University College London...University College London Hospitals Charities ANNUAL REPORT and ACCOUNTS For the year ended 31 March 2006 Contents Page 1. Reference and Administrative

2lci1 I I

No 2

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Rr. ;EIVED BY POST TEAM,COMPLIA N CE ®IV00N

University College London

Hospita ls Charities

Charity Registration no. 229771

Annual Report

and

Accounts

for the year ended 31 March 2006

University College LondonHospitals Charities

ANNUAL REPORT and ACCOUNTSFor the year ended 31 March 2006

Contents Page

1. Reference and Administrative Information 1-2

2. Structure, Governance and Management 3-5

3. Obj ectives 5

4. Activities, Achievements and Performance 5-8

5. Review of Finances 9- 10

6. Future Plans 10

7. Statement of Trustees' Responsibilities 11

8. Consolidated Statement of Financial Activities 12

9. Consolidated Balance Sheet 13

10. Consolidated Cashflow Statement 14

11. Notes to the Financial Statements 15 - 25

12. Auditor's Report 26

IS` Floor, Maple House, 149 Tottenham Court Road, London W1P 9LL

THE UNIVERSITY COLLEGE LONDON HOSPITALS CHARITIES ACCOUNTS 2005-2006

1. Reference and Administrative Information

The Charity

The University College London Hospitals Charities is registered as a group with the Charity

Commission under a single registration number, 229771.

Principal office

The principal office of the charity is ls` Floor, Maple House, 149 Tottenham Court Road,London W1P 9LL.

Charity Trustees

The Charity is governed by up to seven Trustees who are responsible for setting the strategic

direction of the organisation and for establishing policy. The Trustees meet quarterly to discuss

and review the Charity's state of affairs.

Trustees are not remunerated, although out of pocket expenses are reimbursed.

The following served as Trustees of the Charity during the year:

Chairman Sir Ronald MasonTrustee Mr Philip Brading

Trustee The Hon Mark BridgesTrustee Dr Pauline Meadow

Trustee Professor Ian MacdonaldTrustee Lord Latymer

The following is invited by the Trustees to attend meetings in an advisory capacity: -

Attendee Sir David Money-Coutts

Officers of the charity during the year were:

Secretary/Treasurer Mr Peter Burroughs

Operational Director Mr Phillip Boyes

I


Advisors

Bankers Coutts & Co440 StrandLondonWC2R OQS

Solicitors Charles Russell8-10 New Fetter LaneLondonEC4AIRS

Investment Advisors Sarasin ChiswellJuxon House100 St Pauls ChurchyardLondonEC4M 9BU

Schroder & Co Limited5`h Floor31 Gresham StreetLondonEC2V 7QA

GAM London Limited12 St James's PlaceLondonSW1A INX

Investment Property Advisors Davis Brown Limited1 Margaret Street

LondonWIW 8RB

Auditors: External Audit Commission

ls` FloorMillbank TowerMillbankLondonSW1P 4HQ

Internal Parkhill Audit Agency

First Floor135 Greenford Road

Sudbury HillHarrowHA1 3QN

2


2. Structure, Governance and Management

UCLH Charities structure

Following the NHS Executive's proposal for restructuring NHS Charities, The Middlesex

Hospital Special Trustees, the University College Hospital Special Trustees and UCL Hospital

NHS Trust Charity were reconstituted as a single body of Trustees under Section 11 of the 1990

NHS and Community Care Act. Under Statutory Instrument 2000 No 860 these charities were

officially merged into one charity entitled `University College London Hospitals Charities' with

effect from 1 April 2000.

Details of the charities within the group, their individual governing documents and objectivescan be found on the Charity Commission website (www.charity-commi ss ion. og v_uk). Furtherdetails may be obtained from the Charity's registered address.

The Trustees are responsible for setting the strategic direction of the organisation and for

establishing policy. They meet quarterly to discuss and review the Charity's state of affairs. The

Trustees delegate the day to day administration of the Charity to the Secretary/Treasurer who

employs accounting and administrative staff to support him.

Associated Charities

UCLH Charities is the official body that receives donations and legacies in relation to UCLHNHS Foundation Trust. A separate and independent charity, UCLH Charitable Foundation, wasset up as a fund-raising body to support the Foundation Trust with major capital projects. TheTrustees also contribute funding for a number of these major initiatives.

The Essex Wynter Charity is an independent charity that provides subsidised accommodationfor retired nurses. UCLH Charities provide administrative support to the Essex Wynter Charity.Close links are maintained between the two bodies as staff of UCLH NHS Foundation Trustbenefit from the activities of both entities.

The Friends of UCLH, which exists to support the Foundation Trust, also benefits fromadministrative support from UCLH Charities. A link between the two bodies of Trustees ismaintained to allow communication and cooperation in delivering the charitable activities of thetwo entities.

Recruitment, appointment and training of Trustees

All Trustees are appointed by the NHS Appointments Commission on behalf ofthe Secretary ofState for Health and all, once appointed, have equal responsibilities with their fellow Trustees.

There are four lay Trustees and two NHS linked Trustees, with one further NHS linked post in

the process of being filled. Vacant lay posts are broadly advertised and NHS linked posts are

nominated by local NHS Trusts, whose patients might be expected to have an interest in the

management and disbursement of the funds of the Charity.

All applicants for Trustee vacancies are required to go through a selection process set out by the

NHS Appointments Commission. Candidates must be able to demonstrate knowledge of and an

interest in the NHS both nationally and locally. The Trustees are selected to provide the Charity

with a relevant mix of professional skills in law, investment management, banking, fundraising

and charitable grant making.

The NHS Appointments Commission makes the final decision on all appointments and the Chair

of the Appointments Commission writes to invite successful candidates to serve as Charity

Trustees. Trustees are appointed initially for a fixed term of four years, but may be considered for.

reappointment at the end of this term. No Trustee may serve more than ten years in total.

3


Newly appointed Trustees are provided with information packs which provide details on theduties and roles of an NHS Charity Trustee, copies of the constitution of the Charity, theprevious year's annual reports and accounts, and the standing orders and standing financialinstructions. In addition new Trustees meet the Chairman and Officers of the Charity to discussthe organisation's aims, objectives and direction.

Trustees are kept up to date regularly with changes relating to charity legislation. Conferencesorganised by legal, financial and investment professionals are available for Trustees to attend.The Charity is also a member of the Association of NHS Charities, which offers regularseminars for the Trustees.

Organisation and decision making process

The Charity invites applications for funding of projects through University College London.

Hospitals NHS Foundation Trust. All bids must be approved by the NHS Foundation Trust

Board before consideration by the Trustees. This is to ensure that grants made are in line withand support the strategic direction of the Trust.

Bids which have been passed by the NHS Foundation Trust Board are discussed at quarterlyTrustees' meetings to which the NHS Foundation Trust's Medical Directors, Chief Executiveand Chairman are invited to attend in an advisory capacity. Decisions to approve all or part of aparticular grant are made by the Trustees following these discussions.

Grants are made from. unrestricted and restricted funds within the registered charities of the

group.

Unrestricted funds are made up of donations with no particular preference expressed by donors,

thus enabling the Trustees to apply these funds for the general purposes of the Charity. Foradministrative purposes, the Trustees have earmarked part of the unrestricted funds to be used

for identified projects in the future.

Restricted funds are funds subject to specific trusts that may be declared by the donors orcreated through legal process that can only be applied for particular purposes within theCharity's objects.

~ For successful projects, the Trustees will first utilise appropriate restricted funds for, the project.Should this not be possible then unrestricted funds are used instead.

' Related parties

The Charity exists to support the work of UCLH NHS Foundation Trust, with which it has a

' close working relationship.

The NHS Foundation Trust Chairman, Chief Executive and senior medical staff are invited to; attend regular Trustees' meetings. However, the Trustees of the Charity are totally independent

of the NHS Foundation Trust.

The Charity owns the entire share capital of QS Enterprises Ltd, a company providing medicalservices to patients of the NHS and private hospitals. The company has a separate board ofdirectors who report to the Charity Trustees on a regular basis. The financial results of thecompany are consolidated in these accounts: further details are given in Note 9.

Risk management

The Trustees for the University College London Hospitals Charities recognise that they have a

responsibility to minimise the risk to which their activities could be exposed. They activelyreview the major risks which the Charity faces on a regular basis and believe that themaintenance of reserves, combined with the annual review of the controls over key financial

4

~ THE UNIVERSITY COLLEGE LONDON HOSPITALS CHARITIES ACCOUNTS 2005-2006

systems carried out through an internal audit programme, will provide sufficient resources in theevent of adverse conditions.

1 3. Objectives

IObjectives

The principal objective of the University College London Hospitals Charities is to apply funds' for any charitable purpose or purposes relating to hospital services, including research, or to any

part of the Health Service being wholly or mainly associated with any hospital for which the

Trustees are appointed.

The Trustees for the University College London Hospitals Charities seek to achieve thisobjective in four main ways:

• relief of sickness of patients who are or have been treated at the University CollegeLondon Hospitals or any hospital for which the Trustees are appointed.

• relief of sickness at the Hospitals by promoting the efficient performance of staff duties.

' • funding projects which investigate the causes of sickness and disability and theprevention, treatment, cure and defeat of sickness and disability in all its forms.

• funding projects which benefit the advancement of scientific and medical education and' research in topics related to sickness and disability.

Implementation of objectives

~ It is the intention of the Trustees that the charitable funds should be used to expand on anddevelop the services provided by the NHS Foundation Trust, by funding innovative and originalprojects which would not otherwise be possible using only central NHS funds.

4. Activities, Achievements and Performance

This past year has seen the culmination of years of planning and preparation by the NHS Trustwith the commissioning of the new, state-of-the-art University College Hospital. The hospital is

' equipped with the very latest diagnostic and treatment equipment and over 3,000 staff and450,000 patient appointments were transferred into the new hospital from a number of very oldand outdated buildings. The Charitable Trustees were able to make a major contribution to the

' equipping of many parts of the new hospital. The new hospital coped superbly with treating

victims of the London bombings less than a month after the moves began, and the Trust was

honoured in October when The Queen, accompanied by The Duke of Edinburgh, visited the~ hospital to perform the official opening.

- The Trust also saw the completion of a number of other major developments with the re-

opening of the refurbished Royal London Homoeopathic Hospital by HRH Prince Charles, and

of the rebuilding of Chenies Mews to accommodate the Hatter Cardiovascular Institute,Haemostasis laboratory and cell manipulation facilities. The Charitable Trustees provided major

grants for these developments, contributing to the infrastructure and equipping and enhancing

' the amenities for patients and staff.

The Trust met all its main clinical performance targets, gaining three stars for the fourth year

' running, with the accident and emergency department continuing to be one of the bestperforming in London.

~ During the year the Charity supported a wide range of charitable and health related activities in

the new hospital and existing facilities benefiting both patients and staff. The Trustees provided

5

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grants to purchase equipment and to support services which the NHS Foundation Trust wasunable to provide.

Additional support came from a number of the smaller restricted funds, where decisions overspending are delegated to ward or consultant level, under the oversight of officers of theCharity. Direct expenditure from these funds delivered a significant proportion of the activitiesofthe Charity.

Medical equipment and infrastructure costs

In June 2005 the new University College Hospital admitted its first patients and by Christmas

the full complement of 600 beds was fully operational. In 2004-2005 in the run up to the

commissioning and in the current year 2005-2006, the Trustees contributed over £4m to enable

the new hospital to be equipped to the highest standards available. Specific Grants approved inthe year included £1.5m for robotic surgical equipment, to enable the Trust to carry outminimally invasive surgical procedures in two of the new hospital theatres.

The Trust introduced the film-less patient images archiving system (PACs) which wassupported substantially by charitable funds and became fully operational at UCH in August2005. All images, such as MRI and CT scans, X-rays and ultrasound scans, are now stored

electronically, saving time and money transporting and storing physical patient records.

The Trustees are also supporting major developments on the Queen Square campus. The

redevelopment of 33 Queen Square linking the National Hospital for Neurology andNeurosurgery and the Royal London Homoeopathic Hospital has received full planningpermission and enabling works have commenced. The Trustees are committed to funding £1.5m

over a 5 year period.

The Trustees are also contributing a total of £1.9m over a five year period for the installation ofa new interventional MRI unit which scans patients during surgery and aims to improve the

treatment of brain tumours, vascular abnormalities and functional surgery. The unit - the first ofits kind in the UK - is due to be completed by the end of 2006.

At the Hospital for Tropical Diseases, £50k was also approved to upgrade and improve the

outpatient consulting suite providing proper isolation facilities to enable patients with suspected

community acquired infectious diseases to be seen in a much improved environment. TheTrustees also approved the purchase of a ScanMed Doppler machine for £24k.

While a substantial proportion of the funding for new medical equipment and improvements tothe fabric of the buildings have come from the Trustees' funds it is very important to recognisethe significant contribution from ward and consultant funds which provided over £450,000

towards medical and other equipment.

Patient welfare and amenities

The Trustees provided major financial support to three key service developments for patients

during the year.

Grants totalling £455,000 were approved to support future planning and development of

ambulatory care facilities. Models of care developed in America have been studied in somedetail and it has been found that treatment on a day-case basis improves clinical outcomes forcancer patients.

The Trustees approved funding for two clinical teaching posts based in the Royal London

Homoeopathic Hospital and the National Hospital for Neurology and Neurosurgery, tocommunicate best clinical practice throughout those hospitals and improve treatment forpatients.

6

' THE UNIVERSITY COLLEGE LONDON HOSPITALS CHARITIES ACCOUNTS 2005-2006

The Trustees have supported substantially the initiative to introduce art into the healingenvironment. The Trust Board embarked on a fundraising exercise in 2001 to raise funds for art

' in the public areas in the new hospital. The new hospital has a number of unique pieces of artdesigned by the Slade School of Art (part of UCL) to which the Trustees contributed grants of£168,000.

~ Ward and consultant funds contributed a further £47,000 towards improving patient welfare and

amenities.

~ Research

The Trustees continued their financial support for the Clinical Research and Development~ Committee, which funds non-commercial research projects. The CRDC is responsible for the

selection and management of research projects which have potential to develop new therapiesfor treating and curing patients. The Trustees have no formal intellectual property contract but

' have agreed a memorandum of understanding with the CRDC that all grants are awarded on the

basis that any gains relating to intellectual property rights arising as a result of the studies must

be shared with the Trustees.

11

II

I

During the year, 13 one- and two-year research projects were approved. The Trustees received

feedback from the CRDC relating to completed projects, approved in earlier years. All of the

research from completed projects was published in peer-reviewed journals or otherwise made

available to the wider research community. Four of the completed projects have attracted further

grant funding from other sources, and additional external funding is being actively sought in a

further five cases.

As part of their ongoing commitment to research, the Trustees continued to fund a Research

Governance Educationalist, a post which exists to develop local research governance policies

and procedures in line with the NHS Research and Development strategy. The Trustees consider

that this post is essential to ensure that funding for research is consistent with current clinical

priorities.

Consultant funds contributed very significantly to research activities, including a majorinternational cardiac conference (£640k, funded wholly from unrestricted commercialdonations), support for research posts (£840k), and funding staff attendance at conferences andmeetings (£570k).

Two specific projects received grants in the year. A head and neck tissue bank is being

established to investigate links between the genetic fingerprints of specific head and neck

cancers and clinical outcomes. This research will be used to develop targeted therapies which it

is hoped will improve the survival rates for these cancers.

The use of cardiac ultrasound is becoming increasingly common, with large numbers of people

becoming competent in its use in more varied applications. There is a need to train personnel to

ensure that patients receive appropriate investigation by suitably trained practitioners. The

second project for which funding was approved by the Trustees is the development of an

animated virtual 3D model of the heart for use on a personal computer or laptop. There are,

currently, no realistic, accurate solid or virtual models of the human heart. Existing solid models

are too cumbersome and are not accurate enough to be useful. Available virtual models are

generally inaccurate, not animated, and/or lack the facility for interactive manipulation. An

accurate model of the heart would be an invaluable aid in the teaching and understanding of

cardiac anatomy, and will have widespread applications in teaching at every level. The need for

a virtual model is increasing in the current climate as a result of difficulty surrounding organ

retention and the use ofpathology specimens for teaching.

71


Staff welfare and amenities

The Trustees are keenly aware that developing and supporting the Trust's staff contributes topatient welfare in terms of increased staff retention, morale and knowledge. Grants approved inthe year included £75k for an additional staff physiotherapist: the Trustees supported the firsttwo years of a similar post in the past, and the demand has now increased to such an extent thata second physiotherapist is needed.

Small study grants from charitable funds enabled 23 nursing and non-medical staff to continuetheir professional education. These grants are conditional on the staff member committing tostay with the NHS Trust for a minimum of two years, to ensure that the additional knowledgegained can be used to improve patient service within the Trust.

To reward long and committed service, the Trustees provide funding for an annual ceremony, atwhich the Trust's chairman .presents awards in recognition of the valuable contribution ofstaff'members who have served more than 25 years with the Trust. This year, 31 staff were honouredin this way: the event was attended by the families and friends of the members of staff and wasfollowed by a reception, which everyone enjoyed. In addition, gifts and contributions towardsleaving celebrations were funded for staff leaving the Trust after more than 10 years service, asa mark of gratitude for their commitment.

Investments

The Trustees invest their charitable funds with three managers; Sarasin Chiswell, Schroder &Co Ltd and GAM London Ltd. The Trustees also own a number of investment properties whichprovide residential and office accommodation for Hospital staff.

The governing documents allow the Trustees to invest in a wide range of shares and investmentsprovided they are not speculative or hazardous investment. The Trustees placed theirinvestments with the three fund managers with the aims of protecting their investments indifficult market conditions at the same time benefiting from a growth period.

The Trustees require their investment advisors to manage their portfolios both to provide aminimum income requirement as agreed with the Trustees and also to provide growth of capitaland income over the long term, whilst avoiding exposing the Charity's assets to unacceptablyhigh levels of risk. The Charity's policy is not to invest directly in companies which producetobacco products.

As at 31 March 2006 the Trustees held investment assets with a market value of £87.6m,

consisting of £66.1m held with the investment managers detailed above and £21.5m in

investment properties. These properties were revalued as at the end of the financial year, in line

with the requirements of the Accounting Standards Board's Statement of Recommended

Practice. These properties generated income of approximately £972k in 2005-2006.

Investment in stocks and shares, valued at £66.1m, were made in accordance with powers

granted under the provisions of a scheme of the High Court of Justice (Chancery Division)

dated 1956, as amended by Schemes of Charity Commissioners dated 1979 and 1986 and April

1999.

Investment performance is continuously monitored and measured in house, against Trustees'

and WM benchmarks on a monthly basis. Investment advisors meet with Trustees half yearly

where strategies and performance are discussed. The appointment of investment advisors is

reviewed every two years. During the year a total return of 21.07% was achieved compared with

24.85% from WM and the benchmark set by the Trustees of 6.5%.


5. Review of Finances

Income

Income for the year was £9.9m, down from £10.6m in 2004-2005. Of this, £4.5m (2004-2005:£5.3m) came from donations and legacies, of which £3.6m (2004-2005: £3.1m) was generatedby ward and consultant funds. £2.2m (2004-2005: £2.4m) was generated by the Trustees'investments, and £2.7m (2004-2005: £2.6m) related to the turnover of the subsidiary company(see note 9). Fundraising contributed £41k, (2004-2005: £69k) and income from charitableactivities, such as courses run by ward and consultant funds, contributed £434k (2004-2005:£148k).

Expenditure

Total expenditure for the year increased to £ 13.6m, a rise of £4m which was mainly attributableto a higher level of grants approved in the year. During 2004-2005, a number of long-runningprojects were completed for less than the budgeted amount, which resulted in a credit to theincome and expenditure account.

Details of activities and spending on those activities are given on pages 5 to 7 of this report andin the Statement of Financial Activities and note 3. The tables below give breakdowns of thereturns on the costs of generating funds and of the proportions of the total expenditurerepresented by the various activities.

Table 1: returns on cost ofgeneratingfunds2005-2006 2004-2005

£k £k cost Cost as £k £k cost Cost asincome % of income % of

income incomeGenerating fundsVoluntary income 4,515 112 2.5% 5,323 110 2.1%Fundraising* 2,757 1,452 53.4% 2,717 1,367 50.3%Investments 2,208 319 14.4% 2,388 287 12.0%Subtotal 9.480 1,$$3 19.9% 12,428 1.764 16.9%* including fundraising trading

Table 2: expenditure analysis

2005-2006£k cost Cost as

% of total

2004-2005£k cost Cost as

% oftotalCost of generating fundsVoluntary income

FundraisingInvestments

SubtotalCharitable expenditurePatient services:Equipment purchasesNew hospital

Welfare/ amenitiesResearch

Staff welfare/ amenitiesSubtotalGovernanceTotal

112 0.8% 110 1.1%1,452 10.7% 1,367 14.1%

319 2.3% 287 3.0%1,883 13.8% 1,764 18.2%

3,841 28.2% 1,556 161%2,000 14.7% 2,000 20.6%

831 6.1% 128 1.3%3,466 25.4% 2,847 29.4%1,423 10.4% 1,198 12.4%

11,561 84.8% 7,729 79.8%183 1.4% 195 2.0%

9


Reserves

The Trustees have ongoing commitments relating to the welfare of both patients and staff. Apartfrom legacies, which are by their nature unpredictable, the Trustees' income is almost entirelyderived from their investments. The Trustees therefore consider that there is a need to maintaina level of reserves sufficient for the income therefrom to continue to meet these commitments,allowing for fluctuations in the returns that these investments generate.

The Trustees similarly have an ongoing inflation-linked commitment to Research &Development requiring sufficient reserves to fund it.

The Trustees' other expenditure is both spasmodic and often substantial on any one project, beit the purchase of expensive medical equipment or a major capital scheme. It thus variesconsiderably from year to year. A substantial level of reserves is required both to meet knownlikely expenditure up to two or three years' forward and unforeseen expenditure. Currentlylarger than usual reserves are held to enable significant contributions to be made towards theplanned redevelopment of University College London Hospitals and towards the majorequipment required to maintain a first class service to patients during the development.

The Trustees review the level of their reserves on a quarterly basis to ensure that they can meettheir likely commitments and review their reserves policy on an annual basis.

To meet their aims and to reduce their reliance on their reserves the Trustees will actively seek

opportunities for income generation and value for money projects.

6. Future Plans

Following the commissioning of the first phase of the new hospital, building work hascommenced on the new EGA Women and Children's Wing which will form the second phase ofthe development which is due to open in 2008. The Foundation Trust Board is now activelyprogressing the strategy for the further rationalisation of hospital sites and the centralisation ofclinical facilities on the Gower Street campus.

As part of the Trust's strategic development programme the Trustees have supported the design

and development of state of the art facilities for ambulatory cancer care combining the

advantages of a US style ambulatory cancer centre with the access benefits of the NHS and the

clinical and research gains of location within a major biomedical campus. This would require

substantial charitable support as it has done in America, the world leader in this style of

treatment. The Trustees will continue to support innovative approaches to delivering care and in

particular:

• to assist in the improvement of the clinical quality and experience of care for patients;

• to enhance cancer and other clinical research and development in conjunction withUCL, underpinning the Trust's bid to become one of the 5 designated NHS academic

medical centres;• to assist in the improvement of teaching resources for medical, nursing and allied health

professionals;• to help to free up in-patient beds to facilitate the consolidation of clinical services from

outlying sites.

A new Clinical Research Facility will be established in the new hospital building, a new Cancer

Sciences Institute will open in 2007 and the Medical Research Council has decided to relocate theNational Institute for Medical Research to the old National Temperance Hospital site. These aremajor developments even for a Biomedical Campus as extensive as that already established at

UCLH/UCL and will help to maintain international competitiveness as well as attracting new

10


7. Statement of Trustees' Responsibilities

The Trustees are responsible for:

• keeping proper accounting records which disclose with reasonable accuracy at any time

the financial position of the Charity and to enable them to ensure that the accounts

comply with requirements in the Charities Act 1993;

• establishing and monitoring a system of internal control; and

• establishing arrangements for the prevention and detection of fraud and corruption.

The Trustees are required under the Charities Act 1993 to prepare accounts for each financialyear which give a true and fair view of the financial position of the Charity, in accordance with.the Charities Act 1993. In preparing those accounts, the Trustees are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates which are reasonable and prudent; and

• state whether applicable accounting standards have been followed, subject to anymaterial departures disclosed and explained in the accounts.

The Trustees confirm that they have met the responsibilities set out above and complied withthe requirements for preparing the accounts. The financial statements set out in sections 8 to 11attached have been compiled from and are in accordance with the financial records maintainedby the Trustees.

By Order of the Trustees

Signed:

Chairman:.......... ".....~.~~' Date:...`~....71A~.y..~taC~

~ I 8 0~ (A l `P ~C1~Trustee: ................................... .............. te:................................


8. Consolidated Statement of Financial Activities for the year ended 31 March 2006

~2004-05

Note Unrestricted Restricted Endowment Total Total'

Funds Funds Funds Funds Funds

£000 £000 £000 £000 £000

Incoming resources' Incoming resources from generated funds

Voluntary income

Donations 79 3,409 - 3,488 3,312 *Legacies 153 874 - 1,027 2,011'

Total voluntary income 232 4,283 4,515 5,323

Activities for generating funds - 2,757 - 2,757 2,717

Investment income 1,592 616 - 2,208 2,388

~ Total incoming resources from generated funds 1,824 7,656 9,480 10,428

Incoming resources from charitable activities 434 434 148

Total incoming resources 2 1,824 8,090 - 9,914 10,576 *

t Resources expendedCost of generating funds

Cost ofgenerating voluntary income 53 59 - 112 110

' Fundraising trading: cost ofgoods sold and other costs - 1,452 - 1,452 1,367

Investment management costs 163 139 17 319 287

Total cost ofgenerating funds 216 1,650 17 1,883 1,764

Charitable expenditure'

Improvements to patient services:

Medical equipment and infrastructure costs 1,702 2,139 - 3,841 1,556

Equipping the new University College Hospital 2,000 - - 2,000 2,000

Welfare and amenities 769 62 831 128~

Medical research 432 3,034 3,466 2,847

Staff welfare and amenities 264 1,159 - 1,423 1,198

Total charitable expenditure 5,167 6,394 11,561 7,729tGovernance costs 72 111 - 183 195

Total resources expended 3,4 5,455 8,155 17 13,627 9,688 *

Net (outgoing)/incoming resources before transfers (3,631) (65) ( 17) (3,713) 888~

Gross transfer between funds

Net (outgoing)/incoming resources (3,631) (65) (17) (3,713) 888

~

Gains on revaluation and disposal

of investment assets 7,441 4,689 1,136 13,266 8,122

Net movement in funds 6 3,810 4,624 1,119 9,553 9,010

Fund balances brought forward at

31 March 2005 46,265 25,669 4,798 . 76,732 67,722'Fund balances carried

forward at 31 March 2006 . 50,075 30,293 5,917 86,285 76,732

The notes numbered I to 17 form part of this account.

* Comparative figures restated as disclosed in Note 1.2

, 1I

I 12

1


9. Consolidated Balance Sheet as at 31 March 2006

Notes Unrestricted Restricted Endowment Total at 31 Total at 31

Funds Funds Funds March 2006 March 2005

£000 £000 £000 £000 £000

Fixed Assets

Tangible assets 7 - 207 - 207 265

Investments 8 50,720 30,984 5,917 87,621 80,950Total Fixed Assets 50,720 31,191 5,917 87,828 81,215

Current AssetsStocks 6 - - 6 16

Debtors 10 1,969 950 - 2,919 1,924Cash at bank and in hand if 2,129 2,348

i- 4,477 1,622

Total Current Assets 4,104 3,298 - 7,402 3,562

Creditors: Amounts falling due

within one year 12.1 (4,669) (4,172) - (8,841) (7,827)

Net Current Liabilities (565) ( 874) - (1,439) (4,265)

Total Assets less Current Liabilities 50,155 30,317 5,917 86,389 76,950

Creditors: Amounts falling due

after more than one year 12.2 (80) (4) - (84) ( 188)

Provisions for liabilities and charges - (20) - (20) (30)

Total Net Assets 50,075 30,293 5,917 86,285 76,732

Funds of the Charity

Capital Funds:

Endowment Funds 13.1 - - 5,917 5,917 4,798

Income Funds:

Restricted

Unrestricted

Total Funds

The notes nu red 1 to 17 form part of this a~count.

Signed:

13.2 - 30,293 - 30,29313.3 50,075 - - 50,075

50,075 30,293 5,917 86,285

' Date: I $ ZUlry 02 oo(,

~

~

t

'

13

25,669

46,265

76,732


10. Consolidated Cash Flow Statement for the year ended 31 March 2006

Notes 31 March 31 March

2006 2005

£000 :E000

Cash outflow from operating activities 14.1 (5,920) (4,669)

Returns on investments and servicing of finance

Dividends received

Net cash inflow from returns on investments and servicing of finance

Capital expenditure and financial investment

Payments to acquire tangible fixed assets

Receipts from sales of investment assets

Net cash inflow/(outflow) from capital expenditure and financial investment

Management of liquid resources

Purchase of investments

Proceeds from sale of investments

Net cash (outflow)/inflow from management of liquid resources

Increase/(decrease) in cash

The notes numbered I to 17 fonn part of this account.

2,208 2,:388

2,208 2,388

(28) ( 11)

6,755 -

6,727 ( 11)

(10,844) (36,295)10,684 36,978

(160) 683

14.2 2,855 (1,609)

14


11. Notes to the Financial Statements

1 Accounting Policies

1.1 Accounting Convention

a) The financial statements have been prepared under the historic cost convention, as modified for the

revaluation of certain investments, and in accordance with applicable United Kingdom accounting

standards and the Statement of Recommended Practice "Accounting and Reporting by Charities"

(SORP 2005) issued by the Charities Commissioners in 2005.

t b) The results of the subsidiary company, QS Enterprises Limited, have been consolidated in theseaccounts on a line by line basis. Further details are given in Note 9.

1.2 Introduction of SORP 2005

' As a result of the introduction of SORP 2005, the prior year figures have been restated to complywith the new standard. This has resulted in two changes:

~ a) As described in Note 2.1, the value of the free accommodation provided to the Charity has beenincluded in Incoming Resources as a donated service, with an equal amount included in supportcosts and apportioned between activities.

b) Note 4 includes all the staff of the Charity and its subsidiary company. Previously, since the staff ofthe Charity are not employed direct by the Charity but by UCLH NHS Foundation Trust, the costsassociated with these staff were shown as "bought in services from NHS".

1.3 Incoming Resources

a) All incoming resources are included in full in the Statement of Financial Activities as soon as thefollowing three factors can be met:

i) entitlement - arises when a particular resource is receivable or the charity's right becomeslegally enforceable;

ii) certainty - when there is reasonable certainty that the incoming resource will be received;

iii) measurement - when the monetary value of the incoming resources can be measured withsufficient reliability.

b) Gifts in kind and donated services and facilities

i) Assets given for distribution by the funds are included in the Statement of Financial Activities

only when distributed.ii) Assets given for use by the funds (e.g. property for its own occupation) are included in the

Statement ofFinancial Activities as incoming resources when receivable.

iii) Gifts made in kind but on trust for conversion into cash and subsequent application by the

funds are included in the accounting period in which the gift is sold.iv) In all cases the amount at which gifts in kind are brought into account is either a reasonable

estimate of their value to the funds or the amount actually realised. The basis of the valuation is

disclosed in the annual report.

Donated services (eg the provision of free accommodation) are included in the accounts with an

equivalent amount in outgoing resources, where the amounts are considered material. The value

placed on such intangible income is the estimated cost to the Charity of purchasing the same

se rvices at the market rate.

15


1.3 Incoming Resources (continued)

' c) Legacies

Legacies are accounted for as incoming resources either upon receipt or where the receipt of the~ legacy is virtually certain; this will be once confirmation has been received from the representatives

of the estate(s) that payment of the legacy will be made or property transferred and once allconditions attached to the legacy have been fulfilled.

Material legacies which have been notified but not recognised as incoming resources in theStatement of Financial Activities are disclosed in note 17, with an estimate of the amountreceivable.

1.4 Resources Expended

Expenditure is included on an accruals basis.

Each item of expenditure is included under the heading on the Statement of Financial Activitieswhich best describes it. Cost of Generating Funds includes the costs of fundraising within UCLHCharities as we ll as the costs (excluding governance costs) of the subsidiary. Grants payable areincluded in the Statement of Financial Activities, under the relevant heading in CharitableExpenditure, when approved by the Trustees and agreed with the recipient organisation. The valueof such grants unpaid at the year end is accrued.

Governance costs comprise the costs associated with the general running of the charity and

subsidiary.

Suppo rt costs are appo rtioned between costs of generating funds, charitable activities and

governance based on the proportion of time spent by staff supporting those activities.

Support costs, overheads, governance and other general costs are allocated to funds on the basis of

the fund's average balance.

1.5 Tangible Fixed Assets and Depreciation

Neither the Charity nor its subsidiary company has a strict monetary limit below which fixed assetsare not capitalised. Instead, each asset or group of assets is considered separately and capitalised ifappropriate, unless the value is clearly negligible.

Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost lessestimated residual value of each asset evenly over its expected useful life, as follows:

Years

Leasehold improvements and decommissioning costs Over the term ofthe leaseComputer equipment 2 to 3 years

Furniture, medical and office equipment 3 to 5 years

The carrying values of tangible fixed assets are reviewed for impairment in periods if events or

changes in circumstances indicate that the carrying value may not be recoverable.

1.6 Investment Fixed Assets

Investment fixed assets are shown at market value.

a) Property assets are not depreciated but are shown at market valuation. Valuations are carried out by

a professional valuer at five yearly intervals. The last such valuation was at 1 April 2004 provided

by Davis Brown, Chartered Surveyors. Between valuations "desk-top" valuations are provided by a

professional valuer. Valuation gains and losses are recorded in the Statement of Financial Activities

with the balance sheet reflecting the revalued amounts;

b) Quoted stocks and shares are included in the balance sheet at mid-market price, ex-div;

16


1.6 Investment Fixed Assets (continued)

c) All gains and losses are taken to the Statement of Financial Activities as they arise. Realised gainsand losses on investments are calculated as the difference between net sale proceeds and openingmarketvalue (or purchase date if later). Unrealised gains and losses are calculated as the differencebetween the market value at the year end and opening market value (or purchase date if later).

1.7 Use of Designated Funds

Designated funds have been established for expenditure which has been committed in principle toprojects but which remains unspent at the year end.

1.8 Cash Flow Statement

Cash flows are included under the heading which best describes the underlying transaction givingrise to the cash flow.

"Liquid resources" comprise the quoted securities and cash held by the investment advisors.

1.9 Pension Costs

Staff providing governance and administration services to the charity are employed by UCLH NHSFoundation T ru st and are entitled to join the NHS Pensions Scheme. The Scheme is an unfunded,defined benefit scheme which covers NHS employers, General Practices and other bodies, allowedunder the direction of the Secreta ry of State in England and Wales. As a consequence, it is notpossible for the Charity to identify its share of the underlying scheme liabilities.

The Scheme is subject to a full valuation every four years by the Government Actuary. The lastpublished valuation relates to the period 1 April 1994 to 31 March 1999. Between valuations, theGovernment Actuary provides an update of scheme liabilities. The latest assessment ofthe liabilitiesof the Scheme is contained in the Scheme Actuary repo rt, which forms pa rt of the annual NHS

Pension Scheme (England and Wales) Resource Account, published annually. These accounts can

be viewed on the NHS Pensions Agency website at www.nhspa.gov.uk. Copies can also be obtained

from the Stationery Office.

The notional surplus of the scheme is £1.lbn as per the last scheme valuation by the GovernmentActuary for the period 1 April 1994 to 31 March 1999. The conclusion of the valuation was that thescheme continues to operate on a sound financial basis.

Employer pension contributions are charged to the Statement of Financial Activities as and when

they become due. Employer contribution rates are reviewed every four years following the scheme

valuation, on advice from the actua ry . At the last valuation on which contribution rates were rebased(31 March 1999) employer contribution rates from 2003-2004 were set at 14% ofpensionable pay.

Employees pay contributions of 6% of their pensionable pay.

The subsidiary company contributes to the personal pension schemes of all employees, other than

directors. Contributions are charged to the Statement of Financial Activities as they become payablein accordance with the contribution rates agreed with the relevant employees.

1.10 Pooling Scheme

An official pooling scheme is operated for investments. Following the merger of The Middlesex

Hospital Special Trustees, University College Hospital Special Trustees and UCL Hospitals NHS

Trust Charity, the Trustees passed a resolution on the 26 September 2000 to adopt The Middlesex

Hospital Charity's Pooling Scheme. This scheme was registered with the Charity Commission on the

15 September 1986, subsequently superseded by the Charity Commission Scheme on the 7th April

1999 and updated by the Charity Commission to reflect the merged Charities on 30th November

2000.

1.11 Related Party Transactions

During the year none of the Trustees or members of the key management staff or parties related to

them has undertaken any material transactions with the University College London Hospitals

Charities.

17


2 Incoming resources

2.1 Voluntary income: donated services

Included in donations is the sum of £60,000 relating to the provision of rent-free accommodation within premises leased by University

College London Hospitals NHS Foundation Trust. This is included at the estimated cost to the Charity of renting similar accommodation

elsewhere.

The same sum is included as premises costs in the support costs of the charity ( see note 3.4) which is allocated between activities and across

funds.

'

'

2.2

2.3

Activities for generating funds

Included within activities for generating funds are amounts received in relation to proactive fundraising, such as sponsored events and card

sales, together with the turnover of the trading subsidiary (see note 9).

Investment income

Investment income comprises both dividends and interest received in relation to portfolios of listed securities and also rents receiveable on

investment properties owned by the Trustees. An analysis of the amounts is given in note 8.3.

3 Resources expended3.1 Analysis of charitable expenditure Activities Grant Total Total

undertaken funded Support Funds Funds

directly activity costs 2006 2005~£000 £000 £000 £000 £000

Improvements to patient services:

Purchase of medical equipment 458 3,303 80 3,841 1,556'Contributions to the new hospital 2,000 2,000 2,000Welfare and amenities 47 783 2 832 128

Medical research 3,019 349 98 3,466 2,847

Staffwelfare and amenities 1,290 90 42 1,422 1,198'6,814 4,525 222 11,561 7,729

Comparative figures have been restated as disclosed in Note 1.2

' 3.2 Activities undertaken directly

The Charity has a number of smaller restricted funds, where decisions over spending are delegated to ward or consultant level, under the

oversight of officers of the Charity. Direct expenditure from these funds delivered a significant proportion of the activities of the Charity.

More details of these activities are given in the Trustees' Report - Activities, Achievements and Performance.

3.3 Grant funded activity No of Aggregate' Grants

Name of recipient and number of grants

amount paid

£000

UCL Hospitals NHS Foundation Trust - Medical equipment and infrastructure costs 5 3,303

UCL Hospitals NHS Foundation Trust - Patient welfare and amenities 6 783

' UCL Hospitals NHS Foundation Trust - Medical research 4 :349UCL Hospitals NHS Foundation Trust - Staff welfare and amenities 2 90

Total 4,525

' More details of major grants paid to UCL Hospitals NHS Foundation Trust during the year can be found in the Annual .Report - Activities,

Achievements and Performance.

I

18


3 Resources expended ( continued)

3.4 Allocation of support costs and overheadsOnce allocation and/or apportionment of overhead and support costs has been made to governance costs and cost of generating funds, thebalance is apportioned across charitable activities using the same apportionment bases.

Allocated ResidualTotal Allocated to cost of forcosts to generating apportion-

2006 governance funds ment

Expenditure type Basis ofapportionment £000 £000 £000 £000

Salaries:Charity staff Allocated on time 322 102 46 174Staffof trading subsidiary Cost ofgenerating funds 308 - 308 -

Total salaries 630 102 354 174Audit fees (external and internal) Governance 46 46 - -Legal fees Governance - - - -Indemnity insurance Governance 7 7 - -Premises costs Proportional to salaries 60 19 8 33Other office and sundry costs Proportional to salaries 28 9 4 15

771 183 366 222

Premises Other office TotalSalaries costs costs allocated

2006

£000 £000 £000 £000

Improvements to patient services:Purchase of medical equipment 63 12 6 81

Contributions to the new hospital - - - -Welfare and amenities I - - 1

Medical research 77 15 6 98

Staff welfare and amenities 33 6 3 42174 33 15 222

4 Analysis of staff costs4.1 Staff costs Total Total

2006 2005

£000 i:000

Salaries and wages 533 495

Social security costs 50 47

Other pension costs 47 43Total emoluments ofemployees (remuneration plus benefits for tax purposes) 630 585

Average monthly number of employees in the year:Charity staff 6 6Staff of trading subsidiary 9 I I

15 17

The staff of the Charity are employed by University College London Hospitals NHS Foundation Trust a nd the costs of thei r employment,including employer's pension and National Insurance contributions, are fully recharged to the Charity.

Comparative figures have been restated as disclosed in Note 1.2

4.2 Senior employees and pension contributionsThe number of senior employees whose emoluments for the year exceeded £60,000 wasas follows:

From £60,001 to £70,000From £70,001 to £80,000

Number Number2006 2005

1 2

1 -

Benefits were accruing for the one of the above staff under the defined benefit scheme outlined in note 1.7

Contributions of £4k (2005: £4k) were made to purchase defined contribution pension benefits on behalf of the second of the above staff.

19


5 Audit feesFees paid to external auditors for audit services totalled £37k for the year (2004-05: £44k). No fees were paid to the external auditors of theCharity for non-audit services. The subsidiary company paid fees of£7k (2004-05: £12k) to their external auditors for non-audit services.

6 Changes in resources available for Charity use

Unrestricted Restricted Endowment Total TotalFunds Funds Funds Funds Funds

2006 2005

£000 £000 £000 £000 £000

Net movement in funds for the year 3,810 4,624 1,119 9,553 9,010Net movement in tangible fixed assets: - ( 58) - (58) (76)Net movement in funds available

for future activities 3,810 4,566 1,119 9,495 8,934

7 Fixed assetsOther Plant Fixtures, Total

Interests in and FittingsLand and Machinery and

Buildings Equipment

£000 £000 £000 £000

Total Tangible Fixed Assets:Balance at 31 March 2005 706 210 185 1,101Additions - 26 2 28Disposals - - (53) ( 53)Balance at 31 March 2006 706 236 134 1,076

Accumulated Depreciation:

Balance at 31 March 2005 532 163 141 836Disposals - - (53) (53)Charge for the year 35 23 28 86Balance at 31 March 2006 567 186 116 869

Net Book Value at 31 March 2006 139 50 18 207

Net Book Value at 31 March 2005 174 47 44 265

Historic cost at 31 March 2006 1,076

I I

20


8 Analysis of fixed asset investments

8.1 Fixed Asset Investments:

Market value at 31 March 2005Less: Disposals at carrying valueAdd: Acquisitions at costNet gain on revaluationMarket value at 31 March 2006

Historic cost at 31 March 2006

2006 2005

£000 £000

80,950 73,509(16,012) (36,454)

10,844 36,29511,839 7,60087,621 80,950

53,320 51,149

8.2 Market value at 31 March :

Investment propertiesInvestments listed on Stock ExchangeInvestments in a Common Deposit Fund

or Common Investment FundCash held as part of the

investment portfolio

The Charity's investments are wholly held within the UK.

2006 2005

Total Total£000 £000

21,450 25,80062,291 51,864

753 623

3,127 2,66387,621 80,950

8.3 Analysis of gross income from investments

Investment propertiesInvestments listed on Stock ExchangeInvestments in a Common Deposit Fund

or Common Investment FundCash held as part of the

investment portfolio

Other investments

2005-06 2004-05

Total Total£000 £000

972 1,0531,120 1,194

23 21

59 82

34 38

2,208 2,388

The Charity's investments are held with 3 investment managers. Investments in individual entities held at 31 March 2006 which are

over 5% of the manager's po rtfolio by value are as follows:

Schroder Charity Equity Fund A Inc Units £ 6,141,974

Schroder UK Alpha Plus Fund A Inc Units £ 1,869,065

Schroder Charity Fixed Interest A Fund Inc Units £ 1,153,874

Schroder Alte rnative Diversified Fund le Units £ 1,341,916

Schroder Alte rnative Global Long/Sho rt Equity Fund le Units £ 1,197,509

Schroder Exempt Prope rt y Fund Units GBPIO £ 1,898,425

GAM Absolute Retu rn Strategy GBP £ 18,432,415

21


9 Details of subsidiary undertakingsThe Charity owns the whole of the ordinary share capital, consisting of2 ordinary shares of £I each, of QS Enterprises Limited.These shares were originally donated to UCL Hospitals NHS Trust Charity in 1997 which is now pa rt of University CollegeLondon Hospitals Charities.

QS Enterprises Limited provides medical services to patients of the National Hospital for Neurology and Neurosurgery. Thesubsidiary donates its taxable profits to the Charity each year by gift aid. During the year the Charity accrued for £1,361k gift aidfrom QS Enterprises Ltd, £ l,361 k of which is included in the subsidiary's creditors at year end.

QS Enterprises' trading results for the year ended 31 March 2006, as extracted from the company's audited fi nancial statements,were as follows:

9.1 Turnover

Administrative ExpensesOperating Profit

Other operating incomeInterest ReceivableNet Profit

Gift AidProfit on Ordinary Activities before Taxation

Taxation Charge/(Credit)(Loss)/Retained Profit for the year

Retained Profit brought forward

Retained Profit Carried Forward

9.2 The assets and liabilities of the subsidiary as at 31 March 2006 were as follows:

2006 2005

£000 £000

2,717 2,648

(1,469) ( 1,393)1,248 1,255

34 38

1,282 1,293

(1,361) ( 1,345)(79) (52)

9 9

(70) (43)

434 477

364 434

2006 2005£000 £000

Tangible AssetsCurrent Assets

Creditors falling due within one year

Creditors falling due after more than one year

Provisions for liabilities and charges

Net Current Assets

Represented By:

' Share CapitalProfit and Loss Account

207 2651,764 1,240

1,971 1,505

(1,583) ( 1,041)

(4) -(20) (30)

364 434

364 434

364 434

* The Share Capital has a nominal value of£2

22


10 Analysis of debtors10.1 Amounts falling due within one year:

Trade debtorsPrepaymentsAccrued incomeOther debtors

Total debtors falling due within one year

10.2 Amounts falling due after more than one year:Trade debtors .

Total debtors falling due after more than one year

Total debtors

31 March 31 March2006 2005

£000 £000

1,233 9836 34

201 751,205 5582,645 1,650

274 274

274 274

2,919 1,924

11 Analysis of cash at bank and in hand

Bank accountsMoney Market depositsSchroders deposits

Total cash at bank and in hand

31 March 31 March2006 2005£000 £.000

1,577 1,622800 -

2,100 -4,477 1,622

12 Analysis of creditors

12.1 Amounts falling due within one year:

Trade creditors

Other creditors

Accruals

Deferred income

Total creditors falling due within one year

12.2 Amounts falling due after more than one year:Accruals

Total creditors falling due after more than one year

Total creditors

31 March 31 March2006 2005

£000 £000

1,120 1,145271 250

7,450 6,432

8,841 7,827

84 188

84 188

8,925 8,015

23

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14 Notes to the Cash Flow Statement14.1 Reconciliation of cash flows from operating activities to net (outgoing)/incoming resources

Net (outgoing)/incoming resourcesDepreciation chargesDecrease/(increase) in stocksIncrease in debtorsIncrease/(decrease) in creditorsInvestment incomeCash outflow from operating activities

14.2 Analysis of changes in net cash

Cash in hand and at bankTotal

15 Commitments, liabilities and provisions

2006 2005£000 000

(3,713) 138886 87

10 (5)(995) ( '141)900 ( 2,510)

(2,208) ( 2,:388)(5,920) 4,669)

Balance Cash Balance31 March Flows 31 March

2005 2006£000 £000 £000

1,622 2,855 4,4771,622 2,855 4,477

The Charity has the following commitments: 2005-06 2004-05£000 £000

Committed Funds 31 March 1,357 3,718Unrealised and realised gains and losses 833 (83)Grants Payable in year (2,164) (2,278)

26 1,357

2005-06 2004-05£000 .£000

Payable in one year 26 64Payable after one year - 1,293

26 1,357

The Trustees recognise liabilities in the accounts once they have incurred either a legal orconstructive obligation to expend funds.

The above commitments relate to projects which the Trustees have agreed in principle to fund in future years: The Trustees use designated

funds to 'earmark' these future commitments.

16 Trustee and connected party transactions

16.1 Trustee expenses reimbursed 2005-06 2004-05

£ £

Travel and subsistence 1,454 1,3011,454 1,301

Total number of Trustees 6 6

16.2 Trustee remuneration

None of the Trustees received remuneration during the year (2004-2005: £nil).

16.3 Trustee Indemnity Insurance 2005-06 2004-05

£ £

Charge for the year 7,086 5,119

7,086 5,119

Description of cover:"The insurer agrees to indemnify the Trustees in respect of the Trustees' legal liability for loss and/or representation by reason ofany wrongful

act in capacity of the Trustees."

17 Material legaciesLegacy income is only included in incoming resources where receipt is reasonably certain and the amount known with certainty, or when the

legacy has been received. As at 31 st March the Charity had been notified of two material residuary legacies with an estimated combined value

of£1.25m which had not been accrued.

25


12. Independent Auditor's Report to the Trustees of University CollegeLondon Hospitals Charities

I have audited the financial statements of University College London Hospitals Charities for the yearended 31st March 2006 which comprise the Statement of Financial Activities, the Balance Sheet, the CashFlow Statement and the related notes. These financial statements have been prepared under the accountingpolicies set out within them.

This report is made solely to the Trustees of University College London Hospitals Charities in accordancewith section 43A ofthe Charities Act 1993. My audit work has been undertaken so that I might state to theTrustees those matters I am required to state to them in an auditor's report and for no other purpose. To thefullest extent permitted by law, I do not accept or assume responsibility to anyone other than the Trusteesof University College London Hospitals Charities for my audit work, for this report, or for the opinion Ihave formed.

Respective Responsibilities of Trustees and Auditors

As set out in the Statement of Trustees' Responsibilities, the Trustees are responsible for preparing thefinancial statements in accordance with applicable law and United Kingdom Accounting Standards (UnitedKingdom Generally Accepted Accounting Practice).

I have been appointed as auditor under section 43 of the Charities Act 1993 and report in accordance withregulations made under section 44 of that Act.

My responsibility is to audit the financial statements in accordance with relevant legal and regulatoryrequirements and International Standards on Auditing (UK and Ireland) issued by the Auditing PracticesBoard.

I report to you my opinion as to whether the financial statements give a true and fair view and are properlyprepared in accordance with the Charities Act 1993. I also report to you if, in my opinion, the Trustees'Annual Report is not consistent with the financial statements, if the Charity has not kept proper accountingrecords, or if I have not received all the information and explanations I require for my audit.

I read other information contained in the Trustees' Annual Report, and consider whether it is consistentwith the audited financial statements. I consider the implications for my report if I become aware of anyapparent misstatements or material inconsistencies with the financial statements. My responsibilities donot extend to any other information.

Basis of audit opinion

I conducted my audit in accordance with the Charities Act 1993 and International Standards on Auditing

(UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis,

of evidence relevant to the amounts and disclosures in the financial statements. It also includes an

assessment of the significant estimates and judgments made by the Trustees in the preparation of the

financial statements, and of whether the accounting policies are appropriate to the Charity's circumstances,

consistently applied and adequately disclosed.

I planned and performed my audit so as to obtain all the information and explanations which I considered

necessary in order to provide me with sufficient evidence to give reasonable assurance as to whether the

financial statements are free from material misstatement, whether caused by fraud or other irregularity or

error. In forming my opinion, I also evaluated the overall adequacy of the presentation of information in

the financial statements.

Opinion

In my opinion the financial statements give a true and fair view of the Charity's state of affairs as at 31st

March 2006 and of its incoming resources and application of resources in the year then ended and have

been properly prepared in accordance with the Charities Act 1993.

S r~ • C.. ~~~~ ~sS~ ~flSigned....... '..............~~~".°.n Date:.................. . ..... .

Susan M Exton Audit Commission (Operations Directorate)

District Auditor First Floor, Millbank Tower, Millbank, London SW1P 4HQ

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Documents

University College London...University College London Hospitals Charities ANNUAL REPORT and ACCOUNTS For the year ended 31 March 2006 Contents Page 1. Reference and Administrative