2020-12-31-accounts - Malawi Community Hubs

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Malawi Community Hubs

Financial Statements and Trustees’ Report

For the year ended 31 December 2020

Registered Charity in England and Wales number 1170895

Malawi Community Hubs

Contents
Reference and Administration information	3
Trustees’ report	4
Statement of trustees’ responsibilities	10
Independent examiner’s report	11
Statement of financial activities	12
Balance sheet	13
Notes to the financial statements	14

Malawi Community Hubs

Reference and Administrative Details of Malawi Community Hubs

Trustees

Michelle Burrow Robert Kennedy Derek Stapley

Contact Address

Michelle Burrow Flat 3 21 Popham Street London N1 8QW

Malawi Community Hubs

Registered Charity in England and Wales Number 1170895 Trustees’ report For the year ended 31 December 2020

The trustees present their report and the financial statements of Malawi Community Hubs (“the Charity”) for the year ended 31 December 2020. The financial statements have been prepared in accordance with the accounting policies set out in Note 2 to the financial statements and comply with the Charity’s Trust Deed, the Charities Act 2011 and the Standard of Recommended Practice: Accounting and Reporting by Charities published in 2016.

Objectives and Activities

The object of the Charity is the relief of poverty in rural areas of Malawi by providing or assisting in the provision of education, training, healthcare projects and all the necessary support designed to enable individuals to generate a sustainable income and be self-sufficient.

To date the Charity has pursued its objects by raising funds and deploying these in partnership with charitable organisations operating in Malawi to build community hubs in Chitowo (in the Dedza region of Malawi) and Majawa (in the central region of Malawi).

Public benefit

The charity is a public benefit entity and the trustees have paid due regard to the public benefit guidance published by the Charities Commission.

Background

Michelle Burrow and Derek Stapley, trustees and founders of Malawi Community Hubs, have each travelled extensively in Africa over the past few decades and have worked on volunteer projects in several countries.

While serving as volunteers on a Wildlife Conservation Project in Malawi they joined a small group of fellow volunteers and project leaders to look at ways in which they could be of help to the people of Malawi in the longer term.

Those early discussions and observations brought to light the fact that there is huge potential to leverage the work of existing Non-Governmental Organisations (“NGOs”) which are operating in Malawi, to make every donation achieve more and through concentrated effort increase the likelihood of community self-sustainability; and so the idea of Malawi Community Hubs was born.

Extensive information and knowledge gathering followed in order to help plan the first project. This involved meeting with people from a broad spectrum of global businesses, the Non-profit and International Development sectors, along with individuals working or volunteering in a wide range of charitable or philanthropic endeavours. The overwhelming feedback received was the desire by all to have better co-ordination and collaboration, as well as a means to share and distribute knowledge. A three-week onsite due diligence trip to Malawi in late 2015 cemented the concept of providing long term integrated solutions through the creation of Community Hubs.

Malawi Community Hubs

Structure, Governance and Management

Governing Document

The Charity is governed by a Constitution Document dated 20 August 2016 and is a Charitable Incorporated Organisation (“CIO”) registered by the Charity Commission on 22 December 2016 with registration number 1170895.

Organisation

The Constitution Document specifies that there must be at least 3 trustees. If the number falls below this minimum, the remaining trustee or trustees may act only to call a meeting of the charity trustees, or appoint a new trustee or trustees.

Decisions are taken by the trustees either at periodic meetings or by resolution in writing or electronic form. No decision shall be taken at a meeting unless a quorum of at least 2 trustees is present. In the case of an equality of votes, the person who chairs the meeting shall have a second or casting vote.

Under the terms of the Constitution Document, if the CIO is wound up, the members of the CIO have no liability to contribute to its assets and no personal responsibility for settling its debts and liabilities.

Appointment of trustees

The trustees who have served during the period are set out on page 3.

All trustees give of their time freely and no trustee may receive any remuneration or other benefit in money or money’s worth from the Charity.

On appointment, all new trustees receive information as appropriate to ensure that they are familiar with all aspects of the Charity including its finances, future plans and objectives.

Risk management

The trustees have, within the period under review, assessed the risks that the charity faces and have considered appropriate methods to mitigate those risks. The trustees will continue to monitor and re-consider the risks to which the charity is exposed during the coming year.

Reserves policy

The Charity aims to work with partner charities and organisations to establish projects in Malawi which are intended to be self-sustaining in the long term. On this basis, the work of the Charity does not entail ongoing funding obligations. The trustees are therefore comfortable that the level of reserves held is adequate and these will be deployed in future on further projects as and when the trustees decide.

Achievements and Performance

MCH’s purpose is to relieve poverty in rural areas of Malawi by assisting with the provision of education, training, healthcare projects and a support-system to enable individuals to generate income leading to the community becoming self-sustaining and more resilient to changes in its environment. To achieve its purpose, the trustees are developing a network of specialists who collaborate with each other to create sustainable community hubs. This network includes

Malawi Community Hubs

donors, NGOs, the Department of Education in Malawi, International Development experts and entrepreneurial businesses.

To begin the work of creating a hub, in-depth discussions take place with a local community to obtain an understanding of that community’s specific issues and challenges. These discussions are facilitated by local Malawian NGOs and are supplemented with input from governmental departments and business partners, resulting in a series of proposed solutions that the community believe in and will commit to implementing. The next step is to address the support that the community needs to achieve this, and appropriate partners are bought in. All solutions have to involve the community and be ones they feel they own and can maintain in the future.

Chitowo

Work on the first hub in Chitowo (Dedza region of Malawi) started in late 2016, in conjunction with the first two partners, United Purpose (“UP”) and Classrooms for Malawi (“CfM”), with additional support provided by a solar panel expert, TeamPlanet.

The identified need in Chitowo resulted in the development of the following:

Four classrooms and a Head teacher’s office
Four quad latrine blocks (16 latrines in total)
Rainwater capture system and storage tank for hand washing
Modular and moveable solar panelling (for lighting classrooms, after-sundown activities and as a source of income generation)
Education programmes: health, nutrition, sanitation, gender campaigns and drinking water education
Establishment of committees: school management, Parent Teacher Association, mothers’ groups, school sanitation clubs and a water committee

The official handover of the hub by the Malawi NGOs to the local community took place in October 2017. Derek Stapley and Michelle Burrow attended the handover to represent Malawi Community Hubs. This completed Phase One of the project.

The trustees are continuing to assess the impact of Phase One of the project while also addressing the potential to commence Phase Two in the future. Regular updates about the Chitowo community are provided to the trustees by a consultant who is on contract with CfM, as explained below.

Majawa

Following a significant period of research, plans were established for a second community hub, in Majawa in the central region of Malawi. This involved several trustee trips to Malawi, including to Majawa, and extensive consultation with potential NGO partners. Following the successful signing of two separate Memorandums of Understanding the project commenced in July 2019.

Majawa is a very remote village often further isolated by flooding during the three to fourmonth rainy season restricting access to schools, health clinics and markets. With scarce water resources, limited crop diversity, malnutrition, high illiteracy and few income generation opportunities the community is looking for change and is enthusiastic about working with MCH and its partners.

Malawi Community Hubs

We are partnering and jointly funding this project with African Parks, a conservation focused NGO which manages wildlife reserves across Africa, including Liwonde, the National Park adjacent to Majawa. Following a year of research and discussions with the local community and using the UN Millennium Development Goals as a guide, African Parks (“AP”) produced a comprehensive report on the challenges and aspirations of the people of Majawa which outlined the following priorities:

school build including solar power, sanitation and hand washing facilities;
educational programs on health, nutrition, sanitation, female hygiene and gender equality;
work groups to promote and foster engagement of youth and elders;
completion of the fencing around the wildlife reserve to reduce animal/human conflict;
• sourcing safe water options, possibly through boreholes, for drinking and crop irrigation; and
collaborate on income generating opportunities and vocational training.

We are also partnering with Youth for Development & Productivity (“YODEP”) who, at MCH’s request, performed a detailed Needs Assessment that included gathering much direct feedback from the communities and which greatly enhanced the initial findings of AP. The needs are considered significant, wide ranging and in many cases of an urgent nature. Funding has been successfully obtained for Phase One of the project (school build, set up of relevant committees, and basic training of core interventions such as illiteracy, early marriage, sanitation etc). There is tremendous community buy-in to the project with considerable offers of involvement in a variety of different ways.

During 2019 MCH engaged the services of a well-respected Malawian, Mr. Dezie Trigu. Mr Trigu is a retired Schools Inspector with significant experience of working in the NGO sector, primarily overseeing the building of new schools. Mr. Trigu has responsibility for overseeing the development of the school building in Majawa, plus he works closely with our partner organisations and the local community, providing MCH with a valuable, independent perspective on many aspects of our collaborative efforts.

Significant further work on the Majawa hub was undertaken in 2020 including the construction of a classroom block which was completed by December 2020. This was marked by a handover ceremony in December 2020 involving the local community, the Ministry of Education, Science, and Technology (MoEST), the Malawi Development Corporation (MDC) and project partners YODEP and AP.

Financial Review

As a result of the commencement of the Majawa project, 2020 was an active period from a financial perspective. The main costs incurred during the year related to community programmes conducted by YODEP at a cost of £154,318 and £81,651 incurred in relation to the building of a classroom block and associated facilities.

All costs of trustee travels and out of pocket expenses for the research trips to Malawi were borne personally by the trustees.

During the year ended 31 December 2020 the Charity received donation income of £248,339 (2019: £94,913) from individuals and corporate entities.

During the year costs of £238,960 (2019: £14,329) were incurred. This resulted in a surplus of £9,548 (2019: £80,646) of income over expenditure.

Malawi Community Hubs

At 31 December 2020, the Charity had net assets of £114,166 (2019: £104,618). There was no restriction in relation to the future use of these funds.

MCH’s primary donor is a privately-owned family group, for which Derek Stapley serves as one of several independent directors and also as chairman.

Impact of Covid 19

The trustees have considered potential impacts of Covid 19 which increase the level of uncertainty about the future financial position of the Charity. The most significant risk is thought to be the impact of economic conditions on the level of future funding from donors.

The trustees are satisfied that the additional funding is available to fund planned activities, especially in view of donations pledged and received in 2021 of $350,000 from the March Group of Companies.

The Charity Governance code

The trustees have considered the principles of the Charity Governance Code and applied these to the operation of the charity as follows:

1. Organisational purpose

The trustees are clear about the Charity’s aims which are described in the object and activities section above and ensure that these are being delivered effectively and sustainably.

2. Leadership

The Charity is led by the trustees who provide strategic leadership in line with the Charity’s aims and values.

3. Integrity

The trustees act with integrity, adopting values and creating a culture which helps to achieve the organisation’s charitable purposes. The trustees are aware of the importance of the public’s confidence and trust in charities, and the trustees undertake their duties accordingly.

4. Decision-making, risk and control

The trustees make sure that their decision-making processes are informed, rigorous and timely and that effective control and risk assessment and management systems are set up and monitored.

5. Trustee effectiveness

The trustees work as an effective team, using the appropriate balance of skills, experience, backgrounds and knowledge to make informed decisions.

6. Diversity

The trustees are committed to embracing diversity to support the effectiveness, leadership and decision-making within the Charity.

Malawi Community Hubs

Openness and accountability

The trustees manage the organisation in a transparent and accountable way.

Future Plans

As noted above, the Charity will continue to raise funds and continue to work on the second hub in Majawa. The trustees expect to be working in Majawa for several years alongside the community and the partner organisations. The continuance of the work will depend on future funding and the trustees ensure that they do not over-commit what the Charity is able to deliver in Majawa. The trustees are also exploring potential ways to improve access to healthcare facilities in the Majawa area.

Malawi Community Hubs

Statement of trustees’ responsibilities in respect of the trustees’ annual report and the financial statements

Under charity law, the trustees are responsible for preparing the Trustees’ Annual Report and the financial statement for each financial period which show a true and fair view of the state of affairs of the charity and of the excess of income over expenditure for that period.

In preparing these financial statements, generally accepted accounting practice entails that the trustees:

select suitable accounting policies and then apply them correctly;
make judgements and estimates that are reasonable and prudent;
state whether the recommendations of the Statement of Recommended Practice have been followed, subject to any material departures disclosed and explained in the financial statements;
state whether the financial statements comply with the trust deed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue its activities.

The trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the constitution document. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Each person who is a trustee at the date of this report confirms that:

so far as the trustee is aware, there is no relevant information of which the independent examiner is unaware; and
the trustee has taken all the steps that they ought to have taken as a trustee in order to make them self aware of, and to establish that the charity’s independent examiner is aware of, any relevant information.

Approved by the trustees and signed on their behalf by:

Derek Stapley Trustee

22nd October 2021

Malawi Community Hubs

Independent examiner's report to the trustees of Malawi Community Hubs For the year ended 31 December 2020

Respective responsibilities of trustees and examiner

The charity's trustees are responsible for the preparation of the accounts. The charity’s trustees consider that an audit is not required for this period under section 144 of the Charities Act 2011 (“the Charities Act”) and that an independent examination is needed.

It is my responsibility to:

examine the accounts under section 145 of the Charities Act,
to follow the procedures laid down in the general Directions given by the Charity Commission under section 145(5)(b) of the Charities Act, and
to state whether particular matters have come to my attention.

Basis of independent examiner’s statement

My examination was carried out in accordance with general Directions given by the Charity Commission. An examination includes a review of the accounting records kept by the charity and a comparison of the accounts presented with those records. It also includes consideration of any unusual items or disclosures in the accounts, and seeking explanations from the trustees concerning any such matters. The procedures undertaken do not provide all the evidence that would be required in an audit, and consequently no opinion is given as to whether the accounts present a ‘true and fair’ view and the report is limited to those matters set out in the statement below.

Independent examiner's statement

In connection with my examination no material matters have come to my attention which gives me cause to believe that in any material respect:

the accounting records were not kept in accordance with section 130 of the Charities Act; or
the accounts did not accord with the accounting records; or
the accounts did not comply with the applicable requirements concerning the form and content of accounts set out in the Charities (Accounts and Reports) Regulations 2008 other than any requirement that the accounts give a ‘true and fair’ view which is not a matter considered as part of an independent examination.

I have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached.

Kate Parker, ACMA

Little Netherhall Princel Lane Dedham CO7 6HE 22[nd] October 2021

Malawi Community Hubs

Statement of financial activities for the year ended 31 December 2020

Income Donation income Interest income Total incoming resources Expenditure Charitable activities Total expenditure Net income Fund balance brought forward Fund balance carried forward	Note 4, 8 4 5	Unrestricted funds 2020 £ 248,339 169 248,508 238,960 238,960 9,548 104,618 114,166	Unrestricted funds 2020 £ 248,339 169 248,508 238,960 238,960 9,548 104,618 114,166	Unrestricted funds 2019 £ 94,913 62 94,975 14,329 14,329 80,646 23,972 104,618

All operations are continuing and all funds were unrestricted.

Malawi Community Hubs

Balance sheet as at 31 December 2020

Fixed assets Motor vehicle Current assets Cash at bank Prepaid expenses Total current assets Creditors: amounts falling due within 1 year Net current assets Net assets The funds of the charity Unrestricted funds Total charity funds	Note 6 7,8	2020 £ 16,842 134,311 10,019 144,330 47,006 97,324 114,166 114,166 114,166	2019 £ - 144,612 - 144,612 39,994 104,618 104,618 104,618 104,618

Approved by the trustees on 22[nd] October 2021 and signed on their behalf by:

Derek Stapley Trustee

Malawi Community Hubs

Notes to the financial statements

1. Basis of preparation

1.1. Basis of accounting

The financial statements have been prepared under the historical cost convention with items recognised at cost or transaction value.

These financial statements have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued on 16 July 2014 and with the Charities Act 2011.

The charity constitutes a public benefit entity as defined by FRS 102.

1.2 Going concern

The financial statements are prepared on a going concern basis. The trustees believe the going concern assumption to be appropriate as the trustees have sufficient unrestricted funds available for the ongoing use and continuing benefit of the charity and its object.

The going concern assessment prepared by the trustees has taken into consideration potential impacts of Covid-19 on the Charity. The Trustees are satisfied that the level of reserves held and additional funds raised in 2021 are sufficient to mitigate the related risks and have concluded that there are no material uncertainties that could cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the going concern period”).

2. Accounting policies

2.1 Income

Recognition of income

Donation income is recognised in the Statement of Financial Activities (“SoFA”) when

The charity becomes entitled to it;
The trustees are reasonably certain they will receive it; and
The trustees are reasonably certain that the value can be reliably measured.

Interest income is accounted for in the year which the charity is entitled to receipt.

2.2 Offsetting

There has been no offsetting of assets and liabilities or income and expenses.

Malawi Community Hubs

2. Accounting policies (continued)

2.3 Fixed assets

Motor vehicle fixed assets are recorded at historical cost, less accumulated depreciation and any impairment in value.

Depreciation is calculated to write-off the cost over the estimated useful economic life of 10 years on a straight-line basis.

The assets’ residual values, useful lives and depreciation methods are reviewed and adjusted if appropriate to each statement of financial position date.

An item of property, plant or equipment is derecognised on disposal or when no future economic benefits are expected to arise from the continued use of the asset.

Gains and losses on the disposal of property, plant and equipment are determined by comparing proceeds with the carrying amount of the asset and are included in the statement of financial activities.

2.4 Current assets

Debtors

Debtors (including donations receivable) are measured on initial recognition at settlement amount. Subsequently they are measured at the cash or other consideration amount expected to be received.

Prepayments are valued as the amount prepaid where the related service has not yet been provided.

Cash at bank

Cash balances are recorded at fair value.

Prepaid expenses

2.5 Expenditure and liabilities

Liability recognition

Liabilities are recognised when it is more likely than not that there is a legal or constructive obligation committing the charity to pay out resources and the amount of the obligation can be measured with reasonable certainty.

Governance and support costs

All governance activities are performed by the trustees on a voluntary basis at no cost to the charity.

Malawi Community Hubs

2. Accounting policies (continued)

Grants with performance conditions

Where the charity gives a grant with conditions for its payment being a specific level of service or output to be provide, such grants are only recognised in the SoFA once the recipient of the grant has provided the specified service or output.

Grants payable without performance conditions

Where there are no conditions attaching to the grant a liability for the full funding obligation is recognised when a commitment is made.

Creditors

Amounts payable to creditors are measured at settlement amounts.

Provisions for liabilities

A liability is measured on recognition at its historical cost and then subsequently measured at the best estimate of the amount required to settle the obligation at the reporting date.

3. Taxation

The Charity is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charity for UK income tax purposes. Accordingly, the charity is potentially exempt from taxation in respect of income or capital gains received with categories covered by Part 10 Income Tax Act 2007 or Section 356 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.

4. Analysis of income

Donation income Interest income	2020 £ 248,339 169 248,508	2019 £ 94,913 62 94,975

Donation income included donations from individuals and corporate entities.

The charity did not incur any costs in relation to fundraising.

5. Charitable activities

Payments to Youth Development and Productivity Classroom construction costs Consultant’s fees Depreciation charge	2020 £ 154,318 81,651 2,849 142 238,960	2019 £ 14,329 - - - 14,329

Malawi Community Hubs

5. Charitable activities (continued)

No charge is made for the trustees’ services nor are the trustees reimbursed by the Charity for any costs they may incur.

The Charity does not employ any staff and no staff costs were incurred in the period.

No charge has been made for the independent examination of the charity’s accounts.

6. Fixed assets

Cost Balance at 31 December 2019 Additions during year Balance at 31 December 2020 Accumulated depreciation Balance at 31 December 2019 Additions during year Balance at 31 December 2020 Net book value At 31 December 2019 At 31 December 2020	£ - 16,984 16,984 £ - 142 142 - 16,842

7. Creditors (amounts falling due within 1 year)

Loan from Derek Stapley Classroom construction costs payable	2020 £ 39,994 7,012 47,006	2019 £ 39,994 - 39,994

8. Related party transactions

During the period ended 31 December 2019, Derek Stapley loaned a total of £39,994 to the charity to help fund short term cash flow requirements. This has been reported within creditors due within 1 year, but a repayment date has not yet been agreed.

Donation income included £229,665 (2019: 78,610) from a privately-owned family group for which Derek Stapley serves as one of several independent directors and also as chairman. Appropriate declarations of interest have been made within the family group and in MCH.

9. Subsequent events

In early 2021 to the charity received a donation of $350,000 from the family group.