LONDON‟S GLOBAL UNIVERSITY
Annual Report and Financial Statements
for the year ended 31 July 2012
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
MISSION STATEMENT
UCL is London's Global University
OUR VISION
An outstanding institution, recognised as one of the world‟s most advanced
universities and valued highly by its community of staff, students, alumni, donors
and partners and by the wider community;
Providing an outstanding education to students from across the globe that
imparts the knowledge, wisdom and skills needed by them to thrive as global
citizens;
Committed to leadership in the advancement, dissemination and application of
knowledge within and across disciplines;
Committed to achieving maximum positive social, environmental and economic
benefit through its achievements in education, scholarship, research, discovery
and collaboration;
Developing future generations of leaders in scholarship, research, the learned
professions, the public sector, business and innovation;
Tackling global challenges with confidence;
As London‟s global university, leading through collaboration across London and
worldwide in the advancement of knowledge, research, opportunity and
sustainable economic prosperity;
Operating ethically and at the highest standards of efficiency, and investing
sufficiently today to sustain the vision for future generations.
OUR VALUES
Commitment to excellence and advancement on merit
Fairness and equality
Diversity
Collegiality and community-building
Inclusiveness
Openness
Ethically acceptable standards of conduct
Fostering innovation and creativity
Developing leadership
Environmental sustainability.
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
CONTENTS
Page
1
Committee Membership
2
Financial Summary
3
Operating and Financial Review
14
Corporate Governance
16
Responsibilities of the Council of UCL
18
Independent Auditor‟s Report to the Members of the Council of UCL
20
Statement of Principal Accounting Polices
25
Consolidated Income and Expenditure Account
26
Statement of Group Historical Cost Surpluses and Deficits
26
Statement of Total Recognised Gains and Losses
27
Consolidated Balance Sheet
28
UCL Balance Sheet
29
Consolidated Cash Flow Statement
30
Notes to the Accounts
63
Financial Summaries (unaudited)
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
FINANCIAL SUMMARY
Council (Trustees)
Lay Members:
Ms Anne Bulford(Treasurer to
30/09/12)
Ms Philippa Foster-Back*
Mr Rob Holden (to 30/9/12)
Mr Mark Knight
Mr Simon Melliss (from 01/01/12,
Treasurer from 01/10/12)
Ms Catherine Newman (to 30/09/11)
Mr Ven Balakrishnan (from 01/01/12)
Ms Vivienne Parry*(Vice-Chair)
Ms Katharine Roseveare*
Dr Gill Samuels
Professor Chris Thompson
Sir Stephen Wall*(Chair)
Baroness (Diana) Warwick
Lord Clement Jones (from
01/01/12)
Academic
Members:
Professor David Attwell
Dr Robert Barber
Professor Malcolm Grant*(Provost)
Dr Benet Salway* (to 30/9/12)
Dr Stephanie Schorge*
Professor Nick Tyler
Professor Maria Wyke
Dr Sarah Snyder (from 01/01/12)
UCL Union:
Mr Luke Durigan (to 31/07/12)
Mr Edwin Clifford-Coupe (from
01/08/12)
Mr Timothy Rees Jones (to
31/07/12)
Ms Natasha Gorodnitski (from
01/08/12)
Finance Committee
Lay Members:
Ms Anne Bulford (Chair to 30/09/12)
Mr Ven Balakrishnan
Dr Ben Booth
Mr Mark Clarke
Mr Simon Melliss (Chair from
01/10/12)
Ms Susannah Lloyd (30/09/12)
Mr John Morgan
Dr Gill Samuels (from 01/03/12)
Sir Stephen Wall
Academic
Members:
Professor Malcolm Grant (Provost)
Dr Robert Barber
Professor Dame Hazel Genn (to
30/09/12)
Professor Alan Thompson (from
01/10/12)
Professor David Ingram (to
30/09/12)
Dr Andrea Townsend-Nicholson
Professor Jonathan Wolff
Professor Sue Hamilton (from
01/10/12)
Audit Committee
Lay Members:
Mr Rob Holden (to 30/09/12)
Mr John Hustler (to 30/09/12)
Lord Clement-Jones (from 01/10/12)
Mr Mark Knight (Chair)
Mr Nigel Smith
Mr Patrick Reeve (from 01/10/12)
Investments Committee
Lay Members:
Ms Anne Bulford (Chair to 30/09/12)
Mr Simon Melliss (Chair from
01/10/12)
Mr Ven Balakrishnan (to 30/09/12)

denotes also member of Remuneration Committee
* denotes also member of Nominations Committee
1
Ms Susannah Lloyd
Mr Nigel Thomas
Mr Mark Clarke
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
FINANCIAL SUMMARY
2012
£m
2011
£m
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Endowment income and interest receivable
Total income
Less: Share of income from joint ventures
NET INCOME
198.3
208.5
300.7
156.8
6.9
203.3
172.2
283.4
138.3
5.2
871.2
(2.5)
868.7
802.4
(0.8)
801.6
TOTAL EXPENDITURE
843.4
777.4
Share of operating loss in joint ventures and associates
Gain on acquisition
(Loss)/profit on disposal of tangible fixed assets
Loss on disposal of fixed asset investments
Minority interest
Transfer to accumulated income within specific endowments
(1.5)
4.8
(1.0)
(0.3)
(0.1)
(0.9)
(0.6)
5.8
(0.5)
SURPLUS FOR THE YEAR
26.4
28.9
Fixed assets
Endowment asset investments
Net current assets
Total assets less current liabilities
686.5
72.4
67.5
826.4
660.7
72.7
55.3
788.7
Non-current liabilities and provisions
Provision for liabilities and charges
Net pension liability
(75.4)
(0.6)
-
(77.3)
(4.7)
TOTAL NET ASSETS
Represented by:
750.4
706.7
Deferred grants
Endowments
Reserves
Minority interest
394.5
72.4
283.5
-
374.1
72.7
260.1
(0.2)
23.1
29.0
40.6
3.2
2012
No.
2011
No.
24,859
10,097
24,077
9,783
CONSOLIDATED INCOME & EXPENDITURE ACCOUNT
CONSOLIDATED BALANCE SHEET
OTHER KEY STATISTICS
Consolidated recognised gains
Increase in cash in the year
Student numbers*
Average payroll numbers
* excludes School of Pharmacy students
2
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
OPERATING AND FINANCIAL REVIEW
The financial statements of UCL are prepared in accordance with the “Statement of
Recommended Practice: Accounting for Further and Higher Education” and with reference to
the Financial Memorandum which regulates the formal relationship between the Higher
Education Funding Council for England (HEFCE) and UCL. HEFCE also acts on behalf of the
Charity Commission as the principal regulator of UCL as an exempt charity, in accordance
with the Charities Act 2006.
The financial statements include the consolidated results of UCL‟s subsidiary companies,
details of which are shown at Note 39. These accounts have been prepared on a going
concern basis as described in Note 1 of the Accounting Policies.
Strategy and long term objectives
The White Paper published in 2011 by the UCL Council sets out the vision and strategy for
UCL for the period through to the end of this decade. UCL is committed to the following aims:
maintaining the qualities of a comprehensive university, committed to excellence in
the arts, humanities, social sciences, physical, biological and medical sciences,
engineering and the built environment;
maintaining its openness as an institution, attracting wholly on merit the most talented
students from the United Kingdom and from around the world;
providing education of the highest academic quality, rigorous in its demands,
distinctive in its character, imbued with UCL's world-leading research and delivered
by academic staff at the top of their field;
enhancing its position as one of the world‟s leading research institutions with a
continued focus on single and multi-disciplinary research and a commitment to the
application of new knowledge to addressing major societal challenges;
becoming a global leader in enterprise and open innovation, supporting and
promoting effective knowledge exchange, innovation, entrepreneurship and
collaboration with commercial and social enterprises;
attracting, rewarding and retaining outstanding staff from diverse backgrounds;
securing long-term financial sustainability and sustaining the level of capital
investment necessary to achieve its academic objectives;
operating at the highest levels of efficiency, reducing overheads and eliminating
waste;
improving the quality, accessibility and sustainability of its estate and its use,
upgrading its built environment and making optimal use of space.
Financial results for the year ended 31 July 2012
UCL‟s summary consolidated Income and Expenditure results for the year ended 31 July
2012 are shown in the table overleaf.
The results for the year show a continuation of improved financial performance with the
university achieving a retained surplus of £26m or 3.0% of total income. This surplus was
slightly lower than in 2011, with income up 8.4% and expenditure up 8.5%. The operating
surplus (after depreciation but before tax) is a little higher than last year in absolute terms,
£25.3m compared to £24.1m, but lower as a percentage of total income at 2.9% compared to
3.0% last year. This is below the target declared in our current financial strategy of 3%, being
the level previously determined as necessary to support future investment and ensure our
reserves provide adequate contingency against future events.
The principal exceptional item is a gain of £4.8m being the value of net monetary assets
transferred to UCL on its combination with the School of Pharmacy from January 2012.
3
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
OPERATING AND FINANCIAL REVIEW
Summary Consolidated Income and Expenditure
Operating income
Deferred grants released
Total income
Operating expenditure
Depreciation
Total expenditure
Surplus after depreciation and before tax
Net share in joint ventures, associates, minority interests
and tax
Exceptional items
Surplus on continuing operations
Transfer to accumulated income within specific
endowments
Surplus retained within general reserves
2012
£m
839.6
29.1
868.7
(803.2)
(40.2)
(843.4)
25.3
2011
£m
775.8
25.7
801.5
(736.6)
(40.8)
(777.4)
24.1
(1.6)
(0.5)
3.6
27.3
5.9
29.5
(0.9)
(0.5)
26.4
29.0
Income from the Funding Council fell, as expected, by £5m in the year (2%) to £198m. The
most significant factor was the reduced level of capital funding that has been applied sectorwide. Teaching grant income was also marginally lower as the government continues to shift
teaching funding away from government grants and towards tuition fees. Qualitative research
(QR) grant income however rose by £3.5m in the year.
Academic fee income was up £36m (21%) to £208m, though approximately £14m of this
increase is accounted for by the change in funding agreement for research training support
where we now act as principal rather than agent. The remaining increase of 13% reflects
increases in the numbers of full-time overseas students, who now account for £107m of
income.
Income from research grants and contracts was up £17m (6%) over the previous year to
reach £301m. The contribution to overhead costs within this figure, however, remained static
at £46m reflecting a shift in balance in favour of charities and EU funding bodies that pay a far
lower contribution to overheads than Research Councils. Income from Research Councils
was depressed in 2011-12 as a result of £6m of efficiency savings following the Wakeham
Review.
Tuition fees from overseas full time students remain an important source of income. They now
contribute 39% to total teaching funding (HEFCE teaching grant, tuition fee income and
support grants) compared to 37% in the previous year.
Donations and sundry grants include income from operations overseas, for which 2011-12
saw the first full year of activity in Kazakhstan and Qatar. Income from donations in the year
increased by just under £5m.
Staff expenditure rose by 5% in the year to £473m and is at 54% of total income; the sector
average for the previous year was 53%. The number of staff increased by around 3%,
reflecting the growth in research activity and some expansion to support additional student
numbers. The national pay settlement for the sector was, once again, at below inflation.
Other operating expenses have increased by £43m (15%). This includes some elements of
expenditure that reflect the increase in research and teaching activity, such as academic
consumables, laboratory expenditure, books and periodicals. It also includes the effect of the
change in funding for research training support (see above) that has added £14m of
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UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
OPERATING AND FINANCIAL REVIEW
expenditure on student stipends. The analysis of expenditure by activity (see note 9)
confirms that the most significant increase in expenditure has been in academic departments,
accounting for £34m of the overall increase. Expenditure on central services and
administration has remained constant in cash terms reflecting the impact of savings targets
compared to the previous year and accounts for 9% of total expenditure.
Other operating expenses also include audit and other fees paid to UCL‟s auditors. The nonaudit fees, including an element that is capitalised, have risen from £0.5m to £1.1m. The
figures include costs (circa £0.2m) associated with the audit of the US GAAP compliant
version of our financial statements. The remainder of the non-audit fees reflect property
advice provided by Drivas Jonas Deloitte LLP which has increased in scale. Drivers Jonas
were UCL‟s property advisers prior to their acquisition by Deloitte and have continued in this
capacity. The University‟s management and the Audit Committee have reviewed this
situation and are satisfied that robust arrangements are in place to secure the auditor‟s
independence. This will continue to be carefully monitored.
Capital expenditure for the year was £54m, excluding the transfer of fixed assets from the
School of Pharmacy (£11m net book value). The major projects in the year were the
acquisition of a property in Gower Street, the development of student residences at
Caledonian Road and the Sainsbury Wellcome Centre.
Net assets increased in the year from £707m to £750m, with cash and short-term deposits up
19% at £211m. This represents 96 days‟ expenditure (excluding depreciation), compared to
88 at the previous year end. The value of UCL‟s endowment assets is unchanged at £72m.
Total I&E reserves excluding pensions reserves increased from £235 million to £255 million.
Financial outlook
The changing landscape of higher education in the UK poses both opportunities and
challenges for UCL. The increase in tuition fees for new home/EU undergraduates will
reinstate much of the reduction in HEFCE teaching grant but is creating an imperative for
investment in the estate, teaching infrastructure and other aspects of the student experience.
Government funding for research, particularly science research, currently enjoys some
protection from cuts but it is unclear whether this situation will persist as the economy remains
sluggish.
There are opportunities for increasing undergraduate student numbers as the recruitment
controls for applicants with good A level grades are removed. The student number control
threshold for 2012 entry is at AAB (or equivalent) and this will reduce to ABB from 2013,
though it remains unclear how policy will evolve beyond that. There has been a decline in the
total UK undergraduate intake in 2012, though UCL has experienced a modest increase.
Recruitment of overseas students has exceeded target, though the unintended consequences
of attempts to control immigration have introduced unwelcome uncertainty regarding future
demand.
Around 45% of UCL students are postgraduate. HEFCE have preserved some funding to
support both taught and research postgraduates, though their access to financial support is
extremely limited by comparison to undergraduates. The impact in future of higher levels of
indebtedness on the propensity of graduates to return for postgraduate study is unknown.
UCL has weathered the initial impact of cuts in government funding, however there is more to
come. Capital funding for universities has shrunk dramatically and it is now almost entirely
the responsibility of universities to obtain funding for capital investment. UCL has an
ambitious plan, as identified in the White Paper, to transform the University‟s estate with
future expenditure of around £100m per annum on an unprecedented scale. This includes
the continued implementation of the transformative Bloomsbury Masterplan, essential
upgrade and expansion works for a number of research institutes at UCL Partners‟ hospital
sites and the prospect of a new University campus in east London. This will require UCL to
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UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
OPERATING AND FINANCIAL REVIEW
continue to generate annual surpluses at or above the current level, as well as exploring
available sources of external funding.
Risk management
UCL has a mature process for identifying, reviewing and monitoring those risks that pose the
greatest threat to the achievement of its academic objectives. The strategic risk register is
reviewed by the full senior management team and each risk is assigned an owner. Controls
and actions are identified to mitigate the risk and an assessment is made of impact and
likelihood, both inherent and residual (post-control). The outcome of this assessment leads
to a grading which, when overlaid with UCL's appetite for risk, results in the categorisation of
risks between intolerable, severe and manageable.
Action is being taken in respect of all strategic risks but most urgently in respect of those with
the highest severity rating. Those include the risk of non-compliance with the terms of our
Access Agreement (regulated by the Office for Fair Access), a shortfall in the implementation
of UCL's transformative estates strategy and the failure to reform business processes for
admissions. Other risks identified include issues associated with staff diversity, estate
maintenance, international activities, the Research Excellence Framework (REF),
improvements in IT services, student expectations and achieving research growth.
Pensions
USS, SAUL and the NHS pension schemes are all multi-employer schemes and UCL‟s share
of their assets and liabilities is not disclosed on the balance sheet.
USS is a „last man standing‟ scheme which means that in the event that another member
institution becomes insolvent the other participating members will pick up any funding
shortfall. The last actuarial valuation of USS, carried out in April 2011, revealed a deficit on
the technical provisions basis of £2.9 billion, equivalent to a 92% funding level. The interim
valuation effective April 2012 indicated that the deficit had widened to £9.8bn or 77% funding
level, with assets of £33.9bn. The principal reason for this deterioration is the historically low
level of gilts interest rates which affects the rate at which future scheme liabilities are
discounted. Reforms to the scheme were introduced in 2011 which, amongst other things,
introduced a career revalued benefits structure for new entrants. This will take some time to
impact upon the funding position and a 10 year recovery plan is currently being agreed with
the Pensions Regulator which will require the employers in the scheme to maintain the
current 16% contribution level for at least 6 years. The recovery plan also relies upon an
assumption of asset out-performance. The next formal valuation of the scheme will be in 2014
and there is a risk that contribution rates for employers and employees will increase
thereafter.
The SAUL pension scheme introduced, following consultation, a career average section for
new entrants with effect from July 2012. The scheme was last revalued in 2011 and
revealed a deficit of £75m, equivalent to a funding level of 95% on a technical provisions
basis. A recovery plan has been formulated.
With effect from 30 June 2012 all assets and liabilities of the Royal Free Hospital School of
Medicine Pension and Assurance Scheme were transferred to SAUL, together with a
payment of £4.6m from UCL. SAUL has responsibility for meeting all future pension liabilities
of members in this scheme. The benefits of all active members of the UCL (Former Medical
Schools) Pension Scheme were also transferred to SAUL with effect from the same date,
leaving only deferred and pensioner liabilities in the Scheme, no payment was made for this
transfer. The net liability for the two schemes was £4.7m which has now been reduced to
£nil. Settlement gains of £6.6m were realised, leaving a net credit to the income and
expenditure statement of £1.9m less professional fees incurred.
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UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
OPERATING AND FINANCIAL REVIEW
Public Benefit
In identifying its aims, UCL‟s trustees have taken due consideration of the guidance relating to
public benefit published by the Charity Commission. UCL‟s objects, as outlined in its Royal
Charter, are “… to provide education and courses of study in the fields of Arts, Laws, Pure
Sciences, Medicine and Medical Sciences, Social Sciences and Applied Sciences and in such
other fields of learning as may from time to time be decided upon by the college and to
encourage research in the said branches of knowledge and learning and to organise,
encourage and stimulate postgraduate study in such branches.”
In addition to its objects, UCL's global vision is informed by four clear principles of intent that
form the basis of all it does:
To enhance UCL's educational and research environment by promoting the global
context in which UCL operates;
To contribute throughout the range of UCL activity (research, teaching, learning,
business links, and community engagement) to the resolution of problems of global
significance;
To contribute to UCL's financial stability by maximising income generation from all
aspects of global activity where the potential to do so exists;
To engage with public bodies, including UK Government, in matters of support for
British higher education in a global market.
UCL has a much broader charitable purpose than just advancing education and a wide range
of activities undertaken at UCL in the past year support this broader public benefit.
The advancement of education
UCL was founded in 1826 to provide education to all who could benefit by it. UCL was the first
university to admit students regardless of their race, class or religion and the first to admit
women students on equal terms with men. That radical tradition remains alive today. UCL
continues to provide education to over 24,000 students at both undergraduate and
postgraduate levels, including students from countries around the globe.
UCL undertakes a range of outreach activities in support of its widening participation strategy.
UCL's widening participation strategy aims to raise awareness of higher education, to assist
in the preparation for higher education by addressing the academic, social and cultural issues
underlying historic levels of low participation, to enhance the diversity of UCL's student body
by recruiting the brightest students regardless of their background and to improve the
retention of students at UCL. UCL's Transitions Programme provides generic and bespoke
academic and non-academic support to students before and after they enrol with the aim of
encouraging progression and enhancing retention. In line with our Access Agreement UCL
continues to set aside £5m to provide enhanced bursaries for students from low income
families and to support outreach activities.
UCL's outreach activities include organised events and activities at UCL for school and
college staff and students (including an admissions conference and seminars for staff and
organised visits, master classes, taster courses, a Saturday school and summer schools for
students) and outreach work by UCL staff and students in schools and colleges. UCL staff
visit schools to make presentations on higher education and the university applications
procedure, and UCL student ambassadors visit schools and colleges to advise, mentor or
tutor their students. UCL outreach activities also make the best possible use of community
links and working with our museums and collections, provide an interactive teaching
programme for schools and colleges.
The advancement of the arts, culture, heritage and science
As well as providing education in these areas, for example through the UCL Centre for
Museums, Heritage and Material Cultural Studies, UCL's outstanding collections cover a wide
variety of disciplines, reflecting the range of the university's academic work. Three collections
- the Petrie Museum, the Grant Museum and UCL Art Museum – are open to the public.
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UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
OPERATING AND FINANCIAL REVIEW
Other collections are primarily for teaching and research but can be seen and studied by
appointment.
Improving public policy
UCL is committed to ensuring that the insights generated from our research are widely
disseminated and communicated to policymakers; supporting engagement between
policymakers and researchers; and contributing to evidence-informed policymaking. The
institution-wide UCL Public Policy Strategy draws on the full breadth of our disciplines to
ensure a multifaceted approach to the development of solutions to aspects of complex realworld policy challenges, of both immediate and long-term concern. UCL Public Policy builds
on existing connections between academics and policymakers, enabling external agencies to
identify sources of relevant wisdom and UCL to anticipate better and respond swiftly to
emerging policy issues.
Among UCL Public Policy highlights this year were:
Engagement with Government – a programme of strategic engagement with Government
departments, parliament, Chief Scientific Advisors and others to communicate UCL research
and insights in ways that can inform the development of policy. Engagement has included
one-to-one interaction with academics, roundtable briefing sessions on specific policy issues,
and involving civil servants in UCL Public Policy activities. The newly established UCL Policy
Future Group is a network of senior UCL academics bringing together expertise from political
science, engineering, medical and health research, the built environment, climate science,
energy and environmental research, law, global health, geography and economics. It draws
on the entire breadth of UCL expertise, aiming to generate a cross-cutting UCL contribution to
the consideration of public policy issues.
Policy secondments – a scheme for UCL researchers to undertake short-term secondments,
usually on a part-time basis, in Government departments and other policy organisations.
These secondments, supported by funding from HEIF and the EPSRC, provide valuable
opportunities for researchers to gain direct experience of a policy environment and of the
policy development process, as well as a chance to use their research skills and expertise in
a new context and in ways relevant to public policy.
Policy briefings – a way of showcasing and demonstrating the insights from UCL research,
and their implications for public policy, to policy and lay audiences. The briefings have been
drawn from core research activity at UCL, as well as specific strategic and cross-disciplinary
initiatives.
UCL Grand Challenges – working closely with the UCL Grand Challenges of Global Health,
Sustainable Cities, Intercultural Interaction and Human Wellbeing to bring cross-disciplinary
insights and expertise to bear on aspects of the world‟s major problems. UCL Public Policy
ensures that opportunities for policy engagement arising from activity are supported and that
the outcomes are also effectively translated into policy outputs.
Public events – providing a forum for dialogue and debate around key public policy issues
and the implications of academic research and evidence.
Student Volunteering
UCL has a well-established culture of student volunteering. Annually, around 1,400 students
participate in activities through the Volunteering Services Unit (VSU), such as organising
football tournaments for homeless people, getting involved with campaigning organisations,
teaching computer skills to local elderly people, or coordinating fundraising events for
disability charities. The VSU also runs the Innovations Programme which supports students to
develop their own proposals for new community programmes. The VSU also promotes oneoff volunteering, involving students in fundraising activities, community festivals, conservation
projects and other events across London.
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UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
OPERATING AND FINANCIAL REVIEW
The advancement of health and the saving of lives
UCL Medical School is one of the largest in the country with a yearly intake of 330
undergraduate students on the MBBS programme. Our biomedical research interests range
across pure and translational areas and from age and wellbeing, through cancer,
cardiovascular and neuroscience to experimental and systems medicine. The UCL Medical
School is committed to excellence in education and has a strong reputation for teaching
informed by cutting-edge research. The School has a distinguished cadre of academic staff
who are at the forefront of international research in medical sciences and clinical medicine.
Translational research is supported by close partnerships with NHS trusts. UCL Partners is an
academic health sciences centre, drawing UCL together with four major hospital partners in a
joint mission to enhance medical research and teaching, clinical care and population health.
This has led to significant benefits for the population.
Environmental sustainability
UCL‟s environmental performance can be evaluated against several metrics. In considering
UCL‟s performance it is important to consider that the last year saw student numbers grow
and in addition the School of Pharmacy merged with UCL in January 2012. As the institution
has grown, the scale of UCL‟s environmental impacts has also risen.
th
th
UCL‟s 2011-12 Green League position was 89 of 145 participating universities and 10 in
rd
the sub-group of 20 Russell group universities. Its position was down from 83 out of 138 and
th
9 out of 19 in the Russell group in 2010-11. Despite this, UCL gained a score of 32.5 points 4 points higher than the score in 2011.
The 2005-06 baseline scope 1 and scope 2 carbon emissions were 62,912 tonnes of CO2
equivalent. In 2011-12 emissions had increased by 10% to 69,393 tonnes of CO2.
In the 2010-11 academic year, UCL produced approximately 3,904 tonnes of waste,
excluding waste generated from the hospital sites, residences, construction and contractor
activities and of this 61% was recycled. Waste generated has increased from 2,342 tonnes in
2006-07; however, the proportion of waste recycled has doubled from 30% in 2006-07.
UCL‟s aims for 2012-13 are to:
improve UCL‟s Green League position by continued improvements to our processes
and systems
launch UCL‟s Environmental Sustainability Strategy at the start of the academic year
undertake further carbon saving projects
implement a programme of meter improvements
undertake full carbon footprint analysis
produce and implement sustainable building guidance document for all UCL capital
projects.
Research
Research strategy
The 2011 UCL Research Strategy, Delivering a Culture of Wisdom, called for a transformation
of the understanding of the role of our comprehensive research-intensive university in the
21st century. In addition to highlighting the need to nurture and celebrate individual problemand curiosity-driven research, the strategy set out for UCL an innovative cross-disciplinary
research agenda – designed to deliver immediate, medium and long-term benefits to
humanity – that is simultaneously extraordinary and in complete alignment with our
fundamental values.
9
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ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
OPERATING AND FINANCIAL REVIEW
UCL will seize the opportunity – and fulfil its obligation – to marshal the breadth of its expert
perspectives, in order to address issues in their full complexity and contribute to the resolution
of the world‟s major problems. This will be achieved not just through the generation of
knowledge, but also through the delivery of a culture of wisdom: an environment committed to
the judicious application of knowledge for the good of humanity.
Delivering a culture of wisdom, therefore, means drawing on the full range of our expertise. It
requires a spirit of collaboration and recognition that the contribution of which each of us is
capable can be vastly greater when made in concert.
The success of this research strategy over the next five years will depend on our ability to:
continue to foster leadership grounded in excellence in discipline-based research – where
an individual‟s leadership is demonstrated through, for example: sustained leadership in
one‟s discipline and the development of novel lines of enquiry; contribution to the
intellectual life of one‟s discipline; cultivation of collegiality in one‟s department, faculty and
university; support for and nurturing of early career researchers and students; and
openness to the benefits of cross-disciplinary collaboration
expand the distinctive cross-disciplinarity of our research, collaboration and partnerships –
where cross-disciplinarity occurs between experts in different disciplines, transcending
subject boundaries (in contrast to interdisciplinary generalism)
increase the impact of our global university‟s research, locally, regionally, nationally and
internationally – where impact is the beneficial application of expertise, knowledge,
analysis, discovery or insight, primarily delivered through scholarly outputs, education,
public engagement, translational research, commercial and social enterprise activity, and
influence on public policy and professional practice.
As UCL achieves these aims and delivers a culture of wisdom, we will fulfil our potential as
London‟s Global University: engaged across the spectrum of research subjects, from arts and
humanities to the basic and applied sciences and medicine; open to talent from around the
world; and, furthermore, engaged with the needs of an interconnected world.
Research highlights
The overall picture for UCL research remains pleasingly positive. Income continues to grow
despite a generally restricted environment, achieving £300.7m for 2011-12 (up from £283.4m
and £275.1m in the previous two years). In particular, our research award rate from charitable
sources is showing strong growth. UCL academics attracted more than 1,400 grant awards in
the last year, alongside numerous prestigious prizes and awards.
Essential Scientific Indicators ranked UCL the 18th most highly cited university in the world
over an eight-year period and 16th by citation volume. Our citation performance improvement
is in line with peer institutions.
UCL's cross-disciplinary capability was further enhanced by the foundation of thematic
centres and networks, each bringing together a variety of subject-specific expertise in order to
address major problems with more sophistication. These included the UCL Institute for
Sustainable Resources, the UCL Centre for Biodiversity & Environmental Research and the
UCL Science, Medicine & Society Network. The scope for cross-disciplinary collaboration was
also expanded with the School of Pharmacy now being within UCL.
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ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
OPERATING AND FINANCIAL REVIEW
Overarching the university's cross-disciplinary collaboration are the UCL Grand Challenges –
Global Health, Sustainable Cities, Intercultural Interaction and Human Wellbeing – through
which concentrations of specialist expertise are brought together to address aspects of the
world's key problems. Flagship initiatives included:
Global Health – Law & Global Health, the 2012 UCL Current Legal Issues crossdisciplinary international colloquium.
Sustainable Cities – publication of Shaping Cities for Health: The complexity of planning
urban environments in the 21st century, the report of the UCL–Lancet Commission on
Healthy Cities, to be followed by sector-specific briefings and workshops for policymakers
and practitioners
Intercultural Interaction – Negotiating Religion: Inquiries into the history and present of
religious accommodation, a series of four workshops discussing the complex processes
through which religious communities create or defend their place in a given
commonwealth, both in history and in our world today
Human Wellbeing – UCL Wellbeing Week, challenging researchers to think about
wellbeing questions, some of them controversial, in a new light and to develop innovative
research projects.
The most mature of the UCL Research Frontiers activities, Origins of Life, has shown
excellent progress. An international symposium was held with high-calibre attendance. Dr
Nick Lane, the first Provost‟s Venture Research Fellow, has continued his impressive
achievements, with eight primary publications, including in Science and Nature, during his
fellowship. He was awarded a Leverhulme Trust Project Grant worth around £0.3m to
continue his work on an origin-of-life reactor. Two other UCL Research Frontiers activities,
Dynamics of Civilisation and Human Evolution, are in development.
Highlights from international research developments include: $1.8m funding from the Qatar
National Research Fund secured by UCL Qatar; £0.5m for an EPSRC Global Engagements
proposal Global Engagement for Global Impact: Strategic Interaction with China, India,
Germany and USA; and UCL hosting Research Collaboration in the European Union: A UCL–
Max Planck Society Conference.
Our numbers for new postgraduate research entrants show a strong growth, unmatched by
our peers, with 55% increase between 2007-08 and 2010-11 as a result of success in winning
doctoral funding from various sources including the Impact and Grand Challenges schemes.
Data on PhDs awarded shows a general increase, and our rising intake suggests that if
completion rates remain solid, we may well be graduating more PhDs than any other UK
university by 2014-15, an especially noteworthy possibility given our emphasis on four-year
programmes.
Research Excellence Framework
The Research Excellence Framework (REF) 2014 will strongly influence both QR income for
the next five years and UCL‟s reputation for research excellence. In particular, 'impact' is a
much more significant component in REF than previous research assessment exercises,
accounting for 20% of the total score. Detailed timetables and action plans have been
developed and a REF 2014 team appointed.
Education
Education strategy
UCL's strategic goal of placing all its educational offerings within a framework of Education for
Global Citizenship continues to be developed with all academic departments developing an
international dimension to their curricula and ensuring that all students explore their subject
from an international perspective.
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ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
OPERATING AND FINANCIAL REVIEW
UCL set itself the strategic goal of establishing itself as an international centre of excellence
for teaching, learning and assessment. Work has begun on establishing this hub through
creating partnerships with existing strategic partners, building on short exchanges arranged
between UCL and international partners.
The UCL Academy accepted its first intake of students in September 2012 and will move into
its new premises in Camden in January 2013. It will offer an innovative curriculum with
embedded links to UCL at subject and institutional level. It will grow annually and reach full
capacity in September 2015.
Students
Excluding the numbers joining UCL from the School of Pharmacy part way through the
financial year, there was modest growth in student numbers for 2011-12 with a headcount of
24,859 students, an increase of 782 or 3.2% on 2010-11. The total is divided between
undergraduates and postgraduates in the ratio 55:45 compared with 60:40 four years ago.
International students account for 28% of the total student population and a similar pattern
exists at undergraduate and postgraduate level.
For the second year running there was a large increase in research postgraduate student
numbers which again reflects UCL‟s success in winning Doctoral Training Centre awards and
also the continuation of UCL‟s IMPACT studentship scheme, which provides matched funding
to create full 3 or 4 year awards. For 2011-12, UCL‟s research postgraduate student numbers
rose by 300 over 2010-11, an increase of 7.8%. There was also a further expansion in
postgraduate taught student numbers, particularly in international students where there was
an increase of 181 students or 8.9% over 2010-11.
With respect to full-time undergraduate students, UCL was once more able to manage
successfully its recruitment of new UK/EU students to come within the limit set by the
Government and thereby avoid financial penalties, although numbers again exceeded our
internal target by 133 or 1.4%. Actual recruitment of international undergraduate students
(both full and part-time) increased by a further 12% or 407 students to take the total number
of international undergraduates to 3,900 in 2011-12, an increase of 66% over the last five
years.
The inclusion of students joining UCL from the School of Pharmacy increases the UCL
student headcount by 1,359 and takes UCL‟s total for 2011-12 to 26,218 students.
Enterprise
This year has been the first year of implementation of UCL‟s Enterprise strategy
“Transforming Enterprise at UCL 2011-2015”, which was published and adopted in July 2011.
Good progress has been made towards each of the key objectives.
Create a highly effective structure of support for enterprise at UCL
Restructuring and relocation has allowed the creation of a central Enterprise Operations
team, which is responsible for promoting collaborative and sponsored research with industry
and commerce. This is working alongside our existing Enterprise units: UCL Advances, our
centre for entrepreneurship, UCL Business PLC, our technology transfer company, and UCL
Consultants Ltd. Seven Vice-Deans (Enterprise) have now been appointed and a network of
Knowledge Transfer and Enterprise Champions established.
Become the leading UK University supporting university entrepreneurs
This year, UCL Advances have extended their highly popular incubator space, (the Hatchery),
a second dedicated student business advisor has been appointed, and a record ten Bright
Ideas Awards – loans to get student businesses up and running – were provided. This focus
on entrepreneurship is bearing fruit, as UCL has the highest percentage of self-employed
graduates among the UK's top ten universities.
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UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
CORPORATE GOVERNANCE
UCL is committed to exhibiting best practice in all aspects of corporate governance and
endeavours to conduct its business in accordance with the seven principles identified by the
Committee on Standards in Public Life (selflessness, integrity, objectivity, accountability,
openness, honesty and leadership).
This summary describes the manner in which UCL has applied the principles set out in the
UK Corporate Governance Code (formerly the Combined Code on Corporate Governance)
issued by the London Stock Exchange in June 1998 and revised in June 2010 in so far as
they relate to Higher Education Institutions. Its purpose is to help the reader of the accounts
understand how the principles have been applied. UCL keeps under careful review its
organisation and arrangements to ensure that the best principles of Governance and
Management are maintained in a manner appropriate to the nature and character of the
institution. In so doing, it takes into careful account such guidance as set out for example in
the UK Corporate Governance Code, the Reports of the Committee on Standards in Public
Life and the CUC Governance Code of Practice.
UCL„s Governing Body, the Council, is guided by but not limited by the Committee of
University Chairs‟ governance code of practice and general principles within the CUC Guide
for Higher Education Governing Bodies in the UK issued in 2009. UCL‟s practices are
consistent with the provisions of the code, except that the reports of governance effectiveness
reviews are not at present published widely, but are distributed internally.
The Council is responsible for the system of internal control operating within UCL and its
subsidiary undertakings (“the Group”) and for reviewing its effectiveness. Such a system can
only provide reasonable, and not absolute, assurance against material misstatement or loss,
and cannot eliminate business risk. The Council identifies areas for improvement in the
system of internal control, based on reports and views from the Audit Committee, Academic
Board and other committees.
At its November 2012 meeting, the Council will carry out an annual assessment for the year
ended 31 July 2012 by considering a report from the Audit Committee, and taking account of
events since 31 July 2012. The Council is of the view that there is an ongoing process for
identifying, evaluating and managing the Group‟s key risks and internal controls, and that it
has been in place for the whole of the year ended 31 July 2012, and up to the date of
approval of the annual report and accounts, that the process has been subject to regular
review, and that it accords with the internal control guidance for directors in the UK Corporate
Governance Code, as deemed appropriate for higher education.
In accordance with the Statutes of UCL, the Council comprises lay members, the President
and Provost (Provost hereafter), academic staff members and student members (in numbers
specified by Statute). The Statutes provide for the distinct roles of Chair and Vice-Chair of the
Council, the Treasurer, and of UCL's Chief Executive, the Provost. The powers and duties of
the Council are set out in Statutes; by custom and under the Financial Memorandum with the
Higher Education Funding Council for England, the Council holds to itself the responsibilities
for the ongoing strategic direction of UCL, approval of major developments and the receipt of
regular reports from UCL officers on the day to day operations of its business and its
subsidiary companies. The Council has formally identified those items of business which it
retains to itself for collective decision. The Council meets at least three times each year; it
has several committees, including an Academic Board, Finance Committee, Audit Committee,
Remuneration Committee and Nominations Committee. All of these Committees are formally
constituted with Terms of Reference.
In accordance with the Regulations for Management of UCL, the Finance Committee
comprises lay members, the Provost and academic staff members (in numbers specified by
regulation). The Committee meets at least four times annually, and is chaired by the
Treasurer. Inter alia it recommends to the Council UCL's annual revenue and capital budgets
and monitors performance in relation to the approved budgets and reviews UCL's annual
financial statements. It also reviews UCL's accounting policies which are applied in the
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ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
CORPORATE GOVERNANCE
preparation of those financial statements. The Committee also receives and considers reports
from the Higher Education Funding Council for England as they affect UCL's business and
monitors adherence with the regulatory requirements.
The Investments Committee, which reports to Finance Committee, is chaired by the Treasurer
and comprises four other lay members with investment expertise appointed by Council. It
governs, manages and regulates the investments of UCL.
The Audit Committee, which meets at least three times annually, is chaired by a lay member
of Council and comprises lay members only. The Committee considers reports from the
Internal Auditors arising from their audits, which highlight significant issues and
management‟s response thereon and reviews the conclusions of this work. The Audit
Committee also approves the annual programme of UCL‟s external provider of Internal Audit
Services. Plans are drawn up based on assessment of the relative risks, the significance of
each operating area and their materiality in the context of overall UCL activity. In complying
with Code provision C.2.1 (to conduct, at least annually, a review of the Group‟s system of
internal controls), the Audit Committee conducts a high level review of the arrangements for
internal control and data quality, with regular consideration of risk and control, based on
reports received from the Vice Provost (Operations), chair of the Risk Management Working
Group, with emphasis given to obtaining the relevant degree of assurance and not merely
reporting by exception. It reports to the Council the results of this review. The Committee is
responsible for meeting with the External Auditor to consider the nature and scope of the
annual audit and, thereafter discuss audit findings, the management letter and internal control
report arising out of the audit of the annual financial statements. Whilst UCL officers attend
the meetings of the Audit Committee as necessary, they are not members of the Committee,
and the Committee meets from time to time with the Internal and External Auditors on their
own for independent discussions.
The Risk Management Working Group is chaired by the Vice Provost (Operations) and takes
overall responsibility for ensuring that the significant risks to UCL‟s corporate objectives are
regularly reviewed, assessed, monitored and reported upon appropriately within UCL. It
actively monitors and reports to the Provost‟s Senior Management Team (SMT) on progress,
with agreed actions, on all the identified risks, other than those directly monitored by the
Provost‟s SMT. It is also responsible for developing and providing documentation and
guidance on the risk assessment process and regularly revises and updates the risk
assessment criteria.
The Academic Committee, which reports to the Council via the Academic Board, is
responsible for, inter alia, monitoring the effectiveness of the academic quality assurance
strategy, encompassing policies and procedures in respect of quality management and quality
enhancement.
The Nominations Committee considers the filling of vacancies in the lay membership of
Council and of other UCL Committees (except the Nominations Committee, for which Council
itself considers vacancies in the lay membership).
The Remuneration Committee is chaired by the Chair of Council and comprises three other
members of Council and the Provost. It determines the annual remuneration of senior officers
of UCL and where necessary decides on any severance payments. The Provost is excluded
from discussions relating to his own remuneration package. The Remuneration Committee
also receives a report of the annual review of all professorial salaries and administrative
equivalents not otherwise considered by it. The remuneration of these staff is determined by
the Provost in consultation with relevant Vice-Provosts and Deans and the Director of Human
Resources. Salary levels are set to attract and retain members of staff for the successful
operation of UCL, both academically and administratively, and incorporate rewards for
individual performance. No remuneration is paid to lay members of the Council or any of its
Committees.
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ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
RESPONSIBILITIES OF THE COUNCIL OF UNIVERSITY COLLEGE LONDON
In accordance with UCL's Charter and Statutes, the Council is responsible for the
administration and management of the affairs of UCL, including ensuring an effective system
of internal control, and is required to present audited financial statements for each financial
year.
The Council is responsible for the keeping of proper accounting records which disclose with
reasonable accuracy at any time the financial position of UCL and for ensuring that the
financial statements are prepared in accordance with UCL's Charter and Statutes, the
Statement of Recommended Practice: Accounting for Further and Higher Education and other
relevant accounting standards. In addition, within the terms and conditions of the Financial
Memorandum agreed between the Higher Education Funding Council for England and the
Council of UCL, the Council, through the Provost, its designated office holder, is required to
prepare financial statements for each financial year which give a true and fair view of the state
of affairs of UCL and of the surplus or deficit and cash flows for that year.
In causing the financial statements to be prepared, the Council has ensured that:
(i) suitable accounting policies are selected and applied consistently;
(ii) judgments and estimates are made that are reasonable and prudent;
(iii) applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements;
(iv) financial statements are prepared on the going concern basis. The Council is
satisfied that it has adequate resources to continue in operation for the foreseeable
future and for this reason the going concern basis continues to be adopted in the
preparation of the financial statements.
The Council has taken reasonable steps to:
(i) ensure that funds from the Higher Education Funding Council for England are used
only for the purposes for which they have been given and in accordance with the
Financial Memorandum with the Funding Council and any other conditions which the
Funding Council may from time to time prescribe;
(ii) ensure that there are appropriate financial and management controls in place to
safeguard public funds and funds from other sources;
(iii) safeguard the assets of UCL and prevent and detect fraud;
(iv) secure the economical, efficient and effective management of UCL's resources and
expenditure.
The key elements of UCL‟s system of internal control, which is designed to discharge the
responsibilities set out above, include the following:
(i) clear definitions of the responsibilities of, and authority delegated to, heads of
academic and administrative departments;
(ii) comprehensive Financial Regulations, detailing financial controls and procedures,
approved by the Council;
(iii) a professional Internal Audit Service whose annual programme of work is approved
by Audit Committee, endorsed by the Council and whose head provides the Provost,
Audit Committee and Council with a report on internal audit activity within UCL and an
opinion on the adequacy and effectiveness of UCL‟s system of internal control,
including internal financial control;
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ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
RESPONSIBILITIES OF THE COUNCIL OF UNIVERSITY COLLEGE LONDON
(iv) regular reviews of financial performance and key business risks, and termly reviews
of financial forecasts including variance reporting and updating;
(v) a comprehensive planning process for the short to medium term supported by
detailed income, expenditure, capital and cash flow budgets and forecasts, including
review and refresh of strategic objectives, the key risks affecting their achievement
and key performance indicators of progress.
(vi) embedded risk management policies and procedures incorporating identification,
monitoring and review of internal controls moderating and mitigating key risks,
covering all categories of risk at all levels of the organisation.
(vii) clearly defined procedures for the approval and control of expenditure, with
investment decisions involving capital or recurrent expenditure being subject to formal
detailed review according to levels set by the Council.
Any system of internal control can only provide reasonable, and not absolute, assurance
against material misstatement or loss.
The Council is responsible for the maintenance and integrity of the corporate and financial
information included on the company's website. Legislation in the United Kingdom governing
the preparation and dissemination of financial information differs from legislation in other
jurisdictions.
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UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE COUNCIL OF
UNIVERSITY COLLEGE LONDON
We have audited the financial statements of University College London for the year ended 31
July 2012 which comprise the Statement of Principal Accounting Policies, the Consolidated
Income and Expenditure Account, the Statement of Total Recognised Gains and Losses, the
Consolidated and Entity Balance Sheets, the Consolidated Cash Flow Statement and the
related notes 1 to 40. The financial reporting framework that has been applied in their
preparation is applicable law and United Kingdom Accounting Standards (United Kingdom
Generally Accepted Accounting Practice) and the Statement of Recommended Practice:
Accounting for Further and Higher Education.
This report is made solely to the Council of UCL in accordance with financial memorandum
effective August 2010. Our audit work has been undertaken so that we might state to the
governing body those matters we are required to state to it in an auditor‟s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the board of governors as a body, for our audit work, for
this report, or for the opinions we have formed.
Respective responsibilities of the governing body and auditor
As explained more fully in the Governing Body‟s Responsibilities Statement, the governing
body is responsible for the preparation of the financial statements that give a true and fair
view. Our responsibility is to audit and express an opinion on the financial statements in
accordance with applicable law and International Standards on Auditing (UK and Ireland).
Those standards require us to comply with the Auditing Practices Board‟s Ethical Standards
for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial
statements sufficient to give reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This includes an assessment of:
whether the accounting policies are appropriate to the University‟s circumstances and have
been consistently applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the governing body; and the overall presentation of the
financial statements. In addition, we read all the financial and non-financial information in the
annual report to identify material inconsistencies with the audited financial statements. If we
become aware of any apparent material misstatements or inconsistencies we consider the
implications for our report.
Opinion on financial statements
In our opinion the financial statements:
st
give a true and fair view of the state of the University‟s and Group‟s affairs as at 31
July 2012 and of its surplus for the year then ended; and
have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice and the Statement of Recommended Practice: Accounting for
Further and Higher Education.
Opinion on other matters prescribed by the Higher Education Funding Council for
England Audit Code of Practice
In our opinion:
in all material respects, income from the Higher Education Funding Council for
England, grants and income for specific purposes and from other restricted funds
administered by the University during the year ended 31 July 2012 have been
applied for the purposes for which they were received; and
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ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
1. Basis of Preparation
The financial statements are prepared under the historical cost convention as modified by the
revaluation of investments and in accordance with both the Statement of Recommended
Practice: Accounting for Further and Higher Education (SORP) 2007 and applicable United
Kingdom Generally Accepted Accounting Practice.
UCL‟s business activities, together with the factors likely to affect its future development,
performance and position are set out in the Operating and Financial Review on pages 3 to 13.
The financial position of UCL, its cash flows, liquidity position and borrowing facilities are also
described here. UCL has considerable financial resources, along with funding from HEFCE,
for research grants and other teaching contracts across different geographic areas and
industries. As a consequence, Council believes that UCL is well placed to manage its risks
successfully despite the current uncertain economic outlook. The members of Council have a
reasonable expectation that UCL has adequate resources to continue in operational existence
for the foreseeable future. Thus they continue to adopt the going concern basis of accounting
in preparing the annual financial statements.
2. Basis of Consolidation
The consolidated financial statements consolidate the financial statements of UCL and its
subsidiary undertakings (collectively referred to as “the Group”) for the financial year to 31
July. The results of subsidiaries acquired or disposed of during the period are included in the
consolidated income and expenditure account from the date of acquisition or up to the date of
disposal. Intra-group transactions are eliminated on consolidation.
The UCL Union has not been consolidated since it is a separate enterprise over which UCL
has limited influence both in areas of financial control and policy decisions.
The institution‟s share of income and expenditure in joint venture entities is recognised in the
institution‟s income and expenditure account in accordance with FRS 9. Similarly the
institution‟s share of assets and liabilities in associate entities is recognised in the institution‟s
balance sheet in accordance with FRS 9. The gross equity method is used when
consolidating joint venture entities and associate entities are consolidated using the equity
method entities in accordance with FRS 9.
3. Income and Expenditure Account
The income and expenditure account has been drawn up in line with the SORP and with
classifications based on the requirements of the annual financial return made to the Higher
Education Statistics Agency.
Funding Council block grants are accounted for in the period to which they relate.
Funding Council grants to fund special initiatives are credited to the income and expenditure
account in line with the delivery of each initiative. Any payments received in advance of
service delivery are recognised in the balance sheet as liabilities.
Tuition fee income is stated gross and credited to the income and expenditure account over
the period in which students are studying. Bursaries and scholarships are accounted for gross
as expenditure and not deducted from income.
Income received from research grants and contracts is included to the extent only of
expenditure incurred during the year, together with any related overhead contributions
towards costs.
Other income and income in respect of other services rendered are accounted for on an
accruals basis and credited to the income and expenditure account to the extent of the
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ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
completion of the contract or service concerned. Any payments received in advance of
service delivery are recognised in the balance sheet as liabilities.
Income from the sale of goods or services is credited to the income and expenditure account
when the goods or services are supplied to the external customer or the terms of the contract
have been satisfied.
Income from general donations to support revenue expenditure is credited to the income and
expenditure account in full in the year in which it is receivable.
Income is deferred only when the Group has to fulfil conditions before becoming entitled to it
or where it has been specified by the donor that the money must be used in a future period.
Income received from endowments is credited to the income and expenditure account in the
period in which it is earned. Income from restricted endowments not expended in the year is
transferred from the income and expenditure account to an endowment reserve fund.
Realised gains or losses arising from dealing in assets underlying endowment funds are
retained within the endowment in the balance sheet.
Increases or decreases in value arising on the revaluation or disposal of endowment assets is
added to or subtracted from the funds concerned and accounted for through the balance
sheet by debiting or crediting the endowment asset, crediting or debiting the endowment fund
and is reported in the statement of total recognised gains and losses.
Any increase in value arising on the revaluation of fixed asset investments is carried as a
credit to the revaluation reserve, via the statement of total recognised gains and losses; an
impairment in value is charged to the income and expenditure account as a debit, to the
extent that it is not covered by a previous revaluation surplus.
Expenditure incurred relates to the receipt of goods and services. A provision for bad debts is
included on the basis that as debts become older a higher percentage becomes
irrecoverable.
Where the Group disburses funds it has received as paying agent on behalf of the Funding
Council or other body, and has no beneficial interest in the funds, the receipt and subsequent
disbursement of the funds have been excluded from the income and expenditure account.
4. Pension Arrangements
The Group contributes to three principal pension schemes on behalf of its employees: the
Universities Superannuation Scheme (USS), the Superannuation Arrangements of the
University of London (SAUL) and the National Health Service Pension Scheme.
Contributions were also made to two smaller schemes, the UCL (Former Medical Schools)
Pension Scheme (UFMS) and the Royal Free Hospital School of Medicine Pension and
Assurance Scheme (RFHSM). With effect from 30 June 2012, all active members of the
UFMS consented to a transfer of their benefits to SAUL. Deferred and pensioner liabilities
have remained with UFMS. On 30 June 2012, all assets and liabilities of RFHSM were
transferred to SAUL, and SAUL has responsibility for meeting all future pension liabilities of
members. All are defined benefit schemes.
The USS, SAUL and the NHS Pension Scheme are multi-employer schemes and it is not
possible to identify UCL‟s share of the underlying assets and liabilities. Therefore, as required
by Financial Reporting Standard (FRS) 17, the contributions are charged directly to the
income and expenditure account as if the schemes were defined contribution schemes.
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ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
USS is a “last man standing” scheme which means that in the event that another member
institution becomes insolvent the other participating members will pick up any funding
shortfall. Further details about USS, information about the latest informal valuations of the
scheme and proposed rule changes can be found at www.uss.co.uk.
The UFMS and RFHSM are single employer defined benefit schemes accounted for in
accordance with FRS 17. The amounts charged to the income and expenditure account are
the current service costs and gains and losses on settlements and curtailments. They are
included as part of staff costs. Past service costs are recognised immediately in the income
and expenditure account if the benefits have vested in the scheme membership. If the
benefits have not vested immediately, the costs are recognised over the period until vesting
occurs. The interest cost and the expected return on assets are shown as a net amount of
other finance costs or credits adjacent to interest. Actuarial gains and losses are recognised
immediately in the statement of total recognised gains and losses.
The UFMS scheme is funded, with the assets of the scheme held separately from those of the
group, in separate trustee administered funds. Pension scheme assets are measured at fair
value and liabilities are measured on an actuarial basis using the projected unit method and
discounted at a rate equivalent to the current rate of return on a high quality corporate bond of
equivalent currency and term to the scheme liabilities. The actuarial valuation is obtained at
least triennially and is updated at each balance sheet date. The resulting defined benefit
asset or liability, net of the related deferred tax, is presented separately after other net assets
on the face of the balance sheet.
5. Accounting for Research and Development
Expenditure on pure and applied research is expensed, and is treated as part of the
continuing activities of the Institution. Expenditure on development activities is carried
forward and amortised over the period expected to benefit, where the conditions of SSAP 13
are met.
6. Foreign Currencies
Transactions denominated in foreign currencies are recorded at the rate of exchange ruling at
the dates of the transactions. Monetary assets and liabilities denominated in foreign
currencies are translated into sterling at year end rates. The resulting exchange differences
are dealt with in the determination of income and expenditure for the financial year unless
such funds are held for onward transmission to a research partner under an agency
agreement, in which case they are included in creditors.
7. Taxation
UCL enjoys charitable status and is therefore potentially exempt from taxation in respect of
most income under Part 11 Chapter 3 of the Corporation Tax Act 2010 and in respect of
capital gains under Section 256 of the Taxation of Chargeable Gains Act 1992, to the extent
that they are applied for its charitable purposes.
Subsidiary companies are liable to corporation tax.
UCL is partially exempt for the purposes of Value Added Tax and is only able to reclaim a
minor element of VAT charged on goods and services bought in.
8. Intangible Fixed Assets
UCL has followed acquisition accounting rules to account for the business combination with
the School of Pharmacy (see note 40), with the resulting negative goodwill treated as an
intangible fixed asset. The benefit is being released to the income and expenditure account
22
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
on a straight line basis over a period of 46 years, consistent with the lifetime of the nonmonetary assets acquired.
The gain on monetary assets is released directly into the income and expenditure statement.
9. Land and Buildings
Land and Buildings are stated in the Balance Sheet at cost where purchased or constructed
by the Group, or valuation where acquired through donation or via the exchange of nonmonetary consideration. Freehold buildings are depreciated on a straight line basis over their
expected useful lives of 50 years. Land which is held freehold is not depreciated and
buildings held on long leasehold are depreciated over the life of the lease up to a maximum of
50 years.
Major refurbishments and fixtures and fittings are capitalised and depreciated as follows:
Major refurbishments
Fixtures and fittings
20 years
10 years
No depreciation is charged on assets in the course of construction.
10. Equipment
Expenditure on furniture and equipment costing less than £25,000 is written off to the income
and expenditure account in full in the year of acquisition.
Equipment and furniture costing more than £25,000 is capitalised at cost, and depreciated
over its expected useful life as follows:
Equipment funded by research grants
Other furniture and equipment
Term of grant
5 years
11. Acquisition with the aid of specific grants
Where tangible fixed assets, excluding freehold land, are acquired with the aid of specific
grants, they are capitalised and depreciated as above. The related grants are credited to a
deferred capital grant account, and are released to the income and expenditure account over
the expected useful economic life of the related asset on a basis consistent with the
depreciation policy.
Specific grants received to fund the purchase of freehold land are credited directly to the
income and expenditure account in the year of the purchase.
12. Leased Assets
Finance lease obligations are included within creditors. Financing amounts are charged to the
income and expenditure account so as to produce a constant periodic charge on the balance
outstanding. Assets held under finance leases are capitalised and depreciated over the
shorter of the lease term or the expected useful lives of equivalent owned assets.
Operating lease costs are charged to the income and expenditure account in the year in
which they are incurred.
13. Heritage Assets
Individual objects, collections, specimens or structures with historic, artistic, scientific,
technological, geophysical or environmental qualities that are held and maintained principally
for their contribution to knowledge and culture are termed Heritage assets.
23
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
Heritage assets acquired on or after 1st July 2006, whether donated, purchased or on loan,
are capitalised and recognised in the balance sheet at cost or valuation, where such cost or
valuation is reasonably obtainable or reliable and amounts to £25,000 or more.
Items donated or on loan are valued by internal valuers. In exceptional cases, where items
are of a rare or unusual nature, an external valuation may be sought.
Heritage assets acquired prior to 1st July 2006 have not been capitalised due to the difficulty
and cost of attributing a reliable cost or value to them, in particular due to the significant cost
involved in the reconstruction and analysis of past accounting records required to do so.
The useful economic lives of assets capitalised are considered and depreciation provided
accordingly where they are considered to be finite.
14. Patents, licences, rights, trademarks and other similar rights over assets
Expenditure on patents, licenses, rights, trademarks and other similar rights over assets is
charged to the income and expenditure account in full in the year in which it is incurred.
15. Investments
Endowment Asset Investments and fixed asset investments in listed securities are stated at
market value in the Balance Sheet. Subsidiary and associate company investments are
stated at cost less provision for impairment.
Current asset investments are shown at the lower of cost or net realisable value.
In the consolidated accounts the Group‟s share of the results in joint ventures is shown each
year in the income and expenditure account and the group‟s share of gross assets and
liabilities is recognised on the balance sheet.
16. Stocks
Stocks are made up of goods for resale, centrally held stock holdings and major stocks held
by academic departments and are stated at the lower of cost or net realisable value.
17. Cash Flows and Liquid Resources
Cash flows comprise increases or decreases in cash.
Cash includes cash in hand and overdrafts. Liquid resources comprise assets held as a
readily disposable store of value. They include current asset investments.
18. Provisions and contingent liabilities
Provisions are recognised in the financial statements when the Institution has a present
obligation (legal or constructive) as a result of a past event, it is probable that a transfer of
economic benefits will be required to settle the obligation and a reliable estimate can be made
of the amount of the obligation. The amount recognised as a provision is discounted to
present value where the time value of money is material. The discount rate used reflects
current market assessments of the time value of money and reflects any risks specific to the
liability. Contingent liabilities are disclosed by way of a note, when the definition of a
provision is not met and includes three scenarios: possible rather than a present obligation; a
possible rather than a probable outflow of economic benefits; an inability to measure the
economic outflow.
24
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
CONSOLIDATED INCOME AND EXPENDITURE
ACCOUNT YEAR ENDED 31 JULY 2012
INCOME
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Endowment income and interest receivable
Note
1
2
3
4
5
Total Income
Less: Share of income from joint ventures
16
Net Income
EXPENDITURE
Staff costs
Other operating expenses
Interest payable
Depreciation
6
7
8
9
Total Expenditure
SURPLUS AFTER DEPRECIATION OF TANGIBLE FIXED
ASSETS AT COST AND BEFORE TAX
Share of operating loss in joint ventures
Share of operating loss in associates
Taxation
Share of taxation in associates
16
17
10
17
SURPLUS AFTER DEPRECIATION OF ASSETS AT COST
AND TAX
Minority interest
27
SURPLUS BEFORE EXCEPTIONAL ITEMS
Exceptional items: continuing operations
Gain on acquisition
Loss on disposal of fixed asset investments
(Loss)/profit on disposal of tangible fixed assets
SURPLUS ON CONTINUING OPERATIONS AFTER
DEPRECIATION OF ASSETS AT COST, DISPOSAL OF
ASSETS AND TAX
Surplus for the year transferred to accumulated income in
endowment funds
SURPLUS FOR THE YEAR RETAINED WITHIN GENERAL
RESERVES
2012
£'000
2011
£'000
198,333
208,452
300,734
156,800
6,891
203,346
172,165
283,383
138,286
5,225
871,210
802,405
(2,475)
(848)
868,735
801,557
472,843
323,636
6,774
40,172
449,012
280,686
6,960
40,762
843,425
777,420
25,310
24,137
(210)
(1,296)
(5)
28
(226)
(342)
(9)
41
23,827
23,601
(116)
11
23,711
23,612
4,805
(253)
(950)
(74)
5,938
27,313
29,476
(886)
(532)
26,427
28,944
11
25
The consolidated income and expenditure of the Group relates wholly to continuing activities.
25
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
STATEMENT OF GROUP HISTORICAL COST
SURPLUSES AND DEFICITS
Note
Surplus on continuing operations before taxation
2012
£'000
2011
£'000
27,318
29,485
Difference between historical cost depreciation and the actual
charge for the year calculated on the re-valued amount
26
550
550
Valuation gains realised on disposal of fixed asset investment
property
26
-
230
Historical cost surplus for the year before taxation
27,868
30,265
Historical cost surplus for the year after taxation
27,863
30,256
2012
£'000
2011
£'000
18
18
25
27,313
33
(1,414)
969
29,476
5,931
(192)
1,614
25
473
-
(50)
-
84
85
(4,367)
213
2,407
1,105
23,126
40,554
RECONCILIATION TO CLOSING RESERVES AND
ENDOWMENTS
Opening reserves and endowments
Total recognised gains for the year
332,820
23,126
292,266
40,554
Closing reserves and endowments
355,946
332,820
STATEMENT OF GROUP TOTAL RECOGNISED GAINS
AND LOSSES
Surplus on continuing operations after depreciation of assets
at cost and disposal of assets and tax
Appreciation of endowment asset investments
Net realised loss from sale of endowment asset investments
Net endowments received in year
Endowments acquired on combination with School of
Pharmacy
Subsidiary reserves acquired on combination with School of
Pharmacy
Adjustment to income and expenditure reserve for change in
percentage holdings in associates
Unrealised surplus on revaluation of fixed asset investments
Actuarial (loss)/gain in respect of pension schemes
26
Note
15
37
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
CONSOLIDATED CASH FLOW STATEMENT
Note
2012
£'000
2011
£'000
Net cash inflow from operating activities
30
44,617
45,833
Returns on investments and servicing of finance
32
(500)
(2,377)
Taxation
10
(5)
(9)
Capital expenditure and financial investment
33
(13,946)
(33,907)
Acquisitions and disposals
34
9,000
(1,230)
39,166
8,310
Cash inflow before use of liquid resources and financing
Management of liquid resources
31
(8,454)
(3,903)
Financing
35
(1,663)
(1,189)
29,049
3,218
Increase in cash in the period
Increase in deposits repayable at short notice
Decrease in debt
29,049
8,454
1,663
3,218
3,903
1,188
Change in net funds
39,166
8,309
101,951
93,642
141,117
101,951
Increase in cash in the year
RECONCILIATION OF NET CASH FLOW TO MOVEMENT
IN NET FUNDS
Net funds at 1 August 2011
Net funds at 31 July 2012
31
29
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
1. FUNDING COUNCIL GRANTS
HEFCE recurrent grant:
Teaching
Research
Other (including special funding)
Deferred Capital Grants released in year:
Buildings
Equipment
2. ACADEMIC FEES AND SUPPORT GRANTS
Full-time students
Full-time students charged overseas fees
Part time fees
Other fees
Research training support grants
Short course fees
2012
£'000
2011
£'000
65,080
110,684
6,279
65,849
107,102
12,443
11,878
4,412
11,554
6,398
198,333
203,346
2012
£'000
2011
£'000
55,349
107,155
9,935
7,036
22,232
6,745
52,505
87,880
9,173
7,053
7,480
8,074
208,452
172,165
2012
£'000
2011
£'000
103,162
90,904
42,394
11,014
27,760
4,957
18,973
1,570
104,683
84,517
38,256
11,336
23,645
3,661
16,771
514
300,734
283,383
254,495
46,239
237,486
45,897
300,734
283,383
3. RESEARCH GRANTS AND CONTRACTS
Source of income:
OST research councils
UK based charities
UK central government, local/health authorities, hospitals
UK industry, commerce and public corporations
EU government bodies
EU other
Other overseas
Other sources
Research income relating to direct expenditure incurred during the year
Contribution towards overhead costs
Income from research grants and contracts includes deferred capital grants released in the year
of £8,120,000 (2011 - £7,742,000).
30
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
4. OTHER OPERATING INCOME
Residences and catering
Other services rendered
Health authorities
Donations and sundry grants
Benefit on combination with School of Pharmacy – release to
income
Released from deferred capital grants
Other income
Share of joint venture income
2012
£'000
2011
£'000
29,428
46,556
34,425
19,691
26,442
41,764
35,777
10,618
38
4,573
19,617
2,472
3,326
19,516
843
156,800
138,286
Income from residences and catering includes deferred capital grants released in the year of
£145,000 (2011 - £130,000).
5. ENDOWMENT AND INVESTMENT INCOME
Note
2012
£'000
2011
£'000
Income from expendable endowments
Income from permanent endowments
Other interest receivable and investment income
Share of joint venture income
25
25
2,178
388
4,322
3
1,762
304
3,154
5
6,891
5,225
2012
£'000
2011
£'000
390,652
32,485
49,706
369,410
30,590
49,012
472,843
449,012
2012
£
2011
£
279,616
44,739
276,710
16,664
44,281
324,355
337,655
6. INFORMATION REGARDING EMPLOYEES
Staff costs:
Salaries and wages
NI contributions
Other pension costs
Note
37
Emoluments of the Provost and President:
Salary
Benefits
Pension contributions
The emoluments of the Provost are shown on the same basis as for higher paid staff. The NHS
is recharged £65,000 for the Provost‟s role as Chair of the NHS Commissioning Board Authority.
Compensation for loss of office in respect of one higher paid employee totalled £30,000 (2011 £nil).
No trustee has received any remuneration from the group during the year (2011 - £nil).
7 trustees are also UCL employees but received no additional payment for acting as trustees.
The total expenses paid to or on behalf of one trustee was £148 (2011 - £193 to one trustee).
31
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
Remuneration of higher paid staff:
The following sets out the remuneration of all higher paid staff including distinction awards paid to
clinical academic staff and payments relating to private consultancy work, both of which are
funded from non-HEFCE funds, but excluding employers pension contributions:
2012
2011
No.
No.
£100,001 - £110,000
64
58
£110,001 - £120,000
56
55
£120,001 - £130,000
46
40
£130,001 - £140,000
27
39
£140,001 - £150,000
34
29
£150,001 - £160,000
34
29
£160,001 - £170,000
18
21
£170,001 - £180,000
17
20
£180,001 - £190,000
11
16
£190,001 - £200,000
17
15
£200,001 - £210,000
11
12
£210,001 - £220,000
1
2
£220,001 - £230,000
1
2
£230,001 - £240,000
3
4
£240,001 - £250,000
1
1
£250,001 - £260,000
£260,001 - £270,000
2
2
£270,001 - £280,000
1
1
£280,001 - £290,000
1
£290,001 - £300,000
1
The average number of individuals paid through the payroll during the year was 10,097 (2011 9,783).
7. OTHER OPERATING EXPENSES
Residences and catering
Furniture, computer and other equipment costs
Academic consumables and laboratory expenditure
Books, publications and periodicals
Scholarships and prizes
General educational expenditure
Rents, rates and insurance
Heat, light, water and power
Service charges
Repairs and general maintenance
Long term maintenance
Telephone
Advertising and recruitment
Printing, postage, stationery and other office costs
Conference, travel and training
Professional fees
Audit Fees
Other fees paid to auditors
Grants to Students Union and other student bodies
Payments to non contract staff and agencies
Other costs
2012
£'000
2011
£'000
14,802
28,163
41,643
8,000
42,096
15,781
10,344
11,468
6,246
10,322
11,784
1,589
2,297
8,436
21,451
16,704
145
1,073
2,289
17,843
51,160
323,636
15,544
24,522
37,802
7,513
23,445
15,555
8,608
10,213
6,348
14,939
14,277
1,495
1,667
7,442
18,602
12,674
134
256
5,883
10,096
43,671
280,686
In addition to that noted above, other fees paid to auditors of £34,000 were capitalised during the year
(2011 - £262,000).
32
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
8. INTEREST AND OTHER FINANCE COSTS
Note
Bank loans and other loans wholly repayable within five years
Loans not wholly repayable within five years
Finance leases
Net charge on pension scheme assets and liabilities
37
2012
£'000
2011
£'000
5
3,485
3,262
22
2
3,565
3,321
72
6,774
6,960
9. ANALYSIS OF EXPENDITURE BY ACTIVITY
2012
Academic departments
Academic services
Research grants and contracts
Residences and catering
Premises
Administration
Other expenses
Staff
Costs
£'000
Other
Operating
Expenses
£'000
Interest
Payable
£'000
Depreciation
£'000
Total
£'000
246,422
21,650
136,583
2,738
5,470
39,925
20,055
60,076
22,676
109,793
14,802
61,393
32,904
21,992
1,833
3,773
1,168
5,304
1,897
8,120
2,757
21,490
526
78
311,802
46,223
254,496
22,130
92,126
73,355
43,293
472,843
323,636
6,774
40,172
843,425
£'000
29,128
11,044
The depreciation charge has been funded from:
Deferred capital grants released (Note 24)
General income
40,172
2011
Academic departments
Academic services
Research grants and contracts
Residences and catering
Premises
Administration and central
services
Other expenses
Staff
Costs
£'000
Other
Operating
Expenses
£'000
Interest
Payable
£'000
Depreciation
£'000
Total
£'000
230,930
20,365
132,557
2,710
7,942
39,886
16,982
97,188
15,544
61,142
1,830
3,847
6,560
2,148
7,741
2,679
20,940
277,376
39,495
237,486
22,763
93,871
40,750
13,758
32,215
17,729
1,283
553
141
73,518
32,911
449,012
280,686
6,960
40,762
777,420
The depreciation charge has been funded by:
Deferred capital grants released
General income
£'000
29,150
11,612
40,762
33
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
10. TAXATION
Taxation charges and credits are in respect of UK corporation tax in
the following subsidiary companies:
2012
£'000
2011
£'000
UCL Trading Ltd
(5)
(9)
Total tax charge
(5)
(9)
2012
£'000
2011
£'000
4,805
-
(253)
-
(75)
1
(253)
(74)
(540)
(410)
6,939
(739)
(262)
(950)
5,938
11. EXCEPTIONAL ITEMS
Gain on combination with School of Pharmacy:
(Loss)/profit on disposal of fixed asset investments:
Loss on disposal of shares held as fixed asset investments
Profit on disposal of interest in investment property
(Loss)/profit on disposal of tangible fixed assets:
Profit on disposal of 43 Huntley Street
Loss on disposal of other land and buildings
Loss on disposal of equipment
40
12. INTANGIBLE ASSETS (Consolidated and UCL)
Fair value
At 1 August 2011
Additions at fair value
As at 31 July 2012
Note
£'000
40
(2,981)
(2,981)
Released to income and expenditure account
At 1 August 2011
Release for the year
At 31 July 2012
Net Book Value
At 31 July 2012
38
38
(2,943)
At 1 August 2011
-
Intangible assets relate to negative goodwill arising on the combination with the School of
Pharmacy on 1 January 2012. The amortisation period is 46 years.
34
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
13. TANGIBLE ASSETS
Freehold
Land and
Buildings
£'000
Leasehold
Land and
Buildings
£'000
Equipment,
Plant and
Machinery
£'000
Assets in the
course of
construction
£'000
Total
£'000
612,856
208,993
154,912
7,626
984,387
5,727
(1,210)
617,373
16,987
(67)
8,300
(1,577)
232,636
9,682
67
10,508
(58,777)
116,392
29,488
37,114
26,669
54,023
(61,564)
1,003,515
170,592
68,786
133,105
-
372,483
18,710
(1,038)
188,264
8,110
(49)
7,545
(1,103)
83,289
7,648
49
13,917
(57,918)
96,801
-
15,758
40,172
(60,059)
368,354
Net Book Value
At 31 July 2012
429,109
149,347
19,591
37,114
635,161
At 1 August 2011
442,264
140,207
21,807
7,626
611,904
Freehold
Land and
Buildings
£'000
Leasehold
Land and
Buildings
£'000
Equipment,
Plant and
Machinery
£'000
Assets in the
course of
construction
£'000
Total
£'000
612,856
-
207,826
16,987
154,018
9,682
7,568
-
982,268
26,669
5,727
(1,210)
617,373
8,300
(1,577)
231,536
10,291
(58,758)
115,233
28,625
36,193
52,943
(61,545)
1,000,335
170,592
-
68,336
8,110
132,432
7,648
-
371,360
15,758
18,710
(1,038)
188,264
7,518
(1,103)
82,861
13,866
(57,902)
96,044
-
40,094
(60,043)
367,169
Net Book Value
At 31 July 2012
429,109
148,675
19,189
36,193
633,166
At 1 August 2011
442,264
139,490
21,586
7,568
610,908
Consolidated
Cost
At 1 August 2011
School of Pharmacy at 1
January 2012
Reclassifications
Additions at cost
Disposals
At 31 July 2012
Depreciation
At 1 August 2011
School of Pharmacy at 1
January 2012
Reclassifications
Charge for year
Disposals
At 31 July 2012
UCL
Cost
At 1 August 2011
School of Pharmacy at 1
January 2012
Additions at cost
Disposals
At 31 July 2012
Depreciation
At 1 August 2011
School of Pharmacy at 1
January 2012
Charge for year
Disposals
At 31 July 2012
35
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
The declared value of buildings for insurance purposes (day one basis) as at 1 August 2012 was
£2.5bn (2011 - £2.3bn).
At 31 July 2012, freehold land and buildings included £49.2 million (2011 - £37.9 million) in respect of
freehold land which is not depreciated.
The above includes assets held under finance leases. At 31 July 2012 the net book value of the
assets held under finance leases was £24.0m (2011- £24.6m) with a depreciation charge for the year
of £0.6m (2011 - £0.6m).
UCL has a number of operating leases for buildings for which it pays no consideration. UCL believes
that it would be impractical to value these leases and therefore does not disclose a value for them.
14. HERITAGE ASSETS
Since its foundation in 1826 UCL has acquired and established a number of significant collections of
heritage assets representative of its interests in the arts, humanities, sciences and medicine. Many of
the items contained therein are of international as well as national importance.
UCL‟s collections have made, and continue to make, a significant contribution to the furtherance of
scholarship, promotion of innovation and the dissemination of knowledge for public benefit.
UCL recognises that its status as a first class international university requires the adoption of
internationally-recognised standards of conduct in the acquisition, preservation, management and
disposal of heritage assets, as well as meeting the requirements of United Kingdom legislation.
Policies to ensure appropriate standards are maintained are set out in the Cultural Property Policy.
UCL‟s Museums, Heritage and Cultural Property Committee is responsible for oversight of all UCL‟s
activities in relation to heritage assets and for advising Council thereon.
There are no heritage assets capitalised in the balance sheet for the year ended 31 July 2012 as the
volume of items, the elapsed time since acquisition and the information available on acquisition
methods render the cost of identifying the appropriate accounting treatment disproportionate to the
benefit to be derived by users of the financial statements. No additions in the year under review met
the capitalisation threshold of £25,000.
The principal collections are as follows:
Petrie Collection of Egyptian and Sudanese Archaeology.
The collection comprises over 80,000 objects acquired over a period spanning 1892 to the present
day, via a combination of donations, bequests, purchases and direct collection.
William Petrie was appointed to the first British Chair of Egyptology and Philology in 1892 at UCL.
He conducted numerous excavations from 1884 to 1924 from which many of the objects in the
collection derive.
At any time, a number of objects from the collection are on display in the Petrie Museum which is
open to the public Tuesday to Saturday from 13.00 to 17.00. Special arrangements can be made to
accommodate school visits and individual researchers. The museum also offers a range of teaching
and learning resources and services.
36
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
UCL Art Collections
The collection comprises over 10,000 fine art objects acquired from 1847 to the present day, via a
combination of donations bequests, purchase and direct collection.
Sub collections include the Flaxman sculpture collection, the Flaxman drawings, the Painting
Collection, European Print Collection, European Drawing Collection, Slade Print Collection, Slade
Drawing Collection, The collections include prize-winning student work from the Slade School of Fine
Art, prints and drawings by Old Master artists such as Durer, Rembrandt, Turner and Constable and
sculpture models by the Neo-Classical artist John Flaxman.
UCL Art Collections operates a study centre, a gallery with public exhibitions and a range of
education programmes. There is an on-line catalogue where many of the items in the collection can
be viewed.
Grant Museum of Zoology
The Grant Museum is the only remaining university zoological museum in London. It was founded as
a teaching collection and currently houses around 62,000 specimens, covering the whole Animal
Kingdom, collected from 1827 to the present day.
The Museum contains many skeletons, mounted animals and specimens preserved in fluid. Many of
the species are now endangered or extinct including the Tasmanian tiger or thylacine, the quagga
and the dodo.
Further items of particular interest and beauty include a selection of spectacular glass models made
by the Blaschka family in the late 1800s, many of Robert Grant's original specimens as well as those
of Thomas Henry Huxley, and the collection of Sir Victor Negus's bisected heads which have been
described as “both arresting and beautiful”.
Acquisitions have been by way of donation and bequest, purchase and direct collection by staff and
students.
The museum is open to the public every week day afternoon from 13.00 to 17.00 hours.
Library Special Collections of Books and Manuscripts
UCL Library Special Collections is one of the foremost university collections of manuscripts, archives
and rare books in the UK. It includes fine collections of medieval manuscripts and early printed
books, notably from the C.K Ogden Collection and Graves Library, as well as significant holdings of
18th century works, and highly important 19th and 20th century collections of personal papers,
archival material, and literature, covering a vast range of subject areas, notably Latin American
archives, Jewish collections and the George Orwell Archive.
The collections have been built up since 1826 to the present day by way of donation, bequest,
purchase and direct collection.
In addition to the above, there are a number of smaller collections covering a range of subjects
including archaeology, geography and biomedicine.
37
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
15. INVESTMENTS
Monies held
on long term
deposit
£'000
Other
Investments
£'000
Investment in
subsidiaries
£'000
Total
£'000
Consolidated
At 1 August 2011
Additions
Investments reclassified as Associates
Revaluations
Impairments
Disposals
11,316
962
-
36,468
18,799
(34)
85
194
(14,401)
-
47,784
19,761
(34)
85
194
(14,401)
At 31 July 2012
12,278
41,111
-
53,389
UCL
At 1 August 2011
Additions
Revaluations
Disposals
11,316
962
-
36,527
19,046
85
(14,205)
2,012
6,400
-
49,855
26,408
85
(14,205)
At 31 July 2012
12,278
41,453
8,412
62,143
Included in monies held on long term deposits is £12.3 million (2011 - £11.3 million) over which there
is a legal charge. The deposit represents a security fund to meet the obligations under finance leases
(note 21).
Included in impairments is the reversal of a previous £196,000 impairment loss relating to an
investment in Spirogen, which was sold during the year realising a profit to the Group of £302,000.
Included in other securities is a portfolio of fixed interest securities, equities and cash (£30.1m),
investment properties (£1.2m), shares in The Francis Crick Institute Ltd (£8.7m) and shares in other
limited companies and partnerships (£1.1m), which includes a £250,000 investment in Combined
London Colleges University Challenge LP (CLCUC), of which UCL is one of four limited partners.
Under the terms of the Partnership Agreement, a manager has been appointed to manage the
partnership, and is responsible for setting operational procedures and for selecting, monitoring and
realising investments. Consequently UCL has no significant influence over the operation of CLCUC
and so does not account for it as an associate or joint venture.
38
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
16. JOINT VENTURES
The UCL group has interests in the following joint ventures:
(a)
Bio-Nano Centre Ltd is a joint venture company of Imperial College London (ICL) and UCL
limited by guarantee. The company is a specialist research and development consultancy
facilitating the development and commercialisation of new bio-medical and nano-technology
based products. The company prepares accounts to 31 July, and accounts to 31 July 2012 are
included.
(b) EuroTempest Ltd is a joint venture company of Benfield, Royal & Sun Alliance and UCL
Business Plc. The company transforms weather forecasts and observations into the specific
information required to make successful live risk management decisions. The company prepares
accounts to 31 December, and accounts to 31 December 2011 plus management accounts to 31
July 2012 are included.
(c)
Imanova Ltd is a joint venture company of UCL, Imperial College London (ICL), Kings College
London (KCL) and The Medical Research Council (MRC). Imanova owns and manages the
Clinical Imaging Centre (CIC) located at Imperial College London‟s Hammersmith Hospital
campus. The company prepares accounts to 31 July, and accounts to 31 July 2012 are
included.
(d) Control of The Francis Crick Institute Construction Ltd passed to The Francis Crick Institute Ltd
during 2010-11.
These joint venture investments are disclosed in the financial statements as follows:
2012
2011
£'000
£'000
Share of income:
Bio-Nano
360
782
EuroTempest
61
66
Imanova
2,054
Share of operating (loss)/profit:
Bio-Nano
EuroTempest
The Francis Crick Institute Ltd
Imanova
Share of gross assets:
Bio-Nano
EuroTempest
Imanova
Share of gross liabilities:
Bio-Nano
EuroTempest
Imanova
Share of reserves:
Bio-Nano
EuroTempest
Imanova
Purchase of investments in joint ventures
Imanova
39
2,475
848
(96)
6
(120)
(30)
(3)
(2)
(191)
(210)
(226)
580
41
1,798
567
47
592
2,419
1,206
(510)
(5)
(984)
(401)
(17)
(33)
(1,499)
(451)
70
36
814
166
30
559
920
755
375
750
375
750
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
17. ASSOCIATES
The UCL group has interests in the following associate companies:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
47.4% holding in Pentraxin Therapeutics Ltd. The company, which began trading in August
2003, has been established for the purpose of developing and commercially exploiting
certain technology for designing, synthesizing and developing novel therapeutic drugs. The
company prepares accounts to 31 July, and accounts to 31 July 2012 are included.
49.8% holding in Canbex Therapeutics Ltd, increased from 47.7%.The principal activity of
the company is research and development on two novel chemical series aimed at
cannabinoid receptors. The disease targets are spasticity and pain. The company prepares
accounts to 31 July, and accounts to 31 July 2012 are included.
32.5% holding in Domainex Ltd (increased from 30.1%). The principal activity of the
company is to exploit its technology platform in the field of protein domain hunting, gene
expression and protein structure analysis. The company prepares accounts to 30 April, and
accounts to 30 April 2012 plus management accounts to 31 July 2012 are included.
34.8% holding in Multilyte Ltd. The principal activity of the company is the development of a
ubiquitous microanalytical technology (based on the use of microassays) for diagnostic
applications in the medical research and other fields. The company prepares accounts to 28
February, and accounts to 28 February 2012 are included. The directors have given
assurance that there are no material transactions up to 31 July 2012.
27.9% holding in ordinary shares of Bloomsbury DSP Ltd. The principal activity of the
company is the development and marketing of advanced sonar equipment. The company
prepares accounts to 30 June, and accounts to 30 June 2011 are included. The company is
in the process of being wound up and there have been no material transaction since 30
June 2011.
40.0% holding in ordinary shares of Senceive Ltd. The company provides information
delivery services and products to industry. The company prepares accounts to 31 October,
and accounts to 31 October 2011 plus management accounts to 31 July 2012 are included.
31.49% holding in Endomagnetics Ltd (reduced from 39.0%). The company develops
medical devices. The company prepares accounts to 30 April, and accounts to 30 April
2012 plus management accounts to 31 July 2012 are included.
20% interest in UCL Partners Ltd, a company limited by guarantee. The company promotes
excellence in clinical care, health education and research. The company prepares accounts
to 31 March, and accounts to 31 March 2012 plus management accounts to 31 July 2012
are included.
47.75% interest in Abcodia Ltd. The company develops biomarkers. The company prepares
accounts to 31 December 2011 plus management accounts to 31 July 2012 are included.
24.15% holding in ordinary shares of Asio Ltd. The company develops biomarkers. The
company prepares accounts to 30 June, and management accounts to 31 July 2012 are
included.
Following a share issue during 2011-12, the UCL Group holding in NP Complete Ltd was reduced
from 20% to 13.68%. Its status has therefore changed from associate to investment.
40
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
The investment in associates is disclosed in the financial statements as follows:
Share of operating profit/(loss):
Pentraxin Therapeutics Ltd
Canbex Therapeutics Ltd
Domainex Ltd
Multilyte Ltd
Senceive Ltd
NPComplete Ltd
Endomagnetics Ltd
UCL Partners Ltd
Abcodia Ltd
Asio Ltd
Share of taxation:
Domainex
Senceive Ltd
Endomagnetics Ltd
Share of net assets/(liabilities):
Pentraxin Therapeutics Ltd
Canbex Therapeutics Ltd
Domainex Ltd
Multilyte Ltd
Bloomsbury DSP Ltd
Senceive Ltd
NPComplete Ltd
Endomagnetics Ltd
UCL Partners Ltd
Abcodia Ltd
Asio Ltd
Share of Reserves:
Pentraxin Therapeutics Ltd
Canbex Therapeutics Ltd
Domainex Ltd
Multilyte Ltd
Bloomsbury DSP Ltd
Senceive Ltd
NPComplete Ltd
Endomagnetics Ltd
UCL Partners Ltd
Abcodia Ltd
Asio Ltd
Purchase of investments in associates:
Canbex Therapeutics Ltd
Endomagnetics Ltd
Abcodia Ltd
Asio Ltd
41
2012
£'000
2011
£'000
143
(354)
(220)
16
(43)
(475)
(360)
(3)
76
(88)
(57)
7
(79)
5
(214)
(1)
9
-
(1,296)
(342)
29
(1)
37
4
-
28
41
54
(738)
233
83
1
(191)
27
3
138
(4)
(89)
(389)
392
67
1
(148)
(9)
(96)
3
498
-
(394)
230
54
(738)
233
83
1
(191)
27
3
138
(4)
(89)
(389)
392
67
1
(148)
(9)
(96)
3
498
-
(394)
230
45
386
95
230
250
-
526
480
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
18. ENDOWMENT ASSET INVESTMENTS (Consolidated and UCL)
2012
£'000
2011
£'000
72,681
67,884
Net (disposal)/purchase of investments
Net realised loss from sale of investments
Increase in market value of investments
Increase/(decrease) in cash balances held for endowment funds
(2,905)
(1,414)
33
3,963
4,827
(192)
5,931
(5,769)
At 31 July 2012
72,358
72,681
Represented by:
Fixed interest securities and equities
Cash
64,557
7,801
68,843
3,838
72,358
72,681
71,392
68,236
At 1 August 2011
25
Total endowment asset investments
25
Endowment assets at cost
19. DEBTORS
Consolidated
2012
2011
£'000
£'000
Amounts falling due within one year:
Invoiced debtors
Research grants and contracts
Local health authorities/hospitals
Halls of residence debtors
Advances to members of staff
Intercompany debtors
Other debtors and prepayments
Amounts falling due after one year:
Loans to associate companies
20. CREDITORS: AMOUNTS FALLING
DUE WITHIN ONE YEAR
UCL
2012
£'000
2011
£'000
12,891
102,553
13,969
609
4,217
22,772
10,517
92,593
20,578
354
3,601
23,871
10,247
102,553
13,969
609
4,207
8,927
20,123
7,926
92,593
20,578
354
3,590
8,906
22,056
368
347
-
-
157,379
151,861
160,635
156,003
Consolidated
Bank loans
Private Finance Initiative loans
Overdrafts
Research grants received on account
Purchase ledger creditors
Other creditors including taxation and
social security
Obligations under finance leases
Accruals and deferred income
Inter-company creditors
42
UCL
2012
£'000
2011
£'000
2012
£'000
2011
£'000
1,278
270
157,595
26,011
1,278
171
200
142,036
26,607
1,278
270
157,595
25,051
1,278
171
142,036
25,626
43,643
634
71,478
-
40,174
465
63,390
-
41,909
634
66,700
706
38,202
465
59,726
1,095
300,909
274,321
294,143
268,599
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
21. CREDITORS: AMOUNTS FALLING DUE AFTER MORE
THAN ONE YEAR (Consolidated and UCL)
Note
Obligations under finance leases
Cruciform building – Private Finance Initiative
Long-term bank loan
Salix Revolving Green Fund
Analysis of Loan repayments:
In less than one year:
Finance leases
Loans
In more than one year but no more than two years:
Finance leases
Loans
In more than two years but no more than five years:
Finance leases
Loans
In more than five years:
Finance leases
Loans
In less than one year
20
2012
£'000
2011
£'000
41,278
16,324
17,253
500
41,661
16,594
18,531
500
75,355
77,286
634
1,548
465
1,449
780
1,664
597
1,548
3,377
5,883
2,724
5,415
37,121
26,530
38,340
28,662
77,537
(2,182)
79,200
(1,914)
75,355
77,286
It is anticipated that UCL will exercise options under the leasing arrangements between 20 and 25
years into the term of each lease. The obligations under these long term liabilities will be met from
payments which amount to approximately £3.7m per annum. Security is provided to the lessors
by way of annual payments into a security deposit (Note 15).
The loan facility of £18.5m (of which £17.2m is repayable after more than one year and £1.3m in
less than one year) has a fixed rate of interest of 5.66% for the remaining term of the loan, until
August 2026.
22. OPERATING LEASES
At 31 July 2012 UCL had annual commitments under non-cancellable operating leases as set out
below:
2012
2011
Land &
Land &
Buildings
Other
Buildings
Other
£'000
£'000
£'000
£'000
Operating leases which expire:
Within one year
36
56
201
69
In the second to fifth years inclusive
1,550
152
807
117
Over five years
3,071
2,753
23
Total
4,657
208
3,761
209
43
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
23. PROVISIONS FOR LIABILITIES AND CHARGES
2012
£'000
Balance at 1 August
Transfer from income and expenditure account
Utilised in year
578
578
The provision represents our best estimate, based on expert advice, of sums payable in respect of
dilapidations on the termination of various building leases.
Funding
Council
£'000
Other
Grants
£'000
Total
£'000
Balance at 1 August 2011:
Freehold buildings
Leasehold buildings
Equipment
Investments
216,120
52,745
5,095
-
44,068
45,057
9,716
1,298
260,188
97,802
14,811
1,298
Total
273,960
100,139
374,099
School of Pharmacy at 1 January 2012:
Leasehold buildings
Equipment
5,418
835
631
876
6,049
1,711
Total
6,253
1,507
7,760
Cash receivable:
Freehold buildings
Leasehold buildings
Equipment
Investments
2,188
2,461
113
15,130
13,531
3,729
5,211
-
15,719
6,190
5,324
15,130
Total
19,892
22,471
42,363
Disposals:
Freehold buildings
Leasehold buildings
Equipment
(27)
(263)
(80)
(185)
(27)
(80)
(448)
Total
(290)
(265)
(555)
(8,909)
(2,969)
(4,412)
-
(4,656)
(2,214)
(5,948)
(20)
(13,565)
(5,183)
(10,360)
(20)
Total
(16,290)
(12,838)
(29,128)
Balance at 31 July 2012:
Freehold buildings
Leasehold buildings
Equipment
Investments
209,372
57,655
1,368
15,130
52,943
47,123
9,670
1,278
262,315
104,778
11,038
16,408
Total
283,525
111,014
394,539
24. DEFERRED CAPITAL GRANTS
Consolidated
Released to income and expenditure account:
Freehold buildings
Leasehold buildings
Equipment
Investments
44
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
Funding
Council
£'000
Other
Grants
£'000
Total
£'000
Balance at 1 August 2011:
Freehold buildings
Leasehold buildings
Equipment
216,120
52,745
5,095
44,068
44,275
9,716
260,188
97,020
14,811
Total
273,960
98,059
372,019
School of Pharmacy at 1 January 2012:
Leasehold buildings
Equipment
5,418
835
631
876
6,049
1,711
Total
6,253
1,507
7,760
Cash receivable:
Freehold buildings
Leasehold buildings
Equipment
Investments
2,188
2,461
113
15,130
13,531
3,729
5,211
-
15,719
6,190
5,324
15,130
Total
19,892
22,471
42,363
Disposals:
Freehold buildings
Leasehold buildings
Equipment
(27)
(263)
(80)
(185)
(27)
(80)
(448)
Total
(290)
(265)
(555)
(8,909)
(2,969)
(4,412)
(4,656)
(2,179)
(5,948)
(13,565)
(5,148)
(10,360)
Total
(16,290)
(12,783)
(29,073)
Balance at 31 July 2012:
Freehold buildings
Leasehold buildings
Equipment
Investments
209,372
57,655
1,368
15,130
52,943
46,376
9,670
-
262,315
104,031
11,038
15,130
Total
283,525
108,989
392,514
UCL
Released to income and expenditure account:
Freehold buildings
Leasehold buildings
Equipment
45
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
25.
ENDOWMENTS
(Consolidated
and UCL)
At 1 August 2011
Capital
Accumulated
income
School of
Pharmacy at 1
January 2012
Capital
Accumulated
Income
Additions
Disposals
Investment
income
Expenditure
- investment
management
fees
- other
Net realised gain
from sale of
investments
Increase in
market value of
investments
At 31 July 2012
Represented by:
Capital
Accumulated
income
Unrestricted
Permanent
£'000
Restricted
Permanent
£'000
Total
Permanent
£'000
Restricted
Expendable
£'000
2012
Total
£'000
2011
Total
£'000
827
9,728
10,555
59,853
70,408
65,271
61
888
361
10,089
422
10,977
1,851
61,704
2,273
72,681
2,613
67,884
-
172
172
195
367
-
-
71
71
35
106
-
-
43
-
43
-
1,008
(82)
1,051
(82)
1,664
(50)
30
358
388
2,178
2,566
2,066
(3)
27
(43)
(200)
115
(46)
(200)
142
(256)
(2,448)
(526)
(302)
(2,648)
(384)
(294)
(4,329)
(2,557)
(17)
(196)
(213)
(1,201)
(1,414)
(192)
-
5
5
28
33
5,932
898
10,299
11,197
61,161
72,358
72,681
810
9,752
10,562
58,531
69,093
70,408
88
547
635
2,630
3,265
2,273
898
10,299
11,197
61,161
72,358
72,681
£1.3m of expendable capital has been spent during the year. A transfer of this amount has been
made to the income and expenditure reserve (2011 - £3.1m)
46
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
26. RESERVES
Consolidated
2012
2011
£'000
£'000
UCL
2012
2011
£'000
£'000
Income and expenditure reserve
At 1 August 2011
235,461
204,743
243,972
212,779
26,427
28,944
25,319
29,632
(50)
-
-
-
84
550
1,270
(9,054)
213
780
3,089
(2,308)
550
1,270
(9,054)
780
3,089
(2,308)
254,688
235,461
262,057
243,972
2012
£'000
2011
£'000
At 1 August 2011
(4,687)
(8,100)
Actuarial (loss)/gain
Surplus retained within reserves
(4,367)
9,054
1,105
2,308
-
(4,687)
29,365
27,739
71
44
14
2,362
-
(230)
(190)
(190)
(360)
(360)
28,900
29,365
Surplus for the year
Subsidiary reserves acquired on combination with
School of Pharmacy
Adjustment for change in percentage holdings in
associates
Transfer from revaluation reserve
Transfer from expendable endowment funds
Less pension surplus
At 31 July 2012
Pension reserve (Consolidated and UCL)
At 31 July 2012
Revaluation reserve (Consolidated and UCL)
At 1 August 2011
Revaluation of fixed asset investment property
Revaluation of fixed asset investments portfolio to
market value
Transfer to general reserve in respect of disposal of
fixed asset investment property
Transfer to general reserve in respect of
depreciation of Examination Halls
Transfer to general reserve in respect of
depreciation of Goldsmid House
At 31 July 2012
47
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
27. MINORITY INTEREST (Consolidated)
The minority interest relates to the following companies:
(a) Bloomsbury Bioseed Fund Ltd (BBSF). 25% owned outside of the Group (reduced from 30%).
The Group acquired an additional 5% during the year following combination with the School of
Pharmacy.
(b) Proaxon Ltd. 16.94% owned outside of the Group.
(c) Evexar Medical Ltd. 0.32% owned outside of the Group.
2012
2011
£'000
£'000
At 1 August 2011
(172)
(161)
Minority interest in subsidiary undertakings‟ results for the year
Adjustment to share capital acquired by the Group
116
12
(11)
-
At 31 July 2012
(44)
(172)
2012
£'000
2011
£'000
132,803
646
151,007
4,347
133,449
155,354
28. CAPITAL COMMITMENTS (Consolidated and UCL)
Commitments contracted at 31 July 2012
Authorised but not contracted at 31 July 2012
Commitments contracted at 31 July 2012 include £79.4m in respect of the Sainsbury Wellcome
Centre (2011 - £96.1m) and £16.8m (2011 - £24.3m) in respect of the Caledonian Road student
residential development. Both of these commitments were entered into in 2010-11.
29. OTHER COMMITMENTS
UCL has a commitment to purchase shares in The Francis Crick Institute Limited. At 31 July
2012, this commitment had a value of £25.4m (2011 - £39.6m).
48
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
30. RECONCILIATION OF CONSOLIDATED OPERATING SURPLUS TO
NET CASH INFLOW FROM OPERATING ACTIVITIES
Note
Operating surplus after depreciation of tangible
fixed assets at cost and before tax
Items not involving cash movements:
Depreciation
Benefit on combination with School of
Pharmacy released to income
Deferred capital grants released to income
Impairment of fixed asset investments
(Increase)/decrease in stocks
Decrease/(increase) in debtors
Increase in creditors
Increase/(decrease) in provisions
Pension cost less contributions payable
Settlement gains on pension transfers
37
37
Items which are not operating activities:
Interest receivable
Interest payable
Investment income
2012
£'000
25,310
2011
£'000
24,137
40,172
40,762
(38)
(29,128)
(232)
(231)
466
16,910
578
(2,458)
(6,618)
(29,150)
60
(8,397)
20,311
(1,250)
(2,380)
-
(4,322)
6,774
(2,566)
(3,154)
6,960
(2,066)
44,617
45,833
1 August
2011
£'000
Cash
Flows
£'000
Other
Changes
£'000
31 July
2012
£'000
3,838
45,980
(200)
49,618
3,963
24,886
200
29,049
-
7,801
70,866
78,667
131,533
8,454
-
139,987
Debt due within one year (note 20)
(1,914)
1,663
(1,931)
(2,182)
Debt due after one year (note 21)
(77,286)
6,905
(4,974)
(75,355)
101,951
46,071
(6,905)
141,117
31. ANALYSIS OF CHANGES IN NET FUNDS
Cash at bank and in hand
Endowment assets (Note 18)
Deposits repayable on demand
Overdrafts (Note 20)
Short term deposits
The decrease in debt is due to capital repayments as follows: (a) finance leases £0.2m, (b) bank
loan £1.3m and (c) private finance initiative loan £0.2m, giving a net decrease in debt of £1.7m.
49
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
32. RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
2012
£'000
2011
£'000
2,566
3,720
(3,329)
(3,457)
2,066
2,484
(3,405)
(3,522)
Net cash outflow from returns on investments and servicing of finance
(500)
(2,377)
33. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
2012
£'000
2011
£'000
(55,152)
(5,495)
(60,647)
(91,646)
(3,899)
(4,826)
(100,371)
498
2,905
42,363
(34)
969
285
6,942
57,643
(20)
1,614
(13,946)
(33,907)
2012
£'000
2011
£'000
(386)
(45)
(95)
(375)
(171)
10,072
(250)
(230)
(750)
-
Total acquisitions and disposals
9,000
(1,230)
35. FINANCING
2012
£'000
2011
£'000
Mortgages and loans acquired
Mortgage and loan capital repayments
(1,663)
320
(1,509)
Net cash outflow from financing
(1,663)
(1,189)
Income from endowments
Other interest received
Interest paid
Interest element of finance lease rental payment
Purchase of tangible fixed assets
Purchase of fixed asset investments
Net purchase of endowment asset investments
Total payments to acquire fixed and endowment assets
Proceeds from disposal of fixed asset investments
Proceeds from disposal of tangible fixed assets
Net proceeds from sale of endowment assets
Capital grants received towards the purchase of tangible assets
Net new loans to associate companies
Endowments received
Net cash outflow from capital expenditure and financial investment
34. ACQUISITIONS AND DISPOSALS
Purchase of investment in associate – Abcodia Ltd
Purchase of investment in associate – Endomagnetics Ltd
Purchase of investment in associate – Canbex Ltd
Purchas in investment in subsidiary – Asio Ltd
Purchase of investment in joint venture – Imanova Ltd
Costs of combination with School of Pharmacy
Cash acquired on combination with School of Pharmacy
50
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
36. HARDSHIP AND ACCESS BURSARY FUNDS (Consolidated &
UCL)
At 1 August
Funding Council grants
Interest earned
Disbursed to students
At 31 July
2012
£'000
2011
£'000
15
218
1
234
(219)
32
203
235
(220)
15
15
Funding Council grants are available solely for students and UCL acts only as paying agent. The
grants and related disbursements are therefore excluded from the income and expenditure
account.
37. PENSION FUNDS
2012
£'000
2011
£'000
38,670
10,737
6,516
(6,081)
(136)
35,998
5,913
6,604
266
231
49,706
49,012
The total pension costs for UCL were:
Contribution to USS
Contribution to SAUL
Contribution to NHS
Credited to I&E in respect of RFPS
Credited to I&E in respect of FPS
The three principal pension schemes for UCL‟s staff are the Universities Superannuation Scheme
(USS), the Superannuation Arrangements of the University of London (SAUL) and the National
Health Service Pension Scheme. Assets of each scheme are held in separate trustee
administered funds. It is not possible to identify UCL‟s share of the underlying assets and liabilities
of either scheme and hence contributions are accounted for as if they were defined contribution
schemes. The schemes are defined benefit schemes which are externally funded and contracted
out of the State Second Pension (S2P) and valued every three years by professionally qualified
independent actuaries using the Projected Unit Method.
The rates of contribution for both schemes are determined by the Trustees on the advice of
actuaries, the cost recognised for the year in the Income and Expenditure account being equal to
the contribution to the scheme.
Outstanding contributions to USS, SAUL and the NHS pension scheme were £6.7m at 31 July
2012 (2011 - £6.0m)
51
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
Universities Superannuation Scheme (USS)
The latest actuarial valuation of the scheme was at 31 March 2011 using the projected unit
method. The assumption and other data which have the most significant effect on the
determination of the contribution levels are as follows:
Past Service
Future Service
Investment returns per annum
Salary scale increases per annum – short term
Salary scale increases per annum – long term
Pension increases per annum – for 3 years following
valuation
Pension increases per annum – thereafter
Market value of assets at last actuarial valuation date
Proportion of members‟ accrued benefits covered by the
actuarial value of assets
Current Employers contribution rate from
6.10%
3.65%
4.40%
6.10%
3.65%
4.40%
3.40%
2.60%
3.40%
2.60%
£32,434m
92.00%
16.00%
UCL has 6,578 active members and 3,711 deferred members within the scheme and details of the
scheme can be found at www.uss.co.uk.
USS is a “last man standing” scheme which means that in the event that another member
institution becomes insolvent the other participating members will pick up any funding shortfall.
An interim valuation, effective April 2012, indicated that the deficit had widened to £9.8bn or 77%
funding level.
Superannuation Arrangement of the University of London (SAUL)
The latest actuarial valuation of the scheme was at 31 March 2011 using the projected unit
method. The assumption and other data which have the most significant effect on the
determination of the contribution levels are as follows:
Past Service
Future Service
Investment returns per annum
- before retirement
6.80%
6.80%
- after retirement
4.70%
4.70%
Salary scale increases per annum – until 31 March 2014
3.75%
3.75%
Salary scale increases per annum – after 31 March 2014
4.50%
4.50%
Pension increases per annum
2.80%
2.80%
Market value of assets at last actuarial valuation date
Proportion of members‟ accrued benefits covered by the
actuarial value of assets
Current Employers contribution rate
£1,506m
82.0%
13.0%
National Health Service Pension Scheme
The NHS Pension Scheme is an unfunded defined benefit scheme available to staff who
immediately prior to appointment at UCL were members of this scheme.
The last valuation of the scheme took place as at 31 March 2004. Between valuations, the
Government Actuary provides an update of the scheme liabilities on an annual basis. On advice
from the actuary the employer‟s contributions were increased from 7% to 14% from 1 April 2004.
The scheme is a multi-employer scheme, where the asset and liabilities for UCL cannot be
identified.
52
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
UCL (Former Medical Schools) Pension Scheme (UFMS)
The UCL (Former Medical Schools) Pension Scheme (UFMS) for non academic staff of Middlesex
Hospital Medical School has become closed to new entrants since merger with UCL on 1 August
1987. This scheme is a defined benefit scheme.
With effect from 30 June 2012, all active members of the Scheme consented to a transfer of their
benefits to SAUL. Deferred and pensioner liabilities have remained with the Scheme.
The last triennial valuation of the UFMS was undertaken on 31 March 2010. For the purposes of
reporting under FRS17, “Retirement Benefits”, a valuation of the scheme was undertaken on 31
July 2011, and details are given below:
UFMS
Valuation method
Valuation date (31 July)
Projected Unit
2011
2012
2010
Inflation assumption - RPI
Inflation assumption - CPI
Increase for pre-1997 pensions in excess of GMP
Increase for pre-1997 pensions for pre-2006
leavers
Increase for pre-1997 pensions for post-2006
leavers
Increase for deferred pensions
Investment return
Salary scale increase per annum
Discount rate for liabilities
2.50%
1.80%
-
3.40%
2.70%
-
3.30%
n/a
3.20%
1.90%
2.70%
3.20%
2.50%
3.90%
3.30%
2.70%
5.90%
3.90%
5.30%
3.20%
3.30%
6.04%
4.30%
5.40%
Projected over-funding
£6.7m
£7.1m
£2.1m
Funding level
175%
164%
111%
£8.9m
£15.6m
£10.9m
£18.0m
£15.0m
£17.1m
nil
nil
nil
3.13%
Present value of liabilities
Fair value of the scheme assets
Current Employers contribution rate
Disclosure of fair values of assets and expected rates of return
2012
Expected
rate of
return
Equities
Gilts
Bonds
Cash
Total
5.80%
2.80%
3.90%
0.50%
2011
Fair Value
£’000
Holding
%
3,417
4,289
3,818
4,072
15,596
22
28
24
26
Expected
rate of
return
6.90%
3.90%
5.30%
0.50%
Fair Value
£’000
10,595
4,110
3,248
87
18,040
Holding
%
59
23
18
-
The Trustees for the scheme had historically secured benefits for a number of deferred pensions
and current pensioners with insurance companies. It has come to light that some of these policies
were written in the names of the individual members rather than the Trustees. In terms of the
disclosure, this means that rather than disclosing an asset value and a corresponding liability we
simply disclose the net liability figure.
53
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
Reconciliation of the present value of the scheme liabilities
to the asset and liability recognised in the balance sheet
Fair value of assets
Value of liabilities (defined benefit obligation)
Funded status
Recognised pension asset
Unrecognised pension asset
2012
£'000
2011
£'000
15,596
8,889
6,707
18,040
10,950
7,090
6,707
389
6,701
2012
£'000
2011
£'000
184
560
(1,056)
(320)
312
231
787
(1,027)
16
(320)
7
Total expense recognised in the income and expenditure
Current service cost
Interest cost on obligation
Expected return on scheme assets
Past service cost
Settlement gain
Effect of restriction on expected return
Total income and expenditure (credit)/charge
-
Amounts for the current and previous four periods
Fair value of scheme assets
Value of liabilities (funded obligations)
Surplus
2012
£'000
2011
£'000
Restated
2010
£'000
2009
£'000
2008
£'000
15,596
8,889
6,707
18,040
10,950
7,090
17,111
14,977
2,134
19,836
18,041
1,795
23,981
20,686
3,295
160
451
931
1,039
(2,391)
(37)
(2,837)
Experience gain/(loss) on liabilities
Experience gain/(loss) on assets
The estimated amounts of contributions expected to be paid to the scheme during the year ending
31 July 2013 is £132,000.
Changes in the present value of the defined benefit obligation
Opening defined benefit obligation
Interest cost on obligation
Current service cost
Actuarial loss/(gain) on obligation
Settlements and curtailments
Members contributions
Benefits paid
Closing defined benefit obligation
54
2012
£'000
2011
£'000
10,950
560
184
1,536
(320)
15
(3,871)
14,977
787
231
(4,016)
16
20
(1,065)
9,054
10,950
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
Changes in the fair value of scheme assets
2012
£'000
2011
£'000
Opening fair value of scheme assets
Expected return
Actuarial gain
Employer contributions
Members contributions
Benefits paid
18,040
1,056
160
196
15
(3,871)
17,111
1,027
931
16
20
(1,065)
Closing fair value of scheme assets
15,596
18,040
2012
£'000
2011
£'000
389
320
(905)
196
318
(7)
62
16
-
389
Total amounts recognised in the statement of total recognised gains
and losses
Recognised pension asset at the start of the year
Income and expenditure credit/(charge)
Actuarial (losses)/gains in STRGL
Employer contributions
Recognised pension asset at the end of the year
The cumulative amount of actuarial gains and losses recognised in the statement of total
recognised gains and losses in respect of the UFMS Pension Scheme is a net loss of £6.0m (2011
- net loss of £5.1m).
The Royal Free Hospital School of Medicine Pension and Assurance Scheme (RFPS)
The Royal Free Hospital School of Medicine Pension and Assurance Scheme (RFPS) operated for
non academic staff at the Royal Free Hospital School of Medicine. Since merger with UCL on 1
August 1998, this scheme has been closed to all new entrants. This scheme is a defined benefit
scheme. On 30 June 2012, all assets and liabilities of the Scheme were transferred to SAUL, and
SAUL has responsibility for meeting all future pension liabilities of members.
In accordance with the requirements of FRS 17, the valuation of the Scheme liabilities has been
determined on the transfer date, 30 June 2012, using the projected unit method. The last triennial
valuation of RFPS was carried out as at 1 August 2009 and updated by a qualified independent
actuary to 30 June 2012 when the Scheme assets and liabilities were transferred to SAUL.
Valuation method
Projected Unit
Valuation date
Inflation assumption - RPI
Inflation assumption - CPI
Increase for pensions
Increase for deferred pensions
Investment return
Salary scale increase per annum
Discount rate for liabilities
55
30 June
2012
31 July
2011
31 July
2010
3.20%
2.50%
3.20%
2.50%
n/a
3.70%
4.50%
3.40%
2.70%
3.40%
2.70%
5.50%
3.90%
5.30%
3.30%
3.30%
3.30%
3.30%
5.80%
4.30%
5.40%
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
Projected under-funding
n/a
£(5.1)m
£(8.4)m
Funding level
n/a
80%
65%
Present value of liabilities
Fair value of the scheme assets
n/a
n/a
£25.7m
£20.5m
£24.3m
£15.9m
Current Employers contribution rate
n/a
33.6%
105.9%
Disclosure of fair values of assets and expected rates of return
Expected
rate of
return
Fair Value
2011
£’000
Holding
16,187
4,309
20,496
79
21
2012
£'000
2011
£'000
Fair value of assets
Value of liabilities (defined benefit obligations)
Funded status
-
20,496
(25,572)
(5,076)
Recognised pension liability
-
(5,076)
2012
£'000
2011
£'000
Current service cost
Interest cost on obligation
Expected return on scheme assets
Gain on settlements and curtailments
217
1,236
(1,030)
(6,298)
266
1,313
(1,001)
-
Total income and expenditure charge
(5,875)
578
Equities
Bonds
Total
Fair Value
2012
£’000
Holding
-
n/a
n/a
Expected
rate of
return
n/a
n/a
%
6.10%
3.10%
Reconciliation of the present value of the scheme liabilities to the
asset and liability recognised in the balance sheet
Total expense recognised in the income and expenditure
%
Amounts for the current and previous four periods
Fair value of scheme assets
Value of liabilities (funded
obligations)
Deficit
Experience (loss)/gain on liabilities
Experience (loss)/gain on assets
2012
£’000
-
2011
£’000
2010
£’000
2009
£'000
2008
£'000
20,496
15,882
12,500
12,156
-
(25,572)
(5,076)
(24,300)
(8,418)
(21,204)
(8,704)
(18,734)
(6,578)
(239)
(292)
(207)
964
(359)
1,311
1,329
(1,844)
33
(2,513)
The estimated amounts of contributions expected to be paid to the scheme during the year ending
31 July 2013 is £nil.
56
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
Changes in the present value of the defined benefit obligation
2012
£'000
2011
£'000
Opening defined benefit obligation
Interest cost on obligation
Current service cost
Past service costs
Actuarial gain on obligation
Loss arising from changes in assumptions underlying the scheme
liabilities
Member contributions
Benefits paid
Settlements and curtailments
25,572
1,236
217
(239)
24,300
1,313
266
(207)
3,409
49
(524)
(29,720)
128
60
(288)
-
-
25,572
2012
£'000
2011
£'000
20,496
1,030
(292)
2,663
49
(524)
(23,422)
15,882
1,001
964
2,877
60
(288)
-
-
20,496
2012
£'000
2011
£'000
(5,076)
(423)
(3,462)
2,663
6,298
(8,418)
(578)
1,043
2,877
-
-
(5,076)
Closing defined benefit obligation
Change in the fair value of scheme assets
Opening fair value of scheme assets
Expected return
Actuarial (loss)/gain
Employers contributions
Members contributions
Benefits paid
Settlements and curtailments
Closing fair value of scheme assets
Total amounts recognised in the statement of total recognised gains
and losses
Recognised pension liability at the start of the year
Income and expenditure charge
Actuarial (losses)/gains in STRGL
Employer contributions
Gain on settlements
Recognised pension liability at the end of the year
The cumulative amount of actuarial gains and losses recognised in the statement of total
recognised gains and losses in respect of the Royal Free Hospital School of Medicine Pension &
Assurance Scheme is a net loss of £9.2m (2011 - net loss of £5.7m).
38. RELATED PARTY TRANSACTIONS
The operating statements of UCL include transactions with related parties. In accordance with
FRS 8 „Related Party Transactions‟ these are disclosed where members of UCL‟s Council and
Senior Management Team (SMT) disclose an interest in a body with whom UCL undertakes
transactions which are considered material to UCL‟s Financial Statements and / or the other party.
Due to the nature of UCL‟s operations and the composition of Council (being drawn from local and
private sector organisations) and SMT, it is inevitable that transactions will take place with
organisations in which members of the Council or SMT may have an interest. All transactions
involving organisations in which members of Council or SMT may have an interest, including those
identified below, are conducted at arms length and in accordance with UCL‟s Financial
Regulations and usual procurement procedures.
An updated register of the interests of members of Council and SMT is maintained.
57
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
UCL has taken advantage of the exemption within FRS 8 and not disclosed transactions with other
group entities where it holds more than 90% of the voting rights.
The Provost is a member of the HEFCE Board and Alison Woodhams is a member of the HEFCE
Audit Committee. UCL receives £198m (2011 - £203m) of funding from HEFCE (see Note 1) these
transactions are conducted at arms length and in the normal course of business.
Alison Woodhams is a member of the Audit Committee of Royal Society. UCL received research
funding of £4.2m from the Royal Society in 2012 (2011 - £4.3m).
Jack Foster is a board member of The SAUL Pension Scheme and Phil Harding is a member of
the USS Pension Scheme Joint Negotiating Committee. UCL participates in both schemes, the
details of which can be found in note 37.
Rex Knight has an outstanding loan under the UCL staff house loan scheme, the amount
outstanding at year end was £87,738 (2011 - £95,595). He also has an investment under the UCL
Shared Appreciation Mortgage Investment scheme of £135,000 (2011 - £135,000). Anthony
Smith also has an investment under the UCL Shared Appreciation Mortgage Investment scheme
of £130k.
Anne Bulford is a Trustee and Honorary Treasurer of the Motor Neurone Disease Associate which
made a grant of £14,500 to UCL in 2011-12.
UCL is a founding member of Francis Crick Institute. Sir John Tooke is a Board Member of the
Institute. Vivienne Parry is a council member of the Medical Research Council, another of the
Institute‟s founding members. In 2011-12 UCL purchased shares in the Francis Crick Institute with
a value of £8.7m.
Sir John Tooke is additionally a non-executive director of UCL Hospitals.
David Attwell chairs the grant panel for the Wellcome Trust. UCL received grants of £31.2m from
the Trust in 2012 (2011 - £35.1m).
David Attwell and Alan Penn each have a child who attended UCL as a student in 2011-12. Their
attendance was in line with normal UCL policies and procedures and conducted at arms length.
Dean Slagel, a director of Canbex Ltd, is also an officer of Esperante AB. Unsecured load notes of
£183,000 (2011 - £183,000) have been issued to Esperante AB from Canbex Ltd which together
with associated interest totaled £263, 055 at 31 July 2012 (2011 - £248,375).
Patrick Reeve is a Managing Partner of Albion Ventures which holds an investment of £750k in
Abcodia Ltd. Andrew Elder is both a Partner of Albion Ventures and Investment Director of
Abcodia Ltd.
Dr A Richards is a director of Abcodia Ltd, Cancer Research Technologies Ltd, Ixicoi Ltd and is a
member of the BBSRC Council. There are contractual arrangements in place between these
entities and UCL or UCL Business. All transactions were performed on an arms length basis.
David Ingram is a director of Charing Systems. UCL Business has a loan with Charing Systems
Ltd worth £26,267 at 31 July 2012.
Mark Leaning, a director of Charing Systems, provided consultancy services worth £25,000 (2011
- £35,000) to UCL Business through PCF Enterprises Limited in 2012.
The husband of Mary Collins sits on the Council of the European Research Council (ERC). During
the year UCL received research funding of £9.2m from the ERC.
58
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
Stephanie Schorge is a member of the Science Advisory Committee of Epilepsy Research UK.
During 2012 UCL received funding of £19,013
Quentin Parkhurst is a director of Endomagnetics Ltd which UCLB made sales of £45,000 to
during the year
The wife of Sir Mark Pepys is a director of PharmResource Ltd which provided consultancy
services worth £60,500 to UCL in 2012.
Graham Hart chairs a sub-panel and is a Senior Investigator for the National Institute for Health
Research. Two awards worth £24,000 were paid to UCL during the year.
Transactions with subsidiaries of UCL have been eliminated on consolidation and no disclosure of
these transactions has therefore been given.
The Group has year end debtor balances with the following associate and joint venture
companies:
Balance
at
1 August
2011
£'000
Cash
transfers
Income
Expenditure
Other
Balance
at 31 July
2012
£'000
£'000
£'000
£'000
£'000
259
(290)
59
-
-
28
46
4
1
25
44
280
(73)
(14)
(14)
(63)
-
151
12
14
45
6
-
-
(59)
-
65
2
1
7
44
6
280
659
(454)
287
-
(59)
433
2012
£'000
460
2011
£'000
426
460
426
Pentraxin Therapeutics
Limited
Canbex Therapeutics
Limited
Abcodia Limited
Eurotempest Limited
Endomagnetic Limited
Senceive Limited
Asio Limited
UCL Partners Limited
Total debtors
Additionally, the Group has granted loans to the following associate companies:
Canbex Therapeutics Limited
Total loans
59
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
39. SUBSIDIARY UNDERTAKINGS
The following UCL subsidiary companies which are incorporated in Great Britain and registered in
England and Wales and which have traded during the year have been consolidated into the
financial statements:
Company
Principal Activity
Status
UCL Trading
Ltd
Contracting,
consultancy and other
commercial activities.
Property investment.
UCL
Investments
Ltd
UCL
Properties Ltd
UCL
Residences
Ltd
UCL
Enterprises
Ltd
UCL
Cruciform Ltd
UCL
Consultants
Ltd
Somers Town
Community
Sports Centre
100% owned
Class of
Shares
Ordinary
Proportion
Held
100% - UCL
100% owned
Ordinary
100% - UCL
Property development
and investment.
Commercial lettings of
accommodation.
100% owned
Ordinary
100% - UCL
100% owned
Ordinary
100% - UCL
General commercial
trading.
100% owned
Ordinary
100% - UCL
Exploitation of
intellectual property in
the field of biomedicine.
Provision of
administrative support
to staff engaged in
consultancy.
Operation of sports
centre.
100% owned
Ordinary
50% - UCL
50% - UCL
Cruciform Trust
100% owned
Ordinary
100% - UCL
Ltd by guarantee.
UCL has the
power to appoint 5
of the 9 trustees
and so has
effective control
100% owned
-
-
100% - UCL
100% - UCL
100% - UCL
UCL Business
Plc
Exploitation of
intellectual property.
Free Clinical
Enterprises
Ltd
Bloomsbury
Bioseed Fund
Ltd (BBSF)
Proaxon Ltd
Testing of new drugs in
the final approval stage.
100% owned
Ordinary
Ordinary 'A'
Redeemable
Preference
Ordinary
Investment in
biotechnology start ups.
75% owned
Ordinary
75% - UCL
Developing and
commercialising
medical treatments.
Developing and
commercialising
medical and surgical
devices.
83% owned
A Preferred
Ordinary
99% owned.
Ordinary 'A'
100% - BBSF
72% - UCL
Cruciform
83% - UCL
Business
100% - UCL
Business
100% - UCL
Business
Evexar
Medical Ltd
Ordinary 'B'
Ordinary 'C'
60
100% - UCL
Business
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
Company
Principal Activity
Status
UCLB
Devices Ltd
Evaluating potential
medical devices,
scientific instruments,
and diagnostics for their
technical feasibility and
commercial viability.
Provision of goods and
services in
biotechnology.
Provision of consulting
services, educational
events and software in
the area of open source
health IT for clinical and
research applications.
Development and
commercial exploitation
of novel systems for the
production of complex,
multicomponent
capsules and fibres
primarily for use in the
healthcare sector.
Thiologics Ltd
Charing
Systems Ltd
Atocap Ltd
100% owned
Class of
Shares
Ordinary
Proportion
Held
100% - UCL
Business
100% owned
Ordinary
100% - UCL
Business
50% owned
Ordinary
50% - UCL
Business
100% owned
Ordinary
100% - UCL
Business
Free Clinical Enterprises Ltd is in the process of being wound up.
The holding in BBSF Ltd increased from 70% to 75% in the year, following the combination
with the School of Pharmacy, who were a 5% shareholder.
61
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
NOTES TO THE ACCOUNTS
40. BUSINESS COMBINATION WITH SCHOOL OF PHARMACY
On 1 January 2012 the School of Pharmacy joined with UCL. The assets and liabilities of the
School of Pharmacy were transferred to UCL at fair value on 1 January 2012. There was a £nil
consideration. UCL has used acquisition accounting to account for the combination, with the
negative goodwill treated as an intangible fixed asset. The balance is being realised over 46 years,
consistent with the lifetime of the non-monetary assets acquired.
Book Values
£'000
Tangible assets
Fair Value
adjustments
£'000
Reported fair
values
£'000
10,286
(24)
10,262
477
-
477
650
16
5,964
7,973
1,622
-
650
16
5,964
7,973
1,622
(11,747)
977
(10,770)
(8,111)
351
(7,760)
Endowments
Permanent
Expendable
(239)
(238)
-
(239)
(238)
Net assets acquired
6,653
1,304
7,957
11
(4,805)
(171)
Endowment asset investments
Current assets
Assets held for sale
Stock
Debtors
Short term deposits
Cash at bank
Creditors
Deferred capital grants
Gain on acquisition
Cost of combination
2,981
Negative goodwill
Fair value adjustments of £24,000 to fixed assets and £351,000 to deferred capital grants are as a
result of aligning the capitalisation and depreciation policies of the School of Pharmacy with those
of UCL. The adjustment of £977,000 to creditors relates to research grants being recategorised
as income.
The School of Pharmacy held an operating lease for a building for which it paid no consideration.
The School of Pharmacy believed that it would be impractical to value this lease and did not
disclose a value for it. Therefore no value was attributed to this building in the transfer of assets to
UCL.
The School of Pharmacy has contributed income of £12.3m, delivering a surplus of £1.6m in the
seven months to 31 July 2012.
62
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2012
FINANCIAL SUMMARIES (unaudited)
2012
£'000
2011
£'000
2010
£'000
2009
£'000
2008
£'000
INCOME
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Profit on disposal of investments
Endowment income and interest
198,333
208,452
300,734
156,800
6,891
203,346
172,165
283,383
138,286
5,225
200,995
150,555
275,061
133,801
5,004
209,895
126,736
254,285
124,026
8,164
193,832
107,753
211,217
112,253
2
10,705
Total income
871,210
802,405
765,416
723,106
635,762
(2,475)
(848)
(3,032)
(3,725)
(348)
Net Income
868,735
801,557
762,384
719,381
635,414
EXPENDITURE
Staff costs
Other operating expenses
Interest payable
Depreciation
472,843
323,636
6,774
40,172
449,012
280,686
6,960
40,762
442,666
242,086
7,325
40,284
417,236
237,649
12,722
39,921
383,607
205,130
7,371
38,659
Total expenditure
843,425
777,420
732,361
707,528
634,767
SURPLUS AFTER DEPRECIATION OF
TANGIBLE FIXED ASSETS AT COST
AND BEFORE TAX
25,310
24,137
30,023
11,853
647
Share of operating (loss)/profit in joint
ventures
Share of operating loss in associates
Taxation
Share of taxation in associates
(210)
(1,296)
(5)
28
(226)
(342)
(9)
41
56
(325)
(11)
(1)
(312)
(374)
2
11
(73)
(525)
62
3
SURPLUS AFTER DEPRECIATION OF
ASSETS AT COST AND TAX
23,827
23,601
29,742
11,180
114
(116)
11
(895)
(52)
462
23,711
23,612
28,847
11,128
576
4,805
-
-
-
-
5,180
(253)
(74)
738
-
113
(950)
5,938
-
(6,149)
170
27,313
29,476
29,585
4,979
6,039
(886)
(532)
70
139
(511)
26,427
28,944
29,655
5,118
5,528
Less: Share of income from joint ventures
Minority interest
SURPLUS BEFORE EXCEPTIONAL ITEMS
Exceptional items: continuing operations
Gain on acquisition
Profit on disposal of subsidiary
(Loss)/profit on disposal of fixed asset
investments
(Loss)/profit on disposal of tangible fixed
assets
SURPLUS ON CONTINUING OPERATIONS
AFTER DEPRECIATION
OF ASSETS AT COST, DISPOSAL OF
ASSETS AND TAX
Surplus for the year transferred to
accumulated income in endowment funds
SURPLUS FOR THE YEAR RETAINED
WITHIN GENERAL RESERVES
63