annual report and accounts 2002-03

Schedule 4

Cash Flow Statement

For the year ended 31 March 2003

		2002-03	Restated (Note 26) 2001- 2002
	Note	£000	£000
Net cash outflow from operating activities before interest	A	21,165,066	21,007,490
Returns on investments and servicing of finance	B	4,363	(4,887)
Net capital expenditure and financial investment	C	5,647,360	5,088,289
Payments to the Consolidated Fund		533,726	147,843
Financing from the Consolidated Fund (supply)	13	(27,136,321)	(26,568,984)
Repayment of loans from the National Loans Fund		1,559	1,343
(Increase)/decrease in cash at bank and in hand	13	215,753	(328,906)

Notes to the cash flow statement:
A. Net cash outflow from operating activities before interest	Sch 2	36,452,333	28,121,034
Net operating cost before interest
Non-cash transactions:
– Depreciation and amortisation charges	3	(6,981,455)	(6,120,520)
– Impairment in value of fixed assets	3	(5,388,224)	(1,249,948)
– Provisions to reduce value of stock to its net realisable value	3	(111,125)	(439,186)
– Stocks written-off – net (Note 1)	3	(321,811)	–
– Auditors’ remuneration	3	(3,405)	(4,170)
– Surplus/(deficit) arising on disposal of tangible fixed assets	3	45,260	39,179
– Surplus/(deficit) arising on disposal of investments	3	(8,397)	–
– Fixed Assets written off – net	3	(101,604)	(74,923)
– Fixed Asset investment written off	3	(219,886)	–
– Capital project expenditure written off	3	(584,928)	–
– Movement in provisions for liabilities and charges (excluding capitalised provisions)	16	(2,039,490)	(526,150)
		(15,715,065)	(8,375,718)
Dividends received from Trading Fund	4	8,587	7,431
Adjustments for movements in working capital other than cash (Note 2)
– Increase/(decrease) in stocks/WIP		(26,645)	140,505
– Increase/(decrease) in debtors		540,276	248,057
– (Increase)/decrease in creditors		(507,279)	601,003
		6,352	989,565
Paid against provisions for liabilities and charges		412,859	265,178
		21,165,066	21,007,490
B. Returns on investments and servicing of finance
Dividends received from Trading Fund	4	(8,587)	(7,431)
Interest received		(21,704)	(10,785)
Interest paid		282,357	245,965
Deduct: Unwinding of discount on provisions for liabilities and charges	5	(247,703)	(232,636)
		34,654	13,329
		4,363	(4,887)
C. Analysis of capital expenditure and financial investment
Acquisition of fixed assets		6,116,938	5,428,11
Proceeds on disposal of tangible fixed assets		(404,774)	(287,923)
Proceeds on disposal of investments		(39,427)	–
		5,672,737	5,140,190
Repayment of loans made to the Trading Funds and QinetiQ	9	(59,577)	(59,501)
Loans made to Trading Funds	9	34,200	7,600
		5,647,360	5,088,289
Analysis of Financing
Parliamentary Funding from the Consolidated Fund (Supply)	13	27,136,321	26,568,984
(Increase)/decrease in cash at bank and in hand during the year	13	215,753	(328,906)
Funding from the Contingency Fund		–	1,000,000
Repayment to the Contingency Fund		–	(1,000,000)
Consolidated Fund Extra Receipts received and not paid over		90,437	69,430
Consolidated Fund Extra Receipts received in prior year paid over		(69,430)	(4,323)
Part proceeds of certain fixed assets payable to Consolidated Fund		44,300	–

Grant drawn in the previous year and not spent, repaid to the Consolidated Fund during the year		(420,321)	(71,910)
Repayment of loan to Qinetiq repaid to Consolidated Fund		–	(46,429)
Deduct funding appropriated in respect of Machinery of Government changes		–	(27,712)
Transitional adjustment, being adjustment to working capital of outstanding balances relating to the Department’s appropriation accounts for 2000 –2001		–	(59,542)
Adjustment for movements on cash balances in respect of collaborative projects		(6,000)	–
Adjustment for Machinery of Government change during the year		305	–
Net cash requirement	Sch 1	26,991,365	26,099,592
Amount of grant actually issued to support the net cash requirement = £27,136,320,807.65.

Note 1: In 2001-02, stock write off (£215,072,000) and capital project expenditure written off (£12,537,000) were adjusted against the working capital movements.

Note 2: The movements shown above exclude assets and liabilities at 31 March 2002 in respect of ABRO which was established as a Trading Fund at 1 April 2002, and which is outside the Departmental Boundary.

	£000	£000
Fixed Assets		44,381
Stock	20,912
Creditors	(666)
		20,246
		64,627

The notes on pages 97 to 141 form part of these financial statements.

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Last Updated: 2 Dec 03