INsfrniTE OF ADVANCED MOTORIsfs UMrrED REPORT OF THE COUNCIL AND FINANCIAL sfATEMENTS 31 MARCH 2021 REGIsfERED COMPANY NUMBER: 562530 REGIStERED CHARrrY NUMBERS: 249002 (England & Wales) SC041201 (Scotland) INSTITUTE OF ADVANCED MOTORISTS LIMITED statutory Auditor: Crowe U.K. LLP st Brkle's House 55 Ludgate Hill London EC4M 7JW Bankers: HSBC Bank pk 60 Queen Victoria Street London EC4N 4TR Investment Managers: J M Finn & Co Limited 4 Coleman Str￿t London K2R ￿A Rathtx)ne Investment Management 8 Finsbury Circus London EC2M 7AZ Ruffer LLP 80 Virtoria Street London SWIE 5JL Registered Offi￿. l Albany Pla Hyde Way Welwyn Garden City Hertfordshire AL7 3BT INSTrruTE OF ADVANCED MOTORISTS UMrrED Patron HRH Prince Edward, The Duke of Kent President Nigel Mansell (JE Wice Presidents Sir Peter Bottomley steven Norris Nid( Ross Members of the Councll (Trustees) Stuart Malcolm Donald QPM Derek John Mcmullan Georgina Gaye Bromage Elizabeth Marguerite Coylelamp John Mark Jenkins Dr Catherine Ann Uoyd Nicholas David John Lomas Nicholas John Anthony Stein Jeffrey WillcocLs Dr Bradty Poulson Anthony Steven Cearns Chair (from 25 February 2021) Chair (to 25 February 2021) (resigned 25 February 2021) {re5igned 31 August 2020) (appointed 21 May 2020) (appointed 19 Novemter 2020) (appointed 22 Juty 2021) Company Secretary Neil Ha￿15 ARM Secretaiies ￿Mited (resigned 22 Juw 2021) (appointed 22 July 2021) Senlor Management Tony Gr*ni(lJe Business Development Dirertor (to 5 May 2020) Interim Chief EX￿ut￿e (fri)m 5 May 2020) Chief Executive (from 30 NovemTrRr 2020) Chief Executive (to 5 May 2020} Finance Director IT & Operations Support Director Marketing, Communications & Memlkrship Dlrector (to 16 CLtoter 2020) Policy & Research Dirertor Head of Driving & Riding Stsndards & pr￿lUCt Development Head of Human Resources, Faciif(* & Complian Head of Field servi￿ Delivery Sales & Marketing Director (from l July 2020) Mike Qulnton Nell Harrfs Gor(bn Clelknd Kate Tonge Neil Grelg Richard Gkdman Nico58 &nith Amanda Smith James Hall INrnTE OF ADVANCED MOToRI￿s LIM￿ED REPORT OF THE COUNCIL The Council (trustees who are also directors of the company for the purpc6es of the Companies Act) submits its annual port and audited financlal statements for the year ended 31 March 2021. The finanoal statements comply with the Charities Att 2011, the CompanE5 Act 2006, the Memorandum and A￿deS of Association, and Accounting and Reporbng by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Stsndard applicable in the UK and Republic cf Ireland C'FRS 102? (effective l January 2019). structurei governance and management The Institute of Advanced Motorists Limited fIAMI Is a company Ilmlted by guarantee and governed by its Me￿rarK1um and ArtKles of Association, which were adopted by Special Resolution on 20 February 2009 and amended by Special Resolutlon on 18 November 2009. IAM operates the Advanced Driver and Ri(krTests CT*t{s)?. Indivtduals who successfully pass these Tests (or are eligible for exemption) are IAM Roadsmart Members {or"nEmbersl subject to payment of membership subscriptions. Prospertwe memiErs who have Thjt yet passed the Tests are classed as Associate Members (or"Associates'J, IAM'S Memorandum and Articles of Association provide that the following matters are subjert to the determination of IAM ROad9￿rt Members at Annual or ot￿r General MeetiThJs: receiving the Council's report on the Company's actsvities Sin￿ the previous Annual General Meetingi electing members of the Coundl; and varying the annual memtershlp subscrlptlon. The CourKil consists of such LAM Roadsrnart MernLErs as shall from to time agree, on the invitation of the Council, to seNe as a trustee on the Council. The Nominations Committee of the Council is responsible for identifying tX)tential new trustees and making recommendations to Counal. New trustees who join Q)uncil during the year are requir&i to offer themselves for elertion at the next Annual Gener31 Meeting. New trustees are selected on the basis of the skllls, expertise and experience they bring to the Council. A roie definition for trustees is in place. All new trustees receive an induction briefing, which indudes their general charity company kw responsibil￿e$, IAM'S Memorandum and Articles of Association and the functions of IAM'S Council, committees and management. Tralning ft trLStees Is provided when r￿uired, induding U￿ateS on test pracknce in charity governan￿. Twstees served during the year are listed on page 2. The Counal expresses its sin￿re gratitude for their dedicated seTvice to Derek Mcmullan, Dr Catherine Uoyd and Georgina Bmmage who resigned as trust￿ Sin￿ the previous Council Report. Derek Mcmullan had b￿￿ a memter of Council for over 11 years with previous experience as an Observer involved with loo31 groups and stepped up to tEcome Chair for a limited perit)J in order to provide COn￿n￿ty and reassuran￿ at a tlme of slgniflcant change in the CourKil's comFaJsition. Stuart Donald was unanimousty appointed as Chair on 25th February 2021. Dr Catherine Uoyd stepFed down after almost 10 years as a memEer of Council due to the commitments as5C£klted with her new role as a drNing instructor for Thames Val* Poli￿. Georgina Bromage felt COM￿l￿d to ￿sIgn for health reasons having seryed IAM in various roles for many years IndudirvJ the last four years as a trustee. The Council seeks to ensure it has an appropriate mix of skills and experien￿ to discharge ts reS[￿nSibIlitieS effectively and in line with good governance practi￿. Following the appointment of Stuart Donald, John Jenkins, Nick Lomas, Nick Stein and Jeff Willcocks described In last yearfs report, the Council has tEen further strengthened by the appx)inknent of Dr Bradley Poulson who C(￿trIbuteS knowledge gain&i from hi5 career as an infomatK)n technology professional as wdl as experien￿ of the charity sector, strdtegy development and g0veman￿. More recendy the Council has apF#)inted Anthony Cearns who brings &lditional knowledge and experien￿ in finance. Elizabeth CoyleQmp and Nlck Lomas retire from the Council at the next AGM under Artide 21 and offer themsetves for re-etectK)n at the next Annual GeneTrl Meeting. Dr Bradley Poulson, Anthory Cearns and Samantha Kane retire at the next Annual General Meeting uThYer 23 and offers theMSe￿e5 for re-electi)n. The Finan￿ & Audit Committee, chaired by Jeff Willcocks (Anthony Ceams from 22 Juty 2021), ts respjnslble for: ensuring financial reporting obligations a￿ met for IAM and its subsidiarres (together ￿he IAM Group?; INsrrrLrrE OF ADVANCED MOTORlSfs Um￿ED REPORT OF THE COUNCIL (continued) ensuring the statutory financial statements for the IAM Group a￿ propedy audit&l and that accepted recommendations of the auditors are implemented. establishing, maintaining, monitoring and reviewing financial controls throughout the IAM Group, in order to safeguard its assets and ensure its financial integrity. confirming IAM'S investment policy is appropriate and monitoring the performance of those investments,. confirming IAM'S reserves policy is appropriate; and ensurlng appropriate prcKedures are in Pla￿ to identify and minimise risks to the IAM Group, including the risk of fraud. The Remuneration Committee, chaired by Gina Bromage (Samantha Kane from 23 September 2021)i approves the remunetBtion of IAM'S senlor management and monitors the overall ￿mUneratiOn poliry across the tAM Gr(￿p. When approving remunerabon, the Committ￿ con5Kier5 a number of factors, including.. individuals, skills, experien￿ and performance. the size and scope the of the individuals, responsibilities; and the market rate for different roles. The Nomlnations Committee, Chai￿ by Nick Lomas, Is tssked wbth assessing the structure and composition of the Council, specifying requirements for trustee and senior executive posf(ions, identfying and assessing candidates and making recommendations to the Counal regarding ap￿intments to those roles. A Marketing & Communications Committee, chaired by John Jenkins was established during the year with oversight of the IAM Group's marketlng and cornmunicatKJns Kbviknes including public relations and lobbying, with the aim of advising how to maximise the benefit of those artivfcies, and on strategic gTOWth OPWJrtunities and threats. Day to day management of the IAM Group Is delegatgj to the Chlef Execufjve and the senior management team IlsW on page 2. Counal initially aptM)inted Tory Greenidge as Interim Chief ExecutNe in May 2020 folk)wing Mike Quinton's resKJnatlon arKI confirmed his appointment as Chief Executive in NovemLEr 2020. LAM'S subsidiary tsading companies during the year were: IAM Drive & Survive Limited"Diive & SuNive" provides corporate risk management and driver training services; IAM Driver Retraining Academy Limited VDRA'g which provides drink drive rehabilitation courses; Institute of Advanced Motorcydists Limlted whlch manages the IAM Group's relabonshlp that provides Insuran￿ servlces to IAM Roadsmart Members. IAM Group Se￿1￿ Limited which sells book5 and accessories relating to advanced driving and riding, and road safety; and Professional Driver Se￿1￿ Limited fPDSJ which provides administration seNices to Servi￿ pmviders ot*rating courses under the National Driver Offender Retraining Scheme C'NDORS,?. "IAM RoadSmarV' is the brand name used ￿ the promotion and delivery of SeN1￿ by the IAM Group. "IAM Roadsmart groups" are geographically basoj indeFendent charitEs or other entities that are affiliated to tAM subJ&t to the Group Rules whKh are maintained by IAM. Accordingly, the IAM Group's consolvjated financial statements do not incorporate the finantiaS statements or ￿tivity of IAM Roadsmart groups. Jncil ad(nowledge5 that the su￿SS of IAM'S membership and related acbvfcies is deFendent on the goojwill and commli ment of volunteers operating within IAM Roadsmart groups. Council expresses its appreciation for the commitsnent and dedication of those volunteers without whom IAM would be unable undertake core advanced driving and rkllng projrammes and related membership attwities In their current guise. Council also takes the opportunty to commend the large number of volunteers and stsff who have utilised their adVan￿d rwing and riding skills to sUp￿rt tTr NHS and emergery Servi￿ during the Covid-19 pandemic; besdes such activity being of value in and of i15eK, il also IN￿L[rE OF ADVANCED MOToR￿s LIM￿ED REPORT OF THE COUNCIL (continued) serves to enhance the reputstion of tAM and provKles the opportunty to demonstrate the value of advanc&1 dr￿ing and riding skills to a wider audien￿. Charlty Governance Code Trust*s on the Counal tske their g0Veman￿ responsibilities Serious￿ and aim to have a g0Veman￿ framework that is frt for purpose, compliant and efficient. Our previous revlew in 2018119 fourKI that we were subsiantialty t￿pIlant wth the provlsbns of the Charity Goveman Code issued in 2017. As a result of the significant changes to the compos￿10￿ of the Counal, and the short-term imperatNe io focus on the impact on the IAM Group of the Covid-19 pandemic, together with the appDintsnent of an external professional company secretary in Juty 2021, a further assessment of Complia￿ with the Charity Governan Code has IEen deferred until the 2021122 year. That assessment will Include an evaluation of the sknlls, experEnce and effertfveness of tru*s, the identification of any gaps with what Is consldered appropriate based on best practice, and recommendations from the charty regulator and appropriate professional a$s(￿latiOnS, along wl(h plans to mitigate and medy such gaps. strategic report "ectNes and activf(ies IAM'S objects are those laid down in its Articks.. to improve the standard of driving and riding and the promotion of road safety for the public beneffit, by (but not limited to) the operation of an advanced test The trustees have considered the ￿Uirement for IAM'S aims to be demonstrably for the publlc beneff(. In dolng so, tl trustees have had regard to the Charity Commission's gL￿dan￿ on public benefL Council review￿ its Mission, Vision and Strat￿lC Goals during the year with the aim of improving clarity and enhancing their relevan￿ in the fa￿ of ongoing changes that impact driving and riding and In soaetsl exFeCtations: to improve road safety through the provision of training, education and rehabilitation programmes urKJerpinned by a nationalty rtrognised Advanced DrivinglRiding Test. to ueate a safer, greener, and highly skilled community of drivers and riders. Strategicg0315 make our roads safer through the delivery of tailored training and education programmes speafic to the needs of each driver and rider; maintain financial stability and ensure investment is available to support our charitsble obj'ective; be an agile and pr¢)Jressive organisation that embra￿ change and industry innovation and adapts its proxjucts and seNices appropriately; be recognised in the transport and road user communlty as the authorty and'go to, expert on both driving and riding stsndards. grow the organisation and ensure our products and service5 are relevant and accessible to all, regardless of age, ra￿, gender, disability, or sexual orientation; within each local community be a posstive èjvc￿te for drivers and riders by lobbying key road safety regulators and government stskeholders; and to influence key decision and wlicymakers through our leading expertise in motoring road safety best practice and industry-shaping research, evaluatlon, and evldenced-based Initiatives. The Council is cUr￿ndY engaged in devdoping a new long-term strategy for IAM R(M￿smart and will revisit the Objectives, Mission, Vision and Strategic Goa15 in the light of the agr￿ strategy when finalisal. INSTITUTE OF ADvAN￿D MOTOR15fs LIMrrED REPORT OF THE COUNCIL (continued) The IAM Group's activities are focussed on achievement of the charitabk objects as set out above. The IAM Group seeks to do this, and thereby fulfil IAM'S publlc benefit ￿quIrement, in the folbwing principal ways: I) IAM'S advanced driving test was launched in 1956 and an advanced test for motorcyclists was introduced in 1976. Through programmes delivered by IAM'S volunteer ne￿OrK the skills taught and tested are constantly updated for the ever-changing features and challenges of the UK'S roads and vehicle technologies. By Improving awareness of hazards and risk and teaching best prattice techniques, IAM reduces the likelihoDJ drivers and riders will put themselves into a posltion of danger through error or omission. IAM Roadsmart groups exist throughout the UK, with volunteers delivering sUPPOrt and advi￿ to drivers and riders seektng to improve their driving and ridlng skills, many of whom go on to pass the Test. SITr￿ In￿ptIOn, IAM has awarded advanced status to over 500,000 driver and riders. The IAM Group continues to serve the demand from professional driving organisation5 seeking to enhan￿ their internal driver training programmes by accrediting them with the Advanced Driver qualification. 2) Lobbylng and original road safety research, together wlth publiclty using soclal and broadcast media and the press as well as direct communication to IAM Roadsmart Members are important features of IAM'5 work to promote road safety. Regular tips, blcxjs and press releases are also used to help all drivers and riders improve their skills a5 we seek to "infomi and influence" on road safety issues. Roadsmart Maga￿ne continues to reinforce IAN Roadsmart Members, knowledge and awareness of road safety issues. 3) The IAM Group offers drlver training for companies whose Workfor￿ undertake business related drlvlng. Drive & SuNive training falls Into the following categories: li￿n￿ checking to ensure that all drivers are legally able to drive andlor entitled to drive speclfic categories of vehicle; driver audlts and rlsk asse55rnents - to build a profile of drivers and test their basic road knowledge; e-learning - a package of training modules delivered on-line with each focussing on s￿¢if￿ aspects of driving sklll. Content can be designed to meet specifK customer requirements- and on road training for drivers and riders who have been identified as having the ne￿ for a more intensive intervention with a professional fleet trai￿r. 4) Through DRA, the IAM Group offers retraining for offenders through delivery of drlnk-drive ￿habIll￿tIOn scheme courses. htevements and The trustees and sentor management use seve￿1 indicators to monitor the perforn)an￿ of the IAM Group including: A comprehensive Set of monthty key [erf0m￿n￿ indutors including: membership numters and movements by type of memkr, dirett deblt members and those signed up for Gift Atd,. live Commarket Insuran￿ wiides. sales of AdVan￿d DriverlRider projrammes, modules and assessments; Test passes,. ObseNer numbers,. court refe￿al5 for DRA courses and the pmportton converted to sales. bookings for Drive & Survive courses,. and stsff turnover and sickness information Monthly management accountirvJ infomiation including sales alld margin infomation, evaluation of investsnent px)rtfolio returns, and a comparison to budgets for sales, costs of Sa￿ and overheads the IAM Group. INST￿Lr[E OF ADVANCED MOTORI¥fs LIM￿ED REPORT OF THE COUNCIL (continued) OvwvÉwof the of the Cowd.19panden Plans for the year, tf)Jether wf(h KPI tsrgets and budgets, We￿ devdoped by the sen￿ Management Team and approved by Council in February 2020. Those plans Trpidly became outdated due to the Covid-19 pandemic, the associated ￿trictionS and subsequent lockdowns. The Cov#J-19 pan￿miC together with government reStr￿￿On5 and guidelines began to 5ignificantty impart the IAM Group during March 2020 and continued throughout the year. The restricknons on [￿pIe fKJm diffe￿nt households m*ting, combined with the worknng-from-home mandates severdy restricted rK)mal business activitEs. In the ￿n{xIS where some of the restrictions were temporarily lifted, we were unable to restart many of those activities due to the ongoirrfJ Un￿rtaInty and remaining restrictions. The key IM￿ on the IAM Grou￿$ actlvlties of the Covtd-19 pandemlc were: SUs￿nsiOn of Advanced DriverlRKJer cour5es' SUs￿nsiOn of on-road m¢(iules and courses in b(*h IAM and Drlve & Survive and other activi￿e5 suth as IAM'S Skills Days which are held at speaalist motor track sites. suspension of in-classroom DRA courses; extension of meMbe￿hIp for AS5￿￿1tes unable to take their Tests. downtum in re(TUitment of new A550ciate5 due to the unavailabilty of the progrdmme of obseNed runs ￿qUir￿1 to prepare for the Tests; the closure of IAM'S Offi￿ and the ￿Ul￿ment for stsff to work from home rather than the Offi￿ for extended Feri¢)Js,' fudoughing of staff in accordance with the govemmenvs Coronavirus job support scheme; and the curtailment of activities in IAM Roadknrt group5. In addition, considerable resou￿ had to iE devot&l to managing the caKellation of courses, and other t￿king5 a￿1 processing refunds for memLErs and ojstcfflers who had paid in advan￿. To deal wth the evofving nature of the Covid-19 pandemic and ￿S impact on the IAM Group, the Council imFlemented weekly M￿ting5 Wlth Senior Management Team to discuss potential resp)nses including furkjugh arrdngements for staff and communication to IAM Roadsmart Memters, Assochites and customers, while the Senior Management Team inityally considered the Covid-19 chalienges on an almost daily basis. ￿nancklI knnarios were pre￿red to assess the potential financlal impart of the ￿)ndern1c induding a ￿Thje of dates for the ending of restrictions and the timescales ra]uired for tivf(ies to'ramp-up" to their prewous levels. These ￿narIo5 and the tracklng of financial performan￿ against them enabled an ongoing assessment to be made a5 to whether further deci5K)ns were needed to ￿du￿ costs. The above had a significant detrimentsl effect on the IAM Group revenue5, although associated cost ￿Uttl0￿5 and (3reftJl cost control, includirYJ the suspension of general performance relateAi ￿MuneratIOn and ￿Y rises during the year, together wf(h £0.29m of support from the govemmenvs Coronavirus Job Retention kheme for furloughed staff, and the abilty to deliver tAM DRA courses on-line, SU￿SSfUllY mitigated the impact such that the operating financial ￿sUIt (excluding investment returns) was c105e to break-even while strong ￿tUrnS from the investment portfolio kd to a Ix)ttom line surplus of almost £1.5m, as descriw below and in the Finanaal Review section of this ￿￿t. To malntsln customer sery1￿ and supwrt to memiErs and customer5 to the extent wsslble In a pandemlc envlronmen¢ IT and telephony solutions such as online networknng and meeting software were successfully implemented to facilitate staff working from home. The Council expre5w its thank5 to stsff for demonstrating the flexibility to adopt new m(xies of worknng successfully in a stre55ful and challenging environment. IAMRoadSmart MemiEts andgroups IAM Roadsmart Member numbers fell during the year by 8,403 to 75,896 at 31 March 2021 {2020: PA,299). While the retention rate ftir existing members remained high at 89010 (2019120: 91%), the main reason for the large reduction in memters, cOMpa￿d to ￿cent year5, was the drop in new members to 1,698 (2019120: 4,974) whlch was attributsble to the suspenslon of the Advanced Driver and Rider programme and Tests resulting from the restrictions applicable during the Covid-19 pandemic. The pro￿￿On of members paying by direct debit increased to 68% while tl* proportion signed up for Gift Aid increased to 72%. Advanced Driver and Rider programme sales decreased to 2,235 (2019120: 5,457) due to the Covid-19 pandemic as it was not feasible to Sell on-road programmes where these could not be delivered. As at 31 March 2021, IAM had 5,161 INSTrruTE OF ADVANCED MOTORIsfs LIM￿ED REPORT OF THE COUNCIL (continued) A￿￿lateS (2020: 6,423). Where Assock8tes were unatle to complete their Advan￿ Driver or Rider programme or take their Test due to the Covid pandemk restrirtlons, IAM has extended their period of A55¢xiate membership beyoThJ the nomial renewal period of one year. IAM remains committed to its volunteer group network and will continue to develop and support strategEs to encourage LAM Roadsmart MeM￿r$ to participate in IAM Roadsmart group activities. "Infom" is a monthly update, supplemented by W￿klY news ale￿ as requlred, dlstrlbuted to IAM Roadsmart group officials, examiners and observers, and is tAM's primary method of direct communication with them. As at 31 March 2021 there were 172 IAM Roadsmart groups in the UK {2020:181), of which 490/0 are car groups, 33Wo are bike groups and 18% are combined carlbike groups, with the reduttion in groups arising from merger5 be￿een groups. The IAM Group's exclusive Insuran￿ scheme, run by Cornmathet Insurance SeNT￿, continued to provide attracknve pricing and ir￿uranCe coverage for IAM Roadsmart Membe￿. As at 31 March 2021, a totsl of 27,537 (2020: 28,647). member EM)licie5 were in for￿ of which just under 78 % were for car or motorcycle Insu￿nCe. Drlve & Survive Drive & Survwe's activities were impacted severely by the Covid-19 pandemic restrictions whlch prevented dellvery of on-road training and temporarily diminished customer ap￿tIte for such training while economic activity was subdued, and customers, employee5 were furloughed. As a result, its revenues decreased by 620/0. In response, fttus was pla￿ on promoting e-learning m(xJules which are included as part of the CHOICES offering which integrates li￿n checking, rlsk management and e-learning and have a hlgher gross margin per￿ntage. The opportunity was taken to refresh e-leaming modules with enhanced video content and improved educational engagement as a basis for renewing sales campaigns as businesses recover from the Covid-19 pandemlc restrictions. After a drop in revenue in the initial months of 2020121 as dassroom-based Cour￿ were cantrlled and Suspend￿1 due to the Covid-19 pandemic, DRA received the requisite authorisation from the DVSA and We15h Govemment and successfully transfomied to delivering its drink drive rehabilitation courses on-line so that rnonth￿ revenues ￿0Vered 5harpty from August. This transformatKJn was supported by the efforts of the tAM Group's staff and DRA trainers and had the benefrt of delivering signrf1can￿Y higher gr055 margins as the cost of hiring venue5 was eliminat￿1. 4,065 Individuals (2019120: 4,959) completing thelr drink drive rehabilitation course during the year. No impart from a redurtion in convicknons during Covid-19 kKkdown periods when there were far fewer drlvers on the road has b*n ex￿rienCed to date although this ￿MaInS a risk as convirtions and referrals ne￿SarilY lag changes in driving acbvity. While conscious of that risk, the bu5ines5 rernains ￿11 placed to continue to tknefit from the busin&ss review undertaken last year with the numiEr of referrals from the courts totalling 7,078 over the year while the conversion rate for referffjEs Increas￿ to 570/0, Research andlobbying De5piie the pandemic, IAM'S pollcy and research artlvltles continued apace during the year. We helFed launch the National Motorcydists Councll to promote safe and sustalnable motorcycllng and ensure its key position in the transport debate is secured, completed Department for Transport funded research on the opinions of older drivers, and participated in a Parliamentary Council on Transport Safety led report on the future policy for'alcolocks, in the UK which was also funded by the Department for Transport, IAN also p￿sented a survey of pan European driving schools on training for autonomous vehicles as part of the ongolng EU funded "Drive 2 The Future. projett. During the year, IAM undertook suNeys and generted successful medla coverage on topics such as the revlew of the Highway Code, Smart MotoNays and returning to driving after lockdowns. IAM also joined the Department for Transport Road's Safety Delivery Group and participated in weral ministerial briefings. Driver andRts Training System (DARTS) The core phase of the IAM Group's new system for managing membership and training went live in November 2020. This replaced legacy 5y5tems that were at the end of their life, which did not adequately support the tAM Group's INsT￿E OF ADVANCED MOTORIsfs LIN￿ED REPORT OF THE COUNCIL (continued) marketing, operational or management reporting needs, and were difficult to maintsin. The design, testing and implementation of the CO￿ phase wa5 a complex project requiring input from several IAM teams including field servi delivery, membership engagement, commercial sales, customer care, marketing and finance and was led by the team reporting to a steering committee chal￿d by the CEO. The migration of dats to DARTS provided the opportunity to cleanse and stsndardise data from existing systems reducing the need for manual intervention in preparing management reports and increasing their ￿liabIlity. The cost of developing and implementing DARTS, excluding ongoing li￿nce costs, was EO.40m of whlch £0.17m was incurred in the previous years. Those costs were wlthln the original projert plan parameters. Enhan￿ments to deliver further improvements, including self-Servi￿ funrtionality, marketing support and web-site integration are planned for subsequent phases of DARTS development with the aim of delivering maximum beneflts in tem15 of supporting marketing and sales,. member, assoclate and customer experien￿,. IAM Roadsmart group activities; and efficiency, thereby assisting the underpinning of IAM Group's attivities in line with LAM'S charitable objects. r subsidiaries IAM Drive & Survive and IAM DRA have net liabilities on their balances sheets at year end of £0.79m (2020.. £0.35m) and £0.17m (2020: £0.27m) resFectively. Both subsidiaries undertake activities which fall within the charitsble objects of IAM and are being supported by IAM. Ll During the year ended 31 March 2021, the IAM Group did not carry out any attivities to raise funds from the general public. nc The Group Statanent of Financial ArtNities on page 22 indicates a net surplus of £1.44m {2019120: £0.25m deficit). c1)Mpa￿ to an Or￿InallY budgeted deficit of £0.42m. The 0￿rating result for the year (befo￿ investment inc(xne and gain5 on the investment portfolio) was very close to b￿ak-eVen with a deficit of £0.09rn which continue5 the favourable trend established in the p￿VIouS year when the operating was reduced to £0.18m from the mud) high deficlt levels experlenced In prevlous years. As indicated above, the finanaal results was heavlly Influen￿ by Covld-19 pandemic related fartors aThJ althO￿h the budget for the year tecame obsolete as a result, the Council was nonetheless pleased to note the result compared favourably to the original budgeted operating deficit of £0.32m due to the mtiigating factors described under the heading '(￿erv￿ of the impact ￿ the Covi&19 pandemic, in the'Achievements Perf0rnan￿ section, above. Investment income and gains of £1.54m (2019120.. £0.07m loss) reflect strong gains throughout the year as markets welcomed governments, and ￿ntral banks, responses to the initial impact of the Covid-19 pandemic. The investment p)rtfoli05 have continued to deliver good returns Sin￿ the year end. Overall revenues, excluding investsment Income the one-off benefft of the governmenys Corortavirus Job Retentton Scheme grant of £0.29m, decreased by 25.3% from the previous year for the reasons summarised under the heading 'Achievements and perfomiance, above. Membership subscriptions, including Gft Aid, decreased by 5.00/0 reflecting the decrease in IAM Roadsmart MemtH and Associate Member numbers, partialty offset by an increase in member subscription rates approved at the previous annual general meeting of IAM Roadsmart Members. Test fees from ASSc￿lateS mem1￿rS decreased 58.70kn due to the decllne In sales of Athanced Driver/Rlder programmes. Drive & Survive revenues were severely impacted by the Covid-19 pandemic, declining 64.60/0 as on-road training aotivities were suspended and demand from commercial customers diminished, whtch frustrated the abilty of the refocussed saks team to build on the previous year's gains with enhanced produrt offerings. ￿MitIng the reduction ITr IAM DRA revenues arising from the Impact of the Covld-19 pandemlc to 22.00/0 was a hlghly credible outcome ￿flecting the transformathjn online of the delwery of drink drive rehabilitstion courses tcKJether with the continued impkmentation of the r&sults of the business review undertaken in the previous year. INsfFfLffE OF ADVANCED MOTORIsfs LIM￿ED REPORT OF THE COUNCIL (continued) IAM Cornmarket Insuran￿ commissiors fell by 6.0% as the number of polKies held by IAM Roadsmart MemiErs continu￿1 to decline which was disapwinting. PDS, which continues to generate net income but is not regarded as a core service offering, saw a 30.50/0 fall in income due to the suspension of customers, NDORS courses due to the Covid- 19 pandemic. G￿55 margin for DFiA increased significantty to 60.6 % {2019120.' 43.50/0) largely reflecting the lower a)sts of deliverirvJ courses on-line, while the gross margin for IAM Drive & SuNive declined from 50.6tr/0 to 46,30/0, as did that for PDS which decreased marginally from 48.00/0 to 47.2 % . A conunued focus in improviThJ efficiency, tojether with lower costs of sales frcm the reduthon In Servi￿ dellvery due to the Covid-19 pandemic, resulted in a 21.70h reduction in expenditure to £5.67m for the IAM Group. A￿hoUgh comparisons are difficult because of the impact of the Covid-19 pandemr, this Contin￿ the trend of r8Juang costs from the previous year. Staff costs, which are the largest component of overheads fell by a further 4.10/0, Wlth savlngs a￿SIng from the curtailment of serviw due to Covid-19 and efflciency savlngs ach￿Ved across travel costs, expend￿Ure in support of IAM Road5mart groups, printing, postage and stationery, medla related costs, and marketlng and communications. Other efficiency savings were reali5ed in facility costs and telephonylintemet costs. ￿ costs increased which was expected as IAM continues to invest in utyjrading it systems and capabilities, as did depreaatb)n charges reflectlng the Implementstion of DARTS in November. Overall, the Council conslder the financial results for the year reflect rewesent a highly credible outturn in a challenging environment. Mthough the scope for projecting forwards from the results in a year impacied so heavity by a one-off pandemic is extremely limited, the Council is confident that revenues will return to pre-pandemic levels following the end of Covid-19 pandemic restrictions albeit wf(h a lag as activities ramp-up and cOnf￿enCe returns. The Council recognises the longer-term challenges to grow the top line and for the IAM Group to remain hvJhly relevant in delivering its charitable objects in a world that is forever chaThJing, including in the fields of driving and riding, To that end, the Council has commissioned a strategic review of the IAM Group and its Servi￿ with the asslstance of an expert extwnal consutsncy which will rewrt duriThJ the first half of 2021122 50 that agreed recommendations can start to be iMp￿rnented. The balan￿ sheet on page 22 indicates that the IAM Group's net assets ¥we incwsed by £1.44 mllllon (201912020: dedine of £0.25m) to £8.68m (2020: £7.24m) as at 31 March 2021 ￿fletting the net itfflow of fuThJs during the year shown in the Statement of Financial AcbvitEs. The main movements in Fixed Assets was the increase in the investsment rtfoli05 from £6.43m to £7.90m arising from market gains a5 no additional funds were committed or funds withdrawn from the portfolios during the year. Intangible fixed assets at net Ixok value Increased marginally during the year to £0.37m as resu￿ of £0.17m further expend￿Ure on DARTS offset by depreaation charges on legacy systems whKh have now te decommission￿ and on the DARTS system after fc went live in November. The IAM Group's baLan￿ slEet indicates net current assets of £0.32m (2019: £0.34m). Cash balance5 declined 18.5% to £0.65m {2020: £0.79m) while debtors and creditors decreased by 10.2% and 17.20/0 respertNelyi further anaWsis is shown in notes 12 and 13 to the financial strt￿ents. Full implementation of a business strategy for growth will require further time and resources, especially given the signlficant impact on operations during 2020121 of the Covid-19 pandemic. The IAM Group remains committed to making the n￿￿ary investsment to deliver that growth and thereby further delivery of its charitsble objects. Accordingly, the Council has approved a deficit budget for 2021122. The Council recognises it will need to ￿COnsider that budget further once the recommendations of the strategic review have been evaluated while it also sees considerable long-term benefit in anchoring budgets within the context of a longer-term strategic plan. The Finance & Audit committ￿ is responsible for ensuring IAM'S reserve5 wlicy is appropriate and revi￿$ the pol annually. The last review determined that the IAM Group requires reseNes to: meet ongolng costs of Investment to enable the IAM Group to increase its Impart and broajen its appeal,. abg)rb the impact of planned or unplanned financial deficits; facilitate investments in a portfolto of assets likely to provide a higher return, ￿￿pting the asgxiated volatility, than that avaiL3ble from cash; and io INThTE OF ADVANCED MOTORIsfs LIMrrED REPORT OF THE COUNCIL (continued) fund business development opportunities to maximise the future profitability of its portfolio of the commercial buslnesses, whlth could requlre addltional invesbnent. The Finan￿ & Audit Cornmitt￿ consider&1 it appropriate for the IAM Group to continue to maintsin r￿￿e5 in order to meet cu￿ent and future investment ne￿ts and, prior to the Covid-19 pandemic, were in the proce55 of detemining long-term reseNes policy including a target level for free reseNes of around six months, operating extenditure. Given the Un￿rtaInty engendered by the Covid-19 pandemic and the potentkil need for considerable okErational and capitsl exFenditure to invest in opportunittes In line wfch strategic review CUrren￿Y teing cond￿, together with the higher levels of operating deficits experien￿ in some recent years, the Finan￿ & Audit Committee also considered r( apprrjpriate to hold a higher level of free reserves at present. The Finan￿ & Audit Committee considers the CUTrent levd of reseNes to LE appropriate given the opwrtunities and challenges on the foreseeable horizon tryJether vvith a prudent level of cover for unforeseeable challenges that may lie ahead. Free reseNes defined as undesignated, unrestiKted funds not including furKls ￿p￿SentIng tsnglble and Intsnglble fixed assets and represent funds that are available to help IAM meet its objective5. As at 31 March 2021, the IAM Group's free reserves were £8.22m (2020., £6,76m). The Finan￿ & Audit Committee considers this level of re5eNes, representiro over ￿1Ve months, totsl expenditu￿, as adequate and In line wf(h the consideratlons of the ￿nantt & Audit Committee above. As at 31 March 2021, the IAM Group's totsl accumula￿ funds were £8.68m {2020.' £7.24m). IAM'S investment policy Is revfiewed annualty by the Council and monitored by the Finan￿ & Audit Committee. The investsment policy is aimed at securing the ￿st financial retum from its investsments with an acceptable level of risk through engaging reputable and eXpEr￿nCe￿ external investsment managers with SFerfied investment mandates. Income is not drawn from the Investment portrolios on a regular basis and is instead reinvested so that the p￿0110$ have a totsl retum (combined income and capitsl retum) obiecbve, with acce55 to dTrwdown funds to finan￿ O￿atiOnal needs as and when required. The market value of IAM'S irwestment portfolios at 31 March 2021 was £7,90m (2020: £6.43m). The increase was attributsble to divKlend5, interest and net market value gains wthin the portfoli05 as there were no additional funds invested in or drawdowns from the portfolios during the year. As set out In the Rlsk Management section of thls report, during 2020121 the Finan￿ & Audit Committee undertook comprehensive review of investment portfolio managers. After due consideration, it was decided to retsin the SeN1￿ of the three incumbent inve5trnent managers.. JM Flnn & Co Ruffer LLP Rathbone Investment Management The objective of the JM Finn portfolio is to achieve a combined return from income and capital. The portfolto is manag& on a dlscretionary basis and is invested across a range of asset classes including equities, bonds, property, cash and alternatives using both direct investnEnts and pooled investment vehicles. PerfomTrnce (net of fees) Is assessed against the MSCI/PIMC4 WMA Balan￿ index to tske account of non-UK assets, although the fomial agreement with JM Finn 15 to benchmark perfomiance against a 70% FfsE all-sharel300/0 FfsE UK Gilt tenchmark The value of the portfolio a5 at 31 March 2021 was £3.27m (2020.. £2.64m). The portfolio gained 23.5Wo (2019120.. 1.9% loss) during the year compared to the tr￿Chmark gain of 22.00/0. Perf0Mian￿ of the Ruffer pJtrolio, is measured against the obj'ective of never losing morw in ary twefve-month ￿lod generating returns (net of f￿) ahead of the'risk free" alternative of de￿￿siting money in a reputsble bank, with no benchmark. The Ruffer portfolio is invesw in a segregated fund that follows the Ruffer absolute return investment strategy, whtch manages risk by spreading Invesknent across a variety of conventional assets, including 8]uty, tond, commcKIty and currenry positions, utilising both direct investrnents and pwled investment vehicle5. Over the year, the market value of investments in the portft)lio InC￿aSed by 21.9¥0 (2019120.. 4.30/0 gain) to £2.32m (2020: £1.90m), compard to the benchmark retum of 0.1%, ￿flecting Rufferfs asset allocation which benefited from strong rises in li IN¥rrtLrrE OF ADVANCED MOTORIsfs LIMtTED REPORT OF THE COUNCIL (continued) 9)vereign bonts, indexed-linked LK)nds ar¥J gold as well as equities atKI a temporary teneficial all(Kat￿n to cryptocurrencies. The obj'ective of the RathiA)ne portfolio, which was valwl at £2.32m (2020: £1.88m) at 31 March 2021, is to generate a combined retum from capital growth and income of CPI plus 3% over the medium term. A￿hOUgh the inveslment strategy is a dlscretlonary one, allowing the investment manager to invest the portfollo across diversffied a￿et clas (including cash, bonds, equities, proFety, hedge fund5, Structured products, private equty and commcxlities), to date the portfolio has b*n Invested solely in the Rathbone Active Income & Growth fund {iTKome units) which is simllar dNersified. The Rathix)ne FKJrtfolio gained 23.40/0 (2019120: 6.8Wo loss) in the year, compared to a LEnchmark gain of 3.4010. As part of the review of investrn￿t manager performance, the Finance & Audit Committee noted that performan of the RathtK)ne portfolio has Improved considerably compared to the two previous years and that rf( now comfortab ex￿eded its benchmark ￿tuM on a cumulative basis over the three years SIn￿ l April 2018. IAM'S investment p)licy is that Whe￿ balances of more than £1.50 million of IAM Group's cash balances are depostted or are likely to be deposited with institution5 Wlth a minimum long-term debt rating of below'A- this should be communicated to and considered at the next FInan￿ & Audit Committee meeting, but that in any case balances of up to £2.0 million may be deposited with the IAM Group's current principal bankers, HSBC. Goin Con￿rn The trustees have assessed the ability of IAM and the IAM Group to continue as a going COn￿rn. That a5se5srnent induded consideration of the recent trading Ferfomiance, the remaining uncertainty regardiro the futu￿ trajettory of the ongoing Covid-19 pand￿1C on the IAM Group's trading and finance5, the level of investments held as ￿erVeS and the assodated risk profile of those investsnents, the key risks faced by the IAM Group as descritEd under'Risk managemeny below, together with the underfying budgets for 2021122 and a roll fonmard of the budget for 2021122 using conseNative assumptions. The trustee5 draw additional comfort frcffi the way the IAM Group wa5 able to react to an unprec*nted exterrpl sh(tk in 2020121 in which it delivered a very small operating def￿1t c¥)mpared to the reducuon in revenues. The trustees, assessment is that IAM and the IAM Group will ￿maIn going cOn￿rn$ for a ￿Mad of at knst 12 months from date of approval of this retX)rt and of the financial slatements. Risk mana ement The IAM Group has a fomial pro￿$ for assessing risks and imElementing risk management strategies. This invofves Identifying risks and prioritising them in tems of likelihood of (￿CurrenCe and potenth?l impatt, together with devising and implementing mitigations as considered appropriate. Risks registers maintained by individual department are reviewed by the CEO and those risks identified as strategic in nature are now included as a stsnding agenda Item for the Council n￿&Ing5 for further corsiderat￿n by trustees. The Council considers the prinapal risks to which the IAM Group is exposed and the mitigations in platr to manage these rFsks are: Covid-19 pandemic impatt on operations and finan￿5. Decline in the strength of the IAM groups affiliate thiork and volunteers. Decline in the capacty of the contracted base of AdVan￿d Driving Instructors delivering IAM Group servi￿5 Systems, including DARTS implementation, and cybersecurity. Investment10sses. Decline in the number of IAM Roadsmart members. Line management capabilities and succession planning for key staff. Long term strategy. Covid-19pandemK impact on operat￿n5 andfinan As descrited elsewhere in this report, the Covid-19 pandemic and the attendant restrictions on activities imposed by government has had a signlficant impatt on the IAM Group. Although the current indications from the govemment are that r( will remove those restrictions, the future trajectory of the pandemic and therefore of the government's response remain Un￿rtaIn. 12 IN￿uTE OF ADVANCED MOTORISTS LIMrrED REPORT OF THE COUNCIL (continued) Moreover, despite the current success of the Covid-19 vaccination programme in the UK, a resurgen￿ of the pandemic could well affect the confidence of customers tr) particlpate in many of the IAM Group's activities, and of volunteers and trainers to deliver those attivities, as well as the willingness of staff to commute to, and work in, the IAM offi￿. The IAM Group will need to assess the timing of expenditu￿ on activities Such as marketing campaigns to mitgate the risk that the objectives of those campaigns is frustrated by the impact on 5tsff, volunteers, Customers, contractors and the publ￿ of a resurge￿ of the pandemic. Other impacts and potential impacts of a resurgence of the Covid-19 paNlemic include: increased Un￿rtaInty regarding the reliability of budgetary plans. increased relian￿ on ￿ solutions; changes in working prartices that may continue for the longer temi; staff and key ￿rsOn absences due to illness or isolation requirements; the diversion of management time to ensure Complian￿ with government guideline5, communication with Staff, volunteer5 and customers to ensure they are aware of the IAM Group's response, developing appropriate mitigations and plans to recommence training activities when appropriate; the ongoing economic impart on individuals and corporate customers leading to more limited budgets for driver and rlder training. the need to extend membership for Associates who have been unable to complete t￿1r Advan DriverlRider training and the related inability to sell further Advanc&1 DriverlRider programmes where on- road artivities cannot take pla￿. and the cost of providing approprlate safeguards and perwnal pmtective equipment in the Offi￿ and on-road, As described elsewhere in this reporl the IAM Group SUC￿SfullY impkniented strategies to mitigate the Impact of the pandemic on its financial position during 2020121 and is cautiously conf￿ent that it would be able to do so should this requlred in the future by apptying optlons which could include: delaylng the implementstion of recommendatlons from the strategic review; increasing the resilience of the telephone system to ensure calls can be dealt with more efficiently by staff ho are working from home; and identifying staff costs and overheads that can te r8Juced in the short terTn b)th during the Covld-19 restriction period and for the longer term. The Councll Con￿derS that the level of free reseNes is sufficiently large to cover the financial impact of a resurgen of the Covid-19 pandemic. Decline in the strength of the IAM Roadsmartgroup affil￿te network and volunteers IAM is de￿ndent on the efforts and goodwill of volunteers and IAM Roadsmart groups to deliver the Advanced Driver and Rider programmes and other servios. A decline in the strength of the IAM Roadsmart group affillate network andlor the numLEr of volunteer obseNers would impart IAM'S ability to deliver on-road training and to provide other support io IAM Roadsmart Members. The field servlce team is tasked, inter alia, with supporting IAM Roadsmart groups on a ￿gIOnal basis and assisting them to adopt best prarti Decline in capacty of the cont￿tted base ofAdvancedDriving Instruttors delivenng IAM Group selv1￿$ The IAM Group uses contracted Advanced Driving Instructors CADIS? to deliver certain on-road course modules, Driving for Work and other commercially orientated programmes within Drive & SuNive. The suspension of driver training for new drivers and driving tests during the Covid-19 pandemic has led to a surge in demand for ADI servi as the pandemic restrictions have been lifted. A reduction in the numter or availability of ADIS could frustrate the delivery of Servi￿ by the IAM Group wlth consequent impact on both revenue and reputation. In response to this risK the IAM Group Is developing a recruitment strategy for ADIS and seeking a closer relationship with those ADIS wh) choose to benefit from working with the IAM Group. 13 IN¥[tr￿E OF ADVANCED MOTORIsfs LIMrrED REPORT OF THE COUNCIL (continued) Irsystems Including DARTS inp/ementat￿, andcTr*ersecurity In common with other complex Th projects, the devebpment and implementation of further phases of DARTS has associated rlsks that it does not meet the required 5pecrfication, is delayed or the￿ a￿ cost overruns. The IAM Group seeks to mitigate those risks through negotiating fixed price contracts or tight budgetary control wlth the rr suppller, adopting rigorous testing and acceptance procedures and reviewing regular project plan progress reports wfth a steering group chal￿d by the Chief Executive Offi￿r, The risk of outages has been reduced and the resilien￿ of the general ￿ systems Infrastructure increased by the provisioning of IAM Group's seNer infrastructure using cloud-based solutions provided by ￿putsbIe third-party suppliers with agreed perfornwn￿ criteria. In addition, the recent migration of non-bespoke system eknronic fiEe storage to SharePoinVOneDrive increase5 the resilien￿ of those files. cybersecurity risks present an Increaslng threat to all organisatlons. The IAM Group's ￿ stsff keep up to date with current information security best practice. The IAM Group Snvests In up to date computer equipment and sothare, has a thorough softhare update reglme, robust backup procedures and is subject to quarterly firewall penetration testing, carried out by an independent cyber security consultancy. The IAM Group has installed the latest firewall systems and has anti-virus SO￿are installed on all devices, with spamlvirus filters actively managed and regular sOf￿are updates on all interfa￿5 with the outside world. Investment105ses A decline in the value of investh￿nts arising from a market fall or poor investment choices would impact the financial results and the resources available to invest in developing produrt and service offerings to meet the charltable objetts. The IAM Group seeks to mitigate the impact of this risk by maintaining investment portfolios with differing investment strategies and risks, and carrying sufficient reserves so that shorter term market declines are less likely to threaten sustainability or solvency. During 2020121, the Finance & Audit Committee undertook a comprehensive review of investment portfolio managers assesslng their perfomiance, portfolio construction and asset alIc￿atIOn, wrtfolio risk attitudes, seNice levels and costs. The perf0mlan￿ of the investment portfolios against benchmarks is reported quarterty and considered by the Finan￿ & Audit Committee. Decline in t/￿ numberofIAM RoadSnFart Membe The average age of IAM Roadsmart Members continues to increase and the number of potential new IAM Roadsmart Members undertaking the AdVan￿d DrNer/Rider programme has not met expectations In re￿nt years. IAM continue5 to develop and implement plans to improve its communication and provision of Servi￿5 to IAM Roadsmart Members to mitigate any potential for a decrease in its member reiention rate. To support thi5 the proactive follow up of re￿ntlY lapsed members has ￿en brought in-house and early analysls suggests this is havlng a sitive impact. In addition, continued campaigns to encourage IAM Roadsmart Members to pay their annual subscription5 by dir debit will redu￿ the risk oflosing members as well a5 reducing the c05t of chasing member5 for payment, while encouraging more members to sign up for Gift Aid will mitigate the financial impact of a reductlon In member numbers. ne mènagementL7pabi/iile5 andsuccesStvn*nning forkeystaff The IAM Group'5 abilty to deliver its charitable Obj￿ is hTrJhly deFerKlent on the capabilities of its staff, and the manner in whith those staff a￿ led. Poor management could give impact Staff morale and increase the attriknon of employees, while managers who do not fttl they have adequate tools to manage their reports could negatively impact the output from their teams. IAM Group has recently implemented the o￿nBlend system to assist in manajing and tracking the inter2Kbons be￿￿n lirE manag￿5 and their rep)rts. The o￿nBlend approach is more holistic than tradrtional employ￿ management 14 IN¥rrrLrrE OF ADVANCED MOTORIsfs LIN￿ED REPORT OF THE COUNCIL (continued) Systems as ￿ enabks employees to addre55 areas of concem and agree with their line manager what improvenEnts can made including identifyiThJ measurable Cr￿erk1 and the supw)rt required, In addition, training is being provision￿ for first time managers while coachitYJ and mentoring ￿ made avallabÈ as needed with the approval of the Head of Human Resources. DurirMJ 2020121, a wew was undertaken of succe55ion planning with an emphasis on identifying those ro￿5 where there is not a'natural, suc￿>￿ within the IAM Group or where recrU￿rnent of staff with the correct skills and experien￿ may tske considerdble time and plans to mitigate that risk induding addrtlonal trainiThJ are being developed. Long tenn stffttegy The lack of an up to date longer tem) strategy leajs to a number of risks induding: a lack of focus on activitles that a￿ likely to deliver fulfilment of the charltable object in the long temi; pursuing activities and tactics that are not congruent; not setting suitsble targets and objectives to encourage longer term thinking about how the IAM Group should react to a changing environment for riding and drivingi budgets and resource allocation ￿Ing detemined without longer term conslderatlons, leading to suboptimal allocation of resources; and a failure to engender a sense of common purpose amongst trustees, senior managers and stsff. The Council has commissioned an external expert strategic consultancy tr) work with trustees and senior managers to develop a strategy for approval by the Counul. This work commenced in May 2021 and Inlt(al recommendations will be considered by the Council in the second quarter of 2021122 with a view to distilling them into a coherent practical multi-year strategy for the tAM Group that can begin to be implemented during 2021122. Plans for future In some resFects, the Covld-19 pandemic has comblned with other factors to create a stom) that requires the IAM Group to evaluate how we can ensure that we stay true to our core values whilst addressing the various factors that will shape the future of driving and riding. To rn￿t the challenge of a rapidly changing mix of personal mobility solutions, a comprehensive strategic review of the business is LEing undertaken. The outcome of this ￿VIeW will provide the basis from which a multi-year strategic plan, underpinned by key milestones at spedflc Intervals will be develowl. The Strategic plan will, in the face of significant change, detsrmine how IAM will continue to meet Its charitable objective5. A5 a minimum we expect the outcome of the strategic review to clearly set out how, through the sale of products and seN1￿5 and supported by our research and lobbying activities, the IAM Group will embrace, respond to, and pxjsitively contribute to debates on the following issues related to riding and diiving: Global Warming Air Quality Legislation (e.g. Ultra-Low Emlsslon Zones, bans on sales of Internal combustion engines, road pricing) Vehicle technology Electric vehicles Customer facing technology (Webslte, Apps etc.) G￿en travel optlons (e.g. electric scooters) In the short term there are a number of posltive actions included in the business plan for 2021122 l) Embart( on phase 2 of the DARTS sothare upgrade which will deliver a significant number of enhan￿rneTrts for members and customers, the IAM Group and IAM Roadsmart groups. 2) Expand the CHOICES web portal with new and innovative online learning modules that wlll 5UPPOrt our Business Drivers, AsscKiates, Observers and Examiners. 15 INsrrrLrrE OF ADVANCED MOTORIsfs LIM￿ED REPORT OF THE COUNCIL (continued) 3) Roll out a series of webinars to provide Continued Professional Development opportunities for IAM ObSe￿er5 and topics of Inte￿$t to all IAM Roadsmart MemiErs, and consider the potential to extend these to the wider public. 4) Proactively engage wlth IAM Roadsmart groups to see how IAM can better support l¢xal advanced drlverlrlder recruitment activities andlor initiatives that deliver improved road safety. 5) Public relations actlvltles will irKreasingty focus on gathering and promoting local stories and blogs from IAM Roadsmart group members 6) Launth a new benefits portal for IAM Roadsmart Members and use dats analytics to measure Suc￿$ and identify opportunities for ongoing improvement through the additionldeletion of products/services. 7) Launch our largest ever'member by Exemption. recruitment campaign targeting those drwers and rider5 who already hold the equlvalent of the IAM'S Advanced DriverlRider standard. This will positively impact on IAM Roadsmart Member numbers, generate immediate income and avoid placing a strain on IAM Roadsmart groups who are managing a backlog of IAM Roadsmart Associates. 8) Embark on a complete rebuild of the current website to reflert the new strateglc plan and ensure that this becomes the central hub for all aspects of Interattion with the IAM Group. Related parties None of the trustees recelves remuneration or other benefit from their attivities as a trustee with IAM, Any connection between a trust￿ or senior manager of IAM and a contractual party must be disclosed to the Council. Durlng the year under review, no such ￿lated paty transactions were reported. statement of trustees, responsibilities The trustees (who are also directors of IAM for the purposes of company law) are responsible for preparing the Report of the Council and the financial statements in accordan￿ with applicable law and United Kingdom Accounting standards (United Kingdom Generally Accepted Accounting Practice). Company law requi￿ the trustees to p￿pare financial statements for each financial year which give a tnje and fair view of the state of affairs of the charitable company and the group and of the incoming resour￿5 and application of resources, including the income and eX￿ndItU￿, of the charitable group for that perirjd. In preparing these financial statements, the trustees are required to: select suitable accountlng policies and then apply them conslstenty, observe the methods and principles in the Charftles Statement of Recommended Practice {SORP)' make jltdgements and estimates that are reasonable and prudent; state whether applicable UK Accounting Standards have been followed, subjert to any material departures disclosed and explained in the financial statements; and prepare the finandal statements on the going con￿rn basis unless it is inappropriate to presume that the charli3ble company wlll continue in business, The trustees are responsible for keeping proFer accounting records that disdose with reasonable accuracy at any time the financial position of the charitable company and the group and enable them tr) ensure that the financial statements comply with the Companies Art 2006, the Charities and Trustee Investment (Scotland) Att 2005 and the Charitles Accounts (Scotland) Regulations 2006 (as amended). They are also responslble for safeguarding the assets of the charitable company and the group and hence for tsking reasonable steps for the prevention and detection of fraud and other Irregularities. The trustees are responsible for the maintenance and integrity of the corporate and financial infomiation included on the charitsble company's website. Legislation In the United Kingdom goveming the preparation and dissemination of financial ststements may differ from legislation in other jurisdittions. 16 INsrrrLtrE OF ADVANCED MOTORI￿5 LIMrrED REPORT OF THE COUNCIL (continued) statement as to disclosure of information to the audltor In so far as the trustees are aware: there is no relevant audit infomiation of which the charitable company and group's auditor is unaware; and the trustees have taken all steps that they ought to have tsken to make themselves aware of any relevant audit information and to establish that the a￿lItOr is aware of that Infomiation. Audltor Crowe U.K. LLP has indicated its willingness to conunue in offi￿. The Report of the Council (including the Strategic Rep)rt) was approved on of the Counal by Jeffrey Willcocks Trustee l Albany Pla Hyde Way Welwyn Garden Oty Hertfordshire AL7 3BT 17 INSr[rL￿E OF ADVANCED MOTORI￿s LIM￿ED INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS AND THE TRUSTEES OF THE INsfiTiJfE OF ADVANCED MOTORIsfs LIMITED Opinion We have audited the financial ststements of the Institute of Advanced Motorists ￿rnited Cthe charitable company,) and its subsidiaries {'the group,) for the year ended 31 March 2021 which comprise the Group Ststement of Financial Artivities, the Group and Charity Balance Sheets, the Group Cash Flow Statement and notes to the finanoal 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 Flnanoal Reporting Stsndard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting PraLtice). In our opinion the financlal statements: give a true and fair view of the state of the group's and the charitsble companWs affairs as at 31 March 2021 and of the group's Income and expendf(ure, for the year then ended,. have I￿en properly prepared in accordance with United Kingdom Generally A￿pted Accounting Prattl￿. and have tEen prepared in accordance with the requirements of the Companies Act 2006 and the Charities and Trustee Investment (Scotland) Act 2005 and Regula￿Tr5 6 and 8 of the Charities Accounts (Scotland) Regulations 2006 (amerKled). Basis for opinion We conducted our audit in accordance with International Stsndards on Auditing (UK) (ISAS (UKI) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial ststements section of our report. We a￿ independent of the charltsble company/group in accordan￿ wlth the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRCS Ethical Stsndard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtsined is sufficient and appropriate to provide a basis for our opinion. Condu$lons reiatlng to going concern In auditing the f5nancial statements, we have concluded that the trustee5' use of the going concern basis of accounting in the preparation of the financial 5tstements 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 perioj of at least t￿e1ve months from when the financial Statements are authorised for issue. Our responsibilities and the responslbilltfes of the trustees wlth respect to going concern are described in the relevant sections of this report. Other informatlon The trustees are responsible for the other infomiation contained within the annual report. The other infomiation comprises the inf0m￿tIOn included in the annual report, other than the financial statements and our auditorfs report thereon. Our opinion on the financial ststements does not cover the other infomation and, ex￿pt to the extent otherwise explicitly stated in our report, we do not express any fomi of assuran￿ conclusion thereon. Our ￿ponsIbIlity is to read the other information and, in dolng so, conskler whether the other informatlon Is materially inconsistent wlth the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such materlal inconsistencies or apparent material misstatements, we are required to detemiine whether this gives rise to a material misststement 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. 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 glven in the trustees, report, whlch Sncludes the directors, report and the strateglc rep)rt 18 IN￿r[r￿E OF ADVANCED MOTORI￿5 UMrrED INDEPENDENT AUDThOR'S REPORT TO THE MEMBERS AND THE TRUSTEES OF THE INSTThUTE OF ADVANCED MOTORISTS LIMITED (continued) 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 dirertors, included wlthln the trustees, report have been prepared In accordance with appllcable legal ￿qUIrernents. Matters on whlch we are required to rep￿t by exception In light of the knowledge and understsnding of the group and charitable company and their environment obtsined in the course of the audit, we have not identified material misstatements in the strategic re￿rt or the directors, rep)rt induded within the trustees, rew)rt. We have nothing to report in respect of the following matter5 in relation to which the Companies Att 2006 and the Charities Accounts (Scotland) Regulations 2006 requires us to report to you if, In our opinlon: adequate and proper accounting records have not been kept,. or the financial statements a￿ not In agreement wlth the accounting records and returns; or rta5n dlsclosures of trustees, remuneration specified by law are not made, or we have not r￿1Ved all the informatKsn and explanations we ￿qui￿ for our audlt. Responsibilities of trustees As explained more fully in the trustees, responsibilities statement set out on page 16, 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 financrdl ststements that are free from material mi5Statement, whether due to fraud or error. In preparing the financial statements, the trustees are ￿pOnSIble for assessing the charitable company's ability to continue as a goiro concern, disclosing, as applicable, matters related to going concern and using the going con￿rn basis of accounting unless the trustees either intend to liquKlate the charitsble company or to cease operations, or have no realistic alternative but to do so. Auditorfs responsibilities for the audit of the financial statements We have been appointed as auditor under section 4411)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and under the Companies Act 2006 and ￿port in accordan￿ with the Acts and ￿levant regulatlons made or having effect thereunder. Our objectives are to obtain reasonable assurance about whether the financial ststements 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 assuran￿, but is not a guarantee that an audit conducted in accordance with ISAS (UK) will alway5 detect a material misststement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably ￿ expected to Influence the economic decisKsns 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 regulatK)ns are set out below. A further description of our responsibilfcies 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 auditorfs report. Extent to which the audlt was consldered capable of deteLting irregularities, including fraud Irregularities, including fraud, are instances of non-complian￿ with laws and regulations. We IdentTfied and assessed the risks of material misststement of the financial ststements from irregularitie5, whether due to fraud or error, and discussed these between our audit team members. We then designed and performed audit procedures responsive to those rlsks, including obtaining audit eviden￿ sufficient and appropriate to provide a bas15 for our opinion. 19 ## **INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS AND THE TRUSTEES OF THE INSTITUTE OF ADVANCED MOTORISTS LIMITED** (continued) We obtained an understanding of the legal and regulatory frameworks within which the charitable company 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 and The Charities and Trustee Investment (Scotland) Act 2005, 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 charitable company’s and the group’s ability to operate or to avoid a material penalty. We also considered the opportunities and incentives that may exist within the charitable company and the group for fraud. The laws and regulations we considered in this context for the UK operations were General Data Protection Regulations, Health and Safety legislation and employment legislation. 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 of recognition of income and the override of controls by management. Our audit procedures to respond to these risks included enquiries of management and the Finance and 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 with the Charity Commission and reading minutes of meetings of those charged with governance. Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of 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, and to the charitable company’s trustees, as a body, in accordance with Regulation 10 of the Charities Accounts (Scotland) Regulations 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 and the charitable company’s trustees as a body, for our audit work, for this report, or for the opinions we have formed. Andrew Thomas Senior Statutory Auditor For and on behalf of Crowe U.K. LLP Statutory Auditor ## **London** Date 5 October 2021 20 INsrrrLrrE OF ADvAN￿D MOTOFusfs LIM￿ED GROUP sfATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 MARCH 2021 (INCORPORATING AN INCOME AND EXPENDITURE ACCOUNT) Note 2021 £000 2020 £000 Income from: Donat￿nS and legacies Subscriptions (including Gift Ald) Other income Chantable attiw.ties Test fees other trading attivities Training and related setvlces Investments Total Income 3,443 340 3,624 53 178 431 1,612 153 5,726 2,953 278 io 7,339 Expenditure on: Generating funds Fundralslng and publicity Training and related servi￿$ 603 1,629 2,232 860 2,664 3,524 Charitable actiwties Research and advocacy Membership setvices Tests 606 2,004 540 403 1,946 487 Quality assurance 673 3,712 3,435 Total expenditure 5,667 7,236 Net Income 59 103 {350) {247) Net gain51(losses) on listed investment portfolio Net expenditure for the year Other recognisedgains Exchange losses Net movement of funds in year Balances brought fomard at l April Balances Girried forward at 31 March 1,383 1,442 (i) 1,441 7,239 8,680 (i) (248) 7,487 7,239 The notes on pages 24 to 38 fomi part of these accounts. 21 IN￿￿E OF ADVANCED MOTORI￿5 LIM￿ED COMPANY NUMBER 562530 BALANCE SHEETS AS AT 31 MARCH 2021 Group 2021 £000 IAM 2021 £000 Note 2020 £000 2020 £000 Fixed assets Intangible assets Tangible assets Investments 373 90 7,901 8,364 359 116 6,425 6,900 373 90 8,031 8,494 359 116 6,555 7,030 Current assets Str£ks Debtors Cash at bank and in hand li 12 86 665 iii 741 793 1,239 462 1,008 678 646 1,397 1,645 1,701 1,686 Current liabilities Creditors: amounts due within one year 13 (1,081) {1,306) (2,838) (2,867) Net current a$$etsl(liabilities) 316 339 (1,137) (1,181) Total assets less current liabllltles 8,680 7,239 7,357 5,849 Net assets 8,680 7,239 7,357 5,849 Unrestrfcted funds General fund 14 8,680 8,680 7,239 7,239 7,357 7,357 5,849 5,849 IAM has taken advantage of the to p￿ent a Charity only income and expenditure account under section 408 of the Companies Act 2006. The net income of the charity in 2021 was £1,508,000 (2020.. net expenditure of £400,000). The financial statements on pages 21 to 38 were approved by the Councll on 25 September 2021 and authorised for issue and signed on its behalf by LilQ Jeffrey Wil1c￿kS Trustee The notes on pages 24 to 38 form part of these accounts. 22 INsrrrurE OF ADVANCED MOTORlSfs LIM￿ED GROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2021 2021 2020 £000 £000 £000 £000 Cash flows from operatlng activitie$: Net cash (used)Igenerated in operating activities 17 13 196 Cash flows from Investing activities: Payments to acqulre intangible fixed assets Payments to acquire tangible fixed assets Net drawdown from/(addlt(ons) to investments Movement in cash investrnents Listed investment income Bank interest received (165) (55) (135) 42 152 (234) (23) 525 (15) 276 io io Net cash (utilised}Iprovided by investing activities (160) 531 Change in cash and cash equivalents In the { 147) 727 Cash and cash equivalents at start of the year Cash and cash equivalents at end of the 793 66 646 793 The notes on pages 24 to 38 form part of these accounts. 23 INThTE OF ADVANCED MOToRI￿s LIMrrED NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2021 General information The Institute of Advan￿ Motorists knmited (IAM) is a compary limlted by guarantee incorporated in EnglaThJ and has no share capital. The liability of members in the event of winding-up is limited to 25p Fer member. The &fjdre￿ of IAM s registered Offi￿ and principal of business is l Albany Pl￿, Hyde Way, Welwyn Garden Cty AL7 3BT. IAM'S and the IAM Group's principal artivitie5 are detsiled in the Report of the Coundl. Accounting pollcies (a) Basis of accounting and golng concem The financÉal 5tstements have b￿n prepared in accordan￿ wlth Accounting and ReEM)rting by Charftles: Ststement of Recommended prattl￿ applicable to charities preparing their accounts in accordan￿ with the Financial Reporting standard applicable in the UK and Republic of Ireland (FRS 102) - (CharitEs SORP IFRS 102)), the Financial Reporting Standard applicable in the UK and Republic of I￿land (FRS 102) and the Companles Art 2006. A separate statement of financial activittes for IAM is not presented as peThitted by the SORP. Monetsry amounts in these financial statwnents are rounded to the nearest £1,000 ex￿pt where otherwise indicated. IAM meets the definition of a public benefft entity under FR5102. Assets and liabilitEs are initially recDJniso at historical cost or transathon value unless otherwise stated in the relevant accountlng p)licy notes. The trustees assess whether use of the going concern basls of accounting is appropriate i.e. whether there are materlal uncertainties related to events or conditions that may cast doubt on the ability of the charitab company and the group to continue as a going concern. The trustees review forecasts and projections coverirYJ a ￿rIOd of at least one year from the date of approval of the financial statements in making that assessment, The trustees do not consider the￿ are any such material un￿rtaIntieS but have given pa￿CU￿r consideration to the un￿rtaIntieS Con￿rning the future trajectory and impact of the Covid-19 pandem￿ as describ8J ￿low. The trustees have considered the impact of the Covid-19 pandemic on the charitable company and the group. That consideration including ass￿51ng the likely potential105s of income arislng from sales of Advan Courses induding Test fees and from other activitie5 requiring on-road or In