http://www.nwda.co.uk/pdf/NWDA_Annual_Accounts_2001_2002 by Northwest Regional Development Agency

Northwest Development Agency

Annual Report & Accounts

2001/02

Annual Report and Accounts 2001/02

Contents Page No 1.

Chairman's Statement

Summary of Key Achievements

Outputs and Targets, Income and Expenditure

Operational Matters

The NWOA Board

The NVVOA Executive

Financial Statements

Chairman's statement This has been another successful year for the Northwest Development Agency despite a number of unpredictable challenges. Foot and Mouth disease badl~ affected our rural economy, particularly in Cumbria. The date September 111 wil forever be linked with global terrorism. That day marked the beginning of uncertainty in the global economy and the corresponding impact on corporate

confidence. Closer to home, racial harmony was severely tested in parts of the region and factory closures and job losses continued to affect the manufacturing sector. Despite these challenges the region's economy was not as badly hit as may have been expected. As I write there is an upward trend in employment in manufacturing and consumer spending remains buoyant.

The Agency responded to these external events in a number of ways. With Government support, we acted quickly to invest ÂŁ30M to aid the recovery following the Foot and Mouth epidemic. This was followed by the preparation of a longerterm Regional Rural Recovery plan, which is expected to leverage almost ÂŁ400M of investment over the next five years, mainly from the public sector, including ÂŁ100 million from the Agency.

The Agency worked closely with partners in Burnleyand Oldham to support the Task Forces set up following disturbances in these towns. We will ensure that our programmes and work reflect the reports' recommendations to eliminate segregation and division. We responded quickly to provide support to those companies affected by job losses or closure. While we always respond to changing circumstances, our work is centred principally on developing new and existing businesses and stimulating

urban and rural regeneration. In doing these things we must ensure that necessary skills are available in the work place, appropriate infrastructure exists (particularly transport and information technology) and we continue to promote a

positive image of the NorthWest region.

This report records the Agency's key achievements during the last twelve months. It is important to recognise that many projects have a long gestation period. A good example is the regeneration of East Manchester using the Commonwealth Games as a catalyst: work began on this project several years ago. It is also important to recognise that almost everyhing we do is in partnership with other people. Building strong local delivery organisations continues to be a high priority

for us. As the new Chairman of the NorthWest Development Agency this is my one opportunity to look back in a detached way. I believe that the Agency has done a good job in the three years since it was formed and my predecessor, Lord Terry Thomas, can be proud of his contribution. Looking forward, a major activity for the coming year is the review of the Regional Strategy, which, will be published in January 2003. This is an important opportunity for everyone to contribute to the region's future. It is also an opportunity for the Agency to re-focus its priorities and to ensure that we become even more successful in driving forward the economic regeneration of Englandsnorthwest.

Key Achievements 2001/02

The following is a brief summary of the Agency's key achievements during 2001/02. A more detailed account of the Agency's activities and achievements is contained in the NWDA Annual Review 2001/02 which can be obtained from the NWDA Headquarters in Warrington and is also available on the Agency's website www.nwda.co.uk.

BUSINESS DEVELOPMENT

Science: North West Science Council established. Daresbury Science Park land purchased, incubator being developed, park layout & design

underway. SR2002 proposals input re R&D Zones for innovation and enterprise. Input to cross cutting review of Science, including role of Universities in developing regional

economies. Established links with all Research Councils.

Finance for Business: North West Equity Fund launched. (Value £35m) Rising Stars Fund launched. (Value £9.5m) Successful Objective 2 Action Plan submission. (Value £32m) Regional

Intelligence Unit formed, 450 partners involved.

Business Support: Strategic relationships with critical companies established. Regional supply projects with Ineos Chlor and BNFL.

Regional Centre of Manufacturing Excellence opened. Innovation NWDA Incubation strategy 1 policy determined. 5 incubators completed plus ongoing programme. 9 Foresight projects identified to progress novel ideas into business activity.

Cluster Development Programme Four existing Cluster programmes expanded: Aerospace, Bio-manufacturing, ICT/New Media,. Chemicals. Five new Cluster programmes became operational: Textiles, Food, Creativel Cultural, Environmental Technologies, Renewable Energy. .

Regional Cultural Strategy launched. .

Rural Economy Provision of funding and management of £30m programme to minimise the immediate impact of Foot and Mouth Disease. Regional Rural Recovery Plan established - levers in £390m of mainly public sector investment over next five years, including £1 OOm from NWDA.

investment. .

Inward Investment 18 projects creating 1 safeguarding 2436 jobs, £35.7m Private Sector

REGENERATION Single Regeneration Budget (SRB): 112 schemes managed; 14 schemes completed. Total expenditure £134m.

Regional Land Reclamation Programme: agreed step change in NWDA investment(£8m to £35m over 4 years, then maintained for a further 6 years) and started development work on

programmes. Regeneration Prospectus launched to stimulate local initiatives.

Crewe Regeneration: Bentley Task Force established and Regeneration scheme started. Major site acquisitions: Mann Island, Liverpool, major waterfront site for Fourth Grace. Liverpool City Council industrial estates.

Ancoats and North Manchester Business Park. Michelin Site, East Lancashire.

New Vision for Furness and West Cumbria: study completed and Urban Regeneration agreed with partners.

Company delivery vehicle

Liverpool/Manchester Concordat established. Market Towns programme established for 20 towns.

National Football Museum opened and achieved national registration.

SKILLS AND EMPLOYMENT Skills Development Fund:

62 projects managed. (Value £6.7m)

LSCs: Memorandum of Understanding agreed. Rapid Response Fund provided for Ineos Chlor, Cammell Laird, Corus, Michelin, Ingersoll

Rand. National Skils Festival

launched.

Framework for Regional Employment Skils Action (FRESA): Work started with partners, Framework to be produced in October 2002. Centre of Engineering Excellencè (Crewe): provision of funding.

INFRASTRUCTURE

ICT Broadband Cumbria: Study funded - now taking forward recommendations. Strategic Sites

Extended list determined and designation document issued.

Omega Site, Warrington: work started. (232 Ha site for commercial and industrial use just off the M62.). Rochdale Kingsway Business Park acquisition underway. (174.5 Ha site for industrial, commercial and leisure use)

MARKETING

Regional Marketing Forum established MORI survey completed.

englandsnorthwest regional brand developed.

Farnborough Air Show. Major

presence at Cannes international property fair (MPIM), Tatton Flower Show,

Commonwealth Games: provision of marketing support.

Promotion campaigns: "Your countryside: You're Welcome" promoting rural areas. "Fun and Games". (targeted at 25 -45 yr olds within a 2 - hour drive of the region.) Regional photography competition with Granada TV. Liverpool 1 Manchester Cultural Campaign to influence the perception of cultural offering in Liverpool and Manchester.

Summary of Outputs and Targets

land & Property

Single Regeneration Budget

Rural Programme

22,872 1,210

Regional Innovation Fund Inward Investment

0.7

2,436

35.7

Total Outputs all

Programmes:

29,523

3,229

**97,181

530

322.4

Target 2001/02 all Programmes:

27,000

2,300

120,000

500

350.0

** Two project completions slipped from 2001/02 to 2002/03 which account for the shortfall

S.ummary of Income and Expenditure . Single Regeneration Budget £134,920

11 Land & Property Programme £100,126

. Business Recovery Fund £24,517 Foot

& Mouth

. Administration £15,126 . Skils & Development Rapid £8,566 . Response Fund _ Competitiveness Development! £6,474

mm Innovation Clusters Fund

. Strategic Programme £2,085

Total Expenditure

£296,578

.. .. ,. ..

Inward Investment Activity

£1,996

Rural Programmes

£1,950

Regional Supply Offce

£818

Grant in Aid

£270,655

Revenue Receipts

£10,531

Capital Receipts

£9,555

European Funding

£4,66

Other Income

£679

Interest Received

£494

Total Income

£296,578

All figures shown are £0005

7 Operational Matters

Service First The Agency's Service First Charter sets out our standards of service when dealing with outside organisations and the general public. Throughout 2001/02 the Agency monitored its performance against those standards:

. 82% of written correspondence was replied to within 10 days. (Target 90%)

路 84% of undisputed invoices were paid within 30 days of receipt or within terms agreed with supplier. (Target 95%) . 98% of visitors were seen within 10 minutes of their appointment time. (Target 100%). . During 2002/03 the Agency will implement a call logging system to monitor the speed of answering telephone calls.

Partnership Working The Agency is thoroughly committed to partnership working and has continued to work closely with the North West Regional Assembly and Government Office North -West on a range of issues. All partners were consulted on the production of the Agency's Corporate Plan for 2002/03 to 2004/05. During the year the Agency determined that it would operate as a partner (not just a funding body) within 25 of the region's 46 LSPs and that those 25 would be treated as priorities for NWDA regeneration funding. Robust partnerships are in place with the six sub regional partnerships to ensure that their sub regional strategies complement the work being undertaken as part of the Regional Strategy Review, which began at the

beginning of 2002. . Code of Best.Practice

We have an agreed Code of Best Practice which outlines the roles and responsibilities of the Chairman, the Board, and the Chief Executive and the standards to be applied. We have ensured that the Code has been adhered to throughout the year by regularly reviewing our practices. We have robust and thorough monitoring and recording systems. Board Members have declared interests at particular Board discussions as appropriate. Staff have followed a similar requirement in compliance with our Code of Conduct.

Open Government During the year we have fully complied with the Government's Code of Practice in Access to Information. In relation to specific requirements of the

Code: . No requests for information were received which specifically referred to the

Code; . No charges were levied for the information supplied; . No replies to requests for information exceeded 20 days;

. No complaints against the Agency were referred to the Parliamentary

Commissioner for Administration (the Ombudsman).

Public Information

. A Register of Board Members' interests is available for public inspection at our Warrington Headquarters. . Summaries of the minutes of Board Meetings are published on the Website each month. . We held an Annual General Meeting on 17 September 2001. Over 300

people attended to hear a summary of our achievements during the financial year 2001/02 and also ask questions of the Chief Executive and Board Members about the Agency's work. . The Chief Executive and Board Members formally met representatives of the NorthWest Regional Assembly in May 2001.

We have produced regular press releases detailing our activities and, where appropriate, gave our response to particular decisions that could have a significant impact on the region. The Agency's Service First Charter, the Code of Best Practice anda range of other documents can be viewed on the

Agency's website or copies obtained from the Warrington Headquarters. Greening Government The Agency's Greening Policy ensures that our practices are sustainable and environmentally friendly. Our Procurement Practices also meet the Greening Government objectives. headquarters in early April 2002. The new building was granted a livery good" BREEAM rating. We moved to our new

The Board In December 2001 four Board Members left and six new members joined creating a total membership of 15. Lord Thomas continued as Chairman until his retirement on 3151 March 2002. BryanGray joined the Agency as the new Chairman on 151 April 2002. Each Board Member has taken responsibility for a key area of business and has exercised that role on behalf of the Agency throughout the year. Atthe February 2002 Bรถard Meeting these areas of responsibility were reviewed. list of

Board Members, including their main occupation and interests are listed below. A full

Board Members interests is available from the Agency's Headquarters in Warrington. Bryan Gray MBE (Appointed 151 April 2002)

Chairman of NWDA. Deputy Chairman of the Baxi Group Ltd since 2000. He currently chairs the CBI North West Region, of which he has been a Council member since 1994. A Board member of the University of Central Lancashire.

CUr Mike Doyle JP Deputy Chairman of the NWDA. Assistant Chief Executive of Business Skils (St Helens) and St Helens MBC Labour Councillor. Member of the Merseyside Learning and Skills CounciL.

NWDA Area of Responsibilty.' Infrastructure and Transport. Nevile Chamberlain CBE (Appointed 141h December 2001)

Chairman of the Manufacturing Institute, Trafford Park and Deputy Chairman of Urenco Ltd. Board Member New East Manchester Urban Regeneration Company. NWDA Area of Responsibilty: Energy John Dunning CBE, JP

Director of Westmorland Ltd. Chairman, Cumbria Rura1 Enterprise Ltd. NWDA Area of Responsibilty: Rural issues including agriculture, tourism and market towns.

Felicity Goodey CBE, DL and Chair of the National Milennium Arts CompanyThe Lowry. Chairs the NW Cultural Consortium and the Regional Marketing Forum. NWDA Area of Responsibility: Culture, Media, Communications and the Creative aspects of ICT. . Director of Precise Communications

Professor, Sir Martin Harris CBE, DL (Appointed 141h December 2001)

Vice Chancellor, University of Manchester. NWDA area of responsibility: shared responsibilty forHealth.

Clive Jeanes OBE Former Managing Director of Milliken Industrials Ltd, Chairman of Wigan Borough

Partnership, and Chairman of Excellence North West. Member of the Cheshire and Learning and Skills Council and RDA representative on the NW Industrial Development Board. NWDA area of responsibilty: Manufacturing, Business Excellence and SMEs.

Those members who left the Board during 2001/02 were as follows: Lord Thomas

of Macclesfield CBE (Chairman from 131h December 1998 to 3151 March

2002) Chairman of NWDA, Lord Thomas was made a Labour life peer in 1997. Lord Thomas is a member of the Regional Policy Forum, which seeks to advance the debate on regional economic development and governance issues, President of the Society for Co-operative Studies, Honorary President of the North West Co-operative and Mutual Council and a member of the North West NHS Advisory Board. NWDA area of responsibilty: Relations with Government Ministers and the North West Regional Assembly. Venture Capital

Maggie Chadwick (Retired 131h December 2001) Self Employed Consultant and Director of Furness Enterprise. Member Cumbria Learning and Skills Council (Resigned 3151 March 2002). -Chair of North West Learning and Skills

Forum. (Resigned 3151 March 2002). .

NWDA area of responsibilty: Education, Skils and Learning and e - learning ieT.

CounciUor Or Fred Ridley (Retired 131h December 2001) Liberal Democrat Leader of Stockport MBC. NWDA Area of Responsibilty: SMEs, Business Support. Judy Robinson(Retired 131h December 2001)

Chair of the Voluntary Sector North West and Director of Greater Manchester Centre for Voluntary Organisations.

NWDA Area of Responsibilty: Voluntary, Mutual and Charitable sectors. James Ross (Retired 131h December 2001 )

Chairman of the Littlewoods Organisation and the National Grid Group. Board Member of

Liverpool Vision Urban Regeneration Company. (Resigned 131h December 2001)' NWDA area of responsibilty: Liverpool Cify Centre and the private sector on Merseyside.

Board Meetings and Committees . Ten NWDA Board meetings were held during the year.

路 The Remuneration Committee convened twice during the year in October 2001 and March 2002. 路 The Audit Committee met five times, in February 2001 , April 2001, JUly 2001, October 2001 and January 2002.

There are a number of Sub Groups to the main Board that have met regularly throughout the year. For 2001/02 the Sub Groups were Business Development, Marketing, Regeneration, Rural, Skills and Social Inclusion.

The Executive Michael Shields CBE

Chief Executive

Steve Ashcroft Director of Corporate Services: Corporate and business planning, project appraisal and performance monitoring.

John Burrows OBE Director of Business Development: Inward investment, cluster development, . innovation and business support.

Dr Baron Isherwood Director of Regeneration: Social and economic regeneration, environmental programmesand management of the Agency's Land and Property portolio..

Peter Mearns Director of Marketing: Promoting the North West, Strategic communications and NWDA Marketing.

Geoff Parker Director of Finance: Management of the Agency's finances, Human Resources, IT systems and administration.

Or Peter White Director of Strategy: Co-ordination of the del.very of the Regional Strategy, Learning and Skills policy, Co-ordination of the Agency's approach to European Funding and admiistration of the Regional Intelligence Unit.

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NORTHWEST DEVELOPMENT AGENCY FINANCIAL STATEMENTS

2001-2002

FOREWORD TO THE FINANCIAL STATEMENTS Statutory Background The Northwest Development Agency wasrestablished under the provisions of the Regional Development Agencies Act 1998. It came into existence on 14 December 1998, following Parliamentary approval of the Regional Development Agencies Act 1998 and the appointment of Board Members.

The Agency became fully operational on 1 April 1999 when it took over the regional

activities of English Partnerships and the Rural Development Commission and the SRB Challenge Fund formerly

administered by Government Office for the North West

under the provisions of the Regional Development Agencies Act 1998. The business of Inward Ltd was transferred into the Agency by a Business Transfer Agreement on 1 April 1999.

On 8 June 2001 the Government announced that sponsorship of the Agency was

transferred from the Department of the Environment, Transport and the Regions to the Department of Trade and Industry.

These Financial Statements have been prepared in the form directed by the Secretary of State for the Department of Environment, Transport and the Regions and the Accounts Direction is set out on pages 5Tto 62. ,

Results for the Year and Transfer to/from Reserves The results for the year ended 31 March 2002 are contained in the attached Financial Statements. There was a surplus for the year of £4.33m after taxation (2001: £3.89m surplus)', which was transferred to reserves carried forward.

Review of Activities During the year the Agency continued to operate its programmes of activity across

the region. Key achievements are set out on pages 3 to 5.

With effect from 1 April 2001 full responsibility for the Partnership Investment Programme in the region transferred from English Partnerships. Additional assets of £ 11.11 m and liabilities of £4.96m transferred to the Agency on that date.

Significant Changes in Fixed Assets On 1 April 2001 investment assets with a value of £90.27m were held by the Agency.

During the year there were additions at a cost of £2.13m and disposals from this portolio with an aggregate book value of £5.14m and which reaHsed £5.26m. At 31

March 2002 the investme.nt asset portolio was professionally revalued at £85.10m and the resultant deficit of £2.16m was written

off to the Income and Expenditure

Account. Post Balance Sheet Events

With effect from.1 April 2002 responsibility for Regional Selective Assistance (RSA) with offers less than £2m transferred from Government Office North West. Related assets and liabilities transferred to the Agency on that date.

The Agency ceased to have financial responsibility for the Rapid Response Fund with effect from.. 1 April 2002. Responsibilty for the administration of this fund transferred to the Employment Service (Department of Work and Pensions). For more details see Note 27.

Future Development The Single Financial Framework was fully implemented from 1 April 2002 to provide

RDAs with increased flexibility in the deployment of their resources in pursuit of strategic priorities in the region.

Statement of the Agency's and Chief Executive's Responsibilties Under section 14 òf the Regional Development Agencies Act 1998 the Agency is

a statement of account for each financial year in the form and on the basis determined by the Secretary of State, with the consent of Treasury. The Financial Statements are prepared on an accruals basis and must give a true and fair required to prepare

view of the Agency's state of affairs at the year end and of its income and expenditure, total recognised gains and losses and cash flows for the financial year. ) In preparing the Financial Statements the Agency is required to:

. observe the Accounts Direction issued by the Secretary of State, including the relevant accounting and disclosure requirements, and apply suitable accounting

policies on a consistent basis;

. make judgements and estimates on a reasonable basis; . state whether applicable accounting standards have been followed, and disclose

and explain any material departures in the financial statements;

. prepare the accounts on the going concern basis, unless it is inappropriate to presume that the Agency will continue in operation.

The Accounting Officer for the Department of Trade and Industry has designated the

Chief Executive as the Accounting Officer of the North West Development Agency. His responsibilities as Accounting Officer include responsibility for the propriety and regularity and value for money of the public finances, following guidance issued by Government; the keeping of proper records; and advising and informing the Board of financial considerations. These requirements are set out in the "Non-Departmental Public Bodies' Accounting Officer's Memorandum" issued by the Treasury and published in Government Accounting.

Board M,embers The Secretary of State appointed the Board Members on14 December 1998 and 14 December 2001. They include Local Authority, Trade Union, community and private sector representatives.

The Chairman was appointed on 14 December 1998 for an initial period of three

years. This was extended to 31 March 2002. Board members were also appointed on 14 December 1998 initially for three years and their corporate responsibilities are detailed in the Code of Best Practice for the Board of the NWOA which is a public 13 December 2001, 4 Board

document available from the Agency's~JtCtes. On

Members retired. On 14 December i9 the remaining Board Members were \;.Jt reappointed on terms varying between 1 and 3 years. 5 new Board Members were also appointed for 3 years. Note 7(b) provides details of the respective periods of

reappointment The members are as follows: -

Lord Thomas of Macclesfield CBE, Chairman (Retired 31 March 2002)

Councilor Mike Ooyle J.P, Deputy Chairman. (Reappointed 14 December 2001) Maggie Chadwick (Retired 13 December 2001)

John Dunning CBE, J.P (Reappointed 14 December 2001) Felicity Goodey CBE (Reappointed 14

December 2001)

Clive Jeanes OBE (Reappointed 14 December 2001)

Councilor Richard Leese CBE (Reappointed 14 December 2001) Alan Manning (Reappointed 14 December 2001)

Oennis Mendoros OBE (Reappointed 14 Oeรงember 2001) KathReade (Reappointed 14 December 2001) Councillor Or Fred Ridley (Retired 13 December 2001)

Judy Robinson (Retired 13 December 2001) James Ross (Retired 13 December 2001)

Nevile Chamberlain, CBE (Appointed 14 December 2001) Professor Sir Martin Harris CBE(Appointed 14 December 2001)

Anil Kumar Ruia OBE (Appointed 14 December 2001)

Brenda Smith (Appointed 14 December 2001)

Councillor Mike Storey OBE (Appointed 14 December 2001) Councillor Or Pauleen Lane (Appointed 14 December 2001)

Brief biographies for the Board Members and details of their areas of responsibility

within the Agency, for 2001/02 are shown in the Annual Report section of this document. Board members are contracted to carry out two days work per month on behalf of the

Agency. The Chairman is contracted for 2 days per week and the Deputy Chairman 1 day per week.

The Agency maintains a Register of Board Members' Interests which is available on request by contacting the Director of Corporate Services at the Agency's offices at Renaissance House, Warrington. Members declare their interests to the Board in any transactions involving the relevant organisations and withdraw

from the meeting as

appropriate so that they do not participate in any discussions or vote on any related matters.

Appointment of Chief Executive On 14 December 1998 Michael Shields was appointed as Chief Executive for a fixed term of five years.

Employment of Disabled Persons The Agency

gives full and fair consideration to all applications for employment from

disabled persons having regard to

their particular aptitudes and abiliies.

Provision of information to and consultation

with employees

The Agency is fully committed to effective and open communication and consultation

with its employees. This is achieved through a variety of means including a Staff and Consultative Committee involving the Public and Commercial Services (PCS)

Prospect Trade Unions together with staff representatives; a Health and Safety Committee; and staff events to communicate key issues and receive feedback.

Better Payment Practice Code The Agency is committed to the Better Payment Practice Code (previously the CBI Prompt Payment Code) and aims to pay all undisputed invoices either within 30 days or the terms agreed with the supplier (minimum 95%).

In 2001/02 the Agency did not achieve this target paying 84% (2001: 79%) of

invoices on time. The Agency is committed to achieving a high standard of performance and is continuing to seek further improvement in payment timescales.

Financial Memorandum The Secretary of State issued the Agency with a new Financial Memorandum setting framework under which the Agency should operate. The Agency has.

out the financial

~ ./

i7 complied

in all material respects with the terms of this memorandum during the

course of 2001/02.

Statement on Internal Control The Accounting Officer has responsibility for maintaining a sound system of internal

control that supports the achievement of the Northwest Development Agency's policies aims and objectives whilst safeguarding the public funds and assets for which he is personally responsible in accordance with the responsibiliies assigned to him in Government Accounting. The system of internal control is designed to manage rather than eliminate the risk of failure to achieve policies aims and objectives; it can therefore only provide

reasonable and not absolute assurance of effectiveness.

The system of internal control is based on an ongoing process deigned to identify the

principal risks to the achievement of the Agency's policies aims and objectives to evaluate the nature and extent of those risks to manage them efficiently, effectively and economically. It is expected that the procedures necessary to implement

. Treasury guidance wil be in place in March 2003. This takes account of the time needed to fully embed the processes which the Agency has agreed should be established and improve their robustness.

The Agency held a risk management workshop attended by representatives of all risks were identified and a control strategy for each of the significant risks was determined. internal departments during which the Agency's objectives and

The board receives periodic reports from the chairman of the audit committee concerning internal control.

In addition to the actions mentioned above in the coming year the Agency plans to: 路 arrange a regular programme of facilitated workshops to identify and keep up to date the records of risks facing the organisation;

路 introduce a programme of risk awareness training; 路 develop and maintain an organisation-wide risk register; and 路 arrange for reports from the Agency's Directors on internal control activities. The Agency has an Internal Audit Service which operates to standards defined in the Government Internal Audit ManuaL. They submit regular reports which include the Head of Internal Audit's independent opinion on the adequacy and effectiveness of the Agency's system of internal control together with recommendations for

improvement. The Accounting Officer's review of the effectiveness of the system of internal control is informed by the work of the internal auditors and the executive managers within

the department who have responsibiliy for the development and maintenance of the internal control framework and comments made by the external auditors in their management letter and other reports.

qri /'

Statement on the Agency's Policy for Conserving energy, reducing waste

& minimising the Release of Greenhouse Gases

The Agency is committed to energy conservation, waste reduction and minimising the release of greenhouse gases.

Sustainability is a key cross cutting theme within the Regional Strategy. The Agency

is a funding contributor to Sustainabilty North West, a rnulti-sectoral partnership, and is represented on its Board. A close working relationship has been established.

// .多~-

Chief Executive 1 Accounting Officer

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Chairman

NORTH WEST DEVELOPMENT AGENCY 2001.02

THE REPORT OF THE COMPTROLLER AND AUDITOR GENERAL TO THE HOUSES OF PARLIAMENT AND THE NORTHWEST DEVELOPMENT AGENCY

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I have audited the financial statements on pages 21 to 56 under the Regional Development Agencies Act 1998. These financial statements have been prepared under the historical cost convention as modified by the revaluation of certain fixed assets and the accounting policies set out on pages 2l3 to 29.

Respective responsibilties of the Agency, the Chief Executive and

Auditor

As described on page 14 the Northwest Development Agency and Chief Executive are responsible for the preparation of the financial statements in accordance with the Regional Development Agencies Act 1998 and directions made thereunder by the Secretary of State, and for ensuring the regularity of financial transactions. The. Northwest Development Agency and Chief Executive are also responsible for the

preparation of the other contents of the Annual Report. My responsibilties, as independent auditor are established by statute and guided by the Auditing Practices

Board and the auditing profession's ethical guidance. I. report my opinion as to whetherthe financial statements give a true and fair view and are properly prepared in accordance with the Regional Development Agencies

Act 1998 and directions made thereunder, and whether in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. I also report if, in my opinion, the Foreword is not consistent with the financial statements, if the Northwest Development Agency has not kept proper accounting records, or if i have not received all the information and explanations I require for my audit.

I read the other information contained in the Annual Report and consider whether it

consistent with the audited financial statements. i consider the' implications for my

certificate if i become aware of any apparent misstatements or material . inconsistencies with the financial statements.

I review whether the statement on page 17 reflects the Northwest Development Agency's compliance with Treasury's guidance 'Corporate Governance: statement on internal control'. i report if it does not meet the requirements specified by Treasury, or if the statement is misleading or inconsistent with other information I am aware of from my audit of the financial statements.

The maintenance and integrity of the Agency's websiteis the responsibilty of the Accounting Officer; the work carried out by the auditors does not involve consideration of these matters and accordingly the auditors accept no responsibility for any changes that may have occurred to the Financial Statements since they were initially presented

on the website.

Basis of audit opinion i conducted my audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts, disclosures and regularity of financial transactions included in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Agency and the Chief Executive in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Agency's circumstances, consistently applied and adequately

disclosed.

I planned and performed my audit so as to obtain all the information and explanations which I considered necessary in order to provide me with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by error, or by fraud or other irregularity and that, in all material respects, the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. In forming my opinion I have also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion In my opinion:

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· the financial stàtements give a true and fair view of the state of affairs of the Northwest Development Agency and the Group at 31 March 2002 and of the surplus, total recognised gains and losses and Gash flows for the period then ended and have been properly prepared in accordance with the Regional Development Agencies Act 1998 and directions made thereunder; and

· in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.

· i have no observations to make on these financial statements.

~~~

John Bourn

Comptroller and AuditorGeneral .i 3 July 2002

National Audit Office

157-197 Buckingham Palace Road Victoria London SW1W 9SP

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RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 31 MARCH 2002 STATEMENT OF TOTAL

As Restated 2002 £'000 Surplus for period carried forward

Revaluation on investment assets Revaluation on development assets

2001 £'000

4,327

3,889

2,980 184

Grant in Aid receivable not released to the Income and Expenditure Account

33,045.

Total Gains

37,372

4,918 11,971

The 2001 Grant-in-Aid receivable not released to the Income and Expenditure Account has been restated by an increase of £3,748,000 to show movements from the Government Grant Reserve on a gross basis instead of the net basis as

previously disclosed.

GROUP BALANCE SHEET AS AT 31 MARCH 2002

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Chief Executive/Accounting Officer

~~ifC1~ Chairman

The notes on pages 26 to 56 form part of these accounts

BALANCE SHEET AS AT 31 MARCH 2002

Notes FIXED ASSETS Tangible operating assets

12 13

Investment assets

Investment in subsidiary undertakings

CURRENT ASSETS Stock of development assets

14 15

Debtors Cash at bank and in hand

Amounts falling due within one year

2002 £'000

2001 £'000

3,407 85,098

2,169 90,270

88,505

92,439

45,622 25,095 5,326

16,165 9,766 2,655

76,043

28,586

22,688

7,498

53,355

21,088

834

702

141,026

112,825

1,074 139,952

(1,861) 114,429 257

141,026

112,825

CREDITORS:

NET CURRENT ASSETS

PROVISIONS FO.R LIABILITIES AND CHARGES

TOTAL ASSETS LESS TOTAL LIABILITIES

RESERVES Income and Expenditure Reserve

19 18B

Government Grant Reserve Other Reserves

APPROVED BY THE BOARD ON 12THJUL Y 2002

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Chief Executive/Accounting Officer

~~~"SV'.l Cha'irman-

The notes on pages 26 to 56 form pari of these accounts

GROUP CASHFLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2002

Activities

Reconcilation of Operating Surplus to net cash (outflow) from Operating

OPERATING ACTIVITIES

2002 £'000

Operating. Surplus

2001 £'000

3,939

747

(14,701)

(6,387)

334

279

(5,260)

(5,935)

Book Value of Investment Assets sold

5,138

5,961

Write Down of Investment Assets

2,167

(34,067)

(10,953)

Book value of Development Assets sold

3,024

1,348

Write Down of Development Assets

4,301

8,770

Transfer from Government Grant Reserve

Depreciation Proceeds from the disposal of Investment Assets

Additions to Stock of Development Assets

Proceeds from the disposal of Operating Assets

(18)

(Increase) / decrease in Debtors

(9,707)

2,837

Increase in Creditors and Provisions

16,424

454

(100)

350

Environmental Liability provision decrease

Write down of loan stock

Net Cash (Outflow) from operating activities

(3,750)

(28,508)

(6,297)

494

435

(3,914)

(2,137)

(3,710)

(2,062)

5,260

5,953

CASHFLOW STATEMENT Returns on Investments and Servicing of finance Interest Received

Taxation UK Corporation Tax paid

Capital Expenditure and Financial Investment Purchase of Fixed Operating and Investment assets Proceeds on disposal of Fixed Operating and Investment assets

Acquisition Cash Transfer (outflow) from other organisations

155

(30,378)

(3,953)

33,045

4,718 \

2,667

765

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002

1 ACCOUNTING POLICIES (1) Basis of Accounting

The Financial Statements of the Northwest Development Agency have been prepared in a form directed by the Secretary of Statefรถr the Environment, Transport and the Regions, with the approval of H M Treasury, in accordance with the Regional Development Agencies Act 1998. The financial statements have been prepared as set out in Treasury guidance under the modified historical cost basis as explained in the sub-paragraphs below and in accordance with applicable Accounting Standards. Compliance with SSAP 19 "Accounting for Investment Properties" requires departure from the

requirements of the Companies Act 1985 relating to depreciation and an explanation ofthe departure is given in note 1 (3) below. (2) Basis of Consolidation

No separate income and expenditure accountis presented for the Agency as provided by Section 230 of the Companies Act 1985. The consolidated Financial Statements incorporate the Financial Statements undertaking Speke Garston Developments Limited.

of the Agency and its subsidiary

(3) Fixed assets - Investment assets

The portolio of industrial and commercial investment properties held at any one time is treated in such a way that surpluses and deficits on revaluation of industrial and commercial properties are netted off. Any overall write-down of these properties to open market value, and subsequent adjustments thereto, are accounted for annually and separately identified in the income and expenditure account. Any overall surplus on revaluation of these properties to open market value, and subsequent adjustments thereto, are credited to the government grant reserve after eliminating the overall accumulated unrealised deficit, as originally charged, by revaluation adjustment, to the Income and Expenditure Account.

contained in the Statement of Asset Valuation Practice and Guidance Notes (3rd Edition)

Valuations are carried out in accordance with best practice as

published by the Royal Institute of

Chartered Surveyors.

A valuation of the whole portolio was carried out as at 31 March 2002, which was undertaken by King Sturge, International Property Consultants.

In accordance with SSAP19,-no depreciation is provided in respect of investment properties. This departure from the requirement of the Companies ACt 1985 for all properties to be depreciated is, in the opinion of the Board, necessary for the Financial Statements to give a true and fair view in accordance with applicable accounting standards as properties are included in the Financial Statements at their open market value.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

1 ACCOUNTING POLICIES (CONTINUED) (3) Fixed assets (continued)

Depreciation is only one of the many factors reflected in the annual valuation of the properties and the amount attributed to this factor by the valuers cannot reasonably be separately quantified.

Acquisitions and disposals of land and buildings are accounted for on the date

of legal completion. (4) Fixed Assets - Other Tangible Assets

Tangible Fixed Assets are valued at depreciated replacement cost. (5) Development Assets Development assets, consisting of land and buildings, are shown at the lower of current replacement cost and net realisable value, any reductions in holding value being written off to the Income and Expenditure Account.

Acquisitions and disposals of development assets are accounted for on the date of legal completion. (6) Depreciation

Depreciation is provided to write off the replacement cost of tangible fixed assets over their anticipated useful lives on a straight line basis at the

following annual rates:

Owned property 50 years

Leasehold buildings with less

than 25 years to run Period of lease

Office furniture, fittings and equipment 5 years

Computer equipment 3 years (7) Investments and

Long Term Loans

Investments and loans are shown net of provision for amounts considered doubtful and of write-offs for amounts considered irrecoverable. Provision has been made for all loans where recovery appears doubtfuL. No loan is written off until the impossibilty of recovery is beyond doubt. Approval from the OTI is obtained for any write-off in excess of ÂŁ25,000.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

1 ACCOUNTING POLICIES (CONTINUED) (7) Investments and Loans (continued)

Partnership workspace schemes, the Agency's investment with partners, pace has been disclosed in the Balance Sheet at a valuation based on present value of estimated future rental income. Expenditure on these projects is written off in the year of mainly local authorities, to provide rural works

spend. (8) Pension Costs

Certain of the employees of The Northwest Development Agency participate in the Principle Civil Service Pension Scheme (PCSPS), the English Partnerships Pension Scheme (EPPS) and individual defined contribution pension plans. The PCSPS and EPPS are defined benefit schemes. The PCSPS is a non-contributory scheme. The Northwest Development Agency recognises the expected cost of providing pensions on a systematic and rational basis over the period during which it benefits from employee's services by payment to the scheme of amounts calculated on an accruing basis. Liability for payment of future benefits is a charge on the scheme. (9) Government Grants

Northwest Development Agency's activities are funded primarily by Grant-inAid provided by the Department of Trade and Industry for specified types of

expenditure. Government Grants receivable of a revenue nature are credited to the Income and Expenditure Account in the year to which they relate. Government Grants in respect of capital expenditure are credited to the Government Grant Reserve and released to the Income and Expenditure Account either, over the expected useful life of the asset, for assets that are . depreciated or, upon disposal or loss in value, for assets that are not '

depreciated. Grant-in-Aid released to the Income and Expenditure account includes amounts attributable to expense accruals for which grant will be received

during the year 2002/2003 to finance payment. (10) Deferred Taxation

Full provision has been made for deferred tax assets and liabilities arising

from timingdifferencesbetween the recognition of gains and losses in the financial statement and their recognition in the tax computation. (11) Foreign Currency Transactions

Transactions in foreign currencies are recorded in sterling at the rates prevailing at the Balance Sheet date. Resulting exchange gains and losses are taken to the Income and Expenditure Account.

NOTES TO THE. FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED) (12) Leases

Operating lease rentals are charged to the Income and Expenditure Account

. over the period of the lease.

There are no finance leases.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

2 GRANT IN AID RELEASED As a result of machinery of Government change on 8 June 2001, responsibility for the funding of the Agency transferred from the Department of the Environment, Transport and the Regions to the Department of Trade and Industry. In 2000-01, the Agency was funded by grant-in-aid from the Department of the Environment, Transport and the Regions Class ILL, Vote 1, with the Department of Trade and Industry Class IX, Vote 1 funding expenditure on the Regional Supply Office.

Grant-in~Aid received from DETR Grant-in-Aid received from DTI

Opening 2000/01 Grant-in-Aid debtor

Closing 2000/01 Grant-in-Aid debtor Opening 2001/02Grant-in-Aid debtor Closing 2001/02 Grant-in-Aid debtor

Total Grant-in-Aid receivable Grant-in-Aid utilised in the year Land and Property Single Regeneration Budget Rural Development Business Recovery Fund - Foot

& Mouth

Skils Development Regional Innovation

Regional Centre for Manufacturing Excellence Administration Expenditure Inward Investment Activity Regional Supply Office Strategic Programme

Corporation Tax Total relevant expenditure

Less: Receipts Capital receipts

Interest received

(9,555) (10,531) (4,664) (679) (494)

(7,157) (10,906) (248) (1,247) (435)

Total Grant-in-Aid utilsed

270,655

156,055

Grant-in-Aid applied to Capital Expenditure Grant-in-Aid applied to purchase fixed operating assets Grant-in-Aid applied to purchase investment assets Grant-in-Aid applied to purchase development assets

(1,997) (2,133) (28,915)

(1,483) (2,864)

237,610

151,117

Revenue Receipts European Funding

Other Income'

Grant-in-Aid credited to Income and

Expenditure Account

(591 )

~rd

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

2 GRANT IN AID RELEASED (CONTINUED)

Grant-in-Aid released from the Government Grant Reserve to the Income and Expenditure Account for disposals is now shown as a transfer in the Government Grant Reserve (Note 18) instead of being released to the Income and Expenditure

Account through Note 2. This reclassification has no impact on total income recorded or total assets less total

liabilities for 2000-01.

Interest earned by the Agency comprises mainly bank interest and interest received

from the Rural Loans portolio. The total interest received is repaid to Department of Trade and Industry by direct deduction from the monthly grant claims.

ANALYSIS OF NOTE 2 GRANT EXPENDITURE RECORDED IN THE INCOME AND EXPENDITURE ACCOUNT

2002 2001 £'000 £'000 Land and Property Single Regeneration Budget, Rural Development Business Recovery Fund - Foot and Mouth

Skills Development

Innovation Regional Centre for Manufacturing Excellence Regional

Regional Supply Office Strategic Programme

63,406 134,920 1,869 24,466 8,244 2,487 591 184 861

237,028

15,539 126,892 1,687

6,155 1,638 256 68 152,235

COALFIELDS During the year, grant was received from English Partnerships for the Coalfields Programme as follows:

Opening 2001/2002 Coalfield (Creditor) / Debtor Grant received

Closing 2001/02 Coalfield (Creditor) / Debtor

Grant receivable Expenditure on coalfields Capital Receipts - European Funding

- Other

Grant released

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

5 OTHER INCOME 2002 Inward Investment Speke Garston Developments Limited

£'000 30 1,209

Contributions to Direct Development projects Miscellaneous Income Partner Contributions

254 499 1,992

2001 £'000 1,200 1,300 554 60

3,114

6 INTEREST RECEIVABLE

2002 2001 £'000 £'000 Bankdeposit loan interest Rural

477 17

494

413 22 435

c1¿;

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

7 SALARIES AND WAGES

2002 2001 £'000 £'000 7 (a)

Board Members Board members salaries

Pension costs Social Secu rity Costs

147 8 9

139 7 9

164

155

6,520 784 535 7,839

5,698

Staff Salaries and wages inc. overtime Pension Costs

Social Security costs

Agency Staff Seconded staff salary costs

Total Salaries & Wages

494

641

489 6,828

156 650

524 235 759

8,653

7,742

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

7 (b)

Emoluments of Board Members

The emoluments of Board Members were: Name

Period of

Appointment From

Lord Thomas of Macclesfield Mike Doyle

14/12/98 - 31/03/02

14/12/98 -13/12/01 14/12/01 -13/12/02

Maggie Chadwick *

14/12/98 - 13/12/01

John Dunning

14/12/98 -13/12/01 14/12/01 -13/12/04

Salary 2002 £

46,634 14,838

Real

Total

Increase in

accrued

Pension

pension at

31/03/02 £

599

Pension 2002

1,895

Sale 20C

7,695

45,2

14,4

5,203 7,419

7,2 7,2

7,419

7,2

7,419

7,2

7,419

7,2

7,419

7,2

7,419

7,2

7,419

7,21

7,21 7,21 7,21

14/12/01 - 13/12/04

5,203 5,203 5,203 2,197

14/12/01 -13/12/04 14/12/01 -13/12/04 14/12/01 -13/12/04 14/12/01 -13/12/04 14/12/01 -13/12/04

2,197 2,197 2,197 2,197 2,197

Felicity Goodey

14/12/98 - 13/12/01

Clive Jeanes

14/12/01 -13/12/02 14/12/98 -13/12/01 14/12/01 - 13/12/03

Richard Leese Alan Manning

Dennis Mendoros

14/12/98 -13/12/01 14/12/01 -13/12/03 14/12/98 -13/12/01 14/12/01 -13/12/03 14/12/98 -13/12/01 14/12/01 -' 13/12/04

Kath Reade

14/12/98 -13/12/01 14/12/01- 13/12/02

Fred Ridley * Judy Robinson * James Ross * Neville Chamberlain

14/12/98-13/12/01 14/12/98 -13/12/01 14/12/98 -13/12/01

Professor Sir Martin

Harris Anil Kumar Ruia Brenda Smith

Mike Storey Dr Pauleen Lane

* Retired 13 December 2001 The net salaries of Professor Sir Martin Harris, Anil Kumar Ruia and Or Pauleen Lane have been paid directly to their principal employer, at their request. As a consequence they receive no personal benefit from their remuneration as board members. Lord Thomas of Macclesfield retired from office on 3151 March 2002. On 151 April 2002 Bryan Gray was appointed to the position of Chairman.

Board members are contracted to carry out two days work per month on behalf of the Agency. The Chairman is contracted for 2 days per week and the Deputy Chairman

is contracted for 1 day per week. No Board Members are eligible for pension contributions, performance related payor any other taxable benefit as a result. of employment with the Agency, with the exception of the Chairman, Lord Thomas of Macclesfield, who is a member of the Principal Civil Service Pension Scheme.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

7 (c)

Emoluments of Chief Executive and the most senior managers

Name

Age

Salary for

relevant period

Bonus

Benefits

2002

200

Total

Tote

92,165

9,136

101,301

100,91.

53,230

4,019

685

57,934

52,31!

76,375

5,765.

5,943

88,083

84,92;

74,522

5,626

3,938

84,086

76,301

53,230

4,019

5,500

62,749

57, 18~

74,522

5,626

4,974

85,122

77,26'

74,522

5,626

4,082

84,230

76,36E

Michael Shields, CBE

Chief Executive Appointed 14-12-98

Steve Ashcroft

Director of Corporate Services Appointed 01-09-99

John Burrows, OBE Director of Business Development Appointed 01-04-99 Or Baron Isherwood

Director of Regeneration Appointed 01-10-99

Peter Mearns Director of Marketing Appointed 16-08-99

Geoff Parker Director of Finance Appointed 19-07-99

Or Peter White

Director of Strategy Appointed 01-08-99

TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED) NOTES

7 (c)

Emoluments of Chief Executive and the most senior managers

Name

Age

Real

Total

pension at

accrued pension at

60 at 31/03/02

pension at 60 at 31/3/01

1,210

3,823

2,569

678

1,727

1,032

increase in

accrued

Michael Shields, CBE Chief Executive

Appointed 14-12-98 Steve As

h croft

Director Corporate Services Appointed 01-09-99

. John Burrows, OBE Director of Business Development. Appointed 01-04-99

Private Money Purchase Defined Contribution Scheme

Or Baron Ishwerwood

Director of Regeneration Appointed 01-10-99

1,124

24,837

23,317

678

1,754

1,063

950

2,531

1,554

850

2,441

1,527

. Peter Mearns

Director of Marketing Appointed 16-08-99

Geoff Parker Director of Finance Appointed 19-07-99

Or Peter White

Director of Strategy Appointed 01-08-99

Pension benefits are provided through the Principal Civil Service Pension Scheme. This is a statutory scheme that provides benefis on a final salary basis at a normal retirement age of 60. Benefits. accrue at the rate of 1/801h of pensionable salary for each year of service. In addition a lump sum equivalent to 3 years pension is payable on retirement. Members pay contributions of 1 1/2% of pensionable earnings. Pensions increase in payment in line with the Retail Price Index. On death, pensions are payable to the surviving spouse at a rate of half the member's pension. On death in service, the scheme pays a lump sum benefit of twice pensionable pay and also provides

a service enhancement on computing

the

spouse's pension. The enhancement depends on length of service and cannot exceed 10 years.

NOTES TO THE FINANCIAL STATEMENTS FORTHE YEAR ENDED 31 MARCH 2002 (CONTINUED)

The Chief Executive and Senior Management have given their consent to show their pension benefit details, but the pensions benefit details of John Burrows are not available to the Agency at this time.

Medical retirement is possible in the event of serious il health. In this case pensions are brought into payment immediately without actuarial reduction and with service enhanced as for widow(er) pensions.

Benefits include cars. Performance pay for the Chief Executive is determined by the Board on the recommendation

of the Remuneration Committee. Performance is measured against

eight separately weighted targets determined by the Board and agreed by the

Secretary of State for Trade and Industry and the amountof the performance award can be up to a maximum of 10% of salary. (In 2001102 targets related to partnerships working, internal control and budget management). . Performance pay of the senior management team is determined by the Chief Executive on advice from the Remuneration Committee. Performance is measured against detailed annual targets set individually for each employee by the Chief Executive and the amount of the performance award can be up to 10% of salary.

SALARIES AND WAGES

7 (d) Staffing Numbers The average number of staff employed by the Agency during the year (including all agency and seconded staff) was 263.

2002

2001

Chief Executive's Office

Corporate Services

Business Development

Regeneration

100

Marketing

Finance

Strategy (formerly Policy & Intellgence)

Overseas

Speke Garston Developments Limited

263

.237

Total

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED) 7 (e) Pension Arrangements

The Agency has a number of pension schemes in operation. The principal schemes are of the contributory defined benefit type.

Principal Civil Service Pension Scheme (PCSPS) The PCSPS is an unfunded multi-employer defined benefit scheme but Northwest Development Agency is unable to identify its share of the underlying assets and liabilities. A full actuarial valuation was carried out at 31 March 1999. Details can be found in the resource accounts of the Cabinet Office; Civil Superannuation

(ww.civilservice-pensions.gov.uk). For 2001-02, employers' contributions of £623,890 were payable to the . PCSPS (2000-01: £399,157 ) at one of four rates in the range 12 to 18.5 per cent of pensionable pay, based on salary bands. Rates will remain the same for the next two years, subject to revalorisation of the salary bands. Employer contributions are to be reviewed every four years following a full

scheme, valuation by the Government Actuary. The contribution rates reflect benefits as they are accrued, not when the costs are actually incurred, and reflect past experience of the scheme.

English Partnerships Pension Scheme The EPPS is a multi-employer defined benefit scheme but the Northwest Development Agency is unable to identify its share of underlying net assets and

liabilities. A full actuarial valuation was carried out at 31 March 1999 and more details can be found in the separate scheme statement of the EPPS. For 2001-2002, normal employer contributions of £108,948 were payable to the EPPS (2000-2001: £166,080) at the rate of 9 per cent

(1 April 2000 to 30 June 2000: 15% and

1 July

2000 to 31 March 2001: 9%) of pensionable salary. It has been agreed that contributions wil be reviewed on an annual basis following a scheme valuation by the scheme actuary. The contribution rates reflect benefits as they are accrued, not when the costs are actually incurred, and they reflect past experience of the scheme. At the balance sheet date there were no outstanding or prepaid contributions to the

scheme. The accounts of the English Partnerships Pension Scheme are available from the Secretary; at St George's House, Kingsway, Team Valley, Gateshead, NE11 ONA. All employees in the scheme are issued with a summary of the accounts.

The Greater Manchester Pension Fund Contributions of £2,093 (2000 - 2001: £2,177) were paid to the Greater Manchester Pension Fund. The rate for 2001/02 as determined by the fund's actuary was 10.6% of pensionable salary. The Greater Manchester Pension Fund is a multi-employer defined benefit scheme, but the Northwest Development Agency is unable to identify its share of underlying net assets and liabilities. A full actuarial valuation was carried out at 31 March 2001 and more details can be found in the separate scheme statement of the Greater Manchester Pension Fund.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

Other Schemes There are three minority schemes covering 3.8% of the Agency's staff, of the defined contribution type held in independently administered funds. The rate for 2001/02 was 9% of pensionable salary. Contributions of £31,654 (2001: £57,373) were paid to Inward Group Money Purchase Plan, Scottish Mutual Assurance Plc Group Personal Pension Plan and CGU Life Personal Pension Plan. The Merseyside Pension Fund covers 1.9% of the Agency's staff and is a defined benefit scheme. The rate for 2001/02 was 11.1 % of pensionable salary. Contributions of £26,114 (2001: £23,948) were paid.

The Merseyside Pension Fund is a multi-employer defined benefit scheme but the Northwest Development agency is unable to identify its share of unqerlying net assets and liabilities. A full actuarial valuation was carried out at 31 March 2001 and more details can be found in the separate scheme statement of the Merseyside Pension Fund.

7 (t)

Seconded Staff

Staff were seconded from the following organisations to the Agency during the accounting period.

2002

Organisation

No. of

staff Liverpool City Council Chamber Business Enterprise Defence Science. & Technology Laboratory Manchester Biotech Limited North West Chemical

Initiative

Oldharn Metropolitan Borough Council Stockport and High Peak TEC South Wirral Health Authority Eden Biopharm

Barclays Bank Pricewaterhouse Coopers .

Total

2001

Cost £'000

Cost

No. of

staff

£'000

20 20

1 1

20 40 34 43

1 1

43 . 32

1 1

37 4

1 1

156

235

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED),

8 OTHER ADMINISTRATION COSTS

2002 £'000 Travel & Subsistence Other staff costs Office costs Estate Management Marketing and PR Professional costs IT and communication

664 434 3,192 2,015 2,874 3,158 1,190 334

Depreciation Auditors' remuneration Operating lease rentals Contributions to Joint Ventures

The utilisation of Grant-in-Aid for Administration

70 927 334 15,192

2001 £'000 601

542 1,135 2,173 1,510 1,922 1,228 279 68 841

334 10,633

is shown in Note 2.

9 NOTIONAL COST OF CAPITAL When calculating the surplus or deficit for the year, the Agency is required to include as expenditure, a notional cost of capital, to the extent that there is no real charge for

this. This has been calculated as 6% of the average of total assets less total liabilties. After the surplus or deficit for the year there is an entry reversing this amount.

10 TAXATION

2002 2001

£'000 £'000 Corporation tax on profits for the year at 30% Deferred tax provision

106 106

2,358 (5,065) (2,707)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED) 11

TANGIBLE OPERATING ASSETS

Group Properties

occupied. by the

Agency

Cost or valuation At1 April

2001

Agency

Equipment, fixtures and motor vehicles

Total

Properties occupied by the Agency

Equipment, fixtures and . motor vehicles

Total

£000

£'000

1,539

1,146 2,008

2,685 2,008

1;539

1,127 1,997

2,666 1,997

(431)

Additions in year Transfers to investment assets

(431)

Disposals in year

At 31 March 2002

(8)

1,108

3,146

4,254

449

(431) (8)

(8)

1,108

3,116

4,224

511

435

497

330

334

324

328

(8)

771

837

751

817

1,042

2,375

3,417

1,042

2,365

3,407

1,477

697

2,174

1,477

692

2,169

Depreciation At 1 April 2001 Depreciation in

year . Disposals in year

At 31 March 2002 Net Book Value 31 March 2002

Net Book Value 31 March 2001

The Net Book Value of tangible operating assets does not differ materially from the depreciated replacement cost of the assets.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

12 INVESTMENT ASSETS

At 1 April 2001 Additions in year Transfer from Properties occupied by Agency

Group

2002 ' 2001

Agency

2002 2001

£'000 £'000

90,270 1,702

91,768 1,483

431

91,768 1,483

431

92,403

93,251

92,403

93,251

(5,138) (2,167)

(5,961 )

2,980

(5,138) (2,167)

(5,961 )

(Oeficit)/Surplus on Revaluation

Valuation at 31 March 2002

85,098

90,270

85,098

90,270

Oisposals

2,980

13 INVESTMENTS SUBSIDIARY UNDERTAKINGS

Group

Agency

£'000

Loan 1 April 2001

5,825

Provision At April

2001

5,825

31 March 2002

31 March 2001

Loan Stock of £5,825,000 was issued on 10 July 1996. It is unsecured and no interest is receivable unless written notice is issued from either stockholder with the

other's agreement. No notice has been issued to date. The loan is repayable on 25 April 2003 in accordance with a shareholders' agreement unless certain changes in the 'shareholdings trigger an earlier redemption. Under the terms of the agreement governing repayment of the loan, no amounts are repayable until the amounts owed from the subsidiary undertaking, in respect of the payments received subject to clawback, have been satisfied in full. It is therefore anticipated that the loan wil be repayable for a nominal amount of £1. Accordingly the loan has been written down (in 2000.,01) to reflect the anticipated repayable

amount.

(Note 21). .

The amount due to the minority shareholder was written down in full in 2000/2001

43 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

Name of Undertking

Nature of

Interest Class of Shares

Business Speke Garston Developments Ltd 80.1 %

Ordinary Shares Development of Speke

The Estuary Management Company 80.1 % Limited (A subsidiary of Speke Garston Developments Limited) (Limited by guarantee).

Provision of services at the Estuary Commerce

10p Garston, Liverpool Park

liabilities and financial results of The Estuary Management Company are not material to the Group. The total assets less total

Key Financial Results of Estuary Management Company Limited

2002 2001

£'000 £'000 Lòss for the year after taxation

Reserves

Balances between Estuary Management Company Limited and the rest of the Group

2002 2001 £'000 £'000 Amounts due to Speke Garston Developments Limited

Amountsdue to Northwest Development Agency

Balances due to the Northwest Development Agency

are included within other

debtors (Note 15).

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

ASSOCIATED UNDERTAKINGS Group

Agency

£'000

Share of net assets 2001

1 April

528

Provision At 1 April

2001

(528)

Share of net assets at 31 March 2002 Share of netassets at 31 March 2001

Name of Undertaking

Interest

Class of

Nature of

Business

Associated Undertaking

Maryport Developments

20.4%

Ordinary

Limited

Management of Maryport Harbour

101

Redeemable preference

in Maryport Development Limited was provided for in full in 1999/2000 to reflect Northwest Development Agency's intention to withdraw from this investment on 31 sI March 2003.

The investment

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

JOINT VENTURES

Name of Undertaking

Nature of Business

Interest Class of

Shares New East Manchester Limited (Limited by Guarantee)

331/3 %

Regeneration of East Manchester

Liverpool Vision Limited

331/3 %

Regeneration of Liverpool

(Limited by Guarantee)

The total assets and total liabilties and financial results of each of the above undertakings are not material to the Agency, or the Group. At 3151 March 2002 (31$1 March 2001-£188,990 due to New East Manchester Limited) there were no amounts owed to or from the Joint Venture companies and the Group. Amounts due to Joint Ventures are included within other creditors.

14 DEVELOPMENT ASSETS

At 1 April 2001

Additions in year Transfer from English

Group

Agency

2002 2001

£'000 £'000

25,765 34,067 6,845

24,746 10,953

28,915 6,845

1,225

184

Partnerships Surplus on revaluation for the

16,165 .

13,246 2,864 184

year Fair Value Adjustment - Assets transferred from English

334

Partnerships 68,236

35,883

52,259

Oisposals

(4,301) (3,024)

(8,770) (1,348)

(4,301 )

(2,336)

(129)

Valuation at 31 March 2002

60,911

25,765

45,622

16,165

Amounts written down

16,294

Note: The fair value adjustment relates to the assets transferred from English Partnerships at historical cost being adjusted to reflect open market value.

NOTES TO THE FINANC'IAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

The. amounts due from the subsidiary undertaking represents payments received subject to clawback and have no fixed repayment date. On termination of the shareholders agreement the amount repayable is limited to the company's total net assets on 25 April 2003 after first providing for any EROF clawback due and termination costs and actual and contingent liabilities at that date.

assets and liabiliies has been undertaken by the subsidiary company in conjunction with a review of the budgets and business plans to 25 April 2003 as part of the formal exit plan. Based on this the directors of Speke Garston Developments Limited are of the opinion that it is unlikely that the amount A valuation of the company's

repayable will exceed ÂŁ8.1 m (ÂŁ4.3m in 2000/01). Accordingly the amounts owed have been written down to reflect the anticipated repayable amount.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

16 CREDITORS: Amounts fallng due within one year Group

Other taxes and social security Trade creditors Rural loan interest due to OETR Other creditors

2001 £'000

217 13,057

195 3,656 22

217 12,099

163

2,195 8,014

1,788 2,578 110

2,195 8,014

1,788 2,180 110

23,646

8,440

22,688

7,498

Corporation tax

Deferred Income

Accruals

Agency 2002 2001 £'000 £'000

2002 £'000

195

3,112 22

48 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

liabiliies represent known liabilities for cost on specific sites which currently have no market value. The provision for environmental

The major components of the provision for deferred taxation which has been fully provided at a corporation tax rate of 30% are as follows:

Group

Accelerated capital allowances

Agency

2002 2001

£'000 £'000

(106)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

18A

GOVERNMENT GRANT RESERVE. GROUP

Group 2002

2002

£'000

At1 April 2001

108,609

Fair Value Adjustment

£'00

106,£

1,997

(431)

Disposals Depreciation

200

334

Operational Assets Additions

Transfer to Investment Assets

2001 £'000

(18)

(328)

Investment Assets Transferred from properties occupied by the Agency

(279)

431

Additions

1,702

Disposals

(5,138)

Amounts written off

(2,167)

1,4: (5,961 )

Development Assets

Transferred from English Partnerships

6,845

Additions

28,915

Disposals

(2,336)

Amounts written off

(4,301)

Amounts released to Income and Expenditure account

14,701

2,8t (129)

6,387 (14,701)

(6,38'

Revaluations Investment Assets

Development Assets Balance at 31 March 2002

2,9E

1,225

135,357

108,6C

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

188 GOVERNMENT.GRANT RESERVE -AGENCY Agency 2002

2002

£'000

At 1 April 2001

2001 £'000

114,429

Fair Value Adjustment

112,7:

334

Operational Assets Additions Transferred to Investment Assets

2001 £'000

1,997

(431)

Disposals

(18)

Depreciation

(328)

Investment Assets Transferred from properties occupied by the Agency

(276) 431

Additions

1,702

Disposals

(5,138)

Amounts written off

(2,167)

1,4f (5,961 )

Development Assets Transferred

6,845

from English Partnerships

Additions

Disposals . Amounts written off . Amounts released to Income and Expenditure account

28,915 (2,336)

2,8E

(129)

(4;301 )

(14,701 )

(6,384) (14,701 )

(6,38.i

Revaluations Investment Assets

2,98

Development Assets

Balance at 31 March 2002

139,952

114,42

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

INCOME AND EXPENDITURE RESERVE Group

2002 £'000 At 1 April 2001 Transferred from predécessor organisations 1 April

2001

Other reserve release Subsidiary Undertaking Surplus/(Deficit) for year

Balance at 31 March 2002

OTHER

i\~l

Agency 2001 £'000

9,940

10, "to'!

(696) 257

4,327 13,828

2002 £'000

£'OO(

(1,861)

2.",66

200'

(696) 257

3,889

3,374

(4,50

9,940

1,074

(1,86

(25) (227)

RESERVES

2002 £'000 Balance at 1 April 2001

Movement in year

Group 2001 £'000

2002 £'000

Agency 2001 £'000

257

(257)

181

(257)

181

Balance at 31 March 2002

257

21 LOANS: Amounts repayable after more than one year. Group

Loan Stock

Amounts written down in year

Agency

2002 2001

£'000 £'000

3,750 (3,750)

.~ ,'/'

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED) Loan Stock of £3,750,000 was issued on 10lh July 1996 by the Agency's subsidiary

Speke Garston Developments Limited. It is unsecured and no interest is payable unless written notice is received from the stockholder with the Agency's agreement.

No notice has been received to date. '

The loan stock is redeemable on 251h April 2Q03 in accordance with a shareholders' agreement unless certain changes in the shareholding trigger earlier redemption.

Under the terms of the agreement governing repayment of the loan stock, no amounts will be repayable until the amounts due to ourselves, in respect of grants

received and subject to c1awback, have been satisfied in full. It is therefore anticipated that the loan stock wil be repayable for a nominal amount of £1. Accordingly the loan stock has been written down in full in 2000-01 to reflect the anticipated repayable amount. This treatment has been agreed with the third party

who is entitled to repayment. 22 RECONCILIATIONS OF NET CASHFLOWTO MOVEMENT IN NET FUNDS 2002 £'00 Increase in cash for the period

2,667

net funds

2,667

Change in

2,665

Net funds at 1 April 2001 Net Funds at 31 March

5,332

2002

23 OPERATING LEASES As at 31 March 2001 the Agency had annual commitments under operating leases as follows:

2002

Leases expiring:- within one year . . -eetween-one-andfive-years-. - over five years

Buildings Others

2001 Buildings Others

£'000 £'000

287

27 823

109

103

94 146

850

190

390

240

Rental costs of operating leases are charged to the Income and Expenditure Account on a straight line basis over the term of the lease. Operating lease commitments over 5 years relate primarily to the Agency's Headquarters at Warrington.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED

24 CONTINGENT LIABILITIES At 31 March 2002 there were no significant contingent liabilities (2001 nil).

25 COMMITMENTS As

Restated

2002 2001

£'000 £'000 Expenditure authorised by the Board and contracted for at 3151 March amounted to:

Capital Grant

3,100 193,400

1,900 182,400

Grant commitments relate to programme expenditure in relation to the Land & Property Programme, Single Regeneration Budget, Skills Development Fund, Rural Programmes and the Regional Innovation Fund. The figures now include commitments for the SRB programme for only one year as opposed to lifetime SRB commitments previously shown. Although there is a reasonable expectation that commitments beyond one year will materialise grant offers for this programme are subject to annual contract.

26 FINANCIAL INSTRUMENT departmental grants for its cash requirements and is therefore not exposed to liquidity risks. It has no material deposits and all material assets and liabilties are denominated in sterling, so it is not exposed to interest rate risk or currency risk. Transactions entered into which result in debtors due after more than one year have a low credit risk. The agency has no borrowings and relies primarily on

. 27 POST BALANCE SHEET EVENTS

With effect from 1 April 2002 responsibility for Regional Selective Assistance (RSA) with offers less than £2m transferred from Government Office North

West. Related assets and liabilities transferred to the Agency on that date. It is not possible at this time to place a financial value on these transfers. Net assets transferred will be brought into account during 2002/03.

With effect from 1 April 2002 the Agency ceased to have financial responsibility for the Rapid Response Fund. Responsibility for the administration of this fund transferred to the Employment Service (Department of Work and Pensions). As at 31 March 2002 there were current liabiliies of £22,434.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2002 (CONTINUED)

28 RELATED PARTY TRANSACTIONS The Northwest Development Agency is a Non-Departmental Public Body sponsored by The Department

of Trade and Industry (OTI). OTI is regarded

as a related party with which, during the year, Northwest Development Agency has had a significant number of material transactions. The Office of the Deputy Prime Minister (formerly OTLR) is the sponsor body of English Partnerships and therefore English Partnerships is also regarded as a related party. During the period, the Agency and English Partnerships have acted in partnership on a number of projects and have alsĂ˛ transacted in respect of a service level agreement under which English Partnerships provides certain support functions for the Agency. Board members took no part in the discussions or in the subsequent decisions by.the Board on proposals which concern organisations that members have connections as reported on the register of member's interests,

During the year none of the Board members, key management staff or other related parties has undertaken any material transactions with the Northwest Development Agency apart from those detailed on pages 55 and 56.

Board Member

Clive Jeanes

Dr Fred Ridley

James H Ross

Dennis G Mendoros

Richard Leese

Alan Manning

Anil Kumar Ruia

Mike Slorey

it P,"'"" La..

Board Member

Felicity Goodey

Board Member

Deputy

Mike Doyle

Related Party Transactions Name

Liverpool Vision

English Partnerships

UMIST

North West Business Leadership Team North Wesl Texlile Network Limiled

University of Salford

MIDAS

Chamber Business Enlerprises Limiled

Merseyside Special Investmenl Fund Partners Lld

Manchesler Cily Council New Easl Manchesler Limiled

Northern Technologies The Pendle Partnership

. North Wesl Aerospace Allance

Liverpool Vision

Manchesler Enlerprises Limited

Slockport Melropolilan Borough Council

Manchesler Melropolilan University

Wigan Borough Partnership ExceUence North Wesl

The Lowry Centre

ExceUence North Wesl

SI Helens Metropolilan Borough Council

Connected Party

Year ended 31st March 2002

Deputy Chair

Non-Execulive Direclor

Employee

Member Direclor

Councill Finance Committee

Direclor

Director

Member

CounciUor Direclor

Direclor Chairman

Chairman

Direclor

Advisòr / Observer

Councilor

Non-Execulive Chairman Non-Execulive Chairman Deputy Chairman of Govemors

. Non-Execulive Direclor Chairman

Councilor

Position

ling costs

Evenls £318,708 Granls - £2,000 Consultancy £18,112 Evenl Managemenl

Room hire for events

Grants

Contribution 10 opera

£3,866 Vacanl rales

£5,212,991 Land & Property/Single Regeneration Granls

Nature of transaction

373,508

95,890 556,262

53,944

. 6,000

784,054

454,807

45,837

164,695

23,875,505 220,000

100,386 2,836,821

277,097

373,508

C17r: Tr-inin,.

£373,333 Grants

£21,831 Consultancy Services £33,067 Hardware Upgrades

£95,000 Granls - £890 Room Hire £501,364 Service Level Agreement

Granls .

Conlribulions 10 operaling costs

£2,500 Sponsorship

£648,039 Grants - £133,515 Consultancy services

£249 Conlribulion 10 operating costs

£6,206 Conlribulion 10 operaling costs £449,529 Grants - £5,029 Consultancy services

£20,000 Grants - £19,631 Secondmenl of staff

Single Regeneration Budget Grants

£23,697,217 Grants - £178,288 Rales Projecl fees

£392 - Evenl Managemenl £100,000 Granls - £386 Conlribulion 10 operaling costs Grants

£260,041 Grants - £16,664 Consullancy services

£175 Training

£373,333 Grants

23,486 - Single Regeneration Budgel Grants 934,G10 Single Regeneralion Budgel Grants

5,473 38,900 338,820

38,900 4,800,000

5,216,857

Total value of transaction £

~ ~

Related Party Transactions Name

Year ended 31st March 2002 Connected Party

784,054

220,000

4,985,832 373,508 220,000 38,900

705,589 80,090

Direclor Direclor Director Director Direclor Direclor Direclor

166,050 800,000 439,088

6,653

30,000 7,000

454,807

Total value. of Transaction £

Member

Co-opled Member General Council

Trustee

Direclor

Vice Chancellor

Direclor Member

Director

Position

Grants - £133,515 Consullancy services

£25,000 Grants - £55,090 Conlribulions 10 markeling

Grants

Evenls

Projecl fees

£175 Training

£373,333 Granls

£4,983,050 Grants - £2,782 Contribution to operaling costs

Projecl Fees

£2,500 Conlribulion 10 operaling costs

£648,039

£325,956 Grants - £75,000 Financial support for Fool & Mouth disease £38,132 Conlribulion 10 operaling cosls

Specialisl support

Grants

£5,000 - Grants, £1,653 - Events

Conlribulion to operaling costs

Granls

£249 Paymenl for supplies

£449,529 Granls - £5,029 Consultancy services

Nature of transaction

NORTHWEST DEVELOPMENT AGENCY

ACCOUNTS DIRECTION GIVEN BY THE SECRETARY OF STATE WITH THE TREASURY, IN ACCORDANCE WITH SECTION 14(2) OF THE CONSENT OF THE

REGIONAL DEVELOPMENT AGENCIES ACT 1998

1. The annual accounts of Northwest Development Agency Regional Development

Agency (hereafter in this accounts direction referred to as "the Agency") shall give a true and fair view of the income and expenditure and cash flows for the year and the state of . I

affairs at the year end. Subject to this requirement, the annual accounts shall be I

prepared in accordance with:-

(a) the accounting and disclosure requirements given in Government Accounting and in the Treasury guidance Executive Non-Deparlmental Public Bodies Annual Reports and Accounts Guidance (issued July 2000), as amended or augmented from time to time, and subject to Schedule 1 to this direction; (b) any other guidance that the Treasury may issue from time to time in respect of accounts that are required to give a true and fair view; the Secretary of State.

insofar as these requirements are appropriate to the Agency and are in force for the year for which the accounts are prepared, and except where agreed otherwise with the

Secretary of State and with the Treasury in which case the exception shall be described in the notes to the accounts.

2. Schedule 1 to this direction gives clarification of the application of the accounting and disclosure requirements of the Companies Act 1985 and accounting standards and also

gives any exceptions to standard Treasury requirements. Additional disclosure requirements of the Secretary of State are set outin Schedule 2.

accounts.

3~ This direction shall be reproduced as an appendix to the annual

4. This direction replaces that dated 31 March 1999.

Signed by authority of the Secretary of State

for the Environment, Tr~nsport and the Regions

Richard. Allan.........................................

A grade 5 offcer in the Department of the Environment, Transport and the

Regions Date .301h March 2001................... ...... ..........

NORTHWEST DEVELOPMENT AGENCY

DIRECTION TO THE ANNUAL ACCOUNTS SCHEDULE 1

1. Expenditure in theincomH and expenditure account shall include a notional cost of capital, at 6% of the average net assets during the year. This amount shall be reversed after the line showing the surplus or deficit for the year.

2. Grants awarded by the Agency shall be included as expenditure in the income and expenditure account when there is a constructive obligation to pay the grant.

3. Stocks and work:"in-progress shall be included in the balance sheet at the lower of estimated replacement cost and estimated net realisable value. - 4~ Government grants used to pay for fixed assets shall be credited to a grant reserve. This is different from accounting standard SSĂ&#x20AC;P4 which says that such grants should be credited to deferred income. 5. Revaluation gains on fixed assets paid for from government grant shall be.

taken to

the grant reserve in the balance sheet. This is contrary to the Companies Act 1985 which requires such gains to be credited to the revaluation reserve. 6. On the disposal of a fixed asset paid for wholly by government grant, an amount

equal to the profit or loss on disposal shall be transferred from the grant reserve to the income and expenditure account. Where government grant was only used to pay for part of the cost of the asset, the amount of this transfer shall be reduced in proportion. These requirements are different from those in accounting standard FRS3 which says that an amount transferred to a reserve, other than from the income and expenditure account, should not be recognised in subsequent income and expenditure accounts.

7. A provision shall be made for deferred tax in accordance with current accounting standards. 8. The foreword and balance sheet shall be signed and dated on behalf of the board members and by the accounting offcer.

'1lS

NORTHWEST DEVELOPMENT AGENCY DIRECTION TO THE ANNUAL ACCOUNTS

SCHEDULE 2 ADDITIONAL DISCLOSURE REQUIREMENTS The following information shall be disclosed in the annual accounts, as a minimum, and in addition to the information Jequired to be disclosed by paragraphs 1 and 2 of this direction.

1. The foreword A statement on the Agency's policy for conserving energy, reducing waste and minimising the rele채se of greenhouse gases.

2. The income and expenditure account or the notes thereto (a) the following income (i) grants (ii) proceeds on the disposal of development properties

(iii) proceeds on the disposal of fixed assets

(iv) rents and maintenance charges receivable (~) joint venture profits

(b) the following expenditure -

(i) . book value of development properties sold

(ii) movements in provisions for losses on development properties

(ii) jointventur6 losses (iv) debts written off and movements in provisions for bad and doubtful

debts

3. The notes to the annual accounts (a) an analysis of grants from: (i) the Department of the Environment, Transport and the Regions

(ii) European Community funds

NORTHWEST DEVELOPMENT AGENCY DIRECTION TO THE ANNUAL ACCOUNTS

(iii) other sources (b) For grants from the Department of the Environment, Transport and the

Regions the following information shall also be shown:

(i) the amount that the Agency is entitled to receive for the year

(ii) the amount received during the year

(iii) the amount released to the income and expenditure account for the year fixed assets

(iv) the amount used in the year to acquire or improve

(v) movements on amounts carried forward in the balance sheet under debtors, creditors, deferred incomeor deferred grant reserve (c) an analysis

of grants included as expenditure.in the income and expenditure

account and a statement of the total value of grant commitments not yet included in the income and expenditure account;

*(d) a report on the emoluments of the chief executive and of each individual board member and senior manager during the year (with separate disclosure where more than one person occupied an office). The report shall include full

details of all elements in the remuneration package of each person, such as fees, salary, annual bonuses, payment on tĂŠrmination of offce, other taxable benefits, pension contributions, and the performance related elements of these (for which the basis on which the performance is measured shall be explained). For each board member, the report shall also show the time commitment in terms of days per month; *(e) if a board member, the chief executive or a appointed for a fixed termor is on a fixed-term

senior manager has been service contract, the

term shall

stated together with details of any predetermined compensation on termination of office;

pension entitlements earned by the chief executive and by *(f) a statement of the each individual board member and senior manager during the year, disclosed on a basis recommended for non-departmental public bodies by the Treasury, or recommended for companies by the Faculty of Actuaries or the Institute of

Actuaries; (g) details of employees, other than board members, showing:-

NORTHWEST DEVELOPMENT AGENCY DIRECTION TO THE ANNUAL ACCOUNTS

(i) the average number of persons

employed during the year, including

part-time employees and secondees, analysed between appropriate categories (ii) the total amount of loans to employees

(ii) employee costs during the year, showing separately:(1) wages and salaries (2) early retirement costs (3) social security costs

(4) contributions to pension schemes

(5) payments for unfunded pensions (6) other pension costs;

(h) a statement showing the movements during the year on long term loans given by the Agency and on current asset investments held; (i) a statement of outstanding commitments

for loans granted and of committed

lending in future periods; U) an analysis of liquid resources, as defined by

accounting standard FRS1

(revised); (k) in the note on debtors, prepayments and payments on account shall each be identified separately;

(I) particulars of any transaction, arrangement or contract (other: than a contract

of service or of employment with the Agency), including transactions at arm's

length, entered into by the Agency with another party, exceeding ÂŁ5,000 in value, in which party a board member, an executive, a senior employee, or a person connected with any. of the foregoing, at any time during the year, had a direct financial interest that was notified to the Agency. For these purposes, a senior employee means someone whose emoluments in the year (excluding pension contributions but including the other elements mentioned in sub-paragraph 3(d),

above) exceeded ÂŁ50,000; and a connected person shall be as defined in section 839 of

the Income and Corporation Taxes Act 1988 or superseding

legislation and including a member of the same household;

- .' i...

1(' j.

NORTHWEST DEVELOPMENT AGENCY DIRECTION TO THE ANNUAL ACCOUNTS (m) a statement of losses and special payments during the year, being

transactions of a type which Parliament cannot be supposed to have contemplated. Disclosure shall be made of the total of losses and special

payments if this exceeds £100,000, with separate disclosure and particulars of any individual amounts in excess of£100,000. Disclosure shall also be made of any loss or special payment of £100,000 and below if it is considered material in the context of the Agency's 'operations.

* 3(d), 3(e) and 3(f). Under the Data Protection Act 1998, individuals need to give their consent for some of the information in these sub-paragraphs to be disclosed. If consent is withheld, this should be stated next to the name of the individuaL.