CILEx ANNUAL REPORT & GROUP ACCOUNTS 31 DECEMBER 2016 COMPANY REGISTRATION NUMBER RC000850
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTICE OF ANNUAL GENERAL MEETING – 13 JULY 2017
NOTICE IS GIVEN that the ANNUAL GENERAL MEETING of The Chartered Institute of Legal Executives will be held at 3.30pm on Thursday 13 July 2017 at Novotel London Tower Bridge hotel, 10 Pepys Street, London EC3N 2NR. to transact the following business: 1 To receive the Minutes of the Annual General Meeting held on 21 July 2016. 2 The President’s Address. 3 To receive the Accounts of The Chartered Institute of Legal Executives Group for the period ended 31 December 2016, and the Reports of the Council and of the Auditors. Ordinary Resolution: To adopt the Accounts of The Chartered Institute of Legal Executives Group for the year ended 31 December 2016. 4 Any Other Business. Dated: 1 June 2017 By Order of the Council EXPLANATORY NOTES The Meeting Anyone who is registered with The Chartered Institute of Legal Executives (CILEx) may attend the Annual General Meeting and speak on the various items of business, but only Fellows are entitled to vote on the Resolutions. Voting Voting on the Resolutions will be taken on the day of the meeting unless Council decides that a postal vote should take place. The Resolutions The Council of CILEx recommends Fellows to approve the Resolutions, which are explained below. Item 3 is the Resolution to adopt the Accounts of The Chartered Institute of Legal Executives Group for the year ended 31 December 2016. The Accounts are set out in the Annual Report with the necessary Auditors’ reports. This is an Ordinary Resolution. If the resolution is approved, it will take effect at the end of the AGM on 13 July 2017. Further Information Copies of the Charter and Bye-Laws appear on CILEx’s website at www.cilex.org.uk. CILEx is incorporated by Royal Charter – Company Number RC000850
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THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
Xxx FOR THE YEAR ENDED 31 DECEMBER 2016
Contents Notice of Annual General Meeting - 13 July 2017
2
Message from the President of The Chartered Institute of Legal Executives
4
Message from the Chief Executive of The Chartered Institute of Legal Executives
5
Message from the Managing Director of CILEx Law School
6
Message from the Chief Executive of CILEx Regulation Limited
7
Officers and professional advisers
8
Report of the Council
9 to 10
Independent auditor’s report to the members of The Chartered Institute of Legal Executives
11
Consolidated statement of comprehensive income
12
Company statement of comprehensive income
13
Consolidated statement of changes in equity
14
Company statement of changes in equity
15
Consolidated statement of financial position
16
Company statement of financial position
17
Consolidated statement of cash flows
18
Company statement of cash flows
19
Notes to the consolidated financial statements
20 to 36
The Chartered Institute of Legal Executives Benevolent Fund Financial statements 2016 Statement of financial activities
37 to 38
The Chartered Institute of Legal Executives Pro Bono Trust Financial statements 2016 Statement of financial activities
39 to 40
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MESSAGE FROM THE PRESIDENT OF THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
As CILEx President, I want to reflect
to join in with feedback and ideas. I ask you to continue to be invested
on the achievements we have
in CILEx and to help shape our future so that we can see more Judicial
made since June 2016 and to pay
Appointments, more Partners, more CILEx Law Firms and more
tribute to those individuals who
members practicing independently.
have supported me during what
CILEx has been at the forefront of access to the professions and
some have come to consider to be a
equality and diversity for many years and we have achieved this
“difficult” period for CILEx but which
despite the misgivings of our colleagues from the other professions
has enabled us to place CILEx at the
about our members’ qualifications and ability to practice law. Even
forefront of reform.
today, such prejudice and ignorance continue in some areas. CILEx is working hard to improve our marketing and communications so that
No incoming President knows what to expect during their term.
employers, recruiters and our colleagues across the professions are
Although I took up post early and, despite serving most of my term
aware of both our standards and our ethos and I am hopeful that we
without a substantive CEO in place, the support of Council and in
can make significant inroads over the coming years.
particular the senior Council members and from the Group Executive at Head Office has been invaluable. This is particularly so in relation
There is much to do and as I come to the end of my term on Council
to recognising the opportunity we have to put CILEx on a sound and
I am confident that the new structure, changes to the constitution
stable footing for the future.
and reform of qualifications and member-focused services are in safe hands with our incoming President Millicent Grant and those on
CILEx is now best placed to maximise the opportunities of the future
Council who give their time freely to help develop CILEx’s strategic
of legal services and to further entrench and expand the parity our
objectives.
members now enjoy with the rest of the profession. When I first joined Council in 2005 as a Fellow, I could only practice under supervision.
I am proud to hand over an Institute that is financially secure,
Between 2005 and 2012 CILEx worked hard to achieve practice rights,
better-placed to maximise opportunities, listening to the concerns
the Royal Charter and establish CILEx Regulation as our independent
and feedback of our members and continuing to lead the sector on
regulator.
Equality & Diversity and good governance.
I am very proud to have been involved in helping to achieve these
I am also proud that CILEx continues to reach out beyond the
great strides forward but there is more to do. CILEx has a great
membership to the other professions and judiciary and continues
future. Our members have a great future too. Yes, we have had to
to help shape the debate and to deliver best practice for regulation,
learn lessons, some very difficult lessons, to get where we are today.
governance, and the consumer.
As I have travelled around the country meeting members at branch events, I know that there is great frustration and concern around
The future is bright for CILEx and our members and if we are going to
portfolios and we continue to work with CILEx Regulation to improve
thrive it will be because we thrive together – so please, join a special
access to practice rights and entity regulation to our members, but
reference group and join in; join your local branch and join in; respond
there is still a long way to go.
to our governance consultation and join in.
We are looking at improving our qualification offering and our
Many thanks to you all for your support during my Presidency.
membership services and many of you will have had an opportunity
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MESSAGE FROM THE CHIEF EXECUTIVE OF THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
Looking back
We end the year in a much stronger financial position than last
Linda Ford, CILEx chief executive
year, having seen the benefits of the restructure, review of business
officer says:
processes and a buoyant investment market. We have focused more resource focused on customer service, member support and
2016 has been a year of change
product development, ensuring we are able to deliver the new
and improvement. The early part of
strategy.
the year involved embedding our new structure at CILEx head office,
Looking ahead
reviewing our business processes
In 2017 we are looking to establish a solid, stable operating budget
and embarking on a programme
supported by longer term business planning and investment
of reform. This programme was
strategy. Our improved financial position at the end of 2016 enables
designed to ensure that we remain financially secure and can
us to make a substantial capital investment in our infrastructure,
respond to current and future challenges facing both the legal sector
updating our IT systems and modernising our business processes.
and the wider markets in which we operate.
This will enable us to deliver our future strategy and give you access to improved services and new products.
In 2016, we have established a new contact centre aimed at delivering improved customer service through initiatives, such as
We plan to launch our new strategic and business plans in mid
Twitter hashtag #CILExHelp, employer invoicing and more online
2017 and we will be consulting with members about how we plan
resources. New members can now expect to receive a welcome call
to update our qualifications to reflect the changing market and
from the customer services team and we have introduced more
the needs of employers, and on changes to the group company
contact us options for existing members including live social media
structure and supporting governance arrangements.
chats and evening clinics. We are already looking at how we can enhance our membership Our Graduation event was our most successful yet, with 105 new
package to include products and services that will support you as
Chartered Legal Executives, 168 Graduate members and 2 CILEx
you progress through your careers. A new careers and recruitment
Advocates having been recognised.
website will launch in 2017, providing access to key information, tools and support services to help you identify career opportunities,
Earlier this year, we launched our new Tech Level qualification, gained
including finding your next role, gaining promotion, becoming a
approval as an end point assessor for apprenticeships and have
partner in a firm, obtaining practice rights, establishing your own
introduced e-assessment for some of our qualifications.
entity and gaining judicial appointment.
The latter part of the year has provided an opportunity to focus on
I would like to thank both the staff at head office for their hard work
improving our branch network, with a new action plan in place,
over the past year and you, as members, for your continued support
excellent attendance at our branch personnel day and an increased
for CILEx. In particular, those members who have taken the time
presence at branch events. Roadshows have allowed us to meet
and opportunity to engage with us and provide feedback which
many of you in person, and gain a much greater insight into the
will help inform our future developments. I hope that in 2017 more
issues affecting you. This has given us a better understanding of the
of you will join our Special Reference Groups, attend one of our
challenges you face and what we can do to communicate with you
roadshows and get involved in your local branch.
more effectively, improve the services and support we offer and help you embrace the full range of career opportunities available.
We will continue to build on the customer service improvements and member engagement opportunities we have introduced in
October and November have seen our Council consider its vision
2016 and so, in 2017, you can certainly expect to hear from us a lot
and strategy for the CILEx Group in what is a constantly changing
more!
environment, a more challenging market, with a need for even greater separation between the professional associations and frontline regulators. |5|
MESSAGE FROM THE MANAGING DIRECTOR OF CILEx LAW SCHOOL
CILEx Law School
this commitment by studying and passing a number of CILEx Level
For CILEx Law School (CLS) 2016
3 units.
has been a good year. Enrolments
We ensure that each member of the CLS Customer Service Team has
on our distance learning courses
first-hand experience of what it is to be a CILEx student and pass
at Level 3 and Level 6 have been
exams. It means that our students will always speak to someone
buoyant, which has helped us beat
who understands CLS’s courses from a student’s perspective,
our budget target and the previous
something few if any other educational providers can claim.
year.
Much has been said about apprenticeships, so we are proud to boast about our role in the delivery of legal apprenticeships, and
Any surplus CLS makes is put into
can confidently claim to be the biggest (and we believe the best)
the reserves for use by the CILEx
provider in England and Wales. Our success rate for apprenticeship
group for capital projects such as IT enhancements and the like. In
completions is very high, which is unsurprising given the levels of
this regard, each enrolment with CLS ensures that course fees are
support dedicated to learners.
used for the membership’s ultimate benefit. The number of employers asking CLS for help with recruiting and Our work as always is divided between core and non-core activities:
training apprentices has increased substantially in 2016, which
the former comprises CILEx courses, revision days and manuals, and
requires more colleagues to work regionally. We expect this trend
increasingly, apprenticeships.
to continue in 2017 for the benefit of both apprentices and those studying through the traditional CILEx route.
It is difficult to identify exactly why our core business did so well in
On the apprenticeship theme, we have worked in partnership
2016, but part of the reason must be CLS’s investment in learning
with City University to launch the first solicitor apprenticeship. It
facilities, such as the extensive provision of web-based materials,
complements our other work based learning routes that provide
the trialling of webinars and more staff to provide learners with
opportunities for those who cannot afford or do not want to attend
help and support by phone.
university.
To this end we have extended our Customer Service Team opening
Finally, it is important to say a few words about our non-core
hours until 6pm from Monday to Thursday. The new opening
business. This includes courses offered in partnership with De
hours have proved popular, and what started as a pilot is now a
Montfort University, City University and City & Guilds.
permanent feature of how we do business. The De Montfort University GDL and LPC courses have bucked the The reason for the extended opening hours was in response to
national trend and continue to grow, while the first cohort of our
our student survey. Again, our approval levels were excellent, with
LL.B in Legal Practice with City University have started their studies.
93.5% of our learners saying that they would recommend us to a
Completing the City University LL.B in Legal Practice enables
colleague or friend. We’re very grateful to the very many students
students to claim exemption from the whole CILEx qualification,
who responded to the survey and gave us such positive feedback.
while achieving a law degree at the same time.
One feature of our student survey was a deep appreciation of CLS’s
City & Guilds course sales are doing well too, and provide an
staff, and in particular their willingness to go out on a limb to help
excellent entry point for those who are not yet ready to commence
learners.
CILEx Level 3 study or who want to improve their skills as a legal secretary.
To do this CLS’s staff are expected to be professional and knowledgeable, which is why we are committed to staff
All in all, 2016 has been a good year, and we look forward to 2017
development. This year our Customer Service Team demonstrated
with genuine enthusiasm.
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MESSAGE FROM THE CHIEF EXECUTIVE OF CILEx REGULATION LIMITED
CILEx Regulation Limited
As part of our annual Practice Certificate Fee (PCF) setting exercise,
The CILEx Regulation Board
which is the fee that is charged to authorised persons for regulatory
decided that 2016 would be a year
costs, other regulatory activity known as permitted purposes
to consolidate and build on the
and levies for the oversight regulatory framework, we have been
things we have been doing well,
undertaking further work to determine the true cost of regulation.
sharpening our pencil on costs and focusing on the areas which are
At present, we are supported under a number of service level
relatively new to us and still need
agreements by CILEx Group Services for HR, Finance, IT, Marketing
refining as they bed in.
and Communications, Facilities and Procurement. In order to better reflect the cost of these shared services, we are including a Group
Following the introduction of a
re-charge in our 2017 budget. Further work will continue in 2017 to
number of operational improvements to our financial management
undertake unit and activity costing so that we can more accurately
and control systems, we delivered a number of significant
determine the true cost of regulation.
improvements against our 2015 outturn. Notably, the contribution to CILEx Regulation of £78,954 is a significant improvement to the
Having submitted our self-assessment of regulatory performance to
2015 contribution of £514,910. Although we incurred a slower than
the LSB, pleasingly our enforcement function received the highest
expected start to practice rights and entity regulation, our income
level of achievement compared to our peers. We are working to
of £1,233,857 is £244,803 better than 2015. This is due, in part, to
deliver against an Action Plan to either improve our regulatory
the increase in the agreed regulatory proportion of the Practising
performance or continue to meet the standards required.
Certificate Fee income. Our direct expenditure of £344,248 is £135,769 better than 2015, with the majority of activities achieving
Alongside the other legal regulators, we were asked by the LSB to
a lower spend. We recognised that we were spending a sizeable
participate in a costs transparency exercise which resulted in our
proportion of our budget on policy and governance activity, and
commitment to publish a number of core financial metrics from
so we have worked hard to drive down these costs, achieving
2017.
£104,326 reduced spend, as well as introducing more streamlined and efficient processes to deliver these services.
Looking ahead to 2017, our Chair and Board asked us to find 8% savings from the 2017 draft budget, which we delivered in our final
Our total overheads of £968,563 are £55,384 better than 2015.
budget. We expect to see improvements in our income lines arising
This is mainly due to a reduction in staff costs and an increase in
from our authorisation schemes and costs will continue to be
administration costs, which is largely due to the restructuring that
closely monitored and improved upon through a continued review
has taken place.
of our operational processes and arrangements.
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THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
OFFICERS AND PROFESSIONAL ADVISERS FOR THE YEAR ENDED 31 DECEMBER 2016
Company Registration Number RC000850 Council M N Callan (President) M Grant (Vice-President) P R Sherwood (Deputy Vice-President) K Barrett M Bowen E Davies (Retired 21 July 2016) D J Edwards (Resigned 8 June 2016) F Edwards D Ferguson (Resigned 10 May 2016) G Findlay M Foster J Gordon-Nichols (Retired 21 July 2016) B C Hamilton-Bruce (Resigned 20 June 2016) C Jepson F Lister D McLaughlin R G Ralph W Rixon S Silver (Retired 21 July 2016) R Stevens (Appointed 21 July 2016) A Thompson (Appointed 21 July 2016) C Tickner (Appointed 21 July 2016) P M White Company Secretary K Cerski Chief Executive Officer Linda Ford Registered Office Kempston Manor Kempston Bedford MK42 7AB Current Auditor Moore Stephens LLP 150 Aldersgate Street London EC1A 4AB Bankers National Westminster Plc Bedford High St 81 High Street MK40 1NE
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THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
REPORT OF THE COUNCIL FOR THE YEAR ENDED 31 DECEMBER 2016
The Council presents their report and the financial statements of
study manuals and courses for examinations in law and performance
The Chartered Institute of Legal Executives and its subsidiaries (the
of duties as the independent regulator of its members and regulated
“Group”) for the year ended 31 December 2016. The attached report
entities.
and financial statements show the members the results of the Group activities for the year ended 31 December 2016 with comparative
In the Report of the Council in the 2015 CILEx Group Financial
figures for the year ended 31 December 2015.
Statements, it was reported that the start of entity regulation required the creation of the CILEx Compensation Fund (the “Fund”)
CONSTITUTION
and a £1,000,000 loan facility provided by CILEx. The Trustees of the
The Chartered Institute of Legal Executives (“CILEx”, “the Institute” or
Fund considered that these arrangements for consumer redress may
“the Company”) is incorporated by Royal Charter and governed by
not be sufficient in all circumstances. In response to these concerns,
the Charter and Bye-Laws which outline the internal organisation,
the Council and CILEx Regulation Limited agreed to begin work on
constitution and conduct. The Institute is the sole shareholder of
revising the arrangements to make them fully insurance-backed,
two wholly-owned subsidiary companies, which together with the
and this work is now at an advanced stage. This will remove the
Institute, form the Group.
need for the Fund and the loan facility. It is expected that the new arrangements will be in place during 2017.
COUNCIL MEMBERS AND DIRECTORS The business of the Institute is managed by the Council.
The net profit before tax for the Group for the year to 31 December 2016 is £430,984 (2015 – loss of £861,432) after charging £104,865
Council consists of not more than 19 Fellows elected as constituency
restructuring costs (2015 - £324,369).
members and 4 Fellows appointed as specialist members. The results for the year include the Group’s share of the running costs MEMBERSHIP OF THE INSTITUTE
of the Legal Services Board (LSB) as required under the Legal Services
The members of the Institute are Fellows. A Fellow is a person
Act 2007 totalling £143,754 (2015 £181,027).
admitted to membership of the Institute in accordance with the provisions of the Bye-Laws. The Council members are therefore also
The trading results for the year and the Group’s financial position at
members of the Institute.
the end of the year are shown in the attached financial statements.
PRINCIPAL ACTIVITY AND REVIEW OF THE BUSINESS
STATEMENT OF COUNCIL’S RESPONSIBILITIES
The principal activity of the Group during the year was that of being
The Council are responsible for preparing the financial statements in
the professional association and governing body for Chartered Legal
accordance with applicable law and regulations.
Executives, other legal practitioners and paralegals, provision of
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THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
REPORT OF THE COUNCIL (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
The Institute is incorporated by Royal Charter and therefore is not
AUDITORS
subject to UK company law. The Council has elected to prepare
Moore Stephens LLP were appointed auditor of the Company by the
the financial statements in accordance with International Financial
Council and will be seeking the re-appointment at the Annual General
Reporting Standards and to have them audited. The Council are
Meeting.
required to ensure that financial statements are prepared for each financial year which give a true and fair view of the state of affairs and of its surplus or deficit for that period. In preparing those financial
Approved by the Council on 31 March 2017 and signed on its behalf by
statements, the Council, in accordance with best practice, is required K E Cerski
to:
Company secretary • select suitable accounting policies and then apply them consistently •m ake judgements and estimates that are reasonable and prudent • s tate whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements •e nsure that the financial statements are prepared on the going concern basis unless it is inappropriate to presume that the Group will continue in business •p rovide the external auditor with all information required in order for them to complete the audit. The Council is responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with applicable regulations. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Council is also responsible for the maintenance and integrity of the corporate and financial information included on the Group’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS In so far as the Council are aware: - there is no relevant audit information of which the Group’s auditor is unaware, and - the Council have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.
President, Martin N Callan FCILEx, Vice-President, Millicent Grant LLM (Merit), FCILEx, Deputy Vice-President, Philip Sherwood FCILEx
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THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES FOR THE YEAR ENDED 31 DECEMBER 2016
We have audited the financial statements of The Chartered
statements. It also includes an assessment of the significant
Institute of Legal Executives for the year ended 31 December 2016
estimates and judgements made by the Council in preparation of
which comprise the Consolidated and Company Statement of
the financial statements, and of whether the accounting policies
Comprehensive Income, Consolidated and Company Statement
are appropriate for the Group’s and Institute’s circumstances
of Changes in Equity, Consolidated and Company Statement of
consistently applied and adequately disclosed.
Financial Position, Consolidated and Company Statement of Cash Flows and the related notes. The financial reporting framework
In addition, we read all the financial and non-financial information
that has been applied in their preparation is applicable law and
in the financial review to identify material inconsistencies with the
International Financial Reporting Standards (IFRSs) as adopted by
audited financial statements and to identify any information that is
the European Union.
apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the
Our audit work has been undertaken so that we might state to
audit. If we become aware of any apparent material misstatements
the members those matters we are required to state to them in
or inconsistencies we consider the implications for our report.
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
OPINION ON FINANCIAL STATEMENTS
anyone other than the Group or its members as a body, for our
In our opinion the financial statements:
audit work, for this report, or for the opinions we have formed. - give a true and fair view of the state of the company’s affairs as at 31 RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
December 2016 and of its loss for the period then ended; and
As explained more fully in the Statement of Council’s Responsibilities, set out on page 9, the Council is responsible for
- have been properly prepared in accordance with IFRSs as adopted
the preparation of the financial statements and for being satisfied
by the European Union.
that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and
MATTERS ON WHICH WE ARE REQUIRED TO
International Standards on Auditing (UK and Ireland). Those
REPORT BY EXCEPTION
standards require us to comply with the Auditing Practices Board’s
We have nothing to report in respect of the following matters where
(APB’s) Ethical Standards for Auditors.
out engagement letter requires us to report to you if, in our opinion:
SCOPE OF THE AUDIT OF THE FINANCIAL ACCOUNTS
- adequate accounting records have not been kept, or returns
An audit involves obtaining evidence about the amounts and
adequate for our audit have not been received from branches not
disclosures in the financial statements sufficient to give reasonable
visited by us; or
assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an
- the financial statements audited are not in agreement with the
assessment of: whether the accounting policies are appropriate
accounting records and returns; or
to the Group’s and the Institute’s circumstances and have been consistently applied and adequately disclosed; the reasonableness
- we have not received all of the information and explanations we
of significant accounting estimates made by the Council; and the
require for our audit.
overall presentation of the financial statements. Moore Stephens LLP BASIS OF OPINION
Chartered Accountants and Statutory Auditor
We conducted our audit work in accordance with International
London, United Kingdom
Standards on Auditing (UK and Ireland) issued by the Auditing 6 April 2017
Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial
| 11 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES
2016 £ 9,503,540
8,705,503
(2,594,007)
(2,601,479)
6,909,533
6,104,024
(6,645,364)
(7,130,269)
Revenue Cost of sales GROSS PROFIT Administrative expenses
2015 £
Other operating income
5
166,815
164,813
PROFIT/(LOSS) BEFORE TAX
6
430,984
(861,432)
Taxation
7
(75,258)
(34,198)
355,726
(895,630)
PROFIT/(LOSS) FOR THE YEAR OTHER COMPREHENSIVE INCOME/(EXPENSE) Net unrealised gains/(losses) on available-for-sale financial assets
484,214
(415,558)
TOTAL COMPREHENSIVE INCOME/(EXPENSE) FOR THE YEAR
839,940
(1,311,188)
All the activities of the Group are classed as continuing. The Group had no recognised gains and losses other than the results for the year set out above
The notes on pages 20 to 36 form part of these financial statements.
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THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
COMPANY STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2016
NOTES
2016 £ 4,563,418
4,318,839
(1,609,807)
(1,451,680)
2,953,611
2,867,159
(3,201,150)
(4,436,490)
Revenue Cost of sales GROSS PROFIT Administrative expenses Other operating income
5
LOSS BEFORE DIVIDENDS RECEIVED & TAX Dividends received PROFIT/(LOSS) BEFORE TAX
2015 £
6
Taxation PROFIT/(LOSS)FOR THE YEAR
238,292
250,963
(9,247)
(1,318,368)
1,997,678
-
1,988,431
(1,318,368)
(6,108)
-
1,982,323
1,318,368
43,352
(76,570)
2,025,675
(1,394,938)
OTHER COMPREHENSIVE INCOME/(EXPENSE) Net unrealised gains/(losses) on available-for-sale financial assets TOTAL COMPREHENSIVE INCOME/(EXPENSE) FOR THE YEAR
All the activities of the Company are classed as continuing. The Company had no recognised gains and losses other than the results for the year set out above
The notes on pages 20 to 36 form part of these financial statements.
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THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2016
Balance at 1 January 2015 Net losses on available-for-sale financial assets Loss for the year Balance at 31 December 2015 Net gains on available-for-sale financial assets Profit for the year Balance at 31 December 2016
Fair value reserve £
Retained funds £
Total equity £
322,672
6,881,631
7,204,303
(415,558)
-
(415,558)
-
(895,630)
(895,630)
17,395
5,703,458
5,720,853
484,214
-
484,214
-
355,726
355,726
501,609
6,059,184
6,560,793
The notes on pages 20 to 36 form part of these financial statements.
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THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2016
Balance at 1 January 2015
Fair value reserve £
Retained funds £
Total equity £
90,935
1,839,890
1,930,825
(76,570)
-
(76,570)
-
(1,318,368)
(1,318,368)
Balance at 31 December 2015
23,369
121,510
144,879
Net gains on available-for-sale financial assets
43,352
-
43,352
-
1,982,323
1,982,323
66,721
2,103,833
2,170,554
Net losses on available-for-sale financial assets Loss for the year
Profit for the year Balance at 31 December 2016
The notes on pages 20 to 36 form part of these financial statements.
| 15 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2016
Notes
2016 £
2015 £
ASSETS NON CURRENT ASSETS Property, plant and equipment
8
1,914,774
1,989,569
Intangible assets
9
126,235
195,161
Other investments
11
5,609,890
5,039,620
7,650,899
7,224,350
CURRENT ASSETS Inventories
14
10,475
6,786
Trade and other receivables
15
354,872
435,868
279,293
257,820
2,265,284
2,430,413
2,909,924
3,130,237
10,560,823
10,355,237
Prepayments Cash and cash equivalents
16
TOTAL ASSETS EQUITY RESERVES Other reserves
501,609
17,395
Retained funds
6,059,184
5,703,458
TOTAL EQUITY
6,560,793
5,720,853
47,351
49,513
2,521,035
2,936,283
1,431,644
1,648,588
NON CURRENT LIABILITIES Deferred tax payables
17
CURRENT LIABILITIES Deferred income Trade and other payables
18
TOTAL EQUITY AND LIABILITIES Approved by the Council on 31 March 2017 and signed on its behalf by M N Callan President P R Sherwood Chair, Finance & Remuneration Standing Committee
The notes on pages 20 to 36 form part of these financial statements.
| 16 |
3,952,679
4,584,871
10,560,823
10,355,237
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2016
Notes
2016 £
2015 £
ASSETS NON CURRENT ASSETS Property, plant and equipment
8
1,020,307
1,079,303
Intangible assets
9
2,198
3,801
Investments in subsidaries at cost
10
620,398
620,398
Other investments
11
1,224,677
403,170
2,867,580
2,106,672
CURRENT ASSETS Inventories
14
-
487
Trade and other receivables
15
283,879
210,168
90,268
145,243
16
1,732,489
1,441,184
2,106,636
1,797,082
4,974,216
3,903,754
Other reserves
66,721
23,369
Retained funds
2,103,833
121,510
TOTAL EQUITY
2,170,554
144,879
2,129,366
2,673,448
Prepayments Cash and cash equivalents TOTAL ASSETS EQUITY RESERVES
CURRENT LIABILITIES Deferred income Trade and other payables TOTAL EQUITY AND LIABILITIES
Approved by the Council on 31 March 2017 and signed on its behalf by M N Callan President P R Sherwood Chair, Finance & Remuneration Standing Committee Company registration number: RC000850
The notes on pages 20 to 36 form part of these financial statements.
| 17 |
674,296
1,085,427
2,803,662
3,758,875
4,974,216
3,903,754
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2016
2016 £
2015 £
430,984
(891,432)
110,788
111,619
82,123
85,273
(166,815)
(164,813)
6,683
9,522
(105,501)
(266,161)
CASH FLOW FROM OPERATING ACTIVITIES Profit/(Loss) before tax NON-CASH ADJUSTMENTS Depreciation Amortisation of other intangible non-current assets Investment income Loss on disposal of non-current assets Gain on disposal of investments Other non-cash adjustments
(10)
200
NON-CASH ADJUSTMENTS
(72,732)
(224,360)
CASH FLOWS BEFORE CHANGES IN WORKING CAPITAL
358,252
(1,085,792)
3,689
(3,440)
80,996
(165,121)
CHANGES IN WORKING CAPITAL Increase/(decrease) in inventories (Decrease)/increase in trade and other receivables
(21,473)
109,425
(Decrease)/increase in trade and other payables
(682,151)
557,622
(DECREASE)/INCREASE IN WORKING CAPITAL
(618,939)
498,486
(Increase)/decrease in prepayments
(38,569)
43,732
(299,256)
(543,574)
Payments to acquire property, plant and equipment
(36,317)
(27,738)
Payments to acquire intangible assets
(14,013)
(69,373)
(1,545,176)
(2,741,312)
1,562,617
3,471,830
201
3,660
15,075
36,883
Dividends received, classified as investing
151,740
127,930
NET CASH FLOWS FROM INVESTING ACTIVITIES
134,127
801,808
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS
(165,129)
258,306
Cash and cash equivalents as at 1 January 2016
2,430,413
2,172,107
CASH AND CASH EQUIVALENTS AS AT 31 DECEMBER 2016
2,265,284
2,430,413
Tax (paid)/received NET CASH FLOWS USED IN OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES
Payments to acquire available-for-sale investments Proceeds from sale of available-for-sale investments Proceeds from sale of equipment Interest received, classified as investing
The notes on pages 20 to 36 form part of these financial statements.
| 18 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2016
2016 £
2015 £
1,982,431
(1,318,368)
56,165
59,413
2,110
1,696
CASH FLOW FROM OPERATING ACTIVITIES Profit/(Loss) before tax NON-CASH ADJUSTMENTS Depreciation Amortisation of other intangible non-current assets
(18,292)
(26,156)
(1,997,678)
-
(6,683)
4,656
Investment income Dividends from subsidiary (Gain)/loss on disposal non-current assets NON-CASH ADJUSTMENTS
(1,964,378)
39,609
18,053
(1,278,759)
CASH FLOWS BEFORE CHANGES IN WORKING CAPITAL CHANGES IN WORKING CAPITAL
487
185
(Increase)/decrease in trade and other receivables
(73,711)
125,782
(Increase)/decrease in prepayments
(54,975)
5,842
(Decrease)/increase in trade and other payables
(963,374)
710,992
(DECREASE)/INCREASE IN WORKING CAPITAL
(1,091,573)
842,801
NET CASH FLOWS FROM OPERATING ACTIVITIES
(1,073,520)
(435,958)
(3,651)
(18,754)
Decrease in inventories
CASH FLOWS FROM INVESTING ACTIVITIES Payments to acquire property, plant and equipment Payments to acquire intangible assets Payments to acquire available-for-sale investments Proceeds from sale of available-for-sale investments
(1,321)
(1,682)
(776,391)
(219,305)
130,017
924,532
201
822
18,292
2,103
Dividends received, classified as investing
1,997,678
24,053
NET CASH FLOWS FROM INVESTING ACTIVITIES
1,364,825
711,769
291,305
275,811
Cash and cash equivalents as at 1 January 2016
1,441,184
1,165,373
CASH AND CASH EQUIVALENTS AS AT 31 DECEMBER 2016
1,732,489
1,441,184
Proceeds from sale of equipment Interest received, classified as investing
NET INCREASE IN CASH AND CASH EQUIVALENTS
The notes on pages 20 to 36 form part of these financial statements.
| 19 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2016
1. AUTHORISATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE WITH IFRS’S The Institute is a body incorporated by Royal Charter. The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations as adopted by the European Union. The financial statements are prepared under the historical cost convention as modified by the revaluation of investments. Basis of consolidation The consolidated group financial statements comprise the financial statements of the Chartered Institute of Legal Executives and its trading subsidiary undertakings as described in note 10. Subsidiaries are all entities over which the Group has the power to govern financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. Subsidiaries are fully consolidated from the date on which the Group takes control. Where necessary, adjustments are made to the financial statements of the Institute and subsidiaries to bring the accounting policies used into line with those used by the Group. Inter-company transactions and balances between Group companies are eliminated. Adoption of new and revised Standards At the date of authorisation of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective. Standard/Interpretation
Title
Effective date
IFRS 9
Financial Instruments
1 January 2018
IFRS 14
Regulatory Deferral Accounts
1 January 2016
IFRS 15
Revenue from Contracts with Customers
1 January 2018
IFRS 16
Leases 1 January 2019
However, the Council does not expect that the adoption of these standards and interpretations in future periods will have a material impact on the financial statements of the Group. Critical Accounting Estimates and Judgements Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Council makes estimates, assumptions and judgements concerning the carrying amount of assets and liabilities on a prudent basis and are satisfied with the accuracy of these estimates.
| 20 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2016
2. ACCOUNTING POLICIES
date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates
Revenue recognition
prevailing at the date when the fair value was determined.
Subscriptions income is recognised in the period to which it relates and examination fee income is recognised when the examinations to
Gains and losses arising on retranslation are included in net profit or
which they relate take place.
loss for the period, except for exchange differences arising on nonmonetary assets and liabilities where the changes in fair value are
Distance learning course revenue is recognised when the course is
recognised directly in equity.
delivered except when an element of the course is in respect of a revision session to be taken in a future accounting period in which
Pension costs
case that element of the revenue is deferred.
The Group operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those
Agency commission income is recognised on an arising basis in line
of the Group. The annual contributions payable are charged to the
with the agreements in place with the principal.
income statement.
Apprenticeship income is recognised over the duration of the
Taxation
apprenticeship.
Corporation tax arises on the Group’s chargeable gains and investment income less any charitable donations by way of gift
Interest and dividend income is accounted for on an arising basis.
aid and trading profits. Provision is made for deferred taxation to the extent that material timing differences are expected to reverse
All income is recognised net of value added tax.
in future periods. No provision for deferred taxation is included in respect of surpluses on revaluation of property and investments.
Foreign currency exchange Transactions in currencies other than the functional currency of
Segmental Reporting
the Group are recorded at the rates of exchange prevailing on the
A business segment is a group of assets and operations engaged in
dates of the transactions. At each statement of financial position
providing products and services that are subject to risks and returns
date, monetary assets and liabilities that are denominated in
that are different from those of other business segments.
foreign currencies are retranslated at the rates prevailing on that
| 21 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) AS AT 31 DECEMBER 2016
2. ACCOUNTING POLICIES (continued)
cost. Intangible assets acquired as part of a business combination are capitalised separately from goodwill if the fair value can be measured
Property, plant and equipment
reliably on initial recognition.
Items of property, plant and equipment are stated at cost of acquisition or production cost less accumulated depreciation and
The carrying value of intangible assets are reviewed for impairment on
impairment losses.
an annual basis for events or changes in circumstances that indicate that the carrying value may not be recoverable.
Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives, on the following bases:
Intangible assets are stated at cost or fair value on recognition less accumulated amortisation and any impairment in value. Amortisation
Freehold property
Fixtures and fittings IT Equipment
1% on cost
is calculated so as to write off the cost or valuation of intangible assets
10% on cost
over their estimated useful lives, on the following bases:
25% on cost Software
25% on cost
Investments Investments are recognised at cost on the trade date, and are restated
Inventories
on the reporting date at fair value. Unrealised gains and losses
Inventories are valued at the lower of cost and net realisable value.
(including those arising on translation of investments denominated in foreign currencies) are recognised directly in fair value reserves
Trade and other receivables
until the investment is disposed of or is determined to be impaired, at
Trade and other receivables are recognised by the Group and carried
which time the cumulative gain or loss previously recognised in fair
at original invoice amount less an allowance for any uncollectible or
value reserves is included in net surplus or deficit for the period.
impaired amounts.
Investments in subsidiaries are stated at cost less any impairment
An estimate for doubtful debts is made when collection of the full
deemed necessary.
amount is no longer probable. Bad debts are written off when they are identified as being unrecoverable.
Intangible assets Intangible assets acquired separately from a business are capitalised at
Other receivables are recognised at fair value.
| 22 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
2. ACCOUNTING POLICIES (continued)
Operating lease commitments Operating leases payments are recognised as an expense in the
Cash and cash equivalents
consolidated income statement on a straight line basis over the lease
Cash and cash equivalents comprise cash at bank and in hand and
term.
short term deposits. Short term deposits are defined as deposits with an initial maturity of three months or less, but can be drawn upon at
Other reserves
any time.
The other reserve relates to the fair value reserve which comprises the cumulative net change in the fair value of available-for-sale financial
Deferred tax
assets until the assets are derecognised or impaired.
Deferred tax is provided in full, using the statement of financial position liability method, on temporary differences arising between the tax bases of assets and liabilities and the carrying amounts in the financial statements. Deferred tax liabilities are generally recognised for all material taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than as a business combination) or other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. Deferred tax is charged or credited to the consolidated statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax is determined using the tax rates that are expected to apply in the period when the asset is realised or the liability is settled. The carrying amount of deferred tax assets is reviewed at each consolidated statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are offset when they relate to income taxed levied by the same taxation authority and the group intends to settle its current tax assets and liabilities on a net basis. Trade and other payables Trade and other payables are not interest bearing and are stated at Lord Toulson
their nominal value.
| 23 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
3. SEGMENT INFORMATION Year ended 31 December 2016 Membership £
Awards Regulation and Unallocated £ £
Law School
Total
£
Consolidation adj £
£
Revenue 2,981,799
1,452,867
1,362,609
3,920,908
(214,643)
9,503,540
Gross surplus
2,873,563
879,401
90,256
3,066,313
-
6,909,533
Depreciation
-
-
(56,165)
(54,623)
-
(110,788)
Amortisation
-
-
(2,110)
(80,013)
-
(82,123)
Operating Leases
-
-
(68,318)
(43,329)
-
(111,647)
Other admin expenses
-
-
(4,043,120)
(2,596,640)
298,954
(6,340,806)
Other income (including finance income)
-
-
2,314,924
148,523
(2,296,632)
166,815
Taxation
-
-
(6,108)
(69,150)
-
(75,258)
2,873,563
879,401
(1,770,641)
371,081
(1,997,678)
355,726
Non-current assets
-
-
2,867,580
5,403,717
(620,398)
7,650,899
Current assets
-
-
2,222,290
967,909
(280,275)
2,909,924
Liabilities
-
-
(2,919,315)
(1,313,673)
280,309
(3,952,679)
Equity
-
-
2,170,555
5,010,602
(620,364)
6,560,793
Sales to external customers Results
Surplus/(deficit) for the year Assets & Liabilities
| 24 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
3. SEGMENT INFORMATION (continued) Year ended 31 December 2015 Membership £
Awards Regulation and Unallocated £ £
Law School
Total
£
Consolidation adj £
£
Revenue 3,711,405
1,376,617
219,871
3,668,834
(271,224)
8,705,503
3,539,453
823,818
(987,075)
2,727,828
-
6,104,024
Depreciation
-
-
(59,415)
(52,204)
-
(111,619)
Amortisation
-
-
(1,696)
(83,577)
-
(85,273)
Operating Leases
-
-
(72,268)
(44,905)
-
(117,173)
Other admin expenses
-
-
(4,587,342)
(2,228,862)
-
(6,816,204)
Other income (including finance income)
-
-
26,157
138,656
-
164,813
Taxation
-
-
-
(34,198)
-
(34,198)
3,539,453
823,818
(5,681,639)
422,738
-
895,630
Non-current assets
-
-
2,106,672
5,744,019
(626,341)
7,224,350
Current assets
-
-
1,797,083
1,516,676
(182,872)
3,130,887
Liabilities
-
-
(3,758,875)
(1,058,384)
182,875
(4,634,384)
Equity
-
-
144,879
6,202,311
(626,337)
5,720,853
Sales to external customers Results Gross surplus / deficit
Surplus/deficit for the year Assets & Liabilities
The reported segments are consistent with the Group’s internal reporting for performance measurement and resource allocation. The Group does not allocate administrative expenditure to individual income streams and only report on the gross margins for those.
| 25 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
4. EMPLOYEE EXPENSES 2016 £
2015 £
4,073,908
4,573,655
Social security costs
401,035
417,923
Post-employment expense for defined contribution plans
423,329
327,482
Restructure costs
104,865
324,369
28,796
35,643
5,031,933
5,679,072
2016 No.
2015 No.
140
149
2016 £
2015 £
234,446
396,238
Post-employment benefits: Defined contribution
24,646
33,331
Social security costs
35,388
49,846
Benefits in kind
21,646
17,980
316,126
497,395
Wages and salaries
Other employee benefits
The average monthly number of employees during the year was made up as follows: Administration Key management compensation Wages and salaries
5. OTHER OPERATING INCOME GROUP
Interest earned on investments Dividends earned on investments Group management charges
| 26 |
COMPANY
2016 £
2015 £
2016 £
2015 £
15,075
36,883
2,435
2,103
151,740
127,930
15,857
24,053
-
-
220,000
224,807
166,815
164,813
238,292
250,963
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
6. PROFIT/(LOSS) BEFORE TAX Profit/(Loss) before tax is stated after charging the following: GROUP
COMPANY
2016 £
2015 £
2016 £
2015 £
Cost of inventories recognised as expenses
199,259
189,619
-
35,359
Depreciation of property, plant and equipment
110,788
111,616
56,165
59,413
82,123
85,273
2,110
1,696
10
200
-
-
111,647
117,173
60,108
65,403
38,900
36,500
18,600
18,203
2016 £
2015 £
Current tax expense
81,177
44,488
Overprovision in the prior year
(3,757)
-
Relating to origination and reversal of temporary differences
(2,162)
(10,290)
Taxation for the year
75,258
34,198
2016 £
2015 £
86,197
(174,440)
Amortisation Net foreign currency losses Operating leases Auditor’s remuneration – audit services
7. TAXATION Components of taxation
Current tax expense
Deferred tax expense
Reconciliation of tax expense to accounting profit Tax at the domestic income tax rate of 20% (2015: 20.25%) Expenses not deductable for tax purposes Non-taxable income Taxable unrealised gains/(losses) on investments Capital gains less profit on sale investments Tax losses not recognised Tax effect of other tax rates Overprovision in the prior year
| 27 |
1,299,683
1,433,091
(1,288,969)
(1,203,371)
-
(16,136)
4,277
(3,649)
(22,286)
(1,257)
113
(40)
(3,757)
-
75,258
34,198
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
8. PROPERTY, PLANT AND EQUIPMENT Group At 31 December 2016 Freehold property £
Fixtures and fittings £
IT Equipment £
Total £
2,039,833
778,846
69,111
2,887,790
-
25,624
10,693
36,317
Cost At 1 January 2016 Additions Disposals At 31 December 2016
(2,675)
(62,027)
(5,667)
(70,369)
2,037,158
742,443
79,137
2,853,738
462,815
401,213
34,193
898,221
(6,633)
(59,324)
(4,088)
(70,045)
Depreciation At 1 January 2016 Disposals Charge for year
19,727
74,600
16,461
110,788
475,909
416,489
46,566
938,964
At 1 January 2016
1,577,018
377,633
34,918
1,989,569
At 31 December 2016
1,561,249
325,954
32,571
1,914,774
2,041,178
965,120
195,130
3,201,428
At 31 December 2016 Net book value
At 31 December 2015 Cost At 1 January 2015 Additions
-
18,932
8,806
27,738
Disposals
(1,345)
(205,206)
(134,825)
(341,376)
2,039,833
778,846
69,111
2,887,790
443,309
523,687
147,804
1,114,800
(221)
(198,967)
(129,007)
(328,195)
At 31 December 2015 Depreciation At 1 January 2015 Disposals Charge for year
19,727
76,493
15,396
111,616
462,815
401,213
34,193
898,221
At 1 January 2015
1,597,869
441,433
47,326
2,086,628
At 31 December 2015
1,577,018
377,633
34,918
1,989,569
At 31 December 2015 Net book value
| 28 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
8. PROPERTY, PLANT AND EQUIPMENT (continued) Company At 31 December 2016 Freehold property £
Fixtures and fittings £
IT Equipment £
Total £
1,190,826
396,155
43,841
1,630,822
-
-
3,651
3,651
Cost At 1 January 2016 Additions Disposals
(2,675)
(62,027)
(5,667)
(70,369)
1,188,151
334,128
41,825
1,564,104
At 1 January 2016
249,039
281,198
21,282
551,519
Charge for the year
11,240
35,080
9,845
56,165
At 31 December 2016 Depreciation
Disposals
(475)
(59,324)
(4,088)
(63,887)
259,804
256,954
27,039
543,797
At 1 January 2016
941,787
114,957
22,559
1,079,303
At 31 December 2016
928,347
77,174
14,786
1,020,307
1,192,171
402,734
130,702
1,725,607
At 31 December 2016 Net book value
At 31 December 2015 Cost At 1 January 2015 Additions
-
13,637
5,117
18,754
Disposals
(1,345)
(20,216)
(91,978)
(113,539)
1,190,826
396,155
43,841
1,630,822
238,020
260,646
100,851
599,517
11,240
38,902
9,271
59,413
At 31 December 2015 Depreciation At 1 January 2015 Charge for year Disposals
(221)
(18,350)
(88,840)
(107,411)
249,039
281,198
21,282
551,519
At 1 January 2015
954,151
142,088
29,851
1,126,090
At 31 December 2015
941,787
114,957
22,559
1,079,303
At 31 December 2015 Net book value
| 29 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
9. INTANGIBLE ASSETS Group 31 December 2016 Software £
Total £
Cost 376,826
376,826
Additions
At 1 January 2016
14,013
14,013
Disposals
(441)
(441)
390,398
390,398
At 1 January 2016
181,665
181,665
Charge for the year
82,123
82,123
375
375
264,163
264,163
At 1 January 2016
195,161
195,161
At 31 December 2016
126,235
126,235
724,614
724,614
Additions
69,373
69,373
Disposals
(417,161)
(417,161)
376,826
376,826
At 1 January 2015
496,799
496,799
Charge for the year
85,273
85,273
(400,407)
(400,407)
181,665
181,665
At 1 January 2015
227,815
227,815
At 31 December 2015
195,161
195,161
At 31 December 2016 Amortisation
Disposals At 31 December 2016 Carrying value
31 December 2015 Cost At 1 January 2015
At 31 December 2015 Amortisation
Disposals At 31 December 2015 Carrying value
| 30 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
9. INTANGIBLE ASSETS (continued) Company 31 December 2016 Software £
Total £
At 1 January 2016
7,342
7,342
Additions
1,321
1,321
Disposals
(441)
(441)
At 31 December 2016
8,222
8,222
At 1 January 2016
3,541
3,541
Charge for the year
2,110
2,110
373
373
6,024
6,024
At 1 January 2016
3,801
3,801
At 31 December 2016
2,198
2,198
74,307
74,307
Additions
1,682
1,682
Disposals
(68,647)
(68,647)
7,342
7,342
At 1 January 2015
70,068
70,068
Charge for the year
1,696
1,696
(68,223)
(68,223)
3,541
3,541
At 1 January 2015
4,239
4,239
At 31 December 2015
3,801
3,801
Cost
Amortisation
Disposals At 31 December 2016 Carrying value
31 December 2015 Cost At 1 January 2015
At 31 December 2015 Amortisation
Disposals At 31 December 2015 Carrying value
| 31 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
10. INVESTMENTS IN SUBSIDIARIES 2016 £
2015 £
Cost at 1 January
620,398
620,398
Cost at 31 December
620,398
620,398
The Institute’s investments in 100% of the ordinary share capital of unlisted companies incorporated in the United Kingdom at the year end comprise the following: Name
Principal activity
CILEx Law School Limited
Provision of study manuals and courses for examinations in law
CILEx Regulation Limited
Independent regulator of members of the Institute
11. OTHER INVESTMENTS Group Market Value
Company
2016 £
2015 £
2016 £
2015 £
At 1 January
5,039,620
5,919,463
403,170
1,183,893
Additions
1,545,176
2,741,312
776,391
219,305
Disposals
(1,562,617)
(3,471,758)
(130,017)
(924,532)
Realised gain on disposal
103,497
266,161
9,617
54,591
Unrealised gain/(loss) on changes in market value
484,214
(415,558)
43,352
(76,570)
-
-
122,164
(53,517)
5,609,890
5,039,620
1,224,677
403,170
Transfers At 31 December
Other investments are in respect of a pooled investment fund managed by Barclays Wealth. The investment is stated at its market value in the statement of financial position and any change in market value is reflected in the fair value reserve.
| 32 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
12. FINANCIAL RISK MANAGEMENT
£269,978) by CILEx Law School Limited for expenditure it had incurred on the Institute’s behalf, which was also recharged at cost.
Liquidity risk is managed in the short term by ensuring that
The Institute also purchased manuals and courses for members
there are available Group reserves to cover one years’ worth of
totalling £16 (2015: £1,246) from CILEx Law School Limited.
membership income. This is in line with the Reserves policy. The Group has invested sums in a managed medium to long term
During the year the company received a loan from CILEx Law School
investment portfolio in order to protect its cash reserves
for £400,000 (2015: £450,000). Interest is charged at 0.47%. The loan was repaid in full before the year end.
Foreign currency is not deemed a high risk area for the Group. Very few transactions take place in anything other than sterling,
At the year end, amounts due to CILEx Law School Limited totalled
however, foreign currency denominated bank accounts are held in
£148,210 (2015: £178,091 due from).
order to minimise the risk of foreign exchange losses. During the year the company paid expenses of £39,432 (2015: The Group carries out regular and thorough budgeting to ensure
£54,296) on behalf of the CILEx Compensation Fund.
that both short and long term liquidity risks are managed. During the period, the Institute contributed to the operating costs 13. RELATED PARTY TRANSACTIONS
of CILEx Regulation Limited totalling £78,954 (2015: £514,910). Amount due to CILEx Regulation Limited at the year end was
Trading activities
£105,846 (2015: £1,204).
During the year the Institute received income from CILEx Law School Limited totalling £197,347 (2015: £224,807) in relation
Reimbursement of expenditure
to expenditure the Institute had incurred on its behalf and later
During the period the Institute reimbursed out of pocket expenses
recharged at cost to them. In addition the Institute sold journal
to Council members in respect of travel and other necessary
advertising and course books to CILEx Law School Limited totalling
expenses incurred in performing their council duties of £74,998
£17,258 (2015: £19,267). The Institute was charged £168,668 (2015:
(2015: £95,508).
President, Martin N Callan FCILEx CILEx Branch Member of the Year Award Winner, Alexis Thomas, Chair of the CILEx Cardiff & South East Wales Branch
| 33 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
14. INVENTORIES Group
Course books and promotional materials
Company
2016 £
2015 £
2016 £
2015 £
10,026
1,920
-
487
449
4,866
-
-
10,475
6,786
-
487
2016 £
2015 £
2016 £
2015 £
Stationery
15. TRADE AND OTHER RECEIVABLES Group
Company
354,872
435,868
115,038
206,591
VAT
-
-
20,631
3,577
Amounts due from subsidaries
-
-
148,210
-
354,872
435,868
283,879
210,168
Trade receivables
Amounts receivable from trade customers are non-interest bearing and are generally on 30 - 45 day terms. The Council considers that the carrying amount of these assets approximates their fair value.
16. CASH AND CASH EQUIVALENTS Group
Company
2016 £
2015 £
2016 £
2015 £
Cash in hand
1,523
1,298
1,000
1,002
Cash at bank
2,263,761
2,429,115
1,731,489
1,440,182
2,265,284
2,430,413
1,732,489
1,441,184
| 34 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
17. DEFERRED TAX Statement of financial position
Income statement
2016 £
2015 £
2016 £
2015 £
(47,351)
(49,513)
2,162
10,290
2016 £
2015 £
2016 £
2015 £
Payable to trade suppliers
121,793
130,035
67,559
110,948
Other payables
566,889
401,091
57,520
997
Social security and other taxes
167,642
219,187
72,508
85,583
Accruals
494,143
853,787
364,756
708,604
81,177
44,488
6,108
-
-
-
105,846
179,295
1,431,664
1,648,588
674,296
1,085,427
Deferred tax liabilities relating to depreciaton 18. TRADE AND OTHER PAYABLES
Group
Tax payable Amounts owed to subsidiary
Company
The Council considers that the carrying amount of these assets approximate their fair value. 19. OPERATING LEASE COMMITMENTS At 31 December the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases relating to motor vehicles which fall due as follows: 2016 £
2015 £
Less than one year
61,859
23,957
Later than one year but less than five years
63,026
76,975
124,885
100,932
| 35 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2016
20. CONTINGENT LIABILITY
Regulation who have suffered loss or hardship as a result of the regulated entity having misappropriated or failed to account for the
On 5 January 2015, the Institute entered into an agreement to
client’s money.
provide a draw-down loan facility of up to £1,000,000 to the CILEx Compensation Fund (‘the Fund’) for the purpose of establishing
For a claim to be considered by the Fund, it must have exhausted all
a compensation fund in accordance with the provisions of the
other means of redress, including any insurance the regulated entity
Legal Services Act 2007 (Chartered Institute of Legal Executives)
has in place. The claim will be put to the Fund’s indemnity insurance,
(Modification of Functions) Order 2014 made on 8 December 2014.
if eligible, for settlement. The cover provides for £1,000,000 per claim,
The Compensation Fund is an independent legal entity and is limited
£2,000,000 per authorised entity and £10,000,000 in the aggregate.
by guarantee. The Trustees of the Fund may call on the loan facility to pay eligible CILEx Regulation Ltd, a subsidiary of CILEx, carries out the regulation
claims that have exhausted all other means of redress, including the
of authorised entities. At the date of signing the accounts, there were
Fund’s own indemnity insurance.
8 authorised entities (2015: 2) being regulated and no claims have been received.
Work on making the compensation arrangements fully insurancebacked is at an advanced stage. This will remove the need for the Fund
The Fund is a discretionary fund of last resort and will consider eligible
and the loan facility. It is expected that the new arrangements will be
claims for compensation from clients of entities regulated by CILEx
in place during 2017.
| 36 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
BENEVOLENT FUND YEAR ENDED 31 DECEMBER 2016
CILEx
benevolent fund Registered Charity Name:
Income is generated by way of donations, gifts and from investments.
The Chartered Institute of Legal Executives Benevolent Fund
The Trustees would like to encourage more CILEx members to consider directing some of their charitable giving to the Fund
Charity registration number: 295527
to ensure that it can continue to meet calls for assistance from disadvantaged members, former members and their dependants.
Objective and Activities The primary objective of the Charity is to provide assistance to
Applications to the Fund are increasing. In 2016, payments exceeding
persons in need who are, or who have been, members of The Institute
ÂŁ4,000 were made. Applications from qualifying members are
and their families or dependants. Assistance is given by payment of
encouraged and further information can be found on the CILEx
grants or providing advice and information. Grants are made to help
website.
persons in financial difficulties due to unemployment, illness or other misfortune.
| 37 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES Benevolent Fund
STATEMENT OF FINANCIAL ACTIVITIES YEAR ENDED 31 DECEMBER 2016
Income and Expenditure Account 1 January 2016 to 31 December 2016 £ Opening balance
188,170
Income Donations-Branch and Non-members
667
Interest (Direct Reserve)
65
CILEx Member Donations
1,210
Legal Charities Garden Party
1,060 3,002
Expenditure Grants
2,066
Bank Charges
71 2,137
Closing Balance
189,034
Balance sheet as at 31 December 2016 £ Current Assets Current Account
39,540
Direct Reserves Account
148,956
Legal Charities Garden Party
2,169
Current Liabilities Amounts owing to CILEx
2,081
Closing Balance
189,034
| 38 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
Pro Bono Trust
CILEx
YEAR ENDED 31 DECEMBER 2016
Pro Bono Trust Registered Charity Name: The CILEx Pro Bono Trust
community through giving their time without charge to help others by providing work of a legal nature. Kindly sponsored by Kings Court
Charity registration number: 1145776
Trust, the winner receives a commemorative trophy, certificate, the winner’s logo and a cheque for £500 to be donated to the winner’s
Objective and Activities
choice. The winner of the 2016 medal was Christine Howard of Weil
The primary objective of the Charity is to work in partnership with
Gotshal & Manges, who donated her award to RCJ Advice Bureau
other facilitators and providers of pro bono legal services in order to
Limited. The medal was presented at the 2016 CILEx Graduation and
raise awareness and support the pro bono work of CILEx members
Admission Ceremony.
and other lawyers. The Trustees are presently working on several initiatives which Each year the CILEx Pro Bono Trust awards the CILEx Pro Bono Award
include a Pro Bono Volunteers Handbook and promotion for the CILEx
to recognise the dedication and commitment of an outstanding
Advocacy Support Scheme.
individual who, in addition to their daily work, has contributed to the
President, Martin N Callan FCILEx, and CILEx Pro Bono Award winner, Christine Howard, Chartered Legal Executives, Weil, Gotshal & Manges
| 39 |
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES Pro Bono Trust
STATEMENT OF FINANCIAL ACTIVITIES YEAR ENDED 31 DECEMBER 2016
Income and Expenditure Account 1 January 2016 to 31 December 2016 £ Opening balance
5,278
Income Interest earned
4 4
Expenditure Insurance
1,668
Bank Charges
9 1,677
Closing Balance
3,605
Balance sheet as at 31 December 2016 Current Assets Debtors
8,378
Prepayment
9,502
Total Current Assets
13,858
Current Liabilities Creditors
5,897
Closing Balance Net Current Assets
3,605
| 40 |
NOTES
NOTES
NOTES
THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES
Xxx FOR THE YEAR ENDED 31 DECEMBER 2016
For further information about CILEx qualifications contact: THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES Kempston Manor, Kempston, Bedford MK42 7AB T +44 (0)1234 845777 F +44 (0)1234 840373 E membership@cilex.org.uk W www.cilexcareers.org.uk
CILEx
@CILExLawyers
vimeo.com/cilexlawyers
CILExfan
| 44 |