| CONTENTSF | PAGE NO. | PAGE NO. |
|---|---|---|
| Company Information | 1 | |
| Directors Report | 2 | — 11 |
| Statement of Directors’ Responsibilities | 12 | |
| IndependentAuditors’ Report | 13 | — 15 |
| Statement of Financial Activities | 16 | |
| Balance Sheet | 17 | |
| Statement ofcash flows | 18 | |
| Notes to the Financial Statements | 19 | — 28 |
DocuSign Envelope ID: FA7067 A6-8323-492D-BE4B-42CEAEABD1 B9
TRANSITIONZERO
(A COMPANY LIMITED BY GUARANTEE) REPORT OF THE DIRECTORS FOR THE PERIOD ENDED 31 MARCH 2022
The Trustees, who are also Directors of the charity, submit their report together with the audited financial statements for the period ended 31 March 2022, and confirm that they comply with the requirements of the Charities Act 2011 and the Companies Act 2006, thus including the Directors' Report and Strategic Report under the 2006 Act, together with the audited financial statements for the period.
REFERENCE AND ADMINISTRATIVE INFORMATION
TransitionZero is a charitable company limited by guarantee, company registration number 12914740, charity registration number 1194424.
The company, not having a share capital, is limited by guarantee. Each member's liability is limited to an amount not exceeding £1 in the event of the company being wound up.
The present Trustees, and any past Trustees who served during the period, are given on page 11, together with the names of the senior executive staff. The principal place of business is stated on page 1.
The charitable company extended its reporting period from 12 months to 18 months so that its reporting period was in line with the entities strategy. This extension was agreed and confirmed with Companies House.
STRUCTURE, GOVERNANCE AND MANAGEMENT
Governing Document
The company is governed by its Memorandum and Articles of Association dated 30 September 2020.
Governing Body
The Board of Trustees is responsible for the overall governance of the Charity. Existing trustees appoint new Trustees, and the appointment is minuted.
Recruitment and Training of Trustees
Potential Trustees are identified by existing trustees and are considered against the board's specifications concerning eligibility, competence, specialist skills and local availability. Training has been provided to all new appointees on their obligations as a Trustee. Materials are available to the Trustees on general legal obligation applicable to the organisation.
Organisational Management
Within the organisational structure, day-to-day decision-making is delegated to the staff, in particular the two Co-CEOs. The Board decides matters of policy.
The Co-CEOs manage a team of 8. The Co-CEOs report directly to the Trustees in the following ways:
-
Formal Board Meetings each quarter.
-
Informal discussions and correspondence by email between meetings [to record any necessary approvals such as spend requiring approval under the Delegation of Authority].
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DocuSign Envelope ID: FA7067 A6-8323-492D-BE4B-42CEAEABD1 B9
TRANSITIONZERO
(A COMPANY LIMITED BY GUARANTEE) REPORT OF THE DIRECTORS (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2022
Over the last year, we moved from a basic company limited by guarantee with minimal processes to an registered charity with robust financial and operations functions, inclusive company culture, diverse funding, and internationally regarded governance.
Once we received registration, the Company Secretary and General Counsel provided a workshop for trustees on their responsibilities, including public benefit requirements and the Charities Statement of Recommended Practice (SORP). The organisation's financial systems have been improved in partnership with accountancy firm Crowe. Our Xero based accounting system has been tailored to our projects, cash flow management and grant administration record keeping. The organisation has also been registered for VAT and is in the process of opening new currency accounts to attempt to mitigate currency risk from large non-GBP payments. Payment authorisation rules have also been approved in the Financial Procedures Manual by the Board and applied to the bank mandate. Dual authorisation by two members of senior management has been applied to all payments.
Senior management and board members collectively have over a century of analytical, policy and finance experience in the energy sector. A core focus of senior management and the board has been to create a supportive and enriching workplace, which, having been formed during the covid lockdown, was challenging to achieve. The first step was implementing digital communications processes, such as Slack and Notion. As a result of covid, there was significant fatigue, especially for those who lived in shared houses. To remedy this, as soon as was legally possible, we rented office space where team members could work, if and when they felt comfortable.
To support our culture, the organisation's policies have been designed to put staff needs first, with a gender neutral maternity/paternity policy allowing for four months of paid leave to be taken flexibly over the year after the birth/adoption. This allows for much more effective family planning, especially for those without support networks nearby. In addition, we have time off for dependents leave, allowing caregivers to address urgent issues, flexible working with standard in-office hours of two days per week and 33 days holiday. The current HR focus is the diversity, inclusion, and equality procedures. An equality policy requiring gender blind language in job adverts and placement of technical roles on jobs boards focusing on traditionally excluded groups, for example, Women in Machine Learning, has led to our staff being 55% female and 36% people of colour. Our Board of Trustees is 60% female. We are developing a customised DEi strategy and public statement on diversity and inclusion.
To ensure appraisals create a feedback loop for both staff and management, a 360-appraisal process has been devised and implemented. At the first of these appraisals, the staff member and manager work together to create a list of SMART objectives with deliverable dates. These SMART objective appraisals are supplemented by 360 feedback. 360 feedback entails drafting a self-review of your impact, growth, professional development goals and progress against SMART objectives, an anonymised manager review, and three growth and impact reviews by your peers, two internal and one external. In 02 2021, we went through this process for the first time and concluded 04 with it. We are continuing it for 2022. The process gleaned valuable insights regarding the involvement of staff in setting strategic direction and the appreciation of our focus on team cohesion during covid
Key Management Personnel Remuneration
The trustees consider the board of trustees and joint CEOs as comprising the key management personnel of the charity, having authority and responsibility for planning, directing and controlling the activities of the charity, directly or indirectly, on a day to day basis. All trustees give of their time freely and no trustee remuneration was paid in the year. Details of trustee expenses and related party transactions are disclosed in notes 6 and 14 to the accounts.
The pay of the charity's key staff management personnel is reviewed annually. The Board reviews and compares remuneration to that in other similar non-profit or public sector organisations.
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DocuSign Envelope ID: FA7067A6-8323-492D-BE4B-42CEAEABD189
TRANSITIONZERO
(A COMPANY LIMITED BY GUARANTEE) REPORT OF THE DIRECTORS {CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2022
TRUSTEES
The trustees during the period were as follows:-
Trustees: Thomas David Gardner ( chair) Appointed 30 September 2020 Paraskevi Bertseka Appointed 30 September 2020 Ho Yan Yulanda Chung Appointed 27 October 2021 Mayumi Omi Appointed 25 May 2021 Geoffrey David Sinclair Appointed 30 September 2020
Secretary: Nicola Bristow Appointed 13 October 2021 Resigned 22 December 2021
Key Management Sriya Sundaresan - Co-CEO Personnel: Matthew Gray - Co-CEO
GOING CONCERN BASIS
The charitable company has cash resources to meet its day to day working capital requirements. Current forecasts indicate that the charitable company expects to be able to operate within these facilities for the foreseeable future. The trustees continue to believe the going concern basis of accounting appropriate in preparing the annual financial statements.
PROVISION OF INFORMATION TO AUDITORS
Insofar as each of the directors of the charity at the date of approval of this report is aware there is no relevant audit information (information needed by the charity's auditor in connection with preparing the audit report) of which the charity's auditor is unaware.
Each director has taken all of the steps that they should have taken as a director in order to make themselves aware of any relevant audit information and to establish that the charity's auditor is aware of that information.
AUDITORS
The Auditors, Crowe U.K. LLP will be proposed in accordance with section 485 of the Companies Act 2006.
In preparing this report, the directors have taken advantage of the small companies exemptions provided by Section 415A of the Companies Act 2006.
This Annual Report, prepared under the Charities Act 2011 and the Companies Act 2006, was approved by the Trustee Body of TransitionZero on 1 June 2022 including in their capacity as company directors approving the Strategic Report contained therein, and is signed as authorised on its behalf by:
Thoma�o;1BH'Jfcf�Wrdner ;v:wku Director
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DocuSign Envelope ID: FA7067A6-8323-492D-BE4B-42CEAEABD1B9
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF TRANSITIONZERO (CONTINUED)
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the charitable company's ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the charitable company for fraud. The laws and regulations we considered in this context for the UK operations were General Data Protection Regulation (GDPR), Health and safety legislation and Employment legislation.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Trustees and other management and inspection of regulatory and legal correspondence, if any.
We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within the timing of recognition of income, and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management and the trustees about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals, reviewing accounting estimates for biases, reviewing regulatory correspondence with the Charity Commission, reading minutes of meetings of those charged with governance.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non compliance with all laws and regulations.
Use of our report
This report is made solely to the charitable company's trustees, as a body, in accordance with Part 4 of the Charities (accounts and Reports) Regulations 2008. 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 and the charitable company's trustees as a body, for our audit work, for this report, or for the opinions we have formed.
Alastair Lyon Senior Statutory Auditor For and on behalf of Crowe U.K. LLP Statutory Auditor Reading
Date: 15 June 2022
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DocuSign Envelope ID: FA7067A6-8323-492D-BE4B-42CEAEABD189
TRANSITIONZERO
(A COMPANY LIMITED BY GUARANTEE)
BALANCE SHEET 31 MARCH 2022 COMPANY NUMBER: 12914740
| Notes £ FIXED ASSETS Tangible assets 7 CURRENT ASSETS Debtors 8 140,123 Cash at bank and in hand 110591991 1,200,114 CREDITORS:amounts falling due within one year 9 3711669 NET CURRENT ASSETS NET ASSETS FUNDS Restricted 10 Unrestricted - General TOTAL FUNDS 11 2022 |
£ 12,363 828~~1~~445 80 808 57,898 7821910 80 808 |
|---|---|
Approved and authorised for issue by the Board of Directors on 1 June 2022 and signed on its behalf by:-
The notes on pages 19 to 28 form part of these financial statements
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| 2022 | |
|---|---|
| £ | |
| Cash generated by operating activities (see below): | 1,078,179 |
| Cash flows from investing activities | |
| Purchase offixed assets | (18,188) |
| Change in cash and cash equivalents at the end ofthe period | 1 059991 |
| Reconciliation of netcash flowto movement in net funds/debt | |
| Netfunds at 01/10/2020 | |
| - | |
| Increase! (decrease) in cash in the period | 1,059,991 |
| Netfunds at 31 March 2022 | 1,059,991 |
| Analysis ofcash and cash equivalents | |
| Cash in hand | 1,059,991 |
| Total cash and cash equivalents at end ofthe period | 1,059,991 |
| Reconciliation ofcash flows from operating activities | |
| Net movement in funds | 840,808 |
| Depreciation and amortisation | 5,825 |
| (lncrease)!decrease in debtors | (140,123) |
| Increase! (decrease) in creditors | 371,669 |
| Net cash provided by operating activities | 1,078,179 |
| TrfI | ||
|---|---|---|
| 18 months to | ||
| 31 March 2022 | ||
| £ | ||
| Watttime | — Phase 1 | 195,450 |
| Watttime | — Phase 2 | 224,511 |
| Watttime | —Phase 3 | 159,478 |
| Watttime | — Phase 4 | 151,156 |
| Climate Earth | 120,000 | |
| Centre for Research on Energy and Clean Air RY | 161,995 | |
| Quadrature Climate Foundation | 1,091,667 | |
| Subak | 45,833 | |
| ClimateWorks Foundation | 162,402 | |
| European Climate Foundation | 144,660 | |
| 2,457,152 |
| ET INCOME/(EXPENDITURE) | |
|---|---|
| Total | |
| 18 months to 31 | |
| March 2022 | |
| £ | |
| Is stated after charging: | |
| Depreciation oftangible assets | 5,825 |
| Auditors’ remuneration (excluding VAT) | 12,000 |
| HARITABLE ACTIVITIES | |||
|---|---|---|---|
| Unrestricted | Restricted | Total | |
| Funds | Funds | 18 months | |
| £ | £ | to 31 March | |
| 2022 | |||
| £ | |||
| Staff costs | 173,805 | 843,446 | 1,017,251 |
| Depreciation | 5,825 | - | 5,825 |
| Other operating expenses | 170,513 | 131,287 | 301,800 |
| Support costs | 253,718 | 64,985 | 318,703 |
| 603,861 | 1,039,718 | 1,643,579 |
| OTHER OPERATING EXPENDITURE | |
|---|---|
| 18 months to | |
| 31 March | |
| 2022 | |
| £ | |
| Consulting | 292,500 |
| Project costs | 8,254 |
| Direct expenses | 258 |
| Staff training | 788 |
| 301,800 |
| 18 months to | |
|---|---|
| 31 March 2022 | |
| £ | |
| Staffcosts - recruitment |
39,831 |
| Rent | 44,791 |
| Insurance | 4,676 |
| Repairs and maintenance | 428 |
| Printing, postage and stationery | 472 |
| Software and office expenses | 2,749 |
| Subscriptions | 46,727 |
| Advertising & Marketing | 49,920 |
| Miscellaneous | 19,942 |
| Bank charges | 467 |
| Motor and travel expenses | 2,922 |
| Exchange gains | 737 |
| Professional fees | 68,652 |
| Governance costs Audit and accountancy | 36,389 |
| 318,703 |
| No. | ||
|---|---|---|
| 60,001—70,000 | 2 | |
| 70,001 —80,000 | 1 | |
| 80,001—90,000 | 1 | |
| 190,001—200,000 | 2 |
| Computer | |
|---|---|
| Equipment | |
| £ | |
| COST: | |
| At 1 September2020 | |
| Additions | 18,188 |
| Disposals | - |
| At31 March2022 | 18,188 |
| DEPRECIATION: | |
| At 1 September2020 | |
| Charge forthe period | 5,825 |
| Disposals | |
| At31 March2022 | 5,825 |
| NET BOOK VALUES: | |
| At 31 March 2022 | 12,363 |
| At 1 September 2020 |
| r%orf LlL.I JIX |
|
|---|---|
| 2022 | |
| £ | |
| Trade debtors | |
| Other debtors | 34,165 |
| Prepayments and accrued income | 105,958 |
| 140,123 |
DocuSign Envelope ID: FA7067A6-8323-492D-BE4B-42CEAEABD1B9
TRANSITIONZERO
(A COMPANY LIMITED BY GUARANTEE)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE PERIOD ENDED 31 MARCH 2022
9. CREDITORS: Amounts falling due within one year
| CREDITORS:Amounts falling due within one year | |
|---|---|
| 2021 | |
| £ | |
| Trade creditors | 1,148 |
| Other taxes and social security | 42,129 |
| Other creditors | 1,886 |
| Accruals and deferred income | 326.506 |
| 311 669 |
10. RESTRICTED FUNDS
| 2022 Watttime phases 1 - 4 Client Earh Centre for Research on Energy and Clean Air - China project European Climate Foundation ECF Workshop Total |
1 Sept 2020 Income Expenditure £ £ £ 730,596 (710,019) 120,000 (120,301) 75,625 (72,382) 144,660 (110,357) 261735 (261659} 1091616 U 039118) 31 March 2022 £ 20,577 (301) 3,243 34,303 76 51898 |
|---|---|
Watttime Phases 1-4 - TransitionZero is responsible for providing country and asset level emissions estimates for the electricity and manufacturing sectors to the Climate TRACE coalition. These estimates will include emissions from coal, gas, steel, cement, aluminum, and pulp & paper plants globally.
Client Earth - Asset- and utility-level economic analysis of fossil fuel-fired power plants and plant operators in support of ClientEarth's strategy development and target identification in Asia. This is in order to identify (i) plants at particular risk of stranding and (ii) utilities exposed to stranded asset risk that are failing to transition.
CREA- China Project - This grant was provided to create pressure on China's coal and steel sectors to be more transparent and start to scale down high carbon investments. It was also intended to influence the narrative on the central/provincial government's need to commit to ambitious RE and CO2 peak targets and to conduct analysis and outreach for decarbonisation-awareness-enhancing in the steel sector of China.
ECF - To support energy transition campaigning and decision making in different geographies by developing a credible and transparent alternative to incumbent energy models providers, such as BNEF, BP, IEA, and EIA. The scope of the project is to focus on the electricity sector, while acknowledging the systematic breakdown in the boundaries of electricity generation and consumption, due to dire�t and indirect electrification of other sectors of the economy. As such, the proposed scope is global and aims to model electricity and hydrogen out to 2050.
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| Unrestricted | |||
|---|---|---|---|
| General | Restricted | Total | |
| Funds | Funds | funds | |
| £ | £ | £ | |
| Tangible fixed assets | 12,363 | - | 12,363 |
| Currentassets | 1,142,216 | 57,898 | 1,200,114 |
| Current liabilities | (371,669) | - | (371,669) |
| 782,910 | 57,898 | 840,808 |