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2024-03-31-accounts

REGISTERED COMPANY NUMBER: 06792524 (England and Wales) REGISTERED CHARITY NUMBER: 1130203

Report of the Trustees and Financial Statements for the Year Ended 31 March 2024

for Ephesea UK

Morgan Griffiths LLP Chartered Accountants Statutory Auditor Cross Chambers 9 High Street Newtown Powys SY16 2NY

Ephesea UK

Contents of the Financial Statements for the Year Ended 31 March 2024

Page
Report of the Trustees 1 to 9
Report of the Independent Auditors 10 to 13
Statement of Financial Activities 14
Balance Sheet 15
Cash Flow Statement 16
Notes to the Cash Flow Statement 17
Notes to the Financial Statements 18 to 25
Detailed Statement of Financial Activities 26 to 27

Ephesea UK

Report of the Trustees for the Year Ended 31 March 2024

The trustees who are also directors of the charity for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 31 March 2024. The trustees have adopted the provisions of Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019).

OBJECTIVES AND ACTIVITIES

Objectives and aims

The Charity's objects (as amended at the 2017 Annual Members' Meeting) are to promote for the benefit of the public the protection and conservation of the world's forests. In particular, by:

  1. Raising awareness of the value of responsibly managed forests

  2. Promoting and supporting a programme of voluntary forest management certification and chain of custody certification

  3. Developing consensus around standards for good forest management; and

  4. Increasing public awareness about independent forest certification.

Strategic Priorities

In early 2021, revised strategic priorities were proposed for 2021-24 and adopted:

These strategic priorities are underpinned by our work to:

Activities demonstrating most significant progress are highlighted in the Achievements and Performance section below.

Page 1

Ephesea UK

Report of the Trustees for the Year Ended 31 March 2024

OBJECTIVES AND ACTIVITIES Public benefit

Deforestation and forest degradation continue to be a global issue, impacting climate change, biodiversity loss and the spread of zoonotic disease. Deforestation destroys essential ecosystem services, leading to the loss of livelihood opportunities.

FSC is a global, not-for-profit organisation dedicated to the promotion of responsible forest management worldwide. The FSC system enables businesses and consumers to make informed choices about the forest products they buy and create positive change by engaging the power of market dynamics.

Global Vision: The true value of forests is recognised and fully incorporated into society worldwide. FSC is the leading catalyst and defining force for improved forest management and market transformation, shifting the global forest trend toward sustainable use, conservation, restoration, and respect for all.

Global Mission: FSC will promote environmentally appropriate, socially beneficial, and economically viable management of the world's forests.

FSC UK works to develop and maintain a voluntary, auditable forest management standard for the UK, which complies with the FSC Principles and Criteria for responsible forest management. FSC forest management certification requires that forest management is not just environmentally appropriate but also socially beneficial and therefore protects the rights of those who live, work and play in the forest.

FSC UK also works to stimulate demand for FSC-certified products, empowering both businesses and consumers to easily identify and source forest products from FSC-certified forests, verified reclaimed sources and/or other controlled sources. Half of people in the UK surveyed in 2023 (FSC UK Consumer Survey via Kantar) were of the belief that all wood-based products available in the UK should be made from sustainable sources and a further quarter thought at least some should meet this standard. 60% thought that consumers have a responsibility to ensure that the products they buy, and the packaging they use, are responsibly sourced, but 71% held businesses responsible for the sustainability of their products and packaging.

The trustees have had regard to the Charity Commission's guidance on public benefit when exercising any powers or duties to which the guidance is relevant.

Page 2

Ephesea UK

Report of the Trustees for the Year Ended 31 March 2024

ACHIEVEMENT AND PERFORMANCE Charitable activities Priority: Promote the value of forests and demonstrate the impact/benefits of FSC

Forests play a vital role in enabling and maintaining life and help to mitigate global challenges of climate change and biodiversity loss. At the same time, forest products are increasingly important as renewable materials that can be a main factor in enabling the bio-based and circular economy which the world needs to develop. Responsible forestry does more than protect the health and resilience of forests - it also protects the wellbeing of the people who live and work in them. These people include community and family forest managers, Indigenous Peoples living on their ancestral lands, and workers whose livelihoods depend on forest products.

FSC's vision is that the true value of forests is recognised and fully incorporated into society worldwide. Forest management certification and ecosystem services verification provide tools to deliver this. We should continue to promote FSC certification and demonstrate the positive impacts on our forests whilst also working with others to develop additional tools and solutions.

The certified area in the UK at the end of April 2024 is 1,629,247 ha. This is an annual fall of 26,283ha or 1.5%. However, some 24,834 ha (95%) of the decrease is accounted for by an FSC area correction within a single major certificate holder who remains certified. Therefore, the true annual decrease in area is just 0.1% and this falls within the normal fluctuations that can occur. There continues to be a steady increase in the number of certified members of group schemes with an increase from 1,110 to 1,123 over the year.

We are pleased to report that we have supported Ecosystem Services verification in two sites. These are a biodiversity and recreation-based scheme on the Isle of Mull with a community group and a carbon-based scheme for a small private woodland in Wales. Work continues to move forward the first sponsorship arrangement set up between a forest management certificate holder and chain of custody certificate holder for a scheme based around a large scale native woodland creation project's impact on water quality and flood flow risk with validation of impacts due to take place later this year. Interest and enquiries regarding Ecosystem Services schemes are continuing to grow. A short film and accompanying case study, about the first ecosystem services verification in the UK was created and launched through the FSC UK Forest Matters newsletter and social media channels.

FSC UK's Outreach Manager attended the British Ecological Society Trees for Climate Change, Biodiversity and People symposium where she presented a poster on FSC Ecosystem Services verification. Our Forest Standards Manager visited Harper Adams University to introduce the work of FSC to their final year forestry students.

Priority: Support FSC globally and encourage stakeholder engagement to ensure that the FSC system is fit for purpose, accessible, relevant and trusted

The Global Strategy calls for streamlined policies and standards while ensuring credibility. FSC is widely recognised as the most credible forest certification scheme and maintaining this credibility is fundamental to the scheme's success. As a long-established National Office, FSC UK is well placed to support FSC as it works to deliver a credible, fit for purpose system, providing input on the potential implications of proposed activities and encouraging stakeholders to engage as appropriate as well as working to maintain FSC's integrity and credibility in the UK.

FSC UK hosted a webinar on the EU Deforestation Free Regulation encouraging participation in the associated FSC consultations, the recording of which has had over 850 views. The Executive Director presented on FSC and EUDR to UK publishers at the BookChainProject Forest Sourcing Forum.

In September, the Annual Members' Meeting took place in Swinley Forest, near Bracknell. Organisations represented included the Born Free Foundation, BM Trada, Confor, Kingfisher, Soil Association Certification and Timber Development UK. FSC UK's Outreach Manager led Simon Webb of forest management group scheme, UKFCG, and Maria Wilding of FSC UK Member, Llais y Goedwig, in discussion regarding the latest UK developments in Ecosystem Services Verification.

Page 3

Ephesea UK

Report of the Trustees for the Year Ended 31 March 2024

Priority: Improve standards for forest management in the UK for all sizes and types of forest

It is a fundamental requirement, in terms of both FSC UK's charitable objectives and our role as an accredited National Office, that we have an approved national forest stewardship standard. We need to identify mechanisms to reduce the financial and administrative burden on smallholders whilst ensuring that FSC's high forestry standards are maintained. We also have a wider role to play in promoting better forest stewardship in all forests.

Following feedback from FSC International the members of the UK Woodland Assurance (UKWAS) Working Group worked to achieve consensus on a revised pre-approval draft of UKWAS 5 for re-submission to FSC International.

Our Forest Standards Manager met with two group scheme managers and a Forest Management Certificate Holder as well as responding to queries and supporting numerous other Certificate Holders.

FSC UK is funding the Small Woods Association for the provision of advice to woodland owners. They are delivering an advisory service, consistent with the requirements of the UK Woodland Assurance Standard, to small woodland owners in England and Wales.

We continue to support Royal Forestry Society (RFS) Excellence in Forestry Awards, in Durham, sponsoring the award for Small and Farm Woodlands.

We received 17 responses to our consultation on a vision for UK forests.

Priority: Support UK based licence holders to maximise the demand for FSC products

Supporting certificate holders and retailers to maximise the market for FSC products is stated as one of the means by which we meet our charitable objectives.

It is essential that the relationship we have with our licence holders is proactively managed and that we support those companies committed to the FSC system.

Certificate Holder retention for the period remains high at 92.6%.

During the reporting period, 16 new FSC promotional licence agreements were issued, and the number of promotional licences managed by FSC UK increased to 126. The roll out of the new pricing model for the Annual Service Fees associated with FSC promotional licences continue. The work to support our promotional licence holders to use our trademarks can significantly increase our reach and help to embed FSC commitments within the companies themselves. Specification of FSC-certified and labelled products is also a driver for FSC certification through retailer supply chains.

Online training for Certificate Holders and Promotional Licence Holders continues to be popular, with 563 registrants during the year.

Our monthly Forest Matters newsletter was sent to UK based licence holders and other subscribers and new 'Bad puns; Great forests' posters designs were made available to licence holders and printed versions included in welcome packs.

FSC UK's Trademark Enforcement Officer resolved/closed 361 trademark violation cases.

Priority: Promote the FSC system, FSC certification and the specification of FSC-certified products

As a strong market country, the UK can have a significant impact on uptake on FSC certification of forests globally by driving demand for certification and certified products throughout the supply chain. Raising public awareness of FSC and, in turn, driving consumer demand is one aspect of this, but FSC UK recognises that this can be best achieved in conjunction with businesses and NGOs. In many cases, it is the procurement policies of retailers and other businesses and organisations that creates the demand rather than the consumer and emphasis will be placed on this work.

Page 4

Ephesea UK

Report of the Trustees for the Year Ended 31 March 2024

Our Forest Matters newsletter included case studies from Kent Brushes, Lakeland Footwear, Interface NRM, Cheeky Panda, Step One, Flexi-Hex, Duni, Spear and Jackson, Daler Rowney, The Eco-Friendly Card Co, Progress Packaging, Tippaws, Stag Print and TJ Books. A social media competition with Westland Horticulture was also promoted in Forest Matters.

An omnibus survey of UK consumers was commissioned and carried out in March. Key results include logo recognition/awareness of 79% (up from 77% in 2023), with 29% of respondents (up from 25% in 2023) stating that they also knew what the logo means. Purchase preference also increased from 71% to 79%, with 38% (up from 30% in 2023) stating that they were very likely to choose an FSC-certified product over a non-FSC-certified product.

FSC Forest Week took place between 23rd and 29th September. 168 UK organisations registered for and were sent the Forest Week Toolkit, including 8 promotional licence holders and 4 non-licence holders (non-commercial, educational), the remainder were chain of custody certificate holders.

We launched an FSC Christmas card pledge campaign on social media to encourage followers to pledge to choose FSC-certified cards to spread forest friendly Christmas cheer.

Our Executive Director presented in the Bathroom Zone of the Installer Show, encouraging installers to specify FSC certified products and to Sainsbury's staff as part of their Continuous Professional Development sustainability day. Our Forest Standards Manager presented to the Highlands and Islands Women in Property group with a follow up supply of useful links to FSC certified products and support documents made.

We continue to work with companies on a one-to-one basis on their specification/procurement policies and implementation of these.

Page 5

Ephesea UK

Report of the Trustees for the Year Ended 31 March 2024

FINANCIAL REVIEW Income

Over the 2023-24 financial year, income exceeded expenditure by £65,961, with a further £20,185 net gain on investments. We started the year with an opening balance from the previous period of £1,019,480 and ended with a carry-forward of £1,105,626.

Trademark licensing revenue continued to increase, providing £121,764 of income during the reporting period. Membership income accounted for a further £37,614, a slight decrease from the previous year.

Most of the income is received under the Principal Cooperation, Service and Licence Agreement - the Activity Compensation Fee (ACF) - with FSC Global Development. The ACF income has, to date, been based primarily on a formula linked to the Annual Administration Fee charged to certified companies in the UK. Strategic funding is also allocated for specific projects. Some of these projects are managed by other FSC National Offices and the funding is received and administered by them. The income received indirectly from FSC Global Development through this strategic funding is included within the total ACF figure. The ACF model will be changing in 2025, and this is likely to result in a reduced allocation for Ephesea UK.

Expenditure

Expenditure was higher this year compared with last year (£551,666 compared with £480,907) primarily due to the increased size of the staff team as we seek to meet the growing demands on the organisation. The Board of Trustees recognises that it should be investing the resources of the charity to meet the charitable objectives. An Impact Investment Fund will be launched in 2024 to support projects that help deliver FSC's mission and this is expected to lead to increased expenditure in the coming years.

Investments

£400,001 was transferred to Rathbones Investment Management in December 2022. Investments totalling £508,145 were purchased during the period to 31 March 2024. Of these, investments totalling £299,593 were sold showing a £968 profit. The remaining investments were revalued at £427,275, resulting in a £18,127 gain. The balance at 31 March, held in cash, amounted to £1,024. Interest and dividend income for the period totalled £7,044.

Investment policy and objectives

The financial objective of the investments is to produce some financial return, within an acceptable level of risk and in line with the agreed ethical policy, to help deliver the objectives of the charity.

The trustees of Ephesea UK have accepted a low to medium degree of risk for their investment portfolio and will ensure that their ability to meet future planned expenditure is not compromised by over-investment.

The responsibility for the day to day management of the charity's investment assets lies with the Rathbones Greenbank who have discretionary management powers with effect from 18 December 2022 under the investment policy agreement which was established by the charity on 15 June 2022.

A sub-committee of the Board of Trustees has been established to advise the wider Board on investments. Decisions on investments are undertaken by the Board based on input from the sub-committee.

Reserves Policy

The Board of Trustees considers the charity's requirements for reserves in light of the main risks to the organisation. A policy has been established whereby the unrestricted funds not committed or invested in tangible fixed assets held by the charity should be equivalent to 6 months' of expenditure.

Page 6

Ephesea UK

Report of the Trustees for the Year Ended 31 March 2024

The reserves are needed to meet the working capital requirements of the charity and, in the worse-case scenario, to cover the cost of closing the charity. The Trustees are confident that the charity would be able to continue at worthwhile activity levels in the event of a temporary significant drop in funding and that the estimated cost of closing the charity does not exceed 50% of the reserves.

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document

Ephesea UK, incorporated in England & Wales on 15 January 2009, is a private company limited by guarantee (as defined by the Companies Act 2006), which is also an association of members registered as an incorporated charity (for simplicity, this report refers henceforth to the company as 'the charity'). The charity is governed under Memorandum and Articles of Association that sets out its objects and powers. These were updated at the 2017 Annual Members' Meeting in agreement with the membership.

Membership of the charity is open to individuals and organisations who are:

Recruitment and appointment of new trustees

The charity is managed by a board of trustees of no less than four and no more than twelve. At least three trustees have to be members of the Forest Stewardship Council AC and ordinarily based or resident in the UK. The aim shall be to achieve chamber balance with at least one trustee and, normally, no more than four trustees representing each of the three chambers. However, the board reserves the right to increase the maximum to five in any one chamber where the individuals bring specific skills and expertise required by the Charity

Trustees are either proposed or volunteer. They may sit on the board until the next annual members' meeting, when they have to seek election from the membership. A trustee pack, outlining trustee responsibilities, is given to all new trustees. Once elected, a trustee may sit on the board for a term of 3 years (from the date of joining the board) before seeking re-election. There is no limit to the number of terms for which a trustee may seek re-election. Re-elected trustees serve a term of 3 years from the date of re-election.

Trustees may elect from amongst themselves a chair, a vice chair and a treasurer.

Decision Making and Reporting

The board of trustees met three times during the year. Board meetings are attended by the Executive Director and, by invitation, members of staff. Between meetings, the Executive Director provides trustees with an Interim Report by email. Conference calls between some or all of the trustees may be arranged at any time. Finally, working groups of a small number of trustees can be put together to address particular issues.

Day to day management of the charity falls to the Executive Director, supported by the permanent staff. The Executive Director is responsible for ensuring that the charity delivers a range of services that meet its Objects and Strategic Priorities.

Wider network

The charity (under the title of FSC United Kingdom) is an accredited National Office of the wider, international FSC network. The charity receives an annual Activity Compensation Fee (ACF) from FSC Global Development Gmbh. The ACF is paid to FSC National Offices that have agreed and signed a valid Principle Cooperation, Service and License Agreement with FSC Global Development. In the reporting period over 74% of income was generated via the ACF.

The charity participates in FSC's European and Global networks and supports the Global Strategy. FSC International developed its global plan for 2020-2026. The FSC UK strategic plan has been developed in the context of FSC's global vision and mission and our own charitable objectives

Related parties

The charity has contractual relationships and/or memoranda of understanding with some organisations to facilitate cooperation in the pursuit of its charitable objectives and guard against misunderstandings over areas of common interest.

Page 7

Ephesea UK

Report of the Trustees for the Year Ended 31 March 2024

REFERENCE AND ADMINISTRATIVE DETAILS Registered Company number 06792524 (England and Wales)

Registered Charity number 1130203

Registered office

The Billiard Room Town Hall Great Oak Street Llanidloes Powys SY18 6BN

Trustees

J B Kirkpatrick (Chair) M Bekin (Vice-Chair) M C Poole (Treasurer) S Jennings H Kwisthout C McDermott J G Tewson (resigned 27.3.24) H van Hensbergen Dr O Davies (appointed 27.3.24)

Auditors

Morgan Griffiths LLP Chartered Accountants Statutory Auditor Cross Chambers 9 High Street Newtown Powys SY16 2NY

Bankers

Co-Operative Bank plc PO Box 101 1 Balloon Street Manchester M60 4EP

Management Team

Rosie Teasdale (Executive Director) Beth Bennett (Business Development Manager) Tallulah Chapman (Communications Manager) Rachel Hembery (Operations Manager) Andrew Sharkey (Forest Standards Manager) Amy Willox (Outreach Manager - Forests & Ecosystem Services)

Charity Name

The charity is also known as Forest Stewardship Council® (FSC®) United Kingdom (UK) and permutations thereof.

Page 8

Ephesea UK

Report of the Trustees for the Year Ended 31 March 2024

STATEMENT OF TRUSTEES' RESPONSIBILITIES

The trustees (who are also the directors of Ephesea UK for the 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 Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".

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 the income and expenditure, of the charitable company for that period. In preparing those financial statements, the trustees are required to

The trustees are responsible for keeping proper accounting records which disclose with 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 responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as the trustees are aware:

This report has been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies.

Approved by order of the board of trustees on ............................................. and signed on its behalf by:

................................................................. M C Poole - Trustee

Page 9

Report of the Independent Auditors to the Members of Ephesea UK

Opinion

We have audited the financial statements of Ephesea UK (the 'charitable company') for the year ended 31 March 2024 which comprise the Statement of Financial Activities, the Balance Sheet, the 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 (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The trustees are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Report of the Independent Auditors 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 information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

Page 10

Report of the Independent Auditors to the Members of Ephesea UK

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Trustees.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the Statement of Trustees' Responsibilities, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Page 11

Report of the Independent Auditors to the Members of Ephesea UK

Our responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Independent Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

-the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

-we identified the laws and regulations applicable to the charitable company through discussions with management, and from our knowledge and experience of the charity sector;

-we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the charitable company, including relevant legislation such as the Companies Act 2006, taxation legislation, employment, environmental and health and safety legislation; -we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting relevant correspondence.

We assessed the susceptibility of the charitable company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

-making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;

-considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we: -performed analytical procedures to identify any unusual or unexpected relationships; -reviewed nominal ledgers and tested journal entries reports to identify unusual transactions;

-assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

-agreeing financial statement disclosures to underlying supporting documentation;

-reading the minutes of meetings of those charged with governance;

-reviewing correspondence with HMRC.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Independent Auditors.

Page 12

Report of the Independent Auditors to the Members of Ephesea UK

Use of our report

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Thomas Landers BA FCA (Senior Statutory Auditor) for and on behalf of Morgan Griffiths LLP Chartered Accountants Statutory Auditor Cross Chambers 9 High Street Newtown Powys SY16 2NY

Date: .............................................

Page 13

Ephesea UK

Statement of Financial Activities (Incorporating an Income and Expenditure Account) for the Year Ended 31 March 2024

Notes
INCOME AND ENDOWMENTS FROM
Donations
2
Charitable activities
5
Forestry
Activity compensation fee
Membership
Other trading activities
3
Investment income
4
Total
EXPENDITURE ON
Charitable activities
6
Forestry
Licence holder support
Stakeholder Engagement
Promoting FSC
Value of Forests
Total
Net gains on investments
NET INCOME
RECONCILIATION OF FUNDS
Total funds brought forward
TOTAL FUNDS CARRIED FORWARD		 Unrestricted
funds
£
60
636
439,907
37,614
123,169
16,241
617,627
85,528
211,539
63,336
145,859
45,404
551,666
20,185
86,146
1,019,480
1,105,626		 Restricted
funds
£
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 31.3.24
Total
funds
£
60
636
439,907
37,614
123,169
16,241
617,627
85,528
211,539
63,336
145,859
45,404
551,666
20,185
86,146
1,019,480
1,105,626		 31.3.23
Total
funds
£
60
1,241
427,963
37,653
82,516
7,314
556,747
75,350
185,170
70,599
118,615
31,173
480,907
309
76,149
943,331
1,019,480

The notes form part of these financial statements

Page 14

Ephesea UK

Balance Sheet 31 March 2024

Notes
FIXED ASSETS
Tangible assets
13
Investments
14
CURRENT ASSETS
Debtors
15
Cash at bank and in hand
CREDITORS
Amounts falling due within one year
16
NET CURRENT ASSETS
TOTAL ASSETS LESS CURRENT
LIABILITIES
NET ASSETS
FUNDS
19
Unrestricted funds
TOTAL FUNDS		 31.3.24
£
6,894
427,275
434,169
194,658
638,918
833,576
(162,119)
671,457
1,105,626
1,105,626
1,105,626
1,105,626		 31.3.23
£
5,214
199,506
204,720
164,188
797,008
961,196
(146,436)
814,760
1,019,480
1,019,480
1,019,480
1,019,480

These financial statements have been prepared in accordance with the provisions applicable to charitable companies subject to the small companies regime.

The financial statements were approved by the Board of Trustees and authorised for issue on ............................................. and were signed on its behalf by:

............................................. M C Poole - Trustee

The notes form part of these financial statements

Page 15

Ephesea UK

Cash Flow Statement for the Year Ended 31 March 2024

Notes
Cash flows from operating activities
Cash generated from operations
1
Net cash provided by operating activities
Cash flows from investing activities
Purchase of tangible fixed assets
Purchase of fixed asset investments
Sale of fixed asset investments
Interest received
Net cash used in investing activities
Change in cash and cash equivalents
in the reporting period
Cash and cash equivalents at the
beginning of the reporting period
Cash and cash equivalents at the end
of the reporting period		 31.3.24
£
38,640
38,640
(5,387)
(508,145)
300,561
16,241
(196,730)
(158,090)
797,008
638,918		 31.3.23
£
86,916
86,916
(1,950)
(349,197)
150,000
7,314
(193,833)
(106,917)
903,925
797,008

The notes form part of these financial statements

Page 16

Ephesea UK

Notes to the Cash Flow Statement for the Year Ended 31 March 2024

1.
RECONCILIATION OF NET INCOME TO NET CASH FLOW
Net income for the reporting period (as per the Statement
Financial Activities)
Adjustments for:
Depreciation charges
Gain on investments
Interest received
Increase in debtors
Increase in creditors
Net cash provided by operations
2.
ANALYSIS OF CHANGES IN NET FUNDS
Net cash
Cash at bank and in hand
Total		 FROM OPERATING ACTIVITIES
31.3.24
31.3.23
£
£
of
86,146
76,149
3,707
2,398
(20,185)
(309)
(16,241)
(7,314)
(30,470)
(27,283)
15,683
43,275
38,640
86,916
At 1.4.23
Cash flow
At 31.3.24
£
£
£
797,008
(158,090)
638,918
797,008
(158,090)
638,918
797,008
(158,090)
638,918

The notes form part of these financial statements

Page 17

Ephesea UK

Notes to the Financial Statements for the Year Ended 31 March 2024

1. ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements of the charitable company, which is a public benefit entity under FRS 102, have been prepared in accordance with the Charities SORP (FRS 102) 'Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2015)', Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Income

All income is recognised in the Statement of Financial Activities once the charity has entitlement to the funds, it is probable that the income will be received and the amount can be measured reliably.

Expenditure

Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.

Governance costs

Governance costs are those incurred in connection with the administration of the charity and compliance with constitutional and statutory requirements.

Allocation and apportionment of costs

Support costs have been apportioned to activities based on the apportionment of salary costs.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Fixtures and fittings - 50% on cost and 15% on reducing balance Computer equipment - 33% on cost

Taxation

The charity is exempt from corporation tax on its charitable activities.

Fund accounting

Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.

Restricted funds can only be used for particular restricted purposes within the objects of the charity. Restrictions arise when specified by the donor or when funds are raised for particular restricted purposes.

Further explanation of the nature and purpose of each fund is included in the notes to the financial statements.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Page 18

continued...

Ephesea UK

Notes to the Financial Statements - continued for the Year Ended 31 March 2024

1. ACCOUNTING POLICIES - continued

Pension costs and other post-retirement benefits

The charitable company operates a defined contribution pension scheme. Contributions payable to the charitable company's pension scheme are charged to the Statement of Financial Activities in the period to which they relate.

Operating leases

Costs in respect of operating leases are charged to the statement of financial activities on a straight line basis over the term of the lease.

2. DONATIONS

Donations
3.
OTHER TRADING ACTIVITIES
Trademark Licensing
Training
4.
INVESTMENT INCOME
Deposit account interest
Investment income
5.
INCOME FROM CHARITABLE ACTIVITIES
Activity
Consultancy
Forestry
Activity compensation fee
Activity compensation fee
FSC Membership
Membership		 31.3.24
£
60
31.3.24
£
121,764
1,405
123,169
31.3.24
£
9,657
6,584
16,241
31.3.24
£
636
439,907
37,614
478,157		 31.3.23
£
60
31.3.23
£
82,266
250
82,516
31.3.23
£
7,201
113
7,314
31.3.23
£
1,241
427,963
37,653		 31.3.23
£
7,201
113
7,314
466,857

Consultancy income includes fees paid by FSC for specific services beyond those covered under the Activities Compensation Fee.

The Activity Compensation Fee income includes fees paid for work undertaken by FSC UK on collaborative projects funded by FSC International under the Activity Compensation Fee model.

Page 19

continued...

Ephesea UK

Notes to the Financial Statements - continued for the Year Ended 31 March 2024

6. CHARITABLE ACTIVITIES COSTS

Forestry
Licence holder support
Stakeholder Engagement
Promoting FSC
Value of Forests
DIRECT COSTS OF CHARITABLE ACTIVITIES
Staff costs
Telephone
Postage and stationery
Travel & subsistence
Publications & subscriptions
Recruitment & training
UKWAS subscription
Publicity
Consultancy fees
Sundries
Bad debts
FSC Membership Admin Fee
Sponsorship
Printing
Small Woods project		 Direct
Costs (see
note 7)
£
70,120
165,791
50,649
119,765
39,115
445,440		 Support
costs (see
note 8)
£
15,408
45,748
12,687
26,094
6,289
106,226
31.3.24
£
366,885
763
1,950
14,568
8,213
4,298
5,942
15,758
6,700
297
3,790
5,358
1,700
4,718
4,500
445,440		 Totals
£
85,528
211,539
63,336
145,859
45,404
551,666
31.3.23
£
327,621
435
613
13,042
4,730
3,788
7,889
6,311
15,874
205
3,022
6,976
-
1,030
-
391,536

7. DIRECT COSTS OF CHARITABLE ACTIVITIES

8. SUPPORT COSTS

Management
£
Forestry
13,918
Licence holder support
40,886
Stakeholder Engagement
11,339
Promoting FSC
23,321
Value of Forests
5,620
95,084		 Governance
costs
£
1,490
4,862
1,348
2,773
669
11,142		 Totals
£
15,408
45,748
12,687
26,094
6,289
106,226

Page 20

continued...

Ephesea UK

Notes to the Financial Statements - continued for the Year Ended 31 March 2024

8. SUPPORT COSTS - continued

Activity Basis of allocation Management Salary costs Governance costs Salary costs

9. NET INCOME/(EXPENDITURE)

Net income/(expenditure) is stated after charging/(crediting):

31.3.24 31.3.23
£ £
Auditors' remuneration 4,086 2,990
Depreciation - owned assets 3,707 2,398

10. TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 31 March 2024 nor for the year ended 31 March 2023.

Trustees' expenses

Travel expenses totalling £1,562 (2023 - £652) were paid to 5 (2023 - 4) trustees in the year to 31 March 2024.

11. STAFF COSTS

Year Ended
31.3.24		 Year Ended
31.3.23
£ £
Wages and salaries 361,967 319,880
Social security costs 29,502 26,347
Pensions 21,682 19,127
413,151 365,354
The average number of employees during the period was as
follows:
Licence holder support 4.4 3.8
UK forest standards 0.9 0.9
Stakeholder engagement 0.8 0.8
Core 1.2 1.0
Value of Forests 0.6 0.5
Promoting the system 2.4 2.2
10.3 9.2

The number of employees whose emoluments as defined for taxation purposes amounted to over £60,000 in the period was one (2023 nil).

The charity considers its key management personnel comprise the management team listed on page 8. The total employment benefits including employer pension contributions of the key management personnel for the year ended 31 March 2024 were £236,276 (2023 £219,571).

Page 21

continued...

Ephesea UK

Notes to the Financial Statements - continued for the Year Ended 31 March 2024

12. COMPARATIVES FOR THE STATEMENT OF FINANCIAL ACTIVITIES

There were no restricted funds during the year to 31 March 2022.

13. TANGIBLE FIXED ASSETS

COST
At 1 April 2023
Additions
At 31 March 2024
DEPRECIATION
At 1 April 2023
Charge for year
At 31 March 2024
NET BOOK VALUE
At 31 March 2024
At 31 March 2023		 Fixtures
and
Computer
fittings
equipment
£
£
14,860
30,827
874
4,513
15,734
35,340
12,196
28,277
525
3,182
12,721
31,459
3,013
3,881
2,664
2,550		 Totals
£
45,687
5,387
51,074
40,473
3,707
44,180
6,894
5,214
14.
FIXED ASSET INVESTMENTS
MARKET VALUE
At 1 April 2023
Additions
Disposals
Revaluations
At 31 March 2024
NET BOOK VALUE
At 31 March 2024
At 31 March 2023
There were no investment assets outside the UK.
Cost or valuation at 31 March 2024 is represented by:		 Listed
investments
£
199,506
508,145
(299,593)
19,217
427,275
427,275
199,506
Valuation in 2023
Valuation in 2024
Cost		 Listed
investments
£
(136)
19,353
408,058
427,275

Page 22

continued...

Ephesea UK

Notes to the Financial Statements - continued for the Year Ended 31 March 2024

15. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.3.24
£
Trade debtors
54,808
Prepayments and accrued income
139,850
194,658
16.
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.3.24
£
Trade creditors
5,972
Social security and other taxes
21,947
Deferred income
99,908
Accrued expenses
34,292
162,119
17.
LEASING AGREEMENTS
Minimum lease payments under non-cancellable operating leases fall due as follows:
31.3.24
£
Within one year
9,650
18.
ANALYSIS OF NET ASSETS BETWEEN FUNDS
31.3.24
Unrestricted
Restricted
Total
funds
funds
funds
£
£
£
Fixed assets
6,894
-
6,894
Investments
427,275
-
427,275
Current assets
833,576
-
833,576
Current liabilities
(162,119)
-
(162,119)
1,105,626
-
1,105,626
19.
MOVEMENT IN FUNDS
Net
Transfers
movement
between
At 1.4.23
in funds
funds
£
£
£
Unrestricted funds
General Fund
1,014,266
89,853
(5,387)
Capital Fund
5,214
(3,707)
5,387
1,019,480
86,146
-
TOTAL FUNDS
1,019,480
86,146
-

Page 23

continued...

Ephesea UK

Notes to the Financial Statements - continued for the Year Ended 31 March 2024

19. MOVEMENT IN FUNDS - continued

Net movement in funds, included in the above are as follows:

Unrestricted funds
General Fund
Capital Fund
TOTAL FUNDS		 Incoming
resources
£
617,627
-
617,627
617,627		 Resources
expended
£
(547,959)
(3,707)
(551,666)
(551,666)		 Gains and
losses
£
20,185
-
20,185
20,185		 Movement
in funds
£
89,853
(3,707)
86,146
86,146

Comparatives for movement in funds

Unrestricted funds
General Fund
Capital Fund
TOTAL FUNDS		 At 1.4.22
£
937,669
5,662
943,331
943,331		 Net
movement
in funds
£
78,547
(2,398)
76,149
76,149		 Transfers
between
At
funds
31.3.23
£
£
(1,950)
1,014,266
1,950
5,214
-
1,019,480
-
1,019,480

Comparative net movement in funds, included in the above are as follows:

Unrestricted funds
General Fund
Capital Fund
TOTAL FUNDS		 Incoming
resources
£
556,747
-
556,747
556,747		 Resources
expended
£
(478,509)
(2,398)
(480,907)
(480,907)		 Gains and
losses
£
309
-
309
309		 Movement
in funds
£
78,547
(2,398)
76,149
76,149

Page 24

continued...

Ephesea UK

Notes to the Financial Statements - continued for the Year Ended 31 March 2024

19. MOVEMENT IN FUNDS - continued

A current year 12 months and prior year 12 months combined position is as follows:

Unrestricted funds
General Fund
Capital Fund
TOTAL FUNDS		 At 1.4.22
£
937,669
5,662
943,331
943,331		 Net
movement
in funds
£
168,400
(6,105)
162,295
162,295		 Transfers
between
funds
£
(7,337)
7,337
-
-		 At
31.3.24
£
1,098,732
6,894
1,105,626
1,105,626

A current year 12 months and prior year 12 months combined net movement in funds, included in the above are as follows:

Incoming
Resources
resources
expended
£
£
Unrestricted funds
General Fund
1,174,374
(1,026,468)
Capital Fund
-
(6,105)
1,174,374
(1,032,573)
TOTAL FUNDS
1,174,374
(1,032,573)		 Gains and
losses
£
20,494
-
20,494
20,494		 Movement
in funds
£
168,400
(6,105)
162,295
162,295

20. RELATED PARTY DISCLOSURES

There were no related party transactions for the year ended 31 March 2024.

Page 25

Ephesea UK

Detailed Statement of Financial Activities for the Year Ended 31 March 2024

31.3.24
£
INCOME AND ENDOWMENTS
Donations
Donations
60
Other trading activities
Trademark Licensing
121,764
Training
1,405
123,169
Investment income
Deposit account interest
9,657
Investment income
6,584
16,241
Charitable activities
Consultancy
636
Activity compensation fee
439,907
FSC Membership
37,614
478,157
Total incoming resources
617,627
EXPENDITURE
Charitable activities
Wages
321,194
Social security
26,446
Pensions
19,245
Telephone
763
Postage and stationery
1,950
Travel & subsistence
14,568
Publications & subscriptions
8,213
Recruitment & training
4,298
UKWAS subscription
5,942
Publicity
15,758
Consultancy fees
6,700
Sundries
297
Bad debts
3,790
FSC Membership Admin Fee
5,358
Sponsorship
1,700
Printing
4,718
Small Woods project
4,500
445,440		 31.3.23
£
60
82,266
250
82,516
7,201
113
7,314
1,241
427,963
37,653
466,857
556,747
286,642
23,780
17,199
435
613
13,042
4,730
3,788
7,889
6,311
15,874
205
3,022
6,976
-
1,030
-
391,536

This page does not form part of the statutory financial statements

Page 26

Ephesea UK

Detailed Statement of Financial Activities for the Year Ended 31 March 2024

31.3.24
£
Support costs
Management
Wages
40,773
Social security
3,056
Pensions
2,437
Rent, rates and water
10,678
Telephone
1,657
Postage and stationery
2,538
Sundries
641
Travel & subsistence
5,593
Training & recruitment
1,192
Book-keeping and payroll
925
Repairs & renewals
241
Bank charges
757
Subscriptions
6,090
IT Support
5,805
Consultancy
1,875
HR Support
1,344
Home working allowance
3,051
Investment management fees
1,710
Printing
1,014
Fixtures and fittings
525
Computer equipment
3,182
95,084
Governance costs
Trustees' expenses
1,562
Auditors' remuneration
4,086
Insurance
2,950
Management meeting expenses
2,544
11,142
Total resources expended
551,666
Net income before gains and losses
65,961
Realised recognised gains and losses
Realised gains/(losses) on fixed asset
investments
968
Net income
66,929		 31.3.23
£
33,238
2,568
1,928
10,604
1,479
3,488
1,390
8,205
1,719
474
1,146
1,258
2,189
6,032
-
1,270
2,020
-
-
463
1,935
81,406
652
2,990
2,745
1,578
7,965
480,907
75,840
445
76,285

This page does not form part of the statutory financial statements

Page 27