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TRINITY LABAN

ANNUAL REPORT

For the year ended 31 July 2007 ra ,, ~,,a=n

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3 1 JAN 2008

King Charles Court Old Royal Naval College Greenwich London SE10 9.111 Patron HRH The Duke of Kent KG I Presidents Sir Charles Mackerras, Dr Marion North CBE I Principals Derek Aviss / Anthony Bowne Trinity Laban Company no. 51090 Limited by guarantee Registered Charity no. 309998 VAT no. 766826091


TRINITY LABAN CONTENTS Page COMPANY INFORMATION

3

REPORT OF THE BOARD

4

CORPORATE GOVERNANCE STATEMENT

8

STATEMENT OF RESPONSIBILITIES OF THE MEMBERS OF THE BOARD

10

AUDITORS' REPORT

11

STATEMENT OF PRINCIPAL ACCOUNTING POLICIES

13

CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT

16

CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

17

CONSOLIDATED BALANCE SHEET

18

CONSOLIDATED CASH FLOW STATEMENT

19

NOTES TO THE FINANCIAL STATEMENTS

20

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TRINITY LABAN COMPANY INFORMATION TRINITY LABAN INFORMATION Board Members

Sir Robert Scott 1,4 (Chairman) Sir Walter Bodmer Valerie Bourne CBE (appointed 20/03/2007) Alan Britten CBE 1,3

Richard Brown 째 Paul Chilvers 5 Dr Geoffrey Copland Alan Dexter 3

(appointed 20/03/2007)

Joanna Embling The Lord Geddes 1,2

(appointed 20/03/2007)

Michael Hildesley'.4 Claire Jones e Hilary Oliver 째 Joan Ruddock MP Luke Savage' Dame Ruth Silver DBE Vimmi Singh 3 David Sullivan 째 Claire Williams'

(appointed 08/10/2007)

(appointed 01/09/2006) (appointed 12/12/2006) (appointed 03/09/2007) (appointed 03/07/2007) (appointed 03/09/2007)

1 Member of the Council of Trinity College London 2 Trustee of the TCM Trust 3 Member of the Audit Committee 4 Member of the Planning and Resources Committee 5 Representative member of the teaching staff 6 Representative member of the administrative staff 7 Representative member of the Students' Union

Joint Principals /Chief Executives

Derek Aviss / Anthony Bowne

Company Secretary

Jonathan Peel

Registered Name and Office

Trinity Laban King Charles Court Old Royal Naval College Greenwich London SE1 0 9JF (Limited by guarantee) Company No: 51090, Charity No: 309998

Auditors

External Auditors Kingston Smith LLP Devonshire House 60 Goswell Road London EC1 M 7AD

Internal Auditors Tenon Clifton House, Bunnian Place Basingstoke, Hampshire RG21 7JE

Bankers

Allied Irish Bank (GB) 10 Berkeley Square London N1J 6AA

Natwest Bank 10 Marylebone High Street London W1 A 1 FH

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TRINITY LABAN REPORT OF THE BOARD The Board submits its report and the audited financial statements for the year ended 31 July 2007. On 1 August 2005, Trinity College of Music London merged with Laban and changed its name to Trinity Laban. These financial statements reflect the second year of operation for the newly merged Trinity Laban. Mission Statement Trinity Laban is the UK's first conservatoire of music and contempora ry dance. Its mission is to provide specialist education of the highest international quality, which reflects the increasingly collaborative world of a rt istic practice and suppo rt s the lifelong career development of students and professional pe rforming a rtists. Vision Statement Trinity Laban, at the leading edge of music and dance training, is forward thinking, contemporary and worldclass. It enriches society and empowers individuals to fulfil their artistic potential. Mission goals 1. 2. 3. 4. 5. 6. 7.

To for To To To To To To

provide world-class training in the fields of music and contemporary dance and equip students successful and rewarding professional and artistic careers build life-long relationships inspire and support creativity, innovation and artistic excellence build a new model for collaboration in the performing arts contribute to artistic and educational opportunity and social inclusion restructure the financial profile to invest in excellence develop the reputation and profile of Trinity Laban

Principal activities Trinity Laban is a publicly funded higher education institution. Its principal activities are: a.

b. c. d.

the provision of specialist, practice-based higher education which prepares and equips students for successful careers as performers, composers and choreographers in the fields of music and contemporary dance; the provision of lifelong learning opportunities in dance and music to students ranging from children and young people to professional practitioners and adult learners; the delivery of outreach and community-based projects and activities, which support economic and social well-being and widen access to the arts and higher education; the promotion of music and dance performances by its students, staff and associated professional artists and companies in a variety of venues and contexts.

Review of the year This review covers the second year of Trinity Laban's operation, which saw the continued consolidation and growth of the academic and institutional benefits of merger, as well as some significant milestones in the development of the new organisation. After a tenure of some 12 years, firstly as Principal of Trinity College of Music and then as the founding Principal and Chief Executive of Trinity Laban, Gavin Henderson retired from his post on 31st December 2006. He had overseen a period of huge progress for the company, most notably of course the achievement of both the relocation of Trinity College of Music to its spectacular new premises within the Old Royal Naval College at Greenwich, and the creation of Trinity Laban through the merger of Trinity College of Music with Laban. The new joint Principals, Derek Aviss and Anthony Bowne, have started to build on this legacy by overseeing the completion of a set of key strategic documents (Strategic Plan 2007-2012, Business Plan 2007-2010 and Academic Strategy 2007-2012) which provide an exciting and innovative vision for the future of Trinity Laban as a conservatoire for the 21 st Century, as well as a strong framework for its realisation.

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TRINITY LABAN REPORT OF THE BOARD (Continued.) An important strand of organisational development has been the adoption of the CUC Governance Code of Practice and the establishment of a system of institutional performance monitoring based on key performance indicators. This system will be fully rolled out from November 2007. The ongoing development of a distinctive and cohesive academic profile for Trinity Laban, with collaboration as a key driver, was reflected in a series of activities and achievements during 2006-07. The Trinity Laban Collaborations Group provided a springboard for the proliferation of joint pe rf ormance and curricular work between staff and students, which culminated in several students choosing to present collaborative pieces as pa rt of their final assessments. The first coho rt of students commenced the BMus in Indian Music in September 2006, a programme delivered in pa rtnership with Bhavan, and validation was secured of a new Foundation Degree in Musical Theatre Pe rf ormance in collaboration with Reynolds Pe rf orming Arts. The BA (Hons) Dance Theatre, MA Choreography, MA Dance Pe rformance and MA European Dance Theatre Practice were all revalidated by The City University with highly positive comments received from the validation panel. Alongside the HE programmes, Youth and Junior provision flourished as a central component of Trinity Laban's offer. The Centre for Advanced Training (CAT) at Laban was successfully launched in January 2007, offering young people with exceptional talent and potential in dance the opportunity to access the highest quality of dance training. Demand for places at Junior Trinity was buoyant, and students achieved outstanding standards in both formal examinations and public performances. Both Junior Trinity and the Laban CAT made a significant contribution to Trinity Laban's widening participation programme. In line with its Access Agreement, Trinity Laban applied 17% of its additional income under the new undergraduate fee arrangements to outreach activities, which encompassed schools programmes in both dance and music, out-of hours youth and adult classes, and projects specifically targeting under-represented groups, as well as offering bursaries to students from lower income backgrounds. It also became a member of the 'Creative Way' lifelong learning pa rt nership for the Thames Gateway, which aims to open up progression pathways into and through higher education, and on to employment in the creative and cultural industries. Student recruitment remained particularly strong among home/EU students on funded courses, where the upward trend in applications was maintained. However, there was some under-performance in respect of enrolments on non-funded courses and of overseas students. This was immediately addressed by a review of pricing structures and of recruitment strategy and procedures. As a result, applications in these categories rose and, at the time of writing, targets for registrations in 2007-08 have been exceeded. The Board is mindful of the continuing pressures on international student recruitment (increasing competition, relatively high cost of UK fees and maintenance, unfavourable currency movements), and has prioritised the development of an internationalisation strategy to ensure that Trinity Laban stays at the forefront in a globalised education and employment market, serving the needs of all its students. During the year, Trinity Laban continued to explore and exploit partnerships which support its strategic and academic goals. With the University of Greenwich, it submitted a successful application to HEFCE for funds to assess the potential to share services on the Old Royal Naval College site. It also took forward discussions on possible academic collaborations with Goldsmiths College and Ravensbourne College. Its active participation in KnowledgeEast, a consortium of universities and institutions in the London Thames Gateway offering services to business, was enhanced by the joint appointment of a Trinity Laban Business Enterprise Manager who will help to promote Trinity Laban's commercialisation, enterprise and business support activity. The enhancement and modernisation of human resource practices has been a priority for the HE sector in recent times, and this has found particular expression in the implementation of new and equitable pay and grading arrangements, based on the national Pay Framework Agreement. Trinity Laban was pleased to reach agreement with its local union representatives on consolidated Administrative Staff pay and grading structures, which represented a key step towards full harmonisation of terms and conditions of employment, post-merger. The local union representatives are currently seeking ratification from their respective national offices. A new People Strategy was prepared, with a strong emphasis on staff development and performance management to enable Trinity Laban to achieve the maximum benefit from the contribution of its outstanding staff while ensuring the highest levels of satisfaction for individual employees.

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TRINITY LABAN REPORT OF THE BOARD (Continued.) Recognising the requirements for development implicit in the Academic Strategy and the overall Strategic Plan, we continued to plan for capital development, both at King Charles Court and on the proposed site of the Deptford Creative Village adjacent to Laban. The latter has moved forward encouragingly over the course of the year, with a clearer picture emerging of the broad costs and benefits of each proposed scheme, which provides the basis for appraisal of financing implications and options. The Board recognises the need to achieve the greatest possible efficiency in the operation of the estate, particularly in the light of ever increasing property costs, but also seeks to provide for necessary and sustainable expansion to support future academic and commercial development. In doing so, it has focused especially on technological capacity, which is seen as a vital element in ensuring that Trinity Laban continues to be at the cutting edge of its art forms. Trinity Laban's subsidiary company, the Blackheath Halls, has expanded and developed several major strands of its work, in particular the community and education programme, which culminated in the Halls' first community opera in July 2007 as well as a wide range of participatory activities, including children's' workshops over the Summer and Christmas holidays and at half term breaks. The Halls continues to work very closely with Trinity Laban, and provides the base from which so much of Trinity's rehearsals and concerts can operate, as well as presenting a wide range of cultural events for the public and being available for private hire. The overall financial position is ahead of trajectory to sustainability, although it is not yet as strong as we would wish, following the strain of our relocations. The plans put in place for improved performance began to have a definite impact during 2007. The final outturn showed a material positive variance against forecast, and significant cost savings were achieved. An analysis of benchmarking data revealed that Trinity Laban already performs well against its comparator institutions in respect of the level and diversity of its income. We continue to review all options to increase incoming resource and fully exploit our intellectual capital, and are undertaking a root and branch examination of our cost base to identify possible efficiencies. Financial planning takes place within a well-embedded risk management framework that identifies potential threats to future success and appropriate mitigations, and ensures realistic and prudent projections and strategies. In this context, the Board is confident that the predicted improving financial trajectory over the coming period will be achieved. Performance in all areas is monitored against key performance indicators on a regular basis. During the year, the Endowments of Trinity Laban grew by 22%. The Board is most grateful to the large number of benefactors who have made this possible, as well as those who have contributed to the Annual Fund, which, together with the Endowments, has enabled Trinity Laban to offer scholarships, prizes and access to its educational facilities which might not otherwise have been possible. Trinity Laban is investing further in its Development Office and is intent on building its relationship with Alumni and other well-wishers. In summary, it is the Board's view that Trinity Laban ended the year in a strengthening position financially, strategically and academically. It is gratifying to note finally that this assessment was reinforced by the publication of Guardian University League tables in May 2007 (the first to cover the merged institution), which placed Trinity Laban first in the UK in both its specialisms, Music and Dance. Other Elected Members of the Board Serving During The Period Mayor Sir Steve Bullock Clare Cooper Edward Dilley Gillian Graham Gavin Henderson CBE Cllr Chris Roberts

(resigned 3/10/2007) (resigned 30/10/2006) (resigned 19/12/2006) (resigned 21/09/2006) (resigned 31/12/2006) (resigned 21/03/2007)

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TRINITY LABAN

REPORT OF THE BOARD (Continued.) As elected members representative of the teaching staff, James (Ross) Cameron served until 31 August 2007. Charles Fullbrook served until 31 August 2006 and was succeeded by Paul Chilvers who served throughout the period. As elected members representative of the administrative staff, Jane Wilkinson served until August 2007. Claire Jones served throughout the period. As elected members representative of the Students' Union, Helen Goddard and Alexandra Leonard served until 31 August 2006 and were succeeded by Kevin Elwick and Jessica (Yola) Garbers who served until 31 August 2007 when they were succeeded by Claire Williams and Luke Savage. Disability Statement Trinity Laban is an equal opportunity employer and is committed to giving full and fair consideration to people with disabilities who apply for a vacancy. This policy extends to providing equal opportunities for disabled employees in training, career development and promotion. It is also the intention of Trinity Laban, so far as reasonably practical, to safeguard the employment of any member of staff who becomes disabled or whose disability increases during employment. Where necessary this may involve the restructuring of the roles or the retraining of staff concerned. The Institution aims to provide systematic and efficient services to students with disabilities, and so enable them to make informed decisions about their lives in Higher Education and their future careers. It endeavours to ensure that its provision and structures take into account, as far as possible, the full range of needs of students in a wide range of circumstances including those with physical and mobility difficulties, sensory impairments, specific learning difficulties including dyslexia, medical conditions and mental health difficulties. Auditors Kingston Smith LLP have indicated their willingness to continue in office and in accordance with the provisions of the Companies Act it is proposed that they be reappointed auditors for the ensuing year. Disclosure of information to auditors So far as the directors are aware, there is no relevant audit information of which the company's auditors are unaware. The directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The report of the Board was approved by the Board on 29 November 2007 and signed on its behalf by:

Jonathan Peel Company Secretary

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TRINITY LABAN CORPORATE GOVERNANCE STATEMENT Trinity Laban is committed to exhibiting best practice in all aspects of corporate governance including compliance with all of the code provisions set out in Section 1 of the Combined Code on Corporate Governance insofar as they relate to higher education institutions. The Board, as governing body, is responsible for Trinity Laban's system of internal control and for reviewing its effectiveness. The Board is of the view that there is an ongoing process for identifying, evaluating and managing Trinity Laban's significant risks, that it has been in place for the year ended 31 July 2007 and up to the date of the approval of the annual report and accounts, that it is regularly reviewed by the Board and that it accords with the internal control guidance for directors of the Combined Code as deemed appropriate for higher education. Trinity Laban also follows the Guide for Members of Governing Bodies of Universities and Institutions in England and Wales that was issued by the Committee of University Chairmen in November 2004. The Board, which meets regularly and monitors Trinity Laban's operations, has a majority of lay members. (Lay members are those who are neither employees nor students of Trinity Laban.) Also included in its membership are representatives of staff and students. Lay members do not receive fees or other remuneration for serving on the Board but are entitled to recover expenses. The Board retains ultimate control over Trinity Laban affairs and the matters specifically reserved to the Board for decisions are set out in its Articles. Under the Financial Memorandum with the Higher Education Funding Council for England, the Board holds to itself the responsibilities for the ongoing strategic direction of Trinity Laban, approval of major developments and receipt from its executive officers of regular reports on Trinity Laban's day to day operations. The Board delegates specific authority to the Planning and Resources Committee, the Audit Committee, the Remuneration Committee and the Nominations Committee. These committees are formally constituted with terms of reference and comprise mainly lay members of the Board. Each committee is chaired by a lay Board member. The Planning and Resources Committee recommends to the Board Trinity Laban's annual income and expenditure budgets. It receives and considers repo rts on Trinity Laban's financial performance and monitors actual pe rf ormance against approved budgets and key pe rformance indicators. It reviews the annual financial statements and makes recommendations as appropriate. It also oversees matt ers relating to employment policy, estates, health and safety, development and corporate affairs, and student recruitment policy. The Audit Committee meets at least three times a year with Trinity Laban's external and internal auditors in attendance. It reports directly to the Board in respect of internal control matters and receives regular reports from the Internal and External auditors as appropriate. It also has the role of overseeing the arrangements in place within Trinity Laban to manage risk and the Trinity Laban Risk Management Group submits regular reports and assessment of governance effectiveness. The Remuneration Committee is responsible for the appointment of the holders of senior posts (the Principals and Executive Officers) and determines their grading, pay, conditions of service and severance arrangements. The Nominations Committee makes recommendations to the Board on membership of the Board, Committes of the Board and for recipients of Honorary Awards. The Board has access to independent financial and legal advice, and the Company Secretary and Clerk to the Board, ensure that proper Board procedures are followed. A register of Board Members interests is also maintained. During 2007 there were no related party transactions by Members of the Board with Trinity Laban. Internal control As the Board of Trinity Laban, we have responsibility for maintaining a sound system of internal control that supports the achievement of policies, aims and objectives, while safeguarding the public and other funds and assets for which we are responsible, in accordance with the responsibilities assigned to the Board in the Memorandum and Articles of Trinity Laban and the Financial Memorandum with the Higher Education Funding Council for England.

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TRINITY LABAN CORPORATE GOVERNANCE STATEMENT ( Continued.) 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 designed to identify the principal risks to the achievement of policies, aims and objectives, to evaluate the nature and extent of those risks and to manage them efficiently and economically. This process has been in place for the year ended 31 July 2007 and up to the date of approval of the financial statements, and accords with HEFCE guidance. The following processes have been established as regards risk management: 1.

A risk management policy and strategy have been adopted.

2.

Risk management workshops are held periodically for senior staff to identify Trinity Laban's objectives and risks, and a control strategy is determined for each of the significant risks.

3.

Trinity Laban's Executive Group is charged with overseeing the management of risk.

4.

The Risk Management Group makes regular repo rt s to the Executive and the Audit Committee which provides advice to the Board on the effectiveness of the establishment and implementation of risk management.

5.

Internal auditors' audit planning arrangements, methodology and approach have been tailored in such a way that their audit conforms to the latest professional standards reflecting the adoption of risk management.

Our meeting calendar and agenda enable risk management and internal control to be considered on a regular basis during the year. Risk management has been incorporated fully into the corporate planning and decision making processes of Trinity Laban. We receive periodic reports from the Audit Committee concerning internal control, and we require regular reports from managers on the steps they are taking to manage risks in their areas of responsibility, including progress reports on key projects. Trinity Laban has internal auditors who submit regular reports which include their independent opinion on the adequacy and effectiveness of the system of internal control, together with recommendations for improvement. Our review of the effectiveness of the system of internal control is informed by the work of the internal auditors and Trinity Laban's Executive Group who have responsibility for the development and maintenance of the internal control framework, and by comments made by the external auditors in their management letter and other reports.

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TRINITY LABAN STATEMENT OF THE RESPONSIBILITIES OF THE MEMBERS OF THE BOARD OF TRINITY LABAN ("THE BOARD") In accordance with the Companies Act 1985 and Trinity Laban's Articles, the Board is responsible for the administration and management of Trinity Laban including ensuring an effective system of internal control, and is required to present audited financial statements for each financial year. The Board is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of Trinity Laban and to enable it to ensure that the financial statements are prepared in accordance with the Companies Act 1985, the Statement of Recommended Practice "Accounting for Further and Higher Education" and other relevant accounting standards. In addition, within the terms and conditions of a Financial Memorandum agreed between the Higher Education Funding Council for England and Trinity Laban, the Board, through its designated office holder, is required to prepare financial statements for each financial year which give a true and fair view of the state of Trinity Laban's affairs and of the surplus or deficit and cash flows for that year. In causing the financial statements to be prepared, the Board has ensured that: • • • •

suitable accounting policies are applied consistently; judgements and estimates are made that are reasonable and prudent; applicable accounting standards have been followed, subject to any material depa rt ures disclosed and explained in the financial statements; and financial statements are prepared on the going concern basis unless it is inappropriate to presume that Trinity Laban will continue in operation. The Board is satisfied that it has adequate resources to continue in operation for the foreseeable future: for this reason the going concern basis continues to be adopted in the preparation of the financial statements.

The Board has taken reasonable steps to: •

• • •

ensure that funds from the Higher Education Funding Council for England are used only for the purposes for which they have been given and in accordance with the Financial Memorandum with the Funding Council and any other conditions which the Funding Council may from time to time prescribe; ensure that there are appropriate financial and management controls in place to safeguard public funds and funds from other sources; safeguard the assets of Trinity Laban and to prevent and detect fraud; and secure the economical, efficient and effective management of Trinity Laban's resources and expenditure.

The key elements of Trinity Laban's system of internal financial control, which is designed to discharge the responsibilities set out above, include the following: • • • •

• •

clear definitions of the responsibilities of, and the authority delegated to, heads of academic and administrative departments; a comprehensive medium and short-term planning process, supplemented by detailed annual income, expenditure, capital and cash flow budgets; regular reviews of key performance indicators and business risks and of financial results; clearly defined and formalised requirements for approval and control of expenditure, with investment decisions involving capital or revenue expenditure being subject to formal detailed appraisal and review according to approval levels set by the Board; comprehensive Financial Regulations, detailing financial controls and procedures, approved by the Audit Committee and Planning and Resources Committee; a professional Internal Audit service whose annual programme is approved by the Audit Committee.

The Audit Committee, on behalf of the Board, has reviewed the effectiveness of Trinity Laban's system of internal financial control. Any system of internal financial control can, however, only provide reasonable, but not absolute, assurance against material misstatement or loss.

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TRINITY LABAN AUDITORS' REPORT We have audited the financial statements of Trinity Laban for the year ended 31 July 2007, which comprise the consolidated income and expenditure account, the balance sheets, the consolidated cashf low statement, the statement of total recognised gains and losses and the related notes. This report is made solely to the members of the company, as a body, in accordance with Section 235 of the Companies Act 1985. Our audit work has been undertaken for no purpose other than to draw to the attention of the members of the company those matters we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and to the members of the company as a body, for our audit work, for this report, or for the opinions we have formed. Respective Responsibilities of Members of the Board and Auditors As described in the statement of responsibilities of the Board, the Board is responsible for the preparation of the financial statements in accordance with applicable law and United Kingdom Accounting Standards (Generally Accepted Accounting Practice). Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and United Kingdom Auditing Standards in particular those of the Higher Education Funding Council for England and International Standards on Auditing (UK and Ireland). We repo rt to you our opinion as to whether the financial statements give a true and fair view. We also repo rt to you whether, in our opinion monies expended out of funds from whatever source administered by Trinity Laban for specific purposes were properly applied for those purposes and where relevant managed in accordance with appropriate legislation and whether monies expended out of funds provided by the Higher Education Funding Council for England were applied in accordance with the financial memorandum and any other terms and conditions attached to them. We also report to you if, in our opinion, the information given in the Report of the Board is consistent with the financial statements. In addition we report to you if, in our opinion, the Trinity Laban has not kept proper 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 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 International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board, and the "Accountability and Audit: HEFCE Code of Practice" issued by the Higher Education Funding Council for England. 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 in the preparation of the financial statements, and of whether the accounting policies are appropriate to the group's circumstances, consistently applied and adequately disclosed. 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.

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TRINITY LABAN Opinion In our opinion the financial statements: a) Give a true and fair view, in accordance with United Kingdom (Generally Accepted Accounting Practice), of the state of affairs of Trinity Laban at 31 July 2007 and of the group's income and expenditure and cash flows for the year then ended and have been properly prepared in accordance with the Companies Act 1985 and the Statement of Recommended Practice: Accounting for Further and Higher Education. b) In all material respects, the Report to the Board is consistent with financial statements. c) In all material respects, funds from whatever source administered by Trinity Laban for specific purposes were properly applied for the intended purposes and, where relevant, managed in accordance with appropriate legislation for the year ended 31 July 2007. d) In all material respects, funds provided by the Higher Education Funding Council for England were applied in accordance with the financial memoranda dated 1 August 2000 and 1 October 2003 and any other terms and conditions attached to them.

Kingston Smith LLP Chartered Accountants and Registered Auditors L January 2008

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TRINITY LABAN STATEMENT OF PRINCIPAL ACCOUNTING POLICIES Basis of accounting The financial statements have been prepared under the historical cost convention modified by the revaluation of investments, and in accordance with both the Statement of Recommended Practice (SORP): "Accounting for Further and Higher Education" and applicable Accounting Standards. They conform to guidance published by the Higher Education Funding Council for England. Basis of consolidation The consolidated financial statements combine the financial statements of Trinity Laban and its subsidiary undertaking for the financial year to 31 July. Further details of the subsidiary undertaking are disclosed in the Notes to the Accounts. A separate income and expenditure account for Trinity Laban has not been presented as permitted by section 230 (4) of the Companies Act 1985. Trinity Laban does not consolidate the results of the Students' Union as it operates completely independently. Recognition of Income Income represents fees and amounts earned in respect of tuition given and other activities during the period. Income excludes fees received in respect of tuition to be taken after the year end. Such fees are shown in the balance sheet as fees received in advance. Income from grants, donations, contracts and other services rendered is included to the extent of the completion of the related expenditure, contract or service concerned. All income from short-term deposits and endowments is credited to the income and expenditure account in the period in which it is earned. Income from specific endowments not expended in accordance with the restrictions of the endowment is transferred from the income and expenditure account to specific endowments. Recurrent grants from the Higher Education Funding Council for England are recognised in the period in which they are receivable. Non-recurrent grants from the funding council or other bodies received in respect of the acquisition or construction of fixed assets are treated as deferred capital grants and amortised in line with depreciation over the life of the assets. Tangible fixed assets and depreciation Tangible fixed assets are stated at cost. Depreciation is provided at rates estimated to write-off the costs of tangible fixed assets by equal annual instalments over their anticipated useful lives. Depreciation/amortisation rates are as follows: Leasehold land and buildings

Amortised over the remaining term of the lease by equal instalments

Leasehold improvements

Amortised over the lesser of the remaining term of the lease or 50 years by equal instalments

Equipment and instruments

20% per annum

Where land and buildings are acquired with the aid of specific grants they are capitalised and depreciated as above. The related grants are credited to a deferred capital grants account and are released to the income and expenditure account over the expected useful economic life of the related asset on a basis consistent with the depreciation policy.

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TRINITY LABAN STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (Continued.) A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that the carrying amount of the fixed asset may not be recoverable, or where an asset is deemed to have an economic life in excess of 50 years. Buildings under construction are accounted for at cost, based on the value of architects' ce rt ificates and other direct costs incurred to 31 July in any year. They are not depreciated until they are brought into use. Trinity Laban owns a collection of historical music scores which are held for teaching and research purposes. These scores are included at cost less depreciation. Intangible fixed assets and amortisation Intangible fixed assets are stated at valuation less amortisation. Amortisation is provided at 20% per annum which rate is calculated to write off the valuation of intangible fixed assets, less their estimated residual value, over their estimated useful lives. Investments Listed fixed asset and endowment asset investments are included in the balance sheet at market value. Stock Stock is stated at the lower of cost and net realisable value. Taxation status Trinity Laban is a charity within the meaning of section 506(1) of the Taxes Act 1988. Accordingly, Trinity Laban is potentially exempt from taxation in respect of income or capital gains received within the categories covered by section 505 of the Taxes Act 1988 or section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that such income or gains are applied to exclusively charitable purposes. Trinity Laban receives no similar exemption in respect of Value Added Tax. Pensions Trinity Laban operates four defined benefit schemes: the Teachers' Pension Scheme (TPS), the Universities Superannuation Scheme (USS), the London Pension Fund Authority (LPFA) - which was closed to new membership from 1 August 2005 following the merger - and its own scheme for non-academic staff which is administered by Legal & General (L&G) which became a closed scheme with effect from 31 December 2001. These schemes are externally funded and contracted out of the state earnings related pension scheme and cover most employees. A small number of employees are members of individual The assets of the schemes are invested and managed defined contribution pension schemes. independently of Trinity Laban's finances. Defined benefit schemes Contributions to these schemes are charged to the income and expenditure account so as to spread the cost of pensions over employees' working lives in such a way that the pension cost is a substantially level percentage of present and future pensionable payroll. Variations from regular costs are spread over the expected average remaining working lifetime of members of the schemes after making allowances for fu rt her withdrawals. The contributions are determined by qualified actuaries on the basis of quinquennial (TPS) and triennial valuations (USS, LPFA and L&G) using, respectively, the prospective benefits method and the projected unit method. In respect of the L&G scheme Trinity Laban has adopted FRS17 "Retirement Benefits" in full with effect from 1 August 2005. In accordance with FRS1 7, the operating and financing costs of the Scheme are recognised separately in the Income and Expenditure Account. Service costs are systematically spread over the service lives of the employees and financing costs are recognised the period in which they arise. The cost of past service benefit enhancements, settlements and curtailments are also recognised in the period in which they arise. The differences between actual and expected returns during the year, including changes in actuarial assumptions, are recognised in the Statement of Total Recognised Gains and Losses.

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TRINITY LABAN As permitted by FRS1 7 the TPS and USS schemes have been accounted for as defined contributions schemes. Defined contribution schemes The amount of contributions payable to these pension schemes for the year is charged against the income and expenditure account. Repair and maintenance expenditure The cost of long term and routine corrective maintenance is charged to the income and expenditure account as incurred. Leases Rental costs under operating leases are charged to expenditure in equal amounts over the periods of the leases.

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TRINITY LABAN PROFIT & LOSS ACCOUNT for the year ended 31 July 2007

Notes

2007 Pre -FRS17

£ Income Funding Council grants Academic fees and suppo rt grants Other operating income Investment income

1 2 3 4

Total income Expenditure Staff costs Other operating expenses Depreciation Interest payable

5 6 10 7

Total expenditure

(Deficit)/Surplus on continuing operations after depreciation of assets at cost Exceptional Items Merger and restructuring costs

8

(Deficit)/Surpius on continuing operations before transfers

(Deficit)/Surplus for the Year

£

2006 Restated Total

£

£

7,555,621 3,579,379 4,077,141 114,906

7,537,904 3,409,531 4,007,093 90,261

15,327,047

15,327,047

15,044,789

8,916,341 4,122,320 1,691,032 220,716

9,566,600 4,146,133 1,575,173 272,823

(195,000) 22,000

9,371,600 4,146,133 1,575,173 294,823

15,560,729

(173,000)

15,387,729

14,950,409

(233,682)

173,000

(60,682)

94,380

(92,388)

(391,537)

(153,070)

(297,157)

( 92,388)

(69,490)

9

2007 Total

7,555,621 3,579,379 4,077,141 114,906

(326,070)

Transfer to endowment fund

2007 FRS17

(395,560)

173,000

-

173,000

(69,490)

(222,560)

(297,157)

16


TRINITY LABAN CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES for the year ended 31 July2007 2007

2006

£

£

(tdt) after depredation of assets at cost Unrealised Surplus on revaluation of fixed asset investments Unrealised Surplus on revaluation of endowment investments New endowments Funds Transferred from general Endowments FRS17 Actuarial Gains FRS17 Increase in Pension commutation available

(153,070) 149,579 415,000 947,000 -

(297,157) 34,952 111,184 128,000 (269,826) (320,000) 227,000

Total recognised (lossygain relating to the year

1,358,509

(385,847)

Opening reserves and endowments Total recognised (loss)/gain relating to the year

4,447,492 1,358,509

4,833,339 (385,847)

Closing reserves and endowments

5,806,001

4,447,492

Reconciliation

17


TRINITY LABAN CONSOLIDATED BALANCE SHEET as at 31 July 2007 Group 2007 £

Trinity Laban 2007 £

Group 2006 £

Trinity Laban 2006 £

34,370,075 (20,746) -

33,145,589 -

35,549,918 (41,495) 288,814

34,160,238 288,814

34,349,329

33,145,589

35,797,237

34,449,052

Notes Fixed assets Tangible assets Intangible assets Investments

10 11 12

Endowment assets

13

3,526,109

3,526,109

2,892,040

2,892,040

Current assets Stock Debtors Cash at bank and in hand

14 22

3,220 1,187,377 931,168

1,693,952 862,607

2,675 822.370 704,120

1,320,178 652,699

Creditors: amounts falling due within one year

15

2,121,765 (3,657,701)

2,556,558 (3,477,228)

1,529,165 (2,703,768)

1,972,877 (2,541,582)

Net current liabilities

(1,535,936)

(920,670)

(1,174,603)

(568,705)

Total assets less current liabilities

36,339,502

35,751,028

37,514,674

36,772,387

(4,694,883)

(4,638,216)

(4,923,872)

(4,867,205)

31,644,621

31,112,811

32,590,802

31,905,182

(985,000)

(985,000)

(2,105,000)

(2,105,000)

30,659,620

30,127,808

30,485,802

29,800,182

Creditors: amounts falling due after more than one year

16

Total net assets Pension deficit (FRS17)

24

Net assets Including pension deficit Deferred capital grants

17

24,853,620

24,200,227

26,038,310

25,239,312

Endowments Specific General

19 19

2,370,275 1,155,834

2,370,275 1,155,834

1,887,696 1,004,344

1,887,696 1,004,344

3,526,109

3,526,109

2,892,040

2,892,040

3,264,892 (985,000)

3,386,476 (985,000)

84,220 3,576,232 (2,105,000)

84,220 3,689,610 (2,105,000)

2,279,892

2,401,476

1,555,452

1,668,830

30,659,620

30,127,811

30,485,802

29,800,182

Reserves Revaluation reserve General reserve Pension deficit

20 20 24

Total funds

The financial statements o1pages 14 to 16#erf approved by the board on 29 November ;007 ind signed on its bphalf by:

Jonathan Peel Company Secretary

Principal

-1 -✓„

Sir Robert Scott Chairman

18


TRINITY LABAN CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 July 2007 Notes

2007 ÂŁ

2006 ÂŁ

Cash flow from operating activities (Deficit)/Surplus on continuing operations after depreciation of assets at cost Transfer to endowment fund

(60,682) (69,490)

(297,517)

(84,881) (26,006) (9,715) (20,310) 272,823 (1,374,586) 1,575,172 (545) (365,007) 909,489 (92,388) (20,749) (173,000)

(249,148) (11,899) (5,236) 220,716 (1,586,522) 1,608,543 (663) 587,969 (374,160) (391,537) (20,748) (123,000)

460,125

(643,202)

84,881 9,715 20,310 (272,823)

44,148 11,899 5,236 (220,716)

(157,917)

(159,433)

(395,330) (129,370) 640,229 191,918 415,000

( 1,153,948) (199,260) 241,501 977,514 128,000

722,447

(6,193)

(18,645)

2,215,388

1,006,010

1,406,560

1,006,010 18,645

1,406,560 (2,215,388)

1,024,655

(808,828)

Net debt at 1 August

(3,602,450)

(2,793,622)

Net debt at 31 July

(2,577,795)

(3,602,450)

Income from endowment asset investments Profit on disposal of listed assed investments Income from listed investments Interest received Interest payable Release of capital grants Depreciation Decrease in stocks (Increase) in debtors Increase/(Decrease) in creditors (excluding amounts due to endowments) Restructuring costs Negative goodwill adjustment FRS 17 Adjustment

Returns on Investment and servicing of finance Income from endowment asset investments Income from listed investments Interest received Interest payable

Capital expenditure and financial Investment Purchase of tangible fixed assets Purchase of investments Sale of investments Deferred capital grants re ceived Endowments rece ived

Financing Increase/(decrease) in loans

21

Increase/(decrease) In cash In the period

Reconciliation of net cash flow to movement In net debt Increase/(decrease) in cash in the period Decrease/(increase) in loans

Movement in net debt in the period

22

19


TRINITY LABAN 1

FUNDING COUNCIL GRANTS (HEFCE) 2007 £ Recurrent grant HEFCE WP Grant - Retention HEFCE WP Grant - Access HEFCE ASN HEFCE Disability Specific grants Strategic Development Fund HEFCE E-Learning HEFCE HEIF Non recurrent HEFCE TQEF Other (Summer School Widening Particpation) Deferred capital grants released in year - (note 17) Land and buildings Equipment and instruments Learning and Teaching HEFCE Capital Funding Release

2

6,665,670 72,760 21,470 128,002 15,000

6,603,816 -

154,369 168,825 22,062 -

378,706 129,960 81,564 69,304

152,634 101,756 53,073

74,695 77,810 122,049

7,555,621

7,537,904

2007 £ 2,100,583 782,772 12,850

2006 £ 2,393,918 450,685 -

475,430 207,744

436,692 128,236

3,579,379

3,409,531

2007 £ 755,692 1,885,393 1,067,123 20,747 348,186

2006 £ 657,840 1,588,362 12,575 1,394,456 20,747 333,113

4,077,141

4,007,093

ACADEMIC FEES AND SUPPORT GRANTS Higher education UK/EU students Non-EU students Research Studies Other Fees Junior Trinity Short courses

3

2006 £

Other operating income

Donations from Trust Funds" Other income"' Release of grants and donations for specific projects Deferred capital grants released in year (note 17) Release of negative goodwill (see note 10) Blackheath Halls' income "'"

" Includes £490,000 scholarships donation from TCL. Includes £134,202 of other operating income relating to Blackheath. Blackheath Halls is a subsidia ry of Trinity Laban referred to in note 11.

20


TRINITY LABAN 4

INVESTMENT INCOME 2007 £ Income from listed investments Income from endowment asset investments Bank deposit interest

5

2006 £

9,715 84,881 20,310

11,899 73,126 5,236

114,906

90,261

STAFF COSTS

Wages, salaries and fees Social security costs Other Pension costs

2007 £

2006 £

8,114,614 605,486 846,500

7,682,083 572,061 810,197

9,566,599

9,064,341

(of the staff costs £257,036 ( 2006 £205,660) related to Blackheath Halls) Directors' emoluments The aggregate amount of directors' emoluments was £328,001 (2006: £262,122) . All payments were in respect of services as members of staff and relate to the relevant period of office. 3 directors (2005: 3) are accruing benefits under defined pension schemes as set out in note 24. 2007 £ The emoluments of the highest paid directors were: Salaries* Pension contributions*

2006 £

246,242 42,753

299,588 37,197

288,995

336,785

* The figures shown have been restated so as to include the change in the Chief Executive structure There were no other members of staff in receipt of annual remuneration exceeding £70,000. Other than the Principal and those members of staff referred to above, none of the members of the board received any remuneration during the year other than the reimbursement of travel and subsistence expenses incurred in the course of their duties.

Average staff numbers by major category - full time equivalent: Academic Academic support Administrative Blackheath Halls

2007 Number

2006 Number 104 13 128 11

112 18 116 11

256

257

21


TRINITY LABAN 6

Other operating expenses

Academic departments Academic support services Other support services Administration and central services Auditors' remuneration - External audit - Internal audit - Non audit services General education Scholarships and prizes Premises Blackheath Halls' costs' Miscellaneous

2007 £

2006 £

119,534 220,326 80,907 768,281

73,059 173,350 86,792 645,205

46,381 44,302 16,162 19,992 28,580 821,805 1,318,030 382,770 288,273 1,357,457 1,270,751 199,665 153,293 104,265 49,273

4,146,133 4,122,320

'Includes fees and other expenses in respect of the refurbishment of Blackheath Halls

7

INTEREST PAYABLE

On bank loans and overdrafts Wholly repayable within five years Not wholly repayable within five years

2007 £

2006 £

272,823

220,716

272,823

220,716

8

MERGER AND RESTRUCTURING COSTS These costs were incurred during the merger process of Trinity College of Music and Laban and funded largely from the HEFCE Strategic Development Fund. The costs comprise mainly of redundancies costs.

9

SURPLUS ON CONTINUING OPERATIONS The (deficit)/surplus on continuing operations for the year is made up as follows: 2007 £

2006 £

College Deficit for the year Deficit incurred by subsidiary undertaking

(219,912) (296,700) (2,648) (457)

Group Deficit for the year

(222,560) (297,157)

22


,

TRINITY LABAN 10

TANGIBLE ASSETS Freehold (Assets in Course of Long Leashold Construction)

Group Cost

Freehold Building £

Equipment & instruments £

At 1 August 2006 Additions Disposals At 31 July 2007

26,752,539 26,752,539

12,495,109 2,400 12 497,509

112,594 112,594

4,887,125 392,930 5,280,055

44,247,368 395,330 44,642,698

At 1 August 2006 Charge for Year Disposals

3,124,079 733,867

1,763,939 418,753

31,594 -

3,777,838 422,552

8,697,450 1,575,172

At 31 July 2007

3,857,946

2,182,692

31,594

4,200,390

10,272,622

Net Book Value At31 July2007

22,894,593

10,314,817

81,000

1,079,665

34,370,076

23,628,460

10,731,170

81,000

1,109,287

35,549,918

Total £

Depreciation

At 1 August 2006

Long leasehold buildings with a net book value of £9,471,240 (2006 £9,390,582) have been funded from Treasury sources. If these buildings were to be sold Trinity Laban would have to reinvest the proceeds in accordance with the Financial Memorandum with the Higher Education Funding Council for England (HEFCE) or suffer financial penalties in the event of noncompliance. The two relevant long leasehold interests expire in 2143 and 2183 respectively.

Trinity Laban Cost

Freehold Building £

Long Leashold

Equipment & Instruments £

Total £

At 1 August 2006 Additions Disposals

26,752,539 -

10,369,257 -

4,639,412 390,788

41,761,209 390,788

At31 July2007

26,752,539

10,369,257

5,030,200

42,151,997

At l August 2006 Charge for Year

3,124,079 733,867

888,017 273,147

3,588,875 398,421

7,600,971 1,405,435

At 31 July 2007 Net Book Value

3,857,946

1,161,164

3,987,296

9,006,406

At 31 July 2007

22,894,593

9,208,093

1,042,904

33,145,591

At 1 August 2006

23,628,460

9,481,240

1,050,537

34,160,238

Depreciation

23


TRINITY LABAN 11

INTANGIBLE ASSETS 2007 £

2006 £

Negative goodwill at 1 August Released to income and expenditure account

(41,495) 20,749

(62,243) 20,748

Negative goodwill at 31 July

(20,746)

(41,495)

Negative goodwill arose on the acquisition of The Blackheath Halls in July 2003 and is amo rt ised through the income and expenditure account over 5 years. The College is the sole member of The Blackheath Halls, a company limited by guarantee, incorporated in England and Wales and a registered charity. The principal activity of The Blackheath Halls is to operate as a public pe rformance venue and the Halls are used by Trinity as its principal pe rf ormance venue. 12

INVESTMENTS

Group and Trinity Laban 2007 2006 £

£ Market value At 1 August 2006 Additions at cost Disposals Disposal Costs Net realised investment gains Net unrealised investment gains

288,814 27,303 (344,678) 2,555 26,006 -

247,144 29,349 (22,630) 34,951

At 31 July 2007

-

288,814

Historical cost at 31 July

-

212,970

The above investments are all listed.

13

ENDOWMENT ASSETS

£

Group and Trinity Laban 2007 2006 £

Market value At 1 August Additions at cost Disposals Net unrealised investment gains Changes in Current Assets Realised surplus Changes in cash and bank balances

2,892,040 102,067 (295,551) 104,329 474,628 29,416 219,179

2,790,459 170,648 (206,867) 111,184 (168,596) 195,212

At 31 July

3,526,109

2,892,040

1,765,709 931,135 829,264

1,825,448 711,956 354,636

3,526,109

2,892,040

1,725,504

1,572,769

Represented by: Listed investments at market value Cash balances Other current assets

Historical cost of listed investments at 31 July

24


TRINITY LABAN 14

DEBTORS

Amounts falling due within one year: Trade debtors Other debtors Prepayments and accrued income Due from subsidiary undertaking

15

Trinity Laban

Group

Trinity Laban

2007 £

2007 £

2006 £

2006 £

563,154 462,640 161,583 -

539,521 438,484 142,396 573,551

416,957 331,297 74,116 -

388,739 317,564 54,643 559,232

1,187,377

1,693,952

822,370

1,320,178

CREDITORS: amounts falling due within one year

Bank overdraft Bank loan Taxation and social security Trade creditors Other creditors Accruals and deferred income Due to endowment funds (note 13)

16

Group

Group

Trinity Laban

Group

Trinity Laban

2007 £

2007 £

2006 £

2006 £

363,805 19,627 304,617 513,038 1,413,168 226,610 816,836

327,373 19,627 285,055 452,279 1,393,576 182,482 816,836

791,127 152,087 247,539 432,403 535,766 205,889 338,957

791,127 112,928 233,202 373,671 535,766 156,680 338,208

3,657,701

3,477,228

2,703,768

2,541,582

CREDITORS: amounts falling due after more than one year Group

VAT Repayable Bank Loan Other creditors Mortgage loan

Trinity Laban

Group

Trinity Laban

2007 £ 627,500 4,000,000 10,716 56,667

2007 £ 627,500 4,000,000 10,716 -

2006 £ 848,560 4,018,645 56,667

2006 £ 848,560 4,018,645 -

4,694,883

4,638,216

4,923,872

4,867,205

25


TRINITY LABAN 16

CREDITORS: amounts failing due after mo re than one year (contin.) Amounts repayable after more than one year in respect of loans outstanding as at 31 July, are analysed as follows: Lender

College Allied Irish Bank Lombard

Subsidiary Mortgage loan*

Date loan Final Interest rate Balance Balance obtained repayment outstanding outstanding date 2007 2006 £ £ 2006 2002

2026 2007

6.35% 9.385%

Date loan Final obtained repayment date

Interest rate

1994

variable

2009

4,000,000

4,000,000 18,645

4,000,000

4,018,645

Balance Balance outstanding outstanding 2007 2006 £ £ 56,667

56,667

* Loans secured on specific assets Trinity Laban does not guarantee any of the borrowings of its subsidary undertaking. AnalysIs of loan repayments

2007 £

In more than one year but no more than two years In more than two years but no more than five years In more than five years

17

2006 £

85,737 762,549 3,208,381

18,645 410,000 3,646,667

4,056,667

4,075,312

Deferred Capital Grants Group Other

Total

At 1 August 2006 Grants received Released to income and expenditure account (notes 1 and 3)

Funding Council £ 4,082,674 176,783 (311,793)

£ 21,953,614 15,135 (1,062,793)

£ 26,036,288 191,918 (1,374,586)

At 31 July 2007

3,947,664

20,905,956

24,853,620

Other

Total

At 1 August 2006 Grants received Released to income and expenditure account

Funding Council £ 4,082,674 176,783 (311,793)

£ 21,156,638 15,135 (919,210)

£ 25,239,312 191,918 (1,231,003)

At 31 July 2007

3,947,664

20,252,563

24,200,227

Trinity Laban

26


TRINITY LABAN

18

ACCESS TO LEARNING FUNDS The College received and distributed HEFCE Access to Learning funds as follows: Group and Trinity Laban 2007 £ At 1 August HEFCE grants Disbursed to students

2006 £

1,041 30,956 (32,075)

568 31,412 ( 31,008)

(78) 69

972 69

(9)

1,041

Balance underspent at 31 July Interest earned in year

Cash at bank at 31 July

The amount held on the separately designated interest bearing Access to Learning account is included within cash at bank, as the interest is payable to the College to defray audit costs. Any unspent Access funds are carried forward to the following academic year. 19

ENDOWMENTS Group and Trinity Laban Specific General £

20

£

At l August 2006 Additions to reserves Unrealised gains on investments Income for year Expenditure for year Unexpended income transfer from income and expenditure account

1,887,696 415,000 75,531 44,599 (11,461) (41,090)

1,004,344 74,048 40,282 (3,930) 41,090

At 31 July 2007

2,370,275

1,155,834

RESERVES Group £ Revaluation At 1 August 2006 Unrealised gains on investments Realised gains on investments

Trinity Laban £

84,220 (84,220)

84,220 (84,220)

At 1 August 2006 Deficit for the year Reversal of Unrealised Gains

3,576,232 (395,560)

3,689,610 (387,354)

84,220

84,220

At 31 July 2007

3,264,892

3,386,476

At 31 July 2007 General

27


TRINITY LABAN

21

ANALYSIS OF CHANGES IN FINANCING DURING THE YEAR 2007 £ Loans and mortgages at 1 August

4,075,312

Capital repayments

22

1,859,924

(18,645)

(93,210)

New loans Net amount drawn-down in year

(18,645)

2,308,598 2,215,388

Loans and mortgages at 31 July

4,056,667

4,075,312

ANALYSIS OF CHANGES IN NET DEBT At 1 August 2006 £ Cash at bank and in hand Endowment assets cash balances Bank overdraft

Bank and mortgage loans

23

2006 £

Cashflows £

At 1 August 2007 £

704,120 711,956 (943,214)

227,048 219,179 559,783

931,168 931,135 (383,431)

472,862

1,006,010

1, 478,872

(4,075,312)

18,645

(4,056,667)

(3,602,450)

1,024,655

(2,577,795)

CAPITAL COMMITMENTS There were no capital commitments in 2007

24

PENSION SCHEMES The two principal pension schemes for the College's staff are the Teachers' Pension Scheme (TPS) and the Universities Superannuation Scheme (USS) for administrative staff. In addition, administrative staff were eligible for membership of the London Pension Fund Authority (LPFA) up to the 31 July 2005 and of the Legal & General Scheme (L&G) up to 31 December 2001. TPS The College participates in TPS, a defined benefit pension scheme. TPS is an unfunded scheme and contributions are credited on a "pay-as-you-go" basis to the exchequer under arrangements governed by the Superannuation Act 1972. Actuarial valuations are carried out on a notional set of investments. Under the definitions set out in FRS 17 "Retirement benefits", the TPS is a multi-employer pension scheme and the College is unable to identity its share of the underlying (notional) assets and liabilities of the scheme. Accordingly, the College has taken advantage of the exemption in FRS 17 and has accounted for its contributions to the scheme as it it were a defined contribution scheme.

As regards the scheme, the pensions cost is assessed every five years in accordance with advice from the government actua ry . The last actuarial valuation carried out was in March 2001 using the prospective benefits method. An interim actuarial review was carried out in March 2006. This was not a full actuarial Scheme review, but took account primarily of changes in membership composition since the last actuarial review. The 2001 actuarial review showed ( 1) investment return assumed at 7% per annum; ( 2) salary increases assumed at 5% per annum; (3) value of notional assets as £142,880,000 and (5) the propo rtion of members' accrued benefits covered by the actuarial valuation of the assets was 100%. Following the implementation of Teachers' Pensions (Employers' Superannuation Contributions) Regulations 2000 the government actuary carried out a further review on the level of employers' contributions. For the period from 1 April 2002 to 31 March 2003 the employer contribution was 8.35%. This rate increased to 13.5% from 1 April 2003. From January 2007 the Employer contribution rate was revised to 14.1 %.

28


TRINITY LABAN uss USS is contracted out of the State Second Pension and the assets of the scheme are held in a separate trustee administered fund. It is not possible to identify each Institution's share of the underlying assets and liabilities of the scheme and hence contributions to the scheme are accounted for, for FRS 17 purposes, as if it were a defined contribution scheme. The cost recognised within the income and expenditure account is equal to the contributions payable to the scheme for the year. The latest actuarial valuation of the scheme was at 31 March 2005. The assumptions which have the most significant effect on the result of the valuation are those relating to the rate of return on investments, ( i.e. the valuation rate of interest), and the rates of increase in salary and pensions. In relation to the past se rvice liability the financial assumptions were derived from market yields prevailing at the valuation date. It was assumed that the valuation rate of interest would be 4.5% per annum, salary increases would be 3.9% per annum and pensions would increase by 2.9% per annum. In relation to future se rvice liabilities it was assumed that the valuation rate of interest would be 6.2% per annum, including an additional investment return assumption of 1.7% per annum, salary increases would be 3.9% per annum and pensions would increase by 2.9% per annum. The valuation was carried out using the projected unit method. At the valuation date, the market value of the assets of the scheme was £21,740 million and the value of the past service liabilities was £28,308 million, indicating a deficit of £6,568 million. The assets therefore were sufficient to cover 77% of the benefits which had accrued to members, after allowing for expected future increases in earnings. Using The Minimum Funding Requirement prescribed assumptions introduced by the Pensions Act 1995, the scheme was 126% funded at the valuation date and under the Pension Protection Fund regulations introduced by the Pensions Act 2004 it was 110% funded. The Institution contribution rate required for future service benefits alone at the date of the valuation was 14.3% of pensionable salaries, but the trustee company, on the advice of the actuary, decided to maintain the Institution contribution rate at 14% of pensionable salaries. Surpluses or deficits which arise at future valuations may impact on Trinity Laban's future contribution commitment. An additional factor which could impact the funding level of the scheme is that with effect from 16 March 2006, USS positioned itself as a "last man standing" scheme so that in the event of the insolvency of any of the part icipating employers in USS, the amount of any pension funding shortfall (which cannot otherwise be recovered) in respect of the employer will be spread across the remaining participant employers and reflected in the next actuarial valuation of the scheme. The next formal triennial actuarial valuation is due as at 31 March 2008. The contribution rate will be reviewed as part of each valuation. London Pension Fund Authority (LPFA) This scheme, for administrative staff, is a defined benefit scheme and has been closed to new members since the merger of Trinity and Laban on 1 August 2005. The pension benefits for existing members continued to be provided under the LPFA scheme. The latest formal valuation was carried out as at 31 March 2004 using the projected unit method. The investment return assumed was 7% per annum and the effect of limited price indexation was assumed to give increases of 3.1 % per annum. The actuarial valuation as at 31 July 2006 revealed a shortfall of £572,000 in the value of the assets of the scheme of £1,583,000 compared to the actuarial liability for pension benefits. This represents a funding level of 73%.

be increased over a 20 year period from 1 April 2006 at an enhanced contribution rate of £4,089 per month compared to the funding rate of £640 per month for the year ended 31 March 2006. L&G This scheme, for administrative staff, is a defined benefit scheme and with effect from 31 December 2001, has become a closed scheme. The pension benefits for administrative staff in respect of service from that date will be earned within the Universities Superannuation Scheme. The latest actuarial valuation was carried out as at 1 July 2003 using the projected unit method. The investment return assumed was 6.8% per annum and the effect of limited price indexation was assumed to give increases of 2.95% per annum. This actuarial valuation revealed a shortfall of £1,533,000 in the value of the assets of the scheme of £5,579,000 compared to the actuarial liability for pension benefits. This represents a funding level of 78% and the actuary recommended that this should be increased over a 10 year period from 1 July 2006 at an enhanced contribution rate of £16,000 per month compared to the previous funding rate of £5,500 per month.

29


I

TRINITY LABAN TOTAL PENSION COSTS The total pension cost, including administration charges, for each Scheme for the College was as follows:

Contri butions Contri butions Contri butions Contri butions Contri butions

to TPS to USS to LPFA/ LGPS to Legal & General lo other schemes

Total pension costs

2007 £ 294,200 161,565 164,669 209,966 -

2006 £ 312,639 161,562 101,044 215,587 19,365

830.400

810,197

FRS 17 - DISCLOSURES IN RESPECT OF LPFA SCHEME The major assumptions by the actuary In valuing liabilities we re:

2007 % pa lascount rate Expected pension increases (limited price indexation) Inflation rate

5.8 3.3 3.3

2006 %pa 5.1 3.1 3.1

The expected rate of return on the assets and the fair values of the assets of the LPFA scheme were as follows: 2007 Expected rate of return

2007 Fair Value £000S

%

Bonds Equities Alternative assets Cash

6.6 7.9 7 5.1

432 1216 254 74

Total market value of assets Present value of scheme liabilities

7.4

1,976 (2,245)

Deficit in the scheme

2006 Expected rate of return

(269)

6.3 7.6 6.7 4.8

7

2006 Fair Value £OOOs 305 966 188 124

1,583 (2,155)

(572)

30


TRINITY LABAN Analysis of amount (credited to other finance Income)/debited to finance costs

2007

2006

118 (115)

92 (94)

3

(2)

2007 £000

2006 £000

Actual return less expected return on pension scheme assets Experience gains and losses arising on scheme liabilities Impact of changes in assumptions relating to the present value of scheme liabilities

83 (1) 214

61 (90)

Actuarial (loss) recognised In statement of recognised gains and losses

296

(29)

2007 £000

2006 £000

Surplus/(deficit) scheme at the beginning of the year Current service cost Contributions Net financial return Actuarial gain/(loss)

(572) (156) 160 3 296

(518) (149) 126 (2) (29)

Scheme surplus/(deficit) at the end of the year

(269)

(572)

£ooo Expected return on pension scheme assets Interest on pension liabilities

Net Return

£ooo

Amounts recognised in the statement of total recognised gains and losses

Movement In surplus/(deflclt) during the year:

History of experience gains and losses 2007

2006

2005

2004

83 1,976 4.2%

61 1,583 3.9%

126 1,269 9.9%

931 0.1%

Experience gains and losses of scheme liabilities Amount (8300) Percentage of scheme assets

2,245 -0.04%

0 2,155 0.0%

30 1,787 1.7%

(2) 1,342 -0.1%

Total amount recognised In statement of recognised gains and losses Amount (£000) Percentage of scheme assets

296 (2,245) 13.2%

(29) 2,155 -1.3%

(93) 1,787 -5.2%

(3) 1,342 -0.2%

Difference between actual and expected return on scheme assets Amount (£000) Percentage of scheme assets

31


TRINITY LABAN FRS 17- DISCLOSURES IN RESPECT OF L&G The Major assumptions by the actuary In valuing liabilities were: 2007 %P8 5.0

Discount rate Expected pension increases (limited price Indexatlon) Inflation rate

3.2 3.2

2006 % pa 5.1 3.0 3.0

The expected rate of return on the assets and the fair values of the assets of the LPFA scheme were as follows:

2007 Expected

2007 Fair

2006 Expected

rate of return

Value

rate of return

COOOs

%

2006 Fair Value £000s

7.5

758 2,253

4.6 7.5

662 1,984

5.1

2,692

5

2,933

Bonds Equities Annuities

Total market value of assets Present value of scheme liabilities

Deficit in the scheme

4.6

5,703

5,579

(6,419)

(7,112)

(716)

(1,533)

Analysis of amount (credited to other finance Incomeydebited to finance costs

Expected return on pension scheme assets Interest on pension liabilities

Net Return

2007 E000

2006 £000

328 (351)

303 (326)

(23)

(23)

2007 £000

2006 £000

(147) 19 782

(536)

654

(291)

2007 £000

2006 £000

(1,533)

(1,617)

191 (23) 654

171 (23) (291)

Amounts recognised In the statement of total recognised gains and losses

Actual return less expected return on pension scheme assets Experience gains and losses arising on scheme liabilities Impact of changes In assumptions relating to the present value of scheme liabilities

Actuarial (lose) recognised in statement of total recognised gains and losses

249 (4)

Movement in (deficit) during the year:

Surplus/(deficit) scheme at the beginning of the year Current service cost Contributions Net financial return Actuarial (loss) Increase in commutation available Expenses paid by Scheme

Scheme (deficit) at the and of the year

227 (5) (716)

(1,533)

32


1

TRINITY LABAN History of experience gains and losses

2007

2006

2005

2004

2003

Difference between actual and expected return on scheme assets

(147)

249

444

(25)

37

Amount ( ÂŁ000)

5,703

5,579

4,985

4,225

4,111

-2.6%

4.5%

8.9%

-0.6%

0.9%

o Percentage of scheme assets Experience gains and losses of scheme liabilities Amount (P.000) Percentage of scheme assets Total amount recognised In statement of recognised gains and losses

19

(536)

(862)

48

(271)

(7,112)

7,112

6,602

5,588

5,420

-0.3%

-7.5%

.13.1%

0.8%

-5.0%

782

(28)

22

(7)

(35)

Anwunl(02 00)

6,418

7,112

6,602

5,588

5,420

Percentage of scheme assets

12.2%

-1.3%

0.3%

-0.1%

-0.7%

GUARANTEE BY MEMBERS In the event of a winding up or dissolution of the College, under the terms of the guarantee, the liability of each member shall be limited to ÂŁ1.

33

Trinity Annual Report 2007  

3 1 JAN 2008 For the year ended 31 July 2007 Patron HRH The Duke of Kent KG I Presidents Sir Charles Mackerras, Dr Marion North CBE I Princi...

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