Report of the Trustees and Financial Statements, IBSA (2011)

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REGISTERED COMPANY NUMBER: 136726 (England and Wales) REGISTERED CHARITY NUMBER: 216647

Report of the Trustees and Financial Statements For The Year Ended 31st August 2011 for International Bible Students Association Contents of the Financial Statements for the Year Ended 31st August 2011

Report of the Trustees 1 to 5

Report of the Independent Auditors 6

Statement of Financial Activities 7 to 8

Balance Sheet 9

Cash Flow Statement 10

Notes to the Financial Statements 11 to 20 The trustees who are also directors of the charity for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 31st August 2011.

The trustees have adopted the provisions of the Statement of Recommended Practice (SORP) 'Accounting and Reporting by Charities' issued in March 2005.

REFERENCE AND ADMINISTRATIVE DETAILS

Registered Company number

136726 (England and Wales)

Registered Charity number 216647

Registered office IBSA House The Ridgeway London NW7 1RN

Trustees

P S Gillies

S A Hardy

J S Andrews

J D Dutton

P P Bell

S Papps

appointed 2.11.11

resigned 2.11.11

Auditors

Calcutt Matthews Ltd Chartered Accountants and Statutory Auditor 19 North Street Ashford Kent TN24 8LF

STRUCTURE, GOVERNANCE AND MANAGEMENT

Governing document

The charity was incorporated on 30th June 1914 and is governed by the Memorandum and Articles of Association of that date as amended by special resolutions on 20th April 1951, 10th January 1958, 28th November 2005 and 4th January 2006.

Recruitment and appointment of new trustees

The Trustees of the Association who held office during the year, and at the date of this report, are set out above. These trustees have key managerial roles at the charity's headquarters. They meet weekly and are in regular contact from day to day. Trustees are elected annually by a simple majority of the members present at the AGM.

The recruitment and induction of new Trustees is arranged as follows. When necessary, the Trustees review potential candidates. These are required to be appointed as elders in congregations of Jehovah's Witnesses. Their abilities are evaluated by means of the Trustees ' personal knowledge of the candidates or by a " personal qualifications report " provided by elders with knowledge of the individuals. Training is arranged as part of the meetings of the Trustees when the charity's policies are discussed. This is supplemented by a periodic training session provided by the auditors, whenever there is significant new legislation affecting the charity.

Trustees are given Charity Commission publications and are sent on a two month course which includes training in legal and financial matters STRUCTURE, GOVERNANCE AND MANAGEMENT

Organisational structure

The charity is constituted as a company limited by guarantee.

The trustees organise the running of the charity through a number of departments. Each department is headed up by a trained and experienced department overseer who will make regular reports to the Trustees.

Wider network

Charities with similar objects exist in many countries around the world. Coordination is through the Governing Body of Jehovah's Witnesses, located at their headquarters in the United States.

Related parties

The Association works closely with Watch Tower Bible and Tract Society of Britain (Watch Tower). It provides serviced facilities for Watch Tower to use in its charitable activities. The Association purchases religious material from Watch Tower and donates this to congregations of Jehovah's Witnesses. The coordinating role of the Governing Body of Jehovah's Witnesses means we have ready access to surplus funds held by Jehovah's Witnesses in other countries.

Risk management

The major risks to which the charity is exposed have been formally reviewed, with particular focus on events that would seriously impede the operations of the charity. Strategies and safeguards are in place to reduce, as far as possible, the impact of those risks. The risk register was reviewed and updated most recently on October 26, 2011. The principal risks addressed were Disaster recovery and planning; Failure to comply with legal requirements on health and safety, fire, environment, waste; Construction projects; Contamination of food.

Public Benefit

The Trustees confirm that they have taken into consideration Charity Commission guidance on public benefit in exercising their powers and duties, and this is amply demonstrated in the report that follows, in particular:

Bible literature we have supplied without charge to congregations of Jehovah's Witnesses in the UK, has been distributed, gratis, by those congregations, to interested members of the public in their local communities, in the following quantities: 17,336,000 copies of Watchtower and Awake! and 1,189,000 Bibles and Bible study aids.

Our conventions for Bible education were widely advertised by personal invitations delivered to the public nationwide.

OBJECTIVES AND ACTIVITIES

Objectives and aims

The object of the Association is to promote the Christian religion by supporting congregations of Jehovah's Witnesses and others in connection with their spiritual and material welfare in Britain and abroad within the charitable purposes of the Association. This is achieved by:

The purchase and distribution of religious literature, free of charge.

The provision of serviced facilities for the printing of religious literature and the housing of workers engaged in this and in related activities.

The arranging of conventions for Bible education.

Significant activities

There continues to be an increasing demand for the religious literature we purchase from Watch Tower, hence the cost of our providing this has risen. At the same time, the scope of Watch Tower's printing for international distribution continues to widen. More translation of the Bible and related publications is being done in London. Hence, we are embarking on projects to provide more living accommodation for the workers engaged in these activities. Specifically, another block of flats was purchased to enhance our residential accommodation. Land was bought to build more flats, and these are now in course of construction.

Grant making

Our grant making policy is as follows. From time to time we are asked by the Governing Body of Jehovah's Witnesses to consider helping Jehovah's Witnesses in countries where a need exists. We first consider whether the budget permits. If this is the case we satisfy ourselves that the expenditure will further the religious work of Jehovah's Witnesses and we then send the money to the organisation caring for Jehovah's Witnesses in that country. Finally, we obtain reports to confirm the money was properly used.

Report of the Trustees

for the Year Ended 31st August 2011

OBJECTIVES AND ACTIVITIES

Workers

The charity is run entirely by trained workers who receive just a small allowance and it is appropriate that we here express appreciation for their tireless efforts, resulting in a significant financial benefit to the charity. The basis for the care of their material needs is explained in note 9 of the accounts.

ACHIEVEMENT AND PERFORMANCE

Charitable activities

Provision of literature for Bible education

The literature we donate to congregations of Jehovah's Witnesses plays a pivotal role in their Bible teaching activity. This activity reached out to the communities in the area covered by the congregations resulting in families and individuals receiving free instruction in their own homes. An average of over 56,000 home Bible study courses were provided each month. It was pleasing to learn that during the year under review,2,739 individuals made the decision to become baptised members of the congregation, and the result was a net increase of 1% in those actively involved in the evangelising work. A special effort is being made to provide literature and teaching facilities for ones who learn better in another language.

Conventions for Bible education

These summer conventions were again well attended; the total of 161,243 was gratifying. All sessions are open to the public, and there is no charge for admission. 236,000 copies of "Questions Young People Ask - Answers That Work, volume 1 (revised) were distributed without charge at the conventions. Also, 320,000 copies of a new brochure for use in the public ministry, "Listen to God and Live Forever" and 316,000 of the simplified version "Listen to God" were given out for immediate use in the community. Finally, over 103,000 copies of a DVD, "Faith In Action (Part 2) Let the Light Shine" were made available without charge. These Bible teaching aids were eagerly received.

Overseas aid

We had adequate funds to be able to respond to all of the requests received from the Governing Body of Jehovah's Witnesses, in connection with lands where the economy is poor. The total was £956,000.

Fundraising activities

Because of the consistent support we enjoy from congregations of Jehovah's Witnesses, we do not engage in fundraising activities as such. We include a reminder about methods of donating,either in our monthly letter of thanks to congregations, or in our internal newsletter prior to the annual conventions. We find this to be adequate. It is good to see that in spite of the recession, voluntary income increased again. To fund the property developments described elsewhere in this report, we sought and received grants provided by Jehovah's Witnesses in other countries. We do make a charge to Watch Tower for providing serviced facilities for its use.

Investment performance

The trustees are satisfied with the results for the year, taking into account interest rates generally. Money is held in first class banks,with the bulk in liquidity funds that are protected or "ring fenced" in the event of bank failure.

Internal controls

These controls ensure that the monthly financial reports accurately represent all transactions, provide reasonable assurance that finances are being used for their intended purpose and verify that proper controls and procedures are in place and adhered to, so that the figures are recorded accurately and accounts are in balance. The internal audit programme has been achieved. The internal auditor and his assistant, both drawn from the volunteer workforce, have a set agenda to pursue through the year and reported again in writing to the Trustees in October 2011. All was found to be in order.

Report of the Trustees

for the Year Ended 31st August 2011

FINANCIAL REVIEW

Net Movement in Funds

There was a reduction of 971,000 in cash during the year. Our reserves remained adequate, permitting us to respond to requests for overseas funding for Jehovah's Witnesses at a reduced level.

Reserves policy

The Association has cash of approximately £3.3 million. The Association has a reliable donation base, being primarily the resources of Jehovah's Witnesses, pooled in Germany, and the 1,537 congregations of Jehovah's Witnesses in the UK. Hence, we can plan confidently with relatively small reserves, having in mind that we charge Watch Tower for the provision of serviced facilities and we respond to the needs for funds overseas only after filling our domestic requirements. Our established policy is to ensure that we have on hand in liquid funds at least two months' working expenditure. At the year end, liquid assets on hand equate to 3 months of expenditure (2010: 2.3 months).

Principal funding sources

The charity is funded by donations and legacies. Also, grants are received from Jehovah's Witnesses in other countries. £15.2 million was received by way of grants, through a charity in Germany, Jehovas Zeugen in Deutschland. Also sizeable payments are received from Watch Tower for providing it with serviced facilities.

FUTURE DEVELOPMENTS

We anticipate an even greater demand for Bible literature in the year ahead, for Jehovah's Witnesses and their public ministry, and we are planning our financial resources accordingly. Plans are in hand to provide further residential accommodation for our workers.

STATEMENT OF TRUSTEES' RESPONSIBILITIES

The trustees (who are also the directors of International Bible Students Association for the purposes of company law) are responsible for preparing the Report of the Trustees and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing those financial statements, the trustees are required to

select suitable accounting policies and then apply them consistently;

observe the methods and principles in the Charity SORP;

make judgements and estimates that are reasonable and prudent;

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

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

The trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the trustees are aware, there is no relevant information (as defined by Section 418 of the Companies Act 2006) of which the charitable company`s auditors are unaware, and each trustee has taken all the steps that they ought to have taken as a trustee in order to make them aware of any audit information and to establish that the charitable company`s auditors are aware of that information.

Report of the Trustees for the Year Ended 31st August 2011

ON BEHALF OF THE BOARD:

Stephen A. Hardy Trustee

Date: February 16,2012 Report of the Independent Auditors to the Members of

International Bible Students Association

We have audited the financial statements of International Bible Students Association for the year ended 31st August 2011 on pages seven to twenty. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of trustees and auditors

As explained more fully in the Statement of Trustees' Responsibilities, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the charitable company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the trustees; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Report of the Trustees to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In our opinion the financial statements:

give a true and fair view of the state of the charitable company's affairs as at 31st August 2011 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;

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

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

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Report of the Trustees for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us;or

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

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

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

N. M. Hume

Nicholas Hume FCA (Senior Statutory Auditor)

for and on behalf of Calcutt Matthews Ltd

Chartered Accountants and Statutory Auditor

19 North Street

Ashford

Kent

TN24 8LF

Date: February 16,2012 Statement of Financial Activities (Incorporating an Income and Expenditure Account) for the Year Ended 31st August 2011

Statement of Financial Activities (Incorporating an Income and Expenditure Account) for the Year Ended 31st August 2011

CONTINUING OPERATIONS

All incoming resources and resources expended arise from continuing activities.

Balance Sheet At 31st August 2011

Notes

Unrestricted funds£

Restricted funds£

2011 Total funds£

2010 Total funds£

FIXED ASSETS

Tangible assets

69,213,857

69,213,857

59,196,426

CURRENT ASSETS

Stocks

136,521

136,521

111,603

Debtors: amounts falling due within one year

509,289

509,289

2,232,053

Investments

54,078

54,078

48,515

Cash at bank and in hand

3,213,935

3,213,935

2,728,691

3,913,823

3,913,823

5,120,862

CREDITORS

Amounts falling due within one year

(1,438,005)

(1,438,005)

(1,672,383)

NET CURRENT ASSETS

2,475,818

2,475,818

3,448,479

TOTAL ASSETS LESS CURRENT LIABILITIES

CREDITORS

71,689,675

71,689,675

62,644,905

Amounts falling due after more than one year

(6,125,000)

NET ASSETS

FUNDS

Unrestricted funds

71,689,675

56,505,303

Restricted funds

14,602

TOTAL FUNDS

The financial statements were approved by the Board of Trustees on February 16,2012 and were signed on its behalf by:

Stephen A. Hardy Trustee

John Andrews Trustee International Bible Students Association

Cash Flow Statement for the Year Ended 31st August 2011

Notes

2011£

2010£

Net cash inflow from operating activities

12862015

8010086

Returns on investments and servicing of finance

21281

18746

Capital expenditure and financial investment

(6275536)

(6165351)

6607760

1863481

Management of liquid resources

11866

Financing

(6125000)

(4744474)

Increase/(decrease) in cash in the period

485244

(2869127)

Reconciliation of net cash flow to movement in net debt

Increase/(decrease) in cash in the period

485244

(2869127)

Cash outflow from increase in liquid resources

22048

Cash outflow from decrease in debt and lease financing

6125000

4744474

Change in net debt resulting from cash flows

6612728

1897395

Movement in net debt in the period

6612728

1897395

Net debt at 1st September

(3347794)

(5247816)

Net debt at 31st August

3264934

(3350421)

Notes to the Financial Statements for the Year Ended 31st August 2011

ACCOUNTING POLICIES

Accounting convention

The financial statements have been prepared under the historical cost convention, and in accordance with applicable accounting standards the Companies Act 2006 and the requirements of the Statement of Recommended Practice, Accounting and Reporting by Charities.

Donations receivable

All incoming resources are included on the Statement of Financial Activities when the charity is legally entitled to the income and the amount can be quantified with reasonable accuracy. No income is deferred. Donations are from the public, congregations and other connected charities. Donations in the form of assets are included at the market value on the date of the gift.

Grants receivable

Unrestricted grants receivable are recognised when they are received. They represent amounts received to contribute towards the running expenses of IBSA and to assist in repaying the loan owed to Watch Tower.

Restricted grants receivable represent amounts received to finance the purchase of fixed assets. They have been recognised when received. The purchase of fixed assets discharges the restriction on these funds, therefore a transfer to unrestricted funds has been made as and when fixed assets have been purchased.

Legacies

The value of legacies is brought into the accounts at the earlier of the charity being notified of an impending distribution or the legacy being received.

Provision of working and residential accommodation

Income from the provision of working and residential accommodation is received from a connected charity, Watch Tower Bible and Tract Society of Britain ("Watch Tower"), on a cost basis. Watch Tower occupies the residential accommodation, the printery and the offices that are maintained by the charity.

Resources expended

Expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources. Grants offered subject to conditions which have not been met at the year end date are noted as a commitment but not accrued as expenditure.

Governance costs

Governance costs comprise external audit fees and other fees from consultants.

Tangible fixed assets

Fixed assets are valued at cost less depreciation. Assets costing less than £1,000 are not capitalised. Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life:

Freehold Land - Not depreciated

Buildings - 2% on cost

Plant and machinery - 10% on cost

Motor vehicles - 25 % on reducing balance

Assets in the course of construction - Not depreciated

Impairment reviews are carried out on individual assets when there is some indication that the recoverable amount of a fixed asset is below its net book value.

Stocks

Stocks comprise Electrical, Maintenance and Home supplies,and are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Taxation

The charity is exempt from corporation tax on its charitable activities.

Notes to the Financial Statements - continued for the Year Ended 31st August 2011

ACCOUNTING POLICIES - continued

Fund accounting

Unrestricted funds can be used in accordance with the charitable objectives at the discretion of the trustees.

The charity has received capital grants this year that comprise a restricted fund. Please see the "grants receivable" policy above for information about how this fund has arisen and been discharged.

Foreign currencies

Foreign currency balances have been translated at the prevailing rate on the balance sheet date. Income and expenditures during the year have been translated at the prevailing rate on the day of the transaction.

Operating leases

Rentals paid under operating leases are charged to the statement of financial activities on a straight line basis over the period of the lease.

Investments

Investments are included in the balance sheet at market value.

Other recognised gains and losses

These comprise unrealised and realised gains and losses on investments. Unrealised gains and losses represent the difference between the market value brought forward (or cost, for assets bought within this financial year) and the market value at the balance sheet date. Realised gains and losses represent the difference between sales proceeds and market value brought forward (or cost, for assets bought within this financial year.)

Grants payable

Grants payable to other institutions are recognised at the point when their payment has been approved by the trustees.

Beneficial loans

The charity has benefited from an interest free loan from Watch Tower, which is a related party. The estimated interest that the charity would have paid on the open market for such a loan has been included as income and deducted as an expense.

Irrecoverable VAT

Irrecoverable VAT is included in the relevant cost headings on the face of the Statement of Financial Activities and is not shown as a separate item.

VOLUNTARY INCOME

£

£

Legacies

945,259

1,069,488

Grants

15,230,779

12,230,000

Assets donated

4,997,786

221,657

Cash donations

7,517,535

7,487,606

Interest waived on beneficial loan

112,000

400,000

28,803,359

21,408,751

Grants received, included in the above, are as follows:

£

£

Grants from "Jehovas Zeugen in Deutschland"

15,230,779

12,230,000

Notes to the Financial Statements - continued for the Year Ended 31st August 2011

INVESTMENT INCOME

£

£

Deposit account interest

19556

19080

Current asset investment income

20844

19912

INCOMING RESOURCES FROM CHARITABLE ACTIVITIES

Activity

£

£

Provision of serviced facilities

Provision of working and residential accommodation

4,425,669

4,330,053

CHARITABLE ACTIVITIES COSTS

Direct costs

Grant funding of activities(See note 6)

Totals

£

£

£

Provision of conventions for Bible education

844,529

844,529

Donations and aid overseas

305,006

651,302

956,308

Provision of working and residential accommodation

4,428,675

4,428,675

Provision of literature for Bible education

11,742,371

11,742,371

5,578,210

12,393,673

17,971,883

As all of the charity's general running costs are reimbursed completely by Watch Tower, all such costs are, in effect, direct costs. All human resources, IT, finance and management costs are included in the "provision of working and residential accommodation" above or in "governance costs". These have been fully reimbursed by Watch Tower.

GRANTS PAYABLE

£

£

Provision of literature for Bible education

11742371

11540494

Donations and aid overseas

651302

808769

12393673

12349263

Notes to the Financial Statements - continued for the Year Ended 31st August 2011

GRANTS PAYABLE - continued

During the year, grants paid to institutions with congruous objectives can be analysed as follows:

By continent:

Cash£

Goods£

Literature£

Totals£

Europe

140,441

202,376

11,727,743

12,070,560

Asia

260,934

30,951

292,464

Africa

2,859

3,050

Americas

11,190

11,933

Other

15,666

15,666

401,375

249,927

11,742,371

12,393,673

By activity:

Cash£

Goods£

Literature£

Totals£

Distribution of Bibles and Bible-based literature

11742371

11742371

Supporting regional headquarters in their administration of Christian missionary work

401375

249927

651302

401375

249927

11742371

12393673

Material grants (in the context of grant-making) were made to the following institutions:

Communauté Chrétienne des Bethelites (France)

Jehovas Zeugen (Germany)

Associação das Testemunhas de Jehová (Portugal)

Testigos Christianos de Jehová (Spain)

Towarzystwo Biblijne I Traktatowe ul. (Poland)

The equivalent figures for the 2010 year end were as follows:

By continent:

Cash£

Goods£

Literature£

Totals£

Europe

121,993

4,783

11,528,025

11,654,801

Asia

585,418

1,654

19,031

606,103

Africa

72,000

72,508

Americas

15,851

15,851

779,411

6,943

11,562,909

12,349,263

Notes to the Financial Statements - continued for the Year Ended 31st August 2011

GRANTS PAYABLE - continued

By activity:

Cash£

Goods£

Literature£

Totals£

Distribution of Bibles and Bible-based literature

11562909

11562909

Supporting regional headquarters in their administration of Christian missionary work

779411

786354

779411

11562909

12349263

GOVERNANCE COSTS

£

£

Auditors' remuneration

10000

Auditors' remuneration for non-audit work

11296

NET INCOMING/(OUTGOING) RESOURCES

Net resources are stated after charging/(crediting):

£

£

Auditors' remuneration

7,365

10,000

Auditors' remuneration for non-audit work

1,296

Depreciation-owned assets

1,240,701

1,101,274

Other operating leases

757,490

667,514

(Surplus)\deficit on disposal of fixed asset

(464)

3,748

Fixed assets donated overseas

15,666

71,840

TRUSTEES' REMUNERATION AND BENEFITS

There were no trustees' remuneration or other benefits for the year ended 31st August 2011 nor for the year ended 31st August 2010.

The trustees confirm that they have not been involved with any transactions of the charity. The Association has close connections with Watch Tower, which prints Bible based literature and which is a registered charity with similar objects. This charity also has the same registered office as that of the Association.

The trustees of IBSA receive no salary in their capacity as trustees. The trustees are also workers and they receive a fixed allowance for personal expenses of 96 per month and a personal expense gift of 300 per year with free board and lodging as indeed do all workers, including any close family members.where they are also working for the charity.

Trustees' Expenses

There were no trustees' expenses paid for the year ended 31st August 2011 nor for the year ended 31st August 2010.

Notes to the Financial Statements - continued for the Year Ended 31st August 2011

TANGIBLE FIXED ASSETS

Freehold property£

Assets in the course of construction£

Plant and machinery£

COST

68,988,976

176,873

1,611,384

At 1st September 2010

10,854,324

238,262

79,823

Additions

(19,911)

(3,161)

At 31st August 2011

79,823,389

415,135

1,688,046

DEPRECIATION

11,027,959

812,422

At 1st September 2010

1,061,459

120,386

Charge for year

(4,245)

(2,845)

Eliminated on disposal

12,085,173

929,963

NET BOOK VALUE

67,738,216

415,135

758,083

At 31st August 2011

57,961,017

176,873

798,962

Fixtures and fittings£

Motor vehicles£

Totals£

COST

10,337

504,545

71,292,115

At 1st September 2010

1,010

101,695

11,275,114

Additions

(10,000)

(33,072)

Disposals

11,347

596,240

82,534,157

At 31st August 2011

9,303

246,005

12,095,689

DEPRECIATION

58,765

1,240,701

At 31st August 2011

9,394

295,770

13,320,300

NET BOOK VALUE

1,953

300,470

69,213,857

At 31st August 2010

1,034

258,540

59,196,426

STOCKS

2011£

2010£

136,521

111,693

STOCKS

£

£

Stocks- Electrical, Maintenance and Home supplies

136,521

111,603

Notes to the Financial Statements - continued for the Year Ended 31st August 2011

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

£

£

Trade debtors

Other debtors

112708

246363

Due from associated charities

395291

1975606

Prepayments and accrued income

509289

2232053

CURRENT ASSET INVESTMENTS

£

£

Listed investments

54,078

48,515

Market value at 1 September 2010

48,515

Additions

4,884

Disposals

(2,400)

Net gain on revaluation

3,079

Market value at 31 August 2011

54,078

Historical cost at 31st August 2011

66,831

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

£

£

Trade creditors

991,582

1,234,029

Other creditors

437,473

428,354

Accrued expenses

8,950

10,000

1,438,005

1,672,383

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

£

£

Other loans(see note 16)

6,125,000

LOANS

An analysis of the maturity of loans is given below:

£

£

Amounts falling between one and two years:

Other loans-1-2 years

6,125,000

Notes to the Financial Statements - continued for the Year Ended 31st August 2011

MOVEMENT IN FUNDS

At 1.9.10£

Net movement in funds£

Transfers between funds£

At 31.8.11£

Unrestricted fundsGeneral fund

56,505,303

9,732,770

5,451,602

71,689,675

Restricted fundsCapital grants fund

14,602

5,437,000

(5,451,602)

TOTAL FUNDS

56,519,905

15,169,770

71,689,675

Net movement in funds, included in the above are as follows:

Incoming resources£

Resources expended£

Gains and losses£

Movement in funds£

Unrestricted fundsGeneral fund

27,820,842

(18,091,248)

3,176

9,732,770

Restricted fundsCapital grants fund

5,437,000

5,437,000

TOTAL FUNDS

33,257,842

(18,091,248)

3,176

15,169,770

Capital grants fund

This has arisen due to capital grants being received this year to enable the purchase of certain new fixed assets. As the purchase of fixed assets discharges the restriction on these funds, a transfer to unrestricted funds is made as new fixed assets are bought.

RELATED PARTY DISCLOSURES

The Association has close connections with Watch Tower Bible and Tract Society of Britain ("Watch Tower") which prints Bible based literature and which is a registered charity with similar objects. This charity also has the same registered office as that of the Association.

During the year, the Association purchased literature from Watch Tower amounting to £11,742,370 (2010: \textcircled{1} 1,340,917 ). At the year end, IBSA owed Watch Tower \textcircled{2} 867,833 (2010: \textcircled{1} 1,204,150 ), being the invoice for August 2011. In the prior year, an administrative error was discovered that had led to IBSA being overcharged for literature for two years. An estimate of the overcharge ( \textcircled{1} 1.4 million) was included as a debtor on the balance sheet for 2010. This was fully settled during the current year, therefore no amounts were outstanding at the year-end in relation to this transaction (2011: \textcircled{1} nil).

As an integral part of the charitable activities of IBSA, it provided Watch Tower with serviced facilities to enable Watch Tower to carry out its charitable activities. During the year, the Association charged Watch Tower 4,425,669 (2010: \textcircled{f} 4,330,053) for these services.At the year end,Watch Tower owed the Association \textcircled{f} 387,404 (2010: \textcircled{f} 391,556) in respect of these transactions.

The Association also had a beneficial loan from Watch Tower to assist it in achieving its objectives. The loan was made on an interest free basis, with no pay back date. The loan was fully paid back during the year and at the year-end the balance stood at £nil (2010: £6,125,000 ). The interest that would be due under normal, commercial rates has been estimated at £112,000 (2010: £400,000 ), and this has been provided for in the accounts as both an expense and an incoming resource.

Notes to the Financial Statements - continued for the Year Ended 31st August 2011

GOING CONCERN

In view of current economic uncertainties, the trustees have carried out a review of the stability of assets held with banks and other financial institutions at the year end. They are satisfied that assets are held in institutions with only the highest ratings, and no provisions other than those made in the accounts are required.

The trustees are satisfied that they have sufficient liquid funds to run the charity for the foreseeable future.

RECONCILIATION OF NET INCOMING RESOURCES TO NET CASH INFLOW FROM OPERATING ACTIVITIES

£

£

Net incoming resources

15166594

7798955

Depreciation charges

1240702

1101273

(Profit)/loss on disposal of fixed assets

(464)

Interest received

(21281)

(18746)

Donated fixed assets received

(4997786)

(221657)

Donated fixed assets

15666

71840

Investments received

(4884)

(34844)

(Increase)/decrease in stocks

(24918)

Decrease/(increase) in debtors

1722764

(1726350)

(Decrease)/increase in creditors

(234378)

1035134

12862015

8010086

Net cash inflow from operating activities

ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT

£

£

Returns on investments and servicing of finance

Interest received

21281

18746

Net cash inflow for returns on investments and servicing of finance

21281

18746

Capital expenditure and financial investment

Purchase of tangible fixed assets

(6277316)

(6169375)

Sale of tangible fixed assets

Net cash outflow for capital expenditure and financial investment

(6275536)

(6165351)

Management of liquid resources

Cash inflows from investments received

11866

Net cash inflow from management of liquid resources

11866

Financing

New loans in year

Loan repayments in year

3000000

(9125000)

-4744474

Net cash outflow from financing

(6125000)

(4744474)

Notes to the Financial Statements - continued for the Year Ended 31st August 2011

ANALYSIS OF CHANGES IN NET DEBT

At 1.9.10£

Cash flow£

Revaluation s£

At 31.8.11£

Net cash:

Cash at bank and in hand

2,728,691

485,244

3,213,935

Liquid resources:

Current asset investments

48,515

2,484

3,079

54,078

Debt:

Debts falling due after one year

(6,125,000)

6,125,000

Total

(3,347,794)

6,612,728

3,079

3,268,013