## **Trustees’ Report** & Financial Statements For the year ended 31 March 2022
## Our Vision
**We’re creating** an internet free from child sexual abuse that is **a safe place for children** and adults to use around the world.
25Years Countries50 Mission[01]
## Contents
## **Overview**
- 2 Our Members 4 Welcome from our Chair 5 Welcome from our CEO 6 Funding Council Chair’s Foreword 7 Caring for our people 8 Our Senior Leadership Team
## **Trustees’ Report**
## Our Mission
## **Child sexual abuse images and videos are just as much a weapon as a knife.**
We actively search for this imagery and for the past 25 years, we’ve given people a safe place to report it to us, anonymously, now covering 50 countries.
We assess every report we receive. If it shows the sexual abuse of a child, we make sure the image or video is removed from the internet.
To do this effectively, we develop technology-for-good: We provide bespoke services, products and datasets to our industry Members to prevent the imagery from re-appearing and make it harder for offenders to find and share.
We care. Our work relies on compassionate and resilient staff members, who are highly trained and carefully looked after.
We encourage others to play their part, whether it is reporting to us, funding us, or collaborating on the best technology and research.
The children in these pictures and videos are real. The suffering captured in this imagery and the knowledge that it could be shared can haunt a victim for life.
**That’s why it’s our mission to remove this material for good. And to show every child there is someone out there who cares enough to help.**
An incorporated charity, limited by guarantee. Registered in England. Charity No. 1112398 Company Reg. 03426366 Registered office: Discovery House, Chivers Way, Vision Park, Histon, Cambridge CB24 9ZR, United Kingdom
10 Reference & Administrative Details 11 Objectives & Activities 12 Our year at a glance **IWF’s impact** 14 Theory of Change 16 Examples of our Activities 17 Our Results 18 Our Evidence 19 Our Services 20 Review of Activity & Successes 21 Financial Review 22 Structure, Governance & Management 25 Our Board of Trustees Independent Auditors’ Report to the 30 Members & Trustees’ of the IWF 33 Statement of financial activities 34 Company balance sheet 35 Statement of cash flows 36-48 Notes to the financial statements
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Our Members
as at 31 March 2022
£80,000+ £25,000+ £10,000+ £5,000+
£2,500+
TARGETED. TACTICAL. RELEVANT.
£20,000+
£1,000+
£50,000+
IT NETWORKING AND SECURITY
£15,000+
preparing children to thrive online
rt // 31 March 2022 Our Members 3
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##
IWF Trustees’ Repo **rt // 31 March 2022**
**2**
**To some, it may seem the problem is insurmountable. But far from showing there is no answer to online child sexual abuse, the IWF’s latest record year shows its world-class analysts are now more effective than ever, pulling more and more of the worst abuse off the internet and protecting the victims whose suffering would otherwise increase unchecked.**
I am constantly impressed that the team’s energy and commitment to meet the scale of the challenge never seems to waver.
I know that this is an organisation, supported by an active and engaged Board, which will never stand still while there remains a single image or video on the internet of a child being sexually abused.
Over the past year, the IWF has contended with the ongoing effects of worldwide lockdowns, as well as the impending future regulation through the Online Safety Bill. This Bill will not only impact on the work of our Members but on the work of the IWF itself.
Working collaboratively has been our overriding approach to this to ensure that we get ‘good’ regulation which actively helps to fight online child sexual abuse. We must not undo any of the work and
## Welcome from our Chair
relationships that the IWF has forged around the world over the past 25 years on behalf of all the children who have been sexually abused and had their images circulated.
This is why I have been working closely with the IWF team on a programme of engagement and consultation with the Government, Parliamentarians, Ofcom and of course our Members. Regulation can only be effective with the close involvement and cooperation of the internet industry. The IWF is a trusted broker between the regulator and the industry.
Any role that the IWF plays in the future will be with the support of its Members, which is why I have worked closely with the Chair of IWF’s Funding Council and a working group of Members to review our governance arrangements. This has resulted in some changes being made which provide the IWF with the formal independence it needs from industry to undertake discussions about possible future functions in the regulatory regime. It also provides reassurances to the Members that we will not change our remit or fees without their agreement.
As Chair, I lead the Board of Trustees and I know I speak for them all when I say we have complete
really well run organisation. Behind the big numbers produced by the Hotline, are excellent financial, HR, communications, membership and technical functions who all play their part. I know they will rise to meet any new challenge.
Andrew Puddephatt OBE _IWF Chair_
...pulling more and more of the ��������������� the internet and
protecting the victims whose ��������������� otherwise increase unchecked.”
**For a quarter of a century now, the IWF has been a shining light for people in the depths of the darkest abuse.**
The internet has changed almost beyond recognition in that time. The evolution of this tool, and the role it plays in our every day lives has helped children learn, people work, and families stay connected.
But is has also opened up new avenues for dangerous predators to target, groom, and abuse children. Abuse which can then be shared by criminals all around the world.
But the IWF is leading the fight back. In 2021 the UK’s National Crime Agency revised their estimate of the number of people who pose a sexual threat to children in the UK. They put it between 550,000 to 850,000. Whilst it’s a great achievement that thanks to our work, and that of UK hosting companies, such little child sexual abuse material is hosted in the UK, it means very little when so many of its population want to view it, and when year-on-year our numbers only show that the situation is getting worse.
This year, we were able to find so much more of this material than ever before. We could do this thanks to huge strides within our Hotline to work more efficiently, using
## Welcome from our CEO
technology better and being able to employ an additional two analysts. Additionally, we’ve developed a way to reduce the number of off remit reports being presented to our analysts with an improved reporting process for the public. This has saved our analysts needing to assess nearly 10,000 off remit reports, allowing them instead to focus on their proactive searching for this material.
We launched IntelliGrade – a world first which allows our dedicated team of graders, funded by a Thorn grant, to quickly assess and ‘hash’ (create digital fingerprints) child sexual abuse images from the UK Government’s Child Abuse Image Database (CAID). What’s new, is that this grading process allows the hashes to be compatible with multiple legal jurisdictions around the world. And at the same time, we’re adding large volumes of metadata which allows us to understand more about the sexual abuse happening to the children pictured, and provides a way for technology companies to build and train the tech of the future.
Tackling child sexual abuse material is ever challenging, but by working collaboratively and forging great partnerships with technology companies, governments globally,
law enforcement and the third sector makes it possible to do this effectively.
Finally, a word for our team of dedicated analysts: They spend each and every day assessing some of the most challenging content imaginable. They do this because they know that for every image or video they remove, it stops that child being revictimised and gives that child some hope.
Susie Hargreaves OBE _IWF CEO_
...for every image or video they remove, it stops that child being revictimised and gives that child some hope.”
Welcome from our Chair & CEO
**4 IWF Trustees’ Report // 31 March 2022**
**5**
When we look at the global spread of child sexual abuse material on the internet, we know the problem is far too large, and far too complicated to defeat without key allies working together.”
## Welcome from our ���������������������
when we came together to review the governance arrangements in readiness for, and in the context of, the Online Safety Bill. This resulted in an amendment to the Articles of Association to ensure that in operation and perception, the IWF Executive was properly independent of its funding Members.
**The IWF demonstrates the very best of humanity, and its human-led approach sees its dedicated analysts working with technology to fulfil their mission.**
When we look at the global spread of child sexual abuse material on the internet, we know the problem is far too large, and far too complicated to defeat without key allies working together. And the IWF Funding Council is a mechanism to enable just that.
Another element is making sure the tech industry assists the IWF in understanding and responding to proposed changes, and new and emerging technologies.
As Chair of the Funding Council, I play a pivotal role in ensuring the right issues are being discussed, and that communication lines between the Funding Council, the IWF Executive and IWF Board remain open and strong.
We also adhere to a “Notice and Takedown” procedure. Every relevant Member of the IWF agrees to remove, or disable access to, a criminal child sexual abuse image or video, if notified by the IWF.
Our role is a broad one and, while making sure good governance procedures are followed and that best practice is always adhered to, we are also very keen to help champion the IWF’s message.
The Funding Council is where IWF Members have the opportunity to come together to provide advice on policy. The Funding Council also gives the IWF Board expert advice from the internet industry on any new developments through three Trustees. We aim to help IWF in its mission to make internet a safer place.
Matthew Eltringham _Funding Council Chair & BBC Executive Editor_
Working together, we know we can make a real difference. Just one example from this year was
**As the internet and our relationship with it evolves and changes, so does the way in which we must operate to make sure we stay one step ahead of the criminals and predators who would target and abuse children online.**
This has been a period of expansion for the IWF, with specialised new teams of assessors bringing new skills and determination to our organisation.
So far, more than a million images from the Government’s Child Abuse Image Database (CAID) database have been assessed by our new taskforce.
Analysing these images and videos is not an easy task, and it is certainly not a job for everyone. Whether in our taskforce, or in our hotline, we know staff need the right support to make sure they can perform their vital roles while keeping safe, healthy and happy themselves.
Their welfare is important, and we will always keep our staff’s wellbeing at the core of what we do. The IWF could not operate without its staff and, without them, the internet would be a considerably less safe place for children.
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our people
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We’ve remodelled and redesigned our Cambridge headquarters to make sure the new taskforce can work effectively alongside our Hotline analysts, and that expertise is shared across the many layers of our operation.
Many of our non-image viewing staff continue to work from home, and we continue to make sure they are looked after and supported. Making sure everyone is included and involved is a huge reason the IWF functions so well, and we all keep in touch with each other regularly.
The safety of our staff remains a top priority, and we keep strict control on who is coming in and out of our office, ensuring appropriate measures are in place to keep our staff safe from outbreaks of Covid, and to ensure our Hotline can Their welfare continue to run effectively. is important, Children’s safety has to be protected, and we will always be and we will there for them. I am proud of our always keep team here at the IWF and, wherever ����������� they are working, I know we are working together as a strong, wellbeing focused unit. at the core Heidi Kempster of what we do.”
Heidi Kempster _IWF Deputy CEO & COO_
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**6** IWF Trustees’ Report // 31 March 2022
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Our Senior Leadership Team
## **Susie Hargreaves OBE**
## CEO
Susie has led the IWF since 2011 and brings passion, energy and a strong vision to create an internet free from child sexual abuse imagery. Susie has over 30 years’ senior management experience in the not-for-profit sector.
Susie represents IWF on several boards and groups including the NCA CEOP Command Strategic Governance Group, the UK Council for Internet Safety (UKCIS) and the Crown Prosecution Service Child Sexual Abuse Stakeholder Forum.
Among her achievements, Susie was awarded an OBE in the Queen’s Birthday Honours in 2016 for ‘Services to Child Online Safety’. Susie was a finalist in the Executive of the Year 2017 category in the internet’s most prestigious industry awards in the UK, the ISPA Awards; and was a finalist for a European Woman of Achievement Award in 2004 and is a Clore Leadership Fellow. Susie is Trustee of SOS Children’s Villages.
## **Heidi Kempster**
Deputy CEO & COO
Heidi directs IWF’s business activities. She is a detail-orientated, strategic thinker devoted to creating a caring and supportive environment for all. She is responsible for deputising for the CEO and she ensures the operations of IWF run smoothly and efficiently.
Heidi oversees all finance, HR, legal and statutory compliance, including managing performance and risk. She manages the IWF Development Team, and is also responsible for maintaining and developing the IWF’s gold-standard welfare programme for staff.
Heidi started her career in local government finance and has worked in a number of positions and departments in education, audit and property. Before joining IWF in June 2013 she was part of the Senior Management Team of one of the first large secondary Academy Trusts, overseeing operations for both children, adults and the wider community.
## **Emma Hardy**
Communications Director
Emma directs all IWF’s communications functions with energy and enthusiasm, and ensures all communications are consistent, timely and in line with IWF’s values.
She oversees reputation management, awareness raising, campaigns, media relations and the public affairs functions.
Emma started her career as a journalist, writing for a newspaper and magazine before taking internal communications and press office roles at a police force and in local government.
She has a Multi-Media Journalism degree, is a qualified senior reporter and holds a Public Relations Diploma from the Chartered Institute of Public Relations (CIPR), where she is a Chartered Member. Emma joined IWF in April 2011.
## **Chris Hughes**
Hotline Director
Chris joined the IWF in February 2012 as Hotline Manager, running a team of five analysts. He has overseen the expansion of the hotline which now boasts 26 analysts – and growing – including a Hotline Manager, Deputy Hotline Manager and a team of Senior Analysts.
Chris is responsible for the running of the hotline, training of analysts, and the provision of datasets and services to IWF’s Members. He is the IWF’s key contact with Law Enforcement bodies around the world, and he sits on several advisory groups.
Chris started his career in Hospitality and Catering before moving into the IT Training Sector. He has previously had roles as a Training Director and Business Manager overseeing the delivery of the DWP Work Programme, across three sites in the East of England.
## **Dan Sexton**
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Dan joined IWF in February 2021. He is responsible for Information Technology, Cybersecurity and Software Development leading the in-house technical and compliance teams.
He leads our software engineering work which includes the creation of world-leading technologies, such as IntelliGrade and Report Remove, to support the hotline and our technology Members.
Dan has over 20 years’ experience in IT, working across a range of environments including local government, the academic sector and in commercial software development.
Dan has a degree in Media, Culture and Society and a Master’s in Computer Science.
**IWF Trustees’ Report // 31 March 2022**
Our Senior Leadership Team
**8**
**9**
## Reference & Administrative Details
Charity Registration Number 1112398
## Principal/
Registered Office Discovery House Chivers Way Histon Cambridge CB24 9ZR
Company Registration Number 03426366
Chief Executive Officer Ms S E Hargreaves
## Independent Auditors
Senior Management Personnel
Price Bailey LLP Chartered Accountants & Statutory Auditors Tennyson House Cambridge Business Park Cambridge CB4 0WZ
- Ms S E Hargreaves
- Ms H Kempster
- Ms E Hardy
**•** Mr C Hughes
- Mr D Sexton
Board of Trustees
- Claire Bassett
## Investment Advisors
- Laurelle Brown
Rathbones Brothers Plc 8 Finsbury Circus London EC2M 7AZ
- Sinead Coogan Jobes Appointed on 04 June 2022
- Giles Crown
- Terry Downing
## Bankers
- Elizabeth Kanter
Abacus House Castle Park Castle Hill Cambridge CB3 0AX
Appointed on 22 September 2021
**•** Claire Lilley Term expired 03 June 2022
**•** Sherry Malik
- Bronagh McCloskey
- John Parkinson
- Andrew Puddephatt
- Ganapathi Subramaniam Term expired on 31 August 2022
- Henry Turnbull Resigned on 21 July 2021
## �����������������������
The Trustees present their report and the audited financial statements of the charity for the year ended 31 March 2022. The Trustees have adopted the provisions of the Statement of Recommended Practice (SORP) “Accounting and Reporting by Charities” (FRS 102) in preparing the annual report and financial statements of the charity.
It is our continued aim to use the expertise of the IWF’s team and work with partners to:
- Disrupt the availability of child sexual abuse content hosted anywhere in the world.
- Protect children who are victims of sexual abuse from repeat victimisation and public identification.
##
- Prevent internet users from accidentally stumbling across child sexual abuse content.
We are confident that the IWF continues to meet the public benefit requirements and that we have paid due regard to the published guidance from the Charity Commission. Our specific objects as a company are set out in our Articles of Association. Our aims as a charity continue to be to promote the protection and welfare of the public, particularly children, by working to minimise the availability of illegal content on the internet.
- Remove any nonphotographic child sexual abuse content that is found to be hosted in the UK.
## How we do this
- Identify, assess, report and remove illegal child sexual abuse imagery.
- Provide a world class Hotline for anyone to securely and anonymously report child sexual abuse imagery.
## Remit
To remove online child sexual abuse content hosted anywhere in the world and to remove nonphotographic child sexual abuse content hosted in the UK.
- Use our intelligence to actively search for child sexual abuse images and videos on the public internet.
## 2016-2021 Strategy
- Work with industry partners worldwide to remove images of child sexual abuse as quickly as possible and prevent them from being spread further.
Online child sexual abuse imagery is a global problem, which demands a global solution. The internet does not respect geographical borders, so we work in close cooperation with partners worldwide.
- Develop technical solutions and services using innovative tactics to disrupt and remove illegal content.
- Research, analyse and disseminate relevant trends data.
- Share our expertise and play an active role in the UK Safer Internet Centre.
- Promote best-practice welfare for staff who are working to eliminate child sexual abuse imagery and provide a caring and safe environment for all of our staff.
The main focus of our strategy has been to deliver excellence in our core operations, particularly the Hotline and in the technical services we deliver.
We have also carried out a number of projects during this financial year and continue to develop our project work in line with our strategy. These projects and much more will contribute to our 2021-2025 Strategy.
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**10** IWF Trustees’ Report // 31 March 2022
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## **�����������** ���������
## 361,062
reports were assessed in 2021.
## 7 in 10
## 72%
We continue to see an exponential increase in what is termed ���������������� �������������������������������������������������� ������������������������������������������������������������������������
�������������������������������������������������������������������� (182,281 or 72%) �����������������������������������������������������
## 97%
In 2021, we saw a three-fold increase��������������������� ����������������7-10-year-olds.
97% ������������������ helped to remove in 2021, contained a female child.
(252,194) of those led us ������������������������� �������������������������������
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64%
more of this criminal material, due to �������������������������������� made within our Hotline.
�����������������������babies, toddlers and young children aged 6 and under, they are more likely to be ������������������� child sexual abuse �������������������������������������������������
0-6
year olds
��������������������������� created 1,004,611 unique hashes �����������������������������������
���������������������������������������we recruited 12 positions from January - December 2021.
**12 IWF Trustees’ Report //** 31 March 2022
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## IWF’s Impact: ��������������������
Our Theory �������������� ������������� our work.
Child sexual abuse has �������������� impact on people’s lives.
**The desired outcomes in our Theory of Change form the objectives of our business plan, which in turn translate into detailed activities to guide our work.**
Online child sexual abuse is increasing globally with a significant increase in ‘first-person produced imagery’.
Everyone at IWF is is increasing globally with set personal objectives a significant increase in which relate to those ‘first-person produced imagery’. activities and objectives Criminals use technology to which helps us move as evade detection and prey on one force towards our children; re-victimisation occurs vision of an internet free every time an image is viewed from child sexual abuse online and a generation could that is a safe place for be growing up with the fear children and adults to use that an online sexual image of around the world. themselves as a child will follow them into adulthood.
The internet can be unsafe for children and adults who do not, or cannot fully appreciate the risks. Among some companies, groups or individuals who can help combat Child Sexual Abuse Material (CSAM), there is indifference, inconsistency, inaction or mis-representation of the issue which increases victim suffering and emboldens criminals.
Activity 1.
## Activity 2.
## Activity 3.
Activity 4.
We have taken a deep dive into these activities and their impact. **Please see page 16.**
## Super Impacts
## Outcomes
Impacts Super Impacts Globally, the internet has less child sexual abuse material. The UK is the most hostile country in the world to host CSAM and is the safest place in the world to be online. The internet is free from child sexual abuse and is a safer People know place for children about CSAM, are and adults to use better able to keep themselves and their around the world.
**We know we are on course to reduce the demand for CSAM, and its availability is minimised when:**
We use technology effectively to support our world-class Hotline & we develop services, products and datasets to achieve our mission.
We work closely with technology companies and provide high quality services to our Members across the globe.
We maximise our global reach by providing somewhere to report CSAM, and we share & disseminate expertise, research and data. People know about CSAM, are We use our influence to inform better able to keep 1. Public affairs activities in the themselves and their UK, EU, the 5-eyes partnership, and; 2. Through the media. loved ones safer online, and know We are accountable and transparent, and we always put the part they can our mission and values first. play in its prevention and removal.
We have strong, effective and collaborative relationships with all our stakeholders including members and funders without compromising our independence.
������������������ as the model of best practice around the world.
The IWF is future proofed and we have a caring environment provided for all our staff.
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**14** IWF Trustees’ Report // 31 March 2022
IWF’s Impact: Examples of Our Activities
## IWF’s Impact: Our Results
Activity 1. Activity 2. Activity 3.
**Working collaboratively, transparently yet influentially, in the online safety space, always innovating, developing and evaluating impact.**
**Carrying out and disseminating world leading information and trends analysis.**
**Working to prevent, disrupt and remove child sexual abuse material from the internet.**
In 2021/22 we recruited two more staff to help assess, grade and quality-assure child sexual abuse images and videos in our Hotline. We now operate a super Hotline offering 2.6 billion people around the world with somewhere to report this content. The IWF is the world’s largest proactive online child sexual abuse assessment and grading centre.
As well as reporting on a growing list of nuanced areas involving child sexual abuse material online in our annual report, we carry out bespoke and snapshot studies. In 2021/22 we published studies on:
In addition to our highly trained analysts, and to support their work, we innovate. We launched IntelliGrade; a powerful new tool that enables our analysts to accurately grade child sexual abuse images and videos, while automatically generating unique hashes (digital fingerprints) which are used to identify and eliminate these images wherever they appear. In response to feedback, our Tech Team constantly refine and improve IntelliGrade to enable our graders to work more efficiently in producing hashes of child sexual abuse images.
- The sexual abuse of boys;
- The prevalence of female offenders;
- The sexual abuse of three to six year olds, as well as
## The impact
- An enhanced analysis of domain abuse.
Where the content breaks UK law, we work with a host of international partners to have it taken down, reducing the amount of child sexual abuse material available online.
We frequently tell people about how we work including how we organise our analysts and graders, and what our welfare programme looks like. We do this through presentations, panel events, one to one, or one to few meetings, conferences and through inviting people into our Hotline to see for themselves (where they have sufficient clearance for viewing criminal content).
The data which is captured from this work feeds into worldleading datasets, tools and services taken by the internet and tech industries to stop and disrupt this type of content on their networks and platforms. This reduces the amount of child sexual abuse material available online.
## The impact
IntelliGrade speeds up the creation of hashes which are used by technology companies to stop the upload, storage and distribution of online child sexual abuse material. Therefore, we are reducing the amount of this imagery available online.
The impact
By sharing our knowledge, it supports the wider online safety ecosystem which supports our impacts: People know about CSAM and know the part they can play in its prevention and removal and we share knowledge around our model of best practice.
Activity 4.
**Generating income, delivering value for money services and activities which contribute to a robust and sustainable and accountable business model.**
Underpinning our world-leading work finding and removing sexual imagery of children, and the datasets which are created for companies to do the same, is a sustainable business model. As a not-for-profit, we reinvest to meet our mission. As at 31 March 2022, we had 175 Members contributing funds to our work. In addition, we have successfully secured additional grant funding of £630,000.
The Impact
Having sustainable funding gives us confidence to grow in terms of staff numbers and in terms of resources.
In 2021-22 we employed 12 new staff members.
We have also been able to fund the development of both tried-and-tested and experimental new technologies to help combat child sexual abuse online, such as IntelliGrade.
**The IWF is recognised •** We continue to develop **globally as one of the leading** technical solutions to allow **organisations tackling child** us to be more effective at **sexual abuse online.** achieving our mission. We were able to find and remove Our reports and data are trusted so much more content and utilised by law enforcement, in 2021 due to significant government, NGOs and the tech/ improvements we made internet industry. within our Hotline – to In 2021 alone, our team: our working practices and **•** Assessed more than 360,000 procedures, the technology reports of suspected child that we’re using and not to sexual abuse. 252,000 were mention making best use confirmed as containing child of our hugely skilled and sexual abuse imagery – a 64% experienced Analyst team we have.
- Assessed more than 360,000 reports of suspected child sexual abuse. 252,000 were confirmed as containing child sexual abuse imagery – a 64% increase from 2020.
- Services to our Member organisations continue to be improved and developed. On average, we grade 100,000 images of child sexual abuse per month using our bespoke technology, IntelliGrade.
- In 2020, we launched Reporting Portals in six countries, taking our total to 50 reporting portals including the UK.
- These portals allow 2.6bn citizens to anonymously report child sexual abuse images and videos they may have seen accidentally online. It’s a simple and lowcost mechanism for those nations who may not have the infrastructure in place to launch such a facility alone.
Since IWF began in 1996, we have human-assessed more than 1.8 million webpages and removed child sexual abuse imagery from over 970,000 webpages globally. This equates to millions of images which is something we’re very proud of. But we must never be complacent; we know there’s a lot more to do and IWF’s work will not stop until we’ve reached our mission of a safer internet for everyone, free from child sexual abuse imagery.
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**16** IWF Trustees’ Report // 31 March 2022
**17**
## IWF’s Impact: Our Evidence
**As a data-driven organisation working on behalf of people who’ve been sexually abused as children, we understand that it’s vitally important for us to perform our work in an impeccable, accurate and transparent manner.**
We have a dedicated team of Quality Assurance Officers who act as ‘critical friends’ to our frontline Hotline analysts.
They randomly sample the work and assessments of the team every day to ensure accuracy and aid development. As a member of INHOPE we are also subject to their independent review.
As such, we ensure our workflows, procedures and working methods are independently scrutinised to guarantee we are working to the very highest standards and providing the most precise data.
At their most recent audit by the INHOPE team they reported that the IWF “maintains exceptional standards in all areas and its practices can be recommended to new or existing hotlines wishing to develop or expand their services”.
All key data, trends and developments are published in our Annual Report which is publicly available on our website.
The UK’s Independent Inquiry into Child Sexual Abuse said “the IWF sits at the heart of the national response” and the latest DCMS safety tech report said “the IWF have helped to radically reduce the volume of child sexual abuse content hosted in the UK, and continue to lead the fight.
We actively encourage third parties to scrutinise our work and use our statistics to inform their own work.
In order to ensure we are confident in the data we produce, we have developed a bespoke report management system which allows us to track every aspect of what we do.
Under continual development, the system is constantly improved by our in-house Tech Team ensuring the highest levels of accuracy and security.
This is independently verified though our annual ISO audit allowing us to retain our ISO 27001 accreditation in information security management.
The IWF maintains exceptional standards in all areas and its practices can be recommended to new or existing hotlines wishing to develop or expand their services”
## Our Services
## Notice and Takedown
The most effective way to eliminate online child sexual abuse content is to remove it at source. The UK hosts a small volume of online child sexual abuse content and remains an incredibly hostile territory in this respect. When we started in 1996, the UK hosted 18% of the global total – in 2020 this figure was just 0.1%.
We took action on 381 webpages hosting images and videos in the UK in 2021 (an increase of 112% from 2020 when we actioned 180 URLs). 31 of these webpages had been removed by the time we received authorisation from the police to instigate its removal or it had moved hosting country already, leaving us with 350 URLs to take action on. We issued 69 takedown notices against these 350 URLs. We might send one notice for several webpages and content may have already been removed by the time we get authorisation from the police.
## URL List
We provide a list of webpages (URLs) with child sexual abuse content hosted abroad to companies who want to block or filter them for their users’ protection, and to prevent repeat victimisation. We update the list twice a day, removing and adding URLs. During 2021, the list was sent across all seven continents. There were 203,234 unique URLs included on the List in 2021, compared to 147,232 in 2020. On average, 1,001 new URLs were added each day (591 in 2020), and averaged 5,526 URLs per day (5,747 in 2020).
## Hash List
Each image can be given a unique code, known as a hash. A hash is like a digital fingerprint of an image. The IWF list of hashes can be used to find duplicate images. At the end of 2021, the list contained hashes relating to 1,004,611 individual images, an increase from 567,167 hashes on the list at the end of 2020. Of these hashes, 316,269 (31.5%) related to Category A images, the worst forms of abuse - images of rape or sexual torture of children. This is an increase from the end of 2020, where 118,074 hashes related to the worst forms of abuse.
Keywords List
Offenders often create their own language – codes – for finding and hiding child sexual abuse images online. To help counter this, each month we give our Members a list of keywords that are used by people looking for child sexual abuse images online. This is to improve the quality of search returns, reduce the abuse of their networks and provide a safer online experience for internet users. In December 2021, the Keywords List held 5,247 words associated with child sexual abuse images and videos.
Newsgroups
We are one of only a handful of hotlines in the world that processes reports on newsgroups. Our Hotline team monitors the content of newsgroups and issues takedown notices for individual postings of child sexual abuse imagery. We also provide a Newsgroup Alert to Members, which is a notification of child sexual abuse content hosted on newsgroup services so they can be removed.
In 2021 we processed 10 reports alleging child sexual abuse images hosted within newsgroups. After monitoring newsgroups, we recommended our Members do not carry 178 newsgroups containing child sexual abuse images and videos. This resulted in 207 postings being removed from public access.
## ������
We also provide various alert services to Members, such as Domain Alerts. These are issued to companies in the domain registration sector when illegal content is found on domains registered through them. The other alert services are for payment brands, virtual currency use and ‘Simultaneous’ alerts for our US Members.
## NPI List
The NPI List is comparable to our standard URL List but features URLs showing images and videos of non-photographic child sexual abuse.
These could include cartoons, drawings, computer-generated imagery (CGI) and other nonphotographic representations of child sexual abuse. The URLs provided are those deemed at the time of assessment to potentially breach UK legislation, specifically Sections 62 to 69 of the Coroners and Justice Act 2009. IWF Members can request access to the list enabling them to block webpages featuring this type of content - further protecting their users and contributing to the overall fight against child sexual abuse online. In 2021, 235 unique URLs of non-photographic child sexual abuse imagery were included on the list.
IWF Trustees’ Report // 31 March 2022
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**18**
## Review of Activities and Successes
**Throughout the 2021/22 year we have continued to work at full capacity while contending with the ever-changing challenges the pandemic has provided. We remain committed to our aims and dedicated to successfully delivering our business strategy.**
- Converge ICT Solutions
criminal images showing the sexual abuse of children from the UK Government’s Child Abuse Image Database (CAID).
- Danske Bank
- Depop
- Eastern Telecommunications Philippines Inc
**•** We teamed up with long-term partner NSPCC/Childline to launch a new online tool called Report Remove which helps young people get nude images or videos removed from the internet.
- EMET Technologies PTE LTD (trading as Breadcrumbs.app)
- Exoclick
Whilst our teams continue to work either in the office full time or in a hybrid manner, productivity has been exceptionally strong and, once again, it has been an extremely busy year. Some key highlights are:
- F-Secure Corporation
- Globe Telecom
- Grayshift
**•** The Welsh Government joined our ranks as a Member becoming the first Government body to do so.
- Hyperslice Ltd
- Jurassic Fibre
- L M Ericsson Limited (Ireland)
- Last.FM
**•** Our Policy Team have worked hard with relevant government departments including Home Office and DCMS, parliamentary champions and other child safety advocates to provide advice, support and guidance for the upcoming Online Safety Bill to ensure it is effective in better protecting children online and ensuring the Bill is workable and focussed on improving systems and processes to detect and report child sexual abuse.
**•** We partnered with the International Centre for Missing and Exploited Children (ICMEC) to launch a new online portal which allows internet users, who do not have access to their own national reporting mechanism, to easily and anonymously report child sexual abuse material on the internet.
- Mojeek Ltd
- Netcraft Limited
- Open Text Corporation
- Performance Networks Limited
- Precedence Technologies Ltd
- Qintel
- Radius Telecoms Inc
- ReversingLabs, LLC
- Wandera Limited
**•** The IWF took the top prize **•** Welsh Government, Digital at the Digital Communication Learning Division (Hwb) Awards in the Purpose **•** Working Group Two Driven Communications **•** XYZ Registry (Covid 19) category for our work campaigni **ng to raise** awareness of th **e rise of** “self-generated **” child sexual** abuse material.
**•** We launched a hard-hitting campaign (see image, right), backed by the UK Home Office and Microsoft, aiming to empower girls, and warn parents, about the serious risks posed by online predators targeting children – particularly 11-to-13-year-old girls.
## **Membership Drive**
Our Development T **eam worked** hard to bring 29 ne **w companies** into membership wi **th** the IWF:
- .au Domain Ad **ministration** Limited
- Thanks to a grant from US-based child protection organisation, Thorn, we set up a new IWF taskforce to hash (create digital fingerprints) two million
- ActiveFence
- CDSM Interacti **ve Ltd** (d.b.a. Thinqi)
-
## Financial Review
winding up our operations. The Trustees deem it appropriate to maintain unrestricted general funds which are at least equivalent to 50% of the expected annual running costs of IWF. 50% expenditure for 2021/22 was £2,037,274. The Trustees are aware of the higher level of reserves, and the organisation is expanding and investing in people and technology to reduce the free reserves and continue to meet its charitable objectives. There is continued uncertainty around the impact on IWF of the “Online Harms Bill” which the Trustees wish to fully resolve before over committing on the spending of the reserves. The free reserves are higher as a result of higher than expected grant income levels, significant growth in membership and underspends caused by Covid restrictions. Reserves are invested to maintain their value to IWF, minimising risk and not specifically to generate ongoing income.
## **Income**
Our principal funding is received via membership fees from industry.
Total income for the year at £5,495,269 (2020/21 £4,525,464) increased from the previous year, due to an increase in the value of memberships subscriptions as well as additional grant funding. At the end of 2021/22 the IWF had 175 Members (2020/21 161). Retaining and developing membership is critical to being able to fund our activities. We received grants from the EU Commission (£473k), Home Office (£350k), Thorn (£294k), Nominet (£274k), The Global Fund to End Violence Against Children (£172k) and Department for Culture Media and Sport (£105k).
## **Expenditure on charitable activities**
Our key objective is running the Hotline in the most efficient and beneficial way so as to maximise our removal of illegal child sexual abuse content. We have also created a new team of Internet Content Assessors, whose job it is to assess, grade and hash content from the CAID Police database.
## **Investments**
IWF’s objective is to maintain the value of its investments after inflation. Rathbones Investment Management Ltd continue to manage a portfolio containing £1,073,241 on our behalf (2020/21 £544,095). An assessment of attitude to risks has been undertaken and as a result the appropriate investment strategy has been determined as Cautious Growth (Rathbones SAAC3). Key parameters of the mandate are:
Our expanded Tech Team have continued to develop cutting edge technology to detect content more efficiently during this financial year. Total expenditure of charitable activities at £4,074,548 (2020/21 £3,693,153) represented an increase of 10% from the previous year.
## **Reserves**
- A return reference of CPI+2%.
IWF ended the year with reserves of £4,409,062 in 2021/22 of which £3,272,554 are free reserves (2020/21 total reserves £2,961,316). IWF’s policy is to maintain a level of reserves which takes into account unexpected changes in income or operations, fluctuations in cash flow and the timescales and commitments in the event of
- An expected time horizon of 5+ years.
- An exposure of up to 65% in equity and equity-correlated risks with the balance in liquid and diversifying assets.
- Income will be reinvested in the portfolio.
The portfolio has almost performed in line with the targets set. The return on investment since inception, which is less than the target 5 year time horizon, is showing a total average annual return of 4% against an average annual target of 5%.
## **Fundraising**
The charitable company understands its duty to protect the public, including vulnerable people, from unreasonably intrusive or persistent fundraising approaches and undue pressure to donate. The IWF has not proactively fundraised from the public currently, nor does it use any internal fundraisers or external fundraising agencies for either telephone or face-to-face campaigns. No complaints regarding fundraising were received during the year.
The fundraising strategy for 2022/23 continues primarily to be on securing income from corporates through membership and strategic partnerships, and grants from trusts, foundations and the government. The improvements made to the online donation process have resulted in a greater number of donations from private households however no targeted approaches have been made, nor will be made directly to the public in the year ahead.
## **Going concern**
After making appropriate enquiries, the Trustees have a reasonable expectation that the charitable company has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the
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IWF Trustees’ Report // 31 March 2022
**20**
## ����������������������������������
## **Funding Council**
## **Constitution**
## **Method of appointment**
## **or election of Trustees**
In addition, we operate a Funding Council who not only provide funding but also support the Board with expert advice from their respective industries. All of our Members have the opportunity to nominate representatives to the Funding Council.
The Internet Watch Foundation is an independent registered charity (number 1112398) and is also a company limited by guarantee (registered company number 3426366). The company was incorporated on 29 August 1997 and charitable status was gained on 16 December 2004. The IWF is governed by its Memorandum and Articles of Association as approved on 16 December 2004. These have been regularly reviewed, and an update of the Articles has taken place in 2020/21.
Independent Board members are appointed by the Board through a fair and open selection procedure managed by the Board Executive Committee.
This Committee comprises the Chair, the two Vice-Chairs and an Independent person. In making a selection, the Committee will ensure that the Board has an appropriate balance of skills and experience. All recommendations of the Committee for Board appointments are subject to Board approval.
The Funding Council elects three of its Members to represent industry views on the Board and the Council meets six times per year.
Its role is to:
- Consider relevant policy issues affecting the IWF in order to brief the Board representatives with Members’ views.
## **The Board**
The Independent Chair is appointed by the Board through an open selection procedure managed by the Nominations Committee, comprising the two Vice-Chairs and an independent person.
We are governed by a Board of 11 Trustees who are led by an Independent Chair. The rest of the Board comprises six independent Trustees, three industry Trustees and one co-opted Trustee. Changes to the Board membership during the year are documented at the beginning of the Report.
- Contribute to funds and ensure renewal of funds for the continued operation of the IWF.
- Advise on the annual IWF budget and setting of membership fees. Select three Members for the IWF Board.
## **Policies adopted for the induction and training of Trustees**
All new Board members undergo an induction process and training to enable them to understand the role of the IWF and their role as Trustees.
- Advise on and approve the Members’ code of practice.
The Board elects two Vice-Chairs from within its membership – one from industry and one independent. The independent Trustee in this case also carries out the role of Senior Independent Director. The Board monitors, reviews and directs the IWF’s remit, strategy, policy and budget to help us achieve our objectives and delegates operational management to the CEO.
- Review and follow their Funding Council Constitution which describes how the Council conducts its business.
**Organisational structure and decision making**
In order to facilitate a better understanding of issues and to enable more effective decision making, the Board operates a Finance Committee. The Finance Committee has no delegated power and all major decision are made by the Board of Trustees.
## **Vetting**
All of our Trustees are subject to the IWF vetting policy procedure and their responsibilities are described in the Board Members’ Handbook.
The Board governs via a regular cycle of Board meetings, each documented with offical minutes.
We continue to monitor our governance to ensure that we not only maintain relevant documentation and our independent status, but that we also remain up to date with current legislation.
IWF’s organisational structure can be found on our website here.
Our Independent Board members are chosen by an open selection procedure following national advertising. No Trustee may serve more than six years.
## ����������������������������������
## **Remuneration of key**
- Potential liabilities that have been identified through appropriate insurances.
Mitigation:
## **management personnel**
5. Consideration of alternative and additional funding streams. Our dedicated Development Team are exploring the various avenues available to us.
The key management personnel are the Trustees; the Chief Executive Officer, the Chief Operating Officer/ Deputy Chief Executive Officer, the Chief Technical Officer, the Hotline Director and the Communications Director. The Board undertakes regular reviews of salaries of key management personnel, drawing upon market data available for the charity sector and will continue to monitor and review salaries as necessary.
- Information security, hardware and operational risks to comply with relevant standards and best practice.
6. Maintenance of our Information security resilience and to keep pace with change, and regular staff training.
- Property and assets where IWF has audited procedures in place.
## **Relevant legislation changes**
The systems of internal controls 7. Active engagement with utilised to support our risk government regarding the management are designed to Online Safety Bill with a provide reasonable, but not dedicated Policy & Public absolute, assurance against Affairs Manager leading on material misstatement or loss. They this. Although published April include a strategic business plan, 2019, this proposed change in an annual budget approved by the legislation was known of, and Trustees, regular consideration by being prepared for, during the the Trustees of financial results, financial year. variances from budgets, non8. Engaging government with financial performance indicators and the support of a number of benchmarking reviews, delegation of our parliamentary Champions authority and segregation of duties, to raise this issue given its and an audited Information Security potential to significantly Management System (ISMS).
Section 6 of the Memorandum of Association of the IWF permits payments to a maximum of three Trustees attending each Board meeting. During the year, no Trustee was paid in respect of their duties. The Chair was however remunerated for his role and further details can be found in note 9 of these accounts.
8. Engaging government with the support of a number of our parliamentary Champions to raise this issue given its potential to significantly undermine our work and be detrimental to the welfare of victims.
**Related party relationships** All major decisions are made by the Board of Trustees. The industry Members of the charity are members of the Funding Council as described previously. The IWF works in partnership with representatives from the UK internet industry, police, government departments and partner hotlines overseas in order to minimise the availability of child sexual abuse content found online.
The Finance Committee, comprising Board and SLT representatives, lead our risk management activities, regularly monitoring and reviewing risks via a dedicated Risk Register.
An Information Security Forum (ISF) meets regularly to maintain and continually improve the ISMS. The IWF also ensures all staff understand the principles of risk management and remain vigilant when it comes to the security of our information.
Principal risks and uncertainties include:
1. Funding sustainability
## **Risk management**
2. Cyber-attack or system failure
A Quality Assurance team works daily within the Hotline to independently review assessments. The Hotline is externally audited biennially by an independent team chaired by Independent Inspector Sir Mark Hedley, an esteemed High Court Judge.
Risk management is an integral part of the planning, budget, forecasting and management cycle of the IWF and takes into account:
3. Positioning the IWF in a potentially changing regulatory landscape
4. Threat posed by DNS over HTTPS encryption
- Variations in income streams and expenditure, which is addressed through budgeting and expenditure controls.
**22** IWF Trustees’ Report // 31 March 2022
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## ����������������������������������
financial statements may differ from legislation in other jurisdictions.
In the ever-changing technological environment in which the IWF operates, monitoring and managing risk and maintaining pace with change are recognised by the Board as critical to continued successful operation.
2. Observe the methods and principles in the Charities SORP 2019 FRS102;
## **Auditors**
3. Make judgments and accounting estimates that are reasonable and prudent;
- In so far as the Trustees are aware:
- There is no relevant audit information of which the charitable company’s auditor is unaware; and
4. State whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
## **Statement of Trustees’**
**Responsibility**
- The Trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.
The Trustees (who are also directors of Internet Watch Foundation for the purposes of company law) are responsible for preparing the Trustees’ report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
5. Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation.
The Board recommends at the AGM that Price Bailey LLP should continue to be engaged as auditors for the forthcoming financial year.
This report, which has been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.
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 charitable 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.
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 of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements, the Trustees are required to:
This report was approved by the Board on 4 October 2022 and signed on its behalf by:
**Andrew Puddephatt, OBE** Independent Chair
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
1. Select suitable accounting policies and then apply them consistently;
## ���������������������
## **Andrew Puddephatt, OBE**
## Independent Chair
Andrew Puddephatt OBE is Chair of the Internet Watch Foundation. He has worked to promote human rights for 20 years with specific expertise in freedom of expression, transparency, and the role of media and digital communications in promoting human rights. Specific skills include:
- Policy analysis, evaluation and advice on projects concerned with communications, human rights and democracy internationally.
- Expert in international human rights, with a specific focus on freedom of expression and access to information.
Previous work includes strategic policy analysis, scoping exercises, evaluation of programmes, needs assessments, and the development and delivery of capacity-building programmes. He has worked with experts and governments in Europe, the United States, the Middle East, sub-Saharan Africa, and Latin America.
## **Claire Bassett**
## Independent Vice-Chair
Claire is a Non-Executive Director of the Serious Fraud Office and until May 2022 was Deputy Director General of the Independent Office for Police Conduct.
Prior to this Claire was Chief Executive (Designate) of the Shadow Trade Remedies Authority, and Chief Executive of the Electoral Commission, the UK’s independent elections watchdog and regulator of party and election finance during the EU Referendum.
Previously, Claire was Chief Executive of two other government arm’s length bodies: the Parole Board and the Criminal Cases Review Commission.
Earlier in her career, Claire was a Director of Nacro - the crime reduction charity, Chief Executive of Connexions Milton Keynes, Oxfordshire and Buckinghamshire. She also held various roles at the Legal Services Commission. She began her career as a management trainee in the construction industry.
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**24** IWF Trustees’ Report // 31 March 2022
**25**
## ���������������������
## **Bronagh McCloskey**
Industry Vice-Chair
Bronagh McCloskey is Public Affairs Manager at TalkTalk, where she works with Government and industry stakeholders on public policy issues. Her experience includes working on telecommunications infrastructure projects and online safety initiatives.
Prior to joining TalkTalk, she worked in a consultancy providing communications and policy advice to businesses and charities, where she completed a number of secondments. She began her career working in Parliament.
## **Laurelle Brown**
Independent Trustee
Laurelle Brown (She/Her) is a Youth and Community Work and Equality, Diversity, and Inclusion (EDI) professional with over 20 years’ experience across sectors, including at the Children’s Society, London Violence Reduction Unit and Coram Voice.
Laurelle is Director at Laurelle Brown Training and Consultancy (LBTC), where she collaborates with clients to develop and embed inclusion across practice, leadership and systems in services that protect, safeguard and promote the welfare of children.
Laurelle is passionate about improving the lives of children; she is Co-Founder and Director at KIJIJI, a membership organisation for Black safeguarding professionals, a school governor, an Independent Visitor to a child in care and a safeguarding children’s partnerships member in a London borough.
## ���������������������
## **Sinead Coogan Jobes**
Industry Trustee
Sinead is a Policy Manager at Sky where she leads on policy work relating to telecommunications and digital issues, including online safety initiatives.
Prior to joining Sky, she worked at Virgin Media O2 where she was similarly involved in the company’s public affairs and policy work on online safety, and in public affairs consultancy advising a number of companies on technology, media and telecoms policy issues.
## **Giles Crown**
Independent Trustee
Giles was appointed in September 2019.
Giles is Joint Managing Partner at law firm Lewis Silkin. He specialises in intellectual property, media, data & privacy and regulatory work.
His clients include famous brands, major marketing communications agencies, tech & telecoms companies and media & entertainment organisations.
He was previously in-house counsel at an advertising agency and before that a media barrister. He has also held trustee and advisory positions in the charitable and tech sectors, including as Chair of Westminster Citizens Advice, and is an accredited mediator.
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**26** IWF Trustees’ Report // 31 March 2022
## ���������������������
## **Terry Downing**
## Independent Trustee
Terry has over 30 years experience in the international media and telecoms sectors, holding C-suite roles in both public and privately owned businesses.
Currently, Terry is the interim CFO of the Global Sales Group of EndemolShine where he is helping them complete their merger with Banjiay, the French media group. Prior to this Terry held senior roles with FOX, Warner Bros and Chime Communications Plc. Terry was also Audit Chair and NED for the Wandsworth NHS, completing two terms.
Terry is a graduate of Massey University in New Zealand and qualified with Deloitte.
## **Elizabeth Kanter**
## Industry Trustee
Liz was appointed Director of Policy and Government Relations at TikTok in May 2019. She is responsible for engaging with governments and delivering TikTok’s public policy objectives in the UK, Ireland, Netherlands and Israel.
Prior to joining TikTok, Liz ran her own public affairs consultancy firm working for a range of organisations including StubHub, Forescout and the Cabinet Office. Liz has held senior Government Relations positions at a range of global brands including SAP, BlackBerry, and Yahoo.
Liz is a dual US-UK national. She keeps the US-UK connection alive through her fellowship with the British American Project, for which she sits on the UK Executive Board. She is from California, and moved to London in 2001. She lives in London with her husband and two daughters.
## ���������������������
## **Sherry Malik**
## Co-opted Trustee
Sherry Malik is passionate about social care and social justice. Her signature strength is in enabling change & transformation, working with individuals, organisations, boards and partnerships. She has over 30 years of experience of leading & managing a diverse portfolio in large complex, political settings in public (Local & Central Govt. and the NHS), voluntary & commercial settings, both in executive and non-executive roles.
She was the former Director of children’s services at NSPCC, DCS and DASS at LB Hounslow and held exec roles at Cafcass and GSCC. She is currently a non-executive Director at Dimensions UK, a Trustee at the Social Awards and a Staff College Associate.
## **John Parkinson OBE**
## Independent Trustee
## John was appointed in January 2018.
He is a former UK Chief Constable with experience of leading investigations into major and serious crime and counter terrorism. He was the founding head of the NE Counter Terrorism Unit and as UK Senior National Coordinator Counter Terrorism oversaw many national and international counter terrorism operations.
He was awarded the OBE for his services to Policing and Counter Terrorism in 2011 and is a Visiting Scholar at Cambridge University.
John is the Chair of CENTRIC (Centre of Excellence for Research into Terrorism, Resilience, Intelligence & Organised Crime) and the former Chair of a Modern Slavery and Anti-Trafficking Network. He has wide international experience as a strategic policy advisor for security and terrorism issues.
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**28** IWF Trustees’ Report // 31 March 2022
**29**
## Auditors’ Report
Independent Auditors’ Report to the Members & Trustees of Internet Watch Foundation for the year ended at 31 March 2022
## **Opinion**
audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We have audited the financial statements of Internet Watch Foundation (the ‘charitable company’) for the year ended 31 March 2022 which comprise the Statement of Financial activities, the Balance Sheet, The Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
## **Conclusions relating to going concern**
In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
In our opinion the financial statements:
- give a true and fair view of the state of the charitable company’s affairs as at 31 March 2022, and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **Other information**
## **Basis for opinion**
The other information comprises the information included in the trustees annual report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the annual report.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statementsthemselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
## **Opinions on other matters prescribed by the Companies Act 2006**
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Trustees’ report (incorporating the directors’ report) for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the directors’ report has been prepared in accordance with applicable legal requirements.
## Auditors’ Report Continued
Independent Auditors’ Report to the Members & Trustees of Internet Watch Foundation for the year ended at 31 March 2022
company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
## **Matters on which we are required to report by exception**
In the light of our knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the directors’ report included in the trustees’ report.
We have nothing to report in respect In preparing the financial of the following matters in relation statements, the trustees are to which the Companies Act 2006 responsible for assessing the requires us to report to you if, in our charitable company’s ability to continue as a going concern, **•** adequate accounting records disclosing, as applicable, matters related to going concern and have not been kept, or returns using the going concern basis of adequate for our audit have not been received from branches accounting unless the trustees either intend to liquidate the not visited by us; or charitable company or to cease **•** the financial statements are operations, or have no realistic not in agreement with the alternative but to do so. accounting records and returns; or **Auditor’s responsibilities for the**
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
## **Auditor’s responsibilities for the**
- certain disclosures of trustees’ remuneration specified by law are not made; or
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
- we have not received all the information and explanations we require for our audit; or
- the trustees were not entitled to prepare the financial statements in accordance with the small companies’ regime and take advantage of the small companies’ exemptions in preparing the directors’ report and from the requirement to prepare a strategic report.
## **Responsibilities of Trustees**
As explained more fully in the trustees’ responsibilities statement on page 24, the trustees (who are also the directors of the charitable company for the purposes of
Irregularities, including fraud,
are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We gained an understanding of the legal and regulatory framework applicable to the charitable company and how it operates and considered the risk of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations. This included those regulations directly related to the financial statements. In relation to the charity this included GDPR, health and safety, employment law and financial reporting.
We communicated the identified laws and regulations with the audit team and remained alert to any indications of non-compliance throughout the audit. We carried out specific procedures to address the risks identified. These included the following:
- agreeing the financial statement disclosures to underlying supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
- enquiries of management including those responsible for key regulations;
- enquires of management about GDPR compliance and reviewing register of any GDPR breaches in the year;
**30** IWF Trustees’ Report // 31 March 2022
**Auditors’ Report**
**31**
## Auditors’ Report Continued
Independent Auditors’ Report to the Members & Trustees of Internet Watch Foundation for the year ended at 31 March 2022
## **Auditor’s responsibilities for the audit of the financial statements (continued)**
website at: https://www.frc.org. uk/Our-Work/Audit/Audit-andassurance/Standards-and-guidance/ Standards-and-guidance-forauditors/Auditors-responsibilitiesfor-audit/Description-of-auditorsresponsibilities-for-audit.aspx. This description forms part of our auditor’s report.
- performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
- reviewing minutes of Trustee Board meetings, minutes of Audit Committee meetings and correspondence with the Charity Commission;
## **Use of this Report**
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 the charitable company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
- in addressing the risk of management override of controls, we carried out testing of journal entries and other adjustments for appropriateness, and
- reviewing the risk management processes and mitigating actions in place.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
## **Helena Wilkinson BSc FCA DChA**
_Senior Statutory Auditor_
for and on behalf of PRICE BAILEY LLP
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
Chartered Accountants Statutory Auditors Tennyson House Cambridge Business Park Cambridge CB4 0WZ
A further description of our responsibilities is available on the Financial Reporting Council’s
Date: 16 November 2022
## Statement of Financial Activities
Internet Watch Foundation | Statements of Financial Activities (Including Income and Expenditure Account) for the year ended at 31 March 2022
|Note
Income
Donations
2
Charitable activities
3
Other trading activities
4
Investment income
5
Total income
Expenditure
Charitable expenditure:
6
Total expenditure
Net Gain / (Loss) on investments
Net income/ (expenditure) in the year
Transfers between funds
18a
18b
Net movement in funds
Reconciliation of funds:
Total funds brought forward
Total funds carried forward|2022
2021
Unrestricted
Restricted
Total
Total
£
£
£
£
99,598
-
99,598
117,967
3,520,576
1,783,408
5,303,984
4,283,205
83,814
-
83,814
116,526
7,873
-
7,873
7,766|2022
2021
Unrestricted
Restricted
Total
Total
£
£
£
£
99,598
-
99,598
117,967
3,520,576
1,783,408
5,303,984
4,283,205
83,814
-
83,814
116,526
7,873
-
7,873
7,766|
|---|---|---|
||3,711,861
1,783,40|8
5,495,269
4,525,464|
||(1,776,294)
(2,298,254)
(4,074,548)
(3,693,153)||
||(1,776,294)
(2,298,254|)
(4,074,548)
(3,693,153)|
||27,025|27,025
70,900|
||1,962,592
(514,846)
1,447,746
903,211
-
-
-
-
(584,724)
584,724
(1,000,000)
1,000,000||
||377,868
1,069,878
1,447,746
903,211
2,894,686
66,630
2,961,316
2,058,105||
||3,272,554
1,136,50|8
4,409,062
2,961,316|
All amounts relate to continuing activities of the company.
The Statement of Financial Activities includes all gains and losses recognised in the year.
The attached notes on pages **36 to 48** form part of these financial statements.
��������������������������������������������������������������� **33**
**32** IWF Trustees’ Report // 31 March 2022
**----- Start of picture text -----**
34
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## ���������������������
Internet Watch Foundation | Registered Company Number: 03426366 Company Balance Sheet for the year ended at 31 March 2022
|**Note**
Fixed Assets
Tangible assets
12
Investments
14
Total Fixed Assets
Current Assets
Debtors
15
Cash at bank and in hand
Total Current Assets
Liabilities
Creditors: amounts falling due within
one year
16
Net Current Assets
Total Net Assets
Funds Of The Charity:
Unrestricted funds:
General funds
18
Restricted funds
18|**2022**
**£**
125,293
1,073,241
1,198,534
1,229,491
4,412,696
5,642,187
(2,431,659)
3,210,528
4,409,062
3,272,554
1,136,508
4,409,062|**2021**
**£**
90,607
544,095|
|---|---|---|
|||634,702
1,668,504
3,142,227|
|||4,810,731
(2,484,117)|
|||2,326,614|
||||
|||2,961,316|
|||2,894,686
66,630|
|||2,961,316|
These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies’ regime.
The attached notes on pages **36 to 48** form part of these financial statements.
The financial statements were approved by the Board of Trustees on 4 October 2022 and signed on their behalf by:
**Andrew Puddephatt, OBE** Independent Chair
## Statement of Cash Flows
Internet Watch Foundation | Registered Company Number: 03426366 Statements of Cash Flows for the year ended at 31 March 2022
|Note
Cash Flows from Operating Activities
Net cash used in operating activities
20
Cash Flows from Investing Activities
Dividends and interest from investment
Purchase of investments
Investment disposal proceeds
Purchase of property, plant and equipment
Bank interest received
Change in cash and cash equivalents in the
reporting period
Cash and cash equivalents at the beginning of
the reporting period
Cash and cash equivalents at the end of
the reporting period
21|2022
£
1,424,694
7,181
(306,342)
230,949
(86,705)
692
1,270,469
3,142,227
4,412,696|2021
£
689,134
5,943
(319,135)
236,505
(75,413)
1,824|
|---|---|---|
|||538,858|
|||2,603,369|
|||3,142,227|
The attached notes on pages **36 to 48** form part of these financial statements.
����������������������������������������������� **35**
**34** IWF Trustees’ Report // 31 March 2022
## Notes to the Financial Statements
Internet Watch Foundation | Registered Company Number: 03426366 Notes to the Financial Statements for the year ended at 31 March 2022
## **1. Accounting policies**
## **e) Income**
foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the
The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are as follows:
Income is recognised when the charity has entitlement to the funds, any performance conditions attached to the items of income have been met, it is probable that the income will be received and the amount can be measured reliably.
## **c) Legal status of the Charity**
The charitable company number and registered office address are included on the reference and administration page of these accounts. There is no share capital as the charity is limited by guarantee. Each member has guaranteed an amount, not exceeding £1, towards the charity’s liabilities in the event of a winding up, provided that a member has not ceased to be a member one year prior to any winding up order. The charity is registered in the United Kingdom (England and Wales).
## **a) Basis of preparation and consolidation**
The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1January 2019) - (Charities SORP (FRS 102)) and the Companies Act 2006. The financial statements are prepared on a going concern basis and are presented in sterling, which is the functional currency of the charity.
Subscription fee income represents amounts receivable based upon the services provided. When their economic benefit is probable, it can be measured reliably and the charity has control over the item.
Voluntary income – donations are accounted for as received. Gifts in kind to the charity are included at the value specified by the donor or, if this is not available, at estimated cost to the charity. Donated facilities and donated professional services are recognised in income at their fair value.
## **d) Fund accounting**
Unrestricted funds are available for use at the discretion of the Trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes. Designated funds are unrestricted funds of the charity which the Trustees have decided at their discretion to set aside to use for a specific purpose. The aim and purpose of each designated fund is set out in the notes to the
These financial statements are rounded to the nearest £. The charity meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy notes.
Fair value is determined on the basis of the value of the gift to the charity. For example the amount the charity would be willing to pay in the open market for such facilities and services. A corresponding amount is recognised in expenditure.
Grants – Grants are included as income when these are receivable. Income from trading activities includes income earned from activities to raise funds for the charity. Income is received in exchange for supplying goods and services in order to raise funds and is recognised when entitlement has occurred.
The financial statements were not consolidated with the charity’s subsidiary, Internet Watch Limited on the basis of materiality and significance, further detailed in note 13.
Restricted funds are funds which are to be used in accordance with activities to raise funds for the specific restrictions imposed charity. Income is received in by donors or which have been exchange for supplying goods and raised by the charity for particular services in order to raise funds and purposes. The cost of raising and is recognised when entitlement administering such funds are has occurred. charged against the specific fund. The charity receives government The aim and use of each restricted grants in order to pursue its fund is set out in the notes to the charitable objects and minimise criminal content on the internet.
## **b) Going Concern**
After making appropriate enquiries, the Trustees have a reasonable expectation that the charitable company has adequate resources to continue in operational existence for the
## Notes to the Financial Statements
Internet Watch Foundation | Registered Company Number: 03426366 Notes to the Financial Statements for the year ended at 31 March 2022
## **h) Investments**
or opening of the deposit or similar account.
Income from government and other grants are recognised at fair value when the charity has entitlement after any performance conditions have been met, it is probable that the income will be received and the amount can be measured reliably. If entitlement is not met then these amounts are deferred.
Investments are a form of basic financial instrument and are initially recognised at their transaction value and subsequently measured at their fair value as at the balance sheet date using the closing quoted market price. The statement of financial activities includes the net gains and losses arising on revaluation and disposals throughout the year. The charity does not enter into put options, derivatives or other complex financial instruments. The main form of financial risk faced by the charity is that of volatility in equity markets and investment markets due to wider economic conditions, the attitude of investors to investment risk, and changes in sentiment concerning equities and within particular sectors or sub sectors.
## **k) Creditors**
Creditors are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors are normally recognised at their settlement amount after allowing for any trade discounts due. Concessionary loans received at below market rates are received in order to further the charitable objects of the organisation and are therefore included at the amount received and are not discounted.
## **f) Expenditure**
Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably. All expenditure is accounted for on an accruals basis.
## **l) Financial instruments**
Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with use of the resources.
The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value. Fixed assets are recorded at depreciated historical cost. All other assets and liabilities are recorded at cost which is their fair value and investments are recorded at the closing market value and details of unrealised gains and losses are included within note 14.
Investments in subsidiaries are measured at cost less provision for impairment.
**g) Tangible fixed assets and depreciation**
All assets costing more than £1,000 are capitalised at their historical cost when purchased. Depreciation is provided on all tangible fixed assets at rates calculated to write each asset down to its estimated off the cost on a straight line basis over their expected useful economic lives as follows:
## **i) Debtors**
Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due. Accrued income and tax recoverable is included at the best estimate of the amounts receivable at the balance sheet date.
## **m) Pensions**
- Leasehold improvements
Employees of the charity are entitled to join a defined contribution pension scheme. The charity contribution is restricted to the contributions disclosed in note 10.
- over the life of the lease
- Office equipment - 33.33% straight line
## **j) Cash at bank and In hand**
Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition
- Computer equipment - 33.33%-40% straight line
- Assets are reviewed for any indications of impairment at each balance sheet date.
**36 IWF Trustees’ Report // 31 March 2022**
Notes to the Financial Statements
**37**
## Notes to the Financial Statements
Internet Watch Foundation | Registered Company Number: 03426366 Notes to the Financial Statements for the year ended at 31 March 2022
## **p) Taxation**
## **n) Operating leases**
the extent that such income or gains are applied exclusively to charitable purposes.
The company is considered to pass the tests set out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the company is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to
Operating leases are recognised over the period of which the lease falls due.
## **o) Foreign Currencies**
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the balance sheet date.
Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the transaction.
|**2. Donations**
Donations|2022
£
99,598
99,598|2021
£
117,967|
|---|---|---|
|||117,967|
_All donations received in 2022 and 2021 relate to unrestricted funds._
## Notes to the Financial Statements
Internet Watch Foundation | Registered Company Number: 03426366 Notes to the Financial Statements for the year ended at 31 March 2022
|**3. Income from Charitable Activities**
Subscription fee income
EU grant income
UNICEF grant income
Nominet grant income
CSSF grant income
EVAC Chatbot grant income
Thorn grant income
Strategic partnerships
DCMS
HO
Nominet UKSIC
Miscellaneous income|2022
£
3,597,869
472,726
7,576
143,660
-
164,786
293,876
30,733
104,500
350,000
130,758
7,500
5,303,984|2021
£
3,071,532
560,464
40,188
150,412
229,900
51,344
116,339
63,025
-
-|
|---|---|---|
|||4,283,205|
_Income from charitable activities was £5,303,984 (2021 - £4,283,205) of which £1,783,408 (2021 - £1,311,672) was attributable to restricted and £3,520,576 (2021 - £3,071,533) was attributable to unrestricted funds._
|**4. Other trading activities**
Project contributions
Other|2022
£
77,293
6,521
83,814|2021
£
107,763
8,763|
|---|---|---|
|||116,526|
_Included within trading income in 2022 is £77,293 of restricted funds (2021: £100,000)._
## **5. Investment Income**
|Bank interest|2022
£
7,873
7,873|2021
£
7,766|
|---|---|---|
|||7,766|
_All investment income received in 2022 and 2021 relates to unrestricted funds._
**38** IWF Trustees’ Report // 31 March 2022
Notes to the Financial Statements
**39**
## Notes to the Financial Statements
Internet Watch Foundation | Registered Company Number: 03426366 Notes to the Financial Statements for the year ended at 31 March 2022
|**6a. Analysis of expenditure by activity**
Charitable activities:
Minimise criminal internet content|Direct
Support
2022
Costs
Costs
Costs
£
£
£
2,736,523
1,338,025
4,074,548|Direct
Support
2022
Costs
Costs
Costs
£
£
£
2,736,523
1,338,025
4,074,548|
|---|---|---|
||2,736,523
1,338,02|5
4,074,548|
||||
|**6b. Analysis of expenditure by activity**
Charitable activities:
Minimise criminal internet content|Direct
Support
2021
Costs
Costs
Costs
£
£
£
2,383,824
1,309,329
3,693,153||
||2,383,824
1,309,32|9
3,693,153|
_Included within expenditure above is £1,776,294 (2021: £1,982,847) in relation to unrestricted funds and £2,298,254 (2021: £1,710,306) in relation to restricted funds._
|**7. Analysis of support costs**
Finance and legal
Human resources
IT
Premises
General ofce costs
Other
Governance (note 8)|2022
£
86,420
923,650
25,602
141,383
113,120
496
47,353
1,338,025|2021
£
209,569
737,380
36,161
140,996
137,740
1,386
46,097|
|---|---|---|
|||1,309,329|
_Support costs have been allocated to activities as a fixed percentage basis consistent with use of the resources and staff costs have been allocated based upon time spent on each activity._
|**8. Analysis of governance costs**
Audit fees
Accountancy fees paid to auditor
Chair fees
Trustee recruitment and training|2022
£
12,800
2,000
31,725
828
47,353|2021
£
9,450
1,900
28,625
6,122|
|---|---|---|
|||46,097|
## Notes to the Financial Statements
Internet Watch Foundation | Registered Company Number: 03426366 Notes to the Financial Statements for the year ended at 31 March 2022
|**9. Analysis of staf costs and key management personnel**
Wages and salaries
Social security costs
Pension|2022
£
1,906,611
204,799
270,202
2,381,612|2021
£
1,672,144
179,749
239,965|
|---|---|---|
|||2,091,858|
In accordance with Section 6 of the Memorandum of Association of Internet Watch Foundation, the Chair received £31,725 (2021: £28,625) during the year in respect of his duties in office. This sum is included within governance costs.
Section 6 of the Memorandum of Association of Internet Watch Foundation permits payments to a maximum of 3 Trustees attending each board meeting. During the year, other than the Chair, a total of £Nil (2021: Nil) Trustees were paid in respect of their duties and these amounted to a total of £Nil (2021: £Nil).
In 2022, Nil Trustees (2021 – £Nil) received reimbursements of expenses for travel and subsistence amounting to £Nil (2021: £Nil).
The charity considers its key management personnel to comprise of 5 people. During the year, the total employment benefits of these 5 key management personnel, including social security and pension was £532,427 (2021: £487,688).
|The average monthly head count was as follows:
2022
Number
Charitable activities
51
The number of employees whose total employee benefts excluding pension contributions earning
classifed within bands of £10,000 is as follows:
2022
Number
£60,000 - £70,000
2
£70,001 - £80,000
1
£80,001 - £90,000
1
£90,001 - £100,000
1
£110,000 - £120,000
-
£120,000 - £130,000
1
6|2021
Number|
|---|---|
||43|
||over £60,000,
2022
Number
-
1
-
1
1
-|
||3|
_£13,792 (2021 - £13,520) was paid into a defined contribution pension scheme on behalf of the above higher paid employee._
## **10. Pension costs**
The charity operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the charitable company in an independently administered fund. Contributions payable by Internet Watch Foundation amounted to £270,202 (2021: £239,965). There were Nil outstanding contributions payable to the pension fund at the balance sheet date (2021: £Nil).
**40 IWF Trustees’ Report // 31 March 2022**
Notes to the Financial Statements
**41**
## Notes to the Financial Statements
Internet Watch Foundation | Registered Company Number: 03426366 Notes to the Financial Statements for the year ended at 31 March 2022
|**11. Net income**
Net income is stated after charging:
Depreciation of charitable assets owned by group
Loss on disposal of fxed assets
Auditors remuneration:
- for audit services
- for non-audit services
Operating lease costs for land and buildings
Operating lease costs for equipment|2022
£
52,019
-
12,800
2,000
245,538
3,798|2021
£
29,463
144
9,450
1,900
246,168
2,841|
|---|---|---|
||||
|**12. Tangible fxed assets**
Leasehold
Ofce
Computer
Improvements
Equipment
Equipment
Total
£
£
£
£
Cost:
At 31 March 2021
250,857
24,323
328,932
604,112
Additions
17,566
69,139
86,705
Disposals
-
-
-
At 31 March 2022
250,857
41,889
398,071
690,817
Depreciation:
At 31 March 2021
250,857
22,515
240,133
513,505
Charge for the year
4,444
47,575
52,019
Disposals
-
-
-
At 31 March 2022
250,857
26,959
287,708
565,524
Net book value:
At 31 March 2021
-
1,808
88,799
90,607
At 31 March 2022
-
14,930
110,363
125,293|||
|||3
125,293|
## Notes to the Financial Statements
Internet Watch Foundation | Registered Company Number: 03426366 Notes to the Financial Statements for the year ended at 31 March 2022
## **13. Investment in Trading Subsidiary**
Internet Watch Limited is incorporated in England and Wales (company number 03257468) and is a wholly owned subsidiary of Internet Watch Foundation (company number 03426366). The company has been dormant since 2017 and has £nil net assets (2021: £nil).
Within the charitable company balance sheet, the investment in the subsidiary is held at a cost of £2 (2021: £2).
## **14. Investments**
|Investment in dormant subsidiary company at cost
Investment portfolio
Net assets
Investment portfolio
Market value at 1 April
Additions
Disposal proceeds
Net investment (losses) / gains
Cash movement
Market value at 31 March
Historical cost
Analysed as follows:
UK Fixed Interest Securities
Quoted UK Equities
Quoted Overseas Equities
Alternative markets
Cash|2022
2
1,073,239
1,073,241
2022
Total
£
544,093
306,342
(230,949)
27,025
426,728
1,073,239
1,009,833
2022
£
85,686
153,763
220,032
169,772
443,986
1,073,239|2021
2
544,093|
|---|---|---|
|||544,095|
|||2021
Total
£
471,905
319,135
(236,505)
70,900
(81,342)|
|||544,093|
|||501,851
2021
£
75,503
175,194
171,297
104,841
17,258|
|||544,093|
**42** IWF Trustees’ Report // 31 March 2022
Notes to the Financial Statements **43**
## Notes to the Financial Statements
Internet Watch Foundation | Registered Company Number: 03426366 Notes to the Financial Statements for the year ended at 31 March 2022
|**15. Debtors**
Trade debtors
Prepayments and accrued income|2022
£
496,118
733,373
1,229,491|2021
£
656,717
1,011,787|
|---|---|---|
|||1,668,504|
||||
|**16. Creditors: amounts falling due within one year**
Trade creditors
Other tax and social security
Accruals and deferred income
Deferred income
Deferred income at 1 April
Income deferred during the year
Amounts released from previous years
Deferred income at 31 March|2022
£
43,592
69,940
2,318,127
2,431,659
2022
£
2,249,957
2,196,212
(2,249,957)
2,196,212|2021
£
50,175
87,450
2,346,492|
|||2,484,117|
|||2021
£
1,705,698
2,249,957
(1,705,698)|
|||2,249,957|
_Deferred income relates to subscriptions, license fees and car park rentals._
## Notes to the Financial Statements
Internet Watch Foundation | Registered Company Number: 03426366 Notes to the Financial Statements for the year ended at 31 March 2022
## **17. Leases**
Total future minimum lease payments under non-cancellable operating leases are as follows
|No later than one year
Later than one year and no later than fve years|No later than one year
Later than one year and no later than fve years|Land and buildings
Equipment
Equipment
2022
2021
2022
2021
£
£
£
£
245,538
245,538
1,547
2,652
266,000
511,538
0
1,547|Land and buildings
Equipment
Equipment
2022
2021
2022
2021
£
£
£
£
245,538
245,538
1,547
2,652
266,000
511,538
0
1,547|
|---|---|---|---|
|||511,538
757,07|6
1,547
4,199|
|||||
|**18a. Funds analysis - current year**
Unrestricted funds
General funds
Total general funds
Designated funds
Technical fund
Premises fund
Total designated funds
Total unrestricted funds
Restricted funds
EU SIC UK V
EU SIC UK VI
EU SIC UK Childnet
UNICEF
Technical Project
Nominet UKSIC
CSSF
Thorn
EVAC Chatbot
Special Project
DCMS
Home Ofce
Miscellaneous
Total restricted funds
Total funds|Balance at
Gains /
Balance at
01/04/2021
Income Expenditure
Transfers
(Losses)
31/03/2022
£
£
£
£
£
£
2,894,686
3,711,861
(1,776,294)
(1,584,724)
27,025
3,272,554|||
||2,894,686
3,711,861
(1,776,294)
(1,584,724)
27,025
3,272,554
-
-
-
500,000
500,000
-
-
-
500,000
500,000|||
||-
|-
-
1,000,000
-
1,000,000||
||2,894,686
3,711,86|1
(1,776,294)
(584,724|)
27,025
4,272,554|
||-
-
-
-
-
-
-
354,738
(784,488)
429,750
-
-
-
117,988
(117,988)
-
-
-
-
7,577
(33,932)
26,355
-
-
-
143,660
(143,660)
-
-
-
-
130,758
(261,515)
130,757
-
-
-
-
-
-
-
-
66,630
293,875
(221,859)
(2,138)
-
136,508
-
164,786
(164,786)
-
-
-
-
108,026
(108,026)
-
-
-
-
104,500
(104,500)
-
-
-
-
350,000
(350,000)
-
-
-
-
7,500
(7,500)
-
-|||
||66,630
1,783,408
(2,298,254)
584,724
-
136,508|||
||2,961,316
5,495,26|9
(4,074,548)
|-
27,025
4,409,062|
**44 IWF Trustees’ Report // 31 March 2022**
Notes to the Financial Statements
**45**
## Notes to the Financial Statements
Internet Watch Foundation | Registered Company Number: 03426366 Notes to the Financial Statements for the year ended at 31 March 2022
## **18b. Funds analysis - prior year**
|Unrestricted funds
General funds
Total general funds
Restricted funds
EU SIC UK V
EU SIC UK VI
EU SIC UK Childnet
UNICEF
Special Project
CSSF
Thorn
EVAC Chatbot
Self Gen Campaign
Facebook Report Remove
Total restricted funds
Total funds|Balance at
Gains /
Balance at
01/04/2020
Income Expenditure
Transfers
(Losses)
31/03/2021
£
£
£
£
£
2,058,105
3,213,792
(1,982,847)
(465,264)
70,900
2,894,686
2,058,105
3,213,792
(1,982,847)
(465,264)
70,900
2,894,686
-
384,498
(701,099)
316,601
-
-
-
127,393
(242,242)
114,849
-
-
-
48,573
(48,573)
-
-
-
-
40,188
(133,692)
93,504
-
-
150,412
(98,707)
(51,705)
-
-
-
229,900
(228,313)
(1,587)
-
-
-
116,339
(43,311)
(6,398)
-
66,630.00
-
51,344
(51,344)
-
-
-
-
63,025
(63,025)
-
-
-
-
100,000
(100,000)
-
-
-
-
1,311,672
(1,710,306)
465,264 -
66,630
2,058,105
4,525,464
(3,693,153)
-
70,900
2,961,316|
|---|---|
## **Notes to the Financial Statements**
**Internet Watch Foundation | Registered Company Number: 03426366 Notes to the Financial Statements for the year ended at 31 March 2022**
## **18c. Funds analysis - description of funds**
## **Restricted funds**
**EU SIC UK V & VI Grant – These funds represent a grant from the European Union in respect of assistance in meeting the costs of running the Hotline. A transfer was made from unrestricted funds to ensure that the EU SIC UK V grant fund does not go into defcit. There are no unfulflled conditions relating to amounts recognised during the year.**
**EU SIC UK VI Childnet – These funds represent a grant from the European Union in respect of assistance in meeting the costs of running UK Safer Internet Day and supporting schools to ensure that all children are educated around online safety.**
**UNICEF Grant – These funds represent a grant from United Nations International Children’s Emergency Fund in respect of the End Violence Against Children grant. A transfer was made from unrestricted funds to ensure that UNICEF grant does not go into defcit. There are no unfulflled conditions or contingencies relating to amounts recognised during the year.**
**Technical Project – These funds represent a grant from Nominet in respect of developing technologies to assist IWF in the detection and removal of child sexual abuse material.**
**Nominet UKSIC – These funds represent a grant from Nominet in respect of assistance in meeting the costs of running the Hotline, as part of UKSIC. A transfer was made from unrestricted funds to ensure that the Nominet UKSIC grant fund does not go into defcit. There are no unfulflled conditions relating to amounts recognised during the year.**
**CSSF – These funds represent a grant from the Confict, Stability and Security Fund in respect of raising awareness in Uganda and Zambia of reporting CSAM and capacity building for law enforcement and Child Helplines.**
**Thorn – These funds represent a grant from Thorn to employ a dedicated taskforce to undertake the hashing of two million images in the UK Home Ofce owned Child Abuse Image Database (CAID).**
**EVAC Chatbot – These funds represent a grant from the End Violence Against Children Fund to support the development of a chatbot aimed at internet users at risk of viewing CSAM. This project is a partnership between IWF and The Lucy Faithful Foundation. The chatbot will engage individuals searching for CSAM online and encourage them to seek help to change their behaviour.**
**Special Project – These funds represent various grants and contracts, such as contributions to the Neural Hashing database and developing our international portals; contributions from TikTok and the UK Home Ofce to enhance the Self Gen Campaign which aims to prevent the development and circulation of youth-produced sexual imagery; funds received from MTN towards a CSAM awareness campaign, and a contribution from BT towards our Annual Report launch.**
**DCMS – The funds represent a grant from DCMS for child online safety work relating to the UKSIC, specifcally to assist in the mission to promote the safe and responsible use of technology for young people.**
**Home Ofce – These funds represent a grant from the Home Ofce to allow expansion of the Hotline, and the dedicated taskforce hashing two million images in the UK Home Ofce owned Child Abuse Image Database (CAID). Miscellaneous - These funds are from Cyacomb for the development of a CSAM contraband flter.**
## **Designated funds**
**Technical Fund – These funds represent a designated fund generated to meet future technical IT developments and requirements.**
**Premises Fund – These funds represent a designated fund generated to meet future changing demands of business accommodation.**
**46** IWF Trustees’ Report // 31 March 2022
**Notes to the Financial Statements**
**47**
## **Notes to the Financial Statements**
**Internet Watch Foundation | Registered Company Number: 03426366 Notes to the Financial Statements for the year ended at 31 March 2022**
## **19. Related party transactions**
**Internet Watch Foundation works in partnership with the UK internet industry, police, government departments and Hotlines in other countries in order to minimise the availability of specifc illegal content found online. Member companies subscribe to the Internet Watch Foundation with subscription levels ranging from £1,000 to in excess of £84,000. Some Trustees also work for Member companies but do not have any direct infuence on transactions undertaken with Internet Watch Foundation.**
**The Chair received £31,725 (2021: £28,625) during the year in respect of his duties in ofce.**
**There were no other related party transactions in the year other than those described in note 9.**
## **20. Reconciliation of net expenditure to net cash flows from operating activities**
|||**2022**
**£**|**2021**|
|---|---|---|---|
||||**£**|
|||||
|**Net (expenditure) / income for the reporting period**||**1,447,746**|**903,211**|
|**(as per the statement of fnancial activities)**
**Adjustments for:**||||
|**Depreciation charges**||**52,019**|**29,900**|
|**Loss on disposal of fxed assets**
**Losses / (Gains) on investments**
**Decrease / (Increase) in debtors**
**(Decrease) / Increase in creditors**
**Bank interest received**
**Dividends received from investments**
**Cash account movement**
**Net cash provided by operating activities**||**0**
**(27,025)**
**439,013**
**(52,458)**
**(692)**
**(7,181)**|**144**|
||||**(70,900)**|
||||**(804,694)**
**557,898**
**(1,824)**|
||||**(5,943)**|
|||**(426,728)**
**1,424,694**|**81,342**|
||||**689,134**|
|||||
|**21. Net Debt Reconciliation**|**Balance at**
**Cash**
**Balance at**|||
|**Cash in hand**|**31/03/2021**
**Movement**
**31/03/2022**
**2,927,752**
**1,484,944**
**4,412,696**|||
|**Investments - short term deposits**|**214,475**
**(214,475)**
**0**|||
|||||
|**Total cash and cash equivalents**|**3,142,227**
**1,270,469**
**4,412,696**|||
**Internet Watch Foundation W** iwf.org.uk Discovery House **E** media@iwf.org.uk Chivers Way **T** +44 (0) 1223 20 30 30 Histon Cambridge CB24 9ZR
_Charity number: 01112398 - Company number: 03426366_
Search: Internet Watch Foundation
**48 IWF Trustees’ Report // 31 March 2022**