External Audit Opinion The Trust’s auditors have for 2009/10: Issued a certificate addressed to the Governing Body confirming completion of an audit in accordance with the Audit Code for NHS Foundation Trusts. Issued an unqualified audit opinion on the Financial Statements for 2009/10. This confirms that the Trust’s accounts present a true and fair view of the Trust’s financial position and performance. The Code requirements include the Trust’s responsibility to have arrangements in place to secure economy, efficiency and effectiveness in its use of resources.

A Financially Satisfactory Year Significant growth of 17% (as measured by income from patient care activities) from 2008/9 to 2009/10. An overall bottom-line surplus of £11.5m (*) against plan of break-even. Trust efficiency plan target of £21m achieved. Trust achieved a Monitor financial risk rating of 4 (5 is the lowest risk). * Excluding £22.5m exceptional property impairment charge

Income & Expenditure Summary Income from patient care activities 518.1 441.9 Other operating income 182.0 189.9 Total operating income 700.1 631.8 Operating expenses (excl. impairment) (655.5) (590.4) Operating surplus (excl. impairment) 44.5 41.4 Non-operating items (33.0) (28.9) Surplus (excl. impairment) 11.5 12.5 Impairment (22.5) (5.2) Surplus/(deficit) for the year (11.0) 7.3 Note – The 2009/10 accounts have been reported for the first time using International Financial Reporting Standards (IFRS). 2008/9 results have also been restated using IFRS.

Total operating income of £700.1m (11% growth) R&D reduction of £6.0m or -14%, is due to the net loss of levy funding (planned loss of £15m offset by new FSF funding £4m, other £5m). Within Patient Activities income growth of 17% - price effect composed of tariff of 1.7% & CQUIN of 0.5% (on NHS clinical income only). Note – figures in brackets show % change 2008/9 to 2009/10.

Income of £518.1m from patient care activities (17% growth) Outpatient increase of 28% resulting from a) additional activity & b) change in the way this type of activity was paid for (split between attendances & procedures). As the Trust did more procedures work it benefited significantly. Other of £136.6m includes: £67.4m pass-through items, high cost drugs & devices £38.7m critical care £14.2m block arrangements, imaging local exclusions £16.3m non-NHS clinical income & other. Note – figures in brackets show % change 2008/9 to 2009/10.

Operating expenses of £655.5m (11% increase on 09/10) Note – figures in brackets show % change 2008/9 to 2009/10.

Balance Sheet 31 March 2010 £m 31 March 2009 £m Property, plant & equipment 565.3 587.7 Other non-current assets 13.3 9.6 Total non-current assets 578.7 597.3 Cash 92.0 107.6 Other current assets 77.0 54.7 Current liabilities (105.1) (96.9) Net current assets 63.8 65.4 Non-current liabilities (275.1) (277.1) Total assets employed 367.4 385.5 Note – The balance sheet for 2009/10 accounts is shown under IFRS. The 2008/9 balance sheet has also been restated using IFRS

Revaluation of the Estate In light of the continued economic downturn, the Trust revalued its estate at 31st March 2010. Resulted in a £36m write down in the estate - leading to a £22.5m impairment being charged to operating expenses. Impairment of £22.5m almost wholly due to the downward revaluation of the new hospital.

Financial Performance Analysis 2009/10 2008/9 (Remain within) Prudential Borrowing Limit  (Meet) Private Patient Income Cap (Achievement of) Plan (Delivery of) I&E surplus (excl. impairment) Financial Risk Rating 4

Capital Investment Overall capital spend of £37.1m (£4.2m on charitable-funded assets) in 2009/10, as follows: £m New Cancer Centre (demolition of EGA & initial construction) 15.3 Reinvestment in estate (incl. NHNN Critical Care Unit) 10.5 Medical equipment 3.1 ICT investment (incl. Data Centre) 2.7 Best Research for Best Health 1.4 Other 4.1 Total 37.1

Appendices Private Patients

Private Patients Income – Extracts from Accounts 9.0 8.7 Total income from patient care activities 518.1 441.9 Private Patients as a % of income 1.7% 2.0% Private Patients Income Cap 5.9%