BRITISH CHAMBERS OF COMMERCE

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1 BRITISH CHAMBERS OF COMMERCE ANNUAL REVIEW, REPORT OF THE DIRECTORS AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 ST DECEMBER Follow British Chambers of Commerce on LinkedIn

2 CONTENTS COMPANY INFORMATION THANK YOU YEAR IN REVIEW REPORT OF THE DIRECTORS REPORT OF THE INDEPENDENT AUDITORS CONSOLIDATED PROFIT AND LOSS ACCOUNT CONSOLIDATED BALANCE SHEET COMPANY BALANCE SHEET NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS UK CHAMBERS OF COMMERCE GLOBAL CHAMBERS OF COMMERCE

3 Annual Report of the Directors and Consolidated Financial Statements COMPANY INFORMATION FOR THE YEAR ENDED 31 ST DECEMBER 2015 DIRECTORS: N Senior, President F Martin, Vice President AJ Marshall C Memmott D Bland G Watkins I Kelly J Warren M Clarke R Quigley R Truchy W Bowers SECRETARY: R Reger REGISTERED OFFICE: 65 Petty France, London, SW1H 9EU REGISTERED NUMBER: (England and Wales) AUDITORS: KPMG LLP, Statutory Auditor, One Snowhill, Snow Hill Queensway, Birmingham, B4 6GH 1

4 Annual Report of the Directors and Consolidated Financial Statements THANK YOU Dear Colleagues Every beginning has an end; every duty requires a change of the guard. After three years as President of British Chambers of Commerce, I am stepping down at the 2016 AGM. Holding this office has been an honourable duty and a great source of learning and personal pride. Nora Senior President When I took office, I identified three areas that I wanted to promote: international trade, making it easier and more cost effective for companies to trade internationally; strengthening the links between business and education; and raising the reputation and profile of the Chambers of Commerce as a national and global business network. I have seen the dial shift on each of these fronts during my term as President. There has been considerable progress on our ambition to become a truly global network. We have successfully created and expanded our Global Business Network to over 40 countries from Chile to Czech Republic to China, and we continue to strengthen our connections overseas. Given the need for the UK to radically improve its export performance, Chambers must remain at the heart of this agenda. During my term, I led the formation of an active International Trade Advisory Council (ITAC), including Chairs and CEOs of companies who operate in global markets. They are now acting as ambassadors and champions for the work of Chambers, both in the UK and overseas. The crucially important skills agenda has also evolved. Many of our Accredited Chambers in the UK are now actively adopting Young Chamber, and the first of our Business and Education Summits has taken place. My sincere thanks to the Board and Executive team for their terrific work to raise the profile and influence of the Chamber Network as the authentic voice of business. Our collective voice continues to ensure politicians, journalists and other influential figures maintain a clear focus on business needs. During the past three years, we have taken that influence into new channels of communications through social media, YouTube, animated videos and infographics as we reach out to new audiences. It has been a privilege to chair a Board of such diverse and rich experience and to help steer the BCC in its work to support a dynamic Chamber movement in what has been an uncertain economic environment. As a Board, our goal has always been to make the right decisions based on the long-term priorities of, and opportunities for, the Accredited Chamber Network. In particular, I would like to thank those Board members who are standing down, or retiring, at the AGM: Mark Clarke, who has completed six years on the Board and has chaired the Audit and Risk Committee assiduously; Wendy Bowers whom I thank for her considerable contribution on women s enterprise; and Robin Truchy, who provided input on digital engagement. My thanks to all the BCC Board, who have given their time freely and judiciously and provided me with good counsel. I warmly welcome two new Board members from the Network: Sarah Howard, President of Suffolk Chamber, and Lucy Winskell, Chair of the North East Chamber two strong Chamber leaders who I know will make a significant contribution to the future direction of BCC. Also, my sincere thanks to the numerous members of BCC committees who continue to provide valuable insights and advice on accreditation, nominations and policy. Your input is highly valued. Finally, thank you to all in the Chamber Network, who made me feel so welcome as a guest or speaker at events, conferences, dinners and business discussions. In my travels all over the world both as UK Regions Chair of Weber Shandwick and President of BCC, I made it my mission to promote the work of the Chamber Network. I shall continue to do so and to maintain an involvement in this unique business organisation. At this crucial time for the UK economy, Chambers of Commerce are more important than ever, acting as a front door to trade in every town, city and county across the UK, providing support to businesses and contributing to the success of the places they call home. As I stand down from the position as President, I wish my successor / our incoming President and the Chamber Network every success for the future. My final thought is just to say that in addition to my keynote themes of collaboration and connections when referring to Chambers, I will now add camaraderie! All best Nora Senior, President 2

5 YEAR IN REVIEW Dear colleagues and friends The past few months have been a time of significant, but positive, change for the BCC and the Chamber Network, following the departure of the BCC s Director General, with a more active engagement programme now being established. Nora Senior President This concerted drive to boost connectivity and communication has strengthened the partnership between the BCC Board, the executive team and the Accredited Chamber Network. We are continuing to improve the way we work to support the interests of Chambers and their members as our shared success as a Network is at the heart of everything we do. It would be easy, in light of the intense media scrutiny faced by the BCC in the early months of this year, to lose sight of the achievements of the BCC and the Chamber Network in 2015 into early Yet those achievements are very real and significant. Francis Martin Vice President Adam Marshall Acting Director General We have continued to drive forward the priorities of the three-year strategy shared by the BCC and the Network. We have demonstrated that the Chamber Network is an authentic and influential voice for business, continued to develop a Global Business Network to facilitate business-to-business trading links, and redoubled our efforts to tackle business skills gaps by better linking the world of education and the world of work. The successes achieved through representation of business issues, building media and political stakeholder profile and promoting key Chamber initiatives, stand as testament to the hard work of a small but dedicated team in Petty France, working together with committed colleagues across both the UK and Global Chamber Network. Highlights include: Representation wins: a permanent Annual Investment Allowance, a 1.5bn decrease in business rates bills, an independent National Infrastructure Commission created EU Referendum: strong neutral position maintained, with leading business surveys attracting high political and media attention Westminster profile: a 77% increase in parliamentary mentions between 2014 and 2015 Media profile: in excess of 5,000 media mentions in 2015, followed by a strong start to 2016 Authoritative surveys: QES response rates now at 8,500 on the way to 10,000 goal National events: high-profile Annual Conferences in 2015 and 2016, a growing International Trade Conference and our inaugural Business-Education Summit Global Business Network: 23 overseas British Chambers now fully Accredited, with many of these now adopting full membership of the BCC Bridging the Gap: 16 UK Chambers now have a live Young Chamber offer to bring local schools and businesses together to help address the skills gaps companies face Generating income: During 2015 we worked with 10 different commercial partners to deliver over 50 events with the Accredited Chamber of Commerce Network, generating tens of thousands of pounds of direct income for Chambers across the UK over and above other commercial and affinity schemes 3

6 Annual Report of the Directors and Consolidated Financial Statements Accreditation and Benchmarking: 2015 saw the development of an even more robust accreditation process, focused on ensuring that the services provided by the Chamber Network are underpinned by high quality standards. It also saw the introduction of an improved benchmarking process, putting more management information in the hands of Accredited Chambers Throughout 2016, we will be working to build further on these achievements whilst also responding to changing business conditions, global economic uncertainty, the EU referendum and other key events, in a responsible, professional and timely manner as the Chamber Network and Chamber members would rightly expect. 77% increase in parliamentary mentions from 2014 to 2015 We do this, not just as BCC, but as a better-connected and engaged Network. Many Chambers are now taking on Network-wide leadership roles, facilitating partnerships and joint projects that deliver real value to business communities nationwide. Over a dozen Chamber Fellows now lead policy and communication projects for the whole of the Network, demonstrating that the whole is definitively greater than the sum of its part. The President s assembly and the Chief Executives Roundtable are actively engaged in the consideration of future strategy, improved connectivity, and the appointment of a new BCC Director General. BCC continues to operate as a not-for-dividend entity, working to further the interests of its shareholders, stakeholders and customers: the Accredited Chamber. Despite challenging conditions, BCC recorded a small surplus at the close of 2015; we are confident that the BCC remains a strong and sustainable organisation (however the future funding model for a sustainable BCC may need to be considered). At this year s Annual General Meeting, both the BCC Board and the Executive look forward to listening to you, answering your queries, and discussing your ideas for the future as we work together to position both the BCC and the Network it serves to attain ever greater brand visibility, profile and credibility. 23 overseas British Chambers now fully Accredited In the meantime, if you would like to get in touch with any of us on matters of governance, policy and reputation or under service, please do not hesitate to get in touch. Yours sincerely 16 UK Chambers now have a live Young Chamber Nora Senior President Francis Martin Vice President Adam Marshall Acting Director General 4

7 REPORT OF THE DIRECTORS FOR THE YEAR ENDED 31 ST DECEMBER 2015 The directors present their report with the financial statements of the company and the group for the year ended 31 December RESULTS FOR THE YEAR The financial statements for the current year show a profit before tax of 14,577 (2014: 123,135), closing bank balances of 1,186,938 (2014: 1,750,362) and closing reserves of 1,166,952 (2014: 1,158,541); a strong end position. Turnover decreased by 780,746 (11%) to 6,114,784 in Note 2 explains the elements of turnover. Again, as with 2014, the two most significant projects were the Overseas Business Network programme (OBN) and the Business Banking Insight (BBI). The OBN brings together overseas British Chambers and business groups in 41 markets worldwide, facilitated and led by a partnership of the British Chambers of Commerce, UK Trade and Investment and The Foreign and Commonwealth Office. Funding for the Overseas Business Network programme (OBN) reduced in 2015, part of a programme of public sector retrenchment on government supported projects. The BBI was commissioned by the Chancellor and driven by the BCC and the Federation of Small Businesses (FSB). It is an independent website, which looks at how well the UK s small and medium-sized businesses are being served by banks and other finance providers. Overall, expenditure has decreased by 670,489 (10%) to 6,103,357 in This decrease in expenditure is mainly accounted for by the reduction of the cost of delivery of the OBN programme. In light of their scale, a summary of the financial impact of the OBN and BBI is given below. OBN OBN BBI BBI Turnover 656 1,310 1,526 1,354 Cost of sales ,367 1,228 Administrative expenses Administrative expenses at 3,325,480 decreased by 33,663 (1%) in Cost of sales decreased by 636,826 (19%) to 2,777,877 compared to This decrease again reflects the reduction in the Overseas Business Network programme. The carrying value of the tangible fixed assets has decreased in line with the deprecation charge in the year. The net current assets position has decreased by 103,261 to 1,133,944 due mainly to a decrease in cash balances by 563,424 to 1,186,938 with a corresponding decrease in creditors of 515,368 to 949,479; both decreases are as a consequence of payment timing on the Business Banking Insight. 5

8 Annual Report of the Directors and Consolidated Financial Statements PRINCIPAL ACTIVITIES British Chambers of Commerce is a company limited by guarantee with 52 UK members; the maximum liability of each Accredited Chamber member is 5. Together we are recognised as a clear, consistent and respected voice for business of every size and sector, and in every part of the United Kingdom. We continue to work for the network of Accredited Chambers of Commerce to be the 'go to' organisation for growing businesses, for companies seeking support to trade internationally, and for partners seeking to broaden their links to local business communities across the UK. The BCC's principal activities in 2015 are outlined below: 2015 was a hugely busy year, with the Prime Minister's speech at the BCC Annual Conference, the Business Manifesto campaign, the general election, shifts in the global economy, devolution, the Spending Review and the EU referendum debate all front-and-centre in our work. The BCC focused on both the big-picture issues facing British business, as well as practical changes that make everyday trading better for Chambers and their members - fighting hard on regulation, energy security, business rates, global trade barriers, training and apprenticeships, tax administration, digital connectivity, visas and so much more. This has contributed to the achievement of tangible and positive changes that make doing business that much easier whilst also performing an unseen but crucial role in stopping harmful policies from seeing the light of day. The BCC continued to build a global network, with British Chambers in countries across the globe taking representation and campaigning work to another level. Voice of Business: The majority of Business Manifesto proposals were under active UK government consideration by the end of 2015 with major confirmed Manifesto policy wins by the end of Permanent Annual Investment Allowances were introduced and the Independent Infrastructure Commission created. There was significant progress on: assessment of secondary schools on employment outcomes / business engagement; increased childcare support; strengthened British Business Bank and UK export finance; reducing policy decisions that increase energy costs for UK businesses; legal framework for HS2; capital infrastructure commitments and investment (road and rail schemes); fast-tracked planning for some housing developments; and simplified fast-track visa access for many international businesspeople. There was some progress in other areas with the following under consideration by government: business governors in all schools; universal experience of work to improve employment prospects; CMA SME banking investigation; taxation changes around mergers and acquisitions; reform of Air Passenger Duty; and better public sector procurement, both nationally and locally. A review of business rates and revaluation is underway but not complete at the time of writing. In other significant advocacy roles, the Cole Commission recommended a prominent 6

9 position for Chamber Network in its interim and final reports. In the Spending Review (November 2015) the BCC made a successful case for the preservation of infrastructure (road and rail), further Education and Science spending and won a new commitment to reduce the burden of tax administration on businesses. The future of the UK relationship with the EU formed part of the BCC survey programme with a non-aligned survey and explanatory work. Global Network: There are now 23 BCC Accredited British Chambers and business groups around the world. The BCC continued to build a global network, with British Chambers in countries across the globe taking representation and campaigning work to another level; the BCC is the only organisation that can speak up for British businesses and their trading partners wherever they may be based across the world. Business and Education: In 2015, we continued to build on the new cross-network action campaign to bridge the gap between business and education so that companies can obtain the skills they need and young people have a better chance at career success. The first ever Business and Education Summit was a resounding success at the BT Centre in London, in December. The BCC launched this event in order to bring together leaders from the world of business and education, so that together we can address the challenge we face of preparing tomorrow s workforce and increasing the collaboration between business and education. To rise to this challenge, the Chamber Network continued working to build a sustainable partnership between education and business that will better prepare the workforce of tomorrow through initiatives such as Young Chamber. Brand: The on-going brand awareness campaign broke new ground, with almost all Accredited UK Chambers participating and with 50,000 views of Chamber Network animated videos and 25,000 additional Twitter followers for the Chamber Network and BCC in was an important year for the BCC together with the Accredited Chamber Network, implementing a new strategy, and focusing two key campaigns - international trade and bridging the gap between business and education. FUTURE DEVELOPMENTS The BCC will continue to be an authentic voice for Britain s business community and a leading economic commentator. It will be a facilitator of the Accredited Chamber Network and protect and promote the Accredited Chamber brand. As part of the campaigns agreed for our Network Strategy for the years ahead the BCC will campaign to: Position Chambers as leading private provider for UK exporters; Step change the role of Chambers in bridging the gap between the worlds of education and business. EVENTS SINCE THE END OF THE YEAR Information relating to events since the end of the year is given in the notes to the financial statements. DIRECTORS The directors shown below have held office during the whole of the period from 1 January 2015 to the date of this report. N Senior President, F Martin Vice President, C Memmott, D Bland, I Kelly, J Warren, M Clarke, R Quigley, R Truchy and W Bowers. Other changes in directors holding office are as follows: G Watkins was appointed as a director on 16 July 2015 AJ Marshall was appointed as a director on 17 March 2016 J Longworth ceased to be a director on 6 March 2016 British Chambers of Commerce has put in place a Directors and Officers liability insurance policy with aggregate cover of 3 million per annum 7

10 Annual Report of the Directors and Consolidated Financial Statements PRINCIPAL RISKS AND UNCERTAINTIES There are a number of major challenges in the years ahead. The on-going public sector retrenchment will have impacts, both positive and negative, on the British Chambers of Commerce and the Chamber Network, where a significant element of income is generated from government contracts. We face competition on many fronts, from commercial opportunities to membership and online services. The British Chambers of Commerce and its members will continue to work together to modernise the Chamber movement, keeping the best elements of our tried and tested business model while simultaneously embracing new technologies, developing new services and improving our customer offering. GOING CONCERN The group s business activities, together with the factors likely to affect its future development, performance and position are set out in the review of the business on pages 5 to 7. The group s closing bank balances and reserves are shown within the Results for the Year note on page 5 and its available banking facilities, together with its strong customer and supplier base, and pipeline of activities for the coming 12 months, provide confidence to the directors who believe that the group has adequate resources and is well placed to manage its business risks successfully despite the current uncertain economic and political climate, and the uncertainties relating to the outcome of the EU Referendum on 23 June Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements. CORPORATE GOVERNANCE The key elements and roles of the BCC s Governance Structures are outlined below: The Board: Contributes to and approves Corporate Strategy and yearly Business Plans. It monitors risk and holds the Executive to account. Members of the Board act as ambassadors for the British Chambers of Commerce and are appointed to the Standing Committees. In total there are 12 directors, seven of which are UK Chamber members, two of which are UK Chamber Chief Executives, one of which is an Overseas Chamber Chief Executive and two are Executive Directors. The President s Assembly: Led by the President of the British Chambers of Commerce, the President s Assembly is consulted and contributes directly to BCC s campaign strategy for business in general. The Management Team: Led by the Acting Director General, the Operations Board develop and deliver the agreed Strategy. It represents the Accredited Chambers Network interests and facilitates and harnesses the many skills from across the Accredited Chamber Network. Committee Structures and Advisory Panels: In addition to Standing Committees the British Chambers of Commerce also has a number of Advisory Panels on policy and commercial activities which inform and refine the British Chambers of Commerce s work in these areas. The key Standing Committees are: The Accreditation Boards (UK & Global): With responsibility for Accreditation of new members and maintenance of the Accreditation Standards; The Nominations Committee: Comprising of the President, two persons appointed by the President s Assembly and two other persons nominated by the Board. The Nominations Committee has responsibility for nomination of non-executive British Chambers of Commerce board members. When vacancies arise then the Committee seek suitable candidates that match the needs and skills of the British Chambers of Commerce Board; The Certification Group: With responsibility for discussing and reviewing technical issues on documentation services; The Audit and Risk Management Committee: Gives assurance to the Board with regard to the maintenance of an effective system of internal control including: the effectiveness of the system of governance, risk management and internal control; the integrity of the Annual Accounts; internal audit requirements and activity, if any; and the external audit by the external auditor; The Remuneration Committee: Sets the reward for the Director General of the British Chambers of Commerce and his management team. 8

11 STATEMENT OF DIRECTORS RESPONSIBILITIES The directors are responsible for preparing the Report of the Directors and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: Select suitable accounting policies and then apply them consistently; Make judgements and accounting estimates that are reasonable and prudent; Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company s and the group s transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group s auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group s auditors are aware of that information. AUDITORS The auditors, KPMG LLP, Statutory Auditor, will be proposed for re-appointment at the forthcoming Annual General Meeting. This report has been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies. ON BEHALF OF THE BOARD R Reger, Secretary DATE: 2 nd June

12 Annual Report of the Directors and Consolidated Financial Statements REPORT OF THE INDEPENDENT AUDITORS FOR THE YEAR ENDED 31 ST DECEMBER 2015 We have audited the financial statements of British Chambers of Commerce for the year ended 31 December 2015 on pages 11 to 22. The financial reporting framework that has been applied in their preparation is applicable law and the Financial Reporting Standard for Smaller Entities (effective January 2015) (United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities). This report is made solely to the company s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act Our audit work has been undertaken so that we might state to the company s members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As explained fully in the Statement of Directors Responsibilities set out on page 9, the directors are 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 and express an opinion on 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. Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the Financial Reporting Council s website at: Opinion on financial statements In our opinion the financial statements: Give a true and fair view of the state of the group s and of the parent company s affairs as at 31 December 2015 and of the group s profit for the year then ended Have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities; and Have been prepared in accordance with the requirements of the Companies Act Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: Adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or The parent company financial statements are not in agreement with the accounting records and returns; or Certain disclosures of directors remuneration specified by law are not made; or We have not received all the information and explanations we require for our audit; or The directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies exemption from the requirement to prepare a Group Strategic Report or in preparing the Report of the Directors. Anthony Felthouse (Senior Statutory Auditor) For and on behalf of KPMG LLP, Statutory Auditor. One Snowhill, Snow Hill Queensway, Birmingham, B4 6GH DATE: 2 nd June

13 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 ST DECEMBER 2015 Notes TURNOVER 2 6,114,784 6,895,530 Cost of sales 2,777,877 3,414,703 GROSS PROFIT 3,336,907 3,480,827 Administrative expenses 3,325,480 3,359,143 OPERATING PROFIT 5 11, ,684 Interest receivable and similar income PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION Tax on profit on ordinary activities PROFIT FOR THE FINANCIAL YEAR FOR THE GROUP 3,150 1,451 14, , ,166 28,180 8,411 94,955 11

14 Annual Report of the Directors and Consolidated Financial Statements CONSOLIDATED BALANCE SHEET FOR THE YEAR ENDED 31 ST DECEMBER 2015 Notes FIXED ASSETS Tangible assets 8 58,208 80,162 Investments 9 58,208 80,162 CURRENT ASSETS Debtors , , , ,690 Cash at bank 1,186,938 1,186,938 1,750,362 1,750,362 2,083,423 2,083,4232,702,052 2,702,052 CREDITORS Amounts falling due within one year ,479 1,464,847 NET CURRENT ASSETS 1,133,944 1,237,205 TOTAL ASSETS LESS CURRENT LIABILITIES PROVISIONS FOR LIABILITIES 1,192,152 1,317, , ,826 NET ASSETS 1,166,952 1,158,541 RESERVES Profit and loss account 14 1,166,952 1,158,541 1,166,952 1,158,541 The financial statements have been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies and with the Financial Reporting Standard for Smaller Entities (effective January 2015). The financial statements were approved by the Board of Directors on 2 nd June 2016 and were signed on its behalf by: Nora Senior, President AJ Marshall, Acting Director General 12

15 COMPANY BALANCE SHEET FOR THE YEAR ENDED 31 ST DECEMBER 2015 Notes FIXED ASSETS Tangible assets 8 58,208 80,162 Investments ,212 80,166 CURRENT ASSETS Debtors , , , ,687 Cash at bank 1,186,943 1,186,943 1,750,367 1,750,367 2,083,425 2,083,4252,702,0542,702,054 CREDITORS Amounts falling due within one year ,484 1,464,852 NET CURRENT ASSETS 1,133,941 1,237,202 TOTAL ASSETS LESS CURRENT LIABILITIES PROVISIONS FOR LIABILITIES 1,192,153 1,317, , ,826 NET ASSETS 1,166,953 1,158,542 RESERVES Profit and loss account 14 1,166,953 1,158,542 1,166,953 1,158,542 The financial statements have been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies and with the Financial Reporting Standard for Smaller Entities (effective January 2015). The financial statements were approved by the Board of Directors on 2 nd June 2016 and were signed on its behalf by: Nora Senior, President AJ Marshall, Acting Director General 13

16 Annual Report of the Directors and Consolidated Financial Statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 ST DECEMBER ACCOUNTING POLICIES Basis of preparing the financial statements: These financial statements have been prepared in accordance with the Financial Reporting Standard for Smaller Entities (effective January 2015) and the Companies Act The financial statements have been prepared under the historical cost convention. Basis of consolidation: The group financial statements consolidate those of the company and of its subsidiary undertakings drawn up to 31 December Related party exemption: The company has taken advantage of exemption, under the terms of Financial Reporting Standard for Smaller Entities (effective January 2015), not to disclose related party transactions with wholly owned subsidiaries within the group. Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements. Turnover: The turnover shown in the profit and loss account represents amounts receivable for services performed during the year. Where a service is performed which spans the year end, turnover is recognised based on management s best estimate of work performed to date and the level of work required to complete the service. Where this is different to amounts invoiced in the year, turnover is deferred or accrued accordingly. Tangible fixed assets: All fixed assets are recorded at cost. The company has a capitalisation limit of 500 of cost value in order for an item to be classified as a fixed asset. Depreciation is provided at various rates in order to write off the cost less residual value of each asset over its estimated useful life. The estimated useful life of an asset is the period over which the company expects to obtain economic benefit or service potential from the asset. Estimated useful lives and residual values are reviewed each year end, with the effect of any change being recognised on a prospective basis. Deferred tax: Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. Deferred tax assets are only recognised to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date. Foreign currencies: Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. 14

17 Hire purchase and leasing commitments: Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. Pension costs and other post-retirement benefits: The group operates a defined contribution pension scheme. Contributions payable to the group s pension scheme are charged to profit or loss in the period to which they relate. Cost of sales: The cost of sales shown in the income and expenditure account represents directly attributable costs in relation to the revenue, excluding staff costs which are included within administrative expenses. Risk management: Currency risk - The group is principally a domestic organisation with the great majority of transactions, assets and liabilities being in the UK and Sterling based. The group has no overseas operation. The group therefore has low exposure to currency rate fluctuations. Interest rate risk - The group has no borrowings. The group therefore has no exposure to interest rate fluctuations. Credit risk - Because of the nature and source of the majority of the income of the group, the group has low exposure to credit risk. Liquidity risk - The group is not exposed to significant liquidity risks. Bad debts: Outstanding debts over three months old and with no known repayment plan in place are provided for at a rate of 100% based on previous company experience of recoveries. 2. TURNOVER The turnover and surplus before taxation are attributable to the principal activities of the group. The turnover of the group, which all relates to the United Kingdom, analysed by activity is given below: Affiliation fees from member Chambers 982, ,715 Overseas Business Network Programme (OBN) 655,921 1,310,851 Business Banking Insight 1,526,491 1,354,203 Commercial activities and other Chamber income 2,950,219 3,263,761 6,114,784 6,895,530 The major sources of income for 2015 were Affiliation Fees (16% of turnover), Overseas Business Network Programme (11% of turnover), Business Banking Insight (25% of turnover), income relating to UKTI contracts regarding the Inward Investment Programme (8% of turnover), and Documentation Services income (14% of turnover). In addition, income is generated via events such as the Annual Conference and Awards Dinner and through various sponsorship agreements (14% of turnover) and 12% from other activities. 15

18 Annual Report of the Directors and Consolidated Financial Statements 3. STAFF COSTS Wages and salaries 1,883,507 2,006,875 Other pension costs 218, ,948 2,101,548 2,171,823 The average monthly number of employees during the year was as follows: Policy and communications Operations and development 4 4 BCC commercial enterprises Wages and salaries have decreased despite the increase in the average number of employees due to a different mix of staff costs. Pension costs have increased due to the impact of auto enrolment and increased uptake of the salary sacrifice arrangements (see note 20). 4. DIRECTORS EMOLUMENTS Remuneration in respect of directors was as follows: Emoluments received (including benefits in kind) 369, ,959 Value for company pension contributions 38,661 42, , ,575 No remuneration is payable to non executive members of the Board. The Director General and Corporate Services Director receive remuneration by reason of their employment by the company. Remuneration in respect of the highest paid director, the former Director General, was as follows: Emoluments receivable (including benefits in kind) post pension salary sacrifice schemes Value of company pension contributions to money purchase schemes 256, ,979 23,535 28, , ,384 In addition to the above, one director received 11,812 (2014: 9,975) under a contract for services in relation to his role as Chair of the Audit and Risk Management Committee. Directors emoluments have increased during the year as a result of the payment of the Long Term Incentive Plan awarded over the previous three years. 16

19 5. OPERATING PROFIT The operating profit is stated after charging: Depreciation - owned assets 30,414 28,122 Auditors' remuneration 15,450 15,290 Foreign exchange differences 1,630 2,096 Auditors' fees for non audit services 4,500 4,500 Hire of plant and machinery 10,049 14, TAXATION Analysis of the tax charge The tax charge on the profit on ordinary activities for the year was as follows: Current tax: UK corporation tax (12,566) 30,950 Prior year under provision 37 15,517 Total current tax (12,529) 46,467 Deferred tax 18,695 (18,287) Tax on profit on ordinary activities 6,166 28,180 Factors affecting the tax charge The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: Profit on ordinary activities before tax 14, ,135 Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK of 20% ( %) 2,915 25,858 Effects of: Expenses not deductible for tax purposes 288 Capital allowances in excess of depreciation (474) (4,970) Adjustments to tax charge in respect of previous periods 37 15,476 Depreciation on ineligibles 3,294 3,417 Decrease/(increase) in other timing differences (18,221) 7,857 Tax rate higher in previous years than 20% (2014: 21%) on taxable profits (80) (1,316) Rounding (143) Current tax charge (12,529) 46,467 The significant increase in other timing differences is due to the utilisation of the long term incentive plan provision. 17

20 Annual Report of the Directors and Consolidated Financial Statements Analysis of the tax charge - Deferred tax charge: There is a deferred tax charge in the year largely due to the award of the Long Term Incentive Plan. This is treated as tax deductible when paid. In the previous year it had been recorded as a deferred tax asset and a credit to the profit and loss account. Once the award was paid the asset has reversed and generated a charge in the accounts. 7. PROFIT OF PARENT COMPANY As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the parent company is not presented as part of these financial statements. The parent company s profit for the year after taxation and after the receipt of a nil dividend (2014-5,394) from the subsidiary ChamberSign Limited was 8,411 ( ,186). 8. TANGIBLE FIXED ASSETS GROUP COST Leasehold property Office equipment Totals At 1 January ,769 51, ,925 Additions 8,460 8,460 At 31 December ,769 59, ,385 DEPRECIATION At 1 January ,281 29,482 65,763 Charge for year 18,939 11,475 30,414 At 31 December ,220 40,957 96,177 NET BOOK VALUE At 31 December ,549 18,659 58,208 At 31 December ,488 21,674 80,162 COMPANY COST Leasehold property Office equipment Totals At 1 January ,769 51, ,925 Additions 8,460 8,460 At 31 December ,769 59, ,385 DEPRECIATION At 1 January ,281 29,482 65,763 Charge for year 18,939 11,475 30,414 At 31 December ,220 40,957 96,177 NET BOOK VALUE At 31 December ,549 18,659 58,208 At 31 December ,488 21,674 80,162 18

21 9. FIXED ASSET INVESTMENTS COMPANY COST Shares in group undertakings At 1 January 2015 and 31 December NET BOOK VALUE At 31 December At 31 December The group or the company s investments at the Balance Sheet date in the share capital of companies include the following: SUBSIDIARIES NATIONAL CHAMBER OF TRADE LIMITED Nature of business: Dormant Class of shares: Ordinary CHAMBERCARD LIMITED Nature of business: Dormant Class of shares: Ordinary CHAMBERSIGN LIMITED Nature of business: Non trading Class of shares: Ordinary % holding % holding % holding DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR GROUP COMPANY Trade debtors 617, , , ,211 Other debtors 279, , , , , , , ,687 Debtors are shown net of the bad debt provision. The bad debt provision at 31 December 2015 was 15,000 ( ,000) and was based on the value of debts where collection is considered to be doubtful. Included in other debtors is deferred tax amounting to 4,226 ( ,921). The deferred tax asset represents short term timing differences in the tax treatment of fixed assets and certain provisions in the accounts. During the year the Long Term Incentive Plan, previously provided for, has been awarded resulting in a tax charge in the accounts and a corresponding reduction in the deferred tax asset. 19

22 Annual Report of the Directors and Consolidated Financial Statements 11. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR GROUP COMPANY Trade creditors 555, , , ,515 Amounts owed to group undertakings Taxation and social security 83,493 98,840 83,452 98,799 Other creditors 310, , , , ,479 1,464, ,484 1,464, LEASING AGREEMENTS GROUP Non-cancellable operating leases Within one year 10,379 5,484 Between one and five years 80,530 88,983 90,909 94,467 COMPANY Within one year 10,379 5,484 Between one and five years 80,530 88, PROVISIONS FOR LIABILITIES GROUP 90,909 94,467 COMPANY Other provisions 25, ,826 25, ,826 Aggregate amounts 25, ,826 25, ,826 GROUP OTHER PROVISIONS Balance at 1 January ,826 Movement in year (133,626 ) Balance at 31 December ,200 COMPANY OTHER PROVISIONS Balance at 1 January ,826 Movement in year (133,626 ) Balance at 31 December ,200 20

23 The provision in the current year relates to rectification work required on the property leased by the company. Included in the prior year, in addition to this provision, were provisions for the performance incentive scheme and digital strategy development. 14. RESERVES GROUP PROFIT AND LOSS ACCOUNT At 1 January ,158,541 Profit for the year 8,411 At 31 December ,166,952 COMPANY PROFIT AND LOSS ACCOUNT At 1 January ,158,542 Profit for the year 8,411 At 31 December ,166, CONTINGENT LIABILITIES There were no contingent liabilities at 31 December 2015 or 31 December CAPITAL COMMITMENTS There were no capital commitments at 31 December 2015 or 31 December RELATED PARTY DISCLOSURES No transactions with related parties were undertaken such as are required to be disclosed under Financial Reporting standard 8. In addition to the Director General and the Finance Director, the British Chambers of Commerce Board is made up of seven business representatives of UK Chamber Members, two UK Chamber Chief Executives and one Overseas Chamber Chief Executive; this being as provided in the Articles of British Chambers of Commerce. Apart from the Director General and the Finance Director, no remuneration is paid in connection with Board duties. British Chambers of Commerce wholly owns ChamberSign Limited, which was dormant in the current year. 18. POST BALANCE SHEET EVENTS On 6 March 2016 Mr John Longworth resigned as BCC s Director General and this resignation was accepted by the BCC Board with effect from that date. Following this resignation, on 7th March 2016 the Board appointed Dr Adam Marshall as BCC s Acting Director General pending further consideration, yet to be finalised, by the Board regarding a permanent successor to Mr Longworth. Costs associated with the departure are legal fees. 21

24 Annual Report of the Directors and Consolidated Financial Statements 19. LIMITED BY GUARANTEE The liability of the members of the company is limited by guarantee. Each member has undertaken to contribute 5 on winding up of the company. As at 31 December 2015 the company had 52 Chambers of Commerce who are members ( ). 20. PENSIONS British Chambers of Commerce introduced a salary sacrifice arrangement on 1 June The terms and conditions of employment were changed for those employees opting for the salary sacrifice arrangement and as a result employees now sacrifice an amount of salary equivalent to their previous employee pension contribution and, in return, BCC increases the level of employer contribution by an amount equivalent to the level of salary sacrificed. Wages and salaries, and pension costs have been adjusted as a consequence of the salary sacrifice scheme. There were 16 employees in the salary sacrifice scheme as at 31 December 2015 (2014: 20). One employee had a personal pension scheme which the company contributed to as at the year end date of 31 December 2015 (2014: one). Total pension costs for the year amounted to 218,041 (2014: 164,948). Pension costs have increased due to the impact of auto enrolment and increased uptake of the salary sacrifice arrangements. Pension contributions relating to the year ended December 2015, totalling 15,907 were paid to the pension scheme in January 2016 (2014: 13,387). 22

25 UK CHAMBERS OF COMMERCE Aberdeen and Grampian Chamber of Commerce Ayrshire Chamber of Commerce and Industry Barnsley & Rotherham Chamber of Commerce Bedfordshire Chamber of Commerce Black Country Chamber of Commerce Business West Chamber of Commerce Cambridgeshire Chambers of Commerce Cornwall Chamber of Commerce Coventry & Warwickshire Chamber of Commerce Cumbria Chamber of Commerce and Industry Devon Chamber of Commerce Doncaster Chamber of Commerce Dorset Chamber of Commerce & Industry East Lancashire Chamber of Commerce East Midlands Chamber - Derbyshire, Nottinghamshire and Leicestershire Edinburgh Chamber of Commerce Essex Chambers of Commerce Fife Chamber of Commerce & Enterprise Ltd Glasgow Chamber of Commerce Greater Birmingham Chambers of Commerce Group Greater Manchester Chamber of Commerce Hampshire Chamber of Commerce Herefordshire and Worcestershire Chamber of Commerce Hertfordshire Chamber of Commerce and Industry Hull & Humber Chamber of Commerce Inverness Chamber of Commerce Isle of Wight Chamber of Commerce, Tourism and Industry Kent Invicta Chamber of Commerce Lincolnshire Chamber of Commerce Liverpool & Sefton Chambers of Commerce London Chamber of Commerce and Industry Mid-Yorkshire Chamber of Commerce Norfolk Chamber of Commerce North & Western Lancashire Chamber of Commerce North East England Chamber of Commerce Northamptonshire Chamber of Commerce Northern Ireland Chamber of Commerce & Industry Renfrewshire Chamber of Commerce Sheffield Chamber of Commerce & Industry Shropshire Chamber of Commerce & Enterprise Somerset Chamber of Commerce & Industry Ltd South Cheshire Chamber of Commerce South Wales Chamber of Commerce St Helens Chamber Staffordshire Chambers of Commerce Suffolk Chamber of Commerce Surrey Chambers of Commerce Sussex Chamber of Commerce Thames Valley Chamber of Commerce West & North Yorkshire Chamber of Commerce West Cheshire & North Wales Chamber of Commerce Wirral Chamber of Commerce 23