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					     FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JULY 2010
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Contents

Financial Highlights                                                                  3

Governors’ Report                                                                    4-14

Corporate Governance Statement                                                       15-21

Responsibilities of the University’s Board of Governors                              22-23

Independent Auditor’s Report                                                         24-25

Statement of Principal Accounting Policies                                           26-27

Consolidated Income and Expenditure Account                                           28

Consolidated Statement of Historical Cost Surpluses and Deficits                      28

Balance Sheet                                                                         29

Consolidated Cash Flow Statement                                                      30

Statement of Total Recognised Gains and Losses                                        30

Notes to the Accounts                                                                31-45

Principal Address & Advisors                                                          46
                                            Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Financial Highlights
                                                                                                   2010                   2009
Results, Cash Flows, Assets and Reserves                                                           £000                   £000

Funding Council Grants                                                                           40,248                 37,320
Academic Fees and Support Grants                                                                 41,309                 36,972
Research Grants and Contracts                                                                       423                     81
Other Operating Income                                                                           15,168                 14,028
Endowment and Investment Income                                                                     436                    633
Total Income                                                                                     97,584                89,034

Historical Cost Surplus for the Year After Tax                                                    4,883                  4,782

Net Cash Flow from Operating Activities                                                          11,774                 11,799
Net Outflow on Investments and Servicing of Finance                                              (2,160 )               (1,962 )
Net Cash Flow before Investing                                                                    9,614                  9,837

Fixed Assets                                                                                     68,919                 68,178
Endowment Asset Investments                                                                         622                    588
Debtors                                                                                           2,945                  2,461
Investments                                                                                      26,527                 10,153
Cash                                                                                              9,660                 19,353
Creditors: amounts falling due within one year                                                   15,974                 15,100
Total Assets less Current Liabilities                                                           92,699                 85,633

Total Reserves excluding FRS 17 Pension Liability                                               49,402                 43,048

Total Reserves including FRS 17 Pension Liability                                               25,202                 13,208

Other Key Statistics                                                                           2009-10                2008-09

Number of Higher Education Full-Time Equivalents                                                 11,042                 10,752

Total Number of Higher Education Students                                                        12,537                 11,769

Number of Employees                                                                               1,213                   1,163




                                                                                                                            3
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Governors‟ Report
SCOPE OF THE FINANCIAL STATEMENTS                                       The University recruited in excess of 500 overseas
                                                                        (non-EU) students to year 0 and year 1 course years
The Financial Statements comprise the consolidated                      in 2009-10, showing a minor reduction on the
results of the University and its fully owned trading                   previous year. The leading source areas for these
subsidiary    undertaking:    Southampton      Solent                   were the Middle East, Norway, India and Nigeria. An
University Limited (SSUL).                                              audit visit in July 2009 by the UK Border Agency
                                                                        (UKBA) confirmed that the University‟s processes
The main activities of this undertaking is to provide                   were fully aligned with the requirements of its UKBA
short courses, training and facilities, consultancy                     licence.
services, meals and accommodation for employees of
other organisations using the companies‟ facilities                     Applications from EU nations are rising - in
for their own training programmes and miscellaneous                     particular, from Eastern Europe and through an
commercial activities.                                                  articulation agreement in Germany.

OPERATING & FINANCIAL REVIEW 2009-10                                    Financial position

Situated in the heart of Southampton, the University                    Financially, the University has never been stronger.
is a vibrant and enterprising modern university which                   Income for 2009-10 was £97.6m and an historic cost
places the student experience and a commitment to                       surplus of £4.9m was achieved (5.0% of income).
preparing graduates for successful careers at the                       The University plans for a surplus of 3% of income.
heart of our mission.       We currently have four                      This has been achieved (or exceeded) for four
faculties: the Faculty of Business, Sport and                           successive years and is expected to continue for
Enterprise; the Faculty of Media, Arts and Society;                     2010-11.
the Faculty of Technology; and the Warsash Maritime
Academy. Three of the four faculties have been                          New Strategic Plan
successfully reviewed and refocused in the past five
years, the most recent being the Faculty of Business,                   In July 2008 we launched our new Strategic Plan
Sport and Enterprise. It is now pursuing a more                         (2008-2013).         This seeks to forge greater
externally facing role whilst refocusing the                            distinctiveness and strengthen the University‟s
undergraduate curriculum to incorporate an explicit                     position as a provider of education, learning and
social enterprise dimension.                                            skills, characterised by the effective integration of
                                                                        theory and practice. Distinctiveness, development
With more than 19,500 students (11,500 FTEs)                            and sustainability will constitute the key priorities
applications have almost doubled since 2006, largely                    for the future. In early 2010, the University‟s senior
as a result of timely, innovative curriculum                            management reviewed the Plan and found it to be
development and skilful marketing.                                      still fit for purpose.

We have a strong widening participation record and                      The University‟s Strategic Plan 2008-13 is set out
welcome all who are able to benefit from the type of                    below.
higher education we offer. We like to think that this
is an open, friendly, accessible university where                       Southampton Solent University‟s Vision is:
ordinary people can achieve extraordinary things.                               A vibrant, inclusive and successful University
                                                                                 that is well known for the excellence of its
A third of students come from Hampshire and the                                  work with students and employers and the
Isle of Wight, 97% of whom are from state schools,                               effective integration of theory and practice;
the highest for universities on the south coast.
                                                                                A      stimulating    student      experience
International reputation                                                         characterised by intellectual rigour, personal
                                                                                 fulfilment and excellent career prospects;
The University has particular strengths in the
                                                                                Imaginative external partnerships which
creative industries, media and the maritime sector
                                                                                 develop the University and make a
(where, through the Warsash Maritime Academy,
                                                                                 significant contribution to social justice and
with its own campus beside Southampton Water, we
                                                                                 economic competitiveness.
have a genuinely international reputation).
                                                                        Southampton Solent University‟s Mission is:
                                                                                The pursuit of inclusive and flexible forms of
                                                                                 Higher Education that meet the needs of
                                                                                 employers and prepare students to succeed
                                                                                 in a fast-changing competitive world.


4
                                               Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Governors‟ Report
Southampton Solent University‟s Strategic Plan 2008-            Employment outcomes
13 includes eight strategic objectives:
                                                                An emphasis on „real world‟ learning has spawned
       Inclusive and flexible forms of         Higher          some exciting new courses (notably Media and
        Education that meet market needs;                       Fashion Styling) and unique work experience
       Imaginative working partnerships           with         opportunities (for example, at Glastonbury and
        Further Education and employers;                        Glade popular music festivals, and in providing live
                                                                network broadcasts for the BBC).          All this is
       A significant contribution to social justice            reflected in an enhanced reputation and above-
        and     economic     competitiveness     for            benchmark employment statistics.         However, in
        Southampton and its region;                             recognition of the current economic climate, our
       Knowledge creation and exchange that fuse               careers staff and Graduate Jobs South (created and
        academic rigour and professional practice;              run by Southampton Solent on behalf of three other
                                                                local universities) have redoubled their efforts to
       Excellent student employability;                        help students find that vital first job.
       Entrepreneurship   and   diversified    income
                                                                Making a real difference
        streams;
       Changed employment arrangements            that         We have created a one-year intern programme, to
        support high performance;                               which (in 2009 and 2010) we recruited 25
                                                                Southampton Solent graduates in roles that make a
       Sustainable growth and investment in the                real difference, both to them and to us. A bid to
        estate.                                                 HEFCE for additional funds to support the creation of
The Higher Education Funding Council (HEFCE) has                more interns, on a short placement basis, with small
recognised the sense and merit of the University‟s              and medium-sized employers in the region was
strategic objectives by investing £7.8m to enable us            successful (80 graduates have been placed with local
to accelerate attainment of those objectives through            companies).
our Strategic Development Programme, over the
period 2009-12.                                                 Student experience

Quality provision                                               The University has made real strides in enhancing
                                                                the learning experience of students. Our National
The University is committed to teaching excellence.             Student Survey (NSS) scores have improved
Our lecturers are all experienced in their field and            significantly in two successive years. Benchmarked
their academic achievements are supported by                    against similar universities in the Million+ Group, we
professional knowledge and ongoing collaborative                have since 2008 risen from bottom place to positions
work with external agencies, businesses and                     within the top ten for „Overall satisfaction‟,
academics from other institutions, to ensure that               „Teaching      quality‟   and     „Organisation    and
teaching and supervision is up to date, relevant and            Management‟. Last year we were shortlisted by the
progressive.                                                    Times Higher Education for most improved student
                                                                experience and this year we have improved again.
Recent external reviews of internal processes have
been positive. Independent audits by the Quality                In this year‟s Sunday Times League Tables, the
Assurance Agency and Ofsted awarded us their                    University has risen six places to 116th. Our position
highest rating for the quality and standards of our             was helped considerably by our improved NSS scores.
Higher Education (HE) and Further Education (FE)                Nonetheless, The Sunday Times‟ measures fail to
provision.   Independent audit of non-completion                reflect what is now a highly diverse and complex
data by HEFCE in 2009 resulted in a revision of the             higher education system. It does not value our
reported rate but no financial adjustment. In two               emphasis on widening participation, the fusion of
subject areas submitted for the 2008 Research                   theory and practice, social justice, or the breadth of
Assessment Exercise, some aspects of the work were              our graduate employability, which are core to our
placed in the top, „world leading‟ category. On a               distinctiveness as a university.
relatively small submission, the University secured
£299k per year research funding, a modest amount                Enhancing the student experience, not least in terms
but a significant improvement on its past                       of employability, is likely to remain a top priority for
performance. Separately from this, the Warsash                  the future, especially in light of changes in the
Maritime Academy, leading a consortium of European              higher education funding and policy framework.
partners, has secured €2.8m in funding for research
into the effects of fatigue on ships‟ bridge crews, of
which €1.3m is for work carried out by the
University.

                                                                                                                               5
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Governors‟ Report
The following Key Performance Indicators which derive from the University‟s Strategic Plan for 2008-2013 relate
to student satisfaction and achievement:

    Performance Indicator                    Criteria            Outcome for 2009-2010


    Student satisfaction                                         76% of students were satisfied (2008-
    (as measured by the National                                 2009 72%)
    Student Survey)

    Employment rate                          Above               80.1% - national average 68.3%
    [figures produced one year in            benchmark           (2008-2009 78.4% - national average
    arrears therefore 2008-2009                                  70.0%)
    relates to 2007-2008 leavers]


Estates

The main focus on the University‟s estate during 2009-10 has been the strategic acquisition of land adjacent to
the city campus at East Park Terrace, which has been a long-term aspiration for the University, and which will
facilitate the next phase of estate development to create modern, higher performing, and flexible learning and
teaching accommodation. Following protracted negotiations with the previous owner, the site of just under an
acre was finally acquired in 2009, with physical possession agreed for October 2011.

The challenge this year for the University has been to invest in the estate in a way that provides impact and
value for money, but that does not compromise future estate development plans. With this in mind, investment
has been strategically targeted to enhance the student experience through upgrading of teaching and learning
facilities, and through the refurbishment of social spaces.

Future estates development during the year has focused on two major projects:
       Test Park, a £3.2m football facility at Millbrook in Southampton, of which £0.7m will be funded by the
         Football Foundation and £0.3m from Southampton City Council. This facility will provide teaching
         facilities for sports coaching courses, recreational facilities, and community use. It is anticipated to be
         complete in 2011.
       Manned Model Centre, a £2.8m facility to provide a new home for the Warsash Maritime Academy‟s world-
         class Manned Model Training Centre.




6
                                            Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Governors‟ Report
The following Key Performance Indicators which derive from the University‟s Strategic Plan for 2008-2013 relate
to the University‟s financial position:

 Performance Indicator               Criteria          Outcome for 2009-2010


 Annual historic cost surplus        At least 3% of    5.00% (2008-2009 5.37%)
 (after tax and FRS 17 pension       income over
 costs)                              the period of
                                     the Plan

 Net cash inflow from operating      At least 6% of    12.07% (2008-2009 13.25%)
 activities                          income

 Cash reserves                      Available cash £9.7m (2008-2009 £19.4m)*
                                    reserves of
                                    £6m
*See Investments and Cash Reserves section below for further details

Results for the Year                                          Staff costs rose by £4.7 million (10.4%) to £49.7
                                                              million. Incremental salary scale increases account
The University‟s results are summarised in the                for 2.1% of the increase. Staff numbers have also
Financial Highlights on page 3.                               risen by 4.3% primarily as a result of the Strategic
                                                              Development Programme and filling vacancies from
Total income increased by £8.6 million (9.6%) to              2008-2009. The national pay award increase for all
£97.6 million.                                                staff was 0.5% in October 2009.

Funding body grants increased by £2.9 million (7.8%)          Other operating expenses rose by £3.3 million
to £40.2 million, with £39.2 million (97.6%) being            (10.4%) to £35.1 million. Increases in repairs and
received from HEFCE and the remaining £1m (or                 maintenance, as well as refurbishment projects
2.4%) from the FE funding bodies.                             across the University have contributed to higher
                                                              operating expenses.
The HEFCE recurrent grant for 2009-2010 totalled
£33.9 million, representing an increase of £0.9               Minor equipment has also increased by £1.0 million
million (2.6%) from 2008-2009, which was related to           as a result of additional spend aimed to improve the
the teaching element of the grant.        Widening            student experience.
participation funding, received for the additional
costs associated with recruiting and teaching                 The historical cost surplus for 2009-2010 was £4.9
students from under-represented social groups and             million, in line with the 2008-2009 surplus and £2.2
communities, increased to £4.8 million.                       million higher than the budgeted surplus of £2.7
                                                              million. This increase over budgeted surplus was
Tuition fee income increased by £4.3 million (11.7%)          achieved through higher than budgeted student
to £41.3 million. The majority of this increase was           numbers combined with controlled pay costs,
in respect of the increase in fees and the number of          partially offset by targeted additional non pay
students as most of the home students are now                 spend.
paying variable fees.
                                                              Investments and Cash Reserves
Other operating income increased by £1.2 million
(8.1%) to £15.2 million, primarily as a result of             Overall investments and cash reserves have
higher residences rental income.                              increased by £6.7m. As financial markets have
                                                              stabilised the University has started investing a
Endowment and investment income decreased by                  proportion of its funds for up to 12 months rather
£0.2 million (31.1%) to £0.4 million due to lower             than hold them in instant access accounts. This has
interest rates and a higher proportion of cash being          lead to the decline in cash reserves of £9.7m and
held in instant access deposit accounts during the            increase in investments of £16.4m.
year.

Total expenditure has increased by £8.5 million
(10.0%) to £92.8 million.




                                                                                                                            7
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Governors‟ Report
Cash flow                                                                amounts outstanding as at 31 July 2010 are £3.7
                                                                         million and £7.9 million and will be repaid in 2018
The Financial Highlights on page 3 show that the                         and 2019 respectively.
University generated a net cash inflow from
operating activities of £11.8 million, which is in line                  Post Balance Sheet Events
with the previous year. The factors contributing to
the level of net cash inflow include:                                    The Governors are not aware of any post balance
                                                                         sheet events that they feel attention should be
      a surplus of £4.9m was achieved in 2009-                          drawn to.
        2010.
      an increase in creditors this year of £0.9                        Financial Strategy
        million, compared to an increase last year
        of £0.1 million, is largely due to trade                         The financial strategy is one of the supporting
        creditors being higher.     The University                       strategies to the University‟s Strategic Plan 2008-
        continues to pay creditors in line with the                      2013. It sits alongside other service strategies and
        current creditor payment policy.                                 is inextricably woven through all strategies of the
                                                                         University. It has an enabling role to ensure that
      an increase in debtors this year of £0.5                          the appropriate resources are provided to support
        million, compared to a decrease last year of                     the University‟s strategic objectives and academic
        £1.1 million.      Although debtors have                         development.
        increased slightly, the percentage of
        student debt compared to income has fallen                       The University will aim to:
        to 3.25% (2008-2009 4.65%). The University
        continues to focus on debt management.                                      Achieve and maintain a historic cost surplus
                                                                                     of at least 3% of income;
Capital Projects                                                                    Generate a net cash flow from operating
                                                                                     activities of at least 6% of income;
During 2009-2010 the University has continued to
                                                                                    Maintain a minimum cash balance of £6
invest in the estate at the East Park Terrace and
                                                                                     million;
Warsash campuses. The University was allocated
£7.8m under the HEFCE Capital Investment                                            Minimise the use of working capital (i.e.
Framework for 2008-2011.                                                             debtors);

Amounts capitalised as land and buildings during the                                Optimise investment returns of liquid
year totalled £1.9 million and additions to                                          assets, whilst safeguarding the assets;
equipment were £2.2 million.                                                        Optimise the cost of financing the student
                                                                                     residences;
Increasingly constrained by space limitations, the
University has purchased a piece of land during the                                 Make available borrowing capability to
year, as well as continuing with the phased                                          develop the enabling infrastructure;
refurbishment of its teaching and residential                                       Develop     existing   and   new    funding
buildings.                                                                           relationships.
Equipment has been purchased across the University                       The Director of Finance, together with the finance
in order to enhance the student experience and                           senior management team, is responsible for the
adapt to the changing nature of student learning.                        delivery of the strategy. A set of key performance
                                                                         indicators has been developed as part of the
Long-Term Borrowing Facility                                             strategic plan process; three key financial indicators
                                                                         are included on page 7.
The University has a standard commercial loan with
the Allied Irish Bank, secured on individual halls of                    Treasury Management
residences. The amount outstanding as at 31 July
2010 is £20.5 million and will be repaid by July                         Treasury      management     encompasses       the
2026.                                                                    management of the University‟s cash flows,
                                                                         banking, money and capital market transactions and
The outstanding loan with Barclays Bank was repaid                       the effective control of the risk associated with
in full in December 2009.                                                those activities.
The University also has two finance leases with the
Co-operative Bank and the Bank of Scotland. The


8
                                               Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Governors‟ Report
The policy of the University is to safeguard its assets          unable to identify its share of the underlying
whilst at the same time aiming to achieve the best               liabilities of the scheme. The University has taken
possible return on its investment. The over-riding               advantage of the exemption of FRS 17 and has
principle however must be to minimise risk rather                accounted for it as if it were a defined contribution
than maximise return.                                            scheme.

The financing and liquidity of the University and its            The disclosure notes on pages 38 to 40 relate only
exposure to financial risk are managed by the                    to the HCCLGSS and unfunded obligations. The
central Finance Service. The University‟s financial              latest actuarial valuation of the fund took place as
strategy sets out the minimum liquidity levels                   at 31 March 2007 and was updated by Hewitt
needed to ensure that financial and operational                  Associates Limited, as actuaries appointed by
control is maintained. A rolling five year forecast is           Hampshire County Council, in order to assess the
prepared each year, which incorporates a review of               University‟s share of assets and liabilities of the
capital expenditure, cash generated and any future               scheme as at 31 July 2010.
borrowing requirements.
                                                                 The University‟s share of deficit in the scheme has
During the year, the University‟s Treasury                       decreased by 18.9% to £24.2 million as at 31 July
Management Policy was amended in line with the                   2010 (2008-2009: £29.8 million). Following the
revised guidance contained in the CIFPA Treasury                 Government announcement on 8th July 2010 there
Management in the Public Services:      Code of                  has been a change in the way pension increases are
Practice and Cross-Sectoral Guidance Notes (Fully                measured with payments and deferments being
revised second edition 2009).                                    measured using CPI rather than RPI. This change
                                                                 has had a material effect on the University‟s
Changes to the limits included in the policy have                pension liability and resulted in a gain of £7.1m.
also been made in order to allow greater flexibility             The University has treated this gain as a change in
and the use of longer term deposit accounts. The                 actuarial assumptions and taken it through the
policy was reviewed by an independent Treasury                   Statement of Recognised Gain and Losses (see page
Specialist.                                                      30).

The University‟s deposit with Heritable Bank                     This reduction in gross liabilities has been partly
became at risk following the collapse of the banking             offset by a change in discount rate from 6% to 5.4%.
sector in Iceland during 2008-2009. To date the                  Also a contributory factor in the reduction in net
University has received £0.8 million in dividends,               liabilities is the strong recovery over the past year
which represents 42% of the original investment.                 of the pension fund‟s assets.

Accounting Policies                                              Risk and Risk Management

The University‟s Financial Statements have been                  The University has an established risk management
prepared in accordance with the Statement of                     policy which identifies management of risk as a
Principal Accounting Policies set out on pages 26 to             responsibility of all management post holders, as
27.                                                              appropriate to their level of accountability, led by
                                                                 the Vice-Chancellor. The Risk Management Group
In accordance with Financial Reporting Standard 18,              (RMG) has evolved an annual analysis process which
Accounting Policies, the University has reviewed its             identifies risk as perceived by the management
accounting policies to ensure that they remain                   team of each faculty and service, using a common
appropriate. There have been no changes to the                   scoring system to rank risks against which
accounting policies in the year.                                 appropriate management actions are then set.
                                                                 These are plotted by RMG to aggregate commonly
Pensions                                                         perceived risks across the organisation and to
                                                                 identify the top ten residual risks. The aggregate
The University has two defined benefit        pension            departmental output is then reviewed alongside the
schemes for staff, which are the Teachers‟    Pension            top ten institutional risks identified by the Vice
Scheme (TPS) and the Hampshire County         Council            Chancellor‟s Group (VCG) to ensure that the
Local   Government      Superannuation        Scheme             management team as a whole have a shared view of
(HCCLGSS).                                                       risk and the required actions to control these. VCG
                                                                 reviews its listing several times a year and adjusts
The Teachers‟ Pension Scheme is defined as a multi-              the institutional level risk management measures as
employer pension scheme under Financial Reporting                necessary to reflect this.
Standard 17 Retirement Benefits. The University is



                                                                                                                               9
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Governors‟ Report
As a largely teaching orientated institution these                      Equality Scheme
processes revolve mainly around the planning,
marketing, budgeting and student support measures                       The University launched an equality scheme in
necessary to recruit and retain students and protect                    January 2010.       The scheme, devised from the
funding, student and hall of residence fee income.                      findings of wide consultation amongst staff,
Conventional      business      recovery,     financial                 employees and external stakeholders, anticipated
management and health and safety action plans are                       many of the changes that were enacted in October
also in place. Latterly Government decision making                      2010 by the Equality Act 2010. The equality scheme
and funding factors and institutional reputational                      bought together and simplified a wide range of pre-
issues have been tracked closely as well because of                     existing policies, procedures and action-plans into a
the current volatility in the HE Sector environment.                    single scheme.

The Audit Committee (AC) of the Board of                                The launch of the scheme was highly successful and
Governors is briefed at each of its meetings on the                     described as „ahead of the game‟ by the Equality
latest VCG risk analysis update and progress on the                     Challenge Unit.    During 2009-10 the innovative
larger cycle of analysis and action planning. This                      events programme has drawn higher levels of
provides AC members with reassurance that                               engagement than previous approaches and the
executive action is underway and an opportunity to                      programme is scheduled to continue through 2010-
seek clarification where appropriate. The final                         11.
annual action plan is agreed with the University
Senior Management Team as part of this process to                       A further distinctive feature of the scheme is the
ensure their ownership and then endorsed by Audit                       inclusion of equality objectives within the
Committee.                                                              University‟s planning processes. Each faculty and
                                                                        service has been asked to indicate how its planning
In readiness for the 2010-11 cycle, some                                for 2010-11 addresses up to three (of the ten)
developments have been agreed in consultation                           equality objectives and a summary of these will be
with the internal auditors. RMG membership has                          published during October 2010.
been extended to include additional senior
managers from faculties and services who are not                        The ten objectives include the completion of the
members of the University‟s Management Board.                           University‟s first equal pay review. This will be
This will ensure that additional senior staff are                       done during October 2010 with publication planned
actively involved in the detailed review and analysis                   for November 2010. The University‟s approach has
of risk at University level which will, in turn,                        been to use proprietary equal pay audit software
influence their own management approach. As                             operated by an independent external provider,
Chair of RMG, the Director of Finance and Resources                     complemented by analysis and commentary
provides a direct link with VCG in reviewing all                        provided by an independent external expert
levels of risk across the University.                                   reviewer.

During 2009-2010 a start was made in mapping key                        Employee Engagement
University project risk analyses onto the University
matrix in addition to the departmental picture. The                     A major employee consultation is planned for March
full University risk register will comprise this                        2011. The purpose of the employee consultation is
aggregated picture, copies of all the faculty and                       to support forward planning by the University. This
service risk analysis tables, the VCG‟s Top Ten risk                    will include an emphasis on helping to inform
listing and an associated plan for managing these                       strategic planning, over a 3-5 year cycle that will
institutional risks.                                                    become a sensible and practical frequency for
                                                                        future employee consultations.
The aim is to provide a more transparent record of
top down and bottom up risk assessment. The Top                         The University, following a formal competitive
Ten risks continue to reflect the volatility in the                     tendering exercise, will be working with Positive
undergraduate recruitment markets as well as the                        People at the University of Bristol to devise,
broader political environment and government                            conduct and analyse the consultations.          The
financial constraints.                                                  selection criteria, by which Positive People were
                                                                        appointed, specifically included an assessment of
Creditor Payment Policy                                                 the degree to which suppliers had understood the
                                                                        Solent brief, confidence about the use of innovative
It is the University‟s policy to pay suppliers 30 days                  modern employee engagement approaches, and the
from the end of the month in which invoices are                         potential for award recognition/published work.
received, unless special terms have been
negotiated.


10
                                            Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Governors‟ Report
It is envisaged that the consultations will enable            The Governors have no financial interest in the
each employee to contribute ideas beyond the                  Corporation and receive no remuneration from the
traditional employment domain. For example, it                University in respect of their duties as Governors
may include seeking ideas about services to                   other than reimbursement of reasonable expenses
students, service developments, quality and value-            for travelling and subsistence.
for-money, together with specialist activities e.g.,
new employee learning needs, Health and Safety,               The majority of Governors are voluntary
Solent Green and Equality and Diversity.                      independent members, drawn from business or from
                                                              the wider educational world. They bring to the
Training                                                      Board a blend of commercial, professional and life
                                                              experience.    There are also internal members,
2009-10 saw some important developments in the                including the Vice-Chancellor, staff and the
approach taken by the University to training and              President of the Students‟ Union.
support for its employees. In line with the public
commitment to equality and social justice, the                The      University‟s   corporate     governance
principle of training open to all employees has been          arrangements are described on pages 15 to 21 and
adopted.       Clear priorities were established,             the members of the University Board of Governors
including support for the Solent Enterprise Centres,          during the year ended 31 July 2010 are listed on
implementing the Skills Pledge, improved customer             page 16.
and student-facing services, and the Solent
apprenticeship scheme.                                        The University is regulated principally by HEFCE
                                                              under a Financial Memorandum. The University
Individual training needs are identified and                  complies with conditions of grant set out in funding
progressed through the University‟s new appraisal             agreements with the relevant grantor.
scheme, which was in its second year of operation
during 2009-10. The new Solent Scholarship Scheme             The University‟s principal advisors are listed on
and Career Review Centre are also accessed through            page 46.
appraisal discussions.
                                                              PUBLIC BENEFIT
Additionally during 2009-10 the Centre for Real-
world Learning, based at the University of                    Under the Education Reform Act 1988, the
Winchester, was commissioned to undertake a                   University obtained charitable status.        The
learning needs analysis for the University. The               University is an exempt charity within the meaning
commission will help to support the multi-faceted             of the Charities Act 1960.
initiatives of the Strategic Development Programme
(2009-12).                                                    The Governors, as charity trustees of an exempt
                                                              charity, are aware of the guidance issued by the
Constitution, Governance and Regulation                       Charity Commission on public benefit. Given the
                                                              activities of the University and the student
The institution was incorporated under the                    population that it services, the Governors consider
Education Reform Act 1988 as a Higher Education               that the University meets its statutory requirements
Corporation with effect from 1 February 1989.                 in all respects.
Despite its educational designation as a University,
granted by the Privy Council in July 2005, its legal          Supporting economic growth
status as a Higher Education Corporation determines
aspects     of    the    University‟s    governance           The University is characterised by close engagement
arrangements, in particular the requirement to have           with its local and regional communities, a broad
a Board of Governors for which provision is made in           curriculum for the professions, applied research and
the Education Reform Act 1988 (Section 2iii).                 knowledge transfer activities. Based on a principled
                                                              commitment to social justice and economic
Under the Education Reform Act of 1988, the Board             competitiveness for Southampton and its region, we
of Governors is generally responsible for looking             engage strongly with our civic community. We have
after the public investment and the public interest           been, for example, the main driving force behind
at the University. The Governors are charged with             the Southampton Skills Development Zone (SSDZ).
determining the educational character and mission             The SSDZ is an innovative partnership between
of the University; overseeing its activities;                 education, the public sector and government
monitoring effective and efficient use of resources;          agencies     to    meet     employers‟     workforce
safeguarding the solvency and assets of the                   development needs and address wider objectives
University; approving annual estimates of income              relating to regional economic growth, worklessness
and expenditure; and overseeing matters concerning            and social inequality.
the employment of staff.

                                                                                                                           11
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Governors‟ Report
The University is acting as broker, alongside Business Southampton and the City Council, in various regional
initiatives to articulate and promote the interests of the Solent maritime sector, in its widest sense. In terms of
creative employer partnerships, we have also championed the concept of HE involvement in future regional
news gathering arrangements, mainly through a high level dialogue with ITV and Newsquest.

Supporting the local community

At local community level, the University is keen to ensure that it provides genuine, added value benefit to the
many voluntary and community groups seeking to address deprivation, hardship, and better social and
healthcare provision. Through the £6.2 million HEFCE-supported and match-funded South East Coastal
Communities project (SECC), the University seeks, for example, to work with disadvantaged groups in developing
sport coaching and mentoring activities, health and well-being initiatives and employment awareness-raising
campaigns through partnership projects.

The University works closely with organisations, such as Business in the Community, in a wide range of initiatives
seeking to engage with and support disadvantaged community groups; and is a founder member of LEADER (Local
Employers Acting on Equality, Diversity and Race), a partnership scheme to eradicate barriers to employment
and build career success for disadvantaged and under-represented people.

Widening Participation

The University is proud of its record in widening participation and remains committed to promoting equality of
opportunity. Our mission and related objectives as stated in our Strategic Plan 2008-2013 are testament to this
(see page 4 to 5).

The University has the highest proportion of entrants from the lower social classes, entrants from state schools
and entrants from low participation neighbourhoods when compared to other universities on the south coast;
and we are within the top forty institutions in England for the proportion of 2008-09 entrants from state schools,
lower social classes and low participation neighbourhoods.

The University is better than or equal to eleven of the fourteen location-adjusted benchmarks (compared with
nine last year) in the widening participation categories.

A scheme of bursaries and scholarships has been introduced to reflect the University mission and to influence
the composition of the student body. Further information can be found in our Access Agreement available at
www.offa.org.uk. Our Access Agreement also shows the range of additional outreach activities to inform
prospective students of the costs of higher education, the financial and academic support available and the
benefits in terms of career opportunities and future earnings.

The four performance indicators in the table below are key measures in the performance monitoring of the
University. They provide measures of participation from under-represented groups and are based on the annual
performance indicators produced by HEFCE.

 Performance Indicators                     Criteria             2008-2009           Baseline            Target
                                                                                     (2003 - 2004)       groups
  Young (under 21) full-time        At or above                  SSU : 11.0%         SSU : 11.7%         Lower socio-
  undergraduate entrants from low benchmark                      Benchmark: 10.3%*   Benchmark: 10.6%*   economic
  participation neighbourhoods      level for year                                                       groups
  Young (under 21) full-time        At or above                  SSU : 96.2%         SSU : 95%           Lower socio-
  undergraduate entrants from       benchmark                    Benchmark: 95.6%    Benchmark: 90%      economic
  state schools                     level for year                                                       groups
  Young full-time first degree      At or above                  SSU : 38.5%         SSU : 32%           Lower socio-
  entrants from social classes      benchmark                    Benchmark: 39.5%    Benchmark: 34%      economic
  IIIM,IV,V                         level for year                                                       groups
  Mature (over 21) full-time        At or above                  SSU : 13.6%         SSU : 11%           Lower socio-
  undergraduate entrants from no    benchmark                    Benchmark: 13.3%    Benchmark: 17%      economic
  previous HE experience and low    level for year                                                       groups
  participation neighbourhoods
* Indicates locally adjusted benchmark



12
                                            Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Governors‟ Report
We will seek to maintain or improve our                       signed with FE providers to develop progression
performance by consistently performing better than            opportunities   for    particularly    disadvantaged
the benchmark in the measures above. In addition,             students.     The SDP is underpinned by the
through the work of our Research and Information              development of new business systems, such as
Unit we will continue to monitor, evaluate and                student attendance monitoring, and by the provision
modify our approach to ensure that all those with             of specialist guidance through a Flexible
the potential to benefit from higher education at             Development and Delivery Support Team and the
the University have the opportunity to do so.                 Head of Employer Led Learning. Capacity-building
                                                              is crucial to the success of the SDP and it is
Environmental sustainability policy                           therefore important to note that over 35% of
                                                              academic and support staff have been directly
The University is committed to ensuring that its              engaged in projects, workshops and staff
operations and activities are conducted with proper           development in the first year of the programme.
regard for the environment. In April 2009, it joined
the Carbon Trust‟s Higher Education Carbon                    Strategic priorities for 2010-11
Management Programme.           Since joining the
programme, the University has undertaken a                    Strategic priorities for 2010-11 have been developed
systematic analysis of its carbon footprint and               by senior management from the objectives set out
evaluated a wide range of opportunities for                   in the University‟s Strategic Plan 2008-13. The
managing its carbon emissions.        As the main             institution will place emphasis on:
outcome of the work, a Carbon Management Plan
                                                              i)   a renewed focus on student recruitment,
has been produced. The plan was approved in
                                                                   including both part-time and international
March 2010 and a copy is available on the
                                                                   students;
University‟s website.
                                                              ii) the    implementation     of  its    Strategic
The plan targets a 25% reduction in carbon                        Development       Programme,   including     a
emissions between 2010 and 2014, and sets out a                   heightened     emphasis    on   organisational
direction of travel consistent with HEFCE‟s „Carbon               development and capacity-building for a
Reduction Target and Strategy for Higher Education                sustainable future;
in England‟ published in January 2010.
                                                              iii) working in partnership, particularly with the
                                                                   maritime, media and public sectors, to create
The University also joined the EcoCampus Project
                                                                   new forms of employer engagement and
this year. Its membership will be used to drive the
                                                                   enhance student employability.
University‟s environmental and sustainability
agenda over the next few years.
                                                              Student Recruitment

FUTURE DEVELOPMENTS                                           Recruitment remains a top priority, especially with
                                                              the    challenges     presented     by    increased
The      HEFCE-funded     Strategic     Development           „marketisation‟ and the rise of private providers of
Programme      (SDP)   aims     to    enhance   the           higher education. Although the limitations of the
distinctiveness and sustainability of the University          Government-imposed student number control are a
through the acceleration of the current Strategic             constraint on the development of new programmes,
Plan.    More flexible forms of delivery, deeper              the University will create headroom through the
engagement with employers, and new forms of                   adjustment of the existing academic portfolio in
progression are the central objectives of the SDP.            2010-11. Analysis of the strengths and weaknesses
At the time of writing, in anticipation of funding            of the portfolio will create capacity for the
cuts resulting from the Comprehensive Spending                expansion of more successful programmes and the
Review (CSR) and radical changes in HE policy and             introduction of a limited number of new
funding, the University believes that both tempo              developments     through    the    contraction    or
and objectives continue to be highly relevant.                withdrawal of a number of courses.             New
                                                              developments will be closely linked to patterns of
Work commenced in July 2009 with four major                   student demand in preparation for the post-Browne
faculty projects primarily focused on the                     fees regime and to the potential offered by the
development of employer-responsive provision.                 international market.
During 2009-10, key quality assurance systems have
been amended to support the SDP objective of                  In developing the international dimensions of its
delivering more flexible provision: for example, the          activities, the University will focus on four areas:
introduction of a two-tier system of Examination              exchange schemes; recruitment; student support
Boards allows faculties to respond more effectively           and internationalisation of the curriculum.
to the needs of both non-standard and standard
learners. Three Partnership Accords have been
                                                                                                                           13
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Governors‟ Report
New academic developments

The achievement of distinctiveness and sustainability continues to determine the direction of academic
developments at the University. Portfolio development will focus on the needs of employers and the provision
of work-related experience for students. Strengthening student employability remains crucial: the creation of a
team of placement co-ordinators will help to achieve the University‟s objective of giving every student a form of
work-related experience during their programme of study.

The University will continue to explore the market for part-time and employer-based provision. A significant
number of professional development units, geared to the needs of specific employers, were validated in 2009-
10, for introduction in 2010-11. Co-location with employers and closer relationships with key areas such as
media, maritime and the public sector will continue to inform portfolio priorities.

CONCLUSION
The University faces the future from a relatively strong position, certainly in terms of financial strength, a good
record of cost control, and a proven ability to attract and manage responsibly optimal student numbers. The
Browne Review and the imminent (at the time of writing) CSR will undoubtedly bring major challenges. Much
will depend on the fine details of implementation – details which are still to be defined. We are confident that
the changes, improvements and initiatives that we are now vigorously implementing will put us in the best
possible position to meet those challenges and secure a successful, sustainable future.




Grahame Sewell                                                              Professor Van Gore
Chairman of the Board of Governors                                          Vice-Chancellor
17 November 2010




14
                                               Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Corporate Governance Statement
Corporate Governance and Accountability                          The Board of Governors met four times during 2009-
Arrangements                                                     2010. It has five key committees which report to it:
                                                                 Audit (formerly Audit & Governance); Resources;
The University is committed to exhibiting best                   Governance (which from February 2010 onwards has
practice in all aspects of corporate governance.                 assumed the governance aspects of the Board‟s
This summary describes the manner in which the                   business formerly assigned to the Audit &
University has applied the principles set out in                 Governance Committee, and the responsibilities of
Section 1 of the Combined Code on Corporate                      the former Nominations Committee); Remuneration
Governance issued by the London Stock Exchange in                and the Student Liaison Committee. All of these
June 1998 and the Higgs Report issued by the                     committees are formally constituted with terms of
Financial Reporting Council in July 2003 in so far as            reference and, with the exception of the Student
they relate to universities. Its purpose is to help              Liaison Committee, comprise mainly external
the reader of the Financial Statements understand
                                                                 members of the Board of Governors, one of whom is
how the principles have been applied.            The
                                                                 the Chairman of the Committee. Their membership
University has put systems in place for identifying,
                                                                 and remit is given on page 16. All attendance
evaluating and managing its significant risks. The
                                                                 figures are calculated based on meetings Governors
processes are reviewed regularly by the University
under the guidance of a Risk Management Group,                   were eligible to attend during the period of their
which reports to the Audit and Governance                        tenure.     The Board approves the University‟s
Committee.                                                       Strategic Plan. An annual evaluation of the business
                                                                 conducted by the Board and each of its committees
In February 2009 the Committee of University                     concluded that each committee‟s Terms of
Chairmen issued a Guide for Members of Higher                    Reference had been covered during the year.
Education Governing Bodies in the UK which
incorporates a Governance Code of Practice. This
code is voluntary and is intended to reflect good
practice in the sector. The Board has regard to the
Governance Code of Practice in its governance
arrangements and has adopted the Statement of
Primary Responsibilities contained in the Guide.

The Board of Governors

The University‟s Governors comprise external and
internal persons appointed under the Instrument
and Articles of Government of the University, the
majority of whom are non-executive. The roles of
Chairman and Vice-Chairman of the Board of
Governors are separated from the role of the
University‟s Vice-Chancellor.          The matters
specifically reserved to the Governors for decision
are set out in the Articles of the University, by
custom and under the Financial Memorandum with
HEFCE. The Board of Governors holds to itself the
responsibilities for the ongoing strategic direction of
the University, approval of major developments and
the receipt of regular reports from executive
officers on the operations of its business and of its
subsidiary companies.




                                                                                                                              15
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Corporate Governance Statement
Governors                                                                                                  Attendance at
                                                                                                          Board Meetings
                                                                                                                       %
Professor P Bush                Independent Governor                                                                 75
Ms R Cassy                      Independent Governor                                 To February 2010               100
Mr J Cheshire                   Independent Governor                                                                100
Ms A Colley                     Independent Governor                                 From August 2010               N/A
Dr R Drabu                      Co-opted External Governor                           To October 2009                N/A
Professor V Gore                Vice-Chancellor, Ex-officio Governor                                                100
Mr A Kent                       Independent Governor                                 To February 2010               100
Mr K King                       Independent Governor, Vice-Chairman                                                 100
Mr G Holland                    Independent Governor                                 From August 2010               N/A
Rear Admiral J Lang             Independent Governor                                 To March 2010                  100
Dr L Lee                        Independent Governor                                 From August 2009               100
Dr R Marasini                   Staff Governor                                       From August 2009                75
Ms C Millward                   Staff Governor                                       From August 2009               100
Dr Jo Mountfield                Independent Governor                                 From November 2009             100
Mr A Parker                     Student Governor                                     To June 2010                    67
Mrs P Powell                    Independent Governor                                                                 75
Mr D Prendergast                Student Governor                                     From July 2010                 100
Mr J Prest                      Independent Governor                                                                 75
Mr S Rose                       Staff Governor                                       From August 2009               100
Mr G Sewell                     Independent Governor, Chairman                                                      100
Dr J Sexton                     Independent Governor                                 To February 2010               100
Councillor R Smith              Co-opted External Governor                                                           75
Dr J Stopp                      Independent Governor                                 From August 2010               N/A
Professor G Tonge               Independent Governor                                 To December 2009                 0
Captain A Winbow                Independent Governor                                 To February 2010               100
Clerk to the Governors

Dr A Earwaker                                                                        To November 2009               100
Ms B Woolven                                                                         From June 2010                 100




16
                                             Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Corporate Governance Statement
Resources Committee

The Resources Committee considers and keeps under review such strategic aspects of finance and resource
management as are required for the fulfilment of the Strategic Plan. These include: the recommendation to the
Board of Governors of an annual budget, both revenue and capital; regular monitoring of management accounts
and progress of the capital programme against approval; review and recommendation to the Board of Governors
of annual Financial Statements; advice to the Board of Governors on employment policy; approval of a
framework for the pay and conditions of staff other than senior post-holders.

The Resources Committee met three times during 2009-2010. All meetings were quorate. Membership of the
Resources Committee during the year is given below, with all members eligible to attend all meetings during the
period of their tenure as committee members. Each member‟s attendance at the Committee meetings during
the year is given as a percentage figure.

Membership of Resources Committee

Membership:                                                                                                 Attendance %
Mr J Cheshire             Independent Governor                                                                            67
Ms A Colley               Independent Governor                           From August 2010                               N/A
Dr R Drabu                Co-opted External Governor                     To October 2009                                N/A
Mr G Holland              Independent Governor                           From August 2010                               N/A
Mr K King - Chairman      Independent Governor                                                                           100
Dr L Lee                  Independent Governor                                                                           100
Ms C Millward             Staff Governor                                 From March 2010                                 100
Mrs P Powell              Independent Governor                           To February 2010                                100
Dr J Sexton               Independent Governor                           To February 2010                                100
Captain A Winbow          Independent Governor                           To February 2010                                100
Officers normally in attendance:

Mr S Bloor                Director of Human Resources
Mr S Carter               Director of Finance
Mr D Corless              Director of Estates & Facilities
Dr A Earwaker             Clerk to the Governors                         To November 2009
Professor V Gore          Vice-Chancellor, Ex-officio Governor
Mrs K Janagal             Head of Accounts
Professor J Latham        Deputy Vice-Chancellor                         To December 2009
Ms B Woolven              Clerk to the Governors                         From June 2010




                                                                                                                            17
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Corporate Governance Statement
Audit Committee
The Audit Committee‟s remit includes advising the Board of Governors on the appointment of both external and
internal auditors. It also considers and agrees audit plans and scope for the internal auditors in the context of
key risks faced by the University, and reviews both the internal and external auditors‟ respective
recommendations for improvement of the University‟s systems of internal control, together with management‟s
responses and implementation plans. It considers arrangements that are in place to promote economy,
efficiency and effectiveness, and receives and considers reports from HEFCE as they affect the University‟s
business and monitors compliance with the regulatory requirements. Whilst senior executives attend the
meetings of the Audit Committee as necessary, they are not members of the Committee. The Committee meets
with the external and internal auditors on their own prior to the start of the meeting which considers the
University‟s annual Financial Statements.

The Audit Committee keeps under review recommended best practice with regard to institutional governance
and practice in other institutions.

The Audit Committee met four times during 2009-2010. All meetings were quorate. Membership of the Audit
Committee during the year is given below, with all members eligible to attend all meetings during the period of
their tenure as Committee members. Each member‟s attendance at the Committee meetings during the year is
given as a percentage figure.

Membership of Audit Committee

Membership:                                                                                                Attendance %
Mr A Kent                       Independent Governor                                 To February 2010               100
Rear Admiral J Lang –           Independent Governor                                 To March 2010                  100
Chairman
Mr J McGibbon                   Co-opted external member                                                            100
Dr J Mountfield                 Independent Governor                                 From March 2010                100
Mrs P Powell                    Independent Governor                                 From March 2010                 50
Mr J Prest – Chairman           Independent Governor                                 Chairman from April            100
                                                                                     2010
Councillor R Smith              Co-opted external Governor                           To February 2010                 0
Officers normally in attendance:

Mr S Carter                     Director of Finance
Mrs K Clark                     Head of Accounts
Dr A Earwaker                   Clerk to the Governors                               To November 2009
Professor V Gore                Vice-Chancellor, Ex-officio Governor                 From March 2010
Professor J Latham              Deputy Vice-Chancellor                               To December 2009
Ms B Woolven                    Clerk to the Governors                               From June 2010




18
                                           Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Corporate Governance Statement
Governance Committee
The Governance Committee (which from February 2010 assumed the governance aspects of the Board‟s business
formerly assigned to the former Audit & Governance, and the responsibilities of the former Nominations
Committees) keeps under review the membership of the Board of Governors and its Committees and makes
recommendations to the Board for new, independent, and co-opted external members. It oversees the
induction, training and development of the members of the Board, and ensures that the Board and its
Committees evaluate their performance on a regular basis.

The Governance Committee also reviews the University‟s governing instruments on a regular basis, and considers
the effectiveness of the arrangements to select and recruit the Chairman and Vice-Chairman of the Board, the
Clerk to Governors, and the University Chancellor and Vice-Chancellor.

The Governance Committee met twice during 2009-2010. All meetings were quorate. Membership of the
Governance Committee during the year is given below, with all members eligible to attend all meetings during
the period of their tenure as committee members. Each member‟s attendance at the Committee meetings
during the year is given as a percentage figure.


Membership of Governance Committee

Membership:                                                                                               Attendance %
Ms R Cassy                Independent Governor                         To February 2010                               N/A
Professor V Gore          Governor ex-officio                                                                          100
Mr K King                 Independent Governor                                                                         100
Rear Admiral J Lang       Independent Governor                         To April 2010                                  N/A
Dr R Marasini             Staff Governor                               From March 2010                                 100
Professor G Sewell -      Independent Governor                                                                         100
Chairman
Councillor R Smith        Co-opted External Governor                   From March 2010                                    0
Professor D Watkins       Vice-Chancellor‟s nominee from                                                               100
                          Professoriate
Officers normally in attendance:

Dr A Earwaker             Clerk to the Governors                       To November 2009
Ms B Woolven              Clerk to the Governors                       From June 2010




                                                                                                                          19
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Corporate Governance Statement
Student Liaison Committee
The Student Liaison Committee operates as a channel of communication between the Board of Governors and
the Students‟ Union. It also endorses the appointment of the Union‟s General Manager and his or her terms of
employment and advises in relation to the appointment of auditors to the Union.

The Student Liaison Committee met three times during 2009-2010. All meetings were quorate. Membership of
the Student Liaison Committee during the year is given below, with all members eligible to attend all meetings
during the period of their tenure as committee members. Each member‟s attendance at the Committee
meetings during the year is given as a percentage figure.

Membership of Student Liaison Committee

Membership:                                                                                               Attendance %
Ms R Cassy – Chairman           Independent Governor                                                               100
to February 2010
Mr L Hasler                     SSU Vice-President, Development                      From November 2009            100
                                                                                     to June 2010
Miss S Hobbs                    SSU Vice-President, Development                      From July 2010               N/A
Miss T Jeynes                   Academic Affairs Officer                             From November 2009              0
                                                                                     to June 2010
Professor J Latham              Vice-Chancellor‟s Nominee                            To December 2009              100
Professor J Longmore            Vice-Chancellor‟s Nominee                            From January 2010             100
Dr R Marasini                   Staff Governor                                       To February 2010              100
Ms C Millward                   Staff Governor                                       To February 2010              100
Dr J Mountfield                 Independent Governor                                 From December 2009            100
Miss A Okada                    SSU Vice-President, Student Support                  From July 2010               N/A
Mr A Parker                     SSU Vice-President, Communications                   To June 2010                  100
                                and Student Governor
Mr D Prendergast                SSU President and Student Governor                   From July 2010               N/A
Mr S Rose – Chairman            Staff Governor                                                                     100
from March 2010
Dr J Sexton                     Independent Governor                                 From December 2009            100
                                                                                     to February 2010
Miss L Smith                    SSU Vice-President, Communications                   From July 2010               N/A
Dr J Stopp                      Independent Governor                                 From August 2010             N/A
Mr S Ward                       SSU Vice-President, Student Support                  To June 2010                  100
Officers normally in attendance:

Ms A Clodfelter                 SSU General Manager
Dr A Earwaker                   Clerk to the Governors                               To November 2009
Ms B Woolven                    Clerk to the Governors                               From June 2010




20
                                           Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Corporate Governance Statement
Remuneration Committee
The Remuneration Committee determines the annual remuneration of the University‟s Vice-Chancellor and
senior post-holders, the scheme for remuneration of staff on management contracts, and individual severance
arrangements.

The Remuneration Committee met four times during 2009-2010. All meetings were quorate. Membership of the
Remuneration Committee during the year is given below, with all members eligible to attend all meetings during
the period of their tenure as committee members. Each member‟s attendance at the Committee meetings
during the year is given as a percentage figure.

Membership of Remuneration Committee

Membership:                                                                                               Attendance %
Professor P Bush          Independent Governor                                                                          75
Ms A Colley               Independent Governor                               From August 2010                         N/A
Dr L Lee                  Independent Governor                               From March 2010                           100
Mrs P Powell              Independent Governor                               To February 2010                           50
Mr G Sewell – Chairman    Independent Governor                                                                         100
Captain A Winbow          Independent Governor                               To February 2010                          100
Officers normally in attendance:

Mr S Bloor                Director of Human Resources
Professor V Gore          Vice-Chancellor, Ex-officio Governor
Professor J Latham        Deputy Vice-Chancellor                             To December 2009




Approved by the Board of Governors on 17 November 2010
and signed on its behalf by:




Grahame Sewell                                              Professor V Gore
Chairman of the Board of Governors                          Vice-Chancellor
                                                                                                                          21
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Responsibilities of the University‟s Board of Governors
In accordance with the Education Reform Act 1988                        in the Instrument and Articles and the Financial
and the Instrument and Articles of Government, the                      Memorandum with HEFCE.
Board of Governors is responsible for the
administration and management of the affairs of the                     The system of internal control is designed to
University, including ensuring an effective system of                   manage rather than eliminate the risk of failure to
internal control and is required to present audited                     achieve policies, aims and objectives; it can
Financial Statements for each financial year.                           therefore only provide reasonable and not absolute
                                                                        assurance of effectiveness.
The Board of Governors is responsible for keeping
proper accounting records which disclose with                           The system of internal control is based on an
reasonable accuracy, at any time, the financial                         ongoing process designed to identify the principal
position of the University and to enable it to ensure                   risks to the achievement of policies, aims and
that the Financial Statements are prepared in                           objectives, to evaluate the nature and extent of
accordance with the Education Reform Act 1988,                          those risks and to manage them efficiently,
the    Statement     of    Recommended       Practice:                  effectively and economically. This process has been
Accounting for Further and Higher Education and                         in place throughout the year and up to the date of
other relevant accounting standards. In addition,                       approval of the Financial Statements and accords
within the terms and conditions of the Financial                        with the HEFCE guidance.
Memorandum agreed between HEFCE and the Board
of Governors of the University, the Board of                            As the Board of Governors, we have responsibility
Governors, through its designated office holder, is                     for reviewing the effectiveness of the system of
required to prepare Financial Statements for each                       internal control. The University has established the
financial year which give a true and fair view of the                   following processes:
state of affairs of the University and of the surplus
or deficit and cash flows for that year.                                    the Board of Governors annually monitors the
                                                                             delivery of the University‟s Strategic Plan and
Financial Statements                                                         considers the corporate planning proposals for
                                                                             the following year. As part of its monitoring
In causing the Financial Statements to be prepared,                          process, the Board determines the annual risk
the Board of Governors has ensured that:                                     matrix for the University as well as approving
    suitable accounting policies are selected and                           the Corporate Planning Statements, Annual
     applied consistently;                                                   Monitoring Statements and Financial Forecasts
                                                                             which are sent to HEFCE;
    judgements and estimates are made that are                             the Board of Governors has requested the Audit
     reasonable and prudent;                                                 Committee to provide oversight of risk
    applicable accounting standards have been                               management and a Risk Management Group has
     followed, subject to any material departures                            been established with Governor representation
     disclosed and explained in the Financial                                and the Audit Committee receives a report at
     Statements;                                                             each of its meetings on any movement in the
                                                                             ten major risks for the University identified for
    Financial Statements are prepared on the going                          that year. Any matters of concern would be
     concern basis unless it is inappropriate to                             reported to the Board of Governors;
     presume that the University will continue in                           the Board of Governors has requested the Audit
     operation. The Board of Governors is satisfied                          Committee to provide an opinion on the quality
     that it has adequate resources to continue in                           assurance of data provided to HEFCE, HESA and
     operation for the foreseeable future: for this                          other public bodies. In order to provide the
     reason the going concern basis continues to be                          opinion, the Committee seeks and assesses
     adopted in the preparation of the Financial                             information and evidence from management
     Statements.                                                             and auditors during the course of the year;
                                                                            the Board of Governors receives regular reports
Internal Controls                                                            from the chair of the Audit Committee
                                                                             concerning internal control;
As the Board of Governors of Southampton Solent                             the Audit Committee receives regular reports
University, we have responsibility for maintaining a                         from Internal Audit (IA) which includes the IA‟s
sound system of internal control that supports the                           independent opinion on the adequacy and
achievement of policies, aims and objectives, whilst                         effectiveness of the University‟s system of
safeguarding the public and other funds and assets                           internal control together with recommendations
for which we are responsible, in accordance with                             for improvement;
the responsibilities assigned to the governing body



22
                                                Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Responsibilities of the University‟s Board of Governors
   a regular process of meetings, workshops and                  reviewed: governance, audit arrangements and
    discussions is used at both University level and              financial,   strategic    and   risk   management.
    cascaded through individual faculties and                     Subsequent to the visit HEFCE issued their Audit
    services to identify and keep up to date the                  Report in January 2007, which confirmed a
    record of risks facing the University;                        satisfactory level of assurance in each of the areas
   a programme of risk awareness training is                     that were assessed and advised that the University
    ongoing;                                                      was not at higher risk, the most positive judgement
   a system of key performance and risk indicators               that HEFCE could bestow. The HEFCE has confirmed
    has been developed;                                           that it will be undertaking its next periodic
   the Board of Governors sets the policy where                  assurance visit on 17 November 2010.
    the University does not seek to recover the full
    cost of its activities. A robust risk prioritisation          As part of its 2008-2009 audit plan, the HEFCE
    methodology based on risk ranking and cost-                   Assurance Services undertook an audit of the
    benefit analysis has been established;                        University‟s HE Students Early Statistics Survey
   a University-wide risk register is maintained;                2007-2008 (HESES07) return in September 2008.
   reports are received from budget holders,                     HEFCE‟s subsequent Report concluded that they had
    department heads and project managers on                      gained assurance over the systems and protocols
    internal control activities.                                  used in deriving the return and over the accuracy of
                                                                  the return in terms of the funding position.
Our review of the effectiveness of the system of
internal control is informed by the work of the                   Guidance issued by the Committee of University
internal auditors and the executive managers within               Chairmen (CUC) recommends that a governing body
the University who have responsibility for the                    should keep its effectiveness under regular review.
development and maintenance of the internal                       According to the CUC this should include a “formal
control framework and comments made by the                        and rigorous evaluation of its own effectiveness and
external auditors in their management letter and                  that of its committees … not less than every five
other reports.                                                    years”. The last major review of the University‟s
                                                                  governance arrangements was undertaken during
The University uses a third party audit firm to                   2006-2007.     The report of that review was
provide internal audit services. During the year the              considered by the Board of Governors in November
University retendered the internal audit contract                 2007.
and appointed Kingston City Group. The consortium
operates to standards defined in the Accountability               The main focus of the review was the role to be
and Audit: HEFCE Code of Practice which was last                  played by the Board in overseeing the strategic
reviewed for effectiveness by the HEFCE Audit                     development of the University and the structure of
Service in 2007.     The internal auditors submit                 the Board most appropriate to discharge that
regular reports which include the IA‟s independent                responsibility.
opinion on the adequacy and effectiveness of the
University‟s system of internal control together with             The conclusions of the review recommended a
recommendations for improvement.                                  reduction in the size and changes in the composition
                                                                  of the Board of Governors and a different form of
Through its Assurance Services, HEFCE visits higher               engagement in strategic planning on the part of
education institutions every three to five years with             Governors compared with previous strategic
the objective of evaluating each University‟s risk                planning reviews as the University developed its
management, control and governance and its                        new strategic plan for the period 2008-2013.
arrangements to achieve value for money. An
auditor from HEFCE visited the University in October              Planning for the next major review is scheduled for
2006. The following core aspects of operation were                July 2011.


Approved by the Board of Governors on 17 November 2010 and signed on its behalf by:




Grahame Sewell
Chairman of the Board of Governors



                                                                                                                               23
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Independent Auditor‟s Report
We have audited the Financial Statements of                             Memorandum with the Higher Education Funding
Southampton Solent University for the year ended                        Council for England. We read the other information
31st July 2010 which comprise the Consolidated                          contained in the Governors‟ Report and consider
Income and Expenditure Account,7 the Balance                            whether it is consistent with the audited Financial
Sheets for the Group and the University, the                            Statements. The other information comprises only
Consolidated Cash Flow Statement, the Statement                         the Corporate Governance Statement and the
of Total Recognised Gains and Losses, Statement of                      Statement of the Responsibilities of the Board of
Historical Costs Surpluses and Deficits and the                         Governors. We consider the implications for our
related notes. These Financial Statements have                          report if we become aware of any apparent
been prepared under the accounting policies set out                     misstatements or material inconsistencies with the
on therein.                                                             Financial Statements. Our responsibilities do not
                                                                        extend to any other information.
Respective responsibilities           of   the    Board     of
Governors and Auditors                                                  Our report has been prepared pursuant to the
                                                                        requirements of the University‟s statutes and for no
As described in the Statement of Board of Governors                     other purpose. No person is entitled to rely on this
responsibilities the University‟s Board is responsible                  report unless such a person is a person entitled to
for preparing the annual report and the Financial                       rely upon this report by virtue of and for the
Statements in accordance with applicable law and                        purpose of the University‟s statutes or has been
United Kingdom Accounting Standards (United                             expressly authorised to do so by our prior written
Kingdom Generally Accepted Accounting Practice)                         consent.     Save as above, we do not accept
and the Statement of Recommended Practice on                            responsibility for this report to any other person or
Accounting in Further and Higher Education                              for any other purpose and we hereby expressly
Institutions.                                                           disclaim any and all such liability.

Our responsibility is to audit the Financial                            Basis of audit opinion
Statements in accordance with relevant legal
and regulatory requirements and International                           We conducted our audit in accordance with
Standards on Auditing (UK and Ireland) and the                          International Standards on Auditing (UK and Ireland)
Audit Code of Practice issued by the Higher                             issued by the Auditing Practices Board and the Audit
Education Funding Council for England.                                  Code of Practice issued by the Higher Education
                                                                        Funding Council for England. An audit includes
We report to you our opinion as to whether the                          examination, on a test basis, of evidence relevant
Financial Statements give a true and fair view and                      to the amounts and disclosures in the Financial
are properly prepared in accordance with the                            Statements. It also includes an assessment of the
Statement of Recommended Practice on Accounting                         significant estimates and judgements made by the
in Further and Higher Education Institutions. We                        University in the preparation of the Financial
also report to you if, in our opinion, the information                  Statements and of whether the accounting policies
given in the Governors‟ Report is not consistent with                   are appropriate to the circumstances of the
the Financial Statements, the Board has not kept                        University and the group, consistently applied and
proper accounting records, if we have not received                      adequately disclosed.
all the information and explanations we require for
our audit, or if information specified by law                           We planned and performed our audit so as to obtain
regarding the remuneration of the Board of                              all the information and explanations which we
Governors or other transactions is not disclosed.                       considered necessary in order to provide us with
                                                                        sufficient evidence to give reasonable assurance
We also report to you whether income from funding                       that the Financial Statements are free from
bodies, grants and income for specific purposes and                     material misstatement, whether caused by fraud or
from other restricted funds administered by the                         other irregularity or error. In forming our opinion,
University have been properly applied only for the                      we also evaluated the overall adequacy of the
purposes for which they were received and whether                       presentation of information in the Financial
income has been applied in accordance with the                          Statements.
Statutes and, where appropriate, with the Financial




24
                                             Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Independent Auditor‟s Report
OPINION

In our opinion:
 the Financial Statements give a true and fair view, in accordance with United Kingdom Generally Accepted
    Accounting Practice, of the state of affairs of the Group as at 31 July 2010 and of its surplus of income over
    expenditure for the year then ended;

   the Financial Statements give a true and fair view, in accordance with United Kingdom Generally Accepted
    Accounting Practice, of the state of affairs of the University as at 31 July 2010;

   the Financial Statements have been properly prepared in accordance with the Statement of Recommended
    Practice: „Accounting for Further and Higher Education Institutions‟;

   income from the Higher Education Funding Council for England, grants and income for specific purposes and
    from other restricted funds administered by the University have been applied for the purposes for which
    they were received; and

   the information given in the Governors‟ Report is consistent with the financial statements;

   income has been applied in accordance with the University‟s statutes and where appropriate with the
    applicable Financial Memorandum with the Higher Education Funding Council for England.




BDO LLP
Chartered Accountants and Registered Auditors
Southampton
United Kingdom
17 November 2010
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).




                                                                                                                            25
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Statement of Principal Accounting Policies
The following accounting policies have been applied                     Freehold buildings             - over 50 years
consistently in dealing with items which are                            Long Leasehold buildings       - over the life of the
considered material in relation to the Financial                                                         lease up to 50
Statements.                                                                                              years. For leases
                                                                                                         longer than 50
Basis of preparation                                                                                     years, over the
These Financial Statements have been prepared                                                            greater of 50 years
under the historical cost convention (modified by                                                        or 75% of the life
the revaluation of certain land and buildings), in                                                       of the lease
accordance with the Statement of Recommended                            Computer equipment             - over 3 years
Practice (SORP): Accounting for Further and Higher                      Other equipment                - over 5 to 15 years
Education July 2007 and in compliance with
applicable Accounting Standards.
                                                                        Vehicles                       - over 5 years
                                                                        Vessels                        - over 7 years
Fixed Assets
i.      Inherited Assets – land and buildings
As a consequence of the Education Reform Act                            Stocks
1988, the freehold interest in the land and buildings                   Stocks are mainly departmental and have limited
occupied by the University was transferred from                         realisable value. They are written off in the year,
Hampshire County Council with effect from 1 April                       as their value is not material to the accounts of the
1989. These were not valued prior to transfer. On                       University. Expenditure on consumables is charged
31 July 1998 a valuation of the open market for                         fully to revenue in the year of purchase.
existing use was made by Chesterton International
Limited, a firm of international property advisors,                     Revenue Recognition
using the depreciated replacement cost basis. The                       Grants from HEFCE and similar bodies are included
property is recorded in the Financial Statements at                     in income in the year, except for grants received for
this value, as adjusted for subsequent disposals. It                    specific initiatives which span more than one year.
is the University‟s policy to recognise a related                       In such cases grant income is deferred to the extent
revaluation reserve in respect of this property.                        it is not matched by qualifying expenditure.
Under the transitional arrangements of FRS 15, this
1998 valuation is retained as the carrying amount                       All income from short-term deposits, tuition fees
for those assets within that valuation, subject to                      and other operating income is credited to the
annual testing for indicators of impairment under                       Income & Expenditure Account on a receivable
FRS 11.                                                                 basis.

ii.     Assets acquired after incorporation                             Building Maintenance
Tangible asset additions whose cost of acquisition                      Expenditure on building maintenance is charged to
exceeds £10,000 are capitalised. Items costing less                     the Income and Expenditure Account in the year in
than this are written off in the year of purchase.                      which it is incurred. The University maintains a
                                                                        rolling ten-year long-term maintenance plan, which
iii.    Assets under construction                                       is reviewed on a regular basis. Only to the extent
Assets under construction represent the costs of                        that the costs arise under dilapidation clauses
assets under development. As these assets become                        within operating leases is a regular charge made to
complete and operational they are transferred to                        the Income and Expenditure Account on the basis
the appropriate asset category and depreciated over                     that the dilapidating event is deemed to be the
their useful lives.                                                     passage of time, subject to periodic valuation.

Capital Grants                                                          Taxation
Capital grants are released to revenue over the                         The University is an exempt charity within the
useful life of relevant assets, or where permitted                      meaning of schedule 2 of the Charities Act 1993
applications to non-capitalised expenditure occur,                      and, as such, is a charity within the meaning of
to match that expenditure in the year of                                section 506(1) of the Taxes Act 1988. Accordingly
application.                                                            the University is potentially exempt from taxation in
                                                                        respect of income or capital gains received within
Depreciation                                                            categories covered by section 505 of the Taxes Act
Depreciation is provided on all tangible assets other                   1988 or section 256 of the Taxation and Chargeable
than freehold or long leasehold land and assets                         Gains Act 1992 to the extent that such income or
under construction, at rates calculated to write off                    gains are applied to exclusively charitable purposes.
the cost or valuation, less estimated residual value,                   The University receives no similar exemption in
of each asset systematically over its expected useful                   respect of Value Added Tax.
life, as follows:

26
                                               Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Statement of Principal Accounting Policies
Provisions                                                       Pension costs in respect of the TPS charged to the
A provision is recognised in the Financial Statements            income and expenditure are equal to the
when a present legal or constructive obligation                  contributions paid to this arrangement.          The
arising from past events exists and it is probable               contribution rate is calculated in such a way that it
that an outflow of economic benefits will be                     is a substantially level percentage of current and
required to settle the obligation.                               future pensionable payroll. Not less than every four
                                                                 years, with a supporting interim valuation in
Basis of Consolidation                                           between, the Government Actuary conducts a
The University has one wholly owned subsidiary                   formal actuarial review of the TPS in order to
undertaking, Southampton Solent University Limited               specify the level of future contributions.
(SSUL). The activities of SSUL are consolidated
within the University‟s accounts in accordance with              Cash Flows and Liquid Resources
FRS 2.                                                           Cash flows comprise increases or decreases in cash.
                                                                 Cash includes cash in hand, deposits repayable on
The consolidated Financial Statements do not                     demand and overdrafts. Deposits are repayable on
include those of the Solent Students‟ Union as it is a           demand if they are in practice available within 24
separate unincorporated association in which the                 hours without penalty. No investments, however
University has no financial interest and no control or           liquid, are included in cash.
significant influence over policy decisions.
                                                                 Liquid resources comprise assets held as a readily
Listed Investments                                               disposable store of value.    They include term
Listed investments are shown at market value.                    deposits,    government   securities  and    bank
                                                                 certificates of deposit held as part of the
Research and Development                                         University‟s treasury management activities. They
Research and development expenditure is written                  exclude any such assets held as endowment asset
off in the year incurred.                                        investments.

Pensions                                                         Foreign Currencies
The University has 2 principal pension schemes for               Transactions denominated in foreign currencies are
staff, the Teachers' Pension Scheme (TPS) and the                recorded at the rate of exchange ruling at the dates
Hampshire County Council Local Government                        of the transactions. Monetary assets and liabilities
Superannuation Scheme (HCCLGSS). The schemes                     denominated in foreign currencies are translated
are defined benefit schemes, which are externally                into sterling either at year-end rates or, where
funded and contracted out of the State Second                    there are related forward foreign exchange
Pension.                                                         contracts, at contract rates.        The resulting
                                                                 exchange differences are dealt with in the
The HCCLGSS has been accounted for in accordance                 determination of income and expenditure for the
with FRS 17 Retirement Benefits, which requires the              year.
difference between the assets held in the scheme
and the scheme‟s liabilities measured on an                      Leased Assets
actuarial basis using the projected unit method to               Assets held under finance leases, which are leases
be recognised in the University‟s balance sheet as a             where substantially all the risks and rewards of
pension scheme asset or liability as appropriate.                ownership of the asset have passed to the University
The carrying value of any resulting pension scheme               and hire purchase contracts are capitalised in the
asset is restricted to the extent that the University            Balance Sheet and are depreciated over their useful
is able to recover the surplus either through                    lives. The capital elements of future obligations
reduced contributions in the future or through                   under the leases and hire purchase contracts are
refunds from the scheme. The pension scheme                      included as liabilities in the Balance Sheet.
balance is recognised net of any related deferred
tax balance.                                                     The interest elements of the rental obligations are
                                                                 charged in the Income and Expenditure Account
Changes in the defined benefit pension scheme                    over the periods of the leases and hire purchase
asset or liability arising from factors other than cash          contracts and represent a constant proportion of
contribution by the University are charged to the                the balance of capital repayments outstanding.
Income and Expenditure Account or as appropriate
the Statement of Total Recognised Gains and Losses               Rentals payable under operating leases are charged
in accordance with FRS 17 Retirement Benefits.                   in the Income and Expenditure Account on a payable
                                                                 basis.




                                                                                                                              27
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Consolidated Income & Expenditure Account for the
Year Ended 31 July 2010
                                                                          Notes        2010      2009
                                                                                       £000      £000
INCOME
Funding Body Grants                                                          1        40,248    37,320
Tuition Fees and Education Contracts                                         2        41,309    36,972
Research Grants and Contracts                                                3           423        81
Other Operating Income                                                       4        15,168    14,028
Endowment and Investment Income                                              5           436       633
                                                                                     97,584    89,034

EXPENDITURE
Staff Costs                                                                  6        49,734    45,030
Other Operating Expenses                                                              35,111    31,809
Depreciation                                                                10         3,721     3,829
Interest Payable                                                            8          4,226     3,675
                                                                            7        92,792    84,343

Surplus after depreciation of assets and before tax                                   4,792     4,691

Taxation                                                                     9             -         -

Surplus after depreciation of assets and tax                                          4,792     4,691

Surplus/(deficit) for the year transferred to accumulated
                                                                            12            8         (7 )
income in endowment funds

Surplus for the year retained within general reserves                                 4,784     4,698

All amounts relate to continuing activities.



Consolidated Statement of Historical Cost Surpluses and
Deficits for the Year Ended 31 July 2010
                                                                          Notes        2010      2009
                                                                                       £000      £000

Surplus after depreciation of assets and before tax                                   4,792     4,691
Difference between the Historical Cost Depreciation
Charge and the Actual Depreciation Charge for the Year                      20           91        91
calculated on the relevant amount
Historical Cost Surplus before Tax                                                    4,883     4,782

Historical Cost Surplus after Tax                                                     4,883     4,782




28
                                           Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Balance Sheet as at 31 July
                                                               Notes          Consolidated                 University
                                                                             2010       2009             2010       2009
                                                                             £000       £000             £000        £000
                                                                                                                Restated
Fixed Assets
Tangible Assets                                                  10         68,869        68,128        68,218        67,660
Investments                                                      11             50            50         1,650         1,650
                                                                           68,919        68,178        69,868        69,310

Endowment Asset Investments                                      12            622           588           622            588

Current Assets
Debtors                                                          13          2,945         2,461         3,124         2,587
Investments                                                      14         26,527        10,153        26,527        10,153
Cash at Bank and in Hand                                         30          9,660        19,353         9,473        19,250
                                                                           39,132        31,967        39,124        31,990

Creditors: amounts falling due within one year                   15         15,974       15,100         16,833        16,141

Net Current Assets                                                         23,158        16,867        22,291        15,849

Total Assets less Current Liabilities                                      92,699        85,633        92,781        85,747

Creditors: amounts falling due after more than one year          16         31,032       32,113         31,032        32,113

Provisions for liabilities and charges                           17          2,671         2,001         2,671          2,001

Net Assets Excluding Pension Liabilities                                   58,996        51,519        59,078        51,633

Net Pension Liability                                            17         24,200       29,840         24,200        29,840

TOTAL ASSETS LESS LIABILITIES                                              34,796        21,679        34,878        21,793

Deferred Capital Grants                                          18          8,972         7,883         8,972          7,883

Expendable Endowments                                            19            622           588           622            588

Reserves
Income and Expenditure Account excluding Pension Reserve                    41,872       35,427         41,954        35,541
Pension Reserve                                                  17        (24,200 )    (29,840 )      (24,200 )     (29,840 )
Income and Expenditure Account including Pension Reserve         21         17,672        5,587         17,754         5,701
Revaluation Reserve                                              20          7,530        7,621          7,530         7,621
Total Reserves                                                             25,202       13,208         25,284        13,322

TOTAL FUNDS                                                                34,796        21,679        34,878        21,793

These Financial Statements were approved and authorised for issue by the Board of Governors on 17 November
2010.




      Grahame Sewell                                             Professor V Gore
      Chairman of the Board of Governors                         Vice-Chancellor




                                                                                                                          29
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Consolidated Cash Flow Statement for the Year Ended
31 July 2010
                                                                          Notes        2010        2009
                                                                                       £000        £000


Net Cash Inflow from Operating Activities                                   26       11,774      11,799

Returns on investments and servicing of finance                             27        (2,160 )    (1,962 )

Taxation                                                                                    -           -

Capital expenditure and financial investment                                28        (1,781 )      (441 )

Management of liquid resources                                              30       (16,374 )     3,503

Financing                                                                   29        (1,122 )    (1,268 )

(Decrease)/Increase in Cash                                                          (9,663 )    11,631


Reconciliation of Net Cashflow to Movement in Net
Funds/(Debt)
                                                                          Notes        2010        2009
                                                                                       £000        £000

(Decrease)/Increase in Cash                                                          (9,663 )    11,631
Repayment of Long Term Loans                                                            793         966
Repayment of Capital Elements of Finance Leases                                         329         302
Change in Short Term Deposits                                                        16,374      (3,503 )

Movement in Net Debt/Funds                                                            7,833       9,396

Net Debt at 1 August                                                        30        (3,727 )   (13,123 )

Net Funds/(Debt) at 31 July                                                 30        4,106      (3,727 )


Statement of Total Recognised Gains and Losses for the
Year Ended 31 July 2010
                                                                          Notes        2010        2009
                                                                                       £000        £000

Surplus after Depreciation of Assets at Valuation and Tax                              4,784       4,698
Unrealised Gain on Endowment Asset Investments                              12            26           -
Endowment Surplus/(Deficit) Retained in the Year                            12             8          (7 )
Actuarial Gain/(Loss) on Pension Scheme                                     17         7,210     (12,440 )

Total Recognised Gains and Losses Relating to the Year                               12,028      (7,749 )

Reconciliation
Opening Reserves and Endowments                                                      13,796

Total Recognised Gain for the Year                                                   12,028

Closing Reserves and Endowments                                                      25,824



30
                                           Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Notes to the Accounts for the Year Ended 31 July 2010
1. FUNDING BODY GRANTS                                                                       2010                     2009
                                                                                             £000                     £000
Recurrent Grant
HEFCE                                                                                      33,872                   33,011
FE Funding Bodies                                                                             978                      753
Specific HEFCE Grants
Special Initiatives                                                                         3,815                     2,320
Deferred Capital Grants Released in Year
Buildings (Note 18)                                                                           576                       253
Equipment (Note 18)                                                                         1,007                       983
                                                                                          40,248                    37,320

2. TUITION FEES AND EDUCATION CONTRACTS                                                      2010                     2009
                                                                                             £000                     £000

Full time undergraduate and postgraduate fees home and EC                                  27,518                   23,927
Part time undergraduate and postgraduate fees home and EC                                   1,158                    1,354
Overseas (Non-EU) domicile students                                                         7,096                    6,294
Non credit bearing course fees                                                              5,230                    5,144
Other                                                                                         307                      253
                                                                                          41,309                    36,972

3. RESEARCH GRANTS AND CONTRACTS                                                             2010                     2009
                                                                                             £000                     £000

EU Grants                                                                                      384                         -
Research Councils                                                                               11                        64
Other Sources                                                                                   28                        17
                                                                                              423                        81

4. OTHER OPERATING INCOME                                                                    2010                     2009
                                                                                             £000                     £000

Residences, Catering and Conferences                                                       11,944                   11,103
Other Services Rendered                                                                       614                      594
Profit on Disposal of Fixed Assets                                                              3                       60
Other Income                                                                                2,607                    2,271
                                                                                          15,168                    14,028

5. ENDOWMENT AND INVESTMENT INCOME                                                           2010                     2009
                                                                                             £000                     £000

Income from Expendable Endowments (Trust Funds) (Note 19)                                       30                       29
Income from Short Term Investments                                                             404                      604
Income from Long Term Investments                                                                2                        -
                                                                                              436                       633




                                                                                                                          31
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Notes to the Accounts for the Year Ended 31 July 2010
6. STAFF COSTS                                                                         2010                 2009
                                                                                       £000                 £000

Wages and Salaries                                                                    40,165            36,937
Social Security Costs                                                                  3,259             2,924
Other Pension Costs                                                                    5,480             5,033
Redundancy Costs                                                                         830               136
                                                                                      49,734            45,030

Average staff numbers by major category:                                             Number            Number
Academic Departments                                                                    794               756
Academic Services                                                                       117               142
Research Grants and Contracts                                                             4                 3
Residences, Catering and Conferences                                                     32                23
Premises                                                                                 35                40
Administration                                                                          231               199
                                                                                       1,213                1,163

Members of the Senior Management Team                                                     17                   19

Emoluments of Vice-Chancellor and remuneration of senior staff:                            £                 £
Emoluments of Vice-Chancellor                                                        202,062           191,278
Employers‟ pension contributions (Teachers‟ Pension Scheme)                           28,491            26,970
Other benefits                                                                         5,117                 -
                                                                                     235,670          218,248

Other higher paid staff (excluding employers‟ pension contributions),                Number            Number
but including payment for compensation for loss of office                                             Restated
£100,000 to £109,999                                                                       2                 -
£110,000 to £119,999                                                                       -                 1

The Governors received no remuneration for services provided during the current or prior year.

7. ANALYSIS OF TOTAL EXPENDITURE                                                       2010                 2009
                                                                                       £000                 £000
Analysed by Activity:
Academic Departments                                                                  39,733            37,731
Academic Services                                                                      8,446             7,935
Administration and Central Services                                                   19,070            16,572
Premises                                                                              11,374             9,604
Research Grants and Contracts                                                            381                49
Residences, Catering and Conferences                                                  12,218            11,902
Other Expenditure                                                                      1,570               550
                                                                                      92,792            84,343

Other Operating Expenses include:
External Auditors‟ Remuneration – Audit Fees *                                            36                   38
External Auditors‟ Remuneration – Other Fees                                              11                    8
Governors Expenses **                                                                      5                    4
Internal Auditors‟ Remuneration – Audit Fees                                              42                   33
Operating Lease Rentals Land/Buildings                                                 4,284                4,149
Operating Lease Rentals Plant/Machinery                                                   54                   47

* £27,500 relates to net fee payable by the University (2009: £27,000).
**Governors have been reimbursed for travel and subsistence expenses relating to attendance at Board and
Committee meetings and other events attended in their official capacity. A total of £5,272 was paid to 11
Governors for reimbursement of expenses (2009: £3,857 paid to 13 Governors).


32
                                               Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Notes to the Accounts for the Year Ended 31 July 2010
8. INTEREST PAYABLE                                                                               2010                    2009
                                                                                                  £000                    £000

Loans wholly repayable within five years                                                              4                      32
Loans not wholly repayable within five years                                                      1,536                   1,580
Finance Leases                                                                                    1,016                   1,043
Pension finance costs                                                                             1,670                   1,020
                                                                                                 4,226                   3,675

9. TAXATION
No corporation tax charge (2009: no charge) arises on consolidation as a result of taxable profits in a subsidiary
undertaking.
Under the Education Reform Act 1998 the University obtained charitable status, consequently it is not liable to
corporation tax on its income and gains. No deferred taxation has been provided in the accounts on the basis
that future taxable profits of all subsidiary companies will be paid to the University by way of Deed of
Covenant.

10. TANGIBLE ASSETS
                                        Freehold and Leasehold Assets under                    Equipment                  Total
                                           Land        Buildings Construction
                                           £000           £000          £000                           £000               £000
Consolidated
At 1 August 2009
At valuation 31 July 1998                  6,454              15,182                   -                  -             21,636
At cost                                    4,275              53,164                 457             14,568             72,464
Additions                                      -                   -               2,304              2,159              4,463
Disposals                                     (1 )                 -                   -                  -                 (1 )
Transfers                                    580               1,370              (1,992 )               42                  -
At 31 July 2010                          11,308              69,716                  769            16,769             98,562
Depreciation
At 1 August 2009                                  -           15,476                    -            10,496             25,972
Disposals                                         -                -                    -                 -                  -
Provided during period                            -            1,745                    -             1,976              3,721
At 31 July 2010                                   -          17,221                     -           12,472             29,693

Net Book value at 31 July 2010           11,308              52,495                  769              4,297            68,869

Net Book value at 31 July 2009           10,729              52,870                  457              4,072            68,128

University
At 1 August 2009
At valuation 31 July 1998                  6,454              15,182                   -                  -             21,636
At cost                                    3,955              53,164                 407             14,323             71,849
Additions                                      -                   -               2,071              2,159              4,230
Disposals                                     (1 )                 -                   -                  -                 (1 )
Transfers                                    580               1,344              (1,966 )               42                  -
At 31 July 2010                          10,988              69,690                  512            16,524             97,714
Depreciation
At 1 August 2009                                  -           15,476                    -            10,349             25,825
Disposals                                         -                -                    -                 -                  -
Provided during period                            -            1,745                    -             1,926              3,671
At 31 July 2010                                   -          17,221                     -           12,275             29,496

Net Book value at 31 July 2010           10,988              52,469                  512              4,249            68,218

Net Book value at 31 July 2009           10,409              52,870                  407              3,974            67,660



                                                                                                                              33
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Notes to the Accounts for the Year Ended 31 July 2010
10. TANGIBLE ASSETS (CONTINUED)

Included in Land and Buildings are two assets with a combined net book value of £10.3 million
(2009: £10.5 million) held under finance leases. Depreciation for the year on these leased assets was £0.2
million (2009: £0.2 million).

The University commissioned a revaluation of its land and buildings held at valuation, undertaken by Chesterton
International Ltd as at 31 July 1998. The valuation was undertaken in accordance with the Statements of Asset
Valuation Practice and Guidance Notes issued by the Royal Institution of Chartered Surveyors. The basis of the
valuation was open market value for existing use. Those properties for which no open market value was readily
ascertainable were valued on the depreciated replacement cost basis. Other assets continue to be shown at
historic cost.

Under the transitional arrangements of FRS 15 this valuation (after impairment charges) has been retained as
the carrying amount for those assets within the valuation.

11. INVESTMENTS                                                        Consolidated           University
                                                                       2010           2009   2010          2009
                                                                       £000           £000   £000           £000
                                                                                                        Restated

Subsidiaries                                                                -            -   1,600           1,600
Other Investments                                                          50           50      50              50
                                                                           50          50    1,650          1,650

Prior year balances in respect of the University have been restated to show the total share capital issued to
Southampton Solent University, previously the Investments showed only those shares that were fully paid up.
This has resulted in an £1,223,000 increase to investments and amounts due to subsidiary undertakings. The
unpaid share capital will be paid up in line with expenditure incurred on the development of the Manned Model
Centre.

Subsidiary Undertakings
The University owns 100% of the issued ordinary share capital of £1.6 million (2009: £1.6 million) of
Southampton Solent University Limited, a company registered in England.

The main activities of this undertaking is to provide short courses, training and facilities, consultancy services
and meals and accommodation for employees of other organisations using the companies‟ facilities for their
own training programmes.

Other Investments
The University has an investment of £50,000 representing an 11% share of the capital of Learning Network South
East (LNSE), a company formed by the collaboration of a number of Institutions in order to provide internet
access.




34
                                              Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Notes to the Accounts for the Year Ended 31 July 2010
12. ENDOWMENT ASSET INVESTMENTS                                                             Consolidated and University
                                                                                                   2010           2009
                                                                                                    £000          £000

Balance at 1 August                                                                                     588                595
Appreciation on Revaluation                                                                              26                  -
Disposals                                                                                               (24 )                -
Increase/(Decrease) in Net Current Assets excluding cash                                                  2                 (2 )
Increase/(Decrease) in cash balances                                                                     30                 (5 )
Balance at 31 July                                                                                     622                588

MIM Britannia Maximum Income Fund                                                                       590                564
Shares and securities not incorporated in above funds                                                     -                 24
Net Current Liabilities excluding Cash                                                                    -                 (2 )
Cash balances                                                                                            32                  2
Balance at 31 July                                                                                     622                588

13. DEBTORS                                                    Consolidated                            University
                                                               2010               2009                2010               2009
                                                               £000               £000                £000               £000

Trade Debtors                                                  1,579              1,351              1,333               1,127
Other Debtors                                                  1,366              1,110              1,314               1,104
Amount owed by subsidiary undertaking                              -                  -                477                 356
                                                              2,945              2,461               3,124              2,587

14. CURRENT ASSET INVESTMENTS                                                               Consolidated and University
                                                                                                   2010           2009
                                                                                                    £000          £000
Deposits Maturing:
In one year or less                                                                                 22,711               6,675
In more than one year                                                                                3,816               3,478
                                                                                                   26,527             10,153

15. CREDITORS: amounts falling due within one year              Consolidated                           University
                                                               2010          2009                     2010             2009
                                                               £000          £000                     £000              £000
                                                                                                                    Restated

Trade Creditors                                                7,257              6,623              7,112               6,508
Taxation and social security                                   1,082              1,023              1,082               1,023
Salary and wages creditor                                      1,089              1,003              1,089               1,003
Other Creditors                                                3,380              3,222              3,312               3,155
HEFCE Capital Investment Fund (Note 18)                        2,085              2,107              2,085               2,107
Amounts due to subsidiary companies                                -                  -              1,072               1,223
Bank Loan (Note 22b)                                             722                793                722                 793
Obligations under finance leases (Note 22a)                      359                329                359                 329
                                                            15,974              15,100             16,833             16,141

Amounts due to subsidiary companies include £1.0 million in respect of unpaid share capital (2009: £1.2 million).




                                                                                                                             35
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Notes to the Accounts for the Year Ended 31 July 2010
16. CREDITORS: amounts falling due after one year                       Consolidated                        University
                                                                       2010          2009                  2010             2009
                                                                       £000          £000                  £000             £000

Long Term Bank loan (Note 22b)                                        19,804              20,526         19,804            20,526
Obligations under finance leases (Note 22a)                           11,228              11,587         11,228            11,587
                                                                     31,032              32,113          31,032            32,113

17. PROVISIONS FOR LIABILITIES AND CHARGES                                                   Consolidated and University
                                                                  Heritable          Dilapidation Reorganisation            Total
                                                                      £000                  £000           £000             £000

At 1 August 2009                                                         900                 884            217             2,001
Charge to Income & Expenditure account                                     -                 324            830             1,154
Payments made in the year                                                  -                   -           (484 )            (484 )
At 31 July 2010                                                          900               1,208            563             2,671

The Heritable provision relates to the at risk element of an investment of £2 million in Heritable Bank, which is
at risk due to the Heritable Bank being placed into administration following the collapse of the Icelandic
banking sector.
The Dilapidation provision relates to a contractual obligation under certain of the operating leases and is based
on professional valuations carried out at 12 March 2010 and 26 July 2010. Management are not aware of any
events since that date which would indicate any material change to that provision.
The Reorganisation provision is made to cover the cost of redundancy and severance payments for changes to
the University‟s staff structures.

PENSIONS

Retirement benefits for employees of Southampton Solent University are provided by defined benefit schemes,
which are funded by contributions from the University and employees. Payments are made to the Teachers‟
Pension Scheme for academic staff and to the Hampshire County Council Superannuation Scheme for non-
academic staff. These are both independently administered schemes. Both of these are defined benefit
schemes.

Teachers’ Pension Scheme
Under the definitions set out in Financial Reporting Standard 17 - Retirement benefits, the Teacher's pension
scheme (TPS) is a multi-employer pension scheme. As the TPS is underwritten by central government and the
University has no future obligation to make contributions to the scheme, this is effectively a defined
contribution scheme in so far as it affects the University. As a result, contributions to this scheme are
accounted for as if the scheme was a defined contribution scheme.

The University has set out below the information available on the Scheme and the implications for the
University in terms of the anticipated contribution rates.

The employers' contribution rates for the University's academic staff were 14.1% of pensionable salaries from 1
August 2009 to 31 July 2010.

The total pension contributions for the University in respect of current employers were:
                                                                                                          2010              2009
                                                                                                          £000              £000
Contributions to Teachers‟ Pension Scheme                                                                 2,650             2,509

The Teachers‟ Pension Scheme is a statutory, contributory, unfunded, defined benefit scheme. The regulations
under which the TPS operates are the Teachers' Pensions Regulations 1997, as amended. Contributions are
credited to the Exchequer on a "pay as you go" basis under arrangements governed by the Superannuation Act
1972. A notional asset value is ascribed to the Scheme for the purposes of determining contribution rates.




36
                                            Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Notes to the Accounts for the Year Ended 31 July 2010
17. PROVISIONS FOR LIABILITIES AND CHARGES (CONTINUED)

The last valuation of the TPS related to the period 1 April 2001 to 31 March 2004. The Government Actuary's
report of October 2006 revealed that the total liabilities of the Scheme (pensions currently in payment and the
estimated cost of future benefits) amounted to £166,500 million. The value of the assets (estimated future
contributions together with the proceeds from the notional investments held at the valuation date) was
£163,240 million. The assumed real rate of return is 3.5% in excess of prices and 2% in excess of earnings. The
rate of real earnings growth is assumed to be 1.5%. The assumed gross rate of return is 6.5%.

As from 1 January 2008 and as part of the cost-sharing agreement between employers' and teachers'
representatives, the standard contribution has been assessed at 19.75%, plus a supplementary contribution rate
of 0.75% (to balance assets and liabilities as required by the regulations within 15 years); a Standard
Contribution Rate (SCR) of 20.5%. This translates into an employee contribution rate of 6.4% and employer
contribution rate of 14.1% payable. The cost-sharing agreement has also introduced, effective for the first time
from the 2008 valuation, a 14% cap on employer contributions payable, although this agreement has not yet
come into effect.

The 2006 interim actuarial review, published in June 2007, did not recommend any changes to the SCR and
concluded, as at 31 March 2006 and using the above assumptions, that the Scheme's total liabilities amounted to
£176,600 million.

A copy of the Government Actuary's 2004 valuation report and 2006 interim valuation report can be found on
the TeacherNet website at www.teachernet.gov.uk/pensions.

Hampshire County Council Superannuation Scheme
The Hampshire County Council Superannuation Scheme (HCC) is valued every three years by a professionally
qualified independent actuary using the Projected Unit method, the rates of contribution being determined by
the actuary. The latest actuarial assessment of the Hampshire County Council Superannuation Scheme was at
31 March 2007. Level of employers‟ contributions are set out below:

                                                            At 31 March At 31 March At 31 March At 31 March
                                                                   2009        2010        2011        2012

Non teaching staff – HCC                                            18.1%            18.6%            19.1%            19.1%

The University also has unfunded obligations in respect of enhanced pension entitlements to staff who took
early retirement under a reorganisation programme in 1993.

Where the University ceases to trade and there is no successor establishment, the Secretary of State for
Education and Employment becomes the compensating authority.




                                                                                                                           37
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Notes to the Accounts for the Year Ended 31 July 2010
17. PROVISIONS FOR LIABILITIES AND CHARGES (CONTINUED)

FRS 17
Details in respect of the pension liabilities are provided in accordance with FRS 17. As noted earlier it is not
possible to identify the University‟s share of the underlying assets and liabilities of the Teachers‟
Superannuation Scheme and therefore the following disclosure relate to the Hampshire County Council
Superannuation Scheme and unfunded obligations.

The regular contributions to the Fund for the accounting period ending 31 July 2011 are estimated to be £2.97
million.

In the budget of 22 June 2010 the Government announced that the Consumer Price Index (CPI) will be used for
the price indexation of pensions from April 2011, rather than the Retail Price Index (RPI). This statutory change
to pensions increases has been reflected as a change to actuarial assumptions and included as an actuarial gain
on liabilities.

The valuation used for FRS 17 disclosures has been based on the most recent actuarial valuation at 31 March
2007. The major assumptions used by the actuary for the purposes of FRS 17 were:

                                                                                         31 July    31 July       31 July
                                                                                           2010       2009          2008

Discount Rate                                                                           5.4%   pa   6.0% pa       6.5% pa
Rate of increase in salaries                                                            5.0%   pa   5.3% pa       5.3% pa
Rate of increase in pensions in payment                                                 2.8%   pa   3.8% pa       3.8% pa
Rate of inflation (RPI)                                                                 3.5%   pa   3.8% pa       3.8% pa
Rate of inflation (CPI)                                                                 2.8%   pa      N/A           N/A

Mortality Assumptions                                                                                 At 31 July 2010
                                                                                                    Retiring   Retiring in
                                                                                                     Today       20 years

Male                                                                                                   22.3          24.7
Female                                                                                                 24.3          26.5

The University‟s share of the assets in the scheme and the expected rate of return were:

                                           At 31 July 2010                   At 31 July 2009          At 31 July 2008
                                          Rate of        Value              Rate of        Value    Rate of         Value
                                          Return                            Return                  Return

Equities                                      8.2%          23,341             8.0%      18,698        7.8%        19,338
Government bonds                              4.2%           9,452             4.5%       1,723        4.8%         8,702
Corporate bonds                               4.9%             926             5.9%       8,049        6.5%             -
Property                                      7.7%           2,546             7.0%         752        6.8%         2,256
Cash                                          1.4%           2,315             0.9%       2,067        5.9%         1,934
Other assets                                  8.2%               -             0.9%          31        5.9%             -
                                                            38,580                       31,320                    32,230

Average rate of return                        6.7%                             6.5%                    6.8%

The scheme actuaries employ a building block approach in determining the rate of return on Fund assets.
Historical markets are studied and assets with higher volatility are assumed to generate higher returns
consistent with widely accepted capital market principles. The assumed rate of return on each asset class is set
out within this note. The overall expected rate of return on assets is then derived by aggregating the expected
return for each asset class over the actual asset allocation for the Fund as at 31 July 2010.




38
                                              Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Notes to the Accounts for the Year Ended 31 July 2010
17. PROVISIONS FOR LIABILITIES AND CHARGES (CONTINUED)

The following amounts were measured in accordance with the requirements of FRS 17:

Reconciliation to Balance Sheet                                                                  Value at 31      Value at 31
                                                                                                   July 2010        July 2009
                                                                                                        £000             £000
Funded Benefits
Fair Value of Fund Assets                                                                             38,580           31,320
Present Value of Liabilities                                                                          62,360           60,700
Funded Net Pension Liability                                                                         (23,780 )        (29,380 )

Unfunded Benefits
Present Value of Liabilities                                                                              420              460
Unfunded Net Pension Liability                                                                           (420 )           (460 )

Total Net Pension Liability                                                                          (24,200 )        (29,840 )

Analysis of Charge to Income & Expenditure Account                                                       2010             2009
                                                                                                         £000             £000

Current Service Cost (included in Other Pension Costs – Note 6)                                         2,730            2,030
Past Service Cost (included in Other Pension Costs – Note 6)                                              100               70
Interest Cost (included in Pension Finance Costs – Note 8)                                              3,740            3,240
Expected Return on Assets (included in Pension Finance Costs – Note 8)                                 (2,070 )         (2,220 )
Expense Recognised                                                                                      4,500            3,120

The expense recognised includes £30,000 (2009: £30,000) in respect of unfunded benefits.

Changes to the present value of liabilities during the year                                              2010             2009
                                                                                                         £000             £000

Opening Value of Liabilities                                                                          61,160           49,080
Current Service Cost                                                                                   2,730            2,030
Interest Cost                                                                                          3,740            3,240
Contributions by Participants                                                                          1,050              940
Actuarial (Gains)/Losses                                                                              (4,330 )          7,250
Net Benefits Paid Out                                                                                 (1,670 )         (1,450 )
Past Service Cost                                                                                        100               70
Closing Value of Liabilities                                                                          62,780           61,160

The closing liability includes £420,000 (2009: £460,000) in respect of unfunded benefits.




                                                                                                                             39
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Notes to the Accounts for the Year Ended 31 July 2010
17. PROVISIONS FOR LIABILITIES AND CHARGES (CONTINUED)

Changes to the Fair Value of Assets during the year                                                  2010         2009
                                                                                                     £000         £000

Opening Value of Assets                                                                            31,320     32,230
Expected Return on Assets                                                                           2,070      2,220
Actuarial Gain/(Loss) on Assets                                                                     2,880     (5,190 )
Contributions by the Employer                                                                       2,890      2,540
Contributions by Participants                                                                       1,050        940
Net Benefits Paid Out                                                                              (1,630 )   (1,420 )
Closing Value of Assets                                                                            38,580     31,320

Actual Return on Assets                                                                              2010         2009
                                                                                                     £000         £000

Expected Return on Assets                                                                           2,070         2,220
Actuarial Gain/(Loss) on Assets                                                                     2,880        (5,190 )
Actual Return on Assets                                                                             4,950        (2,970 )

Analysis of Amount Recognised in Statement of Total Recognised Gains and Losses                      2010         2009
                                                                                                     £000         £000

Actuarial Gain/(Loss) on Assets                                                                     2,880        (5,190 )
Actuarial Gain/(Loss) on Liabilities                                                                4,330        (7,250 )
Total Actuarial Gain/(Loss)                                                                         7,210     (12,440 )

The actuarial gain includes a gain of £30,000 (2009: gain of £10,000) in respect of unfunded benefits.
An actuarial gain on liabilities of £7.1 million has been included due to the change in inflation rate used to
calculate pension increases from RPI to CPI.

5 Year History                                                2010             2009      2008        2007         2006
                                                              £000             £000      £000        £000         £000

Present Value of Liabilities                                62,780           61,160     49,080     49,930     47,650
Fair Value of Assets                                        38,580           31,320     32,230     35,600     31,150
Deficit on the Scheme                                       24,200           29,840     16,850     14,330     16,500

Experience Gains/(Losses) on Assets                          2,880           (5,190 )   (7,380 )      560        1,640
Experience Gains/(Losses) on Liabilities                       490              (90 )    3,380        (70 )        (80 )




40
                                            Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Notes to the Accounts for the Year Ended 31 July 2010
18. DEFERRED CAPITAL GRANTS                                                    Consolidated and University
                                                                           Buildings    Equipment                      Total
                                                                               £000           £000                     £000

At 1 August 2009                                                                5,224              2,659               7,883
Cash Received                                                                   1,511              1,139               2,650
Decrease/(Increase) in HEFCE Capital Investment Fund Creditor                      37                (15 )                22
(Note 15)
Released to Income and Expenditure                                               (576 )           (1,007 )            (1,583 )
At 31 July 2010                                                                6,196               2,776              8,972

19. EXPENDABLE ENDOWMENTS                                                                 Consolidated and University
                                                                                                  2010          2009
                                                                                                  £000          £000

Capital Value                                                                                        588                 590
Accumulated Income                                                                                     -                   5
At 1 August                                                                                          588                 595

Appreciation of Endowment Asset Investments                                                            26                  -
Income for the Year                                                                                    30                 29
Expenditure for the Year                                                                              (22 )              (36 )
At 31 July                                                                                           622                 588

Represented by:
Capital Value                                                                                         618                588
Accumulated Income*                                                                                     4                  -
                                                                                                     622                 588

*£4,000 of income relates to a surplus on disposal of shares and has not been included in accumulated income as it
is being held for reinvestment.
All endowments are classified as restricted expendable endowments.

20. REVALUATION RESERVE                                                                   Consolidated and University
                                                                                                  2010          2009
                                                                                                  £000          £000

At 1 August                                                                                        7,621               7,712
Transfer to the Income and Expenditure Account (Note 21) – Depreciation for the                      (91 )               (91 )
period on revalued inherited assets
At 31 July                                                                                         7,530              7,621

21. INCOME AND EXPENDITURE ACCOUNT                            Consolidated                           University
                                                             2010          2009                     2010               2009
                                                             £000          £000                     £000               £000

At 1 August                                                  5,587            13,238               5,701             13,329
Retained Surplus for the Period                              4,784             4,698               4,752              4,721
Gain/(Loss) on Pension Liability                             7,210           (12,440 )             7,210            (12,440 )
Transfers from Revaluation Reserve (Note 20)                    91                91                  91                 91
At 31 July                                                17,672               5,587             17,754               5,701

The University has taken advantage of the exemption within section 408 of the Companies Act 2006 and only
presented a Consolidated Income and Expenditure Account for the group, the unconsolidated surplus for the year
relating to Southampton Solent University is shown above.




                                                                                                                           41
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Notes to the Accounts for the Year Ended 31 July 2010
22. OBLIGATIONS UNDER LEASES AND LOANS                                                       Consolidated and University
a) Finance Leases                                                                                    2010          2009
                                                                                                     £000          £000
Amounts Payable:
Within one year                                                                                     1,347            1,347
In more than one year and less than two years                                                       1,347            1,347
In more than two and less than five years                                                           4,041            4,041
After more than five years                                                                         12,331           13,678
                                                                                                  19,066           20,413
Less: finance charges allocated to future periods                                                  (7,479 )         (8,497 )
                                                                                                  11,587           11,916

Analysed as:
Amounts due in less than one year                                                                     359              329
Amounts due after more than one year                                                               11,228           11,587
                                                                                                  11,587           11,916

The above balances are comprised of two finance leases due for repayment in 2018 and 2019. All long term
borrowing is at applicable market determined rates (fixed) from the commencement of the borrowing.

b) Loans                                                                                            2010             2009
                                                                                                    £000             £000

Instalments   due within one year                                                                     722              793
Instalments   due in more than one and less than two years                                            773              722
Instalments   due in more than two and less than five years                                         2,694            2,498
Instalments   not due within five years                                                            16,337           17,306
                                                                                                  20,526           21,319

Analysed as:
Amounts due within one year                                                                           722              793
Amounts due after more than one year                                                               19,804           20,526
                                                                                                  20,526           21,319

The above balance is comprised of one loan due for repayment in 2026. All long term borrowing is at applicable
market determined rates (fixed) from the commencement of the borrowing.

c) The current annual commitment under non-cancellable operating leases                             2010             2009
   for land and building is as follows:                                                             £000             £000

Amounts payable under leases expiring after more than five years                                   4,245            4,101

23. CAPITAL COMMITMENTS                                                 Consolidated                 University
                                                                       2010          2009           2010             2009
                                                                       £000          £000           £000              £000
                                                                                  Restated                        Restated

Authorised and Contracted                                             1,912          1,361         1,579            1,267

Authorised but not Contracted                                        20,602          9,238        18,803            8,212




42
                                             Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Notes to the Accounts for the Year Ended 31 July 2010
24. CONTINGENT LIABILITIES

At 31 July 2010 the Governors were not aware of any liabilities for which full provision has not been made.


25. POST BALANCE SHEET EVENTS

The Governors are not aware of any post balance sheet events that they feel attention should be drawn to.


26. RECONCILIATION OF CONSOLIDATED OPERATING SURPLUS TO NET CASH
    INFLOW FROM OPERATING ACTIVITIES                                                                 2010               2009
                                                                                                     £000               £000

Surplus before taxation                                                                             4,792              4,691
Less: investment income                                                                               (436 )             (633 )
                                                                                                    4,356              4,058
Add back interest payable                                                                           4,226              3,675
Surplus from Operating Activities                                                                   8,582              7,733

Surplus on Disposal of Fixed Assets                                                                    (3 )               (50 )
Release of Capital Grant                                                                           (1,583 )            (1,236 )
Depreciation                                                                                        3,721               3,829
Pension contribution less amounts charged to operating surplus                                       (100 )              (470 )
(Increase)/Decrease in debtors                                                                       (453 )             1,076
Increase in creditors                                                                                 942                  61
Increase in provisions                                                                                670                 854
(Increase)/Decrease in Endowment net current assets                                                    (2 )                 2
                                                                                                  11,774             11,799

27. RETURNS ON INVESTMENTS AND SERVICING OF FINANCE                                                  2010               2009
                                                                                                     £000               £000

Income from Endowments                                                                                 26                  29
Interest Received                                                                                     376                 676
Interest Paid under Finance Leases                                                                 (1,018 )            (1,045 )
Other Interest Paid                                                                                (1,544 )            (1,622 )
Returns on Investments and Servicing of Finance                                                    (2,160 )           (1,962 )




                                                                                                                            43
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Notes to the Accounts for the Year Ended 31 July 2010
28. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT                                                            2010           2009
                                                                                                            £000           £000

Purchase of Fixed Assets                                                                                   (4,463 )       (3,346 )
Deferred Capital Grants Received                                                                            2,650          2,845
Endowment Investment Disposal                                                                                  28              -
Receipts on Disposal of Fixed Assets                                                                            4             60
                                                                                                          (1,781 )         (441 )

29. ANALYSIS OF CHANGES IN CONSOLIDATED FINANCING                                                          Capital
    DURING THE YEAR                                                                  At 1 August     Repayments       At 31 July
                                                                                           2009       In the year          2010
                                                                                           £000              £000          £000

Barclays Bank Loan                                                                          118              (118 )           -
Kimber College Finance Lease                                                              3,999              (308 )       3,691
Sir James Matthews Building Finance Lease                                                 7,918               (21 )       7,897
Deanery College Loan                                                                     11,472              (365 )      11,107
Chantry College Loan                                                                      6,556              (209 )       6,347
David Moxon Annex Loan                                                                    3,172              (101 )       3,071
                                                                                         33,235           (1,122 )       32,113

Changes in financing as disclosed in the Cashflow Statement may be analysed as follows:

                                                                                                            2010           2009
                                                                                                            £000           £000

Repayment of Loans                                                                                           (793 )         (966 )
Repayment of Capital Element of Finance Leases                                                               (329 )         (302 )
                                                                                                          (1,122 )       (1,268 )

30. ANALYSIS OF CHANGES IN NET DEBT                            At 1 August            Cash Flow        Non Cash       At 31 July
                                                                     2009                             Movement             2010
                                                                     £000                  £000           £000             £000
Cash at Bank and in Hand:
Endowment Assets                                                           2                  30                 -           32
Cash                                                                  19,353              (9,693 )               -        9,660
                                                                     19,355              (9,663 )                -        9,692

Short Term Deposit                                                   10,153              16,374                 -        26,527
Debt Due within one year                                             (1,122 )             1,122            (1,081 )      (1,081 )
Debt Due after one year                                             (32,113 )                 -             1,081       (31,032 )
                                                                     (3,727 )             7,833                  -        4,106

Non-Cash Movement relates to the portion of long-term borrowings due within one year.




44
                                             Southampton Solent University|Financial Statements for the Year Ended 31 July 2010


Notes to the Accounts for the Year Ended 31 July 2010
31. ACCESS FUNDS                                                                                     2010               2009
                                                                                                     £000               £000

Balance Brought Forward                                                                                  -                   -
Funding Council Grants                                                                                 273                296
Interest Earned                                                                                          -                   1
                                                                                                       273                297
Disbursed to Students                                                                                 (264 )             (287 )
Administration Costs                                                                                    (8 )               (10 )
Balance Unspent at 31 July                                                                               1                   -

32. RELATED PARTY TRANSACTIONS

Governors receive no payments in respect of their duties as Governors other than for the reimbursement of travel
and subsistence expenses incurred in the course of those duties.

During the year ended 31 July 2010 the University had transactions with a number of organisations which fell
within the definition of Related Parties under FRS 8. Transactions are disclosed where members of the Board of
Governors and senior members of staff disclose an interest in a body with whom the University undertakes
transactions which are considered material to the University‟s financial statements and/or the other party. Due
to the nature of the University‟s operations and the composition of the Board of Governors, being drawn largely
from local public and private sector organisations, it is inevitable that transactions will take place with
organisation in which a member of the Board of Governors may have an interest. All transactions involving
organisations in which a member of the Board of Governors may have an interest are conducted at arm‟s length
and in accordance with the University‟s Financial Regulations and usual procurement procedures.

The University has taken advantage of the exemption within FRS 8 and has not disclosed transactions with wholly
owned subsidiary companies.

Solent Synergy Limited has been included as a related party due to a senior managers position on its board.

Southampton Solent University                    Sales to      Purchases         Amounts          Amounts          Grants and
                                                 related            from         owed by          owed to               loans
                                                   party         related          related          related           made to
                                                                   party            party            party            related
                                                                                                                        party
                                                    £000             £000             £000             £000             £000
Solent Students Union
Trade                                                    9              29                 1               2                -
Grant                                                    -               -                 -              27              321

Solent Synergy Limited                                   -              20                 -                   -             -




                                                                                                                            45
Financial Statements for the Year Ended 31 July 2010|Southampton Solent University


Principal Address & Advisors
 CORPORATE OFFICE

                    Southampton Solent University
                    East Park Terrace
                    Southampton
                    SO14 0YN


 AUDITORS

 External           BDO LLP
                    Arcadia House
                    Maritime Walk
                    Ocean Village
                    Southampton
                    SO14 3TL

 Internal           For 2009-10:
                    Mazars LLP
                    Regency House
                    3 Grosvenor Square
                    Southampton
                    SO15 2BE

                    For 2010-13:
                    Kingston City Group
                    Head Office
                    Millennium House
                    21 Eden Street
                    Kingston upon Thames
                    Surry
                    KT1 1BL


 BANKERS

                    Barclays Bank PLC
                    Apex Plaza
                    Reading
                    Berkshire
                    RG1 1AX


 SOLICITORS

                    Bond Pearce LLP
                    Oceana House
                    39 – 49 Commercial Road
                    Southampton
                    SO15 1GA

                    Eversheds LLP
                    115 Colmore Row
                    Birmingham
                    B3 3AL




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