Notes to the Accounts

1. Introduction

The accounts have been prepared in accordance with the guidelines set out in the Statement of Recommended Practice, “Financial Reports of Pension Schemes” issued by the Pensions Research Accountants Group in July 1996.

The accounts summarise the transactions of the scheme and deal with the net assets at the disposal of the Trustee. They do not take account of obligations to pay pensions and benefits which fall due after the end of the Scheme year.

The actuarial position of the scheme is dealt with in the Pension Fund annual report.

2. Accounting policies

a) Employers’ Contributions

Employers’ Contributions are accounted for on an accruals basis at the percentage rates recommended by the Actuary. The rates paid during both 2002/3 and 2003/04 were set as part of the 2001 Actuarial Valuation.

b) Investment Income

Investment income is accounted for on an ex-dividend basis for all fixed interest investments and UK equity investments. Property rents are accounted for on the date that they become payable. Overseas equity income is accounted for on an ‘as received’ basis.

c) Benefits

Benefits are accounted for as and when they are paid.

d) Death Grants, Transfer Values and Refunds of Contributions

i)Transfer values and Refunds of Contributions are accounted for on a cash basis.

ii)Death Grants are accrued as being payable on the date of death.

e) Valuation of Investments

The Valuation of Investments is carried out as follows:

i)All UK investments traded within SETS (An automated trading system operated by the London Stock Exchange) are valued using the last SETS traded price. All other UK investments are valued on the basis of middle market prices (average of buying and selling price at the close of trading),

ii)Pooled investment funds are valued at mid point of the latest prices quoted by their respective managers prior to the year end,

iii)Overseas investments are valued on the basis appropriate to the market concerned, using the closing rates of exchange at the year end,

iv)Freehold and leasehold properties, other than the Fund’s farm have been valued on an open market basis by Adrian Payne of Colliers CRE as at 31 March 2004. Mr Payne is an Associate of the Royal Institute of Chartered Surveyors.

v)The Fund’s farm property has been valued on an open market basis as at 31 March 2004 by Mr Andrew Coombe, Senior Land Agent of Leicestershire County Council. Mr Coombe is an Associate of the Royal Institute of Chartered Surveyors.

vi)The Fund’s last independent valuation of the property investments (excluding the farm) was carried out by James Dunn at ATIS Real Weatheralls as at 31 March 2002.

3. Contributions Receivable

	2002/03 £000	2003/04 £000
Employers
Normal	42,352	48,344
Advanced payments for early retirements	1,439	2,027
Members
Normal	22,069	24,051
Additional voluntary contributions	379	418
Total	66,239	74,840

4. Transfers In

	2002/03 £000	2003/04 £000
Individual transfers in from other schemes	15,856	10,146
Total	15,856	10,146

5. Benefits Payable

	2002/03 £000	2003/04 £000
Pensions	40,145	42,086
Lump sum retirement benefit	5,437	7,815
Lump sum death benefit	818	1,068
Net Benefits recharged	11	(1)
Total	46,411	50,968

6. Payments to and on account of leavers

	2002/03 £000	2003/04 £000
Refunds to members leaving scheme	369	449
Payments for members joining state scheme	125	223
Individual transfers to other schemes	11,005	9,516
Total	11,499	10,188

7. Administration Expenses

	2002/03 £000	2003/04 £000
Administration and processing	755	792
Actuarial fees	3	0
Legal and other professional fees	43	43
Computer system costs	121	92
Total	922	927

8. Investment Income

	2002/03 £000	2003/04 £000
Income from fixed interest securities	3,034	1,612
Dividends from equities	16,448	15,580
Income from index-linked securities	1,765	550
Income from managed or unitised funds	1,772	4,163
Net rents from properties	5,834	6,302
Interest on cash or cash equivalents	1,241	1,240
Net Currency Profit/(Loss)	(38)	(101)
Other	134	158
Total	30,190	29,504

9. Investments

	Value at 1 April 2003 £000	Net Investments £000	Change In Market Value £000	Value at 31 March 2004 £000
Fixed interest securities	29,129	20,318	(1,179)	48,268
Equities	521,521	(103,260)	136,060	554,321
Index-linked securities	23,510	(7,481)	1,040	17,069
Managed and unitised funds	401,619	141,653	106,744	650,016
Properties	77,125	(1,613)	4,043	79,555
Cash & Cash Equivalents	35,926	(2,783)	359	33,502
	1,088,830	46,834	247,067	1,382,731

The change in the value of investments during the year comprises all increases and decreases in the market value of investments held at any time during the year, including profits and losses realised on sales of investments during the year.

10. Analysis of Investments

	2002/03 £000	2003/04 £000
Fixed interest securities
UK public sector quoted	7,183	24,365
Overseas public sector	21,946	23,903
	29,129	48,268
Equities
UK quoted	297,560	376,529
Overseas quoted	223,961	177,792
	521,521	554,321
Index Linked Securities
UK quoted	23,510	17,069
Unitised Funds
Property Funds	38,636	55,349
Unit Trust – Other	362,983	594,667
	401,619	650,016
Properties
UK	77,125	79,555
Cash & Cash Equivalents
Sterling Denominated	35,926	33,502
Total Investments	1,088,830	1,382,731

11. Investment Management Expenses

	2002/03 £000	2003/04 £000
Administration, management and custody	2,635	3,059
Performance measurement services	15	10
Other advisory fees	20	33
Total	2,670	3,102

12. Property Investments

	31 March 2003 £000	31 March 2004 £000
Freehold	60,040	62,630
Long Leasehold (over 50 years unexpired)	7,695	7,885
Short Leasehold (under 50 years unexpired)	9,390	9,040
Total	77,125	79,555

13. Current Assets & Liabilities

	2002/03 £000	2003/04 £000
Contributions due from employers	3,390	3,469
Cash Balances	28	18
Net securities settlements outstanding	(2,347)	(321)
Tax recoverable	207	136
Income accrued	3,811	3,797
Other Debtors	60	363
Owed to Leicestershire County Council	(207)	67
Fund Management Fees Outstanding	(643)	(700)
Other Creditors	(429)	(488)
Total	3,870	6,341

14. Related Party Transactions

From the information currently available there were no material transactions with related parties in 2003/04.

15. Contingent Liabilities

At 31 March 2004, the Fund had the following contractual commitments:-

(i) Undrawn commitments totalling $105,859,500 (£57,599,641) to seven different pooled private equity funds managed by Adams Street Partners

(ii) An undrawn commitment of £3,600,000 to the East Midlands Regional Venture Capital Fund.