*

Notes to the Financial Statements
for the year ended 31st October 2004

1. Accounting Policies

Basis
The accounts are prepared on an accruals basis.

Depreciation
Depreciation is provided at the undernoted rates, calculated to write off the cost of these items over their estimated useful lives:

- Computer Software & Equipment 33% straight line
- Motor Cars 25% straight line

Investments
Investments are stated at cost. Investments are only stated at below cost where the Committee believe their diminution in value is permanent.

2. Contingent Liability
Sixteen claims are currently in progress against the Scottish Solicitors’ Guarantee Fund, arising from the work of eight member firms. These claims have arisen as part of the normal course of business of the Guarantee Fund and the Committee are of the opinion that all claims can be settled by the Guarantee Fund.

3. Investments
 
2004
£000
 
Cost
At beginning of year 818
Additions 84
Disposals (154)
*
   
At end of year 748
   
*
Net Book Value at 31st October 2004 748
*
   
*
Net Book Value at 1st November 2003 818
*

4 Tangible Fixed Assets
   
Computer Motor
Software Vehicles Total
£000 £000 £000
 
Cost
At beginning of year – 43 43
Additions 11 – 11
Disposals – – –
*
At end of year 11 43 54
*
 
Depreciation
At beginning of year – 18 18
Charge for year 4 11 15
On disposals – – –
*
At end of year 4 29 33
*
       
*
Net Book Value 31st October 2004 7 14 21
*
       
*
Net Book Value 31st October 2003 – 25 25
*

5. Related Party Transactions
The Law Society of Scotland
Members of the Council of the Law Society of Scotland are also members of the Scottish Solicitors’ Guarantee Fund Committee. At the year-end, a balance of £28,932 was due to the Law Society of Scotland from the Scottish Solicitors’ Guarantee Fund to cover outstanding administration and running costs.