HMC Projects in Central & Eastern Europe - Charities report - 19.2

REGISTERED COMPANY NUMBER: 03636789 (England and Wales)

REGISTERED CHARITY NUMBER: 1074491

REPORT OF THE TRUSTEES AND

UNAUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2019

FOR

HMC PROJECTS IN CENTRAL AND EASTERN

EUROPE

HMC PROJECTS IN CENTRAL AND EASTERN

EUROPE

CONTENTS OF THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2019

Page

Reference and Administrative Details

1

Report of the Trustees

2 to 5

Independent Examiner's Report

6

Statement of Financial Activities

7

Balance Sheet

8 to 9

Notes to the Financial Statements

10 to 14

HMC PROJECTS IN CENTRAL AND EASTERN

EUROPE

REFERENCE AND ADMINISTRATIVE DETAILS

FOR THE YEAR ENDED 31 AUGUST 2019

TRUSTEES

Mrs R C F Owens (chairperson)

Mrs R Wilkinson (resigned 1.9.19)

D J Knapman

D N Morrison

I M Small (resigned 25.10.18)

P M de Voil

J D Lever

A W McPhail

Mrs J Hopkinson

W M Phelan

Ms J S Gandee

Mrs N Dangerfield

J F Vick (appointed 13.11.18)

A C Jackson (appointed 17.5.19)

C J Townsend (appointed 17.5.19)

COMPANY SECRETARY AND ADMINISTRATOR

Dr E J Wolstenholme

EXECUTIVE

A G Boggis (operational director)

A N Lawrence (student co-ordinator) (resigned

1.9.18)

Mrs W McLachlan (student co-ordinator) (appointed

1.9.18)

REGISTERED OFFICE

12 The Point

Rockingham Road

Market Harborough

Leicestershire

LE16 7QU

REGISTERED COMPANY NUMBER

03636789 (England and Wales)

REGISTERED CHARITY NUMBER

1074491

INDEPENDENT EXAMINER

Bright Brown Limited

Chartered Accountants

Exchange House

St Cross Lane

Newport

Isle of Wight

PO30 5BZ

BANKERS

National Westminster Bank plc, Cambridge

Santander plc

Nationwide plc

Cambridge & Counties Bank

HMC PROJECTS IN CENTRAL AND EASTERN

EUROPE

REPORT OF THE TRUSTEES

FOR THE YEAR ENDED 31 AUGUST 2019

The trustees who are also directors of the charity for the purposes of the Companies Act 2006, present their report

with the financial statements of the charity for the year ended 31 August 2019. The trustees have adopted the

provisions of Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities

preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of

Ireland (FRS 102) (effective 1 January 2015).

OBJECTIVES AND ACTIVITIES

Objectives and aims

The objective is to advance the education of foreign students in the United Kingdom, especially but not necessarily

exclusively, students from Eastern Europe attending member schools of the Headmasters' and Headmistresses'

Conference, the Girls' School Association and the Boarding School Association.

Public benefit

The trustees have complied with their duty to have due regard to the Charity Commission's public benefit guidance

when exercising any powers or duties to which the guidance is relevant.

ACHIEVEMENT AND PERFORMANCE

Charitable activities

Interest in the scholarship programme seems as popular as ever both on the part of the schools generously offering

places and also the applicants competing for them. For the scholarship year 2018 to 2019 a total of 50 schools offered

scholarship places.

The interviews took place in 14 countries this year, and a total of 93 scholarships were awarded of which 55 were full

scholarships and 38 were reduced fee (partial) scholarships. The table below gives the comparative number of

scholarships awarded in 2016, 2017, 2018 and 2019 by country.

2016-17

2017-18

2018-19

2019-20

FS

RF

FS

RF

FS

RF

FS

RF

Armenia

-

-

3

1

3

2

2

3

Bosnia Herzegovina

3

-

5

1

1

-

3

-

Bulgaria

5

1

5

1

4

2

5

4

Czech Republic

5

7

4

3

4

-

1

2

Estonia

2

1

2

-

2

1

2

-

Georgia

5

4

5

6

5

7

5

6

Croatia

5

3

4

1

5

1

5

4

Moldova

6

1

6

2

6

7

5

5

Montenegro

5

5

6

10

5

8

6

7

Poland

3

-

1

1

1

-

-

-

Romania

4

2

3

2

5

1

8

2

Serbia

5

2

5

3

5

4

5

3

Slovakia

5

3

7

2

5

4

5

4

Ukraine

4

3

3

-

4

1

3

1

Total

57

32

59

33

55

38

55

41

The decline in the number of applicants, particularly in Bosnia, has highlighted the importance of publicity in the

countries where HMC Projects operates. Interviewers are quite active in receiving feedback from country coordinators

on the success of publicity campaigns and in some countries have contacted the local offices of the British Council to

elicit more support in getting the message out about the scholarship programme to potential applicants. In some

countries, appearances on local TV have been organised through country coordinators and this is an effective way of

publicising the scholarship programme and attracting applicants. HMC Projects continues to invest in publicity.

The total number of schools offering scholarships, either full or reduced fee or both, for the academic year 2018-19

stands at 50 and the number for 2019-20 is 48. This slight reduction does not seem to be impacting on the total

number of scholarships offered as shown in the table below:

FS

RF

2015-16

43

16

2016-17

47

18

2017-18

47

21

2018-19

42

19

2019-20

40

22

where FS and RF stand for full and reduced fee scholarships respectively.

This table does show that there has been a slight downward trend in recent years in the number of schools offering full

scholarships which has been compensated for in the gradual increase over the same period of the number of schools

offering reduced fee scholarships. Any school outside the UK participating in the scholarship programme will, as a

matter of policy, offer only reduced fee scholarships because any applicant applying for a reduced fee scholarship to

one of these will make a deliberate choice to apply there. That said, there are very few schools outside the UK offering

scholarships through this programme.

Reduced fee scholarships are awarded to those very able applicants who could not be awarded a full scholarship

simply due to lack of availability of places. Reduced fee scholars typically pay between 20% and 25% of full fees. The

placement fee, paid by schools in respect of each reduced fee scholar, has remained the same as last year at £1,250

and this is an essential component of the income of the charity. Part of this fee covers the cost of attendance at the

residential Orientation course for reduced fee scholars.

The cost of the Orientation course has been increasing year on year which includes accommodation, board and travel.

Almost all of the schools participating in the scholarship programme will now be taking international pupils and

providing their own induction programmes for them. A complication in the logistics of the course is that the schools do

not all start their term on the same date with the consequence that for some scholars their stay in Cambridge has to be

extended by several days with necessary supervision provided by HMC Projects. The trustees have taken the decision

based on these factors to discontinue the Orientation course from 2019. Therefore, the course held at the start of

September 2018 will have been the last.

Financial developments

The administration fee charged to scholars who took up their scholarship at their UK school in September 2018 was

£1,750 and £1,250 for those holding an EU passport and those with a non-EU passport respectively. For those starting

at their schools in September 2019 the fee was reduced to £1,400 and £900 reflecting the fact that these scholars

would not be attending an Orientation course organised by HMC Projects. The cost of a Tier 4 Child Student visa

continues to rise with the most significant part of the cost being immigration health surcharge (IHS). In January 2019

the government doubled the IHS from £150 p.a. to £300 p.a. resulting in the cost of this for a two year course being

£750. Compared to this rise, the increase in the visa application fee of £13 is relatively modest. For scholars from

Armenia, Georgia, Moldova and Ukraine there is an additional requirement for a TB test at a centre specified by the UK

government incurring further cost. In total, the cost of a visa application process (excluding the TB test) for those

scholars starting in September 2019 requiring a Tier 4 Child Student visa was £1,098 as shown in the table below:

Start of the scholarship

Visa application fee

Healthcare surcharge

Total

2018

£335

2.5 x £150 = £375

£710

2019

£348

2.5 x £300 = £750

£1,098

This fee has, for the first time, exceeded the administrative fee charged by HMC Projects to parents of those scholars

requiring a Tier 4 visa. The majority of scholars from Moldova hold dual citizenship and travel on a Romanian (EU)

passport and therefore do not require a visa. The UKVI continues to operate almost unaccountably with the result that

visa applications can be rejected on non-compliance of just one of the documents submitted. In such cases, a new visa

application is required with a fresh payment of the application fee and IHS. Appeals take too long and are invariably

unsuccessful. Application failure also impacts on the UK school concerned and risks the government withdrawing their

highly trusted status which enables them to raise a CAS for their international pupils.

Donations continue to be made to HMC Projects by alumni, usually on a monthly basis through a nominated PayPal

account, and HMC Projects is very grateful for these. The total received into the PayPal account from alumni during

2018-19 was £1,320 of which £36 was deducted in fees. One former scholar made a generous donation with was

fund-matched by her employer. Very few of these donations attract Gift Aid as the donors work outside the UK and are

not UK taxpayers. In total, £1,904 (net of fees) was received through alumni. All donations are used to provide

additional support for our scholars on a discretionary basis to allow them to benefit from opportunities at their schools

where financial constraints may not allow this. In this way donated funds will ensure that all our scholars can maximise

their opportunities.

The donation of £1,250 received from the Elworthy Trust to offset the administration fees of the scholar selected from

Kirovograd and other associated administration costs also qualifies for Gift Aid.

The total cost of insurance for public and professional liability remains unchanged at £1,374 in 2018-19.

FINANCIAL REVIEW

Financial position

The reserves of the Trust have increased and at the close of this financial year (2018-19) the reserves amounted to

£124,976 compared to £108,020 at the end of the previous financial year.

Incoming resources were £137,202 (2018 - £163,730). Prepaid fees and other prepaid income amounted to £105,300

(2018 - £119,330). Resources expended were £120,246 (2018 - £137,740) of which bursaries and grants to students

amounted to £16,500 (2018 - £17,207). Prepaid expenditure on student half terms amounted to £1,436 (2018 -

£1,238). Net surplus for the year was £16,956 (2018 - £25,990).

The distribution of these reserves across accounts with four different banks has ensured that reserves should not

exceed the sum guaranteed under the terms of the FSA to which all these banks are bound. This distribution of

reserves has also resulted in significantly better returns in interest payments.

In line with the approval from the trustees last year that the cost of publicity and promotion in 2018-19, described

above, should be met from the reserves, the total cost came to £919 (2018 - £1,303).

Reserves policy

The policy of holding a sum of at least 50% of the annual turnover in reserve has been maintained. This contingency

sum does not include the funds received as donations. The distribution of these reserves across accounts with four

different banks has generally ensured that reserves should not exceed the sum guaranteed under the terms of the FSA

to which all these banks are bound. This distribution of reserves in various savings accounts and bonds continues to

provide a return in interest payments.

FUTURE PLANS

For the next year the administration fees will change to £1,500 for scholars holding a passport from an EU country and

£700 for those who do not reflecting the increase in the total cost of a visa for the 1st year of the scholarship. The

bursary paid to each full scholar will remain at £300.

The Trustees and executive are proactive in approaching suitable schools to secure further offers of full and reduced

fee scholarships. They also keep under constant review the question of whether the charity should continue to operate

in each of the present 14 target countries or investigate opportunities in other European countries. For interviewing in

2020, plans are in place to:

- include Latvia alongside Estonia as part of a Baltic group to increase the number of suitable applicants;

- include the Republika Srpska in the Serbian operation as the gulf between the Serbian and combined Croatian and

Bosnian Muslim populations seems as wide as ever;

- take applicants from North Macedonia.

In addition, the Trustees have taken the decision to suspend the operation of the scholarship programme in Poland

due to the paucity of applicants of a suitable standard.

It remains to be seen if the level of scholarships offered by schools for 2020 can be maintained in the face of financial

pressures brought about by the substantial increase in the schools' contributions to the Teachers' Pension scheme

which will come into effect in 2019.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document

The charity is controlled by its memorandum and articles of association and constitutes a limited company, limited by

guarantee, as defined by the Companies Act 2006.

The charity was established to take over the activities of the HMC Foreign Students Fund, a charitable trust, and the

assets and liabilities of that trust were transferred to the charity on 30 April 1999 by way of a donation.

Key management remuneration

The charity reimbursed expenses totalling £11,453 (2018 - £13,171) in respect of mid-term holiday costs, Working

Group expenses, orientation expenses, agents fees, interviewing expenses and publicity to 3 (2018 - 4) key

management personnel.

In addition, consultancy fees were paid to key management personnel during the year, as follows:

A G Boggis £5,000 (2018 - £5,000)

A N Lawrence £nil (2018 - £7,500)

Dr E J Wolstenholme £8,000 (2018 - £8,000)

Mrs W F McLachlan £4,000 (2018 - £nil)

Approved by order of the board of trustees on 28 November 2019 and signed on its behalf by:

Mrs R C F Owens - Trustee

INDEPENDENT EXAMINER'S REPORT TO THE TRUSTEES OF

HMC PROJECTS IN CENTRAL AND EASTERN

EUROPE

Independent examiner's report to the trustees of HMC Projects in Central and Eastern Europe ('the Company')

I report to the charity trustees on my examination of the accounts of the Company for the year ended 31 August 2019.

Responsibilities and basis of report

As the charity's trustees of the Company (and also its directors for the purposes of company law) you are responsible

for the preparation of the accounts in accordance with the requirements of the Companies Act 2006 ('the 2006 Act').

Having satisfied myself that the accounts of the Company are not required to be audited under Part 16 of the 2006 Act

and are eligible for independent examination, I report in respect of my examination of your charity's accounts as

carried out under section 145 of the Charities Act 2011 ('the 2011 Act'). In carrying out my examination I have followed

the Directions given by the Charity Commission under section 145(5) (b) of the 2011 Act.

Independent examiner's statement

I have completed my examination. I confirm that no matters have come to my attention in connection with the

examination giving me cause to believe:

1.

accounting records were not kept in respect of the Company as required by section 386 of the 2006 Act; or

2.

the accounts do not accord with those records; or

3.

the accounts do not comply with the accounting requirements of section 396 of the 2006 Act other than any requirement that the accounts give a true and fair view which is not a matter considered as part of an independent examination; or

4.

the accounts have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities [applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)].

I have no concerns and have come across no other matters in connection with the examination to which attention

should be drawn in this report in order to enable a proper understanding of the accounts to be reached

G Kelly

ACA, FCCA

Bright Brown Limited

Chartered Accountants

Isle of Wight

Date: .............................................

HMC PROJECTS IN CENTRAL AND EASTERN

EUROPE

STATEMENT OF FINANCIAL ACTIVITIES

(INCORPORATING AN INCOME AND EXPENDITURE ACCOUNT)

FOR THE YEAR ENDED 31 AUGUST 2019

2019

2018

Unrestricted fund

Total funds

Notes

£

£

INCOME AND ENDOWMENTS FROM

Donations and legacies

2,025

18,638

Charitable activities

Scholar selection and placement

134,171

144,446

Investment income

2

1,006

646

Total

137,202

163,730

EXPENDITURE ON

Charitable activities

Scholar selection and placement

120,246

137,740

NET INCOME

16,956

25,990

RECONCILIATION OF FUNDS

Total funds brought forward

108,020

82,030

TOTAL FUNDS CARRIED FORWARD

124,976

108,020

HMC PROJECTS IN CENTRAL AND EASTERN

EUROPE (REGISTERED NUMBER: 03636789)

BALANCE SHEET

AT 31 AUGUST 2019

2019

2018

Unrestricted fund

Total funds

Notes

£

£

FIXED ASSETS

Tangible assets

6

173

-

CURRENT ASSETS

Debtors

7

13,236

17,382

Cash at bank

218,744

211,857

231,980

229,239

CREDITORS

Amounts falling due within one year

8

(107,177

)

(121,219

)

NET CURRENT ASSETS

124,803

108,020

TOTAL ASSETS LESS CURRENT LIABILITIES

124,976

108,020

NET ASSETS

124,976

108,020

FUNDS

9

Unrestricted funds

124,976

108,020

TOTAL FUNDS

124,976

108,020

The charitable company is entitled to exemption from audit under

Section 477 of the Companies Act 2006 for the year ended 31 August 2019.

The members have not required the company to obtain an audit of its financial statements for the year ended

31 August 2019 in accordance with Section 476 of the Companies Act 2006.

The trustees acknowledge their responsibilities for

(a)

ensuring that the charitable company keeps accounting records that comply with Sections 386 and 387 of the Companies Act 2006 and

(b)

preparing financial statements which give a true and fair view of the state of affairs of the charitable company as at the end of each financial year and of its surplus or deficit for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the charitable company.

These financial statements have been prepared in accordance with the provisions applicable to charitable companies

subject to the small companies regime.

The financial statements were approved by the Board of Trustees on 28 November 2019 and were signed on its behalf by:

Mrs R C F Owens -Trustee

HMC PROJECTS IN CENTRAL AND EASTERN

EUROPE

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2019

1.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements of the charitable company, which is a public benefit entity under FRS 102, have been

prepared in accordance with the Charities SORP (FRS 102) 'Accounting and Reporting by Charities: Statement of

Recommended Practice applicable to charities preparing their accounts in accordance with the Financial

Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2015)', Financial

Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the

Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Income

All income is recognised in the Statement of Financial Activities once the charity has entitlement to the funds, it

is probable that the income will be received and the amount can be measured reliably.

Income recieved in relation to student placements is deferred where it relates to a term or period taking place

after the year end.

Expenditure

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the

charity to that expenditure, it is probable that a transfer of economic benefits will be required in settlement

and the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis

and has been classified under headings that aggregate all costs related to the category. Where costs cannot be

directly attributed to particular headings they have been allocated to activities on a basis consistent with the

use of resources.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful

life.

Fixtures and fittings

- Straight line over 5 years

Computer equipment

- Straight line over 3 years

Taxation

The charity is exempt from corporation tax on its charitable activities.

Fund accounting

Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.

Restricted funds can only be used for particular restricted purposes within the objects of the charity.

Restrictions arise when specified by the donor or when funds are raised for particular restricted purposes.

Further explanation of the nature and purpose of each fund is included in the notes to the financial statements.

2.	INVESTMENT INCOME

2019

2018

£

£

Deposit account interest

1,006

646

3.	NET INCOME/(EXPENDITURE)

Net income/(expenditure) is stated after charging/(crediting):

2019

2018

£

£

Independent examiners' fee

1,500

1,560

Depreciation - owned assets

86

-

4.	TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 31 August 2019 nor for the year

ended 31 August 2018.

Trustees' expenses

The charity incurred expenses of £254 (2018 - £254) in respect of trustees' liability insurance.

In addition, the charity reimbursed expenses totalling £6,743 (2018 - £8,647) in respect of grants and awards,

Working Group expenses, orientation expenses, interviewing expenses and publicity to 8 (2018 - 8) trustees.

5.	COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES

Unrestricted fund

£

INCOME AND ENDOWMENTS FROM

Donations and legacies

18,638

Charitable activities

Scholar selection and placement

144,446

Investment income

646

Total

163,730

EXPENDITURE ON

Charitable activities

Scholar selection and placement

137,740

Total

137,740

NET INCOME

25,990

RECONCILIATION OF FUNDS

Total funds brought forward

82,030

TOTAL FUNDS CARRIED FORWARD

108,020

6.	TANGIBLE FIXED ASSETS

Fixtures and fittings

Computer equipment

Totals

£

£

£

COST

At 1 September 2018

1,728

-

1,728

Additions

-

259

259

At 31 August 2019

1,728

259

1,987

DEPRECIATION

At 1 September 2018

1,728

-

1,728

Charge for year

-

86

86

At 31 August 2019

1,728

86

1,814

NET BOOK VALUE

At 31 August 2019

-

173

173

At 31 August 2018

-

-

-

7.	DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2019

2018

£

£

Other debtors

2,542

-

Prepayments

10,694

17,382

13,236

17,382

8.	CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2019

2018

£

£

Accrued income

105,300

119,330

Accrued expenses

1,877

1,889

107,177

121,219

9.	MOVEMENT IN FUNDS

At 1.9.18

Net movement in funds

At 31.8.19

£

£

£

Unrestricted funds

General fund

108,020

16,956

124,976

TOTAL FUNDS

108,020

16,956

124,976

Net movement in funds, included in the above are as follows:

Incoming resources

Resources expended

Movement in funds

£

£

£

Unrestricted funds

General fund

137,202

(120,246

)

16,956

TOTAL FUNDS

137,202

(120,246

)

16,956

Comparatives for movement in funds

At 1.9.17

Net movement in funds

At 31.8.18

£

£

£

Unrestricted Funds

General fund

82,030

25,990

108,020

TOTAL FUNDS

82,030

25,990

108,020

Comparative net movement in funds, included in the above are as follows:

Incoming resources

Resources expended

Movement in funds

£

£

£

Unrestricted funds

General fund

163,730

(137,740

)

25,990

TOTAL FUNDS

163,730

(137,740

)

25,990

A current year 12 months and prior year 12 months combined position is as follows:

At 1.9.17

Net movement in funds

At 31.8.19

£

£

£

Unrestricted funds

General fund

82,030

42,946

124,976

TOTAL FUNDS

82,030

42,946

124,976

A current year 12 months and prior year 12 months combined net movement in funds, included in the above are as follows:

Incoming resources

Resources expended

Movement in funds

£

£

£

Unrestricted funds

General fund

300,932

(257,986

)

42,946

TOTAL FUNDS

300,932

(257,986

)

42,946

10.	RELATED PARTY DISCLOSURES

There were no related party transactions for the year ended 31 August 2019.