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MISSION STATEMENT International Headquarters exists to support the General as he/she leads The Salvation Army to accomplish its God-given worldwide mission to PREACH THE GOSPEL of Jesus Christ and MEET HUMAN NEEDS in his name WITHOUT DISCRIMINATION

THE SALVATION ARMY

INTERNATIONAL HEADQUARTERS 101 QUEEN VICTORIA STREET LONDON EC4V 4EH WEBSITE: WWW.SALVATIONARMY.ORG TELEPHONE: +44 (0)20 7332 0101

CONTENTS

THE SALVATION ARMY INTERNATIONAL TRUST

TRUSTEE’S REPORT The Trustee is pleased to present the annual report for The Salvation Army International Trust for the year ended 31 March 2018.

Structure, Governance and Management

Objectives and Activities

Achievements and Performance

STRUCTURE, GOVERNANCE AND MANAGEMENT

Financial Review

Statement of Trustee’s Responsibilities

The Independent Auditor’s Report

Statement of Financial Activities

THE SALVATION ARMY INTERNATIONAL TRUST Registered Charity No 1000566 Trust Settlement Deed dated 21 September 1990

THE SALVATION ARMY INTERNATIONAL TRUSTEE COMPANY – ORDINARY TRUSTEE Company Registration No 2538134

Balance Sheet

Cash Flow Statement

The General of The Salvation Army, as founder of the Trust, specifies the qualifying offices and the experts for SAITCo. Both the qualifying offices’ holders and the experts make application for membership of SAITCo with consent to become directors and are accepted by the Board of Directors of the Trustee Company.

Notes to the Accounts

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The General, acting under powers contained in The Salvation Army Act 1980, established The Salvation Army International Trust to further the worldwide work of The Salvation Army. The Salvation Army International Trustee Company (SAITCo), a company limited by guarantee, was formed and appointed as the ordinary Trustee of the Trust. The directors of the Trustee Company are thus effectively the charity’s trustees.

All new directors follow teaching modules prepared specifically for The Salvation Army on its constitution and the duties and responsibilities of directors. In addition individual directors follow external courses.

DIRECTORS Commissioner Birgitte Brekke-Clifton SRN

from 1 March 2013

Commissioner Lyndon Buckingham from 3 August 2018 Commissioner Robert Donaldson BSc, LTh, P Dip, MInstD (NZ)

from 10 March 2017

Commissioner Gillian Downer

from 1 June 2013

Commissioner Merle Heatwole BSc

from 2 November 2015

Commissioner Johnny Kleman from 1 January 2018 Commissioner Lalzamlova BA

from 1 April 2013 to 30 June 2017

Commissioner Benjamin Mnyampi from 1 August 2016 Commissioner Brian Peddle

from 1 September 2014 to 2 August 2018

Commissioner Charles Swansbury BA, MBA

from 1 June 2014 to 31 December 2017

Commissioner Mark Tillsley BA, MSc, PhD

from 11 May 2018

Commissioner Alistair Venter from 29 September 2017 Commissioner John Wainwright

from 1 May 2013 to 30 March 2018

Dr Matthew Carpenter BA, MBA, DBA, MCMI

from 1 July 2014

Ms Elizabeth Edwards BSc (Hons), FRICS

from 1 May 2013

Mr Peter King Solicitor, MA

from 1 May 2013

Mr Robert Lister from 1 January 2016 Mr David A. Mayes from 1 May 2013

PRINCIPAL OFFICERS Commissioner John Wainwright Managing Director to 30 March 2018 Commissioner Merle Heatwole BSc

Managing Director from 1 April 2018

Dr Matthew Carpenter BA, MBA, DBA, MCMI

Company Secretary

Miss Karen Dare Chief Accountant

BANKERS HSBC Bank plc

Reliance Bank Limited

National Westminster Bank

60 Queen Victoria Street

Faith House, 23-24 Lovat Lane

38 Strand

London EC4N 4TR

London EC3R 8EB

London W2CN 5JB

SOLICITORS

AUDITORS

INVESTMENT MANAGER

Slaughter and May

BDO LLP

Sarasin & Partners LLP

1 Bunhill Row

2 City Place, Beehive Ring Road

Juxon House

London EC1Y 8YY

Gatwick, West Sussex RH6 0PA

100 St Paulâ€™s Churchyard

London EC4M 8BU ANNUAL REPORT

THE SALVATION ARMY INTERNATIONAL TRUST exists to further the work of The Salvation Army, which is to advance the Christian religion and meet human need as and where it occurs throughout the world, and support the work of International Headquarters (IHQ). IHQ is responsible for coordinating the international work and overseeing strategy. The Salvation Army is, for administrative purposes, divided into autonomous territories (generally by region or country). Each territory is governed, through local registration(s), in accordance with the applicable local laws and The Salvation Army International Trust works with and through these separate legal entities. However, The Salvation Army remains under the oversight, direction and control of the General of The Salvation Army, as set out in greater detail in The Salvation Army Act 1980.

RELATED PARTY ENTITIES The Salvation Army Retired Officers Allowance Scheme Registered Charity 1153681 Declaration of Trust dated 13 December 2012 The Salvation Army Retired Officers Allowance Scheme is a separately registered charity that is administered by SAITCo as the trustee. The objects of The Salvation Army Retired Officers Allowance Scheme are to relieve the poverty of retired officers and the financial hardship amongst elderly retired officers of The Salvation Army anywhere in the world. The Salvation Army in the United Kingdom and the Republic of Ireland The work of The Salvation Army in the United Kingdom and the Republic of Ireland is directed by the United Kingdom Territory with the Republic of Ireland, with resources provided through Trusts administered by The Salvation Army Trustee Company. The two principal Trusts of this territory are The Salvation Army Trust and The Salvation Army Social Work Trust. Reliance Bank Limited The banking company, Reliance Bank Limited, in which The Salvation Army International Trust holds a 51% interest, is shown as a Joint Venture with The Salvation Army Trust (UK Territory), holding a 49% interest: The Salvation Army International Trust 51% The Salvation Army Trust 49% 4

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Reliance Bank Limited provides banking facilities to The Salvation Army and the general public. The Bank offers transactional banking services to more than 35 Salvation Army territories, providing a vital ‘safe haven’ for project funds and IHQ operational grants and a secure platform for international fund transfers for the global Army. The Bank offers these territories a comprehensive product range including Current Accounts and Fixed Interest Products in GBP, USD and EUR as a UK domiciled Bank regulated by the Prudential Regulation Authority (Bank of England). During the present reported financial year, 75% of the net taxable profits of the Bank have been donated to support equally the mission of the Army internationally (The Salvation Army International Trust) and in the United Kingdom (The Salvation Army Trusts). The Salvation Army International Trust does not control the company, a Nominations Committee comprising Non-Executive Directors of the Bank recommends the appointment of Bank Directors to the board. The investment in the Joint Venture by The Salvation Army International Trust is shown at cost, with donations received included under Income in the Statement of Financial Activities. Reliance Bank, in common with all banks, faces a number of risks such as credit risk, interest rate risk, risk arising from holding foreign currencies, market risk and operational risk. Policies are in place to ensure that Reliance Bank’s exposure to these risks is monitored and controlled.

GOVERNANCE The Salvation Army International Trust utilises a committee structure to supervise its operations. The Trustee Company Board of Directors, including four Non-Executive Directors, delegates day-to-day financial management decisions to the International Finance Council and the International Business Board within clearly defined parameters. The terms of reference for subsidiary boards and the minutes of all meetings of these boards are reviewed by the Directors

on a regular basis. During 2016/17, a specific review of the efficiency and effectiveness of subsidiary board structures was undertaken with amendments made in effect during 2017/18 seeking to expose middle management to a greater role in decision making, further distribute authority and increase external scrutiny. Planning is well advanced for a further governance review during 2018/19 involving an external consultant and including a review of SAITCo board performance and effectiveness as well as benchmarking to good governance practice as outlined within the third edition of the Charity Governance Code released in July 2017. The Trust already embraces many governance activities outlined within the Code such as conducting board induction and training, managing potential or actual conflicts of interest and regularly reviewing terms of reference for subsidiary boards with opportunity for further development in areas such as formal monitoring of Board skills and performance. A well-established Internal Audit Department also carries out a cycle of reviews of the systems in operation within IHQ and in all countries where The Salvation Army is working and a sound framework of internal controls and strong financial management systems are in place, supported by a manual of International Financial and Accounting Standards for The Salvation Army issued from IHQ. A project is also underway to roll out cloud-based accounting software to all financially supported territories which will enable more regular and more detailed reporting of key financial indicators from territories to IHQ. An Audit Committee meets on a quarterly basis, is chaired by a Non-Executive Director of SAITCo, and comprises a minimum of three members none of whom hold executive responsibility for management of the Trust. The Committee holds delegated responsibility on behalf of SAITCo for continual review of the financial management and internal controls of the Trust and holds a direct line of communication to the external auditor.

REMUNERATION The Trustee is committed to ensuring a proper balance between paying staff to attract and retain the best people for the job and careful management of charitable funds. Management remuneration policies and practices within the Trust are reviewed periodically by SAITCo with day-to-day decisions delegated to the Employee Review Board and Job Grading Panel within clearly defined parameters. Posts are graded between evenly distributed salary points with the highest point in a salary band approximately 10% higher that the lowest point, though this can vary depending on the nature of the post. The median of the band is the ‘market average’ salary for this type of post as identified through benchmarking to comparable roles in other

organisations. New staff members are usually appointed at the lower to median end of the band, depending on experience. Post holders can progress up to the next salary point within their band, subject to satisfactory completion of a performance appraisal. Cost of living increases are also awarded periodically to all staff by SAITCo with an assessment made within the annual budget setting process to determine any proposed inflationary adjustment with reference to the Consumer Price Index and the financial position of the Trust. Further remuneration disclosures for the Trust for this reporting period are shown within Note 13 to the Accounts.

MODERN SLAVERY ACT The Salvation Army is very active in bringing practical assistance to those whose lives have been affected by the evil of modern slavery and as such is sensitive to the danger of inadvertently finding itself falling short of its own beliefs and standards in this regard as well as the standards set out in the UK Government’s Modern Slavery Act 2015. The Modern Slavery Act 2015 compliance statement for SAITCo can be accessed at http://www.salvationarmy.org/ihq/ modernslaveryact2015 and provides details of the variety of measures undertaken by the Trustee to avoid and reduce the risk of inadvertently supporting modern slavery in any way.

FUNDRAISING Section 162a of the Charities Act 2011 requires charities to make a statement regarding fundraising activities. Although the Trust does not actively undertake widespread fundraising from the general public, the legislation defines fund raising as ‘soliciting or otherwise procuring money or other property for charitable purposes’. Such amounts receivable are presented in the Accounts as ‘Other Donations and Legacies’. In relation to the above the Trustee confirms that no fundraising activity has been taken by the Trust, or by anyone acting on its behalf, that no fundraising standards or scheme for fundraising regulation have been subscribed to by the Trust, or by anyone acting on its behalf, that no complaints in relation to fundraising activities have been received and that any solicitations are managed internally, without involvement of commercial participators or professional fundraisers. ANNUAL REPORT

OBJECTIVES AND ACTIVITIES Public Benefit The charity is operating for the public benefit and in keeping with the organisation’s mission statement. In setting and reviewing the Trust’s aims and objectives and planning future activities, the Trustee pays due regard to the guidance issued by the Charity Commission on public benefit. The main activities of the charity are: ●●

To continue the advancement of the Christian religion through evangelistic outreach

●●

To continue to provide financial assistance to The Salvation Army where needed

●●

To provide effective leadership and share knowledge and expertise through the strategic deployment of personnel

●●

To respond to and help meet the needs arising from major crises

●●

To strengthen The Salvation Army’s capacity to support poor and marginalised people who need access to quality primary health care services as close to the family as possible

●●

To take action to combat the massive and growing evil of sexual trafficking and to create awareness of social injustice in the world.

A breakdown of expenditure per these main charitable activities of the Trust is presented at Note 9 in the Accounts. This shows a significant outlay on funding assistance to Salvation Army territories (under the second objective listed above) recognising that such grants also aid fulfilment of the other stated objectives as Salvation Army territories provide a wide range of local church/social programmes having received the IHQ funding necessary to maintain day to day operations. Specific aims for each of the main activities of the Trust during the reporting period are outlined in the sections below. The activities of the charity are rendered without discrimination and for the benefit of all people in need.

STRENGTHEN THE SALVATION ARMY’S CAPACITY TO SUPPORT POOR AND MARGINALISED PEOPLE WHO NEED ACCESS TO QUALITY PRIMARY CARE SERVICES 6

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ACHIEVEMENTS AND PERFORMANCE 1

World Mission

Assistance to Salvation Army Territories

International Personnel Training and Development p16

Crisis Relief

Health Services for the poorest people

Fighting against sexual trafficking and for social justice p28

p12

p20

p24

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WORLD MISSION

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OVERALL OBJECTIVE To continue the advancement of the Christian religion through evangelistic outreach.

Specific Aims World Mission objectives are to encourage and enable people linked to The Salvation Army to reach out into their communities with spiritual and practical support, to offer online resources to Salvationists and friends around the world and so create a supportive network through which people can share in prayer and encouragement and for the General and other international leaders to visit Salvationists and friends around the world providing opportunities for increased publicity and offering encouragement and challenge.

Achievements THE WHOLE WORLD MOBILISING is a well-resourced global initiative that encourages and enables people linked with The Salvation Army to move out of their halls and into their

communities. The programme began in January 2017 with a live-streamed launch event and received enough positive feedback that the initial one-year schedule was extended, taking it up to at least the end of 2018. At the heart of The Whole World Mobilising are the website and app provided by IHQ that promote interactive responses. Regular blog updates give examples of a variety of ministries, including how people around the world are taking up General André Cox’s challenge for The Salvation Army around the world to be a force for ‘good, change and positive transformation’. The main event of the 2017 Mobilising initiative was a celebration day in central London in October. Based at Regent Hall Corps (church), the event recognised the many ways in which people around the world have responded to the General’s call to find creative ways to meet needs in and take the gospel message to their communities. Led by General André Cox, the day included participation by ensembles from the UK and many IHQ officers and employees. Two worship meetings sandwiched a spectacular march of witness through central London – along Regent Street and through Piccadilly Circus – to Trafalgar Square, where hundreds of members of the public stopped to watch and listen as the gospel message was presented in word and music. After returning to Regent Hall, the General spoke about the innovative and imaginative ways in which people are reaching out to their neighbourhoods. He reminded Salvationists and friends: ‘God calls us to be a force for transformation in every community … The call is to go! To go out into the world, not remaining hidden in our halls.’

Open-air witness in Trafalgar Square, London, UK at the Whole World Mobilising celebration day ANNUAL REPORT

Live streaming: studio interview during the Whole World Mobilising celebration day

Throughout the Whole World Mobilising celebration day, it was made clear that the meetings were not only for those who were physically present, but – through online participation – for the whole world. The two meetings, the march and the open-air meeting were all streamed live via the Mobilising website and Facebook. The outside events were supported from a studio created for the occasion at Regent Hall, which also presented interviews with people who had played a part in the Mobilising initiative.

and watched the stream together. Major Heather Grinsted wrote: ‘We are joining with you from Kuwait. We have sung along, listened to the Word and prayed together. One Army. Blessings.’

Comments from people watching the stream included: ‘I’m watching from Saudi Arabia. God bless all The Salvation Army.’ ‘Morning from Hong Kong. We marched out yesterday afternoon at Causeway; one of the busiest parts of Hong Kong. Excited to watch the marching in London.’ ‘Watching in New Zealand, thank you for the opportunity to share.’ ‘Prayer meeting this morning at 7am at Conception Bay South Corps in Newfoundland, Canada. Prayed for the whole world.’ ‘Wonderful words from our General. It’s great that I could watch live from Hyderabad, India.’ One person in Scotland celebrated being part of a meeting for the first time in 11 months, having been unable to attend a corps due to illness.

In The Salvation Army’s Zambia Territory, Salvationists and friends are engaging with their neighbours and putting their faith into action. In a blog post the territory reports: ‘We marched through neighbourhoods with the band and songsters [choir], visited markets and trading places and shared the gospel on a one-to-one basis ... There was also

Salvationists watched the stream together with their families and collectively at corps and headquarters. At Kuwait Corps (Middle East Region), the congregation gathered 10

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Throughout the year The Whole World Mobilising office has received stories from around the world of Salvationists and friends reaching out to their communities with practical and spiritual assistance.

Flying the flag: march of witness at the Whole World Mobilising celebration day

General said with a smile as the Chief and Commissioner Rosalie – both native Newfoundlanders – were warmly welcomed home.

a request that we preach on Sunday morning in the market permanently. The traders felt that since they have to conduct business on Sunday mornings, the Church can come to them so they can still gather with other believers and hear the Word of God.’ In The Salvation Army’s South America East Territory a number of initiatives in Argentina and Paraguay were highlighted to The Whole World Mobilising office. Every Saturday afternoon, teachers and leaders from Santa Fe Corps in Argentina shared the Word of God with children and parents in Escuelita Biblica Barrio el Pozo (at the Plaza Espinillo). A group from the Santiago del Estero Corps offered food, support and encouragement to patients and visitors at a hospital. In Asunción, Paraguay, the corps organised a fun afternoon of games and activities for children, providing a safe, friendly place to play while also giving the young people the opportunity to learn more about the love of God. Looking beyond the Whole World Mobilising initiative, one of the responsibilities for both the General and the Chief of the Staff is to travel the world, meeting Salvationists and friends, providing encouragement and challenge. They usually do this separately (except for major international gatherings such as an international congress) but Mobilize, the Newfoundland and Labrador 2017 Divisional Congress and Commissioning had the unusual honour of hosting General André Cox and Commissioner Silvia Cox (World President of Women’s Ministries) as well as the Chief of the Staff (Commissioner Brian Peddle) and Commissioner Rosalie Peddle (World Secretary for Women’s Ministries). ‘We are just accompanying the Peddles this weekend,’ the

During the visit, the Chief of the Staff laid a wreath on behalf of The Salvation Army during a Memorial Day service of remembrance for the many Newfoundlanders who lost their lives in the First World War battle at Beaumont Hamel – in the Somme – on 1 July 1916. The international leaders also attended a reception at Government House, hosted by the Honourable Frank F. Fagan, Lieutenant Governor of Newfoundland and Labrador. After enrolling 49 senior and junior soldiers at the Sunday morning holiness meeting, the General told the congregation: ‘God is still calling the courageous! Our lives are to count for something … God wants to use us to have an impact for good in this world.’

Key Statistics ●●

Online streaming of the Whole World Mobilising celebration day in central London attracted more than 64,000 ‘viewers’ with Facebook comments shared from more than 40 countries. Each viewer could be more than one person, as people gathered to watch together at a number of Salvation Army centres.

●●

Between them, the General and the Chief of the Staff visited The Salvation Army in 26 countries from 1 April 2017 to 31 March 2018 – bringing encouragement and challenge to many thousands of Salvationists and friends.

Future Plans The General and the Chief of the Staff will continue to travel around The Salvation Army world, engaging with Salvationists, friends, supporters and people of influence. On 3 August 2018, General André Cox retired and was succeeded by Commissioner Brian Peddle who was elected General at a High Council of senior Salvation Army leaders held in London, UK in May 2018. The Salvation Army will seek new and innovative ways to share the gospel message through online means (including social media) and also by providing resources to enable local outreach. The Whole World Mobilising initiative will remain active until at least the end of 2018.

Sharing the gospel: Sunday morning market ministry in Zambia ANNUAL REPORT

ASSISTANCE TO SALVATION ARMY TERRITORIES

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OVERALL OBJECTIVE To continue to provide financial assistance to The Salvation Army where needed.

Specific Aims International Development Services (IDS), based at IHQ, aims to provide both financial and technical support to community projects and programmes across the world. In an effort to increase global accountability in projects, IDS aimed to complete development of a new database during 2017/18 to enable multiple enhancements in general management of projects informed by the International Aid Transparency Initiative. Alongside this, a key focus was to grow internal and external partnerships as well as maintain support to territories in their journey towards financial independence.

AMURTEL workshop on hygiene and bottle sterilisation in Athens, Greece

Achievements More than 580 project proposals were approved at IHQ during 2017/18 for implementation worldwide to support communities. The IDS team, while continuing to work with territories to encourage sustainable, long-term positive change in communities, finalised and rolled out the new HIVE database for community, institutional and emergency projects. Territories were invited to test the database and submit feedback to enable its improvement. The following examples illustrate the significant, transformative work supported by the IDS team: GREECE: The European refugee crisis continues to impact and inform the work of The Salvation Army in the Italy and Greece Command. In Athens, the Army is providing assistance to both refugees and asylum-seeking families in a complex, transitional context. Strong partnerships with other organisations and agencies have been vital in enabling the Army to play an effective role within the wider coordinated efforts in the country. During the year under review, AMURTEL Greece – a ‘perinatal’ mother and baby organisation – joined forces with The Salvation Army in Athens to provide breastfeeding support and nutrition assistance to nursing mothers, and their children. The expertise of the maternal health professionals from AMURTEL is adding significant value to the work of the Army for this group of vulnerable people.

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Salvation Army hall in Desruisseaux, Haiti, where 150 people sheltered during Hurricane Matthew and long-term reconstruction support is ongoing

HAITI: The Community Action Team (CAT) in Desruisseaux was one of many formed across Haiti in 2013, in order to support the development of the community. In October 2016, in the days before Hurricane Matthew hit land, the CAT walked through the community to find vulnerable individuals who required assistance. As a result, 150 people slept in the corps building for one night and were protected from the hurricane. The CAT team is actively involved in follow-up work with those affected by Hurricane Matthew. During the year under review, the Desruisseaux CAT continued to offer vital support to farmers who lost crops due to the hurricane, actively engaging in longerterm projects to help the farmersâ€™ livelihoods recover and the community get back on its feet. The CAT also engages in other activities such as community cleaning and sanitation work, hosting conferences on sexual health and parental responsibilities, horticulture and manuring of gardens, and bringing drinking water into the community.

AFRICA: In December 2017, delegates from 17 African territories met in Tanzania to launch The Salvation Armyâ€™s Community Development Strategy for Africa. The strategy focuses on building capacity and resourcing with four keynote objectives:

1. Strengthening relationships: increasing confidence in

using participatory facilitation for building relationships and achieving an increased number of sustainable community engagement initiatives.

2. Project management and strategic planning: increasing capacity to manage projects and systems for programme effectiveness.

3. Thematic expertise: offering continuously improved guidance on thematic areas.

4. Strengthened partnerships: enhancing partnership

working between the 17 African territories and commands, IHQ and eight support offices to improve community engagement across Africa.

In the strengthening of these four areas, there should be increased cohesion of community development work throughout Africa.

SOUTH ASIA: Fifty-nine delegates from India South Eastern and India South Western Territories came together for teaching on the Learning Pathways approach during a two-day workshop led by IDS in December 2017. Learning Pathways is a method of self-motivated learning, developed within IDS, which enables participants to establish their own learning targets and to set out an individualised route towards achieving those targets. The method was developed in recognition of the need for capacity building among individuals tasked to work on community projects and potential hurdles that conventional training courses may pose, such as time, expense and distance from training institutions. The Learning Pathways journey encourages participants to utilise the support and knowledge of the people and resources around them, helping them to learn as they carry out their duties

BUILDING PARTNERSHIPS BETWEEN AND FOSTERING STRONG RELATIONSHIPS BY 14

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Learning Pathways workshop at Nagercoil, India

CHINA: In Yunnan Province, China, a microcredit programme was successfully completed with the use of greenhouses in Ninglang county. Twenty households were provided with loans in order to build greenhouses for the production of seasonal and organic vegetables. The first repayment of these loans was used to fund further microcredit activities including the production of Chinese herbs. The prices set for vegetables in the local markets have been favourable and participating families have reported an increase in their household income, even with repayment of the loan.

Key Statistics ●●

The Trust paid grants and donations to Salvation Army territories totalling £25.73 million during the year (see Note 10 in the Accounts).

●●

585 project proposals were approved at IHQ during 2017/18 for implementation worldwide to support communities.

Future Plans

DEVELOPMENT OFFICES ENCOURAGING CAPACITY BUILDING

Over the next year, IDS will focus on building partnerships between development offices and fostering strong relationships by encouraging capacity building within territories and advancing initiatives such as the Africa Strategy Project, Asia Learning Forum and Learning Pathways training programme. Continued development of the new HIVE database and its full adoption and use by all Salvation Army project offices, will facilitate the smooth and effective progress of projects through the management cycle. ANNUAL REPORT

INTERNATIONAL PERSONNEL TRAINING AND DEVELOPMENT

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OVERALL OBJECTIVE

Achievements

To provide effective leadership and share knowledge and expertise through the strategic deployment of personnel. .

A keynote event during the year has been formation of the International Officer Training and Leader Development Council (IOTALDC). This draws together key officers from around the world with a wide-ranging agenda. The council will hold an important role in terms of policy development, revision of Orders and Regulations for the Training of Salvation Army Officers and promotion of resourcesharing, while day-to-day oversight of training and leader development remains a territorial responsibility. Work projects for the council include; review and clarification of territorial capability frameworks, review of current training policies and systems, promotion and development of standards for training officers, and ensuring emphasis on Salvation Army distinctives and spiritual formation throughout the training process. Other key developments during the year are as follows:

Specific Aims International personnel training and development objectives for 2017/18 included review of the orientation training offered at IHQ to new leadership in territories, offering support to training colleges around the world as they train officer cadets for culturally relevant ministry, and operation of the International College for Officers as a means to nurture personal holiness and spiritual leadership and encourage a renewed sense of mission and purpose among Salvation Army officers.

Chief of the Staff Commissioner Brian Peddle welcomes delegates to leadership orientation training at IHQ

SENIOR LEADERS’ ORIENTATION: When personnel are appointed to senior leadership roles in territories (most notably chief secretaries and territorial secretaries for women’s ministries) they undergo an orientation course at IHQ. A review of the current course content suggested several practical issues concerning timing, contextual relevance, and significant existing ‘gaps’ in leader development skills. A revised 10-day Leaders’ Orientation Conference was therefore formulated as one component of the full package of support offered to the wider target group of territorial leaders, including territorial commanders and territorial presidents of women’s ministries.

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Global ministry: delegates of the International College for Officers

The orientation conference now occurs twice a year, with a new workshop approach providing senior leaders within the Army with something akin to what senior executives in secular business receive, organised around four main content-groupings: personal leadership, team/organisational leadership, governance frameworks and issues, and management. High-quality external presenters have been secured. Some individual tailoring has been introduced, with self-directed/ self-selected learning components based on what individual leaders may have already experienced in other contexts. The orientation process includes commitments to postorientation elements including implementation of plans developed during the Conference, line management support, a selected coach/mentor, reflective exercises, and ongoing reporting to zonal secretaries within the regular territorial review process. INTERNATIONAL COLLEGE FOR OFFICERS: Based at Sunbury Court, London, the International College for Officers (ICO) brings together groups of officers from around The Salvation Army world for a six-week training experience, considering the opportunities and challenges facing Salvation Army leaders in the 21st century. Four groups or

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‘sessions’ attend the college each year. There is opportunity for reflection and spiritual formation, together with lectures and seminars on leadership, theology, ethics, social justice, finance and a number of other topics. A special feature for delegates attending is the opportunity to mix with fellow officers from different cultures, and to learn about the way that The Salvation Army meets need and preaches the gospel in different settings. Two sessions each year are designated as ‘translation sessions’ and these contain a higher than usual number of delegates from a specific language group. All lectures and meetings are translated on such occasions. Accountability, governance and transparency issues have recently been selected for special emphasis in lectures and all teaching includes a component focused upon these topics. The challenge of obtaining visas to allow delegates to enter the UK is considerable and some proposed delegates for recent sessions have been disappointed and refused entry. It is also challenging to find ways for prospective delegates to learn sufficient English to be able to understand the presentations given. Delegates continue to speak of the ICO experience as a highlight of their officership, as the college offers them a broader understanding of the internationalism of The Salvation Army within which they serve.

Key Statistics ●●

In the period April 2017 to March 2018, 167 delegates attended the ICO, representing 50 Salvation Army territories.

●●

Twenty-four territorial commanders, chief secretaries, general secretaries, territorial presidents of women’s ministries, and territorial secretaries for women’s ministries received orientation training at IHQ during the year.

OPPORTUNITY TO MIX WITH FELLOW OFFICERS FROM DIFFERENT CULTURES, AND TO LEARN ABOUT THE WAY THAT THE SALVATION ARMY MEETS NEED AND PREACHES THE GOSPEL IN DIFFERENT SETTINGS

Future Plans The International Officer Training and Leader Development Council (IOTALDC) will work to review, develop and implement policies for training and leader development including curriculum standards, training accreditation and capacity building of leaders. Two territories will be engaged to develop and implement an Administrative Leaders’ Training Course, an intentional process of debriefing and leader development for ICO delegates after returning to their home territory. Use of the leader development course (online modules) will be promoted and a new coach/mentor system for leaders implemented.

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CRISIS RELIEF

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OVERALL OBJECTIVE To respond to and help meet the needs arising from major crises.

Specific Aims The International Emergency Services (IES) team based at IHQ aims to support responses to disaster situations around the world and to help strengthen capacity of territories in their response to emergencies and disaster preparedness by providing programme monitoring and support in addition to training workshops.

Achievements During 2017/18 various countries have been affected by natural and man-made disasters including those caused by severe weather events, drought, earthquakes and conflict.

IES has provided practical assistance with deployed teams, technical guidance and project funding to support a range of relief and recovery responses. HURRICANE RESPONSE: A particularly devastating hurricane season affected large areas of the USA, the Caribbean and Latin America during the year under review. IES participated in relief responses in many of the affected islands of the Caribbean including Antigua, Turks and Caicos, Sint Maarten, St Kitts and Nevis, Cuba, Dominica, Dominican Republic, Barbuda and the Bahamas. Essential supplies of food, water, bedding and household utensils were provided within the initial response. Work is continuing with building materials offered to facilitate construction and long-term recovery as people return to their homes. A small international team was deployed directly from IHQ to Sint Maarten to support the relief and recovery efforts on the island, which suffered particularly severe damage.

Hot meal distribution in Antigua for evacuees from Barbuda, Caribbean

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Compassion in action: earthquake relief in Mexico

EARTHQUAKE RELIEF: Two powerful earthquakes affected Mexico in September 2017 and Salvation Army emergency teams sprang into action to respond to the immediate needs of those affected. Communities rallied together in order to support relief and clean-up activities. A long-term home rebuilding recovery programme will continue into 2018/19. FLOODING RESPONSE: While the devastation caused by hurricanes in the Caribbean and USA received significant news coverage, little publicity was given to the hardship of people in South Asia affected by the heavy monsoon rains. Communities in India, Pakistan, Bangladesh and Sri Lanka faced devastation as floods and landslides washed homes and livelihoods away. Once again, Salvation Army

teams responded with support to provide essential food and supplies. A house rebuilding project was also implemented for a remote hillside community in Bangladesh, bringing much-needed assistance to vulnerable people. REFUGEE AID: Many people of South Sudan, affected by conflict and drought in their homeland, are crossing international borders as refugees searching for safety, security and a better life for their families. In Uganda, which has welcomed more than one million people, The Salvation

MANY PEOPLE OF SOUTH SUDAN, AFFECTED BY CONFLICT AND DROUGHT IN THEIR HOMELAND, ARE CROSSING INTERNATIONAL BORDERS AS REFUGEES SEARCHING FOR SAFETY, SECURITY AND A BETTER LIFE FOR THEIR FAMILIES. 22

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Key Statistics ●●

During the year, 54 rapid-response projects were approved for initial, urgent life-saving activities spanning 29 countries with more than 78,500 beneficiaries.

●●

Thirty-three IES projects were approved for larger/longterm recovery activities spanning 27 countries with more than 74,000 beneficiaries.

Army has contributed to the humanitarian response by providing essential services, particularly water boreholes and latrines, both in several refugee settlements and in host communities identified as vulnerable. A small international team was deployed directly from IHQ to assist the Uganda Territory in the implementation of these activities, which have been well received and are of great benefit to those affected.

Future Plans

TRAINING: IES has supported territories in their disaster management plans through emergency response and preparedness workshops delivered by IES staff. In Sri Lanka, delegates were encouraged to learn something of international humanitarian principles and codes of conduct for emergency response and relate these, along with practical skills to their local crisis responses. A PREPARE course for 25 people was delivered in the USA Western Territory in order to add suitably trained personnel to the list of those able to be deployed for emergency responses internationally in the future.

IES will deliver further training in several locations to strengthen capacity of countries which suffer disasters on a regular basis with events for Japan, India and Malaysia already in the planning stages. Zimbabwe is holding national elections during 2018 and similar to the programme delivered in Kenya last year, a peace-building workshop is planned to enhance the peace and reconciliation work that the territory will implement around the vote. A zonal capacity-building summit is also planned to enhance coordination and response when several countries are impacted by disaster at the same time.

Life-giving water from a new borehole used by South Sudanese refugees in Uganda

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HEALTH SERVICES FOR THE POOREST PEOPLE

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OVERALL OBJECTIVE

Achievements

To strengthen The Salvation Armyâ€™s capacity to support poor and marginalised people in accessing quality primary health care services as close to the family as possible.

The Salvation Army continues to be a significant provider of faith-based, integrated, high-quality health care with services offered as close to the family as possible and giving priority to poor and marginalised members of society. The following examples illustrate the breadth and depth of this service provision:

Specific Aims Specific objectives for International Health Services (IHS) during 2017/18 included: providing support and supervision to clinics, hospitals and nursing schools around the Salvation Army world; supporting health institution facilities to move forward with property renovations to better service the needs of patients; and providing in-service training to professional staff.

INDIA SOUTH EASTERN: Catherine Booth Hospital has been training nurses since 1937, when Colonel (Dr) Noble opened the first training school with eight students. Training programmes have improved and grown over the years and in 2012 the hospital commenced training of Bachelor of Science (BSc) students. In December 2017, the first group of 50 BSc students graduated from the training school. IHS Coordinator Major Joan Gibson of IHQ attended the ceremony as guest speaker and graduating and continuing Graduation celebrations at Catherine Booth College of Nursing, India South Eastern

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‘Kangaroo Care’ midwifery training for preterm babies in Ghana

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students participated in a lamp lighting ceremony pledging to care for the sick regardless of colour, creed or status. At March 2018, the college had more than 190 BSc students enrolled and undergoing training. GHANA: One area of focus for IHS is to reduce maternal and neonatal mortality and morbidity. IHS hopes this can be achieved through the provision of in-service training related to the skills needed to manage obstetrical emergencies, as where health care providers are able to handle emergencies confidently and competently, maternal and infant mortality can be greatly reduced. In Ghana, 25 midwives from nine centres were trained by IHS in ‘kangaroo care’ of the newborn, management of shoulder dystocia and emergency breech delivery. One of the midwives trained, was able to put this knowledge into action before the end of the training week saving a newborn’s life. INDIA CENTRAL: Evangeline Booth Leprosy Hospital in Bapatla, India Central Territory, has provided services to vulnerable and deprived leprosy patients since 1934. Following the discovery of a cure for leprosy, the numbers of patients at the hospital greatly decreased and today the facilities are used to provide a home to 10 early leprosy patients who otherwise would have no one to care for them. The Salvation Army Officers in charge offer patients food and shelter as well as assistance with medical and physiotherapy care. Facilities were enhanced during the year under review with funding provided by the Trust for renovation of the kitchens, bedrooms and bathrooms to enrich the living environment for residents.

Key Statistics ●●

During 2017/18, the 38 Salvation Army hospitals and 134 clinics provided care to 237,569 in-patients and 1,454,233 out-patients.

●●

IHS provided support and supervision to 10 hospitals, 18 clinics, four nursing schools, three rehabilitation centres and two leprosy homes during 2017/18.

Future Plans IHS will develop a new support tool for Salvation Army health care facilities, as well as providing ongoing in-service education and support to Salvation Army medical institutions around the world, equipping and enabling provision of quality health care to poor and marginalised people at the point of need.

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FIGHTING AGAINST SEXUAL TRAFFICKING AND FOR SOCIAL JUSTICE

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OVERALL OBJECTIVE

Achievements

To take action to combat the massive and growing evil of sexual trafficking and to create awareness of social injustice in the world.

The International Social Justice Commission (ISJC), with its secretariat in New York, advises the General and other senior leaders on matters of social justice. The Director of the ISJC – supported by a team of experts – is The Salvation Army’s principal international advocate and adviser on social, economic and political issues giving rise to the perpetuation of social injustice in the world. In the period under review, the following are notable achievements:

Specific Aims To support victims of human trafficking, work to prevent people being trafficked and raise awareness of social injustice by building capacity in people, developing effective partnerships, sharing quality resources and promoting best practice.

Multi-language posters publicising The Salvation Army’s Annual Day of Prayer for victms of human-trafficking

MODERN SLAVERY AND HUMAN TRAFFICKING: The Deputy Director of the ISJC chaired an international task force that developed an international strategy and resources to encourage, support and coordinate antihuman trafficking responses around the world. The task force includes experienced international leaders as well as field practitioners. The strategy, approved by the General, encourages all Salvation Army territories and commands to respond to the evil of modern slavery and human trafficking with particular emphasis on: ●●

Prayer with involvement in the International Day of Prayer for Victims of Human Trafficking, recognising that all Salvation Army modern slavery and human trafficking responses should be based on deep spiritual foundations.

●●

Taking action to prevent people being lured into trafficking and modern slavery.

Journée annuelle de prière pour

LES VICTIMES DE LA TRAITE DES ETRES HUMAINS Dimanche 25 Septembre 2016

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Members of the International Moral and Social Issues Council at the United Nations (UN), New York, USA

The Salvation Army will therefore continue initiatives to: ●●

Protect people who are already caught up in the process of trafficking and enable them to exit their situation and be restored to their full potential.

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Enable the prosecution of offenders so that the trafficking process is stopped, the victims and survivors can experience justice and work with offenders to prevent further repetition of their behaviour and restoration to a relationship with God and society.

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Build partnerships with other anti-human trafficking agencies which are mutually beneficial, values based and have shared aims.

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Adopt internal policy that supports modern slavery and human trafficking responses and promotes policy externally which reduces incidence of trafficking (for example advocacy for national legislation and its implementation).

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Enable the participation of individuals, corps and institutions in modern slavery and human trafficking response activities.

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IPS MY EM EN T AT IO N AR TH E SA LV NA L PO SI TIO NA L STAT IN TE RN AT IO

ND LAVERY A MODERN S AFFICKING HUMAN TR

THE ISJC REPRESENTS THE SALVATION ARMY AT THE UN AND PARTICIPATES IN A NUMBER OF BODIES SEEKING TO BUILD STRONG ALLIANCES TO END EXTREME POVERTY AND PROMOTE SUSTAINABLE DEVELOPMENT In most countries where it is operating, The Salvation Army is already involved in the fight against modern slavery and human trafficking. Much of The Salvation Army’s work focuses on prevention, protection, partnerships and prayer to support victims, survivors and potential victims of human trafficking and modern slavery. Networks are being strengthened within The Salvation Army and with partners. In the year under review, a workshop was held in Brasilia, Brazil, arranged by The Salvation Army, the Anglican Alliance and Caritas. Practitioners met with denominational leaders to learn from each other and build networks for future cooperation. REFUGEES AND DISPLACED PEOPLE: The global refugee and migration crisis dominated discussions at the United Nations (UN) in the period under review. To inform and motivate a greater Salvation Army response, the ISJC organised ‘The Global Interactive Summit on Refugees and Displaced People’ in January 2018. Six 90-minute sessions were held over two days – four hosted in New York and two in London. More than 25,000 people viewed at least part of the six sessions which were innovative in the use of the Facebook Live platform to engage and connect people around the world. STRENGTHENING GRASSROOTS CAPACITY FOR SOCIAL JUSTICE: A new capacity-building programme was launched this year at the ISJC to intentionally develop younger Salvation Army officers for social justice ministry. Three women officers and one male officer – from Kenya, Pakistan and Indonesia – attended the programme. The officers developed plans for implementation back home and the ISJC is offering technical support over two years. In addition to the officer capacity-building programme, two interns worked at the ISJC during the period under review. Working with experienced Salvation Army officer mentors, these young graduates (all in their 20s) developed knowledge about social justice, theology and the UN system. Many of those who have completed the programme over the past 10 years are making a significant contribution to Salvation Army work around the world.

to enable Army personnel to better understand and respond in a Christlike manner to issues related to human sexuality. In March 2018, IMASIC – a group of 15 Salvation Army officers and soldiers from around the world – met in New York for one of its regular four-day meetings. IMASIC is part of the ISJC and develops resources to help The Salvation Army respond to global issues. In the year under review, IMASIC produced three International Positional Statements (Racism; Modern Slavery and Human Trafficking; Ancestral Worship). They are available for download at www. salvationarmy.org/isjc/ips PARTNERSHIPS: The ISJC represents The Salvation Army at the UN and participates in a number of bodies seeking to build strong alliances to end extreme poverty and promote sustainable development. In the year under review, The Salvation Army became an official partner of the UNHCR – the UN refugee agency. The Salvation Army also participates in the Partnership for Religion and Development (PaRD) (http://www. partner-religion-development.org/) which brings together governments (Germany, USA, UK, etc) with UN agencies and faith-based and religious organisations. The Salvation Army is an active member of the Joint Learning Initiative on Faith and Local Communities (http://jliflc.com/), the World Bankinitiated Moral Imperative to End Extreme Poverty, and the ACT Alliance. In all of these partnerships The Salvation Army seeks to learn from the experience of others and share its experience with the intention of improving the lives of people.

RESEARCH ON ISSUES OF SOCIAL INJUSTICE: The ISJC is coordinating the development of resources and research with the Salvation Army’s International Theological Council and International Moral and Social Issues Council (IMASIC) ANNUAL REPORT

Captain Aron Wambua, Kenya East Territory, at the Commission on the Status of Women at the UN, New York, USA

Key Statistics ●●

The Salvation Army engages with the UN in Geneva, Nairobi and New York. In the year under review, Salvation Army personnel attended 190 meetings and briefings at the UN and associated committees. A brief report was posted online after 43 of the most significant meetings so that the learnings were shared widely (see www.salvationarmy.org/isjc/unreports).

●●

In the year under review, significant time and energy has been invested in strengthening the ISJC social media presence. Facebook page follows are up 40 per cent and website views up 115 per cent, representing an increased awareness of the work of the ISJC and issues of social justice.

●●

The ISJC facilitated education sessions throughout the year, including at the ICO; USA National Social Services Conference in Philadelphia, USA; African Leaders Conference in Madagascar; Leadership Retreat in Canada; and youth leadership engagements with all six Indian territories.

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Future Plans The Salvation Army, supported by the ISJC, will campaign for a holistic understanding of people and an integrated global plan for fair, sustainable and equitable development for all nations. To this end, The Salvation Army will continue to partner with other religious groups, faith-based organisations, other non-governmental organisations, the UN, the World Bank Group and others, towards the vision of a world where all people can experience life in all its fullness. The ISJC will work with territories to develop locally relevant modern slavery and human trafficking response strategies, particularly in areas where existing capacity is low and poorly resourced. This will include rolling out international guidelines and protocols so that best practice is shared across The Salvation Army. The ISJC will continue to promote justice and reconciliation. To mark the 70th anniversary of the Universal Declaration of Human Rights, a publication titled The Salvation Army and Human Rights will be released.

FINANCIAL REVIEW

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FINANCIAL REVIEW The net movement in funds for the year ended 31 March 2018 decreased by £12.41 million, moving from £36.40 million (2017) to £23.99 million (2018). Most notably, net gains on investment assets decreased by £9.89 million from £21.17 million (2017) to £11.28 million (2018) reflecting market conditions and representing both the realised and unrealised gains arising on sales and the market value of investments held at year end. Other notable variances contributing to the total net movement in funds are outlined below.

INCOME Total income increased from £56.44 million (2017) to £65.24 million (2018) reflecting an increase in external donations and legacies from £16.19 million (2017) to £22.95 million (2018) and also an increase in Headquarters Support funding from Salvation Army territories from £7.54 million (2017) to £9.00 million (2018). Gains on disposal of properties also increased from £17,000 (2017) to £863,000 (2018) as two properties were sold during the financial year, whilst last year the Trust sold no properties. Contributions from Salvation Army territories to the International Self-Denial Fund showed limited movement from £25.34 million (2017) to £24.81 million (2018) in line with expectations while donations from Salvation Army

territories also remained relatively flat with a small year-onyear decrease of £338,000. A Gift Aid donation of £129,000 was received from Reliance Bank Limited while in 2017 the Bank retained all post-tax profit. Investment income recorded a small increase from £3.60 million (2017) to £4.08 million (2018), while income from charitable activities decreased by £90,000 due to a fall in publications income, and income from other trading activities increased by £78,000 due to an uplift in conference centre income. The following pie charts illustrate the sources of income for 2017/18 and also contributions to the International Self Denial Fund:

INCOME 2017/2018

Investment Income 6.3% Fund Generating Activities 0.4%

Charitable Activities 1.1%

Gain on Property Disposal 1.3%

Self-Denial Fund 38.0% Donations and Legacies 39.1% International HQ Support 13.8% 34

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SELF-DENIAL FUND CONTRIBUTIONS 2017/2018 South Pacific and East Asia 7%

Africa 5%

South Asia 1% Europe 15%

Americas and Caribbean 72%

CONTRIBUTIONS FROM SALVATION ARMY TERRITORIES TO THE INTERNATIONAL SELF-DENIAL FUND SHOWED LIMITED MOVEMENT FROM 2017

EXPENDITURE Expenditure across the six charitable activities in which The Salvation Army International Trust is engaged is detailed in Note 9 in the Accounts. Spending on charitable activities totalled £47.76 million (2018) representing a noteworthy increase of £4.86 million on the previous year. Financial assistance to Salvation Army territories increased from £27.70 million (2017) to £31.75 million (2018) including additional ‘seed’ funding made available to territories to develop local income streams and so reduce long-term reliance upon IHQ grants. Expenditure of £8.85 million (2018) was also incurred on International Personnel and Development, £3.99 million (2018) on World Mission and £1.79 million (2018) on Crisis Relief, reflecting the cost of some of the strategies in which the Trust is engaging, as referenced earlier in this report. The following pie charts illustrate 2017/18 expenditure on charitable activities and also the geographic spread of support of overseas work: ANNUAL REPORT

EXPENDITURE ON CHARITABLE ACTIVITIES 2017/2018 World Mission 8.4%

Social Justice 2.0% Crisis Relief 3.7%

Health Services 0.9% Assistance to Salvation Army Territories 66.5%

International Personnel Training and Development 18.5%

SUPPORT OF OVERSEAS WORK 2017/2018 South Pacific and East Asia 7.3%

South Asia 21.2%

Europe 17.3%

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Africa 35.8%

Americas and Caribbean 18.4%

The net movement in funds for the year ended 31 March 2018 was £23.99 million with surpluses on unrestricted funds of £29.79 million and deficits on restricted funds of £5.80 million. Total funds of £246.15 million were held at year end.

FUTURE PLANS The Trustee seeks to maintain the strong financial position of the Trust and will continue to explore means to increase the scale and scope of charitable activities while continuing to encourage Salvation Army territories to move towards financial self-reliance through provision of targeted financial support and other resources. The Trustee recognises the material pension liability arising from participation of the Trust in The Salvation Army Employees’ Pension Fund (see Note 16 in the Accounts) and is well placed to meet its obligations in this regard.

being the roll-out of a new global email solution and the implementation of cloud-based accounting software to all financially supported territories. Following the year end, the Trust approved a material grant to the Zambia Territory to fund the building of a new territorial headquarters, with a number of other material property projects awaiting planning consents and final approval. The Trustee continues to monitor developments closely in relation to the UK exit from the EU and other external events and remains confident that the level of reserves held is adequate in the changing economic climate and does not impact adversely on the Trust’s going concern status.

Two large-scale international projects are underway and will materially impact the Accounts of the Trust during 2018/19,

INVESTMENTS Listed investments (see Note 22 (c) in the Accounts) are managed under the terms of an investment management agreement with Sarasin & Partners LLP. The investment manager is required to make investments on behalf of the Trust in line with benchmarks that have been set and against which performance is measured. The Investment Committee which sits to review investment performance receives periodic reports on matters pertinent to its investment policy and this facilitates discussion which, in turn, enhances the committee’s understanding of the relationship between its Christian conviction and ethos and investment return; and even more importantly, the positive effect that its policy can have on companies which themselves may (or may not) be seeking to improve conditions in many parts of the world. The reports are tabled at full board meetings so that those directors who do not sit on the Investment Committee have an opportunity to add to the debate and have greater understanding of the issues that the Trust can tackle through its investment policy. The Trust operates an investment policy to reflect the Salvation Army’s ethical and moral stance: it does not wish to invest in tobacco, brewing, gambling, pornography, arms or companies that disregard the pollution of the environment. Investment is therefore excluded in companies which derive more than 10% in aggregate of their revenues from the following activities:

a. b. c. d. e. f. g. h. i. j.

the production of alcohol the sale (together with any production) of alcohol the production of tobacco the sale (together with any production) of tobacco the manufacture of whole weapons, weapon platforms and weapon systems the manufacture or sale of strategic parts for weapon systems the promotion of gambling the provision of adult entertainment services (other than mobile communications) the publication or wholesale of pornographic magazines or newspapers the extraction of thermal coal or the production of oil from tar sands.

For the avoidance of doubt the relation to sub-paragraphs (e) and (f) above, ‘weapons’ refers to both nuclear and conventional weapons. Beyond the ethical statement, the investment manager is directed to take into account The Salvation Army Act 1980 and to monitor the portfolio to ensure companies held within it adhere to best practice in corporate governance, employment conditions and environmental sustainability. The following table gives the long-term ranges and current weightings expressed in percentages of the Trust’s investment funds: ANNUAL REPORT

ASSET TYPE AT 31/03/18

YEAR END POSITION LONG-TERM RANGE

WEIGHTINGS

Fixed Income

10 - 30%

16.2%

Equities

70 - 90%

72.9%

0 - 5%

10.9% *

Liquid Assets

TOTAL

For the year ended 31 March 2018, the portfolio total return amounted to 6.2 per cent against an ethically adjusted benchmark return of 2.1 per cent. *There was a material capital addition to the portfolio prior to the year end.

Grants In supporting the Army’s work overseas, territories, commands and regions produce annual budget proposals, covering all aspects of their operations that are reviewed at IHQ. Annual grants are allocated by the Trustee and paid quarterly in advance to each mission supported territory, command and region (see Note 10 in the Accounts).

Reliance Bank Limited The Bank remains profitable, despite The Bank of England Base Rate of interest being at its record low level of 0.25% for much of the financial year, rising to 0.50% in November 2017. Income from wholesale investments and variable rate lending to customers has been deflated as a consequence. The Bank’s performance was better than forecast with operating profit for the year ended 31 March 2018 being £304,276 (2017: £412,025) which, after tax and Gift Aid donations, increased capital by £54,832 (2017: £320,285) to £11.40 million. Rather than making Gift Aid donations to its shareholders in the preceding year, the Bank retained all

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100%

post-tax profit in order to accommodate known increases in regulatory capital requirements. This year the Bank has made a Gift Aid donation of £228,207 equally divided between The Salvation Army International Trust and The Salvation Army Trust. The total of the Bank’s assets at 31 March 2018 amounted to £209.16 million (2017: £226.67 million) and liabilities reduced to £197.78 million (2017: £215.31 million). The Bank continues to maintain excellent liquidity and funding levels.

Reserves The total funds of the Trust at 31 March 2018 amounted to £246.15 million comprising £30.12 million in restricted funds and £216.03 million in unrestricted funds which includes £190.27 million in designated funds. The Trustee continues to keep the matter of reserves under review, with a project ongoing to reduce the number of different funds held and also examine any historic funds with minimal movement in the past few years.

Restricted Funds

Where possible the intention continues to use restricted donations and legacies in the year of receipt, except where the gift is sufficiently large to be used over a longer period.

Designated Funds

The Self-Denial Fund Reserve represents amounts held to ensure sufficient funds are available to make maintenance grants to supported territories that are paid in advance on a quarterly basis. The aim of the Trustee is for the balance on this Reserve to be sufficient to fund one year’s expenditure

in support of overseas work. The current balance of £21.72 million is equivalent to 12 months’ expenditure and therefore meets the target level. Other material designated amounts at 31 March 2018 relate to a reserve held to fund future replacement of the IHQ building (£14.71 million), a Property Commitments Reserve (£6.84 million) held to fund property acquisitions by the Trust over the next two-four years and an International Property Project Reserve (£6.46 million) held to provide additional property project funding to territories over the next two-four years. In addition, an International Financial and Accounting Standards Reserve (£10.00 million) is held to fund provision of cloud-based accounting software to territories over the next three-five years and an IT Development Reserve (£6.43 million) is held to fund provision of a new global email solution to territories over the next three-five years. An International Schools Development Reserve (£7.27 million) is also held to provide additional schools project funding to territories over the next two-four years, an Exchange Equalisation Reserve (£3.71 million) is held to fund exchange losses and a Mission Support Reserve (£1.52 million) is held to provide additional project funding to territories over the next two-four years.

General Reserve

The General Reserve is retained to cover the shortfall between expenditure and income of other overseas support and governance costs. The aim of the Trustee is for the balance on the General Fund Reserve to cover 50 per cent of these annual costs. The current balance of £5.33 million meets the target level, being equivalent to 7.1 months’ expenditure.

Principal Risks and Uncertainties The Trustee acknowledges its responsibilities relating to the management of risk. A formal risk management programme continues to operate allowing risks to be identified, classified and prioritised in terms of potential occurrence and impact. The Board of Directors of SAITCo has appointed a Risk Management Committee consisting of seven members, including a Non-Executive Director. A Risk Manager has been appointed and a Risk Register is maintained and kept under regular review by the Risk Manager and the Risk Management Committee. The Risk Management Committee works with the Risk Owner of each major risk to ensure acceptable action is taken to manage the risk and to establish suitable systems to reduce the likelihood of harmful outcomes occurring and the impact on the organisation should they occur. The main risks and uncertainties faced by the Trust, as detailed in the Risk Register at the end of the financial year under review, are outlined below in top-down priority order together with a summary of the mitigating strategies being pursued to manage these risks:

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KEY RISK

MITIGATING STRATEGY

A serious safeguarding incident resulting in harm to a child or vulnerable adult and subsequent reputational damage to the local/international Salvation Army.

Establishment of an international safeguarding office at IHQ. Ongoing development of safeguarding policies and procedures for IHQ and all Salvation Army territories.

Local issues in a territory resulting in demands for additional IHQ financial support and/or reputational damage to the local/international Salvation Army.

Continuous IHQ monitoring of global operations on a territory-by-territory basis. A suite of policies and procedures in place to manage operational risks. Internal audits undertaken periodically depending on the extent of perceived risk.

National economic and/or political crises adversely impacting Salvation Army operations in a territory prompting additional emergency support from IHQ.

Continuous IHQ monitoring of economic and political contexts on a country-by-country basis. Development of crisis management protocols for IHQ interventions.

Changes in national legislation (including tax codes) adversely impacting Salvation Army operations in territories and engagement of territories with IHQ.

Continuous monitoring of legislative contexts on a country-by-country basis overseen by IHQ legal counsel liaising with locally appointed lawyers.

Local issues resulting in use of donor restricted funds within a territory for non-specified purposes.

Continuous IHQ monitoring of application of project funds via bespoke databases. Policies and procedures in place to regulate use of project funds. Internal and external audits undertaken for project-related activity depending on the extent of perceived risk.

Loss of funds due to foreign exchange fluctuations.

Regular assessment of foreign exchange risks by Investment Committee. Maintenance of Exchange Equalisation Reserve by the Trust to fund exchange losses.

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Statement of Trustee’s Responsibilities The Trustee is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations. Charity law requires the Trustees to prepare financial statements for each financial year in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under The Charity Law the Trustee must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources, including the income and expenditure, of the charity for that period. In preparing these financial statements, the Trustee is required to: ●●

select suitable accounting policies and then apply them consistently;

●●

make judgements and accounting estimates that are reasonable and prudent;

●●

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

●●

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.

The Trustee is responsible for keeping adequate accounting records that are sufficient to show and explain the charity’s transactions and disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Trustee has approved this 2017/18 Annual Report and Accounts on this basis. For and on behalf of the directors of The Salvation Army International Trustee Company.

Dr Matthew Carpenter BA, MBA, DBA, MCMI Company Secretary 28 September 2018 ANNUAL REPORT

Independent Auditor’s Report to the Trustee of The Salvation Army International Trust Opinion We have audited the financial statements of The Salvation Army International Trust (‘the Charity’) for the year ended 31 March 2018, which comprise the statement of financial activities, the balance sheet, the cash flow statement and 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 law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion, the financial statements: ●●

give a true and fair view of the state of the Charity’s affairs as at 31 March 2018 and of its incoming resources and application of resources for the year then ended;

●●

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

●●

have been prepared in accordance with the requirements of the Charities Act 2011 and The Salvation Army Act 1980.

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

Conclusions related to going concern We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where: ●●

the Trustee’s use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

●●

the Trustee has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Charity’s ability to continue to adopt the going concern basis of accounting for a period of at least 12 months from the date when the financial statements are authorised for issue.

Other information The other information comprises the information included in the Report and Accounts, other than the financial statements and our auditor’s report thereon. The other information comprises: The Trustee’s Annual Report, Worldwide Facts and Figures Listing and Direct Territorial Project Contributions Listing. The Trustee is responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the 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 misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

ANNUAL REPORT

Matters on which we are required to report by exception We have nothing to report in respect of the following matters in relation to which the Charities Act 2011 requires us to report to you if, in our opinion; ●●

the information contained in the financial statements is inconsistent in any material respect with the Trustees’ Annual Report; or

●●

adequate accounting records have not been kept; or

●●

the financial statements are not in agreement with the accounting records and returns; or

●●

we have not received all the information and explanations we require for our audit.

Responsibilities of the Trustee As explained more fully in the Statement of Trustee’s responsibilities, the Trustee is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustee determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Trustee is responsible for assessing the Charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustee either intends to liquidate the Charity or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error,

and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located at the Financial Reporting Council’s (FRC’s) website at: https://www.frc.org.uk/auditorsresponsibilities This description forms part of our auditor’s report.

Use of our report This report is made solely to the Charity’s trustee, as a body, in accordance with the Charities Act 2011 and The Salvation Army Act 1980. Our audit work has been undertaken so that we might state to the Charity’s trustee those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Charity and the Charity’s trustee as a body, for our audit work, for this report, or for the opinions we have formed. DON BAWTREE (Senior Statutory Auditor) For and on behalf of BDO LLP, Statutory Auditor Gatwick United Kingdom Date: 28 September 2018 BDO LLP is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006. BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). ANNUAL REPORT

STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2018

THE SALVATION ARMY INTERNATIONAL TRUST THE SALVATION ARMY INTERNATIONAL TRUST STATEMENT OF FINANCIAL ACTIVITIES STATEMENT OF FINANCIAL ACTIVITIES 2018 FOR THE YEAR ENDED 31 MARCH FOR THE YEAR ENDED 31 MARCH 2018

Notes INCOME AND ENDOWMENTS FROM Donations and legacies: Received from Salvation Army territories - Self-Denial Fund - IHQ Support - Donations Joint Venture - Donation Other donations and legacies

Unrestricted funds £000

2 2 2 3 4

Restricted funds £000

2017

Total funds £000

25,341 7,542 2,787 16,188 51,858 766 201 3,599 17 56,441

24,813 9,001 129 22,902 56,845 676 279 3,454 863 62,117

2,449 51 2,500 625 3,125

24,813 9,001 2,449 129 22,953 59,345 676 279 4,079 863 65,242

8 9

1,183 42,986 44,169

148 4,772 4,920

1,331 47,758 49,089

1,085 42,900 43,985

22(d)

10,566 28,514

711 (1,084)

11,277 27,430

21,166 33,622

Transfers between funds

4,697

(4,697)

Other recognised gains/(losses): Other gains/(losses) Net Movement in Funds

(3,422) 29,789

(23) (5,804)

(3,445) 23,985

2,777 36,399

186,238 216,027

35,927 30,123

222,165 246,150

185,766 222,165

Charitable activities Other trading activities Investments Gain on Disposal of Properties Total Income EXPENDITURE ON Raising funds Charitable activities Total Expenditure Net gains/(losses) on investments Net income/(expenditure)

Reconciliation of funds: Total funds brought forward 1 April 2017 Total funds carried forward 31 March 2018

5 6 7

2018

All activities reported above, in both the current and preceding year, relate to continuing activities.

Page 1 44

ANNUAL REPORT

BALANCE SHEET AS AT 31 MARCH 2018

THE SALVATION ARMY THE SALVATION ARMY INTERNATIONAL TRUST INTERNATIONAL TRUST SHEET BALANCE SHEET AS AT 31 BALANCE MARCH 2018 AS AT 31 MARCH 2018 Notes Fixed Assets Properties Other Tangible Fixed Assets Investments

20 21 22

Current Assets Stocks Debtors and Prepayments Cash at bank and in hand

23 24

Less Current Liabilities Net Current Assets

Total Assets less current liabilities Net Assets

Funds Restricted Funds Property Fund Other Fixed Assets Fund Other Restricted Funds Unrestricted Funds Property Fund Other Fixed Assets Fund Designated Funds General Reserve Total Funds

2018 £000

2017 £000

28,686 1,171 187,818 217,675

28,943 1,457 161,626 192,026

133 34,390 873 35,396

161 34,466 368 34,995

(6,921) 28,475

(4,856) 30,139

246,150

222,165

246,150

222,165

14,779 453 14,891 30,123

15,025 766 20,136 35,927

19,707 718 190,271 5,331 216,027

19,718 691 161,451 4,378 186,238

246,150

222,165

Approved on behalf of The Salvation Army International Trustee Company on 28 September 2018 by: Lyndon Buckingham - Chairman Merle Heatwole - Managing Director Approved on behalf of The Salvation Army International Trustee Company on 28 September 2018 by: Lyndon Buckingham – Chairman Merle Heatwole – Managing Director

ANNUAL REPORT

Page 2

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2018

THE SALVATION ARMY THE SALVATION ARMY INTERNATIONAL TRUST INTERNATIONAL TRUST FLOW STATEMENT CASH FLOW STATEMENT CASH FOR THE YEAR ENDED 31 MARCH 2018 FOR THE YEAR ENDED 31 MARCH 2018 2018 £000

2017 £000

10,601

(5,131)

4,079 129 3,168 1,287 985 (1,151) 33,941 (41,892) 546

3,599 967 2,274 1,047 (1,840) 66,840 (73,105) (218)

11,147 10,410 21,557

(5,349) 15,759 10,410

23,985

36,399

1,444 (11,277) (649) (129) (4,079) (863) 28 76 2,065 10,601

1,323 (21,166) 7 (3,599) (60) (20,396) 2,361 (5,131)

Balance 2017 £000

Movement in year £000

Balance 2018 £000

368 757 9,285 10,410

505 11,743 (1,101) 11,147

873 12,500 8,184 21,557

Net cash (used in)/provided by operating activities (see note A) Cash flows from investing activities: Dividends, interest and rents from investments Donation on Joint Venture Gain/(Loss) on US held investments (Increase)/Decrease in Long Term Bank Deposits (Increase)/Decrease in Long Term Loans receivable Proceeds from the sale of property, plant and equipment Purchases of property, plant and equipment Proceeds from the sale of investments Purchase of Investments Net cash provided by/used in investing activities Change in cash and cash equivalents in the reporting period Cash and cash equivalents at the beginning of the reporting period Cash and cash equivalents at the end of the reporting period (see note B) Note A Reconciliation of net income/(expenditure) to net cash flow from operating activities Net income for the reporting period (as per the statement of financial activities) Adjustments for: Depreciation charges (Gain) on investments Revaluation of US Dollar Deposits Donation on Joint Venture Dividends, interest and rents from investments (Profit) on sale of fixed assets Decrease/(Increase) in Stocks Decrease/(Increase) in Debtors Increase in Creditors Net cash (used in)/provided by operating activities

Note B Analysis of Cash and Cash Equivalents Cash at bank Cash held by Investment Managers Notice deposits (less than 3 months) Total cash and cash equivalents

Page 3

ANNUAL REPORT

1. ACCOUNTING POLICIES The principal accounting policies adopted by the Trustee in the preparation of the financial statements, have been applied consistently and are set out below: (a)

Basis of Accounting - The financial statements have been prepared under the historical cost convention, subject to the inclusion of investments at fair value, and are in compliance with the Accounting and Reporting by Charities: Statement of Recommended Practice (FRS 102) (effective 1 January 2015), the Charities Act 2011, The Salvation Army Act 1980 and FRS 102, the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland. Critical accounting judgements and key estimations - In application of the charity's accounting policies, the accounting policies adopted by the Trustee have been applied consistently and are described below:

(b)

Income (i) Contributions to the International Self-Denial Fund are received annually from the headquarters of Salvation Army territories around the world (see Note 2). A territory is an administrative unit and may comprise several countries, a single country or part of a country. These contributions are used to fund grants and other support payments. to non self-supporting territories, as set out in Note 10. (ii) Contributions to International Headquarters support are receivable quarterly from self-supporting territories and annually from non self-supporting territories. (iii) Legacies are accounted for on receipt or on earlier notification, provided that the value can be reasonably measured and receipt is probable. (iv) Donations and all other income is recognised in the Statement of Financial Activities when received or receivable, whichever is earlier, unless it relates to a specific future period in which case it is deferred. Refunds are shown as negative income.

(c)

Expenditure Expenditure is charged in the Statement of Financial Activities on the accruals basis. (i) Irrecoverable Value Added Tax is charged to the related heads of expenditure. (ii) Expenditure on Charitable Activities consists of all expenditure relating directly to the objects of the Trust including support costs. Support costs have been allocated over activities on a per capita basis. Governance costs include those associated with constitutional and statutory requirements and those incurred in the governance of the Trustâ€™s assets. (iii) Maintenance grants are paid quarterly to overseas Salvation Army territories to support their operating costs. They are payable at the beginning of each quarter and are accounted for in the year to which they relate (see Note (b) (i) above). (iv) Property schemes not completed at the year end are carried forward in the Balance Sheet as a Fixed Asset under the heading of Property Schemes in progress. (v) Pension costs are accounted for in accordance with FRS 102 and are charged to the Statement of Financial Activities when payable. Details are provided in Note 16. (vi) Grants payable to Salvation Army Territories are recognised as expenditure when payment is made, in accordance with the annual budget.

(d)

Foreign Currencies Transactions in foreign currencies are recorded at the rate of exchange prevailing at the date of the transaction. Monetary assets and liabilities are translated into sterling at the exchange rate ruling on the balance sheet date. All profits and losses on exchange are included in the Statement of Financial Activities.

(e)

Going Concern The Trustee has reviewed the Trust's financial position, taking account of satisfactory levels of reserves and cash, the annual plan, and its system of financial and risk management. As a result of this review the Trustee has a reasonable expectation that the Trust has adequate resources to continue in operational existence in the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Page 4

ANNUAL REPORT

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018

THE SALVATION ARMY THE SALVATION ARMY INTERNATIONAL TRUST INTERNATIONAL TRUST NOTES FOR TO THE ACCOUNTS NOTES TO THE ACCOUNTS THE YEAR ENDED 31 MARCH 2018 FOR THE YEAR ENDED 31 MARCH 2018

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018

THE SALVATION ARMY INTERNATIONAL TRUST NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018 1. ACCOUNTING POLICIES - continued (f)

Fixed Assets Tangible fixed assets are stated at cost less accumulated depreciation. Depreciation is provided to write off the cost of tangible fixed assets over their estimated useful economic lives, as follows: l Freehold and Long Leasehold Properties are depreciated over 50 years l Internal Fit-Out Costs of the Headquarters building are depreciated over 15 years l Office Equipment is depreciated over seven years l Vehicles are depreciated at 17% per annum l IT Equipment is depreciated at 25% per annum The freehold property at Sunbury Court has been depreciated so as to write down the cost of the project by components, on a straight line basis over their estimated useful economic lives at the following annual rates: l Building and Infrastructure - 50 years l Roof (flat), Windows and Doors - 25 years l Major Installations (including heating, electrical, drainage) - 25 years l Bathroom and Kitchen Installations, Lifts- 15 years l Furniture, Fixtures and Fittings - 15 years

(g)

Basic Financial Instruments Financial assets and financial liabilities are recognised when the Trust becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are initially measured at transaction price and subsequently measured at their settlement value. Trade and other debtors are recognised at the settlement amount due. Prepayments are valued at the amount prepaid net of any trade discount offered. Creditors and provisions are recognised where the Trust has an obligation resulting from a past event that is likely to result in the transfer of funds to a third party and the amount due can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

(h)

Investments - To comply with the Statement of Recommended Practice, investments are included at fair value. Listed investments are valued at the year end bid price. The freehold reversionary interest is externally valued every five years, subject to any significant change in value in the intervening years. Investment properties are revalued on a rolling three-year basis and held at fair value at the balance sheet date and no depreciation is provided. The aggregate surplus or deficit arising on revaluation is transferred to a revaluation reserve.

(i)

Stocks are valued at the lower of cost or net realisable value.

(j)

Funds (i) The Property Fund represents monies already expended on the acquisition of freehold and leasehold properties. (ii) The Restricted Funds are held for restricted purposes, as specified by the donors. (iii) The Unrestricted Funds include Designated Funds held for particular purposes designated by the Trustee in the exercise of its discretionary powers, and a General Reserve representing funds not designated for specific purposes.

(k)

Joint Venture The banking company, Reliance Bank Limited, in which the Salvation Army International Trust holds a 51% interest, is shown as a Joint Venture with The Salvation Army Trust (United Kingdom Territory with the Republic of Ireland) holding a 49% interest. The Salvation Army International Trust does not control the company and responsibility for the appointment of Bank Directors is held by a Nominations Committee comprising Non-Executive Directors from the Bank. Accordingly the investment in the Joint Venture is shown at cost, and donations received are included under Income in the Statement of Financial Activities. Full details of the company's Profit and Loss Account and Balance Sheet are set out in Note 3.

(l)

All recognised gains and losses are included in the Statement of Financial Activities, and all the reported activities, in both the current and preceding years, reflect ongoing activities.

Page 5

ANNUAL REPORT

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018

THE SALVATION ARMY INTERNATIONAL TRUST THE SALVATION ARMY INTERNATIONAL TRUST NOTES TO THE ACCOUNTS NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018 FOR THE YEAR ENDED 31 MARCH 2018 2. CONTRIBUTIONS RECEIVED FROM SALVATION ARMY TERRITORIES 2. CONTRIBUTIONS RECEIVED FROM SALVATION ARMY TERRITORIES Self-Denial Fund Self-Denial Fund Territory Territory Angola Angola Australia Australia Eastern Eastern Australia Australia Southern Southern Bangladesh Bangladesh Brazil Brazil Canada Canada and and Bermuda Bermuda Caribbean Caribbean Congo (Brazzaville) (Brazzaville) Congo Democratic Republic Republic of Congo Democratic Congo Denmark Denmark Eastern Europe Europe Eastern Finland and and Estonia Estonia Finland France and and Belgium Belgium France Germany, Lithuania Lithuania and Germany, and Poland Poland Ghana Ghana Hong Kong Kong and and Macau Macau Hong India Central Central India India Eastern India Eastern India Northern India Northern India South Eastern India South Eastern India South Western India South Western India Western India Western Indonesia Indonesia Italy and Greece Italy and Greece Japan Japan Kenya East Kenya Kenya East West Kenya Korea West Korea Latin America North Latin America North Liberia Liberia Malawi Malawi Mali Mali Mexico Middle East Mexico Mozambique Middle East The Netherlands, Czech Republic and Slovakia Mozambique NewNetherlands, Zealand, Fiji Czech and Tonga The Republic and Slovakia Nigeria New Zealand, Fiji and Tonga Norway, Iceland and The Færoes Nigeria PakistanIceland and The Færoes Norway, Papua New Guinea Pakistan The Philippines Papua New Guinea Russia The Philippines Rwanda and Burundi Russia Singapore, Malaysia and Myanmar Rwanda and Burundi South America East Singapore, Malaysia and Myanmar South America West South America East Southern Africa South America West Spain and Portugal Southern Sri LankaAfrica Spain andand Portugal Sweden Latvia Sri Lanka Switzerland, Austria and Hungary Sweden and Latvia Taiwan Switzerland, Tanzania Austria and Hungary Taiwan Uganda Tanzania United Kingdom with the Republic of Ireland Uganda USA Central United Kingdom with the Republic of Ireland USA Eastern USA USA Central Southern USA Eastern Western USA USA Southern National HQ USA Zambia USA Western Zimbabwe USA National HQ Zambia Zimbabwe

Unrestricted Unrestricted 2018 2017 2018 2017 £000 £000 £000 £000 2222 500 500 341 341 11 2929 1,501 1,501 7171 9191 6262 2626 99 5555 1717 3131 1919 7676 5555 101 101 25 25 83 83 35 35 37 4737 547 55 5 22855 228 146 146 111 111 26 626 46 14 19 1 1519 215 194 2 560 194 19 560 39319 1 393 40 1 1040 310 6 3 75 6 23 75 39 23 56 39 12 156 10512 727 1 105 8 727 9 48 2,011 9 3,994 4 2,011 4,632 3,994 4,204 3,358 4,632 4,204 80 3,358 397 24,813 80 397 24,813

2323 563 563 414 414 2 2 4747 1,332 1,332 6464 104 104 6565 2626 4 4 4545 1515 3030 1818 8181 5454 87 87 23 23 79 79 32 32 35 5035 550 62 5 22062 220 141 141 100 100 25 725 6 7 1 6 21 1 1421 214 146 2 603 146 25 603 40025 5 400 24 5 924 3 9 5 3 90 5 22 90 38 22 64 38 11 164 18611 793 1 186 7 793 11 2 7 1,93611 4,133 2 1,936 4,476 4,133 4,949 3,104 4,476 4,949 88 3,104 413 25,341 88 413 25,341

International International Donations Received Donations Received Headquarters Support Headquarters Support Unrestricted Restricted Unrestricted Restricted 2018 2017 2018 2018 2017 2018 20172017 £000 £000 £000 £000 £000 £000 £000£000 1 1 345345 307307 1 1 2 2 511511 4 4 4 4 5 5 15 15 1 1 26 26 46 46 32 32 3 3 24 24 7 7 3 3 6 6 6 6 6 6 6 10 6 1 10 62 1 7 62 7 7 11 7 2 11 1 2 1 1 1 1 2 1 1 2 1 1 101 1 238101 4238 89 4 5 89 3 5 3 3 - 3 1 16 1 2 16 3 2 3 3 1 2 3 73 1 141 2 1 73 2141 1 1 776 2 1,629 1 1,362776 1,629 1,740 1,272 1,362 56 1,740 3 1,272 6 56 9,001 3 6 9,001

1 1 335335 297297 1 1 2 2 496496 4 4 4 4 5 5 14 14 2 2 25 25 45 45 31 31 2 2 23 23 7 7 3 3 5 5 6 6 6 6 6 10 6 1 10 61 1 6 61 7 6 11 7 2 11 1 2 1 1 1 1 2 1 1 2 1 1 98 1 231 98 4231 86 4 5 86 3 5 3 3 - 3 1 16 1 2 16 3 2 3 3 1 2 3 70 1 137 2 1 70 2137 1 1 753 2 1,166 1 1,128753 1,166 1,166 1,166 1,128 60 1,166 3 1,166 6 60 7,542 3 6 7,542

- 14 14 (2) (2) - - 232 232 1 1 - - 8 8 - 34 34 4 4 28 28 - 33 33 - 1 4 1 7 4 1 7 - 1 - - - 1 - 1 - - - 113 59 113 - 59 66 - 66 - - - 15 1 15 1 8 - 162 8 85 - 162 - 85 - 444 78 168 444 150 78 23 168 711 150 - 23 - 711 2,449 2,449

24 24 81 81 93 93 22 22 26 26 2 2 77 77 (8) (8) 4 3 4 - 3 83 - 83 214 69 214 - 69 59 - 59 1 - 1 3 3 - 3 84 3 196 1 84 - 196 - 1 151 63 844 151 149 63 291 844 252 149 - 291 - 252 2,787 2,787 ANNUAL REPORT

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018

THE SALVATION ARMY INTERNATIONAL TRUST NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018 3. DONATION FROM JOINT VENTURE Reliance Bank Limited The Salvation Army International Trust has a 51% interest in Reliance Bank Limited, the other 49% being held by The Salvation Army Trust (United Kingdom Territory with the Republic of Ireland). Reliance Bank Limited provides banking facilities to The Salvation and the general public. The Bank offers transactional banking services to more than 35 Salvation Army territories, providing a vital 'safe haven' for project funds and IHQ operational grants and a secure platform for international fund transfers for the global Army. During the present reported financial year, 75% of the net taxable profits of the Bank have been donated to support equally the mission of the Army internationally (The Salvation Army International Trust) and in the United Kingdom (The Salvation Army Trust). As set out in accounting policy Note 1(k), the investment in the Joint Venture is shown at cost, and the donation received is included under Income in the Statement of Financial Activities. 2018 2017 £000 £000 Summary Profit and Loss Account Interest Receivable and other operating income 2,990 3,167 Interest Payable and other operating expenditure (652) (798) Administration Expenditure (2,034) (1,957) Operating Profit 304 412 Taxation (21) (92) Profit after Tax 283 320 Less donation (228) Retained Surplus for year 55 320 Retained Reserves brought forward 3,850 3,530 Retained Reserves carried forward 3,905 3,850 Donation received in year Share Capital owned Summary Balance Sheet Fixed Assets Current Assets Less than one year Loans over one year Liabilities Over one year Current Net Assets Share Capital Reserves Shareholders' Funds

129 3,825

3,825

2,819

2,842

174,945 31,395 209,159

191,395 32,425 226,662

(2,450) (195,304) 11,405

(2,100) (213,212) 11,350

7,500 3,905 11,405

7,500 3,850 11,350

Unrestricted income to the Salvation Army International Trust from Reliance Bank Limited for the year was £129k (2017: £nil) 4. OTHER DONATIONS AND LEGACIES Other Donations Legacies

ANNUAL REPORT

Unrestricted Restricted £000 £000 22,877 51 25 22,902 51

2018 Unrestricted £000 £000 22,928 16,087 25 41 22,953 16,128

Restricted £000 60 60

2017 £000 16,147 41 16,188

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018

THE SALVATION ARMY INTERNATIONAL TRUST NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018

5. INCOME FROM CHARITABLE ACTIVITIES Rents from charitable activities Income from publications Income from Café 101 International Personnel Training and Development

2018 £000 135 284 257 676

2017 £000 139 376 240 11 766

220 59 279

143 58 201

Restricted income for the year was £nil (2017: £11k) 6. OTHER TRADING ACTIVITIES Conference Centre income Rents from letting of property Unrestricted income for the year was £279k (2017: £201k) 7. INVESTMENT INCOME Income from fixed interest securities 454 368 Dividends from equities 1,356 1,451 Interest on bank deposits 116 88 THE SALVATION ARMY INTERNATIONAL SALVATION ARMY TRUST INTERNATIONAL TRUST THE SALVATION ARMY INTERNATIONAL Income from funds held inTHE USA 686 282TRUST Rental on Freehold Reversionary Interest 218 218 Rents from letting of investment properties 1,249 1,192 NOTES TO THE ACCOUNTS NOTES TO THE ACCOUNTS NOTES TO THE ACCOUNTS THE SALVATION ARMY THE THE SALVATION INTERNATIONAL SALVATION ARMY ARMY THE TRUST INTERNATIONAL INTERNATIONAL SALVATION ARMY TRUST TRUST INTERNATIONAL TRUST 4,079 3,599 Restricted for theENDED year FOR was (2017: £469k) FOR income THE YEAR 31£625k THE MARCH 2018 ENDED 31TO MARCH 2018 FOR THE YEAR ENDED 31 MARCH 2018 NOTES TOYEAR THE ACCOUNTS NOTES NOTES TO THE THE ACCOUNTS ACCOUNTS NOTES TO THE ACCOUNTS THE SALVATION ARMY INTERNATIONAL TRUST 2018 FOR THE YEAR ENDED FOR FOR THE 31THE MARCH YEAR YEAR ENDED 2018 ENDED FOR 31 31 MARCH THE MARCH YEAR 2018 2018 ENDED 31 MARCH 2018 2018

RAISING FUNDS Cost ofFUNDS letting of property SING AISING FUNDS FUNDS8. RAISING stsof letting Investment costs rty Cost st of letting of property of property Cost of letting management of property

NOTES TO THE ACCOUNTS £000

713 618 1,331

2018

£000 2018 FOR THE YEAR ENDED 31 MARCH

Investment nt estment costs management management Investment costs costs management costs

8. RAISING FUNDS year £14k)was £148k Restricted (2017: £14k) expenditure for the year was £148k (2017: £14k)

Cost of year letting of£148k property estricted ricted r the year expenditure expenditure was £148k for Restricted for the (2017: the year £14k) expenditure was was £148k (2017: for(2017: the£14k) year £14k) was £148k (2017: £14k)

2017 £000 2017 656 £000 429 656 429 20181,085

£000 2018 2018 713 £000 £000 618 713713 618618 1,331

713 618 1,331

1,331 1,331

vity ctivity

Grant and CHARITABLE ACTIVITIES

Donation Activity funding of Activity activities Activity

dorld Mission Mission

World Mission

£000

2018 2018 GrantGrant and and Grant Grant and and Grant and Grant and Donation Activities Donation Donation Activities Activities Donation Activities Activities Donation undertaken Activities Donation Support funding of funding funding of of Support undertaken undertaken funding of Support undertaken Grant and Support Support undertaken funding of directly undertaken funding of Donation Activities activities activities activities costs directly directly activities costs costs Total directly funding of undertaken (Note 11) (Note (Note 11)11)Support directly activities costsdirectly costs Total activities directly £000 £000 £000 £000 activities £000 £000 £000 £000 £000 £000 costs £000 (Note 11) (Note 11)£000

£000£000

£000

World Mission

World Mission - territories (Note 2,857 Army ssistance stance territories to Salvation to Salvation (Note Army Assistance 10) Army territories territories to Salvation (Note (Note 10) Army 10) 25,731 10)

2,857- -

1,133 4,512 25,731 25,731

Assistance to Salvation Army territories (Note 10)

national ternational raining and Personnel Personnel Development International Training andand Development Personnel Training andterritories Development - (Note territories (NoteTraining Assistance 10) toDevelopment Salvation 25,731 Army 4,512 25,73110) 5,934 1,510- -

sisis Relief Relief

International Personnel Training and Development

Crisis Relief

1,533- -

293- -

ng and Development International Personnel- Training and 5,934 Development 2,915 Crisis Relief

ealth th oorest Services Services People for for thethe Poorest Health Poorest Services People Peoplefor the Poorest People Health Services Crisis Relief for the Poorest - People

1,533

1,133 2,857 2,857 -

25,731 -

252 1,533 1,533 -

5,934

2018 Activities

2017

(Note 11)

£000 £000 £000 £000 £000 £000£000 3,990 1,133 1,133 2,857 3,990 3,990 1,133 £000 3,613 3,990 3,613 3,613£000 4,512

1,510

5,934

2,915

31,753

27,701

1,785 252

-1511,785

4441,987 1,533

252

937 302302

635

937937 302

293

444 151

635

302

444

709 444

937

876 937

293709

6,263 15,764 15,764 25,731 47,758 6,263 6,263 15,764 47,758 6,26347,758 42,90047,758 25,731 15,764 6,26347,758

635

937 302

8,014

1,987 1,785

2,915

302 635635 -

293

8,849

5,934 8,014 1,785

444444 151

151 15,764 25,731 25,731

1,785 1,785 252

-2528,849

293

st People

stice cking and for Social Fighting Justice Against Sexual - Trafficking and635 for Social Justice 302

1,785 252252 1,533

8,849 2,9151,533

444 151151

635- -

25,731

2017 2017 2017

Support undertaken Total costs Total Total TotalSupport Total Total (Note 11) Total directly Total costs Total £000 £000 £000 Total £000 £000 £000Total (Note 11) £000

151 293293 -

Trafficking ghting ing Against Against and Sexual Sexual for Social Fighting Trafficking Trafficking Justice Against andand for Sexual for Social Social Trafficking Justice Justiceand for Social - Justice

2017 2018 2017

2018 2018 2018

656 429 1,085

2,915 5,934 5,9341,510 - 8,849 2,915 2,91525,731 5,93431,753 8,849 8,849 2,915 4,512 8,014 8,8491,510 8,014 8,014 4,512 31,753 27,701 27,701 31,

1,533

Fighting Against Sexual Trafficking and for Social Justice

1,085 1,085£000

- 3,990 2,857 1,133 3,9903,613 3,613 3, 2,857 1,133 - 3,990 3,613 1,510 4,512 4,512 25,731 31,753 1,510 1,510 4,512 31,753 31,753 1,510 2,857 27,70131,7531,133 27,701 27,701

252

Health Services for the- Poorest People293

£000 £000 £000£000£000

2018 £000 713 618 £000 1,085 1,331

713 618 1,331

Investment management costs

Restricted expenditure for the year was £148k (2017: £14k) 9.9. CHARITABLE ACTIVITIES HARITABLE ES RITABLE ACTIVITIES ACTIVITIES CHARITABLE ACTIVITIES

2017 2 £000 £ 2017 2017 £000 £000656 656656429 429429 1,085 2017 1,

937

635876

151 302

1,987 1,987

8,014 1,987 8,

709709

709 1, 1,987

876876

876

709

42,900 42,900 42,900

876

Grant and donation funding includes operational grants paid quarterly to Salvation Army territories around the World and the onward of project funding. rant ng t and includes and donation donation operational funding funding Grant includes grants and includes donation paid operational operational quarterly funding grants to grants Salvation includes paid paid quarterly operational Army quarterly territories to Salvation to grants Salvation around paid Army quarterly Army the territories World territories to and Salvation around the around onward the Army the World territories transmission World andand the around the onward ofonward project thetransmission World transmission funding. andtransmission the of project of onward project funding. transmission funding. of project funding. Costs of undertaken directly include the direct costs associated with emergency services and other projects which are by International osts saken of activities ofdirectly activities include undertaken undertaken Costs the direct directly ofactivities directly activities costs include include associated undertaken thethe direct direct with directly costs emergency costs associated include associated services the25,731 with direct with emergency and costs emergency other associated projects services services which with andand emergency other are other managed projects projects services which by which International and areare other managed managed projects Headquarters. bymanaged by International which International are managed Headquarters. Headquarters. byHeadquarters. International Headquarters. 25,731 15,764 6,263 15,764 47,758 6,263 25,731 47,758 15,764 42,900 6,263 42,900 47, Support have been allocated over activities on(see a on per basis Note 11). port upport allocated costs costs have over have been activities been Support allocated allocated oncosts a costs per over over capita have activities activities been basis on allocated (see on a per aNote per capita over capita 11).activities basis basis (see Note acapita per Note 11). capita 11). (see basis (see Note 11).

Restricted expenditure for the year was £4.8m (2017: £4.0m) estricted ricted r the year expenditure expenditure was £4.8m for Restricted for the (2017: the year year £4.0m) expenditure was was £4.8m £4.8m (2017: for(2017: the£4.0m) year £4.0m) was £4.8m (2017: £4.0m)

cludes ts paid operational quarterlyGrant to grants Salvation andpaid donation Army quarterly territories funding to Salvation includes around Army operational the World territories and grants the around paid onward the quarterly transmission Worldtoand Salvation the of onward project Armytransmission funding. territories around of project the World funding. and the onward transmis ect directly costs include associated Costs the direct with of emergency activities costs associated undertaken services with and directly emergency otherinclude projects services thewhich direct and are costs other managed associated projects by International which with emergency are managed Headquarters. services by International and otherHeadquarters. projects which are managed by In ANNUAL REPORT 51 cated a per over capitaactivities basis Support (see on a Note costs per 11). capita have basis been (see allocated Noteover 11). activities on a per capita basis (see Note 11). year £4.0m) was £4.8mRestricted (2017: £4.0m) expenditure for the year was £4.8m (2017: £4.0m)

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018

THE SALVATION ARMY THE SALVATION INTERNATIONAL ARMY TRUST INTERNATIONAL TRUST NOTES TO THE ACCOUNTS NOTES TO THE ACCOUNTS FOR THE YEAR ENDED FOR THE 31 MARCH YEAR ENDED 2018 31 MARCH 2018

10. GRANTS AND10. DONATIONS GRANTS AND PAIDDONATIONS TO SALVATION PAIDARMY TO SALVATION TERRITORIES ARMY IN SUPPORT TERRITORIES OF OVERSEAS IN SUPPORT WORK OF OVERSEAS WORK ----------------------------------------------------2018-----------------------------------------------------------------------------------------------------2018-------------------------------------------------Grant funding Grant Additional funding Activities Additional Activities Allowable Allowable deductions of deductions activities ofgrant activities for funded grantbyfor funded by from Selffrom Selfspecific costs donations specific costs donations Total Total Territory Territory Denial funds Denial funds (see note 1(b(i)) (see note 1(b(i)) £000 £000 £000 £000 £000 £000£000 £000 £000 Africa, General Africa, General -(43)- (43) (43) (43) Americas. General Americas. General -19 1 10 9 10 Angola Angola 17 54 17 21 54 4 21 96 4 96 Australia Eastern Australia Eastern 75 75 -4 79 4 79 Australia Southern Australia Southern --Bangladesh Bangladesh 7 2017 201 38 246 38 246 Brazil Brazil 31 648 31 648 210 210 889 889 Caribbean Caribbean 21 734 21 734 3 154 3 154 912 912 Congo (Brazzaville)Congo (Brazzaville) 20 533 20 533 22 218 22 218 793 793 Czech Republic andCzech Slovakia Republic (Netherlands) and Slovakia (Netherlands) 438438 12 450 12 450 Democratic Republic Democratic of Congo Republic of Congo 7 6247 624 53 136 53 136 820 820 Denmark Denmark --1 1 1 Eastern Europe Eastern Europe 21 1,155 21 1,155 22 232 22 1,430 232 1,430 Estonia (Finland) Estonia (Finland) 12 162 12 162 6 180 6 180 Europe, General Europe, General --1 1 1 Fiji and Tonga Fiji and Tonga --15 15 15 France and BelgiumFrance and Belgium 1 -1 -41 41 42 42 Germany, LithuaniaGermany, and Poland Lithuania and Poland 3 2083 208 21 232 21 232 Ghana and Togo Ghana and Togo 10 163 10 163 50 55 50 278 55 278 Hong Kong and Macau Hong Kong and Macau --1 1 1 India National Secretariat India National Secretariat 6565 21 21 86 86 India Central India Central 1 3541 354 1 228 1 228 584 584 India Eastern India Eastern (5) 29 (5) 29 594 594 618 618 India Northern India Northern 360360 1 247 1 247 608 608 India South EasternIndia South Eastern 2 4072 407 1 28 1 438 28 438 India South Western India South Western 400400 2 106 2 106 508 508 India Western India Western 304304 2 109 2 109 415 415 Indonesia Indonesia -14512 14 512 526 526 Italy and Greece Italy and Greece 6 2446 244 38 5 38 293 5 293 Japan Japan --4 4 4 Kenya East Kenya East 30 352 30 352 48 1,439 48 1,439 1,869 1,869 Kenya West Kenya West 34 607 34 607 48 428 48 1,117 428 1,117 Korea Korea --2 2 2 Latin America NorthLatin America North 4 7384 738 32 774 32 774 Latvia (Sweden) Latvia (Sweden) 3 1393 139 33 175 33 175 Liberia and Sierra Leone Liberia and Sierra Leone 11 179 11 179 1 71 1 262 71 262 Malawi Malawi 29 127 29 127 14 14 14 184 14 184 Mali and Burkina Faso Mali and Burkina Faso 5 585 58 37 100 37 100 Mexico Mexico 3 4113 411 1 20 1 435 20 435 Middle East Middle East 269269 28 44 28 341 44 341 Mozambique Mozambique 29 246 29 246 54 15 54 344 15 344 Nigeria Nigeria 7 2137 213 17 33 17 270 33 270 Norway Norway 11 11 -1111 Pakistan Pakistan 3 5293 529 1 222 1 222 755 755 Papua New GuineaPapua New Guinea 44 423 44 423 33 388 33 388 888 888 The Philippines The Philippines 5 4075 407 38 450 38 450 Russia Russia 748748 1 749 1 749 Rwanda and Burundi Rwanda and Burundi 8 1778 177 18 19 18 222 19 222 Singapore, Malaysia Singapore, and Myanmar Malaysia and Myanmar 199199 1 88 1 288 88 288 South America EastSouth America East 33 561 33 188 561 370 188 1,152 370 1,152 South America West South America West 46 454 46 454 25 50 25 575 50 575 South Asia, GeneralSouth Asia, General -55 55 Southern Africa Southern Africa 22 167 22 167 2 15 2 206 15 206 Spain and PortugalSpain and Portugal 29 732 29 732 29 790 29 790 SPEA, General SPEA, General --Sri Lanka Sri Lanka 4 1844 184 2 134 2 134 324 324 Switzerland, AustriaSwitzerland, and Hungary Austria and Hungary --8 8 8 Taiwan Taiwan 9999 40 139 40 139 Tanzania Tanzania 46 156 46 156 20 215 20 215 437 437 Uganda Uganda 25 155 25 155 59 7 59 246 7 246 United Kingdom with United the Republic Kingdomofwith Ireland the Republic of Ireland 87 87 -8787 Zambia Zambia 68 404 68 404 11 631 11 1,114 631 1,114 Zimbabwe and Madagascar Zimbabwe and Madagascar 88 541 88 541 17 254 17 254 900 900 2018

- Total2018

- Total

903

16,358 903

16,358 781

7,689 781

25,731 7,689

25,731

2017

- Total2017

- Total

1,165

16,590 1,165

16,590 377

6,997 377

25,129 6,997

25,129

Page 10

ANNUAL REPORT

2017

Total

£000 202 24 59 84 42 374 1,312 1,266 858 574 950 20 1,510 137 30 110 5 234 223 1 71 454 284 499 895 761 367 213 575 688 676 1 856 166 208 204 77 975 315 472 378 26 792 459 499 744 251 324 645 605 (2) 225 1,038 7 256 90 100 551 276 129 640 324

25,129

NOTES TO THE ACCOUNTS NOTES TO NOTES THE ACCOUNTS TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018 FOR THEFOR YEAR THE ENDED YEAR31ENDED MARCH 312018 MARCH 2018 11. 11.

ANALYSIS OF SUPPORT COSTS BY ACTIVITY ANALYSIS 11. ANALYSIS OF SUPPORT OF SUPPORT COSTS BY COSTS ACTIVITY BY ACTIVITY Human Governance Human Human Governance Management Finance & IT Resources Property Depreciation (see note Governance 12) Management Management Finance & Finance IT & Resources IT Resources Property Property Depreciation Depreciation (see note(see 12) note 12) £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 World Mission 225 202 58 155 223 270 World Mission World MissionArmy territories 225 225 202 202 58 58 155 155 223 223 270 270 Assistance to Salvation 300 269 77 207 297 360 AssistanceAssistance toPersonnel Salvation to Training Army Salvation territories Army territories 300 300 269 269 77 77 398 207 207 297 297 360 360 International and Development 580 520 149 574 694 International International PersonnelPersonnel Training and Training Development and Development 580 580 520 520 149 149 398 398 574 574 694 694 Crisis Relief 50 45 13 34 50 60 Crisis Relief Crisis Relief 50 50 45 45 13 13 34 34 50 50 60 60 Health Services for the Poorest People 30 27 7 21 30 36 Health Services Health for Services the Poorest for the People Poorest People 30 30 27 27 7 7 21 21 30 30 36 36 Fighting Against Sexual Trafficking and for 60 54 15 41 60 72 Fighting Against FightingSexual Against Trafficking Sexual Trafficking and for and for 60 60 54 54 15 15 41 41 60 60 72 72 Social Justice Social Justice Social Justice 1,245 1,117 319 856 1,234 1,492 1,245 1,245 1,117 1,117 319 319 856 856 1,234 1,234 1,492 1,492

Charitable Activities CharitableCharitable ActivitiesActivities

2018 2018

2018

Total Total £000 £000 1,133 1,133 1,510 1,510 2,915 2,915 252 252 151 151 302 302

Total £000 1,133 1,510 2,915 252 151 302

6,263 6,263

6,263

Depreciation on Vehicles and IT Equipment of £122,000 (2017: £124,000) forms part of rechargeable expenditure allocated on a usage basis Depreciation Depreciation oninVehicles onand Vehicles IT headings Equipment and ITabove. Equipment of £122,000 of £122,000 (2017: £124,000) (2017: £124,000) forms partforms of rechargeable part of rechargeable expenditure expenditure allocated on allocated a usage onbasis a usage basis and is included the functional and is included and isinincluded the functional in the functional headings above. headings above. All support costs have been allocated against Charitable Activities (see note 9). All supportAll costs support havecosts beenhave allocated been against allocated Charitable against Charitable Activities (see Activities note (see 9). note 9).

12. 12.

2018 2018 £000 £000

2018 £000

GOVERNANCE COSTS GOVERNANCE 12. Audit GOVERNANCE COSTS COSTS Internal 440 Internal Audit Internal Audit 440 440 External Audit 48 External External Audit (includes Trustees' Indemnity Insurance) 48 48 Legal andAudit Administration 634 Legal and Legal Administration and Administration (includes Trustees' (includes Indemnity Trustees' Indemnity Insurance) Insurance) 634 634 International Child Protection Governance 309 International International Child Protection Child Protection Governance Governance 309 309 Finance and Property 61 THE SALVATION THE SALVATION THE ARMY SALVATION INTERNATIONAL ARMYARMY INTERNATIONAL INTERNATIONAL TRUST 1,492 TRUST TRUST Finance and Finance Property and Property 61 61 1,492 1,492

2017 2017 £000 £000

2017 £000

314 314 61 61 310 310 90 90 54 54 829 829

314 61 310 90 54 829

NOTES TO THE NOTES ACCOUNTS NOTES TO THE TO ACCOUNTS THE An Internal Audit Department carries out a cycle of reviews of the systems in operation within IHQ ACCOUNTS and in all countries where The Salvation Army is working. An InternalAn Audit Internal Department Audit Department carries outcarries a cycleout of areviews cycle ofofreviews the systems of theinsystems operation in operation within IHQwithin and inIHQ all countries and in all where countries Thewhere Salvation The Army Salvation is working. Army is working. FOR THE YEAR FORENDED THE FOR YEAR THE 31 YEAR MARCH ENDED ENDED 2018 31 MARCH 31 MARCH 2018 2018

13. PERSONNEL 13. PERSONNEL 13. COSTS PERSONNEL COSTS COSTS Salaries and Salaries Allowances Salaries and Allowances and Allowances Employer's Social Employer's Employer's Security Social Costs Social Security Security CostsCosts Employer's Pension Employer's Employer's Costs Pension Pension CostsCosts

2018 £000

20182017 2018 £000£000 £000

2017 2017 £000 £000

4,415 424 448 5,287

4,415 4,095 4,415 424 390 424 448 205 448 5,287 4,690 5,287

4,0954,095 390 390 205 205 4,6904,690

No. 3 2 1 1

No. No. No. 3 2 3 - 12 1 2 1 - 1 - -1 1 1

No. No. 2 2 1 1 1 1 1 1

156

156 150 156

150 150

The number The of employees number The number ofearning employees of employees greater earning than earning greater £60,000 greater than per annum £60,000 than £60,000 per annum per annum was as follows: was as was follows: as follows: £60,001 - £70,000 £60,001 £60,001 - £70,000 - £70,000 £70,001 - £80,000 £70,001 £70,001 - £80,000 - £80,000 £80,001 - £90,000 £80,001 £80,001 - £90,000 - £90,000 £90,001 - £100,000 £90,001 £90,001 - £100,000 - £100,000 £100,001 - £110,000 £100,001 £100,001 - £110,000 - £110,000 £110,001 - £120,000 £110,001 £110,001 - £120,000 - £120,000 Included in the Included above, Included inthe thehighest in above, the above, paid the highest employee the highest paid had employee paid employer employee had pension employer had employer pension pension contributionscontributions of £19,154. contributions of £19,154. of £19,154. Average number Average ofAverage officers number number and of employees officers of officers and employees and employees

The key management The key Themanagement personnel key management of personnel The Salvation personnel of The Army ofSalvation The International Salvation Army Army International Trust,International comprise Trust, the Trust, comprise General, comprise the the General, Chief the General, of the theStaff Chief the Chief of theofStaff the Staff and eight International and eight and International eight Secretaries. International The Secretaries. total Secretaries. taxable The allowances total Thetaxable total taxable and allowances benefits allowances and plus benefits employers and benefits plusNIC employers plus of key employers management NIC ofNIC keyofmanagement key management personnel were personnel £197k personnel (2017: were were £197k £222k). £197k (2017:(2017: £222k). £222k).

14. TRUSTEES 14. TRUSTEES 14. TRUSTEES (i) Remuneration (i) Remuneration (i) Remuneration The directorsThe of The directors The Salvation directors of The Army ofSalvation The International Salvation Army Army International Trustee International Company, Trustee Trustee the Company, fourteen Company, trustees the fourteen the(seeTrustee's fourteen trustees trustees (seeTrustee's report (seeTrustee's for details), reportreport comprise for details), for details), nine comprise senior comprise nine senior nine senior Salvation Army Salvation officers, Salvation Army an employee Army officers, officers, an who employee an actsemployee as Director/Company who acts whoas acts Director/Company as Director/Company Secretary and Secretary fourSecretary non-executive and four andnon-executive four directors non-executive withdirectors specialist directors with expertise. specialist with specialist expertise. expertise. All Salvation All Army Salvation All officers Salvation Army receive Army officers anofficers allowance receive receive an based allowance anon allowance length based ofbased service on length onand length of other service of personal service and other and circumstances other personal personal circumstances and, circumstances as ministers and, of as and, religion, ministers as ministers of religion, of religion, are provided are withprovided furnished are provided with accommodation furnished with furnished accommodation and accommodation transportand facilities. transport and transport facilities. facilities. The taxable allowances The taxable The taxable and allowances benefits allowances and received benefits andduring benefits received thereceived year during by during the theofficers year the by year serving theby officers the asofficers directors serving serving ranged as directors asfrom directors ranged £4,075 ranged to from £24,915 £4,075 from £4,075 to £24,915 to £24,915 (2017: £4,075 (2017: to £36,087) (2017: £4,075 £4,075 and to £36,087) they to £36,087) did and not receive they anddid they any not did additional receive not receive any remuneration additional any additional remuneration for their remuneration duties foras their directors. for duties their duties as directors. as directors. The employee The serving employee The employee as Director/Company serving serving as Director/Company as Director/Company Secretary received Secretary Secretary remuneration received received remuneration of £94,716 remuneration inofthe £94,716 executive of £94,716 in the role in executive the of Head executive role of Finance ofrole Head ofofHead ofthe Finance charity of Finance of theofcharity the charity and did not receive and did and any not did additional receive not receive any remuneration additional any additional remuneration for his remuneration dutiesfor as his director. for duties his duties as director. as director. The non-executive The non-executive The directors non-executive did directors not receive directors didany not did remuneration receive not receive any remuneration for anytheir remuneration services. for their for services. their services. (ii) Expenses (ii) Expenses (ii) Expenses One trustee received One trustee Onea trustee total received of received £221 a total (2017: aof total £187) £221 of £221 (2017: for travel (2017: £187) expenses £187) for travel for intravel their expenses capacity expenses in their asinacapacity their director capacity as of The a director asSalvation a director of The Army ofSalvation The International Salvation Army Army International International Trustee Company. Trustee Trustee Expenses Company. Company. paid Expenses on Expenses behalf paid of Executive on paid behalf on behalf of Directors, Executive of Executive in respect Directors, Directors, of in their respect executive in respect of their roles of executive their areexecutive not roles included roles are not here. areincluded not included here. here. There were no There expenses There were were no paid expenses no to third expenses parties paid to paid on third behalf to parties thirdofparties the on behalf Trustees on behalf of the during ofTrustees the the Trustees year. duringduring the year. the year. 15. AUDIT COSTS 15. AUDIT 15. AUDIT COSTS COSTS The amount payable The amount Thetoamount the payable auditors payable to for thethe toauditors the audit auditors of forthese theforaudit financial the of audit these statements of these financial financial amounts statements statements to £39,970 amounts amounts excluding to £39,970 to £39,970 VAT excluding (2017: excluding £38,500). VAT (2017: VAT (2017: £38,500). £38,500). Their remuneration Their Their remuneration for services remuneration in forconnection services for services inwith connection in audits connection ofwith African audits withterritories audits of African of amounted African territories territories to amounted £41,900 amounted excluding to £41,900 to £41,900 VAT excluding (2017: excluding £42,800) VAT (2017: VAT (2017: £42,800) £42,800) and payments and to payments BDO and payments International to BDO to BDO International offices International amounted offices to offices amounted £269,500 amounted (2017: to £269,500 to£354,300). £269,500 (2017:(2017: £354,300). £354,300).

Page 11 Page 11 Page 11

ANNUAL REPORT

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018

THE SALVATION ARMY INTERNATIONAL TRUST THE SALVATION THE SALVATION ARMY INTERNATIONAL ARMY INTERNATIONAL TRUST TRUST

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018

THE SALVATION ARMY INTERNATIONAL TRUST NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018 16. PENSION COSTS The Salvation Army International Trust participates in two separate employee pension schemes, both of which are administered by The Salvation Army United Kingdom Territory with the Republic of Ireland. It contributes to The Salvation Army Employees’ Pension Fund, a funded defined benefit scheme, in respect of those members of staff that were eligible and had joined the scheme prior to its closure to new members on 31 December 2011. The scheme is subject to triennial actuarial valuations. The most recent valuation was performed on 31 March 2015, which reported a shortfall of £5.753 million relative to the technical provisions which corresponded to an on-going funding ratio of 96.0%. It was agreed that the Employers would fund the shortfall by paying additional contributions over varying periods of up to 3 years. The Salvation Army International Trust took the decision to make three annual payments of £530,189, with the final payment made in March 2018. The scheme is a multi-employer scheme incorporating five employers and the actuary has confirmed that it is not practical to allocate the assets and liabilities of the scheme between participating employers in accordance with FRS102. As at 31 March 2018, the Trust had 45 employees in the scheme out of a total active membership of 510. A Defined Contributions Scheme was introduced from 1 October 2011 and 36 members of staff of this The Salvation Army International Trust have joined the scheme. Auto enrolment was adopted from 1 April 2014, with employees required to opt out if they did not want to be part of the scheme. The Trust accounts for Pension Costs on the date payments to the Schemes fall due. The costs charged in the current year are disclosed in Note 13. 17. TAXATION As a registered charity, the Trust is entitled to exemptions from tax in accordance with the provisions of Section 505 of the Income and Corporation Taxes Act 1988.

ANNUAL REPORT

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018

THE SALVATION THE SALVATION ARMY INTERNATIONAL ARMY INTERNATIONAL TRUSTTRUST NOTESNOTES TO THETO ACCOUNTS THE ACCOUNTS FOR THE FOR YEAR THEENDED YEAR ENDED 31 MARCH 31 MARCH 2018 2018 18. MOVEMENT 18. MOVEMENT IN FUNDS IN FUNDS

RESTRICTED RESTRICTED PropertyProperty Fund Fund Other Fixed OtherAssets Fixed Fund Assets Fund Polignac Polignac Trust Trust Officers'Officers' SupportSupport Endowment Endowment Fund Fund Int'l Social Int'lJustice Social Justice Commission Commission Fund Fund Other Restricted Other Restricted

Balance BalanceTransfers Transfers Incoming IncomingOutgoing Outgoing 31/03/2017 31/03/2017 Resources Resources Resources Resources £000 £000 £000 £000 £000 £000 £000 £000 15,025 15,025 766 766 2,526 2,526 4,394 4,394 2,515 2,515 10,701 10,701 35,927 35,927

(2,810) (2,810) (1,887) (1,887) (4,697) (4,697)

284 284 201 201 3,351 3,351 3,836 3,836

Balance Balance 31/03/2018 31/03/2018 £000 £000

(246) (246) (313) (313) (4,384) (4,384) (4,943) (4,943)

14,779 14,779 453 453 4,595 4,595 2,515 2,515 7,781 7,781 30,123 30,123

The Property The Property Fund represents Fund represents restricted restricted funds used funds forused specific for specific propertyproperty acquisitions. acquisitions. The Other TheFixed OtherAssets Fixed Fund Assetsrepresents Fund represents funds which fundshave which been have used been toused finance to finance the acquisition the acquisition of OtherofTangible Other Tangible Fixed Fixed Assets (per Assets Note (per 21). Note 21). As part As of the partongoing of the ongoing reserves reserves review project, review project, following following a specific a specific assessment assessment undertaken undertaken in consultation in consultation with thewith external the external auditorsauditors the Polignac the Polignac Trust Funds Trust were Funds transferred were transferred to designated to designated funds. funds. The Officers' The Officers' SupportSupport Endowment Endowment Fund represents Fund represents restricted restricted funds used funds toused provide to provide grants to grants Salvation to Salvation Army officers Army officers around around the world thetoworld assisttowith assist basic withsupport basic support costs. costs. The International The International Social Justice Social Justice Commission Commission Fund was Fund setwas up represents set up represents restricted restricted funds tofunds support to support the workthe of work the International of the International Social Justice Social Justice Commission Commission office. office. All otherAllrestricted other restricted reserves reserves are funds areheld funds forheld specific for specific overseas overseas areas ofareas work.of work.

UNRESTRICTED UNRESTRICTED PropertyProperty Fund Fund Other Fixed OtherAssets Fixed Fund Assets Fund Designated Designated Funds Funds PropertyProperty Commitments Commitments Fund Fund Self-Denial Self-Denial Fund Fund Investment Investment Appreciation Appreciation Fund Fund Investment Investment PropertyProperty Revaluation Revaluation Fund Fund Exchange Exchange Equalisation Equalisation Fund Fund Other Designated Other Designated Funds Funds GeneralGeneral ReserveReserve

691 224

Balance Balance 31/03/2018 31/03/2018 £000 £000

(702) (702) (197) (197)

19,707 19,707 718 718

25,787 25,787 22,446 22,446 28,644 28,644 34,601 34,601 5,115 5,115 44,858 44,858 161,451161,451

340 340 (4,546) (4,546) (500) (500) 9,647 9,647 4,941 4,941

6,561 6,561 (4,677) (4,677) 25,211 25,211 (21,394)(21,394) 9,231 9,231 (3,023) (3,023) 3,748 3,748 (598) (598) (908) (908) 17,621 17,621 (7,893) (7,893) 62,372 62,372 (38,493)(38,493)

28,011 28,011 21,717 21,717 34,852 34,852 37,751 37,751 3,707 3,707 64,233 64,233 190,271190,271

4,378 4,378 186,238186,238

(1,159) (1,159) 4,697 4,697

11,418 11,418 (9,306) (9,306) 73,790 73,790 (48,698)(48,698)

5,331 5,331 216,027216,027

The Property The Property Fund represents Fund represents funds which fundshave which been have utilised been utilised to finance to finance the acquisition the acquisition of freehold of freehold and leasehold and leasehold properties. properties. The Other TheFixed OtherAssets Fixed Fund Assetsrepresents Fund represents funds which fundshave which been have used been toused finance to finance the acquisition the acquisition of OtherofTangible Other Tangible Fixed Fixed Assets (per Assets Note (per 21). Note 21). The Property The Property Commitments Commitments Fund represents Fund represents funds earmarked funds earmarked for future forproperty future property acquisitions acquisitions and schemes. and schemes. This includes This includes a a reservereserve held to fund held to thefund future thereplacement future replacement of the IHQ of the building IHQ building (£14.71m), (£14.71m), and an and International an International PropertyProperty Project Project reservereserve (£6.46m) (£6.46m) held to provide held to provide additional additional propertyproperty project funding project funding to territories to territories over theover nextthe 2-4next years. 2-4 years. The Self-Denial The Self-Denial Fund represents Fund represents amounts amounts held to ensure held to ensure sufficient sufficient funds are funds available are available to meetto the meet commitment the commitment to maketo make operational operational grants to grants supported to supported territories territories payablepayable quarterly quarterly in advance. in advance. The balance The balance is equivalent is equivalent to 12.0 to months 12.0 months of the budgeted of the budgeted grants and grants support and support costs payable costs payable to overseas to overseas territories territories for the following for the following year. year. The Investment The Investment Appreciation Appreciation Fund represents Fund represents unrealised unrealised gains ongains investments on investments which are which still are subject still subject to market to market risk. risk. The Investment The Investment PropertyProperty Revaluation Revaluation Fund represents Fund represents the surplus the surplus on revaluation on revaluation of tenanted of tenanted properties properties held forheld investment for investment purposes. purposes. The Exchange The Exchange Equalisation Equalisation Fund represents Fund represents exchange exchange gains made gainsand made held and to offset held tofuture offsetexchange future exchange losses. losses. Other Designated Other Designated Funds are Funds heldare forheld particular for particular purposes purposes designated designated by the directors by the directors in the exercise in the exercise of their of discretionary their discretionary powers.powers. An International An International Financial Financial and Accounting and Accounting Standards Standards Implementation Implementation ReserveReserve (£10.00m) (£10.00m) is held to is fund held to provision fund provision of cloud-based of cloud-based accounting accounting softwaresoftware to territories to territories over theover nextthe 3-5next years 3-5and years an and IT Development an IT Development ReserveReserve (£6.43m) (£6.43m) is held to is fund held to provision fund provision of a newof a new global email globalsolution email solution to territories to territories over theover nextthe 3-5next years. 3-5 An years. International An International SchoolsSchools Development Development reservereserve (£7.27m) (£7.27m) is also held is also to held to provideprovide additional additional schoolsschools project funding project funding to territories to territories over theover nextthe 2-4next years 2-4and years a Mission and a Mission SupportSupport ReserveReserve (£1.52m) (£1.52m) is held to is held to provideprovide additional additional project funding project funding to territories to territories over theover nextthe 2-4next years. 2-4 years. As part As of the partongoing of the ongoing reserves reserves review project review (seeking project (seeking to reduce to reduce the number the number of different of different funds held), fundsan held), amount an amount of £1.74m of £1.74m was was transferred transferred from restricted from restricted reserves reserves where the where original the original donor restriction donor restriction allowedallowed to partlytofund partly grants fundto grants territories to territories initially expended initially expended from designated from designated reserves. reserves. The review The also review resulted also resulted in Polignac in Polignac Trust Funds Trust (£2.57m) Funds (£2.57m) being transferred being transferred to designated to designated funds following funds following a specific a specific assessment assessment undertaken undertaken in consultation in consultation with thewith external the external auditors. auditors. The General The General ReserveReserve represents represents the working the working capital required capital required to fund to thefund day-to-day the day-to-day needs of needs The Salvation of The Salvation Army International Army International Trust, Trust, and is equivalent and is equivalent to 7.1 months to 7.1 months expenditure expenditure on headquarters on headquarters administration administration costs. costs.

Page 14Page 14

ANNUAL REPORT

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018

THE SALVATION THE SALVATION ARMY ARMY INTERNATIONAL INTERNATIONAL TRUSTTRUST NOTESNOTES TO THE TO ACCOUNTS THE ACCOUNTS FOR THE FOR YEAR THE ENDED YEAR ENDED 31 MARCH 31 MARCH 2018 2018 18.

MOVEMENT 18. MOVEMENT IN FUNDS IN FUNDS (CONTINUED) (CONTINUED)

RESTRICTED RESTRICTED Property Property Fund Fund Other Fixed OtherAssets Fixed Assets Fund Fund Polignac Polignac Trust Trust Officers' Officers' SupportSupport Endowment Endowment Fund Fund Int'l Social Int'l Justice Social Justice Commission Commission Fund Fund Other Restricted Other Restricted

Balance Balance Transfers Transfers Incoming IncomingOutgoing Outgoing 31/03/2016 31/03/2016 Resources Resources Resources Resources £000 £000 £000 £000 £000 £000 £000 £000 15,271 15,271 1,078 1,078 2,104 2,104 3,934 3,934 2,515 2,515 11,884 11,884 36,786 36,786

(666) (666) (666) (666)

422 422 460 460 3,170 3,170 4,052 4,052

Balance Balance 31/03/2017 31/03/2017 £000 £000

(246) (246) (312) (312) (3,687)(3,687) (4,245)(4,245)

15,025 15,025 766 766 2,526 2,526 4,394 4,394 2,515 2,515 10,701 10,701 35,927 35,927

The Property The Property Fund represents Fund represents restricted restricted funds used fundsforused specific for specific property property acquisitions. acquisitions. The Other TheFixed OtherAssets Fixed Assets Fund represents Fund represents funds which fundshave whichbeen haveused beentoused finance to finance the acquisition the acquisition of OtherofTangible Other Tangible Fixed Fixed Assets Assets (per Note (per21). Note 21). The Polignac The Polignac Trust funds Trustwere fundsheld were in held investments, in investments, with income with income earnedearned on these onfunds thesebeing fundsutilised being utilised for projects for projects within European within European predominately predominately CatholicCatholic countries. countries. The Officers' The Officers' SupportSupport Endowment Endowment Fund isFund generated is generated from donations from donations received received from Officers from Officers aroundaround the World the to World support to support OfficersOfficers within within countries countries who arewho unable are unable to fully support to fully support their Officers, their Officers, providing providing grants to grants assist towith assist certain with certain supportsupport costs. costs. The International The International Social Justice Social Justice Commission Commission Fund was Fund setwas up from set up funds fromoriginally funds originally received received from the from USA the Eastern USA Eastern Territory, Territory, incomeincome generated generated from these fromfunds theseisfunds usedistoused support to support the work theofwork the International of the International Social Justice Social Justice Commission Commission office based office in based in New York. New York. All other Allrestricted other restricted reserves reserves are funds areheld funds forheld specific for specific overseas overseas areas ofareas work.of work.

UNRESTRICTED UNRESTRICTED Property Property Fund Fund Other Fixed OtherAssets Fixed Assets Fund Fund Designated Designated Funds Funds Property Property Commitments Commitments Fund Fund Self-Denial Self-Denial Fund Fund Investment Investment Appreciation Appreciation Fund Fund Investment Investment Property Property Revaluation Revaluation Fund Fund Exchange Exchange Equalisation Equalisation Fund Fund Other Designated Other Designated Funds Funds GeneralGeneral Reserve Reserve

1,467 1,467 170 170

27,218 27,218 20,950 20,950 14,609 14,609 29,385 29,385 3,484 3,484 28,635 28,635 124,281124,281 3,917 3,917 148,980148,980

Balance Balance 31/03/2017 31/03/2017 £000 £000

(1,835)(1,835) (175) (175)

19,718 19,718 691 691

(874) (874) (2,374)(2,374) 3,295 3,295 47 47

3,029 3,029 (3,586)(3,586) 25,472 25,472 (21,602) (21,602) 14,717 14,717 (682) (682) 5,375 5,375 (159) (159) 1,634 1,634 (3) (3) 18,329 18,329 (5,401)(5,401) 68,556 68,556 (31,433) (31,433)

25,787 25,787 22,446 22,446 28,644 28,644 34,601 34,601 5,115 5,115 44,858 44,858 161,451161,451

(1,018)(1,018) 666 666

9,945 9,945 (8,466)(8,466) 78,501 78,501 (41,909) (41,909)

4,378 4,378 186,238186,238

The Property The Property Fund represents Fund represents funds which fundshave whichbeen haveutilised been utilised to finance to finance the acquisition the acquisition of freehold of freehold and leasehold and leasehold properties. properties. The Other TheFixed OtherAssets Fixed Assets Fund represents Fund represents funds which fundshave whichbeen haveused beentoused finance to finance the acquisition the acquisition of OtherofTangible Other Tangible Fixed Fixed Assets Assets (per Note (per21). Note 21). The Property The Property Commitments Commitments Fund represents Fund represents funds earmarked funds earmarked for future forproperty future property acquisitions acquisitions and schemes. and schemes. This includes This includes a a reservereserve held to held fund to thefund future thereplacement future replacement of the IHQ of the building IHQ building (£13.59m), (£13.59m), and an and International an International Property Property ProjectProject reservereserve (£5.53m) (£5.53m) held to held provide to provide additional additional property property project project fundingfunding to territories to territories over theover nextthe 2-4next years. 2-4 years. The Self-Denial The Self-Denial Fund represents Fund represents amounts amounts held to held ensure to ensure sufficient sufficient funds are funds available are available to meettothe meet commitment the commitment to maketo make maintenance maintenance grants to grants supported to supported territories territories payablepayable quarterly quarterly in advance. in advance. The balance The balance is equivalent is equivalent to 12 months to 12 months of the budgeted of the budgeted grants and grants support and support costs payable costs payable to overseas to overseas territories territories for the following for the following year. year. The Investment The Investment Appreciation Appreciation Fund represents Fund represents unrealised unrealised gains on gains investments on investments which are which stillare subject still subject to market to market risk. risk. The Investment The Investment Property Property Revaluation Revaluation Fund represents Fund represents the surplus the surplus on revaluation on revaluation of tenanted of tenanted properties properties held forheld investment for investment purposes. purposes. The Exchange The Exchange Equalisation Equalisation Fund represents Fund represents exchange exchange gains made gainsand made held and to held offsettofuture offsetexchange future exchange losses.losses. Other Designated Other Designated Funds are Funds heldare forheld particular for particular purposes purposes designated designated by the directors by the directors in the exercise in the exercise of their of discretionary their discretionary powers.powers. This includes This includes a Mission a Mission SupportSupport Reserve Reserve (£3.23m) (£3.23m) held to held provide to provide additional additional project project fundingfunding to territories to territories over theover nextthe 2-4next years 2-4and years and an International an International SchoolsSchools Development Development reservereserve (£4.53m) (£4.53m) held to held provide to provide additional additional school school project project fundingfunding to territories to territories over theover nextthe next 2-4 years. 2-4 years. In addition, In addition, an International an International Financial Financial and Accounting and Accounting Standards Standards Implementation Implementation Reserve Reserve (£5.63m) (£5.63m) is held is to held fund to fund provision provision of cloud-based of cloud-based accounting accounting software software to territories to territories over theover nextthe 3-5next years. 3-5 years. As partAs of the partongoing of the ongoing reserves reserves review review project project (seeking (seeking to reduce to reduce the number the number of different of different funds held), fundsan held), amount an amount of £666k of was £666k was transferred transferred from restricted from restricted reserves reserves where the where original the original donor restriction donor restriction allowedallowed to partlytofund partly grants fund to grants territories to territories initially initially expended expended from designated from designated reserves. reserves. The General The General Reserve Reserve represents represents the working the working capital capital required required to fund to thefund day-to-day the day-to-day needs of needs The Salvation of The Salvation Army International Army International Trust, Trust, and is equivalent and is equivalent to 6 months to 6 months expenditure expenditure on headquarters on headquarters administration administration costs. costs.

ANNUAL REPORT

Page 15 Page 15

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018 19.

ANALYSIS OF NET ASSETS BETWEEN FUNDS

Property Assets Other Tangible Fixed Assets Investments Current Assets Current Liabilities Debtors over one year

20.

Unrestricted Funds

Restricted Funds

Unrestricted Funds

Restricted Funds

£000

Total 2018 £000

£000

Total 2017 £000

13,907 718 172,927 35,163 (6,921) 233 216,027

14,779 453 14,891 30,123

28,686 1,171 187,818 35,163 (6,921) 233 246,150

13,918 691 141,412 34,746 (4,778) 249 186,238

15,025 766 20,214 (78) 35,927

28,943 1,457 161,626 34,746 (4,856) 249 222,165

Freehold £000

Long Leasehold £000

Overseas £000

Total £000

29,830 467 145 30,442 (262) 30,180

7,398 345 95 7,838 (60) (87) 7,691

391 391 (165) 226

37,619 812 240 38,671 (225) (349) 38,097

6,895 61 688 7,644 (63) 7,581

1,692 26 153 1,871 (27) (32) 1,812

89 5 94 (76) 18

8,676 87 846 9,609 (103) (95) 9,411

5,879

208

28,686

PROPERTY ASSETS

Cost Balance at 1 April 2017 Additions during the year Transfers Less: Disposals Transfer to Investment Property Balance at 31 March 2018 Depreciation Balance at 1 April 2017 Reinstated on Transfer from Investment Property Charge for the year Eliminated: on Disposals on Transfer to Investment Property Balance at 31 March 2018 Net Book Value at 31 March 2018

22,599

Net Book Value at 31 March 2017

22,935

5,706

302

28,943

The Transfer to Investments relates to tenanted properties that are held for investment purposes.

21.

OTHER TANGIBLE FIXED ASSETS

Cost Balance at 1 April 2017 Additions during the year Less Disposals Balance at 31 March 2018 Depreciation Balance at 1 April 2017 Charge for the year Eliminated on disposals Balance at 31 March 2018 Net Book Value at 31 March 2018 Net Book Value at 31 March 2017

Fit-Outs £000

Office Equipment £000

IT Equipment £000

Vehicles £000

Total £000

5,253 5,253 5,253

1,055 1,055 1,055

501 225 726 (118) 608

59 59 59

6,868 225 7,093 (118) 6,975

4,068 351 4,419 4,419

1,055 1,055 1,055

229 160 389 (118) 271

59 59 59

5,411 511 5,922 (118) 5,804

834 1,185

337

1,171

272

1,457

Page 16 ANNUAL REPORT

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018

THE SALVATION ARMY INTERNATIONAL TRUST

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018

THE SALVATION THE SALVATION ARMY INTERNATIONAL ARMY INTERNATIONAL TRUST TRUST NOTES TO NOTES THE ACCOUNTS TO THE ACCOUNTS FOR THE YEAR FOR ENDED THE YEAR 31 MARCH ENDED 31 2018 MARCH 2018 22.

INVESTMENTS 22. INVESTMENTS

(a) Trust (a) Trust Listed Investments Listed Investments Fixed Interest Fixed Interest UK Government UK Government Overseas Overseas Equities Equities UK Directly Held UK Directly Equities Held Equities Overseas Directly Overseas HeldDirectly Equities Held Equities Investment in Investment Joint Venture in Joint (Note Venture 3) (Note 3) Reliance Bank Reliance Ltd. - Shares Bank Ltd. - Shares Investment Property Investment (see Property Note (e)(see below) Note (e) below) Property - Freehold PropertyReversionary - Freehold Reversionary Interest Interest (see Note (f)(see below) Note (f) below) Bank Deposits Bank Deposits

2018 Cost £000

2018 Cost Market Value £000 £000

Market Value £000

18,329 460

18,32919,130 460 456

6,548 68,528 93,865

£000

2017 Cost Market Value £000 £000

Market Value £000

19,130 456

14,231 517

14,23115,539 517 518

15,539 518

6,548 6,860 68,52881,883 93,865 108,329

6,860 81,883 108,329

5,855 62,185 82,788

5,855 5,671 62,18573,136 82,78894,864

5,671 73,136 94,864

3,825 8,202 2,990

3,825 3,825 8,20245,910 2,990 5,800

3,825 45,910 5,800

3,825 7,980 2,990

3,825 3,825 7,98042,538 2,990 5,800

3,825 42,538 5,800

23,954 132,836

23,95423,954 132,836 187,818

23,954 187,818

14,599 112,182

14,59914,599 112,182 161,626

14,599 161,626

2018 £000 3,900 2,200 4,284 1,070 12,500 23,954

2018 2017 £000 £000 3,900 4,500 2,200 1,350 4,284 4,785 1,070 3,207 12,500 757 23,95414,599

2017 £000 4,500 1,350 4,785 3,207 757 14,599

94,864 41,892 (33,941) 5,514 108,329

94,86473,846 41,89273,105 (33,941) (66,840) 5,51414,753 108,32994,864

73,846 73,105 (66,840) 14,753 94,864

5,514 3,728 (484) (649) 3,168 11,277

5,51414,753 3,728 5,439 (484) (649) 7 3,168 967 11,27721,166

14,753 5,439 7 967 21,166

(b) Bank Deposits (b) Bank Deposits Sterling - Notice Sterling Deposits - Notice (less Deposits than 3 (less months) than 3 months) Sterling - Notice Sterling Deposits - Notice (greater Deposits than(greater 3 months) than 3 months) US Dollars &US Euros Dollars & Euros US Dollars &US Euros Dollars - Notice & Euros Deposits - Notice (greater Deposits than(greater 3 months) than 3 months) Cash held byCash Investment held by Managers Investment Managers (c) Movement (c) in Movement Listed Investments in Listed Investments Market Value Market at 1 April Value 2017 at 1 April 2017 Purchases inPurchases year in year Sales proceeds Sales proceeds Net Gains/(Losses) Net Gains/(Losses) - Listed Investments - Listed Investments Market Value Market at 31 March Value at 2018 31 March 2018 (d) Gains/(Losses) (d) Gains/(Losses) on Investment on Investment Assets Assets Listed Investments Listed Investments (see Note (c)(see above) Note (c) above) Net Surplus Net on revaluation Surplus on of revaluation Investment of Property Investment Property Release of revaluation Release of surplus revaluation on transfer surplusof onInvestment transfer of Property Investment to Fixed Property Assets to Fixed Assets Gain/(Loss) Gain/(Loss) on revaluation on of revaluation US Dollarof Deposits US Dollar Deposits Gain/(Loss) Gain/(Loss) on US held investments on US held investments

2017 Cost

(e) Investment (e) Investment Property Property The investment Theproperty investment represents propertytenanted represents properties tenantedthat properties are heldthat for investment are held forpurposes. investmentDuring purposes. the year During there the year there were additions were to additions investment toproperty investment at aproperty depreciated at a depreciated cost of £368,313 cost of and £368,313 fair value and asfair at 31 value March as at 2018 31 March of 2018 of £2,366,000 giving £2,366,000 rise togiving a revaluation rise to a gain revaluation of £1,997,687. gain of £1,997,687. As part of the Asthree-year part of therevaluation three-year rolling revaluation plan, rolling forty-three plan,investment forty-threeproperties investmenthave properties been valued have been at fairvalued value at asfair at value as at 31 March 2018 31 March resulting 2018 in an resulting additional in an revaluation additional gain revaluation of £1,730,750. gain of £1,730,750. During the year During no properties the year nowere properties sold and were twosold properties and twowere properties transferred wereback transferred to Fixed back Assets. to Fixed Assets. Valuations are Valuations providedare using provided the comparison using the comparison method, withmethod, the majority with the of valuations majority ofbeing valuations completed beingby completed an External by Chartered an ExternalSurveyor Chartered and Surveyor and the rest conducted the restin-house conducted by in-house the Property by the Manager Property who Manager holds a who Bachelor holdsof a Science Bachelordegree of Science which degree included which a valuation includedmodule. a valuation module. (f) Property(f) - Freehold PropertyReversionary - Freehold Reversionary Interest Interest The freeholdThe reversionary freehold reversionary interest represents interestthe represents value of the value freehold of the interest freehold in 99interest QueeninVictoria 99 Queen Street Victoria Street (adjacent to (adjacent the headquarters to the headquarters building) on building) which a long on which leaseahas long been lease granted has been and granted rental income and rental income of £217,756 of per£217,756 annum isper receivable. annum isThe receivable. freeholdThe reversionary freehold reversionary interest has interest been valued has been at thevalued year end at the by year the Trustee, end by the Trustee, based on advice based from on advice an external from consulting an externalsurveyor, consulting at surveyor, £5.80 million at £5.80 (£5.80 million million: (£5.80 2017) million: 2017)

ANNUAL REPORT

THE SALVATION ARMY INTERNATIONAL TRUST

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2018

23. DEBTORS AND PREPAYMENTS Due from Salvation Army territories Funds held in USA Prepayments Other Debtors Amounts falling due after more than one year: Loans due from Salvation Army territories. 24. BANK BALANCES Sterling - Interest-bearing current accounts - Ordinary current accounts US Dollars and Euros

25. CURRENT LIABILITIES Due to Salvation Army territories Salvation Army Employees' Pension Fund (payable March 2018) Accruals

2018 £000

2017 £000

4,977 27,535 945 700

4,968 28,210 348 691

233 34,390

249 34,466

710 161 2 873

229 136 3 368

5,466 1,455 6,921

3,034 530 1,292 4,856

26. OPERATING LEASE COMMITMENTS At the 31 March 2018 The Salvation Army International Trust were committed to making the following payments in respect of operating leases: 2018 2017 £000 £000 Within one year 95 104 Between one to five years 165 260 After five years 260 364 27. CAPITAL COMMITMENTS There were no capital commitments at the year end. 28. RELATED PARTY TRANSACTIONS The Salvation Army International Trust receives contributions for the International Self-Denial Fund and towards International Programme Support and Administration from Salvation Army territories (see Note 2). As part of the programme of work overseas, financial support is provided to The Salvation Army in developing overseas territories in the form of maintenance grants (see Note 10). The International Trust has a 51% interest in Reliance Bank Limited. Related party transactions between the two entities during the financial year include bank interest received, of £84k (£60k : 2017), donation received of £129k (£nil : 2017), services invoiced £11k (£12k: 2017), rent and services paid of £24k (£26k: 2017) and bank charges paid of £13k (£10k: 2017) 29. ULTIMATE CONTROLLING PARTY The charity is controlled by The Salvation Army International Trustee Company (SAITCo), a company limited by guarantee (company registration no. 2538134). SAITCo is appointed as the ordinary Trustee of The Salvation Army International Trust.

ANNUAL REPORT

WORLDWIDE FACTS AND FIGURES

ANNUAL REPORT

THE SALVATION ARMY WORLDWIDE FACTS AND FIGURES AT A GLANCE Countries and territories where SA serves 131 Corps, outposts, societies, new plants and recovery churches 14,527 Goodwill centres 236 Officers 26,943 Active 17,168 Retired 9,775 Auxiliary-captains 230 Envoys/sergeants/non officer personnel, full-time 880 Cadets 1,050 Employees 111,859 Senior soldiers 1,182,100 Adherents 175,811 Junior soldiers 411,327 Corps cadets 43,648 Senior band musicians 27,626 Senior songsters 115,050 Other senior musical group members 111,625 Senior and young people’s local officers 160,861 Women’s Ministries (all groups) members 766,369 League of Mercy – members 189,378 SAMF – members 7,391 Over-60 clubs – members 89,288 Men’s fellowships – members 97,220 Young people’s bands – members 13,949 Young people’s singing companies – members 102,375 Other young people’s music groups – members 152,369 Sunday schools – members 706,325 Junior youth groups (scouts, guides, etc, and clubs) – members 152,405 Senior youth groups – members 160,291 Corps-based community development programmes 1,626 Beneficiaries/clients 634,053 Thrift stores/charity shops (corps/territorial) 1,427 Recycling centres 33

SOCIAL PROGRAMME Residential Hostels for the homeless 461 Capacity 28,780 Emergency lodges 404 Capacity 21,737 Children’s homes 235 Capacity 7,829 Homes for elderly persons 180 Capacity 12,857 Homes for disabled persons 39 Capacity 1,062 Homes for blind persons 8 Capacity 398 Remand and probation homes 68 Capacity 1,190 Mother and baby homes 36 Capacity 908 Training centres for families 69 Capacity 387 Care homes for vulnerable people 11 Capacity 302 Women’s and men’s refuge centres 96 Capacity 2,210 Other residential care homes/hostels 67 Capacity 4,842

ADDICTION DEPENDENCY Non-residential programmes 124 Capacity 2,807 Residential programmes 216 Capacity 16,299 Harbour Light programmes 55 Capacity 2,475 Other services for those with addictions 35 Capacity 860

SERVICES TO THE ARMED FORCES Mobile units for service personnel 11 Chaplains 27 62

ANNUAL REPORT

EDUCATION PROGRAMME Kindergarten/sub primary 937 Primary schools 3,129 Secondary and high schools 404 Colleges and universities 12 Vocational training schools/centres 80 Pupils 616,996 Teachers 20,114 Schools for blind students (included in above totals) 25 Schools for disabled students (included in above totals) 28 Boarding schools (included in above totals) 101 Staff training and development centres 35 Learning centres 8

Source of statistics: The Salvation Army Year Book 2018 (pages 30-31)

SERVICES TO THE COMMUNITY

EMERGENCY DISASTER RESPONSE Disaster rehabilitation schemes 43 Participants 15,651 Refugee programmes – host country 33 Participants 16,053 Refugee rehabilitation programmes 20 Participants 36,964 Other response programmes 221 Participants 34,479

DAY CARE Community centres 556 Capacity 270,507 Early childhood education centres 937 Capacity 55,030 Day centres for the elderly 98 Capacity 16,279 Play groups 439 Capacity 10,258 Day centres for street children 11 Capacity 699 Day nurseries 277 Capacity 17,916 Drop-in centres for youth 343 Capacity 25,991 Other day care centres 106 Capacity 7,482

Prisoners visited 247,794 Prisoners helped on discharge 81,226 Police courts – people helped 247,262 Missing persons – applications 7,707 Number traced 2,670 Night patrol/anti-suicide – number helped 352,932 Employment bureaux – applications 74,110 Initial referrals 72,336 Counselling – people helped 293,464 General relief – people helped 13,428,448 Emergency relief (fire, flood, etc) – people helped 438,298 Emergency mobile units 2,109 Feeding centres 1,399 Restaurants and cafés 52 Thrift stores/charity shops (social) 1,111 Apartments for elderly 924 Capacity 4,110 Hostels for students, workers, etc 48 Capacity 1,760 Land settlements (SA villages, farms etc) Capacity 516 Social Services summer camps 358 Participants 73,262

HEALTH PROGRAMME General hospitals 29 Capacity 2,065 Hospice long term care 11 Capacity 251 Maternity hospitals 32 Capacity 4,471 Other specialist hospitals 62 Capacity 1,828 Specialist clinics 346 Capacity 3,139 General clinics/health centres 115 Capacity 4,753 Mobile clinics/community health posts 194,601 Inpatients 332,734 Outpatients 1,215,962 Doctors/medics 3,984 Non medical staff 2,158 Invalid/convalescent homes 4 Capacity 557 Health education programmes (HIV/Aids, etc) 13 Beneficiaries 1,790,623 Day care programmes 33 ANNUAL REPORT

THE SALVATION ARMY WORLDWIDE FACTS AND FIGURES

ANNUAL REPORT