Reglstered number: 04627969 Charity number: 1096068 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) TRUSTEES. REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 *AE8LLSHL• A17 212 COMPANIES HOUSE ? Bishop Fleming MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) CONTENTS Page Reference and administrntive details of the Company. Its Trustees and advisers Trustees. report TNstee$' responslbllltles statement Indeppndent auditors. report on the fil￿ncIal ststements Consolidated statemenl of finan¢l•l actlvlties 13 14-17 18 Consolidated balance sheet 19-20 Company balance sheet Consolidated statement of cash flows 21-22 23 Noles to th• flnanclal SL￿•mentS 24-40 MERCY IN ACTION IA COMPANY LIMITED BY GUARANTEE) REFERENCE AND ADMINISTRATIVE D￿NjLs OF THE COMPANY. rrs TRUSTEES AND ADVISERS FOR THE YEAR ENDED 31 DECEMBER 2024 Tru8tMs F H Clark HJLaw R 8edicer C Kinnear R Day lapKxynted 19 August 2024) Company reg6stered number 04627969 Charity reglstered numbol 1096068 R¢gist•red offic• 11 Foxcote Avenue Peasedown St John Bath BA2 8SF Chief executiv• Off￿¢1 A T¢yJd Independent auditors 8ish¢¥ Fleming LLP Chartered Accountants Stalutory Audito 10 Temple Back Bristd 8S16FL Page 1 MERCY IN ACTION (A COMPANY UMITED BY GUAR*J4TEE) TRUSTEES, REPORT FOR THE YEAR ENDED 31 DECEMBER 2024 The Trustees present their annual ￿pOrt alongslde the audited fina￿la1 statements of Mercy In Action for the year from 1 January 2024 to 31 December 2024. This Annual Report fulfils the requirements for both Tru5tees' report and a Directors, report under company law. The Trustees ￿nT￿rn that the Annual Report and financial ¥tstements comtAy with Ihe relevant statutory requirements. the charity's goveming docJJment. and the provisions of the Statement of Recommended Practlee (SORPI applicable to chaiities preparing accounts under the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) {effective 1 January 2019). As both the Group and the Company qualify as smatl under section 383 of the Companies Act 2006, the Group Strategic Report. required of medium and large companies under the Companies Act 2006 (Strategic Rep)rt and Directors. Report) Regulations 2013. has been omitted. POLICIES AND OBJECTIVES Mercy In A¢ti¢Jn's objectives, which are the wblic benefft and as sèt out in the companls Memorandum and Articles of Association. are as fowows" {a) To advance the Christian faith in accordance with the Ststement of Beliets attached as a Schedule hereto. in Bath. other parts of Ihe United Kingdom. the Philippines. and other parts of the world as determined by the Trustees,. and to cary out exclusively charitsble purposes connected with the Charity's work. (b) To relieve persons in condilions of need. hardship. sickness or old age, arrfl to alleviate related distress in the saKI locati)ns and elsewhere as the Trustees see fft. (c) To advance ¢dU￿tion based on Christian principles by means the Trustees deem appropriate. including the eslablishment and Iweration of edU￿1￿)nal establishments in the staled locations and elsewhere. Public Benefit In setting objectives and Fdanning activities, the Tfustees have complied with their duty under Section 17 of the Charities Act 2011 lo have due regard to the public benefit guidance published by the Charity Commission for Englar¥J and Wales. The Trustees confirm that Mercy"In Action's acti¥ttie$ are carried out in a¢¢ordan¢e with its obje¢t5 for the pub¥c b￿effit. as outlined n this report. Strategles for AGhle¥lng ObJe¢tlves Our miSs￿n is to address poverty, injustice, and iiequality through hcyJsin9. food pro¥ision. education, and care. Our r#Jrrent charitsble activities indude: In th• UK: Supported housing for young mothers and expectsnt ryK)thers at risk of homelessness in Bath & North East Somerset. Trowbridge. and Wells. Panlry-style food clubs in Bath & North East Somersel, and Oxford. agststs'ng families on low incomes. Free provision of clothing for children aged 0-15 in Bath & South West SomerseL Distribution of househokl goods and furniture to famil￿$ in crisis. In the Philippines. via partner organisation ltsK.. Residential a¢¢ommodab'on lor ¢hildren who are victims or vulnerable to traff￿knng. neglec( or abuse. Cofflmunity support programmes for families. Day care seNices for street chiklren. Supported hOU￿ng for care leavers. Work placements and experience opportunities for yourwJ people. Page 2 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) TRUSTEES. REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 Elsewhere: Support for young people unable to continue education after famay bereavements or because of financial restraints. Assistance for yO￿g people wilh learning dTfficuNies in Sri Lanka. Training and Cap￿lty building for partner organisations in India, Sri Lanka. the Philippln&s. Zambia. arKI the UK. Soclal Investment Pollcles Social Investmenl is realised by supporting parents in developing parenting and social skills and offering flexible work OppOrtun￿e$ for those retUrn￿g to employment. particularly during school hours. Grant4laklng Poll¢les Grants are made annualty to partner oTganisatK>ns in the Phrfippines based on agreed budgets. Saleguardlng The designated Safeguarding Lead continued to monitor and follow up on safeguarding concems throwjhout 2024. No serious incidents req￿rI}g notification to Ihe Charity Commission were reported. Most safeguarding Cases achieved p)5itNè outcomes. with the remainder referred to appropriate aulhorities. Additional reporting categories will inform future training. Mércy In Action maintains a policy requwing prospective omFth)yees to undergo a Disdosure and Barring Service IDBS) theck-basic or enhanced ￿ere d1￿ct work with dients or vulnerable volunteers is involved. Rlsk Assessments As of April 2024. the Safeguarding Lead assumed responsibility for conducling risk assessments across the eharity and retail operations. By May. this role exten(led to include volunteer risk assessment5. Volunteers Our volunteer pool numbered 376 in 2024, providing invaluable Sukwori a(yoss shops, warehouses, pantries, and adwsory roles. Of these. 65 volunteers are classified as children or vulnerable individuals, who receive quarterly safeguarding theck-in5. Volunteer feedback throughout the year has been consistenty positive. ACHIEVEMENTS AND PERFORMANCE Govarnancg and Infrastructurè Development committees have been eslablished to enhan￿ ￿mmunICation between projects and the Board. These indude the UK Development Committee. Phitsppines Steering Group. and Intemat*)nal Deveknpment Committee. Staffing levels and ¢osts are under ong)ing review. Communlty Engagement Practical support was provided by Mh4 to partner organisalions aidin9 families in erisis. Donations includirvj toys. food, dothing. and Christmas goods were distrit¥Jted to partners such as Love Barton, 8ristol Charities, Project Moma, and Stay and Play. Partnerships with voluntsry and statutory Organisat￿n$ in Bath and North East Somerse( Bristol. and Oxford have grown. fostering stronger community connections which enable assistance lo be given $wil￿Y and appropriately. The longstanding servTrce at Royal Unitod Hospital Bath providing c4rAhirvJ for the distharge hub continued throughout 2024. Collatoration with Southside Family Project continues via an after-scIM)ol hub k)r families in the Twertonlsouthdovm area. Page 3 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) TRUSTEES, REPORT ICONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 Petra Proje Supported ac¢ommDdatK?n for young mothers and molhers4iAJe remains a safe, nurturing environment fostering strong parenl promote an inclusNe and welcoming atrnosphere for all familiès. Bath: 11 clients arKI 11 chrfdren housed. Tiowbridge.. 5 dients and S chldren housed. Wells.. 5 dients and 5 ¢libJren housed. Awaiting an IKEA site vtsr( to assess support for the Trowbridge lourwJe area. Explorw)g volunteer support for Bath gardens in partnership with Grow for Lrfe charity. Planning application 5ubmilted lo extend fiats. including one three-bedroom HMO and three self- nlained llats. Btg Lottery Fund application submitted for a new kitchen in one Bath house. Awaitsng de¢i3i0n on solar panel funding for the three Balh house5. Client Testimonial8: "The support I have received from Petra arHI the love I was shown when I didn'l love myself will never leave me.. "S'm the mother and woman l am today because of Petra: il was the stsrt of my journey to change my life for me and my children." .1 will hold my ts'mfr at Petra very dosg lo my heart and will forever be grateful for th• hom& it gavg me and my hildren. Action Pantry Action Pantry 8ath provides affordable food for resMJents in some of the poorest aroas of BANES. Mercy In Action extends sincere thanks to all 5UPPOrters throughout 2024. induding Fareshare South West. M&S, Salvation Amy. Genesi%. Sainsburfs. Waitrose. Nestlé. Bath Hygiene Bank, Crop Drop. Avon Gleanin9 Network. local allolmenls. Nando's. Bath University. Boston Tea Paty. and Firsl Impressions. Pantry Activities: During Christmas 2024. food was provided to 335 houselK)Ids across thrae pantries {378 adults 386 children). induding festive items and addilK)nal tresh produce to rmer the hol*Jay period. New toys and gifts were distributed lo every third. Throughout the year. Action Pantry supported over 120 member families. tmth average weekly attendance of 86 families. noting seasonal variakn.on during school h)lidays. Nearly 30 new refeffals were received in Q4 2024: numbers aro expected to rise in 2025. SNJnificanl improvements included painting, decoratin9, and a kitchen refil. enhanGing the pantry environment and fun¢tionalty. A Baby and Toddler Group launched in November 2024. altra¢llng up to nine.faml1￿ weekly during le￿ time, offering adivities such as song time. story time. and ttafts. The Oxford Pantry has been transferred to Love Barton, a local charity active in the area. Mercy In Action will provide £1.000 per month for Iwo years plus Fareshare food al cos11£540), generating $igniffi¢ant savings and alk)wing Love Barton to offer more comwehensive dient services. Thls arr￿gement will be reviewed after tr40 years. Plans for2025: Conduct a comprehenslve dlent review. Update referral Procedu￿$. Prioritisè families wth young children on Ihe adivg waiting list. Reassess support for families w￿? have been Pantry members for over six years. Explore wider opportunities to receive su￿lUS food from new contacts. Page 4 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEEI TRUSTEES. REPORT {CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 Client Feedback: -All the staff at the Pantry are absolutety amazing; they make everyone feel $0 spe¢*l. l always book fO￿ard to c&)ming here every week. and so do my kKls. It's a really important part of the communty for mg and I honestly don't know what I'd do without it.. Mother of young children "As a family. we want lo Ihank you all at the Panty for your help. We have loved seeing your smiling faces and sharing our news over the last couple of years. You atl do an amaing job supporting many famllies." Family of four, Pantry graduates "l appreciate you all so much! I don't kn¢w how I would cope without Y￿ help.. cluldren Single mother of six Clothe$lln• In 2024. Clothesfine served over 100 famrfies weekly. dislribuling 5.070 items of clothing, shoes, and linen. Over 100 crates of homeware were also provided, alongshje emergency dothing supplies via social workers. Support extended lo households through Panlry and social worker referrals with fumiiure items induding sofas. fridges. beds. and wardrobe$. Recipients have expressed deep appre¢ialion for this essential Serv￿8. Comfflunlty and ProJe¢t Engagement Mercy In Aclion broadened its eommunty engagement and Collal)ora￿n ￿ 2024. Donalions of elothirtg. furniture, toys, fch)d, and essentials supported partners such as BS13, ArdBox, Project Mama. and Royal United Hospital. Tailored contributions ranged from baby carriers and school uniforms to winter clothing and Christrnas gifts. Emergency relief referrals from health visitors, social WQTkws. and partners increased, prompting dellvery of essential household items induding beds. sofas. refr￿elat0￿S. freezers. and kitthen appliances. Demand for househol¢J appliances remans high. A highlight was the partnership wtth Proje¢l Mama. whefe Mercy In Actbon supported a community event for refugee women with clolhing. baby items. and toiletries. receD/ing excellent feedback and fostering an ongoing relationship. Looking ahead to 2025. Mercy In Adion aims to deepen communty impact by expanding partnerships and enhancing holistic support throL￿h ACt￿)n Panty. It is a priwkge to work in such close c￿labOratI¢￿ Mercy in Action and lo know that we are on the same page. We both know that social change may be complex and g￿dUal. but il is absolutely achievable. By moving beyond the pressure forinstsnt resufts and committing to long-tenn relationships our two ch8n.ties can help cre81e 8 contexl where lasling progress and change takes hold lor the individuals. children, and lami'lies we support. Quick ￿n$ may bring short4emi wsibAIty. Ixrt it is the slower, more intentional WO￿ that b￿a￿S cycles ol disadvanlage and strengthens relationshws and tsnsfomis Iwes over lime. Mercy in Action and South$￿e believe in and lead with this approach. Pgnny McKissock MBE, CEO Southshye Phlllpplnes In 2024, KSK Cebu athanced ils mtssion to supwt vulnerable children and young people through education and preparation for adutthood. Staff training and capacity-building improved Servi￿ delivery across prograrnmes. The Residential Team implemented a successful independent living weparation programme. creating tailored five-year plans for each clienL YOUNJ people actively parbcipate in shaping thelr care plans, fosledng empowermènt. Partnerships with therapists and counsellors in Cebu en$uro limety access to therapeutic SUPPOfL Learning Scheme (ALSI: One dienl enrolled. House Parents. seminar and training eonductèd. Retreat hekl at St FraneAs Seraph Convent House Maghaway, Talisay City. Page 5 MERCY IN ACTION (A COMPANY LIMrrED BY GUARANTEE) TRUSTEES. REPORT ICONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 RESIDENTIAL CARE Jan Feb Mar Ma Jun Au Ocl Nov Dec TOTAL Client5 Incomi Clients Oischarged Clients Refe￿ed to th Launch Total Client5 22 22 21 21 23 23 23 15 23 15 23 14 23 15 21 Male Female 14 14 14 14 15 15 14 12 14 Chelo'5 House Clients Martha's House Clients Paul's House Clients Total No. Tewn Members 19 20 20 20 19 19 19 19 17 19 17 16 Referred 5 dients to CBT and psythotherapy Accepted 2 clients The 2 new dients are officially enrolled in Angelicum under the Reo Program. 2 clients graduated from Accelerated Loaming Scheme (ALS) 1 client enrolled in ALS House parents (HPI seminarltraining HP. residential cfients and staffs were ab￿ to have a retreat at St. Francis Seraph Convent House located at Maghaway Tafisay Cty. Extra4urricular a¢twities for kids like joining Summer Sp)rts Workshop at Talisay Cty Hall and they were given certifKates during the awardin9 ceremony held at Talisay City Complex. Combined monthly activities like Buwan ng Wika and Intramural t(MJether Drop4n. Rèsidential and Schooling Tutonal. A new CCTV was inSt￿led in the Homesthoc4 classroom. Marthas and Chelos houso w•ro pfovKled with new computer an printer Visitation at City Jal was already approved by the warden to facilita Cl￿nts visitirvJ their parents. Hwed 1 houseparent assigned at Marthas house Residential kam and slaff were able to participate in fve preventio seminar. The admin provhded 1 new laptop for the new Soual Worker Signrficant Accomplishments The Drop4n Contre has supported fewer clients this year. largely due to a reduction in the number of street children in the uty-an encouraging trend acknowledged by the Local Aulh(xity. In recognilton of the centre's vital role. the Local Authority has awarded a £3.000 grant for 2025 to help sustain the proj&ct. The drop-in team continues to focus on education and family reunrf1¢ab.￿ 85 its core aims. In 2024. c￿ents were transrtioned into residential care. and ffive others progressed into the sth¢)oling programme. The Source, a communty-led support notr•0￿ for parents and young pwle. has ralumed to its pr pandemic levels ol engagement 11 remains a vitrfanl and resih'enl group that offers emol¥)nal and spiritual support with minimal direct oversight. Ihanks to its volunteer4riven naknre-currently 90% of its operations Page 6 MERCY IN ACTION (A COMPANY UMtrED BY GUARANTEE> TRUSTEES, REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 are led by volunteers. This self-SUStainirg model has made The s￿rce a vital pillar of KSK'S wider community work. Chalhnge$ and Fo￿ard Plannlng Mercy In Action continues to face several challenges. particularly relating to the broader political dimate in the Philippines. Ongoing national instabilty and increasing rep)rts of local police brutality present risks that require vigilanl attentK)n. In response, safeguarding remains a top priority for both our team and the communities we serve. In 2025. we will enhance our safeguarding framework by o)laborating dosely with partner organisations such as Internat￿n31 Justice Mission IIJM) and Communty Legal Assistance ICLBI. These strengthened human rights partnerships will support the work of our steering committee lo reinforce protective measures and ensure the safety and wellbeing of all benefiaaries and staff. The Schooling Programme. whli e not undergoing major ¢hange$ during the year, cfjntinues to maintain a holistic. person-cenlred approach to educats'on. We remain committed to delivering personalised support that addresses the dNer5e need5 of the youn9 peopla in our car8, 4uipping them for pjsitive and sustainable fulufes. EDUCATION KPI Jan Feb Mar May Jun Jul Aug Sep Nov Dec TOTAL Residentia SCI￿011￿ No. LaunchlFoste Sthoolin 21 21 21 21 23 23 23 23 22 22 21 21 23 Communi Schoolin High school Elem 463 462 462 462 486 467 467 468 468 144 144 144 144 144 144 144 147 143 143 143 143 143 211 211 211 211 211 211 211 249 206 206 206 206 206 Senior High College Discharged Clients Incoming Clients Unilcollege Graduales Total Education Meals Served 74 74 74 74 74 74 74 74 72 72 72 72 72 56 55 55 55 66 65 65 65 66 14 20 36 41 41 485 485 485 484 511 491 491 490 490 2550 4139 3894 3856 113 3886 106 3341 105 2254 91 23, 920 1, 114 39 444 Rice distrbution Medical Assistance Uniform 55 220 267 31 444 School Supplies Re￿dentIal Tutorial 444 Provided School SUppl￿S and Unrform Budget to 444 scholars. Attepted 41 new Scholars for the school year 2024-2025. Ended the year with 490 SCI￿la 37 Senior High School graduate staff were atAe to fftrin 7 training o)urs?s. Provided 2 kilos of rice to the parents who have a perfect atteTrdar￿e. Before the ear ended. we rovxled cake to celebrate the oint birthda Signrficant Accomplishments ofth Page 7 MERCY IN ACTION IA COMPANY LIMITED BY GUARANTEE) TRUSTEES. REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 parent volunteers. Renovated the Tapul feeding area. Was able to tsp with Lawaan elementary school to have a water and electric connection to our feeding area. For the first time, the Volunteer Chrstmas participants were leaders and assistants and Ihose who had perfect atteThJance. Ca buildi for the Parent Vofunteers. Benevolent Fund The Benevolent Fund {BFI comprises 10% of lotal Gift Aid ineotne and operates as a dis¢reth)nary reserve to support fledgling projects. provtile gifts to partner organisations. and meet other unforeseen needs not covered n the annual budgeL In 2024. gifts were awarded to the Southside Family Project. Love India. and Ratrnalana Church, Sri Lanka, totalling £13.000. Due to expenditure constraints. the full affh)unt availabl8 to the Benovolent Fund was not allocated during the year. Communlty Fundral¥lng Mercy In Actson benefrted from a range of community fvndraising activities in 2024. induding: Fashion Shows: Two 5ucce5sful events held rn Bath. each raising approximately £4.000. Festival: A po*up vintagè ¢hJthes stall proved p)PLAar and generated significant funds. Chlld Sponsorshlp: Ongoing support from sponsors contributed essential funds. Christmas Appeal: Raised Nital donations to supp(¥t seasonal acti¥ities and assistance. FINANCIAL REVIEW Gosng Con¢em Followin9 appropriate enq￿￿es. Ihe Trusiees are satisfied thal Mercy In Action has adequate resou￿eS lo continue its operatK*ns for the foreseeable future. Consequentty. the Trustees ¢ontinue lo adopt the going concern basis in preparing the financial slalements. Further details on this approath are provided in the accounting poh'aes section. Reserves Policy Trading had a successful year m8knng around £200k exlra profft. however MIA spent £200k more on projects and charitat￿e octivitie5 than generated from non-trading income. The differenc8 is a £400k improvement over 2023 where there was a loss of £400k. Our charitable spending rose by approximately £SOk, 2024 improvement is a comblnation of more income and fewer trading Costs. Wrth everything being equal and the full year effects of changes made in 2024. and further redudions proFM)sed in 2025 this would bé when we ghould expect to start re￿ildIng our reserves if chariiable expenditure does not also rise. The Trustees have Considered the key risks to the sustsinabdty of Mercy in Actton a￿1 identified that being able to ¢ontinue to fund Core projeets free from finaneial disrupknon is the principal objective. Having considered possible threats. induding to income. the trustees wnsider Ihat the policy for reserves should be 6 months of net projecl costs {after deducting guaranteed income). This represents £467.833 based on Ihe 2024 financial year deh'very. The trustees have measured this target agwnst Tree reSe￿e$. whith are defined as lotsl r&serves net of restricted, designated and illi]uid funds le.g. fixed assets). For the 2024 financial year this is £224.638 {reconaled as lotal fvnds of £482,637 less resth.cled funds of £500 and fLKed assets of £257.499). Th trustees note that this represents a shortfall of £243.195. The Iruslees have conducted a Ihorough operational and spendir#J review during 202S to optimise cosis and generate $avng$ that will be used to address this shortlall in the coming years. In resp)nse, the Trustees wll Continue lo scrutinise and audit all central and operation o)sts lo enable further reserves to be available for 2026. Page 8 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) TRUSTEES, REPORT (CONTINUEOI FOR THE YEAR ENDED 31 DECEMBER 2024 Investments Pollcy Mercy In Aetion's investment strategy focuses on expanding its property p)rtfolio and sUPPOrting growth in its successful retail outlets. which remain a kty financ￿1 pillar. Principle Funding The majority of Mercy In Action's funding is generated through its trading rA>mpany. MLA Trading (company number 11025273). whKh operates a ne￿ork of 38 charty retail shops - with Iwo additional outlets oponod during 2024. In 2024. lik&f(K4ike retail sales inueased by 5Yo. resulting in a s￿nrftsnt rise in profits arKI gross value added on goods. Retail operations contrtsuted nearly £900.000 in additional fffiancial support without which projects and services would have been unable to continue. Beyond financial contribution. ￿tall provwjes essential in-knnd support including: Office and storage spaee wrlhin shops and warehouses. Cbthing donations benefiting Cktrthesline. Royal Uniied Hospiial, fvndraising events. and other charitable activities. Health and safety managernent auoss proieet properties. Maintenance services. fire risk assessments. and ffire safety ¢ompliance. Additional key funding for the Petra Houses is Secu￿ via housing beneffts, grants. and other streams. Warehouse storage faclities also generate unrestricted income. Child sponsorship programmeg continue to be vital in underi%nning Ihe core work of KSK in Ihe Philippines. Textlle Re¢ycllng Income 2024 saw a further fall and the amount paid by textile recy(aing companies to all charities including ourselves from peak in 2023 of £.48 per kilo for clothing and other ilems. This falling at the start of 2024 to £.20 per kilo finaly falling in August to 6 pence ￿r klk> on average. This has meant that our income from recyded textiles has fallen from £150,OIYJ in 2023 to £60.000 in 2024. and will fdl to £22,000 in 2025. prtncipal Risks and Uncertainties The risk register is monitored continuously and presented quarter￿ lo the Board. Key risks are prioritised by potential impact a￿1 likelihood. with mitigat*)n strategies identified and assigned to sen*)r management leads. The Board acknowledges that no system can guaranlee ab501uie risk eliff￿natiOn bul seeks reasonable assurance that major risks are manage(1 effectivety. Financlal Risk Management Objectives and Policles: Clearly defined authorisation levels and segregation of accounb.ng duties. Policies lo preven( detect. and investigale fraud. Prepara￿n of dglailed ￿$h flow forecasts and budgets lo faolitate monrtoring of financlal objectives and business risks, vthh variance analysis during monthty and quarterly reporting. Investrnenl in backryoffice functions and technology lo ensure organisalional robustness. Inwementation of key perfomiance indicators and regular reForts"ng to managemenl and Board commlttees to identify contrd issues and ensure timely corrective actions. Annual extemal atyjit prDviding management letters to the Audit and Finaft￿ Sub£ommittee on inlemal control findings. Third-party intemal audits reptybng lo the Audit and Finance s￿b£0Mmittee to reinforce intemal onlrol framèwork>. Page 9 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) TRUSTEES, REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 STRUCTURE, GOVERNANCE AND MANAGEMENT Constitullon Mercy In Action is a charitabl6 company Iwnited by guaranle•. established urKl•r a Trust D80d. Appolntment or Election of Trust•?s The management of the Group and Company i8 vested in the Twstees, wtN> are etected or co￿pted in accordance wilh the prwsions of the Trust Deed. Organisational Structure and Declslon-makw￿ Polic ercy in ActlonTradlng ¢*9anls•tlo￿ Ch)rt Pw10 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEEI TRUSTEES. REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2024 Pollcles Adopted for the Inductton and Training of Tw$tèis Prospective Trustees are identified joinuy by the Board and Sonior Management Team. Recommendations are then made by the Twstees to the Member5. who hold the final authority to appoint new Trustees. Upon appointrnent. all Trustees receNe comprehensive guidance from the Charity Commission outlining their statutory duties. In addition. Mercy in Action's policies regarding Trustee behaviour and expectations are pyovtded. To ensure a thorough understanding of the organisation, Trustees spend time engagin9 with vari￿S teams to gain insight inlo th8 day-to4ay operatK)ns of Mercy in Aclion. Pay Policy for Key Management Personnel No staff remuneration exceeded £60.000 duriNJ the reporting period. Trnstees. Indemnities Mercy in Action maintains full indemnity inSura￿e to protect Trustees in the perfomiance of th￿r duties. Plans for 2025 Ret￿1 Proposal to open an additional two retail oudets, conlngent on identifyin9 appropriate properties. Conduct a comprehensive audit ol staffing hours. area management, overall performance, and profitability across retail operations to infomi decisions aimed al improving eff+ciency and maintainlng budgetary control. The building previously kntY4vn as the Jubilee Centre on Lower Bristol Road Bath. will be rebuilt by September 2025. This gives MLA the option of 9.0¢)0 Sq ft of office and warehouse spacE at an outstanding rent of £45.000 PA Decision to be made if this wll be developed a5 a charity supersto￿. a hub for smaller organisations and non-profits or a centre for job creation with furniture and repairs etc Strat¢gSc Prlorftles The Trustees. CEO. and Senior Management Team have identified several key areas for development during 2025.. Evaluaie Ihe prOffita￿lty and long-term sustsinatrility of retail slK)ps, essential to ¢t)ntinue fvnding our Projects. Futher strengthen partnership5 With overseas partners, particularly in the Philippines, Sri Lanka, and India with particular concentration on the burgeoning work in Galle. Continue to enhance Human Resources processes through deeper utilisation of Staffology. improved recruilmenl and retentson strategies. and implemental¥)n of additional poliaes and procedures to support best employment practices. Develop Colla￿ratiVe partnerships v*ith local organisations in relevant locations lo maximise collective impact. This indudes expandin9 the Clothesline Fwjecl in partnership with Bristol charities. foeusing on minimal expenditure lor maximum community benefit. Expand fvndraising efforts throu￿ .fash￿￿ shows and popup stal& at local fastivals. aiming to Increase communty engagement and incorne generation. A(fvance the Petra housing initiative by Converting an existing buikling into th￿e selfvcontained homes, pending extemal funding support-this project 15 Cu￿enty in progress. Restructurè central operations to avoid overstaffing and ensure overheads remain within budget. Replace the current fridge van to improve logistics and operational effiuency. Expk>re fvrther p0S￿bilitI￿$ to receive surplus food. Pa9e11 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEEI TRUSTEES. REPORT {CONTINUEDI FOR THE YEAR ENDED 31 DECEIqBER 2024 Di¥closure of Information lo Auditors Each Trustee at the lime of approval of this report confim￿ thal: So far as Ih8t Truslee aware. there is no relevanl of whSch the charitable group's atklltors are un*vare'. and That Trustse h8S taken au the necessary steps to be aware of any rekvant audlt infomwtion and to ernsure the audito￿ arg tnfom)ed of that infcKmation. The Trustees. Reptsl. compary diredors. on .. a straiegi¢ ￿port. was app(oved by order of the Board ofTntstses. as the grMI svJned on its beha¥ by. HJLaw TfUSt¢e Page 12 MERCY IN ACTION (A COMPANY LIM￿ED BY GUARANTEE) STATEMENT OF TRUSTEES. RESPONSIBIUTES FOR THE YEAR ENDED 31 DECEMBER 2024 Tho Truslees {tthJ 8r8 also th8 dir8Ctcrs of the CLYnpany the ￿￿pose8 of c(xnpary Tawl era responsible for preparing the Tfuslees, rewrt and ts financbal *aiements in accordance ap￿1¢able law and Unlted lQngdom A¢ts)untiNJ Slandards (Uniled I￿ngd￿j G￿erallY Accepled ACC￿nting Practice). Company law r8wire5 the Trusl88S to wepar8 financial stalemants fcff each f￿￿￿ttI#l . Undar o)rnpany18w. the Trustees musl not approve the financi* slalements unless they are satisfied Ihal they give a true and fair view of Ihe ststs of affairs ol the Group and the Company and of theSr incryning resour￿$ and application of resources. Including Ihelr income &KI expenditijre. for that ￿riod. Inprepar￿￿ these finanrial statements Ihe Twslee5 are requlréd to: setod suitable accounting p￿¢1¢$ ar￿ then appty them consislenttr. observe the methods and prinaF4e5 01 the GhaTitie5 SORP {FRS 102): mak• judgments and accc4Jnting estimates that are r8asonable aTrJ pNdent.' stsle appI￿Ab￿ UK Accounbng Standards IFRS 1021 have been follry￿ed. suble¢t w at)y maknial deparbjres disclosèd and exp18ined ¥) the finan¢￿1 slatemerts. prepare Ihe fironcaat slatements ￿ the go1￿￿ ¢(￿cern bas1$ unless li Is lnappy￿rIate to wesume Ihat the Group conlinue n business. The Trustees a￿ resp￿sible for keeping adequatè aceountiNJ te¢ords that are sufficlent lo show and explain the Group and Ihe Companls transactions.and disclose with rea5￿able acrxjracy at any tkne the flnandd p)silion ef Ihe Group and the Company and enable Ihem to ensure that the financ4al statements compty with the Companles Act 2006. They are ￿$0 responsible safeguarding the assets of the Group and Ihe Company and hence for18khvJ reasorHblo Stops for thg prov8nl•on and deteL*on other trregularittes. proved by ordor of the members of the board of Tnth on I￿17}￿S aTr Si￿ed ￿ its behalf ty. HJLaw Tn￿tea Pa9B 13 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE INDEPENDENT AUDITORS. REPORT TO THE MEMBERS OF MERCY IN ACTION OPINION We have audited financtal statements of Mercy In A￿￿)n (the 'went charitable compan￿} and its subsidiaries {the 'group') for the year en¢Jed 31 December 2024 whth comprise Ihe Consolidated Statement of Financial Activitie5, Ihe C￿s￿ldated Balance Sheet. the Company Balance Sheet. the Con501idated Statement of Cash Flows and the related notes. indudirg a summary of significant accountiro policies. The fmancial reporting framewo￿ that has been applied in their preparati(￿ is applicatAe taw and United Kingdom Accounting Standards. including Financial Reporlir*J Standard 102 The Financial ReFQrting Standard apPI￿able in the UK and Republic of Ireland. (United ￿'ngdoM Generally Ac¢epted Att4)untirvJ PractiGel. In tyjr opinion the finanoal ststem8nts: give a true and fair we•V ol the slate of Ihe Group's and of the parent charilable cornpanls affairs as at 31 December 2024 and of the GrC￿p'S inecffiing resources and application of resources, including its ineome and experKlilure for Ihe year then ermjed: have bèen pro￿TlY prepared in accordancg *ryth United Kirydom Generally Accapted Accountir9 Practice" and have been prepwed in a￿Kdance the requ1￿MentS of the Companies Aet 2006 and lh8 Chariues Act2011. BASIS FOR OPINION We conducted our audit in accor(Fance ￿1h Inlemational Stsndards on Auditing (UK) {ISAs (UK)) arKI applicable law. Our responsibilities uThJer those standaftls are further described in the Auditors. responsibilitses for the aurfit of the frnancial statements section of our report. We a￿ independent of the Group in a￿ordance with the ethical requirements that are retevanl to our audit of Ihe financial statements in the Untied Kingdom, induding the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical rèsponsibilities in accOrda￿e with these requirements. We L*lieve Ihat the audit evTrden￿ we have c&lained is suffi¢ient and appropriate to provide a basis for our opinion. CONCLUSIONS RELATING TO GOING CONCERN In audilrwJ the financial statements. we have corLluded that the TnJstees' use of the gotng concem basis of a￿)Unting in the preparation of tho finanual statements is apw)priate. Based on the have performed. have not Identif￿ any material uncertainties relating to events or conditions that, individually or collectively. may cast significant doubt on the Group's or the parenl charitsble companls ability io continue as a going f¢y a Per￿ of at least months from when the financlal 5tstements are auttrbyised for issue. Our responsiblities and Ihe resr*Msibilities of the Trustees *ith re$￿t to concem are described in the rdevant seclKmS of Ihis report. Page 14 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) INDEPENDENT AUDITORS. REPORT TO THE MEMBERS OF MERCY IN ACTION (CONTINUED) OTHER INFORMATION The other inf(Kmat¢on comprises the information induded in the Annual re￿rt other Ihan the financial ststements and tsJr Auditors. report Ihereon. The Trustees are responsible for the other information c¢)ntained within the Annual report. Our opinion on the financial ststements does not cover the other infomation and. except to the extent otherwise explicrfy ststed in our rerth. we do not express ary form of assurance conclusion thereon. Our responsibility is to read the other information and. in doing so, cOn￿der whether the other information materialty Inconskstenl with the financial statements or our knowledge obtsined in the o)urse of Ihe audit, or otherwise appears to be materialty misslaled. W we #Jentify s￿h material inconsistencies or apparent material misstatements, we are rèquired to detemine vthether this gives rise to a material misstatement n the financial statements themsdves. If. based on the Vh)rk we have perf￿ed, V￿ ￿nC￿Jde that there is a material missL*emenl of this other ￿fc￿atiOn. VR are iequirgj to report Ihat fact. We have nothing to reF*Nt in thi.s rogard. OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 21J06 In our oplnion. based on the w(Yk uThJertaken in th¢ ¢ourso of audit.. the infcymation given in the Trustees. Report for the financial year for the finandal statements are prepared is consistent with the financial statements. the Trustees, Report has been prepared in accordance v*ith applicatle legal requirements. MATTERS ON VVHICH WE ARE REQUIRED TO REPORT BY EXCEPTION In the light of our knovAedge and uTrJerstanding of Ihe charitsble company arKI its environm8nt obtain8d in the ctyjtse of the audit. we have not idenlified material misstatements in the Trusiees. Report. We have nothing to reFQrt in re5ped of Ihe folhMTr3 matters in relation to vthich Companies Act 2006 requires us to rep¢)rt lo )fju rf. in our opinion". the parent charitable company has not kept adequale aThJ sutfioent accounting records. or relums adequale for our audit have not been received fr(Mn branches rK)t wsiled by us.. or Ihe parent charitable company financial statements are not in agreement h￿th the ace4)unting records and retums" or certain disdosures of Trustees. remuneration specified by law are not made., or have not received all the information and explarots.ons we require lor our audit. or the Trustees wer9 not gntitled to prèpare the financial sL*ements in accordance with the smaN companies regime and take advantage of the small companies. exemplions In prepariTrJ the Trustees. Report and from the requirement lo p￿pare a Strategic Report. RESPONSIBILMES OF TRUSTEES As explained more fully in Ihe Trustees. reswnsibfiibes statement. the Trustees (who are also Ihe directors of11 tharits￿e company for purposes of wnpany lawl are responsible for the preparats"￿ of the financial stslements and for being satKsfied that they give a true arKI lair view. and for such internal control as the Trustees detem)ine is necessary lo enatrde the preparation of financial statements that are frée from material misstaiemen( whether due to fraud or error. In preparing the financlal statements, Ihe Trustees a￿ reswnsible for assessiThJ the Grtyjp's and the parent Charitable companrfs ability to continue as a going concem. disclosing. as applicable. rnatlers related to goirKJ concern and using the 90ing concem basis of accountirvJ unless the Trustees either intend lo liquidate thè Group or the parent charftsble company ￿ trj cease opera1v￿s. or have no ￿alISt￿ aikmabve bul lo do $0. Page 15 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) INDEPENDENT AUDITORS. REPORT TO THE MEMBERS OF MERCY IN ACTION (CONTINUED) AUDITORS. RESPONSIBILrriES FOR THE AUDIT OF THE FINANCIAL STATEMENTS Our objectives are lo obtain reaSona￿e assurance about *thelher the financAal statements as a wh)le are free from material misstslement. whether due lo fraud or error. and lo issue an Auditors, report Ihat includes our opinion. Reasonable assurance is a htgh level of assurance, but is not a guarantee that an audit conducled in accordance with ISAS {UKI wll a￿vaYS delect a malerial misstatement when il exisls. Misstalemenls can arise from fraud or error and ar¢ ¢Msidered material rf. indr¥iduany or in tl* aggregate. they could reasonably b8 expected to Influen￿ the eConC￿niC decision5 of users taken on the basis of these financial ststements. Irregulariiies. including fraud, are inslances of nonw￿ *ith the roqU￿0m9nts of the kt Wblh respect to accounlln9 rncords and pryration of fin¥nc4al statements. The financlal statements have been prepared In accordarte the pro¥￿iDn$ appApAble to enultes sublecl to the small comp¥ies reglm8. 4oproved by tyder of the mèmbers of the board of Trustees on ILtr l Tr1 Is and sigrwd on 118 behalf by. HJLaw Trvslee notes ￿ pages 24 to 40 ffffti part of tr￿Se financlal stsiements. Page 20 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) REGISTERED NUMBER:04627969 COMPANY STATEMENT OF FINANCIAL POStTION FOR THE YEAR ENDED 310ECEMBER 2024 2024 2023 FIXED ASSETS rangble assets Investments 10 11 131.598 1.000 137,115 1,￿0 132.598 138,115 CURRENT ASSETS Debtors Cash at bank and in hand 12 336.106 149.717 393.668 151,497 485.823 545,165 Credit(Ys.' arnounts falliThJ due within c￿e year 13 {196.031) (200,5971 NET CURRENT ASSETS TOTAL ASSEfs LESS CURRENT LIABILITIES 289,792 422,390 482.683 TOTAL NET ASSETS 422,390 482.683 CHARITY FUNDS Reslri¢t¢d fLmds Unrestricted funds 15 500 7.819 Unrestricted Funds 15 421.890 474.864 Total unrestri(*ed funds 15 421,890 474.864 TOTAL FUNDS 422,390 482.683 Page 21 MERCY IN ACTION (A COMPANY LIIIIITED BY GUAIiATrITEE) REGISTERED NUM8ER:04627969 COMPANY STATEMElff OF FINANCIAL POSITION (CON.TINUED) AS AT 31 DECEMBER 2024 The Companywas entitJBd to exem￿￿On from audit wNJer sedKJn 477 of the Companie5 2￿. The Mernbe￿ ￿ve nol reqthj the thlty to obtsui ￿ aurfit for >ear in accorda1￿8 wlth section 476 of Ihe Companies Act 2(￿. Fknwever. Bn gudit is requred in act￿dance secbon 151 of the Charities Acl 2011. The TNstOgS ad(n￿O Iheir responsl>Kilies for ¢*mpl>kng vith the requir8m8nts of the Act vAth rttpect to a¢countlng re¢(Yds an(i preparakn of Ilnan¢xl $tatwT￿ts. The finan¢id $tstemerts hav8 been in acc[￿￿nCe *ith the ￿￿K)n5 wl(*ble io ￿￿tieS $L￿eCI to th• small ¢crfnpanios regime. 4proNed by order of members of the board of Trt￿teeS on I￿ l F12S and sp3ned on ts behalf by. HJLaw Tn￿lee The rK￿eS ￿ pages 24 10 40 fom part ofihese f*w￿la1 slatemen MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2024 2024 2023 CASH FLOWS FROM OPERATING ACTivmES Nel cash used In operaling athities (note 1 S) 72.214 1119,376) CASH FLOWS FROM INVESTING ACTMTIES DNidends. interests and rents investments Purthase of tsngible fixed assets 3,089 128,960) {6.359) NET CASH USED IN INVESTING ACTIVITIES {6.3591 {25.8711 CASH FLOWS FROM FINANCING ACTIVITIES RePa￿ents of borrov*ing Repa￿nents of ffinance leases Hire purchase inte￿t paid Interesl Paid 145,000) {5.0421 (S831 {45.000) NET CASH USED IN FINANCING ACTIVITIES (62.2091 (45.0001 CHANGE IN CASH AND CASH EQUIVALENTS IN THE YEAR 3.646 (190.247) 455,849 Cash aThJ cash equivalents at the beginning of the year 265.602 CASH MID CASH EQUIVALENTS AT THE END OF THE YEAR 269.248 265.602 Th8 notes on pages 24 to 40 fom part of these finaTh￿ statements Pa9e 23 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 GENERAL INFORMATION Mer¢y in A¢tion is a private company limited by guarantee incorporaled In Engkgnd and Wa185. The registered office is 11 Foxcote Avenue. Peasedown Sl John, Bath. BA2 8SF. ACCOUNTING POUCIES 2.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS The financial statements have been prepared in accordance with the Charitye5 SORP (FRS 1021- Accounting and Reporbng by Chariligs.. Stalemenl of RecoMMer￿ed Practice apFlicable to charities preparing their accnunts in accordance v￿th the Financtal Reportiw Slandard applicable in the UK and Republ￿ of Ireland (FRS 102) (effective 1 Jan[￿ry 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 1021 and the Companies Act 2006. Mercy In Action meets the definilion of a wbli¢ ben8fft ￿tity uTrJer FRS 102. Assets and liabilities are initsally recognised at historical ¢ost or transa¢li¢)n value unless otheTh*4ise staled in the ￿levant accountir•3 policy. The Consolidated Slaternenl of F￿anCIal A¢tivities {SOFA) and Consolidated balance sheet consolidate the financial statements of the Company and its SubS￿lary urmlertaking. The results of Ihe subsidiary a￿ (xJnsolKlated on a li￿ by basis. Company has takèn athniage of Iho exempti￿ al1¢y•￿d under sectlon 408 of thé Companias Art 2006 and has not presenied its ovffl Ststemenl of financial actjths in these financlal Statements. 2.2 GOING CONCERN After maklng apprwiate er￿uireS. the Tntstees have a reasonab￿ expectation that the Charity has Jequale resources to continue in Operati￿al existence for the foreseeatAe fLrture. The Charity is In a str￿g financlal p05itiw with heallhy reseryes. The cash tsalar￿ as at 31 December 2024 was £269.248 arKI V•B consider thal the charity hold$ sufficient funds to mitigate against the risks of any loss of irKome. The Trustees are reviewing the financial forecasts on a regular basis and conisder that they are in a financiaty resilient position to manage foreseeable risks. For this reason. it is consvjered apwswriate to ad(4)l the going concem basis in preparing the finanual statsmenls.. 2.3 INCOME All wi¢cffie is re¢ognised on¢e the Ctynpany has entiliement to the income. it is probable that Ihe inr•)me will be received and the amount of irtcome reGeivable wi be measvred reliably. Grants are induded in the CGrsolidated stslement of financial actiwtses on a receivable basis. The balance of incorne re￿1Ved specrfic wjrposes expended during the ￿rIOd is shown in the relevant funds on the Balance Sheet. Where inccrfne is re¢eived in advance of èntitlement of receipi, its recctyjnibon is deferred and included in creditor5 as defetred income. Where entilement occurs before incm Is received, the IrKome is accn*d. Gifts in Ih)naled for distribution are induded al valuation and recognised as incorne when they a￿ distrifwted to the proie¢ts. Grfts donaw fc* resale are induded as income when they are sold. Income tax recoverable in felation to dcThtions received under Gift Aid ty deeds of covenant is recognised at the time of the th)nat￿n. Page 24 MERCY IN ACTION IA COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 ACCOUNTING POUCIES {conlinu•d) Z4 EXPENDITURE Expenditure is recognised once there is a legal or e4)nslructive obligation to transfer ecorKJmic benefrt to a third party. il is probable that a transfer of economic benefits be required in setuement and the amount of the obligation can ￿ measured rdiably. Expenditure i8 classified by aclivity. The costs of each octiwty are made up of the total of direct costs and shared ￿$ts. including support costs involved in undertaking each acb'mty. Direct costs attril)ulable lo a single activity are allocated directly to that activity. Shared costs wlich contribute to more than one aetrvity and SUppC￿ Costs thich are not attri)Utstr￿e to a single acttvity are apportioned between those activits.es on a basis consislent wth the use of resources. Central stsff ¢osts are allocated ￿ the basis of time spent, and depreclation charges allocated on the of the asset's use. Ex￿nditu￿ on faising funds I￿￿deS all expe￿IllUre in￿￿ed by the Group to rarse funds for its charitable wrK*)ses and includ8s costs of all fundraisin9 actrvities events and nM)sts. Grants payable are charged in the year when the ¢)ffer ts made except in those cases where the offer is condition￿. such grants being reccgnised as expenditure when the conditions attaching are fulfilled. Grants offered subject to C￿dIti¢M$ which have not been met al the yEar end are noted as a commitment. txrt not accrt￿d as expenditure. AJI expendilure is ir￿￿S1¥8 of irrecoverable VAT. 15 GOVERNMENT GRANTS Govemment 9rants relatirKJ to tarvJib18 fixed assets are treated a$ dofèrred income and released to the Consolidated slalemenl of financial aeli￿t*S over the expecled useful lives of Ihe assets concerned. Other grants a￿ credited to the Consolidated statement of financial activibes as the related expenditure is incurred. 2.6 TANGIBLE HXED ASSETS AND DEPRECIATION Tangible fixed assets costs.ng £1.OCrt) or more are capitalised aThJ recognised %•then future eC(￿orniG bgnefits are probable and the eost or value of the asset can be measured reliably. Tangible fixed assets are initially rec4>Jnised at cost. After re¢ognitirM. under the cost model. tsngible fixed assets are measured al cost less a¢aMnulated depreciation and any aceumulated impairment losses. AJI costs incurred lo bring a faryit4e f￿ed a55et into its intended wixking condrticm shwld be included in the measurement of cosL Depreciation is charge(1 so as to allocate the cost of tangit4e fwd assets less their residual value over their estimated useful lives. on a reducing balance basis. Depreualion is provided on ts foll0v￿n9 bas￿.. Lon*term leasehokl WOFerty Motor Veh￿￿$ Fixtures and frttings 2% reduung balance 15% reducing balance - 1 &25% reducng balance Page 25 MERCY IN ACTION (A COMPAJIY UMrrED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 310ECEMBER 2024 ACCOUNTING POUCIES {¢ontlnued) 2.7 INVESTMENTS Fixed asset investrnents are a form of financial in5trurnenl and are initially recognlsed at thetr transaction cost and subsequently moasurèd at fair value at the Balance sheel dale, unless the valuè cannot be measured relhably in whth case ￿ is measured at cost less impairment. Investment gains and losses. whelher realised or unrealised. are ¢￿)bined and wesented as 'GainsllLosses} on inve$tmenls' ￿ the ConsolKlaled statement of financial activities. Investments in subsidiaries are valued at cosl kss provffjN)n for impaimenL 18 STOCKS Stocks are valued at the lower of cost aTrJ nel ￿liS8￿￿e wdlue after makiThJ (kne allowance for obscdete and $low4moving $to¢ks. Cosl irKI￿leS all d￿￿t costs and an appropriate propJrtion of fixgj and variatle overheads. 2.9 DEBTORS Trade and other debtors are rwni5ed at Ihe sellement amount after any trade discount offered. Prepawnents are valued at the amount prepaid net of any tradé dise4Junts due. 2.10 CASH AT BANK AND IM HAND Cash al bank and in haThJ includes cash short-tem highfy liquid invèstments y￿th a short maturity of three months crf less fr(yn the date of acquisilion or c4)enirKJ of the deposit or similar aGG¢)unL 2.11 LIABIUTIES AND PROVISIONS Liabibties are recognised when is an obli9albx at the 8alance sheet date as a resuh of a past evenl il is wobable that a transfer of ec(momic ber￿ffi1 V4ill be required in Seitlem￿L and the amount of the settlèmènt can bè estimaied roliably. LIabl￿tieS are recognised at the amount Ihal the Company anticipates it will pay to setue the debt or the amount it has received as advanced payments for the 9oods or services il musl provide. ProV￿10nS are rnea5ured at Ihe 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 Ihe pvesenl val*Je of those amovnts, discounled al the pre-tax discount rate that reflects the risks spe¢rfic lo the liablity. T unwinding of the discount is reco9Thsed in the Consolidated ststement of finarKial activities as finance cosL P4e 26 MERCY IN ACTION (A COMPANY LIMITED BY GUARATr4TEEI NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 ACCOUNTING POLICIES {continued) 2.12 FINANCIAL INSTRUMENTS The Company has elected to apply the proVis￿S of sed1(￿ 11 'Basic Financial Instwm¢nts' of FRS 102 to all of its finanoal instruments. The Company has etecled to appty the recognrtion and measurement provisions of IFRS 9 Financial InstrLKnents (as adopled by the UK Endorsernent Board) wth the disctasure r￿uIrements of Sections 11 and 12 and the other presentation requirements of FRS 102. FInar￿[al instruments are recognised in Ihe Companys Stalement of Financial Posibon when the Company becomes party to the c(K)tra*Jal provisi¢xs of the instrumenL FinarLial assets arKI liabilrfies are offseL blith the nel amounts presented in the financial statements. bthen there is a legally enfor¢eable right to sel off the rec(MJnised amounts and there is an intention to setde on a net basis or lo rèalise the asset and selue the liability simultaneousty. Basic financlal assets Basic financial assets. vh¥th include trade and other debtors. cash and bank balances, are inilially measurgd al thoir trar£action price (adjusted for transaclion costs except in the initial measurement of financial assets that are subsequenlly measured at fair value through profit and Ios5> and are subsequenuy carried at their amortised cost Us￿9 Ihe effective interest method. less any provision f impaimient, unless tho arrangement ¢onsb"lutes a financing transaclion. where the transaction is measured al the present value of the future receipts discounted al a market rate of interest. Dtscwnting Is omitted Vthe￿ the effect of dis¢>JuntirwJ is immaterial. Companls eash and cash equivaler)ts. trade and most other debtors due ￿th the operating cjrle fall into this category of finanual instruments. Basic T￿n¢1)I ffiabilities Finartial liabiltlies and equity instruments are dassified according to the substance of the contractual arrangements entered into. An equity inslrumenl is any contract that ewdences a residual interest in the assets of the Company after the deduction of al its liabilities. Basic financial I￿￿IrtIeS. Which i￿lUde trade aThJ other creditors, bank loans and other loans a inilialty measured at tr*ir Iransaclion price ladjustir¥J for transaction Costs ex¢8pI in the Inibal measurefflent of financial liabilities that are subsequently rneasured at fair value through profrt and lossl. When Ihis constilules a financing transacti¢)n, wherefiy the debt instrument is measured al the present value of the future payrnents discountsd at a market rate of interest. discounting is ￿nItted Nthere the effect of discounting is immaterial. Debt instruments are subsequenly carried at tr*ir amc¥tsed cost using the effective w)lerest rate melhod. Trade creditors are otligations to pay for 90c￿$ and seryices Ihat have been acquired in the ordinary course of business from suppliers. Trade Credito￿ are dassrfied as currenl h'abilities ff Ihe payment Is due within one year. If not. they rep￿sent nryrfur￿nt liaknlities. Trade creditors are initially recognised al their transaction price and subsequently are measured 8t amortised cost Us￿9 the effective interest method. Discounting is omitted where the effect of discounlirMJ is immaterial. Page 27 MERCY IN ACTION IA COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 ACCOUNTING POUCIES I￿ntInU￿} 2.13 FINANCE LEASES AND HIRE PURCHASE Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are deFKeciated over shorter of the lease temi and their useful lives. Assets acquired by hire pU￿haSe are depreciated over their useful lives. Financ8 leases are those %there substsntially all of ts benefits and risks of (Nmership are assumed by the Group. Obligations under such agreements arè induded in creditors. net of the finance charge allocated to fubjre periods. The finance elemenl of the rental payment is charged to the consor￿ated ststement of financial aclivities so as lo produce a constant periodic rale of tharge on the net obli3ation oulslanding in each period. 1140PERATING LEKSES Renlals paid under operatin9 leases are charged to the Consdidated staiemenl of financial activities a straight-￿ne basis over Iho lease term. 115 PENSIONS The Group operates a defined contribution pensi￿￿ scheme aThJ Ihe pensw)n ¢haTge represents the amounts paYa￿e by thè GroLV to the fund in resW of the year. 116 FUND ACCOUNTING General funds aré unrestricted funds which are avalable for use at the discreticA) of the Trustees furtherance of the general obiec*ves of the Group and bthich hawe not been designated for other purtK)ses. Restrcted funds are funds thich are to be used in accordance Y￿th specific restrictions imposed by donor5 or vthich have been raised by Ihe Group for parlicular purposes. The costs of raising and administering swh funds are charged against the $pery￿ fund. The aim and use of each restricted fund is set out in the rtotes ts the financial statements. INCOME FROM DONATIONS AND GR￿lTs Unrestrkled Reslrlcted funds funds 2024 2024 Total funds 2024 Total fvnds 2023 Donations Govemment Grants 612.081 110,601 722.682 561,821 18,605 612.081 110.601 722.682 $80,426 TOTAL 2023 409.253 171.173 580.426 Govemment grant Income recwved In the prhjr Far relates entirety to c￿￿a￿rUS Job Retention Scheme. Page 28 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEEI NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 INCOME FROM CHARrrABLE ACTMTIES Restrfcted tunds 2024 Total funds 2024 Total funds 2023 PETRA project Grants Action Pantry 216.544 19.5CM) 25.163 216.544 19,500 25.163 219.928 20.￿0 261.207 261307 239,928 INCOME FROM OTHER TRADING ACTMTIES Income from iundralslng actlvities Unro$¢rl¢ted funds 2024 Total funds 2024 Tdal funds 2023 Mercy in Aclion Tradi 4.767.603 4,767,603 4.363.242 Income from non charitable trading activities Unrestricled funds 2024 Total funds 2024 Total funds 2023 Olher income 440 440 30,893 ANALYSIS OF EXPENDITURE BY ACTMTIES A¢tlvltles undertaken directly 2024 Support costs 2024 Total funds 2024 Total funds 2023 Charitatle Adivtlies 653,128 506,401 1,159.$29 1.113,051 TOTPL 2023 617,343 495,708 1,113,051 Page 29 MERCY IN ACTION IA COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 ANALYSIS OF EXPENDITURE BY ACTivmES (CONTINUED) ANALYSIS OF DIRECT COSTS Total funds 2024 Total funds 2023 Shop rental costs Shop ratss PETRA renlal costs PETRA rates and other costs tton Panty project CEBU Prgects 233,569 (218,238) 120,531 48.132 5.621 427.728 13,450 104.818 43,781 90,897 400,182 653.128 617.343 ANALYSIS OF SUPPORT COSTS Total funds 2024 Total funds 2023 Staff costs Deprecialion Slaff training General maintenance Holels. travd and substistence Printing. p)stage and stslionery Legal and professional Sundry Expenses Events and fundraising Informatx>n technology Accounting services Cleaning Bank fees and interest 417214 4,267 2,189 9,315 18,844 8.141 7,587 5.735 8.451 7.903 12.173 625 3.9f 381.826 4,268 969 22.447 28.512 8.148 16.052 5.278 1.521 6.906 15.319 1,373 3,089 506,401 495.708 Page 30 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEEI NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 AUDITORS, REMUNERATION 2024 2023 Fees pardble to the Companrfs audit￿ f(K the audit ofthe CompanYs amual aCCo￿ts 21.41)0 20.650 STAFF COSTS Group 2024 Group 2023 Company 2024 Company 2023 Wages and salaries SOCI￿ s8curity Costs Conlributh)n to defined ccmtribution pension schemes 2.838.112 211.747 2.588.313 198,884 381.939 27,633 352,095 23,374 7,642 6.357 7,642 6.357 3.057.501 2.793.554 417.214 381.826 The average number of persons em￿05￿d by the c(￿panY duriTrJ the yEar was as follows: Group 2024 Group 2023 No. Company 2024 No. Company 2023 No. Empl￿e$ 189 168 20 No employee recer¥ed remuneration amountin9 to more Ihan £60.000 in either year. The key management personnel of the Charity comparise the TDJslees (who do not receive remuneration for their rote as a Trustee). Ihe CEO and Warehouse Manager. The total amount of employee benefits including EMplo￿r pension conlribulions received by key management personnel for their services to the Charity was £94.489 {2023: £139,870). Page 31 MERCY IN ACTION {A COMPANY LIMITEO BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 TRUSTEES. REMUNERATION AND EXPENSES During the year ended 31 December 2024. expenses lots11￿g £97 were reimtmjrsed or paid directly lo 1 Trustee (2023 - £2240 to 3 Trustees). TI￿se all related to either travel costs or reimbursement of costs incurred that were relevant for the charity. 1D. TANGIBLE FIXED ASSErs GROUP Long4emi leasehold property Motor Fixtures and vehlcles flttlngs Total COST OR VALUATION At 1 January 2024 Additions Disp05als 130.000 152,251 6.359 (2,538) 282.257 56.7B4 12,538) 50.425 At 31 Decernter 2024 130.000 50.425 156.078 336,503 DEPRECIATION At 1 January 2024 Charge for the yEar On disposals 4.117 2.600 S4,7 1 5,094 (1.289) $8,817 21.476 11.289) 3.782 At 31 December 2024 6.717 3.782 68.505 79.004 NET BOOK VALUE At 31 December 2024 123.283 46.643 87.573 257,499 At 31 Decernber 2023 125.883 97.557 223.440 Pa9e 32 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 10. TANGIBLE FIXED ASSETS ICONTINUED) COMPANY Long4emi leasehold Fixtures and property ffitting$ Total COST OR VALUATION At 1 January2024 Oisposals 130.000 17,075 12,538) 147.075 (2,538) At 31 De¢¢mber 2024 130,000 14,537 144,537 DEPRECIATION At 1 January 2024 Charge for the year On disposals 4.117 2.600 5.843 1.668 (1,289) 9.960 4.268 (1,289) At 31 De¢ernber 2Q24 6,717 6,222 11939 NET BOOK VALUE At 31 Decemter 2024 123.283 8,315 131,598 At 31 December 2023 125,883 11,232 137.115 Pa9e 33 MERCY IN ACTION IA COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEM8ER 2024 11. FIXED ASSET INVESTMENTS Investments In subsldlary companies COMPANY COST OR VALUATION At 1 January 2024 1,000 At 31 December 2024 1,000 NET 800K VALUE At 31 December 2024 1,000 Ai 31 December 2023 1.000 PRINCIPAL SUBSIDIARIES The Ic4lov*ing was a sub$hJiary undertskirKJ ofthe C(xnpany. Name Company number RegisterEd office or prI￿1paI Prlnclpal activlty place of buslness Mer¢y in Aclion TradirKJ 11025273 11 Foxecote Avenue, Peasedown Retail Sales St.John. Bath. England, BA2 8SF Class of Holdlng shargs Included In ¢onsolidation Ordinary. 100% Yes Th8 financial results of the subsidiary for the )*arwere: Nam• Incom• Expenditure ProfiV{Loss) lor the year Net assets rcy in Action Trading 4768,043 14.569A861 198.557 61,247 Page 34 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 12. DEBTORS Group 2023 Company 2024 Company 2023 2024 DUE WITHIN ONE YEAR Trade deblo Amounts owed by group urKlertakirwJs Other debtors Prepayments and accrued inccmne Tax recoverable 34.379 10.517 47,851 82,877 194,861 5.878 96.850 82.375 208.565 60.010 234.038 52.425 80.077 283.994 59.938 403.135 458.388 336.106 393.668 13. CREDITORS." A141OUNTS FALLING DUE WITHIN ONE YEAR Group 2024 Gr￿￿P 2023 Company 2024 Company 2023 Bank loans Trade credit¢Y$ Amounts owed to group undertaknngs Other taxation and sotsat security Obligations under finan￿ lease aThJ hire purchase contracts Other c*edilors A¢uuals and deferred Incoffle 45,000 143.198 45,000 174,214 82,140 82.440 8.190 89.173 87.383 7.229 44,187 43,552 10.085 49.895 82.7n 32.759 6,287 16,974 3.703 13.109 375.142 381.078 196.031 21XJ,597 Pw35 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 14. cRED￿ORS. AMOUNTS FALLING DUE ￿ER MORE THAN ONE YEAR Group 2024 Group 2023 Bank loans Net oblwJations under finance lease aTrJ hire purthase contracts 37,500 35.298 82.500 72.798 82.500 The balance induded ab)ve is the Coronawrus Business InternJpti￿ Loan Scheme. Th? loan term is over 5 years with repayment instaknents vthich commenced 13 monlhs from the dale of drawdown. Interest is tharged on the Base Rate plus 1.98%. The loan is secured by way of a fixed charge over thé assets of the company. Included will¥n the above are amwnts tsllin9 due as folky￿.. Group 2024 Group 2023 BETWEEN ONE AND TWO YEARS Bank loans 37.500 45.(KK) BETWEEN TWO AND FIVE YEARS Bank loans 37.SCKI Page 36 MERCY IN ACTION . (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 15. STATEMENT OF FUNOS STATEMENT OF FUNDS- CURRENT YEAR Balance at 31 December 2024 Balance at 1 January 2024 In¢ome Expenditure UNRESTRICTED FUNDS General FurKls - all lunds . Mercy In Action TradirvJ 474.864 1.690 611081 (665,055) 4.768.IM3 {4709,486) 421,890 60,247 476.554 5.380.124 15.374.S41) 482.137 RESTRICTED FUNDS Cebu Project PETRA Housing ProjeL# Action Pantry Other Projects 110,601 216,544 25.163 19.SOO (110,601) (223.863) 125.163) {19.500} 7.819 500 7,819 371,808 (379,127) 500 TOTAL OF FUNDS 484.373 5,751.932 (5.753,668) 482,637 Page 37 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 15. STATEMENT OF FUNDS (CONTINUED) STATEMENT OF FUNDS . PRIOR YEAR Balance at 31 December 2023 Balance at 1 January 2023 Incaime Exp$ndiiur8 UNRESTRICTED FUNDS General Funds - all funds Mercy In Action Trading 612.619 221.245 409.253 1547,008} 4.394.135 (4.613,64J} 474.864 1.690 833.864 4.803.388 {5.160,6981 476.554 RESTRICTED FUNDS Cebu Project PETRA Housing Prciect Action Panty 171.173 220.468 19,460 {171.173) (263.189) (19,460) 50.540 7.819 50.S40 411.101 (453.822) 7.819 TOT￿ OF FUNDS 884.404 5,214.489 {5,614.520) 484.373 Restricted funds relate to Other Prc¥ects. Petra Housing project and CEBU proigcts in Ihe Phllipines. C•bu Proj•¢ts The wrpose of Ihis lurKI is to supw)rt MIA'S commilmenl lo chikjren and families in the Philippines. 550 children supported through school and college. three children's ￿)Me$ caring lor abandoned and orphaned dmldren. WoTkir¥J th famlies to bmg la¥tsng change. PETRA Project Four houses offerirvj supported liNing to young women and their babies facing homelessness. Adion Pantry Our Panty foOd￿kS alow households slru991ing fin¥￿1311Y to access gocKI qualty. nutritious food on weekly basts. Ouf projects support famllies wlh (*)Ihing. fumibjre. and household goods. Page 38 MERCY IN ACTION (A COMPANY LIMITED BY GUARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 RECONCILIATION OF NET MOVEMENT IN FUNDS TO NET CASH FLOW FROM OPERATING ACTIVITIES 16. Group 2024 Group 2023 Net expenditure f(ff the perw)d (as per Statement of Financial Acti4fjtie51 (1,7361 {400.031) ADJUSTMENTS FOR: Depreciation charges Inleresl paid Loss on the sate of fixed assets De¢reasel{itrease) in strKks Decreasel{Increase> In debtors In￿ease1(decreaSe) irb Greth"tsxs 21,476 12.167 1,249 (1741 57,979 (18.7471 17.590 (3.089) 89,098 177.056 NET CASH PROVIDED BYI(USED IN) OPERATING ACTlVtriES 72,214 {119.376) 17. ANALYSIS OF CASH AND CASH EQUIVALENTS Group 2024 Group 2023 Cash in hand 269.248 265.602 TOTAL CASH AND CASH EQUIVALENTS 269.248 265.602 18. ANALYSIS OF CHANGES IN NET DEBT At31 Dec•mber 2024 January 2024 Cash Ilows New financ8 leases Cash at bank and in hand 265.602 {45.1)00) {82.500) 269,248 {45.0001 137.5001 145.383) Dobl due wthin 1 year Debt due after 1 JEar Finance leases 45.000 5,042 (50,4251 138.102 S3.688 {$0.4251 141,365 Page 39 MERCY IN ACTION (A COMPANY LIMITED BY GVARANTEE) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 19. HIRE PURCHASE AND FINANCE LEASES Minimum lease payments und8r hire purchase faff due as klLw6.' Group 2024 Group 2023 Within one year Be￿ttn 1-2 Jears Between 2-5 10,085 10,085 25213 45.383 PENSION COMMITMENTS The grwp operates a defined contribution pensKx) scheme. The assets of the stheme a￿ held separat&ty from those of Ihe group in an independenty administered fund. The pension cost charge represents contributions payable by the group to the fund and amO￿ted to £43.446 12023.. £38.9561. Contributions lotalling £18.107 (2023.. £10.764) were payabte to the fund at the balarrk sheet date and are included in creditors. 21. OPERATING LEASE COMMITMENTS At 31 De¢omb8r 2024 thg Group and the Company had commitments io make fvlure minimum lease payThents under rbwancellable operatiTh3 leases as folbws.. Group 2024 Group 2023 Company 2024 C¢)mpany 2023 Not later than 1 year Lalor than 1 year and Th)t latèr Ihan S years Later than 5 years 677.589 2,248.069 1.086.965 612.761 2.110.547 1.369.340 677.589 2.248.069 1.086.965 612.761 2,110,547 1,369,340 4.012.623 4.092.648 4.012.623 4.092.648 RELATED PARTY TRANSACTIONS The Company has not ente￿d into any related paty transaction durirYJ the year. nor are there any outstandirKJ balar￿e$ owiry bet¥*en related part*s and Ihe Company a131 Decembw 2024. CONTROLUNG PARTY There Is no eontrdling paty. Page 40