THE UNIVERSITY OF NOTTINGHAM STUDENTS UNION. Report and Consolidated Financial Statements. Year ended 31 July 2014

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1 THE UNIVERSITY OF NOTTINGHAM STUDENTS UNION Report and Consolidated Financial Statements Year ended 31 July Company Registration Number: Charity Registration Number: Charity Registration Number:

2 Contents for the year ended 31 July Page: Company information 1 Report of the Trustees 2 Report of the auditor 12 Consolidated statement of financial activities 14 Balance sheets 15 Consolidated cash flow statement 16 Notes forming part of the financial statement 17

3 Company Information for the year ended 31 July Trustees Sabbatical Officers to 30 th June from 1 st July President E. McWilliam H.Copson Education Officer D. Karzunina A. Bevis-Knowles Welfare Officer M. Dore C. Averill Sports Officer T. Hicks K. Madhani Non Executive Principal Address A Graham C Harvey SJ Spalding N Ratcliffe Portland Building University Park Nottingham NG7 2RD Company Number Charity Registration Number Company Secretary Auditor Bankers Solicitors M Brown Baker Tilly UK Audit LLP Suite A, 7th Floor City Gate East Toll House Hill Nottingham Nottinghamshire NG1 5FS NatWest Corporate 8-10 Great Tower Street London EC3P 3HX Browne Jacobson 44 Castle Gate Nottingham NG1 7BJ 1

4 Report of the Trustees for the year ended 31 July The Trustees present their report together with the audited consolidated financial statements for the year ended 31 July and confirm the latter comply with the requirements of the Charities Act and the Charities SORP This trustees report is a director s report as required by S415 of the Companies Act All trustees are directors of the charitable company. Trustees who served during the period are listed on the contents page. Governance Governing document The Students Union is governed by the Memorandum and Articles of Association. The Students Union is a company limited by guarantee and does not have any share capital. The guarantors are the members of the Students Union, being registered students at the University of Nottingham as defined in the Articles of Association. Recruitment and training of Trustees The Trustee Board consists of four sabbatical officer trustees and four external trustees. The President (& Chair) is appointed to serve for one year following a secret cross-campus ballot of the members. The three other Officer Trustees are selected from the remaining 6 officers elected following a secret cross-campus ballot of its members. They may serve for a second term if they are re-elected as an Officer of the Union. Our External Trustees are appointed for a term of four years. The appointment is made by Union Council, following external recruitment and the recommendation of an appointments panel delegated by the Trustee Board, and they may serve for a total of two terms. In /14 the Board undertook a review of its structure and membership. An externally supported recruitment process was undertaken to appoint a new external trustee. In this financial year, the Union s Student Council passed a motion to allow up to four student trustees to be appointed to the Board. Work on the selection process was completed in /14 and this will be phased in in the next academic year, with two students appointed in Autumn and the full quota of four students appointed from Autumn New trustees receive a full induction into the work of the Students Union and the roles and responsibilities of a trustee. Each year the sabbatical officer trustees receive a briefing on the role, responsibilities, and legal duties as a Trustee. They also receive specialist training tailored to the needs of officer trustees. Throughout their term, officer trustees have access to an external trustee mentor and specialist help via the National Union of Students. In Autumn, the trustees will be undertaking a review of their governance and Board performance, following which changes or enhancements may be made to improve the Board s leadership and the overseeing of the charity. Risk management The trustees have a Risk Management Matrix which is reviewed annually. Following the completion of the Union s new five year strategy a full review of the Matrix will be carried out in the first half of -15. Public benefit The trustees have considered this matter, in conjunction with the guidance contained in the Charity Commission s general guidance on public benefit, and have concluded that as a registered charity and Students Union, our work directly supports and benefits the 34,000+ students registered to study at the University of Nottingham in the UK. In planning our work we test that the primary goal of all our activities are linked to our core aims and therefore are for the direct benefit of our member students. 2

5 Report of the Trustees for the year ended 31 July (continued) Governance (continued) Related parties The Education Act 1994 lays down the statutory duty of the University of Nottingham to take such steps as are reasonably practical to ensure the Students Union operates in a fair and democratic manner and is held to appropriate account for its finances. The Students Union works alongside the University of Nottingham to ensure that its affairs are properly conducted and that the needs of the University of Nottingham Students Union members are met. The formal relationship between the University and the Union is governed by a memorandum of understanding which is reviewed annually. The University of Nottingham is the owner of premises which it lets to the Students Union under a licence agreement. Under the licence, the University provides services such as power, cleaning, custodial services and landlord s repairs. There is a notional licence fee but the provision of this licence has been valued as a service in kind. The University provides IT network and hosting services, including and web servers, and payroll services, all of which have been valued as a service in kind. The University also lets premises for trading activities for which a commercial rent and service charges are paid. In addition to the provision of space, the University carries out alterations and other maintenance of the premises, cleaning and portering for which it charges. The value of the services in kind has been included and is shown within the financial statements. The University of Nottingham Students Union is the owner of UNU Services Limited, a company limited by shares, and as such the accounts of the two companies are consolidated. The Students Union provides management services to UNU Services Limited for which a charge is made. UNU Services Limited manages the food operation for the Students Union. Other shared services are supplied at cost. The taxable profit of UNU Services Limited is donated to the Students Union under gift aid. STRATEGIC REPORT Our Work in -14 Purpose The University of Nottingham Students Union exists to enable every student at the University of Nottingham to meet their aspirations, fulfil their potential and have the most incredible time at University. Context In July, the Board signed off the Union s new 5 year strategy and the following month the University confirmed a significant increase in its financial support to the Union to underpin the first 3 years of the strategy. Our Strategy Our aim is to be where students are to be at the heart of student life, representing, supporting, involving and developing all students when they need us and doing it brilliantly. Our vision of success in five years time is that students will be masters of their time at University, shaping their opportunities, learning and development. They will be a fully integrated part of the communities to which they belong and will be heard and effect the change they want. Our strategic goals are: Goal 1. Goal 2. Goal 3. Goal 4. Goal 5. Goal 6. Goal 7: Initiating the Strategy Create a great academic experience for every student Enhance the career prospects of our students Support student wellbeing - be there when students need us Enable students to have the most incredible time at University Put students at the heart of our work - do it their way Establish our Union as a top 10 Students Union 3

6 Report of the Trustees for the year ended 31 July (continued) Our Work in -14 (continued) Goal 1. Initiating the Strategy Having received approval of the strategy in July and confirmation of the University s funding support for its first three years, the Union started -14 by completing its business planning and budgeting. The first two years of the strategy have a series of funded projects running in parallel to the existing day to day business of the Union for which an additional 750,000 support has been provided by the University. The aim is that over the first three years transformation to our services, processes, facilities and culture will gradually enhance the activities, services and support students use and the way in which they are supported. By the end of October the full year 1 plan was in place including the recruitment plan for the additional resources that would be required for the year. The remainder of this report provides an overview of our strategic work programmes and the progress and performance the University of Nottingham Students Union has made in -14. Goal 2. To create a great academic experience The outcome we want to achieve is that over 90% of students in every School say they are happy with their teaching and learning experience. In year 1 we have initiated four major work programmes to support this top priority for students: A. Teaching & Learning in the 21 st Century: Make sure the way students are taught and the learning resources they use are modern and relevant in the 21 st century. B. Feedback: Work with students to improve the feedback received on their assessments. C. Academic Community: Work with students to improve the academic support and course-based activities within their school. D. Union for Postgrads: Create a new offer within the Union to give postgraduates access to great academic and personal support tailored to their studies. Some of our notable successes this year include: Greenfield Medical Library: The University's development and remodelling of the Queen's Medical Centre spaces created considerable concern from medical students. Through close support for student representatives in this area, the Union were able to manage these concerns and relay important messages to the University's Estates department. This meant that the ultimate turnout was positive for students with additional space identified for silent study. University Staff Oscars: This year we received over 560 nominations, with at least one nomination for each school for the first time. Postgraduate Focus: The movement of the Postgraduate Officer role from a social focus to educational representative has meant that traditional models for postgraduate social engagement have naturally receded. The Union achieved its 75% target for appointed Postgraduate course reps and exceeded the target for training 57% (target 50%). In the place of the former PGSA structure a new system where groups of postgraduate students can come together to bid for funding to develop their own activities has been established and has been well received. Teaching Facilities: Working with school and course reps and University departments successes for students include the equipping of over 250 lecture rooms with lecture recording facilities; establishing a second hand book service within Philosophy; secured the upgrade/increase of computing in a number of the University computer rooms including the Farm Demonstration Centre at Sutton Bonington and successfully lobbied the University to provide the facility to enable printer credits to be able to be topped up on line. Course Based Societies: A new development co-ordinator position was established in the year to support a two year initiative to develop deeper links with societies in Schools and departments and provide them with additional training and support. Improved financial management resulting in no society debt for these groups has been an early success. 4

7 Report of the Trustees for the year ended 31 July (continued) Our Work in -14 (continued) Goal 3. To enhance the career prospects of all students The outcome we want to achieve: Over the five years we want 30,000 students to have participated in a personal development activity that improves their life and/or career skills We have grouped our work for this goal into four work programmes: A. CV building: Help students link their Union experiences and activities to their CV. B. Employing great students: Develop employment opportunities within the Union to offer more students parttime and internship opportunities. C. Volunteering and your career: Support up to 6,000 students annually to complete a relevant and valuable volunteering opportunity. D. Student Innovation & Enterprise: Set up a new student innovation and enterprise project for students to develop ideas and bid to run services. Some of the highlights for the year include: Supporting 2,330 students to complete a volunteering opportunity and a further 1,409 students were involved in volunteering through their volunteering society. Smashing our target for students taking up a training or development opportunity with over 5,000 student benefitting (the target was 1,500). Continuing to employ over 120 student staff. 107 students benefitted from a CV workshop and/or 1:1 consultation and 69 students completed accreditation under the Nottingham Advantage Award. A few of the more detailed initiatives in this area included: Student Staff: As well as increasing the number of students the Union employs, the type of opportunities available has developed. The Shop successfully introduced student shift supervisors at the start of the year and the Bars team has now taken a decision to implement a similar model for the coming year. Other new roles include Brand Ambassadors supporting Insight and Marketing and a plan to host the Officer s space with student staff. The Training team have established a new training support plan for student staff and with the support of an internship position. The new U-learn tool will be launched in -15 providing an online training facility to help student staff become informed and effective more quickly and to enable them, and the Union, to keep track of their training and development. Student Volunteering: We won the national NUS Student Volunteer Week Award for our Student Volunteering Week which included 200 students taking part in over 30 events that supported over 20 local charities! These were enhanced by 5 Student Led Projects taking a lead on many of the activities during the week and good deed nominations involving Officers and Union staff. Goal 4. Support student wellbeing - be there when students need us The outcome we want to achieve: 90% of students report that the Union has had a positive impact on their wellbeing. In the first year of our strategy we have initiated three areas of focus from each of which we expect specific projects or initiatives to develop as our understanding of the needs and potential solutions grows. A. Student Housing: Review and deliver on any recommendations to improve the Housing provision and needs of all students. B. Cross-campus presence: Offer our support and services where and when students need it. C. Student Wellbeing: Make it easy for students to find the help and support they need. 5

8 Report of the Trustees for the year ended 31 July (continued) Our Work in -14 (continued) The Union has made positive progress in starting each of these work streams in -14 with some of the highlights being: Housing Review: Beginning from a large scale research exercise to pull together all of the various data sources containing information on the student housing experience in Nottingham, we have been able to continue the work of successful information campaigns such as the damp and mould work from the Student Advice Centre and the Love Your Home campaign, whilst setting a plan for the next stage of work. The Housing planning moving forward is focused around the creation of volunteering projects including a student neighbourhood watch style initiative, the enhancement of existing campaigns, further development of relationships with community and council contacts to identify opportunities for collaborative activity, and reviewing transport provision both university provided Hopper buses, and city wide provision including links to the green agenda. Outreach: A specific focus this year has been for a number of teams to take their services and support to different campus locations. Volunteering and Finance are now based at the Sutton Bonington campus one day a week as well as a number of the Union Officers and staff working with the SB Guild on the development of the new amenities building to be opened in January 2015; the Officer team dedicated one of their team objectives to growing their connection with students at City Hospital, Jubilee, Derby, Sutton Bonington and Queens Medical Centre for each location they worked with students based there to agree what action would be most beneficial and then worked with them to deliver it. Student Wellbeing: The Summer Student Experience project identified a series of wellbeing related challenges for students on which the Union has been acting this year. An enhanced welcome function within the Student Advice Centre provides immediate face to face support for students and can resolve or at least calm a high proportion of enquiries. Resources and advice have also been added online and our social media developed using tools like BuzzFeed and videos which students engage with well to provide information. Greater support for welfare projects such as Nightline has been introduced with specialised counselling provision available for volunteers. In addition, the development and enhancement of Welfare Reps across halls of residence and student networks with improved training and focused campaigning and promotional activity means that more wellbeing provision exists beyond the Portland Building. Goal 5. Enable students to have the most incredible time at University The outcome we want to achieve: Over 80% of students say they have a positive sense of belonging or involvement with their Union. Four work programmes were initiated with a supporting fifth project running till December only to celebrate the Union s centenary: A. A place to belong: Engage over 27,000 students a year in great activities, events and development opportunities, starting with our centenary celebration year. B. International Students: Make the Union a welcoming and inclusive place for the 27% of students from other countries who come to study in the UK. C. Student Voters: Encourage over 40% of students who can vote in Union, local and national elections to use their vote and help foster great relationships between students and their local communities on and off campus. D. Student Welcome: Make every part of our welcome programmes open and accessible to students whatever their background, interest, life stage or course. A significant body of work has underpinned this area in -14. A few of the highlights and major work areas include: 9% increase in society and club membership to 22,359 students, around 65% of the student body. 11,501 students voted in our Student Leader elections. 440 international students engaged in volunteering activities with the Union through International Welcome Week. Winning the Varsity Series against Nottingham Trent University on the last ball of the last over of the last varsity series match, the men s cricket. Unveiling the new, and already iconic, NOTTINGHAM sign at University Park celebrating student activity and success. 6

9 Report of the Trustees for the year ended 31 July (continued) Our Work in -14 (continued) A few highlights in more depth include: Elections Engagement: We are delighted to have become the UK Union with the highest ever voter turnout, in numbers. This year 48 students stood for election and 11,501 students voted in our Student Leader elections, slightly short of our target of 40% (at 36%) but again a record for this Union. We also saw over 1,000 students use their vote in the European elections. Portland Review: The Union commissioned Crowd DNA to complete a depth research study to understand what students want from a student hub. With at least some redevelopment of the Portland Building at University Park, the main Students Union home within the University of Nottingham, planned for Summer 2015 the Union wanted to create a vision from students for their hub. Engaging current and potential future students from all demographics an exciting report was presented sharing that vision. The Officers took this insight to the University in May-June and secured their commitment to a more significant redevelopment to take place over the next three years which aims to create the leading hub for University students in the UK. Campaigning for Change: Enabling students to raise their voice on issues that matter to them and empowering them to take action has been a significant part of the Union s development work this year. Over 140 wins for students have been recorded including the high profile community campaign, #SaferStationRoad led by Sutton Bonington students securing 50k from the University and then commitment from the Nottinghamshire Highways and Transport Committee to implement and fund safety improvements to the road. Other wins include Parking Permit dispensation for students on placement and disabled students agreed with Nottingham City Council a first step in addressing Article 4 barriers for students; securing University support and funding to recruit a new mental health advisor and agreeing with the University Estates department the standardising porters fees across all buildings for after-hours usage. Our Centenary: As part of our centenary year we created the concept of 100 Heroes to celebrate the achievements of the Union and the people who have contributed to its success over the years. In living out our strategy of putting students at the heart of our work we engaged the student group Crop Up to manage and create an exhibition of the 100 Heroes in the Portland Building. A launch and celebration event took place on 5 April where past and present key Union people were invited. Branding and events over the year (October October ) have reflected the centenary branding as a reminder of this important milestone in our history. Celebration Week, launched by the Officers in, and a special grants programme for Societies and Clubs to celebrate with saw events and activities through the summer term bring many groups of students together. The Centenary Cascade Fund supported significant student group development, with over 80,000 in grants given to student groups such as NSTV, who rebranded their offer and in supporting the Union to enter University Challenge. We will be signing off the centenary year will an event in October : 100 Years of Culture A Week of International Events, teaming up with the International Office to celebrate Nottingham's cultural vibrancy. Goal 6. Put students at the heart of our work - we ll do it your way The outcome we want to achieve: 90% of our members rate their Union as very good or good in the annual student satisfaction survey. As part of its strategy review the Students Union Officers and staff recognised the critical importance of transforming the way we work with and support students, particularly if we are to achieve our vision and live out the Union s values. From revisiting the way in which we deliver our services to embedding the Union s core values, our strategic work programmes seek to ensure we actively allow students to set the direction and shape the way we do things. Be where students are: physically and virtually take the Union s services, facilities and support out to where students are. Student Voice: Enable students to raise their voice on the things that matter to them and make change happen. Simpler processes, better service: Make it easier to use our systems and processes and get stuff done with the Union, basically be really good at everything it does and if we aren t, we ll listen and take action. Income Generation: Develop our income, and support student groups to develop theirs, to invest in improving our services, facilities and support to students. 7

10 Report of the Trustees for the year ended 31 July (continued) Our Work in -14 (continued) Making change of this depth will take us at least three years so -14 has been a year of planning and also ensuring we achieve some early tangible progress. In -14 our highlights include: Our Values: We consulted with students to agree our core values, empowering, inclusive, collaborative and launching them in Summer. People Transformation: We established an internal programme to support the creation of a high performance workforce who are recognised, rewarded and engaged in their work. This will run till July 2016 and see the Union review all its policies and people practices and introduce new structures for assessing performance and recognising its people better. Funding for Student Activities: The Union established a series of new grants programmes including a development fund for student run services, a capital fund to support sports clubs and the Postgraduate Experience Fund as well as working in collaboration with the University s Cascade programme to enable student groups to access over 85,000 in additional grant funding from University alumni. Trading Income: After a number of challenging trading years with budgeted targets being missed, each part of the Union s trading arm introduced a series of tight cost management measures and new services to students enabling them to achieve a 278,000 profit contribution to the charitable work of the Union, 2,000 above the year s budgeted target. Finance System: A priority for service and process improvement was identified as the Union s finance system where a significant number of processes, while effective, require high levels of manual administration and restrict service delivery to the standard business day, which does not work for students with their studies. An open tender process involving Union Officers, students and staff has led to the selection of a new system which will transform the Union s internal financial processes in Autumn and, significantly, launch an online banking and expenses processing facility to all 500+ student groups in Spring Service improvements: a huge range of small changes have improved the services to students including online trip registration and risk assessment forms, improved STARS training for society and club committees and a new code of conduct for student committees being rolled out. Other service improvements include Mooch s work to develop the bar leading to them achieving Best Bar None Silver award a year ahead of original plan. Goal 7. Establish our Union as a top 10 Students Union in the UK Goal six is our overall measurement of the success of our strategy. If we get the work right in goals 1-5 then we will achieve these key measures of success. 90% of students rate the Union as good or very good in our annual satisfaction survey. The Union is rated a Top 10 in the National Student Survey Q23 by its final year students. External benchmark shows 90% staff engagement for the Union career staff team. Students confirm that the Union delivers exceptional customer service. Annual Satisfaction Survey: For the last three years the union has used the National Student Survey (NSS) to measure the level of satisfaction with the Union. This is a key, externally measured indicator against which we can compare our performance with other Students Unions. However, by the time we get the results the students saying whether or not they are satisfied are about to leave so our strategy aims to ensure we know far earlier whether we are meeting student needs and ensure we keep striving to do everything we do brilliantly. In -15 the Union is introducing an annual survey of all its students to measure satisfaction. National Student Survey: Having improved from the 2012 baseline of 71% and 43 rd in the rankings, the NSS results published in August, just as the financial year ended, showed us that our Union had dropped back from a high of 75% to 72% satisfaction and that we had slipped down from our 26 th place just staying inside the top 40. While this is disappointing the students answering the survey arrived before the new momentum to the Union had started so it is perhaps not surprising that the increase was not sustained. The focus this coming year is critical. 8

11 Report of the Trustees for the year ended 31 July (continued) Our Work in -14 (continued) Staff Engagement: The Union introduced an externally taken measure of staff engagement that is benchmarked against other charitable organisations in the UK. This gives us a baseline of 72% engagement with a 5 year target of 90%. The next full measure of engagement will be in 2015 and we will also be able to benchmark against other students unions as there is now a comparable cohort. In addition, the Union confirmed plans to move all career staff to be paid at least Living Wage from 1 August. Customer Service: Starting to introduce Lean tools and introducing new customer service training in -4 is the start of our customer service improvement plan which will develop in -15 and be a particularly high focus of the Union s strategy in years 3-5. Plans for Future Periods The 7 goals and 19 of the 20 work programmes supporting them will all be actively running for at least the first three years of our strategic plan and will form the foundation of our reporting. In -15 there will be some areas that receive additional attention through projects activity that supports a number of the work programmes: Segmentation: A new year 2 project that has been established to create a deeper understanding of our students to enable us to shape better ways of connecting with and engaging our 34,000 student members. Portland Redevelopment: A 3-year project in partnership with the University to create a destination point for students, a vibrant student hub. Commercial Review: A year 2 project assessing the Union s current income generating activity and establishing our income strategy and commercial portfolio for years 3-5 and beyond. General Election 2015: a programme, working in partnership with three other local Nottingham HE and FE students unions and nationally with NUS, to help students get issues that matter to them on the local and national political agenda and encourage students to use their vote. Marketing Transformation: an addition to the year 2 plan to develop the internal effectiveness of the Union s marketing function. In addition, the Union has been engaged by the University to work in partnership on initiatives to improve the University s NSS performance and support work within the Teaching Transformation Programme. Both these activities directly benefit the Union s own strategic goals and the priorities of students so, with 76,000 additional funding support from the University, we have agreed the additional resources and work scope to support this project. 9

12 Report of the Trustees for the year ended 31 July (continued) Financial review Principal sources of funding The principal sources of funding are the block grant from the University of Nottingham, the donation from the University of Nottingham which is restricted to supporting the activities of the Junior Common Rooms of the halls of residence, the profit donated by UNU Services Limited, sponsorship and investment income. Financial Overview The unrestricted funds show a surplus for the year. The principal cause of this was good cost control by managers throughout the organisation, rather than an individual exceptional item. The contribution from the subsidiary company was higher than anticipated, despite operating within difficult trading conditions. The surplus was approved by the trustees. During the year, the senior leadership team worked on understanding the issues surrounding the company and approved an external review of our trading activities to identify, amongst other things, future potential revenue generating activities. The organisation also worked hard to ensure our charitable objectives were met. Continued improvements to financial management reporting was implemented, which led to improved decision making which enabled the team to put in measures to address key costs and effectively manage cost control. Reserves policies The trustees continued to apply the Reserves Policy during /14. The policy, agreed by trustees in 2012/13, stated that the Union shall: Maintain six months reserves but on a revised basis of calculation of critical core activity. Agree the use of reserves as long as the level of reserves does not drop below 50% of the critical core activity plus the cost of restructuring, or 500k, whichever is the higher. Reassess the cost of the critical core and enhanced core costs each year allowing for any changes to the scale and scope of these areas and whether that should be factored into the new level. The trustees considered the following factors to determine an appropriate level of reserve to be held: The Union s critical core services for students The level of risk in depending on the University for a continued core grant level of around 2m The level of risk from our other income sources How and when the Union may legitimately use its reserves regardless of whether we raise or lower the current level. There has been no differentiation in services previously. In reality, if the Union was faced with a significant reduction in income (say in the region of 1.5m from the University) this is exactly the process that would be applied, so the trustees established an initial view of the critical core services provided by the Union as being: The Officers Education Network Advice and academic representation Campaigning Union democracy As per the 2012/13 review, it is estimated that this would cost approximately 550k based on /4 expenditure. The support business costs to maintain our critical core would cover health & safety, HR, finance, building rent, insurance, IT, a small provision for senior management and standard overheads estimated to equate to no more than 310k, giving a total annual cost of approximately 860k to deliver critical services. The estimated cost to scale our activity down to his level is 300k, suggesting a reserve of around 730k (half the critical core costs plus the cost of restructuring). It should be noted that the trustees approved the appointment of an Independent Financial Advisor to review the reserves and investment strategies of the Students Union during /15, alongside a review of reserves as part of the budget setting process in early

13 Report of the Trustees for the year ended 31 July (continued) Trustees responsibilities The trustees are responsible for preparing the Report of the Trustees and the financial statements in accordance with applicable law and regulations. Company law requires the trustees to prepare financial statements for each financial year. Under that law the trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Students Union and of the income and expenditure of the group for that period. In preparing those financial statements, the trustees are required to: Select suitable accounting policies and then apply them consistently; Observe the methods and principles in the Charities SORP; Make judgments and estimates that are reasonable and prudent; State whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in business. The trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the Union's transactions and disclose with reasonable accuracy at any time the financial position of the Union and enable them to ensure that the financial statements comply with the Companies Act They are also responsible for safeguarding the assets of the Union and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In so far as the trustees are, individually, aware: There is no relevant audit information of which the charitable company's auditor is unaware; and The trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information. The trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Auditor Baker Tilly Audit Limited ceased trading on 31 March. The directors, having been notified of the cessation of trade of Baker Tilly Audit Limited, appointed Baker Tilly UK Audit LLP as Auditor on 1 April to fill the casual vacancy. In accordance with the Companies Act 2006 a resolution proposing the appointment of Baker Tilly UK Audit LLP as Auditor will be put to members. By Order of the Board H Copson President [Date] 11

14 Independent Auditor s Report to the Members of The University of Nottingham Students Union Year ended 31 July We have audited the group and parent charity financial statements of The University of Nottingham Student s Union ( the financial statements) for the year ended 31 July on page 14 to 28. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the charitable company s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act Our audit work has been undertaken so that we might state to the charitable company s members those matters we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable company s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of trustees and auditor As explained more fully in the Statement of Trustees responsibilities set out on page 11 the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. We have been appointed auditors under the Companies Act 2006 and section 151 of the Charities Act 2011 and report in accordance with those Acts. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board s (APB s) Ethical Standards for Auditors. Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the Financial Reporting Council s website at Opinion on financial statements In our opinion the financial statements: - give a true and fair view of the state of the group s and the parent charitable company s affairs as at 31 July and of the group s incoming resources and application of resources, including its income and expenditure, for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and - have been prepared in accordance with the Companies Act Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Strategic Report and the Trustees Report for the financial year for which the financial statements are prepared is consistent with the financial statements. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: - the parent charitable company has not kept adequate accounting records, or returns adequate for our audit have not been received from branches not visited by us; or - the parent charitable company financial statements are not in agreement with the accounting records and returns; or - certain disclosures of trustees remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit. 12

15 Independent Auditor s Report to the Members of The University of Nottingham Students Union (continued) Year ended 31 July Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records of returns; or certain disclosures of trustees remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. Kelly Boorman (Senior Statutory Auditor) for and on behalf of Baker Tilly UK Audit LLP Statutory Auditor Suite A, 7th Floor City Gate East Toll House Hill Nottingham Nottinghamshire NG1 5FS Date [ ] 13

16 Consolidated statement of financial activities for the year ended 31 July (incorporating consolidated income and expenditure account) Unrestricted Restricted Total Total Income from generated funds Note Voluntary income: Donations and grants 2 3,228, ,029 3,700,686 2,958,625 Activities for generating funds: Trading turnover 3 2,961,139-2,961,139 3,219,695 Investment income 34,890-34,890 29,653 Income from charitable activities 4 191,814 3,697,301 3,889,115 2,447,293 Total income 6,416,500 4,169,330 10,585,830 8,655,266 Resources expended Costs of generating funds: Trading costs UNU Services Limited 5(a) 2,694,602-2,694,602 2,932,730 Charitable activities: Student advice and support 5(b) 241, , ,371 Representation and campaigns 5(b) 640, , ,261 Student activities 5(b) 2,727,193 3,756,924 6,484,117 5,162,443 Exceptional restructuring costs 5(b) 67,943-67,943 - Governance costs 5(c) 52,438-52,438 42,067 Total resources expended 6,423,513 3,756,924 10,180,437 8,718,872 (7,013) 412, ,393 (63,606) Unrealised gain on investment 9,456-9,456 69,970 Net movement in funds before transfers 2, , ,849 6,364 Transfer between funds Net movement in funds after transfers 2, , ,849 6,364 Balance brought forward 953, ,274 1,568,309 1,561,945 Balance carried forward ,478 1,027,680 1,983,158 1,568,309 The notes on pages 17 to 28 form part of these financial statements. 14

17 Balance sheets at 31 July Company number Fixed assets Note Group Charity Tangible assets , , , ,556 Investments 11 1,045,781 1,041,785 1,345,781 1,341,785 1,212,754 1,179,555 1,478,759 1,445,341 Current assets Investments , , , ,876 Stocks , ,635 2,040 2,040 Debtors , , , ,569 Cash at bank and in hand 986, , , ,941 1,636,080 1,309,371 1,102, ,426 Creditors: amounts falling due within one year 15 (865,676) (920,617) (598,869) (609,286) Net current assets 770, , , ,140 Net assets 1,983,158 1,568,309 1,982,328 1,567,481 Funds - unrestricted , , , ,207 Funds - restricted 18 1,027, ,274 1,027, ,274 Total funds 20 1,983,158 1,568,309 1,982,328 1,567,481 These financial statements have been prepared in accordance with the special provisions for small companies under Part 15 of the Companies Act These financial statements were approved by the Trustees on [ ] and signed on its behalf by:... H Copson President The notes on pages 17 to 28 form part of these financial statements. 15

18 Consolidated cash flow statement at 31 July Net cash inflow from operating activities (see below) 606, ,770 Capital expenditure and financial investment: Payments to acquire tangible fixed assets (111,528) (37,246) Net cash outflow from investing activities (111,528) (37,246) Financing activities (Increase)/reduction in short term deposits (443) 198,227 Net cash (outflow)/inflow from financing activities (443) 198,227 Increase in cash during the year 494, ,751 Reconciliation of net incoming resources to net cash inflow from operating activities Net incoming resources: Unrestricted 2,443 (52,946) Restricted 412,406 59, ,849 6,364 Investment revaluation surplus (3,996) (69,970) Depreciation 82,325 93,449 Decrease in stock 25,432 40,168 Decrease/(increase) in debtors 142,466 (168,532) (Decrease)/increase in creditors (54,941) 331,291 Net cash inflow from operating activities 606, ,770 The notes on pages 17 to 28 form part of these financial statements. 16

19 Notes forming part of the financial statements for the year ended 31 July (continued) 1 Accounting policies Basis of accounting The financial statements have been prepared under the Charities Act 1993 under the historical cost convention, and are in accordance with applicable accounting standards. In preparing the financial statements, the College follows best practice as set out in the Statement of Recommended Practice Accounting and Reporting by Charities (the Charities SORP 2005) issued in March Group financial statements These financial statements comprise the results of The University of Nottingham Students Union and its wholly owned trading subsidiary, UNU Services Limited consolidated on a line by line basis. No separate Statement of Financial Activities or Income & Expenditure Account is presented for the Charity because it has taken advantage of the provisions of paragraph 397 of the SORP. The Charity s operating surplus for the year was 414,849 (: 6,364). Incoming resources All incoming resources are recognised once the Group has entitlement to the resources, it is virtually certain that the resources will be received and the monetary value of incoming resources can be measured with sufficient reliability. Voluntary help and donations in kind The charity benefits from the provision of payroll services, HR support and IT support by Nottingham University costing 70,000 (: 70,000) and these amounts have been included in these financial statements. Similarly, the charity benefits from the provision of accommodation by the University of Nottingham. Similar facilities in a similar location would have a rental cost of approximately 424,385 (: 424,385) per annum and so this amount has been included in these financial statements. The value of these services has been calculated using estimated market values applied to either space utilised or level of service provided. Resources expended and basis of allocation of costs Liabilities are recognised as resources expended as soon as there is a legal or constructive obligation committing the Group to the expenditure. All expenditure is accounted for on an accruals basis. Overhead and other costs not directly attributable to particular functional activity categories are apportioned over the relevant categories on the basis of management estimates of the amount attributable to that activity in the period, either by reference to staff time or space occupied, as appropriate. The irrecoverable element of VAT is included with the item of expense to which it relates. Governance costs comprise the costs of running the charity, including strategic planning for its future development, external audit and all the costs of complying with constitutional and statutory requirements, such as the costs of Board and Committee meetings and of preparing statutory accounts and satisfying public accountability. Tangible fixed assets, depreciation and impairment The cost of tangible fixed assets represents the purchase price plus any attributable expenditure. Depreciation is provided to write off the cost, less estimated residual values, of all fixed assets, evenly over their expected useful lives. 17

20 Notes forming part of the financial statements for the year ended 31 July (continued) 1 Accounting policies (continued) Tangible fixed assets, depreciation and impairment (continued) It is calculated at the following rates: UNU refurbishments years Clubs JCR - 3 years SRS motors & others - 3 years Equipment computers - 3 years Union refurbishment years The carrying values of tangible fixed assets are reviewed for impairment if events or changes in circumstances indicate that the carrying value may not be recoverable. These circumstances include consideration of the ability of the asset to be operated as planned and thereby provide the expected revenue streams associated with that asset. Stocks Stock is valued at the lower of cost and net realisable value. Cost is based on the cost of purchase on a first in, first out basis. Net realisable value is based on estimated selling price. Leases Rentals paid under operating leases are charged against income on a straight-line basis over the lease term. Pension costs The Union participates in the Students Union Superannuation Scheme, a defined benefit scheme which is externally funded and contracted out of the State Second Pension. The fund is valued at least every three years by a professionally qualified independent actuary with the rates of contribution payable being determined by the trustees on the advice of the actuary. The scheme operates as a pooled arrangement, with contributions paid at a centrally agreed rate. As a consequence, no share of the underlying assets and liabilities can be directly attributed to the Union. Under the terms of FRS17, in these circumstances contributions are accounted for as if the scheme were a defined contribution scheme based on actual contributions paid through the year. The scheme was closed to further accrual on 30 th September 2011 and the Union now participates in the National Union of Students Pension Scheme which is a defined contribution scheme. The Union also participates in the University of Nottingham defined benefit scheme. Similarly, the scheme operates as a pooled arrangement, with contributions paid at a centrally agreed rate. As a consequence, no share of the underlying assets and liabilities can be directly attributed to the Union. Under the terms of FRS17, in these circumstances contributions are accounted for as if the scheme were a defined contribution scheme based on actual contributions paid through the year. Funds Unrestricted funds consist of funds which the Charity may use for general purposes at the Trustees' discretion, this includes designated funds which are designated for specific purposes. Restricted funds represent income contributions which are allocated to a particular purpose in accordance with the donor s wishes and funds of societies/clubs/associations which are managed by those organisations and whose use is restricted by their constitutions. Custodian Activities The Union acts a custodian for Karnival which is a student run charities appeals (RAG). Transactions on their behalf are processed through the Union main bank account and any balance due to Karnival is shown as a current liability on the Balance Sheet. 18