UCL’s Mission
The vision:
Famous for Excellence - in Education and Research
UCL is committed to be as outstanding, liberal, innovative and welcoming
in its teaching, and as internationally renowned for its research,
in the 21st century as it has been in the 19th and 20th.
UCL intends:
•
To be, and to be acknowledged as, one of the greatest metropolitan universities in the world, serving local, national and
international needs.
•
To be, and to be recognised as, a world leader in teaching, scholarship and research across the sciences and arts.
•
To be at the forefront in tackling environmental, communication and health problems.
•
To continue its founders’ pioneering vision by providing educational opportunities of the highest quality to all regardless of
background.
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
CONTENTS
Page
1
2
Committee Membership
3
Financial Highlights
4
Treasurer’s Report
7
Corporate Governance
10
Responsibilities of the Council of
University College London
12
Auditors’ Report to the Members of the
Council of University College London
14
Statement of Principal Accounting
Policies
17
Consolidated Income and Expenditure
Account
18
Consolidated Balance Sheet
19
UCL Balance Sheet
20
Statement of Total Recognised Gains
and Losses and of Cash Flow
21-36
Notes to the Accounts
37
Financial Summaries (unaudited)
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
COMMITTEE MEMBERSHIP
Council 1999-2000
Lay Members:
Lord Young of Graffham•* (Chairman)
Professor P. G . Moore•* (Vice-Chairman)
Mr K. J. Hawkins• (Treasurer)
Viscount Bearsted
Mr B. W. Bennett
Sir John Birch
Ms A. S. Biss
Mr S. P. Chalfen
Ms J. Clements
Mr R. T. Fox
Sir Alan Greengross•*
Mr M. J. Harris
Mr C. W. Jonas*
Mr R. A. Lyons
Miss M. F. Rudland
Ms J. Salmon
Academic Members:
Professor C. H. Llewellyn Smith•*
Professor R. D. Ashton
Professor D. A. Brown
Professor V. Chick
Professor D. T. Delpy
Professor I. H. Dennis
Dr H. D. Donoghue
Dr M. M. Dworetsky
Dr J. T. Chowaniec
Professor H.D. Griffiths
Professor B. B. Nutt
Professor R. L. Souhami
UCL Union:
Ms E. Bloom
Ms C. Harman
Mr L. Wijedoru
Finance Committee 1999-2000
Lay Members:
Mr K. J. Hawkins (Chairman)
Mr J. E. Bellamy
Mr D. M. M. Dutton
Professor P. G. Moore
Lord Young of Graffham
Academic Members:
Professor C. H. Llewellyn Smith
Professor W. E. Davies
Professor R. S. J. Frackowiak
Dr P. J. Harrison
Dr A. Faulkner
Professor M. J. Worton
Vice-Provosts:
Mr D. V. Bowles (to 31 December 1999)
Miss M. J. Gallyer
Professor R. J. Levinsky
UCL Union:
Ms C. Harman
Audit Committee 1999-2000
Lay Members:
Sir Alan Greengross (Chairman)
Ms A. S. Biss
Mr R. T. Fox
Mr J. R. Hustler
Investments Committee 1999-2000
Lay Members:
•
*
Mr K. J. Hawkins (Chairman)
Mr S. R. Burley
Mr R. G. Cottam
Mr D. M. M. Dutton
Professor P. G. Moore
denotes also member of Remuneration Committee
denotes also member of Nominations Committee
2
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
FINANCIAL HIGHLIGHTS
2000)
£m)
1999)
£m)
Change)
%)
Funding Council Grants
Academic Fees and Support Grants
Research Grants and Contracts
Other Operating Income
Profit on Disposal of Investments
Endowment Income and Interest Receivable
117.6)
52.0)
123.8)
75.6)
6.5)
5.9)
104.9)
49.0)
126.2)
72.1)
-)
7.5)
12.0)
6.2)
(1.9)
5.0)
(21.8)
TOTAL INCOME
381.4)
359.7)
6.0)
TOTAL EXPENDITURE
382.6)
352.7)
8.5)
1.0)
-)
(0.2)
7.0)
Fixed Assets
Endowment Asset Investments
Net Current Assets
259.9)
85.3)
27.5)
243.2)
79.0)
36.2)
6.9)
7.9)
(24.1)
Total Assets Less Current Liabilities
372.6)
358.4)
4.0)
Non-Current Liabilities and Provisions
(59.9)
(57.3)
4.5)
TOTAL NET ASSETS
312.7)
301.1)
3.9)
141.9)
85.3)
85.5)
137.6)
79.0)
84.5)
3.2)
7.9)
1.2)
7.3)
(9.8)
13.2)
(7.9)
(45.2)
(25.0)
2000)
No.)
1999)
No.)
16,336)
8,635)
15,624)
7,862)
CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT
Profit on Disposal of Fixed Assets
(DEFICIT)/SURPLUS FOR THE YEAR
CONSOLIDATED BALANCE SHEET
Represented by:
Deferred Grants
Endowments
Reserves
OTHER KEY STATISTICS
Consolidated Recognised Gains
Consolidated movement in Cash Flow
Student Numbers
Average Staff Numbers
3
4.6)
9.8)
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
TREASURER’S REPORT
Scope of Financial Statements
The financial statements include the activities of the Eastman Dental Institute (EDI), and the School of Slavonic and East European
Studies (SSEES), which combined with UCL on 1 August 1999. The combination with EDI, whose total income in 1998-99 was
£8.8 million, has been treated as a merger in the accounts; comparative figures have been amended accordingly. The principal effects
of both combinations, on the Income & Expenditure Account and Statement of Total Recognised Gains and Losses, are shown at
Note 32 and on Page 20.
The financial statements also include the consolidated results of UCL’s trading subsidiaries, details of which are shown at Note 11,
and whose commercial activities are more appropriately channelled through limited companies.
Results for the Year
The financial statements demonstrate yet another year of steady growth in many areas, as shown by the Financial Highlights on
page 3. The final outcome for the year, a deficit of £182k, is disappointing given UCL’s past achievements in recording surpluses on
its Income & Expenditure Account since 1990-91. The Income & Expenditure consolidated results for the years ended 31 July,
adjusted for the merger of the Eastman Dental Institute, are summarised as follows:
Income
Expenditure
Profit on disposal of assets
(Deficit)/Surplus for the year
2000)
£m)
1999)
£m)
381.4)
(382.6)
1.0)
359.7)
(352.7)
-)
(0.2)
7.0)
UCL was again successful in receiving an above average increase in the Funding Council recurrent grant in 1999-00, however,
continuing investment in fixed assets, including some catching up with UCL’s buildings maintenance programme, has required a
continuation of UCL’s income generation/savings programme in order to achieve a break-even position. Profit of £6.5 million was
received in respect of the sale of shares in two biomedical spin-out companies, and £1 million from the disposal of fixed assets.
At 31 July 2000, total accumulated funds on the Income & Expenditure Account stood at £84.9 million, an increase of 1.8%, of
which £44.7m is earmarked for departmental purposes, and £45m reserved against capital and other expenditure commitments. A
deficit of £4.8m is carried forward on the Revenue Reserve. UCL’s financial strength is evidenced by a further improvement, of
£7.3m, in its Statement of Recognised Gains and Losses, and a year end Net Asset position of £312.7 million, notwithstanding the
inclusion of land and buildings (currently valued for insurance purposes at £700m) at book cost.
4
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
TREASURER’S REPORT (Continued)
The Balance Sheet reflects yet another year of significant investment in infrastructure, with fixed asset additions totaling £33.8m.
During the year, the development work on the Cruciform building (previously University College Hospital), was completed, and the
building handed over for use in teaching by the combined medical school and for Biomedical research. Such expenditure forms part
of UCL’s strategic plan to build upon excellence, improving and expanding its facilities, and brings capital investment in buildings
and equipment over the last five years to £150m.
Investment Performance
The value of UCL’s endowment asset investments stood at £85.3m, an increase of £6.3 million. UCL’s investments are managed by
Investment Managers, Cazenove, and the returns obtained by UCL during the year, which have been closely monitored by the
Investments Committee, were generally better than the comparative indices used to measure performance.
Cash Flow
As a consequence of UCL’s decision to fund its substantial capital development programme from within, cash balances have reduced
substantially. At the time of writing this report, UCL was actively exploring opportunities to finance its continuing capital
programme. Short-term investment policy is to optimise income at minimum risk, and in this respect UCL uses professional advisers,
Union Fund Management.
Capital Projects
Particular attention has been given to UCL’s capital programme, in the context of its Strategic Planning, to provide the necessary
infrastructure to maintain the current excellent standards in teaching and research. UCL was successful in respect of two earlier bids
under the Joint Infrastructure Fund (JIF), which will provide funding of £15.6 million to provide research facilities in the areas of
neurodegenerative diseases and evolutionary genomics; in the JIF announcement of recent weeks, UCL has recorded outstanding
success with the approval of nine projects, totalling in excess of £45 million, although not all are to be fully funded. UCL has also
made significant progress with capital bids under the HEFCE’s Project Capital Allocation initiative, from which it expects to derive
funding of £13.2m towards new projects.
The recent announcement from the Government and the Wellcome Trust to create a Scientific Research Investment Fund, building
upon the JIF initiative, is likely to be of significant benefit to UCL, providing funding for research developments. Detailed planning
is already under way to establish UCL’s capital priorities for research.
As reported last year, key to UCL’s research capabilities in the medical sciences are the NHS’ plans for the building of a new hospital
close to the UCL main campus. Following approval by the Treasury of the Hospital’s PFI scheme, building work has now
commenced, and plans are progressing for UCL to receive a building close to its main site, allowing for some rationalisation of current
activities and the creation of new facilities. It is anticipated that the capital costs of relocation will be largely met by a contribution
from the NHS and the HEFCE.
5
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
TREASURER’S REPORT (Continued)
Future Developments
1999-2000 saw the introduction of a new financial system. Initially, progress with its development was slow, as a number of software
problems had to be overcome. In recent months significant improvements have been achieved, and UCL now looks forward to
developing the available facilities and modules within the system further, to derive the substantial benefits anticipated from
integration of its accounting functions.
Significant effort continues to be directed towards the 2001 Research Assessment Exercise, which will provide an independent
assessment of the standards of UCL’s research and inform the HEFCE funding process. UCL’s strategic objectives are to improve the
research ratings of departments, where this is possible, and to maintain those ratings that have been adjudged to be excellent.
Creditors Policy
UCL’s policy is to make payments to its creditors within the stipulated terms of business.
Staff and their Involvement
College staff are informed of developments within the organisation through the publication of a regular newsletter and by the
increasing use of Web Sites. All staff are encouraged to participate in formal and informal discussion at all levels throughout UCL.
Conclusion
UCL welcomes the Government’s recognition that years of under-resourcing of research infrastructure need to be reversed if top
universities, such as UCL, are to remain at the leading edge. The injection of capital project funds for the period 1999–2002 is
welcomed, and the sector awaits, with great anticipation, the HEFCE/OST allocation of the Scientific Research Investment Fund
announced earlier this summer, but it is clear that the requirement for universities to find a capital contribution will put considerable
strain on an already pressured university sector. It is also encouraging to note from the Secretary of State’s recent funding
announcement that, for the first time in well over a decade, funding per student will increase in real terms in 2001-02 – this is
hopefully the beginning of a continuing policy to alleviate the funding problems experienced by Higher Education Institutions over
past years.
Kerry J Hawkins
Treasurer
6
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
CORPORATE GOVERNANCE
UCL is committed to exhibiting best practice in all aspects of corporate governance. This summary describes the manner in which
UCL has applied the principles set out in Section 1 of the Combined Code on Corporate Governance issued by the London Stock
Exchange in June 1998, 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’s Governing Body, 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 mis-statement or loss, and cannot eliminate business risk. Where areas for improvement in the system of internal control
are identified, the Council considers the recommendations made to it by Audit Committee, Academic Board and other committees.
At its December 2000 meeting, the Council carried out an annual assessment for the year ended 31st July 2000 by considering a
report from the Audit Committee, and taking account of events since 31 July 2000. Although the process of identifying, evaluating
and managing the Group’s key risks commenced prior to the beginning of the financial year, the procedures were not formalised until
February 2000, following the establishment of a Risk and Efficiency Committee; the Council is of the view therefore, that there is
an ongoing process for identifying, evaluating and managing the Group’s key risks, with a formal process operating since February
2000, up to the date of approval of the annual financial statements.
The Council comprises lay and academic persons appointed under the Statutes of UCL. The Statutes provide for the distinct roles
of Chairman and Vice-Chairman of the Council, and of UCL’s Chief Executive, the Provost and President. 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 meets at least three times each year; it has several committees, including a Planning & Resources Committee,
Finance Committee, Audit Committee, Risk and Efficiency Committee, Academic Committee, Remuneration Committee and
Nominations Committee.
UCL’s Charter and Statutes set out the powers and duties of the Council. In March 2000, the Council formally delegated a number
of these powers and duties to the Academic Board and other committees and officers of UCL, with effect from the start of the
academic year 2000-01, and retained to itself the remaining powers and duties provided for it under statute. The Council is satisfied
that the decisions made in March 2000 are sufficient to ensure that the Council and its officers have a clear understanding of which
of the Council’s powers and duties it wishes to retain to itself.
The Planning & Resources Committee makes recommendations and gives advice to the Council in respect of its strategic and
development responsibilities, including issues relating to significant changes in activity and the external environment, which affect
key risks.
7
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
CORPORATE GOVERNANCE (Continued)
The Finance Committee is chaired by the Treasurer and comprises lay members and academic members of staff. Inter alia they
recommend to the Council UCL’s annual revenue and capital budgets and monitor performance in relation to the approved budgets
and review UCL’s annual financial statements. They also review UCL’s accounting policies which are applied in the 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 Audit Committee, which meets at least three times annually, is chaired by a lay member of Council and comprises lay members
only. They are responsible for meeting with external auditors to discuss audit findings, the management letter and internal control
report arising out of the audit of the annual financial statements, and with Internal Auditors to consider detailed internal audit reports
and recommendations for the improvement of UCL’s system of internal controls, together with management’s response and
implementation plans. 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 External Auditors on their own for independent discussions. The
Audit Committee also approves the annual programme of the Internal Audit Service and reviews the conclusions of its work. Audit
plans are drawn up based on assessment of the control risks in each operating area and their materiality in the context of overall UCL
activity. In complying with Code provision D.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, with regular consideration of risk and
control based on reports received from the Risk and Efficiency Committee, 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 Risk and Efficiency Committee includes the Vice-Provosts for Administration and Teaching and Learning, the Dean of Students,
and the Directors of Administrative Divisions; the Director of Internal Audit Services is in attendance at meetings. The Committee
has been established to develop a strategy for the implementation of a Risk Assessment and Management Policy, including the
methodology for identifying and assessing key risks on a continuous basis and ensuring that procedures are in place for those
identified risks to be managed, monitored and reviewed in a consistent and effective manner. The Committee reviews, on a regular
basis, the risk management and control process to consider what changes, if necessary, should be recommended. It also considers key
risks identified in other areas, for example on Health and Safety and Academic matters. It reports to the Audit Committee at termly
intervals, or more frequently, should the need arise.
The Academic Committee, which reports to the Council via Academic Board, is responsible for developing UCL’s Teaching and
Learning Strategy and for monitoring the effectiveness of the academic quality assurance strategy, encompassing policies and
procedures in respect of quality audit, quality enhancement and subject review.
8
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
CORPORATE GOVERNANCE (Continued)
The Nominations Committee considers nominations for vacancies in the Council membership under the relevant Statute. The
Remuneration Committee is chaired by the Chairman of Council and comprises three other members of Council and the Provost
and President. It determines the annual remuneration of senior officers of UCL and where necessary decides on any severance
payments. The Provost and President is excluded from discussions relating to his own remuneration package. The Remuneration
Committee also receives details of all professorial salaries and administrative equivalents not otherwise considered by it. The
remuneration of these staff is determined by the Provost and President in consultation with relevant Vice-Provosts. 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.
9
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
RESPONSIBILITIES OF THE COUNCIL OF UNIVERSITY COLLEGE LONDON
In accordance with the 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 and President, 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.
10
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
RESPONSIBILITIES OF THE COUNCIL OF UNIVERSITY COLLEGE LONDON
(Continued)
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 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;
(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 medium to short-term supported by detailed income, expenditure, capital and cash
flow budgets and forecasts;
(vi)
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.
11
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
AUDITORS’ REPORT TO THE MEMBERS OF
THE COUNCIL OF UNIVERSITY COLLEGE LONDON
We have audited the financial statements on pages 17 to 36, which have been prepared under the accounting policies set out on
pages 14 to 16.
Respective responsibilities of the Council and Auditors
As described on pages 10 and 11 the Council is responsible for preparing financial statements, which are required to be prepared in
accordance with applicable United Kingdom law and accounting standards. Our responsibilities, as independent auditors, are
established by statute, the Auditing Practices Board, the Higher Education Funding Council for England and by our profession’s
ethical guidance.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance
with the Statement of Recommended Practice on Accounting for Further and Higher Education. We also report whether, income
from funding bodies, grants and income for specific purposes and from other restricted funds administered by UCL have been
properly applied only for the purposes for which they were received and whether income has been applied in accordance with the
Statutes and, where appropriate, with the Financial Memorandum with the Higher Education Funding Council for England.
We also report to you if, in our opinion, the Treasurer’s report is not consistent with the financial statements, if the College has not
kept proper accounting records, the accounting records do not agree with the financial statements or if we have not received all the
information and explanations we require for our audit.
We also, at the request of the Council, review whether the corporate governance statement on pages 7 to 9 reflects the Group’s
compliance with the four provisions of the Combined Code specified for our review by Council and we report if it does not. We are
not required to consider whether the Council’s statements on internal control cover all risks and controls, or form an opinion on the
effectiveness of the Group’s corporate governance procedures or its risk and control procedures.
We read the other information contained in the Treasurer’s report, including the corporate governance statement, and consider
whether it is consistent with the audited financial statements. We consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the financial statements.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom auditing standards issued by the Auditing Practices Board and the
Audit Code of Practice issued by the Higher Education Funding Council for England. An audit includes examination, on a test basis,
of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant
estimates and judgements made by the Council in the preparation of the financial statements, and of whether the accounting policies
are appropriate to the circumstances of UCL and the group, consistently applied and adequately disclosed.
12
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
AUDITORS’ REPORT TO THE MEMBERS OF
THE COUNCIL OF UNIVERSITY COLLEGE LONDON (Continued)
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to
provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement,
whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the financial statements.
Opinion
In our opinion:
a).
the financial statements give a true and fair view of the state of affairs of UCL and the group as at 31 July 2000 and of the
deficit of the group for the year then ended and have been properly prepared in accordance with the Statement of
Recommended Practice on Accounting in Further and Higher Education Institutions;
b).
income from the Higher Education Funding Council, grants and income for specific purposes and from other restricted funds
administered by UCL have been applied for the purposes for which they were received; and
c).
income has been applied in accordance with UCL’s statutes and, where appropriate, with the financial memorandum dated
July 1997 with the Higher Education Funding Council for England.
Deloitte & Touche
Chartered Accountants
and Registered Auditors
Hill House
1 Little New Street
London EC4A 3TR
14 December 2000
13
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
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)
and applicable Accounting Standards.
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 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.
3.
Merger
The results and cashflows of all combining entities are brought into the financial statements of UCL from the beginning of
the financial year in which the combination occurred. The corresponding figures are restated by including the results of all
combining entities for the previous period and their balance sheets for the previous balance sheet date.
4.
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.
Income received from specific endowments and donations, research grants and contracts is included to the extent only of
expenditure incurred during the year, together with any related overhead contributions towards costs.
5.
Pension Arrangements
Pension costs are assessed in accordance with the advice of professionally qualified independent actuaries and are accounted
for on the principle of charging the cost of providing pensions over the period that UCL benefits from the employees’ services.
A detailed explanation of the arrangements for the two principal pension schemes can be found at Note 29.
14
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (Continued)
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 unless such funds
are held for onward transmission to a research partner under an agency agreement. The resulting exchange differences are dealt
with in the determination of income and expenditure for the financial year.
7.
Taxation
UCL enjoys charitable status and is therefore exempt from taxation in respect of non-trading income or capital gains under
Section 505 of the Income and Corporation Taxes Act 1988 and Section 256 of the Taxation of Chargeable Gains Act 1992.
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. 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 that held on long leasehold is depreciated
over the life of the lease up to a maximum of 50 years.
9.
Investment Property
Investment properties are stated in the Balance Sheet at their open market value. No depreciation is charged on such properties.
The Companies Act 1985 requires all properties to be depreciated. However, this requirement conflicts with the generally
accepted accounting principle set out in SSAP 19. UCL considers that, because this property is not held for consumption,
but for its investment potential, to depreciate it would not give a true and fair view and that it is necessary to adopt SSAP 19
in order to give a true and fair view.
If this departure from the act had not been made, the deficit for the financial year would have been increased by depreciation.
However, the amount of depreciation cannot be reasonably quantified, because depreciation is only one of many factors
reflected in the annual valuation and the amount which may otherwise have been shown cannot be separately identified
or quantified.
15
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (Continued)
10.
Fixtures, Fittings and Equipment
Expenditure on fixtures, fittings 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:
Major refurbishments
Fixtures, fittings and furniture
Equipment funded by research grants
Other equipment
11.
20 years
10 years
Term of grant
5 years
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.
12.
Intangible Fixed Assets
Patents, licenses, rights, trade marks and other similar rights over assets are stated in the balance sheet at cost and amortised
over a period of five years.
13.
Investments
Both Fixed Asset and Endowment Asset Investments are stated at market value in the Balance Sheet.
14.
Stocks
Stocks are made up of goods for resale, centrally held stores holdings and major stores held by academic departments and are
stated at the lower of cost or net realisable value.
15.
Cash Flows and Liquid Resources
Cash flows comprise increases or decreases in cash. Cash includes cash in hand, deposits repayable on demand and overdrafts.
Deposits are repayable on demand if they are in practice available within 24 hours without penalty.
Liquid resources comprise assets held as a readily disposable store of value. They include term deposits held as part of UCL’s
treasury management activities. They exclude any such assets held as Endowment Asset Investments.
16
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT
YEAR ENDED 31 JULY 2000
Note
2000)
£’000)
Restated
1999
£’000
1
2
3
4
117,521)
52,049)
123,789)
75,639)
6,499)
5,898)
104,928
48,993
126,194
72,043
37
7,538
381,395)
359,733
242,118)
117,116)
5,982)
17,376)
221,412
114,906
2,582
13,846
382,592)
352,746
(1,197)
6,987
1,027)
-
(170)
6,987
12)
9
(182)
6,978
INCOME
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Profit on disposal of investments
Endowment income and interest receivable
5
Total Income
EXPENDITURE
Staff costs
Other operating expenses
Interest payable
Depreciation
6
8
7
8
Total Expenditure
(DEFICIT)/SURPLUS FOR THE YEAR BEFORE
DISPOSAL OF FIXED ASSETS AND BEFORE TAX
Profit on disposal of tangible fixed assets
(DEFICIT)/SURPLUS FOR THE YEAR AFTER
DISPOSAL OF FIXED ASSETS BUT BEFORE TAX
Taxation
(DEFICIT)/SURPLUS FOR THE YEAR AFTER TAX
The Group has no revalued assets which it depreciates and thus there is no difference between the (deficit)/surplus as reported and
the historical cost results.
The consolidated income and expenditure of the Group relate wholly to continuing activities.
17
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
CONSOLIDATED BALANCE SHEET AS AT 31 JULY 2000
Note
2000)
£’000)
Restated)
1999)
£’000)
Tangible assets
Intangible assets
Investments
9
10
11
249,604)
315)
9,943)
259,862)
233,146)
-)
10,043)
243,189)
ENDOWMENT ASSET INVESTMENTS
12
85,274)
79,012)
585)
84,722)
2,201)
6,434)
93,942)
1,029)
65,516)
16,357)
4,787)
87,689)
(66,480)
(51,525)
27,462)
36,164)
372,598)
358,365)
FIXED ASSETS
CURRENT ASSETS
Stores
Debtors
Short term deposits and investments
Cash at bank and in hand
13
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
14
NET CURRENT ASSETS
TOTAL ASSETS LESS CURRENT LIABILITIES
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR
15
(57,612)
(54,474)
PROVISIONS FOR LIABILITIES AND CHARGES
16
(2,275)
(2,831)
312,711)
301,060)
17
141,968)
137,570)
18
84,905)
369)
85,274)
78,508)
504)
79,012)
84,897)
572)
85,469)
83,399)
1,079)
84,478)
312,711)
301,060)
NET ASSETS
DEFERRED CAPITAL GRANTS
ENDOWMENTS
Specific
General
RESERVES
Income and expenditure account
Revaluation reserve
19
20
TOTAL
Approved by Council on 14 December 2000
K. J. Hawkins
Treasurer
Professor C.H. Llewellyn Smith
Provost and President
18
J. W. Foster
Director of Finance
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
BALANCE SHEET AS AT 31 JULY 2000
Note
2000)
£’000)
Restated)
1999)
£’000)
Tangible assets
Intangible assets
Investments
9
10
11
248,227)
315)
7,156)
255,698)
231,709)
-)
7,440)
239,149)
ENDOWMENT ASSET INVESTMENTS
12
85,274)
79,012)
378)
87,499)
2,200)
5,399)
95,476)
823)
68,676)
16,353)
4,253)
90,105)
(66,164)
(51,819)
29,312)
38,286)
370,284)
356,447)
FIXED ASSETS
CURRENT ASSETS
Stores
Debtors
Short term deposits
Cash at bank and in hand
13
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
14
NET CURRENT ASSETS
TOTAL ASSETS LESS CURRENT LIABILITIES
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR
15
(57,612)
(54,474)
PROVISIONS FOR LIABILITIES AND CHARGES
16
(2,275)
(2,831)
310,397)
299,142)
17
140,781)
136,337)
18
84,905)
369)
85,274)
78,508)
504)
79,012)
84,342)
-)
84,342)
83,101)
692)
83,793)
310,397)
299,142)
NET ASSETS
DEFERRED CAPITAL GRANTS
ENDOWMENTS
Specific
General
RESERVES
Income and expenditure account
Revaluation reserve
19
20
TOTAL
Approved by Council on 14 December 2000
K. J. Hawkins
Treasurer
Professor C.H. Llewellyn Smith
Provost and President
19
J. W. Foster
Director of Finance
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
STATEMENTS OF TOTAL RECOGNISED GAINS AND LOSSES AND
OF CASH FLOW
STATEMENT OF CONSOLIDATED TOTAL RECOGNISED GAINS AND LOSSES
Note
(Deficit)/Surplus after depreciation of assets
School of Slavonic and East European Studies reserves at 1 August 1999
(Diminution)/Appreciation of endowment asset investments
Endowment income retained for the year
School of Slavonic and East European Studies endowments at 1 August 1999
New endowments
Unrealised surplus/(deficit) on revaluation of investment property
Unrealised surplus on revaluation of fixed asset investments
18
18
18
18
20
2000)
£’000)
Restated)
1999)
£’000)
(182)
988)
(2,215)
5,480)
1,422)
1,575)
185)
-)
6,978)
-)
125)
5,339)
-)
647)
(43)
193)
7,253)
13,239)
RECONCILIATION TO CLOSING RESERVES AND ENDOWMENTS
Opening reserves and endowments
Total recognised gains and losses for the year
163,490)
7,253)
Closing reserves and endowments
170,743)
RECONCILIATION OF MOVEMENT IN FUNDS TO THE LAST ANNUAL REPORT
Total recognised gains relating to the year
Prior period adjustment (note 19)
7,253)
3,698)
Total gains and losses recognised since the last annual report
Funds of Eastman Dental Institute 1 August 1999
10,951)
2,156)
Total movement in funds since last annual report
13,107)
STATEMENT OF CONSOLIDATED CASH FLOW
Note
2000)
£’000)
Restated)
1999)
£’000)
22
25
26
(8,528)
5,531)
(12)
(20,722)
(5,841)
10,686)
(9)
(19,862)
Cash outflow before use of Liquid Resources and Financing
Management of Liquid Resources
Financing
23
27
(23,731)
14,153)
(255)
(15,026)
6,390)
769)
Decrease in cash in the year
23
(9,833)
(7,867)
Net Cash outflow from Operating Activities
Returns on Investments and Servicing of Finance
Taxation
Capital Expenditure and Financial Investment
20
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS
1. FUNDING COUNCIL GRANTS
Recurrent Grant - HEFCE
Specific Grants - HEFCE
Deferred Capital Grants released in year
2000
£’000
Restated
1999
£’000
112,864
4,657
101,728
96
3,104
117,521
104,928
The 1998/99 figure for deferred capital grants released has been increased by £2,107,000 due to revised classification between
HEFCE and other grants.
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
2000
£’000
Restated
1999
£’000
18,547
21,912
2,102
2,377
508
6,603
15,613
19,648
1,871
5,920
480
5,461
52,049
48,993
2000
£’000
Restated
1999
£’000
93,278
30,511
94,857
31,337
123,789
126,194
38,771
54,506
10,102
8,295
5,393
635
5,646
441
37,702
51,269
11,925
9,527
7,028
1,373
5,951
1,419
123,789
126,194
3. RESEARCH GRANTS AND CONTRACTS
Grants
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
Income from research grants and contracts includes deferred capital grants released in the year of £4,125,000
(1999 - £4,447,000).
21
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
4. OTHER OPERATING INCOME
Residences and catering
Health authorities
Released from deferred capital grants
Other services rendered and other income
2000
£’000
Restated
1999
£’000
12,462
18,614
2,208
42,355
11,818
17,569
1,640
41,016
75,639
72,043
Income from residences and catering and other services rendered includes deferred capital grants released in the year of £9,000
(1999 - £17,000).
The 1998/99 figure for deferred capital grants released has been reduced by £2,107,000 due to revised classification between HEFCE
and other grants.
The 1998/99 figure for other income has been increased by £1,827,000 to include income from general and specific donations,
previously shown under ‘Endowment income and interest receivable’.
The 1998/99 figure for other services rendered income has been increased by £1,506,000 due to the revised accounting treatment of
certain departmental discretionary account balances.
5. ENDOWMENT INCOME AND INTEREST RECEIVABLE
Income from endowment asset investments (Note 18)
Other interest receivable
2000
£’000
Restated
1999
£’000
2,818
3,080
3,718
3,820
5,898
7,538
2000
£’000
Restated
1999
£’000
205,247
17,240
19,631
187,133
15,482
18,797
242,118
221,412
£
£
6. INFORMATION REGARDING EMPLOYEES
Staff costs:
Salaries and wages
NI contributions
Pension costs
Emoluments of the Provost and President:
D Roberts
C Llewellyn Smith
150,873
1/8/98 - 31/3/99
1/1/99 - 31/7/99
97,463
85,776
The emoluments of the Provost and President, UCL’s Chief Executive, are shown on the same basis as for higher paid staff.
UCL’s pension contributions to USS are paid at the same rates as for other academic staff and amounted to £19,795 in the year (1999
- £24,879).
22
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
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 consultancy work, both of which are funded from non - HEFCE funds, but excluding employers’ pensions
contributions:
Restated
2000
1999
No.
No.
£50,001
£60,001
£70,001
£80,001
£90,001
£100,001
£110,001
£120,001
£130,001
£140,001
£150,001
£160,001
£170,001
£180,001
£190,001
£200,001
-
£60,000
£70,000
£80,000
£90,000
£100,000
£110,000
£120,000
£130,000
£140,000
£150,000
£160,000
£170,000
£180,000
£190,000
£200,000
£210,000
157
114
82
40
17
32
7
14
6
3
1
1
-
136
116
39
34
9
32
8
6
2
2
1
1
The average number of staff employed, both full and part time, during the year was 8,635 (1999 - 7,862).
7. INTEREST PAYABLE
Bank loans and other loans wholly repayable within five years
Loans not wholly repayable within five years
Finance leases
23
2000
£’000
Restated
1999
£’000
271
2,067
3,644
5
2,577
5,982
2,582
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
8. ANALYSIS OF EXPENDITURE BY ACTIVITY
2000
Academic departments
Academic services
Research grants and contracts
Residences and catering
Premises
Administration
Other expenses
Staff
Costs
£’000
Other
Operating
Expenses
£’000
115,465
9,485
71,202
3,297
6,372
19,196
17,101
16,724
6,874
33,145
4,895
24,523
10,838
20,117
2,074
3,637
271
2,021
584
4,605
722
9,303
52
89
134,210
16,943
108,952
10,988
43,835
30,086
37,578
242,118
117,116
5,982
17,376
382,592
Interest
Payable Depreciation
£’000
£’000
The depreciation charge has been funded by:
Deferred capital grants released (Note 17)
General income
Total
£’000
10,999
6,377
17,376
Auditor’s remuneration for external audit
Fees paid to auditors for other services
1999
Academic departments
Academic services
Research grants and contracts
Residences and catering
Premises
Administration
Other expenses
£96,000
£50,000
Staff
Costs
£’000
Other
Operating
Expenses
£’000
103,211
8,838
69,562
2,831
5,174
18,266
13,530
12,743
6,371
38,507
5,185
20,876
11,627
19,597
1,921
644
17
902
512
4,513
715
7,067
43
94
116,856
15,721
112,582
10,652
33,761
29,936
33,238
221,412
114,906
2,582
13,846
352,746
The depreciation charge has been funded by:
Deferred capital grants released
General income
Interest
Payable Depreciation
£’000
£’000
9,208
4,638
13,846
Auditor’s remuneration for external audit
Fees paid to auditors for other services
£72,000
£12,000
24
Total
£’000
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
9. TANGIBLE ASSETS
Fixtures)
Land and Buildings
Fittings &)
Freehold) Leasehold) Equipment)
£’000)
£’000)
£’000)
UCL
Total)
£’000)
Cost
At 1 August 1999
Eastman Dental Institute at 1 August 1999
Additions at cost
Disposals
At 31 July 2000
141,520)
-)
5,584)
(10)
147,094)
76,018)
2,980)
5,665)
(51)
84,612)
72,809)
1,746)
22,597)
-)
97,152)
290,347)
4,726)
33,846)
(61)
328,858)
Depreciation
At 1 August 1999
Eastman Dental Institute at 1 August 1999
Charge for year
Disposals
At 31 July 2000
13,931)
-)
2,860)
(1)
16,790)
10,895)
456)
2,224)
(19)
13,556)
37,356)
726)
12,203)
-)
50,285)
62,182)
1,182)
17,287)
(20)
80,631)
Net Book Value
At 31 July 2000
130,304)
71,056)
46,867)
248,227)
At 31 July 1999
127,589)
67,647)
36,473)
231,709)
Fixtures)
Land and Buildings
Fittings &)
Freehold) Leasehold) Equipment)
£’000)
£’000)
£’000)
Total)
£’000)
Consolidated
Cost
At 1 August 1999
Eastman Dental Institute at 1 August 1999
Additions at cost
Disposals
At 31 July 2000
141,503)
-)
5,582)
(10)
147,075)
77,102)
2,980)
5,665)
(51)
85,696)
73,340)
1,746)
22,628)
-)
97,714)
291,945)
4,726)
33,875)
(61)
330,485)
Depreciation
At 1 August 1999
Eastman Dental Institute at 1 August 1999
Charge for year
Disposals
At 31 July 2000
13,931)
-)
2,860)
(1)
16,790)
10,950)
456)
2,252)
(19)
13,639)
37,462)
726)
12,264)
-)
50,452)
62,343)
1,182)
17,376)
(20)
80,881)
Net Book Value
At 31 July 2000
130,285)
72,057)
47,262)
249,604)
At 31 July 1999
127,572)
68,676)
36,898)
233,146)
The declared value of buildings for insurance purposes (day one basis) as at 1 August 2000 was £699.4 million (1999 - £692.5 million).
25
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
10. INTANGIBLE ASSETS
Consolidated and UCL
Patents
£’000
Cost
At 1 August 1999
Additions at cost
At 31 July 2000
1,104
393
1,497
Amortisation
At 1 August 1999
Charge for year
At 31 July 2000
1,104
78
1,182
Net Book Value
At 31 July 2000
315
At 1 August 1999
-
11. INVESTMENTS HELD AS FIXED ASSETS
Monies held on long term deposits
Other investments
Investment in subsidiaries
Investment property
Consolidated
Restated
2000
1999
£’000
£’000
UCL
2000
£’000
Restated
1999
£’000
5,510
1,238
3,195
5,302
1,731
3,010
5,510
1,234
412
-
5,302
1,726
412
-
9,943
10,043
7,156
7,440
Included in monies held on long term deposits is £5.5 million (1999 - £5.2 million) over which there is a legal charge.
The deposit represents a security fund to meet the obligations under finance leases (Note15).
The Investment Property is held on a long lease and was revalued on an Open Market Value basis as at 31 July 2000 by a member
of the RICS.
26
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
11. INVESTMENTS HELD AS FIXED ASSETS - continued
The following UCL wholly owned subsidiary companies which are incorporated and registered in England and Wales and which have
traded during the year have been consolidated into the financial statements:
UCL Trading Ltd
UCL Investments Ltd
UCL Properties Ltd
UCL Residences Ltd
UCL Enterprises Ltd
UCL Cruciform Ltd
Stanmore Implants Worldwide Ltd
Somerstown Community Sports Centre Ltd
Freemedic Plc
Contracting, consultancy and other commercial activities.
Property investment.
Property development and investment.
Commercial lettings of accommodation.
General commercial trading.
Exploitation of intellectual property in the field of bio-medicine.
Design and manufacture of orthopaedic implants.
Operation of sports centre.
Exploitation of intellectual property at the Royal Free campus.
12. ENDOWMENT ASSET INVESTMENTS
Consolidated and UCL
2000)
£’000)
Restated
1999
£’000
77,969)
1,043)
79,012)
1,360)
7,117)
(2,215)
71,862
1,039
72,901
5,986
125
85,274)
79,012
Represented by:
Fixed interest securities
Equities
Cash
31,056)
47,494)
6,724)
27,735
42,410
8,867
Total endowment asset investments
85,274)
79,012
Endowment assets at cost
73,241)
64,687
Balance at 1 August 1999
Eastman Dental Institute at 1 August 1999
School of Slavonic and East European Studies at 1 August 1999
Net additions
(Diminution)/surplus on valuation
27
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
13. DEBTORS
Consolidated
Restated
2000
1999
£’000
£’000
Amounts falling due within one year:
Invoiced debtors
Research grants and contracts
Local health authorities/hospitals
Halls of residence debtors
Tax recoverable from Inland Revenue
Advances to members of staff
Inter-company debtors
Other debtors and prepayments
Amounts falling due after one year:
Inter-company debtors
Other debtors and prepayments
UCL
2000
£’000
Restated
1999
£’000
4,891
50,686
6,938
948
6
1,621
19,289
7,014
40,731
4,311
112
28
990
12,042
3,977
50,686
6,938
948
6
1,621
1,948
19,054
5,818
40,731
4,311
112
21
990
1,747
12,533
343
84,722
288
65,516
2,321
87,499
2,413
68,676
The 1998/99 figure for other debtors has been reduced by £616,000 due to the revised treatment of certain departmental
discretionary account balances and increased by £41,000 due to revised treatment of payments due to inventors.
The debt falling due after one year of £343,000 is in respect of a secured loan in the books of Freemedic Plc. The company concluded
agreements with Nervation Ltd on 17th November 2000 for the conversion of the secured loan into a 20% equity holding and
£100,000 of redeemable preference shares in Nervation Ltd.
14. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Consolidated
Restated
2000
1999
£’000
£’000
9,990
653
27,462
26,293
3,184
826
20,163
16,858
187
170
5,494
6,725
66,480
51,525
Bank loans and overdrafts
Research grants received on account
Purchase ledger creditors
Other creditors including taxation
Obligations under finance leases
Accruals and deferred income
Inter-company creditors
UCL
2000
£’000
9,959
27,462
3,050
20,089
187
5,328
89
66,164
Restated
1999
£’000
653
26,293
826
16,841
170
6,537
499
51,819
The 1998/99 figure for research grants received on account has been reduced by £4,314,000 due to revised accounting treatment of
certain departmental discretionary account balances and the figure for other creditors increased by £41,000 due to revised treatment
of payments due to inventors.
15. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Consolidated and UCL
2000
£’000
42,522
15,090
57,612
Obligations under finance leases
Cruciform building - Private Finance Initiative
Restated
1999
£’000
42,852
11,622
54,474
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 leases will be met from payments which amount to approximately £4 million per annum.
Security is provided to the Lessors by way of annual payments into a security deposit (note 11)
28
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
16. PROVISIONS FOR LIABILITIES AND CHARGES
Consolidated and UCL
Pension)
Provision)
£’000)
Other)
£’000)
Total)
£’000)
Utilised in year
Transfer (to)/from income and expenditure account
2,308)
23)
2,331)
(178)
122)
500)
-)
500)
(466)
(34)
2,808)
23)
2,831)
(644)
88)
Balance at 31 July 2000
2,275)
-)
2,275)
Balance at 1 August 1999
Eastman Dental Institute at 1 August 1999
17. DEFERRED CAPITAL GRANTS
Fixtures)
Land and Buildings
Fittings &)
Freehold) Leasehold) Equipment)
£’000)
£’000)
£’000)
UCL
Total)
£’000)
Balance at 1 August 1999
Eastman Dental Institute at 1 August 1999
83,139)
-)
83,139)
33,052)
999)
34,051)
19,147)
-)
19,147)
135,338)
999)
136,337)
Grants received in year
Disposals
3,305)
(9)
86,435)
1,400)
-)
35,451)
10,701)
-)
29,848)
15,406)
(9)
151,734)
Contribution to depreciation for the year
(1,809)
(1,212)
(7,932)
(10,953)
Balance at 31 July 2000
84,626)
34,239)
21,916)
140,781)
Fixtures)
Land and Buildings
Fittings &)
Freehold) Leasehold) Equipment)
£’000)
£’000)
£’000)
Total)
£’000)
Consolidated
Balance at 1 August 1999
Eastman Dental Institute at 1 August 1999
83,139)
-)
83,139)
34,285)
999)
35,284)
19,147)
-)
19,147)
136,571)
999)
137,570)
Grants received in year
Disposals
3,305)
(9)
86,435)
1,400)
-)
36,684)
10,701)
-)
29,848)
15,406)
(9)
152,967)
Contribution to depreciation for the year
(1,809)
(1,258)
(7,932)
(10,999)
Balance at 31 July 2000
84,626)
35,426)
21,916)
141,968)
29
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
18. ENDOWMENTS
Consolidated and UCL
Specific)
General)
Total)
£’000)
£’000)
£’000)
Balance at 1 August 1999
Eastman Dental Institute at 1 August 1999
77,465)
1,043)
78,508)
1,422)
1,710)
(2,215)
8,298)
(2,818)
504)
-)
504)
-)
(135)
-)
-)
-)
77,969)
1,043)
79,012)
1,422)
1,575)
(2,215)
8,298)
(2,818)
84,905)
369)
85,274)
9,421)
8,454)
67,030)
-)
-)
369)
9,421)
8,454)
67,399)
84,905)
369)
85,274)
Consolidated)
£’000)
UCL)
£’000)
78,588)
3,698)
1,113)
83,399)
78,290)
3,698)
1,113)
83,101)
692)
988)
(182)
692)
988)
(439)
Balance at 31 July 2000
84,897)
84,342)
The income and expenditure account is nominally allocated to:
Departmental reserves
Earmarked project reserves
Revenue reserve
44,757)
44,950)
(4,810)
44,757)
44,950)
(5,365)
84,897)
84,342)
Consolidated)
£’000)
UCL)
£’000)
1,079)
692)
(692)
185)
(692)
-)
572)
-)
School of Slavonic and East European Studies at 1 August 1999
Additions/(disposals)
Depreciation of endowment asset investments
Income for the year
Transferred to income and expenditure (Note 5)
Balance at 31 July 2000
Representing:
Fellowships scholarships and prize funds
Chairs and lectureships funds
Other funds
19. INCOME AND EXPENDITURE ACCOUNT
Balance at 1 August 1999
Prior year adjustment for revised treatment of discretionary accounts
Eastman Dental Institute at 1 August 1999
Transfer from revaluation reserve in respect of revalued investments
sold during the year
School of Slavonic and East European Studies at 1 August 1999
Deficit for the year
20. REVALUATION RESERVE
Balance at 1 August 1999
Transfer to income and expenditure reserve in respect of revalued investments
sold during the year
Revaluation of Investment Property
Balance at 31 July 2000
30
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
21. CAPITAL COMMITMENTS
Consolidated andUCL)
Restated)
2000)
1999)
£’000)
£’000)
Commitments contracted at 31 July
Authorised but not contracted at 31 July
29,991)
5,590)
32,604)
3,200)
35,581)
35,804)
22. RECONCILIATION OF CONSOLIDATED OPERATING (DEFICIT)/SURPLUS
TO NET CASH INFLOW FROM OPERATING ACTIVITIES
2000)
£’000)
Restated)
1999)
£’000)
(170)
6,987)
17,376)
78)
(10,999)
444)
(19,112)
5,698)
(678)
13,846)
-)
(9,208)
302)
(8,406)
(3,798)
(570)
Items which are not operating activities:
Profit on disposal of fixed asset investments
Profit on disposal of tangible fixed assets
Profit on disposal of subsidiary company
Net liabilities of subsidiary company transferred on sale
Interest receivable
Interest payable
Investment income
(222)
(1,027)
-)
-)
(3,080)
5,982)
(2,818)
(37)
-)
(43)
42)
(3,820)
2,582)
(3,718)
Net Cash outflow from Operating Activities
(8,528)
(5,841)
Operating (deficit)/surplus before tax
Items not involving cash movements:
Depreciation
Amortisation of intangible assets
Deferred capital grants released to income
Decrease in stores
Increase in debtors
Increase/(decrease) in creditors
Decrease in provisions
23. ANALYSIS OF CHANGES IN NET DEBT
Restated)
1 August 1999)
£’000)
Cash)
Flows)
£’000)
Other)
Changes)
£’000)
31 July 2000)
£’000)
8,867)
4,134)
13,001)
(2,143)
(7,690)
(9,833)
-)
-)
-)
6,724)
(3,556)
3,168)
16,353)
(14,153)
-)
2,200)
(170)
255)
(272)
(187)
(54,474)
5,551)
(8,689)
(57,612)
(25,290)
(18,180)
(8,961)
(52,431)
Cash at bank and in hand
Endowment assets (Note 12)
Deposits repayable on demand (net of overdraft)
Deposits repayable at short notice
Debt due within one year (Note 14)
Debt due after one year (Note 15)
31
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
24. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2000)
£’000)
Decrease in cash in the period
Decrease in deposits repayable at short notice
Increase in debt
Change in net debt
Net debt at 1 August 1999
(9,833)
(14,153)
(3,155)
(27,141)
(25,290)
Net debt at 31 July 2000
(52,431)
25. RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
2000)
£’000)
Restated)
1999)
£’000)
Income from endowments
Other interest received
Interest paid
8,298)
2,699)
(5,466)
9,092)
3,596)
(2,002)
Net cash inflow from returns on investments and servicing of finance
5,531)
10,686)
2000)
£’000)
Restated)
1999)
£’000)
(31,066)
(393)
(200)
(9,260)
(40,919)
(46,683)
-)
(964)
(4,302)
(51,949)
1,082)
1,075)
1,059)
-)
15,406)
-)
1,575)
-)
1,390)
-)
1)
30,085)
(35)
646)
(20,722)
(19,862)
2000)
£’000)
Restated)
1999)
£’000)
Mortgage and Loans acquired
Mortgage and Loan Capital repayments
-)
(255)
812)
(43)
Net cash (outflow)/inflow from financing
(255)
769)
26. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of tangible fixed assets
Purchase of intangible fixed assets
Purchase of fixed asset investments
Net purchase of endowment asset investments
Total payments to acquire fixed and endowment assets
Cash acquired on merger with School of Slavonic and East European Studies
Proceeds from disposal of fixed asset investments
Proceeds from disposal of tangible fixed assets
Proceeds from sale of subsidiary
Capital grants received towards the purchase of tangible assets
Capital grants transferred from endowments
Endowments received
Net cash outflow from capital expenditure and financial investment
27. FINANCING
32
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
28. ACCESS FUNDS
Consolidated andUCL)
Restated)
2000)
1999)
£’000)
£’000)
Funding Council grants
Interest earned
Disbursed to students
807)
12)
819)
(795)
549)
6)
555)
(555)
24)
-)
Funding Council grants are available solely for students; UCL acts only as paying agent. The grants and related disbursements are
therefore excluded from the income and expenditure account.
29. PENSION FUNDS
The two principal pension schemes for UCL’s staff are the Universities Superannuation Scheme (USS) and the Superannuation
Arrangements of the University of London (SAUL). Assets of each scheme are held in separate trustee administered funds. The
schemes are defined benefit schemes which are externally funded and valued every three years by actuaries using the Projected Unit
Method. The rates of contribution are determined by the Trustees on the advice of actuaries. The assumptions and other data which
have the most significant effect on the determination of the contribution levels are as follows:
Latest actuarial valuation
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
USS)
SAUL)
31-Mar-99)
4.5%)
3.6%)
2.6%)
31-Mar-99)
4.5%)
4.1%)*
2.6%)
£18,870 million
£846.6 million)
108%)
120%)
2000)
£’000)
Restated)
1999)
£’000)
15,710)
2,706)
1,215)
14,115)
2,153)
2,529)
19,631)
18,797)
* Plus age related promotional scale
The total pension costs for UCL were:
Contribution to USS
Contribution to SAUL
Contribution to other pension schemes
33
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
30. RELATED PARTY TRANSACTIONS
Transactions with subsidiaries of UCL have been eliminated on consolidation and no disclosure of these transactions has therefore
been given. UCL has no related party transactions which require disclosure under FRS 8.
31. CONTINGENT LIABILITY
UCL is a member of UM Association (Terrorism) Ltd, a university mutual company limited by guarantee, formed to provide cover
for losses arising from acts of terrorism. If the association suffers a shortfall in any one year, members are liable for their pro rata share.
The scheme’s ability to pay claims is derived from one of the following sources:
(a) £15m ‘internal’ loan facility from participating member institutions (UCL is not a participating institution);
(b) £200m aggregate layer of ‘excess’ cover obtained through the Lloyds insurance market.
Multiple losses exceeding £125 million may result in a supplementary call for funding from the 78 members of the scheme.
32. MERGER WITH THE EASTMAN DENTAL INSTITUTE
The Consolidated restated reserves and endowments of UCL and Eastman Dental Institute were as follows as at 1 August 1999:
£’000
University College London (Pre Merger)
Eastman Dental Institute (EDI)
161,334
2,156
163,490
The analysis of the principal components of the income and expenditure accounts and statements of total recognised gains and losses
for the prior year are as follows:
1998/99
UCL
£’000
EDI
£’000
Total for
the year
£’000
350,886
344,012
8,847
8,743
359,733
352,755
6,874
104
6,978
Surplus for the year
6,874
104
6,978
Add movements:
EDI reserves at 1 August 1998
Endowment funds
Revaluation reserve
6,107
150
1,009
1,043
-
1,009
7,150
150
Total recognised gains in the period
13,131
2,156
15,287
Income and expenditure account
Income
Expenditure
Surplus for the year
Total recognised gains and losses
34
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
33. INSTITUTE OF OPHTHALMOLOGY
INCOME AND EXPENDITURE ACCOUNT
2000)
£’000)
1999
£’000
2,581)
428)
4,523)
2,696)
256)
2,076
390
4,872
2,351
326
10,484)
10,015
6,783)
4,339)
6,488
3,518
11,122)
10,006
(638)
9
2000)
£’000)
1999
£’000
3,831)
562)
8,738)
3,380)
653)
3,555
495
9,084
3,369
561
17,164)
17,064
Staff costs
Other operating expenses
11,216)
5,407)
10,408
5,922
Total expenditure
16,623)
16,330
541)
734
INCOME
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Endowment income and interest receivable
Total income
EXPENDITURE
Staff costs
Other operating expenses
Total expenditure
(DEFICIT)/SURPLUS FOR THE YEAR
34. INSTITUTE OF NEUROLOGY
INCOME AND EXPENDITURE ACCOUNT
INCOME
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Endowment income and interest receivable
Total income
EXPENDITURE
SURPLUS FOR THE YEAR
35
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
NOTES TO THE ACCOUNTS (Continued)
35. INSTITUTE OF CHILD HEALTH
INCOME AND EXPENDITURE ACCOUNT
2000)
£’000)
1999)
£’000)
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Endowment income and interest receivable
6,089)
1,031)
15,570)
4,273)
232)
5,479)
968)
12,684)
4,527)
213)
Total income
27,195)
23,871)
Staff costs
Other operating expenses
Interest payable
Depreciation
17,350)
9,336)
3)
581)
14,545)
8,602)
5)
885)
Total expenditure
27,270)
24,037)
(75)
(166)
2000)
£’000)
1999)
£’000)
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Endowment income and interest receivable
2,744)
3,088)
1,140)
1,491)
239)
2,733)
2,595)
1,437)
1,814)
268)
Total income
8,702)
8,847)
Staff costs
Other operating expenses
Interest payable
Depreciation
6,088)
1,918)
62)
582)
5,710)
2,683)
12)
338)
Total expenditure
8,650)
8,743)
52)
104)
INCOME
EXPENDITURE
DEFICIT FOR THE YEAR
36.
EASTMAN DENTAL INSTITUTE
INCOME AND EXPENDITURE ACCOUNT
INCOME
EXPENDITURE
SURPLUS FOR THE YEAR
36
UNIVERSITY COLLEGE LONDON
REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000
FINANCIAL SUMMARIES (Unaudited)
2000
£’000
1999
£’000
1998
£’000
1997
£’000
1996
£’000
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
117,521
52,049
123,789
75,639
6,499
5,898
104,928
48,993
126,194
72,043
37
7,538
93,275
47,465
115,401
63,148
10,934
83,929
42,880
96,299
56,598
6,760
82,078
36,882
69,109
47,276
5,117
Total income
381,395
359,733
330,223
286,466
240,462
Staff costs
Other operating expenses
Interest payable
Depreciation
242,118
117,116
5,982
17,376
221,412
114,906
2,582
13,846
200,763
103,424
3,527
10,711
173,863
89,720
3,882
9,327
142,195
82,956
2,461
5,958
Total expenditure
382,592
352,746
318,425
276,792
233,570
6,987
11,798
9,674
6,892
-
-
-
-
6,987
11,798
9,674
6,892
9
-
-
-
6,978
11,798
9,674
6,892
INCOME
EXPENDITURE
(DEFICIT)/SURPLUS FOR THE
YEAR BEFORE DISPOSAL OF
FIXED ASSETS AND BEFORE TAX
Profit on disposal of tangible fixed assets
(DEFICIT)/SURPLUS FOR THE
YEAR AFTER DISPOSAL OF
FIXED ASSETS BUT BEFORE TAX
Taxation
(1,197)
1,027
(170)
12
(DEFICIT)/SURPLUS FOR
THE YEAR AFTER TAX
(182)
NOTE
(i) The above summary includes mergers with a number of institutions which in the years of merger achieved turnover as follows:
The Institute of Ophthalmology (1995-96)
The Institute of Child Health (1996-97)
The Institute of Neurology (1997-98)
The Royal Free Hospital School of Medicine (1998-99)
The Eastman Dental Institute (1999-00)
The School of Slavonic and East European Studies (1999-00)
£ 8,611,000
£ 22,466,000
£ 15,734,000
£ 32,312,000
£ 8,702,000
£ 4,001,000
(ii) The 1999 figures have been restated by the inclusion of The Eastman Dental Institute as disclosed in note 32. The 1998 figures
were restated for the inclusion of The Royal Free Hospital School of Medicine. The 1997 figures were restated for the inclusion
of The Institute of Neurology. There is no restatement of prior years’ figures for the other mergers.
37