Green Leisure Trust has been set up by Green Municipality Authority as a separate trading company to manage and provide leisre services for tge authority. Green Leisure Trust operates at arm"s length from the authority and is treated as an independent subsidary. The financial statements and additional information from its first 2 financial years of operation are set out below.

Summarised statement of financial performance for year ending

	31 mar 20x1	31 mar 20x2
	P000	P000
Income	9400	8505
Operating costs	(8080)	{8955}
Operating surplus /deficits	1320	(450)
Finance costs	(1070)	(1280)

Statement of financial position as at

	31.03.20x1	31.03.20x2
ASSETS	P000	P000
N. C. A	13085	12430
C. A
Inventory	75	65
Debtors	70	75
Cash	550	255
Total assets	13780	12825
EQ&LIAB
Equity; retained surplus	5690	3985
NCL loans	5700	5130
CL
Payable	2040	3310
Income received in advance	350	400
Toal eq and liabilities	13780	12825

Additional information

A breakdown of income ober 2 is as follows

Entrance fees 2800. 2885

Catering. 600. 620

Grants. 6000. 5000

9400. 8505

Entrance fees and catering income are all cash sales. Grants include support from the authority which is to decrease year as the trust becomes self financing as well as other sources

Breakdown of payables over 2 years

Trade payables. 440. 3110

Capital payables. 1500. 0

Interest charges. 100. 200

2040. 3310

Capital payables relate to a programme vales at P2000000, to create additional facilities such as cafes for income generation

The elected representative have asked for a complete financial review of the first 2 years of operation with a view to assessing if transfering operations of authority cuktyral services(museums, theatres and library) should gake place within a three year timescale

The authority has identified 2 financial targets for the trust

A net margin (after capital financing costs have been accounted for) of at least 2%

A return(after capital financing cost have been accounted for) on capital employed of at least 3.5%

Financial indicators are to be used which wolud be useful in assessing the trust performance.

Requirements

Analze the financial performance of GLT

Recommended ways to improve financial performance or how it could be better understoid

Recommend if transfee of cultural service should be completed

Explain any limitations of the review