defeating leprosy transforming lives · transforming lives annual report 2018. blank page....

Defeating LeprosyTransforming Lives

Annual Report2018

Blank Page

Company registration number: SC356041

Charity registration number: SC022411

The Leprosy Mission Scotland(A company limited by guarantee)

Annual Report and Financial Statements

for the Year Ended 31 December 2018

McLay, McAlister & McGibbon LLPChartered Accountants and Statutory Auditors

145 St Vincent StreetGlasgowG2 5JF

The Leprosy Mission Scotland

Contents

Trustees' Report 1 to 4

Statement of Trustees' Responsibilities 5

Independent Auditors' Report 6 to 8

Statement of Financial Activities 9

Balance Sheet 10

Statement of Cash Flows 11

Notes to the Financial Statements 12 to 24


Trustees' Report

Reference and Administrative Details

Chief Executive Officer Miss L Todd

Trustees Mrs M Francis (resigned 2 June 2018)

Rev L Murray

Mr D Simpson

Mr J Twynam-Perkins

Mrs S Hay (resigned 2 June 2018)

Mr R Russell

Miss A Muirden

Prof S Paliwoda

Mrs T Alford

Mr N Lazonby (appointed 1 December 2018)

Secretary Miss L Todd

Principal Office Suite 2 Earlsgate LodgeLivilands LaneStirlingFK8 2BG

Company Registration Number SC356041

Charity Registration Number SC022411

Auditor McLay, McAlister & McGibbon LLPChartered Accountants and Statutory Auditors145 St Vincent StreetGlasgowG2 5JF

The Trustees, who are also the Directors of The Leprosy Mission Scotland (‘TLMS’), have pleasure inpresenting their report and financial statements for the year ended 31st December 2018.

The Finance Committee recommend the attached financial statements to the Trustees for approval.

Structure, governance and management

The day to day leadership of the charity is delegated to the C.E.O. who attends all meetings of the Board ofTrustees but does not vote. Sub committees of the Board, which include a Nominations Committee and FinanceCommittee, operate under the delegated authority of the Board. All Trustees are subject to an inductionprogramme and skills and analysis to determine training and development needs.

Risk Review and Objectives

The Trustees take steps to protect the charitable company from avoidable risks through a process of rigorousscrutiny and review of the company's actual and potential activities and are satisfied that adequate safeguardsare in place to mitigate exposure to major risk.

Page 1


Trustees' Report

Work to achieve the TLMS Strategy for the period 2016-2020 continues and at the end of 2018 a small groupwas appointed to produce a mid-strategy review to submit for The Leprosy Mission International ('TLMI’s')oversight.

The four strategic objectives are:

i. Global partnerships;

ii. Raising resources-money, people and prayers;

iii. Education and advocacy; and

iv. Growth and learning.

TLMS acknowledge with gratitude God’s provision through individual supporters, churches and AreaCommittees. We remain committed to developing and expanding these important and valuable partnerships.

Achievements, Performance and Plans for the Future

Financial Analysis

2018 was a record year with total income nearly doubling to £1,146k (2017: £582k). The majority of thisincrease relates to legacy income which increased to £818k (2017: £215k). Appeals and donations were broadlyin line with the prior year at £265k while Trust income was lower due to a particularly strong prior year.

Total costs excluding charitable donations were £307k (2017: £279k) with the £28k increase mainly relating to a£33k charge recognised on the revaluation of the legacy defined benefit pension scheme. Hence, excluding thisactuarial pension charge, the underlying controllable costs were £5k lower than the prior year demonstratingstrong cost control.

The charitable donations to the implementing projects via TLM International were £423k (2017: £325k). Thesurplus for the year of £415k will be carried forward as part of the charity’s reserves to enable it to invest inseveral new development initiatives including a new fundraising strategy and an office refurbishment.

Reserves Policy

General unrestricted funds represent those which are available for the general purposes of the ongoing operationof the charity to ensure that there is sufficient liquidity to cover significant fluctuations in income andexpenditure. As a minimum, this is set at a level of three months operating expenses to provide working capitalto enable day to day operations, including fundraising appeals, to continue. The reserves policy is kept underregular review.

Total unrestricted funds at the balance sheet date amount to £621,211 which exceeded the minimum levelabove.

Safeguarding Policy

In order to ensure the safety of our staff and partners, this year TLMS worked together with TLM Internationaland the rest of the TLM Global Fellowship to strengthen our safeguarding policy, introducing a Scottish BoardTrustee Safeguarding Lead and the CEO as Designated Safeguarding Officer (DSO). They and the full-timestaff have received safeguarding training. The charity has robust systems in place in case any issues were toarise in the future, both home and away. There were no notifiable events or safeguarding incidents in 2018.

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Trustees' Report

2018 Highlights and Activities

Over 2018 we have been amazed at God’s timely provision for the work of TLMS. We continue to work withour partners in Angola, Bangladesh, India, Myanmar and Nepal. Unfortunately, because of the very difficultsituation in South Sudan, we have had to cease our involvement there.

TLMS continues to be an active member of the Global Fellowship and adds value to the organisation in theways indicated below.

In June 2018, Linda Todd, CEO, led the Member Review of Leprosy Mission Australia and Leprosy MissionNew Zealand.

Linda Todd, and John Twynam-Perkins, Chair, attended the Global Fellowship conference in Addis Ababa inSeptember 2018. At this conference the new Global Strategy, incorporating the Triple Zero vision, waspresented and unanimously affirmed by the Fellowship.

Board and staff continue to play a role in the functioning and development of the Global Fellowship:

• Linda Todd leads the Member Review Member Appointed Working Group (MAWG)

• Robert Russel is a member of the Fundraising MAWG

• Lorna Murray is a member of the Spiritual MAWG

• John Twynam-Perkins is a member of the Strategy MAWG

• Stuart McAra is a member of the Communications Working Group

In November 2018, Linda Todd successfully completed TLMI’s Leadership Development Programme. TheLeadership Programme is a one-year development activity to enhance the capacity and capability of senior staffacross the Fellowship. Linda also continues to be on the Technical Panel of the Leadership DevelopmentProgramme as well as the Board of The Leprosy Mission Trust India.

Staff and Trustees have visited our partners in the UK over 2018:

• Stuart McAra attended TLMNI’s Annual Country Learning.

• Lorna Murray attended TLMNI’s board.

• Tim Reed provides ongoing support for TLMNI database development.

At the September Board we welcomed Richard Turner and Morag Fleming from Alan Clayton Associates wholed a Fundraising Seminar. Also, in attendance were Fiona Davidson and Joanne Briggs from TLMNI and PeterWalker, Head of Fundraising Development at TLMI.

TLMS continues to be a learning organisation, maintaining its Investors in People designation and growingthrough development and learning by participating in the Global Fundraising Conference, TLMS’s AnnualCountry Learning and in the Institute of Fundraising Scotland conference. Through Linda Todd, TLMScontinues to have a presence on the Board of the Scottish International Development Alliance.

The Board continues to strive to be as effective and focussed as possible and is fully cognisant of its goodgovernance responsibilities. The Board wish to warmly acknowledge and thank the CEO and staff for theircontinued enthusiasm and commitment to the vision and work of TLMS throughout 2018. The vital work ofTLMS is only possible because of the support and perseverance of many hundreds of volunteers across Scotlandwho work tirelessly to ensure that their efforts contribute to Leprosy being defeated and lives being restored. Weare grateful too, for the constant prayer support of many across Scotland and further afield who recognise thepower and value of consistent prayer. We acknowledge the goodness and faithfulness of our God in the ongoingwork of TLMS.

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Trustees' Report

Future Plans:

The Global Fellowship has adopted a new vision and approved a new triple zero Strategy to be achieved by2035.

The three elements are

• Zero transmission of Leprosy

• Zero disability of those affected by Leprosy and

• Zero discrimination of those affected by Leprosy

TLMS has fully embraced this ambitious and challenging vision and as part of the mid-strategy review will seekto align our current strategic objectives as closely to the new strategy as possible. We will start working fromthe end of 2019 to develop a new strategy to be implemented from January 2021. This new strategy will be fullyaligned with that of the global Fellowship. TLMS is a donor centric organisation where fundraising flourishes;the donor is central to every activity and enabled to be brand ambassadors. To facilitate this TLMS has investedin and continues to invest in the acquisition of new fundraising skills for staff, board and key volunteers.

During 2019 TLMS will continue to:

•actively partner with TLM Fellowship Members and other relevant organisations with the aim ofdefeating leprosy and transforming lives;

•

generate and utilise income, volunteers and prayer to benefit programmes that cure, care for and restorepeople affected by leprosy, constantly making sure we are as efficient as possible in all our operations.We intend to significantly develop TLMS’s national profile by a major fundraising activity to launch inthe Autumn of 2019;

•engage people and organisations across Scotland with the urgency of defeating leprosy andtransforming lives in the 21st century. We will introduce our volunteers and donor base to the 3 ZerosGlobal Strategy; and

• develop the abilities of strategic partners to contribute effectively to the success of our global mission.

Reappointment of auditorIn accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of McLay,McAlister & McGibbon LLP as auditors of the charity is to be proposed at the forthcoming Annual GeneralMeeting.

Small company provisions

This report has been prepared in accordance with the small companies regime under Companies Act 2006.

The annual report was approved by the trustees of the charity on 1 June 2019 and signed on its behalf by:

.........................................Mr J Twynam-PerkinsTrustee

Page 4


Statement of Trustees' Responsibilities

The trustees (who are also the directors of The Leprosy Mission Scotland for the purposes of company law) areresponsible for preparing the Trustees' Annual Report and the financial statements in accordance with the UnitedKingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and applicable lawand regulations.

Company law requires the trustees to prepare financial statements for each financial year. Under company lawthe trustees must not approve the financial statements unless they are satisfied that they give a true and fair viewof the state of affairs of the charitable company and of its incoming resources and application of resources,including its income and expenditure, for that period. In preparing these financial statements, the trustees arerequired to:

• select suitable accounting policies and apply them consistently;

• observe the methods and principles in the Charities SORP;

• make judgements and estimates that are reasonable and prudent;

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

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

The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain thecharitable company's transactions and disclose with reasonable accuracy at any time the financial position of thecharitable company and enable them to ensure that the financial statements comply with the Companies Act2006, the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland)Regulations 2006 (as amended). They are also responsible for safeguarding the assets of the charitable companyand hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far at the trustees are aware:

• There is no relevant audit information of which the charitable company’s auditor is unaware; and

•The trustees have taken all steps they ought to have taken to make themselves aware of any relevantaudit information and to establish that the auditor is aware of that information.

Approved by the trustees of the charity on 1 June 2019 and signed on its behalf by:


Page 5


Independent Auditor's Report to the Members of The Leprosy Mission Scotland

OpinionWe have audited the financial statements of The Leprosy Mission Scotland (the 'charity') for the year ended 31December 2018, which comprise the Statement of Financial Activities, Balance Sheet, Statement of Cash Flows,and Notes to the Financial Statements, including a summary of significant accounting policies. The financialreporting framework that has been applied in their preparation is United Kingdom Accounting Standards,comprising Charities SORP - FRS 102 'The Financial Reporting Standard applicable in the UK and Republic ofIreland' and applicable law (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the charitable company's trustees, as a body, in accordance with Chapter 3 of Part16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charity'strustees those matters we are required to state to them in an auditor’s report and for no other purpose. To thefullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitablecompany and its trustees as a body, for our audit work, for this report, or for the opinions we have formed.

In our opinion the financial statements:

• give a true and fair view of the state of the charity's company affairs as at 31 December 2018 and of itsincoming resources and application of resources, including its income and expenditure, for the year thenended;

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

• have been prepared in accordance with the requirements of the Companies Act 2006, the Charities andTrustee Investment (Scotland) Act 2005 and regulation 8 of Charities Accounts (Scotland) Regulations 2006.

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

Conclusions relating to going concernWe have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us toreport to you where:

• the trustees use of the going concern basis of accounting in the preparation of the financial statements is notappropriate; or

• the trustees have not disclosed in the financial statements any identified material uncertainties that may castsignificant doubt about the charity’s ability to continue to adopt the going concern basis of accounting for aperiod of at least twelve months from the date when the financial statements are authorised for issue.

Other informationThe trustees are responsible for the other information. The other information comprises the information includedin the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on thefinancial statements does not cover the other information and, except to the extent otherwise explicitly stated inour report, we do not express any form of assurance conclusion thereon.

Page 6



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 orour knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such materialinconsistencies or apparent material misstatements, we are required to determine whether there is a materialmisstatement in the financial statements or a material misstatement of the other information. If, based on thework we have performed, we conclude that there is a material misstatement of this other information, we arerequired to report that fact.

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Trustees' Report for the financial year for which the financial statements areprepared is consistent with the financial statements; and

• the Trustees' Report has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exceptionIn the light of our knowledge and understanding of the charitable company and its environment obtained in thecourse of the audit, we have not identified material misstatements in the Trustees' Report.

We have nothing to report in respect of the following matters where the Companies Act 2006 and the CharitiesAccounts (Scotland) Regulations 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been receivedfrom branches not visited by us; or

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

• certain disclosures of trustees remuneration specified by law are not made; or

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

Responsibilities of trustees

As explained more fully in the Statement of Trustees' Responsibilities [set out on page 5], the trustees areresponsible for the preparation of the financial statements and for being satisfied that they give a true and fairview, and for such internal control as the trustees determine is necessary to enable the preparation of financialstatements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charity's ability to continue asa going concern, disclosing, as applicable, matters related to going concern and using the going concern basis ofaccounting unless the trustees either intend to liquidate the charity or to cease operations, or have no realisticalternative but to do so.

Auditor’s responsibilities for the audit of the financial statementsWe have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland)Act 2005 and under the Companies Act 2006 and report in accordance with regulations mad eunder those Acts.

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

Page 7



As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintainprofessional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud orerror, design and perform audit procedures responsive to those risks, and obtain audit evidence that issufficient and appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of thecharity’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by the trustees.

• Conclude on the appropriateness of the trustees use of the going concern basis of accounting and, based onthe audit evidence obtained, whether a material uncertainty exists related to events or conditions that maycast significant doubt on the charity's ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in thefinancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor’s report. However, future events or conditionsmay cause the charity to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,and whether the financial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within the charity to express an opinion on the financial statements. We are responsible for thedirection, supervision and performance of the charity audit. We remain solely responsible for our auditopinion.

We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control thatwe identify during our audit.

......................................George Macshannon (Senior Statutory Auditor)For and on behalf of McLay, McAlister & McGibbon LLP, Statutory Auditor

145 St Vincent StreetGlasgowG2 5JF

Date:.............................

McLay, McAlister & McGibbon LLP is eligible to act as an auditor in terms of section 1212 of the CompaniesAct 2006.

Page 8


Statement of Financial Activities for the Year Ended 31 December 2018(Including Income and Expenditure Account and Statement of Total Recognised Gains

and Losses)

Note

Unrestrictedfunds

£

Restrictedfunds

£

Total2018

£

Income and Endowments from:Donations and legacies 2 1,024,831 118,027 1,142,858

Other trading activities 3 2,541 - 2,541

Investment income 4 248 - 248

Total Income 1,027,620 118,027 1,145,647

Expenditure on:Raising funds 5 (190,042) - (190,042)

Charitable activities 6 (422,918) (118,027) (540,945)

Total Expenditure (612,960) (118,027) (730,987)

Net income 414,660 - 414,660

Net movement in funds 414,660 - 414,660

Reconciliation of funds

Total funds brought forward 206,551 - 206,551

Total funds carried forward 21 621,211 - 621,211

Note

Unrestrictedfunds

£

Restrictedfunds

£

Total2017

£

Income and Endowments from:

Donations and legacies 2 431,713 146,861 578,574

Other trading activities 3 3,637 - 3,637

Investment income 4 24 - 24

Total Income 435,374 146,861 582,235

Expenditure on:Raising funds 5 (176,566) - (176,566)

Charitable activities 6 (280,401) (146,861) (427,262)

Total Expenditure (456,967) (146,861) (603,828)

Net expenditure (21,593) - (21,593)

Net movement in funds (21,593) - (21,593)

Reconciliation of funds

Total funds brought forward 228,144 - 228,144

Total funds carried forward 21 206,551 - 206,551

All of the charity's activities derive from continuing operations during the above two periods.

The funds breakdown is shown in note 21.

Page 9


(Registration number: SC356041)Balance Sheet as at 31 December 2018

Note2018

£2017

£

Fixed assets

Tangible assets 13 3,868 3,111

Current assets

Stocks 14 2,330 3,033

Debtors 15 38,085 27,403

Cash at bank and in hand 701,358 190,012

741,773 220,448

Creditors: Amounts falling due within one year 16 (89,430) (15,008)

Net current assets 652,343 205,440

Total assets less current liabilities 656,211 208,551

Provisions 19 (35,000) (2,000)

Net assets 621,211 206,551

Funds of the charity:

Unrestricted income funds

Unrestricted funds 621,211 206,551

Total funds 21 621,211 206,551

The accounts have been prepared with the provisions applicable to companies subject to the small companiesregime.

The financial statements on pages 9 to 24 were approved by the trustees, and authorised for issue on 1 June 2019and signed on their behalf by:

.........................................Mr D SimpsonTrustee


Page 10


Statement of Cash Flows for the Year Ended 31 December 2018

Note2018

£2017

£

Cash flows from operating activities

Net income/(expenditure) 414,660 (21,593)

Adjustments to cash flows from non-cash items

Depreciation 8 2,047 1,114

Investment income 4 (248) (24)

416,459 (20,503)

Working capital adjustments

Decrease in stocks 14 703 1,435

(Increase)/decrease in debtors 15 (10,682) 19,357

Increase/(decrease) in creditors 16 74,422 (1,625)

Increase/(decrease) in provisions 19 33,000 (1,000)

Net cash flows from operating activities 513,902 (2,336)

Cash flows from investing activities

Interest receivable and similar income 4 248 24

Purchase of tangible fixed assets 13 (2,804) (2,700)

Net cash flows from investing activities (2,556) (2,676)

Net increase/(decrease) in cash and cash equivalents 511,346 (5,012)

Cash and cash equivalents at 1 January 190,012 195,024

Cash and cash equivalents at 31 December 701,358 190,012

All of the cash flows are derived from continuing operations during the above two periods.

Page 11


Notes to the Financial Statements for the Year Ended 31 December 2018

1 Accounting policies

Summary of significant accounting policies and key accounting estimatesThe principal accounting policies applied in the preparation of these financial statements are set out below.These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of complianceThe financial statements have been prepared in accordance with Accounting and Reporting by Charities:Statement of Recommended Practice applicable to charities preparing their accounts in accordance with theFinancial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January2015) - (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic ofIreland (FRS 102) and the Companies Act 2006.

Basis of preparationThe Leprosy Mission Scotland meets the definition of a public benefit entity under FRS 102. Assets andliabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevantaccounting policy notes.

Going concernThe trustees consider that there are no material uncertainties about the charity's ability to continue as a goingconcern nor any significant areas of uncertainty that affect the carrying value of assets held by the charity.

Income and endowmentsAll income is recognised once the charity has entitlement to the income, it is probable that the income will bereceived and the amount of the income receivable can be measured reliably.

Donations and legacies

Donations are recognised when the charity has been notified in writing of both the amount and settlement date.In the event that a donation is subject to conditions that require a level of performance by the charity before thecharity is entitled to the funds, the income is deferred and not recognised until either those conditions are fullymet, or the fulfilment of those conditions is wholly within the control of the charity and it is probable that theseconditions will be fulfilled in the reporting period.

Legacy gifts are recognised on a case by case basis following the grant of probate when theadministrator/executor for the estate has communicated in writing both the amount and settlement date. In theevent that the gift is in the form of an asset other than cash or a financial asset traded on a recognised stockexchange, recognition is subject to the value of the gift being reliably measurable with a degree of reasonableaccuracy and the title to the asset having been transferred to the charity.

Gift aid

Incoming resources from tax reclaims are included in the statement of financial activities at the same time as thegift to which they relate.

Investment income

Investment income is recognised on a receivable basis.

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ExpenditureAll expenditure is recognised once there is a legal or constructive obligation to that expenditure, it is probablesettlement is required and the amount can be measured reliably. All costs are allocated to the applicableexpenditure heading that aggregate similar costs to that category. Where costs cannot be directly attributed toparticular headings they have been allocated on a basis consistent with the use of resources, with central staffcosts allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset’s use.Other support costs are allocated based on the spread of staff costs.

Raising funds

These are costs incurred in attracting voluntary income and those incurred in trading activities that raise funds.

Charitable activities

Charitable expenditure comprises those costs incurred by the charity in the delivery of its activities and servicesfor its beneficiaries. It includes both costs that can be allocated directly to such activities and those costs of anindirect nature necessary to support them.

Support costsSupport costs include central functions and have been allocated to activity cost categories on a basis consistentwith the use of resources, for example, allocating property costs by floor areas, or per capita, staff costs by thetime spent and other costs by their usage.

Governance costsThese include the costs attributable to the Charity’s compliance with constitutional and statutory requirements,including audit, strategic management and Trustees meetings and reimbursed expenses, if applicable.

TaxationThe charity is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 andtherefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, thecharity is potentially exempt from taxation in respect of income or capital gains received within categoriescovered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of ChargeableGains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.

Tangible fixed assetsTangible fixed assets are stated in the statement of financial position at cost, less any subsequent accumulateddepreciation and subsequent accumulated impairment losses.

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Depreciation and amortisationDepreciation is provided on tangible fixed assets so as to write off the cost or valuation, less any estimatedresidual value, over their expected useful economic life as follows:

Asset class Depreciation method and rateOffice equipment 3 to 5 years straight line basis

StockStock is valued at the lower of cost and estimated selling price less costs to complete and sell, after due regardfor obsolete and slow moving stocks. Cost is determined using the first-in, first-out (FIFO) method.

Trade debtorsTrade debtors are amounts due from customers for merchandise sold or services performed in the ordinarycourse of business.

Trade debtors are recognised initially at the transaction price.

Cash and cash equivalentsCash and cash equivalents comprise cash on hand and call deposits.

ProvisionsProvisions are recognised when the charity has an obligation at the reporting date as a result of a past event, it isprobable that the charity will be required to settle that obligation and a reliable estimate can be made of theamount of the obligation.

Fund structureUnrestricted income funds are general funds that are available for use at the trustees' discretion in furtherance ofthe objectives of the Charity.

Restricted income funds are those donated for use in a particular area or for specific purposes, the use of whichis restricted to that area or purpose.

Pensions and other post retirement obligationsThe Charity participates in the Leprosy Mission Central Pension Scheme, a multi-employer defined benefit plan.The employer is not legally responsible for the plan and does not have sufficient information to use definedbenefit accounting. Accordingly, the plan is accounted for as if it is a defined contribution plan.

The Charity has entered into an agreement with the multi-employer plan that determines how the charity willfund its share of the deficit and accordingly the charity has recognised a liability for the contributions payable inaccordance with the provision of FRS 102.

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2 Income from donations and legacies

Unrestrictedfunds

General£

Restrictedfunds

£

Total2018

£

Total2017

£

Donations and legacies;

Appeals and donations 164,181 101,071 265,252 268,767

Trusts 16,758 16,956 33,714 65,756

Legacies and bequests 818,450 - 818,450 214,506

Gift aid reclaimed 25,442 - 25,442 29,545

1,024,831 118,027 1,142,858 578,574

3 Income from other trading activities

Unrestrictedfunds

General£

Total2018

£

Total2017

£

Trading income;

Other trading income 2,541 2,541 3,637

2,541 2,541 3,637

4 Investment income

Unrestrictedfunds

General£

Total2018

£

Total2017

£

Interest receivable and similar income;

Interest receivable on bank deposits 248 248 24

5 Expenditure on raising funds

a) Costs of generating donations and legacies

Unrestrictedfunds

General£

Total2018

£

Total2017

£

Depreciation, amortisation and other similar costs 1,024 1,024 558

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b) Costs of trading activities

Unrestrictedfunds

General£

Total2018

£

Total2017

£

Costs of goods sold 1,573 1,573 3,991

1,573 1,573 3,991

Direct costs£

Allocatedsupport costs

£

Total2018

£

Total2017

£

Costs of generating donations andlegacies 125,901 62,568 188,469 172,575

Costs of trading activities 1,573 - 1,573 3,991

127,474 62,568 190,042 176,566

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6 Expenditure on charitable activities

Activityundertaken

directly£

Activitysupport costs

£

Total2018

£

Total2017

£

Charitable donations 423,498 - 423,498 325,000

Employment costs 64,469 16,102 80,571 66,399

Printing, posting and stationery 122 4,046 4,168 4,594

Subscriptions and donations 1,140 625 1,765 1,520

Sundry and other costs 12,095 3,499 15,594 11,857

Advertising and promotion 5 - 5 5

Repairs and maintance - 4,352 4,352 5,101

Office expenses 1,171 4,837 6,008 8,307

Auditor's remuneration - 3,960 3,960 3,920

Depreciation 512 512 1,024 556

503,012 37,933 540,945 427,259

£422,918 (2017 - £280,401) of the above expenditure was attributable to unrestricted funds and £118,027 (2017- £146,861) to restricted funds.

Included in the expenditure analysed above, governance costs of £17,235 (2017 - £13,595) which relate directlyto charitable activities. See note 7 for further details.

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7 Analysis of governance and support costs

Support costs allocated to raising funds

Basis ofallocation

Other supportcosts

£

Total2018

£

Total2017

£

Employment costsAllocated onactivity 21,669 21,669 27,248

Repairs and maintenanceAllocated onactivity 6,653 6,653 7,277

Office expensesAllocated onactivity 14,064 14,064 12,970

Printing, posting and stationeryAllocated onactivity 12,137 12,137 8,087

Subscriptions and donationsAllocated onactivity 36 36 36

Sundry and other costsAllocated onactivity 5,550 5,550 11,908

Bank chargesAllocated onactivity 1,947 1,947 1,899

DepreciationAllocated onactivity 512 512 278

62,568 62,568 69,703

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Support costs allocated to charitable activities

Basis ofallocation

Other supportcosts

£

Total2018

£

Total2017

£

Employment costsAllocated onactivity 16,102 16,102 11,973

Repairs and maintenanceAllocated onactivity 4,352 4,352 5,101

Office expensesAllocated onactivity 4,837 4,837 4,912

Printing, posting and stationeryAllocated onactivity 4,046 4,046 2,696

Subscriptions and donationsAllocated onactivity 625 625 533

Sundry and other costsAllocated onactivity 3,489 3,489 3,120

Auditor's remunerationAllocated onactivity 3,960 3,960 3,920

DepreciationAllocated onactivity 1,024 1,024 557

38,435 38,435 32,812

Governance costs

Unrestrictedfunds

General£

Total2018

£

Total2017

£

Staff costs

Wages and salaries 7,924 7,924 5,638

Pension costs 632 632 543

Other staff costs 1,485 1,485 655

Audit fees

Audit of the financial statements 3,960 3,960 3,920

Depreciation, amortisation and other similar costs 512 512 278

Allocated support costs 2,722 2,722 2,561

17,235 17,235 13,595

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8 Net incoming/outgoing resources

Net incoming/(outgoing) resources for the year include:

2018£

2017£

Depreciation of fixed assets 2,048 1,114

9 Trustees remuneration and expenses

During the year the charity made the following transactions with trustees:

£519 (2017: £85) of travel expenses were reimbursed to two trustees during the year.

No trustees, nor any persons connected with them, have received any remuneration from the charity during theyear.

No trustees have received any other benefits from the charity during the year.

10 Staff costs

The aggregate payroll costs were as follows:

2018£

2017£

Staff costs during the year were:

Wages and salaries 146,507 151,067

Social security costs 11,946 8,004

Pension costs 50,572 20,159

Other staff costs 12,765 6,233

221,790 185,463

Pension costs include the additional funding charge of £33,000 (2017: credit of £1,000) as set out in note 18 and19.

The monthly average number of persons (including senior management team) employed by the charity duringthe year expressed as full time equivalents was as follows:

2018No

2017No

Charitable activities 3 3

Fundraising & marketing 2 2

5 5

No employee received emoluments of more than £60,000 during the year.

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11 Auditor's remuneration

2018£

2017£

Audit of the financial statements 3,960 3,920

12 Taxation

The charity is a registered charity and is therefore exempt from taxation.

13 Tangible fixed assets

Office andcomputerequipment

£Total

£

Cost

At 1 January 2018 14,711 14,711

Additions 2,804 2,804

At 31 December 2018 17,515 17,515

Depreciation

At 1 January 2018 11,600 11,600

Charge for the year 2,047 2,047

At 31 December 2018 13,647 13,647

Net book value

At 31 December 2018 3,868 3,868

At 31 December 2017 3,111 3,111

14 Stock

2018£

2017£

Stocks 2,330 3,033

15 Debtors

2018£

2017£

Prepayments 18,070 3,480

Accrued income 5,421 5,445

Other debtors 14,594 18,478

38,085 27,403

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16 Creditors: amounts falling due within one year

2018£

2017£

Other creditors 2,183 -

Accruals 87,247 15,008

89,430 15,008

17 Obligations under leases and hire purchase contracts

Operating lease commitments

Total future minimum lease payments under non-cancellable operating leases are as follows:

2018£

2017£

Other

Between one and five years 4,695 10,328

18 Pensions

Employees of The Leprosy Mission Scotland participate in the Leprosy Mission Central Pension Scheme, amulti employer defined benefit scheme. The employer is not legally responsible for the plan and does not havesufficient information to use defined benefit accounting. Accordingly, the scheme is accounted for as if it is adefined contribution plan.

The various employers are jointly and severably liable for the Scheme’s deficit. At 31 December 2015, the dateof the latest information, the funding liability was £371,000.

The Scheme is currently in deficit and, as set out in the recovery plan the employer agreed to participate in aplan to reduce the deficit. The Leprosy Mission Scotland share of the liability at the end of the year was £35,000(2017: £2,000).

19 Provisions

Pensionscheme

£Total

£

At 1 January 2018 (2,000) (2,000)

Charged to the statement of recognised gains and losses (33,000) (33,000)

At 31 December 2018 (35,000) (35,000)

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20 Charity status

The charity is a private company limited by guarantee and consequently does not have share capital. Each of themembers is liable to contribute an amount not exceeding £10 towards the assets of the charity in the event ofliquidation. At the balance sheet date there were 30 members. The accounts have been prepared on a goingconcern basis and accordingly the contingent possibility of the company receiving those sums is considered bythe trustees to be remote, and is not reflected or disclosed further in the accounts.

In view of the above, the Trustees consider that disclosures regarding liabilities and shareholders' funds are notapplicable.

21 Funds

Balance at 1January 2018

£

Incomingresources

£

Resourcesexpended

£

Balance at 31December

2018£

Unrestricted funds

General 206,551 1,027,620 (612,960) 621,211

Restricted funds - 118,027 (118,027) -

Total funds 206,551 1,145,647 (730,987) 621,211

Balance at 1January 2017

£

Incomingresources

£

Resourcesexpended

£

Balance at 31December

2017£

Unrestricted funds

General 228,144 435,374 (456,967) 206,551

Restricted funds - 146,861 (146,861) -

Total funds 228,144 582,235 (603,828) 206,551

Restricted funds are in respect of specific appeal donations during the year.

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22 Analysis of net assets between funds

Unrestrictedfunds

General£

Total funds£

Tangible fixed assets 3,868 3,868

Current assets 741,773 741,773

Current liabilities (89,430) (89,430)

Provisions (35,000) (35,000)

Total net assets 621,211 621,211

23 Analysis of net funds

At 1 January2018

£Cash flow

£

At 31 December2018

£

Cash at bank and in hand 190,012 511,346 701,358

Net funds 190,012 511,346 701,358

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