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2020-09-30-accounts

Charity Number: 1174898 Company Number: 7284602

The John Smith Trust

Annual Report and Accounts

For the year ended 30 September 2020

The John Smith Trust

Reference and administrative details

Trustees The Rt Hon. Lord Alderdice David Charters Stephen Gethins MP Alex Just Craig Oliphant Baroness Smith of Gilmorehill The Hon. Catherine Smith Senior management Maija Paasiaro, Director Company number 06648679 Charity number 1126222 Bankers Triodos Bank Deanery Road Bristol BS1 5AS Registered office 22 Bramshill Gardens London NW5 1JH Independent examiner Narges Cyroos Sterling Partners Limited 2nd Floor, Grove House 774-780 Wilmslow Road Manchester M20 2DR

1

The John Smith Trust

Trustees’ report for the year ended 30 September 2020

The trustees are pleased to present their annual report together with the financial statements of the charity for the year ended 30 September 2020.

The accounts have been prepared in accordance with the accounting policies set out in note 1 to the accounts and comply with the Charity’s Memorandum and Articles of Association, the Companies Act 2006 and the Statement of Recommended Practice ‘Accounting and Reporting by Charities’ (revised 2015).

Structure, Governance and Management

Governing Document

The John Smith Trust is a charitable company limited by guarantee, incorporated on 15 June 2010 and registered as a charity on 29 September 2019. The company is governed by its Memorandum and Articles of Association.

Organisational Structure

The directors of the charitable company are its trustees for the purpose of charity law and the members of the company limited by guarantee. Throughout this report they are collectively referred to as the trustees.

The following individuals served as trustees during the year:

The Rt Hon. Lord Alderdice David Charters Stephen Gethins MP Baroness Smith of Gilmorehill The Hon. Catherine Smith Alex Just (appointed October 2019) Craig Oliphant

All trustees served for the full period unless otherwise stated above.

No trustees had any beneficial interest in the charity and no remuneration of trustees is paid by the charity.

The Board of Trustees is responsible for the strategic direction, policy and overall governance of the charity.

The implementation of strategy once agreed and the day to day running and management of the charity’s activities is delegated to the secretariat, led by the Director.

This is the third period of trading for the charitable company, which started trading on 24 October 2016. Prior to this, the Trust’s fellowship programmes were delivered through an unincorporated charitable trust (The John Smith Trust constituted as a charitable trust under English law on 27 August 1996 and registered with the Charity Commission as charity number 1057885). After a period of in-activity the Trustees decided to re-constitute the charity's governance arrangements incorporating as a charitable company limited by guarantee. The directors of the charitable company were also the Trustees of the pre-existing charitable trust, until that trust was formally dissolved on 20 February 2019.

Objectives and principal activities

The Trust works to advance the education of the public in political sciences, in particular in relation to democratic systems of government and the rule of law.

In furtherance of its charitable objectives, the Trust carries out a range of activities which are summarised below.

Activities and Achievements

The Trust seeks to promote good governance, social justice and the rule of law by nurturing ‘emerging’ leaders (drawn from public, private and not-for-profit sectors) committed to making a positive contribution to their countries and societies.

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The John Smith Trust

Trustees’ report for the year ended 30 September 2020

Through its fellowship programmes the Trust has developed a highly successful model for building leadership capacity and a network where good governance and public service are key values. Candidates are only selected if they have demonstrated that they have the ability or are in positions where there is the potential for them to effect change through the implementation of year-long action plans/projects. This is assessed by examining the type of organisation within which they work (and its commitment to the public good), their ability to influence change within that organisation or across society more broadly and their openness to reflect on new ideas and benefit from the fellowship.

The traditional John Smith fellowship involves a year-long engagement with a four week UK based residential programme at its heart. This offers participants the chance to explore collectively and individually how politics, business, public administration and culture work (or fail) in another national environment. UK experience is a major focus yet many of the speakers (who represent all sectors of UK society) have international expertise. Critically, each of the participants submits an Action plan – or project – which they have the chance to develop and explore during their 4 weeks in the UK. These plans are then implemented on their return. The majority of plans have a direct relevance to helping build stronger states and civil societies.

Until 2011 the programme drew its fellows exclusively from the former Soviet Union (FSU). From 20122015 the Trust also worked in the Middle East and North Africa (MENA) region on a programme funded by the UK Government's Foreign and Commonwealth Office (FCO). Since 2017, the Trust has been running two annual fellowship programmes for 12 FSU countries with the support of the FCO: one for 25 fellows from Wider Europe (Armenia, Azerbaijan, Belarus, Georgia, Moldova, Russia and Ukraine); and one for 25 fellows from Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan).

This steady stream of approximately 50 new fellows per year has reinvigorated the Trust’s Alumni network. Since 2018, the Trust has also launched a programme of alumni events to harness and develop this renewed engagement. ‘Alumni Ideas Exchange’ events took place in Tbilisi in 2018, Bishkek in 2019 and (although originally planned to take place in Kyiv) online in March 2020. JST has put great effort into building the means for its Alumni network to connect, share and collaborate outside formal events. The intention has been to allow for greater connectivity between JST fellows, staff and the JST’s wider network of supporters, to increase JST’s ‘offer’ to its fellows and to allow JST to sustain its work and impact outside of programme periods. In 2019/2020 this work included a website and branding overhaul and the development of a new alumni online networking platform.

During the period under review, the Trust ran one fellowship programme in November 2019 for a cohort of 25 fellows from 5 Central Asian countries with funding from the FCO. The Trust was set to start recruitment for the next cohort of Fellows from Wider Europe in March 2020 when the COVID-19 pandemic caused all in-person programming to be put on hold. Due to the pandemic, the FCO was not able to allocate funds that had been earmarked for running JST programmes in 2020/21 and thus the Trust faced a period of financial uncertainty from April to July 2020. From July onwards, the Trust was able to secure short-term funding to deliver online alumni support and engagement activities.

During the 2020 global lockdown, the Trust has been able to develop its nascent online community of fellows in the FSU region by offering webinars with UK experts, practical thematic online discussions and informal networking opportunities. Through the JST’s online facilitation of the network, fellows have been able to access practical support, share skills, ideas and knowledge and exchange reliable information across the FSU region and the UK. The connections built online provide a solid foundation for future collaboration and joint projects addressing governance, rule of law and social justice challenges in the region. The Trust intends to build upon these achievements through further online and face-to-face engagement in 2021.

As discussed under Organisational Structure above this is the fourth period of trading for the charitable company having replaced a pre-existing charitable trust of the same name. The decision to incorporate the Trust followed a period of uncertainty that saw the charitable trust close its office and release its staff team in response to a lull in funding. Subsequent programmes were managed initially by Trustees supported by a team of freelance staff, in 2018 the Trust started to re-build a core team of employed staff. The Trustees remain acutely aware of the funding risks faced by the new charitable company, especially as the charity

3

The John Smith Trust

Trustees’ report for the year ended 30 September 2020

is now in start-up mode with a single project fully funded by one donor, but wish to balance that risk with commitment to the new staff team.

Public Benefit

The Trust carries out a range of activities in furtherance of its charitable objectives, as detailed under Activities and Achievements above. Having reviewed the Charity Commission’s general guidance on public benefit, the Trustees consider that these activities provide benefit both to the charity’s direct beneficiaries, the John Smith fellows, and to the wider public both in the UK and abroad.

Risk Management

The Trustees regularly review the risks the charity faces and are satisfied that systems are in place to mitigate their exposure to the major risks.

In 2019 the charity brought in several new HR and employment policies based on established best practice in the charity sector. A staff handbook was produced for all salaried staff members and new contracts of employment written and agreed by Trustees.

Future Plans

The Trustees had developed a strategy for the coming years including:

However, the timing and nature of these activities will depend on the opportunities available in the postCovid world.

Financial review

In financial terms this was a challenging year for the charity. The FCO’s funding of our flagship fellowship programme was about to be renewed for the 2020/21 government financial year when the UK entered its first lockdown in March 2020. Given the international travel involved in the fellowship programme the FCO paused funding whilst the new virtual approach discussed above was developed.

The only income received by the Trust between April and July 2020 was the furlough grant. From July onwards we received a series of short-term contracts from the FCO / FCDO although this support was not at a level to cover the charity’s ongoing costs. Overall income fell by £542k or 56% to £426k (2019, £968k), and as a result the charity had to cut back on spend and dig into its reserves to avoid redundancies. This led to a loss of £82k in year and reserves falling from £190k to £108k.

The Trustees are aware that this investment of reserves has reduced their room for manoeuvre in future years and cannot be repeated in 2021. However, negotiations with FCO are ongoing for a return to annual funding from May 2021 which if successful will give the charity much greater certainty for the period ahead.

Reserves

The charity's income in the period was exclusively short-term project-based funding. To manage the uncertainty this causes, the Trustees’ policy is to maintain reserves at a level sufficient to cover 6 months of management, administration and support costs. Based on the charity's budget for the 2020-21 financial year this is equivalent to £122k.

At the balance sheet date, the charity’s reserves (which are shown as unrestricted funds in the balance sheet) stood at £108k. The Trustees are pleased to note that after a year of significant investment of reserves, the amount held continues to be in line with the charity’s policy, reflecting reduced core spending. The Trustees expect that the disruption caused by the coronavirus pandemic may lead to another, smaller, reduction of reserves in the year ahead.

4

The John Smith Trust Trustees, report for the year ended 30 September 2020 Responslbllities of the Trustees In relatlon to the financlal statements The trustees (who are aLqo the direcloTr of The John Smth Tn￿t for the purposes ol c>)mpany ￿} are responsib￿ for preparing the Report of the Trustegs and the financial statements in a¢xordance wsth app5icable law aTrJ Unrted hA￿UntIng Standath (Untsd lfjng￿ Ger￿lty Pa•pknJ Aceountsng Practi￿>. Company law requires the tm8tees to prepgre fina￿181 SlateM￿ for financial yoarwhich give 8 truè and fair of the state of affairs of the charitable o)mpany and <rfthe ir￿￿1ft9 r880Lbr￿5 and applicatson of resources. including the ond expenditure. ofthe tharitle c<xnpany ftythat In prnparing those financial slatements, the trustee5 are requir￿1 to.. select S￿rtab￿ accounbng p￿ICieS ond then apFty them consistsnty; obserye the meth¢Jds and principles in the Charity SORP.. make judggments and estimates Ihat are reasonable and pruden( arnl prepare the financial statements on the wng cxrtem basis unb88S it i8 InapPr￿riat8 to assume that the Charity will conb.nue in operat￿n. The trustees are resr•)wUe for keeping proper ￿)Unting rec(xds whth disck)se wrth reasonable a￿ur0¢Y at any time the financial Fwl¥)n d the thaTitable 0￿panY and to enabl& them to ertsurg that the financial statements c)3mply wrth the CornrAn￿ Act 20(￿. are abso res￿n￿￿e for safeguarding the assets of the charitable wnpany and he￿e for lakiT¥J reason8bl8 steps for the prevenb.on and detection of fraud and 0th8r irregukqrities. there no relevant a￿111 inform81V￿ rrf whth the charilable ccrynls auditcrt are unaware; and the trusts have taken all steps that ought to have taken lo make thaiwlves aware of any relevant audit inftYmat)n and kn estish the audilors are ￿Te of that 1nf0nna￿n. This rep￿1 was apwoved by tr Board cl Tn￿ on 8 Jur 2021 and on rb tehair ty: Trustee

Report of the independent examiner to the members of The John Smith Trust for the year ended 30 September 2020

I report to the charity trustees on my examination of the accounts of the Company for the year ended 30 September 2020.

Responsibilities and basis of report

As the trustees of the charity (and also its directors for the purposes of company law) you are responsible for the preparation of the accounts in accordance with the requirements of the Companies Act 2006 ('the 2006 Act').

Having satisfied myself that the accounts of the Company are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of your charity's accounts as carried out under section 145 of the Charities Act 2011 ('the 2011 Act'). In carrying out my examination I have followed the Directions given by the Charity Commission under section 145(5) (b) of the 2011 Act.

Independent examiner's statement

Since the Company’s gross income exceeded £250,000 your examiner must be a member of a body listed in section 145 of the 2011 Act. I confirm that I am qualified to undertake the examination because I am a member of the Institute of Chartered Accountants in England and Wales, which is one of the listed bodies.

I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe:

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

  2. the accounts do not accord with those records; or

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

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

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

Narges Cyroos BSc FCA Sterling Partners Limited Chartered Accountants 2nd Floor Grove House 774-780 Wilmslow Road Manchester M20 2DR

Date: 16th June 2021

6

The John Smith Trust Statement of Financial Activities

for the year ended 30 September 2020

2020
Unrestricted
Funds
2020
Restricted
Funds
2020
Total
Funds
2019
Total
Funds
Notes
Income
Grants
Donations and legacies
Total Income
2
Expenditure
Charitable activities
£
53,911
323
54,234
136,496
£
370,434
-
370,434
370,434
£
424,345
323
424,668
506,930
£
968,235
-
968,235
897,218
Total expenditure
3
136,496 370,434 506,930 897,218
Net income / (expenditure)
Transfers between funds
Net movement in funds
Reconciliation of funds
Total funds brought forward
Total funds carried forward
7
(82,262)
-
(82,262)
190,410
108,148
-
-
-
-
-
(82,262)
-
(82,262)
190,410
108,148
71,017
-
71,017
119,393
190,410

7

The John Smith Trust Balance Sheet at 30 8•ptsrnbor 20XJ 2019 Flx•d ••••i• T8ngible ￿811• 679 Oebtor8 Cash al bank And In h•ThJ 49,786 317,S 276,410 255.527 ,378 531.937 cl•d￿￿. am¢yJnts fdliThJ du• thin y• I259.￿ 1341.52n 107,469 19J,410 1(8,148 1￿,410 Fund• Unreskncl•d fLsTrJ• Rostn'thd fvnds 1C6,148 19),410 Total fund• Ice.148 I￿.410 01thoA Of￿Art and 01) prgparirvj fingrKyo18latthYwts • tn aThl lolr tho •tste of 8tsirs of th• comp8ny as at th• •rJ ofts fina￿81 y•fjr rts wofft Of loss fift￿￿al year in tN• rwuirerMnts of 394 arx1395, and cdherwse ojnpty ith r•quirem•nts ol fv Ad ￿"ThA ￿ fin•Kid ststwrwts. w Iw al •pOic4trAe to t pany. 0fts￿ Companies Act 2((6 rglatyrvJ to dwrtablg srn8M cOMpw￿ arKI th• FinwKyo1 Rep)rting olryl bytt 8cwd on 8 JUM 2021 I￿r b*￿f 08wd Clj•tsro

The John Smith Trust Statement of Cash Flows

for the year ended 30 September 2020

2020
£
2019
£
Net income/(expenditure) for the reporting period (as per the
Statement of Financial Activities)
Adjustments for:
Depreciation charges
(lncrease)/decrease in debtors
lncrease/(decrease) in creditors
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of fixed assets
Net cash provided by (used in) investing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
(82,262)
339
226,624
(81,620)
71,017
818
(115,499)
(43,939)
63,081 (87,603)
(1,018)
-
(1,018) -
62,063 (87,603)
255,527 343,130
317,590 255,527

9

The John Smith Trust Notes to the accounts for the year ended 30 September 2020

1 Principal accounting policies

The principal accounting policies adopted in the preparation of the financial statements are set out below;

(a) Basis of accounting

These financial statements have been prepared under the historical cost convention in accordance with the Statement of Recommended Practice ‘Accounting and Reporting by Charities’ effective January 2019 (the Charities SORP (FRS 102)), UK accounting standards, including 'Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland' (FRS 102) and the Companies Act 2006. The charity is a public benefit entity and has therefore applied the relevant public benefit requirements of FRS 102.

The financial statements are prepared in Sterling which is the functional currency of the charity.

(b) Fund accounting

(c) Income

All income is included in the statement of financial activities when the charity is entitled to it and the amount can be quantified with reasonable accuracy. The following specific policies are applied to particular categories of income.

(d) Expenditure

Expenditure is recognised on an accruals basis as a liability is incurred, and includes any VAT which cannot be fully recovered.

(e) Tangible fixed assets and depreciation

Tangible fixed assets costing over £500 (including any incidental expenses of acquisition) are capitalized. Depreciation is provided at rates calculated to write off the cost on a straight line basis over their expected useful economic life. The rate of depreciation is 33.33% per annum for all assets.

(f) Foreign currency

Transactions in foreign currencies are initially recorded in the entity’s functional currency, which is pound sterling, by applying the spot exchange rate on the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange on the balance sheet date. All differences are taken to the statement of financial activities.

10

The John Smith Trust

Notes to the accounts for the year ended 30 September 2020

2
Income
Foreign & Commonwealth Office
HMRC JRS grants
Donations
Total
3
Expenditure
Charitable activities
Staff
Freelance staff
Fellows travel & accomodation costs
Other direct programme costs
Support costs
Total charitable activities
Total expenditure
Unrestricted
funds
£
33,207
20,704
323
54,234
Unrestricted
funds
£
72,516
2,100
-
403
61,477
136,496
136,496
Restricted
funds
£
370,434
-
-
370,434
Restricted
funds
£
61,719
59,023
80,426
125,841
43,425
370,434
370,434
Total
2020
£
403,641
20,704
323
424,668
Total
2020
£
134,235
61,123
80,426
126,244
104,902
506,930
506,930
Total
2019
£
968,235
-
-
968,235
Total
2019
£
7,902
252,477
359,729
207,591
69,519
897,218
897,218

Support costs, as detailed below, relate to the staff and running costs of the Trust's London secretariat and are allocated on a basis consistent with the use of resources.

Support costs
Staff
Freelance staff
Board meetings
Independent examination fee
IT
Other
Governance
function
£
-
-
-
2,000
-
4,045
6,045
General
support
£
43,344
23,468
-
-
3,395
28,650
98,857
Total
2020
£
43,344
23,468
-
2,000
3,395
32,695
104,902
Total
2019
£
39,531
9,856
1,695
2,000
713
15,724
69,519

11

The John Smith Trust

Notes to the accounts for the year ended 30 September 2020

4
Tangible fixed assets
Cost
At 30 September 2019
Additions in year
At 30 September 2020
Depreciation
At 30 September 2019
Charge for the period
At 30 September 2020
Net Book Value
At 30 September 2020
At 30 September 2019
5
Debtors:amounts falling due within one year
Trade debtors
Accrued income
Prepayments
Other debtors
Total
6
Creditors:amounts falling due within one year
Trade creditors
Taxation and social security
Deferred Income
Accruals & other creditors
Total
2020
£
-
38,359
6,353
5,074
49,786
2020
£
7,767
-
250,000
2,140
259,907
Computer
equipment
£
2,456
1,018
3,474
2,456
339
2,795
679
-
2019
£
275,353
-
1,057
-
276,410
2019
£
80,742
4,382
250,000
6,403
341,527
Summary of movements in year on deferred income
Balance at 1 October
Released in year
Deferred in year
Balance at 30 September
2020
£
250,000
-
-
250,000
2019
£
250,000
-
-
250,000

12

The John Smith Trust

Notes to the accounts for the year ended 30 September 2020

7
Movements in funds
Restricted Funds
Balance at
01-Oct-19
£
Incoming
£
Outgoing
£
Transfers
in / (out)
£
Balance at
30-Sep-20
£
Wider Europe & Central Asia Programme - 332,075 (332,075) - -
Covid Response
Unrestricted funds
General funds
Total funds
Restricted Funds
Wider Europe & Central Asia Programme
Unrestricted funds
General funds
Total funds
Wider Europe & Central Asia Programme
Covid Response
-
38,359
(38,359)
-
-
-
370,434
(370,434)
-
-
190,410
54,234
(136,496)
-
108,148
190,410
54,234
(136,496)
-
108,148
190,410
424,668
(506,930)
-
108,148
Balance at
01-10-18
Incoming
Outgoing
Transfers
in / (out)
Balance at
30-09-19
£
£
£
£
£
-
880,141
(880,141)
-
-
-
880,141
(880,141)
-
-
119,393
88,094
(17,077)
-
190,410
119,393
88,094
(17,077)
-
190,410
119,393
968,235
(897,218)
-
190,410
A fellowship programme featuring 7 cohorts of fellows from 12 FSU countries (7 in
Europe and 5 in the Central Asia region). The programme ran from October 2016 to
March 2020 with funding and logistic support from the FCO.
A series of online events involving JST fellows from across the FSU region with funding
from th FCO. By discussing the pandemic and society's response to it, the project seeks
to encourage sharing of information and ideas across the region.
-
-
108,148
108,148
108,148
Balance at
30-09-19
£
-
-
190,410
190,410
190,410

13

The John Smith Trust

Notes to the accounts for the year ended 30 September 2020

8 Staff costs and numbers

Staff costs and numbers
Gross wages and salaries
Social security costs
Pension
The average number of staff employed during the period was
2020
£
153,033
12,304
12,243
177,579
4
2019
£
44,246
123
3,064
47,433
1

The total compensation to key management personnel (see page 1 of these accounts) was £48,986 (2019, £41,608)

Staff costs have been analysed as: 2020
£
2019
£
Direct charitable expenditure
Support
134,235
43,344
177,579
7,902
39,531
47,433

9 Trustees' remuneration and expenses

The charity did not pay to its trustees any remuneration during the year but did reimburse 1 trustee (2019: 2) a total of £495 for travel expenses incurred in carrying out their duties as trustees (2019, £829).

10 Analysis of net assets between funds

Fixed Assets
Current assets
Current liabilities
Net assets at 30 September 2020
General
Funds
£
679
117,376
(9,907)
108,148
Restricted
funds
£
-
250,000
(250,000)
-
Total
funds
£
679
367,376
(259,907)
108,148

11 Pensions

The charity operates an auto-enrolment pension scheme with The Peoples Pension. All employees are eligible, and the charity pays an 8% employer's contribution. Pension costs stated in note 8 and charged in the statement of Financial Activities represent the total contributions payable by the charity in the year.

14