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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

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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

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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


Warwick SU Accounts 2009-10