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2020-12-31-accounts

Company Registration No. 10986594 Registered Charity No. 1176782

The ELMA Foundation (UK)

Annual Report and Financial Statements

for the year ended 31 December 2020

The ELMA Foundation (UK)

CONTENTS Page
Legal and administrative information 1
Trustees’ report (including the strategic report and incorporating the directors' report) 2
Trustees’ responsibilities statement 6
Independent auditor's report 7
Statement of financial activities 11
Balance sheet 12
Cash flow statement 13
Notes to the financial statements 14

The ELMA Foundation (UK)

For the period ended 31 December 2020

LEGAL AND ADMINISTRATIVE INFORMATION

GOVERNING DOCUMENT

Memorandum and articles of Association dated 17 October 2019

COMPANY NUMBER 10986594

CHARITY NUMBER 1176782

REGISTERED OFFICE

Third Floor, 20 Old Bailey, London EC4M 7AN

TRUSTEES

C Calder R Calder R Douglas E Graham M Lancaster

BANKER

J.P. Morgan Private Bank 60 Victoria Embankment, London EC4Y 0JP

SOLICITOR

Withers LLP Third Floor, 20 Old Bailey, London EC4M 7AN

AUDITOR

Deloitte LLP Hill House 1 Little New Street London EC4A 3TR

1

The ELMA Foundation (UK) For the period ended 31 December 2020

TRUSTEES’ REPORT

(including the Strategic Report and incorporating the directors’ report)

The ELMA Foundation (UK) (the “Charity”) is a private company limited by guarantee, incorporated on 28 September 2017 and registered as a charity in England and Wales on 23 January 2018.

The Trustees present their annual report (including the Strategic Report) on the affairs of the charity, together with the audited financial statements and auditor’s report for the year ended 31 December 2020.

The financial statements have been prepared in accordance with the accounting policies set out in note 1 in the accounts and comply with the Charity’s memorandum and articles of association, the Companies Act 2006 and the Statement of Recommended Practice, “Accounting and Reporting by Charities”, updated 1 January 2019 (“SORP”).

STRUCTURE, GOVERNANCE AND MANAGEMENT

The Trustees, who are also directors of the charitable company, who served during the year and up to the date of this report, were:

C Calder R Calder-Harawi R Douglas E Graham M Lancaster

The Trustees were appointed by the initial member and any further trustees will be appointed on a similar basis. On appointment, new Trustees sign a trustee declaration statement committing them to giving their time and expertise. The Trustees are provided with an information pack on the Charity and are directed to the Charity Commission essential trustee guide. The Trustees give their time voluntarily and receive no remuneration or other benefits and are required to disclose all relevant interests and withdraw from decisions where a conflict of interest arises.

OBJECTIVES AND ACTIVITIES

The Charity has been established as a grant-making charity. The Charity supports a range of charities, predominantly those that are registered and based in the UK, which undertake activities and initiatives in Africa and the UK, which fall within the Charity’s objects.

The objects of the Charity (the “Objects”) are:

for the benefit of the public in the Continent of Africa and in the United Kingdom.

The grant-making activity of investing in organisations that improve the lives of children in Africa and in the United Kingdom is guided by the Charity’s portfolio-based strategies that target the following six focus areas:

2

The ELMA Foundation (UK) For the period ended 31 December 2020

TRUSTEES’ REPORT

(including the Strategic Report and incorporating the directors’ report) (continued)

A further category, Special Opportunities, denotes grants that are directly in furtherance of the Objects of the Charity but where the purpose of the grant spans across a number of focus areas and/or do not fall within any specific focus area. The respective approaches, targeted geographical locations, measures of success and what success looks like are articulated in the Charity’s investment framework (the “Investment Framework”) that guides its philanthropy in these focus areas.

The Trustees review the Investment Framework annually to ensure that the strategies continue to be fit for purpose in furtherance of the Objects.

PUBLIC BENEFIT

The Trustees confirm that they have referred to the guidance contained in the Charity Commission’s general guidance on public benefit when reviewing the Charity’s aims and objectives, planning future activities and setting the grant-making policy for the year. Despite receiving donation income, the Charity is not engaged in fundraising with the public, either directly or through third parties. Further details of grants made by the Charity and organisations supported can be found in note 5 of the financial statements.

MANAGEMENT AND GOVERNANCE ARRANGEMENTS

The Trustees delegate the implementation of their decisions and day-to-day management of the affairs of the Charity to one of the Trustees, who together with her administrative staff voluntarily contribute their time and resources to administer the Charity’s activities.

The Trustees annually review the risks that the Charity faces. The main risk is around the use of our grant funds. This is the risk that the activities undertaken by grant recipients are not in furtherance of the Objects of the Charity, are not in line with the approved use of grant funds and the grants are not made to reputable and impactful charities with programmes in Africa and the UK. This risk has been mitigated by ensuring that grants are made in accordance with the Investment Framework and the established grant-making policy.

CONNECTIONS TO A NON-CHARITY

The Trustees have applied the Charity Commission Guidance regarding connections to a non-charity and confirm that they have addressed the risks of any connection. They regularly monitor the connections to non-charities to ensure that the Charity’s resources are not applied to advance any non-charitable interest. Below we have summarised our connections to non-charities:

3

The ELMA Foundation (UK) For the period ended 31 December 2020

TRUSTEES’ REPORT

(including the Strategic Report and incorporating the directors’ report) (continued)

PROCEDURE AND POLICY FOR GRANT-MAKING

The Trustees are committed to ensuring that the Charity’s funds are used for purposes that are exclusively charitable under the law of England and Wales and are used effectively and for public benefit. To that end, they have formulated a grantmaking policy, which may be amended from time to time, to set out clear guidelines to be followed by the Trustees when considering any proposed grant. The Charity does not consider unsolicited proposals for grant funding.

Most of the Trustees have extensive experience in grant-making within the sectors covered by the Objects and will apply such experience in the identification and selection of appropriate grant recipients for the Charity.

Additionally, the Trustees have appointed a grants advisory services provider to, in accordance with the Investment Framework, source potential funding programmes, to make funding recommendations to the Trustees as to possible grants and to monitor performance of grant recipients to ensure compliance with grant terms and conditions, achievement against specified performance criteria and specific outcomes.

Multi-year grants are funded in multiple disbursements. The Charity’s multi-year grant agreement permits, for example, a three-year programme to be contracted for the full three-year term of the programme, but subject to annual reviews for compliance to specified conditions, performance criteria, outputs and outcome.

For each new grant, a grant proposal, which includes the full programme budget and grant activities, is developed by the grant recipient. The Trustees collectively consider the grant and if approved, communicate their intention to grant up to the full grant term however only commit to fund the initial programme period (usually twelve months). The Trustees expense such disbursement, with each subsequent disbursement being subject to annual review for compliance with specified performance criteria and conditions for release of disbursement. During the annual review, the progress of the grant is assessed and if applicable, the subsequent year’s work plan, budget, specified performance indicators, milestones and deliverables are agreed with the grant recipient and amended accordingly.

Further, failure to satisfactorily meet the grant conditions or if there are significant changes to any of the budgetary and other assumptions on which the Charity has relied in making the grant may result in the termination, suspension, adjusting the timing and/or amount of the grant, or alternate conditions being imposed thereon.

STRATEGIC REPORT

Achievements and performance

During the year the Trustees approved grant disbursements totalling £3,287,052 (2019: £4,046,963 i.e. the net disbursement after offsetting return of unspent grant funds of £103,248). Of the total grant disbursement, £1,620,769 (2019: £3,871,522) was made within the Neglected Tropical Disease focus area, £1,106,283 (2019: £278,689) within Special Opportunities and a total of £560,000 (2019: £Nil) within Early Childhood Development and Private Sector Solutions. These grants are in line with the Investment Framework, which forms the Charity’s objectives for the year. Further details of grants made by the Charity, the respective focus areas and organisations supported can be found in note 5 of the financial statements.

Financial review and reserves

The Charity neither seeks nor receives funding from the general public. Donations received were £6,500,000 (2019: £4,000,000) and interest income was £16,795 (2019: £20,116). Charitable expenditure amounted to £3,378,074 (2019: £4,154,934), where grant funding accounted for 97.3% (2019: 97.4%) and support costs (including governance costs) accounted for 2.7% (2019: 2.6%) of total charitable expenditure.

The Charity’s reserves policy is to maintain, at the end of each accounting period, cash and cash equivalent reserves to cover one year’s grant disbursements on active grants plus one year’s budgeted operating expenditure. As at 31 December 2020, the Charity had unrestricted reserves of £8,392,725 (2019: £5,254,004), which was in excess of requirements of its reserves policy. As at 31 December 2020, forecast conditional disbursements that are subject to annual reviews during the year ending 31 December 2021 are at most £6,422,231 (2019: £4,008,283) and direct and support costs are not expected to exceed £360,000.

4

The ELIKA Foulldation (UK) For the period ended 31 December 2020 TRUSTEES, REPORT (ineluding the Strategic Report incorporating the directors, report) (continued) FtrruRE PLANS AND GOING CONCERN The Charity intends to continue to support reputable and impactful ¢harities whose ultitnate bcnefJciarie5 are thc children and young people in need in the continent of Africa and the UK. all in pursuance of its Objeets, which are entirely chAritable. li endeavours to further its Objects by pur5uin8 the strdte8ies outlined in th¢ Inv¢stm¢Dt Fr8m¢work in the Short to medium tenn. Activities for the upcoming year inclltde moDjtoring and reviewing the existing granis and ￿ntinUing to &ctively pursue grant-makiog opportunities that align with the Inyesimenl Frnmework. The Trust¢e5 considered the potential impact of the COVID-19 Vin￿ on the Charity's ability to conlinuc a going concern for the period of at least 12 months from the date of 5ignin8. The Charity i5 not eTh8a8ed in fUl￿raisIng with th¢ publi¢. ¢ith¢r d1￿CtlY or through third parties and expeets to re¢eive don8tions to ¢ov¢r futhre grant ¢ommiimet)ts as they fall due. in line wilh i15 re5erve5 policy. As a result, thc Trustees do not anticipate ihai there will be any signifi¢arti financial impact. The Trustee5 r￿QgniSe the challengirtg effects of COVID-19 ar￿ Should there be an LiJcred5e Ln granl-makin8 8Ctiviti¢s. th¢5¢ will b¢ sllPPOrt¢d by additional donations. ensuring the reserves tK>licy is met. AUDITOR Deloitte LLP have expressed theirwillin8na85to continue in offiv and will r¢main ￿ audilors unless a resolution is passed by the company chaTh8in8 this status. Th¢ Tiust¢es' R¢port 4pproved by the Board and si8n¢d on its behalf by: Martin La Trustee 31 March 2021 sler

The ELMA Foundation (UK) For the period ended 31 December 2020

TRUSTEES’ RESPONSIBILITIES STATEMENT

The Trustees (who are also directors of The ELMA Foundation (UK) for the purposes of company law) are responsible for preparing the Trustees' Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".

Company law requires the Trustees to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable 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 charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as the Trustees are aware:

6

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF The ELMA Foundation (UK)

Report on the audit of the financial statements

Opinion

In our opinion the financial statements of The ELMA Foundation (UK) (the ‘charitable company’):

We have audited the financial statements which comprise:

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).

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 charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (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.

7

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF The ELMA Foundation (UK)

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual 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.

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 course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement, the trustees (who are also the directors of the charitable company for the purpose 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.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Extent to which the audit was considered capable of detecting irregularities, including fraud

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.

8

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF The ELMA Foundation (UK)

We considered the nature of the charitable company’s industry and its control environment, and reviewed the charitable company’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory frameworks that the charitable company operates in, and identified the key laws and regulations that:

We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

We presume a risk of material misstatement due to fraud in revenue recognition which is related to the completeness of donation income. To address this risk, we reviewed the Trustee minutes, and reviewed all bank statements in the period, and post year end satements up to the date of this report to test whether income had been appropriately included in the financial statements.

We identified a risk due to fraud related to the application of grants for charitable purposes. We have addressed this risk by evaluating the design and implementation of the controls over the initial due diligence of potential grantees and the process for monitoring the activity of the grantees including a review by management of the quarterly monitoring reports from The ELMA Philanthropies Services (U.S.) Inc as well as the reports received from grantees. We have substantively tested a sample of grant payments to the original approved application. In addition, we tested that the recipients were appropriately registered with the Charity Commission and that all due documents were received.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:

9

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF The ELMA Foundation (UK)

Report on other legal and regulatory requirements

Opinions on other matters prescribed by the Companies Act 2006

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

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 any material misstatements in the strategic report or the directors’ report included within the trustees’ report.

Matters on which we are required to report by exception

Under the Companies Act 2006 we are required to report in respect of the following matters if, in our opinion:

We have nothing to report in respect of these matters.

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.

Nikki Loan FCA (Senior statutory auditor)

For and on behalf of Deloitte LLP

Statutory Auditor London, UK

31 March 2021

10

The ELMA Foundation (UK)

STATEMENT OF FINANCIAL ACTIVITIES (including income and expenditure account) Year ended 31 December 2020

----- Start of picture text -----
Unrestricted funds
Note 2020 2019
£ £
INCOME FROM:
Donations 3 6,500,000 4,000,000
Interest income 3 16,795 20,116
TOTAL INCOME 6,516,795 4,020,116
EXPENDITURE ON:
Charitable activities 4 3,378,074 4,154,934
TOTAL EXPENDITURE 3,378,074 4,154,934
NET MOVEMENT IN FUNDS 3,138,721 (134,818)
RECONCILIATION OF FUNDS:
Total funds brought forward 5,254,004 5,388,822
Net movement in funds for the year 3,138,721 (134,818)
Total funds carried forward 8,392,725 5,254,004
----- End of picture text -----

There were no other recognised gains or losses other than those listed above and the net income for the year. All income and expenditure derives from continuing activities.

The notes on pages 14 to 18 form part of these financial statements.

11

The ELMA Foundation (UK) BALANCE SHEET At 31 December 2020 Nrte 2020 2019 CuRR￿￿T ASSErs Cash ai bank and ￿ h￿d Short4¢nninvestttxnts - t4iuidily Fund Pr¢payment and Accrued incon &424.235 I J03,023 3,783,932 2.988 5.290,543 8.426.035 Ci'edltors: an￿￿￿tS falling due withMI one year 33 10 36,539 Totsl Assets less Current iialxlities Ixing Net Current Assets 8,39171% 5,254,IxM NEf ASSM FUNDS Unrestri¢ted ￿ndS TOTAL FUPIDS 8 J92,725 5354,004 The notes on pages 14 to 18 fonn part of these financial statementi. These financial statements of The ELMA Foundation (UK) r¢gist¢red number 10986594 were approved by the Board of Trustee anda orÈsed for i&%ue on 31 March 2021. They were signed on its behalf by.. Mart Tn]stee sler 12

The ELMA Foundation (UK)

CASHFLOW STATEMENT Period ended 31 December 2020

----- Start of picture text -----
2020 2019
£ £
Net cash/(deficit) provided by operating activities 3,119,885 (152,064)
Cash flows from investing activities - interest received 16,795 20,116
Net change in cash and cash equivalents in the period 3,136,680 (131,948)
Cash and cash equivalents at the beginning of the period 5,287,555 5,419,503
Cash and cash equivalents at the end of the period 8,424,235 5,287,555
Analysis of cash and cash equivalents
Cash in hand 8,424,235 1,503,623
Cash equivalents - 3,783,932
Total cash and cash equivalents 8,424,235 5,287,555
Reconciliation of net income/(expenditure) to net cash flow from
operating activities 2020 2019
£ £
Net income/(expenditure) for the year (as per the statement of
financial activities) 3,138,721 (134,818)
Adjustments for:
(Decrease)/Increase in creditors (3,229) 5,858
Investment income (16,795) (20,116)
Decrease/(Increase) in debtors 1,188 (2,988)
Net cash/(deficit) provided by operating activities 3,119,885 (152,064)
----- End of picture text -----

13

The ELMA Foundation (UK)

NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2020

1. COMPANY AND CHARITABLE STATUS

The ELMA Foundation (UK), (the “Charity”), Company Registration Number 10986594, was incorporated on 28 September 2017 in England and Wales as a company limited by guarantee not having a share capital. It is a Public Benefit Charity and is registered in England and Wales, Registered Charity Number 1176782.

2. ACCOUNTING POLICIES

Basis of accounting

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) (updated 1 January 2019) – (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

Assets and liabilities are recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note.

The functional and presentational currency is British Pounds Sterling (GBP).

Going concern

In accordance with its reserves policy, the Charity has cash and cash equivalent reserves to cover one year’s grants disbursements on existing commitments and budgeted operating expenditure. It is considered to have sufficient resources to meet its obligations as they fall due for at least 12 months from the date of signing and despite the impact of COVID-19, there is no indication that the Charity would not be able to operate as a going concern for the foreseeable future. The Trustees, therefore, consider that the going concern assumption is an appropriate basis on which to prepare these financial statements.

Income

Income is recognised when there is an entitlement to the funds, it is probable that the income will be received and the amount can be measured accurately.

Expenditure

All expenditure is accounted for on an accrual basis. Expenditure includes attributable VAT, which cannot be recovered. Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably.

Expenditure on charitable activities includes grant funding, direct and support costs.

Grant funding is expensed in the period following execution of the grant award agreement and/or when the specified performance criteria and conditions for release of payment have been met by the grant recipient.

Direct costs are costs of grant-making and monitoring.

Support costs include governance costs consisting of audit, legal and company secretarial fees.

Financial assets and liabilities

Financial assets and financial liabilities are recognised when the Charity becomes a party to the contractual provisions of the instrument. Financial assets which qualify as basic financial instruments as laid out in FRS 102 paragraph 11.8, including trade and other receivables and cash and bank balances. These are valued at amortised cost and assessed for impairment at the end of each reporting period.

Financial assets are derecognised when and only when (a) the contractual right to the cash flows from the financial asset expire or are settled, (b) the Charity transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or (c) the Charity, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.

14

The ELMA Foundation (UK)

NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2020

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Charity after deducting all of its liabilities. All financial assets and liabilities are initially measured at transaction price (including transaction costs) unless the arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.

Tax

The ELMA Foundation (UK), as a registered charity, is exempt from Corporation Tax under the Corporation Tax Act 2010 (chapters 2 and 3 pf part ii, section 466 onwards) or section 256 of the Taxation for Chargeable Gains Act 1992, to the extent surpluses are applied to its charitable purposes. The Charity is exempt from tax as all its income is applied for charitable purposes.

Critical accounting judgements and key sources of estimation and uncertainty

In the application of the Charity’s accounting policies, which are described in this note, the Trustees are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. There are no critical accounting judgements or key sources of estimation uncertainty at the reporting date.

3. ANALYSIS OF TOTAL INCOME

Donations
Interest income
Total		 2020
£
6,500,000
16,795
6,516,795		 2019
£
4,000,000
20,116
4,020,116

4. ANALYSIS OF CHARITABLE EXPENDITURE

Grants to organisations (see note 5)
Grants advisory service (see note 6)
Legal and company secretarial services
Audit and tax advice
Miscellaneous cost
Total		 Grant
funding
Direct
costs
Support
costs
2020
£
£
£
£
3,287,052
-
-
3,287,052
-
62,802
-
62,802
-
-
4,775
4,775
-
-
20,574
20,574
-
-
2,871
2,871
3,287,052
62,802
28,220
3,378,074

15

The ELMA Foundation (UK)

NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2020

4. ANALYSIS OF CHARITABLE EXPENDITURE (continued)

Grant
Direct costs		 Grant
Direct costs		 Support
funding costs 2019
£ £ £ £
Grants to organisations (see note 5) 4,046,963 - - 4,046,963
Grants advisory service (see note 6) - 62,622 - 62,622
Legal and company secretarial services - - 25,409 25,409
Audit and tax advice - - 19,042 19,042
Miscellaneous cost - - 898 898
Total 4,046,963 62,622 45,349 4,154,934
one of the Trustees (or any persons connected with them) received any remuneration, benefits or reimbursement of
penses from the Charity during the year (2019: £Nil). There were no employees in the year (2019: None). The
pport costs in the year include the governance costs incurred, being audit, legal and company secretarial services.
l support costs above support grant-making activities.
EXPENDITURE ON GRANTS
o grants were made to individuals. Grants have been made/(refunded) during the financial years to/(from)
ganisations within the following sectors:
Grants to organisations Focus Areas 2020 2019
£ £
Royal Commonwealth Society for the Neglected Tropical Diseases 1,620,769 3,871,522
Blind
Clean Air Fund Special Opportunities 650,000 -
CAMFED International Special Opportunities 252,283 3,871,522
Promoting Equality in African Private Sector Solutions 250,000 -
Schools
Delta Philanthropies Special Opportunities 204,000 -
Centre for Global Development Early Childhood Development 160,000 -
Europe
Lively Minds Early Childhood Development 150,000 -
Absolute Return for Kids (See_Note_ Private Sector Solutions - (103,248)
below)
Total 3,287,052 4,046,963

None of the Trustees (or any persons connected with them) received any remuneration, benefits or reimbursement of expenses from the Charity during the year (2019: £Nil). There were no employees in the year (2019: None). The support costs in the year include the governance costs incurred, being audit, legal and company secretarial services. All support costs above support grant-making activities.

5. EXPENDITURE ON GRANTS

No grants were made to individuals. Grants have been made/(refunded) during the financial years to/(from) organisations within the following sectors:

Note : In accordance with the terms and conditions of the award, following expiration of the grant term, unspent grant funds of £103,248 were refunded by Absolute Return for Kids.

16

The ELMA Foundation (UK)

NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2020

5. EXPENDITURE ON GRANTS (continued)

Multi-year grants are funded in multiple disbursements. The Charity only commits to, and expenses one disbursement at a time, with each subsequent disbursement being subject to review for compliance with specified performance criteria and conditions for release of disbursement. If the specified performance criteria and conditions for release of disbursement are met, further funding of the subsequent disbursement is made.

The total grant disbursements relating to future years, not yet committed, amount to £10,584,709 (2019: £11,157,761) and are anticipated to be paid as follows, provided that the conditions for release of payments are fully met. The Charity expects to receive donations to cover future commitments as they fall due, ensuring that the reserves policy is met.

2021
2022
2023
Total		 £
4,287,000
3,695,000
2,602,709
10,584,709

6. GRANTS ADVISORY SERVICE

The ELMA Philanthropies Services (US) Inc. ("Philanthropies") provides grants advisory service to the Charity to support its grant-making. Philanthropies is appointed on a commercial basis and on a rolling retainer whereby the Charity would be entitled to terminate on three months' notice at the end of any calendar quarter.

During the year, the Charity has received services for four consecutive calendar quarters commencing from Q1 2020, at US$20,000 per quarter. The total charge for Philanthropies' service during the year was £62,802 (2019: £62,622) (US$80,000)).

7. NET INCOME FOR THE YEAR

NET INCOME FOR THE YEAR
2020 2019
Net income is stated after: £ £
Auditor’s remuneration:
Fees payable to the Charity’s auditor for the audit 12,720 12,360
of the Charity’s annual financial statements
Fees payable to the Charity’s auditor for taxation 5,814 6,682
services

8. CREDITORS

2020 2019
Amounts falling due within one year: £ £
Accrued expenses 33,310 36,539

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The ELMA Foundation (UK)

NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2020

9. RELATED PARTIES

Two of the five Trustees of the Charity are on the Board of Directors of The ELMA Philanthropies Services (US) Inc. (“Philanthropies”) and accordingly are considered to be related parties. Without exception, the conflicted Trustees recuse themselves from decisions pertaining to the appointment and retention of Philanthropies for the provision of grants advisory service, and the setting of the quarterly fee for such grants advisory services. The Trustees are satisfied that appropriate procedures are in place to ensure that any potential conflicts of interest are appropriately managed and avoided. During the year, the Charity incurred expenditure of £62,802 (2019: £62,622) for services rendered from Philanthropies, the amount payable as at 31 December 2020 was £14,829 (2019: £15,086).

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