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per Lf7gfe-^ (JkoW CoLC- University of Southampton Financial Statements and Statistics 997 1 University ofSouthampton University of Southampton Annual Report 1996 97 - Financial Statements and Statistics TAKEN0!TCF7:-E1 UniversityofSouthamptonandSubsidiaryUndertakings FinancialStatements fortheyearended31July1997 Contents ReportoftheTreasurer 4 CorporateGovernance g ReportoftheAuditorstotheCounciloftheUniversityofSouthampton 8 IncomeandExpenditureAccounts 9 BalanceSheets IQ ConsolidatedCashflowStatement H StatementsofTotalRecognisedGainsandLosses 11 NotestotheFinancialStatements 12 UUnniivveerrssiittyyFFiinnaanncciiaallSSttaattiissttiiccss 3311 UniversityofSouthamptonandSubsidiaryUndertakings Treasurer InvestmentAdvisers GodfreyWhitehead,FCA hazardBrothersAssetManagementLimited 21Moorfields DirectorofFinance LondonEC2P2HT ColinRShowell,BCom,CPFA JamesCapelInvestmentManagement 6BevisMarks DeputyDirectorofFinance LondonEC3A7JQ Malcolm}Ace,MA,FCCA BankerstotheUniversity MidlandBankPLC 165HighStreet SouthamptonS0142NZ BankerstoChilworthCentreLimited andChilworthManorLimited LloydsBankPLC 18HighStreet SouthamptonSOM2SE ExternalAuditors PriceWaterhouse TheQuay 30ChannelWay OceanVillage SouthamptonSOM3QG InternalAuditors Coopers&Lybrand 5TownQuay SouthamptonSOM2HJ UniversityofSouthamptonandSubsidiaryUndertakings Treasurer’sReport1996-1997 ScopeoftheFinancialStatements 77teFinancialStatementscomprisethe increasinglycompetitivemarket. TheUniversity consolidatedresultsoftheUniversityandits canbejustifiablyproudoftheeffortsofitsstaffto subsidiarycompanies,listedinnote12. Where increasesuchincome. Sustainedannualgrowth applicable,profitsfromthesubsidiariesare hasaveraged15%perannumcompoundoverthe covenantedtotheUniversity. lasttenyears. ResultsfortheYear BalanceSheetandCapitalDevelopments TheUnrversity'sConsolidatedIncome, TheBalanceSheetcontinuestoshowsatisfactory e19x1p)e7nadrietusruemmaanrdirseesdulatssffoolrltohwes:yearto31July srterqeunigrtehmeanntsd.adDeuqruiatnegltihqeuiydeiatry,taolmoeaentoffo£re1s0eeable millionwasnegotiatedwiththeNational WestminsterBanktofinancetheconstructionof 1997 1996 theAvenueCampus,whichhadbeenfinancedon £000 £000 aninterimbasisfromcashreserves. Cashreserves Income 162,765 154,764 wereusedinsteadtobeginthefinancingofthe constructionofthenewSyntheticChemistry Expenditureand Building(tobefinancedmainlyfromaloanof minorityinterest 161,885 149,160 £12.3millionin1998)andtomeetthefirststages Surplusfortheyear ofanambitiousplanforremodellingand basedonrevalued refurbishingthemainHighfieldCampus.In fixedassets 880 5,604 addition,theUniversityiscommittedtofurther academicbuildingandtothecompletionofa combinedResidentialandCommercialServices Building,containingfourbanksandamajor IladdepreciationbeenchargedonanHistoricCost bookshop. Theseprojectswillbecompletedin1998. basis,thesurplusfor1997wouldhavebeen£3.038 Finally,thelatterpartoftheyearincludedagreat million(199b:£7.883million). dealofplanningtowardsthecreationof 5I%hecUonmivpearrseidtyw'istthottahleipnrceovimoeusinyceraera,seadsblyowoevrerrate tUonitvheerpsuirtcyhoafseSoouftthheamapctaodnemNicewsitCeoollfetghee,floeramdeirng ofgrowththaninpreviousyears,reflectingthe LaSainteUnionCollegeofHigherEducationjust continuingtighteningofpublicgrants. Overhalf aftertheendofthefinancialyear,on1September oftheincreasehasarisenfromthejoiningof 1997. wWhiincchhecsotnetriSncuheodolthoefUAnritveornsi1tyA'usgruescetnt19e9x6p,ansion fOuvteurraelflu,ntdhiensegdreevqeuliorpemmeenntt,sfiormpwlhyiachcotnhseiderable ofitsacademicactivities. Withouttheadditional Universityhasplannedaccordingly,usinga grantarisinginrespectofWinchesterSchoolof mixtureofinternallygeneratedfundsandloan Art,theUniversity'sgrantfromtheHigher finance.Anylong-termloancommitmentswillbe EducationFundingCouncilwould,infact,have monitoredstrictlyandkeptwellbelowthe beenlessthaninthepreviousyear.Thisisbecause maximumlevelsadvisedbytheHigherEducation finalsforteachingwerereducedfor1997,whilst FundingCouncil. theincreasedfundingresultingfromthe Universitysextremelysuccessfulresearch Investments gurntaidlin1g9s98w.illnotcomeintothegrantallocation Duringtheyear,themanagementofinvestments wasundertakenbyLazardBrothersAsset Despitetherelativelylowgrowthinpublic ManagementandJamesCapelInvestment fcioluilaitinnugc,tlretsoegarrochw.grTaonttalarnedsecaorncthraicntcoimnecowmaesh9as% MUaninvaegresmiteynti.ncoImneaavnedrycabpiutoaylagnrtomwatrhkewta,stihneline higherthaninthepreviousyear,inan withindustrybenchmarkreturns. UniversityofSouthamptonandSubsidiaryUndertakings Treasurer’sReport1996-1997 CashFlow TheCashFlowStatementhasbeenredraftedthis company,SouthamptonInnovationsLimited,(set ySetaarndianrldin(eFwRiSth1tRheevinseewd)FiwnhaincchiarledReefpionresticnagsh guepneJraantuearsiygn1i9f9i6c)anwthiincchoimtehfoopresthweilUlnisvuecrcessistfyully andshort-terminvestments. TheUniversity fromtheexploitation,invariousforms,ofthe generatedsome£12millioncashfromitsoperating expertisearisingfromresearchprojects. activitiesanddrewdownloansof£10.8millionto financecapitalexpenditureprojects,mainlythose LookingAhead fffyAerreuxtaoonpremmdt,nheale1ddvo9isaa9tiian8nulsmi.rateebiblaeotleifilnmcy£geaf8,s.rdh4ho.romamwiSweclonvalmesidrheoo,nbowanhfnlaetashwinincbsceetawsehpineilitlnsnaulebepaewrpflofiiirnentraaenyndcecaeirdasl. yaBETewdehauaaercrrsaU.eitnntiigWhvohaeRnitrelmsptsoihatrteytyft,huahitlpastuuserobreptlearisaknstdeshrineucudcacptlaiulrnmyreJfeaiuunnollfyytn,Hhooeiatpgnepnhdoeoerxfitrtsutfnhzeioeetwliles, thereivillalsobesignificantfinancialissues,the UniversityCompanies impactofwhichhasyettobeclarified. Councilis, however,wellawareoftheneedforcarefuland Theprincipaltradingcompanies,Chilworth responsiblefinancialmanagementduringwhatis CentreLimited(CCL)andChilworthManor likelytobeachallengingperiodoftransition. Limited(CML)haveperformedsatisfactorily duringtheyearandCMLisaheadoftheschedule Conclusion pFaarlUocuegontscarriisonetvviuehieburtdrienislsrewediisiteittytrncyovhltoeohtafLssahfkeltesueiortnUgmyotandaihtitsndeihvreoeBetnhraeCsiesxnhniapeckitraarlfyernewolsaciorysinoriotn1trnhn9thege9isos0nuprfiseusetc.cieepotnaaTomgoyhnfmfmeideienrtrtsttenchohtniiiesseatohllwnfeootahn.e aeaKwTfxinehtptdneerhnreweest1intsh1sdheemyfoDeciyfiaontrbuaahsbnpneespcafneresi.elsncTaooiOrnvfaenceattirsihabuoeltrenhehUyforaneos,liarefvroehyofiresfmsasaeriywdvstee.ypdtr,rhiyeecIodanrweteecoeteducislorssenodemrcre,lveinirktcne,eetdo 16December1997 GodfreyWhitehead Treasurer UniversityofSouthamptonandSubsidiaryUndertakings CorporateGovernance SummaryofCorporateGovernance 'FlicUniversitywasestablishedin1952byRoyal ResourcesCommittees(PRC)-ajointcommittee Charterwhich,togetherwiththeStatuteswhich withtheSenate-performsapivotalrole.PRCis cameintoforceatthesametime,providesthe chairedbytheVice-Chancellor,andisresponsible frameworkforthecorporategovernanceofthe forpreparingforconsiderationbyCouncilthe instilulion. TheCouncilisthegoverningbodyof annualrevenueandcapitalbudgets;for theUniversity,andischargedbytheStatutes recommendingtoCounciltheadoptionofthe withresponsibilityfor"themanagementand StrategicPlan;formonitoringperformancein administrationofthewholerevenueandproperty relationtoapprovedbudgets;andforoverseeing oftheUniversityandtheconductofalltheaffairs theexecutionoffinancialpoliciesapprovedbythe oftheUniversity". Incarryingoutitsfunctions, Council. PRCreceivesregidaradvicefromtwo theCouncilisboundbythetermsoftheFinancial committeesivhoseremitrelatesrespectivelyto MemorandumwiththeHigherEducation personnelandtoestatespolicy,andalsofromthe FundingCouncilforEngland,whichisupdated UniversityManagementGroupwhichhasday-to- annually,andtheacceptanceofwhichisa dayoversightofthefinancialpositionofthe preconditionforthereceiptofsubventions.The University. Othercommitteesdealwithsuch Senateistheotherprincipaldecision-makingbody mattersasstudentandstaffwelfare,safetyand prescribedintheCharterandStatutes;itis occupationalhealth,theremunerationand primarilyresponsibleforcoordinatingand promotionofstaff,andtheassessmentofacademic ailvauciiigtheacademicworkoftheUniversity. andadministrativedepartmentalperformance. TheCouncilnumbers57persons,comprisingex- TheAuditCommitteemeetsatleastthreetimes officioandlaymembers,andrepresentativesofthe perannum.Meetingsareattendedbythe academicandotherstaff,togetherwithtwo ExternalAuditors,todiscussauditfindings,and students. TheChairandVice-ChairofCouncilare alsobytheInternalAuditors,todiscussdetailed appointedfromamongstthelaymembership,which internalauditreportsandrecommendationsfor alwaysformsamajorityontheCouncil. Whilstthe theimprovementoftheUniversity'ssystemsof ChancelloristhetitularheadoftheUniversity,the financialcontrol,togetherwithmanagement's Vice-ChancelloristheUniversity'sprincipal responseandimplementationplans. The academicandadministrativeofficer,and CommitteealsoconsidersreportsfromtheHigher AccountingOfficer.TheTreasurerisalayandnon- EducationFundingCouncilforEnglandrelating executivememberoftheCouncilwhoseremitisto totheconductofbusinessandmonitorsadherence ailvisegenerallyonmattersrelatingtothe totheregulatoryrequirements. TheCommittee tliiiversilyeconomy,andtosatisfyhim/herselfasto reviexvstheUniversity'sannualfinancial thesoundnessoftheUniversity'sfinancialposition statementstogetherwiththeaccountingpolicies. andtheintegrityofitsfinancialtransactions. The Whilstseniorexecutivesareinattendanceat SecretaryandRegistrarisresponsibletoCouncil, meetings,theyarenotmembersoftheCommittee, throughtheViceChancellor,foralladministrative whichreservestherighttomeetiviththeExternal functionsoftheUniversity. Auditorsforindependentconsultations. IheCouncilmeetsatleastthreetimesperannum, TheNominationsCommitteeisresponsiblefor andreceivesreportsonthefunctioningofthe makingrecommendationsforthefillingof Universityandofitssubsidiarycompanies. vacanciesinthelaymembershipofCouncil, MattersspecificallyreservedforCouncildecision followinginternalandexternaladvertisementand includetheMissionandongoingstrategic referencetothealumnioftheUniversity. sdtCbiilommreulevengcetcetlitiollaoiprnrmei.yesonfiltIlsrtni.ahsentphsoMiiasnsucisttsctietihodtruuustotcfhiatoruntnorhd,ueegaobthfnuhdmestiahPtnjehoeoelcsriosacmnpyompefiarwttonhtvdeaeleof aTrrdeehmvveiiineePiwwrssottfhterehsaestsoiasrvalielaaarlsrytiaaeofnsffd.otTfhSehesneeViniliocaoreyrSCoaahflcfaaainrcdcieeeerlmsslisoCcerop.amanmrdaittetleye