UNIVERSITY OF WARWICK STUDENTS' UNION CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 July 2010
ISSUE: 12th January 2011
CONTENTS PAGE
Legal and Administrative Information Report of the Board of Trustees Statement of the Board of Trustees' Responsibilities Independent Auditors' Report
1 -7 8 - 13 14 15 - 16
Group Income and Expenditure Account
17
Balance Sheets
18
Consolidated Cash Flow Statement
19
Principal Accounting Policies
20 - 22
Notes to the Financial Statements: Note 1 Note 2 Note 3 Note 4 Note 5 Note 6 Note 7 Note 8 Note 9 Note 10 Note 11 Note 12 Note 13 Note 14
Deficit for the Year Pension Scheme Taxation Provisions for Liabilities and Charges Tangible Fixed Assets Capital Commitments Fixed Asset Investments Stocks Debtors Creditors Accumulated Revenue Reserve Cash Flow Statement Related Party Transactions Post Balance Sheet Events
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
23 23 - 24 24 24 25 25 26 - 27 27 28 28 29 29 30 31
LEGAL AND ADMINISTRATIVE INFORMATION UNION
UNIVERSITY of WARWICK STUDENTS' UNION
GOVERNING INSTRUMENT The Union was incorporated under the Royal Charter founding the University of Warwick. The Union's affairs are however governed by its own constitution and regulations drawn up under that constitution.
CHARITABLE STATUS
The University of Warwick Students' Union is an unincorporated charity established under the Education Act 1994. As Students' Unions connected with exempt higher education institutions were removed by section 11(9), Charities Act 2006, from the list of exempt charities in Schedule 2 to the Charities Act 1993, the Warwick Students' Union has registered as a charity and a company limited by guarantee from 1st August 2010.
From 1 August 2010
WARWICK STUDENTS' UNION Registered UK charity number:
1136894
A company limited by guarantee registered in England and Wales. Registered company number: 7297865
BOARD OF TRUSTEES Sabbatical Officers
Appointed
Resigned
A Bradley S Khaku A Perkins I Acquah J Hall A Twiss S Wannell
President / Chair Education Finance Communications Societies Sports Clubs Welfare
1 August 2009
31 July 2010
1 August 2009
31 July 2010
1 August 2009
31 July 2010
1 August 2009
31 July 2010
1 August 2009
31 July 2010
1 August 2009
31 July 2010
1 August 2009
31 July 2010
D Stevens S Ruston S Stanley C Luck A White G Whitworth L Boe
President Education Finance Democracy & Comms Societies Sports Clubs Welfare
1 August 2010
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
1
1 August 2010 1 August 2010 1 August 2010 1 August 2010 1 August 2010 1 August 2010
LEGAL AND ADMINISTRATIVE INFORMATION BOARD of TRUSTEES continued Student Trustees
Appointed
B Wood Vice Chair A Clarey C Watts M Wassermann S Stanley T Evans J L E Wolfson V N J Fowler
Lay Members
24 November 2008 24 November 2008 24 November 2008 16 February 2009
28 June 2010
24 November 2008
28 June 2010
1 August 2010 1 August 2010 1 August 2010
T Smeaton S P Baylis
24 November 2008 9 March 2009
T W I King L C Morrison J Ryder
10 May 2010
J Clements
14 July 2008
10 May 2010 10 May 2010
SENIOR MANAGEMENT Chief Executive
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
2
Resigned
LEGAL AND ADMINISTRATIVE INFORMATION COMPANY
STUDENTS' UNION SERVICES WARWICK LIMITED
GOVERNING INSTRUMENT
The company is a limited company with share capital. It is governed by its Memorandum and Articles of Association.
COMPANY REGISTERED NUMBER
DIRECTORS
2197761
The following directors were appointed on 1 August 2009 and resigned on 31 July 2010: A Bradley A Perkins I Acquah J Hall S Khaku A Twiss S Wannell The following directors were appointed on 1 August 2010: S Stanley G Whitworth The following director was appointed on 18 November 2010: A H Smith
COMPANY SECRETARY
J Clements
REGISTERED OFFICE
SUHQ Union North Warwick Students' Union University of Warwick Gibbet Hill Road Coventry CV4 7AL
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
3
LEGAL AND ADMINISTRATIVE INFORMATION COMPANY
WARWICK STUDENTS' UNION SERVICES LIMITED
GOVERNING INSTRUMENT
The company is limited by guarantee not having share capital. It is governed by its Memorandum and Articles of Association.
COMPANY REGISTERED NUMBER
DIRECTORS
1187495
The following directors were appointed on 1 August 2009 and resigned on 31 July 2010: A Bradley A Perkins I Acquah J Hall S Khaku A Twiss S Wannell The following director was appointed on 1 August 2010: D Stevens
COMPANY SECRETARY
J Clements
REGISTERED OFFICE
SUHQ Union North Warwick Students' Union University of Warwick Gibbet Hill Road Coventry CV4 7AL
DISSOLUTION
The company is dormant and an application for dissolution was made in August 2010. The company was dissolved on 30 November 2010.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
4
LEGAL AND ADMINISTRATIVE INFORMATION COMPANY
MEMBERSHIP SOLUTIONS LIMITED
GOVERNING INSTRUMENT
The company is a limited company with share capital. It is governed by its Memorandum and Articles of Association.
COMPANY REGISTERED NUMBER
5525449
DIRECTORS
The following directors continued to hold office during the period: C Horton J Clements S Gilling J Bonsall The following director was appointed on 1 August 2009 and resigned on 31 July 2010: A Bradley The following director was appointed on 1 August 2010: D Stevens The following director was appointed on 14 September 2010: S Stanley
COMPANY SECRETARY
J Clements
REGISTERED OFFICE
SUHQ Union North Warwick Students' Union University of Warwick Gibbet Hill Road Coventry CV4 7AL
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
5
LEGAL AND ADMINISTRATIVE INFORMATION COMPANY
STUDENTS' UNION WARWICK EVENTS LIMITED
GOVERNING INSTRUMENT
The company is a limited company with share capital. It is governed by its Memorandum and Articles of Association.
COMPANY REGISTERED NUMBER
6371766
DIRECTORS
The following director has held office since incorporation: J Clements The following director held office since incorporation and resigned on 2 September 2009: D Walters The following director was appointed on 1 August 2009 and resigned on 31 July 2010: A Bradley The following director was appointed on 1 August 2010: D Stevens
COMPANY SECRETARY
J Clements
REGISTERED OFFICE
SUHQ Union North Warwick Students' Union University of Warwick Gibbet Hill Road Coventry CV4 7AL
DISSOLUTION
The company is dormant and an application for dissolution was made in August 2010. The company was dissolved on 30 November 2010.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
6
LEGAL AND ADMINISTRATIVE INFORMATION BANKERS
NatWest plc 24 Broadgate Coventry West Midlands CV1 1ZZ Barclays Bank plc 25 High Street Coventry West Midlands CV1 5QZ
SOLICITORS
Band Hatton & Co 1 Copthall House Station Square Coventry West Midlands CV1 2FY
AUDITORS
BakerTilly UK Audit LLP Chartered Accountants St Philips Point Temple Row Birmingham B2 5AF
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
7
REPORT OF THE BOARD OF TRUSTEES The Board of Trustees of the Union submit their report and the financial statements of the University of Warwick Students' Union for the year ended 31 July 2010.
UNION CONSTITUTION The Royal Charter under which the University of Warwick was founded requires that there shall be a Students' Union. It is therefore considered that the Union is incorporated under the auspices of the University and shares its charitable status. The Union's affairs are however governed by its own constitution and regulations drawn up under that constitution. Following the publication of the Charities Act 2006, the Union has registered with the Charity Commission and incorporated as a company limited by guarantee, as of 1 August 2010.
THE AIMS AND OBJECTIVES OF THE UNION ARE: - to promote the interests of Union members as effectively as possible at institutional, local and national level, now and in the future. - to afford effective communication between its members and the University of Warwick and other bodies. - to provide for the educational, cultural, recreational, sporting, social and welfare needs of its members. - to operate an effective equal opportunities policy whilst guaranteeing freedom of expression and minimising any adverse environmental impact, therefore providing a safe and enjoyable environment for all.
THE FOLLOWING ARE MEMBERS OF THE UNION: Full Members All registered students of the University of Warwick except those who exercise their right not to be a member under clause 22 (2) c) of the Education Act 1994. Sabbatical Officers of the Union are full members of the Union. Associate Members Those persons admitted to membership by the Union Council or a delegated officer, who have paid any required fee.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
8
REPORT OF THE BOARD OF TRUSTEES Honorary Members Those persons conferred honorary life membership by the Union Council or a Union General Meeting. The Union may withdraw membership on disciplinary grounds.
GOVERNANCE The Union is governed by its constitution and individual policies. The policy making bodies are: - Referenda - General Meetings - Union Council Union policy may be amended by resolution of a Referendum, the Annual General Meeting or Emergency General Meeting and the Union Council. The sovereign body of the Union is the Annual General Meeting or Emergency General Meeting except in respect of amendments to the Union constitution which are the business of a duly convened Referendum. The Constitution can only be changed by Referendum and changes must be approved by the University Council before taking effect. Policies passed by Referendum cannot be overturned without a further Referendum. Policies passed by General Meetings cannot be overturned without being debated and voted on at a further General Meeting or Referendum. The President maintains a policy file and record of lapsed policies. Policies lapse after two years unless renewed by the Council who will specify the next renewal date.
OFFICERS OF THE UNION The Officers of the Union are: - Sabbatical Officers - Chair and Deputy Chair of Union Council - Chairs and members of Union Standing and Representation Committee There are seven Sabbatical Officers including a President, Deputy President and Sabbatical responsible for finance.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
9
REPORT OF THE BOARD OF TRUSTEES REFERENDA The President calls up to a maximum of two referendum periods in each academic year at least thirty-five days in advance of close of polling. Members are given a period of fourteen days to submit motions which may only be called to propose changes to the Constitution, to debate a controversial issue, to challenge an affiliation or to propose any changes previously determined at Referendum level. The quorum for Referendum motions is:a) 7.5% of the Union's full membership to cast a valid vote on the motion or b) 5.0% of the Union's full membership to cast a valid vote for the motion or c) 5.0% of the Union's full membership to cast a valid vote against the motion.
GENERAL MEETINGS The President calls an Annual General Meeting during each academic year. Further General Meetings are called by the President if deemed necessary or on receipt of a petition signed by at least 0.5% of the full membership. The policy quorum for all General Meetings is at least 0.5% of the full membership. An inquorate meeting becomes an open meeting which may discuss motions in full and take an indicative vote to be submitted to the next Union Council meeting for consideration. Union Officers are obliged to attend all General Meetings.
UNION COUNCIL Membership of the Union Council includes: -
Sabbatical Officers Chairs of Union Standing Committees and Forums Chairs of Union Representation Committees Convenors of Union Campaigning Groups Senate and Council Representatives, provided they are full Union members Undergraduate, Postgraduate and Medical Faculty Representatives, provided they are full Union members - Chair and Deputy Chair of Union Council - Chair of the Executive Committee The membership of Union Council has a greater number Councillors than Officers.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
10
REPORT OF THE BOARD OF TRUSTEES BODIES REPORTING TO COUNCIL The bodies that report to Council are: - Standing Committees (with the exception of Sports Committee) - Representation Committees - Working Groups
BOARD of TRUSTEES There is a Board of Trustees whose membership is: - an appointed Board of Trustees consisting of up to five lay members and up to six full student members who are not Sabbatical Officers - Sabbatical Officers The President of the Union acts as Chair of the Board of Trustees. The Board of Trustees has ultimate responsibility for the financial matters and financial procedures of the Union. The Board of Trustees may choose to prohibit the implementation of any policy which has financial implications, if it is passed without a realistic financial plan.
RELATIONSHIP WITH THE UNIVERSITY OF WARWICK The relationship between the University and the Union is established in the Charter, Statutes, Ordinances and Regulations of the University. The Union receives a block grant from the University and occupies a building owned by the University Foundation Fund which is leased to the Union at an agreed rent. The Education Act 1994 imposes a duty on the University to take such steps as are reasonably practicable to secure that the Union operates in a fair and democratic manner and is accountable for its finances.
RISK MANAGEMENT The Trustee Board has examined the main strategic business and operational risks faced by the Union. A risk register has been established and is updated at least annually. Where appropriate, systems and procedures have been established to mitigate the risks the Union faces and these are periodically reviewed to ensure that they continue to meet the needs of the Union. In particular, the risk management plan with regard to future finances prompted the recent cost and staffing restructure review with a view to improved long term financial viability.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
11
REPORT OF THE BOARD OF TRUSTEES REVIEW OF THE YEAR & FINANCIAL PERFORMANCE January saw the redevelopment of SU South finally completed. The CuriosiTea Café outlet was the last part of the programme to be delivered. Trading for the food and beverage outlets remained strong with a particularly pleasing outturn for the Dirty Duck Pub which ended 2009-10 £129k ahead of budgetted surplus before overheads. The Union received a package of measures from the University and the University Foundation Fund during the year to offset the impact of the delays to the building. The Union received a one-off additional grant of £350k and was granted a rent holiday for a year. With the redevelopment completed, the February planning round used figures based on actual performance. This review highlighted the need to go back and fundamentally reassess costs across the Union to ensure a more financially sustainable future. The Union embarked on a restructuring programme which identified approximately £250k of staff savings going forward. To enable the Union to embark on this programme of cost reduction measures the University granted an additional one-off allocation of £90k towards the restructure programme. The Union looked forward to 2010-11 and registered as a charitable company limited by guarantee on 1 August 2010. Leading up to incorporation, a considerable amount of work was undertaken to review the governing and constitutional documents. Despite all of these challenges the Union ended the the 2009-10 year £41k ahead of budget achieving a surplus of £567k. This meant that the year end reserves position was positive - at £62k - and some of the pressures with regard to the cash position greatly reduced (when compared to the same period in 2008-09). The Union revisited the programme of end of year celebrations and launched the Six Days of Summer. This series of events built on the success of previous end of year balls (Final Fling Graduation Ball and SportsFed Ball) by adding a Summary Party outdoor music festival combined with the student run Warwick Students Arts Festival. This ended a tough year on a high note as the students celebrated their achievements and enjoyed the entertainments in the summer sunshine. Looking to the years ahead it is difficult to forecast what impact the Browne Report on student fees may have on future funding. The Union undertook the restructuring process in order to build back reserves over time and become more sustainable. It is hoped that these measures will prove sufficient until the future funding position becomes more clear. The Union is very clear that the next few years will not be easy and there remain difficult challenges ahead.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
12
REPORT OF THE BOARD OF TRUSTEES RESERVES POLICY Following the Union's registration with the Charity Commission the Trustees will be considering the level of free reserves required. Prior to incorporation at 31 July 2010 the Union's reserves position was ÂŁ62,426.
AUDITORS BakerTilly UK Audit LLP has indicated its willingness to continue in office.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS The Board of Trustees members who were in office on the date of approval of these financial statements have confirmed, as far as they are aware, that there is no relevant audit information of which the auditors are unaware. Each member of the Board of Trustees members have confirmed that they have taken all the steps that they ought to have taken as Board of Trustees members in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor. On behalf of the Board of Trustees.
D Stevens President
S Stanley Finance Officer
12 January 2011
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
13
STATEMENT OF BOARD OF TRUSTEES RESPONSIBILITIES The Board of Trustees are responsible for preparing the Report of the Board of Trustees and the financial statements in accordance with applicable law and regulations. Charity law requires the Board of Trustees to prepare financial statements for each financial year. Under that law the Board of Trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under charity law the Board of Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Union and the group and of the surplus or deficit of the group for that period. In preparing those financial statements, the Board of Trustees are required to:a) select suitable accounting policies and then apply them consistently; b) make judgements and estimates that are reasonable and prudent; c) state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements. d) prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the Union will continue in business. The Board of Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the Union's transactions and disclose with reasonable accuracy at any time the financial position of the Union. They are also responsible for safeguarding the assets of the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
14
INDEPENDENT AUDITORS' REPORT We have audited the financial statements of the University of Warwick Students' Union for the year ended 31 July 2010 on pages 17 to 31. This report is made solely to the Union's Board of Trustees, as a body, in accordance with the Charities Act 1993. Our audit work has been undertaken to that we might state to the Union's Board of Trustees those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Union and the Union's Board of Trustees as a body, for our audit work, for this report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF BOARD OF TRUSTEES AND AUDITORS The Board of Trustees responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of Board of Trustees Responsibilities. We have been appointed as auditors under section 43 of the Charities Act 1993 and report in accordance with regulations made under section 44 of that Act. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Charities Act 1993. We also report to you if, in our opinion the information given in the Report of the Board of Trustees is not consistent with those financial statements, if the Union has not kept sufficient accounting records, if the Union's financial statements are not in agreement with these accounting records, or if we have not received all the information and explanations we require for our audit. We read the Report of the Board of Trustees and consider the implications for our report if we become aware of any apparent misstatements within it.
BASIS OF AUDIT OPINION We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Board of Trustees in the preparation of the financial statements, and of whether the accounting policies are appropriate to the group's and Union's circumstances, consistently applied and adequately disclosed.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
15
INDEPENDENT AUDITORS' REPORT continued We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with 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 financial 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 affairs of the Union and the Group as at 31 July 2010 and of the Group's surplus of income over expenditure for the year then ended; and - the financial statements have been prepared in accordance with the Charities Act 1993.
BAKER TILLY UK AUDIT LLP Statutory Auditor Chartererd Accountants St Philips Point Temple Row Birmingham B2 5AF ++ January 2011
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
16
GROUP INCOME AND EXPENDITURE ACCOUNT Note
2010 ÂŁ
2009 ÂŁ
1,959,276 4,013,641 121,122 3,414
2,114,064 3,444,623 49,102 10,656
6,097,453
5,618,445
2,068,301 2,774,734 439,712 105,665 142,165 -
1,897,737 2,738,177 1,171,349 102,722 131,196 85,000 76,140
5,530,577
6,202,321
INCOME Union block grants from the University of Warwick Turnover from commercial operations Miscellaneous income Interest receivable
EXPENDITURE Operating costs Payroll General overheads Sports, Social and Committee costs Depreciation Rent Interest payable
1, 5 1
SURPLUS / (DEFICIT) FOR THE YEAR
566,876
(583,876)
This income and expenditure account represents a consolidation of the income and expenditure of the University of Warwick Students' Union, Students' Union Services Warwick Limited, Warwick Students' Union Services Limited, Membership Solutions Limited and Students' Union Warwick Events Limited. The activities of Warwick Students' Union Services Limited and Students' Union Warwick Events Limited have been discontinued and the companies are dormant. Further details of their activity levels are disclosed in note 7. All other activities are classed as continuing. No separate Statement of Total Recognised Gains and Losses has been presented as all such gains and losses have been included in the Income and Expenditure Account.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
17
BALANCE SHEETS
Note
FIXED ASSETS Tangible fixed assets Investments
CURRENT ASSETS Stocks Debtors: Amounts falling due within one year Short-term deposits Cash at bank and in hand
2009 £
UNION 2010 £
2009 £
147,436 24,476
129,988 24,476
147,436 8,534
129,988 8,534
171,912
154,464
155,970
138,522
8
28,991
9,219
28,991
9,219
9
163,452 355,519 407,121
107,119 183,001 104,065
242,668 342,857 334,397
224,197 170,791 36,130
955,083
403,404
948,913
440,337
(988,747)
(1,062,320)
(959,748)
(1,047,474)
(33,664)
(658,916)
(10,835)
(607,137)
(75,824)
-
(75,824)
-
5 7
CREDITORS: Amounts falling due within one year 10 NET CURRENT LIABILITIES PROVISIONS for LIABILITIES and CHARGES
GROUP 2010 £
4
TOTAL ASSETS / (LIABILITIES)
62,424
(504,452)
69,311
(468,615)
REPRESENTED BY: Accumulated revenue reserves
62,424
(504,452)
69,311
(468,615)
The financial statements on pages 17 to 31 were approved by the the Board of Trustees and authorised for issue on 12 January 2011 and are signed on its behalf by:
D Stevens President
S Stanley Finance Officer
The Group Balance Sheet represents a consolidation of the Balance Sheets of the University of Warwick Students' Union, Students' Union Services Warwick Limited, Warwick Students' Union Services Limited, Membership Solutions Limited and Students' Union Warwick Events Limited.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
18
CONSOLIDATED CASH FLOW STATEMENT 2010 £
2009 £
12
631,773
125,419
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest receivable 12 Interest payable 12
3,414 -
10,656 (76,140)
-
-
(159,613)
(73,711)
-
(138,860)
475,574
(152,636)
Note
Net cash inflow from operating activities
Taxation CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Payments to acquire tangible fixed assets
5
FINANCING Long term loan repayment
Increase / (Decrease) in Cash
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Increase / (Decrease) in cash in the period Change in net funds resulting from non-cash flows
Movement in net funds in the period
12(b)
Net funds at 1 August
Net funds at 31 July
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
12(b)
19
2010 £
2009 £
475,574
(152,636)
-
138,859
475,574
(13,777)
287,066
300,843
762,640
287,066
PRINCIPAL ACCOUNTING POLICIES PRESENTATION OF ACCOUNTS These accounts represent a consolidation of the accounts of the University of Warwick Students' Union and its subsidiary undertakings Students' Union Services Warwick Limited, Warwick Students' Union Services Limited, Membership Solutions Limited and Students' Union Warwick Events Limited.
BASIS OF ACCOUNTING The accounts have been prepared in accordance with applicable accounting standards and under the historical cost convention.
BASIS OF CONSOLIDATION These accounts consolidate the financial statements of the Union and its four subsidiary companies. Intra-group transactions are eliminated on consolidation. As disclosed in note 7, the minority interest arising on the consolidation of Membership Solutions Limited has not been reflected in these consolidated financial statements on the basis that the value is not material.
UPDATE ON GOING CONCERN During the year ended 31 July 2010, the Union made a surplus of £566,877 (2009: loss of £583,876). This marks the end of the major redevelopment and refurbishment project for the main Union building SU South. This surplus contribution built the reserves at year end back to a positive position of £62,424 (2009: negative reserves of £504,452) and enabled the Union to register as a charity and a company limited by guarantee. This surplus was achieved with additional financial support from the University in the form of a one-off grant and a rent holiday. This assistance ensured that the impact of delays in opening were minimised and the Union achieved a more financially stable position. In January and February - following the opening of the redevelopment - the Union under took a review of future finances. A staff restructuring and cost cutting programme was implemented to ensure that going forward the Union has adequate resources to continue in operational existance building back operational reserves. The members of the Board of Trustees have reviewed the financial forecasts.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
20
PRINCIPAL ACCOUNTING POLICIES continued TANGIBLE FIXED ASSETS It is the policy of the Union to write-off, in the year of purchase, all fixed assets purchased from its own resources for use by clubs and societies. Equipment purchased for clubs and societies during the year cost ÂŁ41,849 (2009: ÂŁ18,568). The cost of other tangible fixed assets is capitalised and depreciated with depreciation being charged by equal annual instalments commencing with the year of acquisition at rates estimated to write-off their cost less any residual value over the expected useful lives as follows: Building improvements Fixtures, fittings and office equipment IT equipment
3 - 10 years 3 - 5 years 3 years
The Union occupies premises provided by the University of Warwick Foundation.
GRANTS The Union received block grants from the University of Warwick and these are credited to the financial statements in respect of the period to which each grant relates.
INCOME Income represents the value, net of Vaue Added Tax, of income recognised through the operation of bars, catering outlets, entertainment events, gaming, vending, photo and launderette machines, equipment hire, rental income and the provision of stewarding, event management, marketing and reception services. Bars and catering income is recognised at the point of sale of the related goods. Entertainment income is recognised at the point at which the related event commences. Machine income is recognised in line with machine usage. Equipment hire, stewarding, event management, marketing and reception services income is recognised as the contracted service is provided.
LEASE CONTRACTS Rentals paid under operating leases are charged to income as the cost falls due.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
21
PRINCIPAL ACCOUNTING POLICIES continued STOCKS Stocks are valued at the lower of cost and net realisable value. Cost is computed on a first in, first out basis. Net realisable value is based on estimated selling price less the estimated cost of disposal.
DEFINED BENEFIT PENSION SCHEME The group participates in the Students' Union Superannuation Scheme, a defined benefit scheme which is externally funded and contracted out of the State Second Pension. The fund is valued at least every three years by a professionally qualified independent actuary with the rates of contribution payable being determined by the Trustees on the advice of the Actuary. The scheme operates as a pooled arrangement, with contributions paid at a centrally agreed rate. As a consequence, no share of the underlying assets and liabilities can be directly attributed to the Union. Under the terms of FRS17, in these circumstances contributions are accounted for as if the Scheme were a defined contribution scheme based on actual contributions paid through the year.
INVESTMENTS Long term investments are described as participating interests and are classified as fixed assets. Participating interests representing unlisted investments are stated at cost in the balance sheet. Provision is made for any impairment in the value of fixed asset investments.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
22
NOTES TO THE FINANCIAL STATEMENTS 1: RESULT FOR THE YEAR The surplus for the year is stated after charging:
In respect of audit services In respect of tax and other non-audit advice
Depreciation of tangible fixed assets Operating leases: building
2010 £
2009 £
18,000 5,675
20,700 14,219
142,165 -
165,118 85,000
2: PENSION SCHEME The Union participates in the Students' Union Superannuation Scheme, which is a defined benefit scheme whose membership consists of employees of students' unions and related bodies throughout the country. Benefits in respect of service up to 30 September 2003 are accrued on a "final salary" basis, with the benefits in respect of service from 1 October 2003 onwards accruing on a Career Average Revalued Earnings (CARE) basis. The most recent valuation of the Scheme was carried out as at 1 October 2007 and showed that the market value of the Scheme's assets was £56,318,000 with these assets representing 69% of the value of benefits that had accrued to members after allowing for expected future increases in earnings. The deficit on an ongoing funding basis amounted to £24,901,000. The assumptions which have the most significant effect upon the results of the Valuation are those relating to the rate of return on investments and the rates of increase in salaries and pensions. The following assumptions applied at 1 October 2007:- The investment return would be 7.3% per annum before retirement and 5.3% per annum after retirement. - Salaries would increase at 5.2% per annum, equivalent to 2.0% per annum above inflation. Pensions accruing on the CARE basis would revalue at 3.2% per annum. - Present and future pensions would increase at rates specified by Scheme rules with appropriate assumptions where these are dependent on inflation. The 2007 Valuation recommended a contribution requirement expressed in two parts: a rate of 17.3% of Earnings (with higher rates in certain circumstances) paying for future accrual, with additional monthly contributions expressed in monetary terms intended to clear the ongoing funding deficit over a period of
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
23
NOTES TO THE FINANCIAL STATEMENTS 2: PENSION SCHEME continued 15 years. These rates applied with effect from 1 October 2008 and will be formally reviewed following completion of the next Valuation due with an effective date of 1 October 2010. Surpluses or deficits which arise at future valuations will also impact on the Union’s future contribution commitment. In addition to the above contributions, the Union also pays its share of the Scheme’s levy to the Pension Protection Fund. The contribution rate (excluding deficit contributions) for the period from 1 August 2009 to 31 July 2010 applicable to this Union for the majority of members is 8.17% of Earnings for members and 9.38% of Earnings for the Union (17.3%/17.55% in aggregate). The contributions paid into the Scheme by the Union in respect of eligible employees for the year ended 31 July 2010 amounted to £171,523 (2009: £160,519), including funding deficit contributions.
3: TAXATION The Union, as an unregistered charity deriving its charitable status from the University of Warwick's Royal Charter, is exempt from corporation tax and income tax on its charitable income. Students' Union Services Warwick Limited The taxable profits of Students' Union Services Warwick Limited are donated under Gift Aid to the Union with the consequence that no taxation is payable by that company. Membership Solutions Limited The profits for the year for Membership Solutions Limited have been offset against losses brought forward for tax purposes. No taxation arises on the results of Membership Solution Limited. Warwick Students' Union Services Limited This company was dormant during the year and no taxable profits have arisen in Warwick Students' Union Services Limited. Students' Union Warwick Events Limited During the year the inter-company liability with the Union of £66,157 was written-back to the profit and loss. The Union confirmed that the amount had been approved for write-off. The company was otherwise dormant during the year and the profits arising from the write-off in the year have been offset against losses brought forward. No taxation arises on the results of Students' Union Warwick Events Limited.
4: PROVISIONS FOR LIABILITIES AND CHARGES The Union under took a staff restructure during the year and a provision of £75,824 was made for costs associated with the programme. It is expected that this expenditure will be incurred in the current fiscal year (2010-11).
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
24
NOTES TO THE FINANCIAL STATEMENTS continued 5: TANGIBLE FIXED ASSETS - GROUP AND UNION
Fixtures, Building
Fittings and
Total £
Improvements
IT Equiment
£
£
Cost 1 August 2009
2,632,370
849,739
1,782,631
Disposal of asset Additions
(1,843,341) 159,613
(322,868) 17,349
(1,520,473) 142,264
948,642
544,220
404,422
Depreciation 1 August 2009
2,502,382
835,434
1,666,948
Disposal of asset Charge for the year
(1,843,341) 142,165
(322,868) 11,207
(1,520,473) 130,958
31 July 2010
31 July 2010
801,206
523,773
277,433
Net Book Value 31 July 2009
129,988
14,305
115,683
31 July 2010
147,436
20,447
126,989
Following the redevelopment of the SU South building and prior to incorporation on 1 August 2010 the Union undertook a review of the fixed asset register. This resulted in the write-off of fully written-down assets (no longer held) contained in this note.
6: CAPITAL COMMITMENTS Future capital expenditure: Authorised but not contracted Contracted
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
25
2010 £
2009 £
7,500 -
12,210 54,850
7,500
67,060
NOTES TO THE FINANCIAL STATEMENTS continued 7: FIXED ASSET INVESTMENTS Group Cost NUS Services Limited: deposit under Students' Unions central billing scheme NUS Services Limited: 'A' Shares NUS Services Limited: 'B' Shares
Union Cost NUS Services Limited: deposit under Students' Unions central billing scheme Shares in subsidiary undertaking
2010 £
2009 £
16,664 60 7,752
16,664 60 7,752
24,476
24,476
8,332 202
8,332 202
8,534
8,534
The Union holds the entire equity share capital of the following unlisted companies: Students' Union Services Warwick Limited 102 ordinary shares of £1 each being 100% of issued ordinary shares. Students' Union Services Warwick Limited is registered and operates in Great Britain. The primary nature of the business being trading services. Students' Union Warwick Events Limited 100 ordinary shares of £1 each being 100% of issued ordinary shares. Students' Union Warwick Events Limited is registered and operates in Great Britain. The primary nature of the business is arranging external events. The company was dormant during the year and has ceased trading. An application has been made to dissolve this company. For the year ended 31 July 2010, the company's turnover was £nil (2009: £54,931), gross profit was £nil (2009: £9,794), and profit on ordinary activities, before and after taxation was £66,157 (2009: loss of £66,157). The profit during the year occurred due to the write-back of £66,157 of inter-company debt. At 31 July 2010, the company held net assets of £100. The Union agreed to write off the inter-company debt to the value recoverable and provided against the amounts due from subsidiary undertakings to the extent of the irrecoverable debt (2009: £66,157).
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
26
NOTES TO THE FINANCIAL STATEMENTS continued 7: FIXED ASSET INVESTMENTS continued Warwick Students' Union Services Limited The Union also has a dominant influence by virtue of common directors, over Warwick Students' Union Services Limited, a company limited by guarantee registered in Great Britain which leases property to the Union. The company's lease agreement ceased in May 2009 and the company ceased trading at this date and became dormant. For the year ended 31 July 2010, the company's turnover was £nil (2009: £161,142), gross profit was profit was £nil (2009: £76,142) and profit on ordinary activities before and after taxation was £nil (2009: £nil). At 31 July 2010, the company had net assets of £nil (2009: £nil). Warwick Students' Union Services Limited holds 95 £1 ordinary shares in Membership Solutions Limited, a company limited by shares registered in Great Britain, being 95% of its issued share capital. The minority interest value of £1,448 arising on the consolidation of Membership Solutions Limited and the cumulative balance sheet value of (£339) has not been reflected in the consolidated financial statements on the basis that these amounts are not material. The principle activity of Membership Solutions Limited is the sale of membership and other IT related systems. On 1 August 2010 the 95 x £1 share holdings in Membership Solutions Limited will transfer from Warwick Students' Union Services Limited to Warwick Students Union Limited.
8: STOCKS
Goods for resale
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
GROUP 2010 £ 28,991
27
2009 £ 9,219
UNION 2010 £ 28,991
2009 £ 9,219
NOTES TO THE FINANCIAL STATEMENTS continued 9: DEBTORS
GROUP 2010 £
2009 £
UNION 2010 £
2009 £
Amounts falling due within one year: Trade debtors Amounts due from subsidiary undertakings Other debtors Other prepayments and accrued income
117,979
63,083
6,208
25,282
-
-
193,767
151,992
1,921
839
1,921
16,206
43,552
43,197
40,772
30,717
163,452
107,119
242,668
224,197
10: CREDITORS
GROUP 2010 £
2009 £
UNION 2010 £
2009 £
Amounts falling due within one year: Trade creditors Amounts due to subsidiary undertakings
147,784
380,152
142,863
372,803
-
-
100
-
Amounts held for clubs and societies
324,450
331,997
324,450
331,997
Other taxation and social security
150,087
54,693
150,087
61,982
46,687
48,111
46,681
48,111
319,739
247,367
295,567
232,581
988,747
1,062,320
959,748
1,047,474
Other creditors Accruals and deferred income
Amounts held for clubs and societies represent balances held on behalf of these bodies, these funds have been generated separately from the activities of the Union and the use of these funds is directed by the individual club or society.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
28
NOTES TO THE FINANCIAL STATEMENTS continued 11: ACCUMULATED REVENUE RESERVE
1 August Surplus for the year
31 July
12: CASH FLOW STATEMENT
(a)
(b)
GROUP £
UNION £
(504,451) 566,870
(468,615) 537,926
62,419
69,311
GROUP 2010 £
2009 £
Reconciliation of operating deficit to net cash inflow / (outflow) from operating activities: Operating surplus (Increase) / Decrease in stocks (Increase) / Decrease in debtors (Decrease) / Increase in creditors Increase in provisions Depreciation Interest receivable Interest payable
566,876 (19,772) (56,333) (73,573) 75,824 142,165 (3,414) -
(583,876) 76 447,596 31,021 165,118 (10,656) 76,140
Net cash inflow / (outflow) from operating activities
631,773
125,419
At 31 July 2010 £
Cash Flow £
At 1 August 2009 £
407,121 355,519
303,056 172,518
104,065 183,001
762,640
475,574
287,066
Analysis of changes in net funds
Cash at bank and in hand Short term deposits
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
29
NOTES TO THE FINANCIAL STATEMENTS continued 13: RELATED PARTY TRANSACTIONS a)
Membership Solutions Limited The Union purchased £17,216 (2009: £2,861) of services from Membership Solutions Limited and provided £38,564 (2009: £13,551) of services.
Salary support, administrative and expenses Premises and equipment rental
b)
2010 £
2009 £
35,033 3,531
10,645 2,906
38,564
13,551
Students' Union Services Warwick Limited The Union received a donation under gift aid from Students' Union Services Warwick Limited of £167,229 (2009: £46,179). The Union provided £48,010 (2009: £48,011) of services to Students' Union Services Warwick Limited.
Salary support, administrative and expenses Premises and equipment rental
2010 £
2009 £
7,274 40,736
7,275 40,736
48,010
48,011
c)
Students' Union Warwick Events Limited This company was dormant during the year and made no payments under gift aid to the Union. At the end of 2008-09 the Union agreed to write-off the £66,157 inter-company debt held with Students' Union Warwick Events Limited of £66,157.
d)
Warwick Students' Union Services Limited This company was dormant during the year and made no payments under gift aid to the Union.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
30
NOTES TO THE FINANCIAL STATEMENTS continued 14: POST BALANCE SHEET EVENTS Warwick Students' Union incorporated as a company limited by guarantee on 1 August 2010, changing from its previous status as an unincorporated association. From 1 August 2010 Warwick Students' Union has also registered with the Charity Commission. Following changes to the Charities Act 2006 (section 11(9)) students' unions connected with higher education institutions are no longer exempt charities by virtue of their special relationship with their parent institutions. Unions now need to register as charities in their own right.
UNIVERSITY of WARWICK STUDENTS' UNION For the year ended 31 July 2010
31