Cipd Management Report on Apprenticeships by ejs17172

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									   Chartered Institute of
Personnel and Development




    Report and financial statements

       Year ended 30 June 2007




   Charity registration number 1079797
                           Chartered Institute of
                        Personnel and Development
                  Directors’ report for the year ended 30 June 2007
Objects, mission and aims
The objects for which the Institute is established are the promotion of the art and science of the
management and development of people for the public benefit.
The mission of the Institute is:
     • to lead in the development and promotion of good practice in the field of the management and
         development of people, for application both by professional members and their organisational
         colleagues
     • to serve the professional interests of members
     • to uphold the highest ideals in the management and development of people
The Institute aims in all that it does to demonstrate that:
     • good people management and development leads to higher organisational performance and
         better engagement of people at work
     • how to achieve that is defined by a continually updated body of knowledge, understanding and
         practice which is of benefit to all managers and which is defined by the Institute’s professional
         standards and support systems
     • CIPD chartered members add distinctive value to the people and organisations they work with
         by their professionalism in applying that body of knowledge appropriately
To achieve those goals the Institute pursues a wide range of activities, funded by member subscriptions
and income from its commercial subsidiary. These include research, surveys, publications, information
and advisory services, training courses, conferences, contributions to public policy and extensive media
coverage.
The Institute provides public benefit through: the difference that competent people management and
development professionals make in adding value to organisations and to individuals at work; its
professional standards/qualifications and accreditation of chartered professionals; its influence on the
people management and development practice of line managers; its public policy work and activity to
promote good people management and development practice; its freely available information (largely
web based); and its various face to face and online networks. As well as the members of the Institute,
others who benefit from the Institute’s work include governments and public policy makers, employers,
managers and people who work at all levels in organisations.
Activity summary and future plans
Membership continued to grow and by June 2007 stood at over 130,000. Of these 48,000 had met the
rigorous standards of chartered membership. We have set ourselves a stretching target of reaching
150,000 members by 2010, with a substantial increase in chartered members.
Our other current strategic priorities include managing more effectively our relationships with our
approved learning centres and our studying members, getting closer to large employers, and exploring
international opportunities.
Our qualifications are widely accepted as being essential for people management and development
professionals. Over the last year over 12,000 people signed up to study for them, either directly with us
or through one of nearly 300 approved providers of learning. Our qualifications are not only offered in
the United Kingdom and Ireland, but through our providers are offered in 15 other countries and we plan
selectively to extend our range of internationally available learning and routes to qualification.
CIPD received a positive assessment from the UK’s Qualifications and Curriculum Authority (QCA)
following their recent post-accreditation monitoring of our certificate qualifications portfolio. QCA
commended the robust and effective quality assurance systems implemented by the CIPD.
During the year we became one of five awarding bodies piloting the new qualifications for those teaching
in further education or who are responsible for delivering Learning and Skills Council funded work-based
learning programmes such as Modern Apprenticeships.



                                                                                                     Page 1
                           Chartered Institute of
                        Personnel and Development
                  Directors’ report for the year ended 30 June 2007
Our relationships with employers are an increasingly important part of what we do. Our primary focus is
on providing superior services and support to our individual members, but their employers are important
to us too. We are working hard to embed our professional standards within employers’ own HR learning
and development programmes. By doing this, we can make sure that when people meet internal
learning and development targets, they are also demonstrating how they meet CIPD’s professional
standards. During the last year we met over 80 large private and public sector employers, between them
employing over 20,000 people management and development professionals.
Our commercial activities continued to contribute to the advancement of the profession and the
dissemination our research and policy work. We ran a full programme of public courses and courses
tailored for individual organisations as well as a portfolio of major conferences. In the last year over
14,000 people attended our conferences and events – including our established annual conferences, our
conferences in Ireland and Scotland and the new series of spotlight conferences we launched on topical
issues. The CIPD will host the World Congress of the World Federation of People Management
Associations (WFPMA) in April 2008. This will provide an opportunity for our members to engage with
colleagues from around the world to discuss the global profession and for us to promote the enormous
contribution people management and development makes to the global economy. Our magazine,
People Management, remains the clear leader in its field.
We have produced research that is relevant to today’s and tomorrow’s workplaces. We ensure that our
research is based on evidence, not speculative opinion, and that it is translated into practical advice and
guidance for our members and the wider management community.
In the last year we produced 47 research and survey reports. We produce four major annual
benchmarking surveys covering reward; learning and development; recruitment, retention and labour
turnover; and absence management. Our quarterly Labour Market Outlook provides the most
authoritative set of tracking data for the UK labour market, accurately reporting current trends and
predicting future ones. We also have an up to date library of 135 factsheets, which help translate our
research into practical advice and support. These survey reports and factsheets are available free of
charge through our website and provide members, policy makers and the wider business community
with authoritative information on which to build actions and future plans.
In recent years we have invested heavily in improving the quality, depth and relevance of the information
we provide online as it is the most frequent means by which people engage with us today. We receive
over 300,000 visits to our web site every month. Nearly 90% of CIPD members and over 150,000 non-
members have registered on the website, and over 110,000 people receive our free weekly CIPD update
email which contains a round-up of the latest people management news and information resources
available to help with their work.
Through the newspaper and broadcast media we work to promote a better understanding of people
management and development issues amongst the wider business community and general public. Each
month we receive on average 300 mentions in the media, including 20 or more appearances in the
national press. We increased television and radio coverage by 20% over the year, appearing 155 times.
By running a well managed, financially robust Institute, we are able to keep our membership subscription
low while still making investments in the future. It is a strategic objective of ours to deliver high value to
our members for a relatively modest subscription. We do this by investing carefully in the right projects,
in our research and expertise, and in the delivery of a consistently high level of customer focus.
More information about the Institute’s goals and the year’s activities and achievements are in the annual
review, which together with the summary financial statements and annual report have been published on
our website www.cipd.co.uk/annualreport.




                                                                                                       Page 2
                           Chartered Institute of
                        Personnel and Development
                  Directors’ report for the year ended 30 June 2007
Financial review
Overview
The financial statements consolidate the accounts of the Institute and its branches, including the
Republic of Ireland, and the accounts of the Institute’s trading subsidiary CIPD Enterprises Limited.
The accounts are presented in accordance with the Statement of Recommended Practice ‘Accounting
and Reporting by Charities’.
During the year members’ subscriptions made up over one third of the total income of £35.2m with most
of the balance coming from the Institute’s commercial activities - training courses, conferences and
publishing activities which are operated through the wholly owned subsidiary CIPD Enterprises Limited.
We changed our fee structure this year by reducing the joining fee for new studying members while
eliminating the related discount on the annual subscription rates. This has resulted in most new student
members paying less when they join us at the start of their careers in the profession.
Our expenditure is targeted towards providing high quality services to members and to the wider public.
This is done through our website, more traditional media such as our journal People Management, and
through research and guidance on the management and development of people.
The accounts include a FRS 17 valuation of the pension scheme deficit of £2.1m as determined by the
actuary at 30 June – a reduction of £3.7m from last year. This includes the impact of the higher discount
factors used for valuing the defined benefit liability, investment returns on the scheme assets and the
Institute’s lump sum payment of £1.5m made in September 2006 which was the first under the funding
plan agreed with the scheme trustees to address the scheme deficit following the last full actuarial
valuation as at 1 October 2005. The Institute has agreed to pay additional contributions of £60,000 in
September 2007 and in each September until 2024 plus a final payment of £600,000 in September 2025.
It has also granted the scheme a charge over £2m of investment assets to act as contingent assets for
the scheme.
Scheme benefits accrued since 1 October 2006 have been on a career average revalued earnings basis
and will have limited price indexation of pensions in payment restricted to 2.5%. The Institute has
implemented a salary sacrifice scheme for contributions into the scheme.
Investments
The Institute aims to improve the real buying power of its investments and has adopted a target return
relative to RPI. The Institute seeks to maximise the investment return on assets while not investing in
any assets that could put CIPD at significant risk.
During the year the Institute amended its investment strategy to exercise more control over asset
allocation following advice from its investment advisor. It has now adopted a strategy of using specialist
fund managers for each class of asset. This was effected towards the end of the year and by
30 June 2007 substantially all of the funds were invested with nine new specialist managers. The asset
allocation is tracked by the Institute’s investment advisor with quarterly rebalancing decisions.
As a result of the change in fund managers the majority of the net gains on investment in the statement
of financial activities were realised.
The market value of all investments held at the end of the year was £18.4m
Reserves and funds
The Institute has continued to follow a policy of keeping sufficient reserves in the general fund to meet at
least one year’s operating costs, being the total costs of the Institute and the staff and related costs of its
commercial subsidiary. The general fund as at 30 June 2007 was £29.3m after deducting the pension
liability. The Institute also keeps reserves as designated funds which are set aside for specific purposes
in the near future. The designated funds are explained in more detail in note 1(l) to the financial
statements on page 15 and totalled £4.5m at the end of the year.
We also have a policy of keeping £1m in cash and readily available funds at any given time.




                                                                                                        Page 3
                                 Chartered Institute of
                              Personnel and Development
                       Directors’ report for the year ended 30 June 2007
Organisation of the Institute
The Executive Board is responsible for the management of the Institute’s activities. The members
of the Executive Board are the directors of the Institute and the trustees of the charity. With the
exception of the Director General all directors are elected. All hold office as provided for by the
Charter and Bye-laws.
Council is a supervisory and advisory body of the Institute. It comprises a representative of each
of the 48 branches, the honorary officers who are elected by the members in general meeting, and
the members of the Executive Board. A list of the members of Council, including their office, is set
out in the annual report.
Directors
The directors, who served throughout the year except where stated, are as follows:

•   Sue Adams a                     •   Geoff Hirst a                           •      Dean Royles a
•   Geoff Armstrong                                                                                      a
    Director General                •   Frank Hogan                             •      David Slingo
•   Ken Boyle                       •   Robin Jordan r                          •      Lord Wilson
    also served as Vice President       Chair, Executive Board                         of Dinton r (to 24 October 2006)
    Membership & Education
    to 24 October 2006              •   Mike Kelly                                     President to 24 October 2006
                                        Vice President Membership & Education          Immediate Past President thereafter
                                        from 24 October 2006
•   Paul Brennan                                                                •      Vicky Wright r (from 24 October 2006)
    to 2 May 2007                   •   Mike Kinski                                    President Elect to 24 October 2006
                                        Immediate Past President                       President thereafter
•   Chris Garcia a r                    to 24 October 2006
    Honorary Treasurer                                                          Key:
                                    •   Brid O’Brien a                          a
                                                                                    member of the audit committee
•   Susan Gordon                                                                r
                                    •   Jo Reynolds                                 member of the remuneration committee
    resigned 8 June 2007
                                        from 2 May 2007                         Details of these committees’ work
                                                                                are on page 8.

Mike Kinski served as Immediate Past President to the AGM in October 2006. Lord Wilson served
as President until the AGM and then as Immediate Past President. Vicky Wright served as
President Elect until the AGM and then as President. These directors, together with the Honorary
Treasurer, the Chair, Executive Board and the Vice President Membership and Education serve on
the Board by virtue of their office. All the ex-officio members are elected by the AGM except the
Chair, Executive Board who is elected by Council. The remaining nine elected Board members are
elected by Council. The Director General is also a member of the Board.
Ken Boyle, an elected director, also served as Vice President, Membership and Education until the
AGM in October 2006 when Mike Kelly was appointed. Jo Reynolds was elected and Sue Adams
and Frank Hogan were re-elected to the Board by Council on 2 May 2007. Susan Gordon
resigned during the year.
Geoff Armstrong, the Director General, has announced his retirement from 30 June 2008. The
Board have started the process to appoint a successor.
All directors with the exception of the Director General, serve in a non-executive capacity. Clause
5 of the Charter and Bye-law 34 give the Executive Board the power to appoint the Director
General as a paid executive member of the Board, and therefore a charity trustee if they consider
this to be in the best interests of the charity.




                                                                                                                     Page 4
                          Chartered Institute of
                       Personnel and Development
                 Directors’ report for the year ended 30 June 2007
Employees
We exist to promote good practice in the management and development of people to others, and
as an employer we strive to be an exemplar ourselves and are proud of the contribution our people
- be they staff or volunteers - make to the success of the CIPD.
Our culture plays an important role in eliciting the full potential contribution of people at all levels.
We aim to anticipate and meet the changing needs of our members and other customers, and so
we need people who focus on the right things - people who take responsibility and use initiative in
managing the customer relationship. It requires a positive approach to innovation, adaptability and
learning across functional boundaries. We foster a culture of customer focus, openness,
communication, engagement and empowerment as core to the ways we behave.
At the end of the year we employed 311 staff (2006: 297 staff), or 293 full time equivalents
(2006: 270). Twenty percent of our staff work on a part-time basis, including some job shares.
During the year 109 people started new jobs, of whom 29 were internal appointments. Staff
turnover was 20.3% compared to 18.4% in 2005/06. The average length of service is 5.2 years.
Learning and development
It is crucial to our ability to deliver our objectives for us to invest in our people.
     • 4.1% of staff payroll was spent on training compared to 3.3% last year
     • staff spent 1,151 days on formal off-the-job training, compared to 1,094 days last year.
         This is an average of 4 days per full time equivalent member of staff and is in addition to
         the extensive on-the-job training that is provided in the normal course of work
     • almost 25% of our staff participate in our leadership development programme
     • we were one of the first employers to sign the government’s skills pledge
Performance
Individual objectives for our people are set to help meet departmental plans and objectives, which
in turn contribute to the delivery of the CIPD’s strategic plans. Performance against these
individual objectives is reviewed annually. Annual reviews are supplemented by more regular
interim reviews.
Alongside the process of performance review, there is a parallel process of development reviews,
designed to ensure that individual development needs are aligned with business objectives.
This year we developed a set of core competences for assessing the performance and
development needs of all CIPD staff. These competences cover business awareness, building
relationships, continuous improvement and innovation, customer focus, problem solving and
decision taking and results-oriented behaviour.
Volunteers
The CIPD also benefits from many people who give their time on a voluntary basis. This includes
15 members of the Board who are the CIPD’s directors and trustees and 7 vice-presidents and 48
branch council representatives, who, with the Executive Board, form the CIPD’s Council. A further
30 people are involved in the Membership and Education Committee and its subcommittees. Over
100 people are members of upgrading panels and many more work at branch or national level to
advance our Professional Standards. Members of the CIPD’s Nominations and Professional
Conduct Committee and the Professional Policy Committee also serve in a voluntary capacity.
In addition, there are over 800 people who serve on local branch committees. Branches provide a
local professional network and are organised on a volunteer basis. They run events to support
members in their professional development and upgrading, make links with centres offering CIPD
courses, and enable member networking.


                                                                                                  Page 5
                          Chartered Institute of
                       Personnel and Development
                 Directors’ report for the year ended 30 June 2007
We run formal induction events for all these people, and also provide ongoing training and
development. On average our volunteers spend 10 days a year on their various voluntary CIPD
activities, though many give much more than this.
Directors’ recruitment and training
Vacancies on the Board are publicised through the Institute’s People Management magazine, our
website, our regular email update, and through the branch structure. Directors are elected by
Council, or if Honorary Officers at the AGM. The Director General also serves on the Board.
There are role profiles and competency requirements for Board and Committee appointments and
processes for reviewing prospective appointments. There is a formal process of induction for new
directors and committee members. There is also an annual development day at which the
Executive Board reviews its effectiveness and seeks ways to raise its performance.
Statement of directors’ responsibilities for the financial statements
The directors (who also acted as trustees for the charitable activities) are responsible for preparing
the Directors' report and the financial statements in accordance with applicable law and United
Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
The law applicable to charities in England & Wales 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
Institute and the group and of the incoming resources and application of resources of the group for
that period. In preparing these financial statements the directors are required to:
    • select suitable accounting policies and apply them consistently,
    • make judgements and estimates that are reasonable and prudent,
    • state whether applicable accounting standards have been followed, subject to any material
        departures disclosed and explained in the financial statements, and
    • prepare the financial statements on the going concern basis unless it is inappropriate to
        assume that the entity will continue in business.
The directors are responsible for keeping proper accounting records that disclose with reasonable
accuracy at any time the financial position of the Institute and the group and enable them to
ensure that the financial statements comply with the Charities Act 1993, the Charity (Accounts and
Reports) Regulations, the Statement of Recommended Practice “Accounting and Reporting by
Charities” (SORP 2005) and the provisions of the Institute's Charter. They are also responsible for
safeguarding the assets of the Institute and the group and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
In so far as each director is aware:
    • there is no relevant information of which the Institute’s auditors are unaware; and
    • the directors have taken all steps that they ought to have taken to make themselves aware
         of the relevant audit information and to establish that the auditors are aware of that
         information.
A review of the year together with the Report and financial statements are available on the
Institute's web site (www.cipd.co.uk). The directors are responsible for the maintenance and
integrity of the website and accordingly the auditors accept no responsibility for the information
published.
Information published on the website is accessible in many countries and legislation in the UK
concerning the preparation and dissemination of Financial Statements may differ from legislation in
other jurisdictions. The Institute meets the relevant company legislative requirements in the
Republic of Ireland.


                                                                                               Page 6
                           Chartered Institute of
                        Personnel and Development
                  Directors’ report for the year ended 30 June 2007
Going concern
The financial statements have been prepared on a going concern basis since, having made
relevant enquiries, the Executive Board has a reasonable expectation that the Institute has
adequate resources to continue in operational existence for the foreseeable future.
Related party transactions
Financial Reporting Standard 8 requires disclosure of transactions between related parties. The
Institute is not aware of any material transactions of the nature envisaged in the Standard.
Charitable status
The Institute is a registered charity under the Charities Act 1993 and its expenditure is directed in
furtherance of its charitable objects.
Corporate governance, internal control and risk management
The Directors’ statement on corporate governance, internal control and risk management is given
on pages 8 to 9.
Auditors
Our auditors RSM Robson Rhodes LLP merged their audit practice with those of Grant Thornton
UK LLP with effect from 2 July 2007 with the successor firm being Grant Thornton UK LLP.
As a result RSM Robson Rhodes LLP formally resigned as auditors on 20 July 2007. The
directors appointed Grant Thornton UK LLP to fill the casual vacancy and a resolution for their
reappointment as auditors will be proposed at the annual general meeting.

By order of the Board




Kristina Ingate
Secretary
5 September 2007




   The Chartered Institute of Personnel and Development is incorporated by Royal Charter
   and therefore has no company registration number.

   Its charity registration number is 1079797.

   Principal office:       151 The Broadway, London SW19 1JQ

   Bankers:                Lloyds TSB Bank plc, 3 St George’s Road, London SW19 4DR
   Solicitors:             Lovells, 65 Holborn Viaduct, London EC1A 2DY
   Auditors:               Grant Thornton UK LLP, 30 Finsbury Square, London EC2P 2YU



                                                                                                Page 7
                         Chartered Institute of
                      Personnel and Development
        Corporate governance, internal control and risk management

The Institute’s corporate governance, internal control and risk management arrangements are
described below. The requirements of the Statement of Recommended Practice “Accounting and
Reporting by Charities” (SORP 2005) to report on risk management are covered by this report.
The Institute’s reporting arrangements are also informed by the spirit of the Combined Code on
Corporate Governance and the Companies Acts in so far as these are consistent with the
Institute’s status as a professional body incorporated by Royal Charter and a registered charity.
Executive Board
The Executive Board meets regularly throughout the year and is responsible for overall group
strategy, major capital projects, budgets, financial performance and financial control and risk
management. It reviews operational performance regularly to satisfy itself that the activities of the
Institute are in accordance with the agreed strategic direction and ensures that the executive
management has the capacity and resources to meet CIPD’s objectives.
The members of the Executive Board are the directors of the Institute and charity trustees. They
are elected as set down in the Charter and Bye-laws. The composition of the Executive Board is
set out in the directors’ report.
The Professional Policy Committee oversees the development and promulgation of CIPD’s
research and professional knowledge activity ensuring that it is at the leading edge of good
practice. The Membership and Education Committee has responsibility for defining and developing
the Institute’s professional standards for membership, for setting the regulations for membership
entry and upgrading and for establishing the policy regarding continuing professional development.
Audit Committee
The committee has up to six members, including the Honorary Treasurer who chairs the
committee. They are appointed by, and must be, non-executive members of the Executive Board
with recent and relevant experience. The Committee meets at least twice a year, reviews the
financial statements, oversees risk management and internal control, oversees the relationship
with and considers reports from the external auditors, receives a report on the work of the internal
auditors, and reviews the Institute’s pension fund liabilities.
Remuneration Committee
This committee determines the remuneration of the Director General, sets his objectives and
reviews his performance. The committee also keeps succession planning for senior management
under review. Its members are the President, the Chair of the Executive Board and the Honorary
Treasurer. It takes professional advice where necessary to assist it in its work, taking into account
the technical expertise of the committee members.
The remuneration of the Director General is set out in note 4 to the financial statements.
Nominations and Professional Conduct Committee
This is chaired by the Immediate Past President. The other members are the immediate past
Honorary Officers, the Director General and two members elected by council. It is responsible for
ensuring a good supply of, and the vetting of, nominations to hold office and to serve on the Board
and committees. It also considers nominations for awards. It oversees the code of professional
conduct on behalf of the Board and Council.
Internal controls and risk management
The directors acknowledge their responsibility for the Institute’s system of internal control and
those arrangements required on an on-going basis. No system of internal control can provide
absolute assurance against material mis-statement or loss. The Institute’s systems are designed
to provide the directors with reasonable assurance that any problems are identified on a timely
basis and are dealt with appropriately. They are also designed to support business improvement.

                                                                                              Page 8
                          Chartered Institute of
                       Personnel and Development
          Corporate governance, internal control and risk management

The transparent organisational culture adopted by the Institute is an important element of ensuring
effective risk management and internal control.
The Executive Board, through the Audit Committee, holds a six-monthly review of the Institute’s
risk identification and risk management arrangements. Risks are analysed under five broad
headings: reputation; commercial; financial/information technology; people; and
contract/compliance/business continuity. An overview of the key risk areas and the arrangements
established to manage and control these risks is given below. Risk management is supported by
comprehensive operations reports to the Board.
 Risk           Management Control
Reputation      • ongoing review of strategic issues by the Management Team and Executive Board on a
and medium        regular planned basis and in response to events
to long-term    • ongoing development of CIPD’s research and public profile activity to maintain its
strategy          high reputation
                • rigorous professional standards and a code of professional conduct
                • quality management systems for centres accredited to run CIPD programmes
                • ongoing development of products and services to meet changing members and
                  customer demand
                • arrangements designed to promote and protect the CIPD brand
Commercial      • regular planned reviews of ongoing and prospective business activities and
                  developments
                • all commercial activities undertaken by CIPD Enterprises Limited, a wholly owned
                  subsidiary company
Finance         • comprehensive management reporting against budgets approved by the Board, which
and IT            are prepared annually, together with a forecasting process which is updated bi-monthly
                • regular in-depth financial review meetings held by the Honorary Treasurer at
                  Wimbledon
                • external financial control reviews of key suppliers
                • an internal audit function to assist management control and risk assessment
                • ongoing review of CIPD’s investment strategy supported by external advice
                • a capital investment appraisal system with authorisation levels approved by the Board
                • comprehensive information technology project planning and associated business
                  continuity planning arrangements
People          • a management structure which has clear lines of accountability to the Board, frequent
                  discussions on numerous issues between the President, Chair of Executive Board,
                  Honorary Treasurer and Director General
                • a comprehensive people strategy designed to: develop leadership capability; enable
                  staff to learn and develop; link individual objectives to business goals; and create a
                  culture which is inclusive and coaching in style with a commitment to excellent
                  customer service
                • arrangements to identify suitable people to serve in voluntary positions of responsibility
                  and to train all those in volunteer roles
Compliance,     •   ongoing review of key legislation and compliance requirements as it impacts on CIPD
corporate       •   disaster recovery and business continuity planning
governance,     •   ongoing review of key supplier relationships and internal review and control
contracts and       arrangements for supplier and customer contracts
business
continuity
The Executive Board, through the Audit Committee, has reviewed the effectiveness of the system
of internal controls for the accounting period and the period to the date of the approval of the
financial statements. They have done this in the light of the requirements of the Charity SORP
and as informed by the Turnbull Guidance which forms part of the Combined Code.

                                                                                                      Page 9
                            Chartered Institute of
                         Personnel and Development
                 Independent Auditors’ report to the members of the
                  Chartered Institute of Personnel and Development

We have audited the financial statements of the Chartered Institute of Personnel and Development for the
year ended 30 June 2007, which comprises the consolidated statement of financial activities, the balance
sheets, the consolidated cash flow statement and notes 1 to 14. These financial statements have been
prepared under the accounting policies set out therein.
This report is made solely to the Institute’s members, as a body, in accordance with Section 43 of the
Charities Act 1993 and regulations made under Section 44 of that Act 1993. Our audit work has been
undertaken so that we might state to the Institute’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 Institute and the Institute’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
The Institute’s directors, who also acted as trustees for the charitable activities, responsibilities for the
preparation of financial statements in accordance with applicable law and United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of
Directors’ Responsibilities.
We have been appointed as auditors under section 43 of the Charities Act 1993 and report in accordance
with regulations made under section 44 of that Act. 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 Charities Act 1993. We also report to you if, in our opinion, the directors’
report is not consistent with the financial statements, if the Institute has not kept proper accounting records,
or if we have not received all the information and explanations we require for our audit.
We read the other information contained in the Report and Financial Statements and consider whether it is
consistent with the audited financial statements. This other information comprises only the Corporate
Governance, Internal Control and Risk Management report. We consider the implications for our report if we
become aware of any apparent misstatements or material inconsistencies with the financial statements. Our
responsibilities do not extend to any other information.
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 judgments made by the directors in the preparation of the financial statements, and of whether
the accounting policies are appropriate to the charity's circumstances, consistently applied and adequately
disclosed.
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.
Opinion
In our opinion the financial statements:
    §    give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting
         Practice, of the state of affairs of the group and parent charity's affairs as at 30 June 2007 and of the
         group's incoming resources and application of resources for the year then ended; and
    §    have been properly prepared in accordance with the Charities Act 1993.

Grant Thornton UK LLP
Chartered Accountants and Registered Auditors
London
5 September 2007
                                                                                                          Page 10
                                    Chartered Institute of
                                 Personnel and Development
                             Consolidated statement of financial activities
                                  for the year ended 30 June 2007

                                                                                   General       Designated           Total            Total
                                                                        Note        fund           funds              2007             2006
                                                                                    £'000          £'000              £'000            £'000

Incoming resources
Incoming resources from charitable activities
To advance the management and
development of people through:
  Education and membership services                                                15,332                  -        15,332           14,716
  Research, innovation and
    dissemination of expertise                                                          57                 -             57              93
  Branches                                                                           1,320                 -          1,320           1,467
Incoming resources from generated funds
  Commercial income                                                      2(b)      17,464                  -        17,464           17,210
  Investment income                                                      2(c)       1,072                  -         1,072              848
Total incoming resources                                                           35,245                  -        35,245           34,334

Resources expended
Charitable activities
 Education and membership services                                       2(a)       (7,960)            (774)         (8,734)         (8,809)
 Research, innovation and
   dissemination of expertise                                            2(a)       (4,995)            (777)         (5,772)         (5,414)
 Branches                                                                2(a)       (3,094)            (299)         (3,393)         (3,573)
Costs of generating funds
 Commercial expenditure                                                 2(a,b)    (15,000)             (227)       (15,227)         (14,995)
 Investment management costs                                             2(a)         (73)               (2)           (75)            (108)
Governance costs                                                         2(a)        (149)              (15)          (164)            (187)
Total resources expended                                                          (31,271)           (2,094)       (33,365)         (33,086)


Net incoming/(outgoing) resources
                                                                                     3,974           (2,094)          1,880           1,248
 before transfers
Transfers between funds                                                   10        (2,692)           2,692                 -                 -
Net incoming resources before
 other recognised gains and losses                                                   1,282              598           1,880           1,248


Other recognised gains and losses
Net incoming resources above                                                         1,282              598           1,880           1,248
Net gains on investment assets                                            6          1,782                -           1,782           1,544
Actuarial gains on pension scheme                                         11         2,591                -           2,591           1,800
Net movement in funds                                                                5,655              598           6,253           4,592
Net fund balances brought forward                                         10       23,690             3,951         27,641           23,049
Net fund balances carried forward                                         10       29,345             4,549         33,894           27,641



The statement of financial activities includes all recognised gains and losses for the year, all of which were from continuing activities.




                                                                                                                                             Page 11
                              Chartered Institute of
                           Personnel and Development
                                Balance sheets at 30 June 2007


                                           Note         Group                   Institute
                                                   2007       2006         2007           2006
                                                   £'000      £'000        £'000         £'000

Fixed assets
Tangible assets                             5     12,262     12,783        12,262       12,783
Investments                                 6     18,403     15,696        18,403       15,696
                                                  30,665     28,479        30,665       28,479

Current assets
Stocks                                               652        418            23           16
Debtors                                     7      4,840      4,964         2,967        2,426
Cash at bank and in hand                    8     12,730     12,348         9,704        9,989
                                                  18,222     17,730        12,694       12,431

Creditors
Amounts falling due within one year         9     (12,930)   (12,784)      (7,402)      (7,485)

Net current assets                                 5,292      4,946         5,292        4,946

Net assets excluding pension liability            35,957     33,425        35,957       33,425

Defined benefit pension scheme liability   11     (2,063)    (5,784)       (2,063)      (5,784)
Net assets including pension liability            33,894     27,641        33,894       27,641

Funds
General fund                               10     31,408     29,474        31,408       29,474
Pension liability                          10     (2,063)    (5,784)       (2,063)      (5,784)
Net general funds                                 29,345     23,690        29,345       23,690

Designated funds                           10      4,549      3,951         4,549        3,951
Total unrestricted funds                          33,894     27,641        33,894       27,641




The Financial Statements were approved by the directors on 5 September 2007 and were signed
on their behalf by:


Vicky Wright
President

Chris Garcia
Honorary Treasurer




                                                                                                  Page 12
                            Chartered Institute of
                         Personnel and Development
                               Consolidated cash flow statement
                                for the year ended 30 June 2007

                                                     Note        2007                2006
                                                            £'000    £'000       £'000    £'000
Reconciliation of net incoming resources
to net cash flow from operating activities

Net incoming resources                                                  1,880                1,248
Investment income                                                      (1,072)                (848)
Depreciation                                                              676                  724
Loss/(profit) on disposal of tangible fixed assets                         11                  (11)
Payment to pension scheme per funding plan                             (1,500)                   -
Non-actuarial increase in pension liability                               370                  302
Increase in stock                                                        (234)                (155)
Decrease/(increase) in debtors                                            139                  (24)
Increase in creditors                                                     146                  444
Net cash inflow from operating activities                                 416                1,680

Cashflow statement

Net cash inflow from operating activities                                416                 1,680

Returns on investments
Income from investments                                        449                  348
Interest received                                              608                  498
                                                                        1,057                 846
Capital expenditure and financial investment
Purchases of tangible fixed assets                             (166)                (428)
Purchases of investment securities                          (17,372)             (11,025)
Purchase of investment property                                   -                 (220)
Sales of tangible fixed assets                                    -                   24
Sales of investment securities                               16,447               12,997
Net cash (outflow)/inflow for capital items
                                                                       (1,091)               1,348
 and financial investment

Management of liquid resources
Cash placed in bank deposits
 with more than 24 hours notice                               (670)               (9,800)
Net cash flows for management of liquid resources                        (670)              (9,800)
Decrease in cash                                                         (288)              (5,926)

Reconciliation of movement in cash to net funds
Decrease in cash and bank deposits
  with less than 24 hours notice                                         (288)              (5,926)
Increase in liquid resources                                              670                9,800
Increase in net funds arising from cash flows                             382                3,874
Opening net funds                                                      12,348                8,474
Closing net funds                                     8                12,730               12,348




                                                                                                Page 13
                          Chartered Institute of
                       Personnel and Development
                             Notes to the financial statements
                             for the year ended 30 June 2007
1   Principal accounting policies

    (a)   Basis of accounting
          The financial statements are prepared in accordance with applicable accounting standards
          under the historical cost convention as modified by the revaluation of investments and in
          accordance with the Statement of Recommended Practice (SORP 2005) “Accounting and
          Reporting by Charities” and the Charities Act 1993.

    (b)   Consolidation
          The group financial statements include the results of the Institute and its trading subsidiary
          which are consolidated in accordance with Financial Reporting Standard 2 “Accounting for
          subsidiary undertakings”.

    (c)   Tangible fixed assets and depreciation
          Depreciation is provided on a straight line basis on the cost of tangible fixed assets to write
          them down to their estimated residual values over their expected useful lives. No
          depreciation is provided on freehold land. The principal annual rates used for other assets
          are:
                Office equipment                               25% - 33%
                Motor cars                                        25%
                Freehold buildings (from date of first use)         4%

          Assets with a cost below £2,500 are not capitalised. Where assets are considered to be
          impaired they are written down to their recoverable value.

    (d)   Branches
          The Institute’s financial statements include the results, assets and liabilities of its branches
          based upon annual financial statements prepared to dates ending within three months
          preceding 30 June 2007. These statements are then adjusted to match the Institute’s own
          financial accounting date.

    (e)   Income
          Income from subscriptions is included on the accruals basis referring to the period to which
          the income relates. Income received in advance for services not yet performed is deferred.
          All other income comprises the invoiced amounts for services provided and goods sold (net of
          VAT).
    (f)   Stocks
          Stocks mainly comprise books and publications and are valued at the lower of cost, using an
          average cost basis, and net realisable value.
    (g)   Pension schemes
          The Institute operated two separate pension schemes.
          The CIPD Staff Retirement Scheme is a defined benefit scheme. It is accounted for in
          accordance with FRS17, as amended in December 2006. The adoption of this amended
          standard has changed the format and content of the pension scheme disclosures but had no
          material impact on the amounts recognised within the financial statements. The notional net
          interest charge on the FRS17 deficit has been allocated across the resources expended
          categories for both the current and preceding year.
          The CIPD Money Purchase Pension Plan is a UK based defined contribution scheme. The
          Institute also makes contributions to defined contribution schemes for its staff in Ireland.
          The charges to the statement of financial activities for the defined contribution schemes are
          the amounts payable in respect of the accounting year.
                                                                                                        Page 14
                           Chartered Institute of
                        Personnel and Development
                              Notes to the financial statements
                              for the year ended 30 June 2007
1   Principal accounting policies (continued)

    (h)   Operating leases
          Payments in respect of operating leases are charged to the consolidated statement of
          financial activities over the life of the lease on a straight-line basis.
    (i)   Expenditure classification and support cost allocation
          Details on the expenditure classification and support cost allocation bases are in note 2(a).
    (i)   Taxation
          The Institute is not liable for corporation tax as it is a registered charity. All of the profit of the
          Institute’s trading subsidiary is assigned to the Institute under a deed of covenant.
    (k)   Investments
          Investments are stated in the balance sheet at market value. Realised and unrealised gains
          and losses in the year based on market value are recognised in the consolidated statement of
          financial activities. The investment properties are shown at Directors’ estimate of their open
          market valuation.
          Liquid resources are funds held at bank which require more than 24 hours notice to access.
    (l)   Fund accounting
          The Institute has various types of funds for which it is responsible and which require separate
          disclosure. These are as follows:
          General fund
          This contains funds that are spent at the discretion of the directors in furtherance of the
          objects of the charity, and include funds held under the policy of having sufficient reserves to
          meet at least one year's operating costs.
          Designated funds
          The Institute may at its discretion set aside funds for specific purposes that would otherwise
          form part of the general reserves of the organisation. The Institute sets aside funds, supported
          by cash and investments, in respect of a variety of activities that are explained in more detail
          below. As such, they are not available for other purposes.
          •   The building fund provides for maintenance of CIPD properties, for dilapidations and for
              potential property projects.
          •   The information technology fund is for the development of systems to improve members’
              services and management information.
          •   The new learning fund is for the cost of developing learning materials to meet the
              Institute’s professional standards and to make use of new learning technology.
          •   The research and development fund is for the cost of research activities, on which
              expenditure varies from year to year, according to the Institute’s strategic objectives.
          •   The strategic initiatives fund is to provide for special initiatives identified by the Board –
              which include growing membership, meeting the needs of leading members of the HR
              profession, growing CIPD’s offering internationally, and engaging more directly with
              employers.
          The outstanding balance on the building fund is expected to be used over the next ten to
          twenty years, though this is dependant on the nature and timing of any potential property
          projects. The outstanding balances on each of the other funds are expected to be used over
          the next two to three years.




                                                                                                             Page 15
                               Chartered Institute of
                            Personnel and Development
                                  Notes to the financial statements
                                  for the year ended 30 June 2007
2(a) Total resources expended
                                                                       Direct         Support      Total     Total
                                                                       costs           costs        2007     2006
                                                                       £'000           £'000       £'000     £'000
      Charitable Activities
       Education and membership services                                6,927         1,807        8,734     8,809
       Research, innovation and
         dissemination of expertise                                     4,453         1,319        5,772     5,414
       Branches                                                         3,060           333        3,393     3,573
      Cost of generating funds
       Commercial activities                                           13,012         2,215       15,227    14,995
       Investment management                                               72             3           75       108
      Governance costs                                                    151            13          164       187
                                                                       27,675         5,690       33,365    33,086
Education and membership services include the costs of administering and providing direct services to members,
developing professional standards and providing educational services to members and educational centres which offer
the Institute’s qualifications.
Research, innovation and dissemination of expertise includes the cost of commissioning and undertaking research and
the dissemination of research and practical information to members and the public.
Branches include the central and local costs of the Institute’s branch network which offers Continuing Professional
Development and networking events for members nationwide.
Commercial activities are described in note 2(b) and include the provision of courses, conferences and publications to
both members and the general public.
Investment management costs include fees paid to the Institute’s investment advisors and fund managers.
Governance includes costs relating to the Institute’s constitutional affairs and to satisfying legal requirements.
      Allocation of support costs
                                                   Directorate             Finance
                                                                                                    Total    Total
                                                       and        IT         and       Premises
                                                                                                    2007     2006
                                                   Secretariat            Personnel
                                                     £'000       £'000      £'000        £'000      £'000    £'000
      Charitable Activities
       Education and membership services               415        531           345       516      1,807    1,729
       Research, innovation and
         dissemination of expertise                    248        422           240       409      1,319    1,148
       Branches                                        186         30            87        30        333      495
      Cost of generating funds
       Commercial activities                          215          893       517          590      2,215    2,055
       Investment management                            2            -         1            -          3        6
      Governance                                        9            -         4            -         13       24
                                                    1,075        1,876     1,194        1,545      5,690    5,457
      Total 2006                                       953       1,759      1,124        1,621               5,457

Support costs have been directly allocated to the relevant operating activity where possible. The remaining costs have
been allocated on the basis of headcount for overheads and staff time for staffing and related costs.

       Total resources expended include:                                                           2007      2006
                                                                                                   £'000     £'000
       Auditors’ remuneration:
        Audit fees                                                                                   24         23
        Branch review fees                                                                            -         19
        Other services                                                                                9         33
       Operating lease rentals:
        Land and buildings                                                                          334        321
        Other assets                                                                                 75         80
       Depreciation                                                                                 676        724

                                                                                                                     Page 16
                             Chartered Institute of
                          Personnel and Development
                               Notes to the financial statements
                               for the year ended 30 June 2007
2(b)   CIPD Enterprises Limited
       All of the activities of CIPD Enterprises Limited are designed to promote the advancement
       of good practice in the management and development of people and are treated as an
       integral part of the Institute’s activities. It operates a courses and conferences programme,
       a publishing facility for books and training materials and a company personnel consultancy
       service. It also manages the relationship with the publisher of the Institute’s journal People
       Management.
       CIPD Enterprises Limited is a wholly owned subsidiary of the Institute, it carries out the
       Institute’s commercial activities and is registered in England and Wales. All of its profit is
       assigned to the Institute under a deed of covenant and therefore the net assets of the
       company only relate to its share capital, being £2.
       A summary of its trading results is shown below.
       Audited accounts are filed with the Registrar of Companies.

       Profit and loss account for the year ended
       30 June 2007
                                                                       2007                    2006
                                                                       £'000                   £'000

       Turnover                                                      17,489                   17,267
       Operating profit                                                1,877                    1,902
       Net profit covenanted to CIPD                                   2,006                    2,020


2(c)   Investment income
                                                                       2007                    2006
                                                                       £'000                   £'000

       Bank interest                                                     623                     500
       Income from investment property                                    33                      20
       Income from other investments                                     416                     328
       Investment income                                               1,072                     848




                                                                                                        Page 17
                          Chartered Institute of
                       Personnel and Development
                            Notes to the financial statements
                            for the year ended 30 June 2007
3   Staffing (excluding directors)
                                                                  2007                  2006
                                                                  £'000                 £'000

    Salaries                                                       8,431                7,981
    Social security costs                                            770                  712
    Pension costs                                                  1,526                1,187
    Benefits in kind                                                 105                   99
                                                                  10,832                9,979


    Employees whose emoluments were over £60,000:
                                                                  2007                 2006
                                                                 Number               Number
         £60,000-£69,999                                            7                    6
         £70,000-£79,999                                            -                    -
         £80,000-£89,999                                            1                    2
         £90,000-£99,999                                            1                    -
         £100,000-£109,999                                          2                    -
         £110,000-£119,999                                          -                    1
         £130,000-£139,999                                          -                    1

    All of the higher paid employees included above were members of the CIPD Staff Retirement
    Scheme except two, for whom the Institute contributed £62,292 into defined contribution
    schemes (2006: one member of staff, £16,840).
    The average monthly number of employees during the year was 305 (2006: 295) representing
    a full time equivalent of 282 (2006: 271). The average number of employees working in
    charitable activities, including support and management and administration was 192
    (2006: 188) and 113 (2006: 107) employees worked in activities for generating funds.
    The cost of general agency support and consultants was £713,000 (2006: £705,000) mainly in
    relation to commercial activities and IT support.




                                                                                                 Page 18
                           Chartered Institute of
                        Personnel and Development
                              Notes to the financial statements
                              for the year ended 30 June 2007
4   Directors’ emoluments
                                                               2007                      2006
                                                               £'000                     £'000
    Highest paid director
    Salary including performance bonus                              317                   295
    Benefits in kind                                                 26                    24
    Emoluments excluding pension contributions                      343                   319
    Pension for year                                                  -                    86
    Pension in advance                                                -                    85
    Total emoluments                                                343                   490

    The Remuneration Committee determines the remuneration of the Director General. The
    total emoluments for the year ended 30 June 2007 include a variable performance bonus
    of £53,000 (2006: £43,000) related to the achievement of stretching objectives including
    membership growth targets and achieving the Institute’s financial objectives.
    The Director General’s pension provisions are defined contribution arrangements and the
    level of contributions was determined following an independent review of funding levels
    commissioned by the Committee in 2001. These arrangements were reviewed with
    professional advisors with reference to ‘A-day’ and as a result accelerated payments were
    made prior to 5 April 2006. No pension contributions were made in the 2006/07 financial
    year.
    Other directors
    The Chair Executive Board and the other fifteen directors who served during the year act
    in an honorary capacity and receive no emoluments for services performed. No directors’
    fees are paid.
    Reimbursement of expenses
    During the year, a total of £19,000 (2006: £27,000) was reimbursed to fourteen
    (2006: fifteen) directors in respect of travel, subsistence and other out-of-pocket expenses.
5   Tangible fixed assets

    Group and Institute      Freehold      Freehold       Office          Motor         Total
                               land        property     equipment         cars
                               £'000         £'000        £'000           £'000         £'000
    Cost
    At 1 July 2006             3,884          8,920         1,855            76       14,735
    Additions                      -              -           166             -          166
    Disposals                      -              -             -           (23)         (23)
    At 30 June 2007            3,884          8,920         2,021            53       14,878
    Depreciation
    At 1 July 2006                  -          506          1,419            27        1,952
    Charges for the year            -          357            306            13          676
    Disposals                       -            -              -           (12)         (12)
    At 30 June 2007                 -          863          1,725            28        2,616
    Net book value
    At 30 June 2007            3,884          8,057           296            25       12,262
    At 30 June 2006            3,884          8,414           436            49       12,783

    The freehold land and property relates to the CIPD offices at 151 The Broadway,
    Wimbledon. The Directors believe that the value of this property is higher than its net
    book value.



                                                                                                    Page 19
                          Chartered Institute of
                       Personnel and Development
                             Notes to the financial statements
                             for the year ended 30 June 2007
6   Investments

    Group and Institute                                           2007                   2006
                                                                  £'000                  £'000
    Investments at market value
    Managed funds:
      Unit trusts and direct holdings in listed UK equities       6,030                  9,554
       and bonds
      Overseas unit trusts and direct holdings in listed
       UK equities and bonds                                        488                  3,726
      UK unit trusts in listed overseas equities and bonds          185                    577
      Overseas unit trusts and direct holdings in listed
       overseas equities and bonds                                8,618                 3,726
      Cash held by fund managers                                  2,082                 1,024
    UK investment properties                                      1,000                   815
    Total market value at 30 June                                18,403                15,696

    Total cost at 30 June                                        18,073                14,576

    The Board can arrange for investments or other property to be held in the name of a
    nominee and has the power to delegate the management of investments to an authorised
    person within the meaning of the Financial Services Act 1986.
    A working group drawn from the Board meets regularly with an investment advisor to
    review performance and makes recommendations to the Board as to investment
    managers, asset allocation and the outcome of performance reviews.
    During the year the Institute amended its investment strategy to exercise more control over
    asset allocation and adopted a strategy of using specialist fund managers for each class of
    asset. This was effected towards the end of the year and by 30 June 2007 substantially all
    of the funds managed by the previous three investment managers had been realised and
    reinvested with nine new specialist managers. The asset allocation is tracked by the
    investment advisor on behalf of the Institute with rebalancing decisions taken quarterly.
    A reconciliation of the movement in the market value of investments is as follows:
                                                                 2007                    2006
                                                                 £'000                   £'000
     Market value at 1 July                                      15,696                15,904
     Money withdrawn                                            (16,447)              (10,245)
     Money invested                                              17,000                 8,220
     Reinvested income from investments, net of fees                372                   273
     Realised gains                                               1,452                   613
     Unrealised gains                                               330                   931
     Market value at 30 June                                     18,403                15,696

    The Institute held investments in subsidiary undertakings of £203 (2006: £307).

    Included within the assets at 30 June 2007 is an investment with a market value of
    £2,071,000 which is subject to a charge in favour of the CIPD staff retirement scheme.




                                                                                                  Page 20
                         Chartered Institute of
                      Personnel and Development
                            Notes to the financial statements
                            for the year ended 30 June 2007
6   Investments (continued)
    The market values of material investments within the portfolio were:
                                                                  2007       2006
                                                                  £'000      £'000
    CAF UK Equitrack fund                                        2,420           -
    BGI Sterling liquidity fund                                  2,071           -
    Acadian Global Equity fund                                   2,005           -
    AllianceBernstein Global style blend                         2,000           -
    L&G All stock gilt index trust                               1,875           -
    Axa Framlington UK Select opportunities fund                 1,732           -
    Forester Diversified Ltd                                     1,578           -
    Federal Street Associates Offshore fund                      1,569           -
    Overstone Global equity fund                                 1,056           -
    Cazenove growth trust for charities                              -       2,111
    Baring multi manager property portfolio fund                     -       1,063
    Cazenove absolute return trust for charities                     -       1,055
    Baring multi manager UK equity fund                              -       1,033
    Cazenove equity income trust for charities                       -         969

7   Debtors
                                                           Group                 Institute
                                                      2007       2006        2007        2006
                                                      £'000     £'000        £'000       £'000


    Trade debtors                                     3,088      3,149         222       219
    Amounts due from subsidiaries                         -          -       1,704     1,197
    Other debtors                                        14         12         402       312
    Prepayments and accrued income                    1,738      1,803         639       698
                                                      4,840      4,964       2,967     2,426

8   Cash at bank and in hand
                                                           Group                 Institute
                                                       2007     2006         2007        2006
                                                       £'000    £'000        £'000      £'000

    Bank current accounts and cash in hand              866        937         942       983
    Bank deposits – less than 24 hours notice         1,394      1,611         292     1,056
    Bank deposits – greater than 24 hours notice     10,470      9,800       8,470     7,950
                                                     12,730     12,348       9,704     9,989

    The Institute and Group cash at bank and in hand includes £2,113,000 (2006: £1,948,000) held
    on behalf of the branches.




                                                                                                   Page 21
                            Chartered Institute of
                         Personnel and Development
                              Notes to the financial statements
                              for the year ended 30 June 2007
9    Creditors: amounts falling due within one year
                                                             Group                   Institute
                                                         2007    2006            2007         2006
                                                         £'000   £'000           £'000       £'000

     Trade creditors                                     1,910      2,014           876        824
     Amounts received in advance                         4,990      5,234         4,380      4,457
     Taxation and social security costs                    278        332           278        332
     Other creditors                                       564        429           122         90
     Accruals                                            3,038      2,690         1,746      1,782
     Deferred income                                     2,150      2,085             -          -
                                                       12,930      12,784         7,402     7,485

     Amounts received in advance will all be released in the year to June 2008 and mainly relate to
     member and organisation subscriptions.
     Deferred income represents bookings for future commercial events. The movement on
     deferred income was as follows:
                                                             Group
                                                         2007      2006
                                                        £'000      £'000

     Deferred income at start of year                    2,085      1,949
     Amounts released during year                       (2,074)    (1,841)
     Amounts deferred during year                        2,139      1,977
     Deferred income at end of year                      2,150      2,085


10   Funds
                                        Balance at   Incoming      Resources   Transfers    Gains        Balance at
                                         1 July      resources     expended    between       and          30 June
                                          2006                                   funds     losses           2007
                                           £'000        £'000         £'000       £'000     £'000           £'000


     General fund                         29,474       35,245       (30,901)    (4,192)      1,782         31,408
     Pension reserve                      (5,784)           -          (370)     1,500       2,591         (2,063)
     Net general funds                    23,690       35,245       (31,271)    (2,692)      4,373         29,345
     Designated funds
      Building fund                        1,617               -       (132)         -               -      1,485
      Information technology fund            719               -     (1,532)     1,602               -        789
      New learning fund                        -               -           -       325               -        325
      Research and
       development fund                      617               -       (353)       500               -        764
      Strategic initiatives fund             998               -        (77)       265               -      1,186
     Total Designated funds                3,951               -     (2,094)     2,692               -      4,549

     Total funds                          27,641       35,245       (33,365)         -       4,373         33,894

     At 30 June 2007 cumulative unrealised gains on investment assets of £330,000 (2006: £1,120,000)
     were included in the General fund.
     Each of the Designated funds is described in note 1(l).


                                                                                                         Page 22
                             Chartered Institute of
                          Personnel and Development
                                 Notes to the financial statements
                                 for the year ended 30 June 2007
11    Pension commitments

      The Institute operated two separate occupational pension schemes – the CIPD Staff Retirement
      Scheme and the CIPD Money Purchase Pension Plan.
(a)   CIPD Staff Retirement Scheme
      The CIPD Staff Retirement Scheme is a defined benefit scheme. A majority of the eligible
      employees are members of the scheme.
      The assets of the scheme are held separately from those of the Institute to meet long-term pension
      liabilities to past and present employees. The trustees of the scheme are required to act in the best
      interest of the scheme’s beneficiaries and are appointed in accordance with scheme’s trust deed.
      Currently one third of the trustees are member nominated. AON Consulting Limited administers the
      scheme on behalf of the trustees. The assets were invested during the year in equity and property
      based funds operated by Schroder Pension Management Ltd, and in a AAA fixed interest fund and a
      UK Government index-linked fund managed by Legal and General.
      The last full actuarial valuation was carried out as at 1 October 2005. This was finalised in
      September 2006 with an actuarial deficit of approximately £3.4m. To address the past service deficit
      the CIPD agreed a funding plan with the scheme trustees. CIPD contributed a lump sum of £1.5m in
      September 2006 and has agreed to pay additional contributions of £60,000 in September 2007 and in
      each September until 2024 plus a final payment of £600,000 in September 2025. In addition, the
      CIPD granted the scheme a charge over £2m of investment assets to act as contingent assets for the
      scheme. The next triennial actuarial valuation is due to be completed as at 1 October 2008.
      Benefits accrued from 1 October 2006 have been on a career average revalued earnings basis and
      will have limited price indexation of pensions in payment restricted to 2.5%. Prior to 1 October 2006
      active members paid contributions to the Scheme. On this date the Institute implemented a salary
      sacrifice scheme and since then has paid all of the contributions at a rate of 19.1% of pensionable
      salaries. Of this, 6% represents the contributions that active members would have paid were the
      salary sacrifice scheme not in place.
                                                                        2007            2006
                                                                       £’000            £’000
      The amounts recognised in the balance sheet were:
      Present value of funded liabilities                             21,337           21,649
      Fair value of scheme assets                                    (19,274)         (15,865)
      FRS 17 deficit in the scheme at 30 June                          2,063            5,784

      The amounts disclosed in the balance sheet were:
      Liabilities                                                      2,063            5,784
      Assets                                                               -                -
      Net liability at 30 June                                         2,063            5,784

      The amounts recognised in the statement of financial
      activities were:
      Current service cost                                             1,430            1,038
      Interest cost                                                    1,147             1,071
      Expected return on scheme assets                                (1,125)             (941)
      Total                                                            1,452            1,168
      Actual return on scheme assets                                   1,423            1,443



                                                                                                       Page 23
                            Chartered Institute of
                         Personnel and Development
                               Notes to the financial statements
                               for the year ended 30 June 2007
11   Pension commitments (contined)
                                                                       2007             2006
                                                                      £’000             £’000
     Changes in the amounts recognised within other
     recognised gains and losses were:
     Opening cumulative actuarial loss                                 2,497            4,297
     Actuarial gains                                                  (2,591)          (1,800)
     Closing cumulative actuarial (gain) / loss at 30 June               (94)           2,497

     Changes in the present value of the defined benefit
     liability were:
     Opening defined benefit liability                               21,649           20,977
     Service cost                                                      1,430            1,038
     Employee contributions                                               75              296
     Interest cost                                                     1,147            1,071
     Actuarial gains                                                  (2,293)          (1,298)
     Benefits paid                                                      (671)            (435)
     Closing defined benefit liability at 30 June                    21,337           21,649

     Changes in the fair value of the scheme assets were:
     Opening fair value of scheme assets                             15,865           13,695
     Expected return                                                  1,125               941
     Actuarial gains                                                    298               502
     Employer contributions                                           2,582               866
     Employee contributions                                              75               296
     Benefits paid                                                     (671)             (435)
     Closing fair value of scheme assets at 30 June                  19,274           15,865
     The CIPD expects to contribute £1,152,000 into the scheme in the year to 30 June 2008.
     The scheme assets are invested in a diversified portfolio consisting of equity and debt securities. The
     fair value of the scheme assets as a percentage of the total scheme assets were:
                                                             30 June 2007       30 June 2006

     UK equities                                                       39%                39%
     Overseas equities                                                 19%                19%
     Bonds                                                             40%                40%
     Property                                                           2%                 2%
     Cash                                                               -%                 -%
     The scheme trustees have reviewed the scheme’s investment policy. In the year to 30 June 2008
     they expect to implement changes to the policy that will achieve diversification of assets across a
     wider range of asset classes by investing in three diversified growth funds managed by BlackRock,
     Barings and Credit Suisse.




                                                                                                       Page 24
                            Chartered Institute of
                         Personnel and Development
                               Notes to the financial statements
                               for the year ended 30 June 2007
11    Pension commitments (continued)
      The principal actuarial assumptions used by the actuary for the purposes of FRS 17 were:
                                                  at 30 June 2007       at 30 June 2006

      Rate of increase in salaries                          4.80%                 4.60%
      Rate of increase for pensions in payment              3.10%                 2.90%
      Discount rate for scheme liabilities                  5.80%                 5.20%
      Expected return on scheme assets                     7.10%                6.50%
      Rate of inflation                                    3.30%                3.10%
      Mortality table                                PXA92MCM(B)       PXA92MCM(B)
      The expected return on scheme assets is derived from the assumptions of long-term
      expected returns on each asset class, namely equities 8.00% (2006: 8.00%), bonds 5.5%
      (2006: 4.9%), and property 6.5% (2006: 6.5%).
      Historical scheme information:                          2007.     2006      2005      2004       2003
                                                             £’000.     £’000     £’000     £’000      £’000

      Defined benefit liability                            (21,337)   (21,649) (20,977) (14,252) (13,866)
      Fair value of the scheme assets                       19,274     15,865 13,695 11,028        9,166
      Deficit in the scheme                                 (2,063)     (5,784) (7,282) (3,224) (4,700)
      Experience adjustments on scheme liabilities           2,293       1,298  (5,212)   1,079   (2,012)
      Experience adjustments on scheme assets                  298         502     915      222   (1,017)

      The sensitivities regarding the principal assumptions used to measure the scheme liabilities were:
      Assumption                         Change in assumption             Impact on scheme liabilities
      Discount rate                   Increase / decrease by 0.5%        Decrease / increase by 13%
      Rate of inflation               Increase / decrease by 0.5%          Increase / decrease by 6%
      Rate of salary growth           Increase / decrease by 0.5%          Increase / decrease by 5%
      Rate of mortality                   Increase by one year                  Increase by 2.5%


(b)   The CIPD Money Purchase Pension Plan is a defined contribution scheme and serves as the
      Institute’s stakeholder scheme. The scheme is open to all employees and the Institute matches
      employee contributions into the scheme with contributions between 2% and 5% of salary. The
      pension cost charge for the year to 30 June 2007 for this scheme was £nil (2006: £1,000).
(c)   During the year new Personal Retirement Savings Accounts for staff working for the CIPD in Ireland
      were established. To start these defined contribution schemes payments totalling £95,000 were
      made covering six back years’ contributions.
      The pension costs charged in the Statement of Financial Activities for the defined contribution
      schemes represent contributions payable by the Institute into this scheme relating to the accounting
      year. The assets of the schemes are held separately from those of the Institute in independently
      administered funds.
(d)   The Director General is not a member of the above schemes.




                                                                                                       Page 25
                            Chartered Institute of
                         Personnel and Development
                               Notes to the financial statements
                               for the year ended 30 June 2007
12   Obligations under operating leases

     Group and Institute                                                      2007                2006
                                                                              £'000               £'000
     Payments committed during the year ending 30 June 2008:
     In respect of leases for land and buildings with commitments
     expiring
           Within one year                                                        -                     41
           Between two and five years                                           306                    264
           After more than five years                                             -                      -
                                                                                306                    305
     In respect of other leases with commitments expiring
           Within one year                                                       18                      1
           Between two and five years                                            12                     58
                                                                                 30                     59


13   Indemnity insurance
     Funds are provided to protect the charity from loss arising from the neglects or defaults of its
     directors, employees and agents. The cost of indemnity insurance in the year was £9,000
     (2006: £10,000).

14   Incorporation

     The Institute is incorporated by Royal Charter and therefore has no company registration
     number.
     The Institute is a registered charity under the Charities Act 1993 and its charity registration
     number is 1079797.




                                                                                                             Page 26

								
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