South London and Maudsley NHS Foundation Trust

Transcription

1 Foreword to the accounts South London and Maudsley NHS Foundation Trust These accounts, for the year ending 31 March 2009, have been prepared in accordance with paragraphs 24 and 25 of Schedule 7 to the National Health Service Act Page 1

2 Income and Expenditure Account For the year ended 31 March 2009 Notes Income from continuing operations 3 From healthcare activities 311, ,166 4 Other operating income 43,269 52, , ,121 Expenditure on continuing operations 5 Operating expenses (353,309) (325,361) Operating surplus from continuing operations 1,297 11,760 Profit on disposal of fixed assets Surplus before interest and taxation 1,427 11,965 8 Finance costs (97) (86) 8 Finance income 2,045 2,710 Surplus before taxation 3,375 14,589 Taxation - - Surplus for the financial year after taxation 3,375 14,589 9 Dividends payable to the Government (10,044) (9,428) 16 Retained surplus (deficit) for the financial year (6,669) 5,161 The accompanying notes and statement of accounting policies form part of this income and expenditure account. Page 2

3 Statement of total recognised gains and losses Reconciliation of movements in Government funds For the year ended 31 March 2009 Statement of total recognised gains and losses Notes Surplus for the financial year 3,375 14,589 Fixed asset impairment losses offset against past revaluation and indexation - (2,209) 16.2 Unrealised surplus (deficit) on the revaluation of fixed assets and investments (38,899) 26, Increase (decrease) due to the revaluation of donated assets (1,136) (197) 16.2 Decrease due to the depreciation of donated assets (775) (856) Total gains and losses recognised in the period (37,435) 38,022 The accompanying notes and statement of accounting policies form part of this statement. Reconciliation of movements in Government funds Total gains and losses recognised for the year (37,435) 38, Decrease in Donated asset reserve 1,911 1,053 9 Dividends payable to Government (10,044) (9,428) 16.1 New Public Dividend Capital received - 14, Public Dividend Capital repaid - (1,930) Net increase (decrease) in Government funds (45,568) 41,846 Government funds at beginning of the year 342, ,367 Government funds at end of the year 296, , Donated asset reserve 18,423 20, , ,547 The accompanying notes and statement of accounting policies form part of this reconciliation. Page 3

4 Balance Sheet As at 31 March 2009 Notes 31 Mar Mar 2008 Fixed Assets 10 Intangible assets Tangible assets 302, ,595 Investments , ,595 Current Assets 12 Stocks and work in progress Debtors - due after one year 1,098 1, Debtors - due within one year 11,231 12,234 Short-term investments Cash at bank and in hand 52,070 52,873 64,725 66,491 Current Liabilities 14 Creditors : amounts falling due within one year (45,973) (43,222) Net Current Liabilities 18,752 23,269 Total Assets less Current Liabilities 321, ,864 Non-Current Liabilities Creditors : amounts falling due after more than one year Provisions for liabilities and charges (6,015) (6,317) (6,015) (6,317) Total assets employed 315, , Capital and Reserves (Taxpayers Equity) 16.1 Public dividend capital 179, , Revaluation reserve 123, , Donated asset reserve 18,423 20, Income and expenditure reserve (5,790) (117) Total Taxpayers Equity 315, ,547 Signed on behalf of the Board on June 2009 Chief Executive The accompanying notes and statement of accounting policies form part of this balance sheet. Page 4

5 Cash Flow Statement For the year ended 31 March 2009 Notes Net cash inflow from operating activities 22,055 30,653 Returns on investments and servicing of finance Interest received 2,077 2,704 Interest paid (9) - Net cash inflow from returns on investments and servicing of finance 2,068 2,704 Capital expenditure Purchases of tangible fixed assets (16,659) (21,751) Disposals of tangible fixed assets 1,777 1,908 Net cash (outflow) from capital expenditure (14,882) (19,843) 9 Dividend paid (10,044) (9,428) Net cash inflow (outflow) before use of liquid resources and financing (803) 4,086 Financing Public Dividend Capital received - 14,129 Public Dividend Capital repaid - (1,930) Capital received from other grants - 40 Net cash inflow from financing - 12,239 Increase (decrease) in cash during the year (803) 16,325 The accompanying notes and statement of accounting policies form part of this cash flow statement. Page 5

6 1 Accounting policies and other information Monitor has directed that the financial statements of NHS foundation trusts shall meet the accounting requirements of the NHS Foundation Trust Financial Reporting Manual which shall be agreed with HM Treasury. Consequently, the following financial statements have been prepared in accordance with the 2008/09 NHS Foundation Trust Financial Reporting Manual issued by Monitor. The accounting policies contained in that manual follow UK generally accepted accounting practice for companies (UK GAAP) and HM Treasury s Financial Reporting Manual 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. 1.1 Going concern The directors, having made enquiries, have a reasonable expectation that the Trust has adequate resources to continue its operations for the foreseeable future. As a result the accounts continue to be prepared on a going concern basis. 1.2 Accounting convention These accounts have been prepared under the historical cost convention modified to account for the revaluation of tangible fixed assets at their value to the business by reference to their current costs. NHS foundation trusts, in compliance with HM Treasury s Financial Reporting Manual, are not required to comply with the FRS 3 requirements to report earnings per share or historical profits and losses. 1.3 Acquisitions and discontinued operations Activities are considered to be discontinued where they meet all of the following conditions: the sale (this may be at nil consideration for activities transferred to another public sector body) or termination is completed either in the period or before the earlier of three months after the commencement of the subsequent period and the date on which the financial statements are approved; if a termination, the former activities have ceased permanently; the sale or termination has a material effect on the nature and focus of the reporting NHS foundation trust's operations and represents a material reduction in its operating facilities resulting either from its withdrawal from a particular activity or from a material reduction in income in the NHS foundation trust's continuing operations; and the assets, liabilities, results of operations and activities are clearly distinguishable, physically, operationally and for financial reporting purposes. Operations not satisfying all these conditions are classified as continuing. Activities are considered to be 'acquired' whether or not they are acquired from outside the public sector. 1.4 Income recognition Income is accounted for applying the accruals convention. The main source of income for the trust is under contracts from commissioners in respect of healthcare services. Income is recognised in the period in which services are provided. Where income is received for a specific activity which is to be delivered in the following financial year, that income is deferred. 1.5 Expenditure Expenditure is accounted for applying the accruals convention. 1.6 Intangible fixed assets Intangible assets are capitalised when they are capable of being used in a trust's activities for more than one year; they can be valued; and they have a cost of at least 5,000. Intangible fixed assets held for operational use are valued at historical cost and are amortised over the estimated life of the asset on a straight line basis. The carrying value of intangible assets is reviewed for impairment at the end of the first full year following acquisition and in other periods if events or changes in circumstances indicate the carrying value may not be recoverable. Purchased computer software licences are capitalised as intangible fixed assets where expenditure of at least 5,000 is incurred and amortised over the shorter of the term of the licence and their useful economic lives Page 6

7 1.7 Tangible fixed assets Capitalisation Tangible assets are capitalised if they are capable of being used for a period which exceeds one year and they: Valuation individually have a cost of at least 5,000; or form a group of assets which individually have a cost of more than 250, collectively have a cost of at least 5,000, where the assets are functionally interdependent, they had broadly simultaneous purchase dates, are anticipated to have simultaneous disposal dates and are under single managerial control; or form part of the initial setting-up cost of a new building or refurbishment of a ward or unit, irrespective of their individual or collective cost. Tangible fixed assets are stated at the lower of replacement cost and recoverable amount. On initial recognition they are measured at cost (for leased assets, fair value) including any costs, such as installation, directly attributable to bringing them into working condition. The carrying values of tangible fixed assets are reviewed for impairment in periods if events or changes in circumstances indicate the carrying value may not be recoverable. The costs arising from financing the construction of the fixed asset are not capitalised but are charged to the income and expenditure account in the year to which they relate. All land and buildings are revalued using professional valuations in accordance with FRS 15 every five years. A three yearly interim valuation is also carried out. Valuations are carried out by professionally qualified valuers in accordance with the Royal Institute of Chartered Surveyors (RICS) Appraisal and Valuation Manual. The last five-yearly asset valuations were undertaken in 2004 as at the prospective valuation date of 1 April 2005 and was accounted for on 31 March An interim valuation has been undertaken by the District Valuer as at 1st October Land has been revalued by the District Valuer as at 31st March The valuations are carried out primarily on the basis of depreciated replacement cost (DRC) for specialised operational property and existing use value for non-specialised operational property. The value of land for existing use purposes is assessed at existing use value (EUV). For non-operational properties including surplus land, the valuations are carried out at open market value. Additional alternative open market value (OMV) figures have only been supplied for operational assets scheduled for imminent closure and subsequent disposal. Assets in the course of construction are valued at cost and are valued by professional valuers as part of the five or threeyearly valuation or when they are brought into use. As a consequence of significant falls in property values during 2008/9 the Trust decided it was appropriate to reflect the impact of these decreases in advance of the next five yearly revaluation (due in 2009/10). Land forming part of property where building are valued at DRC, and land valued at OMV were revalued by the District Valuer. Property valued at EUV was indexed using the Office index for the 'rest of London'. Any other land was indexed using the Residential Land index for England. Buildings valued at DRC were indexed using the Building Tender Price index. Operational equipment is valued at net current replacement cost. Values at the 1st November 2006 are based on indexed cost, except for IT equipment that is valued at cost. The value of operational equipment acquired after 1st November 2006 is based on cost. Equipment surplus to requirements is valued at net recoverable amount. Depreciation, amortisation and impairments Tangible fixed assets are depreciated at rates calculated to write them down to estimated residual value on a straight-line basis over their estimated useful lives. No depreciation is provided on freehold land, and assets surplus to requirements. Assets in the course of construction are not depreciated until the asset is brought into use or reverts to the trust, respectively. Buildings, installations and fittings are depreciated on their current value over the estimated remaining life of the asset as assessed by the NHS foundation trust's professional valuers. Leaseholds are depreciated over the primary lease term. Equipment is depreciated on current cost evenly over the estimated life of the asset of between 5 and 10 years. Fixed asset impairments resulting from losses of economic benefits are charged to the income and expenditure account. All other impairments are taken to the revaluation reserve and reported in the statement of total recognised gains and losses to the extent that there is a balance on the revaluation reserve in respect of the particular asset. Page 7

8 1.8 Donated fixed assets Donated fixed assets are capitalised at their current value on receipt and this value is credited to the donated asset reserve. Donated fixed assets are valued and depreciated as described above for purchased assets. Gains and losses on revaluations are also taken to the donated asset reserve and, each year, an amount equal to the depreciation charge on the asset is released from the donated asset reserve to the income and expenditure account. Similarly, any impairment on donated assets charged to the income and expenditure account is matched by a transfer from the donated asset reserve. On sale of donated assets, the net book value of donated asset is transferred from the donated asset reserve to the Income and Expenditure Reserve. 1.9 Government grants Government grants are grants from Government bodies other than income from primary care trusts or NHS trusts for the provision of services. Grants from the Department of Health are accounted for as Government grants. Where the Government grant is used to fund revenue expenditure it is taken to the Income and Expenditure account to match that expenditure. Where the grant is used to fund capital expenditure the grant is held as deferred income and released to the income and expenditure account on a straight-line basis over the life of the asset Stocks and work-in-progress Stocks and work-in-progress are valued at the lower of cost and net realisable value Cash, bank and overdrafts Cash, bank and overdraft balances are recorded at the current values of these balances in the NHS foundation trust's cash book. These balances exclude monies held in the NHS foundation trust's bank account belonging to patients (see "third party assets" below). Account balances are only set off where a formal agreement has been made with the bank to do so. In all other cases overdrafts are disclosed within creditors. Interest earned on bank accounts and interest charged on overdrafts is recorded as, respectively, "interest receivable" and "interest payable" in the periods to which they relate. Bank charges are recorded as operating expenditure in the periods to which they relate Research and development Expenditure on research is not capitalised. Expenditure on development is capitalised if it meets the following criteria: there is a clearly defined project the related expenditure is separately identifiable the outcome of the project has been assessed with reasonable certainty as to its technical feasibility and its resulting in a product or service which will eventually be brought into use adequate resources exist, or are reasonably expected to be available, to enable the project to be completed and to provide any consequential increases in working capital. Expenditure so deferred is limited to the value of future benefits expected and is amortised through the income and expenditure account on a systematic basis over the period expected to benefit from the project. It is revalued on the basis of current cost. Expenditure which does not meet the criteria for capitalisation is treated as an operating cost in the year in which it is incurred. Where possible, NHS foundation trusts disclose the total amount of research and development expenditure charged in the Income and Expenditure account separately. However, where research and development activity cannot be separated from patient care activity it cannot be identified and is therefore not separately disclosed. Fixed assets acquired for use in research and development are amortised over the life of the associated project Provisions The NHS foundation trust provides for legal or constructive obligations that are of uncertain timing or amount at the balance sheet date on the basis of the best estimate of the expenditure 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 HM Treasury's discount rate of 2.2% in real terms. Clinical negligence costs The NHS Litigation Authority (NHSLA) operates a risk pooling scheme under which the NHS foundation 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 NHS foundation trust. The total value of clinical negligence provisions carried by the NHSLA on behalf of the NHS foundation trust is disclosed at note 15.6 Page 8

9 Non-clinical risk pooling The NHS foundation trust participates in the Property Expenses Scheme (PES) and the Liabilities to Third Parties Scheme (LPTS). 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. The NHS foundation trust is liable for payment of excesses on the LPTS policy and a provision is charged to operating expenses for the estimate of this liability Contingencies Contingent assets (that is, assets arising from past events whose existence will only be confirmed by one or more future events not wholly within the entity's control) are not recognised as assets, but are disclosed in note 19 where an inflow of economic benefits is probable. Contingent liabilities are provided for where a transfer of economic benefits is probable. Otherwise, they are not recognised, but are disclosed in note 19 unless the probability of a transfer of economic benefits is remote. Contingent liabilities are defined as: Possible obligations arising from past events whose existence will be confirmed only by the occurrence of one or more uncertain future events not wholly within the entity's control; or Present obligations arising from past events but for which it is not probable that a transfer of economic benefits will arise or for which the amount of the obligation cannot be measured with sufficient reliability 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, General 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. The Scheme is subject to a full actuarial valuation every four years (until 2004, based on a five year valuation cycle), and a FRS17 accounting valuation every year. Full actuarial valuation The purpose of the full actuarial 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 to be paid by employers and scheme members. The last such valuation, which determined current contribution rates was undertaken as at 31 March 2004 and covered the period from 1 April 1999 to that date. The conclusion from the 2004 valuation was that the Scheme had accumulated a notional deficit of 3.3 billion against the notional assets as at 31 March However, after taking into account the changes in the benefit and contribution structure effective from 1 April 2008, the Scheme actuary reported that employer contributions could continue at the existing rate of 14% of pensionable pay. On advice from the Scheme actuary, scheme contributions may be varied from time to time to reflect changes in the scheme s liabilities. Up to 31 March 2008, the vast majority of employees paid contributions at the rate of 6% of pensionable pay. From 1 April 2008, employees contributions are on a tiered scale from 5% up to 8.5% of their pensionable pay depending on total earnings. FRS17 Accounting valuation In accordance with FRS17, a valuation of the Scheme liability is carried out annually by the Scheme Actuary as at the balance sheet date by updating the results of the full actuarial valuation. Between the full actuarial valuations at a twoyear midpoint, a full and detailed member data-set is provided to the Scheme Actuary. At this point the assumptions regarding the composition of the Scheme membership are updated to allow the Scheme liability to be valued. The valuation of the Scheme liability as at 31 March 2008, is based on detailed membership data as at 31 March 2006 (the latest midpoint) updated to 31 March 2008 with summary global member and accounting data. 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) Resource Account, published annually. These accounts can be viewed on the NHS Pensions website. Copies can also be obtained from The Stationery Office. Page 9

10 Scheme provisions as at 31 March 2008 The Scheme is a final salary scheme. Annual pensions are normally based on 1/80th of the best of the last 3 years pensionable pay for each year of service. A lump sum normally equivalent to 3 years pension is payable on retirement. 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. On death, a pension of 50% of the member s pension is normally payable to the surviving spouse. 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, less pension already paid, subject to a maximum amount equal to twice the member s final year s pensionable pay less their retirement lump sum for those who die 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 income and expenditure account at the time the Trust commits itself to the retirement, regardless of the method of payment. The Scheme provides the opportunity to members to increase their benefits through money purchase Additional Voluntary Contributions (AVCs) provided by an approved panel of life companies. Under the arrangement the employee/member can make contributions to enhance an employee's pension benefits. The benefits payable relate directly to the value of the investments made. Scheme provisions from 1 April 2008 From 1 April 2008 changes have been made to the NHS Pension Scheme contribution rates and benefits. Further details of these changes can be found on the NHS Pensions website Liquid resources Deposits and other investments that are readily convertible into known amounts of cash at or close to their carrying amounts are treated as liquid resources in the cashflow statement Value Added Tax Most of the activities of the NHS foundation 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 Corporation Tax The NHS foundation trust has reviewed its operating activities and determined that it has no liability for corporation tax Foreign exchange Transactions that are denominated in a foreign currency are translated into sterling at the exchange rate ruling on the dates of the transactions. Resulting exchange gains and losses are taken to the income and expenditure account Third party assets Assets belonging to third parties (such as money held on behalf of patients) are not recognised in the accounts since the NHS foundation trust has no beneficial interest in them. However, they are disclosed in a note 21 to the accounts in accordance with the requirements of the HM Treasury Financial Reporting Manual Leases Where substantially all risks and rewards of ownership of a leased asset are borne by the NHS foundation trust, the asset is recorded as a tangible fixed asset and a debt is recorded to the lessor of the minimum lease payments discounted by the interest rate implicit in the lease. The asset and liability are recognised at the inception of the lease, and are derecognised when the liability is discharged, cancelled or expires. The interest element of the finance lease payment is charged to the income and expenditure account over the period of the lease at a constant rate in relation to the balance outstanding. Other leases are regarded as operating leases and the rentals are charged to the income and expenditure account on a straight-line basis over the term of the lease. Page 10

11 1.22 Public Dividend Capital (PDC) and PDC Dividend 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 original NHS trust. A charge, reflecting the forecast cost of capital utilised by the NHS foundation trust, is paid over as public dividend capital dividend. The charge is calculated at the real rate set by HM Treasury (currently 3.5%) on the average relevant net assets of the NHS foundation trust. Relevant net assets are calculated as the value of all assets less the value of all liabilities, except for donated assets and cash held with the Office of the Paymaster General. Average relevant net assets are calculated as a simple mean of opening and closing relevant net assets Financial instruments Recognition Financial assets and financial liabilities which arise from contracts for the purchase or sale of non-financial items (such as goods or services), which are entered into in accordance with the Trust s normal purchase, sale or usage requirements, are recognised when, and to the extent which, performance occurs i.e. when receipt or delivery of the goods or services is made. De-recognition All financial assets are de-recognised when the rights to receive cashflows from the assets have expired or the Trust has transferred substantially all of the risks and rewards of ownership. Financial liabilities are de-recognised when the obligation is discharged, cancelled or expires. Classification and Measurement Financial assets are categorised as loans and receivables and financial liabilities are classified as other financial liabilities Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments which are not quoted in an active market. They are included in current assets The Trust s loans and receivables comprise: cash at bank and in hand, NHS debtors, accrued income and other debtors. Available-for-sale financial assets The Trust has no asset classied as for sale Other financial liabilities All financial liabilities are recognised initially at fair value, net of transaction costs incurred, and measured subsequently at amortised cost using the effective interest method. The effective interest rate is the rate that discounts exactly estimated future cash payments through the expected life of the financial liability or, when appropriate, a shorter period, to the net carrying amount of the financial liability. They are included in current liabilities except for amounts payable more than 12 months after the balance sheet date, which are classified as long-term liabilities. Interest on financial liabilities carried at amortised cost is calculated using the effective interest method and charged to the income and expenditure account. Determination of fair value For financial assets and financial liabilities carried at fair value the carrying amounts are determined from discounted cash flow analysis. Impairment of financial assets At the balance sheet date, the Trust assesses whether any financial assets, other than those held at fair value through income and expenditure is impaired. Financial assets are impaired and impairment losses are recognised if, and only 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 cashflows 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 the income and expenditure account and the carrying amount of the asset is reduced through the use of an allowance account/bad debt provision. Page 11

12 2 Segmental analysis The Foundation Trust does not consider that it has reportable segments as defined by SSAP 25 : Segmental reporting. Page 12

13 3 Income from healthcare activities Mandatory services provided by customer type NHS Primary Care Trusts 287, ,692 Local Authorities 9,228 9,444 NHS Trusts 701 1,285 NHS Strategic Health Authorities NHS Foundation Trusts 1, Department of Health 3,584 3,463 Other NHS 2,776 1,462 Other Non-NHS 5,459 3, , , Non-mandatory clinical income Private patients - - Income from healthcare activities 311, , Private patient income The Trust's Terms of Authorisation have set the private patient cap as 0% 0% Actual proportion of private patient income to total patient related income 0% 0% Section 44 of National Health Service Act 2006 requires that NHS Foundation Trusts are set a private patient cap equivalent to the proportion of private patient income compared to total patient related income for the predecessor NHS Trust in 2002/3. Page 13

14 4 Other operating income Research and development 20,786 25,773 Education and training 13,761 13,183 Charitable and other contributions to expenditure 1,951 1,887 Transfer from donated asset reserve for depreciation, impairment and disposal of donated assets Non-patient care services to other bodies 1,666 2,110 Social care 2,016 2,712 Other income 2,314 6,434 43,269 52,955 Page 14

15 Notes 5 Operating expenses Operating expenses comprised: Directors' costs 1, Supplies & contracts: healthcare from non-nhs bodies 23,022 24,190 services from NHS bodies 6,740 8,817 drugs 10,732 10,710 other clinical 1, general 11,321 9,825 establishment 3,774 2,735 transport 1,509 1,500 premises 23,949 23,774 6 Staff costs: employed staff (excluding Directors) 196, ,317 agency, contract and seconded staff 45,757 21, Depreciation purchased assets 7,135 6,322 donated assets Fixed asset impairments: purchased assets 9,198 7, Reversal of fixed asset impairments purchased assets - (2,209) Auditors' remuneration: statutory audit other remuneration 7 - Other 10,920 8, , ,361 Operating expenses include: 18 Operating lease rentals : property 1, plant and equipment Limitations on auditor's liability - - Page 15

16 6 Employees Emoluments of employees comprised: Executive directors Other salaries and wages* 163, ,027 Social security costs* 12,882 14,444 Employer contributions to NHS Pensions Agency* 19,552 18, , ,188 Agency and contract staff 34,890 11,323 Seconded-in staff 10,867 10, , ,636 *The trust transferred the in-house staff bank to NHS Professional from June 2008 Temporary bank staff included in employee costs 2,563 15,960 The average monthly number of whole time equivalents was : No. No. 5,456 5,426 Page 16

17 7 Salary and pension entitlements of senior employees Comparative figures are for the five-month period to 31st March 2007 Salary Other remunerati on Real increase in pension at age 60 Lump sum at age 60 related to real increase in pension Total accrued pension at age 60 Lump sum at age 60 related to accrued pension Cash equivalent transfer value Real increase in cash equivalent transfer value Madeliene Long Chair Michael Barrett Non-Executive Director to 30th June < Chris Clare Non-Executive Director from 7th January <5 Robert Coomber Non-Executive Director and Chair of the Audit Committee from 1st May 2007 and 7th June 2007 respectively Patricia Connell-Julien Non-Executive Director Harriet Hall Non-Executive Director Sue Harvey Non-Executive Director to 31st August < Kumar Jacob Non-Executive Director Chair of the Audit Committee to 7th June Eric Taylor Non-Executive Director from 1st July * Stuart Bell Chief Executive ** , Martin Baggaley Medical Director from 1st August Gus Heafield Director of Finance and Corporate Governance Hilary McCallion Director of Nursing and Education Zoe Reed Director of Developing Organisation and Community David Roy Medical Director to 31st July (1) n/a n/a * Eric Taylor declined remuneration of 5k- 10k for the period to 31st March 2008 ** Stuart Bell transferred an existing pension fund into the NHS Pension Fund during 2008/09 There were no golden hello payments or payments made for compensation for losses of office to senior employees, nor did senior employees receive benefits-in-kind. A Cash Equivalent Transfer Value (CETV is the actuarially assessed capital value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member s accrued benefits and any contingent spouse s pension payable from the scheme. A CETV is a payment made by a pension scheme, or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which the disclosure applies. The CETV figures include the value of any pension benefits in another scheme or arrangement which the individual has transferred to the NHS pension scheme. They also include any additional pension benefit accrued to the member as a result of their purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated within the guidelines and framework prescribed by the institute and Faculty of Actuaries. Real Increase in CETV - This reflects the increase in CETV effectively funded by the employer. It takes account of the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period. Page 17

18 8 Net finance income Finance costs Unwinding of discount on provisions for liabilities and charges Payments made under The Late Payment of Commercial Debts (Interest) Act Finance income Interest receivable: Office of the Paymaster General (693) (495) National Loans fund (1,343) (2,206) Other (9) (9) (2,045) (2,710) Net finance income (1,948) (2,624) Page 18

19 9 Dividends Dividend provided in year 10,044 9,428 Dividend paid 10,044 9,428 Page 19

20 10 Intangible fixed assets Software licences 31 Mar Mar 2008 Cost or valuation 000's At 1st April At 31st March Amortisation At 1st April 2008 (20) (20) (20) At 31st March 2009 (20) (20) (20) Net book value at 1st April Net book value at 31st March Page 20

21 11 Tangible fixed assets Land and Plant and Assets under buildings equipment construction 31 Mar Mar 's Cost or valuation At 1st April ,355 17,209 8, , ,287 Revaluation (40,035) - - (40,035) 26,498 Additions 8,513 1,700 5,313 15,526 19,225 Reclassifications 12, (12,666) - - Impairments (9,198) - - (9,198) (7,487) Cumulative depreciation transferred after revaluation Disposals (1,638) (8,901) - (10,539) (1,922) At 31st March ,411 10, , ,601 Depreciation At 1st April 2008 (17,854) (12,152) - (30,006) (22,955) Depreciation for the year (6,542) (1,368) - (7,910) (7,178) Disposals - 8,892-8, Netted off cost/value following revaluation At 31st March 2009 (24,396) (4,628) - (29,024) (30,006) Net book value at 1st April ,501 5,057 8, , ,332 Net book value at 31 March ,015 5, , ,595 Land and Plant and Assets under buildings equipment construction 31 Mar Mar 2008 Donated assets 000's Net book value of assets, included above, funded by donation 18, ,423 20,334 Land and buildings Existing use Existing use Existing use Alternate use 31 Mar Mar 2008 Depreciated replacement cost Market value Cost Open market value Analysis of net book value: Freehold 90,403 84, , , ,438 Long leasehold 73,756 27,562 3, , ,581 Short leasehold , ,738 3,461 16, , ,501 Protected assets Land and Assets under Total Total Property assets may be protected under the terms of authorisation. buildings construction The value of protected assets is: Bethlem Royal Hospital* 93,270-93, ,074 Maudsley Hospital 83,064-83,064 90,825 Lambeth Hospital 60,679-60,679 64,271 Total protected assets 237, , ,170 * The Bethlem Royal Hospital is leased from the Corporation of London on a 749-year Agreement commencing in Rent is payable at 50p per annum. There were no disposals of protected assets There are no assets held under finance leases or hire purchase contracts Capital commitments Contracted for but not provided in the accounts 2,306 9,513 Page 21

22 12 Stocks and work in progress 31 Mar Mar 2008 Raw materials and consumables Page 22

23 13 Debtors Mar Mar 2008 Gross debtors Provision for bad debts Net debtors Net debtors Amounts receivable within one year: NHS debtors including accrued income 5,842 (597) 5,245 6,459 Other debtors 6,742 (2,026) 4,716 5,231 Prepayments Accrued income ,854 (2,623) 11,231 12,234 The balance at 1st April 2008 is net of a provision for bad debts of (2,820) Amounts due after more than one year: NHS debtors 1,098-1,098 1,097 1,098-1,098 1,097 Total debtors 14,952 (2,623) 12,329 13,331 Provision for impairment of individual debtors 31 Mar Mar 2008 At 1st April 2,820 2,717 Provision for debtors impairment 1,955 1,733 Debtors written off as uncollectible (14) - Debtors cancelled as incorrect (624) (543) Unused amounts released (1,514) (1,087) At 31st March 2,623 2,820 Aged analysis of impaired debtors 31 Mar Mar 2008 Less than three months Three to six months Over six months 1,722 2,217 2,546 2,625 Aged analysis of overdue unimpaired debtors 31 Mar Mar 2008 Less than three months 777 3,105 Three to six months 128 1,102 Over six months (130) ,565 Page 23

24 14 Creditors 31 Mar Mar 2008 Amounts falling due within one year: Payments received on account Tax and social security costs 4,357 4,644 Pensions relating to staff and directors 2,572 2,364 Other creditors 6,888 6,847 NHS creditors 12,043 9,636 Accruals 14,626 16,652 Deferred income 5,307 3,047 45,973 43,222 Amounts due after more than one year: - - Total creditors 45,973 43,222 Page 24

25 15 Provision for liabilities and charges 15.1 Early 15.2 Injury 15.3 Pay and 15.4 Legal 15.5 Property retirements benefits restructuring claims 31 Mar Mar 's At beginning of year: 2,920 1, ,067 6,317-7,519- Expenditure during the year (252) (54) (97) (296) - (699) (690) Arising during the year Released unused (128) - (325) (117) - (570) (1,281) Unwinding of discount Other movements At end of year 2,784 1, ,067 6,015 6,317 Expected timing of cash flows: Within one year ,103 1,349 Within two - five years 1, ,109 1,972 Over five years 1, ,803 2,996 At end of year : 2,784 1, ,067 6,015 6, Early retirements Provisions are made for the estimated additional pension costs arising from early retirements. These costs are directly incurred by the NHS Pensions Agency, as pension payments are made, and the Agency seeks reimbursement from the Trust each quarter. There are no provisions for early retirements for former directors Injury benefits Provision has been made for the expected value of the costs of NHS Injury Benefits claims. Claims are assessed and paid directly by the NHS Pensions Agency and reimbursement is sought from the Trust quarterly Pay and restructuring Provisions remain for the estimate of costs and arrears arising from the introduction of Agenda for Change terms and conditions of pay and employment. These changes are effective from 1st October Legal claims The Foundation Trust provides for the estimated excess payments due to the NHSLA under the Liability for Third Parties insurance scheme resulting from non-clinical third party claims. The full costs of such claims is accounted for by the NHSLA. The Trust also provides against other legal claims 15.5 Property Provision is made for the outstanding repairing and reinstatement obligation arising from leasehold and rental properties 15.6 Clinical negligence The Foundation Trust belongs to the Clinical Negligence Scheme for Trusts (CNST) and pays an annual insurance premium to the NHS Litigation Authority (NHSLA). Under the term of this agreement, since 1 April 2002, financial responsibility for clinical negligence claims transferred to the NHSLA and the liability for claims is provided in their Accounts. At the 31st March 2009 the NHSLA were providing 676k on behalf of the Foundation Trust. Contingent liabilities for clinical negligence and other legal claims are shown in note 19 Page 25

26 16 Capital and Reserves (Taxpayers Equity) 31 Mar Mar Movements in Public Dividend Capital Public dividend capital at 1 April , ,081 Received during year - 14,129 Repaid during the year - (1,930) Public dividend capital at 31 March , ,280 Revaluation reserve Donated asset Income & expenditure reserve reserve 31 Mar Mar Movements on reserves 000's At 1 April ,050 20,334 (117) 183, ,673 Transfer from income and expenditure account - - (6,669) (6,669) 5,161 Reversal of fixed asset impairments (2,209) Surplus (deficit) on other revaluations (29,278) - - (29,278) 26,498 Surplus (deficit) on indexation of fixed assets (9,621) (1,136) (10,757) - Depreciation of donated assets - (775) - (775) (856) Realised gains (losses) (996) At 31March ,155 18,423 (5,790) 135, ,267 Page 26

27 17 Cash flow statement Net cash inflow from operating activities Operating surplus 1,297 11,760 Non-cash items: depreciation and amortisation 7,910 7,178 impairment of tangible fixed assets 9,198 7,487 reversal of tangible fixed assets - (2,209) transfer from donation reserve in respect of depreciation on donated assets (775) (856) amortisation of deferred capital grant (112) (112) Changes in operating working capital: decrease in stocks (39) 109 decrease in debtors 970 1,070 (decrease) in creditors 3,996 7,514 (decrease) in provisions for liabilities and charges (390) (1,288) Net cash inflow from operating activities before restructuring costs 22,055 30,653 Net cash inflow from operating activities 22,055 30, Reconciliation of net cash flow to movement in net funds Increase in cash during the period (803) 16,325 Change in net funds resulting in cash flows (803) 16,325 Movement in net funds in the period (803) 16,325 Net funds at 1st April ,873 36,548 Net funds at 31st March ,070 52, Mar 2008 Cash changes 31 Mar Mar Analysis of changes in net funds Cash at bank held with Office of Paymaster General 52,796 (802) 51,994 52,796 Cash at bank held within commercial banks 5 (3) 2 5 Cash in hand ,873 (803) 52,070 52, Prudential borrowing limit The NHS foundation trust is required to comply and remain within a prudential borrowing limit. This is made up of two elements: the maximum cumulative amount of long-term borrowing. This is set by reference to the five ratio tests set out in Monitor s Prudential Borrowing Code. The financial risk rating set under Monitor s Compliance Framework determines one of the ratios and therefore can impact on the long term borrowing limit. the amount of any working capital facility approved by Monitor. Further information on the NHS Foundation Trust Prudential Borrowing Code and Compliance Framework can be found on the website of Monitor, the Independent Regulator of Foundation Trusts. 31 Mar Mar 2008 Total long-term borrowing limit set by Monitor 73,400 71,400 Working capital facility limt approved by Monitor* 25,000 25,000 Prudential borrowing limit 98,400 96,400 Actual long-term borrowing in-year - - Actual borrowing against working capital facility - - Remaining Prudential borrowing limit 98,400 96,400 *Actual working capital facility 15,000 25,000 Prudential borrowing code ratios Limit Debt to Capital Ratio 25% Maximum 0% 0% Dividend Cover 1 Minimum Interest Cover 3 Minimum - - Debt Service Cover 2 Minimum - - Debt Service to Revenue 3% Maximum 0% 0% Page 27

28 18 Lease commitments Finance leases The Trust does not hold any finance leases Operating leases Minimum annual lease payment commitments under operating leases were as follows: Property Plant and equipment Total Total Mar 2009 Mar 2008 Mar 2009 Mar 2008 Mar 2009 Mar 2008 On lease expiring: Within one year Between one and five years After five years , , Page 28

29 19 Contingent liabilities Clinical Non-clinical negligence negligence 31 Mar Mar 2008 Contingent liabilities Amount expected to be recoverable Net value of contingent liabilities Page 29

30 20 Related party transactions South London and Maudsley NHS Foundation Trust is a body corporate established by order of the Secretary of State for Health. During the period none of the Board members, the Members Council or members of key management staff or parties related to them has undertaken any material transactions with the Trust. Madeliene Long, Chair, is a member of Lewisham Council. The Trust received 2.7m income ( 2.5m 2007/08) from Lewisham Council during the period for services provided, and expended 1.4m ( 1.0m 2007/08) for services received. Madeliene Long is also a member of the Members Council of Guy's and St Thomas' NHS Foundation Trust. Stuart Bell, Chief Executive, is a stakeholder member of the Board of Governors of Kings College Hospital NHS Foundation Trust. The Department of Health is regarded as a related party. During the period the Trust has had a significant number of material transactions with the Department, and with other entities for which the Department is regarded as the parent. The Trust received the following income for health care and other service from the main local commissioners; Lambeth 91,724 83,458 Southwark 64,737 59,632 Lewisham 65,629 62,997 Croydon 42,870 37, , ,461 The Trust has transacted with a number other PCTs, NHS Trusts, NHS Foundation Trusts including Greenwich PCT, Bromley PCT, Bexley PCT, as well as the London Strategic Health Authority and the Department of Health. In addition the Trust has had a number of transaction with other government departments and central and local government bodies and with Kings College London The Trust has also received revenue payments of 1.1m from the South London and Maudsley NHS Trust Charitable Funds for which the Trust Board are Corporate Trustees, and from Guys and St Thomas' Charitable Foundation. Page 30