NOTES TO THE ACCOUNTS
NOTE 32 – RELATED PARTY TRANSACTIONS Due to the nature of the University’s operations and the composition of the University Council (with members being drawn from local, public and private sector organisations) it is inevitable that transactions will take place with organisations in which a member of Council may have an interest. All transactions involving organisations in which a member of Council may have an interest are conducted at arm’s length and in accordance with the University’s financial regulations and normal procurement procedures, which require individuals to declare any interest. The University undertakes transactions for architectural services with Lacey Hickie & Caley Limited, a wholly owned subsidiary of LHC Group Limited. These transactions are conducted at arm’s length and in the normal course of business. Mr Peter Lacey, a Pro-Chancellor of the University is a shareholder of LHC Group Limited. During the year an amount of £12,275 (2010: £48,746) was invoiced to the University. The University has taken advantage of the exemption under FRS 8 ‘Related party disclosures’ not to disclose transactions with subsidiaries that are wholly owned. Tremough Campus Services
F I N A N C I A L S TAT E M E N T S
The University holds a 50% share of Tremough Campus Services (TCS), a company limited by guarantee, having no share capital and for which exempt charitable status has been obtained. TCS is a joint venture company owned equally by the University and University College Falmouth (UCF). TCS has been established to operate student and commercial services for the Combined Universities in Cornwall campus at Tremough in Penryn under a combined services agreement and commenced trading in August 2004. During 2009 TCS commenced drawing down a loan with Barclays Bank Plc for new residences. The facility is for £20.5 million and is repayable over 30 years. The University and UCF have jointly and equally guaranteed this facility and also continued to guarantee sums of £9.3 million and £6.25 million each to Lloyds TSB Bank Plc, in respect of the borrowings of £18.6 million and £12.5 million respectively to TCS.
During the year TDV continued to contract for the design and construction of infrastructure, shared and academic spaces for the further development for the Tremough campus. TDV will contract the works with third parties and will recover funds from the University and UCF on the basis of an agreed split of costs and usage of space. The TCS Group has capital commitments as follows: 2011 2010 £’000 £’000 Commitments contracted at 31 July
21,610
2,808
Authorised but not contracted at 31 July
12,013
47,686
33,623
50,494
Amounts authorised are in respect of various construction projects at Tremough, Penryn less commitments to date in TDV. Commitments relate to the construction of the Phase 2A residences together with new construction projects in progress.
65
NOTES TO ACCOUNTS
Tremough Development Vehicle Limited (TDV) is a wholly owned subsidiary of TCS. It was established to provide the construction of the main campus for the Combined Universities in Cornwall project based at Tremough on behalf of the University and UCF. The University and UCF receive capital grants that are released to TDV to fund the academic development at the Tremough Campus. TDV is also receiving grants to construct non-academic facilities related to the infrastructure and shared spaces development. These grants are received by TDV acting as an agent for the University and UCF. The grants and related costs are passed to the University and UCF on an agreed 50:50 basis.