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← The Salvation Army Retired Officers Allowance Scheme

2024-03-31-accounts

The Salvation Army Retired Officers Allowance Scheme

11[th ] Report and Accounts for the year ended 31 March 2024

THE SALVATION ARMY International Headquarters 101 Queen Victoria Street London EC4V 4EH

MISSION STATEMENT

International Headquarters exists to support the General as he/she leads The Salvation Army to accomplish its God-given worldwide mission to preach the gospel of Jesus Christ and meet human needs in his name without discrimination.

THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEME TRUSTEE’S REPORT

The Trustee is pleased to present the annual report for The Salvation Army Retired Officers Allowance Scheme for the year ended 31 March 2024.

STRUCTURE, GOVERNANCE AND MANAGEMENT

The General, acting under powers contained in The Salvation Army Act 1980, established The Salvation Army International Trust (‘SAIT’) to further the worldwide work of The Salvation Army. The Salvation Army International Trustee Company (‘SAITCo’), a company limited by guarantee, was formed and appointed as the ordinary Trustee of the International Trust. The Salvation Army Retired Officers Allowance Scheme (referred to as ‘the Scheme’ or ‘ROAS’) is a separately registered charity that is administered by SAITCo as the trustee. The directors of SAITCo are thus effectively the trustees of both SAIT and the Scheme.

The Salvation Army International Trustee Company – Ordinary Trustee

Company Registration No 2538134

The Salvation Army International Trust

Registered Charity No 1000566 Trust Settlement Deed dated 21 September 1990

The Salvation Army Retired Officers Allowance Scheme

Registered Charity 1153681 Declaration of Trust dated 13 December 2012

The General of The Salvation Army, as founder of SAIT and the Scheme, specifies the qualifying offices and the experts for SAITCo. Qualifying offices are such offices of The Salvation Army as the General may from time to time specify by notice to SAITCo and experts are persons who satisfy such conditions and/or who have such qualifications or expertise as the General may from time to time specify by notice to SAITCo. Both the qualifying offices’ holders and the experts make application for membership of SAITCo with consent to become Directors and are accepted by the Board of Directors of SAITCo. All new directors follow teaching modules prepared specifically for The Salvation Army on its constitution and the duties and responsibilities of directors. In addition individual directors follow external courses.

Directors

Commissioner Lyndon Buckingham from 3 August 2018 to 2 August 2023 Commissioner Keith Conrad from 1 August 2019 Commissioner Lee Graves MBA from 1 November 2020 to 31 August 2023 Commissioner Edward Hill MDiv, MACE from 1 May 2021 Commissioner Lyn Hills from 1 July 2024 Commissioner Debbie Horwood from 1 July 2021 Commissioner Eva Kleman from 1 November 2020 to 30 June 2024 Commissioner John Kumar Dasari from 2 April 2024 Commissioner Robyn Maxwell from 1 November 2020 Commissioner Kenneth Maynor from 2 September 2023 Commissioner Susan McMillan BCom, MBA, FCPA, FCGA from 17 July 2023 Commissioner Garth Niemand MBA, BTh from 3 September 2023 Commissioner Suresh Pawar from 12 November 2020 to 1 April 2024 Lieut-Colonel Russell Malcolm BCom, DipApTh, MBA, CAANZ CA from 1 February 2022 to 21 May 2023 Mr Robin Foale from 1 May 2019 Mr James Gardner MA from 1 May 2022 Mr Mark Goodale BA, FIA from 1 May 2019 Mr Robert Lister from 1 January 2016 Mr Tim Sketchley BA, MA (Cantab), FRICS from 1 May 2022

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THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEME TRUSTEE’S REPORT

Audit Committee Members

Ms Rosie Bichard GCB.D, CFA (Chair) Mr Mark Goodale BA, FIA Mr Tim Sketchley BA, MA (Cantab), FRICS Mr Andrew Stickland BA(Hons), FCA

Principal Officers

Commissioner Lee Graves MBA Managing Commissioner Garth Niemand MBA, BTh Managing Dr Matthew Carpenter BA, MBA, DBA, MCMI Company Secretary Lieut-Colonel Russell Malcolm BCom, DipApTh, MBA, CAANZ CA Head of Finance to 21 May 2023 Commissioner Susan McMillan BCom, MBA, FCPA, FCGA Head of Finance from 22 May 2023 Mr Kaloan Belito BA, DchA, MSc, FCCA Chief Accountant

Managing Director to 31 August 2023 Managing Director from 3 September 2023 Company Secretary Head of Finance to 21 May 2023 Head of Finance from 22 May 2023 Chief Accountant

Bankers

HSBC Bank plc 60 Queen Victoria Street London EC4N 4TR

Reliance Bank Limited Faith House, 23-24 Lovat Lane London EC3R 8EB

National Westminster Bank 38 Strand London WC2H 5JB

Solicitors Slaughter and May 1 Bunhill Row London EC1Y 8YY

Auditors

Knox Cropper LLP 65 Leadenhall Street London EC3A 2AD

Investment Manager

Sarasin & Partners LLP Juxon House 100 St Paul’s Churchyard London EC4M 8BU

The Salvation Army is, for administrative purposes, divided into autonomous territories (generally by region or country). Each territory is governed, through local registration(s), in accordance with the applicable local laws and the Scheme works with and through these separate legal entities. However, The Salvation Army remains under the oversight, direction and control of the General of The Salvation Army, as set out in greater detail in The Salvation Army Act 1980.

Connected Entities

The Salvation Army International Trust (‘SAIT’)

Registered Charity No 1000566 Trust Settlement Deed dated 21 September 1990

SAIT is a separately registered charity that is administered by SAITCo as the trustee. The banking company, Reliance Bank Limited, is a wholly owned subsidiary of SAIT.

SAIT exists to further the work of The Salvation Army, which is to advance the Christian religion and meet human need as and where it occurs throughout the world, and support the work of International Headquarters (‘IHQ’). IHQ is responsible for coordinating the international work and overseeing strategy.

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The Salvation Army in the United Kingdom and the Republic of Ireland

The work of The Salvation Army in the United Kingdom and the Republic of Ireland is directed by the United Kingdom and Ireland Territory, with resources provided through trusts administered by The Salvation Army Trustee Company. The two principal trusts of this territory are The Salvation Army Trust and The Salvation Army Social Work Trust.

Governance

SAITCo utilises a corporate committee structure to supervise operations of the Scheme. This includes operation of a ROAS Investment Committee (exclusively focused on the Scheme portfolio), Audit Committee and Risk Management Committee with significant involvement from the five Independent Non-Executive Directors of SAITCo. The ROAS Investment Committee is chaired by an Independent Non-Executive Director of SAITCo and considers overall strategy for the Scheme on an ongoing basis recognising a range of available actions including adjusting grants, seeking further donations from territories or external donors and adjusting the mandate of the investment manager. The terms of reference for all subsidiary committees and minutes of all meetings of these committees are reviewed by SAITCo Directors on a regular basis with the latest review of terms of reference undertaken in January 2024.

SAITCo has a Serious Incident Reporting Policy and Procedure in place, last reviewed in August 2024, outlining the process to be followed to decide if an incident relating to the Scheme would be appropriate to be reported to the Charity Commission as a serious incident in accordance with the latest regulatory guidance.

A well-established Internal Audit Department also carries out a cycle of reviews of the systems in operation within IHQ and in all countries where The Salvation Army is working and a framework of internal controls and local financial management systems are in place, supported by a manual of International Financial and Accounting Standards (‘IFAS’) for The Salvation Army issued from IHQ. Salvation Army territories also share findings of locally instructed external audits of territorial operations with IHQ for review and consideration within the internal audit process. The IFAS manual was reviewed and updated during 2022/23, following a comprehensive committee-led drafting process including formal review of consultation materials with 50 Salvation Army territories, with a revised 2023 edition of IFAS issued from IHQ in February 2023 and effective January 2024. A project is also well advanced to roll out cloud-based accounting software to all financially supported territories by 2025/26, enabling more regular and more detailed reporting both within territories and from territories to IHQ, with 23 of the 41 financially supported territories using the software as at November 2024. A new reporting mechanism from all territories to IHQ commenced in 2020/21 and was further developed in 2022/23, based upon the suite of 16 Key Financial Indicators (‘KFIs’) defined within the IFAS manual, allowing IHQ to be better informed of the financial position in territories as a significant enhancement to internal controls. These structures and initiatives enable ongoing assessment and review of the local use of grants allocated from the Scheme within recipient countries.

An Audit Committee meets on a quarterly basis and comprises four members, including two Independent NonExecutive Directors of SAITCo, with none of the members holding executive responsibility for management of the Scheme. The Committee holds delegated responsibility on behalf of SAITCo for continual review of the financial management and internal controls of the Scheme and holds a direct line of communication to the internal and external auditor.

SAITCo has undertaken a wide ranging and significant governance review in recent years assisted by external consultants and involving a review of SAITCo membership, structure, interrelationships with other IHQ bodies, performance and effectiveness as well as benchmarking to good governance practice as outlined within the Charity Governance Code.

A Board Charter for SAITCo was developed during 2019/20 as an early action within the governance review process

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and remains in place. The Charter defines the roles, responsibilities and authorities of SAITCo in the effective and efficient functioning of SAIT and the Scheme and considers mission objectives, board roles, board procedures, board composition, board committees, board induction and ongoing training, conflicts of interest and board evaluation.

During 2020/21, the Articles of Association of SAITCo were revised and the SAITCo Board Charter further reviewed and updated to embed reforms prompted by the governance review. An operational review of IHQ was then undertaken with a number of enhancements implemented in 2021/22 and 2022/23 including changes to the operation of subsidiary boards, committees and councils, update of expenditure authority thresholds for financial decision-making and internal staffing reorganisations.

During 2023/24, an external consultant was engaged by SAITCo to benchmark IHQ practice to the most recent update to the Charity Governance Code, which focuses on the principles of integrity & equality and diversity & inclusion, highlighting opportunities for further development. An action plan was developed to further align SAITCo practice to the Code and was approved by SAITCo for implementation from May 2024. SAITCo already embraces many governance activities outlined within the Code such as conducting board induction and training, board performance monitoring, managing potential or actual conflicts of interest and regularly reviewing terms of reference for subsidiary boards with opportunity for further development in areas such as board consultation with beneficiaries and board review of longer-term financial strategy.

Additional work was also undertaken in 2023/24 to review the risk management protocols of SAITCo with a revised and refreshed SAITCo Risk Register approved by SAITCo for implementation from January 2024. A further body of agreed actions is anticipated in 2024/25 including a further review of the SAITCo Articles of Association and SAITCo Board Charter as well as enhancements to board strategic planning processes.

Remuneration

The Directors of SAITCo comprise senior Salvation Army officers and Independent Non-Executive Directors with specialist expertise. Taxable allowances and benefits as well as Directors expenses are met from SAIT and are not charged to the Scheme.

Modern Slavery Act

The Salvation Army is very active in bringing practical assistance to those whose lives have been affected by the evil of modern slavery and as such is sensitive to the danger of inadvertently finding itself falling short of its own beliefs and standards in this regard as well as the standards set out in the UK Government's Modern Slavery Act 2015. The Modern Slavery Act 2015 compliance statement for SAITCo, reviewed and updated in November 2023, can be accessed at http://www.salvationarmy.org/ihq/modernslaveryact2015 and provides details of the variety of measures undertaken by SAITCo to avoid and reduce the risk of inadvertently supporting modern slavery in any way.

Fundraising

Section 162a of the Charities Act 2011, as amended by the Charities Act 2022, requires charities to make a statement regarding fundraising activities. Although the Scheme does not actively undertake widespread fundraising from the general public, the legislation defines fund raising as “soliciting or otherwise procuring money or other property for charitable purposes”. Such amounts receivable are presented in the Accounts as “Other Donations”.

In relation to the above, SAITCo confirms that no fundraising activity has been taken by the Scheme, or by anyone acting on its behalf, that no fundraising standards or scheme for fundraising regulation has been subscribed to by the Scheme, or by anyone acting on its behalf, that no complaints in relation to fundraising activities have been received and that any solicitations are managed internally, without involvement of commercial participators or professional fund-raisers.

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OBJECTIVES AND ACTIVITIES

Public Benefit

In setting and reviewing the Scheme’s aims and objectives and planning future activities, SAITCo pays due regard to the guidance issued by the Charity Commission on public benefit. The main activities of the charity are:

The charitable objects are achieved by issuing grants to Salvation Army territories and regions around the world to fund the provision of retirement allowances to officers of The Salvation Army.

During the reporting period, the Scheme was able to cover 100% of the cost of the basic retirement allowances of Salvation Army officers in territories, regions and commands requiring this financial support.

ACHIEVEMENTS AND PERFORMANCE

The Scheme distributed grants to 37 overseas territories during the year with allocated grants totalling £4,716,148 (2023: £4,725,037) providing funding towards the retirement allowances of 3,406 officers of The Salvation Army (2023: 3,479). The following illustrative testimonials have been provided by recipient territories:

Ghana Territory

“ROAS grants make a huge difference to retired officers in Ghana Territory.

The grants allow retired officers to shop for food items and also to access healthcare including reviews, checkups, physiotherapy and use of supplements for chronic ailments. ROAS grants also help our retired officers pay the rent and utility bills and meet other essential and basic needs.

All of our retired officers appreciate the support given by ROAS which is vitally important and helps make their lives better.”

Singapore, Malaysia, Myanmar and Thailand Territory

“The vital lifeline provided by ROAS grants is no better illustrated than by the position of retired officers in Myanmar. The country of Myanmar has been grappling with government turmoil and inflation for some time which has caused widespread hardship. Many people struggle to afford basic necessities like food and medicine.

ROAS grants provide a critical safety net for a small group of around 25 retired officers in Myanmar. The allowance helps them to cover essential expenses and maintain a basic living standard. This financial support has been especially important as many of the retired officers do not have a national pension plan to lean on.

The funding from ROAS demonstrates the importance of social safety nets during times of economic crisis and has made a real difference.”

Eastern Europe Territory

“The retired officers of Eastern Europe Territory express gratitude and appreciation for the ongoing funding support provided by ROAS.

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As a result of ROAS grants, they need not worry about heating during winter and other daily utilities though these and other basic household essentials can be very expensive.

They can live in heated homes with ROAS support as the pension provided by the government is often sufficient only for food and medicine. High inflation is also often a problem which can make it harder to meet daily needs without additional support.

Once again, thank you very much for the crucial support offered by ROAS.”

Bangladesh Territory

“The Salvation Army’s work started in Bangladesh by offering disaster support after a cyclone in 1971, which built the foundation for a ministry to those in great need. The country of Bangladesh also became an independent nation in 1971 and has since been developing to become more prosperous and self-reliant.

The territory is on its own growth journey towards sustainability and receipt of ROAS grants allows territorial staff to focus limited resources on other operating requirements knowing funding for retired officers is secured.

ROAS grants are a great support to the territory and our retired officers are very grateful for the amounts received. The high cost of living and especially healthcare costs make it difficult for people to get by and ROAS grants make a vital and positive difference to the daily life of our retired officers.”

Brazil Territory

Brazil is the sixth largest country in the world with a large population of older people including the retired officers of Brazil Territory.

Old age is a phase of life marked by valuable experiences and achievements. At this stage, when the body goes through natural changes it is important to take extra care of health and diet and there can be an increase in spending on medicines which are expensive in Brazil and can absorb an increasingly significant part of personal budgets.

ROAS grants are invaluable to our retired officers and provide them with a better quality of life with access to good food, health treatment and the ability to purchase medicines.

The ROAS scheme is a great help and the security of receiving regular payments allows the retirement years of our retired officers to be filled with tranquillity and wellbeing.

We are grateful to ROAS for the care and support provided to our retired officers by this funding stream”

Key Statistics

Future Plans

The longstanding aim of the Scheme has been to build an investment portfolio sufficient to cover up to 100% of the cost of the basic retirement allowances of Salvation Army officers in territories requiring this financial support.

This significant milestone was realised with commencement of grants to cover 100% of the cost of the basic retirement allowances effective from 2016/17, with grants subsequently maintained at this level including for the year

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under review. Achievement of this keynote objective was only possible due to the strong financial position of the Scheme (see Financial Review below) with the operational impact upon beneficiaries to be continually monitored and assessed in future years.

Going forward, the Scheme will focus upon maintaining total grant funding at a level sufficient to cover 100% of the cost of the basic retirement allowances of Salvation Army officers in territories requiring this financial support, within a sustainable funding model.

The Trustee continues to monitor developments closely in relation to the Russia/Ukraine crisis and other external events and remains confident that the level of reserves held is adequate in the changing economic climate and does not impact adversely on the Scheme’s going concern status. The Trustee considers there are no material uncertainties about the charity’s ability to continue as a going concern.

SAITCo will continue to actively monitor the impact of the Russia/Ukraine crisis and other external events upon the operations of the Scheme as well as those of SAIT and Salvation Army territories with updates provided to the board considering the impact of the crisis upon global Salvation Army operations, the financial position of the Scheme, the investment portfolio of the Scheme and associated logistical matters.

The Scheme is well placed to meet external events and achieve its focused grant-making objectives due to its strong financial position, investment strategy and reserves policy (see Financial Review below) all underpinned by the governance structures of SAITCo.

FINANCIAL REVIEW

Total income of £3,653,650 (2023: £3,216,358) was received during 2023/24 including contributions from Salvation Army territories totaling £292,847 (2023: £299,951).

The total investment income of £3,360,742 (2023: £2,916,407) received during 2023/24 comprised interest receivable of £324,820 (2023: £136,617), dividends receivable of £1,516,813 (2023: £1,499,529) and income from gilts and bonds of £1,519,109 (2023: £1,280,261). Total expenditure showed an decrease from £5,183,819 (2023) to £5,156,358 (2024) including distributions to recipient territories of £4,716,148 (2023: £4,725,037), cost of raising funds of £433,351 (2023: £452,226) and other costs of £6,860 (2023: £6,556).

Movement in listed investments recorded a net gain of £5,202,271 following a net loss of £8,020,370 (2023), reflecting market conditions and representing both the realised and unrealised gains/losses arising on sales and the market value of investments held at year end.

A transfer of £1,500,000 (2023: £2,000,000) was made from expendable endowment funds to unrestricted funds upon instruction from the ROAS Investment Committee in accordance with the Reserves Policy (see below).

The net movement in funds for the year shows an increase in expendable endowment funds of £3,702,271 and a decrease in unrestricted funds of £2,708. Total funds of £126,561,012 were held at year end comprising £124,614,717 in expendable endowment funds and £1,946,295 in unrestricted funds.

Investments

Investments are managed under the terms of an investment management agreement with Sarasin & Partners LLP. The investment manager is required to make investments on behalf of the Scheme in line with benchmarks that have been set and against which performance is measured.

The ROAS Investment Committee which sits to review investment performance receives periodic reports on matters pertinent to its investment policy and this facilitates discussion which, in turn, enhances the committees understanding of the relationship between its Christian conviction and ethos and investment return; and even more importantly, the positive

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effect that its policy can have on companies which themselves may (or may not) be seeking to improve conditions in many parts of the world. The reports are tabled at meetings of SAITCo so that those Directors who do not sit on the Investment Committee have an opportunity to add to the debate and have greater understanding of the issues that the Scheme can tackle through its investment policy.

SAITCo has established an ethical investment policy to reflect The Salvation Army's ethical and moral stance. Therefore, this policy excludes investment in companies which derive more than 10% of their revenues in aggregate from any of the following categories:

a) the production and/or sale of alcohol

b) the production and/or sale of tobacco

c) the manufacture and/or sale of whole weapons, weapon platforms and weapon systems

d) the manufacture and/or sale of strategic parts for weapon systems

e) the promotion or operation of gambling enterprises

f) the provision of adult entertainment services

g) the publication and/or sale of pornographic media

h) the extraction of thermal coal or the production of oil from tar sands

For the avoidance of doubt in relation to sub-paragraphs (c) and (d) above, 'weapons' refers to both nuclear and conventional weapons. In addition, investment is excluded in companies with disregard for human rights and/or the pollution of the environment.

Beyond the ethical statement, the investment manager is directed to consider The Salvation Army Act 1980 and to monitor the portfolio to ensure companies held within it adhere to best practice in corporate governance, employment conditions, social responsibility and environmental sustainability. Currencies other than those of OECD countries should be limited to a maximum of 30% of the total portfolio.

The following table gives the long-term ranges and current weightings expressed in percentages of the Scheme investment funds:


unds:
Asset Type Long-term Range Year End Position
at 31/03/2024 Weightings
Long-dated Global Bonds 15 - 35% 25.9%
Equities 55 - 75% 67.4%
Alternatives 0 - 10% 4.0%
Liquid Assets 0 – 10% 2.7%
Total 100.0%

For the year ended 31 March 2024, the portfolio total return amounted to 7.4% against an ethically adjusted comparator return of 14.8%.

Equity markets for much of 2023 were broadly characterised by narrow leadership and sector rotation away from the strong performers of 2022 (energy and utilities sectors) in favour of technology, specifically companies with ties to the fast-growing world of artificial intelligence. Equity market returns were highly concentrated in just a few stocks, some of which were held by the portfolio while others were not as the portfolio is more diversified from a risk/return perspective, investing in high quality companies across different sectors that should benefit from long-term, global thematic trends. Towards the end of 2023 the positive performance continued and also slightly broadened into other sectors and asset classes, with bonds staging a rally from their lows in anticipation of interest rate cuts to come.

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Investment strategy going forward will continue to be closely monitored by the ROAS Investment Committee in consideration of external events and emergent market conditions.

Reserves

The capital funds of the Scheme are held as expendable endowment funds in accordance with the wishes of the donors. The purpose is to invest these funds to generate a sufficient return to fund the grants to overseas territories covering up to 100% of the cost of the basic retirement allowances for retired officers in accordance with long standing objectives.

During 2018/19, the ROAS Investment Committee concluded a consultation with prior donors to the Scheme which secured their support for use of investment gains as well as investment income to fund the expenditure of ROAS with this enacted via a year end procedure agreed by the Committee with the external auditors and in effect for the year under review. Under this procedure the ROAS Investment Committee assess the forecast year end position, reviews the projected overall surplus/deficit for the current year and the balances carried forward on unrestricted funds and expendable endowment funds, and decides if a transfer from expendable endowment funds to unrestricted funds (use of investment return to fund annual expenditure) is necessary.

Following deliberations, the Committee instructed a transfer of £1,500,000 from expendable endowment funds to unrestricted funds for 2023/24 with a final balance, following processing of the transfer, of £124,614,717 in expendable endowment funds and £1,946,295 in unrestricted funds.

Principal Risks and Uncertainties

SAITCo acknowledges its responsibilities relating to the management of risk. A formal risk management programme continues to operate allowing risks to be identified, classified and prioritised in terms of potential occurrence and impact. The Board of Directors of SAITCo has appointed a Risk Management Committee consisting of ten members, including an Independent Non-Executive Director of SAITCo.

A Risk Manager has been appointed and a Risk Register is maintained and kept under regular review by the Risk Manager and the Risk Management Committee. The Risk Management Committee works with the Risk Owner of each major risk to ensure acceptable action is taken to manage the risk and to establish suitable systems to reduce the likelihood of harmful outcomes occurring and the impact on the organisation should they occur.

In addition to the above framework, a range of additional protocols are in place allowing SAITCo to actively monitor the impact of the Russia/Ukraine crisis and other external events upon the operations of the Scheme as well as those of SAIT and Salvation Army territories with working parties appointed by SAITCo as needed to undertake tasks in specific areas and provide regular updates to the board considering the impact of any material external crises upon global Salvation Army operations, the financial position of the Scheme, the investment portfolio of the Scheme and associated logistical matters.

A significant work project has been progressed by the Risk Management Committee during 2023/24, supported by an external consultant engaged by SAITCo, to review existing risk management protocols and the formatting of the risk register against latest Charity Commission guidance and sectoral best practice. A revised and refreshed risk register format was finalised by the Committee and approved by SAITCo for implementation from January 2024, placing additional emphasis upon scoring of inherent and residual risks and analysis of cyber, data protection and environmental risks among other changes.

The main risks and uncertainties faced by the Scheme, as detailed in the SAITCo Risk Register at the end of the financial year under review, are outlined below in top-down priority order together with a summary of the mitigating strategies being pursued to manage these risks:

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Key Risk Mitigating Strategy
Investment risk for ROAS portfolio including but not
limited to inflation risk, shortfall risk, country risk,
currency risk, interest rate risk, volatility risk, liquidity
risk, manager risk and market risk.		 Perpetual review of investment performance and
development of risk mitigating strategies by ROAS
Investment Committee which includes external
experts and is chaired by an Independent Non-
Executive Director of SAITCo.
Unexpected demands for ROAS distributions. Regular submission of budgets and retired officer
allowance scales from territories for approval at IHQ
Boards. Ongoing review of ROAS distribution levels
by ROAS Investment Committee and SAITCo.
Deficient financial administration of ROAS grants in
territories.		 Continuous IHQ monitoring of global operations on a
territory-by-territory basis. A suite of policies and
procedures in place to manage operational risks.
Annual external audits of territories with internal audits
also undertaken periodically depending on the extent of
perceived risk.

Statement of Trustee’s Responsibilities

SAITCo is required to prepare an annual report and financial statements in order to discharge its duty of public accountability and stewardship. This report must give a true and fair view of the Scheme’s affairs and its incoming resources and resources expended. In so doing SAITCo is required to account for all money and other assets which have been entrusted to the Scheme for whatever purpose. It is the responsibility of SAITCo to safeguard the assets of the Scheme and take all reasonable steps to prevent fraud and other irregularities.

SAITCo is responsible for ensuring that the assets of the Scheme are employed solely in furthering the objects as set out in the Declaration of Trust.

SAITCo is responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Scheme. Charity law requires the Trustees to prepare financial statements for each financial year in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). In preparing the financial statements, SAITCo is required to:

For and on behalf of the Directors of The Salvation Army International Trustee Company.

Commissioner Garth Niemand MBA BTh Managing Director

15 November 2024

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REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEE OF THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEME

Opinion

We have audited the financial statements of The Salvation Army Retired Officers Allowance Scheme (the ’charity’) for the year ended 31 March 2024 which comprise the Statement of Financial Activities, the Balance Sheet, Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis of opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance 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 charity’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.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditors’ report thereon. The trustees are responsible for the other information.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

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REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEE OF THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEME

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 there is 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 in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion:

Responsibilities of Trustees

As explained more fully in the Trustee’s Responsibilities Statement set out on page 10, the Trustee is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustee determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustee is responsible for assessing the charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustee either intend to liquidate the charity or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.

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

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REPORT OF THE INDEPENDENT AUDITORS TO THE TRUSTEE OF THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEME

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:

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.

Use of the audit report

This report is made solely to the charity’s trustee 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 charity’s trustee those matters we are required to state to the trustee in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and the charity’s trustee for our audit work, for this report or for the opinions we have formed.

Knox Cropper LLP Statutory Auditor 65 Leadenhall Street London EC3A 2AD

15 November 2024

Knox Cropper LLP is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.

13

THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEME STATEMENT OF FINANCIAL ACTIVITIES FOR THE PERIOD ENDED 31 MARCH 2024

Notes
INCOME AND ENDOWMENTS FROM
Voluntary Income
2
Received from Salvation Army Territories
Other Donations
Investments
3
Total Income
EXPENDITURE ON
Raising Funds
4
Charitable Activities
5
Total Expenditure
Net Gains/(Losses) on Investments
9(b)
Net Income/(Expenditure)
Transfers between Funds
12
Other Recognised Gains/(Losses)
Other Gains/(Losses)
Net Movement in Funds
Reconciliation of Funds
Total Funds Brought Forward 1 April 2023
Total Funds Carried Forward 31 March 2024		 ----------------------- 2024-------------------------
------------------------2023--------------------
Unrestricted
Funds
Expendable
Endowment
Funds
Total
Unrestricted
Funds
Expendable
Endowment
Funds
Total
£
£
£
£
£
£
292,847
-
292,847
299,951
-
299,951
61
-
61
-
-
-
292,908
-
292,908
299,951
-
299,951
3,360,742
-
3,360,742
2,916,407
-
2,916,407
3,653,650
-
3,653,650
3,216,358
-
3,216,358
433,351
-
433,351
452,226
-
452,226
4,723,007
-
4,723,007
4,731,593
-
4,731,593
5,156,358
-
5,156,358
5,183,819
-
5,183,819
-
5,202,271
5,202,271
-
(8,020,370)
(8,020,370)
(1,502,708)
5,202,271
3,699,563
(1,967,461)
(8,020,370)
(9,987,831)
1,500,000
(1,500,000)
-
2,000,000
(2,000,000)
-
-
-
-
-
-
-
(2,708)
3,702,271
3,699,563
32,539
(10,020,370)
(9,987,831)
1,949,003
120,912,446
122,861,449
1,916,464
130,932,816
132,849,280
1,946,295
124,614,717
126,561,012
1,949,003
120,912,446
122,861,449

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

The notes on pages 17 to 23 form an integral part of these Financial Statements.

14

THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEME BALANCE SHEET AS AT 31 MARCH 2024

Notes 2024 2023
£ £
FIXED ASSETS
Investments 9 118,330,777 111,622,205
118,330,777 111,622,205
CURRENT ASSETS
Investments 9 3,325,944 6,925,052
Debtors and Prepayments 10 590,036 845,784
Bank and Cash 6,273,771 6,122,291
10,189,751 13,893,127
Current Liabilities:Amounts falling due within one year 11 (1,959,516) (2,653,883)
NET CURRENT ASSETS 8,230,235 11,239,244
NET ASSETS 13 126,561,012 122,861,449
FUNDS
Unrestricted Funds 1,946,295 1,949,003
Expendable Endowment Funds 124,614,717 120,912,446
TOTAL FUNDS 12 126,561,012 122,861,449

Approved on behalf of The Salvation Army International Trustee Company on 15 November 2024 by:

Edward Hill - Chairman

Garth Niemand - Managing Director

15

THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEME STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 31 MARCH 2024

CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Investments
Sales Proceeds from Investment Sales
Change in Cash and Cash Equivalents during the year
Cash and Cash Equivalents at start of the year
CASH AND CASH EQUIVALENTS AT END OF YEAR
Reconciliation of Net Movement in Funds to
Net Cash Flow from Operating Activities
Net Movement in Funds
Adjustments for:
Net (Gains)/Losses on Investments
(Increase)/Decrease in Debtors
Increase/(Decrease) in Creditors
Net Cash Provided by Operating Activities
Analysis of Cash and Cash Equivalents
Deposits Held by Investment Manager
Cash Held by Investment Manager
Cash at Bank
Total Cash and Cash Equivalents		 2024
£
(1,941,327)
(30,680,435)
29,174,134
(1,506,301)
(3,447,628)
13,047,343
9,599,715
3,699,563
(5,202,271)
255,748
(694,367)
(1,941,327)
3,091,843
234,101
6,273,771
9,599,715		 2023
£
(1,186,811)
(43,420,393)
45,165,649
1,745,256
558,445
12,488,898
13,047,343
(9,987,831)
8,020,370
(184,651)
965,301
(1,186,811)
6,656,377
268,675
6,122,291
13,047,343

16

THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEME NOTES TO THE ACCOUNTS FOR THE PERIOD ENDED 31 MARCH 2024

1. ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of the financial statements are set out as follows:

The accounts have been prepared under the historical cost convention, subject to the inclusion of investments at market value, and are in compliance with the Accounting and Reporting by Charities: Statement of Recommended Practice (FRS 102 second edition) (effective 1 January 2019), the Charities Act 2011, The Salvation Army Act 1980 and FRS 102, the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland. The charity is a public benefit entity as defined by FRS 102.

Other income is recognised when all conditions of receipt are met.

17

THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEME NOTES TO THE ACCOUNTS FOR THE PERIOD ENDED 31 MARCH 2024

2. INCOMING RESOURCES

Contributions were received during the period from the following Salvation Army Territories and other donors.

Canada and Bermuda
France and Belgium
Other
VESTMENT INCOME
Interest Receivable
Dividends Receivable
Income from Gilts and Bonds
ST OF RAISING FUNDS
Investment Management Costs		 Unrestricted
Contributions
£
289,434
3,413
292,847
61		 Unrestricted
Contributions
£
289,434
3,413
292,847
61		 2024
£
289,434
3,413
292,847
61		 2023
£
299,951
-
299,951
-
292,908 292,908 299,951
2024
£
324,820
1,516,813
1,519,109		 2023
£
136,617
1,499,529
1,280,261
3,360,742 2,916,407
2024
£
433,351		 2023
£
452,226
433,351 452,226

3. INVESTMENT INCOME

4. COST OF RAISING FUNDS

18

THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEME NOTES TO THE ACCOUNTS FOR THE PERIOD ENDED 31 MARCH 2024

5. CHARITABLE EXPENDITURE

The following grants have been made during the period:

GRANTS
Angola
Bangladesh
Brazil
Caribbean
Congo (Brazzaville)
Democratic Republic of Congo
Eastern Europe
Ghana
India Central
India Eastern
India Northern
India South Eastern
India South Western
India Western
Indonesia
Kenya East
Kenya West
Latin America North
Liberia and Sierra Leone
Malawi
Mexico
Mozambique
Nigeria
Pakistan
Papua New Guinea and Solomon Islands
Philippines
Russia (see * below)
Singapore, Malaysia and Myanmar
South America East
South America West
Southern Africa
Sri Lanka
Taiwan
Tanzania
Uganda
Zambia
Zimbabwe and Botswana
OTHER EXPENDITURE
Bank Charges
Audit Fees		 2024
£
6,055
4,387
162,153
305,130
126,682
144,789
17,801
60,873
252,621
133,337
137,852
358,124
429,249
258,766
163,964
112,769
325,860
91,988
9,255
5,640
202,734
4,140
69,873
65,100
61,947
95,192
22,970
21,663
108,131
457,586
212,335
41,737
25,358
8,307
29,472
52,392
129,916
4,716,148
55
6,804
4,723,007		 2023
£
10,140
3,314
73,090
323,903
113,769
156,396
20,362
64,504
241,595
126,598
129,361
339,582
425,657
254,459
178,979
129,654
393,283
81,394
8,433
7,881
179,940
3,453
124,981
65,114
64,472
91,715
36,585
21,887
168,596
414,919
230,871
34,779
25,661
5,962
24,353
60,540
88,855
4,725,037
76
6,480
4,731,593

The above grants represent transfers made to overseas Salvation Army Territories to help fund the provision of allowances payable to retired Salvation Army Officers.

*Grants to Russia territory cannot be transferred into Russia in accordance with current banking restrictions imposed by the United Kingdom government. They are transferred to the territory’s UK bank account held at Reliance Bank where the territory will draw on them once permitted under banking regulations.

19

THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEMENOTES TO THE ACCOUNTS FOR THE PERIOD ENDED 31 MARCH 2024

6. TRUSTEES

Remuneration & Expenses

The directors of the Salvation Army International Trustee Company, the trustees, comprise senior Salvation Army officers and non-executive directors with specialist expertise. Taxable allowances and benefits, as well as trustee expenses are borne by the Salvation Army International Trust.

The non-executive directors did not receive any remuneration for their services.

7. AUDIT COSTS

The amount payable to the auditors for the audit of these financial statements amounts to £5,670 (2023: £5,400) excluding VAT.

8. TAXATION

As a registered charity, the Scheme is entitled to tax exemptions from tax available to charities on its income and gains.

20

THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEME NOTES TO THE ACCOUNTS FOR THE PERIOD ENDED 31 MARCH 2024

9. INVESTMENTS

Market Value
2024
(a) Listed Investments
£
Bonds
Government Bonds
3,372,115
Non-Government Bonds
27,722,208
31,094,323
Equities
UK Equities
9,187,709
Asian Equities
11,225,323
European Equities
12,736,510
North America Equities
51,709,269
Multi Regional Equities
2,377,643
87,236,454
Fixed Asset -Investments (See note 9(b))
118,330,777
Deposits
Sterling Deposits managed by Sarasins
3,091,843
Cash held with Broker
234,101
3,325,944
Total Investments
121,656,721
(b) Movement in Listed Investments
Market Value at 1 April 2023
111,622,205
Purchases in year
30,680,435
Sales Proceeds
(29,174,134)
Net Gains/(Losses) – Listed Investments
5,202,271
Market Value at 31 March 2024
118,330,777
10.
DEBTORS
Accrued Interest and Dividends
Funds Receivable from Territories
11.
CREDITORS
Amounts owed to The Salvation Army International Trust
Accruals
Grants Payable		 Market Value
2024
£
3,372,115
27,722,208		 Cost
2024
£
4,683,824
31,707,922		 Market
Value
2023
Cost
2023
£
£
3,421,053
4,288,165
26,287,747
30,034,396
31,094,323 36,391,746 29,708,800
34,322,561
9,187,709
11,225,323
12,736,510
51,709,269
2,377,643		 10,064,435
11,188,264
9,013,669
35,569,561
3,044,010		 14,198,001
14,413,189
11,267,806
9,934,576
9,100,931
7,432,759
44,884,888
37,950,816
2,461,779
2,718,287
87,236,454 68,879,939 81,913,405
72,449,627
118,330,777 105,271,685 111,622,205
106,772,188
3,091,843
234,101		 3,091,843
234,102		 6,656,377
6,656,377
268,675
268,675
3,325,944 3,325,944 6,925,052
6,925,052
121,656,721 108,597,629 118,547,257
113,697,240
111,622,205
30,680,435
(29,174,134)
5,202,271		 2024
£
590,036
-
590,036
2024
£
602,946
117,058
1,239,512
1,959,516		 121,387,831
43,420,393
(45,165,649)
(8,020,370)
111,622,205
2023
£
545,833
299,951
845,784
2023
£
1,169,594
117,639
1,366,650
2,653,883
118,330,777

21

THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEME NOTES TO THE ACCOUNTS FOR THE PERIOD ENDED 31 MARCH 2024

12. FUNDS

Unrestricted Funds
Expendable Endowment
Funds
Total		 Brought
Forward
01/04/2023
Income
Expenditure
Gains and
(Losses)
Transfers
Between
Funds
Carried
Forward
31/03/2024
£
£
£
£
£
1,949,003
3,653,650
(5,156,358)
-
1,500,000
1,946,295
120,912,446
-
-
5,202,271
(1,500,000)
124,614,717
122,861,449
3,653,650
(5,156,358)
5,202,271
-
126,561,012

The transfer between funds was agreed by the Trustees to ensure adequate unrestricted funds to pay existing and future creditors.

Unrestricted Funds
Expendable Endowment
Funds
Total		 Brought
Forward
01/04/2022
Income
Expenditure
Gains and
(Losses)
Transfers
Between
Funds
Carried
Forward
31/03/2023
£
£
£
£
£
1,916,464
3,216,358
(5,183,819)
-
2,000,000
1,949,003
130,932,816
-
-
(8,020,370)
(2,000,000)
120,912,446
132,849,280
3,216,358
(5,183,819)
(8,020,370)
-
122,861,449

13. ANALYSIS OF NET ASSETS BETWEEN FUNDS

Fixed Asset Investments
Net Current Assets		 Unrestricted
Funds
2024
Expendable
Endowments
2024
Total
Funds
2024
£
£
£
-
118,330,777
118,330,777
1,946,295
6,283,940
8,230,235
1,946,295
124,614,717
126,561,012
Fixed Asset Investments
Net Current Assets		 Unrestricted
Funds
2023
Expendable
Endowments
2023
Total
Funds
2023
£
£
£
-
111,622,205
111,622,205
1,949,003
9,290,241
11,239,244
1,949,003
120,912,446
122,861,449

22

THE SALVATION ARMY RETIRED OFFICERS ALLOWANCE SCHEME NOTES TO THE ACCOUNTS FOR THE PERIOD ENDED 31 MARCH 2024

14. RELATED PARTIES: TRANSACTIONS WITH CONNECTED TRUSTS

The Salvation Army International Trust is a connected trust and both Trusts have the same Trustee. Officers and Employees of the Salvation Army International Trust provide management services to the scheme which are not recharged. The Retired Officers Allowance Scheme holds a current account and deposit accounts with Reliance Bank Limited which is owned solely by The Salvation Army International Trust. Balances held at the year end at Reliance Bank Limited amounted to £6.27m (2023: £6.12m).

Grants payable to overseas Salvation Army territories are set out in note 5 and grants receivable from overseas Salvation Army territories are set out in note 2. Each territory is governed through local registration(s) and separate legal entities. However, The Salvation Army remains under the oversight, direction and control of the General of The Salvation Army, as set out in greater detail in The Salvation Army Act 1980.

There were no other related party transactions.

23