2.9.4 GCNS has a significant operating lease of approximately £450K per annum in
respect of student residences. The lease is a 35 year lease with a five year
break clause. This would need to be taken into account if the new residences
project was to go ahead.
2.9.5 Other debtors include £550k due from insurers in relation to claims for flood
damage. We are advised by senior management that the insurance claim was a
balance sheet item only, and did not affect the income and expenditure
account.
2.10 Cash Flows
2.10.1 The cash flows project a net cash position in 2009 and 2010 of £6,939k and
£7,729k respectively;
2.10.2 The significant point to note is as follows:
a) We have been advised by College management that current cash resources
are in the region of £7.4m.
2.11 Taxation
2.11.1 There are no significant points to note.
2.12 Pensions and Pension Accounting
2.12.1 GMC accounts for the SPF scheme as a defined benefit scheme under FRS17
and the liability of £2,129k is included in the balance sheet at 31 July 2009.
2.13 Risk Management
2.13.1 GCNS, GMC and CC will have to review the potential risk areas post merger.
2.13.2 We recommend that the areas highlighted in Section 13 of this report are
considered during the merger process.
2.13.3 We recommend that the estates projects involving the Marine Skills Centre
and the Residences project be considered for inclusion in the risk register of
GCNS if the projects are going ahead.
2.14 Post Merger Financial & Operational Planning
2.14.1 The terms of reference included at Appendix 1 indicate that the following
areas were to be subject to review:
67
Appendix 5: Due Diligence Executive Summaries