The Association of Accounting Technicians
Annual report and financial statements of the Group
for the year ending 31 December 2014
Overview
Strategic Report
Governance
Accounts
Overview
CONTENTS
OVERVIEW
02 Association of Accounting Technicians (AAT) in 2014
04 President’s foreword
06 Chief Executive’s review
08 Business plan in 2014
STRATEGIC REPORT
09 Trustees’ Report: Activity and impact review
17 Financial review
19 Key performance indicators
21 Looking to 2015
GOVERNANCE
22 Organisation and control
25Trustees’ Responsibilities Statement
ACCOUNTS
26 Independent Auditor’s report
28 Financial statements
28The statement of financial activities –
incorporating the income and expenditure account
29 Balance Sheets
30 Group cash flow statement
31 Notes to the financial statements
51 Members of Council
52 Honours and awards
The Association of Accounting Technicians Annual Report 2014
01
Overview
ASSOCIATION OF ACCOUNTING TECHNICIANS
(AAT) IN 2014
We are a professional
membership body
We award skills based accountancy
and finance qualifications
133,600
300,000
members and growing
800
computer based
assessments taken
We have members
across the globe
computer based assessments
taken each day
We support and develop our members
through more than 500 AAT training providers
500
Members in
100 countries
training providers
We have members in multiple industries
Public sector
25%
02
Private sector –
accountancy practice
18%
The Association of Accounting Technicians Annual Report 2014
Private sector –
non accountancy practice
48%
Voluntary, charity,
not for profit and other
9%
Overview
Strategic Report
We innovate with new and
enhanced products and services
7
new qualifications
launched in 2014
Governance
Accounts
Our approach to e-learning courses
is award wining
1 million
green light tests
taken to date
1
e-learning award
won in 2014
We attract new members
and students year on year
97%
of full members would
recommend AAT
How we attract new members
38%
of adults through national
press advertising
+45,000
Facebook followers
42,000
AAT e-learning courses are
taken every month in the UK
We have also turned our attention to government
+50
tax and accountancy government
consultations responded to
1
mention by the
UK Prime Minister
The Association of Accounting Technicians Annual Report 2014
03
We are lucky to have such
committed branch volunteers
who give up their time to offer
support to fellow members,
as well as all the other people
who help in promoting AAT
and the benefits it brings.
Rachel Banfield FMAAT
AAT President
133,600
members
£25.61m
turnover
Overview
Strategic Report
Governance
Accounts
President’s foreword
A STRONG
PROFESSIONAL VOICE
It is an absolute honour
to serve as President of
AAT and be part of this
fantastic organisation.
It is amazing to reflect that
we started 34 years ago
with just a few thousand
members – and now have
grown to 133,600 across
the world.
Dr Rachel Banfield FMAAT
AAT President
I feel proud to be part of AAT because it
genuinely impacts positively on both people
and business. This is either by offering
qualifications and courses that are open to
everyone regardless of previous experience
or educational attainment or by providing
well-trained people who can be trusted to
look after the finances of a business.
The dedication that our members put in is
testament to this. We are lucky to have such
committed branch volunteers who give up
their time to offer support to fellow members,
as well as all the other people who help in
promoting AAT and the benefits it brings.
The last few years have seen AAT take more
of a global focus. We are a member of the
International Federation of Accountants
(IFAC) and are representing the accounting
technician sector on a global scale. We are
also part of IFAC’s International Accounting
Education Standards Board and are involved
in the shaping and rewriting of standards,
ensuring the role of technicians is considered
at the highest level.
AAT has changed and evolved significantly
in the past 34 years and continues to develop
in a way that its members can be proud of.
As an organisation, we want to help our
members throughout their professional
journey – from those who may be school
leavers taking their first steps into accountancy
to those who have been in the finance
profession for a number of years. We also
recognise that we need to offer support
to people who may not be able to access
traditional classroom based teaching.
We continue to build on and develop
our e-learning, which has gained external
recognition for the support it provides.
The Association of Accounting Technicians Annual Report 2014
05
Chief Executive’s review
MORE THAN
A QUALIFICATION
On taking the reins at
AAT in April, I took over
a membership body
which is in great health,
both in terms of
membership numbers
and financial security.
Mark Farrar
AAT Chief Executive
The challenge we now have is to build on
this position and ensure AAT leads the way
in a rapidly changing world. We need to
be sure we are offering qualifications and
a membership package suitable for both
those looking to progress in a professional
finance career and those who may wish
to employ them.
2014 saw us take the first step on that
journey. In September we launched seven
new qualifications covering a wider range
of subjects, including bookkeeping and
business skills. We wanted to increase
our offering and give students a greater
opportunity to select from different sized
qualifications and courses to suit their
interests and circumstances, whilst knowing
they will benefit from the high quality
standards required by the AAT brand.
New qualifications and courses mean we
also need to make sure we have a range
of support services to help our members’
progress. We are continuing to develop
e-learning to assist with students,
members and tutors who are teaching
AAT qualifications. Levels of engagement
show these tools are highly appreciated
and we know they are highly regarded
from the number of awards they have won.
06
The Association of Accounting Technicians Annual Report 2014
We have also been turning our attention
to the Government and its agencies, ensuring
we are acting on behalf of our membership,
including training providers and employers,
by proactively shaping and influencing
policymakers’ proposals – responding
to over 50 consultations in 2014 alone.
Our work on apprenticeships continues to
gain traction with our report on The Value
of Apprentices being endorsed by the Prime
Minister, David Cameron. We also played a
pivotal role in successfully lobbying Her
Majesty’s Revenue and Customs (HMRC)
to reconsider proposed plans to take cash
from taxpayers’ bank accounts (Direct
Recovery of Debts) and introduce
independent oversight in the process.
This suggests we are being listened to
at the highest echelons of the Government.
We step into 2015 feeling confident and
looking forward to the year ahead. We have
lots of developments planned and AAT
is in a good place to deliver them.
We wanted to increase our
offering and give students
a greater opportunity to select
from different sized qualifications
and courses to suit their interests
and circumstances, whilst knowing
they will benefit from high quality
standards required by the
AAT brand.
Mark Farrar
AAT Chief Executive
Over
50
government consultations
7
new qualifications
Overview
BUSINESS PLAN
IN 2014
The full name of AAT’s parent charity is ‘The Association of
Accounting Technicians’, referred to throughout this report as
AAT. AAT is registered as a charity (no. 1050724) with the Charity
Commission for England and Wales and also a company limited
by guarantee registered with Companies House in England and
Wales (no. 1518983).
To do this AAT works to a three year business plan. The current
business plan sets out the overall actions and strategies for AAT to
deliver value for people, businesses and organisations, through the
achievement of our vision to put AAT at the heart of every business.
In 2014, our key deliverables were focused around:
•• Growth – expanding our core membership by increasing
recognition, creating demand, and maintaining a strong
and valued relationship with members.
AAT’s charitable objects which benefit the public are:
1. to advance public education and promote the study of the
practice, theory, and techniques of accountancy
•• Innovation – differentiating our products and services and the
way we deliver them.
2. (a) to prevent crime
•• Diversification – attracting people beyond our core membership,
with new AAT products.
(b) to promote the sound administration of the law for the
public benefit
by promoting and enforcing standards of professional conduct
amongst those engaged in accountancy, monitoring and
supervising their compliance with money laundering legislation.
•• Staying financially secure – managing our resources efficiently
and effectively and investing in services wisely to continue
to develop and progress.
The Trustees also confirm that they have referred to the guidance
contained in the Charity Commission’s general guidance on public
benefit when reviewing the Charity’s aims and objectives and the
planning of future activities.
The Trustees’ Report outlines how we performed against these
key outcomes.
1
1
2
Gr
o
1
Inn
ov 2
h
wt
Our key
deliverables
ia
ll y
4
se c
fic
nc
a ti
on
Fin a
4
ure
Staying financially secure
Managing our resources efficiently
and effectively and investing
in services wisely to continue
to develop and progress
08
Innovation
Differentiating our products
and services and the way
we deliver them
ion
at
Growth
Expanding our core membership
by increasing recognition, creating
demand, and maintaining
a strong and valued relationship
with members
The Association of Accounting Technicians Annual Report 2014
er
Div
si
3
3
Diversification
Attracting people beyond
our core membership, with new AAT products
Overview
Strategic Report
Governance
Accounts
Trustees’ Report
ACTIVITY AND IMPACT REVIEW
Despite the challenges faced in the marketplace, AAT’s membership continued
to grow strongly in 2014 by 2.6% to 133,600. This shows how people see the
value that AAT professional qualifications and membership adds to their careers.
We developed our suite of courses
and qualifications, launching seven new
qualifications in 2014 offering learners
greater choice and flexibility.
We also continued to build and develop
admired products and services with our
e-learning and social media activities
being recognised in awards.
1
How did we grow?
We developed our relationship with
training providers
The Regional Account Management team
brought 59 new training providers on
board during 2014. This is a total of 130
since the team was formed in 2012. The
team also focussed on developing new
relationships with non-traditional AAT training
providers. A third of new providers came
from sixth forms (which are using AAT as
an alternative to academic qualifications),
universities and adult education services
within local authorities (who are using AAT
to offer upskilling opportunities). We are
also engaging with training providers in the
Welfare to Work/Employability sector where
our short qualifications can be used to help
people on their journey into employment,
as well as also building relationships
with Local Enterprise Partnerships.
We attracted new people to AAT
by advertising on new channels
During 2014, we further optimised our
advertising spend across both online and
offline media. We introduced several new
mediums including advertising on London
Underground tube cars and television
advertising. The success of the television
campaign meant that we extended the
campaign beyond its usual time frame
to generate even more prospects.
We made it easier for potential customers
to contact us
The introduction of a live chat facility
has meant that prospective students
can contact AAT easily and get a response
instantaneously. In July, we also implemented
an extension of hours and are now open from
Monday to Thursday from 9am to 8pm and
from 9am to 5pm on Fridays. This has
enabled the Sales team to contact more
prospective students in the evenings, allowing
for people to have conversations at a time
more convenient to them.
By attracting new people to AAT, we are
offering people the opportunity to have
successful accounting and finance
careers. This also impacts on the public
as a whole because well-trained, competent
accountants mean people are buying
services they can trust.
We developed new and enhanced
services for AAT members
We marked the 30th birthday of AAT’s
branch network by engaging with a record
number of attendees – over 9,000 – at our
free branch continuing professional
development (CPD) events across the UK.
Over 1,000 members attended our flagship
Masterclass CPD events on key topics in
the sector. We also successfully introduced
a major new programme of study support
events and webinars to help our students
achieve success.
We continue to engage with our members
through social media. AAT’s Community
team organised three successful live Q&A
sessions on Facebook on topics relevant
to our membership. This included two
#MAATchat events, a Q&A session on
becoming a full member (MAAT) and an
AQ2013 chat, which focused on offering
advice on moving to the current qualification
from the old standards. The #MAATchat event
helped AAT reach its full membership
recruitment target in September. AAT was
cited at last year’s Memberwise conference as
number 1 amongst membership organisations
using social media, following an audit by
Deeson Member Communications.
The annual member survey shows members
are very satisfied with the membership
package. Some 87% of students gave a 7-10
rating (highest in five years), 77% of affiliates
gave 7-10 (highest in four years) and 81% of
full and fellow members (F/MAATs) gave 7-10
(the same as last year and remaining at its
highest in five years). Perception of value for
money for membership fees also remained
high with 82% of students, 75% of affiliates
and 85% of F/MAATs feeling their membership
fees were very good or good value for money.
AAT implemented changes to the work
experience requirements to help affiliates
to progress to full membership. Since the
recession, levels of affiliate membership
have continued to rise and so AAT carried
out research to see if there were potential
barriers to full membership. One area that
was identified was that the requirement
for 12 months’ work experience in an
accountancy role was an issue for people
starting out in their finance careers.
In response, in 2014 AAT changed the
requirements to be based on competencies
and prospective members need to show
how they have met them.
The Association of Accounting Technicians Annual Report 2014
09
Trustees’ Report
ACTIVITY AND IMPACT REVIEW CONTINUED
It is too early to judge whether the changes
to work experience requirements will enable
affiliates to move into full membership
more easily. However, the approach should
allow affiliates the chance to analyse their
competencies and potentially use them
to identify opportunities for further
professional development.
We highlighted the importance of ethical
behaviour in the profession
AAT continued to raise the importance of
ethical behaviour amongst our membership
and beyond. We received feedback from our
members asking for a simpler tool to help
them with their professional ethical
dilemmas. In response, we produced an
interactive Code of Professional Ethics with
an innovative look and feel, allowing users
to search for relevant support which relates
to their particular dilemma.
By producing complex material in an easier
to understand format, we help to ensure our
members behave ethically and comply with
AAT regulations and legislation. This has a
positive impact not only on AAT’s reputation
but that of the accountancy profession
as a whole.
The Public Relations team also carried
out a campaign looking at whether
ethical behaviour differs between
small and larger businesses.
We maintained standards in the profession
As the UK gears up towards its Mutual
Evaluation Report from the Financial Action
Task Force, the global standard setter, AAT
has continued to lead the accountancy sector
towards increased collaborative working
in this critical area. In addition to our own
regulatory activity, which includes reviews of
firms’ compliance, AAT’s Head of Conduct
and Compliance won a third term as
Chairman of the Accountancy Affinity Group
of the Anti-Money Laundering Supervisors’
Forum. Progress has been made across
the sector in a number of areas, including
the development of consistent policy to
be applied by all professional
supervisory bodies.
10
During 2014, the Regulation and Compliance
Board undertook a wholesale review of the
entire regulatory framework, culminating
in the approval of four key sets of new
regulations – AAT Regulations, Disciplinary
Regulations – Licensing Regulations and
Appeals Regulations, all of which are due
to be launched, with their supporting policy
frameworks, in 2015.
AAT saw a drop in the number of disciplinary
cases referred for investigation in 2014, with
a total of 80 cases received compared with
205 in 2013. The majority of the decrease
is accounted for by a positive change in
behaviours in members in practice, with
an increasing percentage renewing their
licence before the date of expiry. In total,
175 cases were closed in the year. Eight
cases were considered by a Disciplinary
Tribunal in 2014.
We continued to represent the accounting
technician sector on a global scale
AAT’s President was successfully
nominated to become a board member
of the International Accounting Education
Standards Board (IAESB). IAESB is a
separate organisation within the fold of
IFAC and develops guidance to improve the
standards of accountancy education around
the world. Suzie Webb, AAT’s Director of
Education, continues to act as a Technical
Adviser to the Board.
AAT’s Chief Executive, Mark Farrar, also
spoke at the World Congress of Accountants
(WCOA) about the role of accounting
technicians in the future.
AAT’s involvement with IFAC means we
are involved in shaping and rewriting
standards, ensuring the role of technicians
is considered at the highest level.
The Association of Accounting Technicians Annual Report 2014
We were acknowledged by senior
decision makers
In 2014, AAT played a pivotal role in
lobbying HMRC to reconsider proposed
plans to take cash from taxpayers’ bank
accounts (Direct Recovery of Debts),
raising the point that there was not enough
independent oversight in the process.
As a result of AAT’s and others’ efforts,
better safeguards will be put into place,
protecting innocent parties.
AAT responded to over 50 consultations
on tax and accounting matters during 2014.
We have structured ourselves internally to
be more adept at responding, ensuring we
are meeting the needs of our members in
raising issues with regulatory and policy
changes which may affect them.
Our report on the value of apprentices
was endorsed by the Prime Minister, David
Cameron, who commented: “Delivering
the best skills is a crucial part of our long
term economic plan for Britain. More
apprenticeships mean more opportunities for
young people, giving them financial security
and Britain a better future.”
AAT became part of the accountancy
trailblazer group designed to give employers
the opportunity to design apprenticeship
standards to meet their needs. AAT was
invited as a professional body to ensure that
those undertaking apprenticeships are able
to get professional accreditation.
AAT has also been included in the first
tranche of Tech Levels, which means
qualifications have employer support
and from 2016 will be included in
school performance tables.
These projects ensure our qualifications are
delivering for both employees and individuals,
now and in the future – essential for a
qualification and membership body.
Overview
Strategic Report
Governance
Accounts
After being made redundant,
Russell Hague decided to
retrain with AAT at the age of
46. He now works as a Finance
Manager and teaches the AAT
Accounting Qualification.
“I realised I needed a
qualification that was
recognised, affordable,
achievable and flexible with
a range of study options that
would open doors for me. AAT
has certainly opened doors –
doors that I never dreamt were
there for me.”
Russell Hague
Finance Manager
#MAAT chat
event in September helped AAT reach
its full membership target
87%
of students gave AAT a 7-10 rating
The Association of Accounting Technicians Annual Report 2014
11
Trustees’ Report
ACTIVITY AND IMPACT REVIEW CONTINUED
Michelle Fox is an AAT
Member in Practice (MIP)
and runs award winning
Fox Accountancy Services.
“The forum is an amazing
place not only to find
information, but also to
connect with others. The
members are such a great
crowd, with a wealth of
knowledge and such a
good sense of humour.
It’s as though I am working
in an office full of
people, some days!”
Michelle Fox
Fox Accountancy Services
No. 1
best use of social media
(cited at Memberwise conference)
12
The Association of Accounting Technicians Annual Report 2014
15
qualifications
Overview
2
Innovating with new and enhanced
products and services
AAT continues to develop its suite of award
winning e-learning. AAT’s e-learning offering
includes:
•• diagnostic (Greenlight) tests which give
students targeted feedback and allow
them to understand their strengths and
weaknesses
•• study support webinars where experts
work through particular problems
•• e-learning bite size modules on key
areas of difficulty in the curriculum
•• interactive PDFs that students can
use online or print out and keep
•• assessment briefings to introduce
students to assessment content.
To date, more than 1 million Greenlight tests
have been taken and over 900,000 hits have
been received on the e-learning materials.
In December, AAT picked up the Successful
Virtual Offering award at the Associations
Network awards. AAT won for its innovative
use of blended e-learning material to support
students through their studies and training
providers in their delivery of qualifications.
This recognises AAT’s innovative and
successful approach to providing additional
online support to both learners and tutors.
The education landscape is changing and
we have to recognise that learning takes
place in a variety of different ways. It is
important that as an awarding organisation,
we provide as much appropriate support as
possible to ensure that our qualifications are
successfully delivered.
Strategic Report
Governance
Accounts
As a result of training provider feedback,
we moved our assessments on to one
platform to make a more seamless user
experience. This means training providers
now log on to the same platform for both
computer based tests and computer based
projects, which has resulted in a much
quicker and easier user experience for
providers when running the assessments.
We also launched the AAT Diploma in
Accounting for New Zealand, working in
partnership with the New Zealand Institute of
Chartered Accountants (NZICA). The
qualification is based on the AAT Accounting
Qualification with units customised for New
Zealand’s financial environment.
Developing products and services for new
markets shows that AAT is seen as a leader
amongst technician bodies.
3
Diversifying our products and services
2014 marked a year of change for AAT
with an increase in our qualification portfolio.
We wanted to offer different qualifications
of different sizes and at varying levels
to enable learners to find a qualification
that suits their needs and ambitions.
We launched seven new qualifications
covering bookkeeping, tax and business
skills. These are designed to work in tandem
with our current portfolio, providing the
learner with shorter courses in skills for
a finance career with routes into the
AAT Accounting Qualification.
Council meeting, November 2014
In addition, AAT designed a short course
specifically for business to help with
developing essential accounting skills.
Around 20% of new businesses fail within
the first year so AAT is keen to support
this essential part of the UK economy.
Early indications show these new
qualifications are gaining traction and being
adopted by training providers. However,
it is too soon to really see the impact.
We established our non-core engagement
framework, which will allow us to build
greater relationships with individuals taking
qualifications other than the AAT Accounting
Qualification. This will enable us to offer
them support throughout their finance
and accountancy careers.
The Association of Accounting Technicians Annual Report 2014
13
Trustees’ Report
ACTIVITY AND IMPACT REVIEW CONTINUED
4
inancial security through effectively
F
managing resources in 2014
Staying financially secure
AAT continued to ensure the business
remains financially secure through: monthly
management account reporting; monitoring
of key performance indicators (KPIs); robust
budget setting and monitoring and control;
active management of investments; and
monitoring financial implications as part
of risk management procedures.
The impact of these activities has been
to ensure AAT remains financially robust.
This means we are well placed to sustain
the activities needed to support and grow
our membership and to invest in new
initiatives to ensure the existence of the
qualification for the future.
Surplus Protection Plan
AAT has a Surplus Protection Plan (SPP)
which may be invoked if certain financial or
other business trigger points are met. These
triggers are any month where there is a year
on year membership decline, or a year on
year total revenue decline, or a significant
shortfall on the budgeted revenues. The plan
involves the ring fencing of expenditure
scheduled for the latter part of the financial
year which will not be committed if the trigger
points materialise. The monitoring of trigger
points and budgets is undertaken by the AAT
Executive at monthly management meetings,
and revenue forecasts are updated and
reported to Council Members on a quarterly
basis. The purpose of the SPP is to initiate
corrective action aimed at safeguarding the
overall surplus for the year.
The following controls have been implemented
to support the delivery of our financial security
objectives, and to further enhance the value
for money we deliver for our members.
Measuring the financial impacts
of the risks faced by AAT
Council and the policy boards consider
and review the strategic risks faced by AAT
at each meeting they hold. They consider the
Financial security parameters
Council continued to monitor the key financial financial impact of these risks with a view to
making sure that AAT has adequate income
parameters used to measure the financial
reserves to meet these risks if they arise.
security of AAT, namely the achievement
Council has established and annually reviews
of a surplus on core activities and the level
the level of income reserves it feels AAT
of income reserves held by AAT. Further
needs both to provide for the financial impact
information on these measures is provided
in the Financial review section of the Strategic of any risks as they arise and to fund new
developments and initiatives.
Report on pages 17 and 18.
Further details on AAT’s reserves policy and
The impact has been to ensure AAT remains
the level of income reserves held by AAT
a robust and financially secure organisation.
at 31 December 2014 are provided on
pages 17 and 18.
14
The Association of Accounting Technicians Annual Report 2014
Sustainability
AAT understands its obligations towards
sustainability and environmental issues and
we want to build our members’ knowledge
on the key role accountants play in
supporting this. In 2015, we plan to develop
an organisation wide plan to enhance our
Corporate Social Responsibility credentials.
Overview
Strategic Report
Governance
Accounts
Akash Paul MAAT works
for Baker Tilly. He used AAT’s
practice assessments to help
him qualify as an accounting
technician and is now a
full member.
“Everything I needed was
on MyAAT. The online sample
assessments were great at
preparing me for the real
assessments and really
helped me to succeed.”
Akash Paul
Accounting technician
900,000
hits to e-learning materials
1 platform
for assessments (offering a better user experience)
The Association of Accounting Technicians Annual Report 2014
15
Trustees’ Report
ACTIVITY AND IMPACT REVIEW CONTINUED
Ousman Sawo is one of the
first Gambian students to
complete the AAT Access
qualification. He works as
a school administrator for
a UK charity that provides free
education for children from the
poorest Gambian families living
within a three mile radius of
the school.
“Not only those who work in
an accounting role can find
the qualification personally
and professionally useful.
Since completing the
qualification, I have been
able to apply savings to energy
bills and school stationery.”
Ousman Sawo
School administrator
30
years of AAT branches
16
The Association of Accounting Technicians Annual Report 2014
9,000
attendees at AAT branch events
Overview
Strategic Report
Governance
Accounts
Strategic Report
FINANCIAL REVIEW
Group operating results for the year
Despite what has been a challenging year
for the UK and the global economies we
have maintained a strong financial position,
which will enable us to continue to invest in
developing initiatives in order to meet our
business plan objectives whilst ensuring risk
reserves are maintained at a prudent level.
The financial statements on pages 28 to 30
are based on the results of the AAT Group.
The Statement of Financial Activities on page
28 shows a level of net incoming resources
before other recognised gains and losses of
£515,000 (2013: net incoming resources of
£1,234,000), or 2.0% (2013: 4.9%) of total
incoming resources. This surplus resulted
from the continued high levels of income
from computer based assessments of
£11,105,000 (2013: £11,048,000) and
effective cost control across the organisation.
See page 28 for further details.
The net movement in the unrestricted income
funds of the AAT Group, before the deduction
of the pension reserve arising under FRS 17,
was a decrease of £304,000 (2013: increase
of £1,784,000). As recorded in note 7 to the
financial statements the FRS 17 deficit increased
by £865,000 from £4,073,000 to £4,938,000
as of 31 December 2014, including assets
valued at £14,521,000 and liabilities valued at
£19,459,000. The increase is mainly due to the
reduction in bond yields towards the end of 2014
which are used to calculate the discount rate
applied in calculating the net present value of the
future liabilities of the pension scheme.
This means that the unrestricted income
funds of the AAT Group amounted to
£10,330,000 as at 31 December 2014
(2013: £11,499,000). Included in this
total was the net gain on investments
of £563,000 (2013: £1,009,000).
Review of AAT’s final salary pension scheme
A deficit valuation of £3.7 million made on
1 October 2013 was used as the basis to
calculate the repayment plan to pay off the
deficit. Payments of £1,300,000 were made
in 2014, and future payments of £300,000
per annum were agreed for each year from
2015 to 2023. The next triennial valuation
is due as of 1 January 2016.
For the purposes of financial reporting,
the valuation of the scheme is performed
using different discount rates. Further
details about the difference between the
two measures are provided in note 7.
Reserves policy
In accordance with Charity Commission
guidance, we annually review the level
of income reserves that we consider are
necessary to maintain the financial security
of AAT and at the same time fund its
business plan. Our reserves policy for
the year ended 31 December 2014 was
as set out below.
AAT’s definition of income reserves
Income or ‘free’ reserves are defined as
the total of net current assets and readily
realisable fixed asset investments. The
calculation of free reserves also takes full
account of the pension scheme liability.
Our income reserves are required to serve
two purposes, namely to mitigate risks and
to provide finance for new developments.
Risk and development reserves target
Council considers that the risk reserves held
by AAT should be maintained at a prudent
level of at least 25% of gross annual revenue
expenditure, with development reserves
being held of up to 10% of gross annual
expenditure. These levels are considered to
be in line with good financial governance and
mitigate the impact of key risks to which AAT
is exposed. When setting the target level for
reserves for the 2014 to 2016 budget,
Council considered these components and
the total income reserves required to cover
the risk and the development needs of AAT
and set target reserve levels of between
30% and 40% of gross annual revenue
expenditure over the three years.
This approach should ensure that the level
of risk reserves is sufficient to allow AAT
the breathing space it would require to
restructure its finances to cope with the
ongoing effect of a significant change in its
fortunes and to provide accessible funding
for the major developments planned.
Current level of actual income reserves
Our total income reserves amounted to
£7,851,000 or 31.2% (2013: £8,486,000 or
35.1%) of gross annual revenue expenditure
as at 31 December 2014, which compares
to the target level set by Council of between
30% and 40% (2013: 30% and 40%), or
£7,556,000 to £10,075,000 of gross annual
revenue expenditure.
Calculation of income reserves
Our calculation of income reserves is
equivalent to the free reserves defined by the
Charity Commission, with the two calculation
methods arriving at the same reserves level
of £7,851,000 as at 31 December 2014.
AAT Group’s total unrestricted income funds
as at 31 December 2014 were £10,330,000
after allowing for a reduction in reserves of
£4,938,000 arising from the deficit in our
final salary pension scheme as calculated
under FRS 17.
Going concern
Due to the reserves policy AAT has in place
and through consideration of the business
plan and financial projections for 2015 to
2017, the Trustees consider that there is
a reasonable expectation that the AAT
Group has adequate resources to continue
in operational existence for the foreseeable
future. Accordingly, we continue to adopt the
going concern basis in preparing the annual
report and accounts.
The Association of Accounting Technicians Annual Report 2014
17
Strategic Report
FINANCIAL REVIEW CONTINUED
Investment policy
AAT’s Investment Panel appointed Ruffer
LLP in May 2009 to manage our non-cash
assets and to achieve the investment policy
objectives outlined below. AAT currently
considers that a medium to long term
investment policy which aims at preserving
the capital value of the assets invested whilst
trying to achieve a real return on the assets
invested is wholly appropriate.
The investment of surplus cash in noncash deposits continues to be undertaken
after proper consideration of the risks and
returns involved and subject to appropriate
controls, including regular monitoring of
AAT’s investment managers by the
Investment Panel.
From time to time the Investment Panel
may seek independent professional advice
to assist it with major policy decisions, and
to review and report on performance. The
Investment Panel also seeks regular advice
from our investment managers, Ruffer LLP,
on the day to day management of our assets.
Based on AAT’s treasury policy as updated
and approved in 2014, any excess cash
should be placed in short term deposits and
held with approved institutions that have at
least an A- credit rating with an obvious
preference for higher credit rated institutions.
AAT has been favouring institutions with
higher ratings but has also been spreading
its financial risk by holding its funds in
different institutions, where possible.
As regards to ethical investment, it continues
to be AAT’s policy not to invest in companies
which deal in either tobacco or armaments.
Investment performance
Ruffer LLP’s overall objective is firstly to
preserve the capital we invest with them over
a rolling 12 month period, and secondly to
grow the portfolio at a higher rate (after fees)
than could reasonably be expected from the
alternative of depositing the cash value of
the portfolio in a reputable UK bank. As at
31 December 2014 AAT held £16.3 million
(2013: £10.7 million) with Ruffer LLP. This
18
was after investing a further £5 million
of AAT’s surplus funds with Ruffer LLP
during 2014.
The most important aspect of the Investment
Panel’s performance monitoring is to meet
regularly with Ruffer LLP in order to maintain a
good understanding of its strategic approach.
The Investment Panel monitors Ruffer LLP’s
performance at least quarterly in the light of
the volatility that has been experienced in the
investment markets since the last quarter of
2008. The investment portfolio performed
well mainly in the last two quarters of 2014
to deliver investment gains of £563,000
by the year end. The overall return was an
annualised return of +4.4% (2013: +10.7%)
net of management fees.
Principal funding sources and how
expenditure in the year has supported
AAT’s objectives
We receive our funding primarily from our
membership in the form of subscriptions
and assessment fees together with other
qualification income, such as income from
fees arising from the CPD courses we
organise for our members. The funding
received from members has then been
applied to support the delivery of the
assessments and members’ services offered.
Our expenses include the staff costs (of the
staff directly involved in delivering or
supporting the activities conducted by AAT)
other than those of the non-executive
Trustees (Council members) of AAT who
do not receive remuneration. Additionally:
marketing; website; magazine; information
and communication technology; office
accommodation; administration; compliance;
telephone; and printing and postage costs
are all incurred by AAT in providing and
supporting the services offered to
our members.
Funding of our branch network
AAT has 46 branches and one student
support group in Botswana, details of which
are available on request. All of our branches
operate under a Model Constitution. They are
funded out of central AAT funds.
The Association of Accounting Technicians Annual Report 2014
Identification and regular review
of risks to which AAT is exposed
AAT’s risk policy is to ensure that the level
of exposure to risk is regularly reviewed
taking into account the changing
environment. Opportunities to grow and
diversify are carefully researched in order
to assess their potential for risk. All new
policy developments being considered by the
boards include a risk assessment. AAT looks
to maximise opportunity whilst operating a
well-balanced regard for risk.
Council, its four main policy boards
(the Learning and Development Board, the
Members’ Services Board, the Regulation
and Compliance Board and the Resources
Board), the ATSL Board and our staff are
responsible for identifying, monitoring and
managing the risks to which AAT and its
subsidiaries are exposed. These risks are
formally recorded in a Risk Register and
those identified as potentially having the
most impact on AAT or its subsidiaries are
reviewed by the policy boards and Council
at each business meeting.
Key risks identified:
•• further reductions in public funding
adversely impacting our qualifications
•• the adverse impact on student
progression due to changing market
dynamics
•• competition from other bodies and
awarding organisations
•• the complexity of systems developments
•• failure to protect AAT’s network against
external threats.
A separate Risk Register is maintained
for AAT(SA), which is regularly monitored
by the Directors and staff of both joint
venture organisations.
While it is recognised that systems can
only provide reasonable, but not absolute
assurance that major risks have been
adequately managed, the Trustees are
satisfied that through the risk management
process established for AAT, the major risks
identified have been adequately managed.
Overview
Strategic Report
Governance
Accounts
Strategic Report
KEY PERFORMANCE INDICATORS
The activities and achievements underpinning the objectives of our
strategic business plan are measured by a series of KPIs. These
represent financial and non-financial numerical assessments
which check actual achievements against established targets or
benchmarks to provide a guide to whether we are progressing
satisfactorily in each discrete area and in overall terms. We
have summarised below what was achieved in 2014.
1
2
3
4
5
Growth in overall membership
Growth in overall membership
130,169
133,600
2013
2014
Growth through acquisition
Recruitment of new students
26,782
26,359
2013
2014
Growth through deepening
Students completing the final Level 4
of the qualification
6,642
6,674
2013
2014
Growth through acquisition
New MAATs recruited
3,389
3,170
2013
2014
Growth through deepening
Retention of students and affiliates
51,078
54,736
2013
2014
There has been an increase
in our membership numbers
of 2.6%. Whilst this is a slight
decline from the level of 2.9%
we achieved in 2013, it still
should be seen as a success,
indicating the number of students
who wish to study the AAT
Accounting Qualification and
those wishing to retain their
relationship with AAT.
There was a 1.5% decline in
new student recruitment in 2014
compared with 2013. Whilst it is
just a marginal decline, it is an
area AAT will look at in 2015.
There was a slight increase
in students completing final
Level 4 of the qualification.
This could be attributed to
students attempting to finish
the qualification under
AQ2010 standards before
the year-end deadline.
There was a marginal decline
in the number of new MAATs
recruited in 2014. This is also
an area that AAT will be looking
at in 2015.
The number of affiliates
increased by 4.5% from last
year. This has come about due
to increased communication
with affiliate members.
The Association of Accounting Technicians Annual Report 2014
19
Strategic Report
KEY PERFORMANCE INDICATORS CONTINUED
6
7
Growth through retention
F/MAAT membership renewal level
46,501
46,493
2013
2014
Growth through non-core qualifications
Non-core qualifications
8,342
2014
8
Financial security
Surplus of income over expenditure
£1.2m
£0.5m
2013
9
20
2014
Financial security
Levels of income reserves
£8.5m
£7.9m
2013
2014
The Association of Accounting Technicians Annual Report 2014
The number of members
continuing to stay with AAT
remains high, indicating
that people value their
membership status. The
overall percentage of retention
of F/MAATs stood at 92.9%,
being an increase of 0.3%
when compared with 2013.
This KPI indicates the number
of students taking a course
or qualification other than the
AAT Accounting Qualification.
It has been introduced in
2014 in line with our new
qualification offering.
The decrease in the level of
surplus in 2014 compared with
2013 has arisen primarily due
to an increase in staff costs;
an increase in marketing
campaigns aimed at improving
awareness of AAT and hence
our membership numbers; and
further development and
maintenance costs on the
business systems to improve
the services being provided
to our members.
The decrease in the level
of income reserves has
been brought about by the
£2.3 million increase in the
FRS 17 deficit valuation on the
closed defined benefit pension
scheme which offset the net
surplus and investment
gains generated.
The increase in the pension
scheme liability is explained
on page 36 to 38.
Overview
Strategic Report
Governance
Accounts
Strategic Report
Gr
o
s
se
es
Ed
an uc
d
h
wt
rat
e
r
po
ns
ib
ilit
s
f e lo
o
r
P ve
de
e
Re
po
es
h
nc
ac
s
pmiona
en l
t
Our key
deliverables
in 2015
C or
Meeting new regulatory requirements
A key priority in 2015 will be ensuring
all three levels of the AAT Accounting
Qualification meet changing regulatory
requirements and will take the opportunity
to ensure that the AAT qualification remains
innovative and retains market leadership.
This will involve the introduction of grading
and synoptic assessments to ensure that
the qualifications remain fully fundable and
recognised in the relevant performance
tables. The new qualification will be available
for first teaching from September 2016.
Currently we are engaging with training
providers and employers to ensure we
are delivering what the market wants.
We will be working hard to provide a smooth
implementation for training providers.
Pr
oc
e
pl
ion
at ills
sk
New business plan with a refocus
of our strategic objectives
Our new business plan has been operational
since 1 January 2015 and is built around
a refocus of strategic objectives covering
growth, education and skills, professional
development and reach. The business plan
is underpinned by sustainable operations of
people, processes, finance and corporate
responsibility. We will be reporting our
performance against these objectives
in the 2015 annual report.
Pe
o
LOOKING TO 2015
Fi
na
y
Review around alternative routes
We will be conducting a research project
into AAT’s alternative route offering to
see how best to shape it going forward.
The Association of Accounting Technicians Annual Report 2014
21
Governance
ORGANISATION AND CONTROL
Reference and administrative
details of the AAT Group
The full name of the parent charity is
‘The Association of Accounting Technicians’,
referred to throughout this report as AAT.
AAT is registered as a charity (no. 1050724)
with the Charity Commission for England
and Wales and also a company limited by
guarantee registered with Companies House
in England and Wales (no. 1518983).
AAT’s trading subsidiary ‘Accounting
Technicians (Services) Limited (referred to
throughout this report as ATSL) is a private
limited company registered with Companies
House in England and Wales (no. 03116873).
AAT and ATSL’s registered office is
140 Aldersgate Street, London EC1A 4HY.
Mike Evans, AAT Past President, Allan Ramsay, AAT Vice President 2014, Rachel Banfield, AAT President
The AAT Group includes a 50:50 share
in AAT South Africa NPC (AAT(SA)), a joint
venture company with the South African
Institute of Chartered Accountants (SAICA).
The joint venture AAT(SA) is a non-profit
company incorporated under the Companies
Act No. 71 of 2008 (no. 2008/023530/08).
Details of the Directors and senior staff
Members of Council, AAT’s governing body,
who held office during 2014 as Directors
and Trustees are detailed on page 51 of
the report. All are members of AAT. Daily
management of the charity is delegated
to AAT’s Chief Executive and other senior
members of staff; these details are set
out on page 51 of the report.
The Trustees are responsible for ensuring
that the Group acts only in furtherance of
AAT’s stated charitable objects in accordance
with our Articles of Association.
The Directors of ATSL are currently all
appointments from among the Trustees
and the Chief Executive of AAT.
The six Directors of AAT’s joint venture
company, AAT(SA), are the Chief Executive
of AAT; the Director of Finance of AAT;
Executive Director: Nation Building SAICA;
Executive Director: Members and Global
Alliances SAICA; and two independent
non-executive directors, two independent
non-executive directors: Financial
22
The Association of Accounting Technicians Annual Report 2014
Overview
Management Improvement Office of the
Accountant-General and the Executive
Head of Retail Operations, African Bank.
Recruitment and appointment
of new Trustees
The Trustees of AAT are appointed either
by election (up to 18) from among the
Association’s full or fellow members or by
being nominated (up to 12) by our sponsoring
bodies. In addition the senior office holders
of Council (the President, the Vice President
and the two most recent Past Presidents),
are ex-officio members of Council. Up to a
further four Trustees may be co-opted under
Article 46 of the Articles of Association. The
Vice President of AAT is elected by members
of Council in line with a formal process
approved in 2007.
Strategic Report
functions which it does not delegate;
however, it also oversees a framework of
delegation, with clear levels of authority,
which enables other matters to be delegated
to policy boards and the secretariat. Aside
from its formal meeting structure, Council
holds an away day on an annual basis,
normally in July, to provide a forum for
strategic discussion.
Governance
Accounts
Governance and internal control
AAT continues to pursue high standards of
governance based on the Good Governance
Code for the Voluntary and Community Sector
and the UK Corporate Governance Code.
Where applicable this guidance is taken into
account in managing the affairs of AAT.
As an important component of good
governance, AAT has in place a Code of
Council has in place a structure of boards and Conduct for Council members, which all
Council members are required to sign up to
panels enabling AAT to respond quickly to
on appointment. The Code, which was last
changes in the external environment and to
reviewed during 2012, is based on the Nolan
encourage the generation of new initiatives.
Committee’s seven principles of public life
Under this structure the policy boards are
accountable to Council. They implement policy and includes a mechanism for enforcing the
within a set framework and make decisions on Code. AAT holds a register of Council
Members’ interests in line with the Code’s
expenditure within the resources allocated to
principles of openness and honesty.
them by Council. The primary responsibilities
or ‘terms of reference’ of the policy boards and
Included within its governance structure AAT
AAT is sponsored by the Chartered Institute
the sub panels are reviewed and agreed by
has an Audit and Assurance Board, which
of Public Finance and Accountancy (CIPFA),
Council at least annually.
acts independently of the policy boards and
the Institute of Chartered Accountants in
reports directly to Council. The composition
The Chief Executive is responsible for
England and Wales (ICAEW), the Chartered
of the Board includes an independent
Institute of Management Accountants (CIMA) managing the day to day business of AAT,
member and its terms of reference are
and the Institute of Chartered Accountants of ensuring that staff operate effectively
based on guidance issued by the Financial
Scotland (ICAS). Sponsorship is non-financial. and efficiently. In addition, many of AAT’s
Reporting Council. The Audit and Assurance
members provide support, including
Each body nominates up to three members
Board’s responsibilities include reviewing on
facilitating and attending branch and CPD
who contribute their skills and expertise for
behalf of Council AAT’s financial reporting in
events and contributing to consultations
the Association’s benefit.
accordance with FRS 18 and confirming the
on a voluntary basis. The benefits from this
A framework for Council members’ learning
appropriateness of the accounting policies of
support cannot be overestimated in helping
and development is in place to provide all
AAT and its subsidiaries; internal control and
AAT achieve its objectives.
Council members with the opportunity to
risk assessment; and dealing directly, on
Currently the Board of ATSL, AAT’s subsidiary
develop their knowledge and skills, to help
behalf of Council, with the external auditors
company, is formed of two Directors and the
contribute effectively to the work of AAT
regarding the conduct of the audit.
Chief Executive of AAT. All decisions taken by
and to support them in their continuing
the Board are in line with the parent charity’s
learning and development. Induction is
objectives and any conflicts of interest are
a key element of the framework as is CPD.
managed and addressed within the Group’s
A learning and development day, which all
best interest.
Council members are encouraged to attend,
is held annually. Specialist training sessions
The aim of AAT(SA) is to provide a professional
for boards and panels have also been held
body and qualification for accounting
during the year.
technicians in South Africa and to regulate and
support, in the public interest, the technical
Organisational structure of the AAT Group
competence and professional standards of its
– how decisions are made
members. AAT(SA) is currently focusing on
AAT’s governing body is Council;
skills development and capacity building. The
all members are non-executive and are
Board of AAT(SA) is formed of staff from both
responsible for managing AAT’s business
AAT and SAICA and two independent
as set out under Article 51(1) of its Articles
of Association. Council met four times during non-executive directors.
2014. It has responsibility for certain specific
The Association of Accounting Technicians Annual Report 2014
23
Governance
ORGANISATION AND CONTROL CONTINUED
AAT has an Internal Auditor acting
independently of the external auditors,
undertaking a programme of internal control
reviews and reporting to the Audit and
Assurance Board on the effectiveness
of these controls and associated risk
management. The consideration of risk is
embedded within our business planning
process, and the Audit and Assurance
Board reports to Council at each of its
meetings on AAT’s key strategic risks.
Our employees
We have a fair and consistent approach to
recruitment which supports our commitment
to equal opportunities. All candidates are
assessed on their skills and experience
against the person specification for each role
to ensure that the right people are in the right
jobs to enable us to meet our performance
measurement targets.
AAT has taken part in the ‘Best Companies
to Work For’ survey since 2009. In 2014, this
resulted in us being credited with ‘Ones to
Watch’ status. The insight gathered from this
survey is used to develop initiatives aimed at
increasing employee engagement. Where the
business can support it AAT offers flexible
working and it also has a flexi-system in place
which most employees can benefit from.
Other matters
Political and charitable donations
AAT made no charitable donations during
2014 or in the prior year.
The performance management appraisal
process ensures employee contributions
to AAT’s business plan are measured on
a regular basis. The process also includes
a competency framework which supports
the values and strategic direction of AAT and
both of these components are considered
when awarding performance related salary
increases. We invest heavily in our
employees’ development, focusing on
individual needs identified through the
appraisal system plus organisation wide
programmes that support our business
plan objectives.
Rachel Banfield, AAT President
24
The Association of Accounting Technicians Annual Report 2014
Overview
Strategic Report
Governance
Accounts
Governance
TRUSTEES’ RESPONSIBILITIES STATEMENT
Policy on payment of creditors
It is the AAT Group’s policy to abide by the
terms of payment agreed with our suppliers,
either their standard terms or special terms
where agreed beforehand.
The Trustees (who are also Directors of AAT
for the purposes of company law) are
responsible for preparing the Trustees’ Report
and the financial statements in accordance
with applicable law and regulations.
Details of AAT’s advisers
The names and addresses of the third parties
who were the main advisers to the AAT Group
during 2014 were as follows:
Company law requires the Trustees to
prepare financial statements for each
financial year. Under that law the Trustees
have elected to prepare the financial
statements in accordance with United
Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting
Standards and applicable law). Under
company law the 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 charitable company
and the Group and of the incoming resources
and application of resources, including the
income and expenditure, of the charitable
Group for that period. In preparing these
financial statements, the Trustees are
required to:
•• Bankers
–– Lloyds Banking Group, Thavies Inn
House, 6 Holborn Circus, London
EC1N 2HP
–– Aberdeen Asset Investments Limited,
5th Floor, Edinburgh One, Morrison
Street, Edinburgh EH3 8BE
•• Solicitors
–– Edwin Coe LLP, 2 Stone Buildings,
Lincoln’s Inn, London WC2A 3TH
•• Auditors
–– Grant Thornton UK LLP, Grant
Thornton House, Melton Street,
Euston Square, London NW1 2EP
•• Investment Managers
–– Ruffer LLP, 80 Victoria Street,
London SW1E 5JL
•• select suitable accounting policies
and then apply them consistently
•• observe the methods and principles
in the Charities Statement of
Recommended Practice (SORP)
•• make judgments 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
charitable Group will continue in business.
The Trustees are responsible for keeping
adequate accounting records that are
sufficient to show and explain the charitable
company’s transactions and disclose with
reasonable accuracy at any time the financial
position of the company and enable them to
ensure that the financial statements comply
with the Companies Act 2006. They are also
responsible for safeguarding the assets of the
charitable company and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
The Trustees confirm that:
•• so far as each Trustee is aware, there
is no relevant audit information of which
the charitable company’s auditor is
unaware; and
•• the Trustees have taken all the steps that
they ought to have taken as Trustees in
order to make themselves aware of any
relevant audit information and to establish
that the charitable company’s auditor is
aware of that information.
The Trustees are responsible for the
maintenance and integrity of the corporate
and financial information included on the
charitable company’s website. Legislation
in the United Kingdom governing the
preparation and dissemination of financial
statements may differ from legislation in
other jurisdictions.
The Trustees confirm that in approving the
Trustees’ Report they are also confirming the
Strategic Report in their capacity as Directors
of the charitable company.
By order of the Council
Mark McBride
Director and Trustee
Chairman, Resources Board
12 March 2015
The Association of Accounting Technicians Annual Report 2014
25
Accounts
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF THE ASSOCIATION OF ACCOUNTING TECHNICIANS
We have audited the financial statements of the Association of Accounting Technicians for the year ended 31 December
2014 which comprise the Statement of Financial Activities for the Group, the Group and Parent Charitable Company
Balance Sheets, the Group Cash Flow Statement and the related notes. 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).
This report is made solely to the charitable company’s members, as a body, in accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company’s
members 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 charitable company and
its members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Trustees and Auditor
As explained more fully in the Trustees’ Responsibilities Statement set out on page 25, the Trustees (who are also the
Directors of the charitable company for the purposes of company law) are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law
and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing
Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/
scope/private.cfm.
Opinion on financial statements
In our opinion the financial statements:
•• give a true and fair view of the state of the Group’s and the parent charitable company’s affairs as at 31 December
2014 and of the Group’s incoming resources and application of resources, including the Group’s income and
expenditure, 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 Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Trustees’ annual report for the financial year for which the financial
statements are prepared is consistent with the financial statements.
26
The Association of Accounting Technicians Annual Report 2014
Overview
Strategic Report
Governance
Accounts
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report
to you if, in our opinion:
•• adequate accounting records have not been kept by the parent charitable company, or returns adequate for our
audit have not been received from branches not visited by us; or
•• the parent charitable company financial statements are not in agreement with the accounting records or returns; or
•• certain disclosures of Trustees’ remuneration specified by law are not made; or
•• we have not received all the information and explanations we require for our audit.
Jennifer Brown
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
12 March 2015
The Association of Accounting Technicians Annual Report 2014
27
Accounts
THE ASSOCIATION OF ACCOUNTING TECHNICIANS
STATEMENT OF FINANCIAL ACTIVITIES FOR THE GROUP (INCORPORATING THE
INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 DECEMBER 2014
Notes
2014
£’000
2013
£’000
2
227
186
21(i)
326
350
3
24,627
24,424
522
432
539
537
Income and expenditure account
Incoming resources
Incoming resources from generated funds
Investment income
Income from trading activities
Incoming resources from charitable activities
Subscriptions and fees
Other income
Incoming resources from joint venture undertaking
Project income
22
Membership and other income
22
106
69
Remove joint venture income
22
(645)
(606)
Total incoming resources
25,702
25,392
Resources expended
Costs of generating funds
118
(53)
4(i)
(154)
(110)
4(i), 21(i)
(85)
(214)
4(i)
(8,905)
(8,436)
4(i), (ii)
(14,218)
(13,565)
Regulation and compliance
4(i)
(1,340)
(1,154)
Governance costs
4(i)
(603)
(626)
(25,187)
(24,158)
Pension scheme finance costs
4(i), 7
Investment management costs
Trading activities expenses
Charitable activities
Learning and development
Members’ services
Total resources expended
Net incoming resources before other recognised gains and losses
Net movement in interest in joint venture undertaking
515
22
36
1,234
(56)
Other recognised gains and losses
Gains on investment assets
Actuarial losses on defined benefit pension scheme
12(iii)
7
Net movement in funds, including pension reserve
(1,169)
Fund balances brought forward
Fund balances carried forward at 31 December,
including pension reserve
563
(2,283)
18
1,009
(165)
2,022
11,499
9,477
10,330
11,499
Statement of total recognised gains and losses
The above Statement of Financial Activities, all of which are derived from continuing operations, includes all recognised
gains and losses for the year, as defined by Financial Reporting Standard No. 3. All income is unrestricted.
The notes on pages 31 to 50 form part of these financial statements.
28
The Association of Accounting Technicians Annual Report 2014
Overview
Strategic Report
Governance
Accounts
Accounts
THE ASSOCIATION OF ACCOUNTING TECHNICIANS
BALANCE SHEETS
AAT
(Parent charitable
company)
Group
Notes
2014
£’000
2013
£’000
2014
£’000
2013
£’000
Tangible assets
11
2,407
2,977
2,407
2,977
Investments
12
16,537
10,906
16,337
10,706
Investment in joint venture
22
Fixed assets
Total fixed assets
–
–
72
36
18,944
13,883
18,816
13,719
6
7
8
7
Current assets
Goods for resale
Debtors
13
4,922
5,286
4,662
5,160
Investments
14
1,637
6,140
2,010
6,471
Cash at bank and in hand
1,045
513
1,172
543
Total current assets
7,610
11,946
7,852
12,181
(10,787)
(9,637)
(10,828)
(9,671)
Net current (liabilities)/assets
(3,177)
2,309
(2,976)
2,510
Total assets less current liabilities
15,767
Liabilities:
Creditors: amounts falling due within one year
Creditors: amounts falling due after more
than one year
15
16
Total net assets before deducting pension liability
Defined benefit pension scheme liability
(572)
15,195
7
Total net assets after deducting pension liability
16,192
(657)
15,535
15,840
(572)
15,268
16,229
(657)
(15,572)
(4,938)
(4,073)
10,257
11,462
10,330
11,499
15,195
15,535
15,268
15,572
(4,938)
(4,073)
Represented by:
Unrestricted income funds
General reserves
Pension reserve
Total unrestricted income funds
7
18
(4,938)
(4,073)
(4,938)
(4,073)
10,257
11,462
10,330
11,499
All funds are unrestricted.
The notes on pages 31 to 50 form part of these financial statements. Approved by the Council on 12 March 2015 and
signed on its behalf by:
Dr Rachel Banfield
President and Trustee
Mark McBride
Chairman, Resources Board and Trustee
The Association of Accounting Technicians Annual Report 2014
29
Accounts
THE ASSOCIATION OF ACCOUNTING TECHNICIANS
GROUP CASH FLOW STATEMENT
Notes
2014
£’000
2013
£’000
1,580
1,536
Cash flow statement for the Group
Net cash inflow from operating activities
Returns on investments and servicing of finance
19
226
162
Capital expenditure
19
(570)
(793)
Capital investment and long term investments
19
(5,068)
(28)
Management of liquid resources
19
4,461
(1,308)
629
(431)
Increase/(decrease) in cash
Reconciliation of changes in resources to net cash inflow from
operating activities
Net incoming resources before revaluations
515
1,234
Depreciation charges
974
878
Loss on disposal of fixed assets
166
64
(1)
(Increase)/decrease in stocks of goods for resale
498
Decrease/(increase) in debtors
4
(1,134)
Increase in creditors
19
1,154
861
Pensions reserve funding deficit movements
19
(1,418)
(403)
(25)
(29)
(201)
(133)
(82)
194
Interest received
Investment income
(Decrease)/increase in rent reserve
Net cash inflow from operating activities
1,580
1,536
Reconciliation of net cash flow to movement in net funds
Increase/(decrease) in cash in the period
629
(431)
Cash used to (decrease)/increase liquid resources
(4,461)
1,308
Movement in net funds in the year
(3,832)
877
Net funds at 1 January
20
7,014
6,137
Net funds at 31 December
20
3,182
7,014
The notes on pages 31 to 50 form part of these financial statements.
30
The Association of Accounting Technicians Annual Report 2014
Overview
Strategic Report
Governance
Accounts
Accounts
NOTES TO THE FINANCIAL STATEMENTS
1. Statement of accounting policies
Convention
The financial statements are prepared in accordance with applicable accounting standards in the United Kingdom and
under the historical cost convention as modified by the inclusion of investments at market value, and comply with the
current Accounting and Reporting by Charities: Statement of Recommended Practice (the Charities SORP) as revised
and issued in March 2005 by the Charity Commission, and with the Companies Act 2006.
Consolidation of financial statements of subsidiary and joint venture undertakings
The consolidated financial statements consist of the financial statements of AAT, its active subsidiary, and the Group’s
share of interests in its joint venture. No separate Statement of Financial Activities has been presented for the charity
alone as permitted by section 408 of the Companies Act 2006. The total turnover of the charity is £25,618,000
(2013: £25,052,000). The net result of the charity after taking into account the actuarial losses on the defined benefit
pension scheme is a deficit of £1,205,000 (2013: surplus of £2,078,000).
AAT owns the whole of the share capital of Accounting Technicians (Services) Limited. The consolidated financial
statements have been prepared on a line by line basis with the results and net assets position at the balance sheet date set
out in notes 21(i) and 21(ii). The other subsidiary undertaking, Accounting Technician (Publications) Limited, was dormant
throughout the current and previous years.
AAT has accounted for the Group’s share of its joint venture company, namely AAT(SA), using the gross equity consolidation
method. The results and net assets position at the balance sheet date are set out in note 22. Branches are not consolidated
as they are not material to the Group.
Fund accounting
Unrestricted funds comprise accumulated surpluses and deficits on general funds that are available for use at the discretion
of the Trustees in the furtherance of the general objectives of AAT.
Recognition of income
Income attributable to the financial year is recognised as follows:
• student, full and fellow members’ subscriptions are accounted for over the period covered
by the subscription
• student, full and fellow members’ registration fees are accounted for over the period covered
by the registration
• assessment fees are accounted for when the assessments are contractually committed to
• investment income is accounted for over the period in which it is earned
• other contributions and receipts are accounted for according to the period specified or contracted.
Deferred income
Student, full and fellow member subscriptions are payable in respect of a rolling 12 month period and are credited
to income over the period to which they relate. The balance of this income that falls into the following year at the
year end is shown as deferred income (see note 15). No obligation exists to repay this or any part of it to student,
full or fellow members.
Resources expended
All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs
related to the category. A further analysis of this expenditure is given in notes 4 and 5.
Support costs are those costs incurred directly in support of the objects of the Group.
Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent
with use of the resources. Premises overheads and other overheads have been allocated on the basis of headcount.
Governance costs are those incurred in relation to the running of the Group and include strategic planning and attending
to the constitutional and statutory affairs of the Group.
The Association of Accounting Technicians Annual Report 2014
31
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
1. Statement of accounting policies (continued)
Foreign currency accounting policy
Foreign currency transactions in relation to AAT’s joint venture company AAT(SA) are valued at the average rate for the year
within the Statement of Financial Activities, and at the year-end rate within the balance sheet. Foreign currency gains or
losses are credited or charged to the Statement of Financial Activities as they arise.
Depreciation
The depreciation of fixed assets is charged on a straight line basis from the month that a fixed asset is first brought into use
in order to write off their cost less any residual value over the expected useful lives (or the remaining period of the lease for
leasehold improvements) which equates to the following rates:
Category
Rates applied
Plant and equipment
15.0% – 25.0%
Office furniture
10.0%
Leasehold improvements
Over the life of the lease
Membership database and finance system
12.5% – 33.3%
Website
33.3% – 50.0%
Other computer related items
20.0% – 50.0%
The impairment of fixed assets is reviewed annually and provisions made where necessary.
Assets under construction
Assets under construction are not depreciated until they are brought into use.
Capitalisation of equipment and development expenditure
All single purchases of less than £10,000 (incl. VAT) are written off in the year of purchase unless forming part of a more
comprehensive scheme where the total is £10,000 (incl. VAT) or more.
Expenditure, other than own staff costs, incurred by AAT relating to the development and implementation of online services,
e-learning and e-assessment and the development of AAT’s website and which is deemed to have a future economic
benefit is capitalised at cost. The depreciation of such expenditure is charged on a straight line basis over the estimated
useful economic life of the asset up to a maximum of three years.
Leased equipment
Rentals paid under operating leases are charged to revenue on a straight line basis over the terms of the leases.
AAT has provided fully for the estimated dilapidation costs relating to its leases on 140 Aldersgate Street over the remaining
terms of the leases; these were estimated at £154,917 as at 31 December 2014 (see note 15).
Rent reserve
In accordance with Urgent Issues Task Force (UITF) Abstract 28 Operating Lease Incentives and Statement of Standard
Accounting Practice (SSAP) 21, the rent free period incentive has been spread over the term of the lease.
Investments
Investments listed on a recognised stock exchange, including investment and unit trusts, are stated at mid-market value
at the balance sheet date. The Statement of Financial Activities includes the net gains and losses arising on revaluations
and disposals throughout the year. It is AAT’s policy to keep valuations up to date such that when investments are sold there
is no realised gain or loss arising. As a result the Statement of Financial Activities does not distinguish between the valuation
adjustments relating to sales and those relating to continued holdings as they are together treated as changes in the
investment portfolio throughout the year.
In the Company’s financial statements, investments in subsidiary undertakings are stated at market value in accordance
with the SORP. The investment in the joint venture is classed as a programme investment and is therefore stated at cost
less amounts written off.
32
The Association of Accounting Technicians Annual Report 2014
Overview
Strategic Report
Governance
Accounts
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
1. Statement of accounting policies (continued)
Goods for resale
Stocks of goods for resale are valued on the basis of cost, less any provision for diminution in value.
Cash and liquid resources
Cash, for the purpose of the cash flow statements, comprises cash in hand and deposits repayable on demand. Liquid
resources are current asset investments which are disposable without curtailing or disrupting the business and are either
readily convertible into known amounts of cash at or close to their carrying values. Liquid resources comprise short term
deposits of less than one year (other than cash).
Pensions
Normal contributions to our final salary pension scheme ceased during 2010. Contributions to our Group personal pension
scheme are charged to revenue according to the period to which they relate.
Scheme assets are measured at fair values. Scheme liabilities are measured on an actuarial basis using the projected unit
method and are discounted at appropriate high quality corporate bond rates. The net surplus or deficit, adjusted for
deferred tax, is presented separately from other net assets on the balance sheet. A net surplus is recognised only to the
extent that it is recoverable by the charity.
The current service cost and costs from settlements and curtailments are charged against operating surplus. Past service
costs are spread over the period until the benefit increases the cost. Interest on the scheme liabilities and the expected
return on scheme assets are included net in other finance costs/income. Actuarial gains and losses are reported in the
Statement of Financial Activities.
2. Investment income
Group
2014
£’000
2013
£’000
26
53
Dividends receivable from UK investments
201
133
Total
227
186
2014
£’000
2013
£’000
Full members’ subscriptions and fees
6,143
6,399
Student and affiliate members’ fees
7,067
6,642
13,210
13,041
Interest receivable
3. Subscriptions and fees
Group
Sub total subscriptions and fees
Paper based assessments
Computer based assessments
CPD events fees
Total
–
41
11,105
11,048
312
294
24,627
24,424
The Association of Accounting Technicians Annual Report 2014
33
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
4. (i) Analysis of total resources expended
Group
Other
£’000
2014
£’000
Staff costs
£’000
Depreciation
£’000
2013
£’000
Pension scheme finance costs
–
–
(118)
(118)
53
Investment management costs
–
–
154
154
110
Trading subsidiary expenses
–
–
85
85
214
Total
–
–
121
121
377
Learning and development
2,389
342
6,174
8,905
8,436
Members’ services (see 4(ii))
6,609
573
7,036
14,218
13,565
618
46
676
1,340
1,154
9,616
961
13,886
24,463
23,155
311
13
279
603
626
9,927
974
14,286
25,187
24,158
Cost of generating funds
Charitable activities
Regulation and compliance
Total
Governance costs
Total
Included in the amounts shown above are support costs totalling £4,800,000 (2013: £5,474,000) as shown in note 5.
4. (ii) Further analysis of members’ services
As members’ services incorporates several disciplines, a more detailed analysis of members’ services costs is given below
for further information.
The main items included under the heading of members’ services are:
Group
2014
£’000
2013
£’000
Services to members
2,611
2,125
Publicity and promotion
6,999
6,600
Influence and recognition
922
948
Accounting Technician magazine contract costs
821
773
2,865
3,119
14,218
13,565
Support costs
Total
34
The Association of Accounting Technicians Annual Report 2014
Overview
Strategic Report
Governance
Accounts
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
5. Support costs
Group
Chief
Executive’s
Office
£’000
ICT
£’000
Finance
and HR
£’000
Facilities
£’000
Global
£’000
Total
2014
£’000
Total
2013
£’000
Learning and development
21
895
600
85
106
1,707
2,023
Members’ services
36
1,501
1,008
142
178
2,865
3,119
3
120
80
11
14
228
332
60
2,516
1,688
238
298
4,800
5,474
2014
£’000
2013
£’000
7,959
7,595
Staff recruitment and training
560
557
Employer’s social security costs
882
835
Employer’s pension costs
526
410
9,927
9,397
Regulation and compliance
Total
6. Employees
Group
Staff costs
Salaries and wages
Total
Employee numbers
The average number of staff employed by AAT throughout the year was 218 (2013: 213).
Emoluments of senior staff
The number of employees whose total emoluments amounted to £60,000 or above for the year is as follows:
2014
No.
2013
No.
£60,001 – £70,000
5
4
£70,001 – £80,000
–
1
£90,001 – £100,000
1
1
£100,001 – £110,000
3
1
£110,001 – £120,000
1
2
£170,001 – £180,000
1
1
The Association of Accounting Technicians Annual Report 2014
35
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
6. Employees (continued)
The details of employees whose emoluments amounted to £60,000 or above for the year is as follows:
Employees
(excluding
Chief Executive)
Chief Executive
2014
£’000
2013
£’000
2014
£’000
2013
£’000
Salary
825
731
165
165
Bonus
21
18
5
5
6
10
–
1
852
759
170
171
Private medical insurance
Total
The Chief Executive changed on 31 March 2014. The ratio of the Chief Executive’s emoluments to the lowest paid employee
is 8:1.
All members of Executive are members of the Group Personal Pension Scheme. The former Chief Executive and two of the
six remaining members of the Executive have retained retirement benefits under the defined benefit pension scheme. The
combined employer contributions into the Group Personal Pension Scheme with respect to these seven senior staff for the
year amounted to £71,006 (2013: £63,754).
7. Pension arrangements
Deficit in scheme at beginning of the year
2014
£’000
2013
£’000
(4,073)
(4,311)
Movement in year:
Contributions
Other finance income/(costs)
1,300
118
456
(53)
Actuarial loss
(2,283)
(165)
Deficit in scheme at the end of the year
(4,938)
(4,073)
AAT operates both a closed final salary pension scheme and an ongoing Group personal pension scheme in order to
provide retirement benefits to its staff. The final salary pension scheme was closed to new members in June 2002 and
closed to future accrual with effect from 1 May 2010.
The Group personal pension scheme involves no commitment by AAT other than that of paying an agreed level of normal
contributions, currently set at a minimum of 2% of basic salary (the employee rate is a minimum of 1% of basic annual
salary). Contributions during 2014 were £522,136 (2013: £406,000), with contributions for 2015 budgeted at £564,160.
The administration of the final salary scheme is the responsibility of the Trustees of the scheme, and its assets are held
separately from those of AAT and managed professionally. Contributions to the final salary scheme are determined by
a qualified actuary on the basis of triennial valuations using the attained age valuation method to determine contributions
to the scheme.
Financial Reporting Standard 17 (Retirement Benefits) disclosure
The Financial Reporting Standard 17 (FRS) requires the actuary to use a different basis for determining the overall position
of the scheme than that adopted for the latest triennial valuation used by the Trustees and employer to set the pace of
scheme funding.
The FRS does not allow for the surplus or deficit to be spread over the period when recovery would normally take place.
This means that the total surplus or deficit must be declared in full at the balance sheet date.
36
The Association of Accounting Technicians Annual Report 2014
Overview
Strategic Report
Governance
Accounts
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
7. Pension arrangements (continued)
The main financial assumptions used at the past three balance sheet dates were as follows:
2014
2013
2012
Discount rate
3.5%
4.4%
4.6%
Retail price inflation
3.3%
3.6%
3.0%
Consumer price inflation
2.1%
2.4%
2.5%
Total pensions accrued prior to 6 April 1997
3.0%
3.0%
3.0%
Total pensions accrued between 6 April 1997 and 31 January 2007
3.7%
3.8%
3.6%
Total pensions earned from 1 February 2007
2.1%
2.1%
2.1%
Increases to pensions in payment
Pre-retirement increases for deferred pensions
Commutation allowance
2.1%
2.4%
2.5%
25.0%
25.0%
25.0%
The mortality assumption used is in line with the following tables: mortality before and after retirement: S1PXA mortality
tables projected by year of birth.
The scheme’s assets and liabilities were as follows:
Value at
31/12/14
£’000
Expected
rate of
return
Value at
31/12/13
£’000
Expected
rate of
return
Value at
31/12/12
£’000
Expected
rate of
return
Equities
7,905
7.4%
6,820
6.3%
5,777
6.5%
Bonds
4,381
4.4%
3,627
4.6%
2,921
4.1%
Alternatives
2,144
7.4%
1,819
6.3%
744
6.5%
Fair value of the scheme’s assets:
–
6.4%
–
5.3%
837
5.5%
91
4.0%
47
4.0%
816
4.0%
Property
Other assets
Present value of the
scheme’s liabilities
14,521
12,313
11,095
(19,459)
(16,386)
(15,406)
(4,938)
(4,073)
(4,311)
Deficit at 31 December
Analysis of amount debited to other finance costs
Group
2014
£’000
2013
£’000
Expected return on pension scheme assets
832
652
Interest cost on pension scheme liabilities
(714)
(705)
118
(53)
Net income/(cost)
The Association of Accounting Technicians Annual Report 2014
37
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
7. Pension arrangements (continued)
Analysis of amount of actuarial losses to be recognised after net incoming resources
2014
£’000
2013
£’000
Actual return less expected return on pension scheme assets
404
263
Experience gains and losses arising on the scheme liabilities
236
205
Changes in assumptions underlying the present value of the pension scheme liabilities
(2,923)
(633)
Actuarial loss
(2,283)
(165)
History of experienced gains and losses for the current and previous four years are as follows:
2014
2013
2012
2011
2010
Fair value of the scheme’s assets
14,521
12,313
11,095
10,084
10,304
Present value of the scheme’s liabilities
(19,459)
(16,386)
(15,406)
(13,360)
(12,607)
(4,938)
(4,073)
(4,311)
(3,276)
(2,303)
Scheme assets and liabilities
Amounts (£’000)
Deficit
Difference between the expected
and actual return on scheme assets:
Amount (£’000)
Percentage of scheme assets
404
263
401
(907)
285
2.8%
2.1%
3.6%
(9.0%)
2.8%
236
205
6
13
435
1.2%
1.3%
0.0%
0.1%
3.5%
Experience gains and losses on
scheme liabilities:
Amount (£’000)
Percentage of the present value of the
scheme liabilities
Total amount of actuarial (losses)/gains to
be recognised after net incoming resources
Amount (£’000)
(2,283)
(165)
(1,144)
(1,148)
663
Percentage of the present value
of the scheme liabilities
(11.7%)
(1.0%)
(7.4%)
(8.6%)
5.3%
38
The Association of Accounting Technicians Annual Report 2014
Overview
Strategic Report
Governance
Accounts
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
7. Pension arrangements (continued)
Cumulative actuarial gains and losses recognised in the Statement of Financial Activities
The history of the actuarial gains and losses recognised in the statement of financial activities since 2002
(the first year for which any such calculations took place) is as follows:
Gains/(losses)
recognised
£’000
Year
2002
516
2003
(175)
2004
(325)
2005
(575)
2006
(315)
2007
(252)
2008
1,539
2009
(1,639)
2010
663
2011
(1,148)
2012
(1,144)
2013
(165)
2014
(2,283)
Total
(5,303)
8. Council and Board expenses
AAT and Group
Total Council and Board expenses incurred in
respect of travel, accommodation and subsistence
2014
£
2013
£
227,073
250,782
No payments are made to members of Council for their services as charity Trustees or Directors other than the
reimbursement of expenses incurred in providing such services. None of the Trustees held any beneficial interest
in the share capital of any of our subsidiary companies.
The Association of Accounting Technicians Annual Report 2014
39
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
9. Legal and professional fees
Group
2014
£’000
2013
£’000
Audit fee – Charity: current year
33
31
Audit fee – Charity: prior year
27
–
Includes amounts charged by the auditors in respect of:
Audit fee – Subsidiary
5
4
Non-audit services
4
7
Total of charges by the auditors
69
42
Legal and professional fees of solicitors, consultants and other advisers
1,604
1,486
Total legal and professional fees
1,673
1,528
The 2014 audit fee includes £27,000 which relates to the additional audit costs incurred in the prior year when the business
systems were changed.
The non-audit services related to tax advice on membership benefits.
10. Net incoming resources
Group
2014
£’000
2013
£’000
Operating lease expense
553
679
Depreciation charges
974
878
Loss on disposal of fixed assets
166
55
Net incoming resources are stated after charging:
40
The Association of Accounting Technicians Annual Report 2014
Overview
Strategic Report
Governance
Accounts
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
11. Tangible fixed assets
AAT and Group
Leasehold Plant and
improvements equipment
£’000
£’000
Membership
database and
website
£’000
Other
Assets
computer
under
related
items construction
£’000
£’000
Total
£’000
Cost
At 1 January
726
636
3,563
656
Reclassification
–
51
–
–
Additions
–
32
321
217
–
570
Disposals
(36)
(335)
(286)
–
(657)
At 31 December
690
384
3,884
587
–
5,545
(517)
(401)
(1,217)
(520)
–
(2,655)
(84)
(59)
(760)
(71)
–
(974)
231
–
491
–
51
(51)
5,632
–
Depreciation
At 1 January
Charge for the year
Released on disposal
26
234
(575)
(226)
(1,977)
(360)
–
(3,138)
At 31 December 2014
115
158
1,907
227
–
2,407
At 31 December 2013
209
235
2,346
136
51
2,977
At 31 December
–
Net book value
All fixed assets are held for charitable use.
The Association of Accounting Technicians Annual Report 2014
41
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
12. Fixed asset investments
(i) AAT held the following investments at the year end:
AAT
Investment portfolio (see note 12(iii))
Investment held in net assets of Accounting Technicians
(Services) Limited (see note 21(i))
Total investments held
Group
2014
£’000
2013
£’000
2014
£’000
2013
£’000
16,337
10,706
16,337
10,706
200
200
–
–
16,537
10,906
16,337
10,706
(ii) AAT controls the following subsidiary undertakings:
Holding
Nature of
business
Country of
incorporation/
registration
Accounting Technicians (Services) Limited
(see note 21(i))
100%
£1 ordinary
shares
Private Limited
Company
England
and Wales
Accounting Technician (Publications) Limited
(see note 21(ii))
100%
£1 ordinary
shares
Dormant
England
and Wales
Association of Accounting Technicians (SA)
(see note 22)
50%
Association
incorporated under
section 21
(in South Africa)
South Africa
Investments in AAT (SA) have been fully impaired in previous years.
(iii) Investment portfolio
AAT and Group
2014
£’000
2013
£’000
14,662
9,856
Cash
1,675
850
Total
16,337
10,706
Investments on a recognised stock exchange
Investments on a recognised stock exchange are as follows:
Valuation at 1 January
9,856
9,151
Add: Acquisitions at cost
6,513
2,567
(2,270)
(2,871)
Less: Disposals
Net gains on revaluation
Market value at 31 December
42
The Association of Accounting Technicians Annual Report 2014
563
1,009
14,662
9,856
Overview
Strategic Report
Governance
Accounts
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
12. Fixed asset investments (continued)
2014
£’000
2013
£’000
UK equities
1,200
1,350
Overseas equities
6,284
4,421
Bonds
5,917
3,028
Other
1,261
1,057
14,662
9,856
UK equities
1,098
866
Overseas equities
5,517
3,667
Bonds
4,958
2,736
Other
2,056
1,416
13,629
8,685
These investments are held in the following securities:
Market value at 31 December
The historical cost of these investments is as follows:
Historical cost at 31 December
The investment portfolio included the following stocks which individually accounted for more than 5% of the total value at
the balance sheet date:
2014
£’000
2013
£’000
869
868
0.125% Treasury Index Linked 22/11/2019
1,275
–
0.375% Treasury Index Linked 22/03/2062
888
–
1.25% Treasury Index Linked 22/11/2017
13. Debtors: Amounts falling due within one year
AAT
Group
2014
£’000
2013
£’000
2014
£’000
2013
£’000
Trade debtors
2,068
1,720
2,265
1,854
Other debtors
122
984
190
1,076
Prepayments
546
532
546
532
1,629
1,670
1,629
1,670
525
352
–
–
32
28
32
28
4,922
5,286
4,662
5,160
Fees and subscriptions
Amount due from subsidiary undertakings
Amount due from joint venture (see note 22)
Total
The Association of Accounting Technicians Annual Report 2014
43
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
14. Current asset investments
AAT
Group
2014
£’000
2013
£’000
2014
£’000
2013
£’000
437
3,140
810
3,471
Treasury deposits
1,200
3,000
1,200
3,000
Total
1,637
6,140
2,010
6,471
Aberdeen Asset Investments Limited
The current asset investments with Aberdeen Asset Investments are amounts held on deposit in a sterling liquid fund.
The current asset investments include £102,000 earmarked for designated funds.
15. Creditors: amounts falling due within one year
AAT
Trade creditors
Taxes and social security
Other creditors
Group
2014
£’000
2013
£’000
2014
£’000
2013
£’000
1,066
843
1,066
843
318
336
354
368
34
38
34
38
–
3
–
–
Accruals
1,190
1,523
1,195
1,528
Deferred income
7,913
6,633
7,913
6,633
23
36
23
36
Amounts owed to subsidiary undertakings
Fees received in advance
Rent reserve reversing within one year (see note 16)
Provision for dilapidation
Total
44
The Association of Accounting Technicians Annual Report 2014
89
86
89
86
154
139
154
139
10,787
9,637
10,828
9,671
Overview
Strategic Report
Governance
Accounts
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
16. C
reditors: amounts falling due after more than one year
Rent reserve
In September 2011, AAT terminated the two leases that were in place since the previous year, and subsequently entered
into two new long term leases for its premises at 140 Aldersgate Street. The new leases have an element of a rent free
period. In accordance with UITF Abstract 28 Operating Lease Incentives, the rent free period incentive has been spread
over the lease term. The movement on the rent reserve for the year was as follows:
AAT and Group
Balance at 1 January
2014
£’000
2013
£’000
743
549
Reserve built up during year
4
240
Reserve released during year
(86)
(46)
Balance at 31 December
661
743
Reserve reversing within one year
89
86
Current obligations
89
86
Reserve reversing within two to five years
354
354
Reserve reversing within more than five years
218
303
Non-current obligations
572
657
Total
661
743
Split of rent reserve:
17. Operating lease commitments
The minimum payments, which AAT is committed to make in 2014 under operating leases, are as follows:
AAT and Group
Property
2014
£’000
Plant and equipment
2013
£’000
2014
£’000
2013
£’000
Leases which expire:
–
–
11
17
After five years
645
645
–
–
Total
645
645
11
17
Within one to two years
The Association of Accounting Technicians Annual Report 2014
45
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
18. Unrestricted income funds
Group
At 1 January
Surplus for the year
Net movement in interest in joint venture
2014
£’000
2013
£’000
11,499
9,477
515
1,234
36
(56)
563
1,009
Surplus before pension scheme actuarial loss
12,613
11,664
Pension scheme actuarial loss (FRS 17)
(2,283)
At 31 December, including pension reserve
10,330
Investment gains
(165)
11,499
AAT
At 1 January
2014
£’000
2013
£’000
11,462
9,384
Surplus for the year
515
1,234
Investment gains
563
1,009
12,540
11,627
Surplus before pension scheme actuarial loss
Pension scheme actuarial loss (FRS 17)
(2,283)
At 31 December, including pension reserve
10,257
Included in both the Group and charity unrestricted income funds are revaluation reserves totalling £1,032,178.
46
The Association of Accounting Technicians Annual Report 2014
(165)
11,462
Overview
Strategic Report
Governance
Accounts
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
19. Gross cash flows for the Group
2014
£’000
2013
£’000
Increase/(decrease) in creditors
Trade creditors
Taxes and social security
Other creditors
Amount due to joint venture
Accruals
Deferred income
223
(428)
(14)
127
(4)
25
–
(333)
1,280
(62)
486
1,519
Fees and subscriptions received in advance
(13)
(817)
Provision for dilapidation
15
11
1,154
861
Total
Pensions reserve funding deficit movements
Current service cost
Contributions
Other finance (income)/cost
Total
–
(1,300)
(118)
(1,418)
–
(456)
53
(403)
Returns on investments and servicing of finance
25
29
201
133
226
162
(570)
(793)
Payments to acquire fixed asset investments
(7,339)
(2,899)
Proceeds from sale of fixed asset investments
2,271
2,871
Total
(5,068)
Interest received
Dividends received
Total
Capital expenditure
Payments to acquire tangible fixed assets
Capital investment and long term investments
(28)
Management of liquid resources
Net cash transferred from/(to) short term deposits
4,461
(1,308)
The Association of Accounting Technicians Annual Report 2014
47
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
20. Analysis of changes in net funds for the Group
At 1 Jan 2014
£’000
Cash in hand, at bank
543
Cash flows At 31 Dec 2014
£’000
£’000
1,172
629
Other current asset investments
6,471
(4,461)
2,010
Total
7,014
(3,832)
3,182
21. Subsidiary undertakings and intra group transactions
(i) Accounting Technicians (Services) Limited
The company recommenced trading in August 2010 and made a profit of £242,303 in 2014 before tax and Gift Aid
payable to AAT (2013: profit of £125,399). Its activities for that period are summarised below.
Profit and loss account for the year ended 31 December 2014
Turnover
2014
£’000
2013
£’000
326
350
Cost of sales
(52)
(61)
Gross profit
274
289
Other operating expenses
(33)
(153)
Operating profit
241
136
1
1
Profit on ordinary activities before Gift Aid and taxation
242
137
Gift Aid payable to AAT
(242)
Interest receivable
(11)
Profit on ordinary activities after Gift Aid and before taxation
–
126
Tax on profit on ordinary activities
–
–
Retained profit for the financial year
–
126
2014
£’000
2013
£’000
Net asset statement as at 31 December 2014
766
588
Current liabilities
(566)
(388)
Net current assets
200
200
Total net assets
200
200
200
200
–
–
200
200
Current assets
Represented by:
Share capital
Profit and loss account
Shareholders’ funds
48
The Association of Accounting Technicians Annual Report 2014
Overview
Strategic Report
Governance
Accounts
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
21. Subsidiary undertakings and intra group transactions (continued)
(ii) Accounting Technician (Publications) Limited
The company has been dormant for several years, and the value of its net assets as at 31 December 2014 was £100
(2013: £100).
We have taken advantage of the exemption under FRS 8 not to disclose transactions between AAT and its subsidiary
undertakings which eliminate on consolidation.
22. Joint venture undertaking – Association of Accounting Technicians (SA) (AAT(SA) NPC)
The following table provides a summary analysis of the financial results of the activities undertaken by the company and
its net assets position as at 31 December 2014 which have been included in the Group results for the year and in the
Group balance sheet at the end of the year:
Statement of income and expenditure
Results for
the year ended
31 December 2014
2014
AAT share
2013
AAT share
ZAR’000
£’000
£’000
£’000
19,746
1,078
539
537
3,897
213
106
69
Income
Project income
Membership and other income
Total revenue
23,643
1,291
645
606
Expenditure
(22,258)
(1,215)
(607)
(649)
38
(43)
Surplus/(deficit) for the period
Exchange rate differences
1,385
–
76
(4)
(2)
(13)
Net movement for the year
1,385
72
36
(56)
Fund balances brought forward
1,213
72
36
92
Fund balances carried forward as at 31 December 2014
2,598
144
72
36
Results for
the year ended
31 December 2014
2014
AAT share
2013
AAT share
£’000
£’000
Net asset statement as at 31 December 2014
ZAR’000
£’000
17,363
963
482
301
(14,766)
(819)
(410)
(265)
Net current assets
2,597
144
72
36
Total net assets
2,597
144
72
36
Represented by: Unrestricted income funds
2,597
144
72
36
Current assets
Current liabilities
The related party transactions between AAT and AAT(SA) NPC include recharges to AAT(SA) NPC for salary costs of
one full time employee, assessment production, membership services, membership application processing, magazine
distribution and other costs relating to marketing design and collateral production. The end of year debtor balance of
£32,327 is shown within note 13.
The Association of Accounting Technicians Annual Report 2014
49
Accounts
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
23. Analysis of net assets between funds
2014
Total
unrestricted
funds
£’000
2013
Total
unrestricted
funds
£’000
Group fund balances at 31 December 2014 are represented by:
Tangible assets
Investments
Net current assets/(liabilities)
Long term liabilities and provisions
Defined pension scheme liability
Total
2,407
2,977
16,409
10,742
(2,976)
2,510
(572)
(657)
(4,938)
(4,073)
10,330
11,499
2,407
2,977
16,537
10,906
Charity fund balances at 31 December 2014 are represented by:
Tangible assets
Investments
Net current assets/(liabilities)
(3,177)
2,309
(572)
(657)
Defined pension scheme liability
(4,938)
(4,073)
Total
10,257
11,462
Long term liabilities and provisions
24. Taxation
AAT is a registered charity and is therefore exempt from tax on income and gains falling within Part 11 of the Corporation
Tax Act 2010 or section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied for charitable
purposes within AAT’s charitable objects. Taxation is only relevant to the subsidiary, Accounting Technicians (Services)
Limited. A charge of £125 was incurred in the prior year by the subsidiary but no tax note disclosure has been made in
the accounts due to the amount being immaterial.
25. Status
The Association of Accounting Technicians is a company limited by guarantee (restricted to £1 per full member)
and not having a share capital and is registered as a charity.
50
The Association of Accounting Technicians Annual Report 2014
Overview
Strategic Report
Governance
Accounts
Accounts
MEMBERS OF COUNCIL
Members of Council who held office during 2014
as Directors and Trustees (all are members of AAT)
Members of the Executive Team
and Company Secretary
Rachel Banfield (President)
Chief Executive: Mark Farrar ∆ ◊ (from 31/03/14)
Allan Ramsay (Vice President)
Director of Professional Development: Adam Harper
Vernon Anderson
Director of Education: Suzie Webb
Alixe Bainbridge-Spring (until 16/05/14)
Director of Finance: Rob Williams ◊
Mark Barnish (Chairman, Audit and Assurance Board)
Susan Boseley
Director of Marketing and Brand Strategy:
Andrew Williamson
Henry Cooper
Chief Information Officer: Gary Burbidge
Sally Cox
Chief HR Officer: Olivia Hill (from 20/11/14)
Nicholas Craggs (from 16/05/14)
Christina Earls
Mike Evans ∆ (Chairman, Governance Panel)
Company Secretary: Karen Marshall
Nicola Fisher* (Chairman, Members’ Services Board)
The following were also members of the Executive Team
during 2014:
David Frederick (from 16/05/14)
Chief Executive: Jane Scott Paul ∆ ◊ (until 28/03/14)
Helen Geatches
Director of Global Development: Clare Morley ◊
(until 21/03/14)
Ken Gill (until 16/05/14)
Kevin Gilmour
Richard Harbord
Acting Director of Global Development: Claire Angus
(from 22/03/14 to 11/07/14)
Nigel Johnson (until 16/05/14)
Linda Kumbemba (from 16/05/14)
Hilary Lindsay (until 16/05/14)
Lee Maidment (until 16/05/14)
Daphne Marler (until 16/05/14)
∆Indicates Director of Accounting Technicians (Services) Limited,
a subsidiary company
◊Indicates Director of Association of Accounting Technicians (SA) NPC,
a joint venture company
*Indicates Director of Accounting Technician (Publications) Limited,
a subsidiary company
Mark McBride* (Chairman, Resources Board)
June Moody
Jeremy Nottingham
Rita Patel
Paul Rowlands
Julian Spencer
Dee Statham
Louise Taylor (from 16/05/14)
Sue Taylor (from 16/05/14)
Wilma Teviotdale
Tracy Tipple (from 16/05/14)
Jane Towers
Anne-Marie Townsend
Carole Turner
Andrew Vanburen (until 16/05/14)
David Walker ∆
Reg Wood (Chairman, Learning and Development Board)
John Yeoman (Chairman, Regulation and
Compliance Board)
The Association of Accounting Technicians Annual Report 2014
51
Accounts
HONOURS AND AWARDS
Honorary members
Past Presidents
1984Michael G Lickiss
BSc (Econ) FCA (Knighted 1993) MAAT
1980-82Michael G Lickiss
BSc (Econ) FCA (Knighted 1993) MAAT
1986Eric C Sayers CBE *
1982-83Peter T Hobkinson FCCA CPFA MIMgt MAAT
1986Edmund Gibbs FCCA FCIS ATII*
1983-84Peter R Dallow FCA MAAT*
1990William Hyde MA FCMA FCCA JDipMA*
1984-85Professor Michael G Harvey
MSc (Econ) FCCA FCIS FMAAT
1990Richard G Wilkes CBE TD FCA DL
1992Fred P Langley MPhil FCCA
1996John Hanson BA (Com) CPFA
2007Robert Thomas MSc FCA FCCA FTII
2014Jane Scott Paul OBE
1985-86Geoffrey J C Lockhart FCA FMAAT*
1986-87Paul Treadaway CIPFA Hon MCIM FMAAT
1987-88Stanley Husband FCMA MAAT*
1988-89Kenneth A Sherwood FCA MAAT*
1989-90Reg J Carter BA FCMA MAAT
1990-91John N Farquhar DMS FMAAT
1991-92 Malcolm S H Bell CA MAAT
1992-93Noel Cannon FCCA MAAT
1993-94Edna Jolly DMA CertEd FMAAT
1994-95Geoff P Mason CPFA MBACP FMAAT
1995-96Ken Sommerville CA MAAT
1996-97John Newman MA FCA MAAT
1997-98Noel Sladen FMAAT
1998-99John Vincent FCA MCIArb FMAAT
1999-00Margaret Rawding CPFA FMAAT
2000-01Andrea White FCCA MAAT
2001-02Professor David Hunt
MSc FCA FIPD FRSA FMAAT
2002-03Mike Dudding CPFA MAAT
2003-04Jan Bell CertEd FMAAT
2004-05Jess Bond BSc (Econ) FMAAT
2005-06Trevor Salmon
OBE BSc (Hons) FCCA CPFA MAAT
2006-07Brian Palmer ATT FMAAT
2007-08Tim Light FMAAT
2008-09Catherine Chamberlain AFA FMAAT
2009-10Pam Dyson
MA FCCA CPFA FCMI CMgr MIHM FMAAT
2010-11 Neil Price BSc CA CertPFS MAAT
2011-12 Dr Hilary Lindsay MSc MBA FCA FMAAT
2012-13 Henry Cooper FMAAT
2013-14 Mike Evans CPFA FMAAT
* since deceased
52
The Association of Accounting Technicians Annual Report 2014
Overview
Strategic Report
Governance
Accounts
Accounts
HONOURS AND AWARDS
CONTINUED
Past Secretaries^/Chief Executives
1981-87 Anthony B Sainsbury VRD JP MA^*
1987-96John Hanson BA (Com) CPFA^
1997-14 Jane Scott Paul OBE
* since deceased
CPD Prize winners
The CPD prize recognises full members who show an
outstanding approach and commitment to their
continuing professional development.
2002Susan Francis MAAT
2003Maxine McCulloch FMAAT
2004Stuart McBain MAAT
Past Presidents’ Award winners
The Award recognises a full member who has enhanced
the reputation of AAT by individual effort and service.
2005Edit Gardner MAAT
2006Lindsay Watkins FMAAT
2007Diane Ackroyd FMAAT
1994Simon Payne MAAT
1995Ruth Bryant MAAT
1996Hannah Tonge FMAAT
1997Pako Kedisitse MAAT
1998Keith Knight FMAAT
1999Malcolm Springall FMAAT
Suzanne Willard MAAT
2000Pamela Dyson FMAAT
2001Ishphak Parkar FMAAT
2002Sue Pryce-Williams FMAAT
2003Michael Steed MAAT
Kim Cragg MAAT
2008Mayuri Lakhani MAAT
2009James Thomson FMAAT
Sally-Ann Delf MAAT
2010Diana Cornford FMAAT
Melanie Philpott MAAT
2011Glenn Gosden MAAT
2013Sarah Knight MAAT
2014Georgia Moss MAAT
No award was presented for 2012 due to a change
in the selection process.
2004Alfred Boddison FMAAT
2005Sheryl Miller MAAT
2006Marie Walker MAAT
2007David Kalaba FMAAT
2008Paul Buzzard MAAT
2009Lesley Sureshkumar FMAAT
2010Jane Towers FMAAT
2011Jennifer Frost MAAT
2012Duncan Majinda MAAT
2013Neil Montgomery FMAAT
The Association of Accounting Technicians Annual Report 2014
53
Association of Accounting Technicians
140 Aldersgate Street
London
EC1A 4HY
T 0845 863 0800
T +44 (0)20 7397 3000
[email protected]
www.aat.org.uk
Registered charity no. 1050724
A company Limited by guarantee (No. 1518983)