THE BRITISH CHAMBER OF COMMERCE FOR ITALY

(INCORPORATED)

REPORT OF THE COUNCIL FOR THE YEAR ENDING 31 DECEMBER 2014

Members of the Council are regarded as Directors for the purposes of the Companies Act.

The Councillors have the pleasure of submitting the Report and Accounts of the Chamber for the year ended 31st

December 2014.

Principal activities

The British Chamber of Commerce for Italy is a private non-profit organisation whose mission is to assist and

encourage the development of trade and investment between the United Kingdom and Italy and to support and

promote the interests of its members’ commercial activities.

We work closely with UK Trade and Investment and the British Consulate General in Milan, as well as with the British

Embassy in Rome. Founded in Genoa in 1904, the Chamber’s head office is based in Milan and regional branches are

operative throughout Italy.

At the year end, the Chamber had a total of 345 members, representing a wide range of Italian and British

companies as well as individuals. The total number of members was 36 up on last year following (ongoing) work on

membership development.

Review of activities

As mentioned last year, in early 2014 a Special General Meeting agreed to change the bylaws of the Chamber in

order to extend the mandate of the management team (the President, VPs, Treasurer and Councillors) so as to have

more time to finish the process of change which they had initiated, especially in view of the arrival of EXPO 2015.

This process continued in 2014 and, inter alia, saw the departure of our Secretary General, Simona Frignani. We

thank her for her contribution over the last 6 years and wish her well for the future.

At the heart of our vision for the future was what was illustrated at the time by reference to the British Olympic

Rowing Team’s leitmotif (“Does it make the boat go faster?”) which had driven their quest for gold at the last

Olympics. Our objective was, and remains, to put membership at the centre of our activities by looking at all we do

through the question: “Does it help us grow (and keep) members”.

Not everything has gone quite as expected but I believe that we are in a better place than we were and well

positioned to get the most out of the next 5 months of EXPO and the rest of 2015.

The number and variety of high quality events continued in 2014 and included:

o 10 tax and legal seminars and workshops.

o 11aperitifs and social & cultural events.

o A sustaining members dinner with Michael Fallon, at the time UK Minister of State for Energy, the

Department of Energy and Climate Change, and a sustaining members lunch with Douglas Flint,

Chairman HSBC Bank Plc, in his capacity as UK Business Ambassador. We also hosted a round table

event at Palazzo Cusani for Mark Boleat, Chairman of the City of London’s Policy and Resources

Committee.

o Another Gala Dinner at Villa D’Este to raise funds for research into Children’s leukaemia with the

Charity, Comitato Fiori di Lavanda.

o Two highly successful golf days – in July at Le Rovedine and in September at Menaggio.

o Four other events dedicated to Sustaining Members, amongst which a high profile event with Jaguar at

their Flagship store in Milan.

o A series of successful Business Lunches in Milan (13) - we have continued to be graced with a range of

high quality Guests of Honour and Speakers. We also ran another lunch at the Villa Wolkonsky in Rome

with HMA as our host and speaker.

o Another successful “Women in Business” event in conjunction with UKTI, this time in Naples. This was

preceded by a business event at the British Consulate in Naples, hosted by Tim Flear at which Salvatore

Tramontano also presented the BCCI to a group of local business men and women.

o Continuing valuable contributions from ELCS and IPEC.

During the year we also welcomed Kate Taylor as our new Honorary Regional Secretary for Tuscany, Steven Taylor as

Honorary Regional Secretary for London and Kitty Bruce-Gardyne as Honorary Regional Secretary for Scotland.

As commented in December 2014, whilst we continue to present a wide range of excellent networking events, we

still have more to do in bringing business leads to our members and in reinforcing our position as the Voice of British

Business in Italy. We are not doing a bad job, but we can do more to help companies from the UK and elsewhere

establish a presence in Italy. They need advice on legal, fiscal and logistical matters and our members are ideally

placed to provide this. We can also help companies that are having difficulties with unfair practices or other

obstacles to investing in Italy. We should also be engaging with the BCCs in the UK and making better use of the

COBCOE network around Europe to attract new members and to bring opportunities to existing ones. The highly

successful joint Chambers events we have run in Milan also underline the fact that there is much more to do with

organisations that share our objectives. Finally, strong partnerships with British and Italian institutions remain

crucial and in my last year as President I want to again build on these, particularly with UKTI with whom we continue

to work extensively.

Councillors During the year Sebastian Buca, Giuseppe La Naia (previously Councillor till 2012) and Matt Parkinson were elected

as Councillors.

We would like to thank all our Councillors who continued to support the Chamber throughout 2014. Special thanks

go to Jim O’Gara and Vic Annells who both left Italy to take up new appointments elsewhere, and to John Murphy,

BCCI President from 1998 to 2002 who resigned his office as Honorary Councillor. We extend a warm welcome to

Tim Flear, new HM Consul General and Director for UK Trade & Investment.

We are sorry to report the death on 28th

April 2014 of Cavaliere del Lavoro Pier Carlo Marengo who was a mainstay

of the BCCI for many years – first as a Councillor and latterly as an Honorary Councillor – and was constant in his

support for the Chamber.

Staff

Our sincere thanks goes as ever to the Chamber staff who have demonstrated their strong commitment and ability

to act positively during a period of important changes in a difficult economic environment. As mentioned above,

Simona Frignani left the Chamber towards the end of 2014 and was replaced (in early April 2015) by Sofia Astrid

Pennacchi who has made an excellent start. During the year we welcomed Simona Cordovani as new Accountancy

& Administration Manager. We wish all the best to Peter Riley who returned to England.

Financial review

The year to 31st

December 2014 ended with a loss of €49,640 (2013 - profit of €683).

This loss arose primarily from the costs associated with the settlement reached with a former employee amounting

to €37,437 and €8,507 incurred in connection with the development of the Chamber’s new web site.

It is worth noting that the results from the core activities of the Chamber (membership quotas, sponsorships, events

and seminars) reported a loss of €3,696 in 2014 compared with losses of €16,126 in 2013 and €20,224 in 2012. Final

results for 2012 and 2013 were substantially breakeven due to the margin earned on one specific UKTI project,

“Fancy a cup of coffee”. The UKTI project conducted in 2014, “Women in business”, closed in breakeven.

Income overall decreased by €38,166, of which €34,976 relate to a decrease in revenues from UKTI projects and

€3,065 to less financial income.

Staff costs (€202,706) increased by €24,978 compared with 2013 (€177,728) though 2014 costs include the

settlement cost mentioned above. Given the overall result for the year, no staff bonus was recognised in 2014, a

saving of €7,000.

Other expenses decreased by €13,163. Project costs decreased by €18,186, whilst legal expenses incurred in

connection with the afore-mentioned settlement amounted to €3,437 and costs incurred for the new web site

amounted to €8,507. Consequently, the net impact of all other costs and expenses was a decrease of some €6,916.

The Chamber continues to enjoy a good liquidity position, reporting a balance of cash and cash equivalents of

€284,525 at 31st

December 2014 compared with €311,144 as of the previous year-end. This position has

deteriorated in the four months ended 30th

April 2015 to €215,302 mainly as a result of the settlement of creditors

as of 31st

December 2014, net of the collection of debtors (€71,107).

The accumulated fund of the Chamber amounts to €110,188 as of 31st

December 2014 compared with €159,828 as

of 31st

December 2013, as a result of the loss for the year of €49,640.

In conclusion, the negative results reported for the year ended 31st

December 2014 were primarily the result of

special items. The challenge facing the Chamber for 2015 is to return to a substantially breakeven position. Chamber

Directors have been dedicating significant time and effort in the development of an interesting programme for 2015,

taking advantage as much as possible of the opportunities offered by EXPO.

Directors

The members of the Council for the whole or part of the year were:

John J Law Colin Jamieson

Martin Pugsley Roger King

David Crackett Victor Annells

Donatella Cungi Matt Parkinson

Paolo Gibello Lesley Jackson

Pier Carlo Marengo Jim O’Gara

Sharon Reilly John Stewart

Steven Taylor Andrew Thompson

Fabrizio Zucca Tim Flear

Sebastian Buca Giuseppe La Naia

On behalf of the Council,

________________________________ ________________________________

John Law Roger King

President Treasurer

Directors' responsibilities

The Directors are responsible for keeping proper accounting records which disclose with

reasonable accuracy at any time the financial position of the Chamber 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 Chamber and hence for taking reasonable

steps for the prevention and detection of fraud and other irregularities.

Statement of Disclosure of Information to Auditors

STATEMENT OF DIRECTORS’ RESPONSIBILITIES FOR THE ACCOUNTS

Company law requires the Directors to prepare financial statements for each financial year

which give a true and fair view of the state of affairs of the Company (“the Chamber”) and of

the profit (surplus) or loss (deficit) of the Chamber for that period. In preparing those financial

statements the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• 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 Chamber will continue in business.

In the case of each of the persons who are Directors at the time of approval of this report:

a) so far as the Directors are aware, there is no relevant audit information of which the

Chamber’s auditors are unaware;

b) each Director has taken all the steps that he/she ought to have taken as a Director in order

to make himself/herself aware of any relevant audit information and to establish that the

Chamber’s auditors are aware of that information.

Notes 2014 2013

INCOME

Subscriptions:

- Members 234.194 236.892

- Foreign English Language Schools 45.057 43.772

Services 3 96.745 130.434

Net financial income 4 2.134 5.199Total income 378.131 416.297

EXPENDITURE

Staff costs 5 202.706 177.728

Cost of services rendered 6 77.012 80.953

Premises 62.727 63.323

Professional services 7 24.864 16.757

Project costs 8.935 27.121

Stationery and communication 7.427 8.525

Depreciation 2.419 4.694

Other 8 35.913 31.086

Total expenditure 422.003 410.188

Surplus (Deficit) for the year before (43.872) 6.109

STATEMENT OF INCOME AND EXPENDITURE AND ACCUMULATED FUND FOR THE

YEAR ENDED 31 DECEMBER 2014

Euro

Surplus (Deficit) for the year before

taxation

(43.872) 6.109

Less: taxation 9 (5.768) (5.426)

Income (Loss) for the year (49.640) 683

Accumulated fund at 1 January 159.828 159.145

Accumulated fund at 31 December 110.188 159.828

The notes 1 to 18 form part of these accounts

_____________________________ _____________________________

John Law Roger King

President Treasurer

Notes 2014 2013

Fixed and intangible assets 10 4.411 6.830

Current assets;

Investments 11 150.681 207.341

Debtors 12 56.420 24.360

Cash at bank and in hand 13 133.844 103.803

340.945 335.503

Less: creditors 14 201.940 137.951

Net current assets 139.005 197.552

Total assets less current liabilities 143.416 204.383

Provision for employee leaving indemnity 15 33.228 44.555

Net assets 110.188 159.828

Represented by;

Accumulated fund 110.188 159.828

BALANCE SHEET AT 31 DECEMBER 2014

Euro

The notes 1 to 18 form part of these accounts

_____________________________ _____________________________

John Law Roger King

President Treasurer

2014 2013

Surplus (Deficit) for the year before taxation (43.872) 6.109

- Interest income (2.134) (5.199)

Non-cash items

- Depreciation charge 2.419 4.694

(11.326) 8.708

Changes in working capital

- (Increase) Decrease in debtors (32.060) 21.596

- Increase (Decrease) in creditors 63.989 (5.004)

- Taxes (5.768) (5.426)

Net cash inflow from operating activities (28.753) 25.478

Cash flow from investing activities

- Dismissal/(Purchase) of fixed assets, net 0 (2.851)

Cash flow from financing

2.134 5.199

- Charge / (Net payment) for employee termination indemnity

- Returns on investments and servicing of finance

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2014

Euro

Cash items arising from non-operating activities

(26.618) 27.826

311.144 283.318

284.526 311.144

_____________________________ _____________________________

John Law Roger King

President Treasurer

Net (decrease)/increase in cash and cash equivalents

Balance of cash and cash equivalents at 1 January

Balance of cash and cash equivalents at 31 December

The notes 1 to 18 form part of these accounts.

2. ACCOUNTING POLICIES

Fixed assets

Office equipment

Office furniture

1. BASIS OF PRESENTATION OF THE ACCOUNTS

The accounts are prepared on the going concern basis under the historical cost convention

and are based on the Chamber's accounting records used for taxation and other purposes in

Italy. The Articles of Association of the Chamber were amended by Special Resolution on 12

March 2014. Such amendments included the provision that the Accounts be prepared in

accordance with International Financial Reporting Standards in compliance with Section 395

(1) (b) of the Companies Act, 2006. Previously the acounts were presented to conform to

accounting principles generally accepted in the United Kingdom and the Companies Act 2006.

The change to IFRS did not result in any adjustments to balances previously reported.

The principal accounting policies, which have been applied consistently, are set out below.

Fixed assets are stated at cost less accumulated depreciation.

Depreciation is calculated using the straight-line method at a rate estimated to write-off the

cost of the asset over its expected useful life, which can vary between three and eight years.

Depreciation rates applied are as follows:

20%

12%Office furniture

Investments

Debtors

Foreign currencies

Income

Debtors are stated at net realisable value.

Investments comprise of a time deposit with a bank and are stated at nominal value which

corresponds to the net realizable value, inclusive of interest accrued.The investments are readily convertible into cash and are therefore considered liquid

resources for the purposes of the cash flow statement.

Interest is entirely paid at maturity and it is not recognized in case of earlier reimbursement.

Transactions in foreign currencies are translated at the exchange rate ruling at the date of the

transaction. There are no monetary assets and liabilities shown in the balance sheet.

12%

Depreciation in the year of purchase is calculated at half the rate shown above.

Income from subscriptions is recognized on an accrual basis. Subscriptions fees collected

and pertaining to the following accounting period are classified as deferred income.

Income from services is recognised in the accounting period in which the services are

rendered.

3. INCOME FROM SERVICES

2014 2013

Examinations 28.229 26.956

Events 37.986 35.029

Seminars 9.000 12.252

Project income 9.793 44.760

Open University 0 115

Web Site services sponsorship 4.400 4.275

English Language Consultancy Service –

advertising and bookings

7.338 7.047

96.745 130.434

4. NET FINANCIAL INCOME

Euro

Euro

Examinations include income from English language exams under the International

Professional English Certificates (IPEC) scheme.

Project income derives from the "Women in Business" initiative carried out for UKTI.

Income from “English Language Consultancy Service – advertising and bookings” (ELCS)

does not include subscriptions relating to the member schools, which are included under the

income from subscriptions from “Foreign English Language Schools”.

2014 2013

Bank interest, net 12 12

Income from investments, net 2.122 5.187

2.134 5.199

5. STAFF COSTS

2014 2013

Salaries 117.150 128.484

Social security contributions 35.205 35.531

Accrual for leaving indemnity (note 14) 9.628 8.708

Other staff costs 40.723 5.005

202.706 177.728

Average number of employees 4 4

Euro

The Other staff costs include the settlement costs reached with a former employee

amounting to some Euro 34.000.

Euro

6. COST OF SERVICES RENDERED

2014 2013

English language services 41.995 41.820

Examination services 27.272 26.300

Events 7.745 12.833

77.012 80.953

7. PROFESSIONAL SERVICES

2014 2013

Book-keeping services 16.234 11.426

Legal fees 3.437 0

Payroll services 2.486 3.122

Audit 2.000 1.500

Health and safety consultancy fees 420 534

Other 287 175

24.864 16.757

8. OTHER EXPENSES

Euro

Legal fees were incurred in connection with the settlement reached with a former employee

and were provided by the legal firm Studio Toffoletto, in which Donatella Cungi, one of the

Chamber's Directors, is a partner.

Euro

8. OTHER EXPENSES

2014 2013

Travel expenses 6.391 8.627

New web site 8.507 0

Publicity expenses 3.676 5.619

Office expenses 5.638 5.978

Software 1.593 2.874

Financial expenses 1.451 1.635

Membership 1.890 2.844

Other expenses, net 6.767 3.510

35.913 31.086

Euro

During the year the Chamber developed a new web site with the help of outside consultants.

9. TAXATION

Office

furniture,

Assets

Cost 1 January 2014 31.387 0

Additions 0 0

Write off 0 0

Cost 31 December 2014 31.387 0

Accumulated depreciation 1 January 2014 24.556 0

Intangible

equipment

10. FIXED AND INTANGIBLE ASSETS

The Chamber is exempt from IRES income tax in Italy on the contributions made by members

by way of annual subscriptions. Income taxes are due on income arising from activities of a

commercial nature. However, no taxes are accrued as the Chamber will have a loss for tax

purposes.

The Chamber is subject also to IRAP tax, the entire amount of which is disclosed under

“Taxation” in the statement of income and expenditure. This is equal to 3.90 per cent of an

adjusted tax base which considers certain expenses, such as staff costs, as non-deductible

for IRAP tax purposes.

Value Added Tax can be recovered on costs relating to commercial activities.

Euro

fixtures and

Accumulated depreciation 1 January 2014 24.556 0

Charge for the year 2.419 0

Write off 0 0

26.975 0

Net book value 31 December 2014 4.411 0

Net book value 31 December 2013 6.830 0

11. INVESTMENTS

2014 2013

Investments 150.681 207.341

Nominal value at 31 December 2014 € 150.000

Accumulated depreciation 31 December 2014

Euro

These investments include € 681 of interest income accrued and consist of:

•  Time deposit - Unicredit being a fixed rate savings deposit

from 16 April 2014 with maturity date 16 April 2015:

12. DEBTORS

2014 2013

Services 33.030 8.646

Other debtors 22.808 14.729

Prepayments and accrued income 582 985

56.420 24.360

13. CASH AT BANK AND IN HAND

2014 2013

Cash at bank 133.317 103.723

Cash in hand 526 80

133.844 103.803

14. CREDITORS

2014 2013

Trade creditors 27.357 9.745

Payroll taxes and social security 5.844 6.320

Tax liability 3.520 0

Accruals 90.807 38.912

Deferred income 74.413 82.974

The increase in Debtor services is due to the billing in December of the services rendered in

connection with the event "Women In Business" and with IPEC exams.

Euro

Euro

Euro

Deferred income 74.413 82.974

201.940 137.951

15. PROVISION FOR EMPLOYEE LEAVING INDEMNITY

Euro

1 January 2014 44.555

Charge for the year 9.628

Utilization (20.955)

31 December 2014 33.228

The movement in the provision for employee leaving indemnity for the year 2014 is as follows:

The increase in the Accruals refers to the deferral of December payroll payments to early

January and the settlement with a former employee.

Under existing regulations and pursuant to labour contracts with its employees, the Chamber

must pay a severance indemnity to all personnel leaving its employment, based on the length

of service and remuneration over the period of employment. The amount of such leaving

indemnity accrued to date with respect to present employees is fully provided for in the

accompanying accounts.

17. CAPITAL COMMITMENTS

18. OPERATING LEASES

2014 2013

50.000 49.433

162.501 210.089

2014 2013

16. EMOLUMENTS OF THE DIRECTORS AND OTHER TRANSACTIONS

In 2014 and in 2013 the directors did not receive any emoluments. As disclosed in Note 7,

during the year legal fees of Euro 3,347 were paid to a legal firm of which one the Directors is

partner and fees for payroll services of €2,486 to a firm in which another Director has an

interest.

Within one year

Between two and five years (*)

Electronic equipment

Operating lease costs:

The Chamber had no significant capital commitments at 31 December 2014.

The total rentals for operating leases, charged as an expense in the statement of income and

expenditure, were € 52.567 (2013 € 51.679) and related to the rental of the premises at Via

Dante 12, Milan and to the lease of some electronic equipment.

At 31 December 2014, the Company was committed to making the following payments under

non-cancellable operating leases:

Office rental

Operating lease costs:

2014 2013

2.930 2.603

8.477 1.104

Operating lease costs:

(**) One lease contract expired in october 2014 and was renewed for a further 5 years to

November 2019; the second one will expire in April 2016.

During the year fees amounting to Euro 2.000 were incurred for services provided by the

auditors.

19. AUDITORS’ REMUNERATION

Within one year

Between two and three years (**)

(*) The office rental agreement expired in March 2013 and was renewed for a further 6 years

to March 2019.