Hartpury Annual Report July 2025

Hartpury University Annual Report and Financial Statements > 2024/2025

Notes to the Financial Statements (continued) Year Ended 31 July 2025

Pension Asset

The data received from the actuary indicated a pension asset of £21.314m at 31 July 2025. However, FRS 102 states: “If the present value of the defined benefit obligation at the reporting date is less than the fair value of the plan assets at that date, the plan has a surplus. An entity shall recognise a plan surplus as a defined benefit plan asset only to the extent that it is able to recover the surplus either through reduced contributions in the future or through refunds from the plan.” As management do not consider that the University will be able to recover the surplus either through reduced contributions in the future or through refunds from the plan, the surplus has not been recognised in these financial statements, in line with paragraph 28.22 of FRS 102. In June 2023, the High Court ruled in the case of Virgin Media Limited v NTL Pension Trustees, determining that certain pension scheme rule amendments were invalid if they were not accompanied by the appropriate actuarial confirmation. This High Court ruling was appealed and, in a judgment delivered on 25 July 2024, the Court of Appeal unanimously upheld the decision of the High Court. On 5 June 2025, the Government announced that it will introduce legislation to give affected pension schemes the ability to retrospectively obtain written actuarial confirmation that historic benefit changes met the necessary standards. Once the legislation has been passed, this will allow pension schemes to obtain written confirmation from an actuary regarding previously implemented benefit changes and apply that confirmation retrospectively without rendering the plan amendments void, provided the changes met the necessary standards. At the date of approval of these financial statements, while it is known that there is potential for additional pension liabilities to be recognised as a result of this ruling, the financial impact is not yet known and it is reasonable to conclude that it is not reasonably estimable. Accordingly, no adjustments have been made in these financial statements to reflect the potential impact of the ruling.

The University will continue to monitor developments and consider the impact on the LGPS liabilities recognised.

21. Related party transactions

Due to the nature of the Group’s operations, and with the composition of the Board of Governors drawn from local public and private sector organisations, it is inevitable that transactions will take place with organisations in which a member of the Board of Governors may have an interest. All transactions involving such organisations are conducted at arm’s length and in accordance with the Group’s financial regulations and normal procurement procedures. The total expenses paid to or on behalf of the Governors during the year were £7,737 in respect of 10 governors (2024: £9,481; 10 governors). These represent travel and subsistence expenses and other out-of-pocket expenses incurred in attending Governor meetings. No Governor received any remuneration or waived payments from the Group during the year (2024: none). The University has taken advantage of the exemption permitted by FRS 102 Section 33 (Related Party Disclosures), available to group undertakings where 100% of the voting rights are controlled within the group and where consolidated financial statements are publicly available, and has therefore not disclosed transactions with other group companies within these financial statements.

22. Post Balance Sheet Events

Refinancing of Loan Facilities

Subsequent to the year end, on 6 November 2025, the company refinanced its existing bank loan facility of £19,808,013 by entering into a new agreement with HSBC. The new loan facility totals £28 million and replaces the previous loans held with Lloyds Bank and Triodos Bank. The facility comprises a £10 million revolving credit facility, which includes an interest rate swap transacted at 3.654%, with the agreement taking effect from 6 November 2025. The loan term extends to November 2030.

As the refinancing was agreed after the end of the reporting period, it represents a non-adjusting event under Section 32 of FRS 102. Accordingly, no adjustments have been made to the carrying amounts of liabilities at the balance sheet date.

The directors believe that the refinancing has strengthened the company’s liquidity and capital structure. The enhanced funding arrangements provide increased financial flexibility and support the directors’ assessment that the company remains able to meet its obligations as they fall due.

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