SCIAF 2011 Typesigned Accounts

Company number: 197327 Charity number: SC 012302

SCOTTISH CATHOLIC INTERNATIONAL AID FUND(COMPANY LIMITED BY GUARANTEE)

FINANCIAL STATEMENTS

YEAR ENDED 31 DECEMBER 2011

FINANCIAL STATEMENTS FOR YEAR ENDED 31 DECEMBER 2011

CONTENTS Page

Company information 1

Directors’ Report 2

Independent Auditors’ Report 9

Statement of Financial Activities 11

Balance Sheet 12

Cash Flow Statement 13

Notes to the financial statements 14


Report of the Directors for the year ended 31 December 2011

The directors present their annual report and audited financial statements for the year ended 31 December.

Reference and Administrative Information

Charity Name: Scottish Catholic International Aid Fund

Charity registration number: SC 012302

Company registration number: 197327 (Scotland)

Registered Office and 19 Park CircusOperational address: Glasgow

G3 6BE

Board of DirectorsHis Eminence K. P. Cardinal O’Brien (Chairman)Right Rev P. A. Moran (President)Most Rev M. J. ContiRight Rev I. MurrayRight Rev J. Mone (retired 4 April 2011)Right Rev P Tartaglia (appointed 8 February 2012)Right Rev J. A. Toal (appointed 8 February 2012)

Secretary

McSparran McCormick, Solicitors

Senior Management Team

Paul Chitnis Chief Executive (until 10 June 2011)Philippa Bonella Head of Communication and EducationLorraine Currie Head of International ProgrammesDonna Ulijn Head of Finance & IT

Finance & Audit Committee

Eleanor Taylor (Chair)Suzanne BunnissPaul McCormick

Auditors: Grant Thornton UK LLP, 95 Bothwell Street, Glasgow, G2 7JZ

Solicitors: McSparran McCormick, Solicitors, Waterloo Chambers, 19 Waterloo Street, Glasgow

Bankers: Royal Bank of Scotland, Glasgow Charing Cross Branch, 9 Clifton Place, Glasgow, G3 7JU

Bank of Scotland, PO Box 1000, BX2 1LB

Santander, 9 Nelson Street, Bradford, West Yorkshire, BD1 5AN

Co-operative Bank, 1 Balloon Street, Manchester, M60 4EP

InvestmentManagers: Newton Investment Management Ltd., 2 Festival Square, Edinburgh, EH3

9SU

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Report of the Directors for the year ended 31 December 2011

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document

Scottish Catholic International Aid Fund (“SCIAF”) is a company limited by guarantee, incorporated in Scotland (registration number 197327) on 18 June 1999 and is also a Scottish charity registered with the Office of the Scottish Charity Regulator (charity reference number SC 012302). SCIAF is the official international aid and development agency of the Catholic Church in Scotland. The memorandum and articles of association govern SCIAF.

Organisational structure

The directors are responsible for the overall control of the charity. The directors give their time freely and receive no remuneration or other financial benefits. Right Rev J. A. Mone retired as a director on 4 April 2011 and Paul Chitnis, Chief Executive left the organisation on 10 June 2011. Two new directors were appointed on 8 February 2012: Right Rev P Tartaglia and Right Rev J.A. Toal.

The directors meet quarterly together with the Senior Management Team and are responsible for overseeing the alignment between SCIAF’s vision, mission and values with its operational activities. They approve organisational strategy including annual work plans and budgets to ensure it is accountable and effective.

The day-to-day management of the organisation and implementation of plans are delegated to the Senior Management Team. This includes the implementation, monitoring and evaluation of development programmes, support for overseas partners, fundraising, education and advocacy.

Recruitment and appointment of directors

The existing directors are responsible for the appointment of new directors. In selecting new directors, we seek to identify qualified and committed people. All directors are appointed by the Bishops’ Conference.

Induction and training of directors

Following appointment, new directors are briefed by the Board and management. They are also given the opportunity to visit partner organisations in SCIAF’s areas of work. They are given a copy of the Memorandum and Articles of Association and introduced to SCIAF’s vision, mission, values and its operational activities including annual work-plans and budgets.

Finance & Audit Committee

The members of the Committee are detailed on page 1. The key responsibilities of the Committee are to advise the Board on the financial implications of the Board’s strategic and financial decisions and to monitor the integrity of SCIAF’s internal and external financial statements. The members of the Committee are appointed independently from the Board.

Risk Management

The directors and Senior Management Team have conducted a review of the major risks to which SCIAF is exposed. SCIAF’s risk register identifies the major risks by area of activity, the nature of those risks, the likelihood of the risks happening and the measures taken to manage them. The directors review this risk register at least annually at their meetings. The aim of this review is to ensure directors are satisfied that systems are in place, or arrangements are in hand, to mitigate all significant risks.

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OBJECTIVES AND ACTIVITIES

Our mission

Inspired by the gospel call to build a just world, SCIAF challenges injustice by strengthening poor and oppressed people and by stimulating the Scottish public to share in our common struggle for human dignity.

Our objectives

The objects set out in SCIAF’s Memorandum of Association enable SCIAF to undertake a wide range of charitable activities including the relief of poverty, advancement of education and the relief and prevention of sickness, disease, and physical and mental disability anywhere in the world.

The main focus of our work in developing countries is helping people to overcome hunger, conflict, and disease; and responding to humanitarian disasters. We raise money in Scotland to help people in Africa, Asia and Latin America find lasting solutions to poverty.

As well as providing practical support, we are passionate about challenging the underlying causes of poverty through education and campaigning. We aim to influence policy on issues like unfair trade, debt and climate change, and raise awareness of the need for change through our education work in schools and parishes in Scotland.

SCIAF is the official aid agency of the Catholic Church in Scotland. We are part of Caritas Internationalis, the global network of Catholic agencies dedicated to ending poverty and working alongside the world’s poorest people, whatever their faith.

Strategies

A new strategic framework setting out SCIAF’s priorities for 2011-14 was approved by the Board of Directors in March 2011. SCIAF continues to support non-governmental organisations in 16 of the most deprived countries in the world. We give priority to initiatives which focus on the needs and aspirations of people experiencing the most extreme forms of poverty and oppression. We seek to provide integrated human development programmes which are effective and self-sustaining in the long term. We provide financial and technical support primarily to communities, with a strong emphasis on a partnership approach to programme design, implementation and organisational and programme development.

SCIAF also provides grants to organisations in the UK and overseas which help to educate the Scottish public, raise awareness of the underlying causes of poverty and advocate for change.

This year we have set in place a new comprehensive monitoring and evaluation framework to help us learn from and improve every element of our work. The senior management team monitors progress and reports to the Board of Directors.

Use of volunteers

Volunteers are an important resource in the work of SCIAF, at headquarters, in Scottish communities and overseas. Volunteers are involved in most of our activities in Scotland and we are grateful to have over 200 people regularly giving their time and expertise around the country. All volunteers working with children or other vulnerable groups are checked with Disclosure Scotland as part of our child protection policy.

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ACTIVITIES AND ACHIEVEMENTS

How our activities deliver public benefit

SCIAF carries out a wide range of activities in pursuance of our charitable aims. The directors consider that these activities, summarised below, provide benefit both to the Catholic and wider community in our projects in Asia, Latin America and Africa.

Working in partnership with poor communities overseas

In 2011, SCIAF disbursed £2,994,738 to over 64 development projects delivered by 55 partners in Africa, Asia and Latin America. We continued to implement our new way of working as outlined in our policy, SCIAF’s Approach to International Development. This identifies three priorities for our international development programmes, namely: sustainable livelihoods; peace-building and access to justice; and HIV and AIDS. In addition, we work to six cross-cutting themes of gender, inclusion, climate change, HIV and AIDS, environment and disability. The number of people who benefited directly from our development programme in 2011 was 279,748, while 3,006,232 benefited indirectly. In 2011, successful applications to institutional donors ensured that we received £1,339,638 for our development work overseas in addition to our voluntary income. We continued to employ a specialist on peace-building and access to justice to support our work in the Great Lakes with survivors of sexual and gender-based violence. SCIAF’s overseas offices in Ethiopia and Sudan continued to support our local partners in delivering sustainable development projects.

Responding to emergencies

Additionally in 2011, SCIAF responded to humanitarian emergencies across the following 11 countries: Ethiopia, Eritrea, Somalia, Sudan, Kenya, Burma, China, Cambodia, Sri Lanka Japan and Pakistan, implementing 22 projects through 17 partners. Our emergency spend of £1,621,711 supported an estimated 50,436 people directly, and 242,521 indirectly by meeting their immediate needs post-emergency as well as providing support for a number of early recovery initiatives.

Education

This year, together with our team of 10 schools volunteers, the Outreach Team visited 175 schools across Scotland at an exciting time for education. The new Religious Education syllabus for Catholic schools, This is our Faith, provides an excellent opportunity for SCIAF to deepen relationships with this important section of the education sector. The launch of the new Pope Benedict XVI Caritas Award offers young people a structured way to engage with their faith and become even more active members of the global community.

Our new resource for schools, Project Connect, has already attracted 25 schools to build a long term connection through us with their chosen overseas partners. Two partner visits to schools were arranged – from our Indian partner the Association for People with Disabilities, and from our Burundian agricultural partner Agakura. Both sets of visits were well received and have deepened relationships between schools and partners.

We continued to provide in-service training and continuing professional development to teachers on SCIAF’s work and international development. Our digital work continues to grow, with successful e-bulletins for teachers and pupils.

Lenten Campaign

Our WEE BOX, Big Change Lent campaign created global headlines when superstar Susan Boyle visited SCIAF for the official launch. The stories on our WEE BOX this year shared the hopes and dreams of people in Haiti, continuing to rebuild their lives following the devastating earthquake which SCIAF had responded to in January 2010. The campaign was well-received, and a total income of £959,031 (2010: £900,879) was raised. This includes £597,041 (2010: £664,931) raised from the dioceses across Scotland.

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Advocacy

Advocacy is a key part of SCIAF’s work, and this year our campaigners were extremely active, with 14,194 campaign actions taken during the year (compared with 5,333 in 2010). During Lent, SCIAF supporters signed postcards and emails addressed to candidates for the Scottish Parliament elections and the incoming First Minister, in support of climate mitigation, adaptation and fair-trade. The newly elected Scottish Government committed to maintain the Scottish aid budget and to develop a Scottish International Climate Adaptation fund. Postcards signed by our supporters were presented to Fiona Hyslop MSP, new Cabinet Secretary for External Affairs, during a visit to our headquarters.

Our summer campaign focused on tax justice, teaming up with CAFOD to call for transparency across the mining sector in developing countries. The EU is currently revising legislation on reporting standards and there are high hopes for an outcome which will hugely benefit resource-rich countries where SCIAF works.

The need for a Climate Adaptation Fund was outlined in our major policy report published in October. We presented the findings of the report at a special meeting in the Scottish Parliament, where MSPs heard directly from Sheila Kambobe, representing one of our Zambian partners. She explained how a changing climate undermines the security of small farmers in a country like Zambia, and the kind of programmes and techniques that can be used to overcome these.

Finally, we worked with Caritas and CIDSE at the UN climate change negotiations in Durban, lobbying for pro-poor policies and highlighting our concerns in the Scottish media. We supported partners to attend a capacity-building programme run by our German sister organisation MISEREOR in parallel with the conference.

Building support within the Scottish community

This year, staff, volunteers and our overseas partners have visited over 60 Catholic parishes, thanking people for their support and communicating about the work that we do. We also held training days around Scotland for parish contacts and diocesan ambassadors, enabling them to meet each other and SCIAF staff, and learn more about our work. This team of 150 volunteer parish contacts and 7 ambassadors are especially busy at Lent, in support of the SCIAF Lent campaign.

During the Scottish election campaign in the spring, we worked closely with fellow organisations to arrange well-attended hustings on international development issues and environmental concerns. We took part in debates and events around the country to explain the importance of international development as a priority for Scotland. For the 6th consecutive year SCIAF was present at Scotland's largest music festival, T in the Park, where we signed up hundreds of new campaigners and informed festival-goers about SCIAF's work.

Our digital communications and social media interactions were a key focus this year, with 27% more people discussing SCIAF on Facebook and our reach increasing by 38%. Providing a high standard of service to our supporters remained a core priority, with over 85,000 individual transactions swiftly processed, and only 27 complaints, all of which were successfully resolved.

FINANCIAL REVIEW

Reserves policy

The Directors review SCIAF’s reserves policy annually and monitor the level of reserves and the financial position each quarter. Restricted reserves are generated when the supporter or donor organisation stipulates the area of activity in which the income has to be spent (for example where funds are sent in, in response to a particular emergency or for a particular project overseas). SCIAF regularly pre-finances programme costs that will be covered by

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government and other institutional programme grants, approving and paying out funds to local partners, in advance of receiving funds from the donor. As a result negative balances arise on particular restricted funds. At the end of 2011, restricted funds held amounted to £547,109 (2010: £1,289,247).

Unrestricted funds are generated when there is no such stipulation. At the end of 2011, SCIAF had £7,918,108 (2010: £7,818,266) in unrestricted funds. As detailed in note 14, a transfer of £207,734 (2010: £958,597) was made from restricted funds to general funds in the year. As shown in note 14, the Board has a policy to set aside contingency reserves based on its expectation of the likelihood and impact of financial risks. These are to ensure that, in the wake of significant unexpected events, SCIAF can continue to respond rapidly to emergencies, can meet its planned future commitments to current projects, and continue its operations. In accordance with this policy the Board has set the level of the Operational Reserve Fund at £1,000,000. This reserve was fully funded. Details of other specific reserves appear in note 14 to the accounts.

£3,634,631 (2010: £3,834,906) forms a general fund that the Board intends to spend on SCIAF’s work over the next 5 years. SCIAF continues to use this fund to direct more funds where they are most needed, but our concern to make sure that these funds are spent wisely has resulted in a longer period for consideration and evaluation before sums are committed for new projects and other work.

The net outgoing resources before other gains and losses are £670,770 (2010: £1,507,965 incoming). Staff costs have increased in the year (as shown in note 8) in line with expectations due to a number of vacancies in 2010 being filled in 2011.

Principal funding sources

The charity’s main source of income is voluntary income from individuals through regular donations, our Lenten campaign and legacies. Total voluntary income reached the sum of £4,688,026 (2010: £6,087,407). This represents a decrease from the previous year, as was expected, given the economic conditions and due to 2010 income being particularly high with significant emergency donations received for Haiti and Pakistan. SCIAF also received £1,554,226 (2010: £1,951,677) of institutional funding for overseas relief and development.

SCIAF’s investment policy was developed by the Board of Directors to enable SCIAF to maximise the potential income from funds held at any time, while minimising the risk of loss of value. Funds are split between corporate charity bonds, interest bearing current accounts and medium term stock exchange investments. The latter are managed for SCIAF by Newton Investment Management Ltd, and investments are required to meet strict ethical guidelines, consistent with the work and beliefs of SCIAF. At the end of 2011, the funds invested had a market value of £3,229,263 (2010: £3,184,246) after deduction of management charges. The directors, recognising that the value of unrealised investments was £263,278 (2010: £297,526), do not propose to realise the current portfolio but instead expect to maintain the investment portfolio until there is a recovery in the investment market. The investment objective is to achieve a balanced return from income and capital growth over the long term.

Plans for the future

Our strategic framework for 2011-14 will guide our activities. A key priority for 2012 will be to continue to deliver effective international development programmes and rapid emergency humanitarian assistance in 16 countries. We will further develop the quality of our international programmes, based on ongoing monitoring and evaluation of their effectiveness. In addition, we aim to grow our education and outreach focus, to improve the ability of the Scottish public to understand and address the long-term causes of poverty in the developing world.

With the Earth Summit taking place in Brazil during the summer of 2012, many of our partners and sister agencies will be coming together to press for long term and sustainable action from

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world governments to tackle poverty and climate change. We hope to encourage Scottish communities to add their voices once again to the call.

We will further strengthen our focus on involving skilled volunteers and providing a quality service to our supporters.

The Board of Directors have decided to close SCIAF’s South Sudan Office in early 2012. The closure of the office does not in any way imply a reduction in our commitment to partners and projects in South Sudan. We will continue to support our partners from Glasgow in the same way we do in most other countries we work in. We will continue to do our best to contribute to South Sudan’s development.

Internally, we will seek to strengthen our governance by appointing new directors and will conclude a review of leadership and structure to appoint a new Chief Officer.

Statement of Directors’ responsibilities

The directors are responsible for preparing the Directors’ Report and the financial statementsin accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period.

In preparing these financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently; observe the methods and principles in the Charities SORP; make judgments and accounting estimates that are reasonable and prudent; state whether applicable UK Accounting Standards have been followed, subject to

any material departures disclosed and explained in the financial statements; prepare the financial statements on the going concern basis unless it is

inappropriate to presume that the charitable company will continue in business.

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

In so far as each of the directors is aware:

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

the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

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The directors for the purposes of charity law who served during the year and up to the date of this report are set out on page 1.

Approved by the directors and signed on its behalf by:

Rt. Rev. P.A. Moran President 2 April 2012

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Independent auditor's report to the directors and members of the Scottish Catholic International Aid FundWe have audited the financial statements of the Scottish Catholic International Aid Fund for the year ended 31 December 2011 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the charitable company's directors and members, as a body, in accordance with section 44(1) (c) of the Charities and Trustee Investment (Scotland) Act 2005 and under Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's directors and members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and its directors and members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditorAs explained more fully in the Directors’ Responsibilities Statement set out on page 7, the directors (who are also the trustees of the charitable company for the purposes of charity law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and report in accordance with regulations made under those Acts.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statementsA description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/private.cfm.

Opinion on financial statementsIn our opinion the financial statements:

give a true and fair view of the state of the charitable company’s affairs as at 31 December 2011 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;

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

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

Opinion on other matter prescribed by the Companies Act 2006In our opinion the information given in the Directors’ Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters where the Companies Act 2006 and the Charities Accounts (Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion:

the charitable company has not kept proper and adequate accounting records or returns adequate for our audit have not been received from branches not visited by us; or

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the financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors’ remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit.

Andrew GodfreySenior Statutory Auditorfor and on behalf of Grant Thornton UK LLPStatutory Auditor, Chartered AccountantsGlasgow 2 April 2012

Grant Thornton UK LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006.

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STATEMENT OF FINANCIAL ACTIVITIESFOR THE YEAR ENDED 31 DECEMBER 2011

UnrestrictedFunds

RestrictedFunds

TotalFunds2011

TotalFunds2010

Note £ £ £ £Incoming resourcesFrom generating fundsVoluntary income Lenten income 2 597,041 - 597,041 664,931 Individual donations 2 2,023,896 1,579,175 3,603,071 4,390,497 Legacies 2 487,914 - 487,914 1,031,979Total voluntary income 3,108,851 1,579,175 4,688,026 6,087,407

Activities for generating fundsSale of goods & resources 59,799 - 59,799 70,542

Investment income/ bank interest 157,786 5,083 162,869 167,532

From charitable activitiesInstitutional funding – overseas relief and development

3 214,588 1,339,638 1,554,226 1,951,677

Total incoming resources 3,541,024 2,923,896 6,464,920 8,277,158

Resources expendedCosts of generating fundsFund raising and advertising 4 704,077 - 704,077 622,169Cost of managing investments 19,092 - 19,092 18,635

Costs of charitable activitiesInternational programmes 6a 2,206,212 3,458,300 5,664,512 5,536,612Information and education 6b 248,259 - 248,259 228,525Advocacy and communication 6c 473,186 - 473,186 344,900

Governance costs 6d 26,564 - 26,564 18,352

Total resources expended 3,677,390 3,458,300 7,135,690 6,769,193

Net incoming resources before transfers

(136,366) (534,404) (670,770) 1,507,965

Transfers between funds 207,734 (207,734) - -Net incoming resources before other gains and losses 71,368 (742,138) (670,770) 1,507,965Gains on investment assets 62,722 - 62,722 59,841Movement in investment valuation (34,248) - (34,248) 97,196Net movement in funds 99,842 (742,138) (642,296) 1,665,002Total funds brought forward 7,818,266 1,289,247 9,107,513 7,442,511Total funds carried forward 7,918,108 547,109 8,465,217 9,107,513

The Statement of Financial Activities includes all gains and losses in the year. All incoming resources and resources expended derive from continuing activities.

The accompanying notes form part of the financial statements.

Company registration number: 197327

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BALANCE SHEETAs at 31 December 2011

2011 2010Note £ £

Fixed AssetsTangible assets 10 403,082 418,922Investments 11 3,229,263 3,184,246

3,632,345 3,603,168Current AssetsDebtors 105,160 187,517Prepayments and accrued income 139,615 127,281Cash on deposit and on hand 4,960,024 5,560,468

5,204,799 5,875,266Current liabilities: amounts falling due within one year 12 371,927 370,921

Net Current Assets 4,832,872 5,504,345

Net Assets 8,465,217 9,107,513

Reserves:

Unrestricted Reserves 14 7,918,108 7,818,266Restricted Reserves 14 547,109 1,289,247

8,465,217 9,107,513

Approved and authorised for issue by the Board of Directors on 2 April 2012 and signed on its behalf by

Rt Rev Peter Moran (President)Director

The accompanying notes form part of the financial statements.

Company registration number: SC197327

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CASH FLOW STATEMENTFOR THE YEAR ENDED 31 DECEMBER 2011

2011 2010Notes £ £

Net cash (outflow)/inflow from operating activities 1 (769,363) 794,986Return on Investments and servicing of finance 2 162,869 167,532Capital expenditure 2 (11,655) (7,914)Management of liquid resources 2 17,705 (78,883)(Decrease)/increase in cash in the period (600,444) 875,721

Net cash resources at 1 January 5,560,468 4,684,747Net cash resources at 31 December 4,960,024 5,560,468

1. Reconciliation of net movement in funds to net cash outflow from operating activities

2011 2010£ £

Net movement in funds (642,296) 1,665,002Depreciation charges 26,775 28,794Loss on disposal of fixed asset 720 -Gain on investment assets (62,722) (59,841)Investment income (162,869) (167,532)Decrease/(Increase) in debtors 70,023 (123,799)Increase/(Decrease) in creditors 1,006 (547,638)Net cash (outflow)/inflow (769,363) 794,986

2. Analysis of cash flows for headings netted in the cash flow statement

2011 2010£ £

Returns on investments and servicing of financeInterest received 162,869 167,532

Capital expenditurePurchase of tangible fixed assets (15,155) (7,914)Proceeds on disposal of fixed assets 3,500 -Net cash outflow (11,655) (7,914)

Management of liquid resourcesPurchase of investments (1,070,693) (1,431,874)Proceeds on disposal of investments 1,107,490 1,371,626Management fees (19,092) (18,635)

17,705 (78,883)

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NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 DECEMBER 2011

1. Accounting policies

Basis of preparation

The financial statements have been prepared under the historic cost convention, (which ignores the effect of inflation or revaluation (except for investments) and deals with original costs to SCIAF only), and in accordance with the Companies Act 2006 and the Statement of Recommended Practice for Charities 2005 and Charities Accounts (Scotland) Regulations 2006 (as amended).

Fund structure

Unrestricted funds are available for use at the discretion of the directors in furtherance of the general objectives of the charity. Unrestricted funds include designated funds where the directors, at their discretion, have set aside resources for a specific purpose.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by the donor or through the terms of an appeal.

Incoming resources

All incoming resources are recognised once the charity has entitlement to the income and the amount can be quantified with reasonable accuracy. The following specific policies are applied to particular categories of income:

Voluntary income and donations are included in the accounts as income when they are considered receivable in accordance with the Statement of Recommended Practice for Charities 2005.

Legacies are included when the charity is advised by the personal representative of an estate that payment will be made and when the amount involved can be quantified.

Grant income from institutional funders is included in the accounts in the year in which SCIAF is notified by the donor that it is satisfied all conditions have been met.

Grant expenditure

Expenditure on grants is included when the recipients have met SCIAF’s conditions for payment. Where grant agreements have been completed with partner organisations, SCIAF recognises commitments in respect of the next tranche of each grant, by charging the statement of financial activity with that commitment and showing the sum due as a creditor.

Resources expended

Expenditure is recognised on an accrual basis as a liability is incurred. Expenditure includes any VAT, which cannot be fully recovered.

Expenditure incurred, which relates directly to any one cost category is allocated directly to that category. Expenditure, common to more than one cost category, is apportioned on a reasonable and consistent basis to the categories involved, in accordance with the Statement of Recommended Practice for Charities, the industry standard, as well as recognised and approved by the Accounting Standards Authority. Allocation to the cost categories is proportional to the number of full time

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equivalent staff involved in each section. No apportionment applies to the costs of governance.

Operating lease agreements

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease.

Cost of generating funds

Fundraising expenditure comprises costs incurred in encouraging people and organisations to contribute financially to the charity’s work, and includes some media promotional costs.

Governance costs

Governance costs include those incurred in the governance of the charity and its assets, are primarily associated with constitutional and statutory requirements and include its audit fees and costs linked to the strategic management of the charity.

Tangible fixed assets

Fixed assets (excluding investments) are stated at cost less accumulated depreciation. The costs of minor additions or those costing below £500 are not capitalised. Depreciation is provided at the following rates to write off assets over their estimated useful life.

Buildings 2% on reducing balanceFixtures and fittings 25% on reducing balanceComputer equipment 50% on reducing balanceMotor vehicles 25% on reducing balance

Investments

Investments have been included in the Balance Sheet at market value. The annual movement in the market value is treated as an unrealised gain or loss and is incorporated within the General Unrestricted Fund.

The investment objective is to achieve a balanced return from income and capital growth over the long term subject to ethical criteria agreed by the Board. Newton Investment Management Ltd manages the portfolio with a medium risk approach.

Income from investments is credited to the Statement of Financial Activities in the year in which it is due to be received.

Pensions

SCIAF offers employees the opportunity to join a Group Personal Pension Scheme to which SCIAF also contributes. Contributions are charged to the Statement of Financial Activities in the year payable. The company has no liability for any scheme shortfall, neither would it benefit from any surplus.

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2. Incoming resources from voluntary income

UnrestrictedFunds

RestrictedFunds

Total2011

Total2010

£ £ £ £Lenten income 597,041 - 597,041 664,931Individual donations 2,023,896 1,579,175 3,603,071 4,390,497Legacies 487,914 - 487,914 1,031,979

3,108,851 1,579,175 4,688,026 6,087,407

3. Restricted institutional funding

2011 2010£ £

Department for International DevelopmentEthiopia 214,022 -Sudan 103,438 119,575

European CommissionSudan - 194,678Cambodia 70,481 63,614Ethiopia 186,616 176,936Africa – Great Lakes 338,692 369,926

Comic ReliefUganda - 167,769Ethiopia - 19,020

Scottish GovernmentKenya 95,238 -Zambia 192,878 346,308Haiti - 75,000Pakistan - 51,763India 102,853 68,306

States of GuernseyD R Congo 35,420 -

IOM GovernmentD R Congo - 35,420

1,339,638 1,688,315

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4. Fundraising and advertising costs

DirectCosts

DirectSupport

IndirectSupport

Total2011

Total2010

£ £ £ £ £Lenten campaign & real gifts 278,177 - - 278,177 271,544Raffle 32,965 - - 32,965 30,874Legacies 17,633 - - 17,633 16,547Salaries and other staff costs - 157,375 65,603 222,978 197,431Travel - 1,515 2,084 3,599 7,707Advertising, publicity and donor recruitment

51,070 - - 51,070 14,554

Administration - - 30,784 30,784 23,758Rates, utilities, telephone and cleaning

- - 10,350 10,350 9,705

Professional fees - - 4,601 4,601 2,804IT costs - 20,713 12,915 33,628 29,957Unrealised loss on revaluation - - 5,002 5,002 -Bank charges - - 12,573 12,573 15,505Volunteer costs - 622 95 717 1,783

379,845 180,225 144,007 704,077 622,169

5. Grant expenditure

Grant expenditure represents grants paid or approved to partner organisations responding to a wide range of humanitarian needs in the communities in which they work. The major recipients of grants (those over £50,000) were:-

UnrestrictedFunds

RestrictedFunds

Total2011

Total2010

£ £ £ £AFRICAEthiopiaJoint office with CAFOD and Trocaire – for distribution to partners 183,934 4,087 188,021 160,000Relief Society of Tigray (REST) - 152,839 152,839 202,846ASE & ECC - SADCO - 116,356 116,356 144,156

Horn of AfricaTrocaire – for distribution to partners - 197,619 197,619 -CAFOD – for distribution to partners - 300,000 300,000 -Caritas Kenya - 50,000 50,000 -Diocese of Lodwar - 50,000 50,000 -Caritas Internationalis - 100,000 100,000 -

UgandaKamwokya Christian Caring Community - - - 488,036Comboni Samaritans 27,926 22,074 50,000 99,000St. Monica’s 41,533 16,703 58,236 -

MalawiMangochi Cadecom - - - 63,172

RwandaCommission Episcopale Justice et Paix - 89,906 89,906 175,504

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Democratic Republic of CongoCodilusi 24,635 140,423 165,058 250,761Commission Diocesaine Justice et Paiz/Bakavu Diocese 14,249 79,176 93,425 177,502AJV - 62,782 62,782 65,172Commission Diocesaine Justice et Paiz/Uvira Diocese - 91,264 91,264 -

SudanSudan Evangelical Mission 6,000 118,441 124,441 128,900Jesuit Refugee Service Eastern Africa - - - 80,910MRDA 57,704 - 57,704 100,863Sudan Aid - - - 50,000CAFOD – for distribution to partners - 50,000 50,000 -Trocaire – for distribution to partners 50,000 - 50,000 -

BurundiAgakura - 68,379 68,379 59,310

ZambiaDiocese of Livingston - 51,016 51,016 -CRS Zambia - - - 116,240Kasisi - 110,493 110,493 219,523

Multi-CountryJesuit Refugee Service – for projects in Burundi, DRC, Sudan, Tanzania and Zambia 78,499 21,501 100,000 200,000

ASIABurmaJesuit Refugee Service Thailand - 173,801 173,801 202,321

CambodiaDPA - 87,772 87,772 123,345Caritas Cambodia 5,184 84,302 89,486 -

IndiaSpeech - - - 57,911Caritas India 50,000 171,952 221,952 136,853

PakistanTrocaire - 358,493 358,493 251,763

LATIN AMERICAColumbiaDiocese of Quidbo - - - 80,000

NicaraguaFamilias Especiales - - - 69,853Fedicamp 60,605 1,436 62,041 -

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Haiti

Institute of Technology & Animation - 76,060 76,060 136,792CAP - 91,542 91,542 -Gadru - - - 135,345Caritas Haiti - 100,000 100,000 335,000Caritas Fort Liberte - 56,691 56,691 -

Other grants less than £50,000 paid in the year 566,940 354,132 921,072 525,600

Adjustment for reversal of accrual - - - (245,669)

Total Grant Expenditure 1,167,209 3,449,240 4,616,449 4,591,009

6. Costs of charitable activities

Expenditure recorded in the Financial Statements includes both the direct costs of carrying out activities of the sections and the direct and indirect costs of supporting these activities.

Direct support costs include essential integral staff-related costs including recruitment, training and travel. Indirect costs are the common or shared costs of the organisation such as property running and maintenance costs, telephone, IT, stationery, postage and printing. These are allocated between the various expenditure categories in proportion to the number of full-time equivalent staff involved in the activities of each section. The following provides a breakdown of these costs:

DirectCosts

DirectSupport

IndirectSupport

Total2011

Total2010

£ £ £ £ £International programmes 4,616,449 621,939 426,124 5,664,512 5,536,612Information and education 12,748 144,569 90,942 248,259 228,525Advocacy and communication 153,831 206,022 113,333 473,186 344,900Governance 26,564 - - 26,564 18,352

4,809,592 972,530 630,399 6,412,521 6,128,389

a) International programmes

DirectCosts

DirectSupport

IndirectSupport

Total2011

Total2010

£ £ £ £ £Grant expenditure 4,616,449 60,013 - 4,676,462 4,656,609Juba office costs - 21,319 21,837 43,156 56,689Ethiopia joint office costs - - 71,414 71,414 60,807Salaries and other staff costs

- 408,685 165,658 574,343 505,982

Travel - 42,881 5,336 48,217 54,839Administration - 626 29,567 30,193 42,803Unrealised loss on revaluation

- - 12,802 12,802 -

Rates, utilities, telephone and cleaning

- - 33,532 33,532 24,293

Professional fees - 88,415 70,043 158,458 114,574IT costs - - 15,935 15,935 20,016

4,616,449 621,939 426,124 5,664,512 5,536,612

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Professional fees in 2011 include consultancy costs for overseas consultants working on international programmes.

b) Information and Education

DirectCosts

DirectSupport

IndirectSupport

Total2011

Total2010

£ £ £ £ £Individuals - - - - 2,012Schools 12,664 - - 12,664 25,993Parishes 84 - - 84 2,797Salaries and other staff costs - 136,407 55,087 191,494 162,452Travel - 6,735 1,774 8,509 7,442Administration - 1,427 9,543 10,970 10,656Unrealised loss on revaluation - - 4,257 4,257 -Rates, utilities, telephone and cleaning

- - 11,067 11,067 7,266

Professional fees - - 3,915 3,915 2,099IT costs - - 5,299 5,299 5,986Papal visit - - - - 1,822

12,748 144,569 90,942 248,259 228,525

c) Advocacy and communication

DirectCosts

DirectSupport

IndirectSupport

Total2011

Total2010

£ £ £ £ £Campaigning and policy 114,842 - - 114,842 41,456Media 38,989 - 4,782 43,771 34,207Salaries and other staff costs - 152,492 66,468 218,960 204,891Travel - 32,559 2,024 34,583 10,448Administration - - 15,709 15,709 12,690Unrealised loss on revaluation - - 4,856 4,856 -Rates, utilities, telephone, cleaning and repairs

- - 12,622 12,622 10,275

Professional fees - - 828 828 2,969Membership fees - 19,325 - 19,325 15,077Papal visit - - - - 2,577IT costs - 1,646 6,044 7,690 10,310

153,831 206,022 113,333 473,186 344,900

d) Governance

DirectCosts

DirectSupport

IndirectSupport

Total2011

Total2010

£ £ £ £ £Costs of Board meetings and overseas travel 952 - - 952 1,702Professional fees 13,732 - - 13,732 5,222Auditors remuneration - audit 11,880 - - 11,880 11,428

26,564 - - 26,564 18,352

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7. Net incoming/ (outgoing) resources for the year

This is stated after charging:

2011 2010£ £

Depreciation 26,775 28,794Auditors’ remuneration 11,880 11,428Unrealised loss on revaluation 26,917 -

8. Staff costs

2011 2010£ £

Wages and salaries 993,537 861,583Social security costs 93,998 81,832Pension costs 43,060 45,957

1,130,595 989,372

The average number of employees during the year was as follows:

2011 2010No No

Management 3 4Overseas project support 14 12Education and information 5 5Advocacy and campaigning 4 4Cost of generating fund 7 7Administration and finance 7 6

40 38

Full time equivalent 35 34

In 2011, no employees received remuneration within the band of £60,000 - £70,000 (2010 – 1 employee). Pension contributions in respect of this employee amounted to £6,591 in 2010.

Salary numbers include 3 staff working in our Sudan office.

No director received remuneration for their services. Expenses incurred by directors relating to visits and meetings amounted to £952 (2010: £1,702).

SCIAF operates a Group Personal Pension Scheme, the assets of which are held separately in an independently administered fund. The charity’s contribution is between 7.5 per cent and 10 per cent of salary with staff making contributions between 2.5 per cent and 4 per cent of salary to the scheme. 16 staff are members of the scheme (2010: 17 staff). Included in staff costs are contributions paid or payable by SCIAF to the fund which amounted to £43,060 in 2011 (2010: £45,957).

9. Taxation

SCIAF is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or s252 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to charitable objectives. No charges have arisen in the Charity.

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10. Tangible fixed assets

Heritableproperty

Fixtures& fittings

Computerequipment

MotorVehicles

Total2011

Cost: £ £ £ £ £At 1 January 2011 484,450 89,854 178,065 49,361 801,730Additions - 286 14,869 - 15,155Disposals - - - (17,784) (17,784)At 31 December 2011 484,450 90,140 192,934 31,577 799,101

Depreciation:At 1 January 2011 104,178 80,972 165,839 31,819 382,808Disposals - - - (13,564) (13,564)Charge for the year 7,605 2,292 13,548 3,330 26,775At 31 December 2011 111,783 83,264 179,387 21,585 396,019

Net book valueAt 31 December 2011 372,667 6,876 13,547 9,992 403,082At 31 December 2010 380,272 8,882 12,226 17,542 418,922

11. Investments

2011 2010£ £

Valuation at 1 January 3,184,246 3,045,522Acquisitions 1,070,693 1,431,874Disposals (991,428) (1,390,346)Market valuation movement in year (34,248) 97,196Valuation at 31 December 3,229,263 3,184,246

All of SCIAF’s investments are held for unrestricted charitable purposes, are listed and are included at market value. The closing valuation includes cash uninvested held within the portfolio of £308,136 (2010: £162,937).

Analysis of investments at market value 2011 2010£ £

Listed investmentsUnited Kingdom bonds 1,481,584 1,287,712United Kingdom equities 883,601 1,160,625Overseas equities 516,847 526,471Property 39,095 46,501Cash deposits 308,136 162,937

3,229,263 3,184,246

Historic cost 2,947,417 2,886,719

12. Current liabilities: amounts falling due within one year

2011 2010£ £

Trade creditors 25,692 31,849Approved development grants 303,127 306,462Accrued expenses 43,108 32,610

371,927 370,921

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13. Analysis of net assets between funds

UnrestrictedFunds

Restrictedfunds

Total2011

£ £ £Tangible fixed assets 403,082 - 403,082Investments 3,229,263 - 3,229,263Net current assets 4,285,763 547,109 4,832,872Total net assets 7,918,108 547,109 8,465,217

14. Movement in funds

Fund Name

At1 Jan2011

Incomingresources

Resourcesexpended Transfer

Gains&

losses

At31 Dec2011

£ £ £ £ £ £Unrestricted:Designated 3,983,360 - - 334,365 (34,248) 4,283,477General 3,834,906 3,541,024 (3,677,390) (126,631) 62,722 3,634,631

7,818,266 3,541,024 (3,677,390) 207,734 28,474 7,918,108

Restricted 1,289,247 2,923,896 (3,458,300) 207,734 - 547,109Total reserves 9,107,513 6,464,920 (7,135,690) - 28,474 8,465,217

a) Unrestricted Reserves

The following designated funds are maintained:

2011 2010£ £

Operational Reserve Fund 1,000,000 1,000,000Emergency Response Fund 500,000 500,000Property Maintenance Reserve Fund 100,000 100,000IT Reserve Fund 200,000 200,000Investment Revaluation Reserve 263,278 297,521Overseas Aid Reserve 2,220,199 1,885,839

4,283,477 3,983,360General Fund 3,634,631 3,834,906

7,918,108 7,818,266

The Operational Reserve Fund is, in the opinion of the directors, required to ensure that SCIAF is able to continue operations in the event of dramatic unforeseen events, or significant fluctuations in the income or expenditure of SCIAF from year to year. The Board keeps this under review on a regular basis.

The Emergency Response Fund has been established to provide funds to enable SCIAF to make an immediate funding response, in the event of a major catastrophe or emergency. In the light of the number and scale of major disasters in recent years, this reserve has been retained at £500,000 to allow SCIAF to be able to respond quickly and efficiently to emergencies as part of our strategic plan.

The Property Maintenance Reserve Fund and IT Reserve Fund have been established to spread the cost of these significant areas of expenditure over an appropriate number of years. These reserves are reviewed each year to provide

23


funds from the surplus, to meet the cost of essential repairs and improvements to SCIAF’s physical assets.

The Investment Revaluation Reserve represents the unrealised increase in the value of the stocks and shares held within the Investment portfolio, at the year-end.

The Overseas Aid Reserve is a provision for those Overseas Aid and Development Grants for 2012, which have not yet been formally committed to partners, but for which funding will be spent on overseas aid by 31st December 2012.

The General Fund represents unrestricted income carried forward. The Board of Directors have agreed that the unrestricted funds available, other than those utilised for the provision of fixed assets, should be used to meet planned development projects and other costs, over the next five years on a rolling basis.

b) Restricted Reserves

Restricted Reserves represent funds held for projects or programmes specified by the donors and not yet disbursed at 31st December 2011. Restricted Reserves are generated when the supporter or donor organisation stipulates the area of activity in which the income has to be spent (for example where funds are sent in, in response to a particular emergency or for a particular project overseas).

As at the 31 December 2011, balances held were for the following purposes:

2011 2010£ £

Africa programme (20,963) (81,085)Asia programme (117,422) 378,636Latin America programme 481,045 680,916Other 204,449 310,780

547,109 1,289,247

SCIAF regularly pre-finances programme costs that will be covered by government and other institutional programme grants, approving and paying out funds to local partners, in advance of receiving funds from the donor. As a result negative balances arise on particular restricted funds. These programme grants are in deficit by £806,325 at 31 December 2011.

c) Transfers

A transfer of £207,734 was made to restricted funds from unrestricted funds in 2011.

15. Company status

The company is limited by guarantee. The members undertake to contribute a maximum of £1 each to the company’s assets should it be wound up.

16. Operating lease agreements

At 31 December 2011 the company had aggregate annual commitments under non cancellable operating leases for computer equipment as set out below:

2011 2010£ £

Operating leases which expire:Within 1 year - -Within 2 to 5 years 12,425 11,485After 5 years - -

12,425 11,485

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17. Commitments

At the year end, forward commitments in respect of signed grant funding agreements with overseas partner organisations, beyond those within one year already included in creditors, amounted to £32,763. These grants are conditional on receipt of satisfactory reports, and are subject to SCIAF having the appropriate funds available at the time when the grants fall due for payment. Because of these conditions, the grants have not been treated as creditors.

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SCIAF 2011 Typesigned Accounts

Documents

cleaning professional

newton investment

amounts falling

senior management

sciaf regularly

finances programme

operational

institutional