ROYAL COMMONWEALTH SOCIETY ANNUAL REPORT AND …

Charity No. 226748

ROYAL COMMONWEALTH SOCIETY

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 DECEMBER 2016


REFERENCE AND ADMINISTRATIVE DETAILS

AS AT 31 DECEMBER 2016

Charity Number

Operational address

Registered office

Trustees

226748

Commonwealth House, 55-58 Pall Mall, London SW1Y 5JH

Commonwealth House, 55-58 Pall Mall, London SW1Y 5JH

Trustees who served during the year and up to the date of this report were as follows:

CHAIR

TREASURER

Claire Whitaker

Bryan Cassidy

TRUSTEES

Principal staff DIRECTOR

Godfrey Hall David Ives Renee Horton-Coker Katherine Mathieson John Loughton Doug Tweddle Hannah Goodwin Linda Yueh Samantha Cohen Nusrat Pinky Lilani Michael Bostelmann

Michael Lake CBE

Bankers Courts & Co, 440 Strand, London, WC2R OQSNational Westminster Bank PLC, 208 Piccadilly, London, W1A 2DG

Investment Advisors Schroder & Co Ltd, 100 Wood Street, London, W1A 2DG

Auditors Saffery Champness LLP, Chartered Accountants71 Queen Victoria Street London, EC4V 4BE

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TRUSTEES’ REPORT


The Trustees present audited financial statements for the year ended 31 December 2016.

Reference and Administrative information set out on page 1 forms part of this Report. The financial statements comply with current statutory requirements, the Charities Act 2011 and the Statement of Recommended Practice - Accounting and Reporting by Charities (2015).

GovernanceThe Council, or governing board, of The Royal Commonwealth Society has remained largely stable with a committed body of active and well- admired trustees. At the turn of the year Michael Bostelmann, the Treasurer, who has given long and meritorious service to the Society announced his retirement and the trustees appointed Brian Cassidy in his place.

A Brief Summary of ActivitiesThe year 2016 has been an intense period, with a full programme of contemporary initiatives to complement the long established programmes for which the Society is well known. A key development in the year was securing agreement for a move to Quadrant House (to be renamed Commonwealth House) to establish a Commonwealth ‘Hub,’ the aim of which is to enhance cooperation between non- governmental agencies and between such bodies and the intergovernmental instruments of the Commonwealth. It is early days, but this development has attracted interest, has served to raise the positive profde of the Commonwealth and shows signs of adding new impact.

The Society has a historic role in organising and managing the centre point of the Commonwealth year, the annual celebration service held at Westminster Abbey. The major achievements in 2016 were to win the support of the BBC in filming this high profile event attended by Her Majesty the Queen, other Members of the Royal Family, the London diplomatic corps and a wide body of school children. The trustees were pleased to note that this Service, previously unfunded, is now in a stronger financial position with helpful grants from the FCO and from The Queen’s Trust. There remains a financial deficit but this was managed effectively. The Society organised, in cooperation with The City of London, a prestigious High Commissioners’ Banquet, held at the Guildhall. This event was attended by Her Majesty the Queen and proved to be highly regarded as an opportunity for High Commissions and the business community to network.

The 2016 Queen’s Commonwealth Essay Competition was a major success attracting a record number of entries from a majority of Commonwealth countries. The awards ceremony was hosted by Her Royal Highness The Duchess of Cornwall at Buckingham Palace. This competition continues to grow in all respects and the trustees regard it as a central plank for engaging with young people in the Commonwealth with issues of the day.

The Society has continued to lead in the development of gender equality. Through the Commonwealth Youth Gender Equality Network (CYGEN), it brings a youth focus to gender equality and new research on youth and gender based violence. The RCS retains a monopoly on the intersection of youth perspectives and gender equality but one that connects to the Commonwealth Secretariat’s own work in a complementary way. The continuing goal will be to ensure that Commonwealth decision making on gender equality issues is intergenerational. The Commonwealth Summit provides obvious opportunities for the RCS to connect dialogues within the Women’s Forum and the Youth Forum as RCS did in Malta, to ensure they are not held in isolation.

The Society will continue its work to raise awareness of the potential of the modern Commonwealth as a factor in the United Kingdom’s foreign policy post- Brexit and to reflect on the consequences for Commonwealth countries themselves. The work on Brexit so far includes pan- Commonwealth consultation on the challenges and opportunities for the whole Commonwealth associated with Brexit by means of Roundtable discussions with High Commissioners, the first taking place at Australia House and a further one planned at NZ House, and Commonwealth professional associations. An

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TRUSTEES’ REPORT


innovative Roundtable for Ambassadors at the House of Lords to raise Commonwealth profile beyond the Commonwealth diplomatic corps was also convened. It is intended that this cycle of focused events will continue in 2017.

The Queen’s Commonwealth Canopy is an innovative and high profile environmental project to preserve forest across the Commonwealth in the Queen’s name. It was launched at the Commonwealth Heads of Government Meeting in Malta in 2015 and has attracted dedications from 21 countries to date, including Australia, and is fast becoming a major influence. A high profile and successful reception highlighting the initiative was hosted at Buckingham Palace in the presence of The Queen in November 2016. The aim is for all Commonwealth countries to join by 2018 when the next Commonwealth Summit is hosted by the UK. The initiative demonstrates a non- political way of raising the profile of what the Commonwealth can do when it acts together.

The Society has partnerships with the Bar Council of England and Wales, and the Honourable Society of the Inner Temple and has run a series of seminars on Anti- corruption and Rule of Law for High Commissioners, including influential speakers such as David Green QC, Director of the Serious Fraud Office and Lord Mance of the Supreme Court, thereby facilitating the sharing of best practice across countries that share the common law tradition. The Society plans to continue this successful series.

RCS will continue a focus on LGBT rights through partnership and support to the Commonwealth Equality Network and the Kaleidoscope Trust and by contributing to ongoing Commonwealth dialogue. The goal will be to ensure that the Commonwealth network can be constructively used to advance equality for LGBT people. Funding has been obtained from the UK FCO to pursue our LGBT work in South Africa. Commonwealth Summit 2018 will be seen as a major opportunity to profile this work. The RCS will work with partners to ensure that Commonwealth civil society has a clear strategy for Commonwealth Summit 2018 in line with our objectives and to deliver policy asked in a palatable and non- confrontational way. It is likely that the Commonwealth People’s Forum, influencing media and the Foreign Ministers’ meeting, will be the main targets.

The RCS will continue research and provide recommendations to help assist improvements on ease of movement between Commonwealth members for countries such as Australia, Canada, New Zealand, India and South Africa. The RCS can add a unique value to the debate by exploring bilateral arrangements between Commonwealth members and finding achievable policy changes which affect youth, tourism, and business links. The goal is to improve ease of movement between Commonwealth states for mutual benefit.

The RCS NetworkThe Royal Commonwealth Society has an important but loosely arranged network of branches and affiliates. Some are long standing; others have been established over the years. Individually they reflect the diverse nature of the Commonwealth in terms of structure and focus, but collectively, they serve to endorse the values of the Commonwealth as expressed in the Charter and to support the overall aims and objectives on which the Society is grounded.

In furtherance of the agenda to strengthen the branches of the Society, an international meeting was held in October. This was well attended by representatives of branches throughout the Commonwealth and it was a popular opportunity to exchange views in a frank and lively forum. The year brought another new branch to its return in the form of the Baltic Hub, a Royal Commonwealth Society organisation centred on the Finnish Chamber of Commerce as an administration base. This addition to the family is proving to be a very active centre for extending the reach of the Queen’s Essay Competition and as a source of income to support the broader objectives of the Society. The Trustees will consider this development as a model case for further branch developments. Meanwhile, the establishment of a branch in Cyprus is well underway for implementation in 2017.

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The Society’s network of Associate Fellows continues to grow. This network of young people between the ages of 18 and 29 include winners of the Queen’s Young Leaders, a prestigious Commonwealth young leadership award of which the Society is a partner. The Associate Fellows are connected by an online platform to enable them to share their skills, knowledge and experiences, becoming a unique resource for each other and promoting the value of the Commonwealth.

FinancesDespite the deficit in the current year, the trustees recognise that the Society is in a stronger position having weathered transition over the previous year. The dominant challenge for trustees is to establish a feasible, predictable and resilient finance model. The trustees and executive are actively pursuing ideas and options to achieve this stability and remain confident that prevailing circumstances offer fertile opportunities for the Society.

Key Figures from the Financial StatementsExpenditure exceeded income in Unrestricted Funds by £255,621, resulting in an overall deficit of £232,081 for the year. At the year end there were Unrestricted Funds of £326,348 in readily realisable investments and cash.

Significant Activities Impacting on FinancesThere are none to report.

Any Factors Impacting on Future IncomeThere is no doubt that the Commonwealth has not maintained a reputation for relevance in recent times and this has had the effect of narrowing the base for non-governmental agencies seeking financial support. Flowever the recent Brexit referendum has altered the landscape and provided a new and potentially fruitful focus for the Society. The impact on governments, corporate and individual has, perhaps, yet to filter through, but, potentially, there will be increased interest in the Commonwealth amongst the public and as a golden thread in the foreign policies of governments and the entrepreneurial plans of commerce. The trustees anticipate that a new and productive era for the Commonwealth will emerge and that this will have a positive impact on funding.

Investment and Reserves PoliciesThere are two principal objectives defined by the trustees:

• That the Society should hold six to nine months of operating cost (approximately £450,000 - £650,000) in unrestricted revenues. This is the current position.

• That such revenues should be held in low risk investment, offering immediate access.

As of 31st December 2016, the Society held £513,484 in invested funds as a reserve. None of this sum is either restricted or designated and the revenues are available in full without the need for disposal of fixed assets.

The trustees note with satisfaction that the established reserves policy has been achieved and maintained throughout the year. This secures a solid position for the Society to present a reliable and well-managed reputation.

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TRUSTEES’ REPORT


Principle Risks and VulnerabilitiesThe primary risk is in the future of the Commonwealth itself. This is perceived to be a ‘medium’ risk position raised from ‘low’ in previous years

The reputation of the Society is its main asset. The trustees are confident that the integrity of the Society is strong and that it is regarded as an effective and versatile partner. However, earlier references to adverse media attention remain a concern.

Plans for the FutureThe trustees’ strategic purview extends out to Spring of 2018 and the Commonwealth Summit to be held in the UK. The objectives overall are to continue with the steady, positive direction achieved in 2016 and to build financial stability.

As a start point it is worth a reminder that the Spring of 2018 will be a crowded space for the Commonwealth with the annual celebration week in mid-March, the Commonwealth Games drawing attention to Australia in April, closely followed by the Commonwealth Summit itself. This juxtaposition will, inevitably, have impacts.

The decision to move the Summit cycle from Autumn to Spring will always conflict with Commonwealth Week and potentially with future Games.

The crucial agenda is the need to find the optimal arrangements that will encourage leaders to attend the Summit. If London is to be deemed a success it will be substantially based on the number and the profile of leaders present. It is, for example, crucial that India sees it as a priority. The trend reversal for leaders’ attendance that was achieved at Malta has to be maintained.

There will be what amounts to a 30 day focus on the Commonwealth and a well-organised and coordinated media plan is called for.

It is also worth noting that demands on non-governmental agencies that have some role to play in the three main sets of dates will be extraordinary.

A guiding star for us is that we will seek to find ways in which all our work can engage with young people. The principle work streams in 2017 will include:

• CYGENBuilding on the substantial progress made in connecting young leaders with the gender equality agenda and in utilising this innovative and important network to influence policy makers.The current phase of the CYGEN programme is funded by Australia.

• Commonwealth Young Leaders/Associate FellowsThe RCS has a ‘legacy’ responsibility to provide a continuing arena for Queens Young Leaders to engage with Commonwealth values as they mature. Additionally, through other connections, the RCS is building a body of young people who wish to be engaged. Collectively, this fast growing group are known as Associate Fellows. The emphasis in 2017 will be to expand this group in number and spread and to reinforce the proactive network established.

• Policy WorkThis division of RCS work seeks to address policy matters that have yet to be taken on by governments or that have stalled in the process.

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TRUSTEES’ REPORT


The established work on the consequences of Brexit (for the broader Commonwealth) will continue as circumstances evolve.We anticipate also that visa liberalisation in the Commonwealth will be a subject for research and recommendation. Whilst focused on Singapore and South Africa to supplement work already done on Australia and India, the context will be UK and Commonwealth-wide.Work will include assisting the Dublin branch to secure agreement for ‘all Ireland’ teams to compete at the Commonwealth Games and assisting the Brussels branch to plan for a presence post Brexit.The responsibility for acting as the APPG Secretariat is an important and influential role, committed at low cost but important as a persistent reminder for parliamentarians.

• EducationThere is a broad range of Commonwealth organisations engaged directly or indirectly in this arena. We will seek to find ways in which such effort can be better coordinated and in particular we will encourage the alumni to be inducted in the CYGEN/Associate Fellows scheme.We will also continue to develop the Queens Essay Competition, throughout the Commonwealth and elsewhere where there is interest, with the emphasis on growing and broadening participation and by raising profile. We anticipate that HRH The Duchess of Cornwall will take a formal role in this competition.

• EnvironmentWe will continue to support the Queens Commonwealth Canopy project. The twin emphasis will be to continue to grow the number of countries involved (from the current 21) whilst also developing the ‘value added’ agenda of information exchange, scholarships and so on.

• HubThe RCS will continue to act as the leading influence in promoting the vision behind the Commonwealth Hub. We are optimistic that, in 2017, we can develop a joint project with Hub identity.

• Celebration and ConveningThe RCS has the lead role in organising the annual celebration of the Commonwealth at the Abbey. This is a quasi-state occasion and involves considerable outlay in terms of human resource. Managing a high profile, televised and financially secure event is a high priority.In a similar vein, the RCS organises the annual High Commissioners Banquet, a high profile dinner now linked with the City.

• Branches/NetworkA strong network of branches and associated bodies, limited by purpose and coordinated by activity, leverages the best possible impact from our work. The Brussels branch, for example, is crucial to the profile of the Commonwealth once UK MEPs are no more. The branch structure will be expanded where there is interest and opportunity in the best interests of the Commonwealth.

• 2018 Commonwealth Summit EventsWe anticipate that a number of events or seminars might be included in the broader Summit agenda. To an extent the relevance of particular events will be influenced by the main themes set for the leaders retreat, however, at this distance the following might be contenders for the RCS to work on:

• A ‘stock take’ report of Commonwealth progress towards the Paris COP targets. This might be combined with a celebration of QCC progress.

• A Brexit/Commonwealth seminar to draw on input from countries and to set the scene for trade liberalisation and to summarise the views expressed in prior roundtables.

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TRUSTEES’ REPORT


• A Rule of Law youth conference in partnership with the Bar Council to engage this younger cohort with contemporary issues such as anti-corruption, gender and LGBT(Q2).

• A Commonwealth creative industries seminar to draw attention to the breadth, extent and potential for collaboration in the non-industrial sector.

• A financial services seminar to identify actions for areas such as correspondent banking, financial transparency and common regulation.

• A conference to consider the potential for Commonwealth defence and security cooperation covering, inter alia, cybersecurity and CVE in one extreme to cooperation in support of disaster relief at another.

• A significant event to celebrate common and binding cultural and sporting links. This to be heavily engaged with diaspora. The RCS has held successful food and drink fairs in the past and this might be a good, practical basis.

• An international branches programme to complement that organised by the RCS in 2016.

• A Trade and Technology Seminar in conjunction with the City of London Corporation, CWEIC and Worshipful Company of World Traders.

Organisation

The Summit programme overall has, in the past, placed heavy emphasis on collateral support from the non-governmental sector. Events and activities organised by such bodies add texture, substance and accessibility and contribute materially to the impression of overall success. The Society will seek to develop a close engagement in the planning for the Summit.

Overall we regard the key objectives for Commonwealth Summit 18 should be:• To draw the best possible attendance from leaders (e.g. India)• To finally and clearly identify and support the relevance of the modern

Commonwealth.• To lay the foundations for UK’s term of office.• To set the tone for a Commonwealth revival.• To ensure excellent public attention in the UK and throughout the

Commonwealth.

Arrangements for Setting PayThe Director receives salary levels in line with charity sector norms balanced by affordability. In 2017 the Society will introduce a basic level defined contribution pension scheme. The trustees consider that conditions of service are set at a decent level and in line with medians in the charity sector. All salary recommendations are approved by the Chair and the Treasurer and reported to trustees.

Governance and ManagementThe trustees routinely review appointments for relevance and experience and there is an established rotation and succession policy.

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TRUSTEES’ REPORT


Trustees Responsibilities

The Trustees are responsible for preparing the Trustees’ 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 and Wales requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and of the incoming resources and application of resources of the charity for that period. In preparing these financial statements, the Trustees are required to:-

• select suitable accounting policies and then apply them consistently;• observe the methods and principles of the Charities SORP;• 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

presume that the charity will continue in business.

The Trustees are responsible for keeping proper accounting records that 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 and the Charity (Accounts and Reports) Regulations 2008. They are also responsible for the prevention and detection of fraud and other irregularities.

By order of the Trustees.

Claire Whitaker

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INDEPENDENT AUDITORS’ REPORT

TO THE TRUSTEES OF


We have audited the financial statements of Royal Commonwealth Society for the year ended 31 December 2016 as set out on pages 11 to 24. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102.

Our audit work has been undertaken so that we might state to the Trustees 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 charity and the Trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of trustees and auditorsAs 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.

We have been appointed as auditors under the Charities Act 2011 and report in accordance with regulations made under that Act. Our responsibility is to audit and express an opinion on the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group’s and parent charity’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Trustees; and the overall presentation of the financial statements. In addition, we read all the financial and non-fmancial information in the Report of the Trustees to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statementsIn our opinion the financial statements

• give a true and fair view of the state of the group’s and parent charity’s affairs as at 31 December 2016 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.

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INDEPENDENT AUDITORS’ REPORT

TO THE TRUSTEES OF


Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters where the Charities Act 2011 requires usto report to you if, in our opinion:

• the information given in the Report of the Trustees is inconsistent in any material respect with the financial statements; or

• the parent charity has not kept sufficient accounting records; 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.

Saffery Champness LLPChartered Accountants Statutory Auditors 71 Queen Victoria Street London EC4V 4BE

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CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES


Note Un- 2016 2015Restricted restricted Total Total

£ £ £ £Income and endowments fromInvestments 2 16,409 16,409 17,367

Donations and legacies 3Supporter services - 61,880 61,880 272,714Public affairs programme 148,529 58,177 206,706 188,413Educational programmes 71,198 156,835 228,033 141,393

Other trading activitiesCommonwealth Club Ltd 9 - 137,468 137,468 135,904

Total 219,727 430,769 650,496 755,791

Expenditure onRaising funds 100,686 100,686 91,108

Commonwealth Club Ltd - 26,614 26,614 16,793

Charitable activitiesSupporter services - 41,735 41,735 43,011Public affairs programme 97,369 345,708 443,077 257,289Cultural events - 37,437 37,437 63,217Educational programmes 98,818 134,210 233,028 368,956

Total 5 196,187 686,390 882,577 840,374

Net (expenditure)/income 23,540 (255,621) (232,081) (84,583)before gains and losses on investments

Net (losses)/gains on investments

9 - 39,623 39,623 (12,705)

Net (expenditure)/income 6 23,540 (215,998) (192,458) (97,288)

Transfers between funds 13 - - - -

Net movement in funds 23,540 (215,998) (192,458) (97,288)

Reconciliation of fundsLund balances brought forward 13 159,308 542,346 701,654 798,942

Total funds carried forward 13 182,848 326,348 509,196 701,654

There were no other recognised gains or losses other than those stated above. Movements in funds aredisclosed in note 13 to the financial statements.

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BALANCE SHEETS


Note 2016 2015Group Society Group Society

£ £ £ £Fixed assets

Tangible assets 8 4,426 4,426 7,562 7,562Investments 9 513,484 513,584 458,234 458,334

517,910 518,010 465,796 465,896Current assets

Debtors 10 43,120 14,416 55,165 211,625Cash at bank and in hand 36,988 34,885 237,090 233,298

80,108 49,301 292,255 444,923

Creditors amount falling due within one year

11 (88,822) (77,520) (56,397) (79,532]

Net current assets (8,714) (28,219) 235,858 365,391

Total assets less current liabilities

509,196 489,791 701,654 831,287

Total net assets 509,196 489,791 701,654 831,287

FundsRestricted funds 13 182,848 182,848 159,308 159,308Unrestricted funds 13 326,348 306,943 542,346 671,979

509,196 489,791 701,654 831,287

BryanCassidy T rustee

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CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2016

2016 2015£ £ £ £

Cash flow from operating activities (200,029) (106,802)

Cash flows from investing activitiesPurchase of property, plant and equipment (855) (720)Dividends, interest and rents from investments 913 17,367

Net cash provided by investing activities 56 16,647

Change in cash and cash equivalents in theyear

(199,971) (90,155)

Cash and cash equivalents b/f 267,058 357,213

Cash and cash equivalents c/f 67,087 267,058

2016 2015Reconciliation of net (expenditure)/income to net cash flow from operating activities

£ £

Net expenditure for the year per the SOFA Adjustments for:

(192,458) (97,288)

Depreciation charges 3,991 3,778Losses/(gains) on investments (39,623) 12,705Dividends, interest and rents from investments (16,409) (17,367)Decrease in debtors 12,045 15,014Increase/(decrease) in creditors 32,425 (23,644)

(200,029) (106,802)

2016 2015Analysis of cash and cash equivalents £ £

Cash in hand 36,988 237,090Cash held by investment manager 30,099 29,968Total cash and cash equivalents 67,087 267,058

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NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 20161. ACCOUNTING POLICIES

a) Basis of preparation

The financial statements have been prepared under the historic cost convention, with the exception of listed investments which are included at their market value. The accounts (financial statements) have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued on 16 July 2014 and the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) and the Charities Act 2011 and UK Generally Accepted Practice as it applies from January 2016.

The accounts (financial statements) have been prepared to give a ‘true and fair’ view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a ‘true and fair view’. This departure has involved following Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued on 16 July 2014 rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005 which has since been withdrawn.

Royal Commonwealth Society constitutes a public benefit entity as defined by FRS 102.

b) Group financial statements

The financial statements consolidate the results of the Society and its wholly owned subsidiary Commonwealth Club Limited on a line by line basis. A separate Statement of Financial Activities, and income and expenditure account, for the charity itself are not presented because the charity has taken advantage of the exemptions afforded by FRS 102. The net result for the year for the Royal Commonwealth Society alone is a loss of £336,245 (2015: £106,791).

c) Incoming Resources

All incoming resources are accounted for when the charity has entitlement to the funds, receipt is probable and the amount is measurable. Where income is received in advance of a performance or other specified service it is deferred until the charity is entitled to that income.

All other income is accounted for on an accruals basis.

d) Fund Accounting

Unrestricted funds are available to use to further any of the purposes of the charity. Restricted funds are to be used for specific purposes as laid down by the donor. Expenditure which meets these criteria is charged to the respective funds.

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FOR THE YEAR ENDED 31 DECEMBER 2016

e) Expenditure on Raising Funds

Expenditure on funds relate to the costs incurred by the charity in inducing third parties to make voluntary contributions to it, as well as the cost of any activities with a fundraising purpose. Where information about the aims, objectives and projects of the charity is provided to potential beneficiaries, the costs associated with this publicity are allocated to charitable expenditure.

f) Going Concern

The Trustees have reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis in preparing the annual financial statements.

The financial statements of the Society’s subsidiary, Commonwealth Club Limited, are prepared on the break up basis as it is expected to cease trading in the year ending 31 December 2017. However this does not have a material impact on the operations of the Society, which continues to be a going concern as noted above.

g) Investment

Investments are shown in the balance sheet at their market value. The unrealised movement in market value from one year to another is recognised in the Statement of Financial Activities.

h) Resources expended and support costs

Resources expended are recognised in the period in which they are incurred. Resources expended include attributable VAT which cannot be recovered.

Support costs are those costs which have not been directly allocated to an activity of the society but nevertheless support these activities. Support costs have been allocated to the activities based on an estimate of the effort allocated to them on the following basis:

Fundraising costs 15%Supporter services 23%Public affairs programme 28%Educational programmes 34%

No support costs have been allocated to the activities of the Commonwealth Club Limited.

i) Depreciation

Fixed assets are depreciated on a straight line basis over their estimated useful lives as follows:

Furniture, equipment and IT 25%Fixtures and fittings 5%

j) Branches

The Society has associated autonomous branches throughout the United Kingdom and affiliated societies in the rest of the Commonwealth. The financial statements do not incorporate the financial statements of those branches.

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FOR THE YEAR ENDED 31 DECEMBER 2016k) Financial Assets

Financial assets are recognized in the charity’s balance sheet when the charity becomes party to the contractual provisions of the instrument.

Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs.Financial assets are derecognized only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

l) Financial Liabilities

Basic financial liabilities are initially measured at transaction price.

Financial liabilities are derecognized when, and only when, the charity’s obligations are discharged, cancelled, or they expire.

m) Taxation

No provision has been made for taxation as the Society is a public benefit entity which is exempt from UK direct taxation on its charitable activities. The trading subsidiary is subject to tax at the small companies rate, and any tax suffered is shown as a cost of generating funds within the subsidiary.

2. Investment income

2016 2015£ £

Dividends receivable and interest from investment funds 16,409 17,367

3. Income from charitable activities

Restricted Unrestricted 2016Total

2015Total

£ £ £ £

Supporters’ fees Public affairs meetings &

- 61,880 61,880 272,714

activitiesIncome from educational

148,529 58,177 206,706 188,413

programmes 71,198 156,835 228,033 141,393

Total income from charitableactivities 219,727 276,892 496,619 602,520

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FOR THE YEAR ENDED 31 DECEMBER 20164. Consolidated statement of financial activities - comparatives

Un- 2015Restricted restricted Total

£ £ £Income and endowmentsfromInvestments - 17,367 17,367

Donations and legaciesSupporter services - 272,714 272,714Public affairs programme 16,884 171,529 188,413Educational programmes 88,900 52,493 141,393

Other trading activitiesCommonwealth Club Ltd - 135,904 135,904

Total 105,784 650,007 755,791

Expenditure onRaising funds - 91,108 91,108

Commonwealth Club Ltd - 16,793 16,793

Charitable activitiesSupporter services - 43,011 43,011Public affairs programme 34,912 222,377 257,289Cultural events - 63,217 63,217Educational programmes 79,694 289,262 368,956

Total 144,606 725,768 840,374Net expenditure before gainsand losses on investments

(8,822) (75,761) (84,583)

Net (losses)/gains on . (12,705) (12,705)investments

Net expenditure (8,822) (88,466) (97,288)

Transfers between funds 18,028 (18,028) -

Net movement in funds 9,206 (106,494) (97,288)

Reconciliation of fundsLund balances brought forward 150,102 648,840 798,942

Total funds carried forward 159,308 542,346 701,654

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FOR YEAR ENDED 31 DECEMBER 2016

5. Total expenditure

C o s t o f S u p p o r te r P u b licg e n e ra t in g s e rv ic e s a ffa irs E d u c a tio n a l C u ltu ra l C o m m o n w e a lth 2 0 1 6 2 0 1 5

fu n d s p ro g ra m m e s p ro g ra m m e s e v e n ts C lu b T o ta l T o ta l

£ £ £ £ £ £ £ £

D ir e c t C h a r ita b leS ta f f a n d c o n su lta n ts c o s ts 5 4 ,2 7 5 2 7 5 ,7 8 4 120 ,211 2 3 ,8 5 0 4 7 4 ,1 2 0 4 0 6 ,5 0 8

A c tiv i ty s p e c if ic c o sts 3 ,1 3 5 - 2 3 ,0 7 5 12 ,5 5 4 3 ,4 3 9 2 5 ,9 5 5 6 8 ,1 5 8 133 ,311

A u d it fees - - - - - - - (1 ,0 0 0 )

L e g a l a n d p ro fe s s io n a l fees - - 5 9 ,7 1 0 12 ,032 4 ,1 6 7 2 3 8 7 6 ,1 4 7 2 2 ,7 4 0

O th e r a d m in is tra tio n e x p e n s e s 16 ,0 5 8 - 33 ,701 2 2 ,5 4 5 5 ,981 421 7 8 ,7 0 6 93 ,401

C o rp o ra tio n ta x - - - - - - 2 ,2 3 2

D e p re c ia tio n _ _ _ 3 ,991 _ _ 3 ,9 9 1 3 ,7 7 8

7 3 ,4 6 8 - 3 9 2 ,2 7 0 1 7 1 ,3 3 4 3 7 ,4 3 7 2 6 ,6 1 4 7 0 1 ,1 2 2 6 6 0 ,9 7 0

A llo c a te d s u p p o r t c o s ts (se e b e lo w ) 2 7 ,2 1 8 4 1 ,7 3 5 5 0 ,8 0 7 6 1 ,6 9 5 _ _ 1 8 1 ,4 5 5 1 7 9 ,4 0 4

T o ta l r e s o u r c e s e x p e n d e d 1 0 0 ,6 8 6 4 1 ,7 3 5 4 4 3 ,0 7 7 2 3 3 ,0 2 8 3 7 ,4 3 7 2 6 ,6 1 4 8 8 2 ,5 7 7 8 4 0 ,3 7 4

Support Costs 2016 2015£ £

Staff and consultants costs 57,391 27,430Premises 40,302 38,544Communication & IT 13,291 3,257Office supplies & other costs 17,734 32,013Financial costs 31,910 26,545Governance costs 20,827 51,615

181,455 179,404

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6. Net expenditure/(income) for the year

This is stated after charging/(crediting):2016 2015

£ £Depreciation 3,991 3,778Property operating lease rentals 38,757 36,773Auditors’ remuneration 6,500 6,700

7. Staff costs and numbers

Staff costs were as follows:

2016 2015£ £

Salaries and wages 494,828 430,740Social security costs 49,677 45,898

544,505 476,638

Incurred by the Club 96,008 80,277Incurred by the Society 448,497 396,361

544,505 476,638

The number of employees whose total earnings in the year (excluding employer pensioncontributions) fell into the bands below were:

2016 2015No. No.

£70,001 -£80,000 1 1

The average number of employees during the year was as follows:

2016 2015No. No.

Member services 0 0Public affairs programmes 6.2 4.7Educational programmes 5.2 4.1Fundraising costs 1.1 0.8Support costs 2.6 1.8

15.1 11.4

In addition to the staff costs incurred above, the Society also incurred costs of £735 in respect of consultants during the year (2015: £2,801).

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8. Tangible assets - Group

Office furniture and

equipmentComputerequipment Total

£ £ £Cost:At l January 2016 14,500 154,229 168,729Additions - 855 855As at 31 December 2016 14,500 155,084 169,584

Depreciation:At 1 January 2016 14,500 146,667 161,167Charge for the year - 3,991 3,991As at 31 December 2016 14,500 150,658 165,158

N et book value:At 31 December 2016 - 4,426 4,426

At 31 December 2015 - 7,562 7,562

Tangible assets - Society

Office furniture and

equipmentComputerequipment Total

Cost:At 1 January 2016 14,500 154,229 168,729Additions - 855 855As at 31 December 2016 14,500 155,084 169,584

Depreciation:At 1 January 2016 14,500 146,667 161,167Charge for the year - 3,991 3,991As at 31 December 2016 14,500 150,658 165,158

N et book value:At 31 December 2016 - 4,426 4,426

At 31 December 2015 _ 7,562 7,562

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9. Fixed asset investments - Group

2016 2015Group and Society

At market value£ £

Schroder - Charity equity fund 483,385 428,266Cash deposits 30,099 29,968

Group totalSociety only

513,484 458,234

Group investment in subsidiary 100 100

Society total 513,584 458,334

Cost of the above investments

Movement

390,871 375,375

As at 1 January 428,266 440,971Additions 492,426 -

Disposals (476,930) -Revaluation 39,623 (12,705)

At 31 December 483,385 428,266

The Society has a £100 investment in Commonwealth Club Limited which is a 100% ownedsubsidiary and is registered in England and Wales (company number 02283381). out below:

Its results are set

2016 2015

Commonwealth Club Ltd accounts£ £

Turnover 137,468 135,904Cost of sales (150,871) (121,889)Administrative expenses (659) 2,968Interest receivable 782 -

Finance cost (5,250) (5,250)Corporation tax - (2,232)

Profit for the year per accounts (18,530) 9,501

2016 2015

Commonwealth Club Ltd assets, liabilities and funds£ £

Assets 56,613 76,301Liabilities (204,680) (205,835)

Total Funds (148,067) (129,534)

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10. Debtors

Group2016 2015

Society2016 2015

£ £ £ £Trade debtors 37,149 50,376 8,445 9,421Amounts owed by group undertakings . _ _ 197,415Prepayments 5,971 4,789 5,971 4,789

43,120 55,165 14,416 211,625

The Society has made a provision of £167,569 to fully provide for the amounts owed byCommonwealth Club Limited.

. Creditors: amounts falling due within one year

Group2016 2015

Society2016 2015

£ £ £ £

Trade creditors 56,006 14,056 21,243 7,983Taxes and social security costs 11,911 14,458 35,372 43,666Other creditors 2,255 583 2,255 583Accruals and deferred income 18,650 27,300 18,650 27,300

88,822 56,397 77,520 79,532

12. Government grants

Unrestricted donations include £nil (2015: £132,718) in Canadian government grant funding. No conditions or contingencies were attached to the grant. Restricted donations include £71,818 (2015: £nil) in British government grant funding, as detailed in note 13. No other forms of government assistance have been received.

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13. Analysis of group net assets between funds

Restricted Unrestrictedfunds funds 2016 Total 2015 Total

£ £ £ £Tangible fixed assets - 4,426 4,426 7,562Investments - 513,484 513,484 458,234Current assets 182,848 (102,740) 80,108 292,255Creditors due within one year “ (88,822) (88,822) (56,397)

Net assets at the end of the year 166,348 326,348 509,196 701,654

14. Movement in fundsIncoming Balance

Balance at Transfers resources at 311 Jan between and gains on Outgoing Dec2016 accounts investments resources 2016

£ £ £ £ £Society

Restricted FundsCommonwealth Youth Exchange Council 111,807 4,398 (28,152) 88,053Queen’s Commonwealth Essay Competition Queen’s Young Leaders

19,335 - 30,000 (48,849) 486

Programme 28,166 - 36,800 (21,817) 43,149Observance Foreign and Commonwealth Office

76,711 (44,621) 32,090

LGBT - - 71,818 (52,748) 19,070Total restricted funds 159,308 - 219,727 (196,187) 182,848

Unrestricted funds:General funds 671,979 366,304 (731,339) 306,943Total unrestricted funds 671,979 - 366,304 (731,339) 306,943

Total Society funds 831,287 _________ - 586,031 (927,527) 489,791

Group

Restricted funds (a s d e ta ile da b o v e ) 159,308 - 219,727 (196,187) 182,848General fund 542,346 - 470,392 (686,390) 326,348Total Group funds 701,654 - 690,119 (882,577) 509,196

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Purpose of general fundsGeneral funds are unrestricted funds that the Trustees are free to apply in furthering the charitable objects of the Society.

Purposes of restricted fundsRestricted funds are funds provided to undertake specific projects of work. Restricted funds are carried forward from year to year until they have been applied for the purposes for which the income was received. At 31 December 2016 the Society had the following restricted funds:

The Queen’s Commonwealth Essay Competition - The Essay Competition is the oldest and largest writing competition open to young people to the age of 18. In 2016 it was renamed The Queen’s Commonwealth Essay Competition and was supported by a donation from the Queen’s Trust.

Queen’s Young Leaders Programme - The Society is a partner in this program providing support for the Alumni as well as mentoring via the Associate Fellows scheme. Funding was provided by the Queen Elizabeth Diamond Jubilee Trust.

Commonwealth Youth Exchange Council - In 2014 the Commonwealth Youth Exchange was merged into the Society, the funds transferred are retained specifically for youth and young adult programmes and the Teacher Exchange Programme.

Observance - During the year the Society took full responsibility for the Commonwealth Observance and other related events during Commonwealth Week. These funds are retained to meet these specific costs.

Foreign and Commonwealth Office LGBT - The Society is overseeing a programme of work to promote a Commonwealth approach to LGBT rights including diplomatic dialogues, support for civil society and legal research.

15. Related Party Transactions

The Trustees neither received nor waived any emoluments during the year (2015: £nil).

During the year, aggregate donations of £30,556 (2015: £1,350) were made by trustees of the Society.

During the year, the Director of the charity received remuneration of £78,000 (2015: £78,000) for services to the charity.

During the year, the Society received income of £185,000 (2015: £112,303) on behalf of Commonwealth Club Limited, and recharged costs to that company of £149,903 (2015: £104,360).

As at 31 December 2016, the Society was owed £nil (2015: £197,415) by Commonwealth Club Limited. A provision of £167,569 was made by the Society to provide in full for the balance owed by Commonwealth Club Limited, which includes a loan of £150,000 on which interest is charged at 3.5%. During the year, loan interest of £5,250 (2015: £5,250) was charged to Commonwealth Club Limited in respect of this loan.

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Documents

ROYAL COMMONWEALTH SOCIETY ANNUAL REPORT AND …