DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E EUROPEAN COUNCIL ON FOREIGN RELATIONS ecfr.eu ECFR Report and Financial Statements For the Year Ended 31 December 2023 Charity Number: 1143536 Company Registration Number: 07154609
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E Contents Pages Legal and administrative inforniation Rèport of th• Dirèctors Ind•pand•nt Auditor's R•port ststement of Flnanclal Actlvltles 10 Balancè Sh•at 11 Cashflow Statement 12 Note to the Flnanclal Statements 13-23
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Legal and administrative information Governlng Document.. Memorandum and Articles of Association Registered Offices.. First Floor 10 Queen Street Pla London EC4R IBE TrusteeslDirectors'. Franzi5ka Brantn8r Ir85igned 1 March 20231 lan Clarkson Lykke Friis Teresa Gouveia Adam Lury lappointed 1 January 20231 Chair of Board of TrusteeslDirectors Lykke Friis Chair of Executive Committee lan Clarkson Kèy Managemènt Pèrsonnel.. Programme Director Deputy Diredor- Operations Mark Leonard Alb8 Lamb8rti Auditors.. Az8ts Audit S8rvic85, 2" Floor. Regis House. 45 King William St, London, EC4R 9AN Bankers= Barclays Bank 2 Victoria Street London SW1 Solicitors.. Bates Wells & Braithwaite 2-6 Cannon Street London EC4M 6YH
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Report of the Directors For the year ending 31 December 2023 The Directors, who are also Trustees for the purposes of company law, present their report together with the financial statements f(>r the year ended 31 December 2023. The financial statements have been prepared in accordance with the accounting policies set out in note 1 t() the financial siatements and comply with the Charily's memorandum and articles ol association, the Charities Act 2011, the Companies Act 2006 and the Accounting and Reporting by Charities.. Statement of Recommended Practice applicable to charities preparing their accounts in accordan with the Financial Reporting Standard applicable in the UK and Republic ol Ireland IFRS1021 issued in October 2019. Objectives and Activities The objective of the European Council on Foreign Relation5 la150 "Charity" "Company") 15 to conduct research and promote informed debate across Europe on the development of a coherent and effective European values-based foreign policy. First launched in October 2007, the Charity is part of the first p8n-Europe8n think-tank, comprised of a Group of ECFR 8ntiti85 (also 'ECFR"I with pres8nce in s818Cted EU m8rnb8r stat85. ECFR has developed a strategy with three distinctive elements that define its activities.. A dlstlnctlve research and pollcy development process. ECFR has brought together a team ol distinguished researchers and practitioners from all over Europe to advan ils objectives through innovative projects with a pan- Europ88n focus. ECFR'S 8Ctiviti8s includ8 primary r858arch, publications of policy reports, private me8ting5 and public debates,'friends of ECFR, gatherings in EU capitals and outreach to strategic media outlets. A pan-European Council. ECFR ha5 brought together a distinguished Council of over 330 Mernber5 decision makers, thinkers and business executives from across Europe- which meets once a year as a full body. Through geographical and thematic task forces, mernbers provide ECFR staff with advice and feedback on policy ideas and h8lp with ECFR'5 activities within th8ir own countri85. A physical presence in the main EU member states. ECFR. uniquely arnong European think-tanks, has offices in Berlin, London, Madrid, Paris, Rome, Sofia and Warsaw. The offices are platforms for research, debate, advocacy and communications. Th8 Directors confirrn that th&y have r8f8rr8d to the guid8nC8 provid8d by th8 Charity Commission on public b8nefit when reviewing the Company's aims and objectives and in planning future activities. The Charity, together with its sister organizabons and through their cornbined pan-European research and outreach work supports European governments. foreign policy debate and diplotnacy. Achievements and Perfomiance For 2023. our work continued to focus on creating a more effective, ambitious, and cooperative European foreign policy. Within our six research programs IAfrica, Middle East and North Africa. Asia and China, Wider Europe, United States and European Powerl. our efforts focused on gaining an analylical understanding of Europe's foreign policy dilemmas. recommending innovative solutions, and promoting those solutions through publications, convening conferences, media appearances, and other forms of advocacy. In 2023, much of this work focused on the current and future impads and implications of the wars in Ukraine and G8za on European foreign policy and Europ&an integration. Prornin8nt in this ar88 was th8 work of ECFR'S Midd18 East and North Afri¢8 Prograrnrne as well the Security and Defense. Climate and Energy and Technology Initiatives. whose highlights included.. The MENA Forutm that took place in Geneva in NoverntEr 2023 and asstLiated activities launched after the Hamas 8tta¢k on 7 Ortober., and The Kyiv initiative 8nd th8 Displ8C8d Voic85 project
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Report of the Directors For the year ending 31 December 2023 Achievements and Performance- continued Outside of the conflicts, many other areas of policy were also tackled by ECFRS Programmes. Highlights for tt)e year included.. Two papers focusing on the impacts of changes in the world order'."Strategic interdependence- Europe's new approach in a world of middle powers" and "The world is changing- and not in Europe's favor.,. The launch of ECFR'S US Programme., and A number ol public opinion polling exercises that spawned a number of key publications including Living in an la carte worfd.. What European policyrnakers should learn from global public opinion. We supported our activities through 184 commentaries, 36 policy briefs, 5 web specials. 67 podcast episodes and 32 YouTube videos. The impact of this work is reflected in over 14,000 rnedia mentions in over 700 leading media outlets. In 2023. ECFR Group again showed its prowess when it comes to str8tegi¢ convening- Mrtually or in-person. Across its five Programs and sev8n Nation81 Offices, it organized some 36 virtual events and 137 in-person events. EGFR'S Annual Council Meeting took place in June 2023 in Stockholm. Over 200 high level guests. including 195 Council rnembers attended the event which comprised five public panel discussions and eight Policy Salons where the r8mific8tions of the war in Ukraine and EU 8nl8rgement were debated. Financial Review Results for the year Total incorning resources for the year ending 31st December 2023 were É7.69m and total resources expended were .68rn, resulting in a surplus for the year of É66k before currency losses. The Open Society Foundation piovided an unrestricted grant of É3.8m to support ECFR. Restricted donations of more than É25Ok were received from the Open Society Foundation. the Norwegian Ministry of Foreign Affairs and the Swedish Ministry of Foreign Affairs. The Charity r8-grant8d in total E2.7m to oth8r ECFR entities and rec8iV8d É108k frotn oth8r ECFR 8ntities. Reserves The Charity's reserves policy is to build sufficient reserves to meet the identified risks assessed each year. The aim is to invest in reserves until they cover at least four months operational running costs so thal organisational liabilities to staff and other stakeholders can be mel at all times. The Charity ended 2023 with a final deficit including of currency gains of É118k. As a result, unrestricted reserves as of 31 Decetmber 2023 Stand at É2.95rn, in excess of 10 months of ECFR operational running costs. The Board has approved a breakeven budget for 2024 for ECFR lo maintain strong reserves. Beyond 2024 the Board is committed to ntinue break-even to surplus budgets in line with the ststed policy. Plans for the Future ECFR'S workplan for 2024 tuns under the banner"Europe in 2024- De-risking between Putin and Trump. Our priorities in the workplan are". Strengthenlng Eu's relevance In Its Eastern nelghbourhood.. ECFR will continue to analyse the developments of the war in Ukraine and their mediurn to long term implications for the countries of the region, which is witnessing renewed conflicts, e.g. in the South Caucasus and potentially the Westem Balkans. 11 will look at the instrurnents the EU can Ljse to stabilise the region and enhance its geopolitical prtsfile, and specifically at the ways to adapt the enlargement policy to this new geopolitical landscape. R8thinking Russia.. ECFR facilitates InfoatiVe discussions between Europeans and Americans on Russia and Russia policy and continues to produce analysis about developments in Russia, the impact of the war, the state ol its economy and foreign policy. Thè Mlddla East Batwa•n War and P•aca.' After Hamas's attacks and the start ol the war in Gaza ECFR explores European interest in tre region and how can European countries can support pathways to wider sustainable serity and st8bility in the Middle E85t. Engaging with Africa's evolving position towards Global Order.. ECFR enhances research and convening on the AfricalEurope deliberations of the wider global thinking on global order. The focus will lie on building Africa as an important ally in a changing global older by advocating foi a more dynamic and nuanced approach on the European side to alliance-building with Africa in global order than a simple binary offer.
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Report of the Directors For the year ending 31 December 2023 Plans for the Future - continued Chlna De.Rlsklng Agenda.. In this thematic area, the ECFR will conduct research and advocacy from the intemal dimension in China Irisk factors emanating from intr8-paty dynamics and policy changes) to the challenges in the broader Eu-china agend8 including European respons85 to China-Russia r8lations, China's n8w ro18 as a s8curity actor and the Chinese green techldecarbonizalion agenda Indo-Pa¢ifi¢ Boost= In this Ihernatlc 8rea, ECFR will continue to enhance research and convening on the politi¢81 and economic developments in the Indo-Pacific region, with a specific locus on EU-India cooperati()n and enhanung EU- Japan exchange. Geoeconomics.. Through its Geoeconotnics work in 2024, ECFR will examine how geopolitical contests reshape economic and financial flows, identifying the markers of economic fragmentation in trade, technology, and financial flows. It will look at how Europe can develop a toolkit for de-risking from China. taking into account the unintended nsequences of derisking and its imp8Ct on Europg's competitiveness. Cllmate and energy.. Through its Clirnate and Energy work in 2024, ECFR will unpack the new dimate geopolitics to infonn the Eu's approach to climate in a weaponised environment. ECFR will also seek to develop a blueprint for more geopolitical climate diplomacy under the new EU institutions, exploring how such diplomacy should adapt to build up strategic Interdependen in the field ol climate. Technolo9y= Through its T8chnology work, ECFR will map countries that the EU should build t8ch 811ianc851coalitions with and on which issues. It wll explore how the EU can leverage the multilateral framework to advance its vision for an open. free, secure, and a¢ssible internel and a rights-based approach to technology govemance and developrnenl. The Initiative will also explore how the EU can meet the challenges and harness the opportunities of emerging disruptive technologies such as Al and quantum computing. Defen¢e, Se¢urity, and Te¢hnology'. ECFR will 8xtract the lessons learned on th& new 8nd extensive use of emerging arid disruptive technologie5 (unmanned systems, cyber, Al, 5pacel and the renewed irnportance of air and missile defence in the war in Ukraine and in the Gaza conflict. It will locus On preparing Europeans to boost their defence capabilities to meet an increasing number of conflicts in the neighbourhood. Multllaterallsm: With Europeans increasingly struggling to achieve their objectives via the international system, ECFR will map which mults'lateral institutions can deliver on different global challenges and how Europeans can best navigate the multilateral system to protect their interests and values. Data and polllng: Through continued public opinion polling, ECFR will unpack the political consensus lor EU foreign policy approaches. ensuring the priorities and sensitivities of the European public are taken on bo8rd. In addition to this, continued polling in non-EU countries will enable ECFR to chart global public opinion on how Europe should adapt to a post-westem world.
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Report of the Directors For the year ending 31 December 2023 Structure. Governance and Management Constltutlon The Charity, a UK company limited by guarantee inctsrporated on 11 February 2010, is a not-for-prtsfit organisation which obtained UK charitable status on 24 August 2011. The liability of members is limited to £1. The Company is gov&m8d by its M8morandurn & Articles of Association, as last r8vis8d and adopted on 16 August 2011. The objects of the Company are Ihe advanment of education in the field of foreign policy and related areas by undertaking and promoting research for the public benefit and publishing the useful results thereor. ECFR is made up of the UK Company and live legal ECFR entities established in Germany, France, Spain and Italy under the common control and unified management of the German ECFR e.V. Board of Trustees. Governance The Charity is govemed by a Board of TrusteeslDireclors, which meets the times a year. TrusteeslDirectors are recruited by invitation based on the skills, exp8rienoe and influen¢9 th8y h8vg In the European political ar8n8. At the end of 2023 the Board was composed of Lykke Friis, lan Clarkson, Adam Lury and Teresa Gouveia. The Board is supported by an Executive Commrttee which meets quarterly and is composed of three or four Board rnembers. This Cotmrnittee has been delegated responsibility for overseeing the adrnini5tiative and finanaal governance of the Charity on behalf ol the Board, whilst noting that the Board retains final responsibility for the perf0mlan of that delegated authority. Its decisions and recornmendations are reported to the Board so as to ensure the full Board can continue to dihrg8 Its OV8r811 r8sponsibility. All members of the Board give their time freely and no board members received remuneration in the year. Details of expenses reimbursed to trustee5 ale disclosed in note 14. There are no related party tr8n58Ctions. Key management personnel Th8 tnanagem8nt of the Charity is de18gat8d to th8 Director and through hirn to the m8rnb8r5 of the Senior m8nag8tll8nt team. Remuneration lor the Director is reviewed annually and set by the Board. Remuneration for senior management and the rest of the staff team is set by the Director. PrfncSpal rlsks and uncertaSntles The Board of Directors is responsible for ensuring that there are effective and adequate risk management and intemal control systems in place to manage the rnajor risks to which the Charity is exposed. It discharges this respon5ibilty through its review ol the effectiveness ol the Charity's risk management framework as part ol ECFR'S risk management framework. This is designed to support informed decision-rnaking regarding the risks that affect ECFR'S and the Charity's performance and their ability to achieve their objectives. It also provides for a consistent approach to identifying. asse551ng and dealing with the risks facing ECFR and the Chaiity so as to ensure that they do not exceed the level of risk ECFR and the Charity are willing to assume. It should be noted that the framework is designed to manage, rather than to eliminate, the risks to ECFR'S and the Gharily's objectives and to provide reasonable, but not 8bsolule, assurance against material misstatement or loss. The Charity board together with the senior management team have reviewed the risks faced by the Charity and updated the risk register to capture and monitor all risks identified. The key risks have been assessed as.. Loss of key Trustees Loss of key staff rnembers Risks to the organisation arising frorn ryber-*t8cks and loss of key data Raising insufficient funds to cover costs Actions taken to mitigat8 the risks associated with loss of key truste85 includ&s activ8 r8cruittnent of trustees with the right skillset to support the Charity's mission. Loss of key staff members is being mitigated through the annual performance review and objective setting process, transparent staff policies, and active line management combined with regular cornmunioation with staff. l.T. security risks are being 8ddress8d through related investments in h8rd- 3nd software, dak back-up routines and staff training. Actions taken to mitigate the risks associated with funding include close rnonitoring olfundraising strategy and progress. diversifying sources of funding to include a wider range of donors. seeking multi-year partnerships, and maintaining good ielations with cuirent major funders.
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Report of the Directors For the year ending 31 December 2023 Statement of Directors. responsibilities The Directors are responsible for preparing the Report of Director5 and the financial staternents in accordance with 8ppli¢able law, UK accounting st8nd8rds and UK GAAP. Cotnpany law require5 the Directors to prepare financial statetnents for each financi81 year, which give a true and fair view of the state of affairs of the charitable company and of incoming resourtss and application of resourees, including the income and expenditure of the charitable company for that period. In preparing these financial statements, the Directors are required to". Select suitable accounting policies and then apply them consistently Observe the rnethods and principle5 In the charities SORP IFRS 1021 Make judgements and accounting estirnates that ale reasonable and prudent State whether applicable UK accounb.ng standards have been followed, subject to any material departures disclosed and explained in the financial statements Prepare the financial statements on the going concem basis unless it is inappropriate to presume that the charitable cornpany will continue in operation. The Directors are responsible for keeping adequate accounting e0rd$ that are sufficient to show and explain the company's tiansactions and disclose with reasonable accuracy at any ts.me the financial posits.on of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps lor the prevention and detection of fraud and other irregularities. In so far as the directors are aware.. there is no relevant audit infomialion of which the charitable Company's auditor is unaware., and the trustees have taken all steps that they ought tts have taken lo make themselves aware of any relevant audit information and to establish that the auditor is aware of that infomation. Dlsclosure of information to the auditors We, the directors ol the Company who held Offi at the date of approval of these Financial Statements as set out above each conlim, so far as we are aware, that.. there is no relevant audit inlom)alion of which the Company's auditors are unaware., and we have taken all the steps that we ought to have taken as directors in order to make ourselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information. Auditors Azets Audit Service have expressed their willingness to act as auditors in accordance with Section 419 121 of the Companies Act 2006. Thi5 report has been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating lo srnall companies. Approved by the trustees and signed on their behalf.. Docu8*Mdty'. Friis 29 October 2024 52(EFC14884489 . Lykke Fri15 Chair of thè Board of TrustaèslDiraetors
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Independent Auditor's Report to the members of ECFR Opinion We have audited the financial stslements of EGFR Ilhe 'charitsble company'l for the year 31 De¢ernber 2023 which comprise th8 statern8nt of compreh8nsive incorn8, the balance sh8et, the statern8nt of chang85 in 8quity and not85 to the financial statements, including significant accounting policies. The financial reporting framework that ha5 been appli8d in their preparatlon 15 applicable law and United Kingdom Accounting Standard5, including Financial Repotting Standard 102 Th8 Financial R8POrting Stsndard spplicable in th8 UK snd Republic oflr8land (United Kingdom G8nerally Acc8Pted Accounting Practice). In tsur opinion the finanaal statements". give a true and fair view of the state of the charitable companys affairs as at 31 DeTrmber 2023 and of its incoming resources and application of resources, including its Income and expenditure, for the year then ended., have been properly prepared in accordance with United Kingdom Generally Actspted Accounting Practice., and have been prepared in accordanc8 Wlth th8 r8quiretMents of the Companies Act 2006. Basis for opinion We conducted ()ur audit in accordance with Intemational Standards on Auditing IUKI IISAS IUKII and applicable law. Our responsibilities under those standards are further described in the Auditors tssponsibilitlES fDr the sudil of the finèncisl statements section ol our report. We are independent of the chaiitable company in accordance with the ethical requirements that are levant to our audit of the financial statements in the UK, induding 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. Concluslons relatlng to golng concern In auditing the financial statements, we have concluded that the trustees, use of the going concem basis of accounting in the preparation of the financial slalernents is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating lo events or conditions that, individually or collectively, may cast significant doubt on the charitable company's ability to continue as a going conrn for a period of at least twelve months from when the financial staiernents are authorised for issue. Our responsibilities and the responsibilities of the trustees with respect to going conrn are described in the relevant sections of this report. Other inforniation The other information comprises the inforrnation included in the annual report other than the financial statements and our auditorfs report th8reon. The trustees are r&sponsibl& for the other information wntained wthin the annual r&port. Our opinion on th8 financi81 statements d085 not COV8r the Other inforrnation and, 8XC8Pt to the 8Xt8nt oth8rwise explicitly stated in our report, we do not express any form of assuran conclusion thereon. Our responsibility is to read the other inforrnation and, in doing so, considerwh8ther th8 Oth8r information 15 materially inconsistent with th8 financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially tMisst8ted. If we identrfy such material Inconsistencie5 or apparent material rnisstatements, we are required to determine whether this gives r15e to a material rnisstatem8nt in the financial st8teni8ntS therns81v8s. If, based on the work we hav8 P8rforrn8d, w8 conclude that there is a material rni5Statement of this other infortmation, we are required to report that fact. We have nothing to report in this regard. Opinions on oth•r matt•rs prseribad by th Compani*s Aet 2006 In tsur opinion, based on the work undertaken in the course of our audit." the information given in the trustees, report linctsrporaling the d1ctorS, report) for the financial year lor which the Iinaricial Statements are prepared Is consistent with the financial statements., and the directors, report has been prepared in accordance with applicable legal requirements. Matters on whlch we are requlred to report by exceptlon 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 trustees. report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you il, in our opinion.. adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us., or the financial statements are not in agreement with the accounting records and returns., or certain disclosures of directors, remuneration speafied by law are not made., or we have not received all the information and explanations we require lor our audit., or the trustees were not entitled to prepare the finanaal statements in accordance with the small companies, regime and take advantage of the small companies, exemptions in preparing the directors, report and from the requirement to prepare a strategic report.
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Independent Auditor's Report to the members of ECFR Responsibilities of trustees As explain8d rnor8 fully in the truste8s' r8sponsibilitl8S 5tat8tTl8nt, the truste8s Iwho are also th8 dir8Ctors of the charit8bl8 company for the purposes of cornpany 18wl are responsible for the preparation of the financi81 staternent5 8nd for being satisfied that th8y giv8 8 true and f8ir view, and for such intern81 control as the trustees determine is necessary to enable the preparation of financial statements that are fre8 from tnaterial misstatetn8nt, wh8th8r due to fraud orerror. In pr8paring the financial statement5, the trustees ale responsible for a5se55ing the chaiitable company's ability to continue a5 a going concern, disclosing, as applicable, matters related to going concern and using the going concem basis of accounting unless the trustees either intend to liquidate the d)aritable company or to ase operations, or have no realistic altemative but to do 50. Audltorfs msponslbllltlas for th• audlt of tha flnanclal stal•m&nts Our objectives are lo obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or eiror, and to Issue an auditor's report 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 IUKI will always delect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material il, 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. A further description of our responsibilities is available on the Financial Reporting Council's website al.. https'.Ilwww.frc.org.uklauditorsresponsibilities. This description forrns part ol our auditorfs report. Extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-cornpliance with laws and regulations. We design ProdureS in line with our responsibilities. outlined above and on the Finaneial Reporng Council's website. to detect material misstatements in respect of irregularities, including fraud. We obtain and update our understanding of the entity. its activities, its Control environment. and likelyfuture developments. inoluding in relation to the legal and regulatory framework applicable and how the entity is cornplying with that framework. Based on this understanding. we identify and assess the risks of material misstatement of the financial statements. whether due to fraud or error. design and perform audit procedures responsive to those risks. and obtain audit evidence that is suffici8nt and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that W8r8 Contrary to applicable laws and r8gul8tions, including fraud. In restx)nse to the risk of irregul8riti8s and non-complian with laws and regulations, including fraud, we d85igned proc8dures which indud8d.. Enquiry of rn8nageTnent and those th8rged wth govgrnan¢g around 8¢tual and potential litigation and Claims as well as 8Ctual, suspected and alleged fraud., Reviewing minutes of rneetings of those charged with govern8nc8', Asse55ing the extent of compliance with the laws and regulation5 considered to have a direct rnateiial effect on th8 financial stat8m8nts or th8 OP8rations of th8 charitable cornpany through enquiry and inspection., Reviewing financi815tatement disclosur85 and testing to supporting documentab.on to assess compliance wth applicable laws and iegulations., Perfortning audit work over the risk of management bias and override of controls, including testing of journal entries and other adju5ttn8nts for appropriatene55, evaluating the business rationa18 of significant transactions outside the normal course of bu5ine5s and reviewing accounb.ng estimates for indicators of potenb.al bias. Because ol the inherent limitations ol an audit, there is a risk that we will not detect all irregLJlarities, including those leading to a material misstatement in the financial statetnents or non-cotnpliance with iegulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances ol non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, tsr the override tsf intemal control.
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Independent Auditor's Report to the members of ECFR Use of our report This report is tnad8 solely to the charitab18 COrnP8ny's m8mb8r5, as a body, in accordance with Chapt8r 3 Of P8rt 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the ch8ritable cornpany's members those matters w& 8r8 required to st8t& to them in an aLJditor'5 r8POrt and for no oth8r purpos8. To the fullest extent permitt8d by 18w, we do not accept or 8ssum8 r8sponsibility to anyon& oth8r than th8 charit8bl8 company and th8 charitable company's mernbers as a body, for our audit work, for thi5 report, or for the opinions we have fortned. £LL4} J Howard FCA IS8nior Statutory Auditor) Foi and on behalf of Azets Audit Services st8tutory Auditor, Chartered Acoount8ntS 2nd Floor, Regi5 House, 45 King William St, London, EC4R 9AN Date 30 October 2024
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Statement of Financial Activities for the year ended 31 December 2023 Unrestrlcted Restrlcted Total 2023 Total 2022 Note Incomlng Rasourc•s Donations & L8gaci95 Charitsble activities Investment Incorne Other Income Total Incomlng Resources 337,262 3,704,468 337,262 7,356,487 206,823 6,447,304 3,652,019 477 4,042,208 477 7,694,227 2,863 6,656,993 3,652,019 Resources Expended Charitable activities-. Asia & China programme Middle Easl & North Africa prLyJramme European Power programme Wider Europe programme Africa programme US Programme Advoc8¢y & National offioes Regrant Total Resources Expended 58,091 133,884 727,622 19,193 110.3121 260,666 177,435 2 609 800 3 976 379 52,618 1,131,824 1.550,250 473,466 276,394 110,709 1,265,708 2,277,872 492,659 266,082 260,666 344,902 2 609 800 7 628 398 32,727 1,274.559 1,771.804 205,557 155,154 167,467 523,187 2,762,086 6 725.074 3652 019 Net incomellexpenditurel other recognised g8inslllossesl Net movement in funds 68.081 168.743 100.662 184825 184 825 118996 118996 Reconciliation of funds Total funds brought forward Total funds carrled fOard 2,451,788 2,332,792 625,790 625,790 3 077 578 2 976.916 3,077,578 2,958,582 The statement of financial activities indudes all gains and losses in the year. All income and expenditure derive from continuing activities. The notes on pages 13-23 form part of these financial statements. io
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Balance Sheet as at 31 December 2023 (Company number: 07154609) 2023 2022 Not• Fix•d ass•ts Tangible assets Total Fixed assets 2,240 216 216 Currant ass8ts Debtors Cash at bank and in hand 6,245,672 8,070,910 14316 582 3,171,924 3,942,902 7,114,826 10 Total Current assets Currant Liabilitiès Creditors.. amounts falling due within one year Total Current liabilities 11,360,240 11 360 240 4,037,464 4.037.464 Net Current Assets 2,956,342 3,077,362 Total assets less current liabilitie5 2 958.582 3,077,578 Total net assets 2,958,582 3,077,578 Funds of the Charity Restricted Funds Unrestricted Funds 12113 625.790 2 332,792 2 958.582 625,790 2.451.788 3,077,578 Total Funds 29 October 2024 Approved by the board of directors and trustees on and signed on its behalf by.. Do¢u8*Mdty'. Friis 52(EFC14884489 . Lykke Friis, Chair ol the Board of TrusteeslDireciors The notes on pages 13-23 form part of these financial statements. li
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Cashflow Statement for the year ended 31 December 2023 2023 2022 Note Cash flows from operatlng act5vltles: Net cash provided by operating activities 16 4,130,247 160,740 Cash flows from investing activities: Purchase of assets Net cash used in inv85ting activiti85 12,2391 Change In cash and cash equlvalents In the year 4128008 160,740 Cash and cash equivalents at beginning of the year 3,942,902 3.782,162 Cash and cash equivalents at end of year 10 8 070 910 3,942.902 The notes on pages 13-23 form part of these financial statements. 12
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Notes to the Financial Statements for the year ended 31 December 2023 1) Accounting Policies lal G&n•ral Infom)atlon and basls of praparatlon ECFR (The European Council on Foreign Relations) is a company limited by guarantee in England and Wales. In the event of the charity being wound up, the liability in respect of the guarantee is limited to £1 per member of the charity. ECFR meets the definition of a public benefit entity under FRS 102. The financial statements have been prepared in accordan with Accounting and Reporting by Charities.. Statement of Recommended Practi applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic ol Ireland IFRS 1021 issued in October 2019, the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland IFRS 1021, the Charities Act 2011, the Cornpanies Act 2006 and UK Generally Accepted Practi. The financial statements are presented in Euro IEURI, which is the presentational currency of the charity from 1 January 2018. The financial statements are prepared on 8 going concem basis under the historical cost convention. modified to include certain items 8t fair value. Assets and liabililies are initially reoognised at historical cost or transaction value unless otherwise stated in th8 rglgvant 8ccounting poliry not&lsl. The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented (Jnless otherwise st*ed. Ibl Going Concern The finanaal staternents hav8 been pr8par8d on a going conc&m basis as th& truste85 b81iev8 that no material uncertainties exist. The trustee5 have considered the level of funds held and the expected level of income and expendithre for 12 tnonths from authorising these financial statements. The budgeted incotne and expenditure 15 suffiaent with the level of reserves for the charity to be able tts continue as a gtsing concern. lel Funds Unrestricted funds- represent funds which are free to be spent in accordance with the charitable objects at the discretion of the trustees. Designated resetves are set aside out of unrestricted reserves by the trustees, for particular purposes. Restricted funds - represent funds that have been given for parts"cular purposes andlor projects, which have legal restrictions on their use and must be spent wholly to undertake activities in accordance with donor requirements. Idl Income All incoming resources are recognised where the charity is legally entitled to the income, the amount can be reliably measured and it is probable that the income will be received. Donated Servi$ and Gifts in Kind are recognised at their open market value in the period in which they are receivable as incoming resources, where the benefit to the charity can be reliably measured. An equivalent amount is included as expenditure under the relevant heading in the Staternent of Financial Activities. Donations and legacies are recognised in the financial statements when the trustees are convinced that there is entitlement to the income. it is probable that the incorne will be received and the arnount in question is measurable. Any 8dministr8tion fee that is ch8rged is recognised as unrgstricted income. Grant income is recognised in the peri(Kl the grant relates to and to the extent th8t certainly to their enlillemenl can be messured. 13
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Notes to the Financial Statements for the year ended 31 December 2023 1) Accounting Policies- continued (el Expenditure All expenditure is accounted for on an a¢cru8ls basis snd h85 been ¢18ssified under headings that aggr8gate all costs relatBd to the category. Expenditure is recognised where there is 8 legal or constructlV8 obligation to make paytnents to third parties, it Is probable that the settlement will be required and the amount of the obligation can be measured reliably. Expenditure on charit8ble activitie5 includes spending on ECFR'S 6 Prograrnrnes IAsia & China, Middle East & North Africa, European Power, Wider Europe, Africa, USI and the National Offiees. Irrecoverable VAT is charged as an expense against the activity for which expenditure arose. Staff costs are allocated between cost headings according to the function of each employee. lfj Allocatlon of support and governance costs Support costs are those that assist the work of the charity but do not directly represent charitable activities and include governance costs, administrative office function costs, and depreciation, HR and recruitment, and premises costs. They are incurred directly in support of expenditure on ECFRS charitable objects. Governance costs comprise all costs involving the public accountability of the charity and ils compliance with regulation and good practice. These costs include costs relating to the statutory audit. legal lees. as well as staff and consultancy costs in relation to senior management. Support and Governance costs have been allocated across charitable activities using perntage allocations. Igl Tangible fixed assets Tangible fixed assets are stated at cost less accumulated depreciation. Al assets costing more than £5001É5551 are capitslised. Assets are depreciated once the asset is ready for use. Depreciation is provided on all tangible fixed assets, at r8tes calculsted to writ8 off the cost of 8ach ssset on 8 straight-lin8 ba51S Over the assets estimated us8ful lives as follows.. Comput&r equipm8nt 33Q/o Straight line Furniture, Fixtures and fittings 25¢1¢ straight line Office equiptnent 33010 Straight line Ihl D8btors Other debtors including amounts owed from ECFR Group entities are COgnised at the settlement amount due. Prepayrnents arè valued at the amount prepaid. Acctued ineome including gift aid is measured at the amount due to be received. 111 Cash at bank and In hand Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account. lil Creditors and provisions Creditors and accruals are recognised at their known or reliably estimated settlement amount due. Sundry creditors including provisions are recognised where the charity has a present obligation resulting from a pastevent thatwill probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimaled reliably. 14
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Notes to the Financial Statements for the year ended 31 December 2023 1) Accounting Policies- continued Ikl Flnanclal Instruments Derivatives, induding foreign forward exchange contracts, are not basic financial instruments. Derivatives are initially recognised at lair value on the dale a derivative contract is entered into and are subsequently re-measured at their lair value. Changes in the lair value ol derivatives are recognised as other gainsllosses on the lace of the Statement of Financial Activities. 111 Operatlng Leases The charity classifies the lease on the London office building as an operating lease., the tiue to the building remains with the lessor. Rental charges are charged on a straight-line basis over the term of the lease. Im) Pen$ion$ The company SubrIbeS to a defined contribution pension scheme provided by St8nd8rd Life. Contributions p8y8ble for the period are charged in the Statement of Financial Activities. Inl Forelgn Currency In preparing these finanaal statements, transactions in the foreign currencies have been recorded in the presentational currency using an average exchange rate or the rate prevailing at the time. Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. Foreign exchange differences arising on translation are reported in the Statement of Financial Activities. lol Taxatlon No charge to taxation arises on the result for the year because the company is able to take advantage of tt)e tax exemptions available to charities. Ipl Judgements and key sources of estimation uncertainty Accounting estirn8tes and judgements are continually evaluated and are b8sed on historic81 experience and otherfactors, including expectations of future events that are believed to be reasonable under the circumstances. The following judgements18P8rt from those involving estirnatg51 have been made in the proc8ss of applying the above accounting polici8s that hav8 h8d th8 most significant &ffect on arnounts r8cogni58d in th8 financial stat8m8nts'. Useful e(x)nOTnic lives of t8ngible assets The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. Theyare amended when necessary to refleet cuirent estimates, based on technological advancement, futurè investments, economic utilisats.on and the physical condition of the assets, see note 8 for the carrying amount of the fixtures and equipment and computer equipment, and note Ilgl lor the useful economic lives for each class ol assets. There are no other key assLJmptions concerning the future and other key sour$ of estimation uncertainty at the rerKJrting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. 15
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Notes to the Financial Statements for the year ended 31 December 2023 2) Analysis of income Unr•striet*d Rastrictad Total 2023 Total 2022 Donations and lega¢ies= Donated g(M)ds, facilities and Services (Note 31 337 262 337 262 206,823 206,823 Charitable Activities.. Grants 3,704,468 3.652,019 3652 019 7.356,487 7 356 487 6,447,304 6 447.304 Investment Income: Interest Income Other Income 477 477 477 477 2.863 2,863 Total Income 4 042 208 3652 019 7 694 227 6 656.993 ECFR is very grateful for tt)e continuing support of the Open Society Foundation for their core funds 01é2,233,79812022'. 2,233,798). In 2022. all of the Q06.823 incorne in relation to donations and legacies was attributable to the unrestricted funds. In 2022, É2,253,798 01 income from charitable activities was attributable to the unresiricted, fund and ihe remaining 4.193,506 of the income was attributable to the restricted fund. In 2022, all of the E2,863 income from other incorne was atlribut8ble to the unrestricted tund. 3) Donated goods, facilities and services Total 2023 Total 2022 Asia & China programme Middle East & North Africa progr8mme European Power progratmrne Wider Europe programme Africa programme Advocacy & National Offices Totsl Gifts in Kind 180,401 600 14,370 408 141,483 337 262 62,877 27,824 36,500 206.823 Gifts in Kind consist of 10ty/¢12022.. 11¢/0) of donated offits services and 90Vo12022.. 89¢AI ol event services. It includes contributions to office space, speakers time, provision of venue space and support to public events. 16
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Notes to the Financial Statements for the year ended 31 December 2023 4) Analysis of expenditure Direct Staff Costs Activity Costs Support Costs Total 2023 Total 2022 Asia & Ghina progr8mme Middle East & North Africa progr8mme European Power progratMtM8 Wider Europe programme Africa programme US programme Advocacy & National Offices Regrant 1,074 78,602 598,188 1,361,103 209,284 103,074 260,666 236,504 2,609,800 5.457,221 31,033 667,517 914,286 279,235 163,008 110,709 1.265,708 2.277,872 492.659 266.082 260.666 344,902 2,609,800 7.628,398 32,727 1,274,559 1,771,804 205,557 155,154 2,483 4,140 9,631 98,767 523,187 2,762,086 6.725,074 17.331 2,153,846 Total 2023 Total 2022 Support Costs staff Costs Activity eosts Office Rental Communications Professional costs IT costs D8pr8ciation, equipm8nt hir8 & asset irnpairm8nt Bank charges & loss on exchange Governance costs Insurance, fees and charges Loss on sale of assets 1.563,525 384,882 126,864 22,566 118,683 70,881 735 1172,1651 9,067 28,808 572,630 133,783 31,721 89,496 17.188 1,796 56,940 4,569 162 908.285 2 153 846 5) Net Incomel{Expenditurel for the year is stated after charging: Total 2023 Total 2022 Auditors remuneration for the charity.. Audit fees for the audit of charity oth8r services Under provision of prior year fees 13,200 3,600 8,595 16,800 10,250 12,155 22,405 Depreci8tion Op8r8ting lea58 office r8ntals 215 134,775 944 119,722 17
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Notes to the Financial Statements for the year ended 31 December 2023 6) Staff costs and employee benefits staff Costs Total 2023 Tot812022 Salaries & wages Social security costs, incl. pension arrangements for non-UK staff Pension costs Idelined contribution scheme for UK staff) Other ernployee benefits 1,331,668 145,557 80,630 1,132,941 154,478 70,937 1,580,856 1,395,757 staff wsts consists of support stsff wsts of £1,563,525 12022.. E572,6301 and direct a¢tiviti85 st8ff costs of E17,331 12022.. É823,1271. Please See note 4. Average monthly nurnber of employees during the year calculated on a full-time equivalent basis was 1712022.. 161. The following number of employees reiVed a gross salary between the below bands during the year.. Band 70,000 10 é79,999 80,000 10 é89,999 90.000 to £99.999 100,000 to £109,999 110,000 to É119,999 120,000 to É129,999 130,000 to É139.999 140,000 to £149.999 150,000 to £159.999 160,000 to £169,999 170,000 to É179,999 180,000 to É189,999 190,000 10 É199.999 200,000 10 É209.999 10,000 to £219.999 20,000 to É229,999 e30,000 to É239,999 40,000 to É249,999 2023 2022 Key rranagement comprise the senior managernent team (noted on page 11. The total cost to company of key tnanagement for the group were É585,46412022.. É441,7361. Redundancy payrnents made during the year were ÉNil12022.. ÉNill. Accrued annual leave of É35,37312022.' É26,3661 has been provided for. 7) Defined Contribution The Standard Life Group Self Invested Personal Pension is available to all UK employees in line with current statutory requirements. The cornpany makes 5 /0 contribution to employees, in exceptional cases up to 10Yo contribution. The charity complied with the requirements of auto-enrolment in the UK in July 2015 and re-enrolrnent by September 2019. Pension related costs for the year amounted to É80,63012022.' É70,9371. Pension contribution payments ol Énil12022'. 8,6741 were outstanding at year end. Pension contributions for non-UK staff are paid in line with the social security arrangements in place in each country. 18
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Notes to the Financial Statements for the year ended 31 December 2023 8) Tangible Fixed Assets Computer Offlce Equlpment Equlpment Flxtures, fittlngs & equlpment Total Charity Costs At 1st January 2023 Additions Disposals At 31st Detmbr 2023 27,931 2,239 1,652 602 28.533 2.239 602 29.120 DepcIall0n At 1st January 2023 Charge for the year Disposals At 31st Dember 2023 27,715 215 1.652 602 28,317 215 602 Net Book Value At 31st December 2023 At 31st December 2022 216 216 9) Debtors 2023 2022 Trade Debtors Property Deposit ECFR Group Debtors Other Debtors Prepayments Financial instrurnent 1,241,256 23,514 4,933,288 4,911 42,703 42,090 23,514 2,891,924 45,653 168.743 3,171,924 6,245,672 101 Cash at bank and in hand 2023 2022 Cash 8t bank and in hand 8070910 8070910 3,942.902 3,942,902 19
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Notes to the Financial Statements for the year ended 31 December 2023 11} Creditors: amounts falling due within one year 2023 2022 Analysis of cr•ditors ECFR Group Creditors Trade Creditors Other Tax and Social Security Costs Pension Contributions Sundry Creditors Accruals Deferred Grant income Financial instwrnent 4,760,610 275,519 17,5241 2,548,676 214.099 8,674 29.703 58,721 1,177,591 35,373 89,243 6.190,937 11 360240 4 037.464 Deferred Income Movement In deferred Income account: Balance at 1 January Amounts added in current period Amounts released to income from previous periods Balance at 310ecember 2023 2022 1.177,591 6,190,937 1177,591 6,190,937 868,533 1,177,591 868.533 1,177,591 Deferred incorne relates to income received during the year for projects taking place after the year end. 20
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Notes to the Financial Statements for the year ended 31 December 2023 121 Restricted Funds 01 January 2023 31 December 2023 Income Expendlture Asia & China programme Middle East & North Africa programme European Power programme Widgr Europe prograrnme Africa progr8mme Advocacy & National Offices 25,322 318,316 113,156 83,862 131,2471 116,561 625.790 52,618 1,131,824 1,550,250 473,466 276,394 167,467 3.652,019 152,6181 11,131,824) 11,550,250) 1473,4661 1276,3941 1167,4671 13.652,0191 25,322 318.316 113,156 83,682 131,2471 116,561 625.790 Asia & China The Asia programme seeks to help Europe rec8libr8te its relationship with China and its Asian partners. The programme analyses China's domestic situation, its role in the region and its increasing influence around the worfd and put a renewed emphasis on fostering Europe's relationships with India and Japan. Middle East & North Afriea The Middle East and North Africa programme follows political upheaval and sectarian conflict in the region, aiming to identify political solutions and help Europe develop coher8nt responses to North Africa's transitions and the Middl8 East peace process. European Power The European Power programme was created in 2015 to help Europeans develop policy responses to the issues affecting the Eu's capacity to act on the global scene. The programme explores the obstacles to sustainable unity on current and future foreign policy challenges and seeks to develop solutions for overcorning thern Wlder Europe To remain relevant in the region, the European Union needs 8 coherent and wnsistent strategy to prornote its interests and values together with the political will to follow this through. The Wider Europe programme was launched in 2007 wth the aim of fostering this process. Afriea The Africa programme analyses the geopolitics of the Africa-Europe relationship. This includes relats'ons beeen the Afri¢8n Union and the European Union., foreign policy tools and strategies,. and opportunities to find creative policy solutions. Ad¥o¢a¢y and National Offices ECFR'S National OffiS are a vital component of our pan-European tsutreach. They help us understand and influence the debate in the Eu's key national capitals, building networks amongst policy makers and journalists, and making sense of th8 big policy qu85tions facing Europe in th8 21st C8ntury frorn the diff&ring p8rspectives of EU m8mbers. 21
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Notes to the Financial Statements for the year ended 31 December 2023 131 Restricted Funds - Prior Year {2022) 01 January 2022 31 Dacèmb•r 2022 Incom• Exp•ndltur• Asia & China programme Middle East & North Africa progr8mme European Power progratnrne Wider Europe programme Africa programme Advocary & Nation81 Offioes 79,864 1,232,250 1,880,004 497,745 236,401 267,242 4,193,506 154,5421 1913.9341 11,766,848) 1414,0631 1267,6481 1150,6811 13,567,716) 25,322 318,316 113.156 83,682 131,2471 116,561 625,790 141 Transactions with trustees During the year, no trustees12022'. nil) were paid or received any other benefit from employment with the charitable company. 3 Iruslees12022'. 31 were reimbursed for travel and meeting expenses amounting to É5,43012022.' É9,8771. 151 Transactions with related parties The charity has taken advantage of the exemption not to disclose transactions with entities that are part of the Group by virtue of its status 8s s subsidiary of the p8r8nt whose financial statements are oonsolidat8d and are rnade publioly available. 161 Reconciliation of net incomel{expenditurel to net cashflow from operating activities 2023 2022 Net incomellexpenditurel for the reporting period Adjustments for= Depreciation Lossllprofitl on sale of fixed assets Iln¢reaseyDecrease in debtors IncreasellDecreasel in creditors FX movement on financial instrument 65,829 168,0811 215 944 162 12.703,8451 2,762,817 168 743 13,073,749) 7,322,777 184 825 4,130,247 160,740 171 Operating lease commitments 2023 2022 The charity had totsl commitments under an op8rating 188S8 as follows.. Not later than one year Later than one and not later than five years Later than five years 94,189 217,560 83,770 22
DoGusign Envelope ID.. BB5167E8-45184621-9394-B9DCD909045E European Council on Foreign Relations Notes to the Financial Statements for the year ended 31 December 2023 181 Ultimate Controlling Party The ultimate parent entity is European Counul on Foreign Relations IECFRI e.v, a not-for-prolit association registered in Germany, No. VR 37797 B. The consolidated accounts may be obtained from the registered address of the parent entty which is Unter d8n Lind8n 17, 10117 B8rlin, Germany. 23