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2020-12-31-accounts

THE REPRESENTATIVE BODY OF THE CHURCH IN WALES

Annual Report and Accounts 2020 2020

CONTENTS

Chair’s Introduction ................................................................ 01 Objectives and Activities ......................................................... 02 Achievement and Performance .............................................. 03 Clergy Pension Scheme .......................................................... 05 Financial Review .................................................................... 06 Future Plans ............................................................................11 Governance and Management ............................................... 13 The Provincial Structure .......................................................... 15 Statement of Trustees’ Responsibilities .................................. 16 Independent Auditors’ Report ................................................. 17 Statement of Financial Activities .............................................. 20 Balance Sheet ........................................................................ 21 Cash Flow Statement ............................................................. 22 Notes to the Accounts ............................................................. 23 Ten Year Review – General Funds ......................................... 37 Reference and Administrative Information .............................. 38

Further copies of this report may be downloaded from the Church in Wales website:

https://www.churchinwales.org.uk/en/publications/administration-and-business/Annual_Report_Accounts/ or by contacting:

The Representative Body of the Church in Wales, 2 Callaghan Square, Cardiff . CF10 5BT Telephone: 029 2034 8200 E-Mail: accounts@churchinwales.org.uk Website: www.churchinwales.org.uk Charity Registration Number 1142813

Front cover photographs:

top left: The new Bishop of Monmouth, Cherry Vann is consecrated.
bottom left: Bishop Gregory conducts Covid-safe ordinations at St Asaph Cathedral.
top middle: Outdoor worship at Holy Trinity Church in Corris, Bro Cyfeiliog a Mawddwy Ministry Area.
bottom middle: Live-streaming a service at St Paul’s Church, Craig-y-Don, Llandudno.
bottom right: Hospital Chaplain Michael Marsden wearing full PPE to visit patients.

Printed on 100% recycled paper

The Representative Body of the Church in Wales | Annual Report and Accounts 2020

CHAIR’S INTRODUCTION

Twelve months ago, when writing my introduction to the 2019 annual report, the nation was in the midst of anxiety and unsettling uncertainty as the coronavirus pandemic had recently necessitated the imposition of lockdown and, for us in the Church in Wales, the suspension

of public worship. As I write this introduction to the 2020 annual report, we remain in the shadow of the pandemic but, mercifully, with positive signs of the situation improving.

It goes without saying, 2020 was a very diffi cult year. But, we should be very proud of how our church communities, our clergy, lay ministers and volunteers so readily adapted with vigour, compassion and creativity to the change in circumstances to enable mission and worshipping life to continue and I know that these eff orts have been a great source of support to so many within our communities. 2020 also marked the Church in Wales’s centenary and, while many of the events planned to mark the event had to be cancelled, many of our church communities’ responses to the needs of the pandemic was perhaps the best demonstration of our contribution to Welsh life.

As this annual report sets out, the fi nancial impact of the pandemic on the Representative Body has not been inconsiderable. Investment income, the source of the Representative Body’s income, reduced by 17% as a result of the general volatility in the investment markets during the year, and compounded by many companies withholding dividend payments. In April 2020 the Representative Body made the important and fully intentional decision to provide particular fi nancial support to the dioceses to ensure the provision of ministry was not compromised by any fi nancial implications arising from the pandemic.

I know that many people across the province have been supporting their parishes/ministry areas by giving generously and sacrifi cially to meet parish share commitments, generosity which has been crucial to your dioceses. The Representative Body was much inspired by such generosity and wanted to demonstrate similar commitment.

Such was COVID-19’s dominance during 2020 it would be easy to think that little else happened,

which really was not the case. In March, the Representative Body endorsed a series of proposals made by its Investment Committee and Ethical Investment Group to update the Church in Wales’s Ethical Investment Policy. The most signifi cant of these changes is that the Representative Body will no longer hold investments in companies that derive more than 5% of their total turnover from the production or extraction of fossil fuels. Eff orts to address climate and environmental matters are gathering pace and this divestment is an important step on our way.

In my introduction to the 2019 annual report I referred to the Independent Inquiry into Child Sexual Abuse (IICSA), the hearings for which the Church in Wales participated in July 2019. The Inquiry’s report into the Anglican Church in England and Wales was published in October 2020. Since the report’s publication the Representative Body has committed to increase its provision of specialist safeguarding staff and to invest in the development of software to aid the administration of Disclosure and Barring Service (DBS) certifi cations. Safeguarding is an area of work that requires constant vigilance, adaptability and willingness to improve and the Representative Body will do all it can to make sure that the Church in Wales is equipped and able to live this out in daily church life.

With recovery from the eff ects of the pandemic being uppermost in everyone’s minds at the moment, the Representative Body’s role in stewarding of the Church in Wales’s provincial resources will come into sharper focus. I am pleased that greater collaboration between the Representative Body, the Standing Committee and the Bench of Bishops to discern a strategic vision for use of the province’s fi nancial resources is developing accordingly.

Finally, as the Representative Body begins work to appoint my successor as Chair, I would like to reiterate my thanks to all the trustees, members of committees, our advisors and all the RB’s staff who have supported me during my time as Chair. Much was asked of both the trustees and staff during 2020 and I am grateful for their commitment, support, wisdom and hard work. I am sure my successor will enjoy similar support during their time in this fascinating role, and I assure them of my prayers and good wishes.

James Turner Chair of the Representative Body

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Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

OBJECTIVES AND ACTIVITIES

When planning its activities for the year, the Representative Body has taken into account the Charity Commission’s guidance on public benefi t and their specifi c guidance on charities for the advancement of religion. The Representative Body provides signifi cant fi nancial support for the activities of the Church in Wales which is present in all communities throughout Wales. As such, the Representative Body’s assets (which include most church buildings and church halls) are available to the whole community. Regular worship, marriages, funerals, baptisms, pastoral care and outreach both at home and overseas are just some examples.

Key Objectives

The Representative Body’s key objectives are:

Ongoing Objectives

  - **Maintaining Diocesan Support – To maintain fi nancial support for dioceses through the Block Grant and other provisions.**

  - **Financial Stability – To ensure fi nancial stability with regard to the clergy and staff pension schemes.**

  - **Fund Performance – To make investment returns that exceed agreed benchmarks.**

  - _**2020 Vision**_ **– To support the work related to** _**2020 Vision**_ **by working closely with the Governing Body’s Standing Committee and dioceses.**

  - **Safeguarding – To continue to strengthen the Church’s capacity in safeguarding as we seek to be a Safe Church.**

Additional Objectives for 2020

Additional Objectives for 2021

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The Representative Body of the Church in Wales | Annual Report and Accounts 2020

ACHIEVEMENT AND PERFORMANCE

The Representative Body made available an additional £6.3 million in fi nancial assistance to the dioceses in 2020 as the wider Church came to terms with the COVID crisis.

Overall Financial Position

The results for the year are shown in the Statement of Financial Activities on page 20.

There was a positive movement in total net funds for 2020 of £20 million. This was primarily due to investment gains of £40 million.

After considering other recognised gains and losses, the total funds shown on the balance sheet of the Representative Body at 31 December 2020 increased from £784 million to £804 million. Further details on the investment performance are given on page 6.

General Funds

Over 95% of the Representative Body’s income is generated through its investments. During 2020, the Representative Body’s investment income decreased by £3.5 million – a reduction of 17%. This was attributable to the COVID-19 pandemic with companies withholding dividends in uncertain times. Expenditure increased by £4.4 million, or 19.2%. This was a result of additional funding provided to dioceses in 2020 to assist parishes in the wake of the pandemic.

The resulting net loss of £9.4 million compares to recent annual losses (as highlighted in the Ten Year Review on page 37) of around £2 million.

However, despite the turbulent year, stock markets remained resilient and the investment portfolio produced net unrealised gains of £39 million which off set the income and expenditure loss and resulted in an overall increase in General Funds of £14 million.

Total Assets of the Representative Body

Although it might appear from the Balance Sheet on page 21 that the Representative Body is a wealthy charity, it is of vital importance that Church members understand the nature of the Representative Body’s total funds.

The chart on page 4 explains how the Representative Body’s assets are structured.

The total assets of the Representative Body as at 31 December 2020 stood at £1,041 million.

However, as the Clergy Pension Scheme is an unfunded scheme (which means that the assets that are set aside to match the liabilities of the Scheme are not segregated from the assets of the Representative Body) the total assets include £222 million and £15 million which represent the clergy and staff pension liabilities respectively.

The net eff ect of this means that the total funds excluding the pension liabilities of the Representative Body are £804 million.

These funds are split as follows:

----- Start of picture text -----
£000
General Funds 477
Restricted Funds 5
Designated Funds 322
Total 804
----- End of picture text -----

The Restricted Funds of £4.6 million represents the value of the former St Michael’s College site, held as an endowment fund.

The Designated Funds totalling £322 million are set out in detail on page 34. However, 82% of this total comprises the cost or valuation of the parsonages, churches and church halls. These are not incomegenerating assets and refl ect the working plant of the Church. The remaining balance is specifi cally earmarked for future costs, such as the Evangelism Fund, church repairs and future pension liabilities.

This leaves the General Funds which total £477million. It is these assets that are invested in stock exchange securities and investment property on a total returns basis to generate the income and capital returns required to ‘run’ the Representative Body. The Representative Body currently aims to achieve a 5.5% total return, although this may not be sustainable in the future.

The income generated by these investments of around £15 million per annum is used to fund the Block Grant to dioceses, clergy training through

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Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

St Padarn’s Institute, the bishops and the provincial offi ce. With current expenditure levels of around £17 million, the Representative Body is running an income and expenditure defi cit of around £2 million per annum (excluding exceptional COVID support payments). As can be seen on page 37, the Representative Body’s expenditure has for many years exceeded its income, but this is off set by the capital gains. The Trustees are aware that commitment to structural expenditure which progressively erodes the capital base of the Representative Body will reduce its income and ability to fund the ministry and mission of the whole Church in years to come.

Total Funds
of the Representative Body		 £1,041 million
Less:
Clergy and Staf Pension
Scheme liabilities		 (£237 million)
Balance £804 million
Less:
Restricted Funds		 (£5 million)
Less:
Designated Funds		 (£322 million)
Balance
– representing General Funds		 £477 million

Supporting Ministry

Grants to Dioceses

The Representative Body continues to provide each diocese with a Block Grant to help with costs such as stipends, clergy pensions (current service contributions) and certain other categories of expenditure, so enabling provincial funding to be used more fl exibly by the dioceses.

In 2020 the total Block Grant was set at £6.2 million, however as a result of the COVID pandemic, it was agreed to provide the dioceses with additional fi nancial assistance of £6.2 million, which meant that the total funding that was provided to dioceses in 2020 was £12.4 million.

The Representative Body Trustees agreed early in 2021 that in addition to the Block Grant, additional fi nancial assistance would be provided to the dioceses and have pledged £12.4 million in funding for 2021.

The Representative Body has agreed to maintain the Block Grant at £6.2 million up to and including 2022.

In addition, Bishops’ costs (including their offi ce costs) are met directly by the Representative Body.

Overall the Representative Body meets over 30% of the total expenditure of the Church.

It is this £477 million that is held as investment assets and generates the returns (income and capital).

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The Representative Body of the Church in Wales | Annual Report and Accounts 2020

CLERGY PENSION SCHEME

Clergy Pension Scheme

The Clergy Pension Scheme is a non-contributory fi nal salary scheme and is a signifi cant benefi t for the clergy.

The Clergy Pension Provision forms part of the overall investments of the Representative Body and the long-term challenge is to ensure that pension liabilities are held as a stable proportion of the Representative Body’s total assets.

An incumbent with 40 years’ uninterrupted service, retiring in 2021 will receive a lump sum of up to £38,045 and an annual pension of £15,218. On the death of a cleric, a qualifying surviving spouse or civil partner receives 60% of the cleric’s pension, which in 2021 is £9,130 for full service.

The Clergy Pension Provision is shown in note 21 on page 33. The principal expenditure is the payment of pension benefi ts.

The membership of the Clergy Pension Scheme including the movements during the year are shown below:

----- Start of picture text -----
Clergy Pension Scheme Membership
Active Deferred Pensioners Total
Membership at 1 January 2020 403 233 845 1,481
Members returning to active status 2 (2) - -
New entrants 33 - - 33
Leavers with deferred benefi ts (14) 14 - -
New divorcee deferred - 1 - 1
Transfers out - (1) - (1)
Retirements (15) (11) 26 -
Deaths (2) - (50) (52)
New surviving spouses or civil partners - - 18 18
Membership at 31 December 2020 407 234 839 1,480
----- End of picture text -----

The Clergy Pension Scheme is reviewed every three years and the results of the actuarial valuation that took place as at 31 December 2019, together with the previous three valuations are highlighted below. The new rates took eff ect from 1 January 2020. The next actuarial valuation is due to take place at 31 December 2022.

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Clergy Pension Scheme Funding
2019 2016 2013 2010
Market Value of the Representative Body’s
£719m £607m £512m £452m
General Funds
Value of Past Service Liability £196.2m £187.8m £158.9m £141.9m
Liability as a proportion of General Fund 27.3% 30.9% 31.1% 31.4%
Current Service Employer’s contribution 36.5% 38.8% 32.7% 27.2%
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Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

FINANCIAL REVIEW

Stock exchange securities increased during the year by 8.7%.

Investment Policy

The power to invest all monies held by the Representative Body in trust for the Church in Wales is set out in section 20 of Chapter III of the Constitution, which gives wide ranging authority for investment.

Investment Objectives

The objectives of the Representative Body’s investment policy are to:

Diversifi cation in a range of assets is essential to reducing risk, and therefore forms an important part of the investment strategy of the fund. The assets in which the fund is invested are regularly reviewed.

Investment Managers

Sarasin & Partners and Newton Investment Management each manage one half of the stock exchange investment fund, under a Global Multi-Asset mandate.

Cluttons LLP manage both the investment properties and the property unit trusts.

Overall Fund Performance

During 2020 the total value of the Representative Body’s total investments increased by 4.5% to £749 million as shown on the Balance Sheet on page 21.

The capital value of the fund is of particular signifi cance in assessing the proportion of assets required to meet the Clergy Pension Scheme liabilities which were valued at £222 million on 31 December 2020 (2019: £196.2 million).

Total Return

The total return (both income and capital growth) from the Representative Body’s fund during 2020 was 7.9%, outperforming the Teknometry comparator return of 5.4%. Over three and fi ve years the annualised returns also outperformed the comparator as highlighted in the table below.

----- Start of picture text -----
Representative Body Total Return v Benchmark
12
10.1
9
7.9 7.9
7.8
6
5.4 5.3
3
0
1 Year 3 Years 5 Years
Representative Body Teknometry CIG Charity Fund Index
----- End of picture text -----

Comparator

The performance of the Representative Body’s total investment fund, including the stock exchange investments and property investments is measured relative to the Teknometry CIG Charity Fund Universe Benchmark.

The property portfolio is measured against the MSCI Monthly Index.

Stock Exchange Investments

The value of stock exchange securities increased over the year from £599 million to £651 million at 31 December 2020, an increase of 8.7%.

Investors faced a variety of challenges over a period in which the coronavirus pandemic and the extraordinary response from policymakers exerted a signifi cant infl uence on fi nancial markets.

Following a period of handsome returns from risk assets for investors in 2019, the fi rst quarter of 2020 proved to be a seismic one for fi nancial markets. Equity markets hit new highs in the middle of February before succumbing to worries about the repercussions of the coronavirus outbreak as the magnitude of the sudden hit to the economy became clear.

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The Representative Body of the Church in Wales | Annual Report and Accounts 2020

After the sharp sell-off , risk assets, and in particular global equities, enjoyed a breathtaking ‘V’-shaped recovery following the 23 March 2020 lows, with markets buoyed by the scale of the monetary and fi scal stimulus, largely shrugging off concerns of a ‘second wave’ of pandemic-induced lockdowns. September saw markets stumble again on the possibility of a contested US Presidential election result, coupled with worries about a renewal of COVID-19-induced lockdowns. However, markets quickly recovered to continue their upward trajectory, refl ecting a relatively benign outcome to the US presidential election and more importantly, positive news on several of the leading COVID-19 vaccine contenders, opening the door to the normalisation of social and economic activity in 2021. Additional impetus was provided as two long-running political wrangles were settled – the fi scal stimulus bill in the US, and the Brexit deal between the EU and the UK.

Over the 12-month period, Asia-Pacifi c ex-Japan equities led the pack, delivering a +17.6% return in sterling terms. North American equities were not far behind, delivering +16.4% return in sterling terms. Emerging-market equities produced a +11.9% return and Japanese equities returned +11.1%. European ex UK equities returned +8.6% but UK equities fell, returning -9.8%, with the bulk of the underperformance attributable to the UK market’s heavier skew towards fi nancials and energy companies.

Asset allocation ranges and the allocation as at 31 December 2020 are shown below:

----- Start of picture text -----
Asset Allocation Range
Allocation at
Asset class Range
31 December 2020
UK Equities 15-40% 26%
Overseas Equities 20-70% 50%
Fixed Interest 2-25% 9%
Alternatives 0-15% 13%
Cash 0-25% 2%
----- End of picture text -----

Investment Property

The value of the Representative Body’s investment property portfolio decreased over the year from £77.1 million to £73.9 million.

The Representative Body directly holds 11 investment properties and also holds units in 3 Property Units Trusts (PUTs).

The direct properties are independently valued at each year end and as at 31 December 2020 they were valued at £57 million compared to £58.9 million at the end of 2019.

The PUTs investments were valued at 31 December 2020 at £16.8 million compared to £18.2 million the previous year. This was due to the planned closure of the CLOF II PUT, with £510k of capital returned during 2020 coupled with a drop in unit values of the remaining holdings.

The commercial property portfolio equalled or outperformed the MSCI Monthly Index over all periods as shown in the table below.

----- Start of picture text -----
Property Portfolio Returns
% Return
10
9
9.1
8
7 7.5
6
5 5.5
4 4.4
3
3.0
2 2.8
1
1.0 1.0
0
1 Year 3 Years 5 Years 10 Years
Representative Body MSCI Monthly Index
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Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

Ethical Investment Policy Statement

The Church in Wales has had an Ethical Investment Policy for many years. Informed by the work of Churches Ethical Investment Group and supported by the Representative Body’s Investment Committee, the current policy statement was adopted by the Governing Body of the Church in Wales in April 2021.

As a Christian Church, we are tasked to co-operate with God’s active presence in the world and with proclaiming the values of the kingdom of God. This means that the Church has a particular interest in promoting all that furthers justice and peace, that enables full human fl ourishing, that honours creation and that builds creative human communities.

The Church in Wales wishes to have an investment policy that is ethical and consistent with the furtherance of our aims and objectives. We believe that it is entirely appropriate and possible to operate such a policy alongside the requirement to achieve the best returns from our investments, and to use our investments as an ethical means of contributing to the cost of ministry and mission in the Province.

Our aim is to invest in successful companies that are committed to developing their business in the interests of their shareholders, customers, local communities and employees by operating:

We recognise the complexities surrounding the activities of companies in which we can invest, and reserve the right to make investment decisions on a case by case basis. We will endeavour to engage with companies which are in actual or potential breach of this policy or where concerns exist over environmental, social and governance issues before considering disinvestment.

It is the policy of the Church in Wales not normally or knowingly to invest in any company:

The Church in Wales wishes to be a well informed and responsible investor, and to this end is represented on the Church Investors Group, which is a means of accessing research, obtaining reliable information, sharing best practice with other member organisations, and exercising combined shareholder infl uence.

A valuable relationship exists between the Investment Committee and the Church in Wales Ethical Investment Group to which the Committee refers problematic cases, and from which it receives an annual report.

In its policy for investment, the Church in Wales will use its best endeavours not to be associated with companies whose products or policies confl ict with these aims or to invest in companies which:

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The Representative Body of the Church in Wales | Annual Report and Accounts 2020

Risk Management Policy

  1. Emergence of unknown tax liabilities;

The Representative Body has an extensive risk register which is overseen by the Audit and Risk Committee with regular reviews by senior management and it is formally reviewed annually by the Representative Body.

The 2020 risk register identifi es the major risks to which the organisation is exposed and the scope of such risks. The register then identifi es the controls and procedures which have been established to manage and mitigate those risks, from which there are defi ned action points, strategies and timescales to mitigate risk further.

The 2020 risk register has identifi ed the following as the most signifi cant risks:

  1. Poor total returns from the Representative Body’s investments as a result of economic events and uncertainty in the market;

  2. Insolvency of a diocese;

  3. Falling congregation numbers and increasing age profi le leading to an accelerating decline in church attendance;

  4. Suspension of public worship due to unforeseen and uncontrollable circumstances;

  5. Organisational structure of the Church in Wales no longer appropriate for the needs of the organisation;

  6. Cyber security breach;

  7. Unauthorised network access;

  8. Increasing numbers of redundant churches;

  9. Falling clergy numbers;

  10. GDPR breach, including the loss of fi nancial or sensitive data;

  11. Failure by any part of the Church in Wales to follow the Safeguarding policy;

  12. Increasing demands on property staff team caused by lack of capacity at parish level;

  13. Continuing defi cit of the Staff Retirement Benefi t Scheme;

  14. Diffi culties in recruiting suffi cient committee members with appropriate skills and experience.

The Trustees keep these risks and steps taken to mitigate them under active review.

Reserves Policy

At 31 December 2020, the Representative Body’s total funds amounted to £804 million (2019: £784 million). This includes the Restricted and Designated Funds with a combined total of £327 million.

The Restricted Funds which total £4.5 million represent an Endowment Fund in respect of the former St Michael’s College site.

The Designated Funds total £322.5 million and £262 million is in respect of the non-investment properties held by the Representative Body, represented by church ‘plant’ – churches, church halls and parsonages.

In determining the available reserves of the Representative Body, it is considered prudent to exclude the Restricted and Designated Funds, as these funds are not available to spend. The Representative Body therefore considers that the General Fund balance of £477 million (2019: £463 million) represents the reserves available.

As shown in the Balance Sheet on page 21, the Representative Body’s General Fund balance is £477 million which as shown in the table on page 4, is made up of investment assets. It is those investment assets held by the Representative Body that generate the overwhelming majority of both its income and capital gains.

It is therefore in the interest of the Church as a whole to carefully steward and manage its investment assets in order to maintain the current levels of income and capital gains so that the Representative Body can continue, for both this generation and generations to come, the current levels of support it provides to dioceses and parishes.

  1. Clergy Pension Scheme assets not ringfenced with increased pension liabilities impacting RB funds;

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Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

General Funds

The amount of General Funds held by the Representative Body at 31 December 2020 totalled £477 million (2019: £463 million).

The total return expenditure policy is based on the amount of General Funds held by the Representative Body. The policy is to set spending at a level intended to provide vital funding for the Church in the short term whilst preserving the investment base to provide sustainable increases in annual expenditure into the future.

Designated Funds

The Trustees have the power to designate general funds to be retained for an agreed purpose where this is considered to be prudent.

At 31 December 2020 Designated Funds amounted to £323 million (2019: £317 million). Details of the Designated Funds are set out on page 34. The most signifi cant fund is the Revaluation Reserve, with a balance of £228 million, and represents the diff erence between the market values assigned to noninvestment property (including parsonages, churches, church halls and sundry property) and the underlying cost. As such, the Revaluation Reserve can only be realised by the disposal of the non-investment property held by the Representative Body for the day to day work of the Church.

All designated funds are reviewed annually and returned to general funds in the event that the purpose of their designation can no longer be justifi ed.

Restricted Funds

At 31 December 2020 Restricted Funds amounted to £4.6 million (2019: £4.6 million) held by the Representative Body, and represents the value of the former St Michael’s College site.

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The Representative Body of the Church in Wales | Annual Report and Accounts 2020

FUTURE PLANS

An assessment of forthcoming strategic priorities for the Representative Body.

Short to medium term issues

COVID-19

Since the beginning of the pandemic in March 2020 the Trustees have been meeting remotely to consider the impact of the pandemic on the asset base, income streams and cashfl ows of the Representative Body. In addition to the three ordinary meetings of the Trustees, two extraordinary meetings took place.

Investment Managers have modelled the potential impact of the emergency on the assets they have under management and have met remotely with the Trustees to discuss the situation. Cashfl ow has been very closely monitored with forecasts regularly updated.

During 2020, work practices were amended to facilitate meetings on a remote basis and provisions were made to ensure employees were able to work from home eff ectively. Plans are being developed to allow staff to return to the offi ce safely once legislation and government advice permits.

Support for the dioceses

The Representative Body continues to provide support for the wider Church in Wales in a broad range of ways. It has committed to maintaining the level of Block Grant funding to dioceses (some £6.2 million) up to and including 2022. In doing so, the Representative Body is operating at a planned defi cit and the drawdown of funds to support this strategy needs to be carefully managed. The Representative Body also provides practical professional support to the Church in several key areas.

Additional fi nancial support was provided to the dioceses during two quarters of 2020 to alleviate pressure on their cashfl ows and allow them to provide support to their parishes during the pandemic. The Trustees continue to meet remotely and will, in early 2021, meet to consider the allocation of additional fi nancial support to the dioceses.

Clergy Remuneration

In 2017, the Representative Body commissioned a holistic review of the clergy remuneration package. This considered the best way to support today’s patterns of ministry in the context of modern lifestyle

and family life. The working group which undertook the review produced a report in May 2019 which was highly detailed, incorporating complex fi nancial models and projections, and made 35 recommendations. The report also placed signifi cant emphasis on clergy well-being. In response to the complexities involved and the need to ensure that the implementation of any changes to current arrangements were properly considered and planned, the Representative Body formed a small implementation group to advise it on the implementation strategy. This implementation group has produced its report which is being considered by the Representative Body. Specialist legal and pensions-related advice is currently being sought to enable the Representative Body to make fi nal decisions.

The Archdeacons’ Group has considered in detail the recommendations within the May 2019 report that related to clergy well-being and a report with recommendations is due to be presented to the Representative Body in 2021.

Safeguarding

Continued investment in the Church in Wales’ safeguarding policy, management of safeguardingrelated casework, and resources for safeguarding training remains a key priority for the Representative Body to ensure that the Church in Wales is a safe place for all, including children and adults at risk. The work of the Independent Inquiry into Child Sexual Abuse (IICSA) published its report into the Anglican Churches in England and Wales in October 2020, which included a number of areas for attention. The Church in Wales’ formal response to the report was submitted in early 2021. The Representative Body has commissioned and launched a bespoke online case management system for the Provincial Safeguarding Team (which will be populated with historic case records as well as new cases) and has included budgetary provision for the appointment of additional staff to the Provincial Safeguarding Team, including a Director of Safeguarding and an additional Provincial Safeguarding Offi cer.

A revised Safeguarding Policy together with supporting procedural guides was launched in the autumn of 2020. Further developments to the oversight of the Church in Wales’ safeguarding function will be developed during 2021.

Training for Ministry

During 2020 a new provincial programme of continual ministerial development (CMD) was launched to support clergy development at all stages of ministry.

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Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

The programme includes provincial elements common across the province as well as elements distinct to each diocese to refl ect specifi c contextual variation. Life Events resources, aimed at sharing best practice for the conducing of baptisms, weddings and funerals in order to maximise the missional and outreach potential of these events are being prepared in conjunction with the Church of England for launch during 2021.

In 2020 St Padarns underwent a successful Gateway Quality Review. The governance arrangements for St. Padarn’s, particularly its governance relationship with the Representative Body were reviewed with some developments made to the powers and duties of the oversight committee which was renamed the Training, Formation and Ministerial Development Committee.

Cathedrals Review

In 2017 the Governing Body received a report from an independent review into the role, governance and resourcing of cathedrals. Since then the Constitutional requirements for cathedral governance have been updated to allow cathedrals the ability to build governance mechanisms that are more suitable to their own individual circumstances. In 2019, following further discussions about the arrangements for providing funding for the cathedrals, the Representative Body arranged for a small group of trustees to visit each of the six cathedrals to gain a detailed understanding of their local context and specifi c situations. The Representative Body has received a number of updates from the group and a fi nal report with recommendations is expected in 2021. The Representative Body is keen to ensure the cathedrals are adequately funded and supported in their very particular ministries.

Long term issues

Pensions

The actuarial valuation of the Clergy Pension Scheme at 31 December 2019 confi rmed that the Scheme is well funded and continues to represent a prudent proportion of the Representative Body’s total assets. The Representative Body will keep the Clergy Pension Scheme, including its funding and benefi ts, under active review. The next actuarial valuation of the Clergy Pension Scheme is due to take place as at 31 December 2022.

Climate Change

The impact of climate change on the planet is clear and the Church is committed to playing its part to tackle the issue. In 2020 the Representative Body, in line with advice from its Investment Committee and Ethical Investment Group, approved changes to the Church in Wales’ Ethical Investment Policy which included the divestment from any company that derives more than 5% of its total turnover from the the production or extraction of fossil fuels. Also the Representative Body’s People Committee is exploring the possibility of changing the framework for the provision of cars to bishops to permit the provision of electric or hybrid models only. Proposals will be considered in 2021.

Achieving a net zero carbon position in the future is possible but will be extremely challenging and will be a pillar of the Representative Body’s work for years to come, particularly its property-related work. Plans are advanced to appoint a member of staff whose role will be to focus on such eff orts and this appointment was made in the early part of 2021.

Church in Wales Centenary Celebrations

The Church in Wales celebrated its centenary in 2020 and detailed plans were made for various events and initiatives to mark the occasion. While many plans had to be abandoned or delayed due to the realities of the pandemic a communications campaign, focusing on fi lm and social media, on the theme of ‘Our Church in Wales’ was undertaken to raise awareness of the Church and its connection with wider Welsh life.

The Centenary Appeal, launched to support two charities – one at home (homelessness projects with Housing Justice Cymru), one overseas (supporting Christian Aid’s work in South Sudan) – continued but donations have inevitably been aff ected by the pandemic. The Appeal continues and donations are gratefully encouraged.

12

The Representative Body of the Church in Wales | Annual Report and Accounts 2020

GOVERNANCE AND MANAGEMENT

The Representative Body of the Church in Wales was created by a Charter of Incorporation on 24 April 1919 and is constituted to hold all property and investments vested in it in trust for the use and purposes of the Archbishop, Bishops, Clergy and Laity of the Church in Wales. These assets are held in order to maximise the support which can be given to the mission of the Church in parishes throughout the province.

The Representative Body comprises up to 26 members and meets three times a year. The membership and functions of the Representative Body are regulated by Chapter III of the Constitution of the Church in Wales.

Details of the trustees who served during the year and since the year end are set out on page 23. The relationship of the Representative Body to its committees and to the other provincial bodies of the Church in Wales is set out on page 19.

Membership Composition

Trustees (other than ex-offi cio trustees) are appointed for a three-year term of membership. The Representative Body’s membership consists of:

Membership Eligibility

The following are eligible to be members of the Representative Body:

A lay communicant may be elected a member of the Representative Body only for the diocese in which he or she either resides, holds diocesan offi ce or has his or her name on the electoral roll of a parish in such diocese. No full-time employee of the Representative Body, a Diocesan Board of Finance or any other such provincial or diocesan body within the Church in Wales shall be eligible to be a member of the Representative Body.

Membership – Induction and Training

It is the policy of the Representative Body that its members should be provided with training appropriate to their duties both as charity trustees and as members of its committees. New members are given the opportunity to attend external training events for charity trustees, and all new members are also invited to the Provincial Offi ce to meet staff and to learn more about the work of the Representative Body, the Governing Body and the Bench of Bishops.

In addition, members are off ered training tailored to meet specifi c gaps in knowledge or experience, often linked to a member’s work with the Representative Body’s committees. In the past this training has proved to be particularly benefi cial in the complex and specialised areas of investments and audit.

Committees

The Representative Body has six committees – Investment, Property, People, Audit and Risk, Training, Formation and Ministerial Development (formerly St Padarn’s Council) and the Cathedrals and Churches Commission – each with specifi c terms of reference and functions delegated by the Representative Body and reviewed every three years.

Investment Committee

The Investment Committee determines the investment strategy for approval by the Representative Body (within the overall policy objectives of the Representative Body and with advice from their appointed advisers) and recommends for the Representative Body’s approval all strategic decisions necessary to manage the investments of the Representative Body within this strategy.

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Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

Property Committee

The Property Committee has responsibility for policy relating to the Representative Body’s non-investment property including churches, parsonages, burial grounds, glebe land, and bishops’ residences and the management of those properties. Its duties are wideranging and include authorising the sale and purchase of properties; developing strategies for dealing with redundant church buildings and churchyards; administering trusts, legacies and bequests; and administering grants for the repair and improvement of properties.

People Committee

The People Committee is responsible for developing policies and procedures for clergy, staff and volunteers in line with good practice and the specifi c legislation that applies to each group. This includes advising the Representative Body on the level of clergy stipends and staff salaries and the terms and funding of the pension schemes for clergy and staff respectively. It has also been given responsibility for overseeing Safeguarding Policy.

Representative Body members are likely to serve the Church in Wales in other ways and some, in particular clergy members, receive remuneration in these other roles. The Representative Body operates a confl icts of interest policy to ensure that members’ other interests – either personal or on behalf of other organisations within the Church – do not exercise an inappropriate infl uence on the Representative Body’s own decision making. A register of members’ interests is maintained and updated regularly, and members are given the opportunity at the beginning of each meeting to declare any potential confl icts with items under consideration.

Fundraising

The Representative Body does not actively fundraise but donations are gratefully received. No complaints have been received in respect of fundraising.

Audit and Risk Committee

The Audit and Risk Committee works with the Representative Body’s external auditors to ensure proper fi nancial reporting practice and compliance with charity accounting requirements. It provides strategic advice on budgetary matters and considers long-term fi nancial forecasts and has a role in monitoring the eff ectiveness of the internal audit function. It also has an important role in overseeing the risk management process and to consider the potential fi nancial exposure on safeguarding matters.

Training, Formation and Ministerial Development Committee (formerly, St Padarn’s Council)

The Training, Formation and Ministerial Development Committee oversees the work of St Padarn’s Institute, providing academic governance, quality assurance and enhancement, and more broadly, the oversight of training, formation and ministerial development. The Committee is accountable to the Representative Body and is also connected to the Bench of Bishops through the two Bishops who are members of it, one of whom is its Chair.

Cathedrals and Churches Commission

The role of the Cathedrals and Churches Commission is to provide expert advice to diocesan courts and advisory groups on applications for major works to cathedral and church buildings as part of the in-house procedure (or faculty procedure) established by the Church in Wales as a condition of the ecclesiastical exemption from local planning controls.

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The Representative Body of the Church in Wales | Annual Report and Accounts 2020

THE PROVINCIAL STRUCTURE

----- Start of picture text -----
Governing Representative
Bench of Bishops
Body Body
Bench Committees
Standing Joint Finance
Bishops' Portfolio
Committee Meeting
Support
Business Appointments Drafting Legal
Sub-Committee Sub-Committee Sub-Committee Sub-Committee
Training, Cathedrals &
Audit & Risk People Investment Property
Formation Churches
Committee Committee Committee Committee
and Commission
Ministerial
Development
Committee
Safeguarding Ethical
Advisory Investment
Group Group
----- End of picture text -----

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Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

STATEMENT OF TRUSTEES’ RESPONSIBILITIES

The trustees are responsible for preparing the Trustees’ Annual Report and the fi nancial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The law applicable to charities in England and Wales requires the trustees to prepare fi nancial statements for each fi nancial year which give a true and fair view of the state of aff airs of the charity and of the incoming resources and application of resources of the charity for that period.

In preparing these fi nancial statements, the trustees are required to:

The trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the fi nancial position of the charity and enable them to ensure that the fi nancial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. 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.

The trustees are responsible for the maintenance and integrity of the charity and fi nancial information included on the charity’s website. Legislation in the United Kingdom governing the preparation and dissemination of fi nancial statements may diff er from legislation in other jurisdictions.

By order of the Representative Body.

James Turner, Chair

Hilary Wiseman, Deputy Chair

14 June 2021

16

The Representative Body of the Church in Wales | Annual Report and Accounts 2020

INDEPENDENT AUDITORS’ REPORT

Independent Auditors’ Report to the Trustees of the Representative Body of the Church in Wales

Opinion

We have audited the fi nancial statements of the Representative Body of the Church in Wales for the year ended 31 December 2020 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and notes to the fi nancial statements, including a summary of signifi cant accounting policies. The fi nancial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the fi nancial statements:

Basis for opinion

We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having eff ect thereunder. We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the fi nancial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the fi nancial statements in the UK, including the FRC’s Ethical Standard, and we have fulfi lled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the fi nancial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the fi nancial statements is appropriate.

Based on the work that we have performed, we have not identifi ed any material uncertainties relating to events or conditions that, individually or collectively, may cast signifi cant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the fi nancial statements are authorized for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The trustees are responsible for the other information. The other information comprises the information included in the Trustees’ Annual Report and the Chair’s statement. Our opinion on the fi nancial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the fi nancial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the fi nancial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the fi nancial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion:

Responsibilities of trustees for the fi nancial statements

As explained more fully in the Trustees’ Responsibilities Statement on page 16, the trustees are responsible for the preparation of the fi nancial statements and for being satisfi ed that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of fi nancial statements that are free from material misstatement, whether due to fraud or error.

In preparing the fi nancial statements, the trustees are responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charity or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the fi nancial statements

Our objectives are to obtain reasonable assurance about whether the fi nancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to infl uence the economic decisions of users taken on the basis of these fi nancial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

Based on our understanding of the charity and the environment in which it operates, we identifi ed that the principal risks of non-compliance with laws and regulations related to charity law applicable in England and Wales, and we considered the extent to which non-compliance might have a material eff ect on the fi nancial statements. We also considered those laws and regulations that have a direct impact on the preparation of the fi nancial statements such as the Charities Act 2011.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the fi nancial statements (including the risk of override of controls). Audit procedures performed by the engagement team included:

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The Representative Body of the Church in Wales | Annual Report and Accounts 2020

A further description of our responsibilities for the audit of the fi nancial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor’s report.

Use of our Report

This report is made solely to the charity’s trustees, as a body, in accordance with section 144 of the Charities Act 2011 and regulations made under section 154 of that Act. 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’s trustees as a body for our audit work, for this report, or for the opinions we have formed.

Haysmacintyre LLP 10 Queen Street Place Statutory Auditor London 14 June 2021 EC4R 1AG

Haysmacintyre LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

19

Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

Statement of Financial Activities

For the year ending 31 December 2020

----- Start of picture text -----
General Designated Restricted Total Total
Funds Funds Funds Funds Funds
2020 2020 2020 2020 2019
Notes £000 £000 £000 £000 £000
Income from:
Donations and Legacies 120 - - 120 34
Charitable Activities - 715 13 728 1,640
Investments 2 17,339 385 - 17,724 21,205
Other 290 - - 290 250
17,749 1,100 13 18,862 23,129
Expenditure on:
Raising Funds 3 3,106 - - 3,106 3,015
Charitable Activities
Support for Ministry 4 8,867 - - 8,867 10,810
Support for Dioceses and Parishes 5 13,707 1,044 - 14,751 8,008
Other Church Property 6 599 915 - 1,514 2,741
Other Financial Support 7 527 10 16 553 2,055
Communication 8 358 - - 358 385
27,164 1,969 16 29,149 27,014
Net Expenditure before Investment Gains (9,415) (869) (3) (10,287) (3,885)
Net Gains on Investments 38,816 868 - 39,684 87,415
Net Income / (Expenditure) 29,401 (1) (3) 29,397 83,530
Transfers between funds:
Emergency Aid Fund (200) 200 - - -
Climate Change Champion (110) 110 - - -
Other Recognised Gains / (Losses):
-
Gains on revaluation of fi xed assets 1,122 18,407 19,529 5,167
- -
Allocation to Clergy Pension Provision (10,903) (10,903) (26,689)
- -
Transfer (to) / from Clergy Pension Provision (12,750) (12,750) 13,563
- -
Actuarial loss on Staff Pension Scheme (5,350) (5,350) (1,286)
Net Movement in Funds 13,960 5,966 (3) 19,923 74,285
Reconciliation of Funds:
Total Funds brought forward 462,780 316,535 4,553 783,868 709,583
Total Funds carried forward 476,740 322,501 4,550 803,791 783,868
----- End of picture text -----

The statement of fi nancial activities incorporates the statement of comprehensive income.

All activities are continuing.

There is no material diff erence between the net expenditure before investment gains stated above and their historical cost equivalent.

A fund by fund analysis for both the current and prior year is shown in the notes to the accounts.

20

The Representative Body of the Church in Wales | Annual Report and Accounts 2020

Balance Sheet

As at 31 December 2020

----- Start of picture text -----
31 December 2020 31 December 2019
Note £000 £000 £000 £000
Fixed Assets
Non-Investment Properties 12 290,284 271,632
Tangible Assets 13 135 362
290,419 271,994
Investments
Investment Properties 14 57,040 58,905
Property Unit Trusts 15 16,832 18,245
Stock Exchange Securities 16 650,682 598,877
Funds held by Investment Managers 12,964 11,551
Money Market Deposits and Loans 17 11,732 29,395
749,250 716,973
Current Assets
Debtors 18 6,588 6,308
Cash at Bank and in Hand 1,085 1,010
7,673 7,318
Current Liabilities
Creditors: amounts falling due within one year 19 (5,942) (5,968)
Net Current Assets 1,731 1,350
Total Assets Less Current Liabilities 1,041,400 990,317
Long Term Liabilities
Clergy Pension Provision 21 (222,000) (196,200)
Net Assets excluding Staff Pension Liability 819,400 794,117
Defi ned Benefi t Staff Pension Liability 11 (15,609) (10,249)
Net Assets including Staff Pension Liability 803,791 783,868
Capital and Reserves
General Funds 492,349 473,029
Pension Reserve (15,609) (10,249)
476,740 462,780
Designated Funds 22 322,501 316,535
Restricted Funds 23 4,550 4,553
Total Funds 803,791 783,868
----- End of picture text -----

The fi nancial statements on pages 20 to 36 were approved by the Representative Body on 14 June 2021. James Turner, Chair

Mrs Hilary Wiseman, Deputy Chair

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Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

Cash Flow Statement

For the year ending 31 December 2020

----- Start of picture text -----
31 December 2020 31 December 2019
Note £000 £000
Reconciliation of net income to net cash provided by
operating activities:
Net income 29,397 83,530
Adjustment for:
Gains on revaluation of fi xed assets 19,529 5,167
Allocations to clergy pension provision (23,653) (13,126)
Loss on staff pension scheme (5,350) (1,286)
Depreciation of tangible assets 13 239 80
Income from investments 2 (17,724) (21,205)
Expenditure on raising funds 3 3,106 3,015
Gains on investments (39,684) (87,415)
Gains on fi xed assets 12 (21,839) (5,044)
Add:
Movement in debtors 18 (280) (2,874)
Movement in creditors 19 (26) 187
Movement on clergy pension provision 21 25,800 15,500
Movement on staff pension liability 11 5,360 1,099
Net cash provided by operating activities (25,125) (22,372)
Statement of cash fl ows
Cash fl ows from operating activities
Net cash used in operating activities (25,125) (22,372)
Cash fl ows from investing activities
Income from investments 2 17,724 21,205
Expenditure on raising funds 3 (3,106) (3,015)
Non-investment properties: additions 12 (1,724) (2,272)
Non-investment properties: sale proceeds 12 4,911 3,892
Tangible assets: additions 13 (12) (190)
Investment properties: additions 14 - (6,042)
Property unit trusts: additions 15 (12) (4,012)
Property unit trusts: sale proceeds 15 511 3,120
Stock exchange securities: additions 16 (185,877) (156,872)
Stock exchange securities: sale proceeds 16 176,379 152,466
Other sale proceeds 156 347
Movement in funds held by investment managers (1,413) 13,139
Movement in money market deposits and loans 17 17,663 (21)
Net cash provided by investing activities 25,200 21,745
Change in cash and cash equivalents 75 (627)
Cash and cash equivalents at 1 January 1,010 1,637
Cash and cash equivalents at 31 December 1,085 1,010
----- End of picture text -----

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The Representative Body of the Church in Wales | Annual Report and Accounts 2020

Notes to the Accounts

The fi nancial statements have been prepared in accordance with the Statement of Recommended Practice (SORP 2015): Accounting and Reporting by Charities preparing their fi nancial statements in accordance with the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland (FRS 102), issued on 16 July 2014, the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102), the Charities Act 2011 and UK Generally Accepted Practice. The Representative Body of the Church in Wales is incorporated under Royal Charter and its registered address is 2 Callaghan Square, Cardiff , CF10 5BT. The Representative Body of the Church in Wales constitutes a public benefi t entity as defi ned by FRS 102.

1. Accounting Policies

The Representative Body of the Church in Wales (the Representative Body) holds all property and investments vested in it in trust for the use of the Archbishop, Bishops, Clergy and Laity of the Church in Wales.

The Representative Body is a registered charity, under the Charities Act 2011. The fi nancial statements are prepared during a period where there is much uncertainty as a result of the emergence and international spread of a coronavirus (COVID-19). The fi nal impact of the COVID-19 pandemic is still unclear but offi cers have modelled scenarios should there be a material impact on income and expenditure plans are being reviewed as a result of this. Having reviewed the funding facilities available to the Charity together with expected future cash fl ows, the Trustees have a reasonable expectation that the Charity has adequate resources to continue its activities for the foreseeable future and consider that there were no material uncertainties over the charity’s fi nancial viability. Accordingly, they will continue to adopt the going concern basis in preparing the fi nancial statements. The principal accounting policies are set out below and have been applied consistently.

a. Basis of Accounting

The fi nancial statements have been prepared in accordance with the historical cost convention as modifi ed by the annual revaluation of stock exchange securities, investment properties, property unit trusts and non-investment properties.

b. Income

Rental income and interest on short term loans and deposits is accrued. Interest and dividends on stock exchange securities and proceeds from the sale of parsonages are credited on the date of receipt.

c. Expenditure

Expenditure is recognised when a liability is incurred. Costs of raising funds are those costs incurred in managing the investments.

d. Investments

Investment Properties:

Investment properties are valued individually at open market value in accordance with the Statement of Asset Valuation Practice and Guidance Notes of the Royal Institution of Chartered Surveyors.

Property Unit Trusts:

Property unit trusts are stated at market values based on net asset value per unit at 31 December 2020. Stock Exchange Securities:

Stock exchange securities are stated at market values based on bid price at 31 December 2020. Securities denominated in foreign currency are converted into sterling at rates of exchange ruling at the balance sheet date. Investments sold are marked to market value at the date of sale. Consequently, the Statement of Financial Activities treats all movements as changes in the values of the investment portfolio.

e. Non-Investment Properties

The Representative Body has included parsonages, churches and church halls in the Balance Sheet at a valuation using the methodology set out below.

The Representative Body does not value the 6 cathedrals it owns, as cost information is not available and any conventional valuation techniques would lack suffi cient reliability due to the unique and historically signifi cant nature of the buildings.

The Representative Body’s Property Database confi rms that assets include 6 Cathedrals, 1,389 Churches and 1,215 Churchyards at 31 December 2020. These buildings are carefully managed and maintained to preserve them for the future. Works are controlled through the Church’s Faculty System which ensures that all maintenance and repair works are properly considered. Many of these assets are also open for public view outside of worship times. Such assets are not marketed but are occasionally sold.

The following asset classes were valued by the in-house Property Department headed by Alex Glanville, FRICS, as at 31 December 2020 and basis of the valuation is set out below:

Parsonages, Bishops’ Houses and Sundry Provincial Property which were owned by the Representative Body at 31 December 2007 are stated at the midpoint of the Council Tax band valuation (as at April 2005) as adjusted by house price infl ation (Nationwide House Price Index) to 31 December 2020. Such properties acquired after 31 December 2007 are stated at cost less provisions for impairment (where required) as adjusted by house price infl ation (Nationwide House Price Index) from the period of acquisition to 31 December 2020.

Church Halls were originally valued using evidence using sales from this type of property. They are now adjusted by the Nationwide House Price Index on an annual basis.

The St Michael’s College site is valued at open market value (existing use) based on a professional valuation. Churches were initially valued based on an assessment of the sales values achieved for such properties over a period of time. This valuation has been adjusted at the transition date using the Nationwide House Price Index.

23

Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

Accounting Policies Continued

Glebe is normally valued on the average price of agricultural land in Wales, based on the RICS – RAU Farmland Market Directory of land prices. RICS have not published an index for 2020 so values have been adjusted by the movement in house prices in the year.

Leasehold improvements are depreciated over the life of the lease.

Investment and non-investment properties are shown at market value and not depreciated. In the opinion of the Representative Body, the remaining useful economic life and residual values of these properties is such that depreciation is immaterial.

A number of former church sites or ruins are owned. They are not saleable assets and are retained accordingly. No value has been included for them in the accounts.

Foreign currencies are converted into sterling at the rate of exchange ruling at the date of the balance sheet except for purchases and sales of securities and remittances during the year which were converted at the actual rate prevailing.

Designated Funds represent monies made available by the Representative Body out of General Funds for the specifi c purpose designated when the fund is established. Restricted Funds are those held for specifi c restricted purposes.

The Representative Body operates a pension scheme providing defi ned benefi ts based on years of service and the allocation to the Clergy Pension Provision is calculated every three years by qualifi ed actuaries and is shown as a charge in the Statement of Financial Activities so as to spread the pension cost over the normal expected service lives of the clergy in such a way that the charge is a substantially level percentage of current and expected future pensionable payroll. The scheme is accounted for under FRS 102 and an annual actuarial valuation is obtained. Any excess or shortfall between the actuarial liabilities and the Clergy Pension Provision is transferred to or from the Pension Equalisation Fund, a Designated Fund, such that the balance on the Clergy Pension Provision at the balance sheet date is based on the most up to date actuarial information.

A separate defi ned benefi t pension scheme is operated for the staff of the Representative Body. Contributions to the scheme are charged to the Statement of Financial Activities on the basis of spreading the costs over the employees’ working lives.

The scheme is accounted for under FRS 102, with the annually calculated notional surplus or defi cit on the funding of the Scheme shown in the accounts as a separate fund entitled ‘Pension Reserve’ which is deducted from General Funds in the Balance Sheet.

Details of the Staff Retirement Benefi t Scheme are given in note 11 to the fi nancial statements. l. Taxation Status The Representative Body benefi ts from corporation tax exemptions available to charitable bodies. On the basis that its activities fell within its charitable purposes and its funds are applied for these purposes, no provision for corporation tax is made.

m. Financial Instruments

The charity only has fi nancial assets and fi nancial liabilities of a kind that qualify as basic fi nancial instruments. Basic fi nancial instruments, including debtors and creditors are initially recognised at transaction value and subsequently measured at their settlement value. The recognition criteria for each class of fi nancial instruments is as follows:

Financial instrument Measurement criteria (initial and subsequent)
Cash: Cash held, then on amortised cost
Debtors and loans: Settlement amount or amount advanced then at amortised cost
Creditors: Settlement amount after trade discounts then at amortised cost
Bank deposits: Cash amount of deposit then at amortised cost
Investments: Transaction cost then at fair value (market value of quoted investments)

n. Critical Accounting Judgements and Key Sources of Estimation Uncertainty In the application of the charity’s accounting policies, which are described in this note, Trustees are required to make judgements, estimates, assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may diff er from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision aff ects only that period, or in the period of the revision and future periods if the revision aff ects the current and future periods.

The most signifi cant areas of judgement relate to the valuation of properties. The policies adopted in respect of the valuation of properties are set out in note 1(e).

24

The Representative Body of the Church in Wales | Annual Report and Accounts 2020

----- Start of picture text -----
2 Investment Income
Funds 2020 £000 Funds 2019 £000
- - - -
Gross income from property 3,202 3,202 3,670 3,670
Income from stock exchange securities 14,054 385 - 14,439 17,008 378 - 17,386
Interest from money market deposits and loans 83 - - 83 149 - - 149
17,339 385 - 17,724 20,827 388 - 21,205
3 Raising Funds
Funds 2020 £000 Funds 2019 £000
Stock Exchange Advisers 2,145 - - 2,145 2,113 - - 2,113
Investment Property Advisers 249 - - 249 471 - - 471
Sundry Property 143 - - 143 147 - - 147
Support Costs 569 - - 569 284 - - 284
3,106 - - 3,106 3,015 - - 3,015
Stock exchange advisers’ costs are calculated as a percentage of the underlying market value of the investments.
4 Support for Ministry
Funds 2020 £000 Funds 2019 £000
Bishops 918 - - 918 990 - - 990
Mission and Ministry 199 - - 199 245 - - 245
(formerly, Bishops' Portfolio Support)
Safeguarding 153 - - 153 182 - - 182
- - - -
Clergy Pension Provision (note 21) 4,153 4,153 5,679 5,679
Clergy Remuneration Review 15 - - 15 - - - -
- - - -
Ministry Training - St Padarn’s Institute 1,989 1,989 2,217 2,217
Clergy Property
Diocesan Inspectors’ Costs 444 - - 444 506 - - 506
Episcopal Residences 71 - - 71 55 - - 55
Sundry Property Costs 6 - - 6 14 - - 14
Sundry Clergy Benefi ts 3 - - 3 4 - - 4
Support Costs 916 - - 916 918 - - 918
- - - -
8,867 8,867 10,810 10,810
General Designated Restricted Total General Designated Restricted Total
General Designated Restricted Total General Designated Restricted Total
General Designated Restricted Total General Designated Restricted Total
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Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

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5 Support for Dioceses and Parishes
Funds 2020 £000 Funds 2019 £000
Block Grant to Dioceses 3,079 - - 3,079 6,158 - - 6,158
Additional Grant Funding to Dioceses 9,324 - - 9,324 - - - -
Repairs and Extensions to Churches - 220 - 220 - 233 - 233
Emergency Aid - 121 - 121 - 145 - 145
Evangelism Fund - 703 - 703 - 239 - 239
Support Costs 1,304 - - 1,304 1,233 - - 1,233
13,707 1,044 - 14,751 7,391 617 - 8,008
6 Other Church Property
Funds 2020 £000 Funds 2019 £000
Redundant Churches - 283 - 283 - 204 - 204
Church Sales Regulations - 632 - 632 - 1,897 - 1,897
Other Property Costs 7 - - 7 5 - - 5
Support Costs 592 - - 592 635 - - 635
599 915 - 1,514 640 2,101 - 2,741
7 Other Financial Support
Funds 2020 £000 Funds 2019 £000
DACs and Cathedrals and Churches Commission 65 - - 65 64 - - 64
Grants to Anglican and Ecumenical Bodies 138 - - 138 169 - - 169
Centenary Projects 43 - 16 59 33 - - 33
Provincial Court and Tribunals 7 - - 7 (57) - - (57)
Other Support 69 10 - 79 131 1,502 - 1,633
Support Costs 205 - - 205 213 - - 213
527 10 16 553 553 1,502 - 2,055
8 Communications
Funds 2020 £000 Funds 2019 £000
Communications 188 - - 188 201 - - 201
Support Costs 170 - - 170 184 - - 184
358 - - 358 385 - - 385
General Designated Restricted Total General Designated Restricted Total
General Designated Restricted Total General Designated Restricted Total
General Designated Restricted Total General Designated Restricted Total
General Designated Restricted Total General Designated Restricted Total
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26

The Representative Body of the Church in Wales | Annual Report and Accounts 2020

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9 Support Costs
Funds 2020 £000
Chief Executive & Secretariat - 108 74 18 61 59 320
Human Resources - - - - - - -
Offi ce Services 72 112 153 75 25 52 489
Finance 472 361 258 175 76 - 1,342
Property - 89 180 128 - - 397
Legal - 45 149 170 24 8 396
Information Technology 25 201 490 26 19 51 812
569 916 1,304 592 205 170 3,756
Funds 2019 £000
Chief Executive & Secretariat - 153 252 18 110 77 610
Human Resources 10 180 111 22 7 16 346
Offi ce Services 42 131 179 94 32 68 546
Finance 218 186 112 115 35 - 666
Property - 90 185 182 - - 457
Legal - - 82 173 19 - 274
Information Technology 14 178 312 31 10 23 568
284 918 1,233 635 213 184 3,467
Raising Funds Support for Ministry Support for Dioceses and Parishes Other Church Property Other Financial Support Communications Total 2020
Raising Funds Support for Ministry Support for Dioceses and Parishes Other Church Property Other Financial Support Communications Total 2019
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The above fi gures include audit fees of £32,000 (2019: £31,000) in respect of the audit of the Representative Body, and £5,375 (2019: £4,885) in respect of the audit of the Staff Retirement Benefi t Scheme.

The total expenditure for Finance of £1,342,000 includes an accounting adjustment under FRS 17 for the Staff Retirement Benefi t Scheme of +£10,000 (2019: -£187,000)

Basis of Allocation

Support costs have been allocated on the basis of an estimated percentage allocation of staff time spent over each charitable activity.

27

Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

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10 Staff Numbers and Remuneration Total Total
2020 2019
£000 £000
Staff Costs
Salaries 3,470 3,449
National Insurance Contributions 351 350
3,821 3,799
Current Service Pensions Costs (Defi ned Benefi t Scheme) 1,069 1,249
FRS 102 Pension Scheme Adjustment 10 (187)
Defi ned Contribution Pension Costs 93 80
Unfunded Pension Costs 28 15
5,021 4,956
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The numbers of staff whose employee benefi ts* fell in the following bands were:

Total
2020
Number
Total
2019
Number
£0 to £10,000
8
13
£10,001 to £20,000
11
11
£20,001 to £30,000
24
34
£30,001 to £40,000
31
25
£40,001 to £50,000
10
11
£50,001 to £60,000
10
9
£60,001 to £70,000
-
2
£70,001 to £80,000
5
2
£110,001 to £120,000
1
1
100
108

*Employee benefi ts include gross salaries and allowances but do not include employers' pension costs. Of the 100 staff employed during 2020, 16 had left prior to the end of the year.

The key management personnel consists of six staff members, as set out on page 39 of this report. The total amount of their employee benefi ts was £574,711 (2019: 6 members, £602,164).

Trustees

No Trustee received any remuneration for the services they provided as a Trustee.

Fifteen (2019: twenty) Trustees had expenses paid or were reimbursed for expenses in the year. This covered their expenses incurred in performing their duties as Trustees. The payments were for travel, subsistence and accommodation costs and totalled £5,123 (2019: £7,789).

One Trustee received remuneration from the Representative Body in connection with their offi ce. This was The Most Reverend J D E Davies who is an Ex Offi cio Member of the Representative Body. His remuneration was £50,726 (2019: £49,682) and pension contributions of £18,515 (2019: £19,277). A car was provided for the performance of his duties for which the cash benefi t was £7,881 (2019: £7,609).

28

The Representative Body of the Church in Wales | Annual Report and Accounts 2020

The Representative Body operates a defi ned benefi t pension scheme arrangement called ‘The Representative Body of the Church in Wales Staff Retirement Benefi t Scheme’ (the Scheme). The Scheme provides benefi ts based on fi nal salary and length of service on retirement, leaving service or death. The Scheme closed to new members on 31 March 2017.

The Scheme is subject to the Statutory Funding Objective under the Pensions Act 2004. A valuation of the Scheme is carried out every three years to determine whether the Statutory Funding Objective is met. As part of the process the Employer must agree with the trustees of the Scheme the contributions to be paid to address any shortfall against the Statutory Funding Objective and contributions to pay for future accrual of benefi ts.

A full actuarial valuation of the Scheme was carried out as at 31 March 2018 and the next valuation of the Scheme is due as at 31 March 2021. The results of the 2018 valuation have been updated by an independent qualifying actuary to 31 December 2020 allowing for cashfl ows in and out of the Scheme and changes to the assumptions over the period.

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2020 2019
£000 £000
Amounts recognised in the Balance Sheet
Fair value of assets 16,970 17,035
Present value of funded obligations (32,579) (27,284)
Defi cit in Scheme (15,609) (10,249)
Net defi ned benefi t liability (15,609) (10,249)
Amounts recognised in the Statement of Financial Activities
Current service cost 787 753
Administration cost 80 58
Interest on liabilities 578 672
Interest on assets (365) (424)
Past Service Costs - -
Total 1,080 1,059
Remeasurements over the year
Loss / (gain) on Scheme assets in excess of interest 1,104 (1,516)
Losses from changes to assumptions 4,307 2,800
Experience (gains) / losses on liabilities (61) 2
- -
Gains from changes to demographic assumptions
Total remeasurements 5,350 1,286
Reconciliation of assets and Defi ned Benefi t Obligation:
The change in the assets over the year was:
Fair value of assets at the beginning of the year 17,035 14,131
Interest on assets 365 424
Employer contributions 1,070 1,246
Contributions by Scheme participants 152 162
Benefi ts paid (468) (386)
Administration costs (80) (58)
Return on plan assets less interest (1,104) 1,516
Fair value of assets at the end of the year 16,970 17,035
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Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

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11 Staff Defi ned Benefi ts Scheme continued 2020 2019
£000 £000
The change in the defi ned benefi t obligation over the year was:
Defi ned benefi t obligation at the beginning of the year 27,284 23,281
Current service cost 787 753
Contributions by Scheme participants 152 162
Past service costs - -
Interest cost 578 672
Benefi ts paid (468) (386)
Experience (loss) / gain on liabilities (61) 2
- -
Changes to demographic assumptions
Changes to fi nancial assumptions 4,307 2,800
Defi ned benefi t obligation at the end of the year 32,579 27,284
Assets
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The majority of the assets are invested with EdenTree Investment Management, with the remainder including some small AVC contracts invested with OneFamily and cash at bank. The actual return on the Scheme’s assets (net of expenses) over the year to the review date was a loss of £739,000. The assets do not include any investment in the Employer.

Actuarial Assumptions

The principal assumptions used to calculate the Scheme’s liabilities include:

2020
2019
Discount Rate 1.4%
2.1%
Inf ation assumption (RPI) 3.1%
3.2%
Limited Price Indexation pension increases (RPI Max 5%) 3.1%
3.1%
Salary increases 2.6%
2.7%
Proportion married at retirement or earlier death 80.0%
80.0%
Post retirement mortality assumption: 95% of the PCA00 tables and CMI 2017
projections with a long-term rate of
improvement of 1.25% pa.

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12 Non-investment Properties 2020 2019
£000 £000
At 1 January 271,632 268,208
Additions 1,724 2,272
Disposals (4,911) (3,892)
Net increase on revaluation 21,839 5,044
At 31 December 290,284 271,632
Comprising:
Parsonage, bishops' houses and sundry provincial property 179,316 167,304
Churches and church halls 93,024 86,711
Glebe 13,394 13,067
Operational properties 4,550 4,550
290,284 271,632
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30

The Representative Body of the Church in Wales | Annual Report and Accounts 2020

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13 Tangible Assets Offi ce Equipment
£000
Cost
At 1 January 648
Additions 12
At 31 December 660
Accumulated Depreciation
At 1 January 286
Charge for the Year 239
At 31 December 525
Net Book Value
31 December 2020 135
31 December 2019 362
14 Investment Properties 2020 2019
£000 £000
At 1 January 58,905 56,135
Additions - 6,042
Net decrease on revaluation (1,865) (3,272)
At 31 December 57,040 58,905
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Investment properties were valued by Cushman & Wakefi eld at 31 December 2020 at £57,040,000 (2019: £58,905,000) in accordance with the RICS valuation – Professional Standards 2014 and FRS 102.

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15 Property Unit Trusts 2020 2019
£000 £000
At 1 January 18,245 17,217
Additions 12 4,012
Disposals (208) (1,258)
Net decrease on revaluation (1,217) (1,726)
At 31 December 16,832 18,245
16 Stock Exchange Securities 2020 2019
£000 £000
At 1 January 598,877 504,267
Additions 185,877 156,872
Disposals (150,496) (127,384)
Net increase on revaluation 16,424 65,122
At 31 December 650,682 598,877
Historical cost at 31 December 491,040 455,659
Unrealised investment gains at 31 December 159,642 143,218
Investment gains calculated on historic basis 25,883 25,082
Listed in UK 276,091 287,886
Listed overseas 374,591 310,991
650,682 598,877
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31

Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

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17 Money Market Deposits and Loans 2020 2019
£000 £000
At 1 January 29,395 29,374
Advances 12,808 30,028
Repayments (30,471) (30,007)
At 31 December 11,732 29,395
Comprising:
Money Market Deposits 3,859 21,356
Clergy Housing Loans 7,620 7,857
Diocesan Loans 162 89
Curates House Loans 66 66
Churches' Mutual Credit Union 25 25
Clergy Car Loans - 2
11,732 29,395
18 Debtors 2020 2019
£000 £000
Prepayments 170 226
Other debtors 3,541 3,538
Accrued income 2,877 2,544
6,588 6,308
19 Creditors: amounts falling due within one year 2020 2019
£000 £000
Taxation and National Insurance Contributions 454 439
Rents received in advance 287 221
Amounts owed to special trusts 2,471 1,595
Other creditors 1,108 587
Accruals 1,622 3,126
5,942 5,968
20 Diocesan Maintenance of Ministry Fund 31 December 2020 31 December 2019
£000 £000 £000 £000
Income
Diocesan Boards of Finance 11,420 11,505
Other Income 2 2
11,422 11,507
Less: Payments
Clergy Stipends 9,294 9,315
Curates Stipends 986 940
National Insurance Contributions 991 995
Vacancy Fees 44 109
Sundry expenses and other payments 107 148
11,422 11,507
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32

The Representative Body of the Church in Wales | Annual Report and Accounts 2020

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21 Clergy Pension Provision 31 December 2020 31 December 2019
£000 £000 £000 £000
Balance at 1 January 196,200 180,700
Current service contributions 3,853 4,062
Other Income - legacy 314 -
Transfer from General Funds:
Allocation from income (note 4) 4,153 5,679
Allocation of net investment gains 10,903 26,689
19,223 36,430
Less:
Pension payments to retired clergy (4,828) (4,859)
Pension payments to surviving spouses and civil partners (1,539) (1,515)
Gratuity payments of retired clergy (735) (917)
-
Transfer Payments (74)
-
DIS Lump Sum Payments (76)
Administrative expenses (115) (76)
(7,367) (7,367)
Transfer from / (to) Pension Equalisation Fund 13,944 (13,563)
Balance at 31 December 222,000 196,200
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The Clergy Pension Provision was established in accordance with the advice of our actuaries, to meet liabilities for clergy and surviving spouses and civil partners’ pensions and gratuities. The actuarial valuation and basis of annual provision is reviewed every three years.

At the date of the last triennial actuarial valuation at 31 December 2019 undertaken by Quantum Advisory, the liability of the Representative Body for past service on the current funding basis was assessed using a discount rate of 2% at £196.2 million, which represented 27.3% (previously 30.9%) of total funds at that date. Based upon this valuation, the annual transfer from General Funds has comprised 27.3% of both total income and net investment gains and losses (refl ecting income on the liability for past service) and 36.5% (previously 38.8%) of total stipends being the contribution for continuing service. The provision has been adjusted to the liabilities and the balance transferred to the Pension Equalisation Fund.

The key fi nancial assumptions used for the full actuarial valuation at 31 December 2019 and the interim valuation for 2020 are set out below.

The next full actuarial valuation of the Scheme is due to take place at 31 December 2022.

are set out below.
The next full actuarial valuation of the Scheme is due to take place at 31 December 2022.
31 December
2020
2019
Financial assumptions (nominal % pa)
Discount rate 1.2%
2.0%
Inf ation - RPI 3.0%
3.2%
Inf ation - CPI 2.2%
2.2%
Stipend increases 2.7%
2.7%
Pension increases - Stipend Linked 2.7%
2.7%
Pension increases - RPI up to 5% p.a. 2.9%
3.1%
Deferred revaluation 2.9%
3.1%
Post retirement mortality (life expectancy, in years)
Current pensioners age 65 – males 21.2
21.2
Current pensioners age 65 – females 23.5
23.5
Future pensioners age 65 (currently age 45) – males 22.3
22.2
Future pensioners age 65 (currently age 45) – females 24.7
24.6

33

Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

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22 Designated Funds Balance Balance
1 January 31 December
2020 Income Expenditure 2020
£000 £000 £000 £000
Revaluation Reserve (Unrealised gains on parsonages, 212,511 15,884 - 228,395
churches, church halls and sundry property)
-
Property Reserve (Property improvements and acquisitions of 31,897 1,723 33,620
parsonages)
Church Repairs Capital Reserve (Capital fund for church repairs) 11,895 1,329 39 13,185
Church Sales Regulations (Funds available from the sale 3,319 466 631 3,154
of churches towards the cost of providing or adapting another
place of worship in the same parish)
-
Pension Equalisation Fund (Funds available to meet future 43,949 12,750 31,199
clergy pension liabilities)
Evangelism Fund (Funds available for dioceses to enact their 9,761 - 704 9,057
strategies on evangelism and church growth)
Climate Change Champion (Funds available to support the - 110 - 110
climate change work of the Church in Wales, working towards
net zero carbon emissions)
Diocesan Parsonage Improvement Fund (Funds available 2,178 3,074 2,696 2,556
for improvements to parsonages and acquisitions of new
parsonages)
Transformation Fund (Funds available for 2020 Vision related 24 - - 24
projects)
Repairs and Extensions to Churches (Funds available to 555 233 220 568
parishes)
Redundant Churches (Funds available to contribute to costs 408 249 283 374
arising in the maintenance and safety of redundant churches)
Emergency Aid (Funds available for costs arising due to (3) 339 121 215
emergencies)
Overseas Fund (Funds available at the discretion of the 40 13 10 43
Bishops to assist in overseas aid)
Overseas Students (Funds available to provide fi nancial 1 - - 1
assistance to overseas students)
316,535 23,420 17,454 322,501
includes gains and losses.
22 Designated Funds (Prior Year) Balance Balance
1 January 31 December
2019 Income Expenditure 2019
£000 £000 £000 £000
Revaluation Reserve 211,859 652 - 212,511
-
Property Reserve 29,648 2,249 31,897
Church Repairs Capital Reserve 9,717 2,219 41 11,895
Church Sales Regulations 4,410 806 1,897 3,319
Pension Equalisation Fund 31,886 13,563 1,500 43,949
Evangelism Fund 10,000 - 239 9,761
Diocesan Parsonage Improvement Fund 1,281 3,743 2,846 2,178
Transformation Fund 24 - - 24
Repairs and Extensions to Churches 527 261 233 555
Redundant Churches (219) 831 204 408
Emergency Aid (159) 301 145 (3)
Overseas Fund 26 16 2 40
Overseas Students 1 - - 1
299,001 24,641 7,107 316,535
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34

The Representative Body of the Church in Wales | Annual Report and Accounts 2020

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23 Restricted Funds Balance Balance
1 January 31 December
2020 Income Expenditure 2020
£000 £000 £000 £000
- -
St Michael’s College Site 4,550 4,550
(Endowment Fund held for the operation of an educational
institution)
Centenary Appeal Fund 3 13 16 -
(Funds available to support two specifi c projects)
4,553 13 16 4,550
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24 Funds Held on Behalf of Others

Special Trusts

The Representative Body is the Trustee of the Church in Wales Common Investment Fund. The unit holders in the Common Investment Fund are individual funds held on behalf of benefi ciaries, where the Representative Body is the managing or custodian trustee of the funds. The aggregate value of these special trusts at 31 December 2020 was £61,776,000 (2019: £57,530,000) and was invested in stock exchange securities and the Church in Wales Common Investment Fund. The income on these funds was £1,273,000 (2019: £1,482,000) and was wholly distributed to benefi ciaries.

Custodian Trustee

The Representative Body is the custodian trustee of 10 parsonages.

25 Related Party Transactions

Due to the nature of the Representative Body’s operations and its membership being drawn from a wide range of clerical and lay members, it is inevitable that transactions will take place with organisations in which a member of the Representative Body may have an interest.

The most signifi cant transactions are as follows:

26 Charitable and Capital Commitments

At 31 December 2020 the Representative Body has committed to pay £6.158 million to the dioceses in respect of the Block Grant in 2021.

The Representative Body has a commitment under an operating lease for the rental of 2 Callaghan Square, Cardiff greater than fi ve years which totals £1.4 million (2019: £1.9 million).

35

Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

----- Start of picture text -----
27 Stock Exchange Securities 31 December 2020
Market Value
£000 %
Fixed Interest
British Government Bonds 22,531 3.5
UK Bonds 41,120 6.3
Overseas Bonds 7,773 1.2
Total Fixed Interest 71,424 11.0
Equities
Communication Services 15,099 2.3
Consumer Goods and Services 110,346 17.0
Financials 142,526 21.9
Health Care 60,712 9.3
Industrials 69,906 10.7
Materials 43,922 6.7
Oil and Gas 7,926 1.2
Property and TEITs 12,811 2.0
Technology 75,808 11.7
Utilities 23,300 3.6
Total Equities 562,356 86.4
Alternative Assets 16,902 2.6
650,682 100.0
----- End of picture text -----

Top Twenty Holdings as at 31 December 2020

£000
£000
Microsoft Corp
13,280
UK Treasury Stock 4.25% 2036
8,238
AIA Group Ltd
10,922
Orsted A/S
7,696
Unilever Plc
10,214
Mastercard Incorporated
7,526
Apple Inc
10,162
Samsung SDI Co Ltd
7,525
RELX Plc
9,088
Glaxosmithkline Plc
7,370
Accenture Plc
9,000
UK Treasury Stock 3.75% 2052
6,991
Alphabet Inc
8,648
Taiwan Semiconductor Manufact
6,887
Prudential Corporation Plc
8,364
CRH Plc
6,840
Ecolab Inc
8,357
iShares Physical Metals PLC
6,803
CME Group Inc
8,353
Otis Worldwide Corp
6,760

36

The Representative Body of the Church in Wales | Annual Report and Accounts 2020

----- Start of picture text -----
2011 £000 13,355 3,842 357 17,554 (1,705) 15,849 (4,976) 10,873 594 872 462 466 60 5 6,257 421 57 2,328 - 11,522 (649) (358) (101) (164) (26) (649)
2012 £000 13,471 3,925 420 17,816 (1,577) 16,239 (5,099) 11,140 642 810 474 397 72 6 6,430 417 58 2,352 - 11,658 (518) (218) (100) (100) (100) (518)
2013 £000 12,808 3,916 356 17,080 (1,793) 15,287 (4,800) 10,487 633 833 552 341 98 7 6,610 400 60 2,360 - 11,894 (1,407) (940) (100) (112) (255) (1,407)
2014 £000 13,281 3,513 293 17,087 (2,019) 15,068 (4,686) 10,382 612 839 496 341 132 5 6,793 375 40 2,324 500 12,457 (2,075) (1,419) (600) (55) (1) (2,075)
2015 £000 13,983 3,408 323 17,714 (1,896) 15,818 (4,919) 10,899 709 873 511 320 185 6 6,293 423 46 2,441 1,000 12,807 (1,908) (2,115) (100) 342 (35) (1,908)
2016 £000 14,385 3,480 308 18,173 (2,177) 15,996 (4,975) 11,021 620 926 511 256 209 4 6,293 488 47 2,645 1,000 12,999 (1,978) (2,026) (100) 137 11 (1,978)
2017 £000 15,795 3,565 327 19,687 (2,349) 17,338 (5,357) 11,981 710 967 564 189 197 5 6,293 481 86 3,107 1,000 13,599 (1,618) (1,978) (100) 461 (1) (1,618)
2018 £000 15,750 3,560 357 19,667 (2,365) 17,302 (5,346) 11,956 1,975 939 543 180 169 4 6,158 484 189 3,365 10,000 24,006 (12,050) (2,576) (10,100) 626 - (12,050)
2019 £000 17,008 3,670 433 21,111 (2,732) 18,379 (5,679) 12,700 2,217 990 520 245 182 4 6,158 599 201 3,654 - 14,770 (2,070) (1,683) (200) (187) - (2,070)
2020 £000 14,054 3,202 493 17,749 (2,537) 15,212 (4,153) 11,059 1,989 918 451 199 153 18 12,403 709 188 3,746 - 20,774 (9,715) (9,415) (310) 10 - (9,715)
Income Stock Exchange Investments Property Income Other Income Total Gross Income Investment Managers' Costs Total Net Income Less: Allocation to Clergy Pension Provision Net Income after allocation to Clergy Pension Provision Expenditure Ministry Training Bishops Clergy Property Mission and Ministry (formerly, Bishops’ Portfolio Support) Safeguarding Sundry Clergy Benefi ts Block Grant to Dioceses (including additional Covid-19 funding) Other Church Property and Financial Support Communications Provincial Services Evangelism Fund / Transformation Fund Total Expenditure Defi cit Reconciliation to the Statement of Financial Activities: Net expenditure before investment gains /(losses) Transfers between Funds FRS 102 Pension Scheme Adjustment Capital Gifts and Legacies Defi cit as shown above
----- End of picture text -----

37

Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

REFERENCE AND ADMINISTRATIVE INFORMATION

Representative Body Membership

Elected Membership

Chair and Deputy Chair

Mr J J Turner Chair

St Asaph

The Very Reverend N H Williams Mrs H M Wiseman

Mrs H M Wiseman Deputy Chair (from 4 March 2021)

Sir P Silk Deputy Chair (to 4 March 2021)

Bangor

The Very Reverend K L Jones Dr H J Parry-Smith (from 27 February 2020)

St Davids

The Venerable P Mackness, Archdeacon of St Davids Mrs J A P Hayward

The Most Reverend J D E Davies (to 2 May 2021) Archbishop of Wales

Mrs L Perkins (to 31 December 2020)

Mrs H R Jones

The Venerable M Komor, Archdeacon of Margam (from 1 January 2021) The Venerable C B W Smith, Archdeacon of Morgannwg (to 31 December 2020) Mr G I Moses

Chair, St Asaph Diocesan Board of Finance

Monmouth

The Reverend M Stallard (from 27 February 2020) Chair, Bangor Diocesan Board of Finance

The Venerable J S Williams, Archdeacon of Newport Miss P R Brown

Dr H J Parry-Smith (to 27 February 2020) Chair, Bangor Diocesan Board of Finance

Swansea and Brecon

The Venerable A N Jevons, Archdeacon of Brecon Mr J M Watson (from 1 January 2021) Mr T J P Davenport (to 31 December 2020)

Chair, St Davids Diocesan Board of Finance

Nominated Membership

Mr M A Lawley Chair, Llandaff Diocesan Board of Finance

Mr P E Lea

Chair, Monmouth Diocesan Board of Finance

Mr R Davies Mr P D Kennedy Mr T O S Lloyd OBE, DL, FSA Mr J J Turner (to 31 December 2020) (1 vacancy)

Sir P Silk

Chair, Swansea and Brecon Diocesan Board of Finance

Co-opted Membership

Mr J J Turner (from 1 January 2021) Mrs J Heard (from 1 January 2021) Mr L M James (to 7 May 2020)

38

The Representative Body of the Church in Wales | Annual Report and Accounts 2020

Committee Membership

(*denotes non-RB member)

Investment Committee

Mr G I Moses (Chair and member from 4 March 2021) Mr J J Turner (Chair to 4 March 2021) Mr R Anning Mr G Davies Mr J G Davies (from 4 March 2021) Mr J Fox Mr L M James (to 7 May 2020) Mr J Minett Mr D G Myrddin-Evans Mr R F Page The Reverend Canon I K Rees

Audit and Risk Committee

Mrs J Heard (Chair and member from 4 March 2021) Mr G I Moses (Chair and member to 4 March 2021) The Very Reverend N H Williams (from 4 March 2021) Mr V Jones Mrs L Jones Mr M A Lawley Sir P Silk (to 4 March 2021)

Cathedrals and Churches Commission

Mr T O S Lloyd OBE, DL, FSA (Chair) The Right Reverend J W Evans Mr J Orbach Mr R J Silvester Mr P Welford

Training, Formation and Ministerial Development Committee

The Right Reverend C E Vann (Chair) (from 2 May 2021 and member from 27 April 2020) The Most Reverend J D E Davies (Chair) (from 27 April 2020 to 2 May 2021) The Right Reverend J Osborne (to 27 April 2020) The Venerable T H A Mason (to 12 March 2021) The Reverend Chancellor P Powell The Reverend Canon T J Hewitt The Reverend Canon Dr R Johnson The Reverend Canon T L Jones (from 4 March 2021) The Reverend Canon R O L Lowndes (to 4 March 2020) The Reverend D J F J A McClean* Miss P R Brown Mrs J A P Hayward (from 4 March 2021)

Property Committee

Mr R Davies (Chair) Mr C Clarke The Very Reverend K L Jones The Venerable A N Jevons The Venerable M Komor (from 4 March 2021) The Venerable P R Mackness The Venerable C B W Smith (to 31 December 2020) The Venerable N H Williams The Venerable J S Williams Ms M Gerrard Mr J E Jones Mr D A Williams

Key Management Posts

Chief Executive Head of Legal Services Head of Finance Head of Property Services Head of Communications and Technology Principal of St Padarn’s Institute

People Committee

Mr P D Kennedy (Chair) Mr T J P Davenport (to 31 December 2020) The Right Reverend G K Cameron The Venerable A N Jevons Mr C W J Francis Mr N Griffi n Mr D B Halse Mrs B E Harding Mr J M Watson (from 4 March 2021) Mrs H M Wiseman

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Annual Report and Accounts 2020 | The Representative Body of the Church in Wales

Advisers

Actuaries

Independent Auditors:

Haysmacintyre LLP 10 Queen Street Place London EC4R 1AG

Quantum Advisory Cypress House Pascal Close St Mellons Cardiff CF3 0LW

Bankers:

Lloyds Bank Plc 4[th] Floor, St William House Tresillian Terrace Cardiff CF10 5BH

Atkin & Co. Nelson House Central Boulevard Blythe Valley Park Solihull B90 8BG

Investment Property Advisers:

Cluttons LLP Portman House 2 Portman Street London W1H 6DU

Barnett Waddingham LLP St James’s House St James’s Square Cheltenham Gloucestershire GL50 3PR

Investment Advisers:

Newton Investment Management BNY Mellon Financial Centre 160 Queen Victoria Street London EC4V 4LA

Sarasin & Partners LLP Juxon House 100 St Paul’s Churchyard London EC4M 8BU

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