Nottinghamshire Healthcare NHS Foundation Trust

Transcription

1 Nottinghamshire Healthcare NHS Foundation Trust Annual Accounts 1 31 March 2015

2 Foreword to the accounts Nottinghamshire Healthcare NHS Foundation Trust These accounts for the period ended 31 March 2015 have been prepared by the Nottinghamshire Healthcare NHS Foundation Trust under Schedule 7 of the National Health Service Act 2006, paragraphs 24 and 25 and in accordance with directions given by Monitor, the sector regulator for health services in England. Signed Name RUTH HAWKINS Job title CHIEF EXECUTIVE Date 26 May

3 Statement of Comprehensive Income for the one month ending 31 March 2015 For the 1 month ending 31 March 2015 Note 000 Operating income from patient care activities 3 33,759 Other operating income 4 4,728 Total operating income from continuing operations 38,487 Operating expenses 5, 7 (37,343) Operating surplus from continuing operations 1,144 Finance income Finance costs 10.2 (169) PDC dividends payable (754) Net finance costs (918) Surplus for the period 226 Other comprehensive income Will not be reclassified to income and expenditure: Impairments Revaluations - Total other comprehensive income for the period 136 Total comprehensive income for the period 362 The NHS financial performance is based on reporting requirements defined by the Trust Development Authority and retained by the Trust for the financial period after gaining Foundation Trust status. The notes on pages form part of this account. 2

4 Statement of Financial Position as at 31 March 2015 Opening Position 31 March March 2015 Note Non-current assets Intangible assets 11 1,769 1,593 Property, plant and equipment , ,632 Total non-current assets 359, ,225 Current assets Inventories Trade and other receivables 14 17,712 19,060 Cash and cash equivalents 15 35,230 44,544 Total current assets 53,446 64,127 Current liabilities Trade and other payables 16 (34,569) (44,064) Borrowings 17 (682) (683) Provisions 19 (709) (810) Total current liabilities (35,960) (45,557) Total assets less current liabilities 377, ,795 Non-current liabilities Trade and other payables 16 (217) (218) Borrowings 17 (21,630) (21,686) Provisions 19 (4,979) (4,979) Total non-current liabilities (26,826) (26,883) Total assets employed 350, ,912 Financed by Public Dividend Capital 240, ,537 Revaluation Reserve 138, ,785 Income and Expenditure Reserve (29,184) (29,410) Total Taxpayers' Equity 350, ,912 The accounts on pages 19 to 62 were approved by the Board of Directors on 26 May 2015 and signed on its behalf by: Name RUTH HAWKINS Position CHIEF EXECUTIVE Date 26 May

5 Statement of Changes in Taxpayers' Equity for the month ended 31 March 2015 Public Dividend Capital Revaluation Reserve Income and Expenditure Reserve Total Taxpayers' Equity Taxpayers' equity at 1 March , ,785 (29,410) 349,912 Surplus for the period Impairments Taxpayers' equity at 31 March , ,921 (29,184) 350,274 4

6 Information on reserves Public Dividend Capital Public Dividend Capital (PDC) is a type of public sector equity finance based on the excess of assets over liabilities at the time of establishment of the predecessor NHS Trust. Additional PDC may also be issued to NHS foundation trusts by the Department of Health. A charge, reflecting the cost of capital utilised by the Nottinghamshire Healthcare NHS Foundation Trust, is payable to the Department of Health as the Public Dividend Capital dividend. Revaluation Reserve Increases in asset values arising from revaluations are recognised in the Revaluation Reserve, except where, and to the extent that, they reverse impairments previously recognised in operating expenses, in which case they are recognised in operating income. Subsequent downward movements in asset valuations are charged to the Revaluation Reserve to the extent that a previous gain was recognised unless the downward movement represents a clear consumption of economic benefit or a reduction in service potential. Income and Expenditure Reserve The balance of this Reserve is the accumulated surpluses and deficits of the Nottinghamshire Healthcare NHS Foundation Trust. 5

7 Statement of Cash Flows for the one month ending 31 March 2015 For the 1 month ending 31 March 2015 Note 000 Cash flows from operating activities Operating surplus 1,144 Non-cash income and expense: Depreciation and amortisation Impairments and reversals of impairments Decrease in receivables and other assets 1,348 Decrease in inventories 19 Decrease in payables and other liabilities (5,407) Decrease in provisions (101) Net cash generated used in operating activities (1,986) Cash flows from investing activities Interest received 5 Purchase of intangible assets (199) Purchase of property, plant, equipment and investment property (1,878) Net cash generated used in investing activities (2,072) Cash flows from financing activities Capital element of PFI, LIFT and other service concession payments (57) Interest paid on finance lease liabilities (2) Interest paid on PFI, LIFT and other service concession obligations (167) PDC dividend paid (5,030) Net cash generated used in financing activities (5,256) decrease in cash and cash equivalents (9,314) Cash and cash equivalents at 1 March 44,544 Cash and cash equivalents at 31 March 15 35,230 6

8 Notes to the Accounts 1 Note 1 Accounting policies and other information Basis of preparation On 1 March 2015 Nottinghamshire Healthcare NHS Trust was authorised by Monitor as a foundation trust and became Nottinghamshire Healthcare NHS Foundation Trust. Under the NHS Act 2006 Monitor has directed Nottinghamshire Healthcare NHS Foundation Trust to prepare accounts for the period 1 March to 31 March 2015 and that these shall meet the accounting requirements of the FT ARM which shall be agreed with HM Treasury. Consequently, the following accounts have been prepared in accordance with the NHS FT ARM 2014/15 issued by Monitor. The accounting policies contained in that manual follow IFRS and HM Treasury s FReM to the extent that they are meaningful and appropriate to NHS foundation trusts. The accounting policies have been applied consistently in dealing with items considered material in relation to the accounts. For the one month period of accounts, opening balances for the Statement of Financial Position and related notes as at 1 March 2015 are disclosed, no other comparartives are required. Accounting convention These accounts have been prepared under the historical cost convention modified to account for the revaluation of property, plant and equipment. Going concern After making enquiries, the directors have a reasonable expectation that the Trust has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the accounts. Consolidation The Trust is the corporate trustee to the Nottinghamshire Healthcare NHS Charitable Trust Fund (registration number ), it effectively has the power to exercise control so as to obtain economic benefits. Under the provisions of IAS 27 Consolidated and Separate Financial Statements, those Charitable Funds that fall under common controls with NHS Bodies are consolidated within the entities' returns, where those funds are determined to be material. The Trust has reviewed its NHS charitable funds and concluded that they are not material and so are not consolidated within these accounts. Details of the transactions with the charity are included in the related parties' note 25. The Charities draft accounts for 2014/15 show a net movement in funds for the year of 40,000 and total funds at 31 March 2015 of 915, Note 1.1 Income Income in respect of services provided is recognised when, and to the extent that, performance occurs and is measured at the fair value of the consideration receivable. The main source of income for the Trust is contracts with commissioners in respect of health care services. Where income is received for a specific activity which is to be delivered in a subsequent financial year, that income is deferred. Income from the sale of non-current assets is recognised only when all material conditions of sale have been met, and is measured as the sums due under the sale contract. 7

9 2 Note 1.2 Expenditure on employee benefits Short-term employee benefits Salaries, wages and employment-related payments are recognised in the period in which the service is received from employees. The cost of annual leave entitlement earned but not taken by employees at the end of the period is recognised in the accounts to the extent that employees are permitted to carry-forward leave into the following period. Pension costs NHS Pension Scheme Past and present employees are covered by the provisions of the NHS Pension Scheme. The scheme is an unfunded, defined benefit scheme that covers NHS employers, general practices and other bodies, allowed under the direction of Secretary of State, in England and Wales. It is not possible for the Trust to identify its share of the underlying scheme liabilities. Therefore, the scheme is accounted for as a defined contribution scheme. Employers pension cost contributions are charged to operating expenses as and when they become due. Additional pension liabilities arising from early retirements are not funded by the scheme except where the retirement is due to ill-health. The full amount of the liability for the additional costs is charged to the operating expenses at the time the Trust commits itself to the retirement, regardless of the method of payment. 3 Note 1.3 Expenditure on other goods and services Expenditure on goods and services is recognised when, and to the extent that they have been received, and is measured at the fair value of those goods and services. Expenditure is recognised in operating expenses except where it results in the creation of a non-current asset such as property, plant and equipment. 4 Note 1.4 Property, plant and equipment Recognition Property, plant and equipment is capitalised where: it is held for use in delivering services or for administrative purposes; it is probable that future economic benefits will flow to, or service potential be provided to, the Trust; it is expected to be used for more than one financial year; the cost of the item can be measured reliably; and the item has a cost of at least 5,000;or collectively, a number of items have a cost of at least 5,000 and individually have a cost of more than 250, where the assets are functionally interdependent, they have broadly simultaneous purchase dates, are anticipated to have simultaneous disposal dates and are under single managerial control. Measurement Valuation All property, plant and equipment assets are measured initially at cost, representing the costs directly attributable to acquiring or constructing the asset and bringing it to the location and condition necessary for it to be capable of operating in the manner intended by management. All assets are measured subsequently at fair value. Land and buildings used for the Trust s services or for administrative purposes are stated in the Statement of Financial Position at their revalued amounts, being the fair value at the date of revaluation less any subsequent accumulated depreciation and impairment losses. Revaluations are performed with sufficient regularity to ensure that carrying amounts are not materially different from those that would be determined at the end of the reporting period. Fair values are determined as follows: Land and non-specialised buildings market value for existing use. Specialised buildings depreciated replacement cost (on a modern equivalent asset basis). 8

10 In accordance with the latest RICS guidance, depreciated replacement cost valuations are based on modern equivalent assets and, where it would meet the location requirements of the service being provided, an alternative site can be valued. Land, specialised and non-specialised buildings are valued on an annual basis as at 31 March by an independent professional valuer. In 2014/15 this was undertaken by the District Valuer (Valuation Office Agency). Properties in the course of construction for service or administration purposes are carried at cost, less any impairment loss. Cost includes professional fees but not borrowing costs, which are recognised as expenses immediately, as allowed by IAS 23 for assets held at fair value. Fixtures and equipment were historically carried at replacement cost, as assessed by indexation and depreciation of historic cost. The application of indexation ceased in The carrying value of existing assets at that date will be written off over their remaining useful lives and new fixtures and equipment are carried at depreciated historic cost as this is not considered to be materially different from fair value. An increase arising on revaluation is taken to the Revaluation Reserve except when it reverses an impairment for the same asset previously recognised in expenditure, in which case it is credited to expenditure to the extent of the decrease previously charged there. A revaluation decrease that does not result from a loss of economic value or service potential is recognised as an impairment charged to the Revaluation Reserve to the extent that there is a balance on the reserve for the asset and, thereafter, to expenditure. Impairment losses that arise from a clear consumption of economic benefit are taken to expenditure. A transfer from the Revaluation Reserve to Retained Earnings is made for the lower of the impairment charged and the balance in the Revaluation Reserve for the asset. Gains and losses recognised in the Revaluation Reserve are reported as other comprehensive income in the Statement of Comprehensive Income. Subsequent expenditure Expenditure incurred after items of property, plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to the Statement of Comprehensive Income in the period in which it is incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of an item of property, plant and equipment, and where the cost of the item can be measured reliably, the expenditure is capitalised as an additional cost of that asset or as a replacement. Depreciation Items of property, plant and equipment are depreciated over their remaining useful economic lives in a manner consistent with the consumption of economic or service delivery benefits. Freehold land is considered to have an infinite life and is not depreciated. Property, plant and equipment which has been reclassified as held for sale ceases to be depreciated upon the reclassification. Assets in the course of construction are not depreciated until the asset is brought into use. Revaluation gains and losses Revaluation gains are recognised in the Revaluation Reserve, except where, and to the extent that, they reverse a revaluation decrease that has previously been recognised in operating expenses, in which case they are recognised in operating income. Revaluation losses are charged to the Revaluation Reserve to the extent that there is an available balance for the asset concerned, and thereafter are charged to operating expenses. Gains and losses recognised in the Revaluation Reserve are reported in the Statement of Comprehensive Income as an item of other comprehensive income. 9

11 Impairments In accordance with the FT ARM, impairments that arise from a clear consumption of economic benefits or of service potential in the asset are charged to operating expenses. A compensating transfer is made from the Revaluation Reserve to the Income and Expenditure Reserve of an amount equal to the lower of (i) the impairment charged to operating expenses; and (ii) the balance in the Revaluation Reserve attributable to that asset before the impairment. An impairment that arises from a clear consumption of economic benefit or of service potential is reversed when, and to the extent that, the circumstances that gave rise to the loss is reversed. Reversals are recognised in operating income to the extent that the asset is restored to the carrying amount it would have had if the impairment had never been recognised. Any remaining reversal is recognised in the Revaluation Reserve. Where, at the time of the original impairment, a transfer was made from the Revaluation Reserve to the Income and Expenditure Reserve, an amount is transferred back to the Revaluation Reserve when the impairment reversal is recognised. Other impairments are treated as revaluation losses. Reversals of other impairments are treated as revaluation gains. De-recognition Assets intended for disposal are reclassified as held for sale once all of the following criteria are met: the asset is available for immediate sale in its present condition subject only to terms which are usual and customary for such sales; the sale must be highly probable ie: - management are committed to a plan to sell the asset; - an active programme has begun to find a buyer and complete the sale; - the asset is being actively marketed at a reasonable price; - the sale is expected to be completed within 12 months of the date of classification as held for sale ; and - the actions needed to complete the plan indicate it is unlikely that the plan will be dropped or significant changes made to it. The profit or loss arising on disposal of an asset is the difference between the sale proceeds and the carrying amount and is recognised in the Statement of Comprehensive Income On disposal, the balance for the asset on the Revaluation Reserve is transferred to Retained Earnings. Following reclassification, the assets are measured at the lower of their existing carrying amount and their fair value less costs to sell. Depreciation ceases to be charged. Assets are derecognised when all material sale contract conditions have been met. Fair value is open market value including alternative uses. Property, plant and equipment which is to be scrapped or demolished does not qualify for recognition as held for sale and instead is retained as an operational asset and the asset s economic life is adjusted. The asset is de-recognised when scrapping or demolition occurs. Donated, government grant and other grant funded assets Donated and grant funded property, plant and equipment assets are capitalised at their fair value on receipt. The donation/grant is credited to income at the same time, unless the donor has imposed a condition that the future economic benefits embodied in the grant are to be consumed in a manner specified by the donor, in which case, the donation/grant is deferred within liabilities and is carried forward to future financial years to the extent that the condition has not yet been met. The donated and grant funded assets are subsequently accounted for in the same manner as other items of property, plant and equipment. The Trust has no restriction on donated assets. Private Finance Initiative (PFI) transactions PFI transactions which meet the IFRIC 12 definition of a service concession, as interpreted in HM Treasury s FReM, are accounted for as on-statement of Financial Position by the Trust. In accordance with IAS 17, the underlying assets are recognised as property, plant and equipment at their fair value, together with an equivalent finance lease liability. Subsequently, the assets are accounted for as property, plant and equipment and/or intangible assets as appropriate. The annual contract payments are apportioned between the repayment of the liability, a finance cost and the charges for services. The service charge is recognised in operating expenses and the finance cost is charged to finance costs in the Statement of Comprehensive Income. 10

12 Lifecycle replacement Components of the asset replaced by the operator during the contract ( lifecycle replacement ) are capitalised where they meet the Trust s criteria for capital expenditure. They are capitalised at the time they are provided by the operator and are measured initially at their fair value. The element of the annual unitary payment allocated to lifecycle replacement is pre-determined for each year of the contract from the operator s planned programme of lifecycle replacement. Where the lifecycle component is provided earlier or later than expected, a short-term finance lease liability or prepayment is recognised respectively. Where the fair value of the lifecycle component is less than the amount determined in the contract, the difference is recognised as an expense when the replacement is provided. If the fair value is greater than the amount determined in the contract, the difference is treated as a free asset and a deferred income balance is recognised. The deferred income is released to the operating income over the shorter of the remaining contract period or the useful economic life of the replacement component. Assets contributed by the Trust to the operator for use in the scheme Assets contributed for use in the scheme continue to be recognised as items of property, plant and equipment in the Trust s Statement of Financial Position. There are no assets contributed by the Trust to the operator for use other than in the scheme. Useful Economic lives of property, plant and equipment Useful economic lives reflect the total life of an asset and not the remaining life of an asset. The range of useful economic lives are shown in the table below: Min life Max life Years Years Plant & machinery 5 15 Transport equipment - 7 Information technology 5 10 Furniture & fittings - 10 Buildings, installations and fittings are depreciated over the estimated remaining life of the asset as advised by the Valuer. Finance-leased assets (including land) are depreciated over the shorter of the useful economic life or the lease term, unless the FT expects to acquire the asset at the end of the lease term in which case the assets are depreciated in the same manner as owned assets above. 5 Note 1.5 Intangible assets Recognition Intangible assets are non-monetary assets without physical substance which are capable of being sold separately from the rest of the Trust s business or which arise from contractual or other legal rights. They are recognised only where it is probable that future economic benefits will flow to, or service potential be provided to, the Trust; and where the cost of the asset can be measured reliably, and where the cost is at least 5,000. Expenditure on research is not capitalised, it is recognised as an operating expense in the period in which it is incurred. Software Software which is integral to the operation of hardware, eg an operating system, is capitalised as part of the relevant item of property, plant and equipment. Software which is not integral to the operation of hardware, eg application software, is capitalised as an intangible asset. Measurement Following initial recognition, intangible assets are carried at fair value by reference to an active market, or, where no active market exists, at amortised replacement cost (modern equivalent assets basis), as a proxy for fair value. As these assets are not material they are carried at depreciated historic cost as this is not considered to be materially different from fair value. Internally-developed software is held at historic cost to reflect the opposing effects of increases in development costs and technological advances. Amortisation Intangible assets are amortised over their expected useful economic lives in a manner consistent with the consumption of economic or service delivery benefits. 11

13 Useful economic life of intangible assets Useful economic lives reflect the total life of an asset and not the remaining life of an asset. The range of useful economic lives are shown in the table below: Min life Max life Years Years Intangible assets - purchased Software Note 1.6 Revenue government and other grants Government grants are grants from Government bodies other than income from commissioners or NHS trusts for the provision of services. Where a grant is used to fund revenue expenditure it is taken to the Statement of Comprehensive Income to match that expenditure. 7 Note 1.7 Inventories Inventories are valued at the lower of cost and net realisable value. The cost of inventories is measured using the weighted average cost method. This is considered to be a reasonable approximation to fair value due to the high turnover of stocks. 8 Note 1.8 Financial assests and financial liabilities Financial assets Financial assets are recognised when the Trust becomes party to the financial instrument contract or, in the case of trade receivables, when the goods or services have been delivered. Financial assets are derecognised when the contractual rights have expired or the asset has been transferred. Financial assets are initially recognised at fair value. Financial assets are classified into the following categories: financial assets at fair value through profit and loss; held to maturity investments; available for sale financial assets, and loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments which are not quoted in an active market. After initial recognition, they are measured at amortised cost using the effective interest method, less any impairment. Interest is recognised using the effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset, to the initial fair value of the financial asset. At the end of the reporting period, the Trust assesses whether any financial assets, other than those held at fair value through profit and loss are impaired. Financial assets are impaired and impairment losses recognised if there is objective evidence of impairment as a result of one or more events which occurred after the initial recognition of the asset and which has an impact on the estimated future cash flows of the asset. For financial assets carried at amortised cost, the amount of the impairment loss is measured as the difference between the asset s carrying amount and the present value of the revised future cash flows discounted at the asset s original effective interest rate. The loss is recognised in expenditure and the carrying amount of the asset is reduced through a provision for impairment of receivables. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through expenditure to the extent that the carrying amount of the receivable at the date of the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. 12

14 Financial liabilities Financial liabilities are recognised on the Statement of Financial Position when the Trust becomes party to the contractual provisions of the financial instrument or, in the case of trade payables, when the goods or services have been received. Financial liabilities are de-recognised when the liability has been discharged, that is, the liability has been paid or has expired. Other financial liabilities After initial recognition, all other financial liabilities are measured at amortised cost using the effective interest method, except for loans from Department of Health, which are carried at historic cost. The effective interest rate is the rate that exactly discounts estimated future cash payments through the life of the asset, to the net carrying amount of the financial liability. Interest is recognised using the effective interest method. 9 Note 1.9 Leases Finance leases Where substantially all risks and rewards of ownership of a leased asset are borne by the Trust, the asset is recorded as property, plant and equipment and a corresponding liability is recorded. The value at which both are recognised is the lower of the fair value of the asset or the present value of the minimum lease payments, discounted using the interest rate implicit in the lease. The asset and liability are recognised at the commencement of the lease. Thereafter the asset is accounted for an item of property plant and equipment. The annual rental is split between the repayment of the liability and a finance cost so as to achieve a constant rate of finance over the life of the lease. The annual finance cost is charged to Finance Costs in the Statement of Comprehensive Income. The lease liability, is de-recognised when the liability is discharged, cancelled or expires. Operating leases Other leases are regarded as operating leases and the rentals are charged to operating expenses on a straight-line basis over the term of the lease. Operating lease incentives received are added to the lease rentals and charged to operating expenses over the life of the lease. Leases of land and buildings Where a lease is for land and buildings, the land component is separated from the building component and the classification for each is assessed separately. # Note 1.10 Provisions The Trust recognises a provision where it has a present legal or constructive obligation of uncertain timing or amount; for which it is probable that there will be a future outflow of cash or other resources; and a reliable estimate can be made of the amount. The amount recognised in the Statement of Financial Position is the best estimate of the resources required to settle the obligation. Where the effect of the time value of money is significant, the estimated risk-adjusted cash flows are discounted using the discount rates (short, medium or long term rates being -1.5%, -1.05% and 2.20% respectively in real terms, 1.3% for employee early departure obligations) as published and mandated by HM Treasury. Clinical negligence costs The NHS Litigation Authority (NHSLA) operates a risk pooling scheme under which the Trust pays an annual contribution to the NHSLA, which, in return, settles all clinical negligence claims. Although the NHSLA is administratively responsible for all clinical negligence cases, the legal liability remains with the Trust. The total value of clinical negligence provisions carried by the NHSLA on behalf of the Trust is disclosed at note 19 but is not recognised in the Trust s accounts. Non-clinical risk pooling The Trust participates in the Property Expenses Scheme and the Liabilities to Third Parties Scheme. Both are risk pooling schemes under which the Trust pays an annual contribution to the NHS Litigation Authority and in return receives assistance with the costs of claims arising. The annual membership contributions, and any excesses payable in respect of particular claims are charged to operating expenses when the liability arises. 13

15 # Note 1.11 Public Dividend Capital Public Dividend Capital (PDC) is a type of public sector equity finance based on the excess of assets over liabilities at the time of establishment of the predecessor NHS trust. HM Treasury has determined that PDC is not a financial instrument within the meaning of IAS 32. A charge, reflecting the cost of capital utilised by the Trust, is payable as Public Dividend Capital dividend. The charge is calculated at the rate set by HM Treasury (currently 3.5%) on the average relevant net assets of the Trust during the financial year. Relevant net assets are calculated as the value of all assets less the value of all liabilities, except for (i) donated assets (including lottery funded assets), (ii) average daily cash balances held with the Government Banking Services (GBS) and National Loans Fund (NLF) deposits, excluding cash balances held in GBS accounts that relate to a short-term working capital facility, and (iii) any PDC dividend balance receivable or payable. In accordance with the requirements laid down by the Department of Health (as the issuer of PDC), the dividend for the year is calculated on the actual average relevant net assets as set out in the pre-audit version of the annual accounts. The dividend thus calculated is not revised should any adjustment to net assets occur as a result the audit of the annual accounts. # Note 1.12 Value Added Tax Most of the activities of the Trust are outside the scope of VAT and, in general, output tax does not apply and input tax on purchases is not recoverable. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets. Where output tax is charged or input VAT is recoverable, the amounts are stated net of VAT. # Note 1.13 Corporation tax The Trust has determined that it has no corporation tax liability as it does not operate any commercial activities that are not part of core health care delivery. # Note 1.14 Foreign exchange The functional and presentational currencies of the Trust are sterling. A transaction which is denominated in a foreign currency is translated into the functional currency at the spot exchange rate on the date of the transaction. Where the Trust has assets or liabilities denominated in a foreign currency at the Statement of Financial Position date: monetary items (other than financial instruments measured at fair value through income and expenditure ) are translated at the spot exchange rate on 31 March; non-monetary assets and liabilities measured at historical cost are translated using the spot exchange rate at the date of the transaction; and non-monetary assets and liabilities measured at fair value are translated using the spot exchange rate at the date the fair value was determined. Exchange gains or losses on monetary items (arising on settlement of the transaction or on re-translation at the Statement of Financial Position date) are recognised in income or expense in the period in which they arise. Exchange gains or losses on non-monetary assets and liabilities are recognised in the same manner as other gains and losses on these items. # Note 1.15 Third party assets Assets belonging to third parties (such as money held on behalf of patients) are not recognised in the accounts since the Trust has no beneficial interest in them. However, they are disclosed in note 15.1 to the accounts in accordance with the requirements of HM Treasury s FReM. 14

16 # Note 1.16 Losses and Special Payments Losses and special payments are items that Parliament would not have contemplated when it agreed funds for the health service or passed legislation. By their nature they are items that ideally should not arise. They are therefore subject to special control procedures compared with the generality of payments. They are divided into different categories, which govern the way that individual cases are handled. Losses and special payments are charged to the relevant functional headings in expenditure on an accruals basis, including losses which would have been made good through insurance cover had NHS foundation trusts not been bearing their own risks (with insurance premiums then being included as normal revenue expenditure). However the losses and special payments note is compiled directly from the losses and compensations register which reports on an accrual basis with the exception of provisions for future losses. # Note 1.17 Transfers of functions to / from other NHS bodies or local government bodies No functions have been transferred to the Trust from another NHS or local government body. # Note 1.18 Early adoption of standards, amendments and interpretations No new accounting standards or revisions to existing standards have been early adopted in 2014/15. # Note 1.19 Standards, amendments and interpretations in issue but not yet effective or adopted The Treasury FReM does not require the following Standards and Interpretations to be applied in The application of the Standards as revised would not have a material impact on the accounts for , were they applied in that year: IFRS 9 Financial Instruments - subject to consultation IFRS 13 Fair Value Measurement - subject to consultation IFRS 15 Revenue from Contracts with Customers # Note 1.20 Critical accounting judgements and key sources of estimation uncertainty There are no critical judgements, apart from those involving estimations (see below) that management has made in the process of applying the Trust s accounting policies. Key sources of estimation uncertainty The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year:- Provisions for permanent injury awards and early retirements have been calculated using the Government Actuary's Department interim life tables to estimate expected lives. The Trust has three PFI schemes which have been accounted for in line with the Department of Health guidance. The Trust has made an assessment of the amount payable in relation to employee holiday pay based on information contained within the Employee Service Record (ESR) Human Resources and payroll system. The Trust's estate has been valued applying the Building Cost Information Service (BCIS) Tender Price Index and BCIS location factors as at February

17 Note 2 Operating Segments Nottinghamshire Healthcare NHS Foundation Trust has determined that in the context of IFRS 8, the Chief Operating Decision Maker (CODM) for the Trust is the Trust Board as the Board receives and reviews the Finance Board Report on a regular basis. The Finance Board Report contains information regarding expenditure divided across different service areas. However, it also contains the main accounting statements, none of which are divided nor reported at a lower level as these are considered on a Trust wide basis. The Trust considers it has one segment of healthcare for reporting purposes. Further detail is provided below: Month ending 31/3/ s Income 38,487 Retained surplus 226 Net Current Assets 17,486 The services provided by Nottinghamshire Healthcare are delivered by the Local, Health Partnerships and Forensic Divisions and are supported by Trust Corporate Services. The Local Services Division is responsible for services provided in the community and acute settings and includes: Adult Mental Health Services Child and Adolescent Mental Health Services Mental Health Services for Older People Intellectual and Developmental Disabilities Service Substance Misuse Service Psychological Therapies Service The Health Partnerships Division of the Trust provides community health services including: Children's services - including health visiting, school nursing, specialist services, children's centres (Surestart). Adult services - including community nursing, intermediate care, therapy services, inpatient and outpatient services, specialist palliative care. Dental services The Trust's Forensic Services break down into the following areas: High secure services (Rampton Hospital) Medium secure services (Wathwood Hospital and Arnold Lodge) Low secure in patient service Community forensic service Prison healthcare 16

18 Note 3 Operating income from patient care activities Note 3.1 Income from patient care activities (by nature) For the 1 month ending 31 March 2015 Mental health services Block contract income 22, Clinical partnerships providing mandatory services (including S75 agreements) 2,215 Other clinical income from mandatory services 1,232 Community services Community services income from CCGs and NHS England 7,408 Community services income from other commissioners 649 Total income from activities 33,759 Note 3.2 Income from patient care activities (by source) For the 1 month Income from patient care activities received from: ending 31 March 2015 CCGs and NHS England 32,248 Local Authorities 1,333 Other NHS Foundation Trusts 5 NHS Trusts 4 Non NHS: other 169 Total income from activities 33,759 Of which: Related to continuing operations 33,759 Related to discontinued operations

19 4 Note 4 Other operating income For the 1 month ending 31 March Education and training 1,778 Charitable and other contributions to expenditure 3 Non-patient care services to other bodies 2,260 Reversal of impairments 53 Income in respect of staff costs where accounted on gross basis 354 Other income 280 Total other operating income 4,728 Of which: Related to continuing operations 4,728 Related to discontinued operations - 4 Note 4.1 Income from activities arising from commissioner requested services Under the terms of its Provider License, the Trust is required to analyse the level of income from activities that has arisen from commissioner requested and non-commissioner requested services. Commissioner requested services are defined in the provider license and are services that commissioners believe would need to be protected in the event of provider failure. This information is provided in the table below: For the 1 month ending 31 March Income from services designated (or grandfathered) as commissioner requested services 33,759 Income from services not designated as commissioner requested services - Total 33,759 18

20 Note 5 Operating expenses For the 1 month ending 31 March 2015 Services from NHS Foundation Trusts 50 Services from NHS Trusts 77 Purchase of healthcare from non NHS bodies 1,314 Employee expenses - executive directors 81 Employee expenses - non-executive directors 6 Employee expenses - staff 25,848 Supplies and services - clinical 800 Supplies and services - general 503 Establishment 1,365 Transport 72 Premises 3,065 Increase in provision for impairment of receivables 3 Inventories consumed 538 Rentals under operating leases 1,038 Depreciation on property, plant and equipment 727 Amortisation on intangible assets 23 Impairments 314 Audit fees payable to the external auditor audit services- statutory audit 76 Clinical negligence 21 Legal fees 165 Training, courses and conferences 561 Patient travel 19 Redundancy 173 Early retirements 5 Hospitality 7 Insurance 43 Other 449 Total 37,343 Of which: Related to continuing operations 37,343 Related to discontinued operations The limitation of liability for PwC is 1 million. 19

21 Note 6 Impairment of assets Net impairments charged to operating surplus resulting from: For the 1 month ending 31 March 2015 Changes in market price 261 Total net impairments charged to operating surplus 261 Impairments charged to the Revaluation Reserve (136) Total net impairments

22 Note 7 Employee benefits For the 1 month ending 31 March 2015 Permanent Other Total Salaries and wages 19, ,447 Social security costs 1,574-1,574 Employer's contributions to NHS pensions 2,569-2,569 Pension cost - other 1-1 Termination benefits Agency/contract staff - 1,336 1,336 Total gross staff costs 23,893 2,236 26,129 Recoveries in respect of seconded staff Total staff costs 23,893 2,236 26,129 Included within: Costs capitalised as part of assets Note 7.1 Monthly average number of employees (WTE basis) For the 1 month ending 31 March 2015 Permanent Other Total Number Number Number Medical and dental Administration and estates 1, ,864 Healthcare assistants and other support staff 2, ,388 Nursing, midwifery and health visiting staff 2, ,762 Scientific, therapeutic and technical staff 1, ,268 Social care staff Total average numbers 7, ,609 Of which: Number of employees (WTE) engaged on capital projects 6-6 Note 7.2 Retirements due to ill-health During March 2015 there were no early retirements from the Trust agreed on the grounds of ill-health. 21

23 Note 7.3 Reporting of compensation schemes - exit packages March 2015 Number of compulsory redundancies Number of other departures agreed Total number of exit packages by cost band Exit package cost band (including any special payment element) < 10, ,000-25, ,001-50, , , , , , , > 200, Total number of exit packages by type Total resource cost ( ) 176,000 26, ,000 Note 7.4 Exit packages: other (non-compulsory) departure payments 31 March 2015 Total value of Agreements agreements Number 000 Contractual payments in lieu of notice Total Of which: Non-contractual payments requiring HMT approval made to individuals where the payment value was more than 12 months of their annual salary - - Note 7.5 Directors' remuneration The aggregate amounts payable to directors were: 31 March Salary 77 Employer's pension contributions 10 Total 87 Further details of directors' remuneration can be found in the remuneration report. 22

24 Note 8 Pension costs Past and present employees are covered by the provisions of the NHS Pensions Scheme. Details of the benefits payable under these provisions can be found on the NHS Pensions website at The scheme is an unfunded, defined benefit scheme that covers NHS employers, GP practices and other bodies, allowed under the direction of the Secretary of State, in England and Wales. The scheme is not designed to be run in a way that would enable NHS bodies to identify their share of the underlying scheme assets and liabilities. Therefore, the scheme is accounted for as if it were a defined contribution scheme: the cost to the NHS Body of participating in the scheme is taken as equal to the contributions payable to the scheme for the accounting period. In order that the defined benefit obligations recognised in the accounts do not differ materially from those that would be determined at the reporting date by a formal actuarial valuation, the FReM requires that the period between formal valuations shall be four years, with approximate assessments in intervening years. An outline of these follows: a) Accounting valuation A valuation of the scheme liability is carried out annually by the scheme actuary as at the end of the reporting period. This utilises an actuarial assessment for the previous accounting period in conjunction with updated membership and financial data for the current reporting period, and are accepted as providing suitably robust figures for financial reporting purposes. The valuation of the scheme liability as at 31 March 2015, is based on valuation data as 31 March 2014, updated to 31 March 2015 with summary global member and accounting data. In undertaking this actuarial assessment, the methodology prescribed in IAS 19, relevant FReM interpretations, and the discount rate prescribed by HM Treasury have also been used. The latest assessment of the liabilities of the scheme is contained in the scheme actuary report, which forms part of the annual NHS Pension Scheme (England and Wales) Pension Accounts, published annually. These accounts can be viewed on the NHS Pensions website. Copies can also be obtained from The Stationery Office. b) Full actuarial (funding) valuation The purpose of this valuation is to assess the level of liability in respect of the benefits due under the scheme (taking into account its recent demographic experience), and to recommend the contribution rates. The last published actuarial valuation undertaken for the NHS Pension Scheme was completed for the year ending 31 March The Scheme Regulations allow contribution rates to be set by the Secretary of State for Health, with the consent of HM Treasury, and consideration of the advice of the Scheme Actuary and appropriate employee and employer representatives as deemed appropriate. c) Scheme provisions The NHS Pension Scheme provided defined benefits, which are summarised below. This list is an illustrative guide only, and is not intended to detail all the benefits provided by the Scheme or the specific conditions that must be met before these benefits can be obtained: The Scheme is a final salary scheme. Annual pensions are normally based on 1/80th for the 1995 section and of the best of the last three years pensionable pay for each year of service, and 1/60th for the 2008 section of reckonable pay per year of membership. Members who are practitioners as defined by the Scheme Regulations have their annual pensions based upon total pensionable earnings over the relevant pensionable service. With effect from 1 April 2008 members can choose to give up some of their annual pension for an additional tax free lump sum, up to a maximum amount permitted under HMRC rules. This new provision is known as pension commutation. Annual increases are applied to pension payments at rates defined by the Pensions (Increase) Act 1971, and are based on changes in retail prices in the twelve months ending 30 September in the previous calendar year. From the Consumer Price Index (CPI) has been used and replaced the Retail Prices Index (RPI). Early payment of a pension, with enhancement, is available to members of the scheme who are permanently incapable of fulfilling their duties effectively through illness or infirmity. A death gratuity of twice final year s pensionable pay for death in service, and five times their annual pension for death after retirement is payable. For early retirements other than those due to ill health the additional pension liabilities are not funded by the scheme. The full amount of the liability for the additional costs is charged to the employer. 23

25 Members can purchase additional service in the NHS Scheme and contribute to money purchase AVC s run by the Scheme s approved providers or by other Free Standing Additional Voluntary Contributions (FSAVC) providers. Those employees who are not eligible for the NHS Pensions scheme who wish to make pension contributions are covered by the National Employment Savings Trust (NEST) pensions scheme which is a non defined benefit scheme. 24