BECHT FOUNDATION (formerly "The Becht Family Charitable Trust") (Registered Charity Number: 1116657) TRUSTEES, ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024 BECHT FOUNDATION CONTENTS Page Annual Report of the Trustees Independent Auditorfs Report 9-12 statement of Financial Activities 13 Balance Sheet 14 Statement of Cash Flows 15 Notes to the Financial Statements 16-24 Page 1 BECHT FOUNDATION TRUSTEES, ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2024 The Trustees submit their report and the independently audited financial statements of Becht Foundation ('the foundation" or Yhe charity") for the year to 31 December 2024. These have been prepared in accordance with the accounting policies set out on pages 16 to 18 and comply with the charity's trust deed and applicable law. The financial statements comply with the Charities Act 2011 and where applicable, the Charities Act 2022, the trust deed dated 3 October 2006 and Accounling 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 issued in October 2019. REFERENCE AND ADMINISTRATIVE DETAILS Becht Foundation registered charity number 1116657, is based and administered in the United Kingdom. The registered address is Eighth Floor, 6 New Street Square. London, EC4A 3AQ. The names of the Trustees who served throughout the year and continue to seNe at the date of the report's approval are: Lambertus Becht Ann Becht David Poulter The R&H Trust Co {UK) Ltd Natalie Becht (appointed 31 March 2025) Sebastian Becht (appointed 31 March 2025) Kevin Bechl (appointed 31 March 2025) Key Management: The Trustees, together with the Programme Director, consider themselves the key management personnel of the Foundation who are in charge of directing and controlling, running and operating the Foundation on a day to day basis. Independent Auditors: Martlet Audit Limited, Yeoman Gate, Martlet House, Yeoman Way, Worthing, BN13 3QZ Accountants: Rawlinson & Hunter LLP. Eighth Floor, 6 New Street Square, New Fetter Lane, London, EC4A 3AQ Solicitors: Macfarlanes LLP, 20 Cursitor Street, Holborn, London, EC4A 1 LT Investment Managers: UBS Wealth Management, 1 Finsbury Avenue, London Fidelity Investments, Oak Brook, Illinois, USA BDT Capital Partners, LLC, Chicago, Illinois, USA The Craftory, Egyptian House, 170 Piccadilly, London Aiim Partners, 410 Sherman Avenue, Palo Alto, California, USA Goldman Sachs International, Plumtree Court, 25 Shoe Lane, London, EC4A 4AU Page 2 BECHT FOUNDATION TRUSTEES, ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2024 STRUCTURE, GOVERNANCE AND MANAGEMENT The Charity was established by Declaration of Trust dated 3 October 2006. In accordance with the Declaration of Trust dated 3 October 2006 there shall never be less than three Trustees. New Trustees are elected by Trustees who are members of the Becht family. In accordance with the Deed, the children of the Original Trustees were invited to become Trustees shortly after the year end. Each of the three accepted the role and were formally appointed on 31 March 2025. Induction and Trainlng In order to ensure that the Trustees operatè within current Charity Commission guidelines, Rawlinson & Hunter staff attend regular structured training sessions on charity administration and compliance. Knowledge gained from this training is then passed on to the Trustees for discussion and implementation. The Trustees meet on a regular basis to review performanTr, grant applications and any other matters arising. All Trustees are expected to attend the meetings and play an active role in the administration of the foundation, including researching possible donees and visiting charity events where applicable. Through Trustee meetings, consultation with agents, and review of Charity Commission guidance CC 26, the Trustees have examined the major strategic, business, and operational risks that the charity faces. Following a review and assessment of these risks, the Trustees have formulated management policies and implemented internal controls to mitigate risks to the Fund. The Trustees shall continue to review the risks, and the adequacy of the systems in place. Any complaints are considered by the Trustees and responded to within three weeks. The foundation has two employees who receives a fair and commensurate pay package which is reviewed annually. The Trustees do not receive remuneration for acting as Trustees. Trustees, Responsibilities Statement The Trustees are responsible for preparing the Trustees, Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The law applicable to charities in England and Wales 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 charity and of the incoming resources and application of resources of the charity for that period. In preparing these financial statements, the Trustees are required to- Page 3 BECHT FOUNDATION TRUSTEES, ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2024 STRUCTURE, GOVERNANCE AND MANAGEMENT (continued) select suitable accounting policies and then apply them consistently., observe the methods and principles of the Charities SORP (FRS 102). make judgements and estimates that are reasonable and prudent" state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements" and prepare Ihe financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation. 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 and where applicable, the Charities Act 2022, the Charity (Accounts and Reports) Regulations 2008 and the provisions of the trust deed. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for Ihe prevention and detection of fraud and other irregularities. Disclosure of information to Auditor In so far as the Trustees are aware: there is no relevant audit information of which the charity's auditor is unaware; and the Trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information. The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdiclions. Intsrnal Controls The Trustees have overall responsibility for ensuring that the charty has appropriate systems of internal controls. They are also responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charity. The Trustees are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps towards the prevention and detection of fraud. The system of internal controls is designed to provide reasonable, but not absolute, assurance against material misstalement or loss. Risk Management and Governance A risk assessment has been undertaken which comprises: an annual review of the risks the charity may fa￿. the establishment of systems and procedures to mttigate those risks. and the implementation of procedures designed to minimise any potential impact on the charity should those risks materialise. This continuing process will identify risk areas to which the foundation is vulnerable and highlight any necessary safeguards thal will need to be put in place. No major risks were identified at the date of these financial statements. Page 4 BECHT FOUNDATION TRUSTEES, ANNUAL REPORT FOR THE PERIOD ENDED 31 DECEMBER 2024 STRUCTURE, GOVERNANCE AND MANAGEMENT (continued) The Trustees have signed fit and proper declarations in line with HMRC guidance. In addition, the Trustees have tsken due consideration of Good Goveman A Code for the Voluntary and Community Sector, ensuring that the seven main principles of the Code are adhered to. These are: Organisational purpose. Leadership,. I ntegrity- Decision-making, risk and control. Board effectiveness. Equality, diversFty and inclusion. and Openness and accessibility. The Trustees recognise that good governance plays an essential part in securing the future of the charity and confirm that the said main principles of the Code are followed by them in leading, directing and managing the charity. Related party transactions occurring during the year are disclosed in note 10 on page 24. OBJECTIVES AND ACTIVITIES FOR THE PUBLIC BENEFIT The objects of the charity are such exclusively charitable purposes as the Trustees may in their absolute discretion determine. The charily is established for general charitable purposes and will operate as a giant making charity, supporting charitable projects, organisations and individuals with grants of varying sizes and durations. The Trustees may use the income and the capital of the charity in promoting the objects. Statement of Public Benefit The Trustees are aware of the Charity Commission guidance on Public Benefit and confirm that they have complied with the duty in Section 4 of the Charities Act 2011 to have due regard to it. They consider the information which follows in this annual report, about the foundation's aims, aclivrties and achievements in Ihe areas of interest that the trust supports demonstrates the benefit to its beneficiaries and through them to the public, that arise from those activities. Fundraising The Trustees have referred to the Charities (Protection and Social Investment) Act 2016 ("the Act") and the Guidance on Charities and Fundraising issued by the Charity Commission ("CC20"). They confirm that the Act and CC20 have no impact on the charity as it does not engage in any public fundraising activities. Page 5 BECHT FOUNDATION TRUSTEES, ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2024 OBJECTIVES AND ACTIVITIES FOR THE PUBLIC BENEFIT (continued) Grant Making Policy The charity has been established to provide grants for purposes that are, or would be deemed to be, exclusively charitable under the law of England and Wales. The charity has put in place sound grant arrangements so that it can properly select appropriate grantees and impose prudent terms on grants. including, as appropriate, requiring monitoring and evaluation of the way in which funds are applied by grantees. Objectives and Activities of the Charity The Trustees hold the capital and income funds for such charities, or charitable purposes, in any part of the world as they may determine. In particular, but not limited to such purposes, the Trustees seek to sponsor and support activities that protect and restore the planet's biodiversity through marine conseNation and climate communications. The Trustees have gradually phased down their support for activities that provide humanitarian aid. in order to increase their support for projects in the marine and climate communications space. The Trustees wish to be able to provide regular, long-term support to charitable purposes. and therefore aim to maintain sufficient reserves to produ￿ a yield that will make such support possible. During the year the Trustees made grants to charitable purposes of $11,487,810 (2023: $9,832,442). The Trustees use the funds to make grants to charitable purposes, in the interests of providing public benefrt. The Trustees have wide powers, enabling them to support charitable purposes. The main areas which the Trustees seek to provide charitable support are (i) protection and restoration of our planet's biodiversity through marine conseniation. and (li) climate communications to help build strong public support for climate action. The charity also provides support to other biodiversity and humanitarian projects, at a smaller level. The Trustees are aware that charities may require unrestricted funds to enable them to operate effectively. Therefore, the Trustees are willing to consider making both restricted and unrestricted donations to charitable purposes in Ihe course of their support, with a continued focus on monitoring regular process. The Trustees hired a Programme Manager to support them and the Programme Director in grant making as well as reviewing the performan￿ and progress of the projects supported by the Foundation. In order to minimise administrative costs, the Trustees will reply to successful applicants only. The Trustees request that donees provide updates and information on how they have used any funds re￿ived. These responses are considered at Trustee meetings. Such updates should include details of outcomes, outcome against agreed milestones. Whilst many outcomes may be measurable, the Trustees appreciate that certain benefits are less tangible. and this is understood when reviewing the effect of the Trustees, grants. Where further information is required, the Trustees will make contact with donees. Page 6 BECHT FOUNDATION TRUSTEES, ANNUAL REPORT FOR THE PERIOD ENDED 31 DECEMBER 2024 ACHIEVEMENT AND PERFORMANCE Total charitable donations paid or awarded during the year amounted to $11,487,810 (2023.. $9,832,442 The Trustees, largest donation in the year was $2,500,006 awarded to Potential Energy Coalition towards their goal of increasing public support for climate action (2023: $2,037,573 also awarded to Potential Energy Coalition)- $52,357 was paid in respect of governance costs (2023: $48,297) and $427,384 in support costs (2023: $371,583) In 2024, Becht Foundation continued to grow its grant making in the marine conservation and climate communications space. The share of charitable expenditure on climate communications was $2.5m (22 %). Expenditure on marine issues increased to $7.4m (64/.), from $6.5m (66°/) in the previous period. Humanitarian issues increased from $1.3m (130/0) to $1.6m (14/0), due to a lump-sum final payment to St George's Hospital. A major milestone came from Australia, which has added 523,000 km2 of new no-take marine protected areas, bringing the total area under full protection to 23 % of its ocean. This includes expanded protection for globally significant ecosystems such as the Heard and McDonald Islands and Macquarie Island. Becht Foundation supports Pew Charitable Trusts in their ongoing efforts to secure high levels of protection for Australia's ocean. In The Bahamas, 68,000 km2 of marine areas - including key seagrass meadows, coral r*ts and mangroves-will benefit from enhanced protection and management through a Nature Bonds initiative led by The Nature ConseNancy, which has unlocked more than US$120 million to strengthen ocean protection. Progress began toward ratifying the High Seas Treaty, with the goal of securing the 60 ratifications needed for the treaty to enter into force by the end of 2025. The treaty - adopted by the UN in 2023 after nearly two decades of negotiations- provides a legal framework to protect marine biodiversity in areas beyond national jurisdiction. Becht Foundation continues to support the High Seas Alliance in their efforts to advance ratification and lay the groundwork forfuture high seas marine protected areas. At the EU level, the European Council formally adopted the Nature Restoration Law - a major legal framework requiring member states to restore at least 20 % of the Eu's land and sea areas by 2030. Becht Foundation supported a legal and advocacy coalition that successfully campaigned for the laws passage, including ClientEarth, Oceana, and Seas at Risk. In Argentina, Becht Foundation is supporting Por el Mar's campaign to protect Argentine Patagonia's kelp forests. A landmark new provincial law in Tierra del Fuego now ensures the protection of all marine forests within the province, where approximately 60 % of Argentina's kelp forests are found. In the climate communications space, Becht Foundation supports Potential Energy Coalition, which ran an extreme weather campaign that generated a 22 % lift in baseline support for urgent government action on climate change, and launched three new clean energy campaigns in Pennsylvania, North Carolina, and Illinois. The trustees remain committed to scaling up funding to support marine conseNation and protection projects, and climate communications initiatives that generate strong public support for climate action. Page 7 BECHT FOUNDATION TRUSTEES, ANNUAL REPORT FOR THE PERIOD ENDED 31 DECEMBER 2024 FINANCIAL REVIEW Incoming Resources and Resources Expended Total incoming resources were $10,626,775 {2023: $3,155,520). $2,057,354 (2023.. $1,625,693) was expended on investment management fees and associated costs. Governance costs totalled $52,357 (2023.. $48,297), whilst direct charitable activity totalled $11,487,810 (2023.. $9,832,442). Net incoming funds over the period totalled $13.208,877 (2023.. $22,058,812 net expenditure) driven by returns received from the Foundation's private investment holdings. The Trustees, source of funding in the year was investmenl income and capital realised from the charity's investment portfolios. Investsnents The Trustees, aim in the short to medium term is to grow the Fund and produce sufficient investment income to enable the Trustees to conlinue their support of charitable purposes. A net unrealised gain of $12,073,219 (2023: $21,949,398) was recognised during the year on the Trustees, investments. Through investment sales the Trustees realised a net gain of $4,586,140 {2023.' $8,809,774 loss) in the year. Currency revalualion losses of $52,352 (2023.. $22,134 gains) were recognised during the year. Investment income for the year to 31 December 2024 totalled $10,626,775 (2023.. $3,074,561}' a 240.60/0 increase (2023.. 55 % decrease) on the previous year. This is the result of recognition of income returns from private equity investments and the Trustees, decision to invest in income generating Private Credit Funds. The Trustees monitor performan￿ of the underlying investments and mangers on a regular basis, through face to face reviews, investment reports and comparisons to peer groups and appropriate Indi￿S. Investment policy and performance The Charity's investment objective is to generate a capital appreciation whilst providing liquidity to the Charity in line with the total return of the broader equity market over the long term, after expenses. This should allow the Charity to maintain the real value of the assets, whilst funding its annual expenditure. The Trustees have agreed an asset allocation strategy with investment managers, which is set to achieve this objective. The key risk to the sustainability of the Charity is inflation and the assets will be invested to mitigate this risk over the long term. The Trustees understand that this is likely to mean that inveslment will be concentrated in real assets and that the capital value will fluctuate. The trustees are able to tolerate volatility of the capital value of the Charity, as long as the Charity is able to meet its short term grant making commitments through either income or liquid capital assets. To this end the Charity's assets are invested widely and diversified by asset class, by manager and by security. Asset classes can include cash, bonds, equities, property, hedge funds, structured products, private equity, commodities and any other asset that is deemed suitable for the Charity. The investment philosophy is also to invest a proportion of the Charity's assets into profit seeking companies that have a social charter that is consistent with the purposes of the charity. On occasion this may include early stage higher risk companies where the financial returns are not yet proven where Page 8 BECHT FOUNDATION TRUSTEES, ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2024 FINANCIAL REVIEW (continued) the purpose is strongly aligned with the Charity's objectives particularly with regard to the protection and restoration of marine ecosystems or in the transition to more sustainable agricultural practices. In these cases the Trustees recognise that losses could materialise but that the benefits of purpose outweigh the risks and will not be of a size that would put the overall investment objective at risk. The Trustees have adopted a targeted approach in managing their investments, to match the aims of the Charity- I nvestments will not be made in cotnpanies which derive significant levels of their turnover from activities which conflict wilh the aims of the charity, nor the causes which the Trustees are trying to support. Reserves policy and going concern The Trustees have reviewed the guidance on reserves in Charity Commission guidan￿ note CC19. The Trustees have examined the Trust's requirement for reSoUr￿S in light of the main risks to the organisation and have no outstanding commitments or cash demands which are not adequately covered by existing reSoUr￿s. The net assets of the Trust are regarded as free reserves and the funds at 31 December 2024 will be relained to make grants in accordance with the Trust's charitable objecls and any policies. The Trustees consider that the freely expendable funds are appropriate and adequate taking into account plans for grants to be awarded in future and have at present therefore not designated any specific reserves. However, the Trustees will keep this under constant review. In future years, a specific reserves policy may be required. The balance held as unrestricted funds as at 31 December 2023 was $475.042.512 (2023 $461,833,635). The financial statements have been prepared on a going con￿rn basis as the Trustees believe thal no material uncertainties exist. The current uncertainty in the global economy, including cost inflating factors, have increased financial pressure on charities. The Trustees have considered, the level of funds held, the expected level and security of income and the committed expenditure for twelve months from the date of signing of these financial statements. The Trustees are satisfied the forecast income and reseNes are sufficient to cover all of the budgeted expenditure to be able to continue as a going concern. The Trustees therefore consider the adoption of the going concern basis in preparing these financial statements continues to be appropriate. PLANS FOR THE FUTURE The Trustees wish to continue to provide sustainable long term support to charitable purposes through grant making. AUDITOR It will be proposed at the next Trustees, meeting that Martlet Audit Limited be appointed as auditor to the charity for the ensuing year subject to the charity requiring an audit. Approved by the Trustees and signed on their behalf by.. Lawbektllfj Secht Lainbeitiig LIl￿lI1t Io(.1 ?.A, ?Q?5 i G.-42..39 Glv1T+il Lambertus Becht Date Page 9 REPORT OF THE INDEPENDENT AUDITOR TO THE TRUSTEES OF BECHT FOUNDATION Oplnion We have audited the financial statements of Becht Foundation ('the charity") for the year to 31 December 2024 which comprise the Statement of Financial Activity, Balance Sheet, Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements- give a true and fair view of the state of the charity's affairs as at 31 December 2024 and of its incoming resources and application of resources, for the year then ended. have been properly prepared in accordance with United Kingdom Generally Accepled Accounting Practice. and have been prepared in accordance with the requirements of the Charities Act 2011. Basis for opinion We conducled our audit in accordance with International Standards on Auditing (UK) (ISAS (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charity in accordan￿ with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC'S Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit eviden￿ we have obtained is sufficient and appropriate to provide a basis for our opinion. Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which the ISAS (UK) require us to report to you were: the trustees, use of the going concern basis of accounting in the preparation of the financial statements is not appropriate- or the trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the charity's ability to continue to adopt the going concern basis of accounting for a period of at least ￿e1ve months from the date when the financial statements are authorised for issue. Other infomiation The trustees are responsible for the other information. The other infomiation comprises the information included in the Trustees, Annual Report and Financial Statements, other than the financial statements and our auditorfs report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other infomiation is materially inconsistent with the financial statements or our knowledge obtained in the audit or othetwise appears to be materially misstated. If we identrfy such material inconsistencies or apparent material misstatements, we are required to detemiine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in Ihis regard. Page 10 REPORT OF THE INDEPENDENT AUDITOR TO THE TRUSTEES OF BECHT FOUNDATION (continued) In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstaternents, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Matters on which we are required to report by exception We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion.. the information given in the financial statements is inconsislent in any material respect with the trustees, report., or sufficient accounting records have not been kept., or the financial statements are not in agreement with the accounting records., or we have not received all the information and explanations we require for our audit. Responslbllities of trustees As explained more fully in the trustees, responsibilities statement set out on page 2, the trustees are responsible for the preparation of financial statements which give a true and fair view, and for such internal control as the trustees detemine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the trustees are responsible for assessing the charity's ability to continue as a going concern, disclosing, as applicable. matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charty or to cease operations, or have no realistic alternative but to do so. Auditor's responsibilities for the audit of the financial statements We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordan with regulations made under section 154 of that Act. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud orerror, and to issue an auditor's reportthat includes our opinion. Reasonable assurance is a high level of assuran￿, but is not a guarantee that an audit conducted in accordance with ISAS (UK) will always detect a material misstatement when it exists. Misstatements Can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAS (UK), we exercise professional judgment and maintain professional scepticism throughout the audil. We also- Identify and assess the risks of material misstalement of the audited financial statements, whether due to fraud or error, design and perform audit prO￿dureS responsive to those risks. and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumslanTrs, but nol for the purpose of expressing an opinion on the effectiveness of the internal control. Page11 REPORT OF THE INDEPENDENT AUDITOR TO THE TRUSTEES OF BECHT FOUNDATION (continued) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the trustees. Conclude on the appropriateness of the Irustees, use of the going con￿rn basis of accounting and, based on the audit evidence obtained, whether a material uncertainly exists related to events or conditions that may cast significanl doubt on the charity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the audited financial statements or. if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorfs report. However, future events or conditions may cause the charity to cease to continue as a going concern. Evaluate the overall presentstion, structure and content of the audited financial statements, including the disclosures, and whether the audited financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and liming of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above. to detect material misstatements in respect or irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.. We considered the nature of the charty's industry and its control environment and reviewed the charity's documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management and others within the entity about their own identification and assessment of the risks of irregularities. We obtained an understanding of the legal and regulatory frameworks that the charity operates in, and identÉfied the key laws and regulations that: had a direct effect on the determination of material amounts and disclosures in the financial slatements. These included the Companies Act, Charities Act, Charities (Accounts and Reports) Regulations 2008. Health and Safety Act, employment law, ￿nSionS legislalion, tax legislation, Bribery Act and Slavery Act., and do not have a direct effect on the financial statements but compliance with which may be fundamental to Ihe charity's ability to operate or to avoid a material penalty. These included the Charity Commission for England and Wales (Charity Commission) regulations. fundraising regulations and Anti-money Laundering Regulations (including Proceeds of Crime Act 2002 and Terrorism Act 2000) We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements. As a result of performing the above, we identified the greatest potential for fraud in the following areas, and our specific procedures performed to address them are described below.. In common with all audits under ISAS (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments. assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business. In addition to the above, our procedures to respond to the risks identified included the following: reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements- performing analytical procedures to identify any unusual or unexpected relationships that may Indicate risks of material misstatement due to fraud; Page 12 REPORT OF THE INDEPENDENT AUDITOR TO THE TRUSTEES OF BECHT FOUNDATION (contFnued) enquiring of management concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulatlons.. and reading minutes of meetings of those charged with governance. reviewing intemal management reports. ￿VIeWing correspondence with HMRC and with the Charity Commission. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: wvm.frc.org.uklauditorsfesponsibilities. This description fonns part of our auditorfs report. Use of this report This report is made solely to the charity's trustees, as a body, in accordance wlth Part 4 of the Charities (Accounts and Reports) Regulations 2008, Our audit work has been undertaken so that we might state to the chanty's trustees those matters we are required to state to them in an auditor's report and for no other purpose. To the ftjllest extent permittèd by law. we do not accept or assume responsibility to anyone other than the charrty and the chantls trustees as a body, for our audit work, for this report, or for the opinions we have formed. Lfv