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2020-12-31-accounts

Annual Report and Financial Statements 2020

Norwich Diocesan Board of Finance Limited Supporting the mission and ministry of the Diocese of Norwich

www.dioceseofnorwich.org

THE NORWICH DIOCESAN BOARD OF FINANCE LIMITED (A company limited by guarantee)

REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED

INDEX

Page
Reference and Administrative Information 2
Summary Information about the Structure of the Church of England 3 – 4
Chairman’s Statement 5 – 7
The Executive Committee and Directors’ Report
incorporating the Strategic Report 8 – 17
Independent Auditor’s Report 18 – 19
Consolidated Statement of Financial Activities 20
Consolidated Summary Income and Expenditure Account 21
Consolidated Balance Sheet 22
Consolidated Cash Flow Statement 23
Notes to the Accounts 24 – 48

1 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED

REFERENCE AND ADMINISTRATIVE INFORMATION

Executive Committee
(Board of Directors) Mark Jeffries (Chairman)
as at 27 April 2021 The Revd. Michael Asquith
Robin P. Back
The Ven. Steven J. Betts
Ray Hollands
Kandara Kammoun
Susan Martin
Patricia Menaul
Captain Anthony M. Poulter OBE RN
The Revd. Dr Patrick Richmond
Angela Robson
The Revd. Canon Simon Stokes
The Revd. Jeremy G. Sykes
Julian Taylor
The Rt. Revd. Graham Usher
Diocesan Secretary (Chief Executive) Richard M. Butler MBE DL
Interim Diocesan Secretary Rosemary Pearce
Director of Finance Susan E. Bunting BFP FCA
Registered Office Diocesan House, 109 Dereham Road, Easton, Norwich,
NR9 5ES
Company Registration Number 88175
Charity Registration Number 249318
Auditor Lovewell Blake LLP, Bankside 300, Peachman Way,
Broadland Business Park, Norwich, NR7 0LB
Bankers Barclays Bank plc, London Street, Norwich, NR2 1HS
Insurers Ecclesiastical
Insurance		 Group,
Beaufort
House,
Brunswick Road, Gloucester, GL1 1JZ
Solicitors Birketts LLP, Kingfisher House, 1 Gilders Way, Norwich,
NR3 1UB
Anthony Collins Solicitors LLP, 134 Edmund Street,
Birmingham. B3 2ES
Investment Advisors and Barratt and Cooke Ltd, 5/6 Opie Street, Norwich
Stockbrokers NR1 3DW
CCLA Investment Management Limited, 80 Cheapside,
London EC2V 6EE
JM Finn & Co, 4 Coleman Street, London, EC2R 5TA
Eskmuir Group, 8 Queen Anne Street, London, W1G 9LD

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 2

NORWICH DIOCESAN BOARD OF FINANCE LIMITED

SUMMARY INFORMATION ABOUT THE STRUCTURE OF THE CHURCH OF ENGLAND

The Church of England is organised as two provinces; each led by an archbishop (Canterbury for the Southern Province and York for the Northern). Each province comprises of dioceses of which there are 42 in England.

Each diocese in England is divided into parishes. Each parish is overseen ecclesiastically by a parish priest if not an ‘incumbent’ (usually called a vicar or rector). From ancient times through to today, they and their bishop are responsible for the 'cure of souls' in their parish.

Her Majesty the Queen, who is the Supreme Governor of the Church of England, appoints archbishops, bishops and deans of cathedrals on the advice of the Prime Minister. The two archbishops and 24 senior bishops sit in the House of Lords.

The Church of England is episcopally-led (there are some 108 bishops (including Diocesan Bishops and Assistant and Suffragan Bishops). It is governed by General Synod as its legislative and deliberative body at national level, making decisions on matters of doctrine, the holding of church services and relations with other churches. General Synod passes measures which, if accepted by Parliament, have the effect of Acts of Parliament. It is made up of three groups or houses of members: the Houses of Bishops, of Clergy and of Laity, and meets in London or York at least twice annually to consider legislation for the broader good of the Church.

The three National Church Institutions

The Archbishops' Council, the Church Commissioners and the Church of England Pensions Board are sometimes referred to as the three National Church Institutions.

The Archbishops' Council was established in 1999 to co-ordinate, promote, aid and further the mission of the Church of England . Its task is to give a clear sense of direction to the Church nationally and support the Church locally by acting as a policy discussion forum.

The Church Commissioners manage the historic assets of the Church of England, today spending most of their income on pensions for the clergy. The costs of episcopal administration through the diocesan and suffragan bishops are met by the Church Commissioners.

The Church of England Pensions Board was established by the Church Assembly in 1926 as the Church of England's pensions authority and to administer the pension scheme for the clergy. Subsequently it has been given wider powers, in respect of discretionary benefits and accommodation both for those retired from stipendiary ministry and for widow(er)s of those who have served in that ministry, and to administer pension schemes for lay employees of Church organisations.

The Pensions Board, which reports to the General Synod, is trustee of a number of pension funds and charitable funds. Whilst the Church has drawn together under the Board its central responsibilities for retirement welfare, the Board works in close cooperation both with the Archbishops' Council and with the Church Commissioners.

The Cathedral

The Cathedral is the mother church of the diocese and legally is constituted as a separate charity currently exempt from Charity Commission registration and supervision. Copies of its trustees’ report and financial statements may be obtained from the Cathedral Office, the Cathedral, Norwich.

The information about General Synod, the Church Commissioners, the Archbishops’ Council and Norwich Cathedral is included as background only. The financial transactions of these bodies do not form part of these financial statements.

3 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED

SUMMARY INFORMATION ABOUT THE STRUCTURE OF THE CHURCH OF ENGLAND (continued)

The Diocese

Diocesan Synod

The statutory governing body of the diocese is the diocesan synod which is elected with representation from across the diocese. The Synod has broadly equal numbers of clergy and lay people meeting together in Diocesan Synod with the diocesan bishops and archdeacons. Its role is to:

Deanery Synod

Deanery Synod has two houses, laity and clergy, and its role is to:

The Bishop’s Council

Under the constitution of the Diocesan Synod, Bishop’s Council has the following functions:

Parochial Church Council (PCC)

The PCC is the elected governing body of an individual parish which - broadly - is the smallest pastoral area in the Church of England. Typically each parish has one parish church. The PCC is made up of the incumbent as chair, the churchwardens and a number of elected and ex officio members. Each PCC is a corporate charity, and all those not exceeding £100,000 annual gross income are currently excepted from registration with the Charity Commission. Except where shown, the transactions of PCCs do not form part of these financial statements. Financial statements of an individual PCC can be obtained from the relevant PCC treasurer.

Parishes

A benefice is a parish or group of parishes served by an incumbent in holy orders who as such is a Church beneficiary and typically receives a stipend and the benefit of free occupation and use of a parsonage house at the behest of the Bishop for the purpose of carrying out specified spiritual duties.

A deanery is a group of parishes over which a rural dean has oversight and an archdeaconry is a group of deaneries for which an archdeacon is responsible.

The diocese is then the principal pastoral and, by means of its Board of Finance, financial and administrative resource of the Church of England, encompassing the various archdeaconries under the spiritual leadership of the Diocesan Bishop.

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 4

CHAIRMAN’S STATEMENT IN ANNUAL REPORT 2020

On 20 March 2021 I assumed a role in which Bill Husselby has invested much time and effort. He has been DBF Chair for the last eight years and was first appointed to the DBF in 2007. The Diocese owes him an enormous debt of gratitude as Bishop Graham made clear when he paid tribute to Bill’s contribution at Diocesan Synod on 20 March.

I am fortunate to be taking over from Bill when a new governance structure has been agreed and after the peer review, deployment review and central services review have been undertaken. Together they point to a very clear direction of travel and are enormously helpful in setting the agenda for the future as the DBF looks to support the delivery of the Vision for the Diocese of Norwich 2021-2026: Transformed by Christ: prayerful, pastoral and prophetic . I have been struck by the enthusiasm and energy which the new vision has generated and the widespread recognition that the governance changes should lead to improved decision-making as the Diocese looks to tackle its pre and post pandemic challenges.

In 2020 the Diocese received a total of £6.160m in Parish Share, 77.28% of the £7.972m requested and a shortfall of £1.812m. This compares with a total received in 2019 of £7.086m which was 89.54% of the request. Inevitably, the decrease of £926k (13.07%) is attributable to the challenging circumstances created by the pandemic and we are grateful for the huge efforts made by parishes to minimise the shortfall.

Our operating deficit for 2020, excluding year end pension scheme revaluations, property sales and subsidiary company results, is £708k. The details are set out on page 7 in the appendix to this report. The Executive Committee Report on pages 12 and 13 sets out the various steps taken to secure extra income and to achieve cost savings. These mitigated against what could have been a significantly larger deficit and include:

Thanks are due to all those who have worked tirelessly to ensure that our expenditure has been kept to a minimum. The impact on staff of being furloughed and those working extremely hard throughout has not gone unnoticed.

Our income from investments has decreased by £79k.

At the 31 December 2020 our share of the deficit on the national clergy pension scheme was £614k, a reduction of £499k from the deficit of £1.113m at 31 December 2019. These large adjustments, required by accounting regulations, along with other pension scheme adjustments for the closed Diocesan Staff pension scheme make the operating results difficult to read. We have therefore included a summary of the operating position excluding these items on page 7. Full details of the pension costs are shown in note 28, on pages 39 to 42.

The value of net assets at 31 December 2020, excluding the contribution from trading subsidiaries, is set out in note 38 on page 48 and amounts to £145.5m, or £146.1m excluding the clergy pension scheme liability. Our fixed assets, comprising houses, glebe land and an investment portfolio, equate to £143.8m, which leaves £2.3m liquidity to run the Diocese on a day to day basis. We have taken a strategic approach to the use of our restricted funds, utilising the Stipends Fund to pay stipends in their entirety in 2020, rather than apportioning some costs to general funds as in previous years. This has enabled us to release some free reserves and add some security to our very volatile cash flow position.

5 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

CHAIRMAN’S STATEMENT IN ANNUAL REPORT 2020

During the year, we have continued to develop our trading subsidiaries, Spire Support Services Limited and Norwich Glebe Property Limited, the results of which are shown in note 33 on pages 44 and 45 of these financial statements. These companies were formed to provide alternative sources of income for the Diocese and relieve the pressure on Parish Share. Both generate a profit which is transferred to the Diocese under the corporate gift aid scheme. The first lockdown in 2020 had a significant impact on building services, hence the reduction in profits from Spire Support Services Limited, but we are seeing an upturn in work during 2021. The Job Retention Scheme was also utilised for staff employed by Spire Support Services Limited.

The value of our investment portfolios decreased at 31 December 2020, by £924k. Since the balance sheet date, the value of the portfolios has recovered by 0.4%.

As we emerge from the pandemic and activities resume, we have to recognise that future predicted deficits are not sustainable. In addition to the deployment review of our clergy posts which aims to reduce stipendiary clergy numbers by 10 per cent, we have also undertaken a full central services review of functions performed by diocesan lay staff, with a view to making substantial permanent cost savings for the future. The outcome of this review will be known later this year. I am acutely aware that these reviews cause additional strain and worry which we must do our best to minimise.

Amongst the various financial challenges are several opportunities. Examples include:

There is also a wider question as to whether an improved return could be generated on the Diocese’s investments by changing the balance across the portfolio.

The pandemic has delayed our Church Planting and Revitalisation Project. The Diocese was awarded £1.98m in 2019 towards the project out of the Archbishops’ Council’s Strategic Development Fund. The project aims to create ten new, or revitalised, churches across Norfolk and Waveney. Teams of church and worship leaders, sports ministers and others will be appointed to areas where research shows the church can help to local needs and better support communities. The project seeks to reach both rural and urban areas, engaging with young people and families by focusing on areas of population around secondary school catchment areas. The hope is that the life of the project can be extended as lockdown is lifted.

I end with two notes of thanks. First to Richard Butler who, following a period of ill health, and having reached 65, has decided to step down from his post as Diocesan Secretary (Chief Executive) on 30 April 2021. Richard has served the Diocese of Norwich for over 11 years and has done much over that time to support the mission and ministry of the Church of England to the people of Norfolk and Waveney. We wish him well, thank him for all that he has contributed and pray for his renewed health in the months and years ahead. Secondly, on behalf of the Executive Committee, I pass on huge thanks to all the Diocesan staff for everything they have achieved in the most difficult circumstances of the last 12 months. We are very grateful.

MARK JEFFRIES

27 April 2021

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 6

APPENDIX TO CHAIRMAN'S STATEMENT IN ANNUAL REPORT 2020

The table below summarises the main features of the year and my explanation of them. The figures are extracted from note 37 on page 47 of the financial statements and are prior to the consolidation of Subsidiaries.

Board
2020
£'000
Income
11,619
Expenditure
(11,769)
Operating (deficit)/surplus
(150)
Realised gains on sale of properties -Board
272
Net income
122
Adjustment of value linked loans
(38)
Actuarial (loss)/gain on defined benefit pension scheme
(308)
Gains on investment assets:
Sale of glebe property (realised gains)
62
Quoted and unquoted investments
Realised
(361)
Unrealised
320
(203)
122
(505)
(53)
(Decrease)/increase in funds
Reconciliation of Management accounts operating position
Net income (shown above)
FRS102 Pension disclosure - Clergy Scheme
FRS102 Pension disclosure - Company Scheme
Realised gains on sale of properties -Board
(272)
Operating deficit
(708)		 Board
2019
£'000
12,099
(11,792)
307
257
564
(1)
1,734
93
8
2,154
4,552
564
(450)
(186)
(257)
(329)		 Variances
£'000
(480)
23
(457)
15
(442)
(37)
(2,042)
(31)
(369)
(1,834)
(4,755)
(442)
(55)
133
(15)
(379)

7 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

THE EXECUTIVE COMMITTEE AND DIRECTORS’ REPORT INCORPORATING THE STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2020

The Executive Committee, who are also directors for the purposes of company law, present their combined trustees’ and directors’ report and strategic report together with the audited financial statements, for the year ended 31 December 2020.

The financial statements have been prepared in accordance with the accounting policies set out in the notes to the accounts and comply with the charity’s governing document, the Charities Act 2011, and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland published in October 2019.

Objectives

Norwich Diocesan Board of Finance Limited aims to promote, facilitate and assist with the work and purposes of the Church of England for the advancement of the Christian faith in the Diocese of Norwich and elsewhere, providing resources for Ministry and Mission. These activities have been undertaken during the year and there have been no significant changes in its policies.

Structure, governance and management

The Diocese of Norwich was founded in 1094 and took broadly its present form in 1906. It covers an area of 1,804 square miles. The approximate population is 905,000 and the demographics are as follows: the diocese is the 8[th] largest in England in geographical area but only 33[rd] in terms of density of population. The city of Norwich (total population around 135,000) is the area’s key centre of economic activity. Apart from Norwich there are four other significant conurbations which spread around the periphery: Kings Lynn, Great Yarmouth, Lowestoft and Thetford. The rural areas contain a scattered population living in communities ranging from market towns (of which Norfolk has many, most of them growing) to smaller villages and remote hamlets.

The Diocese is arranged in three archdeaconries being Norwich, Thetford and Lynn. In total there are some 560 parishes.

Diocesan governance

The Diocese is governed by Standing Orders approved by Diocesan Synod. Its statutory governing body is the Diocesan Synod, which is an elected body with representation from all parts of the Diocese. Membership consists of ex officio members, including the Bishops and Archdeacons, clergy members elected by the houses of clergy in Deanery Synods, lay members elected by the house of laity in Deanery Synods, up to five persons who may be coopted by the house of clergy or the house of laity and a maximum of ten members nominated by the Diocesan Bishop. The Diocesan Synod normally meets three times a year. Many of Diocesan Synod’s responsibilities have been delegated to the Standing Committee which is the Bishop’s Council.

Company status

The company, Norwich Diocesan Board of Finance Limited, is established to manage the financial affairs, and hold legal title to the assets, of the Diocese of Norwich. It was incorporated on 28 March 1906 as a charitable company limited by membership guarantee (No. 88175), and its governing documents are the Memorandum and Articles of Association (as amended on 28 April 1970, 5 May 1970 and 19 June 2010). Norwich Diocesan Board of Finance Limited is registered with the Charity Commission (No. 249318).

Every member of Diocesan Synod is a member of Norwich Diocesan Board of Finance Limited for company law purposes and has a personal liability limited to £1 under their guarantee as company members in the event of its being wound up.

Decision-making structure

Within the supervisory powers of the Diocesan Synod, as listed below, certain diocesan functions (those italicised below) are currently undertaken by the Executive Committee in pursuit of Norwich Diocesan Board of Finance Limited’s charitable Objects:

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 8

REPORT OF THE EXECUTIVE COMMITTEE (INCORPORATING STRATEGIC REPORT) OF

THE NORWICH DIOCESAN BOARD OF FINANCE LIMITED - continued

Structure, governance and management (continued)

The Executive Committee has delegated responsibility for the day-to-day management of the Board to the Diocesan Secretary who is supported by a senior management team and their staff.

All members of the Executive Committee give their time voluntarily and receive no benefits from the Board. During the year Norwich Diocesan Board of Finance Limited made contributions to the Church Commissioners towards the stipends, national insurance and pension contributions of the licensed clergy who are Executive Committee members and provided houses, including the payment of council tax and maintenance costs, as part of normal clergy remuneration.

Committee structure

There are a number of Diocesan Synod committees that, though not sub-committees of Norwich Diocesan Board of Finance Limited, can influence the operations of the Board. During 2020 a full review of governance structures was carried out which will result in a revised structure later in 2021, as approved by Diocesan Synod on 20 March 2021.

Those that follow are statutory committees:

Property Committee, which is responsible for overseeing policy and making major decisions concerning the management of parsonage houses in each benefice, including implementing the policy for buying, repairing, maintaining and disposing of all parsonage houses, team vicarages and houses owned by the Board. This Committee’s work is now included in the mainstream work of the Property Executive which is a sub-committee of the Executive Committee of the Norwich Diocesan Board of Finance Limited.

Glebe Committee , which is responsible for overseeing policy and making major decisions concerning the management of glebe property and investments for the benefit of the Diocesan Stipends Fund of the Diocese of Norwich.

Diocesan Advisory Committee , which advises the Chancellor on matters affecting churches and places of worship such as the granting of faculties, architecture, archaeology, art and the history of places of worship, the use and care of places of worship and their contents and the care of churchyards.

Mission and Pastoral Committee, is responsible for pastoral reorganisation taking account of finance, clergy numbers and new patterns of ministry. The Committee advises the Bishop on Bishop’s Mission Orders and is also responsible for church buildings other than the work of the DAC. This Committee’s work is now included in the mainstream work of the Bishop’s Council.

In addition to the statutory committees, currently there are also the following committees:

Investment Policy Group, which is responsible for determining policy and making major decisions concerning the management of the consolidated investment portfolio in order to gain the best return from these assets to help sustain the ministry of the Church, without undue risk.

Asset Management Committee, which works closely with the Property committee, Glebe committee and Investment Policy Group to manage the extensive property portfolio in order to improve the quality of the existing housing stock and make best use of the assets to generate additional revenue.

Audit Risk and Assurance Committee, which reviews the work, policies and procedures of the Board, to ensure integrity in all its activities, and compliance with legal, financial and reporting requirements, and to have oversight of risk management processes.

9 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

REPORT OF THE EXECUTIVE COMMITTEE (INCORPORATING STRATEGIC REPORT) OF

THE NORWICH DIOCESAN BOARD OF FINANCE LIMITED – continued

Structure, governance and management (continued)

Nominations Committee, which is responsible for making recommendations for new appointments to all boards and committees.

Remuneration Committee, which is responsible for remuneration policy, staff complement decisions and salaries for senior roles.

Recruitment and appointment of Executive Committee

The Executive Committee members listed on page 2 are the directors of the company for the purposes of company law and in accordance with the Articles of Association shall be the following persons:

Induction and training of Executive Committee

The Executive Committee is aware of the 2011 Charities Act requirement to ensure that all members receive appropriate induction and training. Periodically members attend talks on charity governance.

Remuneration of key management personnel

Emoluments of higher paid personnel, including the Diocesan Secretary, are determined by the Remuneration Committee. All employees including key management personnel have regular appraisals and remuneration is based on salary scales which are regularly benchmarked and reviewed.

Related parties/Connected charities

Norwich Diocesan Board of Finance Limited has to comply with Measures passed by the General Synod of the Church of England and is required to make certain annual payments to the Archbishops’ Council towards the running costs of the National Church. The stipends of the Diocesan and Area Bishops are borne by the Church Commissioners.

In pursuit of its charitable objectives, the Board acts as agent for a number of Diocesan Boards including the Board of Education, the Board for Social Responsibility and the Ministry division.

The Diocese of Norwich Education and Academies Trust, St Benet’s Multi-academy Trust and The Diocese of Norwich Education Support Company are connected charities/company of the Norwich Diocesan Board of Finance Limited. Church academies have a clause written into their funding agreements which requires the Academy Trust to ensure that the quality of Religious Education and the contents of the Academy's collective worship are given in accordance with the tenets and practice of the Church of England.

The Diocese of Norwich Churches Trust was established during 2015 and is a connected charity of the Norwich Diocesan Board of Finance Ltd. This is a Charitable Incorporated Organisation (CIO) set up to relieve incumbents and PCC members with very small congregations, from the burden and responsibility of the Churches running costs, this became active during 2017.

In addition the Board acts as managing or custodian trustee for approximately 1,800 Parish and other religious trusts which hold property and investments. All trust assets are recorded and maintained separately from the Board’s own assets. It also co-operates with and provides advice to Parochial Church Councils, the Chapter of Norwich Cathedral, the Horstead Centre and other church bodies.

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 10

REPORT OF THE EXECUTIVE COMMITTEE (INCORPORATING STRATEGIC REPORT) OF

THE NORWICH DIOCESAN BOARD OF FINANCE LIMITED – continued

Structure, governance and management (continued)

The Board is required by Measure to be custodian trustee in relation to Parochial Church Council property, but has no control over Parochial Church Councils, which are independent charities. The accounts of Parochial Church Councils and deaneries do not form part of these financial statements.

Parochial Church Councils are able to influence the decision-making within Norwich Diocesan Board of Finance Limited and at Diocesan Synod level through representations to those bodies and through the input of their Deanery Synods.

Pension scheme

Norwich Diocesan Board of Finance Limited is the sponsoring employer of the Norwich Diocesan Board of Finance Pension Scheme. This is a pension fund for the benefit of employees of Norwich Diocesan Board of Finance Limited. One trustee of the scheme is an employee of the Board and member of the scheme. The scheme has been closed to new entrants. Costs of administration and secretarial services are borne by the Board.

The Board also participates in the Church of England Funded Pension Scheme. Further details are contained in note 28 to the financial statements.

Subsidiary undertakings

The Board’s subsidiaries are considered to be The Diocese of Norwich Consolidated Education Endowments (formerly Schemes under Section 554 of the Education Act 1996) and certain trusts over which the Board has absolute discretionary control and of which it is a beneficiary. The Board has three trading subsidiaries, Spire Support Services Limited, Norwich Glebe Property Limited and NDBF Easton Limited (see note 33).

Strategic Report - Key performance indicators are shown in the relevant sections of this report.

a) Activities, Benefits and Achievements

Norwich Diocesan Board of Finance Limited’s strategy for achieving its objectives is to maintain the sound financial structure needed to enable it to continue supporting the clergy through the payment of stipends, managing parsonages and other ministerial housing and also by providing other facilities and resources in support of the ministry of both clergy and lay people in parishes across the Diocese.

The key activities may be summarised as:

Public benefit

The Executive Committee is aware of the Charity Commission’s guidance on public benefit in The Advancement of Religion for the Public Benefit and have had regard to it in their administration of the Board. The Executive Committee believes that, by promoting the work of the Church of England in the Diocese of Norwich, the Board helps to promote the whole mission of the Church (pastoral, evangelistic, social and ecumenical) more effectively, both in the diocese as a whole and in its individual parishes, and that in doing so it provides a benefit to the public.

Norwich Diocesan Board of Finance Limited supports the clergy through the payment of stipends, the management of parsonages, and clergy training. This provides a benefit to members of the general public in each parish. The Church also carries out marriages, baptisms and funerals which are attended by the general public and enriches local communities by the provision of other services across the Diocese.

The Board of Education provides support services and capital expenditure support for schools and academies, thus benefiting the pupils, and the improvement of the buildings benefits the local community.

Norwich Diocesan Board of Finance Limited also makes grants to connected charities and to other charitable projects in support of the above objectives.

11 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

REPORT OF THE EXECUTIVE COMMITTEE (INCORPORATING STRATEGIC REPORT) OF

THE NORWICH DIOCESAN BOARD OF FINANCE LIMITED - continued

a) Activities, Benefits and Achievements (continued)

The benefits outlined above are related to the aims of the Diocese in helping to promote, carry on and assist the work of the Church of England in the Diocese of Norwich and elsewhere, providing resources for Ministry and Mission. They also relate to a large section of the general public whose opportunity to benefit is not unreasonably affected by geographical or financial restrictions.

Achievements and performance

Plans and achievements for 2020

The COVID-19 pandemic had a significant impact on plans for 2020. The government instructed all places of worship to close in March 2020, with gradual re-opening permitted for individual worship during June 2020. The impact of the closure saw parish incomes fall, most noticeably from cash collections, fundraising activities and premises hire, along with parochial fee income from weddings. This in turn has impacted on the ability to pay parish share.

The financial impact on Norwich Diocesan Board of Finance Ltd was in several areas, parish share, investment income, along with a fall in capital values. The Board of Finance enacted immediate expenditure savings, most notably in respect of housing costs, where only emergency/essential repairs were carried out. 32 staff members (50%) were furloughed under the government job retention scheme.

A review of clergy deployment and expenditure was led by the Bishop of Thetford and is currently being implemented.

Achievements during the year were:

Operational performance

Norwich Diocesan Board of Finance Limited received 77.3% of parish share requested for the year of £7.972m a shortfall of £1.812m. The Trustees believe around £1 million of this is a direct impact of the COVID-19 pandemic. This is a decrease of £926k or 13.07% when compared with 2019 receipts.

The operating deficit at company level for 2020 is £708k (after adjusting for FRS102 pension adjustments and nonoperational property surpluses).

Steps taken to mitigate the level of deficit were:

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 12

REPORT OF THE EXECUTIVE COMMITTEE (INCORPORATING STRATEGIC REPORT) OF

THE NORWICH DIOCESAN BOARD OF FINANCE LIMITED – continued

Achievements and performance (continued)

Investment performance – overall performance

The overall value of Diocesan investment assets decreased by £927,000 during 2020, as compared with a increase of £2,217,000 in 2019.

In 2020 the operational activities of the Diocese were financed by £606,000 from interest and dividends (2019: £714,000).

Glebe investments

£37.1 million of the Board’s investments are in glebe land, primarily to generate a sustainable income to continue funding clergy stipends.

Rents receivable amounted to £827,000 (2019: £798,000).

Investment in equity and fixed interest funds were valued at £10.7 million at 31 December 2020 (2019: £11.1 million) The unrealised gain in the value of investments during the year amounted to £93,000 (2019: unrealised gain £1,174,000). Dividends and interest receivable amounted to £379,000 (2019: £426,000).

General and other fund investments

Other investments are held on behalf of restricted and general funds. The policy with these investments is to safeguard capital and to achieve capital growth. Investment in equity and fixed interest funds were valued at £8.1 million at 31 December 2020 (2019: £8.7 million), a decrease of £0.6m or 6.9%. Dividends and interest receivable amounted to £227,000 (2019: £266,000).

Value linked loans

As detailed in note 18, freehold property subject to value linked loans comprises freeholds where loans have been received from Church Commissioners or Parochial Church Councils towards the capital expenditure and as part of the agreement all or part of the sale proceeds are repayable on final disposal. The Board is committed to repay the outstanding value linked loans in the short term as funds become available. Total value linked loans at 31 December 2020 were £353,000 (2019: £511,000).

Statutory functions

Norwich Diocesan Board of Finance Limited has responsibility for the management of glebe property and investments to generate income to support the cost of stipends. It is the Diocesan authority for parochial and other trusts and incorporates the functions and responsibilities of the Diocesan Parsonages Board. The trustees are custodian trustees in relation to PCC property.

Grant-making (beneficiary-selection) policy

Grants are made to the National Church to cover a proportion of its central costs and also to cover the cost of training for ministry. Grants are paid to other connected charities and to other charitable projects which appear to the Board to support the furtherance of Norwich Diocesan Board of Finance Limited’s objects.

Volunteers

Norwich Diocesan Board of Finance Limited is dependent on the huge number of people involved in church activities both locally and at diocesan level. We believe that the number of active volunteers (or volunteer hours) given to the mission and ministry of the church is a key indicator of the health of a church.

13 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

REPORT OF THE EXECUTIVE COMMITTEE (INCORPORATING STRATEGIC REPORT) OF

THE NORWICH DIOCESAN BOARD OF FINANCE LIMITED – continued

Achievements and performance (continued)

The service provided to a community through church volunteering also has a significant impact on people’s relationship to the church particularly at times of crisis. Within this context, the Executive Committee greatly value the considerable time given by all the volunteers across the diocese in pursuit of the mission of the Norwich Diocesan Board of Finance Limited.

b) Financial review

The results for the year shown in the Statement of Financial Activities on page 20 and the year end position shown in the balance sheet on page 22 are considered to be satisfactory. Results and highlights for the year and future prospects are given in the Chairman's Statement on pages 5 to 7.

Financial performance

Income before revaluation adjustments totalled £12.3 million (2019: £12.8 million) and expenditure amounted to £12.3 million (2019: £12.3 million).

The Statement of Financial Activities (SOFA) for the year shows net expenditure of £28,000 (2019: net income £488,000) before net gains and losses on the revaluation of investments and fixed assets and on the sale of investment assets, and actuarial losses on the defined benefit pension scheme.

The accounts show a decrease in the balance sheet total of £322,000.

The Norwich Diocesan Board of Finance Ltd share of the Church of England Pension Scheme defined benefit funding deficit at 31 December 2020 was £614k (2019: £1.113m) see note 28 to the financial statements.

During the year, total fund balances remained at £148 million.

Principal funding sources

Around 53% of the income of the Board comes from the Parish Share, 11.7% from Archbishops’ Council for Low income Communities and transition funding,12.2% from investment income (including glebe rent), and 5.4% from statutory fees.

Going concern

After making enquiries the Executive Committee are satisfied that Norwich Diocesan Board of Finance Limited has adequate resources to continue to operate as a going concern for the foreseeable future and have prepared the financial statements on that basis.

Investment policy

The Board’s aim is to gain the best return from their assets to help sustain the ministry of the Church, without undue risk. Their portfolio includes fixed interest, bank and stock market investments, freehold properties and glebe land.

The Executive Committee have delegated the functions and duties in relation to Investment Management to the Investment Policy Group (IPG). The members of the IPG are appointed by the Executive Committee and are made up of a number of Executive Committee members and advisors who are reasonably believed, by the Executive Committee, to be qualified by ability and practical experience in matters relating to investments. The members of the IPG are guided by the best practice advice issued by the Charity Commission for the investment of Charitable Funds.

The Board’s investment policies are based on two key policies:

Long-term responsibilities and growth – the Executive Committee are aware of their long-term responsibilities and as a result follow a correspondingly prudent approach to investment decisions. Investment policy for long term funds is aimed primarily at generating a sustainable income with due regard to the need for the preservation of capital value and the possible need to realise investments to meet operational needs.

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 14

REPORT OF THE EXECUTIVE COMMITTEE (INCORPORATING STRATEGIC REPORT) OF

THE NORWICH DIOCESAN BOARD OF FINANCE LIMITED – continued

Financial review (continued)

Glebe investments are held or the purpose of raising income to achieve the maximum contribution possible to clergy stipends on an on-going basis. The overall aim is for a return of RPI plus 3%.

Ethical investment – the Executive Committee adopt an ethical investment policy that follows the Church of England Ethical Investment Advisory Group (EIAG) guidelines, this includes ensuring that investments are held in companies which have high standards of corporate governance and act in a responsible way towards stakeholders.

Reserves policy

Norwich Diocesan Board of Finance Limited has considerable responsibilities including the remuneration of up to 180 parochial stipendiary clergy, the upkeep of approximately 260 houses, and the employment of 50 (f.t.e) full or part time staff, and it is therefore essential that the Board carries an appropriate level of reserves to meet these responsibilities.

The free reserves of the Board at 31 December 2020, comprising the income funds freely available for general purposes (and which are not yet spent, committed or restricted) amounted to £2.8 million as compared with £1.1 million at the end of the previous year. Free reserves include free designated reserves of £152,000.

The Executive Committee have reviewed the reserves policy and continues to aim to build up the free reserves to approximately £3 million being four and a half months expenditure within the Capital and General fund and designated funds.

As stated in note 27, the Diocesan Secretary is sanctioned by the Bishop of Norwich to use monies from the Benefice Buildings and Pastoral Fund - this is mainly called upon when there are insufficient resources within the General Fund. The Benefice Building and Pastoral Fund is regarded as an expendable endowment (a restricted fund). The investments and net current assets within this fund at 31 December 2020 amounted to £2.5 million (2019: £2.4 million).

Total other restricted funds excluding tangible assets and long-term liabilities at 31 December 2020 amounted to £54 million (2019: £58 million).

c) Plans for the future

The Board of Finance has sufficient reserves to conclude that going concern is not an immediate concern but the Trustees recognise that in order to support our parishes in recovering from the pandemic, the activities of the Board of Finance must be reviewed.

In 2021 the Board plans to do the following:

15 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

REPORT OF THE EXECUTIVE COMMITTEE (INCORPORATING STRATEGIC REPORT) OF

THE NORWICH DIOCESAN BOARD OF FINANCE LIMITED – continued

d) Principal Risks and Uncertainties

The Executive Committee confirm that the major risks to which Norwich Diocesan Board of Finance Limited is exposed, as identified by the Executive Committee and staff, have been reviewed and that systems and procedures have been established to manage those risks. Risks are reviewed and managed as part of the risk management strategy.

A risk register has been compiled covering potential governance and management risks, operational risks, financial risks, environmental/external risks, and compliance risks. Potential risks are explained with their likely impact, and procedures to mitigate the risks are listed. The Executive Committee review the risk register at least annually as part of the risk management strategy.

The most significant and major financial risk facing the charity remains the shortfall in donations from parishes to the Parish Share as this is the main contribution received to fund the work of the Board. Work continues on an affordable plan for the delivery of the charity’s main objectives in the long term.

A key element in the management of financial risk is the setting of a reserves policy and its regular review by the Executive Committee.

Funds held as custodian trustee for others

The Board is custodian trustee for approximately 1,800 Parish and other religious trusts which hold property and investments. The Board also holds Parochial Church Council property as custodian trustee. Each PCC is a separate charity and the assets are held separately from those of Norwich Diocesan Board of Finance Limited.

Fixed Assets

The movements in fixed assets are set out in notes 18 to 20 in the accounts.

All of the Board’s properties were re-valued at 31 December 2012 in accordance with the Board’s accounting policy at that time, of re-valuing every five years.

The Board has followed the requirements of FRS102, in its accounting treatment for benefice houses (parsonages). FRS102 requires the accounting treatment to follow the substance of arrangements rather than their strict legal form. The Board is formally responsible for the maintenance and repair of such properties and has some jurisdiction over their future use or potential sale if not required as a benefice house, but in the meantime legal title and the right to beneficial occupation is vested in the incumbent. The Executive Committee members therefore consider the most suitable accounting policy is to capitalise such properties as expendable endowment assets and to carry them at their pre-existing balance sheet revaluation as deemed cost. No further revaluations will be performed on these assets.

The Glebe holdings were revalued as at 31 December 2017, in accordance with the policy set out on page 27. Glebe land was valued by FPD Savills, Property Consultants, at market value at 31 December 2017.

Fundraising standards information

The Board supports raising funds from the public in relation to the annual Lent appeal. No professional fundraisers or third party commercial participators are used. The Board is registered with the Fundraising Regulator.

The Diocese employs an Events Coordinator who is monitored on a regular basis and reports to the Chief Executive. The Board is pleased to report that no complaints have been received.

No direct contact is made with the public regarding fundraising activities. All advertising is carried out via Diocesan publications, social media or websites.

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 16

REPORT OF THE EXECUTIVE COMMITTEE (INCORPORATING STRATEGIC REPORT) OF

THE NORWICH DIOCESAN BOARD OF FINANCE LIMITED – continued

Statement of Executive Committee's Responsibilities

The Executive Committee (who are also directors of Norwich Diocesan Board of Finance Limited for the purposes of company law) are responsible for preparing the Report of the Executive Committee and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the Executive Committee to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the charitable company and the group and of the incoming resources and application of resources, including the income and expenditure, of the charitable company and the group for the year. In preparing these financial statements, the Executive Committee are required to:

The Executive Committee is responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. The Executive Committee is also responsible for safeguarding the assets of the charitable company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as the Executive Committee is aware:

The Executive Committee is responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Members of the Executive Committee

Members of the Executive Committee, who are directors for the purpose of company law and trustees for the purpose of charity law, who served during the year and up to the date of this report are set out on page 2. Michael Gurney resigned on 7 January 2021, Hugh Coghill resigned on 1 March 2021, Bill Husselby resigned on 20 March 2021 and Mark Jeffries was appointed on 20 March 2021.

Auditor

A resolution to re-appoint Lovewell Blake LLP as auditor of the Board will be proposed at the Annual General Meeting on 8 June 2021.

The Report of the Executive Committee (incorporating Strategic Report) was approved by the Board on 27 April 2021.

Signed by Order of the Board

ROSEMARY PEARCE, Secretary

17 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE NORWICH DIOCESAN BOARD OF FINANCE LIMITED

Opinion

We have audited the financial statements of The Norwich Diocesan Board of Finance Limited (the ‘parent charitable company’) and its subsidiaries (the 'group') for the year ended 31 December 2020 which comprise the Group Statement of Financial Activities, the Group Summary Income and Expenditure Account, the Group and the Parent Charitable Company Balance Sheet, the Group Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Executive Committee’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s or parent charitable company’s ability to continue as a going concern for a period of at least twelve 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 relevant sections of this report.

Other information

The other information comprises the information included in the report of the Executive Committee, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the report of the Executive Committee. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 18

INDEPENDENT AUDITOR’S REPORT (continued)

Responsibilities of the Executive Committee

As explained more fully in the Trustees’ Responsibilities Statement (set out on page 17), the Executive Committee (who are also the directors of the parent charitable company for the purposes of company law) are responsible for the preparation of the financial statements 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 preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditor’s responsibilities for the audit of the financial statements

We have been appointed auditor under the Companies Act 2006 and report in accordance with this Act.

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

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

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

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditors responsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charitable company’s members, as 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 charitable company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Mark Proctor FCA DChA (Senior Statutory Auditor) For and on behalf of LOVEWELL BLAKE LLP Chartered Accountants & Statutory Auditor Bankside 300, Peachman Way, Broadland Business Park, Norwich, Norfolk NR7 0LB 25 May 2021

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

19 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2020

*** Restricted Funds** *** Restricted Funds** *
Benefice Other
Unrestricted Buildings Stipends Restricted Total Funds Total Funds
Note Funds & Pastoral Fund Funds 2020 2019
£'000 £'000 £'000 £'000 £'000 £'000
Income and endowments from
Donations 2
Parish contributions 6,160 - - - 6,160 7,086
Archbishops' Council 215 - 1,365 518 2,098 1,702
Other donations 339 - - 160 499 513
Charitable activities 3 934 1 4 - 939 861
Other activities 4 507 2 - 377 886 828
Investments 5 74 134 1,206 19 1,433 1,512
Other sources 6 123 149 - - 272 257
Total income 8,352 286 2,575 1,074 12,287 12,759
Expenditure on
Raising funds 7 - - 107 329 436 491
Charitable activities 8 6,523 6 4,472 878 11,879 11,780
Total expenditure 6,523 6 4,579 1,207 12,315 12,271
Net income/(expenditure) before
investment gains 1,829 280 (2,004) (133) (28) 488
Net gains/(losses) on investments 13 (33) 116 (62) 31 52 2,362
Net income/(expenditure) 14 1,796 396 (2,066) (102) 24 2,850
Transfers between funds 15 - - - - - -
Other recognised gains/(losses)
Adjustment of value linked loans 26 (38) - - - (38) (1)
Actuarial (loss)/gain on defined benefit
pension scheme 28 (302) - (6) - (308) 1,734
Net movement in funds 1,456 396 (2,072) (102) (322) 4,583
Reconciliation of funds
Total funds at 1 January 2020 5,290 80,830 59,318 2,553 147,991 143,408
Total funds at 31 December 2020 6,746 81,226 57,246 2,451 147,669 147,991

The fund-analysis of the comparative figures is shown in note 36 to the accounts.

The notes on pages 24 to 48 form part of these accounts.

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 20

NORWICH DIOCESAN BOARD OF FINANCE LIMITED CONSOLIDATED SUMMARY INCOME AND EXPENDITURE ACCOUNT For the year ended 31 December 2020

Total income (note 1 below)
Expenditure
Operating surplus for the year
Interest receivable
Net gains on investment assets
(Deficit)/surplus for the year
Other comprehensive income:
Revaluation of fixed assets
Net assets transferred from endowments
Defined benefit scheme actuarial (losses)/gains
Total comprehensive income for the year		 2020
£'000
12,011
(12,315)
(304)
4
52
(248)
(38)
272
(308)
(322)		 2019
£'000
12,494
(12,271)
223
8
2,362
2,593
(1)
257
1,734
4,583

All income and expenditure relates to continuing activities

Total income comprises £8,227,000 for unrestricted funds and £3,784,000 for restricted funds, including subsidiaries and quasi subsidiaries. A detailed analysis of income by source is provided in the Statement of Financial Activities and notes 2 to 6 to the accounts. Detailed analysis of the expenditure is provided in the Statement of Financial Activities and notes 7 to 12 to the accounts.

The net deficit for the year of £248,000 comprises £1,673,000 net surplus of Unrestricted Funds and £1,921,000 net deficits of Restricted Funds.

The summary income and expenditure account is derived from the Statement of Financial Activities on page 20, which together with the notes to the financial statements on pages 24 to 48, provides full information on the movements during the year on all the funds in the group.

All income and expenditure derives from continuing activities.

Note 1 Reconciliation of Summary Income and Expenditure to Statement of Financial Activities

Total income per page 20
Less interest receivable
Less total endowment additions
Total income per above		 2020
£'000
12,287
(4)
(272)
12,011		 2019
£'000
12,759
(8)
(257)
12,494

The notes on pages 24 to 48 form part of these accounts.

21 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

Company registration number: 88175

NORWICH DIOCESAN BOARD OF FINANCE LIMITED CONSOLIDATED BALANCE SHEET At 31 December 2020

*** Restricted Funds** *** Restricted Funds** *
Benefice Other
Unrestricted Buildings Stipends Restricted 2020 2019
Notes Funds & Pastoral Fund Funds Total Total
£'000 £'000 £'000 £'000 £'000 £'000
Fixed Assets
Tangible assets 18 4,250 78,656 5,792 518 89,216 88,857
Investment assets
Glebe holding 19 - - 37,047 55 37,102 37,105
Investments 20 2,711 4,603 10,744 818 18,876 19,800
6,961 83,259 53,583 1,391 145,194 145,762
Current Assets
Stock 21 - - - 25 25 63
Debtors 22 1,448 23 874 200 2,545 3,162
Pension scheme asset 105 - - - 105 354
Balances with Church
Commissioners - 15 - - 15 -
Central Board of Finance
Deposit Fund 96 302 - 78 476 448
Cash/(overdrawn balance) at bank (908) (2,317) 3,995 4,521 5,291 3,105
Creditors- Amounts 741 (1,977) 4,869 4,824 8,457 7,132
falling due within one year 24 603 56 592 3,287 4,538 2,800
Net Current Assets 138 (2,033) 4,277 1,537 3,919 4,332
Total Assets Less
current liabilities 7,099 81,226 57,860 2,928 149,113 150,094
Creditors- Amounts falling
due after more than one year 25 353 - - 477 830 990
Net Assets excluding pension
scheme liability 6,746 81,226 57,860 2,451 148,283 149,104
Defined benefit pension scheme
liability 28 - - 614 - 614 1,113
Net assets after pension liability 6,746 81,226 57,246 2,451 147,669 147,991
Fund Balances
At 31 December 2020 (page 20) 27 6,746 81,226 57,246 2,451 147,669 147,991

Approved by the Executive Committee on 27 April 2021 and signed on its behalf by

Chair Mark Jeffries …………………….. Interim Diocesan Secretary Rosemary Pearce ……………………..

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 22

NORWICH DIOCESAN BOARD OF FINANCE LIMITED CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 2020

Net cash inflow/(outflow) from operating activities
Cash flows from investing activities
Dividends, interest and rent from investments
Interest paid
Proceeds from the sale of tangible fixed assets
Purchase of tangible fixed assets
Proceeds from the sale of investments
Purchase of investments
Net cash provided by investing activities
Cash flows from financing activities
Loans repaid to the Board
Loans repaid by the Company
Net cash provided by financing activities
Change in cash and cash equivalents in the reporting period
Cash and cash equivalents at 1 January 2020
Cash and cash equivalents at 31 December 2020
Reconciliation of net income to net cash flow
from operating activities
Net (expenditure)/income
Depreciation
Interest paid
Net gain on the sale of fixed assets
Dividends, interest and rent from investments
Decrease in stock
Decrease/(Increase) in debtors
Increase in creditors
FRS 102 Non-cash pension disclosures
Net cash provided by/(used in) operating activities
Analysis of cash and cash equivalents
Cash in hand
Notice deposits (less than 3 months)
Reconciliation of net cash flow to movements in net debt
Change in cash and cash equivalents in the reporting period
Cash flow from decrease in debt
Increase/(decrease) in net debt in the reporting period
Net debt at 1 January 2020
Net debt at 31 December 2020		 2020
£'000
134
1,433
(11)
1,410
(1,533)
2,451
(1,472)
2,278
14
(197)
(183)
2,229
3,553
5,782
(28)
35
11
(272)
(1,433)
38
603
1,738
(558)
134
5,291
491
5,782
2,229
160
2,389
2,563
4,952		 2019
£'000
(1,757)
1,512
(11)
1,384
(2,111)
710
(565)
919
10
(248)
(238)
(1,076)
4,629
3,553
488
25
11
(257)
(1,512)
15
(131)
240
(636)
(1,757)
3,105
448
3,553
(1,076)
247
(829)
3,392
2,563

23 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2020

1. Accounting policies

The financial statements have been prepared under the historical cost convention, with the exception of freehold properties, which are included at their fair value as determined under the applicable valuation method as detailed in e), and fixed asset investments, which are included at their market value at the balance sheet date. The financial statements have been prepared in accordance with the Statement of Recommended Practice for Charities (SORP 2019), the Companies Act 2006 and applicable accounting standards (FRS102). The Board constitutes a Public benefit entity as defined by FRS102.

The principal accounting policies and estimation techniques are as follows.

a) Income

All income is included in the Statement of Financial Activities (SOFA) when the Board is legally entitled to it as income or capital respectively, ultimate receipt is probable and the amount to be recognised can be quantified with reasonable accuracy.

b) Expenditure

Expenditure is included on the accruals basis and has been classified under headings that aggregate all costs related to the Statement of Financial Activity category. Expenditure includes any VAT which cannot be fully recovered and is reported as part of the expenditure to which it relates.

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 24

NORWICH DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

1. Accounting policies (continued)

v) Pension contributions .

The Church of England Funded Pension Scheme

The Board participates in the Church of England Funded Pension Scheme for stipendiary clergy. This scheme is administered by the Church of England Pensions Board, which holds the assets of the scheme separately from those of the Employer and the other participating employers.

Each participating employer in the scheme pays contributions at a common contribution rate applied to pensionable stipends.

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This means it is not possible to attribute the scheme’s assets and liabilities to specific employers and that the contributions are accounted for as if the scheme were a defined contribution scheme. The pension costs charged to the SOFA in the year are contributions payable towards benefits and expenses accrued in that year, plus any impact of deficit contributions.

The Board’s Defined Benefit Scheme

The Board’s pension scheme provides benefits for other full-time staff based on final pensionable pay. This is closed to new entrants. The assets of the scheme are held separately from those of the Board, being invested with Aviva. Defined benefit pension liabilities are measured using the projected unit credit method and discounted at the valuation rate of interest on a high quality corporate bond of equivalent term and currency to the liability. Under FRS 102 it is permissible to review and update the most recent actuarial valuation results, any net liability arising based on these valuations is the best estimate of the present value of the actual amounts to be paid out of the scheme, less the market value of the scheme assets.

The increase in the present value of the liabilities of the Board’s defined benefit pension scheme expected to arise from employee service in the period is charged to the Statement of Financial Activities. The net interest on the scheme liabilities is also charged to the Statement of Financial Activities. Actuarial gains and losses are recognised in the Statement of Financial Activities.

Group Personal Pension Plan

A group personal pension scheme was set up on 1 January 2002 and the costs of providing this are charged to the Statement of Financial Activities as they become payable.

25 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

1. Accounting policies (continued)

c) Tangible fixed assets and depreciation

Freehold properties

Depreciation is not provided on buildings as any provision (annual or cumulative) would not be material due to the very long expected remaining useful economic life in each case, and because their expected residual value is not materially less than their carrying value. The Board has a policy of regular structural inspection, repair and maintenance, which in the case of residential properties is in accordance with the Repair of Benefices 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 Trustees perform annual impairment reviews in accordance with the requirements of FRS102 to ensure that the carrying value is not more than the recoverable amount.

Investment properties

Glebe properties which are held for investment purposes and rented out have been included at their fair value.

Parsonage houses

The Board has followed the requirements of FRS102, in its accounting treatment for benefice houses (parsonages). FRS102 requires the accounting treatment to follow the substance of arrangements rather than their strict legal form. The Board is formally responsible for the maintenance and repair of such properties and has some jurisdiction over their future use or potential sale if not required as a benefice house, but in the meantime legal title and the right to beneficial occupation is vested in the incumbent. The Executive Committee members therefore consider the most suitable accounting policy is to capitalise such properties as expendable endowment assets and to carry them at their pre-existing balance sheet revaluation as deemed cost. No further revaluations will be performed on these assets.

Properties subject to value linked loans

Properties which have been bought with the assistance of value-linked loans from the Church Commissioners are carried at their pre-existing balance sheet revaluation as deemed cost (see paragraph above). Each year end the loan is carried at an index linked current valuation basis.

d) Other tangible fixed assets

All capital expenditure over £1,000 is capitalised and depreciated, apart from computer software which is written off in the year of purchase. Depreciation is provided in order to write off the cost (less any ultimate disposal proceeds at prices ruling at the time of the asset’s acquisition) of other fixed assets over their currently expected useful economic lives at the following initial rates:-

Office and other equipment 25% / 33.33% straight line Motor vehicles 25% reducing balance

e) Other accounting policies

i) Fixed asset investments

The Glebe holding, which is considered to be investment property, was revalued by FPD Savills, Property Consultants, at its estimated open market value as at 31 December 2017. This valuation, which represents an average of £6,388 per acre, is updated every five years. Details of the cost of the majority of the Glebe property is not available. Listed investments are included at their market value. Unlisted investments are included at valuations provided by the Fund Managers concerned. Subsidiary companies are included at fair value and any changes are recognised in the SOFA.

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 26

NORWICH DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

1. Accounting policies (continued)

ii) Diocesan Stipends

All stipends are paid by the Church Commissioners with funds provided by the Diocese. Allocations, guaranteed annuities and grants from the Church Commissioners, net Glebe rents and other attributable income received by the Church Commissioners are credited to the Stipends Fund.

iii) Diocesan Parsonages Fund

All transactions relating to the Diocesan Parsonages Fund are included under the appropriate headings in the Capital and General Fund column of the Board’s Statement of Financial Activities.

iv) Work in progress

Work in progress is valued on the basis of direct costs plus attributable overheads based on normal level of activity. Provision is made for any foreseeable losses where appropriate. No element of profit is included in the valuation of work in progress.

v) Debtors and Creditors

Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in expenditure.

vi) Cash at Bank

Cash at bank and in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

vii) The Diocese of Norwich Consolidated Education Endowments

The Diocese contributes towards the repairs and capital expenditure on schools and the costs are shown net of grants receivable. This grant system has now ceased for new projects and has been replaced by the Voluntary Aided Schools pooling arrangement. Grants shown in the Statement of Financial Activities relate to existing projects commenced under Consolidated Education Endowments.

viii) Financial Instruments

The Board only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their transaction value and then measured at their settlement value, with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method.

f) Fund balances

Fund Balances are split between unrestricted (general and designated) and restricted funds.

27 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED

NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

1. Accounting policies (continued)

f) Fund balances (continued)

Trusts where the Board acts merely as custodian trustee with no control over the management of the funds are not included in the financial statements but are disclosed in the Report of the Executive Committee.

Endowment funds are those held on trust to be retained for the benefit of the charitable company as a capital fund. In the case of the Parsonage House and Schools endowment funds administered by the Board, there are discretionary powers to convert capital into income and, as a result, these funds are classified as expendable endowment. Endowment funds such as the Stipends Capital Fund, where there is no provision for expenditure of capital are classified as permanent endowment.

g) Consolidated accounts

For the purposes of the Consolidated Statement of Financial Activities and Balance Sheet which appear alongside those of the Board itself, the Board’s subsidiaries and quasi subsidiaries are considered to be Spire Support Services Ltd, NDBF (Easton) Ltd, Norwich Glebe Property Ltd, The Diocese of Norwich Consolidated Education Endowments (formerly Schemes under Section 554 of the Education Act 1996) and certain trusts over which the Board has absolute discretionary control and of which it is a beneficiary. The results of the subsidiaries and quasi subsidiaries are consolidated on a line by line basis within ‘other restricted funds’. Intra group balances, where immaterial, are not eliminated on consolidation.

h) Going concern

The financial statements have been prepared on a going concern basis as the Trustees believe that no material uncertainties exist in relation to going concern.

The Trustees have assessed the going concern risks arising from the COVID-19 pandemic, including cashflow, investment values, staffing, government support and opening places of worship. The Trustees have considered the level of funds held and the expected level of income and expenditure for 12 months from authorising these financial statements. The budgeted income and expenditure is sufficient with the level of reserves for the charity to be able to continue as a going concern.

i) Government grants

Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received.

Government grants are recognised using the accrual model and the performance model.

j) Redundancy costs

Where an obligation to make redundancy or termination payment arises, the costs incurred by the charity are accounted for on an accruals basis and included within employee benefits

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 28

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

2.
Income from Donations
Parish contributions
Parish share
Current year's allocation
Shortfall in contributions
Total income
Total parish share receipts for the current year
represent 77.3% of the allocation (2019: 89.5%)
Archbishop's Council
Lowest income communities and transition funding
Resourcing Ministerial Education
Strategic Development Funding
Sustainability funding
Guaranteed annuities
Other donations
All Churches Trust Grant
Anne French Memorial Trust
Keswick Hall Charity
Roof Alarm Appeal
Mission Strategy
Other donations
3.
Income from Charitable activities
Statutory fees and chaplaincy income
Other Board income
Coronavirus Job retention Scheme
4.
Income from Other activities
Rental income from parsonages and closed schools
Trading income
Property support services
Coronavirus Job retention Scheme
Rental income from commercial property
Income from recharged support services
5.
Income from Investments
Dividends receivable
Interest receivable
Glebe rents receivable (note 16)
6.
Other income
Gains on disposal of property
Total income		 Benefice
Other
Unrestricted
Buildings Stipends
Restricted
Total Funds
Total Funds
Funds & Pastoral
Fund
Funds
2020
2019
£'000
£'000
£'000
£'000
£'000
£'000
7,972
-
-
-
7,972
7,914
(1,812)
-
-
-
(1,812)
(828)
6,160
-
-
-
6,160
7,086
-
-
1,364
-
1,364
1,431
-
-
-
196
196
144
-
-
-
322
322
126
215
215
-
-
-
1
-
1
1
215
-
1,365
518
2,098
1,702
152
-
-
-
152
165
42
-
-
-
42
30
48
-
-
-
48
48
-
-
-
47
47
55
-
-
-
113
113
158
97
-
-
-
97
57
339
-
-
160
499
513
624
-
4
-
628
629
211
1
-
-
212
232
99
-
-
-
99
-
934
1
4
-
939
861
425
2
-
19
446
368
-
-
-
285
285
312
24
24
-
-
-
-
49
49
49
82
-
-
-
82
99
507
2
-
377
886
828
72
134
377
19
602
706
2
-
2
-
4
8
-
-
827
-
827
798
74
134
1,206
19
1,433
1,512
123
149
-
-
272
257
123
149
-
-
272
257
8,352
286
2,575
1,074
12,287
12,759
*** Restricted Funds ***

29 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020		 NORWICH DIOCESAN BOARD OF FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020		 NORWICH DIOCESAN BOARD OF FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020		 NORWICH DIOCESAN BOARD OF FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020		 NORWICH DIOCESAN BOARD OF FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020		 NORWICH DIOCESAN BOARD OF FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020		 NORWICH DIOCESAN BOARD OF FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020		 NORWICH DIOCESAN BOARD OF FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020		 NORWICH DIOCESAN BOARD OF FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020		 NORWICH DIOCESAN BOARD OF FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020		 NORWICH DIOCESAN BOARD OF FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020		 NORWICH DIOCESAN BOARD OF FINANCE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (continued)
For the year ended 31 December 2020
Benefice
Other
Unrestricted
Buildings
Stipends
Restricted Total Funds
Total Funds
Funds & Pastoral
Fund
Funds
2020
2019
£'000
£'000
£'000
£'000
£'000
£'000
7.
Expenditure on raising funds
Investment management costs
Glebe management charges
-
-
107
-
107
128
Asset management expenses
-
-
-
-
-
2
Trading expenses
Property support services
-
-
-
280
280
312
Commercial property
-
-
-
49
49
49
-
-
107
329
436
491
8.
Expenditure on charitable activities
Contributions to Archbishop's Council
Training for ministry
354
-
-
-
354
338
National Church responsibilities
299
-
-
-
299
305
Grants and provisions
9
-
-
-
9
3
662
-
-
-
662
646
Expenditure on resourcing ministry and
mission
Parish ministry:
Stipends and national insurance
(55)
-
4,977
-
4,922
5,001
Pension contributions
1,645
-
(505)
-
1,140
1,208
Housing costs
1,162
1
-
-
1,163
1,183
Removal, resettlement and other grants
123
-
-
-
123
190
Other expenses
137
-
-
-
137
176
3,012
1
4,472
-
7,485
7,758
Support for parish ministry
2,446
5
-
-
2,451
2,334
Resourcing Ministerial Education
-
-
-
179
179
140
Roof Alarm Appeal
-
-
-
47
47
55
Mission Strategy
-
-
-
116
116
129
Church Planting and Revitalisation
-
-
-
320
320
126
2,446
5
-
662
3,113
2,784
Expenditure on education
Support for church schools
403
-
-
-
403
474
Grants
-
-
-
216
216
118
403
-
-
216
619
592
Total expenditure on charitable activities
6,523
6
4,472
878
11,879
11,780
Total expenditure
6,523
6
4,579
1,207
12,315
12,271
9.
Analysis of expenditure
including allocation of support costs
Activities
Grant
undertaken funding of
Support
Total
Total
directly
activities
costs
2020
2019
£'000
£'000
£'000
£'000
£'000
*** Restricted Funds ***
Raising funds
Contributions to Archbishop's Council
Resourcing Ministry and Mission
Education, Youth Children and Families		 436
662
8,703
403
10,204		 -
-
131
216
347		 -
-
1,764
-
1,764		 436
662
10,598
619
12,315		 491
646
10,542
592
12,271

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 30

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

* Restricted Funds Restricted Funds *
Benefice Other
Unrestricted Buildings Stipends Restricted Total Funds Total Funds
Funds & Pastoral Fund Funds 2020 2019
£'000 £'000 £'000 £'000 £'000 £'000
10. Analysis of support costs
Central administration and office property costs 1,540 - - - 1,540 1,311
(inc. final salary pension adjustments)
Governance:
Amounts paid to auditor:
External audit 25 - - - 25 24
Accountancy 5 - - - 5 7
Registrar, Chancellor, PCR2 review and HR 187 - - - 187 119
Synodical costs 7 - - - 7 11
1,764 - - - 1,764 1,472
11. Analysis of grants made
Included within:
Contributions to the Archbishop's Council
Education and training grants
Resourcing ministry and mission:
Resettlement and first incumbency grants
Support for parish ministry
Resourcing Ministerial Education
Roof Alarm Appeal
Church quinquennial inspections
PCC Faculty fees
Repair and reordering of redundant churches
PCC grant
Sharing good news grants
Continuing Ministerial Development
Good Work Chaplaincy grants
Norfolk and Waveney Churches Together
Education
CEE grants to schools and academies		 Individuals
£'000
-
99
123
48
-
-
-
-
-
3
-
-
-		 Institutions
£'000
563
-
-
131
47
63
22
5
4
3
-
8
3
210		 563
99
123
179
47
63
22
5
4
3
3
8
3
210
Total
2020
£'000		 Total
2019
£'000
548
98
190
140
55
57
25
7
7
13
15
8
3
118
273 1,059 1,332 1,284
12. Staff costs
Staff costs were as follows:
Gross salaries
Social security costs
Redundancy
Pension contributions
Lump sum contributions
Health insurance contributions		 2020
£'000
1,434
135
5
204
143
19		 2019
£'000
1,346
135
-
198
132
19
1,940 1,830

Payments in respect of redundancy relating to the Events Co-ordinator post totalling £5k were made in the year, this had all been paid over by the year-end.

31 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

12. Staff costs (continued)

The average head count of total employees:
The average number of employees, based on full-time equivalents were as follows:
Resourcing ministry
Support for parish ministry
Safeguarding
Counsellor
Property
Parochial lay staff
Church Planting and Revitalisation
Education, youth, families and children
Spire Support Services Limited		 2020
57
24
2
1
4
3
6
6
4
50		 2019
54
26
2
1
4
2
2
6
4
47

The number of staff whose emoluments (including benefits in kind but excluding pension contributions) exceeded £60,000 were:

2020 2019
£60,000 - £70,000 1 2
£70,000 - £80,000 - 1
£80,000 - £90,000 2 1
£90,000 - £100,000 - -
£100,000 - £110,000 1 -
£110,000 - £120,001 - 1

Pension contributions amounting to £49.6k were made in the year for the provision of money purchase benefits for the above employees.

Remuneration of key management personnel

Key management personnel are deemed to be those having authority and responsibility, delegated to them by the members of the Executive committee, for planning, directing and controlling the activities of the diocese. During 2020 they were:

The Diocesan Secretary and Chief Executive, the Director of Property Services, the Director of Education, the Director of Finance and the Director of Communications. Remuneration (including employers National Insurance, pension costs and benefits-in-kind) and expenses for these employees amounted to £502k (2019: £512k).

Executive Committee Remuneration

No remuneration has been paid to any member of the Executive Committee in their capacity as Executive Committee members (2019: £NIL). One member was reimbursed for travel and incidental costs incurred in undertaking their Executive Committee duties totalling £19 (2019: Four members £542).

During the year the Board made contributions to the Church Commissioners towards the stipends, national insurance and pension contributions of the licensed clergy who are Executive Committee members and provided houses, including the payment of council tax and maintenance costs, as part of normal clergy remuneration.

The following table gives details of the Executive Committee members who were in receipt of a stipend and/or housing provided by the Norwich Diocesan Board of Finance Limited during the year:

Stipend Housing
The Revd. Michael Asquith Yes Yes
The Ven. Steven J. Betts Yes Yes
The Revd. Dr Patrick Richmond Yes Yes
The Revd. Jeremy G. Sykes Yes Yes
The Revd. Canon Simon Stokes Yes Yes

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 32

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

12. Staff costs (continued)

Stipendiary Clergy (continued)

The Board is responsible for funding via the Church Commissioners the stipend of licenced stipendiary clergy in the diocese, other than bishops and cathedral staff. The Board is also responsible for the provision of housing for stipendiary clergy in the diocese including the suffragan bishops but excluding the diocesan bishop and cathedral staff.

Parochial Clergy:The average number of clergy holding parochial
or archidiaconal posts in the diocese was:
At a cost before recharges of:
Stipends
National Insurance contributions
Pension contributions		 2020
2019
170
172
£'000
£'000
4,596
4,702
376
376
1,720
1,742
6,692
6,820

The stipends of the Diocesan Bishop and two Suffragan Bishops are funded by the Church Commissioners and are in the range of £36,930 to £46,180. The annual rate of stipend, funded by the Board, paid to Archdeacons in 2020 was in the range of £36,100 to £36,830 and other clergy who were members of the Executive Committee were paid in the range £26,470 to £27,000. The estimated value to the occupant, gross of income tax and national insurance, of church provided housing in 2020 is an average of £12,900 p.a.

13. Net gains/(losses) on investments

Investments (note 20)
Realised
Unrealised - listed
- unlisted
Glebe Holding (note 19)
Realised
Net gains/(losses)
14.
Net income/(expenditure)
This is after charging:
Depreciation
15.
Analysis of transfers between funds
Asset Management costs		 Capital
and
Designated
Restricted
General
Funds
Funds
£'000
£'000
£'000
-
-
-
-
-
-		 2020
2019
£'000
£'000
(375)
8
418
2,275
(53)
(14)
62
93
52
2,362
2020
2019
£'000
£'000
35
25
Total
2020
£'000
-
-

Asset management costs are funds designated from unrestricted reserves to manage the extensive property portfolio in order to improve the quality of the existing housing stock and make best use of assets to generate additional revenue.

33 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

16. Endowments and Glebe Measure, 1976

2020 2019
Income and Expenditure Account
£'000 £'000
Income (note 5)
Glebe rents and interest receivable 827 798
Expenditure (note 7)
Surveyor's and Agent's fees 43 51
Legal and other administration charges 63 76
107 128
Surplus for the year 720 670
17. Taxation
18. The Board has no liability to corporation tax or capital gains tax.
Tangible assets
Subject to
Benefice
Other
value linked
and Commercial
freehold
loans
Glebe
Pastoral Property
property
£'000
£'000
£'000
£'000
£'000
At cost or valuation
At 1 January 2020
723
5,233
78,413
735
3,690
Additions
-
559
946
20
-
Disposals
(238)
-
(703)
-
(198)
Transfer
-
-
-
-
-
* Freehold Property *		 Office
2020
and otherConsolidated
equipment
Total
£'000
£'000
126
88,920
8
1,533
-
(1,139)
-
-
At 31 December 2020 485
5,792
78,656		 755 3,492 134 89,314
Accumulated depreciation
At 1 January 2020
Disposals
Charge for the year		 -
-
-
-
-
-
-
-
-		 -
-
-		 -
-
-		 63
-
35		 63
-
35
At 31 December 2020 -
-
-		 - - 98 98
Net book value
At 31 December 2020		 485
5,792
78,656		 755 3,492 36 89,216
At 31 December 2019 723
5,233
78,413		 735 3,690 63 88,857
Company
At 31 December 2020		 485
5,792
78,656		 240 3,492 34 88,699
At 31 December 2019 723
5,233
78,413		 220 3,690 63 88,342
The net book amount comprises:
Assets used, or intended to be used, predominantly
for direct charitable purposes
Assets used for administration and other purposes		 2020
£'000
87,300
1,916		 2019
£'000
86,933
1,924
89,216 88,857

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 34

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

18. Tangible Fixed Assets - continued

Freehold property subject to value linked loans comprises freeholds where loans have been received from Church Commissioners or Parochial Church Councils towards the capital expenditure and, as part of the agreement, all or part of the sale proceeds will be repayable on final disposal. These properties are carried at their pre-existing balance sheet revaluation as deemed cost. Each year end the loan is carried at an index linked current valuation basis (note 26).

Glebe Property (mainly residential houses) comprises:
Houses at valuation as at 1 January 2020
Transfer from Benefice and Pastoral Fund
Additions
Disposals
Valuation as at 31 December 2020
Benefice and Pastoral Property comprises -
Houses -
At valuation as at 1 January 2020
Subsequent additions at cost
Transfer to Glebe Property
Disposals
Valuation as at 31 December 2020		 Glebe Property (mainly residential houses) comprises:
Houses at valuation as at 1 January 2020
Transfer from Benefice and Pastoral Fund
Additions
Disposals
Valuation as at 31 December 2020
Benefice and Pastoral Property comprises -
Houses -
At valuation as at 1 January 2020
Subsequent additions at cost
Transfer to Glebe Property
Disposals
Valuation as at 31 December 2020		 2020
£'000
5,233
-
559
-
5,792
78,413
946
-
(703)
78,656		 2019
£'000
4,390
839
4
-
5,233
78,302
2,076
(839)
(1,126)
78,413

The Board has followed the requirements of FRS102, in its accounting treatment for benefice houses (parsonages). FRS102 requires the accounting treatment to follow the substance of arrangements rather than their strict legal form. The Board is formally responsible for the maintenance and repair of such properties and has some jurisdiction over their future use or potential sale if not required as a benefice house, but in the meantime legal title and the right to beneficial occupation is vested in the incumbent. The Executive Committee members therefore consider the most suitable accounting policy is to capitalise such properties as expendable endowment assets and to carry them at their pre-existing balance sheet revaluation as deemed cost. No further revaluations will be performed on these assets.

Property held by the Diocesan Consolidated Education Endowments, comprising school land and buildings including teachers' houses, some of which are let, is vested in the Board. It is not considered appropriate to include these as assets in the balance sheet because they are in the main held in the very long term and their disposal and the right to any proceeds of sale are subject to the agreement of the Local Education Authority.

19. Glebe Land

Glebe Land Glebe Land
Consolidated
Valuation at 1 January 2020
Additions
Disposal proceeds
Profit on disposal
Revaluation adjustment
Valuation at 31 December 2020
Company
Valuation at 31 December 2020		 £'000
37,105
-
(65)
62
-
37,102
37,047

The Glebe land, which is considered to be investment property, was revalued by FPD Savills, Property Consultants, at its estimated open market value as at 31 December 2017. This valuation, which represents an average £6,388 per acre, will be updated every five years. Details of the historic cost of the majority of the Glebe holding is not available.

35 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

20. Fixed asset investments

----- Start of picture text -----
Profit/(loss)
At 1 January Disposal on Increase/(decrease) in At 31 December
2020 Additions proceeds Disposal Market value 2020
£'000 £'000 £'000 £'000 £'000 £'000
Unrestricted Funds
Listed investments 2,755 141 (259) (30) (2) 2,605
Unlisted investments 97 3 - - - 100
Cash 89 - (83) - - 6
2,941 144 (342) (30) (2) 2,711
Restricted Funds
Listed investments 15,206 1,328 (1,952) (345) 420 14,657
Unlisted investments 1,364 - - - (53) 1,311
Cash 289 - (92) - - 197
16,859 1,328 (2,044) (345) 367 16,165
Total 19,800 1,472 (2,386) (375) 365 18,876
2020 2019
The unlisted securities comprise:- £'000 £'000
Shares in the Central Board of Finance -
Investment Fund 42 39
Property Fund 1,175 1,236
(valued as per the Central Board of Finance)
COIF Charities Investment Fund Income shares
(valued as per COIF Charity Funds) 94 89
Investment in Eastern Landowners Consortium 97 94
Investment in CMCU shares 3 3
1,411 1,461
The historical cost of the above assets is as follows:
Listed securities 13,493 14,363
Unlisted securities 1,140 1,137
Cash 203 378
14,836 15,878
----- End of picture text -----

The following shareholdings, at valuation, form a material part of the investment portfolio (i.e. greater than 5% of the total of the Board's consolidated investments).

M & G Charifund income units
Central Board of Finance Property Fund
Eskmuir Diversified Property Fund		 2020
2019
£'000
£'000
1,447
1,751
1,175
1,237
2,104
2,068
4,726
5,056

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 36

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

21.
Stock
Stock and Work-in-Progress
22.
Debtors
Company
Due within one year
Parish share
Assigned fees
Prepayments and accrued income
Amounts due from Subsidiary undertakings
Other debtors
Loans (note 23)
Consolidated
Prepayments and accrued income
Other debtors
Company and Consolidated
Due after more than one year
Deferred costs on development project
Loans (note 23)
23.
Loans Receivable
Company and Consolidated
Amounts due from parishes
Amounts due from Subsidiary undertakings
Amounts falling due after more than one year
24.
Creditors - amounts falling due within one year
Company
Tax and social security costs
Other creditors
Accruals and deferred income (note 35)
Consolidated
Tax and social security costs
Other creditors
Accruals and deferred income (note 35)
25.
Creditors - amounts falling due
after more than one year
Loans due by the Board (note 26)
26.
Loans due by the Board
Company
Church Commissioners Property Loans - Value Linked Loans
Consolidated
Amount owed to group undertakings
Amounts falling due after more than one year
Interest payable on loans due by the Board		 21.
Stock
Stock and Work-in-Progress
22.
Debtors
Company
Due within one year
Parish share
Assigned fees
Prepayments and accrued income
Amounts due from Subsidiary undertakings
Other debtors
Loans (note 23)
Consolidated
Prepayments and accrued income
Other debtors
Company and Consolidated
Due after more than one year
Deferred costs on development project
Loans (note 23)
23.
Loans Receivable
Company and Consolidated
Amounts due from parishes
Amounts due from Subsidiary undertakings
Amounts falling due after more than one year
24.
Creditors - amounts falling due within one year
Company
Tax and social security costs
Other creditors
Accruals and deferred income (note 35)
Consolidated
Tax and social security costs
Other creditors
Accruals and deferred income (note 35)
25.
Creditors - amounts falling due
after more than one year
Loans due by the Board (note 26)
26.
Loans due by the Board
Company
Church Commissioners Property Loans - Value Linked Loans
Consolidated
Amount owed to group undertakings
Amounts falling due after more than one year
Interest payable on loans due by the Board		 21.
Stock
Stock and Work-in-Progress
22.
Debtors
Company
Due within one year
Parish share
Assigned fees
Prepayments and accrued income
Amounts due from Subsidiary undertakings
Other debtors
Loans (note 23)
Consolidated
Prepayments and accrued income
Other debtors
Company and Consolidated
Due after more than one year
Deferred costs on development project
Loans (note 23)
23.
Loans Receivable
Company and Consolidated
Amounts due from parishes
Amounts due from Subsidiary undertakings
Amounts falling due after more than one year
24.
Creditors - amounts falling due within one year
Company
Tax and social security costs
Other creditors
Accruals and deferred income (note 35)
Consolidated
Tax and social security costs
Other creditors
Accruals and deferred income (note 35)
25.
Creditors - amounts falling due
after more than one year
Loans due by the Board (note 26)
26.
Loans due by the Board
Company
Church Commissioners Property Loans - Value Linked Loans
Consolidated
Amount owed to group undertakings
Amounts falling due after more than one year
Interest payable on loans due by the Board		 2020
2019
£'000
£'000
25
63
2020
2019
£'000
£'000
273
439
58
105
247
259
179
182
523
903
-
12
1,280
1,900
2
7
185
175
1,467
2,082
601
601
477
479
2,545
3,162
2020
2019
£'000
£'000
-
12
477
479
477
491
477
479
2020
2019
£'000
£'000
37
41
746
351
1,546
1,536
2,329
1,928
45
11
837
676
1,327
185
4,538
2,800
2020
2019
£'000
£'000
830
990
2020
2019
£'000
£'000
353
511
477
479
830
990
830
990
11
11		 2020
2019
£'000
£'000
25
63
2020
2019
£'000
£'000
273
439
58
105
247
259
179
182
523
903
-
12
1,280
1,900
2
7
185
175
1,467
2,082
601
601
477
479
2,545
3,162
2020
2019
£'000
£'000
-
12
477
479
477
491
477
479
2020
2019
£'000
£'000
37
41
746
351
1,546
1,536
2,329
1,928
45
11
837
676
1,327
185
4,538
2,800
2020
2019
£'000
£'000
830
990
2020
2019
£'000
£'000
353
511
477
479
830
990
830
990
11
11		 2020
2019
£'000
£'000
25
63
2020
2019
£'000
£'000
273
439
58
105
247
259
179
182
523
903
-
12
1,280
1,900
2
7
185
175
1,467
2,082
601
601
477
479
2,545
3,162
2020
2019
£'000
£'000
-
12
477
479
477
491
477
479
2020
2019
£'000
£'000
37
41
746
351
1,546
1,536
2,329
1,928
45
11
837
676
1,327
185
4,538
2,800
2020
2019
£'000
£'000
830
990
2020
2019
£'000
£'000
353
511
477
479
830
990
830
990
11
11		 2020
2019
£'000
£'000
25
63
2020
2019
£'000
£'000
273
439
58
105
247
259
179
182
523
903
-
12
1,280
1,900
2
7
185
175
1,467
2,082
601
601
477
479
2,545
3,162
2020
2019
£'000
£'000
-
12
477
479
477
491
477
479
2020
2019
£'000
£'000
37
41
746
351
1,546
1,536
2,329
1,928
45
11
837
676
1,327
185
4,538
2,800
2020
2019
£'000
£'000
830
990
2020
2019
£'000
£'000
353
511
477
479
830
990
830
990
11
11
2,329
45
837
1,327
4,538

37 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

27.
Summary of fund movements
Unrestricted funds
Capital and General
Designated funds:
Aided Church Schools
Buildings Reserve
Diocesan Parsonages Fund
Jane Bailey Bequest
Asset Management Fund
Total unrestricted funds
Restricted funds
Stipends Fund
Benefice Buildings and Pastoral Fund
Other Restricted Funds
Margaret Young Fund
Cormorants
Bishops' Fund for Readers in Training
Burning Bush Barn
Roof Alarm Appeal
Mission Strategy
Resourcing Ministerial Education
Church Planting and Revitalisation
Subsidiaries and Quasi subsidiaries
Trading Subsidiaries: (see note 33)
Non-charitable trading funds
Consolidated Education Endowments
Trusts
Total other restricted funds
Total restricted funds
Total funds
Unrestricted funds		 Balances at
Balances at
1 January
Gains and
31 December
2020
Income
Expenditure
Transfers
losses
2020
£'000
£'000
£'000
£'000
£'000
£'000
4,422
8,352
(6,522)
-
(373)
5,879
178
-
-
-
-
178
85
-
-
-
-
85
605
-
(1)
-
-
604
-
-
-
-
-
-
868
-
(1)
-
-
867
5,290
8,352
(6,523)
-
(373)
6,746
59,318
2,575
(4,579)
-
(68)
57,246
80,830
286
(6)
-
116
81,226
242
-
-
-
-
242
-
-
-
-
-
-
8
-
-
-
-
8
6
-
-
-
-
6
-
47
(47)
-
-
-
3
113
(116)
-
-
-
2
196
(178)
-
-
20
-
321
(320)
-
-
1
55
359
(330)
-
-
84
2,133
37
(210)
-
29
1,989
104
1
(6)
-
2
101
2,553
1,074
(1,207)
-
31
2,451
142,701
3,935
(5,792)
-
79
140,923
147,991
12,287
(12,315)
-
(294)
147,669

The Board's Capital and General Funds includes £990,000 relating to capital (2019: £990,000). The General Reserve represents those assets held by the Board for carrying out its general activities. It provides the assets and liquidity for the Board to carry out its objectives, including statutory compliance, administration of funds and some housing.

Designated funds

The Aided Church Schools Buildings Reserve represents designated funds set aside for the maintenance and repair of Church schools.

The Diocesan Parsonages Fund represents Parsonage Building Funds held by the Board, which may be applied to either the Benefice Buildings and Pastoral or the Stipends Capital.

The Jane Bailey Bequest was established by the will of the late Miss Sybella Jane Bailey, who died on 16 November 1993. The Board became entitled to this by a Deed of Appointment, dated 14 November 1995 and the assets thereof, consisting of Cavick House and grounds, together with three adjacent dwellings near Wymondham, were vested in the Board with effect from 30 August 1996. Following agreement with the executors of the estate, the property was sold in December 1998. The resulting funds have been used for the provision of archdeacons housing and related housing costs.

The Asset Management Fund relates to funds set aside to meet costs to be incurred by the Asset Management Committee in their work in connection with the return on land and housing assets.

Restricted funds

The Stipends Fund derives mainly from the historic Glebe property of the Diocese and is restricted as to its use by Section 35 of the Endowments and Glebe Measure, 1976. It is regarded as an expendable endowment fund.

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 38

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

27. Summary of fund movements (continued)

Restricted funds - continued

The Margaret Young Fund was established by the will of the late Margaret Caroline Young. The Board became entitled to the property Babur Hill Cottage, Bawburgh, on the death of the life tenant on 26 July 2008, and the transfer of ownership took place during 2009. This was subsequently sold in October 2010. The fund is to be used towards the provision of housing for retired clergy.

Cormorants was established to run Christian sailing holidays for young people. Income is derived from fees for specific sailing holidays and donations. The income is restricted for the specific purpose of providing sailing holidays.

The Bishops' Fund for Readers in Training was set up by the former Archdeacon of Lynn, John Ashe from a collection in Norwich Cathedral, to provide financial assistance to students.

The Burning Bush Barn was contemplative art space set in the rural village of Rockland St Mary 6 miles south of Norwich City centre. This is currently being re-imagined for future spiritual growth through creative visual art.

To combat the threat of church lead thefts the Bishop of Norwich, the Police and Crime Commissioner for Norfolk, the Norfolk Churches Trust, Allchurches Trust and the Round Tower Churches Society have been working together to find a long-term solution and have created The Roof Alarm Scheme. The appeal raises funds towards the cost of installing alarms on church roofs. Income is released to match expenditure.

Mission Strategy 2021 is an extension of 'Committed to Growth', building on what is already being done and continuing to look to grow in discipleship, service and numbers. It identifies four 'streams' of work - Listen, Celebrate, Imagine and Empower and has been resourced by restructuring grants from the Archbishop's Council and local Trust funds. Income is released to match expenditure.

Resourcing Ministerial Education is a framework for paying to support Ordinands in initial training which supports diocesan and national ministry strategies, incentivises sponsorship of younger candidates and offers clear links between training choices and financial implications. Block grants are restricted and income is released to match expenditure.

The Church Planting and Revitalisation project began in September 2019, its aims are to create 10 new or revitalised churches across Norfolk and Waveney. Teams of church and worship leaders, sports ministers and others will be appointed to areas where research shows there are local needs the church can help meet and communities that can be better supported. The programme seeks to reach both rural and urban area, engaging with young people and families by focusing on areas of population around secondary school catchment areas. The project is part-funded by a grant of £1.98m from the national Church of England.

The Benefice Buildings and Pastoral Fund is represented by parsonage and other houses and assets derived from the sale of such houses or churches which have become redundant. The use of pastoral monies is restricted by Section 78 of the Pastoral Measure, 1983. However, the Bishop of Norwich has given the Diocesan Secretary sanction for the use of these funds at his discretion for ministry and mission purposes.

28. Pension costs

The Church of England Funded Pension Scheme

The Norwich Diocesan Board of Finance participates in the Church of England Funded Pension Scheme for stipendiary clergy, a defined benefit pension scheme. This scheme is administered by the Church of England Pensions Board, which holds the assets of the scheme separately from those of the Responsible Body.

Each participating Responsible Body in the scheme pays contributions at a common contribution rate applied to pensionable stipends.

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This means it is not possible to attribute the Scheme's assets and liabilities to each specific Responsible Body and that contributions are accounted for as if the Scheme were a defined contribution scheme. The pension costs charged in the Statement of Financial Activities in the year are contributions payable towards benefits and expenses accrued in that year, plus any impact of deficit contributions.

A valuation of the scheme is carried out once every three years. The most recent Scheme valuation completed was carried out at 31 December 2018. The 2018 valuation revealed a deficit of £50m, based on assets of £1,818m and a funding target of £1,868m, assessed using the following assumptions:

An average discount rate of 3.2% pa;

RPI inflation of 3.4% pa (and pension increases consistent with this);

Increase in pensionable stipends 3.4% pa; and

Mortality in accordance with 95% of the S3NA_VL tables, with allowance for improvements in mortality rates in line with the CMI 2018 extended model, with a long term annual rate of improvement of 1.5%, a smoothing parameter of 7 and an initial addition to mortality improvements of 0.5% pa.

39 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

28. Pension costs (continued)

The Church of England Funded Pension Scheme (continued)

Following the 31 December 2018 valuation, a recovery plan was put into place until 31 December 2022 and the deficit recovery contributons payable (as a percentage of pensionable stipends) were set as follows:

% of pensionable stipends 1 January 2018 to 1 January 2021 to
31 December 2020 31 December 2022
Deficit repair contributions 11.9% 7.1%

The deficit recovery contributions under the recovery plan in force as at 31 December 2020 were as set out above.

For senior office holders, pensionable stipends are adjusted in the calculations by a multiple, as set out in the Schemes's rules.

Section 28.11A of FRS 102 requires agreed deficit recovery payments to be recognised as a liability. The movement in the provision is set out below.

Balance sheet liability at 1 January
Deficit contribution paid
Interest cost (recognised in Statement of Financial Activities)
Remaining change to the balance sheet liability* (recognised in SoFA)
Balance sheet liability at 31 December		 2020
2019
£'000
£'000
1,113
3,466
(514)
(517)
9
67
6
(1,903)
614
1,113

This liability represents the present value 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 payments:

% of pensionable stipends

% of pensionable stipends
Discount rate December 2020
0.2% pa		 December 2019
1.1% pa		 December 2018
2.1% pa
Price inflation 3.1% pa 2.8% pa 3.1% pa
Increase to pensionable payroll 1.6% pa 1.3% pa 1.6% pa

The legal structure of the scheme is such that if another Responsible Body fails, the Norwich Diocesan Board of Finance Limited could become responsible for paying a share of that Responsible Body's pension liabilities.

The Board's Pension Scheme

Norwich Diocesan Board of Finance Limited operates a final salary defined benefit pension plan in the UK, the Norwich Diocesan Board of Finance Limited Pension Scheme. A comprehensive actuarial valuation of the scheme was carried out as at 1 April 2019, which has been updated to 31 December 2019 by a qualified independent actuary.

Information about the Scheme is set out below consistent with section 28 of FRS 102.

Employee benefit obligations - amounts recognised in the balance sheet:

Present value of funded obligations
Fair value of plan assets
Net defined benefit asset		 2020
2019
£'000
£'000
2,661
2,353
2,766
2,707
105
354

The pension plan assets do not include property occupied by the sponsoring employer.

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 40

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

28. Pension costs (continued)

The Board's Pension Scheme (continued)

The scheme assets include insurance policies that exactly match the amount and timing of the benefits payable under the Scheme to those current pensioners whose pensions are fully secured in immediate annuity policies. Since the fair value of these insurance policies is deemed to be the present value of the related obligations, both the asset and corresponding liability have been ignored in the disclosures.

The amounts recognised in the Statement of Financial Activities are as follows:

Current service cost
Scheme administration expenses
Interest expense
Interest income
Total cost recognised in Statement of Financial Activities
Actual return on plan assets		 For year to
For year to
31 December 2020
31 December 2019
£'000
£'000
9
11
-
2
47
60
(55)
(71)
1
2
(4)
146
Changes in the present value of the defined benefit obligation are as follows: Changes in the present value of the defined benefit obligation are as follows:
Opening defined benefit obligation For year to
31 December 2020
£'000
2,353
Current service cost 9
Interest expense 47
Actuarial losses 302
Benefits paid (50)
Closing defined benefit obligation 2,661

FRS 102 states that the reconciliation of changes in the present value of the defined benefit obligation need not be presented for prior periods.

The projected unit credit valuation method has been used to arrive at the above service cost. The use of this method is prescribed in FRS 102. To produce a stable future contribution rate this valuation method assumes that the average age of the scheme membership will remain broadly constant in future due to a flow of new entrants to the scheme. However, as the scheme is closed to new members this will not be the case and the costs of benefits accruing, as a percentage of pensionable salaries, will be expected to increase over time.

41 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

28. Pension costs (continued)

The Board's Pension Scheme (continued)

Changes in the fair value of plan assets are as follows:

Opening fair value of plan assets
Interest income
Return on Scheme assets, excluding amounts included in
Interest expense/income
Contributions by employer
Benefits paid
Closing fair value of plan assets		 For year to
31 December 2020
£'000
2,707
55
(59)
113
(50)
2,766

FRS 102 states that the reconciliation of changes in the fair value of plan assets need not be presented for prior periods.

The major categories of plan assets as a percentage of total plan assets are as follows:

2020 2019
% total plan % total plan
assets assets
Unitised with profits policy 100% 100%

Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):

a) Financial assumptions 2020 2019
Discount rate 1.3% pa 2.0% pa
RPI inflation assumption 2.85% pa 2.9% pa
CPI inflation assumption 2.45% pa 2.1% pa
Future salary increases 2.85% pa 2.9% pa
Pension increases in payment
(RPI - maximum 5%) 2.8% pa 2.85% pa
(CPI - maximum 2.5% ) 1.95% pa 1.75% pa
b) Demographic assumptions
Assumed life expectancy in years, on retirement at 65: 2020 2019
Retiring today Males 22.3 22.2
Females 24.6 24.4
Retiring in 20 years Males 23.6 23.5
Females 26 25.8

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 42

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

29. Redundant Churches

The Board was responsible for the care and maintenance of 3 redundant churches during the year (2019: 3). The cost to the Board was £4,705 (2019: £6,716).

No value has been attributed to these churches on the grounds that it is not material having regard to the liability for repair.

30. Voluntary Aided Schools pooling arrangement

In April 2006 the DFE made voluntary aided school annual devolved formula capital grants available to schools in advance of project spend. A significant number of Diocesan education and finance staff are involved in administering the projects and use of the funds received.

A summary of the transactions between 1 January 2020 and 31 December 2020 is detailed below:

Cash held at 1 January 2020
Grants received from DFE
Payments on behalf of Schools
Cash held at 31 December 2020		 2020
2019
£'000
£'000
580
398
175
411
(143)
(229)
612
580

These grants belong to the individual schools in the pooling arrangement and are not included in the consolidated accounts of Norwich Diocesan Board of Finance Limited.

31. Related party transactions

Transactions with the Ministry division and the Board of Education are included with the Unrestricted Funds in the Statement of Financial Activities. Consolidated Education Endowments is included as a Restricted Fund in the Statement of Financial Activities.

Norwich Diocesan Board of Finance Ltd is Managing or Custodian Trustee for approximately 1,800 Trusts. Where Norwich Diocesan Board of Finance Ltd is Managing Trustee, these trusts are included as a quasi subsidiary in the Statement of Financial Activities.

The Board co-operates closely with The Horstead Centre. The Board leases the Horstead Conference Centre to the Horstead Centre over a fifty year lease at £12 per annum. The market value of this rent is £18,000 per annum. During the year there was no expenditure recharged to Norwich Diocesan Board of Finance Limited by the Horstead Centre (2019: £5,836), with nothing outstanding at the year end (2019: £Nil). There were no charges made to the Horstead Centre by the Board in 2020 (2019: £30,000 dilapidations).

£54,217 (2019: £71,181) was recharged to The Diocese of Norwich Education and Academies Trust (DNEAT) in 2020 by the Consolidated Education Endowments Fund (CEE) and the Norwich Diocesan Board of Finance Ltd, with £12,591 outstanding at the year end (2019: £19,860). £40,033 (2019: £25,600) was charged to the Norwich Diocesan Board of Finance with respect to subscriptions and staff costs, with nothing (2019: nil) outstanding at the year end. Nothing was paid during 2020 in respect of Free Schools bids on behalf of the Diocese of Norwich Education and Academies Trust and St Benet's Multi-Academy Trust (2019: £12,000). £692 was recharged to The Diocese of Norwich Education Support Company (DONESC) with respect to staff costs (2019: nil).

£2,503 (2019: £3,075) was recharged to St Benet's Multi-Academy Trust by the Norwich Diocesan Board of Finance Ltd in 2020, with £525 (2019: £730) outstanding at the year end. Nothing was transferred to St Benet's MultiAcademy Trust in 2020 (2019: nil), with respect to devolved formula capital for schools transferring to academy status. Nothing was paid from the Consolidated Education Endowments Fund (CEE) in grant funding for St Benet's Multi-Academy Trust (2019: £95,000).

£43,077 was recharged to The Anne French Memorial Trust in 2019 (2019: £46,186), with £12,042 outstanding at the year end (2019: £10,416). Grants totalling £77,000 were given towards housing costs, national donations and education projects (2019: £230,000 including mission strategy), this income is released to match expenditure, £30,000 grant income has been deferred to 2021 for housing costs.

The Diocese of Norwich Churches Trust was established during 2015. This is a Charitable Incorporated Organisation (CIO) set up to relieve incumbents and PCC members with very small congregations, from the burden and responsibility of the Churches running costs. £496 was due at the year end to the Trust by the Norwich Diocesan Board of Finance Limited in respect of fees (2019: repayable by the Trust £1,132).

43 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

32. Capital commitment

The Board has a long term commitment towards the purchase of development land, the amount of which depends on future planning permission. The Board's best estimate is that this will not exceed £700,000.

33. Subsidiary Undertakings

All subsidiary undertakings are included within restricted funds.

(a) Spire Support Services Limited

Spire Support Services Limited is a wholly owned subsidiary of Norwich Diocesan Board of Finance Limited, incorporated on 19 May 2011.

Net profit (before tax and Corporate Gift Aid) for the year ended 31 December 2020
2019
£'000
£'000
29
75

Transactions between Spire Support Services Limited and Norwich Diocesan Board of Finance Limited are as follows:

Expenses paid on behalf of Spire Support Services Limited (inc. recharges)
Amounts owing by Subsidiary undertaking at 31 December 2020 (debtor)
Shareholders Equity/(Deficit)		 2020
2019
£'000
£'000
179
182
179
182
-
-

During the year Spire Support Services Limited collected rental income net of 8% commission plus VAT of £322,919. Spire Support Services charged Norwich Diocesan Board of Finance Limited £256,805 inc VAT for design, surveying services and Church Quinquennials. Norwich Diocesan Board of Finance Limited charged Spire Support Services £20,897 for management oversight, financial services, office rental and loan interest. Spire Support Services Limited will gift £28,841 distributable profit under corporate gift aid to Norwich Diocesan Board of Finance Limited within nine months of the year end.The accounts for Spire Support Services Limited for the year ended 31 December 2020 have been audited by Lovewell Blake LLP and received an unqualified audit opinion. For further information please refer to the subsidiary accounts which are available on request.

(b) NDBF (Easton) Limited

NDBF (Easton) Limited was incorporated on 4th April 2014 to be part of a land-owners consortium for property development in the village of Easton. Since that date the company has been dormant. During 2018 8.604 acres of Glebe land was transferred to NDBF (Easton) Limited from Norwich Diocesan Board of Finance Limited at a valuation of £54,966, being £6,388.22 per acre. The company should become active during 2021.

(c) Norwich Glebe Property Limited

Norwich Glebe Property Limited was incorporated on 26 February 2016 and was set up in order to hold commercial glebe property.

Norwich Glebe Property Limited net profit for the year ended 31 December 2020
2019
£'000
£'000
30
30

During the year Norwich Diocesan Board of Finance Limited collected rental income and expenses net of VAT of £49,017 on behalf of Norwich Glebe Property Limited, paid costs of £1,895 and charged loan interest of £16,435 to Norwich Glebe Property Limited. Norwich Glebe Property Limited will gift the above net profit under corporate gift aid to Norwich Diocesan Board of Finance Limited within nine months of the year end. The accounts for Norwich Glebe Property Limited for the year ended 31 December 2020 have been audited by Lovewell Blake LLP and received an unqualified audit opinion. For further information please refer to the subsidiary accounts which are available on request.

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 44

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2020

34.
Financial Instruments
Financial assets
Measured at fair value through net income/expenditure:
Fixed asset listed investments (note 20)
Equity instruments measured at cost less impairment:
Fixed asset unlisted investments (note 20)
Financial liabilities
Measured at fair value through net income/expenditure:
Value Linked loans (note 26)
35.
Deferred income(note 24)
Deferred income brought forward at 1 January 2020
Deferred income added/(released) during the year
Deferrred income carried forward at 31 December 2020
The carrying amounts of the company's financial instruments are as follows:		 2020
2019
£'000
£'000
17,262
17,961
1,411
1,461
353
511
1,591
1,263
1,123
328
2,714
1,591

Deferred income relates to funds received for specific projects which are deferred until the expenditure is incurred.

45 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

36. Prior year comparative Statement of Financial Activities

Income and endowments from
Donations
Parish contributions
Archbishops' Council
Other donations
Charitable activities
Other activities
Investments
Other sources
Total income
Expenditure on
Raising funds
Charitable activities
Total expenditure
Net income before
investment gains
Net gains on investments
Net income/(expenditure)
Transfers between funds
Other recognised gains/(losses)
Adjustment of value linked loans
Actuarial gain/(loss) on defined benefit
pension scheme
Net movement in funds
Reconciliation of funds
Total funds at 1 January 2019
Total funds at 31 December 2019		 *** Restricted Funds
Benefice
Other
Unrestricted
Buildings
Stipends
Restricted
*Total Funds
Funds & Pastoral
Fund
Funds
2019
£'000
£'000
£'000
£'000
£'000
7,086
-
-
-
7,086
-
-
1,432
270
1,702
300
-
-
213
513
847
2
3
9
861
446
2
-
380
828
98
167
1,224
23
1,512
-
257
-
-
257
8,777
428
2,659
895
12,759
2
-
128
361
491
9,093
8
2,104
575
11,780
9,095
8
2,232
936
12,271
(318)
420
427
(41)
488
394
582
1,279
107
2,362
76
1,002
1,706
66
2,850
31
(839)
839
(31)
-
(1)
-
-
-
(1)
(169)
-
1,903
-
1,734
(63)
163
4,448
35
4,583
5,353
80,667
54,870
2,518
135,064
5,290
80,830
59,318
2,553
147,991

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 46

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

37. Statement of Financial Activities at Company level before consolidation of Trading subsidiaries, CEE and Trusts

Income and endowments from
Donations
Parish contributions
Archbishops' Council
Other
Charitable activities
Other activities
Investments
Other sources
Total income
Expenditure on
Raising funds
Charitable activities
Total expenditure
Net (expenditure)/income before
investment gains
Net gains/(losses) on investments
Net income/(expenditure)
Transfers between funds
Other recognised gains/(losses)
Adjustment of value linked loans
Actuarial gain/(loss)on defined benefit
pension scheme
Net movement in funds
Reconciliation of funds
Total funds at 1 January 2020
Total funds at 31 December 2020		 *** Restricted Funds
Benefice
Other
Unrestricted
Buildings
Stipends
Restricted
*Total Funds
Total Funds
Funds & Pastoral
Fund
Funds
2020
2019
£'000
£'000
£'000
£'000
£'000
£'000
6,160
-
-
-
6,160
7,086
215
-
1,365
518
2,098
1,702
339
-
-
160
499
513
934
1
4
-
939
861
507
2
-
-
509
448
74
134
1,206
-
1,414
1,489
123
149
-
-
272
257
8,352
286
2,575
678
11,891
12,356
-
-
107
-
107
130
6,523
6
4,472
661
11,662
11,662
6,523
6
4,579
661
11,769
11,792
1,829
280
(2,004)
17
122
564
(33)
116
(62)
-
21
2,255
1,796
396
(2,066)
17
143
2,819
-
-
-
-
-
-
(38)
-
-
-
(38)
(1)
(302)
-
(6)
-
(308)
1,734
1,456
396
(2,072)
17
(203)
4,552
5,290
80,830
59,318
259
145,697
141,145
6,746
81,226
57,246
276
145,494
145,697

47 | Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020

NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)

For the year ended 31 December 2020

38. Balance Sheet at Company level before consolidation of Trading subsidiaries, CEE and Trusts

Fixed Assets
Tangible assets
Investment assets
Glebe holding
Investments
Current Assets
Debtors
Pension scheme asset
Balances with Church
Commissioners
Central Board of Finance
Deposit Fund
Cash /(overdrawn balance) at bank
Creditors - Amounts
falling due within one year
Net Current Assets
Total Assets Less
current liabilities
Creditors - Amounts falling
due after more than one year
Net Assets excluding pension
scheme liability
Defined benefit pension scheme
liability
Net assets after pensions liability
Fund Balances
At 31 December 2020		 *** Restricted Funds
Benefice
Other
Unrestricted
Buildings
Stipends
Restricted
*2020
2019
Funds & Pastoral
Fund
Funds
Total
Total
£'000
£'000
£'000
£'000
£'000
£'000
*
4,250
78,656
5,792
-
88,698
88,339
-
-
37,047
-
37,047
37,050
2,711
4,603
10,744
-
18,058
19,013
6,961
83,259
53,583
-
143,803
144,402
1,448
23
874
9
2,354
2,980
105
-
-
-
105
354
-
15
-
-
15
-
96
302
-
2
400
367
(908)
(2,317)
3,995
1,342
2,112
1,146
741
(1,977)
4,869
1,353
4,986
4,847
603
56
592
1,077
2,328
1,928
138
(2,033)
4,277
276
2,658
2,919
7,099
81,226
57,860
276
146,461
147,321
353
-
-
-
353
511
6,746
81,226
57,860
276
146,108
146,810
-
-
614
-
614
1,113
6,746
81,226
57,246
276
145,494
145,697
6,746
81,226
57,246
276
145,494**
145,697

Norwich Diocesan Board of Finance Limited Annual Report and Financial Statements 2020 | 48

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