CIPS Annual Report and Accounts 2017 | CIPS...1017938), CIPS operates in accordance with its Charter...

Annual Report2017

03Introduction04Structure, Governance and Management08Objectives and Activities10Delivering the Strategy tofulfil CIPS’ Objectives14Achievements and Performance22Financial Review23Reference and Administration

24Statement of Trustees’ Responsibilities25Independent Auditor’s Report27Group Statement of Financial Activities28CIPS Group and CharityBalance Sheet29Group Cash Flow Statement30Notes to the Financial Statements

Contents

02| CIPS ANNUAL REPORT 2017 | www.cips.org

IntroductionFrom the Group Chief Executive Officer

2017 was a challenging year for CIPS – the sudden death of our inspirational CEO, David Noble, in February created a sense of considerable loss and uncertainty. The Global Board of Trustees (GBT) moved quickly to settle things down with my appointment effective 1 April 2017.

In 2017 changes were made to the Executive team with the appointment of a Group Chief Operating Officer and the promotion of the Group Company Secretary to the Senior Leadership Team.

Our 2017 revenues were disappointing, reflecting a tougher client environment and some turbulent international economic environments in both the Middle East and South Africa. There have been one-off costs during the year of £254k due to an historical matter in South Africa. This has resulted in a reduction in net income when compared to the prior year. If the one-off costs of £254k are excluded net income for the year ended 31 October 2017 would be £2,441k, an improvement of 2% when compared with the prior year. Net income for the year after adjusting for the one of costs is 9.1% as a percentage of total income. This is compared to 8.6% in the prior year.

There were a number of achievements during the year that we are immensely proud of - our global membership reached a record of over 62,000 and our wider community exceeded 200,000, examination entries were strong, we opened an office in Ghana and have now been recognised as the professional body in that country, our Supply Management Awards ceremonies achieved record attendances and we launched our first Supply Management Awards in Europe and Asia. Our media coverage has been extensive throughout the year, particularly our Brexit and Modern Slavery campaigns.

We continue to monitor closely any potential risks to CIPS and take mitigating action as appropriate. This year we have moved to eliminate our number one risk by closing our Defined Benefit Pension scheme to future accruals. We have started preparations for the GDPR legislation changes which will come into effect in May 2018. We have also increased our level of resilience against cyber attacks and fraud. Our new operating structure has driven efficiencies across the Institute and improved operating disciplines.

Overall, CIPS finished the year in very good health. Our reserves remain strong; we have overcome the challenge of losing our CEO and his permanent successor will assume the role in July 2018 following an orderly handover. We are looking forward to an exciting year ahead in 2018. We remain committed to working closely with our members via regional and national meetings/forums and our Congress continues to support us with membership engagement. We are committed to delivering our three year strategy and remaining the Voice of the Profession.

Gerry WalshGroup Chief Executive Officer

www.cips.org | CIPS ANNUAL REPORT 2017 | 03

Group Structure

CIPS was established in 1932. In 1992, CIPS was awarded a Royal Charter in recognition of its status as the leading body for the profession. CIPS is a registered charity (Charity No. 1017938) dedicated to the promotion of education in procurement and supply. CIPS’ headquarters are based in the UK with regional subsidiaries globally (see diagram). CIPS also operates a linked charity, the CIPS Foundation (Charity No. 1017938-1), which supports those who do not have access to educational opportunities due to economic, geographical, political or social factors.

Governance Structure and CIPS Group Diagram

As a professional body incorporated under Royal Charter and a charity registered in the UK (Charity No. 1017938), CIPS operates in accordance with its Charter and Bye-laws and within the provisions of the Charities Act 2011. CIPS is a not for profit organisation.

Structure, Governanceand Management

04 | CIPS ANNUAL REPORT 2017 | www.cips.org

Global Board of Trustees

AuditCommittee

RemunerationCommittee

NominationsCommittee

DisciplinaryCommittee

CIPS Group(Headquarters UK)

CIPSAustralia

CIPSSingapore

CIPSSouth Africa

CIPSMENA

CIPSGhana

CIPSUSA

Global Board of Trustees Composition and Selection

CIPS Trustees are volunteers who commit their time and expertise to CIPS without remuneration, providing governance leadership in fulfilment of CIPS’ Charter and charitable objectives, and ensuring the delivery of CIPS’ strategy.

Although unpaid, Trustees nevertheless assume fiduciary responsibilities on taking office and are expected to exercise responsible stewardship of both CIPS’ resources and its reputation throughout their term of office.

The Global Board of Trustees has up to 15 seats; these include both directly elected Trustees drawn from the global membership representative group (Congress) and appointed Trustees. Elected Trustees (up to six) are those elected directly from Congress on to the Board. The appointed Trustees are selected by the Nominations Committee.

The Nominations Committee is a technical sub-committee of the Global Board of Trustees responsible for the integrity and efficiency of the process for electing and selecting Trustees. The Nominations Committee facilitates the democratic election of members of the Global Board of Trustees from among Congress and appoints the remainder. All prospective Trustees must evidence that they meet the Trustee criteria and are interviewed by the Nominations Committee before either being put forward to Congress for election or being appointed on to the Board by the Nominations Committee.

Key issues discussed by the Global Board of Trustees include:• Risk• Financial performance• Budget• Improvements to CIPS’ governance• Membership.

Trustee Induction and Training

All Trustees are required to attend an induction at CIPS’ head office. The induction includes details of CIPS and its activities, the governance structure and the Trustees’ legal duties and responsibilities under Charity Law. Trustees sign an annual declaration detailing any conflicts of interest.

Each year, the CEO holds meetings with Trustees individually to support their training and development. Additionally the Chair of GBT meets with Trustees and ensures ongoing communications are maintained to address any issues that arise. Two Board meetings are held annually at CIPS headquarters, Easton House, to allow the Trustees to meet with staff at all levels of the organisation.

CIPS supports Trustees with their ongoing training by updating its online Trustee portal with information as applicable; the Trustees also have access to the Company Secretary, who provides information and support as required.

A Trustee Agreement is signed annually by all Trustees and is intended to set out in clear terms the expectations and obligations for both parties. The Trustees confirm that they have due regard to Charity Law and the Charity Commission Guidance.

Effectiveness Review

The Fit for the Future team has been working on ensuring that CIPS’ governance structure supports the organisational strategy and drives improvements. This team includes the Chair of the Global Board of Trustees, Chair of the Nominations Committee and the Chair of Congress, with input from the other Trustees. The Regulations have been amended during this year to reflect the changes recommended by the Fit for the Future team with particular emphasis on the structure of the Nominations Committee. Two Trustees have now joined the Nominations Committee to ensure that the links between the Committee and the Board are strengthened.

Periodically, an external review of the governance is undertaken; the last external review was completed by the Professional Associations Research Network in 2016.



Remuneration

CIPS’ Global Board of Trustees do not receive remuneration for their services as Trustees. The salary for the Group Chief Executive Officer and other CIPS staff is the responsibility of the Remuneration Committee. The Remuneration Committee consists of three members (the Chair of the Global Board of Trustees and two Trustees). The Committee reviews and approves CIPS’ pay and bonus policy for its relevance and appropriateness. The Committee considers external expert advice including benchmarking data.

All staff have objectives set annually and these are monitored via the performance management system. The CEO and Senior Leadership Team have objectives mapped against the organisational strategy to promote the long term success of CIPS. The Chair of the Global Board of Trustees is responsible for the management of the Group CEO.

Related Parties Transactions

The Global Board of Trustees and the Senior Leadership Team are required to declare all parties connected with them that may be classified as related parties. All transactions with related parties must be disclosed; forms are completed annually. During 2017, no related party transactions were declared.

Risk Management

The Global Board of Trustees is responsible for organisational risk management. This includes the high level risk register which is reported on at each Board meeting and reviewed annually by the Trustees. The Risk Management Policy was updated and approved by the Board in March 2017. The Senior Leadership Team implements the policy on behalf of the Board. As part of the policy update, a new risk register was developed which compared risks from the previous period to ensure that all areas had been considered and to ensure there were effective mechanisms to react to risks when they crystallise. A risk owner was assigned to each risk, responsible for actioning the mitigation activities.

Risk mitigation plans have been agreed with emphasis on the highest rated risks. These have been completed during the period and the highest rated risk has been mitigated to an acceptable level through the closure to future accruals of the Defined Benefit Pension scheme.

Overall, the Global Board of Trustees is satisfied that the major risks have been reviewed and mitigation plans are in place. However the Board has requested further development of the risk policy and an external consultant is being engaged to ensure good practice is adopted across CIPS.


Description of Principal Risks and Uncertainties

RISK PRINCIPAL MITIGATION

Ability to meet Defined Benefit Pension liabilities

The scheme was closed to future accruals during 2017. A pension strategy has been implemented which included the restructuring of the Pension Trustee Board and the appointment of a sole independent, professional Trustee. CIPS is also contributing an additional £300,000 per annum to the fund. Risk reduction and funding strategies are being prioritised by the Board.

Failure to comply with GDPR A project, sponsored by the Group CEO, is underway to complete a data audit, identify action plans and ensure that CIPS’ compliance roadmap is in place by May 2018.

Failure of tier 1 suppliers CIPS’ supplier relationship framework is used to identify, evaluate and monitor all business critical suppliers. Business continuity plans and risk registers are in place to manage potential issues.

The composition of the Global Board of Trustees is insufficiently balanced to meet the requirements of the business

The nominations process is being reviewed as part of the Fit for the Future Governance Project, including a restructure of the Nominations Committee. The appointments process is being strengthened to include more rigorous scrutiny of candidates and interviews for all potential Trustees.

Lack of appropriately skilled internal resources to effectively manage the global operations

A global HR policy has been rolled out during 2017 to align recruitment procedures globally. A talent management programme is also utilised to retain and grow internal skillsets.

Cyber attack Cyber risks are addressed as part of the IT cyber risk mitigation strategy.

Increased competition from local organisations

Country specific strategies have been developed to address local membership and education requirements. The membership review project is a strategic focus to ensure that the membership proposition remains relevant in the different regions.


The Royal Charter and Bye-laws of CIPS state that CIPS’ purpose is to:

• Promote and develop for the public benefit the art and science of procurement and supply and likewise to encourage the promotion and development of improved methods of procurement and supply in all organisations

• Promote and maintain for the benefit of the public, high standards of professional skill, ability and integrity among persons engaged in procurement and supply

• Educate persons engaged in the practice of procurement and supply and by means of examination and other methods of assessment to test the skill and knowledge of persons desiring to enter the Institute

CIPS’ Vision

To be “The Voice and Standard” of the Profession.

CIPS’ Mission

To be the authority that leads global excellence in procurement and supply.

To enhance an individual’s and organisation’s professional capability and by doing so, protect the public from poor procurement and supply processes.

As a registered charity(Charity No. 1017938)

CIPS seeks to fulfil its purpose by supporting the procurement profession through its main streams of activity which are detailed in this report.

These activities are managed by the Senior Leadership Team which reports directly to the Global Board of Trustees.

Objectives and Activities

Public Benefit

As a Professional Body incorporated by Royal Charter, CIPS delivers public benefit through a range of its activities:

• CIPS promotes ethical behaviour and offers its annual ethics e-learning and test to its members free of charge

• CIPS’ guidance on responsible and ethical procurement is freely available to members and non-members alike and its guides on modern slavery are seen as key resources on how to approach best practice for an ethical and responsible procurement strategy

• CIPS’ members have to sign up to its Code of Conduct annually. This promotes positive behaviours that, in turn, lead to increased public confidence in the profession

• CIPS provides its Global Standard, a comprehensive framework for individuals at all levels, free of charge to members and non-members alike

• CIPS Foundation provides support for studying Procurement and Supply professionals in hardship. During 2017, initial work was undertaken on developing Foundation Partnerships (formally academies). 29 bursaries were awarded in 10 different countries

• CIPS provides access to knowledge that promotes high standards of skills and ability among those engaged in procurement and supply

Public Benefit – Volunteers

Volunteers are involved across the organisation in a wide ranging capacity:

• Global Board of Trustees and its Committees - providing effective and robust governance

• Global Congress members – these are elected representatives that are the ‘voice of the membership’ and act as a global advisory body. Congress members meet annually in the UK, Middle East and Africa and each March CIPS hosts a global Congress meeting in the UK. There are approximately 52 Congress members based in 12 countries around the world

• Branch Committees - deliver locally organised events aimed at providing members with networking and knowledge sharing opportunities; some events are also open to non-members. Committees also take responsibility for local engagement with schools, colleges and local businesses to raise awareness of CIPS and the profession as a whole. In 2017, 565 members were involved in branch committees delivering 266 events that attracted 11,718 participants. There are 76 active branches operating in 29 countries around the world

• Adopt a School – raising awareness of procurement with young people by visiting schools and speaking about the profession

• Fellowship Committees - operational in the UK and Middle East and have been instrumental in driving a significant increase of the Fellowship community to over 800. The Committees organise networking events, run coaching and mentoring schemes for young professionals and actively provide opportunities for CIPS to engage with senior professionals who are not currently part of the CIPS community

• Special Knowledge Groups - provide expert knowledge and insight; focused on key areas of procurement spend. They work with CIPS to create new guidance, tools and best practice information that is shared with members via the Knowledge website

• Professional Advisory Groups - provide local and regional insight to support the development of CIPS’ strategy.

A key area of focus in 2018 will be to expand the Special Knowledge Groups into other spend areas and to transform the branch network in line with the recommendations from the Membership Review. CIPS is indebted to the commitment and vital contribution that volunteers provide.



2017 was the first year of CIPS’ three year strategic plan. The plan, running from 2017 to 2019, takes account of the current environment in which CIPS operates and the threats and opportunities for the profession. It is cascaded from the Vision and Mission, which are based on the Royal Charter, through a set of strategic themes for the three year period. Each theme has an action programme and detailed business plans.

Strategic Themes

Voice of the Profession – for CIPS to own the space as the voice of the procurement and supply profession globallyContent – for CIPS to continue to be recognised as a credible provider of content that enables procurement and supply professionals to develop and enhance their professional knowledge and capabilityEducation – for CIPS to educate and assess people to a standard which is adopted as the global benchmark for procurement professionalsAudit & Compliance – for CIPS to help organisations manage their supply chain risks

Global Reach – for CIPS to retain the position as the largest professional body representing procurement and supply globally.

Delivering the Strategyto fulfil CIPS’ Objectives



1 Voice of the Profession

This theme is intended to ensure that CIPS acts as the Voice of the Profession. In order to achieve this, membership will be maximised and engagement with non-members, both within the procurement and supply profession and in adjacent professions, will be increased. The quality and relevance of CIPS’ content, messaging and media relations will also be key focuses.

There are three strategic objectives with respect to this theme:• Grow the level of commitment for qualified procurement professionals• Grow the size of the community• Increase the profile of CIPS and the procurement profession in the media.

Metrics include: the number of organisations that sign up to the licensing agenda, growth in terms of membership and the wider community, social media penetration growth, and the number of unique users of the CIPS website.

Target Actual

Membership 62,300 62,099

Membership churn 18% 20%

Community 160,000 200,000

Social media followers 46,652 60,437

Unique users of CIPS website 1,452,000 1,546,641

Revenues raised through theCIPS website £10 million £10.1 million

Organisations that have signed up to Licensing the Profession: 30 13

2 Content

This theme ensures that CIPS provides content that enables procurement and supply professionals to develop and enhance their professional knowledge and capability. CIPS aspires to be the “go to” place for non-procurement professionals looking for relevant content in the procurement area.

There are two strategic objectives with respect to this theme:• CIPS’ knowledge resources are seen as valuable• CIPS’ knowledge resources are seen as relevant and accessible.

Metrics include: number of page views of knowledge content on CIPS’ website and volume of new knowledge developed.

Target Actual

Knowledge content page views Increase page views by 10% Increased page views by 18% (to 745,897)

Volume of new knowledge developed Close 5 identified gaps Closed 10 identified gaps

On boarded 5 newknowledge partners

Added topics on Brexit, Future of the Profession, Game Theory

and Innovation


3 Education

At the heart of CIPS’ Mission is the portfolio of education related products and services. The strategy is to strengthen and enhance the current offerings to ensure that CIPS remains relevant and grows in both the traditional markets and new markets.

The changing expectations of the global workforce mean that CIPS’ products need to adapt to offer more discrete training. This was originally intended to be delivered through a Business School model; however it was concluded that this concept was not appropriate for the current suite of offerings therefore it was decided not to proceed. The delivery of training programmes and qualifications was addressed through an internal restructure.

There are four strategic objectives with respect to this theme:• Ensure the syllabus is relevant• Expand recognition of qualifications that support the licensing agenda• Expand CIPS’ global reach• Expand CIPS’ offering vertically into schools and universities, at both undergraduate and

postgraduate level.

Metrics include: feedback on relevance, number of university partnerships and accreditations, number of regulatory frameworks outside the UK on which CIPS’ qualifications are recognised, number of on-line assessments, GCSEs with procurement and supply content.

Target Actual

University partnerships 57 69

University accreditations 94 113

Regulatory frameworks outside the UK on which CIPS’ qualifications are recognised

8 7

Total assessments 85,000 84,822

GCSEs with procurement & supply content 1 1

4 Audit and Compliance

The purpose of this is to position CIPS as the recognised benchmark for supply chain audit and compliance standards and through the adoption of these standards, help organisations improve the management of their supply chain risks whilst protecting the general public against the effects of disruption and malpractice.

The areas of efficiency and performance in procurement and supply chain teams can broadly be defined in terms of people and organisational capability. The people strand is addressed via the Education strategy, whereas the organisational capability and capacity is addressed via CIPS Certification (recently retitled CIPS Performance Excellence Programme) which is an assessment of policies, practices and procedures across the procurement and supply function.

There are two strategic objectives with respect to this theme:

• Grow international partner delivery network to enhance the capability and capacity to deliver CIPS Certification globally

• Develop and launch a new Supply Chain Resilience Standard.

Metrics include: number of Certification delivery partners, number of organisations with CIPS Certification, launch of the Supply Chain Resilience Standard.

Target Actual

Certification delivery partners 5 5

Organisations with CIPS Certification 215 301

Launch of Supply Chain Resilience Standard

Launched guidance for SupplyChain Resilience


5 Global Reach

A key driver for CIPS is international expansion in key countries. The primary motive for the expansion is to fulfil the public benefit agenda as defined in CIPS’ Charter and the Voice of the Profession strategic initiative.

There are two strategic objectives with respect to this theme:

• Increase the number of countries where CIPS is recognised as the Professional Body• Increase the value of corporate sales outside of the UK.

Metrics include: growth in the number of countries where CIPS is the Professional Body, growth in revenue and operating profit outside of the UK.

Target Actual

Countries where CIPS is recognisedas the Professional Body 2 1

Establishing global presence by launching CIPS operations in new countries

2 2

Future plansPlans for 2018

2018 is the second year of CIPS’ three year strategy. The KPIs for 2018 build upon those achieved during 2017. Additionally, CIPS’ focus during 2018 will be to:

• Commence a drive to transition students from paper-based assessments to e-assessments thereby increasing accessibility, controlling costs and supporting sustainability

• Encourage continuing professional development (CPD) to raise the standards and competence of members

• Launch a suite of updated qualifications with supporting resources such as course books and e-learning

• Launch a fully mobile responsive website with new design and navigation, simpler and easier purchase journeys and a unified shopping basket, which will deliver an improved customer experience and optimise revenue

• Implement the recommendations of the membership review to support membership growth and retention

• Extend senior level engagement through a programme of thought leadership events and the launch of a Procurement Power List

• Extend CIPS’ support of the diversity and inclusion agenda, advised by its Women in Procurement Leadership steering group

• Continue to identify opportunities to improve the organisational governance structure led by the Fit for the Future team

• Complete a review of the financial internal controls and infrastructure and prioritise an improvement plan.

Long Term Plans

CIPS’ mission is to enhance the professional capability of both individuals and organisations and thereby protect the public and organisations from poor procurement and supply. This becomes ever more relevant as global challenges impact supply chains. CIPS’ campaigns to eliminate supply chain slavery and our Brexit commentary have received global interest, and CIPS will continue to drive these agendas, and others, as the Voice of the Profession. CIPS will continue to promote best practice in procurement and supply, strongly encouraging members to undertake annual CPD; extending our Knowledge provision; and informing members and subscribers through our news and publishing channel, Supply Management. Following CIPS’ qualifications review in 2017/18 there will be the flexibility to quickly introduce relevant modules to our qualifications portfolio that respond to the needs of procurement professionals.

CIPS will continue to drive standards in procurement and supply. While our heartland is our own membership, and the need to support that membership with relevant propositions, we also have to look to a wider community of practitioners who are not members, and also members of other professions who may be undertaking procurement, in order to engage and inform them. Partnerships with other organisations, including professional bodies, will allow us to extend our reach and grow the community, strengthening CIPS’ position as the Voice and Standard of Procurement and Supply.

The complex nature of supply chains means that procurement and supply is a global profession. CIPS will continue therefore to encourage professionalism globally through the expansion of our operations, network, partnerships, public and private sector relationships, and global bodies such as the UN.


Achievementsand Performance

CommunitiesCognisant of the need for the modern professional body to engage with professionals beyond its core membership in order to continue to extend its reach, growing its influence and credibility as the Voice of the Procurement and Supply Profession, CIPS introduced a strategic imperative in 2017 to increase its engagement with non-members, both within the procurement and supply profession and in adjacent professions:

• CIPS has continued to successfully build strong relationships with senior procurement professionals, providing high level content for its magazine, digital portfolio and events, under both the CIPS and Supply Management brands

• CIPS’ Supply Management brand has enabled community development via the Supply Management Daily e-newsletter and SM Jobs (online only) now the leading recruitment site for procurement and supply roles with 61% market share in 2017 compared to 49% in 2016. Both of these are freely available to members and non-members alike

• Expanding its influence into an adjacent profession, CIPS delivered a campaign to 8,000 members of the Chartered Institute of Personnel and Development (CIPD) promoting to recruiters and HR professionals the benefits of having CIPS qualified professionals in procurement roles, and also offering them access to the CIPS ethics e-learning and test free of charge.

MembershipDuring 2017 CIPS’ global membership grew by 4.5% to a record of over 62,000 members. The UK continues to represent the largest contingent of members; however there was strong growth in the Middle East, China, Zimbabwe, Ghana and Europe where market focused strategies have started to yield positive results.

CIPS’ membership growth is driven primarily by the student population; however the “churn” rate of 20% has continued, mainly due to students allowing their membership to lapse once they have achieved their desired level of qualification. There is continued erosion in the number of full members (MCIPS and FCIPS). In order to encourage members to renew their membership on an annual basis an extensive Membership Review was launched in Quarter 1 of 2017. The review aimed to understand:

• How do we improve the membership proposition?

• How do we reduce rates of churn?• How do we transition to a branch network that

is fit for the future?

Over 3,000 members from around the world supported the review via surveys and focus group meetings; three work streams were formed to analyse the feedback and produce recommendations for change. Each of the work streams was led by volunteer groups with support from CIPS and CIPS’ Global Congress. The Global Board of Trustees approved the recommendations of the review and an investment in 2018 to support delivery of what will be a three year transformation plan.

Over

38kstudents studying

globally recognised qualifications at over

200 study centresworldwide

65% of recruiters

prioritiseMCIPS

candidates

A global community

of over

200k procurement

professionals inover 150 countries

Organisations benchmark their

procurement professionals against CIPS Global Standard

CIPS for individuals

Achieving MCIPS is not only a route to further learning, it opens up networking opportunities and

recognises the contribution you make within the procurement profession.

Gwynne Morgan MCIPS, ZSL London Zoo

“”



Professional Development aimed to grow the volume of assessments delivered by CIPS during 2017. CIPS Group exam entries for CIPS qualifications for 2017 were 79,394 (2016: 75,441), which represents an increase of 3,953 (5%). The total number of assessments across the product range was 84,822.

The UK remains the most active country and, combined with Botswana, Zambia and South Africa, forms the majority of exam activity. In 2017, 22,929 studying members took CIPS qualifications assessments at 312 assessment centres in 110 countries. This represents an increase of 1,913 (9%) active learner community compared to 2016. For 2018, the focus will be on increasing the number of Study Centres globally to ensure studying members continue to have access to high quality provision of CIPS qualifications. During 2017, there was an impetus to increase the number of countries in which CIPS is recognised as the Professional Body and grow the number of countries where CIPS has qualifications recognised.

CIPS is now recognised as the professional body in Ghana. Professional body recognition was successfully renewed in South Africa and CIPS was recognised as an International Certification Organisation (Awarding Body) in Dubai.

For 2018, the focus will be on maintaining 100% regulatory compliance with all global regulators and conducting a global exam venue and invigilation services review to support the implementation of the updated qualifications.

CIPS aimed to expand the recognition of other relevant qualifications that support CIPS’ licensing agenda. As at the end of 2017, CIPS has 113 recognised programmes with 69 accredited programme providers in 15 countries. This represents 20% growth in accredited programmes during the year. For 2018, recognition of other qualifications globally will be expanded to continue supporting the licensing agenda.

In 2018 the implementation of a fully functional e-assessment solution for all assessments commences. The Qualifications Review project and Global Standard review will ensure the qualifications syllabus continues to be relevant and meets the current and future needs of the profession.

This was a challenging year for corporate revenues with the expected levels of growth in all regions not being achieved; overall the revenues were slightly behind the previous year. There is a healthy pipeline of potential business for 2018 and growth has been budgeted for in the coming year.

The economic and political climate in a number of key countries led to some delays in decision making by customers which impacted the results. However, a number of large new contracts were secured during the year which will be delivered in 2018. CIPS launched four new partnerships in Italy, Sweden, Ghana and Malaysia which will support business development and delivery in these countries.

During 2017 products and services were delivered to over 500 public and private sector customers globally, ranging from one off training courses to fully accredited procurement learning programmes as well as procurement process development activities.

In 2018, focus will be on account management and growth of the current 30 major global customers. There are many loyal customers and it is vital that they are well managed with improvements delivered in the customer experience. In addition CIPS will continue to grow its geographic presence with a new office in the USA, a new partnership in France, and further expansion across West Africa, including Nigeria.

Over

900corporate clients’

procurement teams trained across

the globe

Over

300organisations helped

to improve their processes through CIPS Procurement Excellence

Programme

£40m cost savings reported by a single Corporate

Award client

IHS Markit/CIPS UK PMI® – insightful monthly economic data for

procurement professionals

JLR has enjoyed a fruitful andbeneficial relationship with CIPS.We find CIPS to be relevant to a

business like us, with its complex procurement demands and

increasingly international outlook.Brian Davy FCIPS, Procurement Director, Jaguar Land Rover

“

”

CIPS forbusiness

Professional Development

Public and Private Sector Customers


Modern Slavery

CIPS’ most recent Modern Slavery survey in 2017 found that a third of organisations required to produce a statement under the UK’s Modern Slavery Act have failed to do so. The findings from our research received significant media coverage. It’s our firm belief that a step-change in attitudes can be achieved if consumers start to question how and where their goods are made, and begin to scrutinise the modern slavery statements of the organisations making them, and we are continuing our campaign to a consumer audience to encourage this. It is two years since we relaunched Supply Management with a hard hitting front cover marking the start of our “Eliminate Supply Chain Slavery” campaign which is aligned to our PR campaign on the same topic, taking a content-led approach. 91% of our readers said that Supply Management’s coverage of slavery and the UK’s Modern Slavery Act helped increase their awareness and understanding of the issue. When we surveyed our members back in 2015 52% of UK supply managers said they would not know what to do if they found modern slavery in their supply chains. Now that figure is only 16.5% which makes us very proud that the key messages in our campaign are making an impact. CIPS continues to work alongside Kevin Hyland, the UK’s Independent Anti- Slavery Commissioner, and the Gangmasters and Labour Abuse Authority (GLAA), as well as leading sector groups such as the BRE in the construction sector, positioning CIPS as a leading voice and thought leader.

Brexit

April and October saw the release of our Brexit surveys to the media. Each survey was drawn from over 1,000 supply chain managers from across the globe who were consulted to obtain their views on, and reactions towards, Brexit. The campaign resulted in over 100 pieces of press coverage and was covered substantially across all national media titles and many key trade publications. Of the 100 pieces of coverage, 22 were in UK national newspapers, resulting in the most successful campaign of the year. The results have also enabled us to pull together our Brexit report, which is a valuable piece of content downloadable for members from the CIPS website. Coverage has resulted in many additional opportunities such as speaking engagements and opportunities with clients and knowledge partners to discuss the issues further.

Campaigns

On the 23rd of June 2016, the UK public voted to leave the European Union; a relationship that had lasted for more than 40 years. The vote had a majority of 51.9% to 48.1% who voted to remain. Article 50 of the Lisbon Treaty was invoked by Theresa May, the British Prime Minister, on the 29th of March 2017, beginning the process for formal negotiations to leave.

‘Brexit’ has already had economic and political effects as measured by CIPS Risk Index powered by Dun & Bradstreet, and the Markit/CIPS Purchasing Managers’ Indices (Markit/CIPS PMI®) and will continue to create waves in procurement and the wider business community, around the world. Soon after the result, the CIPS Risk Index (2016 Q3 results) showed global supply chain risk grew for the third consecutive quarter, as the Brexit result raised questions about

the future of globalisation and had a negative impact on trade and business in the UK and across Western Europe. The flash Markit/CIPS PMI® in July showed that the UK economy had contracted at the steepest pace since 2009 and that both new orders and output fell for the first time since the end of 2012. Though the PMIs subsequently recovered their strength, the CIPS Risk Index has still registered underlying risk in part because of the continuing uncertainty over global trade and what the new landscape could look like.

The UK Parliament authorised Theresa May to give Article 50 notice and will scrutinise negotiations along the way through debates and select committees. The Repeal Bill (European Union (withdrawal) Bill), translating EU into British law will focus on immigration, agriculture & fisheries and nuclear

The EU timeline

The Brexit situation

The Washington Treaty is signed by the USA, Canada, and ten European states - Britain, France, Belgium, the Netherlands and Luxembourg, Iceland, Italy, Norway, and Portugal. Primarily focussed on shared defence.

The Paris Treaty is signed between France, Germany, Belgium, the Netherlands, Luxembourg and Italy to manage coal and steel industries and form a Council of Ministers from member states.

The same six members sign the Treaty of Rome and set up the European Economic Community and the European Atomic Energy Community (Euratom), with a common market, free movement of capital and labour, and the development of nuclear energy.

United Kingdom decides to apply for membership amid opposition from France about the UK’s close ties with the United States but the application is vetoed. Denmark, Ireland and Norway also failed to join.

Britain, Denmark, Ireland and Norway signed an accession treaty in 1972 but Norwegian referendum rejects the application.

1949 1951 1957 1961 1973

The EU timeline

safety. The Customs Bill will mean more control for the UK and changes to the UK’s VAT and excise process where the Government can collect duties, and challenge evasion. A new trade Bill will include a legal framework so Britain can sign new trade deals with countries and businesses can be protected from unfair trading practices.

Procurement and supply management professionals have a unique and important view, and control over how to mitigate impact on supply chains and build stronger networks. As guardians and suppressors of panic within their own organisations they have a great opportunity to implement not just best practice but sustaining the future of their business.

CIPS wanted to know what measures the procurement community was taking to manage the effects of Brexit. More than 2000 responded around the world. We hope this informs and inspires other buyers and professionals to develop their own plans and activities to manage the effects of Brexit, whatever that means to them. The second survey results will be out later in the year.

The UK holds a referendum to join the EU, 67% of voters were in favour.

Treaty of Lisbon is signed, amending the two treaties forming the constitutional basis of the EU.

The Euro becomes the official currency of 11 countries, though the UK, Sweden and Denmark do not participate.

Maastricht treaty is signed creating a pathway for monetary union and social policy and introducing European citizenship. The UK opts-out of monetary and social policy union. Volatility in currency markets means the pound is pulled out of the ERM.

The European Monetary System (ERM) introduced the ‘Ecru’ for travellers’ cheques and bank deposits. All member states join apart from the UK.

1975 1979 1991 1992 2009

The Brexit storm How procurement and supply chain professionals are tackling the issues

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PRCIPS’ Risk Index and PMI reports both continue to give CIPS a regular voice in the economic and business press, expanding our sphere of influence whilst providing additional content for our Voice of the Profession strategy.

We partnered with Raconteur to run a Procurement supplement in The Times in July.

The impact of our PR has been difficult to quantify this year due to a change in the supplier who provides our metrics. Although the benchmark has changed we have continued to track a new AVE figure (Advertising Value Equivalent) producing an average monthly report of £22.2m.

#iBuy

In October we relaunched our “Profession of Choice” campaign under a new brand, #iBuy. CIPS has been working hard over the past 5 years to attract young people into a procurement career. The “Be a Buyer” website and materials have been refreshed and the “#iBuy (and I get paid for it)” campaign, which includes video content and case studies of real young people who have interesting roles in procurement for well-known organisations or brands, was launched with an extensive social media campaign.

Find outmore

cipsibuy.com

...and I get paid for it

#iBuyand I get paid for it

Michael Barnesbuys tyres for Jaguar Land Rover

Find outmore

cipsibuy.com

...and I get paid for it


Georgia Lawrencebuys Christmas lights for Leadenhall Market

Les Smith

Regional product manager for GLL

Les buys the health and fitness products for 36 centres in the East London region for GLL, a charitable social enterprise that provides community leisure and fitness facilities.

Jessica Roberts

E-sourcing analyst for Associated British Foods

After finishing her business management degree, Jessica’s undergraduate placement at a company within Associated British Foods (ABF) provided her with a route into procurement. Tags for Twinings teabags are just one of the many things she helps buy. She helps people with e-sourcing, which is essentially bringing the procurement sourcing process online.

Jessica Robertsbuys tea tags for Twinings

Mamun Khan

Procurement officer for City of London Corporation

Mamun manages the key relationships with suppliers and stakeholders – internal and external at City of London, with departments that range from schools and open spaces to the police.

Mamun Khanbuys tractors for Hampstead Heath

Meet some of your future colleagues

Find out more at cipsibuy.com

“I did a buying and merchandising course at the London Fashion Retail Academy, which ran workshops with industry professionals such as Sir Philip Green, which started my love for buying”

Amy Musson

Graduate buyer for National Grid

Amy moved into procurement after graduating in law from Newcastle University. As well as giving her a chance to flex her legal knowledge, this role fits well with her interest in the energy sector. When she graduated, she was interested in a commercial role in a business with great influence in society.

Michael Barnes

Commodity buyer for Jaguar Land Rover

Michael’s job is to acquire value for JLR. He builds strategic relationships, manages cost and secures supplies to meet continuous production of the cars. He helps to build supply chains providing suitable quality and at a competitive price, while meeting company ethics. He arranges all the appropriate contract documentation with suppliers, from sourcing agreements to general terms and conditions and non-disclosure agreements.

Michael Barnesbuys tyres for Jaguar Land Rover

Georgia Lawrence

Procurement officer for City of London Corporation

Georgia is part of the City of London’s centralised procurement department, which is split into four buying teams: corporate; construction; facilities; and her team, operations below £100,000. They are responsible for tenders that are over £10,000 and under £100,000, across all categories.

Georgia Lawrencebuys Christmas lights for Leadenhall Market

Start your journey at cipsibuy.com

Find out more at cipsibuy.com

Casey Caldwell buys dairy products for Cunard cruise ships

Amy Musson buys safety workwear for National Grid

Les Smithbuys gym equipment for GLL leisure centre


Leading global excellence in procurement and supply

Q2 2016

80.8

Q3 2016

81.6

Q4 2016

82.6

Q1 2017

81.9

80

70

90

1000 81.9LOW RISK HIGH RISK

6050

40

30

20

10

CIPS Risk Index Score

CIPS RISKINDEX

Following five straight quarters of declines,the Global Risk Index (GRI) score improved slightly,signalling a moderation in cross-border supplychain risks. However, potentially disruptive supplychain risks lurk below the surface.

The improvement in the GRI score was drivenboth by rating changes and by a methodologyenhancement involving a rebasing of exportweights to reflect shifts in the global economy.

CIPS RISK INDEX (CRI)KEY POINTS Q1 2017

Near-term risks to global supply chains run thegamut from global trade policy shifts, to geopoliticalrisks in North Korea, to systemic uncertainties suchas the Brexit negotiation outcomes.

Six countries were downgraded in Q1in terms of our operational risk assessments, whilefour were upgraded; momentum effects ofup/downgrades from Q4 2016 plus the rebasing,also impacted GRI.

QuarterlyReportQ1 2017

powered by

Record high GRIscore retreats,signalling amoderation insupply chain risks.

Highlights in 2017 included:• The “CPO Brain”, a first-of-its-kind psychometric study into the core characteristics of

successful modern procurement leaders• Continuation of the successful “Eliminate Supply Chain Slavery” campaign, which was

shortlisted for Campaign of the Year at the BSME (British Society of Magazine Editors) Awards

• Supply Management was also shortlisted for Best Business Brand of the Year (Monthly or less frequent), Art Director of the Year-Business, and Cover of the Year-Business, for the modern slavery related cover that re-launched the magazine.

Social MediaSocial media is increasingly utilised as a communications channel and reaching out through social media channels is critical to supporting our Voice of the Profession strategy as well as community growth and generating interest in how CIPS can support the development of professional procurement capability. In 2017, CIPS saw a 42% growth in its social media followers across Facebook, Linked-in and Twitter.

In addition, Supply Management took gold (first place) in the best membership magazine category of the prestigious CMA Awards, beating both British Airways and the RSPB. The Content Marketing Association (CMA) is the industry association for marketing, publishing, advertising and social agencies, promoting the use of content as an effective marketing tool.

CIPS’ Supply Management magazine continued to deliver thought provoking global content for members as part of CIPS’ content led engagement strategy with the wider procurement and supply community.


Supply Management

10 | CIPS ANNUAL REPORT 2017 | www.cips.org20 | CIPS ANNUAL REPORT 2017 | www.cips.org

EventsCIPS’ own global flagship events which deliver to our strategic objective of being the Voice of the Procurement and Supply profession have seen record attendance and participation in 2017 compared to the previous year:

• The Supply Management Awards at London’s Grosvenor House saw over 1,000 in attendance and a 20% increase in awards entries

• The Graduation on 5 October saw over 700 in attendance at the outstanding new venue of Peterborough Cathedral including a 33% increase in graduates

• The UK Conference at London’s QEII Conference Centre saw a 20% increase in delegates

• The Australasia Conference had 8% more delegates and the Awards saw a 38% increase in entries and 12% more guests

• The MENA Conference had a 136% increase in delegates and the Awards saw a 41% increase in entries and 4% more guests

• The Turkey Conference had 23% more delegates.

In addition, in 2017, in conjunction with WBR, we launched CIPS Supply Management Europe Awards alongside ProcureCon Europe and CIPS Supply Management Asia Awards alongside ProcureCon Asia. These inaugural awards both received significant support both in terms of entries and guests, an indication of the strong interest in CIPS in these regions.

CIPS continues to have a strong and visible presence at other events around the world, helping to raise our profile and demonstrate relevance to the procurement community, supporting our position as the Voice of the Profession.

Annual Report2017 Financials

Review of CIPS’ financial position at the end of the period

Group

Total group income decreased by 3.2% to £26.8 million (2016: £27.7 million), a £0.9 million reduction over the previous year.

CIPS’ principal revenue streams, Membership, Professional Development and Corporate Business underperformed compared to last year’s results and together reduced by 2.6% to £23.2m. Revenue from Membership and Professional Development fell by 2.7% to £12.2 million (2016: £12.5m), Membership numbers rose by 4.5% to 62,099 with a community of 200,000. Membership revenue accounts for 45.4% of total income.

CIPS’ Corporate Business income decreased by 2.5% to £11.1 million (2016: £11.3 million). Corporate Income contributes 41.2% of total group revenues.

Income Streams as a percentage of Total Income:

Net Income has decreased by £0.2m at £2.2m due to the fall in income, write off of prior year liabilities relating to VAT in South Africa, together with increased investment expenditure on projects and infrastructure. The Net Movement in Funds has increased from £0.6m in 2016 to £2.3m because in 2017 the pensions fund had an actuarial gain of £0.1m compared to an actuarial loss of £1.8m in 2015/16.

International Offices

CIPS’ subsidiary companies in South Africa and Australia both produced a positive Net Financial Return (NFR) while the Singapore company returned a shortfall.

The improved performance of the Australasian company continued this year with a net income of £179,000 (2016: £70,000). This was achieved by eliminating low margin corporate business and by hosting a very successful conference.

The Southern Africa subsidiary performed strongly this year with good volumes of entries for the exam series. In addition, a major contract to provide training services to a department of the South Africa government boosted the net income despite the modest margins that were agreed. The overall result was a surplus of £280,000 (2016; £175,000).

The Singapore subsidiary is taking time to become established with staff changes making it difficult to convert opportunities during the year. The company returned a deficit for the year of £132,000 (2016: deficit £72,000).

Reserves Policy Statementand Amount held

CIPS maintains free reserves in order to fund major new initiatives and as a shield against future downturns. The Global Board of Trustees has established a policy of maintaining reserves at a discretionary minimum level, currently equating to three months’ operating costs. At the end of the year the actual unrestricted reserves level was above this minimum, set at £2.5m at £5.4m.

The reserve levels are monitored regularly with treasury deposits managed internally and the day-to-day management of the equity portfolio being carried out by external investment managers. This ensures that sufficient resources are available to meet the objectives and the needs of Restricted and Designated Funds as well as continuing activities.

As at 31 October 2017 the total of group investments, short-term deposits and cash at bank amounted to £8.8 million (2016: £7.7 m). The total amount of funds including the pension reserve deficit are £5.5m (2016: £3.3m) of which £208k is restricted, £5.4m is unrestricted funds and pension reserve is £(40k).

Investment Performance

Investments are held in a Capital Portfolio in accordance with our prime investment objective. The risk profile is defined as moderate risk tolerance (profile3) as determined by reference to Barclays PLC, of which social, environment and ethical considerations are taken into account, so as not to contravene CIPS corporate objectives.

Financial Review


• 45.4% M/Ship and Prof Dev• 41.2% Corporate Business• 6.9% Magazine, Conferences and Sponsorships• 1.0% Other Income• 4.7% Other Trading Activities• 0.8% Investments


Global Board of Trustees (1 November 2016 – 31 October 2017)

• Grahame Ball• Alison Barto (nee Parker)• Nikki Bell• Bill Crothers• Guy Hubball• Visna Lampasi• Craig Lardner• Fabienne Lesbros• Sue Moffatt• David Noble (1 November 2016 – 24

February 2017)• Sara Omer• Fiona Revell• Tim Richardson (Chair)• Lynette Ryals• Guy Strafford • Michelle Yun Wang

Executive Team

Responsible for the day to day management of CIPS• Carole Bain (1 November 2016 – 30 June 2017)• Duncan Brock• Andrew Coulcher• Jannine Edgar• Catherine Hill• David Noble – Group

CEO (1 November 2016 – 24 February 2017)

• Amanda O’Brien• Kate Tomlinson (1 June

2017 to date)• Gerry Walsh – Group

CEO (1 April 2017 wto date)

Secretary andregistered office

• Kate Tomlinson ACIS Easton House Easton on the Hill Stamford Lincolnshire PE9 3NZ

Name of organisation

• Chartered Institute of Procurement & Supply

(CIPS)

Company registration number

• RC000876

Charity registration number

• 1017938

Auditors

• BDO LLP, Two Snowhill, Birmingham, B4 6GA

Bankers

• Australia & New Zealand Bank, Australia and New Zealand

• Barclays Bank PLC, UK• First National, South Africa• HSBC, Hong Kong• OCBC, Singapore• Standard Chartered,

UK/Bangladesh

Actuaries

• Capita PLC• Hymans Robertson LLP

Solicitors

• Buckles Solicitors, LLP• Gowling WLG (UK) LLP• Hewitsons LLP• Keystone Law Ltd

Reference and Administration

• 2016: Refers to financial year 1 November 2015 to 31 October 2016



As of 31 October 2017, the investment portfolio’s main fund (Reserve account) had returned at a rate of 10.09% in the last 12 months compared to 17.60% in the previous year. The benchmark figure is 10.33% compared to an investment portfolio return of 9.00% (annualised since inception), giving an excess return of negative 1.33% which is based on similar sized companies.

The last four years returns areas follows:

Going Concern Statement

The accounts have been prepared on the basis that CIPS will continue as a going concern.

Auditors

All of the current Trustees have taken all of the steps they consider necessary to make themselves aware of any information needed by the Group’s auditors for the purpose of their audit and to establish that the Trustees are aware of that information. The Trustees are not aware of any relevant audit information of which the auditors are unaware. This report was approved and authorised by the Board of Trustees and signed on its behalf by:

Tim Richardson FCIPSChair of the Global Board of Trustees

Date: 8 June 2018

Fund£ at

31/10/172017 2016 2015 2014

Reserve account

3,646,322 10.09% 17.60% 1.34% 3.00%

Educational fund

185,668 10.10% 16.74% (1.14)% 5.77%

The Trustees are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Charity law requires the Trustees to prepare financial statements for each financial year in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under charity law, the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and charity and of the incoming resources and application of resources, including the income and expenditure of the group for that period.

In preparing these financial statements, the Trustees are required to:

• select suitable accounting policies and then apply them consistently;• make judgements and accounting estimates that are reasonable and prudent;• state whether applicable UK Accounting Standards have been followed, subject to any material

departures disclosed and explained in the financial statements;• prepare the financial statements on the going concern basis unless it is inappropriate to

presume that the charity will continue in business.

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charity’s transactions and disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Financial statements are published on the charity’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the charity’s website is the responsibility of the Global Board of Trustees. The Global Board of Trustees’ responsibility also extends to the ongoing integrity of the financial statements contained therein.

All of the current Trustees have taken all the steps they consider necessary to make themselves aware of any information needed by the Group’s auditors for the purpose of their audit and to establish that the Trustees are aware of that information. The Trustees are not aware of any relevant audit information of which the auditors are unaware.

This report was approved and authorised by the Global Board of Trustees and was signed on its behalf by the Chair of the Global Board of Trustees:


Date: 8 June 2018

Statement of Trustees’ResponsibilitiesPertaining to the Annual Report


Opinion

We have audited the financial statements of The Chartered Institute of Procurement and Supply (“the Parent Charity”) and its subsidiaries (“the Group”) for the year ended 31 October 2017 which comprise the consolidated statement of financial activities, the consolidated balance sheet, the consolidated cash flow statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:• give a true and fair view of the state of the

Group’s and of the Parent Charity’s affairs as at 31 October 2017 and of the Group’s incoming resources and application of resources for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Charities Act 2011.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group and the Parent Charity in accordance with the ethical requirements relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions related to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:• the Trustees’ use of the going concern basis of

accounting in the preparation of the financial statements is not appropriate; or

• the Trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group or the Parent Charity’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The other information comprises the information included in the Trustees Annual Report, other than the financial statements and our auditor’s report thereon. The other information comprises: Introduction from the Chief Executive Officer and the Trustees Annual Report. The Trustees are responsible for the other information.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

IndependentAuditor’s Reportto Trustees of The Chartered Institute of Procurement and Supply


In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Charities Act 2011 require us to report to you if, in our opinion;• the information contained in the financial

statements is inconsistent in any material respect with the Trustees’ Annual Report; or

• adequate accounting records have not been kept by the Parent Charity; or

• the Parent Charity financial statements are not in agreement with the accounting records and returns; or

• we have not received all the information and explanations we require for our audit

Responsibilities of Trustees

As explained more fully in the Statement of Trustees’ Responsibilities, the Trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Trustees are responsible for assessing the Group’s and the Parent Charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the Group or the Parent Charity or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.

This report is made solely to the Charity’s Trustees, as a body, in accordance with the Charities Act 2011. Our audit work has been undertaken so that we might state to the Charity’s Trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Charity and the Charity’s Trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located at the Financial Reporting Council’s (“FRC’s”) website at:

https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Kyla Bellingall (Senior Statutory Auditor) For and on behalf of BDO LLP, statutory auditorBirmingham

Date: 8 June 2018

BDO LLP is eligible for appointment as auditor of the charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).


For the year ended 31 October 2017

Unrestricted Pensions Restricted Total Total Notes Funds Reserve Funds Funds Funds 2017 2016 £k £k £k £k £k

INCOME FROM Investments (3) 204 - - 204 115

Charitable Activities Membership and ProfessionalDevelopment, Subscriptions & Fees 12,180 - - 12,180 12,513Corporate Business 11,059 - - 11,059 11,344Magazine, conferences and sponsorships 1,858 - - 1,858 1,449Other Income 259 - - 259 530Other Trading Activities 1,257 1,257 1,745

Total Income 26,817 - - 26,817 27,696

Expenditure Charitable Activities (5) 24,915 - 21 24,936 25,542

Total Expenditure 24,915 - 21 24,936 25,542

Net Income/(Expenditure) beforeinvestment gains 1,902 - (21) 1,881 2,154Net gains on investments (12) 306 - - 306 239Transfer between funds (17) (879) 748 131 - -

Net income 1,329 748 110 2,187 2,393Pension Scheme Actuarial Gain/(Loss) (10) - 86 - 86 (1,774)

Net Movement in Funds 1,329 834 110 2,273 619 Reconciliation of Funds Balances Brought Forward (17) 4,052 (874) 98 3,276 2,657

Balances Carried Forward 5,381 (40) 208 5,549 3,276 All items above derive from continuing operations.There are no recognised gains or losses other than those stated above.The notes on pages 30 to 50 form part of these accounts.

Group Statement of Financial Activities



CIPS Group and Charity Balance Sheet as at 31 October 2017

Group Charity Notes 2017 2016 2017 2016 £k £k £k £k Fixed Assets Tangible Assets (11) 1,667 1,799 1,603 1,723 Listed Investments (12) 3,956 2,475 3,956 2,475

Total Fixed Assets 5,623 4,274 5,559 4,198

Current Assets Stock 90 48 – - Debtors – Short Term (14) 6,026 6,780 7,858 5,739 Debtors – Long Term (14) – - 144 210 Short Term Deposits 3,017 2,204 2,276 1,864 Cash at Bank 1,798 2,973 925 1,859

Total Current Assets 10,931 12,005 11,202 9,672

Current Liabilities Creditors (15) (10,965) (12,129) (10,580) (8,772)

Total Current Liabilities (10,965) (12,129) (10,580) (8,772)

Net Current (Liabilities)/Assets (34) (124) 622 900

Total Net Assets excluding Pension 5,589 4,150 6,181 5,098Defined Benefit Pension Scheme (Liability)/Asset (10) (40) (874) (40) (874)

Total Net Assets/(Liabilities) 5,549 3,276 6,141 4,224

Represented By Restricted Funds (17) 208 98 208 98 Unrestricted Funds (17) 5,381 4,052 5,973 5,000 Pension Reserve (17) (40) (874) (40) (874)

Total Net Reserves 5,549 3,156 6,141 4,224

The financial statements were approved and authorised for issue by CIPS Global Board of Trustees and were signed on its behalf on

The notes on pages 30 to 50 form part of these accounts.


Guy Strafford FCIPSGlobal Board of Trustees


Group Cash Flow Statement for the year ended 31 October 2017

Notes 2017 2016Cashflows from Operating Activities £k £k

Net Cashflow from Operating Activities (18) 681 1,972

Cashflows from Investing ActivitiesReturns on Investments & Servicing of FinanceInterest Received 82 36Dividends 122 79Purchase of Tangible Fixed assets (11) (72) (189)Purchase of Investments (12) (1,175) (1,027)Sale of Investments (12) – 21

Net cash provided by (used in) investing activities (1,043) (1,080)

Change in cash and cash equivalents in the reporting period (18) (234) 892

Notes 2017 2016 £k £k

Cash and cash equivalents at the beginning of the reporting period (18) 5,177 4,285

Change in cash and cash equivalents in the reporting period (18) (362) 892

Cash and cash equivalents at the end of the reporting period (18) 4,815 5,177

The notes on pages 30 to 50 form part of these accounts.


Notes to the Financial Statements for the year ended 31 October 2017

1. Constitution

The Chartered Institute was incorporated on 28th September 1992 by Royal Charter. It is also a registered charity, number 1017938.

2. Accounting Policies

(a) Basis of Preparation

The financial statements have been prepared under the historical cost convention. The financial statements have been prepared in accordance with applicable Accounting Standards and comply with the requirements of the Statement of Recommended Practice, “Charities SORP (FRS 102)”.

The Group’s financial statements consolidate the financial statements of the Charity and its Subsidiaries for the year ended 31 October 2017.

(b) Income

Income represents amounts receivable in the ordinary course of business, and represents goods and services supplied in the period excluding VAT.

Membership subscription income is spread over the period during which services are provided to members.

Revenue from training activity is released during the month in which the training is delivered.

Revenues from issuing licenses for access to e-Learning facilities are spread over the period during which the facilities are expected to be accessed by the licensees.

(c) Resources Expended

Resources expended are included in the statement of financial activities on an accruals basis, and are allocated between Charitable Activity Costs and Governance Costs according to the actual spend for each category.

(i) Charitable Activity Costs

Charitable activity costs are those directly related to the objects of the Charity and are reflected in these accounts under the following headings: Membership and Professional Development; Corporate Training and Publications.

(ii) Basis of Cost Allocation

All directly attributable overheads are charged to the appropriate expense category in the SOFA. General overheads are allocated on the basis of turnover. Governance costs are made up of those costs incurred purely for the governance of the Charity, such as the Global Board of Trustees and audit costs.

(d) Liquid Resources

Liquid resources are those items that are readily convertible into cash at or close to their carrying values.


(e) Fixed Assets

On transition to FRS 102, the Group took the option of freezing its valuation and using that amount as the deemed cost.

A review for impairment of fixed assets is carried out whenever events or changes in circumstances indicate that the carrying amount of individual fixed assets may not be recoverable. All tangible assets are held by the charity for charitable purposes with a proportional charge for its use of assets being made to the subsidiary undertaking.

(f) Depreciation

Fixed Assets are depreciated so as to write off their cost over their estimated useful lives:• Fixtures & Fittings - 4 to 7 years straight line• Freehold Buildings - 50 years straight line• Computer Equipment - 4 years straight line• Motor Vehicles - 25% reducing balance• e-Learning Development - 3 years straight line

(g) Stocks

Stocks comprise goods for resale and are valued at the lower of cost and net realisable value.

(h) Operating Lease Rentals

Rentals payable in respect of operating leases are charged to the Statement of Financial Activities as incurred.

(i) Foreign Currency Transactions

The results of the overseas subsidiaries denominated in a foreign currency are translated into sterling at rates prevailing during the year (average rate); assets and liabilities are translated at the rates ruling at the end of the year. Translation differences are dealt with as an adjustment within Other Recognised Gains and Losses.

(j) Pensions

The Group operates a Defined Benefit Pension scheme which is closed to new entrants. Any increase in the present value of the liabilities of the scheme expected to arise from the current service of employees in the year is charged to the Pension Reserve within the Statement of Financial Activities. The expected return on the scheme’s assets and the expected increase during the year in the present value of the scheme’s liabilities are included in Pension Scheme Finance Costs. Actuarial gains and losses are recognised in the Pension Reserve within the Statement of Financial Activities after the surplus or deficit for the year. Pension scheme assets, to the extent they are considered recoverable, and pension scheme liabilities, are recognised in the Balance Sheet and represent the difference between the market value of scheme assets and the present value of scheme liabilities. Pension scheme liabilities are determined on an actuarial basis using the projected unit method and are discounted at a rate using the current rate of return on a high quality corporate bond of equivalent term and currency to the liability. In addition to the Defined Benefit scheme CIPS also make contributions to a Stakeholder Pension Plan. Contributions are charged to the Statement of Financial Activities in the period in which they fall due.


(k) Going Concern

The financial statements have been prepared on a going concern basis. The Group prepares an annual budget and monitors performance against it and forecasts for the balance of the financial year. It maintains reserves to meet unexpected obligations.

(l) Investments

Realised gains and losses on investments are calculated as the difference between sales proceeds and their cost, and are charged or credited to the Statement of Financial Activities in the year of disposal. Unrealised gains and losses represent the movement in market values during the year and are credited or charged to the Statement of Financial Activities based on the market value at the year-end.

(m) Restricted Funds

Where funds are received for purposes specified by a donor, the income is shown as restricted in the Statement of Financial Activities. Expenditure of the funds for the purposes specified is applied against such income or any balance brought forward. Any unexpended amount at the Balance Sheet date is carried forward as part of restricted funds.

(n) Designated Funds

The Institute’s Board of Trustees, at their discretion, may set aside funds to cover specific future costs. Such funds are shown as designated funds within unrestricted funds. Where the Board of Trustees decides that such funds are no longer required for the purposes intended, they may be released by transfer to general unrestricted funds.

(o) Liabilities

Liabilities are recognised when there is a present obligation arising from a past event that will require the transfer of economic benefit to settle the obligation.

(p) Judgements in applying accounting policies and key sources of estimation uncertainty

In preparing these financial statements, the Trustees are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from those estimates and underlying assumptions are continually reviewed.


The following are critical judgements that the Trustees have made in the process of applying the accounting policies: • Determining whether leases entered into by the

group, either as a lessor or a lessee are operating leases or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease-by-lease basis.

Other key sources of estimation uncertainty:• Tangible fixed assets (see note 11). Tangible

fixed assets are depreciated over their useful lives taking into account residual values where appropriate. The actual lives of these assets are assessed annually and may vary depending on a number of factors. In assessing asset lives, factors such as life cycle and maintenance programmes are taken into account. Residual value assessments consider issues such as the remaining life of the asset and project disposal values.

• Trade debtors (see note 14). At each reporting date, trade debtors are assessed for recoverability. If there is any evidence of impairment, the carrying amount of the debtor is reduced to its recoverable amount. The impairment loss is recognised immediately in the Statement of Financial Activities.

• Pensions costs (see note 10). The Defined Benefit Pension scheme obligations are based on actuarial assumptions such as discount rate, the expected rate of return on scheme assets, and mortality rates, which are extensively detailed in note 10.


3. Investment Income 2017 2016 £k £k

Dividends receivable from listed investments 122 79Interest receivable 82 36

204 115

4. Support Costs 2017 2016 £k £k

Staff 2,962 3,412Depreciation 100 224Other 3,112 2,832

6,174 6,468

Support Costs of £6,174k are in respect of the management, IT support, staff recruitment, welfare and training, financial administration and general overheads related to the premises at Easton House, Melbourne Australia, Pretoria South Africa and Dubai UAE.


5. Charitable Activity Costs 2017 2016 £k £k £k £k £k £k

Support As Other Inc & Pension restated Staff Depr’n Exch Loss Financial Costs Total TotalMembership and Professional Development,Subscriptions & Fees 1,994 - 4,276 2,850 9,120 7,645Corporate Business 3,374 - 6,217 2,604 12,195 13,369 Publications 61 - 1,269 434 1,764 1,438Other 180 - 851 286 1,317 2,539Governance costs (see note 6) 343 - 197 - 540 551

5,952 - 12,810 6,174 24,936 25,542 6. Governance Costs 2017 2016 £k £k £k £k Staff Other Total Total

Allocation of Management Costs 343 - 343 361Foundation - 10 10 -Trustees/ Congress Costs - 77 77 45Auditors Remuneration-Group-Audit - 70 70 101Auditors Remuneration-Group-Other - - - 4Audit Remuneration-Subsidiaries - 40 40 40

343 197 540 551

Governance Costs represent the proportion of staff and other costs relating to the strategic direction of the charity. They include audit fees, a proportion of overhead expenses and the costs of Trustees meetings.


7. Subsidiary Companies

CIPS Corporate Services Limited – No 02610367

The charity has a wholly owned subsidiary undertaking, CIPS Services Limited, incorporated in England and Wales. The principal business of the subsidiary is providing corporate training and related services to international corporates. The subsidiary has agreed to covenant all its profit to the Institute. All activities have been consolidated on a line-by-line basis in the SOFA. A summary of its trading result is shown below.

2017 2016 £k £k

Revenue 1,538 1,745Cost Of Sales (743) (861)

Margin 795 884Administrative Expenses (203) (216)

Net Profit before transfer 592 668Deed of Covenant Transfer to Charity 592 (668)

Net Profit - -

Assets 83 65Liabilities 83 (65)

Net Assets - -

Share Capital - -Profit & Loss Account - -

Net Reserves - -

The company has issued share capital of 2 ordinary shares of £1 each.


CIPS Australia Pty Limited – No ABN 32 111 330 262

CIPS Australia Pty Ltd commenced trading in January 2005. Incorporated within Australia, it is a wholly owned subsidiary of CIPS. The principal activities during the financial year were facilitating the servicing of membership for existing CIPS members situated in Australia and New Zealand, providing Australian businesses with company training related to procurement, and providing a programme of continuous improvement in professional standards. All activities have been consolidated on a line-by-line basis in the SOFA. A summary of its trading result is shown below. 2017 2016 £k £k

Revenue 1,771 1,578Cost Of Sales (754) (632)

Margin 1,017 946Administrative Expenses (838) (876)

Net (Deficit)/Profit 179 70

Assets 777 925Liabilities (1,515) (1,842)

Net Liabilities (738) (917)

Share Capital - -Designated Funds - -Profit & Loss Account (738) (917)

Net Reserves (738) (917)

The company has issued share capital of 2 ordinary shares of AUD$1 each.


CIPS Southern Africa Pty Limited – No 2009/022052/07

CIPS Southern Africa Pty Ltd commenced trading in April 2010. Incorporated within South Africa, 74% is directly owned by CIPS and the remaining 26% is ultimately controlled by CIPS. The principal activities during the financial year were facilitating the servicing of membership for existing CIPS members situated in Southern Africa, and providing South African businesses and individuals with company training related to procurement and providing a programme of continuous improvement in professional standards. All activities have been consolidated on a line-by-line basis in the SOFA.

A summary of its trading result is shown below: 2017 2016 £k £k

Revenue 2,555 3,025Cost Of Sales (896) (1,540)

Margin 1,659 1,485Administrative Expenses (1,379) (1,310)

Net Profit/(Deficit) 280 175

Assets 2,797 1,977Liabili

CIPS Annual Report and Accounts 2017 | CIPS...1017938), CIPS operates in accordance with its Charter...

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Transcript of CIPS Annual Report and Accounts 2017 | CIPS...1017938), CIPS operates in accordance with its Charter...