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2021-12-31-accounts

Engineering Council

Registered Charity No 286142

Annual Report and Financial Accounts 2021

Annual Report and Financial Accounts 2021

Contents

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Foreword .......................................................................................................................................................3
.............................................................................................................4
1. Registration statistics as of 31 December 2021................................................................................5
2. Strategy and performance in 2021....................................................................................................7
3. 2021 Activities and Achievements ....................................................................................................8
4. Impact of Covid-19 ............................................................................................................................9
5. Risk and compliance ...................................................................................................................... 11
6. Financial review.............................................................................................................................. 14
7. Public benefit report ....................................................................................................................... 16
8. How we operate ............................................................................................................................. 20
9. Statement of Trustees' responsibilities .......................................................................................... 24
10. .................................... 25
11. Statement of financial activities for year ended 31 December 2021 ..28
12. Balance Sheet as at 31 December 2021.........................................................................................29
13. Statement of cash flows for year ended 31 December 2021 ... ............ ..30
14. Notes to the financial statements for the year ended 31 December 2021...................................... 31
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Annual Report and Financial Accounts 2021

Foreword

Operating under a Royal Charter, the Engineering Council is charged with regulating the UK engineering profession on behalf of society. We hold the national Register of those who have satisfied their peers of their competence and commitment as Engineering Technicians, Incorporated Engineers, Chartered Engineers and ICT Technicians. We set the education standards for engineering programmes that provide the underpinning knowledge and understanding required to practise engineering, as well as setting standards for professional development. We can only achieve this through the commitment of the entire professional engineering community, supported by academics and employers.

Professional registration provides the benchmark which allows the public to have confidence and trust that the engineers and technicians on our Register have met globally recognised professional standards.

Nearly a quarter of a million men and women are currently listed on our Register. The UK has an ageing population, and with the number of registrants aged over 60 representing over a third of those on the Register, we must continue to work hard to maintain a talent pipeline to meet future skills requirements. We therefore welcome the joint initiatives that are underway to ensure that more people enter professional engineering careers and that those who are already professionally registered remain so throughout their working life. This is a strategic imperative for the nation if we are to meet the engineering and technological needs of the future.

Vision:

That society continues to have confidence and trust in the engineering profession.

Mission:

To maintain internationally recognised standards of competence and commitment for the engineering profession and to license competent institutions to champion the standards for the deliverance of public benefit.

What we do, how we do it and why:

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Develop and maintain common professional standards for engineering
competence and commitment
License professional engineering institutions to professionally develop and
assess engineers and technicians against the common standards
What we
Maintain the national Register of professionally registered engineers and
do technicians
To safeguard the public
Why we do
it
Self-regulation by peer review
How we do
it
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Annual Report and Financial Accounts 2021

th year of setting and maintaining standards: incorporated by Royal Charter in November 1981 to regulate the engineering profession in the UK, our vision is to ensure that society continues to have confidence and trust in the engineering profession.

We published our 2025 Strategy Advancing Regulation greater, more divers themes, which inform and structure our subsequent strategic outcomes: Diversity & Inclusion (D&I), Digital Innovation, International, Engineering & Society.

There are currently over quarter of a million professionally registered engineers and technicians on the knowledge throughout their careers. The 2021 Ipsos MORI Veracity Index shows that engineers are trusted by 84% of respondents, but engineers must continually evaluate how ethical behaviours need to improve and evolve. Far from being complacent, our on-going work on ethics looks to further embed ethical culture and practice into the profession, including operating sustainably, inclusively and with respect for diverse views.

During 2021, we continued to support the new Building Safety regime through the development of a competence framework for engineering professionals working on higher-risk buildings, which will lead towards a Contextualised Register for competent professionals in this area. To support this work and our public benefit requirement, we also launched RegCheck, an online tool that can be used to verify an December 2021, with support and guidance available for prospective registrants and the professional engineering institutions (PEIs) we license. The revised ICT Tech Standard has also been published during 2021, promoting this key technician title.

2021 continued to hold a degree of pandemic-related uncertainty, but the Engineering Council has operated flexible working arrangements in response and continued to operate our core functions effectively. Our governance arrangements have continued to work effectively and business processes remained operational, supported by our continued certification to the ISO 9001: 2015 quality standard.

Delivering the objectives set out in the 2025 Strategy, in our 40[th] year as a regulator the Engineering Council is focussed on the future of the profession. We set and maintain internationally recognised standards of engineering competence and commitment, license PEIs to assess their members against those standards and hold the Register of the individual engineers and technicians assessed as meeting rust and further embedding a culture of ethical, sustainable behaviour among the engineering community.

Professor Chris Atkin CEng FRAes and Alasdair Coates BEng (Hons) MSc CEng FICE MCIHT CMIOSH

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Annual Report and Financial Accounts 2021

1. Registration statistics as of 31 December 2021

FIGURE 1: NEW TITLES ADDED TO THE REGISTER IN 2021 COMPARED TO 2020

EngTech
IEng
CEng
ICTTech		 Interim Final Total
2020
2021
Change
6
-40.00%
74
78
5.41%
286
264
-7.69%
-
-
-
10		 2020
2021
Change
2,687
2,947
9.68%
1,201
1,246
3.75%
5,847
6,592
12.74%
529
209
-60.49%		 2020
2021
Change
2,697
2,953
9.49%
1,275
1,324
3.84%
6,133
6,856
11.79%
529
209
-60.49%
Total 370
348
-5.95%		 10,264
10,994
7.11%		 10,634
11,342
6.66%

FIGURE 2: TOTAL NUMBER OF REGISTRANTS ON THE REGISTER IN 2021 COMPARED TO 2020

FIGU RE2: TOTAL NUMBER OFR EGISTRANTS ON THEREGISTE R IN2021 COMPARED TO202
EngTech
IEng
CEng
ICTTech		 Interim Final Total
2020
2021
Change
134
126
-5.97%
1,217
1,172
-3.70%
5,578
5,334
-4.37%
-
0.00%		 2020
2021
Change		 2020
2021
Change
22,637
23,252
2.72%		 22,771
23,378
2.67%
25,486
24,708
-3.05%
173,358
172,896
-0.27%
898
819
-8.80%		 26,703
25,880
-3.08%
178,936
178,230
-0.39%
898
819
-8.80%
Total 6,929
6,632
-4.29%		 222,379
221,675
-0.32%		 229,308
228,307
-0.44%

FIGURE 3: LOSS OF TITLES ON THE REGISTER IN 2021 COMPARED TO 2020

EngTech
IEng
CEng
ICTTech		 Interim Final Total
2020
2021
Change
-6
-14 -133.00%
-130
-131
-0.76%
-531
-539
-1.51%
-
-		 2020
2021
Change
-3,004
-2,566
14.58%
-2,251
-2,165
3.82%
-8,643
-7,977
7.71%
-149
-304
-50.99%		 2020
2021
Change

-3,010
-2,580
14.29%

-2,381
-2,296
3.57%

-9,174
-8,516
7.17%
-149
-304 -104.03%
Total -667
-684
-2.55%		 -14,047
-13,012
**7.37% **
-14,714
-13,696
**6.92% **

An individual registrant can hold more than one designation or title (for example, such as Chartered Engineer (CEng) and Incorporated Engineer (IEng), or holding CEng with more than one institution), consequently there are more titles recorded on the Register than there are individual registrants.

Reinstatements in 2021

In 2021, there were 1,011 reinstatements to the Register. Reinstatements are registrations that have previously been suspended but have returned to the Register within the last three years.

New final titles by gender

For new final stage titles added to the Register over the last three years, the percentage of new final stage titles held by women has increased in 2021 compared to both 2020 and 2019. The percentage of these titles held by women increased in consecutive years, despite a decrease in the number of new final stage titles held by women in 2020 compared to 2019 (1,164 compared to 1,390). This indicates a more positive trend in new final stage titles by gender than we see when looking at the Register as a whole.

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Annual Report and Financial Accounts 2021

FIGURE 4: NEW FINAL STAGE TITLES BY YEAR, BY REGISTRATION TITLE, BY GENDER, 2019-2021

International registrations

FIGURE 5: INTERNATIONAL FINAL STAGE TITLES

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2021 2020
EngTech 1,355 1,357
IEng 2,635 2,832
CEng 41,897 41,563
ICT Tech 18 20
Total 45,905 45,772
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Annual Report and Financial Accounts 2021

  1. Strategy and performance in 2021

within the engineering community and a greater, more diverse and engaged registrant population.

FIGURE 6: ENGINEERING COUNCIL'S 2025 STRATEGY

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Annual Report and Financial Accounts 2021

3. 2021 Activities and Achievements

Existing Strategic Objectives from the Strategic Plan 2018-2020 continued to run through the first half of the year and key workstreams such as those promoting our Standards, facilitating mobility and maintaining pathways into the profession have transitioned into the 2025 Strategy.

Diversity & Inclusion

We have established a new Diversity & Inclusion Working Group (DIWG) to identify, consider and develop proposals to address any issues creating barriers to the profession and professional recognition.

Work on a Volunteer Support Programme to provide support, guidance and training for all EngC volunteers has progressed, including development of a volunteer handbook and induction form.

Improving and promoting key technician products across the professions, we have published the revised ICT Tech Standard (for implementation by 31 March 2022) and produced guidance to support the Approval and Accreditation of Qualifications and Apprenticeships (AAQA).

Digital Innovation

Promoting awareness of the Register and the value of professional registration, we have put in place an

We continue to embrace business improvement techniques, including contributing to development and testing of a system for online applications for European Engineer (EUR ING) registration and submitting UK data for accredited engineering programmes to the European Engineering Education Database (EEED, previously the FEANI INDEX).

Supporting the development of professional development tools, we have worked closely with stakeholders to identify priority areas for the enhancement of our mycareerpath application.

International

We continue to collaborate with a range of international partner organisations, including members of the International Engineering Alliance (IEA), European Federation of National Engineering Associations (FEANI) and European Network for the Accreditation of Engineering Education (ENAEE), to facilitate the mobility of engineers and promote our internationally respected Standards based on competence.

Good progress has been made with the ENGINET group of European regulators on establishing common processes and standards for competence-based registration, enabling more open access to the profession.

We are engaging with government on a range of key regulatory issues, including active involvement in meetings of the Department of International Trade (DIT) Trade Technical Group and providing input on the mutual recognition of qualifications, Free Trade Agreements and Regional Partnerships, to the Department for Business, Energy and Industrial Strategy (BEIS) and DIT respectively.

Engineering & Society

and technicians, as well as adding key cyber-

As part of the Cyber Security Alliance, we have provided key regulatory support and advice - including on professional ethics and Standards - for the formation of the UK Cyber Security Council.

The joint Engineering Ethics Reference Group (EERG) established with the Royal Academy of Engineering has developed a pan-profession action plan to further embed an ethical culture across the engineering profession, for publication in early 2022.

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Annual Report and Financial Accounts 2021

4. Impact of Covid-19

Introduction

Following the outbreak of Covid-19 and the subsequent nationwide lockdown which started in March 2020 Engineering Council staff made a successful transition to working from home, and continued to do so, in the main, throughout 2020 and 2021. Although some staff were able to return to the office for short periods, subsequent lockdowns meant that and has continued to be the case in 2021. Throughout the whole period Engineering Council staff have continued to work closely with the PEIs and other bodies, particularly with respect to licensing, registration, and accreditation activities. All board, committee, panel and working group meetings have continued on-line.

An assessment of the impact of Covid-19 and the ensuing lockdown on the organisation and its operations was undertaken in June 2020 and resulted in a change of assessment of the relevant risk item on the Trustees Risk Register.

The impact assessment was reviewed and updated in February 2021 taking in to account the impact of the continue to deliver its strategic and business plans throughout 2021 with home working remaining in place during the year.

The impact assessment was reported in the 2020 Annual Report with the main points set out again below with any updates from 2021 activity.

Risks Financial risk Income the organisation does not believe that Covid-19 has had or will have an impact on its income. Its main income stream is the annual grant from EngineeringUK. This grant is agreed by the Board of EngineeringUK, (which includes the CEOs of the three largest engineering institutions), in July of the preceding year. The agreement to pay the Engineering Council an operational grant to run the such as maintaining the Register of professionally qualified engineers and technicians In terms of the sustainability of this revenue stream, evidence shows that registration is valued by individuals, particularly in times of economic uncertainty, when new professional registrations tend to increase rather than decrease, highlighting the a current or prospective employer. Engineering Council is not reliant on income from sources such as donations, grants, fund raising or commercial arrangements (such as events or publications). Impact minimal

Financial Risk International Fee Income As staff are not set up to print, receive post or send post out from home, during periods of national lockdown, there were minor delays initially in the receipt of some international fee income.

2021 Update : the organisation returned to partial office-based working in 2021 to address this issue with the 2021 renewal rate of FEANI registrations remaining at 72%, as in 2020. Impact minimal

Financial Risk Costs Engineering Council is not incurring additional costs due to Covid-19, to the contrary during 2021 the organisation continued to see a decrease in some costs particularly those associated with hosting/attendance at physical meetings (catering, travel, and subsistence costs). Additionally, as a precaution during 2021 the Management Panel reviewed its current projects and placed on hold those it felt were not currently operationally or strategically critical.

2021 Update This situation was kept under review throughout the year and in early 2022 it was decided that number of strategic projects could be initiated/revived. Impact - minimal

Financial Risk Reserves the organisation held free reserves of £3m at the end of 2021, in the form of cash in the bank and an investment fund with Cazenove (previously held with Barings Asset Management. Whilst the organisation does not draw an income from its investment fund and reinvests any gains back into the fund, it has the reassurance that there will be funds available should it need to draw on them.

The fund was fully redeemed from Barings at the end of August 2021, at which point it showed an increase in overall value of £78k. In early 2022 it was reinvested in Cazenove and whilst there is a risk that there may be fluctuations in the stock market which will affect the fund value during 2022, the organisation will be closely monitoring the situation and will keep its planned expenditure from reserves under constant review, in particular, in view of the medium-high risk of the fund. Consideration will also be made to the ance. Impact - minimal

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Financial Risk Pension Scheme at its last triennial valuation, the Scheme was in surplus on a technical investment strategy aimed at volatility. Whilst the Engineering Council has agreed to pay a contribution towards the S costs of £108k in 2021, the organisation has no obligation to make any additional contributions to the Scheme until after the results of the next triennial valuation, due at 31 December 2021 and to be finalised by 31[st] March 2022, are known. As a result, we do not anticipate any impact to the organisation from Covid19 in relation to the Scheme in 2021. Impact - minimal

Operational Risk Business Plan all staff are continuing to work predominately from home and have done so successfully since 17 March 2020. The organisation has continued to work effectively and has delivered on its strategic and business plan objectives as expected. Despite the continue lockdown we do not expect any substantive changes to the work we plan to carry out in 2022. Board, panel, and committee meetings have all been held as scheduled, using Zoom but in 2022 we will continue to introduce the option of hybrid meeting where attendees have the choice of attending in person or virtually. There continues to be little negative impact of remote working on delivery of the new 2025 Strategy and the supporting business plan (the new Strategy was developed during lockdown in 2020 and was launched in 2021) and we have continued to deliver core business process with minimum interruption. Staff and supplier payments are made promptly, and new registrations and data reconciliations continue to be processed, including a full year end reconciliation at the end of 2021. Whilst some paper-based processes stop during periods of lock down they resume once there is a return to the office-based working. Impact - minimal

Operational Risk Staff wellbeing ensuring staff have been able to cope as well as possible has been a key priority, particularly given the prolonged time spent in lockdown. Regular individual, team, departmental and full office meetings have been held to ensure staff are able to keep in contact not just on projects and the day-to-day matters but on the wider business operations. The organisation has an Employee Assistance Programme in place, to offer support and advice to staff.

A constant review of working arrangements continues and the return to office-based work will be carefully planned to take account of Government advice and staff safety and well-being. Impact - minimal

The organisation has not felt it necessary to take advantage of the Government support offered to businesses as a result of the pandemic. All staff have been fully deployed throughout the lockdowns and have access to the equipment and systems required to carry out their roles. The organisation believes that the robustness of its business planning and financial management has allowed activities to continue uninterrupted and extreme measures have not been required. Our IT systems have been sufficiently robust and well developed to allow all staff to work effectively from home with minimum disruption to business activities. Additionally, during the first lockdown, the organisation was able to complete a planned office move/office refurbishment to deadline and budget, further demonstrating the strength of its operations planning. The Management Panel continues to monitor both the finances and business processes monthly basis and reports regularly on them to the Trustees.

We believe that the organisation is well placed to continue to successfully deliver all business activities despite the restrictions imposed on it by lockdown and organisation wide home-based working.

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5. Risk and compliance

How the Engineering Council manages risk

internal management including how the organisation views, identifies, assesses, and manages risk. It also describes the process the Board uses to manage the Engineering Council's risk management process and evaluate the effectiveness of the internal control procedures.

Engineering Council maintains a Trustee Risk Register which identifies risks that could have an impact on its strategic objectives, including all legal and financial mandates, assess the probability and impact of those risks occurring and details the measures in place to manage and mitigate them.

Role of the Executive Team and Management Panel

Day to day management of individual risks is the responsibility of the appropriate Executive Team member or volunteer(s) where decisions are delegated to them as recorded in the Risk Register. The Risk Register is regularly reviewed by the Executive Team and relevant volunteers and on a by-exception basis. The Management Panel reviews the Risk Register at each meeting and reports any concerns about risk and their management to the Board. The Risk Register is reviewed once a year by the Board. Should any other risk emerge during the year that is assessed to fall into one of the categories described above or which may result in the levels of tolerable risk set out in the EngC's risk appetite statement being exceeded then this should be referred to the Board for review and not wait for the annual review.

As part of the business planning process, the Executive Team scans the horizon to identify changes in the SWO identification process.

As part of the Business Planning process, all key tasks will record risks, opportunities and issues that may affect the achievement of expected outputs in either Functional Risk Registers or the Projects Risk & Opportunities Register and Issues Register .

Based on the horizon scan and organisational SWOT analysis, the emergent opportunities are identified and captured in the Risk and Opportunities Register. The Executive Team reviews the Opportunity Register in the autumn of each year and prepares and prioritises projects that may exploit the opportunities, subject to resources being available. This will also inform any options analysis, which then drives the budgeting forecast the following year.

This process involves assessing the most significant individual risks on the basis of the likelihood of it occurring, and what the impact to the organisation would be should the risk occur and considering ways of avoiding the risk(s) or mitigating its effect. Each area of risk has been assessed by providing a score to both the impact and the probability of each risk and using these to calculate the overall severity, and therefore, Gross Risk. With the identification and definition of suitable controls and monitoring actions, a judgement is then made as to what extent the impact of the Gross Risk is reduced, thereby reflecting what the Net Risk is.

Role of the Board

The Trustees assessed the major risks to which the Engineering Council was exposed in accordance with Charity Commission guidance and were satisfied that systems were in place to mitigate the Engineering Council's exposure to major risks.

The organisatio (January 2021) contains the following key principles that outline the Engineering Council's approach to risk management:

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Annual Report and Financial Accounts 2021

b. The Board is responsible for maintaining a sound system of internal control that supports the achievement of policies, aims and objectives while safeguarding the public and other funds and assets for which it is responsible in accordance with its Charter and By-laws;

Risk Appetite i.e., the level of risk that EngC is business planning processes and is reviewed annually by the Board. It sets the context for managing risk and forms an integral part of this policy. The Risk Appetite Statement will also form the basis of delegated levels of authority for decisions including at subordinate panels and committees.

I reputational, compliance and financial risk, whilst accepting that a certain level of risk must be taken to achieve its strategic objectives. Acceptance of risk is subject to ensuring that risks and potential benefits are fully considered and understood before activities are undertaken and that sensible measures are in place to mitigate risk.

As of 31 December 2021, there were five MEDIUM Net Risks on the Trustees Risk Register as follows:

1. Risk that registered engineers would no longer be subject to directives on mobility: other forms of recognition and ways to enable mobility would become more important.

MITIGATION

2. Risk that EngC does not comply with the requirements of the new General Data Protection Regulation (GDPR).

MITIGATION:

3. Risk that reviews of the profession or competing regulatory drivers will result in the body.

MITIGATION:

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Annual Report and Financial Accounts 2021

4. With the outbreak of COVID-19, the risk of not maintaining the various strands of the licensing function (licence reviews, Liaison Officer monitoring, volunteer seminars, workshops etc) to the current standard.

MITIGATION:

5. Risk of attack by virus or hacker, or systems failure, or staff/volunteer unintentional breach resulting in corruption or deletion of electronic data.

MITIGATION:

Internal and external auditing

The Quality Management System (QMS) is now embedded within the Engineering Framework and a robust internal audit schedule is in place. This plan is created and revised by the internal Quality Management Team (QMT), which also manages the internal audit team. In addition, QMT monitors the internal audit process, reviews internal audit reports and follows up on both ISO9001 and internal audit non-conformances and root cause analysis. All findings are recorded in the Internal Audit Log as requested by the Executive Team. The Engineering Council was successfully certified against the ISO 9001:2015 quality management standard in June 2018 with a successful Focus Visit in January 2021.

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Annual Report and Financial Accounts 2021

6. Financial review

The areas of activity funded during 2021 are set out in section 3 - 2021 Activities and Achievements . A detailed breakdown of expenditure for the year appears in notes 7-13 to the Financial Statements. FARP remains cost-effective.

The inclusion of the Engineering Council Pension Scheme under FRS102 has reduced staff costs by £108,000 (2020 - £105,000), increased direct costs by £124,000 (2020 - £167,000) and resulted in an actuarial gain on the scheme of £540,000 (2020 loss of £1,107,000). The overall effect of applying FRS102 is thus to decrease income for the year by £15,000 (2020 decrease of £62,000) and to increase the net movement in funds by £525,000 (2020 decrease of £1,169,000).

Engineering Council Pension Scheme

The Trustees of the Engineering Council Pension Scheme met three times during 2021. The Engineering Council, as the Principal Employer, made contribution towards scheme running costs of £108,000, as opposed to £105,000 made in 2020. This change resulted from the triennial valuation, at 31 December 2018, showed a past service surplus of £327K compared to the deficit disclosed by the 2015 valuation of £1.2M. The principal factors affecting the change in the deficit were the deficit reduction contributions made by the Employer and the value placed on the liabilities, which was lower than in the previous year due mainly to the increase in the corporate bond yield.

The Trustees and the Employer have agreed that an annual contribution towards the Scheme running costs will be made until the next triennial valuation which is due at 31 December 2021.

Reserves

In 2021 the Engineering Council held funds of £3,030,886 (£2,777,200 2020) as follows:

£2,839,683 (2020 - £2,530,155); a figure not materially different from ten months' expenditure.

At its October 2021 meeting FARP agreed the principle of utilising reserves operating costs to fund , but only on condition that a minimum of operating costs be retained at all times. Restricted funds The pension reserve was £nil at the year end with the pension grant received in year again being equivalent to the current year recovery plan contributions of £108k (£105k 2020).

The general fund, as shown in the financial statements, includes an unrecognised surplus of £2.031M (2020 surplus - £1.506M), due to an excess of assets over liabilities in the scheme this year. The figure as calculated under FRS102 is in respect of the defined benefit scheme.

The Trustees believe that this notional funding calculation, which can vary considerably according to the assumptions made at each year-end, has no material effect on the income.

The majority of the reserves are held in investments, with the remainder held in cash.

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Annual Report and Financial Accounts 2021

Investment Policy and Returns

he Barings Targeted Return Fund which invested across asset classes and through both direct holdings as well as in-house and thirdparty funds. Following receipt of the notification form Barings Asset Management of their intention to close the Targeted Return Fund with effect from 31 August 2021, it was necessary for the organisation to identify new investment fund managers. Following a full tender process, the Trustees appointed Cazenove Capital to replace Barings Asset Management.

FARP reviews the fund performance at each of its meetings and the fund manager attends FARP once a year to discuss fund performance. Cazenove fund managers attended FARP in October 2021 to outline their approach to investments, the investment mandate is summarised below.

The investment objective is to maintain the real capital value ahead of inflation, over the long term. The Trustees can tolerate variation in the capital value of the portfolio in the short-term and are prepared to adopt a total return (income and capital growth) approach to meet their expenditure requirements. The portfolio will be invested in the Responsible Multi-Asset Fund which has a target of inflation (CPI) plus 4% per annum, net of fees, over rolling ten-year periods. The Fund targets a stable and sustainable total return distribution of 4% per annum.

The Fund incorporates a responsible investment policy, with screening aligned with common charity concerns and environmental, social and governance analysis, engagement and voting embedded in the equity investment process.

The Trustees confirmed they were happy with the appointment of Cazenove as fund managers and suggested they provide an update on fund performance in the May 2022 FARP. The Trustees confirmed that the investments held were acquired in accordance with the powers available to the Trustees.

Expenditure on charitable activities

The following graph sets out the amounts spent on key areas of activity in 2021 and 2020.

FIGURE 7: 2021 & 2020 EXPENDITURE

----- Start of picture text -----
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
-
2021 2020
----- End of picture text -----

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Annual Report and Financial Accounts 2021

7. Public benefit report

nsure that the professional engineering community continues to provide public benefit through appropriate structures and professional behaviours.

This section provides a review of the significant or main activities undertaken by the Engineering Council to further its charitable purposes for the public benefit.

ublic Benefit

contribute to delivering the strategy OR vision and mission.

What is the Engineering Council there to achieve?

The purposes of the Engineering Council are set out as follows:

Objective

To advance education in, and promote the science and practice of, engineering (including relevant technology) for the public benefit and thereby to promote industry and commerce in Our United Kingdom and elsewhere.

Mission:

To maintain internationally recognised standards of competence and commitment for the engineering profession and to licence competent institutions to champion the standards, for the deliverance of public benefit.

Vision:

That society continues to have confidence and trust in the engineering profession.

What has the Engineering Council done during 2021 to carry out those purposes for the public benefit?

Against the principles of public benefit

Against each of the principles of public benefit and their key factors, as set out in the Charity Commission guidance, the Engineering Council is able to assess whether each factor has been met.

Table 1

----- Start of picture text -----
Serial Principle or factor Assessment
1 There must be an identifiable benefit Engineering underpins provision and/or distribution of the
or benefits basic necessities of civilised life: buildings, energy, water and
sanitation, food, transport, healthcare, communications,
defence. The major public benefit is the professional
regulation that the Engineering Council and its Licensed
Member institutions exercise over their registrants and
members when serving the general public.
1a It must be clear what the benefits are See specific public benefits in Table 2, serials 1-11.
1b The benefits must be related to the aims The object is pursued in conjunction with the Engineering
(i.e., objects)
functions of registration and accreditation to consistent
standards. The end result is that public benefits (1 above)
are generated by qualified registrants and institution
members working in private and public sector industries and
services.
1c Benefits must be balanced against any While some engineering products or activities are potentially
detriment or harm harmful, the professional code of conduct and professional
education and training all emphasise safety, sustainability
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Annual Report and Financial Accounts 2021

----- Start of picture text -----
and concern for the environment. Benefits vastly outweigh
detriment. Downside would be greater without professional
ethical commitment. See Table 2, serial 2.
2 Benefit must be to the public, or to a Benefits of sound engineering are to the public generally,
section of the public and, in varying degrees, to all mankind.
2a The beneficiaries must be appropriate to Confirmed.
the aims
2b Where benefit is to a section of the Individual registrants, totalling more than 230,000, receive
public, the opportunity to benefit must particular benefits in addition to the general public benefits at
not be unreasonably restricted by: 2 above. Discussed at 2d below.
Geographical or other restrictions Registration is conditional on meeting academic and other
standards of competence an integral part of achieving the
overall public benefit. Moreover, registration is voluntary, not
Annual registration fees range from £19 for Engineering
Ability to pay any fees charged
Technician to £39 for Chartered Engineer, reducible to £8.40
and £17.60 respectively for individual cases of hardship. See
also Table 2, serial 11.
In conclusion, members of the public wishing to become
registrants are not unreasonably restricted on either count.
2c People in poverty must not be excluded Covered in 2 and 2b above.
from the opportunity to benefit
2d Any private benefits must be incidental The private benefits of registration directly contribute towards
achieving the Engineering Council's aims and are a
analysis underpinning its guidance quotes at para 3.84 a
case IRC v Forrest relating to membership of one of the
applies equally to registration.
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As per specific activities and benefits:

Table 2

able 2
Serial Engineering Council activity Institution activity Effect Public benefit
1 Set and maintain standards of
professional competence in four
categories: Engineering
Technician, Incorporated
Engineer, Chartered Engineer,
ICT Technician		 Contribute to
defining standards,
in conjunction with
industry and
academia; promote
standards		 Coherent, relevant
national standards,
adopted by Quality
Assurance Agency
(QAA)		 Defined learning
progression for existing and
prospective engineers,
technicians and
craftspersons; benefit to
industry and commerce and
thus to national economy
2 Define generic standards of
professional conduct and ethics		 Tailor standards to
own field; require all
members to
observe standards
in institution code of
conduct. May
provide advice
facility to members		 Members observe
standards		 Positive contribution to
safety, sustainability, the
environment, industrial
effectiveness and public
confidence
3 Require institutions to have
complaints and disciplinary
procedures; appellate body in
defined circumstances		 Produce and
operate complaints
and disciplinary		 Reported breaches of
standards by members
dealt with fairly and
transparently		 Public confidence in
profession; a degree of
redress for complainants

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Annual Report and Financial Accounts 2021

procedures in
support of (2)
4 License institutions to register
qualified individuals through
defined procedures		 Promote registration
and institution
membership;
assess and register
qualified individuals		 Evidence of the
professional
competence and
commitment of
individual engineers
and technicians		 Assists employers and
clients in recruiting or
engaging individuals; public
confidence
5 License institutions to accredit
academic courses and approve
professional development courses
for engineers		 Accredit and
approve courses
(often jointly)		 Identifies courses
leading to exemplifying
qualifications for
individual registration		 Raises and maintains the
quality of engineering
education; helps to inform
curriculum design and
promote innovative
methods of teaching;
assists students in
selecting courses and
career options; encourages
education in economically
important fields; attracts
foreign students to UK
universities, enhancing the
financial position; supports
industry in developing high
quality programmes that
support professional
registration
6 License institutions to approve
vocational qualifications and
programmes for technicians; host
a technician working group to
develop initiatives and share good
practice		 Approve Vocational
Qualifications (VQs)
and apprenticeship
programmes		 Links existing VQs and
apprenticeship
programmes to
Engineering Technician
standard		 Informs awarding
organisations and
apprenticeship developers
of suitability of VQs and
apprenticeship
programmes for
registration; allows
individuals with approved
VQs and apprenticeships to
register as Engineering
Technicians via a
streamlined route
7 State requirement for individual
CPD (part of (2))		 Facilitate and
CPD		 Members maintain
competence		 Contributes to (2), (4) and
(5)
8 Conduct periodic review of
licensed institutions		 Operate internal
quality assurance
procedures		 Licence requirements
and standards
maintained and applied
consistently		 Underpins (2-6)
9 Represent UK in negotiating
international agreements for
mutual recognition of
qualifications; advise government
departments		 Advise and support
members; admit
and register
qualified individuals
educated overseas;
form alliances with
overseas
institutions		 Increased employment
and working mobility of
engineers and
technicians		 UK firms can compete and
operate more effectively
overseas, to the benefit of
UK economy; overseas
recognition of and demand
for UK professional
recognition enhances
reputation of UK; increased
recognition of UK
engineering qualifications
provides greater
encouragement for
individuals to seek the
knowledge and
competence to achieve
them

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Annual Report and Financial Accounts 2021

10 Train institution volunteers in
registration and accreditation
procedures (e.g., interviewing,
mentoring, assessment)		 Identify volunteers
from among
members; cascade
training to further
volunteers		 Contributes to (4, 5, 8) Contributes to (4, 5, 8)
11 Charge individual registration fees Charge individual
membership fees		 Financial viability of
bodies		 All bodies charge reduced
fees for some of student
members, young members,
technician members, non-
corporate (unqualified)
members, members
temporarily not working,
retired members

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Annual Report and Financial Accounts 2021

8. How we operate

How we are governed

The Engineering Council, whose registered office is 5[th] Floor, 10 Lower Thames St, London EC3R 6EN was incorporated by Royal Charter on 27 November 1981 and is a registered charity, No. 286142, whose objects are:

To advance education in, and to promote the science and practice of, engineering (including relevant technology) for the public benefit and thereby to promote industry and commerce in Our United Kingdom and elsewhere .

However, as a result of changes made to the profession under the direction of Lord Sainsbury, Minister for Science and Innovation (1998 to 2006), the scope and responsibility was narrowed down to operate the national Register.

How we are funded

The Engineering Council engineers and technicians. The fees are collected by the professional engineering institutions and remitted to EngineeringUK, from which a grant is made to the Engineering Council. This operating grant is used to cover the cost of carrying out regulatory activities, which include maintenance of standards; licensing of professional engineering institutions as Licensed Members and Professional Affiliates; international representation in FEANI and the International Engineering Alliance; otion of registration by professional engineering institutions.

The annual registration fees from Engineering Technicians, Incorporated Engineers, Chartered Engineers and ICT Technicians support the work of the Engineering Council and EngineeringUK.

The Engineering Council does not engage any external fundraisers nor raises funds from the general public and as such no complaints have been received in this respect.

The Board of Trustees

The Engineering Council is governed by a 22-member Board of Trustees, which is appointed in -laws. Twelve of the members are appointed by the major professional engineering institutions, three by the smaller institutions and the remaining seven by EngineeringUK. The composition of the Board provides stakeholder representation through institutionnominated members, and the involvement of the wider profession through EngineeringUK nominees.

The Board chaired by Prof Chris Atkin CEng FRAeS met on three occasions in 2021.

The Board appoints the Chief Executive Officer, who is in turn responsible for staffing within parameters established by the Board.

The constitution and membership of the Board is published on the Engineering Council website (www.engc.org.uk). An extranet requiring a password (from October 2017, the Partner Portal, at https://partner.engc.org.uk) is available to stakeholders, primarily Licensed Members, Professional Affiliates, Committee and Panels, as well as Engineering Council staff. The Charter and Bye-laws, Regulations and Terms of Reference Partner Portal together with other information including agendas, minutes and papers and proceedings of the Board, Committees and Panels.

Within three months of joining the Board, Trustees are given an induction by the Executive Team, which is based on the Institute of Chartered Secretaries and Administrators Best Practice Guide to the Appointment and Induction of Charity Trustees. Further trustee training, including GDPR training, is undertaken as appropriate.

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Annual Report and Financial Accounts 2021

The following table presents changes to Board members during 2021.

----- Start of picture text -----
Term of Term of
Nominated by Board Member Office Office
ended started
Prof Kevin Jones CEng CITP CSci
1 BCS, The Chartered Institute for IT June 2021
FIET FBCS
BCS, The Chartered Institute for IT Mr Alastair Revell June 2021
Chartered Institution of Building
2 Mr George Adams CEng FCIBSE June 2021
Services Engineers
Chartered Institution of Building
Mr Andrew Rowe June 2021
Services Engineers
3 Institution of Chemical Engineers Dr Rob Best CEng FIChemE
EUR ING Bill Hewlett CEng FICE
4 Institution of Civil Engineers June 2021
FIET
Institution of Civil Engineers Mrs Emer Murnaghan June 2021
Institution of Engineering &
5 Mr James Baker CEng FIET
Technology
Institution of Engineering &
6 Ms Michelle Richmond CEng FIET
Technology
Institute of Marine Engineering,
7 John Chudley CEng FIMarEST
Science & Technology
Institute of Materials, Minerals and EUR ING Dr Graham Woodrow CEng
8 June 2021
Mining FIMMM
Institute of Materials, Minerals and
Mr Jim Shields June 2021
Mining
Institution of Mechanical
9 Mr Mike McLoughlin CEng FIMechE
Engineers
10 Royal Aeronautical Society Prof Chris Atkin CEng FRAeS
Mr Stephen Catte CEnv IEng
11 Society of Operations Engineers
HonFSOE
12 Institution of Structural Engineers Mr Phil Nelson CEng FIStructE
13 Group B Institutions Terry Fuller CEng MICE MCIWEM
14 Group B Institutions Mr Neil Phelps IEng MIED
Mr Tony Gibson CEng MNucI MIET
15 Group C Institutions
MAPM MINCOSE
16 EngineeringUK Mr David Short CEng FRAeS MIET
17 EngineeringUK Ms Ann Watson
18 EngineeringUK Matt Gantley
19 EngineeringUK Ms Estelle Clark CQP FCQI FRSA
Mrs Josephine Parker MBE CEng
20 EngineeringUK
FCIWEM FICE F!Water
Capt Mike Rose RN CEng
21 EngineeringUK
MIMarEST
22 EngineeringUK Ms Ann Francke
----- End of picture text -----

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Annual Report and Financial Accounts 2021

Committees and Panels

The Board operates through the two principal committees and four panels listed below. All committee and panel Chairs are members of the Board. Other committee and panel members are nominated by the professional engineering institutions.

----- Start of picture text -----
Board
Registration Standards Committee(RSC) Quality Assurance Committee(QAC) International Advisory Panel(IAP) Management Panel(MP) Remuneration PanelFinance, Audit and (FARP) Privy Council and Governance (PCGP)Panel Group B and C Panel
----- End of picture text -----

The Registration Standards Committee (RSC) has oversight of matters to do with the education, training and professional development of professional engineers and technicians. It is responsible for maintaining the standards of competence and commitment and maintaining the underpinning knowledge and understanding requirements for professional registration. This includes publishing, and keeping under review, the Registration Code of Practice that aligns with the requirements set out in the UK Standard for Professional Engineering Competence (UK-SPEC), the ICT Technician Standard, and the standards for the accreditation of HE programmes and approved apprenticeships. RSC comprises nominees from professional engineering institutions, including from academia and industry, which ensures that the Engineering Council is kept abreast of developments in education and professional development that relate to professional engineers and technicians. The committee met three times in 2021.

The Quality Assurance Committee (QAC) is responsible for licensing professional engineering institutions that are considered competent to assess candidates for professional registration, accredit academic programmes, and approve professional development schemes. This involves a periodic review ocess, reviewing and making appropriate changes to licensing policies and processes, and encouraging information exchange between institutions, while maintaining an overview of licence related issues. It also approves suitable bodies as Professional Affiliates. QAC comprises members nominated by the licensed institutions who are registrants and of suitable standing and experience. The committee met four times in 2021.

The International Advisory Panel (IAP) is responsible for advising on matters that have an impact on the global recognition of Engineering Council standards and the international mobility of engineering professionals. This involves advising on the international promotion of the national Register, updating the identifying suitable representatives of the UK engineering profession to join international committees. IAP acts as the National Monitoring Committee for FEANI registration purposes and as the responsible Committee for the UK section of International Registers. IAP also promotes the flow of communications between the Engineering Council and the institutions on international matters. IAP comprises nominees from professional engineering institutions, including from academia and industry, with international experience and expert knowledge of mobility issues affecting professional engineers and technicians. The Panel met three times in 2021.

The Finance, Audit and Remuneration Panel (FARP) has responsibility for keeping the financial management of the Engineering Council under review. Through the delegated authority of the Board, it approves variations to expenditure and investment policy within established limits. The Panel advises the Board and CEO on financial services; monthly management accounts; remuneration; staff pensions; subscription and fees policies; the annual budget, report and accounts; risk assessment policy; audit reports and delegated financial authorities. In addition to the Chair, FARP comprises three current trustees and one other member with relevant knowledge and experience. The Panel met three times in 2021.

The Privy Council and Governance Panel (PCGP) is responsible for the periodic review of the Charter, Bye-laws and Regulations of the Engineering Council, and making proposals for change to the Board. The Panel also advises the Board on its response to requests for advice from the Privy Council Office and other government departments on matters concerning the constitution of relevant institutions. PCGP provides advice to professional engineering institutions on constitution, governance and disciplinary procedures. This involves publishing and reviewing guidance on disciplinary procedures and consulting with Licensed Members on significant proposed changes to policies or procedures. PCGP also considers representations from professional engineering institutions, registrants or members of the public concerning the conduct of institutions or registrants and determines whether, and if so how, appeal proceedings should take place.

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Annual Report and Financial Accounts 2021

PCGP comprises suitable nominees from the Board, together with advisors to assist in this work of the Panel. The PCGP met four times in 2021.

The Management Panel (MP) is responsible for day-to-day operational decision making and management of the organisation. The Panel is chaired by the CEO and comprises of the CEO, the Deputy CEO/Operations Director, Head of Professional Standards and the Head of Administration & Support and meets approximately every four to six weeks. Its standing agenda includes IT and Management Information Systems, project management/project reporting, risk management, business planning, HR, finance, quality management and business continuity.

The Group B and C Panel provides a forum for the exchange of information and good practice with respect to membership and registration matters concerning small (Group C) and medium-sized (Group B) institutions. It also discusses pan-engineering issues of joint concern and, where appropriate, provides focus for campaigns or lobbying and the dissemination of a collective view. The Panel provides a platform for organisations and individuals to present topics of common interest, including identifying and implementing opportunities for co-operation between institutions for mutual benefit and the public good.

Volunteer Effort

Volunteer effort, through its Board, committees, panels and working groups, continues to be crucial to the work of the Engineering Council. A conservative estimate gives the total days given freely to the Engineering Council throughout the year as approximately 1,200. Given the standing of those involved the financial equivalent would be in the order of £620,000 per annum. These figures have not significantly changed in the last year with our volunteers continuing to provide the same level of support through the pandemic.

A remote volunteers seminar was held in November in 2021, which was well attended.

Remuneration Policy

The Engineering Council is committed to ensuring that it pays staff fairly and at an appropriate level in order to attract and retain people with the right skills and experience to ensure that the organisation delivers its charitable objectives and strategic plan.

FARP has delegated authority from the Board of Trustees to determine all matters relating to staff pay and reward. In determining staff remuneration, FARP considers factors such as the increase in cost of living and the general rate of salary increases in the market during the preceding 12 months. Bonus payments are awarded on a discretionary basis to provide staff with appropriate incentives to encourage enhanced performance and to reward them in a fair and responsible manner for their individual contributions to the success of the organisation.

KEY MANAGEMENT PERSONNEL

Chief Executive Officer

Alasdair Coates BEng (Hons) MSc CEng FICE MCIHT CMIOSH

Operations Director & Deputy Chief Executive Officer Paul Bailey BSc (Hons) MRAeS MInstP

Head of Administration & Support Gillian Paterson MA FCIPD

Head of Professional Standards Katy Turff CMgr MCMI

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Annual Report and Financial Accounts 2021

Professional Advisors

----- Start of picture text -----
Service Organisation Address
Actuaries & Pension Cartwright Benefit Consultants 175 Kings Road, Reading, RG1 4EY
Administrators Ltd.
Auditors Haysmacintyre LLP 10 Queen Street Place, London
EC4R 1AG
Bankers HSBC Bank plc 165 Fleet Street, London, EC4A 2DY
Financial Accountants Kreston Reeves LLP
2TU
Investment Managers Cazenove Capital 1 London Wall Place, London, EC2Y 5AU
Lawyers Veale Wasbrough Vizards LLP Narrow Quay House, Narrow Quay,
Bristol BS1 4QA
----- End of picture text -----

9. Statement of Trustees' responsibilities

The Trustees are responsible for preparing the Trustees' report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The law applicable to charities in England and Wales requires the Trustees to prepare financial statements for each financial year, which provides a true and fair view of the state of affairs and the incoming resources and application of resources, of the charity for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping proper accounting records that disclose, with reasonable accuracy at any time, the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011, the applicable Charity (Accounts and Reports) Regulations and the provisions of the Trust Deed. They are also responsible for safeguarding the assets of the charity and for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Trustees are responsible for the maintenance and integrity of the charity and financial information e. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. -24 was approved by the Trustees on 23 June 2022 and signed on their behalf by the Chairman of the Board:

Prof Chris Atkin CEng FRAeS

Page 24

Trustees of The Engineering Council

Opinion

We have audited the financial statements of The Engineering Council for the year ended 31 December 2021 which comprise the Statement of Financial Activities, the Balance Sheet and the Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder. 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 Audi the financial statements section of our report. We are independent of the charity in accordance with the 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

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 charity'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. The other information comprises the information information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

Page 25

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion:

Responsibilities of trustees for the financial statements

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.

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 charity or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the charity and the environment in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to Charities Act 2011 and its Royal Charter, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Charities Act 2011 and the application of FRS 102, income tax and payroll tax.

We evaluated statements (including the risk of override of controls), and determined that the principal risks were related to application of controls around authorisation of expenditure and payments. Audit procedures performed by the engagement team included:

A further description of our responsibilities for the audit of the financial statements is located on the www.frc.org.uk/auditorsresponsibilities. This description forms

Page 26

Use of our report

Charities Act 2011 and regulations made under section 154 of that Act. Our audit work has been undertaken so that we might state to the charity's trustees 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 anyon the opinions we have formed.

Haysmacintyre LLP 10 Queen Street Place Statutory Auditors London Date: 23 June 2022 EC4R 1AG

Haysmacintyre LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

Page 27

The Enginegring Council Statement of flnanclal actlvltles forthe year ended 31 December 2021 Restricted Unrestricted funds funds 2021 2021 Total funds 2021 Total funds 2020 Note Income from: Charitable activities 108.255 2.810,856 6,595 37,913 2.919,111 6,595 37,913 2,918,226 7, 754 54,082 Other trading activities Investments Total income 108,255 2.855,364 2.963,619 2,980,062 Expenditure on: Raising funds Charitable activities 258 258 2,582 2,867,855 108,255 2,656,664 2,764,919 Total expenditure 108.255 2,656,922 2,765,177 2,870,437 Net income before net gainslllo$ses on investments 198,442 40.244 198,442 40.244 109,625 f42,063) Nel gainslllossesl on investments Net movement in funds before other recognised gainslllossesl 238,686 238,686 67,562 Other recognised gainsl{lossesl'. Aetuarial gainslllossesl on defined benefit pension schemes Derecognition of pension surplus $40,000 {525.0001 $40,000 {525.0001 (1, 107,000) 1, 169,000 Net movement in funds 253,686 253,686 129,562 Reconciliation of funds: Total funds brought forward Nel movement in fvnds 2,777,200 253,686 2,777,200 253,686 2,647,638 129,562 Total funds carried forward 3.030,886 3.030,886 2, 777,200 The Statement of financial activities includes all gains and losses recognised in the year. The notes on pages 31 to 53 form part of these financial statements. Page 28

The Enginegring Council Balance sheet as at 31 December 2021 2021 2020 Note Fixed assets Tangible assets Investments 14 15 191.203 247,045 2,016,073 191,203 2,263, 118 Current assets Debtors 16 88,861 3,033,313 171, 120 688,775 Cash al bank and in hand 3.122,174 859,835 Creditors.. amounts falling due within one year 17 1282,491) (345, 753J Net current assets Net assets including ponsion scheme liabilities 2,839,683 514,082 3,030.886 2, 777,200 Charity funds Reslricled funds Unrestricted funds 18 18 3.030.886 2, 777,2(10 Total funds 3,030,886 2, 777,200 The financial statements were approved 23 June 2022 and signed on their behalf by.. and authorised for issue by the Trustees on Prof Chris Atkin CEng FRAeS The notes on pages 31 to 53 form part of these financial statements. Page 29

The Enginegring Council Statement of cash flows forthe year ended 31 December 2021 2021 2020 Cash flows from operating activities Nel cash provided byllused inl operating activities 341.553 360, 103 Cash flows from investing activities Dividends, interests and rents from investments Purchase of tsngible fixed assets Proceeds from sale of investments Purchase of investments Gains on sale of investments 58 {13,086} 2,094,172 (37,855) 140.244} 862 (273,427) (70,000) Net cash provided byllused inl investing activities 2.003.045 {342,5651 Change in cash and cash equivalents in the year Cash and cash equivalents at the beginning of the year 2,344,598 17,538 688.715 671, 177 Cash and cash equlvalents at the end of the year 3,033,313 688, 715 The notes on pages 31 to 53 form part of these financial statements Page 30

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 General Infomiatlon The Engineering Council is an unincorporated charity registered with the Charity Commission. The registered office is 10 Lower Thames Street, London, EC3R 6EN. Accountlng pollcles 2.1 Basis of preparation of financial statements The financial slalements have been prepared in accordan￿ with the Charities SORP IFRS 1021 Accounting and Reporting by Charities.. Slalement of Recommended Practice applicable lo charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 leffeclive 1 January 20191, the Financial Reporting Standard applicable in the UK and Republic of Ireland IFRS 1021 and the Charities Act 2011. The Engineering Council meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless olhetwise slated in the relevant accounting policy. 2.2 Going concern The Trustees consider that there are no material Un￿rtaIntieS about the charity's ability to continue as a going GOn￿rn. Whilst the impact of the COVID-19 pandemic has been assessed by the Trustees, so far as is reasonably possible, due lo its unprecedented impact on the worldwide economy il is difficult lo evaluate with any certainty the potential outcomes on the Charity's future aclivilies. However, taking into consideration the Charity's level of reserves, the Trustees believe that the Charity will be able lo continue in operational existence for the foreseeable future. 2.3 Income All income is recognised On￿ the charity has entitlement lo the income, it is probable that the income will be received and the amount of income receivable can be measured reliably. Income lax recoverable in relation lo investment income is recognised at the time the investment income is receivable. 2.4 Expenditure Expenditure is recognised once there is a legal or conslruclive obligation lo transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in selllemenl and the amount of the obligation can be measured reliably. Charitable activities are costs incurred on the charity's operations, including support costs and costs relating lo the governance of the charity, all incurred in achieving the charity's objectives. All expenditure is inclusive of irrecoverable VAT. Page 31

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 Accountlng pollcles Icontlnuedl 2.5 Tanglble flxed assets and depreclatlon Tangible fixed assets costing £1,000 or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably. Tangible fixed assets are initially recognised al cost. After recognition, under the cost Model, tsngible fixed assets are measured al cost less accumulated depreciation and any accumulated impairment losses. All costs incurred lo bring a tsngible fixed asset into its intended working condition should be included in the measurement of cost. Depreciation is charged so as to allocate the cost of tangible fixed assets less their residual value over their estimated useful lives, Depreciation is pmvided on the following bases.. Fixtures and fittings Office equipment Computer equipment 20Yo straight line 250/0 straight line 330/0 straight line Assets of nil book value are removed from the asset register after 10 years, irrespective of whether they exist or not. These are in included in 'Disposals during the yearf, as appropriate. 2.6 Investments Fixed asset investments are a form of financial instrument and are initially recognised al their transaction cost and subsequently measured at fair value al the Balance sheet date, unless the value cannot be Measured reliably in which case it is measured al cost less impairment. Investment gains and losses, whether realised or unrealised, are combined and presented as 'GainsllLossesl on investments, in the Statement of financial aclivilies. 2.7 Interest recelvable Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the charity", this is normally upon notification of the interest paid or payable by the institution with whom the funds are deposited. 2.8 Operatlng leases Rentsls paid under operating leases are charged to the Statement of financial acts'vilies on a straight line basis over the lease term. Benefits received and receivable as an incentive to sign an operating lease are rec￿nISed on a straight line basis over the period until the date the rent is expected to be adjusted to the prevailing market rate. 2.9 Debtors Trade and other debtors are recognised al the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due. 2.10 Cash at bank and In hand Cash at bank and in hand includes cash and short-term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account. Page 32

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 Accountlng pollcles Icontlnuedl 2.11 Llabllltles and provlslons Liabilities are recognised when there is an obligation at the Balance sheet dale as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Liabilities are recognised at the amount that the charity anlicipales it will pay lo settle the debt or the amount it has received as advanced payments for the goods or services it must provide. Provisions are measured at the best estimate of the amounts required lo settle the obligation. Where the effect of the lime value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised in the Statement of financial activities as a finance cost. 2.12 Flnanclal Instruments The charity only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at tonsaction value and subsequently measured al their settlement value with the exception of bank loans which are subsequently measured at amortised cost using the effective interest method. 2.13 Forelgn currencles Monetary assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the reporting date. Transactions in foreign currencies are translated into sterling al the rale ruling on the dale of the transaction. Exchange gains and losses are recognised in the Ststemenl of financial activities. 2.14 Fund accountlng General funds are unreslricled funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the charity and which have not been designated for other purposes. Restricted funds are funds which are to be used in accordance with specific reslriclions imposed by donors or which have been raised by the charity for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes lo the financial statements. Page 33

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 Accountlng pollcles Icontlnuedl 2.15 Penslons The Engineering Council contributes to a conlracled-out defined benefi't pension scheme, the Engineering Council Pension Scheme. This scheme was closed to new entrants on 3 July 2002. The Scheme closed to future accrual with effect from 30 April 2012. The Engineering Council fully adopts Financial Reporting Standard 102 IFRS1021 and the impact of this standard has been reflected throughout the financial ststemenls. In accordance with FRS102, the Statement of Financial Activities includes.. the cost of benefits accruing during the year in respect of current service costs Icharged against staff costs within charitable aclivitiesl", the interest cost and the expected return on assets (shown as direct costs)., and actuarial gains and losses Idisclosed within other recognised gains and losses). In accordance with FRS102, the balance sheet includes the surplus or deficit in the scheme. This has been estimated for the purposes of FRS102 based on the results of the funding Actuarial Valuation, adjusted for the different assumptions and taking into consideration subsequent cash flows. Further details regarding the scheme are disclosed in note 24. The Engineering Council also contributes lo a defined contribution stakeholder pension scheme operated by Scottish Widows. Contributions are charged to the Statement of Financial Activities as they fall due. 2.16 Taxatlon The charity is considered to pass the lesls sel out in Paragraph 1 Schedule 6 of the Finance Act 2010 and therefore il meets the definition of a charitable company for UK corporation tsx purposes. Accordingly, the charity is potentially exempl from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes. 2.17 Value Added Tax Due lo the nature of the Engineering Council's income sources, almost all VAT incurred on purchases is irrecoverable. Irrecoverable VAT input charges have therefore been included in the expenditure areas to which they relate. Page 34

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 Crltlcal accountlng estlmates and areas of Judgment Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectstions of future events that are believed to be reasonable under the circumstsnces. Critical accounting estimates and assumptions.. The charity makes eslimales and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The eslimales and assumptions that have a signifi'cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi'nancial year are discussed below. Defined benefit pension scheme In the application of the accounting policies, Trustees are required to make judgement, eslimales, and assumptions about the carrying value 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 eslimales and underlying assumptions are reviewed on an ongoing basis. Revisions lo 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 affected current and future periods. The charity also contributes to the Engineering Council Pension Scheme. The scheme is a defined benefi't scheme in accordance with sects'on 28 of FRS 102. Service costs, curtailments, settlement gains and losses, net financial returns and remeasuremenl gains and losses are included in the Statement of Financial Activities in the year to which they relate. Changes in the assets and liabilities of the scheme in the year are disclosed and allocated as follows.. Changes relating lo current or past service costs and gains and losses on settlements and curtailments and pension finance costs arising from changes in the net of the interest costs and expected return on assets, are allocated to the relevant activity heading based on staff costs of employees within the scheme. Pension fi'nance charges arising from similar changes are recognised as expenditure. Remeasurement gains and losses are recognised as other recognised gains and losses. The assets, liabilities and movements in the surplus or deficit of the scheme are calculated by qualified independent actuaries as an update to the latest full actuarial valuation. Details of the scheme assets and liabilities and Major assumptions are shown in note 24. Tangible fixed assets The useful economic lives of tangible fixed assets are based on Management's judgement and experience. When management identifies that accrual useful economic lives differ materially from the estimates used to calculate depreciation, that charge is adjusted relrospeclively. Although tsngible fixed assists are significant, variances between actual and estimated useful economic lives will not have a material impact on the operating results. Historically, no changes have been required. In the view of the trustees, no assumptions concerning the future or estimation uncertainly affecting assets or liabilities at the balance sheet date are likely lo result in a material adjustment to their carrying amounts in the next financial year. Page 35

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 Income from charltable actlvltles Restrlcted Unrestrlcted funds funds 2021 2021 Total funds 2021 Grants 108,255 2,650,696 81,027 30 26,125 19,408 33,570 2,758,951 81.027 30 26,125 19,408 33.570 FEANI income Miscellaneous income Admin fee from EngineeringUK Professional services MCP li￿nse fees 108,255 2,810,856 2,919,111 Prior year- 2020 Restricted un￿strIcted funds funds 2020 2020 Total funds 2020 Grants 105,0(10 2,611,523 98,404 35 2,776,523 98,404 35 FEANI income Miscellaneous ineome Admin fee from EngineeringUK Professional services 44,664 24,600 34,000 44,664 24,6( 34,000 MCP li￿nSe fees 105,000 2,813,226 2,918,226 Page 36

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 Other tradlng actlvltles Unrestrlcted funds 2021 Total funds 2021 Trading income Stamp purchases 6,595 12581 6,595 12581 6,337 6,337 Prior year- 2020 Un￿strIcted funds 2020 Total funds 2020 Trading income Stamp purchases 7, 754 (2, 159) 7, 754 (2, 759) 5,595 5,595 Trading income comprises professional stamps and repla￿ment registration certificates. Investment income Unrestricted funds 2021 Total funds 2021 Interest from fixed asset investments 37,855 58 37,855 58 Bank interest receivable 37,913 37.913 Page 37

Pension income (note 25) (150,000) (150,000) (95,918) (95,918)

424,855 293,000 2,717

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 Dlrect costs Restrlcted Unrestrlcted funds funds 2021 2021 Total funds 2021 Pension expense (note 121 Project spend Recruilmenl and temporary staff Training Computer and information systems costs Marketing Travel and subsistence Subscriptions and meetings Accomodalion costs Wages and salaries (note 111 124,000 5,339 25,798 17,176 170,377 22,954 3,691 100,251 191,343 1,712,817 124,000 5.339 25.798 17,176 170,377 22.954 3,691 100,251 191,343 1,821.072 108,255 108,255 2,373,746 2,482,001 Prior year- 2020 Restricted Unrestricted funds funds 2020 2020 Total funds 2020 Pension expense (note 121 Project spend Recruilmenl and temporary staff Training Computer and information systems Costs Marketing Travel and subsistence Subscriptions and meetings Accomodalion costs 167,000 1, 739 6,553 3,449 217,083 4, 780 18,508 88,530 285,893 1,526,320 167,000 1,739 6,553 3,449 217,083 4, 780 18,508 88,530 285,893 1,631,320 Wages and salaries (note 111 105,0(R) 705,000 2,319,855 2,424,855 Page 39

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 Support costs Unrestrlcted funds 2021 Total funds 2021 General support Telephone Printing, stationery and office supplies Maintenance of equipment Sundries 9,694 49,624 15,515 2,031 9.694 49.624 15,515 2,031 r li Rentsl of office equipment Bank charges Accountancy Legal and professional Insuran Application fees Office move costs Depreciation 14,043 4,478 4,680 23,175 48,411 6,622 5,563 62,695 14.043 4,478 4,680 23,175 48.411 6.622 5,563 62,695 Governance Accountancy Auditors, remuneration 246.531 23,473 12,914 246.531 23,473 12,914 282,918 282,918 Support costs are allocated in full to the only charitable activity of the charity. Page 40

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 Prior year- 2020 Unrestricted funds 2020 Total funds 2020 General support Telephone Printing, stationery and office supplies Maintenance of equipment Sundries 10,922 60,219 15, 120 2,607 10,922 60,219 15,120 2,607 F li Rentsl of office equipment Bank charges Accountancy Legal and professional fees Insuran Application fees Office move costs Depreciation 8,323 3,913 4, 750 18,036 47,401 14,802 14,228 56,969 8,323 3,913 4, 750 78,036 47,401 14,802 14,228 56,969 257,290 257,290 Governance Accountancy Auditors, remuneration 21,170 14,540 21,170 14,540 293,000 293,000 10. Auditorfs remuneration 2021 2020 Fees payable lo the charity's auditor for the audit of the charitys annual accounts- excluding VAT 12,914 11,950 Page 41

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 11. Staff costs 2021 2020 Wages and salaries Social security costs Contribution to defined contribution pension schemes 1,429,556 153.275 362,241 1,407,744 154,651 235,925 1,945,072 1, 798,320 Included within wages and salaries is an ex-gratia termination payment of £15.000 12020.. £15,000), which was paid in full during the year. The average number of persons employed by the charity during the year was as follows.. 2021 No. 2020 No. 33 32 The number of employees whose employee benefits (excluding employer pension costs) exceeded £60,000 was". 2021 No. 2020 No. In the band £60,001- £70,000 In the band £80,001- £90,000 In the band £100,001 - £110,000 In the band £140,001- £150,000 Employers pension contributions lotalling £63,02412020'. £38,619) were paid to higher paid employees. ,The total employment benefits of the key management personnel were £508,317 including employerfs national insuranTr contributions of £44,614 12020 - £495,325, including employerfs national insurance contributions of £47,365). 12. Pension expenso 2021 2020 Interest on pension scheme liabilities Interest on scheme assets Administrative expenses 187.000 1187.000} 124,000 255,000 (105,000) 167,000 124,000 317,000 Page 42

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 13. Trustees. remuneratlon and expenses During the year, no Trustees received any remuneration or other benefits {2020- £NIL). During the year ended 31 December 2021, expenses lotslling £1,204 were reimbursed or paid directly lo 4 Trustees (2020- £2,019 to 4 Tmslees) for travel expenses incurred. 14. Tanglble flxed assets Fixtures and fittings Office equipment Computer equipment Totsl Cost or valuation At 1 January 2021 Additions 444.399 33.341 300.756 13.086 778.496 13.086 At 31 December 2021 444,399 33,341 313,842 791,582 Depreclatlon At 1 January 2021 Charge for the year 218,330 52,754 29,215 283,906 14.626 531,451 68.928 At 31 December 2021 271,084 30.763 298.532 600.379 Net book value At 31 December 2021 173,315 2,578 15.310 191.203 At 31 December 2020 226,069 4,126 16,850 247,045 Page 43

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 15. Flxed asset Investments Listed investments At 1 January 2021 Additions Disposals 2.016,073 37,855 2,053,928) At 31 December 2021 Net book value At 31 December 2021 At 31 Decembgr 2020 2,016,073 16. Debtors 2021 2020 Due within one year Trade debtors Other debtors Prepayments and accrued income 45,972 2,503 40.386 50,027 46,820 74,273 88.861 171,120 17. Creditors: Amounts falling due within one year 2021 2020 Trade creditors Amounts owed to group undertakings Other laxalion and social security other creditors 43,850 18,998 61,821 19.147 138,675 33,751 29,610 75,189 5,383 201,820 Accruals and deferred income 282,491 345, 753 Page 44

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 18. Statement offunds Statement offunds- currentyear Balance at 31 Gainsl December (Lossesl 2021 Balance at 1 January 2021 Income Expendlture Unrestrictod funds General Funds 2,777,200 2,855,364 12,656,922) 55,244 3,030,886 Restricted funds Pension fund grant 108,255 {108.2551 Total of funds 2,777,200 2,963,619 12,765,177) 55,244 3,030,886 Pension roservg This represents the movement on the defined benefit pension scheme. At the end of the year the scheme was in surplus, this was de-recognised Sin￿ it Is deemed non-recoverable. Pension fund grant This represents the grant from EngineeringUK which was paid into the defined benefit pension scheme as a lump-sum contribution followng consultation with the actuaries. Page 45

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 18. Statement of funds Icontlnuedl Statement of funds - prlor year Balance at 31 December 2020 Balance al l January 2020 Transfers in/out Gain (Losses) Income Expenditure Unrestrictod funds General Funds Pension reserve 2,647,638 2,875,062 (2, 765,437J 62,000 (62,000) {42,063J 62,000 2, 777,200 2,647,638 2,875,062 (2, 765,437) 19,937 2, 777,200 Restrlcted funds Pension fund grant 105,000 (105,(K)O) Total of funds 2,647,638 2,980,062 (2,870,437) 19,937 2, 777,2(10 19. Summary of funds Summary of funds- current year Balance at 31 Galnsl December (Losses) 2021 Balance at 1 January 2021 Income Expendlture General funds Reslricled funds 2.777.200 2.855,364 12,656.9221 108,255 {108.2551 55.244 3,030.886 2,777,200 2,963,619 I2,765,1771 55,244 3,030,886 Page 46

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 19. Summary of funds Icontlnuedl Summary of funds- prlor year Balance at 31 December 2020 Balance al l January 2020 Transfers in/out Gain (Losses) Income Expenditure General funds Reslricled funds 2,647,638 2,875,062 (2, 765,437) 105,000 f105,OOOJ 19,937 2, 777,200 2,647,638 2,980,062 (2,870,437) 19,937 2, 777,200 20. Analysis of net assets between funds Analysis of net assets between funds - current year Unrestricted funds 2021 Total funds 2021 Tangible fixed assets Current assets 191,203 3,122,174 1282,4911 191.203 3,122,174 {282,4911 Creditors due within one year Total 3,030,886 3.030.886 Analysls of net assets between funds - prlor year Unrestricted funds 2020 Total funds 2020 Tangible fixed assets Fixed asset investments 247,045 247,045 2,016,073 2,016,073 822,697 822, 697 (308,615) (308,615) Current assets Creditors due within one year Totsl 2, 777,200 2, 777,200 Page 47

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 21. Reconclllatlon of net movement In funds to net cash flow from operatlng actlvltles 2021 2020 Nel income for the year las per Stslement of Financial Activiliesl 238,686 67,562 Adjustments for: Depreciation charges Gains on investments Dividends, interests and rents from investments Decrease in debtors Increaselldecreasel in creditors Pension adjustments 68,928 57,212 58,843 (862) 90,810 24,538 62,0(X) 158} 82.259 {63,262} 15,000 Net cash provided by operating activities 341,553 360, 103 22. Analysis of cash and cash equivalents 2021 2020 Cash in hand 3.033.313 688,715 Total cash and cash equivalents 3.033,313 688,715 23. Analysis of change$ in net debt At1 January 2021 Cash flows At31 Decgmber 2021 Cash at bank and in hand 688,715 2,344,598 3,033,313 688.715 2.344,598 3,033.313 Page 48

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 24. Penslon commltments The charity operates a defined benefit pension scheme. The Engineering Council contributes to a contracled-oul defined benefit pension scheme, The Engineering Council Pension Scheme. This scheme was closed to new entrants on 3 July 2002. The full actuarial valuation as at 31 December 2018 was updated lo the Scheme's accounting date by an independent qualified actuary in accordance with FRS102. As required by FRS102, the actuarial method adopted lo calculate the present value of member's expected benefits is the projected unil method. Following consultation with the actuaries, The Engineering Council made a lump-sum contribution of £105,000 in March 2019. The present value of the liability to meet future pension obligations of members is arrived at by applying a discount rate equivalent to the return expected to be derived from a class AA corporate bond. At 31 December 2021 this was 1.90/012020 _ 1.300/01. The assets of the scheme are valued at their market value al the balance sheet date. This value will therefore fluctuate materially from year to year in response lo market conditions. The Engineering Council is the principal employer and Engineering UK is a participating employer under this scheme. The proportion of the total scheme fund attributable lo Engineering Council stsff and ex- Engineering Council stsff is 1000/0 12020 1000101. On wilhdfftwal from the Scheme by Engineering Council or closure, assets would be segregated in a similar proportion. The Scheme closed to future accrual with effect from 30 April 2012. Principal actuarial assumptions at the Balance sheet date (expressed as weighted averages).. 2021 2020 Discount rate Retail price inflation Future salary increases The assets in the scheme and the expected rates of return were.. 2021 2020 Equities Bonds Cash 3,216,600 3,228,000 12.705.570 12,589,200 160.830 322,800 16,083,000 16, 140,000 The actual return on scheme assets was £513,000 (2020- £1,064,000)- Page 49

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 The amounts recognised in the Balance sheet are as follows". 2021 2020 Present value of funded obligations Unrecognised past service cost 114,052,000} (14,634,000) 16.083,000 16, 140,000 Surplus in scheme Adjustment for non-recoverable surplus 2.031.000 1,506,000 12,031,000} (1,506,000) Net as$et$ The charity has an unrecognised surplus of £2,031,000 (2020 - £7,506,OOOJ in respect of its defined benefit pension scheme as it does not expect to recover the plan surplus either through reduced contributions in the future of through refunds from the plan. The amounts recognised in the Statement of financial activities are as follows.. 2021 2020 Interest on obligation Expected return on scheme assets Administrative expenses 1187,000} 187,000 1124,000} (255,000) 105,000 (167,000) Total amount recognised in the Statement of financial activities 1124.000} (317,000) The actuarial gain on the scheme al year end was £540,000 (2020- Loss- £1, 107,000). Movements in the present value of the defined benefit obligation were as follows.. 2021 2020 Opening defined benefit obligation Interest cost 14.634.000 13,036,000 187,000 255,000 1214,000> 1,976,000 1555,000} (573,000) ActLJarial lossesllgainsl Benefits paid Closing defined benefit obligation 14.052.000 14,634,000 Page 50

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 Changes in the fair value of scheme assets were as follows.. 2021 2020 Opening fair value of scheme assets Expected return on assets Actuarial gainslllossesl Contributions by employer Benefits paid Administrative expenses 16,140,000 15, 711,0(X) 187,000 255,000 326.000 809,000 109,000 105,000 1555,000> {573,000) 1124.000} (167,000) 16.083,000 16, 140,000 The charity contributed £109,000 lo its Defined benefit pension scheme in 2021 expecting to increase annually on 1 January at 3.40/0 per annum The major categories of scheme assets as a percentage of total scheme assets are as follows." 2021 2020 Equities and property Bonds Cash 200/0 79% 200 780/0 Stakeholder and other pension schemes The board at a meeting on 3 July 2002 decided to no longer offer entry to The Engineering Council Pension Scheme to new staff and nominated a stakeholder pension scheme instead. This is a defined contribution scheme operated by Scoth'sh Widows and is not contracted out for the earnings related part of the State Pension Scheme. The employer contributes 100/0 of pensionable salary and the employee The Engineering Council employer contributions during 2021 were £238,986 (2020- £218,925>. 25. Capital Commitments 2021 2020 Contracted for but not provided in these financial statements 7,000 Page 51

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 26. Operatlng lease commltments At 31 December 2021 the charity had commitments to make future minimum lease payments under non- cancellable operating leases as follows". 2021 2020 Not later than 1 year Later than 1 year and not later than 5 years 145.741 303.864 145, 741 449,605 449,605 595,346 27. Related party transactions EngineeringUK is a related paty to the Engineering Council. Under the Engineering Council supplemental charter which came into effect on 22 March 2002, EngineeringUK may nominate 7 of its 22 Board members. By ils Regulations, the Engineering Council has assigned all income from its registration fees lo EngineeringUK. Changes to this regulation cannot be made without EngineeringUK's approval. The level of fee is determined by EngineeringUK. During the year ended 31 December 2021, the following transactions took place be￿een the parties arising from the above.. EngineeringUK provided a grant lo the Engineering Council of £2,650,69612020 - £2,611,523) lo fund its operation plus £108,25512020- £105,000) for the pension scheme. To cover administration costs, The Engineering Council charged EngineeringUK £26,125 12020 £44,664) in the year. On 31 December 2020, Engineering Council owed EngineeringUK the sum of £18,998 12020 Debtor - £29,610). This amount is disclosed within creditors falling due within one year. There were no other related party transactions in the current or the prior year. Page 52

The Enginegring Council Notes to the flnanclal statements forthe year ended 31 December 2021 28. Comparatlve statement of flnanclal actlvltles Restricted Unrestricted funds funds 2020 2020 Total funds 2020 Income from: Charitable activities Other trading activities Investments 105,000 2,813,226 7, 754 2,918,226 7, 754 Total income 105 000 2 875 062 2 980 062 Expendlture on: Raising funds Charitable activities 2,582 2,582 2 762 855 2 867 855 105 000 Total expenditure Net income before investment gainsl{Iossos} Nel gainslllossesl on investments Net income before other recognised gains and losses Derecognition of pension surplus Actuarial gains on defined benefit pension scheme Net movement in funds 105 000 2 765 437 2 870 437 109,625 109,625 67,562 6T,562 (1, 107,OOOJ (1, 707,000) 1 169 000 f 169 000 129,562 129,562 Reconciliation of funds: Total funds brought forward 2 647638 2 647638 Totsl funds carried forward 2, 777,200 2, 777,200 Page 53