UNIVERSITY OF LEICESTER STUDENTS' UNION

Transcription

1 Registered number: Charity number: UNIVERSITY OF LEICESTER STUDENTS' UNION TRUSTEES' REPORT AND FINANCIAL STATEMENTS

2 CONTENTS Page Trustees 1 Reference and administrative details of the charity and advisers 2 Trustees' report 3-9 Independent auditor's report Consolidated statement of financial activities 12 Consolidated balance sheet 13 Company balance sheet 14 Consolidated cash flow statement 15 Notes to the financial statements 16-35

3 TRUSTEES Trustees K Julian, External Trustee N Reed, External Trustee (resigned 28 June 2016) H J Hunt, External Trustee H Sachdev, External Trustee (appointed 1 August 2015) S Knowles, External Trustee (appointed 1 August 2015) R Holland, President*, ** R Riyahi Boni, Sports Officer* D Schofield, Activities Officer* A Mitchell, Education Officer*, Engagement Officer ** H Smailes, Wellbeing Officer* L Hockley, Student Trustee* A Hamilton, Student Development Officer ** L Patrick, Education Officer** R Gallagher, Wellbeing Officer** J Gillott, Student Trustee** * Full time Officers elected to hold office from 4 July 2016 until 30 June 2017 (** 29 June 2015 until 1 July 2016) Company registered number Charity registered number Registered office Percy Gee Building University Road Leicester LE1 7RH Company secretary T Page (resigned 31 July 2016) S Anderson (appointed 1 August 2016) Chief executive officer T Page (resigned 31 July 2016) C Davies, Interim Chief Executive Officer (appointed 1 August 2016) Page 1

4 REFERENCE AND ADMINISTRATIVE DETAILS OF THE COMPANY AND ADVISERS Independent auditor Crowe Clark Whitehill LLP Black Country House Rounds Green Road Oldbury West Midlands B69 2DG Bankers National Westminster Bank Plc Granby Street Leicester LE1 9GT Page 2

5 TRUSTEES' REPORT The Trustees (who are also directors of the charity for the purposes of the Companies Act) present their annual report together with the audited financial statements of University of Leicester Students' Union (ULSU) (the company) for the ended 31 July The Trustees confirm that the Annual report and financial statements of the company and the group comply with the current statutory requirements, the requirements of the company and the group's governing document and the provisions of the Statement of Recommended Practice, Charities SORP (FRS 102), "Accounting and Reporting by Charities" effective 1 January Structure, governance and management a. CONSTITUTION The company is registered as a charitable company limited by guarantee and was set up by a Memorandum of Association. The company and the group is constituted under a Memorandum of Association and is a registered charity number ULSU also has internal regulations or Rules approved by the Board of Trustees and regulated by the governing body of the University of Leicester (the University) in accordance with the 1994 Education Act and the Charity Commission. ULSU s charitable Objects are: The advancement of education of Students at the University for the public benefit by: promoting the interests and welfare of Students at the University during their course of study and representing, supporting and advising Students; being the recognised representative channel between Students and the University and any other external bodies; and providing social, cultural, sporting and recreational activities, and forums for discussions and debate for the personal development of its Students. b. METHOD OF APPOINTMENT OR ELECTION OF TRUSTEES ULSU is administered by its Board of Trustees of up to five students elected annually by cross campus secret ballot of the ULSU membership (and are full time, or sabbatical, posts remunerated as authorised by the Education Acts and cannot exceed two years duration for each holder); up to five external trustees appointed for up to four years by an appointments panel, and a student that is appointed by the appointments panel, and has no employment in any capacity with the Union. c. POLICIES ADOPTED FOR THE INDUCTION AND TRAINING OF TRUSTEES All the charity trustees receive an induction into their legal and administrative responsibilities, with an on-going training programme as and when needed for issues arising during their term of office. d. ORGANISATIONAL STRUCTURE AND DECISION MAKING The Board of Trustees, assisted by sub committees where appropriate, has delegated the day to day running of ULSU to a Chief Executive. The Board of Trustees meets at least four times a year to receive reports from individual Officers, sub committees and the Chief Executive, to review the charity s performance and administration generally and to decide policy issues arising. A Board sub committee, the Strategic Leadership Team, made up of the Unions Managers, meets monthly to oversee the Unions regular activities. ULSU also employs a number of non student full time staff for the sake of continuity in the management of its many Page 3

6 TRUSTEES' REPORT (continued) activities. These staff members are accountable to the Chief Executive for the performance of their duties. e. PAY POLICY FOR SENIOR STAFF The Trustee board will review pay across the organisation on an annual basis. The factors to be taken into consideration include individual performance, the prevailing rate of inflation and the Union s financial position as of 1st of August. Staff must have worked a full financial year (1st August 31st July) in order to have qualifying length of service. Salary increases are at the discretion of the Union and are not a guaranteed outcome of the annual review process. Senior staff will receive the same annual pay increase as all other staff. f. RELATIONSHIP WITH UNIVERSITY OF LEICESTER The relationship between the University and ULSU is established in the Regulations of the University and detailed in ULSU Rules approved by both organisations. ULSU receives a Block Grant from the University, and leases most of the Percy Gee Building owned by the University, which also pays for utilities. This non monetary support is intrinsic to the relationship between the University and ULSU. An estimated value to ULSU for this free serviced accommodation has been included in the accounts, valued at 300,000. Although ULSU continues to generate supplementary funding from various trading activities, it is dependent on the University s support. There is no reason to believe that this or equivalent support from the University will not continue for the foreseeable future, as the Education Act 1994 imposes a duty on the University to ensure the financial viability of its student representative body. g. RISK MANAGEMENT The Board of Trustees continually examine the major strategic, business and operational risks faced by ULSU and confirms that systems are in place to manage those risks, including annual reviews by the Board. There are a number of significant risks affecting the Union. These include changing student preferences, the impact of Higher Education Policy on the University and the Union and changes in the broader economic and political climate. The Trustees consider a significant source of financial risk to be that of the funding requirements of the Students Union Superannuation Scheme. In order to mitigate this risk, the current and foreseeable service cost is monitored and periodic actuarial valuations are reviewed to assess the impact of external factors on the scheme liability. Objectives and Activities a. POLICIES AND OBJECTIVES The Board of Trustees has focused its current activities on developing an exceptional student experience, in line with its constitutional objectives. The Union s current vision is An innovative Union that empowers students to deliver change. This will be up for renewal in In pursuit of these objectives, ULSU has established departments and services for use by its members and to support its work with the University and other organisations on behalf of students. These include a Student Voice campaigning and representation function, an Education advice service and support for student volunteers and group leaders. Officer Trustees of ULSU sit on every University committee and meet regularly with the Local Authority, and other providers of public services affecting students. ULSU s commitment to its members includes volunteer development opportunities for nearly 3,000 students in activities ranging from competitive sports to student academic representation within the various Colleges of the Page 4

7 TRUSTEES' REPORT (continued) University. This year the new Membership Services team has developed its offer to students and has opened a new reception function, developing opportunities for student staff and ensuring that student development is at the heart of the Union and that students feel empowered to run their own groups and projects. In setting our objectives and planning our activities the Trustees have given careful consideration to the Charity Commission's general guidance on public benefit. Achievements and performance a. GOING CONCERN After making appropriate enquiries, the trustees have a reasonable expectation that the company 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 financial statements. Further details regarding the adoption of the going concern basis can be found in the Accounting Policies. b. REVIEW OF ACTIVITIES The Union operates around three strategic areas of activity: Student Voice Student Support Student Life Student Voice Much of the ULSU's main focus is centred on representation and campaigns to improve the educational experience at the University. This is conducted via a large number of elected representatives. They are trained and supported by a staff team in our Membership Services hub. The representative function is headed by the five Student Officer Trustees that are employed full-time to carry out their functions. For 2016/17, it was agreed through the democratic structures of the Union that the five full-time Student Officer Trustees would have the following portfolios: President Education Officer Activities Officer Wellbeing Officer Sports Officer Issues addressed this year included: Increase in student support, including opening a new mental health drop-in clinic two days a week within the Union building to support students with their mental health Improving the University induction period by moving all processes online (including voter registration as part of course registration) Development of a number of academic initiatives, including a Feedback Charter, Lecture Capture, and Personal Tutor training Objectives for the year ahead Plans for the coming year include: Improving the quality of private accommodation across the City Giving students the tools to make change through training and financial support A focus on safety during evening events, including responsible drinking and a safe route home Page 5

8 TRUSTEES' REPORT (continued) Improving sustainability through paperless assignment submissions, Meat-Free Mondays and achieving an NUS Green Impact Award Widening accessibility for those playing sport, particularly for students defining as LGBT+ and BAME Student Support As always, the year has been very busy for the Unions support services. There have been more appeals and more complex casework. The relative lack of resources and the increasing demand for the service, together with a need and desire to extend its reach to those students in most need lead to a re-evaluation of the model of service delivery. This has involved developing a peer-to-peer process for students requiring advice and support. Objectives for the year ahead: To develop the provision of advice via multiple channels as well as on-campus, face to face activity For 90% of students using the academic advice service to recommend it to their peers For 50% of students using our peer support network to be trained as mentors for the academic year Student Life The Union endeavours to enhance the overall experience of being a student in Leicester. This includes the provision of over 200 student societies, sports both competitive and recreational, media opportunities such as a radio station, and a newspaper. The Union gives grants totalling over 140,000 to student groups to support their work. This year, the new training team will be introducing student trainers to support the work the team have been doing this year. We continue to work with the University on the very successful International Students Welcome Week immediately preceding the main Fresher s Week which helps enhance the International Student experience. The year culminated in a hugely popular University of Leicester Student Awards evening which was run in collaboration with the Career Development Service. Over 300 students came to this black tie meal hosted with the Pro Vice-Chancellor. Fresher s Week was a huge success and over 12,000 students visited the Fair of student groups and commercial sponsors in the first two days of the week. For 2016/17 we are looking at revamping the Freshers Offer and offering a wider variety of events over the first week of term. For the first time this year, the Union has entered into a Joint Venture with the University running all commercial outlets across campus, with equal levels of representation from both sides on the board of the venture and all profits being shared between both parties. Objectives for the year ahead: 90% of student group grant funding to be used by student groups with over 1000 successful student-led events being run Achieve an average mean feedback score of 3.5+ for all training sessions delivered to students 225 positive changes delivered by academic student leaders Develop 30 different volunteer programmes to be run either through the Students Union or a relevant student society 200 active student groups fully ratified and affiliated with the SU, 60% of which successfully gain a Bronze or higher accreditation level Page 6

9 TRUSTEES' REPORT (continued) Financial review ULSU s gross income from all sources this year totalled 5,074,047. Total expenditure was 4,820,502 resulting in a surplus for the year of 253,545, increasing ULSU's total reserves to 423,842 before the introduction of the share of the joint venture s results. The Union has continued to benefit from the recognition and support of the University, and this year the annual block grant went up to 868,427. In addition to this the Union received other grants from the University of 354,000. The Union's trading subsidiary operates a number of trading operations including: a live music venue, retail operations, restaurant, Starbucks franchise and a conference trade. Trading surplus was 226,124 which is covenanted to the Union. The University of Leicester Students' Union Trading Limited holds a 50% share in Student Union Lettings Limited. The company is registered as a charitable company limited by guarantee. 50% of the net income and assets of the company have been included in these financial statements. a. RESERVES POLICY The Union aims to hold 6 months' wages in free reserves. This would equate to approximately 573,412 in the current year. This would enable an orderly winding down of the organisation in the event that it was necessary. Free Reserves Free reserves stood at 570,660 at the year end. This position is after deducting from total unrestricted funds before the pension deficit funding liability of 710,454 the amount of 148,984 held as designated funds to finance the further development of societies over the next year or two and a fund specifically for Sports and fixed assets of 418,204. Subs and affiliations At the present time ULSU is affiliated to the NUS, for which our total subscription costs amounted to 41,765 for the year. No donations were made during the year to any external bodies out of ULSU s own resources. Plans for the future a. FUTURE FUNDING The Board of Trustees confirms that ULSU has sufficient funds to meet all its obligations. The Block Grant for 2016/17 has been confirmed at 877,111. In addition to the the Union will receive other grants from the University of 356,040. b. FUTURE DEVELOPMENTS The Union is currently in discussions with the University regarding a possible commercial joint venture. Page 7

10 TRUSTEES' REPORT (continued) TRUSTEES' RESPONSIBILITIES STATEMENT The Trustees (who are also directors of ULSU for the purposes of company law) are responsible for preparing the Trustees' report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). Company law requires the Trustees to prepare financial statements for each financial year. Under company law the 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 charitable company and the group and of the incoming resources and application of resources, including the income and expenditure, of the charitable group for that period. In preparing these financial statements, the Trustees are required to: select suitable accounting policies and then apply them consistently; observe the methods and principles in the Charities SORP; make judgments and accounting estimates that are reasonable and prudent; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable group will continue in operation. The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the charitable company and the group's transactions and disclose with reasonable accuracy at any time the financial position of the charitable group and enable them to ensure that the financial statements comply with the Companies Act They are also responsible for safeguarding the assets of the charitable company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. PROVISION OF INFORMATION TO AUDITOR Each of the persons who are Trustees at the time when this Trustees' report is approved has confirmed that: so far as that Trustee is aware, there is no relevant audit information of which the charitable group's auditor is unaware, and that Trustee has taken all the steps that ought to have been taken as a Trustee in order to be aware of any information needed by the charitable group's auditor in connection with preparing its report and to establish that the charitable group's auditor is aware of that information. Page 8

11 TRUSTEES' REPORT (continued) AUDITOR The auditor, Crowe Clark Whitehill LLP, has indicated its willingness to continue in office. The Designated Trustees will propose a motion re appointing the auditor at a meeting of the Trustees. This report was approved by the Trustees on 6th December 2016 and signed on their behalf by: R Holland President Page 9

12 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF UNIVERSITY OF LEICESTER STUDENTS' UNION We have audited the financial statements of University of Leicester Students' Union for the year ended 31 July 2016 set out on pages 12 to 35. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006, section 145 of the Charities Act 2011 and regulations made under section 154 of that Act. Our audit work has been undertaken so that we might state to the charitable company's members 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 charitable company and its members, as a body, for our audit work, for this report, or for the opinion we have formed. RESPECTIVE RESPONSIBILITIES OF TRUSTEES AND AUDITOR As explained more fully in the Trustees' responsibilities statement, the Trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. We have been appointed as auditor under the Companies Act 2006 and section 145 of the Charities Act 2011 and report to you in accordance with those Acts. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors. SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's website at OPINION ON FINANCIAL STATEMENTS In our opinion the financial statements: give a true and fair view of the state of the charitable company's affairs as at 31 July 2016 and of the group's incoming resources and application of resources, including its income and expenditure, for the year then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Companies Act 2006 and the Charities Act Page 10

13 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF UNIVERSITY OF LEICESTER STUDENTS' UNION OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion the information given in the Trustees' report, incorporating the Group strategic report, for the financial year for which the financial statements are prepared is consistent with the financial statements. MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION We have nothing to report in respect of the following matters where the Companies Act 2006 and the Charities Act 2011 requires us to report to you if, in our opinion: the parent charitable company has not kept adequate and sufficient accounting records, or returns adequate for our audit have not been received from branches not visited by us; or the parent charitable company financial statements are not in agreement with the accounting records and returns; or certain disclosures of trustees' remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit; or the Trustees were not entitled to take advantage of the small companies' exemption from the requirement to prepare a Group strategic report. Helen Drew (Senior statutory auditor) for and on behalf of Crowe Clark Whitehill LLP Statutory Auditor Black Country House Rounds Green Road Oldbury West Midlands B69 2DG 30 January 2017 Page 11

14 CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES INCORPORATING INCOME AND EXPENDITURE ACCOUNT INCOME FROM: Note Restricted Unrestricted funds funds Total funds 2016 Total funds 2015 Donations and grants 2 94,263 1,522,428 1,616,691 1,509,354 Charitable activities 469, , , ,219 Other trading activities 3,4-2,769,598 2,769,598 2,872,960 Share of joint venture gross income - 89,490 89,490 79,912 Other income 5-20,022 20,022 15,315 TOTAL INCOME 563,982 4,510,065 5,074,047 5,097,760 EXPENDITURE ON: ULSU Trading Ltd expenses - 2,707,925 2,707,925 2,775,209 Charitable activities 582,106 1,530,471 2,112,577 2,096,944 TOTAL EXPENDITURE 6 582,106 4,238,396 4,820,502 4,872,153 NET INCOME / (EXPENDITURE) BEFORE TRANSFERS (18,124) 271, , ,607 Transfers between Funds 19 9,381 (9,381) - - NET INCOME / (EXPENDITURE) BEFORE OTHER RECOGNISED GAINS AND LOSSES (8,743) 262, , ,607 NET MOVEMENT IN FUNDS (8,743) 262, , ,607 RECONCILIATION OF FUNDS: Total funds brought forward 251, , , ,839 TOTAL FUNDS CARRIED FORWARD 242, , , ,446 All activities relate to continuing operations. The notes on pages 16 to 35 form part of these financial statements. Page 12

15 REGISTERED NUMBER: CONSOLIDATED BALANCE SHEET AS AT 31 JULY 2016 FIXED ASSETS Note Intangible assets 11 8, Tangible assets , ,578 CURRENT ASSETS 418, ,007 Stocks 14 71,087 60,794 Debtors , ,469 Cash at bank and in hand 1,292,516 1,220,391 1,831,941 1,790,654 CREDITORS: amounts falling due within one year 16 (444,401) (433,990) NET CURRENT ASSETS 1,387,540 1,356,664 TOTAL ASSETS LESS CURRENT LIABILITIES 1,806,244 1,579,671 CREDITORS: amounts falling due after more than one year 17 (1,053,253) (1,080,225) NET ASSETS 752, ,446 CHARITY FUNDS Restricted funds , ,067 Unrestricted funds , ,379 TOTAL FUNDS 752, ,446 The financial statements were approved by the Trustees on 6 December 2016 and signed on their behalf, by: R Holland President The notes on pages 16 to 35 form part of these financial statements. Page 13

16 REGISTERED NUMBER: COMPANY BALANCE SHEET AS AT 31 JULY 2016 FIXED ASSETS Note Intangible assets 11 8, Tangible assets , ,578 Investments CURRENT ASSETS 418, ,009 Stocks 14 71,087 60,794 Debtors , ,716 Cash at bank 1,292,516 1,220,391 2,058,065 2,027,901 CREDITORS: amounts falling due within one year 16 (670,527) (671,239) NET CURRENT ASSETS 1,387,538 1,356,662 TOTAL ASSETS LESS CURRENT LIABILITIES 1,806,244 1,579,671 CREDITORS: amounts falling due after more than one year 17 (1,053,253) (1,080,225) NET ASSETS 752, ,446 CHARITY FUNDS Restricted funds , ,067 Unrestricted funds , ,379 TOTAL FUNDS 752, ,446 The financial statements were approved by the Trustees on 6 December 2016 and signed on their behalf, by: R Holland President The notes on pages 16 to 35 form part of these financial statements. Page 14

17 CONSOLIDATED CASH FLOW STATEMENT Cash flows from operating activities Note Net cash provided by/(used in) operating activities ,205 (37,093) Cash flows from investing activities: Proceeds from the sale of tangible fixed assets 14, Purchase of tangible fixed assets (361,565) (171,529) Purchase of intangible assets (10,000) - Net cash used in investing activities (357,080) (171,504) Change in cash and cash equivalents in the year 72,125 (208,597) Cash and cash equivalents brought forward 1,220,391 1,428,988 Cash and cash equivalents carried forward 1,292,516 1,220,391 Page 15

18 1. ACCOUNTING POLICIES 1.1 Basis of preparation of financial statements The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2015) - (Charities SORP (FRS 102)), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act University of Leicester Students' Union meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy. The Statement of financial activities (SOFA) and Balance sheet consolidate the financial statements of the company and its subsidiary undertaking. The results of the subsidiary are consolidated on a line by line basis. First time adoption of FRS 102 These financial statements are the first financial statements of the University of Leicester Students' Union prepared in accordance with Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Charities SORP (FRS 102). The financial statements of the University of Leicester Students' Union for the year ended 31 July 2015 were prepared in accordance with previous Generally Accepted Accounting Practice ( UK GAAP ) and SORP Some of the FRS 102 recognition, measurement, presentation and disclosure requirements and accounting policy choices differ from previous UK GAAP. Consequently, the Trustees have amended certain accounting policies to comply with FRS 102 and Charities SORP (FRS 102). Reconciliations to previous UK GAAP for the comparative figures are included in note Basis of consolidation The financial statements consolidate the accounts of ULSU and its subsidiary undertaking ('subsidiary'). The company has taken advantage of the exemption contained within 408 of the Companies Act 2006 not to present its own Income and expenditure account. The income and expenditure account surplus for the year dealt with in the accounts of the company was 27,421 ( deficit of 11,640). 1.3 Going concern The company has cash resources and has no requirement for external funding. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. They continue to believe the going concern basis of accounting in preparing the annual financial statements. Page 16

19 1. ACCOUNTING POLICIES (continued) 1.4 Company status The company is a company limited by guarantee. In the event of the company being wound up, the liability in respect of the guarantee is limited to 1 per member of the company. 1.5 Fund accounting General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the company and which have not been designated for other purposes. Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the company for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements. 1.6 Income All incoming resources are included in the Statement of financial activities when the charity has entitlement to the funds, it is probable that the income will be received and the amount can be measured with sufficient reliability. Donated services or facilities are recognised when the charity has control over the item, any conditions associated with the donated item have been met, the receipt of economic benefit from the use of the charity of the item is probable and that economic benefit can be measured reliably. On receipt, donated professional services and donated facilities are recognised on the basis of the value of the gift to the charity which is the amount the charity would have been willing to pay to obtain services or facilities of equivalent economic benefit on the open market; a corresponding amount is then recognised in expenditure in the period of receipt. Other income is recognised in the period in which it is receivable and to the extent the goods have been provided or on completion of the service. 1.7 Grants The recurrent block grant is receivable from the University of Leicester, the Union's parent Governing Body. The grant is credited to the income and expenditure account in the year to which it relates. Project support grants are project based and include grants which are receivable from the University and other funding bodies. Page 17

20 1. ACCOUNTING POLICIES (continued) 1.8 Expenditure Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Central staff costs are allocated on the basis of time spent, and depreciation charges allocated on the portion of the asset s use. Support costs are those costs incurred directly in support of expenditure on the objects of the company and include project management carried out at Headquarters. Charitable activities and Governance costs are costs incurred on the academy trust s educational operations, including support costs and costs relating to the governance of the academy trust apportioned to charitable activities. 1.9 Intangible fixed assets and amortisation Intangible assets are valued at cost less amortisation. estimated economic life of five years. The asset is being amortised over its 1.10 Tangible fixed assets and depreciation All assets costing more than 500 are capitalised. Tangible fixed assets are carried at cost, net of depreciation and any provision for impairment. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives on the following bases: Fixtures & Fittings - 25% - 33% of cost Trading improvements - 25% - 33% of cost Other fixed assets - 25% of cost 1.11 Interest receivable Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the company; this is normally upon notification of the interest paid or payable by the Bank Investments ULSU's fixed asset investments are valued at cost, as these assets are not readily saleable and a reliable market value is not readily ascertainable. (i) Subsidiary undertakings and joint ventures Investments in subsidiaries are valued at cost less provision for impairment. Page 18

21 1. ACCOUNTING POLICIES (continued) 1.13 Stocks Stocks are valued at the lower of cost and net realisable Debtors Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due Liabilities and provisions Liabilities are recognised when there is an obligation at the Balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Liabilities are recognised at the amount that the company anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide. Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised within interest payable and similar charges Pensions ULSU participates in the Students' Union Superannuation Scheme, a defined benefits 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 ULSU. Under the terms of FRS 102, in these circumstances contributions are accounted for as if the scheme were a defined contribution scheme based on actual contributions paid through the year. The Union also contributes to defined contribution pension schemes for its employees. The pension charge represents the amounts payable by the company to the fund in respect of the year Financial instruments The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities such as trade and other accounts receivable and payable and loans from the University. Page 19

22 1. ACCOUNTING POLICIES (continued) 1.18 Critical accounting estimates and areas and judgement The charity makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: (i) Pension deficit contribution The charity has entered into a commitment to provide deficit funding to the Students' Union Superannuation Pension Scheme, of which it is a contributing employer. Under FRS 102, the fair value of the commitment is recognised. The calculation of the fair value of the commitment is subject to an assumption of the discount rate. The discount rate is determined by reference to market yields at the reporting date on high quality corporate bonds. (ii) Donation of facilities by University of Leicester In accordance with the Charities SORP FRS 102, the Union and its trading subsidiary has valued the benefit it receives from occupying facilities owned by the University on a rent-free basis, at the trustees' estimate of market value at 300,000. (iii) Support costs Many of the costs incurred by the Union such as support staff costs and service costs are shared between activities. The Union's policy is to allocate these costs on the basis of assessed consumption. 2. INCOME FROM DONATIONS AND GRANTS Restricted Unrestricted funds funds Total funds 2016 Total funds 2015 Donations and University Grants - 1,222,428 1,222,428 1,111,824 Grant of serviced accommodation - 300, , ,000 Green fund restricted income 15,265-15,265 71,700 Widening Participation fund restricted income 30,998-30,998 25,830 Peer mentoring fund restricted income 48,000-48,000 - Total donations and grants 94,263 1,522,428 1,616,691 1,509,354 In 2015, of the total income from donations and grants, 1,411,824 was to unrestricted funds and 97,530 was to restricted funds Page 20

23 3. NON-ANCILLARY TRADING INCOME Restricted Unrestricted funds funds Total funds 2016 Total funds 2015 Rental income - 18,549 18,549 43,504 In 2015, of the total income from other trading activities, 43,504 was to unrestricted funds and NIL was to restricted funds. 4. SUBSIDIARY TRADING COMPANY The ULSU owns 100% of the issued share capital of it's subsidiary, University of Leicester Students Union Trading Ltd. The subsidiary participates in trading activities relating to the Union. Its taxable profits are donated to the Union. A summary of the subsidiary's results is shown below: Profit and loss account Turnover 2,751,049 2,829,456 Cost of sales (950,749) (1,178,953) Gross profit 1,800,300 1,650,503 Administrative expenses (1,574,176) (1,413,256) Net profit 226, ,247 Gift aid donation (226,124) (237,247) Retained in subsidiary - - The net assets of ULSU Trading Ltd at 31 July 2016 amounted to 2 (2015-2). Included within the expenditure in the consolidated Statement of Financial Activities is notional rent of 183,000 (2015: 183,000). Page 21

24 5. OTHER INCOMING RESOURCES Restricted Unrestricted funds funds Total funds 2016 Total funds 2015 Other incoming resources - 14,055 14,055 6,361 Bank interest received - 5,967 5,967 8,954-20,022 20,022 15,315 In 2015, of the total other incoming resources, 15,315 was to unrestricted funds and NIL was to restricted funds. 6. ANALYSIS OF RESOURCES EXPENDED BY EXPENDITURE TYPE Staff costs Depreciation Other costs Total Total ULSU Trading Ltd 1,140,084 84,181 1,483,660 2,707,925 2,775,209 Costs of generating funds 1,140,084 84,181 1,483,660 2,707,925 2,775,209 Education & Representation 372,169 9, , , ,833 Welfare 7,581 11, , ,956 4,148 Campaigns & Communications 6,719 9,587 75,143 91, ,262 Shops - 16,144 56,824 72, ,181 Societies & clubs 199,880 31, ,009 1,134,859 1,239,708 Green Fund 24,214-19,611 43,825 70,505 Other costs ,571 Widening participation 22,743-7,019 29,762 20,736 Peer mentoring 31,708-11,292 43,000 - Training 31,523-5,252 36,775 - Charitable activities 696,537 78,390 1,337,650 2,112,577 2,096,944 1,836, ,571 2,821,310 4,820,502 4,872,153 In 2015, of the total resources expended, 4,254,835 was to unrestricted funds and 617,318 was to restricted funds. Page 22

25 7. ANALYSIS OF RESOURCES EXPENDED BY ACTIVITIES Certain central overhead support costs have been reallocated to the various activities as noted in the accounting policies. The effect of this reallocation on the various expenditure heading is shown here: Activities undertaken directly 2016 Support costs Total Total Education & Representation 419, , , ,833 Welfare 7, , ,956 4,148 Campaigns & Communications - 91,449 91, ,262 Shops - 72,968 72, ,181 Societies & clubs 697, ,650 1,134,859 1,239,708 Green Fund 43,825-43,825 70,505 Other costs ,571 Widening participation 29,762-29,762 20,736 Peer mentoring 43,000-43,000 - Training - 36,775 36,775 - Total 1,240, ,963 2,112,577 2,096,944 Support costs comprised: Staff costs 255, ,104 Depreciation 78,390 70,829 Rent 300, ,000 Less notional rent re ULSU Trading Ltd (183,000) (183,000) Insurances 40,372 33,290 NUS Subscription 41,765 38,610 Bad debts Pension Scheme Funding 32,991 78,662 Marketing costs 37,292 34,569 Stationery and telephone 18,491 12,901 General building repairs and cleaning 134, ,666 Bank and Interest charges 47,266 50,237 Other sundry expenses 68, ,305 Total 871,963 1,071,973 Page 23

26 8. NET INCOMING RESOURCES/(RESOURCES EXPENDED) This is stated after charging: Amortisation - intangible fixed assets 2,262 5,000 Depreciation of tangible fixed assets: - owned by the charitable group 162, ,673 Auditor's remuneration - audit 16,500 15,250 Auditor's remuneration - other services 3, STAFF COSTS Staff costs were as follows: Wages and salaries 1,695,198 1,456,370 Social security costs 93,171 76,043 Other pension costs 48, ,685 1,836,621 1,795,098 The average number of persons employed by the company during the year was as follows: No. No. Full time Students - term time only The number of higher paid employees was: No. No. In the band 60,001-70, Key management personnel are considered to be anyone who has authority and responsibility for planning, directing and controlling the activities of the charity. During the year, key management personnel received remuneration of 277,242 (2015: 236,330). Page 24

27 10. TRUSTEES' REMUNERATION The Executive Committee's sabbatical officers were remunerated as allowed by the Education Act 1994 and their salary, NI and pension costs amounted to 102,578 (2015: 86,313) in aggregate. The split of salary costs (excluding NI and pension costs) is as detailed below: TRUSTEE NAME 2016 S Kelly Walsh - 16,830 M Rubin - 16,937 J Appleyard - 17,403 Y Nikolov - 17,654 R Holland 18,902 2,072 A Mitchell 18,902 2,072 A Hamilton 17,365 2,072 R Gallagher 17,365 2,072 L Patrick 17,288 2,072 D Schofield 1,907 - R Boni 1,907 - H Smailes 1,907 - Total 95,543 79, There were Nil other trustee-benefits for the year (2015: Nil). Four (2015: two) Trustees received reimbursement of expenses totalling 514 (2015: 260). These expenses relate to costs of travelling to meetings. Page 25

28 11. INTANGIBLE FIXED ASSETS Starbucks Licence Group and Company Cost At 1 August ,000 Additions 10,000 Disposals (25,000) At 31 July ,000 Amortisation At 1 August ,571 Charge for the year 2,262 On disposals (25,000) At 31 July ,833 Carrying amount At 31 July ,167 At 31 July TANGIBLE FIXED ASSETS Fixtures & fittings Group and Company Cost At 1 August ,385,183 Additions 361,565 Disposals (218,515) At 31 July ,528,233 Depreciation At 1 August ,162,605 Charge for the year 162,571 On disposals (207,480) At 31 July ,117,696 Net book value At 31 July ,537 At 31 July ,578 Page 26

29 The net book value of fixed assets represents: Assets used for charitable activities 138, ,948 Commercial activities 272,055 75, , , FIXED ASSET INVESTMENTS Subsidiary Company Cost: At 1 August 2015 and 31 July University of Leicester Students' Union Trading Limited holds a 50% stake in Student Union Lettings Limited which was incorporated on 12 July 2012 as a company limited by guarantee and is a joint venture with De Montfort University Students Union Limited. Student Union Lettings Limited commenced trading on 1 August 2012 and 50% of the net income and assets of the company have been included in these financial statements. 14. STOCKS Group Company Stocks in bars, shops & other outlets 71,087 60,794 71,087 60,794 Page 27

30 15. DEBTORS Group Company Trade debtors 11,690 69,762 11,690 69,762 Amounts owed by group undertakings , ,247 Amounts owed by joint ventures 329, , , ,659 Other taxation and social security Other debtors ,610 1, ,610 1,561 Prepayments and accrued income 127, , , , , , , , CREDITORS: Amounts falling due within one year Group Company Trade creditors 80, ,013 80, ,013 Amounts owed to group undertakings , ,249 Other taxation and social security 47,752 23,228 47,752 23,228 Other creditors 185,526 89, ,526 89,739 Accruals and deferred income 130, , , , , , , ,239 Deferred income Group Company Deferred income at 1 August ,777-47,777 Resources deferred during the year - 24,841-12,653 Amounts released from previous years - (9,603) - (9,603) Deferred income at 31 July ,015-50,827 Deferred income relates to amounts received in respect of multi-year contracts. Page 28

31 17. CREDITORS: Amounts falling due after more than one year Group Company Loan from University 342, , , ,762 Defined benefit scheme deficit funding liability 710, , , ,463 1,053,253 1,080,225 1,053,253 1,080,225 It is intended that the loan from the University will be repayable over 10 years from 2012, with a fixed interest rate of 4.5%. 18. FINANCIAL INSTRUMENTS Financial assets measured at amortised cost 1,691,849 1,584,053 Financial liabilities measured at fair value through income and expenditure 710, ,463 Financial liabilities measured at amortised cost 676, ,747 1,386,887 1,443,210 Financial assets measured at amortised cost comprise bank, trade debtors, amounts owed by joint ventures, other debtors and accrued income. Financial liabilities measured at fair value through income and expenditure comprise the pension deficit funding liability. Financial liabilities measured at amortised cost comprise trade creditors, other creditors, accruals and the loan from the University of Leicester. Interest of 18,124 was paid on the balance of the loan from the University of Leicester in the year (2015: 20,706). Page 29

32 19. STATEMENT OF FUNDS Unrestricted funds Brought Forward Income Expenditure Transfers in/out Carried Forward Undesignated Reserves 776,858 4,409,841 (4,140,405) (9,381) 1,036,913 Society Grant Reserves 23,652 10, ,386 Sports Clubs Reserves 125,332 - (65,000) - 60,332 Pension deficit funding (677,463) - (32,991) - (710,454) 248,379 4,420,575 (4,238,396) (9,381) 421,177 Share of net income from joint ventures 89,490 89,490 4,510, ,667 Restricted funds Clubs and Societies 226, ,719 (465,519) - 230,994 Green Fund 19,179 15,265 (43,825) 9,381 - Widening Participation 5,094 30,998 (29,762) - 6,330 Peer Mentoring Fund - 48,000 (43,000) - 5, , ,982 (582,106) 9, ,324 Total of funds, before joint ventures 499,446 4,984,557 (4,820,502) - 663,501 Share of net income from joint ventures 89,490 89,490 5,074, ,991 Page 30

33 19. STATEMENT OF FUNDS SUMMARY OF FUNDS Brought Forward Income Expenditure Transfers in/out Carried Forward Unrestricted funds 248,379 4,420,575 (4,238,396) (9,381) 421,177 Restricted funds 251, ,982 (582,106) 9, , ,446 4,984,557 (4,820,502) - 663,501 Share of net income from joint ventures 89,490 89,490 5,074, ,991 The restricted funds relate to: The Clubs and Societies Funds represent balances held for specific clubs and societies where the ultimate control would vest with the Union. The Green Fund relates to funds received directly from NUS Students' Green Fund to fund a project on sustainable food production on campus. This project ended on 31 July A society group "Hungry for Change" has taken on the project and it will be managed going forward by student volunteers. The Widening Participation fund relates to funds received directly from the University of Leicester to increase engagement of the student body in widening participation. This will include empowering student groups to deliver outreach activities to young people and other prospective students from disadvantaged backgrounds, raising awareness amongst current students about the issues related to fair access and student success. The Union and University have agreed to work in partnership to develop a university-wide peer mentoring scheme. The project will be managed by the as part of the overall volunteer support process, the University have agreed funding of 48,000 to support this scheme. Page 31