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2022-12-31-accounts

THE REPRESENTATIVE BODY OF THE CHURCH IN WALES

Annual Report and Accounts 2022 2022

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

Front cover photographs:

top left: The Bishop of Swansea and Brecon, John Lomas, is consecrated at St Deiniol’s Cathedral, Bangor.
top middle: The Archbishop of Wales, Andrew John, is enthroned at St Deiniol’s Cathedral, Bangor.
top right: The Assistant Bishop in Bangor, Mary Stallard, is consecrated at St Deiniol’s Cathedral, Bangor.
bottom left: Congregation at Citizen Church, Cardif .
bottom middle: Their Majesties The King and The Queen Consort visit Llandaf Cathedral following the death of HM The Queen.
bottom right: Congregation at Hope Street, St Asaph.

The Representative Body of the Church in Wales | Annual Report and Accounts 2022

CHAIR’S INTRODUCTION

2022 was a year which saw the Church in Wales, along with the rest of society, emerge from the fi nal rounds of restrictions following the COVID-19 pandemic with all the accompanying anticipation, trepidation and expectation. Our clergy, lay ministers

and congregations proved so adaptable and willing to innovate over the last three diffi cult years, demonstrating the Church’s invaluable role in the lives of our communities.

2022 was therefore a year of reconstruction and renewal. The Representative Body, in close collaboration with the Bench of Bishops, the Standing Committee and others, took the very bold step of committing a signifi cant portion of its funds into ensuring the Church in Wales is adequately and eff ectively resourced for mission, evangelism and growth. This decision means the Representative Body will make £100 million available for projects targeting both spiritual and numerical growth. 2022 also saw census data emerge which showed, in Wales, a 14% decline in those identifying themselves as Christian. A stark reminder of our need to be determined in our commitment to communicate our joyful story in our time. I hope it also demonstrates to our brothers and sisters around the province that the Church in Wales has faith in its future and that the Representative Body wishes to help an expectation of growth to fl ourish.

operations, as set out in this annual report. Clearly the additional fi nancial commitments the Representative Body has made are signifi cant and will inevitably have an impact on future income generation, but this impact will be assessed and managed as needed.

In 2021 the Governing Body declared a climate emergency and committed the Church in Wales to being net zero in terms of our carbon footprint by 2030. This is an ambitious task and 2022 saw the Representative Body instigate a number of areas of work which form part of our journey towards this goal. I am pleased by the commitment demonstrated and work undertaken so far, particularly to those who attended events such as the climate leaders programme and who undertook carbon literacy training during the year. A tool has also been developed and launched to help calculate the carbon footprint of church buildings.

As always, please be assured of the Representative Body’s commitment to ensuring the Church in Wales is resourced to provide the mission and ministry necessary for the proclamation of the Gospel in our times and stewarding its resources to allow this to happen in the most eff ective manner. I look forward to the next ten years in the life of our province.

Professor Medwin Hughes Chair of the Representative Body

A further £37 million is also to be made available to provide additional structural resilience funding over that same ten-year period. Work will also be undertaken to review, simplify and consolidate the channels of provincial funding to the dioceses to ensure our structural arrangements are as convenient – and resilient - as they may be.

These additional fi nancial commitments come at a time when the fi nancial world is in a volatile state and 2022 saw a reduction of almost £100 million in the Representative Body’s total assets, which in turn will lead to a reduction in investment income. The Investment Committee keeps the situation under close scrutiny with staff being in touch with the investment fund managers on a very regular, sometimes daily, basis. This is important work because it is the investment income which provides the fi nancial means by which the Representative Body undertakes its

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Annual Report and Accounts 2022 | 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

Additional Objectives for 2023

  - To develop and communicate a structure for the administration of the Church Growth Fund which eff ectively balances rigorous scrutiny and accountability with convenience and accessibility.

  - To establish a new approach to the channeling of provincial structural funding to the dioceses.

  - To implement projects which would improve operational effi  ciency including a new property management database and a Church in Wales membership app.

  - To fi nalise and implement a new approach to the management of church buildings which have closed.

  - To continue to provide training and practical support to assist all parts of the Church in Wales to engage eff ectively with the Climate Emergency and the moving towards being carbon net zero by 2030.

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The Representative Body of the Church in Wales | Annual Report and Accounts 2022

ACHIEVEMENT AND PERFORMANCE

An extensive review of the valuation of the non-investment properties in 2022 has resulted in an overall reduction in asset values of £70 million.

Overall Financial Position

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

There was a negative movement in total net funds for 2022 of £77 million. This was primarily due to losses on the revaluation of fi xed assets of £70 million which arose following an extensive review of how the noninvestment properties are valued, and the decision to place a nil value on churches, which had been valued at £74 million in the 2021 accounts.

After considering other recognised gains and losses, the total funds shown on the balance sheet of the Representative Body at 31 December 2022 decreased from £907 million to £830 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 2022, the Representative Body’s investment income increased by £1.9 million. Expenditure decreased by £2.8 million in 2022 as the previous year included the additional fi nancial support provided to dioceses following the pandemic.

The resulting net loss of £4.4 million was further compounded by investment losses of £86 million and resulted in a net movement in funds over the year of £58 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 £140.4 million and £127,000 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 £830 million.

These funds are split as follows:

----- Start of picture text -----
£m
General Funds 475
Restricted Funds 5
Designated Funds 350
Total 830
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The Restricted Funds of £4.8 million represents the value of the former St Michael’s College site, held as an endowment fund.

The Designated Funds totalling £350 million are set out in detail on page 34. However, 56% of this total comprises the cost or valuation of the parsonages and church halls. These are not income-generating 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 £475 million. 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 aims to achieve a 5.5% total return, although this may not be sustainable in the future.

Total Assets of the Representative Body

The Balance Sheet on page 21 presents the key fi nancial data but 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 2022 stood at £971 million.

The income generated by these investments of around £20 million per annum is used to fund the Partnership Funding to dioceses, training through 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 may 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

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Annual Report and Accounts 2022 | The Representative Body of the Church in Wales

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		 £970 million
Less:
Clergy and Staf
Pension Scheme liabilities		 (£140 million)
Balance £830 million
Less:
Restricted Funds		 (£5 million)
Less:
Designated Funds		 (£350 million)
Balance
– representing General Funds		 £475 million
It is this £475 million that is held as investment assets
and generates the returns (income and capital).

Supporting Ministry

Grants to Dioceses

The Representative Body continues to provide each diocese with Partnership Funding 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 2022 the total Partnership Funding was set at £2.6 million and an additional £1.6 million was provided to dioceses from the newly formed Structural Resilience Fund to provide post- Covid assistance to the dioceses.

The Representative Body has agreed the Partnership Funding will be set at £2.6 million for 2023 together with £3.5 million from the Structural Resilience Fund.

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.

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The Representative Body of the Church in Wales | Annual Report and Accounts 2022

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 2023 will receive a lump sum of up to £40,746 and an annual pension of £16,298. On the death of a cleric, a qualifying surviving spouse or civil partner receives 60% of the cleric’s pension, which in 2023 is £9,778 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:

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Clergy Pension Scheme Membership
Active Deferred Pensioners Total
Membership at 1 January 2022 389 227 852 1,468
New entrants 35 - - 35
Leavers with deferred benefi ts (12) 12 - -
Transfers out - (1) - (1)
Retirements (20) (6) 33 7
Deaths (1) - (21) (22)
Adjustments to opening fi gures 2 (3) 2 1
Membership at 31 December 2022 393 229 866 1,488
----- 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 2022, together with the previous three valuations are highlighted below. The new rates will take eff ect from 1 January 2023. The next actuarial valuation is due to take place at 31 December 2025.

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Clergy Pension Scheme Funding
2022 2019 2016 2013
Market Value of the Representative Body’s
£733m £719m £607m £512m
General Funds
Value of Past Service Liability £140.4m £196.2m £187.8m £158.9m
Liability as a proportion of General Fund 19.2% 27.3% 30.9% 31.1%
Employer’s Current Service Contributions 26.8% 36.5% 38.8% 32.7%
----- End of picture text -----

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Annual Report and Accounts 2022 | The Representative Body of the Church in Wales

FINANCIAL REVIEW

Investments decreased by 11.5% over 2022.

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 2022 the total value of the Representative Body’s investments decreased by 11.5% to £729 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 £140 million on 31 December 2022 (2021: £218 million).

Total Return

The total return (both income and capital growth) from the Representative Body’s fund during 2022 was negative 8.0%, outperforming the Teknometry comparator return of negative 11.3%. Over three and fi ve years the annualised returns also outperformed the comparator as highlighted in the table below.

Representative Body Total Return v Benchmark

----- Start of picture text -----
12 [%]
8.8
6 [%]
5.6 6.0
4.1 3.1
1.6
0
-8.0 -11.3
-6 [%]
-12 [%]
1 Year 3 Years 5 Years 10 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 decreased over the year from £708 million to £623 million at 31 December 2022, an decrease of 12%.

2022 was a particularly challenging period for fi nancial markets. While Russia’s invasion of Ukraine at the end of February was the defi ning geopolitical and economic event and an obvious catalyst for equity market weakness, equity indices had already been under considerable pressure throughout January. The proximate cause was tightening US monetary policy, as the Federal Reserve (Fed), having fallen ‘behind the curve’ in addressing infl ationary pressures, signalled that US interest-rate rises would now come earlier, and potentially be more aggressive, than previously foreshadowed. Such a course of action drove government bond yields steeply higher, and in the equity market, put acute pressure on long-duration equities. However, many of these names moderated

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The Representative Body of the Church in Wales | Annual Report and Accounts 2022

their losses by meaningfully participating in a broader rally which developed towards the end of the fi rst quarter of 2022 as indices bounced.

Worries around a shift in global monetary policy continued to weigh on equities into the second quarter of 2022, with stretched valuations a cause for concern in the face of hawkish central banks. Renewed Covid-19-related lockdowns in China also weighed on investor sentiment given the implications for economic growth and supply chains. The risk of recession loomed towards the end of the review period amid concerns around a more aggressive, Fed-led global tightening cycle in response to the return of infl ation.

After a promising start marked by a strong equitymarket rally in July, the third quarter of 2022 proved to be very volatile with sharp, broad-based declines seen in all major asset classes. Investor hopes of a ‘pivot’ by the Fed on the interest-rate trajectory were dashed early in the quarter as it became increasingly clear that the central bank’s priority was to quash infl ation rather than support the economy and fi nancial asset prices. Such rhetoric was reinforced with interest-rate hikes by the Fed, the European Central Bank and the Bank of England, leading markets to quickly price in a more aggressive path of future rate hikes. Centralbank hawkishness was coupled with major disruptions to Europe’s energy supply, a knock-on eff ect of the Ukraine-Russia confl ict, and led to increasing concerns about the likelihood of recession. Later in September, the sell-off developed into something akin to a liquidity crisis aff ecting major asset classes, all of which fell in tandem. Finally, there was serious turbulence in the UK gilt market that stemmed from the UK’s mini-budget.

During the fi nal quarter of 2022 equities recovered some of the ground lost earlier in the year. The outlook for infl ation, and the trajectory of monetary policy, continued to dominate the narrative within fi nancial markets. In early October, evidence of decelerating price growth in the US ISM (Institute for Supply Management) Manufacturing report raised hopes that infl ation had peaked, ensuring risk assets got off to a fl ying start. Further positive momentum was injected a month later, when it was the turn of US consumer price infl ation to come in lower than expected, a development that also drove government bond yields lower. However, in spite of this encouraging news fl ow, central bankers steadfastly maintained a hawkish tone, both in terms of their rhetoric and their actions. At the end of the quarter, even the Bank of Japan, hitherto an outlier in the process of monetary tightening, surprised investors by

moderating its policy of yield-curve control as it raised the cap on the country’s long-term interest rates. These developments contributed to the broader trend of profi t-taking into year end, both in equities and government bonds.

Asset allocation ranges and the allocation as at 31 December 2022 are shown below:

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Asset Allocation Range
Allocation at
Asset class Range
31 December 2022
UK Equities 15-40% 15%
Overseas Equities 20-70% 57%
Fixed Interest 5-25% 15%
Alternatives 0-15% 8%
Cash 0-25% 5%
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Investment Property

The value of the Representative Body’s investment property portfolio decreased over the year from £73.6 million to £62.8 million. The Representative Body directly holds 10 investment properties and also holds units in 2 Property Units Trusts (PUTs).

The direct properties are independently valued at each year end and as at 31 December 2022 at £52.9 million compared to £63.8 million at the end of 2021.

The PUTs investments were valued at 31 December 2022 at £9.9 million compared to £9.8 million the previous year.

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
8 8.3
6 7.2
4
2 3.0 3.2
2.3 2.2
0
-10.0 -10.0
-2
-4
-6
-8
-10
1 Year 3 Years 5 Years 10 Years
Representative Body MSCI Monthly Index
----- End of picture text -----

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Annual Report and Accounts 2022 | 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.

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.

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:

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 2022

Risk Management Policy

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

The 2022 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 2022 risk register has identifi ed the following as the top four most signifi cant risks:

1. Poor total returns from the Representative Body’s investments

Signifi cant loss or reduction of the Representative Body’s assets would have a detrimental eff ect on the Representative Body’s ability to support the fi nancial needs of the wider Church in Wales. The Investment Committee reviews the investment performance quarterly, with staff monitoring daily. The investment portfolio is well diversifi ed and managed by two investment managers with complementary investment approaches.

2. Insolvency of a diocese

Declining parish share income, as a consequence of declining congregations, may jeopardise the solvency of a diocese. If a diocese were to be insolvent intervention by the Representative Body would be needed to continue payment of clergy stipends, representing a signifi cant additional fi nancial burden for the Representative Body. Diocesan accounts are provided to the Representative Body to allow potential problems to be identifi ed at an early stage.

3. Accelerated decline in church attendance The continuation of declining attendance and an increasing age profi le would result in declining fi nancial income for dioceses: this would lead to an inability to present established patterns of ministry to the whole of Wales. The Representative Body endeavours to maintain the highest fi nancial support to dioceses possible. Also, a renewed focus on mission and evangelism, including additional fi nancial resources being made available, aims to stimulate church growth.

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

Complex structures mean ineffi cient decisionmaking and the establishment of a clear strategic direction. Increasingly regular meetings of the main governance bodies of the Church in Wales (the Representative Body, Standing Committee and Bench of Bishops) with the diocesan secretaries and senior provincial staff aim to ensure draw together strategic planning.

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

Reserves Policy

At 31 December 2022, the Representative Body’s total funds amounted to £830 million (2021: £907 million). This includes the Restricted and Designated Funds with a combined total of £355 million.

The Restricted Funds which total £4.8 million represent an Endowment Fund in respect of the former St Michael’s College site.

The Designated Funds total £350 million and £198 million is in respect of the non-investment properties held by the Representative Body, represented by church ‘plant’ – 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 £475 million (2021: £533 million) represents the reserves available.

As shown in the Balance Sheet on page 21, the Representative Body’s General Fund balance is £475 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.

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Annual Report and Accounts 2022 | The Representative Body of the Church in Wales

General Funds

The amount of General Funds held by the Representative Body at 31 December 2022 totalled £475 million (2021: £533 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 2022 Designated Funds amounted to £350 million (2021: £369 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 £161 million, and represents the diff erence between the market values assigned to noninvestment property (including parsonages, 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 2022 Restricted Funds amounted to £4.8 million (2021: £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 2022

FUTURE PLANS

An assessment of forthcoming strategic priorities for the Representative Body.

Short to medium term issues

Support for the Dioceses

The Representative Body continues to provide a comprehensive portfolio of services, advice and fi nancial support to the wider Church in Wales. This includes Partnership Funding (Block Grant) to dioceses.

Examples of services and advice provided to dioceses:

Human Resources – the human resources team has new leadership and provides support in relation to clergy offi ce holders and RB employees. Policies and procedures have been revised and updated and work is underway, with others, to focus on training and development opportunities for clergy and staff .

Property Services – providing advice and support to the whole Church in Wales for its estate of church buildings, residential and other properties, graveyards and other land holdings.

Legal Services – providing advice to ministry/mission areas and parishes in connection with approximately 2,500 trusts.

that suffi cient funding is available to undertake routine operational work optimally.

These are signifi cant sums of money and this commitment will aff ect the long term ability of the Representative Body’s investment portfolio to generate income. Therefore, it is imperative that this funding is used appropriately and an important element of ongoing work will be to ensure projects which receive support from the Fund are held accountable for their eff ectiveness. The Church Growth Fund Allocation Group will be formed and one of its main areas of work will be to monitor, audit and challenge projects that receive funding from the Fund and - where necessary - reduce or discontinue work that is not bearing fruit. The Allocation Group will also design the application process for the distribution of funding as well as assessing applications made and making grants within agreed budgeting parameters.

Rationalising and reshaping the arrangements for the provision of structural provincial funding to dioceses is an important area of work which will be undertaken by the Distribution of Funds Review Group. This will consider established practice and aim to review these in line with operational convenience and fairness of distribution. Resources must be used in the most eff ective way possible and the Group will seek to stimulate conversations about areas of work which may be done more effi ciently and eff ectively jointly.

Operational development projects

Finance Services – payment of stipends, administration of the Common Investment Fund, administration of the Clergy Pension Scheme.

ICT Services – Provision of computer services to staff in diocesan offi ces, the provincial offi ce and St Padarns. New system introduced for DBS checking; introduction of Church in Wales e-mail addresses for clergy in all dioceses.

Governance Services – provision of secretariat support to the Governing Body, the Standing Committee, the Representative Body, and their sub-committees, and to the Bench of Bishops.

A number of projects which will be signifi cant to the operational support provided by the Representative Body are underway. Infonet, the central database around which provincial administration revolves – including clergy and lay ministerial appointments, membership and fi nance data, DBS and Gift Direct administration, details of property ownership and occupation, committee membership and territorial confi gurations – has fulfi lled its role for almost 20 years and the technical infrastructure upon which it is built is now outdated and maintenance support dependent on the expertise of a single member of current staff . The development of a new database system to replace Infonet is underway and is due to be completed in April 2024.

Funding the Church in Wales

The Representative Body has committed £100 million of funding over the next ten years to the Church Growth Fund, to enable, promote and galvanise mission and evangelism in the Church in Wales, orienting it towards numerical and spiritual growth. It has committed a further £37 million over the same period to a Structural Resilience Fund – to ensure

A separate database to aid casework management within the provincial property department is being developed.

A mobile app to capture membership and fi nance data is in the process of being developed. An electronic means of submission will allow such data to be

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Annual Report and Accounts 2022 | The Representative Body of the Church in Wales

current and useable in a variety of ways. It would be possible for correlations to be made with other data, including demographic data, which could help support the tailoring of mission, evangelism and growth to the needs of a particular locality.

Safeguarding

The Representative Body continues to invest in its safeguarding resource. The Director of Safeguarding has brought together, into one team, activities in casework, training, policy and procedure development, and relationship building with the statutory agencies and other partners. A strategy for safeguarding-related governance together with a framework for the provision of training were agreed during 2022. Governance oversight is provided by the Safeguarding Committee (for matters relating to policy, procedure and training) and the Safeguarding Panel, which principally oversees and advises on the handling of casework. Both the Panel and Safeguarding Committee are accountable to the Standing Committee on behalf of the Governing Body. An annual safeguarding-related report is provided to the Governing Body.

was published in December 2021 and considered the events which led to the retirement of the former Bishop of Monmouth. The recommendations included a review and overhaul of disciplinary policies and procedures as well as people-related casework being undertaken in a more multi-disciplinary way. The implementation work has been overseen by a dedicated implementation group, the Monmouth Review Implementation Group, and the majority of the recommendations have now been implemented. Work continues on the few areas of work that remain.

Long term issues

Pensions

The actuarial valuation of the Clergy Pension Scheme at 31 December 2022 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 2025.

Training for Ministry

2022 saw St. Padarn’s Institute continue to consolidate its role as the Church in Wales’s institute for initial ministerial training, as it reached its sixth year of operation. St. Padarn’s and its signifi cant role in clergy training was at the forefront in eff orts to make sure those training for ministry – both lay and ordained – were equipped to foster numerical and spiritual growth in their various ministerial contexts.

During 2022 a period external review (PER) was undertaken at St. Padarn’s. PER is a review system operated by the Church of England for theological educational institutions which off er formational training, assessing the quality of ministerial formation provided. PER is a good vehicle for providing external scrutiny of the ministerial training programmes available at St. Padarn’s as well as of its culture and practices as a Christian learning institution.

The fi nal report was published in February 2023. The report contained several commendations of good practice at St. Padarn’s together with recommendations for enhancing current arrangements. A formal response to the PER report has been prepared.

Monmouth Review

During 2022 the Representative Body, together with the Standing Committee and Bench of Bishops, worked to respond to the 28 recommendations within the report of the Monmouth Enquiry and Review which

Climate Change

Following the Governing Body’s Climate Emergency declaration in April 2021, the Representative Body appointed a full-time Climate Change Champion to bring focus to this important area of work and much work has been done to engage with all parts of the Church in Wales.

A Net Zero Carbon Framework for the Church in Wales was approved by the Governing Body in 2022 and, in April 2023, an energy footprint tool for measuring the carbon footprint of buildings was launched.

A training programme in carbon literacy has been provided to Church leaders, provided by the Centre for Alternative Technology. Other gatherings to increase knowledge and galvanise action have been arranged, including a Climate Leaders programme, which focussed on theology, practical actions and missional outreach, and a gathering of a provincewide focus group to discuss onward work in this area. A Climate Change Hub will be developed to share information and ideas to progress and promote the work towards net zero throughout the Church in Wales and to monitor and update the framework to ensure it enables the net zero goal to be realised.

The Representative Body is committed to supporting the whole Church in its response to the global climate crisis.

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The Representative Body of the Church in Wales | Annual Report and Accounts 2022

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 normally 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 39. 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 15.

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:

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 – Finance, Investment, Property, Human Resources, Audit and Risk 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

Membership Eligibility

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

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 2022 | 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.

Human Resources Committee

The Human Resources 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.

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 is also responsible for 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.

Finance Committee

The Finance Committee was established in May 2021 and is the principal place of detailed engagement and interface between the Representative Body and its staff on matters of fi nancial strategy development; fi nancial planning and budgeting; scrutiny of un-budgeted expenditure proposals; fi nancial arrangements with the diocesan boards of fi nance; and matters relating to the staff and clergy pension schemes.

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 2022

THE PROVINCIAL STRUCTURE

----- Start of picture text -----
Governing Representative
Be nch of Bishops
Body Body
St. Padarn’s Bench Committees
Standing
Quality and Bishops' Portfolio
Committee
Standards Panel Support
Appointments
Safeguarding Drafting Legal
and Business
Committee Sub-Committee Sub-Committee
Sub-Committee
Cathedrals & Human
Finance Audit & Risk Investment Property
Churches Resources
Committee Committee Committee Committee
Commission Committee
Ethical
Investment
Group
----- End of picture text -----

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Annual Report and Accounts 2022 | 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.

Professor Medwin Hughes, Chair

Mrs Hilary Wiseman, Deputy Chair

26 June 2023

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The Representative Body of the Church in Wales | Annual Report and Accounts 2022

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 2022 which comprise the Statement of Financial Activities, Balance Sheet, 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 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 authorised 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 Introduction. 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 2022 | 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, 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), and determined that the principal risks were related to inappropriate journal entries and key accounting estimates. Audit procedures performed by the engagement team included:

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The Representative Body of the Church in Wales | Annual Report and Accounts 2022

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the fi nancial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions refl ected in the fi nancial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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 26 June 2023 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 2022 | The Representative Body of the Church in Wales

Statement of Financial Activities

For the year ending 31 December 2022

----- Start of picture text -----
General Designated Restricted Total Total
Funds Funds Funds Funds Funds
2022 2022 2022 2022 2021
Notes £000 £000 £000 £000 £000
Income from:
Donations and Legacies 19 - - 19 523
Charitable Activities - 796 - 796 339
Investments 2 20,672 289 - 20,961 19,151
Other 254 - - 254 251
-
20,945 1,085 22,030 20,264
Expenditure on:
Raising Funds 3 3,281 - - 3,281 3,023
Charitable Activities
Support for Ministry 4 14,197 37 - 14,234 10,941
Support for Dioceses and Parishes 5 6,242 1,730 - 7,972 14,438
Other Church Property 6 585 606 - 1,191 1,437
Other Financial Support 7 755 21 - 776 705
Communication 8 285 - - 285 323
-
25,345 2,394 27,739 30,867
-
Net Expenditure before Investment Gains (4,400) (1,309) (5,709) (10,603)
-
Net (Losses) / Gains on Investments (86,520) (1,541) (88,061) 83,526
-
Net Expenditure / Income (90,920) (2,850) (93,770) 72,923
Transfers between funds:
Emergency Aid Fund (200) 200 - - -
Cathedrals Funding (1,734) 1,734 - - -
Evangelism Fund (6,000) 6,000 - - -
Structural Resilience Fund (264) 264 - - -
Other Recognised Gains / (Losses):
(Losses) / gains on revaluation of fi xed assets 11,729 (7,857) 290 4,162 19,450
- - -
Write down of the holding valuation of Churches (73,715) (73,715)
- -
Allocation from / (to) Clergy Pension Provision 20,418 20,418 (22,135)
- -
Transfer from Clergy Pension Provision 57,575 57,575 26,154
- -
Actuarial gain on Staff Pension Scheme 8,495 8,495 6,941
Net Movement in Funds (58,476) (18,649) 290 (76,835) 103,333
Reconciliation of Funds:
Total Funds brought forward 533,342 369,232 4,550 907,124 803,791
Total Funds carried forward 474,866 350,583 4,840 830,289 907,124
----- 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 2022

Balance Sheet

As at 31 December 2022

----- Start of picture text -----
31 December 2022 31 December 2021
Note £000 £000 £000 £000
Fixed Assets
Non-Investment Properties 12 237,603 305,743
Tangible Assets 13 112 123
237,715 305,866
Investments
Investment Properties 14 52,885 63,825
Property Unit Trusts 15 9,925 9,823
Stock Exchange Securities 16 623,123 708,272
Funds held by Investment Managers 29,081 19,878
Money Market Deposits and Loans 17 14,091 22,667
729,105 824,465
Current Assets
Debtors 18 7,484 7,007
Cash at Bank and in Hand 1,483 1,076
8,967 8,083
Current Liabilities
Creditors: amounts falling due within one year 19 (4,971) (4,504)
Net Current Assets 3,996 3,579
Total Assets Less Current Liabilities 970,816 1,133,910
Long Term Liabilities
Clergy Pension Provision 21 (140,400) (218,000)
Net Assets excluding Staff Pension Liability 830,416 915,910
Defi ned Benefi t Staff Pension Liability 11 (127) (8,786)
Net Assets including Staff Pension Liability 830,289 907,124
Capital and Reserves
General Funds 474,993 542,128
Pension Reserve (127) (8,786)
474,866 533,342
Designated Funds 22 350,583 369,232
Restricted Funds 23 4,840 4,550
Total Funds 830,289 907,124
----- End of picture text -----

The fi nancial statements on pages 20 to 36 were approved by the Representative Body on 26 June 2023. Professor Medwin Hughes, Chair Mrs Hilary Wiseman, Deputy Chair

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Annual Report and Accounts 2022 | The Representative Body of the Church in Wales

Cash Flow Statement

For the year ending 31 December 2022

----- Start of picture text -----
31 December 2022 31 December 2021
Note £000 £000
Reconciliation of net income to net cash provided by operating activities:
Net (expenditure)/ income (93,770) 72,923
Adjustment for:
(Losses) / gains on revaluation of fi xed assets (69,553) 19,450
Allocations to clergy pension provision 77,993 4,019
Gain on staff pension scheme 8,495 6,941
Depreciation of tangible assets 13 11 12
Income from investments 2 (20,961) (19,151)
Expenditure on raising funds 3 3,281 3,023
Losses / (gains) on investments 88,061 (83,526)
Losses / (gains) on fi xed assets 12 68,155 (18,760)
Add:
Movement in debtors 18 (477) (419)
Movement in creditors 19 467 (1,438)
Movement on clergy pension provision 21 (77,600) (4,000)
Movement on staff pension liability 11 (8,659) (6,823)
Net cash provided by operating activities (24,557) (27,749)
Statement of cash fl ows
Cash fl ows from operating activities
Net cash used in operating activities (24,557) (27,749)
Cash fl ows from investing activities
Income from investments 2 20,961 19,151
Expenditure on raising funds 3 (3,281) (3,023)
Non-investment properties: additions 12 (2,560) (1,433)
Non-investment properties: sale proceeds 12 2,545 4,734
Investment properties: additions 14 (3) -
Investment properties: sale proceeds 14 - 1,420
Property unit trusts: sale proceeds 15 - 7,272
Stock exchange securities: additions 16 (275,543) (151,655)
Stock exchange securities: sale proceeds 16 283,197 168,147
Other sale proceeds 274 976
Movement in funds held by investment managers (9,203) (6,914)
Movement in money market deposits and loans 17 8,577 (10,935)
Net cash provided by investing activities 24,964 27,740
Change in cash and cash equivalents 407 (9)
Cash and cash equivalents at 1 January 1,076 1,085
Cash and cash equivalents at 31 December 1,483 1,076
----- End of picture text -----

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The Representative Body of the Church in Wales | Annual Report and Accounts 2022

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 have been prepared on a going concern basis and in accordance with the Statement of Recommended Practice 2015 (SORP 2015) and applicable accounting standards in the United Kingdom (FRS 102). The accounts have been prepared in pounds sterling rounded to the nearest thousand.

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 2022. Stock Exchange Securities:

Stock exchange securities are stated at market values based on bid price at 31 December 2022. 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 non-investment properties in the Balance Sheet at a valuation using the methodology set out below.

The Representative Body does not value the cathedrals and churches it owns, as cost information is not available and any conventional valuation techniques lacks 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, 1,383 Churches and 1,215 Churchyards at 31 December 2022. 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 Savills (UK) Limited as at 31 December 2022 and the basis of the valuation is set out below:

Parsonages, Bishops’ Houses and Sundry Provincial Property have been valued by the desktop valuation of a representative 19% sample of these properties and these results have been extrapolated to refl ect the total valuation of the portfolio. There are also a number Sundry Property buildings and plots which are not straightforward to value. The valuation of these assets has been increased by 2.3% which is the average increase from the representative sample of Parsonage houses which are owned by the Representative Body.

Church Halls are valued based on the desktop valuation of a representative 19% sample of these properties which has then been extrapolated to refl ect the total valuation of the portfolio.

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Annual Report and Accounts 2022 | The Representative Body of the Church in Wales

Accounting Policies Continued

The St Michael’s College site is valued at open market value (existing use) based on a professional valuation. Glebe has been valued based on the desktop valuation of a representative 18% sample of the portfolio which has then been extrapolated to refl ect the total value of the portfolio. The valuations were carried out by Cooke & Arkwright Limited and Jones Peckover Limited.

Depreciation of Other Tangible Assets

Assets or groups of related assets are written down to zero in the year of purchase. 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.

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 a qualifi ed actuary 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.

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.

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)

m. 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 2022

----- Start of picture text -----
2 Investment Income
Funds 2022 £000 Funds 2021 £000
- - - -
Gross income from property 3,714 3,714 3,460 3,460
Income from stock exchange securities 16,851 289 - 17,140 15,287 395 - 15,682
Interest from money market deposits and loans 107 - - 107 9 - - 9
20,672 289 - 20,961 18,756 395 - 19,151
3 Raising Funds
Funds 2022 £000 Funds 2021 £000
Stock Exchange Advisers 2,288 - - 2,288 2,354 - - 2,354
Investment Property Advisers 436 - - 436 278 - - 278
Sundry Property 253 - - 253 139 - - 139
Support Costs 304 - - 304 252 - - 252
3,281 - - 3,281 3,023 - - 3,023
General Designated Restricted Total General Designated Restricted Total
General Designated Restricted Total General Designated Restricted Total
----- End of picture text -----

Stock exchange advisers’ costs are calculated as a percentage of the underlying market value of the investments.

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4 Support for Ministry
Funds 2022 £000 Funds 2021 £000
- - - -
Clergy Pension Provision (note 21) 4,905 4,905 4,575 4,575
- - - -
Clergy Pension Contributions - Current 3,603 3,603 1,792 1,792
- - - -
Ministry Training - St Padarn’s Institute 2,441 2,441 1,988 1,988
Bishops 1,281 - - 1,281 942 - - 942
Clergy Property
Diocesan Inspectors’ Costs 491 - - 491 449 - - 449
Episcopal Residences 144 - - 144 62 - - 62
Sundry Property Costs 67 - - 67 5 - - 5
Safeguarding 358 - - 358 292 292
Mission and Ministry 176 - - 176 207 - - 207
Sundry Clergy Benefi ts 115 37 - 152 3 - - 3
Support Costs 616 - - 616 626 - - 626
14,197 37 - 14,234 10,941 - - 10,941
General Designated Restricted Total General Designated Restricted Total
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Annual Report and Accounts 2022 | The Representative Body of the Church in Wales

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5 Support for Dioceses and Parishes
Funds 2022 £000 Funds 2021 £000
Block Grant to Dioceses 2,567 - - 2,567 2,028 - - 2,028
Additional Grant Funding to Dioceses - - - - 8,697 - - 8,697
Structural Resilience Fund 1,584 79 - 1,663 - - - -
Repairs and Extensions to Churches - 304 - 304 - 325 - 325
Emergency Aid - 240 - 240 - 206 - 206
Evangelism Fund - 1,107 - 1,107 - 1,195 - 1,195
Support Costs 2,091 - - 2,091 1,987 - - 1,987
6,242 1,730 - 7,972 12,712 1,726 - 14,438
6 Other Church Property
Funds 2022 £000 Funds 2021 £000
Redundant Churches - 162 - 162 - 536 - 536
Church Sales Regulations - 396 - 396 - 461 - 461
Climate Change Fund - 48 - 48 - 34 - 34
Other Property Costs 2 - - 2 4 - - 4
Support Costs 583 - - 583 402 - - 402
585 606 - 1,191 406 1,031 - 1,437
7 Other Financial Support
Funds 2022 £000 Funds 2021 £000
DACs and Cathedrals and Churches Commission 51 - - 51 65 - - 65
Cathedrals Funding 318 21 - 339 180 5 - 185
Grants to Anglican and Ecumenical Bodies 156 - - 156 146 - - 146
Provincial Court and Tribunals 10 - - 10 12 - - 12
Other Support 87 - - 87 76 10 33 119
Support Costs 133 - - 133 178 - - 178
755 21 - 776 657 15 33 705
8 Communications
Funds 2022 £000 Funds 2021 £000
Communications 175 - - 175 192 - - 192
Support Costs 110 - - 110 131 - - 131
285 - - 285 323 - - 323
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 2022

----- Start of picture text -----
9 Support Costs
Funds 2022 £000
Chief Executive's Offi ce - 61 88 19 19 50 237
Human Resources - 5 742 - 4 - 751
Offi ce Services 43 78 273 80 19 13 506
Finance 247 178 198 77 39 - 739
Property - 82 175 249 - - 506
Legal - 45 189 89 46 11 380
Information Technology 14 167 426 69 6 36 718
304 616 2,091 583 133 110 3,837
Funds 2021 £000
Chief Executive's Offi ce - 56 153 21 21 77 328
Human Resources - 90 821 - 63 - 974
Offi ce Services 34 76 247 54 24 15 450
Finance 208 152 106 65 33 - 564
Property - 75 157 185 - - 417
Legal - 29 111 52 29 6 227
Information Technology 10 148 392 25 8 33 616
252 626 1,987 402 178 131 3,576
Raising Funds Support for Ministry Support for Dioceses and Parishes Other Church Property Other Financial Support Communications Total 2022
Raising Funds Support for Ministry Support for Dioceses and Parishes Other Church Property Other Financial Support Communications Total 2021
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The above fi gures include audit fees of £36,245 (2021: £32,950) in respect of the audit of the Representative Body, and £4,400 (2021: £5,335) in respect of the audit of the Staff Retirement Benefi t Scheme.

The total expenditure for Human Resources of £751,000 includes an accounting adjustment under FRS 17 for the Staff Retirement Benefi t Scheme of -£164,000 (2021: + £118,000).

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 2022 | The Representative Body of the Church in Wales

----- Start of picture text -----
10 Staff Numbers and Remuneration Total Total
2022 2021
£000 £000
Staff Costs
Salaries 3,757 3,497
National Insurance Contributions 418 357
4,175 3,854
Current Service Pensions Costs (Defi ned Benefi t Scheme) 1,097 1,026
FRS 102 Pension Scheme Adjustment (264) 118
Defi ned Contribution Pension Costs 150 121
Unfunded Pension Costs 23 23
5,181 5,142
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The numbers of staff whose employee benefi ts* fell in the following bands were:

Total
2022
Number
Total
2021
Number
£0 to £10,000
12
11
£10,001 to £20,000
17
11
£20,001 to £30,000
24
23
£30,001 to £40,000
37
30
£40,001 to £50,000
7
11
£50,001 to £60,000
11
10
£60,001 to £70,000
1
-
£70,001 to £80,000
4
5
£80,001 to £90,000
2
-
£110,001 to £120,000
-
1
£120,001 to £130,000
1
-
116
102

*Employee benefi ts include gross salaries and allowances but do not include employers' pension costs. Of the 116 staff employed during 2022, 11 had left prior to the end of the year.

The key management personnel consists of seven staff members, as set out on page 39 of this report. The total amount of their employee benefi ts was £691,625 (2021: 7 members, £636,241).

Trustees

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

Eight (2021: fi fteen) 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 £863 (2021: £2,557).

One Trustee received remuneration from the Representative Body in connection with their offi ce. The was the Most Reverend A T G John who is an Ex Offi cio Member of the Representative Body. His total remuneration was £51,740 (2021: £3,613) and pension contributions of £18,885 (2021: £1,319). A car was provided for the performance of his duties for which the cash benefi t was £687 (2021: £143).

28

The Representative Body of the Church in Wales | Annual Report and Accounts 2022

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 2021 and the next valuation of the Scheme is due as at 31 March 2024. The results of the 2021 valuation have been updated by an independent qualifying actuary to 31 December 2022 allowing for cashfl ows in and out of the Scheme and changes to the assumptions over the period.

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2022 2021
£000 £000
Amounts recognised in the Balance Sheet
Fair value of assets 17,351 19,132
Present value of funded obligations (17,478) (27,918)
Defi cit in Scheme (127) (8,786)
Net defi ned benefi t liability (127) (8,786)
Amounts recognised in the Statement of Financial Activities
Current service cost 721 875
Administration cost 48 51
Interest on liabilities 562 456
Interest on assets (390) (238)
Past Service Costs - -
Total 941 1,144
Remeasurements over the year
Loss / (gain) on Scheme assets in excess of interest 2,889 (1,811)
Gains from changes to assumptions (11,730) (3,548)
Experience losses / (gains) on liabilities 703 (250)
Gains from changes to demographic assumptions (357) (1,332)
Total remeasurements (8,495) (6,941)
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 19,132 16,970
Interest on assets 390 238
Employer contributions 1,105 1,026
Contributions by Scheme participants 131 133
Benefi ts paid (470) (995)
Administration costs (48) (51)
Return on plan assets less interest (2,889) 1,811
Fair value of assets at the end of the year 17,351 19,132
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29

Annual Report and Accounts 2022 | The Representative Body of the Church in Wales

----- Start of picture text -----
11 Staff Defi ned Benefi ts Scheme continued 2022 2021
£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 27,918 32,579
Current service cost 721 875
Contributions by Scheme participants 131 133
Past service costs - -
Interest cost 562 456
Benefi ts paid (470) (995)
Experience loss on liabilities 703 (250)
Changes to demographic assumptions (357) (1,332)
Changes to fi nancial assumptions (11,730) (3,548)
Defi ned benefi t obligation at the end of the year 17,478 27,918
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 £2,499,000. The assets do not include any investment in the Employer.

Actuarial Assumptions

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

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2022 2021
Discount Rate 4.60% 2.00%
Infl ation assumption (RPI) 3.35% 3.45%
Salary increases 2.65% 3.15%
Limited Price Indexation pension increases (RPI Max 5%) 3.35% 3.45%
Proportion married at retirement or earlier death 80.0% 80.0%
Post retirement mortality assumption: 95% of the S3PA tables 95% of the S3PA tables
and CMI 2020 projections and CMI 2020 projections
with a long-term rate of with a long-term rate of
improvement of 1.25% pa. improvement of 1.25% pa.
12 Non-investment Properties 2022 2021
£000 £000
At 1 January 305,743 290,284
Additions 2,560 1,433
Disposals (2,545) (4,734)
Net (decrease) / increase on revaluation (68,155) 18,760
At 31 December 237,603 305,743
Comprising:
Parsonage, bishops' houses and sundry provincial property 197,259 194,366
Churches - 73,715
Church Halls 15,013 21,086
Glebe 20,491 12,026
Operational properties 4,840 4,550
237,603 305,743
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30

The Representative Body of the Church in Wales | Annual Report and Accounts 2022

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13 Tangible Assets Offi ce Equipment
£000
Cost
At 1 January 172
Additions -
-
Disposals
At 31 December 172
Accumulated Depreciation
At 1 January 49
Charge for the Year 11
At 31 December 60
Net Book Value
31 December 2022 112
31 December 2021 123
14 Investment Properties 2022 2021
£000 £000
At 1 January 63,825 57,040
Additions 3 -
-
Disposals (1,580)
Net (decrease) / increase on revaluation (10,943) 8,365
At 31 December 52,885 63,825
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Investment properties were valued by Cushman & Wakefi eld at 31 December 2022 at £52,885,000 (2021: £63,825,000) in
accordance with the RICS valuation – Professional Standards 2014 and FRS 102.
15 Property Unit Trusts 2022 2021
£000 £000
At 1 January 9,823 16,832
-
Disposals (3,996)
Net increase / (decrease) on revaluation 102 (3,013)
At 31 December 9,925 9,823
16 Stock Exchange Securities 2022 2021
£000 £000
At 1 January 708,272 650,682
Additions 275,543 151,655
Disposals (249,505) (138,352)
Net (decrease) / increase on revaluation (111,187) 44,287
At 31 December 623,123 708,272
Historical cost at 31 December 530,381 504,343
Unrealised investment gains at 31 December 92,742 203,929
Investment gains calculated on historic basis 33,692 29,795
Listed in UK 227,470 267,805
Listed overseas 395,653 440,467
623,123 708,272
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31

Annual Report and Accounts 2022 | The Representative Body of the Church in Wales

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17 Money Market Deposits and Loans 2022 2021
£000 £000
At 1 January 22,667 11,732
Advances 6,221 20,022
Repayments (14,797) (9,087)
At 31 December 14,091 22,667
Comprising:
Money Market Deposits 6,103 15,092
Clergy Housing Loans 7,808 7,389
Diocesan Loans 91 95
Curates House Loans 64 66
Churches' Mutual Credit Union 25 25
14,091 22,667
18 Debtors 2022 2021
£000 £000
Prepayments 201 209
Other debtors 5,544 5,135
Accrued income 1,739 1,663
7,484 7,007
19 Creditors: amounts falling due within one year 2022 2021
£000 £000
Taxation and National Insurance Contributions 447 437
Rents received in advance 285 219
Amounts owed to special trusts 1,425 1,297
Other creditors 1,163 1,114
Accruals 1,651 1,437
4,971 4,504
20 Diocesan Maintenance of Ministry Fund 31 December 2022 31 December 2021
£000 £000 £000 £000
Income
Diocesan Boards of Finance 11,076 11,073
Other Income 2 7
11,078 11,080
Less: Payments
Clergy Stipends 9,038 9,008
Curates Stipends 886 950
National Insurance Contributions 1,005 956
Vacancy Fees 53 22
Sundry expenses and other payments 96 144
11,078 11,080
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32

The Representative Body of the Church in Wales | Annual Report and Accounts 2022

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21 Clergy Pension Provision 31 December 2022 31 December 2021
£000 £000 £000 £000
Balance at 1 January 218,000 222,000
Current service contributions 3,762 3,756
Transfer from General Funds:
Allocation from income (note 4) 4,905 4,575
Allocation of net investment (losses) / gains (20,418) 22,135
(11,751) 30,466
Less:
Pension payments to retired clergy (4,974) (4,759)
Pension payments to surviving spouses and civil partners (1,477) (1,498)
Gratuity payments of retired clergy (1,291) (1,393)
Transfer Payments (454) (371)
-
DIS Lump Sum Payments (192)
Administrative expenses (78) (99)
(8,274) (8,312)
Transfer to Pension Equalisation Fund (57,575) (26,154)
Balance at 31 December 140,400 218,000
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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 2022 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 4.8% at £140.4 million, which represented 19.2% (previously 27.3%) of total funds at that date. Based upon this valuation, the annual transfer from General Funds from 1 January 2023 will comprise 19.2% of both total income and net investment gains and losses (refl ecting income on the liability for past service) and 26.8% (previously 36.5%) 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 2022 and the interim valuation for 2021 are set out below. The next full actuarial valuation of the Scheme is due to take place at 31 December 2025.

31 December
2022
2021
Financial assumptions (nominal % pa)
Discount rate 4.8%
1.8%
Inf ation - RPI 3.4%
3.5%
Inf ation - CPI 2.7%
2.7%
Stipend increases 3.2%
3.2%
Pension increases - Stipend Linked 3.2%
3.2%
Pension increases - RPI up to 5% p.a. 3.3%
3.4%
Deferred revaluation 3.3%
3.4%
Post retirement mortality (life expectancy, in years)
Current pensioners age 65 – males 21.2
21.3
Current pensioners age 65 – females 23.6
23.6
Future pensioners age 65 (currently age 45) – males 22.1
22.3
Future pensioners age 65 (currently age 45) – females 24.7
24.7

33

Annual Report and Accounts 2022 | The Representative Body of the Church in Wales

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22 Designated Funds Balance Balance
1 January 31 December
2022 Income Expenditure 2022
£000 £000 £000 £000
Revaluation Reserve (Unrealised gains on parsonages, churches, 243,743 - 82,719 161,024
church halls and sundry property)
-
Property Reserve (Property improvements and acquisitions of 34,636 2,546 37,182
parsonages)
Church Repairs Capital Reserve (Capital fund for church repairs) 16,110 29 1,541 14,598
Church Sales Regulations (Funds available from the sale of 2,881 420 396 2,905
churches towards the cost of providing or adapting another place of
worship in the same parish)
Pension Equalisation Fund (Funds available to meet future clergy 57,344 57,774 37 115,081
pension liabilities)
Evangelism Fund (Funds available for dioceses to enact their 7,862 6,000 1,107 12,755
strategies on evangelism and church growth)
Climate Change Fund (Funds available to support the climate 598 - 48 550
change work of the Church in Wales)
Diocesan Parsonage Improvement Fund (Funds available for 5,161 2,333 3,761 3,733
improvements to parsonages and acquisitions of new parsonages)
Transformation Fund 24 - - 24
Repairs and Extensions to Churches (Funds available to parishes) 495 276 304 467
Redundant Churches (Funds available to contribute to costs arising (44) 76 162 (130)
in the maintenance and safety of redundant churches)
Emergency Aid (Funds available for emergencies) 340 301 240 401
Cathedrals Funding (Funds available for Quinquennial Inspections) 25 - 8 17
- -
Cathedrals Funding (Funds available for Key Building Repairs) 1,500 1,500
Cathedrals Funding (Funds available for Project Development) - 234 13 221
Structural Resilience Fund (Funds available for Provincial Projects) - 264 79 185
Overseas Fund (Funds available at the discretion of the Bishops to 56 13 - 69
assist in overseas aid)
Overseas Students (Funds available for overseas students) 1 - - 1
includes gains and losses. 369,232 71,766 90,415 350,583
22 Designated Funds (Prior Year) Balance Balance
1 January 31 December
2021 Income Expenditure 2021
£000 £000 £000 £000
Revaluation Reserve 228,395 15,348 - 243,743
-
Property Reserve 33,620 1,016 34,636
Church Repairs Capital Reserve 13,185 3,312 387 16,110
Church Sales Regulations 3,154 187 460 2,881
Pension Equalisation Fund 31,199 26,155 10 57,344
-
Evangelism Fund 9,057 1,195 7,862
Climate Change Fund 110 522 34 598
Diocesan Parsonage Improvement Fund 2,556 4,664 2,059 5,161
Transformation Fund 24 - - 24
Repairs and Extensions to Churches 568 252 325 495
Redundant Churches 374 119 537 (44)
Emergency Aid 215 330 205 340
Cathedrals Funding - 30 5 25
Overseas Fund 43 13 - 56
Overseas Students 1 - - 1
322,501 51,948 5,217 369,232
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34

The Representative Body of the Church in Wales | Annual Report and Accounts 2022

----- Start of picture text -----
23 Restricted Funds Balance Balance
1 January 31 December
2022 Income Expenditure 2022
£000 £000 £000 £000
St Michael’s College Site 4,550 290 - 4,840
(Endowment Fund held for the operation of an educational
institution)
4,550 290 - 4,840
23 Restricted Funds (Prior Year) Balance Balance
1 January 31 December
2021 Income Expenditure 2021
£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 - 33 33 -
(Funds available to support two specifi c projects)
4,550 33 33 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 2022 was £60,078,000 (2021: £67,165,000) and was invested in stock exchange securities and the Church in Wales Common Investment Fund. The income on these funds was £1,701,000 (2021: £1,578,000) 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 2022 the Representative Body has committed to pay £2.674 million to the dioceses in respect of the Block Grant in 2023. In addition, dioceses will receive an equal share of funding from the Structural Resilience Fund in 2023, amounting to £3.6 million in total.

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 £1.0 million (2021: £1.2 million).

35

Annual Report and Accounts 2022 | The Representative Body of the Church in Wales

----- Start of picture text -----
27 Stock Exchange Securities 31 December 2022
Market Value
£000 %
Fixed Interest
British Government Bonds 37,696 6.0
UK Bonds 32,744 5.3
Overseas Bonds 22,644 3.6
Total Fixed Interest 93,084 14.9
Equities
Communication Services 12,373 2.0
Consumer Goods and Services 59,173 9.5
Energy (Renewables) 23,952 3.9
Financials 114,015 18.3
Health Care 86,613 13.9
Industrials 69,993 11.2
Materials 30,893 5.0
Property and REITs 18,513 3.0
Technology 89,257 14.3
Utilities 11,275 1.8
Total Equities 516,057 82.9
Alternative Assets 13,982 2.2
623,123 100.0
----- End of picture text -----

Top Twenty Holdings as at 31 December 2022

£000
£000
Microsoft Corp
19,346
Accenture Plc
8,150
AIA Group Ltd
16,686
Otis Worldwide Corp
7,954
Medtronic Plc
14,028
Essilorluxottica
7,678
Mastercard Inc
11,689
National Instruments Corp
7,290
CME Group Inc
11,585
Intl Flavors and Fragrances
7,281
Astrazeneca Plc
10,606
Alphabet Inc
7,022
HDFC Bank Ltd ADR
9,038
Relx Plc
6,943
Unilever Plc
9,033
2.75% Treasury Stock 2024
6,655
Merck & Co. Inc
8,776
Broadcom Inc
6,618
BNY Mellon Global Dynamic Bond Fund
8,185
Prudential Plc
6,451

36

The Representative Body of the Church in Wales | Annual Report and Accounts 2022

----- Start of picture text -----
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)
2021 £000 15,287 3,460 784 19,531 (2,771) 16,760 (4,575) 12,185 1,988 942 1,792 454 207 292 3 10,725 1,298 192 3,459 - 21,352 (9,167) (8,532) (753) 118 - (9,167)
2022 £000 16,851 3,714 380 20,945 (2,977) 17,968 (4,905) 13,063 2,441 1,281 3,603 559 176 358 115 4,151 2,965 175 4,001 6,000 25,825 (12,762) (4,400) (8,198) (164) - (12,762)
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 Pension Contributions - current Clergy Property Mission and Ministry Safeguarding Sundry Clergy Benefi ts Funding to Dioceses 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
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37

Annual Report and Accounts 2022 | The Representative Body of the Church in Wales

REFERENCE AND ADMINISTRATIVE INFORMATION

Representative Body Membership

Elected Membership

Chair and Deputy Chair Professor M Hughes Chair

Mrs H M Wiseman Deputy Chair

The Most Reverend A T G John Archbishop of Wales

St Asaph

The Very Reverend N H Williams, Dean of St Asaph

Mrs H M Wiseman

Bangor

The Reverend M J Beecroft Dr H J Parry-Smith

Mr T Llewellyn (from 1 December 2022) Chair of Standing Committee

Dr S Miller (to 1 December 2022) Chair of Standing Committee

Mrs S Allin (from 22 March 2022) Chair, St Asaph Diocesan Board of Finance

The Venerable J C Harvey (from 22 November 2022) Chair, Bangor Diocesan Board of Finance

St Davids

The Venerable P Mackness, Archdeacon of St Davids

Mrs J A P Hayward

The Venerable M Komor, Archdeacon of Margam

Mr G I Moses

The Right Reverend M K R Stallard (to 5 April 2022) Chair, Bangor Diocesan Board of Finance

Mrs H Evans (from 19 July 2022) Chair, St Davids Diocesan Board of Finance

Mr N Griffi n (to 19 July 2022) Chair, St Davids Diocesan Board of Finance

Monmouth

The Venerable J S Williams, Archdeacon of Newport (to 11 October 2022)

Miss P R Brown

Swansea and Brecon

Mr M A Lawley Chair, Llandaff Diocesan Board of Finance

Mr P E Lea Chair, Monmouth Diocesan Board of Finance

Sir P Silk (to 8 August 2022) Chair, Swansea and Brecon Diocesan Board of Finance

The Venerable A N Jevons, Archdeacon of Brecon

Mr J M Watson (to 23 March 2023)

Nominated Membership

Mr R Davies (to 26 June 2023) Mr P D Kennedy

Mr T O S Lloyd OBE, DL, FSA

Mr C Clarke (from 12 May 2023)

Co-opted Membership

Professor M Hughes

Mrs J Heard

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The Representative Body of the Church in Wales | Annual Report and Accounts 2022

Committee Membership

(*denotes non-RB member)

Human Resources Committee (formerly the People Committee)

Investment Committee

Mr G I Moses (Chair) Mr R Anning Mr G Davies Mr J G Davies Professor M Hughes Mr J Fox Mr J Minett Mr D G Myrddin-Evans Mr R F Page (to 31 March 2022) The Venerable I K Rees

Audit and Risk Committee

Mrs J Heard (Chair) The Very Reverend N H Williams Mr V Jones Mrs R Nelson (from 31 March 2022) Mr D Richards (from 31 March 2022) Sir P Silk

Finance Committee

Mrs H M Wiseman (Chair) The Most Reverend A T G John (from 30 June 2022) The Right Reverend M K R Stallard (to 5 April 2022) The Venerable P R Mackness The Venerable J S Williams (to 11 October 2022) Professor M Hughes (from 30 June 2022) Mr M A Lawley

Mr P D Kennedy (Chair) The Right Reverend G K Cameron The Venerable R H E Davies (from 30 June 2022) The Reverend J W Davies* (from 30 June 2022) Mrs H Evans (from 24 November 2022) Mr N Griffi n (to 19 July 2022) Mr J M Watson (to 23 March 2023) Mrs H M Wiseman

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

Key Management Posts

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

Property Committee

Mr R Davies (Chair, to 30 June 2023) Mr C Clarke The Venerable A N Jevons The Venerable M Komor The Venerable P R Mackness The Venerable N H Williams The Venerable J S Williams (to 11 October 2022) The Reverend M J Beecroft Ms M Gerrard Mr J E Jones Mr D A Williams*

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Annual Report and Accounts 2022 | 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

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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