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2020-12-31-accounts

Registered Company Number: 04193179 Registered Charity Number: 1089490

HOPE AND HOMES FOR CHILDREN

TRUSTEES’ ANNUAL REPORT and CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 DECEMBER 2020

HOPE AND HOMES FOR CHILDREN Year ended 31 December 2020
CONTENTS
Legal and Administrative Information 3
Trustees’ Annual Report , including Strategic Report 5
Independent Auditor’s Report 21
Consolidated Statement of Financial Activities 24
Balance Sheets 25
Consolidated Statement of Cash Flows 26
Notes to the Financial Statements 27

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LEGAL AND ADMINISTRATIVE INFORMATION

Status

Hope and Homes for Children is a charitable company limited by guarantee. It was incorporated on 3 April 2001 (Company number: 04193179) and registered as a charity on 26 November 2001 (Charity number: 1089490).

Founder Presidents

Mark Cook OBE

Caroline Cook OBE

Patrons and Ambassadors

Kate Adie OBE DL Martin Bell OBE Matt Bell Rukhiya Budden Mariana Dahan General The Lord Dannatt GCB CBE MC DL Rick Foulsham CMG David Furnish Nick Hewer Alastair Humphreys The Lady Jopling MBE

Jay Jopling Gordon McInally The Rt Hon Sir Donald McKinnon ONZ GCVO Natalie Pinkham Mrs Lily Safra Dame Kristin Scott Thomas DBE The Rt Hon The Lord Selkirk of Douglas PC QC Sam Taylor-Johnson OBE James Whiting Claire Wright

Trustees and Directors

Matthew Banks ^ Andy Bilson (resigned 31 March 2020) Vicky Bruce ^ Richard Greenhalgh ^ Chair Mark Grinonneau * Treasurer Maria Herczog x (appointed 1 April 2020) Alexander Matheou (resigned 30 September 2020) Girish Menon x (appointed 7 December 2020) Chikondi Mpokosa x (appointed 7 December 2020) Ruchira Neotia o (appointed 1 September 2020) Ramesh Parmar * (appointed 19 October 2020) Camilla Otto x Anna Segall o Mark Shadrack (resigned 1 May 2020) Malcolm Sweeting * Mike Thiedke o

Senior Management Team (Key Management Personnel)

Mark Waddington Chief Executive Delia Pop Director of Programmes and Global Advocacy (until 15 May 2020) Stefan Darabus Director of Programmes (from 16 May 2020) Sue Rooke Director of Resources and Company Secretary (until 30 June 2020) Mark Shadrack Chief Operating Officer and Company Secretary (from 1 July 2020) Sarah Whiting Director of Marketing, Communications and Fundraising (until 30 April 2020) Angharad McKenzie Director of Marketing, Communications and Fundraising (From 1 May 2020)

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Registered Office and Principal Address: East Clyffe, Salisbury, Wiltshire, SP3 4LZ

Independent Auditor: Crowe U.K. LLP, 55 Ludgate Hill, London, EC4M 7JW

Bankers: Royal Bank of Scotland PLC, 48 Blue Boar Row, Salisbury, Wiltshire, SP1 1DF

Website: more information about the charity can be found at www.hopeandhomes.org

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TRUSTEES’ ANNUAL REPORT and STRATEGIC REPORT

VISION, MISSION, AND STRATEGY

What we do and why we do it

Hope and Homes for Children is one of the leading organisations working to reform the way children are protected and cared for.

Most children in orphanages are not in fact orphans. For example, estimates that there are 132 million orphans across sub-Saharan Africa, Asia, Latin America and the Caribbean, but that more than 90% of them have one parent still alive, and of those children over 95% are older than five, which challenges the widespread notion of orphanhood as being largely about parentless babies. So to call an orphanage an orphanage does not reflect reality. Nevertheless, we have decided to use the term because it enables us to confront the problem face on, openly and directly.

Orphanages inflict harm on children. For every three months that a child under three spends in an orphanage, they lose one month of physical growth. 37% of children confined in orphanages suffer violence and the majority endure levels of neglect that have lifelong consequences. These consequences are transmitted inter-generationally with profound human and economic costs for society. Even in the well-run orphanages, children do not do as well as those who have been supported to reintegrate with their families or who have been placed in other types of suitable family and community-based care.

Orphanages concentrate and lock up resources at a time when funding for social welfare and protection is more critical than ever. They are expensive to run, which alongside the poor outcomes children suffer as a consequence, makes them especially cost-ineffective.

To address this in a way that is sustainable and delivers national reform, our key partners are local and state authorities. We do of course work with many other organisations. Through these partnerships we help government agencies to develop the services that prevent children from being separated from their families in the first place, and to close orphanages by demonstrating how children can either be reintegrated with their families or, when necessary, placed in properly supported alternative family and community-based care.

Children thrive in loving, safe and secure families, however they are arranged. No family is perfect though, and some require support. In fact, with the appropriate support, many families that would otherwise be at risk of separation can provide a safe and loving environment in which children can grow up happily. The importance of this prevention element of our work cannot be overstated. It benefits children, those who care for them, and it is cost effective.

The benefits of family-based care are clear, and the evidence is conclusive. For example, our own evaluations have established that children placed out of orphanages, either to be reunited with their own families or when necessary into suitable family-based alternatives like foster care, rapidly improve across all physical, cognitive and well-being metrics within a six-month period, and largely catch up to where they should have been after 12 months. These findings are borne out by research undertaken by many studies.

Stable, trusting and loving relationships are the defining elements of family-based care. There are a wide range of family and community-based care options, and this is important because each child’s needs and circumstances are different. Having a diversity of options means that care can be provided for a child far more suitably and successfully than through the imposition of a one-size-fits-all arrangement.

Permanent placements are the priority and are sought through reintegration with parents, or placement with extended family, or into adoptive families, or in supported independent living arrangements. Permanency means that we are reducing the number of children in care and the amount of time spent in it. This leads to better outcomes for children.

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We help local authorities to develop foster care and residential services in small family-like homes as stepping stones toward permanent family and community-based options. Wherever suitable and possible we seek to ensure that these services maintain or develop ongoing contact for the children with their families and wider community. In all cases, the important thing is to make sure that families receive the necessary support so that relationships are stable and caring.

The principle we hold to is that the development of any family and community-based care arrangements should always be undertaken within the local context according to local cultural, social and economic conditions, with the best interests of the individual children as the central concern. We seek to do this through a systems approach so that reform and improvements benefit children nationally.

Our Vision

a world in which children no longer suffer institutional care.

Our Mission

is to be the catalyst for the global elimination of institutional care of children.

Our Ten-Year Aim

is that by 2030, worldwide, orphanages will become an unacceptable way of caring for children, and we will help to achieve this by:

Strategy Review

Our vision and mission remain unchanged, but we have faced sudden, radical and likely protracted changes in our context, many of them continuing to be dynamic with as yet unknown consequences. As with all organisations, the COVID-19 pandemic has had a significant impact on Hope and Homes for Children’s operations.

So to continue progressing the delivery of our mission in an effective and meaningful way, in 2020 we reviewed our strategy with three critical priorities in mind:

As a result of this review we have refined our theory of change and recast our three strategic objectives, for implementation from 2021 onwards.

Theory of Change

Our theory of change has the same four fundamental elements to it:

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Strategic Objectives

Strategic Objective 1: National Reform

We will contribute to the delivery and completion of child care and protection reform in those countries we have national programmes, and we will secure and progress the meaningful implementation of commitments toward it in those countries we have strategic pilot projects.

Strategic Objective 2: The Human Imperative

We will make family-based care, and the reforms required to ensure all children benefit from it, intergenerational, cross-cutting human imperatives that are integrated within key social development programming, strategic research, communications and policy commitments of strategic partners nationally and internationally.

Strategic Objective 3: Financing Reform

We will work to unlock the financing needed to win government commitments to national reform and progress the meaningful implementation of it, including through the reallocation from existing sources of finance and, where relevant, working with international partners to establish new financing mechanisms.

These objectives are driven by the core asset of our know-how - the practice base, expertise and the evidence associated with both. No other organisation has the breadth and depth of practical expertise that we have in delivering deinstitutionalisation programmes.

Strategic partnerships are required to lever all of these elements into place, as no one organisation can achieve any of this in isolation. The assumption underpinning our theory of change is that the global elimination of orphanages can only be achieved if every country that still has them actively commits to closing them all. This will require us to form, strengthen and leverage strategic partners to:

In 2021, we will update our performance management systems and develop a relevant set of milestones and metrics with which to monitor and evaluate our progress with this business plan and our strategy. Our aim will be to objectively measure progress while recognising that systems change is neither linear nor always best tracked using simple KPIs. Nonetheless, it is vital that we can evaluate, learn and tell the story of our achievements and challenges to all relevant stakeholders.

During the course of the next three years we want to have strengthened our organisational resilience in a way that will have enabled us to effectively address the opportunities and threats that will confront us, so that we are on track to achieve our Ten-Year Aim by December 2030.

Finally, but most importantly, we will put children and families at the heart of everything we do, from safeguarding to service development. Our country programmes already do some outstanding work

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relating to child participation, and we will expand upon that and seek to bring it meaningfully to all parts of our work.

Key activities

The key activities which will drive the delivery of our ten-year aim are:

Strategic Objective 1: National Reform

Strategic Objective 2: The Human Imperative

Strategic Objective 3: Financing Reform

STRATEGIC REPORT – WHAT WE ACHIEVED IN 2020

Context

In spite of the immense crisis that gripped the world and the challenges many of us faced at home and at work, we are very proud of what we achieved together for thousands of vulnerable children and their families last year.

Our unique challenge in 2020 was to keep fighting for a world in which no child has to suffer the torment of institutionalisation, in the face of a global pandemic which threatened to destroy families and drive children into institutions in horrifying numbers. Conversely, we also needed to protect children already in orphanages from the rush of panic closures which saw thousands sent back to their families with no planning, preparation or oversight.

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On frontlines all around the world, our dedicated staff adapted at speed, staying alongside children and families who needed them more than ever. We asked 168 children and young people we supported about their experience of the pandemic. Their stories, reflections and ideas in their lockdown diaries inspired and guided us. We reached 136,382 children through our prevention work alone last year—the highest number in our history, keeping them safe in families and sparing them the trauma of a childhood in an orphanage.

At the UN and in the EU, we kept the safety of children in orphanages and in families at risk of separation firmly on the agenda, and in the UK, we continued to bring locked-down audiences closer to our cause through stories that matter and innovative, imaginative virtual events .

The goals we set ourselves for 2020 were:

2020 achievements in numbers:

Priority 1 - Drive regional reform by closing four institutions in strategically important locations; and by setting up essential services to keep families together, to reunite families, and to build new families.

Most children who live in orphanages have at least one living parent but poverty, disability and other pressures force families to relinquish their children to damaging institutions. By supporting families to stay together, reuniting families who have been separated by the orphanage system and building new families through fostering and adoption, in 2020, we closed six orphanages Romania and Bulgaria, transforming the lives of 418 children and young people, each a unique individual who now has someone to love them and let them know they belong.

Working with local authorities, national governments and partner NGOs, we made good progress with closure programmes and system reform in Rwanda, Moldova and Transnistria, Bosnia & Herzegovina, Sudan, Ukraine, Uganda, South Africa, Nepal, and India.

We provided training for over 4,300 child protection professionals, supported 519 children to leave orphanages to start a new life in family or community-based care, and worked with thousands of families to prevent over 136,000 children from having to be confined to living in an institution.

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By putting in place services to support families and helping to develop strong national, regional and international policy and legislation, we continued to catalyse the further reform of child protection systems worldwide.

Priority 2 - Catalyse global reform with the Commonwealth and the European Union, and ensure 193 countries follow through on their commitment to the landmark UN Resolution to progressively eliminate orphanages.

In the course of 2020, our advocacy team, together with Lumos, secured meetings with the cabinets of nine European Commissioners to press for renewed commitment to childcare reform, inside the EU and beyond. As the world’s largest donor of development aid, EU leadership and funding is vital to end the institutionalisation of children worldwide. In partnership with Lumos and others, we secured crucial wording in the EU Action Plan on Human Rights and Democracy, including a specific commitment to promoting and supporting the transition from institutional care to family-based care.

Due to the COVID-19 pandemic, the biennial Commonwealth Heads of Government Meeting—an opportunity to raise care reform up the global agenda – was postponed to 2021. However, we maintained strong relationship with the Rwandan High Commissioner to the UK and with the ministerial teams in Rwanda to ensure the issue remains high on the agenda for the 2021 event.

We worked with more than 25 global NGOs to prepare for the UN Day of General Discussion (DGD), which will be focussed on the topic of children in alternative care. This is now scheduled to take place in September 2021, and we took a leading role in engaging children and young people in the design of the DGD, including by developing an online induction programme and shaping a global consultation.

Priority 3 - Raise the money and awareness needed to drive reform and see necessary changes made to childcare policy and legislation, by developing new strategic partnerships and launching a global public awareness and fundraising campaign.

When the COVID-19 pandemic took hold in early 2020, we originally estimated the potential reduction to our 2020 income budget to be between £1m and £1.5m. Examples of the impact are: • Third party events and organised events cancelled

To recover the potential loss, we implemented a plan with focus on four key areas:

The response to our Coronavirus Emergency Appeal was excellent, raising over £400,000 to keep children safe through the crisis, with people to love them. Major partners also rallied to support our emergency response. Allen & Overy extended its Global Charity Partnership with us until July 2021 and RELX generously extended its partnership until April 2022, to keep children with hearing impairments in Moldova safe at home with their families.

The extraordinary support we received from long-standing supporters and partners enabled us to navigate the immediate impact of Coronavirus. However, the ongoing impact of the pandemic leaves gaps in our future funding. Whilst we continue to adapt, we recognise the year ahead will be one of our toughest yet.

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PLANS FOR FUTURE PERIODS

Our progress in 2020 shows that momentum continues to build, despite the challenges of COVID-19. We cannot afford to slow the pace and our priorities for 2021 reflect this:

In line with our strategy, we aim to deploy our programme resources to drive our impact ahead of our growth. Despite the strong income generation in 2020, we expect a far more difficult outlook in 2021 and the need to improve the financial resilience of our organisation requires us to focus our investment where we can have the greatest impact.

We have therefore concluded that, during 2021, we will close our programme in Sudan. Since 1998 Hope and Homes for Children has played a pivotal role in the reform of the childcare system in the politically and culturally complex context of Sudan and in the development of alternative family care services, with many significant achievements. We are deeply indebted to our team in Sudan.

FUNDRAISING STRATEGY AND APPROACH

Hope and Homes for Children raises income from a variety of sources, including corporate organisations and their staff and customer bases; grant-making trusts, foundations and institutional sources, and from individuals giving directly or fundraising on our behalf either as part of a group or community or independently. To date, our approach has relied heavily on face-to-face engagement with our supporters, specifically through events where deeper relationships can be cultivated, new supporters are acquired, and direct income is generated. We are also the beneficiary of a number of fundraising events delivered by others, where money is raised via auctions, raffles, sponsorship or individual pledges. Our core team of fundraisers seek to build long-term relationships with funding partners and supporters based on shared values and objectives. Hope and Homes for Children depends on a relatively small group of supporters and our fundraising approach takes into account their needs and preferences. We have a regular and open dialogue with many supporters.

We have a strong track-record of building lasting relationships with supporters over many years which was evidenced in 2020, when we raised our highest level of income in our history, despite many planned fundraising events being severely disrupted or cancelled entirely due to COVID-19. Our deep and trusting relationships with our partners and supporters enabled us to call on their commitment to support us through a very challenging fundraising period.

In 2020 we received donations from 52 businesses and 51 foundations, excluding the Department for International Development (now the Foreign and Commonwealth Development Office).

Our fundraising complies with the fundraising codes as prescribed by the Fundraising Regulator, of which we are a registered member. We also ensure our practices are concurrent with all data protection laws, particularly the General Data Protection Regulation. We make our privacy policy available to all supporters and have the means to manage subject access requests, although we have never received such a request. In our regular communications to supporters we offer easy opt-outs of communications and the option to discuss specific communications requests and / or preferences directly with our team which can be easily managed through our database. We treat our responsibility towards supporters in vulnerable circumstances with the utmost importance and our fundraisers are provided with guidance and support to help them respond appropriately to any individual they consider this might apply to. We follow a relatively light communications schedule with our supporters and do not employ telephone or face-to-face agencies as part of our fundraising.

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We carefully select service partners, for example, event delivery partners with excellent experience and professional record, and ensure appropriate service level agreements and contracts are in place which adhere to all necessary regulation.

Where individual or groups of supporters are voluntarily raising funds on our behalf, we support them with the use of regulated platforms, for example Just Giving, for the collection of funds.

Our centrally managed fundraising work is undertaken by our directly employed or contracted fundraising team and we do not use professional fundraisers or commercial participants. We closely monitor the quality of our fundraising work and as part of this, review fundraising complaints from donors and members of the public. During 2020, we received 30 complaints about our fundraising work as compared to 39 in 2019. These reflect requests to not receive future communications through to supporters not receiving communications they expected.

RISK MANAGEMENT AND INTERNAL CONTROLS

Our strategy sets out our vision, mission, values and ten-year strategic aims. With the eradication of institutional care of children at the heart of our activities and a need for innovative solutions to deliver reform, it is clear that risk is inherent in our work. Through our governance framework, we seek to encourage proactive, well-managed taking of risk to deliver business objectives and embedding risk management in day-to-day operations.

Therefore we have developed a framework to identify, analyse and manage risks at a series of levels within the organisation - strategic, process and project. This framework also addresses residual risk and ensure it is set at acceptable levels for the organisation.

The Board has ultimate responsibility for overseeing risk management for the organisation as a whole but recognises that all staff and volunteers are critical in implementing the risk management process. The Senior Management Team reviews risks at its meetings as well as monitoring external developments that may impact on the organisation. It has systems and procedures to mitigate the risks identified from operational activity as well as procedures to minimise impact should any of the risks materialise. Risk management is a standing item at each of the meetings of the Finance Audit and Risk Committee, where any new risks or material increase in risk is discussed and raised at the Board of Trustees, if necessary.

The strategic risks identified through this work, and an outline of the mitigation plans, are:

Key Risk Outline of Mitigation Plan
Loss of impact and/or progress on
reform in key programme locations due
to shifting political and social priorities,
including those caused by the primary
and secondary impacts of COVID-19.		 Adapt our advocacy and communications to demonstrate
the critical relevance of child protection and care reform to a
wide variety of other societal issues (e.g. health, education).
Continue to demonstrate tangible delivery through
implementation and impact at the appropriate scale and use
this to engage other actors.
Safeguarding or child protection
incidents, including those we cannot
directly control, as our programmatic
work is increasingly delivered through
national and regional partners and to
increasing numbers of beneficiaries.		 Maintain focus on embedding our safeguarding policy and
procedures, including training of our own staff and
strengthening implementation, planning and monitoring.
Continue to review and evolve our ongoing due diligence
and capacity development of partner organisations.
Financial and reputational damage from
financial fraud, bribery or theft of
personal data.		 Continue to embed and review policies, procedures, controls
and training in key areas, with appropriate management
oversight, independent assurance, and governance from the
Finance, Audit and Risk Committee:
•
Financial processes

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Key Risk Outline of Mitigation Plan
•
Deployment and use of IT, including our end user IT
policy to mitigate cyber security risks
•
Data protection
Assess areas where investment in our people, processes
and systems should be prioritised to enhance internal
capacity and capability and acting on these
recommendations.
Inability to secure the level and type of
income required for us to deliver the
level of programmatic implementation,
research and advocacy needed as part
of our ten-year aim.		 Invest in unlocking significant new pipeline for direct support
and funding, expertly targeting, executing and converting the
right prospecting, pipeline and partnership opportunities that
will deliver a mixed and sustainable support-base and
revenue portfolio.
Prioritise sustainable, full cost recovery support and revenue
generation and the types of activities and relationships that
underpin this.
Apply test and learn methodologies to deliver well-planned
and executed fundraising.
Improve the systematic delivery of our relationship
management to unlock the value of our existing support
base; the execution of products and propositions focussed
on committed, multi-year and multi-faceted support and to
methodically innovate and execute in support of cross-
organisational targets.
Short-term and / or unanticipated
income shortfalls creating the need for
short-notice expenditure cuts which run
counter to our strategy or create co-
funding gaps.		 Build our free liquidity towards target levels to provide
greater short-term resilience.
Improve our forecasting processes, improving visibility and
reducing bias to provide high quality income signals,
allowing prompt and decisive actions to be taken in
response.
Gaps in capacity and capability leading
to inability to fully execute the business
plan.		 Continue to evolve our approach to wellbeing, establishing
our internal support network and deploying mental health
awareness training.
Review and where necessary make appropriate resourcing
adjustments, including roles, development plans and training
in order to be 'fit for purpose' to deliver on our plans.
Develop our approach to leadership, performance and
individual mandate so that all of our team members can
thrive.
Succession plans for key roles.

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Safeguarding

We have a robust organisational safeguarding structure that has been developed over the years, and we continually review our policy, practice, and safeguarding culture in order to ensure that it is being strengthened and improved. Our approach to safeguarding reflects our mission with the well-being of children at the heart of our work, so as well as a set of robust policies and clear reporting procedures we also place great importance on our participation work with children and young adults across the organisation. This ensures that the voices and opinions of children and young people on their life, and the services and support they receive, are heard and that they can influence the shape of programmes and raise issues affecting them. We have a full-time global safeguarding lead who works with a network of safeguarding focal people from the countries we operate in, and from our partners, overseeing training, incident reporting, inductions and benchmarking. Regular meetings with them ensure that their insights, concerns and recommendations are incorporated into the regular reviews of our safeguarding systems.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Structure

Hope and Homes for Children is a charitable company limited by guarantee. The Articles of Association dated May 2017 set out the objects and powers of the organisation. The Charity is governed by a Board of Trustees which has legal, financial, and managerial responsibility for the charity. The trustees constitute directors of the charitable company for the purposes of the Companies Act 2006 and trustees of the charity for the purposes of the Charities Act 2011.

Governance

New trustees are appointed at duly convened meetings for a period of three years after which they are eligible for re-election for a further three years. The Board has adopted formal procedures for the recruitment, selection, and induction of new trustees which are managed by the Nominations and Remuneration Committee (NRC). The terms of reference for the NRC include reviewing the size, skills, diversity, structure, and effectiveness of the Board, and making recommendations for any changes. The NRC reviews nominations and applications for trustees and puts forward recommendations of suitable nominees to the full Board.

Following the appointment of new members, an induction programme is arranged which aims to give the individuals the information and tools they need to fulfil their legal obligations as well as to play an effective role on the Board. The induction involves reading material, access to staff and, COVID restrictions permitting, visits to the offices in the UK and abroad. During the term of office of trustees, opportunities for on-going training are offered either through specifically arranged sessions or recommended reading lists, training courses and webinars.

The Board of Trustees comprises a minimum of three trustees with no maximum limit. The trustees meet five times a year when they consider the strategic direction and governance of Hope and Homes for Children. Formal delegation for certain areas of work has been given to four sub-committees:

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These committees report back on their proceedings to the full Board.

The Charity Governance Code

Hope and Homes for Children takes its governance responsibilities seriously and aims to have a governance framework that is fit for purpose, compliant, and efficient. In 2017 the Charity Governance Code was launched, and we continue to use the Code as a tool to support a review of our governance structures and consider the ways in which the organisation and its Trustees currently apply the Charity Governance Code’s seven principles and recommended practice.

During 2019 we commissioned an independent review of our governance arrangements covering the seven areas of the Code. The key area for improvement highlighted was in the diversity of our board, and we have actively addressed this through recruitment activity in 2020. Other work in 2020 included refreshing the sub-committee terms of reference and enhancing key Board processes and information flows.

The Charity Governance Code was refreshed in 2020, with key changes to the principles of Integrity and Equality, Diversity and Inclusion (previous Diversity). In response to this, in 2021 we are developing and implementing a Diversity, Equity and Inclusion action plan, with appropriate monitoring and measurement; and we will be refreshing and recommunicating our whistleblowing policy throughout our organisation.

Management

The Board has delegated the day-to-day management of the organisation to the Senior Management Team which comprises the Chief Executive, Director of Programmes, Director of Marketing, Communications and Fundraising, and the Chief Operating Officer. Matters such as strategic and operational plans and key policies are prepared by the Senior Management Team for consideration and approval by the Board.

Public benefit

The aims and benefits of Hope and Homes for Children are contained within the main body of this Report in the sections on Vision, Mission and Strategy, the Strategic Report and our Plans for Future Periods. We have considered the key principles of the Charity Commission’s general guidance about public benefit and have concluded that Hope and Homes for Children meets all the requirements.

Related Parties

Hope and Homes for Children has subsidiary organisations in Romania and South Africa.

Hope and Homes for Children Romania was established in 1999 as a non-governmental organisation with the Ministry of Justice. Its Board of Directors comprises senior managers of the UK charity and therefore its financial results are consolidated.

Hope and Homes for Children (South Africa) was set up as a non-profit company and public benefit organisation with tax exempt status in 2008. Its registration number is 2008/005926/08. In 2012, we handed over the projects we managed to local NGOs and this organisation has been dormant since then.

One Child One Family HHCSA was set up as a non-profit company and public benefit organisation with tax exempt status in November 2017. Its registration number is 2017/489514/08. Its Board of Directors comprises senior managers of the UK charity and therefore its financial results are consolidated.

Related party transactions are disclosed in note 9 to the financial statements.

Remuneration Policy

Our approach to remuneration is designed to ensure that we can attract and retain the talented and motivated people we need to achieve our mission and deliver our strategic goals. It is applied consistently across the organisation, including the Senior Management Team, membership of which is set out on page 3. We aim to pay within benchmarked ranges for the sector and within the context of affordability.

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FINANCIAL REVIEW

The financial review and consolidated financial statements incorporate the results of Hope and Homes for Children’s UK operations, its overseas controlled subsidiaries and branches.

After significant disruption and deficits in 2018 and 2019, in 2020 we successfully increased income and reduced expenditure to deliver an operational surplus of £1.9m.

Key Financial Summary

£m 2020 2019
Income 12.1 11.2
Expenditure 10.3 11.8
Net income / (expenditure) 1.9 (0.7)
Non-cash items and working capital movements 1.5 0.4
Net cash supplied by / (used in) operating activities 3.4 (0.3)
Cash flows from investing & financing activities (2.0) (0.4)
Change in cash and cash equivalents in the year 1.4 (0.7)
Cash and cash equivalents at the start of the year 1.3 2.1
Cash and cash equivalents at the end of the year 2.7 1.3

Income

Total income in 2020 was £12.1 million, an increase of £0.9m versus 2019. Income from individuals increased 34% to £1.9m and income from community groups increased by 52%, both of which demonstrate the fantastic response to our emergency appeal. On the other hand, income from fundraising events dropped by £1.2m (79%) after the highly successful 2019 Boodles Boxing Ball, and we also saw the impact of COVID-19 lead to the cancellation of numerous face-to-face events. Legacy income dropped by 90% as we experienced delays in receipt linked to the COVID-19 pandemic.

Income from trusts and foundations jumped by 73% to £4.3m with a broad base of excellent support, the response to our emergency appeal and the realisation of a strong pipeline of grants. Income from corporate donors held steady at £3.5m after a big increase in 2019. This was boosted by the second year of our partnership with Allen & Overy and numerous successful local partnerships in Romania.

Income from charitable activities increased again to £1.7m. The majority of this funding is represented by a grant from the Foreign and Commonwealth Development Office and a European Union grant which directly supports our work in Romania. The former funding is applied to a project entitled No Child Left Behind. It is working to transform children’s lives by creating a pathway for family and community living for children in institutional care in Rwanda and Uganda. The latter funding is for education-related initiatives for children and young people from orphanages in Romania.

Expenditure

Expenditure was reduced from £11.8 million in 2019 to £10.3m in 2020. The majority of this expenditure reduction was in fundraising activities, with lower staffing levels and a much lower number of face-to-face fundraising events. There was no further spend on our PRI (programme related investment) loan from the UBS Optimus Foundation.

Our expenditure on charitable activities fell from £8.6 million to £8.1m. Expenditure increased in Rwanda and Uganda as we entered the final stages of the FCDO-funded activities in those countries, and we increased investment in Bulgaria. Expenditure was lower in South Africa and we completed our planned exit from Latin America. Expenditure was also lower by £0.6m in Romania, although from a total investment perspective this was offset by higher levels of capital expenditure on family-type homes.

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Operational Surplus

The resulting operational surplus of £1.9m led, including exchange rate impacts, to an increase of £1.0m in each of unrestricted and restricted funds.

Cash

Operational expenditure included £0.9m of non-cash items (principally depreciation and donations of properties to local authorities). We also reduced our working capital by £0.9m during 2020 through accelerated grant receipts and the receipt of legacies. Our in-year cashflow from operating activities was therefore £3.4m.

Of this cashflow, £1.3m was invested in capital expenditure, mainly the construction of new family-type homes in Romania. We also repaid our £0.7m short-term debt facility and restructured our remaining £1.4m debt so that it is repayable over 10 years.

Net cash flow in 2020 was therefore £1.4m, leading to a closing cash position of £2.7m.

Impact of the COVID-19 Pandemic on Hope and Homes for Children

The global impact of the coronavirus (COVID-19) pandemic means that we, as all organisations, have operated in extremely challenging and unprecedented conditions. The circumstances continue to be fastchanging especially when considered in the worldwide context of our operations.

In 2020, we quickly established a COVID-19 Management Team, formed to ensure we were joined up at an organisational level and comprising the Senior Management Team with specialist input on safeguarding and human resources. The purpose of the team was to pre-empt and assess the impact of COVID-19 on the organisation and our beneficiaries, determine our response, identify opportunities, and prepare for and coordinate recovery. This was done through the lens of:

Regarding the financial impact, HHC’s income, like most organisations, is and will continue to be impacted directly because of COVID-19. Given a reasonable portion of our income is from event and “face-to-face”based fundraising HHC is vulnerable to this kind of external challenge. In addition, potential delays to our programme work could limit available fundable work for future proposals and potentially impact our ability to draw down existing committed income. Throughout our response we continue to review the situation regularly. In anticipation of protracted secondary impacts, we increased the intensity of our forecasting and established active innovation groups in order to solve problems, seize opportunities, and make the adaptations necessary to position our organisation more strongly.

Our approach to mitigating the risk to income, and the results from this work in 2020, have been set out above. In addition, we placed tighter controls on expenditure and have ringfenced savings that have arisen due to circumstances such as curtailment of travel. There has been limited use of the Government’s Coronavirus Job Retention Scheme.

Reserves Policy

Our commitment to our national programmes is long-term, to drive the sustainable change and impact which is at the heart of our mission. As an organisation relying almost entirely on annual fundraised income, we need to hold adequate funds to enable us to react to any unexpected adverse impact on our finances and ensure we can cover future liabilities as they arise, whilst any short or long-term adjustments are made to our strategy. Therefore the financial principles underpinning our strategy are:

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Year ended 31 December 2020

The trustees reviewed the reserves policy in November 2020 and updated it to be set in terms of the level of free liquidity (i.e. unrestricted cash and marketable securities, less short-term financial debt). The target range for free liquidity was set based on the need for working capital (given income seasonality) and sufficient unrestricted funding to allow for variability in future income versus expenditure commitments. Consideration of these needs and underlying income variability, we have set a target range for free liquidity of between £1.6m and £2.0m. This range equates approximately to between 2 and 2.5 months of total expenditure or between 4.5 and 6 months of unrestricted expenditure.

At the end of 2020, our free liquidity stood at £728k, equivalent to between 2 and 2.5 months of unrestricted expenditure. Our future plans balance the need to build our free liquidity while continuing to invest in our mission, and we are targeting the delivery of a modest unrestricted operational surplus in each of the next 4 years to reach our target range.

Going Concern

Hope and Homes for Children’s income is secured largely from voluntary income sources together with ongoing support from a number of international donors. Following the disruption to our growth plans in 2018, we have been successfully executing our plan to reduce our annual deficit while maintaining the capacity to deliver our operational objectives. The improvement in our financial resilience is demonstrated in our annual accounts, with a significant operational surplus in 2020, strong positive cashflow and debt reduction and restructuring.

The Trustees have considered several factors in concluding that it remains appropriate to adopt the going concern basis in the preparation of these financial statements. These have included:

Considering all of the above, the Trustees believe that Hope and Homes has adequate resources to continue operating successfully for the foreseeable future and so should continue to adopt the going concern basis in preparing the annual report and the financial statements.

Investment Policy

Our governing document provides us with the powers to invest monies not immediately required as we see fit. The policy we have set aims to invest funds to generate income. Cash balances are held to ensure funds are available to meet day to day commitments with any funds that are not instantly required being placed on term deposits until needed.

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Year ended 31 December 2020

Grant Making Policy

Hope and Homes for Children works in partnership with a number of organisations. Grants payable are made in line with strategic and business plans. We monitor grants operationally and financially throughout the term and particularly at the end of the grant. The annual planning process includes earmarking funding to be made available for grants in the following year.

Auditor

We will put a resolution to the Annual General Meeting proposing that Crowe U.K. LLP will be re-appointed as auditor.

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Year ended 31 December 2020

STATEMENT OF TRUSTEES’ RESPONSIBILITIES

The Trustees (who are also directors of Hope and Homes for Children for the purposes of company law) are responsible for preparing the Trustees’ Annual Report, Strategic Report and the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards).

Company law requires the Trustees to prepare financial statements for each financial year. Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and the group and of the incoming resources and application of resources, including the income and expenditure, of the charitable group for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company’s transactions, 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 and the provisions of the charity’s constitution. They are also responsible for safeguarding the assets of the charity and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Disclosure of Information to Auditor

Insofar as each of the trustees of the charitable company at the date of approval of this report is aware there is no relevant audit information (information needed by the charitable company’s auditor in connection with preparing the audit report) of which the charitable company’s auditor is unaware. Each trustee has taken all of the steps that he/she should have taken as a trustee in order to make himself/herself aware of any relevant audit information and to establish that the charitable company’s auditor is aware of that information.

The Trustees’ Annual Report (including the Strategic Report) was approved by the Board of Trustees on 27[th] May 2021 and signed on their behalf by:

MARK GRINONNEAU Trustee and Treasurer

RICHARD GREENHALGH Trustee and Chair

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Year ended 31 December 2020

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF HOPE AND HOMES FOR CHILDREN

Opinion

We have audited the financial statements of Hope and Homes for Children (‘the charitable company’) and its subsidiaries (‘the group) for the year ended 31 December 2020 which comprise the Consolidated Statement of Financial Activities, the Group and Company Balance Sheets, the Consolidated Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements:

Basis 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 group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustee's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable company's or the 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 trustees are responsible for the other information contained within the annual report. 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.

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 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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Opinions on other matters prescribed by the Companies Act 2006

In our opinion based on the work undertaken in the course of our audit

Matters on which we are required to report by exception

In light of the knowledge and understanding of the group and charitable company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the directors’ report included within the Trustees’ Annual 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:

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement set out on page 19, 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 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.

Details of the extent to which the audit was considered capable of detecting irregularities, including fraud and non-compliance with laws and regulations are set out below.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We identified and assessed the risks of material misstatement of the financial statements from irregularities, whether due to fraud or error, and discussed these between our audit team members. We then designed and performed audit procedures responsive to those risks, including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion.

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We obtained an understanding of the legal and regulatory frameworks within which the charitable company and group operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006, together with the Charities SORP (FRS 102). We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items.

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the charitable company’s and the group’s ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the charitable company and the group for fraud. The laws and regulations we considered in this context for the UK operations were employment legislation, taxation legislation and General Data Protection Regulations. We also considered compliance with local legislation for the group’s overseas operating segments.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Trustees and other management and inspection of regulatory and legal correspondence, if any.

We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within the timing of recognition of income, grants payable, and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management, and the Finance, Audit and Risk Committee about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals, reviewing accounting estimates for biases, reviewing regulatory correspondence including that with the Charity Commission, and reading minutes of meetings of those charged with governance.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed noncompliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect noncompliance with all laws and regulations.

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.

Nicola May Senior Statutory Auditor For and on behalf of Crowe U.K. LLP Statutory Auditor

London Date: 2[nd] June 2021

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Year ended 31 December 2020

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (incorporating an income and expenditure account) for the year ended 31 December 2020

2020 2019
Notes Unrestricted Restricted Total Unrestricted Restricted Total
£ £ £ £ £ £
Income from:
Donations and
legacies		 2 3,523,674
6,826,841
10,350,515
4,184,570		 5,489,121
9,673,691
Charitable activities 4 -
1,679,549
1,679,549
-		 1,463,648
1,463,648
Trading activities 13,182
-
13,182
10,653		 -
10,653
Investment income 1,226
235
1,461
2,810		 -
2,810
Other income 24,835
77,257
102,092
-		 14,837
14,837
Total income 3,562,917
8,583,882
12,146,799
4,198,033		 6,967,606
11,165,639
Expenditure on:
Raising funds 5 1,320,504
811,850
2,132,354
2,359,546		 825,970
3,185,516
Charitable activities
Work globally to
eradicate the institutional 5 2,552,745
5,592,222
8,144,967
2,499,265		 6,143,661
8,642,926
care of children
Total expenditure 3,873,249
6,404,072
10,277,321
4,858,811		 6,969,631
11,828,442
Net income/
(expenditure)		 (310,332)
2,179,810
1,869,478
(660,778)		 (2,025)
(662,803)
Transfers 1,229,132
(1,229,132)
-
126,799		 (126,799)
-
Other recognised
gains/(losses)		 62,059
87,077
149,136
-		 (387,447)
(387,447)
Net movement in funds 980,859
1,037,755
2,018,614
(533,979)		 (516,271)
(1,050,250)
Reconciliation of funds:
Total funds brought
forward		 16 883,392
3,691,581
4,574,974
1,417,372		 4,207,852
5,625,224
Total funds carried
forward		 16 1,864,251
4,729,336
6,593,587
883,393		 3,691,581
4,574,974

The notes on pages 27 to 41 form part of these financial statements.

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Year ended 31 December 2020

BALANCE SHEETS
as at 31 December 2020 Registered Company Number: 4193179
Group Charity
Notes
2020		 2019 2020 2019
£ £ £ £
Fixed assets:
Tangible fixed assets 12 2,705,521 2,980,821 26,356 32,741
Current assets:
Donated properties under
development 2,478,752 1,590,469 - -
Stocks 28,923 645 - -
Debtors and prepayments 13 577,225 1,548,550 430,048 1,258,887
Short-term bank deposits and cash
resources 14 2,718,886 1,321,613 2,408,644 1,001,770
5,803,786 4,461,277 2,838,692 2,260,657
Liabilities:
Creditors: amounts falling due
within one year 15a 544,803 1,424,053 451,641 1,157,682
Net current assets 5,258,983 3,037,224 2,387,051 1,102,975
Creditors: amounts falling due after
more than one year 15b 1,370,917 1,443,071 1,370,917 1,443,071
Net assets 6,593,587 4,574,974 1,042,490 (307,355)
Funds:
Restricted funds 16/17
4,729,336		 3,691,581 1,605,091 733,380
Unrestricted funds 16/17
1,864,251		 883,393 (562,601) (1,040,735)
Total funds 6,593,587 4,574,974 1,042,490 (307,355)

The notes on pages 27 to 41 form part of these financial statements.

The parent charity made a surplus in the year of £1,349,845 (2019: deficit of £1,033,411)).

The financial statements on pages 24 to 41 were approved and authorised for issue by the Board of Trustees on 27[th] May 2021.

Signed on behalf of the Board of Trustees by:

MARK GRINONNEAU Trustee and Treasurer

RICHARD GREENHALGH Trustee and Chair

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Year ended 31 December 2020

CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31 December 2020

Notes 2020 2019
£ £
Cash flows from operating activities:
Net cash provided by/(used in) operating activities 20 3,446,400 (271,610)
Cash flows from investing activities:
Interest received 1,461 2,810
Purchase of property (502) (3,064)
Purchase of other fixed assets (52,928) (22,507)
Purchase of assets under development (1,248,965) (1,118,540)
Net cash (used in) investing activity (1,300,934) (1,141,301)
Cash flows from financing activities:
Cash (outflows)/inflows from loans (700,000) 702,381
Interest paid (28,861) (28,861)
Net cash (used in)/provided by financing activity (728,861) 673,520
Change in cash and cash equivalents in the year 1,416,605 (739,391)
Cash and cash equivalents at the start of the year 1,321,613 2,074,988
Change in cash and cash equivalents due to
exchange rate movements		 (19,332) (13,984)
Cash and cash equivalents at the end of the year 2,718,886 1,321,613

The notes on pages 27 to 41 form part of these financial statements.

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Year ended 31 December 2020

NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2020

1. ACCOUNTING POLICIES

Legal Status of the Charity

Hope and Homes for Children is a company limited by guarantee and is registered in England and Wales with the Charity Commission (Reg No: 1089490) and with Companies House (Reg No: 04193179). The charitable company was incorporated in April 2001 and has no share capital. The members of the company are the Trustees named on page 3. In the event of the company being wound up, the liability in respect of the guarantee for each member is limited to £10. At the balance sheet date there were 13 members.

Registered and principal office

The registered and principal office of Hope and Homes for Children is East Clyffe, Salisbury, Wiltshire, SP3 4LZ.

Basis of preparation

The financial statements have been prepared in accordance with 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 2019) (Charities SORP 2019) and the Financial Reporting Standard applicable in the UK and the Republic of Ireland (FRS102).

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

Hope and Homes for Children meets the definition of a Public Benefit Entity under FRS 102.

Basis of consolidation

The financial statements consolidate the results of the charity and its subsidiary undertakings (Hope and Homes for Children – Romania; and One Child One Family HHC – South Africa) on a line-by-line basis. Hope and Homes for Children – Romania is registered with the Judiciary of Baia Mare in Romania (certified: 23 September 2001). One Child One Family HHC South Africa is registered a non-profit company (NPC) with the Companies and Intellectual Property Commission in South Africa (registered 1 November 2017). The Boards of the subsidiaries include senior managers of the charity and the organisations are managed on a unified basis.

The other subsidiary undertaking, Hope and Homes for Children (South Africa), was dormant during the year and therefore are not consolidated on the grounds of materiality. Senior managers of the charity form a majority on the Board.

Much of the operational activity of the charity is carried out through branches located in the countries of operation. In line with the requirements of SORP 2019, their results are included within those of the charity 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. The parent charity has also taken advantage of the exemptions in FRS102 from the requirement to present a charity only Cash Flow Statement.

Going Concern

Hope and Homes for Children’s income is secured largely from voluntary income sources together with ongoing support from a number of international donors. Following the disruption to our growth plans in 2018, we have been successfully executing our plan to reduce our annual deficit while maintaining the capacity to deliver our operational objectives. The improvement in our financial resilience is demonstrated

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in our annual accounts, with a significant operational surplus in 2020, strong positive cashflow and debt reduction and restructuring.

The Trustees have considered several factors in concluding that it remains appropriate to adopt the going concern basis in the preparation of these financial statements. These have included:

Considering all of the above, the Trustees believe that Hope and Homes has adequate resources to continue operating successfully for the foreseeable future and so should continue to adopt the going concern basis in preparing the annual report and the financial statements.

Income

Income is recognised in the SOFA when the charity becomes entitled to the income, it is probable that the income will be received, and the amount can be measured reliably.

Grants receivable that do not relate to the performance of a service or the production of charitable goods are classified as voluntary income and those that are performance-related are classified as income from charitable activities. Grants are credited to income in the SOFA, with unspent balances being carried forward to subsequent years within the relevant fund.

Income is deferred only when the charity has to fulfil conditions before becoming entitled to it or where the donor has specified that the income is to be expended in a future period.

Legacy income is included when there is sufficient evidence of entitlement, probable receipt and where the amount is measurable. Pecuniary and residuary legacies notified before the year end, are accrued where it can be demonstrated that the charity had entitlement at the year end, the amounts can be quantified with reasonable certainty and where receipt is probable.

Expenditure

All expenditure is accounted for on an accruals basis. Expenditure on raising funds represents expenditure incurred in attracting funding and the costs of disseminating information about charitable activity. Expenditure on charitable activities includes the direct costs of operating overseas programmes and grants made to third parties. It also includes support costs incurred at the UK office directly in support of the overseas activities.

Allocation of support costs

The majority of costs are directly attributable to specific activities. Certain shared costs, including governance costs, are apportioned to activities based on the proportion of staff time allocated to the activity.

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Pension scheme

The costs of providing defined contribution pensions are charged to the SOFA as they fall due. The difference between contributions payable in the period and those actually paid are shown as accruals in the balance sheet. The costs of the pension scheme are allocated between restricted and unrestricted funds in proportion to the time allocated for work done by members of staff.

Operating leases

Instalments paid under operating lease contracts are charged to the SOFA as incurred.

Exchange rate gains and losses

The results and financial position of subsidiaries (none of which has the currency of a hyper-inflationary economy) that conduct business in a foreign currency are translated into sterling at the rate of exchange ruling at the date of the transaction. The affairs of the subsidiaries are so closely interlinked with those of the parent charity that it is considered that the incoming resources and application of resources may be regarded as being more dependent on sterling than on its own reporting currency. At the balance sheet date, cash and bank balances, amounts receivable and payable and fixed assets are translated by using the rate of exchange ruling at that date. Exchange movements are recorded in the SOFA.

Presentation currency

The functional currency of Hope and Homes for Children and its subsidiaries is considered to be pounds sterling because that is the currency of the primary economic environment in which the charity operates. The consolidated financial statements are also presented in pounds sterling.

Tangible fixed assets and depreciation

Tangible fixed assets above an appropriate local minimum threshold are capitalised at cost and written off by equal annual instalments over their expected useful lives as follows:

Land n/a
Property for functional use 40 years
Homes and services for beneficiaries 10 to 20 years
Improvements to property 10 years
Motor vehicles 4 to 5 years
Office and computer equipment 3 to 5 years

Ownership of homes and services for beneficiaries rests with the charity while the running and management of the activity in the building is the responsibility of the local authority. At an appropriate point the charity and local authority will sign an agreement by which the property will be donated to the local authority for the continued provision of the services.

Vehicles and equipment used in overseas branches and other operating entities are not capitalised but charged in full to the SOFA when purchased.

Assets under development

Assets under development are valued at cost less impairment. When complete, those assets where ownership rests with the charity are transferred to fixed assets and those where ownership is retained by a project stakeholder are expensed to the SOFA.

Stock

Stock is stated at the lower of cost and net realisable value.

Debtors

Other debtors are recognised in the financial statements at the settlement amount. Prepayments are valued at the amount prepaid at the balance sheet date.

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Short-term bank deposits and cash

Short-term bank deposits and cash includes cash in hand, deposits held with banks and other highly liquid short-term deposits.

Creditors

Creditors 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 reliably estimated.

Fund accounting

Restricted funds are funds that can only be used in accordance with specific restrictions imposed by donors or that have been raised by the charity for particular purposes. The costs of administering the restricted funds are charged against the specific fund. The detail of each restricted fund is set out in note 16.

Designated funds are funds that have been set aside by the Trustees out of unrestricted general funds for specific purposes. The aim and use of each designated fund are set out in note 16.

General funds are unrestricted funds that can be used at the discretion of the Trustees to further the charitable objectives.

Financial instruments

Hope and Homes for Children only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their amortised cost.

Significant estimates and judgements

In the application of the charity’s accounting policies, which are described in note 1, Trustees are required to make judgements, estimates, assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. 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 current and future periods.

The annual depreciation charge for the tangible fixed assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on economic utilisation and the physical condition of the assets.

Taxation

Hope and Homes for Children is a registered charity and as such is entitled to tax exemption on all its income and gains, properly applied for its charitable purposes.

VAT

Irrecoverable VAT is charged as a cost against the activity for which the expenditure was incurred.

Gifts in kind

In line with the requirements of SORP 2019, the value of services provided by volunteers is not incorporated in these financial statements.

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2. DONATIONS AND LEGACIES

2020 2019
Unrestricted Restricted Total Unrestricted Restricted Total
£ £ £ £ £ £
Individuals 1,638,409 223,576 1,861,985 859,741 504,430 1,364,171
Corporate donors 1,053,695 2,486,468 3,540,163 718,559 2,771,061 3,489,620
Charitable trusts
and foundations		 365,205 3,949,141 4,314,346 364,350 2,143,004 2,507,354
Community groups 70,363 143,074 213,437 82,664 58,040 140,704
Fundraising
activities 306,314 24,582 330,896 1,555,279 12,586 1,567,865
and events
Legacies 89,688 - 89,688 603,977 - 603,977
Total 3,523,674 6,826,841 10,350,515 4,184,570 5,489,121 9,673,691

3. LEGACY PIPELINE

Legacy notifications worth £104,795 to the charity did not meet the recognition criteria and hence have not been accounted for within these financial statements (2019: £nil).

4. CHARITABLE ACTIVITIES

2020 2019
Unrestricted Restricted Total Unrestricted Restricted Total
£ £ £ £ £ £
FCDO UK Aid Match - 1,189,370 1,189,370 - 779,213 779,213
Federal Ministry of
Labour and Social Policy, - 2,319 2,319 - 13,114 13,114
Bosnia and Herzegovina
Forum MNE, Montenegro - - - - 18,593 18,593
Netherlands Fund for
Regional Partnerships - (1,241) (1,241) - 154 154
(MATRA)
EU POCU Romania - 293,749 293,749 - 561,948 561,948
EIDHR Sudan - 67,582 67,582 - - -
UNICEF Ukraine - 62,724 62,724 - 57,270 57,270
USAID Ukraine - 65,046 65,046 - 33,356 33,356
Total - 1,679,549 1,679,549 - 1,463,648 1,463,648

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Year ended 31 December 2020

5. ANALYSIS OF EXPENDITURE

Other Allocated
Staff direct Grants support
Costs costs payable Costs 2020 2019
£ £ £ £ £ £
Costs of raising funds 1,491,681 477,186 - 163,487 2,132,354 3,185,516
Charitable expenditure
Global advocacy initiatives 138,638 163,239 - 25,067 326,944 414,459
East and Southern Africa
Rwanda and regional activities 522,078 730,030 - 103,970 1,356,078 1,129,856
South Africa 223,692 167,442 - 32,478 423,612 639,419
Sudan 178,724 113,732 - 24,284 316,740 181,981
Uganda 24,713 4,635 388,550 34,701 452,599 340,432
Central and Southern Europe
Bosnia and Herzegovina 121,033 89,645 - 17,494 228,172 276,933
Bulgaria 269,031 155,317 - 35,236 459,584 343,010
Moldova and Transnistria 24,447 4,698 384,382 34,338 447,865 528,488
Romania and regional activities 940,701 1,977,321 - 242,301 3,160,322 3,789,355
Eastern Europe and Central Asia
Ukraine and regional activities 168,458 177,811 - 28,753 375,022 306,272
Latin America and the Caribbean 91 20,312 1,435 1,813 23,651 113,513
South and South East Asia
India 83,121 6,781 143,432 19,375 252,709 322,508
Nepal 67,767 2,801 226,441 24,662 321,671 256,699
Total charitable expenditure 2,762,528 3,613,727 1,144,241 624,472 8,144,967 8,642,926
Total 4,254,209 4,090,913 1,144,241 787,959 10,277,321 11,828,442

Staff costs totalling £486,974 (2020: £449,850) are included in allocated support costs.

6. ANALYSIS OF SUPPORT COSTS

ANALYSIS OF SUPPORT COSTS
2020 2019
£ £
Directorate 152,629 163,317
Governance 59,582 77,331
Facilities management 108,493 134,479
Financial management 247,713 200,449
Information technology 115,956 119,502
Human resources 103,586 95,553
Total 787,959 790,631

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Year ended 31 December 2020

7. GRANTS PAYABLE

Grants payable all relate to grants made to fund projects to implement organisational charitable objectives. They are made to Hope and Homes for Children’s partner agencies as follows:

2020 2019
£ £
Eurochild, Brussels - 17,108
Child’s i Foundation, Uganda 388,550 255,128
Copil Communitate, Familie, Moldova 306,664 371,862
DONCEL 1,435 -
Hope for Children, Transnistria 77,718 72,511
Red Latinoamericana de Acogimiento Familiar, Uruguay - 48,093
Rosie May Foundation, Sri Lanka 3,000 -
Child In Need Institute, India 143,432 164,139
Forget Me Not, Australia 223,441 151,120
Total 1,144,240 1,079,961

8. NET INCOME

Net income is stated after charging:

2020 2019
£ £
Depreciation of fixed assets 347,492 361,286
Donation of Small Group Homes to local authorities 422,979 342,989
Movement on exchange rate 9,919 18,554
Interest payable 28,861 28,861
Property rental 93,531 97,490
Auditor’s remuneration – statutory audit 28,800 28,200
Auditor’s remuneration–other services 2,400 -

9. TRUSTEES REMUNERATION AND RELATED PARTY TRANSACTIONS

The trustees were not remunerated during the current or preceding financial years. Reimbursement of £412 was made to one trustee for directly incurred travel expenses (2019: £548 to one trustee). Aggregate donations received from trustees during the year were £883 (2019: £6,480). No other benefits were awarded to Trustees during the financial year.

There were no related party transactions.

Aggregate transactions with the subsidiary undertakings were:

2020 2019
£ £
Funds remitted to:
Hope and Homes for Children Romania 1,152,119 1,374,638
One Child One Family, HHCSA 305,937 461,007

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Year ended 31 December 2020

10. STAFF COSTS AND NUMBERS

STAFF COSTS AND NUMBERS
2020 2019
£ £
The costs of employing the UK contracted staff were:
Salaries 1,793,028 2,104,591
National insurance 176,906 219,315
Pension scheme 91,556 105,458
2,061,490 2,429,364
The costs of employing overseas staff on local contracts were:
Salaries and local taxes 2,679,657 3,182,399
4,741,147 5,611,763

The average number of contracted staff during the year was:

2020 2019
No. No.
In the UK 51 57
Overseas 160 186
211 243

The total employee remuneration of the Senior Management Team (Key Management Personnel) was £456,704 (2019: £445,599).

For staff paid £60,000 or greater per annum, the number of employees with emoluments in the following ranges were:


es were:
2020 2019
No No
£60,000-£69,999 1 1
£70,000-£79,999 2 -
£80,000-£89,999 1 3
£90,000-£99,999 1 -
£100,000-£109,999 1 2
£110,000-£119,999 - -
£120,000-£129,999 1 -

Hope and Homes for Children paid pension contributions for higher paid employees amounting to £17,166 (2019: £26,397).

Termination payments were made or accrued as compensation for loss of employment totalling £83,467 (2019: £6,500) in accordance with organisational policy and the legal requirements of the countries in which the individuals work. These costs mainly relate to the closure of our programme in Sudan.

11. PENSION SCHEME

For employees based in the UK, the charity contributes up to 6% of members’ salaries towards a defined contribution pension scheme, which is administered on its behalf by Aviva. At the year-end there were outstanding contributions of £nil (2019: £13,308).

For employees based in Belgium, the charity contributes 4% of members’ salaries towards a defined contribution pension scheme, which is administered on its behalf by Allianz. At the year-end there were outstanding contributions of £890 (2019: £nil).

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HOPE AND HOMES FOR CHILDREN

Year ended 31 December 2020

12. TANGIBLE FIXED ASSETS

Improvements Office and
GROUP Land and
Buildings		 to leasehold
Property		 Motor
vehicles		 Computer
Equipment		 Total
£ £ £ £ £
Cost at 1 January 2020 4,625,347 214,726 174,355 262,565 5,276,993
Additions 502 - 857 52,071 53,430
Disposals (132,420) - - (6,909) (139,329)
Foreign exchange movement 169,184 - 6,643 (82) 175,745
Cost at 31 December 2020 4,662,613 214,726 181,855 307,645 5,366,839
Depreciation at 1 January 2020 1,723,521 214,726 154,749 203,175 2,296,171
Charge for the year 290,601 - 14,075 42,817 347,493
Disposals (52,055) - - 135 (51,920)
Foreign exchange movement 62,777 - 5,968 829 69,574
Depreciation at 31 December 2,024,844 214,726 174,792 246,956 2,661,318
2020
Net book value
At 31 December 2020 2,637,769 - 7,063 60,689 2,705,521
At 31 December 2019 2,901,825 - 19,606 59,390 2,980,821
Improvements Office and
CHARITY Land and
Buildings		 to leasehold
Property		 Motor
vehicles		 Computer
Equipment		 Total
£ £ £ £ £
Cost at 1 January 2020 59,813 214,726 - 187,499 462,037
Additions - - - 15,407 15,407
Disposals - - - (5,004) (5,004)
Cost at 31 December 2020 59,813 214,726 - 197,902 472,441
Depreciation at 1 January 2020 59,813 214,726 - 154,758 429,296
Charge for the year - - - 21,792 21,792
Disposals - - - (5,004) (5,004)
Depreciation at 31 December 59,813 214,726 - 171,546 446,085
2020
Net book value
At 31 December 2020 - - - 26,356 26,356
At 31 December 2019 - - - 32,741 32,741

The freehold property represents a portfolio of buildings acquired or built as part of deinstitutionalisation projects in Romania and Bosnia and Herzegovina. The portfolio comprises 52 properties (2019: 54 properties) which are used as small group homes, day centres, emergency reception centres and as a training centre.

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Year ended 31 December 2020

13. DEBTORS AND PREPAYMENTS

DEBTORS AND PREPAYMENTS
Group Group Charity Charity
2020 2019 2020 2019
£ £ £ £
Other debtors and accrued income 512,585 1,396,906 368,195 1,117,553
Tax recoverable 31,422 48,574 31,422 48,574
Prepayments 33,218 103,070 30,431 92,760
577,225 1,548,550 430,048 1,258,887

14. CASH AND CASH EQUIVALENTS

Group Group Charity Charity
2020 2019 2020 2019
£ £ £ £
Cash in hand:
Held in the UK 2,220,546 862,446 2,220,546 862,446
Held overseas 498,340 459,167 188,098 139,324
2,718,886 1,321,613 2,408,644 1,001,770

15. a) CREDITORS: Amounts falling due within one year

Group Group Charity Charity
2020 2019 2020 2019
£ £ £ £
Trade creditors 86,627 250,734 57,795 125,286
Other creditors 95,121 118,081 73,780 19,933
Grants payable 61,042 137,979 61,042 137,979
Interest payable 12,098 12,098 12,098 12,098
Taxation and social security costs 82,450 147,911 65,341 105,136
Deferred income 30,933 - 5,053 -
Accruals 63,635 57,250 63,635 57,250
Provisions 40,743 - 40,743 -
Loan 72,154 700,000 72,154 700,000
544,803 1,424,053 451,641 1,157,682

Deferred income relates to portions of grants made for charitable activities which will be recognised in future periods when the cost is incurred for the charitable activities for which these grants were made.

15. b) CREDITORS: Amounts falling due after more than one year

Group Group Charity Charity
2020 2019 2020 2019
£ £ £ £
Loan 1,370,917 1,443,071 1,370,917 1,443,071

Of this loan balance, there are loan repayments of £505,075 payable in 1-5 years, with the remaining balance due in 6-10 years.

36

HOPE AND HOMES FOR CHILDREN

Year ended 31 December 2020

16. GROUP FUNDS

a)Current year Balance at 1 Other
recognised		 Balance at 31
December
January 2020 Income Expenditure Transfers gains/losses 2020
£ £ £ £ £ £
Restricted funds
Overseas property fund 2,901,826 - (370,965) 502 106,409 2,637,772
Rwanda 121,875 883,677 (766,472) - - 239,080
Rwanda: funded by FCDO* - 1,189,370 (1,189,370) - - -
South Africa - 363,766 (333,766) 9,943 (9,943) 30,000
Sudan - 68,994 (68,994) - - -
Bosnia and Herzegovina 350,365 166,987 (274,924) - - 242,428
Bulgaria 78,590 441,330 (469,906) - - 50,014
Moldova and Transnistria 127,585 425,145 (308,642) - - 244,088
Romania 56,375 3,755,032 (1,638,963) (1,239,577) (9,389) 923,478
Latin America - 128,436 (128,436) - - -
India 54,965 346,687 (262,858) - - 138,794
Nepal - 565,808 (342,126) - - 223,682
Global Advocacy - 248,650 (248,650) - - -
Sub-total 3,691,581 8,583,882 (6,404,072) (1,229,132) 87,077 4,729,336
Unrestricted fund
Designated funds
Fixed assets fund 78,996 - - (11,008) (237) 67,751
General fund 804,397 3,562,917 (3,873,249) 1,240,140 62,296 1,796,500
Sub-total 883,393 3,562,917 (3,873,249) 1,229,132 62,059 1,864,251
Total funds 4,574,974 12,146,799 (10,277,321) - 149,136 6,593,587
b) Previous Year Other Balance at 31
Balance at 1 recognised December
January 2019 Income Expenditure Transfers gains/losses 2019
£ £ £ £ £ £
Restricted funds
Overseas property fund 3,416,072 - - (261,160) (253,086) 2,901,826
Rwanda - 477,056 (355,181) - - 121,875
Rwanda: funded by FCDO - 779,214 (779,214) - - -
South Africa - 273,105 (273,105) 10,820 (10,820) -
Sudan - 75,368 (75,368) - - -
Bosnia and Herzegovina 460,540 381,825 (492,000) - - 350,365
Bulgaria 173,570 306,852 (401,832) - - 78,590
Moldova and Transnistria - 438,256 (310,671) - - 127,585
Romania 102,705 3,235,708 (3,282,038) 123,541 (123,541) 56,375
Ukraine - 91,434 (91,434) - - -
India 54,965 242,011 (242,011) - - 54,965
Nepal 361,695 (361,695) - - -
Global Advocacy - 305,082 (305,082) - - -
Sub-total 4,207,852 6,967,606 (6,969,631) (126,799) (387,447) 3,691,581
Unrestricted fund
Designated funds
Fixed assets fund 112,509 - - (33,513) - 78,996
General fund 1,304,863 4,198,033 (4,858,811) 160,312 - 804,397
Sub-total 1,417,372 4,198,033 (4,858,811) 126,799 - 883,393
Total funds 5,625,224 11,165,639 (11,828,442) - (387,447) 4,574,974

37

HOPE AND HOMES FOR CHILDREN

Year ended 31 December 2020

*This project is funded by the Foreign and Commonwealth Development Office under the UK Aid Match programme. The award was made for work transforming children’s lives by creating a pathway for family and community living for children in institutional care in Rwanda and Uganda. The expenditure recorded in the table above for this project has been incurred in accordance with the terms of the grant.

Restricted funds

All restricted funds are for work on specific projects or for work in particular countries. Where funds are received for these purposes, they are shown as restricted income on the Statement of Financial Activities. Expenditure for the purposes specified is applied against the income and any amounts unexpended at the balance sheet date are shown within restricted funds along with the net book value of fixed assets acquired with restricted funds and any cash or debtors relating to restricted funds.

The Overseas Property Fund represents the net book value of fixed assets acquired with restricted funds where the donor agreements require that the assets remain restricted. The transfer of £502 from the general fund represents the release or increase in those restricted funds through acquisition of assets. Other recognised gains of £106,409 in this fund represent the impact of exchange rate movements.

Designated funds

The fixed asset fund represents the net book value of unrestricted fixed assets. The transfer of £11,008 to the general fund represents the net impact of the acquisition of unrestricted fixed assets and depreciation charges. Other recognised losses of £237 in this fund represent the impact of exchange rate movements.

Unrestricted funds

The general fund represents free funds of the charity which are not designated and can be used at the discretion of the trustees to further the charitable objects. Expenditure on assets under development has been transferred to the general fund from the Romania restricted fund, together with the impact of exchange rate movements on the carrying value of these assets.

17. ANALYSIS OF NET ASSETS BETWEEN FUNDS

Unrestricted Restricted Unrestricted Restricted
GROUP funds funds TOTAL funds funds TOTAL
2020 2020 2020 2019 2019 2019
£ £ £ £ £ £
Tangible fixed assets 67,749 2,637,772 2,705,521 78,996 2,901,825 2,980,821
Current assets 3,552,966 2,250,820 5,803,786 3,671,521 789,756 4,461,277
Current liabilities (385,547) (159,256) (544,803) (1,424,053) - (1,424,053)
Long term liabilities (1,370,917) - (1,370,917) (1,443,071) - (1,443,071)
1,864,251 4,729,336 6,593,587 883,393 3,691,581 4,574,974
Unrestricted Restricted Unrestricted Restricted
CHARITY funds funds TOTAL funds funds TOTAL
2020 2020 2020 2019 2019 2019
£ £ £ £ £ £
Tangible fixed assets 26,356 - 26,356 32,741 - 32,741
Current assets 1,167,507 1,671,185 2,838,692 1,527,277 733,380 2,260,657
Current liabilities (385,547) (66,094) (451,641) (1,157,682) - (1,157,682)
Long term liabilities (1,370,917) - (1,370,917) (1,443,071) - (1,443,071)
(562,601) 1,605,091 1,042,490 (1,040,735) 733,380 (307,355)

38

HOPE AND HOMES FOR CHILDREN

Year ended 31 December 2020

18. LEASE COMMITMENTS

The total commitments under non-cancellable leases on buildings are as follows:

Group Group Charity Charity
2020 2019 2020 2019
£ £ £ £
Expiry date:
Within one year 13,788 30,124 4,335 17,340
One to five years 7,507 4,335 - 4,335
After five years - - - -

19. FINANCIAL INSTRUMENTS

Financial assets that are debt instruments measured at amortised cost:

Group Group Charity Charity
2020 2019 2020 2019
£ £ £ £
Other debtors 512,585 1,396,906 368,194 1,117,553
Short term bank deposits and cash resources 2,718,886 1,321,613 2,408,644 1,001,770

Financial liabilities measured at amortised cost:

Group Group Charity Charity
2020 2019 2020 2019
£ £ £ £
Trade creditors 86,627 250,734 57,795 125,286
Other creditors 95,121 118,081 73,780 19,933
Grants payable 61,042 137,979 61,042 137,979
Interest payable 12,098 12,098 12,098 12,098
Accruals 63,635 57,250 63,635 57,250
Loans 1,443,071 2,143,071 1,443,071 2,143,071

20. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT

2020 2019
£ £
Reconciliation of net income to net cash flow from operating
activities
Net income/(expenditure) 1,869,478 (662,804)
Depreciation charge 347,493 361,286
Loss on disposal of fixed assets 7,044 -
Donation of Family-Type Homes to Local Authorities 422,977 342,989
Loss on disposal of overseas properties 80,364 58,627
Interest receivable (1,461) (2,810)
Interest payable 28,861 28,861
(Increase)/decrease in stock (28,278) 42,884
Decrease/(Increase) in debtors 971,325 (599,605)
(Decrease)/Increase in creditors (251,403) 158,962
Net cash supplied by/(used in) operating activities 3,446,400 (271,610)

39

HOPE AND HOMES FOR CHILDREN

Year ended 31 December 2020

21. ANALYSIS OF CHANGES IN NET DEBT

Change in
At 1 loan value Foreign At 31
January Cash due in one Exchange December
2020 Flows year Movement 2020
£ £ £ £ £
Cash 1,321,613 1,416,582 - (19,309) 2,718,886
Loans falling due within one year (700,000) 700,000 (72,154) - (72,154)
Loans falling due after more (1,443,071) - 72,154 - (1,370,917)
thanone year
Total Net Debt (821,458) 2,116,582 - (19,309) 1,275,815

22. SUBSIDIARY UNDERTAKINGS

Hope and Homes for Children – Romania, Hope and Homes for Children – South Africa and One Child One Family HHCSA are wholly owned subsidiary undertakings of Hope and Homes for Children. They are registered in Romania (No: 1/23.01.2001 13661594) and South Africa (No: 2008/005926/08 and 2017/489514/08) and do not have share capital. Their governing board members are senior officers of Hope and Homes for Children and each share the same activities as Hope and Homes for Children.

Hope and Homes for Children – South Africa is dormant and therefore exempt from consolidation under section 394a of the Companies Act 2006.

Summary of the results of Hope and Homes for Children – Romania:

2020 2019
£ £
Assets 5,570,494 5,037,039
Liabilities (93,162) (185,403)
Funds 5,477,332 4,851,636
Income 3,596,893 4,037,551
Expenditure (2,971,197) (4,048,247)
Surplus/(Deficit) 625,696 (10,696)

Summary of the results of One Child One Family HHCSA:

2020 2019
£ £
Assets 73,766 58,133
Liabilities - -
Funds 73,766 58,133
Income 376,838 533,333
Expenditure (361,205) (512,274)
Surplus/(Deficit) 15,633 21,059

40

Year ended 31 December 2020

HOPE AND HOMES FOR CHILDREN

22. CAPITAL COMMITMENTS
Group Group Charity Charity
2020 2019 2020 2019
£ £ £ £
Homes and services for beneficiaries 460,033 428,854 - -
23. POST BALANCE SHEET EVENTS

The Trustees and management team continue to actively manage the impact of COVID-19 as detailed in the Trustees’ Report and the Going Concern statement in Note 1. There have been no material changes in activity since the balance sheet date.

41