the report

Transcription

the report

Investing in
the future
Annual report and financial
statements 2014–15
ICSA annual report and financial statements 2014–15
Overview
The Institute of Chartered Secretaries and Administrators is the professional body for
governance.We have members in all sectors and are required by our Royal Charter to lead
‘effective governance and efficient administration of commerce, industry and public affairs’
Founded in 1891 and granted
a Royal Charter in 1902, the
Institute is governed by an
international council made up of
representatives elected by and
from its membership worldwide.
Australia, Canada, China (including
Hong Kong), Malaysia, New Zealand,
Singapore, Southern Africa and
Zimbabwe operate as divisions of the
Institute, responsible for managing
the Institute’s affairs in their regions
through locally elected committees.
Each committee operates through
an independent service company,
which provides member and
student services, including a local
professional qualifying scheme
for students, and collects member
subscriptions and student fees.
These service companies retain the
ownership of all income generated
in their respective divisions,
including member subscriptions
and student fees, and the assets
and profits that they generate.
The management and control of
the Institute’s assets and operations
in the UK, Republic of Ireland,
the Channel Islands, Isle of Man
and Associated Territories (which
includes countries in Europe, the
Caribbean, Africa and the Middle
East), is the responsibility of
the UKRIAT Committee, a subcommittee of Council, made up of
elected representatives from these
regions and based in the UK.
Our values
On 20 July 2015 the Institute’s
Council designated UKRIAT a
division. The arrangements necessary
to transition UKRIAT’s operations
to its division are expected to
be completed during 2016.
This report covers the activities
in UKRIAT for the twelve months
to 31 July 2015. Because the
income, assets and liabilities of
the existing divisions are owned
by their local service companies
their results are reported separately
and are not consolidated into this
report. Consequently the Institute’s
income, assets and liabilities in
2015 derive only from its activities
in UKRIAT. The financial statements
covering the operations in UKRIAT
are therefore also the financial
statements of the Institute and the
UKRIAT Committee is responsible
for their preparation and approval.
We believe that trusted organisations put governance at their core. This is what
keeps them true to and on track towards their goals, whilst exhibiting the
highest standards of leadership, decision making and behaviour.
Our mission is to develop the skills, effectiveness and profile of people working
in governance roles at all levels and in all sectors.
Our guiding values are:
Openness
We are open, accessible and honest in our business and behaviours.
Integrity
We are impartial, independent and informed.
Authority
We speak for our profession with experience and expertise.
icsa.org.uk
icsa.org.uk
Contents
Annual general
meeting
2
From the UKRIAT President
A resolution to receive
the financial statements
will be put to members
at the annual general
meeting of the United
Kingdom, Republic of
Ireland and Associated
Territories of the Institute
of Chartered Secretaries
and Administrators to be
held at 18.45 on Monday,
8 February 2016 at Saffron
House, 6–10 Kirby Street,
London EC1N 8TS.
4
The year at a glance
6
From the UKRIAT Chief Executive
8
Strategy overview
12
Highlights of the year
14
Policy and outreach
16
Technology for governance
18
Governance review
27
Principal risks and uncertainties
28
UKRIAT Committee
30
Financial review
33
Consolidated revenue statement
33
Consolidated statement of total recognised gains and losses
34
Balance sheets
35
Consolidated cash flow statement
36
Notes to the financial statements
51
Statement of the UKRIAT Committee’s responsibilities
52
Independent auditor’s report
53
ICSA senior management team
Auditor
Moore Stephens LLP
150 Aldersgate Street
London EC1A 4AB
Bankers
Lloyds Bank plc
39 Threadneedle Street
London EC2R 8AU
Institute address
Saffron House
6–10 Kirby Street
London EC1N 8TS
Phone: +44 (0)20 7580 4741
Email: [email protected]
Website: icsa.org.uk
1
From the UKRIAT President
From our constitution to our infrastructure, we are
modernising the way that we do things
At the outset I would like to thank our immediate
Past President Lorraine Young for her hard work in
continuing the transition of ICSA into a more agile
professional body. A large part of this equates to
significant progress in our programme of constitutional
reform and key upgrades to our infrastructure.
Following a vote to adopt new byelaws at the general
meeting of members on 15 September 2014, members
in the Associated Territories became eligible to stand
for and vote in elections to the committee which serves
members' interests in the United Kingdom, Republic of
Ireland and Associated Territories (UKRIAT), something
that was previously only open to members in the UK
and Ireland.
As a consequence, we were delighted to welcome
our first representative from the Associated Territories,
Alison Dillon Kibirige, a past chair of our Uganda
On 20 July 2015, the
international council of
ICSA passed a resolution
for UKRIAT to become
a formal division of the
international Institute
branch, to the UKRIAT Committee. Charles Brown,
who is based in Ireland, is another welcome addition to
the committee.
Perhaps even more significantly, at the very end of
the financial year, on 20 July 2015, the international
2
Overview
council of ICSA passed a resolution for UKRIAT to
become a formal division of the international Institute.
The designation of UKRIAT as a division of the Institute
is a major step in the conclusion of the reforms of the
last two years. In future, UKRIAT will work alongside
the other ICSA divisions on an equal footing, with
improved status and fairer representation for members
in the Associated Territories. Continuing the strategic
progress of the last three years, the team at Saffron
House will be able to concentrate exclusively on raising
the profile and standards of governance to the benefit
of members in all the UKRIAT regions.
Internationally the Institute, under the leadership of a
new Director General, Tim Sheehy, will lead the charge
for global recognition of the value of good governance
and support for the profession worldwide.
This year we have seen outstanding performance
of the group in some areas, particularly our two
successful software subsidiaries ICSA Software
International Limited and ICSA BoardRoom Apps
Limited, which increased their turnover by 35% to
£22.9 million against £17 million in 2013–14. This
puts the group operating profit at £3 million for the
year. Furthermore, 2015 saw the launch of an office
in Frankfurt to support the increasing number of
BoardPad users in Europe.
We have achieved a number of strategic priorities
for the professional body with income from
qualifications, training and events making good
progress. However, costs associated with investment
in our infrastructure – the updating of our IT system,
the introduction of a new single customer view CRM
tool and staff costs – mean that the professional body
is still running at a deficit.
I believe that we are in a very good position to build
upon what we have achieved this year. We have
devoted time to ensuring we have the right talent and
skills in place, and we now have the infrastructure to
support our employees and members.
During my period in office, I hope to work with the
team at Saffron House and our software businesses
Lorraine Young with Alan Yarrow, Lord Mayor of London at the
Worshipful Livery Dinner on 5 May 2015
to ensure that we offer products and services of
exceptional quality. One of our major tasks will be to
ensure that the qualifications that we offer respond to
the needs of all governance professionals. In particular,
we will review our Chartered Secretary Qualifying
Scheme (CSQS) to find out if the content and structure
of the qualification meets the needs of students and
employers now and going forward.
I will also focus my efforts on finalising the transition
to the new division. We are planning for this to be
completed during 2016 – which, fittingly, will coincide
with the 125th anniversary of the foundation of ICSA.
There will be a number of initiatives to raise UKRIAT’s
profile and to position us firmly for the future.
Much has been achieved and I look forward to building
upon this good work during my time as President. I wish
to thank Simon Osborne and his team at Saffron House,
my fellow honorary officers, the UKRIAT Committee,
our branches and our many individual members for all
their efforts both now and in the future.
Frank Curtiss FCIS
UKRIAT President
3
The year at a glance
Ireland
conference,
May 2015
Northern Ireland annual dinner,
November 2014
Guernsey
conference,
April 2015
Ethical Intelligence roundtable,
September 2014
The ICSA Excellence in
Governance Awards,
November 2014
Sir Stuart Hampson,
formerly chairman of the
John Lewis Partnership,
at the Company Secretaries
Conference, March 2015
4
Graduation ceremony,
May 2015
Overview
Group operating income
5%
3% 2%
7%
35%
8%
77%
23%
20%
20%
£000
Software products and services
22,912
Professional body and
other commercial
6,670
Total29,582
£000
£000
Members
2,307
Publishing
476
Training, events, board evaluation
1,343
Magazine
315
Professional qualifications
1,317
International
214
Other activities
159
Other qualifications
539
Group operating income
Members and students
12,000
10,000
2015
2014
Fellows
1,555
1,552
Associates
5,223
5,408
Graduates
826
790
2,907
2,907
478
996
Retirees
8,000
Life
Total
Up by
25%
to £29,582,000
10,98911,653
6,000
Students
2,821
2,936
Group operating surplus
Increased to
£2,986,000
4,000
Up from £1,600,000
in 2014
2,000
0
2014
2015
2014
2015
5
From the UKRIAT Chief Executive
Visible change makes way for behind the scenes consolidation
Last year I reported on the visible changes that we
were making so that we are better placed to meet the
governance needs of organisations and individuals.
We put these into practice during 2014–15. Our
new branding and ‘Trust through governance’
strapline have underpinned our initiatives to improve
awareness of ICSA. We have been working to
communicate why governance matters and how
company secretaries bring value to their organisations.
As part of this campaign, we have built relationships
with partners such as the Law Society, the Law
Society of Ireland and the Institute of Directors, and
networks such as Next Generation NEDs’ Network.
Much of our programme of change and growth
this year has been behind the scenes. We have
restructured a key resource – our qualifications team
– and invested in a new data management and CRM
system as well as updating our elderly IT system.
Our financial results for the year are in line with our
expectations. In the professional body we continue
to see small growth in member subscription income,
which at £2.3 million is slightly up against budget
and last year’s result. We are also starting to see
better results from other parts of the business
such as qualifications, training and conferences.
We have made a good start on growing new revenue
streams. January saw the successful launch of our
new International Finance and Administration
(IFA) suite of qualifications which provides the
supporting knowledge needed for a successful
career in the offshore financial services sector. Take
up has been encouraging. Work is also underway
to develop new certificates in sports governance
6
Overview
and charity law and governance and, in the long
term, to review our principal qualification, the
Chartered Secretaries Qualifying Scheme.
The training business is expanding as we tailor
courses to specific needs and locations. The demand
for bespoke in-company training is increasing and
we are running more courses across the UK and
further afield. In July 2015, for the first time, we
introduced a residential development programme to
equip senior company secretaries with the capability
to lead and influence boardroom behaviour.
I have travelled extensively this year to promote
the value of good governance and the profession,
including attending or speaking at events organised
by the Association of Caribbean Corporate Counsel in
Miami; the National Union of Corporate Secretaries in
Moscow; our Irish region in Dublin and our branches
in Edinburgh, Guernsey, Glasgow, Isle of Man, Jersey,
Mauritius, Northern Ireland, Sheffield and Swindon;
and the fourth Capital Markets Authority/ICSA
Uganda conference in Kampala. I was personally
involved in running a governance masterclass for
the five regional health authority boards of Trinidad
and Tobago, something that we hope to roll out
elsewhere in the English speaking Caribbean region.
I also delivered a training programme in Dublin to the
board of the National Assets Management Agency.
We achieve a great deal with limited resources and
I would like to thank my team for their dedication
and commitment, our members for the work they
do on the ground and the honorary officers and
members of the UKRIAT Committee for their service.
Simon Osborne flanked by, left to right, Hadyn-John Gadsby, Partner,
JD Sellier & Co and Justice Malcolm Holdip ACIS at a Trinidad and Tobago
branch event
2016 will mark ICSA’s 125th anniversary and I am
looking forward to it. We have made good progress
in our programme of reform and our two landmark
events each year are going from strength to strength.
Following a sell-out ceremony in 2014 our annual
awards moved to a larger venue in 2015, and in 2016
the annual conference will be held over two days for
the first time. It promises to be an exciting year.
Simon Osborne FCIS
Chief Executive
Work is also underway to develop new
certificates in sports governance and
charity law and governance
7
Strategy overview
As the professional body for governance our aim is to
become the centre of excellence and influence for all
professionals working in governance and compliance
Isle of Man branch chairman
Adrian Tinkler, Theresa Minnie and Kelly
Padwick at the IFA launch, February 2015
Our core purpose is to champion high
standards of governance by working
with regulators and policy makers,
and to support organisations and
individuals by providing guidance,
training and qualifications.
Raising the profile of governance
Building on the implementation
of the new ICSA brand and ‘Trust
through governance’ strapline in
the last quarter of the 2013–14
financial year, a key strategy for
2014–15 has been to raise the
public profile of governance and
compliance professionals in order
to attract new students, affiliates
and customers and to consolidate
our reputation with government,
regulators and the governance
community at large.
Developing better relationships with
the media has been a priority and it
is pleasing to report that we have
seen significant improvement in
our coverage in the UK national
and regional press, including The
Sunday Times, Financial Times, City
AM and The Guardian. We have
also had more exposure in the
Channel Islands and the Crown
Dependencies, with increased
online, print and broadcast coverage.
Media interest has increased
overseas, in Tanzania, Uganda and
Mauritius. We also enjoyed good
coverage in specialist publications
like Forbes, Director magazine, Risk
& Compliance, Education Business,
Governance (for the charity sector)
and the Hawkamah Journal.
Supporting members
We continue to support members
at every level and equip them
for the future by developing and
updating their skills and professional
knowledge. During the year we ran
135 training courses and conferences
and in London we hosted 42 member
events, including our new quarterly
update sessions with the Policy
team. However, the professional
member base is ageing and despite
improvements in member retention,
we anticipate that continued
We continue to support members
at every level and equip them for the
future by developing and updating
their skills and professional knowledge
8
Strategy
decline in income from chartered
member subscriptions is unavoidable
in the short term. While we continue
to look to attract new members,
the strategic plan prioritises income
growth from products and services
which encourage improved standards
and awareness of good governance
for individuals in all sectors whether
they are ICSA qualified or not.
Progress is being made. Total
sales this year from our offshore
qualifications, including the revised
certificate launched in January 2015,
are up by 35% against 2014 and
income from conferences and training
courses is up by 13%. Our annual
awards sales are also up by 7%.
Improving infrastructure
We have brought in new skills and
improved decision making and
operational effectiveness to support
the development of new qualifications,
training and guidance. This also
enables us to adapt to market
changes as they occur.
3,000
3,500
trained by ICSA
and attended
conferences
took ICSA
qualifications
During the year we made changes
to our education and standards
team by creating a single group
which is responsible for managing
the professional qualifying scheme,
developing additional certificate and
diploma qualifications and for running
our wide range of professional
training and development. This
integration will enable better sharing
of knowledge, and provides the
opportunity to develop a rounded
suite of qualifications and support
for members, students and
governance professionals at every
stage of their career.
£345,000
sponsorship
income
The professional qualifying scheme
was last reviewed in 2007–09 prior
to the launch of a revised scheme in
2010. Winter 2015 saw the start of
a major piece of work to assess the
current scheme and how it can be
developed to meet the demands of
governance and compliance in the
future. This is being done in parallel
with the review by the ICSA Council
of the international qualifying scheme.
Digital first
This year has also seen investment in
improving and updating back office
processes and systems. Our aim is
Guernsey conference,
April 2015
9
news has been refreshed and for those
in the Associated Territories a digital
edition of the magazine is available.
In December 2014, we launched
Company Secretarial Practice Online
(CSPOnline), a premium online
resource providing interpretation of
legal requirements for companies and
the documents company secretaries,
in-house counsel and governance
and compliance professionals need
to comply with regulation. It provides
detailed explanation and commentary
on all aspects of company law
and corporate governance, and
helps those using it to manage the
processes and procedures involved.
to be digital by default in everything
we do, whilst not disadvantaging
those who prefer more conventional
methods of communication.
Following the 2014 audit and
evaluation of our data needs, this
year we made a significant step
in our digital transformation with
investment in a single customer view
(SCV) to improve our management
of member and customer data. Our
goal is to use it to help us improve
the quality of our services, run more
effective marketing campaigns, make
efficiency savings and provide insights
and analysis to create a culture of
informed decision making.
Work began in January and we
delivered an operational system in July
2015. At the turn of the membership
year we began a new phase of testing,
training, data cleaning and review
of business processes in preparation
for full adoption towards the end
of the calendar year 2015. Already
the changes are being felt. Members
are now benefiting from the more
sophisticated preference centre which
enables them to choose how and
what they receive from us, monthly
Branch outreach
We have pressed ahead with our
strategy to reinvigorate our branch
network. We celebrated the opening
of a new branch in Tanzania in March
and plans for other branches are
underway. We now hold an annual
branch chairs’ summit in London,
which has proved a useful way in
which to foster closer relations with
branch chairmen and make the
branches and regions aware of the
support that is on offer from the
UKRIAT head office.
We know from our 2014 membership
survey that professional support
is one of the services that our
members value highest, and our
regional and branch network has
worked hard to ensure a regular
Our aim is to be digital by default in everything
we do, whilst not disadvantaging those who prefer
more conventional methods of communication
10
Strategy
continual professional development
programme. We have also rolled out
more training locally, something that
we committed to last year.
During the course of the year
President Lorraine Young and Chief
Executive Simon Osborne devoted
a considerable amount of time to
regional and branch events, meeting
as many members as possible.
Between them they visited Guernsey,
Jersey, Isle of Man, Scotland, Northern
Ireland, Ireland, Uganda, Mauritius,
Tanzania and Trinidad and Tobago. As
part of our campaign for improving
recognition of ICSA Simon travelled
to as many locations as possible to
showcase the research carried out by
Henley Business School (about which
you can read more in the Policy and
outreach section on page 14).
Looking
ahead
Our strategy for the next
four years is to pursue income
growth while reinforcing ICSA
as the leading professional body
for governance.
Priorities
Continue to raise
our public profile
Through published research,
media coverage, conferences
and events we will continue to
show why governance matters
and explain how ICSA supports
and influences governance
professionals, policy makers and
regulators in all sectors.
CMA’s Chief Executive Officer
Keith Kalyegira speaking at the
4th ICSA/CMA annual conference
Isle of Man conference,
May 2015
Develop new products
and services
We will improve governance
standards and awareness
by providing training,
qualifications, information
and advice to professionals
working at all levels.
Continue to review and
refine member benefits
and student support
We will continue to attract
students and members by
keeping our qualifications
current and in demand. We will
update the professional skills and
knowledge of members, support
students while they study and
help all to achieve their career
and personal aspirations.
11
Highlights of the year
Sep
More members eligible for
UKRIAT Committee
Nov
Excellence in Governance Awards
At a general meeting of members on
15 September 2014, members in the
Associated Territories become
eligible to stand for and
vote in elections to the
UKRIAT Committee.
Oct
Another sell-out year, signalling a move to a
larger venue in 2015!
Speaking truth to power
Lord Digby Jones addresses delegates at the
Company Secretaries Conference in London.
Dec
Launch of CSPOnline
ICSA’s premium online resource providing
interpretation of legal requirements for
companies and the documents company
secretaries, in-house counsel and governance
and compliance professionals need to comply
with regulation.
Jan
12
Policy Director
Peter Swabey
speaks about the
Henley report
The Company
Secretary: Building
trust through
governance, one in
a series of roadshow
presentations.
IFA: Four new qualifications
for offshore finance professionals.
Quarter 2
Quarter 1
Henley report roadshows
Launch of
International Finance
and Administration
qualifications
Working with government
The Department for Business, Innovation &
Skills (BIS) announces Peter Swabey as chairman
of a working party for the new Persons with
Significant Control (PSC) register.
Strategy
Feb
Bank of Uganda Governor calls
for new attitude to governance
May
The 4th ICSA/Capital Markets Authority
annual conference for directors and company
secretaries in Kampala sees the Governor
of the Bank of Uganda call for a change in
attitude towards corporate governance.
Ireland’s
Companies
Act 2014,
which retains
the need for
a company
secretary,
is the focal
point of
this year’s
conference.
Enhancing investor stewardship
ICSA launches survey of companies on
investor engagement.
Raising media
awareness of
the profession
in Mauritius
Mar
June
ICSA announces partnership with the
Law Society of Ireland to deliver and
jointly award a Certificate in Company
Secretarial Law and Practice.
New annual conference format
July
Guernsey conference looks at
ethics in governance
Peter Montagnon,
Associate Director
of the Institute of
Business Ethics,
is the keynote
speaker at the
2015 Guernsey
conference.
UKRIAT division agreed
ICSA Publishing’s
bestsellers of the year
Quarter 4
Quarter 3
Apr
ICSA launches consultation
on academy governance
effectiveness
Law Society of Ireland and
ICSA join forces
Establishment of Tanzania
branch
Launch of ICSA annual conference merging
Company Secretaries Conference and
Corporate Governance Conference.
Ireland conference focuses on
new Companies Act
13
Policy and outreach
The policy and research team plays a central role in
building our profile and credibility. Their published
output and their contribution and influence with
regulators and policy makers demonstrates what ICSA
stands for and how governance makes a difference
ICSA Head of Policy (NFP)
Louise Thomson in Trinidad and
Tobago
Promoting the role and value of
the company secretary
Last year’s annual report announced
the publication of new research, The
Company Secretary: Building trust
through governance, carried out
by a team led by Professor Andrew
Kakabadse from Henley Business
School. The research, in which around
200 people across a range of sectors
took part, reinforced the contribution
and value of company secretaries and
how their qualities and skills benefit
their organisations.
Throughout the year the findings
from the report underpinned our
campaign for greater recognition
of ICSA, why governance matters
and how the company secretary
contributes. Immediately after
publication, we ran a series of
roadshows throughout the UK
for ICSA members and the local
business community to hear how the
company secretary can help in getting
governance arrangements right. The
push to win back recognition of the
role of the company secretary was
continued by generating editorial
coverage in relevant publications,
including the Law Society Gazette,
Forbes, Corporate Secretary,
Company Secretary’s Review, CILEx
Journal, Voluntary News and the
Civil Society’s Governance, as well
as blog posts and online coverage
by the International Bar Association,
dofonline and Consultant-News.com.
There was also an in-depth interview
with Chief Executive Simon Osborne
in Director magazine.
Experienced company secretaries are
frequently very well placed to become
non-executive directors (NEDs) and
trustees, but their skills and potential
can be overlooked by headhunters
and other NEDs. Using the evidence
from the report we ran a campaign to
promote company secretaries as NEDs
which received useful coverage in the
Sunday Times.
The Companies Act 2014 in Ireland
which came into force on 1 June
2015 was a splendid opportunity for
us to publicise the role and value of
the company secretary. In anticipation
of the new Act, we launched a new
website for Ireland in January 2015,
underpinned by local PR support.
FT–ICSA Boardroom Bellwether
The FT–ICSA Boardroom Bellwether
surveys began in 2012. They continue
The findings from the report underpinned our
campaign for why governance matters and
how the company secretary contributes
14
Strategy
to run twice a year, collecting the
views of FTSE 350 company boards
on regular topics such as economic
confidence and the business
environment, boardroom diversity,
succession planning, attitudes to risk,
and shareholder engagement. With
three years of data we are beginning
to develop useful depth and
comparison. The Summer 2015 survey,
carried out almost immediately after
the May 2015 UK General Election,
was one of the first pieces of research
to report on business attitudes to the
new government, including views on
a UK exit from the EU.
Engaging with government
and regulators
Throughout the year the Policy
team responded to 21 consultations
including those from the Department
for Business, Innovation and Skills
(BIS), the Financial Reporting Council
(FRC), The European Commission,
OECD, the Charity Commission and
the Law Commission. In January 2015
Peter Swabey was confirmed as chair
of the BIS working party to prepare
guidance on the new Register of
Persons with Significant Control which
is due to be introduced in Spring 2016
as part of the new Small Business,
Enterprise and Employment Act.
ICSA has been working with a
number of partners to help the
FRC review the extent to which
the Stewardship Code has begun
to have an impact on company
and investor engagement. One of
the ways in which we have done
this is through a comparative and
complementary survey with the
Investment Association. Our intention
is to develop some of the responses
into a more comprehensive piece
of guidance to build on the success
of Enhancing stewardship dialogue,
which was published in 2013.
Guidance and networking
The team is called on regularly to
provide support to members and in
March a series of member update
events began for all sectors.
Key findings from the
Boardroom Bellwether
63%
think Brexit
would be
damaging to
their company
59%
consider
reputational
risk a top 3
concern
Externally, Policy and Research
Director Peter Swabey and colleagues
represented ICSA at numerous
events and roundtable discussions
including those held by BIS, AIRMIC,
the Charity Commission, Quoted
Companies Alliance and the CBI.
ICSA in the news
15
Technology for governance
ICSA owns two successful software businesses:
ICSA Software International Limited and ICSA
BoardRoom Apps Limited
central corporate statutory record,
to capitalise as this trend increases.
BoardPad, from ICSA BoardRoom
Apps, is the industry-leading
meeting and document collaboration
solution that transforms directors’
iPads and Windows devices into
highly secure digital board and
meeting packs. BoardPad has
also had a very successful year.
BoardPad’s market share globally has
continued to expand. Over 30% of
the FTSE 100 listed companies now
use BoardPad. In the public sector,
a large number of NHS Trusts have
implemented BoardPad to help them
support the ‘paperless NHS by 2020’
initiative launched by Jeremy Hunt,
the Government Health Secretary.
In the UK, BoardPad is also used
by numerous housing associations,
charities and educational institutions to
securely distribute their meetings and
board documents in a timely manner.
Blueprint OneWorld, an entity
management solution produced
by ICSA Software International,
continues to dominate the global
entity management market. In
the UK, 74% of the FTSE 100 and
42% of the FTSE 250 use Blueprint
products to ensure compliance and
good governance. Some of the
biggest corporate groups in the
world, including four of the Fortune
10 and 30 of the Fortune 100, trust
Blueprint OneWorld with their entity
management needs. Blueprint’s
market share in Australia, UAE and
Europe has continued to increase
throughout 2015.
ICSA Software continues to
invest heavily in Blueprint product
16
development, with a number of new
products due to be announced in 2016.
Many organisations are now looking
to link our Blueprint systems to
other compliance products they use,
resulting in a considerable increase
in the services work we have been
contracted to provide. Blueprint
both ‘feeds’ and ‘receives’ data for
what is central to an organisation’s
compliance data: the statutory
company information. We expect this
trend to continue through 2016 with
more emphasis towards process and
workflow, and the shift away from
flat, ‘on/off, yes/no’, data capture
to a culture of why, when, and
who. Blueprint OneWorld is ideally
positioned, as the custodian of the
2015 saw the launch of an office in
Frankfurt to provide local support to
our ever-increasing number of users
in mainland Europe. The office launch
reflects the strong customer base
already established in that region. The
business is well positioned to grow
more in the DACH region (Germany,
Austria and Switzerland) and support
our existing European clients. The
new office is strategically key to the
company’s ongoing commitment
to clients and harnessing other
exciting business opportunities. We
are particularly pleased with the
launch of the Android version of
BoardPad which has helped us this
year, through our Hong Kong office,
to gain clients in mainland China.
Strategy
Blueprint is used by:
74
BoardPad is used by:
Over
20%
Over
30%
of the FTSE 100
of the top 20 Forbes
global 2,000 companies
of the FTSE 100
104
Over
Over
of the FTSE 250
New product development also
forms a key part of BoardPad growth
strategy. During the next few months
a number of new initiatives will see
the launch of a minutes module
for the BoardPad administration
portal, which has been developed in
conjunction with a global banking
corporation and data sharing
1,000
boards
functionality between the BoardPad
and Blueprint systems, enabling us
to put more compliance reporting
information into the hands of both
the Director and Leadership teams.
As part of BoardPad’s growth
strategy, the latest product update
for iPad now supports nine languages
15,000
directors
(English, French, German, Spanish,
Greek, Portuguese, Russian, Simplified
Chinese and Japanese). This
development, and other significant
developments due to launch in
2016, will, we believe, help us to
grow again during 2016 and place
us at the forefront of technology
solutions for the boardroom.
We are particularly pleased with
the launch of the Android version of
BoardPad which has helped us to gain
clients in mainland China
17
Governance review
As a chartered body the Institute is not directly subject to
the laws and codes of practice relating to the operation
of companies. Instead its constitution, governance and
operational arrangements are set out in its Charter and
byelaws. However, in the interests of good practice, where
appropriate the Institute has complied with and supported the
principles of the UK Corporate Governance Code in preparing
the financial statements for the year ended 31 July 2015.
Throughout this review, the various committee compositions
shown are for the year under review. Current UKRIAT
Committee members are shown on page 28.
The Council
The Institute is governed by a council which is principally
responsible for managing the Institute’s business worldwide.
Australia, Canada, China (including Hong Kong), Malaysia,
New Zealand, Singapore, Southern Africa and Zimbabwe
operate as divisions of the Institute, responsible for
managing the Institute’s affairs in their regions through
locally elected committees.
The management and control of the Institute’s assets and
operations in the UK, Republic of Ireland, the Channel
Islands, Isle of Man and Associated Territories (which
includes countries in Europe, the Caribbean, Africa, and the
Middle East), is the responsibility of the UKRIAT Committee
which is a standing committee of the Council.
The Council is responsible for the oversight of the divisional
committees and the UKRIAT Committee.
The Council comprises fellows elected by the UKRIAT
Committee and by Institute members living in each of the
divisional territories, or by their divisional committees. A
president and up to two vice-presidents are appointed for
a period of up to two years by the members of the Council
Division Member name
Australia
Canada
China/Hong Kong
Malaysia
New Zealand
Singapore
Southern Africa
Zimbabwe
UKRIAT
Past Presidents
Frank Bush (President)
Peter Turnbull Bruce Murray Paul Stafford**
Natalia Seng*
Edith Shih (Vice-President)
Dato’ Muhammad Hafidz Nuruddin Kerry Heath**
John Nimmo*
Prof Tan Wee Liang Jill Parratt Lovemore Kadenge***
Joseph Goromonzi
David Venus (Vice-President)
John Heaton Ron Rosenhead Angela Squire Andy Cowe (Past President 2011)
Michael Ashford (Past President 2006)
* to 31 December 2014
** from 1 January 2015
***from 20 July 2015
18
Each divisional committee operates through an independent
service company, which provides member and student
services and collects member subscriptions and student fees.
The effect of these delegations in terms of the ownership
of member subscriptions, assets and liabilities within the
divisions is described in the financial review (pages 30 to 32).
Number of meetings attended
3/3
3/3
3/3
2/2
1/1
3/3
3/3
2/2
1/1
2/3
3/3
1/1
2/2
3/3
3/3
2/3
3/3
3/3
3/3
Governance
from their number. These are honorary positions. To provide
continuity two past presidents serve on the Council as well.
The Council met three times during 2014–15.
The Council discussed the following topics:
•ICSA strategy, including a review of the mission
statement, defining the role of the Council, and
agreeing to recruit an international CEO/Director
General. This was approved and the Council agreed to
appoint Tim Sheehy as Director General of the Institute
•A review of the Australia division’s repositioning and
change of name to The Governance Institute of Australia
•Approval of the appointment of MCI UK Limited, an
association management company, to be responsible
for secretariat support services of the Institute
•A review of the byelaws and agreed changes
which were put to the membership for approval
(September 2015 approval)
•Review of disciplinary cases in the divisions
•Approval of the UKRIAT code of professional ethics
and conduct
•Designating UKRIAT as a division of the Institute
•Agreeing to change the financial year-end to
30 June each year.
Council Committees
Executive Committee
The Executive Committee was established by the Council
under byelaw 60.1 and is responsible for exercising the
powers and responsibilities of the Council between
meetings of the Council. It must report on its proceedings
and decisions to the Council within a reasonably short time
after each of its meetings. The committee comprises three
honorary officers (the international president and two vicepresidents) and the chairman of the Professional Standards
Committee (see next page). The Executive Committee may
co-opt one additional member from the Council.
The committee met 11 times during 2014–15.
Member name
Frank Bush (Chairman)
Edith Shih David Venus Andy Cowe
Peter Turnbull
11/11
11/11
11/11
10/11
9/11
The committee discussed the following topics:
It is with great sadness that we report the death of
our colleague Joseph Goromonzi who represented the
Zimbabwe division on the Council. He passed away in
May 2015 following a short illness. The Institute
acknowledges Joseph’s supportive contribution to the
work of the Council and we extend our sympathy to his
family, friends and colleagues.
•The appointment of MCI as the association management
company of the Institute and monitoring the performance
of MCI against agreed duties
•The appointment of a consultant to review the role and
function of the Professional Standards Committee and
regularly provide updates on the consultation
• The long-term strategy of the Institute
•Review of the D&O insurance by the divisions
•The arrangements of the annual general meeting of the
Institute as well as the constitutional changes
• The reports from the divisions to the Council
• The drafting of Council agendas
•The creation of a Working Group to help review the
International Standard qualification
• Other tasks delegated by the Council from time to time.
19
Professional Standards Committee
The Professional Standards Committee (PSC) is a standing
committee of the Council. Its role is to maintain the
international professional standard for qualification as
a chartered secretary and to advise the Council on all
policy and procedure related to setting and maintaining
the standard.
The president and immediate past president are members of
the PSC. Owing to the specialist nature of the committee’s
responsibilities, the professional background and skill set
of other members of the committee reflect the profession’s
body of knowledge from both a practical and academic
perspective where possible.
The committee met twice during 2014–15.
Member name
The divisional committees may enter into agreements with
third parties to operate and manage the Institute’s affairs in
the division.
Members of the Council elected by Institute members living
in each of the divisions or by their divisional committees may
also sit on the boards or committees of their respective third
party service companies.
ICSA members and
graduates in the divisions
Andy Cowe (Chairman)
Syed Hamid Aljunid Alan Au
Frank Bush
John Chikura
Krison Chirairo
Laurie Factor
Andy Godfrey
Soodesh Jowaheer
Alison Dillon Kibirige
Leslie Milliken
Divisions and divisional committees
Divisional committees are standing committees of the
Council, whose delegated role is to exercise the powers of
the Council in their designated territories.
2/2
2/2
2/2
2/2
1/2
2/2
2/2
2/2
2/2
2/2
2/2
•A review of the International Standard, the standard
which the chartered secretaries qualifying scheme and
its equivalents must reach
•Examination papers and examination scripts from each
division. It also provided feedback and recommendations
to each division
•A review of the feedback from each division on the
recommendations made by the PSC.
2015
%
2014
%
UKRIAT
10,989
32.30
11,653
33.10
Australia
*5,982
17.60
*6,134
17.40
*589
1.70
*615
1.80
Canada
China (inc. Hong Kong)
*5,976
17.60
5,828
16.50
Malaysia
*4,364
12.80
*4,360
12.40
838
2.50
897
2.50
Singapore
New Zealand
*1,288
3.80
*1,296
3.70
Southern Africa
*2,132
6.30
*2,329
6.60
Zimbabwe
*1,828
5.40
2,110
6.00
Total
33,986
100.00
35,222
100.00
Students in the divisions
2015
%
2014
%
UKRIAT
2,821
28.10
2,936
29.40
Australia
*640
6.40
*677
6.80
* at 30 June
*114
1.10
*110
1.10
China (inc. Hong Kong)
Canada
*3,199
31.90
3,365
33.60
Malaysia
*1,352
13.40
*1,218
12.20
New Zealand
Singapore
0.40
26
0.30
5.80
*524
5.20
Southern Africa
*811
8.10
*740
7.40
Zimbabwe
*483
4.80
403
4.00
10,042
100.00
9,999
100.00
Total
* at 30 June
20
36
*586
Governance
The UKRIAT Committee
(formerly UK Committee)
The UKRIAT Committee is a standing committee of the
Council. It manages the affairs of the Institute and exercises
the power of the Council in UKRIAT. The UKRIAT Committee
is composed of those members of the former UK Committee
whose term has not yet expired, the two most recent past
presidents of the UK or UKRIAT Committee, and those
elected by the members residing in UKRIAT. All UKRIAT
Committee members must be Fellows of the Institute who
reside in UKRIAT.
The committee met five times during 2014–15.
Following changes to the byelaws in 2014, the UKRIAT
Committee will, in future, be composed of Fellows of
UKRIAT elected by all eligible members of UKRIAT, not
just those in the UK and Republic of Ireland. 2014 elections
saw an uncontested election so the new members of
the committee were deemed elected without holding
an election.
Member name
•UKRIAT’s strategic aims, objectives and annual strategic
and business plan, including investment in the Associated
Territories, the future of the Chartered Secretaries
Qualifying Scheme and the divisionalisation of UKRIAT
•The UKRIAT group’s annual operating and capital
expenditure budgets and any material changes to them
•Oversight of the discharge by the chief executive of the
day to day business of the UKRIAT group
•Annual membership subscriptions
•Risk registers and risk management
•Elections to membership for all associates and fellows
•Disciplinary cases investigated or heard throughout
the year
•Annual report and audited accounts of UKRIAT
•Investment in a single customer view project to
streamline the data held by UKRIAT
•Changes to the structure, size and composition of
the UKRIAT Committee based on the Nomination
Committee recommendation
•Review of the matters reserved for the UKRIAT
Committee and the Scheme of Delegation.
Lorraine Young (Chairman to 31 July 2015)
Charles Brown**
Lesley Brownett
Andy Cowe
Frank Curtiss (Chairman from 1 August 2015)
Alison Dillon Kibirige**
Martin Green
John Heaton
Philippa Keith
Edward Nicholl
Charles Pender
Victoria Penrice
Ron Rosenhead
Angela Squire
Paul Sylva*
David Venus 5/5
2/3
4/5
4/5
5/5
3/3
4/5
5/5
1/5
5/5
5/5
5/5
5/5
5/5
0/2
5/5
** from 1 January 2015
21
UKRIAT regulations
Revisions to the UKRIAT regulations were approved at a
general meeting of members in UKRIAT on 15 September
2014 and were effective from this date. The regulations give
further effect to the Royal Charter and byelaws and provide
the framework through which the UKRIAT Committee works
on behalf of UKRIAT members.
The regulations anticipate the establishment of UKRIAT as
a division of the Institute and allow it to enter into a service
agreement with a company to provide for its management,
administration and other services.
Sub-committees of UKRIAT Committee
The Oversight Committee
The Oversight Committee is responsible for supervising the
management and administration of the Institute within
UKRIAT and monitors and reports to the UKRIAT Committee
on the implementation of policies, plans and budgetary
performance. It recommends to the UKRIAT Committee
the appointment of the chief executive and sets the
remuneration of the chief executive and advises him generally
on all remuneration policies and retirement and other
benefits. It comprises the UKRIAT president, who is also its
chairman, the immediate past president and vice-presidents.
The committee met five times during 2014–15.
22
Member name
John Heaton
Victoria Penrice
David Venus 5/5
4/5
5/5
5/5
5/5
•Finance review and year-end report
•Oversight of the objectives and targets set by the
Executive Committee, including a review of the key
performance indicators
•Divisionalisation of UKRIAT
•Review of the investment in a single customer view
project to streamline the data held by UKRIAT
•Risk management
•Review of the monthly business of UKRIAT
•Governance changes in UKRIAT
•Review of the draft annual report and financial statements
•Review of the subsidiary businesses
•Planning for the annual UKRIAT Committee
strategy meeting
•Annual review of the terms of reference and the
effectiveness of the Oversight Committee to ensure
it is fit for purpose.
icsa.org.uk
The Audit & Risk Committee
Under its terms of reference the Audit & Risk Committee
is required to meet a minimum of three times a year and is
responsible for the following:
•monitoring the integrity of the financial statements of
the Institute and its subsidiary companies including
audited annual statements and its annual reports,
reviewing significant financial reporting issues and
judgments that they contain
•keeping under review the effectiveness of the group’s
internal controls and risk management systems
•considering and making recommendations to the
UKRIAT Committee in relation to the appointment,
re-appointment and removal of the group’s
external auditor
•appointing the internal auditor and for oversight
of the internal audit function
•overseeing the selection process for external and
internal auditors.
•Future funding of the pension scheme
•Monitoring the level of non-audit work undertaken
by the external auditor
•Review of the group management letter and group letter
of representation from the external auditor
•Review of the annual report and financial statements
•Oversight of risk management
•Oversight of the internal audit by RSM Risk
Assurance Services LLP (formerly Baker Tilly Risk
Advisory Services LLP)
•Accounting standards used and future accounting
treatments
•Anti-money laundering policy
•Annual review of the terms of reference and the
effectiveness of the committee to ensure it is fit
for purpose.
The committee met three times during 2014–15.
Member name
Frank Curtiss (Chairman to 31 July 2015)
Charles Brown***
Martin Green
John Heaton
Edward Nicholl*
Charles Pender*
Victoria Penrice (Chairman from 1 August 2015)
Paul Sylva**
3/3
0/2
2/3
3/3
1/2
2/2
3/3
0/1
* from 10 December 2014
** to 31 December 2014
*** from 1 January 2015
23
External audit
Chantrey Vellacott DFK LLP was reappointed as the Institute’s
auditor in February 2015. The auditor was originally
appointed in February 2007 and following a review by the
Audit & Risk Committee during 2012 a rotation of audit
partner was recommended to the UKRIAT Committee.
This is the third year under the current lead partner.
Chantrey Vellacott DFK LLP merged its practice with Moore
Stephens LLP with effect from 1 May 2015 and now
practices under the name of Moore Stephens LLP.
The Audit & Risk Committee reviews the performance of
the external auditor annually and remains satisfied with
their effectiveness and independence. The committee is
recommending the appointment of Moore Stephens LLP
at the 2016 UKRIAT annual general meeting.
The Audit & Risk Committee is also responsible for
monitoring the level and nature of any non-audit services
provided by the external auditor taking into account relevant
ethical guidance on the provision of such services. Nonaudit services purchased in the year from Moore Stephens
LLP amounted to £40,000, of which £23,000 was for
tax advice and compliance services, and £17,000 was for
corporate finance advice. The committee agreed that the
independence of the auditor was not compromised through
the level of non-audit work undertaken in the year.
The external auditor is invited to attend all meetings of
the Audit & Risk Committee.
Internal audit
The Audit & Risk Committee received the response from
RSM Risk Assurance Services LLP (formerly Baker Tilly Risk
Advisory Services LLP) on the internal audit carried out
during the year. The internal audit covered financial controls,
payroll and risk management. Assurances received were
that the controls in place were suitably designed and
consistently applied. Recommendations to improve
procedures were made and implemented. The internal
audit programme will include business continuity and data
protection provisions in 2015–16.
The internal auditor is invited to attend all meetings of
Risk management
The executive team has responsibility for designing,
implementing and maintaining risk management systems
in line with the risk management policy determined by
All managers are required to consider potential risks to
their department and grade them by likelihood and impact
using an inherent and residual scoring system and having
taken into account control and mitigation processes. The
results are recorded on the risk register. The Audit & Risk
Committee has responsibility for ensuring that the register
is regularly updated, analysing the results and subsequent
action plans and reviewing the register twice a year.
The executive team reviews the risk register on a regular
basis. The UKRIAT Committee reviews the register on an
annual basis.
24
icsa.org.uk
The Nomination Committee
The Nomination Committee is responsible for the
nomination of UKRIAT honorary officers and may seek
candidates for election to the UKRIAT Committee. Its
membership comprises the UKRIAT president and immediate
past president and at least three other UKRIAT Committee
members appointed by the UKRIAT Committee.
Member name
Andy Cowe**
John Heaton
Victoria Penrice*
Angela Squire
David Venus 3/3
2/2
3/3
3/3
1/1
3/3
3/3
Member name
Lesley Brownett (Chairman)
Steve Bennett*
Alison Carr*
Alison Dillon Kibirige**
Susan Hughes
Philippa Keith**
Lincoln Miles***
Edward Nicholl*
Victoria Penrice**
Ron Rosenhead**
Angela Squire
Francesca Windsor*
2/3
0/1
1/1
2/2
3/3
1/2
0/2
1/1
1/2
1/2
3/3
0/1
** from 10 December 2014
*** to 7 July 2015
•UKRIAT Committee election process
•UKRIAT Committee evaluation and skills audit
•UKRIAT Committee and its sub-committees’ composition
•Induction programme for new UKRIAT Committee and
sub-committee members
•Recommendation of the president and honorary officers.
The Qualifications Committee
(formerly Education Committee)
The Qualifications Committee is responsible for advising
the UKRIAT Committee on all aspects of professional
education and development within UKRIAT. The chairman is
‘appointed by, and is a member of, the UKRIAT Committee.
The Qualifications Committee is made up of other members
according to experience, including individuals drawn from
the wider education community.
•Review of the Chartered Secretaries Qualifying Scheme
•Pass rates of CSQS
•Influencing ICSA education strategy and remit
•Continuing professional development and competencies
•Student disciplinary regulations and cases
•Qualification development
•Accredited University Programmes
•Academic prizes
•Review of examiners for CSQS
•Annual review of the terms of reference and
the effectiveness of the committee to ensure it is
fit for purpose.
Following a review of the composition by the Nomination
Committee, the membership was changed to strengthen
the representation of UKRIAT Committee members on the
Qualifications Committee. The following have attended one
or more meetings in 2014–15 in an advisory capacity:
• Alison Carr
• Michael Knight
25
Membership Committee
(formerly Admissions Committee)
The Membership Committee is responsible for
recommending candidates to the UKRIAT Committee for
admission to membership. The Committee comprises
a chairman appointed by the UKRIAT Committee from
amongst its own membership and a minimum of four
other Fellows of the Institute.
Member name
Angela Squire (Chairman)
Andy Cowe**
Mike Eade
Philippa Keith
Charles Pender
Victoria Penrice*
Alan Theakston*
3/3
2/2
0/3
3/3
3/3
1/1
0/1
•Fellowship applications
•Audit of associateship applications
•Oversight of the Special Entry Examination Scheme (SEES)
•Oversight of the Public Practice Scheme
•Character and standing of membership applicants
•Continuing professional development, competencies
and the code of professional ethics and conduct
•Annual review of the terms of reference and
the effectiveness of the committee to ensure it is
fit for purpose.
Bernadette Barber attended one meeting in 2014–15
in an advisory capacity.
26
Auditor
A resolution to appoint Moore Stephens LLP as auditor
and to authorise the UKRIAT Committee to set their fees
will be proposed at the annual general meeting for members
in UKRIAT.
Staff
The Institute group in UKRIAT employed 273 staff in the UK
and overseas at 31 July 2015 (2014: 226). The professional
body employed 64 of the total number of employees, the
remainder being employed by ICSA’s software businesses.
Governance
Principal risks and uncertainties
The group’s risk management methodology is based on
best practice and the ISO 31000 Risk Management model
which consists of monitoring and review of the stages of
risk assessment, identification, analysis, evaluation and
treatment. It aims to enable the timely identification of risks
and to allow action to be taken to remove them or to reduce
their impact to an acceptable level.
•Business failure of the software businesses. The
businesses’ operations are monitored regularly against
budgets and forecasts. Product development and
diversification across markets and assessment of
competitors and the needs of the market are undertaken
as a priority in order to ensure that products and services
continue to stimulate and satisfy demand.
A responsibility of the Audit & Risk Committee is the
review of the effectiveness of the group’s risk management
systems. With the assistance of RSM Risk Assurance Services
LLP (formerly Baker Tilly Risk Advisory Services LLP), the
Audit & Risk Committee regularly reviews ICSA’s risk policy,
architecture and methodology which comprise the risk
management process. It is the opinion of the Audit & Risk
Committee that the approach being taken is robust.
•Breach of client confidential data, particularly in regard
to the software businesses. Considerable resource is
invested in physical, technical and administrative controls
to ensure the security of client data. Both ICSA Software
International Limited and ICSA BoardRoom Apps Limited
are ISO 27001: 2013 compliant. Work is underway
towards both companies obtaining attestation under the
Service Organisation Control (SOC2) framework which
will assist clients in performing their evaluation of the
companies’ security controls.
During the year a programme of annual internal audits
by RSM Risk Assurance Services LLP was introduced
beginning with audits of financial controls, risk management
and payroll. The results of the audits gave assurances that
the controls in place to manage these risks are suitably
designed and consistently applied. RSM Risk Assurance
Services LLP made several recommendations all of which
have been implemented.
Risks are identified, ranked and prioritised against a
consistent overall ranking and rating system using a
combination of consequences and likelihood which
determines the response required.
The principal risks identified are:
•Insufficient cash generated by the commercial subsidiaries
to fund the professional body’s deficit. Monitoring
solvency over the shorter term is achieved through
monthly reviews of performance of all parts of the
group against budget.
•Failure of the professional body’s strategy to attract new
revenue streams and thus reduce its deficit. Detailed
business development plans are produced in support of
these growth strategies.
•Increases in the deficit in the defined benefit pension
scheme could pose a risk to future activities. The risk of
the deficit increasing is managed with the aid of actuarial,
legal, investment and other appropriate professional
advice by identifying and monitoring the funding position
from actuarial and FRS17 valuations, and monitoring cash
flow requirements and benefits provided. If circumstances
require it, professional advice would be taken as to the
options available to limit the exposure to increasing
liabilities accruing under the scheme.
•The continuing decline in the number of chartered
members which impacts the ability of the professional
body to reduce its deficit. The priority is to reduce
dependence on the revenue from chartered members
by growing revenues from other sources such as affiliates
and new qualifications.
27
UKRIAT Committee
(as at the date of these financial statements)
28
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Governance
Frank Curtiss
Frank is President of the UKRIAT
Committee. He is Head of Corporate
Governance at RAILPEN Investments.
Frank has been a trustee of the ICSA
charities since 2007 and is the current
chairman of the Chartered Secretaries
Charitable Trust.
1
David Venus
David is Past President of the UKRIAT
Committee and Vice-President of
the Institute. He qualified as a
chartered secretary in 1974 and
has over 40 years’ experience of
company secretarial work. David
speaks regularly at conferences and
seminars on corporate governance
and other issues.
2
3 John Heaton
John is Vice-President of the UKRIAT
Committee and serves on the
Institute’s Council. A self-employed
consultant, including work for Equiniti,
John previously worked for Lloyds Bank
Group carrying out a number of senior
management roles in operations,
compliance & risk and client relations.
4 Victoria Penrice
Victoria is Vice-President of the
UKRIAT Committee and Chairman
of the Audit & Risk Committee.
She qualified as a chartered
secretary over 20 years ago,
gaining significant experience
in listed companies.
5 Charles Brown
Charles has been a member of the
UKRIAT Committee since January
2015. He is a member of ICSA’s Irish
Regional Council. He joined Experian
plc in October 2006 as Company
Secretary. Based in Dublin, Ireland,
his responsibilities include corporate
governance, statutory and listing rules
compliance and reporting, board
support, shareholder services and
corporate responsibility. Before joining
Experian, he was Group Company
Secretary at Standard Chartered PLC.
Lesley Brownett
Lesley has been a member of the
UKRIAT Committee and its predecessor,
the UK Committee, since 2011. She
is Chairman of the Qualifications
Committee. She was Deputy Secretary
of Marks & Spencer from 2002–10.
6
Andy Cowe
Andy is a past president of the
Institute and of the UKRIAT
Committee and currently chairs
the Professional Standards
Committee. In addition to his ICSA
committee roles, he is a board
member of several not-for-profit
organisations in the education,
health and social welfare sectors.
7
8 Alison Dillon Kibirige
Alison has been a member of the
UKRIAT Committee since January
2015. Based in Uganda she runs her
own global corporate governance
training and consultancy business.
Her work has taken her throughout
Europe, Africa, the Caribbean, the
Middle East and Asia.
9 Martin Green
Martin has been a member of
the UKRIAT Committee and its
predecessor, the UK Committee,
since January 2010. He is Commercial
Director and Company Secretary
of a medium-sized private limited
company where he concentrates
primarily on strategy, financial and
legal matters. He has experience in
the not-for-profit sector – including a
period as a non-executive chairman of
a large voluntary housing association.
10 Philippa
Keith
Philippa has been a member of
the UKRIAT Committee and its
predecessor, the UK Committee, since
January 2010. She runs a firm of
chartered secretaries with offices
in London and Farnham, including
a share registrar business which is
Crest registered.
11 Edward
Nicholl
Ted has been a member of the
UKRIAT Committee and its
predecessor, the UK Committee, since
January 2013. He has over 30 years’
experience as a company secretary
for large commercial companies,
a professional body, hotels and
housing associations.
12 Charles Pender
Charles is an independent governance
and company secretarial consultant
and a pension fund trustee. He
has been a member of the UKRIAT
Committee and its predecessor, the
UK Committee, since January 2013.
13 Ron Rosenhead MBE
Ron is a past president of the
UKRIAT Committee and serves on
the Institute’s Council. After 30
years in the army, he moved to
the private sector where he worked
as a finance director for 14 years.
He is a trustee of two army charities
and a non-executive director of an
IT company.
14 Angela Squire
Angela is a past president of the
UKRIAT Committee and serves on
the Institute’s Council. She is
Chairman of the Membership
Committee. She has over 30 years’
professional experience gained in
finance, operations, risk, business
change and project management.
29
Financial review
Background
The group financial statements set out in the following
pages are for the year ended 31 July 2015 for the Institute
of Chartered Secretaries and Administrators (‘the Institute’).
They comprise the results, assets and liabilities of the
Institute’s affairs in UKRIAT (‘ICSA’ and the ‘professional
body’) and the principal subsidiaries, ICSA Software
International Limited, ICSA Software North America Inc,
ICSA BoardRoom Apps Limited, ICSA BoardRoom Apps
North America Inc, ICSA BoardRoom Apps (HK) Limited,
ICSA BoardRoom Apps GmbH, ICSA Publishing Limited and
ICSA Services Limited, (‘the group’).
The professional body is responsible for providing services
and support for members and students and for running the
Chartered Secretaries Qualifying Scheme (CSQS) in UKRIAT.
The group financial statements do not reflect the activities,
results, assets or liabilities of the Institute’s divisions which do
not hold any assets or incur any liabilities themselves. Under
their delegated authority from the Council, these divisions
operate through independent service companies which
collect member and student subscriptions and fees, and
provide all the services for members and students locally.
The Institute has no claim to the profits or assets from the
service companies and each service company is the full legal
owner of the member subscriptions and any profits or assets
they generate. The Institute’s income, assets and liabilities
are derived from the activities in UKRIAT and therefore these
financial statements are also those of UKRIAT.
The group’s result for the year
The group’s result for the year was a net surplus of
£2,581,000 as shown in the consolidated revenue statement
on page 33. This result is after charging tax of £167,000 and
minority interests of £292,000.
Group operating income increased 24.7% to £29,582,000
from £23,715,000 in 2014. Direct costs rose 26.9% to
£16,167,000 (2014: £12,735,000) as a result of the rise
in income.
Gross contribution increased by 22.2% to £13,415,000
from £10,980,000. After charging administration costs of
£10,429,000 (2014: £9,380,000) the resulting operating
profit was £2,986,000 against £1,600,000 achieved in 2014.
The composition of the operating surplus is shown in note 2
on page 38.
The increased operating profit resulted from the continued
growth in both software businesses, ICSA Software
International Limited and in particular that of ICSA
BoardRoom Apps Limited.
The tax charge of £167,000 arose principally within the
subsidiaries and comprises £181,000 for current year
corporation and foreign tax, an increase of £376,000 in
deferred tax offset by an overprovision of £390,000 in
respect of prior years.
The group’s net assets more than doubled to £2,967,000
from £1,300,000 within which net current assets of
£7,730,000 increased by £1,331,000. The increase in
operating income was the cause of the rise in deferred
income from £7,694,000 to £8,722,000 but as this balance
comprises mainly amounts received in advance of the
supply of software maintenance, hosted service fees and
membership subscriptions, it is not expected to be repaid.
30
Financials
The deficit at the year-end in the defined benefit pension
scheme calculated by the scheme actuary under FRS17,
Retirement Benefits, was £3,455,000, an increase of
£852,000 on 2014 of which £310,000 was credited to
the consolidated revenue statement and £1,162,000 was
charged directly to the accumulated fund. The main reason
for the increase was a 0.6% per annum decrease in the
discount rate owing to a reduction in the expected return
on AA-rated corporate bond yields. The scheme is closed to
new employees and the increase in pensionable earnings
is capped at 2.5% per annum. The scheme does not
represent a future cash call as it is funded through budgeted
contributions, the level of which has been agreed with
the scheme’s trustees after having taken advice from the
scheme’s actuary.
The professional body
The professional body’s operating deficit decreased by
£77,000 to £789,000 (see note 2 on page 38).
At £4,692,000 the operating income from all professional
activities was slightly higher than that of £4,656,000 for the
previous year and includes income from members, students
and from other professional activities such as advertising
in Governance and Compliance magazine, and other
qualifications. Income from members and other professional
activities increased by £55,000 and £22,000 respectively, but
income from students decreased by £41,000.
Before crediting the FRS17 pension and other consolidation
adjustments of £18,000 (2014: £17,000) the resulting
underlying direct costs of the professional activities increased
by 10.5% to £3,790,000 (2014: £3,429,000). The additional
spend, which was in line with the budget, was in marketing
through the development of a Customer Relationship
Management (CRM) system, in business and product
development, and in member engagement and promotion
activities.
The direct costs of the professional body’s commercial and
other activities decreased to £23,000 as a direct result of the
reduction in associated revenue noted above.
The increase in spend on professional activities was offset
by a reduction in administration costs of £440,000 to
£1,829,000. Significant reductions were reflected in office
and premises costs which in the previous year included the
costs of the move to Saffron House.
Subsidiaries and other commercial activities
As shown in note 2 on page 38 the income from commercial
activities is generated almost entirely by the subsidiary
companies. The income from commercial activities increased
by £5,851,000 to £24,758,000 and both the associated
direct and administration costs increased as a consequence.
The professional body’s income from commercial and other
activities reduced by £200,000 to £161,000. The majority
of this decrease stems from the cessation of the conference
venue business which generated £36,000 in 2014 prior to
the move to Saffron House last year and from the transfer to
ICSA Services Limited of the operation and the accounting
for the Excellence in Governance Awards ceremony held in
December 2014.
31
The software businesses
As in the previous year the principal sources of the increase
in the group’s income and surplus were the software
businesses.
ICSA Software International Limited enjoyed increased
sales of the Blueprint suite of products and again the main
growth in sales was of BoardPad within ICSA BoardRoom
Apps Limited.
The combined sales income of the two businesses increased
by £5,938,000 to £22,912,000 and their combined
operating surplus before management charges increased
by £1,221,000 to £3,170,000.
ICSA Publishing and ICSA Services
ICSA Publishing Limited produces a wide range of books
and digital resources. The company’s operating profit before
management charges reduced by £29,000 to £13,000 from
£42,000 in 2014. Income reduced by £92,000 to £482,000.
Total costs decreased by £63,000 to £469,000 (see note 2).
ICSA Services Limited operates the training and conference
and board performance evaluation businesses. Income
from board performance evaluations of £186,000 did
not match that in 2014 of £296,000 but that from
training and conferences of £1,157,000 increased by
£271,000. This includes the income from the Excellence
in Governance Awards 2014, the income from previous
years’ Awards having previously been reported within that
of the professional body. The company’s operating surplus,
before management charges, increased to £309,000 from
£260,000 in 2014.
Cash and reserves
Group reserves amounted to £2,967,000 (2014:
£1,300,000) which includes net current assets of
£7,730,000 (2014: £6,399,000). Cash balances increased by
£1,505,000 to £6,084,000 (2014: £4,579,000). The group
had no external borrowings throughout the year.
32
Going concern
Cash flow forecasts for the group show that it will have
positive cash flows for at least 12 months from the date
of these financial statements. As the group has sufficient
funds to meet its obligations as they fall due, it is therefore
appropriate that these financial statements are produced on
a going concern basis.
Outlook
The achievement of a core objective of UKRIAT becoming
a division of ICSA provides additional opportunities to
support members and to reach a wider market through the
development our services and products.
This will require further investment in infrastructure and skills
within the professional body made possible by the increased
strength of the group’s performance.
Robert Ing ACMA, CGMA
Finance Director
Financials
Consolidated revenue statement
(for the year ended 31 July 2015)
Notes
2015
2014
Group
Group
£000
£000
29,582
23,715
Operating income
2
Direct costs in support of professional activities
2
(3,772)
(3,412)
Direct costs in support of commercial and other activities
2
(12,395)
Gross contribution
2
13,415
Administration costs
4
(10,429)
(9,380)
2,986
1,600
Interest receivable
22
22
Other finance costs – from defined benefit pension scheme
32
–
3,040
1,622
Operating surplus
Surplus on ordinary activities before taxation
Taxation (charge)/credit on ordinary activities
6
Surplus on ordinary activities after taxation
2,873
Minority interests
Surplus transferred to accumulated fund
(167)
(292)
14
2,581
(9,323)
10,980
57
1,679
(118)
1,561
All activities are continuing.
Pages 36 to 50 form an integral part of these financial statements.
Consolidated statement of total recognised gains and losses
Notes
Surplus for the financial year
Actuarial loss on defined benefit scheme
14
Exchange differences
14
Total gains recognised since last annual report
2015
2014
Group
Group
£000
£000
2,581
1,561
(1,162)
(44)
1,375
(405)
36
1,192
33
Balance sheets
(at 31 July 2015)
2015
2015
2014
2014
Group
ICSA
Group
ICSA
Notes
£000
£000
£000
£000
Intangible assets
7
6,379
–
4,275
–
Tangible assets
8
1,035
434
923
451
Investments
9
–
407
–
407
7,414
841
5,198
858
Fixed assets
Current assets
Stocks
10
73
–
78
–
Debtors
11
5,452
3,530
4,637
3,216
6,084
1,512
4,579
1,080
11,609
5,042
9,294
4,296
Cash at bank and in hand
Creditors
12
Net current assets
7,730
Total net assets less current liabilities
Deferred income
15,144
13
Total net assets before pension scheme liability
Pension scheme liability
(3,879)
5(a)
Total net assets including pension scheme liability
(797)
(2,895)
(540)
4,245
6,399
3,756
5,086
11,597
4,614
(8,722)
(1,137)
(7,694)
(737)
6,422
3,949
3,903
3,877
(3,455)
(3,455)
(2,603)
(2,603)
2,967
494
1,300
1,274
3,067
494
1,692
1,274
Accumulated reserves
Accumulated fund
14
Minority interest
15
(100)
2,967
–
494
(392)
1,300
–
1,274
Pages 36 to 50 form an integral part of these financial statements.
The financial statements were approved and authorised for issue by the UKRIAT Committee and were signed on its behalf on 10 December 2015.
Victoria Penrice FCIS
Chairman, Audit & Risk Committee
34
Financials
Consolidated cash flow statement
2015
2015
2014
2014
£000
£000
£000
£000
Net cash flow from operating activities
6,048
4,229
22
22
495
5
Returns on investments and servicing of finance
Interest received
Taxation – repaid
Capital expenditure and financial investment
Purchase of intangible fixed assets
Purchase of tangible fixed assets
Receipts from sale of tangible fixed assets
(4,453)
(4,108)
(607)
(765)
–
410
(5,060)
Increase/(decrease) in cash
(4,463)
1,505
(207)
Reconciliation of surplus on ordinary activities before taxation to net cash inflow
Surplus on ordinary activities before tax
3,040
Interest receivable
1,622
(22)
Amortisation of development cost
Depreciation charge
(22)
2,349
1,680
474
435
(44)
36
FRS17 current year pension service cost
142
233
Pension contribution paid in year
(452)
(454)
Loss on sale of tangible fixed assets
Decrease in stocks
Increase in debtors
19
5
5
6
(1,444)
Increase/(decrease) in creditors
(312)
953
(125)
Increase in deferred income
1,028
1,125
Net cash inflow from operating activities
6,048
4,229
Analysis of net funds
31 July 2014
Cash flow
31 July 2015
£000
£000
£000
4,579
1,505
6,084
Net cash
Cash at bank and in hand
35
1
Accounting policies
These group financial statements represent the activities of the
Institute of Chartered Secretaries and Administrators (the Institute).
Accordingly, these financial statements comprise the results, assets
and liabilities of the Institute in the UK, Republic of Ireland and
Associated Territories, Channel Islands and Isle of Man (UKRIAT), and
the Institute’s principal trading subsidiaries ICSA Software International
Limited, ICSA Software North America Inc, ICSA BoardRoom Apps
Limited, ICSA BoardRoom Apps North America Inc, ICSA BoardRoom
Apps (HK) Limited, ICSA BoardRoom Apps GmbH, ICSA Publishing
Limited and ICSA Services Limited (‘the group’). The Institute’s overseas
divisions, which comprise Australia, Canada, China (including Hong
Kong), Malaysia, New Zealand, Singapore, Southern Africa and
Zimbabwe, do not trade or hold any assets or liabilities in the name
of the Institute but operate in their respective locations through
independent third party service providers, which are either locally
constituted companies or local societies, which carry out these
divisions’ activities. Consequently, as the income, assets and liabilities
of these divisions’ are held and owned by independent companies or
registered societies, these group financial statements do not include
the activities of, nor do they include the results, assets and liabilities
of these divisions. Had any of these divisions traded or held any assets
or liabilities in the name of the Institute, those activities, assets and
liabilities would have formed part of these financial statements.
The UKRIAT Committee has managed the affairs of the Institute and its
group in UKRIAT in accordance with the requirements of the Institute’s
byelaw 61.8 and the UKRIAT Regulations made thereunder.
Under UKRIAT Regulation 92 the UKRIAT Committee is responsible
for producing the audited financial statements of UKRIAT. As the only
assets and liabilities of the Institute are those within UKRIAT controlled
and managed on its behalf by the UKRIAT Committee under byelaw
61.8 the financial statements of UKRIAT are those of the Institute.
The financial statements have been prepared so as to comply with
United Kingdom Generally Accepted Accounting Practice. A summary
of the more important accounting policies, which have been applied
consistently, is set out below.
a. Accounting convention
The financial statements have been prepared under the historical
cost convention.
b. Going concern
The financial statements have been prepared on a going concern basis.
At 31 July 2015, the group had an excess of assets over liabilities, in
other words net assets, of £2,967,000 compared with £1,300,000
in the previous year. Included within net assets is that of net current
assets of £7,730,000. This figure is a measure of the ability of
the group to meet its obligations to its creditors as they fall due.
Also included within the figure for net assets are the deferred
income balances of £8,722,000 and the pension scheme liability of
36
£3,455,000. The deferred income figure arises as a consequence
of the group’s income recognition policy and represents income
received in advance. As such it is not normally repayable and is
shown separately within the balance sheets. The pension scheme
is funded by way of contributions, the amount of which has been
agreed with the scheme actuary. The cash flow forecasts prepared by
senior management show that the group will have positive cash flows
for at least 12 months from the date these financial statements are
approved. The UKRIAT Committee therefore considers that the group
has sufficient funds to meet its obligations as they fall due and deems
it appropriate that the financial statements are produced on a going
concern basis.
c. Consolidation policy
As ultimate control of the group’s subsidiary undertakings is vested
in the Institute, the results, assets and liabilities of these undertakings
are included in the group financial statements from the effective
date of acquisition or up to the date of disposal. These amounts are
taken from the latest audited financial statements of the undertakings
concerned which all have the same accounting reference date.
d. Investments
Investments are included in the balance sheet at cost, less provision
where there is deemed to be a permanent impairment in value.
e. Intangible fixed assets
Research expenditure is written off to the revenue statement in the
year in which it is incurred.
Development expenditure is written off in the same way unless the
technical, commercial and financial viability of individual projects is
such that the expenditure will derive future economic benefit. In these
circumstances, the expenditure is capitalised and amortised over a
period of three years, being the time the group is expected to benefit,
subject to annual impairment reviews.
Website development costs are capitalised if there is an enduring
asset whose future economic benefits generated by the website are
in excess of the amounts capitalised. Amounts capitalised will be
amortised on a straight line basis over their estimated useful lives up to
a period of three years following the final launch date of the finished
product. The carrying value of the intangible asset will be subject to
annual impairment reviews.
f. Tangible fixed assets and depreciation
Depreciation is provided on all tangible fixed assets and is calculated
on the straight line basis at the following per annum rates, which are
sufficient to reduce them to their estimated residual value:
Fixtures and fittings
Leasehold improvements
Computer equipment
Motor vehicles
10% to 33%
7%
15% to 33%
25%
Financials
Tangible fixed assets are depreciated from the beginning of the month
in which they were purchased.
g. Stocks
Stocks are valued at the lower of costs and net realisable value after
making due allowance for obsolete and slow moving items.
h. Operating income
Member subscription income is recognised in the year to which it
relates. Student examination income is recognised in the year in
which the examinations are taken. Member subscriptions and student
examination income received in advance of the year the subscription
falls due or of the year the examination is taken, are carried forward as
deferred income at the year-end.
Software licence income is recognised upon delivery of software at
customer sites. Software consultancy income is recognised on the
basis of the services provided under contractual obligations performed
over time. Partially completed contracts at the balance sheet date are
brought into account by reference to the value of work performed
and are included in the financial statements as accrued income.
Maintenance income is recognised evenly over the term of the
maintenance agreement and hosted services income is recognised over
the period to which the service relates.
The income from book sales is recognised upon despatch and
publications income is recognised in the year to which it relates.
Income from training courses and conferences is recognised upon the
timing of the event and all other income is recognised upon provision
of the goods or services.
Amounts received in advance of software maintenance and hosted
services income, amounts received in advance of the date the training
courses and conferences are held, and publications subscription
income received in advance of the year in which it falls due, are carried
forward as deferred income at the year-end.
Sales commissions payable in respect of deferred software
maintenance and hosted services income is carried forward as a
prepayment and included within debtors at the year-end.
i. Taxation
The Institute’s transactions with its members are not subject to tax.
Other transactions are taxable on a basis agreed with HM Revenue
& Customs.
j. Deferred taxation
As required by FRS19, Deferred Tax, full provision is made for deferred
tax liabilities arising from all material timing differences between
the recognition of gains and losses in the financial statements and
recognition in the tax computations except for those timing differences
in respect of which the standard specifies that deferred tax should
not be recognised. Deferred tax assets are only recognised where
their recoverability is regarded as being more likely than not. Deferred
tax assets and liabilities are calculated at the tax rate expected to be
effective at the time the timing differences are expected to reverse.
k. Retirement benefits
The costs of providing retirement benefits under the defined benefit
scheme are charged to the revenue statement in the year in which
the benefits are earned by the employees. The related finance costs
and any changes in the value of the assets and liabilities employed or
incurred in providing benefits are charged respectively to the revenue
statement and statement of total recognised gains and losses in the
year in which they arise. Any surplus or deficit in the defined benefit
pension scheme is shown in the balance sheet as an asset or liability.
Actuarial valuations are obtained triennially and updated under FRS17,
Retirement Benefits, at each balance sheet date.
The contributions payable in providing benefits under the defined
contribution scheme are charged to the revenue statement in the year
to which they relate.
l. Leasing
Rentals payable under operating leases are charged against the
revenue statement on a straight line basis over the lease term.
m. Foreign currency
Transactions in foreign currencies are translated at rates prevailing
at the date of the transaction. Balances denominated in foreign
currencies are translated at the rate of exchange prevailing at the
balance sheet date. Exchange differences arising on consolidation
from the retranslation of the opening net assets of the overseas
subsidiary undertaking are taken directly to reserves and disclosed in
the statement of total recognised gains and losses. All other exchange
differences are taken to the revenue statement.
The results of the overseas subsidiary undertakings have been
translated at an average rate for the year.
n. Estimates and provisions
The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts
of turnover and expenses during the reporting period. Although
these estimates are based on management’s best knowledge of the
amounts, events or actions, actual results ultimately may differ from
those estimates.
o. Related party transactions
Where appropriate the Institute has taken advantage of the exemption
available in paragraph 3 (c) of Financial Reporting Standard 8, not to
disclose inter group transactions.
37
2
(continued)
Operating income, gross contribution and operating surplus
2015
2015
2015
2015
2015
2015
ICSA ICSA Software
(professional International
ICSA
Publishing
ICSA
Services
Consolidation
and pension
Total
Limited
Limited
body)
Limited and
ICSA BoardRoom
Apps Limited
reserve
adjustments
group
£000
£000
£000
£000
£000
£000
Member income
2,307
–
–
–
–
2,307
Student income
1,317
–
–
–
–
1,317
Other professional income
1,068
–
–
–
–
1,068
4,692
–
–
–
–
4,692
(8)
24,758
Operating income
Professional activities
Commercial and other activities
Commercial activities
Other activities
29
22,912
482
1,343
132
–
–
–
–
132
161
22,912
482
1,343
(8)
24,890
Total operating income
4,853
22,912
482
1,343
(8)
29,582
(3,790)
18
(3,772)
(11,484)
(197)
(699)
8
(12,395)
11,428
285
644
18
13,415
(8,258)
(272)
(335)
265
(10,429)
3,170
13
309
283
2,986
2014
2014
2014
2014
2014
ICSA ICSA Software
(professional International
ICSA
Publishing
ICSA
Services
Consolidation
and pension
Total
Limited
Limited
(23)
Gross contribution
1,040
(1,829)
Operating (deficit)/surplus
(789)
2014
body)
–
Limited and
–
–
ICSA BoardRoom
Apps Limited
reserve
adjustments
group
£000
£000
£000
£000
£000
£000
Member income
2,252
–
–
–
–
2,252
Student income
1,358
–
–
–
–
1,358
Operating income
Professional activities
Other professional income
1,046
–
–
–
–
1,046
4,656
–
–
–
–
4,656
209
16,974
574
1,182
(32)
18,907
Commercial and other activities
Other activities
152
–
–
–
361
16,974
574
1,182
(32)
19,059
Total operating income
5,017
16,974
574
1,182
(32)
23,715
(3,429)
–
–
–
(185)
(8,360)
(198)
(610)
–
152
17
(3,412)
30
(9,323)
Gross contribution
1,403
8,614
376
572
15
(2,269)
(6,665)
(334)
(312)
200
(9,380)
1,949
42
260
215
1,600
Operating (deficit)/surplus
38
(866)
10,980
Financials
2
Operating income, gross contribution and operating surplus
(continued)
All operating income comprising professional activities arises in the UK.
The geographical split of revenue from commercial activities is as follows: UK £12,502,000 (2014: £10,210,000), Europe £1,664,000
(2014: £1,489,000), USA £4,412,000 (2014: £3,178,000), rest of world £6,180,000 (2014: £4,030,000).
Analysis of revenue arising from commercial activities
Conference facilities
Software sales and support services
Publications
Training courses and conferences
Board performance evaluation
Other
3
2015
2014
Group
Group
£000
£000
–
36
22,910
16,974
454
556
1,186
1,027
186
296
22
18
24,758
18,907
Direct costs
All items of expenditure directly attributable to the support of the profession and generation of operating income have been shown
as direct costs.
4
2015
2014
Group
Group
£000
£000
Premises – net of income from tenants of £41,000 (2014: £53,000)
578
953
Finance and general administration
463
511
Office costs
339
446
6,483
5,564
233
226
2,333
1,680
10,429
9,380
Support services
Amortisation of development costs
39
5
(continued)
2015
2014
Group
Group
£000
£000
2,349
1,680
474
435
19
5
52
47
Surplus on ordinary activities before taxation is stated after charging/(crediting):
Amortisation of capitalised development costs
Depreciation
Loss/(profit) on sale of tangible fixed assets
Auditor's remuneration:
Audit fees
Tax fees
23
26
Corporate finance advice
17
22
1,124
974
Operating lease rentals:
Land and buildings
Equipment
Exchange losses
58
50
124
109
13,520
9,586
1,317
1,193
Staff costs:
Salaries
Social security costs
Pension costs:
Defined benefit
174
233
Defined contribution
466
271
261
215
The average number of full time employees during the year was:
Employee benefit obligations
The Institute operates a funded defined benefit pension scheme, available to the employees of the Institute, ICSA Publishing Limited and ICSA
Services Limited, whose assets are held in separate trustee administered investment funds. The Institute accounts for pension arrangements in
accordance with FRS17, Retirement Benefits. The pension cost is assessed in accordance with advice from an independent qualified actuary using
the projected unit method. Contributions to the scheme are charged to expenditure in the year in which the benefits are earned by the employees.
The total pension cost, including expenses, charged in the accounts for the defined benefit pension scheme was £174,000 (2014: £233,000).
The scheme was closed to new members from 1 February 2005. The last actuarial valuation was at 1 August 2014, which was based on a range
of agreed assumptions. The market value of the scheme assets was £10.9 million, the funding level was 80% and the deficit in the scheme was
£2,747,000.
In accordance with advice from the actuary, the employer’s contribution increases from 15% to 19.6% from 1 August 2015. In addition, a monthly
contribution of £31,100 to offset the deficit in the scheme is payable over the period to 31 December 2023. The next actuarial valuation will have
an effective date of 1 August 2017.
From 1 May 2005, the Institute has contributed to a stakeholder scheme which is available to the employees of the Institute, ICSA Publishing
Limited and ICSA Services Limited. The Institute contributed £97,000 (2014: £64,000) during the year. Contributions owing at the year-end
amounted to £8,000 (2014: £8,000). ICSA Software International Limited operates three defined contribution schemes. The assets of these schemes
are held separately from those of the company in three independently administered funds. The pension cost charge represents contributions payable
by the company to the funds and amounted to £369,000 (2014: £207,000). Contributions totalling £29,000 (2014: £25,000) were payable at the
year-end and are included within creditors.
Financial Reporting Standard 17 (FRS17)
FRS17 changes the basis of accounting for pensions and other post-retirement benefits and requires additional disclosures which are given overleaf.
40
Financials
5
(continued)
Defined benefit pension scheme
(a) The amounts recognised in the balance sheet are as follows:
2015
2014
Group and ICSA
Group and ICSA
£000
£000
Present value of funded obligations
(15,470)
(13,898)
Fair value of scheme assets
12,015
11,295
Net liability
(3,455)
(b) The amounts recognised in the consolidated revenue statement are as follows:
Current service cost – net of employee contribution
Scheme expenses
Amount recognised in consolidated revenue statement
(c)Changes in the present value of the defined
benefit obligations are as follows:
(2,603)
2015
2014
Group and ICSA
Group and ICSA
£000
£000
99
80
75
153
174
233
2015
2015
2014
2014
Group and ICSA
Group and ICSA
Group and ICSA
Group and ICSA
£000
£000
£000
£000
Opening present value of defined benefit obligation
13,898
12,764
Current service cost
138
120
Interest cost
579
570
Actuarial (gains)/losses:
Experience gain
Loss on changes in assumptions
(201)
(37)
1,425
777
1,224
Benefits paid
Closing present value of defined benefit obligation
(d) Changes in the fair value of scheme assets are as follows:
740
(369)
(296)
15,470
13,898
2015
2015
2014
2014
Group and ICSA
Group and ICSA
Group and ICSA
Group and ICSA
£000
£000
£000
£000
Opening fair value of scheme assets
Expected return
11,295
10,345
611
570
Actuarial gains/(losses):
Gain on asset return
Change in secured pensioner value due to mortality experience
and changes in assumptions
Contributions by employer
Employee contributions
Scheme expenses
Benefits paid
Closing fair value of scheme assets
491
318
(429)
17
62
335
452
454
39
40
(75)
(153)
(369)
(296)
12,015
11,295
41
5
(continued)
(continued)
The main financial assumptions used are as follows:
2015
2014
%
%
Inflation
3.50
3.50
Increase in salaries
2.50
2.50
Rate of increase in pensions and deferred pensions
2.50
2.50
Rate used to discount scheme liabilities
3.60
4.20
Bonds
3.50
4.10
Equities
6.90
6.80
Property
5.90
5.80
Other
0.50
0.50
Expected rate of return on scheme assets:
The mortality assumptions adopted at 31 July imply the following life expectancies:
Number of years
Male retiring at age 65 in 2015
23.50
23.90
Female retiring at age 65 in 2015
25.60
25.80
Male retiring at age 65 in 2035
25.60
26.30
Female retiring at age 65 in 2035
27.90
28.10
The most important assumptions underlying the present value of the scheme liabilities are the rates of interest applied to discount the estimated
cash flows arising from the increases in pensionable salaries and in pensions in payment. The valuation of assets in the scheme is not affected by the
actuarial assumptions because the assets are measured at fair value. For those pensions which have been secured by the purchase of annuities the
fair value is measured as the amount of the related obligations.
History of experience
2015
2014
2013
2012
2011
Group and ICSA
Group and ICSA
Group and ICSA
Group and ICSA
Group and ICSA
£000
£000
£000
£000
£000
Scheme assets
12,015
11,295
10,345
9,282
8,473
Scheme liabilities
(15,470)
(13,898)
(12,764)
(13,195)
(10,121)
(3,455)
(2,603)
(2,419)
(3,913)
(1,648)
Net deficit
Experience adjustment on scheme assets
491
318
595
Experience adjustment on scheme liabilities
(228)
54
–
The major categories of scheme assets as a percentage of total scheme assets are as follows:
111
320
(142)
116
2015
2014
%
%
Bonds
43
41
Equities
41
41
Cash
Property
Secured pensions
42
1
1
15
14
–
3
100
100
Financials
6Taxation
(a) Analysis of charge in period
The taxation credit on the surplus on ordinary activities comprises:
Corporation tax payable for the current year
Foreign taxation
Adjustments in respect of prior years
2015
2014
Group
Group
£000
£000
161
39
20
182
(390)
(271)
(209)
(50)
11
(265)
365
258
Deferred taxation:
Current year
Under provision in respect of prior years
167
(57)
(b) Factors affecting the corporation tax charge for the year
The corporation tax assessed for the year is different from that at the standard rate of corporation tax in the UK of 20.67% (2014: 22.33%).
The differences are explained below:
Surplus on ordinary activities before taxation, multiplied by the standard rate of taxation in the UK of 20.67% (2014: 22.33%)
3,040
1,622
628
362
Effects of:
Income less expenditure not assessable for taxation purposes
Foreign taxation adjustments
Depreciation charged in excess of capital allowances
Unrelieved/(utilisation) of losses
87
(80)
R&D tax relief
(765)
(637)
634
705
12
135
(390)
(271)
(209)
(50)
Losses surrendered for R&D tax credit
Other short term timing differences
Adjustments in respect of prior periods
(44)
1
(372)
(55)
5
(214)
(c) Factors that may affect future taxation charges
The taxation charge for future years will be affected principally by the extent to which income is not assessable to corporation tax, expenses that are
not deductible for taxation purposes and R&D tax relief. The Institute has no accumulated Schedule A losses (2014: £14,765).
43
7
(continued)
Intangible fixed assets
Goodwill arising on acquisition and development costs:
Development
Website
costs
costs
£000
£000
£000
At 1 August 2014
7,071
86
7,157
Additions
4,453
–
4,453
Group
Total
Cost
Disposals
(996)
At 31 July 2015
–
(996)
10,528
86
10,614
At 1 August 2014
2,796
86
2,882
Charge for the year
2,349
–
2,349
Amortisation
Disposals
(996)
At 31 July 2015
–
(996)
4,149
86
4,235
At 31 July 2015
6,379
–
6,379
At 31 July 2014
4,275
–
4,275
Total
Net book value
8
Tangible fixed assets
Leasehold
Motor
Computer
improvements
vehicles
equipment
£000
£000
£000
£000
At 1 August 2014
865
20
1,735
2,620
Additions
214
and fixtures/
fittings
Group
Cost
Disposals
At 31 July 2015
(4)
20
373
607
(40)
(115)
(159)
1,075
–
1,993
3,068
At 1 August 2014
388
20
1,289
1,697
Charge for the year
131
2
341
474
Depreciation
Disposals
At 31 July 2015
(5)
(22)
(111)
(138)
514
–
1,519
2,033
At 31 July 2015
561
–
474
1,035
At 31 July 2014
477
–
446
923
Net book value
44
Financials
8
Tangible fixed assets
(continued)
Leasehold
Computer
improvements
equipment
Total
and fixtures/
fittings
ICSA
£000
£000
£000
444
210
654
Cost
At 1 August 2014
Additions
9
45
54
Disposals
–
(68)
(68)
At 31 July 2015
453
187
640
At 1 August 2014
52
151
203
Charge for the year
41
30
71
Depreciation
Disposals
At 31 July 2014
–
(68)
(68)
93
113
206
At 31 July 2015
360
74
434
At 31 July 2014
392
59
451
Net book value
9
Fixed asset investments
ICSA shareholdings
ICSA
£000
Cost
At 1 August 2014 and 31 July 2015
458
Amount provided
At 1 August 2014 and 31 July 2015
51
Net book value
At 31 July 2015
407
At 31 July 2014
407
45
9
Fixed asset investments
(continued)
(continued)
The subsidiary undertakings of ICSA at 31 July 2015 were:
% of equity
% of equity
2015
2014
Name
Principal activity
ICSA Software International Limited
Software development, sales and support services
100
100
ICSA BoardRoom Apps Limited
Software development, sales and support services
60
60
ICSA Publishing Limited
Publishing and professional education services
100
100
ICSA Services Limited
Board performance evaluation and education services
100
100
ICSA Software North America Inc.
100
100
ICSA BoardRoom Apps North America Inc.
60
60
ICSA BoardRoom Apps (HK) Limited
60
60
ICSA BoardRoom Apps GmbH
60
–
ICSA BoardRoom Solutions Limited
Dormant
100
100
ICSA Distance Learning Limited
Dormant
100
100
ICSA Information & Training Limited
Dormant
100
100
ICSA Recruitment Limited
Dormant
100
100
ICSA Software Limited
Dormant
100
100
ICSA Corporate Services Limited
Dormant
100
100
Incorporated Secretaries Association Limited
Dormant
100
100
COACT Limited
Dormant
100
100
Software Solutions (UK) Limited
Dormant
100
100
ICSA Nominees Limited
Dormant
100
100
The Governance Institute
Dormant
100
100
All subsidiary undertakings are owned directly by ICSA (and managed by the UKRIAT Committee) except for ICSA Software North America Inc,
which is owned by ICSA Software International Limited and ICSA BoardRoom Apps Limited in which each of the executive directors holds 20% of
the issued share capital. ICSA BoardRoom Apps North America Inc., ICSA BoardRoom Apps (HK) Limited and ICSA BoardRoom Apps GmbH are
owned directly by ICSA BoardRoom Apps Limited. All subsidiary undertakings are incorporated in the UK, except ICSA Software North America Inc
and ICSA BoardRoom Apps Inc. which are incorporated in the USA, ICSA BoardRoom Apps (HK) Limited which is incorporated in Hong Kong, and
ICSA BoardRoom Apps GmbH which is incorporated in Germany.
UKRIAT Nominees Limited changed its name to The Governance Institute on 18 March 2015.
10Stocks
Work in progress
Miscellaneous stocks
46
2015
2015
2014
2014
Group
ICSA
Group
ICSA
£000
£000
£000
£000
1
–
4
–
72
–
74
–
73
–
78
–
Financials
11Debtors
2015
2015
2014
2014
Group
ICSA
Group
ICSA
(Amounts falling due within one year)
£000
£000
£000
£000
Trade debtors
3,132
242
2,211
262
Amounts due from group undertakings
–
3,002
–
2,761
Other debtors
536
59
401
53
Deferred tax
458
–
834
–
Corporation tax
Prepayments and accrued income
8
–
261
–
1,318
227
930
140
5,452
3,530
4,637
3,216
The deferred tax asset includes trading losses accumulated in subsidiary undertakings to be utilised against expected trading profits arising in the
foreseeable future. This amount is not expected to be recoverable within the next 12 months.
12Creditors
2015
2015
2014
2014
Group
ICSA
Group
ICSA
(Amounts falling due within one year)
£000
£000
£000
£000
Trade creditors
1,019
166
785
138
–
64
–
5
Other creditors
206
4
127
1
Corporation tax
70
7
39
–
Amounts due to group undertakings
Other taxes and social security costs
Accruals
883
87
789
94
1,701
469
1,155
302
3,879
797
2,895
540
13 Deferred income
Deferred income represents member subscriptions and student examination income received in advance of the year the subscription falls due, or
of the year the examination is taken, amounts received in advance in respect of software maintenance agreements and hosted services, amounts
received in advance of the date of training courses and conferences and publications income received in advance of the year it falls due. As these
sums are not expected to be repaid in the normal course of business, they have been shown separately on the face of the balance sheet, and will be
released to revenue in the next financial year.
47
(continued)
14 Reconciliation of movement on reserves
Group
ICSA
Accumulated fund
Accumulated fund
Revenue
Pension
Total
Revenue
Pension
Total
account
reserve
reserves
account
reserve
reserves
£000
£000
£000
£000
£000
£000
At 1 August 2014
4,295
(2,603)
1,692
3,877
(2,603)
1,274
Surplus for the year
2,581
2,581
382
Pension reserve adjustment
Net actuarial loss in year
At 31 July 2015
–
(310)
–
310
(1,162)
(44)
6,522
–
(3,455)
–
(1,162)
(44)
3,067
(310)
–
–
3,949
–
310
(1,162)
–
382
–
(1,162)
–
(3,455)
494
2015
2014
£000
£000
15 Minority interest
Group and ICSA
At 1 August 2014
392
510
Revenue statement
(292)
(118)
At 31 July 2015
100
392
2015
2014
2014
Group
ICSA
Group
ICSA
£000
£000
£000
£000
Within one year
202
–
38
–
Between two and five years
443
–
488
–
After five years
479
448
448
448
–
–
1
1
58
58
44
44
–
–
5
5
16 Operating annual lease commitments
2015
Leases of land and buildings which expire:
Leases of equipment which expire:
Within one year
Between two and five years
After five years
17 Capital commitments
There were no capital commitments contracted for at 31 July 2015 (2014: nil).
48
Financials
18 Related party transactions
ICSA BoardRoom Apps Limited is deemed a related party as it is under common control. M Evans and J Lloyd, directors of ICSA Software
International Limited, are also both the executive directors and shareholders in ICSA BoardRoom Apps Limited.
During the year, ICSA Software and its subsidiary ICSA Software North America Inc. provided office space and staff resources to ICSA BoardRoom
Apps Limited at normal market price and entered into transactions in the ordinary course of business with ICSA BoardRoom Apps Limited and ICSA
BoardRoom Apps North America Inc and ICSA BoardRoom Apps (HK) Limited as follows:
Sales and
ICSA BoardRoom Apps North America Inc.
ICSA BoardRoom Apps (HK) Limited
Purchases
Amounts
Amounts
recharges to
from
owed to
owed from
related party
related party
related party
related party
£000
£000
£000
£000
7,500
934
204
4,114
349
–
–
178
25
–
–
43
49
18 Related party transactions
(continued)
(continued)
The UKRIAT Committee and staff
During the year the following members of the UKRIAT Committee charged or earned fees in respect of examination and training services and
associated expenses to the group as follows:
2015
2014
Group and ICSA
Transactions
Group and ICSA
Amount owing
Transactions
at 31 July
Members of UKRIAT Committee:
Amount owing
at 31 July
£000
£000
£000
£000
R A Cowe
2
–
2
–
M Jacob
–
–
3
–
2
–
5
–
Examination services:
Training services:
L Young
13
–
17
–
13
–
17
–
The services of Ms Young were invoiced from Lorraine Young Limited. The fees payable to Ms Young, comprised £3,000 (2014: £3,000) in respect
of writing technical articles for the Institute’s magazine and £10,000 (2014: £5,000) in respect of training services supplied to ICSA Services
Limited for which expenses of £1,000 were paid (2014: £1,000). In 2014 Ms Young received £9,000 in respect of training services supplied to
ICSA Publishing Limited.
Fees of £24,000 were payable to Mr Simon Osborne (2014: £40,000) in relation to the provision of services to clients of ICSA Services Limited. Mr
Osborne received no expenses during the year (2014: nil).
The costs of the Council
The costs of the Institute’s association management company, the costs of the Council and of the Professional Standards Committee meetings, and
a proportion of the costs of the UKRIAT staff involved in administering these committees were shared between the overseas divisions and UKRIAT
in proportion to the numbers of members and students living in each geographical area at 1 July of each year. For this purpose three students are
taken to equal one member. Each overseas division’s share is paid on its behalf by the third party independent service company or local society set
up in its divisional territory. The amount recharged by UKRIAT to the divisions in the year amounted to £212,000 (2014: £100,054).
50
Financials
Statement of the UKRIAT Committee’s responsibilities
in respect of the preparation of financial statements
The membership of the UKRIAT Committee recognises its
responsibility under byelaw 61.8 for the management and control
of the assets and liabilities of UKRIAT and for preparing the
financial statements of UKRIAT under UKRIAT Regulation
92. The financial statements of UKRIAT are also the financial
statements of the Institute and the UKRIAT Committee recognises
its responsibility for their preparation and approval.
The Institute is incorporated by Royal Charter and therefore is not
subject to UK company law. The UKRIAT Committee has elected to
prepare financial statements in accordance with United Kingdom
accounting standards and applicable law (United Kingdom Generally
Accepted Accounting Practice) and to have them audited.
The UKRIAT Committee is responsible for keeping adequate
accounting records that disclose with reasonable accuracy
at any time the financial position of the Institute and the
group. It is also responsible for safeguarding the assets of
the group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The UKRIAT Committee is responsible for the maintenance
and integrity of the corporate and financial information
included on the Institute’s website. Legislation in the UK
governing the preparation and dissemination of the financial
statements and other information included in the annual
reports may differ from legislation in other jurisdictions.
The financial statements of the Institute and the group are required to
give a true and fair view of the state of affairs and of the net surplus
or deficit of the Institute and the group for each year. In preparing
these financial statements the UKRIAT Committee is required to:
•select suitable accounting policies and then apply them consistently
• make judgements and estimates that are reasonable and prudent
•prepare the financial statements on a going concern basis unless
it is inappropriate to presume that the Institute and group will
continue in business.
51
Independent auditor’s report
to the members of the Institute of Chartered Secretaries and Administrators
We have audited the group financial statements of the Institute of
Chartered Secretaries and Administrators for the year ended 31
July 2015 which comprise the consolidated revenue statement, the
consolidated statement of total recognised gains and losses, the
balance sheets, the consolidated cash flow statement and the related
notes. The financial reporting framework that has been applied in
their preparation is applicable law and United Kingdom accounting
standards (United Kingdom Generally Accepted Accounting Practice).
Opinion on financial statements
In our opinion the financial statements:
This report is made solely to the Institute members as a body. Our
audit work has been undertaken so that we might state to the
Institute 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 Institute members as a body, for our
audit work, for this report, or for the opinions we have formed.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where
our engagement letter requires us to report to you if, in our opinion:
Respective responsibilities of UKRIAT Committee and auditor
As explained more fully in the statement of the UKRIAT Committee’s
responsibilities, the UKRIAT Committee is responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view. Our responsibility is to audit
the financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those standards
require us to comply with the Auditing Practices Board’s Ethical
Standards for Auditors.
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give reasonable
assurance that the group financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies
are appropriate to the group’s circumstances and have been
consistently applied and adequately disclosed; the reasonableness of
significant accounting estimates made by the UKRIAT Committee;
and the overall presentation of the financial statements.
In addition, we read all the financial and non-financial information
in the annual report to identify material inconsistencies with the
audited financial statements and to identify any information that is
apparently materially incorrect based on, or materially inconsistent
with, the knowledge acquired by us in the course of performing the
audit. If we become aware of any apparent material misstatements
or inconsistencies we consider the implications for our report.
52
•give a true and fair view of the state of affairs of the group and the
Institute as at 31 July 2015 and of the consolidated net surplus for
the year then ended; and
•have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice.
•adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches
not visited by us; or
•the financial statements are not in agreement with the
accounting records and returns; or
•we have not received all the information and explanations
we require for our audit.
Moore Stephens LLP
Chartered Accountants and Statutory Auditor
London, United Kingdom
17 December 2015
icsa.org.uk
ICSA senior management team
(as at the date of these financial statements)
Simon Osborne FCIS
Chief Executive
William Booth
Professional Development
Director
Christopher Glennie
Business Development
Director
Robert Ing
ACMA, CGMA
Finance Director
Charis Evans
Digital Strategy Director
Jeremy Lloyd
Technical Director, ICSA Software
International Limited and ICSA
Mike Evans
Managing Director, ICSA
Software International
Limited and ICSA
Peter Swabey FCIS
Policy and Research
Director
53
ICSA supports governance professionals at all levels with:
• A portfolio of respected professional qualifications
• Authoritative publications and technical guidance
• Breakfast briefings, training courses and national conferences
• CPD and networking events
• Research and advice
• Board evaluation services
• Market-leading entity management and board portal software
ICSA
Saffron House
6–10 Kirby Street
London EC1N 8TS
Phone: 020 7580 4741
Email: [email protected]
Web: icsa.org.uk
Twitter: @ICSA_News
LinkedIn: ICSA
Facebook: icsa-global

the report

Transcription

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