BSAC

The British Sub Aqua Club
Annual Report & Accounts 2005
The Members of Council present their annual report on the affairs of the British Sub-Aqua Club together with the financial statements and auditors' report, for the year ended 31st December 2005.

Operating and Financial review

National Diving Committee
The National Diving Committee (NDC), under the direction of the National Diving Officer, has continued to work on a wide range of projects to keep the Club at the forefront of recreational diving, enabling them to address issues concerning our sport.

In 2005 NDC worked with the Combined Diving Associations to launch the new Boat Handling Course and Diver Cox'n Assessment. This course and the Diver Cox'n qualification were formally recognised by the Maritime Coastguard Agency and significantly the British Sub-Aqua Club (BS-AC) has been made an awarding body of the International Certificate of Competence. This has enabled BS-AC to position itself in the marketplace as a main provider of diver cox'n training and certification in the UK.

NDC have analysed the results from the 'Schools and Resorts Survey' in detail and developed a workable system for delivering BS-AC diver training in the commercial sector. The National Diving Officer, NDC and many others have written a range of new materials, re-designed the website www.divebsac.com and re-launched our products commercially under five BS-AC Centre categories, Diver Training Centre, Premier Centre, Centre of Excellence, Technical Centre, Seamanship Centre and Resort Centre. Since the launch in November 2005, there has been an overwhelming response from diver training and seamanship centres worldwide, all recognising the value and quality of the BS-AC training programmes. In the subsequent three months, interest has grown and we have recognised over 30 entirely new BS-AC Centres in addition to the 150 Centres already registered.

NDC also delivered our latest book 'Seamanship: a guide for divers' which was published in 2005. Illustrated with many detailed diagrams and colour photographs this book is a comprehensive manual covering every aspect of seamanship a diver coxswain is ever likely to require. The book covers boat terminology, knots, charts, weather, boat handling, engine basics, VHF operations etc. and is written for all boat owners and divers using RIBs. Sales for the year have exceeded expectations with growth set to continue for 2006.

BS-AC Travel Club
Our BS-AC Travel Club continues to develop with the popularity of the website at www.bsactravelclub.co.uk increasing, thanks to the Preferred Travel Partner (PTP) scheme which came into operation at the start of the year. Dive Worldwide, Peter Hughes Diving, Touchdown Collection, Harlequin Worldwide Travel, Regaldive, and Hayes and Jarvis have all joined the scheme which offers BS-AC members special membership discounts on holiday bookings from six very different diving holiday companies. Members who register are updated through the BS-AC Traveller newsletter on all the special BS-AC discounts available from our partners.

Branch Marketing Initiatives
The Branch Marketing Pack was updated in 2005 adding extensive reports and examples on its use within branches, along with good ideas to attract more members into the British Sub-Aqua Club. Council support and recognise the value and contribution made by every branch member to retain, acquire and develop membership.

Maintaining our commitment to branch marketing initiatives, we launched the 'Branches in Touch' campaign to capture more information about the capabilities, needs and aspirations of member branches. By understanding more about our branches, we will be able to ensure that the services we provide are relevant to members. When this on-line survey closed over 500 of our diving and snorkelling branches had responded. The results are now being analysed and will influence our strategic thinking from 2006 onwards.

BS-AC's annual Come & Dive 2005 event was our biggest campaign yet, and re-vamped for its tenth anniversary due to the generous sponsorship and support received from the Cayman Islands Department of Tourism. This nationwide event continues to generate tremendous interest and branch involvement. We are grateful to the 208 branches who participated in the event. Through their efforts there were approximately 605 Come & Dives which resulted in almost 250 new members recorded as joining the Club.

Project Neptune
A major development for the Club was the launch of Project Neptune to replace our ageing membership databases at HQ with a new and fully integrated Membership Relationship Management system. Representing a significant investment of resources, HQ staff carried out extensive research into this market and our requirements. The project team visited membership exhibitions, other membership organisations and networked with other National Governing Bodies to understand their experience of implementing similar membership systems. Internal consultation was equally as extensive involving HQ staff, Council, NDC, Regional Coaches, Instructors, and other volunteers. The result of all this research was a detailed internal scoping document. After which supplier negotiations were undertaken and a suitable system was chosen for implementation.

It is our aim to be able to offer members a more efficient and effective service. With Project Neptune in place we will be able to communicate in a more direct and targeted manner and keep members updated about specific areas of interest concerning BS-AC's activities. Our HQ service will be more efficient with member records easier to update with less internal duplication. For branch secretaries we will in due course be able to offer online servicing of branch membership records and a direct debit renewal facility if required.

Project kick-off was October 2005 and to date the implementation has run smoothly, to plan and to budget. Phase 1 covers the main relationship management system and membership module, and goes live in January 2006. The remaining phases will be rolled-out during 2006.

Launch of BS-AC Forums
In December 2005 we launched our new BS-AC Forums service, available at www.bsacforum.co.uk. These forums provide a chat room for all members of every grade. There are individual forums for branch officers and branch committee members, areas for Coaching, ITS teams, National Instructors and First Class Divers. There are over 1,000 registered members and with a growing list of special interest groups this service is rapidly developing as a major channel of communication for the Club.

The 2005 AGM
Heinke Trophy winners Kingston & Elmbridge Sub Aqua Club hosted the Clubs 51st Annual General Meeting in May 2005. This award was made to the branch judged to have done the most to further the interests of its members and those of the BS-AC. Winners for 2004 Kingston & Elmbridge are to be congratulated for organising a highly successful AGM. At that meeting a motion to reduce the minimum age for Junior Diving Members to 12 years old was supported by a majority of 63%. NDC guidelines on enabling young people to dive and train are available online. Council looks forward to the forthcoming 2006 AGM hosted by Leicester Underwater Exploration Club as current Heinke Trophy winners.

Financial Performance

Membership numbers and income have continued to show a gradual decline in 2005. This represents a continuation of membership trends from previous years and reflects a general weakness experienced elsewhere within the industry.

Income from operational activities was down 4.9% (£118k) at £2.31 million. Membership subscriptions, the main source of income for the Club, were down 1.4% (£19k) to £1.34 million. Retail sales from the BS-AC shop, exhibitions and events were subdued with income lower by £42k and overseas royalty income was also reduced by £34k.

Throughout the year levels of expenditure were reviewed and particular attention paid to constraining expenses and overhead costs in line with the falling income trend. One area reviewed was the cost of looking after and servicing our members. Here we achieved savings of £64k by, for example, renegotiating our magazine mailing house contract.

In October 2005 BS-AC kicked-off Project Neptune as a major investment for the Club in its membership support infrastructure. The value of project expenditure for the three months to December 2005 was estimated at £30k. It is the Club's policy to write off development expenditure in the year it is incurred so reported expenditure has increased by this amount. Overall operational expenditure for the year was down 1.3% (£32k) at £2.38 million.

Over the year our working capital position improved by £55k which helped to offset the £70k operational deficit. Cash in the period decreased by £9k and thus reduced our net cash position to £83k.

In May 2005 an existing 10 year licence agreement with Japan was cancelled. This transaction is reflected in the accounts under 'Exceptional Overseas Income' and has the effect of increasing reported income by £149k. For comparison, in the previous Annual Report & Accounts this amount was shown under Creditors as 'Deferred Japan Licence Income'.

During the year there was a change in accounting policy which resulted in the restatement of reported figures for 2004. This change relates to the way in which BS-AC recognises its subscription income and was made to bring our policy in line with accounting best practice. Details of this change are described in the notes to the financial statements under Note 1b, Subscriptions.

Reported performance of the British Sub-Aqua Club on ordinary activities and after taxation for the year to 31st December 2005 was an overall surplus of £29k, and compares with a deficit of £8k (as restated) in 2004.

Financial summary

As at 31-Dec-05	2005	2004Restated	2004Reported
Subscriptions	£ 1,340k	£ 1,359k	£ 1,355k
Members	35,235	38,490	38,490
Income	£ 2,311k	£ 2,429k	£ 2,425k
Expenditure	£ 2,381k	£ 2,414k	£ 2,409k
Operating Surplus (Deficit)	£ (70)k	£ 15k	£ 16k
Surplus (Deficit) on Ordinary Activities	£ 29k	£ (8)k	£ (7)k
Working Capital + ( - )	£ 55k	£ (174)k	£ (174)k
Net Cash at year-end	£ 83k	£ 91k	£ 91k

Outlook
Over the past few years the UK Diving industry has been challenged by deteriorating business conditions. Consumer habits are different and markets have changed. The traditional description of a UK Diver, and likely member of the British Sub-Aqua Club, has shifted. Increasingly individuals take up diving as one of a range of activities experienced for a short period of time before moving on to something else. New divers often take to the water for the first time abroad and are less inclined to continue when faced with conditions in UK waters.

Even in this climate, as the Governing Body for Sport Diving in the UK, the British Sub-Aqua Club can play a key role within the industry. With the implementation of Project Neptune progressing well, we will be able to establish closer and more meaningful relationships with our members. A deeper understanding of our members will assist in identifying interests, trends and preferences, around which we can focus efforts to retain, acquire and develop our membership.

The British Sub-Aqua Club is under the same pressures and influences as elsewhere. Market conditions are likewise reflected in a falling membership trend, which in turn impacts our income and expenditure. The needs of divers are changing and Council are focused on meeting the challenge.

Our budgets for 2006 reflect our not-for-profit status and have been prepared on a conservative basis, predicting similar falls in membership with continued volume and inflationary pressures on expenditure. Benefits realisation from Project Neptune for the club and all members will be significant and will be factored into our future plans when it becomes sensible do so.

The British Sub-Aqua Club is a club for all divers and to be regarded as the best diving club in the world remains at the core of our strategies.


Accountability and Audit

Financial reporting
BS-AC operates a procedure for the development of annual operating budgets. During the final quarter of each financial year, a detailed budget is prepared for the following year. The budget is reviewed by Council before being adopted formally. Operating results are reported monthly and presented to Council for review. The results are compared to budget and the previous year, with full-year forecasts prepared and updated throughout the year.

BS-AC operates a system of internal control, which is maintained and reviewed in accordance with recommended best practice as applied to smaller companies by the Companies Act 1985. Council (which receives recommendations from the Audit Committee) is responsible for the group's system of internal controls and for reviewing their effectiveness. The system is designed to manage rather than eliminate the risks associated with achieving business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.

Every year the accounts of BS-AC are examined to ascertain the correctness of the income and expenditure account and balance sheet statements by a suitably qualified firm of Auditors. The external auditors review BS-AC's accounts and supply information to Council on issues for their attention in their annual management letter. For 2005 no significant issues were identified concerning BS-AC's system of internal controls.

Policies and procedures governing Head Quarters activities are set out and communicated in BS-AC's Operations Manual. The application of these policies and procedures is monitored on a day-to-day basis by the Operations Manager.

Appointments and Members of Council
2005 was very much a year of transition with the retirement in May of Phil Harrison as Chairman and Maureen Coulthard as Treasurer, and the election of 5 new members: Deric Ellerby, Adrian Hall, Edward Haynes, Bob Healey and Andy Moll. At year end, Council's complement consisted of 15 members under the Chairmanship of Marcus Allen.

Details of Council members who, whether under the Articles of Association of the Company or otherwise, offer themselves for re-election are set out in the notice of Annual General Meeting.

All members of Council are volunteers and as such receive no remuneration, and are required to submit themselves for re-election by members every three years. Their interests are those of an ordinary member.


The names of persons who, at any time during the financial year, were registered as directors of group companies are recorded as:

Members of Council		BS-AC	BS-AC International Ltd
M D Allen
M F G Allen	Chairman
A J Clarke
P M Coulthard		Retired 21.5.05	Retired 21.5.05
D S Dixon
D J Ellerby		Appointed 21.5.05	Appointed 21.5.05
A Hall	Honorary Treasurer	Appointed 21.5.05	Appointed 21.5.05
P M Harrison		Retired 21.5.05	Retired 21.5.05
E Haynes		Appointed 21.5.05	Appointed 21.5.05
R Healey		Appointed 21.5.05	Appointed 21.5.05
R Higgie		Retired 21.5.05	Retired 21.5.05
K T Lawrence
A J H Marshall	Vice Chairman
A Moll		Appointed 21.5.05	Appointed 21.5.05
C Peddie	National Diving Officer
B J Pederson
A Reed
M K Todd	Honorary Secretary

Board effectiveness
Council is collectively responsible for promoting the success of the British Sub-Aqua Club by directing, supervising, developing and implementing policy and strategy, and is responsible to members for the group's financial and operational performance. Day-to-day management issues are delegated by Council to the Operations Manager.

For the year under review, Marcus Allen was appointed as Chairman from 21st May 2005, and as such is responsible for the leadership of Council. During 2005, Council met 5 times formally and held a number of smaller working group meetings throughout the year. All Members of Council are briefed on important developments in the various business activities and regularly receive monthly information concerning the group's operations, performance and finances.

Audit committee and auditors
Meetings of the Audit committee, of which there were two during 2005, were attended, in whole or in part, by Ian Irvine (Chairman), Ernie Crook, Harry Gould, John Betts and by Wendy Davies (Secretary), and by invitation the Auditors, the Honorary Treasurer and the Operations Manager.

This year the work of the committee included:

* monitoring the integrity of the BS-AC's financial statements and reviewing significant financial reporting decisions;
* reviewing internal system control activities;
* the review and recommendation to Council regarding the appointment of the external auditors and approval of their remuneration and terms of engagement; and
monitoring the external auditors' independence, objectivity and effectiveness.

During the year particular attention was given to the appointment of new external auditors. In July 2005 BS-AC was notified by Bennett Brooks & Co Limited that key staff involved in previous BS-AC audits had left their employment and a new audit team was proposed. It was decided to take this as an opportunity to invite Bennett Brooks & Co Limited to re-tender in competition with two other firms. Following a number of interviews and presentations the Audit Committee made a recommendation to Council to appoint Gardner Salisbury as BS-AC's new external auditor. The terms of reference for the audit committee and the qualifications of members are available on request.