International Code of Conduct for Private Security Providers' Association Geneva

Report of the statutory auditors to the General Assembly of Members on the financial statements 2015

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Report of the statutory auditors on the limited statutory examination to the General Assembly of Members of International Code of Conduct for Private Security Providers' Association Geneva

As statutory auditors, we have examined the financial statements of International Code of Conduct for Private Security Providers' Association, which comprise the balance sheet, profit and loss statement and notes, for the year ended 31 December 2015.

These financial statements are the responsibility of the Board. Our responsibility is to perform a limited statutory examination on these financial statements. We confirm that we meet the licensing and independence requirements as stipulated by Swiss law.

We conducted our examination in accordance with the Swiss Standard on Limited Statutory Examination. This standard requires that we plan and perform a limited statutory examination to identify material misstatements in the financial statements. A limited statutory examination consists primarily of inquiries of association personnel and analytical procedures as well as detailed tests of association documents as considered appropriate in the circumstances. However, the testing of the operational processes and the internal control system, as well as inquiries and further testing procedures to detect fraud or other legal violations, are not within the scope of this examination.

Based on our limited statutory examination, nothing has come to our attention that causes us to believe that the financial statements do not comply with Swiss law and the association’s articles of incorporation.

PricewaterhouseCoopers SA

Philippe Tzaud Jonathan Dadoun

Audit expert Auditor in charge

Audit expert

Geneva, 6 June 2016

Enclosure:

- Financial statements (balance sheet, profit and loss statement and notes)

SERVICE PROVIDER'S ASSOCIATION, GENEVA

BALANCE SHEET AS AT 31 DECEMBER 2015

2015 2014

CHF CHF

ASSETS

Current Assets

Cash 679'746 496'049

Accounts receivable 73'925 -

Prepaid expenses 15'466 113'583

Total current assets 769'137 609'632

TOTAL ASSETS 769'137 609'632

LIABILITIES

Short Term Liabilities

Accounts payable 6'596 26'625

Other short term liabilities 327 24'155

Accruals 6'000 6'000

Deferred Income 114'472 -

Total short term Liabilities 127'395 56'780

Equity

Equity 641'742 552'852

Total Equity 641'742 552'852

Total liabilities and equity 769'137 609'632

INTERNATIONAL CODE OF CONDUCT FOR PRIVATE SECURITY

SERVICE PROVIDER'S ASSOCIATION, GENEVA

2015 2013 / 2014

REVENUES CHF CHF

Contributions

Government Contributions

- Australia - 211'655

- Sweden - 30'089

- United Kingdom - 427'770

- Switzerland 35'527 -

Joining Fees 39'924 147'123

Annual Fees small 86'613 -

Annual Fees medium 115'826 -

Annual Fees large 222'732 -

Total Revenues (Note 1a) 500'622 816'637

Staff Costs -255'167 -101'684

Consulting fees -14'440 -49'568

Travel costs -60'078 -55'219

Other operating expenses -69'349 -52'661

Earnings before interest and taxes 101'588 557'505

Financial income 50 187

Financial expenses -12'748 -4'840

Earnings before taxes 88'890 552'852

Direct taxes (Note 1b) - -

Profit for the period 88'890 552'852

INTERNATIONAL CODE OF CONDUCT FOR PRIVATE SECURITY

PROFIT AND LOSS STATEMENT

FROM 01.01.2015 TO 31.12.2015

INTERNATIONAL CODE OF CONDUCT FOR PRIVATE SECURITY SERVICE PROVIDERS’ ASSOCIATION, GENEVA

NOTE TO THE ACCOUNTS FOR THE PERIOD ENDED 31 DECEMBER 2015

These financial statements have been prepared in accordance with the provisions of commercial accounting as set out in the Swiss Code of Obligations (Art. 957 to 963b CO, effective since 1 January 2013).

1. Accounting principles

The following accounting principles were applied in the preparation of the financial statements:

a. Revenue, government contributions, joining fees (one time entry fee for members to the Association) and annual membership fees are booked on the value date of receipt by the bank;

b. The Association was granted with a cantonal and communal tax (ICC) exemption dated 22 November 2013 for the next 10 years;

c. The Association was granted with a direct federal tax (IFD) exemption dated 22 November 2013 for an indefinite period.

Some comparative figures have been reclassified to be consistent with current presentation.

2. Activities

The International Code of Conduct for Private Security Service Providers Association (ICoCA) is a multi-stakeholder governance and oversight mechanism for the International Code of Conduct for Private Security Providers (“ICoC” or “the Code”). The ICoCA was established in 2013 as an Association under the Swiss Association Law. Its members fall into three pillars: the private security industry, civil society organizations, and governments. Each pillar is represented equally in the ICoCA’s twelve-member Board of Directors.

The ICoCA functions to oversee implementation of the Code by its member private security companies, and to ensure that those member companies are accountable for their performance to the Code when working in complex environments. Oversight is enabled through three principal functions: certification of member companies’ management systems and policies, monitoring and assessment of company operations, and the handling of complaints alleging violations of the Code. These operational oversight and administrative functions of the ICoCA are housed in its Secretariat, located in Geneva and led by the Association’s Executive Director.

3. Summary of 2015

Activities in 2015 focused on the continued design of the operational oversight functions, and increasing the capacity of the Secretariat to implement those functions. The Association obtained General Assembly approval for a Certification Procedure, and hired a new Operations Manager, a Project Assistant and a Consultant to support administrative, design and implementation activities. In addition, the Secretariat completed further advancements to the Association’s IT systems, implemented a customized and secure membership database, and supporting meetings of the Board of Directors and the General Assembly.

The ICoCA Board continued work on design of the Certification, Reporting, and Monitoring oversight mechanisms. In addition, the Board and the Executive Director also continued to promote awareness of the ICoCA and nurture relationships with key stakeholders including clients of the private security industry, members of the broader “business and human rights” community, and states that have executed the Montreux Document. Finally, of note, in May 2015 the ICoCA was entered into the Registry of Commerce of the Canton of Geneva, and thus has all normal legal powers to enter into banking and commercial contracts in its own right.

4. Strategic Objectives for 2016 In 2016, the ICoCA Board will focus on completing the design and beginning implementation of its oversight functions. Principally, the Association will propose improvements to its Certification function, and likewise seek General Assembly approval to implement procedures for its Reporting, Monitoring and Assessment of Performance and Complaints processes. 2016 activities will also continue to involve substantial outreach to commercial and government clients of the private security industry, as well as other NGO and civil society stakeholders, in order to continue to explain and encourage recognition of the value of the ICoCA to its stakeholders. In addition, the Board and the Executive Director will continue efforts to increase membership in the ICoCA, particularly among the CSO and Government pillars, and to strengthen ties with the Montreux Document Forum states and other international organizations. The ICoCA will also seek to complete the process of applying for and obtaining immunities and privileges under Swiss Law, and will employ additional staff to support the operations of its functions commensurate with the pace of their development and implementation. 5. Personnel Costs On the 31st December 2015 the liability to the pension fund amounted to CHF 0 (2014: CHF 6’016.80). The number of full time employees did not exceed 10 people.

6. Risk Management There are no major risks discernible for 2015. The ICoCA's financial situation for the immediate future is solid. However, the ability of member states to contribute to the ICoCA’s future operational needs will likely be affected by the international financial and economic situation, which remains uncertain. Likewise, it is unclear how normal business cycles, as well as continued consolidation in the private security sector will affect the number of member companies. Financial management will, therefore, remain prudent even as the ICoCA grows its core oversight activities. Physically, the ICoCA's growing activities and its potential future expansion of those activities to include monitoring in more remote parts of the world will potentially increase risks for its staff. In addition, as membership grows and takes on greater economic consequences, some risk of litigation involving the Association will increase. While the Association is presently insured against risks to its staff in Switzerland and against the risk of liability on the part of its directors and officers, corresponding insurance coverage will need to continue to be evaluated to ensure that it meets the risks and potential exposures associated with future activities. 7. In-kind Contributions 2015 The Association continued to profit from in-kind contributions provided by the government of Switzerland and DCAF. They amounted in 2015 to CHF 159’623.00 (2014: CHF 548’199.00). They include:

- Salaries and Services CHF 95’000.00 - Other Operating Expenses CHF 64’623.00