L)IOCESE IN EUROPE ( )1 LNCILANI ) THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REpoKf AND FINANCIAL sfATEMENTS for the year ended 31 December2020 Company No. 106580 Registered Chority No. 250186 THE DIOCESE IN EUROPE BOARD OF FINANCE CONTENT5 fvr theyeorended 31 December2020 Page No. Annual report Bishop's introduction Objectives Strategic aims Financial Executive Summary for the year 2020 2020 in context Activitie5 and achrevements Future plans Financial review Principal risks Structure and governance Statement of Tru5tee5' responsibilities Administrative details 15 16 20 21 24 25 Flnonclolstatements Independent auditorfs report Statement of financial activities Income and expenditure account Balance sheet Cash flow ststement Notes to the financial ststements 27 31 32 33 34 35 THE DIOCESE IN EUROPE BOARD OF FINANCE BISHOWS INTRODucnoN Aor the yeur ended 31 December 2020 It is with great thankfulness and gratitude that l introduce th￿ annual report for the Diocese in Europe. At one level, 2020 was an impossibly difficult year. Church is about communities animated by the HO￿ Spirit gathering for worship. Yet close to the start of 2020 this was abruptly prohibited across the great majority of the countries of our Oiocese. Life foi many of our people who are INing in a 'home from home, Suddenly became doubly isolated with both gatherings and international travel forbidden. Yet this report bears testimony tr> remarkable endurance. resilience...and indeed success. Our clergy and loy leader5 rapidly adapted to worship condurted on Zoom, Facebook and YouTube. Communities worked hard to stay in touch with those who are particularly vulnerable. Social mission such as feeding projects for migrants and ref￿ee5 continued in the most challenging of tircumstsnces. To be sure, there have been great social. psych01c￿￿al and economic costs. We have lost k)ved ones and not been able to attend their funerals. Our young people and children have been isolated from theirfriends and missed school or a normal experience of university. Businesses - especially those in the hospitality and tourism sectors- have been massively afferted. Yet the spiritual life of our chaplaincies has endured and in many cases deepened. People have found a renewed faith in God. a new appreciation of the basics of life, a new delight in creation. a fresh appreciation for the importance of physical comrnunity. Our diocese is fundamentalty about people. and we have 50rne realty excellent peoplel I pay tribute to our exceptional clergy, our dedicated lay officers. and our highly skilled central administrative staff. Ff there has been one particular development over the year that is makn'ng a difference. it is the realisation of our ambition to appoint a team of freestanding Stipended archdeacons. As bishops, David Hamid and I see what a difference this makes to our ministry and to the wellbeing of all our chaplaincies. l am also deeplv impressed by the quality of our safeguarding team, delivering a profe55ional safeguarding service acro55 a conts'nent and beyond. and our Communicat￿n5 capability which is now transformed beyond recognition. The pages of this report necessarily talk a lot about money. 2020 wa5 surprisingly healthy on that frgnt- due both to significant help from the central church and also to an astonishingly high Common Fund ontribution rate of 97%. Along with this, we Set up a Hardship Fund that enabled cross-chaplaincy support over and beyond the Common Fund. All of this reflects strong levels of trust and confidence within and beyond our di(Kese as well as signtficant generosty. for which l express my deepest thanks. Lwking to the remainder of 2021 and beyond. we are of course longing forthe rollout of vaccines and the resumption of physical gatherings. We have an important agenda ahead of us: to appoint and elect more people from Black, Asian and Minority Ethnic backgrounds, to engage with the Living in LOVÉ t7nd Foith materials, to continue to appoint women clergy to major chaplaincies, to work out the implications of becoming a carbon-neutral church by 2030. to work out the 'wellbein8 covenany we have made between bi5hop5, clergy and laity. I hope you enjoy reading this reporL I trust that, at leart, you are encouraged and reassured by the great care that is taken over the management of our relative￿ slender resources, and the way these are deployed for maximum effect. l thank God for the )Mtality of our Dmxese in Europe as evidenced by this report and pray for it5 abundant fiuirfulness and flourishine in the future. The Right Reverend Dr. Robert Innes Bishop of Gibraltar in Europe 2020 Annual Report and Finoncial Statements THE DIOCESE IN EUROPE BOARO OF FINANCE ANNUAL REPORT Aor the yeorended 31 December2020 The Trustee5. who are also Directors for the purposes of company law. present their annual report together with the audited financial statements, for the year ended 31 December 2020. OWEcnvES The Diocese in Europe has almost 3(Kl congregations in 40 countries in Europe, Russia and North Africa. These congregations are organised within 14712019-.1481 separate chaplaincies. The Companls principal activity is to promote. a55iSt and advance the mission and ministry of the Church of England in the Diocese in Europe by acting as the financial executNe of the Diocesan Synod. The main objectives ofthe Company and of the charity are: to manage the financial aspects of providing a priestly and pastoral presence where needs arise and as re50urces perynit across the Diocese: to provide appropriate personnel. financial grants and other resources including safeguarding to support the misston of the Diocese: to engage with the community as part of the Church'5 re5pon5e to God's mi55i0n to His people in the area Covered by the Diocese: to manage funds on behalf of the churches in the Dh)cese, and related trust fund5: to provide services to churches and help the flow of tommunications across the Diocese, including the provision of variou5 publications,. Fund5 and other support are given to encourage fresh expressb)ns for worship and mission- to support the ongoing mission of the Diocese. and to provide a service to our chaplaincies. Priorrties for diocesan support are identrfied at regular meetings of the 8ishop'$ 5tsff and at the diocesan and archdeaconry synods. Significant financial issues are delegated to the Finance, Audit and Personnel Comrntttee I"FAPC"I between meetings of the Diocesan Synod and the Bishop's Council. Revised Terms of Reference for that committee including spending thresholds were agreed by the Trustees at the Bishop's Council in October 2019. The Trustees aim to operate a balanced budget, meeting current expenditure from current income, sothat capital growth can be set aside to support the work of the Diocese in future years and be available at times of particular hardship. This aim became increasingly diffKult to achieve as the costs of the Diocese escalated during the last decade. At the Bishop's Council in 2018 a financial plan was approved which aimed to achieve break-even over the next three years. The plan accommodates required increases in costs, principally in the areas of safeguardin& archdeacon1￿ and communications. It a150 incorporated increases in Common Fund contributions from chaplaincies in the three years up to and including 2020. As a result of the Covid-19 pandemic the plan was revised at the Bishop's Council in 2020 and a new plan through to 2024 was approved. 2020 ATrnuol Report and FinonciGIStatements THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT fvr the year ended 31 Oecember 2020 srRATEGIC AIMS The diocesan strategy commits us to: Building up the Body of Christ and fostering growth Sharing with other churches and agencies in the evangelisation of Europe Striving for the creation of a just society and a sustainable environment Working for Reconciliation in communities and in the wider v￿r1d Providing the Resources to do these things Across our far-flung diocese, the diocesèn staff team and the chapkiincies work together in fulfilling this strategic vision by making good clergy appointments; fostering Vocat￿nS. forging partnerships with mission agencies; working with refugees,. providing encouragement and sUPPOrt to our people. The achievement in continuing this work in the context of Brexit and COVID-19 is gratifying. The strategy was reviewed in detail by the Trustees at the Bishop's Countil in October 2019. It was unanimously still regarded as being frt for purpose and was not considered in need of amendment. However. some key priorits"e5 for acti¥ty emerged at the Council and subsequent Diocesan Synod meetings over the past year. These are: l. The environment and the stewardship of creation 2. Growing ministry to young people 3. Growing training and developrnent of both lay leaders and clergy with a particular focus on the Ministry of Women and of Black. Asian and Minority Ethnic people both lay and ordained 4. Embracing lower income groups and learning how to function better with less Some but not all of this work has been constrained by the pandemic. However well these priorities may be understood and agreed, progress on the work depend5 on financial stsbility and growth along with the commitment of people across the Diocese to work towards these objectives. FINANCIAL EXECUTIVE SUMMARY FOR THE YEAR 2020 The outcome for the year is a surplus in Unrestricted Funds before investment 8ain5 of £9.991. This result would have been a deficit of E200,CK)9 but for a Covid-19 sustainabilrty grant of £210,IJ)O which was received from the Archbishop's Council. The pre-pandemic budget set for 2020 by Bishop's Council in 2019 was ambitious, with a £35,C(10 deficit based on 100% receipt of the planned. increased Common Fund contributions. As a result of Covid-19. the Common Fund request for 2020 wa5 fTozen at 2019 levels. reducing budgeted income by £236,0Tr). In addition, £200,000 was set aside out of unrestricted funds in the Hardship fund. £79,986 remained to be allocated to chaplaincies at the year end as it becarne clear that the needs in 2021 were likely to be as great as in 2020. It is planned that these funds will therefore be distributed in 2021. The surplus of £9,991 has been achieved through a combination of generous contributions from chaplaincies to the Common Fund. tight financial management, wtth much reduced travel costs and significant extra funding from the Archbishop's Council. This brought the DBF much ck)ser to achieving break even than could have been envisaged at the stsrt of the pandemic and even as the final quarter of the year began. The financial position of the DBF is further bolstered by the strong perfornlance of the unrestricted investments. This is outlined in detail in Note 15 on page 46 of these accounts. 2020Annual Report ond Finontiolstotements THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT for the yeorended31 December2020 FINANCIAL EXECUTIVE SUMMARY FOR THE YEAR 2020 {C(￿tInued} It is notable that changes in budget planning and the approach to Common Fund have helped the Diocese withstand the S￿nIficant economic shock of the pandemic. In November 2020 a new 4-year financial plan was agreed by the Bishop's Council in response to the changed circumstance5. This will still rely on increases in Common Fund payments in 2022. 2023 and 2024 and forecasts a cumulative defitit from 2020 2024 to be funded from reserves of £1.4million. 2020 IN CONTExr Covld-19 The Pandemic took hold across the Diocese in Europe earlier than in the UK. It dominated the worshipping and pastoral life of every chaplaincy as well as posing huge personal and financial challenges for all clergy and church officers. For 08F staff in London and inthe Bishop's Office in Brussels, it required all emptoyees to work from home for most of the year and increased the w￿rkI03d in several departments. Whilst the pandemic may have restricted growth and development in some areas of activity in other ways it promoted developments that will be of benefit in the future. These include.. l. The growth of online worship both with Diocesan services and from chaplaincies which engaged people in new ways and brought them together on a scale never previously envisaged. 2. The use of video conferencing increased attendance at gathering5, saved money and reduced the DBF'S carbon footprint as the Church of England works towards the target of carbon neutrality by 2030. At times online meetings clearly impfoved and accelerated decision makin8. 3. The ability of staff to MKsrk flexibfy has enabled attention to be paid to work life balance and wellbeing. However, the economic challenge of Covid-19 is alrea(ty considerable and the full extent of it 15 not yet fully apparent= l. Many chaplaincies still rely on 'in person. giving at services for a big portK)n of their income and regular online giving has only been adopted at an uneven rate across the Diocese. 2. Popular though online worship has been. there is concem that some people will not come back to 'in person, church. 3. Many chaplaincy events and commercial ventures were cancelled in 2020 and face uncertsinty in 2021. 4. In Southein Europe, in particular. visitors and residents who split their lives be￿een the UK and elsewhere have been unable to travel. 5. tt is clear that 'nomial life. will not return as x)on as expected in 2021 and indeed the effects of the pandemic will continue to be felt for several years to come. There is a big tssk ahead in rebuildin8 and in some cases reimagining chaplaincy life. Despite that, the resilience of the Diocese is very apparent as ministry ha5 developed in new and exciting ways. Appointments have been made to many significant dergy poSit￿n$. Enquiries about ordination are at a high level. The balance of optimism and anxiety about the kK)St Covid era ts a delicate one and the picture is by no means uniform across the Diocese. 2020 Annuol Report ond Finoncialstotements THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT fvr the yearended31 December2020 2020 IN CONTExf IcontSnued) BTexft The long-term. practical and economic impact of Brexit on lrfe in Europe could be greater than that of Covid-19, though the pandemic has obscured much of the impact of Brexit from public discourse in 2020. The role and profile of the Diocese in Europe has been enhanced in the process. The Diocese is an enduring UK institution in the EU and it is continuing its work post Brexit. The work with UK nat￿TraI5 seeking help with their residency applICat￿nS in France through the UK Natronals Support Fund I"UKNSF"I run by the Oioce5e 15 a practical example. The tssk of athKacy and lobbyi￿ for UK nationals continues to be very significant. The DBF made detailed plans to respond to changes in Data Protection practice. These have not had to be enacted as yet. The offices in Brussels and London are well placed to represent one another in the EU and outside it respectively in accordance with the Data proteCt￿n laws. Practical concerns continue about the visas required for licenced and locum Clergy seeking to serve in the Schengen area as well as ordinands from the EU seeking to train in the UK. The issues are not insurmountable, but they take time and resources to resolve. Thi5 remains a work in progre55. The '91> day in 180 rule, that applies to UK nationals visiting the EU threatens some engagement with chaplaincies by temporary residents and may restrict some IcKum ministry, and the internship scheme IMESI. It is not clear whether the predicted flow of UK r￿tiOnal5 into the EU to work for UK companies will materialise at the rates predicted prior to the pandemic. The replacement for the EHIC card has reduced some concerns about health cover though insurance is Still needed for many licen¢ed clergy and those costs look set to rise. Economic concerns centred on the value of Sterling against the Euro have not yet materialised as feared. The big decline in the value of sterling came after the referendum. Rates fell marginally in 2020 and have recovered in 2021. The long-term trend is very hard to predict though not the uncertainty, which is palpable. How significant the numbers of UK nationals retuming to INe in the UK will be is unclear partly due to Covid-19. The Church of England In 2020 weetings of the House of Bishops and of Diocesan Secretaries were more frequent than ever before and the perspective from Europe is regularly heard in these gatherings. The Diocesan Safeguarding Team is now represented on all the working groups organised by the National Team. A seat at these tables helps to move polity in a dIreCt￿n that can be better suited to the needs of the Diocese. In respondingto lotkdowns and the resulting changes in regulations around worship, the Di￿eSe has been required to take account of guidance in Engkind and reinterpret it in the context of the varying circumstances and legal positions of chaplaincies in differing circumstsnces. This has involved painstaking drafting of guidance documents on the part of the Bishops. Director of Communications and the Diocesan Secretary. 2020Annuol Report ond Finoncial statements THE DIOCESE IN EUROPE 80ARD OF FINANCE ANNUAL REPORT fvr the yeorended 31 December2020 2020 IN CONTW Icominued) The Chuith of England (contlnued) The Diocese 15 actively engaged in work on the developing governance, strategy and operation5 in the National Church which ha5 accelerated through 2020. Sorne changes will have an impact on the Diocese in Europe though others can feel less relevant due to the practices and legal structures that are not the same outside England in Comparison with the rest of the Church of England. The Church of England General Synod has demanded urgentaction in response to the Churth's own record on racism and racial justice as well as answering the challenges posed by the Black Lives Matter movement following the killing of George Floyd in the USA. The diotesan strategy Breothing Lrfe was well received bv the Archbishops and the Church of England Task Group on Anti Racism in Engknd. The Church is responding rapidly to the recommendations for safeguarding practKe and organisation prompted by the IICSA report. In addition. the work on discerning a way forward forthe Church of England in relation to matters of identity, sexuality, relationships and marriage has moved on with the publication of Living in LOVÈ and Foith and the consu￿tionS based on the associated resources. The Oiocese is engaged with this work under the leadership of the 'LLF Advocate, Canon Prof Jack McDonald. The range of strategit initiatives from the General Synod represents an agenda of scale and ambition for the years ahead but also a challenge to chaplaincies emerging from Covid-19 and Brexit with big local i55ues to deal with as well as these rnatters. The active engagement of the Diocese with the national church is fruirful both in influence and in finance. The Archbishops, Council awarded Sustainability Funding of £210,OW and Strategic Ministry Funding towards the costs of 3 stipendiary curates of £I05,1X￿ per year for three years in addition to the grant of similar amount agreed in 2019. Subjert to posts being filled thi5 funding amounts to £645,(KIO coming into the Diocese be￿een 2020 and 2024 in support of ministry in chaplaincies. This funding is restricted for the chaplaincies and does not form part of the DBF'S unrestricted income. AcrivrriES AND ACHIEVEMENrs Mlnlstry The number of clergy in the Diocese holding a Bishop's licence as at 31 Decernber 2020 wa5 138 12019'.1411. This ineludes 101 ¢ler8y in p05t as Chaplains {2019: 1051 and 29 asssstant priests who hold licence in a chaplaincy12019: 311 as well as the Dean, the ArchLleacons and the Director of Ministerial Development. At the close of 2020 the Diocese had 33 vacancies12019: 411 which, when filled, will have licensed clergy (including both Chaplains and assistant priests). Posts requiring a licensed priest total 174 12019= 1821. There were 19 new appointments lout of 22 vacancies advertised) during 202012019: 131. 118 Readers held a Bishop's licence or Pem)ission to Officiate on 31 December 202012019- 1021. 2020 Annual Report and Financio15tctements THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT fvr the yeorended 310ecember 2020 AcfiviTIES AND ACHIEVEMENTS lcontlnued) Mlnlstry (contlnued) At the end of December 2020 there were 17 ordinands on either residential or n¢￿-[esIdentIal training 12019: 221, and there were 14 Readers in training12019= 30). The Diocese was successful for the second year running in its bid to the Strategic Ministry Fund established by the Church Commissioners to support stipendTrary curacie5. This provided 7Q% of the costs of curates in the Diocese for three years from the Summer of 2020. The postsforthe 2020cohort are in VcvJrschoten, Brussels and Norway18ergenl. In 2020. funding was agTeed forthree curates to take up their roles in 2021. Chaplaincy membershlp and attendance All figures for 'in person, attendance and lrfe events in the Duese fell dramatically in 2020 as a result of Covid-19. In many parts of the Diotese, lockdowns began sooner than in the UK and continued for longer. Gathefings of all kinds were severely restricted and even vthen churches have reopened this has been with vèry limited numbers and often with booking systems required. There are no Usual Sunday Attendance IUSAI figures or numbers recorded for Easter Day 2020. Many chaplaincies across the Diocese reported an encouraging response to online worship. Platforms used varied considerably. Zoom, YouTube and Facebook knve all report figures for usage in very different ways and not always reliable. Statistlcs gathered for the Church of England indicate that across the Diocese, during lockdown, 109 online Sunday services were being offered every week with a worshipping community of 13,545. Many chaplaincies reported significant online engagement with streamed service5 of Morning Prayer and Compline. The innovation and ingenuity shown by clergy and church officers who may not have pieviously considered themselves to be 'technolo8ically savw has been remarkable. The challenge now is how to continue to provide onlineworship and pastoral care effertively for new members who may never attend in person for reasons of health or geography. 2020 was the first year after the new electoral rolls were completed. Total electoral roll numbers were 9,894 a 3.9% decrease frorn 10.299 in 2019. The pandemic prevented the usual process of making up numbers10st in the 2019 full roll revision, so the decrease is understandable. There were 120 baptisms12019.' 411} and 10 marria8es12019.- 891 recorded in the Diocese. The reduction in marriages in particular, represents a significant financial issue for some chaplaincies. These events are source of engagement and income particularly when families travel from the UK for ceremonies. 9 confirmation seNices were held across the Diocese12019: 24) vrith 61 candidates12019= 1921. Services held in 2021 may be extensive enough to make up for the reduction in 2020. Thi5 is reliant on the capacity and ability of Bishopsto travel as well as communttiesgathering in greater numbers than has been p055ible in the first half of the year. The Church of Ervdland has not yet published figures for 2020 so cornpartsons are not possible this year. 2020Annuol Report ond Finonciol Statements THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT forthe yeor ended31 De¢ember2020 AcfiviTIES AND ACHIEVEMENTS Flnance Financial oversight was offered to the D8F by the Finante. Audit and Personnel Committee IFAPCI which met 10 time5, as Opposed to the normal 4 occasions during the year. The 2018 financial plan gave the D8F a rtable financial basis on which to pivot its plans when the pandemic hit Europe. The Common Fund request. including the agreed 25% increase was published just as the Covid- 19 reached Europe in February 2020. By April it was clear that very many chaplaincies would, understandably, be neither willing nor able to pay such amounts. The FAPC agreed to reduce the request to the 2019 levels. This was greeted warrn￿ by chaplaincies and 97% of the revised request was received. In additi¢)n to reducing the C¢)mmon Fund Request for all. the DBF also established a Covid.19 Hardship Fund of £200,CW from Diocesan Reserves tsrgeted at chaplaincies facing particular hardship as a result of the pandemit. Priority was given to applications from chaplaincie5 wIK)were struggling to pay clergy c05t5. Formal applications to the FAPC were invited. 31 grants have been made in two rounds of applications benefitting 20 chaplaincies. 28 chaplaincies and a generous personal donation contributed a totsl of £68.654 to the Hardship Fund. Many donations amounted to the difference between the original and the reduced Common Fund request to the relevant chaplaincy. such donations represent a powerful gesture of mutual support across the Diocese. In June 2020, the reduced Common Fund request and the Hardship Fund caused the DBF to revise the forecast deficit foi the year to £471,￿0. The outcome for the year was much better than this forecast as a result of The Archbishop5' Council grant of E210,OCQ. costs savings due to reductions in activity and better than expected Common Fund receipts197% of the request). Cornmon Fund equates to 67% of the 2019 agreed diocesan budget. The Common Fund total receipt include5 a small amount given in response to the previous yearfs request. In some cases. the provision of hardship fvnding towards clergy costs made it easier for chaplaincies to pay their share. These two factors account for approximately 5% of the funds received. The income from investments held by CCLA wa5 £20.￿0 h￿her than forecast. New Hnanclal Plan At 8i5hop'5 Council in November 2020, a new financial plan was approved wtthout Opposit￿n. The plan freezes the Common Fund request for 2021 at the 2020 level, with proposed increases of 10%, 15Yo and 20Yo in the subsequent years. The plan is designed to bring chaplaincy contributions back into line with the levels agreed in 2018, but not until 2024 and will achieve the agreed objective of a balanced budget by the end of 2024. The plan requires the DBF to draw on £1.4million of reserves between 2020 and 2024. Risks to the plan lie in the ability of chaplaincies to pay Common Fund. the continued ability of the DBF to control its costs and the continued good perfomiance of the DBF'S investrnent5 both in terms of income and capital value. The FAPC and the Trustees took the view that these risks are manageable. The DBF is reliant on the renewal in 2023 of the annual Low Income Communities Funding grant from the Archbishops, Council. £167.072 was received in 2020. 2020 Annual Report and Finanoalstatements THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT Aor the yeorended31 December 2020 AcfiviTIES AND ACHIEVEMENTS {coniinued) New SouTce5 of Income The Arthbishops, Council Covid-19 5U5tsinability grant of £210.(hXI was awarded after several months of careful consideration and close cooperation between the DBF and the Strategy and Oevelopment team of the Church Commissioners. Such funding may not be available again in 2021 and it is not included in the budget for 2021. In December 2020. the Allchurches Trust awarded the DBF a Transformational Granv of £250,000, paid over the three years 2020 to 2022. This is described in further detèil on Page 13. It will support a range of digital projects includiw a new websrte. The funding 15 granted on the condition that it is not used for '8usiness as Usual, but for new projert work. £IIO.(KK) was received in December and is disclosed as Restrirted income in Note 20 (al. A further new funding bid may be made to the Church C￿mMiSsiOne￿ Strategic Development Fund late in 2021 should innovation bids be invited. Loan and Uquldlty In thè Auturnn of 2020. the Finance Audit and Personnel Committee decided that the DBF Should increase the proportion of funds it holds as liquid assets. As a result. £500,000 worth of investment units were sold in December. In addition, a low interest Il>year loan of £500,(KKI was taken out with CCLA in January 2021. The interest payable on this loan when it was agreed was 0.85%pa. The rate floats in relation to CCLA'5 own fund and at the end of April 2021 was 0.65%. This improves the liquidity of the Diocese whilst at the same time reducing the market risk attached to the DBF'S investments. The incorne from the investment portfolio will be marginally reduced as a result. The DBF plans to repay the loan in bi-annual equal instslments over the 10-year period from May 2021. The DBF holds and administers funds on behalf of thaplaincies. A review was condutted by the FAPC into this practice during 2020 and resolved that it is an appropriate and well managed activity. Safeguards were suggested and are in place to ensure continued financial security and compliance for all parties. Rent on the offices at 14, Tufton Street The D8F has negotiated terms for a 5hort-temi extensKin of the lease of the offKe spate in Tufton Street. This continues to be let on very favourable terms but the DBF rnay have to relocate to new offices from the end of 2022 depending upon the plans of the landk>rd. which is the Corporation of Church House. Furlou8h The DBF operates with a small staff team of 14 FfE who were fully occupied during the peak of the pandemic. One member of staff was furloughed for 3 months. which res￿￿ed in £5.010 being received by the DBF from the HMRC. 2020AnnuJl Report and FinunciGIStatements THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT Aor the yet7rend¢d31 De¢ember2020 ACTIVITIES AND ACHIEVEMENTS Icontinuedl Dlocesan Investments The diocesan investments were closely monÉtored throughout the year and their value was reported Tegularly to the FAPC. The DBF'S investment manager. CCLK attended several FAPC meeting5 to update the committeeon investment perfomanceand strategy. The investments dropped invalue by nearly 15% in March 2020 as the pandemic hit but had fulty recovered by the year end and were slightly ahead of the opening position. See Note 15. The majority of DBF'S investments are managed by CCL4, whose perfomiance outperformed those of many large fund managers. This performance has also benefrted many chaplaincies and trust funds of which the D8F is the ¢ustodian trustee. See Note 20 {a). Summary of Fund Movements. Penslons No issues arose in the year regarding pension liabilities of the DBF or for staff and clergy enrolled in the Clergy Pension Scheme of the Church Workers PenS￿D Scheme. Common Fund Allocatlon Workln8 Group A Working Group made up of clergy. laity, archdeacons and senior staff, with financial expertise from acro55 the Diocese, completed its work examining all aspects of the Common Fund allocation. DK*cesan Synod has a8reed with recommendations that were made to improve the Common Fund process. In 2020, the FAPC agreed the following additional recomrnendations ofthe Working Party- l. To consult on a proposal to measure membership as a combination of Electoral Roll and Usual SundayAttendance from 2021. 2. 8ringing under the calculation the small chaplaincies who have hitherto paid a nominal sum outsidethe scheme. These proposa15 are likely to be introduced in 2022. The Working Group will continue to meet at least once a yearto rnonitorthe Common Fund process. Some mernbers are also joining a new Stewardship Working Party. The Common Fund Exemption5 Committee la sub-committee of the FAPCI now meets eath year to agree iterns of incorne and expenditure which will not be included in the cakulation for individual chaplaincies. 2020Annuul Report and Finonciolstotements io THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT for the yeorended 31 December 2020 AcnvrtlES AND ACHIEVEMENTS Icontinued) Senlor Staff Change5 The team of stand-alone stipendiary archdeacon5 was cornpleted with the appointment of Revd Dr. Peter Hooper to be Archdeacon of France from February 2021. He will take on responsibility for the Archdeaconry of Switterland in January 2022 when Revd Canon Adèle Kelham retires. Rev'd Sam Van Leer became Acting Archdeacon of North West Europe in November 2020 following the resignation of the Ven. Dr. Paul Vrolijk to return to his poSit￿n of Senior Chaplain at HO￿ Trinity Brussels on a full-time basis. The Ven. Meurig William5 took up a new posrtion in Ireland, leaving a vacancy at the end of 2020 as Bishop's Chaplain. Rev'd Canon Alan Strange was appointed to this ful￿tIMe wsition and started work in April 2021. The new Dean of Gibraltar, Rev. Canon lan Tarrant took up his p95ition early in 2020 and was licenced in October. There were no changes in the lay senior staff tearn. Followng her succes5fv1 introduction to the Diocese in November 2019, the Head of Safeguardin& Grace Fa￿n agreed a new long-temi contract in July 2020. Safeguarding The Di¢xesan Safeguarding Team 1.osri has continued to develop the service with an objective to ensure a 'Safe Church for All, across the Diocese. A number of important matters have inforrned the process. l. Independent Inquiry into ChildSexuolAbuse fllCS4) The IICSA published its report into safeguarding in the Anglican Church on 6, October 2020. The link to the full report is here: 1tt )s' -ation lan&.Iican-chiJrc:i A joint open letter of response to the report was published on the Diocesan website by Bishop Robert and Bishop David Hamid at.'htt i rn5t.'161'.2-.Icga part of recommendation I, in the Diocese in Europe the DSA IDiocesan Safeguarding Adviser) title has been changed to Head of Safeguarding betterto reflectthe range of responsibilities and status of the role which goes well beyond giwng adwce. The Diocese is represented on all the NST workstreams to ensure that the exceptional circum5tance5 of chaplaincies operating in juri5dKtions beyond the UK are recognised in any new regulations and structures introduced. The Bishop, COO and the Chair of the Diocesan Safeguarding Advisory Committee have also been activety engaged in discussions with senior NST and Archbishops, Council representatives alx)ut the changes. 2. Stoffing The structure of the DST was reviewed and amended during the year to improve the response to safeguarding concems and meet the needs of the new online training programmes. 2020Annuol Report ond Finoncialstatements li THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT lor the year ended31 December 2020 AcfiviTIES AND ACHIEVEMENTS (ctyrtlnued) Safe8uardln8 (contTnued) 3. Coses Case Work continues to increase. 47 formal referrals V￿re recerved in the year12019= 171. A more formal triaging process has been intrOdU￿d for all concern5. 4. Troining Europe was one of the first dioceses to adopt the new nat￿nal C2 Virtual Leadership traifting programme. 262 people have taken the course and surveys reveal a very positive response. The DST has ended the previous costly face to face sessions. Training is now more agile and reaches more people. Over a hundred Chaplaincy Safeguarding Officers attended the first bi-annual online safeguarding conference. CSO conferences are supplemented by regular online workshops. 5. Past Coses Review2 The Diocese is planning to complete this mandatory project by early 2022. It will incur Costs to the DBF of between £IOO,OW and £150,000 as all clergy and church officer files are independently reviewed. Progress was delayed due to the inaccessibility of both the London and Brussels offices during the lockdown. 6. DSAC The Safeguarding Adwsory Committee continues to provide an essential layer of governance. Two new independent members have been appointed followin8 a review of the skills ¢)n the committee, a public recruitment process and interviews. C(Nnmunlcatlons The pandemic underlined and increased the need for effective online communications across the Diocese. Over IOQ web articles were published in 2020. These contributed to the success of the online Eumpeon Anglicons magazine. A monthly online frNews bulletin wa5 launched in September 2020 and acquired 2,300 subscribers. At the same time. the Diocese re-launched its FaCeb¢￿k and Instagram profiles, and followers on both platforms is growing rapidly. Foll￿ver$ on Facebook grew to 9(J) in the last quarter of 2020. Five Pan-Dio¢e5an service5 were held on Z(Kim during the year. These were also live streamed and made accessible on demand on the diocesan YouTube channel. Online training sessions were provided to chaplaincies on innovative use of Zoom. social media platforn)s and chaplaincy social media planning. Communications have been enhanced by the recruitment of a part-time Diocesan D￿dits1 Communications Officer to a55iSt with our online publications and social media. 2020 Annual Report ond Finonciolstotements 12 THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT fvr the yeorended310erember2Q20 AcfiviTIES AND ACHIEVEMENTS Iconllnued) Communlcatlons1contlnued) The Director of Communications has also focused on linking key advocacy areas on European Institutions to communications opportunities in Diocesan and wider Church and international media, with notable successes so far on the Impact of Brexit on the Diocese. Genderjustice. and Freedom of Religion and Belief in Europe. Digital Diocese The Allchurches Trust grant of £250.¢￿) described on page 9 will provide for a new website, the presentation of a signifrcant online lay training initiatNe. support for development of social media platforms. trainin& new digital networks for ministry and mission and, in 2022123 a new white label template for chaplaincy websites. UK Notionals Support Fund.. Diocese in Eumpe Residencysupport Projert ("UKN5F"J In September 2020, the Diocese was contracted by the UK Government Project to 5UPPOrt UK nationals in applying for future residency in France. The project is fully funded by a grant of £250,OCII from the UK Foreign, Commonwealth and Development Office. The Project has an expert team of professional caseworkers. 6.CKKI people accessed services by May 2021 via a bespoke website and helpline. Ca$ev￿rkerS have assisted over 9(K) people with their applications. Covid constraints mean that most of the support has been virtual. The Project has been extended with additional funding for a further 6 months by the FCDO and now run5 to the end of 2021. Dlocesan Synod and Blshop's Coundl The pandemic prevented in person meetin85 of the Diocesan Synod and the Bishop's Council. The Diocesan Synod met ￿lce on Zoom initially in June 2020 as a gathering of rnernbers and then in full session over 2 days in December under constitutional provision5 publ￿hed in a Bishop's Instrument. At the June meetin& the Diocesan Synod considered the challenges presented by the pandernic and how these had been addressed thus far. Meeting formally as the members of the DBF the Synod members approved the Annual Report for 2019 and the revised forecast for 2020. The Trustees of the 08F met over 2 days in November at the Bishop's Council. This meeting approved the new financial plan and forecasts described above including the schedule of Common Fund increases up to and including 2024 and the likely cumulative budget deficit. 2020 Annuol Report ond Finoncialstatements 13 THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT fvrthe yegrended 31 Oec¢mlJer2020 AcrivmES AND ACHIEVEMENTS Icontlnued) Diocesan Synod and BIsho￿5 Coundl {contlnuedl In December, the Diocesan Synod met and focussed on the future. Presentations and breakout groups considered the approach to the challenge of being net carbon neutral as a Diocese by 2030, the Oiocesan Strategy on Racial Justice. Breathing Life, and the Church of England consultatK)n process on issues of human sexuality Livin9 in love ond Foith. The Synod also adopted the Clergy Covenant with commitments made by Clergy, Laity and 8ishops which will enhance the wellbeing of the Clergy in all chaplaincies. The meetingwas alsoanopportunitytoofferthanks andgoodwishestotheven. Meurigwilliams as he moved on to his new post in the D￿Cese of Cork. Cloyne and Ross in the Church of Ireland. It 15 likely that governance meetings will continue to be held online through much of 2021. Events The pandemic has curtailed the number and ra￿e of large gatherings and celebrations that would normally be a part of the year in the Diocese. Sorne events of note include: A series of pan diocesan online services were held.. The renewal of vows by the clergy (Holy Weekl. 8 minutes and 46 seconds of prayerfor racial justice, A service for the Commissioning of the People of God Ipentecostl, A Service Marking Creatiortide. An Advent Service of Prayer and Teathing, The Annual Service for the Friends of the Dh)¢ese including a briefing on developments over the past year The installation of the Dean of Gibraltar on 13th Ottober The death ofa former Dean and Archdeacon ofGibrakar. Ken Robinson The dedication of the refurbished church in (kistende Ordination services (with few attendees but a150 Streaming) in Ghent and Rome Volunteers The DBF is dependent on the huge number of people involved in chaplaincies. The number of active lunteer5 lor volunteer hours) given to the mission and ministry of the church is a key indicator of the health of a church. The service prowded to a community through church volunteering also has a significant impèct on people's relationship to the thurch particularly at times of crisis. Within this context, the D8F greatly values the eonsiderable time given by all committee members and other volunteers across the Di¢xese in pursuit of the church's mission. Measuring in a meaningful way the in-kind value of volunteer time to the operations of the DBF is particularly difficult. It is for this reason that no estimate of the value of thi5 time has been included in the financial statements. 2020 Annuol Report and FinonciGI Stotements 14 THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT fvr the yeurended 31 December 2020 FUTURE PLANS It is salutsry to look bark at last yearfs annual report for the Diocese in Europe and read the following passage.. 'It is very chollenging to ossess the finonciol impoct of CQVID-19 in ony one country. For the Diocese in Europe ocr055 40 muntrie5 prediction of the income of chaploincies orof the D8F is impossible. At present (June 2020J most churches are Still closed ond will reopen in very different woys in different countries. There will not be 17 return to any5ense of 'normal'formony months. Choploirties'ability to pay Common Fund to the 08F moy be hompered by.. l. Reduced giving in collertions due tofrwerservice5 2. Concelled big eventssuch os weddings 3. Concelled choploincyfund roisers 4. Loss of incomefrom commercial artNities such os shops concerts and property rentol 5. Lock of clority as to whether older or less heafthy members will ￿5h to attend church post lockdown 6. Uncertainty about the dun7tion of the COV1Tr19 impoct Choplaincies are nerwou5 about theirfinonualposition in 2021 giving apotentiollonger-term threat to DBF income., Much of the above still pertains at the time of Writi￿ a￿hOugh Common Fund contributions continue to be generous. The Diocese is refreshingly resilient across all its chaplaincies. Online engagement is at high level, very good appointments have been made, the number of enquiries regarding vocations remains healthy and varied and the profile of the Diticese y￿thin and beyond the Church of England has seldom been so high. As a result, two fvnders have made significant amounts available to help the Diocese move forward in difficult but exciting times. Though the financial outcome for 2020 is encouraging, the long term financial challenges faced by the DBF are real and will require prudence from the DBF and generosity from ehaplaincies in the years ahead. The agenda ahead is long and challenging but invigorating. Despite the resilience, the challenge of long- term financial stability for some chaplaincies is real and can only be met by increasing both membership and giving. The Diocese will strive for growth and depth in its mission. It will seek to build a church that is inclusive and broad in its demographics within the clergy and the laity. The Diocese will hear and act on the tall for Tacial justice and seek to show dynamic leadership in the battle to combat climate change. It s a church which, despite the pandemic. will continue to inspire people across 40 countries to Walk Together in Foith. 2020 Annuol Report t7nd Finonciol Stotements 15 THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT fvr the yeor ended31 December 2020 FINANCIAL REVIEW FIn￿dar performance The overall surplus for the year including all funds (before investment gains,) per the Statement of Financial Activitie5 on page 31 wa5 É149.57612019'. £597.6321. There was no exteptional income in 2020, although the one off £210,0¢)O grant from the Archbi5hops' Council VAS crucial to the outcome. In 2019 exceptional items of £745,946 transformed a deficit of £248,314 in to the surplus of £597,632 before investment gains. See Incorne and Expenditure Account on page 32. Investment5 regained the Substantial losses incurred earlier in the year, to produce a total gain of £563.83012019= £1.399,9821. Income Total income for the year, including the sustsinability grant of £210,OtM) and increased restrided income, wa5 £2,224.162 {2019: £1,787,695, before exceptional iterns). The contribution from chaplaincies through the Common Fund of £912,77112019: £883,885) made up 57%12019.' 68%, excluding exceptional items) of the £1.603,788 unrestrirted income12019: £1,307,871 before exceptional items). The Archbishop's Council grant of £210,(MXI made up a further 13Y.. In April 2020 the original Common Fund request was reduced by 20%, in response to the pandem￿. Restricted income increased by £240,550 to £620,374 {2019: £379,824). This includes the Allchurches grant for the 'Digital Diocese, of £IIO.OCX) received in December 2020 and £93,867 from the Foreign, Commonwealth and Development Office foi the UKNSF project. See Page 13 under the Communications paragraph for further information. No endowment income was received in the year12019: £1￿.000). Expendllufe During the year total charitable expenditure was £2.074.58612019= £1.936,0091, made up largely of dire ministry and mission costs and erants. See Note 8 on Page 42 for further details. Designated grants of £244,36112019= £127.4841 were made in the year. They included a new Covid-19 Hardship Fund of £200.000, established in ApTiI 2020 to SUPPOrt those chaplainc￿5 hit hardest by Covid- 19 to enable them to pay in particular clergy costs. £188,668 was paid in the year. The fund was greatly helped by the £68,654 donated by chaplaincies and individuals. Additionally, a designated fund of £25,000 was created to cover the costs of the Past Cases Review 2 of which £22.945 was spent in the year. See Note 20lal. Restricted expenditure totalled £480.789 12019: £414.1171. induding £93,867 matching the restricted income for the new Foreign. Commonwealth and Development Offrce project as detailed above. 2020 Annuol Report ond Financialstotements 16 THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT for the year ended 31 December 2020 FINANCIAL REVIEW (conllnued) Balance sheet Net assets as at December 31" 2020 were £11.726.51712019'. £11.013.1111. The total gain in the value of investments was £563,830 in total12019: £1,399,982) (see Note 15}. In Quarter 4 £5(M),000 value of unit5 were sold. Despite this, there was an increase in the value of listed investments of £63,830. This was achieved against the backdrop of the extremely volatile markets which resulted from the Covid-19 pandemic. The Proceeds of the asset sales were held as cash at the year end. The £200,(KJO spent by the DBF in Florence in 2LI)9 and previously described as a loan to the chaplainry. has now been reclassified as a social investment. The purpose of the expenditure wès to enable the DBF to support the redevelopment of apartments that are part of the church building, St Mark's Florence, which is owned by the D8F. The apartments will continue to benefit both the chaplaincy and the DBF. As at 31 December 2020 unrestricted funds were £4.782.86312019'. £4.504,0521- Restricted funds were £421,157 12019: £281.5721. Endowment funds were £6.522,497 {2019: £6.227,4871, an increase of £295,010 which is due solely to the gain on investments in the year. Budgets in October 2019, Bishop's Council agreed a near breakeven 2020 budget for unrestrirted general funds. Considering the turbulent year. the result for the year was much better than anticipated at the outbreak of Covid-19 due in large part to the receipt of the £210.0￿ sustainability grant, as well a5 careful financial stewardship. The overall re5uIt ha5 also benefitted frorn unbudgeted investment gains of £268,820. A new fouryear budget, covering the per￿d 2021 to 2024, was approved at Bishop's Council 2020. Only by 2024 will the request of the Common Fund be at the level envisaged under the financial plan in 2018. A substantial deficit of £1.4m was forecast for the five year period 2020-2024. to be funded from the unrestricted General Fund. It was unanimou51y agreed by the TTUStees that by the end of 2024 the D8F should be breaking even. Legacles A small number of chaplainties benefitted from legacy income in the past year. The promotion of giving by legacy to chaplaincies or to the Diocese. will be a focus for more activity in the future. as such giving can make a significant impact. Remuneratlon of key management persmnel The responsibility for settin8 salarie5 for all stsff. including senior personnel. lies with the FAPC. which is always mindful of prevailing market conditions. 2020Annuol Report ond Financial Stotements 17 THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT Aor the yearended31 December 2020 FINANCIAL REVIEW (contlnued> Grant maklng polky The Trustees award grants principally through FAPC. These are nonTral￿ to establish new chaplaincies via the Diocesan Development Fund or develop new mission initiatives Wlthin a chaplaincy or archdeaconry or in support of agencies or Organisat￿n$ which directty benefrt the DBF but which do not char8e fees, via the Mission Opportunity Fund. Investment pdlcy The policy of theTrustees is to invest in a diversified portfolio of quoted equity andfixed interest securities. They take into account the requirements of the law ift relation to the iftve5tment of charitable monies, while seeking the best p￿sIble returns and having due regard to preservation of capital. Investment decisions also take account of the funds. ethical policies and ensure that these fall within the guidelines approved by Church of England General Synod. The Company invests through common investment funds and does not invest dirertly in the stock market. For operat￿nal reasons. it also has certain interests in property. The portfolio held is diverse and designed to withstand pressures that may come in various parts of the global economy. The FAPC meets quarterly and is updated on the portfolio's performance. The need to draw down on investments is approved at these meetings. Representatives of cc￿ who manage all the Diocese's investments and the vast majority of the Endowment Funds, regularly attend FAPC meetings and provide updates. Reswves pollcy The Trustees consider it important to carry reserves to cover unforeseen eventualities and the possibility of future operating deficits, taking into account the tdrt that more than half of all funds are endowed for specific purposes. In the case of unrestricted fund5. the Trustees seek to maintain general reseNes that will sUPPQrt the ongoing mission of the Diocese and allow the Company to operate as a going concern. The Unrestricted General Fund was £4,455,05112019.. £4.255.1701 at the end of the year. The DBF has been actustomed to holding two years. operating COSts in reserves. Within unrestricted reserve5, the Trustees also have four designated funds totalling £327.81212019: £248.8821 at the end of the year. See Note 20lal and Note 20 Ibl for further detsils. Current accounts with chaplaincies, which are not matched with specific investments, are retained in the DBF'S balance sheet as creditors due within one year. These amounted to £1,192.632 at the year end12019= £1.143.861}. See Note 18. 2020Annuol Report and Finonciolstotements 18 THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT Aor the year eftded311)erember2020 FINANCIAL REVIEW Ic(bntlnued) Other fundlng whlch has an Influence on the Ilfe of the Dlocese All chaplaincies in the Diocese are required to be finantially selfsufficient. They are funded largely by electorol rolls members and visitor5 and in some cases by returns on investments and local commercial activity. Thanks are also given to mission agencies working in the DiLKese, including Mission to Seafarer5 (which fund5 several port chaplains). USPG {maior funders. property owners and former patrons of the majority of chaplainciesl, ICS (which retains patronage of 23 churches and supports some Seasonal work), and the Allchurches Trust which supported bjth the DBF and the See Cathedral. Following the pandemic, èttention is being given to online giving and moving away from the reliance of givin8 in person. Goln8 concern In light of the financial impact of cov1￿19, the financial position and forecasts have been reviewed, tsking into account the levels of investment reseThes and cash. As a result of this review. the Trustees believe that the Diocese will be able to manage operational and financÈal risks successfully. A5 explained in the Investment Policy above. the portfolio is very diverse and is designed to withstand adverse market conditions, Such as those currently being experienced. The DBF will seek to avoid selling investments at low points in market valuations. In January 2021, a ten-year loan of £500.IXK> wa5 Qbtsined from CCLA. the DBF'S investment rnènagers, on favourable terrn5. See Note 25 for further details. It continues to be the Trustees, policy to invest surplus funds in fixed asset investments for the long-term so that the best returns are achieved. The Trustees are confident that the DBF can access these resources at short notice should the need arise to satisfy current liabilities. Accordingly, the Trustees have a reasonable expectation that there are adequate resources to continue in operational existence for the foreseeable future. As a consequence. they continue to support the going concern basis of accounting in preparing the annual attounts. 2020 Annual Report ond Finontit715totÈments 19 THE DIOCESE IN EUROPE BOARDOF FINANCE ANNUAL REPORT lor the yeor ended31 Ikcernber2020 PRINCIPAL RISKS The Trustees are responsible for maintaining a sound system of financial control to safeguard the Company's assets. The FAPC identifies the rnajor risks to which the Cornpany is exposed. and such systems and procedures as are practicable are in place to mitigate those risks. A formal risk a55essment review is conducted annually at the Winter meeting of FAPC, v4hich monitors the risks and the effectiveness of the system of internal control operated by the Company. The m05t significant risks are as follows: Safeguordingfailure A big case could have a significant reputstional or financial impact. This ￿ mitigated by a strongly led Safeguarding Advi50ry Cornmtttee, the engagement of professional safeguarding staff, diocesan safeguardin8 policy and training and the DBF'S insurance. Investment underperformance Poor investment performance could have an adverse effect on the ability of the DBF to meet its financial commitments. However, to reduce the chance of this, funds are invested with an established and reputable fund rnanager. Funds are widely spread. and performance is monitored. £500,000 worth of units have been liquidated on the advice of the FAPC in 2020. Hozords Fire, fl¢)od and computer failure. The Diocese has insurance in place with a reputable insurer to coverthese risks. The Diocese is also a tenant of Church House in Westminster and uses services provided by Church House. It can therefore rely on disaster recovery and computer back-up routines employed by the National Church Institutions. Chaplaincyfinances Chaplaincies face a range of issues which in some cases make payment of Common Fund very challenging. This is mitigated by prudent financial planning and encouragement of appropriate stewardship and givin8. In addition. the work of the Common Fund AllocatK>n Working party antl improvements in tommunication have assisted chaplaincies better understand the diocesan finances and mre willing to pay their Shale. Funds held as custodion Trustee The OBF holds investments and cash on behalf of chaplaincy councils. Care 15 tsken to ensure the funds are managed correctly and that sufficient liquidity is maintsined to ensure any demands for repayment can be met. This matter was reviewed by the FAPC in the past year 2020. Globol pondemit The effects of a significant disaster were covered by the risk regirter when it wa5 last reviewed though a lobal pandemic was not specified. The widespread impact of the viru5 may continue for 2-5 years with an impart on chaplaincy and hence diocesan income. Ths rnight be partially mitigated by improved 5teward5hip by chaplaincies and improved cost control at all levels within the Diocese as well 3$ some changes in the pattern and deployment of ministry in chaplaincies. 2020Annut71 Report ond Finon¢i015tatements 20 THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT for the yeorended31 December 2020 STRucfuRE AND GOVERNANCE The Diocese in Europe is a Diocese of the Church of England in the Province of Canterbury. The legal framework for the Diocese is the 'Dioce5e in Europe Measure I98￿ and the ConstitutHJn of the Diocese 1995. While the Diocese in Europe Board of Finance 15 autonomous for most practical purposes, decisions may be influenced by those tsken by the Church of England. The OBF is a Company which 15 limited by guarantee and which does not have share capitsl. It is incorporated in England and Wales wfth the registrntion number: 106580. Dlrectors and Trustees Under the Memorandum and Articles of Association. members of the Bishop's Council are designated as Directors for the purposes of the Companies Act 2006 and are Trustees under chartty law. The members of the Diocesan Synod are the members of the Company. The members of the board may derive no benefit, income or capitsl interest from the Companvs affairs from their position, other than the reimbursement of out-of-pocket expense5. In the event of the Company being wound up, each member, who isa memberatthat time, has undertaken to contribute £1 to the Company. The FAPC agreed to the management contracting the current Chair of the DBF to offef some financial consultancy durirvd the year outside of his trustee duties. Constltullon The constitutK)n of the DBF is set out in its rnemorandurn and articles of association. Episcopally led. the DBF'S activities are directed by the Diocesan Synod and Bishop's Council which a150 meets as the 8oaid of the DBF and as the Trustees of the charity ItO8ether Yhe Trustee<). Organlsatlon and declslon4naklng structsre Members of Diocesan Synod are als0 Members of the Company and the charity. They set priorities and the overall financial strategy for the DBF in its prime imperntive to participate in God's mission by and to Anglicans across the area covered by the Diocese in Europe. TheTrustees meet once a year at Bishop's Council to approve the budgetforthe following year; to consider strategic financial matters and monitorthe implementstion of financial policies. Members of the Companv meet annually during Diocesan Synod to consider and approve the annual report and forecasts. 2020Annual Report and Financial Statements 21 THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT for the yearended31 December2020 STRUCTURE AND GOVERNANCE Icontlnued) Organisatlon and decislon-making stwrture (conlinued) The FAPC meets at least four times a year to review the DBF'5 overall actrvities against budget, consider investment policy and performance. and approve requests for grants. It also reviews the budgets prior to their presentation to Bishop's Council and the Annual Report prior to its presentation to the DBF members at the Diocesan Synod. Membership of the committee is a bakince of ex-officio appointments and members elected by the Trustees every three years. It ￿ proposed to coopt a personnel expert following a review of the skills available to the committee. Appointment and inductlon ofTrustees At the start of each new triennium new Trustees and members participate in an induction process and receive information about roles and responsibilities. Trustees are periodi¢ally provided with updates on best practice. Other or8anlsatlons wlth whlch the Board coyates In athIev1￿ its objectives The Company's artivities invofve regular and routine financial transactions with chaplaincy councils in the Diocese as well as the central Church authorities, though none of these bodies are a connected charity as defined by charity law. In addition, there are links lin respect of finance and artivitiesl with various related agencies, together with dl0cesan-v￿de voluntary and statutory organi5ation5. Declslon m¥klng and delegatlon poll Diocesan Synod sets and approves strateey and policies. The Board sets the annual budget and makes decisions on the financial policy for the Di¢Kese. The day-to-day management and implementstion of agreed strategies and policies is undertaken by senior stsff. Funds held as Custodlan Trustee on behalf of others The Board holds investments and cash as custodian trustee on behalf of its chaplaincy councils and trusts. Where amount5 owed to chaplaincies ond trusts are matched by specific investment and cash balances these are excluded from the DBF'S balance sheet and are recorded in Note 23. 2020Annual Report and Finon¢io15tatements 22 THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT for the yeorended 31 December 2020 STRucfuRE AND GOVERNANCE (contlnued) Publlt benefit The Trustee5 are aware of the Charity Comrni55ion's guidance on public benefrt Yhe Advancement of Religion for the Public Beneftt" and have regard to that guidance in their administration of the charity. The DBF believes that thi5 report provides evidente of the public benefit of the charity's work in 2020. As described more fully throughout the report, the DBF provide5 funds to supp)rt the work of Anglitan Chaplaincies in Europe part of North Africa and Russia. The vast majority of churches are available to the public at large ond none is restricted to members of the Church of England. Trustees, Indemnlty The DBF prowdes insurance to Trustees against liability in respect of actions brought by third parties, subject to the conditions set out in the Companies Act 21XJ6. Such qualifying third-party indemnity insurance remains in force as of the date of approvin8 the Trustees, Annual Report. 2020 Annual Report and Financial Statements 23 THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT for the yearended 31 December2020 STATEMENT OF TRUSTEES. RESPONSIBILITIES The Trustees Iwho are also the directors of the charitsble company for the purpose of Company lawl are responsible for preparin8 the Annual Report and the financial ststements in attordance with applitable law and regulations. Company law requires Trustees to prepare financial ststements for each finanelal year. Under that law the Trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Prartice IUK Accounting Stsndards and applicable law). The financial statements are required by law to give a true and fair view of the stste of affairs of the DBF and of the surplus or deficit of the DBF for that period. In preparing these financial ststements the Trustees are required to: Select suitsble accounting polKie5 and apply them consistently Observe methods and principles in the Charities SQRP Make judgements and estimates that are reasonable and prudent State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements Prepare the financial statements on a going concern bas￿ unles5 it 15 inappropriate to 455ume that the Company will continue in operation The Trustees are also responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the DBF and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the D8F and hence for takin8 reasonable steps for the prevention and detection of fraud and other irregularities. This report has been prepared in accordance with the special provsi¢)ns relatingto small cornpanies within Part 15 of the Companies Act 2006. 5tatemeni of disclosure to the Audlt As far as the Trustees are aware. there is no relevant audit information of which the charitable CoMpan￿S uditor is unaware. The Trustees have taken all steps that they ought to have taken as Trustees in order to make themselves aware of any relevant audit information and to estsblish that the charitable Company's auditor 15 aware of that inforrnation. Appolntment of Audltor A resolution to reappoint Hay5macintyre LLP as auditor to the Company will be prop05ed at the Annual General Meeting. On behalf of the Board of Trustees on 9 June 2021 M Fegan- Chair 2020 Annual Report and Financial Statements 24 THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT fvr the yeorended31 December 2020 ADMINISTrATIVE D￿AlLs Trustees No trustee had any beneficial interest in the Company during the year. The following served as Directors and Trustees throughout the year. except where stated: Ex officlo Mr. M Fegan {Chairl The Right Re¢d Dr. R Inne5- 8ishop of Gibra￿ar in Europe The Right Rev'd Dr. D Hamid- Suffragan Bishop The Rerfd T Makipaa (Chair. House of Clergy) Mr. D Coulston (Chair, House of Laity) The Venerable L Nathaniel- Archdeacon of the East. Germany & Northern Europe The Venerable P Vrolijk- Archdeacon of North West Europe- resigned 22 November 2020 The Venerable D Waller-Archdeacon of Gibraltar Ifomierly Elected to House of Clergy) The Venerable M Williams- Archdeacon of France- resigned 31 December 2020 Elected. House oALalty Ms S. Boyd Mr. D Bean Mrs. J 8erry Mrs. M Kopett Ms. M Talbot Mr. P Tillbrook Mr S Urquhart Elerted- House ol Clergy The Rewd Canon A Dickinson The Revd Canon D Flach The Revd Dr. F Hegedus The Revd A Lowen The Rerfd R Seabrook The Re¢d A Strange Nomlnoted by the Bishop of Gibmftorln Europe The Rev'd Canon S Godfrey The Re¢d P Jackson The Rev'd S Prasadam Mr. D White 2020Annual Report and Financiolstotements 25 THE DIOCESE IN EUROPE BOARD OF FINANCE ANNUAL REPORT Jor the yeor ended 31 December 2020 ADMINISTRATIVE ￿AlLs Icortinued) Flnance, Audlt and Personnel Commlttee (-FAPC) The following served on the FAPC throughout the year and to date, except where othefwise stated: Mr. M Fegan (Chairl The Rt Rerfd Dr. R Innes- Bishop of Gibraltar in Europe The Rt Rewd Dr. D Hamid- Suffragan Bishop Mr. O Bean- Elected House of Laity The Rewd Canon Dr. P Hooper- Acting Archdeacon of France- appointed 14 February 2021 The Rev'd P Jackson- Elected House of Clergy Ms. H Thomas The Venerable P Vrolijk- Archdeacon of North West Europe- resigned 22 November 2020 The Rerfd R Williams 5enlor Staff and prlndpal advisers A Caspari- Chief Operatiro Officer IDiocesan Secretsry) I Company Secretary Re8lstered offlce 14 Tufton Street London, SWIP 3QZ Telephone.. 0044101207898 1155 e-mail= bron.panter@churchofengland.org www.europe.anglican.org IndepeThlent Auditor Haysmacintyre LLP 10 Queen Street Place London EC4R IAG Investment manager CCLA Investment Management Ltd Senator House 85 Queen Victoria Street London EC4V 4 Bankers Barclays Bank plc Media, 27 Soho Square, London WID 3QR Legal registrar Aiden Hargreaves-smith Partner. Winckworth Sherwood Minerva House 5 Montague Close London SEI 98B National Westminster Bank plc PO Box 34, 15 Bishopsgate London EC2N 3NW 2020 AnnuGI Report and Finonciol Statements 26 THE DIOCESE IN EUROPE BOARD OF FINANCE INDEPENDENT AUDITOWS REPORT TO THE MEMBERS OF THE DIOCESE IN EUROPE BOARD OF FINANCE fvr the yeor ended 31 December 2020 Oplnlon We have audited the financial statements of The DKKese in Europe Board of Finance for the year ended 31 December2020which comPr￿ethe Ststementof Financial Artivities, the Summary Income and Expenditure Account, the 8alance Sheet. the Cash Flow Ststement and the notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable Liw and UnÈted Kin8dom Attounting Standards, includin8 Financial Reporting Standard 102 The Financial Reporting Stand¢7rd ¢7pplicoble in the UK and Republic of Irelond (United Kingdom Generalfy Accepted Accounting Practice). In our opinion the financial statements= give a true and fair view of the state of the tharitable company's affair5 as at 310ecember 2020 and of the charttable companvs net movement in funds for the year then ended,. have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice,. and have been prepared in accordance with the requirements of the Companies Act 21J)6. Basls for oplnlon We conducted our audit in accordance with InternatK•nal Standards on Auditing IUKI IISAS IUKII and applicable law. Our responsibilities under those stsndards are further dexribed in the Auditorfs responsibilities for the audit of the financial statements section of our report. We afe independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, includingthe FRCS Ethical Standard. and we havefulfilled 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. Concluslons relatlng to zolng concern In auditing the financial statements. V￿ 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 Klentffied any material uncertainties relating to events or conditions that. individually or collectNely, may cast significant doubt on the charitable company's ability to continue a5 a going concern for a period of at least twelve rnonths frorn when the financial statements are authorised for issue. Our responsibilities and the responsibilitie5 Of the Trustees with respect to going Concern are described in the relevant section5 of this report. 2020Annuol Report and Finonciol Stotements 27 THE DIOCESE IN EUROPE BOARD OF FINANCE INDEPENDENT AUDITO￿5 REPORT TO THE MEMBERS OF THE DIOCESE IN EUROPE BOARD OF FINANCE lor the yeor ended31 December2020 Other Informatlon The Trustees are responsible for the other inforrnation. The other information comprises the information included in the Trustees, Annual Report. Our opinion on the financial statement5 does not over the other information and, except to the extent otherwise explicitl¥ stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial Statements, our responsibility is to read the other information and, in doin8 SO, tonsider whether the other infomiation is materially intonsistent wrth the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements. we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If. based on the work we have performed, we conclude that there is a material mi55tatement of this other lnforniat￿n, we are required to report that fact. We have nothing to report in this regard. Opinions on other matters piesttlbed by the Companles Act 20 In our opinion, based on the work undertaken in the course of the audit= the information given in the Report of the Trustees for the financial year for which the financial statements are prepared is consistent with the financial statements; and the Report of the Trustees has been prepared in accordance with applicable legal requirements. Matters on whlch we are Tequired to report by exceptlon In the light of the knowledge and understanding of the charttable tornpany and tts environment obtained in the course of the audit. we have not identified material misststements in the Trustees, Annual Report. We have nothing to report in respert of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: adequate accounting records have not been kept by the charitsble company, or returns adequate for our audit have not been receNed from branches not Visited by us: or the charitable company financial ststements are not in agreement with the accounting records and returns- or certain disclosures of Trustees, remuneration specified by law are not made,. or we have not received all the infomiation and explanations we require for our audit; or the Trustees were not entitled to tske advantage of the small companie5. exemptions in preparing the Trustees, report and from the requirernent to prepare a strategic report. 2020 Annual Report ond Financiol Stotements 28 THE DIOCESE IN EUROPE BOARD OF FINANCE INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE DIOCESE IN EUROPE BOARD OF FINANCE fvr the year ended 31 December 2020 Responslbllltles of Trustee5 for the finandal statements As explained more fully in the Trustees, responsibilities staternent, the Trustees Iwho are also the directors of the charitsble company for the purposes of company lawl are responsible for the preparation of the financial statements and for being satsfied that they give a true and fair view, and for such internal control as the Trustees determine is nece55ary to enable the preparation of financial ststements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements. the Trustees are responsible for assessing the charitable companvs ability to continue as a going concern, disclosing, as applitable, rnatters related to going concern and using the going concern basts of accounting unless the Trustees either intend to liquidate the charitable company or to cease operations. or have no realistic alternative but to do so. Audltorfs responslbllltles for the audlt of the flnandal statements Our objectives are to obtain reasonable assurance about whether the financièl statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorfs 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 IUKI 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 decisK)ns of users taken on the basis of these financtal statements. Irregularities. including fraud. are instance5 Of non-cornpliènce vitth laws and regulations. We design procedures in line with our responsibilities. outlined above. to detect rnaterial misstatements in respert of irregularities. including fraud. The extent to which our pnxedures are capable of detecting irregularities, inrluding fraud is detailed below: Based on our understsnding of the charitable company and the environment in whith it operates. we identified that the principal risks of non-compliance with laws and regulat￿n$ rekited to charity law, and we considered the extent to whith nonany has rK) tjorTh￿n￿s. 2020 Annuol Report and Finonciolstatements 34 THE DIOCESE IN EUROPE BOARO OF FINANCE NOTES TO THE FINANCIAL sfATEMENTS for the year Ènded 31 December 2020 l. Accountln8 Pollcles a) General Information The DBF is a charitable Company limited by guarantee incorporated in England and Wales and registered with the Charity Commission. b) Accounllng conventlon and basls of pTepaTatlTh) The financial staternents have been prepared under the historital cost conventK*n, with the exception of fixed and current asset investments, which are included at their market value at the balance sheet date. The finan¢ial ststements have been prepared in accordance with the Statement of Recommended Practice for Charits"e5 {SORP FRS 102), second edttion effective l January 2019. the Companies Act 2006, and applicable accounting Standards IFRS1021. The DBF meets the definition of public benefit entity under FRSIO2. t) Going concern The Trustees consider that there are no material uncertainties regarding the DBF'5 ability to continue as a going concernlsee page 19 for further details). d) Income All incoming resource5 are included in the Ststernent of Financial Activities l°SOFA°I when the Board is legally entitled to them as income orcapital respectively, when U￿lmate receipt is reasonably certain and the amount to be recognised can be quantified with reasonable accuracy. The principal 50urce of income of the DBF is Common Fund donations. These monies are recognised in the SOFA in the period for which they are receivable. Monies received after the new Common Fund request is made are included in the current year on an entitlement basis. Grants received which are subject to pre-conditions for entitlement or where use ￿ specified by the donor are included in ereditors where these pre-condition5 have not been met at the balance Sheet date. Legacie5, contributions and other donations are accounted for when conditions for their receipt have been met. Investment income is recognised when receivable. el Expendllure Expenditure is accounted for on an accruals basis and has been aggregated under the relevant SOFA category. Expenditure include5 irrecoverable VAT. Charitable expenditure consists of expenditure on resourcing ministry and mission in the chaplaincies of the Diocese. 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 discretionarv requirements to the satisfaction of the DBF. These grants are recognised as expenditure when the conditions attaching to the grant are futfilled. Grants offered which are subject to conditions which have not been met at the year-end are noted as eomrnitrnents. but not attrued as expenditure. 2020 Annual Report and Financial Statements 35 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS fvr the year ended 31 December 2020 l Accountlng Pollcles Icontlnued) e) Expendlture 1¢￿tInued) Support C05t5 consist of central management. administration and governance costs. Administrative support associated with making 8fants is insignif￿ant and all costs are alhxated to resourcing ministry and mission charitable expenditure. l) Tanglble Ilxed assets Assets in excess of £300 are capitalised as tangible fixed assets and are ststed at cost less depreciation. Depreciation is provided on all tangible fixed assets Other than freehold land, at rates calculated to write off the cost of each asset on a straght-line basis over its expected useful life, as follows.. Freehold buildings Leasehold property Leasehold improvements Equipment 100 years Over the terrn of lease 21 years or temi of lease S years Properties included in fixed assets only include those properties acquired after 1974. The details of properties owned by the DBF prior to 1974 are recorded in a property register, but the historic cost is not known and therefore not included in the balance sheet. None of these are "Herrtage Assets". g) Inveslments Investments are included in the balance sheet at market value with the gain or loss tsken to the SOFA. h) Soclal Investments Social investments are at cost less aTry necessary impairment. They are not amortised. 11 Leases The DBF is onty party to operating lease5 and has no finance leases. The rental on these operating leases is charged in full as expenditure in the year to which it relates. Where rent free periods are given as part of an operating lease. the impact of this rent free period 15 included in the SOFA over the shorter of the overall lease term or the period until the first break clause. l) Forel8n exthan8e Transactions in foreign currencies are translated at the rate ruling on the date of the transaction. Foreign currency balances are translated at the balarKe sheet date and any differences are included in the SOFA. 2020Annuol Report ond Financiolstatements 36 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS for the ye¢7rended 310ecember 2020 l Accountln8 Pollcles Ic(mtlnued) kl Chaplalncy a(c￿nts Where the Diocese invests money on behalf of individual chaplaincies. these a55ets and the associated liability to the chaplaincy are not included in the balance sheet. However, whefe the Diocese operates "current accounv with a chaplaincy, and the amount owed to a chaplaincy 15 not covered with specific assets in the chaplaincy name. these liabilities to the chaplaincies are recorded in creditors. If these obligations to chaplaincies were required to be Settled. they would be settled out of the general unrestricted assets of the Diocese. 11 Penslons The a¢¢ounting treatment for the pension scheme5 in which the DBF participates is descrlbed in Note26. m) Finanoal Instruments- assets and Ilabllltles Debtors Debtors are recognised at the settlement amount due. Cash and cosh equivalents Cash at bank and cash in hand held in short te￿ highly liquid inve5trnents wrth a short maturity of three months or less from the date of acquisttion or opening of the deposit or similar account. Creditors ond provisions Creditors and provisions are recognised where the DBF has a present obligation resulting from a past event that will probably resu￿ in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provi5ion5 are normally recognised at their settlement amount after allowing for any trade discounts due. Equity shore loon The D8F had one loan forwhich the settlement proceeds were based on the value of the equity in property. As this constituted a non-basic financial instrument under FRS 102 this loan was recognised at fair value and revalued at each reporting date. Any gains and losses arising at each year end were recognised in the SOFA. 2020 Annuol Report and Financial Statements 37 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS for the yeor ended 31 December2020 l Accountlng Polides Ic(mtinued) n} Fund balances Unrestricted Funds Unrestricted Funds are the D8F'5 corporate funds and they are freely available for any purpose within the Companvs objects. at the discretion of the DBF. There are two types of unrestricted funds: General Funds which the Diocese intends to Use for the general purposes of the Diocese. De5ign¢7ted Funds which are allocated to a specific purpose but which are, nonetheless, unrestricted. Restrirted Funds Restricted Funds are income funds subject to conditions Imposed by the donor as specific terms of trust, or else by legal measure. Endowment Funds Endowment fund5 are held on trust to be retsined for the benefit of the donor charity as a capital fund. In the case of endowment funds administered by the DBF, there is no provision for expenditure of capital and all are classed as permanent endowments. A mana8ernent eharge of 5% of income isapplied to all funds to cover accountancy and administration costs. 2020Annuol Report and FinanciJlStotements 38 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENT5 for the yearended 31 December2020 2 Crltlcal accountlnz Judgements and estimates In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the DBF'S accountin8 policies and the reported a55ets, liabilities, income and expenditure and the d￿lOsUre5 made in the financ￿1 statements. Estimates and judgements are continually evaluated and are based on historical experience and other factors, Including expectations of future events that are believed to be reasonable under the circumstance5. Key areas subject to judgement and estimatK)n are as follows: Recoqnltlon of definedbenefftpen$I￿ scheme credftor The DBF is different to many other English diocesan boards of finance in that the cleryy for overseas ehurthes are legal employees of those local churches in order to comply with the different legal and tax frameworks in place across the wide geographical area in which the DBF operates. Consistent with this practice the relevant 5tipendTrary and pension expenses for overseas clergy are recognised in the financial statements of the local churches and not in the financial statements of the DBF. FRS102 requires an entity that has entered into an agreementto reduce the historic deficit on a multi- emptoyèr pension scheme, to recognise the liability in accordance with FRS102 section 28.13 and 28.13A. The D8F has a payment plan with the Church of England's pens￿￿n$ Board to make additioftal contributions to the clergy pension scheme to fund the estimated deficit under the recovery plan until 31 December 2022. The Trustees consider that, while the DBF is the legal member of the scheme responsible for mèking contributions to the Church of England pension stheme, the 5ubstsnce of the arrangements in place is that the DBF only acts as a conduit for penS￿n contributions for overseas clergy and therefore the liability lies with those overseas churches. On this basi5 the Trustees consider it appropriate to recognise the deficit only for those members of the clergy that the DBF is directly responsible for. At the balance sheet date this was one individual. The DBF has estimated the liability to be reco8ni5ed in its financial statements by pro-rating the calculations provided by the Church of England pension scheme actuaries for the current year. This has resulted in the recognition of a liability at the balance sheet date of £3,6%12019.. £5,423). If the full liability to make deficit repayments was to be recognised in these accounts. the liability at the balance sheet date would be £168,OIXI12019: £244.0001. A full explanation of the DBF'S pension arrangements and the presentation in the financial statements is included in Note 23. 2020 Annuol Report and Financiol Statements 39 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL sfATEMENTS for the yeorendÉd 31 December2020 Archblshops. Councm Income r•Arkted De*nated Re5trfrted Endowrnent fvnds lunds fund5 funds 20ZO Total lunds LLwer income cornrrwnltles fvThls 167,072 210.LK)O 167x172 Sustslnability grart 37>,￿2 377x172 20 20 20 X519 Lo￿¥ incorne ¢omffwnitit5 furrtls 161,StsJ 161,500 In 2019 4 further three year award was the Church Ccrfnn*ssioners. £167.072 was recei¥*d In the year 12019.. £161,5001. Fdlowiry the IM￿tt of Cw&19 ¢￿the Dlocese, the Chjrch CcrfnMissi￿rs created the one off oppcrtunltyto aptAy f￿ a kntairk4L41ity Grant E210,Cth was awarded120Jg: Énlll. Other donatlons Income Iknr•sty￿Od D•4¥n•ted Re5tr1cted EThdowment fvnds fvnds fvnds fvnd5 Total fvnds Ordimatlon ¢an(Idates donat4cffjs Other d￿atior Vinisty diwi5ion RME Onlinand5' gTrnt Di£ltal Dittese (￿j1th￿rthts grant) Strate8ic ffllnL5try fund 1&394 6&654 18.394 102068 0,480 I￿,000 36,4Crf) 497,342 33N14 230,4 iio.w) 36.4C¥) 33A14 87,IY8 376MI 20 20 20 20 Ordination canddates dJTratlor Other donaJor Ministry divisiLm RME Ordin3nds' 8rant 34,169 34,169 123,155 218,348 375,672 23.155 23,ISS 34,169 218,34B loo,000 2020 Annual Report and Financiolstatements 40 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS for the yet7rended 31 December2020 Charitsble attfvftles iknre#rlrt•1 DÈ*nated Restrlcted Endowment funds funds fvnds funds 2020 Total fvnds 1020 UKN5F IFCDOI grant Thete was no IIKO￿ from Charitsble Adi¥itse5 in 2019. Invemment Incorne (knrestrlcted De*n•ted R•rtrlaod Endowmgnt lunds lurtds fvnds nds 20 2020 Total fvnd5 zo Ir￿orne from listed inve5trnw lThtere5t receivable 173,798 16,211 149,627 323N25 16.211 339,636 14Y.627 20 20 2019 I￿Orne Iiom listed In¥Estr￿nts Interest reCeiVa￿e 177,904 161.476 339.380 194.714 161.476 356,190 Other Income Lknrestritted Des*nated Restrltted Endowment fvnds fvnds funds lunds Totsi fund$ )20 Sundry inc q474 £3A74 20 20 2019 2) Sundry IT￿Ome £10,448 £10.448 2020 Annual Report and Financialstotements 41 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS for the yeor ended 31 December2020 Expondltur• OD (harltable Actl¥ltle5 Unr•Jtrkt•d De*natod ReArkted Endowment funds funds fvnds fvnd5 Total fvnds 2010 Ministry and tt￿$$10n Hcu5ire costs Grants Charitsble actiNities A11c*ated 5UFPCrt costs 697.￿3 &718 IL287 21945 237,224 957.97Z 8.718 189.164 282.535 636,197 2,074,586 32,748 188,668 145,129 93,867 4,$69 244361 I￿,749 63L628 L349A36 zo 20A9 20 20 Vlrfstry and n￿SSIOn ccsts Housir4 costs fjrants lttatsd supwrt costs 650.833 9.456 15.438 245.221 896,054 9,456 306,911 723 588 127.dlsl 163.989 L3ty1,408 127.484 414,117 1.936.009 An4tyls ol expend￿Ure Int￿dIrt¢ allotatlon ol wpport coAs Artl¥ttles ufidert•ken dlrettty Gr•nt lundlng of thafftabl• actfvltles aal¥ltle$ Support Cotts Total fund$ 2020 2020 nistry and ry¥5SltyI C¢Xt$ Hou511¥ Grant5 957,972 8.718 93,867 636,197 4688,036 8.718 377 93167 636,197 2,074,586 20 20ts 20 20 haritable Acti¥lties Ministry and rrrissIc￿ costs Housir Grants 896,OY 9,456 723.588 1.619.642 9.456 306.911 1,936,009 .911 306,911 9JS.510 723,588 2030 Annuol Report ond Financialstatements 42 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS for the yeorended 31 December2020 10 Anoty4s of suppori ¢osts iknresirkted Des1￿1¢¢d Re#rkied lunds lunds fvnd5 Tot41 lunds 20 Central staff costs Central office and Fwr15e5 Oepreciation Legal and wofessicffial fees Trust rnana8ement costs Other support Costs Govemance Auditors fee.. - Current year 5taiutory audr( - PrforVearstatut￿ au¢&i - Non a￿ittee payroll ser¥ice5 Sync¥J and Bishop's C•JrKil 359.279 79,923 12.641 77,091 359,279 79,923 Il641 77,091 4,569 78.820 4569 74820 14.7f 1.2 14,760 2.064 s￿51 636.197 63L628 4.569 20 20 Central stsff costs Central offlce and pre￿Se5 Depreciation Le8al and profe5sirx41 fees Trust mana6erneTrt Costs Publication5 Other 5UPW)rt Costs Govemance Auditors fee: - Current year statutory audff( - Prioryear statutrry autht - Non auditfee payrdl seN¢es syn￿ and Bishop's c￿j￿11 4106.605 76,583 14,376 60.834 4,907 139 708 76.583 14.376 4,9J7 139 70,7C 14.1fy) 14,160 944 49 723.588 2020 Annual Report and Financialstotements 43 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS for the yearended 31 Detember2020 li s¢•ff ¢•sts 531arie5 &Jcial security costs Other pertsIr￿ costs Redundancv Benefits 672,422 50,487 67.613 3,125 28.357 Y9,218 48,319 44.149 641,686 JJ20 2019 A¥era8e number cl $t¥ff emF4o￿d by the DiowÈ 16.1 14.6 Averale nurnbeT d 5tsff wnFdo)*d year (Fdl TIMÈ Equivalentsl.. 14.3 12.2 The number of staff kne en￿Urnents lindudrq benefits in kiThl tyrt excluthng pension rcmtritrrtrt￿rfjl an￿nted to more than £60.000 were as fol1r￿s. 2020 Number Numb•r £60.￿l- ￿0,0[￿• £70,001- E8D,rKo £80,001. £90,( Rernneritioth ot Kffjf Math•Bemkni Personnel Key managemert pe￿Onr￿1 are deemed to be dthe Bishq¥'5 5enK)rstrff. During the reTThJneration for these ernployees totslled £225,97112019: £127,425>. TrusM relmbursed eyponstt and remunarailon All trustees attend • trvnimum rreetifqs a star, in ju￿ and otto￿r. They are reirr4)utsed f[*tra￿ and accorr￿n¢dat1ts￿ costs. the year 6 trustees w¢r¢ ￿irthrSed exFertses totallity E2,87412919.. 23 trustees telmbutsed £14,6641. 11 Ex¢epil¢nal h•n$ XJ19 Dtwt(en crf pr¢perty DC￿at1¢￿tr cl funds 97.033 648.913 745,946 2020 Annual Report and Financial Stotements THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS fvr the yeor ended 31 December2020 12 EK¢eptlonal Items Icontlnuodl In 2018 the DirKese was gifted a one third irtere5tof a pY(4)Erty vknich was Sold In 2019 eenerntire pro¢eed5 for the Dicxese of £97.033. Due to the mèleriality. tIMs h•$ bEen SW •5 ex¢￿tI{x*1. In March 2019 USPG passed its final interests rn the Cha￿li￿1e5 dthe Diocese <)sv t*oce5e in Europe* incluthry¥ church bulldings and varityJ5 trusts for thththey had be￿ kitherto re5porfjilAe. £648,913 wa5 rtcwved and is held as an investment. 13 An•ly515 of transfers betTHeth fvnds Lknr•rtrlcted Funds Genernl nds De*n•ted funds Tra￿fer from unrestricted to thsiÉnated fur*ls: - Or&naticn Candidats5 Furxl 111,2431 1200,0001 I25.0￿) 11,243 200.000 25.000 - HardsNp Fund - Safe￿￿3rdi*vd Past Case rvAew 2 12362431 236.243 14 Tanilble Flxed Asse1$ Froohold L&wehold Equlpment Total Cost Btought foA¥ard l January 2020 AddilloN5 D15posal$ 685.0 S3.3 38,926 3,&44 12,4381 777.328 3,834 12,4381 Caryforward 31 Decerthr 2020 685,0 53.390 Depreclation Brought forward l January 2020 Depreciatlon charze forthe year Written back on tlisrosal 135.2 6,8% 50.636 2,754 30.735 3,037 12N381 216.641 12,641 12,4381 Cany fcfwaTd 31 Dtt¢rnber 2020 ia) 53390 126 Net book v•lue At 31 DeceM￿r 2020 At l JaNary 2020 2020 Annuol Report ond Financiol Statements 45 THE DIOCESE IN EUROPÉ 80ARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December2020 15 Investments So¢l¥l Ust•d bNe5tmwrts Investments Urrestiirted Restrirted ur￿striCted Total Brought forwdrd l January 2020 Reclassified frrth) ¢tI￿ent asset debtors 4.721638 5.867.445 10,599.083 200.0 Isoo.0001 563.830 2(Kl,Ofy) Dlskx>sals Net galn on Investrnents Is￿.[￿)0) 268.820 295.010 Cany forward 31 December 2020 4.49L458 6.161455 2￿,(￿ 10,853.91> The majoiity of the listed rn¥e5trnents held in ¢dledi¥e in*stn*nt fvnds ftkna8ed ty CCL The hi5tori£ rostof these lnby5trn￿ts at 315t Deteth 2020 was £6,767.76712019: £6.530,1791. The sum of £200,C#>J ￿￿(￿51¥ 5perrt in A¢xerte in 2009 ￿$ rKA¥ been fedasslfied ffcffi Currert Assets to Social I￿estMents. The purpose w•$ to help redevelop apartn*nts that are vAthin the thurch ￿J11thng in St Mark's Acfence, whlch 15 oW￿d by1￿ DBF. The £2C¥J.ts￿ has keen reclassified as an investmentwhich will twtherthè tharitat4e activities In Florerte arKI a share (* the rever￿ from the apartrnerts will be paid to the DBF. 16 Curf•nt •sMt In¥•stmeni 2020 2019 Broutht forw4rd Isi JaThu•ry Disposal 179.445 179 445 C•rryforw•rd 31st Dexwnber 17 Debtors 2020 2019 Amounts duefrom Chaplalthdts I25,￿0 325.000 Prepayments and accrued income Other debtors 209B75 110.701 282.224 319.333 fj17P99 755A134 2020Annut71 Report and Finonciolstatements 46 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS for the yeor ended 31 December2020 Creditors.. falln8 due wtthln I 2020 1019 Afflounts owed to ¢h4pl¥in¢les Other creditors 1.192.632 1,143.861 76,451 105.217 Accruals and deferred inccffie 282.411 152.961 IW260 1373,273 19 cNd￿0r9.' f•VJni the after more than i yè 2020 2019 Penslon deTtcit repayTnWbt creditor (see note 261 3￿96 SN23 2020 Annual Report ond Finonciolstotements 47 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS for the yearended 31 December 2020 20 lal Summ•ry otfund movem•￿- currwt year In¥estrneTht 6r•Dis• iakns and As £￿￿d￿￿T? Tr•n51er5 •t 31.12.20 •t 1.1.20 UnYexrl¢t¢d Fund& 6eneffjIfv￿. Diocesan Fund 4,255.170 1.516.740 11.349.4361 268.820 1236.2431 4.455,051 Orthnation Cat)didates F￿1 MTrssion Opwtl￿I1lts FurKI Hordship Fund 5afe¢uardiry Past Case knew 2 44,187 204.695 18.394 122.5501 110.1981 68.654 1188.6681 122.9451 11,243 51,274 194.497 79.986 2.055 2W,O 25.(MlO Tot•1 Unrestrlcted Funds 4504m2 L603.n8 ILS93.797) 268AX> 4,78U63 Restrl¢ted funds Ackland TroyEe Trust IPaul All Saints IDre5dtnl Trust (Grnnvl Armstrong Trust IlstanTrxJll Bagneres de bigorre Fu￿1 lfvaKel Bertie Watson IAIE¥Nel Cle￿￿nt)0ryes ISuffrJ8an Bishopl Cc4 Doughty Wylie Fund IFCOI Crimean Memorial Church llstanbjll Daphne Will0￿hbV- Waters IPalm•l Di￿es￿n Developrnent Fund Emr0 Tebbs Trust (Rornel Fran* Pratt Bailow (Morte Carfol HoLrlton (Maltal Lindley Fund (Germany) MMS IGibraltsr & Mar5eillesl Overseas Bishoprics Fund PIMlip Colernan Trust IPalmal Riga Mission Trust SwcerTntst (Needy £lertyl St Andrew/s (fan8ierl St Georges (Berfinl Stephenson Bequest IMJla4al Ministry (livi$1￿ RME Orthnand5' Erant UKNSF IFCDOI Iiram Strate8it rrlnistry fund DiBltal Diocese lAilr￿¥the$ 8Farrtl 1.250 4.491 5.843 1?47 13.936 112501 14.4911 16.2921 11,3471 124,0731 11.7031 17821 12.4081 11081 113.9811 13.5131 134.9821 11.1611 IL6081 112.4911 13.5621 IL6251 117.1681 I￿0) IILIS01 12.8191 13.0341 12(Kl.8241 193.86n 136.40DI 65,236 96567 I.￿2 15.747 36.430 2.935 15,050 62( 2.159 65250 15.626 3513 34.982 1.161 .257 66.895 IllJ321 17.837 9.814 5.847 1.625 18.717 2,993 13533 2.B19 3.034 230.480 93A67 36.400 iio.TrJo 113.9091 20,122 I2.￿7 14,416 11.427 4,6¢2 2,259 29,656 iio.o)o 28L5n 620.374 I4￿74•￿ 421,157 gal•n¢e 4785.624 2224162 11074586) 2￿820 5204020 2020 Annuol Report and Finoncial Statements 48 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL StATEMENTS for the yeor ended 31 December 2020 10141 Summaryol fund nw•nthts. currtht Y￿r l) IL726.517 Dlot•s*h Fuhd The 8eneTrl 15 the DBPS unrostricted undesvin•tsd fur>J availablè forany of the DBF'S pwpxes restrKtio¢L Ordltt•tk)n C*hdld*tes Fund Th"s deSigTratedf￿d is 34pilaWe tt> slwrtordtnatirffi unilithle$. Mlsflon Opportunltl•sFund Missh?n opp￿trIrA￿tS Fund hs beem éstallished to woJtCts have i specific L*cti* L4ero*in8 ID the Diocese. Dlo¢thTr D•vdoprn•nt Fund ASpea¥l T￿￿tforthe pwwses cdchartfjes Act 201L Mlnl#ry 01¥151on RME Ordlnand'$6rnht Blcses ￿th￿t Testriction Ordination C•ndtdates FuThl Thi5 de5iKn•trd 15 •vail•ble ￿ support ￿ndIdateS Mi55itsh OpportunltlK Fund The MissiC￿ Opponunities Fund has ￿en estsblished to fund proiects which the s￿1￿C objective of 8rcwin8 congre8atl0r￿ in the Lloce5e Dloresan Devdopment Fund The ticosan t*velowrtnt FUNI is ¥ Sp¢lal Trustftythe puwe5 d Charfties A¢1 2011 Mln15try Dh71￿on Amf Ordonind's Gmnt Bkx* grnrrt recd*d fm the ￿nIStry Archblshops. c￿ncIl iofkmd Ihe trailm￿ of Orthnand5 2020Annuol Report ond Financiol Statements 51 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS lor the year ended 31 December 2020 21 Commltm•nts under operatlns leases At 31 Decenther 2020, there were no conwnitrrents under I￿ cancèllable operntlng leases. A heads Of ter￿ have Eeen agreed and the lease through to the end of 2022 is to ￿ signed. Land and Buili*ngs 2020 2019 50.303 22 Net •ssrt$ by fund Tan8ible Cuirent Currènt Ilabllltles Amounts fallln8 due Tot•1 Funds after l y￿r kn¥estments 2020 Unrestrltted General Designated End(MYment Restrlrted 551, 4.691.458 795.669 327,812 360.042 421,157 11.580.260) 13.6961 4.455.051 327,812 6.522,497 421.157 6,162.455 Total Fuhds 551 913 IJ>4MI 11,726,517 2019 Unrestrlrted General Designated Endowment Restrlcted s￿,687 4.722.Ml 350,539 Z48.882 360,044 281.572 11.373.273) 15,4231 4,255,171 248,882 6,227,486 281,572 5,867,442 Totsl Funds 560,687 l241￿37 L373273 5.423 I1￿13.111 2020Annual Report and Finonciolstotements 52 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December2020 23 Funds held as tustodian trustee 2020 2019 Investments lat Market Value 31st December) Cash on dèposit Total assets hèld on behalf of chaplalncles 1,676.141 521,141 1,640,804 567,541 1197282 2.208,345 24 c¥ial commltments As at 31" December 2020 there were no capital commitments. 25 Post bal•nce sheet events and contln8ent Ilabllllles In January 2021, a Eoan of £500.LI)O was obtained from CCLA. the DBF'S investment managers. The terms are favourable with an interest rate of the average daily rate declared by their fund over the month plus 0.55%. The maximum, term of the loan is ten years with no requirement of repayment of capital in the interim. DBF anticipates repaying the loan in even instslments over the 10 year per￿1. 26 Penslons The D8F participates in two pension schemes administered by the Church of England Pensions Board, which holds the assets of the schemes separately from those of the DBF and the other partitipating employers. These are: Chur¢h of England Funded Pensions Scheme {"CEFPS") for stipendiary cler8y and Church Workers Pension Fund {"CWPF"I for diocesan ernployees. The Pension Builder Scheme of the CWPF has two sections known as the Pension Builder Classic, and the PenS￿n Builder 2014. b)th of which are classified as defined benefrt schemes. 2020Annual Report and Financia15tatements 53 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December2020 26 Penslons {COfilinued) {al Church of En8land Funded Penslons Scheme ("CEFPS") The Diocese in Europe participate5 in the Church of England Funded Pensions Scheme for stipendiary clergy, a defined benefit pension scheme. This scheme is adrninistered by the Church of England Pensions 8oard, which holds the a￿et$ of the schemes separately from those of the Responsible Bodies. Each participating Responsible BO￿ in the scherne pays contributions at a common contribution rate applied to pensionable stipend5. The scheme is considered to be a multi-empbyer 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. therefoie contributions are accounted for as if the Scheme were a defined contribution scheme. The pensions costs charged to the SOFA in the year are contributions payable towards benefrts and expenses accrued in that year. In 2020 these amounted to £20,64512019: É4.9031, plus the figures highlighted in the table betow as being recognised in the SOF& giving a totsl charge in the year of £19,040 {2019-. credit £19,141). A valuation of the Scheme ￿ carried out orKe every three years. The most recent Scheme valuation completed was carried out at as 31 December 2018. The 2018 valuation revealed a deficit of £50m, based on assets of £1.818m and a funding target of £1.868m. assessed using the following assumptions: An average discount rate of 3.2% p.a.. RPI inflation of 3.4% p.a. land pension increases consistent with this): Increase in pensionable stipends of 3.4% p.a., Mortality in accordance with 95% of the $3NA_VL tables, with allowance for improvements in mortality rates in line with the CMI2018 extended model with a long temi annual rate of improvement of 1.5%, a "smoothing parameterf of 7 and an initial addition to mortality improvements of 0.5% pa. Following the 31 December 2018 valuation. a recovery plan was put in pkce until 31 December 2022 and the deficit recovery contributions las a percentage of pen5i0nable stipends) are as set out in the table below. % of pensionable stipend5 January 2018 to December 2020 11.9% January 2021 to December 2022 7.1% Deficit repair contributions 2020 Annual Report and Financial Statements 54 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS for the ye¢7rended 31 December2020 26 Penslons (contlnued) la) Church of En8land Funded Penslons Scheme I"CEFP5") (c￿tInued} As at 31 December 2018 the deficit recovery contributions under the recovery plan in force at that time were 11.9Yo of pensionable stipends until December 2025. As at 31 December 2019 and 31 December 2020 the deficit recoverycontributions under the recovery plan in force were as set out in the above table. For senior office holders, pensionable stipends are adjusted in the cakulations by a multiple, as set out in the S¢herne's rules. Normally entities are required to bring on to the ba￿nce sheet the assets and liabilities land therefore the surplu5 Qr deficit) relating to defined benefit schemes. However, an exception to this is where the scheme is considered to be a multi-employer scheme as described in section 28 of FRS 102. In this case. where the assets and liabilities within a scheme are pooled, they cannot be separately ascribed to individual participating employers. Where this is the case Section 28.IIA of FRS 102 requires the DBF to account for deficit recovery payments as a liability. The scheme actuaries have calculated that the total liability for deficit payments relating to the DBF'S 44 12019= 391 members of the scheme amounts to £168,OLI)12019'. £244,fJJ)l including a change in agreed deficit recovery plan, and change in discount rate and assump￿n5 between year-ends. The DBF is different to many other English diocesan Boards of Finance in that the clergy for overseas thurches are legal employees of those local churche5 in order to Comp￿ with the different legal and tax frameworks in place acro55 the wide geographical area in which the DBF operates. Consistent wtth thls practice the relevant stipendiary and pension expenses for overseas clergy are recognised in the financial statements of the local thurches and not in the financral statements of the D8F. The Trustees consider that, while the DBF is the legal member of the scheme responsible for making contributions to the Church of England Pension scheme, the substance of the arrangernents in place is that the DBF only acts as a conduit for pen5ton cOntribut￿lnS for overseas clergy and therefore the liability lies with those overseas churches. On this bas￿ the Trustees conslder that it is appropriate to only recognise the deficit for those rnembers of the clergy that the DBF is directly responsible for. At the Balance Sheet flate and prior year this was one individual. The DBF has estimated the liability to be recognised in its financial statements by pro-rating the calculations provided by the Church of En￿and Pension Scheme actuaries for the current and prior year. 2020 Annual Report and Financiolstotements 55 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS Aor the yearended 31 December2020 26 Penslons (mntlnuedl la) Chufch of England Fur￿ed Pensions Sd*me (-CEFPS") IcThrtlnued) The movement in the provision 15 set out in the tsble below. 2020 2019 Balance Sheet liability at l January 5.423 19,467 Deficit contribution paid Interest costs Irecognised in SOFAJ Remaining change to the balance sheet lia1￿lity 12.5001 45 12,7331 378 111.6891 727 Balan￿ Sheet Ilability at 31 December 3.695 5,423 * Comprises change in agreed deficit recovery plan in discount rate and assumption5 between year ends. Thi5 liability represents the present value of the deficit contributions agreed as èt the accounting date and has been valued usin8 the following assumptions set by reference to the duration of the deficit retovèry payments: December 2020 December 2019 December 2018 Discount rate Price inflation Increase to totsl pensionable payroll 0.2% pa 3.l%pa 1.6% pa l.l% pa 2.8% pa 1.3% pa 2.l%pa 3.1% pa 1.6%pa The legal structure of the scheme is such that if another Responsible Body fails, the Diocese in Europe could become responsible for pawng a share of that Responsible Botys pension liabilitie5. 2020 Annuol Report and Financial Statements 56 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS for the yeor ended 31 December2020 26 Penslons Ic(Xbtlnuedl Ib) Church Workers Pen51on Fund ("cwpr) The DBF participates in the Pension Builder Scheme section of CWPF for lay staff. The Scheme is administered by the Church of England Pensions Board. which holds the assets of the schemes separate from those of the Employer and the other participating ernployèrs. The Church Workers Pension Fund has a section known as the Defined Benefits Scheme, a deferred annuity section known as Pension Builder Classic and a cash balance section known as Pension Builder 2014. Penslon Bullder Scheme The Pension Builder Scheme of the Church Workers Pension Fund is made up of two sections. Pension Builder Classic and Pension Builder 2014. both of which are classed as defined benefit schemes. Pension Builder Classic provides a pension for members for payment from retirement, accumulated from contributions paid and converted into a deferred annuity during employment based on terms set and reviewed by the Church of England Pensions Board frorn time to ts"me. Bonuses rnay at50 be declared, dependin8 on investment returns and other factors. Pension Builder 2014 is a cash balance scheme that provides a lump sum that members use to provide benefits at retirement. Pension contribution5 are recorded in an atcount for each member. This account may have bonuses added by the Board before retirement. The bonuses depend on investment experience and other factors. There is no requirement for the Board to grant any bonuses. The account, plus any bonuses declared, 15 payable from members, Normal Pension Age. There F5 no sub-divis￿n of assets between employer5 in each section of the Pension Builder Scheme. The Scheme is a multi-employer scherne as described in Section 28 of FRS 102. This is because it is not Possible to attribute the Pension 8uilder Scheme's assets and liabilities to specific employers and that contributions are accounted for as if the Scheme were a defined contribution scheme. The pension cost5 harged to the SOFA in the year are contributions payable of £67,61312019: £44,149>. A valuation of the Pension Builder Scheme 15 Carried out once every three years. The most iecent wa5 arried out as at 31 December 2016. A valuation as at 31 December 2019wa5 underwayas at 31 December 2020. For the Pension Builder Classic section, the valuation revealed a defictt of £14.2m on the ongoing assumptions used. At the most recentannual rewew, the Board chose not to grant a discretionary bonus, which will have acted to improve the funding position. There is no requirement for deficit payments at the current lime. For the Pension Builder 2014 section. the valuation revealed ? surplus of £1.8m on the ongoing assumption5 used. There is no requirement for deficit payments at the current time. The legal structure of the scheme is such that if another employer fai15, the DBF could become responsible for paying a share of that employerfs pension liakxlities. 2020 Annual Report ond Financial Statements 57 THE DIOCESE IN EUROPE BOARD OF FINANCE NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December2020 27 Related party transactlon$ The Chair of the DBF received É6,3LKI for professional consultancy provided during the year. This sum was unpaid at the end of the financial year and included in accruals. There were no other related partv transactions. See Note 11 for details of key management personnel remuneration and Trustees reimbursed expenses. 28 Prlor year cornparatlve SOFA Total lundj 2019 Lh)restrfcted funds Restrlrted EndowrnÈnt funds funds Income and endawments Donatlons and legacies - Corrmon Fund - A￿hbishQp5, Council grant - Other donation5 883.885 161,51X) 57,324 883,885 161,500 375.672 218.348 100,000 Inve5trnent5 194.714 10,448 161,476 356,190 10,448 Other Total inconp before excèptlonal Ite 379124 ioox( 1,787,695 Exceptlonal items 12 - Donation of propeity . Donation of funds 97.033 97.033 745.946 Total Income 2,053J17 379.824 I(KI￿CK* 2￿33,641 Expenditure Char￿ta￿e activities 819 11.521,8921 1414.1171 11,936,009) Net Surplus I Ideftitl before galn on Investments 531.925 {34293) I(X)JKM) 597.632 Net garn on fixed asset investmè¢)ts 623 874 776 108 1399 982 Net Incorne I lexpenditurtl in year I,￿5,799 134.2931 876. 1.997,614 Transfers bets￿n fu￿1$ 126,8731 26.873 Net moverr*nt in fu￿￿5 L128.926 17A20) 876,108 1,997,614 2020 Annuol Report and Finoncialstatements 58