States of Jersey Financial Report and Accounts 2009.

Financial Report & Accounts 2009

States of Jersey Treasury and Resources Department

FINANCIAL REPORT AND ACCOUNTS 2009

Treasury and Resources Department

P.F.C. Ozouf Senator Minister

J. Le Fondr   Deputy Assistant Minister

E. Noel Deputy Assistant Minister

9. Black, BSc (Econ), CPFA Treasurer of the States

Minister s Report 1 Treasurer s Introduction 3 Auditors  Report 33 Statement of Accounting Policies 34 States of Jersey Operating Cost Statement 39 States of Jersey Balance Sheet 40 States of Jersey Cash Flow Statement 41 Notes to the States of Jersey Accounts 43 Statement of Responsibilities for the Statement of Accounts 83 States of Jersey Statement on Internal Control 84

Minister s Report

States of Jersey Financial Report and Accounts 2009

I am pleased to present the 2009 Financial Report and Accounts of the States of Jersey.

2009 has been a challenging year and the results for the year reflect the challenges the island has faced. The full force of recession has been felt around the globe and, while Jersey has weathered the storm well, we too have felt the effects in our community.

General Revenue Income, at £674 million, is £20 million higher than forecast. Income Tax receipts, at £508 million, are higher than the forecast of £488 million. This reflects the strength of Jersey s economy even in a time of relative weakness. Conversely investment income has been significantly impacted by the fall in interest rates, dropping 54% in comparison to 2008.

Departments finished the year £7.6 million underspent against their approved budgets. Underlying expenditure is up 3% compared to 2008. However this rise excludes the effect of a number of additional funding approvals which were granted by the States to meet the urgent costs of the Historical Child Abuse Enquiry, the loss of the Reciprocal Health Agreement income, the cost of preparing for a flu epidemic and the additional funds approved for Income Support which were essential to ensure that the most vulnerable and those most affected by the downturn are supported. Overall we finished the year in surplus, with a surplus of £71 million.

Our reserves have remained healthy in the difficult economic circumstances with the Strategic Reserve up 8.5% on 2008 to £550 million. The Stabilisation Fund has also demonstrated the prudence and wisdom of previous years where money was put aside to deal with a downturn in the economic cycle. As a result we have been able to use £44 million for Fiscal Stimulus projects which, I firmly believe, are playing a key role in supporting our local economy through difficult times.

As we look ahead, 2010 is proving to be another testing year. The well publicised structural deficit we are facing in our public finances means that we must bring to a successful conclusion the Comprehensive Spending Review and the Fiscal Strategy Review, both of which will be debated in the second half of the year. If we can make the savings we must deliver, we will enable Jersey to go forward from this turbulent time, stronger and even better prepared to deal with the future.

All that remains is for me to thank all the staff in Treasury and Resources for their hard work again this year. In particular I want to thank Ian Black, the Treasurer, for his leadership of the department, the Deputy Treasurer Jason Turner for his continued support and the Interim Treasurer Hugh McGarel-Groves for his leadership of the department this year. I also extend my thanks to Malcolm Campbell, the Comptroller of Income and Mike Robinson, Head of Customs and Immigration. Finance staff across the States have also made a significant contribution to the management of the States finances this year, and as the finance function, and in particular the Treasury, presses forward with an ambitious plan for change, I am confident that we will go from strength to strength.

Together with my Assistant Ministers, Deputies Edward Noel and John Le Fondre, I face another exciting and demanding year. Working with them I intend to vigorously pursue successful conclusions to current reviews, and to ensure that the Treasury and Resources department leads the States in effective financial management. Together I am confident we can ensure a positive future for our island.

Senator PFC Ozouf

States of Jersey

Annual Report and Accounts 2009

Treasurer s Introduction

The 2009 accounts report on a very challenging financial year, both for world economies and locally for the States of Jersey.

In the light of the changing and demanding world in which the States of Jersey operates it is increasingly important that the annual report and accounts presents an understandable picture of the financial results for the year. That is why the Treasury has devoted resources to the introduction of GAAP based accounting. The 2010 accounts will be the first accounts to be presented in line with the GAAP based standards adopted by the States. In preparation, the 2009 accounts explain the transition from the current accounting basis to GAAP based accounting.

Following on from the improvements introduced in the 2008 accounts, further enhancements have been included in these accounts. The 2009 report and accounts have been separated from the supporting Annex as planned, standard best practice formats have been adopted and applied in the Annex to the accounts, and the principles of International Public Sector Accounting Standard 24 (Presentation of Budget Information in Financial Statements) have been adopted to improve the reporting of out-turn against budget.

Finally, the format and content of this, my covering report, have been changed to improve the interpretation and explanation of the financial information contained in the accounts. The remainder of this report is presented in three sections:

1. Financial Performance an analysis of the financial performance and position of the States of Jersey in 2009.
2. Structure, governance, aims and objectives an overview of the bodies included in the States of Jersey accounts, decision making processes, principal activities and objectives.
3. An introduction to the States of Jersey Accounts 2009

1. Summary of Financial Performance 2009

At a Glance Financial Results (Table 1) £m

Final

Approved

Budget/ Budget/

Business Updated

Plan Forecast Actual Actual Year Ended 31 December 2009 2009 2009 2008

States Net General Revenue Income 650 654 674 660 Net Revenue Expenditure (586) (616) (603) (561) Budgeted surplus for the year 64 71 99

Trading fund surplus 6 13 11 10 Non-operating Income/(Expenditure) - - (7) (52) Accounting surplus for the Year 75 57

Summary of Performance

States Net General Revenue Income is up by £14 million to £674 million, an increase of 2.1% on 2008 ...

The main changes in comparison to the previous year are:

• A full year of income from Goods and Services Tax (£47 million) compared to 8 months of income in 2008 (£32 million);

• A small increase of £8 million in taxation revenue compared to 2008;

• A fall in other general revenue income of £10 million principally due to the dramatic fall in interest rates in 2009 compared to 2008.

... however, Net Revenue Expenditure of non-trading Departments is up by £42 million to £603 million compared to 2008 ...

This increase includes transfers from capital budgets to revenue budgets of £12.06 million which does not increase overall States spending. The like-for-like increase on 2008 is 6.6%.

The main drivers for this increase are:

• Net expenditure in the three major spending departments has increased by £28 million - Health and Social Services has increased by 6.1%; Social Security has increased 9.6%; and, Education, Sport and Culture has increased 5%;

• One-off additional expenditure approvals of £12.7 million largely relating to the Historic Child Abuse Enquiry, Pandemic Flu and the cessation of the Reciprocal Health agreement.

In total non-trading Departments ended the year £7.6 million underspent against Net Revenue Expenditure budgets (excluding non-cash capital repayments).

... non-operating expenditure is down in comparison to 2008 ...

The increase in the liability relating to the PECRS pre-87 debt is much lower than the previous year. The increases in both years are mainly due to the impact of lower interest rates on the actuarial calculation.

... £44 million has been allocated for Fiscal Stimulus funding ...

In 2009 the States Assembly agreed to allocate £44 million from the Stabilisation Fund to fund Fiscal Stimulus projects aimed at supporting the economy through the downturn. Many of these projects are now underway.

... and there is an overall increase in the States  Reserves.

At the end of 2009 funds of £664 million were held in the Strategic Reserve and Stabilisation Fund, compared to £582 million in 2008. This is principally due to an improvement in investment market in 2009.

The summary financial results in table 1 can be reconciled to the States accounts as shown in the table below:

States of Jersey Income and Expenditure 2009 (Table 2)

All figures shown in £ milion General Trading States of Jersey

Departments Revenues Funds Other as a whole Income 116 674 54 20 864 Operating Expenditure (719) - (43) (9) (771) Non-operating expenditure - - - (18) (18)

Surplus  (603)* 674* 11 (7) 75

* These figures are further analysed and compared to the Business Plan and Budget in table 3 of this report.

A detailed analysis, showing a comparison of the results for the year against the Business Plan and Budget, is set out in  the  table  below. This  analysis  complies  with  the  recommendations  of International  Public  Sector  Accounting Standard 24 (Presentation of Budget Information in Financial Statements).

2009 Comparison Actual to Budget (Table 3)

Difference: Actual Final Budget

Outturn compared to Budget Summary Budgeted Amounts Amounts and Actual Table A States Income 2009 Updated

2009 Budget Forecast

£ 000 £ 000 £ 000 £ 000

Net Income Tax

Goods and Services Tax Impots Duty

Stamp Duty

Island Rate

Other Income

Total States net General Revenue Income

478,000 488,000 50,000 50,000 49,340 51,220 20,500 19,500 10,560 10,560 41,260 34,250

649,660 653,530

507,785 19,785

47,142 (2,858) 51,247 27 23,577 4,077 10,306 (254) 34,209 (41)

674,266 20,736

Final

Outturn compared to Business Plan 2009 Approved

Summary Table A A Revenue Expenditure Business Budget

Allocations 2009 Plan note 1

£ 000 £ 000 £ 000 £ 000

Ministerial Departments

Chief Minister 15,844 22,392 21,496 (896)

- Grant to the Overseas Aid Commission 7,731 7,756 7,679 (77) Economic Development 16,422 18,401 17,506 (895) Education, Sport and Culture 98,513 99,717 98,988 (729) Health and Social Services 153,600 159,383 157,546 (1,837) Home Affairs 45,587 49,490 49,490 0 Housing (22,362) (20,551) (21,482) (931) Planning and Environment 7,141 8,149 7,752 (397) Social Security 157,066 159,565 159,533 (32) Transport and Technical Services 23,705 24,330 24,100 (230) Treasury and Resources* 61,073 62,817 55,703 (7,114) Non Ministerial States Funded Bodies

- Bailiff s Chambers 1,253 1,527 1,527 0

- Law Officers  Department 5,912 6,174 6,119 (55)

- Judicial Greffe 3,968 6,370 6,370 0

- Viscount s Department 1,425 1,438 1,438 0

- Official Analyst 599 545 545 0

- Office of the Lieutenant Governor 743 753 745 (8)

- Office of the Dean of Jersey 22 24 24 0

- Data Protection Commission 224 230 230 0

- Probation Department 1,544 1,562 1,562 0

- Comptroller and Auditor General 729 903 791 (112)

- States Assembly and its services 5,203 5,170 5,021 (149) Net Revenue Expenditure - States funded bodies 585,942 616,145 602,683 (13,462)

*Capital Repayments variance 5,857 Net Departmental Underspend 2009 (7,605) 2009 General Revenue Income less Net Expenditure carried forward 71,583

Actual Amounts

£ 000

Final Approved Budget 616,145

Details of these transfers are shown in the Annex to the accounts.

Detailed Financial Analysis 2009

Total income as shown in the States Aggregated Operating Cost Statement is £864 million. This includes all States income as shown in the graph below.

States Income 2009 (Graph 1)

2009 Total Revenue

Non Departmental

Income 1%

Separately Trading Funds 6% Income Tax

Constituted Funds 59%

1%

Departmental Salary and Wage Income 14% Earners 29%

Other Income 4% Island Rate 1%

Self Employed and Investment Holders 5%

Companies 25%

Stamp duty 3%

Imp ts 6%

GST 5%

General Revenue Income

General revenue income was £674 million in 2009, representing a small increase over 2008 and the original budget. The following table shows the main types of income.

General Revenue Income (Table 4)

Increase/ 2009  2009 Actual 2008 Actual (Decrease)

Budget £  million £  million %

£ million

650 Total General Revenue Income 674 660 2.1%

The increase in General Revenue Income in 2009 was broadly in line with RPI as shown in the graph below. The 2009 income includes a full year of GST receipts compared to 8 months in 2008. Therefore on a like-for-like basis General Revenue Income has decreased compared to 2008.

(Graph 2)

Annual Percentage Increase in General Revenue Income and RPI

20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0%

2000  2001  2002  2003  2004  2005  2006  2007  2008  2009

Year

General Revenue Expenditure RPI

Income Tax

Total income tax revenues were in line with 2008 and slightly ahead of the original budget as shown in the table below: Income Tax Revenues (Table 5)

Increase/ 2009  2009 Actual 2008 Actual (Decrease)

Budget £  million £  million %

£ million

478 Net Income Tax 1 507 499 1.6%

1 Gross Income tax receipts before provision for bad and doubtful debts amount to £503 million

The standard rate of Income Tax remained at 20 pence in the pound in 2009 (2008 year of assessment). International business companies are charged at lower rates than this on income and profits arising from international activities.

Tax raised in 2009 arises from averaged trading profits of the 2007 and 2008 financial periods. The 9% increase in personal tax reflects the introduction of proportional personal tax allowances and high levels of income for a small number of individuals which is not expected to be repeated. The tax raised from self employed and investment holders was significantly higher than budget due to a one-off peak in income from partnerships. Tax raised from companies has fallen due to the early impact of the zero/ten changes.

Goods and Services Tax

The Goods and Services Tax (GST) was introduced at 3% with effect from 6 May 2008. Income from GST during 2009 was £47 million, broadly in line with the original forecast in the 2009 budget.

Imp ts and Customs Duties

Imp ts and customs duties yielded £51 million in 2009, £1.5 million higher than 2008 and £2 million higher than originally budgeted. Vehicle Registration Duty ceased from 6 May 2008 and therefore none was collected in 2009.

Imp ts and Customs Duties (Table 6)

Duty Increase 2009 2009 2008 Increase/ applied in

Budget Actual Actual (Decrease) 2009 Budget

£ million £  million £  million % %

49.3 Total Imp ts and Customs duties 51.3 49.8 3% -

Stamp Duty and Island Rate

The yield from Stamp Duty was the same as 2008 at £24 million. The Island Rate was in line with budget and prior year at £10 million.

Stamp Duty and Island Rate (Table 7)

2009  2009 Actual 2008 Actual Increase Budget £  million £  million %

£ million

21 Stamp Duty 24 24 - 11 Island Rate 10 10 - 32 Total 34 34 -

Other Income

Other income of £34.5 million is analysed in the table below. 2009 Other Income (Table 8)

Increase / 2009  2009 Actual 2008 Actual (Decrease)

Budget £  million £  million %

£ million

41.3 Total Other General Revenue Income 34.5 45.2 (24%)

The main reason for the fall in other income compared to budget and prior year is the dramatic fall in interest rates at the end of 2008 and early 2009, after the budget was set.

Non-Trading Departments Net Revenue Expenditure

The vast majority of expenditure from the consolidated fund relates to Ministerial and Non-Ministerial Departments providing core public services to the island. This expenditure is offset by departmental income earned through operations. The  following  table  summarises  net  revenue  expenditure  comprising  both  departmental  income  and expenditure.

Departmental Net Revenue Expenditure (Table 9)

2009  2009 2008 Business Plan Actual Actual

£ million £  million £  million

684 Gross Departmental Expenditure 719 675

(98) Departmental Income (116) (109)

586 Total Net Revenue Expenditure 603* 566

* These figures have been analysed and compared to the Business Plan and Budget in table 3 of this report.

The increase in net revenue expenditure compared to RPI is shown in the graph below. The growth in net revenue expenditure is above RPI. This reflects capital budgets being transferred to revenue and one-off expenditure relating to matters such as the Historic Child Abuse Enquiry and Pandemic Flu. Allowing for these one-off impacts, the like-for-like increase in net revenue expenditure is still significantly above RPI, which reflects the expenditure approved in the 2009 Business Plan and subsequent propositions.

Net Revenue Expenditure and RPI (Graph 3)

Annual Percentage Increase in Net Revenue Expenditure and RPI

12% 10% 8% 6% 4% 2% 0%

2000  2001  2002  2003  2004  2005  2006  2007  2008  2009

Year

General Revenue Expenditure RPI

Departments  performance against budget is assessed on the basis of net revenue expenditure. The total net revenue expenditure (including capital repayments) of Departments totalled £603 million (£566 million in 2008), 74% of which related to expenditure on Health and Social Services, Education, Sport and Culture, and Social Security.

During 2009 the Council of Ministers reallocated some budgets to meet urgent cost pressures such as court and case costs. In addition there were a number of transfers between capital budgets and revenue budgets totalling £12.06 million in order to comply with the requirements of accounting standards. Whilst these transfers changed departmental expenditure approvals, they did not change the overall total of expenditure approvals including capital. After all such transfers departments ended the year underspent or in line with their final budgets.

The following graph shows the distribution of net expenditure across the key public services, further details can be found

in the annex to the accounts.

Distribution of Net Revenue Expenditure (Graph 4)

Net Revenue Expenditure

Non Ministerial

Services Economic

Other Services 5% Development

2% 3% Treasury and Health and Social Resources

Services 3%

28%

Transport and Technical Services 4%

Home Affairs 9%

Social Security Education, Sport and 28% Culture

18%

The following graph shows how expenditure on these key public services has changed compared to 2008. Percentages

show the increase, or decrease, in spend by department compared to 2008. Net Revenue Expenditure Changes Compared to 2008 (Graph 5)

Net Revenue Expenditure Compared to 2008

Health and Social Services 6.1% Social Security 9.6%

Education, Sport and Culture 5.3%

Home Affairs 1.2%

Housing* (1.5%)

Other Services 12.7%

Transport and Technical Services 12.3%

Treasury and Resources 4.6%

Chief Minister s Department 16.2% 2009  2008

Economic Development 8.2%

Non Ministerial Departments 20.5%

(40,000)  (20,000)  0  20,000  40,000  60,000  80,000  100,000  120,000  140,000  160,000

£ 000 Expenditure

In 2008 the Housing department ceased paying Rental Subsidies as these became part of the new Income Support system. As a result, the department now has a net revenue income budget and outturn (as shown above).

The following paragraphs consider the most significant of these changes; further detailed analysis is contained in the annex to the accounts.

Health and Social Services Department

Net revenue expenditure increased by £9 million (6.1%) in 2009 compared with 2008. The 2009 budget and spend reflects an additional allocation of £5.8 million to cover issues such as the cessation of the Reciprocal Health Agreement, the Historic Child Abuse Enquiry and Pandemic Flu, offset by the effect of the pay freeze. The underlying increase excepting these items was 2%.

Social Security Department

Net revenue expenditure increased over that of 2008 by £14 million (9.6%) to £159.5 million. This increase was predominantly due to an increase in the costs of Income Support as a result of increasing numbers receiving benefit and the low level of income increments in 2009.

Education, Sport and Culture Department

Net revenue expenditure increased over that of 2008 by £4.9 million (5.3%) to £99 million. The above inflation increase is due to provision of Early Years education, and additional allocation to Mont a L Abbe school and the transfer to the department of administrative responsibility for the Aquasplash Leisure Pool contract.

Home Affairs Department

Net revenue expenditure increased over that of 2008 by £0.6 million (1.2%) to £49.5 million. Both 2008 and 2009 include additional budget provision related to the Historical Child Abuse Enquiry and a number of high profile court cases.

Transport and Technical Services Department

Net revenue expenditure increased over that of 2008 by £2.6 million (12.3%) to £24.1 million. In order to comply with UK GAAP, transfers of £1.1 million were made from capital heads of expenditure to revenue. This is not additional spend but just reclassification of the amounts voted in the 2009 Business Plan. £0.5 million was voted as additional budget for bus services and the Safe Route to Schools initiative.

Economic Development Department

Net revenue expenditure increased by £1.3 million (8%) compared to 2008. The majority of this is due to transfer of budget from capital to revenue in line with UK GAAP which does not increase overall expenditure. In addition the department has received £0.5 million additional budget which was spent on investor compensation claims and a grant of £250,000 from the Tourism Development Fund which has been spent on supporting Tourism during the economic downturn.

Treasury and Resources Department

Net revenue expenditure increased by £781,000 (4.6%) compared to 2008. These increases were largely non-recurring in nature and relate to work on fiscal policy, along with investment management and improving financial management across the States.

Chief Minister s Department

Net revenue expenditure increased by £3 million (16.2%) compared to 2008. The majority of the increase relates to transfers between capital and revenue budgets which do not increase overall expenditure, initiatives funded by budgets carried forward from 2008 and new posts granted in the amendment to the Business Plan.

Further, more detailed, narrative of each department s performance can be found in the Annex accompanying these accounts.

States Trading Operations

Use of Trading Funds is governed by the Public Finances (Jersey) Law 2005. Trading Funds are designated by the States as a distinct or disparate trading operation of the States. Planning for income and expenditure of Trading Operations is governed through the States Annual Business Plan. The following table summarises the outturn for each trading operation.

Trading Outturn 2009 (Table 10)

2009  2009 2008 Business Plan Actual Actual

£ million £  million £  million

5.6 Surplus for the year 11.1 9.5

Financial statements for each fund can be found in the annex to these accounts.

Other income / expenditure for the year 2009

This represents non-departmental expenditure / income and technical accounting charges included in the States accounts.

In summary other income / expenditure is as follows: Other income / expenditure (Table 11)

Actual Actual 2009 2008

£ million £  million

Waterfront Enterprise Board Limited (surplus) / deficit  1.5 (4.5) Separately Constituted Funds and Reserves (surplus) / deficit (5.1) (33.4) Accounting adjustments 10.8 89.9

7.2 52.0

The Waterfront Enterprise Board produces separate accounts which explain their results for the year.

Separately Constituted Funds and Reserves

The Public Finances (Jersey) Law 2005 allows the States to establish special funds. These are funds with a specific purpose and are usually established by legislation or a States decision. The governance arrangements are therefore specific to each individual fund. Accounts for each fund are shown in detail in the annex to these accounts.

The (surplus) / deficit for each of the Separately Constituted Funds and Reserves is shown in the table below: (Table 12)

Actual Actual 2009 2008

£ million £  million

(Surplus) / Deficit for the year (5.1) (33.4)

Strategic Reserve

The Strategic Reserve is the States long-term reserve, set up in the mid 1980s to safeguard against a major downturn in the economy. The purpose of the reserve was clarified by the States in December 2006 when they agreed that the Strategic  Reserve  should  be  a  permanent  reserve, where  the  capital  value  is  only  to  be  used  in  exceptional circumstances to insulate the Island s economy from severe structural decline such as the sudden collapse of a major island industry or from major natural disaster. The total value of the reserve at year end was £550 million (£507 million in 2008). This reflects a recognition of realised losses on disposal of investments resulting in a relatively low surplus of £0.6 million for the year, offset by a £42 million unrealised gain on revaluation of investments reflecting the improvement in capital markets in the second half of 2009. Overall the Reserve has weathered recent turmoil in the financial markets well.

The following graph shows the market value of the Strategic Reserve over recent years. Strategic Reserve Net Assets (Graph 6)

Strategic Reserve - Net Assets

550

510 507

600 456 477

368 382 397 418

500 335

400

300

200

100

0

 2000  2001  2002  2003  2004  2005  2006  2007  2008  2009

Year

Stabilisation Fund

In December 2006 the States agreed to establish a Stabilisation Fund, the purpose of the fund being to make fiscal policy more countercyclical, providing some protection from the adverse impact of economic cycles, and creating a more stable economic environment in the Island with low inflation. This will involve taking money out of the economy and paying it into the Fund when the economy is strong and drawing money down from the Fund to support the economy when it is weaker.

Following the agreement of the States, the fund was established with a transfer of £32 million of surplus funds previously held in the Dwelling House Loans Fund. An additional transfer of £38 million was made in 2008. In 2009 a further £81 million was transferred to the Stabilisation Fund, £63 million from the Consolidated Fund and £18 million from the Dwelling House Loans Fund, and £44 million was transferred out of the Stabilisation Fund for the Fiscal Stimulus programme. The following graph shows the Net Assets of the Stabilisation Fund since inception.

The assets of the Stabilisation Fund are cash instruments. The income generated in 2009 (£1.9 million) is therefore considerably lower than in 2008 (£3.0 million) despite the increase in net assets. This is as a direct result of the significant fall in interest rates at the end of 2008 and early 2009.

Stabilisation Fund Net Assets (Graph 7)

Stabilisation Fund Net Assets

114

120

100 75

80

60 32 34

40

20

0

2006  2007  2008  2009

Year

The Minister for Treasury and Resources is responsible for proposing to the States transfers between the Consolidated Fund and Stabilisation Fund having regard to the advice of the independent Fiscal Policy Panel (FPP).

Accounting adjustments

The main items under this heading are the movement in pension liability and gains on disposal of fixed assets. Total accounting adjustments in 2009 are £10.8 million (2008: £89.9 million).

Movement in Pension Liability

The States of Jersey pension liabilities including the past service liabilities are accounted for in accordance with Financial Reporting Standard 17 and Financial Reporting Standard 12. The movement in the pension liability is broken down as follows. This is also shown in note 4 of the accounts.

Movement in pension liability (Table 13)

Actual Actual 2009 2008

£ million £  million

Total movement 23.7 95.7

The actuarial valuation of the PECRS pre-87 liability is particularly sensitive to underlying assumptions such as discount rates and inflation rates. The recent increases in this actuarial valuation reflect the movement in a number of underlying assumptions, with the change in value largely driven by a fall in interest rates. A small change in these assumptions could have a significant effect on the value of the liability and the surplus/deficit for the year.

The payments in relation to this liability are made annually in accordance with an agreement adopted by the States in 2005 and are unaffected by the annual accounting valuation. The basis of the amount payable by the States to the PECRS by the States each year remains the same.

Gains on disposal of fixed assets

Gains on disposal of fixed assets arise principally from the sale of assets in line with the capital programme as set out in the Annual Business Plan. In the year Property Holdings made sales of property worth £5 million and Housing made sales worth £6 million.

The Capital Programme 2009

The States capital expenditure allocation from the Consolidated Fund for 2009 was £42 million. This was reduced in the year to £30 million as a result of capital to revenue transfers in order to meet the requirements of accounting standards. During 2009, capital expenditure from the Consolidated Fund amounted to £104 million (£45.4 million in 2008), the increase largely relating to the Energy from Waste Plant. This spend in the year includes capital expenditure from allocations made in previous years.

The major projects funded from the Consolidated Fund with a spend of more than £1 million in 2009 are listed below. Spend on Major Capital Projects (Table 14)

Spend in Spend to 2009 date

£ million £  million

Salisbury Crescent 1.0 1.3 Le Marais 1.1 6.9 The Cedars 2.4 5.9 ICR project - Health 2.6 4.0 Energy from Waste Plant 66.6 69.2 Infrastructure maintenance 1.0 3.8 Highlands College 3.2 4.8 A&E / Radiology extension 1.8 2.3 Prison Cell Block Reconstruction 3.7 10.8

At 31 December 2008 £176.5 million of capital funding allocated in 2009 and previous years had yet to be incurred. The significant approved but unspent funds included £35 million on the Energy from Waste Plant, £21 million for other Transport and Technical Services projects, £17 million for the relocation of the Police Station Headquarters, £11 million for other building projects, £10 million for Housing renovation projects and £4 million for the Health Integrated Care Record Programme.

The aggregated accounts also include capital expenditure from other States funds; total States capital expenditure in 2009 is summarised in the table below.

Capital Expenditure Summary (Table 15)

2009 2008 Capital Expenditure Financed from: £  million £  million

Total Capital Expenditure 123.5 72.9

2. Structure, Governance, Aims and Objectives

Structure:

Principal Activities of the States of Jersey

The States of Jersey raises Taxes and other levies, and use these to fund the provision of a wide range of government and public services. These include the provision of the key public services of Health Care, Education and Social Security. These functions are primarily carried out by Departments, both Ministerial and Non-Ministerial.

The States of Jersey Accounting Boundary

The entities included within the States of Jersey Accounting Boundary is shown in the following diagram. More information on specific entities is given in the next section.

Some functions of Government are carried out by entities outside of the accounting boundary including some social benefits met by the Social Security Fund and Health Insurance Fund.

Description of Entities and their Functions

Consolidated Fund

The Consolidated Fund is governed by the Public Finances (Jersey) Law 2005 and is the fund through which the majority of the States income and expenditure is managed, including General Revenue Income and Departmental income and expenditure.

Planning for income to the Consolidated Fund is governed through the States Annual Budget which sets out the taxation measures and the expected level of income. Further details of this process can be found in the States Annual Budget.

Through the Annual Business Plan debate, the States Assembly allocates funding to Departments Net Expenditure Cash Limits (budgets) from the Consolidated Fund. Departmental Cash Limits may change during the year, subject to the approval of the Minister for Treasury and Resources or the States. Cash Limits may be changed for one of the following reasons; all such changes are reported to the States.

• Unspent Cash Limit voted by the States in one year approved for carry forward to the following year;

• Amounts may be transferred between approved capital projects and revenue budgets; or

• Additional amounts may be approved by the States during the year.

The component parts of the Consolidated Fund are shown below.

Ministerial Departments

These are departments that come under the control of a member of the Council of Ministers.

Non-Ministerial Departments

Some States Departments do not come under direct Ministerial control, due to the nature of the work they perform. Also included in this section are the Overseas Aid Commission, who report directly to the States, and the States Assembly itself.

General Revenue Income

General Revenue Income policy is set via the States Annual Budget, as explained further in the Governance section under The States of Jersey Business and Financial Planning Cycle .

The main income streams are: Taxation, Imp ts (e.g. on alcohol, tobacco and fuel), Stamp Duty, Investment Income and Island Rates.

Reserves

The States operates two reserves with specific purposes.

States Trading Operations

Under the Public Finances (Jersey) Law 2005, the States can designate any distinct area of operation as a States Trading Operation. Estimates for Trading Operations are approved in the Annual Business Plan. At present, four such operations have been designated:

States Special Funds

The Public Finances (Jersey) Law 2005 allows the States to establish special funds (also know as Separately Constituted Funds). These are funds with a specific purpose and are usually established by legislation or a States decision. A summary of the purpose of the various funds is given below.

Wholly Owned Company

The Waterfront Enterprise Development Board Limited (WEB) is a wholly owned company of the States. This was incorporated in 1996 and vested with responsibility for the co-ordination and promotion of development in the St Helier Waterfront Area on behalf of the States of Jersey.

Public Sector Bodies Outside of the Accounting Boundary

Major Public Sector Bodies that are outside of the Accounting Boundary include:

Parishes

The Parishes perform various Government Functions, including Refuse Collection, Provision of Parks and Gardens and issue of Driving Licenses. Details of the functions of individual parishes can be found on the Parishes Websites.

http://www.parish.gov.je/

Social Security Funds

Confiscation Funds

Strategic Investments

Independent Bodies

Governance, Aims and Objectives:

The States Assembly

The States Assembly is the highest decision-making authority of the Island and makes decisions about new laws or major policy changes. The principal functions of the States are -

1. to pass Laws (which require the sanction of Her Majesty in Council) and Regulations on all domestic matters;
2. to approve annual estimates of public expenditure (revenue and capital);
3. to appoint a Council of Ministers charged with responsibility for the different aspects of public business;
4. to appoint a Public Accounts Committee and scrutiny panels to hold the Executive to account;
5. to determine policy on propositions presented by Ministers, scrutiny panels and other bodies or individual members, and executive matters such as compulsory purchases;
6. to debate and decide issues of public importance;
7. to consider petitions for the redress of grievances; and
8. to represent the people of Jersey.

The constitution of the States and all general provisions governing procedure, are set out in the States of Jersey Law 2005, and in the Standing Orders of the States of Jersey made under the Law.

The Public Finances (Jersey) Law 2005 sets out the procedures that govern the administration of the States finances. The present composition of the States, as determined by the States of Jersey Law 2005, is:

Elected Members

12 Senators 12 Conn tables 29 Deputies

Non-Elected Members

the Bailiff

the Lieutenant-Governor the Dean of Jersey

the Attorney General the Solicitor General

Officers

the Greffier of the States, who is clerk of the States

the Deputy Greffier of the States, who is the clerk-assistant of the States the Viscount, who is the executive officer of the States

Only the elected members have voting rights.

In 2005 Jersey adopted a Ministerial system of government. A Council of Ministers works alongside Scrutiny Panels. Of the 53 States members with voting rights, a maximum of 23 members are in ministerial positions either as Ministers (ten members) or Assistant Ministers (up to 13 members). Up to 20 other States members sit on the Scrutiny Panels. The following diagram shows this structure.

Ministerial Government

The States Assembly

Executive Scrutiny

Council of Ministers Scrutinity Chairmen s Committee

Individual Ministers Public Accounts Committee Ten States departments Scrutinity Panels

The Council of Ministers

The Council of Ministers is made up of a Chief Minister and nine other Ministers, who are chosen individually on a vote by all States members. Each Minister is accountable for their area of government. The ten Ministers together comprise the Council of Ministers. The current Ministers are:

The Council of Ministers is responsible for producing Jersey s Strategic Plan. Once the Plan is approved by the States Assembly, the Council will make sure the Strategic Plan is properly carried out throughout the public service.

The Council of Ministers is supported by a Chief Executive who is the head of the public service. The Chief Executive leads a Corporate Management Board that is made up of the chief officers of the main departments and heads of the principle support functions.

Scrutiny

Scrutiny is made up of the following elements:

Chairmen s Committee Public Accounts Committee Individual Scrutiny Panels

Auditor

The financial statements for the States of Jersey are audited by Price waterhouseCoopers LLP, who are appointed by the Comptroller and Auditor General under the Public Finances (Jersey) Law 2005. The Report of the auditor on the accounts is included with the accounts.

The audit fee is disclosed in Note 5 of the accounts.

The accounts are a true and fair reflection of the financial position of the States of Jersey for the financial year ended 31 December 2009. Our accounting policies are outlined in the accounts and have been fairly and consistently applied. We keep proper and up to date accounting records and take all reasonable steps to prevent and detect fraud and other irregularities.

There is no relevant audit information of which the States of Jersey s auditors are unaware, and all steps have been taken to identify any relevant audit information and to establish that the States of Jersey s auditors are aware of that information.

An Audit Committee, with an independent chair, operates throughout the year, considering internal control issues.

The States of Jersey Business and Financial Planning Cycle

The States Strategic Plan sets out the States vision for a next five year period including the broad financial framework. A Strategic Plan was published in 2009, which aims to address the issues facing Jersey.

The States Objectives and Strategies are set out in detail in the States Strategic Plan, which is available on the States Website. The strategic aims outlined in the plan are:

• Enable people to reach their full potential;

• Meet our health, housing and education challenges;

• Prepare for the ageing society;

• Protect the countryside and our environment;

• Create a responsive and efficient government.

To achieve this, we [the States] must also:

• Support and maintain our economy

The Strategic Plan goes on to outline sixteen Priorities that support these aims, and Key Performance Indicators that can be used to measure progress against these priorities.

The Annual Business Plan provides the detail behind that framework and proposes financial allocations to both individual departments and capital projects in order to provide resources to departments to enable the achievement of Jersey s Strategic Aims, thus ensuring that funding is allocated in accordance with agreed strategic priorities. The Assembly debates the draft Annual Business Plan in September, which approves expenditure for the following year, and also approves indicative expenditure totals for a further four years.

Following approval of the Business Plan, the States then considers the annual Budget report that proposes the measures through which the approved expenditure limits can be funded, including taxation changes.

Departments then prepare their individual Business Plans which set out in detail the Objectives of the department for the year, and how these help deliver the strategic priorities agreed in the Strategic Plan. The plans also keep Islanders informed about how political decisions are carried out day-to-day. The States two main controls on expenditure are through Net Revenue Expenditure cash limit, and Capital Project budgets voted by the States to departments.

There is a clear link between the high-level priorities set in the Strategic Plan and the detailed departmental business plans that are published annually. Within the year in question, regular reporting occurred on performance against financial budgets, including quarterly reporting to the Council of Ministers. These processes are part of a year round financial planning and monitoring cycle that informs future resource allocation.

3. Introduction to the States of Jersey Accounts 2009

The main statements included in the accounts are explained below along with an explanation of their purpose.

Operating Cost Statement

This statement provides an informative analysis of the States income and expenditure, highlighting income raised by the States of Jersey, such as taxation, other income, and States expenditure on social benefits, staff costs, grants and subsidies and other expenditure. It encompasses all the entities that comprise the States of Jersey; a segmental analysis is included in the notes to the accounts providing further analysis of the States income and expenditure.

Statement of Total Recognised Gains and Losses

The Statement of Total Recognised Gains and Losses provides a summary of the States financial gains and losses regardless of whether or not they were shown in the Operating Cost Statement or the Balance Sheet. This includes the surplus for the year, from the Operating Cost Statement as well as other unrealised gains and losses.

Balance Sheet

The balance sheet provides a snapshot of our financial position as at 31 December. It sets out what we own, what we owe and what is owed to us at that point in time.

Cash Flow Statement

This statement summarises the total cash movements during the year for both capital and revenue purposes. Notes

The accounts also include a set of notes that provide further analysis of the figures contained within the main statements.

Annex

The annex to the accounts provides financial statements and reports for the entities included within the States of Jersey Accounts. A glossary is included at the end of the annex to the accounts providing an explanation of the terminology used in this report and accounts.

Auditors  Report

INDEPENDENT  AUDITORS  REPORT  TO  THE  MINISTER  FOR  TREASURY  AND  RESOURCES  OF  THE  STATES  OF  JERSEY  AND  THE COMPTROLLER AND AUDITOR GENERAL OF THE STATES OF JERSEY

We have audited the Financial Report and Accounts of the States of Jersey for the year ended 31 December 2009 in accordance with the Public Finances (Jersey) Law 2005. They comprise the Aggregated Operating Cost Statement, the Aggregated Balance Sheet, the Aggregated Cash Flow Statement, the Statement of Total Recognised Gains and Losses and the related notes. The Financial Report and Accounts have been prepared under the accounting policies set out therein.

Respective responsibilities of the Treasurer of the States, the Comptroller and Auditor General of the States and auditors

The Treasurer s responsibilities for preparing the annual Financial Report and Accounts are set out in the Public Finances (Jersey) Law 2005 and summarised in the Statement of Responsibilities for the Statement of Accounts.

The Comptroller and Auditor General s responsibilities are to ensure that the Financial Report and Accounts is audited within 5 months of the end of the financial year.

We have been appointed by the Comptroller and Auditor General to audit the Financial Report and Accounts in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). This report, including the opinion, has been prepared for and only for the Minister for Treasury and Resources of the States of Jersey and the Comptroller and Auditor General of the States of Jersey in accordance with the Public Finances (Jersey) Law 2005 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

We report to you our opinion as to whether the Financial Report and Accounts give a true and fair view in accordance with the Public Finances (Jersey) Law 2005. We also report to you whether in our opinion the information given in the Minister s Report and Treasurer s Report are consistent with the Financial Report and Accounts.

In addition we report to you if, in our opinion, the States has not kept adequate accounting records, if the States  Financial Report and Accounts are not in agreement with these accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by the Public Finances (Jersey) Law is not disclosed.

We review whether the Statement on Internal Control reflects the States of Jersey s compliance with the relevant guidance issued by the Financial Advisory Board of the States of Jersey on 14 November 2006 and we report to you if it does not. We are not required to consider whether the statement covers all risks and controls. We are also not required to form an opinion on the effectiveness of the States  corporate governance procedures or its risk and control procedures.

We read the other information presented with the Financial Report and Accounts, and consider whether it is consistent with the audited Financial Report and Accounts. This other information comprises only the Annex to the Financial Report and Accounts. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the Financial Report and Accounts. Our responsibilities do not extend to any other information.

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) 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 Report and Accounts. It also includes an assessment of the significant estimates and judgments made by the Treasurer in the preparation of the Financial Report and Accounts, and of whether the accounting policies are appropriate to the organisation s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Financial Report and Accounts are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the Financial Report and Accounts.

Opinions

In our opinion:

• the Financial Report and Accounts give a true and fair view, in accordance with the Public Finances (Jersey) Law 2005, of the stat e of the States of Jersey s affairs as at 31 December 2009 and of the income and expenditure and cash flows for the year then ended;

• the financial statements have been properly prepared in accordance with the Public Finances (Jersey) Law 2005; and

• the information given in the Minister s Report and the Treasurer s Report is consistent with the Financial Report and Accounts.

Price waterhouseCoopers LLP 26th May 2010 80 Strand

London

WC2R 0AF

1. Basis of Accounts

The Financial Report and Accounts are prepared to meet the requirements of the Public Finances (Jersey) Law, 2005. The following paragraphs outline the accounting basis on which the 2009 accounts have been prepared.

2. Aggregation and Consolidation

The accounts reflect the aggregated Operating Cost Statement and the Balance Sheet of the States of Jersey including the results of separately constituted funds but not Jersey Telecom Group Limited, Jersey Post International Limited, Jersey Electricity Company Limited and Jersey New Waterworks Company Limited.

As the Waterfront Enterprise Board Limited, a wholly-owned company, is a developer and agent of the States of Jersey, its results and financial position are aggregated within the States of Jersey accounts.

The accounts do not include certain funds, such as legacies and bequests, which are administered by the States of Jersey. The Social Security Fund, Social Security (Reserve) Fund, and Health Insurance Fund accounts will be published separately to the States accounts. The Criminal Offences Confiscation Fund, Drug Trafficking Confiscation Fund and Civil Assets Recovery Fund are not aggregated into the States accounts; however these will be included in the 2010 accounts.

3. Inter-Department Transactions

Transactions  and  balances  between  entities  whose  results  are  included  in  these  accounts, are  not eliminated.

4. Related Party Transactions

The accounts do not contain any disclosures with respect to related party transactions.

5. Foreign Currencies

Assets and liabilities denominated in foreign currencies are translated to sterling at rates current at the balance sheet date. Transactions are translated into sterling at the rate current at the date of the transaction. All realised foreign exchange differences are included in the operating cost statement. Unrealised foreign exchange differences are included in the Statement of Total Recognised Gains and Losses.

6. Income and Expenditure

Income and expenditure are accounted for using the accruals concept, i.e. income and expenditure are accounted for when goods and services are provided and received, unless specified otherwise.

7. Income Tax, Goods and Services Tax and Imp ts

Income Tax is recognised when an assessment is raised with provisions made for doubtful debts and adjustments following appeals. In addition, an adjustment is made for estimated repayments due under the Income Tax Instalment Scheme. Tax collected in the year under the Income Tax Instalment System which is due for assessment in the following year (tax collected on a current year basis) is recognised as receipts in advance.

Goods and Services Tax (GST) is recognised on an accruals basis. GST is deemed to be receivable by the States of Jersey at the point of sale of goods or services which are liable to GST. GST is deemed to be payable by the States of Jersey at the point of payment by a registered business for goods or services which are liable to GST. Fees payable by International Services Entities are recognised on an accruals basis and are included in total GST receipts in the Operating Cost Statement.

Imp ts duties are recognised when the goods are landed in Jersey. viii. Provisions for Liabilities and Charges

A provision is made in the accounts in respect of obligations arising from past events where the predicted outcome of the event is considered probable and there is a reliable estimate of the amount of the liability.

9. Fixed Assets

Fixed Assets are categorised according to their source of funding as opposed to being classified according to their nature, function or use in business.

A capital repayment charge is made as an approximation to any depreciation charge that would be applicable under UK GAAP, including an element in respect of land, which would not be depreciated under UK GAAP. The capital repayment charge is calculated as cost at the end of the year divided by the estimated remaining life of the asset. Assets in the course of construction are held at cost. Completed fixed assets are held at cost less capital repayments.

Useful economic lives (by category) over which assets are depreciated or over which capital servicing is allocated are as follows:

Buildings 50 years Infrastructure 10-30 years Plant and Equipment 5-10 years Fixtures and Fittings 5-10 years Vehicles 5 years Computer hardware and software 3-5 years

For expenditure where the source of funding has been designated as capital, but where the whole or majority of the spend is deemed to be revenue in nature, a capital repayment charge equivalent to the whole cost incurred in the year is made.

10. Leased assets

Assets held under finance leases or sale and lease-back arrangements are capitalised as fixed assets and depreciated over the shorter of the lease term or their estimated useful economic lives. Rentals paid are apportioned between reductions in the capital obligations included in creditors, and finance charges charged to the Operating Cost Statement. Expenditure under operating leases is charged to the Operating Cost Statement in equal instalments over the period of the lease.

11. Capital Grants

Capital grants received in respect of the construction of tangible fixed assets are carried forward in the balance sheet until such time as the related asset is constructed and are then deducted from the construction costs.

12. Strategic Investments

Although the States of Jersey holds the majority of the ordinary voting shares in Jersey Telecom Group Limited, Jersey Post International Limited, Jersey Electricity Company Limited and Jersey New Waterworks Company Limited, the accounts of these entities are not consolidated as these are strategic investments and information on these companies is better provided by reference to the separate accounts. These investments are stated at cost less provision for any permanent diminution in value.

xiii. Other Investments

Investments held other than for strategic purposes, principally for investment returns, are carried at market value.

Profits or losses on disposal or redemption of investments are included in the Operating Cost Statement when realised.

Unrealised gains and losses on investments are included in the Statement of Total Recognised Gains and Losses.

Income on interest-bearing investments is recognised on an accruals basis. Income on other investments is recognised when receivable.

14. Stock and Work in Progress

Stock and work in progress includes site developments held for resale by the Waterfront Enterprise Board Limited and other general stocks.

All stocks are held at the lower of cost and net realisable value.

15. Debtors, Prepayments and Advances

Debtors are recognised on an accruals basis reflecting goods and services provided for which income is due as at 31 December 2009.

Prepayments are recognised on an accruals basis reflecting goods and services that have been paid for but no benefit received as at 31 December 2009.

Advances are recognised on an accruals basis reflecting the amounts advanced less any capital repayments received.

Debtors, prepayments and advances are recognised at amortised cost less provision for any permanent diminution in value

16. Creditors

Revenue creditors are recognised on an accruals basis reflecting goods and services received in the year ending 31 December 2009, which have not been paid for as at 31 December 2009.

Capital creditors include the cost of all work certified as complete up to the 31 December 2009. Creditors are recognised at amortised cost less provision for any permanent diminution in value xvii. Cash and Liquid Resources

Cash and Liquid Resources are cash in hand and deposits repayable on demand. Cash includes cash in hand and deposits denominated in foreign currencies.

xviii. Contingent Liabilities

A contingent liability will be disclosed where:

a possible obligation arises from a past event, the existence of which will be confirmed only by the occurrence of one or more uncertain future events not wholly within the States of Jersey s control; or

a present obligation arises from past events but has not been recognised because:

it is not probable that a transfer economic benefits will be required to settle the obligation; or

the amount of the obligation cannot be measured with sufficient reliability

xix. Pension Schemes

The States of Jersey operates two principal pension schemes for certain of its employees (Public Employees Contributory Retirement Scheme and Teachers Superannuation Fund). In addition two further pension schemes exist, the Jersey Post Office Pension Fund and the Discretionary Pension Scheme. These schemes are closed to new members. The assets of each scheme are held in separate funds.

The Jersey Post Office Pension Fund and the Discretionary Pension Scheme are accounted for as conventional defined benefit schemes in accordance with Financial Reporting Standards (FRS) 17.

The Public Employees Contributory Retirement Scheme and Teachers Superannuation Fund, whilst final salary schemes, are not conventional defined benefit schemes as the employer is not responsible for meeting any ongoing deficiency in the schemes.

Employer contributions to the schemes are charged to revenue expenditure in the year they are incurred.

In agreeing P190/2005 the States confirmed responsibility for the past service liability which arose from restructuring of the PECRS arrangements with effect from 1 January 1988. This liability is recognised in the accounts.

The Jersey Teachers Superannuation Fund was restructured in April 2007. The restructured scheme mirrors the Public Employees Contributory Retirement Scheme. A provision for past service liability, similar to the PECRS pre-87 past service liability, has been recognised, although this has not yet been agreed with the Fund s board of management.

Apart from the liabilities detailed above, the employer is not responsible for meeting any ongoing deficiency in the schemes.

Information on the schemes is presented in the accounts reflecting the cost of the schemes. In particular, information specified in FRS 17 is disclosed in note 4 to the accounts.

Actuarial gains and losses arising in the year from the difference between the actual and expected returns on pension scheme assets, experience gains and losses on pension scheme liabilities and the effects of changes in demographics and financial assumptions are included in the Statement of Total Recognised Gains and Losses for the Jersey Post Office Pension Fund and the Discretionary Pension Scheme.

Aggregated Operating Cost Statement for the Year ended 31 December 2009

2009 2008 Notes £  000 £  000

Surplus for the Year 75,521  57,385

Statement of Total Recognised Gains and Losses for the Year ended 31 December 2009

2009 2008

£ 000 £  000

Surplus for the Year  75,521  57,385 Unrealised Gain/(Loss) on Revaluation of Investments  41,997 (30,197) Unrealised Loss on Foreign Exchange  (184) - Actuarial Gain/(Losses) in respect of Defined Benefit Pension Schemes  (1,153) 467

Total Recognised Gain Relating to the Year 116,181  27,655

Aggregated Balance Sheet as at 31 December 2009

2009 2008 Notes £  000 £  000

Signed: Date: 24/05/2010 Signed: Date: 24/05/2010 ( Deputy Treasurer of the States (Minister for Treasury and Resources)