2021-12-31-accounts

Live | Pray | Serve IfFryI Diocese ofPortsmouth ANNUAL REPORT AND FINANCIAL STATEMENTS For the year ended 31 December 2021 PORTSMOUTH DIOCESAN BOARD OF FINANCE Company number- 226466 Règlstered charity number- 249256 Seeking to grow in depth, impact, and number across the Diocese of Portsmouth. A large print version is available on request from Jane Dobbs Email:'ane.dobbs ortsmouth.an lican.or Courageous I colluborutlv• l yenerous I ve•oure•ful I plon••vlng First Aoor. Penin5u1ar House. WharfRood, Portsmouth P02 8HB . 023 9289 9650. port5mtsuth.angllcon.org . @CofEPortsmouth AC(￿￿￿11￿￿tedtsVg￿Ut0Thte¢.te9l$¢e1¢￿ in No. 2￿66.(M￿tY￿￿?49z96 THE CHURCH J OF ENGLAND

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 Decembèr 2021 TABLE OF CONTENTS Contents TABLE OF CONTENTS....................................................................................,..........................................,................ Foreword............... . ................................................................................................................................................ Legal Objeets............................................................................................................................................................. strateglc Alm5....................................................................,................................,.................................................... A¢tlvltles & Achlevements for the Year.................,.................................................................................................. Future Plans.. Financlal RevSew........................ Prlnclpal Rlsks & Untertaintles.................................. .11 Structure & Gov*rnance.....................................................................................................................................,...13 Trustees, Responslbllltles................................................................... .16 Admlnlstratlve Detalls...................................... .17 Independent Auditors report.............................,,.,.. Statement of Flnanclal Aetivitles.............................................................................. ..20 .23 Balance sheet...,... ..24 Cashflow Statèment...,.,,...............................,.,.,,,...............................,,,................................. .25 Notes to the fSnènclal statements..............................-..............................,....................................,,...... ..26

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 Foreword It is a privilege to have been called to serve the good news of Jesus Christ in the midst of the people, communlties and neighbourhoods of the Dlocese of Portsrnouth. It Is a moment, as we all know, of si8nificant upheaval in society and for the world. Together with organisations and Institutions acr05S the UK as a whole, we will ¢ontlnue to need to address significant financlal and organisational challenges associated with a global pandemic. war in Ukralne and rising living costs. In this context it wlll be vital to face, rather than to avoid or postpone addre55ing, J** questions which arise for our Corporate Ilfe and mission. Flnding courage and confidence in Jesus Christ, In one another, in the future and in our shared capacity for resilience and renewal will be key factors enabling us to navigate stormy, uncertaln or even threatenlng waters. As I be8in mlnlstry in the Diocese, I recall the words of a member of a reli8lOU5 ¢ommunlty who wrote to encourage her community at a tlme of change and transition. These words provide a context foT the work accounted for in this Report, and for the vocational life and activity which opens up before us In the year ahead. She wrote Look back, remember and have confidence.. The future like the past, has God in it. God's cupped hands hold the whole of time, and you,. Nothing can elude God'5 covenanted care and mastery. With grateful thanks to all those whose hard work, faith and commitment 15 Tefle¢ted In the pages of this Annual Report. The Right Revd Jonathan Frost Bishops of Portsmouth

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 The Trustees. who are also Directors for the purposes of company law, present their annual report, tO8ether with the audited financial statements, for the year endÈd 310ecember 2021. The dlrectorsltrustees are one and the same and in signlng a5 trustees thèy are also SiEnln8 the report in their capacity as directors. This combined report satlsfie5 the legal requirements for.. Directors. Report of a charitable company, and a Trustees Annual Report under the Charitie5 Act 2011 Legal Objects The Portsmouth Diocesan Board of Finance I"PDBF"1'5 principal object Is to promote, assist and advance the work of the Church of England in the Diocese of Portsmouth by actlng as the financial executive of the Portsmouth Diocesan Synod. The Diocese of Portsmouth coveis prbncipally South East Hampshire and the Isle of Wight. Strategic Aims Our vision during 2021 has been to LlvelPraylSeNe so that we'.- Live the Good News of God in jesus Christ Pray on our own and in cornmunity to know God's wlll, and to Serve the people among whom we live and work. The outworkin8 of this visSon Is that acioss the communities in our diocese we aim to see growth in depih, impact and number. This means that through the work of PD8F, working in collaboiation with our parishes and schools, more people will corne to love the Lord their God with all their heart. mind, soul and stiength, rnore people will be actively loving their neighbour as themselves,. and more people will join us in going out to make new disciples and to make disciple5 of all nations. Our values determine how we go about fulfilling our vision. We seek to be.'_ Courageous- we ale bold and obedient In our actions, willing to make costly dècisions that we and others have shied away from in the past, and not just for the $8ke of those wlthln tsur churches but for those who might never consider entering them. Collaborative-we strive throu8h ourstructures but also through ourattitude and approach to work together a¢r05s parishes, deaneries, ecumenically and throughout the diocese, because we belleve that we are one body wlth many parts all worklng In the servlce of God. fjenerous we share our time, money and other resources with those who have least. being patient and supportive, as communities discover and offer their own gifts, consciously and prayerfully allowlng our resources to follow what we believe God is asklng us to do in mlssion. Resourceful - we wlll be good stewards who see that God gives us what is sufficient to do His work, who make the most of what we have, and who respond wholeheartedly to opportunities foi mission when they arise. Ploneerlng- we follow the first disclples after Pentecost, considering with fresh and transformed eyes what God is asking us to do to reach other5 Wlth the good news of Christ. being creative, taking risks and sometimes falllng, being willing to let go of the habits whi¢h hinder us, and all thi5 in the spirit of trust in the resurrection.

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 310ecember 2021 We therefore look to Matthew 5..14-16, which speaks of a distinctive witness to the world, rooted in prayer and service. As Christians in Portsmouth Diocese, reflecting the light of ChTlSt, like a beacon acr055 land and sea, we seek to transform this place, on the mainland and on our islands, as we respond and Serve faithfully in our context. Activities & Achievements for the Year 2021 required us all to navigate changing restrictions and ultimately the relaxation thereof. This meant everyone across our diocese and within the organisation adjusting to what was often badged as the 'new normal,. 2021 was another challenging year for the PDBF and one punctuated by major change of different kinds but leadership change was a dominant theme during the year. After almost 11 years in post, Blshop Christopher retired as our diocesan bishop on 24th April 2021, thus creating a vacancy in the See of Portsmouth. The announcement of his retirement triggered the Vacancy in See process, which involved a period of extensive consultation to support the preparation of our Statement of Needs la dc>cument outlinin8 the needs of the diocese and setting out the person specification for our next Dlocesan Bishop). Thls process rnoved to intèrview in July 2021 wlth the announcement on 8, October 2021 that the Rt Rev Dr Jonathan Frost would become the tenth Bishop of Ptsrtsmouth, with his confirmation of election taking plaee on 18, January 2022 and Installation on 12 March 2022. As one of only two dloceses within the Church of England, with no suffragan or area bishops to art in the vacancy, we were given a Commissary Bishop. We were therefore blessed to have Rt Rev Rob Wickham, Bishop of Edmonton in the Diocese of London, serve as our Commissary Bishop from 24" April 21 until 12" March 2022. Bishop Rob led and 5UPPOrted us as we navigated what proved to be a difficult year in terms of strategic planning, financial management and operatlonal functionalltv. Education Our Education Team continued to support schoo15 through yet another challengin8 year whlch included the significant demands on teachers as they navlgated the return to face to face teaching for all students in the spring and rnental health for children and staff alike has remained a focus. The impact of the pandemic has led to several Headteacher recruitments which are well supported by our education team. OFSTED inspections have a150 restarted which is also 8 tlme when the support ol the team is valued by our schools. Lay & Ordained Ministry Through the work of the Lay & Ordained Ministry Team, training for clergy and laity contlnued during 20218$ dld the lay disclpleship course and the work of the Portsmouth Pathway. In 202111 candidates were sent to the Temporary Online Discernment Process ITODPI (temporary as it was in place to be able to navigate the Covid19 Testrictionsl,. all were recommended for training at different points during 2021. Slnce their TODP, 4 of those 11 have moved away from the area and have been transferred to other dioceses leaving 7 for whom we are pastorally and financially responsible. In June 2021 the diocese ordained 7 deacons and 3 priests. Community Engagement & Impact Community groups continue to be at the fore, seeking to serve those In greatest need. Churches continued to offer support in a variety of ways including food banks, free cafés and hubs to leed the homeless and those needing

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 support of this kind. Our chaplains have also been actlve across a variety of sectors in our diocese. The PDBF'S partnership with CSR meant support continued throtsgh the Good Nelghbour5' Network, serving the diocese but more widely in Hampshire also. Overall Strategic Direction Through 2020 we had developed strateglc plans in whlch we would seek to be a thriving diocese which was growlnÈ. This focus on achieving missional growth is first and foremost a Gospel imperative but also necessary if we are to be able to become financlally sustainable. The premise beln8 that if we continue to manage decline then that spiral of decline would contlnue. In March 2021 Blshop's Council, voted on two key decisions.. approval of a slngle parish benefice, tearn ministry model to be applied contextually across the diocese. This can be summarised as follows: Y+afftRector InT3tryTtimJ Commi$$th￿&￿VP1J£IllSl ShDTdGthin•nr• SAdmln MthiStryTtim MkYedEcoT4yDf¢wllrei4110 L¢c4lldAtIlV4Ddpurp 4¥thoiilY1ow¢rk￿ loc￿(0￿10t$1VkiP roc1lideftt￿V4nd¥L￿t¢￿QmV E¢orfhurfhit ShaidCMYAdmin/FlhintsSyst• fjie•lerinwÈmEntw51h A51emb1rèS.le$50Th5uppon SchoD1sPo51o Fou4binks.l>&bt 5vpport.lobClubs PtexlO￿ss1Odd1effjl0uP1 Crt4trrtknistKEJpI￿￿n$lG1￿ps Eco4ndG•rdtnin¢AllJtM•fils Sportx&Wellbtini Gt¢up5 ot￿1(￿￿￿u￿￿Ytsr0Yp This decision also included approval of four key strategic elements which were to be a focus lor 2021 and beyond to help us achieve our vlslon for a thrlving diocese-. Visionary Leadership Teams on a Mission Communities of Kin8dom Building Disciples Growth Enabling Structu¥es Bishop's Council a150 agreed to apply to the National Church for Transformation Fundlng which involved a cornmitment from reserves for match funding. None of these decisions were easy and although they were agreed, this was not wlth a significant majorlty or without substantial concern. This was perhaps understandable when the nature of change being recommended was both radical and18r8e-scale. The proposal was rnade In response to our current missional and financial challenges, but also in reco8nition of the potential opportunitles to 8row. In response to feedback from those in our parishes in relation to the 5trategSc framework, Bishop's Council agreed in June 21 that the remainder of 2021 would be used for further local conversation to develop thinkin8 and hear mole

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 about local plans and aspirations. This decision significantly changed the course of 2021 and to some degiee increased the challenge that we face as the DBF and a wider diocese. In November 21, Diocèsan Synod met to grapple with the next steps in the light of Bishop's Councll's declsion. The agreed steps being.. Ongolng prayer- locally and dio¢ese wlde, corporately, and individuallv Deaneries asked to fo¥m the mlssion hub5/partnershlpslcollaborative way of working which they identified In their plans working Wlth their archdeacons to agree exactly how these will work. Those mission groupings need to work together to see how they can best delive¥ mission and minlstry across thelr churches and hold the necessary vacancles well. Facilitated conversations continue in parishes and deaneries to assist with collaborative working but also the ongoing conversations about the future direction of the diocese. The senior leadership tearn and members of the diocesan team wlll continue to work with de3nerles, PCCS and emerging groupings to SUPPOTt these conversations and planning. Some areas where an Investigation of more formal collaboration has begun should eontlnue. The presumptive pause on retruitment remains in place so that conversations at local level can contlnue, and Strategic appointment5 can be made. Appointments which simply malntaln the status quo were acknowledged to be unlikely. It was also agreed that appointments would only progress if certain 're¢rultment principles, were met. The Introduction of these'recrultment principle5, was a key declsion which recognised the need to hold clergy vacancles across the diocese to enable strategic decisions to be made and to help us move forward to become thriving dio¢ese. It was acknowledged that this however needs to be managed so that our purpose to 8row in depth, impact and number is not undermined. Each new vacancy which arises will enable a discussion to take place about a new recruitment. The recruitment principles agreed were as follows.. The post fits with the current 5trate8ic direction of the diocese to grow In depth. impact and number. This means that: The parishlbeneflce concerned is Working collaboratively which at this stage means as a minimum, looking at what missional activity can be undertaken together tts meet the needs of a wider community and exploring sharlnÉ admSnlstratlve functions and utllislnE skllls In a wider area. There is a Mission Action Plan with clear aim5 and outcomes1inked to community demo8raphics and need5, Plans are emerging for growth in lay leadership Key offices are filled ie Churchwardens, Treasurer and PCC Secretary and not by the same personlpeople slmpSy holding multiple roles. The post is one which the deanery agrees is a priority. The post 15 clearly Identified and is not Ilkely to change in the near future. While difficuli and not a decision taken lightly, thls has enabled us to go into 2022 wlth slgnificant opportunities to addres5 the missional and financlal challenges we face.

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 Future Plans Having worked during 2021 to set out our financlal and mis5ional context, and spend time In conversations locally, it is critlcal that during 2022 steps are taken to build on the work of the last two years and develop a refreshed vision under Live | Praylserve. leading to articulated priorities flowing from that vision. The aim being to engage with our communities and stakeholders across the dioceses such that bv November 2022. the budget for 2023 15 set within a financial plan for the period up to the Ènd of 2025 moving us towards a flnancial break even position. However, most critically thls process will ensure that every aspect of the diocesan budget is focussed on growth and on furthering the strateg1¢ priorities of the PDBF and wider diocese. In doing so we will See growth In depth, impact and number over this three-year period. To achieve this, there will be a focus on Children and Young People seeking to reach this mi55ing generation within our church communlties and enable them to hear the Good News of the Gospel in ways which are accessible and relevant to them. The four key elements articulated in 2021 will contlnue to be strateglc priorities and wi15, along wlth our important values, support how we fulfil our refreshed vision. We speak In term5 of parSsh as we recognise our parishes as being key to serving schools and communitSes across our diocese. In focusslng on parishes however, it will be in terms of a 'mixed ecologv where not just diversity of church tradition Is supported but where there is an expectation of church plantlng, pioneerlng and chaplaincies. Anna Chaplaincy will also be an Important part of our vision in 2022 and movin8 forwards as thi5 seeks to value, nurture and develop the dis¢ipleship and falthfulness of our older Éenerations. In working towards a genuine mixed ecology where all generations aTe reached with the Good News of the Gospels, there is an expectatlon that lay ministries and self-supporting mSnistrles will need to increase also. All these aspect5 will be developed with youth, children and young adults as our focu5. The roadmap for 2022 into 2023 can therefore be summarised as follows:_ MarchlApril 2022- a reshaped Bishop's Senior Leadership will be formed so that it is representative of a true mixed ecology. May & June 2022- deaneries to look at their plans prepared In 2021 and advlse of what changes they would make in the light of a focus on Youth and Children and Anna Chaplaincies. This response is to include the roles they would want to see across the deaneries with a presurnption that not all will be paid PQSts. july 2022- updated deanery plans included as part of budget assurnptions for 2023-2025 consSdered at Bishop's Council alongside staffing consideratlons to support emerging priorities and the future shape of ministry. September/October 2022- deanery events to outline the overall vision and how the strategic priorltle5 will shape local mission and deployment as well as detailin8 the budget for 2023 and financial plans for 2024 and 2025. November 2022-Synod consider5 budget and flnancial plans in the context of the vlslon and priorities. In relation to supporting our church schools each diocese has a Dloce5an Board of Education. Ours currently is a joint Board with Winchester Diocese and is an unincorporated body in the form of a committee. A new Olo¢e5an Board of Education Measure came into effect at the Start of 2022 which will require change5 to how the current Diocesan Board of Education IDBEI, is constituted. There 15 a cornmitment to Coritinued jolnt working with Winchester Diocese in thls regard but the response of the two DBFS will be determined in June 2022, but after the respective AGMS. It is expected that the DBE will become an Incorporated Charitable Incorporated or8anisation. The changes will bè worked through durlng the remaSnder of 2022 and reflected In the Annual Report for 2022.

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 The anticipated impact of this significant change is that the new CIO will be linked to the DBF through shared members but it will be independent in its governance, finance management and pollcles. Alongside Winchester DBF, the PDBF will becorne a grant giving body Into the Board of Educalion and support with offlce space and other service5 under Service Level Agreements. Nevertheless, for 2021, the flnances for the Education Team remain contained within the DBF. Financial Review Financial Performance The financial results for the year show an improvernent compared to 2021 a5 PDBF has started to see some of the benefits of the Covid restrlctlons relaxing on the economy, however results before the impact of revaluation of investment funds and properties have declined compared to 2020. Total income in 2021 for the diocese reduced by £806,305 to £8,634,146 12020: E9,440,4511. Parlsh share contributions fell by £286,063 to £4,405,11512020.' £4,691,178) which represented a fall in the recovery rate to 87.5% 12020.. 89.8%) against the amount requested. This reflects the ongoing challenges of Covid-19 on parish finances where some who may prevlously have relled on reserves to asslst with payment of parish share were no longer able to do so. Parochial fees have seen an Increase of £136,126 compared to the prior year from £224,359 to £360,485. Whilst thi5 is a small propoition of the income for PDBF, this represents a welcome return to weddlngs and funerals taklng place in our churches. PDBF recelved a further grant of £490,00012020.' E600,0001 from Archbishops, Councll Sustainability fund whlch has been designated to support the work of the dlocese in the corningyear. The sale of four properties completed during the year at a surplus of £432,833. Resources expended across all funds decreased by £596,226 to £7,613.00912020.. £8,209,235) as result of prompt decision making. extensive cost control management and the impact of Covid-19. In partlcular, there was a reduction in clergy headcount from 90 full time equivalent5 in 2020 to 85 in 2021. There has also been a significant reduction in Archblshops, Council fees due to an offset adjustment of £127,918 against previous years. PDBF budgets aim to break even on its general fund before any capital gains/losses. As a result of the continued management of costs, PDBF has mitlgated the impacl of the continued reduction in parish share collection and the ongoing c05t pressures impactinE from inflation and in particular the increasing energy costs which we expect to See impacting to a greater extent into 2022. The opeTating result on the general fund was a surplus of £154,78812020'. deficit of £37.3171. Balance sheet position The Trustees ¢onslder that the balance sheet, together with detai15 in note 20. shows broadly that the restricted and erhdowment funds are held In an approprlate mix of investment and current assets given the purposes for which the funds are held. While the net asset5 at the balance sheet date totalled £87,830,77012020: £80,586,1101 it must be remembered that included in this total are pioperties, mostly in use for the ministry, whose value amounted to £59.304,423 12020.. £57,821,421). Much of the remalnder of the assets shown in the balance sheet are held in restrlcted funds and Cannot necessarily be used for the general purposes of ihe PD8F. Reserves policy The free reserves, being the unrestricted general fund net of tangible assets and long te¥m financing totalled £3.Im 12020.. E2.9ml which represented 7.6 month512020'. 6.7 months) of parlsh share requested. The Trustees aim to maintain between 3 and 6 month5. Havlng considered financial ¥isk, liquidity requirements and the timing of cash flows throughout theyear, theTrustees' policy is to hold not more than 6 week5, normal expenditure in cash or on deposit, this being around £910,000. The year-end total for 2021 exceeded thls at £3.Im. It has been considered appropriate to hold this increased level of

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 cash and free reserves for thè short to medlum term whllst parish funds begin to recover, and alternative Income sources can be 50ught. As interest rates begin to rise. consideratlon will be given to early repayment of the CBIL loan if this is considered appropriate and In the best intèrests of the PDBF. Designated funds The Trustee5 may designate additional unrestrlcted reserves to be retalned for an agreed purpose where this is considered to be prudent. Such designated reserves are reviewed on an annual basis and returned to the general fund In the event that the purpose of their designation is no longer consldered to be adequatelyjustlfied for their retention. The last review undertaken involved the re-designation of a substantial amount of designated funds such that the DBF is better placed to meet it5 finantial obligations and address the current flnancial challenge5. A descriptlon of each reserve together with the intènded use of the reserve Ss set out in note 21. The total value of designated funds at the end of 2021 increased by £1.2m to £5.4rn12020.' £4.2ml. Restricted ar)d endowment funds As set out in notè 20 PDBF also holds and administers many restricted and endowment funds. As at 31 December 2021 restricted funds totalled £6.4m12020.' £5.5ml and endowment funds totalled £59.Om12020.' £54.7ml. Nèither are available for the general purposes of the PDBF. Grant making policy The Mernorandurn of Associatlon of the PDBF explicitly permit5 the PDBF to make grants in pursuan￿ of its objects, and the nature of grants made in 2021 Is Indicated In note 11. Investment policy and report In managing it5 investments, the PDBF tontinues to receive advSce from its Investment Advisory Group IIAGI, and the fund managers. CCLA Investment Management. The level of cash being held is kept under constant scrutiny as, despite the continuing low level of inflation, interest rates have also remained very low such that the investment income relied upon for the underpinning of the mission work of the Diocese can only be achieved through an aetive investment strategy that delivers real growth in total return. The IAG continue to encourage a slmilar approach in relation to parish funds and members of the group continue to engage with parishes to provide support and guidance n this important area. The investment policy of the IAG as set out in the terms of reference for thls group are.. al Not more than 6 weeks normal expendlture is to be held in cash for routine purposes. This money (currently about £lml is to be held in the CBF Dep051t fund lor such other bank deposlt account as may be deemed suitable by the Board from time to timel. It bein8 understood that the bank current account be malntained in credit. bl The Diocesan Secretary following discussion with the IAG is authorlsed to 5Wltch Investments managed by CCLA from time to tlme in order to achieve the Board's required total return. cl Any fund managed by CCLA may be used for the Board s investments, but no other types tsf investment mav be used wlthout the Board's prior approval. dl The Investment manager5 are to be instructed to achieve a yield of not less than 4% Itaking Into account the cash at a above), and a total return in line wlth ihe approprlate Benchmarks a8reed by the Board annually. el This pollcy will be reviewed at least annually by the Board. The income from financS31 investments in 2021 was £792,97012020.' £725,357) and reflected a 3.2% yield. For the year ended 31 December 2021 the investment portfollo achieved an overall total return of 18.0% Ibeing the increase/decrease in market value plus the actual yieldfincome receivedl12020.' 7.9%). The benchmark aEain5t which each of the individual CCLA funds Is compared is disclosed in their quarte¥ly report. The property and investment fund5 Outperformed the Selected benchmark in for the year to varying degree5. The global equity fund has performed below the benchmark throughout the year. The PDBF'S investment strategy continues to be. to rnaintain a high level of income, and to concentrate on good quality companies and properties with long term growth potential. The property fund's performance saw a large improvement in pefformance to 19.74%12020'. io

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 0.48%). The global equity fund dropped sllghtly and produced a total return of 19.2%12020.' +22.69%),. whilst the investment fund resulted In an Improved return of +17.46%12020'. +10.2%). The % allocation of assets to funds was as follows.. 2021 2020 Inve5tm&nt fund 69% 68% Property Fund 21% 23% Global Equity Fund io% loo% loo% Principal Risks & Uncertainties As this report has evidenced, the PDBF is fit for pksrpose.. financially stable, proactive, and responsive to the needs of the Diocese and parishes and the assets and Investments held by the PDBF are well managed and secure. The number and age profile of worshipping comrnunitie5 and of ministers is a concern, wlth a high proportion in the upper age brackets. This has potentially far-reaching implications for the aims and objectivès of both the PDBF and each PCC In the medium to long term. The future plans of the PDBF as outlined above are designed specifically to address and mitigate these key risks and uncertainties and in this way to continue to fulfil its charitable aims and objectives and thus serve God faithfully In this Diocese, by respondlng to His call to action and to fulfil the strategic outcomes of the PDBF to grow in depth, impact and number. Key risks and mit1gating actions are as follows.. Key rlsks How managed Tran5formatlon and Journey of change: The di(>cese Is continuing on a programme of strategic change to continue to fulfil its purpose to grow in depth, impact and nurnber. This journey is reliant upon stability amongst those in senior leadership roles, capacity amon8St the wider Staff team and financlal or other resources requlred to make the desired chan8es in a sustaSnable way so as not to negatively impact on future mission and growth. Management plèn for any unforeseen vaeancies and ensure that knowledge and resources are shared amongst teams to cover any absences, ensure plans can continue to be implemented and aid succession plannlng. PDBF continues to seek opportunities for transformation development funding to ensure that the relevant reSoUr￿S are available to meet the desired plans. Ongoln8 Impact of Covld-19.. Whilst Churches have largely been reopèned during 2021 and remain 50 into 2022, we face an ongoing reduction In numbers attending, reduction in parish share receipts as parishes feel less able to contribute, and the ongoing impa¢t of the global pandemic on the economy,. including that on the investment portfolio where much of the diocese's financial resources are impacted. Bishop'5 Council are meeting frequently to ensure that the financial p051tion Is revièwed and monitored, and the Finance Chair is working closely with senior managernent between meetings. AddltSonal sources of funding continue to be sought and the diocese has benefitted from sustainabilityfunding in both 2020 and 2021, and the award of the Coronavirus Business Interruption Loan for which repayments Staff contlnue to work in partfrom home and this hybrid li

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 Key rlsks How mana8ed working will continue. There is a risk of teams feeling disconnected due to this hybrid workin8, and those being supported by a reduced dlo¢e5an staff feeling di5en8aged as a result of some routine work having ceased or become more challenging as a result of the pandemlc. commenced at the end of 2021. Senior management are fc*cussed on the use of communication and resources to maintain connection5 to both the wider staff teams and the parishes and clergy to ensure they remain informed and engaged and receive relevant information on a tSmèly basis. Parlsh share: Parish share accounts for around 68Yb of the diocese's In¢ome therefore any reduction in this can have significant irnpact on the future flnances and the ability to deliver mlsslon longer term and support the growth of parlshes. Recelpts are closely monitored on a monthly basis and deanery treasurers are supported by diocesan staff to understand the budgets and why regular payment of the parSsh share Is required. Archdeacons are a150 clear about the need to make parish share a priority and hold this line on local conversations. Parlshes are asslsted to promote the Parlsh Giving Scheme to aid Income generation and enable them to allocate resources to the payment of the parish share. People.. The clergy and lay staff employed by the diocese are criti¢al to the abillty to meet the diocesan mission. If the staff teams and clergy are not adequatelv supported then they will be unable to meet the needs of the parishes and the wider needs of the communities we serve. There is a risk of parishes feelln8 unsupported when clergy vacancie5 occur. Recruitment procedures are in place to ensure that all those employed have the sufficlent skills and training to undertake theiT roles. Parishes and archdèacons will be kept up to date with any changes in the recruitment of clergy. Appraisal systems are in place to ensure that Staff are aware of thelr objectives and their roles within the diocese. The diocese has an agreement in place with health assured to support the health and wellbelng of clergv and lay staff. Governance: The work of the diocese 15 dependent on good Bovernance and decision making. Commlttee membershlp is reviewed annually to ensure that decision making groups are appropriately skilled. Training is also provided at least at the start of each triennlum but more frequently as the need arises. Following a review of governance structures In 2020, a Finance Executive Commlttee was introduced to 12

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the yèar ended 31 December 2021 Key rlsks How managed increase the financial 5crutlny throughout the year and give Bishop's Council greater confidence in the recommendations It receives. During 2022 we will refine how information flows more effectively through the governance structure5 and out to deaneries and parishes. To ensure compliance with law and regulation, training is provided for key members of staff as well as maintaining appropriate profe55ional memberships. Safe8uardlng: The care of children and vulnerable adults remains a key priority to the diocese a5 It 15 a Gospel imperative and at the heart of who we are and what we do. The diocese invests in suitable tralned officer5 and training and support of parishes and schools. The dioceses safeguarding procedures have previously been inspected by the national review panel which validated their high quality and work was undertaken to implement those recornmendations. Systems are in place to ensure that all personnel are trained at the appropriate level for their roles and that this trainin8 15 renewed regularly. During 2022 we wi51 be working through an action plan which dea15 Wlth recommendations flowing out of the Past Case Review 2 process. Structure & Governance Summary Information about the structure of the Church of England The Church of England is the established church, and HM The Queen is the Supreme Governor. 1115 organised into two provinces (Canterbury and Yorkl and 42 Dioceses. Each Diocese is a See under the care of a Bishop who is charged with the cure of sou15 of all the people within that Beo8raphical area. This charge is shared wlth priests withln the benefi¢es and parishes which together rnake up the Diocese. The Natlonal Church has a General Synod comprising ex-officio and elected representatives from each Diocese and It a8ree5 and lays before Parliament, Measures for the governance of the church's affairs which, if enacted bv Parliament, have the force of statute law. In addition to the General Synod. the Archbishops, Council has coordlnating role for work authori5ed by the Synod,. the Church Commissioners manage the historic assets of the Church of England.. and the Church of England Pension Board adminlsters the pension schemes for clergy and lay workers. Within èach Diocese, overall leadership lies wlth the Diocesan Bishop, who exercises that leadership assisted by the governance functlons of the Dlocesan Synod. The Diocese of Portsmouth has seven deanerles, each with it5 own deanery synod, and wlthin each parish there is a parochial church councll whlch shares with the parish priest responsibility for the mi55ion of the church In that parish. 13

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 Organisational structure The Portsmouth Diocesan Board of Finance Is constituted under the provisions of the Diocesan Boards of Flnance Measure 1925. It is a registered charitable cornpany and has responslbility for conducting the financial affair5 of the Diocese. The Board of Directors is the maln governing body of the Charity. Its members are the Directors and Trustee5. The Diocesan Synod, however, agrees the overall annual budget, including the overall level of parish contributlons to be sought from parishes under the Parish Share system. The Directors also form the Bishop's Council IStandinÈ Committee of the Diocesan Synod). the Diocesan Mission and Pastoral Committee. and the Oioce5an Parsonages Board. These arrangements achieve the uniting of the Diocese's policy-setting and finance-controlling responslbilities. Membership comprises ex-oflicio members, clergy and lay member5 elected by their respective 0Socesan Synod houses, and one member nominated by the Bishop. Bishop's Councll Is a150 SUPPOrted by employed staff a5 appropriate (See sectSon 12 for further Informatlonl. Trustee recrtjitment. selection, and induction Trustees are members of the Bishop's Council & Standln8 Comrnlttee and are selected as set out above. Trustees are glven induction at the outset of the triennium and at other time5 as appropriate. A skills audit al the start of the triennium Informs future training needs also. Those likely to stand for election are also informed before seeking membership and, at all other relevant times, of the role and function of the Committee. Oecision making structure Corporate priorities and the overall financial strategy for the Diocese, in its primary object to promote, assist and advance the work of the Church of England wlthin the Diocese of Portsrnouth are set by the Diocesan Synod, and the POBF. The responsibility for ensuring that these priorltie5 and strategies are delivered is delegated to the Diocesan Secretary. The company meets once a year in general meeting to receive and approve the annual report and financial statements and to appoint the auditors. The Olocesan Synod each year receives and agrees the annual budget, prepared, and approved by the PDBF. The Trustees, meeting within the context of the Bishop's Council and Standing Committee, normally hold eight meetlngs during the year to.. plan the business of the synod, to prepare the agenda for its sesslons, and to circulate to members, information about matters for discussion. Initiate proposals for actlon by the synod and to advise it on matters of polScy which are placed before it. advise the president on any matters which he may refer to the councll. transact the buslness of the synod when it is not in session. undertake the responsibilities of the Dioeesan Board of Finance undertake the responsibilities of the DI0￿San Mission and Pastoral Commlttee IDMPCI to hold all boards and committees accountable for their work and to provide an annual report to synod of that work. to work wlth deanery standing committees on the comrnunlcatlon of diocesan Issues and the understanding of deanery issues. carry out such other functions as the Synod delegates to it. The Trustees are a5515ted in thelr work by several Sub-committees and there is a flow of work through those groups thus making effective recommendations to the trustees In Bishop's Coun¢il- Dlocesan Deanery Flnance Committee reviews and rèports on the finances of Individual parishes and their ability to meet their parish share commltments. In addition to this important monitoring and evaluation of parish share contributions, thi5 group also agree the approach to individual parlsh Share arrear5 Wlth the Oiocesan Stewardship Adviser, communicate financial matters to Oeanery Finance Commlttees and parlshes and provide parish feedback into the Diocesan Finance Executive Committee. 14

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 Diocesan FInan￿ Executlve Commlttèè scrutinises matters of financial management and governance in¢ludlng budgets, management accounts and cashflow5, annual report and accounts, risk managernent as well as considering each of those aspects in the light of recommendations frorn the Investment Advisorv Group. Taking into account all these different interlinking aspects, the Diocesan Finance Executive Committee bring recommendations to Bishop's Countil. Investment Advlsory Group provide5 advice (the sub-committee has no executive authorltyl on PDBF'S investments and funds available for investment and the PD8F's overall investment strategv. Property Sub Commlttee reports to the Trustees,. it oversees repairs to parsonages. glebe property. properties held for the charity's own use, and the di5P05al and purchase of propertv. Dlocesan Synod Agenda Group supports Blshop's Councll by planning the annual bu5inÈss of Synod for approval. Lay Staff Remuneratlon and Condltlons of Servlce Commlttee meets annually to revlew the pay, conditions and policies affecting the lay members of staff employed by the DBF. Delegation of day-to-day delivery The Trustees and the sub-committees whlch asslst them in the fulfilment ol thelr responsibilities, rely upon the Diocesan Secretary and her colleagues for the delivery of the day-to-day activities of the company. The Diocesan Secretary is given specific and general delegated authority to dellver the business of the PDBF in accordance with the policies framed by the Trustees. Related Parties The PD8F is required to comply wlth Measures pa55ed by the General Synod of the Church of England and is required to make annual payments to the Archbishops. Council toward5 the costs and the national arrangements for trainlng clergy. The PDBF currently receives annual grants from the Church Commissioners in ihe form of Lowest Income Community Fundin8 and an annual Brant from The All Churches Trust. In both 2021 and 2020 the PD8F also received Sustainability Grant payrnent from the Church Commissioners lo support with the financial challenge caused by the ongoing impact of the Coronavirus Pandemic and its associated restrictions. Fundraising The Diocese provides guidance to the parishes with regard5 to fundralslng but does not engage in fundraislng activities itself. Due regard is given to the Fundralslng Code of Practice set by Fundraising Regulator when providing guidance to the parishes. Remuneration of key management personnel The Board operates a set salary scale and èmployees are placed on this benchmarked where possible against comparable roles in other dioceses and the external employment market. The salary scale is reviewed each year by the Board with reference to cost-of-llvlng movements in clergy and national church staff pay. This process 15 supported by the Lay Staff C(Indltlons of Service Committee. Emoluments of higher-paid employees are determined in consultation between the Bishop of Portsmouth las chair of the Board), the Chair of the Finance Commlttee and the Diocesan Secretary. Funds held as Custodian Trustee The PDBF is custodian trustee of assets held on permanent trust by virtue of the Parochial Church Councils Ipowersl Measure 1956 las amended) and the Incumbents and churchwardens (Trustsl Measure 1964 where the managing trustees are parochial church councils and others. These asset5 are not aggregated In the flnancial statements as the PDBF does not control them. They are segregated from the PDBF'S own assets by rneans of a separate bank account and accounting system. Further details of financial trust assets, whose market value amounted to £10.8m at 31 December 202112020.. £9.5ml, are available from the PDBF on request, and are summarlsed in note 26. Where properties are held as custodian trustee, the deeds are Identified as such and held in safe custody by the PDBF'S solicitor, Messrs Brutton & Co. 15

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 Funds held on behalf of schools The PDBF, on behalf of thejoint Portsmouth and Wlnchester Diocesan Board of Education Iwhlch 15 not incorporated) receives contrlbutions from governors of church schools within the Dloceses in connection with major repair and capital piojects to church schools and government grants in connection with the same. The staff of the Board of Education Iwho are employees of the PDBFI administer these monies as managing agent and make appropriate payments to contractors for work carried out. The monies do not belong to the PDBF or the Board of Education and as such the receipts and payments are not treated as income and expenditure in the Statemént of Financial Activities. Any monies held at the balance sheet date are treated as credStors on the balance sheet. The amount included in creditors as at 31 December 2021 is £1,778,23912020: £1,794,949). The income and expenditure relating to School projects not reflected in the Statement of Financial Actlvlties amounted to £1,881,075 and £1,798,495 respectively in 202112020.. £1,603,667 and £1,281,2591. Trustees, Responsibilities The Trustees are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company lèw require5 the Trustees las Directors) to piepare financlal statement5 for each flnan¢ial year. Under that law the Trustees have elected to prepare the financial statements in accordance wlth United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable lawl. Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of the affairs of the PDBF and of the surplus or deficit of the PD8F for that period. In prèparin8 these financSal statements the Trustees are required to.. select suitable accountSng policies and apply them consistentlv. observe methods and prlnciples in the Charities SORP. make judgernents 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 financial statements. prepare the financial statements on the goin8 toncern basis unless it is inappropriate to assume that the company wlll continue in operatlon. The Trustees are also responsible for keeping proper accounting records that dlsclose with reasonable accuracy at anv tSme the financial position of the DBF and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguardlrsB the assets of the PDBF and hence for taking reasonable steps for the prevention and detection c*f fraud and other irregularities. The Trustees are responsible for the maintenènce and integrity of the corporate and flnancial informatlon Included in the PDBF'S webslte. Legislation In England and Wales governin8 the preparation and dissemSnation of financial statement5 and other informatlon included in Annual Reports may differ from legislation in otherjuri5dictions. In all matters the Trustees complies with the Charity Governance Code which covers seven area5- Organisatlonal purpose. Leadership. Integrity. Decision makin& risk and control. Board effectivene55. Dlversitv. Trustees confirm that they have referred and had due regard to the guidance contalned in the Charity Commlssion's Beneral guidance on public beneflt when reviewing the DBF'S aim5 and objectives and in planning future activities. 16

PORTSMOUTH DIOCESAN BOARO OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 Statement of Disclosure to the Auditors So far as the Trustees are aware= al there Is no relevant audit information of which the charitable companws auditors are unaware, and bl we have takèn all the steps that we ought to have taken as Trustee5 in order to make ourselves aware of any relevant audit information and to establish that the charitable company's audltors are aware of than Information. Appointment of Auditors There will be a tender process for the appointment of auditors for the PDBF for the year end 31 December 2022. Administrative Details Trustees No Trustee had any beneficial Interest In the Company durin8 2021. Electlons onto our Board took place at the end of 2021 for the next triennium which start5 on I"January 2022 meaningthe trustees were different during 2021 to those now serving from I" january 2022 up to the date of thls report. General Synod Members can be in attendance at all meetin85 of Bishop's Council,. Portsmouth has 6 members of General Synod at any one time13 lay and 3 ordalnedl. There were however General Synod elections in 2021 meaning those In attendance during 2021 are different from those In attendance from the beginning of 2022. The following are the Trustees who served at any time during 2021 and those that are now 5ervin8 from the start of 2022 covering the period up to the date of this report along with details of those in attendance:_ Trustees who served 1$¢ Januaryto 31, December 2021: al Ex Officlo Members Chair.. The Rt Revd Christopher Foster (Blshop of Portsmouth; retlred 24th April 20211 The Rt Rev Rob Wickham Icommlssary Bishop of Portsmouth from 1st May 20211 Dean of Port5mouth.' The Very Revd Dr Anthony Cane Archdea¢ons'. The Ven Peter Leonard Ilsle of Wightl The Ven Gavin Collins Imeon, resigned 21st january 20211 The Revd Canon Will Hughe5 (Acting Archdeacon of Meon from 22, January 20211 The Ven Jenny Rowley Iportsdownl Chalrs of the Houses.. The Revd Canon Robert White Ichair of the House of Clergy) Canon Debbie Sutton (Chair of the House of Laity) Diocesan Secretary= Mrs Victoria james bl Blshop'5 Nominee Mr Phllip Poulter Ichair of the Diocesan Deanery Flnance Committee and the Diocesan Finance Executive Commltteel. 17

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 cl Elected by House of Cler8y Revd Paul Arm5tead IresiBnÈd 20, October 20211 Revd Dr Paul Chamberlain Revd Rlchard England Revd James Hunt Revd lan Snares Revd Canon Will HuBhes dl Elected by House of Lalty Canon Oavid Bennison Mr Norman Chapman Mrs Mary Crlttenden iss Elizabeth Davidson Canon Lucy Dochertv Mr Mark Emerlon Canon Stuart Forster Mrs Debs Henning-vears (from 14 April 20211 Mrs Irene James Canon Adrian Jordan Canon Dr Hugh Mason Mr Eugene Organ Ireslgned 21 January 211 Canon Hilary SpurEeon el Members In Attendance Throughout 2021. 5 General Synod members are also voting member5 of Council in either èx officio or elected capacltles (The Ven Peter Leonard, The Ven Gavin Collins, Rev Canon R White, Canon Lucy Docherty, Mr M Emertonl. Therefore, only I member of General Synod (Mrs Emily Baggl Is in attendance. Trustees servlng slnce I" January 2022 post the electlons and up to the date of thls report: al Ex Offlclo Members Chair- The Rt Rev Rob Wlckham (Commissary Bishop of Portsmouth until 12 March 20221 The Rt Rev Dr Jonathan Frost (Bishop of Portsmouth from 18 January 2022; installed 12, March 20221 Dean of Portsmouth.. The Very Revd Or Anthony Canè Archdeacons.. The Ven Peter Leonard Ilsle of Wlght,. resigned 27, February 20221 The Revd Allie Kerr (Acting Archdeacon of Isle of Wight from 27, February 20221 The Ven Jenny Rowley Iportsdownl The Revd Canon Will Hu8hes (Acting Archdeacon of Meon from 22, january 20211 Chairs of the Houses.. The Revd Canon Robert White Ichair of the House of Clergy) Canon Debbie Sutton (Chair of the House of Laity) Diocesan Secretary.. Mis Victoria James bl Blshop's Nomlnee Mr Philip Poulter (Chair of the Diocesan Deanery Finance Committee and the Diocesan Finance Exècutive Committee). 18

PORTSMOUTH DIOCESAN BOARD OF FINANCE ANNUAL REPORT For the year ended 31 December 2021 cl Elected by House of Clergy Revd Dr Susie Colllngridge Revd Bruce Deans Revd Canon Tom Kennar Revd Andrew Hargreaves Revd Jame5 Hunt Revd Sam Martell Revd Mark Wi1Siams dl Elerted by House of Laity Mr James Bremridge Mr Neil Chrimes Canon Lucy Dochertv Mr Mark Emerton Canon Stuart Forster Dr Coleen lack50n Mr5 Irene James Canon Adrian Jordan Mrs Vanda Leary Mr Simon Lemieux Mr Steven Smart el Members In Attendance From I" January to the date of this report, 3 General Synod members are also votlng members of Council In either ex officio or elected capacities IRev Canon R White, Canon Lucy Docherty, Revd Andrew Hargreavesl. Therefore, 3 members of General Synod (Mrs Rebecca Hunt, Mr lan Johnston and Revd Dr Paul Chamberlainl are In attendance. Senior staff and advisers Diotesan Secretary Finance Dlrector Head of StTategic Implementation and Resources & Deputy Diocesan Secretary Head of Lay and Ordained Ministry Head of Mission and Educatlon and Director of Educatlon Head of Social Transformation Victoria james Lisa Stieeter Jenny Hollingsworth Anthony Rustell Jeff Williams Nick Ralph Registered Office Diocesan Offlce. 1st Floor, Peninsular House, Wharf Road, Portsmouth, P02 8HB Key Advisers and Agents Bankers Audltors Stslititors Investment Adv15er5 Glebe Agents Insurers HR Advlsers Barclays PLC, PO Box 165, Crawley, RHIO IYX Haysmacintyre LLP, 10 Queen Street Place, London EC4R IAG Messrs Brutton & Co, West End House, 288 West street. Fareham, P016 OAJ CCLA. 80 Senator House, 85 Queen Victoria Street, London. EC4V 4ET Carter Jonas LLP, 9-10 Jewry Street, Winchester S023 8RZ EIG, Beaufort House, Brunswick Road, Gloucester, GLI IIZ Kane HR, Westpoint Housè, 32-34 Albert Street, Fleet, Hampshire, GU513RW ON BEHALF OF THE TRUSTEES The R5ght Revd Jonathan Frost ctorla James Chairman Diocesan Secretarv 2S' Mèy 2022 25, Mzy 2022 19

INDEPENDENT AUDITORS REPORTTOTHE MEMBERSOF PORTSMOUTH DIOCESAN BOARD OF FINANCE For the year ended 31 December 2021 Opinion We have audited the flnancial statements of Portsmouth Diocesan Board of Finance for thè year ended 31 December 2021 which comprise the Statement of Financial Activities, the Balance Sheet. the Statement of cash flows and notes to the financlal statements, including a summary of slgnlficant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standard5, including Financial Reporting Standard 102 The FinonciGIReporting Standard applicable in the UKund Republic of Ireland Iunited Kingdom Generally Accepted Accounting Practice). In our opinion, the financial 5tatement5'. give a true and fair view of the state of the charitable cornpany's affairs a5 at 31 December 2021 and of the charitable company's net movement in funds, Including the income and expenditure, for the year then ended,. have been properly prepared in accordance with Unlted Kingdom Generally Accepted Accounting Piactice,. and have been prepared in accordance with the requlrernents of the Companles Act 2006. Basrs for opinlon We conducted our audit in accordance with International Standards on Auditing IUKI11SA5 IUKII and applicable law. Our respon5ibilitles under those standards are further described in the Auditoi's responslbilitie5 for the audit of the financial statements section of our report. We are Independent of the charity in accordance wlth the ethical requirements that are relevant to our audit of the financial statements in the UK, Including the FRCS Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirèrnent5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our oplnion. Concluslons relatin8 to going concern In auditSng the financlal statements, we have concluded that the trustees, use of the golng concern basls of atcounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relatSng to events or condition5 that, individually or collectively, may cast significant doubt on the charitable company's ability to continue as a goin8 concern for a period of at least twelvè months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the ielevant sections of this report. Other Informatlon The trustees are responsible for the other information. The other inforrnation comprises the information included in the Annual Report. Our opinion on the flnancS3l statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not expre55 any form of assurance onclusion thereon. In connection with our audit of the financial statements, our responslbility is to read the other Information and, in doing so, consider whether the other information is materially inconsistent with the fln3n¢ial statements or our knowledge obtained in the audit or otherwise appearsto be materially misstated. If we identify such mate¥ial inconsistencies or apparent material misstatements, we are required to determine whether there Is a material misstatement in the financial statements or a material misstatement of the other informatlon. If, based on the work we have performed, we eonclude that there is a rnaterial misstatement of this other information, WÈ are requlred to report that fact. We have nothing to report In thi5 regard. 20

INDEPENDENT AUDITORS REPORTTOTHE MEMEBERS OF PORTSMOUTH DIOCESAN BOARD OF FINANCE For the year ended 31 Decembèr 2021 Oplnlons on other matters pre5crlbed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audlt.. the information glven in theAnnual Report Iwhlch includes thestrateglc report and the directors, report prepared for the purposes ol company lawl for the financial year for which the financial statements are prepared is consistent with the financial statements; and the strategic report and the directors, report included wlthln the Annual Report have been prepared in accordance with appllcable legal requirements. Matters on which we are requlred to report by exceptlon In the light of the knowledge and understanding of the charitable cornpany and its environrnent obtained in the course of the audit, we have not identified material misstatements in the Annual Report Iwhich incorporates the director5, report). We have nothing to report in rèspect of the following matters in relation to whlch the Compariie5 Act 2006 requires us to report to you if, in our oplnlon: adequate ac¢ountlng records have not been kept by the charitable company,. or the charitable company financial statements are not in agreement with the accounting records and returns.. or certain disclosures of trustees, remuneration Specified by law are not made,. or we have not received all the information and explanation5 we require for our audit. Responslbllltles of trustees for the finandal statements As explained more fully in the trustees, responsibilities statement set out on page 16, the trustees (who are also the directors of the charitable company for the purposes of company lawl are responsible for the preparation of the financial 5tarements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the prepaTation of flnancial Statements that are free from material misstatement, whether due to fraud or error. In preparing the linanclal statements, Ihe trustees are responsible for assessing the charitable company's abilitv to continue as a going concern, disclosing, as appllcable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do 50. Audltor's responslbllltles for the audlt of the flnanclal statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free frorll material misstatement, whether due to fraud or error, and to jssue an auditor'5 report that includes our opinion. Reasonable assurance is a high level of assuranee, but is not a guarantee that an audit conducted In accordance with ISAS IUKI will always detect a material mlsstatement when it exists. Misstatements can arise from fraud or error and are considered materlal if, individually OT in the aggregate, thèy could reasonably be expected tl) influence the economic decisions of users taken on the basis of these financial statements. Irregularlties. including fraud, ère instances of non-compliance with laws and regulations. We design procedure5 in line with our responsibilitie5, Outlined above, lo detect material misstatements in respect of irregularltle5, including fraud. Based on our understanding of the charitable company and the environment in which it operates, we Identified that the principal risks of non-compllance with laws and regulation5 Telated to safeguarding vulnerable beneficiaries, health and safety, and employment linclvding taxation), and we considered the extent to which non-eompliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial 5taternents such a5 the Companies Act 2006, the Charities A¢i 2011 and Chur¢h of England Measijres. 21

INDEPENDENT AUDITORS REPORT TO THE MEMEBERS OF PORTSMOUTH DIOCESAN BOARD OF FINANCE For the year ended 31 Dècember 2021 We evaluated management's Incentives and opportunities for fraudulent manipulation of the financial statements lincludin8 the risk of override of controls) and determined that the principal ¥isk5 were related to fund accountlng, including transfers between funds, and revenue recognitlon. Audit procedures performed bv the engagement team included.. Inspectlng correspondence with re8ulators and tax authorities,. Discussions wlth management including consideration of known or suspected instances of non- ¢ornpliance with laws and regulation and fraud,. Evaluatlng management's controls designed to prevent and detect Irregularities- Identifying and testlng journals, in particular journal entries posted at the year*nd and those wlth unusual descriptions; Challenging assurnptions and judgements made by management in thelr crltical accountlng estimates,. Testin8 transfers between funds,. and Cut-off testing in respect of revenue. A further descriptlon of our responsibilities for the audit of the financial statements is located on the FinancSal Reporting Council's website ai= www.frc.o auditorsres onsibillties. Thls descriptlon forms part of our auditor's report. Use of our report This report is made solely to the charitable company's member5, a5 a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the tharitable company's members those matters we are required to state to thèrn 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 charitable company and the charitable Company's rnembers, as a body, for our audlt work, for this rèport, or for the opinions we have formed. Adam Ha15ey Isenior Statutory Audltorl For and on behalf of Haysmacintyre LLP, Statutory Auditor Date.. 8 June 2022 10 Queen Street Place London EC4R IAG 22

PORTSMOUTH DIOCESAN BOARD OF FINANCE STATEMENT OF FINANCIAL AcfiviTIES At 31 December 2021 Unrestilctedfunds Gene¢al DèslÉnated Restrftied funds Endowmenl Totall￿ndS funds X>21 2020 N¢)ts Incomeandendowmersts from Qonatlons 4.￿,11$ 47&430 111233 5W,751 430,926 510,( 141WJ4 &WJ.348 4,4)5.115 1,796,288 I￿783 582,782 5,375 792.970 432,￿3 4,69L178 2,329.3f 154.5 Arthbishops, C¢uncil 827,858 6,55) 1031 74,449 137,454 220.YXI 1,269.242 Othertradlniadivltl¢s Investment5 453.178 725,357 520,591 9,441451 57,3 69,IT3 126,485 578,071 ExpÈndlture on.. Ralslngfunds Charitsble adl¥ltles Total 44￿2 6,45&567 4501560 &993 7,561016 7.613.￿) 36,391 8,171844 8,209.235 106,613 106,61J i.rth.836 I,OW836 NetlnromÈllexpendlturel beloie Inve5tmet8alns 154.n8 4nN58 2e4406 12fj485 1,23L216 Nei8aln50n investmenis 15 271,220 40L197 70L114 L659,2 3,031731 91A931 Netlncome 421C¥J8 872,655 969.520 1785,685 4,Q51868 2,134147 Transfer$be￿eenfUndS 1%4,6351 294167 IIY3532) 164(#]O O1herrn(￿nl5ed8aI￿￿II0s$e$1 14 851,669 13123 3.2rr3,792 LfiJ3,743 assets Remelsurementof pension scheme provision 119.flXII 12J,(Y 830,669 947,042 1360,123 I,309,￿¥ 4190,792 7.244,660 1,061,743 3,199WO Netmovement In I￿ndS ¥168,8lZ 818,988 Totallunds8iiJan¥ary2021 gAIS 4184,756 S.$43,827 51701112 8QSB6,110 77,386,220 Total funds at31Decernbei2021 17.096.457 5,1%3.S78 362W15 59.017,920 87,830,770 80,586,110 The net 5urpluslldeficltl of income over expenditure, together with detai15 of income and expenditure required by the Companies Act. may be derived from net incorning resources before transfers, excludlng movements on endowment funds, In the Statement of Flnancial Activities abovÈ. All income and resources expenditure derive from continuing activities. The notes on pages 26 to 57 form part of the financlal statements 23

PORTSMOUTH DIOCESAN BOARD OF FINANCE Company No.. 226466 BALANce SHEEr At 31 De￿mbe* 2021 2021 2020 Note FIXEDASSEfs Tanglblè Fixed A55ets Investrnents 14 59,350,360 24,382.639 8173Z,999 57,821,421 21,285.6rJ7 79,107,028 CURRENT ASSETS Debtors Cash on Deposit Cash at bank and In hand 97I026 7,129.175 nL169 8,831,370 025,149 4749.986 S81,￿1 CREDITORS.. amounts fallln8due wlthlt) one year 17 1999,532 1763,059 NEf CURRENT ASSETS 5,834838 4818.842 Total asset$le55 currentllabllltles 99.564,837 81,925,870 CREDITORS amounts lallln8due alter more Ihan one year Pension scheme Ilabllitie5 Loans and longterm provisions 18 1734.067 l339,7£11 167.4LKI 1 566 667 299.7OJ NET ASSETS 87.830,770 80,586,110 FVNOS Unrestrlcted Income tund5: General funds Oesignated funds 17.C136.457 5.351578 ￿45￿035 6.162.815 59,017,920 16.149.415 4 184,7S6 20,334.171 5.543,827 54,708,112 Rest¥ltted lunds Endowrnenl lunds TOTALFVNDS 120 87.830.770 .586,110 Revaluation reserve5 of the following amounts are included within the above funds.. endowment funds £15.4m 12020.. £9.7ml, restricted fund5 £2.2m 12020.. £1.5ml. deslgnated funds £1.7m12020'. £1.3ml, general funds £2.9m12020.' £1.2ml. The Notes on pages 26 to 57 form part of these financial statements. The fTrnancial statements were approved by the Board of Trustee5 and authorised for issue on 25, May 2022 and signed on behalf of the Board by.. The Rlght Revd Jonathan Frost 24

PORTSMOUTH DIOCESAN BOARO OF FINANCE Company No: 226456 STATEMENT OF CASHFLOWS At 31 De¢tmber 2021 2021 Net¢J5hflow fvomoperatinE activitles Nelt%h used Inoperating octivitles 1429,1681 I34.L￿) Cash flows from InvestlngaCtlvl￿es Dividend5, interest and rent from investments Purchase of property and equipment Purchase of Investment5 Sale of property and equlpment Sale of investments NetCa5h prowded bylnvestlngactlvltlts 72&669 147,2491 S,025 17,5lll 695,591 185,1%5 2,121833 2,8C¥l,253 L538, Cash flows from Ilnancingartivitie$ Loans repald to PDBF Loans repald by PDBF Cash Inflowsfrom new borrowlTrg NetCa5hused Inflnanilng Iioj 1713931 I40,(￿0] I￿N),(KA) 1712931 1,959,940 Chan8e In cashand cash equiTrJalentsln the reporting perlod 2,303WZ 3,464,325 Cashanda$h equlwalentsat ljanuary 5,5S1752 2,092,427 Cash•nd ¢ashequlvalentsat31 December 5 556,752 Reconclliatton ol netln me to net(￿bloW fromo ratln rtlvltles 2021 2020 Netln¢¢me forthe yearended 31 December Adjustments for.. Depreclatlon char8e5 Galnson In¥e5tments Dividend5, intere5tand rent from investments Gain OD sale of functlonal assets Oecrease in op&iatingdebtor5 4,053 2,138,147 38,102 13,0317311 17919701 14318331 52,021 1314.827 429,368 36,79) 19C6,9311 1725,357) 1520,5911 25,899 li,￿194 11￿3.983) Netcash provlded byoperdtlngactlvltles Aoal 51501 cash and ¢ashe Cash at bank and in hand Cash on deposlt r81,169 7,129.175 7,860.344 ,766 4,749,986 5,556,7S2 25

PORTSMOUTH DIOCESAN 80ARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 310ecember 2021 ACCOUNTING POLICIE5 Portsmouth DBF is a company limited by guarantee, incorporated in England and Wales, and is a Public Benefit Entity as defined by FRS102. The financial statemènt5 have been prepared under the historScal cost convention. with the exception of freehold properties, which are included at their lair value as determined under the applicable valuation method a5 detailed In el, and fixed asset investments, which are included at their market value at the balance sheet date. The financial statements have been prepared in accordance wlth the Statement of Recommènded Practice for Charitles (Second Edition, effective l January 20191, the Companles Act 2006 and applicable accounting standards IFRS1021. The Trustees consider that there are no material uncertainties that could east doubt on the charity's abllity to continue as a going concern. After reviewing the charit￿5 forecasts and projection5, the Trustees have a reasonable expectation that the charity has adequate resourcès to continue as a going concern for the foreseeable future. The Trustees therefore continue to adopt the going concern basls In preparing thls Annual Report and Financial Statements The principal accounting policies and estimation techniques are a5 follows. al Income All income is included In the Statement of Financial Activities ISOFAI when the PDBF is legally entitled to them a5 income or capital respectively, ultimate receipt is probable and the amount to be rècognised can be quantified with reasonable accuracv. il Pai15h Share Is recognised as Income in the year in which it Is received, plus an accrual for any late payments received in january of the following year. ill Rent 15 recognised a5 income when receivable. iiil Interest and dlvldends are recognlsed a5 income when receivable. ivl Grants received which are subject to pre-conditions for entitlement specified by the donor whlch have not been met at the year-end are included In cieditors to be carried forward to the following year. vl Parochlal fees are reeognised as income in the year in which it is received, plus an accrual for anv late payments received in January of the following year. vil Donatlons other than grants are recognised when receivable. vill Galns on dlsposal of flxed assets for the PDBF'S own use li.e., non-investment assets) are accounted for as other income. Losse5 on disposal of such asset5 are accounted for as other expenditure. viiil stlpends fund Income. The Stipends Fund Capital account is governed by the Diocesan Stlpends, Fund Measure 1953, as amended, and the use of the income is restricted for cler8V Stipends. However, the income is fully expended within the year of receipt and the legal restrictions, therefore, are satisfied. It is on this basis that the income and the (normally much lar8erl related expenditure are both included Sn the unrestricted column of the Statement of Financial Activities for the sake of greater clarity and simplicity In financial reporting. bl Expendlture Expenditure 15 included on the accruals basis and has been classified under headings that aggregate all costs related to the Statement of Financial Activities category. il Cost% of ralslng funds are constrained to costs relating to the temporary renting out of parsonages and investment managernent Costs of glebe and any other investment properties. 26

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 ACCOUNTING POLICIES Icontlnuedl ill Charltable expendlture is analysed between contributions to the ArchbSshop5' Council, and expèndlture on resourcing mission and ministry within the Diocese. iiil Grant5 payable are charged in the year when the offer is conveyed to the recipient except In those cases where the offer Is conditional on the recipient satisfying performance or other discretionary requirements to the satisfaction of the PD8F. such grants being reco8ni5ed as expenditure when the conditions attaching are fulfilled. Grants offered subject to such conditions whlch have not been met at the year-end are noted as a commitment, but not accrued as expenditure. Iv) Support costs con515t of central management, administration, and governance costs. The amount spent on raising funds and other activities is consldered to be immaterial and all support costs are allocated to the purpose of charltable activities. Costs are allocated wherever possible directly to the activity to which they relate, but where such direct allocation 15 not possible, the remainder is allocated on an approximate staff time ba%Ss. vl Penslon contrlbutlons. The PDBF'S staff are members of the Church Workers Pension Fund,. either the Pension Builder or the Defined Benefit Schemes, and Clergy are members of the Church of England Funded Pension5 Scheme lsee note 241. The pension cost5 charged as resources expended represent both the PDBF'S contribution5 payable In respect of the accounting period, In accordance with FR5102 and the fundln8 of the deficit. Deficit funding for the pension schemes to which PDBF participates is accrued at current value In creditors distinguished between contributions fallin8 due within one year and after more than onè year. cl Tanglble fixed assets and depre¢latlon Freeholdproperties Properties are accounted for at their fair value and are reviewed on a five-year cycle and revalued accordingly. Depreciation is not provided on buildlngs as any provision (annual or cumulatlvel would not be material due lo the very long expected remainin8 useful etonomic life in each case, and becausè their expected residual value is not materially less than their carryin8 value. The POBF has a policy of regular structural inspection. repair and maintenance, whlch in the case of residential propertles Is in accordance with the Repair of Beneflces Buildings Measure 1972 and properties are therefore unlikely to deteriorate or suffer from obsolescence. In addition, disposals of properties occur well before the end of their economic lives and disposal proceeds are usually not less than their carrying value. The Trusiees perform annual irnpairment revlews in accordance with the requirements of FRS102 to ensure that the carrying value is not more than the recoverable amount. Parsonttge houses The PDBF has followed the requirements of FR5102, In Its accountlng treatment for benefice houses Ipars(>nagesl. FRS102 require5 the accounting treatment to follow the substance of arrangernents rather than their strict legal form. The PDBF Is formally responsible for the mainienance and repair of such properties and has some jurisdiction over their future use or potential Sale if not required as benefice house, but in the meantime legal title and the ri8ht to beneficial occupation is vested in the incumbent. The Trustees therefore consider the most suitable accounting pollcy is to capitalise such properties as expendable endowment assets and to earry them at their estimated current market value. This treatment is also applied to any property where the title will revert to the PCC in the event that it should no longer be required as a parsonage. Parsonage houses are revalued on a five-year cycle. Property cost value5 For the purpose5 of rhe calculation of a revaluation reserve, where the actual cost 15 not known, the C05t value is deemed to be the value at which the property was brought into the accounting system in 2007. 27

PORTSMOUTH OIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 310ecember 2021 I. ACCOUNTING POLICIES Itontlnuedl Computerequipment Items of computer equipment are stated at cost, bèing the purchase prlce and any Incidental acqulsltlon costs. dl Depreciatlon on leasehold property Depreclation is provided on leasehold properties over the lesser of 50 years or the life of the lease. Depreciatlon Is provided on corrputer equipment over a period of 3 years. el other accountlng pollcles il Foxed asset Investments are included in the balance sheet bid value and the gaSn or1055 taken to the Statement of Financial Activities. The sinele property held a5 an investment is revalued by the Diocesan surveyor on a five-year cyde alongside all other properties. Glebe land is valued at ten tlmes the annual rental income. ill Leases. The PDBF has entered only into operating lease arrangements for the use of certain assets, the rental for whlch is charged in full as expenditure the year to which it relates. Where rent free periods are given as part of an operating lease. the impact of this rent-free period is reflected in the Statement of Financial Actiwties over the lease term. iiil Flnanclal Instruments are recognlsed in ihe charity's balance sheet when the charity becomes party to the contractual provisions of the instrument. The charlty only has flnancial assets and liabilltles which qualify as basic financial instrurnents. Financial assets and liabilitles measured at amortised cost, which includes loans to parishes. parish share re￿1vable and other debtors, bank loans and creditors, are Initially measured at transaction price including transactlon ¢o5ts and subsequently carrled at amortised cost using the effective interest rate method. Financial assets held at fair value comprlse the listed and unlisted investments disclosed in note 15. Fund balances Fund 8alancè5 are split between unrestricted (general and designated). restricted and endowment funds. Unrestricted funds are the PDBF'S corporate funds and a￿ freely avallable for any purpt>se within the charltable company's objects, at the discretion of the PDBF. There are two types of unrestricted funds.. General funds which the PDBF Intends to use for the general purposes of the PDBF and Deslgnated funds set aside out of unrestricted fund5 by the PDBF for a purpose specified by the Trustees Re5trlcted fundsare income funds subject to conditions imposed bythe donor as specific terms of trust. or else by legal measure. Endowment funds are those held on trust to be retalned for the benefit of the charitable company as a capital fund. In the case of the endtswrnent funds administered by the PDBF Istipends Fund Capital, Parsonage Houses and Schools), there are discretionary powers to convert capital intts income and, as a result, thesè funds are classified as expendable endowment. Endowment funds where there is no provision for expenditure of capital are classified as permanent endowment. 28

PORTSMOUTH OIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 ACCOUNTING POLICIES Icontlnuedl "Special trusts" las defined by the Charities Act 20111 and any other trusts where the company acts as trustee and eontrols the management and use of the funds, are included in the company's own financial statements. Trusts where the PDBF acts merely as cu510dian trustee with no control over the management of the funds are not included In the flnancial 51atements but are surnmailsèd in the note5 to the financlal statements. KeyJudgement5 The preparation of the financial statements requires management to make judgements. estimates and assumptions that affe¢t the amounts reported for assets and liabilities as at the balance sheet date, and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements lapart from those involvin8 estlmatesl have had the most significant effect on amounts reco8ni5ed In the flnancial statements.. Basls for non-depreciation of functional residential property Assumptions undefpinning the clergy and church workers, pension scheme liabilities. DONATIONS Par15h Contrlbutlons 2021 Unreslricted fund5 General Designated Restrlrted funds Endowment funds Total fund5 2021 Parish share requested Shortfalllsurplus aeainst cash recelved Payments received Amounts received for prloryear Parlsh share re￿1¥able 4,973.C 621,842 4,351,158 53,957 4,405.115 4,973.1XJ) 621,842 4,351.158 53,957 4,405,115 Unrestrirtedfunds General Restrfcted funds Endowrnent funds Total funds 2020 Deslgnated Parfsh share requested Short fall/surplus agalnst cash re￿iVed Payments received Arnounts received for prioryear Parish share receivable 5,213,405 725,923 4,487.482 203,696 4,691,178 5,213.405 725,9231 4,487,482 203.696 4 691.178 The majority of donations are collected from the parishes of the d1ocese through the parish share system. Parish share payments received represented 87.5%12020.. 89.8%) of the amount requested. 29

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 2b Archblshops, Councll 2021 Llnrestrlcted funds General Desl8nated Re$trirted funds Endowment funds Total funds 2021 Lowest Income communlty funding Par15h mlsslon developmentfund Ccgrant for RME Strategic Development Fund Sustalnabllity grant 478,430 474430 191,811 631047 191.811 636,047 490,000 1.796,288 490,Q)O 490,L 47&430 827.858 2020 Unrestrfcted funds General Designated Restrlcted funds Endowment lunds Total funds 2020 Lowest Income comrnunityfunding Parish misslon development fund CC grant for RME Strateg1¢ Development Fund 365,579 96,900 365.579 9Qg00 213,353 1.053,534 600,000 2.329.366 213,3S3 1,053,534 600,000 462,479 1.266,887 2c Other donatlons 2021 Un￿StrIcted funds General Oeslgnated Re$tricted lunds Efidowment fund$ Total funds 2021 All ChuichesTrust Donatlons 101250 9,983 112,233 102,250 16,533 6.550 6,550 2020 Unrestrlcted funds General Desl8nated Restrlcted funds Endowment fund5 Yotal fvnds All Churches Trust Donations Grants from trusts 92,gJO 33,181 22. 147,750 92,5(#J 40,011 22,069 154.580 6,830 6,8 30

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 3 CHARITABLE AcfiviTIES 2021 Unre$trlrtedlunds GemÈftl Oeslgnated Restrlcted fund5 Endowmeni Total iunds funds 2021 Statutory fee5 and chaplaln¢y Ineome Miscellaneous income Sectlon income.. Lay& Ordained Mnistry M1s5ion and Education Strategic Implementatlon & Resources Soclal Transforma￿On 360,485 44,386 360,485 46,417 10 555

1,112 iu 49.770 91,443 582,78Z 91,443 2,031 Unrestrlcted funds General Deslgnatsd Re51rfcted lund$ Endowment Total ￿ndS fvnds statutoryfeesand chaplaincy income Mlscellaneous inwme Sectlon income.. Lay& Ordained Mlnlstry Mi55ion and Educètlon Str8tegi¢ Implementauon & Resources s￿la1 Transfermation 224,359 99,252 ,821 4431 J,519 85,574 46,034 iCn,464 561,rn ¥519 85,574 46,034 109,464 S66,201 4.431 4 OTHER TRADING AcfiviTIES Unrestrlrted funds General Designated Restrfcted funds Endowment funds Total funds 2021 Rental income from properties 430,926 430,926 74,449 74,449 505.37S 505,375 Unre5trlctedfunds General Deslgnated Restrlrted funds Éndowment funds Total fund5 2020 Rental Income from properties 343,187 343,187 109,991 109,991 453,178 453,178 31

PORTSMOUTH DIOCESAN 80ARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 INVESTMENT INCOME 2021 Unrestrlrtedfunds Geneial Designated Re$iricted funds Endowmeni funds Total funds 2021 Dlvidends recelvable Interest receivable Rents re￿1vable 428,584 87.947 124 136,835 619 57,303 710, 81.471 510,089 81,471 791970 88,071 137.454 57,356 2020 Unre5trl(ted funds General Deslgnated Restrlcted funds Endowment lunds Total fund$ 2020 Dlvldends recelvable Interest ￿￿1Vable Rents recelvable 350.529 84,315 136.755 5.937 105,433 325 677,032 7,252 41.073 725,357 41,073 391,602 85.305 142,692 105,758 OTHER INCOME 2021 Unre$trlrted funds General Deslgnated Re$trlrted funds Endowment funds Total funds 2021 Galn on sale of properties 141804 1804 220,9 220,9X) 69,129 69.129 432,831 432,833 2020 Unrestrlctedfurhds General Deslgnated Restrlcted funds Endowment funds Total fund5 2020 G3in on sale of propertie5 Sale of long lease Furlough grant io,( io,oc 161145 171145 162.145 520,591 348,446 32

PORTSMOUTH OIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ènded 310ècèmber 2021 7 FUND RAISING COSTS 2021 Unrestrfcted funds General Deslgnated Restrfcted funds Endowment funds Total funds 2021 Glebe agent's fees and repalrs Management fees of rentals 11.615 35,378 4&993 ii.fj 35,378 46,993 Un￿StrICted funds General Deslgnated Restrlrted lunds Endowment lunds Total funds 2020 Glebe agent's fees and repalrs Mana8ement lees of rentals 9,521 26,870 36,391 9,521 26,870 36,391 CHARITABLE ACTIVITIES 20 Unrestrlcred funds General Deslgnated Restrlrted funds Endowment funds Total funds 2021 Contributlonsto Archbi5hop5' Council Training forministry Natlonal church ￿SponSIblE[rieS fjrants and provlslons Mission agency penslon contrlbutlons Retlred clergy housingcosts 184,912 144.663 1127,9181 8,261 67,886 277,8L 184,912 144.663 1127,9181 8,261 67,886 277,8LJI ResourdThg mln15tryand rn1551on Training for ministry Parish ministry.. Stipends and narional Insuran Pension costs Housing costs Removal. resettlement & othergrants Other expenses 137,321 191,811 329,132 1681,889 689,683 713,331 88,567 74,911 4,385,702 1681,889 689,683 746,789 88,567 721203 5,254263 3L637 1,821 303 31,940 646,989 ,621 Supportforrnini5tryand ml$slon Lay and ordained ministry Mission and Educatlon Strateglc implement and resources Sodal transformatlon Governance Other Oiocesan Central Support 824134 158,041 625,9Lbl 115,585 51,397 16.OtKI L795.061 6,458,567 74,6n 154,5th) 315 L057,307 158,356 625,9LS1 115,585 51797 74,673 106,613 160.215 I,r￿,836 1029.949 7,566,016 33

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For thè year ended 31 December 2021 CHARITABLE ACTIVITIE5 Icontinuedl Unrestrtcted funds General Deslgnated Re5trlcted fund5 Endowment funds Total fund5 2020 ContrlbutionsloAr¢hblshops' Councll Trainlng for mlnlstry 184,469 154,192 77,063 6,919 66,230 488,873 154,192 Grants and provlslons Mission agency pension contrfbutions Retired clergy housingcost5 6,919 66,230 488,873 Resourcln8 mlnlstry and mlsslon Tralnlng for mlnlstry Parish mlnistry.. Stipends and natlonal Insurance Pension costs Housing costs Removal, resettlement &othergrants Otherexpenses 281991 282,991 2,821,151 629,020 691,862 72,128 40,793 4.254.954 23&428 3.059,580 629,020 675,885 72,128 718.085 437,6B9 115,9771 941 115,0361 675,352 1,197.771 Support foimlnlstryand rn155ion Lzy and ordalned ministry Mission and Education Strate8ic implement and reSoUr￿S Soclal transformation fjovernante 840,249 205,26B ,439 35,473 39.781 2.027.210 15,823 189,920 L045,992 205,181 913,915 35.473 7,476 23,299 8,263 195,773 1,393,544 I24&282 8,172,844 6,77L037 ANALYSIS OF EXPENDITURE INCLUDING ALLOCATION OF SUPPORT COSTS 2021 Aclivitle5 Undertaken Dlredly Grant Fundln8 of Artl¥itle5 Support Costs TOTAL 2021 Raislngfunds Contrlbutlons to Ar¢hblshops' Council Parish Ministry Supportfor Ministry and Msslon Education 4&993 46,993 277,804 5,258,263 I,WS.837 34,112 7,613,LJJ9 277,8ts1 $4,332 5.205,931 1,902,2S0 34,112 7.187 286 93,587 331136 34

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For thè year ended 31 December 2021 ANALYSIS OF EXPENDITURE INCLUDING ALLOCATION OF SUPPORT COSTS Icontlnuedl Undertaken Directlv FundlnE of Activitles Support Costs TOTAL 2020 Ralsingfunds Contribution5 to Archblshops. CounLiI Parish Ministry Support for Ministry and Mission Education 36,391 36,391 488,873 5A37,689 2,041,101 537,417 8,541,471 488,873 54B32 5,383,357 1,964,530 537.417 7.921,695 71571 543,205 76,571 10 ANALYSIS OF SUPPORT COSTS 2021 Vnrestrlrtod funds General Deslgnated Aestrirted funds Endowment fund5 Total funds 2021 Central administratio Governance 36,7 51,397 88,187 36,790 56.797 Unrestrlcted funds General Designated Restrlrted funds Endowment funds Total fund$ Central èdmlnlstration Governance 36.790 39,781 76,571 36,790 39,781 76,571 Auditors remuneration for the year was £15,84012020'. £16,530) and the cost of operatlng lease ientals was £15,05212020.' E16,9021. 35

PORTSMOUTH DIOCESAN 80ARO OF FINANCE NOTESTO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 11 ANALYSIS OF GRANTS 2021 Number Indivlduals In5tltLttlons Total From unrestrfcted fundsfor natlonal Church ￿spOnsIbIlItIe$. Contrlbution5 to Archbishop's Councll From unresirirted funds: Cathedral Retired Lay WorkerPenslon Grant Removal and resettlement grants 277,804 277. I6,￿0 2,043 2,043 14 16 3,607 3,607 16,(XM) 293,804 19.607 297,411 17 2020 Number Indlvlduals Inststutlons Total From unrestrlrted fundsfor natlonal Church responslbllltles.. Contributlons to Archbishop's Councll From unrestrltted fund5'. Ret[￿d Lay Worker Pension Gr8nt Removal and resettlement grants 488,873 488,873 1020 52,312 1020 52,312 54,332 543,205 13 14 15 54,332 12 STAFF COSTS Employee cost5 durfngthe yearwere asfollows.. 2021 2020 Wages and s4larles Natlonal Insurance wntrlbuttons Penslon costs 1.055,388 105,709 180,320 L341,417 1.291,818 125,079 202,608 L791957 The average numberof persons employed during the year based on full tlme equlvalents.. 2021 fte fte Mission & Education Lay & Ordained Mlnlstry Strateg1¢ lrnplementsfion & Resources Safeguarding Soclal Transformation lof which 2.2 are externally funded) 13.2 29.3 Parochi31 Asslstants 36.8 36

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 12 STAFF COSTS Icontlnuedl The average nurnberol persons employed durln6 the year.. 2021 2020 no. no. Misslon & Education Lay & Ordained Min15try Strategic Implementètion & Resources Safeguarding Social Tr8nsformatSon io 13 33 Parochlal Assistants 35 41 Included In the fl8ures above are a small number of staff who work wlthln the deaneries includin8 the PA'S to the Ar¢hde8cons, as well as those in central diocesan support roles. In addltlon, 3 rnernbers of staff are funded under the Strategic Development funds. The staff tearn includÈd above under Mlssion and Education are shared with the WlnchesterDiocesan Board ol Flnantt IWD8FI. Two thlrds of the costol this tearn ère reth8rged to the WDBF based on the nurnber of Khools In The flnance team for the PDBF are also a shared te8m wlth WD8F. The cost5 of th15 team are thar8ed from WDBF to PDBF on the basis of time spent providln8 SUPPOrt to e4ch dI0￿se. These staff are not refletted In the headcount above. The number of Staff whose ernoluments Ilncluding benefits in klnd but excludlnE pension contributions) amounted to more than £60,0(K> were as follows.. 2021 2020 £70,000- £80,rx)o Penslon payment5 01 £27,38312020.. £24,600) were made for these ernployees. Remuneratlon of Key Management Personnel Key management personnel are deemed to be those having authorlty and responsibility, delegated to them by the trustees, for planning, directing and controlling the activitie5 of the dioeese. Durlng 2021 they were.. Victoria James Lisa Streeter146%1 Jenny Hollingsworth Anthony Rustell Jeff Williams133%1 Nick Ralph IlO%I DI0￿$an Secretary & Company Secretary Director of Finance Deputy Dlocesan Secretary Head Lay and Ordained Minlstry Head of Education Head of Soclal Transformation Remuneration, pensions and expenses for these 6 employees amounted to £281,84112020'. £263,408). Trustees, emoluments NoTrustee received any remuneration for services as Trv5tÈe. The Trustees received travelling and out of pocket expenses, totalling £8,34112020.. £11,663) in respect of General Synod duties, duties as Diocesan Secretary, Archdeacon or Area Dean. and other duties as Trustees. All those claimin8 are staff or ¢ler8y employed by the dlocese. 37

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 Decembèr 2021 12 STAFF COSTS Icontlnuedl The following table gives details of the Trustees Ilncluding those eleued in 20221 who were in receipt of a Stipend andlor houslng provided by the PDBF during the year.. Stlpend Ye5 Yes Yes Yes Yes h)uslng Yes Ye5 Yes Yes The Archdeacon of the Meon Icollinsl The Archdeacon ol Isle of Wlght ILeonardl The Archdeacon of the Meon (Rowleyl Chairol House of Clergy (Canon R C White) The Rev Canon Wllllam Hughes The Revd Dr Paul Chamberlain The Revd lan Snares The Revd Paul Armstead Yes Yes Yes Yes Yes Yes r 11 Ye5 Yes Yes The Revd Richard Eneland The Revd james Hunt The Revd Bruce Deans The Revd Andrew HarEreaves The Revd Canon Tom Kennnar The Revd Safll Martell The Revd Allie Kerr The Revd Mark Williarns Ye5 Yes Yes Yes Yes Yes Ye5 Yes Yes No Ye5 Yes Yes Ves The PDBF is responsible for fundlng via the Church Commissioners the stipends of licensed stipendSary clergy in the dlocese, other than bishops and cathedral Staff. The PDBF is also responsible ftsr the provislon of housing for stipendiary clergy in the diocese, agaln excluding the dioeesan bishop and cathedral staff. The PDBF paid an average of 8512020.. 901 slipendiary clergy as officeholders holding parochial or diocesan appolntments in the diocese, and the costs were as follows-. 2021 Stlpends National Insurance contributlons Pension costs- turrent year deficit reduction 2,476,289 205.600 525.683 164.(MK) 3,371,572 2.863,514 219.183 626,700 307,[￿j0 4,016,397 38

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 13 ANALYSIS OFTRANSFERS BETWEEN FUNOS 2021 Unrestrlcted fund5 General Deslgnated Restrlcted fund5 Endowment funds Portsmouth Share of Interest earned by P&WCSG Fund To charge the General Fund for the reduction In penslon deficit provlsSon Redesignation of fvnds from Catherlngton Trust to CBIL fund Redesignation of funds from car loan fund to CBIL fund Redesignation of funds from dlocesan loan fund to CBIL fund Transfer from CBIL fund for CBIL loan repayments 8udgeted transfer to Lambeth Conference fund Clergy ¢onference costs net of budgeted transfer to conference fund Redeslgnatlon of funds to the bulldlng repair fund Transfer Cost of education tearn activities 63 1631 1164.0001 IfA,000 33,333 16.0001 18.5001 1315.0001 150 469 1309,6351 133.3331 6,0 8,500 315,000 150,469 1150,5321 296.167 164,000 Further detalls of the transfers are Included In note 19. 2020 Unrestrfcted funds General Deslznated Restrlrted funds Endowment funds Portsmouth share of Interest earned by P&WCSG Fund 70 char8e the General Fund forthe reductlon in pension deflclt provision Transferfrom Catherln8ton Trust for Spirituality Advlsor Bud8etÈd transfer to Lambeth Conference fund Clergy conference costs netof budgeted transferto Transfer of RME Fund deflclt to gener31 fund 1.513 11,5131 301.000 1301,OLWJI 14,875 11.0641 18,7761 1167,7401 462,1921 114,8751 1,064 8,776 167,740 166.227 15,0351 301,WO 39

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 14 TANGIBLE FIXED ASSETS- Land artd Bulldlngs Freehold Land •nd Building5 Leasehold Bulldln8S Cornputer eqltlpment Total 2021 Atcostorvaluatlon At ljanuary 2021 AddStions Disposals Revaluation At 31 December2021 56,460,186 L851,443 58,311,629 47.249 I1,￿,C￿l 47,249 IL690,OLKII 3,209,792 57,979 978 1.85L443 47.249 59,878,670 Accumulated depredatlon Ar ijanuary 2021 Charge forthe year At 31 December2021 490,208 36.790 526,gJ8 4￿.203 38.102 528 310 1,312 1.312 Net bookvalue at 31 December2021 57 979,978 1324 445 45,937 59.350.3 Net book value at 31 Decetnber 2020 56.460,186 1 361,235 57.821,421 All of the properties in the balance Sheet are freehold and are vested in the PDBF, except for benefiee houses which are vested in the intumbent. All propertie5 are held at market value and are subject to a five-year cycle of survey and consequent repairs are charged as expenditure. The Diocesan Office at Peninsular House Is a leasehold property for which the premium is belng amortised over SO year5. lust under half of the office space is sublet as it is not required for diocesan use. The carrying value of thi5 property valued on a part fvn¢tional, part Investment basis would not be materlally different from that quoted above.

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 15 FIXED ASSETS INVESTMENTS At 1st Change I Market Value At 31st De￿mber 2021 January 2021 la5 amended) Addlllons Dlsposals un￿strICted General Fund$ Unllsted investments L831077 271,220 2,103,297 Deslgnated Funds Unlisted investments 2.706,458 3,679 40L197 3,IIL334 Restrltted Funds Unllsted inve5trnents 4,835,981 60,622 701,114 S.597.717 Endowrnent Funds UnlistÈd Investments Investment Property Investment Land 11,236.128 3610 311963 l.Q2.2 I1￿8,364 362.0 349.928 36, Total FuThds 21,285,607 64,301 3,032,731 24,382.639 The balances at Istjanuary 2021 have bÈen updated from those reported at 31 December 2020as the split of Investments dld not correctly reflett the funds to whlch the Investments were held. The overall fund balances remaln unchanged. 16 DEBTORS 2021 2020 loans to parishes Parlsh share ￿te1Vable Prepayments and accrued Income Otherdebtors 2,100 119,485 232,786 670,778 1,025,149 41,769 354,372 574,885 971,026 41

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For thè year ended 31 December 2021 17 CREDITORS: amounts falllng due wlthln one yèar 2021 2020 Accruals Othercredltors P&WCSG Fund Creditors Loan repayments Deferred income Tax and social 5ecuritv Penslon scheme liabilitles.. Clergy Pension Scheme Lay penslon schÉme 62.040 563,569 1,852,018 440,(60 31.722 3L523 87.465 726,081 ¥868,6DI 40,050 7.552 16,7CX) 33,3CI) 2,999,532 2,763,059 * The P&WCSG fund holds £1,891,12512020.. £1,9Q7.7071 on deposit with CCLA and Bardays. Deferred income relatesto rental Income re￿iVed in advante and is fully released In the subsequent year. 18 CREDITORS.. amount5 falllng due after more than one year 2021 2020 Loan repayrnent Snstalments due after more than one year 1-2years 2-5years Pension Scheme liabllities.. Clergy Pension Scheme Lay pe￿510n scheme 8(O.( ¥240,Q&J 766.667 299,70) 17.100 1,734.067 339,76D 42

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTESTO THE FINANCIALSTATEMENTS Forthèyearended 31 De￿mber 2021 19 SUMMARY OF FUND MOVEMENTS 2021 Balances at ljanuary alances at 31 Dteember 2021 Gains and losse5 2021 Income Expenditure Transfers Unrestrlcted funds- General 16,149.415 6.660,348 1&505,560 309,S45 1,101,889 I7,￿6,457 Unre5trlrted fvnds- Desl8nated Brown. Do5& SllverBequest Circu5 Charity Fund Dloce$3n Conference Fund Car Loan Fund Diocesan Loan Fund Parsonages Repair5 Fund CME Fund Valpy Bequest Wlnterborh3m Legary Office Repair Fund Mission Fund Lambeth Conferentr Fund Evan6elism Fund Buildin8 Repair Fund Caiherlngton House Fund 34.545 2.262 36.812 295.543 649,412 330,284 144,(03 32,525 13&146 108,414 496,818 12,715 1,495 80,494 ¥zzL 5,241 306 39.786 2,568 45.329 17 8,50D 1347.S441 1369,610> 42,741 74629 63,254 13.179 19.Q34 369,610 131,5841 4,101 37,459 165.715 4,934 22,391 &052 5.177 L663 175,0291 42L793 18.715 495 395,494 738.575 315,(X)O 39.730 49QWO I￿.648 CBIL ￿paYrne￿tfu￿d 1.383,821 296,167 1.383.821 5.353.578 4.184.756 57&071 1106.6131 40L197 43

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 19 SUMMARY OF FUND MOVEMENTslcontlnuedl &alan￿$ at lJanuary 2021 Balances at 31 December Galns and losses Income Expenditure Transfers Restrfttedfunds Barclay Be9ue5t 8erTr Aug Fund Bishop's Lent Appeal Chrlstièn Healing Fund HaTr151on P?rochlal Loan Fund Huckstepp Legacy James Le8acv New Churthes Fund Turret House Fund Surrexit Fund Strategic Development Pastor31 Fund P&WCSGF Corban Fund Eckersley Cler8y famllles Educion Restricted Re50urcinE Minlsterial Education 6.748 ,991 13,571 247 18,274 121,298 22.332 1,218,4O) 110,459 5,1 145,9561 1110,075 39.107 42,526 413,401 L367,If 151 734 15,321 7,633 116.312 6,551 247 1&314 138.371 25,521 L298.683 129.706 5,195 145,9561 2.407.157 39,107 49.637 475,918 L674849 17,073 3,189 193.032 16.017 41,751 3,230 636,047 66.850 379 1,2( 10,850 310,376 191,811 I63&￿7J 115.0611 13161 24S293 s.￿5 53.067 15L483 IL4(¥JI 11,7011 1191,8111 I￿,459> 5,543,827 1,269,242 I.OW.836 150,532 701,114 361815 Expendable Endowmentlund$ Parsonage House5 Educarion Endowment Permanent Endowrnentfunds 5tlpend5 Capital Fvnd Bells Loan Fund Boyd Wchardson Trust constan￿ Trust Cowes St M Ben Au8 Dlocesan House Trust Fawdry Bequest Glebe Fund Glebe Property Glebe House Cottage Trust Hayllnest Mcuracy End lambert Loan Fund Glebe Capltal 39.51L514 FAI032 69,129 57,356 1295.822 119.693 41,877,465 1.84 &313,947 461.098 17&127 32.993 L026 24L027 41445 1,141,334 2.88&889 4.741 1,337 185.466 40,137 54,708,113 1,161,227 .890 26,721 9.639,174 521.987 37,997 1.165 Z77,359 47,363 1.246.994 1988,154 5.417 4518 206,360 121.037 59.017,920 139 36,332 5,918 ICS,660 99,265 676 181 20,894 80,9LKI 4.019,322 126,485 164,( Total Funds 80,586,110 8,634,146 7,613,￿9 &223.523 87.830.770 The transfers made between funds take into account the Eains and1055es Benerated on the funds throughout the year, based on the underlying assets held in the funds. 44

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 De￿mber 2021 19 SUMMARY OF FUND MOVEMENTS Icontlnuedl 2020 Balances at ljanuary 2020 Balances at 31 December 2020 Galnsand losses Income Expendlture Transfers Unrestrlcted funds- General 16,420,209 7 102 347 7,139,663 462.192 228,714 16,149,415 Vnrestrlcted funds. De$lgnated Brown, Doi& Silver Bequest Circus Charity Fund Diocesan confe￿nce Fund Car Loan Fund Diocesan Loan Fund Parsonages Repalrs Fund CME Fund Valpy BequÈst Winterbotham Legacy Off1￿ RepaSr Fund Mission Fund Lambeth Conference Fund Evan8ellsm Fund Building RepairFund Catherington House Fund Sustainabllit¥ Fund 32,191 2,125 27,911 264,447 562,511 346,201 144,027 2.354 137 34,545 1262 3&812 295,543 649,412 33Q284 144,033 31525 13&146 10&414 49Q818 11715 L495 8Q494 L22¥198 135 9,025 13,086 17,9 8.776 22.071 73.815 13,8651 130,0411 2.217 6,524 3,617 126,692 103,044 521,026 lJ,651 L495 34,476 1,129,451 4,930 1,753 32 124,2401 46,018 38,29) 6CM),(XKI 114.8751 68.332 3.337.546 18,2631 5,035 175.202 4.184.756 Restrlcted tunds Barclay Bequest Ben AUÉ Fund 8ishop's Lent Appeal Christian Healing Fund Harrlslon Parochial Loan Fund Huckstepp LegaLv James LÈ8aCy New Churches Fund Turret House Fund Surrexlt Fund Strategic Development Pastoral Fund P&WCSGF Corban Fund Eckersley Clery famllles Education Restricted Resourcing Mini5teri31 Education Transformation Capaclty FundSng 6.266 94.iD8 6,740 246 18,133 123.848 20,899 1,265.453 I￿,366 ,oii 195,45 2,015.294 39.107 39.013 ,141 879,807 1167,7401 152 330 &748 .991 13,571 247 18.274 12L298 21332 1,218.4rKJ 110.459 5.195 145,9561 2,110.075 39.107 41526 413,401 1367,Ifn 6,831 141 12,Th11 39.273 3.032 1156.9521 7,061 14.8321 11.(A)4,0341 112,0201 13,1331 1.053,534 65,194 41,607 IL5131 1.178 10.670 481,256 213,353 2,335 23,839 4,067 11,2501 1213,3531 167.740 4.736,236 1,879,277 ¥393,544 166,227 155,631 5,543,827 45

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 19 SUMMARY OF FUND MOVEMENTS Icontlnuèdl Balantesit Ilanuary Balinte5 at Gains and 31 December losses 2020 Imome E¥pendlturè Transfers Expendable Endowm¢ntfunds Parsonage Houses Educatlon Endowment Permanent Endowmentfunds Stipends Capital Fund Bells Loan Fund Boyd ￿chardsOn Trust constan￿ Trust Cowes St MBen Aug Diocesan House Trust Fawdry Bequest Glebe Fund Glebe Property Glebe House Cottage Trugt Hayling St M Cvrary End Lambert Loan Fund Glebe Capital 38,998.￿5 1,59L409 513,EQJ 28,212 39.512,514 1,666.032 4&411 7,579,219 404,486 164.124 30.744 30LQUI 433,728 45,528 12,LD3 2,249 62 .313,947 46L098 176,127 32,993 1,026 241,027 4L445 1,141,334 2,88&889 4.742 1,337 185,466 40.137 ii, 227,641 38,786 1,079,(YJ6 2.599.458 4,438 1,256 171,703 2,659 22,145 289,431 4Q(133 81 4.377 3,795 36,342 52.892,229 105,759 301,CQ) 1,4C8.125 54,70&114 Total Funds 77,386,220 9.772,689 18,541,470> 1,968.672 80,58&111 46

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 20 SUMMARY OF ASSETS BY FUND 2021 Flxed A55et5 Tan%lble Investmerf$ Cuttent Assets Net Assets Unrestrlcted funds- General 15,517,772 2,103,295 1,787,Z13 12,311,8221 17,096,457 Unrestrlcted funds- Deslgnated Brown, Doi& &lver Bequest Clrcus Charity Fund Diocesan Conference Fund Car Loan Fund Dlocesan Loan Fund Parsonages Repair Fund CME Fund Valpy Bequest Winterbotham Le8acv Office Repalr Fund Mission Fund Lèmbeth Conference Fund Evangellsm Fund Bulldlng Repair Fund Catherlngton House Fund Sustainability Fund CBIL repayment fund 41.690 2,433 11,9041 135 45,328 1328,4171 1180.0021 1124A501 144,101 11,7921 114.6601 39.786 2,568 45,328 328,418 549,612 505.438 369,610 380,988 144,101 37,459 165,714 39,Z51 180,373 64,053 54,077 421,793 18,715 118,130 421,793 18,715 IN95 395A94 1661,4911 1,090,000 1,383,821 2,242,244 1.495 395,494 738,576 1,090,000 1,383,821 5,353,578 1,400,067 3,111,335 Restrlcted funds Barclav Bequest 8en Aug Fund 8ishop's Lent Appeal Chrlstlan Healing Fund Harrisk)n Parochial Loan Fund Huckstepp Legacv Jzme5 Legacy New Churche5 Fund Turret House Fund Surrexit Fund Pastoral Fund P&WCSGF Corban Trust Eckersley Clergy lamllies Education Restricted Resourclng Mlnisterlal Educatlon strategic Developrnent 5,838 121,876 1,794 15.5641 20,121 247 18,314 7,633 116.312 20,121 247 18.314 136.530 25,368 1,555,912 1,841 154 1257,2291 138,371 25,522 1,298,683 129.180 526 5,195 462,750 1.891.125 2,668 53,781 870,107 129,705 5,195 2M07.157 39.105 49,636 475,920 1,676,849 I￿44,408 11.852,0201 46,969 422,140 1209.499 1402,7561 145,9561 3,019.873 145,9561 6,362.815 5,597,718 12.254.777) 47

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the yèar ended 31 December 2021 20 SUMMARY OF ASSETS BY FUND Icontinuedl Flxed Assets TangSble Investments Current A55ets Nét Llabllltles Assets Expendable Endowment funds Parsonage Houses Education Endowment Permanent Endowmentfunds Stipends Capital Fund Bells Loan Fund Boyd FiichardsonTrust Constance Trust Cowes St M Ben Aug DI0￿$an House Trust Fawdry Bequest Glebe Fund Glebe Propertv Glebe House Cottage Trust HaylinB St M Curacy End mbert Loan Fund Glebe Capital 4L570,288 307,177 727,161 418n,465 1,843.081 1,115.921 9.231,470 457,884 212,555 39,816 4104 289,212 47,078 4335,064 549,926 5,378 574,704 64,104 19.7071 11,8181 61 111,B531 285 188,0711 175,927 39 80 40,156 3,795 1.782.042 1167,C¥XII 9,639,174 521,988 202,848 37,998 1,165 277,359 47,363 L246,994 2,988,154 5,417 1,5 206,3fKI 121,037 YJ,017,920 IZ62,301 166,203 117,242 13,570,2 43 832,588 1167,( Total Funds 59,350,360 24 381639 8.831,370 4,73 87,830,770 48

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTESTO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 20 SUMMARY OF ASSETS BY FUND Icontinuedl 2020 Flxed Assets TanBlble Inve$tment5 Current Net Assets Assets Unrestrlrted funds- General 15,496,955 832,076 1.291,81Z 2.471,429 16 971 106 Unrestrlcted funds- De51gnated Brown. Doi8, Sllver Bequest Circus Charity Fund Diocesan Conferente Fund Car Loan Fund DSocesan Loan Fund P8rson8ges Repalr Fund CME Fund Transltion Fund Valpy 8equest Wlnterbotham Legacy Office Repair Fund Mission Fund Lambeth Conference Fund Evangelism Fund Buildin8 Repalr Fund Catherington House Fund Sustalnability fund 36,449 2,126 11.9041 136 36,812 9,867 176,429 1111,9C#JI 144.093 34,545 2,262 36,812 295.544 649,412 330,284 144,093 285,677 472,9B3 34,317 154,303 56,LX)i 11,7911 116,1571 52,412 496,818 12.715 1.495 80.494 11.2221 32.526 138.146 108.413 496,818 12,715 1,495 80,494 1.221.197 L222.419 2,706,459 1,478,297 4,184 756 Restrlrted funds Barclay Bequest Ben Aug Fund 8lshop's Lent Appeal Chrlstlan Healing Fund Harrlslon Parochlal Loan Fund Hutkstepp Legacy Jame5 Legacy New Churches Fund rurret House Fund Surrexit Fund P8Storal Fund P&WCSGF Youth DÈvelopment Corban Trust Eckersley Clergy families Educatlon Restrlcted Resourtin8 Ministerial Educatlon 5trate8ic Development 5.105 106.555 6.748 100.991 13.571 247 18,273 121,298 22,332 1,218.4OJ 110.458 5,195 1110,075 39,106 15.$641 13,318 247 18,Z73 1,841 153 1109,1741 524 5,195 433,048 1,907,707 253 119.457 22,179 1,327,574 109,934 L677.027 IL868,6011 41, 369,071 864,031 1.462 44.330 194.1141 42,526 413.401 ¥367.160 1402,7571 18,6711 2.2rN).218 127,2841 IZ,298,3891 145,9551 5.543,826 S.641.997 49

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 20 SUMMARY OF ASSETS BY FUND Icontinuedl Fixed Assets Tan8lblè Investments Current Assets Net Assets Llabilitles Expendable Endowmentfunds Parsona8e Houses Education Endowment Permanent Endowrnent funds Stipends Capital Fund Bells Loan Fund Boyd Richardson Trust Constance Trust Cowes St M Ben Aug Diocesan House Trust Fawdry Bequest Glebe Fund Glebe Property Glebe House Cottage Trust Hayling St M Curacy End Lambert Loan Fund Glebe Capital 40,￿4￿65 1611.9511 1.475,820 44.116.961 1.666,032 190,212 8,072,243 396,994 185.834 34,811 965 252,B80 41,160 1.229,404 512.962 4,702 1,257 145,309 36.342 574,705 64,103 I9,7(￿) 11.8191 61 111,8531 285 188,0711 175.927 1333.(Wl 8,313,948 461,097 176,128 32,992 1,026 241,027 41,445 1.141,333 3.359,459 4,742 1,337 185,466 40.138 1200,OC 80 40.157 3,796 42,324.466 11,105.075 1,611,S74 333,0￿) 59.783.131 Totsl Fund$ 57,82L421 21,285,607 6,581,gJl 5.102,818 86,482,819 21 DESCRIPTION OF FUNDS Fund Pur Unrestrlcted fund5- General FHP Capital Fund Freehold Property General Fund Leasehold Property Provision of clergy houslng Housing other clergy DBF'S revenue operations Property for the charities own use

PORTSMOUTH OIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMEMfs For the year ended 31 December 2021 21 DESCRIPTION OF FUNDS Icontlnuedl Unrestrlcted funds- Desl8nated Brown, Doi& Silver Bequest Building Repair Fund Car Loan Fund Catherlngton House Fund Circus Charity Fund CME Fund Coronavirus Business Interruption Loan Fund Diocesan Conference Fund Diocesan Loan Fund Evangelism Fund Lambeth Conference Fund Mission Fund Office Repair Fund Parsonages Repairs Fund Sustainability Fund Valpy Bequest Winterbotham Legacy To offset DBF offlce costs AdditSonal repair work on Diocesan properties Loans to DBF employees For work of thÉ Diocesan Spirituality Adviser For stipends Continuing mini5teYial education For repayment of the CBIL loan To offset cost of diocesan Clergy Conferen Loans to Parishes For evan8elism within the diocese To offset the next Lambeth conference costs For outward focussed mission actlvities Repalr and malntenance of Office Equipment Repair and maintenance of parsonages To aid tran51tion For stipends For DBF'S own purposes Restricted funds Barclay Bequest Ben Aug Fund Bishop's Lent Appeal Christian Healing Fund Corban Trust Fund Eckersley Clergy Famllies Education Restricted Fund Harrisltsn Parochial Loan Fund Huckstepp Legacy James Le8aCY New Churches Fund P&WCSGF Pastoral Fund For'new churches, buildin8$ For stipends Bishop's annual charity appeal For Christian healing work For Poor and needy in Portsmouth St Albans parish For the support of tlergy and their familie5 Education within the diocese of Portsmouth Loans to Parishes Support Ordinands Support Ordinands For'new churches. bulldlngs Income from school governors, funds Mana8ement of money in accordance with the Pastoral Measure 1983 Grants received to fund ordinand training For activities specifically identified in the strate8ic plan For youth development For ¢hurch buildin8 projects Resourcing Ministerial Education Strateglc Development Fund Surrexit Fund Turret House Fund Expendable Endowment fund5 Par50nage Houses Education Endowment Housing incumbentslpriests in charge To fund education si

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 21 DESCRIPTION OF FUNDS Icontlnuedl Orl Inal Ca Ital Permanent Endowment funds Bells Loan Fund Boyd Richard50n Trust Constance Trust Cowes St M Ben Aug Diocesan House Tiust Fawdry Bequest Glebe Fund Glebe Capital Fund Glebe House Cottage T¥ust Glebe Property Hayling St M Curacy Ed Lambert Loan Fund Stipend5 Capital Fund 14,563 Loans to parishes in Portsmouth Deanery 2.500 For DBF'S own purposes 500 To offset DBF office costs 679 For stipend ICowes.'St Maryl 4,800 Upkeep of DBF offices & payment of staff 12,001 For clergy widows & DBF general purposes Glebe funds held on deposit 2,200 For DBF'S own purposes Glebe held for investment and housSng 630 For stipend (Hayling 151andl 21,300 Loans to clergy and PCCS For stipends 22 OPERATING LEASES Total commitments under non-cancellable operatln8 leases are as follows.. 2021 Operatlng leases payable.. Wlthln l year In 1-5 year5 15,053 26,247 41,3(N) 16,6 42.151 23 ANALYSIS OF CHANGES IN NET DEBT As at 1st January 2021 As at 31st December 2021 Cashflows other Cash and cash equiv31ents Loans fallin8 due wlthln one year Loans falling due after more than one year TOTAL 5,556,752 140,IMI 2,040.(WI 3,476,632 2,303,592 7,860,344 1440,0601 11,566,667) 5,853,617 I40D,0￿) 73,393 2,376,985 The amounts shown a5 '0therf above represent the amount now due for repayment within one year on the CBIL loan. 24 PEN510NS Portsmouth D8F participates in the Church of Englènd Funded Pensions ScheTne for stipendiary clergy, a defined benefit pension scheme. Thls scheme is adrninistered by the Church of England Pensions Board, which holds the assets of the schemes separately from those of the Responsible Bodies. Each participating Responsible 8ody In the scheme pays contributions at a Common contribution rate applied to penslonable stipends. 52

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 24 PENSIONS Icontlnuedl The membership figures that we hold a5 at De￿mber 2020 and Decernber 2021 for Portsmouth DBF are set out in the table below. These are used as part of the Board's calculation of the deficit contributions in payment at each year-end, which In turn feed Into the FR5102 calculatlons, so are provlded here for reference. December 2021 December 2020 Number of rnembers at this Responsible Body 103 The scheme is considered to be a multl-employer scheme as descrlbed In Sectlon 28 of FRS 102. Thls means it is not possible to attribute the Scherne'5 assets and liabilities to each 5pecilic Responsible Body, and this means contributions are a¢counted for as if ihe Scheme were a defined contrlbutlon scheme. The pensions costs charged to the SOFA in the year are contributions payable toward5 benefits and expenses accrued in that year12021'. £689,683, 2020.. E629,0201, plus the figures highlighted in the table below as belng recognlsed In the SOFA, glvlng a total charge of £856,683 for 202112020: £1,000,020). A valuation of the Scherne is carried out once every three years. The most recent Scheme valuation completed was carried out at as 31 December 2018. The 2018 valuation revealed a deficit of £50m, based on assets of £1,818m and a fundlng target of £1.868m, assessed using the following assumption. An average discount rate of 3.2% p.a. RPI inflation of 3.4% p.a. land pension increases con515tent with this). Increase in pensionable stipends of 3.4% p.a. Mortallty In accordance with 95% of the S3NA_VL table5, Wlth allowance for irnprovements In mortalitv rates in line with the CM12018 extended model with a lonÉ-term annual rate of improvement of 1.5%, smoothing parameter. of 7 and an initial addition to Mortality improvements of 0.5% pa. Following the 31 December 2018 valuation, a recovery plan was put Sn place until 31 December 2022 and the deficit recovery contributions las a percentage of pen5i0nable stipendsl are as set out in the table below. % of pensionable stipends January 2018 to January 2021 to December 2020 December 2022 Deficit repair contributions 11.9% 7.1% As at 31 December 2019. 31 December 2020 and 31 December 2021 the deficit recovery contributions under the recovery plan in force were as set out in the above table. For senior office holders, pensionable stipends are adjusted in the calculation5 by a multiple, as Set out in the Scheme's rules. 53

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 24 PENSIONS Icontlnuedl Section 28.IIA of FRS 102 requires a8reed deficit recovery payments to be recognlsed as a liability. The movement In the balance sheet Ilability over 2020 and over 2021 is set out in the table below. 2021 2020 Balance sheet IlabSllty at l January Deficit contribution paid 333,000 692,000 1165,0001 1307,0001 Intèrest cost Irecognised In SOFA) 1,000 6,000 Remaining change to the balance sheet liabllSly' Ireco8nlsed in SOFA) Balance sheet liability at 31 Deeernber 12,0001 158,0001 167,000 333,000 Comprlses change In agreed deficlt recoveTY plan and change In discount rate and assumptions between year-ends. This liability represents the present vèlue of the deficit contributions agreed as at the accounting date and has been valued using the following assumptions set by reference to the duration of the deficit recovery payrrents.. December 2021 December 2020 De￿mber 2019 Discount rate 0.0% 0.2% 1.1% Price inflation nla 3.1% 2.8% Increase to total pensionable payroll -1.5% 1.6% 1.3% The legal structure of the scheme is such that if another Responsible Body fails, Portsmouth DBF could become responsible for paying a share of that Responsible Bodws pension liabilities. Portsmouth DBF IDBSI participates in thè Defined Benefits Scherne section of CWPF for lay staff. The Scheme Is administered by the Church of England Pensions 8oard, which holds the assets of the scheme separatelv from those of the Employer and the other participatlng employer5. CWPF has iwo sections.. The defined benefit5 Scheme The pension bullder Scherne, which has two subsections A deferred annuity section known as Penslon Builder Classic, and. A cash balance sectlon known as Pension Builder 2014 54

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTE5 TO THE FINANCIAL STATEMENTS For the year ènded 31 December 2021 24 PENSIONS Icontlnuedl Deflned Beneflts Scheme The Defined Benefits Scheme I"DBS"I section of the Church Workers Pension Fund provldes benefits for lav staff based on fsnal pensionable salaries. For funding purposes. DBS is divided into sub-pools in respect of each participating employer as well as a further sub-pool, known as the Life Risk Pool. The Life Risk Pool exists to share certain risk5 between employer5, including those relating to mortality and post-retirement investment returns. The division of the DBS Into sub-pools is notional and is fo¥ the purpose of calculaiing ongolng contributlons. They do not alter the fact that the assets of the DBS are held as a single trust fund out of which all the benefits are to be provided. F¥om time to time, a notional premium is transferred from employers. sub-pools to the Life Risk Pool and all penslons and death benefits are paid from the Life Risk Pool. The scheme Is a multi-employer scheme as described in 5ecrion 28 of FRS 102. It Is not possible to attribute DBS a55ets and liabilities lo specifie employers, since each employer, through the Life Risk Seetion, Is exposed to actuarial risk5 associated with the Current and former employees of other entities participating in DBS. This rneans that contrlbutions are accounted for a5 if DBS were a defined eontrlbutlon scheme. The pensions costs charged to the SOFA during the year are contributions payable towards benefits and expenses accrued in that vear12021'. £268,127, 2020.. £106,081) If, followlng an actuarlal valuation of the Life Risk Pool, Ihere Is a surplus or deflclt In the pool, further transfers may be made from the Life Risk Pool to the employers, sub-pools, or vice versa. The amounts to be transferred land their allocation betweeFI the sub-poolsl will be settled by the Church of England Pensions Board on the advlce of the Actuarv. A valuation of DBS is carried OLSt once every three years. The most recently finalised was carried out a5 at 31 Decernber 2019. In thls valuation. the Life Risk Seclion was shown to be In deficlt by £7.7m and £7.7m was notionally transferred from the employers, sub-pools to the Life Risk Section. Thi5 increased the Employer contributions that would otherwise have been payable. The overall deficit in DBS was £11.3m. The next actuarial valuation is due at 31 December 2022. Following the valuatlon, the Employer has entered into an agreement with the Church Workers Pension Fund to pay expenses of £9,500 per year. In addition, deficit payments of £3,206 per year have been agreed foi 7.0 vears from l April 2021 in respect of the shortfall in the Employer sub-pool. Thls obligation has been recogni5ed as a liablllty wlthln the Employels financial statements. Section 28.IIA of FRS 102 requires agreed deficit recovery payments to be recognised as a liability. The movement in the provision is set out in the table below. 2021 2020 Balance sheet liability at l Januarv Deficit contribution pald 12.0001 Interest cost Irecognlsed In SOFAI Remaining change to the balance sheet liability, Irecognised in SOFA) 21,000 Balance sheet liability at 31 December 19,000 SS

PORTSMOUTH DIOCESAN BOARD OF FINANCE NOTESTO THE FINANCIAL STATEMENTS For thè year ended 31 December 2021 24 PENSIONS Icontlnuèdl Comprises change in agreed deficit recovery plan and change In discount rate and assumptions between year-ends. This liabllity represents the present value of the deficit contributions agreed as at the accounting date and has been valued u5in8 the following assurnptions set by reference to the duratlon of the deficit recovery payments.. December 2021 De￿rnber 2020 December 2019 Discount rate 1.5% 0.0% 0.0% The legal Structure of the stheme is such that if another employer fails, the employer could become responsible for paying a share of that employerfs pension liabilities. Teachers, penslon scheme ITPSI The PDBF rnade contributions to the TPS on behalf of 3 employees who had previously been teachers. The TPS is a statutory, tontributory, defined benefit scherne, governed by the Teachers, Penslons Regulations120101 and, from l April 2014, by the Teachers, Pension Scheme Regulations 2014. Membership is automatic for full- time teachers and from l January 2007, automatlcfor teachers in part-tlme employment following appointment or a change of etsntract, although they ae able to opt out. The TPS is an unfunded scheme and members contribute on a 'pay as you go. basis, these contributions altsn8 with those made by employers are credited to the Exchequer. Retirement and other pension benefits are paid by public funds provided by Parliament. Not less than every four years the Government Actuary, using normal actuarial principles, conducts a formal actuarial revlew of the TPS in accordance with the Public Service Pensions Ivaluations and Ernployer Cost Capl Direction5 2014 published by HM Treasury. The aim of the review is to specify the level of future contributions. Actuarial scheme valuation5 are dependent on assumption5 about the value of future costs, deslgn of benefits and many other factors. The latest actuarial valuation of the TPS was carried out as at 31 March 2017 and full details are available on the Government website at.. htt www. ov.uk overnment teachers- nsion-scheme 25 RELATED PARTY TRANSACTIONS The Portsmouth Diocesan Council for Social Responslbility IPDCSRI is a separate charitable limited company. Staff engaged In the activities of POCSR are employed by the PDBF and a contribution towards thèir staff costs was made by the PDCSR for E126,65212020.. £102,732). The POBF has also supported the work of the PDCSR for several years and in 2021 provided free use of office space, and IT Cloud functionality. 56

PORTSMOUTH DIOCESAN 80ARD OF FINANCE NOTESTO THE FINANCIAL STATEMENTS For the year ended 31 December 2021 26 FUNDS HELD AS CUSTODIAN TRUSTEE The PDBF acts as Diocesan Authority or custodian trustee for many trust fund5 by virtue of the Parochial Church Councils IPowersl Measure 1956 and the Incumbents and Churchwardens (Trusts) Measure 1964 where the mana8lng trustees are parochial church counclls and others. Assets held in thls way arè noi aggregated in these financial statements as the POBF does not control them. The financial asset5 held in this way may be 5ummarised as follows.. 2021 2020 CBF Investment Fund Income shares CBF Investment Fund accumulation shares CBF Property Fund income shares CBF Global Equity Fund CBF Flxed Interest Securltles Fund Shares CBF COIF Investments Other unit trust unit5 UK Equity holdirigs UK GSlt-edged stocks Other Flxed Interest stod< Foreign Equitles Deposits & Cash at Bank Net Creditor5 Total assets held as custodian trustee 6.431222 809,396 829,543 314,910 625.672 196,901 17,490 14,161 79,32D 10,318 8,518 1,484,759 12,7801 10,820,430 S.603.830 80,455 743.779 271,CX)3 669,323 210.659 15.127 12,458 79,320 8,137 7,482 L755,219 12,7801 9,454,011 57