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The Investor Relations Society
Annual Report of the Directors
and Financial Statements
2005
Building relationships
Reporting for the year ended 31st December 2005
For The Investor Relations Society Limited By Guarantee
www.irs.org.uk
Annual Report of the Directors
The Investor Relations Society and Financial Statements
2005
Contents
Company Information 03
Report of the Directors 04
Chairman’s Statement 06
Treasurer’s Statement 10
Report of the Independent Auditors 12
Profit and Loss Account 14
Balance Sheet 15
Cash Flow Statement 16
Notes to the Financial Statements 17
Designed by The Group
www.the-group.net
www.irs.org.uk 2 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Company Information
for the year ended 31st December 2005
Directors:
Lynda Ashton
Richard Davies
Peregrine Riviere
Ian Arnold
Raghnall Craighead
Diane Faulks
Rebecca Ford
Mark Hynes
Claire Jenkins
Gary Leibowitz
Alexander Loehnis
Andrew Mann
Michael Mitchell
Keith Russell
Jill Sherratt
Secretary:
Hazel Jarvis
Registered Office:
Bedford House
3 Bedford Street
London
WC2E 9HD
Registered number:
2294631 (England and Wales)
Auditors:
Cook and Partners
Chartered Accountants
and Registered Auditors
108 High Street
Stevenage
Hertfordshire
SG1 3DW
www.irs.org.uk 3 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Report of the Directors
for the year ended 31st December 2005
The directors present their report with the financial statements of the company
for the year ended 31st December 2005.
Principal activity
The principal activity of the company in the year under review was that of
the promotion of commerce by fostering and improving good relations, for
the benefit of its members, between companies quoted on the stock exchanges
throughout the world and their investors and potential investors.
Directors
The Directors during the year under review were:
Lynda Ashton
Richard Davies
Peregrine Riviere
Raghnall Craighead
Diane Faulks
Claire Jenkins
Gary Leibowitz
Alexander Loehnis
Andrew Mann
Michael Mitchell
Keith Russell
Jill Sherratt
Ian Arnold – appointed 19.04.05
Mark Hynes – appointed 19.04.05
Rebecca Ford – appointed 24.06.05
Bridget Walker – resigned 25.01.05
Statement of Directors’ responsibilities
The directors are responsible for preparing the financial statements in
accordance with applicable law and United Kingdom Generally Accepted
Accounting Practice.
Company law requires the directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the
company and of the profit or loss of the company for that period. In preparing
those financial statements, the directors are 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 the going concern basis unless it
is inappropriate to presume that the company will continue in business.
www.irs.org.uk 4 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Report of the Directors
for the year ended 31st December 2005
continued
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the financial statements comply
with the Companies Act 1985. They are also responsible for safeguarding the
assets of the company 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 234ZA of the Companies Act 1985) of which the company’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 company’s auditors
are aware of that information.
Auditors
The auditors, Cook and Partners, will be proposed for re-appointment in
accordance with Section 385 of the Companies Act 1985.
www.irs.org.uk 5 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Chairman’s Statement
“I am delighted to I am delighted to report that the Society made further good progress in 2005,
its 25th anniversary year, building on the strengthened financial and operating
report that the Society platform put in place in 2004. I am confident that we are now well positioned
made further good to invest in increasing the range and value of member benefits, and the changes
progress in 2005, to the membership structure implemented towards the end of the year are the
first steps towards this goal.
its 25th anniversary
year, building on the Financial Results
strengthened financial The Society delivered another year of satisfactory financial performance,
generating a profit before tax of £56,595. After two years of rebuilding our
and operating platform reserves we now have net assets of £208,794, which leaves the Society in a
put in place in 2004.” strong financial position. As outlined below, the key focus for the Board and
the Executive team in 2006 is to begin to reinvest this surplus in improved
services to members, while continuing to adopt a prudent approach towards
cash reserves.
Structure
The committee structure, reinstated in 2004, worked very effectively during
the year and the Society would like to thank all the committee members for
their hard work. The committees have powers delegated by the Board but
report to the Board regularly and are a valuable way of drawing on additional
expertise from outside the Board and the Executive team. All the committees
are chaired by a Board member.
Membership
Membership levels remained fairly constant during the year, at the end
of 2005 we had 590 members, 331 corporate and 259 service providers.
As a core element of our review of member benefits, we introduced a new
structure to our membership proposition which applied to membership renewals
from December 2005. The categories of Full and Associate membership, which
previously related to the level of subscription paid, now relate to the level of
a member’s investor relations experience. The differential in payment is now
based on participation levels ensuring that members see tangible benefit for
their membership fee.
In addition, we have restructured the subscription packages to include a wide
range of events that were previously charged for in addition to membership.
The early indications are that this has proved very popular, with attendance
at events increasing and a higher proportion of members than expected taking
the all-inclusive package. The first quarter of 2006 saw a record number of new
members, 59 compared to 29 for 2005.
www.irs.org.uk 6 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Chairman’s Statement
“The Policy Committee continued
has been significantly
enhanced, with the
appointment of a Events
number of experts The Annual Conference, the Society’s flagship event, held in April 2005 and
sponsored by Morgan Stanley, was widely regarded as the most successful
who act as a sounding
yet. Feedback from delegates was very positive and the quality of debate
board and conduit for consistently high.
regulation and policy.”
We celebrated our 25th anniversary in style, thanks to the support of Credit
Suisse, with a cocktail party at Claridge’s in September 2005. Over 250 friends
of the Society and members past and present attended.
Over 350 guests attended the IRS Annual Dinner in December 2005, sponsored
by Thomson Financial, once again set in the excellent surroundings of the Royal
Hospital Chelsea. In our anniversary year we were delighted to have with us,
as guests, past chairmen and deputy chairmen.
Policy
The burden of regulation on investor relations professionals is increasing
inexorably. The Board considers that a vital part of the Society’s remit is
to represent the views of its membership and the wider profession in the
development of regulation and policy, and to act as an authoritative and
comprehensive source of opinion and best practice.
To this end, the Policy Committee has been significantly enhanced, with the
appointment of a number of experts who act as a sounding board and conduit
for regulation and policy. The committee has responsibility for the Society’s
formal responses to regulatory bodies on key consultations.
In addition, we have put in place a series of Senior Investor Relations Officer
events that will allow leaders in the profession to share views and deliver
a consensus opinion on new or contentious areas of regulation. This is
an important additional way in which we are looking both to increase the
effectiveness of the Society while also delivering more valuable services
to members.
www.irs.org.uk 7 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Chairman’s Statement
continued
Certificate in Investor Relations
Mindful that there was no single qualification for investor relations practitioners
that pulled together knowledge of the key aspects of law, regulation and
financial acumen, in 2003 the Board developed the Certificate in Investor
Relations (“CIR“) to address this need.
As a result of the significant investment of their time by Raghnall Craighead
and Richard Davies , the CIR course materials have been brought fully up to
date and we now have over 70 people waiting to take the exam. Sixteen passed
the exam in 2005, giving them full membership status and a valuable grounding
in the essentials of Investor Relations. The CIR will be a core element of our
education programme going forward.
The Board
I took over the mantle of Chairman from Diane Faulks at the AGM in June
2005. Diane became Chairman during a difficult period for the IRS and has left
the Society in a significantly improved position from the one she inherited. She
must take significant credit for the clear direction and sound financial footing
that I have been fortunate enough to inherit. Diane retires at the AGM; I will be
sorry to see her step down but thank her for six years of commitment to the IRS.
Richard Davies has succeeded Andy Mann as Deputy Chairman and has already
demonstrated his high level of commitment to the IRS and the role from his
involvement in almost every aspect of the Society’s activities. I would like to
thank Andy, too, for his dedication as Deputy Chairman and his continued
support as a Board member.
Peregrine Riviere took over as Treasurer from me in June 2005. I would like
to thank him for his dedication and in particular his work on reviewing the
membership structure.
www.irs.org.uk 8 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Chairman’s Statement
“The overarching objective We are fortunate enough to have had three new Board members join us during
the year. Ian Arnold, Director of Corporate Finance at MFI, Rebecca Ford,
of the IRS is to build Account Director at The Group, and Mark Hynes, Investor Relations Director
and maintain the best at PR Newswire were all contributing significantly through their involvement
possible platform for in committees and professional development, and their presence at Board
level has created deeper and broader experience on which we can draw.
the ongoing dialogue
between companies and Finally, as always, I would like to acknowledge the support of the entire Board
their present and future and Hazel Jarvis, Company Secretary, who individually and collectively have
made the further good progress of the IRS possible.
investors.”
The Executive Team
The members of the Board all act in a non-executive capacity and we rely
heavily on the dedication of the executive team to make things happen on
a day-to-day basis. Tony Workman as General Manager has proved to be
an invaluable addition to the team, leading by example and working tirelessly
on both the operational details that make the IRS run smoothly, and its long
term strategic direction.
Rebecca Smith and Rachael Shaw have continued to perform very strongly
in their key roles organising our events and courses. We were also very
pleased to recruit Louise Clamp during the year, who has added significant
value in support of the Policy Committee and in the production of Informed,
the IRS’s quarterly magazine. On behalf of the Board, I extend my gratitude
to the whole team.
Looking Forward
The overarching objective of the IRS is to build and maintain the best possible
platform for the ongoing dialogue between companies and their present and
future investors. Thanks to the continued support of the membership, the hard
work of the Executive team, and on-going counsel of my fellow Board members,
I believe that the IRS is very well placed to do this.
Our goal must now be to put the operational and financial stability of the IRS
to good use, by leading the debate on regulation, providing consistent and
high quality advice to our members on policy and best practice, and delivering
good value for the membership subscription by increasing the level of
inclusive services.
Lynda Ashton, Chairman
25th April 2006
www.irs.org.uk 9 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Treasurer’s Statement
“After the strong After the strong turnaround in financial and operational performance in 2004,
2005 was a year in which the Society began to reinvest prudently in member
turnaround in financial services, and established a clear governance framework through which to meet
and operational the needs of its members in a world of increasing regulation and compliance.
performance in 2004, We recorded a net profit of £56,595 (2004: £101,765) and ended the year with
cash balances of £170,073 (2004: £180,424).
2005 was a year in which
the Society began to Turnover fell by 6.5% to £532,844 (2004: £570,106). The fall was mainly
reinvest prudently in attributable to a decline in income from publications due to the weakness
in advertising for Informed, but this was offset by a significant increase in
member services.” sponsorship revenue for the Annual Conference and Annual Dinner and other
major events and programmes.
Membership income stabilised during the year after a steep decline in 2004.
The Society’s new strategy of offering increased inclusive member benefits for
a higher annual subscription is expected to deliver good growth in membership
income in 2006. This is consistent with our aim of safeguarding the future of
the Society by making membership subscriptions the primary source of income.
Direct costs fell 10.4% year on year, reflecting the fall in turnover. As always,
we are reliant on a number of keen corporate supporters of the Society who
continue to give us access to meeting facilities and we are grateful for this
continued support.
Administrative expenses rose by 10.0%. The main drivers were employee costs,
as we built up the quality of resource within the executive team, and postage
costs, as we continued to refine our marketing efforts. Cost control is a key
financial goal for the Society in 2006.
The cash balance (net of overdraft) at the end of the year was £165,901, a fall
of 8.0% from 2004.
www.irs.org.uk 10 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Treasurer’s Statement
“The Society has entered continued
2006 in a strong
financial position and
with a clear vision of how Outlook
it will provide increasing The Society has entered 2006 in a strong financial position and with a clear
vision of how it will provide increasing benefits to members in the future.
benefits to members
The recent introduction of a new membership structure has been well received,
in the future.” with an encouraging proportion of new and renewing members signing up to
the higher “Standard Plus” tariff because of the significant additional benefits
it includes. January and February 2006 have seen the highest numbers of
new members for over four years.
The CIR has been another area of significant investment in time and resource,
and the record numbers of examinees now signed up to qualify for the
Certificate reflect the increasing value ascribed to it within the industry.
We expect this to be an area of significant growth in 2006.
There are some 21 events planned for the year and 36 professional development
courses including revision courses for the CIR. The Conference has attracted
over 200 delegates so far.
I would like to thank the members of the Finance Committee for their significant
contributions during the year.
I believe that the Society is in a strong financial position and it is now well
placed to invest more actively in member benefits while keeping a firm control
over its cost base.
This Directors’ report has been prepared in accordance with the special
provisions of Part VII of the Companies Act 1985 relating to small companies.
On behalf of the Board:
Peregrine Riviere, Director
25th April 2006
www.irs.org.uk 11 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Report of the Independent Auditors
to the members of The Investor Relations Society
We have audited the financial statements of The Investor Relations Society
for the year ended 31st December 2005 on pages fourteen to twenty one.
These financial statements have been prepared in accordance with the
accounting policies set out therein and the requirements of the Financial
Reporting Standard for Smaller Entities (effective January 2005).
This report is made solely to the company’s members, as a body, in accordance
with Section 235 of the Companies Act 1985. 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 an auditors’ 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 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 described on page four the company’s directors are responsible for the
preparation of financial statements in accordance with applicable law and
United Kingdom Accounting Standards (United Kingdom Generally Accepted
Accounting Practice).
Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and International Standards
on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true
and fair view and are properly prepared in accordance with the Companies Act
1985. We also report to you if, in our opinion, the Report of the Directors is
not consistent with the financial statements, if the company has not kept proper
accounting records, if we have not received all the information and explanations
we require for our audit, or if information specified by law regarding directors’
remuneration and other transactions is not disclosed.
We read the Report of the Directors and consider the implications for our report
if we become aware of any apparent misstatements within it.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing
(UK and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of the
significant estimates and judgements made by the directors in the preparation
of the financial statements, and of whether the accounting policies are
appropriate to the company’s circumstances, consistently applied and
adequately disclosed.
www.irs.org.uk 12 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Report of the Independent Auditors
to the members of The Investor Relations Society
continued
We planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
We have undertaken the audit in accordance with the requirements of APB
Ethical Standards including APB Ethical Standard – Provisions Available to Small
Entities, in the circumstances set out in note ten to the financial statements.
Opinion
In our opinion the financial statements:
– give a true and fair view, in accordance with United Kingdom Generally
Accepted Accounting Practice applicable to Smaller Entities, of the state
of the company’s affairs as at 31st December 2005 and of its profit for
the year then ended; and
– have been properly prepared in accordance with the Companies Act 1985.
Cook and Partners
Chartered Accountants
and Registered Auditors
108 High Street
Stevenage
Hertfordshire
SG1 3DW
April 2006
www.irs.org.uk 13 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Profit and Loss Account
for the year ended 31st December 2005
2005 2004
Notes £ £
Turnover 532,844 570,106
Cost of sales 164,621 183,798
Gross profit 368,223 386,308
Administrative expenses 315,559 286,918
Operating profit 2 52,664 99,390
Interest receivable and similar income 3,931 2,375
Profit on ordinary activities before taxation 56,595 101,765
Tax on profit on ordinary activities 3 - -
Profit for the Financial Year after taxation 56,595 101,765
Retained profit brought forward 152,199 50,434
Retained profit carried forward £208,794 £152,199
www.irs.org.uk 14 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Balance Sheet
31st December 2005
2005 2004
Notes £ £ £ £
Fixed assets:
Tangible assets 4 17,664 24,240
Current assets:
Debtors 5 179,947 163,400
Cash at bank and in hand 170,073 180,424
350,020 343,824
Creditors: Amounts falling
due within one year 6 158,890 215,865
Net current assets: 191,130 127,959
Total assets less current liabilities: £208,794 £152,199
Reserves:
Profit and loss account 208,794 152,199
£208,794 £152,199
These financial statements have been prepared in accordance with the
special provisions of Part VII of the Companies Act 1985 relating to small
companies and with the Financial Reporting Standard for Smaller Entities
(effective January 2005).
On behalf of the Board:
Lynda Ashton, Director
Peregrine Riviere, Director
Approved by the Board – 25th April 2006
www.irs.org.uk 15 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Cash Flow Statement
for the year ended 31st December 2005
2005 2004
£ £ £ £
Cash generated from operations
Operating profit 52,664 99,390
Reconciliation to cash
generated from operations:
Depreciation 10,389 4,459
Loss on sale of fixed assets - 591
Increase in debtors (16,547) (49,851)
(Decrease)/Increase in creditors (61,147) 32,982
(14,641) 87,571
Cash from other sources
Interest received 3,931 2,375
3,931 2,375
Application of cash
Purchase of tangible fixed assets (3,813) (10,170)
(3,813) (10,170)
Net (decrease)/increase in cash (14,523) 79,776
Cash at bank and in hand
at beginning of year 180,424 100,648
Cash at bank and in hand
less overdraft at end of year £165,901 £180,424
Consisting of:
Cash at bank and in hand 170,073 180,424
Overdraft included in “bank
loans and overdrafts
falling due within one year” (4,172) -
£165,901 £180,424
www.irs.org.uk 16 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Notes to the Financial Statements
for the year ended 31st December 2005
1. Accounting Policies
Accounting convention
The financial statements have been prepared under the historical cost convention and in accordance with the Financial
Reporting Standard for Smaller Entities (effective January 2005).
Turnover
Turnover represents net invoiced sales of goods, excluding value added tax.
Turnover represents net invoiced sales of memberships and services, excluding value added tax.
Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Leasehold improvements – 10% on cost
Office equipment – 33% on cost
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance
sheet date.
Hire purchase and leasing commitments
Rentals paid under operating leases are charged to the profit and loss account as incurred.
Pensions
The company operates a defined contribution pension scheme. Contributions payable for the year are charged in the
profit and loss account.
Liability of members
The Society is limited by guarantee without a share capital and has obtained special dispensation not to use the word
‘Limited’ in its title. In the event of the Society being wound-up, each member is liable to contribute for payment of the
debts and liabilities of the Society such amounts as may be required, but not exceeding £1.
www.irs.org.uk 17 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Notes to the Financial Statements
for the year ended 31st December 2005
continued
2. Operating Profit
2005 2004
The operating profit is stated after charging: £ £
Depreciation – owned assets 10,389 4,459
Loss on disposal of fixed assets - 591
Auditors’ remuneration 4,970 4,850
Pension costs 3,886 3,074
Directors’ emoluments and other benefits etc - -
3. Taxation
Analysis of the tax charge
No liability to UK corporation tax arose on ordinary activities for the year ended 31st December 2005 nor for the year
ended 31st December 2004.
www.irs.org.uk 18 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Notes to the Financial Statements
for the year ended 31st December 2005
continued
4. Tangible Fixed Assets
Leasehold Office
improvements equipment Total
£ £ £
Cost:
At 1st January 2005 18,213 46,758 64,971
Additions - 3,813 3,813
At 31st December 2004 18,213 50,571 68,784
Depreciation:
At 1st January 2005 10,478 30,253 40,731
Charge for year 1,816 8,573 10,389
At 31st December 2004 12,294 38,826 51,120
Net book value:
At 31st December 2004 5,919 11,745 17,664
At 31st December 2003 7,735 16,505 24,240
www.irs.org.uk 19 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Notes to the Financial Statements
for the year ended 31st December 2005
continued
5. Debtors: Amounts falling due within one year
2005 2004
£ £
Trade debtors 144,292 149,354
Prepayments and other debtors 35,655 13,768
VAT - 278
179,947 163,400
6. Creditors: Amounts falling due within one year
2005 2004
£ £
Bank loans and overdrafts 4,172 -
Trade creditors 27,480 35,422
Subscriptions and other income in advance 95,263 142,429
Social security & other taxes 12,850 11,767
Accruals and other creditors 19,125 26,247
158,890 215,865
www.irs.org.uk 20 Annual Report for the year ended 31st December 2005
Annual Report of the Directors
and Financial Statements
The Investor Relations Society
2005
Notes to the Financial Statements
for the year ended 31st December 2005
continued
7. Operating lease commitments
The following payments are committed to be paid within one year:
2005 2004
£ £
Expiring:
In more than five years 37,500 37,500
8. Pension Commitments
During the year, the Society operated a defined contribution pension scheme for three of its employees. The assets
of the scheme are held separately from those of the Society in an independently administered fund.
The aggregate pension charge for the year was £3,886 (2004: £3,074), which represents contributions paid during
the year. The ongoing annual commitment payable under these schemes is now £3,612.
9. Related Party Disclosures
The Directors of the Society are subscriber members of the Society. The only transactions involving the Directors
are those in connection with their membership subscriptions or attendance at Society activities.
During the year £4,800 of teaching services were provided by Transparency Matters Limited. Mark Hynes is the
Managing Director of Transparency Matters Limited and on commercial terms a member of the Board of The Investor
Relations Society.
Ultimate control of the Society is considered to be in the hands of the subscriber members.
10. APB Ethical Standard – Provisions Available for Small Entities
In common with many other businesses of our size and nature we use our auditors to prepare and submit returns
to the tax authorities and assist with the preparation of the financial statements.
www.irs.org.uk 21 Annual Report for the year ended 31st December 2005
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