Statement / note Adjustments since draft submission Affecting the Accounts

Transcription

1 Statement / note Adjustments since draft submission Affecting the Accounts Foreword diff act ref done n/a StRGL delete 'indexation' from line on donated assets revaluations done n/a Accounting polices auditors requirement - additional note re going concern done n/a Accounting polices delete marked up changes done n/a Accounting polices correct font difference on pension para done n/a Accounting polices add note stating DV carried out valuations done n/a Accounting polices delete ref to PFI done n/a Other income Include note of Other income, and prior-year done done Private patient income diff act ref done n/a Operating expenses 7/8 split on derpeciation done n/a Employees split bank from agency n/a done Sen emp Include Eric Taylor and note done n/a Sen emp pension disclosures done n/a Sen emp Kumar and Bob chair of audit committee done n/a Fixed assets lease split done done Debtors > 1 year 5k formula mistake on gross debtors not effecting net debtors c/fd to balance sheet done n/a Creditors NHS balances move shared services 400k creditor against NHS London s/b Lambeth PCT n/a done Provisions replace 2007 with 2008 narrative on Clinical neg done n/a Provisions transactions on property done done Sen emp remove start date for S Harvey and H Hall done n/a Sen emp restate S Bell previous years for NHSPA errors done n/a Capital commitments add Lambeth ward block conversion as separate item done n/a Reserves amend line narrative to included "reversal of " with "impairments" done n/a PDC additional explanatory narrative added done n/a Accounting polices revised NHS pension note (issued to NHS Trusts on 3rd June, and not to FTs) done n/a Creditors remove Lambeth PCT deferred income from NHS creditors to deferred income 1.4m done done Affecting the FTCs

2 Foreword to the accounts South London and Maudsley NHS Foundation Trust These accounts, for the year ending 31st March 2008, have been prepared in accordance with paragraphs 24 and 25 of Schedule 7 to the National Health Service Act Page 2

3 Income and Expenditure Account For the year ended 31 March 2008 Nov-Mar Notes Income from continuing operations 3 From healthcare activities 284, ,566 4 Other operating income 52,955 21, , ,027 Expenditure on continuing operations 5 Operating expenses (325,361) (130,379) Operating surplus from continuing operations 11,760 4,648 Profit on disposal of fixed assets Surplus before interest and taxation 11,965 4,648 8 Finance costs (86) (35) 8 Finance income 2, Surplus before taxation 14,589 5,199 Taxation - - Surplus for the financial period after taxation 14,589 5,199 9 Dividends payable to the Government (9,428) (3,452) 16 Retained surplus for the financial period 5,161 1,747 The accompanying notes and statement of accounting policies form part of this income and expenditure account. Page 3

4 Statement of total recognised gains and losses Reconciliation of movements in Government funds For the year ended 31 March 2008 Nov-Mar Statement of total recognised gains and losses Notes Surplus for the financial year 14,589 5,199 Fixed asset impairment losses offset against past revaluation and indexation (2,209) Unrealised surplus on the revaluation of fixed assets and investments 26, Increase (decrease) due to the revaluation of donated assets (197) Decrease due to the depreciation of donated assets (856) (377) Total gains and losses recognised in the period 38,022 5,034 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 38,022 5, Decrease in Donated asset reserve 1, Dividends payable to Government (9,428) (3,452) 16.1 New Public Dividend Capital received 14,129 29, Public Dividend Capital repaid (1,930) - Net increase in Government funds 41,846 31,351 Government funds at beginning of the year 300, , Government Grant reserves at beginning of the year - 1, Prior period adjustments resulting from Foundation Trust status: i transfer of Government grants to creditors: deferred income - (992) ii transfer of Government grants net excess to Income and expenditure reserve - (17) iii transfer of impairments from the Revaluation reserve to Income and expenditure reserve - 11,045 iv correction to realised gains from the Revaluation reserve to Income and expenditure reserve v transfer of Other Reserves to Income and expenditure reserve - 1,668 vi transfer of ii, iii, iv, and v (above) to the Income and expenditure reserve - (13,567) Government funds at end of the year 342, , Donated asset reserve 20,334 21, , ,754 The accompanying notes and statement of accounting policies form part of this reconciliation. Page 4

5 Balance Sheet As at 31 March 2008 Notes 31 Mar Mar 2007 Fixed Assets 10 Intangible assets Tangible assets 345, ,332 Investments , ,332 Current Assets 12 Stocks and work in progress Debtors - due after one year 1,097 1, Debtors - due within one year 12,234 13,333 Short-term investments Cash at bank and in hand 52,873 36,548 66,491 51,379 Current Liabilities 14 Creditors : amounts falling due within one year (43,222) (38,438) Net Current Liabilities 23,269 12,941 Total Assets less Current Liabilities 368, ,273 Non-Current Liabilities Creditors : amounts falling due after more than one year Provisions for liabilities and charges (6,317) (7,519) (6,317) (7,519) Total assets employed 362, , Capital and Reserves (Taxpayers Equity) 16.1 Public dividend capital 179, , Revaluation reserve 163, , Donated asset reserve 20,334 21, Income and expenditure reserve (117) (9,564) Total Taxpayers Equity 362, ,754 Signed on behalf of the Board on June 2008 Chief Executive The accompanying notes and statement of accounting policies form part of this balance sheet. Page 5

6 Cash Flow Statement For the year ended 31 March 2008 Nov-Mar Notes Net cash inflow from operating activities 30,653 10,772 Returns on investments and servicing of finance Interest received 2, Net cash inflow from returns on investments and servicing of finance 2, Capital expenditure Purchases of tangible fixed assets (21,751) (8,289) Disposals of tangible fixed assets 1, Net cash (outflow) from capital expenditure (19,843) (8,197) 9 Dividend paid (9,428) (4,142) Net cash (outflow) before use of liquid resources and financing 4,086 (951) Financing Public Dividend Capital received 14,129 29,392 Public Dividend Capital repaid (1,930) - Capital received from other grants 40 - Net cash inflow from financing 12,239 29,392 Increase in cash during the year 16,325 28,441 The accompanying notes and statement of accounting policies form part of this cash flow statement. Page 6

7 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 2007/08 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 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. Page 7

8 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 The valuations are carried out primarily on the basis of depreciated replacement cost 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. For non-operational properties including surplus land, the valuations are carried out at open market value. Additional alternative open market value 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. 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. 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. Page 8

9 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. 2.0 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 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. Page 9

10 1.23 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 is 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 two-year 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. 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. Page 10

11 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 separate note 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 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 Public Dividend Capital (PDC) and PDC Dividend Public dividend capital (PDC) is a type of public sector equity finance. 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 The Trust will commonly have the following financial assets and liabilities: assets: investments, long-term debtors and accrued income, short-term debtors and accrued income; and liabilities: loans and overdrafts, long-term creditors, long-term provisions arising from contractual arrangements, short-term creditors, short-term provisions arising from contractual arrangements 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 Nov-Mar 3 Income from healthcare activities Mandatory services provided by customer type NHS Primary Care Trusts 263, ,113 Local Authorities 9,444 3,470 NHS Trusts 1, NHS Strategic Health Authorities NHS Foundation Trusts Department of Health 3,463 1,420 Other NHS 1, Other Non-NHS 3, , , Non-mandatory clinical income Private patients - - Income from healthcare activities 284, , 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 Nov-Mar 4 Other operating income Research and development 25,773 11,302 Education and training 13,183 5,214 Charitable and other contributions to expenditure 1, Transfer from donated asset reserve for depreciation, impairment and disposal of donated assets Non-patient care services to other bodies 2,110 1,356 Social care 2, Other income 6,434 1,896 52,955 21,461 Page 14

15 Notes Nov-Mar 5 Operating expenses Operating expenses comprised: Directors' costs Supplies & contracts: healthcare from non-nhs bodies 24,190 12,061 services from NHS bodies 8,817 1,202 drugs 10,710 4,443 other clinical general 9,825 4,615 establishment 2,735 1,556 transport 1, premises 23,774 9,446 6 Staff costs: employed staff (excluding Directors) 199,317 80,614 agency, contract and seconded staff 21,448 8, Depreciation purchased assets 6,322 2,742 donated assets Fixed asset impairments: purchased assets 7, Reversal of fixed asset impairments purchased assets (2,209) - Auditors' remuneration: statutory audit Other 8,661 2, , ,379 Operating expenses include: 18 Operating lease rentals : property plant and equipment Page 15

16 6 Employees Nov-Mar Emoluments of employees comprised: Executive directors Other salaries and wages 166,027 66,507 Social security costs 14,444 5,814 Employer contributions to NHS Pensions Agency 18,846 8, ,188 80,971 Agency and contract staff 11,323 4,780 Seconded-in staff 10,125 4, ,636 89,867 The average monthly number of whole time equivalents was : No. No. 5,426 5,318 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 remuneration Real increase in Lump sum at Total accrued pension at age age 60 related to pension at age real increase in pension Lump sum at age 60 related to accrued pension Cash equivalent transfer value Real increase in cash equivalent transfer value Madeliene Long Chair Madeliene Long Chair Michael Barrett Non-Executive Director to 30th June < Michael Barrett Non-Executive Director Chris Clare Non-Executive Director from 7th January < Robert Coomber Non-Executive Director from 1st May 2007 and Chair of the Audit Committee from 7th June Patricia Connell-Julien Non-Executive Director Patricia Connell-Julien Non-Executive Director Harriet Hall Non-Executive Director Harriet Hall Non-Executive Director Sue Harvey Non-Executive Director to 31st August < Sue Harvey Non-Executive Director Kumar Jacob Non-Executive Director and Chair of the Audit Committee to 7th June 2007 Kumar Jacob Non-Executive Director and Chair of the Audit Committee Eric Taylor Non-Executive Director from 1st July * George Szmukler Non-Executive Director to 31st December < ,257 9 Margaret Croft Non-Executive Director to 30th November < Stuart Bell Chief Executive Stuart Bell Chief Executive 2007 ** Martin Baggaley Medical Director from 1st August Gus Heafield Director of Finance and Corporate Governance Gus Heafield Director of Finance and Corporate Governance Hilary McCallion Director of Nursing and Education Hilary McCallion Director of Nursing and Education Zoe Reed Director of Developing Organisation and Community Zoe Reed Director of Developing Organisation and Community David Roy Medical Director to 31st July (1) n/a n/a David Roy Medical Director , * Eric Taylor has declined remuneration of 5k- 10k for the period to 31st March 2008 ** 2007 Pension comparatives for Stuart Bell have been restated following reassessment by the NHS Pensions Agency 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 Nov-Mar 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 (495) (106) National Loans fund (2,206) (480) Other (9) - (2,710) (586) Net finance income (2,624) (551) Page 18

19 9 Dividends Nov-Mar Accrued dividend Dividend provided in year 9,428 3,452 Dividend paid 9,428 4,142 Page 19

20 10 Intangible fixed assets Software licences 31 Mar Mar 2007 Cost or valuation 000's At 1st April At 31st March Amortisation At 1st April 2007 (20) (20) (20) At 31st March 2008 (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 ,171 14,400 22, , ,089 Revaluation 26, , Additions 6,015 1,286 11,924 19,225 11,986 Reclassifications 24,988 1,650 (26,638) - - Impairments (7,487) - - (7,487) - Cumulative depreciation transferred after revaluation Disposals (1,795) (127) - (1,922) - At 31st March ,355 17,209 8, , ,287 Depreciation At 1st April 2007 (11,879) (11,076) - (22,955) (19,836) Depreciation for the period (5,975) (1,203) - (7,178) (3,119) Disposals Netted off cost/value following revaluation At 31st March 2008 (17,854) (12,152) - (30,006) (22,955) Net book value at 1st April ,292 3,324 22, , ,253 Net book value at 31 March ,501 5,057 8, , ,332 Land and Plant and Assets under buildings equipment construction 31 Mar Mar 2007 Donated assets 000's Net book value of assets, included above, funded by donation 20, ,334 21,387 Land and buildings Existing use Existing use Existing use Alternate use 31 Mar Mar 2007 Depreciated replacement cost Market value Cost Open market value Analysis of net book value: Freehold 124,269 68, , , ,228 Long leasehold 77,044 40,928 1, ,581 83,568 Short leasehold , , ,977 2,083 19, , ,292 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* 108,304 1, ,074 99,796 Maudsley Hospital 90,825-90,825 79,318 Lambeth Hospital 59,163 5,108 64,271 56,081 Total protected assets 258,292 6, , ,195 * 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 are no assets held under finance leases or hire purchase contracts Capital commitments Bethlem Royal Hospital forensic mental health development 529 9,391 Lambeth Hospital ward conversion 4, Other capital commitments 4, Contracted for but not provided in the accounts 9,513 10,398 Page 21

22 12 Stocks and work in progress 31 Mar Mar 2007 Raw materials and consumables Page 22

23 13 Debtors Mar Mar 2007 Gross debtors Provision for bad debts Net debtors Net debtors Amounts receivable within one year: NHS debtors including accrued income 7,464 (1,005) 6,459 6,484 Other debtors 7,046 (1,815) 5,231 6,661 Prepayments and other accrued income ,054 (2,820) 12,234 13,333 The balance at 1st April 2007 is net of a provision for bad debts of (2,717) Amounts due after more than one year: NHS debtors 1,097-1,097 1,102 1,097-1,097 1,102 Total debtors 16,151 (2,820) 13,331 14,435 Provision for impairment of individual debtors 31 Mar Mar 2007 At 1st April 2,717 3,315 Provision for debtors impairment 1,733 1,039 Debtors written off as uncollectible Unused amounts released (1,630) (1,637) At 31st March 2,820 2,717 Aged analysis of impaired debtors 31 Mar Mar 2007 Less than three months Three to six months Over six months 2,217 2,321 2,625 3,279 Aged analysis of overdue unimpaired debtors 31 Mar Mar 2007 Less than three months 3,105 4,539 Three to six months 1,102 1,383 Over six months ,565 6,466 Page 23

24 14 Creditors 31 Mar Mar 2007 Amounts falling due within one year: Payments received on account Tax and social security costs 4,644 4,583 Pensions relating to staff and directors 2,364 2,271 Other creditors 6,847 7,974 NHS creditors 9,636 6,050 Accruals 16,652 15,263 Deferred income 3,047 2,165 43,222 38,438 Amounts due after more than one year: - - Total creditors 43,222 38,438 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 period: 3,188 1,186 1, ,067 7,519-8,354- Expenditure during the period (247) (51) (317) (49) (26) (690) (254) Arising during the period Released unused (160) (117) (981) - (23) (1,281) (387) Unwinding of discount Other movements (791) At end of year 2,920 1, ,067 6,317 7,519 Expected timing of cash flows: Within one year ,349 2,006 Within two - five years 1, , Over five years 1, ,996 4,526 At end of year : 2,920 1, ,067 6,317 7, 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 2008 the NHSLA were providing 0.9m against seven claims 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 , ,689 Received during year 14,129 29,392 Repaid during the year (1,930) - Public dividend capital at 31 March , ,081 Revaluation reserve Donated asset Income & expenditure reserve reserve 31 Mar Mar Movements on reserves 000's At 1 April ,850 21,387 (9,564) 154, ,083 Prior period adjustment (992) At 1 April 2007 restated 142,850 21,387 (9,564) 154, ,091 Transfer from income and expenditure account - - 5,161 5,161 1,747 Reversal of fixed asset impairments (2,209) - - (2,209) - Surplus on other revaluations 26,695 (197) - 26, Depreciation of donated assets - (856) - (856) (377) Realised gains (losses) (1,073) - 1, Other movements (3,213) 3, At 31March ,050 20,334 (117) 183, ,673 Page 26

27 17 Cash flow statement Net cash inflow from operating activities Nov-Mar Operating surplus 11,760 4,648 Non-cash items: depreciation and amortisation 7,178 3,119 impairment of tangible fixed assets 7,487 - reversal of tangible fixed assets (2,209) - transfer from donation reserve in respect of depreciation on donated assets (856) (377) amortisation of deferred capital grant (112) (46) Changes in operating working capital: decrease in stocks decrease in debtors 1,070 10,414 (decrease) in creditors 7,514 (6,185) (decrease) in provisions for liabilities and charges (1,288) (870) Net cash inflow from operating activities before restructuring costs 30,653 10,772 Net cash inflow from operating activities 30,653 10,772 Nov-Mar 17.2 Reconciliation of net cash flow to movement in net funds Increase in cash during the period 16,325 28,441 Change in net funds resulting in cash flows 16,325 28,441 Movement in net funds in the period 16,325 28,441 Net funds at 1st April ,548 8,107 Net funds at 31st March ,873 36, Mar 2007 Cash changes 31 Mar Mar Analysis of changes in net funds Cash at bank held with Office of Paymaster General 36,485 16,311 52,796 36,485 Cash at bank held within commercial banks Cash in hand ,548 16,325 52,873 36, 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 2007 Total long-term borrowing limit set by Monitor 71,400 63,200 Working capital facility 25,000 25,000 Prudential borrowing limit 96,400 88,200 Actual long-term borrowing in-year - - Actual borrowing against working capital facility - - Remaining Prudential borrowing limit 96,400 88,200 Prudential borrowing code ratios 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% Limit 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 Total Mar 2008 Mar 2007 Mar 2008 Mar 2007 Mar 2008 Mar 2007 Nov 2006 On lease expiring: 000's Within one year Between one and five years After five years , ,401 1,089 Page 28

29 19 Contingent liabilities Clinical Non-clinical negligence negligence 31 Mar Mar 2007 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 2.5m income from Lewisham Council during the period for services provided, and expended 1.0m for services received. 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 main local commissioners are Lambeth PCT, Southwark PCT, Lewisham PCT and Croydon PCT from whom the Trust received 243m for health care and other services. 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 from the South London and Maudsley NHS Trust Charitable Funds for which the Trust Board are Corporate Trustees. Page 30

31 21 Third Party Assets 31 Mar Mar 2007 Cash at bank and in-hand held on behalf of patients excluded from cash reported in the accounts 1, Page 31

32 22 Financial instruments FRS 13, Derivatives and Other Financial Instruments, requires disclosure of the role that financial instruments have had during the period in creating or changing the risks an entity faces in undertaking its activities. Because of the continuing service provider relationship that the Foundation Trust has with local Primary Care Trusts and the way those Primary Care Trusts are financed, the Foundation trust is not exposed to the degree of financial risk faced by business entities. Also, financial instruments play a much more limited role in creating or changing risk than would be typical of the listed companies to which FRS 13 mainly applies. The Foundation trust has limited powers to borrow or invest surplus funds and financial assets and liabilities are generated by day-to-day operational activities rather than being held to change the risks facing the NHS trust in undertaking its activities. As allowed by FRS 13, debtors and creditors that are due to mature or become payable within 12 months from the balance sheet date have been omitted from all disclosures other than the currency profile. Liquidity risk The Foundation Trust s net operating costs are incurred under annual service agreements with local Primary Care Trusts, which are financed from resources voted annually by Parliament. The Trust also largely finances its capital expenditure from funds made available from Government under an agreed limit. South London and Maudsley NHS Foundation Trust is not, therefore, exposed to significant liquidity risks. Interest-rate risk 100% of the Trust s financial assets and liabilities carry nil or fixed rates of interest. South London and Maudsley NHS Foundation Trust is not, therefore, exposed to significant interest-rate risk. All financial assets and liabilities are held in sterling. The following two tables show the interest rate profiles of the Trust's financial assets and liabilities. Weighted average interest rate Weighted average fixed period Weighted average term 31 Mar Mar 2007 Financial assets % years years Fixed rate 2.2% n/a n/a 1,097 1,102 Gross financial assets 1,097 1,102 Financial liabilities Fixed rate 2.2% n/a n/a 3,989 4,374 Non-interest bearing n/a n/a * 179, ,081 Gross financial liabilities 183, ,455 * Non-interest bearing liabilities comprises public dividend capital which is of unlimited term Foreign currency risk The trust has negligible foreign currency income and expenditure Fair values Book value Book value Financial assets Cash 52,873 36,548 Debtors due after more than one year (note 1) 1,097 1,102 Total financial assets 53,970 37,650 Financial liabilities Creditors due after more than one year (note 2) - - Provisions under contract (note 3) 6,317 7,519 Public dividend capital 179, ,081 Total financial assets 185, , Debtors due after one year reflect agreements with commissioners to cover provisions, and their related interest charge/unwinding of discount. Fair value is not significantly different from book value. 2. Creditors due after more than one year comprise finance lease creditors. To obtain fair value, cash flows have been discounted at prevailing market interest rates for finance leases for a similar term. 3. Provisions under contract fair value is not significantly different from book value since, in the calculation of book value, where applicable, move to 3.5% the expected cash flows have been discounted by the Treasury discount rate of 2.2% in real terms. Page 32