Other topics covered include: President seeks members' support for corporate governance plans; AGM adopts revisions to Code of Ethics; Presentation of fellowship certificates; and AGM rejects "witch-hunt" motion on flat purchase
The Royal Pharmaceutical Society's balance sheet remained strong despite a deficit of £75,000 in 1999, the Society's TREASURER (Dr Gordon Appelbe) told the annual general meeting.
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The Treasurer: the financial results reflect the Society's successes |
The income and expenditure account for the Society for 1999 continued to reflect the Council's decision to support practice research and analyses for the first-time expenditure by the new organisational directorate. During 1999 there had been significant increases in the Society's expenditure on practice research, up 108 per cent from £250,000 to £522,000, and public affairs, up 67 per cent from £294,000 to £491,000.
The costs of the professional activities as a whole were up 15.4 per cent at £12.7m. Income was £10m, of which only £5.7m came from members' and premises fees. With the publication of the new edition of Martindale, the Publication Directorate had achieved revenue of £11.5m against expenditure of £9m. That was a real success.
The accounts as published now reflected the considerable increase in the scope and scale of the Society's activities and recognised initiatives taken in web technology and membership services.
During 1999 substantial efficiency savings had been generated in buying electricity, gas and telecommunications. The Director of Resources would continue to undertake value-for-money exercises across the Society.
Recognising the need for accountability, transparency and probity, a new system of controlling Council expenses had been introduced from April 6, 2000. At the 1999 AGM, the then Treasurer (Professor Geoffrey Booth) had advised that the Byelaws would require change and that representation would be made to the Privy Council for a substantial increase in the attendance allowance, which was to be associated with fully receipted and reimbursed expense claims.
Recognising the question of corporate governance, the Treasurer last year had also advised that the Council would be considering during 1999 the need for the establishment of an audit committee. The working party set up by the Council had been considering this matter and an audit committee was to be established with authority to investigate any activity it deemed appropriate (see p764. The committee would also be authorised to engage any firm of accountants, lawyers or other professionals, as it saw fit, to provide independent advice to the Council and to assist in any review or investigation of such matters as the committee deemed appropriate. These levels of authority followed the combined code on corporate governance that now operated in the corporate sector of the United Kingdom economy.
The Treasurer went on to say that he was happy to report the success of the development of Birdsgrove House and Hope House, both in relation to their activities and also financially, as it was expected that financially the development would reach break-even point in the current year - one year ahead of target.
A full set of accounts had been circulated as a supplement to The Pharmaceutical Journal of April 29, and further copies were available on request from the Director of Resources.
Looking forward, the Treasurer said that in the current year's budget, again a negative one, the membership and premises fees only represented 24.6 per cent of the Society's income whereas the publishing activities represented about 56.4 per cent. (The remaining 19 per cent came from "incidentals" such as examination fees and adjudication fees.) There was a worry concerning the potential effect that electronic commerce might have on the Society's publishing activities. The Council was already considering this as a matter of urgency.
Concluding, the Treasurer said: "The Council will continue to invest in the Society's future through appropriate financial policies and up-to-date systems. We are working hard to provide effective reporting and services for members and students, and we recognise that commerce is increasing globally and technology is changing the face of the way we work.
"The Council's priority in the financial area is to ensure that the Society is effective today and prepared for tomorrow."
The VICE-PRESIDENT (Mr Marshall Davies) seconded the adoption of the financial statement.
Mr MICHAEL JEPSON (Birmingham) asked about the time schedule used by the Society to pay accounts. Did the Society have a target for the time that elapsed between the submission of accounts and their payment and, if so, what percentage of accounts were successfully paid within that target time?
Mr DENIS ARGENT (Director of Resources) said that the Society had a fortnightly run of a payment cycle. If an account was received within the first week, it should be paid by the third week through the banks' automated clearing system. Obviously, from time to time there were delays, but that was the normal procedure. As to the percentages, he would have to investigate that further, but he could provide the information within seven days.
Mr JEPSON said that he had asked the question because, when running the Society's only surviving postgraduate diploma course, at Harper Adams agricultural university college in Shropshire, he had found that the bill had not been paid after more than two months. To receive reminders from an institution that was extremely helpful had caused him some embarrassment.
He also had a question related to the income and expenditure account, where reference was made to the Society's Scottish and Welsh Executives. Did the expenditure increase of almost £100,000 reflect developments in Scotland and Wales?
Mr ARGENT replied that there had been no material increase in expenditure in 1999 in relation to the Scottish and Welsh Executives apart from the secretarial element. There had been a substantial increase in Council activity in 1999. He could make available specific information such as the breakdown of Council expenditure, Scottish Executive expenditure and Welsh Executive expenditure.
The PRESIDENT added that there had had to be an increase in activity in Wales and Scotland to meet the new needs of the Welsh Assembly and Scottish Parliament.
Mr ARGENT added that the expenditure for 1999 in all three areas had been very much in line with the budget agreed by Council in the previous year.
Mr GRAEME MILLAR (chairman, Scottish Executive) said that the big difference in Scotland was that the Scottish Parliament had total responsibility for health, which one would expect to result in an increase in resources to support pharmacies, lobbying and representation to that Parliament. It was to the credit of the Society's Scottish Executive that it had managed to keep within budget. The executive had worked very closely with Lambeth to minimise the cost increase. But there were 129 members of the Scottish Parliament who talked about health for 60 per cent of their time, unlike those in the Westminster Parliament, so that used up a fair bit of the resource.
MR HOWARD FOX (Dorset) said that the accounts reported an increase in salaries between 1998 and 1999 of £500,000, which represented superficially an 8 per cent increase. Was it possible to get a breakdown of how that increment was incurred?
The TREASURER said that the salary increase generally had been of the order of 6.5 per cent, with the remainder of the total increase being taken up by an increase in staff numbers.
Mr FOX asked whether the 6.5 per cent was across the board or had there been higher increments and lower increments.
Mr ARGENT said that the increase in salaries for secretarial and clerical staff as at June 1, 1999, had been based on the data within the London market at January 1, 1999. That had effectively amounted to a 5 per cent pay award. For management and directors, the basic pay award had been 6 per cent.
The difference between those figures and the overall increase across the board of 6.5 per cent was effectively the Society's performance and merit awards. There was an ability to receive a maximum performance related pay award of 3 per cent, so the very maximum that any member of staff would have received - and it would only have been two or three members of staff in 1999 - would have been 9 per cent if they were management or directors or 8 per cent if they were administrative or secretarial staff.
Mr ROGER PHILLIPS (Birmingham) asked why it took so long for members' annual retention fee cheques to be cleared and receipts to be received. In the first case, the Society was obviously losing interest on the fee income, and in the second case employee members who wished to reclaim the money could not do so until they received a receipt.
The TREASURER said that there had been a particular difficulty with information technology during the first few months of the current year and he appreciated that receipts had been sent out very late.
Mr PHILLIPS said that it had happened for the past two years. In 1999 it had been the middle of March before the first receipts were sent out out. This year had been roughly the same. He asked that the matter be looked at.
The PRESIDENT said that it obviously needed to be looked at.
There being no further questions, the financial statement was put to the meeting and was adopted.