Company No. 04016409 Registered Charity No. 1083008
THE MINES ADVISORY GROUP (A company limited by guarantee and not having a share capital)
TRUSTEES’ ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
THE MINES ADVISORY GROUP CONTENTS
Contents Page
Legal and administrative information 1
Statement from the Chair and Chief Executive Officer 2
Trustees’ Report 3 - 17
Independent auditor’s report 18 - 20
Statement of financial activities 21
Balance sheet 22
Cash flow statement 23
Notes to the financial statements 24 – 39
The following pages do not form part of the statutory accounts:
Appendix 1 – US Dollar Accounts 40 - 42
Appendix 2 – Euro Accounts 43 - 45
THE MINES ADVISORY GROUP LEGAL AND ADMINISTRATIVE INFORMATION
Board of Trustees for the Year Ending 30 June 2018: Ms Karen Brown, Chair (Appointed 10/11/2017) Ms Diane Reid, Vice Chair and Chair of the Governance, Nominations and Review Committee Mr Anthony Collier, Treasurer and Chair of the Audit and Finance Committee Mr Dominic Kendal-Ward, Legal Trustee and Member of the Governance, Nominations and Review Committee Mr John Shinnick, Interim Safeguarding Trustee; Chair of the Health, Safety, Security & Safeguarding Committee and Member of the Audit and Finance Committee Mr Matthew Sherrington, Board Fundraising Focal Point Dr Tapera Knox Chitiyo, Trustee (Resigned 09/11/2018) Mr Neil Turton, Member of the Audit and Finance Committee Ms Kathy Peach, Member of the Health, Safety, Security & Safeguarding Committee and Audit and Finance Committee Mr Chris Kemp, Board Security Focal Point and Member of the Health, Safety, Security & Safeguarding Committee (Appointed 10/11/2017) Ms Jane Marriott, Member of the Health, Safety, Security & Safeguarding Committee (Appointed 11/05/2018) Prof. Bertrand Taithe, Member of the Governance, Nominations and Review Committee (Appointed 09/02/2018) Ms Judith Frances Greenwood, Trustee and Board Safeguarding Trustee Focal Point (Appointed 12/11/2018) Mr John Malik, Trustee (Appointed 12/11/2018) Mr Colin Rowe, Interim Chair (Resigned 01/12/2017) Dr Paul Bell, Member of the Audit and Finance Committee & Deputy Board Security Focal Point (Resigned 10/11/2017) Colonel Christopher Peter Roger Bates, Member of the Governance, Nominations and Review Committee (Resigned 10/11/2017)
Management Team: Dr Jane Cocking OBE, Chief Executive Mr Llewelyn Jones, Director of Programmes Mr Andy Ewart, Director of Finance (Appointed 11/12/2017) Ms Rhian Cooke, Director of Human Resources Mr Darren Cormack, Director of Business Development Mr Chris Loughran, Director of Policy and Evaluation Mr AJ Karwa, Interim Director of Finance (Resigned 08/12/2017)
Company Secretary: Ms Sarah Howell
Independent Auditor: Deloitte LLP 2 Hardman Street, Manchester, M3 3HF United Kingdom
Bankers: The Royal Bank of Scotland plc 36 St Andrew Square Edinburgh, EH2 2YB
Solicitors: Bates Wells & Braithwaite LLP 10 Queen Street Place London, EC4R 1BE
Registered and Principal Office: Suite 3A, South Central 11 Peter Street Manchester, M2 5QR
Company Number: 04016409
Registered Charity Number: 1083008 1
THE MINES ADVISORY GROUP TRUSTEES’ REPORT (continued) For the year ended 30 June 2018
TRUSTEES’ REPORT
1. OBJECTS AND ACTIVITIES
1.1 Objects
The objects of the charity, as set out in the governing document, are:
a) the relief of suffering and distress throughout the world, in particular in areas where conflict causes human fatality or injury, due to the presence of the debris of war, such as land mines, unexploded ordnance, stockpiles of weapons and ordnance and other residual contamination; and to deliver such relief by (but not limited to): the provision of training and assistance in clearance and reconstruction; undertaking any preventative measures that improve human security including (but not limited to) safely managing, storing, destroying or reducing the availability of stockpiles of ammunition, arms and weapons; providing necessary medical support and education needed; and b) to carry out research into solving the problems faced by those whose lives have been affected by conflict and to disseminate any useful results of such research for the public benefit.
1.2 Activities
MAG's core activity is the creation of conditions of improved safety and security for those affected by armed violence, conflict and insecurity, with key interventions including (but not limited to):
The survey and clearance of land contaminated by landmines and cluster bombs/munitions Destruction of unexploded and abandoned ordnance Delivery of Mine Risk Education (MRE) sessions to at-risk communities Supporting states to destroy stockpiles Addressing and mitigating immediate humanitarian risk resulting from Unplanned Explosions at Munitions Stores (UEMS) and similar events Destruction of Small Arms and Light Weapons (SALW) Promoting safe and secure state storage and management of weapons and munitions Destruction of small arms ammunition Destruction of surplus and obsolete munitions Construction and rehabilitation of armouries and explosive stores Building capacity to strengthen the resilience of communities to conflict or armed violence Development of national standards and approaches
Due to the inter-related nature of many of the above (varying according to local context and needs), these interventions are consolidated into the single core activity in the notes to the financial statements.
Public Benefit In setting out our activities each year, we have had due regard to the Charity Commission guidance on public benefit. The target beneficiaries of MAG’s work are those whose lives are endangered by, or whose development is blocked by, the explosive remnants of war. The greater public, in the locations where MAG works, are the general beneficiaries of its work, as indeed are future generations in those locations where the threats to life and the obstacles to development are removed by MAG. In 2017-18, MAG records gathered at field level show that over 1.3 million people have benefitted from MAG interventions. The Trustees recognise their responsibility to ensure that the programmes MAG undertakes are in line with our charitable objects and aims as set out in the governing document.
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THE MINES ADVISORY GROUP TRUSTEES’ REPORT (continued) For the year ended 30 June 2018
2. STRATEGIC REPORT
2.1 Programme review As outlined above, the scale and scope of MAG’s global programme has increased significantly over the past 12 months, with activities in a range of new countries and expansion in a number of others. This includes an expansion of activities in a range of countries in the Middle East, Africa and Asia, as well as new programming in Europe (Bosnia & Herzegovina) and South America (Peru). As the figures presented below outline, this represents a significant increase in the number of people benefitting from the work, together with a major increase in the amount of land declared safe for community use around the globe.
2.1.1 Global Outputs Indicators The range and scope of MAG’s technical interventions across the globe vary across the 23 countries where MAG has been active over the financial year. The data reported represents the key headlines of MAG’s consolidated outputs, and does not attempt to capture every operational activity being undertaken across all programmes. Outputs data alone, without contextualisation and the responsible setting of priorities by MAG teams on the ground in response to the information received from affected communities, can only ever tell part of the story and should not be taken as the only indicator of performance.
2.1.2 Global Indicator Trends Beneficiaries: o For the 2017-18 year, MAG’s total range of activities directly reached more than 1.3 million people. The increase of more than 400,000 people is primarily attributed to expanded risk education activities being delivered in the Middle East programmes where there are significant needs given recent and ongoing conflict in the region.
Humanitarian Mine Action (HMA)
o Land Release: In 2017-18, the total area of land release was 140 million square metres (m2), which is 50 million m2 higher than the previous year. This significant increase was achieved by large areas of land cancellation through non-technical survey, primarily in Angola and South Sudan. The area cleared remained broadly in line with the previous year and area reduction through technical survey increased. 4
THE MINES ADVISORY GROUP TRUSTEES’ REPORT (continued) For the year ended 30 June 2018
o Items removed/destroyed: The total number of items removed / destroyed in 2017-18 was slightly lower than the previous year. The major reason for the decrease is due to the Iraq programme not being operational in key operational areas for a significant part of the year due to restrictions in access. This also had an impact on the amount of land cleared during the year. o Mine Risk Education: The number of Mine Risk Education sessions delivered increased by 66% with Iraq and Syria accounting for a majority of the increase given emergency response in these countries.
Arms Management & Destruction (AMD) o Monitoring of AMD activities on a year-by-year basis is more difficult, as the activities are much more project focused, compared to the longer-term programming approach used in HMA. Overall, the output results for key AMD indicators are similar to the previous year. Of note however is the volume of Small Arms Ammunition destroyed shows a significant increase by over 755,000 items as a result of a single project conducted in Swaziland.
2.1.3 Regional Headlines
East and Southern Africa
MAG’s Humanitarian Mine Action (HMA) and Arms Management and Destruction (AMD) programmes in the East and Southern Africa region continued apace during the 2017-2018 business year. The year witnessed the first mines cleared in Zimbabwe by MAG teams, expansion in South Sudan and an end in sight to mine action in the Democratic Republic of Congo (DRC). MAG completed its first AMD assessment in eastern Angola, assessed needs in two cities of South Central Somalia and undertook an emergency AMD intervention following the flooding of an ammunition depot in Swaziland.
The programmes in Angola, the DRC, South Sudan and Zimbabwe released over 89km2 of land through Non- Technical Survey, Technical Survey and clearance. This figure is over three times that released in the previous business year, with Angola accounting for nearly two-thirds of the total. Mine Action Teams cleared 3,745,166m2, supported by an increasing number of mechanical assets in the region, and removed 10,866 mines or items of unexploded ordnance across the four countries.
In Somalia, local partner organisations in Jubaland and South West State delivered Mine Risk Education to returnees, IDPs and at-risk host communities throughout 2017-18. In South Sudan, MAG Community Liaison Teams assigned to the UN’s Integrated Protection Mobile Team delivered risk education to communities in Upper Nile, Yei River and Terekeka States and provided awareness sessions to staff from other humanitarian organisations. In total, 212,404 at- risk women, girls, boys and men participated in risk education sessions across all five countries in the East and Southern Africa region. Children, who tend to be most at risk of accidents involving mines and unexploded ordnance, made up 55% of the participants.
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THE MINES ADVISORY GROUP TRUSTEES’ REPORT (continued) For the year ended 30 June 2018
East and Southern Africa (continued)
In DRC and Somalia, MAG continued to improve securitisation of weapons and ammunition through construction and refurbishment projects. In total, the programmes completed 18 armouries, ammunition stores and explosive store houses to international standards. The programmes trained 385 personnel responsible for maintaining and managing armouries and ammunition stores. This includes 30 personnel who completed ‘Train the Trainers’ courses, contributing to an independent and sustainable national training capacity.
The Somalia programme continued to support the strategic plan for better arms and ammunition management in South Central Somalia. Scoping missions were conducted in both Kismayo and Baidoa to assess the security and technical needs in each location. Building on early success in the west of the DRC, marking operations expanded to the east of the country. 23,576 weapons have been marked, 8,588 obsolete or surplus weapons destroyed and 121.63 tons of munitions destroyed across the country as a whole. A rare success story in a troubled country.
The financial year marked a series of milestones. The successful advocacy for Angola to be included in the next round of the UK’s Global Mine Action Programme has secured the programme funding to March 2020. Together with success in gaining UK Aid Match, Japanese and US co-funding, this means that the programme can continue to meet the significant mine clearance needs in the country. The Angola and South Sudan programmes increased their opportunities for women, with both training female deminers who will be deployed with teams as positions become available.
MAG’s programming continues to have a marked impact on individuals and local communities. Maria Athelia Mukombe, who lives in Luconha, Moxico, an Angolan village surrounded by minefields, put it simply: “it means our land is being given back to us”. Mr Bida Charles, a 23 year-old internally displaced person (IDP) living in Yei, South Sudan, attended a risk education session in November 2017. After seeing a photo of a cluster bomb, he told the team he had an item in his compound, which he had been thinking of moving. Following the session, MAG destroyed the item safely. Mr. Bida said “Thanks to God I attended this meeting. I would have removed it. I really didn’t know it could still explode”. He has since planted Okra on the land. In total, 297,937 women, girls, boys and men similar to Mrs Mukombe and Mr Bida benefitted as a result of MAG’s work in East and Southern Africa.
Middle East
MAG’s programmes in the Middle East have continued to significantly expand over the course of the year despite challenges, most notably in Iraq. Across Iraq, Lebanon and Syria, MAG has continued to deliver high impact humanitarian mine action to support conflict affected communities and displaced people.
The programmes have moved into new geographical areas as access has become possible and have continued to share lessons in order to enhance the safety and efficiency of operations across the region. With limited territory remaining in the hands of Islamic State in Iraq and Syria (ISIS), MAG has been able to expand its operational footprint across north-east Syria in particular.
In 2017-18, the Middle East programmes released 21.7km² of land, removing over 33,000 explosive hazards, including more than 15,000 improvised items in former ISIS areas of Iraq and Syria, and over 4,300 landmines in southern Lebanon. Over 19,000 risk education sessions have been delivered to more than 330,000 at risk women, girls, boys and men across the region.
MAG’s Iraq programme was directly impacted by the fallout from the Kurdish independence referendum in September 2017, that was followed by a reassertion of territorial control by the government of Iraq of areas taken over the previous two years by Kurdish forces as part of the combined offensive against ISIS. MAG has benefited from loyal donor support as it has navigated the processes required to resume operations in these areas, and is in a position to restart all activities across Ninewa Governorate from the start of the 2018-19.
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THE MINES ADVISORY GROUP TRUSTEES’ REPORT (continued) For the year ended 30 June 2018
Middle East (continued)
MAG will continue to expand its operational capacity as it responds to widespread improvised contamination across the governorate, enabling communities to return home safely and rebuild their lives. MAG continued to deploy a capacity to clear historical contamination in the Kurdish Region also, and will endeavour to expand support for this much needed work in the coming year.
In Lebanon, the programme has grown significantly over the year, and MAG has been able to expand its capacity to clear minefield contamination on the Blue Line on the southern border. This has enabled MAG to conduct vital work in places such as Meiss Al Jabal, a town located on the Blue Line where 51 minefields are present. The Mayor of Meiss Al Jabal, told MAG: “You are clearing the mines and in doing so you are saving our lives and our livelihoods. People are poor and they need access to this rich, fertile land”. MAG has continued to work with national authorities to incorporate new methodologies into national mine action standards, which will see an increase in the efficiency of both minefield and cluster munition clearance over the coming years. As well as significantly expanding this capacity in 2018-19, MAG will also draw on its experience in Iraq and Syria to address improvised contamination in the north east of Lebanon.
As the only mine action NGO conducting clearance in north-east Syria, MAG continued to expand its direct operations over the course of the year from 5 clearance teams and 10 community liaison teams in July 2017 to 22 clearance teams and 26 community liaison teams, as well as 4 mechanical teams, in June 2018. Whilst the context remains fluid and challenging, the programme continues to clear urban, agricultural and critical infrastructure, with support provided to other humanitarian interventions in order to restore basic services to returning communities. The programme has continued to increase the use of mechanical assets, which enhance the safety of operations in urban settings as well as enabling safe access to sites in agricultural areas. The programme has also continued to deliver risk education and basic contamination surveys through partners in North West and South Syria. With the context ever changing, MAG will continue to monitor the evolving situation across the country and deliver vital clearance and risk education activities, whilst ensuring the safety and security of staff remains a priority.
South and Southeast Asia
MAG continued to deliver high impact, low cost humanitarian mine action throughout our programmes in South and Southeast Asia with over 50% of all land released globally by the organisation through technical survey and clearance taking place in Laos, Vietnam, Cambodia and Sri Lanka.
In Vietnam, MAG continued to conduct clearance in two of the most heavily cluster munition contaminated provinces in the country, Quang Tri and Quang Binh. MAG worked to refine and improve methodologies to ensure optimal efficiencies during the clearance process, such as reconfiguring team deployment to ensure the best use of MAG’s toolbox of detection equipment.
MAG worked with the local authorities to put in place a process that makes certain that clearance is prioritised for land of most socio-economic benefit to local community members. Over 17km2 has been released back to communities over the year. MAG’s work focused on improving community safety through the delivery of Risk Education sessions to nearly 3,000 people who fall within high-risk groups, which aim to reduce their chances of being involved in a UXO accident. MAG also deployed rapid response teams to conduct emergency responses for UXO items that posed an immediate threat to community members, such as those that are uncovered during periods of heavy rainfall.
In Laos, teams continued to deploy in Khammouane and Xieng Khouang provinces to address UXO contamination, which continues to have a significant impact on the lives and livelihoods of rural poor communities. Through clearance and technical survey activities 13,875 items of UXO were safely destroyed, and over 4km2 of land was released back to the community directly benefitting over 30,000 people who rely on the land as their main livelihood source. In addition, using best practice from Vietnam, the Laos programme established a reporting hotline, which enables communities to directly call MAG staff to report dangerous items they have found. This has proved to be a significant reporting tool across the region, enabling teams to rapidly respond to reports and remove immediate threats. 7
THE MINES ADVISORY GROUP TRUSTEES’ REPORT (continued) For the year ended 30 June 2018
South and Southeast Asia (continued)
In the coming year, with increased funds and diversity of donors, the programme in Laos will see significant growth to its capacity in both provinces, with a 50% increase in the number of teams being deployed. In the heavily contaminated province of Xieng Khouang this increase in activities will see the completion of all survey work by 2021, significantly contributing to the first nationwide cluster munition survey within the country.
In December, Sri Lanka took the important step to become the 163rd State Party to the Ottawa Treaty, which creates a legal obligation for Sri Lanka to remove all contamination in its jurisdiction. As one of the two remaining international humanitarian mine action NGOs within the country, MAG is playing a crucial role in ensuring completion is carried out in Sri Lanka well before the 2025 deadline set by the Ottawa Treaty. To support this tangible progress towards national completion, MAG has continued its district-by-district clearance approach and will be able to declare the second district of Trincomalee free from all known mines by early 2019. By the end of this year, MAG released 1,638,013m2 of land back to communities within the northern and eastern provinces. This directly benefitted over 4,000 people enabling communities to access more safe land to build houses, develop infrastructure and conduct livelihood activities. Six months after clearance activities have taken place, MAG conducts post clearance impact assessments to gather data on how land is being used. During one assessment, Mahenthiran Kanthlingam, a beneficiary of MAG’s clearance work in Batticaloa district explained:
‘’After MAG’s clearance, for the first time in many years, I am able to harvest crops on my land which was contaminated with mines. In February 2018, I harvested corn, groundnuts and rice; significantly increasing my income to support my family. I grew 2,250kgs of rice. I kept 750kgs for my own consumption, kept 500kgs to cultivate in the next season and sold 1,000kgs at a price of 70 Rupees a kilo. (LKR 70,000/£320). ‘’
In Cambodia, MAG released 5,683,479m2 of safe land back to communities and destroyed nearly 12,500 dangerous items across the year. In Battambang and Pailin province in the west of the country, mine action teams, mechanical assets and detection dogs were deployed to conduct clearance on densely contaminated minefields. In the eastern province of Ratana Kiri, teams focused on cluster munition clearance, continuing to use new technologies to increase productivity and increase the efficiency in which safe land is returned back to rural communities. MAG worked closely with national authorities to ensure land cleared was of high priority, reflected the needs of the local community and supported proposed development projects, as well as providing safe land for crop diversification therefore supporting improved food security.
In June, MAG marked the 25th anniversary of our programming in Cambodia, where long-serving staff received medals from the government and awards from MAG. Representatives from a range of stakeholders including the Cambodian Mine Action Authority, MAG’s development partners and the provincial authorities were in attendance at both events. Since beginning operations in 1992, MAG has destroyed 315,000 mines and UXO whilst releasing more than 63km2 of land back to over 1.8 million beneficiaries who can now use their land in confidence free from the fear of contamination which has had such detrimental impact on lives and the development of rural communities.
In Myanmar, the programme continued to work closely with communities and authorities, building trust and gaining access in restrictive environments. MAG began Non-Technical Survey activities to measure the extent of contamination in Kayah State in July 2016 and has now expanded into Shan and Kayin states. MAG has the widest national reach within the country, working from four operational bases and in partnership with three local organisations. This has placed MAG in a position to share information and lessons learned with other stakeholders and continue to advocate for permission to begin the process of demining. MAG remains optimistic that mine clearance, in at least a limited capacity, will begin within the next few years. Meanwhile, mine risk education is the only means of saving lives with over 29,000 affected people reached by MAG last year alone.
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THE MINES ADVISORY GROUP TRUSTEES’ REPORT (continued) For the year ended 30 June 2018
West Africa and Sahel
In line with last year’s trend, the Sahel and West Africa region has continued to grow in terms of scope of Arms Management and Destruction (AMD) work, and also in terms of numbers of country programmes and humanitarian mine action programming. This year saw the establishment of teams in both Guinea and Mauritania, with further plans for expansion in place during 2018-19.
Over the course of the year, MAG was able to secure approval from more national authorities in West Africa and the Sahel to start the destruction of munitions and to destroy weapons. In Mali, 1.79 tons of ammunition were destroyed, whilst in Guinea, 2.42 tons were destroyed. In Burkina Faso, the team burnt 2,833 items of SAA, in Chad, 1,905 weapons were destroyed and in Nigeria a total of 6,303 small arms were destroyed. In addition, MAG has continued to construct and rehabilitate armouries in all countries of operation, in order to improve the governments’ control over state- held weapons and fight their illicit proliferation. In the West Africa and Sahel region, a total of 159 armouries have been refurbished or constructed in the last financial year. Capacity building measures have focused on giving personnel working at these facilities the skills and knowledge to manage weapons under their care in line with the International Small Arms Control Standards (ISACS), and also to raise awareness among mid-ranking officers around Arms Management and Destruction topics. In Sierra Leone, a total of 30 participants took part in training courses on armoury storekeeping and management, more than doubling this output in comparison to the previous financial year. The workshops for mid-level officers, making them aware of the content of MAG’s training for their personnel but also giving them an opportunity to raise issues and exchange experiences with peers, have been a success in terms of consolidation of national ownership. In Burkina Faso, after a workshop for mid-level officers, including a visit to an armoury rehabilitated by MAG, had been carried out, one of the participants, Inspector Kabore, made the following observation:
“MAG has raised our awareness and the importance of secured weapons storage and effective weapons management, especially in the current security context. This will allow us to limit risk of diversion and its grave consequences.”
Increased national ownership also facilitates MAG’s Arms Management and Destruction work on a more strategic level. In this financial year, MAG has carried out the evaluation of the Physical Security and Stockpile Management National Action Plan (NAP) in Mali and will build on this to work on a new NAP in cooperation with the National Commission for Small Arms and Light Weapons in the second half of 2018. MAG has positive relationships with the national authorities in all countries of operation in West Africa and the Sahel, which is demonstrated by increased levels of trust and approvals, in particular in the destruction of SALW and ammunition, as described above.
In terms of Humanitarian Mine Action programming, MAG grew in West Africa mainly thanks to the successful establishment of the Risk Education (RE) and Non-Technical Survey (NTS) programme in North East Nigeria. Within a year of its inception, the programme has reached 143,405 Risk Education beneficiaries, mainly Internally Displaced People and Refugees, more than half of which were children. One of the beneficiaries of these sessions was twelve year old Ali, who was injured and lost two of his friends when an item of Unexploded Ordnance (UXO) they were playing with exploded. After the Risk Education session, Ali told MAG teams:
“I am glad today with the Risk Education I received from MAG, as I can now identify UXO, tell all my friends who do not have this knowledge, and also know what to do if I encounter a UXO. I don’t want to lose any more of my friends or see my family suffer.”
Similarly, MAG has conducted RE and NTS in Northern Mali, reaching a total of 22,752 beneficiaries. In Chad, MAG has worked on the re-establishment of mine action programming work due to start at the beginning of the new financial year.
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THE MINES ADVISORY GROUP TRUSTEES’ REPORT (continued) For the year ended 30 June 2018
Europe
In May 2017, MAG began operations in Bosnia and Herzegovina (BiH) for the first time. Since then, MAG has completed a full year of operations including both winter and summer tasks. During the year, the operational capacity has expanded from two to four clearance teams, with plans for further expansion in 2018-19. MAG BiH currently employs 45 national staff and 2 international staff. During 2017-18, more than 188,000m² of land was cleared, 563,000m² reduced through technical survey with 254 landmines and 24 UXO removed and destroyed. Including the land cancelled by BHMAC on the tasks MAG was working on, more than 3.4 million m2 of land have been released.
South America
The Peru programme was established in October 2017 with the support of the US Office of Weapons Removal and Abatement. The programme plans include capacity building of national security forces, assessment of weapons and munitions storage facilities together with related destruction activities. The programme team developed strong relations with key national authorities as well as international actors on the ground. At the end of 2017, MAG Peru successfully delivered an initial AMD training and a three-week EOD Level III course for 14 members of the Peruvian Army. Furthermore, the assessment of 6 planned locations and an additional site of Quistococha in Loreto region were finalised. The programme plans to scale up activities during 2018-19.
2.2 Financial Review
2.2.1 Financial Overview Total income has increased to £60.9m (2017: £46.9m), with a similar increase in resources spent directly on charitable activities: 2018: £59.5m (2017: £47.0m). The increased scale of activities can largely be attributed to increased programming in Syria (£5.7m), Iraq (£2.9m), South Sudan (£2.3m), Chad (£1.5m), Nigeria (£0.8m) and Bosnia (£0.7m), partially offset by reductions in the Cyprus (£0.7m) and Mali (£0.5m) programmes.
Total net income has increased to £1.1m in 2018 compared to a deficit of £0.4m in 2017. This improvement is largely due to net income from programmes of £5.3m, driven by higher programme activity and robust cost control. Net income from donations, legacies and other trading activities have performed well at £0.5m in 2018 in comparison to net income of £0.3m in 2017.
Unrestricted reserves stand at £3.4m (2017 £2.1m) and unrestricted free reserves at £3.0m (2017 £2.0m). The Board and management have developed robust financial strategies to ensure that the required levels of unrestricted free reserves are earned and maintained.
Cash balances stand at £20.6m (2017 £17.6m) and are largely attributable to grant/contract payments received in advance of disbursement, the majority of which are held in UK accounts, where MAG’s global treasury management is carried out. Funds are transferred to overseas programmes to cover the short-term working capital needs.
Deferred income of £26.0m (2017 £18.3m) represents the balance of billed grants/contracts, which are to be delivered in future periods and to which MAG is not yet entitled.
2.2.2 Reserves The majority of MAG’s operational work is funded from restricted funds. The Trustees adopt a risk based approach in targeting appropriate levels of unrestricted reserves and take into account business adversity, investment in new operational territories, working capital requirements, provision of emergency response funding and the need to provide funds to offset short term programmatic funding gaps. The Board considers the current balance of £3.4m of unrestricted reserves and £3.0m of unrestricted free reserves to be sufficient to cover the existing and immediate position of the charity to respond to these risks.
2.2.3 Investment To date the funding of the charity’s activities and the resultant need to access cash flow have not allowed long-term investments and MAG currently only invests funds in short-term deposits providing a market rate of interest.
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THE MINES ADVISORY GROUP TRUSTEES’ REPORT (continued) For the year ended 30 June 2018
2.2.4 Going Concern The trustees consider MAG to be operating on a going concern basis due to the number, value and financial viability of contracts secured through to at least December 2019, in addition to prudent assumptions on the anticipated level of business throughout this period. MAG has adequate resources to continue in operational existence for the foreseeable future, cash headroom has been analysed and is appropriate to current and forecast business levels. In addition, MAG has the operational capacity, knowledge and expertise to continue to be at the leading edge of the post conflict recovery sector for the foreseeable future.
2.3 Future Plans MAG will continue to commit itself to serving communities impacted by conflict and insecurity. Given a planned increase in funding for both the Middle East emergency contexts and the legacy post-conflict environments in South-East Asia, the scale of our work is likely to increase during 2018-19. The organisation will increase and aim to maximise the impact on affected communities across all regions, both through an increase in funding and improved operational efficiency and effectiveness.
In addition, the scale of our Arms Management Destruction work will continue to increase, with the primary focus being in Africa, but with the possibility of further expansion in other regions also.
2.4 Principal Risks The Board has identified the major risks to the organisation and a comprehensive and detailed risk register is maintained, covering six key areas; Corporate Governance, Health, Safety, Security and Safeguarding, Contractual Compliance, Statutory Compliance, Bribery & Corruption and the Funding Environment.
Under each area, the subjective strategic and operational risks are identified, together with how they are being managed. The register is considered by the Trustees in the appropriate Board Committees and at every Board meeting, supported by the Chief Executive’s report, which highlights emergent or escalating risks, which have been identified through the relevant management chains across MAG. Risks are scored against probability and impact criteria, with controls, monitoring processes and action plans considered for all risk areas. Headline risks (which do not constitute all identified risks), together with the headline risk management strategies for each of the six ‘risk areas’ are as follows:
Corporate Governance Risk: MAG fails to ensure appropriate Corporate Governance to fulfil statutory and organisational requirements.
Management Strategy: The MAG Board set the rolling five-year strategic direction of the organisation which incorporates key success indicators and is supported by the Audit & Finance Committee, the Governance, Nominations and Remuneration Committee and the Health, Safety, Security & Safeguarding Committee, who assist the Board in fulfilling statutory and organisational requirements, with a clear focus on risk management.
Health, Safety, Security and Safeguarding Risk: MAG fails to prevent or appropriately manage programmatic safety and security and fails to deliver on MAG’s obligations around duty of care. MAG fails to build an organisational culture that supports safeguarding and/or fails to appropriately manage any safeguarding incidents.
Management Strategy: MAG operates across a complex range of contexts. It is recognised that these challenges can present risks to the health, safety, security and safeguarding of all staff and the people who come into contact with our work. MAG is licenced by the relevant national authorities in all operational areas, and is obliged to adhere to national and International Mine Action Standards (IMAS) standards. Security plans, site risk assessments and Standard Operating Procedures (SOPs) are in place across MAG programmes and are designed to ensure the safety and security of staff at all times. These standards are underpinned by the recruitment of suitably qualified and experienced technical specialists, together with robust internal quality assurance, quality control and reporting processes. MAG adheres to the policy and standards set out in our Safeguarding Framework. We have robust systems for monitoring and reporting on any concerns. The Board and nominated Safeguarding Trustee receive regular updates on the effectiveness of our Safeguarding control measures.
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THE MINES ADVISORY GROUP TRUSTEES’ REPORT (continued) For the year ended 30 June 2018
Contractual Compliance Risk: MAG fails to deliver against donor contractual obligations.
Management Strategy: Much of MAG’s work is delivered under contract, where outputs, and/or activities to be delivered across the life of any given work programme are clearly specified within donor contracts. MAG’s project management systems, tools and approaches are designed to ensure that both operational and financial data is readily available across the project lifespan, enabling management to ensure that projects are delivered within budget and in line with the quality expectations of both the donor and beneficiary. MAG has implemented a Quality Assurance Framework, which is governed by the risk management policy and underpinned by the ISO9001:2015 Quality Management System, all of which complement MAG’s overarching approach to risk management. In 2018 MAG developed an improved Information Management System and undertook an external review of the logistics and procurement function. In addition, MAG has an Operational Development Team (ODT), comprised of six technical experts in the fields of Humanitarian Mine Action, Arms Management and Destruction, Mechanical Assets, Community Liaison and Medical Procedures. The members of the ODT are not assigned to a programme, but rotate across MAG programmes in a Quality Assurance, Monitoring and Evaluation function. Because of the roving nature of their roles, ODT members can also be quickly deployed to new operational areas in their capacity as technical experts.
Statutory Compliance Risk: MAG fails to ensure that it is operating in accordance with local, regional, national and international legislation, including (but not limited to), company registration, operating permits, labour law, tax law, insurance regulations/requirements.
Management Strategy: MAGs global compliance database captures the statutory requirements for each MAG programme. Data is extracted from reviews of legislation, legal advice and sector knowledge/information sharing. Where available, MAG joins NGO forums/networks in order to ensure obligations are delivered in line with best practice in the sector. Assumptions contained within the database are verified/audited no less than annually as part of MAG’s compliance framework.
Bribery and Corruption Risk: MAG is exposed to instances of bribery and corruption.
Management Strategy: The Board of Trustees and Management Team recognise that bribery is contrary to the fundamental values of integrity, transparency and accountability and undermines organisational effectiveness. MAG has in place necessary policies and procedures (including Financial Crime, Procurement, Personal Conduct, Gifts & Hospitality, Conflict of Interests, Whistleblowing, Finance/HR Frameworks) to reduce incidence of bribery and corruption to the lowest possible levels, and to ensure proper reporting and sound management of those events which do occur. MAG is also committed to the eradication of modern slavery and has published a statement to this effect on our website, www.maginternational.org
Funding Environment Risk: MAG’s key financial risk is that it fails to secure funding in line with strategic plans.
Management Strategy: In order to mitigate this risk, MAG constructs robust business plans for each International Programme. MAG engages in proactive and constructive dialogue with the donor community relevant to the work that we undertake, including with multilateral organisations, governments, trusts, foundations and individuals and encourages policy development and enhanced funding commitment to the sectors in which we work.
3. STRUCTURE, GOVERNANCE AND MANAGEMENT
3.1 Structure MAG is a registered charity (Number 1083008) regulated by the Charity Commission of England and Wales; it became an incorporated charity (limited by guarantee) on 16th June 2000 (Number: 04016409) and operates under a set of Articles and a Memorandum of Association.
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THE MINES ADVISORY GROUP TRUSTEES’ REPORT (continued) For the year ended 30 June 2018
3.2 Governance The Board of Trustees is responsible for the strategic direction of the organisation. Matters reserved for the Board are set out clearly, whilst operational decision-making is delegated by the Board to the Chief Executive and the Management Team who coordinate and direct MAG’s work worldwide (Directors of Programmes, Business Development, Finance, HR and Policy). Trustees have established appropriate controls and reporting mechanisms to ensure that the Management Team operates within the scope of the powers delegated to it. The delegation of authority from the Board to Management Team is reviewed at least annually alongside the Board Reserved Powers.
Trustees are normally appointed for a maximum of two terms of three years. MAG utilises a skills register in recruiting new Board members and seeks a range of expertise and knowledge that will assist and support the organisation in its development. Trustees must have relevant business or organisational experience to contribute to the collective role of the Board and must also have a strong degree of personal commitment to work collectively to deliver MAG’s objectives. All new appointments follow a formal recruitment and induction process, covering all aspects of the role and organisation. Trustees also undertake overseas programme visits as part of their induction to MAG.
All Trustees give their time freely and received no remuneration or financial benefit in their capacity as trustees. Details of Trustee expenses are disclosed in note 23 to the accounts. Trustees are required to declare all relevant interests and MAG maintains a register of interests as an internal record of Trustee interests.
In 2017-18 the Board had four all-day meetings in addition to an annual Board Away Day which is used for strategic discussion and reflection, and also for a process of facilitated appraisal of Board effectiveness. An Annual Meeting of the Trustees was also held during which items such as the Annual Report and Accounts; appointment/retirement of trustees and auditor were dealt with.
The Chair, Vice Chair and Treasurer (MAG Officers) meet regularly in-between Board meetings and Trustees are able, where appropriate, to take independent professional advice if it helps them to fulfil their role.
The Board has delegated specific responsibilities to three Board Committees and a Fundraising Committee, as detailed below, whose membership is appointed by the Board. The Chair of each Committee reports back to the Board at quarterly meetings.
3.2.1 Audit and Finance Committee The Audit and Finance Committee (AFC) meets quarterly and takes delegated responsibility on behalf of the Board for ensuring MAG maintains an effective financial management and reporting structure across the organisation. The committee examines and reviews financial stewardship, statutory reporting, internal controls, risk management, internal and external audit and supports the Board in fulfilling its legal obligations.
3.2.2 Governance Nominations and Review Committee The Governance Nominations and Review Committee (GNRC) meets quarterly and exists to keep the Board’s governance arrangements under review and to make appropriate recommendations to the Board to ensure that MAG’s arrangements are consistent with best practice corporate governance standards. It also assists the Chair in keeping the composition of the Board under review and to lead the appointments process for nominations to the Board.
3.2.3 Health, Safety, Security and Safeguarding Committee The Health, Safety, Security and Safeguarding Committee (HSC) takes delegated responsibility on behalf of the Board for ensuring MAG maintains effective Health, Safety, Security and Safeguarding policies, procedures and practices. The committee reviews control methods, including risk analysis and mitigation strategies in place. It supports the Board in fulfilling its legal duty to ensure the Health, Safety, Security and Safeguarding of MAG staff and assets worldwide. The HSC meets quarterly and reports to the Board on the progress of initiatives and the lessons learnt from incidents that have occurred.
In April 2018, MAG re-launched its Safeguarding Framework and reiterated its commitment to safeguarding the health, wellbeing and human rights of all staff, partners, and beneficiaries and to provide a safe and trusted environment for anyone who comes into contact with its work.
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THE MINES ADVISORY GROUP TRUSTEES’ REPORT (continued) For the year ended 30 June 2018
This Framework strengthens our safeguarding procedures to enable all individuals who are involved with or affected by our work to live free from harm, distress, abuse and neglect. The framework aims to: I. Make staff, trustees and other representatives of MAG aware of the standards and expectations that we have set ourselves. II. Provide a clear system of how to report concerns as soon as they are identified or suspected. III. Guidance on how MAG will respond rapidly to any concerns and carry out investigations diligently. IV. Provide staff and managers with appropriate training and support. V. Comply with external legislation and regulation.
As a response to the Sunday Times piece, and to the increasing focus within the sector, MAG launched an independent Safeguarding Review to continue to ensure our staff and beneficiaries are as safe as they can be. The Review will assess current safeguarding culture and practices and will cover the policies that are included in MAG’s Safeguarding Framework, and engage with staff and communities, through a range of opportunities, to determine how safeguarding is working in practice and how it can be strengthened. The review team is expected to publish its report later in 2018.
A dedicated Safeguarding Lead has been recruited post year end and this new post reports into the Director of HR but will work across multiple teams and functions, providing expert advice and guidance. This will involve regular travel to country programmes to support the implementation of policy, provide training and support the resolution of any identified concerns.
With the results of the independent review and the recruitment of the Safeguarding Lead, we intend to continue to improve our safeguarding practice to ensure that our work is carried out in all locations free from harm and abuse.
3.2.4 Fundraising Committee In 2016, the Board appointed a Fundraising Focal Point to provide assurance to the trustees that fundraising is being managed to a high standard and that the Board’s duty of care is being fulfilled. The Board Fundraising Focal Point meets with the Fundraising Team on a quarterly basis and reports to the Board any matters of significance.
MAG strives to uphold high standards in all our fundraising activity. We are registered with the Fundraising Regulator and are Organisational Members of the Institute of Fundraising. We adhere to the Fundraising Regulator’s Code of Fundraising Practice and the Fundraising Promise. We are proud to display the Fundraising Regulator logo on our materials to demonstrate our commitment to professional fundraising standards.
In 2017/18 we undertook a review of our compliance with fundraising regulation and data protection legislation, ahead of the then incoming General Data Protection Regulation. We went on to develop a compliance handbook, ensuring a consistent approach and understanding of compliance within MAG. A number of policies and processes which support our fundraising activity have been developed and updated, including those relating to privacy, complaints and use of website cookies. The launch of our Supporter Promise shows how we value our supporters and is part of our commitment to treating donors fairly.
Through our compliance handbook we instil a culture of best practice to fundraising activity, including ensuring that are actions are not overly intrusive or unreasonably persistent. We follow guidance from the Institute of Fundraising on treating donors fairly and have a process in place to protect individuals who may be in vulnerable circumstances.
At MAG we undertake a range of fundraising activity and use a small number of external fundraising agencies to support us. In 2017/18 we used one such agency to carry out a telephone fundraising campaign. All external agencies we work with are required to follow best practice standards. Activity is regularly monitored throughout a campaign, for example through mystery shopping or call listening. We deliver training on our expectations and standards and work closely with our agencies on feedback and complaints to deliver a good quality experience for our supporters.
We aim for all of our engagement with supporters and members of the public to be a positive experience. Sometimes our activity generates complaints. All complaints are logged and responded to, in line with our Complaints Policy, and are reviewed by senior management and reported to our trustees. In 2017/18 we received 4 complaints relating to fundraising activity or communications, the same number received in 2016/17. We welcome feedback from our supporters and will react promptly and take any complaint seriously. In 2018/19 we will be continuing to build on our fundraising standards and remain committed to providing a respectful and positive experience for our supporters. 14
THE MINES ADVISORY GROUP TRUSTEES’ REPORT (continued) For the year ended 30 June 2018
3.3 Management Led by the Chief Executive, the Management Team is made up of the Director of Programmes, Director of Finance, Director of Human Resources, Director of Business Development and Director of Policy and Evaluation. The Management Team recommend strategy to the Board and provide day-to-day management including accountability and oversight for all legal, contractual, operational and financial responsibilities relating to the charity’s business. The Management Team, being the key management personnel of the charity are responsible for the stewardship of the organisation’s human resources, assets and equipment. They also provide senior representation both at national and international level. The Management Team meet regularly to review policy and monitor risks.
The organisation has an Operations Development Team (ODT) who report to the Director of Programmes. ODT monitor MAG’s programmes and projects according to contractual obligations and planned activities, as well as ensuring compliance to safety and technical standards and best practice. The team plays a key role in developing new programmes and projects, and assists in the evaluation of new technologies, bearing in mind cost-effectiveness, practicality and safety.
Overseas projects and programmes are normally managed by a Country Director (CD) or Country Representative (CR), depending on the scale of operations, and are supported by a Finance Manager (FM) and Technical Operations Manager (TOM). The CD is responsible for the delivery of all MAG’s statutory, regulatory and contractual commitments in the country. Furthermore, the CD is responsible for all national and international staff within the programme along with safety and welfare, standards and good practice and all disciplinary matters while ensuring adherence to the laws and customs of the country in which they are operating. They also represent the organisation at a country level with the authorities, donors and other stakeholders. CDs report to Regional Directors (RDs) and provide monthly management reports with key operational and financial data. The structure of individual MAG programmes or projects differs according to the size and complexity of the country operations.
3.4 Employees MAG’s work relies on the commitment and hard work of its global workforce. At 30 June 2018 MAG employed 3,827 staff globally, 3,595 of whom 94 per cent are nationals from programme countries who are contracted on terms and conditions in line with local legislative requirements and customs. Consequently, MAG currently complies with 27 different labour codes worldwide, all coordinated by MAG HQ.
MAG currently employs an average of 170 international staff who are deployed to our country programmes to provide technical and management oversight to operations and activities.
54 people were employed at MAG HQ, the majority of whom provide direct support to their in- country counterparts. A further 10 members of staff make up MAG’s Operational Development Team (ODT) who monitor and support the development of MAG’s country programmes, primarily through targeted support visits.
Our recruitment and selection processes, as well as our reputation, ensure that MAG remains an employer of choice within the sector and that quality candidates are attracted to work for us. MAG’s reward policies have been developed with the following key principles in mind:
Fair Ensure that all staff are equitably and appropriately paid for the work they complete Competitive Enabling MAG to attract and retain appropriately skilled and experienced staff Accountable Ensure that decisions made with regards to remunerations are transparent and justifiable Responsible MAG will adhere to any statutory requirements or other binding rules in place relating to salaries and benefits Affordable Ensure that MAG’s financial resources are used in the most responsible way
Salaries and benefits for all employees are reviewed regularly to ensure their continued appropriateness. Where available, local benchmarking data is used to ensure that salaries are competitive and fair within the local employment markets within which we recruit.
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THE MINES ADVISORY GROUP TRUSTEES’ REPORT (continued) For the year ended 30 June 2018
MAG is a diverse organisation. Currently, our workforce originates from 62 different countries. People are drawn to work for us from a diverse range of backgrounds and we rely on this combination of skills, experience and perspectives to deliver our work to greatest effect and for the maximum benefit of those who need it. Dignity at Work and Equality Opportunity policies are in place which ensure that decisions around recruitment, career progression, training opportunities and terms and conditions are made on the basis of merit.
MAG recognises that often its employees work in demanding and challenging contexts. Consequently, a number of Health and Welfare initiatives are in place including pre-deployment and biennial medical, Health and Welfare Handbook, which includes travel health and stress management guides, availability of counselling services and comprehensive medical and life insurance.
The HQ HR Team provide a strategic service to MAG HQ and the country programmes. Part of this involves supporting the development of in-country HR teams. The HQ HR team conduct regular support visits to country programmes to provide targeted support and mentoring to in-country HR Managers.
A HR Quality Assurance Framework (QAF) is in place to encourage the continual development of the HR functions in place in each location. The QAF sets out the minimum necessary requirements to ensure that staff are being managed in line with MAG standards and local requirements and that the risks associated with the employment and management of people in challenging contexts are managed and mitigated. The QAF is then used to work towards the continuous development of the HR function in country to improve the quality of HR services being provided to country programmes.
MAG works in dynamic contexts and change is consequently inevitable, whether it is strategically planned or unexpected. Change processes and procedures are in place to ensure the organisation responds appropriately, manages any associated risks and supports staff through times of uncertainly.
4. STATEMENT OF TRUSTEES’ RESPONSIBILITIES
The trustees (who are also directors of The Mines Advisory Group for the purposes of company law) are responsible for preparing the Trustees' Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".
Company law requires the trustees to prepare financial statements for each financial year which 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 trustees are required to:
select suitable accounting policies and then apply them consistently; observe the methods and principles in the Charities SORP; make judgments and estimates that are reasonable and prudent; state whether applicable UK Accounting Standards have been followed; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.
The Trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable 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 the trustees are aware: there is no relevant audit information of which the charitable company's auditor is unaware; and the trustees have taken all steps 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.
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THE MINES ADVISORY GROUP INDEPENDENT AUDITOR’S REPORT FOR THE YEAR ENDED 30 JUNE 2018
Independent auditor’s report to the members of The Mines Advisory Group
Report on the audit of the financial statements
Opinion In our opinion the financial statements of The Mines Advisory Group (the ‘charitable company’): give a true and fair view of the state of the charitable company’s affairs as at 30 June 2018 and of 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, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”; and have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise: the statement of financial activities (including income and expenditure account); the balance sheet; the cash flow statement; and the related notes 1 to 25.
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).
Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report.
We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (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 We are required by ISAs (UK) to report in respect of the following matters where: the trustees’ use of the going concern basis of accounting in preparation of the financial statements is not appropriate; or the trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the charitable company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
We have nothing to report in respect of these matters.
Other information The trustees are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in 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 or a material misstatement of the other information. 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 respect of these matters.
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THE MINES ADVISORY GROUP INDEPENDENT AUDITOR’S REPORT (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2018
Responsibilities of trustees As explained more fully in the statement of trustees’ responsibilities, the trustees (who are also the directors of the charitable company for the purpose of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements 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.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Report on other legal and regulatory requirements
Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit: the information given in the trustees’ report, which includes the strategic report and the directors’ report prepared for the purposes of company law for the financial year for which the financial statements are prepared is consistent with the financial statements; and the strategic report and the directors’ report included within the trustees’ report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified any material misstatements in the strategic report or the directors’ report included within the trustees’ report.
Matters on which we are required to report by exception Under the Companies Act 2006 we are required to report in respect of the following matters if, in our opinion: adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of trustees’ remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit.
We have nothing to report in respect of these matters.
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THE MINES ADVISORY GROUP INDEPENDENT AUDITOR’S REPORT (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2018
Use of our report This report is made solely to the charitable company’s members, as a body, in accordance with 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 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 the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Sarah Anderson FCCA (Senior Statutory Auditor) For and on behalf of Deloitte LLP Statutory Auditor Manchester, United Kingdom
13 February 2019
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THE MINES ADVISORY GROUP STATEMENT OF FINANCIAL ACTIVITIES (including income and expenditure account) For the year ended 30 June 2018
2018 2018 2018 2017 2017 2017 Total Total FUNDS: Unrestricted Restricted Funds Unrestricted Restricted Funds
Notes £'000 £'000 £'000 £'000 £'000 £'000
INCOME FROM:
Charitable activities 5 - 59,680 59,680 - 46,052 46,052
Donations and legacies 6 592 49 641 374 83 457
Other trading activities 7 132 - 132 65 - 65
Investments 8 11 2 13 22 2 24
Other income 9 377 29 406 257 24 281 TOTAL INCOME 1,112 59,760 60,872 718 46,161 46,879
EXPENDITURE ON:
Raising funds 10 242 - 242 263 - 263
Charitable activities 10 5,035 54,488 59,523 5,269 41,733 47,002 TOTAL EXPENDITURE 5,277 54,488 59,765 5,532 41,733 47,265
NET INCOME/(EXPENDITURE) (4,165) 5,272 1,107 (4,814) 4,428 (386)
Transfer between funds 16 5,483 (5,483) - 4,343 (4,343) -
NET MOVEMENT IN FUNDS 1,318 (211) 1,107 (471) 85 (386)
RECONCILIATION OF FUNDS:
Total funds brought forward 16 2,068 211 2,279 2,539 126 2,665
Net movement in funds for the year 1,318 (211) 1,107 (471) 85 (386) Total funds carried forward 16 3,386 - 3,386 2,068 211 2,279
There were no other recognised gains or losses other than those listed above and the net income for the year. All income and expenditure derives from continuing activities. The notes on pages 24 to 39 form part of these accounts.
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THE MINES ADVISORY GROUP CASH FLOW STATEMENT For the year ended 30 June 2018
As restated 2018 2017
Note £'000 £'000
Net cash flows from operating activities 6,649 10,379
Cash flows from investing activities Interest received 13 24 Purchase of plant and equipment 13 (3,915) (2,526)
Net cash flows from investing activities (3,902) (2,502)
Net increase in cash and cash equivalents 2,747 7,877
Cash and cash equivalents at beginning of year 17,550 9,340
Change in cash and cash equivalents due to exchange rate 260 333 movements
Cash and cash equivalents at end of year 20,557 17,550
Analysis of cash and cash equivalents Cash in hand 452 565 Bank accounts and Notice deposits (less than 3 20,105 16,985 months)
Total cash and cash equivalents 20,557 17,550
Reconciliation of net income/(expenditure) to cash generated by operations:
Net expenditure for the year 1,107 (386)
Adjustments for: Interest receivable 8 (13) (24) Increase in cash and cash equivalents due to exchange rate (260) (333) movements Depreciation charges 13 3,827 2,567
Operating cash flows before movement in working capital 4,661 1,824
Increase in debtors (5,702) (201) Increase in creditors 7,690 8,756
Cash generated by operations 6,649 10,379
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THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2018
1. LEGAL STATUS OF THE CHARITY The Mines Advisory Group (MAG), a public benefit entity, is incorporated in England and Wales as a company limited by guarantee not having a share capital. There are currently 13 Trustees who are also the members of the company. Each member has undertaken to contribute to the assets in the event of winding up a sum not exceeding £1. The charity is a registered charity. The registered office is given on page 1.
2. BASIS OF ACCOUNTING The financial statements are prepared under the historical cost convention, in accordance with the Statement of Recommended Practice “Accounting and Reporting by Charities (SORP 2015)” applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), as updated 1 January 2016; and the Companies Act 2006.
3. ACCOUNTING POLICIES The principal accounting policies are set out below:
3.1 Preparation of financial statements - going concern basis The trustees consider MAG to be operating on a going concern basis due to the number, value and financial viability of contracts secured through to December 2019 in addition to prudent assumptions on the anticipated level of business throughout this period. MAG has adequate resources to continue in operational existence for the foreseeable future, cash headroom has been analysed and is appropriate to current and forecast business levels.
The Trustees, therefore, consider that the going concern assumption is an appropriate basis on which to prepare these financial statements.
3.2 Income recognition Income from charitable activities, including income received under contracts and grants where entitlement to funding is subject to specific performance conditions, is recognised as earned as the related goods or services are provided. Performance conditions may be stipulated explicitly by the client or donor, or may be implicit as per MAG’s operational proposal. Grant income included in this category provides funding to support activities and is recognised where there is entitlement, probability of receipt and the amount can be measured reliably. Income is deferred when the donor has imposed conditions which must be met before the charity has unconditional entitlement or the donor has specified the funds can only be utilised in future accounting periods. In the absence of any stipulation from the funder, multi-annual grants where there is entitlement to income to cover more than one year, are recognised in line with project activity.
Donations, legacies and income from other trading activities are recognised where there is entitlement, probability of receipt and the amount can be measured reliably. Gifts in kind received are accounted for in the Statement of Financial Activities as soon as it is prudent and practicable to do so. They are valued as by the donor in the grant documentation.
Investment income is recognised on a receivable basis. Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity; this is normally upon notification of the interest paid or payable by the bank.
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THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
3.3 Expenditure Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably.
Expenditure is analysed between the activities in furtherance of the charity’s objects, cost of generating voluntary income and support costs. Expenditure is recorded in the financial statements in the period in which it is incurred, adjusted for creditors and accruals where material, and is inclusive of any VAT which cannot be reclaimed.
Charitable activities include direct costs, salaries and overhead costs of assisting communities affected by conflict overseas. Costs of raising funds include the salaries and overhead costs of UK staff involved in fund- raising and increasing public awareness.
Support costs comprise staff, head office and governance costs. The majority of staff and head office costs support charitable activities and are so allocated. Support costs that are fully attributable to that activity are charged directly to that activity. Costs are apportioned to the activity based on the amount of staff time absorbed by each activity. Governance costs comprise costs involving the public accountability of the charity and its compliance with regulation and good practice, as well as costs associated with the strategic direction of the organisation. These costs include costs related to statutory audit and legal fees.
3.4 Fund accounting Restricted funds represent income that has been received and recognised in the financial statements, which is subject to specific conditions imposed by the donor, client or grant making institution. These funds are not available for the Trustees to apply at their discretion. The purpose and use of the restricted funds is set out in note 16 to the financial statements. Unrestricted funds are monies that have been received towards the general objectives of the charity as a whole to be spent at the discretion of the trustees.
Where contracts accounted for within restricted funds include contributions toward support costs, an appropriate transfer is made between restricted and unrestricted funds.
3.5 Leasing contracts Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term, except that the rent free period under the charity’s lease of its UK head office is spread over the period to the first rent review in June 2020 as permitted under FRS 102 transitional provisions.
3.6 Foreign currencies The functional currency of the charity is considered to be sterling because that is the currency of the current economic environment in which it operates and these financial statements are presented in pounds sterling. Transactions in foreign currencies are translated into sterling at average monthly rates. Monetary assets and liabilities in foreign currencies are translated into sterling at the rate of exchange ruling at the balance sheet date. Any gain or loss arising on translation is included in the statement of financial activities.
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THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
3.7 Tangible fixed assets Tangible fixed assets in the UK are stated at cost less depreciation. Assets in the overseas programmes costing more than £2,500 are capitalised and depreciated in full in the year of acquisition. Any assets costing less than £2,500 are expensed.
Depreciation rates for HQ held assets are as follows: Equipment, Fixtures & Fittings – 20-33% straight line
3.8 Taxation The charity has been granted exemption from tax under Section 478 of the Corporation Tax Act 2010 on its charitable activities as a body established for charitable purposes only.
3.9 Overseas programmes MAG delivers programmes through a number of different legal entities in the countries in which it operates. MAG exercises full management control of all such entities and as such, all overseas branches and entities are incorporated within the accounts.
3.10 Subsidiary undertaking Explosive Risk Solutions Ltd, “ERS”, (Company Number 04030037) is a 100% subsidiary of MAG. The results of the subsidiary undertaking are not material to the combined group and have therefore not been consolidated into MAG’s financial statements.
On 18 September 2018 the directors made an application to strike off ERS from the Companies House Register. ERS was dissolved on 11th December 2018. The amounts owed by ERS to MAG have been written off in full.
3.11 Financial instruments Financial assets and financial liabilities are recognised when the charity becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through statement of financial activities, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a finance transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.
Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due. Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.
Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.
The charity uses derivative financial instruments to reduce its exposure to foreign exchange risk, in line with the charity’s risk management policies; the charity does not enter into speculative derivative contracts. Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently re-measured to their fair value at each reporting date. The resulting gain or loss is recognised in the Statement of Financial Activities.
26
THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
3.12 Employee benefits The charity operates a defined contribution pension scheme. The pension costs charged in the financial statements represent the contributions payable by the charity during the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the charity’s accounting policies, which are described in note 3, the Trustees are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Example judgements are: - Likelihood of programme closure - Likelihood of programme spend - Insurable claims - Valuations of derivatives
Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
All known material liabilities have been properly included in the financial statements, including provisions for tax, severance and social security liabilities where a liability is considered likely to crystallise. Other than as outlined in this note and in the accounting policies set out in note 3, the Trustees do not consider there are any critical judgements or sources of material estimation uncertainty requiring disclosure.
27
THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
5 ANALYSIS OF INCOME FROM CHARITABLE ACTIVITIES Income, all of which is restricted, was received and recognised under contracts and grants from the organisations set out below to carry out MAG's core activity of achieving a safe and secure future for those affected by armed violence, conflict and insecurity.
2018 2017
£'000 £'000
Australian Department of Foreign Affairs and Trade - 12
Belgian Ministry of Foreign Affairs 239 163
British High Commission - 200
Canadian Department of Foreign Affairs, Trade and Development 1,548 254
Department for International Development 5,547 3,085
Dutch Ministry of Foreign Affairs 5,062 3,054
European Commission 3,484 821
Fibertek 636 550
Foreign and Commonwealth Office 246 553
French Ministry of Foreign Affairs 1,339 1,199
German Federal Foreign Office 3,704 3,379
Irish Aid Department of Foreign Affairs and Trade 183 49
Japanese Ministry of Foreign Affairs 1,569 1,663
MAG America 20,592 18,725
Ministry of Foreign Affairs of Finland 483 203
Norwegian Ministry of Foreign Affairs 7,313 4,606 Swedish International Development Cooperation 1,273 845 Agency
Stichting Vluchteling 194 99
United Nations Office for the Coordination of Humanitarian Affairs (OCHA) 542 779
United Nations Office for Project Services (UNOPS) 2,893 4,450
United Nations Development Programme (UNDP) 841 120
United Nations Food and Agriculture Organisation - 165
United Nations Regional Centre for Peace and Disarmament in Africa 621 100 UNREC)
Trusts & Foundations 615 823 Miscellaneous Donors 756 155 59,680 46,052
Of the £20.6m from MAG America, £19.7m (2017: £16.8m out of £18.7m) had the U.S. Department of State’s Office of Weapons Removal and Abatement and Office of US Foreign Disaster Assistance as the back donors.
28
THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
6 ANALYSIS OF INCOME FROM DONATIONS AND LEGACIES Unrestricted Restricted Total Unrestricted Restricted Total Funds Funds Funds Funds Funds Funds
2018 2018 2018 2017 2017 2017
£'000 £'000 £'000 £'000 £'000 £'000
Public Donations, Appeals & Fundraising Events 357 22 379 190 81 271
Regular Giving (including gift aid) 192 2 194 157 2 159
Donations from Trusts, Foundations and Partnerships 11 25 36 13 - 13
Legacies 32 - 32 14 - 14 592 49 641 374 83 457
7 ANALYSIS OF INCOME FROM OTHER TRADING ACTIVITIES Unrestricted Restricted Total Unrestricted Restricted Total Funds Funds Funds Funds Funds Funds
2018 2018 2018 2017 2017 2017
£'000 £'000 £'000 £'000 £'000 £'000
Fundraising activities 130 - 130 62 - 62 Merchandise 2 - 2 3 - 3
132 - 132 65 - 65
29
THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
8 ANALYSIS OF INCOME FROM INVESTMENTS
Unrestricted Restricted Total Unrestricted Restricted Total Funds Funds Funds Funds Funds Funds 2018 2018 2018 2017 2017 2017
£'000 £'000 £'000 £'000 £'000 £'000
Bank interest received 11 2 13 22 2 24
9 ANALYSIS OF OTHER INCOME
Unrestricted Restricted Total Unrestricted Restricted Total Funds Funds Funds Funds Funds Funds 2018 2018 2018 2017 2017 2017
£'000 £'000 £'000 £'000 £'000 £'000
Insurance claims 346 - 346 169 - 169 Other income 31 29 60 88 24 112
377 29 406 257 24 281
30
THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
10 ANALYSIS OF EXPENDITURE All costs of charitable activities are incurred to carry out MAG's core activity of achieving a safe and secure future for those affected by armed violence, conflict and insecurity. All support costs relate to charitable activities. Included within support costs are governance costs of £116k (2017: £116k), being management salaries attributable to the governance of the charity, trustee expenses, audit fees and other professional fees.
Raising Charitable Raising Charitable Total Total funds activities funds activities
2018 2018 2018 2017 2017 2017
Activities undertaken directly: £'000 £'000 £'000 £'000 £'000 £'000
- 54,488 54,488 - 41,733 Overseas programmes - restricted 41,733
Overseas programmes - unrestricted - 937 937 - 628 628
Total direct activity expenditure - 55,425 55,425 - 42,361 42,361
Support costs: Staff related costs including travel 126 3,035 3,161 108 2,809 2,917
Premises, IT & Communications 6 441 447 46 539 585
Fundraising Events & Advertising 99 - 99 101 - 101
Professional fees & other costs 11 1,029 1,040 8 828 836
Exchange (gain)/loss - (407) (407) - 465 465
Total support costs - unrestricted 242 4,098 4,340 263 4,641 4,904
Total expenditure 242 59,523 59,765 263 47,002 47,265
31
THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
11 NET INCOME/(EXPENDITURE) FOR THE YEAR
Net income/(expenditure) is stated after charging/(crediting): 2018 2017 £'000 £'000 Depreciation of tangible fixed assets owned by the charity 3,827 2,567 Foreign exchange loss/(gain) (407) 465 Rentals under operating leases 1,672 966 Auditor's remuneration: - Fees payable to the charity's auditor for the audit of the charity's financial statements 56 51 - Audit of subsidiary - 2
- Fees payable to the charity's auditor for other services: - Grant certification services 30 27 - Taxation services - 1
12 ANALYSIS OF STAFF AND TRUSTEE COSTS
The average number of persons employed by the charity during the year was:
2018 2017 UK employees: No. No. Overseas projects 170 134 Programme support and administration 49 42 Fund-raising information and education 7 4 Overseas national employees 3,219 2,639 3,445 2,819
All employees are engaged in carrying out MAG's charitable activities.
Their aggregate remuneration comprised:
£'000 £'000 Salaries and wages - UK employees (including those working overseas) 10,890 8,172 Salaries and wages - Overseas national employees 19,504 15,785 Social security costs 278 218 Pension contribution 80 71
30,752 24,246
32
THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
12 ANALYSIS OF STAFF AND TRUSTEE COSTS (continued)
The number of employees whose emoluments, excluding pension contributions, was over £60,000 in the year was: 2018 2017 UK Int’l Total UK Int’l Total between £60,000 and £70,000 per annum: 3 31 34 7 13 20 between £70,000 and £80,000 per annum: 2 8 10 - 11 11 between £80,000 and £90,000 per annum: - 10 10 - 2 - between £90,000 and £100,000 per annum: 1 1 2 - - - between £100,000 and £110,000 per annum: - 1 1 1 - 1
The key management personnel of the charity are listed on page 1. The total remuneration (including pension contributions and employers’ national insurance) of the key management personnel for the year totalled £472k (2017: £489k).
13 TANGIBLE FIXED ASSETS Equipment, Field Assets Fixtures & Total Fittings
£'000 £'000 £'000
Cost
At 1 July 2017 14,986 449 15,435
Additions 3,823 92 3,915
At 30 June 2018 18,809 541 19,350
Depreciation
At 1 July 2017 14,795 343 15,138
Charge for the year 3,637 190 3,827
At 30 June 2018 18,432 533 18,965
Net Book Value
At 30 June 2018 377 8 385
Net Book Value
At 30 June 2017 191 106 297
All of the above assets are used in the administration of the charity or in support of its operations.
33
THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
14 DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR As
restated 2018 2017
£'000 £'000
Trade debtors 1,554 1,990
Prepayments and accrued income 8,177 3,456
Other debtors 1,716 299 11,447 5,745
The comparative figure for Prepayments and accrued income has been restated due to balances reclassified from deferred income. This has not impacted net expenditure for the prior year.
15 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
As restated 2018 2017
£'000 £'000
Trade creditors 289 380
Deferred income (see note below) 26,000 18,295
Other taxation and social security 78 110
Derivative financial instruments (see note 20) 271 566
Accruals 443 371
Other creditors 1,922 1,591 29,003 21,313
Deferred income
2018 2017
£'000 £'000
Balance as at start of year 18,295 10,193
Amount released to income (18,295) (10,193)
Amount deferred in the year 26,000 18,295
Balance as at end of year 26,000 18,295
Deferred income comprises income for charitable activities to be spent in future periods. The comparative figure has been restated as detailed in Note 14.
34
THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
16 MOVEMENTS IN FUNDS 1 July 30 June 2017 Income Expenditure Transfers 2018 £'000 £'000 £'000 £'000 £'000 Restricted funds analysed by Programme
Middle East
Iraq 45 14,355 (13,271) (1,142) (13)
Lebanon 8 3,146 (2,938) (209) 7
Syria - 8,853 (8,072) (810) (29)
East and Southern Africa
Angola 13 1,397 (1,343) (96) (29)
Somalia 1 1,641 (1,432) (215) (5)
South Sudan 30 5,984 (5,114) (903) (3)
Swaziland - 65 (58) (7) -
Zimbabwe (8) 533 (448) (76) 1
Sahel and West Africa
Burkina Faso - 778 (729) (46) 3 Democratic Republic of 17 2,050 (1,909) (151) 7 Congo Chad 4 2,533 (2,349) (181) 7 Guinea - 242 (228) (14) - Mali - 1,965 (1,799) (151) 15 Mauritania - 191 (181) (14) (4) Niger - 47 (44) (3) -
Nigeria - 1,328 (1,231) (91) 6
Sierra Leone 1 351 (330) (20) 2 Senegal 2 109 (85) (19) 7 West Africa – non-country - 258 (189) (69) -
specific
South and South east Asia
Cambodia 61 2,265 (2,128) (231) (33)
Laos 27 3,597 (3,318) (300) 6
Myanmar 4 924 (756) (169) 3
Sri Lanka 8 1,825 (1,685) (117) 31
Vietnam (20) 3,887 (3,545) (334) (12)
Other UK 15 151 (149) 48 65 Libya 3 - - - 3 Cyprus - 320 (266) (54) - Bosnia and Herzegovina - 729 (676) (78) (25) Peru - 236 (215) (31) (10)
Restricted funds 211 59,760 (54,488) (5,483) -
Unrestricted fund 2,068 1,112 (5,277) 5,483 3,386 Total funds 2,279 60,872 (59,765) - 3,386
35
THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
16 MOVEMENTS IN FUNDS (continued) 2017 COMPARATIVE
1 July 30 June
2016 Income Expenditure Transfers 2017
£'000 £'000 £'000 £'000 £'000 Restricted funds analysed by Programme
Middle East Iraq 29 11,486 (10,634) (836) 45 Lebanon - 3,273 (3,051) (214) 8 Syria - 3,159 (2,797) (362) - East and Southern Africa Angola 8 1,605 (1,451) (149) 13 Somalia 1 1,920 (1,757) (163) 1 South Sudan 17 3,662 (3,140) (509) 30 Swaziland - 35 (17) (18) - Zimbabwe - 37 (40) (5) (8) Sahel and West Africa Burkina Faso - 487 (451) (36) - Democratic Republic of 6 2,132 (1,940) (181) 17 Congo Chad - 999 (929) (66) 4 Mali - 2,415 (2,227) (188) - Nigeria - 533 (464) (69) - Sierra Leone - 426 (361) (64) 1 Senegal 3 337 (222) (116) 2 South and South east Asia Cambodia 23 2,300 (2,072) (190) 61 Laos 6 3,118 (2,836) (261) 27 Myanmar - 687 (604) (79) 4 Sri Lanka 18 1,897 (1,770) (137) 8 Vietnam 12 4,309 (3,953) (388) (20) Other UK - 262 (154) (93) 15 Libya 3 - - - 3 Cyprus - 1,006 (793) (213) - Bosnia and Herzegovina - 76 (70) (6) -
Restricted funds 126 46,161 (41,733) (4,343) 211
Unrestricted fund 2,539 718 (5,532) 4,343 2,068 Total funds 2,665 46,879 (47,265) - 2,279
The restricted funds balance is the consolidation of individual grant and contract balances in MAG’s country programmes that are being carried forward to next year in line with the individual terms and conditions of these grants and contracts. These restricted fund balances are consolidated by country to provide an appreciation of the level of activity being undertaken in each country of operation.
Unrestricted funds are spent or applied at the discretion of the trustees to further any of the charity’s purposes. Transfers from restricted to unrestricted reserves include contributions by donors/clients who have agreed that a contractual element of their restricted funds can be allocated towards the organisation’s operational overhead costs. Transfers from restricted to unrestricted reserves also include salary recharges and contract surpluses.
36
THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
17 ANALYSIS OF ASSETS AND LIABILITIES BETWEEN FUNDS
Unrestricted Restricted Total Unrestricted Restricted Total Funds Funds 2018 Funds Funds 2017
£'000 £'000 £'000 £'000 £'000 £'000
Tangible fixed 385 - 385 297 - 297 assets Net current assets 3,001 - 3,001 1,771 211 1,982 As at 30 June 3,386 - 3,386 2,068 211 2,279
18 OPERATING LEASE COMMITMENTS
Total future minimum lease payments under non- cancellable operating leases:
2018 2017 Within 2-5 years Over 5 Within 2-5 years Over 5 one year years one year years
£'000 £'000 £'000 £'000 £'000 £'000
Land and buildings 219 205 - 181 322 - Other 4 - - 3 - -
19 FINANCIAL INSTRUMENTS
The carrying value of the charity's financial assets and liabilities are summarised by category below:
As 2018 restated 2017 £'000 £'000 Financial Assets Measured at undiscounted amount receivable Trade and other debtors (see note 14) 11,718 6,311 Cash at bank and in hand 20,557 17,550
Measured at fair value Derivative financial liabilities (see note 20) (271) (566)
32,004 23,295 Financial liabilities Measured at undiscounted amount payable Trade and other creditors (see note 15) (2,732) (2,452)
(2,732) (2,452)
37
THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
20 DERIVATIVE FINANCIAL INSTRUMENTS
MAG receives funds in a number of currencies, but most of its expenditure is denominated in US dollars (USD) and UK Sterling (GBP). The net exposure of each currency is monitored and managed by the use of forward exchange contracts. On being awarded a contract denominated in any currency other than USD or GBP, MAG may enter into a forward foreign currency contract to manage the exchange rate risk arising between the award of the contract and the receipt of funds under the contract over the life of the contract.
Most forward exchange contracts mature within 12 months of the contract date; where MAG is awarded a multi-year funding contract, it may enter into a forward exchange contract which matures on the anticipated date of the final payment of funds. As at 30 June 2018, MAG has one forward exchange contract which matures in April 2019.
Forward foreign currency contracts are valued using quoted forward exchange rates and interest rates corresponding to the maturities of the contracts.
Outstanding contracts Average Notional Value Fair Value contractual exchange rate 2018 2017 2018 2017 2018 2017 £'000 £'000 £'000 £'000 Forward Exchange contracts Selling EUR to purchase USD 1.05 1.05 2,103 5,283 (271) (548) Selling SEK to purchase GBP - 11.04 - 906 - (11) 2,103 6,189 (271) (559) Put Option - 1,927 - (7) (271) (566)
Losses of £557k (2017: losses of £185k) have been recognised in the Statement of Financial Activities.
21 DONOR SPECIFIC NOTES
British Foreign and Commonwealth Office
Included in the Statement of Financial Activities are the following income and expenditure for Charitable Activities funded by the British Foreign and Commonwealth Office.
30 June 30 June
2017 Income Expenditure Transfers 2018
£ £ £ £ £ Burkina Faso - 45,909 (45,909) - - Democratic Republic of Congo - 200,000 (178,572) (21,428) - United Kingdom - - - (823) (823) - 245,909 (224,481) (22,251) (823)
2016/17 funding - 553,268 (489,937) (63,331) -
38
THE MINES ADVISORY GROUP NOTES TO THE FINANCIAL STATEMENTS (continued) For the year ended 30 June 2018
22 PENSION CONTRIBUTIONS
The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions of up to 5% for staff, 10% for the former Chief Executive Officer. All pension contributions are funded out of unrestricted reserves and are reflected within Support Costs in note 10.
Contributions paid by the company to the fund amounted to £80k (2017: £71k).
23 RELATED PARTIES Trustees: Expenses reimbursed or incurred directly by MAG in respect of 8 Trustees during the period amounted to £10k (2017: 13 Trustees - £10k). Of this, £2k (2017: £2k) related to travel and accommodation costs for trustees visiting MAG projects. No remuneration was paid to Trustees during the current or prior financial year in their capacity as Trustees.
No donations were received from t he trustees during the year (2 017: £nil).
In 2018 and 2017, Trustees were covered by the overall company indemnity insurance, the costs relating specifically to the trustees were not separately identified.
Colin Rowe was a Trustee of the charity until 1 December 2017 and a Director of North West Notaries Limited. During the year the charity contracted Notarial services from North West Notaries Limited totalling £Nil (2017: £734).
MAG America: MAG and MAG America work together to assist countries affected by armed conflict. MAG America is a 501(c)3 organisation that raises awareness of, and funds for, MAG’s life-saving work from US Government donors, foundations, corporations and individuals. MAG and MAG America are separately constituted and have independent boards.
Explosive Risk Solutions Ltd (ERS): ERS (Company Number 04030037) was a 100% subsidiary of MAG. In the year ended 30 June 2018, ERS reported a loss of £2k (2017: £2k) and the aggregate amount of share capital and reserves at 30 June 2018 is £(26)k (30 June 2017: £(24k)). MAG provides financial support to ERS by way of a loan; as at 30 June 2018 the balance outstanding was £41k (2017: £39k).
On 18 September 2018 the directors made an application to strike off ERS from the Companies House Register and ERS was dissolved on 11 December 2018. The amount owed by ERS to MAG has been written off in full post year end.
24 CONTINGENT LIABILITIES
At the date of signature, there are no contingent liabilities to report (2017: nil).
25 POST BALANCE SHEET EVENTS At the date of signature, there are no post balance sheet events to report (2017: nil).
39
THE MINES ADVISORY GROUP US DOLLAR ACCOUNTS For the year ended 30 June 2018
APPENDIX 1 - US DOLLAR ACCOUNTS
The financial information presented within this appendix represents extracts from the financial statements presented in US Dollars and does not form part of the audited financial statements of the company. The following accounting policy has been applied in the preparation of the information in this appendix.
Monetary assets and liabilities are translated into US dollars at the rates of exchange prevailing at the accounting date. Transactions in foreign currencies are recorded at the date of the transactions.
At the year end, these are translated to the actual rate on the last day of the year. All differences are taken to the statement of financial activities.
The following pages do not form part of the statutory accounts
40
THE MINES ADVISORY GROUP US DOLLAR ACCOUNTS For the year ended 30 June 2018
Statement of Financial Activities (including income and expenditure account) for the year ended 30 June 2018
2018 2018 2018 2017 2017 2017
FUNDS: Unrestricted Restricted Total Funds Unrestricted Restricted Total Funds
$'000 $'000 $'000 $'000 $'000 $'000
INCOME FROM: Charitable activities - 80,424 80,424 - 58,642 58,642 Donations and legacies 799 66 865 476 106 582 Other trading activities 177 - 177 83 - 83 Investments 14 2 16 28 3 31 Other income 480 39 519 327 31 358
TOTAL INCOME 1,470 80,531 82,001 914 58,781 59,695
EXPENDITURE ON: Raising funds 327 - 327 335 - 335 Charitable activities 6,787 73,428 80,215 6,709 53,142 59,851
TOTAL EXPENDITURE 7,114 73,428 80,542 7,044 53,142 60,186
NET INCOME/(EXPENDITURE) (5,644) 7,103 1,459 (6,130) 5,639 (492)
Transfer between funds 7,389 (7,389) - 5,530 (5,530) -
NET MOVEMENT IN FUNDS 1,745 (286) 1,459 (600) 108 (492)
RECONCILIATION OF FUNDS:
Total funds brought forward 2,580 375 2,955 3,312 267 3,580
Movement in Foreign Exchange 145 - 145 (132) - (132)
Total funds brought forward as adjusted 2,725 375 3,100 3,180 267 3,448 Net movement in funds for the year 1,745 (286) 1,459 (600) 108 (492) Total funds carried forward 4,470 89 4,559 2,580 375 2,956
41
THE MINES ADVISORY GROUP US DOLLAR ACCOUNTS For the year ended 30 June 2018
THE MINES ADVISORY GROUP - COMPANY LIMITED BY GUARANTEE
Balance Sheet as at 30 June 2018
2018 2017
$'000 $'000 $'000 $'000
FIXED ASSETS
Tangible assets 519 385
CURRENT ASSETS
Debtors 15,422 7,451
Cash at bank and in hand 27,702 22,764
43,124 30,215
CURRENT LIABILITIES
Amounts falling due within one year (39,084) (27,644)
NET CURRENT ASSETS 4,040 2,571
NET ASSETS 4,559 2,956
FUNDS
Unrestricted funds 4,470 2,581
Restricted funds 89 375
TOTAL FUNDS 4,559 2,956
42
THE MINES ADVISORY GROUP EURO ACCOUNTS For the year ended 30 June 2018
APPENDIX 2 - EURO ACCOUNTS
The financial information presented within this appendix represents extracts from the financial statements presented in Euros and does not form part of the audited financial statements of the company.
The following accounting policy has been applied in the preparation of the information in this appendix.
Monetary assets and liabilities are translated into Euros at the rates of exchange prevailing at the accounting date. Transactions in foreign currencies are recorded at the date of the transactions.
At the year end, these are translated to the actual rate on the last day of the year. All differences are taken to the statement of financial activities.
The following pages do not form part of the statutory accounts
43
THE MINES ADVISORY GROUP EURO ACCOUNTS For the year ended 30 June 2018
Statement of Financial Activities (including income and expenditure account) for the year ended 30 June 2018
2018 2018 2018 2017 2017 2017
FUNDS: Unrestricted Restricted Total Funds Unrestricted Restricted Total Funds
€'000 €'000 €'000 €'000 €'000 €'000
INCOME FROM:
Charitable activities - 67,473 67,473 - 62,103 62,103
Donations and legacies 671 55 726 504 112 616
Other trading activities 149 - 149 88 - 88
Investments 12 2 14 30 3 32
Other income 427 33 460 347 32 379 TOTAL INCOME 1,259 67,563 68,822 968 62,250 63,219
EXPENDITURE ON:
Raising funds 274 - 274 355 - 355
Charitable activities 5,694 61,603 67,297 7,106 56,279 63,385 TOTAL EXPENDITURE 5,968 61,603 67,571 7,460 56,279 63,739
NET INCOME/(EXPENDITURE) (4,709) 5,960 1,251 (6,492) 5,971 (521) Transfer between funds 6,199 (6,199) - 5,857 (5,857) -
NET MOVEMENT IN FUNDS 1,490 (239) 1,251 (635) 115 (521)
RECONCILIATION OF FUNDS:
Total funds brought forward 2,912 305 3,217 3,571 190 3,761
Movement in Foreign Exchange 5,149 - 5,149 (24) - (24)
Total funds brought forward as adjusted 8,061 305 8,366 3,547 190 3,737
Net movement in funds for the year 1,490 (239) 1,251 (635) 115 (521)
Total funds carried forward 9,551 66 9,617 2,912 305 3,217
44
THE MINES ADVISORY GROUP EURO ACCOUNTS For the year ended 30 June 2018
Balance Sheet as at 30 June 2018 As restated 2018 2017
€'000 €'000 €'000 €'000
FIXED ASSETS
Tangible assets 435 419
CURRENT ASSETS
Debtors 12,932 8,109
Cash at bank and in hand 29,014 24,770
41,946 32,879
CURRENT LIABILITIES
Amounts falling due within one year (32,764) (30,081)
NET CURRENT ASSETS 9,182 2,798
9,617 3,217 NET ASSETS
FUNDS
Unrestricted funds 9,551 2,912
Restricted funds 66 305
TOTAL FUNDS 9,617 3,217
45