**Company Number: 615259 Charity Number: 206504** 

## **THE INTERNATIONAL INSTITUTE FOR STRATEGIC STUDIES** 

**ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2021** 



**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

## **CONTENTS** 

## **Annual Report and Financial Statements** 

- 1 Strategic Report and the Report of the Trustees 

- 19 Independent Auditor’s Report to the Members of The International Institute for Strategic Studies 

- 22 Consolidated Statement of Financial Activities 

- 23 Consolidated Balance Sheet 

- 24 Charity Balance Sheet 

- 25 Consolidated Cash Flow Statement 

- 26 Notes to the Financial Statements 



**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

## **STRATEGIC REPORT AND THE REPORT OF THE TRUSTEES** 

The Trustees present their report for the year ended 30[th] September 2021. This incorporates the Directors’ report, which has been prepared in accordance with the Companies Act 2006 and FRS102, and the Strategic Report. The accounts comply with current statutory requirements, the Memorandum and Articles of Association and the Statement of Recommended Practice ‘Accounting and Reporting by Charities’ (SORP). 

The primary role of the International Institute for Strategic Studies (referred to as ‘IISS’ or ‘the Institute’) is to enhance public understanding of questions of international security, help to provide policy makers with facts and analysis to inform and advise their decision-making, and contribute to improved defence diplomacy and conflict resolution. 

## **Strategy** 

The Institute’s medium- to long-term strategy comprises four elements as follows: 

1.  to provide facts and analysis on the sources of conflict, however caused, which may provoke the use of organised military force, and to examine the changing nature and use of organised force in international affairs; 

2.  to provide facts and analysis on the nature of political, geopolitical and geo-economic risk and advise governments and the private sector on measures that can be taken to mitigate that risk; 

3.  to provide an independent platform for intergovernmental consultations on geopolitical and geoeconomic issues in private and public settings, supported by the facts and analyses developed by the Institute; and 

4.  to sustain a network of experts in these matters on the permanent staff, on a part-time consulting basis and also generally among an engaged cohort of the individual membership. 

The Institute measures the success of this strategy in the following ways: 

- evidence of senior government leaders internationally seeking IISS independent analysis 

- • attendance at its dialogues and conferences by government officials, international business and media representatives from around the world. 

- evidence that the Institute has contributed to improved defence diplomacy and conflict resolution, as confirmed to IISS by government officials 

- continued diversification of funding from governments, the private sector, charitable foundations and individuals to maintain a significant body of research across a broad range of thematic and regional programmes. 

- worldwide demand for its publications and databases. 

During the year ended 30 September 2021, Institute activities continued to be impacted by the COVID-19 pandemic, with restrictions forcing IISS office closures and the postponement or cancellation of in-person events. The Institute has minimised disruption to productivity by improving its virtual capabilities and providing staff with necessary equipment to ensure they could successfully deliver their roles from home during lockdowns. COVID-19 safety measures introduced across all offices have ensured a safe working environment for those staff who needed to attend the office. Where possible, and in close consultation with funders, conferences and workshops have been converted into online webinars or hybrid events to ensure the Institute is able to retain its convening power. Where virtual events were not feasible, alternative activities were agreed with funders to meet project deliverables. As a result, there has been minimal impact on revenue, and the IISS took no COVID-related UK government support, furloughed no staff, and made no COVID-related redundancies. The Trustees have expressed gratitude for the way in which the COVID-19 restrictions have been handled by IISS management to reduce disruption to Institute activities, ensure staff safety and minimise any financial loss. 

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**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

Despite these challenges, the Institute achieved the main objectives set by the Trustees for the year, which included the expansion of its research output, convening activity and dissemination of its publications, enhanced digital content, and widening the Institute’s international network and global coverage. More details can be found in the _Achievements and Performance_ section on pages 3 to 8. 

## **Research, Dissemination and Digital Content** 

The IISS continues to update and expand its digital channels. The podcast episodes of both _Sounds Strategic_ and the new _Japan Memo_ were downloaded over 78,000 times during the past year by audiences across its top territories of the US, the UK, Australia, Germany and Japan. The Institute’s website audience continues to grow, with over 1.6 million users, and increasing engagement with IISS webinars, blogs and research reports, as well as flagship publications and events. 

Over the past year, IISS social media activities generated over 25 million impressions and 500,000 engagements across our channel portfolio. The Institute’s overall audience reach grew by 19% to 316,000. The strongest growth was seen on the LinkedIn channel, with 104,000 followers, representing a 40% increase. Twitter continues to be a key channel growing by 10% to 150,000 followers. YouTube is a strategic channel for IISS online activities where recorded and livestreamed events generated 280,000 views, a growth of 33% year-on-year. The IISS YouTube channel also gained over 4,500 new subscribers. 

The trend over the last few years has been for media coverage to peak around the IISS Manama and Shangri-La Dialogues. This trend changed in 2020 and continued into 2021, mostly due to Covid-19 restrictions which required IISS to convert the 2020 Manama Dialogue into a hybrid event and cancel the 2021 Shangri-La Dialogue. This dip, however, was supplemented with an expansion of the breadth of coverage throughout the year. Following the launch of _The Military Balance_ in 2021, the sub-brand received over 800 unique mentions in news media articles across 50 countries. 

Survival is the Institute’s most-read publication with 375,387 downloads in 2020 and is steadily gaining readership. As of September, downloads of Survival articles for 2021 were 40,465 higher than they were at the same point in 2020. Sales of print copies had also risen as of September 2021 with 330 sales versus 218 for same period last year. 

The _Cyber Capabilities_ report, launched in June 2021, was a particular success this year. The report generated over 300 pieces of unique coverage across broadcast and digital media in 20 languages. 

Reactive highlights in this reporting period included the AUKUS announcement, regular commentary on the Belarus elections, and the Afghanistan military withdrawal, all of which allowed the Institute to take many opportunities to share wider IISS data and expertise with the media. 

## **Convening power** 

The Institute continued to extend its platforms for intergovernmental consultation and dialogue, in both private and public settings, to improve defence diplomacy and conflict resolution. In all cases, the Institute was able to create informed debate, develop new networks of contacts and engage governments, the private sector, the international expert and opinion-forming community, and IISS members in both open debates and confidential discussions to improve mutual understanding of differing positions and promote new policy approaches. 

During the year, the Institute convened 110 events in 5 countries with 8,912 attendees from over 100 countries. 

The Institute also continued to deploy its convening power and analytical excellence informally via meetings between senior research staff and leading government figures and policy makers from a range of countries. At these meetings the Institute is able to leverage its global reach and data-based approach to analysis to provide information on which strategically important policy decisions can be made at the highest level. 

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**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

## **Global coverage and international strategic network** 

Investment in analytical expertise and in enhancing the role of its four international offices has been a core focus of the Institute in recent years in order to bring a powerful global perspective to all of its work, as well as engendering the widest possible engagement on issues of international security. 

Details about the activities of the international offices can be found on pages 14-15. 

## **OBJECTIVES AND PRINCIPAL ACTIVITIES** 

The Institute’s declared objects are ‘ _to promote on a non-party basis the study and discussion of and the exchange of information upon any major international security issues including without limitation those of a political, strategic, economic, social or ecological nature, and to promote conflict resolution by facilitating discussion and dialogue and publishing analysis on major international security issues to assist and promote the resolution of conflicts between or within nations’_ . 

The Institute aims to achieve these objects by providing to IISS members, governments, international organisations and the wider public the best possible objective information on military and political developments relevant to the prospects, course and consequences of conflict having an important military dimension. In furtherance of its objectives, the Institute: 

- delivers a comprehensive research programme committed to advancing wider understanding of constantly evolving global security issues; 

- convenes government officials, independent analysts, business-people and journalists to advance understanding of political, military, economic, environmental and societal trends in the subjects addressed by the Institute's work; 

- continues to enhance the online content offered through iiss.org to maximise global access to its research and analysis; and 

- maintains an international network of influential and knowledgeable individuals, corporate entities, governments and others as an audience for its research and publications. 

The Institute’s achievements against its objectives are discussed under the heading ‘ _Achievements and Performance’_ below. 

The Institute’s ‘statement of values’ and ‘policy on financial transparency confidentiality and effectiveness,’ published on the IISS website, reaffirm the IISS’s commitment to full independence and excellence in all activities, along with the Trustees’ determination that fundraising is maintained with the twin aims of guaranteeing the Institute’s independence of thought and analysis, as well as maintaining the Institute’s effectiveness as a strategic actor in a complex international environment. 

The charity had no fundraising activities requiring disclosure under provisions of section 13 of the Charities (Protection and Social Investment) Act 2016. 

## **ACHIEVEMENTS AND PERFORMANCE** 

## **Research Programmes** 

As an independent, non-partisan and international policy institute, the IISS is committed to advancing wider understanding of the critical security issues of the 21[st] century and their potential trends or resolution. A comprehensive research programme covers these challenges and responds to them both thematically and regionally. The 30-member IISS Advisory Council, composed of distinguished members from around the world, assists the Institute on the intellectual direction of its activities. The programme has been defined under the broad categories of War, Power and Rules covering five thematic and seven regional concentrations: 

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**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

- Defence and Military Analysis 

- Geo-Economics, Geopolitics and Strategy 

- Strategic Technologies and Arms Control 

- Cyber, Space and Future Conflict 

- Conflict, Security and Development 

- Latin America 

- Asia-Pacific 

- Europe 

- Middle East, North Africa and the Gulf 

- Japan Chair Programme 

- South Asia 

- Transatlantic Security 

IISS research programmes actively contribute to a range of government and corporate briefings, convening external and IISS member events, delivering podcasts, and producing research and analysis for the wide range of IISS publications. More recently, the Institute has paid increasing attention to facilitating dialogue and conflict-resolution. This is achieved by bringing together parties under dispute in ‘track-two’ meetings, to discuss differences and consider how common interests can be advanced. 

In the period under review, IISS research and research-related activities achieved notable impact on a number of fronts. The following is a list of key examples. 

- In September 2021, the Defence and Military Analysis Programme (DMAP) published a report on _Cruise Missiles in the Middle East_ and in February 2021 DMAP completed a project on _China’s Digital Silk Road: integration into national IT infrastructure and wider implications for Western defence industries_ . Throughout the year, DMAP implemented the Missile Dialogue Initiative project, convening a series of meetings and publishing several research papers in this framework, and worked on emerging challenges for European security; a comparative study on arms export policies; as well as patterns of conflict and cooperation in the High North and the Arctic. 

- The Strategy, Technology and Arms Control (STAC) programme, formerly called the NonProliferation and Nuclear Policy programme, had a productive year, with grant awards from the UK’s Foreign, Commonwealth and Development Office, and the EU Non-proliferation and Disarmament Consortium. The programme delivered three major reports: an open-source assessment of Iran’s missile capabilities and proliferation activities; a thorough accounting of North Korean strategic capabilities, produced in collaboration with the Moscow-based Center for Energy and Security Studies; and an analysis on strengthening the Missile Technology Control Regime and the Hague Code of Conduct against Ballistic Missile Proliferation. It also completed the _Project Atlas_ platform, an interactive website with extensive data concerning Middle Eastern countries’ defence capabilities. The programme organised two in-person workshops (and several virtual ones) that discreetly brought together experts and officials from the United States, Europe, Iran, and Arab countries to explore solutions to their differing security perspectives. Finally, a series of workshops were convened, and a set of _Survival_ articles published, which focused on restarting talks with North Korea over the verifiable dismantlement of its nuclear capability. 

- The Geo-economics, Geopolitics and Strategy Programme launched the first phase of the _China Connects_ database and interactive map on China’s Digital Silk Road (DSR). The launch took place at Bloomberg’s New Economy Forum in November 2020. In 2021, the team has worked on the second phase of the project, collecting data on China’s broader Belt and Road Initiative (BRI). Work also started on upgrading the platform for the database to improve useability. The team also continued to work on two related printed volumes, the BRI strategic dossier and the DSR Adelphi. 

- The Japan Chair Programme contributed an extended piece to the _Asia-Pacific Regional Security Assessment 2021_ on Japan’s security policy and China and wrote an Adelphi book on Japan’s effectiveness as a geo-economic actor, which is due for publication in 2022. The Programme held a series of workshops on the theme of ‘Mobile network security for 5G and beyond, prospects for an open architecture model’, which also discussed prospects for Open-RAN technologies. The Programme also completed a major report on Japan’s relations with the Gulf and launched a new podcast series ‘ _Japan Memo_ .’ 

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**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

- The Cyber, Space and Future Conflict programme released its ground-breaking dossier on _Cyber Capabilities and National Power: A Net Assessment_ . It had a notable impact globally, through media coverage and follow-up briefings for governments and several corporations. This cyber power project continues with an additional ten country studies to be published in early 2022. The programme also published widely read analyses of future conflict in article form, addressing the integration of cyber and space issues into military planning, with a special focus on the US, China and Russia. This work involved regular contact and briefings with military and policy leaders in Europe and the US, including testimony to a US Congressional Committee. 

- The Asia-Pacific research programme has continued to develop its work on important new areas of interest to the Institute's main constituencies, including a focus on major power relations, the South China Sea dispute, and medium powers' security and defence policies in the region. A major published output from the programme was the _Asia-Pacific Regional Security Assessment 2021_ . 

- The Middle East programme remained active, producing analysis that was featured across all IISS platforms and received attention among government audiences and the media. The research team published longform analysis on the impact of the Covid-19 pandemic on the security and politics of the Middle East, on the geopolitics of the Red Sea, and on the developing ties between the Gulf states and key Asian powers. The Programme also assessed the repercussions on the Middle East of the presidency of Joe Biden, examining how US retrenchment and the decision to restart nuclear diplomacy with Iran are shaping relations among Middle Eastern states. 

- With the inclusion of ‘defence and security’ as one of five key ‘pillars’ of the official UK-India Roadmap to 2030 (4 May 2021), Rahul Roy-Chaudhury, Senior Fellow for South Asia, regularly briefed the FCDO and MoD on these issues and was appointed as a member of a new UK-India Advisory Council, chaired by the UK Minister of State for South Asia. The South Asia programme launched a major research report, followed by regional media and government outreach, _Nuclear Deterrence and Stability in South Asia: Perceptions and Realities_ was published in May 2021. In the immediate aftermath of the Taliban take-over of Afghanistan, the Programme organised a virtual interaction on Afghanistan with India’s National Security Advisory Board (NSAB). On 24-26 September 2021, an ‘in-person’ off-the-record regional security conference was held in Bahrain. This brought together Indian and Pakistani officials and experts ‘face-to-face’ for the first time after the Taliban take-over to discuss its impact on regional security and on India-Pakistan tensions. Non-Taliban senior political leaders spoke virtually from Kabul; UK FCDO officials and US experts also participated. 

- The Conflict, Security and Development programme (CSDP) activities included the publication of the Armed Conflict Survey 2021 (as referenced below) and the completion of the ‘Stability in the time of COVID-19’ series, supported by PMI. This project explored the coronavirus pandemic’s diverse impact on stability across the world through a series of policy papers. 

## **Publications** 

While this year saw uncertainty over how lockdowns across the globe would affect events and launches, the IISS continued to publish a strong roster of publications. 

_Strategic Comments_ covered a range of international security and political-military topics in 2021. With both paid offerings through Taylor and Francis, and certain editions offered for free via the IISS website, topics published included the relationship between Canada and China, the Islamist insurgency in Mozambique, European demographic decline, the Nord Stream 2 pipeline, and the protest movement in Belarus. 

_Strategic Survey 2020: The Annual Assessment of Geopolitics_ was published in November 2020, providing a comprehensive annual review of world affairs. As well as in-depth essays covering issues relating to world regions, this edition included thematic essays about contemporary issues including the politics of pandemic, climate change, key international legal gaps, US–China relations, Russia: 

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**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

the road to 2024, and the US–Taliban deal. Each regional section included drivers of strategic change, a collection of graphics depicting comparable data on state power and the forces underlying geopolitical change over 20 years. 

In February 2021, the IISS launched the 62nd edition of _The Military Balance_ , providing data and capability assessments for the armed forces of 171 countries. This edition charted the further erosion of the technological advantage enjoyed by Western states in the face of China’s military modernisation and the introduction of new equipment into Russia’s armed forces. Essays included reflections on the future of maritime competition; battle management systems; China’s civil-military integration; and fractures in the arms control environment. The wallchart provided an assessment of the global distribution of submarines and sub-surface warfare capabilities in national inventories. 

The _Military Balance Plus_ database combines multiple years of data and qualitative assessments from _The Military Balance_ with advanced search and graphical capability. During 2021, data holdings in the database expanded further and the IISS added additional countries to its defence spending forecast tool. The 10-year spending projections included in _The Military Balance Plus_ now cover more than 85% of global defence spending. The database represents a step change in defence analysis for the Institute and its core audiences in government, the military and the private sector. 

The Institute’s journal, _Survival: Global Politics and Strategy_ , published six times per year, provides a platform for many of the leading thinkers in the field of international affairs to analyse and debate strategic questions. It included a piece by a distinguished American strategist on Europe’s capacity to defend itself without the United States that stimulated vigorous debate, frank commentary on the 6 January insurrection in Washington, a widely read and authoritative article on Russia’s ‘SolarWinds’ hack, a testily constructive exchange between liberal internationalists and ‘restraint’ realists, and candid views of the United States’ withdrawal from Afghanistan. Also appearing were assessments of the ‘global war on terror’ 20 years after 9/11, a forum on the UN at 75, a piece on the Sino-American strategic rivalry’s effect on transatlantic relations, an article on the future of US–Israel relations, and an analysis of UN operations in South Sudan. 

The annual _Armed Conflict Survey_ launched in September, featured analysis of 34 active armed conflicts, including the humanitarian, social and economic impacts. Covering January 2020 to February 2021, this year included the Armed Conflict Global Relevance Indicator (ACGRI), which is an IISS proprietary indicator assessing the global salience of armed conflict. There were also essays on interventions in armed conflicts and the waning of Western dominance; economic migration, forced displacement and armed conflict in a COVID-19 world; and the long aftermath of armed conflicts. The 2021 Chart of Armed Conflict provided a rich visual overview of factors such as conflict start dates, international interventions, 2020 UN Security Council resolutions, and other highly relevant data. 

The _Adelphi_ book series is the Institute’s principal contribution to policy-relevant, original academic research. Two books were published this year. June saw the publication of _The Responsibility to Defend: Rethinking Germany’s Strategic Culture_ , by Bastian Giegerich, IISS Director of DMAP, and Maximillian Terhalle, which received high praise from members of the Germany’s political community, staff within NATO and other think-tanks. The second _Adelphi_ of the year, _Asia’s New Geopolitics: Military Power and Regional Order_ was launched at the end of September. Authored by five regional experts, this title looked at Asia in the context of three broad strategic trends: declining US willingness to underwrite Asia’s security order, rising US–China tensions, and weakening Asian multilateralism. 

The IISS published its annual assessment of regional security and strategy issues in the Asia Pacific region with the _Asia Pacific Regional Security Assessment 2021_ . Twelve chapters covered a range of issues including urban security challenges, Japan’s security policy and China, South Korea’s security beyond the Peninsula and emerging technologies and future conflict in the Asia–Pacific. 

As well as the regular publications, the IISS continued to release publications in various formats that are disseminated to governments, businesses, think tanks and important thought leaders. In addition to the well-received report _Cyber Capabilities and National Power: A Net Assessment_ , the IISS published reports on Iran’s missile capabilities and proliferation, the various impacts China is having 

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**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

on its region and around the world, and _Emerging Challenges for European Security and Defence_ produced following a meeting of the High-Level Study Group on the Future Defence of Europe, in conjunction with the Hanns Seidel Foundation. 

## **Dialogues, Lecture Series and Conferences** 

The Institute’s international dialogues bring government officials together in a combination of formats, and to address subjects, that they might not be able to coordinate themselves. Under the international auspices of the Institute, it is often easier to arrange for discreet contacts to take place between government officials who wish to meet, but to do so unofficially and away from the public eye. In addition, the Institute organises lecture series and specialist conferences around the globe. 

## **1. The Shangri-La Dialogue** 

Initiated in 2002, the Annual Asia Security Summit (IISS Shangri-La Dialogue) is the most important regular gathering of defence professionals in the region. Governments, the expert community and the media have increasingly viewed the substance and tone of exchanges at the Dialogue as important indicators of the state of the region’s security. The Shangri-La Dialogue provides a platform, which participant countries’ defence ministers and other principals use to elaborate and clarify their countries’ positions on the most important regional security topics of the day. The Dialogue has also been a venue for proposing and advancing defence initiatives and for multiple government bilateral and multilateral meetings which are held around the Dialogue. 

As a result of the ongoing global COVID-19 pandemic situation the Shangri-La Dialogue, scheduled for 4-5 June 2021, was cancelled after close consultation with Singapore’s Ministry of Defence. The Institute plans to convene an exceptionally strong IISS Shangri-La Dialogue in 2022, to be held on 1012 June. The Shangri-La Dialogue will be staged in Singapore with the government’s support until at least 2024. 

## **2. The Manama Dialogue** 

Since its inception in 2004, the IISS Manama Dialogue has become a central element in the Middle East’s security architecture, where national leaders and ministers from the Middle East, North America, Europe, Asia and Africa make major policy statements. Moreover, supported by senior officials, they are offered a bespoke occasion to consult bilaterally and multilaterally on the most pressing security and foreign-policy challenges. 

Owing to the special circumstances necessitated by the COVID-19 pandemic, the 16th IISS Manama Dialogue was conducted as a hybrid event, with participants attending in person and online. The strict health and safety measures implemented by the government of Bahrain and the IISS ensured a safe environment for those who attended the proceedings in Manama. 

The Dialogue was the only significant foreign-policy, defence and security conference held at the height of the pandemic in 2020 and succeeded in attracting an attendance comparable to previous years, while maintaining the standards of previous IISS summits. Participating officials were delighted to resume face-to-face diplomacy after months of social distancing and virtual interaction. Nearly 200 attendees, comprising 98 governmental and non-governmental delegates, and 92 government officials, from more than 20 countries participated in person, while several hundred delegates joined through a bespoke IISS online platform. Despite travel limitations, ten senior journalists representing major regional and global outlets attended, providing important coverage and scrutiny. 

Notably, the 2020 Manama Dialogue hosted Israel’s Minister of Foreign Affairs for the first time. Lieutenant General (Retd) Gabi Ashkenazi’s attendance was testament to the remarkable diplomatic breakthrough achieved by Bahrain and Israel’s signing of the Abraham Accords in September 2020. 

The 2020 Manama Dialogue Young Leaders’ Programme (MDYLP) again brought some of the Middle East’s brightest young strategic thinkers and leaders to the IISS Manama Dialogue to involve them in high-level debate about the current strategic and security challenges facing the region. 

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**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

## **3. Lecture Series** 

The Fullerton Lecture Series brings together major figures in Asia-Pacific and international affairs to speak in Singapore. Due to COVID-19 pandemic restrictions, the IISS was only able to hold one lecture in the last financial year. In July 2021, Lloyd J. Austin III, United States Secretary of Defense, made the case for the US’ role as a reliable partner in helping nations in the Indo-Pacific make their own choices and ‘build back better’ after COVID-19 in his lecture on ‘The imperative of partnership’. 

## **Membership** 

The IISS retains a strong global membership base which comprises a broad spectrum of leading analysts, academics and military and government officials, and international companies. Members are actively connected to international and strategic affairs through the Institute’s research programmes and have access to its opinion-shaping analysis through publications, events, member briefings and international conferences. Individual members are part of a unique global network supporting the work of the IISS and extending the Institute’s reach in the world of international affairs, whilst IISS Corporate Membership is designed to enable corporations and institutions to stay on top of world events by giving them a thorough understanding of international affairs, security issues and geopolitical and military conflicts, and to aid their strategic decision-making. The Institute invites its membership to participate in events held in its offices as well as annual international conferences. 

The Institute holds many discussion meetings each year at its London headquarters and overseas offices in Washington DC, Manama, Singapore and Berlin, featuring IISS and guest speakers. With the ongoing COVID-19 restrictions, the Institute continued to deliver a high number of webinars which have expanded its global audience. Events that attracted notable interest over the past year included: 

The IISS officially opened its Berlin office in September with guests from governments, the private sector and expert community. Germany's Federal Minister of Defence Annegret Kamp-Karrenbauer shared her thoughts during the reception and members of the German Parliament Nils Schmid (SPD), Alexander Graf Lambsdorff (FDP) and Omid Nouripour (Alliance 90/ The Greens) discussed current challenges and opportunities for Germany's international security and defence strategy. 

Hosted virtually in May by the IISS in association with the UK Naval Staff, the _First Sea Lord’s Sea Power Conference_ is the Royal Navy’s flagship conference. The conference discussed the strategic challenges and opportunities in a rapidly transforming global maritime domain, and the maritime contribution to the UK’s overall defence, security, foreign and development policy ambitions as the country reshapes its global role. These challenges and opportunities were addressed in light of the UK government’s Integrated Review of Security, Defence, Development and Foreign Policy, the Defence Command Paper, and the Defence and Security Industrial Strategy. The UK Secretary of State for Defence, the Rt Hon Ben Wallace MP, delivered a keynote address. 

On 30 March, UK Chief of the Defence Staff General Sir Nick Carter launched the _Defence Innovation Talks_ , a new webinar series featuring military, government and business leaders who are driving innovation in defence. General Carter set out his views on UK military reform and defence innovation, explaining how a programme of experimentation will be the foundation upon which transformative future capabilities will be built. 

In a January webinar _‘The great decoupling: China, America and the struggle for technological supremacy_ ’, Nigel Inkster, Senior Adviser for Cyber Security and China at the IISS and Commissioner on the Global Commission for the Stability of Cyberspace, explored how this situation has arisen and what are likely to be its geopolitical implications. 

In December 2020, the IISS virtually hosted a discussion with Ambassador Kay Bailey Hutchison, Permanent Representative of the United States to the North Atlantic Treaty Organization (NATO), on _NATO’s evolving relationship with China_ . Ambassador Hutchison explored how NATO, as the world’s longest standing security alliance, is uniquely placed to bring together like-minded countries to address the security challenges posed by China. 

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**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

## **FINANCIAL REVIEW AND RESULTS FOR THE YEAR** 

For the year ended 30[th] September 2021, total incoming resources were £18,396,000 (2020: £17,016,000). The primary reason for the higher income reported in 2021 was an increase in Dialogue income with the late cancellation of the Shangri-La Dialogue. Funded research events continued to be disrupted by COVID-19 pandemic restrictions and have either been converted into alternative project deliverables or rescheduled until next financial year. 

Total resources expended for the year were £17,583,000, compared to £16,609,000 in 2020, which reflected the increased conference costs arising from the late cancellation of the Shangri-La Dialogue. 

After accounting for net gains on investment assets of £1,196,000 (2020: £53,000 losses); foreign exchange losses of £70,000 (2020: £34,000); and actuarial gains on the defined benefit pension scheme of £149,000 (2020: £56,000 losses); the net movement in funds for the year was a surplus of £2,088,000 (2020: £264,000). 

As at 30[th] September 2021, there was a liability on the defined benefit pension scheme of £556,000 (2020: £741,000). The IISS remains committed to reducing the pension liability through deficit funding plan payments of £48,000 per year. 

Net cash inflow totalled £66,000 for the year (2020: £1,207,000 outflow), leaving total cash balances, including portfolio cash, of £6,213,000 at the year-end (2020: £6,147,000). 

The group reported an improved net current asset position of £1,130,000 (2020: £748,000). Total net assets as at 30[th] September 2021 increased to £26,062,000 (2020: £23,974,000). 

## **Reserves** 

‘Free reserves’ are defined as unrestricted funds excluding designated funds and funds represented by tangible fixed assets, other than those financed by external loans. 

The Institute’s reserves policy has been determined by the Trustees after considering current and projected income streams and the Institute’s expenditure profile. To ensure that the Institute is able to successfully meet its objects, the Trustees aim to hold free reserves equivalent to between 3 and 6 months operating expenditure. This target level of reserves will mitigate the risk of income fluctuations causing delays or cancellations to any expenditure commitments and ensure that planned activities can be completed. Furthermore, in the event of a significant drop in income levels there will be sufficient reserves in place to implement any necessary organisational changes. 

As at 30[th] September 2021, the Institute held free reserves of £6,218,000 (2020: £5,305,000) which equated to approximately 5.5 months (2020: 2 months) of operating expenditure associated with unrestricted funds. Free reserves comprise IISS unrestricted general funds of £19,716,000, less tangible and intangible fixed assets of £14,054,000 and excluding the pension liability of £556,000.  At 30[th] September 2021, IISS restricted funds totalled £202,000 (2020: £71,000) and endowment funds totalled £6,144,000 (2020: £5,691,000). The Trustees continue to review the reserves policy in line with the Institute’s financial resources. 

## **Investment Policy and Performance** 

Cazenove Capital Management Ltd. manages the Institute’s two investment portfolios. As at 30[th] September 2021, the market value of the main portfolio was £5,300,000 (2020: £4,629,000) and the asset allocation was: UK equity funds, 13% (2020: 13%); UK fixed-interest funds, 5% (2020: 7%); International fixed-interest funds, 6% (2020: 5%); International equity funds, 54% (2020: 46%); Portfolio funds 21% (2020: 28%) and Cash 1% (2020: 1%). Investment income for the year to 30[th] September 2021 from this portfolio amounted to £74,000 (2020: £84,000). 

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**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30[th] September 2021** 

The overall investment objective of the main portfolio is to maximise its total return by achieving several percentage points above inflation, in line with constraints over risk. Portfolio performance and asset allocation are closely monitored by the Investment Committee in conjunction with the portfolio managers. The Institute considers this portfolio to be a long-term investment fund and operational cash flow demands are met through operational surpluses. The Investment Committee has adopted a diversified asset allocation strategy in keeping with its appetite for moderate risk. At 30[th] September 2021, portfolio returns over the previous year, three years, and five years as compared to benchmark, which was recently agreed as 100% UK CPI +4%, and the FTSE All Share were as follows: 

|**Total Returns**|**1 year %**|**3 years p.a. %**|**5 years p.a. %**|
|---|---|---|---|
|Portfolio|14.5|5.9|6.2|
|Benchmark|7.1|5.9|6.3|
|FTSE All Share|27.8|3.0|5.3|



The Institute’s second portfolio is an expendable endowment fund, invested in a Charity Multi-Asset Fund (CMAF). The CMAF generates an annual pay-out of 4% and enables the Institute to drawdown the approved funds required to meet all costs associated with the Japan Chair research position. As at 30[th] September 2021, the market value of the Japan Endowment Fund was £6,134,000 (2020: £5,691,000) and the asset allocation was Charity Multi-Asset Fund (CMAF) 100% (2020: 100%), of which 71% was equities (2020: 68%). 

## **The IISS and the Economic Climate** 

The Institute’s Dialogue activities and publications are protected by multi-year agreements that provide guaranteed levels of income. As referenced above, the Institute has received expendable endowment funding in support of a Japan Chair providing guaranteed financial support for a senior research post. 

The Institute’s commercial trading subsidiary, Arundel House Enterprises Limited (AHEL), experienced difficult commercial trading conditions due to ongoing COVID-19 restrictions but minimised any losses on its catering and event activities with a low fixed cost base. 

Despite the continued financial and currency market instability arising from the COVID-19 pandemic and political events such as Brexit, the IISS investment portfolio benefited from a strong rebound in equity market performance during 2021. The Investment Committee continues to monitor closely its diverse portfolio of investment funds that includes non-sterling denominated exposure in equities and bonds. 

The Institute naturally hedges its foreign currency transactions, minimising conversion as far as possible to avoid exchange rate losses. The IISS continues to benefit from consistently low interest rates which determine the cost of borrowing for the Institute’s short-term money market funding. 

## **Financial health** 

As outlined in the Financial Review, the Trustees consider the Institute’s financial health to be sound. As at 30[th] September 2021, the Institute held investment assets totalling £11.4 million and cash on the balance sheet of £6.2m with no loan liabilities, compared to investment assets of £5.5 million, £1.5m of cash and a building loan liability of £5.5 million in 2011, demonstrating a clear strengthening in the Institute’s financial position over the past 10 years. 

As a result of the income security provided by the diverse revenue sources and multi-year funding arrangements outlined above, and in considering budgets and forecasts covering the period to 30[th] September 2024, the Trustees are confident that the Institute can be considered a going concern for the foreseeable future. Accordingly, there are no material uncertainties surrounding the preparation of the financial statements on a going concern basis. The global nature of IISS operations and funding sources has also contributed towards further income diversity that has helped to mitigate risk during this time of continued economic uncertainty. 

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**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

## **PRINCIPAL RISKS AND UNCERTAINTIES** 

The Trustees have assessed the major risks to which the charity is exposed, in particular those related to the operations and finances of the Institute and are satisfied that systems are in place to manage exposure to the major risks. The measures to mitigate against the continued impact of the COVID-19 pandemic on IISS activities and finances are detailed below. The Trustees are satisfied that, as a result of the Institute’s response to the pandemic, there has not been any material financial loss arising from COVID-19 and the risk of such a loss in 2022 is low. 

The most significant potential risks, as identified by the Institute’s Risk Register, are actively managed in the following manner: 

|Damage to the<br>Institute’s<br>reputation|As reiterated in the Institute’s ‘Statement of Values’ and ‘Policy on financial<br>transparency confidentiality and effectiveness’, the IISS firmly states and<br>demonstrates its commitment to independence and excellence when conducting<br>all activities, with staff training in place to ensure awareness and understanding<br>of the Institute’s policy. Trustees have oversight over potential donors and<br>funding sources. Despite ongoing COVID-19 restrictions, IISS has continued to<br>meet contractual obligations and funder expectations by successfully converting<br>activities into hybrid and virtual events or agreeing alternative deliverables.|
|---|---|
|A material<br>weakening in the<br>Institute’s<br>financial position<br>and funding<br>levels|Continued efforts to diversify revenue streams to ensure no over-reliance on one<br>source of income. Multi-year agreements are in place for key funders. Liquidity<br>and foreign exchange positions are monitored regularly through weekly cash<br>flow forecasts and external currency specialists. A well-diversified investment<br>portfolio mitigates risk in the event of poor performance of any one asset class.<br>A three-year forecasting and response-planning model is updated regularly and<br>monitored by the Trustees. As above, adaptation of activities to ensure<br>contractual and funder obligations are met.|
|A major failure of<br>the Institute’s IT<br>systems caused<br>by internal or<br>external factors|Principal systems, architecture and software (including cloud servers, fail-over,<br>disaster recovery, and protective programmes) have been designed drawing on<br>external professional advice to provide best practice stability and security. In<br>recognition of the increasing cyber threat, additional security measures have<br>been introduced to detect and counter attacks.|
|Failure to<br>maintain the<br>existing high level<br>of Institute staff<br>expertise|Retention measures in place include competitive pay, benefits and working<br>conditions. The competency framework ensures well-structured performance<br>and development reviews. Consulting Fellows and membership base are drawn<br>on when in-house expertise is not available. Adapted working practices enable<br>staff to work from home and COVID-19 safety measures across all offices.|



In addition to the review of the risk register by senior management, the Audit Committee and the Trustees, financial performance is evaluated at the Trustee meetings held four times each year. The Institute’s investments and financial resources are monitored by the Investment Committee, which meets four times a year. Ongoing internal controls over these risks, as well as measures to mitigate exposures and financial loss, are exercised on a daily basis by the Institute’s Directing staff. 

## **FUTURE PLANS** 

Looking ahead, the IISS remains focused on its mission to shape and enable strategic discussion and inter-governmental dialogue, and to provide impartial analysis on major international security issues as a means of informing the public debate and assisting conflict resolution and prevention. The Institute will continue to fulfil this mission through its primary activities of research, dialogues, conferences, lectures, publications, online databases and outreach to governments, the private sector 

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**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30[th] September 2021** 

and the expert and opinion-forming communities. The main objectives for the forthcoming year ending 30th September 2022 are: 

- **Research** – the Institute will continue to produce new research and analysis under the rubrics of War, Power and Rules. Under War, the IISS will address the changing shape of conflict, cyber and space warfare, and the security-development nexus, as well as refining the state of the art of defence economics and conflict monitoring. The Power stream will include geo-economics and strategy, the strategic consequences of China’s Belt and Road Initiative, economic and financial sanctions in a multipolar system, changing regional alliances, and the use of influence networks by challenger states such as Iran, Turkey, China, and Russia. The Rules stream will address the changing nature of international law and the requirement to continue to modernise the ‘rulesbased order. It will also consider arms control and non-proliferation in the fields of AI, robotics and unmanned vehicles, and international action to combat and mitigate the effects of climate change, as well as how technical standards and commercial regulations are increasingly wielded as instruments of international statecraft. 

- **Digital content -** In 2022 the IISS will aim to continue to grow its _Military Balance Plus_ customers in government, the private sector, and the analytical community in order to generate a strong revenue stream to support IISS research and the Institute’s overall mission. Additionally, the Institute will continue to develop other forms of digital content, such as interactive maps, as alternative means to present the Institute’s research and analysis and engage more widely with IISS stakeholders. 

- **Overseas offices** – Investment in its international offices and staff remains a priority to ensure that all research activity is infused with both local and regional expertise yet blended with an international perspective, while also reaching the widest possible audience and engaging a new generation of young analysts internationally. During next year, the priority will be to deepen IISS engagement with European powers, expand the IISS analytical footprint in Berlin through the new IISS Europe office, and diversify the funding base of the IISS across all regions. 

- **Fundraising –** During 2022, the Institute will continue in its efforts to identify opportunities for major annual gifts or for the establishment of expendable research endowments at the IISS to support pertinent research positions. 

## **STRUCTURE, GOVERNANCE AND MANAGEMENT** 

The Institute is governed by Articles of Association lodged with the Registrar of Companies and the Charity Commission for England and Wales. 

The Institute’s Articles of Association reflect current best practices and the requirements of the Companies Act 2006 and recognise the fiduciary responsibilities carried by the Institute’s Trustees. Revised Articles of Association were formally lodged with the Charity Commission on 2[nd] May 2019. 

The Trustees constitute Directors for the purposes of the Companies Act, and act as Trustees for the purposes of the Charities Act. As required by the Articles of Association, all are Members of the Institute. They receive no remuneration for their services. Upon appointment new Trustees are provided with an induction pack, which includes copies of the Institute’s governing documents as well as information about the Institute’s activities and finances. Training is available for all Trustees at any time as required. 

In accordance with the Articles of Association, a Trustee can be elected by ordinary resolution or by a decision of the Trustees. A new Trustee may be proposed and considered for election by the existing Trustees. The Trustees delegate the exercise of certain powers in connection with the administration of the Institute as set out below. 

The Trustees are aware of the Charity Governance Code published in 2020 which sets out the principles and recommended practice for good governance within the sector. The Institute has 

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**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

reviewed its current governance arrangements against the principles within the code and addressed any issues raised where required. 

## **Audit Committee** 

The task of monitoring the Institute’s financial control systems and the management of major risk is delegated to the IISS Audit Committee. The current membership of the Audit Committee is: 

Chris Jones (Chair of Committee & Honorary Treasurer) Catherine Roe Jens Tholstrup Matt Symonds 

## **Investment Committee** 

The IISS Investment Committee is empowered to receive advice from the Investment Managers and to vary the investment policy at any time. The current membership of the Investment Committee is: 

Chris Jones (Chairman of Committee & Honorary Treasurer) Grace Skaugen Jens Tholstrup Matt Symonds 

## **Trustee Remuneration and Employment Committee** 

The IISS Remuneration Committee is responsible for the annual review of the Director-General and Chief Executive’s remuneration package, with oversight of the Institute’s overall human resources policies. The current membership of the Remuneration Committee is: 

Bill Emmott (Chair of Committee and Chair of the IISS Trustees) Chris Jones (Honorary Treasurer) Caroline Atkinson 

## **Nominations Committee** 

The IISS Nominations Committee is responsible for proposing new Trustees to the Board. The current membership of the Nominations Committee is: 

Bill Emmott (Chair of Committee and Chair of the IISS Trustees) Catherine Roe Matthew Symonds 

## **Donation Acceptance Committee** 

The IISS Donation Acceptance Committee was formed in 2018 to assist the Trustees in fulfilling their responsibilities for the financial health, ethical standards, and global reputation of the IISS when considering the acceptance of philanthropic donations. The Committee was disbanded in January 2021 when it was agreed that the review of philanthropic donations should be aligned with existing review processes for all other IISS funding sources and would fall to all Trustee members. 

## **Director-General and Chief Executive** 

The Director-General and Chief Executive is responsible for the day-to-day management of the Institute’s affairs and for implementing policies agreed by the Trustees. The Director-General and Chief Executive is assisted by senior management. 

13 



**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

## **Remuneration Policy** 

The IISS’s remuneration policy and practices reflect the Institute’s objectives of good governance combined with the need to attract and retain the best talent internationally. This policy aims to support the sustained growth and development of the Institute and its employees and to ensure that the Institute is able effectively to carry out its mission to provide objective information and analysis on geopolitical change as well as facilitate conflict resolution and the maintenance of international peace and security. 

The Institute’s Staff Remuneration Committee, which consists of the Director-General and Chief Executive; the Director of Finance; and the Director of Human Resources, carries out an annual salary review with increases awarded for individual performance linked to a ‘competency framework’. This review incorporates IISS key management personnel, with the exception of the Director-General and Chief Executive. Salaries are positioned between the upper end of the charitable sector and middle of the corporate sector to ensure the Institute can compete globally in recruiting and retaining talent from the private sector, governments, and the international expert community. A review of market rates with reference to available salary surveys is undertaken regularly. 

As referenced above, the IISS Trustee Remuneration and Employment Committee annually reviews the remuneration package of the Director-General and Chief Executive and the Institute’s overall human resources policies, including salary rates and staff benefits. Remuneration packages may consist of fixed elements such as salary, pension, life assurance and private medical insurance; and a variable element of a discretionary performance-based bonus payment. Employee benefits are reviewed annually. 

The Trustees are invited to approve annually the staffing and salary budget and forecast for the year. This includes senior management. No Trustees are remunerated but travel expenses are reimbursed. 

## **Public Benefit** 

The Trustees have given due consideration to the Charity’s Commission’s published guidance on the Public Benefit Requirement under the Charities Act 2011. 

The beneficiaries of the Institute include individuals and organisations within the political, diplomatic, defence and academic fields, the public in general, international agencies and governments worldwide. The interests and concerns of these groups are constantly evolving, and the charity's development is influenced by the need to continue to address their current interests and concerns. As clearly evidenced in this report, the Institute has successfully reached these audiences during the year under review. 

In the UK, the Institute’s staff have regularly provided facts and evidence-based analysis on geostrategic and geo-economic trends to key members of the expert media, parliamentarians, civil servants and ministers. Internationally, the Institute has provided unique defence diplomatic platforms in the Middle East and Asia that have facilitated high level consultations on defence issues and conflict resolution that has also engaged Europeans and North Americans. It has published evidencebased research that numerous governments have found added value to their internal assessments. The Institute has also briefed various inter-governmental organisations, including NATO and the EU, on important issues of public policy. It continues to put into the public domain the best available information on a wide range of international issues to ensure a more informed public debate. 

## **Group Structure** 

## _**IISS Middle East**_ 

The IISS Middle East branch office in Manama, Bahrain was established as a base for the Institute’s many research programmes and activities throughout the region and serves to connect IISS activities in Europe, North America and Asia with those in the Middle East. Since its foundation in May 2010, 

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**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

the office has built a strong cohort of experts and administrative staff who work closely with the entire IISS global network to provide not just first-class information and analysis on Middle East and broader international strategic issues, but also strengthen links between the strategic community in the Middle East and those in other parts of the world. 

Since 2004 the IISS has held annually the IISS Regional Security Summit: The Manama Dialogue in Bahrain. Full details of the Dialogue can be found on page 7. 

## _**The International Institute for Strategic Studies – US (IISS-Americas)**_ 

IISS-Americas is a branch of the IISS located in Washington DC. During the year, IISS-Americas continued its efforts to engage and expand the IISS membership base in the region, promote IISS activities and research to a North American audience of government leaders and policy shapers, and cultivate relationships with US policy makers to ensure strong US representation at the dialogues. Despite the continuing pandemic, IISS-Americas held several well-attended webinars on a diverse set of topics, including a very successful Ambassador’s Forum series. During the summer, as conditions eased, the office resumed live events with limited attendee numbers and developed the capacity to hold hybrid events to continue outreach to a global audience. This has served to reinforce the reputation of IISS-Americas as representing a vibrant, international, intellectual community. 

## _**Arundel House Enterprises Limited (AHEL)**_ 

AHEL is a wholly owned trading company with revenue arising from the letting of facilities and provision of event catering at Arundel House and the provision of Consultancy services. The company reported a profit for the year of £69,000 before gift aid (2020: £430 loss). 

## _**The International Institute for Strategic Studies (Asia) Limited (IISS-Asia) and the Strategic Studies Fund (SSF)**_ 

IISS-Asia is a company limited by guarantee registered in Singapore. In January 2021, IISS-Asia again convened the IISS Fullerton Forum: Shangri-La Dialogue Sherpa Meeting, an important intersessional activity of the Shangri-La Dialogue process. As detailed on pages 6-7, the Shangri-La Dialogue was unfortunately cancelled this year due to the COVID-19 pandemic. IISS-Asia was able to host one major Fullerton Lecture, however, with US Defence Secretary Lloyd Austin. 

Despite the pandemic restrictions, IISS-Asia continued most of its other activities as normal. Notably, IISS-Asia research staff edited the annual _Asia-Pacific Regional Security Assessment_ and organised and participated in IISS webinars on Asia-Pacific security. IISS-Asia also took the lead in recruiting and servicing IISS corporate and individual members in Singapore and the wider Asia-Pacific region. 

The SSF is a trust fund established in Singapore for the purpose of raising funds to be applied in Singapore towards activities relevant to the objectives of the Institute and of benefit to the Singapore community. The results for IISS-Asia and the SSF are consolidated on the basis that the Institute holds a majority of the voting rights in IISS-Asia and has ultimate discretion over the disbursement of SSF funds and over its activities. 

## _**IISS India Organisation – (IISS-India)**_ 

IISS-India is a non-profit subsidiary of IISS with its registered office in New Delhi. It was established in August 2014 to assist in the expansion of IISS activities and reach in India and the South Asia region. 

## _**IISS Europe gemeinnützige GmbH (IISS-Europe)**_ 

On 4[th] November 2019, IISS-Europe was incorporated as a non-profit subsidiary of IISS with its registered office in Berlin, established to deepen IISS engagement with European powers, expand its analytical footprint in Germany and play an active part in shaping the security and defence debate in Germany and the EU. During 2021, the IISS-Europe office presence was expanded to include 

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**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

research and operational staff in support of a broad five-year research programme on ‘Power shifts and the evolving international order: Strategic challenges for Germany and Europe’. 

## **Statement of Trustees’ Responsibilities** 

The Trustees (who are also directors of The International Institute for Strategic Studies for the purposes of company law) are responsible for preparing the Report of the Trustees and the financial statements in accordance with applicable law and accounting standards (FRS102). 

Company law requires the Trustees to prepare financial statements for each financial year. Under company law the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the charitable company and the group and of the incoming resources and application of resources, including the income and expenditure, of the group for that period. In preparing these financial statements, the Trustees are required to: 

- select suitable accounting policies and then apply them consistently; 

- observe the methods and principles in the Charities SORP; 

- make judgments and estimates that are reasonable and prudent; 

- state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and 

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business. 

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company’s transactions, 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 and the provisions of the charity’s constitution. They are also responsible for safeguarding the assets of the charity and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. 

So far as each of the Trustees at the date of this report is aware, there is no relevant audit information of which the charity’s auditor is unaware. Each Trustee has taken all the steps that he/she ought to have taken as a Trustee in order to make himself/herself aware of any relevant audit information and to establish that the charity’s auditor is aware of that information. 

## **Corporate Governance** 

Processes are in place to ensure that performance is monitored and that appropriate management information is prepared and reviewed regularly by both the executive management and the Trustees. 

The systems of internal control are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. They include: 

- an annual budget approved by the Trustees; 

- regular consideration by the Trustees of both financial and non-financial results; and 

- delegation of day-to-day management authority and segregation of duties. 

## **Auditors** 

Crowe U.K. LLP has indicated its willingness to be reappointed as statutory auditor. 

The Strategic Report and Report of the Trustees was approved by the Trustees in their capacity as Company Directors on 22 February 2022 and signed on their behalf by: 


Bill Emmott Chair of the Trustees 

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**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

## **REFERENCE AND ADMINISTRATIVE DETAILS** 

**The International Institute for Strategic Studies** , also known as the IISS, is a registered charity and a company limited by guarantee. The liability of each Board of Trustees member under the guarantee does not exceed the sum of £1. 

|**Registered Office**|Arundel House|
|---|---|
||6 Temple Place|
||London|
||WC2R 2PG|
|**Company Number**|615259|
|**Charity Number**|206504|
|**Trustees**||
|**_Chair_**|Bill Emmott|
|**_Vice-Chair_**|Chung Min Lee|
|**_Hon Treasurer_**|Chris Jones|
||Professor Dr Kurt Lauk|
||Jens Tholstrup|
||Catherine Roe|
||Matt Symonds|
||Matthew J Symonds|
||Caroline Atkinson|
||Dr Grace Skaugen|



During the year under review, there were no Trustee changes. 

For clarification purposes, there are two Trustees with the name Matthew (Matt) J Symonds. 

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**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

## **Executive Directing Staff** 

_**Director-General and Chief Executive Director of Geo-Economics; Japan Chair Director of Defence and Military Analysis Director of Finance Director of Operations Director of HR Executive Director, IISS-Asia**_ 

_**Executive Director, IISS-Middle East Executive Director, IISS-Americas Executive Director, IISS-Europe**_ 

Dr John Chipman Dr Robert Ward Dr Bastian Giegerich Sally Taylor Dr John Hobart Jane Graham Dr Tim Huxley (resigned 23[rd] April 2021); James Crabtree (appointed 24[th] April 2021) Sir Thomas Beckett Ernest J Herold Dr Ben Schreer (appointed 19[th] July 2021) 

## **Agents and Advisers** 

_**Legal Advisers**_ 

_**Bankers**_ 

_**Investment Managers**_ 

_**Pension Fund Managers**_ 

_**Pension Consultants**_ 

_**Auditors**_ 

Stone King Sewell LLP, 13 Queen Square, Bath BA1 2HJ 

HSBC Bank plc, 60 Queen Victoria Street, London EC4N 4TR 

Cazenove Capital Management (part of Schroder & Co. Limited), 12 Moorgate, London EC2R 6DA 

Mobius Life, 7th Floor, 20 Gresham Street, London EC2V 7JE 

Mercer (formerly JLT Benefit Solutions), The St Botolph Building, 138 Houndsditch, London EC3A 7AW 

Crowe U.K. LLP, 2[nd] Floor, 55 Ludgate Hill, London EC4M 7JW 

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**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

## **Independent Auditor’s Report to the Members of The International Institute for Strategic Studies** 

## **Opinion** 

We have audited the financial statements of The International Institute for Strategic Studies (‘the charitable company’) and its subsidiary (‘the group’) for the year ended 30 September 2021 which comprise the Consolidated Statement of Financial Activities, Consolidated and Charity Balance Sheets, Consolidated Cash Flow Statement and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). 

In our opinion the financial statements: 

- give a true and fair view of the state of the group’s and the charitable company’s affairs as at 30 September 2021 and of the group’s income and receipts of endowments and expenditure, for the year then ended; 

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

- have been prepared in accordance with the requirements of the Companies Act 2006. 

## **Basis for opinion** 

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group 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. 

## **Conclusions relating to going concern** 

In auditing the financial statements, we have concluded that the Trustee's 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 or the group’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. 

Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report. 

## **Other information** 

The Trustees are responsible for the other information contained within the annual report. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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 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 statements themselves. 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. 

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**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30[th] September 2021** 

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 our audit 

- the information given in the Trustees’ report, which includes the directors’ report and the strategic report prepared for the purposes of company law, for the financial year for which the financial statements are prepared is consistent with the financial statements; and 

- the strategic report and the directors’ report included within the Trustees’ report have been prepared in accordance with applicable legal requirements. 

## **Matters on which we are required to report by exception** 

In light of the knowledge and understanding of the group and charitable company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report included within the Trustees’ report. 

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: 

- adequate and proper accounting records have not been kept; or 

- the financial statements are not in agreement with the accounting records and returns; or 

- certain disclosures of trustees' remuneration specified by law are not made; or 

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

## **Responsibilities of trustees** 

As explained more fully in the Trustees’ responsibilities statement, the Trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. 

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

## **Auditor’s responsibilities for the audit of the financial statements** 

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. 

Details of the extent to which the audit was considered capable of detecting irregularities, including fraud and non-compliance with laws and regulations are set out below. 

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. 

## **Extent to which the audit was considered capable of detecting irregularities, including fraud** 

Irregularities, including fraud, are instances of noncompliance with laws and regulations. We identified and assessed the risks of material misstatement of the financial statements from irregularities, 

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**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30[th] September 2021** 

whether due to fraud or error, and discussed these between our audit team members. We then designed and performed audit procedures responsive to those risks, including obtaining audit evidence sufficient and appropriate to provide a basis for our opinion. 

We obtained an understanding of the legal and regulatory frameworks within which the charity and group operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006, taxation legislation, employment legislation and general data protection legislation, together with the Charities SORP (FRS 102). We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items. 

In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the charity’s and group’s ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the charity and the group for fraud. The laws and regulations we considered in this context for the UK operations were taxation legislation, employment legislation and General Data Protection Regulation (GDPR). We also considered compliance with local legislation for the group’s overseas operating segments. 

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Trustees and other management and inspection of regulatory and legal correspondence, if any. 

We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be within the timing surrounding recognition income and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management, internal audit and the audit committee about their own identification and assessment of the risks of irregularities, sample testing on the posting of journals, reviewing accounting estimates for biases, reviewing regulatory correspondence and reading minutes of meetings of those charged with governance. 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of nondetection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing noncompliance and cannot be expected to detect non-compliance with all laws and regulations. 

## **Use of our 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. 


Tim Redwood Senior Statutory Auditor For and on behalf of Crowe U.K. LLP Statutory Auditor 

London 

16 March 2022 

21 



**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30[th] September 2021** 

## **CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES** 

## **(incorporating an income and expenditure account)** 

|**Year ended 30th September**<br>Unrestricted<br>Funds<br>Notes<br>£'000<br>**Income from:**<br>_Donations_<br>2<br>2,812<br>_Charitable activities_<br>Dialogues, conferences and lecture series<br>3<br>7,362<br>Research programmes<br>3<br>1,007<br>Publications<br>1,319<br>Membership<br>1,450<br>_Other trading activities_<br>268<br>_Investments_<br>74<br>_Capital applied to income_<br>_Other income_<br>25<br>**Total**<br>14,317<br>**Expenditure on:**<br>_Raising funds_<br>153<br>_Charitable activities_<br>Dialogues, conferences and lecture series<br>4<br>6,034<br>Research programmes<br>4<br>3,654<br>Publications<br>4<br>2,994<br>Membership<br>4<br>471<br>_Other trading activities_<br>198<br>**Total**<br>13,504<br>Net (losses)/ gains on investments<br>17<br>612<br>**Net income/ (expenditure)**<br>1,425<br>**Transfers between funds**<br>12<br>-<br>**Other recognised gains/(losses):**<br>Foreign exchange (losses)/ gains<br>(70)<br>Actuarial (losses) on defined benefit pension schemes<br>14<br>149<br>**Net movement in funds**<br>1,504<br>Funds brought forward at 1 October 2020<br>12<br>18,212<br>Funds carried forward at 30 September 2021<br>12,13<br>19,716|Restricted<br>Funds<br>£'000<br>-<br>-<br>3,858<br>-<br>-<br>-<br>221<br>131<br>-|Endowed<br>Funds<br>£'000<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>(131)<br>-<br>(131)<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>584<br>453<br>-<br>-<br>-<br>453<br>5,691<br>6,144|**Total Funds**<br>**2021**<br>**£'000**<br>**2,812**<br>**7,362**<br>**4,865**<br>**1,319**<br>**1,450**<br>**268**<br>**295**<br>**-**<br>**25**<br>**18,396**<br>**153**<br>**6,034**<br>**7,733**<br>**2,994**<br>**471**<br>**198**<br>**17,583**<br>**1,196**<br>**2,009**<br>**-**<br>**(70)**<br>**149**<br>**2,088**<br>**23,974**<br>**26,062**|Total Funds<br>2020<br>£'000<br>2,941<br>5,880<br>4,479<br>1,445<br>1,593<br>396<br>257<br>-<br>25|
|---|---|---|---|---|
||4,210|||17,016|
||-<br>-<br>4,079<br>-<br>-<br>-|||138<br>4,884<br>7,804<br>2,823<br>564<br>396|
||4,079<br>-|||16,609<br>(53)|
||131<br>-<br>-<br>-|||354<br>-<br>(34)<br>(56)|
||131<br>71|||264<br>23,710|
||202|||23,974|



All amounts relate to continuing operations and, as all gains and losses are included, a separate statement of total recognised gains and losses has not been presented. 

The notes on pages 26 to 47 form part of these accounts 

22 



**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30th September 2021** 

## **CONSOLIDATED BALANCE SHEET (Company Number 615259)** 

|**As at 30th September**<br>**2021**<br>Notes<br>**£'000**<br>**Fixed assets**<br>Intangible assets<br>6<br>**230**<br>Tangible assets<br>7<br>**13,774**<br>Investments<br>8<br>**11,434**<br>**Total Fixed assets**<br>**25,438**<br>**Current assets:**<br>Debtors<br>9<br>**3,060**<br>Cash at bank and in hand<br>**6,178**<br>**Total Current assets**<br>**9,238**<br>**Liabilities:**<br>Creditors: Amounts falling due within one year<br>10<br>**(8,058)**<br>**_Net current assets / (liabilities)_**<br>**_1,180_**<br>**_Total assets less current liabilities_**<br>**_26,618_**<br>**_Net assets excluding pension liability_**<br>**_26,618_**<br>Defined benefit pension liability<br>14<br>**(556)**<br>**Total net assets**<br>13<br>**26,062**<br>**The Funds of the charity**<br>Expendable endowment funds<br>12<br>**6,144**<br>Restricted income funds<br>12<br>**202**<br>Unrestricted income funds<br>12<br>**20,272**<br>Pensions reserve<br>12<br>**(556)**<br>Total unrestricted funds<br>13<br>**19,716**<br>**Total charity funds**<br>13<br>**26,062**|2020<br>£'000<br>423<br>13,225<br>10,319|
|---|---|
||23,967|
||2,170<br>6,098|
||8,268|
||(7,520)|
||_748_<br>_24,715_|
||_24,715_<br>(741)|
||23,974|
||5,691<br>71<br>18,953<br>(741)|
||18,212|
||23,974|



The consolidated balance sheet includes the assets, liabilities and funds of The International Institute for Strategic Studies (Asia) Limited, Arundel House Enterprises Limited, IISS India Organisation, IISS Europe gemeinnützige GmbH, and the Strategic Studies Fund. 

The accounts were approved and authorised for issue by the Trustees on 22 February 2022 and signed on their behalf by: 


Bill Emmott Chair of the Trustees 

The notes on pages 26 to 47 form part of these accounts 

23 



**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30th September 2021** 

## **CHARITY BALANCE SHEET (Company Number 615259)** 

|**As at 30th September**<br>**2021**<br>Notes<br>**£'000**<br>**Fixed assets**<br>Intangible assets<br>6<br>**230**<br>Tangible assets<br>7<br>**13,284**<br>Investments<br>8<br>**11,434**<br>**Total Fixed assets**<br>**24,948**<br>**Current assets:**<br>Debtors<br>9<br>**3,039**<br>Cash at bank and in hand<br>**1,424**<br>**Total Current assets:**<br>**4,463**<br>**Liabilities**<br>Creditors: amounts falling due within one year<br>10<br>**(5,436)**<br>**_Net current liabilities_**<br>**(973)**<br>**_Total assets less current liabilities_**<br>**23,975**<br>**_Net assets excluding pension liability_**<br>**23,975**<br>Defined benefit pension liability<br>14<br>**(556)**<br>**Total net assets**<br>**23,419**<br>**The Funds of the charity**<br>Expendable endowment funds<br>12<br>**6,144**<br>Restricted income funds<br>12<br>**84**<br>Unrestricted funds<br>12<br>**17,747**<br>Pensions reserve<br>12<br>**(556)**<br>Total unrestricted funds<br>13<br>**17,191**<br>**Total funds including pensions reserve**<br>13<br>**23,419**|2020<br>£'000<br>423<br>13,184<br>10,319|
|---|---|
||23,926|
||1,530<br>2,895|
||4,425|
||(4,807)|
||(382)<br>23,544|
||23,544<br>(741)|
||22,803|
||5,691<br>75<br>17,778<br>(741)|
||17,037|
||22,803|



The unconsolidated surplus incurred by the Charity in 2021 was £498,000 (2020: deficit of £326,000) 

The accounts were approved and authorised for issue by the Trustees on 22 February 2022 and signed on their behalf by: 


Bill Emmott Chair of the Trustees 

The notes on pages 26 to 47 form part of these accounts 

24 



**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30th September 2021** 

## **CONSOLIDATED CASH FLOW STATEMENT** 

|**CONSOLIDATED CASH FLOW STATEMENT**|||||
|---|---|---|---|---|
|**Year ended 30th September**<br>Notes<br>**Cash flows from operating activities:**<br>**_Net cash (used in) / provided by operating activities_**<br>17<br>**Cash flows from investing activities:**<br>Dividends, interest and rents from investments<br>Purchase of property, plant and equipment<br>Proceeds from sales of property, plant and equipment<br>Purchase of software and website costs<br>Purchase of investments<br>Proceeds from sales of investments<br>**_Net cash (used in) provided by investing activities_**<br>**Cash flows from financing activities:**<br>Draw down of money market facility<br>**_Net cash provided by (used in) financing activities_**<br>**_Change in cash and cash equivalents in the year_**<br>**_Cash and cash equivalents at the beginning of the reporting period_**<br>**_Cash and cash equivalents at the end of the reporting period_**<br>18|**2021**<br>**£'000**<br>**295**<br>**(1,111)**<br>**-**<br>**(89)**<br>**(2,028)**<br>**2,098**<br>**150**|**2021**<br>**£'000**<br>**904**<br>**(835)**<br>**150**<br>**219**<br>**6,147**<br>**6,366**|2020<br>£'000<br>257<br>(577)<br>-<br>(222)<br>(3,404)<br>551<br>-|2020<br>£'000<br>2,188<br>(3,395)<br>-|
|||||(1,207)<br>7,354|
|||||6,147|



The notes on pages 26 to 47 form part of these accounts 

25 



**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30th September 2021** 

## **NOTES TO THE FINANCIAL STATEMENTS** 

## **1 Accounting policies** 

## **a) Status** 

The Institute is a registered charity and a company limited by guarantee, incorporated in England and Wales.  Its registered office address is Arundel House, 6 Temple Place, London WC2R 2PG. The Trustees constitute Directors for the purposes of the Companies Act and act as Trustees for the purposes of the Charities Act.  The charity is a Public Benefit Entity. 

## **b) Accounting convention** 

The accounts of the Charity and the Group have been prepared under the historical cost convention as modified by the revaluation of investments and in accordance with FRS102. The accounts are prepared in accordance with the Companies Act, and the current Statement of Recommended Practice: ‘Accounting and Reporting by Charities’ (SORP). The functional and reporting currency of the Group is GBP. 

## _**Basis of consolidation**_ 

The accounts include the assets, liabilities and funds, and the statement of financial activities of the charity and its subsidiary undertakings. Subsidiaries' activities are consolidated on a line by line basis. A separate statement of financial activities has not been prepared for the Charity alone as permitted by Section 408 of the Companies Act 2006. 

## _**Going concern**_ 

After making enquiries, the Trustees have reasonable expectation that the charity has adequate resources to continue its activities for the foreseeable future, and are satisfied that there are no material uncertainties surrounding the ability of the group to continue as a going concern. Accordingly, they continue to adopt the going 2009.266concern basis in preparing the financial statements as outlined in the Trustees' Report above. 

## _**Critical accounting judgements and key sources of estimation uncertainty**_ 

In the application of the group’s accounting policies, which are described in this note, trustees are required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects the current and future periods. 

Significant areas of estimate and judgement include provisions, income recognition, and assumptions used to value the defined benefit pension scheme and the remaining useful life of assets. Related accounting policies for these items are noted below. The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the presentation of the financial statements are as follows: 

## **c) Investments** 

6366 

All investments are valued at their mid-market value at the balance sheet date, which ~~gives rise~~ to unrealised gains and losses. The differences between the carrying value (or cost if acquired during the year) and the proceeds of liquidated investments are identified as realised investment gains or losses. Realised and unrealised gains and losses are presented net in the Statement of Financial Activities. 

Investment income and related tax credits are accounted for when received. 

## **d) Restricted funds** 

Restricted funds are funds subject to specific restrictive conditions imposed by donors or by the purpose of the funds raised. 

## **e) Expendable Endowment funds** 

The expendable endowment fund is treated as capital until the right to transfer funds to income and expend in accordance with the donor conditions has been granted. 

## **f) Tangible fixed assets and depreciation** 

Furniture, fittings and equipment acquisitions are stated at cost. Freehold buildings are stated at cost. Depreciation is charged when assets are brought into use. The following depreciation policies are applied consistently across the group over the useful economic lives of the assets on a straight line basis: 

i) Computers, printers and other electronic equipment with functional unit costs in excess of £1,000 are depreciated over a period of three years. 

ii) Furniture, fittings and equipment of a non-electronic nature with unit costs in excess of £250 are depreciated over a period of five years. 

iii) Plant and machinery items with unit costs in excess of £1,000 are depreciated over a period of ten years. iv) Leasehold improvements with unit costs in excess of £1,000 are depreciated over the life of the lease. 

- v) Freehold Building improvements with unit costs in excess of £1,000 are depreciated over a period of fifteen years. vi) Freehold building depreciation is charged at 1% using the straight line basis. 

No depreciation is charged on freehold land or on assets in the course of construction. 

26 



**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30th September 2021** 

## **g) Intangible fixed assets and amortisation** 

Website costs and software acquisitions are stated at cost. Amortisation is charged when assets are brought into use. The following amortisation policy is applied consistently across the group: 

i) Software and website costs in excess of £1,000 are depreciated over their useful economic lives on a straight line basis over a period of three years. 

No amortisation is charged on assets in the course of development. 

## **h) Debtors** 

Debtors are stated in the balance sheet at estimated net realisable value, being the invoiced amount less any provision for bad and doubtful debtors. Provisions are made specifically against debtors where there is evidence of a dispute or an inability to pay. An additional provision is made against older balances. 

## **i) Cash at bank and in hand** 

Cash includes cash-in-hand, cash-at-bank and bank overdrafts.  Bank loans are included within Creditors. 

## **j) Creditors** 

Trade and other creditors: Trade and other creditors are stated at cost. 

## **k) Foreign currency** 

Assets and liabilities denominated in foreign currencies are translated into sterling at the rate of exchange ruling at the balance sheet date.  Transactions in foreign currencies are translated into sterling at the rate ruling at the date of the transaction.  Exchange differences are taken to the Statement of Financial Activities. 

Foreign currency subsidiaries are translated into UK£ Sterling on the following basis: 

- assets and liabilities are translated at the closing rate at the balance sheet date; 

- income and expenses are translated at average exchange rates for the financial year; and 

- all resulting exchange differences are taken to the Statement of Financial Activities. 

## **l) Publications and membership income** 

Publications revenue advanced to the Institute under agreement with the publishers is recognised during the financial year in which the sale arises. An estimate of additional royalty income due up to 30 September 2020, to be received in early 2021, has been made in these financial statements. 

Membership income is recognised on the subscription period start date. Any income invoiced in advance of the subscription period start date is deferred and recognised in the relevant accounting year. 

## **m) Grants** 

Research grants are credited to the Statement of Financial Activities in accordance with the progress and performance of the grant programme activities. Income for Dialogues is recognised to the extent that the event has been planned and progress work completed in line with the contract. 

When donors specify that grants are for particular restricted purposes, this income is included in incoming resources of restricted funds. 

## **n) Deferred income** 

Income is deferred to future periods where the donor has placed an external restriction that the income should be used in those future periods or where the Institute has not fully earnt entitlement to that income. 

## **o) Expenditure** 

Expenditure is classified under the principal categories of Raising Funds, Charitable Activities, Commercial Activities Operating Expenditure and Financing Costs. 

Charitable activities costs comprise all expenditure directly related to the objects of the Institute including direct staff costs attributable to each activity, together with a corresponding apportionment of central support costs. 

Support costs are apportioned to charitable activities by a method based on the average headcount of employees allocated to each activity for the financial year. 

Knowledge and Information expenses are included within support costs. 

Financing Costs comprise those costs directly attributable to investment managers' fees/commissions and borrowing costs incurred in relation to financing. 

Raising Funds comprise those costs directly attributable to fundraising activities. 

Other Trading Activities Operating Expenditure comprise all costs incurred by Arundel House Enterprises Limited in delivering its catering, event and consultancy activities. 

Expenditure is accounted for on an accruals basis. 

27 



## **The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30th September 2021** 

## **p) Leasing** 

Rental costs under operating leases are charged to the Statement of Financial Activities in equal amounts over the period of the leases. 

## **q) Pension costs** 

The Institute maintains a contributory defined benefit pension scheme which was closed to new entrants in 2001. The assets of the scheme are held separately from those of the Institute being invested in managed funds. The pension scheme is accounted for in accordance with FRS102 Retirement Benefits. 

The Institute has defined contribution pension schemes which are open to all employees and also contributes to the personal pensions of some employees. Contributions to the scheme are accounted for when payable.  Further details of all pension schemes can be found in Note 14. 

## **r) Redundancy and termination payments** 

Redundancy and termination payments only occur when absolutely necessary as the Institute seeks to minimise organisational change. When redundancy or termination payments do arise, they are charged on an accruals basis and included with Staff Costs. 

## **s) Knowledge and Information Services** 

The Knowledge and Information Services (formerly the Library) holds a comprehensive collection of books, journals, pamphlets and online resources covering a broad range of current international relations, security and defence topics. The collection is regularly updated for continued use by IISS research staff. New publications are expensed through the SoFA and the library does not hold any valuable publications which may require inclusion on the Balance Sheet. 

28 



**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30th September 2021** 

## **2 Donations** 

|Donation in support of the IISS-Middle East office and related research activities<br>Other|**2021**<br>**£'000**<br>**2,713**<br>**99**<br>**2,812**|2020<br>£'000<br>2,911<br>30|
|---|---|---|
|||2,941|



## **3 i) Dialogues, conferences and lecture series** 

|Manama Dialogue<br>Shangri-La Dialogue<br>Riyadh Defense Forum<br>Lecture series|**2021**<br>**£'000**<br>**3,699**<br>**3,506**<br>**121**<br>**36**<br>**7,362**|2020<br>£'000<br>3,943<br>1,899<br>-<br>38|
|---|---|---|
|||5,880|



Funding for dialogues, conferences and lecture series received during the year from UK and international Governments totalled £7,251,000 (2020: £5,568,000). 

## **3 ii) Research programmes** 

|South Asia<br>Strategy, Technology and Arms Control (formerly Non-Proliferation and Nuclear Policy)<br>Europe<br>US Foreign policy and transatlantic affairs<br>Defence & Military Analysis<br>Conflict, Security & Development Programme<br>Geo-Economics & Energy Security<br>Middle East and the Gulf<br>Asia-Pacific<br>Cyber, Space and Future Conflict<br>Japan Chair Programme<br>Other Research Programmes|**2021**<br>**£'000**<br>**601**<br>**361**<br>**167**<br>**168**<br>**1,078**<br>**50**<br>**462**<br>**253**<br>**1,014**<br>**630**<br>**73**<br>**8**<br>**4,865**|2020<br>£'000<br>828<br>416<br>-<br>-<br>897<br>159<br>358<br>68<br>998<br>549<br>58<br>148|
|---|---|---|
|||4,479|



Funding for research projects received during the year from UK and international Governments totalled £3,637,000 (2020: £2,734,000) 

29 



## **The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30th September 2021** 

## **4 i) Analysis of expenditure - charitable activities and governance** 

Group 

|**Charitable activities**<br>_Primary costs_<br>Dialogues and conferences<br>Research programmes<br>Publications<br>Membership<br>_Support costs_<br>Support operations<br>**Total 2021**<br>Total 2020|Staff<br>costs<br>£'000<br>1,530<br>3,786<br>1,413<br>233<br>3,649<br>**10,611**<br>9,608|Other direct<br>costs<br>£'000<br>3,139<br>1,243<br>164<br>10<br>1,282<br>**5,838**<br>5,666|Depreciation<br>charges<br>£'000<br>-<br>7<br>57<br>-<br>747<br>**811**<br>794|Exchange<br>(gains) /losses<br>£'000<br>-<br>-<br>-<br>3<br>(32)<br>**(29)**<br>7|Allocation of<br>support costs<br>£'000<br>1,365<br>2,698<br>1,359<br>224<br>(5,646)<br>**-**<br>-|**Total**<br>**2021**<br>**£'000**<br>**6,034**<br>**7,734**<br>**2,993**<br>**470**<br>**-**<br>**17,231**|Total<br>2020<br>£'000<br>4,884<br>7,804<br>2,823<br>564<br>-|
|---|---|---|---|---|---|---|---|
||||||||16,075<br>16,075|



The above table analyses by expense category the costs related to the charitable ac ~~tivities and the governance~~ of the Institute. Charitable activities costs include both primary costs, which are directly attributable to specific charitable activities, and centrally incurred support costs. The total support costs are then apportioned across the specific activities in accordance with the average headcount of employees allocated to each activity for the financial year. Costs relating to commercial activities are not included in the above table. 

Included in support costs for 2020 are governance costs of £77,000 (2020: £76,000). Governance costs include staff costs, trustee travel to board meetings and audit fees. 

Staff costs include amounts paid to consulting fellows and other consulting associates not on the payroll, so will be higher than salaries and wages costs included in Note 5. 

30 



**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30th September 2021** 

- **4 ii) Net Income/ Expenditure** 

|Net income/ expenditure is stated after charging:<br>Depreciation<br>Amortisation<br>Auditors' remuneration<br>- Audit fees<br>- Tax advisory and other services<br>Operating leases<br>- Land and buildings<br>Trustees' professional indemnity insurance<br>**Staff costs**<br>Wages and salaries<br>Social security costs<br>Employers' contribution to defined contribution pension schemes<br>Operating costs of defined benefit pension schemes (excluding finance costs)<br>Other forms of employee benefits|**2021**<br>**£'000**<br>**547**<br>**281**<br>**28**<br>**19**<br>**821**<br>**11**<br>**2021**<br>**£'000**<br>**8,427**<br>**810**<br>**417**<br>**33**<br>**565**<br>**10,251**|2020<br>£'000<br>425<br>372<br>26<br>19<br>806<br>11<br>2020<br>£'000<br>7,536<br>705<br>416<br>32<br>435|
|---|---|---|
|||9,124|



## **5 Staff costs** 

Costs of Consulting Fellows and other sub-contractors totalling £634,000 (2020: £718,000) are not included in the figures above. 

Wages and salaries include £2,781,000 (2020: £2,071,000) in respect of restricted grant funded staff salaries. 

Remuneration of key management personnel totalled £2,333,000 during the year (2020: £2,088,000). 

Redundancy payments of £7,000 were paid during the year (2020: £2,000). 

|**The average number of employees (headcount) during the year**<br>Dialogues and conferences<br>Research programmes<br>Publications<br>Commercial Activities<br>Membership<br>Support<br>**Number of employees whose emoluments were over £60,000**<br>£640,001 to £650,001<br>£610,001 to £620,000<br>£210,001 to £220,000<br>£190,001 to £200,000<br>£180,001 to £190,000<br>£150,001 to £160,000<br>£130,001 to £140,000<br>£120,001 to £130,000<br>£110,001 to £120,000<br>£100,001 to £110,000<br>£90,001 to £100,000<br>£80,001 to £90,000<br>£70,001 to £80,000<br>£60,001 to £70,000|**No.**<br>**13**<br>**45**<br>**29**<br>**2**<br>**5**<br>**47**<br>**141**<br>**No.**<br>1<br>-<br>1<br>2<br>1<br>1<br>3<br>4<br>4<br>4<br>2<br>8<br>2<br>7<br>**40**|No.<br>12<br>41<br>26<br>2<br>6<br>46|
|---|---|---|
|||133|
|||No.<br>-<br>1<br>1<br>1<br>2<br>2<br>1<br>5<br>3<br>1<br>8<br>3<br>6|
|||**34**|



None of the above employees (2020: none) are accruing retirement benefits under the defined benefit scheme. 

33 of the above employees (2020: 28) are accruing retirement benefits under money purchase schemes, and contributions on their behalf amounted to £259,000 (2020: £239,000). 

For staff who are directly attributable to specific charitable activities (including both restricted and unrestricted funds), the pension costs are allocated on the same apportionment basis as their staff time/salaries. Support staff pension costs are apportioned on a headcount basis, outlined in note 4.i. 

31 



**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30th September 2021** 

## **6 Intangible fixed assets** 

|**Group**<br>Cost<br>At 1 October 2020<br>Exchange differences on consolidation<br>Disposals<br>Additions<br>**At 30 September 2021**<br>Amortisation<br>At 1 October 2020<br>Exchange differences on consolidation<br>Eliminated on disposals<br>Charge for the year<br>**At 30 September 2021**<br>Net book value<br>**At 30 September 2021**<br>At 30 September 2020|Software and<br>Website costs<br>£'000<br>2,191<br>(2)<br>-<br>89<br>**2,278**<br>1,768<br>(1)<br>-<br>281<br>**2,048**<br>**230**<br>423|Total<br>£'000<br>2,191<br>(2)<br>-<br>89|
|---|---|---|
|||**2,278**|
|||1,768<br>(1)<br>-<br>281|
|||**2,048**|
|||**230**|
|||423|



Projects under development total £NIL (2020 £7,000) in relation to database development costs. 

|**Charity**<br>Cost<br>At 1 October 2020<br>Exchange differences on consolidation<br>Disposals<br>Additions<br>**At 30 September 2021**<br>Amortisation<br>At 1 October 2020<br>Exchange differences on consolidation<br>Eliminated on disposals<br>Charge for the year<br>**At 30 September 2021**<br>Net book value<br>**At 30 September 2021**<br>At 30 September 2020|Software and<br>Website costs<br>£'000<br>2,191<br>(2)<br>-<br>89<br>**2,278**<br>1,768<br>(1)<br>-<br>281<br>**2,048**<br>**230**<br>423|Total<br>£'000<br>2,191<br>(2)<br>-<br>89|
|---|---|---|
|||**2,278**|
|||1,768<br>(1)<br>-<br>281|
|||**2,048**|
|||**230**|
|||423|



Projects under development total £NIL (2020 £7,000) in relation to database development costs. 

32 



**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30th September 2021** 

## **7 Tangible fixed assets** 

|**Group**<br>Cost<br>At 1 October 2020<br>Exchange differences on consolidation<br>Disposals<br>Additions<br>**At 30 September 2021**<br>Depreciation<br>At 1 October 2020<br>Exchange differences on consolidation<br>Eliminated on disposals<br>Charge for the year<br>**At 30 September 2021**<br>Net book value<br>**At 30 September 2021**<br>At 30 September 2020|Freehold<br>land<br>£'000<br>3,000<br>-<br>-<br>-<br>**3,000**<br>-<br>-<br>-<br>-<br>**-**<br>**3,000**<br>3,000|Freehold<br>buildings<br>£'000<br>11,456<br>-<br>-<br>-<br>**11,456**<br>2,523<br>-<br>-<br>115<br>**2,638**<br>**8,818**<br>8,933|Furniture, fittings,<br>plant & machinery,<br>equipment, building<br>improvements &<br>motor vehicles<br>£'000<br>7,489<br>(123)<br>(547)<br>1,111<br>**7,930**<br>6,197<br>(118)<br>(537)<br>432<br>**5,974**<br>**1,956**<br>1,292|Total<br>£'000<br>21,945<br>(123)<br>(547)<br>1,111|
|---|---|---|---|---|
|||||**22,386**|
|||||8,720<br>(118)<br>(537)<br>547|
|||||**8,612**|
|||||**13,774**|
|||||13,225|



Furniture, fittings, plant & machinery, equipment, building improvements and motor vehicles contain assets in the course of construction of £114,000 (2020: £26,000). 

|**Charity**<br>Cost<br>At 1 October 2020<br>Exchange differences on consolidation<br>Disposals<br>Additions<br>**At 30 September 2021**<br>Depreciation<br>At 1 October 2020<br>Exchange differences on consolidation<br>Eliminated on disposals<br>Charge for the year<br>**At 30 September 2021**<br>Net book value<br>**At 30 September 2021**<br>At 30 September 2020|Freehold<br>land<br>£'000<br>3,000<br>-<br>-<br>-<br>**3,000**<br>-<br>-<br>-<br>-<br>**-**<br>**3,000**<br>3,000|Freehold<br>buildings<br>£'000<br>11,456<br>-<br>-<br>-<br>**11,456**<br>2,523<br>-<br>-<br>115<br>**2,638**<br>**8,818**<br>8,933|Furniture, fittings,<br>plant & machinery,<br>equipment, building<br>improvements &<br>motor vehicles<br>£'000<br>6,865<br>(102)<br>(547)<br>576<br>**6,792**<br>5,614<br>(97)<br>(537)<br>346<br>**5,326**<br>**1,466**<br>1,251|Total<br>£'000<br>21,321<br>(102)<br>(547)<br>576|
|---|---|---|---|---|
|||||**21,248**|
|||||8,137<br>(97)<br>(537)<br>461|
|||||**7,964**|
|||||**13,284**|
|||||13,184|



Furniture, fittings, plant & machinery, equipment, building improvements and motor vehicles contain assets in the course of construction of £114,000 (2020: £26,000). 

33 



**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30th September 2021** 

## **8 Fixed asset investments** 

Group and charity 

|**Quoted**<br>Hedge Funds<br>Property Fund<br>Portfolio Funds<br>UK Fixed Interest Funds<br>International Fixed Interest Funds<br>UK Equity Funds<br>International Equity Funds<br>**Total Quoted investments**<br>**Portfolio cash**<br>**Total market value at 30 September**<br>**Total historical cost at 30 September**<br>Reconciliation of opening and closing market values<br>Opening market value at 1 October<br>Additions at cost<br>Disposals at opening market value<br>Net gain/(loss) on revaluation<br>**Closing market value at 30 September**<br>**Portfolio cash at 30 September**<br>**Total market value at 30 September**|**2021**<br>**£'000**<br>**392**<br>**542**<br>**6,321**<br>**271**<br>**336**<br>**701**<br>**2,836**<br>**11,399**<br>**35**<br>**11,434**<br>**9,758**<br>**10,270**<br>**2,028**<br>**(2,070)**<br>**1,171**<br>**11,399**<br>**35**<br>**11,434**|2020<br>£'000<br>402<br>690<br>5,891<br>330<br>214<br>605<br>2,138|
|---|---|---|
|||10,270<br>49|
|||10,319|
|||9,496|
|||7,470<br>3,404<br>(561)<br>(43)|
|||10,270<br>49|
|||10,319|



## **9 Debtors** 

|Group<br>Trade debtors<br>Other debtors<br>Prepayments and accrued income|**2021**<br>**£'000**<br>**901**<br>**739**<br>**1,420**<br>**3,060**|2020<br>£'000<br>486<br>641<br>1,043|
|---|---|---|
|||2,170|



|Charity<br>Trade debtors<br>Other debtors<br>Amounts owed by group and associated undertakings<br>Prepayments and accrued income|**2021**<br>**£'000**<br>**856**<br>**404**<br>**607**<br>**1,172**<br>**3,039**|2020<br>£'000<br>445<br>288<br>144<br>653|
|---|---|---|
|||1,530|



34 



**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30th September 2021** 

## **10 Creditors: amounts falling due within one year** 

|**Creditors: amounts falling due within one year**|||
|---|---|---|
|Group<br>Trade creditors<br>Other creditors<br>Taxation and social security<br>Accruals<br>Deferred income (note 11)|**2021**<br>**£'000**<br>**680**<br>**151**<br>**200**<br>**586**<br>**6,441**<br>**8,058**|2020<br>£'000<br>173<br>73<br>176<br>570<br>6,528|
|||7,520|



|Charity<br>Trade creditors<br>Other creditors<br>Taxation and social security<br>Accruals<br>Deferred income (note 11)|**2021**<br>**£'000**<br>**638**<br>**89**<br>**184**<br>**514**<br>**4,011**<br>**5,436**|2020<br>£'000<br>195<br>66<br>176<br>497<br>3,873|
|---|---|---|
|||**4,807**|



## **11 Deferred income** 

|**Deferred income**|||
|---|---|---|
|Group<br>Brought forward at 1 October 2019<br>Received in the year<br>Expended in the year<br>Carried forward at 30 September 2020<br>Charity<br>Brought forward at 1 October 2019<br>Received in the year<br>Expended in the year<br>Carried forward at 30 September 2020|**2021**<br>**£'000**<br>**6,528**<br>**12,661**<br>**(12,748)**<br>**6,441**<br>**2021**<br>**£'000**<br>**3,873**<br>**6,757**<br>**(6,619)**<br>**4,011**|2020<br>£'000<br>4,844<br>6,529<br>(4,845)|
|||6,528|
|||2020<br>£'000<br>3,710<br>3,265<br>(3,102)|
|||3,873|



35 



**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30th September 2021** 

## **12 Movement in funds** 

|**Movement in funds**|||||||
|---|---|---|---|---|---|---|
|**Group**<br>**Expendable endowment**<br>**Restricted**<br>Gerald Segal Memorial Fund<br>Research Grants<br>**Unrestricted**<br>General fund<br>Pensions reserve<br>**Total funds**<br>**Charity**<br>**Expendable endowment**<br>**Restricted**<br>Gerald Segal Memorial Fund<br>Research Grants<br>**Unrestricted**<br>General fund<br>Pensions reserve<br>**Total funds**|Balances<br>b/fwd<br>£'000<br>5,691|Income<br>£'000<br>(131)<br>-<br>4,210<br>4,210<br>14,317<br>14,317<br>18,396<br>Income<br>£'000<br>(131)<br>2,769<br>2,769<br>9,752<br>9,752<br>12,390|Expenditure<br>£'000<br>-<br>(2)<br>(4,077)<br>(4,079)<br>(13,504)<br>(13,504)<br>(17,583)<br>Expenditure<br>£'000<br>-<br>(2)<br>(2,758)<br>(2,760)<br>(10,328)<br>(10,328)<br>(13,088)|Transfers<br>£'000|Gains/<br>(losses)<br>£'000<br>584<br>-<br>542<br>149<br>691<br>1,275<br>Gains/<br>(losses)<br>£'000<br>584<br>-<br>581<br>149<br>730<br>1,314|**Balances**<br>**c/fwd**<br>**£'000**<br>**6,144**|
||24<br>47|||||**22**<br>**180**|
||71|||-||**202**|
||18,953<br>(741)|||(36)<br>36||**20,272**<br>**(556)**|
||18,212|||-||**19,716**|
||23,974|||-||**26,062**|
||Balances<br>b/fwd<br>£'000<br>5,691|||Transfers<br>£'000||**Balances**<br>**c/fwd**<br>**£'000**<br>**6,144**|
||24<br>51|||||**22**<br>**62**|
||75|||-||**84**|
||17,778<br>(741)|||(36)<br>36||**17,747**<br>**(556)**|
||17,037|||-||**17,191**|
||22,803|||-||**23,419**|



Expendable endowment - restricted to fund a Chair in Japanese Security Studies at the IISS Gerald Segal Memorial Fund - to fund study on Asian issues. Restricted Grants - for research projects and specific non-research projects in strategic studies. Pensions reserve - represents the FRS102 pension liability. 

## **13 Analysis of net assets by fund** 

## **Group** 

||Expendable|Restricted|Unrestricted|**Total**|
|---|---|---|---|---|
||Endowment|Funds|Funds|**Funds**|
||£'000|£'000|£'000|**£'000**|
|Tangible assets|-|-|13,774|**13,774**|
|Intangible assets|-|-|230|**230**|
|Investments|6,134|-|5,300|**11,434**|
|Net current assets/ (liabilities)|-|202|978|**1,180**|
|Pension liability|-|-|(556)|**(556)**|
||6,134|202|19,726|**26,062**|
|**Charity**|||||



|**arity**|||||
|---|---|---|---|---|
||Expendable|Restricted|Unrestricted|**Total**|
||Endowment|Funds|Funds|**Funds**|
||£'000|£'000|£'000|**£'000**|
|Tangible assets|-|-|13,284|**13,284**|
|Intangible assets|-|-|230|**230**|
|Investments|6,134|-|5,300|**11,434**|
|Net current assets/ (liabilities)|-|84|(1,057)|**(973)**|
|Pension liability|-|-|(556)|**(556)**|
||6,134|84|17,201|**23,419**|



36 



**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30th September 2021** 

## **14 Pension schemes** 

The disclosures set out below relate to pension schemes to which contributions are made by the charity – a defined benefit scheme, individual personal pension schemes and a defined contribution scheme. 

## **a Defined benefit scheme** 

The Institute sponsors the International Institute for Strategic Studies Staff Superannuation Scheme which is a defined benefit arrangement. The last completed full actuarial valuation of this scheme was carried out by a qualified independent actuary as at 1 March 2018. The scheme is closed to new entrants and no contributions were made during the year. 

During the year, the Institute has made payments of £48,000 to reduce the overall scheme deficit as identified in the triennial actuarial valuation of the scheme as at 1 March 2018. 

## **i) The amounts recognised in the balance sheet are as follows:** 

|Present value of funded obligations<br>Fair value of plan assets<br>**Deficit**<br>Amounts in the balance sheet:<br>Liabilities<br>Assets<br>**Net liability**|**2021**<br>**£'000**<br>**(3,363)**<br>**2,807**<br>**(556)**<br>**(556)**<br>**-**<br>**(556)**|2020<br>£'000<br>(3,418)<br>2,677|
|---|---|---|
|||(741)|
|||(741)<br>-|
|||(741)|



## **ii) Changes in the present value of the defined benefit obligation are as follows:** 

|Defined benefit obligation at start of year<br>Interest expense<br>Actuarial losses / (gains)<br>Benefits paid and expenses<br>**Defined benefit obligation at end of year**|**2021**<br>**£'000**<br>**3,418**<br>**58**<br>**(61)**<br>**(52)**<br>**3,363**|2020<br>£'000<br>3,385<br>61<br>(4)<br>(24)|
|---|---|---|
|||3,418|



## **iii) Changes in the fair value of the scheme assets are as follows:** 

|Opening fair value of scheme assets<br>Interest Income<br>Actuarial gains / (losses)<br>Contributions by the company<br>Benefits paid and expenses<br>**Fair value of scheme assets at the year end**<br>The actual return on the plan assets in the year|**2021**<br>**£'000**<br>**2,677**<br>**46**<br>**88**<br>**48**<br>**(52)**<br>**2,807**<br>**2021**<br>**£'000**<br>**134**|2020<br>£'000<br>2,669<br>48<br>(60)<br>44<br>(24)|
|---|---|---|
|||2,677|
|||2020<br>£'000<br>(12)|



37 



**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30th September 2021** 

## **14 Pension scheme (continued)** 

- **iv) The defined benefit costs recognised within the Statement of Financial Activities are as follows:** 

|Net interest cost<br>**Total amount charged to the Statement of Financial Activities**|**2021**<br>**£'000**<br>**12**<br>**12**|2020<br>£'000<br>13|
|---|---|---|
|||13|



The International Institute for Strategic Studies expects to contribute £48,000 to its defined benefit pension scheme in the year ending 30 September 2022. 

- **v) Defined benefit costs included in other recognised gains and losses** 

|Return on plan assets (excluding amounts included in net interest cost)<br>gain / (loss)<br>Experience gains / (losses) arising on the plan liabilities<br>Effects of changes in the demographic and financial assumptions<br>underlying the present value of the plan liabilities - gain / (loss)<br>**Total losses included in other recognised gains and losses**|**2021**<br>**£'000**<br>-<br>**88**<br>**60**<br>**1**<br>**149**|2020<br>£'000<br>(60)<br>24<br>(20)|
|---|---|---|
|||(56)|



## **vi) The major categories of scheme assets are as follows:** 

|UK Equities<br>Overseas Equities<br>Fixed Interest<br>Corporate Bonds<br>Diversified Growth<br>Property<br>Cash and other<br>Total Assets|**2021**<br>**£'000**<br>**256**<br>**719**<br>**1,028**<br>**-**<br>**566**<br>**178**<br>**60**<br>**2,807**|2020<br>£'000<br>113<br>462<br>603<br>792<br>506<br>181<br>20|
|---|---|---|
|||2,677|



## **vii) Principal assumptions at the balance sheet date (expressed as weighted averages)** 

||**2021**|2020|
|---|---|---|
|Discount rate at 30 September|**2.00%**|1.70%|
|Inflation (RPI)|**3.70%**|3.20%|
|Inflation (CPI)|**2.90%**|2.40%|
|Allowance for revaluation of deferred pensions of CPI or 5% p.a. if less|**2.90%**|2.40%|
|Allowance for pension in payment increases of RPI or 5% p.a. if less|**3.60%**|3.10%|
|Allowance for pension in payment increases of RPI or 2.5% p.a. if less|**2.50%**|2.50%|
|Allowance for commutation of pension for cash at retirement|50% of Post A Day|50% of Post A Day|



|**viii)**|**The mortality assumptions adopted at 30 September 2021 imply the  following**|**Years**|
|---|---|---|
||**life expectancies at age 65:**||
||Male retiring in 2021|**22.60**|
||Female retiring in 2021|**24.50**|
||Male retiring in 204|**23.90**|
||Female retiring in 2041|**26.00**|



38 



**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30th September 2021** 

## **14 Pension scheme (continued)** 

## **b Personal pension plans** 

The Institute also contributes to the personal pension schemes of some employees. The contributions are charged to the Statement of Financial Activities when due and the cost for the financial year ended 30 September 2021 was £62,000 (2020: £60,000). 

## **c Defined contribution scheme** 

The Institute has a defined contribution pension scheme which is open to all employees. The contributions made in the year ended 30 September 2021 were £349,000 (2020: £341,000). Contributions outstanding at the year end amounted to £56,000 (2020: £58,000). 

## **d IISS-US pension scheme** 

The Institute contributes to a United States 401(k) defined contribution pension scheme which is open to employees at the IISS-US office. The contributions paid in the year ended 30 September 2021 were £30,000 (2020: £14,000). Contributions accrued at the year end amounted to £5,000 (2020: £2,000). 

## **15 Leasing commitments** 

The future total minimum payments to which the Group is committed as at 30 September 2021 under operating lease agreements are as follows: 

|**Office premises**<br>Net present value of total lease commitments due:<br>Within one year<br>Between one and two years<br>Between two and five years<br>Over five years|**2021**<br>**£'000**<br>**1,039**<br>**1,050**<br>**2,108**<br>**1,639**|2020<br>£'000<br>756<br>1,015<br>2,473<br>2,009|
|---|---|---|



## **16 Capital commitments** 

As at 30 September 2021, there were capital commitments contracted but not provided for of £190,000; for reinstating fixtures and the replacement of equipment at Arundel House (2020: £367,000). 

## **17 Reconciliation of net incoming resources to net cash inflow from operating activities** 

|**Net income for the reporting period (as per the statement of financial activities)**<br>**Adjustments for:**<br>Dividends and interest from investments<br>Depreciation charges<br>Amortisation charges<br>Pension reserve deficit funding<br>Losses/ (Gains) on investments<br>Exchange losses/ (gains) on fixed assets<br>Change in cash and cash equivalents due to exchange rate movements<br>Loss on disposal of fixed assets<br>(Increase)/ Decrease in debtors<br>Increase in creditors<br>**Net cash provided by (used in) operating activities**|**2021**<br>**£'000**<br>**2,009**<br>**(295)**<br>**547**<br>**281**<br>**(36)**<br>**(1,196)**<br>**6**<br>**(70)**<br>**10**<br>**(890)**<br>**538**<br>**904**|2020<br>£'000<br>354<br>(257)<br>425<br>372<br>(31)<br>53<br>4<br>(34)<br>39<br>(153)<br>1,416|
|---|---|---|
|||2,188|



39 



**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30th September 2021** 

## **18 Analysis of cash and cash equivalents** 

|Cash at bank and in hand<br>Portfolio cash|**2021**<br>**£'000**<br>**6,178**<br>**35**<br>**6,213**|2020<br>£'000<br>6,098<br>49|
|---|---|---|
|||6,147|



## **19 Related Parties** 

## **a Trustees or connected persons** 

The Trustees did not receive any remuneration during the current or previous year. 

No transactions, contracts or other arrangements (including grants) with any Trustees were entered into by the Institute during the year ended 30 September 2021 (2020: Nil). 

Travel expenses for both governance and attending Institute dialogues and other activities were paid or reimbursed in respect of 1 trustee (2020: 5) and the total amount was £3,000 (2020: £5,000). 

## **b Other related parties** 

The ultimate parent undertaking (Parent Charity) includes IISS-UK, and its two branches, IISS-US and IISS-Middle East. 

## **I Arundel House Enterprises Ltd** 

Related party transactions of the ultimate parent undertaking with Arundel House Enterprises Ltd were as follows: 

|Balance at beginning of year<br>Expenses paid on behalf of Parent<br>Expenses paid on behalf of related party<br>Amounts paid in during the year<br>Foreign currency movement<br>Balance at end of year|**2021**<br>**£'000**<br>**3**<br>**(134)**<br>**282**<br>**(269)**<br>**27**<br>**(91)**|2020<br>£'000<br>139<br>(205)<br>419<br>(370)<br>20|
|---|---|---|
|||3|



## **II International Institute for Strategic Studies (Asia) Ltd** 

Related party transactions of the ultimate parent undertaking with IISS-Asia Ltd were as follows: 

|Balance at beginning of year<br>Expenses paid on behalf of Parent<br>Expenses paid on behalf of related party<br>Amounts paid out during the year<br>Amounts paid in during the year<br>Foreign currency movement<br>Balance forgiven on behalf of Parent<br>Balance at end of year|**2021**<br>**£'000**<br>**-**<br>**(11)**<br>**2,360**<br>**(1,146)**<br>**2**<br>**(1,205)**<br>**-**|2020<br>£'000<br>-<br>(19)<br>1,958<br>9<br>(1,492)<br>3<br>(459)|
|---|---|---|
|||-|



40 



**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30th September 2021** 

## **III Strategic Studies Fund** 

There were no related party transactions of the ultimate parent undertaking with the Strategic Studies Fund during 2021 (2020: Nil). 

Related party transactions of IISS-Asia with the Strategic Studies Fund were as follows: 

|Balance at beginning of year<br>Expenses paid on behalf of Parent (IISS-Asia)<br>Expenses paid on behalf of related party<br>Amounts paid in during the year<br>Foreign currency movement<br>Balance at end of year|**2020**<br>**£'000**<br>**(495)**<br>**-**<br>**168**<br>**(98)**<br>**4**<br>**(421)**|2020<br>£'000<br>(316)<br>(378)<br>199<br>-<br>-|
|---|---|---|
|||(495)|



## **IV IISS India Organisation** 

Related party transactions of the ultimate parent undertaking with IISS India Organisation were as follows: 

|Balance at beginning of year<br>Expenses paid on behalf of Parent<br>Expenses paid on behalf of related party<br>Foreign currency movement<br>Balance at end of year|**2021**<br>**£'000**<br>**76**<br>**-**<br>**-**<br>**(4)**<br>**72**|2020<br>£'000<br>83<br>-<br>-<br>(7)|
|---|---|---|
|||76|



## **V IISS Europe gemeinnützige GmbH** 

Related party transactions of the ultimate parent undertaking with IISS Europe gemeinnützige GmbH were as follows: 

|Balance at beginning of year<br>Expenses paid on behalf of related party<br>Amounts paid out during the year<br>Foreign currency movement<br>Balance at end of year|**2021**<br>**£'000**<br>**65**<br>**251**<br>**240**<br>**(1)**<br>**555**|2020<br>£'000<br>-<br>47<br>18<br>-|
|---|---|---|
|||65|



41 



**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30th September 2021** 

## **20 Subsidiary undertakings** 

## **I Arundel House Enterprises Ltd** 

Registered office : Arundel House, 6 Temple Place, London, WC2R 2PG Registered number : 3720258 

- **a** The charity beneficially owns the entire share capital of Arundel House Enterprises Limited, a company incorporated in England and Wales under registration number 3720258, which manages the conference facilities of Arundel House and Bloomsbury House. The results for Arundel House Enterprises Limited have been consolidated into the group financial statements. 

## **b Summary of profit and loss account for Arundel House Enterprises Ltd** 

|Turnover<br>Cost of sales<br>Gross profit<br>Other expenses<br>Net profit before taxation<br>Gift Aid to IISS<br>Loss after taxation|**2021**<br>**£'000**<br>**300**<br>**(25)**<br>**275**<br>**(205)**<br>**70**<br>**(71)**<br>**(1)**|2020<br>£'000<br>416<br>(36)|
|---|---|---|
|||380<br>(380)|
|||-<br>-|
|||-|



## **c Summary of balance sheet for Arundel House Enterprises Ltd** 

|Tangible fixed assets<br>Debtors<br>Cash at bank and in hand<br>Current assets<br>Creditors<br>Net assets<br>Aggregate capital and reserves|**2021**<br>**£'000**<br>**-**<br>**55**<br>**16**<br>**71**<br>**(61)**<br>**10**<br>**10**|2020<br>£'000<br>-<br>94<br>19|
|---|---|---|
|||113<br>(102)<br>11|
|||11|



## **II International Institute for Strategic Studies (Asia) Ltd** 

Registered office : 9 Raffles Place, #51-01 Republic Plaza, Singapore 048619 Registration number : 200106226Z 

- **a** The charity holds a majority of the voting rights of The International Institute for Strategic Studies (Asia) Limited, a company limited by guarantee and incorporated in Singapore under company number 200106226Z. The financial statements are audited in local currency and converted into UK£ Sterling at the appropriate exchange rate for consolidation purposes. 

## **b Summary of income statement for International Institute for Strategic Studies (Asia) Ltd** 

|Dialogue and Lecture Series<br>Research programmes<br>Other<br>Total income<br>Dialogue and Lecture Series<br>Research programmes<br>Total expenses<br>Surplus for the year|**2021**<br>**£'000**<br>**3,506**<br>**1,425**<br>**22**<br>**4,953**<br>**(3,140)**<br>**(350)**<br>**(3,490)**<br>**1,463**|2020<br>£'000<br>1,899<br>1,371<br>16|
|---|---|---|
|||3,286|
|||(1,675)<br>(939)|
|||(2,614)|
|||672|



42 



**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30th September 2021** 

## **c Summary of balance sheet for International Institute for Strategic Studies (Asia) Ltd** 

|Tangible fixed assets<br>Debtors<br>Cash at bank and in hand<br>Current assets<br>Creditors<br>Net assets<br>Aggregate capital and reserves|**2021**<br>**£'000**<br>**355**<br>**80**<br>**4,160**<br>**4,240**<br>**(1,991)**<br>**2,604**<br>**2,604**|2020<br>£'000<br>42<br>799<br>3,137|
|---|---|---|
|||3,936<br>(2,799)|
|||1,179|
|||1,179|



## **III Strategic Studies Fund** 

Registered office : 9 Raffles Place, #51-01 Republic Plaza, Singapore 048619 IPC Registration number : 1798 

- **a** The charity is a trustee of the Strategic Studies Fund (SSF), a trust established in Singapore under Charity number 1798, and has ultimate discretion over the disbursement of SSF funds. The financial statements are audited in local currency and converted into UK£ Sterling at the appropriate exchange rate for consolidation purposes. 

## **b Summary of income statement for Strategic Studies Fund** 

|Lectures Series<br>Research<br>Total income<br>Lectures Series<br>Research<br>Other expenses<br>Total expenses<br>Surplus for the year|**2021**<br>**£'000**<br>**36**<br>**128**<br>**164**<br>**(36)**<br>**(125)**<br>**-**<br>**(161)**<br>**3**|2020<br>£'000<br>38<br>177|
|---|---|---|
|||215|
|||(23)<br>(168)<br>-|
|||(191)|
|||24|



## **c Summary of balance sheet for Strategic Studies Fund** 

|Debtors<br>Creditors<br>Net assets<br>Reserves|**2021**<br>**£'000**<br>**421**<br>**(365)**<br>**56**<br>**56**|2020<br>£'000<br>495<br>(440)|
|---|---|---|
|||55|
|||55|



## **IV IISS India Organisation** 

Registered office: E-301, East of Kailash, New Delhi-110065, India Incorporated in India with limited liability under number U80903DL2014NPL270367 

- **a** The charity holds a majority share-holding (99.9%) in IISS India Organisation, a limited not for profit company incorporated in India. The financial statements are audited in local currency and converted into UK£ Sterling at the appropriate exchange rate for consolidation purposes. 

43 



**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30th September 2021** 

## **b Summary of income statement for IISS India Organisation** 

|Other Income<br>Total income<br>Dialogue and Lecture Series<br>Other expenses<br>Total expenses<br>Surplus/(Deficit) for the year|**2021**<br>**£'000**<br>**-**<br>**-**<br>**-**<br>**-**<br>**-**<br>**-**|2020<br>£'000<br>15|
|---|---|---|
|||15|
|||(12)<br>-|
|||(12)|
|||3|



## **c Summary of balance sheet for IISS India Organisation** 

|Debtors<br>Cash at bank and in hand<br>Current assets<br>Creditors<br>Net assets<br>Aggregate capital and reserves|**2021**<br>**£'000**<br>**7**<br>**17**<br>**24**<br>**(75)**<br>**(51)**<br>**(51)**|2020<br>£'000<br>**7**<br>**22**|
|---|---|---|
|||**29**<br>**(83)**|
|||**(54)**|
|||**(54)**|



## **V IISS Europe gemeinnützige GmbH** 

Registered office: Potsdamer Platz 10, Haus 2, 10785 Berlin, Deutschland 

- **a** The charity holds a 100% share in IISS Europe gemeinnützige GmbH, a not for profit company incorporated in Germany on 28 May 2019. The financial statements are audited in local currency and converted into UK£ Sterling at the appropriate exchange rate for consolidation purposes. 

## **b Summary of income statement for IISS-Europe** 

|**Summary of income statement for IISS-Europe**|||
|---|---|---|
|Research<br>Other Income<br>Total income<br>Research<br>Total expenses<br>Surplus/(Deficit) for the year|**2021**<br>**£'000**<br>**682**<br>**11**<br>**693**<br>**(645)**<br>**(645)**<br>**48**|2020<br>£'000<br>34<br>-|
|||34|
|||(54)|
|||(54)|
|||(20)|



## **c Summary of balance sheet for IISS-Europe** 

|Tangible fixed assets<br>Debtors<br>Cash at bank and in hand<br>Current assets<br>Creditors<br>Net assets<br>Aggregate capital and reserves|**2021**<br>**£'000**<br>**135**<br>**87**<br>**561**<br>**648**<br>**(757)**<br>**26**<br>**26**|2020<br>£'000<br>-<br>-<br>24|
|---|---|---|
|||24<br>(44)|
|||(20)|
|||(20)|



44 



**The International Institute for Strategic Studies** 

## **Annual Report and Financial Statements for the year ended 30[th] September 2021** 

## **21 Comparative Information** 

## **i) Consolidated Statement of Financial Activities (incorporating an income and expenditure account)** 

**Year ended 30[th] September 2020** 

|Unrestricted<br>Funds<br>Notes<br>£'000<br>**Income from:**<br>_Donations_<br>2<br>2,941<br>_Charitable activities_<br>Dialogues, conferences and lecture series<br>3<br>5,880<br>Research programmes<br>3<br>802<br>Publications<br>1,445<br>Membership<br>1,593<br>Other trading activities<br>396<br>_Investments_<br>84<br>_Capital applied to income_<br>-<br>_Other income_<br>25<br>**Total**<br>13,166<br>**Expenditure on:**<br>_Raising funds_<br>138<br>_Charitable activities_<br>Dialogues, conferences and lecture series<br>4<br>4,884<br>Research programmes<br>4<br>3,821<br>Publications<br>4<br>2,823<br>Membership<br>4<br>564<br>Other<br>4<br>-<br>_Other trading activities_<br>396<br>**Total**<br>12,626<br>Net gains on investments<br>17<br>(33)<br>**Net income/ (expenditure)**<br>507<br>**Transfers between funds**<br>12<br>-<br>**Other recognised gains/(losses):**<br>Foreign exchange gains<br>(34)<br>Actuarial losses on defined benefit pension schemes<br>14<br>(56)<br>**Net movement in funds**<br>417<br>Funds brought forward at 1 October 2019<br>12<br>17,795<br>Funds carried forward at 30 September 2020<br>12,13<br>18,212|Restricted<br>Funds<br>£'000<br>-<br>-<br>3,677<br>-<br>-<br>-<br>173<br>187<br>-<br>4,037<br>-<br>-<br>3,983<br>-<br>-<br>-<br>-<br>3,983<br>-<br>54<br>-<br>-<br>-<br>54<br>17<br>71|Endowed<br>Funds<br>£'000<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>(187)<br>-<br>(187)<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>-<br>(20)<br>(207)<br>-<br>-<br>-<br>(207)<br>5,898<br>5,691|**Total Funds**<br>**2020**<br>**£'000**<br>**2,941**<br>**5,880**<br>**4,479**<br>**1,445**<br>**1,593**<br>**396**<br>**257**<br>**-**<br>**25**<br>**17,016**<br>**138**<br>**4,884**<br>**7,804**<br>**2,823**<br>**564**<br>**-**<br>**396**<br>**16,609**<br>**(53)**<br>**354**<br>**-**<br>**(34)**<br>**(56)**<br>**264**<br>**23,710**<br>**23,974**|Total Funds<br>2019<br>£'000<br>9,036<br>7,560<br>4,463<br>1,282<br>1,422<br>527<br>99<br>-<br>148|
|---|---|---|---|---|
|||||24,537|
|||||201<br>5,371<br>7,919<br>3,883<br>726<br>-<br>517|
|||||18,617<br>81|
|||||6,001<br>-<br>48<br>(532)|
|||||5,517<br>18,193|
|||||23,710|



All amounts relate to continuing operations and, as all gains and losses are included, a separate statement of total recognised gains and losses has not been presented. 

45 



**The International Institute for Strategic Studies** 

**Annual Report and Financial Statements for the year ended 30th September 2021** 

**ii) Comparative movement in funds** 

**For the year ended 30 September 2020** 

|**Group**<br>**Expendable endowment**<br>**Restricted**<br>Gerald Segal Memorial Fund<br>Research Grants<br>**Unrestricted**<br>General fund<br>Pensions reserve<br>**Total funds**<br>**Charity**<br>**Expendable endowment**<br>**Restricted**<br>Gerald Segal Memorial Fund<br>Research Grants<br>**Unrestricted**<br>General fund<br>Pensions reserve<br>**Total funds**|Balances<br>b/fwd<br>£'000<br>5,898|Income<br>£'000<br>187<br>-|Expenditure<br>£'000<br>-|Transfers<br>£'000|Gains/<br>(losses)<br>£'000<br>20<br>-|**Balances**<br>**c/fwd**<br>**£'000**<br>**5,691**|
|---|---|---|---|---|---|---|
||26<br>(9)|-<br>4,037|(2)<br>(3,981)|||**24**<br>**47**|
||17|4,037|(3,983)|-|-|**71**|
||18,511<br>(716)|13,166|(12,626)|(31)<br>31|67<br>-<br>(56)|**18,953**<br>**(741)**|
||17,795|13,166|(12,626)|-|(123)|**18,212**|
||23,710|17,016|(16,609)|-|(143)|**23,974**|
||Balances<br>b/fwd<br>£'000<br>5,898|Income<br>£'000<br>187<br>-|Expenditure<br>£'000<br>-|Transfers<br>£'000|Gains/<br>(losses)<br>£'000<br>(20)|**Balances**<br>**c/fwd**<br>**£'000**<br>**5,691**|
||26<br>(5)|3,247|(2)<br>(3,191)|||**24**<br>**51**|
||21|3,247|(3,193)|-|-|**75**|
||18,002<br>(716)|10,024|(10,164)|(31)<br>31|(53)<br>(56)|**17,778**<br>**(741)**|
||17,286|10,024|(10,164)|-|(109)|**17,037**|
||23,205|13,084|(13,357)|-|(129)|**22,803**|



Expendable endowment - restricted to fund a Chair in Japanese Security Studies at the IISS Gerald Segal Memorial Fund - to fund study on Asian issues. Restricted Grants - for research projects and specific non-research projects in strategic studies. Pensions reserve - represents the FRS102 pension liability. 

## **iii) Comparative Analysis of net assets by fund** 

## **For the year ended 30 September 2020** 

|**Group**<br>Tangible assets<br>Intangible assets<br>Investments<br>Net current assets/ (liabilities)<br>Pension liability<br>**Charity**<br>Tangible assets<br>Intangible assets<br>Investments<br>Net current assets/ (liabilities)<br>Pension liability|Expendable<br>Endowment<br>£'000<br>-<br>-<br>5,691<br>-<br>-|Restricted<br>Funds<br>£'000<br>-<br>-<br>-<br>71<br>-|Unrestricted<br>Funds<br>£'000<br>13,225<br>423<br>4,628<br>677<br>(741)|**Total**<br>**Funds**<br>**£'000**<br>**13,225**<br>**423**<br>**10,319**<br>**748**<br>**(741)**|
|---|---|---|---|---|
||5,691|71|18,212|**23,974**|
||Expendable<br>Endowment<br>£'000<br>-<br>-<br>5,691<br>-<br>-|Restricted<br>Funds<br>£'000<br>-<br>-<br>-<br>75<br>-|Unrestricted<br>Funds<br>£'000<br>13,184<br>423<br>4,628<br>(457)<br>(741)|**Total**<br>**Funds**<br>**£'000**<br>**13,184**<br>**423**<br>**10,319**<br>**(382)**<br>**(741)**|
||5,691|75|17,037|**22,803**|



46 



**The International Institute for Strategic Studies** 

## **FOR INFORMATION ONLY: CHARITY SOFA DOES NOT FORM PART OF AUDITED FINANCIAL STATEMENTS** 

## **YEAR ENDED 30TH SEPTEMBER 2021** 

|**Income from:**<br>_Donations_<br>_Charitable activities_<br>Dialogues, conferences and lecture series<br>Research programmes<br>Publications<br>Membership<br>_Investments_<br>_Capital applied to income_<br>_Other incoming resources_<br>**Total**<br>**Expenditure on:**<br>_Raising funds_<br>_Charitable activities_<br>Dialogues, conferences and lecture series<br>Research programmes<br>Publications<br>Membership<br>**Total**<br>Net (losses)/ gains on investments<br>**Net income/ (expenditure)**<br>**Transfers between funds**<br>**Other recognised gains/(losses):**<br>Foreign exchange (losses)/ gains<br>Actuarial gains/ (losses) on defined benefit pension schemes<br>**Net movement in funds**<br>Funds brought forward at 1 October 2019<br>Funds carried forward at 30 September 2020|Unrestricted<br>Funds<br>£'000<br>2,872<br>3,820<br>214<br>1,319<br>1,450<br>74<br>-<br>3<br>9,752<br>153<br>2,859<br>3,851<br>2,994<br>471<br>10,328<br>612<br>36<br>-<br>(31)<br>149<br>154<br>17,037<br>17,191|Restricted<br>Funds<br>£'000<br>-<br>-<br>2,417<br>-<br>-<br>221<br>131<br>-|Endowed<br>Funds<br>£'000<br>-<br>-<br>-<br>-<br>-<br>-<br>(131)<br>-<br>(131)<br>-<br>-<br>-<br>-<br>-<br>-<br>584<br>453<br>-<br>-<br>453<br>5,691<br>6,144|**Total Funds**<br>**2021**<br>**£'000**<br>**2,872**<br>**3,820**<br>**2,631**<br>**1,319**<br>**1,450**<br>**295**<br>**-**<br>**3**<br>**12,390**<br>**153**<br>**2,859**<br>**6,611**<br>**2,994**<br>**471**<br>**13,088**<br>**1,196**<br>**498**<br>**-**<br>**(31)**<br>**149**<br>**616**<br>**22,803**<br>**23,419**|Total Funds<br>2020<br>£'000<br>2,941<br>3,943<br>2,896<br>1,445<br>1,593<br>257<br>-<br>9|
|---|---|---|---|---|---|
|||2,769|||13,084|
|||-<br>-<br>2,760<br>-<br>-|||138<br>3,189<br>6,643<br>2,823<br>564|
|||2,760|||13,357<br>(53)|
|||9<br>-<br>-|||(326)<br>-<br>(20)<br>(56)|
|||9<br>75|||(402)<br>23,205|
|||84|||22,803|



47