contents · contents . statement from the chair of the board of governors ..... 2

Contents

Statement from the Chair of the Board of Governors ........................................................................................... 2

Strategic Report .................................................................................................................................................. 5

1 Object, Strategy and Risk Analysis .................................................................................................................. 5

1.1 Object, Vision and Values .......................................................................................................................... 5

1.2 Outreach and Widening Participation ...................................................................................................... 5

1.3 Community Engagement .......................................................................................................................... 5

1.4 Strategic Plan ........................................................................................................................................... 6

1.5 Looking Forward ....................................................................................................................................... 7

1.6 Key Performance Targets ......................................................................................................................... 7

1.7 Risk Analysis ............................................................................................................................................. 8

2 Academic Review ............................................................................................................................................ 8

2.1 Overview and Highlights ........................................................................................................................... 8

2.2 Learning and Teaching ............................................................................................................................ 10

2.3 “Bridges to Industry” and Masterclasses ................................................................................................ 11

3 Corporate Responsibility................................................................................................................................. 12

3.1 Staff ........................................................................................................................................................ 12

3.2 Environmental Sustainability ................................................................................................................... 12

3.3 Equality and Diversity ............................................................................................................................. 12

4 Financial ........................................................................................................................................................ 12

4.1 Financial Strategy for Sustainability ......................................................................................................... 12

4.2 Financial Review of the Year Ended 31 July 2015 ................................................................................... 12

4.3 Investments ............................................................................................................................................ 13

4.4 Payment of Creditors .............................................................................................................................. 13

4.5 Accounting Systems and Processes ...................................................................................................... 13

4.6 Post Balance Sheet Events .................................................................................................................... 13

Statement of Public Benefit .............................................................................................................................. 14

Fundraising ....................................................................................................................................................... 14

Corporate Governance ..................................................................................................................................... 15

Legal Status ................................................................................................................................................. 15

Statement of Corporate Governance ............................................................................................................ 15

Statement of Responsibilities of the Members of the Board of Governors ..................................................... 15

Disclosure of Information to Auditors ............................................................................................................ 16

Statement of the School’s Structure of Corporate Governance .................................................................... 16

Internal Control ............................................................................................................................................. 17

Independent Auditors' Report to the Members of the Board of Governors of the NFTS ................................. 18

Financial Statements ........................................................................................................................................ 20

Notes to the Financial Statements for the year ended 31 July 2015 ................................................................. 25

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Statement from the Chair of the Board of Governors

The National Film and Television School (NFTS) sits at the very heart of the film, television and games industries. We produce generation after generation of the most talented directors, producers, writers, composers, games-makers, and technicians; young men and women who help to contribute to the growth and success of the UK’s audio-visual industries. The present generation continue to impress. For the first time in the School’s history, two films (Boogaloo and Graham, directed by 2012 Directing Fiction graduate Michael Lennox and The Bigger Picture, a 2014 student graduation film directed by Daisy Jacobs), were nominated for both EE BAFTA and Oscar academy awards, in the best short live action and best short animated film categories respectively, with both films winning an EE BAFTA. Three times in the last five years the School has had a film nominated for an Oscar. NFTS student films have been nominated in Cannes, won in Annecy and won nearly all of the Royal Television Society awards for which they were eligible. This year, the School also won two out of three of The Global Student Film Awards in which all the major film schools of the world participate, and came second in the third category. All in all, the School’s films won more than 150 awards in 2014/15. The continuing success of NFTS graduates is equally striking. They work in key roles in many of the British and Hollywood films and television shows that the public most enjoys. In the recent London Film Festival there were over 100 production credits for NFTS graduates, including directing and shooting credits for the opening film, Suffragette, and one for shooting the closing film, Danny Boyle’s Steve Jobs. NFTS students and graduates set the standard for excellence and are a major factor in the record level of inward investment coming into the UK, especially from the USA. The major step forward this year was the School’s successful application to the HEFCE Catalyst Fund resulting in the provision of £5.65 million towards the new NFTS Creative Industries Skills Academy (CISA). CISA is not a single building but a programme of activity to be delivered via a suite of new facilities located at the heart of the School’s ‘Digital Village’. It will provide a range of facilities including a state-of-the-art dubbing theatre, cinema, sound editing and design suites, plus new animation, visual effects and games studios. At the time of writing, planning had been granted and the School had raised the majority of the funding required to construct the two buildings that form the centre-piece of the development. Construction was set to begin in October 2015 and finish in December 2016. The CISA project will enable the School to play a major and distinctive role in the digital media industries and the wider creative economy. With an emphasis on knowledge exchange across the creative industries, will match the work the School already undertakes in film and television. The School will extend its footprint into additional areas by developing new courses. CISA will facilitate a growth in physical capacity, student numbers and funding. This in turn will enable the NFTS to expand student capacity and thereby achieve the critical mass in quality world-class course provision required to underpin its future success. CISA will also deliver a step change in advancing the government’s (and HEFCE’s) priorities in relation to postgraduate education, technical skills and employer engagement in the creative industries. We look forward to another award-winning year ahead. Good luck to all our graduating students.

Patrick McKenna Chair of the Board of Governors

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Members of the Board of Governors Patrick McKenna – Chair Stephen Louis – Deputy Chair Peter Barron Tom Betts Steven Boneham – Staff Governor (appointed 25 November 2014) Professor Alan Cummings Neil Forster Phil Harrison

Oliver Hyatt MBE (appointed 21 July 2015) Duncan Kenworthy OBE (resigned 4 December 2014) Ian Lewis (appointed 16 September 2014) Steve Mertz Susan Moffat Tracey Price (appointed 16 September 2014) Bal Samra (appointed 24 March 2015) Ian Shepherd (appointed 21 July 2015) David Sproxton CBE (resigned 23 June 2015) Donna Taberer (resigned 9 November 2014) Sophie Turner-Laing Piers Wenger

Company Secretary Victoria Topham (appointed 5 January 2015)

Clerk to the Board Chris Wensley (appointed 1 May 2015)

Audit Committee Steve Mertz – Chair Christine Corner Neil Forster Tracey Price

Finance and General Purposes Stephen Louis – Chair Committee Tom Betts Robert Kingston Patrick McKenna Leon Morgan Ken Roberts

Governance, Appointments & Stephen Louis Remuneration Committee Patrick McKenna Sophie Turner-Laing

Phase 2 Redevelopment Stephen Louis Committee Patrick McKenna

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Company Registration Number 981908

Registered Office Station Road Beaconsfield Buckinghamshire HP9 1LG

Auditors BDO LLP 2 City Place Beehive Ring Road Gatwick West Sussex RH6 0PA

Bankers Lloyds TSB Bank PLC London & South East Third Floor 4/6 Copthall Avenue London EC2R 7DA

Solicitors Mills & Reeve Solicitors Francis House 112 Hills Road Cambridge CB2 1PH

Strategic Report for the year ended 31 July 2015

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Strategic Report This report reviews the National Film and Television School's (the ‘School’) activities for the year ended July 31 2015 in the context of the opportunities, challenges and risks within which it operates.

1 Objects, Strategy and Risk Analysis

1.1 Objects, Vision and Values The main objective of the year was to maintain and develop the world class education and training of all the students and to secure and enhance funding in order to achieve this objective. Charitable objects The charitable objects of the School are to:

• promote and provide for the advancement of education of the public and in this connection to carry on a School in Great Britain for the education and training of persons concerned in the making of films, television and new media;

• provide instruction in the art and science of making cinematograph and other films; • provide instruction in the art and science of making programmes for television; and, • provide instruction in the art and science of new media.

The School’s mission statement is: “to educate the best creative talent to the highest professional standard for tomorrow's screen media industries” The School, a Skillset Screen Academy, is the UK's national centre of excellence for education in film and television programme-making. The students learn their craft in purpose-built studios that include two film stages, a separate large TV studio and post-production facilities rivalling those of many professional companies. The School also provides a “Bridges to Industry” programme whereby students are provided with an opportunity to work on development projects with a number of broadcasters and independent production companies. In addition, the School arranges screenings and masterclasses from within the UK creative industries and distributes many student films to festivals and major competitions across the globe.

1.2 Outreach and Widening Participation The School is committed to reaching out to students from a wide range of different cultural, socio-economic and geographic backgrounds, with the aim of promoting greater creativity and authenticity, widening the talent pool, giving fair access to the industry, and searching for unheard voices and untold stories. During the year the School did this in three principal ways:

i) Scholarship and bursary support: the School raised and distributed £770k in financial aid to students during the year. Over 85% of UK students received support;

ii) Open Days: the School continued to run its course specific open days but has supplemented this through general open days on a Saturday, a regional open day in Bristol and through the delivery of bespoke individual school, college and University group visits; and,

iii) BFI Film Academy: the School visited more than 40 regional film and arts centres, speaking to more than 900 young people across the UK about its Easter residential programme and opportunities to study at the School.

1.3 Community Engagement The School takes its position within the local community seriously and is always keen to create linkages with outside organisations and support worthy causes when it can. The Oswald Morris Building has provided a facility that the wider Beaconsfield community can make use of, whether for the screenings for the Beaconsfield Film Society or the many charitable groups in the area. The School is a strong supporter of community groups and charities in the local area and provides free use of its facilities to charitable groups and interests for fundraising activities.


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In addition to fundraising events, the School also has strong connections with a number of local primary schools and assists both students and teachers with projects, work experience placements and training for film appreciation. The School also hosts tours to increase public awareness and provides information on career opportunities in the film and television arenas.

1.4 Strategic Plan The School has reviewed and updated its five year strategic plan which includes caveats which depend on external circumstances and the impact of continuing Government cuts across the UK. Currently the School’s management and governors are actively working to provide the School with greater clarity in its regular funding. This includes a pro-active effort to restore funding cuts and maintain current funding levels. The School’s active campaign to secure the injection of much needed capital investment has been largely successful with the majority of the funds required for the CISA capital development in place which is essential to the success of the School. This will allow the School to meet the following strategic objectives: 5 Year Plan Objectives Objective 1: Continuance of the School as a world class centre of excellence for film, television and new media education. a) Current programmes

• Select students with the greatest potential; • Recruit the best teachers who are industry experts; • Ensure curriculum and assessment systems continue to deliver opportunities for self-development and

deep learning; • Ensure students work with high quality facilities which equip them to work in the industry; and, • Continue to produce excellent graduates who win awards, work at the top level of their crafts as well

as opening doors to new graduates.

b) Programme development

• Expand the range of courses offered in the audio-visual field; • Work to improve the delivery of the education and training and the student learning experience; • Develop an applied research facility achievable through CISA enabling increased industry

partnerships and advanced learning; • Expand CPD training via Short Courses to meet rapidly changing training needs in relation to digital

innovations; and, • Maintain and cement the School’s status as one of the leading film, television and new media schools

in the world, thereby maintaining the competitive skills base of the UK for film, television and new media production.

Objective 2: Provision of facilities which allow the continuation, growth and development of the School in line with its founding remit.

• Start the CISA rebuilding programme in order to create the capacity and facilities to meet the skills needs of the creative industries and Digital Britain;

• Renovate the old studio buildings at Beaconsfield to provide energy efficient, safe and pleasant accommodation accessible to all; and,

• Improve partnerships with industry and equipment manufacturers. Objective 3: Improved sustainable net revenues and efficiencies

• Create a more sustainable funding model for the School. The new facilities will enable the School to diversify its funding streams and generate additional revenues. It will allow the School to attract R&D funding, enter more industry partnerships, maintain and expand its current sponsorship arrangements and increase income from new courses;

• Examine all possible opportunities for raising income through additional fee income, research, joint venture revenue and commercial use of its facilities;

• Examine all possible efficiencies in the running of the School. Improvements to the existing old buildings should considerably reduce energy costs and the new building will utilise more environmental, low energy facilities; and,

• Through an enhanced fundraising strategy, increase the level of scholarships and bursaries to support talented students and enable them to attend the School regardless of their financial circumstances.

These objectives are currently being reviewed and refocused as part of the development of a new five-year Corporate Plan, which will be completed by the end of 2015 and will run to 2020.


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1.5 Looking Forward The future plans for the School fall into three areas:

• To sustain what we do already do: 2014/15 has been extraordinary in terms of student and graduate achievements, when measured by awards and the work undertaken - particularly by recent graduates. The School’s first priority must be to sustain that level of achievement which will be no mean feat. It will require maintaining the School’s world-class education, training and global competitiveness as (according to The Observer newspaper and The Hollywood Reporter) the “No.1 film school in the world”. It will also mean maintaining the School’s accessibility to all UK talent whatever its background by continuing to enhance the School’s bursary and scholarship support. In addition, it must maintain and develop current key partner and funders’ support and explore new and more diverse funding streams;

• To expand the School’s education choices by launching new courses: In 2014/15, the School launched new and rebranded courses in partnership with industry. The School plans to add to these in a conservative manner each year until the completion of CISA. These courses will be mostly delivered off-campus with industry partners and they will address some of the high level skill demands of the creative industries. The School will continue to make Short Courses the premier provider of quality relevant CPD to the media industries while continuing to focus on delivering a health & safety regime at the School that is second to none; and,

• To deliver the CISA project on budget and schedule: The School has already raised £14 million and obtained planning permission for two new buildings. Work commenced in October 2015 for completion December 2016. This long overdue redevelopment of the School site will expand the School’s capacity to provide additional courses and higher student numbers. The project will help the School provide maximum value to all stakeholders: Government, industry, partners, funders, donors, students and all of its patrons.

The current outlook for the School is better than it has been for many years:

• The demand for places at the School remains at a high; • The reputation of the School resulting from the success of the work of its students and graduates is also

at an all-time high; • The School completed the HEFCE compliance requirements by 1 November 2014; • The School has successfully expanded the number of courses and students despite continuing cuts;

and, • The School continues to accept many British students from disadvantaged backgrounds and continues

to widen access to its provision.

1.6 Key Performance Targets The School operates an organisational performance monitoring and reporting framework which includes a set of institutional Key Performance Indicators (KPI’s) that are regularly reported to the Board of Governors. The KPI’s were originally developed and introduced in early 2014 in line with sector best practice as defined by the Committee of University Chairs guidance. Management and the Board of Governors are currently in the process of reviewing and updating the KPI’s, as part of the new corporate plan, to align with the agreed objectives and developmental priorities for the next five years. These KPI’s will be mapped to the objectives of the corporate plan covering financial sustainability, student recruitment, student achievement, the condition and suitability of the School’s estate and infrastructure, and reputation and impact. The KPI framework incorporates the monitoring and reporting requirements of HEFCE’s annual sustainability assessment return.

2012/13 (Actual)

2014/15 (Actual)

2016/17

(Destination)

1. FINANCE

1.1 Surplus as a percentage of income -6% -1% 0%

1.2 Cost of delivery per student £34,899 £34,440 £29,293

1.3 Income from public sources as percentage of total income

34% 31% 26%


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2012/13 (Actual)

2014/15 (Actual)

2016/17

(Destination)

1.4 Income from philanthropic sources (NFTS Gala, Foundations, Trusts, etc.)

5% 5% 4%*

1.5 Income from industry sources 21% 17% 15%*

1.6 Student fee income as percentage of total income

27% 29% 40%*

2. STUDENTS & LEARNING

2.1 Student satisfaction, as measured by students rating their experience as excellent or very good

77% 77% 85%

2.2 BAME students as percentage of student body

14% 17% 20%

* Income from industry and philanthropic Trusts and Foundations remains an integral and essential part of the School’s funding to deliver its charitable objectives. The School will look to at the very least maintain current levels of industry and philanthropic income, but these income sources will fall as a percentage of total income with the growth in student numbers and fee income in line with the School’s five year strategic plan.

1.7 Risk Analysis The School recently put in place a risk management policy that forms part of the School’s enhanced internal control and corporate governance arrangements. The policy explains the School’s underlying approach to risk management and documents the roles and responsibilities of the management team and other key parties. It also outlines key aspects of the risk management process and identifies the main reporting procedures. The following key principles inform the School’s approach to risk management and internal control.

• The Board of Governors has responsibility for overseeing risk management within the institution as a whole and the Audit Committee will advise the Board of Governors as appropriate;

• The School will adopt an open and receptive approach to solving problems of risk; • The School makes conservative and prudent recognition and disclosure of the financial and non-

financial risks; • Heads of Department are responsible for encouraging good risk management practice within their area;

and, • Key risk indicators will be identified and closely monitored on a regular basis.

In general, the School would wish to adopt a circumspect approach to risk-taking, as this would be the approach expected from a publicly-funded Higher Education Institution (HEI). However, in some areas of activity, such as the level of risk-taking students are encouraged to take in their films, television shows and games, we may adopt a more open attitude to risk than might be usual. The School is a relatively small institution, and therefore it is possible for major risks to be encapsulated in one risk register document, covering both high-level risks and School/department risks. In addition to the Audit Committee’s quarterly review of the risk register, the Board of Governors and the Finance and General Purposes Committee regularly review the key operational risks, including financial controls, cash flow, major funding agreements and health and safety practices.

2 Academic Review 2.1 Overview and Highlights 2014/15 was a very successful period for the School with the School’s films winning more than 150 awards. In February the School secured its third Oscar nomination for a student film in 5 years. The School then went on to win both short film BAFTAs one for the graduation animation The Bigger Picture and the other for recent


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graduate Michael Lennox’s short film Boogaloo and Graham. Slap, a 1st year film directed by 2015 graduating student Nick Rowland, with producer Michaelangelo Fano and writer Islay Bell-Webb, also competed against Boogaloo and Graham for the EE BAFTA in the short live category. The School is proud to see so many graduates have credits on other films nominated for awards. Recent graduate director Yann Demange was nominated for an EE BAFTA Outstanding Debut by a British Writer, Director, or Producer for his first feature film ’71, for which he has already won best director at the British Independent Film Awards (BIFAs). These successes confirm that the School is the most successful Oscar and BAFTA nominated School in the world as, in the period 2010-2015, only six films produced by film school students as part of their curriculum received Oscar nominations. Of these, half were produced at the NFTS.

The impressive roll call of award and credits continues with graduate Una Gunjak’s film The Chicken winning European Short Film at the 2014 European Film Awards (Europe’s Oscars). The School’s animation films scooped over 60 awards in 12 months and TV entertainment students won two Royal Television Society postgraduate awards and two New York TV festival awards. In addition, the School’s graduate films won four Edinburgh Film Festival awards, the Sky Atlantic Best Student Film (for the third time in a row) and the CTVC Best Newcomer award at the 2014 Grierson Awards (for a documentary based on a NFTS graduation film), and a recent graduate won the 2014 BAFTA Scotland Best Short Film award. Five graduates were celebrated when they were named Broadcast Hotshots in Broadcast Magazine, the leading publication for the television industry. Also, three graduates were named Stars of Tomorrow and profiled in Screen International, the UK’s leading film industry publication, and one of our recent graduates was named a BAFTA Breakthrough Brit. Writing talent was also recognised in Hollywood with a 2014 screenwriting graduate awarded the Academy Nicholl Fellowship by The Academy (AMPAS) and recent graduate Regina Moriarty’s Murdered by my Boyfriend was a hit for the BBC and also shot by recent graduate Carlos Catalan. In all, recent graduates were directing and shooting everything from The Village to Sherlock to Dr Who to The Misfits and many more major TV shows. During 2014/15, the School launched a number of new courses in topics including Film Studies Programming and Curation, and Sports Production, thus expanding its course footprint into wider areas of the creative industries. The School also graduated its first cohorts from the Games Development MA, Creative Business for Entrepreneurs and Executives diploma and the Factual Development and Production diploma delivered in partnership with Discovery Networks International. The fruition of the Games course was particularly important taking the school into new areas of storytelling and screen language. It achieved immediate success with one of its graduation games winning the audience award at


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the prestigious Develop Convention in Brighton while the course itself was a finalist in their Games Innovation awards. Our educational strategy and philosophy remains consistent as detailed in the NFTS Learning and Teaching Strategy. New actions have been developed and agreed at management and the School’s Academic Standards Committee. In addition, a new Enhancement Strategy has been developed as part of the new institutional Quality Assurance and Enhancement Handbook.

2.2 Learning and Teaching

Activity: Two year MA Courses – 2014/2015 The School runs more behind-the-camera courses than any other film school in the world. Currently there are thirteen two-year Masters programmes and eight diploma courses. In June 2015, the School was reviewed by the Quality Assurance Agency (QAA) as part of its Higher Education Review process. The QAA judged that:

The maintenance of the academic standards of the awards offered on behalf of degree-awarding bodies meets UK expectations;

The quality of student learning opportunities is commended; The quality of the provider’s information about learning opportunities meets UK expectations; and, The enhancement of student learning opportunities meets UK expectations.

These judgements confirm the School’s excellent academic standing and School’s robust processes for academic development and assurance. All the MA courses are subject to the Royal College of Arts (RCA) Annual Review and Course Evaluation by the Academic Standards Committee. In addition, every course has an Industry Advisory Panel that meets once a year to look at the course and discuss how it should be developed in the light of industry developments. Activity: Two Year MA Courses – 2014/2015

• Directing Animation • Directing Documentary • Directing Fiction • Cinematography • Composing for Film & Television • Editing • Producing • Producing & Directing TV Entertainment • Production Design • Screenwriting • Sound Design • Digital Effects • Games Design and Development

Activity: One Year to 18-Month Diploma Courses – 2014/2015

• Production Sound Recording for Film & Television (in partnership with the BBC) • Production Management - Film & TV • Script Development (part-time) • Creative Business for Entrepreneurs and Executives (in partnership with Ingenious Media) • Broadcast Production (in partnership with Sky) • Writing and Producing Comedy (part time) – (in partnership with Channel 4) • Factual Development and Production (part time) – (in partnership with Discovery Networks International) • Producing Digital Content and Formats (part time) – new January 2015 (in partnership with Sky)

Short Courses and Diplomas During 2014/15 Short Courses ran 54 courses, training over 455 people. Short Courses have also run bespoke courses for Aardman Animations and Mac TV, as well as specialist editing training for a deaf participant, and will shortly be running a course for ITV. As well as training freelancers, course participants have come from BskyB, the Express Newspaper, University of the Arts London, Microsoft, Cambridge University Press, Universal Pictures, Lime Pictures, Tiger Aspect, Carnival Films, Media Molecule, Warp Films and the BBC.


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There are also three cohorts of part-time diploma students working towards awards in Writing and Producing Comedy, Script Development and Factual Development and Production. Short Courses have also recently selected the participants for the Creative Skillset commissioned 'BAME Leadership Programme - Film' which will run during 2015/16. Curriculum, recruitment and access Our focus on digital marketing and improved external communications paid dividends with the number of applications to the School increasing by 6% on the previous year. The School increased its student numbers by 10% - taking the total number of FTE students to more than 330 – in 2014/15. The School is committed to improving the profile of its intake in order to properly reflect the diversity of the United Kingdom and so contribute to a more diverse workforce in the film and television industry. During this period, the School continued to make diversity a part of its core aims and to continue to increase awareness of the need for a diverse intake amongst its staff and tutors. For example, NFTS tutors spoke at more than 35 regional cultural / film making venues (The Watershed, Tyne Side Cinema, Corner House (now Home), FACT etc.) across the UK. The School continues to reach out through a range of networks to attract a diverse set of applicants and final intake in terms of gender, ethnicity and disability. 58% of the School’s intake in January 2015 was male and 42% female. The percentage of BAME entrants increased from 19.44% in 2014 to 22.9% in 2015. Student feedback remains very positive. The annual student survey demonstrates that the majority of students are very satisfied with their experience at the School. It is our belief that the more effective and high quality we make our teaching and learning experiences, then the better our student’s films are and the more successful our graduates become. 2014/15 saw the completion of the fourteenth group of MA Film and Television graduates from the School validated through the RCA. In the Overall Assessment, 26 students were awarded an excellent pass (16 in 2013), 48 a very good pass (51 in 2013) and 27 a good pass (28 in 2013). There were also 4 passes (5 in 2013). On the Dissertation/Research project, there were 12 distinctions (11 in 2013), 22 commendations (23 in 2013), 45 good passes (32 in 2013) and 24 passes (32 in 2013) with 2 referrals. Four students achieved an excellent pass in their Overall Assessment and a distinction in their Dissertation.

2.3 “Bridges to Industry” and Masterclasses The School’s students and recent graduates had the opportunity to attend 29 NFTS Masterclasses including with Oscar nominated director David Fincher (Fight Club, Gone Girl), multi Oscar winning editor and sound designer Walter Murch (Apocalypse Now, The Godfather II) and BAFTA winning screenwriter Russell T Davies (Doctor Who, Queer as Folk). There was also 79 external events secured with outside bodies such as BAFTA and AMPAS, including Q&A with Oscar nominated producer James Schamus (Brokeback Mountain), and with Oscar nominated writer-director PT Anderson (There Will be Blood, Inherent Vice). The other Masterclass guests that students had the benefit of hearing from included – Disney producer & DreamWorks co-founder Jeffrey Katzenberg (Shrek), Pirates of the Caribbean director Rob Marshall, Duke of Burgundy and Berberian Sound Studio writer-director Peter Strickland, Aardman co-founder Peter Lord (Chicken Run, Morph), cinematographer Sean Bobbitt (Twelve Years A Slave), writer Steven Moffatt and producer Sue Vertue (Sherlock) and director Gareth Edwards (Monsters, Godzilla). A number of the NFTS Masterclasses received coverage in industry publication Screen International, including events with director Thomas Vinterberg and his NFTS graduate cinematographer Charlotte Bruus Christensen (Far From the Madding Crowd), Jon Schnepp and Holly Payne’s documentary about Tim Burton’s unmade Superman film, and a Tomorrowland screening and Q&A with executive producer and co-story creator Jeff Jensen. Students and graduates were offered a number of “Bridges to Industry” opportunities. These included an opportunity to make an activist documentary film, supported by the Bertha Foundation, a short film for Armani, a short film based for River Pictures, a trailer for the London Short Film Festival, and a short film for BBC Films.


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3 Corporate Responsibility 3.1 Staff The School depends on the contribution and quality of its workforce. The School engages with staff in a number of ways, including the Director's attendance at departmental meetings and, for the first time, the staff have elected one of their number to be their staff governor on the Board of Governors. Teaching Staff Teaching staff at the School are regularly supported to attend festivals, conferences and events. Each department is required to report on their staff development activity as part of the Annual Course Evaluation process. Staff Policies We have comprehensive staff policies which cover everything from adoption leave, equal opportunities, and grievance procedures and whistle blowing.

3.2 Environmental Sustainability The School acknowledges the need to reduce carbon emissions to help mitigate climate change and to be a more environmentally sustainable Institution. The School is working with the Carbon Trust to strategically review all carbon emissions and is planning carbon reduction in line with Government targets. The Carbon Trust scoping report delivered in October 2014 included establishing baseline data and suggested areas for improvement. These areas are now being evaluated and acted upon as the School develops an Environment and Sustainability Policy.

3.3 Equality and Diversity The School is an equal opportunity employer and has agreed statements of policy under Section 2(3) of the Health & Safety at Work Act 1974. Regular consultation takes place with staff, students and BECTU representatives. The School follows a policy issued by the Cabinet Office on the employment of disabled people and the curriculum includes the study of equal opportunity concern, so that students and graduates have a basis for understanding the issues in their subsequent work. The School’s equality and diversity policy is available from the School’s website.

4 Financial

4.1 Financial Strategy for Sustainability The School is in the second year of its new financial strategy as part of its designation as an HEI. The primary purpose of the strategy is to ensure that the School remains financially viable and that long-term success and sustainability are achieved in line with our goals. Annually, the management team agree a list of key goals and tasks to support the delivery of the School’s wider five year plan and associated objectives.

4.2 Financial Review of the Year Ended 31 July 2015 This year has been the first full 12 months of operation under the higher education funding regime following the move to a 31 July year end. Total incoming resources or gross income for the School for the year ended 31 July 2015 were £10,146k – see income and expenditure account (page 20). This is in line with expectations and includes a full year of HEFCE funding and additional income from new courses launched during the year. The income includes monies raised from the annual Gala event held in June 2015 which generated £235k for the School, net of costs.


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The School maintains its significant student financial support programme through bursaries and scholarships. The combined scholarship and bursary support for the year was £770k and covered 20% of the total fee income for the year. The School’s bursaries are mainly funded by industry parties, while scholarship funds are generated from over 50 individual scholarship donors. The scholarship and bursary funds are critical to enabling the most talented students to attend the School, regardless of their background. The School would like to thank all its core funders for maintaining their support for the School and its students. Total expenditure for the year ended 31st July 2015 was £10,695k – see income and expenditure account (page 20). All departments operated within agreed budgets and target cost savings were achieved during the year. The School continually explores opportunities to generate best value from its resources and drive economies and scalability from its cost base. With the growth of new courses and careful cost management, the School reported a net deficit of £64k for the year to 31 July 2015 compared to a net deficit of £207k for the previous 7 months to 31 July 2014. The cash flow statement on page 24 shows that the School generated net cash inflows of £337k from operating activities in the year to 31 July 2015 compared to net cash outflows of £501k for the 7 months to 31 July 2014. This is in line with the increased funding and control of the School’s operating cost base highlighted above. Total cash movement after investment, financing and capital activities shows a net cash inflow of £1,823k for the year to 31 July 2015 compared with net cash out flow of £471k for the 7 months to 31 July 2014. In addition to the net cash inflow from operating activities above, this includes £1,309k of cash funds previously held as term deposits and advance funding for the CISA build. The School’s reported net movement in reserves for the year to 31 July 2015 was a decrease of £1,073k, due primarily to an increase in the FRS17 pension deficit valuation. A payment plan has been agreed with the Trustees of the School’s defined benefits pension scheme to increase future contributions. The balance sheet on page 22 shows the School’s net assets as £11,043k at 31 July 2015 compared to £11,275k at 31 July 2014. This is due primarily to the increase in the FRS17 pension deficit valuation, mitigated by increased deferred capital grants to fund the CISA build. The School’s results meet the financial covenants on the Allied Irish Bank (GB) loan.

4.3 Investments The School predominantly uses a cash management service to manage its treasury cash. All surplus funds are invested for a maximum period of time to improve return. The NFTS Foundation board manages the School’s long term investments.

4.4 Payment of Creditors The policy of the School is to pay its creditors in accordance with agreed terms. In the absence of any agreement to the contrary, it is the intention of the School to pay supplier invoices within 30 days following the end of the month in which the invoice is received. 4.5 Accounting Systems and Processes A review of the School’s financial processes and controls was undertaken by the Kingston City Group (KCG), appointed as the School’s Internal Auditors in 2014. Their review of the financial processes and controls in May 2015 highlighted a number of deficiencies at the time of their audit. Immediate action was taken prior to the financial year end to ensure that key controls were addressed. A follow-up audit was undertaken by KCG in September 2015, which verified the corrective actions taken.

4.6 Post Balance Sheet Events Post balance sheet events may have a significant effect on the values shown in the accounts, and occur after the balance sheet date but prior to the date on which the accounts are approved by the Board of Governors. The School has no post balance sheet events to report.

Statement of Public Benefit

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Statement of Public Benefit The School believes it meets the public benefits requirement as a charity. The governors are aware of their responsibilities with regards to the public benefits requirement and are conversant with the Charity Commission guidance.

Public benefit is demonstrated in the public access to the School’s world class facilities. The School provides a significant amount of student support to talented students regardless of background in terms of bursaries and scholarships. The School’s activity is the provision of education, with emphasis on ability and talent, meeting its primary charitable objective.

The School also offers many opportunities for the public to use its facilities. The School regularly allows local charities to use the cinema and other facilities for fundraising events without charge.

Charities that have used the Schools facilities during 2014/15 included Scannappeal, The Mayor of Beaconsfield Charity Appeal, Christian Aid, MacMillan Cancer Support, The Beaconsfield Society, Iain Rennie Hospice at Home, School Aid, Beaconsfield Friends of Cancer Research UK, and St Mary’s Church.

Fundraising Fundraising activity during the 2014/15 financial year concentrated upon the annual Gala, new scholarships, and the acquisition of a new core funding partner.

There was a five month interregnum at the beginning of the financial year between the departure of Dominique Cadiou and the arrival of Julian Smyth as Development Director. This had a consequent impact upon fundraising activity but the primary operations were not seriously compromised.

The 2015 Gala was themed as “Great British Characters” and attracted a record attendance. Sponsored by Ingenious Media, with secondary support from King Digital, the event raised £235k net of costs which represented a 7% increase over the 2014 event.

A major new supporter was recruited during the year with Odeon Cinemas Ltd becoming the School’s first Platinum Cinema Sponsor, providing financial core support as well as two scholarships from 2016.

Other new scholarships secured during the year include two scholarships a year for six years from The Cinema and Television Benevolent Fund (CTBF) in memory of the School’s former president, Lord Attenborough, and a further legacy from the Attenborough family.

Other notable successes included Google/YouTube renewing their sponsorship of the graduation screenings for a further three years, an agreement with the retail chain Jigsaw to produce a series of viral videos and a major legacy pledge from one of the School’s very first cohort of students.

Creative Skillset

In recent years substantial support has been obtained from the BFI via the Skills Investment Fund administered by Creative Skillset for new courses and activities. Creative Skillset have continued to help fund the School’s operations during 2014/15 through the Course Enhancement and Outreach and Diversity contracts. These agreements commit Creative Skillset’s support for the School up to April 2016 and for a further two years in principle.

Corporate Governance

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Corporate Governance Legal Status The School is a charity limited by guarantee (company number 981908) and registered as a charity (charity number: 313429). It has existed since 1971 and was granted status as a higher education institution in November 2013, under section 129 of the Education Reform Act 1988.

Statement of Corporate Governance The governors confirm that the financial statements comply with current statutory requirements and with the requirements of the charity's governing document. The systems of internal control are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. The governors examine the major risks that the charity faces each financial year, and have developed systems to monitor and control these risks to mitigate any impact that they may have on the School in the future. The major risks that the School is exposed to are financial risks (funding) and operational risks (health and safety). Systems are in place to continually review and manage these risks. The School has regular meetings with all major funders and constantly reviews and upgrades its health and safety controls and procedures. The Board of Governors meets at least four times a year and reviews a report from the Director; students and staff representatives attend by invitation. The Finance and General Purposes Committee, also meets four times a year and reviews the annual plan, the five-year corporate plan and updated financial estimates and monitors health and safety practice and policies at the school. An Audit Committee has been established as a result of the School's designation as a HEI by BIS with quarterly meetings at which it reviews external audit management letters, internal auditor reports, value for money arrangements and other matters set out in their terms of reference. The NFTS has updated the terms of reference for all the sub committees of the Board of Governors to upgrade the School’s governance to the levels required by the School’s new status as a HEI. The School has posted all its policies on matters of public, student and staff interest on the School website. Please see: https://nfts.co.uk/school/governance Day to day operational decisions are taken by the Director supported by a management team, within the delegated authority conferred by the Board of Governors.

Statement of Responsibilities of the Members of the Board of Governors

The Board of Governors is the School’s governing body, established in accordance with the Articles of Association. Members of the Board of Governors are the charity’s directors and trustees. The majority of its members are drawn from outside the School and are referred to as independent members, although elected staff are co-opted members of the Board of Governors. Governors are appointed for an initial term of 3 years, which can be renewed at the end of their term. Governors are formally appointed by majority vote at the quarterly board meetings. Every new governor is given an induction pack on the School which includes information on the structure, governance and management of the School and the responsibilities of the governors and the School’s management team. Governors are also provided with relevant Charity Commission updates on the responsibilities of trustees. The Board of Governors has a number of standing committees to oversee particular areas of business. The Board of Governors is responsible for exercising the powers of the School as defined in the Articles of Association. The Board of Governors has adopted a statement of primary responsibilities that is consistent with the model in the Guide for Members of Higher Education Governing Bodies published by the Committee of University Chairs. Within the terms and conditions of the Memorandum of Assurance and Accountability agreed between HEFCE and the School, the m anagement team prepares financial statements for each financial year in accordance with the Statement of Recommended Practice: Accounting for Further and Higher Education. Under company law, the Board of Governors must not approve the financial statements unless it is satisfied that they give a true and fair view of the state of affairs of the School and of its surplus or deficit for that period. In preparing the financial statements the Board of Governors is required to:

• Select suitable accounting policies and apply them consistently; • Make judgements and estimates that are reasonable and prudent;

https://nfts.co.uk/school/governance


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• State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and,

• Prepare financial statements on a going-concern basis, unless it is inappropriate to assume that the School will continue in operation.

The Board of Governors also gives a report in the financial statements which includes the legal and administrative status of the School. The Board of Governors is responsible for the keeping of adequate accounting records which disclose, with reasonable accuracy and at any time, the financial position of the School, and which enable it to ensure that the financial statements are prepared in accordance with its Articles of Association, the Accounts Direction issued by HEFCE, the Statement of Recommended Practice: Accounting for Further and Higher Education and applicable UK law and financial reporting standards, as well as reflecting best practice in public sector corporate governance. The Board of Governors is responsible for taking steps that are reasonably open to it in order to safeguard the assets of the School and to prevent and detect fraud and other irregularities. Members of the Board of Governors are responsible for ensuring that funds from HEFCE are used only in accordance with the Financial Memorandum with the Funding Council and any other conditions that the Funding Council may prescribe from time to time. Members of the Board of Governors also ensure that appropriate financial and management controls are in place in order to safeguard public and other funds and to ensure they are used properly. In addition, Members of the Board of Governors are responsible for securing economical, efficient and effective management of the School's resources and expenditure, so that the benefits that should be derived from the application of public funds by the Funding Council are not put at risk.

Disclosure of Information to Auditors At the date of making this report, the Board of Governors confirms that:

• So far as each governor is aware, there is no relevant information needed by the School’s auditors in connection with preparing their report of which the School’s auditors are unaware; and,

• Each governor has taken all the steps that he/she ought to have taken as a member of the board of governors in order to make himself/herself aware of any relevant information needed by the School’s auditors in connection with preparing their report and to establish that the School’s auditors are aware of that information.

Statement of the School’s Structure of Corporate Governance The governors, who are also trustees of the charity and directors of the company for the purposes of the Companies Act, present their report together with the audited financial statements for the year ended 31st July 2015. The governors have adopted the provisions of the Statement of Recommended Practice on Accounting for Further and Higher Education (FE & HE SORP 2007) in preparing the report and financial statements. Governor Induction and Training Each member of the Board undertakes induction training, consisting of a briefing by the executive management team and heads of departments on their activities. They are furnished with a comprehensive range of information and literature, for future reference. Emphasis is placed on the legal status of a trustee and the position and responsibilities as a director of the charity. Relationships between the School and related parties The School places great significance on its external relations and in particular the relationship with the film, television and new media industries. Governors are mainly appointed from within these industries. Since the ending of the Eady levy in 1985, and the post-Eady settlement in 1990, industry and DCMS funding has been essential for the School's continued operation and development. The governors are hugely grateful for the significant amount of voluntary and discounted support from organisations and individuals in the film, television and new media industries, including all key partner sponsors and funders. The NFTS Foundation is a charity connected with the School. The NFTS Foundation seeks to promote the charitable purposes of the School by donations of student scholarships and grants from its investment funds. By mutual agreement all costs associated with fundraising activities of the NFTS Foundation are borne by the School.


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Subsidiary undertakings The School owns 100% of NFTS Enterprises Limited, which was dormant for the period and has not been consolidated on the basis that it is immaterial. Powers of investment and investment policy Under its Memorandum of Association, the School has the power to invest the monies of the School not immediately required for its purposes in or upon such investments, securities or property as may be thought fit. The School plans major curricular activities on a five year time horizon. It budgets to expend anticipated income while retaining a prudent level of reserves. The Board of Governor’s policy for investment is to retain funds designated for redevelopment as cash and near cash at the best rates available.

Internal Control The governors are responsible for preparing the strategic report, the report of the governors and the financial statements in accordance with Companies Act 2006 and for being satisfied that the financial statements give a true and fair view. The governors are also responsible for preparing the financial statements in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). Company law requires the governors to prepare financial statements for each financial year which give a true and fair view of the state of the affairs of the charity and of the incoming resources and application of resources of the charity for that year. In preparing these financial statements, the governors are required to:

• select suitable accounting policies and then apply them consistently; • make judgements and estimates that are reasonable and prudent; • state whether applicable accounting standards have been followed, subject to any departures disclosed

and explained in the financial statements; and, • prepare the financial statements on a going concern basis, unless it is inappropriate to presume that the

Charity will continue in operation. The governors are responsible for keeping adequate accounting records that show and explain the charity's transactions, disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Financial statements are published on the charity's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the charity's website is the responsibility of the governors. The governors' responsibility also extends to the ongoing integrity of the financial statements contained therein. Signed on behalf of the Board of Governors

Patrick McKenna

Chair of the Board of Governors

Nik Powell

Director

Independent Auditors’ Report to the Members of the Board of Governors of the NFTS

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Independent Auditors' Report to the Members of the Board of Governors of the NFTS We have audited the financial statements of National Film and Television School (The) for the year ended 31st July 2015 which comprise the Income and Expenditure Account, the Statement of Total Recognised Gains and Losses, the Statement of Historical Cost Surpluses and Deficits, the Balance Sheet, the 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 company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and section 124B of the Education Reform Act 1988. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective Responsibilities of the School’s Governing Body and Auditors

As explained more fully in the statement of responsibilities of the Board of Governors, the members of the Governing Body (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law, regulatory requirements and International Standards on Auditing (UK and Ireland) and the Audit Code of Practice issued by the Higher Education Funding Council for England. Those standards require us to comply with the Financial Reporting Council’s (FRC’s) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the FRC’s website at www.frc.org.uk/auditscopeukprivate. In addition, we also report to you whether income from funding bodies, grants and income for specific purposes and from other restricted funds administered by the School have been properly applied only for the purposes for which they were received and whether income has been applied in accordance with the Statutes and, where appropriate, with the Memorandum of Assurance and Accountability with the Higher Education Funding Council for England.

Opinion on the financial statements

In our opinion, the financial statements:

give a true and fair view of the state of the School’s affairs as at 31st July 2015 and of the School’s income and expenditure , recognised gains and losses, and statement of cash flow for the year;

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

have been prepared in accordance with the Education Reform Act 1988, the Companies Act 2006 and the Statement of Recommended Practice: Accounting for Further and Higher Education.

Opinion on other matters required by the Higher Education Funding Council for England Audit Code of Practice

In our opinion, in all material respects:

funds from whatever source administered by the School for specific purposes have been properly applied to those purposes and, if relevant, managed in accordance with relevant legislation;

funds provided by HEFCE have been applied in accordance with the Memorandum of Assurance and Accountability and any other terms and conditions attached to them; and

the requirements of the HEFCE’s Accounts Direction have been met.

http://www.frc.org.uk/auditscopeukprivate

Independent Auditors’ Report to the Members of the Board of Governors of the NFTS

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Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Report of the Governing Body and the Strategic Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

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

the School has not kept adequate accounting records ; or

the School’s financial statements are not in agreement with the accounting records and returns; or

certain disclosures of governors’ remuneration specified by law are not made; or

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

James Aston, Senior Statutory Auditor for and on behalf of BDO LLP, Statutory Auditor Gatwick United Kingdom Date:

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

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Financial Statements

Income and Expenditure Account

Note 2015 2014

12 months

31 July 7 months

31 July £ £ Incoming resources Funding body income/grants 3 4,120,474 2,425,987 Tuition fees and education contracts 4 3,898,511 2,148,142 Other income 5 2,121,760 1,517,434 Endowment and investment income 6 5,052 11,244 ________ ________ 10,145,797 6,102,807 ________ ________ Expenditure Staff costs 7 4,142,227 2,483,657 Other operating expenses 9 5,767,711 3,676,412 Depreciation 10 732,092 410,741 Interest and other finance costs 11 52,710 36,486 ________ ________ Total expenditure 10,694,740 6,607,296 ________ ________ Deficit on continuing operations after depreciation of tangible fixed assets at valuation and before tax (548,943) (504,489) Taxation - - ________ ________ Deficit on continuing operations after depreciation of tangible fixed assets at valuation and tax (548,943) (504,489) ________ ________ Surplus for the year/period transferred from accumulated income in endowment funds 26 484,842 297,966 ________ ________ Deficit for the year/period retained within general reserves (64,101) (206,523) ________ ________

The notes on pages 25 to 42 form part of these financial statements

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Statement of Total Recognised Gains and Losses

Note 2015 2014 12 months 7 months 31 July 31 July £ £ Deficit on continuing operations after depreciation of tangible fixed assets at valuation and tax (548,943) (504,489) Unrealised surplus on revaluation of fixed assets (land and buildings revaluation) - 2,713,750 Endowment additions (new endowments) 26 466,300 510,800 Actuarial loss in respect of pension schemes 30 (1,009,000) (124,000) ________ ________ Total recognised (losses)/gains relating to the year/period (1,091,643) 2,596,061 ________ ________

Reconciliation

2015 2014 at 31 July at 31 July £ £ Opening reserves and endowments 10,419,429 7,823,368 Total recognised (losses)/gains for the year/period (1,091,643) 2,596,061 ________ ________ Closing reserves and endowments 9,327,786 10,419,429 ________ ________

Statement of historical cost surpluses and deficits

2015 2014 at 31 July at 31 July £ £ Deficit on continuing operations after depreciation and taxation (548,943) (504,489) Difference between the historical cost depreciation charge and 229,287 136,084 the actual depreciation charge for the year/period calculated on the revalued amount ________ ________ Historical cost deficit for the year/period after taxation (319,656) (368,405) ________ ________ The notes on pages 25 to 42 form part of these financial statements

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Balance sheet

Company number 981908 Note 2015 2014 at 31 July at 31 July £ £ Fixed assets Tangible assets 14 15,655,727 15,265,317 Investments 15 - 1,304,277 Investment in subsidiary undertaking 16 2 2 _________ _________ 15,655,729 16,569,596 _________ _________ Endowment assets 17 235,540 254,082 Current assets Stocks 18 12,188 23,591 Debtors 19 1,680,516 1,474,621 Cash at bank and in hand 2,530,092 706,680 _________ _________ 4,222,796 2,204,892 Creditors: amounts falling due within one year 20 (3,908,849) (3,048,582) _________ _________ Net current assets/(liabilities) 313,947 (843,690) _________ _________ Creditors: amounts falling due after more than one year 21,22 (1,413,968) (1,400,940) Provisions for liabilities 23 (31,200) (415,000) _________ _________ Total net assets excluding pension scheme liability 14,760,048 14,164,048 Pension scheme liability 30 (3,717,000) (2,889,000) _________ _________ Total net assets including pension scheme liability 11,043,048 11,275,048 _________ _________ Deferred capital grants 25 1,715,262 855,619 Expendable endowment funds 26 235,540 254,082 Reserves Revaluation reserve 27 9,570,989 9,800,276 Pension reserve 30 (3,717,000) (2,889,000) General reserves 28 3,238,257 3,254,071 _________ _________ Total reserves 9,092,246 10,165,347 _________ _________ Total funds 11,043,048 11,275,048 _________ _________

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Balance sheet (continued)

The financial statements were approved by the Board, authorised for issue on and signed on its behalf by:

Patrick McKenna

Stephen Louis Nik Powell

Chairman

Governor Director


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Cash flow statement Note 2015 2014 12 months 7 months 31 July 31 July £ £ Net cash outflow from operating activities 31 337,010 (500,890) Returns on investments and servicing of finance Interest received 5,052 11,244 Interest paid (17,710) (9,486) Interest paid on finance leases (19,045) (10,141) Capital expenditure and financial investment Payments to acquire tangible fixed assets 14 (1,122,502) (593,422) Purchase of investments and other transactions 15 (5,052) (11,244) Cash realised from investments 15 1,309,329 - Deferred capital grants received 25 1,008,592 423,045 Endowments received 26 466,300 510,800 Endowments movement 26 18,542 (212,834) ________ ________ Cash inflow /(outflow) before financing 1,980,516 (392,928) Financing Bank loan drawdown 32 (157,104) (78,552) ________ ________ Increase/(decrease) in cash 32,33 1,823,412 (471,480) ________ ________


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Notes to the Financial Statements for the year ended 31 July 2015 1 Status of the School

The School is a company limited by guarantee and is a registered charity. Each member's liability is limited, upon winding up, to an amount not exceeding one pound.

2 Principal accounting policies

Basis of preparation The financial statements have been prepared in accordance with applicable accounting standards, the Companies Act 2006 and the Statement of Recommended Practice on Accounting for Further and Higher Education (FE & HE SORP 2007).They conform with the 2014/15 Accounts Direction by the Higher Education Funding Council for England (HEFCE). Basis of consolidation The company is exempt under section 402 of the Companies Act 2006 from the requirement to prepare consolidated financial statements as the governors consider that the company's subsidiary may be excluded from consolidation on the basis that it is immaterial. These financial statements therefore present information about the company as an individual undertaking and not about its group. The following principal accounting policies have been applied: (a) Recognition of Income

Income from grants, donations, contracts and other services rendered is included to the extent of the completion of the related expenditure, contract or service concerned. Income is deferred when School fees or performance related grants are received in advance of the courses or event to which they relate. Income from charitable activities includes income received under contract. Where entitlement to grant funding is subject to specific performance conditions being met, income is recognised as earned (as the related goods or services are provided). Grant income included in this category provides funding to support school activities and is recognised where there is entitlement, certainty of receipt and the amount can be measured with sufficient reliability. Recurrent grants from HEFCE are recognised in the period in which the School is entitled to the funds. Non-recurrent grants from HEFCE or other government bodies received in respect of the acquisition or construction of fixed assets are treated as deferred capital grants and amortised in line with depreciation over the life of the assets. All income from short-term deposits and endowments is credited to the income and expenditure account in the period in which it is earned. Income from restricted endowments not expended in accordance with the restrictions of the endowment is transferred from the income and expenditure account to restricted endowments. Legacies are recognised in accordance with practice note 11, in that they are accrued to the financial statements as soon as entitlement and valuation can be reasonably measured.

(b) Expenditure

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Other expenditure includes expenditure associated with the running of the school and includes both the direct costs and support costs relating to these activities.

Interest and other finance costs include loan interest payable and pension costs.

Notes to the Financial Statements for the year ended 31 July 2015 (continued)

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2 Principal accounting policies (continued)

(c) Taxation

The School is a registered charity and is potentially exempt from taxation in respect of income or capital gains received within categories covered by sections 478-488 of the Corporation Tax Act 2010 (CTA 2010) (formally enacted in Section 505 of the Income and Corporation Taxes Act 1988 (ICTA)) or Section 256 of the Taxation of Chargeable gains Act 1992 to the extent that such income or gains are applied to exclusively charitable purposes. Expenditure includes irrecoverable Value Added Tax charged by suppliers to the School. Irrecoverable VAT is charged against the category of expenditure for which it was incurred.

(d) In kind funding The School benefits from companies, organisations and individuals providing assets for use towards

the running of the school without charge. During the period the School received assets worth £Nil (2014 - £Nil).

(e) Endowment Funds

Where charitable donations are to be retained for the benefit of the School as specified by donors, these are accounted for as endowments. There are three main types: 1. Unrestricted permanent endowments – the donor has specified that the fund is to be permanently

invested to generate an income stream for the general benefit of the institution.

2. Restricted expendable endowments – the donor has specified a particular objective other than the purchase or construction of tangible fixed assets, and the institution can convert the donated sum into income.

3. Restricted permanent endowments – the donor has specified that the fund is to be permanently

invested to generate an income stream to be applied to a particular objective.

(f) Tangible fixed assets and depreciation Tangible fixed assets costing more than £1k are capitalised at cost. Depreciation is provided to write off the cost, less estimated residual values, of all fixed assets except freehold land, evenly over their estimated useful lives. It is calculated at the following rates: Freehold land - Nil per year

Freehold buildings - over 20 years straight line

Teaching block - over 50 years straight line

Fixtures, fittings and office equipment - over 3 years straight line

Fixtures and fittings teaching block - over 10 years straight line

Plant, machinery, technical equipment - over 5 or 10 years straight line

Motor vehicles - over 4 years straight line

Depreciation is charged for a full year in the year of acquisition.

Where land and buildings are acquired with the aid of specific grants they are capitalised and depreciated as above. The related grants are credited to a deferred capital grants account and are released to the income and expenditure account over the expected useful economic life of the related asset on a basis consistent with the depreciation policy.


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Revaluation of freehold land and buildings Financial Reporting Standard 15 “Tangible Fixed Assets” requires fixed assets which are carried at revalued amounts to be shown at their current value at the balance sheet date. To achieve this freehold land and buildings are subject to a full external valuation every five years. The profit or loss on disposal of revalued properties is calculated by reference to net book value and any realised revaluation surplus is recognised in the statement of total recognised gains and losses and revaluation reserve. Assets under construction Assets under construction are accounted for at cost, based on the value of architects’ certificates and other direct costs incurred in the year. No depreciation is charged until the asset is brought into use.

(g) Investments Investments are stated at their market value at the balance sheet date. The statement of total recognised gains and losses includes the net gains and losses arising on revaluations and disposals throughout the year. Under its Memorandum of Association the School has the power to invest the monies of the School not immediately required for its purposes in or upon such investments, securities or property as may be thought fit.

(h) Stock Stock consists of purchased goods for resale and future use. Stocks are valued at the lower of cost and net realisable value.

(i) Pension costs

The final salary pension scheme closed to accrual on 1 September 2006. The pension deficit on this scheme is being paid off over 17 years at a rate of £218k per annum index linked from 1 July 2015 (contribution in the year was £216k). All members of the final salary pension scheme were offered a group personal defined contribution pension scheme. All staff joining the School after 1 April 2001 are offered a group personal defined contribution (GPP) pension scheme.

Contributions to the charity's defined contribution pension scheme are charged to the income and expenditure account in the year in which they become payable.

(j) Operating leases

Rentals applicable to operating leases are charged to the income and expenditure account over the period in which the cost is incurred.

(k) Finance leases

Where assets are financed by leasing agreements that give rights approximating to ownership (‘finance leases'), the assets are treated as if they had been purchased outright. The amount capitalised is the present value of the minimum lease payments payable during the lease term. The corresponding leasing commitments are shown as amounts payable to the lessor. Depreciation on the relevant assets is charged to the profit and loss account. Lease payments are analysed between capital and interest components so that the interest element of the payment is charged to the profit and loss account over the period of the lease and represents a constant proportion of the balance of capital repayments outstanding. The capital part reduces the amounts payable to the lessor.

(l) Foreign currencies

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities are retranslated at the rate of exchange ruling at the balance sheet date. All material differences are taken to the income and expenditure account.


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(m) Defined benefit pension scheme

The difference between the fair value of the assets held in the School's defined benefit pension scheme and the scheme's liabilities measured on an actuarial basis using the projected method are recognised in the School's balance sheet as a pension scheme asset or liability as appropriate. The annual surplus or deficit on the funding of the scheme is recognised as a “pension reserve surplus/(deficit)” within unrestricted funds - see also note 30 to these financial statements. The carrying value of any resulting pension scheme asset is restricted to the extent that the School is able to recover the surplus either through reduced contributions in the future or through refunds from the scheme. Changes in the defined benefit pension scheme asset or liability arising from factors other than cash contributions by the charity are charged to the income and expenditure account and statement of total recognised losses and gains in accordance with FRS 17.

3 Funding body income/grants 2015 2014 12 months 7 months £ £

HEFCE teaching grant 285,503 91,133 HEFCE specific grants 329,023 - HEFCE deferred capital grant released 15,549 - DCMS 2,505,332 1,582,510 DCMS Deferred capital grant released 133,400 84,176 Creative Skillset 851,667 668,168 ________ ________ Total funding body income/grants 4,120,474 2,425,987 ________ ________

4 Tuition fees and education contracts 2015 2014 12 months 7 months £ £ Home post graduate fees 2,186,975 1,242,558 Overseas post graduate fees 589,333 285,250 Diploma and graduate fees 665,907 306,217 Other fees – i.e. Short Courses, Inside Pictures 456,296 314,117 ________ ________ 3,898,511 2,148,142 ________ ________


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5 Other income 2015 2014 12 months 7 months £ £ Grants from platinum partner sponsors 300,000 175,000 Grants from key partner sponsors 612,167 426,666 Donations from NFTS Foundation* 79,000 - David Lean Foundation 32,750 24,250 Fundraising events 392,262 374,903 Other income 705,581 516,615 ________ ________ 2,121,760 1,517,434 ________ ________ * During the year £41k of endowed scholarships were received from NFTS Foundation (2014 – £23k) 6 Endowment and investment income 2015 2014 12 months 7 months £ £ Interest receivable on investments 5,052 11,244 ________ ________ 7 Staff costs 2015 2014 12 months 7 months Staff costs consist of: £ £ Wages and salaries 3,445,498 2,127,850 Social security costs 338,421 210,439 Pension and other costs - defined benefit scheme contributions 216,000 124,000 - defined contribution scheme contributions 358,308 145,368 - FRS 17 adjustments (see note 12) (216,000) (124,000) ________ ________ 4,142,227 2,483,657 ________ ________

Included within wages and salaries for the year are costs relating to tutors of £276k (2014 - £128k).

The number of employees whose emoluments fall within bands of £10k exceeding £100k, excluding pension contributions, was as follows:

2015 2014 12 months 7 months £150,001 - £160,000 1 - ________ ________

Director’s emoluments: 2015 2014 12 months 7 months Salary 147,924 85,147 Benefits in kind 2,188 1,210 ________ ________ Total before employer pension contributions 150,112 86,357 Employer pension contributions 13,743 7,787 ________ ________ Total including employer pension contributions 163,855 94,144 ________ ________


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7 Staff Costs (continued) The average monthly number of employees (full time equivalent) during the year

was as follows:

2015 2014 12 months 7 months Curriculum, Production Support, Short Courses 64 63 Fundraising 4 4 Finance, Registrar, Personnel, I.T. 17 17 ________ ________ 85 84 ________ ________ 8 Governors' emoluments

The School's Memorandum and Articles enable governors to be engaged as tutors. No governors received payments during the year (2014 - £Nil).

During the year, travel expenses totalling £85 were reimbursed to governors (2014 - £Nil).

9 Other operating expenses 2015 2014 12 months 7 months £ £ Curriculum, Productions, and Short Courses 2,733,112 1,447,145 Curriculum support and accreditation 132,619 70,672 Bursaries 284,955 149,633 Scholarships 484,842 297,967 Production support and facilities departments 224,669 146,232 Administrative departments – Finance, Registrar, Personnel, I.T. 611,378 733,492 Directorate 60,216 21,375 Premises 1,007,302 599,128 Fundraising 159,625 165,768 External audit fees 43,560 45,000 Internal audit fees 25,433 - ________ ________ 5,767,711 3,676,412

________ ________

10 Depreciation 2015 2014 12 months 7 months £ £ The depreciation charge has been funded by: Deferred capital grants released 148,949 84,716 General income 583,143 326,025 ________ ________ 732,092 410,741 ________ ________


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11 Interest and other finance costs 2015 2014 12 months 7 months £ £ Interest on long term loans 17,710 9,486 Pension finance costs 35,000 27,000 ________ ________ 52,710 36,486 ________ ________ 12 Pension Costs

The charge to expenditure within the Income and Expenditure account for the financial period in respect of FRS 17 comprised the following:

2015 2014 12 months 7 months £ £ Other finance costs: Expected return on pension scheme assets 347,000 202,000 Interest on pension scheme liabilities (382,000) (229,000) Past service cost - - ________ ________ Net charge (35,000) (27,000) ________ ________ Total charge to income and expenditure account (35,000) (27,000) ________ ________

The total charge to resources expended in the year of £35k (2014 - £27k) has been offset by employer contributions paid over to the scheme trustees in the year which amounted to £216k (2014 - £124k). These contributions have been credited to staff costs “pension and other costs”. The “net” charge to expenditure in the year amounted to a credit of £181k (2014 - £97k). In addition actuarial losses on the pension scheme of £1,009k (2014 - £124k) have been recognised in the Statement of Total Recognised Gains and Losses in accordance with FRS 17. The total movement in the pension scheme deficit during the year amounted to £828k (2014 - £27k).

13

Net expenditure

2015 2014 12 months 7 months This is arrived at after charging/(crediting): £ £ Depreciation 732,092 410,741 External auditors' remuneration - audit services 43,560 45,000 - other services 7,851 1,320 Internal audit 25,433 - Operating lease rentals - plant and equipment 78,501 45,792 ________ ________

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14 Tangible assets Fixtures, Plant, Freehold Assets Oswald fittings machinery land and under Morris and office and technical Motor buildings construction Building equipment equipment vehicles Total £ £ £ £ £ £ £ Cost or valuation At beginning of period 4,900,000 378,015 8,700,000 1,192,548 3,019,933 26,848 18,217,344 Additions - 742,751 - 50,197 319,911 9,643 1,122,502 Revaluation - - - - - - - Disposals - - - - - - - _________ _________ _________ _________ _________ _________ _________ At end of period 4,900,000 1,120,766 8,700,000 1,242,745 3,339,844 36,491 19,339,846 _________ _________ _________ _________ _________ _________ _________ Depreciation At beginning of period - - - 599,416 2,327,145 25,466 2,952,027 Provided for the period 65,000 - 174,000 116,515 372,783 3,794 732,092 Revaluation - - - - - - - Disposals - - - - - - - _________ _________ _________ _________ _________ _________ _________ At end of period 65,000 - 174,000 715,931 2,699,928 29,260 3,684,119 _________ _________ _________ _________ _________ _________ _________ Net book value At 31 July 2015 4,835,000 1,120,766 8,526,000 526,814 639,916 7,231 15,655,727 _________ _________ _________ _________ _________ _________ _________ At 31 July 2014 4,900,000 378,015 8,700,000 593,132 692,788 1,382 15,265,317 _________ _________ _________ _________ _________ _________ _________

The School's freehold land and buildings and the Oswald Morris building were revalued on 31 July 2014 on the basis of Existing Use Value by external valuers, Deloitte LLP. This valuation was undertaken in accordance with the Royal Institution of Chartered Surveyors' Appraisal and Valuation Standards. The Governors are not aware of any material changes since the valuation.


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14 Tangible assets (continued)

The net book value of fixed assets includes an amount of £68k (2014 - £43k) in respect of assets held under finance leases and assets under the course of construction of £1,121k relating to the CISA development. The depreciation charged in the year on finance leases was £44k (2014 - £18k). The surplus arising on revaluation of £2.71m in 2014 was credited to the revaluation reserve. All other tangible fixed assets are stated at historical cost. The historical cost net book value of land and buildings is:

2015 2014 at 31 July at 31 July £ £ Cost brought forward 302,009 302,009 Accumulated depreciation based on historical cost (116,556) (106,843) _________ _________ Historical cost net book value 185,453 195,166 _________ _________ 15 Fixed asset investments 2015 2014 at 31 July at 31 July £ £ Cash deposits held on 1 August 2014 1,304,277 1,293,033 Investment income (interest) 5,052 11,244 Disposal of investments (1,309,329) - _________ ________ Cash deposits held on 31 July 2015 - 1,304,277 _________ ________

16 Investment in subsidiary undertakings 2015 2014 at 31 July at 31 July £ £ Cost at 1 August 2014 and 31 July 2015 2 2 _________ _________ Proportion of Share capital and Country of or incorporation ordinary share reserves at Name or registration capital held 31 July 2015 % £ NFTS Enterprises Limited England and Wales 100% 2

During the year ended 31 July 2015 there was no trading activity through NFTS Enterprises Limited (2014 - profit £Nil).


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17 Endowments Assets 2015 2014 at 31 July at 31 July £ £ Balance at 1 August 2015 254,082 41,248 Additions 466,300 510,800 Expenditure (484,842) (297,966) ________ ________ Balance at 31 July 2015 235,540 254,082 ________ ________

18 Stocks 2015 2014 at 31 July at 31 July £ £ Production and post-production consumables 12,188 23,591 _________ _________

There is no material difference between the replacement cost of stocks and the amounts stated above.

19 Debtors 2015 2014 at 31 July at 31 July £ £ Trade debtors 1,311,273 957,221 Other debtors 16,500 426 Prepayments and accrued income 352,743 516,974 ________ ________ 1,680,516 1,474,621 ________ ________

All amounts shown under debtors fall due for payment within one year.

20 Creditors: amounts falling due within one year 2015 2014 at 31 July at 31 July £ £ Trade creditors 333,813 393 270 Taxation and social security 334,627 225,661 Other creditors 309,046 82,085 Accruals and deferred income 2,736,689 2,159,811 Finance lease obligation 37,570 30,651 Loan capital repayments 157,104 157,104 ________ ________ 3,908,849 3,048,582 ________ ________


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20 Creditors: amounts falling within one year (continued)

The movement on deferred income during the period has been analysed below:

2015 2014 at 31 July at 31 July £ £ Balance at 1 August 2014 1,974,784 3,581,396 Released to the income and expenditure account (1,949,783) (3,557,520) New sources of deferred income 2,515,256 1,950,908 ________ ________ Balance at 31 July 2015 2,540,257 1,974,784 ________ ________

Deferred income mainly relates to invoiced student fees. This income is released when the students actually commence their courses.

21 Creditors: amounts falling due after more than one year 2015 2014 at 31 July at 31 July £ £ Bank loan (secured) 1,217,586 1,374,690 Finance lease obligation 55,349 26,250 VAT liability 141,033 - ________ ________ Balance at 31 July 2015 1,413,968 1,400,940 ________ ________ 22 Creditors: amounts falling due after more than one year

Maturity of debt Bank Finance VAT Total Total Loan Leases 2015 2014 at 31 July at 31 July £ £ £ £ £ In more than one year but not

more than two years 157,104 13,837

141,033 311,974 183,354 In more than two years but

not more than five years 628,416 41,512

- 669,928 628,416 In more than five years 432,066 - - 432,066 589,170 ________ ________ ________ ________ ________ 1,217,586 55,349 141,033 1,413,968 1,400,940 ________ ________ ________ ________ ________

A £3m long term loan facility repayable over 17 years was arranged with Allied Irish Bank (GB) in March 2007. This required the NFTS to register a fixed charge on its freehold land and buildings as security for this loan facility. The loan balance outstanding (£1,375k) represents 17% of the cost of the Oswald Morris building. The interest rate charged on this loan during the year was 1.2%.


36 NFTS

23 Provisions for liabilities 2015 2014 at 31 July at 31 July £ £ Balance at 1 August 2014 415,000 - Additions 31,200 415,000 Released to income and expenditure (415,000) - ________ ________ Balance at 31 July 2015 31,200 415,000 ________ ________ The provisions relate to reorganisation costs. 24 Related party transactions

A number of the governors for the School are also officers, employees or consultants with industry organisations, which have provided grants to the School during the period. During the year the NFTS Foundation made donations to the School totalling £120k (2014 - £23k) of which £41k was for endowed scholarships (2014 - £23k).

25 Deferred capital grants 2015 2014 at 31 July at 31 July £ £ Balance at 1 August 2014 855,619 516,750 Additions 1,008,592 423,045 Released to income and expenditure (148,949) (84,176) ________ ________ Balance at 31 July 2015 1,715,262 855,619 ________ ________ 26 Expendable endowment funds 2015 2014 at 31 July at 31 July £ £ Balance at 1 August 2014 254,082 41,248 Additions 466,300 510,800 Expenditure (484,842) (297,966) ________ ________ Balance at 31 July 2015 235,540 254,082 ________ ________

27 Revaluation reserves 2015 2014 at 31 July at 31 July £ £ Balance at 1 August 2014 9,800,276 7,086,526 Land and buildings revaluation - 2,713,750 Depreciation on revalued assets (229,287) - ________ ________ Balance at 31 July 2015 9,570,989 9,800,276

________ ________


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28 General reserves (income and expenditure) 2015 2014 at 31 July at 31 July £ £ Balance at 1 August 2014 3,254,071 3,557,594 Deficit for the period (net movement for the funds) (64,101) (206,523) Actuarial loss on pension scheme liability (1,009,000) (124,000) Transfer to pension reserves 828,000 27,000 Transfer to revaluation reserve 229,287 - ________ ________ Balance at 31 July 2015 3,238,257 3,254,071 ________ ________

29 Indemnity insurance

During the year, insurance costing £1k (2014 - £1k) was purchased to indemnify the governors and officers against default on their part.

30 Pension scheme

The charity's defined benefit pension scheme was established under an irrecoverable Deed of Trust for its employees. Trustees accountable to the pension scheme members manage the scheme. The scheme was closed to new members on 31 March 2000 and closed to accrual on 1 September 2006. The full actuarial valuation has been updated by a qualified actuary to 31 July 2015 and the major assumptions used were as follows:

2015 2014 2013 at 31 July at 31 July at 31 December Rate of increase in salaries N/A N/A N/a Discount rate 3.60% p.a. 4.30% p.a. 4.60% p.a. Inflation assumption 3.20% p.a. 3.20% p.a. 3.40% p.a.


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30 Pension scheme (continued)

The assets in the scheme and the expected rate of return at 31 July 2015 were:

Long term Long term Long term rate of rate of rate of return return return expected Value expected Value expected Value At At At At At At 31 July 31 July 31 July 31 July 31 December 31 December 2015 2015 2014 2014 2013 2013 £'000 £'000 £'000 Equities and property 7.8% 3,039 7.7% 2,852 8.0% 2,759 Bonds and Gilts 3.0% 3,589 3.6% 3,256 4.0% 3,066 Cash 0.5% 39 0.5% 36 0.5% 28 ________ ________ ________ ________ ________ ________ Total market value of assets 6,667 6,144 5,853 Present value of scheme liabilities (10,384) (9,033) (8,715) ________ ________ ________ Net pension deficit on an FRS 17 basis (3,717) (2,889) (2,862) ________ ________ ________


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30 Pension scheme (continued)

Overall expected rate of return on plan assets is based upon historical returns of the investment performance adjusted to reflect expectations of future long-term returns by asset class. Prior to 1 September 2006 the charity contributed to the final salary scheme at the rate of 15.5% of pensionable salaries. The charity is now committed to paying £218k pa index linked for 17 years from 1 July 2015 in order to clear the £3.71m deficit. Movement in balance sheet deficit in the year under FRS 17:

2015 2014 2013 at 31 July at 31 July at 31 December £'000 £'000 £'000 Deficit in scheme at beginning of period (2,889) (2,862) (2,654) Other investment income (35) (27) (55) Actuarial losses (1,009) (124) (356) Contributions paid 216 124 203 _______ _______ _______ Deficit in scheme at end of period (3,717) (2,889) (2,862) _______ _______ _______

Analysis of the amounts charged to the income and expenditure account under FRS 17:

2015 2014 2013 at 31 July at 31 July at 31 December £'000 £'000 £'000 Operating charge:

Past service cost - - - Other finance costs: Expected return on pension scheme assets 347 202 325 Interest on pension scheme liabilities (382) (229) (380) _______ _______ _______ Pension cost charged to the income and expenditure

account (35) (27) (55) _______ _______ _______

Analysis of the actuarial gains and losses charged to the statement of total recognised gains and losses under FRS 17:

2015 2014 2013 at 31 July at 31 July at 31 December £'000 £'000 £'000 Actual return less expected return on pension scheme

assets 256 128 (149) Changes in assumptions underlying the present value of

the scheme liabilities (1,265) (252) (207) _______ _______ _______ Actuarial loss charged to the statement of total recognised

gains and losses (1,009) (124) (356) _______ _______ _______


40 NFTS

30 Pension scheme (continued) 2015 2014 2013 at 31 July at 31 July at 31 December £'000 £'000 £'000 History of experience gains and losses Difference between the expected and actual return on

scheme assets:

Amount (£'000) Percentage of scheme assets 256 128 (149) 4% 2% (3)% Experience gains and losses on scheme liabilities: Amount (£'000) Percentage of the present value of the scheme liabilities - - - Total amount recognised in the Statement of Finance

Activities 0% 0% 0% Amount (£'000) Percentage of the present value of the scheme (1,009) (124) (356) Liabilities 10% 1% 4%

Reconciliation of fair value of plan assets – Actuarial gain/(loss) 2015 2014 at 31 July at 31 July £'000 £'000 At the beginning of the period 6,144 5,853 Expected rate of return on plan assets 347 202 Actuarial gain 256 128 Contributions by company 216 124 Benefits paid (296) (163) _______ _______ At the end of the period 6,667 6,144 _______ _______ Reconciliation of present value of plan liabilities 2015 2014 at 31 July at 31 July £'000 £'000 At the beginning of the period 9,033 8,715 Interest cost 382 229 Actuarial loss 1,265 252 Benefits paid (296) (163) _______ _______ At the end of the period 10,384 9,033 _______ _______

The cumulative amount of actuarial gains and losses recognised since 2002 is (£3,651k). The School has four insured pensioners in addition to the disclosures provided under FRS17. They are not included in the financial statements, as their net effect would be zero (a matching asset and liability).


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31 Reconciliation of operating deficit to net cash flow from operating activities 2015 2014 12 months 7 months £ £

Deficit on continuing operations after depreciation of assets (548,943) (504,489) Depreciation 732,092 410,741 FRS17 pension cost less contributions payable (181,000) 27,000 Decrease/ (increase) in stocks 11,403 (3,163) (Increase)/decrease in debtors (205,895) 658,044 Increase/ (decrease) in creditors/provisions 646,599 (1,013,230) Release of deferred capital grants (148,949) (84,176) Investment income (5,052) (11,244) Interest paid 17,710 9,486 Finance leases 19,045 10,141 ________ ________ Net cash outflow from operating activities 337,010 (500,890) ________ ________ 32 Reconciliation of net cash flow to movements in net debt

2015 At 31 July

£

2014 At 31 July

£ Movement in net debt resulting from cash flows 1,823,412 (471,480) Bank loan 157,104 78,552 Opening net debt at 1 August 2014 (783,866) (390,938) ________ ________ Closing net funds/(debt) at 31 July 2015 1,196,650 (783,866) ________ ________ 33 Analysis of net (debt)/funds 2014 Non cash 2015 at 1 August Cash flows movement at 31 July £ £ £ £ Cash at bank and in hand 706,680 1,823,412 - 2,530,092 Endowment assets cash balance 41,248 - - 41,248 Debt due within one year (157,104) 157,104 (157,104) (157,104) Debt due after more than one year (1,374,690) - 157,104 (1,217,586) ________ ________ ________ ________ Total (783,866) 1,980,516 - 1,196,650 ________ ________ ________ ________


42 NFTS

34 Commitments under operating leases

As at 31 July 2015, the School had annual commitments under non-cancellable operating leases as set out below:

2015 2015 2014 2014 at 31 July at 31 July at 31 July at 31 July Land and Other Land and Other buildings buildings £ £ £ £ Operating leases which expire:

Within one year - - - - In two to five years - 78,501 - 60,501 ________ ________ ________ ________ 35 Contingent Liability

Significant hydrocarbon impact has been identified under the School’s administration offices which have been built next to a former engineering works site. Discussions are ongoing with the Environment Agency to agree remediation works which is likely to be an in-ground barrier to prevent on-going impact or re-contamination of the site. The cost of the remediation work is likely to be in the region of £150k to £350k, depending on specification. The Environment Agency has confirmed that the contamination does not extend to the sites of the CISA build.

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