Company no: 02562565 Charity number:1002647
## Shumei Eiko Limited
# Trustees’ report and financial statements for the year ended 31 March 2024
Shumei Eiko Limited (a company limited by guarantee)
2024
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## Contents
|Contents
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|Reference and administrative details|1||
|Trustees’ report including Trustees’ responsibility statement|2-5||
|Independent auditors' report on the financial statements|6-9||
|Consolidated statement offinancial activities|10||
|Consolidated and charity balance sheets|11||
|Consolidated statement of cash flows|12||
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|Notestothefinancialstatements|13-21||
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Shumei Eiko Limited (a company limited by guarantee)
2024
Reference and administrative details of the Charity, its Trustees and advisers for the year ended 31 March 2024
:
Trustees ProfessorJ Craven (Chair) Professor M Horii Professor K Kawashima . Dr A Manning (appointed 26 May 2023) J Norwood (appointed 18 April 2024) Professor M Sekiguchi (resigned 27 September 2024) P A Todd
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Senior Management Team Professor M Horii - Principal (Chief Executive) J Archer - Finance Manager C Hanson - Programmes Manager M Shuttleworth - Operations Manager S Lake - HR Manager Company registration number 02562565 Charity registered number 1002647 Registered office Chaucer College Canterbury University Road Canterbury, Kent cT27U Independent auditors Kreston Reeves LLP Canterbury ; United Kingdom Bankers HSBC Canterbury
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Shumei Eiko Limited (a company limited by guarantee) Trustees’ report for the year ended 31 March 2024
2024
## Structure, governance and management
## Governing document
The Charity was formed as a company limited by guarantee on 27 November 1990. It is governed by a Memorandum and Articles of Association dated 27 November 1990.
The Company becamea registered charity on 24 April 1991. Its Charity Commission registration number is 1002647.
## Recruitment and appointment of new trustees
The appointment of trustees/directors is by the recommendation of the existing directors as laid down in the Memorandum and Articles of Association.
Training is provided by way of discussions with outgoing trustees and with senior managers within the organisation as well as being provided with a trustee pack which documents all the key internal information and statutory — duties of taking up such a position. These discussions are for incoming trustees to be briefed on the operations and controls within the college.
## Organisational structure
The Charity operates from its principal address in Canterbury. The Charity has an arm's length relationship with Shumei Gakuen Foundation (The 'Foundation'), which is based in Japan and which is its principal funder. Students from the Foundation are enrolled at the Charity’s college in the United Kingdom for part of their studies. Transactions with the Foundation are considered to be related party transactions. Except as set out in notes 10 and 21 to the financial statements, the Charity does not transact with other related parties.
Professor Mitsutoshi Horii is the Principal of Chaucer College and also the Chair of the Senior Management Team which oversees day-to-day operations of the College via delegated powers from the Trustees, who meet quarterly to ascertain performance of the College and to approve policies as required.
Any decisions regarding major purchases or policy changes in the operation of the College are discussed with the Foundation and decisions are agreed with the Board of Trustees in the UK and passed down to the Senior Management Team. Under English charity law, the Charity Trustees are responsible for the governance of the Charity in accordance with its charitable objects.
The day-to-day operations and normal decisions to maintain the continuity of the College are taken by the Senior Management Team.
The Charity has two wholly-owned subsidiaries. Shumei Eiko Property Ltd holds the College premises and leases them to the Charity. It commissioned the construction of Chaucer College which was completed in 1992. The land on which the College is built is leased from the University of Kent at a rent which is reviewed every five years. Shumei Eiko Services Ltd is dormant. Shumei Eiko Property Ltd donates its taxable profits to the Charity by way of Gift Aid each year.
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2024
## Shumei Eiko Limited (a company limited by guarantee)
## Remuneration of key management personnel and Trustees
Key management personnel are paid a salary within an agreed band which is based on local market rates. There are no performance-related elements within their remuneration package, and pensions are on the same basis as for all other employees. Trustees are not remunerated in their role as Trustees; the only Trustees who have received remuneration have received it in their capacity as employees and key management personnel on the same basis as other key management personnel.
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## Objectives and aims
The principal objectives and activities of the Charity, as set out in the Memorandum of Association, are to advance the education of young people and mature students through the learning of English and in particular, but without prejudice to, people of Japanese origin and to advance the education ofthe public in ail aspects of Japanese culture. The Charity aims to achieve its objectives by exceptional educational standards via its excellent teaching personnel and ancillary staff. .
## Public benefit
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The Trustees confirm that they have complied with the duty in section 4 of the Charities Act 2011 to have due regard to the public benefit guidance published by the Charity Commission in determining the activities undertaken by the Charity. In particular, the planned activities of the Charity contribute to the aims and objectives, delivering services valued by the users in advancing education of young people and mature people as well as educating the public in all aspects of Japanese culture.
Further information on the activities undertaken for the public benefit are given in the Charitable Activities section of this report.
## Strategic report
Oe international students, which are the principal means been gradually building up since resumption of activity activity .
## Charitable activities
Residential courses to teach English to international students, which are the principal means by which the Charity carried out its charitable activities, have been gradually building up since resumption of activity activity after the coronavirus pandemic in March 2022.
## Achievements and performance
The College continues to recover from the effects of the pandemic which meant no students on site from late March 2020 to late March 2022. The number of student weeks for students from the Foundation in Japan dropped slightly from 3,057 to 2,952, but student weeks for other international students rose strongly by 53% from 1,182 to 1,806. Confidence in international travel has recovered, but the global cost of living crisis and demographic trends continue to impact on student numbers.
## Non-charitable activities
Our non-charitable activities arise mainly from providing accommodation when it is not needed for our educational charity purposes. Now that courses have fully resumed this has become very limited.
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Shumei Eiko Limited (a company limited by guarantee)
2024
## Financial review
During the year, the Group generated income of £2,807,000 (2023: £2,597,000) and incurred expenditure of £3,477,000 (2023: £2,840,000), resulting in a deficit for the year of £670,000 (2023: £243,000).
The Group's unrestricted funds as set out in the balance sheet as at 31 March 2024 were £9,236,000 (2023: £9,906,000).
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The Board would like the level of free reserves which are not invested in tangible fixed assets to be at least equivalent to three months' expenditure and therefore, in normal circumstances, around £850,000. The actual level of free reserves as at 31 March 2024 was minus £594,000 (2023: minus £131,000). The Trustees keep the position under review regularly, and aim to rebuild reserves over the coming-years through annual operating surpluses and careful management of the Group's resources.
Tangible fixed assets are held for the charitable use of the College.
Funding is received mainly via fees received from the Foundation in Japan and from other educational establishments which send their students to the College. The expenditure incurred reflects the costs of running the College to educate the students to the required standard.
The Foundation has agreed to provide £700,000 of centre maintenance grants in the year ending 31 March 2025 which will help to rebuild the Group's reserves and to repay amounts owed to the Foundation at the balance sheet date.
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Going concern and plans for future periods
The financial statements have been prepared on the going concern basis of accounting.
Demand for our services since the balance sheet date has been reasonable but patchy, reflecting the challenges of global inflation and demography, despite the desire of many young people to catch up on lost years to improve their English language skills and to travel.
The principal objective for the next year is to return the business to profitability, bedding in a variety of new ways of working. One of the key elements of this will be increasing the numbers of international students outside the summer peak, especially from Latin America and East Asia who work ona different academic timetable to Europe.
The Trustees’ cash flow projections show that, on reasonably cautious assumptions about levels of income, without recourse to additional funding from borrowing or government grants, and with further support from the Foundation only at the level that they have specifically agreed, cash can be made to last beyond December 2025. Furthermore, the Foundation has agreed to provide further funding should it be required up to the end of 2025. On this basis, which the Trustees believe to be reasonable in the circumstances, the Trustees have a reasonable expectation that the Group will continue to exist for at least 12 months from the date of this report, and have therefore prepared the financial statements on a going concern basis.
- Principal risks and uncertainties The principal risk relates to the ability of the Group to continue in the context of prices both for costs and income. This risk has three principal elements as follows:
- Financial risks - can we return to profitability despite uncertain economic times and increases in the costs of staff?
- Product quality risks - can we maintain a quality product in the light of rapid changes in student expectations and challenges in delivering education?
- Staffing risk - in a competitive labour market, can we retain and recruit a sufficient level of staffing to deliver our courses successfully?
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2024
## Shumei Eiko Limited (a company limited by guarantee)
Disclosure of information to auditors
- Each ofthe persons who are Trustees at the time when this Trustees' report is approved has confirmed that:
- so far as that Trustee is aware, there is no relevant audit information of which the charitable Company's auditors are unaware; and
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- that Trustee has taken all the steps that ought to have been taken as a trustee in order to be aware of any relevant audit information and to establish that the charitable Company's auditors are aware of that information.
## Statement of Trustees’ responsibilities
The Trustees (who are also the directors of the Charity for the purpose of company law) are responsible for preparing the Trustees’ report including the Strategic report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Company law requires the Trustees to prepare financial statements for each financial year which give a true and fair view ofthe state of affairs of the charitable Company and the Group and of the incoming resources and application of resources, including the income and expenditure, of the Group for that period.
- In preparing those financial statements, the Trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles of the Charities SORP (FRS102);
- make judgements and accounting estimates that are reasonable and prudent;
- * state whether applicable UK Accounting Standards (FRS102) have been followed, subject to any material departures disclosed and explained in the financial statements; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable Company and the Group 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.
Approved by order of the members of the Board of Trustees and signed on its behalf by:
> ProfessorJ Craven Chairman
Date: 14 November 2024
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Shumei Eiko Limited (a company limited by guarantee) Independent auditors’ report to the members of Shumei Eiko Limited
2024
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## Opinion
We have audited the financial statements of Shumei Eiko Limited (the 'Parent Charitable Company’) and its subsidiaries (the 'Group') for the year ended 31 March 2024, which comprise the Consolidated Statement of Financial Activities, the Consolidated and Charity Balance Sheets, the Consolidated Statement of Cash Flows and the related notes, including the significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial a Reporting Standard 102, "The Financial Reporting Standard applicable in the UK and Republic of Ireland" (United Kingdom Generally Accepted Accounting Practice).
- In our opinion the financial statements:
- give a true and fair view of the state of the Group's and the Parent Charitable Company's affairs as at 31 March 2024 and of the Group's incoming resources and application of resources, including its income and expenditure, for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
## Basis for opinion
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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 Auditors’ responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with those requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
## Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
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Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Parent Charitable Company and its group's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.
## Other information
The other information comprises the information included in the annual report other than the financial statements and our auditors’ report thereon. The Trustees are responsible for the other information contained within the annual report. 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. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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Shumei Eiko Limited (a company limited by guarantee)
2024
Opinion 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 including the Strategic report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Trustees' report and the Strategic report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the charitable Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees’ report including the Strategic report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
- _* the Parent Charitable Company has not kept adequate and sufficient accounting records, or returns adequate for our audit have not been received from branches not visited by us; or
- the Parent Charitable Company financial statements are not in agreement with the accounting records and returns; or
- * certain disclosures of Directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.
## Responsibilities of trustees
As explained more fully in the Trustees’ responsibilities statement, the Trustees (who are also the directors of the charitable company for the purposes 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 Group's and the Parent Charitable Company's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the Group or the Parent Charitable Company or to cease operations, or have no realistic alternative but to do so.
## Auditors' 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 Auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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## Shumei Eiko Limited (a company limited by guarantee)
Irregularities, including fraud, are instances of non compliance with laws and regulations. We design procedures in . line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Capability of the audit in detecting irregularities, including fraud
Based on our understanding of the charitable company and its sector, and through discussion with the Trustees and other management (as required by auditing standards), we identified that the principal risks of noncompliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial! statements such as the Companies Act 2006, Statement of Recommended Practice, taxation and pension legislation. We communicated identified laws and regulations throughout our team and remained alert to any indications of noncompliance throughout the audit. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls}, and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure, management bias in accounting estimates and judgemental areas of the financial statements. Audit procedures performed by the engagement team included:
- Reviewing minutes of meetings of those charged with governance;
- * Enquiry of entity’s management to identify any instances of non compliance with laws and regulations; * Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias; and
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
> ~ thoseBecauseleadingof the toinherenta materiallimitationsmisstatementof an audit,in thetherefinancialis a statementsrisk that weorwillnonnotcompliancedetect all irregularities,with regulation.includingThis risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
- — Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an . opinion of the effectiveness of the charitable company's internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Trustees.
- Conclude on the appropriateness of the Trustees’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the charitable company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' report. However, future events or conditions may cause the charitable company to cease to continue as a going concern.
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2024
## Shumei Eiko Limited (a company limited by guarantee)
- Evaluate the overall presentation, structure and content ofthe financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events ina manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
## 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 Auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Charitable Company and its members, as a body, for our audit work, for this report, or for the opinions we have formed.
## Kresten Faye, Lol’ a
## Peter Manser FCA DChA, Senior Statutory Auditor
for and on behalf of Kreston Reeves LLP
## Statutory Auditors
## Canterbury
United Kingdom
Date: 14 November 2024
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Shumei Eiko Limited (a company limited by guarantee)
2024
Consolidated Statement of Financial Activities for the year ended 31 March 2024
(incorporating income and expenditure account)
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||||||||||
|---|---|---|---|---|---|---|---|---|
|Unrestricted|Restricted|Total|Total|
|funds|funds|funds|funds|
|Notes|2024|2024|2024|2023|
|.|£000|£000|£000|£000|
|income|from:|
|Charitable|activities|4|2,789|-|2,789|2,519|
|Other trading|activities|5|16|-|16|77|
|Other|income|-|furlough|grants|-|-|-|-|
|Investments|2|-|2|1|
|Total|income|2,807|-|2,807|2,597|
|Expenditure|on:|:|)|
|Charitable|activities|3,375|-|3,375|2,713|
|Raising|funds|7|102|-|102|127|
|Total|expenditure|6|3,477|-|3,477|2,840|
|Net|movement|in|funds|(670)|-|(670)|(243)|
|Reconciliation|of funds|
|Total|funds|at|start|of year|9,906|-|9,906|10,149|
|Net movement|in|funds|(670)|-|(670)|(243)|
|Total|funds|at|end|of year|9,236|-|9,236|9,906|
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The consolidated Statement of Financial Activities includes all gains and losses recognised in the year. All income and expenditure in both financial years relate to unrestricted funds.
The notes of pages 13 to 21 form part of these financial statements.
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2024
Company no: 02562565
## Shumei Eiko Limited (a company limited by guarantee) Consolidated and Charity balance sheets
## as at 31 March 2024
||||Group|Group|Charity|Charity|
|---|---|---|---|---|---|---|
|||Notes|2024|2023|2024|2023|
||||£000|£000|£000|£000|
|Fixed|assets||||||
||Tangible assets|11|9,830|10,037|91|103|
||Investments|12|-|-|9,847|10,038|
||||9,830|10,037|9,938|10,141|
|Current assets|||||||
||Stocks|13|13|8|13|8|
||Debtors|14|103|117|72|86|
||Cash at bank and in hand||71|222|70|161|
||||187|347|155|255|
|Creditors: amounts fallingduewithin oneyear||45|(764)|(451)|(3,539)|(3,163)|
|Netcurrent assets/ (liabilities)|||(577)|(104)|(3,384)|(2,908)|
|Creditors: amounts falling due after morethan one|||||||
|year||16|(17)|(27)|(17)|(27)|
|Net assets|||9,236|9,906|6,537|7,206|
|Charityfunds
||||||||
||Unrestricted funds||9,236|9,906|6,537|7,206|
|Total|funds||9,236|9,906|6,537|7,206|
The Trustees acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and preparation of financial statements.
The financial statements were approved and authorised for issue by the Trustees and signed on their behalf by:
Ay (i ProfessorJ Craven Chairman
Date: 14 November 2024
The notes of pages 13 to 21 form part of[these][financial][statements.]
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Shumei Eiko Limited (a company limited by guarantee) guarantee) Consolidated statement of cash cash flows for the year ended the year ended year ended ended 31 March March 2024
2024
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||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
|Shumei|Eiko|Limited|(a|company|limited|by guarantee) guarantee)|.|2024|
|Consolidated|statement|of cash cash|flows|
|for the year ended the year ended year ended ended|31 March March|2024|
|,|Notes|_|2024|2023|
|£000|£000|
|Cash flows from|operating|activities|17|(123)|98|
|Cash|flows from|investing|activities|
|Purchase|of tangible|fixed|assets|(20)|(95)|
|Investment|income|2|1|
|Net|cash|from|investing|activities|(18)|(94)|
|Cash|flows from|financing|activities|
|Bank|loan|repayments|(10)|(10)|
|Net|cash|from|financing|activities|(10)|(10)|
|Change|in cash|and cash|equivalents|in the year|(151)|(6)|
|Cash|and|cash|equivalents|at|the|start|of the|year|222|228|
|Cash|and|cash|equivalents|at the end|of the year|18|71|222|
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The notes of pages 13 to 21 form part of these financial statements.
Page 12 .
. Shumei Eiko Limited (a company limited by guarantee) Notes to the financial statements for the year ended 31 March 2024
:
2024
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## 1 General information
Shumei Eiko Limited is a private company limited by guarantee incorporated in England and Wales in the United Kingdom. The address of the registered office is Chaucer College Canterbury, University Road, Canterbury, Kent, CT2 7LJ. The company no is 02562565 and the charity number is 1002647.
The financial statements are presented in sterling which is the functional currency of the Group and rounded to the nearest £000.
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The significant accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all years unless otherwise stated.
## 2 Accounting policies
- (a) Basis of preparation offinancial statements
The financial statements have been prepared in accordance with the Charities SORP (FRS102) - 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 (FRS102) (effective 1 January 2019) and the Companies Act 2006.
;
Shumei Eiko Limited meets the definition of a public benefit entity under FRS102. Assets and liabilities are initially recognised at historical or transaction value unless otherwise stated in the relevant accounting policy.
The consolidated statement of financial activities, balance sheet and statement of cash flows include the financial statements of the Charity and its subsidiaries. Figures are consolidated on a line by line basis. The Charity has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own statement of financial activities in these financial statements.
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## (b) Going concern basis of accounting
The financial statements have been prepared on the going concern basis of accounting.
The Charity's business relies on students from overseas travelling to the Charity's premises for in-culture learning of English as a foreign language. Although demand for our services has rebounded strongly from the impact of the pandemic, this demand is volatile, with concerns especially in our three largest markets (Japan, Italy and Spain) around affordability combining with reduced population numbers in the age brackets who come to us, leading to ongoing uncertainties in the market.
The Trustees have reviewed the projected cash flows of the Group. The Trustees’ cash flow projections show that, on reasonably cautious assumptions about levels of income, and with further support from the Foundation only at the level that they have specifically agreed, cash can be made to last beyond December 2025.
)
Furthermore, the Foundation has agreed to provide further funding should it be required up to the end of 2025. On this basis, which the Trustees believe to be reasonable in the circumstances, the Trustees have a reasonable expectation that the Group will continue to exist for at least 12 months from the date of this report, and have therefore prepared the financial statements on a going concern basis.
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2024
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## Shumei Eiko Limited (a company limited by guarantee)
## (c) Income
All income, including income from charitable activities and trading income, is recognised once the Charity has entitlement to the income, it is probable that the income will be received and the amount of the income can be measured reliably.
Income from government and other grants is recognised at fair value when the Charity is entitled to it after any performance conditions have been met, when it is probable that the income will be received, and when the amount can be measured reliably. If entitlement is not met, these amounts are deferred.
Income is deferred where it relates to a future period. -
Income from rental accommodation is recognised when entitlement has accrued.
- .
## (d) Expenditure
Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, 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 classed by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges are allocated on the portion ofthe asset's use.
Expenditure on raising funds includes all expenditure incurred by the Group includes costs of non-charitable trading.
;
All expenditure is inclusive of irrecoverable VAT.
## (e) Operating leases
Rentals paid under operating leases are charged as expenditure ona straight line basis over the lease term.
## (f) Employee benefits
,
When employees have rendered service to the Charity, short-term employee benefits to which the employees are entitled are recognised at the undiscounted amount expected to be paid for that service.
Termination benefits are recognised as an expense when there is a detailed formal plan for termination and the Charity cannot realistically withdraw from the plan. ;
The Group uses a defined contribution pension arrangement, and the pension charge represents the amounts payable to the scheme by the Group in respect of the year.
## (g) Tangible fixed assets
Tangible fixed assets costing £1,000 or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably. :
Tangible fixed assets are initially recognised at cost, including cost of bringing them into their intended working condition. Thereafter they are stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is charged so as to allocated the cost of tangible fixed assets less their residual value over their estimated useful lives using the straight-line method. Depreciation is provided at the following annual rates:
|Long-term leasehold property|over lease term|
|---|---|
|Plant and machinery|10%|
|Motorvehicles|25%|
|Fixtures and fittings|20%|
|Computer equipment|20%|
|Otherequipment|15%|
Page 14 _
Shumei Eiko Limited (a company limited by guarantee)
2024
## (h) Investments
Investments in subsidiaries are stated at cost less provision for impairment.
## (i) Stocks
Stocks are stated at the lower of cost and net realisable value.
## (j) Debtors
Trade and other debtors are recognised at the settlement amount. Prepayments are stated at the proportion of the expense which relates to future periods.
## (k) Cash at bank and in hand
Cash at bank and in hand includes cash and short-term highly liquid investments with a maturity period of three months or less from the time of investment.
## (I) Liabilities
Liabilities are recognised when there is-an obligation as a result of a past event, it is probable that a transfer of an economic benefit will be required in settlement, and the amount of the settlement can be measured reliably.
## (m) Financial instruments
The Group only has financial assets and liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their - settlement value. Fund accounting accounting General funds are unrestricted funds which are available for use at the discretion of the Directors in furtherance of the general objectives of the Group and which have not been designated for other purposes. - All funds are general funds.
## (n) Fund accounting accounting
- 3 Critical accounting estimates and areas of judgment
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Accounting estimates and judgments will, by definition, seldom equal the actual outcomes. The most significant estimates and judgments which could have a material impact on the carrying values of assets and liabilities relate to the expected performance of the charity, and the useful economic life of the Group's assets.
- 4
|Incomefrom charitable activities|2024|2023|
|---|---|---|
|;|£000|£000|
|Course fees Shumei Gakuen Foundation|1,536|1,493|
|Course fees other|1,072|597|
|Exam fees|28|35|
|Centre maintenance grants|-|300|
|Other ancillary activities|153|94|
||2,789|2,519|
Centre maintenance grants in the prior year have been received from Shumei Gakuen Foundation to ensure that there remains a training centre where they can send their students for English Language tuition.
- 5
|Incomefrom othertrading activities|2024|2023|
|---|---|---|
||£000|£000|
|Rental income|16|77|
||16|77|
.
Page 15
; Shumei Eiko Limited (a company limited by guarantee)
2024
## 6 Analysis of expenditure by activity
7
||||||Support||||
|---|---|---|---|---|---|---|---|---|
||||Deprec-|Other|costs||||
|||Staff costs|iation|costs|allocation|2024||2023|
|||£000|£000|£000|£000|£000||£000|
||Charitable activities: education|942|-|775|1,658|3,375||2,713|
||Raising funds (see note 7)|40|-|28|34|102||127|
|||982|-|803|1,692|3,477||2,840|
||Support costs (see below)|633|227|832|(1,692)|-||oe|
|||1,615|227|1,635|-|3,477||2,840|
||||||Support||||
||||Deprec-|Other|costs||||
|||Staff costs|iation|costs|allocation|||2023|
|||£000|£000|£000|£000|||£000|
||Analysis ofprioryeartotal||||||||
||Charitable activities: education|760|-|506|1,447|||2,713|
||Raisingfunds (see note 7)|50|-|35|42|||127|
|||810|-|541|1,489|||2,840|
||Support costs (see below)|529|232|728|(1,489)|||-|
|||1,339|232|1,269|-|||2,840|
||Analysis ofsupport costs|||||2024||2023|
|||||||£000||£000|
||Premises costs|||||810||680|
||Housekeeping|||,||273||234|
||Management costs|||||150||152|
||Office costs|||||213|-|173|
||Governance costs (see below)|||||19||18|
||Depreciation|||||227||232|
|||||||1,692||1,489|
||Analysis ofgovernance costs|||||2024||2023|
|||||||£000||£000|
||Auditors' remuneration|||||19||17|
||Trustee expenses|||||-||1|
|||||||19||18|
||Expenditure on raisingfunds|||||2024||2023|
|||||||£000||£000|
|-|Marketing costs|||||102||127|
|||||||102||127|
,
Page 16
9
|Shumei Eiko Limited (a company limited byguarantee)|Shumei Eiko Limited (a company limited byguarantee)||2024|
|---|---|---|---|
|8|Staffcosts|2024|2023|
|||£000|£000|
||Wages and salaries|1,474|1,227|
||Social security costs|116|94|
||Defined contribution pension costs (see below)|25|18|
|||1,615|1,339|
The Charity operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Charity in an independently administered fund. The pension cost shown above represents contributions payable by the Charity to the fund. Contributions totalling £5,000 (2023: £4,000) were payable to the fund at the balance sheet date and are included in other creditors.
## Average employee numbers
Total headcount
Full time equivalents
**----- Start of picture text -----**
93 77
54 47
**----- End of picture text -----**
All employees of the Group are within the Charity.
No employee received remuneration amounting to more than £60,000 in either year.
The total amount of employee benefits received by key management personnel was £195,000 (2023: £197,000). The Charity considers its key management personnel to comprise the members of the Senior Management Team.
|Management Team.Team.|||
|---|---|---|
|Auditors’ remuneration|2024|2023|
||£000|£000|
|Audit ofthe Charity's accounts|14|13|
|Audit ofsubsidiaryaccounts|5|4|
|Tax compliance and advice|1|1|
||20|18|
- 10 Trustees’ remuneration and expenses
During the year, one Trustee has been paid remuneration from an employment within the Charity. The role of Trustee in each case is unpaid. The value of Trustees’ remuneration and other benefits was as follows:
|||||Salary|Pension|Total|Salary|Pension|Total|
|---|---|---|---|---|---|---|---|---|---|
|||||2024|2024|2024|2023|2023|2023|
|||||£|£|£|£|£|£|
|M|Horii|(highest|paid)|-|1,321|1,321|4,800|1,247|6,047|
|||||-|1,321|1,321|4,800|1,247|6,047|
The pension benefits above were accruing to 1 Trustee (2023: 1) in respect of defined contribution pension schemes. Payments to Trustees for travelling expenses to Board meetings totalled £357 (2023: Enil).
Page 17
Shumei Eiko Limited (a company limited by guarantee) 11 _—‘Tangible fixed assets
2024
,
**----- Start of picture text -----**
||||||||
|---|---|---|---|---|---|---|
|Leasehold|Plant &|Fixtures,|fittings &|
|property|machinery|equipment|Total|
|Group|£000|£000|£000|£000|
|Cost|
|At|start|of year|13,354|458|182|13,994|
|Additions|-|-|20|20|
|Disposals|-|(145)|(53)|(198)|
|At|end|of year|13,354|313|149|13,816|
|Depreciation|
|At|start|of year|3,531|347|79|3,957|
|Charge|for the|year|149|46|32|227|
|Disposals|-|(145)|(53)|(198)|
|At|end|of year|3,680|248|58|3,986|
|Net|book|value|,|
|At|end|of year|9,674|65|91|9,830|
|At|start|of year|9,823|111|103|10,037|
|Fixtures,|fittings|&|
|equipment|Total|
|Charity|£000|£000|
|Cost|
|At|start|of year|182|182|
|Additions|20|20|
|Disposals|(53)|(53)|
|At|end|of year|149|149|
|Depreciation|
|At|start|of year|79|79|
|Charge|for the|year|,|;|32|32|
|Disposals|a|(53)|(53)|
|At|end|of year|58|58|
|Net|book|value|
|At end|of year|91|91|
|At|start|of year|103|103|
**----- End of picture text -----**
The lease to which the leasehold property relates expires in 2089.
Page 18
2024
## Shumei Eiko Limited (a company limited by guarantee)
|||—|||||
|---|---|---|---|---|---|---|
|12|Fixed asset investments||||Investment|in subsidiary|
||||||companies||
||||||2024|2023|
||Charity||.||£000|£000|
||Cost||||15,254|15,254|
||Less provision forimpairment||||(5,407)|(5,216)
—|
||Net book value||||9,847|10,038.|
||The subsidiary companies, both ofwhich areowned 100% bythe Charityand are registered in England and||||||
||Wales, are as follows:||||||
|||Shumei Eiko Property||§Shumei Eiko Services|||
||||Ltd||Ltd||
||Company no||02388648||08958406||
||Principal activity||Leasing of properties||Dormant||
||||and accommodation||||
||||services||||
||Income forthe year (£000)||417||-||
||Expenditure fortheyear(£000)|(£000)|(348)||-||
||Profit/(loss) fortheyear|(£000)|69||-||
||Net assets atend ofyear(£000)|(£000)|9,847||1||
|13|Stocks||Group||Charity||
||||2024|2023|2024|2023|
||||£000|£000|£000|£000|
||Goods for use and resale||13.|8|13|8|
|14|Debtors||Group|Group|Charity|Charity|
||||2024|2023|2024|2023|
||Duewithin oneyear||£000|£000|£000|£000|
||Trade debtors||23|19|23|19|
||Other debtors||-|-|-|-|
||Prepayments and accrued income||80|98|49|67|
||||103|117|72|86|
|15|Creditors: amounts fallingdue withinoneyear||Group|Group|Charity|Charity|
||||2024|2023|2024|2023|
||||£000|£000|£000|£000|
||Bank loans (see note 16)||10|10|10|10|
||Trade creditors||607|273|607|273|
||Amountsowed togroup|undertakings|-|-|2,782|2,737|
||Taxation and social security||26|26|26|26|
||Other creditors||11|30|9|8|
||Accruals and deferred income||110|112|105|109|
||||764|451|3,539|3,163|
Trade creditors include £243,000 (2023: £nil} owed to the Foundation which is being repaid after the balance sheet date out of centre maintenance grants for the year ending 31 March 2025.
Page 19
2024
## Shumei Eiko Limited (a company limited by guarantee)
16
|Analysisofdeferred income||Group|Group|Charity|Charity|Charity|
|---|---|---|---|---|---|---|
|||2024|2023|2024||2023|
|||£000|£000|£000||£000|
|Deferred income at start ofyear|,|19|11|19||11|
|Amounts released from previous years|_|(19)|(11)|(19)||(11)|
|Amounts deferred in the year||19|19|19||19|
|Deferred income at end ofyear||19|19|19||19|
|Deferred income relates to course and|exam fees and accommodation||income invoiced|in advance.|||
|Creditors: amounts fallingdue aftermorethan oneyear|||||||
||,|Group|Group|Charity|Charity||
|||2024|2023|2024||2023|
|||£000|£000|£000||£000|
|Bank loans||17|27|17|-|27|
|||17|27|17||27|
||The bank loan, including the element underone year in note 15, is|a government-guaranteed bounceback|a government-guaranteed bounceback|a government-guaranteed bounceback|
|---|---|---|---|---|
||loan which is due for repayment by instalmentsthrough to November2026 and incurs||interest at 2.5% per||
||annum.||||
|17|Cash flowfrom operating activities||Group|Group|
||||2024|2023|
||||£000|£000|
||Net (expenditure)/incomeforthe year||(670)|(243)|
||Depreciation||227|232|
||Investment income||(2)|(1)|
||Movement in stocks||(5)|(3)|
||Movement in debtors||14|(36)|
||Movement in creditors||313|149|
||Cash flowfrom operating activities||(123)|98|
|18|Cash and cash equivalents||Group|Group|
||||2024|2023|
||||£000|£000|
||Cash at bank and in hand||71|222|
||Cash and cash equivalents||71|222|
|19|Changes in netdebt|1April|Cash|31March|
|||2023|flows|2024|
|||£000|£000|£000|
||Cash at bankand in hand|222|(151)|71|
||Bank loans|(37)|10|(27)|
||Netdebt|185|(141)|44|
Page 20
2024
## Shumei Eiko Limited (a company limited by guarantee) 20 Commitments
## Operating lease commitments
The commitments to make future minimum lease payments under non-cancellable operating leases were as follows: ; .
|follows:||;|.||
|---|---|---|---|---|
||Group|Group|Charity|Charity|
|.|2024|2023|2024|2023|
||£000|£000.|£000|£000|
|Within one year -equipment|27.|18|27|18|
|One tofive years -equipment|100|63|100|63|
|Within one year - properties|113|113|400|400|
|One tofive years - properties|452|452|1,600|1,600|
|Over five years - properties|6,859|6,972|24,300|24,700|
||7,551|7,618|26,427|26,781|
|Duringthe yearthe Group incurred expenditure|in respect ofoperating|leasesamountingto£141,000|||
|(2023: £141,000).
.||||,|
## 21 Related party transactions
The group's educational and related fee income includes £1,536,000 (2023: £1,493,000) which was generated by provision of courses of Shumei Gakuen Foundation on an arms' length basis. During the year, the Charity received grant funding of £nil (2023: £300,000) from the Foundation to ensure that the Charity is able to keep its facilities available for future courses. At the end of the year, there was a balance of £243,000 (2023: £nil) owing by the Charity to the Foundation... The Foundation in Japan employs M Sekiguchi, K Kawashima and M Horii who are Trustees and Directors of the Charity.
,
Gift Aid donations were made to the Charity during the year totalling £259,000 (2023: £267,000) from its subsidiary company Shumei Eiko Property Ltd.
- .
Rent was paid by the Charity to its subsidiary company Shumei Eiko Property Ltd totalling £400,000 (2023: £400,000) in respect of leases for the properties from which the Charity operates.
A charge of £12,000 (2023: £58,000) was paid to the Charity by its subsidiary company Shumei Eiko Property Ltd for support services. ;
.
Amounts owed to subsidiary Companies at the year end amounted to £2,782,000 (2023: £2,737,000). All balances owed to and from other companies within the Group are unsecured and interest-free.
Page 21