Reports and Financial Statements
For the year ended 31 July 2002
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Committee Membership
Council 2001-2002
Finance Committee 2001-2002
Lay Members:
Lord Young of Graffham•* (Chairman)
Mr C. W. Jonas•* (Vice-Chairman)
Mr K. J. Hawkins• (Treasurer)
Viscount Bearsted
Mr B. W. Bennett
Sir John Birch
Ms A. S. Biss*
Sister Teresa Finn
Baroness Flather of Windsor and Maidenhead
Mr R. T. Fox
Sir Alan Greengross•*
Mr R. A. Lyons
Miss M. F. Rudland
Ms J. Salmon
Dr P. R. Williams
Professor A. J. Zuckerman
Lay Members:
Mr K. J. Hawkins (Chair)
Mr J. E. Bellamy
Mr D. M. M. Dutton
Mr R. T. Fox
Mr R. S. Horsman
Mr C. W. Jonas
Professor P.G. Moore
Lord Young of Graffham
Academic Members:
Professor Sir Chris Llewellyn Smith•* (Provost)
Professor R. D. Ashton*
Professor D. A. Brown
Professor I. H. Dennis
Dr M. M. Dworetsky
Professor H. D. Griffiths
Professor C. E. Hawley
Professor A. R. Lord
Dr S. Meghji
Professor K. M. Spyer
Dr W. Stephenson
Dr N. R. N. Tyacke
Professor P. A. Wood
Vice-Provosts:
Professor D. T. Delpy
Professor R. S. J. Frackowiak (from 1/7/02)
Miss M. J. Gallyer
Professor R. J. Levinsky
Professor M. J. Worton
Observers:
Mr A. Bethell
Mr M. T. Else
Professor H. J. F. Hodgson
Professor D. S. Latchman
Mr R. Naylor
Dr R. Persaud
Academic Members:
Professor Sir Chris Llewellyn Smith (Provost)
Professor I. D. L. Bogle
Dr M. M. Dworetsky
(Professor R. S. J. Frackowiak)
Professor H. G. Genn
Mr P. S. McLennan
UCL Union:
Mr S. Luscombe
Audit Committee 2001-2002
Lay Members:
Sir Alan Greengross (Chair)
Ms A. S. Biss
Sir John Birch
Mr J. R. Hustler
Investments Committee 2001-2002
Lay Members:
Mr K. J. Hawkins (Chair)
Mr R. G. Cottam
Mr D. M. M. Dutton
Mr R. T. Fox
Mr H. Stevenson
UCL Union:
Ms U. Brown
Mr D. Gibbons
Mr S. Luscombe
•
*
denotes also member of Remuneration Committee
denotes also member of Nominations Committee
Table of Contents
1
2
3
4
5
6
7
8
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Financial Highlights
Treasurer’s Report
Corporate Governance
Responsibilities of the Council of UCL
Independent Auditors’ Report to the
Members of the Council of UCL
Statement of Principal Accounting Policies
Consolidated Income and Expenditure Account
Consolidated Balance Sheet
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10
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24
Balance Sheet
Statement of Total Recognised Gains and Losses
and of Cash Flow
Notes to the Accounts
Financial Summaries (unaudited)
Disclaimer
An audit does not provide assurance on the maintenance and integrity of the
website, including controls used to achieve this, and in particular on whether any
changes may have occurred to the financial statements since first published. These
matters are the responsibility of the Council but no control procedures can provide
absolute assurance in this area.
Legislation in the United Kingdom governing the preparation and dissemination of
financial statements differs from legislation in other jurisdictions.
Financial Highlights
2002
2001
Change
£m
£m
%
Consolidated Income & Expenditure account
Funding council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Endowment income and interest receivable
127.9
59.5
148.0
90.1
6.0
125.3
55.7
141.0
84.7
5.6
2.1
6.8
5.0
6.4
7.1
Total income
431.5
412.3
4.7
Total expenditure
432.7
415.1
4.2
Profit on disposal of fixed asset investments
Profit on disposal of tangible fixed assets
0.5
1.5
2.2
(Deficit)/surplus for the year
(0.7)
0.9
Consolidated Balance Sheet
Fixed assets
Endowment asset investments
Net current assets
304.0
73.2
33.5
281.0
80.7
22.9
8.2
(9.3)
46.3
Total assets less current liabilities
Long-term liabilities and provisions
Minority interest
410.7
(79.9)
(0.7)
384.6
(60.0)
(0.8)
6.8
33.2
(12.5)
Total net assets
330.1
323.8
1.9
Represented by:
Deferred capital grants
Endowments
Reserves
169.2
73.2
87.7
154.9
80.7
88.2
9.2
(9.3)
(0.6)
(8.0)
12.0
(1.8)
(0.3)
2002
no.
2001
no.
17,317
8,876
16,850
8,789
Other key statistics
Consolidated recognised losses
Consolidated movement in cash flow
Student numbers
Average payroll numbers
2.8
1.0
1 University College London Reports and Financial Statements 2001-2002
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 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 December 2002 meeting, the Council carried out an annual
assessment for the year ended 31 July 2002 by considering a report from
the Audit Committee, and taking account of events since 31 July 2002.
The Council is of the view that there is an ongoing process for identifying,
evaluating and managing the Group’s key risks, and that it has been in
place for the whole of the year ended 31 July 2002, 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 on the Combined Code, as deemed appropriate for
higher education.
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, the Treasurer, 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 has formally
identified those items of business which it retains to itself for collective
decision. The Council has also considered amendments to its Charter and
Statutes and is in ongoing discussion with officers of the Privy Council
concerning formal adoption of these changes. 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 Board, Remuneration Committee and
Nominations Committee.
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.
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. The Committee considers
reports from the Internal Auditors arising from their audits, which highlight
significant issues and recommendations made for the improvement of
UCL’s system of internal controls. 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 may also consider key risks identified by other Committees, 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 inter alia monitoring the effectiveness of the
academic quality assurance strategy, encompassing policies and
procedures in respect of quality audit, quality enhancement and subject
review.
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.
2 University College London Reports and Financial Statements 2001-2002
Treasurer’s Report
Scope of Financial Statements
The Council of UCL is responsible for these financial statements, as
described on page 4. The format of the financial statements follow the
Statement of Recommended Practice: Accounting for Further and Higher
Education Institutions.
The financial statements include the consolidated results of UCL’s trading
activities, details of which are shown at Note 13 and whose commercial
activities are, for legal and taxation reasons, more appropriately
channelled through limited companies.
Cashflow
Effective treasury management was strengthened greatly during the
course of the year, determined primarily from the very extensive capital
programme which has been embarked upon. £20 million of the loan
facility with the Royal Bank of Scotland was drawn down.
Results for the year
UCL consolidated Income and Expenditure results for the years ended 31
July are summarised as follows:
Capital projects
As already mentioned, UCL is in the midst of a very extensive capital
programme. Funding in excess of £100 million has been gained under the
JIF and SRIF initiatives. These capital developments, which will continue
over the next few years, will ensure that at least some of our science and
medical infrastructural needs are met. The list of projects is long but,
amongst the largest, includes some new facilities for the medical school,
an engineering block, molecular neurosciences building and an auditory
research facility. In addition, we are embarking on further developments
to increase our accommodation needs with new residences and
improvements to some of the older residential stock.
2002
£m
Income
Expenditure
Profit on disposal of assets
(Deficit)/Surplus for the year
431.5
(432.7)
0.5
(0.7)
2001
£m
412.3
(415.1)
3.7
0.9
The bottom line figures for the last two years demonstrate the sustained
team effort across the whole of UCL in meeting the Income Generation
and Savings Programme without which UCL would be reporting a very
much bleaker picture. This once again reflects the very real challenge in
achieving a balanced position against a background of continued
Government under-funding. It is pleasing to note some positive financial
highlights on page 1, including: total income of £431m (+ 4.7%); an
increase of 6.8% and 5.0% respectively in Academic Fees and Research
Income, and an increase in HEFCE income of 2.1%. At 31 July 2002, total
accumulated funds on the Income and Expenditure Account amounted to
£85 million, of which £67 million was for departmental purposes, £35
million for earmarked projects, and offset by £17 million accumulated
deficit, arising from UCL’s operating budget over a number of years.
Tangible fixed asset additions amounted to £45 million, with £33 million
relating to new and refurbished buildings, reflecting UCL’s continued
commitment to improve its infrastructure. A very substantial contribution
to the cost of these developments is provided by external sources and at
the year end a total of £169 million was held as a deferred capital grant
to fund specific projects. UCL has a substantial capital programme which
over the next few years amounts to some £140 million.
UCL welcomes the announcements from the 2002 Spending Review, and
the indication of significant additional government funding to enable
universities to begin to reduce the effects of past under-funding, and we
hope that there might also be additional funding to achieve infrastructural
improvement in the Arts and Humanities departments.
UCL now has more than 17,000 students of which 30% are from outside
the UK making UCL a particularly exciting and vibrant multi-ethnic and
multicultural university. An extensive teaching programme is in place
comprising 230 undergraduate programmes and more than 190 taught
Masters’ programmes. Research teaching to MPhil or PhD can be
undertaken in 72 departments across UCL.
The results of the 2001 Research Assessment Exercise (RAE) were
published last December and 40 out of the 48 submissions, comprising
86% of staff, are now rated 5* or 5 (reflecting that a significant element
of the research activity is rated internationally excellent). This is further
improvement on the 1996 RAE and evidences the strength of UCL as a
major research powerhouse in the UK, and all academic staff of UCL
should be congratulated on this notable achievement.
Investment performance
The decline in stock markets world-wide and equities in particular, has
made it a difficult year once more and the value of endowment asset
investments was £73 million at the Balance Sheet date.
The Investments Committee, aided by a Specialist Consultancy Service,
actively monitors performance and ensures income targets are met, as
far as possible. The Committee carried out a planned review of
investment managers during the year, resulting in a change to Dresdner
RCM Global Investors on 1 August, with investments managed by
Cazenove up until 31 July 2002.
The cash position is regularly monitored and whenever possible funds
surplus to requirements are deposited in global funds or placed with cash
managers.
I would also like to take this opportunity to thank the many donors and
benefactors of UCL, including the Special Trustees of UCL’s various
associated Hospitals, without whose support many of our capital
developments would not have been possible.
Creditors policy
UCL’s policy is to abide by the terms of business agreed with suppliers.
Staff and their involvement
Considerable value is placed on the involvement of UCL’s employees and
on good communication with them. Staff are informed of developments
within the organisation through publication of a regular newsletter and by
increasing use of the Intranet and Web sites. All staff are encouraged to
participate in formal and informal discussion at all levels throughout UCL.
A Staff Training and Development unit provides technical and general
training to all levels of staff.
Other major activity
Collaborative research has featured greatly over the year. UCL now has
two AHRB-funded Centres: the Centre for Evolutionary Analysis of Cultural
Behaviour which has begun pioneering work on the application of method
and theory from evolutionary biology to understanding the history of
human culture, and which is the first of its kind in the world; and the
UCL/SOAS centre for the study of Asian and African Literatures, whose
primary activity for the next five years will be the support of eight
research projects.
At the School of Slavonic and East European Studies a Centre for the
Study of Economic and Social Change in Europe has been set up. In the
Faculty of Laws three new Research Institutes have been established: the
Institute of Global Law; the Centre for Law Relating to the Environment;
the Institute of Philanthropy. These facilities along with the
Nanotechnology Centre (in collaboration with Imperial College) and the
New Engineering Building – both SRIF funded – will promote new
interdisciplinary activities and improve the research and teaching
infrastructure at UCL by bringing together collaborating departments into a
more cohesive and contiguous grouping.
Conclusion
Despite UCL’s financial statements showing a small Income and
Expenditure Account deficit, the significant efforts of staff across the
whole of UCL, particularly in progressing departmental plans towards
achieving targets under the income generation and savings programme,
have been significant.
Although the coming year will require the continuation of the income
generation and savings programme, the announcement of additional
government funding during the course of the next three years, if adequate,
should provide a much needed fillip for Higher Education. UCL is well
placed to respond quickly in a changing environment, through the
development of Academic Plans and future strategy, to take advantage of
new funding streams with which to realise its objectives and aspirations.
Kerry J Hawkins
Treasurer
3 University College London Reports and Financial Statements 2001-2002
Responsiblities of the Council of UCL
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
Institutions 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.
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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.
Independent Auditors’ Report
to the Members of the Council of UCL
We have audited the financial statements of University College London for
the year ended 31 July 2002 which comprise the income and expenditure
account, the balance sheet, the cash flow statement, the statement of
total recognised gains and losses and the related notes 1 to 34. These
financial statements have been prepared under the accounting policies
set out therein.
Respective responsibilities of the Council and auditors
As described in the responsibilities of the Council, the Council is
responsible for the preparation of the financial statements in accordance
with applicable United Kingdom law and accounting standards. Our
responsibilities as independent auditors, are established by statute, the
Audit 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 Institutions. 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 UCL 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 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, and
the corporate governance statement, and 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.
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 2002 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 for Further and Higher Education Institutions;
b) in all material respects income from the Higher Education Funding
Council for England, grants and income for specific purposes from
other restricted funds administered by UCL have been applied for the
purposes for which they were received; and
c) in all material respects income has been applied in accordance with
UCL’s statutes and, where appropriate, with the Financial
Memorandum dated June 2000 with the Higher Education Funding
Council for England.
Deloitte & Touche
Chartered Accountants
and Registered Auditors
Hill House
1 Little New St
London EC4A 3TR
19 December 2002
5 University College London Reports and Financial Statements 2001-2002
Statement of Principal Accounting Policies
1.
2.
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 Institutions (SORP) and
applicable United Kingdom Accounting Standards.
8.
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.
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.
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.
4.
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 each of the pension
schemes in operation at UCL can be found at note 32.
5.
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.
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.
7.
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.
Major refurbishments and fixtures and fittings are capitalised and
depreciated as follows:
Major refurbishments
20 years
Fixtures and fittings
10 years
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Investment Property
Investment properties are stated in the Balance Sheet at their open
market value. No depreciation is charged on such properties.
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.
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. 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.
11. 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.
12. Investments
Both Fixed Asset and Endowment Asset Investments are stated at
market value in the Balance Sheet. Subsidiary company investments
are stated at cost less provision for impairment.
13. 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.
14. 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.
Consolidated Income
and Expenditure Account
Year ended 31 July 2002
Restated
Income
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Endowment income and interest receivable
2002
2001
Note
£’000
£’000
1
2
3
4
5
127,862
59,538
148,034
90,110
5,966
125,250
55,740
141,000
84,692
5,601
431,510
412,283
273,137
129,503
7,119
23,003
258,499
131,096
6,294
19,211
432,762
415,100
Total Income
Expenditure
Staff costs
Other operating expenses
Interest payable
Depreciation
6
7
8
9
Total Expenditure
Deficit for the year before disposal of fixed assets and before tax
Profit on disposal of fixed asset investments
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 disposal of fixed assets and tax
Minority interest
(Deficit)/surplus for the year
10
(1,252)
(2,817)
478
1,493
2,206
(774)
882
(10)
(2)
(784)
880
48
13
(736)
893
7 University College London Reports and Financial Statements 2001-2002
Consolidated Balance Sheet
As at 31 July 2002
Restated
Note
Fixed assets
Tangible assets
Intangible assets
Investments
11
12
13
Endowment asset investments
14
Current assets
Stores
Debtors
Short term deposits and investments
Cash at bank and in hand
15
Creditors: amounts falling due within one year
16
Net current assets
Total assets less current liabilities
2002
2001
£'000
£'000
291,510
839
11,651
269,237
672
11,058
304,000
280,967
73,175
80,726
744
100,540
454
5,011
695
97,974
1
2,667
106,749
101,337
(73,250)
(78,421)
33,499
22,916
410,674
384,609
Creditors: amounts falling due after more than one year
17
(77,744)
(57,786)
Provisions for liabilities and charges
18
(2,136)
(2,222)
(712)
(760)
Minority interest
Net assets
Deferred capital grants
330,082
323,841
169,196
154,918
72,810
365
80,351
375
20
73,175
80,726
21
22
23
85,011
1,552
1,148
85,747
1,302
1,148
87,711
88,197
330,082
323,841
19
Endowments
Specific
General
Reserves
Income and expenditure account
Revaluation reserve
Other reserves
Total
Approved by Council on 19 December 2002
K. J. Hawkins
Treasurer
Sir Derek Roberts
Provost and President
J. W. Foster
Director of Finance
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Balance Sheet
As at 31 July 2002
Restated
Note
Fixed assets
Tangible assets
Intangible assets
Investments
11
12
13
Endowment asset investments
14
Current assets
Stores
Debtors
Short term deposits
Cash at bank and in hand
15
Creditors: amounts falling due within one year
16
Net current assets
Total assets less current liabilities
2002
2001
£'000
£'000
290,108
839
7,629
267,830
672
7,360
298,576
275,862
73,175
80,726
353
103,680
453
2,246
413
100,562
-
106,732
100,975
(72,787)
(78,071)
33,945
22,904
405,696
379,492
Creditors: amounts falling due after more than one year
17
(77,744)
(57,786)
Provisions for liabilities and charges
18
(2,136)
(2,222)
Net assets
Deferred capital grants
325,816
319,484
168,094
153,777
72,810
365
80,351
375
20
73,175
80,726
21
84,547
84,981
325,816
319,484
19
Endowments
Specific
General
Reserves
Income and expenditure account
Total
Approved by Council on 19 December 2002
K. J. Hawkins
Treasurer
Sir Derek Roberts
Provost and President
J. W. Foster
Director of Finance
9 University College London Reports and Financial Statements 2001-2002
Statement of Total Recognised
Gains and Losses and of Cash Flow
Statement of consolidated total recognised gains and losses
Year ended 31 July 2002
Restated
Note
(Deficit)/surplus after depreciation of assets
Bloomsbury Bioseed Fund Ltd reserves at 1 August 2000
Diminution of endowment asset investments
Endowment income retained for the year
New endowments
Unrealised surplus on revaluation of investment property
20
20
20
22
2002
2001
£'000
£'000
(736)
(9,688)
(1,136)
3,273
250
893
1,105
(10,245)
3,218
2,479
730
(8,037)
(1,820)
Reconciliation to closing reserves and endowments
Opening reserves and endowments
Total recognised gains and losses for the year
168,923
(8,037)
Closing reserves and endowments
160,886
Reconciliation of movement in funds to the last annual report
Total recognised gains and losses relating to the year
Prior period adjustment
21
Total movement in funds since last annual report
(8,037)
31
(8,006)
Statement of consolidated cash flow
Year ended 31 July 2002
Note
Net cash inflow from operating activities
Returns on investments and servicing of finance
Taxation
Capital expenditure and financial investment
29
7,995
(1,879)
(10)
(13,428)
Cash outflow before use of liquid resources and financing
Management of liquid resources
Financing
26
30
(7,322)
(453)
19,796
Increase/(decrease) in cash in the year
26
12,021
10 University College London Reports and Financial Statements 2001-2002
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25
28
2002
£'000
Restated
2001
£'000
4,096
2,881
(2)
(9,273)
(2,298)
2,200
(187)
(285)
Notes to the Accounts
1. Funding council grants
Recurrent Grant - HEFCE
Deferred Capital Grants released in year
2. Academic fees and support grants
Full-time students charged home fees
Full-time students charged overseas fees
Part time fees
Other fees
Research training support grants
Short course fees
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
2002
2001
£'000
£'000
121,274
6,588
119,666
5,584
127,862
125,250
2002
£'000
2001
£'000
19,432
26,206
3,239
3,323
459
6,879
18,966
22,700
3,068
3,060
507
7,439
59,538
55,740
2002
£'000
2001
£'000
113,052
34,982
106,355
34,645
148,034
141,000
45,811
67,241
10,277
9,629
7,327
1,038
6,294
417
42,165
64,191
10,285
8,951
5,790
843
8,084
691
148,034
141,000
Income from research grants and contracts includes deferred capital grants released in the year of £6,008,000 (2001 - £4,500,000).
4. Other operating income
Residences and catering
Other services rendered
Health authorities
Released from deferred capital grants
Other income
2002
£'000
2001
£'000
13,252
26,231
24,061
2,511
24,055
12,621
24,410
22,605
2,474
22,582
90,110
84,692
2002
£'000
2001
£'000
3,210
2,756
2,865
2,736
5,966
5,601
Income from residences and catering includes deferred capital grants released in the year of £9,000 (2001 - £9,000)
5. Endowment income and interest receivable
Income from endowment asset investments (Note 20)
Other interest receivable
11 University College London Reports and Financial Statements 2001-2002
Notes to the Accounts
Restated
6. Information regarding employees
Staff costs:
Salaries and wages
NI contributions
Other pension costs
Emoluments of the Provost and President:
C Llewellyn Smith
Salary
Pension
2002
2001
£'000
£'000
231,178
18,429
23,530
218,865
18,070
21,564
273,137
258,499
£
£
164,035
22,965
156,134
21,858
187,000
177,992
The emoluments of the Provost are shown on the same basis as for higher paid staff and pension contributions to USS are paid at the same rate as
for other academic staff.
The 2000-01 figure for staff costs has been reduced by £4,314,000 due to reclassification of non contract and agency staff to other operating
expenses in line with HESA guidance.
Compensation for loss of office in respect of seven higher paid employees (2001 - two staff), totalled £452,119 (2001 - £210,104) of which £53,000
(2001 - £85,775) was reimbursed by the NHS.
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:
£50,001 - £60,000
£60,001 - £70,000
£70,001 - £80,000
£80,001 - £90,000
£90,001 - £100,000
£100,001 - £110,000
£110,001 - £120,000
£120,001 - £130,000
£130,001 - £140,000
£140,001 - £150,000
£150,001 - £160,000
£160,001 - £170,000
£170,001 - £180,000
£180,001 - £190,000
£190,001 - £200,000
The average number of individuals paid through the payroll during the year was 8,876 (2001 - 8,789).
12 University College London Reports and Financial Statements 2001-2002
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2002
No.
2001
No.
206
148
76
58
42
14
30
11
16
2
4
3
0
1
1
192
129
67
42
38
13
35
15
3
7
1
0
2
0
1
Restated
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
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
2002
2001
£'000
£'000
6,483
17,866
24,951
4,222
7,424
4,212
6,610
4,976
11,832
1,615
2,046
1,470
7,974
8,627
4,892
74
55
1,394
3,404
9,376
7,187
18,300
24,016
4,077
5,923
4,015
5,425
5,086
13,837
3,311
2,220
1,585
7,645
9,053
4,545
79
61
1,346
3,898
9,487
129,503
131,096
The 2000-01 figure for other operating expenses has been revised as follows:
a) reduced by £31,000 following the capitalisation of professional fees related to the acquisition of a fixed asset investment by Freemedic Ltd,
b) increased by £4,314,000 due to reclassification of non contract and agency staff from salaries and wages in line with HESA guidance. £416,000 of
this has been allocated to Residences and Catering expenditure.
8. Interest payable
Bank loans and other loans wholly repayable within five years
Loans not wholly repayable within five years
Finance leases
2002
£'000
2001
£'000
254
3,184
3,681
300
2,110
3,884
7,119
6,294
13 University College London Reports and Financial Statements 2001-2002
Notes to the Accounts
Other
Staff
Operating
Interest
Costs
£'000
Expenses
£'000
Payable
£'000
Depreciation
£'000
Total
£'000
130,752
12,043
81,426
2,287
6,723
21,272
18,634
17,497
8,976
46,087
6,483
25,365
13,674
11,421
2,028
3,767
1,324
3,160
1,011
6,008
1,111
11,482
114
117
151,409
22,030
133,521
11,909
47,337
35,060
31,496
273,137
129,503
7,119
23,003
432,762
9. Analysis of expenditure by activity
2002
Academic departments
Academic services
Research grants and contracts
Residences and catering
Premises
Administration
Other expenses
The depreciation charge has been funded by:
Deferred capital grants released (Note 19)
General income
15,116
7,887
23,003
Staff
Costs
£'000
Other
Operating
Expenses
£'000
Interest
Payable
£'000
Depreciation
£'000
Total
£'000
123,401
11,380
77,549
2,541
7,117
20,403
16,108
15,315
9,460
45,028
7,187
26,594
14,139
13,373
2,053
3,830
411
2,724
835
4,500
1,100
9,876
71
105
141,440
21,675
127,077
12,881
47,417
34,613
29,997
258,499
131,096
6,294
19,211
415,100
2001
Academic departments
Academic services
Research grants and contracts
Residences and catering
Premises
Administration
Other expenses
The depreciation charge has been funded by:
Deferred capital grants released
General income
12,567
6,644
19,211
The 2000-01 figures for staff costs and other operating expenditure have been restated, see notes 6 & 7.
10. Profit on disposal of fixed assets
During the year the Myddleton Sports Ground, jointly owned with the School of Pharmacy, was disposed of resulting in a profit of £478,000
14 University College London Reports and Financial Statements 2001-2002
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Land and Buildings
11. Tangible assets
UCL
Freehold
Leasehold
Equipment
Total
£'000
£'000
£'000
£'000
Cost
At 1 August 2001
Additions at cost
218,640
30,534
95,418
2,639
53,277
11,991
367,335
45,164
At 31 July 2001
249,174
98,057
65,268
412,499
Depreciation
At 1 August 2001
Charge for year
41,609
9,794
18,092
3,288
39,804
9,804
99,505
22,886
At 31 July 2002
51,403
21,380
49,608
122,391
Net Book Value
At 31 July 2002
197,771
76,677
15,660
290,108
At 1 August 2001
177,031
77,326
13,473
267,830
Land and Buildings
Freehold
Leasehold
£'000
£'000
Equipment
£'000
Total
£'000
Consolidated
Cost
At 1 August 2001
Additions at cost
218,676
30,534
96,518
2,639
53,954
12,103
369,148
45,276
At 31 July 2002
249,210
99,157
66,057
414,424
Depreciation
At 1 August 2001
Charge for year
41,636
9,800
18,218
3,315
40,057
9,888
99,911
23,003
At 31 July 2002
51,436
21,533
49,945
122,914
Net Book Value
At 31 July 2002
197,774
77,624
16,112
291,510
At 1 August 2001
177,040
78,300
13,897
269,237
The declared value of buildings for insurance purposes (day one basis) as at 1 August 2002 was £863.2 million (2001 - £848.8 million).
The above includes assets held under finance leases. At 31 July 2002 the net book value of these assets was £30.353 million (2001 - £30.991 million)
with a depreciation charge for the year of £638,000 (2001 - £638,000)
12. Intangible assets (patents)
Consolidated and UCL
2002
£'000
2001
£'000
Cost
At 1 August 2001
Additions at cost
2,043
443
1,497
546
At 31 July 2002
2,486
2,043
Amortisation
At 1 August 2001
Charge for year
1,371
276
1,182
189
At 31 July 2002
1,647
1,371
Net Book Value
At 31 July 2002
839
672
At 1 August 2001
672
315
15 University College London Reports and Financial Statements 2001-2002
Notes to the Accounts
Consolidated
UCL
Restated
13. Investments held as fixed assets
Monies held on long term deposits
Other investments
Investment in subsidiaries
Investment property
2002
£'000
2001
£'000
2002
£'000
2001
£'000
6,035
1,441
4,175
5,766
1,367
3,925
6,035
472
1,122
-
5,766
472
1,122
-
11,651
11,058
7,629
7,360
The 2000-01 consolidated figures have been restated to include £541,000 investment by Freemedic Plc previously disclosed as a current asset
investment.
Included in monies held on long term deposits is £5.98 million (2001 - £5.71 million) over which there is a legal charge. The deposit represents a
security fund to meet the obligations under finance leases (Note17).
The following UCL wholly owned (unless indicated otherwise) 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 by Guarantee)
Freemedic Plc
Medic-to-Medic Ltd (100% subsidiary of Freemedic Plc)
Bloomsbury Bioseed Fund Ltd (70%)
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 in bio-medicine.
Development of an IT solution to integrated patient care.
Investment in biotechnology start-ups.
14. Endowment asset investments
Consolidated and UCL
2002
£'000
Balance at 1 August 2001
Net additions
Diminution in valuation
80,726
2,137
(9,688)
85,274
5,697
(10,245)
73,175
80,726
Represented by:
Fixed interest securities
Equities
Cash
30,291
32,891
9,993
30,633
41,376
8,717
Total endowment asset investments
73,175
80,726
Endowment assets at cost
72,108
71,120
Consolidated
15. Debtors
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
UCL
2002
£'000
Restated
2001
£'000
2002
£'000
Restated
2001
£'000
7,524
59,347
10,484
479
9
1,604
21,093
6,624
59,679
9,191
466
33
1,648
20,333
6,255
59,347
10,484
479
9
1,604
3,021
20,518
5,487
59,679
9,191
466
33
1,648
2,028
19,942
-
-
1,963
2,088
100,540
97,974
103,680
100,562
The 2000-01 figures have been restated to reflect:
a) a reclassification of £784,000 from halls of residence debtors to invoiced debtors.
b) a reduction of £146,000 in intercompany debtors following the revision of gift payable by Freemedic Plc.
16 University College London Reports and Financial Statements 2001-2002
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Consolidated
UCL
Restated
16. Creditors: amounts falling due within one year
Bank Loans and 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
Restated
2002
£'000
2001
£'000
2002
£'000
2001
£'000
100
32,063
9,572
15,016
217
16,282
-
8,501
29,957
10,227
17,166
204
12,366
-
32,063
9,469
14,969
217
16,069
-
8,493
29,957
10,130
17,084
204
12,186
17
73,250
78,421
72,787
78,071
2002
£'000
2001
£'000
42,082
15,662
20,000
42,403
15,383
-
77,744
57,786
31
1,751
75,962
137
522
57,127
77,744
57,786
17. 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
Analysis of Loan repayments:
In more than one year but no more than two years
In more than two years but no more than five years
In more than five years
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 the long term liabilities will be met from payments which amount to approximately £5.5 million per annum. Security is provided to the Lessors by
way of annual payments into a security deposit (note 13).
The long term bank loan is a 25 year unsecured term loan facility.
18. Provisions for liabilities and charges (pension provision)
Consolidated and UCL
Balance at 1 August 2001
Utilised in year
Transfer from Income and Expenditure account
Balance at 31 July 2002
2002
£'000
2001
£'000
2,222
2,275
(175)
89
(172)
119
2,136
2,222
Land and Buildings
19. Deferred capital grants
UCL
Balance at 1 August 2001
Grants received in year
Contribution to depreciation for the year
Balance at 31 July 2002
Consolidated
Balance at 1 August 2001
Grants received in year
Contribution to depreciation for the year
Balance at 31 July 2002
Freehold
£'000
Leasehold
£'000
Equipment
£'000
Total
£'000
108,630
17,206
35,512
1,561
9,635
10,627
153,777
29,394
125,836
37,073
20,262
183,171
(5,330)
(1,540)
(8,207)
(15,077)
120,506
35,533
12,055
168,094
Land and Buildings
Freehold
Leasehold
£'000
£'000
Equipment
£'000
Total
£'000
108,630
17,206
36,653
1,561
9,635
10,627
154,918
29,394
125,836
38,214
20,262
184,312
(5,330)
(1,579)
(8,207)
(15,116)
120,506
36,635
12,055
169,196
17 University College London Reports and Financial Statements 2001-2002
Restated
2002
2001
25. Reconciliation of consolidated operating (deficit)/surplus to net cash inflow from operating activities
£'000
£'000
Operating (deficit)/surplus before tax
(774)
882
23,003
276
(15,116)
(49)
(2,522)
2,677
(175)
19,211
189
(12,567)
(110)
(15,917)
15,586
(172)
Items which are not operating activities:
Profit on disposal of fixed asset investments
Profit on disposal of tangible fixed assets
Interest receivable
Interest payable
Investment income
(478)
(2,756)
7,119
(3,210)
(1,493)
(2,206)
(2,736)
6,294
(2,865)
Net Cash inflow from Operating Activities
7,995
4,096
Cash
Flows
£'000
Other
Changes
£'000
31 July 2002
£'000
8,717
2,667
(8,501)
1,276
2,344
8,401
-
9,993
5,011
(100)
2,883
1
(204)
(57,786)
12,021
453
204
(13,685)
(217)
(6,273)
14,904
454
(217)
(77,744)
(55,106)
(1,007)
(6,490)
(62,603)
Items not involving cash movements:
Depreciation
Amortisation of intangible assets
Deferred capital grants released to income
Decrease in stocks
Decrease in debtors
Increase in creditors
Decrease in provisions
1 August 2001
£'000
26. Analysis of changes in net debt
Cash at bank and in hand
Endowment assets (Note 14)
Deposits repayable on demand (net of overdraft)
Overdrafts (Note 16)
Deposits repayable at short notice
Debt due within one year (Note 16)
Debt due after one year (Note 17)
2002
£'000
27. Reconciliation of net cash flow to movement in net debt
Increase in cash in the period
Increase in deposits repayable at short notice
Increase in debt
12,021
453
(19,971)
Change in net debt
Net debt at 1 August 2001
(7,497)
(55,106)
Net debt at 31 July 2002
(62,603)
28. Returns on investments and servicing of finance
2002
£'000
Restated
2001
£'000
Income from endowments
Other interest received
Interest paid
2,074
2,362
(6,315)
6,083
2,413
(5,615)
Net cash (inflow)/outflow from returns on investments and servicing of finance
(1,879)
2,881
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Notes to the Accounts
20. Endowments
Consolidated and UCL
Specific
£'000
General
£'000
Total
£'000
Balance at 1 August 2001
Additions/(disposals)
Diminution of endowment asset investments
Income for the year
Transferred to income and expenditure (Note 5)
80,351
3,283
(9,688)
2,074
(3,210)
375
(10)
-
80,726
3,273
(9,688)
2,074
(3,210)
Balance at 31 July 2002
72,810
365
73,175
Representing:
Fellowships scholarships and prize funds
Chairs and lectureships funds
Other funds
11,374
8,467
52,969
365
11,374
8,467
53,334
72,810
365
73,175
Consolidated
21. Income and expenditure account
2002
£'000
UCL
2001
£'000
2002
£'000
2001
£'000
Balance at 1 August
Bloomsbury Bioseed Fund Ltd acquired reserves
(Deficit)/surplus for the year
Prior year adjustment - Freemedic Plc
85,747
(736)
-
84,897
(43)
862
31
84,981
(434)
-
84,342
785
(146)
Balance at 31 July
85,011
85,747
84,547
84,981
The Income and Expenditure account is nominally allocated to:
Departmental Reserves
Earmarked reserves
Revenue reserves
67,178
34,952
(17,119)
67,178
34,952
(17,583)
85,011
84,547
The Freemedic Plc prior year adjustment relates to:
a) the revised amount of the gift payment payable by the subsidiary company in the accounts of UCL, and
b) the revised accounting treatment of the acquisition of an investment from current assets to fixed assets in the Consolidated accounts
22. Revaluation reserve
Consolidated
2002
£'000
2001
£'000
Balance at 1 August 2001
Revaluation of Investment Property
1,302
250
572
730
Balance at 31 July 2002
1,552
1,302
The property was sold on 9 September 2002 for £4.175 million following a sales valuation undertaken by Nelson Bakewell, Chartered Surveyors.
23. Other reserves
Consolidated
2002
£'000
2001
£'000
Balance at 1 August 2001
Bloomsbury Bioseed Fund Ltd acquired reserves - Government grants
1,148
-
1,148
Balance at 31 July 2002
1,148
1,148
2002
£'000
2001
£'000
25,000
117,783
34,010
108,224
142,783
142,234
24. Capital commitments
Consolidated and UCL
Commitments contracted at 31 July
Authorised but not contracted at 31 July
19 University College London Reports and Financial Statements 2001-2002
Notes to the Accounts
Restated
29. Capital expenditure and financial investment
2002
2001
£'000
£'000
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
(45,276)
(443)
(74)
(861)
(46,654)
(36,813)
(546)
(763)
(3,704)
(41,826)
Cash acquired on acquisition of Bloomsbury Bioseed Fund Ltd
Proceeds from disposal of fixed asset investments
Proceeds from disposal of tangible fixed assets
Capital grants received towards the purchase of tangible assets
Endowments received
81
478
29,394
3,273
2,703
1,679
6
25,686
2,479
Net cash outflow from capital expenditure and financial investment
(13,428)
2002
£'000
30. Financing
(9,273)
2001
£'000
Mortgages and loans acquired
Mortgage and loan capital repayments
20,000
(204)
(187)
Net cash inflow/(outflow) from financing
19,796
(187)
31. Hardship and access bursary funds
Consolidated and UCL
2002
£'000
2001
£'000
Balance at 1 August
Funding Council grants
Interest earned
84
664
9
24
754
9
Disbursed to students
757
(751)
787
(703)
6
84
Balance at 31 July
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.
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32. 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. 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 SERPS (State Earnings-Related Pension Scheme) and valued every
three years by 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. The assumptions and other data which have the most significant effect on the
determination of the contribution levels are as follows:
USS
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
31-Mar-99
4.5%
3.6%
2.6%
£18,870 million
108%
SAUL
31-Mar-99
4.5%
4.1%*
2.6%
£846.6 million
120%
* Plus age related promotional scale
The NHS pension scheme is available for staff who immediately prior to appointment at UCL were members of this scheme. The scheme is a defined
benefit scheme. The last actuarial valuation was at 31 March 1999 where the Government Actuaries' Report recommended that the Employers
contribution rates should remain unchanged, and the assessed notional assets and benefits are underwritten by the Government. Pension increases
are not charged to the scheme and as such the scheme is accounted for on a contributions only basis.
UCL also operates two smaller defined benefit schemes for non-academic staff.
The Federated Pension Scheme (FPS) for Middlesex Hospital Medical School staff which since merger with UCL on 1 August 1987 has become closed
to new entrants.
The Royal Free Hospital School of Medicine (RFHSM) Pension and Assurance Scheme, operated for 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.
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 2002 and for the Royal Free Hospital School of Medicine Pension and Assurance
Scheme on 1 August 2000. For the purposes of reporting under FRS17 a valuation of both schemes was undertaken on 31 July 2002, and details are
given below.
Valuation method
Valuation date (31 July)
FPS (1645)
RFHSM Pension
& Assurance Scheme
Projected Unit
Projected Unit
2002
2001
2002
2001
3.00%
3.00%
3.00%
6.50%
4.00%
5.50%
2.50%
2.50%
3.00%
7.00%
4.50%
6.00%
2.50%
2.50%
2.50%
6.70%
4.50%
6.00%
2.75%
2.75%
2.75%
6.90%
4.80%
5.80%
Projected over/(under)-funding
£2.7 m
£7.5 m
Funding level
116.9%
244.0%
51.9%
65.5%
£15.9 m
£18.6 m
£11.2 m*
£18.7 m*
£10.6 m
£5.5 m
£10.5 m
£7 m
Inflation assumption
Increase for pensions
Increase for deferred pensions
Investment return
Salary scale increase per annum
Discount rate for liabilities
Present value of liabilities
Fair value of the scheme assets
£(5.1) m
£(3.5) m
* The actuary to the FPS restated the assets and liabilities to include annuity contracts purchased in respect of current and deferred pensioners, this
has no effect on the reported surplus.
21 University College London Reports and Financial Statements 2001-2002
Notes to the Accounts
Under the transitional arrangements of FRS17 the effect of the standard is included by note only. The effects on the financial statements, when FRS 17
is fully adopted will be as follows:
Amounts included within operating profit
RFHSM Pension
FPS (1645)
& Assurance Scheme
2002
2002
£'000
£'000
Current service cost
Past service costs
177
500
459
-
Total Operating Charge
677
459
Amounts to be included on other finance costs
RFHSM Pension
& Assurance Scheme
FPS (1645)
Expected return on scheme assets
Discount on scheme liabilities
Net finance return/(charge)
2002
£'000
2002
£'000
1,248
(672)
576
472
(605)
(133)
Amounts to be included in the Statement of Total Recognised Gains and Losses (STRGL)
FPS (1645)
2002
£'000
Difference between actual and expected
return of scheme assets
Experience gains arising on scheme liabilities
Effects of changes in assumptions
underlying the present value of scheme liabilities
(2,984)
Total actual gains and losses recognised in the STRGL
(4,705)(29.6% on liabilities)
(1,063) (5.7% on assets)
(658) (4.1% on liabilities)
2002
£'000
% asset or
liability value
(1,755) (31.8% on assets)
(538) (5.1% on liabilities)
899
(1,394)(13.1% on liabilities)
2002
£'000
Balance Sheet presentation
2001
£'000
Net assets
Net pension (liability)/asset
330,082
(2,400)
323,841
4,000
Net assets including FRS17 disclosure
327,682
327,841
Reserves
Net pension (liability)/asset
87,711
(2,400)
88,197
4,000
Reserves including FRS 17 disclosure
85,311
92,197
2002
£'000
2001
£'000
18,068
3,004
2,040
405
13
17,061
2,900
1,470
122
11
23,530
21,564
The total pension costs for UCL were:
Contribution
Contribution
Contribution
Contribution
Contribution
Contribution
1
2
to
to
to
to
to
to
USS
SAUL
NHSPS
RFHSM Pension & Assurance Scheme
FPS 2
other pension schemes
1
In view of the underfunding in the RFHSM Pension and Assurance Scheme the Employer’s contributions will increase to 35.2%, from 29.7%, with
effect from 1 November 2002 which will bring contributions in line with the MFR.
Employer’s contributions are currently nil to the FPS.
22 University College London Reports and Financial Statements 2001-2002
g
% asset or
liability value
RFHSM Pension
& Assurance Scheme
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33. 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.
34. 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) The reserve fund accumulated from the net contributions of Members, approaching £10 million;
(b) £15 million 'internal' loan facility from Member institutions (UCL is not a participating institution);
(c) £300 million aggregate layer of 'excess' cover obtained through the Lloyds insurance market (structured to provide up to two single maximum losses
of £150 million each);
(d) In any indemnity year before the year has been closed, the Board may call for a supplementary contribution to be paid by each member entered for
that indemnity year (whether or not such institution remains a member at the date of such direction) of an amount that the Board thinks fit. All
supplementary contributions levied are to be calculated pro rata to the Advance Contributions (less any return of them) made in the relevant
indemnity year.
23 University College London Reports and Financial Statements 2001-2002
Financial Summaries (unaudited)
2002
2001
2000
1999
1998
£'000
£'000
£'000
£'000
£'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
127,862
59,538
148,034
90,110
5,966
125,250
55,740
141,000
84,692
5,601
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
Total income
431,510
412,283
381,395
359,733
330,223
Expenditure
Staff costs
Other operating expenses
Interest payable
Depreciation
273,137
129,503
7,119
23,003
258,499
131,096
6,294
19,211
242,118
117,116
5,982
17,376
221,412
114,906
2,582
13,846
200,763
103,424
3,527
10,711
Total expenditure
432,762
415,100
382,592
352,746
318,425
(1,252)
(2,817)
(1,197)
6,987
11,798
1,493
2,206
1,027
-
-
6,987
11,798
(Deficit)/surplus for the year before
disposal of fixed assets and before tax
Profit on disposal of fixed asset investments
Profit on disposal of tangible fixed assets
478
(Deficit)/surplus for the year after
disposal of fixed assets but before tax
(774)
882
(170)
(10)
(2)
(12)
(784)
880
(182)
Taxation
(Deficit)/surplus for the year after
disposal of fixed assets and tax
Minority interest
48
(Deficit)/surplus for the year
(736)
13
893
(9)
6,978
(182)
11,798
-
-
6,978
11,798
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 Neurology (1997-98)
£ 15,734,000
The Royal Free Hospital School of Medicine (1998-99)
£ 32,312,000
The Eastman Dental Institute (1999-00)
£ 8,702,000
The School of Slavonic and East European Studies (1999-00)
£ 4,001,000
(ii) The 1999 figures were restated for the inclusion of The Eastman Dental Institute. 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 merger.
Printed with financial sponsorship from Barclays Bank Plc
24 University College London Reports and Financial Statements 2001-2002
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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.
Notes: An audit does not provide assurance on the maintenance and integrity of the
website, including controls used to achieve this, and in particular on whether any
changes may have occurred to the financial statements since first published. These
matters are the responsibility of the Council but no control procedures can provide
absolute assurance in this area.
Legislation in the United Kingdom governing the preparation and dissemination of
financial statements differs from legislation in other jurisdictions.