CILEx Annual Report 2015 by Newnorth Print Limited

ANNUAL REPORT & ACCOUNTS 31 DECEMBER 2015

Xxx

B | The Chartered Institute of Legal Executives

Immediate past president Frances Edwards and Baroness Doreen Lawrence

CONTENTS ANNUAL REPORT & ACCOUNTS 2015 Officers and professional advisers ��

Notice of Annual General Meeting - 21 July 2016 ��

Report of the Council �� Independent auditor’s report to the members of The Chartered Institute of Legal Executives ��

3 to 4 5 to 6

Consolidated statement of comprehensive income �� Company statement of comprehensive income �� Consolidated statement of changes in equity �� Company statement of changes in equity �� Consolidated statement of financial position ��

7 8 9

10 11

Company statement of financial position ��

Consolidated statement of cash flows ��

Company statement of cash flows �� Notes to the consolidated financial statements ��

15 to 31

The Chartered Institute of Legal Executives Benevolent Fund

FINANCIAL STATEMENTS 2015 Trustees Annual Report ��

32 to 36

Independent auditor’s report ��

37 to 38

Statement of Financial Activities ��

Balance sheet ��

Notes to the financial statements ��

41 to 43

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

OFFICERS AND PROFESSIONAL ADVISERS FOR THE YEAR ENDED 31 DECEMBER 2015

Council D J Edwards (President) M N Callan (Vice President) M Grant (Deputy Vice President) K Barrett M Bowen E Davies F Edwards D Ferguson (Appointed 10 July 2015, resigned 10 May 2016) G Findlay M Foster (Appointed 15 October 2015) J Gordon-Nichols S D Gowland (Resigned 8 July 2015) B C Hamilton-Bruce N Hanning (Resigned 10 July 2015) C Jepson F Lister D McLaughlin (Appointed 10 July 2015) R G Ralph W Rixon (Appointed 15 October 2015) P R Sherwood S Silver D S Slow (Resigned 4 December 2015) P T Watkin (Resigned 30 November 2015) P White (Appointed 4 November 2015) Company Secretary M M J Lavin 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

1 | The Chartered Institute of Legal Executives

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTICE OF ANNUAL GENERAL MEETING - 21 July 2016 NOTICE IS GIVEN that the ANNUAL GENERAL MEETING of The Chartered Institute of Legal Executives will be held at 3.45 pm on Thursday 21 July 2016 at Park Plaza Victoria London, 239 Vauxhall Bridge Road, London, SW1V 1EQ to transact the following business: 1 To receive the Minutes of the Annual General Meeting held on 10 July 2015. 2 The President’s Address. 3 To receive the Accounts of The Chartered Institute of Legal Executives Group for the period ended 31 December 2015, 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 2015. 4 To announce the election and re-appointment of Fellows to the Council of The Chartered Institute of Legal Executives. 5 Any Other Business. Dated: 31 May 2016 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 2015. 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 21 July 2016. 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

ANNUAL REPORT AND ACCOUNTS | 2

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

REPORT OF THE COUNCIL FOR THE YEAR ENDED 31 DECEMBER 2015

The Council presents their report and the financial statements of The Chartered Institute of Legal Executives and its subsidiaries (the “Group”) for the year ended 31 December 2015. The attached report and financial statements show the members the results of the Group activities for the year ended 31 December 2015 with comparative figures for the year ended 31 December 2014. CONSTITUTION The Chartered Institute of Legal Executives (“CILEx”, “the Institute” or “the Company”) is incorporated by Royal Charter and governed by a set of Bye-Laws which outline the internal organisation, constitution and conduct. The Institute is the sole shareholder of a number of whollyowned subsidiary companies, which together with the Institute, form the Group. COUNCIL MEMBERS AND DIRECTORS The business of the Institute is managed by the Council. Council consists of not more than 19 Fellows elected as constituency members and 4 Fellows elected as specialist members. MEMBERSHIP OF THE INSTITUTE The members of the Institute are Fellows. A Fellow is a person admitted to membership of the Institute in accordance with the provisions of the Bye-Laws. The Council members are therefore also members of the Institute. PRINCIPAL ACTIVITY AND REVIEW OF THE BUSINESS The principal activity of the Group during the year was that of being the professional association and governing body for Chartered Legal Executives, other legal practitioners and paralegals, provision of study

3 | The Chartered Institute of Legal Executives

manuals and courses for examinations in law and performance of duties as the independent regulator of its members and regulated entities. 2015 was a challenging year for the Group. It became apparent during the course of the year that overall income would be below expectation and that pressures on expenditure budgets would combine to result in a significant deficit. Our new Group Chief Executive Officer, Miss Mandie Lavin (who joined the Group at the beginning of 2015), carried out a restructuring of the Institute to focus resources on membership value and income generation. This resulted in a number of staff leaving the organisation at the end of the year which is regrettable, but it will ensure that the Institute is in better shape to deliver excellent value to our members. The start of entity regulation in 2015 required the provision of arrangements for consumer redress, and the CILEx Compensation Fund (the “Fund”) was created as a company limited by guarantee with an independent board of Trustees to oversee the function of the Fund and to consider eligible claims for compensation. The board of Trustees have brought to the attention of Council that the £1,000,000 loan facility that CILEx has put in place to establish the Fund, may not be sufficient in all circumstances. Council has engaged with CILEx Regulation and CILEx Compensation Fund to review the options in relation to entity regulation and compensation fund arrangements, and is taking legal advice on the matter. The indemnity insurance cover for the Fund has been doubled to provide claim limits of £1,000,000 per claim; £2,000,000 per entity and £10,000,000 in the aggregate. At the time of the signing of the accounts, there were three entities being regulated by CILEx Regulation, and no claims have been received. The net loss before tax for the Group for the year to 31 December 2015 is £861,432 (2014 £267,996) after charging £324,369 restructuring costs.

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

REPORT OF THE COUNCIL

(CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2015

The results for the year include the Group’s share of the running costs of the Legal Services Board (LSB) as required under the Legal Services Act 2007 totalling £181,027 (2014 £194,776). The trading results for the year and the Group’s financial position at the end of the year are shown in the attached financial statements. GOING CONCERN The financial statements are prepared on a going concern basis as the Council is satisfied that there is a reasonable expectation that there are adequate resources to continue in operational existence for the foreseeable future. The Group has cash and investments valued at £7,470,033 (2014 £8,091,570) at the balance sheet date, and has carried out a restructuring of the Institute during the year to significantly reduce operating costs. Council is committed to, and engaged in, reviewing other areas of Group activities where financial performance can be improved. STATEMENT OF COUNCIL’S RESPONSIBILITIES The Council are responsible for preparing the financial statements in accordance with applicable law and regulations. The Institute is incorporated by Royal Charter and therefore is not subject to UK company law. The Council has elected to prepare the financial statements in accordance with International Financial Reporting Standards and to have them audited. The Council are 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 statements, the Council, in accordance with best practice, is 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 • ensure that the financial statements are prepared on the going

concern basis unless it is inappropriate to presume that the Group will continue in business • provide 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.

AUDITORS Moore Stephens LLP were appointed auditor of the Company by the Council and will be seeking the re-appointment at the Annual General Meeting. Approved by the Council on 16 May 2016 and signed on its behalf by

Miss M M J Lavin Company secretary

ANNUAL REPORT AND ACCOUNTS | 4

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 2015

We have audited the financial statements of The Chartered Institute of Legal Executives for the year ended 31 December 2015 which comprise the Consolidated and Company Statement of Comprehensive Income, Consolidated and Company Statement of Changes in Equity, Consolidated and Company Statement of Financial Position, Consolidated and Company Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. Our audit work has been undertaken so that we might state to the members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Group or its members as a body, for our audit work, for this report, or for the opinions we have formed. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS As explained more fully in the Statement of Council’s Responsibilities, set out on page 3, the Council is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors. SCOPE OF THE AUDIT OF THE FINANCIAL ACCOUNTS An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate

5 | The Chartered Institute of Legal Executives

to the Group’s and the Institute’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Council; and the overall presentation of the financial statements. BASIS OF OPINION We conducted our audit work in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Council in preparation of the financial statements, and of whether the accounting policies are appropriate for the Group’s and Institute’s circumstances consistently applied and adequately disclosed. In addition, we read all the financial and non-financial information in the financial review to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2015

OPINION ON FINANCIAL STATEMENTS In our opinion the financial statements:

adequate for our audit have not been received from branches not visited by us; or

- give a true and fair view of the state of the company’s affairs as at 31 December 2015 and of its loss for the period then ended; and

- the financial statements audited are not in agreement with the accounting records and returns; or

- have been properly prepared in accordance with IFRSs as adopted by the European Union.

- we have not received all of the information and explanations we require for our audit.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION We have nothing to report in respect of the following matters where our engagement letter requires us to report to you if, in our opinion:

Moore Stephens LLP Chartered Accountants and Statutory Auditor London, United Kingdom 16 May 2016

- adequate accounting records have not been kept, or returns

Lord John Dyson, Master of the Rolls and Head of Civil Justice

ANNUAL REPORT AND ACCOUNTS | 6

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2015

NOTES Revenue Cost of sales GROSS PROFIT

2015 £

2014 £

8,705,503

8,377,856

(2,601,479)

(2,737,578)

6,104,024

5,640,278

(7,130,269)

(6,093,342)

Other operating income

164,813

185,068

LOSS BEFORE TAX

(861,432)

(267,996)

Taxation

(34,198)

(14,547)

(895,630)

(282,543)

Administrative expenses

LOSS FOR THE YEAR OTHER COMPREHENSIVE INCOME Net unrealised gains/(losses) on available-for-sale financial assets TOTAL COMPREHENSIVE EXPENSE FOR THE YEAR 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 15 to 31 form part of these financial statements.

7 | The Chartered Institute of Legal Executives

(415,558)

110,281

(1,311,188)

(172,262)

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

COMPANY STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2015

NOTES Revenue Cost of sales GROSS PROFIT

2015 £

2014 £

4,318,839

4,349,185

(1,451,680)

(1,664,335)

2,867,159

3,511,093

(4,436,490)

(3,346,685)

Other operating income

250,963

257,476

LOSS BEFORE TAX

(1,318,368)

(404,359)

(4,347)

(1,318,368)

(400,012)

Administrative expenses

Taxation LOSS FOR THE YEAR OTHER COMPREHENSIVE INCOME Net unrealised gains/(losses) on available-for-sale financial assets TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(76,570)

9,004

(1,394,938)

(391,008)

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 15 to 31 form part of these financial statements.

ANNUAL REPORT AND ACCOUNTS | 8

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015

Fair value reserve £

Retained funds £

Total equity £

Balance at 1 January 2014

322,672

6,881,631

7,204,303

Net unrealised gains on available-for-sale financial assets

110,281

(282,543)

432,953

6,599,088

7,032,041

(415,558)

(895,630)

17,395

5,703,458

5,720,853

Deficit for the year Balance at 31 December 2014 Net unrealised losses on available-for-sale financial assets Deficit for the year Balance at 31 December 2015

The notes on pages 15 to 31 form part of these financial statements.

9 | The Chartered Institute of Legal Executives

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015

Balance at 1 January 2014 Net unrealised gains on available-for-sale financial assets Deficit for the year Balance at 31 December 2014 Net unrealised losses on available-for-sale financial assets Deficit for the year Balance at 31 December 2015

Fair value reserve £

Retained funds £

Total equity £

90,935

1,839,890

1,930,825

9,004

(400,012)

99,939

1,439,878

1,539,817

(76,570)

(1,318,368)

23,369

121,510

144,879

The notes on pages 15 to 31 form part of these financial statements.

ANNUAL REPORT AND ACCOUNTS | 10

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 DECEMBER 2015

Notes

2015 £

2014 £

1,989,569

2,086,628

ASSETS NON CURRENT ASSETS Property, plant and equipment

Intangible assets

195,161

227,815

Other investments

5,039,620

5,919,463

7,224,350

8,233,906

CURRENT ASSETS Inventories

6,786

10,226

Trade and other receivables

435,868

314,479

257,820

367,245

2,430,413

2,172,107

3,130,887

2,864,057

10,355,237

11,097,963

Other reserves

17,395

432,953

Retained funds

5,703,458

6,599,088

TOTAL EQUITY

5,720,853

7,032,041

49,513

59,803

2,936,283

2,589,030

1,648,588

1,417,089

4,584,871

4,006,119

10,355,237

11,097,963

Prepayments Cash and cash equivalents TOTAL ASSETS EQUITY ISSUED CAPITAL AND RESERVES

NON CURRENT LIABILITIES Deferred tax payables

CURRENT LIABILITIES Deferred income Trade and other payables TOTAL EQUITY AND LIABILITIES

Approved by the Council on 16 May 2016 and signed on its behalf by D J Edwards President P H Sherwood Chair, Finance & Remuneration Standing Committee

The notes on pages 15 to 31 form part of these financial statements.

11 | The Chartered Institute of Legal Executives

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

COMPANY STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 DECEMBER 2015

Notes

2015 £

2014 £

1,079,303

1,126,090

ASSETS NON CURRENT ASSETS Property, plant and equipment

Intangible assets

3,801

4,239

Investments in subsidaries at cost

620,398

Other investments

403,170

1,183,893

2,106,672

2,934,620

487

672

CURRENT ASSETS Inventories

Trade and other receivables

210,168

335,950

145,243

151,085

1,441,184

1,165,373

1,797,082

1,653,080

3,903,754

4,587,700

23,369

99,939

Retained funds

121,510

1,439,878

TOTAL EQUITY

144,879

1,539,817

2,673,448

2,308,846

1,085,427

739,037

3,758,875

3,047,883

3,903,754

4,587,700

Prepayments Cash and cash equivalents

TOTAL ASSETS EQUITY ISSUED CAPITAL AND RESERVES Reserves

CURRENT LIABILITIES Deferred income Trade and other payables TOTAL EQUITY AND LIABILITIES

Approved by the Council on 16 May 2016 and signed on its behalf by D J Edwards President

P R Sherwood Chair, Finance & Remuneration Standing Committee

Company registration number: RC000850

The notes on pages 15 to 31 form part of these financial statements.

ANNUAL REPORT AND ACCOUNTS | 12

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2015

2015 £

2014 £

(861,432)

(267,996)

111,619

122,753

85,273

73,542

(164,813)

(174,583)

CASH FLOW FROM OPERATING ACTIVITIES Loss before tax NON-CASH ADJUSTMENTS Depreciation Amortisation of other intangible non-current assets Investment income Loss / (gain) on disposal of non-current assets Gain on disposal of investments Other non-cash adjustments NON-CASH ADJUSTMENTS CASH FLOWS BEFORE CHANGES IN WORKING CAPITAL

9,522

(22,214)

(266,161)

200

(224,360)

(502)

(1,085,792)

(268,498)

(3,440)

9,834

(165,121)

104,088

INCREASE IN WORKING CAPITAL Increase/(decrease) in inventories (Increase)/decrease in trade and other receivables (Increase)/decrease in prepayments

109,425

(20,141)

Increase in trade and other payables

557,622

115,045

INCREASE IN WORKING CAPITAL

498,486

208,826

43,732

(543,574)

(59,672)

Payments to acquire property, plant and equipment

(27,738)

(275,112)

Payments to acquire intangible assets

(69,373)

(171,662)

(2,741,312)

(2,391,621)

3,471,830

2,885,454

3,660

2,566

36,883

80,010

Tax 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 Dividends received, classified as investing

127,930

94,573

NET CASH FLOWS USED IN INVESTING ACTIVITIES

801,880

224,208

NET INCREASE IN CASH AND CASH EQUIVALENTS

258,306

164,536

Cash and cash equivalents as at 1 January 2015

2,172,107

2,007,571

CASH AND CASH EQUIVALENTS AS AT 31 DECEMBER 2015

2,430,413

2,172,107

The notes on pages 15 to 31 form part of these financial statements.

13 | The Chartered Institute of Legal Executives

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

COMPANY STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2015

2015 £

2014 £

(1,318,368)

(404,359)

59,413

64,225

1,696

3,659

(26,156)

(42,573)

CASH FLOW FROM OPERATING ACTIVITIES Loss before tax NON-CASH ADJUSTMENTS Depreciation Amortisation of other intangible non-current assets Investment income (Gain)/loss on disposal of non-current assets NON-CASH ADJUSTMENTS CASH FLOWS BEFORE CHANGES IN WORKING CAPITAL

4,656

(4,067)

39,609

21,244

(1,278,759)

(383,115)

185

2,374

125,782

(69,011)

5,842

8,197

710,992

202,364

INCREASE IN WORKING CAPITAL Decrease in inventories Increase/(decrease) in trade and other receivables Decrease in prepayments Increase in trade and other payables INCREASE IN WORKING CAPITAL NET CASH FROM OPERATING ACTIVITIES

842,801

143,924

(435,958)

(239,191)

(18,754)

(28,365)

(1,682)

(259)

(219,305)

(572,532)

924,532

1,077,091

822

2,103

20,705

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 Proceeds from sale of equipment Interest received, classified as investing

24,053

21,868

NET CASH INCREASE FROM INVESTING ACTIVITIES

711,769

518,508

NET INCREASE IN CASH AND CASH EQUIVALENTS

275,811

279,317

Cash and cash equivalents as at 1 January 2015

1,165,373

886,056

CASH AND CASH EQUIVALENTS AS AT 31 DECEMBER 2015

1,441,184

1,165,373

Dividends received, classified as investing

The notes on pages 15 to 31 form part of these financial statements.

ANNUAL REPORT AND ACCOUNTS | 14

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2015

1. AUTHORISATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE WITH IFRSâ&#x20AC;&#x2122;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 IFRS 9 IFRS 14 IFRS 15

Title Financial Instruments Regulatory Deferral Accounts Revenue from Contracts with Customers

Effective date 1 January 2018 1 January 2016 1 January 2018

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.

15 | The Chartered Institute of Legal Executives

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2015

2. ACCOUNTING POLICIES Revenue recognition Subscriptions income is recognised evenly over the period to which they relate and exam fee income is recognised upon sitting of those exams. Distance learning course revenue is recognised when the course is 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 case that element of the revenue is deferred. Agency commission income is recognised on an arising basis in line with the agreements in place with the principal. Apprenticeship income is recognised on an arising basis. Interest and dividend income is accounted for on an arising basis. All income is recognised net of value added tax. Foreign currency exchange Transactions in currencies other than the functional currency of the Group are recorded at the rates of exchange prevailing on the dates of the transactions. At each statement of financial position date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on that

date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Gains and losses arising on retranslation are included in net profit or loss for the period, except for exchange differences arising on nonmonetary assets and liabilities where the changes in fair value are recognised directly in equity. Pension costs The Group operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the Group. The annual contributions payable are charged to the income statement. Taxation Corporation tax arises on the Groupâ&#x20AC;&#x2122;s chargeable gains and investment income less any charitable donations by way of gift aid and trading profits. Provision is made for deferred taxation to the extent that material timing differences are expected to reverse in future periods. No provision for deferred taxation is included in respect of surpluses on revaluation of property and investments. Segmental Reporting A business segment is a group of assets and operations engaged in providing products and services that are subject to risks and returns that are different from those of other business segments.

ANNUAL REPORT AND ACCOUNTS | 16

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

2. ACCOUNTING POLICIES (continued) Property, plant and equipment Items of property, plant and equipment are stated at cost of acquisition or production cost less accumulated depreciation and impairment losses. Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives, on the following bases: Freehold property Fixtures and fittings IT Equipment

1% on cost 10% on cost 25% on cost

cost. Intangible assets acquired as part of a business combination are capitalised separately from goodwill if the fair value can be measured reliably on initial recognition. The carrying value of intangible assets are reviewed for impairment on an annual basis for events or changes in circumstances that indicate that the carrying value may not be recoverable. Intangible assets are stated at cost or fair value on recognition less accumulated amortisation and any impairment in value. Amortisation is calculated so as to write off the cost or valuation of intangible assets over their estimated useful lives, on the following bases: Software

Investments Investments are recognised at cost on the trade date, and are restated on the reporting date at fair value. Unrealised gains and losses (including those arising on translation of investments denominated in foreign currencies) are recognised directly in fair value reserves until the investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in fair value reserves is included in net surplus or deficit for the period. Investments in subsidiaries are stated at cost less any impairment deemed necessary. Intangible assets Intangible assets acquired separately from a business are capitalised at Lord Thomas of Cwmgiedd, Lord Chief Justice, Royal Courts of Justice

17 | The Chartered Institute of Legal Executives

25% on cost

Inventories Inventories are valued at the lower of cost and net realisable value. Trade and other receivables Trade and other receivables are recognised by the Group and carried at original invoice amount less an allowance for any uncollectible or impaired amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when they are identified as being unrecoverable. Other receivables are recognised at fair value.

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

2. ACCOUNTING POLICIES (continued) Cash and cash equivalents Cash and cash equivalents comprise cash at bank and in hand and 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 any time. Deferred tax 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 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.

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.

Trade and other payables Trade and other payables are not interest bearing and are stated at their nominal value.

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.

Other reserves The other reserve relates to the fair value reserve which comprises the cumulative net change in the fair value of available-for-sale financial assets until the assets are derecognised or impaired.

Operating lease commitments Operating leases payments are recognised as an expense in the consolidated income statement on a straight line basis over the lease term.

ANNUAL REPORT AND ACCOUNTS | 18

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

3. SEGMENT INFORMATION Year ended 31 December 2015 Membership £

Awards Regulation and Unallocated £ £

Law School

Total

Consolidation adjustment £

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)

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

5,720,853

Sales to external customers Results Gross surplus / deficit

Surplus/deficit for the year Assets & Liabilities

19 | The Chartered Institute of Legal Executives

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

3. SEGMENT INFORMATION (Continued) Year ended 31 December 2014 Membership £

Awards Regulation and Unallocated £ £

Law School

Total

Consolidation adjustment £

Revenue 3,577,778

1,429,509

52,762

3,317,170

8,377,219

3,397,252

843,326

(1,031,505)

2,431,205

5,640,278

Depreciation

(64,225)

(52,585)

(5,943)

(122,753)

Amortisation

(3,659)

(69,883)

(73,542)

Operating Leases

(59,545)

(47,278)

(106,823)

Other admin expenses

(3,539,061)

(2,251,163)

(5,790,224)

Other income (including finance income)

53,058

132,010

185,068

Taxation

4,347

(18,894)

(14,547)

3,397,252

843,326

(4,640,590)

123,412

(5,943)

(282,543)

Non-current assets

2,934,621

5,925,627

(626,341)

8,233,907

Current assets

1,653,080

1,404,921

(193,945)

2,864,056

Liabilities & Equity

(3,674,221)

(1,211,987)

820,286

(4,065,922)

Net assets / liabilities

913,480

6,118,561

7,032,041

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.

ANNUAL REPORT AND ACCOUNTS | 20

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

4. EMPLOYEE EXPENSES

Wages and salaries

2015 £

2014 £

4,573,655

4,048,737

Social security costs

417,923

387,485

Post-employment expense for defined contribution plans

327,482

309,694

Restructure costs

324,369

29,690

35,643

50,591

5,679,072

4,826,197

149

139

396,238

286,693

Post-employment benefits: Defined contribution

33,331

37,006

Social security costs

49,846

55,509

Benefits in kind

17,980

25,139

497,395

404,346

Other employee benefits The average monthly number of employees during the year was made up as follows: Administration At the end of 2015 the group staff numbers fell to 139 following the re-structure in CILEx. Key management compensation Wages and salaries

It was determined that following the re-structure in CILEx at the end of 2015, the composition of key management increased by two personnel. This has resulted in the total management compensation appearing to be greater than in the prior year.

5. OTHER OPERATING INCOME GROUP

Interest earned on investments Dividends earned on investments Group management charges Other income

21 | The Chartered Institute of Legal Executives

COMPANY

2015 £

2014 £

2015 £

2014 £

36,883

80,010

2,103

20,705

127,930

94,573

24,053

21,868

224,807

214,903

10,485

164, 813

185,068

250,963

257,476

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

6. OTHER OPERATING INCOME Loss before tax is stated after charging the following: GROUP

COMPANY

2015 £

2014 £

2015 £

2014 £

Cost of inventories recognised as expenses

189,619

170,828

35,359

33,997

Depreciation of property, plant and equipment

111,616

122,753

59,413

64,225

85,273

73,542

1,696

3,659

200

587

117,173

106,823

65,403

59,545

36,500

18,203

22,271

2015 £

2014 £

44,488

(16,379)

(10, 290)

30,926

34,198

14,547

Amortisation Net foreign currency losses Operating leases: Other Auditor’s remuneration – audit services

7. TAXATION Components of taxation

Current tax expense Current tax expense Overprovision in the prior year Deferred tax expense Relating to origination and reversal of temporary differences Taxation for the year Reconciliation of tax expense to accounting profit Tax at the domestic income tax rate of 20.25% (2014: 21.49%)

(174,440)

(57,592)

Expenses not deductable for tax purposes

1,433,091

1,292,096

(1,203,371)

(1,233,499)

(16,136)

23,699

Non-taxable income Taxable unrealised gains/(losses) on investments Capital gains less profit on sale investments

(3,649)

Tax losses not recognised

(1,257)

8,527

(40)

(2,305)

(16,379)

34,198

14,547

Tax effect of other tax rates Prior year adjustment

ANNUAL REPORT AND ACCOUNTS | 22

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

8. PROPERTY, PLANT AND EQUIPMENT Group At 31 December 2015 Freehold property £

Fixtures and fittings £

IT Equipment £

Total £

Cost At 1 January 2015

2,041,178

965,120

195,130

3,201,428

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

At 31 December 2015 Depreciation At 1 January 2015

443,309

523,687

147,804

1,114,800

(221)

(198,967)

(129,007)

(328,195)

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

1,989,560

2,034,231

732,018

192,685

2,958,934

Additions

6,947

238,587

29,578

275,112

Disposals

5,485

27,133

32,618

2,041,178

965,120

195,130

3,201,428

411,037

455,589

157,347

1,023,973

4,827

27,099

31,926

32,272

72,925

17,556

122,753

443,309

523,687

147,804

1,114,800

At 1 January 2014

1,623,194

276,429

35,338

1,934,961

At 31 December 2014

1,597,869

441,433

47,326

2,086,628

Disposals Charge for year At 31 December 2015 Net book value

At 31 December 2014 Cost At 1 January 2014

At 31 December 2014 Depreciation At 1 January 2014 Disposals Charge for year At 31 December 2014 Net book value

23 | The Chartered Institute of Legal Executives

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

8. PROPERTY, PLANT AND EQUIPMENT (continued) Company At 31 December 2015 Freehold property £

Fixtures and fittings £

IT Equipment £

Total £

Cost At 1 January 2015

1,192,171

402,734

130,702

1,725,607

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

(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

1,185,224

399,030

112,988

1,697,242

6,947

3,704

17,714

28,365

1,192,171

402,734

130,702

1,725,607

220,181

224,696

90,415

535,292

At 31 December 2015 Depreciation At 1 January 2015 Charge for year Disposals At 31 December 2015 Net book value

At 31 December 2014 Cost At 1 January 2014 Additions At 31 December 2014 Depreciation At 1 January 2014 Charge for year

17,839

35,950

10,436

64,225

238,020

260,646

100,851

599,517

At 1 January 2014

965,043

174,344

22,573

1,161,950

At 31 December 2014

954,151

142,088

29,851

1,126,090

At 31 December 2014 Net book value

ANNUAL REPORT AND ACCOUNTS | 24

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

9. INTANGIBLE ASSETS Group 31 December 2015 Software £

Total £

724,614

Cost At 1 January 2015 Additions

69,373

Disposals

(417,161)

376,826

496,799

At 31 December 2015 Amortisation At 1 January 2015 Change for the year

85,273

(400,407)

181,665

At 1 January 2015

227,815

At 31 December 2015

195,161

At 1 January 2014

552,952

Additions

171,662

At 31 December 2014

724,614

423,257

Disposals At 31 December 2015 Carrying value

31 December 2014 Cost

Amortisation At 1 January 2014 Charge for the year

73,542

496,799

At 1 January 2014

129,695

At 31 December 2014

227,815

At 31 December 2014 Carrying value

25 | The Chartered Institute of Legal Executives

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

9. INTANGIBLE ASSETS (continued) Company 31 December 2015 Software £

Total £

74,307

Cost At 1 January 2015 Additions

1,682

Disposals

(68,647)

7,342

70,068

At 31 December 2015 Amortisation At 1 January 2015 Change for the year

1,696

(68,223)

3,541

At 1 January 2015

4,239

At 31 December 2015

3,801

74,048

259

74,307

66,409

Disposals At 31 December 2015 Carrying value

31 December 2014 Cost At 1 January 2014 Additions At 31 December 2014 Amortisation At 1 January 2014 Charge for the year

3,659

70,068

At 1 January 2014

7,639

7,369

At 31 December 2014

4,239

At 31 December 2014 Carrying value

ANNUAL REPORT AND ACCOUNTS | 26

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

10. INVESTMENTS IN SUBSIDIARIES

Cost at 1 January Write off Cost at 31 December

2015 £

2014 £

620,398

620,400

(2)

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 CILEx Regulation Limited

Provision of study manuals and courses for examinations in law Independent regulator of members of the Institute

The Institute also held 100% of the ordinary share capital of the following companies incorporated in the United Kingdom but which were struck off in the year: ILEX Publishing and Advertising Limited ITS (Law Tutors) limited ILEX (Paralegal Training) Limited Legal Executive Training Limited

11. OTHER INVESTMENTS Group Market Value

Company

2015 £

2014 £

2015 £

2014 £

At 1 January

5,919,463

6,282,673

1,183,893

1,675,379

Additions

2,741,312

2,391,621

219,305

572,532

Disposals

(3,471,758)

(2,885,454)

(924,532)

(1,077,091)

266,161

20,342

54,591

4,069

(415,558)

110,281

(76,570)

9,004

(53,517)

5,039,620

5,919,463

403,170

1,183,893

Realised gain on disposal Unrealised gain on changes in market value 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.

27 | The Chartered Institute of Legal Executives

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

12. FINANCIAL RISK MANAGEMENT Liquidity risk is managed in the short term by ensuring that there are available Group reserves to cover one years’ worth of membership income. This is in line with the Reserves policy. The Group has invested sums in a managed medium to long term investment portfolio in order to protect its cash reserves. Foreign currency is not deemed a high risk area for the Group. Very few transactions take place in anything other than sterling, however, foreign currency denominated bank accounts are held in order to minimise the risk of foreign exchange losses. The Group carries out regular and thorough budgeting to ensure that both short and long term liquidity risks are managed. 13. RELATED PARTY TRANSACTIONS Trading activities During the year the Institute received income from CILEx Law School Limited totalling £224,807 (2014: £208,752) in relation to expenditure the Institute had incurred on its behalf and later recharged at cost to them. In addition the Institute sold journal advertising and course books to CILEx Law School Limited totalling £19,267 (2014: £21,567). The Institute

was charged £269,978 (2014: £113,988) by CILEx Law School Limited for expenditure it had incurred on the Institute’s behalf, which was also recharged at cost. The Institute also purchased manuals and courses for members totalling £1,246 (2014: £754) from CILEx Law School Limited. During the year the company received a loan from CILEx Law School for £450,000 (2014: nil). The total facility available is £500,000, interest is charged at 0.47% and the loan is repayable within 12 months. At the year end, amounts due to CILEx Law School Limited totalled £178,091 (2014: £191,954 due from). During the year the company received a loan from CILEx Law School for £450,000 (2014: nil). The total facility available is £500,000, interest is charged at 0.47% and the loan is repayable within 12 months. During the period, the Institute contributed to the operating costs of CILEx Regulation Limited totalling £514,910 (2014: £328,085). Reimbursement of expenditure During the period the Institute reimbursed out of pocket expenses to Council members in respect of travel and other necessary expenses incurred in performing their council duties of £95,508 (2014: £104,192).

ANNUAL REPORT AND ACCOUNTS | 28

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

14. INVENTORIES Group

Company

2015 £

2014 £

2015 £

2014 £

Course books and promotional materials

1,920

2,846

487

672

Stationery

4,866

7,380

6,786

10,226

487

672

15. TRADE AND OTHER RECEIVABLES Group

Trade receivables VAT

Company

2015 £

2014 £

2015 £

2014 £

435,868

270,747

206,591

142,005

3,577

1,991

Amounts due from subsidaries

191,954

Tax receivable

43,732

435,868

314,479

210,168

355,950

Amounts receivable from trade customers are non-interest bearing and are generally on 30 - 90 day terms. Balances over their credit terms in trade receivables which have not been provided for total £33,275 (2014: £34,583). The Council considers that the carrying amount of these assets approximates their fair value.

16. CASH AND CASH EQUIVALENTS Group

Company

2015 £

2014 £

2015 £

2014 £

Cash in hand

1,298

1,200

1,002

1,000

Cash at bank

2,429,115

2,170,907

1,440,182

1,164,373

2,430,413

2,172,107

1,441,184

1,165,373

29 | The Chartered Institute of Legal Executives

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

17. DEFERRED TAX

Deferred tax liabilities relating to depreciaton

2015 £

2014 £

2015 £

2014 £

(49,513)

(59,803)

10,290

(30,926)

18. TRADE AND OTHER PAYABLES Group

Company

2015 £

2014 £

2015 £

2014 £

Payable to trade suppliers

130,035

227,030

110,948

142,618

Other payables

401,091

374,408

997

Social security and other taxes

219,187

206,248

85,583

102,327

Accruals

853,787

609,403

481,737

494,092

44,488

Tax payable Amounts owed to subsidiary

179,295

1,648,588

1,417,089

1,085,427

739,037

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: 2015 £

2014 £

Less than one year

23,957

13,183

Later than one year but less than five years

76,975

113,821

100,932

127,004

ANNUAL REPORT AND ACCOUNTS | 30

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) FOR THE YEAR ENDED 31 DECEMBER 2015

20. CONTINGENT LIABILITY On 5 January 2015, the Institute entered into an agreement to provide a draw-down loan facility of up to £1,000,000 to the CILEx Compensation Fund (‘the Fund’) for the purpose of establishing a compensation fund in accordance with the provisions of the Legal Services Act 2007 (Chartered Institute of Legal Executives) (Modification of Functions) Order 2014 made on 8 December 2014. The Compensation Fund is an independent legal entity and is limited by guarantee. CILEx Regulation Ltd, a subsidiary of CILEx, carries out the regulation of authorised entities. At the date of signing the accounts, there were 3 authorised entities being regulated and no claims have been received.

31 | The Chartered Institute of Legal Executives

The Fund is a discretionary fund of last resort and will consider eligible claims for compensation from clients of entities regulated by CILEx Regulation who have suffered loss or hardship as a result of the regulated entity having misappropriated or failed to account for the client’s money. For a claim to be considered by the Fund, it must have exhausted all other means of redress, including any insurance the regulated entity has in place. The claim will be put to the Fund’s indemnity insurance, if eligible, for settlement. The cover provides for £1,000,000 per claim, £2,000,000 per authorised entity and £10,000,000 in the aggregate. The Trustees of the Fund may call on the loan facility to pay eligible claims that have exhausted all other means of redress, including the Fund’s own indemnity insurance.

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES BENEVOLENT FUND CILEx

benevolent fund

TRUSTEES ANNUAL REPORT YEAR ENDED 31 DECEMBER 2015

Immediate past president Frances Edwards and Donna Hart FCILEx The Trustees present their report and the financial statements of the Charity for the year ended 31 December 2015. REFERENCE AND ADMINISTRATIVE DETAILS Registered charity name The Chartered Institute of Legal Executives Benevolent Fund Charity registration number 295527 THE TRUSTEES The Trustees who served the Charity during the period were as follows: Mrs D Burleigh Miss J Arram Mrs S Barton Mr P Clark (Chair) Mr S Wells (Vice - Chair)

Auditor Moore Stephens LLP 150 Aldergate Street London EC1A 4AB STRUCTURE, GOVERNANCE AND MANAGEMENT Legal Status The Institute of Legal Executives Benevolent Fund was registered as a charity on 27 February 1987 and changed its name to The Chartered Institute of Legal Executives Benevolent Fund on 6 July 2012. It is governed by its Trust Deed dated 19 May 1987. Organisation The Chartered Institute of Legal Executives appoints all new Trustees who hold office for a term of five years and are then eligible for re-appointment. The Trustees hold at least two face to face meetings in each year. Day to day administration of the Charity is delegated to the CILEx. The services provided to the Benevolent Fund include auditing, data protection, fundraising, data management, records management, marketing and governance.

ANNUAL REPORT AND ACCOUNTS | 32

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES BENEVOLENT FUND

TRUSTEES ANNUAL REPORT YEAR ENDED 31 DECEMBER 2015

Reserves Policy Currently, The Chartered Institute of Legal Executives bears the majority of the Charity’s administrative costs and the Trustees are grateful for this assistance. The Charity requires long-term reserves to reduce the impact of risk should The Chartered Institute of Legal Executives no longer be able to bear the administrative costs of the Charity and there is a shortfall in donations to ensure that the Charity can continue its activities. In considering the appropriate level of reserves the Trustees took into account the operating costs of the Charity as well as the amount of expenditure for three years which amounts to approximately £125,000. The Trustees review the Reserves Policy annually and have been tasked during 2015 to decide upon appropriate investment of the surplus reserves that are currently held, as to bring the reserves figure in line with the current policy. Risk Management The Trustees have assessed the major risks to which the Charity is exposed and are satisfied that systems are in place to mitigate the Charity’s exposure to those risks. Public benefit The trustees have referred to the guidance contained in the Charity Commission’s general guidance on public benefit, when reviewing their aims and objectives and in planning the charity’s future activities. OBJECTIVES AND ACTIVITIES The primary objective of the Charity is to provide assistance to persons in need who are or who have been members of The Institute and their families or dependents. Assistance is given by payment of grants or providing advice and information. Income is generated by way of donations, gifts and from investments. We are here to help members and/or their dependents; both financially and with appropriate advice. We hope that members will make a point of letting us know of any others in need, as they may be reluctant to approach us themselves. Grants The Trustees decide, based on applications received from persons in need, to whom grants of assistance should be made. Grants are made to help persons in financial difficulties due to unemployment, illness or other misfortune. ACHIEVEMENTS, PERFORMANCE AND FINANCIAL REVIEW The results for the year, and the Charity’s financial position at the end of the year, are shown in the attached financial statements.

33 | The Chartered Institute of Legal Executives

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES BENEVOLENT FUND

TRUSTEES ANNUAL REPORT YEAR ENDED 31 DECEMBER 2015

Approaches to the Charity in 2015 for financial assistance were slightly below those in 2014. In 2015, a number of the applicants who approached the Fund were seeking assistance that was outside the remit of the Fund. The Trustees in many of these cases were able to provide support by signposting those applicants to other charities for assistance. The Trustees would hope donations increased in 2016 so more support can be given to those in need. The aim is to promote the fund via Twitter, e-newsletter and the CILEx website. Successful applicants in 2015 were a mixture of current and former members of The Chartered Institute of Legal Executives. The Charity assisted the majority of applicants with the costs of essential bills such as utility bills, mortgage arrears and childcare costs. Examples are shown below under Cases – A Digest. The trustees greatly appreciated the donations made to the Fund during 2015 from both former and current members of The Chartered Institute of Legal Executives and also a number of CILEx Branches. The majority of the CILEx Benevolent Fund’s monies are invested to earn interest. The decrease in interest rates did have an adverse effect

on the Fund’s government stock investment. The trustees encourage more CILEx members to direct some of their charitable giving to the Fund to ensure that it can continue to meet calls for assistance from disadvantaged members and former members. The tax advantages to the Fund from Gift aided donations are especially welcome. Cases – A Digest Some examples of cases dealt with in 2015 are shown below. These two examples show the range of recipients and the variety of problems faced. Ms C is Graduate member of The Chartered Institute of Legal Executives. Ms C is married and both she and her husband were made redundant. The Fund was able to assist Ms C with a contribution towards her car repairs to assist her in seeking work. Ms L is an Associate member of The Chartered Institute of Legal Executives. Ms L has two children. The family were experiencing financial difficulties after the separation from her partner. The fund was able to make a contribution towards the cost of a new boiler.

ANNUAL REPORT AND ACCOUNTS | 34

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES BENEVOLENT FUND

TRUSTEES ANNUAL REPORT YEAR ENDED 31 DECEMBER 2015

PLANS FOR FUTURE PERIODS

for their kind support during 2015:

The Charity will continue, where appropriate, to provide financial support and advice to members and/or their dependents seeking assistance.

P Clarke, BJ Claydon, J Wells, JS Savage, The London Metropolitan University and LJ Shaw.

The Trustees will continue to actively review the Benevolent Fundâ&#x20AC;&#x2122;s position to increase its fundraising initiatives to provide support to applicants. The trustees are also in the process of undertaking a complete review of the charity, including research among members to investigate levels of awareness about its activities and how it can become more relevant to the needs of the CILEx community. Depending on the results, the charity may plan changes to both the services that it offers and the way in which it delivers them.

The Trustees would also like to acknowledge the support given by The Chartered Institute of Legal Executives Somerset Branch, The Legal Charities Garden Party, The Chartered Institute of Legal Executives and its Board of Directors. The Trustees gratefully acknowledge all anonymous donations made during 2015 and those made via Easy Fundraising. The Trustees appreciate all the help members give to ensure that the Benevolent Fund can provide support to all those who have reason to ask for it. The Trustees can assure members from the grateful letters they receive that the assistance provided is highly appreciated. Please help the Trustees ensure that this can continue.

ACKNOWLEDGEMENTS RESPONSIBILITIES OF THE TRUSTEES The Trustees are grateful to all those who have contributed in any way to its work during 2015. In particular, the Trustees would like to thank the following members

35 | The Chartered Institute of Legal Executives

The Charityâ&#x20AC;&#x2122;s Trustees are responsible for preparing the Trustees Annual Report and the financial statements in accordance with applicable law and regulations.

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES BENEVOLENT FUND

TRUSTEES ANNUAL REPORT YEAR ENDED 31 DECEMBER 2015

The law applicable to charities in England and Wales requires the Trustees to prepare financial statements for each financial year. Under that law the Trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Charity and the income and expenditure of the Charity for that period. In preparing these financial statements, the Trustees are required to: · select suitable accounting policies and then apply them consistently; · observe the methods and principles in the Charities SORP; · make judgements and accounting 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 Charity will continue in operation.

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the Charity’s transactions and disclose with reasonable accuracy at any time the financial position of the Charity and enable them to ensure that the financial statements comply with the Charities Act 2011. They are also responsible for safeguarding the assets of the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. AUDITOR Chantrey Vellacott DFK LLP has merged its practise with Moore Stephens LLP and now practises under the name of Moore Stephens LLP. A resolution to appoint Moore Stephens LLP as auditor will be proposed at the forthcoming Annual General Meeting. Signed on behalf of the trustees Mr P Clark Trustee & Chair 26 May 2016

ANNUAL REPORT AND ACCOUNTS | 36

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES BENEVOLENT FUND

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES BENEVOLENT FUND YEAR ENDED 31 DECEMBER 2015

We have audited the financial statements of The Chartered Institute of Legal Executives Benevolent Fund for the year ended 31 December 2014 on pages 39 to 43. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the Charity’s Trustees, as a body, in accordance with section 144 of the Charities Act 2011 and regulations made under section 154 of that Act. Our audit work has been undertaken so that we might report to the Charity’s Trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Charity and the Charity’s Trustees as a body, for our audit work, for this report, or for the opinions we have formed. RESPECTIVE RESPONSIBILITIES OF TRUSTEES AND AUDITOR As explained more fully in the Trustees Annual Report, the Trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with regulations made under section 154 of that Act. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the charitable company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Trustees; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the reports and financial statements to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

37 | The Chartered Institute of Legal Executives

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES BENEVOLENT FUND

INDEPENDENT AUDITOR’S REPORT TO THE TRUSTEES OF THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES BENEVOLENT FUND (Continued) YEAR ENDED 31 DECEMBER 2015

OPINION ON FINANCIAL STATEMENTS

• the information given in the Trustees Annual Report is inconsistent in any material respect with the financial statements; or

In our opinion the financial statements: • the Charity has not kept adequate accounting records; or • give a true and fair view of the state of the Charity’s affairs as at year ended 31 December 2014 and of its incoming resources and application of resources for the year then ended;

• the financial statements are not in agreement with the accounting records and returns; or

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• we have not received all the information and explanations we require for our audit.

• have been prepared in accordance with the requirements of the Charities Act 2011.

Moore Stephens LLP Chartered Accountants and Registered Auditor LONDON

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

26 May 2016

We have nothing to report in respect of the following matters where the Charities Act 2011 requires us to report to you if, in our opinion:

ANNUAL REPORT AND ACCOUNTS | 38

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES BENEVOLENT FUND

STATEMENT OF FINANCIAL ACTIVITIES YEAR ENDED 31 DECEMBER 2015

Note

Total Funds 2015 £

Total Funds 2014 £

INCOMING RESOURCES Incoming sources from generating funds: Voluntary income

2,187

3,111

Investment income

366

2,877

3,477

(2,966)

(2,391)

(2,966)

(2,391)

(89)

1,086

Total incoming resources RESOURCES EXPENDED Charitable activities Total resources expended

NET OUTGOING RESOURCES BEFORE OTHER RECOGNISED GAINS AND LOSSES Net movement in funds

(89)

1,086

Total funds brought forward

188,259

187,173

Total funds carried forward

188,170

188,259

Reconciliation of funds

The charity had no gains and losses other than those shown above. All of the above amounts relate to continuing activities.

The notes on pages 10 to 13 form part of these financial statements.

39 | The Chartered Institute of Legal Executives

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES BENEVOLENT FUND

BALANCE SHEET 31 DECEMBER 2015

Note

2015 £

2014 £

CURRENT ASSETS 8

Cash at bank Accured income Total current assets

186,626 1,559

188,259

188,185

188,259

CURRENT LIABILITIES 15

Net current assets

188,170

188,259

Total assets less current liabilities

188,170

188,259

188,170

188,259

188,170

188,259

Other creditors

FUNDS 10

Unrestricted income funds Total funds

These financial statements were approved by the board of Trustees on the 26 May 2016 and are signed on their behalf by:

Mr P Clark Trustee & Chair

Mr S Wells Trustee & Vice Chair

The notes on pages 10 to 13 form part of these financial statements.

ANNUAL REPORT AND ACCOUNTS | 40

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES BENEVOLENT FUND

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2015

1. ACCOUNTING POLICIES Basis of accounting The financial statements have been prepared under the historical cost convention, except for investments which are included at market value and in accordance with applicable United Kingdom accounting standards, the Statement of Recommended Practice “Accounting and Reporting by Charities” issued in March 2005 (SORP 2005) and the Charities Act 2011. Cash Flow Statement The charitable company have taken advantage of the exemptions available to not produce a cash flow statement under Financial Reporting Standard 1 on the grounds that it is small. Incoming resources Income from interest and donations is accounted for when receivable. Resources expenses All expenditure is accounted for on the accruals basis and is recognised when there is a legal or constructive obligation to pay or where grants are being provided, at the point the grant has been approved by trustees. Expenditure items have been classified under headings that aggregate all costs related to each category. Direct charitable expenditure includes the direct costs in furtherance of the charitable company’s objectives and these are accounted for when they are incurred. Fund accounting The unrestricted general funds are funds which can be used in accordance with the charitable objects at the discretion of the Trustees.

41 | The Chartered Institute of Legal Executives

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES BENEVOLENT FUND

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2015

2. VOLUNTRY INCOME Unrestricted Funds £

Total Funds 2015 £

Total Funds 2014 £

1,083

Member donations and gifts

200

911

Legal Charities Garden Party

1,534

2,200

2,817

3,111

Unrestricted Funds £

Total Funds 2015 £

Total Funds 2014 £

366

Unrestricted Funds £

Total Funds 2015 £

Total Funds 2014 £

2,737

1,974

150

417

2,887

2,391

Total Funds 2015 £

Total Funds 2014 £

DONATIONS Non-member donations and gifts

3. INVESTMENT INCOME

Bank interest receivable

4. COST OF CHARITABLE ACTIVITIES BY FUND TYPE

Grant for assistance Support costs

5. ANALYSIS OF SUPPORT COSTS

Bank charges Marketing costs

358

417

6. STAFF COSTS AND EMOLUMENTS No salaries, benefits or expenses were paid to any of the members of the board of Trustees during the year to 31 December 2015 (2014: £nil). 7. TAXATION All of the activities of the charity carried out during the year are exempt from taxation in respect of income or capital gains received within categories covered by Part 10 Income Tax Act 2007 or section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.

ANNUAL REPORT AND ACCOUNTS | 42

THE CHARTERED INSTITUTE OF LEGAL EXECUTIVES BENEVOLENT FUND

NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2015

8. CURRENT ASSETS

Cash at bank

2015 £

2014 £

186,626

188,259

1,559

Legal Charitites Garden party accrued income

188,185

188,259

2015 £

2014 £

9. CURRENT LIABILITIES

Amounts due to CILEx

10. UNRESTRICTED INCOME FUNDS

General Funds

Balance at 1 January 2015 £

Incoming resources £

Outgoing resources £

Gains and losses £

Balance at 31 December 2015 £

188,259

2,877

2,966

188,170

11. ANALYSIS OF NET ASSETS BETWEEN FUNDS Net current assets £

Total £

Unrestricted income funds

188,170

Total funds

188,170

43 | The Chartered Institute of Legal Executives

NOTES

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

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