LONDON’S GLOBAL UNIVERSITY
Annual Report and Financial Statements
for the year ended 31 July 2011
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
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 2011
CONTENTS
Page
1
Committee Membership
2
Financial Highlights
3
Operating and Financial Review
18
Corporate Governance
20
Responsibilities of the Council of UCL
22
Independent Auditors Report to the Members of the Council of UCL
24
Statement of Principal Accounting Polices
29
Consolidated Income and Expenditure Account
30
Statement of Group Historical Cost Surpluses and Deficits
30
Statement of Total Recognised Gains and Losses
31
Consolidated Balance Sheet
32
UCL Balance Sheet
33
Consolidated Cash Flow Statement
34
Notes to the Accounts
64
Financial Summaries (unaudited)
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
COMMITTEE MEMBERSHIP
Council (Trustees)
Lay Members:
Ms Anne Bulford (Treasurer)
Ms Philippa Foster-Back
Lord Hart of Chilton (to 30/09/10)
Mr Rob Holden
Mr Mark Knight
Ms Catherine Newman
Academic
Members:
Professor David Attwell (from
01/10/10)
Dr Robert Barber (from 01/10/10)
Professor Iain Borden (to 30/09/10)
Professor Robert Brown (to
30/09/10)
Professor Malcolm Grant* (Provost)
Dr Nikos Konstantinidis (to 30/09/10)
Ms Vivienne Parry* (Vice-Chair)
Ms Katharine Roseveare*
Dr Gill Samuels
Professor Chris Thompson
Sir Stephen Wall* (Chair)
Baroness Warwick of Undercliffe
(from 01/10/10)
Dr Benet Salway*
Dr Stephanie Schorge* (from
01/10/10)
Dr Andrea Townsend-Nicholson
(to 30/09/10)
Professor Nick Tyler (from
01/10/10)
Professor Maria Wyke
UCL Union:
Mr Matthew Burgess
Mr Michael Chessum
Finance Committee
Lay Members:
Ms Anne Bulford (Chair)
Mr Ven Balakrishnan
Dr Ben Booth
Mr Mark Clarke
Mr John Morgan
Ms Susannah Lloyd
Sir Stephen Wall
Academic
Members:
Professor Malcolm Grant (Provost)
Dr Robert Barber
Professor Dame Hazel Genn
Professor David Ingram
Dr Andrea Townsend-Nicholson
Professor Jonathan Wolff
UCL Union:
Mr Matthew Burgess
Audit Committee
Lay Members:
Mr Rob Holden
Mr John Hustler
Mr Mark Knight (Chair)
Mr Nigel Smith
Investments Committee
Lay Members:
Ms Anne Bulford (Chair)
Mr Ven Balakrishnan
Mr Mark Clarke
Ms Susannah Lloyd
Mr Nigel Thomas

denotes also member of Remuneration Committee
* denotes also member of Nominations Committee
1
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
FINANCIAL HIGHLIGHTS
2011
£m
2010
£m
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Endowment income and interest receivable
Total income
Share of income from joint ventures
NET INCOME
203.3
172.2
283.4
138.3
5.2
201.0
150.5
275.1
133.8
5.0
802.4
(0.8)
801.6
765.4
(3.0)
762.4
TOTAL EXPENDITURE
777.4
732.4
Share of operating loss in joint ventures and associates
Profit on disposal of tangible fixed assets
Profit on disposal of fixed asset investments
Minority interest
Transfer to accumulated income within specific endowments
(0.6)
5.8
(0.5)
(0.3)
0.7
(0.9)
0.1
SURPLUS FOR THE YEAR
28.9
29.6
Fixed assets
Endowment asset investments
Net current assets
Total assets less current liabilities
660.7
72.7
55.3
788.7
605.0
67.9
55.5
728.4
Non-current liabilities and provisions
Provision for liabilities and charges
Net pension liability
(77.3)
(4.7)
(78.7)
(1.3)
(8.1)
TOTAL NET ASSETS
Represented by:
706.7
640.3
Deferred grants
Endowments
Reserves
Minority interest
374.1
72.7
260.1
(0.2)
348.2
67.9
224.3
(0.1)
40.6
3.2
42.7
18.8
2011
No.
2010
No.
24,077
9,783
22,628
9,638
CONSOLIDATED INCOME & EXPENDITURE ACCOUNT
CONSOLIDATED BALANCE SHEET
OTHER KEY STATISTICS
Consolidated recognised gains
Consolidated increase in cash flow
Student numbers
Average payroll numbers
2
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
OPERATING AND FINANCIAL REVIEW
The Council of UCL is responsible for this operating and financial review together with the
financial statements. The format follows the Statement of Recommended Practice (SORP):
Accounting for Further and Higher Education.
These accounts are compiled with reference to the Model Financial Memorandum which sets
out the formal relationship between HEFCE and the governing bodies and accountable
officers of the HEIs it funds. All HEIs, including UCL, are bound by the requirements of their
charter and statutes (or equivalent) and by rules relating to their charitable status. The
Memorandum does not supersede those requirements but is intended to complement and
reinforce them.
A full version of the memorandum can be found at:http://www.hefce.ac.uk/pubs/hefce/2010/10_19/
Since 1 June 2010 HEFCE has been the principal regulator of those HEIs in England that are
exempt charities, one of which is UCL. This responsibility results from the Charities Act 2006,
which implements a government decision that all charities should be subject to regulation.
Until June 2010 although they were expected to comply with charity law, exempt charities
were outside the scope of the Charity Commission's regulatory powers. From 1 June 2010,
the exempt charity regulation provisions of the 2006 Act came into effect for HEIs, and they
are now subject to the Charity Commission's powers.
HEFCE is one of several principal regulators. All principal regulators have the duty, as far as
they reasonably can, to promote compliance with charity law by the exempt charities for which
they are responsible. This will require regular monitoring and occasional more detailed work,
including liaison with the Charity Commission on complex issues that might need the use of
its powers.
The financial statements include the consolidated results of UCL’s subsidiary companies,
details of which are shown at Note 38 and whose commercial activities are, for legal and
taxation reasons, more appropriately channelled through limited companies.
These accounts have been prepared on a going concern basis as described in more detail in
note 1 of the Accounting Policies.
This Operating and Financial Review has been prepared for UCL as a whole and therefore
gives greater emphasis to those matters which are significant to UCL when viewed as a
whole.
Long term strategy & objectives
In autumn 2011 the UCL Council published a new White Paper which outlines a vision and
strategy for UCL for the coming ten years. It builds upon and develops the existing strategies
for research, enterprise, human relations, scholarships, estates and facilities, development
and alumni relations, information services, public policy and communications and marketing.
UCL is committed to the following aims, which provide the framework for the new White
Paper:
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;
3
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
OPERATING AND FINANCIAL REVIEW
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; and
improving the quality, accessibility and sustainability of its estate and its use,
upgrading its built environment and making optimal use of space.
The full White Paper can be found at http://www.ucl.ac.uk/white-paper/provost-whitepaper.pdf
UCL continues to rank among the world's top universities, as reflected in our performance in a
range of rankings and tables. Information about UCL’s position in rankings over the past five
years is shown below:2007
9
N/A
N/A
5
5
6
6
25
Times Higher/QS World Rankings
QS World Rankings
Times Higher World Rankings
The Sunday Times
The Guardian
Complete University Guide (Independent)
The Times Good University Guide
Shanghai Jiao Tong University
2008
7
N/A
N/A
6
7
8
7
22
2009
4
N/A
N/A
4
6
8
5
21
2010
N/A
4
22
4
5
9
7
21
2011
N/A
7
17
7
5
7
5
20
Financial Results for the year ended 31 July 2011
UCL’s summary consolidated Income and Expenditure results for the year ended 31 July
2011 are shown in the table overleaf.
The results for the year show a continuation of the improved financial performance the
university is now achieving with a retained surplus of £29m or 3.6% of total income. This
surplus was slightly lower than in 2010 with income up 5.1% and expenditure up 6.1%. This
surplus is in line with the HEFCE requirements to show a surplus in the region of 3% of
income and is needed to fund future investments and give a level of contingency.
The operating surplus (after depreciation but before tax) is slightly down from £30m to £24m
but if a one off grant to the Students Union for the refurbishment of the Lewis’s building of
£3.6m is excluded the results are broadly in line. The financial statements also show a net
profit on disposal of £5.9m mainly arising from the disposal of the former Medical Students
Union building.
4
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
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, tax & minority
interests
Profit on disposal of subsidiary & fixed/tangible fixed assets
Surplus on continuing operations
Transfer (to)/from accumulated income within specific
endowments
Surplus retained within general reserves
2011
£m
775.9
25.7
801.6
(736.6)
(40.8)
(777.4)
24.1
2010
£m
736.7
25.7
762.4
(692.2)
(40.2)
(732.4)
30.0
(0.5)
(1.1)
5.9
29.5
0.7
29.6
(0.5)
0.1
29.0
29.7
Income from the Funding Council was up £2m (1%) at £203m including a fall in teaching grant
of £3m offset by an increase in research funding of £2m. These movements reflect the
removal of the historic buildings allocation (£1.5m), efficiency savings on the teaching grant
and changes to the quality ratings for research funding.
Academic fee income was up £22m (14%) at £172m reflecting increases in student numbers
and fee levels. Tuition fees from full time overseas students now contribute £88m. Income
from research grants and contracts was up £8m (3%) over the previous year to reach £275m.
Research income has increased 3% in the year to £283m with overhead contribution up 11%
at £49m. This indicates that the measures implemented in previous years to encourage and
support research applications going forward continue to deliver benefit in a more difficult
economic environment.
Tuition fees from overseas full time students remain an important source of income. They now
contribute 37% to total teaching funding (HEFCE teaching grant plus total fees and support
grants) against 34% in the previous year.
Expenditure has risen slightly more than income in the year. Staff costs have risen 1.4%
reflecting a 1.4% increase in average staff numbers on the payroll, a very low cost of living
rise in August 2010 and a rise of 1% in research direct costs, 75% of which is staff related.
Recruitment controls remain in place which has slowed the growth in staff costs for the last
two years compared with previous years.
Other operating expenses have gone up £39m (17%) but include the Student Union grant of
£3.6m noted above. Other increases are scholarships and prizes (£5m), and repairs and
maintenance (£11m) in line with agreed strategy.
Capital Expenditure for the year was £93m, an increase from the previous year when it stood
at £37m. £58m related to land and buildings acquisitions, notably the Sainsbury Wellcome
Centre, Queens Square House and the Caledonian Road student residence development.
The improvement in the surplus has followed through to the year end cash position where
cash at the bank and in short term deposits improved to £177m. The value of UCL’s
endowment assets has increased in value by £5m to £73m. Total reserves increased from
£205 million to £235 million.
5
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
OPERATING AND FINANCIAL REVIEW
Financial Outlook
The new university funding arrangements pose significant challenges for UCL. New tuition
fees will reinstate much of the foregone HEFCE teaching grant for undergraduate teaching,
but will in turn generate an absolute requirement to make transformative investments in the
estate, teaching infrastructure and other aspects of the student experience.
Other funding issues will be flat cash funding for research, a cut in the recovery of overheads
on Research Council grants (a reduction of up to £6 million a year by 2012-15), and steadily
rising energy costs, particularly for IT provision. There will be some limited opportunities to
increase income through modest expansion of student numbers where these are not
controlled by the Government. This presently includes postgraduates and international
students, but we anticipate that the restriction on UK-EU undergraduate student numbers will
also be relaxed.
Yet several fundamental uncertainties remain, including:
(1) the extent of residual funding for UK-EU undergraduate programmes in HEFCE
Bands A and B. These are the laboratory and clinical subjects that are central to
provision of the science, technology, engineering and medicine (STEM) subjects. It
remains likely that funding will be reduced in real terms from its present level;
(2) The extent of residual funding for other strategic and vulnerable subjects;
(3) The extent of residual funding for postgraduate taught programmes;
(4) The future of the current cap on UK-EU undergraduate student numbers. The
Government proposes to lift the cap in respect of students with A-levels of at least
AAB or equivalent from 2012-13, and may lower the threshold further in future years;
(5) The clawback of 20,000 student places from across the sector to be reserved for
universities charging £7,500 or less;
(6) The future of London weighting;
(7) The funding of medical students, who presently pay fees for all years of their course,
but this is offset in years 5 and 6 by an NHS bursary which is not guaranteed to rise
to meet the cost of the new fees;
(8) The number of medical students. There may yet be a national cutback, which could
be imposed equally across all medical schools. A quota of 7.5% is still imposed on
international student participation;
(9) The potential knock-on impact for universities from proposed reforms to the National
Health Service;
(10) Potential reductions in HEFCE funding as a response to perceived over-pricing by the
sector as a whole;
(11) The impact on the student loan book and increased risk of default in loan repayment
from higher fees. This could result in less money being channelled into research;
(12) The future of capital funding, where UCL faces a reduction of over 60% in the annual
HEFCE allocation with effect from 2012.
UCL must generate and sustain sufficient surplus and cash balances to meet its future
investment needs, particularly in light of the reductions in HEFCE income and capital funding.
Future annual budgeting and planning processes will emphasise financial sensitivity to key
risks. UCL's financial forecasts to 2013-14 accept that continued investment in the estate and
infrastructure is key to its future sustainability, and assume that £55 million will be committed
to commencing implementation of the estates Masterplan over the two years 2012-2014 in
addition to maintaining the £36 million currently committed to capital expenditure. UCL
intends to invest an additional £2 million a year in research computing from 2011-12 and a
further £2.5 million a year in other research infrastructure from 2012-13.
6
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
OPERATING AND FINANCIAL REVIEW
Pensions - Actuarial Valuations
USS, SAUL and the NHS pension schemes are all multi-employer schemes and therefore
UCLs share of their assets and liabilities are not disclosed on the UCL balance sheet.
In October 2011 USS announced that if the proposed assumptions for the scheme’s technical
provisions were adopted they would reveal a funding deficit in the scheme as at 31 March
2011 of approximately £2.9 billion. USS has pointed out that the assumptions have been
proposed on the basis that the covenant provided to the scheme by participating employers is
a robust one. The USS Board is required to make an assessment of covenant strength for an
actuarial valuation and it has appointed an independent adviser to provide a report and
opinion on the covenant. This may affect any final outcome in the event that the assessment
is different to the working assumption which has been adopted. Member institutions have
been asked to comment on the proposed assumptions. The final valuation is expected
towards the end of 2011. UCL scheme members represent just under 4% of the total
membership.
The declaration of a funding deficit would require the USS Board to implement a formal
recovery plan, which itself must be consulted upon with member institutions. At this stage
there have been only preliminary discussions on the form of any potential recovery plan and
USS Board’s view is that the consultation on the technical provisions should first be
completed before recovery plan proposals are finalised and in due course consulted upon.
Any recovery plan will have implications for UCL which will have to be factored into future
financial plans.
The SAUL pension scheme is also finalising its valuation for March 2011 which is expected to
show a small deficit under the technical provisions. No further information is available at
present.
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 detailed 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
forms 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.
However, a university has a much broader charitable purpose than just advancing education
and a wide range of activities undertaken at UCL in the past twelve months support this
broader public benefit.
7
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
OPERATING AND FINANCIAL REVIEW
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 around 24,000 students at both undergraduate and
postgraduate levels. 34% of UCL students come from outside the UK, attracted from nearly
140 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, which 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, has been rolled out across all UCL
departments. In line with our Access Agreement UCL has continued to set aside £5m to
provide enhanced bursaries for students from low income families and to support outreach
activities.
UCL's outreach activities have also been expanded. These 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 diverse 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.
Other collections are primarily for teaching and research but can be seen and studied by
appointment.
The Petrie Museum alone houses an estimated 80,000 objects, making it one of the greatest
collections of Egyptian and Sudanese archaeology in the world. It illustrates life in the Nile
Valley from prehistory through the time of the pharaohs, the Ptolemaic, Roman and Coptic
periods to the Islamic period.
The Grant Museum was closed for the first half of this academic year, to move to a new home
in the Rockefeller Building. The reopening generated a huge amount of positive press
coverage and a great increase in visitor numbers. The museum runs an innovative public
events programme, with expert talks, classic film nights and family activities during school
holidays, all of which enhance people’s understanding of subjects linked to zoology.
In the past year, the three Museums had a total of twenty five thousand visitors.
Through their schools programmes the Museums have worked with about three thousand
Primary school pupils and five hundred Secondary school pupils in the past year. The
Museums run workshops at UCL and visit classes in schools with objects for pupils to handle.
8
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
OPERATING AND FINANCIAL REVIEW
UCL Museums put on twelve exhibitions during the past year. These included the very
popular ‘Ink’ in the North Lodge and a showcase of artists-in-residence work in the Wilkins
Building.
This is the third year of UCL Museums Heritage in Hospitals project, in which staff take
museum objects into hospitals to be handled by patients at their bedsides. The project has
been carrying out research into how this type of activity affects health and wellbeing and
following a large amount of research, findings are now being disseminated through
publications and training events around the country. During the year the project won an award
from the Royal Society for Public Health.
Improving public policy
One key way that UCL can ensure that its research benefits everyone's lives is by helping to
improve the development of public policy. The first UCL Public Policy Strategy was
introduced, presenting UCL as a source of evidence-based solutions in policy areas of both
immediate and long-term concern.
UCL will work with government at all levels, as well as with non-governmental organisations,
think-tanks and others, to identify and respond to public policy needs. Through the institutionwide UCL Public Policy programme, the university will build 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.
Public policy events and working papers, drawing on cross-disciplinary expertise, will be
produced on a regular basis and disseminated effectively. Among UCL Public Policy's initial
activities were:
the publication of climate change briefings to the Secretary of State for Energy &
Climate Change, relating in particular to governance, planning and low-carbon
innovation;
public events on Is the Alternative Vote Worth Voting For? and Evidence-Based
Policy: From development to delivery;
published commentaries on the 2011 Budget, the European Court of Human Rights,
multiculturalism and green transport;
contact with and briefings for government, parliament, Chief Scientific Advisors etc
pilot part-time policy secondments with Government Office for Science and the
Royal Society’s Science Policy Centre;
engagement with think-tanks and other bodies.
Student Volunteering
UCL has a well-established culture of student volunteering. Annually, around 1400 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. Among the 50 projects are: the
Refugee Project, which brings UCL volunteers together with refugees and asylum seekers to
build confidence through mentoring and group activities; VIBE, a befriending scheme for
people with visual impairments; Meduccate, where UCL medical students run interactive
medical and health related workshops in primary schools. The VSU also promotes one-off
volunteering, involving students in fundraising activities, community festivals, conservation
projects and other events across London.
UCL contributes to Camden Shares, a resource sharing scheme
(http://uclu.org/volunteers/camdenshares). Through this, UCL has opened up access to our
spare room capacity out of term time to community organisations.
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UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
OPERATING AND FINANCIAL REVIEW
The advancement of health or 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 a
an academic health sciences system, 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. For example, the introduction of a new
cross-sector model of care for acute stroke has reduced mortality to below 10% in North
Central London, against a 22% national average. Also, the “Open Eyes” project, developed in
collaboration with Moorfield’s Eye Hospital and the Institute of Ophthalmology, extends the
application of a ground-breaking, clinically-driven electronic patient record which can be
owned by the patient.
Operations
School of Pharmacy
The School of Pharmacy is an independent college of the University of London located
nearby, in Brunswick Square. Its Council decided last year to open discussions with UCL
about a possible merger and in May 2011 they resolved to proceed with merger. There are
very considerable potential benefits arising from this merger. There is great complementarity
in the interests of both institutions which makes the alliance mutually beneficial. UCL will be
building on existing collaborations to establish a major pharmacy research base at UCL of
international renown. Subject to completion of further steps, it is anticipated that the full
merger will take effect from early 2012.
Partnerships, Collaborations and New Initiatives
There has been significant progress on the UK Centre for Medical Research and Innovation
which was renamed in May 2011 as the Francis Crick Institute. Planning permission was
granted by the London Borough of Camden for this development shortly before Christmas
2010, construction started in June 2011 and the building will open in 2015. In the meantime,
work is commencing on developing the science strategy for the Crick, and for the
establishment of a Virtual Institute in advance of the building opening. This would help
facilitate the ultimate merger of the two core operations, the Medical Research Council’s
(MRC) National Institute for Medical Research (NIMR) at Mill Hill, and Cancer Research UK’s
(CRUK) London Research Institute, currently located in Lincoln’s Inn’s Fields.
Originally funded by MRC, CRUK, the Wellcome Trust and UCL, in October 2011 Imperial
and King’s signed an accession agreement to become new partners. This will help in
developing the full academic potential of the Crick in the national interest, as well as reducing
the level of UCL’s capital contribution. UCL's participation remains unique, as a Founding
Partner, as the co-located university and as a contributor not only from the perspective of
biological and medical science but also physical sciences and engineering. The success of
the Crick will depend on all the scientific partners working in close collaboration.
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In April 2011 UCL joined the GSK Clinical Imaging Facility at Hammersmith. It is a unique
partnership, in which UCL join the MRC, Imperial and King’s as equal shareholders in a newly
created joint venture that assumes responsibility for the facilities and operations at GSK’s
Clinical Imaging Centre (CIC): The £47m centre on Imperial College London’s Hammersmith
Hospital campus has carried out GSK-dedicated research in close collaboration with
academic researchers since it opened in 2007. Under the new arrangements, the research
and technical expertise of the four partners will help to drive the centre into new areas and
applications of imaging.
A Memorandum of Understanding between UCL and the Changsha-Zhuzhou-Xiangtan City
Cluster (CZT) comprising 8 major cities and 65 million people and Central South University
Business School (CSU) – both based in Hunan Province was signed in November 2010.
The UCL Bartlett Faculty of the Built Environment will bring their world-class expertise in
digital spatial master-planning into combination with CSU’s leading experts in economic
enterprise modelling to create a much more powerful and iterative tool for predicting, shaping
and monitoring the region’s future growth and prosperity.
The Sainsbury Wellcome Centre (SWC) for Neural Circuits and Behaviour is to be a major
new research centre at UCL. It is funded jointly by the Gatsby Charitable Foundation and the
Wellcome Trust. SWC neuroscientists will use state-of-the-art molecular and cellular biology,
imaging, electrophysiology and behavioural techniques, supported by computational
modelling, to find out how brain circuits process information to create neural representations
and guide behaviour. An interim director will lead the project through the current planning
phases, including the design of the facilities, the recruitment of the new permanent director
and the identification of outstanding scientists and groups to join the Centre.
The UCL Bloomsbury Project held its final conference in April 2011. The three-year
Leverhulme-funded project has studied the evolution of Bloomsbury from marshy waste
ground in 1800 to London’s intellectual and cultural centre by 1904. The associated website
gives information on the development of over 400 streets and squares, on the Bloomsbury
connections of over 100 individuals, and on the founding of over 300 reforming institutions:
educational, cultural, artistic, scientific, and medical. Where archives exist for these
institutions, they are described, so that the website will be a resource for scholars as well as a
repository of information for a wide variety of users.
During Spring 2011 UCL worked with YouGov and StartUp Britain and in collaboration with
Imperial College London, to lead the development of a pilot “StartUp Summer” scheme to
stimulate, encourage and support student entrepreneurs. The initiative is part of a package of
support for new entrepreneurs launched by Prime Minister that will offer students the
opportunity to develop their own innovative, business ideas into actionable, start-up business
plans. The programme will be open to UCL and Imperial students with a view, in future years,
to extending the programme to the national student body. During the summer of 2011, the
students had ongoing access to university resources, a project budget and regular contact
with entrepreneur mentors. At the end of the summer, teams had an opportunity to present as
a team in a “Dragons’ Den” style environment to real investors who can provide valuable
critical, but also constructive feedback and guidance.
In June 2011 UCL signed an agreement with BHP Billiton under which they will provide UCL
with US$10 million over a five year period to establish an Institute for Sustainable Resources
in London, and an International Energy Policy Institute in Adelaide, Australia, as part of our
existing School of Energy and Resources, Australia (UCL SERAus). The donation will also
fund academic research, fellowships and scholarships, and new Chairs in Sustainable Global
Resources and in International Energy Policy. The two new institutes will drive research into
the complex economic, legal, environmental, technological and cultural issues faced by the
resources sector and provide a framework within which expertise from the northern and
southern hemispheres can be shared and innovative responses developed.
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Following the agreement signed in October 2010 between UCL, Qatar Foundation for
education, science and community development and the Qatar Museums Authority work has
now started on developing the campus Doha, Qatar with the intention of teaching
programmes starting in 2012. In addition, work is progressing on the transfer of several
research programmes from London to Doha.
In Kazakhstan, UCL continues to deliver foundation year courses to high ability students
together with providing consultancy to the School of Engineering at Nazarbayev University in
Astana.
Education and Learning
UCL's strategic goal of placing all its educational offerings within a framework of Education for
Global Citizenship has been taken forward actively over the past year. All UCL academic
departments are now expected to develop an international dimension to their curricula and
are encouraged to ensure that all students explore their subject from an international
perspective.
The Centre for the Advancement of Learning and Teaching (CALT) has been restructured.
CALT’s mission is now to enhance the student learning experience through giving direct
support and advice to the Schools as they take forward their strategic aims in teaching,
learning and assessment. CALT will also provide scholarship-informed advice on key issues
in teaching and in pedagogy and teaching associated activities.
UCL has recently finalised a teacher training agreement with the Institute of Education (IoE),
whereby IoE will provide teacher training and higher professional education to UCL’s
probationary lecturers and other academic and teaching staff. This further strengthens UCL’s
developing strategic relationship with the IoE.
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 partners (so far in Australia, Hong Kong and the USA). Funding was this
year also provided on a competitive basis to Provost’s Teaching Award winners to undertake
fact-finding visits to chosen overseas universities to establish closer partnership in innovation
in education.
Plans for the UCL Academy have advanced considerably and a Principal has been appointed.
Work on the building is well under way, and the pedagogical vision for the Academy has been
communicated throughout Camden and beyond. Considerable work has also been done on
the innovative curriculum. The UCL Academy will open in September 2012 with 180 students
in Year 7 and 125 students in the first year of the Sixth Form. It will grow year on year until it
reaches its full capacity in September 2015.
Research
The UCL Vice-Provost (Research) launched the proposed 2011 UCL Research Strategy &
Implementation Plan, Delivering a Culture of Wisdom, for consultation. The strategy's basis is
that the collective expertise of the whole of UCL is greater than the sum of its subject-specific
parts, so that by collaborating across disciplines the university can address major problems
most effectively.
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The delivery of this research strategy over the next five years – building on what has been
accomplished through the 2008 UCL Research Strategy – will depend on the university's
ability to:
continue to foster excellence in discipline-based research;
expand the distinctive cross-disciplinarity of its research, collaboration and partnerships;
increase the impact of its research, locally, regionally, nationally and internationally.
Excellence
Excellence in discipline-based research is a prerequisite for the delivery of UCL's research
vision. Independent assessment continued to recognise UCL’s strengths as a world-leading
research-intensive university; for example, Essential Scientific Indicators ranked UCL the 15th
most highly cited university in the world over an eight-year period.
Cross-disciplinarity
UCL's cross-disciplinary capability was further enhanced by the foundation of thematic
centres and networks, each bringing together a variety subject-specific expertise in order to
address major problems with more sophistication. These included the UCL European
Institute, the UCL Computational Life & Medical Sciences Network, the UCL Civilisation(s)
Network, the UCL Centre for Advanced Biomedical Imaging and the UCL Novel Therapies
Network. The scope for cross-disciplinary collaboration was also expanded by a partnership
with the Institute of Zoology and forthcoming merger with the School of Pharmacy.
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 – Population Footprints, the 2011 UCL–Leverhulme Trust symposium on
human population growth and global carrying capacity. The symposium brought together
more than 300 delegates and speakers, with academics, NGOs and activists representing
33 countries;
Sustainable Cities – the launch of the UCL London 2062 Commission, which aims to
gather evidence about the forces and factors that will shape the London of five decades
from now. This process involved synthesising the diverse expertise within the academic
community at UCL and elsewhere, together with London’s citizens, government,
professions, artists, media and other public institutions;
Intercultural Interaction – Migration Week, comprising a series of lectures, panel
discussions, conferences and exhibitions, which explored migration from a number of
academic perspectives. The week culminated in Economic Change, Social Challenge, a
major conference bringing together about 300 scholars from subject areas including
economics, sociology, psychology, demography, anthropology, education, geography,
political science and development studies;
Human Wellbeing – The Future of Healthcare in Europe, a conference bringing together
expertise from academia, government, public policy institutes, think-tanks and the third
sector from across Europe. It aimed to define the major health challenges that Europe
faces and explored ways in which different European countries were responding to them.
Impact
The impact of UCL research is manifest across five broad channels, each of which was
enhanced significantly in 2010/2011:
scholarly outputs – UCL Discovery was launched, as an online resource providing details
of more than 200,000 UCL research outputs, with open access to more than 6,000 full text
items;
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public engagement – the first UCL Public Engagement Strategy was established, and a
commitment made to continue the Beacon public engagement initiative, in partnership with
Arts Catalyst, Birkbeck College, the British Museum, the Cheltenham Festivals, City &
Islington College and the Southbank Centre;
translational research – the Office of the Yale UCL Collaborative was established, to
support the alliance between both the universities and their partner hospitals, the aims of
which include facilitating rapid translation of basic science into practical new therapies,
improving clinical research and clinical care;
public policy – the first UCL Public Policy Strategy was introduced, to build on existing
connections between academics and policymakers, enabling external agencies to identify
sources of evidence-based policy solutions and UCL to anticipate better and respond
swiftly to emerging policy issues.
A key risk for UCL is that the university fails to prepare properly for the next Research
Excellence Framework (REF). HEFCE have made numerous changes to the previous
Research Assessment Exercise (RAE) system in creating their new REF, to which UCL must
make a submission in November 2013, which will both strongly influence 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 RAE, accounting for 20% of the total score. Work
has already started to ensure that UCL submits as strong a submission as possible including
detailed timetables and action plans.
Enterprise
During the year a new Enterprise strategy for UCL for the next five years was published
http://www.ucl.ac.uk/enterprise/enterprise-spotlight/enterprise-strategy. Specific enterprise
activities have been designed to ensure effective knowledge exchange between UCL’s
academic community and the wider world. UCL is committed to inculcating a spirit of
enterprise across the university, so that the creativity, resourcefulness and dynamism of UCL
is encouraged and supported for the benefit of our teaching and research activities.
Enterprise activities at UCL include the following: education and training in entrepreneurship;
social enterprise; corporate partnerships; industrially-related and translational research;
commercial research contracts; consultancy; continuing professional development; student
businesses; commercialisation of intellectual property through spin-out companies; and
licensing and product development.
The five core aims of the strategy are:
1. Create a highly effective structure of support for enterprise activities at UCL;
2. To become the leading UK University supporting university entrepreneurs;
3. To ensure that enterprise is embedded across the breadth of academic activities;
4. To become the UK leader in collaboration with external enterprises; and
5. To maximize the societal impact of UCL enterprise activities by effective publicity.
Students
Student numbers for 2010-11 far exceeded expectations and reached a total of 24,077, an
increase of 1,449 or 6.4% on 2009-10. The total is divided between undergraduates and
postgraduates in the ratio 57:43 compared with 60:40 three years ago. International students
account for 26% of the total student population and a similar pattern exists at undergraduate
and postgraduate level.
The largest percentage increase over last year was in research postgraduate student
numbers which reflects UCL’s success in winning Doctoral Training Centre awards and also
the introduction of the UCL IMPACT studentship scheme. The IMPACT studentship scheme
provides matched funding to provide a full 3 or 4 year fees plus stipend studentship where
50% external funding contribution can be secured, and in its first year 135 research
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postgraduate students were supported in this way. In total, UCL’s research postgraduate
student numbers went up by 494 over 2009-10, an increase of 14.7%. There was also a
further expansion in postgraduate taught student numbers, particularly in international
students where a 9.6% increase in 2010-11 has taken the increase over the last three years
to over 46%.
With respect to full-time undergraduate students, UCL was again 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 quota by 314
or 3%. Actual recruitment of international undergraduate students also increased by a further
14.6% or 447 students to take the total number of international undergraduates to just under
3,500 in 2010-11 and an increase of 38% over the last three years.
Staff and Their Involvement
Over the past year UCL has continued to implement strategies to increase the diversity of
staff who contribute to the achievement of the institution’s objectives. A UCL-wide Race
Equality Group was established as a consultative body and source of expertise on race and
ethnicity; a new Equality Champions Network was launched to ensure that there is visible
leadership on equalities and diversity; and UCL's first Diversity Month programme of events
was held, which consisted of a number of thought-provoking discussions. The year also saw
the launch of UCL's first overarching Equalities and Diversity Strategy, approved by Council
towards the end of the reporting period.
UCL has continued its work with unions and managers to gain commitment for promoting
wellbeing at work together. UCL has invested in the health and wellbeing of staff through the
re-investment in an Employee Assistance Programme and the introduction of physiotherapy
services to tackle the main causes of sickness absence and work relevant ill health. There
has been a 5% reduction in sickness absence related to musculoskeletal disorders over the
reporting period. Average sickness absence rates at UCL were relatively low at 2.6 days per
person per annum.
A new performance rating process was introduced for all Professors, linked to the full
implementation of an innovative online appraisal system bringing performance information
from a number of existing UCL record systems. A programme of workshops was undertaken
to support performance management across UCL. Two new courses were developed:
‘Getting the best out of people’ and ‘Dealing with difficult conversations’ to support
improvements to our performance management framework and in response to feedback from
the staff survey.
During the year there continued to be significant review and restructure of a number of
Professional Services divisions to improve service delivery and ensure efficiency. To ensure
UCL met its obligations as an employer and to better support staff, a new outplacement
advisory service was established. The redeployment process was also revised to enable staff
to have every opportunity to be redeployed across the organisation, consequently minimising
the number of redundancies.
Estates
The estate plays a vital role in the creation of a UCL sense of identity and place and
contributes to UCL’s world-class educational and research experience. It is also the
Institution’s most valuable financial asset and one of its biggest costs. With such an important
role, the estate has to be fit for purpose, efficiently and effectively support the academic
mission of the institution, and be effectively utilised and environmentally sustainable.
The Estate Strategy is subject to an ongoing comprehensive review. Following completion of
a thorough utilisation study last year, a new Masterplan for the Bloomsbury Campus was
commissioned in June 2010. The Masterplan team, led by the architectural practice Lifchutz
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Davidson Sandilands has worked throughout the year, engaging with academics, support
staff and students. In July 2011, UCL Council approved the Bloomsbury Masterplan, the
centerpiece of the emerging new Estate Strategy, a long term and flexible framework for the
improvement and development of the Bloomsbury estate for the next ten years and beyond.
The plan sets out a series of cohesive and complementary strategies to guide change and
improvement to the campus in future. A substantial investment programme resulted, which in
the first 3 years to 2013-14 is likely to amount to over £100 million.
The Sainsbury Wellcome Centre, a partnership between the Gatsby Charitable Foundation
and the Wellcome Trust to establish a new Research Centre in Neural Circuits and Behaviour
at UCL has been committed during the year and will open in 2014. This will comprise a
14,000 square metre building on the site of the former Windeyer Building on Howland Street,
now being demolished. During the year many projects have been completed to rehouse
occupants of the Windeyer Building across other parts of the estate.
A substantial number of major estates projects have been completed during the year. A
sample includes the Darwin Building refurbishment for the Faculty of Life Sciences, including
a major upgrade of one of UCL’s premier lecture theatres; a major refurbishment and
reconfiguration of the Lewis’s Building on Gower Street to create a new Student Union
building including café, bars, nightclub and offices; refurbishment of the recently acquired
Central House to create offices and teaching space for The Bartlett and Corporate Support
Services; refurbishment of the Thomas Lewis Room in the Rockefeller Building as the new
home of The Grant Museum.
A multifaceted property transaction was completed during the year with the UCL Hospitals
Trust. This included the transfer of the former Medical Students Union building at Huntley
Street to the Trust and UCL acquiring the freehold ownership of Queen Square House, the
home of the Institute of Neurology. This is an important acquisition for UCL providing long
term security and flexibility to improve the facility.
UCL acquired a new student residence development at Caledonian Road Islington during the
year providing 350 new bedrooms to be completed in 2013.
Development and Alumni Relations (DARO)
DARO has undergone a number of significant changes in the last year including a split from
its old single team with corporate communications, to two separate, but co-located teams. In
February a new DARO Director arrived and one of the first tasks has been to set out a clear
direction and plan for future fundraising, with this in mind, DARO developed the following
mission statement:
To significantly increase philanthropic support to UCL in keeping with its position as a world
leading centre of learning and research; to work closely with the academic community to
ensure that our fundraising and alumni activities fully reflect the strategic priorities of UCL; to
ensure that we have a supportive body of alumni and friends with whom UCL has mutually
beneficial relationships; to develop a fundraising and alumni relations operation that is
internationally recognised as a centre of professional excellence in the sector.
Funding has been secured for a number of projects across UCL including the successful
campaign for the Lewis’s building, which raised over £1.3million. In the next year relationships
with departments and teams across UCL will be strengthened and work undertaken with
academic leader to identify funding priorities.
For the third year running UCL's Annual Fund has generated over £500,000 in income, which
each year is used to support scholarships, research and the work of departments across
UCL. A key part of this success is the role of current UCL students who phone UCL alumni to
encourage them to give back to their alma mater. The most recent campaign finished in
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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 CUC’s 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 2011 meeting, the Council will carry out an annual assessment for the year
ended 31 July 2011 by considering a report from the Audit Committee, and taking account of
events since 31 July 2011. 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 2011, 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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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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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;
20
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
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.
21
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF THE COUNCIL OF
UNIVERSITY COLLEGE LONDON
We have audited the financial statements of University College London year ended 31 July
2011 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 38. 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 the financial
memorandum effective August 2010. Our audit work has been undertaken so that we might
state to Council 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 Council and auditor
As explained more fully in the Council’s Responsibilities Statement, the Council 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 Council; 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:
give a true and fair view of the state of the University and Group’s affairs as at 31 July
2011 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 2011 have been applied
for the purposes for which they were received; and
22
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
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 17.
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
24
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
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 are also made to two smaller schemes, the Federated Pension Scheme (FPS)
and the Royal Free Hospital School of Medicine Pension and Assurance Scheme (RFHSM)
both of which are closed to new members.
All are defined benefit schemes. The USS, SAUL and the NHS Pension Scheme are multiemployer 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.
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.
25
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
The FPS 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 FPS and RFHSM schemes are funded, with the assets of the schemes 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
valuations are obtained at least triennially and are 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. 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.
26
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
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.
9. 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
10. 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.
11. 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.
12. 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.
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.
27
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
13. 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.
14. 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.
15. 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.
16. 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 and endowment
cash balances.
17. 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.
28
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
CONSOLIDATED INCOME AND EXPENDITURE
ACCOUNT YEAR ENDED 31 JULY 2011
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
15
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)/profit in joint ventures
Share of operating loss in associates
Taxation
Share of taxation in associates
15
16
10
16
SURPLUS AFTER DEPRECIATION OF ASSETS AT COST
AND TAX
Minority interest
26
SURPLUS BEFORE EXCEPTIONAL ITEMS
Exceptional items: continuing operations
(Loss)/profit on disposal of fixed asset investments
Profit on disposal of tangible fixed assets
SURPLUS ON CONTINUING OPERATIONS AFTER
DEPRECIATION OF ASSETS AT COST, DISPOSAL OF
ASSETS AND TAX
(Surplus)/deficit for the year transferred to accumulated
income in endowment funds
SURPLUS FOR THE YEAR RETAINED WITHIN GENERAL
RESERVES
2011
£'000
2010
£'000
203,346
172,165
283,383
138,286
5,225
200,995
150,555
275,061
133,801
5,004
802,405
765,416
(848)
(3,032)
801,557
762,384
449,012
280,686
6,960
40,762
442,666
242,086
7,325
40,284
777,420
732,361
24,137
30,023
(226)
(342)
(9)
41
56
(325)
(11)
(1)
23,601
29,742
11
(895)
23,612
28,847
(74)
5,938
738
-
29,476
29,585
(532)
70
28,944
29,655
11
24
The consolidated income and expenditure of the Group relates wholly to continuing activities.
29
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
STATEMENT OF GROUP HISTORICAL COST
SURPLUSES AND DEFICITS
Note
2011
£'000
2010
£'000
29,485
29,596
550
550
Historical cost surplus for the year before taxation
30,035
30,146
Historical cost surplus for the year after taxation
30,026
30,135
2011
£'000
2010
£'000
17
29,476
5,931
29,585
5,357
17
24
(192)
1,614
1,817
3,610
-
(81)
213
2,407
1,105
383
2,359
(300)
40,554
42,730
RECONCILIATION TO CLOSING RESERVES AND
ENDOWMENTS
Opening reserves and endowments
Total recognised gains for the year
292,266
40,554
249,536
42,730
Closing reserves and endowments
332,820
292,266
Surplus on continuing operations before taxation
Difference between historical cost depreciation and the actual
charge for the year calculated on the re-valued amount
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)/gain from sale of endowment asset
investments
Net endowments received in year
Adjustment to income and expenditure reserve for previously
unconsolidated associates
Adjustment to income and expenditure reserve for change in
percentage holdings in associates
Unrealised gain on revaluation of fixed asset investments
Actuarial gain/(loss) in respect of pension schemes
30
25
Note
14
36
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
CONSOLIDATED CASH FLOW STATEMENT
Note
2011
£'000
2010
£'000
Net cash inflow from operating activities
29
45,833
86,804
Returns on investments and servicing of finance
31
(2,377)
(2,461)
Taxation
10
(9)
(11)
Capital expenditure and financial investment
32
(33,907)
(12,873)
Acquisitions and disposals
33
(1,230)
(70)
8,310
71,389
Cash inflow before use of liquid resources and financing
Management of liquid resources
30
(3,903)
(51,324)
Financing
34
(1,189)
(1,226)
3,218
18,839
Increase in cash in the period
Increase in deposits repayable at short notice
Decrease in debt
3,218
3,903
1,188
18,839
51,324
1,226
Change in net funds
8,309
71,389
93,642
22,253
101,951
93,642
Increase in cash in the year
RECONCILIATION OF NET CASH FLOW TO MOVEMENT
IN NET FUNDS
Net funds at 1 August 2010
Net funds at 31 July 2011
33
30
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
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
2011
£'000
2010
£'000
65,849
107,102
12,443
68,649
104,937
10,014
11,554
6,398
9,274
8,121
203,346
200,995
2011
£'000
2010
£'000
52,505
87,880
9,173
7,053
7,480
8,074
47,133
73,946
8,168
7,331
6,607
7,370
172,165
150,555
2011
£'000
2010
£'000
104,683
84,517
38,256
11,336
23,645
3,661
16,771
514
101,256
86,886
34,138
12,029
20,153
2,933
15,925
1,741
283,383
275,061
237,486
45,897
231,156
43,905
283,383
275,061
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 £7,742,000 (2010 £8,285,000).
34
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
4. OTHER OPERATING INCOME
Residences and catering
Other services rendered
Health authorities
Donations and sundry grants
Released from deferred capital grants
Other income
Share of joint venture income
2011
£'000
2010
£'000
26,442
41,764
35,777
10,618
3,326
19,516
843
23,185
33,909
36,994
14,239
3,663
18,790
3,021
138,286
133,801
Income from residences and catering includes deferred capital grants released in the year of
£130,000 (2010 £41,000).
5. ENDOWMENT AND INVESTMENT INCOME
Note
2011
£'000
2010
£'000
Income from expendable endowments
Income from permanent endowments
Other interest receivable and investment income
Share of joint venture income
24
24
1,762
304
3,154
5
2,165
362
2,466
11
5,225
5,004
2011
£'000
2010
£'000
369,410
30,590
49,012
364,770
30,987
46,909
449,012
442,666
2011
£
2010
£
276,710
16,664
44,281
302,326
15,453
47,352
337,655
365,131
6. INFORMATION REGARDING EMPLOYEES
Staff costs:
Salaries and wages
NI contributions
Other pension costs
Note
36
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.
There were no payments to higher paid employees in respect of compensation for loss of office
during the year (2010 £50,095 to one employee).
No trustee has received any remuneration from the group during the year (2010 £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 £193 (2010 £593 to two trustees).
35
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
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:
2011
2010
No.
No.
£100,001 - £110,000
58
49
£110,001 - £120,000
55
61
£120,001 - £130,000
40
31
£130,001 - £140,000
39
29
£140,001 - £150,000
29
29
£150,001 - £160,000
29
23
£160,001 - £170,000
21
27
£170,001 - £180,000
20
17
£180,001 - £190,000
16
15
£190,001 - £200,000
15
17
£200,001 - £210,000
12
11
£210,001 - £220,000
2
3
£220,001 - £230,000
2
2
£230,001 - £240,000
4
3
£240,001 - £250,000
1
£250,001 - £260,000
£260,001 - £270,000
2
2
£280,001 - £290,000
1
£290,001 - £300,000
1
£310,001 - £320,000
1
£320,001 - £330,000
2
The average number of individuals paid through the payroll during the year was 9,783 (2010 9,638).
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
2011
£'000
2010
£'000
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
12,037
23,500
33,368
7,687
18,359
14,854
8,724
11,548
6,472
6,448
11,655
1,518
1,822
8,000
16,791
10,960
165
78
2,324
7,592
38,184
242,086
In addition to that noted above, other fees paid to auditors of £262k were capitalised during the year.
36
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
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
Realised and unrealised losses on shares held as fixed
assets
Net charge on pension scheme assets and liabilities
36
2011
£'000
2010
£'000
2
3,565
3,321
5
3,641
3,357
72
322
6,960
7,325
9. ANALYSIS OF EXPENDITURE BY ACTIVITY
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
£'000
29,150
11,612
The depreciation charge has been funded from:
Deferred capital grants released
General income
40,762
2010
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
223,839
20,501
128,295
2,773
8,158
27,527
15,204
94,576
12,037
50,365
1,859
3,855
7,589
2,192
8,285
2,658
19,037
258,955
37,897
231,156
19,327
81,415
40,820
18,280
26,086
16,291
1,611
412
111
67,318
36,293
442,666
242,086
7,325
40,284
732,361
£'000
The depreciation charge has been funded
by:
Deferred capital grants released
General income
29,894
10,390
40,284
37
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
10. TAXATION
Taxation charges and credits are in respect of UK corporation tax in
the following subsidiary companies:
2011
£’000
2010
£’000
UCL Trading Ltd
(9)
(11)
Total tax charge
(9)
(11)
2011
£'000
2010
£'000
(75)
1
738
-
(74)
738
6,939
(739)
(262)
-
5,938
-
11. EXCEPTIONAL ITEMS
(Loss)/profit on disposal of fixed asset investments:
(Loss)/profit on disposal of shares held as fixed asset investments
Profit on disposal of interest in investment property
Profit on disposal of tangible fixed assets:
Profit on disposal of 43 Huntley Street
Loss on demolition of Windeyer Building
Loss on disposal of equipment
12. TANGIBLE ASSETS
Consolidated
Cost
At 1 August 2010
Additions at cost
Transfers
Disposals
At 31 July 2011
Depreciation
At 1 August 2010
Charge for year
Disposals
At 31 July 2011
Net Book Value
At 31 July 2011
At 1 August 2010
Freehold
Land and
Buildings
£'000
Leasehold
Land and
Buildings
£'000
Equipment,
Plant and
Machinery
£'000
Assets in the
course of
construction
£'000
Total
£'000
562,795
58,252
2,103
(10,294)
612,856
192,517
16,476
208,993
157,068
11,923
(14,079)
154,912
3,595
6,134
(2,103)
7,626
915,975
92,785
(24,373)
984,387
159,585
18,858
(7,851)
170,592
62,133
6,653
68,786
130,724
15,251
(12,870)
133,105
-
352,442
40,762
(20,721)
372,483
442,264
140,207
21,807
7,626
611,904
403,210
130,384
26,344
3,595
563,533
38
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
UCL
Cost
At 1 August 2010
Additions at cost
Transfers
Disposals
At 31 July 2011
Depreciation
At 1 August 2010
Charge for year
Disposals
At 31 July 2011
Net Book Value
At 31 July 2011
At 1 August 2010
Freehold
Land and
Buildings
£'000
Leasehold
Land and
Buildings
£'000
Equipment,
Plant and
Machinery
£'000
Assets in the
course of
construction
£'000
Total
£'000
562,795
58,252
2,103
(10,294)
612,856
191,350
16,476
207,826
156,230
11,851
(14,063)
154,018
2,103
7,568
(2,103)
7,568
912,478
94,147
(24,357)
982,268
159,585
18,858
(7,851)
170,592
61,724
6,612
68,336
130,138
15,151
(12,857)
132,432
-
351,447
40,621
(20,708)
371,360
442,264
139,490
21,586
7,568
610,908
403,210
129,626
26,092
2,103
561,031
The declared value of buildings for insurance purposes (day one basis) as at 1 August 2011 was
£2.3bn (2010 £2.2bn).
At 31 July 2011, freehold land and buildings included £37.9m (2010 £32.7m) in respect of freehold
land which is not depreciated.
The above includes assets held under finance leases. At 31 July 2011 the net book value of the
assets held under finance leases was £24.6m (2010 £25.3m) with a depreciation charge for the
year of £638,000 (2010 £638,000).
13. 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 2011 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.
39
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
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.
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
40
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
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.
14. INVESTMENTS
Monies held
on long term
deposit
£'000
Other
Investments
£'000
Investment in
subsidiaries
£'000
Total
£'000
Consolidated
At 1 August 2010
Additions
Revaluations
Impairments
Disposals
10,490
826
-
30,762
33,412
2,407
(30,113)
-
41,252
34,238
2,407
(30,113)
At 31 July 2011
11,316
36,468
-
47,784
UCL
At 1 August 2010
Additions
Revaluations
Impairments
Disposals
10,490
826
-
30,103
34,122
2,407
(30,105)
2,012
-
42,605
34,948
2,407
(30,105)
At 31 July 2011
11,316
36,527
2,012
49,855
Included in monies held on long-term deposits is £11.32m (2010 £10.49m) over which there is a
legal charge.
The deposit represents a security fund to meet the obligations under finance leases (Note 20).
Included in monies held on long term deposits is £11.32 million (2010 - £10.49 million) over which
there is a legal charge. The deposit represents a security fund to meet the obligations under
finance leases (Note 20).
Included in other investments is a portfolio of fixed interest securities, equities and cash
(£28,612,000), investment properties (£765,000), shares in UKCRMI Limited (£6,077,000) and
shares in other limited companies and partnerships (£1,014,000), 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.
15. INVESTMENTS IN JOINT VENTURES
The UCL group has interests in the following joint ventures:
(a)
Bio-Nano Centre Limited is a joint venture company of Imperial College London (ICL) and
UCL. 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 2011 are
included.
41
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
(b)
EuroTempest Limited is a joint venture company of Benfield, Royal & Sun Alliance and UCL
Business pc. 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 2010 plus management
accounts to 31 July 2011 are included.
(c) UKCMRI Construction Ltd has been established to manage construction of the UK Centre for
Medical Research and Innovation. During the year control of UKCMRI Construction Ltd passed
to UKCMRI Ltd, a company in which UCL held an interest of 7.324% at 31 July 2011.
(d)
Imanova Ltd is a joint venture company of UCL, Imperial College London (ICL), Kings College
London (KCL) and The (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 2011 are included.
The Group’s interest in Interbiomedica Ltd was disposed of during 2009/10.
These joint venture investments are disclosed in the financial statements as follows:
Share of income:
Bio-Nano
EuroTempest
UKCMRI
Imanova
Share of operating (loss)/profit:
CSE
Bio-Nano
EuroTempest
Interbiomedica
UKCMRI
Imanova
Share of gross assets:
Bio-Nano
EuroTempest
UKCMRI
Imanova
Share of gross liabilities:
Bio-Nano
EuroTempest
UKCMRI
Imanova
Share of reserves:
Bio-Nano
EuroTempest
UKCMRI
Imanova
Purchase of investments in joint ventures
Imanova
42
2011
£'000
2010
£'000
782
66
-
864
94
2,074
-
848
3,032
(30)
(3)
(2)
(191)
(204)
196
26
36
2
-
(226)
56
567
47
592
721
42
7,830
-
1,206
8,593
(401)
(17)
(33)
(525)
(9)
(7,828)
-
(451)
(8,362)
166
30
559
196
33
2
-
755
231
750
-
750
-
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
16. INVESTMENTS IN ASSOCIATES
The UCL group has interests in the following associate companies:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
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 2011 are included.
47% holding in Canbex Therapeutics Ltd. 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 2011 are included.
30.1% holding in Domainex Ltd. 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
2011 plus management accounts to 31 July 2011 are included.
34.8% holding in Multilyte Ltd. The principal activity of he 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 2011 are included. The directors have given
assurance that there are no material transactions up to 31 July 2011.
27.9% holding in ordinary shares of Bloomsbury DSP Limited. 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 plus management accounts to
31 July 2011 are included.
40.0% holding in ordinary shares of Senceive Limited. The company provides information
delivery services and products to industry. The company prepares accounts to 31 October,
and accounts to 31 October 2010 plus management accounts to 31 July 2011 are included.
29.3% holding in ordinary shares (12.3%) and preference shares (17%) in Genex
Biosystems Limited. The shares carry equal voting rights. The principal activity of the
company is life sciences research and development. The company is in liquidation.
20% holding in NP Complete Ltd. The company is developing a software environment
suitable for solving complex optimisation problems in applications ranging from integrated
circuit design through to finance. The company prepares accounts to 30 November, and
accounts to 30 November 2010 plus management accounts to 31 July 2011 are included.
39.0% holding in Endomagnetics Ltd, increased from 35.5%. The company develops
medical devices. The company prepares accounts to 30 April, and accounts to 30 April
2011 plus management accounts to 31 July 2011 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 2011 plus management accounts to 31 July 2011
are included.
47.75% interest in Abcodia Ltd. The company develops biomarkers. The company prepares
accounts to 31 July, and accounts to 31 July 2011 are included.
43
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
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
Genex Biosystems Ltd
NPComplete Ltd
Endomagnetics Ltd
UCL Partners Ltd
Abcodia Ltd
Share of taxation:
Domainex
Senceive Ltd
UCL Partners Ltd
Share of net assets/(liabilities):
Pentraxin Therapeutics Ltd
Canbex Therapeutics Ltd
Domainex Ltd
Multilyte Ltd
Bloomsbury DSP Ltd
Senceive Ltd
Genex Biosystems Ltd
NPComplete Ltd
Endomagnetics Ltd
UCL Partners Ltd
Abcodia Ltd
Purchase of investments in associates:
Senceive Ltd
Endomagnetics Ltd
Abcodia Ltd
44
2011
£'000
2010
£'000
76
(88)
(57)
7
(79)
5
(214)
(1)
9
268
(63)
(178)
(47)
(110)
(57)
(7)
(136)
5
-
(342)
(325)
37
4
-
(1)
41
(1)
(89)
(389)
392
67
1
(148)
(9)
(96)
3
498
(165)
(301)
412
60
1
(12)
(59)
(14)
(17)
4
-
230
(91)
230
250
57
-
480
57
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
17. ENDOWMENT ASSET INVESTMENTS (Consolidated and UCL)
2011
£'000
2010
£'000
At 1 August 2010
67,884
57,170
Net purchase of investments
Net realised (loss)/gain from sale of investments
Increase in market value of investments
(Decrease)/increase in cash balances held for endowment funds
4,827
(192)
5,931
(5,769)
1,522
1,817
5,357
2,018
At 31 July 2011
72,681
67,884
Represented by:
Fixed interest securities and equities
Cash
68,843
3,838
58,277
9,607
Total endowment asset investments
72,681
67,884
Endowment assets at cost
68,236
64,121
18. DEBTORS
Consolidated
2011
2010
£'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:
Other debtors and prepayments
Loans to associate companies
9,898
81,800
22,441
397
3,382
23,667
7,926
92,593
20,578
354
3,590
8,906
22,056
7,580
81,800
22,441
397
3,370
11,562
21,334
347
1,377
327
-
1,377
-
151,861
143,289
156,003
149,861
Consolidated
45
2010
£'000
10,517
92,593
20,578
354
3,601
23,871
19. CREDITORS: AMOUNTS
FALLING DUE WITHIN ONE YEAR
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
UCL
2011
£'000
UCL
2011
£'000
2010
£'000
2011
£'000
2010
£'000
1,278
171
200
142,036
26,607
1,278
86
2
117,639
17,814
1,278
171
142,036
25,626
1,278
86
117,639
16,971
40,174
465
63,390
-
38,432
330
76,912
-
38,202
465
59,726
1,095
36,371
330
74,746
2
274,321
252,493
268,599
247,423
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
20. CREDITORS: AMOUNTS FALLING DUE AFTER MORE
THAN ONE YEAR (Consolidated and UCL)
Obligations under finance leases
Cruciform building - Private Finance Initiative
Long-term bank loan
Salix Revolving Green Fund
Note
2011
£’000
2010
£’000
41,661
16,594
18,531
500
41,941
16,764
19,809
180
77,286
78,694
465
1,449
330
1,364
597
1,548
442
1,449
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
2,724
5,415
2,168
5,010
38,340
28,662
39,331
30,294
In less than one year
79,200
(1,914)
80,388
(1,694)
77,286
78,694
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 14).
The loan facility of £19.8m (of which £18.5m 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.
21. OPERATING LEASES
At 31 July 2011 UCL had annual commitments under non-cancellable operating leases as set out
below:
2011
2010
Land &
Land &
Buildings
Other
Buildings
Other
£
£
£
£
Operating leases which expire:
Within one year
200,935
69,670
215,283
79,427
In the second to fifth years inclusive
807,572
116,797
1,031,396 110,583
In over five years
2,752,899
22,694
2,438,754
575
Total
3,761,406
209,161
3,685,433 190,585
46
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
22. PROVISIONS FOR LIABILITIES AND CHARGES (Consolidated and
UCL)
At 1 August 2010
Utilised in year
At 31 July 2011
2011
£’000
2010
£’000
1,250
(1,250)
-
1,250
1,250
The provision represented our best estimate, based on expert advice, of a sum payable in respect
of construction of a building following the outcome of adjudication which occurred during 2009. It
has been utilised in full during the year ended 31 July 2011.
23. DEFERRED CAPITAL GRANTS
Funding
Council
£’000
Other
Grants
£’000
Total
£’000
At 1 August 2010
Freehold buildings
Leasehold buildings
Equipment
Investments
205,883
42,927
9,746
-
37,701
40,539
10,115
1,343
243,584
83,466
19,861
1,343
Total
258,556
89,698
348,254
Cash receivable:
Freehold buildings
Leasehold buildings
Equipment
20,656
12,637
2,550
10,062
6,328
5,410
30,718
18,965
7,960
Total
35,843
21,800
57,643
Disposals:
Freehold buildings
Equipment
(1,684)
(803)
(20)
(141)
(1,704)
(944)
Total
(2,487)
(161)
(2,648)
Released to income and expenditure account:
Freehold buildings
Leasehold buildings
Equipment
Investments
(8,735)
(2,819)
(6,398)
-
(3,675)
(1,810)
(5,668)
(45)
(12,410)
(4,629)
(12,066)
(45)
Total
(17,952)
(11,198)
(29,150)
At 31 July 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
Consolidated
47
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
Funding
Council
£'000
Other
Grants
£'000
Total
£'000
At 1 August 2010
Freehold buildings
Leasehold buildings
Equipment
205,883
42,927
9,746
37,701
39,721
10,115
243,584
82,648
19,861
Total
258,556
87,537
346,093
Cash receivable:
Freehold buildings
Leasehold buildings
Equipment
20,656
12,637
2,550
10,062
6,328
5,410
30,718
18,965
7,960
Total
35,843
21,800
57,643
Disposals:
Freehold buildings
Equipment
(1,684)
(803)
(20)
(141)
(1,704)
(944)
Total
(2,487)
(161)
(2,648)
Released to income and expenditure account:
Freehold buildings
Leasehold buildings
Equipment
(8,735)
(2,819)
(6,398)
(3,675)
(1,774)
(5,668)
(12,410)
(4,593)
(12,066)
Total
(17,952)
(11,117)
(29,069)
At 31 July 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
UCL
48
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
24.
ENDOWMENTS
(Consolidated
and UCL)
Unrestricted
Permanent
£’000
Restricted
Permanent
£’000
Total
Permanent
£’000
Restricted
Expendable
£’000
2011
Total
£’000
2010
Total
£’000
Capital
Accumulated
income
At 1 August 2010
481
8,884
9,365
55,906
65,271
54,554
42
523
331
9,215
373
9,738
2,240
58,146
2,613
67,884
2,616
57,170
Additions
Disposals
Investment
income
Expenditure
-investment
management
fees
- other
282
-
44
-
326
-
1,338
(50)
1,664
(50)
4,289
(679)
23
281
304
1,762
2,066
2,527
(3)
20
(40)
(190)
51
(43)
(190)
71
(251)
(4,139)
(2,628)
(294)
(4,329)
(2,557)
(247)
(2,350)
(70)
Net realised
(loss)/gain from
sale of
investments
Increase in
market value of
investments
(2)
(26)
(28)
(164)
(192)
1,817
65
805
870
5,062
5,932
5,357
At 31 July 2011
888
10,089
10,977
61,704
72,681
67,884
827
9,728
10,555
59,853
70,408
65,271
61
361
422
1,851
2,273
2,613
888
10,089
10,977
61,704
72,681
67,884
Represented by:
Capital
Accumulated
income
25. RESERVES
Consolidated
2011
2010
£'000
£'000
UCL
2011
2010
£'000
£'000
Income and expenditure reserve
At 1 August 2010
Surplus for the year
Adjustment for previously unconsolidated associates
Adjustment for change in percentage holdings in
associates
Transfer from revaluation reserve
Transfer from expendable endowment funds
Less pension surplus
At 31 July 2011
49
204,743
174,569
212,779
182,614
28,944
-
29,655
(81)
29,632
-
29,948
-
213
780
3,089
(2,308)
383
550
(333)
780
3,089
(2,308)
550
(333)
235,461
204,743
243,972
212,779
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
UCL
2011
2010
£'000
£'000
Pension reserve (Consolidated and UCL)
At 1 August 2010
(8,100)
(8,133)
1,105
2,308
(300)
333
(4,687)
(8,100)
27,739
25,930
44
166
2,362
2,193
(230)
-
(190)
(190)
(360)
(360)
29,365
27,739
2011
£'000
2010
£'000
(161)
(1,043)
(11)
-
895
(13)
At 31 July 2011
(172)
(161)
27. CAPITAL COMMITMENTS (Consolidated and UCL)
2011
£'000
2010
£'000
151,007
4,347
21,220
20,905
155,354
42,125
Actuarial gain/(loss)
Surplus retained within reserves
At 31 July 2011
Revaluation reserve (Consolidated and UCL)
At 1 August 2010
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 2011
26. MINORITY INTEREST (Consolidated)
The minority interest relates to the following companies:
(a) Bloomsbury Bioseed Fund Ltd (BBSF). 30% owned outside of the
Group.
(b) Proaxon Ltd. 17% owned outside of the Group.
(c) Evexar Medical Ltd. 1% owned outside of the Group.
At 1 August 2010
Minority interest in subsidiary undertakings’ results for the year
Share capital acquired by the Group
Commitments contracted at 31 July 2011
Authorised but not contracted at 31 July 2011
Commitments contracted at 31 July 2011 include £96.1m in respect of the Sainsbury Wellcome
Centre and £24.3m in respect of the Caledonian Road student residental development. Both these
commitments were entered into in 2010-11.
50
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
28. OTHER COMMITMENTS
UCL has a commitment to purchase shares in UKCMRI. At 31 July 2011, this commitment had a
value of £36,031,453. Since the year end, the commitment has reduced to £27,548,203 because
additional parties have been admitted to the arrangement as funders
29. RECONCILIATION OF CONSOLIDATED OPERATING SURPLUS TO
NET CASH INFLOW FROM OPERATING ACTIVITIES
2011
£'000
2010
£'000
Operating surplus after depreciation of tangible
fixed assets at cost and before tax
24,137
Items not involving cash movements:
Depreciation
Deferred capital grants released to income
Impairment of fixed asset investments
Decrease in stocks
(Increase)/decrease in debtors
Increase in creditors
Decrease in provisions
Pension cost less contributions payable
40,762
(29,150)
60
(8,397)
20,311
(1,250)
(2,380)
40,284
(29,894)
130
134
19,197
25,253
(655)
(3,154)
6,960
(2,066)
(2,466)
7,325
(2,527)
45,833
86,804
Items which are not operating activities:
Interest receivable
Interest payable
Investment income
30,023
1 August
2010
£’000
Cash
Flows
£’000
Other
Changes
£’000
31 July
2011
£’000
9,607
36,795
(2)
46,400
(5,769)
9,185
(198)
3,218
-
3,838
45,980
(200)
49,618
127,630
3,903
-
131,533
Debt due within one year
(1,694)
1,509
(1,729)
(1,914)
Debt due after one year
(78,694)
6,730
(5,322)
(77,286)
93,642
15,360
(7,051)
101,951
30. ANALYSIS OF CHANGES IN NET FUNDS
Cash at bank and in hand
Endowment assets
Deposits repayable on demand
Overdrafts
Short term deposits
The decrease in debt is due to; (a) capital repayments of £1,509,000, (b) interest payments of
£7,050,000, (c) new loans received of £320,000 and (d) interest payable charged of £7,051,000,
giving a net decrease in debt of £1,188,000.
51
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
31. RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
2011
£'000
2010
£'000
Income from endowments
Other interest received
Interest paid
Interest element of finance lease rental payment
2,066
2,484
(3,405)
(3,522)
2,527
2,052
(3,503)
(3,537)
Net cash outflow from returns on investments and servicing of finance
(2,377)
(2,461)
2011
£'000
2010
£'000
(91,646)
(3,899)
(4,826)
(100,371)
(41,158)
(3,112)
(1,522)
(45,792)
285
6,942
57,643
(20)
1,614
738
28,554
17
3,610
(33,907)
(12,873)
33. ACQUISITIONS AND DISPOSALS
2011
£’000
2010
£’000
Purchase of investment in associate – Senceive Ltd
Purchase of investment in associate – Genex Biosystems Ltd
Purchas in investment in subsidiary – Evexar Medical Ltd
Purchase of investment in joint venture – Imanova Ltd
(250)
(230)
(750)
(57)
(13)
-
(1,230)
(70)
2011
£'000
2010
£'000
Mortgages and loans acquired
Mortgage and loan capital repayments
320
(1,509)
180
(1,406)
Net cash outflow from financing
(1,189)
(1,226)
2011
£’000
2010
£'000
32
203
235
(220)
30
250
1
281
(249)
15
32
32. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
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
Capital grants received towards the purchase of tangible assets
Net loans to associate companies repaid
Net endowments received
Net cash outflow from capital expenditure and financial investment
Total acquisitions and disposals
34. FINANCING
35. HARDSHIP AND ACCESS BURSARY FUNDS (Consolidated &
UCL)
At 1 August
Funding Council grants
Interest earned
Disbursed to students
At 31 July
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.
52
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
36. PENSION FUNDS
2011
£’000
2010
£’000
35,998
5,913
6,604
266
231
34,176
5,849
6,253
340
291
49,012
46,909
The total pension costs for UCL were:
Contribution to USS
Contribution to SAUL
Contribution to NHS
Charged to I&E in respect of RFHSM Pension & Assurance Scheme
Charged 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 £6.2m at 31 July
2011.
Universities Superannuation Scheme (USS)
The latest actuarial valuation of the scheme was at 31 March 2008 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
Pension increases per annum
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
4.4%
4.3%
3.3%
6.1%
4.3%
3.3%
£28,843m
103.0%
16.0%
The scheme is currently finalising its triennial actuarial valuation. USS has indicated that a deficit
under the technical provisions is likely and will be consulting further with member institutions on
the outcome.
53
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
Superannuation Arrangement of the University of London (SAUL)
The latest actuarial valuation of the scheme was at 31 March 2008 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
6.9%
7.0%
- after retirement
4.8%
5.0%
1
Salary scale increases per annum*
4.85%
4.85%
Pension increases per annum
3.35%
3.35%
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
* excludes an allowance for promotional increases.
£1,266m
100.0%
13.0%
The scheme is finalising its valuation for March 2011 which is expected to show a small deficit
under the technical provisions. No further information is available at present.
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.
Federated Pension Scheme (FPS) and the Royal Free Hospital School of Medicine (RFHSM)
Pension and Assurance Scheme
The Federated Pension Scheme (FPS) for non academic staff of Middlesex Hospital Medical
School which since merger with UCL on 1 August 1987 has become closed to new entrants. This
scheme is a defined benefit scheme.
The Royal Free Hospital School of Medicine (RFHSM) Pension and Assurance Scheme operated
for non academic staff at the Royal Free Hospital School of Medicine. On merger with UCL on 1
August 1998 this scheme has been closed to all new entrants. This scheme is a defined benefit
scheme.
As a consequence of both FPS and the RFHSM Pension & Assurance Scheme being closed to
new entrants, it is likely that the current service cost will increase as the members approach
retirement.
The last triennial valuation of the FPS was undertaken on 31 March 2010 and for the Royal Free
Hospital School of Medicine Pension and Assurance Scheme on 1 August 2009. For the purposes
of reporting under FRS17, “Retirement Benefits”, a valuation of both schemes was undertaken on
31 July 2011, and details are given below.
54
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
FPS (1645)
Valuation method
Valuation date (31 July)
Projected Unit
2010
2011
2009
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
3.40%
2.70%
-
3.30%
n/a
3.20%
3.40%
n/a
3.30%
2.70%
3.20%
3.30%
3.30%
2.70%
5.90%
3.90%
5.30%
3.20%
3.30%
6.04%
4.30%
5.40%
3.30%
3.40%
6.29%
4.40%
6.00%
Projected over-funding
£7.1m
£2.1m
£1.8m
Funding level
164%
111%
109%
£11.0m
£18.0m
£19.1m
£21.2m
£20.9m
£22.7m
nil
nil
nil
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
Restated
2010
2011
Expected
rate of
return
Equities
Gilts
Bonds
Cash
Total
6.90%
3.90%
5.30%
0.50%
Fair Value
£’000
10,595
4,110
3,248
87
18,040
Holding
%
59
23
18
-
Expected
rate of
return
7.20%
4.20%
5.40%
0.50%
Fair Value
£’000
9,805
3,468
3,843
(5)
17,111
Holding
%
57
21
22
-
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.
55
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
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
2011
£'000
Restated
2010
£'000
18,040
10,950
7,090
17,111
14,977
2,134
389
6,701
318
1,816
2011
£'000
Restated
2010
£'000
231
787
(1,027)
16
291
826
(982)
-
7
135
Total expense recognised in the income and expenditure
Current service cost
Interest cost on obligation
Expected return on scheme assets
Past service cost
Total income and expenditure charge
Amounts for the current and previous four periods
Fair value of scheme assets
Value of liabilities (funded obligations)
Surplus
2011
£'000
Restated
2010
£'000
2009
£'000
2008
£'000
2007
£'000
18,040
10,950
7,090
17,111
14,977
2,134
19,836
18,041
1,795
23,981
20,686
3,295
26,009
20,069
5,940
451
931
1,039
(2,391)
(37)
(2,837)
468
Experience (loss)/gain on liabilities
Experience (loss)/gain on assets
The estimated amounts of contributions expected to be paid to the scheme during the year ending
31 July 2012 is £200,000.
56
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
Changes in the present value of the defined benefit obligation
2011
£'000
Restated
2010
£'000
Opening defined benefit obligation
Interest cost on obligation
Current service cost
Actuarial (loss)/gain on obligation
Curtailments/settlements
Members contributions
Benefits paid
14,977
787
231
(4,016)
16
20
(1,065)
13,708
826
291
565
25
(438)
Closing defined benefit obligation
10,950
14,977
2011
£'000
Restated
2010
£'000
Opening fair value of scheme assets
Expected return
Actuarial gain
Employer contributions
Members contributions
Benefits paid
17,111
1,027
931
16
20
(1,065)
15,503
982
1,039
25
(438)
Closing fair value of scheme assets
18,040
17,111
2011
£'000
2010
£'000
Recognised pension asset at the start of the year
Income and expenditure charge
STRGL gains/(losses)
Employer contributions
318
(7)
62
16
571
(135)
(118)
-
Recognised pension asset at the end of the year
389
318
Changes in the fair value of scheme assets
Total amounts recognised in the statement of total recognised gains
and losses
The cumulative amount of actuarial gains and losses recognised in the statement of total
recognised gains and losses in respect of the Federated Pension Scheme is a net loss of
£5,092,000 (2010 - net loss of £5,154,000).
57
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
RFHSM Pension and Assurance Scheme
Valuation method
Projected Unit
2011
2010
2009
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%
3.40%
3.40%
3.40%
3.40%
6.12%
4.40%
6.00%
£(5.1)m
£(8.4)m
£(8.7)m
80%
65%
59%
Present value of liabilities
Fair value of the scheme assets
£25.7m
£20.5m
£24.3m
£15.9m
£21.2m
£12.5m
Current Employers contribution rate
33.6%
105.9%
105.9%
Valuation date (31 July)
Inflation assumption - RPI
Inflation assumption - CPI
Increase for pensions
Increase for deferred pensions
Investment return
Salary scale increase per annum
Discount rate for liabilities
Projected under-funding
Funding level
Disclosure of fair values of assets and expected rates of return
Expected
rate of
return
Equities
Bonds
Total
Fair Value
2011
£’000
Holding
16,187
4,309
20,496
79
21
6.10%
3.10%
Expected
rate of
return
%
6.40%
3.40%
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 obligations)
Funded status
Recognised pension liability
Total expense recognised in the income and expenditure
Current service cost
Interest cost on obligation
Expected return on scheme assets
Past service cost
Total income and expenditure charge
58
Fair Value
2010
£’000
Holding
12,823
3,059
15,882
81
19
2011
£'000
2010
£'000
20,496
(25,572)
(5,076)
15,882
(24,300)
(8,418)
(5,076)
(8,418)
2011
£'000
2010
£'000
266
1,313
(1,001)
-
340
1,282
(804)
95
578
913
%
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
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 gain/(loss) on assets
2011
£’000
2010
£’000
2009
£'000
2008
£'000
2007
£'000
20,496
15,882
12,500
12,156
12,605
(25,572)
(5,076)
(24,300)
(8,418)
(21,204)
(8,704)
(18,734)
(6,578)
(17,317)
(4,712)
(207)
964
(359)
1,311
1,329
(1,844)
33
(2,513)
(294)
266
The estimated amounts of contributions expected to be paid to the scheme during the year ending
31 July 2012 is £2,770,000.
Changes in the present value of the defined benefit obligation
2011
£'000
2010
£'000
Opening defined benefit obligation
Interest cost on obligation
Current service cost
Past service costs
Actuarial loss on obligation
Gain arising from changes in assumptions underlying the scheme
liabilities
Member contributions
Benefits paid
24,300
1,313
266
(207)
21,204
1,282
340
95
(359)
128
60
(288)
1,852
73
(187)
Closing defined benefit obligation
25,572
24,300
2011
£'000
2010
£'000
Opening fair value of scheme assets
Expected return
Actuarial gain
Employers contributions
Members contributions
Benefits paid
15,882
1,001
964
2,877
60
(288)
12,500
804
1,311
1,381
73
(187)
Closing fair value of scheme assets
20,496
15,882
2011
£'000
2010
£'000
Recognised pension liability at the start of the year
Income and expenditure charge
STRGL gains/(losses)
Employer contributions
(8,418)
(578)
1,043
2,877
(8,704)
(913)
(182)
1,381
Recognised pension liability at the end of the year
(5,076)
(8,418)
Change in the fair value of scheme assets
Total amounts recognised in the statement of total recognised gains
and losses
The cumulative amount of actuarial gains and losses recognised in the statement of total
recognised gains and losses in respect of the RFHSM Pension & Assurance Scheme is a net loss
of £5,694,000 (2010 - net loss of £6,737,000).
59
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
37. 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.
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 Mrs Alison Woodhams is a member of the
HEFCE Audit Committee. UCL receives £203m (2010 £201m) of funding from HEFCE (see Note
1) these transactions are conducted at arms length and in the normal course of business.
The Provost is a member of the Economic and Social Research Council Board. UCL received
research funding of £1.7m from the Council during the year.
Mrs Alison Woodhams is a member of the Audit Committee of Royal Society. UCL received
research funding of £4.3m from the Royal Society in 2011.
Mr Rex Knight has an outstanding loan under the UCL staff house loan scheme, the amount
outstanding at year end was £95,595 (2010 £103,452). He also has an investment under the UCL
Shared Appreciation Mortgage Investment scheme of £135,000 (2010: £135,000).
UCL is a founding member of Francis Crick Institute. Professor Sir John Tooke is a Board Member
of the Institute. Ms Vivienne Parry is a council member of the Medical Research Council, another
of the Institute’s founding members.
Professor Sir John Tooke is additionally a Board Member of Imanova, a joint venture including the
Medical Research Council. The founding partner investment was £750,000. He is also a nonexecutive director of UCL Hospitals
During the year Professor Robert Brown and Professor Ian Borden had a close family member
who was employed by UCL. Their remuneration was based on UCL’s standard terms and
conditions applicable to other staff employed in similar capacities.
Professor David Attwell, Professor David Price and Ms Catherine Newman each have a child who
attended UCL as a student in 2010-11. Their attendance was in line with normal UCL policies and
procedures and conducted at arms length.
Evexar Medical Ltd, a subsidiary of UCL, has received a loan from Mr Stephen Barker, one of its
directors. The balance outstanding at 31 July 2011 was £27,562 (2010 £27,562). There is
additionally an outstanding amount owed to him of £45,000 representing deferred salary
payments.
Evexar Medical Ltd has also received a loan of £183,000 (2010 £183,000) from Esperante AB. Mr
Dean Slagel, a director of Canbex, is also an officer of Esperante AB. The balance outstanding at
31 July 2011 including associated interest was £248,375 (2010 £233,735).
Income for the year includes £35,460 (2010: £7,510) for the sale of goods to Evexar Compression
Advisory Limited, and investor in Evexar Medical Ltd. There was an outstanding debtor balance of
£11,555 at 31 July 2011 (2010 £8,636).
60
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
Mr Patrick Reeve is a Managing Partner of Albion Ventures who invested £750,000 in Abcodia Ltd
during the year.
Sir Ian McAllister is the Chairman of the Carbon Trust. The Trust received a grant of £70,000
(2010 nil) and entered into contacts worth £99,914 (2010 nil) with UCL during the year.
Mr Christopher Hodkinson and Dr Julie Tyers are directors of Somaxa Ltd, which provided
consultancy services worth £24,800 to UCL Business in 2011 (2010 nil). Somaxa Ltd provided
consultancy services to Abcodia Ltd valued at £11,000 (2010 nil).
Professor David Atwell chairs the grant panel for the Wellcome Trust. UCL received grants of
£35.1m from the Trust in 2011.
Dr Andrew 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.
Professor David Ingram is a director of Charing Systems. UCL Business provided a start up loan
of £25,000 in 2011.
Dr Mark Leaning, a director of Charing Systems, provided consultancy services worth £35,000 to
UCL Business through PCF Enterprises Limited in 2011.
Professor Anthony Finkelstein received royalties in relation to software that he developed for UCL
Business of £1,411 in 2010-11. He additionally received £5,940 from UCL Consulting for
consultancy service and software support provided during the year.
Mr Michael Chessum and Mr Matthew Burgess were full time sabbatical officers of the UCL Union
and Dr Robert Barber is a trustee of the UCL Union, which received £2.5m from UCL in 2010-11.
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
2010
£'000
Cash
transfers
Income
Expenditure
Other
Balance
at 31 July
2011
£'000
£'000
£'000
£'000
£'000
607
(362)
-
1
13
259
11
-
-
-
35
46
618
(362)
-
1
48
305
2011
£'000
430
-
2010
£'000
327
96
2,773
430
3,196
Pentraxin Therapeutics
Limited
Canbex Therapeutics
Limited
Total debtors
Additionally, the Group has granted loans to the following associate companies:
Canbex Therapeutics Limited
1
Genex Biosystems Limited*
UKCMRI Construction Ltd
Total loans
*1 Bloomsbury Bioseed Fund (BBSF) has provided in full against this debtor balance
61
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
The following parties are related to UCL by virtue of having a shared director with a UCL
subsidiary. Transactions were as follows:
Transactions
Transactions
Balance at
Balance at
in 2010-11
in 2009-10
31 July 2011 31 July 2010
£'000
£'000
£'000
£'000
The Anthony Nolan
(12,282)
3,067
Trust
Licensing Executives
140
(768) / 1,438
Society Ltd
Albion Ventures LLP
9,375
7,460
4,453
38. 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:
Proportion
Held
Company
Principal Activity
Status
UCL Trading
Ltd
Contracting,
consultancy and other
commercial activities.
Property investment.
100% owned
Class of
Shares
Ordinary
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
-
-
Ordinary
Ordinary 'A'
Redeemable
Preference
Ordinary
100% - UCL
100% - UCL
100% - UCL
UCL
Investments
Ltd
UCL
Properties Ltd
UCL
Residences
Ltd
UCL
Enterprises
Ltd
UCL
Cruciform Ltd
UCL
Consultants
Ltd
Somers Town
Community
Sports Centre
UCL Business
Plc
Exploitation of
intellectual property.
Free Clinical
Enterprises
Ltd
Testing of new drugs in
the final approval stage.
100% owned
62
100% - UCL
100% - UCL
Business
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
NOTES TO THE ACCOUNTS
Bloomsbury
Bioseed Fund
Ltd (BBSF)
Proaxon Ltd
Evexar
Medical Ltd
Investment in
biotechnology start-ups.
70% owned
Ordinary
70% - UCL
Developing and
commercialising
medical treatments.
Developing and
commercialising
medical and surgical
devices.
83% owned
A Preferred
Ordinary
96% owned
Ordinary 'A'
100% - BBSF
72% - UCL
Cruciform
2% - UCL
Business
100% - UCL
Business
Ordinary 'B'
UCL Bio(3) Ltd, UCL Clinical Research Management Centre Ltd, Nervation Ltd, Nervation
Vascular Technologies Ltd and Stanmore Clinical Research Facility Ltd were dissolved during the
year.
Free Clinical Enterprises Ltd is in the process of being wound up.
The Ageing Biomarker Company Ltd changed its name to Abcodia Ltd, and became an associate
company during the year.
63
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2011
FINANCIAL SUMMARIES (unaudited)
2011
£'000
2010
£'000
2009
£'000
2008
£'000
2007
£'000
INCOME
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Profit on disposal of investments
Endowment income, donations and interest
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
178,773
97,795
201,698
111,944
9,352
Total income
802,405
765,416
723,106
635,762
599,562
(848)
(3,032)
(3,725)
(348)
(1,167)
Net Income
801,557
762,384
719,381
635,414
598,395
EXPENDITURE
Staff costs
Other operating expenses
Interest payable
Depreciation
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
364,073
183,738
7,469
35,070
Total expenditure
777,420
732,361
707,528
634,767
590,350
24,137
30,023
11,853
647
8,045
(226)
(342)
(9)
41
56
(325)
(11)
(1)
(312)
(374)
2
11
(73)
(525)
62
3
(137)
(536)
(245)
(1)
23,601
29,742
11,180
114
7,126
11
(895)
(52)
462
25
23,612
28,847
11,128
576
7,151
(74)
738
-
5,180
-
-
-
-
113
352
5,938
-
(6,149)
170
(195)
29,476
29,585
4,979
6,039
7,308
(532)
70
139
(511)
(398)
28,944
29,655
5,118
5,528
6,910
Less: Share of income from joint ventures
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
SURPLUS AFTER DEPRECIATION OF
ASSETS AT COST AND TAX
Minority interest
SURPLUS BEFORE EXCEPTIONAL ITEMS
Exceptional items: continuing operations
Profit on disposal of subsidiary
(Loss)/profit on disposal of fixed asset
investments
Profit/(loss) 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
64