23 Is 1-3 I'S I 3'/ ;P/ojNo 2 ACCOUNTS P COKI ; PUI ',kv G f DIM11-;1 iL)I.q The Institute of Economic Affair s (A Charitable Company Limited by Guarantee ) REPORT AND FINANCIAL STATEMENT S 31 December 2005 Company Registration No . 755502 Registered Charity No . CC/235351 The Institute of Economic Affairs TRUSTEES AND OFFICERS Company Registration Number : 755502 Charity Registration Number : CC/23535 1 TRUSTEE S Professor DR Myddelton Chairman Kevin Bel l Robert Boyd Michael Fisher Michael Hintze Malcolm McAlpine Professor Patrick Minford Professor Martin Ricketts Professor J R Shackleton Sir Peter Walter s Linda Whetstone SECRETARY C Batty REGISTERED OFFICE 2 Lord North Street Westminster London SW 1P 3LB AUDITOR S Baker Till y Chart ered Accountants 1 S` Floor 46 Clarendon Road Watford Hert s WD17 1JJ BANKER S Barclays Bank pl c Pall Mall Corporate Banking Centre Pall Corporate Group PO Box 15163 London SWIA 1QD Page 1 The Institute of Economic Affairs TRUSTEES' REPORT The Trustees submit their report and the financial statements of The Institute of Economic Affairs for the year ended 31 December 2005 . STATUS The organisation is a charitable company limited by guarantee, established through a trust deed in November 1955 and incorporated in 1963 . It is a registered charity . The charitable company was established under a Memor an dum of Association which set out its objects and powers, and is gove rn ed under its Articles of Association . OBJECTS The company is a charity and its principal activi ty during the year was the promotion and advancement of lea rn ing by research into economic and political science, and by educating the public therein . FINANCIAL RESULTS Total incoming resources for the year were ?1,137,000 and total resources expended were ?1,168,000, leaving net resources expended for the year of ?31,000, of which net incoming resources of ?17,000 were in relation to restricted projects . After allowing for realised and unrealised gains and losses on investments, the net increase in funds was ?203,000 . ORGANIS .'.TION The IEA's activities are grouped into the following main areas : Academic programmes : o Research o Publications o Website o Conferences, lectures, seminars and special events o Student/teacher outreach o Fundraising o Administration and support The IEA is managed by the Director General, who oversees all aspects of its activities and is responsible for achieving its goals, reporting three times a year to the full board of Trustees and more frequently to its Finance and General Purposes Committee . REVIEW OF ACTIVITIES AND ACHIEVEMENT S Our mission is : "To improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems . " We aim to achieve our mission by undertaking th e various academic programmes listed above under Organisation . During 2005 the Institute published 9 titles, an d distributed a fu rther 12 titles as well as copublishing 3 titles . We further developed our website . The IEA organised 27 major conferences and many more lunch, dinner and evening events, including a number of events as pa rt of the student/teacher outreach programme . This represents a similar level of output to recent years. It is difficult to measure the impact of our work, especially over a period as sho rt as one year, since our objec ti ves are essentially long-term, relating to decades or even generations . In pa rticular our authors are encouraged to follow their economic analysis wherever it leads th em, regardless of what may currently be regarded as `politically possible' . Hence even if some lEA publications may not have any immediate impact, that by no means represents failure . Some of our greatest past successes came to fruition only after several years. Our activities each year are best regarded as part of a cumulative effo rt culminating in a substan tial `stock' of work-in-progress at any given time . We do take great care to maintain th e quality of our output, with all our main publications being exte rn ally refereed . We continue to benefit from a network of distinguished academic advisers . Page 2 The Institute of Economic Affairs TRUSTEES' REPORT FUTURE STRATEG Y The lEA intends to continue to develop and enhance its programmes in 2006, especially the website and the outreach programme for students and teachers . We recognise our need to attract new readers ( and new authors) . Currently our main focus, which we review regularly, is on four areas related to free markets : regulation, taxation, the welfare state and the impact of the European Union . RESERVES POLIC Y The Trustees' policy, which is reviewed annually, is to maintain sufficiently liquid unrestricted reserves equivalent to at least six months' expenditure . We believe this is adequate to enable us to maintain normal operations in the event of possible seasonal or other fluctuations in donations and/or expenditure . The fr ee rese rv es of the Charity as at 31 December 2005, defined as being unrestricted, undesignated funds not represented by fixed assets, were ?184,000 . INVESTMENT POLIC Y The Institute's educational mission has a long-term orientation, as noted above, whereas its ability to car ry out its work depends on att racting annual donations in a highly competitive fund-raising environment . Accordingly the Trustees' policy is to invest conse rv atively, mostly in managed funds and gove rn ment securities . Investment income is not reinvested but used to suppo rt th e Institute's work. Investment results are reviewed regularly by the Treasurer an d the Fin an ce an d General Purposes Commi tt ee, and th e policy is reviewed annually by the full board of Trustees . GRANT MAKING POLIC Y The Trustees make occasional grants to individuals to suppo rt their research and to a ttend conferences . These are often from restricted funds raised speci fically for such purposes . From time to time, grants may be made to o th er institutes, but this is not a regular pa rt of the Institute's work . All such projects are assessed in terms of the Institute's mission to improve underst an ding of the requirements of a free socie ty by analysing and expounding the actual an d potential role of markets in solving economic and social problems . RISK REVIEW The primary risks to which the IEA is exposed are reputational, loss of key personnel, and financial . Reputational risk centres on the quality and integrity of the Institute's research . All the IEA's major publications are peer reviewed . The IEA takes care to maintain its strict independence from commercial, political or other interests . It does not accept commissions to perform research on behalf of others . The performance of key personnel is reviewed annually, either by the Director General or by a small committee of Trustees, to check that both employer's and employee's objectives are being satisfied . As with any small organisation, it is not possible completely to protect against the loss of key people . Financial risks are largely covered by the Reserves and Investment policies referred to above . The Trustees, either at regular Board meetings, or through the Finance and General Purposes Committee, examines at least once a year the major strategic, operational and financial risks which the Institute faces . Page 3 The Institute of Economic Affairs TRUSTEES' REPORT TRUSTEES The following trustees have held office since 1 Janua ry 2005 : Professor DR Myddelton Chairman Kevin Bel l Robert Boyd Michael Fisher Michael Hintze appointed 1 July 2005 Malcolm McAlpin e Professor Patrick Minford Professor Mart in Rickett s Professor J R Shackleton appointed 1 July 2005 Sir Peter Walters Linda Whetston e None of the trustees has an interest, direct or indirect, in any contract entered into by the Institute . The Trustees may from time to time, and at any time, appoint any person to be a Trustee, provided that the prescribed maximum of twelve Trustees be not exceeded . Any Trustee so appointed shall retain office until the next Annual General Meeting, but will then be eligible for re-election . Thereafter trustees resign, but may be eligible for re-election, on a three-year rotating b as is . New Trustees are `trained' mostly on the job by a ttending meetings of Trustees . They are provided with notes covering the institute's mission, histo ry , organisation, gove rnance and details of the other Trustees, together with the latest Trustees' repo rt and accounts . TAXATION STATU S The company is a registered chari ty and, as such, for taxation purposes is entitled to exemption under the Income and Corporation Taxes Act 1988 . AUDITORS A resolution to appoint Baker Tilly, Cha rtered Accountants, as auditors will be put to the members at the annual general meeting. By order of the board Professor DR Myddelton Chairma n 2--) ~MC' 2006 Page 4 The Institute of Economic Affair s TRUSTEES' RESPONSIBILITIES IN THE PREPARATION OF FINANCIAL STATEMENT S The Trustees are required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charity and the incoming resources and application of resources, including the net income and expenditure for the year . In preparing those financial statements, the Trustees are required to : a . select suitable accounting policies and then apply them consistently ; make judgements and estimates that are reasonable and prudent ; c . state whether applicable accounting standards and statements of recommended practice have been followed, subject to any material departures disclosed and explained in the financial statements ; an d d . prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue on that basis . The Trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charity and to enable them to ensure that the financial statements comply with the requirements of the Companies Act 1985 . 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 . Page 5 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF THE INSTITUTE OF ECONOMIC AFFAIR S We have audited the financial statements on pages 7 to 16 . This report is made solely to the charitable comp an y's members, as a body, in accordance with section 235 of the Companies Act 1985 . Our audit work has been unde rt aken so th at we might state to the charitable comp any's 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 charitable comp any an d the cha ri table company's members as a body, for our audit work, for this report, or for the opinions we have formed . Respective responsibilities of trustees and auditors The responsibilities of the trustees (who are also the directors of The Institute of Economic Affairs for the purposes of company law) for preparing the Annual Repo rt an d the fi nancial statements in accordan ce wi th applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of Trustees' Responsibilities. Our responsibility is to audit the fin ancial statements in accordance with relev an t legal an d regulatory requirements and Inte rn ational Standards on Auditing (UK and Ireland) . We repo rt to you our opinion as to whether the fin an cial statements give a true and fair view and are properly prepared in accordance with the Companies Act 1985 . We also repo rt to you if, in our opinion, th e Annual Repo rt is not consistent wi th the finan cial statements, if th e charitable comp any has not kept proper accounting records, if we have not received all the information and expl an ations we require for our audit, or if information specified by law regarding trustees' remuneration and transactions wi th the charity is not disclosed. We read other information contained in the Annual Repo rt, an d consider whe ther it is consistent with the audited fin an cial statements . This other information comp rises only th e charitable company Trustees' Repo rt. We consider the implications for our report if we become aware of any apparent misstatements or materi al inconsistencies with the financial statements . Our responsibilities do not extend to an y oth er information . Basis of audit opinion We conducted our audit in accord an ce wi th International Standards on Auditing (UK and Irel an d) issued by the Auditing Practices Board . An audit includes examination, on a test basis, of evidence relevant to the amounts an d disclosures in the fi n an cial statements. It also includes an assessment of th e signific an t estimates an d judgments made by the trustees in the preparation of the financial statements, and of whether th e accounting policies are appropriate to the charitable comp any's circumst an ces, consistently applied an d adequately disclosed. We planned an d performed our audit so as to obtain all information and expl anations which we considered necessa ry in order to provide us wi th sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the fin ancial statements . Opinion In our opinion the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the charitable company's affairs as at 31 December 2005 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended and ave bee properly prepared in accordance with the Companies Act 1985 . r B Registered Auditor ~ered Accountants IS` Floor 46 Clarendon Road Watford Herts WD17 1JJ Z-7 /612006 Page 6 The Institute of Economic Affair s STATEMENT OF FINANCIAL ACTIVITIES (INCLUDING AN INCOME AND EXPENDITURE ACCOUNT ) For the year ended 31 December 2005 Total Unrestricted Notes funds ?000 INCOMING RESOURCE S Membership donations 1 757 Activities in furt herance of the charity's objects : Academic programme : Publications and subscriptions Lectures, conferences and seminars Other incom e Activities for generating funds : Investment incom e Tota l 200 4 ?00 0 692 Restricte d funds ?000 113 2005 ?000 870 94 130 21 14 8 94 - 130 21 14 8 89 184 4 27 7 1 ,00 3 Interest receivabl e Total incoming resources RESOURCES EXPENDED Charitable expenditure Costs of activities in fu rtherance of the charity's objects : Membership support Academic programme : Publications Lectures, conferences and seminar s 1,024 113 1,137 115 302 276 214 98 67 1,072 70 13 13 96 115 372 289 214 111 67 1,168 55 377 35 5 18 8 152 64 1,19 1 Communications and distribution Support cost s Management and administration Total resources expende d NET RESOURCES EXPENDED BEFORE TRANSFERS Gross transfers between fund s NET RESOURCES EXPENDED Gains/(losses) on investment assets Realise d 2 3 4 11 (48) (48) 17 17 17 17 (31) (31) 5 (2) (28) 231 203 (188 ) (188 ) (1 ) (189 ) 64 (125 ) 8 Losses on disposal of fixed assets NET INCOME/(EXPENDITURE) Unrealised gains on investment assets NET MOVEMENT IN FUND S TOTAL FUNDS BROUGHT FORWARD 8 5 (2) (45) 231 186 1,997 50 2,047 2,172 TOTAL FUNDS CARRIED FORWARD 14 2,183 67 2,250 2,047 All of the above results are derived from continuing activities . There ar e no recognised gains or losses other than those dealt with in th e statement of financial activities . Page 7 The Institute of Economic Affairs BALANCE SHEET 31 December 2005 Notes 2005 ?000 2004 ?00 0 FIXED ASSET S Tangible assets Investments 8 7 777 1,332 2,109 88 1 1,024 1,90 5 CURRENT ASSETS Debtors Cash at bank and in hand 9 90 190 280 87 23 6 32 3 (181 ) CREDITORS : Amounts falling due within one year 10 (139) NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES 141 2,250 142 2,04 7 FUND S Restricted funds 11 67 50 Unrestricted fund s Designated funds (including revaluation reserve ?399,000) 12 1,999 1,813 General funds 13 184 18 4 TOTAL FUNDS 14 2,250 2,04 7 Approved by the Trustees on and signed on their behalf by ~ ~ PA4z- 200 6 vkeg[~Professor DR Myddelton Trustee Page 8 The Institute of Economic Affairs ACCOUNTING POLICIE S BASIS OF ACCOUNTIN G The financial statements have been prepared under the historical cost convention modified to include the revaluation of fixed asset investments at market value, and in accordance with the Companies Act 1985 and follow the recommendations in Accounting and Repo rting by Charities : Statement of Recommended Practice, issued in October 2000 . TANGIBLE FIXED ASSET S Fixed assets are stated at historical cost . Depreciation is provided on all tangible fixed assets other than investment properties at rates calculated to write each asset down to its estimated residual value evenly over its expected useful life, as follows :Freehold property Office equipment over 40 years over 3 year s STOCKS AND WORK IN PROGRES S No value for accounts purposes is attributed to stocks of unsold publications . PENSION CONTRIBUTIONS The Institute operates a defined contribution scheme . Contributions are charged to the Statement of Fin an cial Activities as incurred . INCOMING RESOURCE S Income from donations is included in incoming resources when these are receivable, except : o when donors specify that donations given to the charity must be used in future accounting periods, the income is deferred until those periods ; o when donors impose conditions, which have to be fulfilled before the charity becomes entitled to use such income, the income is deferred and not included in incoming resources until the preconditions for use have been met . Subscription income is credited to incoming resources for the subscription period covered . All other income including income from investments is credited to incoming resources when receivable by the charity . RESOURCES EXPENDED All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the catego ry . Where costs cannot be directly attributable to pa rticular headings they have been allocated to ac ti vities on a basis consistent with use of the resources . FOREIGN CURRENC Y Assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date . Tran sactions in foreign currencies are recorded at the rate ruling at the date of the tran saction. All differences are taken to the statement of financial activities . RESEARCH EXPENDITURE Research expenditure is w ritten off in the accounts as it is incu rred . Page 9 The Institute of Economic Affairs ACCOUNTING POLICIE S RESTRICTED AND DESIGNATED FUND S Restricted funds are those donated to the Institute for a specific purpose . Designated funds are unrestricted funds for which the Trustees have currently designated specific purposes . INVESTMENTS Investments held as fixed assets comprise equities, open-ended funds, fixed interest securities and currency and are stated at year end market value . Property is stated at the trustees' best estimate of year-end market value . Page 10 The Institute of Economic Affairs NOTES TO THE FINANCIAL STATEMENTS for the vear ended 31 December 200 5 MEMBERSHIP DONATIONS 2005 ?000 870 2005 ?000 38 14 200 4 ?00 0 69 2 2004 ?00 0 74 13 Foundations, corporate and individuals 2 SUPPORT COSTS Salaries and staff costs Printing, postage and stationery Premises expenses Sundry office expenses 53 6 I11 55 10 15 2 3 MANAGEMENT AND ADMINISTRATION 2005 ?000 59 5 3 67 2004 ?000 57 7 64 Salaries and staff costs Audit and accountancy Legal and professional 4 NET INCOMING RESOURCES/(RESOURCES EXPENDED) 2005 ?000 2004 ?00 0 Net incoming resources/(resources expended) for the year are state d after charging : Depreciation Auditor's remuneration 31 5 30 7 5 TAXATION The Institute is not liable to corporation tax on its income and gains in th e current year to th e extent that they are applied for charitable purposes . Page 11 The Institute of Economic Affairs NOTES TO THE FINANCIAL STATEMENTS for the vear ended 31 December 200 5 6 EMPLOYEES 2005 2004 No . No . The average monthly number of persons employed by the Institut e during the year was : Office and management 12 12 2005 ?000 Staff costs for above persons : Wages and salaries Social security costs 200 4 ?00 0 43 2 49 416 46 Other pension costs 38 500 38 51 9 The number of employees whose emoluments as defined for taxation 2005 2004 purposes amounted to over ?50,000 in the year was as follows : No . No . ? 50,001 - ? 60,000 1 ?110,001 - ?120,000 1 1 1 The employees earning over ?50,000 participate in the company pension scheme . Contributions paid in the year in respect of these employees amounted to ?28,000 (2004 ?28,000) . No trustee, or person related or connected to them, has received any remuneration or reimbursement of expenses from the Institute during the year . 7 TANGIBLE FIXED ASSETS Freehold property Equity share in leasehold property Offi c e equipment Total ?000 Cost or valuati on 31 December 2004 Additions Disposals Transfer to investments 31 December 2005 955 955 ?000 71 (71) - ?000 109 1 ( 50) 60 ?00 0 1,13 5 1 (50 ) (71 ) 1,01 5 Depreciatio n 31 December 2004 161 Charged in the year 24 Eliminated on disposal 31 December 2005 185 - 93 25 4 7 31 - (47) (47) - 53 23 8 Net book valu e 31 December 2005 770 - 7 777 31 December 2004 794 71 16 881 The trustees are of the opinion that the market value of freehold property at 31 December 2005 would exceed the depreciated net amount shown in the financial statements . Page 12 The Institute of Economic Affairs NOTES TO THE FINANCIAL STATEMENTS for the vear ended 31 December 200 5 8 FIXED ASSETS Open- Fixed INVESTMENTS end interes t Equities funds securities Currency Property Total ?000 ?000 ?000 ?000 ?000 ?00 0 Market value at 31 December 200 4 230 353 412 29 1,024 107 - Additions Disposals (82) - (37) Transfer fro m tangible fixe d assets Realised gain - - 5 Unrealised gain 123 79 Market value at 31 December 2005 378 Historical cost a t 31 December 2005 224 13 - - 12 0 (119 ) - 71 29 71 5 23 1 432 380 42 100 1,33 2 308 359 42 71 1,00 4 The following investments represent more than 5% of the value of the chari ty' s investment port folio : 2005 200 4 ?000 ?00 0 Treasury 5 .75% stock 2009 Treasury 2 .5% stock 2020 Ga rt more UK Index Fund Fidelity Funds Inte rnational Fund (Luxembourg) Franklin Templeton Global Growth Fund (Luxembourg) 187 183 269 74 89 18 7 17 0 22 3 56 75 Equities and fi xed interest securities are held directly by the Chari ty . Equities include ?31,00 0 (2004 ?65,000) and open-ended funds ?163,000 (2004 ?131,000) of non-UK investments . Property represents an equity share in leasehold property , and is included in the accoun ts at th e trustees' assessment of market value . 9 DEBTORS Due within one year : Trade debtors O th er debtors Income tax recoverable Prepayments and accrued income 2005 ?000 2004 ?000 53 62 1 1 12 1 2 24 1 2 90 87 Page 13 The Institute of Economic Affair s NOTES TO THE FINANCIAL STATEMENTS for the vear ended 31 December 200 5 10 CREDITORS : Amounts falling due within one year Trade creditors Taxation and social securi ty Other creditors and accruals Deferred income 2005 ?000 29 19 60 31 139 200 4 ?00 0 61 20 42 58 18 1 11 RESTRICTED FUND S The income funds of the Institute include restricted funds comprising the following unexpended balance of donations and grants held in trust to be applied for specific purposes : Movement in funds At 31 December 2004 ?000 Classical Liberal Publication Student and Teacher Outreach Programme UK's relationship with Europe publication updat e European Free Trade Publication Railways and Goods Publication British Countryside Publication Foundation for Business Responsibility Lord Harri s Travel Fund Exxon Mobil RLH Foundation Alan Walters "364 Economists" Book Foundation for Education in Economics Bursaries Han s Rausing Fund 9 2 2 Income ?000 22 4 Expenditu re ?000 (5) (6) Transfers ?000 (1) 1 At 3 1 December 200 5 ?000 4 22 1 1 1 25 11 - 12 2 21 27 (25) (12) (13) (21) (1) - 1 26 - 3 7 15 - - 3 7 2 (13) - 50 113 (96) - 67 The Classical Liberal Publication Fund was provided by the Earhart Foundation of Ann Arbor, Michigan to support a study of social capital by Drs John Meadowcroft & Mark Pennington . The Student and Teacher Outreach Programme reflects a grant from the Templeton Foundation for subscriptions to IEA Publications for teachers . The UK's relationship with Europe publication update is a restricted fund to support research and writing by an independent scholar into this area. The European Free Trade Publication is a restricted fund to support trade research and publications by an independent scholar . Page 14 The Institute of Economic Affairs NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 200 5 The Railways and Goods Publication is now almost fully utilised and will be closed in the coming year. The British Countryside Publication Fund was provided by the Esmee Fairbairn Foundation of London, UK to support a multi-authored monograph on the economics of the countryside published in Autumn 2005 . Foundation for Business Responsibility - the second of three grants from the Foundation Business Responsibility of London, UK to support monographs, events and other activities relating to the moral aspects of the market economy . Lord Harris Travel Fund was monies collected from a range of sources to defray travel costs for Lord Harris of High Cross . The fund was partly used in February 2005 . The Exxon Mobil Fund is a research grant for Richard North . The RLH Foundation Fund reflects a grant from the RLH Foundation for a seminar for teachers and a writing competition for students . The Alan Walters balance is to fund the "364 Economists" monograph to be published in 2006 . The Foundation for Education in Economics Fund is to pay for student bursaries . The Hans Rausing Fund is to pay for the salary costs of an analyst . 12 DESIGNATED FUNDS At 31 December 2004 Income Expenditure ?000 ?000 ?000 At 31 Investment December gains Transfers 2005 ?000 ?000 ?00 0 Fixed Asset Fund Leonard Harris Fund Novak Fund 755 19 6 - (5) (2) 29 86 870 14 4 The Malcolm Fund Warren Fund Aims of Industry Fund 381 11 640 12 1,813 11 (2) (9) 39 - 43 1 163 (133) 67 0 10 231 (47) 1,99 9 The Fixed Asset Fund represents donations made to the Institute currently designated and used by the Trustees for the purpose of acquiring freehold and investment property . The Leonard Harris Fund has currently been designated by the Trustees to make grants, including funding student bursaries . The Novak Fund represents donations made to the Institute currently designated and used by the Trustees for the purpose of funding a series of annual lectures on markets and morality . The Malcolm Fund was set up with the aim of producing income to promote research into the further reduction in the size of the public sector and to promote an interest in market economy policies on the part of teachers and senior pupils . The Warren Fund is used by the Trustees to support major commitments, fund unforeseen revenue shortfalls, and to generate investment income to support the Institute's activities . Page 15 The Institute of Economic Affairs NOTES TO THE FINANCIAL STATEMENTS for the vear ended 31 December 200 5 The Aims of Industry Fund was received in 2001 and is to be used for the following purposes : (i) to fund teachers and students to attend IEA and IEA related events as Michael Ivens Fellows ; and (ii) to pay any costs associated with the awarding annually of the Free Enterprise Award . 13 UNRESTRICTED FUNDS At 31 At 31 December Investment December 2004 Income Expenditure Gains Tr an sfers 2005 ?000 ?000 ?000 ?000 ?000 ?00 0 General income and expenditure account - 1,013 (1,063) 3 47 - Other general fund 184 184 Designated Fund s (see note 12) 1,813 1,997 1,013 11 1,024 ( 1,063) (9) (1,072) 3 231 234 47 (47) - 18 4 18 4 1,99 9 2,18 3 14 ANALYSIS OF NET ASSETS BETWEEN FUNDS Designated Funds General Funds Restri cted funds Total funds ?000 Fund bal an ces at 31 December 2005 are represented by : T angible fixed assets Investments Current assets Current liabilities Total net assets ?000 ?000 ?00 0 770 1,229 1,999 7 103 213 (139) 184 67 67 777 1,33 2 28 0 (139) 2,25 0 15 PENSION SCHEME S The Institute operates a defined contribution scheme and contributions to the scheme are made to an independent insurance company . The pension costs of the Institute's scheme amounted to ?38,000 (2004 : ?38,000) . There were no contributions outstanding at the end of either th e current or preceding financial years . 16 STATUS The Institute is a company limited by guarantee and has no sh ar e capital . The Institute had 11 ( 2004 : 9) members at th e year end. The Memorandum of Association provides that members are liable to contribute a sum not exceeding ?1 each in the event of the company being wound up while they are members or within one year of ceasing to be members . Page 16