## Annual Report and Financial Statements **2021**
_Norwich Diocesan Board of Finance Limited_ Supporting the mission and ministry of the Diocese of Norwich
Transformed by Christ: **Prayerful, Pastoral, Prophetic**
www.dioceseofnorwich.org 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 2021**
## **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 Trustees’ 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 2021**
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
## **REFERENCE AND ADMINISTRATIVE INFORMATION**
**The Bishop’s Council of Trustees (Board of Directors)** Mark Jeffries (Chairman) **as at 21 May 2022** Mark Allbrook (appointed 6 October 2021) The Ven. Steven Betts Paul Cracknell (appointed 6 October 2021) Virginia Edgecombe (appointed 6 October 2021) The Very Revd. Jane Hedges (appointed 6 October 2021) The Revd. Canon Keith James (appointed 4 April 2022) Kandara Kammoun Susan Martin Captain Anthony M. Poulter OBE RN The Revd. Matthew Price (appointed 6 October 2021) The Revd. Dr Patrick Richmond Lindsey Rix (appointed 6 October 2021) Angela Robson The Rt. Revd. Dr Jane Steen (appointed 6 October 2021) The Revd. Canon Simon Stokes Patricia Temple-Crowe (appointed 6 October 2021) The Revd. Stephen Thorp (appointed 6 October 2021) The Rt. Revd. Graham Usher The Rt. Revd Alan Winton (appointed 6 October 2021) Thompson Zulu (appointed 6 October 2021)
|**Diocesan Secretary (Chief Executive)**|Tim Sweeting|
|---|---|
|**Director of Finance**|Susan 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 (Benefact Group), Benefact|
||House, 2000 Pioneer Avenue, Gloucester Business Park,|
||Brockworth Gloucester, GL3 4AW|
|**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 2021** | 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 making a major contribution to Parliament's work. They are known as Lords Spiritual.
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 National Church Institutions**
There are seven national administrative bodies that work together to support the mission and ministries of the Church. These are called National Church Institutions (NCIs).
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.
Lambeth Palace is the NCI accommodating the home and office of the Archbishop of Canterbury.
Bishopthorpe Palace is the NCI accommodating the home and office of the Archbishop of York.
The National Society for Promoting Religious Education is the Education Department for the Church of England.
The Church of England Central Services look after the national HR, Finances and Resources, IT, Legal, Communications, and Record Centre.
## **The Cathedral**
The Cathedral is the mother church of the diocese and legally is constituted as a separate charity. 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, the other NCI’s 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 2021**
## **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:
- consider matters affecting the Church of England in the diocese;
- act as a forum for debate of Christian opinion on matters of religious or public interest;
- advise the bishop where requested;
- deal with matters referred by General Synod;
- provide for the financing of the diocese.
## **Deanery Synod**
Deanery Synod has two houses, laity and clergy, and its role is to:
- respond to requests from General Synod;
- where appropriate, give effect to the decisions made by the Diocesan Synod;
- consider matters affecting the Church of England by drawing together the views of the parishes within the deanery;
- act as a channel of communication to express the views of parishes to Diocesan Synod and thence to General Synod;
- raise with Diocesan Synod such matters as it considers appropriate; and
- elect members of the deanery to the Diocesan Synod and of the diocese to General Synod.
## **The Bishop’s Council**
Under the constitution of the Diocesan Synod, Bishop’s Council (now a function of the Bishop’s Council of Trustees) has the following functions:
- To act as the Standing Committee of Diocesan Synod and to plan the business of the Synod, to prepare the agenda for its sessions and to circulate to members information about matters for discussion;
- To initiate proposals for action by the Synod and to advise it on matters of policy, including effective communication of priorities, strategies and policies;
- To oversee and co-ordinate the work of all Diocesan Boards, Committees, Forums, Working Groups and responsible individuals; to ensure regular reporting to the Bishop’s Council and/or Diocesan Synod as appropriate;
- To receive an annual report from the Independent Chair of the Diocesan Safeguarding Advisory Panel about the panel’s work and an assessment of all aspects of safeguarding within the diocese;
- To oversee and review the workings of the Synodical process, with particular attention to the connection between Deanery, Diocesan and General Synods;
- Subject to the directions of the Synod, to transact the business of the Synod when the Synod is not in session;
## **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 2021** | 4
## **CHAIRMAN’S STATEMENT IN ANNUAL REPORT 2021**
## **Welcome**
It is a great pleasure to welcome Tim Sweeting, our new Diocesan Secretary who joined us in September 2021. We look forward to working with Tim whose experience from his previous role as Chief Executive of YMCA Norfolk is invaluable as we work on the delivery of the strategies to realise the vision approved by Diocesan Synod to be _Transformed by Christ: Prayerful, Pastoral, Prophetic._ We wish Tim all the very best as he looks to inspire and develop the parish support team to maintain the delivery of high-quality support for parishes.
## **Income and expenditure**
You will see from the accounts that in 2021 the Diocese received a total of £6.52m in Parish Share, 82.3% of the amount requested. Whilst this is a decrease of £566,170 compared to pre-pandemic receipts of 2019, and £1.406m less than the requested amount, it is an increase when compared to receipts in 2020 of £359,928 or 5.84%, an extraordinary achievement.
The Diocesan financial statements are complex and include the consolidation of trading subsidiaries, large yearend pension revaluations and stock market movements. This makes it difficult to see the true operating position. We have therefore included a summary on page 7 in the appendix to this report which shows that the operating deficit for 2021, excluding year end pension scheme revaluations, movement in stock market valuations, property sales and subsidiary company results, is £520k (2020: £708k). In addition to adopting a more streamlined governance structure, a range of steps have been taken to address the deficit and to put the finances of the diocese on a sustainable footing. These are summarised on pages 12 and 13 of the Trustees’ report. It is worth highlighting here that:
- redeployment to cover vacancies has resulted in 15 fewer stipendiary clergy;
- the Diocesan parish support team was restructured centrally to achieve a reduction of 12 roles through redundancy and not replacing leavers;
- a significant reduction in central procurement, training and events costs has been achieved with more training shifting online;
- savings in travel costs, meeting costs and printing costs were achieved due to home working; and
- various pieces of work have been discontinued, such as the production of ‘The Magazine’, various Diocesan events and local funded partnerships with the Church Army.
Inevitably, we now have fewer resources to support our parishes, schools and chaplaincies and we are therefore particularly indebted to all those across the Diocese who are working under considerable pressure to deliver mission and ministry.
The pandemic has delayed plans for our Church Planting and Revitalisation Project. The Diocese was originally awarded £1.98m in 2019 towards the project out of the Archbishops’ Council’s Strategic Development Fund. Much work has been undertaken to reset and refocus the project with the funding adjusted accordingly. The budget for the entire project has been reduced from £3.2m to £1.8m, with the grant funding reducing from £1.98m to £1.23m and the Diocese contribution reducing by over £600k.
We continue to review all areas of expenditure to achieve best value for money.
Extra income has been secured during the year to mitigate against what could have been a significantly larger deficit including:
- a sustainability grant of £200k from the Archbishops’ Council to help with the impact of COVID-19;
- strategic ministry funding to fund two additional curates; and
- an increase in profits generated by our trading subsidiary, Spire Support Services, before corporation tax from £29k in 2020 to £89k this year.
5 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **CHAIRMAN’S STATEMENT IN ANNUAL REPORT 2021**
During the year, both Spire and our other trading subsidiaries, NDBF (Easton) Limited and Norwich Glebe Property Limited, have continued to develop, the results of which are shown in note 33 on page 44 of these financial statements. These three companies were formed to provide alternative sources of income for the Diocese and to relieve the pressure on Parish Share. All generate a profit which is transferred to the Diocese under the corporate gift aid scheme.
We are reviewing our investment policies and strategies to maximise income. We are also developing a revised business plan for our trading subsidiary, Spire Support Services Ltd, to deliver efficiencies and increase profitability. We aim to reduce the number of buildings the parish support team use and to generate new external income. Our Academy Trust staff in DNEAT and St Benet’s, along with their support staff from DONESC, have recently moved from the Diocesan Offices at Easton to larger premises at East Tuddenham to accommodate their growth. The Academy Trusts are separate legal entities with their own funding, staff teams and costs, and the move results in the Diocese losing income for use of the vacated buildings of £48k pa which we need to replace.
## **Assets and liabilities**
At the 31 December 2021 our share of the deficit on the national clergy pension scheme was £293k, a reduction of £321k from the deficit of £614k at 31 December 2020. These large adjustments in our financial statements are required by accounting regulations and can be seen in the summary on page 7 of this report. The national clergy pension scheme is currently being revalued and we will know the results of this later in 2022. We have been notified that the contribution rate has decreased from 39.9% of the national minimum stipend for each clergy member to 36% from 1 April 2022. We hope that there may be a further reduction in 2023 and will budget for that accordingly when we know more. Full details of the pension costs are shown in note 28, on pages 39 to 42.
The value of net assets at 31 December 2021, excluding the contribution from trading subsidiaries, is set out in note 38 on page 48 and amounts to £149.2m. Our fixed assets, comprising houses, glebe land and an investment portfolio, equate to £145m, which leaves £4.2m liquidity to run the Diocese on a day-to-day basis. We have again taken a strategic approach to the use of our restricted funds, and for the second year have utilised the Stipends Fund to pay stipends in their entirety in 2021, rather than apportioning some costs to general funds as in previous years. This has enabled us to release some further free reserves and add some security to our very volatile cash flow position. A full review of our residential properties, which will include assessing their environmental impact, is underway.
You will see from the summary on page 7, that over £2m of the increase in net assets relates to the increase in stock market values. This is a snapshot in time: we saw a slump in values at 31 December 2020, then the increase shown at 31 December 2021, then in the first quarter of 2022 a significant reduction as markets have reacted to worldwide situations such as the heart-breaking war in Ukraine.
You will also note the realised gains on the disposal of properties of £927k. This reflects the difference between the frozen values reflected on our balance sheet and the proceeds of sale. This relates to the sale of six properties, with over £500k of this figure attributable to the sale of the former Bishop of Lynn’s house at Castle Acre.
## **Parish Giving**
We launched the Parish Giving Scheme in our Diocese early in 2022 and I commend this to all parishes. The national scheme to support stewardship is now used in over three-quarters of dioceses and has an established reputation for enabling parishes to achieve greater financial security through annual income growth as well as supporting parish treasurers.
## **A big thank you**
In my first year as DBF Chair, I have been struck by the enthusiasm, generosity, and sheer hard work across our parishes. On behalf of the Trustees, I also want to pay tribute to the diocesan staff who have worked tirelessly to support our parishes. These collective efforts are hugely appreciated, especially as they have been against the backdrop of a very challenging year. Thank you.
**MARK JEFFRIES**
21 May 2022
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 6
## **APPENDIX TO CHAIRMAN'S STATEMENT IN ANNUAL REPORT 2021**
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**
**2021**
**£'000**
Income
12,386
Expenditure
(11,872)
**Operating surplus/(deficit)**
**514**
Realised gains on sale of properties
- Board
927
**Net income**
**1,441**
Adjustment of value linked loans
(37)
Actuarial (loss)/gain on defined benefit pension scheme
153
Gains on investment assets:
Sale of glebe property (realised gains)
38
Quoted and unquoted investments
Realised
105
Unrealised
2,025
Increase/(decrease) in funds
3,725
**Reconciliation of Management accounts operating position**
Net income (shown above)
1,441
FRS102 Pension disclosure - Clergy Scheme
(303)
FRS102 Pension disclosure - Company Scheme
(231)
Transfer of funds CPR project
(500)
Realised gains on sale of properties
- Board
(927)
**Operating deficit**
**(520)**|**_Board_**
**_2020_**
**_£'000_**
_11,619_
_(11,769)_
**_(150)_**
_272_
**_122_**
_(38)_
_(308)_
_62_
_(361)_
_320_
_(203)_
122
(505)
(53)
-
(272)
**(708)**|**Variances**
**£'000**
767
(103)
**664**
655
**1,319**
1
461
(24)
466
1,705
3,928
1,319
202
(178)
(500)
(655)
188|
|---|---|---|
7 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **THE TRUSTEES’ AND DIRECTORS’ REPORT INCORPORATING THE STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2021**
The Trustees’ 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 2021.
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 917,000 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 143,000) 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 570 parishes and 650 church buildings.
## _**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, 19 June 2010 and 10 June 2017). 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 certain diocesan functions are now undertaken by the Bishop’s Council of Trustees acting as the Bishop’s Council, the Executive Committee, the Diocesan Mission and Pastoral Committee and the Parsonage Board.
The Bishop’s Council is the Standing Committee of Diocesan Synod and its functions are listed on page 4.
The Executive Committee act as Trustees’ and are also directors for the purposes of company law, their functions in pursuit of Norwich Diocesan Board of Finance Limited’s charitable objects are:
- Management of the funds and property of the Diocese;
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 8
## **THE TRUSTEES’ AND DIRECTORS’ REPORT INCORPORATING THE STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2021- continued**
## **Structure, governance and management (continued)**
- Consideration and approval of the Financial Policy and Strategy for the Diocese as prepared by the Finance Committee;
- Preparation of annual estimates of expenditure and budgets, including advising on action needed to raise the income necessary to finance expenditure;
- Oversight of expenditure by bodies in receipt of Diocesan Synod’s funds against estimates of expenditure approved by Diocesan Synod;
- Advising Diocesan Synod of the financial aspects of its policy and on any other matters referred to it;
- Statutory filings to the Charity Commission and Companies House;
- Fulfilling employer’s responsibilities and compliance with any legal duties to which the Diocese may be subject;
- Holding responsibility for payment of clergy stipends;
- Carrying out any other functions delegated by Diocesan Synod.
The Diocesan Mission and Pastoral Committee _**,**_ is responsible for the review of ministry deployment which may include pastoral reorganisation, sharing agreements or mission planning, taking account of finance, clergy numbers and new patterns of ministry. The Committee advises the Bishop and Diocesan Synod on proposed strategy. It is also responsible for church buildings other than matters for the consistory court or the work of the Diocesan Advisory Committee for the Care of Churches.
The Bishop’s Council of Trustees, acts as the Parsonages Board and provides for the responsibilities of the board to be undertaken by a committee known as the Property Committee.
The Bishop’s Council of Trustees 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 Bishop’s Council of Trustees 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 Trustees and provided houses, including the payment of council tax and maintenance costs, as part of normal clergy remuneration.
## _**Committee structure**_
During 2020 a full review of governance structures was carried out which has resulted in a revised committee structure in 2021, as approved by Diocesan Synod on 20 March 2021.
Those that follow are statutory committees:
_**Glebe Committee**_ **,** 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**_ , 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.
_**The Board of Education,**_ is established under the Diocesan Boards of Education Measure 2021. Its functions include: the promotion of education consistent with the faith and practice of the Church of England; the promotion of religious education and religious worship in schools and academies; the promotion of Church schools and academies in the diocese; and advice to school governors on any matter affecting Church schools and academies.
_**The Board of Patronage**_ is constituted under Schedule 3 of the Patronage (Benefices) Measure 1986. The exercise of Patronage, i.e., the right to present a priest to a benefice, is an historic foundation element of the Church of England carried over from the pre-Reformation Church. Today it forms part of a system of checks and balances which ensures the continuance of a broad spectrum of belief and practice within that Church, not least traditional orthodoxy.
_**The Vacancy in See Committee,**_ the requirement for, and role, functions and constitution of, a diocesan Vacancy in See Committee is set out in the Vacancy in See Regulation 1993 (as amended). It only meets when the post of diocesan bishop is vacant.
9 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **THE TRUSTEES’ AND DIRECTORS’ REPORT INCORPORATING THE STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2021- continued**
## **Structure, governance and management (continued)**
In addition to the statutory committees, currently there are also the following committees:
_**Agenda Planning Group,**_ sets the agenda for the Bishop’s Council of Trustees and produces a draft agenda for Diocesan Synod for the Bishop’s Council of Trustees to approve.
_**Asset Management Committee,**_ brings together matters to do with diocesan property, investments and Glebe, including strategic development proposals. It takes an integrated approach to maximise the effective management and growth of all types of diocesan assets.
_**Audit Risk and Assurance Committee,**_ 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.
_**Finance Committee,**_ has delegated responsibility for much of the work of the Executive Committee. It is responsible for developing a financial policy and strategy for the Diocese for approval by the Bishop’s Council of Trustees.
_**Nominations Committee,**_ makes recommendations to the Bishop’s Council of Trustees for the appointment of candidates for non-elected membership of the Diocesan Synod, the Bishop’s Council of Trustees, and other committees of the Diocese of Norwich. It also approves, on behalf of the Bishop’s Council of Trustees, a number of specific appointments, namely the Diocesan Secretary, staff at Director level, and the Chairs of some of the boards and committees
_**Property Committee,**_ undertakes the responsibilities and work of the Parsonages Board. This includes provision, maintenance, upkeep and improvement of Parsonage houses; considerations (in consultation with the Asset Management Committee) of acquisition and disposal or exchange of Parsonage houses and letting such houses during vacancies. The Committee also deals with corporate property.
_**Remuneration Committee,**_ makes recommendations to the Bishop’s Council of Trustees, for remuneration of stipendiary clergy licensed in the Diocese of Norwich, and of staff employed by the Norwich Diocesan Board of Finance Limited and its subsidiaries.
_**Safeguarding Advisory Panel,**_ provides a source of independent advice and expertise on safeguarding policies, procedures and practices to the diocesan bishop and other senior clergy and officials, and ensures the implementation of the current House of Bishops’ policy and practice guidance.
## **Recruitment and appointment of Trustees**
The Bishop’s Council of Trustees 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:
- The Chair of the Board, to be nominated by the Bishop’s Council;
- The Deputy Chair of the Board, to be nominated by the Bishop’s Council;
- The Treasurer of the Board, to be nominated by the Bishop’s Council;
- An Archdeacon, to be nominated by the Bishop’s Council;
- The Clerical Vice-President of the Diocesan Synod;
- The Lay Vice-President of the Diocesan Synod;
- Three lay members of the Diocesan Synod and three clerical members of the Diocesan Synod to be elected by the Diocesan Synod;
- Up to three additional persons as may be co-opted by the Executive Committee from time to time.
## _**Induction and training of Trustees**_
The Trustees are 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.
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 10
**THE TRUSTEES’ AND DIRECTORS’ REPORT INCORPORATING THE STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2021- continued**
## **Structure, governance and management (continued)**
## _**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 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.
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 across the Diocese.
11 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **THE TRUSTEES’ AND DIRECTORS’ REPORT INCORPORATING THE STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2021- continued**
## **a) Activities, Benefits and Achievements (continued)**
The key activities may be summarised as:
- To seek a constructive and positive relationship with the people of the Diocese;
- To communicate effectively across all areas of Diocesan activity;
- To exercise and promote good stewardship of Diocesan resources to support growth;
- To provide mechanisms for evaluating performance through a regular programme of reflection and review.
## _**Public benefit**_
The Trustees are 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 Trustees 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.
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 2021**
The COVID-19 pandemic continued to have a significant impact on our work during 2021, with more stringent restrictions in the earlier months of the year. This continued impact our parish incomes, 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 improved when compared to 2020 but we have seen a notable decrease in parish share income when compared with pre-pandemic levels (see later operational performance on page 13). The Trustees instructed a review of central services, carried out by two external consultants and the final report was issued in February 2021. This has led to a total reduction in 12 diocesan lay staff through redundancy, restructuring roles and not replacing those that have left. We have also made significant procurement savings. The reduction in posts and procurement savings will produce total annual savings of c. £380k.
A review of clergy deployment and expenditure was led by the Bishop of Thetford and is currently being implemented, leading to 15 stipendiary clergy posts not being replaced.
## **Achievements during the year were:**
- A new Diocesan Vision was approved by Diocesan Synod in March 2021.
- A new Strategic Programme Manager (funded by external grants) was appointed in May 2021 to support the development of strategies to deliver the Vision.
- Significant progress has been made on our Vision and Priorities, so that our life together is transformed by Christ, Prayerful, Pastoral and Prophetic and further work will be presented to Diocesan Synod in June 2022.
- Our new Diocesan Secretary joined us in September 2021.
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 12
## **THE TRUSTEES’ AND DIRECTORS’ REPORT INCORPORATING THE STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2021- continued**
## **Achievements and performance (continued)**
- The Bishop’s Council of Trustees agreed to implement the Parish Giving Scheme in the Diocese to promote generous giving within our communities and a new Generous Giving Advisor was appointed in October 2021 (funded by external grants) to support this.
- A grants programme for local mission and ministry saw grants given to 27 churches worth over £87k.
- We made a successful application for sustainability funding and were awarded a grant of £200k (2020: £215k).
- A new governance structure to improve the efficiency and effectiveness of our governance practice was agreed and implemented in September 2021, involving elections and appointment of new members.
- The Trustees of The Diocesan Churches Trust met regularly to review applications to the Trust and its financial obligations;
- The Board has continued to actively support two trading subsidiaries during 2021 both of which have seen a surplus position for 2021. NDBF (Easton) Limited (see note 33 on page 44) also become active during 2021;
- The Board has continued to help to support the Diocese of Norwich Education and Academies Trust and St Benet’s Multi-Academy Trust;
## _**Operational performance**_
Norwich Diocesan Board of Finance Limited received 82.3% of parish share requested for the year of £7.926m, a shortfall of £1.406m. This is an increase of £360k or 5.84% when compared with 2020 receipts, but still a decrease of £566k (7.99%) when compared with 2019.
The operating deficit at company level for 2021 is £520k (after adjusting for FRS102 pension adjustments and nonoperational property surpluses see page 7).
Steps taken to mitigate the level of deficit were:
- we have been able to secure additional sustainability grant funding of £200k from Archbishops Council to help with the impact of COVID-19;
- we secured strategic ministry funding to fund two additional curates;
- 12 lay staff posts were restructured, not replaced, or made redundant;
- we utilised the government’s Job Retention Scheme for Diocesan lay staff, receiving funding of £23k;
- stipendiary clergy numbers have decreased as noted on page 12;
- events, such as the Norfolk Show have not been run, and more training has taken place online, creating cost savings;
- travel costs, meeting costs and printing costs have all significantly reduced due to hybrid working.
## _**Investment performance – overall performance**_
The overall value of Diocesan investment assets increased by £2,162,000 during 2021, as compared with a decrease of £927,000 in 2020.
In 2021 the operational activities of the Diocese were financed by £655,000 from interest and dividends (2020: £606,000).
## _**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 £796,000 (2020: £827,000).
Investment in equity and fixed interest funds were valued at £12 million at 31 December 2021 (2020: £10.7 million) The unrealised gain in the value of investments during the year amounted to £1,239,000 (2020: unrealised gain £93,000). Dividends and interest receivable amounted to £395,000 (2020: £379,000).
## _**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 £9.1 million at 31 December 2021 (2020: £8.1 million), an increase of £1m or 12.3%. Dividends and interest receivable amounted to £238,000 (2020: £227,000).
13 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **THE TRUSTEES’ AND DIRECTORS’ REPORT INCORPORATING THE STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2021- continued**
## **Achievements and performance (continued)**
## _**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 2021 were £390,000 (2020: £353,000).
## _**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.
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 Trustees 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 £14.3 million (2020: £12.3 million) and expenditure amounted to £12.7 million (2020: £12.3 million).
The Statement of Financial Activities (SOFA) for the year shows net income of £1,523,000 (2019: net expenditure £28,000) 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 an increase in the balance sheet total of £3,897,000.
The Norwich Diocesan Board of Finance Ltd share of the Church of England Pension Scheme defined benefit funding deficit at 31 December 2021 was £293k (2020: £614k) see note 28 to the financial statements.
During the year, total fund balances increased to £151.6 million.
## _**Principal funding sources**_
Around 53% of the income of the Board comes from the Parish Share, 16% from Archbishops’ Council for Low Income Communities (LINC), transition funding and other grants,12% from investment income (including glebe rent), and 5% from statutory fees.
## _**Going concern**_
After making enquiries the Trustees 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.
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 14
## **THE TRUSTEES’ AND DIRECTORS’ REPORT INCORPORATING THE STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2021- continued**
## **Financial review (continued)**
## _**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 Trustees have delegated the functions and duties in relation to Investment Management to the Asset Management Committee.
The members of the Asset Management Committee are appointed by the Bishop’s Council of Trustees and are made up of the Chairs of the Board of Finance, Property Committee, Glebe Committee, a member of Bishop’s Staff, two people agreed by the Nominations Committee to be qualified by ability and practical experience in matters relating to investments and up to two others co-opted when required, in consultation with the Nominations Committee. The members of the Asset Management Committee are guided by the best practice advice issued by the Charity Commission for the investment of Charitable Funds.
The Board’s investment policies are currently under review, at present they are based on two key policies:
Long-term responsibilities and growth – the Trustees 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.
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 current overall aim is for a return of RPI plus 3%.
Ethical investment – the Trustees 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 166 parochial stipendiary clergy, the upkeep of approximately 260 houses, and the employment of 43 (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 2021, comprising the income funds freely available for general purposes (and which are not yet spent, committed or restricted) amounted to £6.7 million as compared with £2.8 million at the end of the previous year. Free reserves include free designated reserves of £141,000. The increase relates to the increase in stock market values and also the permitted use of accumulated income built up in the restricted Stipends fund to pay for clergy stipends for the second year (2020 and 2021), therefore releasing general unrestricted free reserves. Stock market values are volatile as they react to worldwide situations. The Trustees do not consider it necessary to make plans to spend additional reserves due to the volatility of the markets.
The Trustees have reviewed the reserves policy and recommend that the free reserves are approximately £4 million being four and a half months expenditure within the Capital and General fund and designated funds, including future stipend payments.
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 2021 amounted to £4 million (2020: £2.6 million), again the increase relates to stock market values at 31 December 2021.
Total other restricted funds excluding tangible assets and long-term liabilities at 31 December 2021 amounted to £54 million (2020: £54 million).
15 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **THE TRUSTEES’ AND DIRECTORS’ REPORT INCORPORATING THE STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2021- continued**
## **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 continually reviewed.
- Continue to develop, then implement the Vision priorities and strategy for the diocese;
- Review investment policies and strategies, including the introduction of total return investing;
- Promote and encourage the benefits of the Parish Giving Scheme for regular gifts to our parishes;
- Review our residential property policies and strategy, including environmental impact;
- Continue to run workshops with our PCC Treasurers to share ideas and promote good practice;
- Continue to review all areas of expenditure to maximise value for money offered;
- Collaborate with other dioceses to enhance the quality and resilience of our services;
- Introduce a range of measures to highlight performance of our teams;
- Continue to support the Diocesan Churches Trust, to help to discover an appropriate solution for Churches in very small communities and with tiny congregations, so that the incumbent and the PCC are relieved of the burden and responsibility of maintenance with its associated running costs.
- Continue to support and develop the trading subsidiary companies, including reviewing business plans;
## **d) Principal Risks and Uncertainties**
The Trustees confirm that the major risks to which Norwich Diocesan Board of Finance Limited is exposed, as identified by the Trustees 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 Trustees 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 Trustees.
## **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 revalued 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 Trustees therefore consider the most suitable accounting policy is to capitalise such properties as expendable endowment assets and to carry them at their preexisting 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.
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 16
## **THE TRUSTEES’ AND DIRECTORS’ REPORT INCORPORATING THE STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2021- continued**
## **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.
No direct contact is made with the public regarding fundraising activities. All advertising is carried out via Diocesan publications, social media or websites. No complaints were received regarding fundraising activities.
## **Statement of Trustees’ Responsibilities**
The Bishop’s Council of Trustees who are also directors of Norwich Diocesan Board of Finance Limited for the purposes of company law) are responsible for preparing the Trustees report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company law requires the Trustees 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 Trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charities Statement of Recommended Practice 2015 (FRS102);
- make judgements and estimates that are reasonable and prudent;
- state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Board will continue in operation.
The Trustees are 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 Trustees are 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 Trustees are aware:
- there is no relevant audit information of which the charitable company’s auditor is unaware; and
- the Trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.
The Trustees are 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 Bishop’s Council of Trustees**
Members of the Bishop’ Council of Trustees, 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. The Revd. Michael Asquith, Robin Back, Ray Hollands, Patricia Menaul, The Revd. Jeremy Sykes and Julian Taylor resigned on 6 October 2021. The Ven. Karen Hutchinson was appointed on 6 October 2021 and resigned on 4 April 2022. The Ven. Ian Bentley was appointed on 6 October 2021 and resigned on 16 May 2022.
## **Auditor**
A resolution to re-appoint Lovewell Blake LLP as auditor of the Board will be proposed at the Annual General Meeting on 16 June 2022.
The Trustees’ report (incorporating Strategic Report) was approved by the Board on 21 May 2022 Signed by Order of the Board
**TIM SWEETING,** Secretary
17 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **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 2021 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:
- give a true and fair view of the state of the group’s and parent charitable company’s affairs as at 31 December 2021, and of the group’s incoming resources and application of resources, including its income and expenditure, for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **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 Trustees’ 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 and 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 Trustees’ Report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the Trustees’ Report. 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:
- the information given in the Trustees’ Report (incorporating the strategic report and the directors’ report) for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
## **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 2021** | 18
## **INDEPENDENT AUDITOR’S REPORT (continued)**
- adequate accounting records have not been kept by the parent charitable company, or returns adequate for our audit have not been received from branches not visited by us; or
- the parent charitable company’s financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors’ remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.
## **Trustees’ Responsibilities**
As explained more fully in the Trustees’ Responsibilities Statement (set out on page 17), the Trustees (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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
- Enquiry of management and those charged with governance;
- Enquiry of entity staff compliance functions to identify any instances of non-compliance with laws and regulations;
- • Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.
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
_Lovewell Blake LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006._
21 May 2022
19 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES For the year ended 31 December 2021**
||||*** Restricted Funds**|*** Restricted Funds**|*****|||
|---|---|---|---|---|---|---|---|
||||Benefice||Other|||
|||Unrestricted|Buildings|Stipends|Restricted|**Total Funds**|_Total Funds_|
||**Note**|Funds|& Pastoral|Fund|Funds|**2021**|_2020_|
|||£'000|£'000|£'000|£'000|**£'000**|_£'000_|
|**Income and endowments from**||||||||
|**Donations**|2|||||||
|Parish contributions||6,520|-|-|-|**6,520**|_6,160_|
|Archbishops' Council||368|-|1,305|361|**2,034**|_2,098_|
|Other donations||316|-|-|622|**938**|_499_|
|**Charitable activities**|3|861|-|3|-|**864**|_939_|
|**Other activities**|4|600|1|-|942|**1,543**|_886_|
|**Investments**|5|84|154|1,191|22|**1,451**|_1,433_|
|**Other sources**|6|543|384|-|1|**928**|_272_|
|**Total income**||9,292|539|2,499|1,948|**14,278**|_12,287_|
|**Expenditure on**||||||||
|**Raising funds**|7|-|-|150|861|**1,011**|_436_|
|**Charitable activities**|8|6,507|12|4,541|684|**11,744**|_11,879_|
|**Total expenditure**||6,507|12|4,691|1,545|**12,755**|_12,315_|
|**Net income/(expenditure) before**||||||||
|**investment gains**||2,785|527|(2,192)|403|**1,523**|_(28)_|
|**Net gains on investments**|13|293|555|1,320|90|**2,258**|_52_|
|**Net income/(expenditure)**|14|3,078|1,082|(872)|493|3,781|_24_|
|**Transfers between funds**|15|-|-|-|-|**-**|_-_|
|**Other recognised gains/(losses)**||||||||
|Adjustment of value linked loans|26|(37)|-|-|-|**(37)**|_(38)_|
|Actuarial gain/(loss) on defined benefit||||||||
|pension scheme|28|135|-|18|-|**153**|_(308)_|
|**Net movement in funds**||3,176|1,082|(854)|493|**3,897**|_(322)_|
|**Reconciliation of funds**||||||||
|Total funds at 1 January 2021||6,746|81,226|57,246|2,451|**147,669**|_147,991_|
|**Total funds at 31 December 2021**||9,922|82,308|56,392|2,944|**151,566**|_147,669_|
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 2021** | 20
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED CONSOLIDATED SUMMARY INCOME AND EXPENDITURE ACCOUNT For the year ended 31 December 2021**
|Total income (note 1 below)
Expenditure
**Operating surplus/(deficit) for the year**
Interest receivable
Net gains on investment assets
**Surplus/(deficit) for the year**
**Other comprehensive income:**
Revaluation of fixed assets
Net assets transferred from endowments
Defined benefit scheme actuarial gains/(losses)
**Total comprehensive income for the year**|2021
£'000
13,345
(12,755)
590
5
2,258
2,853
(37)
928
153
3,897|_2020_
_£'000_
_12,011_
_(12,315)_
_(304)_
_4_
_52_
_(248)_
_(38)_
_272_
_(308)_
_(322)_|
|---|---|---|
All income and expenditure relates to continuing activities
Total income comprises £8,747,000 for unrestricted funds and £4,598,000 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 surplus for the year of £2,853,000 comprises £2,535,000 net surplus of Unrestricted Funds and £318,000 net surplus 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|2021
£'000
14,278
(5)
(928)
13,345|_2020_
_£'000_
_12,287_
_(4)_
_(272)_
_12,011_|
|---|---|---|
The notes on pages 24 to 48 form part of these accounts.
21 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
Company registration number: 88175
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED CONSOLIDATED BALANCE SHEET At 31 December 2021**
||||*** Restricted Funds**|*** Restricted Funds**|*****|||
|---|---|---|---|---|---|---|---|
||||Benefice||Other|||
|||Unrestricted|Buildings|Stipends|Restricted|**2021**|_2020_|
||Notes|Funds|& Pastoral|Fund|Funds|**Total**|_Total_|
|||£'000|£'000|£'000|£'000|**£'000**|_£'000_|
|**Fixed Assets**||||||||
|Tangible assets|18|3,616|78,313|5,875|517|**88,321**|_89,216_|
|Investment assets||||||||
|Glebe holding|19|-|-|37,023|55|**37,078**|_37,102_|
|Investments|20|3,004|5,156|11,995|907|**21,062**|_18,876_|
|||6,620|83,469|54,893|1,479|**146,461**|_145,194_|
|**Current Assets**||||||||
|Stock|21|-|-|-|9|**9**|_25_|
|Debtors|22|1,548|24|391|826|**2,789**|_2,545_|
|Pension scheme asset||471|-|-|-|**471**|_105_|
|Balances with Church||||||||
|Commissioners||-|14|-|-|**14**|_15_|
|Central Board of Finance||||||||
|Deposit Fund||137|302|-|78|**517**|_476_|
|Cash/(overdrawn balance) at bank||2,973|(1,445)|1,499|4,200|**7,227**|_5,291_|
|**Creditors**- Amounts||5,129|(1,105)|1,890|5,113|**11,027**|_8,457_|
|falling due within one year|24|1,437|56|98|3,171|**4,762**|_4,538_|
|**Net Current Assets**||3,692|(1,161)|1,792|1,942|**6,265**|_3,919_|
|**Total Assets Less**||||||||
|**current liabilities**||10,312|82,308|56,685|3,421|**152,726**|_149,113_|
|**Creditors**- Amounts falling||||||||
|due after more than one year|25|390|-|-|477|**867**|_830_|
|**Net Assets excluding pension**||||||||
|**scheme liability**||9,922|82,308|56,685|2,944|**151,859**|_148,283_|
|**Defined benefit pension scheme**||||||||
|**liability**|28|-|-|293|-|**293**|_614_|
|**Net assets after pension liability**||9,922|82,308|56,392|2,944|**151,566**|_147,669_|
|**Fund Balances**||||||||
|At 31 December 2021 (page 20)|27|9,922|82,308|56,392|2,944|**151,566**|_147,669_|
Approved by the Bishop's Council of Trustees on 21 May 2022 and signed on its behalf by
Chair
Diocesan Secretary
**Mark Jeffries …………………….. Tim Sweeting ……………………..**
**……………………..**
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 22
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 2021**
|**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 2021
Cash and cash equivalents at 31 December 2021
**Reconciliation of net income to net cash flow**
**from operating activities**
**Net income/(expenditure)**
Depreciation
Interest paid
Net gain on the sale of fixed assets
Dividends, interest and rent from investments
Decrease in stock
(Increase)/decrease in debtors
Increase in creditors
FRS 102 Non-cash pension disclosures
**Net cash (used in)/provided by 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 in net debt in the reporting period
Net debt at 1 January 2021
Net debt at 31 December 2021|2021
£'000
(1,360)
1,451
(8)
3,025
(1,228)
1,743
(1,647)
3,336
-
-
-
1,976
5,782
7,758
1,523
25
8
(927)
(1,451)
16
(244)
224
(534)
(1,360)
7,227
531
7,758
1,976
(37)
1,939
4,952
6,891|_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_|
|---|---|---|
23 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
## **NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2021**
## **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.
- i) **Parish Share** is recognised as income of the year in respect of which it is receivable, which includes amounts received in respect of the year up to the following 31 January.
- ii) **Rent** receivable is recognised as income in the period to which it relates. Glebe rents are collected by the Board and the income, net of related expenditure, is paid by instalments to the Church Commissioners in accordance with the Endowments and Glebe Measures 1976. The amounts received by the Church Commissioners are then credited to the Stipends Fund. Glebe rents are shown gross in the Statement of Financial Activities.
- iii) **Interest and dividends** are recognised as income when receivable.
- iv) **Grants** received which are subject to pre-conditions for entitlement specified by the donor which have not been met at the year-end are included in creditors to be carried forward to the following year.
- v) **Parochial fees** are recognised as income of the year to which they relate, which include assigned fees received in respect of the year up to the following 31 January.
- vi) **Donations** other than grants are recognised when receivable **.**
- vii) **Gains on disposal of fixed assets for the Board’s own use** (i.e. non-investment assets) are accounted for as other income. Losses on disposal of such assets are accounted for as other expenditure.
## **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.
- i) **Costs of raising funds** are constrained to costs relating to the temporary renting out of parsonages and investment management costs of glebe and any other investment properties.
- ii) **Charitable expenditure** is analysed between contributions to the Archbishops’ Council, expenditure on resourcing mission and ministry in the parishes of the diocese and expenditure on education and Church of England schools in the diocese.
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 24
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
## **NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2021**
## **1. Accounting policies (continued)**
- iii) **Grants payable** are charged in the year when the offer is conveyed to the recipient except in those cases where the offer is conditional on the recipient satisfying performance or other discretionary requirements to the satisfaction of the Board, such grants being recognised as expenditure when the conditions attaching are fulfilled. Grants offered subject to such conditions which have not been met at the year end are noted as a commitment, but not accrued as expenditure.
- iv) **Support costs** consist of central management, administration and governance costs. The amount spent on raising funds and other activities is considered to be immaterial and all support costs are allocated to the purpose of charitable activities. Costs are allocated wherever possible directly to the activity to which they relate, but where such direct allocation is not possible, the remainder is allocated on an approximate staff time basis.
## 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 2021**
**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
**NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2021**
## **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 Trustees 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 2021** | 26
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
## **NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2021**
## **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.
- **Unrestricted funds** are the Board’s corporate funds and are freely available for any purpose within the charitable company’s objects, at the discretion of the Trustees. There are two types of unrestricted funds:
- **General funds** which the Board intends to use for the general purposes and
- **Designated funds** set aside out of unrestricted funds by the Board for a purpose specified by the Trustees
27 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
## **NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2021**
## **1. Accounting policies (continued)**
## **f) Fund balances (continued)**
- **Restricted funds** are income funds subject to conditions imposed by the donor as specific terms of trust, or else by legal measure.
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 Trustees Report.
**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 2021** | 28
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **For the year ended 31 December 2021**
|**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 82.3% of the allocation (2020: 77.3%)
**Archbishops' Council**
Lowest income communities and transition funding
Resourcing Ministerial Education
Strategic Development Funding
Sustainability funding
Strategic Capacity Funding
Strategic Ministry Funding
Grant towards PCR2 costs
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
Sale of option Easton development
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
**2021**
_2020_
£'000
£'000
£'000
£'000
**£'000**
_£'000_
7,926
-
-
-
**7,926**
_7,972_
(1,406)
-
-
-
**(1,406)**
_(1,812)_
6,520
-
-
-
**6,520**
_6,160_
-
-
1,304
-
**1,304**
_1,364_
-
-
-
238
**238**
_196_
-
-
-
123
**123**
_322_
200
-
-
-
**200**
_215_
98
-
-
-
**98**
_-_
40
-
-
-
**40**
_-_
30
-
-
-
**30**
_-_
-
-
1
-
**1**
_1_
368
-
1,305
361
**2,034**
_2,098_
140
-
-
-
**140**
_152_
101
-
-
-
**101**
_83_
45
-
-
-
**45**
_48_
-
-
-
59
**59**
_47_
-
-
-
563
**563**
_113_
30
-
-
-
**30**
_56_
316
-
-
622
**938**
_499_
664
-
3
-
**667**
_628_
174
-
-
-
**174**
_212_
23
-
-
-
**23**
_99_
861
-
3
-
**864**
_939_
506
1
-
21
**528**
_446_
-
-
-
357
**357**
_285_
-
-
-
515
**515**
_-_
-
-
-
-
**-**
_24_
-
-
-
49
**49**
_49_
94
-
-
-
**94**
_82_
600
1
-
942
**1,543**
_886_
83
154
391
22
**650**
_602_
1
-
4
-
**5**
_4_
-
-
796
-
**796**
_827_
84
154
1,191
22
**1,451**
_1,433_
543
384
-
1
**928**
_272_
543
384
-
1
**928**
_272_
9,292
539
2,499
1,948
**14,278**
_12,287_
*** Restricted Funds ***|
|---|---|
29 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **For the year ended 31 December 2021**
||**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
**NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**|**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
**NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**|**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
**NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**|**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
**NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**|**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
**NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**|**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
**NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**|**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
**NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**|**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
**NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**|**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
**NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**|**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
**NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**|**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**
**NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**|
|---|---|---|---|---|---|---|---|---|---|---|---|
||Benefice
Other
Unrestricted
Buildings
Stipends
Restricted **Total Funds**
_Total Funds_
Funds & Pastoral
Fund
Funds
**2021**
_2020_
£'000
£'000
£'000
£'000
**£'000**
_£'000_
**7.**
**Expenditure on raising funds**
**_Investment management costs_**
Glebe management charges
-
-
150
-
**150**
_107_
Asset management expenses
-
-
-
-
**-**
_-_
**_Trading expenses_**
Property support services
-
-
-
297
**297**
_280_
Easton development
-
-
-
515
**515**
_-_
Commercial property
-
-
-
49
**49**
_49_
-
-
150
861
**1,011**
_436_
**8.**
**Expenditure on charitable activities**
**_Contributions to Archbishop's Council_**
Training for ministry
453
-
-
-
**453**
_354_
National Church responsibilities
288
-
-
-
**288**
_299_
Grants and provisions
11
-
-
-
**11**
_9_
752
-
-
-
**752**
_662_
**_Expenditure on resourcing ministry and_**
**_mission_**
Parish ministry:
Stipends and national insurance
29
-
4,844
-
**4,873**
_4,922_
Pension contributions
1,630
-
(303)
-
**1,327**
_1,140_
Housing costs
1,238
6
-
-
**1,244**
_1,163_
Removal, resettlement and other grants
141
-
-
-
**141**
_123_
Other expenses
150
-
-
-
**150**
_137_
3,188
6
4,541
-
**7,735**
_7,485_
Support for parish ministry
2,089
6
-
-
**2,095**
_2,451_
Resourcing Ministerial Education
-
-
-
212
**212**
_179_
Roof Alarm Appeal
-
-
-
59
**59**
_47_
Mission Strategy
-
-
-
63
**63**
_116_
Church Planting and Revitalisation
-
-
-
330
**330**
_320_
2,089
6
-
664
**2,759**
_3,113_
**_Expenditure on education_**
Support for church schools
478
-
-
-
**478**
_403_
Grants
-
-
-
20
**20**
_216_
478
-
-
20
**498**
_619_
Total expenditure on charitable activities
6,507
12
4,541
684
**11,744**
_11,879_
**Total expenditure**
6,507
12
4,691
1,545
**12,755**
_12,315_
**9.**
**Analysis of expenditure**
**including allocation of support costs**
Activities
Grant
undertaken funding of
Support
**Total**
_Total_
directly
activities
costs
**2021**
_2020_
£'000
£'000
£'000
**£'000**
_£'000_
*** Restricted Funds ***|||||||||||
|Raising funds
1,011
-
-
**1,011**
Contributions to Archbishop's Council
752
-
-
**752**
Resourcing Ministry and Mission
8,827
149
1,518
**10,494**
Education, Youth Children and Families
478
20
-
**498**
11,068
169
1,518
**12,755**|Raising funds
Contributions to Archbishop's Council
Resourcing Ministry and Mission
Education, Youth Children and Families||1,011
752
8,827
478
11,068||-
-
149
20
169||-
-
1,518
-
1,518||**1,011**
**752**
**10,494**
**498**
**12,755**||_436_
_662_
_10,598_
_619_
_12,315_|
|||||||||||||
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 30
|**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**|**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**|**NORWICH DIOCESAN BOARD OF FINANCE LIMITED**||||||
|---|---|---|---|---|---|---|---|
|**NOTES TO THE FINANCIAL STATEMENTS (continued)**||||||||
|**For**|**the year ended 31 December 2021**|||||||
||||*** Restricted Funds ***|||||
||||Benefice||Other|||
|||Unrestricted|Buildings|Stipends Restricted||**Total Funds**|_Total Funds_|
|||Funds|& Pastoral|Fund|Funds|**2021**|_2020_|
|||£'000|£'000|£'000|£'000|**£'000**|_£'000_|
|**10.**|**Analysis of support costs**|||||||
||Central administration and office property costs|1,305|-|-|-|1,305|_1,540_|
||(inc. final salary pension adjustments)|||||||
||Governance:|||||||
||Amounts paid to auditor:|||||||
||External audit|26|-|-|-|26|_25_|
||Accountancy|5|-|-|-|5|_5_|
||Registrar, Chancellor, PCR2 review and HR|176|-|-|-|176|_187_|
||Synodical costs|6|-|-|-|6|_7_|
|||1,518|-|-|-|1,518|1,764|
|**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
-
145
141
57
-
-
-
-
-
-
5
-
-
-|Institutions
£'000
607
-
-
155
59
80
18
6
3
1
-
6
3
20||**Total**
**2021**
**£'000**
607
145
141
212
59
80
18
6
3
1
5
6
3
20|_Total_
_2020_
_£'000_
_563_
_99_
_123_
_179_
_47_
_63_
_22_
_5_
_4_
_3_
_3_
_8_
_3_
_210_|
||||348|958||1,306|_1,332_|
|**12.**|**Staff costs**
Staff costs were as follows:
Gross salaries
Social security costs
Redundancy
Pension contributions
Lump sum contributions
Health insurance contributions||||2021
£'000
1,395
134
26
175
146
17||_2020_
£'000
_1,434_
_135_
_5_
_204_
_143_
_19_|
||||||1,893||_1,940_|
|||||||||
Payments in respect of redundancy totalling £26k were made in the year, these had all been paid over by the year-end. The payments were in respect of the following posts: Data Administrator and Database Project Coordinator, IT Admin Assistant, CMD and Reader Training Administrator, PA to the Archdeacon of Lynn, Trust Administrator and two Church Army Officers.
31 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**
## **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|2021
50
19
2
1
4
3
4
6
4
43|_2020_
_57_
_24_
_2_
_1_
_4_
_3_
_6_
_6_
_4_
_50_|
|---|---|---|
The number of staff whose emoluments (including benefits in kind but excluding pension contributions) exceeded £60,000 were:
||2021|_2020_|
|---|---|---|
|£60,000 - £70,000|-|_1_|
|£80,000 - £90,000|2|_2_|
|£100,000 - £110,000|-|_1_|
|£130,000 - £140,001|1|-|
Pension contributions amounting to £45k 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 2021 they were:
The Diocesan Secretary and Chief Executive, the Interim Diocesan Secretary, 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 £504k (2020: £502k).
## **Trustees Remuneration**
No remuneration has been paid to any member of the Bishop's Council of Trustees or the former Executive Committee in their capacity as Trustees (2020: £NIL). Two members were reimbursed for travel and incidental costs incurred in undertaking their Trustee duties totalling £34 (2020: one member £19).
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 Trustees 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 Trustees 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. Ian Bentley|Yes|Yes|
|The Ven. Steven Betts|Yes|Yes|
|The Ven. Karen Hutchinson|Yes|Yes|
|The Revd. Matthew Price|Yes|Yes|
|The Revd. Dr Patrick Richmond|Yes|Yes|
|The Rt. Revd. Dr Jane Steen|No|Yes|
|The Revd. Canon Simon Stokes|Yes|Yes|
|The Revd. Jeremy Sykes|Yes|Yes|
|The Revd. Stephen Thorp|Yes|Yes|
|The Rt. Revd. Dr Alan Winton|No|Yes|
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 32
**NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**
## **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|2021
_2020_
166
_170_
£'000
_£'000_
4,500
_4,596_
378
_376_
1,702
_1,720_
6,580
_6,692_|
|---|---|
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 2021 was in the range of £36,100 to £36,830 and other clergy who were members of the Executive Committee or Bishop's Council of Trustees 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 2021 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)**
**Net income/(expenditure)**
This is after charging:
Depreciation
**Analysis of transfers between funds**|2021
_2020_
£'000
_£'000_
111
_(375)_
1,922
_418_
187
_(53)_
38
_62_
2,258
_52_
2021
_2020_
£'000
_£'000_
25
_35_|
|---|---|
## **14. Net income/(expenditure)**
## **15. Analysis of transfers between funds**
|Transfer from Mission Strategy to CPR|Capital
and Mission Strategy
CPR
General
Funds
Funds
£'000
£'000
£'000
-
(500)
500
-
(500)
500
Restricted Funds|Total
2021
£'000
-
-|
|---|---|---|
Agreed transfer of funds allocated for Mission Strategy 2021 to support DBF funding of the Church Planting and Revitalisation project.
33 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **For the year ended 31 December 2021**
## **16. Endowments and Glebe Measure, 1976**
|**Income and Expenditure Account**
**Income (note 5)**
Glebe rents and interest receivable
**Expenditure (note 7)**
Surveyor's and Agent's fees
Legal and other administration charges
Surplus for the year|£'000
800
54
96
153
647
2021|_£'000_
_827_
_43_
_63_
_107_
_720_
_2020_|
|---|---|---|
## **17. Taxation**
The Board has no liability to corporation tax or capital gains tax.
## **18. Tangible assets**
|**At cost or valuation**|Subject to
Benefice
value linked
and
loans
Glebe
Pastoral
£'000
£'000
£'000
* Freehold Property *|Commercial
Property
£'000|Other
freehold
property
£'000|Office
and other
equipment
£'000|**2021**
**Consolidated**
**Total**
£'000|
|---|---|---|---|---|---|
|At 1 January 2021|485
5,792
78,656|755|3,492|134|89,314|
|Additions|-
83
1,145|-|-|-|1,228|
|Disposals|-
-
(1,488)|-|(610)|-|(2,098)|
|**At 31 December 2021**|485
5,875
78,313|755|2,882|134|88,444|
|**Accumulated depreciation**||||||
|At 1 January 2021|-
-
-|-|-|98|98|
|Disposals|-
-
-|-|-|-|-|
|Charge for the year|-
-
-|-|-|25|25|
|**At 31 December 2021**|-
-
-|-|-|123|123|
|**Net book value**||||||
|**At 31 December 2021**|**485**
**5,875**
**78,313**|**755**|**2,882**|**11**|**88,321**|
|At 31 December 2020|_485_
_5,792_
_78,656_|_755_|_3,492_|_36_|_89,216_|
|**Company**||||||
|**At 31 December 2021**|**485**
**5,875**
**78,313**|**240**|**2,882**|**9**|**87,804**|
|At 31 December 2020|_485_
_5,792_
_78,656_|_240_|_3,492_|_34_|_88,699_|
|The net book amount comprises:||2021
£'000||_2020_
_£'000_||
|Assets used, or intended to be used, predominantly||86,430||_87,300_||
|for direct charitable purposes||||||
|Assets used for administration and|other purposes|1,891||_1,916_||
|||88,321||_89,216_||
|||||||
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 34
**NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **For the year ended 31 December 2021**
## **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 2021
Additions
Disposals
Valuation as at 31 December 2021
Benefice and Pastoral Property comprises -
Houses -
At valuation as at 1 January 2021
Subsequent additions at cost
Disposals
Valuation as at 31 December 2021|Glebe Property (mainly residential houses) comprises:
Houses at valuation as at 1 January 2021
Additions
Disposals
Valuation as at 31 December 2021
Benefice and Pastoral Property comprises -
Houses -
At valuation as at 1 January 2021
Subsequent additions at cost
Disposals
Valuation as at 31 December 2021|2021
£'000
5,792
83
-
5,875
78,656
1,145
(1,488)
78,313|_2020_
_£'000_
_5,233_
_559_
_-_
_5,792_
_78,413_
_946_
_(703)_
_78,656_|
|---|---|---|---|
|||||
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 2021
Additions
Disposal proceeds
Profit on disposal
Revaluation adjustment
Valuation at 31 December 2021
Company
Valuation at 31 December 2021||£'000
37,102
-
(62)
38
-
37,078
37,023|
||||
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 2021**
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**
## **20. Fixed asset investments**
**----- Start of picture text -----**
Profit/(loss)
At 1 January Disposal on Increase/(decrease) in At 31 December
2021 Additions proceeds Disposal Market value 2021
£'000 £'000 £'000 £'000 £'000 £'000
Unrestricted Funds
Listed investments 2,605 227 (254) 16 278 2,872
Unlisted investments 100 - - - - 100
Cash 6 - 26 - - 32
2,711 227 (228) 16 278 3,004
Restricted Funds
Listed investments 14,657 1,420 (1,458) 95 1,644 16,358
Unlisted investments 1,311 - - - 187 1,498
Cash 197 - 5 - - 202
16,165 1,420 (1,453) 95 1,831 18,058
Total 18,876 1,647 (1,681) 111 2,109 21,062
2021 2020
The unlisted securities comprise:- £'000 £'000
Shares in the Central Board of Finance -
Investment Fund 48 42
Property Fund 1,343 1,175
(valued as per the Central Board of Finance)
COIF Charities Investment Fund Income shares
(valued as per COIF Charity Funds) 107 94
Investment in Eastern Landowners Consortium 97 97
Investment in CMCU shares 3 3
1,598 1,411
The historical cost of the above assets is as follows:
Listed securities 13,580 13,493
Unlisted securities 1,140 1,140
Cash 234 203
14,954 14,836
**----- 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|2021
_2020_
£'000
_£'000_
1,641
_1,447_
1,343
_1,175_
2,446
_2,104_
5,430
_4,726_|
|---|---|
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 36
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2021**
|**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
**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 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
**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 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
**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 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|2021
_2020_
£'000
_£'000_
9
_25_
2021
_2020_
£'000
_£'000_
246
_273_
88
_58_
320
_247_
112
_179_
666
_523_
1,432
_1,280_
4
_2_
736
_185_
2,172
_1,467_
140
_601_
477
_477_
2,789
_2,545_
2021
_2020_
£'000
_£'000_
477
_477_
477
477
477
_477_
2021
_2020_
£'000
£'000
38
_37_
325
_746_
1,706
_1,546_
2,069
_2,329_
26
_45_
1,333
_837_
1,334
_1327_
4,762
_4,538_
2021
_2020_
£'000
_£'000_
867
_830_
2021
_2020_
£'000
_£'000_
390
_353_
477
_477_
867
_830_
867
_830_
8
_11_|2021
_2020_
£'000
_£'000_
9
_25_
2021
_2020_
£'000
_£'000_
246
_273_
88
_58_
320
_247_
112
_179_
666
_523_
1,432
_1,280_
4
_2_
736
_185_
2,172
_1,467_
140
_601_
477
_477_
2,789
_2,545_
2021
_2020_
£'000
_£'000_
477
_477_
477
477
477
_477_
2021
_2020_
£'000
£'000
38
_37_
325
_746_
1,706
_1,546_
2,069
_2,329_
26
_45_
1,333
_837_
1,334
_1327_
4,762
_4,538_
2021
_2020_
£'000
_£'000_
867
_830_
2021
_2020_
£'000
_£'000_
390
_353_
477
_477_
867
_830_
867
_830_
8
_11_|2021
_2020_
£'000
_£'000_
9
_25_
2021
_2020_
£'000
_£'000_
246
_273_
88
_58_
320
_247_
112
_179_
666
_523_
1,432
_1,280_
4
_2_
736
_185_
2,172
_1,467_
140
_601_
477
_477_
2,789
_2,545_
2021
_2020_
£'000
_£'000_
477
_477_
477
477
477
_477_
2021
_2020_
£'000
£'000
38
_37_
325
_746_
1,706
_1,546_
2,069
_2,329_
26
_45_
1,333
_837_
1,334
_1327_
4,762
_4,538_
2021
_2020_
£'000
_£'000_
867
_830_
2021
_2020_
£'000
_£'000_
390
_353_
477
_477_
867
_830_
867
_830_
8
_11_|2021
_2020_
£'000
_£'000_
9
_25_
2021
_2020_
£'000
_£'000_
246
_273_
88
_58_
320
_247_
112
_179_
666
_523_
1,432
_1,280_
4
_2_
736
_185_
2,172
_1,467_
140
_601_
477
_477_
2,789
_2,545_
2021
_2020_
£'000
_£'000_
477
_477_
477
477
477
_477_
2021
_2020_
£'000
£'000
38
_37_
325
_746_
1,706
_1,546_
2,069
_2,329_
26
_45_
1,333
_837_
1,334
_1327_
4,762
_4,538_
2021
_2020_
£'000
_£'000_
867
_830_
2021
_2020_
£'000
_£'000_
390
_353_
477
_477_
867
_830_
867
_830_
8
_11_|
|---|---|---|---|---|---|---|
|||||2,069
26
1,333
1,334
4,762|||
||||||||
||||||||
37 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **For the year ended 31 December 2021**
|**27.**
**Summary of fund movements**
**Unrestricted funds**
Capital and General
**_Designated funds:_**
Aided Church Schools
Buildings Reserve
Diocesan Parsonages Fund
Jane Bailey Bequest
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**
**2021**
**Income Expenditure**
**Transfers**
**losses**
**2021**
£'000
£'000
£'000
£'000
£'000
£'000
5,879
9,292
(6,497)
-
391
9,065
178
-
-
-
-
178
85
-
-
-
-
85
604
-
(10)
-
-
594
867
-
(10)
-
-
857
**6,746**
**9,292**
**(6,507)**
**-**
**391**
**9,922**
57,246
2,499
(4,691)
-
1,338
56,392
81,226
539
(12)
-
555
82,308
242
-
-
-
-
242
-
-
-
-
-
-
8
-
-
-
-
8
6
-
-
-
-
6
-
59
(59)
-
-
-
-
563
(63)
(500)
-
-
20
238
(211)
-
-
47
1
123
(330)
500
-
294
84
922
(861)
-
-
145
1,989
42
(20)
-
86
2,097
101
1
(1)
-
4
105
2,451
1,948
(1,545)
0
90
2,944
**140,923**
**4,986**
**(6,248)**
**0**
**1,983**
**141,644**
**147,669**
**14,278**
**(12,755)**
**0**
**2,374**
**151,566**|
|---|---|
The Board's Capital and General Funds includes £990,000 relating to capital (2020: £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 2021** | 38
**NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **For the year ended 31 December 2021**
## **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 was an extension of 'Committed to Growth', building on what was already being done and continuing to look to grow in discipleship, service and numbers. It identified 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. Deferred funds from Mission Strategy 2021 will be used towards the new Diocesan Vision.
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, with the aim to create new or revitalised churches across Norfolk and Waveney. At the beginning of 2022 a new re-set of this project was agreed by the Bishop's Council of Trustees and Archbishops' Council, with the plan to continue the work of revitalisation in areas where this is working well and to refocus church planting to enable a defined number of missional communities. The revised total project costs are £1.8m (previously £3.2m) the revised grant funding from Archbishops' Council is £1.23m (previously £1.98m), with the balance being met from Diocesan funds. The project will end as planned at 31 December 2023
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 2021**
**NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **For the year ended 31 December 2021**
## **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 2021 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|2021
_2020_
£'000
_£'000_
614
_1,113_
(304)
_(514)_
1
_9_
(18)
_6_
293
_614_|
|---|---|
* Comprises change in agreed deficit recovery plan and change in discount rate and assumptions between year-ends.
This liability represents the present value of the deficit contributions agreed as at the accounting date and has been valued using the following assumptions. In general, these are set by reference to the duration ofthe deficit recovery payments but as at 31 December 2021, under accounting rules the payments are notdiscounted since the remaining recovery plan is less than 12 months. No price inflation assumption is needed since pensionable stipends for the remainder of the recovery plan are already known.
## **% of pensionable stipends**
|**% of pensionable stipends**|||||||
|---|---|---|---|---|---|---|
|Discount rate|December 2021
0% pa|December 2020
0.2% pa||||December 2019
1.1% pa|
|Price inflation|n/a||3.1% pa|||2.8% pa|
|Increase to pensionable payroll|-1.5% pa||1.6% pa|||1.3% 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 2021 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|2021
_2020_
£'000
_£'000_
2,522
_2,661_
2,993
_2,766_
_471_
_105_|
|---|---|
The pension plan assets do not include property occupied by the sponsoring employer.
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 40
**NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **For the year ended 31 December 2021**
## **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 2021
_31 December 2020_
£'000
_£'000_
9
_9_
-
_-_
34
_47_
(36)
_(55)_
7
_1_
161
_(4)_|
|---|---|
## **Changes in the present value of the defined benefit obligation are as follows:**
|Opening defined benefit obligation
Current service cost
Interest expense
Actuarial gain
Benefits paid
Closing defined benefit obligation|For year to
31 December 2021
£'000
2,661
9
34
(135)
(47)
2,522|
|---|---|
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 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 2021**
**NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **For the year ended 31 December 2021**
## **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 2021
£'000
2,766
36
125
113
(47)
2,993|
|---|---|
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:**
||||2021|_2020_|
|---|---|---|---|---|
||||% 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**||2021|_2020_|
||Discount rate||1.8% pa|_1.3% pa_|
||RPI inflation assumption||3.25% pa|_2.85% pa_|
||CPI inflation assumption||2.85% pa|_2.45% pa_|
||Future salary increases||3.25% pa|_2.85% pa_|
||Pension increases in payment||||
||(RPI - maximum 5%)||3.15% pa|_2.8% pa_|
||(CPI - maximum 2.5% )||2.15% pa|_1.95% pa_|
|**b)**|**Demographic assumptions**||||
||Assumed life expectancy in years,|on retirement at 65:|2021|_2020_|
||Retiring today|Males|22.2|_22.3_|
|||Females|24.5|_24.6_|
||Retiring in 20 years|Males|23.4|_23.6_|
|||Females|25.9|_26_|
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 42
**NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **For the year ended 31 December 2021**
## **29. Redundant Churches**
The Board was responsible for the care and maintenance of 3 redundant churches during the year (2020: 3). The cost to the Board was £5,837 (2020: £4,705).
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 2021 and 31 December 2021 is detailed below:
|Cash held at 1 January 2021
Grants received from DFE
Payments on behalf of Schools
Cash held at 31 December 2021|2021
_2020_
£'000
_£'000_
612
_580_
191
_175_
(326)
_(143)_
477
_612_|
|---|---|
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 £3,232 was recharged to Norwich Diocesan Board of Finance Limited by the Horstead Centre in respect of Soulshaper (2020: £nil), with nothing outstanding at the year end (2020: £Nil). £25 was charged to the Horstead Centre by the Board in 2021 (2020: nil).
£16,750 (2020: £54,217) was recharged to The Diocese of Norwich Education and Academies Trust (DNEAT) in 2021 by the Consolidated Education Endowments Fund (CEE) and the Norwich Diocesan Board of Finance Ltd, with £3,675 outstanding at the year end (2020: £12,591). £135,069 (2020: £40,033) was charged to the Norwich Diocesan Board of Finance and CEE with respect to grants and staff costs, with £8,044 (2020: nil) outstanding at the year end. £27,450 was recharged to The Diocese of Norwich Education Support Company (DONESC) with respect to desk charges and landlines (2020: £692), with £6,825 outstanding at the year end (2020: £nil). £42,160 was paid to DONESC with respect to Headteacher recruitment support and HR Support, with £2,160 outstanding at the year end (2020: £nil).
£7,265 (2020: £2,503) was recharged to St Benet's Multi-Academy Trust by the Norwich Diocesan Board of Finance Ltd in 2021 in respect of desk charges and training, with £1,640 (2020: £525) outstanding at the year end.
£63,918 was recharged to The Anne French Memorial Trust in 2021 (2020: £43,077), with £11,688 outstanding at the year end (2020: £12,042). Grants totalling £130,000 were given towards housing/energy efficiency costs, Generous Giving Advisors and Strategic Programme Management (2020: £77,000 housing, national and educational), this income is released to match expenditure, £112,769 grant income has been deferred to 2022.
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. Nothing was due at the year end to the Trust by the Norwich Diocesan Board of Finance Limited in respect of fees (2020: £496).
43 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2021**
## **32. Capital commitment**
There are no known capital commitments.
## **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|2021
_2020_
£'000
_£'000_
89
_29_|
|---|---|
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 2021 (debtor)
Shareholders Equity/(Deficit)|2021
_2020_
£'000
_£'000_
112
_179_
112
_179_
**-**
**-**|
|---|---|
During the year Spire Support Services Limited collected rental income net of 8% commission plus VAT of £448,442. Spire Support Services charged Norwich Diocesan Board of Finance Limited £25,996 inc VAT for design, surveying services and Church Quinquennials, with £1,898 outstanding at the year end. Norwich Diocesan Board of Finance Limited charged Spire Support Services £24,101 for management oversight, financial services, office rental and loan interest. Spire Support Services Limited will gift £89,467 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 2021 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. 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. In May 2021, the company received a share of the first option payment amounting to £515,437 which will be gifted to Norwich Diocesan Board of Finance Limited within nine months of its year end of 30 April 2022. The accounts to 30 April 2022 will be audited. .
## **(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|2021
_2020_
£'000
_£'000_
30
_30_|
|---|---|
During the year Norwich Diocesan Board of Finance Limited collected rental income and expenses net of VAT of £49,043 on behalf of Norwich Glebe Property Limited, paid costs of £1,921 and charged loan interest of £16,562 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 2021 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 2021** | 44
**NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 31 December 2021**
|**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 2021
Deferred income added/(released) during the year
Deferrred income carried forward at 31 December 2021
The carrying amounts of the company's financial instruments are as follows:|2021
_2020_
£'000
_£'000_
19,230
_17,262_
1,598
_1,411_
390
_353_
2,714
_1,591_
175
_1,123_
2,889
_2,714_|
|---|---|
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 2021**
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
**For the year ended 31 December 2021**
## **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 2020
**Total funds at 31 December 2020**|*** Restricted Funds ***
Benefice
Other
Unrestricted
Buildings
Stipends
Restricted
**Total Funds**
Funds & Pastoral
Fund
Funds
**2020**
£'000
£'000
£'000
£'000
**£'000**
6,160
-
-
-
**6,160**
215
-
1,365
518
**2,098**
339
-
-
160
**499**
934
1
4
-
**939**
507
2
-
377
**886**
74
134
1,206
19
**1,433**
123
149
-
-
**272**
8,352
286
2,575
1,074
**12,287**
-
-
107
329
**436**
6,523
6
4,472
878
**11,879**
6,523
6
4,579
1,207
**12,315**
1,829
280
(2,004)
(133)
**(28)**
(33)
116
(62)
31
**52**
1,796
396
(2,066)
(102)
**24**
-
-
-
-
**-**
(38)
-
-
-
**(38)**
(302)
-
(6)
-
**(308)**
1,456
396
(2,072)
(102)
**(322)**
5,290
80,830
59,318
2,553
**135,064**
6,746
81,226
57,246
2,451
**147,669**|
|---|---|
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 46
**NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **For the year ended 31 December 2021**
## **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 2021
**Total funds at 31 December 2021**|*** Restricted Funds ***
Benefice
Other
Unrestricted
Buildings
Stipends
Restricted
**Total Funds**
_Total Funds_
Funds & Pastoral
Fund
Funds
**2021**
_2020_
£'000
£'000
£'000
£'000
**£'000**
_£'000_
6,520
-
-
-
**6,520**
_6,160_
368
-
1,305
361
**2,034**
_2,098_
316
-
-
622
**938**
_499_
861
-
3
-
**864**
_939_
600
1
-
-
**601**
_509_
84
154
1,191
-
**1,429**
_1,414_
543
384
-
-
**927**
_272_
9,292
539
2,499
983
**13,313**
_11,891_
-
-
150
-
**150**
_107_
6,507
12
4,541
662
**11,722**
_11,662_
6,507
12
4,691
662
**11,872**
_11,769_
2,785
527
(2,192)
321
**1,441**
_122_
293
555
1,320
-
**2,168**
_21_
3,078
1,082
(872)
321
**3,609**
_143_
-
-
-
-
**-**
_-_
(37)
-
-
-
**(37)**
_(38)_
135
-
18
-
**153**
_(308)_
3,176
1,082
(854)
321
**3,725**
_(203)_
6,746
81,226
57,246
276
**145,494**
_145,697_
9,922
82,308
56,392
597
**149,219**
_145,494_|
|---|---|
47 | Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021**
## **NORWICH DIOCESAN BOARD OF FINANCE LIMITED NOTES TO THE FINANCIAL STATEMENTS (continued)**
## **For the year ended 31 December 2021**
## **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 2021|*** Restricted Funds ***
Benefice
Other
Unrestricted
Buildings
Stipends
Restricted
**2021**
_2020_
Funds & Pastoral
Fund
Funds
**Total**
_Total_
£'000
£'000
£'000
£'000
**£'000**
_£'000_
*****
3,616
78,313
5,875
-
**87,804**
_88,698_
-
-
37,023
-
**37,023**
_37,047_
3,004
5,156
11,995
-
**20,155**
_18,058_
6,620
83,469
54,893
-
**144,982**
_143,803_
1,548
24
391
86
**2,049**
_2,354_
471
-
-
-
**471**
_105_
-
14
-
-
**14**
_15_
137
302
-
2
**441**
_400_
2,973
(1,445)
1,499
987
**4,014**
_2,112_
5,129
(1,105)
1,890
1,075
**6,989**
_4,986_
1,437
56
98
478
**2,069**
_2,328_
3,692
(1,161)
1,792
597
**4,920**
_2,658_
10,312
82,308
56,685
597
**149,902**
_146,461_
390
-
-
-
**390**
_353_
9,922
82,308
56,685
597
**149,512**
_146,108_
-
-
293
-
**293**
_614_
9,922
82,308
56,392
597
**149,219**
_145,494_
9,922
82,308
56,392
597
**149,219**
_145,494_|
|---|---|
Norwich Diocesan Board of Finance Limited **Annual Report and Financial Statements 2021** | 48
## www.dioceseofnorwich.org
Diocesan House, 109 Dereham Road, Easton, Norwich NR9 5ES Tel: 01603 880853 Email: info@dioceseofnorwich.org