## **NATURAL RESOURCE CHARTER LIMITED** **TRUSTEES’ REPORT FINANCIAL STATEMENTS** **FOR THE YEAR ENDED** **31 DECEMBER 2022** **Registered Charity Number 1144326** **Registered Company Number 07645971** ## **NATURAL RESOURCE CHARTER LIMITED** ## **TRUSTEES’ REPORT** **FOR THE YEAR ENDED 31 DECEMBER 2022** ## **REFERENCE AND ADMINISTRATIVE DETAILS** |**Registered Company Number**|07645971| |---|---| |**Registered Charity Number**|1144326| |**Principal and**|| |**Registered Office**|Jasper House,| ||4-6 Copthall Avenue| ||3rd Floor| ||London| ||EC2R 7DA| |**Trustees**|Alan Detheridge| ||Joseph Charles Bell| ||Mark Henstridge| ||Meghna Abraham| |**Bankers**|Lloyds Bank plc| ||25 Gresham Street| ||London| ||EC2V 7HN| |**Auditor**|Haysmacintyre LLP| ||10 Queen Street Place| ||London| ||EC4R 1AG| 1 ## **NATURAL RESOURCE CHARTER LIMITED** ## **TRUSTEES’ REPORT (continued)** ## **FOR THE YEAR ENDED 31 DECEMBER 2022** The Trustees are pleased to present their annual directors’ report together with the financial statements of Natural Resource Charter Ltd (NRCL) for the year ending 31 December 2022 which are also prepared to meet the requirements for a directors’ report and accounts for Companies Act purposes. The financial statements comply with the Charities Act 2011, the Companies Act 2006, the Memorandum and Articles of Association, and 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). ## **STRUCTURE, MANAGEMENT AND OBJECTIVES** The charitable company is controlled by its Memorandum and Articles of Association. It was incorporated on 24[th] May 2011 (Company Number 7645971) and constitutes a limited company, limited by guarantee, as defined by the Companies Act 2006, and is also registered as a charity (Charity Number 1144326). The trustees are appointed by the Member, Natural Resource Governance Institute (“NRGI”). The charity provides induction materials for new members and training as required. ## **OBJECTIVES AND ACTIVITIES** The charity's objects ("Objects") are specifically restricted to the following: To contribute to fair, prosperous and sustainable societies by advancing citizen and government efforts in resource-rich countries to: - Drive systemic change to avoid harms from mining and equitably benefit from the responsible scale up of transition minerals necessary to avert global climate catastrophe. - Build inclusive economies that end dependence on fossil fuels and advance a just energy transition for citizens. - Manage revenues from natural resources accountably in response to citizen priorities. NRCL provides policy advice and advocacy infused with lessons learned in the field and with insights developed through rigorous research. NRCL shares knowledge and experience freely with policymakers, accountability actors and the global campaign for improved international norms. NRCL is particularly well-placed to convene reform-oriented dialogue and to engage in constructive policy advocacy. NRCL embraces multi-stakeholder approaches and remains focused on core competencies, such as the measurement and assessment of natural resource governance, drawing on signature initiatives like the Resource Governance Index and the Natural Resource Charter. At the country level NRCL provides training, technical assistance and support on how to deliver transparency and accountability, including through implementation of the Extractive Industries Transparency Initiative, and the use of data; strengthening fiscal systems; reform of state-owned enterprises; and improvements in the management of resource revenues. NRCL also promotes the uptake of global norms of transparency and governance. NRCL seeks to produce measurable change in the direction of more effective and more open management of natural resources. NRCL staff work under a cooperation agreement with the Natural Resource Governance Institute (NRGI) its sole member, a U.S. registered charity, NRCL became active in November 2014 with the transfer of the UK operations of NRGI. In addition, employees of Open Society Foundation (Company Number 04571628) previously seconded to NRGI were transferred to NRCL. NRGI has adopted a strategic plan for the organisation that includes NRCL’s proposed activities. NRCL’s trustees have reviewed and approved this plan on behalf of NRCL. Through technical advice, advocacy, applied research, policy analysis, and capacity development, NRCL works with innovative agents of change within government ministries, civil society, the media, legislatures, the private sector, and international institutions to promote accountable and effective governance in the extractive industries. NRCL’s staff have depth in capacity development and applied research and analysis. 2 ## **NATURAL RESOURCE CHARTER LIMITED** ## **TRUSTEES’ REPORT (continued)** ## **FOR THE YEAR ENDED 31 DECEMBER 2022** ## **ACHIEVEMENTS AND PERFORMANCE** The largest portion of the NRCL budget is devoted to staff salaries, benefits and associated occupancy expenses. Eighteen staff are based in the London office. NRCL includes employees from the Senior Management Team, both of NRGI’s thematic teams (Governance Programs and Legal and Economic Programs) and the Communications and Operations teams. They support a variety of global level projects in their respective areas of purview, including external engagement with global institutions such as private sector entities and multilateral agencies, the undertaking of research and analysis, participating in major international convenings and leading NRGI’s flagship research work and capacity building courses. They also support the implementation of strategies for all of NRGI’s priority countries working in tandem with country staff. In particular: - i) Members of the governance team lead our global advocacy work, in particular around transition minerals governance and anti-corruption. - ii) Members of the legal and economic programs team lead our work on fiscal modelling, legal analysis, reform and our research on the energy transition. - iii) Members of the operations team, including the finance and Human Resources team, support the operational backbone of NRGI. - iv) Members of the fundraising team lead the organization’s fundraising efforts and donor relations. v) A member of the senior management team the Managing Director, leads on organizational effectiveness and strategy and program design and implementation. Throughout 2022, the work of NRCL staff led to numerous successes across the range of themes that NRGI focuses on, from anti-corruption, to licensing, energy transition, tax policy, revenue management and State Owned Enterprise (SOE) governance. NRGI analysis and direct engagement with civil society, governments and companies worldwide led to major progress around each element of our strategy. For example: NRGI continued to grow the portfolio of work on the energy transition, which has major implications for countries that produce hydrocarbons or the minerals needed for new energy technologies. NRGI sent a delegation to the 2022 United Nations Climate Change Conference (UNFCCC COP 27) in Sharm el-Sheikh, Egypt, in order to raise the profile of equity and governance priorities for low- and middle-income countries navigating the energy transition. We achieved this through organization or participation in eight scheduled events, including on transition minerals governance, just energy transition finance, and the energy transition pathways for Africa; through dozens of one-to-one meetings with government delegates and work in coalition with partners and allies, including support to Publish What You Pay (PWYP) and the Global Gas and Oil Network (GGON), and; through media and communications, including a coveted high-profile press conference speaking slot on the final day of scheduled negotiations. NRGI, in collaboration with the OECD Centre for Responsible Business Conduct and the Extractive Industries Transparency Initiative (EITI), convened a group of experts to work on the topic of corruption in transition mineral supply chains. Drawing on their shared expertise from civil society, academia, governments and international organizations, in early December the expert group published their key recommendations to tackle corruption in mineral supply chains, encouraging urgent action in this increasingly risky arena. (NRGI also produced a complementary video). NRGI published its seventh update to the National Oil Company Database since its initial launch in 2019. The database now covers 11 years (2011–21) and has more than 100,000 individual data points on 71 state-owned companies. The value of this publication was demonstrated shortly after its refresh, when the Economist contacted NRGI about a story addressing energy transition strategies of Gulf national oil companies (NOCs). The resulting December 19, 2022, article uses data from NRGI’s database in a graphic on the production, dependence and spending of a sample of NOCs. NRGI raised the importance of governance and equity at COP27, flagging the “risky bets” that national oil companies are making as the energy transition gains momentum and highlighting the importance of the governance of transition minerals. 3 ## **NATURAL RESOURCE CHARTER LIMITED** ## **TRUSTEES’ REPORT (continued)** ## **FOR THE YEAR ENDED 31 DECEMBER 2022** ## **KEY MANAGEMENT PERSONNEL** In 2022, NRGI’s senior management team was based in the US, with the exception of the Senior Director of Programs, based in Colombia, and the Managing Director, based in the UK.. The President and CEO’s pay is set by the Executive Committee of the Board using external benchmarking sources. Other staff pay is also set using external benchmarking of the applicable local market(s). ## **RISK REVIEW** NRGI has a centralized approach to risk management and also manages its insurance policies globally. In addition to the organisation-wide assessments of the operating environment (People, Property, Compliance, and Income), NRGI also reviews individual projects. The Project Leads carry out risk assessments for each project as it is launched, which are updated periodically. The following table draws upon an internal risk register that is updated regularly as part of a larger dashboard for our board of directors. The table considers specific risks for NRCL, within the broader NRGI context. NRCL’s income is entirely derived through a service agreement with its parent NRGI, with NRCL transactions chiefly concerning UK-based staff and the operating cost of the London office. While further risks are included in NRGI’s internal risk register, the following table only presents risks with the highest potential likelihood and impact. |**Description**|**Mitigation**| |---|---| |**Financial Risks**|| |**Insufficient funding from donors to cover NRGI**
**activities**- Imminent risks include the end of the
Luminate and Hewlett renewals in 2022 (declining
endowments), and the OSF decline and exit after 2023.|1.
Continue to diversify donor pool.
2.
Further professionalize our development efforts.
3.
Review business model assumptions (including on
staffing) and conduct scenario planning.
4.
Adapt NRGI's strategy to attract new funders.
5.
Consider indirect cost recovery in restricted funding
budget.
6.
Increase NRGI’s ability to price its offerings and
leverage restricted funds.| |**People Risks**|| |**Loss of key program staff -**At the start of 2021
Suneeta Kaimal was named NRGI’s CEO and President.
In 2022, Gilbert F. Houngbo joined NRGI as Board
chair. He is Director General of International Labour
Organization and previously president of the
International Fund for Agricultural Development.|1.
Ensure cross training among team members to create
redundancy and limit risk when turnover occurs.
2.
Ensure robust information and knowledge management
to facilitate transitions when they occur.
3.
Recruit for key vacancies that will deepen the staff
bench.
4.
Engage with high performers to support professional
development and job satisfaction.| ||| 4 ## **NATURAL RESOURCE CHARTER LIMITED** ## **TRUSTEES’ REPORT (continued)** ## **FOR THE YEAR ENDED 31 DECEMBER 2022** |**Staff potentially exposed to harm in the course of**
**performing their duties -**|1.
In 2022, International travel resumed. To protect the
staff are required to confirm that they have read relevant
guidance and alerts (including those related to medical
necessities).
2.
NRGI has global insurance, including for especial
events during travels.
3.
NRGI has medical evacuation and repatriation insurance
for employees in need of serious medical attention in
risk areas.
4. Emergency plans have been developed for all offices.| |---|---| |**Reputational Risks**|| |**Strategic Relevance -**In the context of the climate crisis
and the acceleration of the green agenda brought on by
Covid-19, NRGI needs to accelerate its pivot towards
these issues to ensure its continues relevance|1.
Invest in advancing NRGI's work on the energy transition.
2.
Communications efforts will continue to reposition NRGI
in the current context, examples including a recent 2020
series on Covid-19 and extractive impacts and ongoing
work on the energy transition.| |**Protection of Assets**|| |**Disaster**(fire/ flood) leading to loss of essential assets
or critical data.|1.
All systems are cloud-based with recurring backup
performed.
2.
Individual laptops backup through OneDrive (Cloud-
based).
3.
Relevant insurance is in place| |**System issues**(e.g. virus, hacked, unauthorized access,
system down).|1.
Protection pushed to laptops and related equipment.
2.
IT Team monitors systems for risks and potential
breaches.
3.
Cloud backups occur.
4.
Relevant insurance is in place.| |**Fraud**
Theft or misappropriation of assets.|1.
All payments require set-up / approval (segregation).
2.
Funds transferred to NRCL monthly, so limited funds on
hand or accessible.
3.
Monthly bank reconciliations performed, with all
individual transactions reviewed and approved centrally.
4.
Relevant insurance is in place.| ## **PUBLIC BENEFIT** The trustees confirm that they have referred to the Charity Commission's general guidance on Public Benefit when reviewing and shaping the charity's aims and objectives for the year and planning future activities. The charity works to ensure that its programmes are inclusive, accessible, and responsive to the needs of its intended beneficiaries. ## **FUNDRAISING POLICY** The Charity does not carry out any external fundraising activities and did not receive any complaints. ## **RESERVES POLICY** The Trustees believe it is not necessary to mandate a specific level of reserves and introduce an independent reserve policy in light of the cooperation agreement with NRGI. NRGI adopted a reserves policy as of April 2019 that would cover NRCL. ## **FINANCIAL REVIEW** Income for the year ended December 31, 2022, and 2021 was £1,778,028 and £1,780,925, respectively, comprising contributions from NRGI. Expenses were £1,744,378 and £1,772,359, respectively, comprising primarily staff costs and office costs. This has resulted in Net Assets of £43,191. All income and expenditure in the year were unrestricted. ## **PLANS FOR THE FUTURE** NRCL staff has implemented the NRGI approved new 2020-2025 strategic plan. NRGI will continue its role as an independent, global policy analysis and advocacy institute that works collaboratively to generate and translate knowledge into policy reform in resource-rich countries. NRGI will share good practice, captured in the Natural Resource Charter as intellectual framework, through analysis of the evidence and contextually relevant tools and approaches. 5 NATURAL RESOURCE CHARTER LIMfTED TRUSTEL8' REPORT l¢•thll¥vd) FOR THE YEAR ENDED 31 DECEMBER1•22 NRGI will str¢Tr&th￿ lo￿ xcountability with aD empb&sis on civil socidy. to hold governm•)ts xeountsble and to contribute to policy th by building their technical Ca￿llieS and ¢n8bling w&s to key decision rnok¢r5 and infiuencers. NRGI will reforn)-miThled txjlicy tnaker5 by pmiding (trdible aD8lysis and evidence to make ithrmed de¢isioDs in the ba¢ int￿ts of Current aTwJ fitture gewatsD& NRGI will reinforct our to build dom¢stic ¢apa¢ity for ¢hw by tsr8etia8 res￿ a￿j glthl influeneu& NRCL staff will support the folk)wing strategic objeeiives: To ¢onthThute to fair, prospero￿ and ￿s￿]nable wcieties by *4vatKill8 Citiz£n and government efforts in rey>urcfrrich countries to: Drive systwi¢ dJ8nge to avoid Iwms fTom mining *)d quitably benefrt from the r¢spxtsibl¢ s¢4le up of transition minerats nec&wry to tvcrt g]obal ¢lirnate cat&tyhe. Build inclusive ttonomits tI￿le￿I on fo&sil fi￿lS and4dvart¢¢ a just transition for citizths. STA TEMENT OF TRUSTELS. RESPONSIBILITIFS The Tnts*e& who a¥¢ al￿ diT¢Ctors of the d￿ltsb￿ 0)m[￿Y fi)r th¢ of Lxxllp8ny law. are T¢sponsible for p]%paring the Tn]st¢e Rewrt aThJ the aC￿￿ts in x¢ordance with applK*ble law in the Unl￿1 KiD8dom Aecoullting Standards (United Kingdom (kneralty Aceeptrd AciX)uniiDg Practice). Company law rcqvirr5 the trusttts io accountsforeach fin8n¢io1 year which give a true gnd fairview of the strte of 8ff&trs of the cljarity and the incoming rrsouwks 8nd 8pplic4tion of T&sou￿ ]￿ludIng th¢ income and exr*￿Alture of th¢ ch8ritd>le comrAny of the ptrty) • 8elcct ￿itsbk aco)unting ￿11¢1¢$ and then apply ¢orLq*eDdy" • observe the lllethods and pTin¢iples in the ClwÈties SORP. • make judgmen¢s and ￿ting t￿l￿a*S thatar¢ Y¢a4)nab]e aDd prukn¢ • state whetherapplicablc UKA¢(A)unting Stalldarthhavebccn fDUow¢4 *Jbjedto any m*erial thparturesdiscloscd &t)d explained in the financial ' PT¢par¢ th¢ fuJancia] siaiements on the 80ing ci*c(¥tt knis unl¢ss it ￿ inapwwate to rArs￿¢ the ¢omp8ny will continu¢ in r]naD¢¢a] positi¢)n ofth¢ charity and cnable them to VLwre thatthe xcountscomply wtthdK rompanies 8¢t 2(M)6. They are al￿ responsible for safe8uarding th¢ assets of th¢ dwity ard for taknug Ttagx]&ble •s for th¢ pr¢vellti￿ and detection offraud and oth¢r iryegulariti AUDITORS Haysna¢intyre LLP have theirThillllwtsslo ¢(mttyw¢ in s¢rvittaDd offtrthetslves forrwwinttnent8t th¢ SMALL COMPANY NOTE In PTWtngthis Tfp)TL the tru#e¢sFoV¢tokn thcsnall provaded by seiaion 415A of the Companies Acl 2(Y)6. Sign￿1 by orderof thtPA)ard ofTrD#ees¢ 14fv kpO-, Lo25 Alatt Deth¢rid84 Tr **INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF NATURAL RESOURCE CHARTER LIMITED** We have audited the financial statements of the Natural Resource Charter Limited for the year ended 31 December 2022 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, including Financial Reporting Standard 102 _The Financial Reporting Standard applicable in the UK and Republic of Ireland_ (United Kingdom Generally Accepted Accounting Practice). In our opinion, the financial statements: - give a true and fair view of the state of the charitable company’s affairs as at 31 December 2022 and of the charitable company’s net movement in funds, including the income and expenditure, for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and - have been prepared in accordance with the requirements of the Companies Act 2006. ## **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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the charity 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 Trustees’ Report. 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 there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. ## **Opinions on other matters prescribed by the Companies Act 2006** In our opinion, based on the work undertaken in the course of the audit: - the information given in the Trustees’ Report (which includes the directors’ report prepared for the purposes of company law) for the financial year for which the financial statements are prepared is consistent with the financial statements; and - the directors’ report included within the Trustees’ Report have been prepared in accordance with applicable legal requirements. ## **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 Trustees’ Report (which incorporates the directors’ report). 7 **INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF NATURAL RESOURCE CHARTER LIMITED** 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 if, in our opinion: - adequate accounting records have not been kept by the charitable company; or - the charitable company financial statements are not in agreement with the accounting records and returns; or - certain disclosures of trustees’ remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit; or - the trustees were not entitled to prepare the financial statements in accordance with the small companies’ regime and take advantage of the small companies’ exemptions in preparing the trustees’ report and from the requirement to prepare a strategic report. ## **Responsibilities of trustees for the financial statements** As explained more fully in the trustees’ responsibilities statement set out on page 6, 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. ## **Auditor’s 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 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 (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. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Based on our understanding of the charitable company and the environment in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to revenue recognition, and we considered the extent to which noncompliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as Companies Act 2006 and the Charities Act 2011. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to management override. Audit procedures performed by the engagement team included: - We undertook a number of audit procedures to verify the appropriateness of revenue recognition in the financial statements; - Discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud; - Evaluating management’s controls designed to prevent and detect irregularities; - Identifying and testing journals, in particular journal entries posted with unusual account combinations, postings by unusual users or with unusual descriptions; and Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. 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 of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. 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 auditor’s report. 8 ## **INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF NATURAL RESOURCE CHARTER LIMITED** ## **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 Auditor's 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. Adam Halsey (Senior Statutory Auditor) For and on behalf of Haysmacintyre LLP, Statutory Auditors Date 10 Queen Street Place London EC4R 1AG 9 ## **NATURAL RESOURCE CHARTER LIMITED** ## **STATEMENT OF FINANCIAL ACTIVITIES INCORPORATING THE INCOME AND EXPENDITURE ACCOUNT** ## **FOR THE YEAR ENDED 31 DECEMBER 2022** |||**Unrestricted**|**funds**| |---|---|---|---| |||**Totals**|**Totals**| |||**2022**|**2021**| ||**Notes**|**£**|**£**| |**Income from:**|||| |_Donations_||1,778,027|1,780,925| |||-------------------|-------------------| |**Total**||1,778,027|1,780,925| |||--------------------|--------------------| |**Expenditure on:**|||| |_Charitable activities_|||| |Direct charitable expenditure|3|1,734,887|1,772,359| |||-----------------|------------------| |**Total**||1,734,887|1,772,359| |||------------------|------------------| |**Net movement in funds**||43,140|8,566| |**Reconciliations of funds**|||| |Total funds brought forward||9,542|976| |||--------------------|--------------------| |**Total funds carried forward**||52,682|9,542| |||=========|=========| All transactions are derived from continuing activities. All gains and losses recognised in the year are included in the Statement of Financial Activities. The accompanying notes form part of these financial statements. 10 NATURAL RL8OURCE CHARTER LIMITED BALANCE SHEET AS AT31 DECEMBER 2022 COMPANY NUMBER IY1645971 21122 21)21 FIXED A&SETS Tangible fix¢d ￿gets 7,634 CURRENf ASSETS Cash at Bank Debtors 24J15 117.016 1658 111844 141 J31 115.502 Credltorn.. Amounts falliti8 thse within one ye&r (96283) (105.960} NET CURRENT ASSETS 45,048 9,542 NET A￿£T8 51682 9,542 FUNDS io Unr•gtrlet•d General 51682 9J42 516f2 9,542 Th¢ finan¢i4J 5thtem¢nts *trt 4yprDv¢d aThl auUMwiwJ for iswe by th¢ Bc*rd of th¢ Tn￿ on 14 tr1 SI￿ed below on its b￿￿]f by.. Alan Dethcrid8e. Tn]st¢¢ The ll¢fA)mp8ttying notes forn) w¢ of these fin￿1￿ S¢atemenLt ## **NATURAL RESOURCE CHARTER LIMITED** ## **CASH FLOW STATEMENT** ## **FOR THE YEAR ENDED 31 DECEMBER 2022** ||**Total funds**|**Total funds**|**Total funds**| |---|---|---|---| ||**2022**||**2021**| ||**£**||**£**| |**Cash (outflows)/inflows from operating activities**|30,130||(12,941)| |**Cash flows from investing activities:**|||| |Purchase of tangible fixed assets|(8,473)||-| ||-----------------||-----------------| |**Decrease in cash and cash equivalents in the reporting**|21,657||(12,941)| |**period**|||| |**Cash and cash equivalents at the beginning of the**|||| |**reporting period**|2,658||15,599| ||--------------------||--------------------| |**Cash and cash equivalents at the end of the reporting**|||| |**period**|24,315||2,658| ||==========||==========| |||**2022**|**2021**| |||**£**|**£**| |**Reconciliation of net movement in funds to cash flow**|||| |**from operating activities**|||| |Net movement in funds||43,140|8,566| |Depreciation||839|13,443| |(Increase)/decrease in debtors||(4,172)|
11,877| |Increase/(decrease) in creditors||(9,677)|
(46,827)| |||---------------------|---------------------| |**Net cash used by operating activities**||30,130|(12,941)| |||==========|==========| |**Analysis of cash and cash equivalents**||**2022**|**2021**| |||**£**|**£**| |Cash in hand||24,315|2,658| |||-----------------|-----------------| |**Total cash and cash equivalents**||24,315|2,658| |||========|========| 12 ## **NATURAL RESOURCE CHARTER LIMITED** ## **NOTES TO THE FINANCIAL STATEMENTS** ## **FOR THE YEAR ENDED 31 DECEMBER 2022** ## **1. ACCOUNTING POLICIES** ## **Basis of Preparation** The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) – (Charities SORP (Second Edition, effective 1 January 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006. Natural Resource Charter Limited meets the definition of a public benefit entity under FRS102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy notes. ## **Going Concern** The Trustees have concluded that there are no material uncertainties related to events or conditions that may cast significant doubt on the ability of the charity to continue as a going concern. The Trustees consider that the charitable company’s funding arrangement with its parent, NRGI, allows it to continue the operational existence for the foreseeable future. Accordingly, the financial statements have been prepared on a going concern basis. ## **Income** Incoming resources represent donations, including donated services received from the parent charity, NRGI, and is accounted for on a receivable basis **.** All income is recognised once the charity has entitlement to income, it is probable that income will be received and the amount of income receivable can be measured reliably. ## **Direct Charitable Expenditure** Direct charitable expenditure consists of all expenditure relating to the objective of the Charity. All costs are directly attributable to the activities under which they have been analysed. ## **Governance Costs** Governance costs include expenditure on the governance of the Charity and are primarily associated with constitutional and statutory requirements. ## **Tangible Fixed Assets** Fixed assets costing US$1,000 or its equivalent in local currency or more, with a useful life of at least one year are capitalised. As an alternative to prorating the depreciation in the year of acquisition or disposal, the charity takes one half year of depreciation in both the years of acquisition and disposal. Depreciation is calculated by the straight-line of the estimated useful lives of the assets on the following basis Fixtures & equipment - 10 years Computer equipment - 3 years Other office equipment - 7 years Website - 5 years Leasehold improvements - Term of lease ## **Funds** General Funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes. ## **Pension** 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. 13 ## **NATURAL RESOURCE CHARTER LIMITED** ## **NOTES TO THE FINANCIAL STATEMENTS (continued)** ## **FOR THE YEAR ENDED 31 DECEMBER 2022** ## **1. ACCOUNTING POLICIES (continued)** ## **Company status** The company is a company limited by guarantee. The members of the company are the Trustees named on Page 1. In the event of the company being wound up, the liability in respect of the guarantee is limited to £10 per member of the company. ## **Estimates and Judgement** Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Although these estimates are based on management’s best knowledge of the amount, events or actions, actual results may ultimately differ from those estimates. The Trustees consider depreciation to be subject to estimation and judgement. ## **Financial Instruments** Basic financial instruments are initially recognised at transaction value and subsequently measured at amortised cost with the exception of investments which are held at fair value. Financial assets held at amortised cost comprise cash at bank and in hand, together with trade and other debtors. A specific provision is made for debts for which recoverability is in doubt. Cash at bank and in hand is defined as all cash held in instant access bank accounts and used as working capital. Financial liabilities held at amortised cost comprise all creditors except social security and other taxes. ## **Debtors** Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due. ## **Cash at bank and in hand** Cash at bank and cash in hand includes cash and short term highly liquid investments. ## **Creditors and provisions** Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due. ## **Employee benefits** ##  **Short term benefits** Short term benefits including holiday pay are recognised as an expense in the period in which the service is received. ##  **Employee termination benefits** Termination benefits are accounted for on an accrual basis and in line with FRS 102. |**2.**|**NET MOVEMENT IN FUNDS**|**2022**|**2021**| |---|---|---|---| |||**£**|**£**| ||The net movement in funds is stated after charging:||| ||Auditor’s fee|13,800|12,000| ||Depreciation|839|13,443| |||=======|=======| During the year, no Trustees received any remuneration (2021: £Nil) During the year, no Trustees received any benefits in-kind (2021: £Nil) During the year, no Trustees received any reimbursements of expenses (2021: £Nil) 14 ## **NATURAL RESOURCE CHARTER LIMITED** ## **NOTES TO THE FINANCIAL STATEMENTS (continued)** ## **FOR THE YEAR ENDED 31 DECEMBER 2022** |**3.**|**CHARITABLE ACTIVITIES**|**Direct**|**Direct**|**Total**|**Total**| |---|---|---|---|---|---| |||**Staff costs**|**Other and**|**2022**|**2021**| ||||**Governance**||| ||||**costs**||| |||**£**|**£**|**£**|**£**| ||Technical advice, advocacy, applied research, policy||||| ||analysis, and capacity development|1,263,918|470,969|1,734,887|1,772,359| |||=========|=========|========|=========| ||**Prior year comparative - 2021**|1,392,863|379,496|1,772,359|1,569,992| |||=========|=========|========|=========| |**4.**|**GOVERNANCE COSTS**|||**2022**|**2021**| |||||**£**|**£**| ||Auditor’s fee|||13,800|12,000| |||||----------------|----------------| |||||13,800|11,400| |||||========|========| ||Governance costs have been allocated to charitable activities in full.||||| |**5.**|**STAFF COSTS AND NUMBERS**|||**2022**|**2021**| |||||**£**|**£**| ||Staff costs during the year were as follows:||||| ||Wages and salaries|||1,034,543|1,147,471| ||Social security costs|||131,484|128,453| ||Pension costs|||97,891|116,939| |||||----------------|----------------| |||||1,263,918|1,392,863| |||||========|========| The average number of full-time equivalent employees during the two months was as follows: ||**2022**|**2021**| |---|---|---| ||**Number**|**Number**| |Programmatic staff|12|16| |Communications, administration and accounting|5|2| ||----------------|----------------| ||17|18| ||========|=========| |The number of higher paid staff whose taxable emoluments fell into higher salary bands|**2022**|**2021**| |were:|**Number**|**Number**| |£60,001 - £70,000|2|1| |£70,001 - £80,000|-|2| |£80,001 - £90,000|1|1| |£90,001 - £100,000|1|1| |£100,001 - £110,000|1|1| |£110,001 - £120,000|-|-| |£120,001 - £130,000|-|-| |£130,001 - £140,000|1|1| ||----------------|-----------------| NRGI’s senior management team is based in the US and their salaries are not included in these financial statements. The charitable company operates a defined contribution pension scheme. During the year contributions paid across totalled £97,891 (2021: £116,939). At the year-end there were outstanding contributions of £0 (2021: £0). 15 ## **NATURAL RESOURCE CHARTER LIMITED** ## **NOTES TO THE FINANCIAL STATEMENTS (continued)** ## **FOR THE YEAR ENDED 31 DECEMBER 2022** |**6.**|**TANGIBLE FIXED ASSETS**|||||| |---|---|---|---|---|---|---| |||**Computer**|**Software**|**Fixtures &**|**Other**|**Total**| |||**equipment**||**Fittings**|**equipment**|**2022**| |||**£**|**£**||**£**|**£**| ||**Cost**|||||| ||At 1 January 2022|59,719|1,978|39,829|790|102,316| ||Additions|132|-|8,158|183|8,473| ||Disposal|-|-|(37,357)|-|(37,357)| |||-----------------|-----------------|-----------------|-----------------|-----------------| ||At 31 December 2022|59,851|1,978|10,630|973|73,431| |||-----------------|-----------------|-----------------|-----------------|-----------------| ||**Depreciation**|||||| ||At 1 January 2022|59,719|1,978|39,829|790|102,316| ||Charge for the year|44|-|612|183|839| ||Depreciation on disposal|-|-|(37,357)|-|(37,357)| |||-----------------|-----------------|-----------------|-----------------|-----------------| ||At 31 December 2022|59,763|1,978|3,084|973|65,797| |||-----------------|-----------------|-----------------|-----------------|-----------------| ||**Net Book Value**|||||| ||At 31 December 2022|88|-|7,546|-|7,634| |||========|========|========|========|========| ||At 31 December 2021|-|-|-|-|-| |||========|========|========|========|========| |**7.**|**DEBTORS**||||**2022**|**2021**| ||||||**£**|**£**| ||Prepayments||||48,457|59,664| ||Other debtors||||68,559|53,180| ||||||-----------------|-----------------| ||||||117,016|112,844| ||||||========|========| |**8.**|**CREDITORS: amounts due**||||**2022**|**2021**| ||**within one year**|||||| ||||||**£**|**£**| ||Trade creditors||||11,773|11,810| ||Accrued expenses||||46,889|56,904| ||Other taxation and social security||||37,621|37,246| ||||||-----------------|-----------------| ||||||96,283|105,960| ||||||========|========| |**9.**|**ANALYSIS OF NET ASSETS BETWEEN**|**FUNDS**|||**Total funds/**|| ||||||**Unrestricted**|| |||||||**Funds**| |||||||**£**| ||**Represented by:**|||||| ||Fixed assets|||||7,634| ||Current assets|||||141,331| ||Current liabilities|||||(96,283)| |||||||--------------------| ||Fund balances at 31 December 2022|||||52,682| |||||||==========| 16 ## **NATURAL RESOURCE CHARTER LIMITED** ## **NOTES TO THE FINANCIAL STATEMENTS (continued)** ## **FOR THE YEAR ENDED 31 DECEMBER 2022** |**10.**|**FUNDS**|**Balance**|||**Balance**| |---|---|---|---|---|---| |||**1 January**|**Income**|**Expenditure**|**31 December**| |||**2022**|||**2022**| |||**£**|**£**|**£**|**£**| ||General Fund|9,542|1,778,027|(1,734,887)|52,682| |||----------------|--------------------|------------------|---------------| ||**Total unrestricted funds**|9,542|1,778,027|(1,734,887)|52,682| |||=========|=========|========|========| ||**FUNDS – COMPARATIVES 2021**|**Balance**|||**Balance**| |||**1 January**|**Income**|**Expenditure**|**31 December**| |||**2021**|||**2021**| |||**£**|**£**|**£**|**£**| ||General Fund|976|1,780,925|(1,772,359)|9,542| |||---------------|--------------------|------------------|---------------| ||**Total unrestricted funds**|976|1,780,925|1,772,359|9,542| |||=========|=========|=========|=========| ## **11. ULTIMATE PARENT UNDERTAKING AND CONTROLLING PARTY** The entity is a company limited by guarantee with no share capital. The company is controlled by its members who have equal voting rights. ## **12. OPERATING LEASE NOTE** The total of the future minimum lease payments at the end of the year are: ||**2022**|**2021**| |---|---|---| ||**Leasehold**|**Leasehold**| ||**£**|**£**| |Not later than 1 year|134,160|135,657| |Later than 1 year and not later than 5 years|145,340|285,090| ||---------------|---------------| ||279,500|420,747| ||========|========| ## **13. RELATED PARTIES TRANSACTION** Natural Resource Governance Institute (NRGI), is a charity registered in the United States of America. There is a Cooperation Agreement between the entities. During the year, donations of £1,778,028 (2021: £1,780,925) was received from NRGI. There are no other related parties in the current or prior period. 17