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2023-03-31-accounts

Registered number: 03031674 Charity number: 1048752

The Traidcraft Exchange

Annual report

31 March 2023

The Traidcraft Exchange

Contents

Page
Reference and administrative details 1 - 2
Trustees' report 3 - 14
Trustees' responsibilities statement 15
Independent auditor's report to the members of The Traidcraft Exchange 16 - 19
Consolidated statement of financial activities 20
Consolidated balance sheet 21
Charity balance sheet 22
Consolidated statement of cash flows 23
Notes to the financial statements 24 - 54

The Traidcraft Exchange

Reference and administrative details Year ended 31 March 2023

Trustees

Sarah Hughes (resigned 4 January 2023) David Neale (resigned 7 July 2022) Chris Moorhouse (resigned 19 December 2022)

Laurence Sewell David Pain, Chair Judith Kirton-Darling Karimi Kinoti Matt Oliver (appointed 4 February 2022, resigned 21 September 2022) Anita Cheria (appointed 22 October 2023)

Key management personnel

Charlotte Timson – CEO Maveen Pereira – Director of Programmes (left 31 July 2022) Mary Milne - Head of Campaigns and Communications (deceased August 2022) Shahed Ferdous, Country Director - Bangladesh Rakesh Supkar, Business Head - India Amy Wilson – Head of Partnerships and Investment Thomas Royle – COO (left 31 July 2023) Alexander Carnwath – Head of Policy & Advocacy Jon McNaughton- Head of Public Engagement and Communications Filbert Kavia – Africa Director (appointed 3 October 2022) Alice Oyaro – Director of International Programmes, Policy and Partnerships (appointed 5 September 2022)

Company registered number

03031674

Charity registered number

1048752

Registered office

7-15 Pink Lane Newcastle upon Tyne NE1 5DW

Chief executive officer

Charlotte Timson

Independent auditor

UNW LLP Chartered Accountants Citygate St James' Boulevard Newcastle upon Tyne Tyne and Wear NE1 4JE

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The Traidcraft Exchange

Reference and administrative details (continued) Year ended 31 March 2023

Bankers

HSBC Bank Plc 110 Grey Street Newcastle upon Tyne NE1 6JG

Solicitors

Muckle LLP 32 Gallowgate Newcastle upon Tyne NE1 4BF

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The Traidcraft Exchange

Trustees' report Year ended 31 March 2023

The trustees present their annual report together with the audited financial statements of the company for the year 1 April 2022 to 31 March 2023. The trustees confirm that the annual report and financial statements of the company comply with the current statutory requirements, the requirements of the charitable company's governing document and the provisions of the Statement of Recommended Practice (SORP) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019).

The financial statements comprise the accounts of the Traidcraft Exchange and Traidcraft Services India Private Limited, a subsidiary of Traidcraft Exchange. In these accounts “charity” means Traidcraft Exchange or the charitable group comprising The Traidcraft Exchange and Traidcraft Services India Private Limited. During the course of the year, Traidcraft Exchange rebranded to Transform Trade to better communicate who we are and what we do. In this report however, we will continue to use the legal name of Traidcraft Exchange.

Since the group and the charity qualify as small under section 383 of the Companies Act 2006, the group strategic report required of medium and large companies under the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 has been omitted.

Objectives and activities

Our policies and objectives

Trade has the potential to generate wealth, support livelihoods and create lasting solutions to poverty. However most mainstream trade relies on cheap labour and assumes unlimited natural resources. It is not fair or sustainable and urgently needs to be transformed. Traidcraft Exchange challenges injustice in trade and works with poor and vulnerable people to help them get a fair share of the rewards. With the UK government’s renewed focus on trade, and the Sustainable Development Goals calling for businesses to play a role in ending poverty, there has never been a greater opportunity to change trade for good.

Our vision and purpose:

Within an unjust and broken trading system, we stand with the workers, farmers and social entrepreneurs who are transforming trade.

We act as a resource partner, accompanier, influencer, networker and ally. We work at local, national and international levels, focusing on Fashion, Tea and Farming.

We have a vision of trade which values all people and regenerates our fragile earth.

Traidcraft Exchange was founded on Christian principles. Our deep-rooted belief in justice for the poor and the value and dignity of all human beings is grounded in the Christian faith. We work with people of all faiths and none, and our values resonate far beyond the Christian community.

Traidcraft Exchange was set up over thirty-five years ago to work in partnership with Traidcraft plc, demonstrating that alternatives to mainstream trade are possible. It operates for the public benefit through the charity’s following purposes:

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Trustees' report (continued) Year ended 31 March 2023

The Traidcraft Exchange

Achievements and performance

Main achievements of the charity

The impact of the Covid-19 pandemic lingers, especially for producers and workers who we work with. The pandemic-induced economic slowdown, including disruptions in production and supply chains pushed up poverty levels. There was elevated uncertainty, including through exposure to the global price impacts of the war in Ukraine and ongoing political unrest. Inflation has been on the rise, largely due to increases in food and fuel prices. Simultaneously, communities across different geographies grapple with the aftermath of droughts and floods resulting from the effects of climate change, amplifying the urgency of our mission. This situation compounds the plight of people who are vulnerable.

For Traidcraft Exchange, we continued to embed our new strategy and to transform as an organisation in line with our commitment to shifting power and delivered a number of significant milestones. In September 2022 we launched our new brand and are now called Transform Trade. The name enables us to be more effective in reaching out to new supporters and better reflects the boldness of our vision for change.

We’ve continued to pilot new approaches, in particular our participatory grant-making pilot in Kenya, which has evidenced the power of the process to shift mindsets and to enable longer term sustainable change. We have developed a new participatory story-telling approach and continue to integrate grant-making into our longer term programmatic work.

We invested heavily in internal cultural change to mirror our commitment externally to do more to shift power and to become locally-led. The leadership team undertook an in-depth training and coaching programme on inclusive leadership; we set up an Equity, Diversity and Inclusion (EDI) working group and together with staff developed the organisation’s first EDI framework. We have since undertaken a benchmarking survey and are developing annual action plans to progress our commitment to becoming an inclusive organisation.

The second half of the year was however dominated by the collapse of Traidcraft plc, our founder and closest business partner. This had a devasting impact on the charity and it took all our efforts to manage the the impact financially, to respond to confusion amongst our supporter base, to protect assets and the brand name we shared with the plc, and to navigate through our governance structures to secure the best possible future for the charity.

We launched a Producer Fund shortly after the plc went into administration and with the generous support of long term givers, were able to provide grants and accompaniment support to producers who lost their market with Traidcraft and needed to pivot.

The key highlights of 22/23 include:

International development programme

We continued to work towards a closer and more integrated relationship between programmes and policy. Our concerted efforts have coalesced around three sectors – small scale agriculture, garments, and tea. As we transitioned, we ensured that existing projects and other commitments are delivered successfully and with deep impact. Projects that had faced major delays due to the Covid pandemic gained traction, achieving great results. Overall, we made significant progress on implementation while aligning interventions with the organisation’s strategy. The invaluable support of our partners boosted our determination and resilience throughout the year.

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Trustees' report (continued) Year ended 31 March 2023

The Traidcraft Exchange

Achievements and performance (continued)

Small Scale Agriculture portfolio

We sought to build agency and skills among small-scale agriculture collectives and agricultural workers and enhance sustainable agri-food system in-terms of economy, ecology, and equity. We also aim to influence policy and legal frameworks to align with various trade agreements and realization of climate justice. Farmers collectives, especially women, small holder farmers organisations and youth have been strengthened. A range of actions in different programme, policy and advocacy work have resulted in direct positive impacts on people’s lives as well as greater resilience among community members.

South Asia Projects

Empowering Women’s Civil Society Organisations (CSOs) to ensure Good Governance Economic Empowerment Project (WEE) : This project in Bangladesh started in January 2021 but had to be suspended due to national lockdowns and resumed in April 2021. The project is being implemented in rural areas of 5 districts where poverty is high: Faridpur, Jashore and Khulna in the south, and Panchagarh and Thakurgaon in the north. This project is working with 15,000 women through building community institutions of grassroot women to ensure collective voice, developing their capacity to advocate for their rights. It is also sensitising government officials, community leaders and the larger community to promote gender equality and empower women. Integrating women in formal supply chains will also be one of the deliverables of this project. The project picked up momentum during the year, and engagement with women CSOs, and other stakeholders has been achieved.

Pahadiya Sammridhi (Godda, Jharkhand) : Post Covid, the programme implementation has intensified and the project is in its second year. The programme continued building and strengthening 115 women’s group across 90 villages. The women groups have been federated at the cluster level to form 4 cluster level federations. Besides building the voices of women, the programme worked on improving their agricultural practices, conserving their seeds through seed banks, and improving nutrition of the community through vegetable and lentil cultivation. As a result of the project activities, the women are now confident to take on more leadership roles. Altogether, the project is benefitting 3,600 households.

Climate resilient sustainable livelihoods for female small holder farmers, (Birbhum, West Bengal) : The project is funded by the Halcrow Foundation. It aims to organize vulnerable women farmers, improve food security and increase household incomes through livelihood diversification, enhanced water use efficiency, and building resilience through social security safety nets for 2,500 vulnerable families. The project is in its second year of implementation and has been able to form 80 Women Livelihood Committees. During the year, the project continued working with these women groups and enhanced capacities around governance, microsavings and undertaking innovative pilots around good agricultural practices. The project also liaised with various government departments and leveraged financial and in-kind support towards agricultural and water resource development.

Our project, ‘Fighting Forced Labour with Adivasi and Dalit Communities in South Asia’ , which is funded by the European Commission, and covered India and Bangladesh, was phased out in June 2022 after a 6-month no-cost extension. The project had a positive impact on over 4,000 households. The final evaluation and donor reporting is complete.

Africa projects

Participatory Grant Making: As part of its commitment to Shift the Power, Traidcraft Exchange embarked on a journey of piloting the Participatory Grant Making (PGM) approach to learn from the participatory approaches, including participatory decision-making and grant making, to shift power to communities and community organizations to support and deliver their vision. Traidcraft Exchange has been co-creating systems and processes with Kenyan organizations and individuals to help identify relevant producer groups and to deliver positive impact for their members and community. The PGM pilot supported eight (8) farmers groups in Meru and Kitui Counties in Kenya. The groups included partners from the Sustainable Agriculture & Women’s Advancement: Improving Livelihoods and Establishing Women led Enterprises with Smallholder Farmers in Meru County Kenya (SAWA) project that ended in January 2022.

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Trustees' report (continued) Year ended 31 March 2023

The Traidcraft Exchange

Achievements and performance (continued)

Promoting the Inclusion of People with Disabilities in Cocoa, Coffee, and Palm Oil Value Chain s, launched in September 2019. The project focused on providing people with disabilities with sustainable livelihood opportunities in the coffee, cocoa, and palm oil value chains. The project ended in December 2022 and impacted 1,228 people with disabilities and 557 farmers and micro entrepreneurs without disabilities. 57 economic groups have been established and are functioning well – palm oil & coffee processing, groundnuts & vegetables production, cocoa fermentation, food processing and soap making. The evaluation found that project interventions have largely contributed to the promotion of the inclusion of people with disabilities (PWDs) in cocoa, coffee and palm oil value chains in Tanzania. As a result of the collaborative approach employed in the project, the interventions will be integrated into local government planning and budgeting in the target regions.

People, Prosperity, Planet: Reduced poverty and climate resilience for coastal communities in Tanzania : Traidcraft Exchange in partnership with Tanzania Gender and Sustainable Energy Network (TANGSEN) are implementing a three-year project titled, People, Prosperity, Planet Project (PPP) - Reduced poverty and climate resilience for coastal communities in Rufiji and Kisarawe districts in Tanzania, which are vulnerable to climate extremes. Launched in April 2022, the project aims to improve Natural Resource Management (NRM) and livelihoods for 2,200 (1,300 women; 800 men; 100 people with disabilities) vulnerable people through climate resilient practices & market led approaches along 5 value chains. The selected value chains include honey, sunflower, fruit trees, poultry and vegetables.

Agriculture and trade policy

We continued to speak out on the impact on farmers and workers of UK Free Trade Agreements. Input from Traidcraft Exchange was used in the International Trade Committee’s (ITC) inquiry reports on the implications of UK trade policy on the environment, We rapidly coordinated farming organisations in response to threats to disestablish the Groceries code Adjudicator - the regulator that protects agricultural suppliers (including in the south) unfair purchasing practices on the part of the supermarkets that purchase their produce.

Garments portfolio

During the year, we focused on strengthening the women hidden homeworkers in garment supply chain, undertaking research on garment workers and advocating for fairer purchasing practices and workers’ rights in garment supply chains. We also increased our efforts to build relationships with key stakeholders working on the issues of workers in garment supply chains in different geographies as well as other stakeholders including suppliers and thinktanks.

Hidden Homeworkers – Improving Transparency and Traceability to Improve Working Conditions of Homeworkers in Apparel and Footwear Chains started in April 2019 to cover India, Nepal and Pakistan and is now in the final year of its duration. However, the midterm review called for a no-cost extension to deliver the impact we are looking to achieve, and the donor supported this. This extension will help us deepen our impact on homeworkers in the garment and footwear industries. Partners continued training homeworkers on their rights as workers, social security, skill-building, organising, leadership skills, OHS, digital and financial literacy among others. Traidcraft Exchange and its partner are working to engage with brands to improve working conditions for homeworkers. 8,000 collective members were mobilised and progress made to build agency among the informal workers and demand for their right towards decent work and access to social protection measures.

Sadhana - Reimagining women artisans organisation: building livelihoods, resilience and wellbeing project : In January 2023, Traidcraft Exchange established a partnership with Sadhana. Based in Udaipur, Rajasthan, Sadhana aims to employ as many women as possible, many from discriminated against castes and who would otherwise be unable to earn an income. Sadhna’s artisans have been stitching some of the finest traditional hand-embroidered products for three decades. Every Sadhna product is handmade and fair trade certified. Traidcraft Exchange provided grants and partner accompaniment.

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Trustees' report (continued) Year ended 31 March 2023

The Traidcraft Exchange

Achievements and performance (continued)

Participatory Photography project : In line with our commitment to shift the power, the participatory photography was initiated during the year. At the start of 2023, members of a women’s garment collective in Tirupur, India came together to learn photography skills from a professional photojournalist. They were then given cameras and spent three months documenting their lives and experiences as homeworkers in the garment supply chain. The photos expose both the challenges and benefits of homeworking, employees who are an integral part of the fashion supply chain are nonetheless often denied fundamental rights including minimum wage, sick pay and maternity leave.

Calling for a Fashion Watchdog

Our garments work continued to build on the foundations of previous years, with a lot of positive activity to build support among MPs for a fashion watchdog Garment Trading Adjudicator (GTA) to regulate the industry. This included successful parliamentary events, and a cross-party letter to the Department for Business, Energy and Industrial Strategy (BEIS) which resulted in a government commitment to a ministerial meeting on the topic. The support from parliamentarians has been encouraging. The campaign on GTA has gained more momentum and mobilisation of parliamentarians to support this has resulted in 51+ parliamentarians pledging for it. Further engagements are expected to deepen the movement towards establishing a fashion watchdog, ensuring companies act and are compliant in ensuring the rights of the garment workers. We have made good progress on developing relationships with small businesses and suppliers who we believe will be influential groups in championing a Fashion Watchdog, while consolidating relationships with MPs.

We also continued building the evidence base to support our calls for GTA. In collaboration with the University of Aberdeen, we finalised and launched a research report on Readymade Garments (RMG) in Bangladesh. The survey found that major brands are paying Bangladeshi factories below the cost of production. This was helpful in engaging Government and companies to realise the rights and entitlements of workers working in the garment sector, including the Organisation for Economic Co-operation and Development (OECD) Forum on Due Diligence in the garment sector in the UK.

Tea portfolio

In the last year, we carried out a robust analysis on the Small Tea Growers (STGs) and continued to strengthen the tea workers groups and advocate for fairer purchasing practices and workers’ rights in tea supply chains.

Building Voices and Creating Choices for Tea worker communities (in North Bengal and Assam) : The project’s goal is to reduce socio economic vulnerability and to improve the livelihoods and resilience of 9,000 tea worker communities in 5 districts of North Bengal and Assam. The work will be undertaken across 35 gardens of which 25 gardens are in North Bengal and 10 gardens in Assam. This is a project funded by the Oak Foundation. The project was initiated in 2021-22, so the first year has been completed. The project is being implemented in partnership with two local organisations and besides the partnership agreements and team being recruited, the set of the project has been completed. Work is ongoing to map relevant government institutions that could provide services and resources and preparations have been completed to begin the baseline study.

Scoping on Small Tea Growers (STGs) : A process of deepening the understanding on the issues of small tea growers (STGs) in Bangladesh, India and East Africa was carried out through meetings with STGs and various stakeholders in different geographies. In East Africa, an in-depth scoping research was carried out in Kenya and Tanzania and the reports will inform the development of Tea programme in the region. The process also helped to identify effective partnerships. In Tanzania, the team is exploring engagement with a social enterprise that works with a Specialty Tea Company owned by tea smallholder farmers.

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Trustees' report (continued) Year ended 31 March 2023

The Traidcraft Exchange

Achievements and performance (continued)

Broader Policy and Advocacy work

Traidcraft Exchange’s policy and campaigning work seeks wider impact by tackling systemic issues that affect poor and vulnerable people in international trade, and by holding UK businesses and governments to account. The last year played out in the context of significant political change both in the UK, following the replacement of the Prime Minister, and internationally, with growing restrictions on civil society space. We found that the policy landscape had changed in several areas since we set our annual plan. We continued to adapt our advocacy work in line with Traidcraft Exchange’s new strategic approach, to ensure a greater emphasis on partnership and advocacy in solidarity with organisations in the global South. In addition to work under the different portfolios above, we were engaged in broader policy and advocacy.

Advocating for Climate and People-Friendly UK Trade Policies

We have continued to speak out about the impact of the UK’s approach to trade on workers and farmers in the global South. We have also consistently called for the UK to deliver a trade strategy that supports progress towards UK objectives on climate change, through evidence to an ITC enquiry, regular engagement with UK civil servants, and comments in the media on the topic.

Mandatory Human Rights and Environmental Due Diligence

We continued to build support for a UK Business, Human Rights, Environment Act (BHREA) to tackle environmental and human rights abuses associated with business. Following our submission (written jointly with the Corporate Justice Coalition) and extensive follow-up advocacy to the Law Commission's Corporate Criminal Liability enquiry the previous year, our request that legislation should cover the failure to prevent human rights abuses was included in the Law Commission’s options paper in June 2022.

Traidcraft Services India Private Limited (TSIPL)

Covid and economic slowdown tested the resilience of the India company. However, last year, the company maintained a healthy pipeline of assignments, added new clients and received positive feedback from the clients. Overall, the revenues were positive and came from diversified clients, demonstrating reduced dependence on Traidcraft Exchange. During the year, the company realigned its strategy as per the new Traidcraft Exchange strategy and drafted a strategic vision that integrates well with the vision and values. We carried out advisory assignments that were well aligned with our new strategic priorities. For example, we worked with IDH, the Sustainable Trade Initiative to evaluate their programme with women Tea workers on Gender Based Violence and Discrimination.

Our work generated important learnings for the team. It also helped increase our impact through engagement with a larger number of stakeholders with similar goals to influence and strengthen the supply chains for the benefit of workers. Value chain mapping work for other clients generated learnings on market opportunity for the team, which was leveraged to support our Pahadiya project farmers. Our engagement with multiple stakeholders in the garments sector increased our collaboration with these stakeholders in our programmatic interventions, including under the Hidden Homeworkers project. The team also focussed on building their own skills through organising and attending various capacity building programmes. This year also marked three continuous years for our advisory arm (TSIPL) to have a profitable operation.

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Trustees' report (continued) Year ended 31 March 2023

The Traidcraft Exchange

Achievements and performance (continued)

Raising funds

Public Fundraising and Legacies:

Overall, we raised around £1.4m through Public Fundraising and Legacies in 22/23 against a target of £1.75m. This was forecast to be down on the previous year (£2.1m) without the boosting affects of a UK aid match appeal and going into a year where we would spend a lot of energy going through an organisational rebrand.

Along the way though we met a series of challenges which ultimately resulted in lower income. Despite plenty of setbacks, we also saw some key channels in a growth position and other highlights throughout the year.

Challenges

Our long-term partner, Traidcraft Plc had an extremely difficult year which eventually led to their closure in January 2023. This was an unexpected shock and essentially meant that around £250k of unrestricted income was either lost or under threat across a number of channels. We did manage to recover some of this by finding new partnerships and stockists for our fundraising products but this situation certainly contributed to the underperformance.

Through this time of closure, some supporters presumed we had also closed and moved to cancel monthly gifts. We had to move quickly to limit the damage and have successfully recruited and re-recruited committed givers to help fill the gap.

On top of this we also had a down year in legacy income. This is an inconsistent source of income and following our biggest ever legacy income year in 21/22 we saw significantly less income arrive than the average year. Ultimately this put us £118k below our expectations and more than £400k below the previous year's legacy income total.

Highlights

Committed giving has been a big success story of the past few years and 22/23 saw us outpace our growth targets and secure £420K against a target of £405K. This is brilliant news not only for this year but for future years too as supporters continue their giving into the future. Gifts from major donors also continue to grow as stronger relationships are cultivated with loyal donors to support both restricted projects and our Giving Tuesday matching appeal.

Another success was in maintaining a fairly consistent level of public support despite going through a rebrand which included changing our trading name. Our Christmas appeal in late 2022 raised around £155k compared to £150k in the year before. We were delighted to see a slight improvement despite the natural uncertainty that a name change can create. We spent a lot of energy trying to bring supporters with us on this journey and it was pleasing to see signs that this was successful.

Other income lines that performed better than targets included gifts from fair trade stalls and shops, inmemorium giving and recycling donations.

Grants from institutional sources

We successfully won a European Commission (EC) contract for the SWABOL project in Bangladesh at £915,000 over 3.5 years, £215,000 in funding for our Fashion Watchdog work in policy and £115,000 was banked to support match and other smaller projects. The £115,000 from trusts and foundations was below prior years by an average of £35,000 due to staff shortages and sickness for extended periods during the year.

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Trustees' report (continued) Year ended 31 March 2023

The Traidcraft Exchange

Achievements and performance (continued)

There was a gap on institutional funding applications as the decision was taken to pause further applications during 21-22. In 22-23 the organisation was in a process of planning around new models of work – which limited scope to design new programmes of work fit for institutional funding.

Financial review

Traidcraft Exchange’s board approved a deficit budget of £442,039 for 22/23. This reflected the strong unrestricted reserves position of £1,715,991 as at 31 March 2022, which had been built up through surpluses in the previous two years. It also supported Traidcraft Exchange’s shift in strategy and an increasing in portfolio funding to support that.

In reality, challenges in the fundraising environment and the problems experienced by Traidcraft plc led to Traidcraft Exchange recording an unrestricted deficit of £1,078,249, which was over £600,000 worse than had been budgeted.

This has reduced Traidcraft Exchange’s general unrestricted reserves to just above the target level, (see the section on reserves policy below).

Performance compared to previous years:

Total income for the charity fell from £4.2m in 21/22 to £3.2m in 22/23. This decrease of £1m was largely driven by a fall of £445k in legacies from £576,388 in 21/22 to £131,920 in 22/23. Legacies are hard to budget for accurately. Donations also fell by £334k from £1,601,499 in 21/22 to £1,267,691 in 22/23, mainly because of the challenges experienced by Traidcraft plc.

While income for charitable activities from institutional grants fell by £213k, the unrestricted element of this only fell by about £50k so this had less of an impact on the unrestricted deficit.

Risk management

The Board is responsible for Traidcraft Exchange’s system of internal control and for reviewing its effectiveness. Such a system is designed to manage, but not eliminate, the risk of failure to achieve our objectives. Responsibility for managing the risks has been allocated within the executive team and, where appropriate, actions needed have been built into departmental action plans.

Management, on behalf of the Board, ensures the operation and effectiveness of internal controls by the following means:

The key financial risks that Traidcraft Exchange faces are around our less predictable income streams, such as legacies and public appeals. The situation around Traidcracft plc has been a significant source of financial risk in 22/23 and 23/24, but since Traidcraft plc closed in January 2023, the liabilities are known and there will be less risk in future in this regard.

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The Traidcraft Exchange

Trustees' report (continued) Year ended 31 March 2023

Another key risk is the challenges in finding match funding in relation to some of Traidcraft Exchange’s institutional grants. This is mitigated by calculating a specific part of the minimum reserves target that needs to held in respect of any funds that are yet to be raised.

The final area of risk is related to the shift in Traidcraft Exhange’s strategy and finding new sources of more flexible funding to support that shift. This creates a financial risk as well as a risk that we might not fully achieve our objectives. This is being mitigated by management adopting more adaptive approaches to planning and budgeting in 24/25 and beyond.

Reserves policy

The trustees consider it prudent that Traidcraft Exchange should seek to maintain unrestricted reserves at a level sufficient:

When calculating unrestricted reserves, fixed assets and investments are excluded due to their illiquid nature.

The policy and target range of reserves are monitored and reviewed annually during the budget approval process to reflect risks and changes in income, financial obligations and expenditure. The target range for general unrestricted reserves, excluding pension reserves, set for 22/23 was £617,819 - £910,005 (21/22 £591,000 - £842,000). At 31 March 2023, unrestricted reserves (excluding fixed assets and investments) stood at £622,999, which is £5k above the minimum target level.

Our reserves are now much closer to the bottom of the target range than they have been in recent years. It is likely that reserves will fall below our minimum target in financial year 23/24 by about £130k as a further deficit is anticipated in 23/24. However, the trustees have approved a surplus budget for the 24/25 financial year and are confident that unrestricted reserves will be sufficient to cover the financial risks the charity faces in 24/25 and beyond.

Going concern

The trustees have a reasonable expectation that Traidcraft Exchange has adequate resources to continue in operational existence for the foreseeable future. They have paid particular attention to the likely impact of a further unrestricted deficit in 24. Management implemented significant cost savings, including making several staff redundant, at the end of 2023. This has enabled the trustees to approve a budget for 24/25, which should generate an unrestricted surplus.

In view of the deficit in 22/23 and predicted deficit for 23/24, the trustees have therefore taken particular care in reviewing the going concern basis. When reviewing their decision, they have taken the following factors into account:

Traidcraft Exchange prepares an annual cashflow forecast as part of its budgeting process. The cashflow forecast is monitored on a monthly basis. Traidcraft Exchange has not encountered any difficulty in paying its trade creditors within agreed payment terms. In general, most of our institutional donors provide their grants in advance of spending. Cashflow projections for the year following approval of these financial statements show that the charity will have adequate funds to meet its liabilities as they fall due.

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The Traidcraft Exchange

Trustees' report (continued) Year ended 31 March 2023

As at 31 March 2023, Traidcraft Exchange has unrestricted reserves (excluding fixed asset and investments), of £637,742 compared to our target minimum reserve level of £617,819. The trustees feel the charity has adequate reserves at the year end to support its ongoing operations and this view is supported by the cash flow projections.

Traidcraft Exchange has set an achievable budget for the year 24/25 which should return a modest unrestricted surplus.

For these reasons, the trustees continue to adopt the going concern basis in preparing the financial statements.

Plans for future periods

Since March 2023 we have continued to engage with the administrators and the Traidcraft Foundation to navigate the winding up of Traidcraft plc. We successfully bid for and secured the license to the Traidcraft brand and have been developing a portfolio of business partnerships that deliver impact and continue the legacy of Traidcraft.

With the loss of ongoing income we incurred due to Traidcraft’s collapse, we have taken action to downsize the charity and to reduce staffing in line with reduced income going forwards and to ensure the charity continues on a sustainable footing in future.

We continue to move forward with the strategy and having learnt from pilot initiatives are able to commit more fully to shifting our approach to become a participatory grant-maker, facilitator and advocate. We continue to seek new funding relationships with donors who align to our values and are committed to providing flexible funding to support partners’ agendas and needs.

As Traidcraft plc no longer exists, we have reviewed the role of the Traidcraft Foundation and are in the process of merging the Foundation into Traidcraft Exchange. This will simplify the governance structure and enable greater accountability to the charity’s primary stakeholders.

Structure, governance and management

Constitution

Traidcraft Exchange is a company limited by guarantee governed by its Memorandum and Articles of Association (updated 2011). It is registered as a charity with the Charity Commission.

Organisational structure

HIstorically, Traidcraft worked through three closely linked entities, sharing the same values and mission; Traidcraft plc, Traidcraft Exchange and Traidcraft Foundation. Traidcraft Plc and Traidcraft Exchange worked in close partnership. The Foundation’s mandate is to protect the Christian identity of Traidcraft.

With the collapse of Traidcraft plc, we are merging the Traidcraft Foundation into Traidcraft Exchange.

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Trustees' report (continued) Year ended 31 March 2023

The Traidcraft Exchange

Structure, governance and management (continued)

Board structure

Traidcraft Exchange’s Board is responsible for approving Traidcraft Exchange’s policy and strategy. It meets regularly during the year and has a schedule of matters specifically reserved to it for decision. The management team supplies the Board with appropriate and timely information and the trustees are free to seek any further information they consider necessary. All trustees have access to advice from the Company Secretary and independent professionals at the charity's expense. Training is available for new trustees and other trustees as necessary.

All trustees are subject to re-election at least every three years, except the Foundation Trustee (who is appointed by the Traidcraft Foundation for a three-year term).

This year the board of trustees has changed signficantly with a number of trustees who were also non-Executive directors of Traidcraft stepping down, due to conflicts of interest. David Neale, Chris Moorhouse and Sarah Hughes all stepped down for this reason. When Matt Oliver left the Traidcraft CEO position he also stepped down. The board appointed one new trustee, Anita Cheria.

The Chief Executive is appointed by the trustees to manage the day-to-day operations of the charity with the assistance of the other senior management. To facilitate effective operations, the Chief Executive has delegated authority for operational matters.

Trustees in office during the year are listed on page 1.

Governance developments in the year

The board continues to seek to diversify, internationalise and become more inclusive. It is seeking to evolve its structures of governance to better reflect the vision and values of the organisation and will continue on this journey into next year.

Appointment and training of Trustees

Traidcraft Exchange has a Nominations Committee which identifies and proposes candidates for the Board of Traidcraft Exchange. Recruitment and selection of new Board members is by a combination of external advertisement and networking. Candidates are asked to provide written expression of interest and, if shortlisted, are interviewed by members of the Nominations Committee. Following recommendation by the Nominations Committee and approval by the Traidcraft Foundation, successful candidates are co-opted onto the Board.

Board members receive letters of appointment, including a job description and statement of expectations. Induction packs are provided to new trustees and induction meetings are arranged to cover key responsibilities, learn about the work of the organisation and meet key employees.

13

Trustees' report (continued) Year ended 31 March 2023

The Traidcraft Exchange

Structure, governance and management (continued)

Pay policy

The Remuneration Committee, made up of three trustees, has responsibility for making recommendations to the Board on Traidcraft Exchange’s general policy on CEO remuneration and determines the specific package for the CEO. It carries out these aspects of Traidcraft Exchange’s remuneration policy on behalf of the Board. As well as considering conditions in Traidcraft Exchange as a whole, it uses external data to set the context for its deliberations and takes into account Traidcraft Exchange’s position relative to other organisations and is aware of what these are paying. The policy of the Board is to provide remuneration packages that will attract, motivate and retain a CEO of the calibre necessary to maintain Traidcraft Exchange’s position and to ensure that it meets its various objectives.

Trustees of Traidcraft Exchange receive no payment in relation to their role as Trustees of the charity. Travelling and other expenses are reimbursed. No trustees received remuneration from the charity during the year.

For all other staff, including senior staff, salary setting is determined by the Senior Management Team, following input from HR. When setting appropriate salaries for individual roles, internal relativities and external data is considered in order to make the reward as fair as possible in the Traidcraft Exchange context. Traidcraft Exchange implements a reward approach with defined salary bands and ranges. External benchmarking was conducted to inform how Traidcraft Exchange salaries compare against external market rates. Benchmarking information was then used to establish transparent ‘levels’ for pay scales, and to allocate roles to these scales.

Disclosure of information to auditor

Each of the persons who are trustees at the time when this trustees' report is approved has confirmed that:

Auditor

Following a tender process, the tender committee recommended the appointment of Haines Watts as auditors for the 2024 financial year. This recommendation will be formally proposed at the next AGM

Approved by order of the members of the board of trustees on 27 March 2024 and signed on their behalf by:

David Pain Chair

14

The Traidcraft Exchange

Statement of trustees' responsibilities Year ended 31 March 2023

The trustees (who are also the directors of the charity for the purposes of company law) are responsible for preparing the trustees' report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the trustees to prepare financial statements for each financial . Under company law, the trustees 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 group and the charity and of their incoming resources and application of resources, including their income and expenditure, for that period. In preparing these financial statements, the trustees are required to:

The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the group and the charity's transactions and disclose with reasonable accuracy at any time the financial position of the group and the charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Approved by order of the members of the board of trustees on 27 March 2024 and signed on its behalf by:

David Pain Chair

15

Independent auditor's report to the members of The Traidcraft Exchange

Opinion

We have audited the financial statements of The Traidcraft Exchange (the 'parent charitable company') and its subsidiaries (the 'group') for the year ended 31 March 2023 which comprise the consolidated statement of financial activities, the consolidated balance sheet, the charity balance sheet, the consolidated statement of cash flows and the related notes, 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:

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or the parent charitable company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

16

Independent auditor's report to the members of The Traidcraft Exchange (continued)

Other information

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

We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Charities (Accounts and Reports) Regulations 2008 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the trustees' responsibilities statement, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

17

Independent auditor's report to the members of The Traidcraft Exchange (continued)

Auditor's responsibilities for the audit of the financial statements

We have been appointed as auditor under section 151 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.

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

We identified areas of law and regulations that could reasonably be expected to have a material effect on the financial statements from our general and sector experience and through discussions with the directors and other management (as required by Auditing Standards) and from inspection of the company's legal correspondence and we discussed with the directors and other management the policies and procedures in place regarding compliance with the laws and regulations. We communicated identified laws and regulations throughout our audit team and remained alert to any indications of non-compliance throughout the audit.

Firstly, the company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

Secondly, the company is subject to many other laws and regulations where the consequences of noncompliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect; health and safety, employment law, data protection, environmental law and certain aspects of company legislation, recognising the nature of the company's activities. Auditing Standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Through these procedures we did not become aware of any actual or suspected non-compliance material to the financial statements.

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

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

18

Independent auditor's report to the members of The Traidcraft Exchange (continued)

Use of our report

This report is made solely to the charitable company's trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charitable company's trustees those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and its members, as a body, for our audit work, for this report, or for the opinions we have formed.

Anne Hallowell BsC FCA DChA (Senior Statutory Auditor) for and on behalf of UNW LLP, Statutory Auditor Chartered Accountants Newcastle upon Tyne

27 March 2024

19

The Traidcraft Exchange

Consolidated statement of financial activities (incorporating income and expenditure account) Year ended 31 March 2023

Note
Income from:
Donations and legacies
4
Charitable activities
5
Total income
Expenditure on:
Raising funds:
6
Voluntary income
Institutional sources
Charitable activities:
7
Development programmes
Policy and campaigning
Total expenditure
Net (expenditure)/income
Transfers between funds
19
Total transfers
Other recognised gains/(losses):
Unrealised (losses)/gains
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Net movement in funds
Total funds carried forward		 Unrestricted
funds
2023
£
1,423,883
101,820
1,525,703
726,603
215,963
946,455
676,970
2,565,991
(1,040,288)
(22,401)
(22,401)
(15,560)
(1,078,249)
1,715,991
(1,078,249)
637,742		 Restricted
funds
2023
£
-
1,697,949
1,697,949
-
-
1,767,300
21,039
1,788,339
(90,390)
22,401
22,401
-
(67,989)
352,881
(67,989)
284,892		 Total
funds
2023
£
1,423,883
1,799,769
3,223,652
726,603
215,963
2,713,755
698,009
4,354,330
(1,130,678)
-
-
(15,560)
(1,146,238)
2,068,872
(1,146,238)
922,634		 Total
funds
2022
£
2,251,287
1,992,485
4,243,772
586,778
166,373
2,285,146
503,940
3,542,237
701,535
-
-
9,855
711,390
1,357,482
711,390
2,068,872

The Statement of financial activities includes all gains and losses recognised in the year.

The notes on pages 24 to 54 form part of these financial statements.

20

The Traidcraft Exchange

Consolidated balance sheet At 31 March 2023

Note
Fixed assets
Intangible assets
12
Tangible assets
13
Current assets
Debtors
15
Cash at bank and in hand
Creditors: amounts falling due within one
year
16
Net current assets
Total net assets
Charity funds
Restricted funds
19
Restricted funds
19
Unrestricted funds
19
Total funds		 381,755
1,616,624
1,998,379
(1,090,488)
284,892		 2023
£
-
14,743
14,743
907,891
922,634
284,892
637,742
922,634		 395,124
2,741,543
3,136,667
(1,088,430)
352,881		 2022
£
4,342
16,293
20,635
2,048,237
2,068,872
352,881
1,715,991
2,068,872

The trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.

The financial statements were approved and authorised for issue by the trustees on 27 March 2024 and signed on their behalf by:

David Pain

Chair

Company registered number: 03031674

The notes on pages 24 to 54 form part of these financial statements.

21

The Traidcraft Exchange

Balance sheet At 31 March 2023

Note
Fixed assets
Intangible assets
12
Tangible assets
13
Investments
14
Current assets
Debtors
15
Cash at bank and in hand
Creditors: amounts falling due within one
year
16
Net current assets
Total net assets
Charity funds
Restricted funds:
Restricted funds
19
Total restricted funds
19
Unrestricted funds
19
Total funds		 381,222
1,612,537
1,993,759
(1,071,715)
284,892		 2023
£
-
13,856
1,000
14,856
922,044
936,900
284,892
652,008
936,900		 395,124
2,731,283
3,126,407
(1,077,300)
352,881		 2022
£
4,342
14,423
1,000
19,765
2,049,107
2,068,872
352,881
1,715,991
2,068,872

The trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.

The financial statements were approved and authorised for issue by the trustees on 27 March 2024 and signed on their behalf by:

David Pain Chair

The notes on pages 24 to 54 form part of these financial statements.

22

The Traidcraft Exchange

Consolidated statement of cash flows Year ended 31 March 2023

Note
Cash flows from operating activities
Net cash used in operating activities
21
Cash flows from investing activities
Purchase of tangible fixed assets
Interest received
Net cash used in investing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Change in cash and cash equivalents due to exchange rate movements
Cash and cash equivalents at the end of the year
22
The notes on pages 24 to 54 form part of these financial statements		 2023
£
(1,100,938)
(11,159)
2,738
(8,421)
(1,109,359)
2,741,543
(15,560)
1,616,624		 2022
£
482,675
(2,255)
1,880
(375)
482,300
2,249,388
9,855
2,741,543

23

Notes to the financial statements Year ended 31 March 2023

The Traidcraft Exchange

1. General information

The Traidcraft Exchange ('the company') is a private company limited by guarantee, incorporated and domiciled in the United Kingdom. The address of the registered office is given in the reference and administration page of these financial statements. The members of the company are the trustees named on page 1. In the event of the company being wound up, the liability in respect of the guarantee is limited to £1 per member of the company.

2. Accounting policies

2.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with the Charities SORP (FRS 102) - Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

The Traidcraft Exchange meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.

The principal accounting policies of the charity have remained unchanged from the previous year. The accounts are presented in pounds sterling and rounded to the nearest £.

The consolidated statement of financial activities (SOFA) and consolidated balance sheet consolidate the financial statements of the charity and its subsidiary undertaking. The results of the subsidiary are consolidated on a line by line basis.

The charity has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own statement of financial activities in these financial statements.

2.2 Going concern

After making enquiries, the Board of Trustees has a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Please refer to the Trustees' Report for further details.

2.3 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes.

Designated funds comprise unrestricted funds that have been set aside at the discretion of the trustees for a particular purpose. The aim and use of each designated fund is set out in the notes to the financial statements.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the charity for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

24

Notes to the financial statements Year ended 31 March 2023

The Traidcraft Exchange

2. Accounting policies (continued)

2.4 Income

All incoming resources becoming available to the charity during the year are recognised in the Statement of Financial Activities. Income is deferred where incoming resources are received in advance of the service being provided. No incoming resources are stated net of expenditure.

Institutional grants, where related to performance and specific deliverables, are accounted for as the Charity earns the right to consideration by its performance. Where income is received in advance of performance its recognition is deferred and included in creditors. Where entitlement occurs before income is received the income is accrued and included in debtors.

Government grants are recognised when the charity has entitlement to the income, receipt is probable and the amount can be measured reliably.

Listed shares donated during the year are included in donations and valued at estimated market value. Unlisted shares donated during the year are included in donations and valued at estimated market value.

Legacies are recognised as income in the accounting period, once the Charity has been informed of the amount of a bequest and it can be measured with sufficient reliability.

Investment income is recognised on a receivable basis.

The total incoming resources for the year and the movement in Restricted Funds are detailed in the Statement of Financial Activities.

2.5 Expenditure

Expenditure is brought into the financial statements as it is incurred.

Costs of generating funds are those incurred in seeking voluntary income and grants from institutional sources and do not include the costs of disseminating information in support of the charitable activities. These costs include the salaries, direct expenditure and overhead costs of the staff who promote fundraising.

Costs of charitable activities represent the salaries and overhead costs of staff directly working in International Programmes and the Policy Unit together with expenditure directly attributable to these activities.

Support costs represent the costs incurred by finance, IT and human resources attributable to the management of the Charity's assets and organisational administration. Overheads (including management and administration costs) and other non-specific expenditure are allocated between charitable activities and generating funds in proportion to the number of staff employed within each area.

Irrecoverable VAT is charged as a cost to the Statement of Financial Activities.

25

Notes to the financial statements Year ended 31 March 2023

The Traidcraft Exchange

2. Accounting policies (continued)

2.6 Foreign currencies

Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities in foreign currencies are retranslated at the rates of exchange ruling at the balance sheet date.

2.7 Intangible assets and amortisation

Intangible assets costing £500 or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Amortisation is provided on intangible assets at rates calculated to write off the cost of each asset on a straight-line basis over its expected useful life.

The estimated useful lives are as follows:

Amortisation is provided on the following basis:

2.8 Tangible fixed assets and depreciation

Tangible fixed assets costing £500 or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

Tangible fixed assets are initially recognised at cost. After recognition, under the cost model, tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. All costs incurred to bring a tangible fixed asset into its intended working condition should be included in the measurement of cost.

Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Office equipment - 10% of cost per annum Computer equipment - 25% of cost per annum

2.9 Investments

Unlisted investments are valued by the trustees as their best estimate of market value at the yearend.

Investments in subsidiaries are valued at cost less provision for impairment. 2.10 Debtors

Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid.

26

Notes to the financial statements Year ended 31 March 2023

The Traidcraft Exchange

2. Accounting policies (continued)

2.11 Cash at bank and in hand

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

2.12 Liabilities and provisions

Liabilities are recognised when there is an obligation at the balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably.

Liabilities are recognised at the amount that the charity anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide.

Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised within interest payable and similar charges.

2.13 Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

2.14 Leased Assets

Traidcraft Exchange only has operating leases and the payments made under them are charged to the Statement of Financial Activities on a straight-line basis over the lease term.

2.15 Taxation

Traidcraft Exchange's charitable activities fall within the exemption afforded by section 505 of the Income Corporation Taxes Act 1988. Accordingly, there is no provision in these accounts.

27

Notes to the financial statements Year ended 31 March 2023

The Traidcraft Exchange

2. Accounting policies (continued)

2.16 Pensions

For the defined contribution pension scheme, the pension costs charged to the Statement of Financial Activities represent the amount of the contributions payable in respect of the accounting period.

For the defined benefit schemes the amount charged to the Statement of Financial Activities in respect of pension costs and other post retirement benefits is the estimated regular cost of providing the benefits accrued in the year, adjusted to reflect variations from that cost. The interest cost and expected return on assets are included within other finance costs.

Actuarial gains and losses arising from new valuations and from updating valuations to the balance sheet date are recognised in the Statement of Financial Activities.

Defined benefit schemes are funded, with the assets held separately from the group in separate trustee administered funds. Full actuarial valuations, by a professionally qualified actuary, are obtained at least every three years, and updated to reflect current conditions at each balance sheet date. The pension scheme assets are measured at fair value. The pension scheme liabilities are measured using the projected unit method and discounted at the current rate of return on a high quality corporate bond of equivalent term and currency. A pension scheme asset is recognised on the balance sheet only to the extent that the surplus may be recovered by reduced future contributions or to the extent that the trustees have agreed a refund from the scheme at the balance sheet date. A pension scheme liability is recognised to the extent that the group has a legal or constructive obligation to settle the liability.

The administration costs of running the closed defined contribution scheme are charged to the Statement of Financial Activities. Further details are provided in the notes to the accounts.

3. Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of financial statements requires management to make judgements, assumptions and estimates that affect the application of accounting policies and amounts reported in the Statement of Financial Activity and balance sheet. Such decisions are made at the time of the financial statements are prepared and adopted based on the best information available at the time. Actual outcomes may be different from initial estimates and are reflected in the financial statements as soon as they become apparent.

Key estimates included within these financial statements include assumptions regarding discount rates and mortality in calculating the value of retirement benefits. Trustees keep these assumptions under review and employ the services of qualified actuaries to calculate the resulting expected asset or liability to the charity in respect of retirement benefits. None of the other estimates made in the preparation of these financial statements are considered to carry significant estimation uncertainty, nor to bear significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

In preparing these financial statements, no significant judgements were required in the process of applying the company's accounting policies.

28

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

4. Income from donations and legacies

Unrestricted
funds
2023
£
Donations
1,267,691
Legacies
131,920
Grants from trusts and charities
24,272
1,423,883
Income in the prior year was all unrestricted.		 Total
funds
2023
£
1,267,691
131,920
24,272
1,423,883		 Total
funds
2022
£
1,601,499
576,388
73,400
2,251,287

5. Income from charitable activities

Unrestricted
funds
2023
£
Grants from institutional sources
-
Consultancy and other income
101,820
101,820
Unrestricted
funds
2022
£
Grants from institutional sources
-
Consultancy and other income
130,251
130,251		 Restricted
funds
2023
£
1,697,949
-
1,697,949
Restricted
funds
2022
£
1,862,234
-
1,862,234		 Total
funds
2023
£
1,697,949
101,820
1,799,769
Total
funds
2022
£
1,862,234
130,251
1,992,485

The activities giving rise to other income are all carried out in furtherance of the objects of the charity.

29

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

5. Income from charitable activities (continued)

Split of income
UK
Rest of World		 2023
£
719,379
978,570
1,697,949		 2022
£
534,087
1,328,147
1,862,234

6. Costs of generating funds

Voluntary income

Unrestricted
funds
2023
£
Travel and accommodation
544
Direct costs
241,814
Support costs (Note 9)
167,400
Direct salaries
316,845
726,603
Institutional sources
Unrestricted
funds
2023
£
Support costs (Note 9)
145,530
Direct salaries
70,433
215,963		 Total
funds
2023
£
544
241,814
167,400
316,845
726,603
Total
funds
2023
£
145,530
70,433
215,963		 Total
funds
2022
£
154
187,107
126,216
273,301
586,778
Total
funds
2022
£
109,726
56,647
166,373

All generating funds expenditure in 2022 was unrestricted.

30

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

7. Charitable activities

Unrestricted
funds
2023
£
Development Programmes
Direct salaries
449,588
Travel and accommodation
68,124
Direct programme costs
405,703
Support costs (Note 9)
83,410
1,006,825
Policy Unit and Campaigning
Direct salaries
387,601
Travel and accommodation
603
Direct programme costs
20,060
Support costs (Note 9)
268,706
676,970
1,683,795
Unrestricted
funds
2022
£
Development Programmes
Direct salaries
329,797
Travel and accommodation
11,783
Direct programme costs
179,203
Support costs (Note 9)
44,998
565,781
Policy Unit and Campaigning
Direct salaries
267,200
Travel and accommodation
-
Direct programme costs
2,975
Support costs (Note 9)
183,642
453,817
1,019,598		 Restricted
funds
2023
£
333,055
42,958
1,250,118
80,799
1,706,930
18,676
148
2,215
-
21,039
1,727,969
Restricted
funds
2022
£
280,097
29,315
1,339,834
70,119
1,719,365
36,412
345
13,366
-
50,123
1,769,488		 Total
funds
2023
£
782,643
111,082
1,655,821
164,209
2,713,755
406,277
751
22,275
268,706
698,009
3,411,764
Total
funds
2022
£
609,894
41,098
1,519,037
115,117
2,285,146
303,612
345
16,341
183,642
503,940
2,789,086

31

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

8. Resources expended

Total resources expended include the following amounts:

2023 2022
£ £
Depreciation 12,709 19,906
Amortisation 4,342 5,539
Operating leases 53,890 47,000
Unrealised exchange rate losses/(gains) 15,560 (9,855)
Auditor's remuneration 15,500 8,000

32

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

9. Support costs

Voluntary
income
2023
£000		 Institutional
sources
2023
£000		 Development
programmes
2023
£000		 Policy and
Campaigning
2023
£000		 Total
2023
£000
Management and admin
salaries		 108,171 94,038 98,658 161,441 462,308
Governance 21,003 18,259 19,156 31,347 89,765
Office services 23,241 20,205 32,727 53,553 129,726
Office machinery and
consumables		 3,657 3,180 3,336 5,459 15,632
Financial services 11,328 9,848 10,332 16,906 48,414
Total 167,400 145,530 164,209 268,706 745,845
Voluntary
income
2022
£000		 Institutional
sources
2022
£000		 Development
programmes
2022
£000		 Policy and
Campaigning
2022
£000		 Total
2022
£000
Management and admin
salaries		 79,375 69,004 72,394 118,464 339,237
Governance 13,524 11,757 12,335 20,184 57,800
Office services 16,959 14,744 15,468 25,311 72,482
Office machinery and
consumables		 7,260 6,312 6,622 6,105 26,299
Financial services 9,098 7,909 8,298 13,578 38,883

Support costs have been apportioned based on the number of full-time staff equivalents in each department.

Management and administration salaries include the salaries of staff working in Finance, HR, Public Relations and Communications and general management. It also includes recruitment, relocation, training and other staff costs.

Office services include rent, insurance and general office running expenses. Office machinery and consumables include depreciation and non-capital office furniture, fittings and equipment. Financial services include bank charges, irrecoverable VAT and membership fees and subscriptions. PR & Comms is the cost of preparing communications for the charity and includes the cost of trips to visit projects to provide reports to our supporters.

33

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

10. Staff costs

Salaries
Social security costs
Pension costs (excluding contributions to defined benefit scheme - FRS
102)
Overseas salaries and staff costs		 2023
£
1,015,691
105,206
70,011
801,044
1,991,952		 2022
£
858,846
88,042
61,701
542,084
1,550,673

The average number of persons employed by the charity during the year was as follows:

Development programmes and Policy Unit
Fundraising
Management and administration		 Group
2023
39
12
6
57		 Group
2022
37
12
6
55

The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was:

Group Group
2023 2022
No. No.
In the band £60,001 - £70,000 1 1
In the band £70,001 - £80,000 1 -
In the band £90,001 - £100,000 1 -

For the year ended 31 March 2023, key management personnel comprised the trustees, the Chief Executive, and members of the Senior Management Team. The total employee benefits of the key management personnel were £640,990 (2022: £426,687).

34

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

11. Trustees' remuneration and expenses Trustees' remuneration and expenses
During the year, no trustees received any remuneration or other benefits (2022: £nil). There are no
trustees to whom retirement benefits are accruing under the defined benefit pension scheme.
During the year ended 31 March 2023, no expenses were paid to trustees (2022: no expenses were paid
to trustees).
12. Intangible assets
Group and company
IT systems
£
Cost
At 1 April 2022 33,245
At 31 March 2023 33,245
Amortisation
At 1 April 2022 28,903
Charge for the year 4,342
At 31 March 2023 33,245
Net book value
At 31 March 2023 -
At 31 March 2022 4,342

35

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

13.
Tangible fixed assets
Group
Cost
At 1 April 2022
Additions
At 31 March 2023
Depreciation
At 1 April 2022
Charge for the year
At 31 March 2023
Net book value
At 31 March 2023
At 31 March 2022		 Furniture
and
equipment
£
131,831
11,159
142,990
115,538
12,709
128,247
14,743
16,293

36

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

13.
Tangible fixed assets (continued)
Charity
Cost
At 1 April 2022
Additions
At 31 March 2023
Depreciation
At 1 April 2022
Charge for the year
At 31 March 2023
Net book value
At 31 March 2023
At 31 March 2022		 Furniture
and
equipment
£
124,618
11,159
135,777
110,195
11,726
121,921
13,856
14,423

37

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

14. Investments

Company Company
2023 2022
£ £
Traidcraft Services India Private Limited 1,000 1,000

Traidcraft Services India Private Limited is incorporated in India and is limited by shares. The Corporate Identity Number is U74140DL2015PTC286042. Traidcraft Exchange holds 99% of the shares.

The investments include shares in Traidcraft plc which are not listed on any stock exchange and which were donated to Traidcraft Exchange by supporters. At 31 March 2022, the Traidcraft plc shares were not being traded so the trustees valued the shares at nil. Due to the illiquid nature of these shares the trustees believed it was appropriate to classify them as a fixed asset investment. At 31 March 2023, the Traidcraft plc was in administration and so the shares have been written off in the year.

Principal subsidiaries

The following was a subsidiary undertaking of the charity:

The financial results of the subsidiary for the year were:

15. Debtors

Trade debtors
Amounts owed by related parties
Other debtors
Prepayments and accrued income		 Group
2023
£
19,168
-
41,673
320,914
381,755		 Group
As restated
2022
£
67,812
14,353
24,262
288,697
395,124		 Charity
2023
£
19,168
30,316
12,559
319,179
381,222		 Charity
As restated
2022
£
67,812
14,353
24,262
288,697
395,124

Trade debtors and prepayments have been split out from the other debtors balance as the trustees believe this provides better information for the users of the financial statements. This restatement is for presentational purposes only.

38

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

16. Creditors: amounts falling due within one year

Trade creditors
Other taxation and social security
Other creditors
Accruals and deferred income
Deferred income at 1 April
Deferred during the year
Amounts released		 Group
2023
£
57,937
34,326
40,275
957,950
1,090,488
Group
2023
£
852,708
815,674
(852,708)
815,674		 Group
2022
£
34,236
43,636
10,007
1,000,551
1,088,430
Group
2022
£
1,116,985
1,539,113
(1,803,390)
852,708		 Charity
2023
£
57,937
16,465
38,363
958,950
1,071,715
Charity
2023
£
852,708
815,674
(852,708)
815,674		 Charity
2022
£
34,236
36,136
5,377
1,001,551
1,077,300
Charity
2022
£
1,116,985
1,539,113
(1,803,390)
852,708

Deferred income relates to funds received from Institutional donors that have not been spent at the year end. It will be spent on planned future project activities. The majority will be spent in 23/24. Income will be recognised as the monies are utilised, in line with the funding agreements.

39

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

17. Restricted funds

The table on page 48 analyses the restricted funds at the year-end. In each case income is received from a funder or funders and programme expenditure (including staff time where appropriate) is charged against this. At any point in time any sums held which have not been spent in accordance with the terms of the agreement of the funder are held in a Restricted Fund or as Deferred Income and are identified by the name of the project or piece of work to which they relate.

South Asia Programme

‘MUKTEE: Fighting Forced Labour with Adivasi and Dalit Communities in South Asia’: Ref No. COOP-RS/D (2018) 6764770) is a four year project funded by the European Commission. It was planned in order to address the systemic and structural vulnerabilities of agricultural communities to forced, bonded, and child labour in two districts of Northern Bangladesh and four districts of Madhya Pradesh, India. It worked on multiple fronts, namely rescuing and rehabilitating communities from bonded labour conditions; preventing future bondage through skill development and employment opportunities; support enterprise through developing supply chains of agricultural commodities in the local areas; and strengthening policy interventions. 8,000 households and 20,000 children were to benefit directly from this project. The project received a no-cost extension until the end of June 2022 and currently work is being to complete the evaluation and final reporting. The total cost is €1,131,809.

Hidden Homeworkers – Improving Transparency and Traceability to Improve Working Conditions of Homeworkers in Apparel and Footwear Chains (Homeworkers):

Ref No EuropeAid/157515/dh/act/Multi is a project that started in April 2019. The objective is to improve the working conditions of informal and home based workers in Nepal, Pakistan and India, who work in global value chains in the apparel and footwear sectors. It is expected to impact the lives of 20,000 home based workers in this country through improved working conditions, access to social entitlements and policy change at the national level. The project is progressing well, though has to undergo some changes due to the impact of covid on home workers. A no-cost extension is now proposed and the details are being worked out. The total cost is €1,308,922.

Bangladesh

‘Khamatayan’ (Empowering smallholders to strengthen local democratic governance) is being implemented in Bangladesh in partnership with Christian Aid and Solidarites and funded by the European Commission. The objective is to strengthen the governance, accountability and sustainability of smallholder civil society organisations in Bangladesh, covering 24 district and sub district associations, and 788 village level Self help Groups (SHGs). The project planned to empower these organisations, representing 20,000 marginal famers (50% women, 10% ethnic minorities, 5% disabled people) to proactively engage with Local Authorities in the five target districts of Gaibandha, Kurigram, Mymensingh, Sherpur and Satkhira. The total cost of this 42 month project is €1,653,149.

Empowering women’s CSOs to ensure good governance (WEE):

Ref No EuropeAid/168903/DD/ACT/BD is a 42 month project starting February 2021 and will impact the lives of 15,000 women in 5 districts of Bangladesh, in partnership with Ulashi Sreejony Sangha (USS) and Bikash Bangladesh. The project will build capacity of women’s grassroot organisations to advance gender equality and empowerment and enable their participation in local governance. It will support women to access social and economic rights; and strengthen women’s collective voice through their own organisations. The total cost is €2,592,595.

40

Notes to the financial statements Year ended 31 March 2023

The Traidcraft Exchange

17. Restricted funds (continued)

India

Addressing vulnerabilities among the Pahariya community through market led Interventions (OAK):

Ref No OFIL 19 003 is a 4 year project aims to “reduce vulnerability and improve sustainable livelihoods and food sovereignty among 3000 Pahariya households, particularly women, in two blocks of Jharkhand”. The 90 villages targeted are comprised of extremely vulnerable Pahariya tribal households alone. This is sought to be achieved by organising and enabling communities to adopt sustainable and productive resource (forest, land and water) management regimes, empowering communities to access their entitlements and engage with the market with a view to sustainably enhance livelihood, income base and nutritional status. The total cost of the project is £631,172 and is funded by the Oak Foundation.

The goal of this 3-year project is to reduce socio economic vulnerability, improve livelihoods and resilience of 9,000 Tea worker communities in 5 districts of North Bengal and Assam. The work will be undertaken across 35 gardens of which 25 gardens in North Bengal and 10 gardens in Assam. The project will facilitate building of community voices and create opportunities and choices for tea worker households. The primary focus will be to improve livelihoods and safety nets through a participatory process of assessing needs, resources, skills and opportunities leading to diversification and improvement in incomes. Secondly, collectivisation of women and youth in the gardens and enhancing their knowledge, skills and sense of agency will improve their negotiation and dialogue capacities with officials within and outside the gardens enabling them to access entitlements from the Government. The project will also establish a model of climate adaptive practices through establishing small scale innovations. The total cost of the project is £972,572 and is funded by the Oak Foundation.

Halcrow Foundation - Climate resilient sustainable livelihoods for female small holder farmers, (Birbhum, West Bengal):

Ref: HF185 is a project in India funded by the Halcrow Foundation. The project aims to organize vulnerable women farmers, improve food security and increase household incomes through livelihood diversification, enhanced water use efficiency, and building resilience through social security safety nets for 2,500 vulnerable families. The project is now in year 2. There are 80 Women Livelihood Committees formed now and work is on to build capacity around governance, micro savings, and resource mapping. Linkages have been built with various government departments to access extension services for a variety of crops as well starting nurseries to benefit other families. The cost of the project is £99,948.

41

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

East Africa Programme

Senegal

In 2016/17, ‘Juicing Justice project for Farmers’, started in Senegal, has worked in partnership with two small Senegalese enterprises called Zena and BDS. The project, funded by Comic Relief (Grant ID 1324191 – total cost £625,489), has worked with 2,200 forest fruit farmers to acquire environmentally sustainable forest fruit harvesting knowledge and skills, increase their income from sales of exotic forest fruits and improve their livelihoods. It also aims to strengthen the capacity of the two small businesses to trade with the farmers in ethical practices that ensure equitable sharing of risks and benefits as well as develop their capacity to access European markets with innovative juice brands. The project has now ended.

Kenya

Sustainable Agriculture & Women’s Advancement (SAWA):

Project is a three year project being implemented by Traidcraft Exchange in Meru, Kenya with funding from UK Government’s Department for International Development. The project, which ended in January 2022, aimed to improve the sustainable livelihoods of over 2,000 smallholder farmers (particularly women) in Meru, Kenya. It focused on vegetables for the local market and sought to increase access to markets, improve agricultural production, increase women’s voice and participation in the value chains and forge partnerships with the private sector and government. The project ended in January 2022. The total budget was £548,530

Participatory Approach Pilot on Women empowerment (PAPOWE):

This small project (£17,429) works with farmers & traders, particularly women farmers and traders in Kenya (SAWA project participants), who were hard hit by the Covid 19 pandemic to enable them to recover from the crisis. Besides immediate relief support, we are also supporting women with vegetable seeds for the immediate crop cycle, along with fertilisers and affordable finance through group saving and lending scheme. We are also supporting women traders with umbrellas and canvas to protect their agricultural produce in the market to ensure they stay fresh and not lose on prices. The plan is also to help women access solar lighting panels with match contribution from themselves. Besides the support will include large water tanks to harvest rainwater and help them with their vegetable gardens. The project is being supported by Trusts.

Tanzania

Promoting the Inclusion of People with Disabilities in Cocoa, Coffee and Palm Oil Value Chains’ (Tanzania - Disability main) is being implemented by Traidcraft Exchange in Tanzania. It is funded by The National Lottery Community Fund (project ID: 10328877). The project seeks to reduce household poverty and empower 1,000 people with disabilities and 500 smallholder farmers and/or micro entrepreneurs, engaged in the coffee, cocoa and sustainable palm oil in Mbeya Region of Tanzania and Dar es Salaam. The project seeks inclusion of disabled people in all aspects of the value chains through collective organisation, improved access to finance and business services, improved market access and changes in behaviour and practice towards disabled people. The budget for this project is £682,418.

People, Prosperity, Planet: Reduced poverty and climate resilience for coastal communities in Tanzania (UKAM): Traidcraft Exchange in partnership with Tanzania Gender and Sustainable Energy Network (TANGSEN) are implementing a three-year project titled, People, Prosperity, Planet Project (PPP) - Reduced poverty and climate resilience for coastal communities in Rufiji and Kisarawe districts in Tanzania, which are vulnerable to climate xtremes. Launched in April 2022, the project aims to improve Natural Resource Management (NRM) and ivelihoods for 2,200 (1,300 women; 800 men; 100 people with disabilities) vulnerable people through climate resilient practices & market led approaches along 5 value chains. The selected value chains include honey, sunflower, fruit trees, poultry & vegetables.

42

Notes to the financial statements Year ended 31 March 2023

The Traidcraft Exchange

17. Restricted funds (continued)

Policy and Campaigning Programme

JRCT: Our policy and campaigning work on corporate accountability has been partially supported by the Joseph Rowntree Charitable Trust. In the last year, we continued to call on the government to legislate to hold companies to account for violating human rights through a Business Human Rights and Environment Act (BHREA). A key aspect of this was a submission (written jointly with the Corporate Justice Coalition) and extensive follow-up advocacy to the Law Commission's Corporate Criminal Liability enquiry, around elements which we believe should be included in a new law. Our request that legislation should cover the failure to prevent human rights abuses was included in the Law Commission’s options paper in June 2022. In addition, we launched a public campaign in favour of BHREA in December 2021 which received 24,622 signatures.

In the 2021 financial statements restricted funds for JRCT were attributed to ‘Social Change’ and ‘JRCT and Network for Social Change’ in error. This has been corrected in the current year to correctly attribute the funds to JRCT.

Laudes Foundation (Laudes Garment Work): Our policy and advocacy work on textiles in the EU has been supported by Laudes Foundation. In the last year, we have taken forward advocacy on Unfair Trading Practices (UTPs) in the garment sector in the EU, including: holding regular meetings with the European Commission and Members of the European Parliament around the EU’s textile strategy, commissioning research on fair and unfair trading practices, and holding parliamentary events to highlight the impact of garment retailers’ purchasing practices on working conditions, job security and pay for workers.

Catalyst Programme

Catalyst was a fund resourced by Ceniarth. The resource was used by programme teams to develop concepts, build evidence and fund research and scoping, laying the foundations for larger pieces of work. No further funding was sought for the Catalyst Fund from 2019 due to a change in strategy from 2020.

18. Summary of funds

Summary of funds - current year


Designated
funds
General funds
Restricted funds		 Balance at 1
April 2022
£
269,000
1,446,991
352,881
2,068,872		 Income
£

-
1,525,703
1,697,949
3,223,652		 Expenditure
£
-
(2,565,991)
(1,788,339)
(4,354,330)		 Transfers
in/out
£
-
(22,401)
22,401
-		 Gains/
(Losses)
£
-
(15,560)
-
(15,560)		 Balance at
31 March
2023
£
269,000
368,742
284,892
922,634

43

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

18. Summary of funds (continued)

Summary of funds - prior year

Designated funds
General funds
Restricted funds		 Balance at
1 April 2021
£
269,000
828,347
260,135
1,357,482		 Income
£
-
2,381,538
1,862,234
4,243,772		 Expenditure
£
-
(1,772,749)
(1,769,488)
(3,542,237)		 Gains/
(Losses)
£
-
9,855
-
9,855		 Balance at
31 March
2022
£
269,000
1,446,991
352,881
2,068,872

44

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

19. Statement of funds

Statement of funds - current year

Unrestricted
funds
Designated
funds
Portfolio work
General funds
General funds
Total
Unrestricted
funds		 Balance at 1
April 2022
£
269,000
1,446,991
1,715,991		 Income
£
-
1,525,703
1,525,703		 Expenditure
£
-
(2,565,991)
(2,565,991)		 Transfers
in/out
£
-
(22,401)
(22,401)		 Gains/
(Losses)
£
-
(15,560)
(15,560)		 Balance at
31 March
2023
£
269,000
368,742
637,742

Funds have been designated by the trustees to fund foundational work on portfolios following the shift to a new strategy where our work is organised around three portfolios of Tea, Garments and Small Scale Agriculture. The funds will cover costs related to the development of portfolio plans, joint workshops, and pilot projects.

45

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

19. Statement of funds (continued)


Restricted
funds
JRCT
Khamatayan
Muktee
OAK
Homeworkers
Tanzania -
Disability main
Catalyst
PAPOWE
Supporting tea
workers
Laudes
foundation
Halcrow
Foundation
WEE
SAWA
Muktee 2
UKAM
Oak - Tea
Laudes Garment
Work
Strengthening
Farmers
Association
PGM Pilot
Other small
funds
Total of funds		 Balance at 1
April 2022
£
8,678
2,754
104,738
69,369
2,944
29,563
95,000
65,512
3,271
5,418
13,719
-
(50,875)
-
-
-
-
-
-
2,790
352,881
2,068,872		 Income
£

-
-
63,535
166,008
220,261
88,572
-
5,000
-
-
-
590,038
36,036
-
238,356
147,906
83,288
-
-
58,949
1,697,949
3,223,652		 Expenditure
£
(2,215)
-
(122,446)
(158,586)
(205,261)
(118,135)
(95,000)
-
(6,533)
-
(9,980)
(585,038)
14,839
(28,334)
(238,356)
(142,434)
-
(22,401)
(32,036)
(36,423)
(1,788,339)
(4,354,330)		 Transfers
in/out
£
-
-
(45,827)
-
-
-
-
(70,512)
-
-
-
-
-
45,827
-
-
-
22,401
70,512
-
22,401
-		 Gains/
(Losses)
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(15,560)		 Balance at
31 March
2023
£
6,463
2,754
-
76,791
17,944
-
-
-
(3,262)
5,418
3,739
5,000
-
17,493
-
5,472
83,288
-
38,476
25,316
284,892
922,634

46

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

19. Statement of funds (continued)

Statement of funds - prior year

Unrestricted funds
Designated funds
Portfolio work
General funds
General funds
Total Unrestricted funds		 Balance at
1 April 2021
£
269,000
828,347
1,097,347		 Income
£
-
2,381,538
2,381,538		 Expenditure
£
-
(1,772,749)
(1,772,749)		 Gains/
(Losses)
£
-
9,855
9,855		 Balance at
31 March
2022
£
269,000
1,446,991
1,715,991

47

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

19. Statement of funds (continued)

Restricted funds
JRCT
Khamatayan
Muktee
OAK
Homeworkers
Juice
Tanzania - Disability main
Catalyst
PAPOWE
Supporting tea workers
Laudes foundation
Matrix fund
WEE
SAWA
Halcrow Foundation
CCP Extra
Total of funds		 Balance at
1 April 2021
£
11,000
18,000
81,000
79,000
(15,000)
(10,000)
7,135
95,000
2,000
12,000
-
5,000
(1,000)
(24,000)
-
-
260,135
1,357,482		 Income
£
4,730
309,889
311,916
135,884
224,048
26,986
181,505
-
63,512
12,579
42,174
-
346,410
178,695
21,950
1,956
1,862,234
4,243,772		 Expenditure
£
(7,052)
(325,135)
(288,178)
(145,515)
(206,104)
(16,986)
(159,077)
-
-
(21,308)
(36,756)
-
(345,410)
(205,570)
(8,231)
(4,166)
(1,769,488)
(3,542,237)		 Gains/
(Losses)
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,855		 Balance at
31 March
2022
£
8,678
2,754
104,738
69,369
2,944
-
29,563
95,000
65,512
3,271
5,418
5,000
-
(50,875)
13,719
(2,210)
352,881
2,068,872

48

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

20. Analysis of net assets between funds

Analysis of net assets between funds - current year

Unrestricted
funds
2023
Restricted
funds
2023
£
£
Tangible fixed assets
14,743
-
Current assets
897,813
1,100,566
Creditors due within one year
(274,814)
(815,674)
Total
637,742
284,892
Analysis of net assets between funds - prior year
Unrestricted
funds
2022
Restricted
funds
2022
£
£
Tangible fixed assets
16,293
-
Intangible fixed assets
4,342
-
Current assets
1,906,054
1,230,613
Creditors due within one year
(210,698)
(877,732)
Total
1,715,991
352,881
21.
Reconciliation of net movement in funds to net cash flow from operating activities
Group
2023
£
Net (expenditure)/income for the year (as per statement of financial
activities)
(1,130,678)
Adjustments for:
Depreciation and amortisation charges
17,051
Decrease/(increase) in debtors
13,369
Increase/(decrease) in creditors
2,058
Interest received
(2,738)
Net cash (used in)/provided by operating activities
(1,100,938)		 Total
funds
2023
£
14,743
1,998,379
(1,090,488)
922,634
Total
funds
2022
£
16,293
4,342
3,136,667
(1,088,430)
2,068,872
Group
2022
£
701,535
25,445
(41,695)
(200,730)
(1,880)
482,675

49

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

22. Analysis of cash and cash equivalents

Cash in hand
23.
Analysis of changes in net debt
Cash at bank and in hand		 At 1 April
2022
£
2,741,543
2,741,543		 Cash flows
£
(1,109,359)
(1,109,359)		 Group
2023
£
1,616,624
Changes in
market
value and
exchange
rate
movements
£
(15,560)
(15,560)		 Group
2022
£
2,741,543
At 31 March
2023
£
1,616,624
1,616,624

50

Notes to the financial statements Year ended 31 March 2023

The Traidcraft Exchange

24. Pension commitments

The group operates a defined benefit pension scheme.

Until 31 March 2001 Traidcraft operated a defined benefit funded pension scheme covering the pension arrangements of employees of Traidcraft plc and Traidcraft Exchange, providing a pension linked to final salary. This scheme is now closed but not wound-up and Traidcraft plc and Traidcraft Exchange continued to make contributions to it, working with the scheme trustees to agree appropriate contribution levels. Traidcraft plc is the principal employer within the combined Traidcraft defined benefit pension scheme and Traidcraft Exchange is the participating employer.

In January 2023 Traidcraft plc entered into administration. The scheme actuary has split the assets and liabilities of the original scheme into a Traidcraft plc scheme and a Traidcraft Exchange scheme. Traidcraft Exchange is solely responsible for the Traidcraft Exchange part of scheme and is responsible for meeting the ongoing costs of the Traidcraft Exchange scheme.

The triennial actuarial valuation prepared as at 1 September 2019 indicated that the scheme was in technical surplus.

The charity expects to contribute £nil to the defined benefit pension plan in the year to 31 March 2024. It should be noted that the surplus calculated in the triennial valuation and the surplus or deficit calculated under FRS102 differ as the two methods require different assumptions to be used.

The Financial Reporting Standard 102 Section 28 requires that the following further disclosure is made about the closed defined benefit pension scheme. The actuarial valuation has been updated by the qualified scheme actuary to 31 March 2023.

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

At 31 March At 31 March
2023 2022
% %
Discount rate 4.60 2.60
Expected rate of inflation (CPI) 2.75 3.15
Rate of increase of pensions accrued post 5 April 1997 2.75 3.15
Rate of revaluation of deferred pensions 2.75 3.15
At 31 March At 31 March
2023 2022
Years Years
Mortality rates (in years)
- for a male aged 65 now 22.1 21.3
- at 65 for a male aged 45 now 23.5 22.3
- for a female aged 65 now 24.5 23.2
- at 65 for a female aged 45 now 26.0 24.4

51

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

24. Pension commitments (continued)

The group's share of the assets in the scheme was:

Equities
Gilts
Bonds
Cash
Other
Value recognised limited under FRS102
Total fair value of assets		 At 31 March
2023
£
233,000
319,000
858,000
33,000
-
(61,000)
1,382,000		 At 31 March
2022
£
262,000
-
1,426,000
-
23,000
(60,000)
1,651,000

The actual return on scheme assets was £(202,000) (2022: £(75,000)).

The amounts recognised in the Consolidated statement of financial activities are as follows:

Movements in the present value of the defined benefit obligation were as follows:

Opening defined benefit obligation
Interest cost
Benefits paid
Actuarial gain/(losses)
Closing defined benefit obligation		 2023
£
(1,651,000)
(42,000)
66,000
245,000
(1,382,000)		 2022
£
(1,650,000)
(32,000)
55,000
(24,000)
(1,651,000)

Reconciliation of fair value of plan assets were as follows:

Opening fair value of scheme assets
Interest income
Return on plan assets excluding interest
Benefits paid
Value recognised limited under FRS102		 2023
£
1,711,000
44,000
(246,000)
(66,000)
(61,000)
1,382,000		 2022
£
1,841,000
35,000
(110,000)
(55,000)
(60,000)
1,651,000

52

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

24. Pension commitments (continued)

Amounts included in the balance sheet arising from the charity's obligation in respect of defined benefit plans:

Present value of defined benefit obligations
Fair value of plan assets
Deficit in the scheme		 2023
£
(1,382,000)
1,382,000
-		 2022
£
(1,651,000)
1,651,000
-

In the year ended 31 March 2023 the actuarial valuation for accounting purposed showed a surplus of assets over liabilities at that date of £61,000 (2022: £60,000). In accordance with FRS102 a pension scheme asset is recognised on the balance sheet only to the extent that the surplus may be recovered by reduced future contributions or to the extent that pension scheme trustees have agreed a refund from the scheme at the balance sheet date. Neither condition was met at the balance sheet date and therefore the susplus was not recognised.

Defined contribution scheme:

At 31 March 2001 Traidcraft closed entry to the defined benefit scheme and closed accrual of future benefit within that scheme. On 1 April 2001 Traidcraft introduced a Group Personal Pension Scheme (a type of defined contribution scheme) which now has an employer's contribution rate of 7.5% (2022: 7.5%). Traidcraft Exchange made contributions of £70,011 during the past year (2022: £60,701) and this cost, together with administration charges of £nil (2022: £1,000) relating to the closed scheme comprise the pension cost of £70,011 (2022: £61,701) shown in Note 10 to these accounts.

25. Operating lease commitments

At 31 March 2023 the group and the charity had commitments to make future minimum lease payments under non-cancellable operating leases as follows:

Not later than 1 year
Later than 1 year and not later than 5 years		 Group
2023
£
24,901
15,805
40,706		 Group
2022
£
23,711
-
23,711		 Charity
2023
£
24,901
15,805
40,706		 Charity
2022
£
23,711
-
23,711

53

The Traidcraft Exchange

Notes to the financial statements Year ended 31 March 2023

26. Related party transactions

During the year the Charity had transactions with the following related parties:

  1. The Traidcraft Foundation - the controlling party of the company as detailed below.

  2. Traidcraft plc - a company with a number of trustees in common and in which the Traidcraft Foundation controls a protective Guardian Share.

  3. Trustees - the trustees donated £nil (2022: £nil) during the year.

2023 2022
£ £
Traidcraft plc
Purchase of goods and services (e.g. rent and building costs) 15,832 18,428
Sale of services 30,850 244,955
Recharge of redundancy costs - -
Balances due (to)/from related parties at 31 March
Traidcraft Foundation - -
Traidcraft plc - 14,353

27. Controlling party

The charity is under the control of the Traidcraft Foundation (charity number 294953), a registered charity with the same place of business, being the founder member and having, in general meetings, the number of votes that exceeds by one the number of all other votes cast.

54