annual statements 2015

Annual Statements 2015

Report of the Members of the Board of Governors and Consolidated Financial Statements

Registered number: 7635609For the year ended 31 July 2015

University of St Mark & St John(a company limited by guarantee)

Contents

University of St Mark & St John (a company limited by guarantee) Report of the Members of the Board of Governors and Consolidated Financial StatementsFor the year ended 31 July 2015

Company information

Members of the University Board of Governors

Strategic Report

Report of the Members of the University Board of Governors

Corporate Governance Statement

Statement of Members’ responsibilities in respect of the Strategic Report and the Consolidated Financial Statements

Independent auditor’s report to the Governing Body of the University of St Mark & St John (a company limited by guarantee)

Consolidated Income and Expenditure Account

Statement of Consolidated Historical Cost Surpluses and Deficits

Consolidated Statement of Total Recognised Gains and Losses

Reconciliation of Movements in Accumulated Funds

Consolidated Balance Sheet

Company Balance Sheet

Consolidated Cash Flow Statement

Notes to the financial statements

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+44 (0)1752 636700 Annual Statements 2015

InsurersZurich Municipal Zurich House2 Gladiator Way Farnborough HantsGU14 6GB

Internal auditor PricewaterhouseCoopers LLPPrincess Court23 Princess Street PlymouthPL1 2EX

SolicitorsBond DickinsonBallard House West Hoe Road Plymouth DevonPL1 3AE

Wolferstans Deptford Chambers 60/66 North Hill PlymouthPL4 8EP

Registered OfficeUniversity of St Mark & St John Derriford RoadPlymouth DevonPL6 8BH

StatusThe University of St Mark & St John is a company limited by guarantee, (referred to in these financial statements as the University or the Company).

GroupThe financial statements consolidate the results of the Company and its subsidiaries, Marjon (South West) Limited and the University of St Mark & St John Student Union (“the Group”).

Secretary Dr K Cook

External auditor KPMG LLPPlym House3 Longbridge Road PlymouthPL6 8LT

BankersNational Westminster BankPlymouth City Centre Old Town Street PlymouthDevon PL1 1DG

Barclays Bank Plc Park House Newbrick Road Stoke Gifford BristolBS34 8YU

Annual Statements 2015 www.marjon.ac.uk 2

Company Information

Members of the University Board of Governors

The names of the persons who at any time during the year ended 31 July 2015 and up to the date that the financial statements were approved were members of the University Board of Governors are set out below. The trustees of the charity will be referred to as members for the purpose of this report. None of the members held any interest in any contract other than certain members who were employed by the group during the year ended 31 July 2015 and up to the date of approval of these statements.

Dr Juliet Williams CBE – Independent (Chair)Professor Cara Aitchison – Vice-Chancellor and Chief Executive Mr Mike Baker – Academic Staff Prof. Patricia Broadfoot CBE – Independent Professor Jonathan Barry – Independent Mr Richard Bayly – Independent National Society Mrs L Brightman – Independent The Very Rev’d Dr Jonathan Draper – Independent DiocesanThe Rev’d Catherine Elizabeth Edmonds – Independent DiocesanDr Julie Evans – Academic staff Mrs Claire Gibson – Independent Mr Zak Liddell – Independent Mr Michael Lincoln – Independent (Chair of Audit committee)Mr Charles Mills – Independent DiocesanMr Derek Pretty – Independent (Deputy Chair and Chair of Finance & Resources)Mr Nigel Rowe MBE – Independent Mrs Diane Smith – Professional Staff Mr Daniel Whitby – Student Union The Right Rev’d Nick McKinnel – Independent Diocesan

The Venerable Ian Chandler (retired 10/07/2015)Mr Philip Mantell (retired 10/07/2015)Mr Bob Pilbeam (retired 11/11/2014)Ms Helen Salmon (retired 10/07/2015) Ms Alison Seabeck MP (retired 10/07/2015)Mrs Thelma Sorensen (retired 31/03/2015)

3+44 (0)1752 636700 Annual Statements 2015

Strategic Report

Operating and Financial reviewThe members of the University Board of Governors have pleasure in presenting their report and the audited financial statements for the year ended 31 July 2015.

ConstitutionFollowing its re-designation in 2014 as a university the University of St Mark & St John has now been accepted by the Charities Commission as an exempt charity under the Charities Act 2011. The University has been undertaking a review of the Articles during the year, and although the changes had been approved by the Board by the date of signing these statements approval from the Privy Council had not been received.

The University of St Mark & St John is a company limited by guarantee comprising members limited in liability to the sum of £1. The terms of the memorandum of association prohibit the distribution of any of the income or property of the University to its members. The members of the University Board of Governors constitute trustees of the Charity and directors of the Company for the purposes of the Companies Act 2006.

The objects of the Company are to promote the advancement of further and higher education and the subsequent maintenance and carrying on of the University in accordance with the principles of the Church of England.

IntroductionDuring the 2014/15 academic year the University finalised the operational arrangements to support the newly adopted strategic plan; ‘Challenging Horizons’. In recognition of the ambitious nature of the plan the University secured financial support from HEFCE through the Catalyst Fund initiative to assist with leading and developing the required changes to the portfolio and curriculum delivery. This growth and diversification will be aligned to the University’s distinctive subject areas, but there is also an expectation of limited diversification into new subject areas within the humanities, social and natural sciences. The establishment of a research community will support the portfolio development, enabling the University to develop a credible and critical mass in each of its subject areas.

To realise the targets outlined in the plan significant investment will be required in leadership posts and academic and professional staff. A number of key appointments were made during the year, but this investment will continue over the next year as the portfolio development progresses. Up-front investment has been approved by the Board through the release of reserves for a two year period, enhanced with funding from HEFCE, and growth and efficiencies will provide the future funding required for sustained development.


Strategic Report

Operating reviewDuring 2014/15 the key performance indicators were revised in line with the agreed strategy and the University performed well against the student employability indicator, with 94.3% of graduating students moving into jobs or training within six months of leaving the University. Student satisfaction ratings fell overall, with a small number of poorly performing programmes impacting the overall rating. Action plans are in place to address the issues. Of the fourteen programmes with a countable response level, eight had satisfaction levels of 90% or over, well above the national average of 86%.

During the year new senior posts were appointed to lead student experience, curriculum development and research, postgraduate and innovation. A full departmental review was undertaken resulting in the agreed closure of poorly performing programmes and the identification of new programme areas for development and growth. New programmes in Psychology, Sociology and Social Science have been approved in principle for commencement in 2016.

Academic staff job descriptions were renegotiated and academic management roles redefined during the year to support the strategic change agenda. To support staff to fully meet the revised job descriptions and the needs of the University an academic development process was agreed, which will identify both individual and institutional development required to meet the targets identified in the strategic plan.

Financial reviewFinancially the University has continued to deliver excellent results in what is an increasingly challenging economic climate, returning an operating surplus of £1.7 million from a turnover of £24.8 million (below). This is in line with the 2013/14 results (£1.6 million surplus) reflecting prudent planning and delays in expenditure pending the agreement to the revised strategic plan. The University is in a strong position to respond to its covenant and the strategic plan, with a good level of cash reserves. All financial key performance indicators were met for the year.


The University continued to invest in the development of its asset base and key investments in the year included IT upgrades and systems developments to support the digital ambitions of the University. A campus feasibility study has been undertaken to align the estates and property strategy to the strategic plan and key projects will be identified early in the new academic year.

Future Plans and Risk ManagementRisk management is an essential element of managing the delivery of the strategic plan and the supporting financial strategy. The strategic review highlighted a range of risks to the University, the biggest risk being the adoption of a ‘do nothing’ scenario in a fast moving and challenging higher education climate. Through ‘Challenging Horizons’ the University is taking positive action to respond to this climate, including:

The appointment of an extended leadership team with responsibility for leading the changes outlined in the plan

The development and introduction of new postgraduate and undergraduate programmes based on applicant demand and growth

The expansion of appropriate collaborative arrangements

Progress on the plan is regularly monitored by senior management and the Governing Body through the risk register, regular meetings and strategy days.

Public Benefit StatementAs an exempt charity under the terms of the Charities Act 2011, the University is not required to be registered with the Charity Commission. It is, however, subject to the Charity commission’s regulatory powers which are monitored by HEFCE and the Board of Governors has had due regard to the Charity Commission’s guidance on public benefit.

The object of the University, as defined in the Memorandum of Association, is to promote the advancement of education. The full strategic plan is available from the University website, where the more detailed objectives and key performance indicators for the measurement of progress are detailed.

Originally established as a teacher training college in 1838, teacher education remains an area of distinctiveness today and from these roots the University has developed a wider range of public sector focussed provision in the fields of Youth and Community, Early Years Education, Speech and Language Therapy, Language Education, Sports Development, Coaching and Physical Education & Outdoor Adventure. This curriculum offer is augmented by provision in Media, the Arts and Humanities and Management.


Strategic Report

Strategic Report

The University is committed to the continuation of its position in respect of widening participation, with over 97% of students attending the University coming from State Sector schools and almost 40% from lower socio-economic groups; making the University one of the most inclusive institutions in England in 2014/15. As part of its widening participation strategy the University supports the raising of aspiration and attainment through the provision of workshops at feeder schools, mentoring programmes and summer schools, increasing awareness of the benefits of higher education. This ensures that those from traditionally low participation neighbourhoods (below 25%) are made aware of the choices open to them and supported through the decision making processes.

The University works hard to ensure that those students coming to the institution from disadvantaged backgrounds are supported, not only financially through our bursary and scholarship schemes, but by a well-qualified and experienced base of staff, in the professional and support services through to teaching staff. The University has retained Matrix accreditation for our student support services, which includes a financial support team, study skills and a strong disability team.

Most of the University students undertake work placements as an integral part of their programme of study and much of this will be in public sector and voluntary organisations such as schools, youth organisations, the NHS, drama groups and sports clubs. In addition to this the University has a strong culture of student and staff volunteering activities supporting initiatives such as ‘Right to Read’, ‘Country Holidays for Inner City Kids’ and various community projects. Students also have the opportunity to act as ‘student ambassadors’, mentors and ‘student IT support’ workers, working with current students, prospective students and the wider community.

Marjon Sports make an active contribution to the wider community, not only through the sports facilities being made available to community groups and schools locally, but through the supporting of key sports within hub clubs, encouraging children from across the City to engage in active sport from a young age to their late teens. During 2014/15 the University-operated clinics have increased their work with the NHS, supporting a range of rehabilitation programmes and are undertaking innovative work with the Macmillan Cancer Support, supporting patients in improving their health and wellbeing.

From a cultural perspective the University hosts an annual lecture series that is open to the public, lets out its drama facilities at cost or below to local community drama groups and has an open access policy for use of the library and learning resources centre.


The public benefits outlined above are funded largely through government funding for teaching and the charitable work of the University is also supported by the Governors, who give their time and wider support to the institution without payment. Notwithstanding the current financial climate, the University will continue to produce graduates whose primary role will be to work within and enhance the output of the public sector, and as an institution the University will continue in our charitable role to provide a broad range of public benefit to our community.

AuditorKPMG LLP were the appointed auditor for the year 2014/15. The University will be going out to tender for both internal and external auditors for the 2015/16 year.

By order of the Governing Body

Dr Juliet Williams CBEChair

Professor Cara AitchisonVice-Chancellor

Date: November 2015


Strategic Report


Tax StatusThe University is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2012 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the University is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 Corporation Tax Act 2012 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.

Fixed assetsFreehold property is included in the Balance Sheet at cost.

EmployeesHealth, safety and security matters are given special attention by the members of the University, and it is their policy to ensure that continued employment is offered to employees who become temporarily or permanently disabled and to provide special facilities wherever possible. The University Board of Governors also recognises the need to provide information on matters of concern to employees which is satisfied through its consultative procedures.

Payment of creditorsThe University’s policy is to obtain the best terms for all business and, thus, there is no single policy as to the terms used in agreements negotiated with suppliers. The University endeavours to include and abide by specific payment terms.

Governors’ liability insuranceThe University has purchased Governors’ liability insurance for the members of the University Board of Governors for the year ended 31 July 2015.


Members’ statement as to disclosure of information to auditorThe members of the University Board of Governors at the time of approving this report are listed on page 2. Having made enquiries of fellow members, each of these members confirm that:

To the best of each member’s knowledge and belief, there is no information relevant to the preparation of their report of which the Company’s auditor is unaware;

Each member has taken all the steps a member of the University Board of Governors might reasonably be expected to have taken to be aware of relevant audit information and to establish that the Company’s auditor is aware of that information, and

Each member of the University Board of Governors has confirmed that they did not have any transactions with the University or its subsidiaries which would require disclosure in the accounts under FRS 8 ‘Related Parties’

Annual Statements 2015 www.marjon.ac.uk10



1. Members of the governing body of the University accept responsibility for maintaining a sound system of internal control that supports the achievement of policies, aims and objectives, while safeguarding public and other funds and assets for which we are responsible, in accordance with the Memorandum and Articles of Association of the University of St Mark & St John and the Financial Memorandum with the Higher Education Funding Council for England.

2. Members of the governing body are trustees of the Board and as such their primary responsibilities in accordance with the Articles of Association are as follows: • the Governing Body will be responsible for assignment, subject to the other express provisions of the Articles, of the duties and responsibilities of the Vice-Chancellor, of the Holders of Senior Posts, Clerk and the Chaplain. • the determination of the educational character and objectives of the University and for the supervision of its activities; • the effective and efficient use of resources, the solvency of the University and for safeguarding its assets; • approving annual estimates of income and expenditure; • the determination of which posts are Senior Posts, save that the Vice-Chancellor, Chaplain and Clerk shall always be Holders of Senior Posts; • the assignment of duties to the Vice-Chancellor; • the appointment, discipline, suspension and dismissal and the determination of the grading, pay and conditions of service of the Holders of Senior Posts; • the agreement of the policy for pay and general conditions of employment of the Staff who are not Holders of Senior Posts; and • the appointment of Auditors; and • discharging all other duties of the directors of a charitable company limited by guarantee carrying on the business of the Company.

3. The system of internal control is based on an ongoing process designed to identify the principal risks to the achievement of policies, aims and objectives, to evaluate the nature and extent of those risks, aim to reduce the impact of the risks whilst seeking to ensure that all risks, and opportunities, are managed efficiently, effectively and economically. This process has been in place for the year ended 31 July 2015 and up to the date of approval of the financial statements, and accords with HEFCE guidance.

4. The University is committed to exhibiting best practice in all aspects of corporate governance. This summary describes the manner in which the University has applied the principles set out in the Higher Education Code of Governance as published by the Committee of University Chairs in December 2014. In the opinion of the members of the University Board of Governors, the University complies with all the provisions of the Code and it has complied throughout the year ended 31 July 2015.


12 Annual Statements 2015 www.marjon.ac.uk

5. The Governing Body of the University met five times in 2014/15. The University Board of Governors has four committees, which met on the following occasions: • Finance & Resources Committee – four meetings in 2014/15 • Audit Committee – three meetings in 2014/15 • Remuneration Committee – met once to determine the remuneration of senior staff including the Vice-Chancellor • Nominations Committee - met on two occasions to consider nominations for co-opted vacancies to the University Board of Governors and its committees.

6. The Governing Body considered and approved the revenue and capital budgets, Annual Monitoring Statement and the Financial Forecasts.

7. The University Board of Governors received reports at each meeting on: a. National and Regional Developments, academic issues such as the results of quality assessments by OFSTED and/or the QAA, student recruitment, the general financial situation, changes in key staff and University events and activities. b. The management accounts and other financial information. c. Legal and estates matters. d. Details of Risk Management issues and developments. These reports have been provided at each meeting since November 2001. e. Minutes of the meetings of the Finance & Resources Committee and Audit Committee. In addition to the minutes, the Chairs of the respective committees frequently provided oral reports and received and responded to questions from Board of Governor members.

8. The Finance & Resources Committee of the University Board of Governors examined all financial plans and forecasts, considered data on key operational issues, student recruitment, quality assessments and on risk management issues with particular emphasis on key financial risks identified as relating to each operational year. Their recommendations on these and other issues were made to the University Board of Governors.

9. The Audit Committee met with the Internal Auditors on three occasions during the year to consider internal Audit Reports, review and plan forthcoming internal audit reviews and to receive the Internal Auditors annual report. The Committee met with the External Auditors twice in 2014/15 to consider the interim Audit Report and plan and to consider and receive the financial statements for the year. A representative from the University was in attendance at all meetings but, at the request of the Chair of the Audit Committee, left each meeting so that independent discussions could take place between members of the Audit Committee and the Internal and/or External Auditors. The Chair of the Audit Committee provided an annual report for the University Board of Governors, which included reference to a report on value for money initiatives undertaken by the University.




10. During 2014/15 the Audit Committee commissioned reviews in Estates and Environmental Strategy, Value for money in Partnerships, Corporate Governance, Departmental Review of Food and beverages, Human Resources, strategic planning, Data assurance (Student Records), Use of IT in the delivery of education, cashless campus, Core Financial controls and Risk Management as well as a follow-up review of outstanding recommendations from 2013/14 audit reports.

11. Our review of the effectiveness of the system of internal control is informed by the work of the executive managers within the institution, who have responsibility for the development and maintenance of the internal control framework, and by comments made by the External Auditors in their reports. The External Auditors have provided a highlights memorandum and management letter in connection with the 2014/15 financial statements and their report to the Audit Committee will be forwarded to the Higher Education Funding Council for England.

12. After making appropriate enquiries, the University Board of Governors considers that the University has adequate resources to continue in operational existence for the foreseeable future. For this reason they adopt the going concern basis in preparing the financial statements. The amount of expenses claimed by trustees in 2014/15 is disclosed as £4220 which includes venue costs and travel and subsistence.


Statement of Members’ responsibilities in respect of the Strategic Report and the Consolidated Financial Statements

The members are responsible for preparing the Report of the Members of the University Board of Governors and the Consolidated Financial Statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the group and parent company financial statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).

Under company law the members must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and parent company and of their profit or loss for that period. In preparing each of the group and parent company financial statements, the members are required to:

Select suitable accounting policies and then apply them consistently;

Make judgments and estimates that are reasonable and prudent;

State whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the parent company will continue in business.

The members are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.

The members are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.


KPMG Plym House3 Longbridge Road PlymouthPL6 8LTUnited Kingdom

We have audited the Group and University financial statements (“the financial statements”) of the University of St Mark & St John (a company limited by guarantee) for the year ended 31 July 2015 which comprise the Consolidated Income and Expenditure Account, the statement of Consolidated Historical Cost Surpluses and Deficits, the Consolidated Statement of Total Recognised Gains and Losses, the Reconciliation of Movements in Accumulated Funds, the Consolidated and Company Balance Sheets, the Consolidated Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the Governing Body, in accordance with paragraph 13(2) of the University’s Articles of Government and section 124B of the Education Reform Act 1988 and to the company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Board of Governors those matters we are required to state to it in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Board of Governors for our audit work, for this report, or for the opinions we have formed.




Respective responsibilities of the Governing BodyAs explained more fully in the Statement of Members’ Responsibilities set out on page 14, the Governing Body is responsible for the preparation of financial statements which give a true and fair view. Our responsibility is to audit, and express an opinion, on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group’s and University’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Governing Body; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Report of the Members of the University Board of Governors to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on financial statementsIn our opinion the financial statements:

Give a true and fair view of the state of the affairs of the Group and University as at 31 July 2015 and of the Group’s income and expenditure, recognised gains and losses and cash flows for the year then ended;

Have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice and;

Have been prepared in accordance with the Statement of Recommended Practice - Accounting for Further and Higher Education and the Companies Act 2006;



Opinion on other matters prescribed in the HEFCE Audit Code of Practice issued under the Further and Higher Education Act 1992.In our opinion, in all material respects:

Funds from whatever source administered by the University for specific purposes have been applied to those purposes; and

Funds provided by HEFCE have been applied in accordance with the Financial Memorandum and any other terms and conditions attached to them.

Opinion on other matter prescribed by the Companies Act 2006In our opinion the information given in the Operating and Financial Review and Report of the Board of Governors for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception We have nothing to report in respect of the following matter where the HEFCE Audit Code of Practice issued under the Further and Higher Education Act 1992 requires us to report to you if, in our opinion:

The statement of internal control (included as part of the Corporate Governance Statement) is inconsistent with our knowledge of the University and group.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

Adequate accounting records have not been kept by the parent University, or returns adequate for our audit have not been received from branches not visited by us; or

The parent university financial statements are not in agreement with the accounting records and returns; or

Certain disclosures of directors’ remuneration specified by law are not made; or

We have not received all the information and explanations we require for our audit.


Victoria Sewell (Senior Statutory Auditor)for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants Plym House3 Longbridge RoadMarsh MillsPlymouthPL6 8LT

19

Consolidated Income and Expenditure Account For the year ended 31 July 2015 Notes 2015 2014

£000 £000 Income Funding council grants 3 1,238 2,800 Academic fees and support grants 4 17,313 16,258 Other operating income 5 6,063 5,241 Research Income 6 39 17 Investment income 7 149 150

Total income 24,802 24,466

Expenditure Staff costs 8

11,881 11,798

Exceptional staff restructuring costs - 308 Depreciation 12 1,732 1,771 Other operating expenses 9 8,697 8,142 Interest payable 10 809 838

Total expenditure 23,119 22,857

Surplus on continuing operations after depreciation of assets at cost and gain / loss on disposal of fixed assets

11

1,683

1609

All items of income and expenditure arise from continuing operations.

The notes on pages 25 to 54 form an integral part of these financial statements.

20

Statement of Consolidated Historical Cost Surpluses and Deficits For the year ended 31 July 2015

2015 2014

£000 £000 Surplus on continuing operations 1,683 1,609 Valuation loss on disposal of fixed asset investments

-

-

1,683 1,609

Notes on pages 25 – 54 form part of the financial statements.

21

Consolidated Statement of Total Recognised Gains and Losses For the year ended 31 July 2015 2015 2014 £000 £000 Surplus for the financial year 1,683 1,609 Actuarial loss recognised on pension scheme

(1,699) (1,472)

Unrealised surplus on revaluation of investments

379 136

Total recognised gains relating to the financial year

363 273

Reconciliation of Movements in Accumulated Funds For the year ended 31 July 2015

Group Company

2015 2014 2015 2014

£000

£000 £000 £000

Surplus for the financial year 1,683 1,609 1,683 1,603 FRS 17 actuarial loss (1,699) (1,472) (1,699) (1,472) Movement in revaluation reserve (243) (32) (243) (32) _______

Net increase in accumulated funds (259) 105 (259) 99 Opening accumulated funds 14,117 14,012 14,260 14,161

Closing accumulated funds 13,858 14,117 14,001 14,260

Notes on pages 25-54 form part of the financial statements.

22

Consolidated Balance Sheet As at 31 July 2015 Notes 2015 2014 £000 £000 Fixed assets Tangible fixed assets 12 29,442 30,622 Investments 13 3,745 3,530

33,187 34,152 Current assets Stocks 14 29 30 Debtors 15 1,901 1,426 Cash at bank and in hand 7,870 6,214

9,800 7,670 Creditors: amounts falling due

within one year

16 (3,123) (3,769)

Net current assets 6,677 3,901 _

Total assets less current liabilities 39,864 38,053 Creditors: amounts falling due after more than one year

17

(12,400)

(12,845)

Net assets excluding pension liability

27,464 25,208

Pension liability 23 (8,338) (6,314)

Net assets including pension liability

19,126 18,894

23

Consolidated Balance Sheet (continued) As at 31 July 2015

Notes 2015 2014 £000 £000 Deferred capital grants 19 4,934 4,777 Reserves

Revaluation reserve 378 136 Income and expenditure account excluding pension reserve

22,152 20,295

Pension reserve (8,338) (6,314)

Income and expenditure account including pension reserve

20

14,192 14,117

Total funds 19,126 18,894

These financial statements were approved by the University Board of Governors on 2015 and were signed on its behalf by:

Dr Juliet Williams CBE Professor Cara Aitchison

Chair Vice-Chancellor

Company registered number: 7635609

Notes on pages 25 - 54 form part of the financial statements.

24

Company Balance Sheet As at 31 July 2015 Notes

2015 2014 £000 £000 Fixed assets Tangible fixed assets 12 29,461 30,641 Investments 13 3,745 3,530

33,206 34,171 Current assets Stocks 14 29 24 Debtors 15 1,989 1,556 Cash at bank and in hand 7,870 6,209

9,888 7,789 Creditors: amounts falling due within

one year

16

(3,123)

(3,764)

__

Net current assets 6,765 4,025

Total assets less current liabilities 39,971 38,196 Creditors: amounts falling due after more than one year

17

(12,400)

(12,845)

_______

Net assets excluding pension liability 27,571 25,351

Pension liability 23 (8,338) (6,314) ______

Net assets including pension liability 19,233 19,037

25

Company Balance Sheet (continued)

As at 31 July 2015 Notes

2015 2014 £000 £000 Deferred capital grants 19 4,934 4,777

Reserves Revaluation reserve 378 136 Income and expenditure account excluding pension reserve

22,259

20,438

Pension reserve (8,338) (6,314)

Income and expenditure account including pension reserve

20 14,299 14,260

Total funds 19,233 19,037

These financial statements were approved by the University Board of Governors on 2015 and were signed on its behalf by:

Dr Juliet Williams CBE Professor Cara Aitchison

Chair Vice-Chancellor

Company registered number: 7635609


26

Consolidated Cash Flow Statement For the year ended 31 July 2015

Notes 2015 2014

£000 £000 Cash inflow from operating activities

24 3,149 3,085

Returns on investments and servicing of finance

25

(660) (688)

Capital expenditure and financial investments

26

(187) (2,905)

Cash outflow before management of liquid resources

2,302 (508)

Financing 27 (646) (643)

Increase / (Decrease) in cash in the period

1,656 (1,151)


27

Notes to the financial statements As at 31 July 2015

1 Company Status

The Company is limited by guarantee and has no issued share capital. The liability of its

members shall not exceed £1 each.

2 Accounting Policies

The accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group’s financial statements.

Accounting convention

The financial statements are prepared under the historical cost convention, modified to include the revaluation of investments.

Going Concern

The University has sufficient financial resources together with continued funding. As a consequence, the directors believe that the University is well placed to manage its business risks successfully despite the current uncertain economic outlook. Detailed scenario planning has been undertaken with regard to possible changes in student behaviour as a result of the new fee regime and a 10 year strategic plan has been prepared. The Directors are confident that the University is in a position to respond to the changes and remain a going concern. The increased cash generated in 2014/15 will also support the University in taking a managed and measured response to the possible changes in future funding. The directors have a reasonable expectation that the University has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis in preparing the annual financial statements.

Basis of preparation

The financial statements have been prepared in accordance with both the Statement of Recommended Practice: Accounting in Higher Education Institutions (SORP 2007) and applicable accounting standards (UK Generally Accepted Accounting Practice) and under the historical cost accounting rules, modified to include the revaluation of investments.

Basis of consolidation

The group financial statements consolidate the financial statements of The University of St Mark & St John and its subsidiary undertakings. These financial statements are made up to 31 July 2015. For associated undertakings the group includes its share of profits and losses in the consolidated profit and loss account and its share of post-acquisition retained profits or accumulated deficits in the consolidated balance sheet.

In the Company’s accounts, investments in subsidiary undertakings are stated at cost less amounts written off.

In accordance with Section 408 of the Companies Act 2006 the University of St Mark & St John is exempt from the requirement to present its own income and expenditure account.

28

Notes (continued)

2 Accounting Policies (continued)

The amount of the surplus for the financial year dealt with in the financial statements of the University of St Mark & St John is disclosed in note 11 to these accounts.

Fixed assets

Buildings and integral fixtures and fittings

Depreciation has been provided at 2% on freehold buildings and on fixtures and fittings which form an integral part of the freehold buildings in which they have been installed. Those buildings and integral fixtures and fittings which have a useful economic life of 10 years are depreciated over this period.

No depreciation is provided on freehold land.

Assets in the course of construction have been split out of freehold land and buildings, comparatives have been restated where necessary. Assets in the course of construction are not depreciated until brought into use.

Other fixtures, fittings and equipment

Assets costing less than £5,000 per individual item or group of related items are written off in the year of acquisition. All other assets are capitalised.

Assets funded on a replacement basis by mean of maintenance grants receivable from the Higher Education Funding Council for England are written off in the year in which they are purchased.

Assets qualifying for special capital grants receivable from the Higher Education Funding Council for England and all other new assets purchased are capitalised in the financial statements and written off in equal instalments over their estimated useful lives as follows:

Temporary classrooms and other modular buildings - between 10 and 20 years. All other equipment - between 3 and 5 years

Capitalisation of interest

Interest on loan finance in relation to the construction of new buildings has been capitalised as tangible fixed assets and is written off over the useful life of the assets to which it relates.

Capital grants

Capital grants received are added to the deferred capital grant account. Those capital grants which relate to specific depreciable fixed assets are credited to the income and expenditure account in proportion to the annual depreciation charge so as to match the cost with the associated benefit.

Stocks

Stocks of food, catering items and stationery are valued at the lower of cost and net realisable value.

All other consumables are written off in the year of purchase.

29

Notes (continued)


Cash flows and liquid resources

Cash flows comprise increases or decreases in cash. Cash includes cash in hand, deposits repayable on demand and overdrafts. Deposits are repayable on demand if they are in practice available within 24 hours without penalty. No investments, however liquid, are included as cash.

Liquid resources comprise assets held as a readily disposable store of value. They include term deposits, government securities and loan stock held as part of the University’s treasury management activities. Foreign Currencies

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet date and the gains or losses on translation are included in the income and expenditure account.

Leases

Where the company enters into a lease which entails taking substantially all the risks and rewards of ownership of an asset, the lease is treated as a “finance lease”. The asset is recorded in the balance sheet as a tangible fixed asset and is depreciated over its useful life. Future instalments under such leases, net of finance charges, are included within creditors. Rentals payable are apportioned between the finance element, which is charged to the income and expenditure account, and the capital element which reduces the outstanding obligation for future instalments. All other leases are accounted for as “operating leases” and the rental charges are charged to the income and expenditure account on a straight line basis over the life of the lease.

Investments

Fixed asset investments are carried at market value and the movement in market values is taken to the revaluation reserve. Diminution in value is charged to the income and expenditure account to the extent that it is not covered by a previous revaluation surplus.

Quasi-subsidiaries

Where assets have been transferred to another company without transferring the associated risks or benefits, that company is regarded as a quasi-subsidiary and all of its transactions are treated as if they were those of the University of St Mark & St John. For example, the University’s liabilities within the Business Expansion Scheme are treated in this way (see note 18).

Finance costs

The finance cost of loans, is allocated on a sum of digits basis over the term of the individual loans.

30

Notes (continued)


Pensions

The University participates in the London Pensions Fund defined benefit pension scheme, which requires contributions to be made to a separately administered fund. The regular cost of providing retirement benefits to employees during the year is charged to operating profit in the year. Where appropriate, the full cost of providing amendments to benefits in respect of past service would be charged to operating profit in that year. The expected return on the assets of the scheme during the year based on the market value of the scheme assets at the start of the financial year is included within other finance income – FRS17. This also includes a charge representing the expected increase in liabilities of the scheme during the year, arising from the liabilities of the scheme being one year closer to payment. Differences between actual and expected returns on assets during the year are recognised in the statement of recognised gains and losses in the year, together with differences from changes in assumptions (see note 23).

The net deficit on the defined benefit pension scheme is reported on the balance sheet within the pension liability.

The University also contributes to the Teachers’ Superannuation Scheme and the Universities’ Superannuation Scheme (see note 23). Contributions are charged to the income and expenditure account when payable. The University also contributes to the Church of England pension Board, all contributions are charged to the income and expenditure account when payable.

Maintenance costs

The cost of routine maintenance is charged to the income and expenditure account in the period it is incurred. The University has a planned maintenance programme which is reviewed on an annual basis. Actual expenditure on planned maintenance is charged to the income and expenditure account in the period in which it is incurred.

Taxation Status

The University is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2014 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly, the University is potentially exempt from taxation in respect of income or capital gains received within categories covered by Chapter 3 Part 11 Corporation Tax Act 2014 or Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied exclusively to charitable purposes.

31

Notes (continued)

3 Funding Council grants

2015 2014 £000 £000 Recurrent grant - TA - 579 - HEFCE 838 2,012 TA - Specific funding 110 26 Release of capital grants (see note 19) - Funding council and similar bodies 290 183

1,238 2,800

4 Academic fees and support grants

2015 2014 £000 £000 Full-time students 16,228 14,168 Full-time students charged overseas fees 662 542 Part-time fees 413 317

Short course fees 10 1,231

17,313 16,258

5 Other operating income

2015 2014 £000 £000 Residences, catering and conferences 2,611 2,020 Other income 3,452 3,221

6,063 5,241

32

Notes (continued)

6 Research income

2015 2014 £000 £000 UK based charities 39 17

7 Investment income

2015 2014 £000 £000 Investment income 103 64 Interest receivable

46

86

149 150

8 Staff costs

2015 2014 £000 £000 Wages and salaries 9,826 9,696 Social security costs 657 673 Other pension costs 1,398 1,429

11,881 11,798

33

Notes (continued)

8 Staff costs (continued)

The number of staff, including the Accounting Officer but excluding the Vice-Chancellor, who received annual emoluments excluding pension contributions but including benefits in kind in the following ranges was:

2015

Number of post-holders

2014

Number of post-holders

£110,001 to £120,000 1 -

2015 2014 £000 £000

Emoluments of the Principal/ Vice-Chancellor

Salary 180 175 Other payments 5 - Expenses Allowance - 10 Other non-cash benefits - - Relocation costs 10 5

195 190 Pension contributions 29 28

224 218

The emoluments of the Vice-Chancellor are shown on the same basis as for higher paid staff and they include salary, bonus and any other taxable benefits. All senior post holders received pay award as determined by the Remuneration Committee. The University’s pension contributions in respect of their services were paid to the Relevant Pension Scheme at the same rates as for other academic staff and amounted to £28,652:2015 (2014: £27,952).

The members of the Board of Governors do not receive any remuneration in their capacity as directors. Certain members are employed by the University as academic and administrative staff.

34

Notes (continued)

8 Staff costs (continued)

2015 No.

2014 No.

Average (full time equivalent) staff numbers by category including hourly paid staff are as follows:

Academic Staff 103 116 Professional and Services

228 206

331 322

9 Other operating expenses

2015 2014 £000 £000 Heat, power and water 840 751 General maintenance 1,360 1,224 Travel and subsistence 195 200 Operating leases – other 43 35 Consumables and laboratory expenditure 637 558 Books and periodicals 270 258 Equipment 526 366 Placements/payments to schools 1,414 1,718 External auditor’s remuneration - audit fees 41 54 Internal auditor’s remuneration 30 33 Advertising and publicity 281 386 Other expenses (including residence, catering and

conferences) Disposal of fixed assets

2,828

225

2,440

- FRS 17 – other financial costs (note 23) 7 119

8,697 8,142

35

Notes (continued)

10 Interest Payable

2015 2014 £000 £000 On bank loans, overdrafts and other loans wholly repayable Within five years

-

-

On all other loans 809 838

809 838

11 Surplus on continuing operations for the period

The surplus on continuing operations for the period is made up as follows:

2015 2014 £000 £000 University’s surplus for the period before provision against carrying value of investment in subsidiaries

1,683

1,609

Retained by subsidiaries - -

1,683 1,609

36

Notes (continued)

12 Tangible fixed assets

The net book value of group freehold land and buildings includes £101,000 of non-depreciable land (2014: £101,000).

Interest capitalised in the year amounted to £ nil (2014: £nil). Total amount of interest capitalised in fixed assets is £436,119 (2014: £436,119).

Interest capitalised is within freehold land and buildings.

Freehold land and buildings

Integral part of buildings

Fixtures, fittings and equipment

Total

£000 £000 £000 £000 Group Cost At 1 August 2014 35,388 1,603 16,964 53,955 Additions - - 778 778

Disposals - - (736) (736)

At 31 July 2015 35,388 1,603 17,006 53,997

Depreciation At 1 August 2014 8,722 1,603 13,008 23,333 Charge for year Disposals

808 - 924 (510)

1732 (510)

At 31 July 2015 9,530 1,603 13,422 24,555

Net book value At 31 July 2015 25,858 - 3,584 29,442

At 31 July 2014 26,666 - 3,956 30,622

37

Notes (continued)

12 Tangible fixed assets (continued)

Freehold land

and buildings Integral part of

buildings Fixtures, fittings

and equipment

Total £000 £000 £000 £000 Company Cost At 1 August 2014 35,407 1,603 16,874 53,884 Additions Disposals

-

-

778

(736)

778

(736)

At 31 July 2015 35,407 1,603 16,916 53,926

Depreciation At 1 August 2014 Charge for year Disposals

8,723

808

-

1,603

-

-

12,917

924

(510)

23,243

1732

(510) _______ ______ _______ ________

At 31 July 2015 9,531 1,603 13,331 24,465

Net book value

At 31 July 2015 25,876 - 3,585 29,461

At 31 July 2014 26,684 - 3,957 30,641

38

Notes (continued)

13 Investments

Group Quoted Investments

£000 Valuation At 1 August 2014 3,530 Additions 682 Disposals (812) Net investment gain 345

At 31 July 2015 3,745

Shares in group

undertakings

Quoted investments

Total

Company £ £ £ Cost or valuation: At 1 August 2014 100 3,529,905 3,530,005 Additions - 682,153 682,153 Disposals - (812,728) (812,728) Revaluation - 345,403 345,403

Net book value 100 3,744,733 3,744,833 At 31 July 2015

At 1 August 2014 100 3,529,905 3,530,005

The historic cost of the quoted investments was £3,744,733 in 2015 (2014: £3,307,000).

The University held 100 Ordinary shares of £1 each, which represents 100% of the share capital of Marjon (South West) Limited, a company incorporated in England. The principal activity of Marjon (South West) Limited in 2013/2014 was the provision of catering services. In 2014/15 these activities have been carried out through the University. The loss on ordinary activities after taxation was £nil (2014: £nil) generated from a turnover of £nil (2014: £nil). The results have been consolidated into the group Income and Expenditure Account. Marjon (South West) Limited has net liabilities of £ 87,703 (2014: £123,000).

39

Notes (continued)

14 Stocks

Group

Company

2015 2014 2015 2014 £000 £000 £000 £000 Raw materials and consumables 29 30 29 24

15 Debtors

Group

Company

2015 2014 2015 2014 £000 £000 £000 £000 Fees and grants receivable 601 495 601 495 Amounts owed by subsidiary undertakings

- -

88 91

Other debtors 676 476 676 515 Prepayments and accrued income 624 455 624 455

1,901 1,426 1,989 1,556

40

Notes (continued)

16 Creditors: amounts falling due within one year

Group Company

2015

2014

2015

2014 £000 £000 £000 £000 Banks loans: - Development loans (note 17) 595 561 595 561 Investors’ loan (note 17) 88 82 88 82 Bank overdrafts - - - - Fees and grants in advance 252 278 252 278 Trade creditors 987 1,227 987 1,227 Amounts owed to subsidiary

undertakings

-

-

-

- Taxation and social security 201 218 201 218 Other creditors 385 624 385 619 Accruals 615 779 615 779

3,123 3,769 3,123 3,764

The bank loans are secured by a fixed charge over certain of the University’s land and buildings

17 Creditors: amounts falling due after more than one year

Group Company

2015

2014

2015

2014 £000 £000 £000 £000 Investors’ loan 603 578 603 578 Other creditors 292 168 292 168 Bank loans - Capital development

- loan (PAHC)

1,464

1,761

1,464

1,761 - Estate development

loan

10,041

10,338

10,041

10,338

12,400 12,845 12,400 12,845

41

Notes (continued)

17 Creditors: amounts falling due after more than one year (continued)

The development and capital development bank loans are secured on certain of the University’s land and buildings. The investors’ loan is secured on 36 rooms within certain of the University’s buildings.

The capital development loan carries interest at 5.5% and is repayable over 15 years commencing November 2005.

The investors’ loan carries interest at an effective rate of 10.3% per annum and is repayable over 25 years commencing in December 1998. The loan is also secured on a bank deposit account holding £74,000 (2014:£70,000) included in cash at bank and in hand. The bank deposit account is a fund for the repayment of the BES loan (see note 18) which is the nature of the security. The University cannot access these funds without the consent of Capital Ventures plc.

The Barclays estate development loan carries interest at a rate of 6.65% and is repayable over 25 years commencing in 2011. The loan to finance estates developments is unsecured although the first Barclays loan, taken out in 2005, is secured on the legal mortgage over the freehold property known as the Peninsular Allied Health Centre.

Loan amounts are repayable as follows:

Group & Company

Group & Company

2015 2014

£000

£000

In one year or less (note 16) 683 643 Between one and two years 717 677 Between two and five years 2,383 2,227 In five years or more 9,009 9,774

12,792 13,321

42

Notes (continued) 18 Business Expansion Scheme In 1994 the University raised finance from Marjon Tenancies 1 plc (“Tenancies”), a company formed under the Business Expansion Scheme, by the sale of leasehold interests in 36 of its student accommodation rooms. Tenancies in turn have let the rooms under assured tenancies and the income generated will be set aside to provide the return to its investors.

The University is committed to the purchase of the shareholdings of investors in Tenancies at predetermined amounts starting in December 1998 and annually thereafter for a further 25 years. Penalty provisions apply in the event of default by the University, but in the opinion of the Board of Governors the possibility of these being invoked is remote.

The net proceeds raised by the issue of shares in Tenancies has been treated in these financial statements as an investors loan with the cost of those funds being charged on a sum of digit basis over the period of the loan.

43

Notes (continued)

19 Deferred capital grants

Group & Company

Group & Company

2015 2014 £000 £000 Balance brought forward 4,777 4,833 Receivable during year 461 127

5,238 4,960 Deferred grant income released (304) (183)

4,934 4,777

The balance of the deferred grants are to be released as follows:

Expansion grant from Department of Education and

Science (DES) 287 287

Capital grants from DES 59 61 Grants from the Central Board of Finance of the Church of England

129 129

Grant from Plymouth City Council 37 39 Grant from Sports Council 30 31 Capital grant from the HEFCE/TDA Grant from European Investment Bank Grant from SWSHA

3,752 130 24

3,803 133 24

Grant from Plymouth College Lottery Sport England

255

231

270

-

4,934 4,777

44

Notes (continued)

19 Deferred capital grants (continued)

Group & Company

Group & Company

2015 2014 £000 £000 The deferred capital grants are to be released as follows: Within one year 305 223 After one year 4,629 4,554

4,934 4,777

Capital grants can be analysed as follows: Buildings 3,615 3,741 Equipment 903 620 Other 416 416

4,934 4,777

20 Reserves Group Company Accumulated

Reserve £000

Accumulated Reserve

£000 At 1 August 2014 13,965 14,072 Surplus for year 1,683 1,683 FRS 17 - Actuarial loss (1,699) (1,699) Movement in revaluation reserve 243 243

At 31 July 2015 14,192 14,299

45

Notes (continued)

21 Capital Commitments

Capital commitments at the end of the year for which no provision has been made in these financial statements:

Group Company

2015 2014 2015 2014 £’000 £’000 £’000 £’000 Contracted 190 65 190 65

22 Contingent liabilities

Group and Company

Those grants received which are treated as deferred income (see note 19) together with other grants, may become repayable if certain events occur - typically, the University ceasing to be a higher education institution. In the opinion of the Board of Governors the possibility of any of these events occurring is remote, accordingly no detailed disclosure is given.

23 Pensions

The University participates in four defined benefit pension schemes from the Teacher’s Pension Scheme, the Universities’ superannuation Scheme, the London Pensions Fund and the Church of England Pension Scheme. The total pension charge for the year was £1,398,000 (2014: £1,429,000) There were no outstanding or prepaid contributions at either the beginning or end of the financial year.

Details of the scheme are as follows: (i) The Teachers’ Superannuation Scheme is administered by the DFES in accordance with the Teachers’ Superannuation (Consolidation) Regulations 1988 (as amended). Actuarial valuations of the scheme are carried out by the government Actuary’s Department and the employer’s contribution is currently 20.3 % (2014: 17.1%). It is not possible to reasonably identify the assets and liabilities of the University in respect of this scheme and consequently no disclosures are presented under FRS17 - retirement benefits. The scheme is unfunded and therefore no valuations of the fund’s assets are published.

46

Notes (continued)

23 Pensions (continued)

(ii) Universities’ Superannuation Scheme

The University participates in the Universities Superannuation Scheme (USS), a defined benefit scheme which is contracted out of the State Second Pension (S2P). The assets of the scheme are held in a separate fund administered by the trustee, Universities Superannuation Scheme Limited.

The University has 3 (2014: 3) active members participating in the scheme, to include both final salary and career revalued benefit schemes. The current employer contribution rate is 16 % (2014: 16%) and the 2014 valuation (unaudited) indicates that employer contributions will increase to 18% as at 1 April 2016.

The latest triennial actuarial valuation of the scheme was at 31 March 2014. The actuary carries out an annual actuarial valuation and the latest available report is as at 31st March 2014. Key highlights from this report are as follows: -

Funding position

As at 31 March 2014(£bn) As at 31 March 2011(£bn)

Liabilities 46.9 35.3

Assets 41.6 32.4

Surplus/(shortfall) (5.3) (2.9)

Funding level 89% 92%

The 2014 valuation has recently been finalised and the audit process is in progress. Therefore the latest available audited triennial actuarial valuation of the scheme was at 31 March 2011, which was carried out using the projected unit method. The 2014 valuation indicates that employer contributions will increase to 18% from 1 April 2016. As at 31st March 2014 the scheme is estimated to have had a shortfall of £5.3 billion equivalent to a funding level of 89%.

47

Notes (continued)


(iii) The London Pension fund provides members with benefits related to pay and service at rates which are defined under the Local Government Superannuation Regulations. To finance these benefits, assets are accumulated in the fund and are held separately from the assets of the University. The University pays contributions to the fund at rates determined by the fund’s actuaries, currently 20.8%, based on regular actuarial review of the financial position of the fund. The pension costs are determined with the advice of independent qualified actuaries, on the basis of triennial valuations using the projected unit method. The result of the most recent valuation, which was conducted as at 31 March 2014 is as follows:

% Main assumptions: Rate of return on investments (% per annum) 8.8% Rate of salary increases (% per annum) 4.5% Rate of pension increases (% per annum) 3.0%

Market value of scheme assets (£’000) 4,695m

Level of funding being the actuarial value of assets, expressed as a percentage of benefits accrued to members, after allowing for future salary increases

91%

The valuation used for FRS 17 disclosures has been based on the most recent actuarial valuation at 31 March 2014 and updated by Barnett Waddingham to take account of the requirements of FRS 17 in order to assess the liabilities of the scheme at 31 July 2015. Scheme assets are stated at their market values at the respective balance sheet dates.

2015 2014 2013 % % % Main assumptions: Rate of salary increases 4.4 4.4 4.3 Rate of increase in pensions in payment 2.6 2.7 2.6 Discount rate 3.8 4.2 4.7 Inflation assumption 2.6 2.7 2.6

48

Notes (continued)


The assets and liabilities of the whole scheme and the expected rate of return at 31 July are: Long term

rate of return

expected

Value Long term rate of return

expected

Value Long term rate of return

expected

Value

**(taken from page 6 of FRS17 report)

2015 2015 2014 2014 2013 2013

% £’000 % £000 % £000 Equities **5% 7,576 6.7 7,011 6.4 7,052 Bonds 3,329 6.1 4,564 4.9 4,351 Alternative Assets Infrastructure Commodities Property

- 920

77 538

n/a 6.3 6.1 5.6

- 533 170 437

5.4 n/a n/a n/a

2,251 - - -

Cash Cashflow Matching

2,211 2,477

3.2 3.4

2,209 974

0.5 3.4

150 1,200

Total market value of assets

17,128 15,898 5.4 15,004

2015 2014 2012 £’000 £’000 £’000 Estimated asset share for the University

17,128

15,898

11,901

Present value of scheme liabilities

(25,451)

(22,196)

(15,714)

Present value of unfunded liabilities

(15)

(16)

(19)

Net pension liability (8,338) (6,314) (3,832)

49

Notes (continued)


The current mortality assumptions include sufficient allowance for future improvements in mortality rates. The assumed life expectations on retirement at age 65, based on the PFA92 and PMA92 tables, are:

Males Females Current pensioners 21.1 24.9 Future pensioners 23.5 27.2

An analysis of the defined benefit cost attributable to the University for the year at 31 July 2015 is as follows: 2015 2014 £’000 £’000 Current service cost 1,084 936

Total operating charge 1,084 936

Expected return on employer assets 936 824 Interest on pension scheme liabilities (929) (943)

Other financial /(income) costs 7 (119)

50

Notes (continued)


Analysis of amounts that are recognised in the Statement of Total Recognised Gains and Losses (STRGL) of the University: 2015 2014 £’000 £’000 Actual return less expected return on pension scheme assets (231) (566) Experience gains and losses arising on the scheme liabilities - 1,325 Changes in assumptions underlying the present value of the scheme liabilities

(1,468)

(2,231)

Actuarial loss recognised in the STRGL (1,699) (1,472)

Movement in the deficit attributable to the University during the year Reconciliation of defined benefit obligation 2015 2014 £’000 £’000 Opening Defined Benefit Obligation 22,212 19,862 Adjustment to opening balance per actuarial report (122) Service cost 1,084 936 Interest cost 929 943 Actuarial gains Losses on curtailments

1,468 42

874 -

Estimated benefits paid (net of transfers in) (534) (533) Contribution by Scheme participants 267 254 Unfunded pension payments (2) (2)

Closing Defined Benefit Obligation 25,466 22,212

51

Notes (continued)


Movement in the deficit attributable to the University during the year (continued) Reconciliation of the fair value of Scheme assets 2015 2014 £’000 £’000 Opening fair value of Scheme assets 15,898 15,004 Expected return on Scheme assets 936 824 Actuarial losses (231) (598) Contributions by employer 794 949 Contributions by Scheme participants 267 254 Estimated benefits paid (net of transfers in and unfunded) (536) (535)

Fair value of Scheme assets at end of period 17,128 15,898

Reconciliation of opening and closing surplus £’000 £’000 Deficit in the scheme at the beginning of the year

(6,314)

(4,736)

Movement in the year:

Current service cost (1,084) (936) Employer contributions 792 947 Contributions in respect of unfunded benefits 2 2 Other financial income 7 (119) Actuarial losses Settlements/curtailments

(1,699) (42)

(1,472)

Deficit in the scheme at end of year (8,338) (6,314)

52

Notes (continued)


Group

Company 2015 2014 2015 Net assets £’000 £’000 £’000 Net assets excluding pension liability 27,556 20,488 27,556 Pension liability (8,338) (4,736) (8,338)

Net assets including pension liability 19,218

15,752 19,218

Income and expenditure reserve £’000 £’000 Consolidated Income and Expenditure Reserve excluding pension liability

27,556 20,488

Pension liability (8,338) (4,736)

Consolidated Income and Expenditure Reserve including pension liability

19,218 15,752

53

Notes (continued)


History of experience gains and losses: 2015 2014 2013 2012 2011 £’000 £’000 £’000 £’000 £’000 Difference between expected return and actual return on pension scheme assets

- amount (£’000) (231) (598) 1,702 (605) 579 - % of scheme assets 1.3% 3.8% 11.3% 4.9% 4.9% Experience losses arising on scheme liabilities

- amount (£’000) - 1,357 (7) (1) 1,155 - % of the present value of scheme liabilities

-

6.1%

0.0%

0.0%

7.4%

Total actuarial gain /(loss) recognised in the statement of total recognised gains and losses

- amount (£’000) (1,699) (1,472) 1,651 2,337 (711) - % of the present value of scheme liabilities

6.7% 6.6%

8.31% 12.7% 4.5%

Cumulative amount recognised in the STRGL

(299) (1,400) 72 (1,579) (3,916)

(iv) The Church of England Pensions Scheme has one member and the contributions for the year ending 31 July 2015 were £5160.46

54

Notes (continued)

24 Reconciliation of operating profit to operating cash flow

2015 2014 £000 £000 Surplus for the financial year 1,683 1,609 Interest receivable (46) (86) Interest payable 809 838 Dividends receivable (103) (64) Release of capital grant (290) (183) Depreciation 1,732 1,771 Decrease in stocks 1 3 Increase in debtors 306 (383) Increase/(decrease) in creditors (1091) (484) Movement re FRS 17 (*) (77) 64 Loss on sale of fixed assets Unrealised gain

225 -

- -

3,149 3,085

(*) The movement re FRS 17 represents the differences between employer contributions to the Scheme and the Income and Expenditure account charge under FRS 17 and the additional FRS 17 finance income or charge.

55

Notes (continued)

25 Returns on investments and servicing of finance

2015 2014 £000 £000 Interest received 46 86 Interest paid (809) (838) Income from investments 103 64

(660) (688)

26 Capital expenditure and financial investments

2015 2014 £000 £000 Purchase of investments (682) (2,324) Sale of investments 812 374 Payments to acquire tangible fixed assets (778) (1,082) Capital grants received 461 127

(187) (2,905)

27 Financing

2015 2014 £000 £000 Repayment of debt (646) (643)

(646) (643)

56

Notes (continued)

28 Reconciliation of net cash flow to movement in debt

2015 2014 £000

£000

Increase/(decrease) in cash in the period 1,656 (1,151) Cash inflow from change in debt and lease financing 683 643

Change in net debt resulting from cash flows 2,339 (508) Non cash movement Rolled up interest (40) (26)

Movement in net debt in the period 2,299 (534) Net debt at the start of the period (7,106) (6,572)

Net debt at the end of the period (4,807) (7,106)

29 Analysis of net debt

At

1 August 2014

Cash flow Other non cash

movements

At 31 July

2015 £000 £000 £000 £000 Cash at bank and in hand 6,214 1,656 - 7,870 Overdraft - - - -

6,214 1,656 - 7,870 Debt due within one year (643) - (40) (683)

Debt due after one year (12,677) 683 - (11,994)

(7,106) 2,339 (40) (4,807)

Other non cash movements relate to interest rolled up into loan balances.

57

Notes (continued)

30 Access funds

2015 2014 £000 £000 Funding council grant brought forward - Funding Council grants received in year - 72

- 72 Disbursed to students - (72)

Balance unspent - -

Funding Council grants are available solely for students; the University acts only as paying agent. The grants and related disbursements are therefore excluded from the Income and Expenditure account.

31 NCTL Training Bursaries

2015 2014 £000 £000 Funding council grants received in year 330 1,060 Disbursed to students (334) (969) Excess funding to be repaid 4 (91)

- -

NCTLtraining bursaries are available solely for students; the University acts only as payment agent. The training bursaries are therefore excluded from the Income and Expenditure Account.

58

Notes (continued)

32 Related party transactions

The University has taken advantage of the exemption in FRS 8 “Related Party Disclosures”, concerning transactions with its subsidiary companies, which are part of The University of St Mark & St John Group. The University remains a subscriber to the CG TLA Consortium and in the year did not derive any benefits from the organisation.

59

The University of St Mark & St John Foundation

(a company limited by guarantee)

The following pages do not form part of the audited financial statements

60

Seven year results summary (Group)

31 July

2015 31 July

2014 31 July

2013 31 July

2012 31 July

2011 31 July

2010 31 July

2009

£’000 £’000 £’000 £’000 £’000 £’000 £’000 Tangible fixed assets

29,442

30,642

31,311

30,998

31,026

28,776

15,702

Investments 3,745 3,530 1,543 1,393 1,535 1,436 1,414 Net assets 19,126

18,977 18,845 15,556 15,829 13,689 9,507

Deferred capital grants

4,934

4,777

4,833

4,641

4,781

5,104

2,736

Net assets less deferred capital grants

14,192

14,200

14,012

10,915

11,048

8,585

6,771

Total Income Surplus

24,802 1,683

24,549 1,609

23,912 1,320

23,964 2,274

25,265 1,683

24,350 2,957

21,782 523

Surplus as a % of total income

6.79%

6.55%

5.52%

9.49%

6.66%

12.1%

2.40%

All investments have been stated at market value with the necessary adjustment to the revaluation reserve being made.

Derriford Road Plymouth Devon PL6 8BH

+44 (0)1752 636700www.marjon.ac.uk

annual statements 2015

Documents