Annual Report 2004-2005 Finance

STG 2505 final AM 2/9/05 3:24 pm Page 1
St George’s + Quality healthcare

Annual accounts for the year ended 31 March 2005
St. George's Healthcare NHS Trust - Annual Accounts 2004/05
Directors’ statements
Statement of the Chief Executive’s responsibilities as the
Accountable Officer of the Trust
Contents The Secretary of State has directed that the Chief Executive should be the Accountable
Officer to the Trust. The relevant responsibilities of Accountable Officers, including their
responsibility for the propriety and regularity of the public finances for which they are
2 Directors’ statements answerable, and for the keeping of proper records, are set out in the Accountable
Officers' Memorandum issued by the Department of Health.
5 Auditor’s report to the To the best of my knowledge and belief, I have properly discharged the responsibilities set
members of the board out in my letter of appointment as an accountable officer.
5 Foreword
6 Income and expenditure

account
7 Balance sheet Peter Homa

Chief Executive Date: 14th July 2005
8 Statement of recognised
gains and losses
9 Cash flow statement Statement of directors’ responsibilities in respect of the

accounts
10 Notes to the accounts
The directors are required under the National Health Services Act 1977 to prepare
accounts for each financial year. The Secretary of State, with the approval of the
Treasury, directs that these accounts give a true and fair view of the state of affairs of the
trust and of the income and expenditure of the trust for that period. In preparing those
accounts, the directors are required to:
• apply on a consistent basis accounting policies laid down by the Secretary of State
with the approval of the Treasury
• make judgements and estimates which are reasonable and prudent
• state whether applicable accounting standards have been followed, subject to any
material departures disclosed and explained in the accounts.
The directors are responsible for keeping proper accounting records which disclose with
reasonable accuracy at any time the financial position of the trust and to enable them to
ensure that the accounts comply with requirements outlined in the above mentioned
direction of the Secretary of State. They are also responsible for safeguarding the assets
of the trust and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The directors confirm to the best of their knowledge and belief they have complied with
the above requirements in preparing the accounts.
By order of the Board
Peter Homa Colin Gentile

Chief Executive Date: 14th July 2005 Director of Finance Date:14th July 2005
2
STATEMENT ON INTERNAL CONTROL 2004/05 4 The risk and control framework

The key elements of the Trust’s Risk Management Strategy are to
1 Scope of responsibility manage and control identified risks, whether clinical, non-clinical
The Trust Board is accountable for the organisation’s internal or financial, appropriately. This is achieved through a sound
control systems. As Accountable Officer and Chief Executive of organisational framework, which promotes early identification of
this Board, I have responsibility for maintaining a sound system of risk, the co-ordination of risk management activity, the provision
internal control that supports the achievement of the organi- of a safe environment for staff and patients, and the effective use
sation’s policies, aims and objectives. I am also personally of financial resources. It ensures staff are aware of their roles and
responsible for safeguarding the public funds and the organi- responsibilities and outlines the structures and processes through
sation’s assets, as set out in the Accountable Officer which risk is assessed, controlled and managed.
Memorandum.
Risks are identified through feedback from many sources, such as,
Accountability for Risk Management is set out in the Trust’s Risk formal risk assessments, incident reporting, audit data, complaints,
Management Strategy, where Executive responsibilities for specific legal claims, patient and public feedback, stakeholder/partnership
areas of risk are identified. feedback and internal/external assessments.
Improving patient care is an endeavour that the Trust achieves by Risks are evaluated using a recognised risk assessment tool, which
working closely with partner organisations and the South-West assesses the impact and likelihood of the risk occurring using a
London Health Authority. A number of mechanisms are used for scoring system. This score feeds into the decision-making process
partnership work including the Wandsworth Overview & Scrutiny about whether a risk is considered acceptable or unacceptable.
Committee, Patient and Public Involvement activities, the When a risk is accepted control measures are put into place.
Bolingbroke Steering Group, Workforce Confederation, Service Unaccepted risks are tolerated and monitored, not disregarded.
Level Agreement negotiations with local Primary Care Trusts (PCTs) The level of control required is informed by the risk score, the risk
and the Financial Recovery Board. is then prioritised and a designated person is responsible for
2 The purpose of the system of internal control reviewing, reporting, reassessing and monitoring the effectiveness
of the controls.
The system of internal control is designed to manage or mitigate
risk and improve patient care and safety. The system of internal Risk management is embedded within the organisation through
control is based on an ongoing process designed to: the Corporate, Directorate and SDU structures and the reporting
and feedback mechanisms in place. Systems are in place to ensure
• identify and prioritise the risks to the achievement of the
that the necessary risk assessments are carried out, risk registers
organisation’s policies, aims and objectives; and
are maintained, risk plans approved, control measures
• evaluate the probability and potential impact of those risks implemented and monitored, and action plans are reported,
being realised, and to manage them efficiently, effectively and reviewed and monitored. The Corporate Governance directorate,
economically. which includes Risk Management, support staff and disseminate
The system of internal control has been in place in St George’s good practice across the organisation. Involvement in risk
Healthcare NHS Trust for the year ended 31 March 2005 and management activities is also included within the Trust’s objective
embedded up to the date of approval of the annual report and setting and individual performance review of staff and the organi-
accounts. sation’s business planning process.
3 Capacity to handle risk The Trust’s Assurance Framework, based on the Trust’s objectives
and ratified by the Trust Board, is a high-level document based on
The Trust is committed to providing high quality services in a safe
structured and on-going assessment of the key risks to the Trust
and secure environment. As Chief Executive I have overall respon-
achieving its objectives and the controls and assurances
sibility for all risk management and ensuring that the organisa-
mechanisms in place to manage them. The objectives are robust
tional structure and resource is in place to ensure this occurs.
and cover all the organisation’s functions. Material risks, which
Senior leadership in this process is delegated through the
form part of the Principal Risk Register, have also been linked to
Directors and operationalised through the Directorates, Service
the Assurance Framework, as have details of sources of available
Delivery Units (SDUs) and committee structures.
assurances. Action Plans, which are regularly reviewed by the Risk
This system provides a central steer whilst supporting local Management Committee, are in place and regular reports are
ownership in managing and controlling risks to which the Trust made to the Trust Board and the Audit Committee.
may be exposed.
Key stakeholders are involved in the management of risks via
Through the Directorates and SDUs the Trust has systems in place
patient and public involvement activities, patient surveys, public
to identify risks, assess their impact and devise strategies to
Board meetings, the Patient Forum and the local Overview and
manage and evaluate them. Risk management training and
Scrutiny Committee.
education are available for all Trust staff, relevant to their grade
and situation. Expert guidance and facilitation support this Assessment of the Assurance Framework has identified some
function. weaknesses and gaps in control and assurances in relation to
some of the potential risks identified. These are being addressed
Actions taken to reduce risks are regularly monitored, reported
through the Trust’s Assurance Framework Action Plan, covering
and trends analysed, at SDU, Directorate, Corporate Committee
patient related issues of focus, safety, clinical effectiveness, service
and Trust Board level. Evaluation of their effectiveness and the
access and the environment as well as the organisational issues of
implementation of recommendations from external assurance
human resources, governance, performance and finance.
assessments promote both organisational and individual learning
Additional actions include: 3
and the dissemination of good practice within the Trust.
Director’s statements (continued) Information

• Providing high quality accessible information to our patients
and public in general is important to the Trust. Recent
Clinical issues
developments include the publication of descriptive mortality on
• A working group will develop internal measures to assess our intranet pages, and the availability of approved patient
progress in relation to dignity, privacy, consent and confidentiality. information leaflets in over three hundred different areas of
• Communication and provision of information to patients will healthcare.
be improved through the provision of a dedicated patient
information centre and ensuring links to staff objectives and
• An Information Governance action plan is also being
developed. Information Governance Self Assessment will be
appraisals. completed and a remedial action plan will be implemented.
• Child protection arrangements will be strengthened by
implementation and monitoring of part 8 inquiry recommen- 5 Review of effectiveness
dations.
As Accountable Officer, I have responsibility for reviewing the
• Patient outcomes will be further improved through clinical effectiveness of the system of internal control. My review is
audit and clinical outcome measurement linked to the leadership informed in a number of ways. The Head of Internal Audit
programmes for medical staff and the appraisal processes. provides me with an opinion on the overall arrangements for
• Care management across organisational boundaries will be gaining assurance through the Assurance Framework and on the
improved through an audit programme (agreed jointly by South controls reviewed as part of the internal audit work. Directors and
West London Chief Executives and Audit Committees), of long managers within the organisation who have responsibility for the
term medical conditions, audits of discharge documentation and development and maintenance of the system of internal control
care pathways and establishment of a lead Consultant in this provide me with assurance. The Assurance Framework itself
area. provides evidence of the effectiveness of the controls used to
manage the risks to the organisation achieving its principal
• Cross-organisational projects will have risk registers monitored
objectives and these are regularly reviewed.
and managed by the Trust Executive Group.
My review is also informed by external and internal audit reports,
• Waiting times for Consultant-to-Consultant referrals will be
clinical audit reports, reports from external assessments such as
improved through a Consultant review panel and joint referral
protocols with PCTs. Clinical Negligence Scheme for Trusts (CNST) level 2 accreditation,
Patient Environmental Action Team (PEAT), patient surveys, Royal
Estates College reports, staff surveys, Quality Assurance Agency Report,
• A prioritised action plan to be developed and progress reports Improving Working Lives reports and Price Waterhouse Cooper
presented regularly to the Trust Board. Immediate Fire Safety reviews.
issues at Bolingbroke Hospital addressed but outstanding issues to I have been advised on the implications of the result of my review
be taken forward. of the effectiveness of the system of internal control by: the Risk
• Cleanliness issues are being implemented through the Management Department, Directors’ Team, Trust Executive Group,
Matrons’ Charter, involvement of the patients and public in Risk Management Committee, Audit Committee, Clinical
monitoring standards and regular reports to the Trust Board. Governance Committee and the Trust Board.
Action to ensure the continuous improvement of the internal
Public Health
control system is in place. The Board has been engaged in the
• Public support for strategic change will be managed through a development and continuous review of the Assurance Framework.
cross-organisational Programme Board, a lead Director and a It has been scrutinised by the Audit Committee and I have taken
comprehensive communication and involvement strategy. into account the Head of Internal Audit Opinion on the system of
internal control.
Human Resources
• The ‘Agenda For Change’ and ‘Improving Working Lives’ Significant Control Issues
Project Boards are monitoring and overseeing the Electronic Staff
The Trust incurred a significant deficit on income and expenditure
Record system project.
in 2004/05. With the support of the Department of Health and
Governance the Strategic Health Authority, the Trust has engaged external
consultants to assist in the development of a financial turnaround
• Outstanding governance issues will be addressed by the
plan to set out how the Trust will achieve financial balance.
development of an Integrated Governance Plan and other
Progress will be carefully monitored to ensure achievement of
initiatives outlined above.
agreed targets.
Finance
• With the support of the Department of Health and Strategic
Health Authority, the Trust has engaged external consultants to
assist in the development of a financial turnaround plan to set out
how the Trust will achieve financial balance. Peter Homa
4 (on behalf of the Board)

Auditor’s report Foreword to the accounts

Independent Auditors’ Report to Directors of
the Board of St George’s Healthcare NHS Trust
I have audited the financial statements on pages 2 to 31 which have
been prepared in accordance with the accounting policies relevant to These accounts for the year ended 31
the National Health Service as set out on pages 10 to 13.
March 2005 have been prepared by the
This report is made solely to the Board of St George's Healthcare
NHS Trust in accordance with Part II of the Audit Commission Act
St George's Healthcare NHS Trust under
1998 and for no other purpose, as set out in paragraph 54 of the section 98(2) of the National Health
Statement of Responsibilities of Auditors and of Audited Bodies, Service Act 1977 (as amended by
prepared by the Audit Commission.
section 24(2), schedule 2 of the National
Respective Responsibilities of Directors Health Service and Community Care Act
and Auditors
1990) in the form which the Secretary
As described on page 2 the Directors are responsible for the
preparation of the financial statements in accordance with of State has, with the approval of the
directions issued by the Secretary of State. My responsibilities, as Treasury, directed.
independent auditor, are established by statute, the Code of Audit
Practice issued by the Audit Commission and my profession’s
ethical guidance.
I report to you my opinion as to whether the financial statements misstatement, whether caused by fraud or other irregularity or
give a true and fair view of the state of affairs of the Trust and its error. In forming my opinion I also evaluated the overall adequacy
income and expenditure for the year, in accordance with the of the presentation of information in the financial statements.
accounting policies directed by the Secretary of State as being
relevant to the National Health Service in England. Opinion
I review whether the directors’ statement on internal control In my opinion the financial statements give a true and fair view of
reflects compliance with the Department of Health’s guidance the state of affairs of St George's Healthcare NHS Trust as at 31
‘The Statement on Internal Control 2003/2004’ issued on 15 March 2005 and of its income and expenditure for the year then
September 2003 and further guidance issued on 5 April 2005. ended in accordance with the accounting policies directed by the
I report if it does not meet the requirements specified by the Secretary of State as being relevant to the National Health Service
Department of Health or if the statement is misleading or in England.
inconsistent with other information I am aware of from my audit
of the financial statements. I am not required to consider, nor
Certificate
have I considered, whether the directors’ statement on internal
control covers all risks and controls. I am also not required to I certify that I have completed the audit of the accounts in
form an opinion on the effectiveness of the Trust’s corporate accordance with the requirements of the Audit Commission Act
governance procedures or its risk and control procedures. My 1998 and the Code of Audit Practice issued by the Audit
review was not performed for any purpose connected with any Commission.
specific transaction and should not be relied upon for any such
purpose. Susan Exton (District Auditor)
Audit Commission, First Floor, Millbank Tower, Millbank, London,
Basis of audit opinion
SW1P 4HQ
I conducted my audit in accordance with the Audit Commission
Act 1998 and the Code of Audit Practice issued by the Audit Date: 14th July 2005
Commission, which requires compliance with relevant auditing
standards issued by the Auditing Practices Board.
An audit includes examination, on a test basis, of evidence
relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant
estimates and judgements made by the Directors in the
preparation of the financial statements, and of whether the
accounting policies are appropriate to the Trust's circumstances,
consistently applied and adequately disclosed.
I planned and performed my audit so as to obtain all the
information and explanations which I considered necessary in
order to provide me with sufficient evidence to give reasonable
assurance that the financial statements are free from material
5
Income and expenditure account
for the year ended 31 March 2005 2004/05 2003/04
NOTE £000 £000

Income from activities 3 260,935 244,682
Other operating income 4 72,597 72,359
Operating expenses 5-7 (349,182) (312,181)

__________ __________
OPERATING SURPLUS/(DEFICIT) (15,650) 4,860
Cost of fundamental reorganisation/restructuring 0 0
Profit (loss) on disposal of fixed assets 8 (460) (123)

__________ __________
SURPLUS/(DEFICIT) BEFORE INTEREST (16,110) 4,737
Interest receivable 422 456
Interest payable 9 (2) 0
Other finance costs - unwinding of discount (58) (58)

Other finance costs - change in discount rate on provisions 0 0
__________ __________
SURPLUS/(DEFICIT) FOR THE FINANCIAL YEAR (15,748) 5,135
Public Dividend Capital dividends payable (5,908) (5,785)

__________ __________
RETAINED SURPLUS/(DEFICIT) FOR THE YEAR (21,656) (650)
__________ __________
The notes on pages 10 to 31 form part of these accounts.

All income and expenditure is derived from continuing operations.
£000
RETAINED SURPLUS/(DEFICIT) FOR THE YEAR - (21,656)

Financial support included in retained surplus / (deficit) for the year -
NHS Bank 0
Financial support included in returned surplus/(deficit) for the year -
Internally generated 0
__________
RETAINED SURPLUS/(DEFICIT) FOR THE YEAR
EXCLUDING FINANCIAL SUPPORT (21,656)
__________
6
Balance sheet
as at 31 March 2005 31 March 2005 31 March 2004
NOTE £000 £000
FIXED ASSETS
Intangible assets 10 627 814
Tangible assets 11 250,225 192,560
Investments 14.1 0 0
__________ __________
250,852 193,374
CURRENT ASSETS
Stocks and work in progress 12 4,331 4,273
Debtors 13 37,226 32,566
Investments 14.2 0 0
Cash at bank and in hand 18.3 68 68
__________ _________
41,625 36,907
CREDITORS: Amounts falling due within one year 15 (61,558) (45,369)

__________ _________
NET CURRENT ASSETS/(LIABILITIES) (19,933) (8,462)
__________ _________
TOTAL ASSETS LESS CURRENT LIABILITIES 230,919 184,912
CREDITORS: Amounts falling due after more than

one year 15 0 0
PROVISIONS FOR LIABILITIES AND CHARGES 16 (5,338) (3,908)

__________ _________
TOTAL ASSETS EMPLOYED 225,581 181,004
__________ _________
FINANCED BY:
TAXPAYERS’ EQUITY
Public dividend capital 22 116,688 104,771
Revaluation reserve 17 103,729 50,123
Donated asset reserve 17 15,789 14,368
Government grant reserve 17 854 816
Other reserves 17 1,150 1,150
Income and expenditure reserve 17 (12,629) 9,776
__________ __________
TOTAL TAXPAYERS’ EQUITY 225,581 181,004
__________ __________
Peter Homa
7
Statement of total recognised gains and losses
£000 £000
Surplus/(deficit) for the financial year before dividend payments (15,748) 5,135
Fixed asset impairment losses 0 0
Unrealised surplus/(deficit) on fixed asset revaluations/indexation 54,758 13,578
Increases in the donated asset and government grant reserve due to 1,188 1,956
receipt of donated and government grant financed assets
Reductions in the donated asset and government grant reserve due to

the depreciation, impairment and disposal of donated and (1,630) (1,301)
government grant financed assets
Additions/(reductions) in "other reserves" 0 0

__________ __________
Total recognised gains and losses for the financial year 38,568 19,368
Prior period adjustment 0 0

__________ __________
Total gains and losses recognised in the financial year 38,568 19,368
__________ __________
8
Cash flow statement
NOTE £000 £000

OPERATING ACTIVITIES
Net cash inflow(outflow) from operating activities 18.1 4,126 18,679
RETURNS ON INVESTMENTS AND

SERVICING OF FINANCE:
Interest received 371 426
Interest paid (2) 0
Interest element of finance leases 0 0
__________ __________
Net cash inflow/(outflow) from returns on
investments and servicing of finance 369 426
CAPITAL EXPENDITURE
(Payments) to acquire tangible fixed assets (10,265) (14,409)
Receipts from sale of tangible fixed assets 0 3,663
(Payments) to aquire intangible assets (239) (206)
Receipts from sale of intangible assets 0 0
(Payments to acquire)/receipts from sale of fixed asset investments 0 0
__________ __________
Net cash inflow (outflow) from capital expenditure (10,504) (10,952)
DIVIDENDS PAID (5,908) (5,785)
Net cash inflow/(outflow) before management of (11,917) 2,368

liquid resources and financing __________ __________
MANAGEMENT OF LIQUID RESOURCES

Purchase of current asset investments 0 0
Sale of current asset investments 0 0
Net cash inflow (outflow) from management of liquid resources 0 0

__________ __________
Net cash inflow (outflow) before financing (11,917) 2,368
__________ __________
FINANCING
Public dividend capital received 22,917 0
Public dividend capital repaid (not previously accrued) (11,000) (2,363)
Public dividend capital repaid (accrued in prior period) 0 0
Loans received 0 0
Loans repaid 0 0
Other capital receipts 0 0
Capital element of finance lease rental payments 0 0
Cash transferred (to)/from other NHS bodies 0 0
__________ __________
Net cash inflow (outflow) from financing 11,917 (2,363)
__________ __________
Increase (decrease) in cash 0 5
__________ __________
9
Notes to the Accounts incurred. They are amortised over the shorter of the term of the
licence and their useful economic lives.
1.5 Tangible fixed assets

Capitalisation
1. Accounting Policies Tangible assets are capitalised if they are capable of being
The Secretary of State for Health has directed that the financial used for a period which exceeds one year:
statements of NHS trusts shall meet the accounting requirements
- individually have a cost of at least £5,000; or
of the NHS trusts Manual for Accounts which shall be agreed
with HM Treasury. Consequently, the following financial - collectively have a cost of at least £5,000 and individually
statements have been prepared in accordance with the 2004/05 have a cost of more than £250, where the assets are functionally
NHS Trusts Manual for Accounts issued by the Department of interdependent, they had broadly simultaneous purchase dates,
Health. The accounting policies contained in that manual follow are anticipated to have simultaneous disposal dates and are
UK generally accepted accounting practice for companies (UK under single managerial control; or
GAAP) and HM Treasury's Resource Accounting Manual to the - form part of the initial equipping and setting-up cost of a
extent that they are meaningful and appropriate to the NHS, as new building, ward or unit irrespective of their individual or
determined by HM Treasury, which is advised by the Financial collective cost.
Reporting Advisory Board. The accounting policies have been
Expenditure on digital hearing aids in the year ended 31 March
applied consistently in dealing with items considered material in
2004 (but not in earlier years) was treated as capital expenditue,
relation to the accounts.
in accordance with the amendment to the Capital Accounting
Manual issued in July 2003, giving rise to an increase in fixed
1.1 Accounting convention
assets regardless of the cost of the individual hearing aids.
These accounts have been prepared under the historical cost Subsequent purchases of digital hearing aids are capitalised only
convention modified to account for the revaluation of fixed when the total value is greater than £5,000. Where small
assets at their value to the business by reference to their current numbers of appliances are purchased the costs are expensed as
costs. NHS Trusts are not required to provide a reconciliation incurred.
between current cost and historical cost surpluses and deficits.
Valuation
1.2 Acquisitions and discontinued operations Tangible fixed assets are stated at the lower of replacement cost
Activities are considered to be 'acquired' only if they are acquired and recoverable amount. On initial recognition they are
from outside the public sector. Activities are considered to be measured at cost (for leased assets, fair value) including any
'discontinued' only if they cease entirely. They are not considered costs such as installation directly attributable to bringing them
to be 'discontinued' if they transfer from one public sector body into working condition. They are restated to current value each
to another. year. The carrying values of tangible fixed assets are reviewed for
impairment in periods if events or changes in circumstances
1.3 Income Recognition indicate the carrying value may not be recoverable.
Income is accounted for applying the accruals convention. The All land and buildings are restated to current value using profes-
main source of income for the Trust is from commissioners in sional valuations in accordance with FRS15 every five years and
respect of healthcare services provided under local agreements. in the intervening years by the use of indices. The buildings
Income is recognised in the period in which services are provided. index is based on the All in Tender Price Index published by the
Where income is received for a specific activity which is to be Building Cost Information Service (BCIS). The land index is based
delivered in the following financial year, that income is deferred. on the residential building land values reported in the Property
Market Report published by the Valuation Office.
1.4 Intangible fixed assets Professional valuations are carried out by the District Valuers of
Intangible assets are capitalised when they are capable of being the Inland Revenue Government Department. The valuations
used in a Trust's activities for more than one year; they can be are carried out in accordance with the Royal Institute of
valued; and they have a cost of at least £5,000. Chartered Surveyors (RICS) Appraisal and Valuation Manual
insofar as these terms are consistent with the agreed
Intangible fixed assets held for operational use are valued at
requirements of the Department of Health and HM Treasury. In
historical cost and are depreciated over the estimated life of the
accordance with the requirements of the Department of Health,
asset on a straight line basis, except capitalised Research and
the last asset valuations were undertaken in 2004 as at the
Development which is revalued using an appropriate index
prospective valuation date of 1 April 2005 and were applied on
figure. The carrying value of intangible assets is reviewed for
the 31 March 2005.
impairment at the end of the first full year following acquisition
and in other periods if events or changes in circumstances The valuations are carried out primarily on the basis of
indicate the carrying value may not be recoverable. Depreciated Replacement Cost for specialised operational property
and Existing Use Value for non-specialised operational property.
Purchased computer software licences are capitalised as
The value of land for existing use purposes is assessed at Existing
intangible fixed assets where expenditure of at least £5,000 is
Use Value. For non-operational properties including surplus land,
10
the valuations are carried out at Open Market Value. Where the useful economic life of an asset is reduced from that
initially estimated due to the revaluation of an asset for sale,
Additional alternative Open Market Value figures have only been
depreciation is charged to bring the value of the asset to its
supplied for operational assets once they have been taken out of
value at the point of sale.
operational use and subsequently disposed of.
Where, under Financial Reporting Standard 11, a fixed asset
All adjustments arising from indexation and five-yearly revalu-
impairment is charged to the Income and Expenditure Account,
ations are taken to the Revaluation Reserve. All impairments
offsetting income may be paid by the Trust's main commissioner
resulting from price changes are charged to the Statement of
using funding provided by the NHS Bank.
Total Recognised Gains and Losses. Falls in value when newly
constructed assets are brought into use are also charged there.
These falls in value result from the adoption of ideal conditions 1.6 Donated fixed assets
as the basis for depreciated replacement cost valuations. Donated fixed assets are capitalised at their current value on
Assets in the course of construction are valued at current cost receipt and this value is credited to the Donated Asset Reserve.
using the indices as for land and buildings, as above. These Donated fixed assets are valued and depreciated as described
assets include any existing land or buildings under the control of above for purchased assets. Gains and losses on revaluations are
a contractor. also taken to the Donated Asset Reserve and, each year, an
amount equal to the depreciation charge on the asset is released
Residual interests in off-balance sheet Private Finance Initiative
from the Donated Asset Reserve to the Income and Expenditure
properties are included in tangible fixed assets as 'assets under
account. Similarly, any impairment on donated assets charged to
construction and payments on account' where the PFI contract
the Income and Expenditure Account is matched by a transfer
specifies the amount, or nil value at which the assets will be
from the Donated Asset Reserve. On sale of donated assets, the
transferred to the Trust at the end of the contract. The residual
value of the sale proceeds is transferred from the Donated Asset
interest is built up, on an actuarial basis, during the life of the
Reserve to the Income and Expenditure Reserve.
contract by capitalising part of the unitary charge so that at the
end of the contract the balance sheet value of the residual value
1.7 Government Grants
plus the specified amount equal the expected fair value of the
residual asset at the end of the contract. The estimated fair Government grants are grants from government bodies other
value of the asset on reversion is determined by the District than funds from NHS bodies or funds awarded by Parliamentary
Valuer based on Department of Health guidance. The District Vote. The government grants reserve is maintained at a level
Valuer should provide an estimate of the anticipated fair value of equal to the net book value of the assets which it has financed.
the assets on the same basis as the District Valuer values the NHS
Trust's estate. 1.8 Private Finance Initiative (PFI) transactions
Operational equipment other than IT equipment, which is The NHS follows HM Treasury's Technical Note 1 (Revised) "How
considered to have nil inflation, is valued at net current to Account for PFI transactions" which provides definitive
replacement cost through annual uplift by the change in the guidance for the application of the FRS 5 Amendment and the
value of the GDP deflator. Equipment surplus to requirements is guidance 'Land and Buildings in PFI schemes Version 2.”
valued at net recoverable amount. PFI schemes under which the PFI operator receives an
annual payment from the Trust for the services provided
Depreciation, amortisation and impairments
by the PFI operator.
Tangible fixed assets are depreciated at rates calculated to write Where the balance of the risks and rewards of ownership of the
them down to estimated residual value on a straight-line basis PFI property are borne by the PFI operator, the PFI obligations are
over their estimated useful lives. No depreciation is provided on recorded as an operating expense. Where the trust has
freehold land and assets surplus to requirements. contributed assets, a prepayment for their fair value is recognised
Assets in the course of construction and residual interests in off- and amortised over the life of the PFI contract by charge to the
balance sheet PFI contract assets are not depreciated until the Income and Expenditure Account. Where, at the end of the PFI
asset is brought into use or reverts to the Trust, respectively. contract, a property reverts to the Trust, the difference between
the expected fair value of the residual on reversion and any
Buildings, installations and fittings are depreciated on their
agreed payment on reversion is built up over the life of the
current value over the estimated remaining life of the asset as
contract by capitalising part of the unitary charge each year, as a
advised by the District Valuer. Leaseholds are depreciated over
tangible fixed asset.
the primary lease term.
Where the balance of risks and rewards of ownership of the PFI
Equipment is depreciated on current cost evenly over the
property are borne by the trust, it is recognised as a fixed asset
estimated life of the asset.
along with the liability to pay for it which is accounted for as a
Impairment losses resulting from short-term changes in price finance lease. Contract payments are apportioned between an
that are considered to be recoverable in the longer term are imputed finance lease charge and a service charge.
taken in full to the revaluation reserve. These include
impairments resulting from the revaluation of fixed assets from 1.9 Stocks and work-in-progress
their cost to their value in existing use when they become
operational. This may lead to a negative revaluation reserve in Stocks and work-in-progress are valued at the lower of cost and
certain instances. net realisable value. This is considered to be a reasonable
11
approximation to current cost due to the high turnover of stocks. Non-clinical risk pooling
Work-in-progress comprises goods in intermediate stages of
The Trust participates in the Property Expenses Scheme and the
production. Partially completed contracts for patient services
Liabilities to Third Parties Scheme. Both are risk pooling schemes
are not accounted for as work-in-progress.
under which the Trust pays an annual contribution to the NHS
Litigation Authority and, in return, receives assistance with the
1.10 Research and development
costs of claims arising. The annual membership contributions,
Expenditure on research is not capitalised. Expenditure on and any ‘excesses’ payable in respect of particular claims are
development is capitalised if it meets the following criteria: charged to operating expenses as and when they become due.
- there is a clearly defined project;
- the related expenditure is separately identifiable;
1.12 Pension costs
- the outcome of the project has been assessed with Past and present employees are covered by the provisions of the
reasonable certainty as to: NHS Pensions Scheme. The Scheme is an unfunded, defined
benefit scheme that covers NHS employers, General Practices and
- its technical feasibility; other bodies, allowed under the direction of the Secretary of
- its resulting in a product or service which will eventually be State, in England and Wales. As a consequence it is not possible
brought into use; for the Strategic Health Authority to identify its share of the
- adequate resources exist, or are reasonably expected to be underlying scheme assets and liabilities. Therefore the scheme is
available to enable the project to be completed and to accounted for as a defined contribution scheme and the cost of
provide any consequential increases in working capital. the scheme is equal to the contributions payable to the scheme
for the accounting period. The total employer contribution
Expenditure so deferred is limited to the value of future benefits payable in 2004-05 was £18,179,075 (2003-04 £8,251,473).
expected and is amortised through the income and expenditure
account on a systematic basis over the period expected to The Scheme is subject to a full valuation by the Government
benefit from the project. It is revalued on the basis of current Actuary every four years which is followed by a review of the
cost. The amortisation charge is calculated on the same basis as employer contribution rates. The last valuation took place as at
used for depreciation i.e. on a quarterly basis. Expenditure 31 March 2003 and has yet to be finalised. The last published
which does not meet the criteria for capitalisation is treated as valuation covered the period 1 April 1994 to 31 March 1999.
an operating cost in the year in which it is incurred. NHS Trusts Between valuations the Government Actuary provides an update
are unable to disclose the total amount of research and of the scheme liabilities on an annual basis. The latest
development expenditure charged in the income and assessment of the liabilities of the Scheme is contained in the
expenditure account because some research and development Scheme Actuary report, which forms part of the NHS Pension
activity cannot be separated from patient care activity. Scheme (England and Wales) Resource Account, published
annually. These accounts can be viewed on the NHS Pensions
Fixed assets acquired for use in research and development are Agency website at www.nhspa.gov.uk. Copies can also be
amortised over the life of the associated project. obtained from The Stationery Office.
1.11 Provisions The conclusion of the 1999 valuation was that the scheme
continues to operate on a sound financial basis and the notional
The Trust provides for legal or constructive obligations that are of
surplus of the scheme is £1.1 billion. It was recommended that
uncertain timing or amount at the balance sheet date on the
employers' contributions remain at 7% of pensionable pay until
basis of the best estimate of the expenditure required to settle
31 March 2003 and then be increased to 14% of pensionable
the obligation. Where the effect of the time value of money is
pay with effect from 1 April 2003. On advice from the actuary
material, the estimated risk-adjusted cash flows are discounted
the contribution may be varied from time to time to reflect
using the Treasury's discount rate of 3.5% in real terms.
changes in the scheme's liabilities. Employees pay contributions
of 6% (manual staff 5%) of their pensionable pay.
Clinical negligence costs
NHS bodies are directed by the Secretary of State to charge
The NHS Litigation Authority (NHSLA) operates a risk pooling
employer’s pension costs contributions to operating expenses as
scheme under which the NHS Trust pays an annual contribution
and when they become due. Until 2002-03 HM Treasury paid
to the NHSLA which in return settles all clinical negligence
the Retail Price Indexation costs of the NHS Pension scheme
claims. Although the NHSLA is administratively responsible for
direct but as part of the Spending Review Settlement, these costs
all clinical negligence cases the legal liability remains with the
have been devolved in full. For 2003-04 the additional funding
Trust. The total value of clinical negligence provisions carried by
was retained as a Central Budget by the Department of Health
the NHSLA on behalf of the Trust is disclosed at note 16.
and was paid direct to the NHS Pensions Agency and the
Since financial responsibility for clinical negligence cases employers' contribution remained at 7%. From 2004-05 this
transferred to the NHSLA at 1 April 2002, the only charge to funding was devolved in full to NHS Pension Scheme employers
operating expenditure in relation to clinical negligence in and the employers' contribution rate rose to 14%.
2004/05 relates to the Trust's contribution to the Clinical
Negligence Scheme for Trusts.
12
The scheme is a "final salary" scheme. Annual pensions are 1.16 Third Party Assets
normally based on 1/80th of the best of the last 3 years
Assets belonging to third parties (such as money held on behalf
pensionable pay for each year of service. A lump sum normally
of Patients) are not recognised in the accounts since the Trust
equivalent to 3 years pension is payable on retirement. Annual
has no beneficial interest in them. Details of third party assets
increases are applied to pension payments at rates defined by
are given in Note 28 to the accounts.
the Pensions (Increase) Act 1971, and are based on changes in
retail prices in the twelve months ending 30 September in the
previous calendar year. On death, a pension of 50% of the 1.17 Leases
member's pension is normally payable to the surviving spouse. Where substantially all risks and rewards of ownership of a
Early payment of a pension, with enhancement, is available to leased asset are borne by the NHS Trust, the asset is recorded as
members of the Scheme who are permanently incapable of a tangible fixed asset and a debt is recorded to the lessor of the
fulfilling their duties effectively through illness or infirmity. minimum lease payments discounted by the interest rate implicit
Additional pension liabilities arising from early retirement are not in the lease. The interest element of the finance lease payment is
funded by the scheme except where the retirement is due to ill- charged to the Income and Expenditure Account over the period
health. For early retirements not funded by the scheme, the full of the lease at a constant rate in relation to the balance
amount of the liability for the additional costs is charged to the outstanding. Other leases are regarded as operating leases and
Operating Cost Statement account at the time the Authority the rentals are charged to the Income and Expenditure Account
commits itself to the retirement, regardless of the method of on a straight-line basis over the term of the lease.
payment.
1.18 Public Dividend Capital (PDC)
A death gratuity of twice final years pensionable pay for death in
service, and up to five times their annual pension for death after and PDC Dividend
retirement, less pensions already paid, subject to a maximum Public Dividend Capital represents the outstanding public debt of
amount equal to twice the member's final years pensionable pay an NHS Trust. At any time the Secretary of State can issue new
less their retirement lump sum for those who die after retirement PDC to, and require repayments of PDC from, the NHS Trust.
is payable.
A charge, reflecting the forecast cost of capital utilised by the
The Scheme provides the opportunity to members to increase NHS Trust, is paid over as public dividend capital dividend. The
their benefits through money purchase Additional Voluntary charge is calculated at the real rate set by HM Treasury (currently
Contributions (AVCs) provided by an approved panel of life 3.5%) on the forecast average carrying amount of all assets less
companies. Under the arrangement the employee/member can liabilities, except for donated assets and cash with the Office of
make contributions to enhance an employee's pension benefits. the Paymaster General. The average carrying amount of assets is
The benefits payable relate directly to the value of the calculated as a simple average of opening and closing relevant
investments made. net assets. For 2004-05 the average carrying amount of assets is
calculated before the national revaluation figures are applied on
1.13 Liquid resources 31 March 2005. A note to the accounts discloses the rate that
Deposits and other investments that are readily convertible into the dividend represents as a percentage of the actual average
known amounts of cash at or close to their carrying amounts are carrying amount of assets less liabilities in the year.
treated as liquid resources in the cashflow statement. The Trust
does not hold any investments with maturity dates exceeding 1.19 Losses and Special Payments
one year from the date of purchase. Losses and Special Payments are charged to the relevant
functional headings on a cash basis, including losses which
1.14 Value Added Tax would have been made good through insurance cover had NHS
Most of the activities of the Trust are outside the scope of VAT Trusts not been bearing their own risks (with insurance premiums
and, in general, output tax does not apply and input tax on then being included as normal revenue expenditure).
purchases is not recoverable. Irrecoverable VAT is charged to the
relevant expenditure category or included in the capitalised
purchase cost of fixed assets. Where output tax is charged or
input VAT is recoverable, the amounts are stated net of VAT.
1.15 Foreign Exchange

Transactions that are denominated in a foreign currency are
translated into sterling at the exchange rate ruling on the dates
of the transactions. Resulting exchange gains and losses are
taken to the Income and Expenditure account.
13
2. Segmental analysis
This note is not applicable for St George's Healthcare NHS Trust as the organisation does not have more than one business segment.
3. Income from activities

2004/05 2003/04
£000 £000
Strategic Health Authorities 625 1
NHS Trusts 9 880
Primary Care Trusts* 256,032 240,153
Foundation Trusts 196 0
Local Authorities 28 0
Department of Health 745 0
NHS Other 167 0
Non NHS:
- Private Patients 2,027 1,516
- Overseas patients (non-reciprocal) 382 0
- Road Traffic Act 679 1,614
- Other 45 518
__________ __________
260,935 244,682
__________ __________
Road Traffic Act income is subject to a provision for doubtful debts to reflect expected rates of collection.
4. Other operating income

2004/05 2003/04
£000 £000
Patient transport services 0 0
Education, training and research 49,602 44,295
Charitable and other contributions to expenditure 525 463
Transfers from donated asset reserve 1,581 1,255
Transfers from government grant reserve 49 46
Non-patient care services to other bodies 3,079 2,529
Other income 17,761 23,771
__________ __________
72,597 72,359
__________ __________
Included in 'Other Income' is £4,451,872 relating to the Central Office for Research Ethics Committee (2003/04: £3,208,000).
14
5. Operating expenses
5.1 Operating expenses comprise: 2004/05 2003/04
£000 £000
Services from other NHS Trusts 2,591 2,292
Services from other NHS bodies 8,898 8,768
Services from Foundation Trusts 329 0
Purchase of healthcare from non NHS bodies 330 0
Directors' costs 1,212 883
Staff costs 224,049 194,030
Supplies and services
- clinical 57,808 53,408
- general 8,964 7,870
Establishment 3,929 3,969
Transport 2,772 2,635
Premises 20,452 16,694
Bad debts 160 620
Depreciation and amortisation 11,375 11,584
Fixed asset impairments and reversals 0 259
Audit fees 118 55
Other auditor's remuneration 114 101
Clinical negligence 5,000 2,479
Other 1,081 6,534
__________ __________
349,182 312,181
__________ __________
5.2 Operating leases

5.2/1 Operating expenses include: 2004/05 2003/04
£000 £000
Hire of plant and machinery 1,962 1,901
Other operating lease rentals 17 20
__________ __________
1,979 1,921
__________ __________
5.2/2 Annual commitments under non - cancellable operating leases are:

Land and buildings Other leases
2004/05 2003/04 2004/05 2003/04
£000 £000 £000 £000
Operating leases which expire:
Within 1 year 0 0 240 238
Between 1 and 5 years 0 0 981 1,121
After 5 years 0 0 900 2,825
________ ________ ________ ________
0 0 2,121 4,184
________ ________ ________ ________
15
5.3 Salary and Pension Entitlements of Senior Managers
A) Remuneration 2004/05 2003/04

Name and Title Salary Other Benefits Salary Other Benefits
(bands of Remuneration in Kind (bands of Remuneration in kind
£5000) (bands of (Rounded to the £5000) (bands of (Rounded to the
£5000) nearest £100) £5000) nearest £100)
£000 £000 £100 £000 £000 £100
Mr Peter Homa, Chief Executive Director 155-160 0-5 0 50-55 0-5 0
Mr Colin Gentile, Director of Finance (from June 2004) 95-100 0-5 0
Mr Kevin Harbottle, Acting Director of Finance (to May 2004) 70-75 0-5 0 75-80 0-5 0
Mrs Marie Grant, Deputy Chief Executive 110-115 0-5 0 90-95 0-5 0
Dr Geraldine Walters, Director of Nursing (from May 2004) 85-90 0-5 0
Ms Sue Cooper, Director of Nursing (to May 2004) 60-65 0-5 0
Mr Christopher Streather, Medical Director 140-145 0-5 0
Mr Mike Bailey, Medical Director 100-105 0-5 0
Miss Patricia Hamilton, Medical Director 205-210 0-5 0
Mr Colin Watts, Director of Human Resources 85-90 0-5 0 75-80 0-5 0
Mrs Janet Hunter, Director of Modernisation (to August 2004) 25-30 0-5 0 75-80 0-5 0
Mrs Karen Castille-Wardle, Director of Service Improvement 20-25 0-5 0
(from January 2005)
Mr Neal Deans, Director of Facilities (from January 2005) 15-20 0-5 0
NON EXECUTIVE DIRECTORS

Mrs Naz Coker,Chairman 20-25 0-5 0 5-10 0-5 0
Professor Sean Hilton, Non-Executive Director 5-10 0-5 0 5-10 0-5 0
Ms Diane Mark, Non-Executive Director 5-10 0-5 0 5-10 0-5 0
Ms Valerie Moore, Non Executive Director (from August 2004) 0-5 0-5 0
Ms Valerie Vaughan - Dick, Non Executive Director 5-10 0-5 0 5-10 0-5 0
Mr David Knowles, Non Executive Director (to July 2004) 0-5 0-5 0 5-10 0-5 0
Mr Michael Rappolt, Non Executive Director (from August 2004) 0-5 0-5 0
B) Pension Benefits
Name and Title Real increase Total accrued Cash Equivalent Cash Equivalent Real Increase Employers
in pension and pension and Transfer Value Transfer Value in Cash Equivalent Contribution to
related lump sum related lump sum at 31 March 2005 at 31 March 2004 Transfer Value Stakeholder
at age 60 at age 60 Pension
(bands of £2500) (bands of £5000) (To nearest £100)
£000 £000 £000 £000 £000 £100
Mr Peter Homa, Chief Executive Director (from December 2003) 125-127.5 185-190 646 200 441 0
Mr Colin Gentile, Director of Finance (from June 2004) 17.5-20 115-120 395 304 82 0
Mr Kevin Harbottle, Acting Director of Finance (to May 2004) 0-2.5 75-80 241 239 5 0
Mrs Marie Grant, Deputy Chief Executive 30-32.5 175-180 722 57 135 0
Dr Geraldine Walters, Director of Nursing (from May 2004) 10-12.5 90-95 333 292 34 0
Ms Sue Cooper, Director of Nursing (to May 2004) 0-2.5 60-65 262 266 0 0
Mr Christopher Streather, Medical Director 17.5-20 80-85 258 193 60 0
Miss Patricia Hamilton, Clinical Director 12.5-15 185-190 780 690 70 0
Mr Colin Watts, Director of Human Resources 10.0-12.5 135-140 623 539 69 0
Mrs Janet Hunter, Director of Modernisation (to August 2004) 5-7.5 50-55 192 164 23 0
Mrs Karen Castille-Wardle, Director of Service Improvement 12.5-15 105-110 369 314 47 0
(from January 2005)
As Non-Executive members do not receive pensionable remuneration, there will be no entries in respect of pensions for Non-Executive members.
A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capital value of the pension scheme benefits accrued by a member at a particular
point in time. The benefits valued are the member's accrued benefits and any contingent spouse's pension payable from the scheme. A CETV is a
payment made by a pension scheme, or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves
a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has
accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which the disclosure applies.
The CETV figures, and from 2004-05 the other pension details, include the value of any pension benefits in another scheme or arrangement which the
individual has transferred to the NHS pension scheme. They also include any additional pension benefit accrued to the member as a result of their
purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated within the guidelines and framework prescribed
by the Institute and Faculty of Actuaries.
Real Increase in CETV - This reflects the increase in CETV effectively funded by the employer. It takes account of the increase in accrued pension due to
inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses
common market valuation factors for the start and end of the period.
16
6. Staff costs and numbers

6.1 Staff costs 2004/05 Permanently 2003/04
Total Employed Other Total
£000 £000 £000 £000

Salaries and wages 192,334 171,401 20,933 173,450
Social Security Costs 14,590 14,590 0 12,986
Employer contributions to NHSPA 18,179 18,179 0 8,293
Other pension costs 134 134 0 162
__________ __________ __________ __________
225,237 204,304 20,933 194,891
__________ __________ __________ __________
The cost of staff capitalised during the year 2004/05 was £188,851 (£303,649 in 2003/04)
6.2 Average number of persons employed
2004/05 Permanently
Total Employed Other 2003/04
Number Number Number Number

Medical and dental 718 663 55 691
Ambulance staff 0 0 0 0
Administration and estates 1,433 1,183 250 1,421
Healthcare assistants & other support staff 192 192 0 204
Nursing, midwifery & health visiting staff 2,243 1,828 415 2,092
Nursing, midwifery & health visiting learners 8 8 0 9
Scientific, therapeutic and technical staff 1,203 1,103 100 1,143
Social care staff 0 0 0 0
Other 0 0 0 0
_____ _____ _____ _____
Total 5,797 4,977 820 5,560
_______ _______ _______ _______
6.3 Employee benefits 2004/05 2003/04

£000 £000
__________ _________
0 0
__________ __________
6.4 Management costs 2004/05 2003/04

£000 £000
Management costs 13,846 10,528

Income 333,532 316,716
6.5 Retirements due to ill-health

During 2004/05 (prior year 2003/04) there were 12 (4) early retirements from the trust agreed on the grounds of ill-health. The
estimated additional pension liabilities of these ill-health retirements will be £549,244 (£169,064). These retirements represented 1.95
per 1,000 active scheme members. The cost of these ill-health retirements will be borne by the NHS Pensions Agency.
17
7. Better Payment Practice Code

7.1 Better Payment Practice Code - measure of compliance
Number £000
Total bills paid in the year 102,583 138,542

Total bills paid within target 81,680 114,772
Percentage of bills paid within target 80% 83%
The Better Payment Practice Code requires the Trust to aim to pay all valid non-NHS invoices by the due date or within 30 days of
receipt of goods or a valid invoice, whichever is later.
7.2 The Late Payment of Commercial Debts (Interest) Act 1998

2004/05 2003/04
£000 £000
Amounts included within Interest Payable (Note 9) arising from claims
made under this legislation 2 0
Compensation paid to cover debt recovery costs under this legislation 0 0
8. Profit (Loss) on Disposal of Fixed Assets

Profit/loss on the disposal of fixed assets is made up as follows:
2004/05 2003/04
£000 £000
Profit on disposal of fixed assets investments 0 0
Loss on disposal of fixed assets investments 0 0
Profit on disposal of intangible fixed assets 0 0
Loss on disposal of intangible fixed assets (17) 0
Profits on disposal of land and buildings 0 0
Loss on disposal of land and buildings (311) 0
Profits on disposal of plant and equipment 0 0
Loss on disposal of plant and equipment (132) (123)
__________ __________
(460) (123)
__________ __________
9. Interest Payable
2004/05 2003/04
£000 £000
Finance leases 0 0
Other 2 0
__________ __________
2 0
__________ __________
18
10. Intangible Fixed Assets

Software Licenses & Patents Development Total
Licences trademarks Expenditure
£000 £000 £000 £000 £000
Gross cost at 1 April 2004 1,036 0 0 2,518 3,554

Indexation 0 0 0 39 39
Impairments 0 0 0 0 0
Reclassifications 0 0 0 0 0
Other revaluation 0 0 0 0 0
Additions - purchased 227 0 0 0 227
Additions - donated 12 0 0 0 12
Additions - government granted 0 0 0 0 0
Disposals (17) 0 0 0 (17)
________________________________________________
Gross cost at 31 March 2005 1,258 0 0 2,557 3,815
________________________________________________
Accumulated amortisation at 1 April 2004 476 0 0 2,264 2,740

Indexation 0 0 0 34 34
Impairments 0 0 0 0 0
Reversal of impairments 0 0 0 0 0
Reclassifications 0 0 0 0 0
Other revaluation 0 0 0 0 0
Provided during the year 155 0 0 259 414
Disposals 0 0 0 0 0
________________________________________________
Accumulated amortisation at 31 March 2005 631 0 0 2,557 3,188
________________________________________________
Net book value
- Purchased at 1 April 2004 552 0 0 254 806
- Donated at 1 April 2004 8 0 0 0 8
- Government granted at 1 April 2004 0 0 0 0 0
________________________________________________
- Total at 1 April 2004 560 0 0 254 814
- Purchased at 31 March 2005 611 0 0 0 611

- Donated at 31 March 2005 16 0 0 0 16
- Government granted at 31 March 2005 0 0 0 0 0
________________________________________________
- Total at 31 March 2005 627 0 0 0 627
________________________________________________
19
11. Tangible Fixed Assets

11.1 Tangible fixed assets at the balance sheet date comprise the following elements:
Land Buildings Dwellings Assets under Plant & Transport Information Furniture Total
excluding construction Machinery Equipment Technology & fittings
dwellings and payments
on account*
£000 £000 £000 £000 £000 £000 £000 £000 £000
Cost or valuation at 1 April 2004 52,911 101,957 5,900 7,314 49,771 141 6,286 4,977 229,257
Additions - purchased 0 6,350 0 3,630 2,322 0 384 455 13,141
Additions - donated 0 844 0 158 129 0 20 18 1,169
Additions government granted 0 0 0 8 0 0 0 0 8
Impairments 0 0 0 0 0 0 0 0 0
Reclassifications 0 5,917 0 (6,038) 60 1 0 60 0
Indexation 3,933 8,074 467 551 1,190 3 0 107 14,325
Other in year revaluation 0 0 0 0 0 0 0 0 0
Disposals 0 (1,115) 0 (131) (9) (23) (41) 0 (1,319)
National Revaluation Exercise 38,824 (3,207) 5,626 0 0 0 0 0 41,243
______________________________________________________________
At 31 March 2005 95,668 118,820 11,993 5,492 53,463 122 6,649 5,617 297,824
______________________________________________________________
Depreciation at 1 April 2004 0 0 0 0 30,685 131 4,197 1,684 36,697
Provided during the year 0 6,807 236 0 3,065 3 525 325 10,961
Impairments 0 0 0 0 0 0 0 0 0
Reversal of Impairments 0 0 0 0 0 0 0 0 0
Reclassifications 0 0 0 0 0 0 0 0 0
Indexation 0 0 0 0 777 3 0 36 816
Other in year revaluation 0 0 0 0 0 0 0 0 0
Disposals 0 (804) 0 0 (8) (22) (41) 0 (875)
______________________________________________________________
Depreciation 0 6,003 236 0 34,519 115 4,681 2,045 47,599
at 31 March 2005 ______________________________________________________________
Net book value
- Purchased at 1 April 2004 52,911 93,016 5,900 7,107 13,347 10 2,069 3,027 177,387
- Donated at 1 April 2004 0 8,151 0 207 5,739 0 20 240 14,357
- Government Granted at 1 April 2004 0 790 0 0 0 0 0 26 816
______________________________________________________________
Total at 31 March 2004 52,911 101,957 5,900 7,314 19,086 10 2,089 3,293 192,560
______________________________________________________________
Net book value
- Purchased at 31 March 2005 95,668 101,673 11,757 5,326 13,928 7 1,930 3,311 233,600
- Donated at 31 March 2005 0 10,324 0 158 5,016 0 38 236 15,772
- Government Granted at 31 March 2005 0 820 0 8 0 0 0 25 853
______________________________________________________________
Total at 31 March 2005 95,668 112,817 11,757 5,492 18,944 7 1,968 3,572 250,225
______________________________________________________________
*Residual interests of off balance sheet PFI schemes should be recorded here. If the amount is material a disclosure should be made stating what the figure represents.
Of the totals at 31 March 2005, £nil related to land valued at open market value and £nil related to buildings valued at open market value
and £nil related to dwellings valued at open market value.
The net book value of assets held under finance leases and hire purchase contracts at the balance sheet date are as follows:
on account
£000 £000 £000 £000 £000 £000 £000 £000 £000
At 31 March 2005 0 0 0 0 0 0 0 0 0
At 31 March 2004 0 0 0 0 0 0 0 0 0
20
The total amount of depreciation charged to the income and expenditure in respect of assets held under finance leases and
hire purchase contracts:
on account
£000 £000 £000 £000 £000 £000 £000 £000 £000
Depreciation 31 March 2005 0 0 0 0 0 0 0 0 0

Depreciation 31 March 2004 0 0 0 0 0 0 0 0 0
11.2 The net book value of land, buildings and dwellings at 31 March 2005 comprises:
31 March 2005 31 March 2004

£000 £000
Freehold 220,242 160,768
Long leasehold 0 0
Short leasehold 0 0
__________ __________
Total 220,242 160,768
__________ __________
12. Stocks and Work in Progress

31 March 2005 31 March 2004
£000 £000
Raw materials and consumables 0 0
Work-in-progress 0 0
Finished goods 4,331 4,273
__________ __________
4,331 4,273
__________ __________
13. Debtors
31 March 2005 31 March 2004
£000 £000
Amounts falling due within one year:
NHS debtors 18,326 17,244
Provision for irrecoverable debts (3,178) (3,370)
Other prepayments and accrued income 1,775 2,160
Other debtors 20,186 12,935
__________ __________
Sub total 37,109 28,969
Amounts falling due after more than one year:

NHS debtors 117 154
Provision for irrecoverable debts 0 0
Other prepayments and accrued income 0 0
Other debtors 0 3,443
__________ __________
Sub total 117 3597
__________ __________
Total 37,226 32,566
__________ __________
NHS Debtors include £116,398 prepaid pension contributions at 31 March 2005 (£154,078 at 31 March 2004)
21
14. Investments
14.1 Fixed asset investments
Description Description Other Total
£000 £000 £000 £000
Balance at 1 April 2004 0 0 0 0

Additions 0 0 0 0
Disposals 0 0 0 0
Revaluations 0 0 0 0
__________ __________ __________ __________
Balance at 31 March 2005 0 0 0 0
__________ __________ __________ __________
14.2 Current asset investments

Description Description Other Total
£000 £000 £000 £000
Balance at 1 April 2004 0 0 0 0

Additions 0 0 0 0
Disposals 0 0 0 0
Revaluations 0 0 0 0
__________ __________ __________ __________
Balance at 31 March 2005 0 0 0 0
__________ __________ __________ __________
15. Creditors
15.1 Creditors at the balance sheet date are made up of:
31 March 2005 31 March 2004
£000 £000
Amounts falling due within one year:
Bank overdrafts 0 0
Current instalments due on loans 0 0
Interest payable 0 0
Payments received on account 821 446
NHS creditors 17,759 10751
Non - NHS trade creditors - revenue - other 8,865 11,165
Non - NHS trade creditors - capital 3,965 5,258
Tax and social security costs 7,478 4,464
Obligations under finance leases and hire purchase contracts 0 0
Other creditors 12,932 6,525
Accruals and deferred income 9,738 6,760
__________ __________
Sub total 61,558 45,369
__________ __________
Amounts falling due after more than one year:
Long - term loans 0 0
Obligations under finance leases and hire purchase contracts 0 0
NHS creditors 0 0
Other 0 0
Sub total 0 0
__________ __________
Total 61,558 45,369
__________ __________
Other creditors include;
£6,824,475 outstanding pensions contributions at 31 March 2005 (31 March 2004 £1,359,075).
22
15.2 Loans (and other long-term financial liabilities) Total

31 March 2005 31 March 2004
Amounts falling due: £000 £000
In one year or less 0 0
Between one and two years 0 0
Between two and five years 0 0
Over five years 0
__________ 0
__________
Total 0 0
__________ __________
Total
31 March 2005 31 March 2004
£000 £000
Wholly repayable within five years 0 0
Wholly repayable after five years, not by instalments 0 0
Wholly or partially repayable after five years, by instalments 0
__________ 0
__________
Total 0 0
__________ __________
Loans [and long-term financial liabilities] Value 31 March 2004

wholly or partially repayable after five years: Interest rate outstanding £000
% £000
Terms of payment
15.3 Finance lease obligations 31 March 2005 31 March 2004

Payable: £000 £000
Within one year 0 0
Between one and five years 0 0
After five years 0
__________ 0
__________
0 0
Less finance charges allocated to future periods 0
__________ 0
__________
0 0
__________ __________
15.4 Finance Lease Commitments

St George's Healthcare NHS Trust has not entered into any finance leases.
16. Provisions for liabilities and charges

Pensions Pensions Legal Restruct- Other Total
relating to relating to claims urings
former directors other staff
£000 £000 £000 £000 £000 £000
At 1 April 2004 0 1,651 288 0 1,969 3,908
Arising during the year 0 0 130 0 3,589 3,719
Utilised during the year 0 (121) (111) 0 (1,893) (2,125)
Reversed unused 0 (16) (130) 0 (76) (222)
Unwinding of discount 0 58 0 0 0 58
________ ________ ________ ________ ________ ________
At 31 March 2005 0 1,572 177 0 3,589 5,338
________ ________ ________ ________ ________ ________
Expected timing of cashflows:
Within 1 year 0 121 177 0 3,589 3,887
Between one and five years 0 418 0 0 0 418
After five years 0 1,033 0 0 0 1,033
Provision for Pension costs is calculating using information provided by the NHS Pensions Agency.Provision for Legal Claims has been
calculated using figures and estimated probability supplied by both the NHS Litigation Authority and the Trust's solicitor.
'Other' includes; (a) provision for probable additional non-medical pay expenditure to 31 March 2005 as a result of Agenda for Change
NHS pay reform (£3,206,000) and; (b) provision for additional medical pay expenditure to 31 March 2005 in respect of new consultant
contracts (£383,000)
£8,354,581 is included in the provisions of the NHS Litigation Authority at 31/3/2005 in respect of clinical negligence liabilities of the
trust (31/3/2004 £8,145,958).
23
17. Movements on Reserves

Movements on reserves in the year comprised the following:
Revaluation Donated Government Other Income and Total

reserve Asset Grant reserves Expenditure
reserve reserve reserve
£000 £000 £000 £000 £000 £000
At 1 April 2004 as previously stated 50,123 14,368 816 1,150 9,776 76,233
Prior Period Adjustments 0 0 0 0 0 0
At 1 April 2004 as restated 50,123 14,368 816 1,150 9,776 76,233
Transfer from the income and expenditure account (21,656) (21,656)
Fixed asset impairments 0 0 0 0

Surplus on other revaluations
/indexation of fixed assets 52,857 1,822 79 54,758
Transfer of realised profits (losses)
to the Income and Expenditure reserve 749 0 0 (749) 0
Receipt of donated/government granted assets 1,180 8 1,188
Transfers to the Income and Expenditure Account
for depreciation, impairment, and disposal of
donated/government granted assets (1,581) (49) (1,630)
Other transfers between reserves 0 0 0 0 0 0
Reserves eliminated on dissolution 0 0 0 0 0 0
________ ________ ________ ________ ________ ________
At 31 March 2005 103,729 15,789 854 1,150 (12,629) 108,893
________ ________ ________ ________ ________ ________
18. Notes to the Cash Flow Statement

18.1 Reconciliation of operating surplus to net cash flow from operating activities:
2004/05 2003/04
£000 £000
Total operating surplus (deficit) (15,650) 4,860
Depreciation and amortisation charge 11,375 11,584
Fixed asset impairments and reversals 0 259
Transfer from donated asset reserve (1,581) (1,255)
Transfer from the government grant reserve (49) (46)
(Increase)/decrease in stocks (58) (836)
(Increase)/decrease in debtors (8,753) (5,210)
Increase/(decrease) in creditors 17,470 7,414
Increase/(decrease) in provisions 1,372 1,909
__________ __________
Net cash inflow/(outflow) from operating activities before restructuring costs 4,126 18,679
Payments in respect of fundamental reorganisation/restructuring 0 0
__________ __________
Net cash inflow from operating activities 4,126 18,679
__________ __________
24
18.2 Reconciliation of net cash flow to movement in net debt

2004/05 2003/04
£000 £000
Increase/(decrease) in cash in the period 0 5
Cash inflow from new debt 0 0
Cash outflow from debt repaid and finance lease capital payments 0 0
Cash (inflow)/outflow from (decrease)/increase in liquid resources 0 0
__________ __________
Change in net debt resulting from cashflows 0 5
Non - cash changes in debt 0 0
Net debt at 1 April 2004 68 63
__________ __________
Net debt at 31 March 2005 68 68
__________ __________
18.3 Analysis of changes in net debt At 1 Cash Transferred Cash Non - cash At 31
April (to)/from other changes in changes in March
2004 NHS bodies year year 2005
£000 £000 £000 £000 £000
OPG cash at bank 0 0 0 0
Commercial cash at bank and in hand 68 0 0 68
Bank overdrafts 0 0 0 0
Debt due within one year 0 0 0 0
Debt due after one year 0 0 0 0 0
Finance leases 0 0 0 0 0
Current asset investments 0 0 0 0 0
__________ __________ __________ __________ __________
68 0 0 0 68
__________ __________ __________ __________ __________
19. Capital Commitments

Commitments under capital expenditure contracts at the balance sheet date were £6,172,512 (31 March 2004 £9,058,173)
20. Post Balance Sheet Events

From 1 April 2005 HM Treasury changed the discount rate used in calculating provisions from 3.5% to 2.2%. This change will result
in an increase in our provisions of £20,436 which will be charged to the Income and Expenditure account in 2005-06. National
funding of NHS commissioners will be increased by the total estimated effect to offset this charge.
21. Contingencies 2004/05 2003/04

£000 £000
Gross Value (85) 48
Amounts recoverable (if any) 0 0
__________ __________
Net contingent liability (85) 48
__________ __________
The above reflects the member contingent liability as notified by the NHS Litigation Authority relating to claims received
and logged at the NHSLA as at 31 March 2005.
25
22. Movements in Public Dividend Capital 2004/05 2003/04

£000 £000
Public Dividend Capital as at 1 April 2004 104,771 107,134
New Public Dividend Capital received (including transfers from dissolved NHS Trusts) 11,917 0
Public Dividend Capital repaid in year 0 (2,363)
Public Dividend Capital repayable (creditor) 0 0
Public Dividend Capital written off 0 0
Public Dividend Capital transferred to Foundation Trust 0
Other movements in Public Dividend Capital in year 0 0
__________ __________
Public Dividend Capital as at 31 March 2005 116,688 104,771
__________ __________
23. Financial Performance Targets

23.1 Breakeven performance
The Trust's breakeven performance for 2004/2005 is as follows:
1997/98 1998/99 1999/2000 2000/01 2001/02 2002/03 2003/04 2004/05
£000 £000 £000 £000 £000 £000 £000 £000
Turnover 174,908 186,975 205,968 223,195 251,017 286,483 317,041 333,532

Retained surplus/(deficit) for the year 550 (418) (5,753) 0 613 4,280 (650) (21,656)
Adjustment for: 0
Timing/non-cash impacting distortions
- Use of pre - 1.4.97 surpluses
[FDL(97)24 Agreements] 0 0 0 0 0 0 0 0
- 1999/2000 Prior Period Adjustment
(relating to 1997/98, 1998/99) 0 0
(relating to 1997/98, 1998/99 and 1999/2000) (40) 7 (529)
(relating to 1997/98, 1998/99, 1999/2000 and 2000/01) 0 0 0 0
(relating to 1997/98, 1998/99, 1999/2000, 2000/01
and 2001/02) 0 0 0 0 0
(relating to 1997/98, 1998/99, 1999/2000, 2000/01,
2001/02 and 2002/03) 0 0 0 0 0 0
(relating to 1997/98, 1998/99, 1999/2000, 2000/01,
2001/02, 2002/03 and 2003/04) 0 0 0 0 0 0 0
Break-even in-year position 510 (411) (6,282) 0 613 4,280 (650) (21,656)
Break-even cumulative position 510 99 (6,183) (6,183) (5,570) (1,290) (1,940) (23,596)
Materiality test: -
- Break-even in-year position 0.3% -0.2% -3.0% 0.0% 0.2% 1.5% -0.2% -6.5%
- Break-even cumulative position 0.3% 0.1% -3.0% -2.8% -2.2% -0.5% -0.6% -7.1%
The Trust is developing, with the assistance of the Strategic Health Authority, a financial strategy to achieve recurring balance
on Income and Expenditure.
26
23.2 Capital cost absorption rate
The Trust is required to absorb the cost of capital at a rate of 3.5% of average relevant net assets. The rate is calculated as the
percentage that dividends paid on public dividend capital, totalling £5,908,000, bears to the average relevant net assets of
£183,193,000, that is 3.2%.
23.3 External financing

The Trust is given an external financing limit which it is permitted to undershoot.
2004/05 2003/04
£000 £000 £000
External financing limit 11,917 (2,363)

Cash flow financing 11,917 (2,368)
Finance leases taken out in the year 0 0
Other capital receipts 0 0
________
External financing requirement 11,917 (2,368)
________ ________
Undershoot (overshoot)* 0 5
________ ________
23.4 Capital Resource Limit

The Trust is given a Capital Resource Limit which it is not permitted to overspend
2004/05 2003/04
£000 £000
Gross capital expenditure 13,368 16,639
Less: book value of assets disposed of (460) (4,266)
Plus: loss on disposal of donated assets 0 0
Less: capital grants 0 (10)
Less: donations 0 (1,946)
________ ________
Charge against the CRL 12,908 10,417
Capital resource limit 16,734 11,269
________ ________
(Over)/Underspend against the CRL 3,826 852
________ ________
24. Related Party Transactions

St. George's Healthcare NHS Trust is a body corporate established by order of the Secretary of State for Health.
The Department of Health is regarded as the ultimate controlling party. During the year St. George's Healthcare NHS Trust received monies
amounting to £10,438,454 from the Department of Health. This relates to grants for training, teaching and research. As at 31 March
2005 the Trust accounts included a debtor balance of £1,390,502 and a £314,842 creditor balance with the Department of Health.
The Trust also received £104,352,000 from its main commissioners Wandsworth Primary Care Trust; £54,598,000 from Sutton & Merton
PCT and £18,917,867 from Croydon PCT. This related to contract income for patient services. As at 31 March 2005 the Trust accounts
included debtor balances with Wandsworth Primary Care Trust £7,946,022; Sutton & Merton Primary Care Trust £1,119,470 and
Croydon Primary Care Trust £1,234,927. The Trust accounts included creditor balances with Wandsworth Primary Care Trust £6,956,923;
Sutton & Merton Primary Care Trust £1,042,439 and Croydon Primary Care Trust £11,807.
In addition, the Trust received £38,424,568 from the South West London Workforce Development Confederation. As at 31 March
2005 the Trust accounts included a debtor balance of £177,861 and a creditor balance of £500.
A non-executive director of the Trust Board, Diane Mark is a trustee of the Charitable Foundation. During 2004/05 the Charitable
Foundation raised charges to the Trust totalling £540,908, and the Trust incurred capital and revenue expenditure to be funded by the
Charitable Foundation amounting to £3,692,246. As at 31 March 2005 the Trust accounts included a debtor balance of £3,650,434
and a creditor balance of £20,469 with the Charitable Foundation.
27
During 2004/05 the Trust raised charges of £1,512,103 for costs incurred on behalf of St. George's Hospital Medical School, which is
part of the University of London, and the Medical School raised charges of £6,588,948 for costs incurred on behalf of the Trust. These
transactions related mainly to clinical staff and overhead costs. As at 31 March 2005 the Trust accounts included a debtor balance of
£4,101,689 and a creditor balance of £5,724,450 in respect of the Medical School.
The Acting Finance Director, Kevin Harbottle is the Treasurer of the George Cordiner Radiological Fund. Derek Dundas, Associate
Medical Director is the Chair of the George Cordiner Radiological Fund. During the year the Trust made payments to the fund
amounting to £nil. As at 31 March 2005 the Trust accounts included a debtor balance of £50,017.
25. Private Finance Transactions

25.1 PFI schemes deemed to be off-balance sheet
2004/05 2003/04
£000 £000
Amounts included within operating expenses in respect of PFI transactions
deemed to be off-balance sheet - gross 9,381 5,657
Amortisation of PFI deferred asset 0 0
________ _______
Net charge to operating expenses 9,381 5,657
________ ________
The Trust is committed to make the following payments during the next year.
PFI scheme which expires;
Within one year 0 0
2nd to 5th years (inclusive) 0 0
6th to 10th years (inclusive) 0 0
11th to 15th years (inclusive) 1,509 0
21st to 25th years (inclusive) 0 0
31st to 35th years (inclusive) 7,881 7,473
The Trust has 2 PFI projects.

1 Atkinson Morley wing
On 20 March 2000 the Trust signed a contract for the exclusive use for 35 years of Atkinson Morley wing. Blackshaw Healthcare
Services Ltd, a special purpose vehicle company owned by a private consortium, constructed the building which the Trust uses to
provide Cardiac and Neurosciences services. The estimated capital value of the facility is £50m.
£000
Estimated capital value of the PFI scheme 50,000
Contract Start date: 20 March 2000
Contract End date: 8 August 2038
The Trust is committed to paying unitary charges equivalent to £7,881,000 per annum at 2004/05 prices to Blackshaw Healthcare
Services Ltd for the exclusive use of the building. The annual cost of the unitary charge is comprised as follows:
£000
Availability Charge 6,240
Performance Charge 1,240
Volume Charge 401
________
7,881
________
The first unitary payment was payable by the Trust when the new facility became available for use in August 2003 and the last unitary
payment will be payable by the Trust in 2038/39.
2 Picture Archiving and Communications System (PACS)

The Trust entered a managed service contract with Philips Medical Systems PLC on 1 July 2003 for the provision of a Picture Archiving
and Communication System (PACS). The contract is for 12 years and the estimated capital value of the equipment provided under
the contract is £3.04m.
28
The Trust is committed to paying lease rentals equivalent to £1,508,600 per annum at 2004/05 prices to Philips Medical Systems.
The annual cost of the lease rentals is comprised as follows: £000
Provision of Picture Archiving and Communication System 1,457
Extension of imaging service 52
________
1,509
________
The first payment was payable by the Trust when the PACS system was brought into use in July 2003 and the last payment will be
payable by the Trust in April 2015.
The Trust accounts for both these PFI schemes as off balance sheet.
25.2 ‘Service’ element of PFI schemes deemed to be on-balance sheet

2004/05 2003/04
£000 £000
Amounts included within operating expenses in respect of the 'service' element
of PFI schemes deemed to be on-balance sheet 0 0
Amortisation of PFI deferred asset 0 0
Net charge to operating expenses 0 0
The Trust is committed to make the following payments during the next year.
£000 £000
PFI scheme which expires;
Within one year 0 0
2nd to 5th years (inclusive) 0 0
26 Pooled Budget
St. George's Healthcare NHS Trust has no pooled budget arrangements.
27 Financial Instruments
FRS 13, Derivatives and Other Financial Instruments, requires disclosure of the role that financial instruments have had during the period
in creating or changing the risks an entity faces in undertaking its activities. Because of the continuing service provider relationship that
the NHS Trust has with local Primary Care Trusts and the way those Primary Care Trusts are financed, the NHS Trust is not exposed to the
degree of financial risk faced by business entities. Also financial instruments play a much more limited role in creating or changing risk
than would be typical of the listed companies to which FRS 13 mainly applies. The NHS Trust has limited powers to borrow or invest
surplus funds and financial assets and liabilities are generated by day-to-day operational activities rather than being held to change the
risks facing the NHS Trust in undertaking its activities.
As allowed by FRS 13, debtors and creditors that are due to mature or become payable within 12 months from the balance sheet date
have been omitted from all disclosures other than the currency profile. Provisions should be shown gross. Any amount expected in
reimbursement against a provision (and included in debtors) should be separately disclosed.
Liquidity risk
The NHS Trust's net operating costs are incurred under annual service agreements with local Primary Care Trusts, which are financed
from resources voted annually by Parliament. The Trust also largely finances its capital expenditure from funds made available from
Government under an agreed borrowing limit. St George's Heathcare NHS Trust is not, therefore, exposed to significant liquidity risks.
Interest-Rate Risk
0% of the Trust's financial assets and 0% of its financial liabilities carry nil or fixed rates of interest. St George's Healthcare NHS Trust is
not, therefore, exposed to significant interest-rate risk. The following two tables show the interest rate profiles of the Trust's financial
assets and liabilities:
29
27.1 Financial Assets Fixed rate Non-interest

bearing
Weighted Weighted Weighted
Total Floating Fixed rate Non-interest average average average
rate bearing interest period for term
Currency rate which fixed
£000 £000 £000 £000 % Years Years
At 31 March 2005
Sterling 37,294 68 0 37,226 0% 0 0
Other 0 0 0 0 0% 0 0
________ ________ ________ ________
Gross financial assets 37,294 68 0 37,226
________ ________ ________ ________
At 31 March 2004 (prior year)
Sterling 32,635 68 0 32,567 0% 0 0
Other 0 0 0 0 0% 0 0
________ ________ ________ ________
Gross financial assets 32,635 68 0 32,567
________ ________ ________ ________
27.2 Financial Liabilities Fixed rate Non-interest

bearing
Weighted Weighted Weighted
Total Floating Fixed rate Non-interest average average average
rate bearing interest period for term
Currency rate which fixed
£000 £000 £000 £000 % Years Years
At 31 March 2005
Sterling 178,246 0 0 178,246 0% 0 0
Other 0 0 0 0 0% 0 0
________ ________ ________ ________
Gross financial liabilities 178,246 0 0 178,246
________ ________ ________ ________
At 31 March 2004 (prior year)
Sterling 150,141 0 0 150,141 4% 0 0
Other 0 0 0 0 0% 0 0
________ ________ ________ ________
Gross financial liabilities 150,141 0 0 150,141
________ ________ ________ ________
Note: The public dividend capital is of unlimited term.
Foreign Currency Risk

The Trust has no negligible foreign currency income or expenditure.
27.3 Fair Values

Set out below is a comparison, by category, of book values and fair values of the NHS Trust's financial assets and liabilities as at 31
March 2005.
Book Value Fair Value Basis of fair
valuation
£000s £000s
Financial assets
Cash 68 68
Debtors over 1 year:
- Agreements with commissioners to cover creditors and provisions 0 0 Note a
Investments 0 0
________ ________
Total 68 68
________ ________
30
Financial liabilities Book Value Fair Value Basis of

fair valuation
Overdraft 0 0
Creditors over 1 year:
- Early retirements 0 0 Note b
- Finance leases 0 0 Note c
Provisions under contract 0 0 Note d
Loans 0 0
Public dividend capital* (116,688) (116,688) Note e
________ ________
Total (116,688) (116,688)
________ ________
a These debtors reflect agreements with commissioners to cover creditors over 1 year for early retirements and provisions under contract,
and their related interest charge/unwinding of discount. In line with notes c and e, below, fair value is not significantly different from
book value.
b Fair value is not significantly different from book value since interest at 9% is paid on early retirement creditors.
c To obtain fair value, cash flows have been discounted at prevailing market interest rates for finance leases for a similar term.
d Fair value is not significantly different from book value since, in the calculation of book value, the expected cash flows have been
discounted by the Treasury discount rate of 3.5% in real terms.
e The figure here should be the full value of PDC in the balance sheet and 'book value' should equal 'fair value'.
28. Third Party Assets

The Trust held £15,882 cash at bank and in hand at 31/03/05 (28,208 at 31/3/04) which relates to monies held by the NHS Trust on
behalf of patients. This has been excluded from the cash at bank and in hand figure reported in the accounts.
29. Intra-Government and Other Balances

Debtors: amounts Debtors: amounts Creditors: amounts Creditors: amounts
falling due falling due after falling due falling due after
within one year more than one year within one year more than one year
£000 £000 £000 £000
Balances with other Central Government Bodies 0 0 0 0
Balances with Local Authorities 0 0 0 0
Balances with NHS Trusts and Foundation Trusts 2,037 0 1,303 0
Balances with Public Corporations and Trading Funds 0 0 0 0
Balances with bodies external to government 35,072 117 60,255 0
________ ________ ________ ________
At 31 March 2005 37,109
________ 117
________ 61,558
________ 0
________
Balances with other Central Government Bodies 0 0 0 0

Balances with Local Authorities 0 0 0 0
Balances with NHS Trusts and Foundation Trusts 3,044 0 1,943 0
Balances with Public Corporations and Trading Funds 0 0 0 0
Balances with bodies external to government 25,925 3,597 43,426 0
________ ________ ________ ________
At 31 March 2004 28,969
________ 3,597
________ 45,369
________ 0
________
30. Losses and Special Payments

There were 104 cases of losses and special payments (prior year: 83 cases) totalling £18,137.97 (prior year: £71,816) approved during
2004-2005
There were 0 clinical negligence cases where the net payment exceeded £100,000 totalling £nil (prior year: 0 cases totalling £nil).
There were 0 fraud cases where the net payment exceeded £100,000 totalling £nil (prior year 0 cases totalling £nil).
There were 0 personal injury cases where the net payment exceeded £100,000 totalling £nil (prior year 0 cases totalling £nil).
There were 0 compensation under legal obligation cases where the net payment exceeded £100,000 totalling £nil (prior year 1 case
totalling £143,996.25).
There were 0 fruitless payment cases where the net payment exceeded £100,000 totalling £nil (prior year 1 cases totalling £157,495.83).
Note: The total costs included in this note are on a cash basis and will not reconcile to the amounts in the notes to the accounts
which are prepared on an accruals basis.
31
Further copies of the Accounts are available on

request from the Director of Finance, Bronte
House, St George’s Healthcare NHS Trust.
Telephone: 020 8725 1346
St George’s Healthcare NHS Trust

St George’s Hospital
Blackshaw Road
London SW17 0QT
Tel: 020 8672 1255
Fax: 020 8672 5304
E-mail: general.enquiries@stgeorges.nhs.uk
Website: www.stgeorges.nhs.uk
Designed by Andrew Younger & Associates

Photography by Jacques Gilham

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STG 2505 final AM 2/9/05 3:24 pm Page 1

St George’s + Quality healthcare

St. George's Healthcare NHS Trust - Annual Accounts 2004/05

6 Income and expenditure

7 Balance sheet Peter Homa

9 Cash flow statement Statement of directors’ responsibilities in respect of the

• make judgements and estimates which are reasonable and prudent

By order of the Board

Peter Homa Colin Gentile

St. George's Healthcare NHS Trust - Annual Accounts 2004/05

STATEMENT ON INTERNAL CONTROL 2004/05 4 The risk and control framework

St. George's Healthcare NHS Trust - Annual Accounts 2004/05

Director’s statements (continued) Information

4 (on behalf of the Board)

St. George's Healthcare NHS Trust - Annual Accounts 2004/05

Auditor’s report Foreword to the accounts

St. George's Healthcare NHS Trust - Annual Accounts 2004/05

Income and expenditure account

for the year ended 31 March 2005 2004/05 2003/04

NOTE £000 £000

Other operating income 4 72,597 72,359

Operating expenses 5-7 (349,182) (312,181)

OPERATING SURPLUS/(DEFICIT) (15,650) 4,860

Cost of fundamental reorganisation/restructuring 0 0

Profit (loss) on disposal of fixed assets 8 (460) (123)

Interest receivable 422 456

Interest payable 9 (2) 0

Other finance costs - unwinding of discount (58) (58)

Public Dividend Capital dividends payable (5,908) (5,785)

The notes on pages 10 to 31 form part of these accounts.

RETAINED SURPLUS/(DEFICIT) FOR THE YEAR - (21,656)

St. George's Healthcare NHS Trust - Annual Accounts 2004/05

as at 31 March 2005 31 March 2005 31 March 2004

NOTE £000 £000

CREDITORS: Amounts falling due within one year 15 (61,558) (45,369)

TOTAL ASSETS LESS CURRENT LIABILITIES 230,919 184,912

CREDITORS: Amounts falling due after more than

PROVISIONS FOR LIABILITIES AND CHARGES 16 (5,338) (3,908)

St. George's Healthcare NHS Trust - Annual Accounts 2004/05

Statement of total recognised gains and losses

for the year ended 31 March 2005 2004/05 2003/04

Fixed asset impairment losses 0 0

Unrealised surplus/(deficit) on fixed asset revaluations/indexation 54,758 13,578

Reductions in the donated asset and government grant reserve due to

Additions/(reductions) in "other reserves" 0 0

Prior period adjustment 0 0

St. George's Healthcare NHS Trust - Annual Accounts 2004/05

Cash flow statement

for the year ended 31 March 2005 2004/05 2003/04

NOTE £000 £000

RETURNS ON INVESTMENTS AND

DIVIDENDS PAID (5,908) (5,785)

Net cash inflow/(outflow) before management of (11,917) 2,368

MANAGEMENT OF LIQUID RESOURCES

Net cash inflow (outflow) from management of liquid resources 0 0

St. George's Healthcare NHS Trust - Annual Accounts 2004/05

1.5 Tangible fixed assets

St. George's Healthcare NHS Trust - Annual Accounts 2004/05

St. George's Healthcare NHS Trust - Annual Accounts 2004/05

St. George's Healthcare NHS Trust - Annual Accounts 2004/05

1.15 Foreign Exchange

St. George's Healthcare NHS Trust - Annual Accounts 2004/05

3. Income from activities

4. Other operating income