**THE REPRESENTATIVE BODY OF THE CHURCH IN WALES**
**Annual Report and Accounts 2023 2023**
## **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 ......................................... 38 Reference and Administrative Information .............................. 39
## **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 Website: www.churchinwales.org.uk Charity Registration Number 1142813
## **Front cover photographs:**
|_top left:_|St Peter’s Church in Llanbedr, became the f rst church in Wales to achieve its Gold Eco-Church award.|
|---|---|
|_top middle:_|Bishop Dorrien Davies was elected as the 130th Bishop of St Davids.|
|_top right:_|In June 2023, the Bishop of St Asaph blessed and rededicated All Saints Church in Newtown after re-ordering|
||project to transform the worship space.|
|_bottom left:_|In their f rst of cial engagement in Wales after the Coronation, The King and Queen visited Brecon Cathedral|
||to mark the centenary of the Diocese of Swansea and Brecon.|
|_bottom middle:_|In 2023 we celebrated 900 years of pilgrimage at St Davids, culminating at a special service at St Davids|
||Cathedral when the Archbishop blessed the shrine.|
|_bottom right:_|Their Royal Highnesses the Prince and Princess of Wales visited St Davids Cathedral on the anniversary of the|
||Queen’s death.|
The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
## **CHAIR’S INTRODUCTION**
As the world navigated the complexities of 2023, marked by the rise of artifi cial intelligence, the pressing issue of climate change with global temperatures on the rise, and increasing geopolitical tensions, the Church in Wales remained a steadfast presence, committed to
its mission and the well-being of its communities. One of the most signifi cant challenges we continue to face is the decline in church attendance, which is refl ective of a broader trend worldwide. Yet, at the heart of this challenge is an opportunity – an opportunity to rekindle the fl ame of faith and to reimagine the Church’s role as a beacon of hope and community.
2023 has been a year of ambition and innovation. The Church Growth Fund was formally opened for applications in October. With a commitment of £100 million from capital reserves, this Fund aims to develop innovative approaches for sharing the transformative message of Jesus Christ throughout communities in Wales. It is a once-in-a-generation opportunity to empower confi dent and consistent evangelism across the province. Its primary goal is to facilitate encounters with Jesus, foster faith, encourage baptism, and nurture discipleship. The Church Growth Fund Allocation Group, responsible for assessing and approving funding applications, held its inaugural meeting in June, taking the fi rst steps in this journey of innovation.
Of course, these accomplishments are not the Representative Body’s alone, but are shared with every member of our church who has contributed their time, resources, and prayers.
In a year fi lled with both promise and uncertainty, the Church in Wales’s commitment to the Gospel and the people of Wales prevailed. With a forwardlooking approach, the Church continues to adapt and innovate.
Ultimately, the Representative Body exists for the Church; to serve, support and resource the six dioceses and mission and ministry areas of the Church in Wales; to steward its resources and enable the proclamation of the Gospel in the most eff ective manner. This is and remains our commitment. We embrace the challenging journey ahead with optimism and look forward to the growth and vitality of our province over the next decade.
May I take this opportunity to express my personal thanks to the clergy and lay leaders of the Church in Wales for all your contributions to our mission and ministry. Your support is very much appreciated.
**Professor Medwin Hughes** Chair of the Representative Body
Furthermore, the Representative Body made a further £3.7 million available to the Dioceses through the Structural Resilience Fund , a strategic ten-year funding initiative aimed at ensuring the long-term stability and strength of the Church’s infrastructure. The fi nancial commitments made in 2023 are substantial, yet they are crucial for the long-term vitality of the Church’s work, as detailed in this annual report. The investment environment is challenging, and the Investment Committee continues to work closely with our advisors to ensure that the funds needed to support the mission and ministry of the Church in Wales are available.
The Representative Body continued to support progress to build on the Governing Body’s declaration of a climate emergency, the journey towards achieving a net-zero carbon footprint by 2030 saw practical steps being taken to reduce the environmental impact of church operations.
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Annual Report and Accounts 2023 **|** 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 its 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:
- To manage its investments so as:
- to meet the past service liability of the Clergy Pension Scheme;
- to provide the maximum sustainable level of support for the work of bishops, dioceses, parishes and cathedrals.
- To manage the ecclesiastical and secular property vested in it for the uses and purposes of the Church in Wales.
- To support the Bench of Bishops in its oversight of the St Padarn’s Institute by employing its staff and providing fi nancial and operational support resource.
- To employ specialist staff to advise the bishops in connection with their allocated portfolios of activity.
- To provide an effi cient and professional administrative service across a wide range of functions including:
## Ongoing Objectives
- Maintaining diocesan support – to maintain fi nancial support for dioceses through the Partnership Funding and other provisions.
- Financial stability – to ensure fi nancial stability with regard to the clergy and staff pension schemes.
- Fund performance – to make investment returns that exceed agreed benchmarks.
- Safeguarding – to continue to strengthen the Church’s capacity in safeguarding as we seek to be a Safe Church.
## Additional Objectives for 2024
- To administer the Church Growth Fund in line with the criteria and application process devised by the Church Growth Fund Allocation Group, in consultation with the Representative Body, ensuring rigorous scrutiny and accountability with accessibility and a willingness to encourage and support innovation.
- To work with dioceses to develop protocols for the mutual sharing of information to ensure fi nancial transparency.
- To develop a holistic property strategy which will inform decision-making around and management of each type of property within the Church in Wales.
- 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 movement towards being carbon net zero by 2030.
- payment of stipends and pensions to serving clergy and pensioners;
- management of trusts and other funds held provincially;
- organisation of provincial meetings of the Representative Body, Governing Body, Bench of Bishops and their committees;
- provision of guidance for the wider Church on a range of issues including safeguarding, IT, property management, data protection and human resources;
- maintenance of databases and information management.
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The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
## **ACHIEVEMENT AND PERFORMANCE**
Investment Gains were £47m in a positive year for the markets
## Overall Financial Position
The results for the year are shown in the Statement of Financial Activities on page 20.
There was an increase in total net funds for 2023 of £38 million. This was primarily due to gains on investments.
After considering other recognised gains and losses, the total funds shown on the balance sheet of the Representative Body at 31 December 2023 increased from £830 million to £868 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 2023, the Representative Body’s investment income increased by £1.6 million. Expenditure remained at 2022 levels.
The following operational results were generated by the charity during the year:
**----- Start of picture text -----**
£m
General Fund income 22.8
General Fund expenditure (25.4)
Net operational defi cit (2.6)
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The resulting net defi cit of £2.6 million was off set by investment gains of £47 million, a movement of (£8.7m) regarding the clergy pension provision, transfers to designated reserves of (£10.7m), losses on revaluation of fi xed assets of (£1m) and an actuarial gain on the staff defi ned benefi t pension scheme of £0.4m. This resulted in a net movement in funds over the year of £24 million.
## 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 table on page 4 explains how the Representative Body’s assets are structured.
The total assets of the Representative Body as at 31 December 2023 stood at £1,015 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 £147.5 million representing the clergy pension liability.
The net eff ect of this means that the total funds excluding the pension liabilities of the Representative Body are £868 million.
These funds are split as follows:
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£m
General Funds 499
Endowment Fund 5
Designated Funds 364
Total 868
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The Endowment Fund of £5.1 million represents the value of the former St Michael’s College site.
The Designated Funds totalling £364 million are set out in detail on page 34. However, 57% 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 Church Growth Fund, the Evangelism Fund, church repairs and future pension liabilities.
This leaves the General Funds which total £499 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.
The income generated by these investments of around £22 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. As may be seen on page 38, the Representative Body’s expenditure has for many years exceeded its income, but this is off set by the capital gains. The Trustees are aware that commitment to structural expenditure
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Annual Report and Accounts 2023 **|** The Representative Body of the Church in Wales
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.
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£m
Total Funds of
the Representative Body 1,015
Less: Clergy Provision (147)
Balance 868
Less: Endowment Fund (5)
Less: Designated Funds (364)
Balance
– representing General Funds 499
It is this £499 million that is held as investment assets
and generates the returns (income and capital).
**----- End of picture text -----**
## 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 2023 the total Partnership Funding was set at £2.7 million and an additional £3.6 million was provided to dioceses from the Structural Resilience Fund to provide additional assistance to the dioceses.
The Representative Body has agreed the Partnership Funding will be set at £2.5 million for 2024 together with £3.7 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 2023
## **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 2024 will receive a lump sum of up to £42,783 and an annual pension of £17,113. On the death of a cleric, a qualifying surviving spouse or civil partner receives 60% of the cleric’s pension, which in 2024 is £10,267 for full service.
The Clergy Pension Provision is shown in note 20 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 2023 393 229 866 1,488
Adjustments to opening fi gures (3) (4) (4) (11)
New entrants 35 - - 35
Members returning to active service 4 (4) - -
Leavers with deferred benefi ts (15) 15 - -
Transfers out - (1) - (1)
Retirements (23) (14) 50 13
Deaths - (2) (41) (43)
Membership at 31 December 2023 391 219 871 1,481
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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 took 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%
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Annual Report and Accounts 2023 **|** The Representative Body of the Church in Wales
## **FINANCIAL REVIEW**
## Investments increased by 4.6% over 2023
## 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:
- achieve a balance between sustainable levels of income and capital growth;
- optimise total returns without undue risk;
- continue to meet the Representative Body’s current to long-term liabilities and income commitments;
- operate within the constraints of the Church’s Ethical Investment Policy Statement, as set out on page 8.
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.
## Total Return
The total return (both income and capital growth) from the Representative Body’s fund during 2023 was 9.8%, outperforming the ARC comparator return of 7.5%. The annualised returns also outperformed the comparator over 3 years as highlighted in the table below.
**----- Start of picture text -----**
Representative Body Total Return v Benchmark
12 [%]
11.0
9 [%] 9.8
9.1
7.5
6 [%] 6.1 6.3
4.6
3 [%]
3.0
0
1 Year 3 Years 5 Years 10 Years
Representative Body ARC GBP Steady Growth ACI
**----- 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 ARC GBP Steady Growth ACI benchmark.
The property portfolio is measured against the MSCI Monthly Index.
## Investment Managers
## Stock Exchange Investments
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 2023 the total value of the Representative Body’s investments increased by 4.6% to £763 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 £147.5 million on 31 December 2023 (2022: £140.4 million).
The value of stock exchange securities increased over the year from £623 million to £674 million at 31 December 2023, an increase of 8.1%.
2023 was an eventful year for markets with plenty of forces for investors to navigate. The year started on a positive note, with confi dence buoyed by a number of good news stories underpinning investor risk appetite. However, this optimism was supplanted by worries around the trajectory of interest rates as central banks made it clear that they were prepared to continue on their hiking path in their determination to conquer infl ation, which was proving stickier than anticipated.
Against this backdrop, the month of March saw some of the more fragile banking institutions, including Silicon Valley Bank and Credit Suisse, succumbing to the weight of higher interest rates, giving rise to
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The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
worries about the stability of the fi nancial system and causing central banks to intervene amid fears of broader contagion. Markets began to worry about the consequences of the funding crisis in the banking sector and the potential for tighter credit conditions, as fi nancial institutions struggled for liquidity. The likely slowdown in economic growth that may ensue resulted in weakness in the oil price, which had already been falling since last summer’s geopolitically induced spike.
In the search for better outcomes elsewhere, investors began to focus on new innovations. The potential for artifi cial intelligence to improve productivity was much discussed, as the launch of ChatGPT was viewed as a potential infl ection point in the democratisation of the technology. This growing excitement around artifi cial intelligence propelled technology stocks higher, which continued through much of the year.
Elsewhere, the general tone was one of muted performance across a broad swathe of fi nancial assets through the Spring and Summer period. In particular, the prospect of interest rates remaining higher for longer, amid persistent infl ation and robust employment market data, led to a major bond selloff . Further concerns emerged in China, where the strength of the post-Covid recovery was called into question, with various economic indicators, such as retail sales and investments, weaker than expected as the country’s beleaguered property sector in particular has remained a drag on the economy.
The fi nal quarter of 2023 played out in two distinct phases. The fi rst stage, comprising the majority of October, witnessed a continuation of the subdued equity markets, as stronger-than-expected US employment and growth data coupled with persistent infl ation suggested that the US economy was still running too hot. However, the tone changed signifi cantly at the end of October, which marked the beginning of a major cross-asset-class rally, fuelled by a combination of downside surprises for infl ation and a more dovish tone by central banks, culminating in a series of interest-rate cuts being priced in by markets. This marked change in tone from the Federal Reserve, which steered investors away from prior expectations of “higher for longer” to anticipating rate cuts in the fi rst half of next year, was the chief catalyst of the equity market’s rally in the fi nal few weeks of 2023, and heralded the prospect of achieving the fabled “soft-landing”. Within equities, the ‘magnifi cent seven’ group of technology stocks continued to turbocharge performance, while bond yields retraced from their relentless climb higher.
Asset allocation ranges and the allocation as at 31 December 2023 are shown below:
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Asset Allocation Range
Allocation at
Asset class Range
31 December 2023
UK Equities 15-40% 15%
Overseas Equities 20-70% 61%
Fixed Interest 5-25% 15%
Alternatives 0-15% 7%
Cash 0-25% 2%
**----- End of picture text -----**
## Investment Property
The value of the Representative Body’s investment property portfolio decreased over the year from £62.8 million to £57.9 million. The Representative Body directly holds 9 investment properties and also holds units in 1 Property Units Trust (PUTs).
The direct properties are independently valued at each year end and as at 31 December 2023 at £47.9 million compared to £52.9 million at the end of 2022.
The PUTs investments were valued at 31 December 2023 at £10 million compared to £9.9 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
8
7.1
6 6.2
4
2 2.5 2.8 2.5 2.1
1.7
0
-0.1
-2
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 2023 **|** 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:
- Responsible employment practices;
- Conscientious corporate governance;
- Policies and practices which demonstrate a proper regard for the environment and for the well-being of the created order;
It is the policy of the Church in Wales not normally or knowingly to invest in any company:
- which derives more than 10% of turnover from a primary focus on gambling, or the production or sale of alcoholic beverages or tobacco products;
- which derives more than 5% of turnover from pornography, predatory lending activities or the proliferation of armaments;
- which derives more than 5% of turnover from the production or the extraction of fossil fuels.
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.
- Policies sensitive to the human rights and wellbeing of individuals and communities in which they operate;
- Fair trading practices.
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:
- Are responsible for the wanton despoliation of the environment;
- Are responsible for anything that threatens peace, security and communal well-being;
- Exploit, demean, corrupt or degrade humankind, especially the poor or the fi nancially vulnerable;
- Are indiff erent to the well-being of animals.
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The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
## 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 2023 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 2023 risk register has identifi ed the following as the top four most signifi cant risks:
**1. Financial instability or 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 and supporting information are provided to the Representative Body to allow potential problems to be identifi ed at an early stage. In 2023 the Representative Body agreed a mechanism for the provision of additional funding to dioceses to help develop their fi nancial resilience.
**2. Depletion of the Representative Body’s assets** 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 weekly. The investment portfolio is well diversifi ed and managed by two investment managers with complementary investment approaches.
**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. A membership app is being rolled out to assist with monitoring church attendance statistics.
**4. Increasing number of redundant church buildings** Accelerated decline may mean increased numbers of redundant church buildings, which become the responsibility of the Representative Body together with the associated liabilities. Some may be sold, but for others sale is problematic or even impossible. Dedicated property department staff members manage redundant church buildings to manage the liability risk. Work is taking place to improve the strategic approach to property generally and to provide a greater range of options for the future of church buildings.
## Reserves Policy
At 31 December 2023, the Representative Body’s total funds amounted to £868 million (2022: £830 million). This includes the Endowment and Designated Funds with a combined total of £369 million.
The Endowment Fund which total £5.1 million is in respect of the former St Michael’s College site.
The Designated Funds total £364 million and £207 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 Endowment and Designated Funds, as these funds are not available to spend. The Representative Body therefore considers that the General Fund balance of £499 million (2022: £475 million) represents the reserves available.
As shown in the Balance Sheet on page 21, the Representative Body’s General Fund balance is £499 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.
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Annual Report and Accounts 2023 **|** The Representative Body of the Church in Wales
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.
## General Funds
The amount of General Funds held by the Representative Body at 31 December 2023 totalled £499 million (2022: £475 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 2023 Designated Funds amounted to £364 million (2022: £350 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 £163 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.
## Endowment Fund
At 31 December 2023 the Endowment Fund amounted to £5.1 million (2022: £4.8 million), 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 2023
## **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 (originally called the Block Grant) to dioceses.
Examples of services and advice provided to dioceses:
**Human Resources** – the human resources team provides support in relation to clergy offi ce holders and RB employees. A thorough review of policies and procedures is underway to ensure that they are complaint with recent legislative changes and fi t for purpose. 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 1,890 trusts.
**Finance Services** – payment of stipends, administration of the Common Investment Fund, administration of the Clergy Pension Scheme.
**IT Services** – Provision of computer services to staff in diocesan offi ces, the provincial offi ce, St Padarn’s and Bishops’ offi ces. 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.
It has committed a further £37 million over the same period to a Structural Resilience Fund – to ensure that suffi cient funding is available to undertake routine operational work optimally.
These are signifi cant sums of money and this commitment may 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 Church Growth Fund are held accountable for their eff ectiveness. One of the roles of the Church Growth Fund Allocation Group is 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 has also designed the application process for the Fund, assesses applications made and makes grants within agreed budgeting parameters.
Rationalising and reshaping the arrangements for the provision of structural provincial funding to dioceses was an important area of work during 2023 undertaken by the Distribution of Funds Review Group. This considered established practice and reviewed these in line with operational convenience and fairness of distribution. Proposals for the distribution of Partnership Funding and funding via the Structural Resilience Fund were agreed by the Representative Body in the autumn of 2023.
## **Operational development projects**
A number of projects which will be signifi cant to the operational support provided by the Representative Body are underway. The 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 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.
A separate database to aid casework management within the provincial property department is also being developed for implementation in 2024.
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Annual Report and Accounts 2023 **|** The Representative Body of the Church in Wales
## **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. 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 report is provided to the Governing Body.
## **Training for Ministry**
2023 saw St. Padarn’s Institute continue its role as the Church in Wales’s ministerial training resource, as it reached its seventh 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.
In July 2023 the Bench of Bishops approved a new strategic direction plan for St. Padarn’s for the fi ve years 2023-2028. St. Padarn’s will continue to develop its core operations which centre around the provision of training and formation for licensed clergy and newly licensed ministers as well as continual ministry development (CMD) for clergy. St. Padarn’s also supports theology programmes at master’s level. Several areas of development were also expressed within the development plan, particularly maintaining and enhancing the reputation of St. Padarn’s as a higher education institution.
The fi nal report of the periodic external review (PER) undertaken during late 2022 was published in February 2023. This contained several commendations of good practice at St. Padarn’s together with recommendations for enhancing current arrangements. A formal response was submitted in May 2023. A follow-up visit by the lead reviewer took place in late 2023, with good developments from the original report noted.
## **Monmouth Review**
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 which expects to conclude its work in 2024.
## Long term issues
## **Pensions**
The Representative Body keeps 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. The Scheme is well funded and continues to represent a prudent proportion of the Representative Body’s total assets.
## **Climate Change**
Following the Governing Body’s Climate Emergency declaration in April 2021, the Representative Body appointed a full-time member of staff 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. This member of staff now sits within the Mission and Strategy group of staff to ensure this area of work is embedded with the overall strategic work of the Representative Body, and the wider Church in Wales.
The Representative Body is committed to supporting the whole Church in its response to the global climate crisis.
## **Eff ectiveness of structural governance**
The Church in Wales is a large organisation and its macro structure is complex. The leadership of the Church in Wales centres on its bishops and their shared episcope; the strategic direction of the Church in Wales lies with the Governing Body through its Standing Committee; and management of the fi nancial assets and governance lies with the Representative Body. Ideas will be explored to ensure the current arrangements are as eff ective as they might be with the possibility of bringing together the strategic work of the Standing Committee (which includes the bishops) with the asset management role of the Representative Body explored.
During 2023 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 was published in December 2021 and considered
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The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
## **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:
- The Archbishop;
- The Chair of the Standing Committee of the Governing Body;
- The Chair of the Diocesan Board of Finance of each diocese;
- One cleric elected by the Diocesan Conference of each diocese;
- One lay person elected by the Diocesan Conference of each diocese;
- Up to four members nominated by the Bench of Bishops in consultation with the Standing Committee;
- Up to two members co-opted by the other members of the Representative Body.
## **Membership Eligibility**
The following are eligible to be members of the Representative Body:
- Any cleric who holds an ecclesiastical offi ce in the Church in Wales or a licence from a Welsh Diocesan Bishop who is not retired nor has reached the age of 70;
- Any lay communicant over 18 and under 75 years of age who either:
- a. resides or has resided for a period of 12 months in a Church in Wales parish; or,
- b. whose name appears in the electoral roll in a Church in Wales parish and who does not belong to a religious body which itself is not in communion with the Church in Wales.
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 invited to an induction session at 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**
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.
## **Property Committee**
The Property Committee has responsibility for policy relating to the Representative Body’s non-investment property including churches, parsonages, burial
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Annual Report and Accounts 2023 **|** The Representative Body of the Church in Wales
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.
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.
## **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.
## **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 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.
##
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
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The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
## **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 2023 **|** 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:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities SORP;
- make judgments and estimates that are reasonable and prudent;
- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the fi nancial statements; and
- prepare the fi nancial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.
The trustees are responsible for keeping 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**
## **The Very Reverend N H Williams, Deputy Chair**
27 June 2024
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The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
## **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 2023 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:
- give a true and fair view of the state of the charity’s aff airs as at 31 December 2023 and of the charity’s net movement in funds for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Charities Act 2011.
## **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 2023 **|** 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:
- adequate accounting records have not been kept by the charity; or
- suffi cient accounting records have not been kept; or
- the charity fi nancial statements are not in agreement with the accounting records and returns; or
- we have not received all the information and explanations we require for our audit.
## **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:
- Inspecting correspondence with regulators;
- Discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
- Evaluating management’s controls designed to prevent and detect irregularities;
- Identifying and testing journals, in particular journal entries posted with unusual account combinations, postings by unusual users or with unusual descriptions; and
- Challenging assumptions and judgements made by management in their accounting estimates
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The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
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 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 2023 **|** The Representative Body of the Church in Wales
## Statement of Financial Activities
For the year ending 31 December 2023
**----- Start of picture text -----**
General Designated Endowment Total Total
Funds Funds Funds Funds Funds
2023 2023 2023 2023 2022
Notes £000 £000 £000 £000 £000
Income from:
Donations and Legacies 326 - - 326 19
Charitable Activities - 834 - 834 796
Investments 2 22,171 391 - 22,562 20,961
Other 263 - - 263 254
-
22,760 1,225 23,985 22,030
Expenditure on:
Raising Funds 3 3,397 - - 3,397 3,281
Charitable Activities
Support for Ministry 4 12,241 5 - 12,246 14,234
Support for Dioceses and Parishes 5 7,745 3,325 - 11,070 7,972
Other Church Property 6 1,005 215 - 1,220 1,191
Other Financial Support 7 728 152 - 880 776
Communication 8 252 - - 252 285
Expenditure before clergy pension -
25,368 3,697 29,065 27,739
provision movement
-
Clergy pension provision movement 8,732 (125) 8,607 (77,993)
-
Expenditure after clergy pension movement 34,100 3,572 37,672 (50,254)
Net (Defi cit) / Surplus before Investment Gains (11,340) (2,347) (13,687) 72,284
Net Gains / (Losses) on Investments 46,508 813 - 47,321 (88,061)
Net Surplus / (Defi cit) After Net Gains/(Losses) -
35,168 (1,534) 33,634 (15,777)
on Investments
Transfers between funds: (10,753) 10,753 - - -
Other Recognised Gains / (Losses):
(Losses) / gains on revaluation of fi xed assets (1,027) 4,533 230 3,736 4,162
- - - -
Write down of the holding valuation of Churches (73,715)
Actuarial gain on Staff Pension Scheme 390 - - 390 8,495
Net Movement in Funds 23,778 13,752 230 37,760 (76,835)
Reconciliation of Funds:
Total Funds brought forward 474,866 350,583 4,840 830,289 907,124
Total Funds carried forward 498,644 364,335 5,070 868,049 830,289
**----- 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 2023
## Balance Sheet
As at 31 December 2023
**----- Start of picture text -----**
31 December 2023 31 December 2022
Note £000 £000 £000 £000
Fixed Assets
Non-Investment Properties 12 246,531 237,603
Tangible Assets 13 100 112
246,631 237,715
Investments
Investment Properties 14 47,850 52,885
Property Unit Trusts 15 10,062 9,925
Stock Exchange Securities 16 673,729 623,123
Funds held by Investment Managers 7,072 29,081
Money Market Deposits and Loans 17 24,257 14,091
762,970 729,105
Current Assets
Debtors 18 8,444 7,484
Cash at Bank and in Hand 1,591 1,483
10,035 8,967
Current Liabilities
Creditors: amounts falling due within one year 19 (5,114) (4,971)
Net Current Assets 4,921 3,996
Total Assets Less Current Liabilities 1,014,522 970,816
Long Term Liabilities
Clergy Pension Provision 20 (147,500) (140,400)
Net Assets excluding Staff Pension Surplus / (Liability) 867,022 830,416
Defi ned Benefi t Staff Pension Surplus / (Liability) 11 1,027 (127)
Net Assets including Staff Pension Surplus / (Liability) 868,049 830,289
Capital and Reserves
General Funds 497,617 474,993
Pension Reserve 1,027 (127)
498,644 474,866
Designated Funds 21 364,335 350,583
Endowment Funds 22 5,070 4,840
Total Funds 868,049 830,289
**----- End of picture text -----**
The fi nancial statements on pages 20 to 36 were approved by the Representative Body on 27 June 2024.
Professor Medwin Hughes, Chair
The Very Reverend N H Williams, Deputy Chair
21
Annual Report and Accounts 2023 **|** The Representative Body of the Church in Wales
## Cash Flow Statement
For the year ending 31 December 2023
**----- Start of picture text -----**
31 December 2023 31 December 2022
£000 £000
Reconciliation of net income to net cash provided by operating activities:
Net Movement in Funds 37,760 (76,835)
Adjustment for:
Depreciation of tangible assets 12 11
Income from investments (22,562) (20,961)
(Gains) / losses / on investments (47,321) 88,061
(Gains) / losses on fi xed assets (1,244) 68,155
Add:
Movement in debtors (960) (477)
Movement in creditors 143 467
Movement on clergy pension provision 7,100 (77,600)
Movement on staff pension liability (1,154) (8,659)
Net cash provided by operating activities (28,226) (27,838)
Statement of cash fl ows
Cash fl ows from operating activities
Net cash used in operating activities (28,226) (27,838)
Cash fl ows from investing activities
Income from investments 22,562 20,961
Non-investment properties: additions (7,929) (2,560)
Non-investment properties: sale proceeds 1,477 2,545
-
Investment properties: additions (3)
-
Investment properties: sale proceeds 2,656
Property unit trusts: sale proceeds 32 -
Stock exchange securities: additions (201,711) (275,543)
Stock exchange securities: sale proceeds 199,295 283,197
Other sale proceeds 109 274
Movement in funds held by investment managers 22,009 (9,203)
Movement in money market deposits and loans (10,166) 8,577
Net cash provided by investing activities 28,334 28,245
Change in cash and cash equivalents 108 407
Cash and cash equivalents at 1 January 1,483 1,076
Cash and cash equivalents at 31 December 1,591 1,483
**----- End of picture text -----**
## **Analysis of changes in net funds**
The charity had no debt during the year.
22
The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
## 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), 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 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 2023. _Stock Exchange Securities:_
Stock exchange securities are stated at market values based on bid price at 31 December 2023. 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, 1,373 Churches and 1,213 Churchyards at 31 December 2023. 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 2023 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 4.8% 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.
23
Annual Report and Accounts 2023 **|** 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 19% 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.
- f. **Heritage Assets**
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.
- g. **Foreign Currency Conversion**
Foreign currencies are converted into sterling at the rate of exchange ruling at the date of the balance sheet except for purchases and sales of securities and remittances during the year which were converted at the actual rate prevailing.
- h. **Designated and Endowment Funds**
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. Endowment Funds are those held for specifi c purposes.
- i. **Pensions of Clergy and Surviving Spouses and Civil Partners**
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.
j. **Staff Retirement Benefi t Scheme**
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.
- k. **Taxation Status**
The Representative Body benefi ts from corporation tax exemptions available to charitable bodies. On the basis that its activities fell within its charitable purposes and its funds are applied for these purposes, no provision for corporation tax is made.
- l. **Financial Instruments**
The charity only has fi nancial assets and fi nancial liabilities of a kind that qualify as basic fi nancial instruments. Basic fi nancial instruments, including debtors and creditors are initially recognised at transaction value and subsequently measured at their settlement value. The recognition criteria for each class of fi nancial instruments is as follows:
|**Financial instrument**|**Measurement criteria (initial and subsequent)**|
|---|---|
|Cash:|Cash held, then on amortised cost|
|Debtors and loans:|Settlement amount or amount advanced then at amortised cost|
|Creditors:|Settlement amount after trade discounts then at amortised cost|
|Bank deposits:|Cash amount of deposit then at amortised cost|
|Investments:|Transaction cost then at fair value (market value of quoted investments)|
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 2023
**----- Start of picture text -----**
2 Investment Income
Funds 2023 £000 Funds 2022 £000
- - - -
Gross income from property 4,018 4,018 3,714 3,714
Income from stock exchange securities 17,545 391 - 17,936 16,851 289 - 17,140
Interest from money market deposits and loans 608 - - 608 107 - - 107
22,171 391 - 22,562 20,672 289 - 20,961
3 Raising Funds
Funds 2023 £000 Funds 2022 £000
Stock Exchange Advisers 2,266 - - 2,266 2,288 - - 2,288
Investment Property Advisers 621 - - 621 436 - - 436
Sundry Property 171 - - 171 253 - - 253
Support Costs 339 - - 339 304 - - 304
3,397 - - 3,397 3,281 - - 3,281
Stock exchange advisers’ costs are calculated as a percentage of the underlying market value of the investments.
4 Support for Ministry
Funds 2023 £000 Funds 2022 £000
- - - -
Clergy Pension Provision 3,783 3,783 4,905 4,905
- - - -
Clergy Pension Contributions - Current 2,815 2,815 3,603 3,603
- - - -
Ministry Training - St Padarn’s Institute 2,495 2,495 2,441 2,441
- - - -
Bishops 1,120 1,120 1,281 1,281
Clergy Property
Diocesan Inspectors’ Costs 469 - - 469 491 - - 491
Episcopal Residences 105 - - 105 144 - - 144
Sundry Property Costs 53 - - 53 67 - - 67
Safeguarding 379 - - 379 358 - - 358
Mission and Ministry 316 - - 316 176 - - 176
Sundry Clergy Benefi ts 3 5 - 8 115 37 - 152
Support Costs 703 - - 703 616 - - 616
12,241 5 - 12,246 14,197 37 - 14,234
General Designated Endowment Total General Designated Endowment Total
General Designated Endowment Total General Designated Endowment Total
General Designated Endowment Total General Designated Endowment Total
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25
Annual Report and Accounts 2023 **|** The Representative Body of the Church in Wales
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5 Support for Dioceses and Parishes
Funds 2023 £000 Funds 2022 £000
Partnership Funding 2,673 - - 2,673 2,567 - - 2,567
Structural Resilience Fund 3,594 101 - 3,695 1,584 79 - 1,663
Church Growth Fund - 1,165 - 1,165 - - - -
Repairs and Extensions to Churches - 185 - 185 - 304 - 304
Emergency Aid - 332 - 332 - 240 - 240
Evangelism Fund - 1,542 - 1,542 - 1,107 - 1,107
Support Costs 1,478 - - 1,478 2,091 - - 2,091
7,745 3,325 - 11,070 6,242 1,730 - 7,972
6 Other Church Property
Funds 2023 £000 Funds 2022 £000
Redundant Churches - 71 - 71 - 162 - 162
Church Sales Regulations - 118 - 118 - 396 - 396
Climate Change Fund - 26 - 26 - 48 - 48
Other Property Costs 47 - - 47 2 - - 2
Support Costs 958 - - 958 583 - - 583
1,005 215 - 1,220 585 606 - 1,191
7 Other Financial Support
Funds 2023 £000 Funds 2022 £000
DACs and Cathedrals and Churches Commission - - - - 51 - - 51
Cathedrals Funding 321 84 - 405 318 21 - 339
Grants to Anglican and Ecumenical Bodies 173 - - 173 156 - - 156
Provincial Court and Tribunals 4 - - 4 10 - - 10
Other Support 75 68 - 143 87 - - 87
Support Costs 155 - - 155 133 - - 133
728 152 - 880 755 21 - 776
8 Communications
Funds 2023 £000 Funds 2022 £000
Communications 155 - - 155 175 - - 175
Support Costs 97 - - 97 110 - - 110
252 - - 252 285 - - 285
General Designated Endowment Total General Designated Endowment Total
General Designated Endowment Total General Designated Endowment Total
General Designated Endowment Total General Designated Endowment Total
General Designated Endowment Total General Designated Endowment Total
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26
The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
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9 Support Costs
Funds 2023 £000
Chief Executive's Offi ce - 59 84 18 18 47 226
Governance - - 162 42 70 - 274
Human Resources - - 96 - - - 96
Offi ce Services 75 141 258 197 19 20 710
Finance 247 175 222 78 39 - 761
Property - 81 167 473 - - 721
Legal - 72 111 52 5 11 251
Information Technology 17 175 378 98 4 19 691
339 703 1,478 958 155 97 3,730
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
Raising Funds Support for Ministry Support for Dioceses and Parishes Other Church Property Other Financial Support Communications Total 2023
Raising Funds Support for Ministry Support for Dioceses and Parishes Other Church Property Other Financial Support Communications Total 2022
**----- End of picture text -----**
The above fi gures include audit fees of £39,600 (2022: £36,545).
The total expenditure for Human Resources of £196,000 includes an accounting adjustment under FRS 102, section 28, for the Staff Retirement Benefi t Scheme of -£764,000 (2022: - £164,000).
## **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 2023 **|** The Representative Body of the Church in Wales
**----- Start of picture text -----**
10 Staff Numbers and Remuneration Total Total
2023 2022
£000 £000
Staff Costs
Salaries 4,221 3,757
National Insurance Contributions 467 418
4,688 4,175
Current Service Pensions Costs (Defi ned Benefi t Scheme) 1,119 1,097
FRS 102 Pension Scheme Adjustment (764) (264)
Defi ned Contribution Pension Costs 192 150
Unfunded Pension Costs 43 23
5,278 5,181
The numbers of staff whose employee benefi ts* fell in the following bands were:
Total Total
2023 2022
Number Number
£60,001 to £70,000 3 1
£70,001 to £80,000 1 4
£80,001 to £90,000 4 2
£120,001 to £130,000 1 1
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*Employee benefi ts include gross salaries and allowances but do not include employers' pension costs.
The key management personnel consists of fi ve staff members, as set out on page 40 of this report. The total amount of their employee benefi ts was £467,826 (2022: 7 members, £691,625).
## **Trustees**
No Trustee received any remuneration for the services they provided as a Trustee.
Three (2022: eight) 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 £1,944 (2022: £863).
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 £54,328 (2022: £51,740) and pension contributions of £14,560 (2022: £18,885). A car was provided for the performance of his duties for which the cash benefi t was £780 (2022: £687).
28
The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
##
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 2023 allowing for cashfl ows in and out of the Scheme and changes to the assumptions over the period.
**----- Start of picture text -----**
2023 2022
£000 £000
Amounts recognised in the Balance Sheet
Fair value of assets 19,796 17,351
Present value of funded obligations (18,769) (17,478)
Defi cit in Scheme 1,027 (127)
Net defi ned benefi t surplus / (defi cit) 1,027 (127)
Amounts recognised in the Statement of Financial Activities
Current service cost 323 721
Administration cost 50 48
Net interest cost (12) 172
Past Service Costs - -
Total 361 941
Remeasurements over the year
(Gain) / Loss on Scheme assets in excess of interest (856) 2,889
Losses / (gains) from changes to assumptions 203 (11,730)
Experience losses on liabilities 173 703
Losses / (gains) from changes to demographic assumptions 90 (357)
Total remeasurements (390) (8,495)
Reconciliation of assets and Defi ned Benefi t Obligation:
The change in the assets over the year was:
Fair value of assets at the beginning of the year 17,351 19,132
Interest on assets 816 390
Employer contributions 1,125 1,105
Contributions by Scheme participants 132 131
Benefi ts paid (434) (470)
Administration costs (50) (48)
Return on plan assets less interest 856 (2,889)
Fair value of assets at the end of the year 19,796 17,351
**----- End of picture text -----**
29
Annual Report and Accounts 2023 **|** The Representative Body of the Church in Wales
**----- Start of picture text -----**
11 Staff Defi ned Benefi ts Scheme continued 2023 2022
£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 17,478 27,918
Current service cost 323 721
Contributions by Scheme participants 132 131
Past service costs - -
Interest cost 804 562
Benefi ts paid (434) (470)
Experience loss on liabilities 173 703
Changes to demographic assumptions 90 (357)
Changes to fi nancial assumptions 203 (11,730)
Defi ned benefi t obligation at the end of the year 18,769 17,478
Assets
**----- End of picture text -----**
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:
||**2023**
**2022**|
|---|---|
|Discount Rate|**4.65%**
4.60%|
|Inf ation assumption (RPI)|**3.10%**
3.35%|
|Salary increases|**2.75%**
2.65%|
|Revaluation of deferred benef ts before retirement:||
|GMP|**Fixed**
Fixed|
|Non-GMP|**3.20%**
3.25%|
|Pension increases after retirement:||
|RPI min 0% max 5%|**3.00%**
3.20%|
|RPI min 5% max 10%|**5.10%**
5.15%|
|Proportion married at retirement or earlier death|**80.0%**
80.0%|
|Post retirement mortality assumption:|95% of the S3PA tables,
CMI 2022 with 1.25% per
annum long-term trend.
95% of the S3PA tables,
CMI 2021 model allowing
for 25% of the data from
2020 and 2021 with 1.25%
per annum long term trend.|
**----- Start of picture text -----**
12 Non-investment Properties 2023 2022
£000 £000
At 1 January 237,603 305,743
Additions 7,929 2,560
Disposals (245) (2,545)
Net increase / (decrease) on revaluation 1,244 (68,155)
At 31 December 246,531 237,603
Comprising:
Parsonage, bishops' houses and sundry provincial property 207,549 197,259
Church Halls 13,852 15,013
Glebe 20,060 20,491
Operational properties 5,070 4,840
246,531 237,603
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30
The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
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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 60
Charge for the Year 12
At 31 December 72
Net Book Value
31 December 2023 100
31 December 2022 112
14 Investment Properties 2023 2022
£000 £000
At 1 January 52,885 63,825
Additions - 3
-
Disposals (4,741)
Net decrease on revaluation (294) (10,943)
At 31 December 47,850 52,885
Investment properties were valued by Cushman & Wakefi eld at 31 December 2023 at £47,850,000 (2022: £52,885,000) in
accordance with the RICS valuation – Professional Standards 2014 and FRS 102.
15 Property Unit Trusts 2023 2022
£000 £000
At 1 January 9,925 9,823
-
Disposals (23)
Net increase on revaluation 160 102
At 31 December 10,062 9,925
16 Stock Exchange Securities 2023 2022
£000 £000
At 1 January 623,123 708,272
Additions 201,711 275,543
Disposals (177,977) (249,505)
Net increase / (decrease) on revaluation 26,872 (111,187)
At 31 December 673,729 623,123
Historical cost at 31 December 554,114 530,381
Unrealised investment gains at 31 December 119,614 92,742
Investment gains calculated on historic basis 21,318 33,692
Listed in UK 229,086 227,470
Listed overseas 444,643 395,653
673,729 623,123
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31
Annual Report and Accounts 2023 **|** The Representative Body of the Church in Wales
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17 Money Market Deposits and Loans 2023 2022
£000 £000
At 1 January 14,091 22,667
Advances 14,749 6,221
Repayments (4,583) (14,797)
At 31 December 24,257 14,091
Comprising:
Money Market Deposits 16,303 6,103
Clergy Housing Loans 7,778 7,808
Diocesan Loans 89 91
Curates House Loans 62 64
Churches' Mutual Credit Union 25 25
24,257 14,091
Of the loan balances noted above the following is due in more than 1 year:
Clergy Housing Loans 7,778 7,808
Diocesan Loans 82 84
Curates House Loans 62 64
7,922 7,956
18 Debtors 2023 2022
£000 £000
Prepayments 1,067 201
Other debtors 5,219 5,544
Accrued income 2,158 1,739
8,444 7,484
19 Creditors: amounts falling due within one year 2023 2022
£000 £000
Taxation and National Insurance Contributions 506 447
Rents received in advance 342 285
Amounts owed to special trusts 1,445 1,425
Other creditors 981 1,163
Accruals 1,840 1,651
5,114 4,971
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32
The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
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20 Clergy Pension Provision 31 December 2023 31 December 2022
£000 £000 £000 £000
Balance at 1 January 140,400 218,000
Current service contributions 2,922 3,762
Past service cost allocations to maintain funding level of
last triennial valuation 12,515 (15,513)
Acturial movement (125) (57,575)
15,312 (69,326)
Less:
Pension payments to retired clergy (5,181) (4,974)
Pension payments to surviving spouses and civil partners (1,519) (1,477)
Gratuity payments of retired clergy (1,383) (1,291)
Transfer Payments (3) (454)
Administrative expenses (126) (78)
(8,212) (8,274)
Balance at 31 December 147,500 140,400
**----- End of picture text -----**
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 has comprised 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 2023 and the interim valuation for 2022 are set out below. The next full actuarial valuation of the Scheme is due to take place at 31 December 2025.
||**31 December**|
|---|---|
||**2023**
**2022**|
|**Financial assumptions (nominal % pa)**||
|Discount rate|**4.5%**
4.8%|
|Inf ation - RPI|**3.3%**
3.4%|
|Inf ation - CPI|**2.6%**
2.7%|
|Stipend increases|**3.1%**
3.2%|
|Pension increases - Stipend Linked|**3.1%**
3.2%|
|Pension increases - RPI up to 5% p.a.|**3.2%**
3.3%|
|Deferred revaluation|**3.2%**
3.3%|
|||
|**Post retirement mortality (life expectancy, in years)**||
|Current pensioners age 65 – males|**21.4**
21.2|
|Current pensioners age 65 – females|**23.8**
23.6|
|Future pensioners age 65 (currently age 45) – males|**22.4**
22.1|
|Future pensioners age 65 (currently age 45) – females|**25.0**
24.7|
33
Annual Report and Accounts 2023 **|** The Representative Body of the Church in Wales
**----- Start of picture text -----**
21 Designated Balance Balance
Funds 1 January Transfers 31 December
2023 Income Expenditure In / (Out) Gains 2023
£000 £000 £000 £000 £000 £000
Revaluation Reserve 161,024 - - - 1,953 162,977
- - -
Property Reserve 37,182 6,724 43,906
Church Repairs 14,598 16 - - 813 15,427
Capital Reserve
Church Sales 2,905 621 118 - - 3,408
Regulations
Pension Equalisation 115,081 125 5 - - 115,201
Fund
- -
Evangelism Fund 12,755 1,542 (3,000) 8,213
Church Growth Fund - - 1,165 13,100 - 11,935
Climate Change Fund 550 - 26 - - 524
- -
Diocesan Parsonage 3,733 3,970 8,114 (411)
Improvement Fund
Transformation Fund 24 - - (24) - -
Repairs and Extensions 467 374 185 - - 656
to Churches
Redundant Churches (130) 144 71 - - (57)
Emergency Aid 401 52 332 250 - 371
Cathedrals Funding 17 - 4 - - 13
Quinquennial Inspections
Cathedrals Funding 1,500 - 17 - - 1,483
Key Building Repairs
Cathedrals Funding 221 - 63 - - 158
Project Development
Communication of - - - 100 - 100
Good News Fund
Provincial Priorities - - - 327 - 327
Fund
Structural Resilience 185 - 101 - - 84
Fund
Overseas Fund 69 18 68 - - 19
Overseas Students 1 - - - - 1
350,583 5,320 11,811 10,753 9,490 364,335
**----- End of picture text -----**
34
The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
**----- Start of picture text -----**
Designated Funds Balance Balance
(Prior Year) 1 January Gains / 31 December
2022 Income Expenditure Transfers In (Losses) 2022
£000 £000 £000 £000 £000 £000
Revaluation Reserve 243,743 - - - (82,719) 161,024
- - -
Property Reserve 34,636 2,546 37,182
Church Repairs Capital 16,110 29 - - (1,541) 14,598
Reserve
Church Sales 2,881 420 396 - - 2,905
Regulations
Pension Equalisation 57,344 57,774 37 - - 115,081
Fund
- -
Evangelism Fund 7,862 1,107 6,000 12,755
Climate Change Fund 598 - 48 - - 550
- -
Diocesan Parsonage 5,161 2,333 3,761 3,733
Improvement Fund
Transformation Fund 24 - - - - 24
Repairs and Extensions 495 276 304 - - 467
to Churches
Redundant Churches (44) 76 162 - - (130)
Emergency Aid 340 101 240 200 - 401
Cathedrals Funding 25 - 8 - - 17
Quinquennial Inspections
- - - -
Cathedrals Funding 1,500 1,500
Key Building Repairs
Cathedrals Funding - - 13 234 - 221
Project Development
Structural Resilence - - 79 264 - 185
Fund
Overseas Fund 56 13 - - - 69
Overseas Students 1 - - - - 1
369,232 61,022 6,155 8,198 (81,714) 350,583
**----- End of picture text -----**
**Revaluation Reserve** (Unrealised gains on parsonages, church halls and sundry property) **Property Reserve** (Property improvements and acquisitions)
**Church Repairs Capital Reserve** (Capital fund for church repairs) **Church Sales Regulations** (Funds available from the sale of churches) **Pension Equalisation Fund** (Funds to meet future clergy pension liabilities) **Evangelism Fund** (Funds available for dioceses to act on evangelism and church growth) **Church Growth Fund** (Funds available for church growth initiatives)
**Climate Change Fund** (Funds available to support the climate change work of the Church in Wales) **Diocesan Parsonage Improvement Fund** (Funds available for parsonage improvements and acquisitions) **Transformation Fund** (Funds for diocesan and national projects - now closed)
**Repairs and Extensions to Churches** (Funds available to parishes)
**Redundant Churches** (Funds available to support costs arising in the maintenance of redundant churches) **Emergency Aid** (Funds available for emergencies)
**Cathedrals Funding** (Funds available for Quinquennial Inspections)
**Cathedrals Funding** (Funds available for Key Building Repairs) **Cathedrals Funding** (Funds available for Project Development)
**Communication of Good News Fund** (Funds to support the communication activities of the Archbishop) **Provincial Priorities Fund** (Funds for projects in support of the Church in Wales priorities statement) **Structural Resilience Fund** (Funds available for Provincial Projects) **Overseas Fund** (Funds available at Bishops discretion for overseas aid) **Overseas Students** (Funds available for overseas students)
35
Annual Report and Accounts 2023 **|** The Representative Body of the Church in Wales
**----- Start of picture text -----**
22 Endowment Fund Balance Balance
1 January 31 December
2023 Gains 2023
£000 £000 £000
St Michael’s College 4,840 230 5,070
(Fund held for the operation of an educational institution)
Endowment Fund (Prior Year) Balance Balance
1 January 31 December
2022 Gains 2022
£000 £000 £000
St Michael’s College 4,550 290 4,840
**----- End of picture text -----**
## **23 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 2023 was £63,444,000 (2022: £60,078,000) and was invested in stock exchange securities and the Church in Wales Common Investment Fund. The income on these funds was £2,203,000 (2022: £1,701,000) and was wholly distributed to benefi ciaries.
## **Custodian Trustee**
The Representative Body is the custodian trustee of 9 parsonages.
## **24 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:
- The Archbishop and some stipendiary clergy are members of and in receipt of payment from the Representative Body. Payments to bishops and stipendiary clergy are based on the clergy stipends set out in the Constitution.
- The six Diocesan Boards of Finance received Partnership Funding totalling £2,673,523 (2022: £2,566,876). Additional support was also provided to the dioceses in 2023 from the Structural Resilience Fund which totalled £3,593,557 (2022: £1,584,000). As at 31 December 2023 the dioceses also had outstanding loans totalling £1,658,000 (2022: £1,801,000) which have been advanced under the Clergy Retirement Housing Loan Scheme.
## **25 Charitable and Capital Commitments**
At 31 December 2023 the Representative Body has budgeted to provide £2.5 million to the dioceses in respect of Partnership Funding in 2024. In addition, dioceses will receive funding from the Structural Resilience Fund in 2024, of up to £3.7 million in total.
At the reporting end date the charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
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2023 2022
£000 £000
Within one year 362 362
Between two to fi ve years 1,237 1,599
Total 1,599 1,961
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The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
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26 Stock Exchange Securities 31 December 2023
Market Value
£000 %
Fixed Interest
British Government Bonds 38,605 5.7
UK Bonds 43,510 6.5
Overseas Bonds 15,121 2.2
Total Fixed Interest 97,236 14.4
Equities
Communication Services 23,675 3.5
Consumer Goods and Services 87,308 13.0
Energy (Renewables) 21,023 3.1
Financials 106,106 15.7
Health Care 85,376 12.7
Industrials 80,069 11.9
Materials 24,626 3.7
Property and REITs 17,455 2.6
Technology 103,073 15.3
Utilities 14,149 2.1
Total Equities 562,860 83.6
Alternative Assets 13,633 2.0
673,729 100.0
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## **Top Twenty Holdings as at 31 December 2023**
||**£000**
**£000**
Microsoft Corp
23,141
Otis Worldwide Corp
8,351
Alphabet Inc
22,903
Merck & Co. Inc
8,138
Relx Plc
15,692
Colgate - Palmolive Co
7,967
Accenture Plc
12,513
American Tower Corp
7,587
Mastercard Inc
12,422
Linde Plc
7,195
Medtronic Plc
12,402
Amgen Inc
6,931
AIA Group Ltd
12,338
Eli Lilly & Co
6,879
Apple Inc NPV
12,106
Informa Plc
6,780
CME Group Inc
11,959
Universal Music Group NV
6,723
Amazon.Com Inc
9,865
2.75% Treasury Stock 2024
6,472||
|---|---|---|
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Annual Report and Accounts 2023 **|** The Representative Body of the Church in Wales
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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 (2771) 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)
2023 £000 17,545 4,018 1,197 22,760 (3,058) 19,702 (3,783) 15,919 2,495 1,120 2,815 522 316 379 3 6,267 1,378 155 4,494 10,100 30,044 (14,125) (2,608) (10,753) (764) - (14,125)
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 Support for Dioceses Other Church Property and Financial Support Communications Provincial Services Church Growth, Evangelism & Transformation Funds Total Expenditure Defi cit Reconciliation to the Statement of Financial Activities: Net operational defi cit Transfers between Funds FRS 102 Pension Scheme Adjustment Capital Gifts and Legacies Defi cit as shown above
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The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
## **REFERENCE AND ADMINISTRATIVE INFORMATION**
## Representative Body Membership
## **Bangor**
**Chair and Deputy Chair** Professor M Hughes Chair
The Reverend M J Beecroft
Dr H J Parry-Smith
The Very Reverend N H Williams _(from 21 March 2024)_ Deputy Chair
Mrs H M Wiseman _(to 31 December 2023)_ Deputy Chair
## **St Davids**
The Venerable P Mackness, Archdeacon of St Davids
Mrs J A P Hayward
##
##
The Most Reverend A T G John Archbishop of Wales
The Venerable R E A Green, Archdeacon of Llandaff _(from 1 January 2024)_
Mr T Llewelyn Chair of Standing Committee
The Venerable M Komor, Archdeacon of Margam _(to 31 December 2023)_
Mrs S Allin Chair, St Asaph Diocesan Board of Finance
Mr G I Moses _(to 31 December 2023)_
Dr H Payne _(from 1 January 2024)_
The Venerable J C Harvey Chair, Bangor Diocesan Board of Finance
## **Monmouth**
Mrs H Evans Chair, St Davids Diocesan Board of Finance
The Venerable I K Rees, Archdeacon of Monmouth _(from 1 January 2024)_
Mr M A Lawley Chair, Llandaff Diocesan Board of Finance
Miss P R Brown _(to 31 December 2023)_
Miss N C Gibbons _(from 1 January 2024)_
Mr P E Lea Chair, Monmouth Diocesan Board of Finance
## **Swansea and Brecon**
Mr J Brown
Chair, Swansea and Brecon Diocesan Board of Finance _(from 15 November 2023)_
The Venerable A N Jevons, Archdeacon of Brecon _(to 31 December 2023)_
The Reverend Dr A Morgan _(from 1 January 2024)_
## Elected Membership
Mr J M Watson _(to 23 March 2023)_
## **St Asaph**
## **Nominated Membership**
The Very Reverend N H Williams, Dean of St Asaph
Mrs H M Wiseman _(to 31 December 2023)_
Mr P R Williams _(from 1 January 2024)_
Professor M Hughes Mr C Clarke _(from 12 May 2023)_ Mr R Davies _(to 26 June 2023)_ Mr P D Kennedy Mr T O S Lloyd OBE, DL, FSA
## **Co-opted Membership**
Mrs J Heard Mr R Anning _(from 21 March 2024)_
39
Annual Report and Accounts 2023 **|** The Representative Body of the Church in Wales
## Committee Membership
(*denotes non-RB member)
## **Investment Committee**
Mr G I Moses _(Chair) (to 31 December 2023)_ Mr R Anning _(Chair) (from 21 March 2024)_ Mr G Davies* Mr J G Davies* Professor M Hughes Mr J Fox* Mr J Minett* Mr D G Myrddin-Evans* The Venerable I K Rees
## **Audit and Risk Committee**
Mrs J Heard _(Chair)_ The Very Reverend N H Williams _(to 21 March 2024)_ Mr V Jones* Mr T Llewelyn _(from 21 March 2024)_ Mrs R Nelson* Mr D Richards* Sir P Silk*
## **Finance Committee**
## **Human Resources Committee**
Mr P D Kennedy _(Chair)_ The Right Reverend G K Cameron* The Venerable R H E Davies* The Reverend Canon J W Davies* Mrs H Evans
Mrs J A P Hayward _(from 26 June 2023)_ Mr J M Watson _(to 23 March 2023)_ Mrs H M Wiseman _(to 31 December 2023)_
## **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 Chief Operating Offi cer General Counsel and Head of Legal Services Director of Mission and Strategy Principal of St Padarn’s Institute
Mrs H M Wiseman _(Chair) (to 31 December 2023)_ The Very Reverend N H Williams _(Chair) from 21 March 2024)_ The Most Reverend A T G John The Venerable P R Mackness Mrs H Evans _(from 21 March 2024)_ Professor M Hughes Mr M A Lawley Dr H Payne _(from 21 March 2024)_
## **Property Committee**
Mr R Davies ( _Chair) (to 26 June 2023)_ Mr C Clarke _(Chair) (from 26 June 2023)_ The Venerable R E A Green _(from 21 March 2024)_ The Venerable A N Jevons _(to 31 December 2023)_ The Venerable M Komor _(to 31 December 2023)_ The Venerable P R Mackness The Venerable I K Rees _(from 21 March 2024)_ The Venerable N H Williams The Reverend M J Beecroft The Reverend Dr A Morgan _(from 21 March 2024)_ Ms M Gerrard* Mr J E Jones* _(to 31 December 2023)_ Mr D Penwarden* _(from 21 March 2024)_ Mr D A Williams* _(to 31 December 2023)_
40
The Representative Body of the Church in Wales **|** Annual Report and Accounts 2023
## 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 Yarnwicke 119-121 Cannon Street London EC4N 5AT
## **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
41