan that sets out these contributions envisages deficiency contributions being required for some 10 years.



16. Pension costs (cont) The financial assumptions underlying the valuation were as follows: Type of assumption

% pa

RPI price inflation assumption 3.60 CPI price inflation assumption 2.85 Pensionable Salary increases (CPI plus 1.0% pa) 3.85 Assumed investment returns - Pre-retirement 5.10 - Post retirement 3.95 Deferred pension increases - Pre April 2009 3.60 - Post April 2009 2.50 Pension increases - Pre April 2006 3.40 - Post April 2006 2.30 The next actuarial valuation of the Staff Scheme is due to take place not later than as at 1 January 2017. The result of this valuation is expected to be available by the end of 2017. b Defined contributions arrangements Since 1 November 2010, employees can join the defined contribution section of the scheme operated by Friends Life and from 1 February 2014 employees have been contractually auto-enrolled into the scheme. The employer made contributions totalling £401,867 (2015: £409,489) into this section of the scheme. During the year ended 31 October 2016, payments totalling £377,000 were made into the Defined Benefit section of the scheme (2015 - £1,450,000). This was a payment against the ten-year recovery plan. The contributions due to be paid into the scheme at the year-end amounted to £50,168 (2015: £0). 17. Analysis of net assets between funds

Unrestricted Funds

Designated Funds

Restricted Funds

Endowment Funds

Total

2016

Total 2015

£000 £000 £000 £000 £000 £000 Tangible fixed assets - 5,288 1,034 - 6,322 6,446 Investments 1,835 1,301 754 1,810 5,700 5,304 Current assets 2,797 - 388 - 3,185 2,995 Current liabilities (715) - (111) - (826) (687) Pension fund (5,513) - - - (5,513) (2,067) (1,596) 6,589 2,065 1,810 8,868 11,991



18. FRS102 transition

In preparing these accounts, the Trustees have considered whether in applying the accounting policies required by FRS102 and the Charities SORP (FRS102) a restatement of comparative items was needed.

The transition to FRS102 has resulted in certain changes to the accounting policies used previously and the prior year comparative amounts have been restated for adjustments required on the adoption of FRS102.

FRS102 required investments to be valued at bid price, rather than mid-price.

In applying the requirement to recognise employee benefits, a liability has been recognised at the date of transition and at subsequent reporting dates for an accrual for the value of annual leave that staff are entitled to and have carried forward from one accounting year to the next.

The provision for pension scheme deficit recovery payments relates to the plan in place in respect of Baptist House Ltd’s membership of the Baptist Union Staff Pension Scheme (BUSPS).

In accordance with the requirements of FRS102, the table below shows the reconciliation of opening funds balances with those previously shown.

Funds at 1 November 2014 reconciliation

Unrestricted funds

Group Restricted

funds Endowment

funds Unrestricted

funds

Charity Restricted

funds Endowment

Funds £000 £000 £000 £000 £000 £000

Funds at 1 November 2014 as previously stated 7,888 1,389 1,607 7,888 1,389 1,607 Revaluation of investments at bid price (7) - (3) (7) - (3)Staff holiday accrual (22) - - (22) - - Provision for BHL pension scheme deficit (156) - - (156) - - Funds restated under FRS102 7,703 1,389 1,604 7,703 1,389 1,604

Funds at 1 November 2015 reconciliation

Unrestricted funds

Group Restricted

funds Endowment

funds Unrestricted

funds

Charity Restricted

funds Endowment

Funds £000 £000 £000 £000 £000 £000

Funds at 1 November 2015 as previously stated 8,597 1,971 1,639 8,597 1,611 1,639 Revaluation of investments at bid price (9) - (2) (9) - (2)Staff holiday accrual (27) - - (27) - - Provision for BHL pension scheme deficit (178) - - (178) - - Funds restated under FRS102 8,383 1,971 1,637 8,383 1,611 1,637



18. FRS102 transition (cont) Reconciliation of net income as shown in Statement of Financial Activities

Group Charity Unrestricted Restricted Endowment Unrestricted Restricted Endowment funds funds funds funds funds funds £000 £000 £000 £000 £000 £000 Net income for year ended 31 October 2015, as previously stated 990 427 (7) 990 39 (7) Movement in staff holiday accrual (5) - - (5) - - Movement in Defined Benefit Pension Scheme now treated as component of net

income (231) - - (231) - - Adjustment for gain on investments now

treated as component of net income

92

-

39

92

39

Net income for year ended 31 October 2015 under the Charities SORP (FRS102) 846 427 32 846 39 32

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