**REGISTERED COMPANY NUMBER: 05608022 (England and Wales) REGISTERED CHARITY NUMBER: 1112621**
## **ARTICLE 25**
**TRUSTEES REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2022**
**ARTICLE 25 CONTENTS OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2022**
-
||Page|
|---|---|
|Report of the Trustees|1 to 11|
|Independent Examiner’s Report|12|
|Statement of Financial Activities|13|
|Balance Sheet|14-15|
|Statement of Cash Flows|16|
|Notes to the Financial Statements|17 to 25|
|Detailed Statement of Financial Activities|26 to 27|
**ARTICLE 25 REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2022**
## **REFERENCE AND ADMINISTRATIVE DETAILS**
|**Registered Company number**|**:**|05608022 (England and Wales)|
|---|---|---|
|**Registered Charity number**|**:**|1112621|
|**Registered office and principal office**|**:**|6thFloor|
|||1 Canada Square|
|||London|
|||E14 5AB|
|**Managing Director**|**:**|G Holding (started 25/4/22)|
|||D Murray (left 27/4/22)|
|**Directors and Trustees**|**:**|D Bennetts, Chair|
|||J B Pringle|
|||M J Catton|
|||G Grainger|
|||D J R Delahunty|
|||C Soyinka (resigned 15/4/22)|
|||P Hudson|
|||N Thingelstad|
|||M Astarita (appointed 11/7/22)|
|**Patron**|**:**|Lord Foster of Thames Bank|
|**Independent Examiner**|**:**|David Green MA (Cantab) ACA|
|||Azets|
|||Suites B & D|
|||Burnham Yard|
|||Beaconsfield|
|||Buckinghamshire|
|||HP9 2JH|
|**Bankers**|**:**|The Co-operative Bank|
|||P.O. Box 250, Dell House,|
|||Skelmersdale|
|||Lancashire WN8 6WT|
|||Bank of Scotland|
|||PO Box 1000|
|||BX2 1LB|
The Trustees, who are also directors of the charitable company for the purposes of the Companies Act 2006, present their annual report and the financial statements for the period ended 31 August 2022 which are prepared to meet the requirements for a Director’s Report and accounts for Companies Act purposes. The financial statements have been prepared in accordance with the accounting policies set out in note 3 to the accounts and comply with the Companies Act 2006 and the Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standards applicable in the UK and Republic of Ireland (FRS 102).
Page 1
**ARTICLE 25 REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2022**
## **CHAIR’S INTRODUCTION**
Article 25 supports and empowers communities around the world to design and build housing, schools and medical facilities, enabling local development, alleviating poverty, and improving equality of access to a safe place to live, education, and healthcare. We also often help to rebuild lives and livelihoods in the wake of disasters and conflicts. By working closely with local people, we develop an acute understanding of prevailing conditions, capacity and resources. Using the best principles of architecture and engineering we design resilient, functional, beautiful and safe places for housing, education and healthcare. Working on the ground alongside these communities, we supervise construction; and through training support we exchange knowledge and skills with people to build greater capacity within that community. The end result is never just a building that serves to increase access to safe housing, learning, and better health, it is also the legacy of a community with greater resilience and more opportunities to enjoy a thriving future. In 17 years, Article 25 has carried out over 100 projects in 36 countries.
In this financial year we started several new projects. We began the refurbishment of a hospital floor in Casablanca with new operating theatres which will be used for cleft lip and cleft palate operations by Operation Smile Morocco. We also completed a feasibility study for a major expansion of a hospital in western Nepal for the United Mission of Nepal and began a study for the rebuild of a hospital in northern Ghana for the charity AfriKids. In Rwanda we were asked to explore the possibility of building a cheesemaking dairy for a farmers’ cooperative in the eastern province of the country.
We continue to work on a four-year programme of design and construction supervision for the Housing Recovery Programme of the island of Dominica. The programme is planned to replace approximately 450 houses lost in Hurricane Maria, with disaster resilient construction. Over 100 houses were completed in 2021/22. We are also supervising the construction of a Children’s Village for orphaned children in northern Tanzania; the first phase is expected to be completed at the end of 2022.
We are continuing to work in close partnership with Child Support Tanzania and Able Child Africa, we have now completed four phases of construction. The first two phases of construction are also complete at a school in Niamey, Niger.
Having completed the Preliminary Design of a community hospital on the island of Montserrat in February 2020, we are now working on final drawings and specifications with the expectation of starting construction in 2023. This hospital will replace one destroyed in a volcanic eruption in 1997. A Trauma Centre in Nepal for the Leprosy Mission is nearing construction completion. And we are currently designing and clinical and research laboratory on this same site.
One staff change occurred in 2021-22, Managing director David Murray left in April 2022. In the same month Gemma Holding was appointed to the same role.
On behalf of the Trustees, I want to thank most warmly our hard-working staff and volunteer team, our partners in the many countries where we work, our professional collaborators who help us to deliver these projects and, of course, our donors and supporters both small and large, who help to build and maintain our charity so that it is as resilient as the buildings we create and the communities we support across the world.
Page 2
**ARTICLE 25 REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2022**
## **STRUCTURE, GOVERNANCE AND MANAGEMENT**
## **Governing document**
The charity is controlled by its governing document, a Memorandum and Articles of Association, and constitutes a limited company, limited by guarantee, as defined by the Companies Act 2006. The Memorandum and Articles of Association is the charity's governing document. The Articles of Association are currently being updated by Trustee Natalie Thingelstad and were finalised in early 2022/23.
## **Recruitment and appointment of new trustees**
The existing Trustees appoint trustees. Their terms and responsibilities are outlined in a trustee recruitment policy that was implemented in 2016. Trustees of the charity are also Directors of the Limited Company. We apply a rotation of Directors and as per our Articles of Association; one third of the Directors must retire each year but may be re-elected.
During 2021-22, we saw one trustees retire from the board – Chris Soyinka - and we appointed one new trustee – Mark Astarita. We intend to make further appointments, mindful of our aims of equality, diversity, and inclusion, whilst seeking to further diversify the skills and expertise we have access to at board level.
## **Organisational aims**
Article 25 was founded originally under the name Architects for Aid and was set up to provide better housing for those in need and to work with partner NGOs to provide built solutions wherever there is disaster, poverty or need. Renamed Article 25 in 2009, the charity aims to promote safe housing, access to education, and healthcare as a human right, and is named after the 25th Article of the Universal Declaration of Human Rights, which is the article of the declaration relating to the built environment.
## **Organisational structure**
Our organisational structure comprises a Board of Trustees, a Senior Management Team, the Staff and Volunteers. The team of staff and volunteers is organised into projects and charity management (including fundraising and communications), each headed by a director.
## **Related parties**
Article 25 works with partner NGOs, INGOs, charities, development agencies and governments in the UK and overseas. Article 25 receives the donation of skills from various professional parties who assist in the delivery of our projects.
Article 25 introduces capacity building construction and architecture and engineering skills to international development projects. The organisation also provides continuing education to professional firms and larger agencies as a way to increase the impact of its work.
## **Risk management**
All Article 25 projects and operations are assessed for their potential risks in delivery before significant charity resources are dedicated to the project. A risk register is maintained by the Managing Director and Director of Projects and is presented for approval at the quarterly trustee board meetings.
The charity also liaises with local and international bodies (for example the High Commission or Embassy departments as appropriate) when undertaking the management of work overseas and dealing with any issues of controversy or potential controversy when working alone, or with any collaborating entity. Article 25 operates a safeguarding policy.
Page 3
**ARTICLE 25 REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2022**
Overseas project travel is assessed for risks ahead of each field trip. If necessary, staff and volunteers undergo any required hostile environment and first aid briefings prior to going abroad. All travellers are covered under an Article 25 insurance policy, specifically provided for NGO workers; they are briefed on pertinent local social issues and are instructed to carry emergency contact details. Each location is researched in advance and advice sought from FCDO and in-country sources, particularly from our local partners who have detailed knowledge of conditions in the field. Our legal advisors have advised that we have, through the training and documentation we use, achieved effective limitation for our liability regarding risks in sending participants on overseas projects and that they have sufficient information to meet standards of "informed consent" to participate as staff or volunteers for Article 25.
Article 25 also has public liability and professional indemnity insurance to offset any risk incurred in the course of conducting our work at home and overseas.
Page 4
**ARTICLE 25 REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2022**
## **OBJECTIVES AND ACTIVITIES FOR THE PUBLIC BENEFIT**
## **Objectives and Aims**
The trustees have considered the guidance published by the Charity Commission and have concluded that the charitable company’s core activities satisfactorily address the principles of identifiable public benefit and demonstrate that the charitable company has fulfilled the public benefit requirement under the Charities Act 2011.
Article 25 provides building design solutions and key construction project management skills to the International Development community. Focusing on the core areas of buildings for housing, learning, health, and where appropriate, resilience to disasters, we aim to apply these skills where they make the greatest beneficial difference to the most disadvantaged communities. We continue to deliver these objectives through close collaborations with NGOs and community groups internationally.
## **ACHIEVEMENT AND PERFORMANCE**
## **Charitable Activities**
Article 25 continues to deliver essential design and construction skills to those who would otherwise have no access to such services. We work with partners across the built environment sector to provide design, construction management and engineering skills to benefit some of the poorest and most disadvantaged communities in the world.
Throughout our work, capacity development remains a constant priority. Our construction projects are used to develop the skills of workers in the communities of our local partners and to increase long-term resilience, leaving behind a community better able to build safely for itself. We improve the long-term performance of a project by engaging the end-users from inception to completion. This positively affects the sustainability of a project and builds the capacity of those local partners who take responsibility for the project and its sustainable operation.
Article 25 is one of the few organisations globally delivering this technical work as a primary objective and from a small base of operations. Our projects have a positive impact on hundreds of thousands of beneficiaries over time.
Article 25 safeguards the effectiveness of its work through maintaining high professional standards and by monitoring outputs. We examine the long-term sustainability of each project to ensure a lasting impact is achieved.
## _**Housing**_
## **Dominica**
This is a disaster recovery programme to replace 450 houses lost across the island of Dominica in Hurricane Maria. Rather than building blocks of flats for the families made homeless, each family can apply for a house to be built on their own land, maintaining their ability to farm and to keep their neighbours and local community. Families can choose one of six model houses that will be adapted to
Page 5
**ARTICLE 25 REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2022**
the access and slopes of the site and built by a small contractor. As each house has its own timelines, the overall project is a “rolling” programme with various stages of design and construction occurring simultaneously. 414 beneficiaries have been enrolled to date and our Dominican team have carried out 355 site surveys 331 planning applications have been submitted and 331 have been approved, 225 tenders have been awarded. Families have moved into 188 completed houses.
## **Tanzania**
We have completed the design and first phase of construction of a Children’s Village for orphaned children in northern Tanzania, Phase 2 is due to start construction in March or April 2023. Our partner charity Tir na n’Og have received additional funding for the development of food security on the adjacent farm which will be integrated into the next phase of the project. We have a Tanzanian team of an architect and an engineering firm to advise during construction and our Tanzanian site architect will continue to supervise works through Phase 2.
## _**Learning**_
## **Niger**
The first four classrooms, two latrine blocks and the Guard’s house were completed and handed over to the client for the start of the school year in October 2021. The sports fields, water tower and other infrastructure works are also complete. Phase 3 is due to start in this fiscal year.
## **Tanzania**
Phase 3 of this school project, which consists of a kitchen and a dining/assembly hall has been completed and is in use. Phase 4, a classroom and physiotherapy room has now also been completed. A new grant has been received from Cure Myotonic Dystrophy to construct more classrooms and further developments will include comprehensive grading of the site and completion of the sanitation design.
## _**Health**_
## **Montserrat**
After completing the preliminary design for a new national hospital Article 25 and its engineering team are continuing with the final design of the new hospital and refurbishing an older building to house hospital support functions while the new building is under construction. Construction is expected to start toward the end of fiscal year 22-23.
## **Morocco (Casablanca).**
The renovation of one floor into operating theatres and neonatal and paediatric intensive care wards has been designed and construction is underway. We are working with a local Moroccan architect and Moroccan engineers on this project.
Page 6
**ARTICLE 25 REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2022**
## **Morocco (Marrakech)**
We have completed the design of this centre which will be used for continuing care of patients with cleft palate and cleft lip before and after surgery. We are working with a local Bureau d’Etudes to carry out the engineering drawings for construction. A Moroccan architect based in Marrakesh will work with Article 25 to supervise the construction.
## **Myanmar**
We have not been able to resume work in Myanmar and have closed out our contract.
## **Nepal (Lele)**
The construction of the Trauma Centre at Anandaban Hospital is close to completion.
We are in the final stage of design for a laboratory, adjacent to the Trauma Centre, to serve the clinical and research needs of the Leprosy Hospital. As the site is in an active seismic zone, we invited a globally recognised structural engineering firm with strong seismic credentials to analyse the geotechnical conditions and develop the structural concepts and an international services consultancy to design the mechanical and electrical engineering concepts. Nepali engineers have now taken on the final design for all design disciplines; collaboration with their U.K. counterparts will continue through design and construction.
## **Nepal (Tansen)**
We have completed a Feasibility Study for the regeneration of a 200-bed hospital in Western Nepal for the United Mission Nepal. The project will be implemented over two or more phases and will provide new clinical facilities and replace older buildings constructed in the 1950’s and 1970’s with earthquake resilient new buildings. A funding review is currently underway for this project.
## **Ghana**
We were asked by the charity AfriKids to study the feasibility of rebuilding their hospital in Bolgatanga, northern Ghana which had to be demolished due to the collapse of some walls and areas of roof. This study has been completed. It identifies reconstruction in three phases. The initial phase will be to locate a new operating theatre in a partially constructed building, so the hospital can continue to function and maintain its accreditation.
## **Community Enterprise**
## **Rwanda**
We have completed a Feasibility Study for a cheesemaking dairy for a farmers’ cooperative in the eastern province of Rwanda. The farmers are already selling milk from their large herds of cattle but want to add value and increase their economic potential by making and selling cheese in future. This will be Article 25’s first community enterprise project. The ambition is to make this project carbon neutral. It involves a large number of partners: the farmer’s co=operative, the Rwandan Dairy Board, Blues Creamery from Ireland for expertise in cheesemaking and marketing, University College Dublin
Page 7
**ARTICLE 25 REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2022**
and Rwandan scientists from the Ministry of Agriculture for a cattle breeding programme and carbon neutral management of cattle.
When the project moves into design, we will seek out engineering partners with experience in bio-gas and other sustainable methods for delivering hot and cold water, and cooling for the cheese ripening rooms.
## **FINANCIAL REVIEW**
While our day-to-day operations are supported by cash accounting, accounting standards require us to recognise income and expenditure by accrual accounting within the relevant period. Besides income and expenditures this includes accounting for donations in kind and voluntary services provided by our partners.
The Statement of Financial Activities shows net shortfall for the year of £24,570 (2021: surplus of £57,410) and our reserves stand at £50,056 (2021: £74,626) in total. The income for the year generated from donations and legacies was £353,500 (2021: £401,296) and the income from charitable activities was £399,393 (2021: £490,793). The worsening in the financial position was due to fewer fundraising activities due to Covid and several projects being at an early stage when fewer cost contributions are generated.
## **RESERVES POLICY**
The charity aims to have a policy of holding 3 months of reserves. The average actual reserves for the fiscal year were less than twice the monthly operating cost due to a drop off in fundraising income. We have made it a key priority to attain a truly sustainable flow of finance. Following from the end of fiscal year 2021-22 we have adopted a new policy with respect to balancing our charitable project activities so that in future cost contributions will equal costs on at least 65% of our projects.
## **FUTURE DEVELOPMENTS**
For the period May – August 2022 the incoming Managing Director set about devising a three-year organisational strategy for 2023-2026, following an initial 360 appraisal of the organisation. This was signed off by the Board in October 2022. This document outlines five strategic areas of focus for the organisation, with a view to stabilising the organisation financially over the period of the strategy, recognising that Article 25 must deliver financial stability before we can invest for growth.
The five strategic priorities for Article 25 over the period are:
- Become the 'go-to' architectural organisation within the international development community for design and build projects
We will do this through increased engagement with other INGO's, governments and key stakeholders. Communications and engagement strategy to focus on an INGO audience.
- Increase the number and scale of Article 25 projects
Page 8
**ARTICLE 25 REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2022**
We will do this by securing at least 10 new projects during the course of the strategy, using the new operating model for surplus generating, cost recovery and subsidised projects, (30/50/20 ratio) and adopt a proactive approach to project leads. We will use agreed assessment tools (based on the Social Return on Investment) at all stages: leads, EOI, shortlist, outline bid, appointment, feasibility study and final bid and appointment, to ensure Article 25 is delivering significant and measurable environmental, social and economic benefits on all aspects of our projects.
- Create and measure greater impact from Article 25 projects
We will do this by evaluating Social Return on Investment (SROI) to demonstrate the social, economic, environmental and financial value that results from our activities to attract new investment and project partners. Use SROI to inform our communication strategy with stakeholders to leverage investment, partnership and improve tenders.
- Raise more funds to ensure financial sustainability
Increase cost contribution from projects (as per business model) from 40% of total project value to 65%. Adopt the new fundraising strategy and use fundraised income to invest in organisational infrastructure, fundraising capabilities and build up reserves - rather than using fundraised income to plug existing shortfall.
- Employ a communications strategy that better communicate our impact to an INGO audience
We will do this by identifying key stakeholders and develop a targeted communications strategy, based on evidenced data. Move from predominantly architect and public facing communications to a strategy focused on the wider INGO sector and governments.
## **FUNDRAISING**
Cashflow has remained challenging over this financial year, but project activity has increased substantially which should show a positive financial impact in 2022-23.
The incoming Managing Director was tasked by the Board to stabilise the financial position of the organisation and a number of fundraising recommendations are being adopted to do this, as set out in the new strategy. These include:
## _**Major Donor Fundraising**_
We will maintain and grow our income from major donors. We are extremely grateful to our existing major donors and for their generous and continued commitment to Article 25.
## _**Corporate Partnerships**_
We will maintain and grow our income from corporate donors. Article 25 will launch a new corporate fundraising campaign in 2023, to bolster our existing base of incredible corporate supporters – without whom our work would simply not be possible.
Page 9
**ARTICLE 25 REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2022**
## _**Trust Fundraising**_
Article 25 will test a modest trusts and foundations fundraising programme, an income stream previously not explored by the organisation, in the interests of diversifying our income streams.
## _**Individual Giving**_
Article 25 will explore new initiatives to bolster our individual giving income such as The Big Give campaign and a specific legacy campaign.
The diversified fundraising effort, coupled with the new financial model for how Article 25 calculates cost contributions for projects, will ensure the charity generates additional unrestricted income and reserves.
## _**Future Project Work**_
For 2022-23 we look forward to constructing the second phase of the Children’s Village in northern Tanzania. We hope to conclude design of the houses in Dominica. Design of Phase 5 of the Pre-school for disabled and able-bodied children in Mbeya should be completed by the end of the fiscal year. The Operation Smile clinic in Marrakech should be mid-way through construction and the hospital refurbishment at Bouafi Hospital in Casablanca should be complete. We expect to be in construction on a new hospital in Montserrat. We should conclude the hospital construction work in Nepal with the Leprosy Mission and have the laboratory in construction. We also hope to start design work on the hospital project, in Tansen, Nepal.
We expect to begin design work on the dairy in Rwanda and on the replacement hospital in Ghana.
## **RESPONSIBILITIES OF THE BOARD OF TRUSTEES**
The Board of Trustees (who are also the Directors of The Charitable Company for purposes of company law) are responsible for preparing the Report of the Trustees and the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice.
Company law requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including income and expenditure, of the charitable company for that year. In preparing those financial statements, the Trustees are required to:-
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charity SORP (FRS102);
- make judgements and estimates that are reasonable and prudent; and
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business.
Page 10
ARTICLE 25
REPORT OF THE TRUSTEES
FOR THE YEAR ENDED 31 AUGUST 2022
The Board of Trustees are responslble for keeping proper accountlng records that disclose wh
reasonable accuracy at any time the financial position of the charitable company and to enable them to
ensure that the financial statements comply with the Companies Act 2006. They are also responsibSe for
safeguarding the a55ets of the chéritabltr company and hence for taking reasonable step5 for the
preventlon an(1 detectSon of fraud and other irregularities.
AUDIT
Under the terms of the Charities Act 2011, the Company falls within the range for which no audit is
required. However, an independent examination of the accounts 15 required.
APPROVAL
These financial statements have been prepared in accordance with the Companies Act 2006 and the
Charitle5 50RP IFRS1021.
Approved by the Board of Trustees on 29103123
slgned on thelr behalf by
D 8ennetts
Phil Hudson
Pa%e 11
**ARTICLE 25 REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 AUGUST 2022**
I report to the trustees on my examination of the accounts of the above charity (“the Trust”) for the year ended 31[st] August 2022.
## **Responsibilities and basis of report**
As the charity trustees of the company (and also its directors for the purposes of company law) you are responsible for the preparation of the accounts in accordance with the requirements of the Companies Act 2006 (‘the 2006 Act’).
Having satisfied myself that the accounts of the company are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of your company’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**
The company’s gross income exceeded £250,000 and I am qualified to undertake the examination because a qualified member of the ICAEW.
I have completed my examination. I confirm that no material matters have come to my attention in connection with the examination which gives me cause to believe that:
- the accounting records were not kept in respect of the company as required by section 386 of the 2006 Act; or
- the accounts do not accord with those records; or
- 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
- 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.
David Green, MA (Cantab) ACA Azets Suites B & D Burnham Yard Beaconsfield Buckinghamshire HP9 2JH
19 April 2023
Page 12
## **ARTICLE 25 STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING AN INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 AUGUST 2022**
|Support costs
8
**-**
**240,176**
**Total Expenditure**
**25,317**
**752,146**
**Net (expenditure)/income**
**(1,253)**
**(23,317)**
**RECONCILIATION OF FUNDS**
**Total funds brought forward as at 1**
**September 2021**
**44,878**
**30,748**
**Total funds carried forward as at 31**
**August 2022**
15
**20,561**
**29,495**
**2022**
**2022**
**Restricted Unrestricted**
**Funds**
**Funds**
Notes
**£**
**£**
**INCOME**
Donations and legacies
4
**2,000**
**351,500**
Income from charitable activities
5
**-**
**399,393**
Other income
6
**-**
**-**
**Total Income**
**2,000**
**750,893**
**EXPENDITURE**
Cost of raising funds
8
**- 92,172**
Charitable activities
8
**25,317 419,798**|**240,176**
**777,463**
**(24,570)**
**74,626**
**50,056**
**2022**
**Total**
**Funds**
**£**
**353,500**
**399,393**
**-**
**752,893**
**92,172**
**445,115**||250,848
841,711
57,410
17,216
74,626
2021
Total
Funds
£
401,296
490,793
7,032
899,121
49,472
541,391|
|---|---|---|---|
|||||
|||||
The statement of financial activities also complies with the requirements for an income and expenditure account under the Companies Act 2006.
The statement of financial activities includes all gains and losses recognised in the year.
All income and expenditure derive from continuing activities.
The notes on pages 18 to 26 form part of these financial statements.
Page 13
**ARTICLE 25 BALANCE SHEET AT 31 AUGUST 2022 Co Reg No 05608022**
|Notes
**FIXED ASSETS**
Tangible assets
10
**CURRENT ASSETS**
Cash at bank and in hand
Debtors
11
**CREDITORS**
Amounts falling due within one year
12
**NET CURRENT ASSETS**
**CREDITORS**
Amounts falling due in more than one
year
13
**NET ASSETS/LIABILITIES**
**FUNDS**
Restricted funds
15
Unrestricted funds
15
**TOTAL FUNDS**|**2022**
**Total**
**funds**
**£**
**425**
**52,141**
**137,056**
**(86,233)**
**102,964**
**(53,333)**
**50,056**
20,561
29,495
**50,056**|2021
Total
funds
£
1,275
99,118
71,763
(59,197)|
|---|---|---|
|||111,684
(38,333)|
|||74,626|
|||43,878
30,748|
|||74,626|
For the year ending 31 August 2022 the company was entitled to exemption from audit under Section 477 of the Companies Act 2006 relating to small companies.
No members have required the company to obtain an audit of its accounts for the year in question in accordance with section 476 of the Companies Act 2006.
The directors acknowledge their responsibility for complying with the requirements of the Act with respect to accounting records and for the preparation of accounts.
These accounts have been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small charitable companies.
The notes on pages 18 to 26 form part of these financial statements
Page 14
ARTICLE 25
BALANCE SHEET
AT 31 AUGUST 2022
Co Reg No 05608022
The flnancial statements were approved and authorised for1s5ue by the Board of Trustees on 29 March
2023 and were signed on its behalf by..
Denise Bennetts
Phil Hudson
Page 15
## **ARTICLE 25 STATEMENT OF CASH FLOWS AT 31 AUGUST 2022**
|**Cash flow from operating activities**
Net surplus/(deficit) for the year
Depreciation of tangible fixed assets
(Increase) / decrease in debtors
Increase / (decrease) in creditors
**Net cash flow from operating activities**
**Cash flow from investing activities**
Acquisition of tangible fixed assets
**Net cash flow from investing activities**
**Net (decrease) / increase in cash and cash equivalents**
Cash and cash equivalents at 1st September 2021
**Cash and cash equivalents at 31st August 2022**|**2022**
**£**
**(24,570)**
**850**
**(65,293)**
**42,036**
**(46,977)**
**-**
**-**
**(46,977)**
**99,118**
**52,141**|2021
£
57,410
4,034
(33,557)
(22,037)
5,850
-
-
5,850
93,268
99,118|
|---|---|---|
The notes on pages 18 to 26 form part of these financial statements.
Page 16
**ARTICLE 25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2022**
## **1. COMPANY INFORMATION**
Article 25 is a private company, limited by guarantee, registered in England Wales. The company’s registered number and registered office address can be found on Page 1.
## **2. STATEMENT OF COMPLIANCE**
The financial statements have been prepared in compliance 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) Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006 as they apply to the financial statements of the company for the year ended 31 August 2022.
## **3. ACCOUNTING POLICIES**
## **Basis of preparing the financial statements**
The financial statements have been prepared under the historic cost convention.
The financial statements are presented in sterling (£) which is also the functional currency of the company.
The company meets the definition of a public benefit entity under FRS 102.
## **Income recognition policies**
All incoming resources are included in the Statement of Financial Activities (SoFA) when the charity is legally entitled to the income after any performance conditions have been met, the amount can be measured reliably, and it is probable that the income will be received.
For donations to be recognised the charity will have been notified of the amounts and the settlement date in writing. If there are conditions attached to the donation and this requires a level of performance before entitlement can be obtained then income is deferred until those conditions are fully met or the fulfilment of those conditions is within the control of the charity and it is probable that they will be fulfilled.
For legacies, the point of entitlement is the earlier of the date of the charity being notified of an impending distribution or the date the legacy is received. At this point income is recognised. On occasion legacies will be notified to the charity however it is not possible to measure the amount expected to be distributed. On these occasions, the legacy is treated as a contingent asset and disclosed.
Investment income is earned through holding assets for investment purposes such as on short term bank deposit and solely comprises bank interest.
Page 17
**ARTICLE 25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2022**
## **Expenditure recognition**
All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Expenditure is recognised where there is a legal or constructive obligation to make payments to third parties, it is probable that the settlement will be required and the amount of the obligation can be measured reliably. It is categorised under the following headings:
- Costs of raising funds includes the costs associated with the fundraising team, including payroll for the members of that team and the direct costs of fundraising events.
- Expenditure on charitable activities comprises those costs incurred by the charity in the delivery of its activities and services for its beneficiaries. This includes staff costs, mission expenses and associated costs.
- Other expenditure represents those items not falling into the categories above.
- Irrecoverable VAT is charged as an expense against the activity for which expenditure arose.
## **Allocation of support costs**
Charitable expenditure includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them.
Support costs are those functions that assist the work of the charity but do not directly undertake charitable activities. They also include those costs associated with meeting the constitutional and statutory requirements of the charity and include the audit fees and costs linked to the strategic management of the charity.
All costs are allocated between the expenditure categories of the Statement of Financial Activities on a basis designed to reflect the use of the resource.
## **Debtors**
Other debtors are recognised at the settlement amount due. Prepayments are valued at the amount prepaid.
## **Cash at bank**
Cash at bank comprises balances held in various instant access bank accounts and represents highly liquid funds.
## **Creditors**
Creditors and provisions 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 estimated reliably. Creditors and provisions are normally recognised at their settlement amount.
## **Financial instruments**
The charity has only 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 settlement value.
## **Tangible fixed assets**
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Plant and machinery etc - write off over 3 years
Page 18
**ARTICLE 25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2022**
## **3. ACCOUNTING POLICIES (continued)**
## **Taxation**
The charity is exempt from corporation tax on its charitable activities.
## **Fund accounting**
Unrestricted funds can be used in accordance with the charitable objects at the discretion of the trustees.
Restricted funds can only be used for particular restricted purposes within the objects of the charitable company. Restrictions arise when specified by the donor or when funds are raised for particular restricted purposes.
## **Going concern**
The financial statements have been prepared on a going concern basis as the directors believe that no material uncertainties exist. The directors have considered the level of funds held and the expected level of income and expenditure for 12 months from authorising these financial statements and are satisfied that the charity will be able to continue as a going concern.
## **Volunteers and donated services and facilities**
Where services are provided to the charity as a donation that would normally be purchased from our suppliers, this contribution is included in the financial statements at an estimate based on the fair value of the contribution to the charity. Donated services and facilities are analysed in note 18. As provided in the SORP (FRS 102) no amount is included in the financial statements for volunteer time.
## **Operating leases**
Rentals applicable to operating leases are charged to the SoFA on a straight-lined basis over the period of the lease.
## **Critical accounting estimates and areas of judgement**
Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimate have been made include:
- Volunteers and donated services and facilities (see above)
## **4. DONATIONS AND LEGACIES**
|**DONATIONS AND LEGACIES**|||
|---|---|---|
||**2022**
|2021|
||**£**|£|
|Donations|**164,625**|208,778|
|Donations in kind|**162,940**|167,218|
|Gift aid|**25,935**|25,300|
||**353,500**|401,296|
Included in donations there is £2,000 (2021: £6,611) of restricted income.
Page 19
**ARTICLE 25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2022**
## **5. INCOME FROM CHARITABLE ACTIVITIES**
||**2022**
|2021|
|---|---|---|
||**£**|£|
|Fundraising events|**41,197**|45,625|
|Grants|**358,196**|445,758|
||**399,393**
|490,793|
|Included in the Grant Income there is £Nil (2022: £90,752) of restricted income.|||
|**6.**
**OTHER INCOME**
JRS Government Grant
Sundry income
Total
**7.**
**NET INCOMING/(OUTGOING) RESOURCES**|**2022**
**£**
**-**
**-**
**-**|2021
£
7,032
-
7,032|
|---|---|---|
Net resources are stated after charging:
||**2022**|2021|
|---|---|---|
||**£**|£|
|Depreciation - owned assets|**850**|4,034|
|Independent examination fees|**3,600**|3,390|
**8. EXPENDITURE ANALYSIS**
|Raising funds
Events
Admin
Mission
Professional
Delivery|**Restricted**
**funds**
-
-
-
-
25,317
25,317|**Unrestricted**
**funds**
17,535
74,637
92,172
255,187
164,611
419,798|**Total**
**2022**
**£**
**17,535**
**74,637**
**92,172**
**255,187**
**189,928**
**445,115**|Total
2021
£
19,581
29,891|
|---|---|---|---|---|
|||||49,472
263,916
277,475
541,391|
Page 20
**ARTICLE 25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2022**
|**Support Costs (including Governance)**
Rent Rates and Service Charge
**-**
Communications
**-**
Office
**-**
Insurance
**-**
IT
**-**
Legal & Professional
**-**
Finance
**-**
**-**
25,317|143,568
6,686
60,030
7,677
17,457
3,972
787
240,176
752,146|**153,014**
**6,686**
**60,030**
**7,677**
**17,457**
**3,972**
**787**
**240,176**
**777,463**|153,014
7,640
63,974
6,369
12,559
7,123
169
250,848
841,711|
|---|---|---|---|
In the prior year there was restricted expenditure of £87,609 in relation to Mission: Delivery.
|**9.**
**STAFF COSTS**
**Paid Staff**
Wages and salaries
Social security costs
Pension contributions
**Time Donated**
Professional Resource|**2022**
**£**
**317,396**
**32,015**
**7,410**
**356,821**
**2021**
**£**
**62,940**
**62,940**|2021
£
289,735
28,024
6,251
324,010
2021
£
64,718
64,718|
|---|---|---|
The number of salaried employees averaged 7 (2021: 7) but varied according to project needs. One employee was paid between £60,000 and £70,000 in the current year (two employees were paid between £60,000 and £70,000 in the prior year). Alongside staff there is a larger team of volunteers helping to deliver Article 25’s work. The volunteers include those volunteering in Article 25’s inhouse design team and communications team (averaging 22 in the current and 22 in the prior year) and the professionals and practices volunteering their time from their own practices (averaging 18 part time in the current year and 16 part time in the prior year). The key management personnel are D. Murray (to April 2022), G Holding (from April 2022) and B. Sennewald (2021 D. Murray and B. Sennewald). The total employee benefits of the key management personnel of the charitable company were £149,425 (2021: £142,450).
Page 21
**ARTICLE 25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2022**
## **10. TANGIBLE FIXED ASSETS**
|**10.**|**TANGIBLE FIXED ASSETS**|
|---|---|
|
**11.**
**12.**
**13.**|**Plant and machinery etc**
**COST**
**£**
At 1 September 2021
**17,079**
Additions
Disposals
**-**
**(14,529)**
At 31 August 2022
**2,550**
**DEPRECIATION**
At 1 September 2020
**15,804**
Charge for year
On disposal
**850**
**(14,529)**
At 31 August 2021
**2,125**
**NET BOOK VALUE**
At 31 August 2022
**425**
At 1 September 2021
1,275
**DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR**
**2022**
2021|
||**£**
£
Prepayments & accrued income
**137,056**
71,763
**CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR**
**2022**
2021
**£**
£
Tax and social security creditor
**9,583**
7,274
Loans
**40,000**
10,000
Other creditors
**10,800**
11,763
Accruals & deferred income
**25,850**
30,160
**86,233**
59,197
**CREDITORS: AMOUNTS FALLING DUE IN MORE THAN ONE YEAR**
**2022**
2021
**£**
£
Total Loans
**93,333**
48,333
**93,333**
48,333
Loans are repayable as follows:
Within one year 40,000 10,000
Between one to two years 35,000 10,000
Between two to five years 18,333 28,333
More than five years - -|
Of the loans £55,000 (2021: £Nil) are unsecured and are interest free. With the remainder of the loan it is a bounce back loan that is unsecured and interest is charged at 2.5% from June 2021 – June 2026.
Page 22
**ARTICLE 25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2022**
## **14. ANALYSIS OF NET ASSETS BETWEEN FUNDS – CURRENT YEAR**
|Fixed Assets
Cash
Debtors
Creditors due in less than one year
Creditors due in more than one year|Unrestricted
funds
£
425
31,580
137,056
(86,233)
(53,333)
29,495|Restricted
funds
£
-
20,561
-
-
-
20,561|Total
funds
£
425
52,141
137,056
(86,233)
(53,333)|
|---|---|---|---|
||||
50,056|
|**ANALYSIS OF NET ASSETS BETWEEN FUNDS – PREVIOUS YEAR**
Unrestricted
funds
£
Fixed Assets
Cash
Debtors
Creditors due in less than one year
1,275
55,240
71,763
(59,197)
Creditors due in more than one year
(38,333)
30,748
**15.**
**MOVEMENT IN FUNDS – Current year**
**At 1.9.21**
**Incoming**
**resources**
**£**
**£**
**Funds**
Unrestricted
Restricted
30,748
43,878
750,893
2,000
**TOTAL FUNDS**
**74,626**
**752,893**
The Restricted fund comprises of the following:
**At 1.9.21**
**Incoming**
**resources**
**£**
**Project**
Warm & Healthy Homes
7,343
-
Child Support Tanzania
10
2,000
Glendon Hospital Montserrat
7,124
-
Yangon Hand Hygiene
5,668
-
Operation Smile Marrakesh
23,733
-
**TOTAL RESTRICTED FUNDS**
**43,878**
**2,000**|Restricted
funds
£
-
43,878
-
-
-
43,878
**Resources**
**expended**
**£**
(752,146)
(25,317)
**(777,463)**
**Resources**
**expended**
**£**
-
(2,000)
(7,124)
(5,474)
(10,719)
**(25,317)**||Total
funds
£
1,275
99,118
71,763
(59,197)
(38,333)
74,626
**At 31.8.22**
**£**
29,495
20,561
**50,056**
**At 31.8.22**
**£**
7,343
10
-
194
13,014
**20,561**|
|---|---|---|---|
|||||
The Warm & Healthy Homes project provides workshops for people in London who suffer from fuel poverty.
The Child Support Tanzania project helps run a pre-school in Tanzania for children with physical and mental disabilities to enable them to join a mainstream school curriculum at age five.
Page 23
**ARTICLE 25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2022**
The Glendon Hospital Montserrat project is for the initial concept design options for a new general hospital.
The Yangon Hand Hygiene project supports our long-term work at the hospital and devised to support the hospital staff with the provision of hand sanitizers, soaps and restorative plumbing works.
The Operation Smile Marrakesh project aims to provide better access to specialist healthcare and dentistry focussed on cleft lip and cleft palette.
The Beirut Emergency Fund was set up to deliver emergency remedial work on buildings damaged in the major port explosions that shook the city on 4th August 2020.
|**Funds**
Unrestricted
Restricted
**TOTAL FUNDS**
The Restricted fund comprises of
**Project**
Warm & Healthy Homes
Child Support Tanzania
Glendon Hospital Montserrat
Yangon Hand Hygiene
Operation Smile Marrakesh
Beirut Emergency Fund
**TOTAL RESTRICTED FUNDS**|**At 1.9.20**
**Incoming**
**resources**
**£**
**£**
(16,908)
34,124
801,758
97,363
**17,216**
**899,121**
the following:
**At 1.9.20**
**Incoming**
**resources**
**£**
7,343
-
10
-
20,984
55,019
5,787
68
-
35,733
-
6,543
**34,124**
**97,363**|**Resources**
**expended**
**£**
(754,102)
(87,609)
**(841,711)**
**Resources**
**expended**
**£**
-
-
(68,879)
(187)
(12,000)
(6,543)
**(87,609)**|**At 31.8.21**
**£**
30,748
43,878
**74,626**
**At 31.8.21**
**£**
7,343
10
7,124
5,668
23,733
-
**43,878**|
|---|---|---|---|
## **16. RELATED PARTY DISCLOSURES**
None of the trustees (or any persons connected with them) received any remuneration during the current or prior years, nor did any of them claim any expenses (2021: Nil). During the year there was unrestricted income from the trustees and persons connected with them totalling £15,000 (2021: £40,000).
## **17. COMPANY STATUS**
The company is limited by guarantee and has no share capital. In accordance with the Memorandum and Articles of the charitable company, the liability of members is limited to £10 each in the event of the winding up of the charitable company. At 31 August 2022 there were 8 members (2021: 8 members).
Page 24
**ARTICLE 25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 AUGUST 2022**
## **18. DONATED FACILITIES AND SERVICES**
|**DONATED FACILITIES AND SERVICES**|||
|---|---|---|
|Office space
PR
Professional skills donated|**2022**
**£**
**100,000**
**-**
**62,940**
**162,940**|**2021**
**£**
100,000
2,500
64,718|
|||167,218|
The income equivalent of the above services and facilities were recognised within incoming resources as a donation, and an equivalent charge included within resources expended.
## **19. OPERATING LEASES**
Total future minimum lease payments under non-cancellable operating leases are as follows:
|Less than one year
Between one and five years
More than five years|**2022**
**£**
**5,683**
**15,158**
**-**
**20,841**|**2021**
**£**
5,683
19,697
1,145|
|---|---|---|
|||26,525|
## **20. ANALYSIS OF CHANGES IN NET DEBT**
||**Balance at**||||
|---|---|---|---|---|
||**beginning of**||**Other**|**Balance at**|
||**year**|**Cash Flow**|**changes**|**end of year**|
||**£**|**£**|**£**|**£**|
|Cash at bank and in hand|99,118|(46,977)|-|**52,141**|
||**-----------------------------------------------------**|**-----------------------------------------------------**|**-----------------------------------------------------**|**--------------------------------------------**|
|Total cash and cash equivalents
|99,118|(46,977)|-|**52,141**|
||**-----------------------------------------------------**|**-----------------------------------------------------**|**-----------------------------------------------------**|**--------------------------------------------**|
|Loans due within one year|(10,000)|(30,000)|-|**(40,000)**|
|Loans due in more than one year|(38,333)|(15,000)|-|**(53,333)**|
||**-----------------------------------------------------**|**-----------------------------------------------------**|**-----------------------------------------------------**|**---------------------------------------------**|
|Total|50,785|(91,977)|-|**(41,192)**|
||======================|======================|====================|**=================**|
Page 25
## **ARTICLE 25 DETAILED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 AUGUST 2022**
|
**INCOME**
**Voluntary income**
Donations
Donations in kind
Gift aid
Legacy
**Activities for generating funds**
Fundraising events
Grants
**Other income**
JRS Government Grant
Sundry income
**EXPENDITURE**
**Costs of generating income**
Wages
Social security
Pension costs
Promotion
Events
**Charitable activities**
Wages
Social security
Pension costs
Travel
**Total incoming resources**|**RestrictedUnrestricted**
**£**
**£**
2,000
162,625
162,940
-
- 25,935
- -
2,000
351,500
-
-
41,197
358,196
- 399,393
-
-
-
-
-
66,533
-
-
6,756
1,348
-
4,583
-
12,952
-
92,172
-
204,589
-
-
20,322
5,115
-
25,162
2,000 750,893
|**2022**
**£**
**164,625**
**162,940**
**25,935**
**-**
**353,500**
**41,197**
**358,196**
**399,393**
**-**
**-**
**66,533**
**6,756**
**1,348**
**4,583**
**12,952**
**92,172**
**204,589**
**20,322**
**5,115**
**25,162**
**752,893**|2021
£
208,778
167,218
25,300
-
401,296
45,625
445,758
490,793
7,032
-
26,260
3,076
555
12,470
7,111
49,472
212,225
18,848
4,643
28,200
899,121|
|---|---|---|---|
This page does not form part of the statutory financial statements.
Page 26
## **ARTICLE 25 DETAILED STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 AUGUST 2022**
|**Charitable activities**
Sundries
Mission expenses
Foreign travel expenses
Visas, vaccinations & medical
IT and computer consumables
General materials etc
**Governance costs**
Legal and professional fees
**Support costs**
Rent, rates and water
Wages
Social security
Pension costs
Office services
Recruitment & HR
Insurance
Telephone
Postage and stationery
IT and computer consumables
Depreciation of tangible assets
**Finance**
Bank charges
Bank interest
**Total Expenditure**
**Net Income over expenditure**||**RestrictedUnrestricted**
**2022**
**£**
**£**
**£**
-
-
**-**
25,317 155,601**180,918**
-
9,009
**9,009**
-
-
**-**
-
-
**-**
-
-
**-**
25,317
419,798
**445,115**
-
3,972
**3,972**
-
3,972
**3,972**
-
143,568
**143,568**
- 46,274**46,274**
-
-
4,937
946
**4,937**
**946**
-
909
**909**
-
4,320
**4,320**
-
7,677
**7,677**
-
6,686
**6,686**
-
1,794
**1,794**
-
17,457
**17,457**
-
850
**850**
-
235,418
**235,418**
-
137
**137**
-
650
**650**
**25,317**
752,146
**777,463**
**(23,317)**
(1,253)
**(24,570)**|
|2021
£
-
269,187
7,553
735
-
-
541,391
7,123
7,123
153,014
51,250
6,099
1,053
191
445
6,369
7,640
903
12,559
4,034
243,557
60
108
841,709
57,410|
|---|---|---|---|---|
||||||
||||||
||||||
This page does not form part of the statutory financial statements.
Page 27