# **Company Number: 615259 Charity Number: 206504** # **THE INTERNATIONAL INSTITUTE FOR STRATEGIC STUDIES** **ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2025** **The International Institute for Strategic Studies** ## **Annual Report and Financial Statements for the year ended 30 September 2025** ## **CONTENTS** ## **Annual Report and Financial Statements** - 1 Strategic Report and the Report of the Trustees - 20 Independent Auditor’s Report to the Members of The International Institute for Strategic Studies - 23 Consolidated Statement of Financial Activities - 24 Consolidated Balance Sheet - 25 Charity Balance Sheet - 26 Consolidated Cash Flow Statement - 27 Notes to the Financial Statements **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** ## **STRATEGIC REPORT AND THE REPORT OF THE TRUSTEES** The Trustees present their report for the year ended 30 September 2025. 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. 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 9. ## **Research, Dissemination and Digital Content** During the past year, the Institute has continued to strengthen its digital-channel portfolio and celebrates the continuous growth of IISS audience reach, surpassing a significant milestone of 500,000 followers across all social media channels, an 11.7% annual increase. LinkedIn has become the most followed IISS channel with over 234,000 followers as of 30 September 2025. Instagram has become the fastest growing channel this year, with a 79% increase in followers. An increased focus on data visualisation, and the use of graphic content and images to illustrate complex topics, has resulted in increasing engagement from audiences. Graphics on European ballistic-missile defence (322,000 views), F-35 1 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** programme (227,000 views), defence-industrial partnerships (214,000 views) and Russian sabotage operations in Europe (132,000 views) have all achieved over 100,000 impressions. The IISS website audience reached over 1.8 million unique users in the past year, with content gathering a total of 5.1 million views. Most website views came from the United States (over 1.2 million), the United Kingdom (over 690,000), Singapore (over 301,000), Germany (over 243,000) and India (over 230,000). The website’s most viewed pages, other than the homepage, were Careers (over 100,000 views), the Military Balance (over 95,000), Shangri-La Dialogue 2025 (over 84,000), the Military Balance+ (over 67,000) and Research Papers (over 42,000). The most viewed Online Analysis article was ‘Global defence spending soars to new high’ by Fenella McGerty and Karl Dewey (viewed over 42,000 times). In the past 12 months, two further ‘Charting’ products _(Charting Middle East_ and _Charting Cyberspace_ ) have been added to the evolving digital-product portfolio in addition to _Charting China_ . Podcast content continues to be an increased area of focus with the _Sounds Strategic_ , _Japan Memo_ and _Arms Control Primer_ podcasts downloaded over 30,000 times and listened to over 15,300 times on YouTube. The Communications team continued to support funded projects in close collaboration with research teams, including the launch and amplification of the _Arms Control Primer_ podcast. Existing IISS flagship publications and key events were supported with recordings, transcripts and short-format content quickly being made available across website and digital channels, adding value to audience experience. Alongside usual media engagement, the Institute organised media roundtables where IISS experts briefed journalists and responded to questions, with high demand for their analysis and comment on both the Russia/Ukraine and Israel/Hamas wars. This year has also seen growing demand from global print and broadcast media to attend flagship IISS events. ## **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 112 events in ten countries with 7,851 attendees participating from over 100 countries. The Institute also continued to deploy its convening power and analytical excellence informally via meetings between senior researchers and leading government figures and policy makers from a range of countries. At these meetings the Institute leverages its global reach and data-based approach to analysis to provide information on strategically important policy decisions being made at the highest levels. ## **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 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 15 to 16. ## **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’_ . 2 **The International Institute for Strategic Studies** ## **Annual Report and Financial Statements for the year ended 30 September 2025** 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 leaders 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 the iiss.org website 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 21st century and their potential trends or resolution. The comprehensive research programme covers these challenges and responds to them both thematically and regionally. The 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 strategic themes and regional concentrations: - Conflict, Security and Development - Defence and Military Analysis - China - Cyber Power and Future Conflict - Geo-Economics and Strategy - Strategy, Technology and Arms Control - European Security and Defence - US Foreign Policy and Transatlantic Affairs - Indo-Pacific Defence and Strategy - Japan Chair - Korea Chair - Latin America - Middle East - Russia and Eurasia - South and Central Asian Defence, Strategy and Diplomacy - Nuclear Arms Control, Non-Proliferation  Southeast Asian Politics and Foreign Policy and Disarmament IISS research programmes actively contribute to a range of government and corporate briefings, convene external and IISS member events, deliver podcasts, and produce research and analysis for the wide range of IISS publications. The Institute has paid increasing attention to facilitating dialogue and conflictresolution. This is achieved by bringing together parties in ‘track-two’ meetings, involving nongovernmental experts, to discuss differences and consider how common interests can be advanced. 3 **The International Institute for Strategic Studies** ## **Annual Report and Financial Statements for the year ended 30 September 2025** 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 across the Institute’s programmes: - Aside from publishing a Strategic Dossier, entitled _Progress and Shortfalls in Europe’s Defence_ , the Defence and Military Analysis (DMAP) programme produced several research reports including Tracking the Components of Missiles and UAVs used by Russia in Ukraine; Defending Europe Without the United States: Costs and Consequences; Enabling Responsible Space Behaviours Through Space Situational Awareness; and A European Reassurance Force for Ukraine. DMAP continued to organise activities for its Missile Defence Initiative (MDI) programme and publish regular blog posts on important defence developments. The team welcomed new colleagues to conduct research into space security and advanced technology. - The Strategy, Technology and Arms Control (STAC) programme published analyses on nuclear weapons and other strategic issues, which were amplified through policy and media briefings. STAC contributed to MDI events and publications, an IISS Track 1.5 project on Iran, and briefings on the military uses of space. It also reconceptualised the _Arms Control Primer_ podcast , in its fourth season of the EUNDP Consortium, to explain national nuclear doctrines and expand its audience. - The Russia and Eurasia programme published widely cited output across IISS and other channels, notably on the Russia-Ukraine war. The programme hosted and delivered a series of events with high-level participation, including a roundtable on Russia sanctions and an EU-funded workshop on Russian influence strategies. Briefings were delivered to official, corporate and media audiences, and several European governments. The programme was awarded an EUCOM grant for a research project on "Russian grand strategy and domestic social cohesion". - The Geo-economics and Strategy Programme broadened the scope of its research work to include broader elements of economic security, such as government policy towards high-technology industries, supply-chain security and critical-minerals policy. The programme has hosted a number of events and contributed towards several papers on these and related issues. The programme has also been invited to produce analysis for governments and companies on economic-security issues. - The Japan Chair Programme published its third Adelphi book in 2025 analysing the effectiveness of Japan's new grand strategy given the country's strengths and weaknesses and its own definition of Japan's national power. The _Japan Memo_ monthly podcast series, now more than 50 episodes old, covered a wide variety of Japan-related issues, ranging from energy security to Japan's relations with the US and China and Japan's role in Indo-Pacific minilateralism. The programme published articles on Japanese defence and economic-security policy, and hosted several events, including one on critical minerals, the secure supply of which is strategically vital for Japan. - The Cyber Power and Future Conflict (CPFC) Programme expanded its reach and influence through high-profile workshops, research, and international dialogues. This included the 4th Future Conflict Workshop in Singapore convening defence organisations from 21 countries and a UK-China Track 2 dialogue on military AI. The programme started a _Charting Cyberspace_ infographic series, setting out power across the layers of cyberspace, Russia’s Information Confrontation Doctrine, Sovereign AI, and trends in state attribution for cyber incidents. It published research papers on topics including the national security implications of biotech, Russia’s information confrontation doctrine in practice, and the adoption of cloud for national security and defence in the Asia Pacific. Additionally, the programme supported the monthly Executive Briefs for GSIS (as outlined below). CPFC will fully launch the Cyber Power Matrix in January 2026, the most comprehensive public dashboard documenting global expressions of state cyber power from the past decade to the present. - The newly established Southeast Asian Security and Defence Programme (formerly Southeast Asian Politics and Foreign Policy Programme) completed the cross-IISS research project on Southeast Asia’s emerging anti-access environment, as well as updating the Myanmar Conflict Map and publishing accompanying reports on Myanmar and Southeast Asian security. The team are also in the process of delivering two new research projects: one on conflict prevention in Southeast Asia, 4 **The International Institute for Strategic Studies** ## **Annual Report and Financial Statements for the year ended 30 September 2025** and another on regional nuclear crisis responses. The Senior Fellow leading the programme edited and delivered the 2025 Asia-Pacific Regional Security Assessment at the IISS Shangri-La Dialogue. - The Indo-Pacific Defence and Strategy Programme focussed on completing a cross-IISS research project on South and Southeast Asian perspectives regarding nuclear escalation dynamics in the region. It has also commenced a project on Nordic-Baltic engagements in and strategies for the IndoPacific. It also produced Online Analyses on regional security questions, podcasts, and engaged actively in IISS corporate briefings. - Supported by endowment funding, the IISS recruited a Senior Fellow for Nuclear Arms Control, NonProliferation and Disarmament based in the Singapore office who started his role in October 2025. - The Middle East programme continued to provide analysis on the various wars in the Middle East, most notably the 12-day conflict between Israel and Iran and the war in Gaza. Middle East analysts authored IISS analysis as well as contributions to external publications such as Foreign Affairs and the Financial Times. Commentary on regional politics drew on the IISS Strategic Dossier: Turbulence in the Eastern Mediterranean: Geopolitical, Security and Energy Dynamics, released in December 2024. The team supported the research and production of a major report on Syria's security sector titled From Fragmentation to Integration: Prospects for Security Sector Reform in Post-Assad Syria. The programme’s Senior Fellows actively disseminated IISS analysis at major conferences, including the NATO summit in the Hague. Finally, the Middle East programme introduced _Charting Middle East_ , a visual overview of significant geopolitical trends and developments in the Middle East and North Africa region, publishing five editions. - The South Asia programme’s annual ‘track 1.5’ South Asia Security conference in Muscat in November 2024 brought together senior officials and experts and was followed by a smaller IndiaPakistan ‘track 2’ conversation in February. The progress made in these two meetings was shattered by the India-Pakistan conflict in May 2025, but despite the high-level of bilateral tensions, in July the programme hosted political leaders from India and Pakistan meeting each other for the first time since the conflict. In November 2025, senior officials from both India and Pakistan reconvened in Muscat, marking a special 20th anniversary of this series of conferences. In addition, the Third 'track 2' ‘intra-Afghan’ dialogue was held in Istanbul in February and the third ‘track 1.5’ conference on India-China relations took place in Singapore in September 2025. The annual ‘track 1.5’ dialogues on regional nuclear deterrence were held in New Delhi in June and Islamabad in November 2025 with policy-relevant research published to inform, encourage, and influence engagement and discussion. - Conflict, Security and Development Programme (CSDP) activities included the publication of _The Armed Conflict Survey_ (ACS) 2025 (as referenced below), with a focus on economic models of nonstate armed groups (NSAGs). Work continued around organised crime and criminal economies, NSAGs, political risks, geopolitical shifts, stabilisation and reconstruction, as well as conflict monitoring, with the production of online analyses, articles, ACS chapters and events. CSDP also conducted field research on security sector reform in Syria and instability dynamics in the Horn of Africa, with the organisation of two international workshop on the topics in Berlin and the publication of two policy reports. Funded by the German Ministry for Foreign Affairs, a dossier style publication on engagement with NSAGs will be published in early 2026. - The China Programme’s work this year revolved around three main themes: China’s defence diplomacy, shifting deterrence landscape in the Indo-Pacific, and cross-Strait relations. This involved conducting research on the role of the PLA’s engagement across the Indo-Pacific as part of China’s Global Security Initiative. Additionally, the programme has applied novel ways to examine the political, military and economic costs of hypothetical crises or conflicts in Asia, in order to better understand the changing landscape of partnerships and alliances in the region. The team continued to publish its _Charting China_ infographic series to highlight datasets on China-related research topics for a wide variety of audiences, and to deliver briefings to corporate members, governments and the media. 5 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** ## **Publications** In 2025 the IISS has continued to see growth in print and ebook formats for commercial publications across the entire portfolio, and high readership of frequent pieces of online analysis on the IISS website. _Strategic Comments_ covers international security and political-military issues. With both paid offerings through publisher Taylor and Francis (T&F) and selected articles free to read via IISS.org, this year’s articles included _the EU’s evolving view of China, political upheaval in Nepal, King Jong-un’s strategic choices, Israel’s domestic divisions, Japan’s increased engagement with China, the ‘new-era’ in EU-UK relations, the low-intensity conflict between Afghanistan and Pakistan,_ and _South Korea’s political crisis._ _Military Balance 2025_ , launched in February, provided data and capability assessments for the armed forces of over 170 countries. The 66[th] edition assesses important defence issues by region, including Russia’s invasion of Ukraine, the diverse range of ballistic and cruise missiles used by the Houthis, and developments in defence industrial production. The accompanying wallchart focused on China’s armed forces, detailing selected unit locations and assessing important aspects of PLA modernisation. The _Military Balance+_ database combines multiple years of data and qualitative assessments with advanced search and graphical capability. The product has received a variety of functional and performance enhancements and continues to be updated across all modules. The work to expand air equipment fits has passed several milestones, and a further highlight is an expansion of the dataset on the Ukrainian armed forces, which introduces information down to battalion level. 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. The April–May 2025 issue (volume 67, number 2) featured five articles on Trump’s America and the Transatlantic Future. The October–November 2025 issue of _Survival_ (volume 67, number 5) featured two full articles under the rubric ‘Present Danger’: European Military Autonomy: What Comes First? by Barry Posen; and Europe Resolved: The Drumbeat of Strategic Autonomy by Erik Jones. A sharp turn in reader preference from online articles to print and ebook continues. The 2025 edition of the annual _Armed Conflict Survey_ provided a review of the political, military and humanitarian dimensions of active armed conflicts from July 2024–June 2025. The review is complemented by strategic analysis of regional and global drivers and conflict outlooks, providing unique insights into the geopolitical and geo-economic threads linking conflicts. This edition also includes Regional Spotlight chapters on the economics of non-state armed groups (NSAGs), including the diversification of drug-trafficking organisations in the Americas; the emerging arms-trafficking activities stemming from Ukraine; and the economic strategy underpinning Hayat Tahrir al-Sham’s evolution from NSAG to leader of the Syrian transitional government. This edition’s Chart of Armed Conflict provided a visual overview of the global conflict landscape, with a particular focus on migration. The _Adelphi_ series is the Institute’s principal contribution to policy-relevant, original academic research. In January, Joshua Rovner’s _Strategy and Grand Strategy_ was published with an online webinar, followed by a promotional event at IISS-Americas. The book sold over 460 copies within the first 10 months, making it the Institute’s bestselling title of the year outside of _The Military Balance_ . In May, Robert Ward’s _Evaluating Japan’s New Grand Strategy_ was published, with an online promotional event in July. On 23 September 2025, we published C. Raja Mohan’s _India and the Rebalancing of Asia,_ which was followed by an online launch the following day and a promotional event at IISS-Asia in early November. In June, the latest _Asia-Pacific Regional Security Assessment_ ( _APRSA_ ) became an annual publication in the Taylor & Francis (T&F) portfolio and is now sold on their online platform, and in print via Routledge.com and other third-party channels. The 2025 edition contained a special chapter on defence industrial partnerships, covering companies and countries from Europe, Northeast, South and Southeast Asia, as well as the Middle East. As well as the regular T&F titles, the IISS continued to disseminate publications to governments, businesses, think tanks and important thought leaders. In addition to these well-received reports, two new 6 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** Strategic Dossiers _, Building Defence Capacity in Europe: An Assessment Progress_ and, _Shortfalls in Europe’s Defence: An Assessment_ were published to accompany the IISS Prague Defence Summits in November 2024 and September 2025. The first book evaluated the key areas for building defence capabilities in Europe whilst the second assesses the progress that has been made in building up capability and evaluates the prospects for European allies achieving NATO’s new investment pledge. The first Global Security and Innovation Summit (GSIS) convened in Hamburg in October 2025, with supporting publications in the form of twice-monthly briefing documents available as free to read online. Topics included digital identities in Europe, European opportunities in biotechnology, the AI challenge for governments and the semiconductor ecosystem and export controls. ## **Dialogues, Lecture Series and Conferences** The Institute’s international dialogues bring government officials together in a combination of formats, and 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 media view the substance and tone of exchanges at the Dialogue as important indicators of the state of the region’s security. The Dialogue provides a platform for defence ministers and other principals to clarify their countries’ positions on important regional security topics. The Dialogue also allows senior regional defence leaders to enhance cooperation with one another, notably through the meetings on the Dialogue’s sidelines, to develop a sense of common community and solutions to regional challenges. The 22nd IISS Shangri-La Dialogue convened from 30 May to 1 June 2025 amidst an increasingly complex and interconnected security environment. The current challenges to regional stability include the proliferation of arms and the weakening of arms-control mechanisms, along with new developments in the domains of cyber, outer space, and undersea. In addition to six plenary sessions, this year’s Dialogue included three live-streamed special sessions, featuring senior military and defence leaders, which discussed topics ranging from crisis management to maritime security, and defence innovation. A common thread running through all the discussions was the need for greater collaboration to stabilise and strengthen the international order. In his Keynote Address, President of the French Republic Emmanuel Macron noted the opportunity for a new special relationship between Europe and Asia in this more competitive world. Similarly, in his Special Address, Malaysian Prime Minister Dato’ Seri Anwar Ibrahim warned against bloc politics and underscored the need for countries to increase their strategic aperture, as ASEAN has done this year through, for example, the ASEAN–GCC–China trilateral. The 2025 Dialogue welcomed 558 delegates, including three heads of state, 28 government ministers, 28 chiefs of defence and seven international organisations. It was attended by 54 national delegations and 57 nationalities. Hundreds of government meetings took place on the sidelines of the event, with the IISS facilitating more than 70 of them. 40 delegates from the Southeast Asian Young Leaders’ Programme (SEAYLP) were welcomed from 19 countries in the Asia-Pacific and beyond who actively engaged in the Dialogue’s public sessions and organised discussions with senior officials. ## **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. The Dialogue also offers government delegations a bespoke occasion to consult bilaterally and multilaterally on the most pressing security and foreignpolicy challenges. 7 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** The 20th IISS Manama Dialogue was convened from 6 to 8 December 2024. It featured an opening address from Dr Abdullatif bin Rashid Al Zayani, Minister of Foreign Affairs, Kingdom of Bahrain, who underlined Bahrain’s approach to international relations and foreign policy. He highlighted the importance of upholding the integrity of international systems and values during turbulent times and engaging effectively with partners who have shared aspirations and interests to end conflicts, ease tensions, and resolve key regional and international issues. As always, the Dialogue facilitated defence diplomacy and led to tangible results, most notably the Canadian government signing a defence cooperation agreement with Bahrain, and the UK government formally joining the C-SIPA alongside Bahrain and the US. The 2024 Manama Dialogue welcomed more than 630 delegates from 63 countries, including over 60 government delegations. In line with the IISS Manama Dialogue’s goal of facilitating military and economic cooperation, the IISS facilitated 85 bilateral meetings on the sidelines of the event. Also attending were 24 senior journalists representing major regional and global outlets, alongside a press corps of over 70, providing important coverage and scrutiny. Online, speeches and commentary from this year’s Dialogue Plenaries, Opening Address and Special Keynote Address generated over 15,000 engagements on social media with content reaching an international audience of over 73 million people. The IISS Manama Dialogue Young Leaders’ Programme was also convened for the sixth time, with 26 carefully selected regional young leaders attending in person. ## **3. Prague Defence Summit** The IISS convened the inaugural Prague Defence Summit from 8 to 10 November 2024, a major forum for political, military and industry leaders to discuss the most effective ways to build defence capacity in the Euro-Atlantic region. In his Keynote Address to the Summit, President of the Czech Republic General (Retd) Petr Pavel asserted that “maintaining a strong transatlantic bond is not merely a strategic choice, but a necessity. A robust US presence in Europe reinforces NATO’s collective defence and sends a clear message to those who intend to threaten peace.” The second edition of the Prague Defence Summit took place from 3 to 5 September 2025. In his Keynote Address to the IISS Prague Defence Summit, NATO Secretary General Mark Rutte provided a clear outline of the Alliance’s priorities to increase defence investments and to speed up defence production in the face of serious and lasting threats to transatlantic peace and security. Over 265 delegates attended the 2025 Summit with representation from 30 countries. ## **4. Lecture Series** The IISS Raffles Lecture series invites major figures in Asian and global affairs to speak on important developments in the Asia-Pacific region, addressing questions of defence, international affairs, geoeconomics and foreign policy. On 20 November 2024, the third IISS Raffles Lecture was given by Sweden’s Foreign Minister, Maria Malmer Stenergard, who discussed Sweden’s shifting policy approach towards the Indo-Pacific against a backdrop of global turbulence, and the opportunities ahead for crossregional collaboration including through Sweden’s recently released national defence policy direction for cooperation with countries in the Indo-Pacific. During the fourth IISS Raffles Lecture on 28 October 2025, Finland’s Minister of Foreign Affairs, H.E. Elina Valtonen outlined Finland’s strategy of ‘comprehensive defence,’ an approach that places equal importance on societal resilience, civil preparedness and the role of the private sector as it does on hard defence capabilities. ## **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 access to the Institute’s publicly available research and analysis disseminated via its publications, speaker events, member briefings and international conferences. Individual members are not directly involved in IISS governance, but form part of a unique global network supporting the work of the Institute and extending the Institute’s reach in the world of international affairs. IISS Corporate Membership is designed to enable corporations and 8 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** 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 members to participate in discussion meetings at its London headquarters and overseas offices in Washington DC, Manama, Singapore, and Berlin, featuring IISS and guest speakers. Examples of the range of in-person events and webinars held over the past year included: In a special 'in conversation' event in December 2024, Minister for Foreign Affairs of Australia the Hon. Penny Wong discussed Australia’s foreign policy approach in an uncertain world, focusing on Australia’s deep commitment to Southeast Asia, including its progress in implementing 'Invested: Australia’s Southeast Asia Economic Strategy to 2040'. In a March event held in Washington, experts examined the key challenges and opportunities in space security and sustainability, focusing on international coordination, governance and the role of great-power competition. Associate Fellow Dr Laurence Rubin was joined by featured experts Mariel Borowitz, Alanna Krolikowski and Bruno Reynaud de Sousa who explored how the private sector drove innovation, shaped policy and governance, and impacted national security in an evolving space environment. In a June webinar, IISS experts Dr Alexander Bollfrass, Emile Hokayem, Fabian Hinz, Dr Hasan Alhasan and Air Marshal (Retd) Martin Sampson provided a strategic assessment of the Israel–Iran conflict, with a focus on actors’ objectives and capabilities, and implications for the region. They addressed the most pressing questions the conflict poses: How feasible are Israel’s political and military objectives? How much damage have Iran’s nuclear facilities sustained and how quickly would they be able to resume enrichment? For how long can Iran sustain its missile and UAV attacks, and how likely is the regime to survive Israel’s assault? What are the main escalation and de-escalation pathways on the horizon? Also in June, a webinar held in collaboration with adelphi and as part of London Climate Action Week, brought together the London-based and international investment community along with government and civil-society stakeholders to explore the critical role of finance in supporting and preserving environmentally sensitive regions, while also fostering economic development, reducing conflict over resources, navigating criminal dynamics, and promoting sustainable livelihoods. 9 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** ## **FINANCIAL REVIEW AND RESULTS FOR THE YEAR** For the year ended 30 September 2025, total income was £33,651,000 (2024: £32,322,000). The primary reason for this variance was convening two Prague Defence Summits within this financial year. Total expenditure for the year rose to £29,525,000, (2024: £25,492,000) with the extra event staging costs. After accounting for net gains on investment assets of £1,677,000 (2024: £927,000); foreign exchange losses of £90,000 (2024: £219,000); and actuarial losses on the defined benefit pension scheme of £36,000 (2024: £70,000); the net movement in funds for the year was a surplus of £5,677,000 (2024: £7,468,000). As at 30[th] September 2025 and 2024, there was no liability on the defined benefit pension. Under the most recent actuarial valuation funding plan, the IISS pension scheme is in a surplus position. Net cash outflow totalled £6,569,000 for the year (2024: £9,357,000 net inflow), leaving total cash balances, including investment portfolio cash, of £9,250,000 at the year-end (2024: £15,819,000). The primary reason for the large variance in cash relates to the investment timing of the new endowment funding in support of the IISS-Asia Senior Fellow for Nuclear Arms Control, Non-Proliferation and Disarmament. The group reported an improved net current asset position of £4,196,000 (2024: £3,453,000). Total net assets as at 30[th] September 2025 Increased to £39,417,000 (2024: £33,740,000). ## **Reserves** ‘Free reserves’ are defined as unrestricted funds excluding designated funds and funds represented by tangible and intangible 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. At 30 September 2025, the Institute held free reserves of £11,896,000 (2024: £9,291,000) which equated to approximately 6 months (2024: 5.5 months) of operating expenditure associated with unrestricted funds. Free reserves comprise IISS unrestricted general funds of £25,318,000, less tangible and intangible fixed assets of £13,422,000. As at 30 September 2025, IISS restricted funds totalled £11,000 (2024: £82,000) and endowment funds totalled £14,088,000 (2024: £11,146,000) with the addition of a third endowment for a new IISS Korea Chair in Advanced Technologies, National Security and Defence. 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 UK investment portfolios. 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 September 2025, portfolio returns over the previous year, three years, and five years as compared to UK CPI +4% were as follows: |**Total Returns**|**1 year %**|**3 years p.a. %**|**5 years p.a. %**| |---|---|---|---| |Portfolio|11.8|9.4|7.3| |Bench(CPI+ 4%)|8.1|8.3|9.4| 10 **The International Institute for Strategic Studies** ## **Annual Report and Financial Statements for the year ended 30 September 2025** The Institute’s UK Japan Chair expendable endowment fund is 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 September 2025, 75% of the Charity Multi-Asset Fund (CMAF) was invested in equities (2024: 72%). During the year, with the generous support of the Korea Foundation and Hanwha, a new endowment was established for the IISS Korea Chair in Advanced Technologies, National Security and Defence. After consideration by the Investment Committee, the permanent endowment funds received to date have also been invested in the CMAF. Funding will be drawn down on a total return basis to meet Korea Chair staff costs and is complimented by a multi-year grant to support Korea Chair programme activities. The Institute’s endowment in support of the IISS-Asia Senior Fellow for Nuclear Arms Control, NonProliferation and Disarmament position has been invested with Schroders Asia, as allocated below. As at 30 September 2025, fund allocations across the portfolios can be summarised as follows: ||**Main portfolio**|**Main portfolio**|**Japan Chair**
**(CMAF)**|**Japan Chair**
**(CMAF)**|**Korea**
**Chair**
**(CMAF)**|**Senior Fellow for**
**Nuclear Arms**
**Control**|**Senior Fellow for**
**Nuclear Arms**
**Control**| |---|---|---|---|---|---|---|---| ||**2025**|**2024**|**2025**|**2024**|**2025**|**2025**|**2024**| |Asset allocation:|||||||| |UK equity funds|9%|9%||||8%|| |UK fixed interest funds|9%|8%|||||| |International equity funds|66%|62%||||62%|| |International fixed interest funds|3%|5%||||29%|| |Portfolio funds|12%|14%|100%|100%|100%||| |Cash|1%|2%||||1%|100%| ## **The IISS and the Economic Climate** The Institute’s Dialogue activities and publications are protected by multi-year agreements that provide contracted levels of income. As referenced above, the Institute has received expendable endowment funding providing guaranteed financial support for three senior research posts. The Institute’s commercial trading subsidiary, Arundel House Enterprises Limited (AHEL), experienced much improved trading conditions in relation to its catering and event activities, in addition to strong growth in consultancy and advisory work with an increased emphasis in the advisory offering. IISS investment portfolio benefited from the strong equity market performance during 2025. 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. ## **Financial health** As outlined in the Financial Review, the Trustees consider the Institute’s financial health to be sound. At 30 September 2025, the Institute held investment assets totalling £21.8 million and cash of £9m with no loan liabilities, compared to investment assets of £4.6 million, £5 million of cash and a building loan liability of £2.4 million in 2015, 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, and in considering budgets and forecasts covering the period to 30 September 2028, 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 continued economic uncertainty. 11 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** ## **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 most significant potential risks, as identified by the Institute’s Risk Register, are actively managed in the following manner: |Damage to the
Institute’s
reputation|As reiterated in the Institute’s ‘Statement of Values’ and ‘Policy on financial
transparency confidentiality and effectiveness’, the IISS firmly states and
demonstrates its commitment to independence and excellence when conducting
all activities, with staff training in place to ensure awareness and understanding
of the Institute’s policy. Trustees have ultimate oversight over potential donors
and funding sources.| |---|---| |A material
weakening in the
Institute’s
financial position
and funding
levels|Continued efforts to diversify revenue streams to ensure no reliance on one
income source. Multi-year agreements are in place for key funders. Liquidity and
foreign exchange positions are monitored regularly through cash flow forecasts
and external currency specialists. A well-diversified investment portfolio
mitigates risk in the event of poor performance of any one asset class. A three-
year forecasting and response-planning model is updated regularly and
monitored by the Trustees. If circumstances require, IISS will work with funders
to adapt grant activities to ensure contractual and funder obligations can be met.| |A major failure of
the Institute’s IT
systems caused
by internal or
external factors|Principal systems, architecture, and software (including cloud servers, fail-over,
disaster recovery, and protective programmes) have been designed drawing on
external professional advice to provide best practice stability and security. In
recognition of the increasing cyber threat, additional security measures have
been introduced to detect and counter attacks.| |Failure to
maintain the
existing high level
of Institute staff
expertise|Retention measures in place include competitive pay, benefits and working
conditions. The competency framework ensures well-structured performance
and development reviews. Consulting Fellows and membership base are drawn
on when in-house expertise is not available. Adapted working practices have
enabled hybrid home and office-based working for staff.| 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, and the expert and opinion-forming communities. The main objectives for the forthcoming year ending 30th September 2026 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 armed conflict and 12 **The International Institute for Strategic Studies** ## **Annual Report and Financial Statements for the year ended 30 September 2025** military capabilities, cyber power, and the security-development nexus. The IISS will furthermore work on the intersection of national security, innovation and technology. The Power stream will include geo-economics and strategy, the evolving tools of economic statecraft in a multipolar system, and regional security dynamics in Europe, the Middle East and the Indo-Pacific. The Rules stream will address the changing nature of international law, the impact of legal diplomacy exercised by major powers, the emerging regulation of advanced technology with security implications, the rise of economic security in national-security policy and the impact of global geopolitics on the rules-based international order. It will also consider approaches to arms control in the fields of nuclear weapons and uncrewed vehicles. - **Digital content** – In 2026 the IISS will aim to continue to grow its commercial customers across Military Balance+ and where other opportunities present themselves in government, the private sector and the analytical community to support IISS research and the Institute’s overall mission. Building on recent success with new forms of digital content, such as the ‘Charting’ series and the dashboards being developed, the digital engagement with IISS stakeholders will continue to grow in breadth and depth. The Institute will launch new digital products in 2026, with a focus on complex data and analysis. Partnerships will continue with existing and new external parties and apply new third party technology, in particular AI tools, to support IISS research, publications, and convening work streams. The deeper integration of technology, content and research teams that has come about through continuous digital transformation is paying dividends in digital content which conveys a more dynamic image of the Institute and makes IISS research priorities clearer to external audiences. - **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. In 2026, the priority of the newest overseas office in Berlin will be to continue deepening IISS engagement with European powers, expanding the IISS analytical footprint in Berlin, and extend IISS convening activity in other European countries, a process that was consolidated in 2025 through the second IISS Prague Defence Summit and inaugural GSIS. The IISS Asia office in Singapore, the IISS Middle East office in Bahrain and the IISS Americas office in Washington, DC will continue to develop strategies to raise further funds and diversify the Institute’s funding base in their respective regions. - **Fundraising** – During the coming year, the Institute will continue its efforts to identify opportunities for major annual gifts or for the establishment of 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 4[th] March 2025. 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. 13 **The International Institute for Strategic Studies** ## **Annual Report and Financial Statements for the year ended 30 September 2025** 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 reviewed its current governance arrangements against the principles within the code and addressed any issues raised where required. During the year under review, Lord Mark Sedwill was appointed as Chair of the Board of Trustees, succeeding Bill Emmott on 16 July 2025, and Florence Parly took up the position of Vice-Chair on the 19 November 2025, succeeding Dr Chung Min Lee. The Board of Trustees would like to record thanks to both Mr Emmott and Dr Lee for their long service and dedicated support to the IISS. ## **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: Grace Skaugen (Chair of Committee & Honorary Treasurer) Matthew Symonds Florence Parly Matt Symonds (appointed 11 February 2025) ## **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: Dr Grace Skaugen (Chairman of Committee & Honorary Treasurer) Matthew Symonds Matt Symonds (appointed 11 February 2025) ## **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: Lord Mark Sedwill (Chair of Committee and Chair of the IISS Trustees) Dr Grace Skaugen (Honorary Treasurer) Caroline Atkinson Neha Aviral ## **Nominations Committee** The IISS Nominations Committee is responsible for proposing new Trustees to the Board. The current membership of the Nominations Committee is: Lord Mark Sedwill (Chair of Committee and Chair of the IISS Trustees) Florence Parly (Vice Chair of the IISS Trustees) Matthew Symonds Kasper Rorsted ## **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. 14 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** ## **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 promotion decisions and 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 and Executive Chairman. Salaries and benefits 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 and monthly competitor research 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 geo-strategic 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 evidence-based 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 and has provided evidence to a number of parliamentary enquiries. 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, the office has built a strong cohort of experts and administrative staff who work closely with the entire IISS 15 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** 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. The office held both in-person and hybrid events to continue outreach to a global audience. This has reinforced 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 and Advisory services. The company reported a profit for the year of £593,000 before gift aid (2024: £356,000). ## _**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 2025, IISS-Asia again convened the IISS Shangri-La Dialogue Sherpa Meeting, an important inter-sessional activity of the Shangri-La Dialogue process. As detailed on page 7, the Shangri-La Dialogue was held from 30 May to 1 June 2025, whilst the Raffles Lecture series continued during the year under review. 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 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 Fund ceased operations on 30 September 2025 and is in the process of winding up. 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)**_ During the year under review, IISS-India, a non-profit subsidiary of IISS with its registered office in New Delhi, was wound up. ## _**IISS Europe gemeinnützige GmbH (IISS-Europe)**_ IISS-Europe was incorporated as a non-profit subsidiary of IISS on 4 November 2019, 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. The IISS-Europe office includes 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’. 16 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** ## **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 29 January 2026 and signed on their behalf by: Lord Mark Sedwill Chair of the Trustees 17 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** ## **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_**|Lord Mark Sedwill (Chair from 16 July 2025)| ||Bill Emmott (Chair until 16 July 2025; resigned 19 November 2025)| |**_Vice-Chair_**|Florence Parly (Vice-Chair from 19 November 2025)| ||Dr Chung Min Lee (resigned 19 November 2025)| |**_Hon Treasurer_**|Dr Grace Skaugen (Hon Treasurer from 21 November 2024)| ||Chris Jones (resigned 21 November 2024)| ||Matthew J Symonds| ||Caroline Atkinson| ||John Brennan| ||Neha Aviral| ||Hakeem Belo-Osagie| ||Kasper Rorsted| ||Matt Symonds (appointed 11 February 2025)| During the year under review, Chris Jones resigned from the Board on 21 November 2024 and Matt Symonds was reappointed to the Board with effect from 11 February 2025. Subsequent to the year-end, Bill Emmott and Chung Min Lee resigned from the Board on 19 November 2025. For the purposes of clarity, there are two Trustees on the Board of Trustees named Matthew Symonds. 18 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** ## **Executive Directing Staff** _**Director-General and Chief Executive**_ Dr Bastian Giegerich _**Director of Geo-Economics; Japan Chair**_ Robert Ward _**Director of Regional Security**_ Emile Hokayem _**Director of Finance**_ Sally Taylor _**Director of Operations**_ Dr John Hobart _**Director of HR**_ Jane Graham _**Director of Editorial Services and Digital Strategy**_ David Tomchak _**Executive Director, IISS-Asia**_ Veerle Nouwens _**Executive Director, IISS-Middle East**_ Martin Sampson _**Executive Director, IISS-Europe**_ Dr Ben Schreer _**Corresponding Executive Director, IISS-Americas**_ Sir Thomas Beckett ## **Agents and Advisers** _**Legal Advisers**_ Stone King Sewell LLP, 13 Queen Square, Bath BA1 2HJ _**Bankers**_ HSBC Bank plc, 60 Queen Victoria Street, London EC4N 4TR _**Investment Managers**_ Cazenove Capital Management (part of Schroder & Co. Limited), 12 Moorgate, London EC2R 6DA Schroders Wealth Management, 138 Market Street, #23-02 CapitaGreen, Singapore 048946 _**Pension Fund Managers**_ Mobius Life, 7th Floor, 20 Gresham Street, London EC2V 7JE _**Pension Consultants / Actuary**_ Mercer, The St Botolph Building, 138 Houndsditch, London EC3A 7AW _**Pension Administrators**_ Aptia, Maclaren House, Talbot Road, Stretford, Manchester, M32 0FP _**Auditor**_ Crowe U.K. LLP, 2[nd] Floor, 55 Ludgate Hill, London EC4M 7JW 19 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** ## **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 2025 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 2025 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. 20 **The International Institute for Strategic Studies** ## **Annual Report and Financial Statements for the year ended 30 September 2025** 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, whether 21 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30 September 2025** 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, the Charities Act 2011, 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, 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 noncompliance 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 non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance 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. **Nicola May** Senior Statutory Auditor For and on behalf of Crowe U.K. LLP Statutory Auditor London Date 13 February 2026 22 **The International Institute for Strategic Studies** ## **Annual Report and Financial Statements for the year ended 30[th] September 2025** ## **CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES (incorporating an income and expenditure account)** **Year ended 30[th] September 2025** |Notes
**Income from:**
_Donations_
2
_Charitable activities_
Dialogues, conferences and lecture series
3
Research programmes
3
Publications
Membership
_Other trading activities_
3
_Investments_
_Capital applied to income_
_Other income_
**Total**
**Expenditure on:**
_Raising funds_
_Charitable activities_
Dialogues, conferences and lecture series
4
Research programmes
4
Publications
4
Membership
4
_Other trading activities_
**Total**
Net gains on investments
**Net income / (expenditure)**
**Transfers between funds**
12
**Other recognised gains/(losses):**
Foreign exchange (losses) / gains
Actuarial losses on defined benefit pension schemes
**Net movement in funds**
Funds brought forward at 1 October 2024
12
Funds carried forward at 30 September 2025
12,13|Unrestricted
Funds
£'000
3,509
13,187
1,632
1,862
2,086
2,544
121
-
360
25,301
67
10,687
5,845
4,154
757
1,656
23,166
680
2,815
(15)
27
(36)
2,791
22,512
25,303|Restricted
Funds
£'000
-
-
5,718
-
-
-
344
220
6
6,288
-
-
6,359
-
-
-
6,359
-
(71)
15
-
-
(56)
82
26|Endowed
Funds
£'000
2,282
-
-
-
-
-
-
(220)
-
2,062
-
-
-
-
-
-
-
997
3,059
-
(117)
-
2,942
11,146
14,088|**Total Funds**
Total Funds
**2025**
2024
**£'000**
£'000
**5,791**
9,555
**13,187**
10,436
**7,350**
7,065
**1,862**
1,516
**2,086**
2,058
**2,544**
1,018
**465**
420
**-**
-
**366**
254
**33,651**
32,322
**67**
53
**10,687**
7,418
**12,204**
12,323
**4,154**
4,347
**757**
688
**1,656**
663
**29,525**
25,492
**1,677**
927
**5,803**
7,757
**-**
-
**(90)**
(219)
**(36)**
(70)
**5,677**
7,468
**33,740**
26,272
**39,417**
33,740| |---|---|---|---|---| 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 27 to 48 form part of these accounts 23 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **CONSOLIDATED BALANCE SHEET (Company Number 615259)** ## **As at 30[th] September 2025** |Notes
**Fixed assets**
Intangible assets
6
Tangible assets
7
Investments
8
**Total Fixed assets**
**Current assets:**
Debtors
9
Cash at bank and in hand
**Total Current assets**
**Liabilities:**
Creditors: Amounts falling due within one year
10
**_Net current assets_**
**_Total assets less current liabilities_**
**_Net assets excluding pension liability_**
Defined benefit pension liability
14
**Total net assets**
13
**The Funds of the charity**
Expendable endowment funds
12
Restricted income funds
12
Unrestricted income funds
12
Pensions reserve
12
Total unrestricted funds
13
**Total group funds**
13|**2025**
**£'000**
**452**
**12,970**
**21,799**
**35,221**
**4,282**
**9,003**
**13,285**
**(9,089)**
**_4,196_**
**_39,417_**
**_39,417_**
**-**
**39,417**
**14,088**
**26**
**25,303**
**0**
**25,303**
**39,417**|2024
£'000
468
12,753
17,066| |---|---|---| |||30,287| |||3,248
9,670| |||12,918| |||(9,465)| |||_3,453_
_33,740_| |||_33,740_
**-**| |||33,740| |||11,146
82
22,512
0| |||22,512| |||33,740| The consolidated balance sheet includes the assets, liabilities and funds of The International Institute for Strategic Studies (Asia) Limited, Arundel House Enterprises Limited, IISS Europe gemeinnützige GmbH, and the Strategic Studies Fund. The accounts were approved and authorised for issue by the Trustees on 29 January 2026 and signed on their behalf by: Lord Mark Sedwill Chair of the Trustees The notes on pages 27 to 48 form part of these accounts 24 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **CHARITY BALANCE SHEET (Company Number 615259)** ## **As at 30th September 2025** |Notes
**Fixed assets**
Intangible assets
6
Tangible assets
7
Investments
8
**Total Fixed assets**
**Current assets:**
Debtors
9
Cash at bank and in hand
**Total Current assets:**
**Liabilities**
Creditors: amounts falling due within one year
10
**_Net current assets_**
**_Total assets less current liabilities_**
**_Net assets excluding pension liability_**
Defined benefit pension liability
14
**Total net assets**
**The Funds of the charity**
Expendable endowment funds
12
Restricted income funds
12
Unrestricted funds
12
Pensions reserve
12
Total unrestricted funds
13
**Total funds including pensions reserve**
13|**2025**
**£'000**
**452**
**12,873**
**15,508**
**28,833**
**4,389**
**5,220**
**9,609**
**(5,893)**
**3,716**
**32,549**
**32,549**
**0**
**32,549**
**7,823**
**16**
**24,710**
**0**
**24,710**
**32,549**|2024
£'000
469
12,596
11,053| |---|---|---| |||24,118| |||2,903
3,889| |||6,792| |||(5,506)| |||1,286
25,404| |||25,404
0| |||25,404| |||5,144
38
20,222
0| |||20,222| |||25,404| The unconsolidated surplus incurred by the Charity in 2025 was £6,586,000 (2024: surplus £1,179,000) The accounts were approved and authorised for issue by the Trustees on 29 January 2026 and signed on their behalf by: Lord Mark Sedwill Chair of the Trustees The notes on pages 27 to 48 form part of these accounts 25 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **CONSOLIDATED STATEMENT OF CASH FLOW** **Year ended 30th September 2025** |**2025**
Notes
**£'000**
**Cash flows from operating activities:**
**_Net cash provided by operating activities_**
A
**Cash flows from investing activities:**
Dividends, interest and rents from investments
**465**
Purchase of property, plant and equipment
**(815)**
Proceeds from sales of property, plant and equipment
**-**
Purchase of software and website costs
**(255)**
Purchase of investments
**(12,381)**
Proceeds from sales of investments
**3,222**
**_Net cash (used in) provided by investing activities_**
**_Net cash provided by (used in) financing activities_**
**_Change in cash and cash equivalents in the year_**
**_Cash and cash equivalents at the beginning of the reporting period_**
**_Cash and cash equivalents at the end of the reporting period_**
B
**NOTES TO THE STATEMENT OF CASH FLOW**
**_A_**
**_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)
_Adjustments for:_
Dividends and interest from investments
Depreciation charges
Amortisation charges
Pension reserve deficit funding
(Gains) on investments
Exchange losses/ (gains) on fixed assets
_Change in cash and cash equivalents due to exchange rate movements_
(Increase)/ Decrease in debtors
Increase/(Decrease) in creditors
Net cash provided by (used in) operating activities
**_B_**
**_Analysis of cash and cash equivalents_**
Cash at bank and in hand
Portfolio cash|**2025**
**£'000**
**3,195**
**(9,764)**
**-**
**(6,569)**
**15,819**
**9,250**
**2025**
**£'000**
**5,803**
**(465)**
**604**
**271**
**(36)**
**(1,677)**
**(6)**
**111**
**(1,034)**
**(376)**
**3,195**
**2025**
**£'000**
**9,003**
**247**
**9,250**|2024
£'000
420
(244)
-
(137)
(2,000)
2,110|2024
£'000
9,208
149
-| |---|---|---|---| ||||9,357
6,462| ||||15,819| ||||2024
£'000
7,757
(420)
601
253
(70)
(927)
21
(219)
1,776
436| ||||9,208| ||||2024
£'000
9,670
6,149| ||||15,819| The notes on pages 27 to 48 form part of these accounts 26 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **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 5803 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 concern 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: 9250.154 ## **c) Investments** 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. 27 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **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 2025, to be received in early 2026, 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. 28 **The International Institute for Strategic Studies** ## **Annual Report and Financial Statements for the year ended 30th September 2025** ## **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. 29 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** |**2 Donations**
**Unrestricted**
**Restricted**
**Endowed**
**2025**
**£'000**
**£'000**
**£'000**
**£'000**
Donation in support of the IISS-Middle East office and related research activities
3,352
**3,352**
Donation for an endowment fund for new IISS-Asia Senior Fellow for Nuclear Arms Control
**-**
Donation for an endowment fund for Korea Chair Senior Fellow
2,282
**2,282**
Other
157
**157**
**3,509**
**-**
**2,282**
**5,791**
**3 i)**
**Dialogues, conferences and lecture series**
**Unrestricted**
**Restricted**
**2025**
**£'000**
**£'000**
**£'000**
Manama Dialogue
**4,120**
**4,120**
Shangri-La Dialogue
**6,080**
**6,080**
Prague Defense Summit
**2,647**
**2,647**
GSIS Hamburg
**219**
**219**
Lecture series
**121**
**121**
**13,187**
**-**
**13,187**
Funding for dialogues, conferences and lecture series received during the year from UK and international Governments totalled ££10,851,000 (2024: £8,171,000).|**Unrestricted**
**£'000**
3,352
157
**3,509**|**Restricted**
**£'000**
**-**
**Unrestricted**
**£'000**
**4,120**
**6,080**
**2,647**
**219**
**121**
**13,187**|**Endowed**
**£'000**
2,282
**2,282**
**Restricted**
**£'000**
**-**|**2025**
**£'000**
**3,352**
**-**
**2,282**
**157**
**5,791**
**2025**
**£'000**
**4,120**
**6,080**
**2,647**
**219**
**121**
**13,187**|2024
£'000
3,452
6,003
100| |---|---|---|---|---|---| ||||||9,555| ||||||2024
£'000
**3,849**
**5,927**
**381**
**279**| ||||||10,436| ||||||| |**3 ii)**
**Research programmes**
South and Central Asian Defence, Strategy and Diplomacy
Strategy, Technology and Arms Control
Europe
Defence & Military Analysis
Conflict, Security & Development
Geo-Economics & Strategy
Middle East
Southeast Asian Politics and Foreign Policy
Indo-Pacific Defence and Strategy
Cyber Power and Future Conflict
Japan Chair
China
Other Research Programmes|**Unrestricted**
**£'000**
11
-
-
333
-
-
-
-
1,163
-
-
10
115
**1,632**|**Restricted**
**£'000**
984
137
-
1,372
849
79
88
203
389
1,171
112
277
57
**5,718**|**2025**
2024
**£'000**
£'000
**995**
1,734
**137**
146
**-**
153
**1,705**
1,547
**849**
469
**79**
8
**88**
80
**203**
255
**1,552**
1,723
**1,171**
766
**112**
43
**287**
-
**172**
141
**7,350**
7,065| |---|---|---|---| Funding for research projects received during the year from UK and international Governments totalled £5,392,000 (2024: £5,844,000) ## **3 iii) Other trading activities** Other trading activities include event catering at its Arundel House venue, the sale of digital publications, and the provision of consultancy and advisory services providing strategic advice and political risk analysis to a range of government and commercial clients. 30 ## **The International Institute for Strategic Studies** ## **Annual Report and Financial Statements for the year ended 30th September 2025** ## **4 i) Analysis of expenditure - charitable activities and governance** Group |**Charitable activities**
_Primary costs_
Dialogues and conferences
Research programmes
Publications
Membership
_Support costs_
Support operations
**Total 2025**
Total 2024|Staff
costs
£'000
2,600
5,167
1,743
274
5,182
**14,966**
13,906|Other direct
costs
£'000
6,131
3,052
135
30
2,781
**12,129**
9,936|Depreciation
charges
£'000
-
15
22
-
774
**811**
853|Exchange
(gains) /losses
£'000
-
-
-
(2)
(102)
**(104)**
81|Allocation of
support costs
£'000
1,956
3,970
2,254
455
(8,635)
**-**
-|**Total**
**2025**
**£'000**
**10,687**
**12,204**
**4,154**
**757**
**-**
**27,802**|Total
2024
£'000
7,418
12,323
4,347
688
-| |---|---|---|---|---|---|---|---| ||||||||24,776
24,776| The above table analyses by expense category the costs related to the charit ~~able activitie~~ s ~~and the go~~ vernance 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 2025 are governance costs of £202,000 (2024: £211,000). 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. 31 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** - **4 ii) Net Income/ Expenditure** |Net income/ expenditure is stated after charging:
Depreciation
Amortisation
Auditors' remuneration
- Audit fees
- Tax advisory and other services
Operating leases
- Land and buildings
Trustees' professional indemnity insurance
**Staff costs**
Wages and salaries
Social security costs
Employers' contribution to defined contribution pension schemes
Operating costs of defined benefit pension schemes (excluding finance costs)
Other forms of employee benefits|**2025**
2024
**£'000**
£'000
**604**
601
**271**
253
**41**
37
**6**
3
**1,378**
1,424
**26**
29
**2025**
2024
**£'000**
£'000
**12,617**
11,209
**1,366**
1,103
**554**
465
**50**
35
**654**
544
**15,241**
13,356| |---|---| ## **5 Staff costs** Costs of Consulting Fellows and other sub-contractors totalling £931,000 (2024: £973,000) are not included in the figures above. Wages and salaries include £3,422,000 (2024: £4,846,000) in respect of restricted grant funded staff salaries. Remuneration of key management personnel totalled £3,060,000 during the year (2024: £2,992,000). No Redundancy payments were paid during the year (2024: nil). ## **The average number of employees (headcount) during the year** |Dialogues and conferences
Research programmes
Publications
Commercial Activities
Membership
Support
**Number of employees whose emoluments were over £60,000**
£590,001 to £600,000
£480,001 to £490,000
£450,001 to £460,000
£360,001 to £370,000
£220,001 to £230,000
£210,001 to £220,000
£200,001 to £210,000
£190,001 to £200,000
£180,001 to £190,000
£170,001 to £180,000
£150,001 to £160,000
£140,001 to £150,000
£130,001 to £140,000
£120,001 to £130,000
£110,001 to £120,000
£100,001 to £110,000
£90,001 to £100,000
£80,001 to £90,000
£70,001 to £80,000
£60,001 to £70,000|**No.**
**20**
**52**
**37**
**9**
**7**
**54**
**179**
**No.**
-
1
1
-
1
2
1
1
-
-
4
1
2
6
4
6
8
8
3
17
**66**|No.
16
50
36
4
6
51| |---|---|---| |||163| |||No.
1
-
-
1
1
-
1
1
1
1
-
4
2
5
1
7
6
8
7
8| |||**55**| None of the above employees (2024: none) are accruing retirement benefits under the defined benefit scheme. 52 of the above employees (2024: 47) are accruing retirement benefits under money purchase schemes, and contributions on their behalf amounted to £372,000 (2024: £340,000). 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 32 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **6 Intangible fixed assets** |**Group**
Cost
At 1 October 2024
Exchange differences on consolidation
Disposals
Additions
**At 30 September 2025**
Amortisation
At 1 October 2024
Exchange differences on consolidation
Eliminated on disposals
Charge for the year
**At 30 September 2025**
Net book value
**At 30 September 2025**
At 30 September 2024|Software and
Website costs
£'000
2,318
-
(80)
255
**2,493**
1,850
-
(80)
271
**2,041**
**452**
468|Total
£'000
2,318
-
(80)
255| |---|---|---| |||**2,493**| |||1,850
-
(80)
271| |||**2,041**| |||**452**| |||468| Projects under development total £206,000 (2024 £41,000) in relation to Finance system change, Website upgrade and CCTV upgrades. These are treated as Assets under construction and are not amortised until they are in use. We expect these to come into use in the first quarter of 2026. |**Charity**
Cost
At 1 October 2024
Exchange differences on consolidation
Disposals
Additions
**At 30 September 2025**
Amortisation
At 1 October 2024
Exchange differences on consolidation
Eliminated on disposals
Charge for the year
**At 30 September 2025**
Net book value
**At 30 September 2025**
At 30 September 2024|Software and
Website costs
£'000
2,297
-
(63)
255
**2,489**
1,829
-
(63)
271
**2,037**
**452**
468|Total
£'000
2,297
-
(63)
255| |---|---|---| |||**2,489**| |||1,829
-
(63)
271| |||**2,037**| |||**452**| |||468| Projects under development total £206,000 (2024 £41,000) in relation to Finance system change, Website upgrade and CCTV upgrades. These are treated as Assets under construction and are not amortised until they are in use. We expect these to come into use in the first quarter of 2026. 33 **The International Institute for Strategic Studies** ## **Annual Report and Financial Statements for the year ended 30th September 2025** ## **7 Tangible fixed assets** |**Group**
Cost
At 1 October 2024
Exchange differences on consolidation
Disposals
Additions
**At 30 September 2025**
Depreciation
At 1 October 2024
Exchange differences on consolidation
Eliminated on disposals
Charge for the year
**At 30 September 2025**
Net book value
**At 30 September 2025**
At 30 September 2024|Freehold
land
£'000
3,000
-
-
-
**3,000**
-
-
-
-
**-**
**3,000**
3,000|Freehold
buildings
£'000
11,456
-
-
-
**11,456**
2,983
-
-
115
**3,098**
**8,358**
8,473|Furniture, fittings,
plant & machinery,
equipment, building
improvements &
motor vehicles
£'000
7,245
9
(900)
815
**7,169**
5,965
3
(900)
489
**5,557**
**1,612**
1,280|Total
£'000
21,701
9
(900)
815| |---|---|---|---|---| |||||**21,625**| |||||8,948
3
(900)
604| |||||**8,655**| |||||**12,970**| |||||12,753| Furniture, fittings, plant & machinery, equipment, building improvements and motor vehicles contain assets in the course of construction £5,000 (2024: £22,000). |**Charity**
Cost
At 1 October 2024
Exchange differences on consolidation
Disposals
Additions
**At 30 September 2025**
Depreciation
At 1 October 2024
Exchange differences on consolidation
Eliminated on disposals
Charge for the year
**At 30 September 2025**
Net book value
**At 30 September 2025**
At 30 September 2024|Freehold
land
£'000
3,000
-
-
-
**3,000**
-
-
-
-
**-**
**3,000**
3,000|Freehold
buildings
£'000
11,456
-
-
-
**11,456**
2,983
-
-
115
**3,098**
**8,358**
8,473|Furniture, fittings,
plant & machinery,
equipment, building
improvements &
motor vehicles
£'000
6,204
9
(858)
772
**6,127**
5,081
5
(858)
384
**4,612**
**1,515**
1,123|Total
£'000
20,660
9
(858)
772| |---|---|---|---|---| |||||**20,583**| |||||8,064
5
(858)
499| |||||**7,710**| |||||**12,873**| |||||12,596| Furniture, fittings, plant & machinery, equipment, building improvements and motor vehicles contain assets in the course of construction £5,000 (2024: £22,000). 34 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September** ## **8 Fixed asset investments** |**Group**
**Quoted**
Hedge Funds
Property Fund
Portfolio Funds
UK Fixed Interest Funds
International Fixed Interest Funds
UK Equity Funds
International Equity Funds
**Total Quoted investments**
**Portfolio cash**
**Total market value at 30 September**
**Total historical cost at 30 September**
Reconciliation of opening and closing market values
Opening market value at 1 October
Additions at cost
Disposals at opening market value
Net (loss)/gain on revaluation
**Closing market value at 30 September**
**Portfolio cash at 30 September**
**Total market value at 30 September**
**Charity**
**Quoted**
Hedge Funds
Property Fund
Portfolio Funds
UK Fixed Interest Funds
International Fixed Interest Funds
UK Equity Funds
International Equity Funds
**Total Quoted investments**
**Portfolio cash**
**Total market value at 30 September**
**Total historical cost at 30 September**
Reconciliation of opening and closing market values
Opening market value at 1 October
Additions at cost
Disposals at opening market value
Net (loss)/gain on revaluation
**Closing market value at 30 September**
**Portfolio cash at 30 September**
**Total market value at 30 September**|**2025**
**£'000**
**593**
**514**
**11,653**
**914**
**364**
**743**
**6,771**
**21,552**
**247**
**21,799**
**19,065**
**10,917**
**12,381**
**(3,287)**
**1,541**
**21,552**
**247**
**21,799**
**2025**
**£'000**
**593**
**514**
**5,398**
**914**
**364**
**743**
**6,771**
**15,297**
**211**
**15,508**
**9,786**
**10,917**
**5,568**
**(2,297)**
**1,109**
**15,297**
**211**
**15,508**|2024
£'000
427
394
5,159
495
280
550
3,612| |---|---|---| |||10,917
6,149| |||17,066| |||9,786| |||10,101
2,000
(2,080)
896| |||10,917
6,149| |||17,066| |||2024
£'000
427
394
5,159
495
280
550
3,612| |||10,917
136| |||11,053| |||9,786| |||10,101
2,000
(2,080)
896| |||10,917
136| |||11,053| 35 **The International Institute for Strategic Studies** ## **Annual Report and Financial Statements for the year ended 30th September 2025** |**9**
**Debtors**
**Group**
Trade debtors
Other debtors
Prepayments and accrued income
**Charity**
Trade debtors
Other debtors
Amounts owed by group and associated undertakings
Prepayments and accrued income|**2025**
**£'000**
**940**
**499**
**2,843**
**4,282**
**2025**
**£'000**
**456**
**252**
**1,017**
**2,664**
**4,389**|2024
£'000
345
540
2,363| |---|---|---| |||3,248| |||2024
£'000
133
334
565
1,871| |||2,903| |**10**
**Creditors: amounts falling due within one year**
**Group**
Trade creditors
Other creditors
Taxation and social security
Accruals
Deferred income (note 11)
**Charity**
Trade creditors
Other creditors
Taxation and social security
Accruals
Deferred income (note 11)
**11**
**Deferred income**
**Group**
Brought forward at 1 October
Received in the year
Expended in the year
Carried forward at 30 September
**Charity**
Brought forward at 1 October
Received in the year
Expended in the year
Carried forward at 30 September|**2025**
**£'000**
**569**
**134**
**399**
**776**
**7,211**
**9,089**
**2025**
**£'000**
**473**
**98**
**268**
**564**
**4,490**
**5,893**
**2025**
**£'000**
**7,942**
**23,098**
**(23,829)**
**7,211**
**2025**
**£'000**
**4,227**
**9,477**
**(9,214)**
**4,490**|2024
£'000
475
92
272
684
7,942| |---|---|---| |||9,465| |||2024
£'000
430
89
230
530
4,227| |||5,506| |||2024
£'000
6,791
18,431
(17,280)| |||7,942| |||2024
£'000
3,815
6,741
(6,329)| |||4,227| 36 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **12 Movement in funds** ## **Group** |**Expendable endowment**
**Restricted**
Gerald Segal Memorial Fund
Research Grants
**Unrestricted**
General fund
Pensions reserve
**Total funds**
**Charity**
**Expendable endowment**
**Restricted**
Gerald Segal Memorial Fund
Research Grants
**Unrestricted**
General fund
Pensions reserve
**Total funds**|Balances
b/fwd
£'000
11,146
10
72
82
22,512

-
22,512
33,740
Balances
b/fwd
£'000
5,144
10
28
38
20,222
-
20,222
25,404|Income
£'000
2,062
-
6,288
6,288
25,301

25,301
33,651
Income
£'000
2,062
3,746
3,746
13,304
13,304
19,112|Expenditure
£'000
-
(2)
(6,357)
(6,359)
(23,166)
(23,166)
(29,525)
Expenditure
£'000
-
(2)
(3,781)
(3,783)
(9,447)
(9,447)
(13,230)|Transfers
£'000
-
-
15
15
(51)
36
(15)
-
Transfers
£'000
-
-
15
15
(51)
36
(15)
-|Gains/
(losses)
£'000
880
-
-
-
707
(36)
671
1,551
Gains/
(losses)
£'000
617
-
-
-
682
(36)
646
1,263|**Balances**
**c/fwd**
**£'000**
**14,088**| |---|---|---|---|---|---|---| |||||||**8**
**18**| |||||||**26**| |||||||**25,303**
**-**| |||||||**25,303**| |||||||**39,417**| |||||||**Balances**
**c/fwd**
**£'000**
**7,823**| |||||||**8**
**8**| |||||||**16**| |||||||**24,710**
**-**| |||||||**24,710**| |||||||**32,549**| Expendable endowment - restricted to fund a Chair in Japanese Security Studies at the IISS, IISS-Asia Senior Fellow for Nuclear Arms Control including a new fund in 2025 to fund Korea Chair Senior Fellow and activities. 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** |Tangible assets
Intangible assets
Investments
Net current assets/ (liabilities)
Pension liability
**arity**
Tangible assets
Intangible assets
Investments
Net current assets/ (liabilities)
Pension liability|Expendable
Endowment
£'000
-
-
14,088
-
-
14,088
Expendable
Endowment
£'000
-
-
7,823
-
-
7,823|Restricted
Funds
£'000
-
-
-
26
-
26
Restricted
Funds
£'000
-
-
-
16
-
16|Unrestricted
Funds
£'000
12,970
452
7,711
4,170
-
25,303
Unrestricted
Funds
£'000
12,873
452
7,685
3,700
-
24,710|**Total**
**Funds**
**£'000**
**12,970**
**452**
**21,799**
**4,196**
**-**| |---|---|---|---|---| |||||**39,417**| |||||**Total**
**Funds**
**£'000**
**12,873**
**452**
**15,508**
**3,716**
**-**| |||||**32,549**| **Charity** 37 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **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 29 February 2024. The scheme is closed to new entrants and no contributions were made during the year. Prior to completion of the valuation, the Institute made deficit funding payments of £25,000 during the financial year. Following the triennial actuarial valuation as at 28 February 2024, these payments are no longer required as the scheme is no longer in a deficit position. Subsequent to the year-end, a full scheme buy-in was completed with an insurance policy purchased from insurer Just to meet all scheme liabilities. ## **i) The amounts recognised in the balance sheet are as follows:** |Present value of funded obligations
Fair value of plan assets
**Asset/(deficit)**
Effect of asset ceiling
**Net defined benefit asset/(liability)**
Amounts in the balance sheet:
Liabilities
Assets
**Net liability**|**2025**
2024
**£'000**
£'000
**(1,722)**
(2,314)
**2,500**
2,530
**778**
216
**(778)**
(216)
**-**
-
**-**
-
**-**
-
**-**
-| |---|---| ## **ii) Changes in the present value of the defined benefit obligation are as follows:** |Defined benefit obligation at start of year
Interest expense
Actuarial losses / (gains)
Benefits paid and expenses
**Defined benefit obligation at end of year**|**2025**
2024
**£'000**
£'000
**2,314**
2,136
**115**
119
**(619)**
121
**(88)**
(62)
**1,722**
2,314| |---|---| ## **iii) Changes in the fair value of the scheme assets are as follows:** |Opening fair value of scheme assets
Interest Income
Actuarial gains / (losses)
Contributions by the company
Benefits paid and expenses
**Fair value of scheme assets at the year end**
The actual return on the plan assets in the year|**2025**
2024
**£'000**
£'000
**2,530**
2,279
**126**
129
**(93)**
124
**25**
60
**(88)**
(62)
**2,500**
2,530
**2025**
2024
**£'000**
£'000
**33**
253| |---|---| 38 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **14 Pension scheme (continued)** ## **iv) The defined benefit costs recognised within the Statement of Financial Activities are as follows:** |Net interest cost
**Total amount charged to the Statement of Financial Activities**|**2025**
**£'000**
**(11)**
**(11)**|2024
£'000
(10)| |---|---|---| |||(10)| The International Institute for Strategic Studies are no longer required to make any contributions to its defined benefit pension scheme in the year ending 30 September 2026, since the scheme completed a full buy-in subsequent to the year-end. ## **v) Defined benefit costs included in other recognised gains and losses** |Return on plan assets (excluding amounts included in net interest
cost) - gain / (loss)
Experience gains / (losses) arising on the plan liabilities
Effects of changes in the demographic and financial assumptions
underlying the present value of the plan liabilities - gain / (loss)
Changes in asset ceiling
**Total gains/(losses) included in other recognised gains and**
**losses**|**2025**
**£'000**
**(93)**
**(453)**
**(166)**
**(778)**
**(1,490)**|2024
£'000
124
(18)
139
(216)| |---|---|---| |||29| ## **vi) The major categories of scheme assets are as follows:** |Equities
Fixed Interest
Diversified Growth
Property
Cash and other
Total Assets|**2025**
**£'000**
**568**
**1,171**
**548**
**152**
**61**
**2,500**|2024
£'000
563
1,255
514
153
45| |---|---|---| |||2,530| |**vii)**|**Principal assumptions at the balance sheet date (expressed as weighted**|||| |---|---|---|---|---| ||**averages)**|||| ||||**2025**|2024| ||Discount rate at 30 September||**5.80%**|5.06%| ||Inflation (RPI)||**3.22%**|3.34%| ||Inflation (CPI)||**2.47%**|2.49%| ||Allowance for revaluation of deferred pensions of CPI or 5% p.a. if less||**2.47%**|2.49%| ||Allowance for pension in payment increases of RPI or 5% p.a. if less||**3.01%**|3.11%| ||Allowance for pension in payment increases of RPI or 2.5% p.a. if less||**2.03%**|2.07%| ||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 2025 imply the following**||**Years**|| ||**life expectancies at age 65:**|||| ||Male retiring in 2024||**20.80**|| ||Female retiring in 2024||**23.50**|| ||Male retiring in 2044||**22.10**|| ||Female retiring in 2044||**25.00**|| 39 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **14 Pension scheme (continued)** ## **b Personal pension plans** The Institute did not contribute to the personal pension schemes of employees in the year. No contributions was charged to the Statement of Financial Activities when due and no cost incurred for the year ended 30 September 2025 (2024: £22,000). ## **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 2025 were £549,000 (2024: £437,000). Contributions outstanding at the year end amounted to £89,000 (2024: £73,000). ## **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 2025 were £24,000 (2024: £19,000). Contributions accrued at the year end amounted to £4,800 (2024: £5,900). ## **15 Leasing commitments** The future total minimum payments to which the Group is committed as at 30 September 2025 under operating lease agreements are as follows: |
agreements are as follows:||| |---|---|---| ||**2025**|2024| ||**£'000**|£'000| |**Office premises**||| |Net present value of total lease commitments due:||| |Within one year|**1,332**|**1,314**| |Between one and two years|**1,344**|**1,344**| |Between two and five years|**3,149**|**3,210**| |Over five years|**1,125**|**1,471**| ## **16 Capital commitments** As at 30 September 2025, capital commitments of £211,000 had been contracted but not provided for. These relate to reinstating fixtures and implementing a new finance system, including website releases and CCTV upgrades.(2024: £63,000). 40 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **17 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 2025 (2024: Nil). Travel expenses for both governance and attending Institute dialogues and other activities were paid or reimbursed in respect of 7 trustee (2024: 6) and the total amount was £9,300 (2024: £18,000). ## **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
Expenses paid on behalf of Parent
Expenses paid on behalf of related party
Amounts paid in during the year
Foreign currency movement
Balance at end of year|**2025**
2024
**£'000**
£'000
**(371)**
(52)
**(842)**
(423)
**2,971**
1,125
**(1,223)**
(1,052)
**(27)**
31
**508**
(371)| |---|---| ## **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
Expenses paid on behalf of Parent
Expenses paid on behalf of related party
Amounts paid out during the year
Amounts paid in during the year
Foreign currency movement
Balance forgiven on behalf of Parent
Balance at end of year|**2025**
2024
**£'000**
£'000
**-**
-
**(1,088)**
(510)
**3,724**
2,760
**(6,747)**
(2,044)
**15**
(14)
**4,096**
(192)
**-**
-| |---|---| 41 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **III Strategic Studies Fund** Related party transactions of the ultimate parent undertaking with the Strategic Studies Fund were as follows: |Balance at beginning of year
Expenses paid on behalf of Parent
Expenses paid on behalf of related party
Foreign currency movement
Balance at end of year|**2025**
**£'000**
**4**
**(4)**
**-**
**-**|2024
£'000
3
-
1| |---|---|---| |||4| Related party transactions of IISS-Asia with the Strategic Studies Fund were as follows: |Balance at beginning of year
Expenses paid on behalf of Parent (IISS-Asia)
Expenses paid on behalf of related party
Amounts paid in during the year
Foreign currency movement
Balance at end of year|**2025**
**£'000**
**(23)**
**-**
**23**
**-**
**-**
**-**|2024
£'000
(164)
-
137
-
4| |---|---|---| |||(23)| ## **IV IISS India Organisation** Related party transactions of the ultimate parent undertaking with IISS India Organisation were as follows: |Balance at beginning of year
Expenses paid on behalf of Parent
Expenses paid on behalf of related party
Foreign currency movement
Balance at end of year|**2025**
**£'000**
**64**
**(61)**
**(3)**
**-**|2024
£'000
71
(7)| |---|---|---| |||64| ## **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
Expenses paid on behalf of Parent
Expenses paid on behalf of related party
Amounts paid out during the year
Foreign currency movement
Balance at end of year|**2025**
**£'000**
**867**
**(1,276)**
**915**
**-**
**2**
**508**|2024
£'000
542
(186)
297
225
(11)| |---|---|---| |||867| 42 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **18 Subsidiary undertakings** ## **I Arundel House Enterprises Ltd** Registered office : Arundel House, 6 Temple Place, London, WC2R 2PG Registered number : 3720258 - The charity beneficially owns the entire share capital of Arundel House Enterprises Limited, a company - **a** incorporated in England and Wales under registration number 3720258, which manages the conference facilitie and provision of event catering at Arundel House, and provides advisory and consultancy services. 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
Cost of sales
Gross profit
Other expenses
Net profit before taxation
Gift Aid to IISS
Loss after taxation|**2025**
**£'000**
**2,600**
**(360)**
**2,240**
**(1,647)**
**593**
**(593)**
**-**|2024
£'000
1,085
(41)| |---|---|---| |||1,044
(688)| |||356
(356)| |||-| ## **c Summary of balance sheet for Arundel House Enterprises Ltd** |Tangible fixed assets
Debtors
Cash at bank and in hand
Current assets
Creditors
Net assets
Aggregate capital and reserves|**2025**
**£'000**
**-**
**78**
**877**
**955**
**(945)**
**10**
**10**|2024
£'000
-
804
13| |---|---|---| |||817
(807)
10| |||10| ## **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** |Donations
Dialogue and Lecture Series
Research programmes
Other
Total income
Dialogue and Lecture Series
Research programmes
Total expenses
Net losses less gains on investments
(Deficit)/Surplus for the year|**2025**
**£'000**
**-**
**6,201**
**2,666**
**165**
**9,032**
**(4,032)**
**(6,844)**
**(10,876)**
**380**
**(1,464)**|2024
£'000
6,003
6,073
2,280
157
14,513
(3,791)
(3,900)
(7,691)
0
6,822
43| |---|---|---| **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **c Summary of balance sheet for International Institute for Strategic Studies (Asia) Ltd** |Tangible fixed assets
Debtors
Cash at bank and in hand
Current assets
Creditors
Net assets
Aggregate capital and reserves|**2025**
**£'000**
**6,339**
**406**
**2,635**
**3,041**
**(1,783)**
**7,597**
**7,597**|2024
£'000
6,125
358
4,495| |---|---|---| |||4,853
(1,861)| |||9,117| |||9,117| ## **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. During the year, it was agreed to wind up SSF and these will be final audited financial statements. ## **b Summary of income statement for Strategic Studies Fund** |**2025**
**£'000**
Lectures Series
**-**
Research
**-**
Total income
**-**
Lectures Series
**(15)**
Research
**-**
Other expenses
**-**
Total expenses
**(15)**
Deficit for the year
**(15)**
**Summary of balance sheet for Strategic Studies Fund**
**2025**
**£'000**
Debtors
**-**
Creditors
**-**
Net assets
**-**
Reserves
**-**|2024
£'000
132
-| |---|---| ||132| ||(138)
-
-| ||(138)| ||(6)| ||2024
£'000
20
(5)| ||15| ||15| ## **c Summary of balance sheet for Strategic Studies Fund** ## **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. IISS-India was wound up during the year and the company officially dissolved on 25 July 2025. 44 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **b Summary of income statement for IISS India Organisation** |Other Income
Total income
Other expenses
Total expenses
Surplus for the year|**2025**
**£'000**
**-**
**-**
**60**
**60**
**60**|2024
£'000
-| |---|---|---| |||-| |||-| |||-| |||-| ## **c Summary of balance sheet for IISS India Organisation** |Debtors
Cash at bank and in hand
Current assets
Creditors
Net liabilities
Aggregate capital and reserves|**2025**
**£'000**
**-**
**-**
**-**
**-**
**-**
**-**|2024
£'000
5
-| |---|---|---| |||5
(65)| |||(60)| |||(60)| ## **V IISS Europe gemeinnützige GmbH** Registered office: Palais am Pariser Platz, Pariser Platz 6A, 10117 Berlin, Germany - **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** |Dialogue
Research
Other Income
Total income
Dialogue
Research
Total expenses
Surplus/(Deficit) for the year|**2025**
**£'000**
**2,942**
**910**
**-**
**3,852**
**(2,801)**
**(1,010)**
**(3,811)**
**41**|2024
£'000
381
972
-| |---|---|---| |||1,353| |||(163)
(1,426)| |||(1,589)| |||(236)| ## **c Summary of balance sheet for IISS-Europe** |Tangible fixed assets
Debtors
Cash at bank and in hand
Current assets
Creditors
Net liabilities
Aggregate capital and reserves|**2025**
**£'000**
**49**
**106**
**271**
**377**
**(1,165)**
**(739)**
**(739)**|2024
£'000
46
475
1,273| |---|---|---| |||1,748
(2,537)| |||(743)| |||(743)| 45 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **19 Comparative Information** ## **i) Consolidated Statement of Financial Activities (incorporating an income and expenditure account)** ## **Year ended 30[th] September 2024** |Notes
**Income from:**
_Donations_
2
_Charitable activities_
Dialogues, conferences and lecture series
3
Research programmes
3
Publications
Membership
Other trading activities
_Investments_
_Capital applied to income_
_Other income_
**Total**
**Expenditure on:**
_Raising funds_
_Charitable activities_
Dialogues, conferences and lecture series
4
Research programmes
4
Publications
4
Membership
4
_Other trading activities_
**Total**
Net gains on investments
17
**Net income/ (expenditure)**
**Transfers between funds**
12
**Other recognised gains/(losses):**
Foreign exchange gains
Actuarial losses on defined benefit pension schemes
14
**Net movement in funds**
Funds brought forward at 1 October 2023
12
Funds carried forward at 30 September 2024
12,13|Unrestricted
Funds
£'000
3,552
10,436
1,637
1,516
2,058
1,018
120
-
254
20,591
53
7,418
6,313
4,347
688
663
19,482
558
1,667
-
(219)
(70)
1,378
21,134
22,512|Restricted
Funds
£'000
-
-
5,428
-
-
-
300
193
-
5,921
-
-
6,010
-
-
-
6,010
-
(89)
-
-
-
(89)
171
82|Endowed
Funds
£'000
6,003
-
-
-
-
-
-
(193)
-
5,810
-
-
-
-
-
-
-
369
6,179
-
-
-
6,179
4,967
11,146|**Total Funds**
Total Funds
**2024**
2023
**£'000**
£'000
**9,555**
3,053
**10,436**
9,930
**7,065**
7,679
**1,516**
1,480
**2,058**
1,890
**1,018**
515
**420**
343
**-**
-
**254**
140
**32,322**
25,030
**53**
86
**7,418**
7,366
**12,323**
12,174
**4,347**
4,700
**688**
554
**663**
359
**25,492**
25,239
**927**
(110)
**7,757**
(319)
**-**
-
**(219)**
(111)
**(70)**
(70)
**7,468**
(500)
**26,272**
26,772
**33,740**
26,272| |---|---|---|---|---| 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. 46 **The International Institute for Strategic Studies** **Annual Report and Financial Statements for the year ended 30th September 2025** ## **ii) Comparative movement in funds** ## **For the year ended 30 September 2024** |**Group**
**Expendable endowment**
**Restricted**
Gerald Segal Memorial Fund
Research Grants
**Unrestricted**
General fund
Pensions reserve
**Total funds**
**Charity**
**Expendable endowment**
**Restricted**
Gerald Segal Memorial Fund
Research Grants
**Unrestricted**
General fund
Pensions reserve
**Total funds**|Balances
b/fwd
£'000
4,967
22
149
171
21,134
-
21,134
26,272
Balances
b/fwd
£'000
4,967
22
106
128
19,299
-
19,299
24,394|Income
£'000
5,810
-
5,921
5,921
20,591
-
20,591
32,322
Income
£'000
(193)
-
3,841
3,841
12,013
-
12,013
15,661|Expenditure
£'000
-
(12)
(5,998)
(6,010)
(19,482)
-
(19,482)
(25,492)
Expenditure
£'000
-
(12)
(3,919)
(3,931)
(11,479)
-
(11,479)
(15,410)|Transfers
£'000
-
-
-
-
(70)
70
-
-
Transfers
£'000
-
-
-
-
(70)
70
-
-|Gains/
(losses)
£'000
369
-
-
-
339
(70)
269
638
Gains/
(losses)
£'000
370
-
-
-
459
(70)
389
759|**Balances**
**c/fwd**
**£'000**
**11,146**| |---|---|---|---|---|---|---| |||||||**10**
**72**| |||||||**82**| |||||||**22,512**
**-**| |||||||**22,512**| |||||||**33,740**| |||||||**Balances**
**c/fwd**
**£'000**
**5,144**| |||||||**10**
**28**| |||||||**38**| |||||||**20,222**
**-**| |||||||**20,222**| |||||||**25,404**| 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 2024** ## **Group** |Tangible assets
Intangible assets
Investments
Net current assets/ (liabilities)
Pension liability
**Charity**
Tangible assets
Intangible assets
Investments
Net current assets/ (liabilities)
Pension liability|Expendable
Endowment
£'000
-
-
11,146
-
-
11,146
Expendable
Endowment
£'000
-
-
5,144
-
-
5,144|Restricted
Funds
£'000
-
-
-
82
-
82
Restricted
Funds
£'000
-
-
-
38
-
38|Unrestricted
Funds
£'000
12,753
468
5,920
3,371
-
22,512
Unrestricted
Funds
£'000
12,596
469
5,909
1,248
-
20,222|**Total**
**Funds**
**£'000**
**12,753**
**468**
**17,066**
**3,453**
**-**| |---|---|---|---|---| |||||**33,740**| |||||**Total**
**Funds**
**£'000**
**12,596**
**469**
**11,053**
**1,286**
**-**| |||||**25,404**| 47 **The International Institute for Strategic Studies** ## **FOR INFORMATION ONLY: CHARITY SOFA DOES NOT FORM PART OF AUDITED FINANCIAL STATEMENTS** ## **YEAR ENDED 30TH SEPTEMBER 2025** |**Income from:**
_Donations_
_Charitable activities_
Dialogues, conferences and lecture series
Research programmes
Publications
Membership
_Investments_
_Capital applied to income_
_Other incoming resources_
**Total**
**Expenditure on:**
_Raising funds_
_Charitable activities_
Dialogues, conferences and lecture series
Research programmes
Publications
Membership
**Total**
Net (losses)/ gains on investments
**Net income/ (expenditure)**
**Transfers between funds**
**Other recognised gains/(losses):**
Foreign exchange (losses)/ gains
Actuarial gains/ (losses) on defined benefit pension schemes
**Net movement in funds**
Funds brought forward at 1 October 2023
Funds carried forward at 30 September 2024|Unrestricted
Funds
£'000
4,102
4,339
469
1,862
2,086
121
-
325
13,304
67
3,840
627
4,156
757
9,447
680
4,537
(15)
2
(36)
4,488
20,223
24,711|Restricted
Funds
£'000
-
-
3,305
-
-
216
220
5
3,746
-
-
3,783
-
-
3,783
-
(37)
15
-
-
(22)
72
50|Endowed
Funds
£'000
2,282
-
-
-
-
-
(220)
-
2,062
-
-
-
-
-
-
617
2,679
-
-
-
2,679
5,109
7,788|**Total Funds**
**2025**
**£'000**
**6,384**
**4,339**
**3,774**
**1,862**
**2,086**
**337**
**-**
**330**
**19,112**
**67**
**3,840**
**4,410**
**4,156**
**757**
**13,230**
**1,297**
**7,179**
**-**
**2**
**(36)**
**7,145**
**25,404**
**32,549**|Total Funds
2024
£'000
3,908
3,849
3,812
1,516
2,058
340
-
178| |---|---|---|---|---|---| ||||||15,661| ||||||53
3,326
7,004
4,340
687| ||||||15,410
928| ||||||1,179
-
(99)
(70)| ||||||1,010
24,394| ||||||25,404| 48