Annual Report and Financial Statements Year ended 31 July 2016 The Metropolitan University

Report of the Board of Contents Governors

3 Report of the Board of Governors 35 Corporate Governance Strategic review The Governors submit the 5 Introduction: Overview of Performance 40 Responsibilities of the Board of University’s annual report and Governors 7 Vice-Chancellor’s Foreword audited consolidated financial 42 Independent Auditor’s Report statements for the year 8 Our Approach ended 31 July 2016. 44 Consolidated Statement of 11 Our Staff Comprehensive Income The financial statements and Expenditure have been prepared to 13 Our Students comply with the Statement of 45 Consolidated and University Recommended Practice (SORP) 15 Our Research Achievements Statement of Changes in Reserves for further and higher 19 Our Achievements 2015/16 46 Consolidated and University Balance education institutions. Sheet 23 Our Engagement 48 Consolidated Statement of Cash Flows 25 Our Partners 50 Statement of Accounting Policies 27 Financial Performance and Sustainability 56 Notes to the Accounts

32 KPTs

33 Risks

2 | Financial Statements Financial Statements | 3 The Manchester Metropolitan University

37k+ Global students top 3% university Introduction: The appointment of Lord The University has a great Mandelson as the 4th deal to look forward to Overview of Chancellor of Manchester over the next 12 months. Metropolitan will enable the We have exciting plans University to better position to develop new institutes UK’s and extend its range of in sport, fashion and the Performance influence, both nationally environment. These will biggest 2nd and internationally. Lord bring together strengths, most applied Mandelson shares the creative distinctiveness, and riser University’s passion for enable us to deliver more. By to university education and research, and developing our partnerships, in Complete Over the past year, the he will be an outstanding nationally and internationally, University Guide advocate for us all. we will continue to innovate in the UK and drive ahead, with our University has welcomed Our outgoing Chancellor, sector-leading approach to Dame Dianne Thompson, degree apprenticeships being many high-profile visitors, will remain a firm friend and a perfect example. supporter of the University. Winner of including politicians, Her journey at Manchester Speaking on behalf of the business leaders and Metropolitan was truly Board of Governors, I am remarkable. I can think of deeply impressed by the Business 50%+ academics. They are no other individual who rose progress made over the last growth in from being a student, to staff year and the significant School member and, ultimately, opportunities that lie ahead drawn to Manchester to Chancellor at the same for us as an institution. I am professors institution. confident that the ambition of the Year Metropolitan because of of the new Strategic The University has since 2014 Framework will help steer sustained robust financial (Educate North Awards) its size, impact, location Manchester Metropolitan performance over recent through the rapidly changing years, with the key financial and achievements, and challenging times ahead, health indicators aligned enabling us to flourish to the upper quartile for and they leave with a regionally, nationally and Winner of the sector. The outcome globally. £139.1m stronger impression of of the Referendum on EU membership results in an Diverse the University’s strengths, increase in uncertainty in the cash and short term. However, the short-term Company distinctiveness and University has the ambition, resilience and nimbleness investments at Award for ambition. to adapt and thrive in an 31 July 2016 Education, 2016 evolving new landscape. Extending the numbers of international and postgraduate students will ensure that the University plays its part in enhancing Manchester’s reputation as a global city, characterised by innovation, creativity and entrepreneurship. These Vanda Murray OBE values define Manchester Pro-Chancellor and Chair of Metropolitan. Board of Governors

4 | Financial Statements Financial Statements | 5 The Manchester Metropolitan University

Vice-Chancellor’s We continue to make great the midst of a period of Foreword strides towards our goal of profound change, nationally becoming the best modern and internationally. Britain’s university in the UK. In decision to leave the EU will October 2015, The Times present a raft of challenges for Higher World University us, financial and otherwise. Rankings placed us in the Similarly, proposals in Over the past year top 3% of global universities. the Government’s Higher Later in 2015, we entered their Education and Research Bill I have been hugely list of the top 150 universities to open up the sector to new in the world under 50 years providers means we will face impressed by the old. Earlier this year, we even keener competition not only climbed 17 places for students, staff, funding energy, determination in the Guardian University and partnerships. All of Guide but were also the this is taking place against and spirit that I know fastest rising university in the a backcloth of continued Complete University Guide. economic uncertainty in is characteristic of our the UK. Every part of our University University community. has remarkable success But experience has shown stories to tell. These include that challenges bring I feel enormously the Business School of the with them exciting new Year award, the selection of opportunities, particularly proud of our numerous two of our sport scholars for for those institutions that the Rio Paralympics, major are agile enough to respond achievements, ranging grants in health and social swiftly to a changing care, research on long- landscape. Our ambition from excellence in lasting 3D-printed graphene remains undented; our batteries, and prizes in poetry commitment to excellence is education and research and creative writing. resolute. Our outstanding campus The quality of our research to professional service and landmark buildings and teaching, the diversity have also helped to establish of our provision, the delivery to ensuring that Manchester Metropolitan as commitment of our staff, the a go-to venue for hosting strength of our partnerships, our campus is vibrant, key national events and and our unrivalled location in initiatives. Manchester, all underpinned inspiring, attractive and by our new Strategic Sajid Javid, the then Secretary Framework, will empower of State for Business, well maintained. us to rise to the challenges Innovation and Skills, and respond positively to the launched a new national £10m many opportunities that lie degree apprenticeship fund ahead. here, we held a week-long programme of public events around Greater Manchester’s devolution opportunities, while former Prime Minister Professor Malcolm Press Gordon Brown visited the Vice-Chancellor University in June. Manchester Metropolitan We are undoubtedly in University

6 | Financial Statements Financial Statements | 7 The Manchester Metropolitan University

Our Approach

We are a great, modern university, in a great global Our strategic themes are the city, here to make an impact backdrop for our plans and on Manchester, our nation and strategies, setting the tone for beyond, with a driving ambition our approach. We will illustrate to discover and disseminate knowlege, and make higher them with compelling stories of education as accessible and our achievements, capturing beneficial to all those with the our strengths, firing the passion and ability to succeed. imagination of our staff, and inspiring us to ever greater We work closely with our city, success. Through them, we will Ambition Community with business, the community Setting the bar higher to make more of Making a contribution not just to one community, and our academic peers - locally, demonstrate the ambition, an impact. but to many. We are ambitious and happy to shout about it. Ambitious for our We are an active, energetic and engaged university, putting our nationally and internationally students. Ambitious for our staff. For our partners. And for creativity and impact that thinking and ideas, our research and knowledge to work in the ourselves as an academic institution. We expect a lot from real world. So our staff, students and alumni contribute not only - to be inventive and creative, everyone who studies and works here. Set high standards and characterise Manchester to the Manchester Metropolitan community, but to all the measure our success by the impacts we make academically, and generate great opportunities, and communities and lives we touch. enable our students, colleagues Metropolitan University. in business and society. and everyone whose lives we touch to make an impact.

Place Sustainability Partnership A university with all the drive and spirit of a Working hard now and in the future to help craft a Reaching out to push the boundaries of great global city. better world. the possible. You can feel the energy. In the place. In the buildings. In the Higher education exists in an increasingly dynamic, demanding Education, and particularly higher education, should always be students and staff. You can sense the determination to succeed. and competitive world, where to stand still is to go backwards. a collaborative process and here at Manchester Metropolitan our Manchester Metropolitan is a great modern university, in a great At Manchester Metropolitan, we have a conscious cultural world is enriched and our achievements made more effective global city, and we share the same drive and spirit to explore, commitment to maintaining our energy levels and continuing to through partnership at every level. create, invent, re-invent and make the world take notice. drive up academic and creative standards, achievements in research, and engagement in the community.

8 | Financial Statements Financial Statements | 9 The Manchester Metropolitan University

Our Staff People management Engage week 2016 offered excellence staff the opportunity to try Manchester Metropolitan or share something new, Our academic and is widely recognised for with 225 sessions run on its people management a wide range of topics. professional services excellence and was this year The programme has not named among Britain’s Top only offered an engaging staff are Manchester Employers for the second opportunity for personal year running by the Top development, it has had a Metropolitan’s greatest Employers Institute. This positive impact on health builds on last year’s double and wellbeing and helped asset. This has been an achievements of securing to foster a stronger sense of International Gold Champion community amongst staff at impressive year both for Investors in People and all levels. being the first university, Excellence in diversity in terms of significant and among the very first Our commitment and organisations worldwide, to ground-breaking approach to further investment in be recognised under the new diversity was recognised at 6th generation Investors in the Excellence in Diversity our people and in the People standard. Awards 2016 where we won the Diverse Company number of landmark Talented workforce Award for Education. The prestigious awards recognise Manchester Metropolitan achievements and employers who motivate, invests heavily in nurturing inspire and create equal talent, leading an extensive awards attained. opportunities for their and innovative programme employees. of staff development that includes our flagship Future The University has advanced Research and Knowledge its commitment to gender Exchange (RKE) programme. equality through the Athena The initiative - which SWAN Charter. We launched provides up to five years’ a Women’s Network on support to enable researchers International Women’s Day to generate significant RKE to provide support and income, lead research or networking opportunities knowledge exchange activity for women across all staff and teams - was held up groups. We also run women- only awareness sessions In recognition of our as an exemplar of cutting- commitment to support Winner of Disability edge personal development in pursuit of our goal to and advance the Standard Silver increase the number of Certified as a at Vitae’s Developing the representation of women Award and Winner of Top Employer UK. female professors at the in science, technology, 2013 Best Public Sector Next Generation of Research engineering, medicine Organisation Award. Leaders national event. University. and mathematics. Manchester Metropolitan is proud to be a Stonewall Collaboration, innovation Champion and has a growing and engagement community of LGBT role A strong commitment to models. The University sharing good practice and celebrated International Day collaboration spans all staff of Transgender Visibility We are one of only seven groups. The Summer Festival UK universities to have with a vibrant programme been awarded the Awarded Best of Learning and Teaching, of activities to celebrate the Investors in People University Catering encompassing more than Service 2014. lives and achievements of Gold Standard. One of the UK’s top three greenest universities. 50 events, offered an transgender people, and we inspirational month of CPD lead the sector in developing activities where staff came guidance to support trans together to share practice staff. and research.

10 | Financial Statements Financial Statements | 11 The Manchester Metropolitan University

Manchester Metropolitan Our graduates subsequently has grown to become one of leave Manchester Metropolitan the UK’s largest universities with the interpersonal, Our by total student numbers. problem-solving and technical Nearly 38,000 students are skills that today’s employers currently studying on one of demand. That 93% of Students our 1,000+ undergraduate, graduates * were in work and/ postgraduate, research, or further study ** six months professional or CPD after graduation is testament programmes. to the quality of this unique training ground. Our outstanding and As well as our impressive size, we are one of the most Our academic programmes inspiring new buildin- popular choices of university are underpinned by a in the UK. More than 60,000 commitment to widening gs, state-of-the-art students applied for an participation, not only undergraduate course for ensuring students of all facilities and first- 2016/17 entry, the second backgrounds have access to highest figure for any higher higher education but that class student support education institution in they are also given the skills the UK. and motivation to engage package enable us with all aspects of university life. to offer an unrivalled These applicants are attracted to Manchester experience to students. Metropolitan for a variety of Our outstanding and reasons. Employability is a inspiring new buildings, fundamental consideration. state-of-the-art facilities We work closely with and first-class student more than 70 professional support package – including bodies and associations to disability service advisers, accredit our courses and student support officers, to develop professional trained counsellors and pathways. Consequently, language support service for we offer access to one non-native speakers – enable 70+ 100+ of the widest choices of us to offer an unrivalled links with clubs and career options of any UK experience to students. professional bodies university. We have forged and associations societies for a formidable reputation for all activities producing graduates who *all first degree leavers, including those are work-ready, equipped who studied on either a full-time or with the skills required part-time basis. to hit the ground running **including full-time work, part-time in the modern workplace. work, full-time study, part-time study While they are with us, and those in both work and further Our students are many students take full study, calculated as a percentage of drawn from over advantage of valuable work those whose destination was known experience and other work- 26% and were available for work. of our students based learning opportunities arranged with local and are from black national employers. and minority 120 ethnic groups countries

12 | Financial Statements Financial Statements | 13 The Manchester Metropolitan University Our Research Achievements

People are at the heart of our Knowledge Transfer The quality of ambitions and we are assembling our research is a team of talented researchers who Partnerships (KTPs) will enable us to step up to the next articulated through level of Research and Knowledge KTPs is Europe’s leading programme for Exchange (RKE) aspirations and helping business to access cutting-edge distinctive areas of performance. We are investing in a research. KTPs help businesses to grow, high-profile scheme to recruit talented they help universities to develop impactful impact that help doctoral research students and more research and around 60% of the graduates established researchers into academic involved in the projects are offered us to stand out positions. We aim to develop a permanent jobs with the company. reputation for being a great place to The University is currently 6th in the UK from the crowd. start and pursue a career in research for the number of “live” projects. We are creative, and knowledge exchange. Whilst KTPs are traditionally associated Dr. Rob Drummond – with scientific disciplines, we have innovative and Senior Lecturer, Linguistics expanded our portfolio to include projects driven by a curiosity Rob exemplifies how the University in the arts, education, healthcare and the supports the growth of talented social sciences. for new ideas. researchers. Rob’s research into the impact Improving youth justice of multicultural urban youth language Our confidence is on social change was assisted with the Our partnership with Manchester’s youth award of an RKE Research Accelerator justice services has the potential to make matched by our Grant that enabled Rob to find the time a sustainable impact on the lives of young and space to win a prestigious two-year people. The £120,000 project is improving achievements: we Leverhulme Trust project. Over the last the link between theory and practice and year, interest in the impact of Rob’s work developing new approaches for engaging are the top modern has spread widely and he has featured with young people. Funded by the Arts university for the on BBC Breakfast TV, Radio 5, the World & Humanities Research Council and the Service and in the Independent to discuss Economic & Social Research Council, the power of research this and other issues around language and KTP is led by Graham Smyth, Dr Hannah society. Rob has now been identified as an Smithson and Dr Magdalena Bober. RKE Future Leader and is taking part in an in allied healthcare Big data in the intensive staff development scheme that pharmaceutical industry disciplines and we is designed to embed a culture of research leadership across the University. Manchester Metropolitan and Astellas have outstanding Pharma Europe are collaborating on a Professor Alice Kettle – £320,000 project that is helping to identify 6th in the UK 85% research in Professor of Textile Art of the impact of our research 17th groups which have the highest unmet for Knowledge Transfer is rated world-leading and for Education research Alice’s work showcases the ways in medical needs. By analysing ‘big data’ Partnerships biomedical science, which we make a high-quality cultural in the anonymised patient records, the internationally excellent (source: 2016 Complete impact with our research. One of many project provides ‘real-world’ evidence to (source: Innovate UK) University Guide) education, sociology, (source: REF2014 data) highlights saw Alice combine the worlds enable GPs to recommend treatments that poetry, and art and of engineering and art as she was will have a dramatic impact on patients’ commissioned by Lloyd’s Register to create quality of life. a major new textile at the heart of the design. The project is led by Dr. Francis Fatoye Global Technology Centre in Southampton. The top from the Research Centre for Health: The piece, named “A Map to the Future”, Disability, Ageing and Wellbeing. is an 8m by 3m embroidery that fuses the ‘modern’ skill of “painting with thread” with digital stitching to create something that has the university intensity of a watercolour. The work was Top 20 6th in the UK given a royal seal of approval when the in the UK for for the power of for ‘power’ in allied building was opened by Princess Anne. Art and Design research Sociology research health research (source: REF2014 data) (source: REF2014 data) (source: REF2014)

14 | Financial Statements Financial Statements | 15 The Manchester Metropolitan University Our Research Achievements In the past year the Substance use researchers partner Thinkers. She is one of just 10 academics International charity in ground-breaking study selected each year to be part of this value of our RKE awards Professor of Adult Social Care, Sarah highly prestigious project, backed by Funding Success Galvani, is leading the first UK study into the BBC and the Arts and Humanities Research Council. Louisa will work • We are participating in substance problems in palliative and end-of- with a team from the BBC to produce a has risen by 37% international projects that have life care. She will work alongside a range of documentary for broadcast. secured in excess of €70 million charities on the research, which is funded in funding from the European through a £425,000 Big Lottery Grant. University aviation experts play Commission and other funders. Speech and language aids help key role in combating climate • We are participating in research children express thoughts and change Aviation emissions expertise from two and innovation projects feelings Manchester Metropolitan scientists has Dr. Janice Murray is leading an £800,000 funded through the European been instrumental in developing the three-year National Institute for Health Union’s Seventh Framework first ever global CO2 emissions standard Research project to develop new clinical and Horizon 2020 project with for aircraft to combat climate change. techniques to improve the way that a value to the University in the Working alongside industry partners communication aids are prescribed to region of €4.5 million and regulators, Professor David Lee and children with limited natural speech. • European researchers are using Dr Bethan Owen from the University’s ‘Silent Talker’, a revolutionary £15 million CityVerve project Centre for Aviation provided expertise for the new standard, which won praise from lie detector developed by explores “Internet of Things” UN Secretary General Ban Ki-moon and members of the University’s Researchers from the School of is estimated to save 650 million tonnes of Informatics Research Centre, to Architecture are working alongside CO2 by 2040. improve the operation of border engineers and computer scientists to controls. enable Manchester City Region to make Transforming UK high streets ‘smart’ improvements to its services Researchers from the Institute of Place • Members of the Centre for to residents, using technology such as Management are using Big Data to Business and Society are sensors and data analysis. The CityVerve improve consumer experiences of the working with colleagues Project uses the Internet of Things (IoT) retail environment. Professor Cathy Parker on initiatives to promote to revolutionise transport systems, energy is leading Manchester Metropolitan’s responsible research and efficiency and community engagement. contribution to the £550,000 Innovate innovation, creating roadmaps UK-funded project. The research builds on for large Research and British Art Show Success for the impact of previous ground-breaking Technology Organisations and Eileen Simpson work which found that local decision creating a dialogue between the Work by a making, rather than the Internet, is the major factor in the decline of high streets. biomedical industry, researchers lecturer is currently on show in one of the and the public. country’s most prestigious international Postgraduate research boost to contemporary art exhibitions. Eileen Team GB’s medal chances • Through a range of European- Simpson has collaborated with Ben White PhD student Ian Britton is the funded training initiatives we for the British Art Show with a piece, performance analyst for the GB are supporting international titled Auditory Learning, which features wheelchair rugby team and supported researchers to start and eight modified turntables playing a new them during the Rio Paralympics. Ian establish research careers in composition assembled from notes taken provides films and expert feedback that the UK in areas as diverse as from popular chart hit singles from 1962. enables coaches to analyse “turnovers” – historical concepts of luxury the point in a match where one team wins Poet leads national possession of the ball from the other. and modelling of complex social commemorations into IRA bomb networks; human movement Ian’s interest in performance analysis was Award-winning Professor of Poetry and green chemistry; and land sparked after studying a module for his Michael Symmons Roberts hosted an degradation and visualisation of undergraduate degree in Coaching and important Radio 4 show 20 years on Sports Development. complex biological systems. from the IRA bomb that destroyed a large section of Manchester’s city Sustainable design £10 million Ambition for Ageing centre in June 1996. Professor Symmons Professor Martyn Evans is participating in Roberts explored the massive and rapid a £570,000 AHRC-funded investigation into £4.5m Dr. Stefan White from the Manchester regeneration of the city following the the link between design and sustainable awarded in School of Architecture is working with 40% explosion on the national radio show. innovation. The research has resulted in the Southway Housing Trust on a five- international of our research first holistic overview of how design can 750 year, £10m project to make cities and research projects in outputs involve global partners in Louisa identified as a New lead to behaviour change and provides an neighbourhoods more ‘Age Friendly’. past year international partners last three years Generation Thinker important basis for the transformation of Ambition for Ageing is funded by the Big Dr Louisa Uchum Egbunike, a specialist sustainable practice by public and private Lottery. in Nigerian literature, has been named sector bodies and particularly small-to- as one of the BBC’s New Generation medium-sized enterprises.

16 | Financial Statements Financial Statements | 17 The Manchester Metropolitan University BUSINESS Our of the SCHOOL YEAR Achievements 2015/16/16

IntroManchester text... Top honour for leading poet Award recognises youthful The Poet Laureate and Creative Director ambition BUSINESS % in the Metropolitan and of the Manchester Writing School, Manchester Metropolitan University was Professor Dame Carol Ann Duffy, has recognised as one of the best young its staff, students been named an Honorary Fellow of the universities in the world for the first time. British Academy. SCHOOL TOP World and alumni The University earned a place in the After gaining international5 AACSB accreditation, Carol Ann, Professor of Contemporary respected Times Higher Education’s 150 have enjoyed an Poetry at Manchester Metropolitan, Under 50 rankings. the hallmark of excellence in business education. was recognised by the Academy for her Manchester Metropolitan University is outstanding contributions to the creative extraordinary year the UK’s biggest riser in the Complete subjects. University Guide (CUG) 2017 rankings. of success. Here She has spearheaded a number The University climbed 16 places - the of flagship projects, including the are just some largest rise of any university in this Manchester Children’s Book Festival year’s table – establishing Manchester and the Mother Tongue Other Tongue of the landmark Metropolitan as one of the best in the poetry competition, as well as winning region. achievements numerous literary awards such as the we celebrated Costa Prize and the PEN/Pinter Prize. Minister applauds University’s Business School celebrates trailblazer for apprenticeships together. double success The then Secretary of State for Innovation and Skills praised the pioneering Manchester Metropolitan University degree apprenticeship programmes at Business School (MMUBS) celebrated Manchester Metropolitan after launching a double success with two prestigious a new nationwide £10 million degree awards. apprenticeship fund. MMUBS joined an elite group made up Sajid Javid MP found out about the of the top 5% business schools in the impact of the flagship scheme when he world after gaining international AACSB met apprentices and employers at the accreditation, the hallmark of excellence University’s Business School. in business education. Manchester Metropolitan was one of the MMUBS also fought off stiff competition first universities in the UK to offer degree to be named the Business School of the apprenticeships. Year in the North at the Educate North Our Degree Apprenticeship in Ranked in the world’s Awards, which celebrate, recognise and share best practice and excellence in the Digital and Technology Solutions top 150 universities education sector in the region. is delivered in partnership with under 50 years old leading industry partners that include Lecturer in a class of her own Barclays, AstraZeneca, Lloyds and Senior lecturer Fiona McEwen was Thales alongside a range of small and named lecturer of the year at the leading medium-sized businesses in the region. accountancy training industry awards. Apprentices span a broad age spectrum, from 18 to 45. Owing to the programme’s Fiona, from the Department of success, the University now also Accounting, Finance and Economics offers the Chartered Manager Degree (AFE), was honoured with a PQ Apprenticeship, and continues to deliver Professor Dame Magazine award, the UK’s leading apprenticeships in Chemical Science and publication for part-qualified accountants. Legal Services. Carol Ann Duffy named an One of the first Honorary Fellow universities in the of the UK to offer degree British Academy apprenticeships

18 | Financial Statements Financial Statements | 19 The Manchester Metropolitan University RECORD Our BREAKING Achievements 2015/16/16 Gold Medals Filmmaking graduate Paralympic selection leads University makes huge strides in 14 Thomas Payton-Greene to cycle of success student experience survey Dame Sarah Storey Two of our talented students were Manchester Metropolitan has jumped selected for the Rio Paralympics. 15 places in this year’s Times Higher WINNER Between them they went on to win a Education (THE) Student Experience of the film category at the 2016 clutch of medals, set new world records Survey – marking the second successive Deutsche Bank Awards for and earn a place in the history books. rise up the table. Creative Enterprise Physiotherapy student Kadeena Cox, Students were asked to rate the who has multiple sclerosis, achieved gold University’s performance across a in the women’s C4-5 500m cycling time number of key areas, including the trial, setting a new world record in quality of staff and lectures, extra- National the process. curricular activities and support and Kadeena also secured a bronze in welfare. the 100m T38, becoming the first Art Prize Mastering the art of winning Paralympian to win medals in two different sports at the same Games A student from Manchester School of Art since 1988. has won a £20,000 national art prize. Sport scholar Helen Scott, 26, a tandem Rebecca Halliwell-Sutton also picked up £20,000 pilot to the visually impaired cyclist studio space for 12 months at BALTIC To a student from Sophie Thornhill, bettered her London 39, Newcastle, for winning the Woon Manchester School of Art 2012 silver and bronze with a gold in Foundation Art and Sculpture Prize. the Women’s B kilo, earning her a new Paralympic record. She and Sophie also Designing a dress to impress picked up a bronze in the 3km individual Fashion Design Technology student Manchester School of Architecture pursuit. Eppyar Hunt was the winner of the The University also celebrated road national Jigsaw Award organised by the and track cyclist Dame Sarah Storey’s British Fashion Council. TOP TEN record-breaking 14th gold Paralympic Eppyar designed an iconic silk dress that medal after providing specialist training will go into production and feature in IN THE WORLD support. to study architecture Jigsaw store windows. Top ten ranking for School of Creative filmmaker enjoys Architecture the limelight Manchester School of Architecture has Filmmaking graduate Thomas Payton- been named as one of the top ten places Greene was announced as the winner of to study architecture in the world. the film category at the 2016 Deutsche The School, a collaboration between Bank Awards for Creative Enterprise. Manchester Metropolitan and The Thomas’ film proposal, Samaanata, is a University of Manchester, is one of just social impact documentary about the root three UK institutions to make the top ten causes of gender-based violence. It will in the QS Top Universities 2016 rankings be shot in India and screened alongside for the subject, along with University workshops and panel debates to incite College London and the University of long-term social change in both India Cambridge. and the UK. He received a prize of £10,000 plus year- long business mentoring from a Deutsche Bank executive and two days of business training to launch his career.

20 | Financial Statements Financial Statements | 21 The Manchester Metropolitan University

Birley is the University’s community woodland areas flagship community campus. at Manchester Campus- Cited by the Higher Birley. The community spaces Education Funding Council have led to the delivery for England (HEFCE) as an of a community outreach More than st UK exemplar of regeneration, programme, including sustainability and community volunteering days, skills university engagement, it is fast workshops and harvesting 23% becoming a beacon for events. reduction in our to achieve the new raising aspirations in both 1,000 Environmental carbon emissions local people used International Environmental the local community and the Sustainability Management System wider area. since 2005/06 our facilities The campus is an Community engagement outstanding showcase of the In October 2015, the University’s environmental University delivered a large- and sustainability credentials. Our scale community event Some of the highlights of the to showcase our positive past year include: Engagement engagement work and to • We were the first UK reach out to members of university to achieve the new the community who would International Environmental not consider Birley, and the Management System university more widely, as standard ISO 14001:2015. accessible to them. • We have remained in the Engagement has always A 12-month programme top three universities for our of activity followed that environmental performance been an integral and was shaped and delivered in the People and Planet in partnership with the University League. community. This included successful part of the ten community events that • We achieved ‘Go Ultra together reached over 1,600 Low’ status in 2016, Manchester Metropolitan visitors. For a number of recognising the introduction these events we sought of low emission fleet vehicles. University story. to maximise our reach by Our operational fleet now collaborating with other contains 13 low emission flagship engagement vehicles, equating to 43% of From public access to activities, including a poetry our fleet. event with the Manchester • We have reduced our research, knowledge Children’s Book Festival and carbon emissions by 23% a world family picnic with since 2005/06 despite an exchange, facilities, Manchester European City of increase in residential space widening participation and Science 2016. and longer opening hours. We have actively encouraged • 66 of our students became student engagement, our local community use of our Carbon Literate certified, outstanding facilities at meaning they understand offer is extensive. Birley and take up continues climate change, can to rise. Since October 2015, encourage behaviour change more than 1,800 members in others and take steps to of the local community have reduce their own carbon accessed these facilities for footprint. meetings or events and we • We increased waste have provided more than recycling by more than 6% 300 hours of free usage to in 2015/16 over the previous local groups and third sector year after introducing food organisations. recycling in our catering In addition to activity led by kitchens and halls of the community engagement residence. programme, the two faculties • Alongside the Faculty of at Brooks have organised Science and Engineering, over 25 public events during we have supported the 2015/16. The Manchester development of the Waste Metropolitan Environment to Resource Innovation Team, working in partnership Centre to deliver research with Community and consultancy work with Garden Centre, staff, industry, worth in excess students and local volunteers, of £400K over four years have planted a community and supporting two PhD orchard and developed two programmes.

22 | Financial Statements Financial Statements | 23 The Manchester Metropolitan University We are celebrating the Manchester City FC College of African Our 10-year strategic Wildlife Management, 25th anniversary of a partnership with Manchester Tanzania City FC continues to flourish, The University’s long- through a range of research standing partnership with Our projects and impactful partnership between the College has resulted community engagement in an impressive body of initiatives. staff and student research. Partners Undergraduate and our School of Law and We are supporting MCFC with studies into a range postgraduate students in of areas, including the the Division of Biology and HKU Space. future of retail, innovative Conservation Ecology have practices in architectural the opportunity to undertake Manchester Metropolitan design, and innovation in fieldwork or project work sport science. We have in Africa. Discussions actively pursues and also worked with players are also underway over to promote language skills the development of a nurtures strategic in schools. Our partnership new collaborative MSc partnerships that open also brings opportunities programme in African for our students to develop Wildlife and Ecology up new possibilities for their learning through Management, thought to guest lectures, student be the first UK award of leading-edge research, projects, volunteering, and its type. Fundamentally, work experience as well the partnership will enable scholarship and enterprise as intern and employment postgraduate students to opportunities. access research facilities in on a local, national and some of the most high-profile Visionary Sports and prestigious wildlife sites international level. Investment in the world, including the Serengeti National Park and The University has an These partnerships bring the Ngorongoro Crater. emerging partnership multiple benefits to the with Visionary Sports Hong Kong University Investment (VSI) with SPACE University. Not only do whom we launched a UK The partnership between first - a Master’s in Sport HKU SPACE and the School they unlock new revenue Directorship. of Law for the joint delivery streams, they extend the The degree - backed by an of the Graduate Diploma in exclusive advisory board of Law and LLB (Hons) English University’s reach into the sporting and business alumni and Hong Kong Law dates drawn from the England back more than 25 years global research community, and Wales Cricket Board, and continues to develop. A the Professional Footballers’ new LLM for Joint Delivery shape academic Association and the Institute was recently approved and, programmes in line of Directors - is aimed at from January 2017, two of our people who are looking to existing awards - BA (Hons) with industry needs and take the next step in the Retail Management and industry as Directors of Sport. Marketing and MSc Digital enhance the employability Marketing Communications First City University - will be delivered by and social mobility of our College, Malaysia Manchester Metropolitan We are working in partnership staff at HKU Space, students. with the First City University supported by the learning College, Malaysia, to develop resources of the University’s three new Undergraduate Moodle platform. Dual Awards in Graphic Design, Interior Architecture and Design and Furniture Product and Design. The programmes will be considered for approval during 2016/17, for student intake in September 2017.

24 | Financial Statements Financial Statements | 25 The Manchester Metropolitan University

£28.3m £298.0m 7.3% Surplus before other Total income Income growth gains (losses) for the year Financial Performance and Sustainability

Income and Expenditure £46.5m £139.1m Results for the Year 2015/16 2014/15 Variance £000 £000 £000 £378.9m Net cash inflow from Cash and investments The University continues Total reserves operating activities at 31 July 2016 to deliver robust financial Income 297,976 277,831 20,145

performance with Expenditure (269,697) (267,825) (1,872)

key financial health Surplus before 28,279 10,006 18,273 performance indicators gains/(losses) at (or above) the sector Gain on disposal of 10,360 8,560 1,800 upper quartile, building fixed assets Share of operating deficit in (31) (5) (26) upon strong financial joint venture

management in recent Share of operating surplus 14 19 (5) years. in associate Surplus before tax 38,622 18,580 20,042

Balance Sheet

Results for the Year 2015/16 2014/15 Variance £000 £000 £000

Fixed assets 440,932 451,047 (10,115)

Cash and short-term 139,125 97,676 41,449 investments

Cash generated from 46,509 38,893 7,616 operating activities

Total reserves 378,918 359,432 19,486

26 | Financial Statements Financial Statements | 27 The Manchester Metropolitan University

The key movement in income and Income analysis Expenditure analysis expenditure as follows: Financial Performance and Sustainability

5% Depreciation 9%9% F undingFunding body body grants grants

11%11% Other Other income income 33% Other operating expenses

2% Interest and other finance costs Funding body grants fees and education contracts Tuition and contracts grants Research Other incomes (including Endownment and Investment) costs Staff expenses Other operating Depreciation and other finance co sts Interest 2%2% Research Research grants grants and and contracts contracts 25 78%78% Tu Tuitionition fees fees and and education education contracts contracts 60% Staff costs

20

Income - Year-on-year growth £20.1m (7.3%) Expenditure - Year-on-year growth £1.9m (0.7%)

15 Growth in tuition fee income Research grants and Staff costs of £160.3m in the opportunities to students of £23.5m, 11.2%, in the year contract income (excluding year (an increase of £8.0m from lower income families. to £233.0m, recognises the Research and Development year on year) equates to Additional planned popularity of the University Expenditure Credit (RDEC)) 53.8% of income, compared investment in IT software 10 in the student recruitment shows a year-on-year with 54.8% in the prior year. and hardware of £1.2m market. The material improvement of £0.7m, The increase in employment compared to 2014/15 was increase in income reflects (12.6%), to £6.1m in 2015/16. costs being the result of allocated to help transform both the shift in funding While the increase is largely the University’s continued 5 the facilities available from Funding Body grants driven by an uplift in the investment in student-facing for students and staff. to tuition fee, and strong volume of research grants, academic and high-profile Maintenance cost increased demand. the potential for further research staff, and pay by £1.3m on the prior year, growth will be enabled inflation arising from national 0 The reduction in funding helping to ensure that the by ongoing investment in pay settlements and pension body grants by £6.6m, estate is continuing to recruiting high-performing contribution changes. 20.3%, to £26.1m, is adapt to accommodate the research staff, enhancing consistent with the sector Other Operating Expenses future needs of students and the quality and number of (5) trends, and demonstrates includes internally staff, whilst improving the researchers at the University. the shift in funding to tuition funded bursaries and the environmental sustainability fees that has been taking University’s Student Support and impact of the University. place since 2012. The growth Package, and totals £11.2m (10) in other income by £3.0m, in the 2015/16 financial Key Income and Expenditure Movements 10.5%, is primarily a result year. This sector-leading Compared to Prior Year - £m of an increase in residences Student Support Package is income. awarded to provide widening access and participation

28 | Financial Statements Financial Statements | 29 The Manchester Metropolitan University

Other gains Net cash Cash resources (investments and cash and cash equivalents) stand at a healthy £139.1m at 31 July 2016, with year-on- The sale of our site, as part of the University’s campus The University aims to generate healthy operating cash year growth driven in large part by the strong operating consolidation strategy, has resulted in £10.4m of exceptional flow levels (2015/16: £46.5m) to fund the future long-term Financial investments, whilst still maintaining financial KPTs. performance and capital receipts. External borrowing has profit for the University, and generated initial cash receipts of reduced by £2.8m year on year as a result of scheduled £4.6m in 2015/16. An anticipated £14.8m (£9.9m for part A, and The graph below charts net liquidity days over the past 6 capital repayments. Performance and £4.9m for the subsequent part B of the development) of further years; a period in which 87.7% of a £350m capital programme staged payments are planned to follow over the next three years, was self-funded. Net liquidity days has increased from 143 The graph below charts debt levels relative to cash over as the development of the Didsbury site progresses. This will days in 2014/15 to 199 days in 2015/16. the past 6 years and demonstrates that the University is in Sustainability help to fund the next phase of our capital and estate investment. positive net funds throughout the period.

£m Fixed assets - Year-on-year reduction £10.1m (2.2%) £m 160 250 During the year the University acquired the Platt Lane sporting 237 140 facility for £3.1m, whilst disposing of part of the Didsbury 138.3 139.1 200 120 campus (£4.0m), and accelerating the depreciation on some 186 199 199 117.4 Campus residences facilities (£1.7m) which are no 150 100 143 longer in use by the University. 105.6 96.7 100 80 100 The Estates Strategy, and underpinning masterplan, is now 60 50 in the process of being updated to ensure alignment with the 75 62.2 emerging academic priorities established by the new Strategic 40 0 Framework. The University is particularly conscious of the need 20 for its built environment to remain fit for purpose, affordable and 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 0 adaptive to the University’s future needs, and within the context Liquidity Days of a potentially fast changing HE sector landscape. 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

A finalised Estates Masterplan programme to 2026 (informed Total cash External borrowing by the current review and update of the Estates Strategy) will progress through the University’s Governance process, with Board consideration anticipated late Autumn 2016. A funding/ financing strategy is being developed in parallel over the next six months. Much will depend upon the scale, pace and mix of IAS 19 pension liability reflecting a year-on-year movement in 2014/15 primarily reflects a lower Estate investment activity in determining the optimal funding The valuation of the Greater of £25.1m. This valuation movement discount rate that has been applied to strategy for the University. However, the University’s financial Manchester Pension Fund on an IAS reflects the inherent volatility of the determine the present value of Pension strength ensures that there is a good range of options available 19 accounting basis as at 31 July pension valuation, and the significant liabilities. to fully fund, without taking undue and significant risk. 2016 has given rise to a net deficit sensitivities around key assumptions; of £132.9m (2014/15 deficit £107.8m), in particular, the negative movement

Trade and other receivables - Year-on-year growth A summary of the key IAS 19 sensitivities is as follows: £9.9m (98.0%) Change in assumption at Approximate % Approximate Payment for the sale of the Didsbury part A site is received in 31 July 2016 increase to liability monetary value £m instalments, with an amount of £9.9m recognised within Trade and other receivables to reflect the future instalments associated 0.5% decrease in the real discount rate 11% 48,173 with the ongoing development of the Didsbury site.

1% increase in member life expectancy 3% 12,872 Total reserves

Total reserves continue to grow, currently at £378.9m (2014/15: 0.5% increase in salary increase rate 3% 14,078 £359.4m), attesting to solid financial health the University has generated and maintained year on year. Coupling the reserve position, positive net cash and healthy surplus demonstrates the 0.5% increase in the pension increase rate 8% 33,036 financially sustainable way in which the University is managed and this will allow continued investment in students, staff and facilities in support of its strategic priorities and goals and its continued development.

30 | Financial Statements Financial Statements | 31 The Manchester Metropolitan University

Key Performance Targets In respect of Institutional some 10% of annual income. The Higher Education and financial sustainability of Sustainability, targets have This cash flow metric is a Risks Research Bill is currently the University’s Cheshire (KPTs) progressing through campus; this review is been established for: rolling average to remove Parliament. The Bill will expected to conclude during • Financial Sustainability the inherent volatility from looking at this measure based introduce a Teaching the 2016/17 financial year. Excellence Framework (TEF), • Environmental on just one single year of Key to growing reputation and will permit inflation- Sustainability performance, and is weighted There are a number of risks and will be strong performance linked fee increases from A refreshed set of Key • International Demand to look at forward trends and in the three metrics that challenges for the sector that 2017 onwards. It will also outlook rather than historic will inform the TEF, namely Performance Indicators (KPIs) and • Income Diversity prescribe regulatory and performance. The target of threaten ongoing real-term income student progression, student governance changes for targets have been developed, A basket of indicators are 10% is based on a level of satisfaction and graduate growth. The UK’s decision to leave universities, and open up the set out within the supporting resource generation that is prospects. The University to better enable the University market further to new higher (enabling) University deemed appropriate to: the represents is placing significant focus to track its progress against Financial Strategy. These education providers. • Support working capital a significant external threat to on those areas, informed indicators focus on operating the themes and priorities that needs Within the context of by a Strategic Framework, performance, liquidity, universities. There is the potential the challenging external that is shaping our ambition are enshrined within the new diversity of income streams, • Provide a defence against for an exit to impact adversely environment, the University and instilling a strong Strategic Framework. These contribution from activities, unforeseen circumstances has already embarked upon level of confidence that the cash flow and borrowing. • Support inward investment on the ability to attract funds plans to grow and diversify University can thrive. KPIs have particularly focused The super ‘Key Performance for EU Research programmes, to its income to support • Engage in strategic Cost pressures, particularly in Target’ (KPT) is to generate its academic ambitions, on the strategic priorities for opportunities on a reduce opportunities for inward the staff cost base taking into on a rolling six-year average and to reduce its current risk-informed basis account national pay rises, delivering our mission in the (two years actual and four investment and materially affect reliance upon Home and incremental progression years forecast), net cash flow EU full-time undergraduate the free movement of staff and investment, requires areas of Education, Research from operating activities of income. There has been the University to continue and students. The sector, via recent success in growing and Knowledge Exchange and to prioritise and drive value KPT Target 2015/16 2014/15 income streams from non- Universities UK (UUK), is being for money. The University Institutional Sustainability. traditional routes in areas of has had a good record of (i) 6% (i) 7.6% (i) 8.4% very proactive and engaged distance/online learning and delivering efficiency from Surplus as a % of (5 year degree apprenticeships. In with the UK Government with a its campus consolidation, total income average) respect of non-UK income, centralisation of a number narrative around how universities the University plans, from of Faculty support functions, (ii) >3% in (ii) 9.5% (ii) 3.6% a relatively low base, can contribute to a better ‘post- and development of its any one year to add to international procurement function; Brexit world’. The University is student numbers, and is however, opportunities Net liquidity (days) >75 days 199 days 143 days not, relative to the sector, unduly confident of being able remain to generate synergies, to increase its market reliant upon EU funds and tuition enhance productivity and External borrowing as <20.0% 12.4% 14.4% share notwithstanding the deliver cost savings. % of total income fees at present; however, the competitive environment. In conclusion, the University University has ambitions and An undergraduate portfolio (i) Annual (i) 15.6% (i) 14.0% is well placed to respond review is underway that Net cash inflow from basis plans around growth in its income to the sector risks and will allow the University to operating activities challenges, it has genuine streams from non-UK sources. ascertain areas of strength as a % of total income (ii) 6-year (ii) 12.7% (ii) 12.8% opportunities to grow and that can be grown and average* diversify its income base, areas where contraction basis (>10.0%) and has a healthy financial and disinvestment might position from which to invest be necessary. A strategic Staff costs as a % of <57% 53.8% 54.8% for growth and to adapt and review is also underway total income disinvest where appropriate. to assess options to * The 6-year average during the period 2009/10 to 2013/14 is reported using improve the academic and performance under UKGAAP, and 2014/15 to 2015/16 under FRS102.

32 | Financial Statements Financial Statements | 33 The Manchester Metropolitan University

Corporate Members of the University’s Register of Interests Board of Governors are the The University maintains Charity Trustees and are a Register of Interests Governance responsible for ensuring of Governors and senior compliance with charity law. managers, which is The charitable purpose of available for inspection on the University, as defined in request to the Clerk to the the Charities Act 2011, is the Board of Governors. A list advancement of education of Governors and senior for the public benefit. The Manchester managers who served during Metropolitan University The University’s framework the financial year, and of governance is established until the date the financial is a higher education in the Instrument and statements were formally Articles of Government, approved, can be found on corporation established which are approved by the pages 78 to 79. Privy Council. The University under the provisions of Summary of the is committed to exhibiting University’s Structure of the Education Reform Act best practice in all aspects Corporate Governance of corporate governance. It 1988. The University is aims to conduct its business The Board of Governors is also an exempt charity in accordance with the the governing body of the principles identified in the University. The Board’s under schedule 3 of the Committee on Standards responsibilities are set out in Public Life (selflessness, in the University’s Articles Charities Act 2011, with integrity, objectivity, of Government, the Scheme the Higher Education accountability, openness, of Delegation and the honesty and leadership) Memorandum of Assurance Funding Council of and with the Committee and Accountability between of University Chairs (CUC) HEFCE and Institutions. England (HEFCE) acting as Higher Education Code of The Board’s responsibilities its principal regulator. Governance. In adopting include determining the the HE Code of Governance, educational character and the University has reviewed mission of the University, its governance practices approving annual estimates and is satisfied that it fully of income and expenditure, complies with the seven ensuring the solvency of primary elements contained the University, safeguarding in the Code. the University’s assets, appointing the Vice- As part of the commitment Chancellor, Clerk and to Public Life and best external auditors and putting practice, the University’s in place effective systems of Trustees/Governors have control and accountability. regard to and comply with the Charity Commission’s In accordance with the general and supplementary University’s Instrument guidance on the public of Government, the Board benefit in exercising their of Governors comprises powers and duties. predominantly independent members, together with

34 | Financial Statements Financial Statements | 35 The Manchester Metropolitan University

the Vice-Chancellor and The Board has a number Deputy Vice-Chancellor Governance Committee is regularly report to the Board, supports the achievement of members of the staff and of Committees to help it and the Director of Finance responsible for: making recommendations as policies, aims and objectives, whilst safeguarding the Corporate student bodies. The roles discharge its business attend all Audit Committee • advising the Board appropriate. In addition, the public and other funds of Chair and Deputy Chair effectively. These are meetings although they on the appointment Audit Committee produces and assets for which it is are separated from the currently as follows: are not members of the and reappointment of an annual report, which is Committee. There are also also sent to HEFCE. The responsible, in accordance Governance role of the University’s • Audit Committee Governors; Chief Executive, the Vice- opportunities for the internal Vice-Chancellor provides with the responsibilities Chancellor. • Finance and Resources and external auditors • ensuring arrangements are an update on University assigned to the Governing Committee to meet with the Audit in place for the induction business and sector issues Body in the Instrument The Vice-Chancellor and ongoing development • Nominations and Committee for independent at each Board meeting and and Articles and the has responsibility to the of Governors; Governance Committee discussions without any of members of the University Memorandum of Assurance Board of Governors for the University’s management • ensuring arrangements are Executive Group also attend and Accountability with the organisation, direction • Remuneration being present. The Audit in place for monitoring the Board meetings to answer HEFCE. and management of the Committee Committee met four times effectiveness of the Board. any questions that may arise. University. He is also the The system of internal control These Committees during 2015/16. designated Accountable The Nominations and In accordance with good is designed to manage, meet regularly and have Officer for the purposes The Finance and Governance Committee met practice/CUC guidance, rather than eliminate, the clearly defined, delegated of the Memorandum Resources Committee is two times during 2015/16. the Board of Governors risk of failure to achieve responsibilities. responsible for: periodically reviews its of Assurance and The Remuneration policies, aims and objectives. The Audit Committee is own effectiveness. The Accountability between • considering, advising Committee is responsible It can therefore only provide responsible for: last reviews took place in HEFCE and Institutions. or determining, as for: reasonable and not absolute The Vice-Chancellor is appropriate, the strategies November 2010 and August assurance of effectiveness. • reviewing the audit • making decisions on supported by a University and policies for the 2015. A review of the issues relating to the behalf of the Board on the The system of internal control Executive Group effective and efficient interrelationship between draft annual financial terms of employment and is based on an ongoing comprising the Deputy use of the University’s the Board of Governors statements prior to the levels of remuneration process designed to identify Vice-Chancellor, Pro-Vice- financial, physical and and Academic Board also submission to the Board of the holders of senior the principal risks to the Chancellors, the Registrar, human resources; took place in June 2011. of Governors, monitoring posts as defined in the achievement of policies, aims Directors of Finance, Recommendations arising compliance with • keeping the University’s Articles of Government and objectives, to evaluate Human Resources and from the reviews have been statutory requirements, financial position and expressing a view the nature and extent of Services, and the Faculty implemented. The next accounting standards under review, making on behalf of the Board those risks and to manage Pro-Vice-Chancellors. effectiveness review is and best practices for them efficiently, effectively recommendations to the on the general salary scheduled to take place in financial reporting; and economically. This Conduct of Business Board concerning the structure, remuneration 2016/17. University’s annual budget process has been in place The Board of Governors • agreeing with the and terms of employment and financial forecasts, Newly appointed Governors during the year ended 31 has four Board meetings internal and external of the University’s senior ensuring the solvency of participate in an individual July 2016 and up to the date per year and an Away auditors the range of the management. the University and the induction programme, of approval of the financial Day to consider long- respective audits and The Remuneration safeguarding of its assets; tailored to their specific statements, and accords with term strategy. The formal reviews and discussing Committee met once during needs and experience. In HEFCE guidance. with the auditors and • reviewing policies and meetings of the Board 2015/16. addition, all Governors are supplemented by with management any practices concerned The University’s internal The Nominations and are kept informed of informal briefing sessions matters arising from with staffing issues such control system is supported Governance Committee and seminars and conferences on relevant issues, the audits and agreeing as annual pay awards; by a number of policies the Remuneration Committee for Governors offered by and attendance at key appropriate action; staff appraisal; staff that have been approved by replaced the Nominations, organisations such as the University events. This development; discipline the Governing Body. These • monitoring the Governance and Leadership Foundation for helps to ensure that and grievance; health and include a Risk Management adequacy and Remuneration Committee Higher Education. Governors are part of the safety and equality and Policy, a Bribery Act effectiveness of the at the start of 2016. The wider community of the diversity. Internal Control Compliance Statement and accounting, internal Nominations, Governance University and that they comprehensive Financial control, governance The Finance and Resources and Remuneration The University’s Governing are fully briefed on the Regulations which detail and risk management Committee met three times Committee met two times Body has responsibility for activities of and challenges financial controls and systems. during 2015/16. during 2015/16. maintaining a sound system and opportunities facing of internal control that procedures. the University. The Vice-Chancellor, The Nominations and All of the Board’s Committees

36 | Financial Statements Financial Statements | 37 The Manchester Metropolitan University The Governing Body has the most important risks responsibility for reviewing facing the University. the effectiveness of the • The University has system of internal control. arranged for reports The following processes on internal control have been established: activities to be received • The Board meets formally from budget holders, five times during the departmental heads and year to consider the project managers. plans, strategic direction The Governing Body’s and performance of the review of the effectiveness University. of the system of internal • The Board receives control is informed by regular reports from Internal Audit, which Corporate the Chair of the Audit operates to standards Committee concerning defined in the HEFCE Audit internal control, and Code of Practice. In addition Governance requires regular reports to being subject to periodic from managers on the review by the HEFCE steps they are taking to Audit Service, the services manage risks in their provided by the internal areas of responsibility, audit consortium are kept including progress reports under review by a Board on key projects. made up of senior staff from • The Audit Committee member institutions. receives regular reports The most recent Internal from the Head of Audit annual opinion Internal Audit, which concluded that the includes Internal Audit’s University’s internal independent opinion controls and arrangements on the adequacy and for governance, risk effectiveness of the management and securing Institution’s system of value for money were internal control, together effective. with recommendations for The Governing Body’s improvement. review of the effectiveness • A member of the of the system of internal Executive has control is also informed responsibility for the by the work of the promotion and co- executive managers ordination of risk within the Institution management processes who have responsibility and reporting. for the development and • A university-wide Risk maintenance of the internal Register is maintained control framework, and by and reviewed regularly by comments made by the the University Executive external auditors in their Group, Audit Committee management letter and and Board of Governors. other reports. • The University’s risk On behalf of the Board of management process Governors ensures that the University’s Risk Register is fully aligned to the strategic goals set out in the University’s Strategic Framework. • A robust risk prioritisation Vanda Murray OBE methodology has been Pro-Chancellor and Chair established which of the Board of Governor ensures that all risks are 25 November 2016 identified with focus on

38 | Financial Statements Financial Statements | 39 The Manchester Metropolitan University

Responsibilities of the Board of Governors

In accordance with Articles office holder, is required The Board of Governors has departments; consideration of these taken reasonable steps to: matters and, accordingly, of Government made by the to prepare financial • a comprehensive medium- the auditors accept no Board in exercise of powers statements for each • ensure that funds from and short-term planning responsibility for any conferred by the Education financial year which give HEFCE are used only process, supplemented by changes that may have Reform Act 1988, the a true and fair view of for the purposes for detailed annual income, occurred to the financial Board of Governors of the the state of affairs of the which they have been expenditure, capital and statements since they were Manchester Metropolitan University and of the given and in accordance cash flow budgets; initially presented on the University is responsible, surplus or deficit and cash with the Memorandum • regular reviews of website. inter alia, for the oversight flows for that year. of Assurance and academic performance of the University’s activities Accountability with the Legislation in the United In causing the financial and quarterly reviews of and for the effective and Funding Council and any Kingdom governing statements to be prepared, financial results involving efficient use of resources, other conditions which the preparation and the Board of Governors has variance reporting and for the solvency of the the Funding Council dissemination of financial ensured that: updates of forecast Institution and for the may, from time to time, statements may differ • suitable accounting outturns; safeguarding of its assets. prescribe; from legislation in other policies are selected and The Board is required by • clearly defined and jurisdictions. • ensure that there are the Act to present audited applied consistently; formalised requirements financial statements for appropriate financial and The Governors who held • the methods and for approval and control of each financial year. management controls in office at the date of approval principles in the expenditure; place to safeguard public of this report confirm that, Statement of The Board of Governors funds and funds from • a formalised treasury so far as they are each Recommended Practice is responsible for keeping other sources; management policy; aware, there is no relevant (SORP) for further proper accounting records audit information of which and higher education • safeguard the assets • a professional Internal which disclose with the University’s auditors are institutions are observed; of the University and Audit team whose annual reasonable accuracy, at unaware; and each member any time, the financial prevent and detect fraud; programme is approved • judgements and has taken all the steps that position of the University by the Audit Committee. estimates are made • secure the economical, he or she ought to have and enable it to ensure that are reasonable and efficient and effective The Audit Committee, on taken to be aware of any that the financial prudent; management of the behalf of the Board, has relevant audit information statements are prepared University’s resources reviewed the effectiveness and to establish that the • applicable UK in accordance with the and expenditure. of the University’s system of University’s auditors are accounting standards Act and with guidance internal control. Any system aware of that information. The key elements of the from the Higher Education have been followed, of internal financial control University’s system of On behalf of the Board of Funding Council for subject to any material can, however, provide only internal financial control, Governors England and other relevant departures disclosed and reasonable, but not absolute, which is designed to accounting and financial explained in the financial assurance against material discharge the responsibilities reporting standards. In statements; misstatement or loss. set out above, include the addition, within the • financial statements are terms and conditions of a following: The maintenance and prepared on the going integrity of the Manchester Memorandum of Assurance • clear definitions of the concern basis unless it is Metropolitan University Vanda Murray OBE and Accountability agreed responsibilities of, and inappropriate to presume website is the responsibility Pro-Chancellor and Chair between HEFCE and the the authority delegated that the charitable of the Governing Body; the of Board of Governors Board of Governors of the to, heads of academic company will continue in work carried out by the 25 November 2016 University, the Board, business. and administrative through its designated auditors does not involve

40 | Financial Statements Financial Statements | 41 The Manchester Metropolitan University

Independent Auditor’s Report We have audited the true and fair view. course of performing managed in accordance financial statements of The the audit. If we become with relevant legislation; Our responsibility is to Manchester Metropolitan aware of any apparent to the Governing Body audit, and express an • income has been applied University for the year material misstatements or opinion, on the financial in accordance with the ended 31 July 2016 [set inconsistencies we consider of The Manchester statements in accordance University’s articles of out on pages 44 to 77). the implications for our with applicable law and government: The financial reporting report. International Standards on Metropolitan framework that has • funds provided by Auditing (UK and Ireland). been applied in their HEFCE have been Those standards require University preparation is applicable Opinion on financial applied in accordance us to comply with the law and United Kingdom statements with the Memorandum Auditing Practices Board’s (the “institution”) Accounting Standards of Assurance and Ethical Standards for In our opinion the financial (United Kingdom Generally Accountability and any Auditors. statements: Accepted Accounting other terms and conditions Practice), including • give a true and fair view attached to them; and FRS 102, the Financial of the state of the Group’s Scope of the audit • the corporate governance Reporting Standard and the University’s of the financial and internal control applicable in the UK and affairs as at 31 July 2016 statements requirements of HEFCE’s Republic of Ireland. and of the Group’s and Accounts direction An audit involves University’s income This report is made solely to higher education obtaining evidence and expenditure, gains to the Governing Body, in institutions for 2015-16 about the amounts and and losses, changes in accordance with paragraph financial statements have disclosures in the financial reserves and Group’s cash 13(2) of the University’s been met. statements sufficient to flows for the year then Articles of Government give reasonable assurance ended; and section 124B of the that the financial Education Reform Act • have been properly statements are free from 1988. Our audit work prepared in accordance material misstatement, has been undertaken with United Kingdom whether caused by fraud so that we might state Generally Accepted or error. This includes an to the Governing Body Accounting Practice and assessment of: whether Clare Partridge those matters we are with the 2015 Statement the accounting policies For and on behalf of required to state to it in of Recommended Practice are appropriate to the KPMG LLP, Statutory an auditor’s report and for – Accounting for Further Group’s and University’s Auditor no other purpose. To the and Higher Education; circumstances and have Chartered Accountants fullest extent permitted and been consistently applied by law, we do not accept and adequately disclosed; • meet the requirements 28 November 2016 or assume responsibility the reasonableness of of HEFCE’s Accounts to anyone other than the significant accounting direction to higher Governing Body for our estimates made by the education institutions audit work, for this report, Board of Governors; and for 2015-16 financial or for the opinions we have the overall presentation of statements. formed. the financial statements. In addition, we read all Opinion on other Respective the financial and non- matters prescribed in responsibilities of the financial information in the the HEFCE Audit Code Board of Governors Annual Report to identify of Practice (effective and auditor material inconsistencies 1 August 2014) issued with the audited financial As explained more fully under the Further and statements and to identify in the Responsibilities of Higher Education Act any information that is the Board of Governors 1992 apparently materially Statement set out on page incorrect based on, or In our opinion, in all material 40 to 41, the Governing materially inconsistent respects: Body is responsible for the with, the knowledge preparation of financial • funds from whatever acquired by us in the statements which give a source administered by the Group and the University for specific purposes have been properly applied to those purposes and

42 | Financial Statements Financial Statements | 43 Consolidated Statement of Consolidated and The Manchester Metropolitan University Comprehensive Income and University Statement Expenditure of Changes in Reserves for the year ended for the year ended 31 July 2016 31 July 2016

2015/16 2014/15 Consolidated Income and expenditure account Revaluation Notes Consolidated University Consolidated University reserve Total £’000 £’000 £’000 £’000 Endowment Restricted Unrestricted Income £’000 £’000 £’000 £’000 £’000 Tuition fees and education contracts 1 232,972 232,972 209,508 209,508 Funding body grants 2 26,135 26,135 32,777 32,777 Balance at 1 August 2014 629 56 249,934 105,365 355,984 Research grants and contracts 3 6,113 6,113 6,106 6,106 Other income 4 31,703 31,703 28,683 28,719 Surplus from the income and Investment income 5 992 992 636 636 expenditure statement 89 13 18,330 - 18,432 Donations and endowments 6 61 61 121 121 Other comprehensive income - - (14,984) - (14,984) ______Transfers between revaluation and Total income 297,976 297,976 277,831 277,867 income and expenditure reserve - - 7,283 (7,283) - Release of restricted funds spent in year - (9) 9 - -

______Total comprehensive income for the year 89 4 10,638 (7,283) 3,448 Expenditure ______Staff costs 7 160,281 160,281 152,270 152,270 Balance at 1 August 2015 718 60 260,572 98,082 359,432 Other operating expenses 89,228 89,228 90,368 90,368 Depreciation 11 12,174 12,174 11,869 11,869 Surplus/(deficit) from the income Accelerated depreciation 11 1,720 1,720 7,298 7,298 and expenditure statement (59) 17 38,664 - 38,622 Interest and other finance costs 8 6,294 6,294 6,020 6,020 Other comprehensive income - - (19,136) - (19,136) ______Transfers between revaluation and Total expenditure 9 269,697 269,697 267,825 267,825 income and expenditure reserve - - 6,024 (6,024) - Release of restricted funds spent in year - (16) 16 - - ______Surplus before other gains/(losses) 28,279 28,279 10,006 10,042 Total comprehensive income for the year (59) 1 25,568 (6,024) 19,486 ______Balance at 31 July 2016 659 61 286,140 92,058 378,918 Gain on disposal of assets held for sale 10,360 10,360 8,560 8,560 ______Share of operating deficit in joint venture 14 (31) - (5) -

Share of operating surplus in associate 15 14 - 19 - University Income and expenditure account Revaluation ______reserve Total Surplus before tax 38,622 38,639 18,580 18,602 Endowment Restricted Unrestricted £’000 £’000 £’000 £’000 £’000 Taxation 10 - - (148) (148) ______Balance at 1 August 2014 629 56 249,591 105,365 355,641 Surplus for the year 38,622 38,639 18,432 18,454 Surplus from the income and expenditure statement 89 13 18,352 - 18,454 Other comprehensive income - - (14,984) - (14,984) Actuarial loss in respect of Transfers between revaluation and income pension schemes 28 (19,136) (19,136) (14,984) (14,984) and expenditure reserve - - 7,283 (7,283) - ______Release of restricted funds spent in year - (9) 9 - - Total comprehensive income for the year 19,486 19,503 3,448 3,470 ______89 4 10,660 (7,283) 3,470 Total comprehensive income for the year ______Represented by: Balance at 1 August 2015 718 60 260,251 98,082 359,111 Endowment comprehensive (expenditure)/income for the year (59) (59) 89 89 Surplus/(deficit) from the income Restricted comprehensive income for the year 1 1 4 4 and expenditure statement (59) 17 38,681 - 38,639 Unrestricted comprehensive income for the year 19,544 19,561 3,355 3,377 Other comprehensive income - - (19,136) - (19,136) ______Transfers between revaluation and income 19,486 19,503 3,448 3,470 and expenditure reserve - - 6,024 (6,024) - Release of restricted funds spent in year - (16) 16 - - ______Total comprehensive income for the year (59) 1 25,585 (6,024) 19,503 ______Balance at 31 July 2016 659 61 285,836 92,058 378,614 ______

44 | Financial Statements Financial Statements | 45 The Manchester Metropolitan University Consolidated and University Balance Sheet for the year ended 31 July 2016

2016 2015 Notes Consolidated University Consolidated University Restricted Reserves £’000 £’000 £’000 £’000 Non-current assets Income and expenditure reserve - endowment reserve 21 659 659 718 718 Fixed assets 11 440,932 440,932 451,047 451,047 Heritage assets 11/12 4,305 4,305 4,305 4,305 Unrestricted Reserves Income and expenditure reserve - Investments 13 106 1,793 106 1,793 restricted reserve 22 61 61 60 60 Investment in joint venture 14 1,875 - 1,906 - Investments in associate 15 116 - 102 - Income and expenditure reserve - ______unrestricted 286,140 285,836 260,572 260,251 447,334 447,030 457,466 457,145 Revaluation reserve 92,058 92,058 98,082 98,082 ______Total Reserves 378,918 378,614 359,432 359,111 Current assets ______Stock 158 158 174 174 Trade and other receivables 16 19,953 19,953 10,077 10,077 The financial statements on pages 44 to 77 were approved by the Board of Governors on 25 November 2016 Investments 17 85,000 85,000 35,403 35,403 and signed on its behalf by: Cash and cash equivalents 23 54,125 54,125 62,273 62,273 ______159,236 159,236 107,927 107,927 Less: Creditors: amounts falling due within one year 18 (46,761) (46,761) (46,731) (46,731)

Vanda Murray OBE Net current assets 112,475 112,475 61,196 61,196 Pro-Chancellor and Chair of the Board of Governors ______Total assets less current liabilities 559,809 559,505 518,662 518,341

Creditors: amounts falling due after 19 (33,834) (33,834) (36,728) (36,728) more than one year

Provisions Pension provisions 20 (147,057) (147,057) (122,502) (122,502) Professor Malcolm Press ______Vice-Chancellor Total net assets 378,918 378,614 359,432 359,111 ______

John Cunningham Director of Finance

46 | Financial Statements Financial Statements | 47 The Manchester Metropolitan University Consolidated Statement of Cash Flows for the year ended 31 July 2016

Notes 2015/16 2014/15 £’000 £’000 Notes 2015/16 2014/15 Cash flows from financing activities £’000 £’000 Interest paid (1,815) (1,888) Cash flow from operating activities Interest element of finance lease (48) (68) Surplus for the year 38,622 18,432 Endowment cash received 30 100 New unsecured loans 172 193 Adjustment for non-cash items Repayments of amounts borrowed (2,929) (2,625) Depreciation 11 13,894 19,167 Capital element of finance lease (443) (820) Decrease/(increase) in stock 16 (39) ______(Increase)/decrease in trade and other receivables 16 (37) 29 (5,033) (5,108) ______(Decrease)/increase in creditors 18 (777) 3,364 Increase in pension provision 20 5,419 8,203

Share of operating deficit in joint venture 14 31 5 ______Share of operating surplus in associate 15 (14) (19) Decrease in cash and cash equivalents in the year (8,148) (829) ______Adjustment for investing or financing activities Investment income 5 (992) (636) Cash and cash equivalents at beginning of the year 23 62,273 63,102 Interest payable 8 1,863 1,956 Cash and cash equivalents at end of the year 23 54,125 62,273 Endowment income 6 (30) (100) Profit on the sale of assets held for sale (10,360) (8,560) Disposal of fixed assets - 18 Capital grant income (1,126) (2,927) ______Net cash inflow from operating activities 46,509 38,893

Cash flows from investing activities Proceeds from sales of fixed assets 4,559 10,755 Capital Grant receipts 2,239 2,927 Withdrawal of deposits 30,403 - Investment income 954 636 Payments made to acquire fixed assets (7,779) (13,501) New non-current asset investments - (28) New deposits (80,000) (35,403) ______(49,624) (34,614)

48 | Financial Statements Financial Statements | 49 The Manchester Metropolitan University

Statement of 1. Statement the goods or services are conditions have been met. income in the year in which the University’s staff are there is a charge against of principal supplied to the external Income received in advance it arises and as either members of are the TPS the provision for payments Accounting accounting policies customers or the terms of performance-related restricted or unrestricted and the GMPF. These are to the pensioners and a of the contract have been conditions being met is income according to the externally funded and credit to the provision for i) Basis of preparation satisfied. recognised as deferred terms applied to the contracted out of the State net return on assets. These financial income within creditors individual endowment Second Pension (S2P). Policies Fee income is stated Defined statements have been on the balance sheet and fund. A small number of staff gross of any expenditure Contribution Plan prepared in accordance released to income as the remain in other pension which is not a There are three main with the Statement of conditions are met. schemes. A defined contribution discount and credited types of donations and Recommended Practice plan is a post-employment to the Consolidated Grants (including endowments identified The GMPF is a defined (SORP): Accounting benefit plan under Statement of Income research grants) from within reserves: benefit scheme which for Further and Higher which the company and Comprehensive non-government sources is valued, by qualified for the year ended Education 2015 and in 1. Unrestricted permanent pays fixed contributions Expenditure over the are recognised in income actuaries, on a triennial accordance with Financial endowments - the donor into a separate entity period in which students when the University is basis. Reporting Standards (FRS has specified that the and will have no 31 July 2016 are studying. Where the entitled to the income 102). The University is fund is to be permanently The TPS is a multi- legal or constructive amount of the tuition fee and performance-related a public benefit entity invested to generate an employer scheme for which obligation to pay further is reduced by a discount conditions have been met. and therefore has applied income stream for the it is not possible to identify amounts. Obligations for for prompt payment, Income received in advance the relevant public general benefit of the the assets and liabilities to contributions to defined income receivable of performance-related benefit requirement of University. University members due contribution pension is shown net of the conditions being met is FRS 102. The financial to the mutual nature of the plans are recognised as discount. Scholarships recognised as deferred 2. Expendable endowments statements are prepared scheme. Therefore this an expense in the income are accounted for gross income within creditors - the donor has specified in accordance with the scheme is accounted for statement in the periods as expenditure and not on the balance sheet and a particular objective historical cost convention. as a defined contribution during which services are deducted from income. released to income as the other than the purchase retirement benefit scheme. rendered by employees. conditions are met. or construction of tangible Investment income ii) Basis of consolidation fixed assets, and the is credited to the Donations and The contributions to the Defined Benefit Plan University has the power to The consolidated financial statement of income endowments TPS are calculated so as to use the capital. Defined benefit plans are statements include and expenditure on a spread the cost of pensions Non-exchange transactions post-employment benefit the University and all receivable basis. 3. Restricted permanent over employees’ working without performance- plans other than defined its subsidiaries for the endowments - the donor lives with the University, related conditions contribution plans. Under financial year to 31 July Funds the University has specified that the so that the pension cost are donations and defined benefit plans, the 2016. receives and disburses as fund is to be permanently is a substantially level endowments. Donations University’s obligation is to paying agent on behalf invested to generate percentage of current and The consolidated and endowments with provide the agreed benefits of a funding body are an income stream to be future pensionable payroll. financial statements do donor-imposed restrictions to current and former excluded from the income applied to a particular The contibutions are not include the income are recognised in income employees, and actuarial and expenditure of the objective. determined by qualified and expenditure of the when the University is risk (that benefits will cost University where the actuaries on the basis Students’ Union as the entitled to the funds. Capital grants more or less than expected) University is exposed to of quinennial valuations University does not exert Income is retained within and investment risk (that minimal risk or enjoys Capital grants are using a prospective benefit control or dominant the restricted reserve returns on assets set aside minimal economic benefit recognised in income when method. influence over policy until such time that it is to fund the benefits will related to the transaction. the University is entitled decisions. utilised in line with such differ from expectations) to the funds subject to (b) Enhanced pensions restrictions at which point are borne, in substance, by Associated companies any performance-related Grant funding the income is released to The University continues the University. The Group and joint ventures are conditions being met. general reserves through a to make a diminishing should recognise a liability accounted for using the Grant funding including reserve transfer. iv) Accounting for number of pension for its obligations under equity method. funding council block retirement benefits enhancement payments to defined benefit plans net grant, research grants Donations with no retired employees or their of plan assets. This net from government restrictions are recognised (a) Teachers’ Pension iii) Income recognition dependents. The value of defined benefit liability is sources, grants (including in income when the Scheme (‘TPS’) and the this liability is reflected measured as the estimated Income from the sale research grants) from University is entitled to the Greater Manchester as part of the pension amount of benefit that of goods or services non-government sources funds. Local Government provision on the balance employees have earned is credited to the are recognised as income Pension Scheme (GMPF) Investment income sheet and is reviewed by in return for their service Consolidated Statement when the University is and appreciation of Two of the principal qualified actuaries every in the current and prior of Comprehensive Income entitled to the income endowments is recorded in pension schemes which three years. Each year periods. and Expenditure when and performance-related 50 | Financial Statements Financial Statements | 51 The Manchester Metropolitan University

Statement of with other institutions’ entered into an agreement fair value and the present functional currency at added to the gross carrying employees and is unable with the scheme that value of the minimum lease foreign exchange rates amount of the fixed asset iv) Accounting for Accounting to identify its share of determines how the payments at inception of ruling at the dates the fair concerned. retirement benefits the underlying assets employer will fund a deficit the lease. value was determined. (continued) Freehold land is not and liabilities of the results in the recognition Minimum lease payments ix) Fixed assets depreciated as it is Policies discounted to determine scheme on a consistent of a liability for the are apportioned between considered to have an its present value, less and reasonable basis contributions payable that Fixed assets are capitalised the finance charge and indefinite useful life and the fair value (at bid and therefore, as arise from the agreement where they are capable the reduction of the no depreciation is charged price) of plan assets. The required by Section 28 (to the extent that they of being used for a period outstanding liability. The on assets in the course of calculation is performed of FRS 102 “Employee relate to the deficit) and that exceeds one year and finance charge is allocated construction. by a qualified actuary benefits”, accounts for the resulting expense which: to each period during the using the projected unit the scheme as if it were is recognised in profit - individually have a Other fixed assets are for the year ended lease term so as to produce credit method. Where a defined contribution or loss. The officers are cost equal to, or greater depreciated on a straight- a constant periodic rate of the calculation results in scheme. As a result, the satisfied that the scheme than, £25,000, or; line basis over their 31 July 2016 interest on the remaining a net asset, recognition amount charged to the provided by USS meets - collectively have a expected useful lives as balance of the liability. of the asset is limited income and expenditure the definition of a multi- cost equal to, or greater below: to the extent to which account represents the employer scheme and has vii) Operating leases than, £25,000 where the the University is able contributions payable to therefore recognised the assets are functionally Freehold Buildings Costs in respect of to recover the surplus the scheme in respect of discounted fair value of the interdependent or are 50 years operating leases are either through reduced the accounting period. contractual contributions purchased together and charged on a straight- contributions in the future Since the institution relating to past defecits intended to be used as Subsequent Additions line basis over the lease or through refunds from has entered into an under the funding plan a group under common 10 years term. Any lease premiums the plan. agreement (the Recovery in existence at the date management control. or incentives are spread Leasehold Properties Plan that determines how of approving the financial over the minimum lease Any asset costs not Life of the Lease each employer within statements. term. meeting the above criteria (up to maximum (c) Universities the scheme will fund v) Employment benefits are expensed in the year of of 50 years) Superannuation the overall deficit), the viii) Foreign currency acquisition. Scheme institution recognises Short-term employment Plant and Machinery Transactions in foreign a liability for the benefits such as salaries Fixed assets are stated 4 years The institution currencies are translated contributions payable that and compensated absences at cost less accumulated participates in to sterling using the arise from the agreement are recognised as an depreciation and Fixtures and fittings the Universities exchange rate ruling at the to the extent that they expense in the year in accumulated impairment and Equipment Superannuation Scheme date of the transaction. relate to the deficit and which the employees losses. (excluding Computer (the scheme). Throughout Monetary assets and the resulting expense render service to the Equipment and the current and preceding liabilities denominated in Certain items of freehold in the income and University. Any unused Oxford Street) periods, the scheme was foreign currencies at the land and buildings that expenditure account. benefits are accrued and 10 years a defined benefit only balance sheet date are had been revalued prior measured as the additional pension scheme until 31 FRS 102 makes the translated to sterling at to the date of transition to Computer Equipment amount the University March 2016 which was distinction between the foreign exchange rate FRS 102, are measured on 5 years expects to pay as a result contracted out of the a Group Plan and a ruling at that date. Foreign the basis of deemed cost, of the unused entitlement. Oxford Street fixtures State Second Pension multi-employer scheme. exchange differences as a proxy for cost, being and fittings (S2P). The assets of A Group Plan consists arising on translation are the revalued amount at the vi) Finance leases Life of the lease the scheme are held of a collection of recognised in Surplus or date of that transition. in a separate trustee- entities under common Leases in which the Deficit. Non-monetary Costs incurred in relation administered fund. control typically with a University assumes assets and liabilities that to major enhancements Depreciation methods, Because of the mutual sponsoring employer. A substantially all the risks are measured in terms of of existing buildings are useful lives and residual nature of the scheme, multi-employer scheme is and rewards of ownership historical cost in a foreign capitalised to the extent values are reviewed at the the scheme’s assets are a scheme for entities not of the leased asset are currency are translated that they increase the date of preparation of each not hypothecated to under common control classified as finance leases. using the exchange rate at expected future benefits Balance Sheet. individual institutions and represents (typically) Leased assets acquired the date of the transaction. from the existing fixed and a scheme-wide an industry-wide scheme by way of finance lease Non-monetary assets and asset beyond its previously Borrowing costs are contribution rate is such as that provided by and the corresponding liabilities denominated assessed standard of recognised as an expense set. The institution is USS. The accounting for lease liabilities are initially in foreign currencies that performance. The cost of in the Consolidated therefore exposed to a multi-employer scheme recognised at an amount are stated at fair value any such enhancements are Statement of Income and actuarial risks associated where the employer has equal to the lower of their are retranslated to the

52 | Financial Statements Financial Statements | 53 The Manchester Metropolitan University

Expenditure in the period in (a) the University has a xvii) Taxation with FRS 102 for the first which they are incurred. present obligation (legal or time and consequently The University is an constructive) as a result of a has applied the first time Assets held for sale are exempt charity within past event; adoption requirements. held at a valuation as at the meaning of Part 3 of An explanation of how the 31 July 2014 and are not (b) it is probable that the Charities Act 2011. transition to 2015 SORP Statement of depreciated. an outflow of economic It is therefore a charity has affected the reported benefits will be required to within the meaning of x) Heritage assets financial position, financial settle the obligation; and Para 1 of schedule 6 to Works of art and other performance and cash Accounting (c) a reliable estimate can the Finance Act 2010 and, valuable artefacts valued flows of the consolidated be made of the amount of accordingly, the University at over £25,000 have been results of the University is the obligation. is potentially exempt capitalised and recognised provided in note 30. Policies from taxation in respect at their value based on The amount recognised as a of income or capital gains Application of first time a valuation carried out provision is determined by received within categories adoption grants certain by Bonhams during the discounting the expected covered by section 478- exemption from the full financial year 2012/13. 488 of the Corporation requirements of 2015 future cash flows at a pre- Tax Act 2010 (CTA 2010) SORP in the transition Heritage assets are not tax rate that reflects risks or section 256 of the period. The University for the year ended depreciated as their long specific to the liability. economic life and high Taxation of Chargeable has chosen to measure 31 July 2016 residual value mean that A contingent liability arises Gains Act 1992, to the deemed cost of freehold any depreciation would not from a past event that gives extent that such income land and buildings, be material. the University a possible or gains are applied to which had been subject obligation whose existence exclusively charitable to revaluations, at the xi) Investments will only be confirmed by purposes. revalued amount on the

the occurrence or otherwise date of transition. Non-current asset investments are held on the of uncertain future events The University receives Balance Sheet at amortised not wholly within the no similar exemption in respect of Value Added cost less impairment. control of the University. Contingent liabilities also Tax. Irrecoverable VAT

xii) Stock arise in circumstances on inputs is included in Stock is held at the lower where a provision would the costs of such inputs. of cost and net realisable otherwise be made but Any irrecoverable VAT value. It consists of either it is not probable that allocated to fixed assets is solely cleaning materials, an outflow of resources will included in their cost. consumables, food and bar be required or the amount stocks. xviii) Reserves of the obligation cannot be Reserves are classified xiii) Cash and cash measured reliably. as restricted or equivalents A contingent asset arises Cash includes cash in unrestricted. Restricted where an event has hand, deposits repayable endowment reserves taken place that gives on demand and overdrafts. include balances which, the University a possible Deposits are repayable through endowment to asset whose existence will on demand if they are in the University, are held as only be confirmed by the practice available within 24 a permanently restricted occurrence or otherwise of hours without penalty. fund which the University uncertain future events not must hold in perpetuity. Cash equivalents are wholly within the control of short-term, highly liquid the University Other restricted reserves investments that are readily include balances where Contingent assets and convertible to known the donor has designated liabilities are not recognised amounts of cash with a specific purpose and in the Balance Sheet but are insignificant risk of change therefore the University disclosed in the notes. in value. is restricted in the use of

these funds. xiv) Provisions, contingent xvi) Accounting for Jointly liabilities and contingent xix) Transition to 2015 Controlled Operations assets SORP The University accounts Provisions are recognised The University is for its share of joint in the financial statements preparing its financial ventures using the equity when: statements in accordance method.

54 | Financial Statements Financial Statements | 55 The Manchester Metropolitan University

5 Investment income Notes 2015/16 2014/15 Consolidated and University Notes to the Accounts £’000 £’000 Investment income on endowments 21 3 3 Income from investments 951 633 Interest on Sale of Assets held for sale 38 - ______for the year ended 992 636

31 July 2016 6 Donations and endowments Consolidated and University £’000 £’000 New endowments 21 30 100 Donations with restrictions 22 17 13 Unrestricted donations 14 8 2015/16 2014/15 ______Consolidated and University 61 121 1 Tuition fees and education contracts £’000 £’000 7 Staff costs

Full-time and EU students 199,129 176,146 Consolidated and University Full-time international students 13,476 12,991 £’000 £’000 Part-time students 7,054 6,455 Short course fees 709 939 Salaries 126,311 119,530 Education contracts - NHS 10,518 10,319 Social security costs 10,911 9,517 Education contracts - Other 2,086 2,658 Movement on USS provision (25) 918 ______Pension costs 23,084 22,305 232,972 209,508 Total ______160,281 152,270 2 Funding body grants Consolidated and University £’000 £’000 Emoluments of the Vice-Chancellor Recurrent grant On the 31st May 2015 the Vice-Chancellor, Professor J Brooks, retired from his post and was suceeded by Higher Education Funding Council 21,383 24,284 Professor M Press. The emoluments received by both Vice-Chancellors in the prior year is disclosed seperately below: Skills Funding Agency 1,244 842 National College for Teaching and Leadership 670 1,983 £’000 £’000 Capital grant 999 2,927 Professor M Press (from 1 June 2015) Specific grants Salary 291 41 Higher Education Funding Council 1,839 2,741 Performanace-related pay 20 - ______Benefits 2 14 26,135 32,777 ______313 55 3 Research grants and contracts Consolidated and University Professor J S Brooks (to 31 May 2015) £’000 £’000 Salary - 189 Research councils 1,670 1,766 Performanace-related pay - 40 Charities 733 430 Benefits - 1 Government (UK and overseas) 3,065 2,273 Pension contributions - 26 Industry and commerce 206 479 ______Other 439 482 - 256 ______6,113 5,430 Remuneration of other higher paid staff, excluding employer’s pension contributions: No. No. Research and Development Expenditure Credit (RDEC) - 676 £100,000 to £109,999 1 2 ______£110,000 to £119,999 1 - 6,113 6,106 £120,000 to £129,999 2 - £130,000 to £139,999 2 2 £140,000 to £149,999 - - 4 Other income 2015/16 2014/15 £150,000 to £159,999 1 1 Consolidated University Consolidated University £160,000 to £169,999 - 1 £’000 £’000 £’000 £’000 £170,000 to £179,999 - - Residences, catering and conferences 21,977 21,977 19,403 19,403 ______Other services rendered 4,855 4,855 4,679 4,679 7 6 Other capital grants 127 127 - - Other income 4,744 4,744 4,601 4,637 Average staff numbers by major category : No. No. ______Academic full-time 1,501 1,437 31,703 31,703 28,683 28,719 Academic part-time 491 454 Support staff 2,146 2,077 Casual staff 692 559 ______4,830 4,527

56 | Financial Statements Financial Statements | 57 The Manchester Metropolitan University

Notes to the Accounts 9 Analysis of total expenditure by activity 2015/16 2014/15 Consolidated and University £’000 £’000 Academic and related expenditure 156,225 144,647 Administration and central services 45,208 49,981 for the year ended Premises (including service concession cost) 32,571 39,475 Residences, catering and conferences 18,949 15,850 31 July 2016 Research grants and contracts 3,959 4,152 Other expenses 12,785 13,720 ______269,697 267,825

Other operating expenses include: 7 Staff costs (continued) External auditor’s remuneration in respect of audit service 58 54 External auditor’s remuneration in respect of taxation services 48 - Compensation for loss of office payable to senior post holders: External auditor’s remuneration in respect of FRS 102 services 9 - £’000 £’000 External auditor’s remuneration in respect of TRAC advice 17 - Compensation payable recorded within staff costs 148 74 External auditor’s remuneration in respect of other services 20 13

Operating lease rentals Key management personnel Land and buildings 5,648 6,316 Other 321 229 Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the University. Key management personnel are therefore considered to be members of the University Executive Group. Staff costs includes compensation paid to key management personnel. 10 Taxation Consolidated and University 2015/16 2014/15 £’000 £’000 £’000 £’000 Current tax Key management personnel compensation 2,426 2,196 Current tax expense - 140 Adjustment in respect of previous years - 8 Included in the above is £148,000 paid to key management personnel in lieu of redundancy (2014/15: £74,100). ______Current tax expense - 148 Board of Governors Members

The University’s Board of Governors are the trustees for charitable law purposes. Due to the nature of the University’s 11 Fixed Assets - Consolidated and University operations and the compositions of the Board of Governors, being drawn from local public and private sector organisations, it Fixtures, is inevitable that transactions will take place with organisations in which a member of the Board of Governors may have an Freehold Land Land and Assets held Plant and Fittings and Assets under Heritage and Building Building for sale Machinery Equipment Construction assets Total interest. All transactions involving organisations in which a member of Board of Governors may have an interest, including those identified below, are conducted at arms length and in accordance with the University’s Financial Regulations and usual £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 procurement procedures. Cost or deemed cost At 1 August 2015 431,824 5,560 16,835 173 28,200 764 4,305 487,661 No governor (all of whom are trustees to the University’s charitable status) has received any remuneration from the group Additions 3,126 - - 438 2,284 1,931 - 7,779 during the year (2014/15: £ nil). Disposals - - (4,000) (59) (1,660) - - (5,719) ______The total expenses paid to or on behalf of 10 trustees was £9,000 (2014/15: £10,000 to 9 trustees). This represents travel and At 31 July 2016 434,950 5,560 12,835 552 28,824 2,695 4,305 489,721 subsistence expenses incurred in attending Board of Governors meetings, Committee meetings and Charity events in their official capacity. Depreciation At 1 August 2015 21,269 - - 173 10,867 - - 32,309 Charge for the year 8,991 - - 36 3,147 - - 12,174 8 Interest and other finance costs 2015/16 2014/15 Accelerated depreciation 1,720 - - - - - 1,720 Consolidated and University Disposals - - - (59) (1,660) - - (1,719) £’000 £’000 ______Loan interest 1,815 1,888 At 31 July 2016 31,980 - - 150 12,354 - - 44,484 Finance lease interest 48 68 Net charge on pension schemes 4,431 4,064 Net book value ______At 31 July 2016 402,970 5,560 12,835 402 16,470 2,695 4,305 445,237 ______6,294 6,020 ______At 31 July 2015 410,555 5,560 16,835 - 17,333 764 4,305 455,352 ______

At 31 July 2016, freehold and leasehold land and buildings included £21.6m (2015: £21.1m) in respect of freehold land which is not depreciated.

58 | Financial Statements Financial Statements | 59

The Manchester Metropolitan University

13 Non-Current Investments Consolidated University £’000 £’000

Notes to the Accounts At 1 August 2015 106 1,793 Additions - - Disposals - - ______for the year ended At 31 July 2016 106 1,793

The above analysis consists of: Consolidated University Consolidated University 31 July 2016 2016 2016 2015 2015 £’000 £’000 £’000 £’000 Loans to related parties: Sugden Sports Trust - 1,687 - 1,687 Other Investments: Manchester Science Parks Limited 32 32 32 32 11 Fixed Assets - Consolidated and University (continued) CVCP Properties plc 46 46 46 46 ABD Limited 28 28 28 28 ______Fixtures, 106 1,793 106 1,793 Freehold Land Land and Assets held Plant and Fittings and Assets under Heritage

and Building Building for sale Machinery Equipment Construction assets Total The Governors believe that the carrying value of the investments are supported by their underlying net assets. £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Leased assets included The subsidiary companies of the University (all of which are registered in England and Wales) are as follows: within fixed asset: Name Principal Activity Share Capital Status At 31 July 2016 - - - - 492 - - 492 Uni-Rec Limited Dormant £1 100% owned Manmet Limited Dormant £1 100% owned At 31 July 2015 - - - - 947 - - 947 MMU Enterprises Limited Dormant £4 100% owned Manchester Law School Limited Dormant £2 100% owned Fixtures, fittings and equipment include assets held under finance leases as follows: 2015/16 2014/15 Loan to Sugden Sports Trust Consolidated and University The loan to the Sugden Sports Trust has been provided to facilitate the building of a sports centre for the use of students £’000 £’000 and staff of the University. The loan comprises cash contributions to meet the construction cost together with certain Cost 2,489 2,489 equipment transferred to the trust. Under the terms of the agreement with the trustees, the loan is repayable in full on 31 Disposals (1,660) - December 2017 and bears interest at 6.5% per annum. Accumulated depreciation (1,542) (701) Charge for year (455) (841) 14 Investment in joint venture Depreciation released on disposals 1,660 - ______The University holds a 50% share of Sugden Sports Trust. This is a jointly controlled entity, control over which is shared with Net book value 492 947 the University of Manchester. The arrangement is treated as a joint venture and is accounted for using the equity method, ______such that 50% of the company’s gross assets and liabilities are incorporated into the consolidated balance sheet of the University and 50% of its net income is reported in the University’s consolidated income and expenditure account. The University applied the transitional arrangements of Section 35 of FRS 102 and used a previous valuation as the deemed cost for certain freehold properties. The properties are being depreciated from the valuation date. As the assets are Year ended 31 July 2016 Year ended 31 July 2015 depreciated or sold an appropriate transfer is made from the revaluation reserve to retained earnings. The valuation of the £’000 £’000 £’000 £’000 Land and Buildings was conducted by Eddisons Chartered Surveyors on 31 July 2014. Income and expenditure account ______279 ______231 Deficit before tax ______(31) ______(5) 12 Heritage assets Balance sheet The heritage assets consist of a specialised book collection together with chattels held in Fine Art / Special Collection of Fixed assets 2,585 2,585 Artefacts which have been donated or bequeathed to the University over a number of years. The University conserves these Current assets ______520 ______553 assets in order to both utilise them for teaching and research and to allow engagement with members of the public. Further information on the Universitiy’s policies regarding conservation, preservation, management and disposal of heritage assets ______3,105 ______3,138 can be found on the University’s website: http://www.specialcollections.mmu.ac.uk/ Creditors: amounts due within one year (909) (1,066) A valuation was undertaken by Bonham’s in 2012/13 which valued the books at £2,346,000 and chattels at £1,959,000. Creditors: amounts due after more than one year (2,008)______(1,853)

In neither the current year nor the previous three years, have there been acquisitions of heritage assets, by way of purchase (2,917)______(2,919) or donation. Share of net assets 188 219 Initial Investment 1,687 1,687 ______Investment in Joint Venture 1,875 1,906

15 Investment in associates

The University has a 20% holding in The Corridor Manchester, which is a company limited by guarantee, whose principal activity is to maximise the economic potential of the city south area by harnessing the ongoing investment being made by key institutions (universities, the Health Trust and the private sector).

60 | Financial Statements Financial Statements | 61

The Manchester Metropolitan University Notes to the Accounts for the year ended 31 July 2016

16 Trade and other receivables Consolidated and University 19 Creditors: amounts falling due after more than one year 2016 2015 Consolidated and University £’000 £’000 2016 2015 Amounts falling due within one year: £’000 £’000 Trade receivables 4,911 4,232 Obligations under finance lease 460 596 Other receivables 2,930 362 Unsecured loans 33,374 36,132 Amounts due from associate companies 20 20 ______Prepayments and accrued income 5,007 5,463 33,834 36,728 ______

12,868 10,077 Analysis of secured and unsecured loans: Amounts falling due after one year: Due within one year or on demand (Note 18) 2,929 2,929 Other receivables 7,085 - Due between one and two years 2,878 2,929 ______Due between two and five years 5,996 7,303 19,953 10,077 Due in five years or more 24,500 25,900 ______

Payment for the Didsbury Campus is paid by instalments over a period of 4 years from the date of completion, which occurred in Due after more than one year 33,374 36,132 February 2016. Full payment of this debt is expected in the 2018/19 financial year, with an amount of £9,839,000 included above, ______of which £7,085,000 will be due after 1 year. Total secured and unsecured loans 36,303 39,061

Contingent asset Unsecured Loans Summary: Prior to 31 July 2016 the University had exchanged contracts for the sale of the remaining assets held for sale. A deposit of Barclays Bank PLC 31,500 32,900 £225,000 is being held by solicitors Eversheds LLP, and deposits of £296,000 are being held by Addleshaw Goddard LLP until HEFCE 4,225 5,525 the sales is complete.The Sale of the Didsbury campus is split into Part A and Part B; during the year the University recognised Salix Finance Ltd 578 636 a gain of £10,360,000 on the sale of part A, the sale of part B is expected to crystalise in future years resulting in a further ______payment of £4,850,000. 36,303 39,061

17 Current Investments Consolidated and University 2016 2015 Included above is a £35,000,000 unsecured loan from Barclays Bank plc as part of the funding arrangements for the capital £’000 £’000 programme. The loan bears interest at 5.62% and is repayable by equal quarterly instalments of £350,000, which commenced Short-term deposits 85,000 35,403 in March 2014. The final instalment is due in December 2038. ______85,000 35,403 During 2012/13 the University obtained a £6,500,000 interest-free loan from HEFCE, which is repayable by equal quarterly instalments of £325,000 commencing in November 2014. The final instalment is due in August 2019. Deposits are held with banks and building societies operating in the London market and licensed by the Financial Services Authority with more than three months maturity at the investment date. The interest rates for these deposits are fixed for the In 2013/14 The University received an interest-free loan from Salix Finance Ltd (an independent, not-for-profit company, duration of the deposit at time of placement. funded by various government bodies) of £418,000. The loan is repayable in equal instalments every six months of £52,000,

which commenced in March 2014. The final instalment is due in September 2017. 18 Creditors: amounts falling due within one year Consolidated and University 2016 2015 During 2013/14 the University obtained a £306,000 interest-free loan from the HEFCE Revolving Green Fund, which is £’000 £’000 repayable by equal instalments every six months. Repayment commenced in November 2014 with the final instalment due in Unsecured loans 2,929 2,929 May 2018. Additional loans, with the same terms, of £193,000 were received in 2014/15, and £172,000 in 2015/16. This element Obligations under finance leases 136 443 Trade payables 19,673 21,595 of the loan is repayable in equal instalments on a bi-annual basis, with repayments which commenced in November 2014. Social security and other taxation payable 3,511 3,337 The final instalment is due in November 2019. Accruals and deferred income 20,512 18,427 ______46,761 46,731 Deferred income Included with accruals and deferred income are the following items of income which have been deferred until specific performance-related conditions have been met. Consolidated and University 2016 2015 £’000 £’000 Research grants received on account 1,609 1,654 Grant income 458 291 Other income 5,101 3,970 ______7,168 5,915

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Notes to the Accounts for the year ended 31 July 2016

20 Provisions for liabilities 21 Endowment Reserves

Consolidated and University Obligation to Pension Defined Benefit Total Restricted net assets relating to endowments are as follows: fund deficit on enhancements Obligations Pensions USS Pension on termination (Note 28) Provisions Restricted 2016 2015 £’000 £’000 £’000 £’000 permanent Expendable Consolidated and University endowments endowments Total Total At 1 August 2015 1,686 13,030 107,786 122,502 £’000 £’000 £’000 £’000 Movement in the Year: Balances at 1 August 2015 Current Service Cost - - 11,683 11,683 Capital 54 1,043 1,097 997 Employer’s contributions (74) - (9,657) (9,731) Accumulated income 17 (396) (379) (368) Payments to Pensioners - (1,013) - (1,013) ______Actuarial loss / (gain) - - 19,136 19,136 71 647 718 629 Interest charge 45 469 3,917 4,431 Change in expected contributions 49 - - 49 New endowments - 30 30 100 ______Investment income - 3 3 3 At 31 July 2016 1,706 12,486 132,865 147,057 Expenditure - (92) (92) (14) ______- (59) (59) (89) The Defined Benefit Obligations relate to staff who are members of the Greater Manchester Pension Fund (see note 28). ______At 31 July 2016 71 588 659 718 ______The University continues to make a diminishing number of pension enhancement payments to retired employees or their Represented by: dependants. The value of this liability is reflected as a provision in the balance sheet and is reviewed by qualified actuaries Capital 54 1,073 1,127 1,097 every three years. A review was last undertaken by Hymans Robertson LLP at 31 July 2016. Each year there is a charge Accumulated income 17 (485) (468) (379) against the provision for payments to pensioners and credit to the provision for net return on assets. Any enhancement is ______recognised as part of operating surplus. 71 588 659 718 ______The assumptions for calculating the provision for pension enhancements on termination under FRS 102 are as follows: Analysis by type of purpose:

Research support - 447 447 526 31 July 2016 Prize funds 71 110 181 192 Discount rate 3.6 General - 31 31 - Pension increase rate (CPI) 2.6 ______

71 588 659 718 The obligation to fund the past deficit on the Institution’s Superannuation Scheme (USS) arises from the contractual obligation ______with the pension scheme for total payments relating to benefits arising from past performance. Management have assessed

future employees within the USS scheme and salary payment over the period of the contracted obligation in assessing the Analysis by asset: value of this provision. Cash and cash equivalents 659 718

______

659 718 ______

64 | Financial Statements Financial Statements | 65 The Manchester Metropolitan University

Notes to the Accounts for the year ended 31 July 2016 25 Obligations under Operating Leases Total rentals payable under operating leases: Land and Plant and 2016 2015 Buildings Machinery Total Total 22 Restricted Reserves £’000 £’000 £’000 £’000 Reserves with restrictions are as follows: 2016 2015 Consolidated and University Payable during the year 5,648 321 5,969 5,323 Donations Total Total £’000 £’000 £’000 Future minimum lease payments due: Balances at 1 August 2015 60 60 56 Not later than 1 year 5,648 259 5,907 5,650 New grants - - - Later than 1 year and not later than 5 years 12,930 216 13,146 15,697 New donations 17 17 13 Later than 5 years 47,172 - 47,172 48,823 ______Investment income - - - Total lease payments due 65,750 475 66,225 70,170 Capital grants utilised - - - Expenditure (16) (16) (9) ______(16) (16) (9) 26 Obligations under Finance Leases ______The future minimum finance lease payments are as follows: At 31 July 2016 61 61 60 2016 2015 £’000 £’000 2016 2015 Due within one year 166 483 Analysis of other restricted funds/donations by type of purpose: £’000 £’000 Due between one and two years 166 166 Prize funds 61 60 Due between two and five years 333 500 ______Total gross payments 665 1,149 ______23 Cash and cash equivalents Less: Finance charges (69) (110) At 1 August Cash At 31 July ______2015 Flows 2016 Carrying amount of liability 596 1,039 Consolidated and University £’000 £’000 £’000 Cash and cash equivalents 62,273 (8,148) 54,125 Finance leases are in place for University servers and multifunctional printing devices. These run between three and ______five years, and are entered into with the University bearing the majority of the risk and rewards. 62,273 (8,148) 54,125

24 Capital and other commitments 27 Access funds and external bursaries Provision has not been made for the following capital commitments at 31 July 2016: 2015/16 2014/15 2016 2015 £’000 £’000 £’000 £’000 Balance brought forward at 1 August 2015 Commitments contracted at 31 July 3,616 4,681 306 526 Authorised but not contracted at 31 July 10,730 8,151 Funding council grants and bursaries 6,111 5,697 ______14,346 12,832 6,417 6,223 Disbursed to students (5,642) (5,917) ______Balance remaining at 31 July 2016 775 306

Funding council grants and bursaries are available solely for the use of students; the University acts only as a paying agent. The grants and related disbursements are therefore excluded from the income and expenditure account.

66 | Financial Statements Financial Statements | 67 The Manchester Metropolitan University

Notes to the Accounts

28 Pension Schemes (continued) for the year ended Scheme assets 31 July 2016 The assets in the scheme were: Fair value as at

2016 2015 2014 £’000 £’000 £’000 Equity securities 115,131 123,495 115,281 28 Pension Schemes Debt securities 26,354 29,752 29,447 Private equity 7,401 7,299 6,334 The principal pension schemes for the University’s staff are the Greater Manchester Pension Fund (GMPF) which is Real estate 9,327 7,964 6,628 administered by Tameside Metropolitan Borough Council in accordance with the Local Government Pension Scheme Investment funds and unit trusts 129,750 83,038 75,382 Regulations 2013, the Teachers’ Pension Scheme (TPS) which is administered by the Teachers’ Pension Agency and the Derivatives 780 2,150 1,272 Universities Superannuation Scheme (USS) which is administered by the trustee, the Universities Superannuation Scheme Cash and cash equivalents 7,468 7,454 8,029 Limited. The schemes are defined benefit schemes and are contracted out of the State Earnings-Related Pension Scheme. ______The GMPF and USS are valued every three years with the TPS being valued every five years. This is completed by actuaries Total 296,211 261,152 242,373 using a prospective benefits valuation method with the rates of contribution payable being determined by the pension fund on the advice of the actuaries. 2016 2015 £’000 £’000 Under the definitions set out in IAS 19, both the USS and the GMPF are multi-employer defined benefit pension schemes. Analysis of the amount shown in the balance sheet In the case of the GMPF the actuary of the scheme has identified the University’s share of its assets and liabilities as at 31 Scheme assets 296,211 261,152 July 2016. For the USS a liability has been recognised on the balance sheet as at 31 July 2016. Scheme liabilities (429,076) (368,938) ______Deficit in the scheme (132,865) (107,786) Greater Manchester Pension Fund The last formal valuation of the scheme was performed at 31 March 2013 by a professionally qualified actuary with Analysis of amount charged to staff costs subsequent valuations taking place every five years. The major assumptions utilised in calculating the year-end valuation Current service cost (11,552) (10,421) have been detailed below: Past service costs (131) (177) 2016 2015 ______%pa %pa Total operating charge: (11,683) (10,598) Pension increase rate 1.9 2.6 Rate of increase in salaries 3.2 3.8 Analysis of the amount charged to interest Discount rate / Expected return on assets 2.4 3.6 payable/credited to other finance income Interest cost (13,382) (13,259) Contribution rates are as follows: Expected return on assets 9,465 9,729 % ______From 1 April 2015 to 31 March 2016 20.3 Net charge to interest payable (3,917) (3,530) From 1 April 2016 to 31 March 2017 21.4 From 1 April 2017 to 31 March 2018 22.5 Analysis of other comprehensive income The increases in contribution rates may reduce the deficit. Return on assets excluding amounts included in net interest 22,026 6,980 Other experience 3,872 2,172 The most significant non-financial assumption is the assumed level of longevity. The assumed life expectancy on retirement Past service credit arising on change of pension increase (45,034) (24,136) ages at 65 are: assumption financial year ______Total other comprehensive income (19,136) (14,984) Male Females Pensioner Future Pensioner Pensioner Future Pensioner 2015/16 2014/15 At 31 July 2015 21.4 24.0 24.0 26.6 £m £’000 At 31 July 2016 21.4 24.0 24.0 26.6 Analysis of movement in deficit Deficit at beginning of year 107,786 87,385 Contributions or benefits paid by the University (9,657) (8,711) The expected return on assets has been derived as the weighted average of the expected returns from each Current service cost 11,552 10,421 of the main asset classes (i.e. equities and bonds). The expected return for each asset class reflects a combination Past service cost 131 177 of historical performance analysis, the forward looking views of the financial markets (as suggested by the yields Other finance charge 3,917 3,530 available) and the views of investment organisations. Loss recognised in other comprehensive income 19,136 14,984 ______Deficit at end of year 132,865 107,786

68 | Financial Statements Financial Statements | 69 The Manchester Metropolitan University

28 Pension Schemes (continued) As a result, the amount charged to the income and expenditure account represents the contributions payable to the scheme in respect of the accounting period. Since the institution has entered into an agreement (the Recovery Plan that Notes to the Accounts determines how each employer within the scheme will fund the overall deficit), the institution recognises a liability for the contributions payable that arise from the agreement to the extent that they relate to the deficit and the resulting expense in the income and expenditure account. for the year ended The total cost charged to the profit and loss account is £20,000 (2015: £937,000) as shown in notes 20. The latest available full actuarial valuation of the scheme was at 31 March 2014 (“the valuation date”), which was carried out using the projected unit method. 31 July 2016 Since the institution cannot identify its share of scheme assets and liabilities, the following disclosures reflect those relevant for the scheme as a whole.

28 Pension Schemes (continued) 2015/16 2014/15 The 2014 valuation was the third valuation for USS under the scheme-specific funding regime introduced by the £’000 £’000 Pensions Act 2004, which requires schemes to adopt a statutory funding objective, which is to have sufficient and Analysis of movement in the present value appropriate assets to cover their technical provisions. At the valuation date, the value of the assets of the scheme was £41.6 billion and the value of the scheme’s technical provisions was £46.9 billion, indicating a shortfall of £5.3 billion. Present value at the start of the year 107,786 87,385 The assets therefore were sufficient to cover 89% of the benefits which had accrued to members after allowing for Current service cost 11,552 10,421 expected future increases in earnings. Past service cost 131 177 Interest cost 3,917 3,530 Defined benefit liability numbers for the scheme have been produced using the following assumptions: Employer contributions (9,657) (8,711) Changes in financial assumptions 45,034 24,136 2016 2015 Other experience (3,872) (2,172) Discount rate 3.6% 3.3% Return on assets (22,026) (6,980) Pensionable salary growth n/a 3.5% in the first ______year and 4.0% thereafter Present value at the end of the year 132,865 107,786 Pension increases (CPI) 2.2% 2.2%

2015/16 2014/15 The main demographic assumption used relates to the mortality assumptions. Mortality in retirement is assumed to be £’000 £’000 in line with the Continuous Mortality Investigation’s (CMI) S1NA tables as follows: Analysis of movement in the fair value of scheme assets Fair value of assets at the start of the year 261,152 242,374 Male members’ mortality 98% of S1NA [“light”] YoB tables – No age rating Expected return on assets 9,465 9,729 Female members’ mortality 99% of S1NA [“light”] YoB tables – rated down 1 year Actuarial gain on assets 22,026 6,980 Actual contributions paid by University 9,657 8,711 Use of these mortality tables reasonably reflects the actual USS experience. To allow for further improvements in Actual member contributions 3,150 3,032 mortality rates the CMI 2014 projections with a 1.5% pa long-term rate were also adopted. The current life expectancies Estimated benefits paid (9,239) (9,674) on retirement at age 65 are: ______2016 2015 Fair value of scheme assets at the end of the year 296,211 261,152 Males currently aged 65 (years) 24.3 24.2 Females currently aged 65 (years) 26.5 26.4 2015/16 2014/15 Males currently aged 45 (years) 26.4 26.3 £’000 £’000 Females currently aged 45 (years) 28.8 28.7 Analysis of movement in the present value of scheme liabilities Present value of funded liabilities at the start of the year 368,938 329,759 2016 2015 Current service cost 11,552 10,421 Scheme assets £49.8bn £49.1bn Past service cost (including curtailments) 131 177 Total scheme liabilities £58.3bn £60.2bn Interest cost on defined benefit obligation 13,382 13,259 FRS 102 total scheme deficit £8.5bn £11.1bn Plan participants’ contribution 3,150 3,032 FRS 102 total funding level 85% 82% Benefits paid (9,239) (9,674) Changes in financial assumptions 45,034 24,136 The Teachers’ Pension Scheme Other experience (3,872) (2,172) The Teachers’ Pension Scheme (“TPS”) is a statutory, contributory, defined benefit scheme. The regulations under which ______the TPS operates are the Teachers’ Pensions Regulations 2010 (as amended), and the Teachers’ Pensions Regulations Present value of funded liabilities at the end of the year 429,076 368,938 2014 (as amended). These regulations apply to teachers in schools and other educational establishments in England and Wales maintained by local authorities, to teachers in many independent and voluntary-aided schools, and to Defined benefit scheme assets do not include any of the University’s own financial instruments or any properties occupied teachers and lecturers in establishments of further and higher education. Membership is automatic for full-time teachers by the University. and lecturers and from 1 January 2007 automatic too for teachers and lecturers in part-time employment following The estimate for contribution for the defined benefit scheme for the year to 31 July 2017 will be approximately £9,657,000. appointment or a change of contract. Teachers and lecturers are able to opt out of the TPS.

The actual return on scheme assets for the year was £31,491,000 gain (2015: £16,709,000 gain). Although teachers and lecturers are employed by various bodies, their retirement and other pension benefits, including

annual increases payable under the Pensions (Increase) Acts are, as provided for in the Superannuation Act 1972, paid The Universities Superannuation Scheme out of monies provided by Parliament. Under the unfunded TPS, teachers’ contributions on a ‘pay-as-you-go’ basis, and The institution participates in the Universities Superannuation Scheme (the scheme). Throughout the current and preceding employers’ contributions, are credited to the Exchequer under arrangements governed by the above Act. periods, the scheme was a defined benefit only pension scheme until 31 March 2016 which was contracted out of the State

Second Pension (S2P). The assets of the scheme are held in a separate trustee-administered fund. Because of the mutual The Teachers’ Pensions Regulations require an annual account, the Teachers’ Pension Budgeting and Valuation Account, nature of the scheme, the scheme’s assets are not hypothecated to individual institutions and a scheme-wide contribution to be kept of receipts and expenditure (including the cost of pensions’ increases). From 1 April 2001, the Account has rate is set. The institution is therefore exposed to actuarial risks associated with other institutions’ employees and is been credited with a real rate of return (in excess of price increases and currently set at 3.0%), which is equivalent to unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis assuming that the balance in the Account is invested in notional investments that produce that real rate of return. and therefore, as required by Section 28 of FRS 102 “Employee benefits”, accounts for the scheme as if it were a defined

contribution scheme.

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29 Accounting estimates and judgements Estimates and judgements are continually evaluated and are based on historical experience and other factors, including Notes to the Accounts expectations of future events that are believed to be reasonable under the circumstances.

The University makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a for the year ended material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

31 July 2016 Retirement benefit obligations The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net expense for pensions include the discount rates. Any changes in these assumptions will impact the carrying amount of retirement benefit obligations. Note 28 details 28 Pension Schemes (continued) the actuarial assumptions used in determining the carrying amount at 31 July 2016.

Valuation of the Teachers’ Pension Scheme Not less than every four years the Government Actuary (“GA”), using normal actuarial principles, conducts a formal 30 Transition to FRS102 and the 2015 SORP actuarial review of the TPS. The aim of the review is to specify the level of future contributions. As explained in the accounting policies, these are the University’s first financial statements prepared in accordance with The contribution rate paid into the TPS is assessed in two parts. First, a standard contribution rate (“SCR”) is FRS 102 and the SORP. The accounting policies set out in Note 1 have been applied in preparing the financial statements determined. This is the contribution, expressed as a percentage of the salaries of teachers and lecturers in service for the year ended July 2016, the comparative information presented in these financial statements for the year ended July or entering service during the period over which the contribution rate applies, which if it were paid over the entire 2015 and in the preparation of an opening FRS 102 Statement of Financial Position at 1 August 2014. In preparing its FRS active service of these teachers and lecturers would broadly defray the cost of benefits payable in respect of that 102 SORP-based Balance Sheet, the University has adjusted amounts reported previously in financial statements prepared service. Secondly, a supplementary contribution is payable if, as a result of the actuarial investigation, it is found in accordance with its old basis of accounting (2007 SORP). An explanation of how the transition to FRS 102 and the SORP that accumulated liabilities of the Account for benefits to past and present teachers are not fully covered by standard has affected the Institution’s financial position, financial performance and cash flows is set out in the following tables. contributions to be paid in future and by the notional fund built up from past contributions. The total contribution rate payable is the sum of the SCR and the supplementary contribution rate. Reconciliation of reserves 1 August 2014 31 July 2015 The last valuation of the TPS related to the period 1 April 2004-31 March 2012. The GA’s report of June 2014 revealed Effect of Effect of that the total liabilities of the Scheme (pensions currently in payment and the estimated cost of future benefits) transition to transition to amounted to £191.5 billion. The value of the assets (estimated future contributions together with the proceeds from Notes 2007 SORP FRS 102 FRS 102 2007 SORP FRS 102 FRS 102 the notional investments held at the valuation date) was £176.6 billion. The assumed rate of return is 3.0% in excess of £’000 £’000 £’000 £’000 £’000 £’000 prices. The rate of real earnings growth is assumed to be 2.75%. The assumed gross rate of return is 5.06%. Non-current assets Fixed Assets 11 437,032 21,640 458,672 457,600 (6,553) 451,047 As from 1 April 2015, and as part of the cost-sharing agreement between employers’ and teachers’ representatives, Heritage assets 11/12 4,305 - 4,305 4,305 - 4,305 the SCR was assessed at 20.4%, and the supplementary contribution rate was assessed to be 5.6% (to balance assets Investments 13 1,765 (1,687) 78 1,793 (1,687) 106 and liabilities as required by the regulations within 15 years). This resulted in a total contribution rate of 26.0%, which Investment in joint venture 14 - 1,911 1,911 - 1,906 1,906 translated into an average employee contribution rate of 9.6% and employer contribution rate of 16.4% payable. The Investments in associate 15 - 83 83 - 102 102 cost-sharing agreement also introduced a 10.9% cap on employer contributions payable. It was agreed that these revised ______contributions will be implemented from 1 September 2015. 443,102 21,947 465,049 463,698 (6,232) 457,466 ______From 1 September 2015, the employer contribution rate increased to 16.4%. From 1 April 2015, the TPS is in the process of being reformed, with a different benefit structure for a number of members. These changes have been allowed for in the contribution rate set out above. Endowment Assets 913 (913) - 1,016 (1,016) -

Under the definitions of FRS 102 section 28.11a, the TPS is a multi-employer pension scheme. The University is unable Current assets to identify its share of the underlying assets and liabilities of the scheme and, accordingly, the scheme is treated as a Stock 135 - 135 174 - 174 defined contribution scheme. Trade and other receivables 16 9,496 610 10,106 9,597 480 10,077 Assets held for sale 19,030 (19,030) - 16,835 (16,835) - Cheshire Pension Fund Investments 25,000 (25,000) - 60,403 (25,000) 35,403 A small number of former employees (15) (2015: 15) receive retirement benefits from the Cheshire Pension Fund. The Cash and cash equivalents 23 37,189 25,913 63,102 36,257 26,016 62,273 ______related asset is not material to the University’s accounts. 90,850 (17,507) 73,343 123,266 (15,339) 107,927

Less: Creditors: amounts falling Total Pension Cost due within one year 18 (37,181) (6,091) (43,272) (40,767) (5,964) (46,731) The total pension cost for the University and its subsidiaries is: Net current (liabilities)/assets 53,669 (23,598) 30,071 82,499 (21,303) 61,196

______2015/16 2014/15 Total assets less current liabilities 497,684 (2,564) 495,120 547,213 (28,551) 518,662 Teachers’ Pension Scheme: contributions paid 10,325 8,473

Local Government Pension Scheme: charge 11,683 10,598 Creditors: amounts falling due after USS Pension Scheme: charge 929 1,766 more than one year 19 (38,868) (952) (39,820) (36,132) (596) (36,728) Other pension schemes: contributions paid 162 17 Enhanced pension enhancement - 2,368 Provisions ______Pension liability 20 (98,566) (750) (99,316) (120,816) (1,686) (122,502) 23,099 23,222 ______

Total net assets 360,250 (4,266) 355,984 390,265 (30,833) 359,432 At 31 July 2016 there was a total pension creditor of £2,646,000 (2015: £2,363,000) which was paid by 5th August 2016. ______

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30 Transition to FRS102 and the 2015 SORP (continued)

30 Transition to FRS102 and the 2015 SORP (continued) The most individually significant movement within reserves balance relates to the release of the deferred capital grant grants balances as the University has selected a performance model over the previously utilised accruals model to recognise capital Reconciliation of reserves 1 August 2014 31 July 2015 grants. Given that none of the capital grants received by the University were subject to performance conditions they have Effect of Effect of been recognised in full upon receipt as per paragraph 24.5, section (b) of FRS 102. The effect of the change in policy on transition to transition to deferred capital grants increases net assets by £66.5m and £67.9m at 1 August 2014 and 31 July 2015 respectively. Notes 2007 SORP FRS 102 FRS 102 2007 SORP FRS 102 FRS 102 £’000 £’000 £’000 £’000 £’000 £’000 The movement in the pension liability is a result of the requirement to recognise USS pension liability to the extent we have agreed to fund the deficit. The effect on net assets is a reduction of £1.7m at 31 July 2015 (1 August 2014: £0.8m). Details of Deferred Capital Grants the assumptions and movement in the provision year on year are included in both note 19 and note 27 to the accounts. Restricted Reserves 66,479 (66,479) - 67,923 (67,923) - Income and expenditure reserve - Due to the criteria set out in FRS 102 the University has reviewed its treatment and classification of endowment balances. endowment reserve 21 913 (284) 629 1,016 (298) 718 This resulted in both a write off of £0.2m through prior period reserves and a reclassification of £0.1m from endowment Income and expenditure reserve - reserves to restricted reserves, as these funds now meet the definition of a restricted donation. The overall effect of a £0.3m restricted reserve 22 - 56 56 - 60 60 reduction in the endowment reserve and a £0.1m increase in the restricted reserve is reflected in our transition balance Unrestricted Reserves sheet. Income and expenditure reserve - unrestricted 187,495 62,439 249,934 198,407 62,165 260,572 Revaluation reserve 105,363 2 105,365 122,919 (24,837) 98,082 The £62.4m increase in unrestricted reserves is due to the adjustments detailed above and on the notes to the income ______statement transition from UK GAAP to FRS 102. Total Reserves 360,250 (4,266) 355,984 390,265 (30,833) 359,432 ______Effect of STRGL transition to Notes to the reconciliation of reserves Notes 2007 SORP Items* 2015 SORP 2015 SORP Adjustments to fixed assets result from both the recognition of additional finance leases, the restatement of land and £’000 £’000 £’000 £’000 buildings to a deemed cost basis with a new economic life assessed at 50 years and the transfer of assets held for sale to fixed assets. The combined effect of these adjustments are a decrease of £6.6m on the statement of financial position as at Income 31 July 2015 (2014: increase £21.6m). Tuition fees and education contracts 1 209,306 - 202 209,508 Funding body grants 2 31,326 - 1,451 32,777 The leases are for multi-functional devices and computer equipment with durations of 3 to 6 years. Assets with a net Research grants and contracts 3 6,106 - - 6,106 book value of £1.5m were reflected in the opening balance sheet and additions of £0.4m recognised in the year ended 31 Other income 4 22,828 - 5,855 28,683 July 2015. The depreciation charge on these assets was £0.8m. A liability of £1.6m has been recognised at 1 August 2014 Investment income 5 1,065 - (429) 636 reducing to £1.1m by 31 July 2015. This has been split between less than and greater than one year. Donations and endowments 6 8 - 113 121 ______The adjustment for the reclassification of assets held for sale to fixed assets was £16.8m (2014: £19.0m). Total income 270,639 - 7,192 277,831

The remaining movement in fixed assets is due to recognition of assets at deemed cost from the date of transition 1 August 2014. Taking advantage of paragraph 35.10, section (d) of FRS 102 this resulted in a reduction in balance sheet cost of £23.8m Expenditure but an increase in NBV of £1.1m. At 31 July 2015 under UK GAAP the University recognised a revaluation adjustment of Staff costs 7 151,138 - 1,132 152,270 £24.6m which has been reversed in full to align with the University’s new FRS 102 accounting policies. The impact of a Other operating expenses 85,192 - 5,176 90,368 reduction in asset value having the effect of reducing future depreciation has been offset by also reducing the economic Depreciation 10,167 - 1,702 11,869 life of all freehold land and buildings to 50 years. The net effect on net book value of assets at 31 July 2015 as a result of all Accelerated depreciation 7,319 - (21) 7,298 these changes is a reduction of £24.4m. This reduction in the useful economic life of assets has been reflected in the value of Interest and other finance costs 8 1,891 - 4,129 6,020 the transfer from revaluation to general reserves each year end. The effect at 31 July 2015 is a further movement of £0.2m. ______Total expenditure 255,707 - 12,118 267,825 The reduction of £1.7m in non-current asset investments at 1 August 2014 and 31 July 2015 is due to a derecognition on consolidation of the investment in the Sugden Sports Trust as per paragraph 15.3 of FRS 102; this investment meets the Gain on disposal of fixed assets 8,560 - - 8,560 definition of a joint venture. The joint venture balance of £1.9m at 1 August 2014 and 31 July 2015 is made up of the £1.7m Share of operating (deficit) in joint venture - - (5) (5) cost of the investment and £0.2m share of the joint venture’s operating surplus since inception. The additional £0.1m Share of operating surplus in associate - - 19 19 Investment in associate at 1 August 2014 and 31 July 2015 is the recognition of the University’s 20% share in the Corridor, ______Manchester which meets the definition of an associate as per paragraph 14.3 of FRS 102. Surplus before tax 23,492 - (4,912) 18,580 Taxation 10 (148) - - (148) A transfer of £25.0m as at both 1 August 2014 and 31 July 2015 from investments to cash arises as a result of a change ______in the definition of cash and cash equivalents as per paragraph 7.2 of FRS 102. These figures reflect the proportion of our Surplus for the year 23,344 - (4,912) 18,432 investment balance that had a maturity date fewer than 3 months after the date of acquisition of the investment. The remaining £0.9m and £1.0m increase in the cash balance in the two respective periods arises from the recognition of endowment assets within their appropriate financial statement line items on the face of the balance sheet. As at 1 August Actuarial (loss)/gain in respect of pension schemes 28 - (19,457) 4,473 (14,984) 2014 and 31 July 2015, the entirety of our endowment asset balance was cash. Unrealised surplus on revaluation of fixed assets - 24,571 (24,571) - New endowments - 113 (113) - The increase in the valuation of trade and other receivables as at 31 July 2015 by £0.5m (2014: £0.6m), reflects a prepayment ______relating to holiday pay. FRS 102 requires short-term employee benefits to be charged to the income and expenditure account Total comprehensive income for the year 23,344 5,227 (25,123) 3,448 as the employee service is received. On transition to FRS 102 this has resulted in the University recognising a liability for holiday pay of £5.4m within short-term creditors in addition to the aforementioned prepayment. Previously holiday pay costs were not recognised and were charged as they were paid. In the year to 31 July 2015 an additional net charge of £0.2m was * This column represents items that were previously recorded within the Statement of Total Recognised Gains and Losses recognised in the income and expenditure account, reflecting a decrease in the value of the prepayment while the accrual (STRGL) and are now recorded within the statement of Comprehensive Income (SoCI). increased by c. £0.1m. The cumulative effect on reserves at 31 July 2015 is £5.0m.

74 | Financial Statements Financial Statements | 75 The Manchester Metropolitan University Notes to the Accounts for the year ended 31 July 2016

30 Transition to FRS102 and the 2015 SORP (continued) 31 Related Party Transactions

Members of the Board of Governors are required to declare any outside interests. When an item arises in which a Notes to the reconciliation of surplus member has a pecuniary, business, family or other personal interest, it must be declared and the member concerned The funding body grant reduction is driven by change in accounting policy from accruals to performance model may not take part in the consideration of the matter nor vote on it. The Board of Governors has considered the for capital grants. New grants received in the period are for £2.9m which have been recognised on entitlement financial effect of all transactions involving organisations in which a member of the Board of Governors may have an and fully utilised in the year. Under the accruals model £1.4m would have been recognised based on deferring the interest. It is confirmed that these are conducted at arm’s length and in accordance with the University’s Financial grant and releasing in line with depreciation, but this full balance was released into prior period reserves as part Regulations. Significant transactions were: of the opening balance sheet adjustment. A further £7,000 reduction has been made to non-government capital grants within other income based on the policy change noted above. 2015/16 2015/16 2014/15 2014/15 Investment income reduction is largely driven by a change in the treatment of the GMPF pension. Under Income Expenditure Income Expenditure previous UK GAAP the company recognised an expected return on defined benefit plan assets in the income £’000 £’000 £’000 £’000 and expenditure account. Under FRS 102 a net interest expense, based on the net defined benefit liability, is Sugden Sports Trust 89 175 111 175 recognised in the income and expenditure account. There has been no change in the defined benefit liability at Corridor Manchester 5 50 6 50 either 1 August 2014 or 31 July 2015. The effect has been to reduce the credit to the income and expenditure MMU Students’ Union 730 1,653 429 1,675 account by £4.5m and increase the credit in other comprehensive income by an equivalent amount. Of this £4.5m UNIAC - 160 - 190 debit, £0.4m reduces the investment income line, the remaining £4.1m increases the interest charge in the year.

The increase of £0.1m in donation and endowment income is a result of the new treatment of non-exchange transactions under the performance method. On this basis new endowments in the year, which have restrictions 2015/16 2015/16 2014/15 2014/15 but no performance conditions, are recognised as part of income rather than within an endowment line on the Debtor Creditor Debtor Creditor face of the balance sheet. The net impact on reserves, however, is nil. £’000 £’000 £’000 £’000 Sugden Sports Trust 1,724 58 1,687 58 Adjustments to staff costs are driven by changes to pension accounting under FRS 102; £1.0m increase driven Corridor Manchester - 378 - 404 by increase in USS liability. This arises as a result of the 2015 valuation undertaken which increased the agreed MMU Students’ Union 3 20 9 17 deficit to be funded by c. £2.4m across the sector and therefore increased proportionally the University’s share of UNIAC 13 - 2 - that deficit. The additional £0.1m is the impact of the year-on-year net movement in the holiday pay accrual and prepayment. The University also acts as an agent for UNIAC providing payroll services. At the year end £13,000 (2014/15: £2,000) The £0.9m reduction in other operating expenses relates to the recognition of multi-functional devices and was outstanding in respect of these services. computer finance lease liabilities as outlined in the notes to the reconciliation of reserves. We have therefore replaced lease payments with imputed interest of £0.1m and depreciation of £0.8m in the income and expenditure account.

The remaining £0.9m adjustment to depreciation line and the further reduction in accelerated depreciation of £21,000 relates solely to the change in assumed economic life of land and buildings, determined as part of restatement of asset values at the date of transition to FRS102. This is covered in greater detail under the notes to the reconciliation of reserves.

The share in operating deficit in joint venture of £5,000 is the University’s 50% share of the Sugden Sports Trust operating deficit for 2015. The share of associates operating surplus of £19,000 is the University’s share of The Corridor Manchester operating surplus for 2015.

76 | Financial Statements Financial Statements | 77 The Manchester Metropolitan University

Senior Officers Pro-Vice-Chancellors, Board of Governors Provost and Deans 2015/16 Chancellor Dame D Thompson DBE (to 31 March 2016) of Faculty Ms V Murray OBE (Chair) Lord Mandelson (from 1 April 2016) Mr K Amoah Mensah (from 1 July 2016) Manchester School of Art Pro-Chancellor Professor D Crow BA (Hons) MA (to 10 June 2016) Mr R Andrews V Murray OBE BA (Hons) DESEM FCIM P Macbeth BA MA HEA (from 1 June 2016) (Interim) Mr L Bartlett (from 1 July 2016) Vice-Chancellor Faculty of Business and Law Professor M Press BSc PhD Professor J Clarke BA ACA PGCHE Mr T Davison Deputy Vice-Chancellor MMU Cheshire Mrs J Dawson Professor J N Ezingeard IngDip Msc PhD FRSA Professor J Haddock-Fraser BA (Hons) Oxon MSc MBA PhD Professor C Fox Deputy Vice-Chancellor Student Success Faculty of Education Dr M Guzkowska QVRM TD AKC MSc MBA DPhil FRGS Professor K Faulks BA PGCE PhD FRSA (to 30 November 2015) Mr N Harrison Health, Psychology and Social Care Mr B Harwood Pro-Vice-Chancellor for Education Professor A Chambers MCSP FHEA Med EdD Professor H Laville BA (Hons) PhD (from 1 May 2016) Ms P Macbeth (from 1 April 2016) Hollings Pro-Vice-Chancellor for Research and C Renfrew BA (Hons) MA CertEd FRSA Knowledge Exchange Mr F McDwyer (to 31 March 2016) Professor R Greene BSc PhD MB BS MBA FHEA FAS Humanities, Languages and Social Science Professor Sir D Melville CBE (from 28 March 2016) Professor S Handley BA PhD Mr E Michaels (to 30 June 2016) Director of Finance Science and Engineering J Cunningham BA (Hons) FCCA Professor P Wheater GIBiol MSc PhD CSci PFHEA Mr B Mistry FSB FRGS FIEnvSc Director of Human Resources Mr S Oliver (to 31 July 2016) A Bowles BA MBA FCIPD Pro-Vice-Chancellor for Students P Renwick MA PgDip FCPodMed FHEA DPodM MChS Registrar Mr M Perls (from 21 March 2016) Professor K Moore BSc PhD Professor M Press Director of Services P Kingsmore BA MBA PgDip FIMechE FIHEEM Mrs C Rigby

Director of Marketing, Communications Mr I Roberts (from 1 April 2016) and Development G Hughes BSc (Econ) MA MCIM (to 29 February 2016) Mrs C Roche

Mr M St John Qualter

Mr J Stephen (to 30 June 2016)

Mr J Varney

Dr D Wright (to 31 March 2016)

Ms W Wright OBE

78 | Financial Statements Financial Statements | 79 Manchester Metropolitan University All Saints, Manchester M15 6BH Telephone: 0161 247 2000 Facsimile: 0161 247 6390 Website: www.mmu.ac.uk Enquiries from overseas: +44 (0)161 247 2000 12875_MR