Reports and Financial Statements
for the year ended 31 July 2004
Committee Membership
Council 2003-04
Finance Committee 2003-04
Lay Members:
Lord Young of Graffham◆* (Chair)
Sir Alan Greengross◆* (Vice-Chair)
Mr Kerr y Hawkins◆ (Treasurer)
Viscount Bearsted
Sir John Birch*
Ms Adele Biss◆*
Sister Teresa Finn
Baroness Flather of Windsor and Maidenhead
Mr Robin Fox
Mr Christopher Jonas◆
Mr Roger Lyons
Miss Margaret Rudland
Ms Janet Salmon
Dr Paul Williams
Lay Members:
Mr Kerr y Hawkins (Chair)
Mr Nigel Buchanan
Ms Anne Bulford
Mr David Dutton
Mr Robin Fox
Sir Alan Greengross
Mr Derek Thomas
Lord Young of Graffham
Academic Members:
Professor Malcolm Grant◆* (Provost)
Professor Ian Dennis
Professor Peter Ell
Dr Jane Ferrie
Professor Mary Fulbrook*
Professor Hugh Griffiths
Professor Christine Hawley
Professor Peter Mobbs*
Professor David Price
Dr Bill Stephenson
Dr Andrea Townsend-Nicholson
Dr Nicholas Tyacke
Professor Peter Wood
UCL Union:
Mr Alexander Coles
Ms Amy Hansen
Mr Sinan Rabee
Audit Committee 2003-04
Lay Members:
Ms Adele Biss (Chair)
Sir John Birch
Sir Alan Greengross
Mr John Hustler
Mr Mark Knight
Academic Members:
Professor Malcolm Grant (Provost)
Professor David Bogle
Professor Hazel Genn
Dr Christine Hoffmann
Dr Azara Janmohamed
Mr Peter McLennan
Professor Santa Ono
Vice-Provosts:
Professor David Delpy
Professor Richard Frackowiak
Miss Marilyn Gallyer
Professor Michael Spyer
Professor Michael Worton
UCL Union:
Mr Sinan Rabee
Investments Committee 2003-04
Lay Members:
Mr Kerr y Hawkins (Chair)
Mr Nigel Buchanan
Mr Robert Cottam
Mr David Dutton
Mr Robin Fox
Mr Hugh Stevenson
denotes also member of Remuneration Committee
* denotes also member of Nominations Committee
◆
Table of Contents
1
2
4
6
7
8
Financial Highlights
Treasurer’s Repor t
Corporate Governance
Responsibilities of the Council of UCL
Independent Auditors’ Repor t to the
Members of the Council of UCL
Statement of Principal Accounting Policies
10
11
12
13
Consolidated Income and Expenditure Account
Consolidated Balance Sheet
UCL Balance Sheet
Statements of Total Recognised Gains and
Losses and of Cash Flow
14-31 Notes to the Accounts
32
Financial Summaries (unaudited)
Financial Highlights
2004
£m
Restated
2003
£m
Change
%
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Endowment income and interest receivable
145.8
76.5
161.9
99.8
5.8
131.8
69.7
159.8
92.7
4.5
10.6
9.8
1.3
7.7
28.9
Total income
489.8
458.5
6.8
Total expenditure
485.9
457.5
6.2
(0.1)
4.1
(0.1)
0.5
(0.6)
(0.1)
1.2
(0.6)
7.7
1.5
Fixed assets
Endowment asset investments
Net current assets
375.0
77.6
63.5
325.0
75.4
36.4
15.4
2.9
74.5
Total assets less current liabilities
516.1
436.8
18.2
Non-current liabilities and provisions
(85.2)
(85.1)
0.1
(0.6)
(1.1)
(45.5)
430.3
350.6
22.7
251.1
77.6
101.6
181.2
75.4
94.0
38.6
2.9
8.1
9.9
2.7
4.7
0.4
2004
No.
2003
No.
18,991
9,055
18,337
8,986
CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT
Share of operating loss in joint ventures and associates
Profit on disposal of tangible fixed assets
Taxation
Minority interest
Transfer to accumulated income within specific endowments
SURPLUS FOR THE YEAR
CONSOLIDATED BALANCE SHEET
Minority interest
TOTAL NET ASSETS
Represented by:
Deferred grants
Endowments
Reserves
OTHER KEY STATISTICS
Consolidated recognised gains
Consolidated movement in cash flow
Student numbers
Average payroll numbers
3.6
0.8
University College London Repor ts and Financial Statements 2003/2004
1
Treasurer’s Report
Scope of financial statements
Investment performance
The Council of UCL is responsible for these financial
statements, as described on page 6. The format of
the financial statements follows the Statement of
Recommended Practice: Accounting for Further and
Higher Education Institutions.
Stock markets world-wide have shown some recovery
in recent years compared with the position three years
ago. £2 million of funds were added to the portfolio
during 2003-4, bringing the value of endowment asset
investments to £78 million, compared to £75 million
the year before.
The financial statements include the consolidated
results of UCL’s subsidiar y companies, details of
which are shown at Note 13 and whose commercial
activities are, for legal and taxation reasons, more
appropriately channelled through limited companies.
The Investments Committee, aided by a specialist
consultancy ser vice, actively monitors per formance
of the Investment Fund manager against standard
benchmarks and within their peer group, and total
returns were below our benchmark.
Results for the year
Cash flow
UCL consolidated Income and Expenditure results for
the years ended 31 July are summarised as follows:
Income
Expenditure
Share of losses in joint venture
and associated companies
Profit on disposal of assets
Taxation and minority interest
Transfer to endowments
Surplus for the year
2004
£m
2003
£m
489.8
485.9
(0.1)
458.5
(457.5)
(0.1)
4.1
0.4
(0.6)
7. 7
1.2
(0.6)
1.5
The surplus of £7.7 million achieved in 2003–04
disguises the very sustained effor t, across the
whole of UCL, necessitated by yet another Income
Generation and Savings Programme, against the
background of serious under-funding over many years.
In setting the operating budget for the year, the UCL
Council had agreed a deficit position of £2.5 million,
requiring an improvement from depar tments of
£6.8 million. The actual operating budget outturn for
the year was a deficit of £900k, representing a better
performance than target, with increased revenues
from student recruitment, including shor t-course
activity. In addition, departments were able to
contribute further to the overall financial position, with
approximately £2.5 million derived from non-core
departmental activities. The surplus also includes the
one-off profits from the sale of assets of £4.1 million.
It is pleasing to note that the financial highlights, as
detailed on page 1, include some positive aspects:
total income increasing by 6.8% to £489.8 million; an
increase of 9.8% in Academic Fee income to £76.5
million; and a 1.3% increase in Research Grants &
Contract Income to £161.9 million. The majority of
UCL’s sponsored research income is derived from two
prominent sources, with income from UK Charities
and Research Councils representing 48.1% and
30.2%, respectively, of total research income. At
31 July 2004, total accumulated funds on the Income
and Expenditure Account amounted to £99.5 million.
Tangible fixed asset additions amounted to £78.4
million, with £65.6 million relating to new and
refurbished buildings, evidence of UCL’s continuing
p rogramme of major improvements to its infrastru c t u re .
A very substantial contribution to the cost of these
developments has been provided from external sourc e s
and, at the year end, a total of £251 million was held
as a deferred capital grant to fund specific projects.
2
University College London Reports and Financial Statements 2003/2004
Cash balances have remained relatively healthy during
the year, which has meant that UCL did not have
recourse to fur ther draw on the borrowing facility with
the Royal Bank of Scotland, with total borrowing under
this arrangement remaining at £25m.
UCL’s cash position is monitored daily and surplus
funds deposited with Barclays Global Investors and
with Royal London Cash Management, to seek
optimum returns to UCL from its cash balances.
Capital projects
UCL’s capital programme will provide state-of-the-art
facilities in Arts and Sciences, thereby ensuring
that UCL maintains its position at the forefront
of excellence in international research across all
disciplines well into the 21st centur y. This major
programme of works, which includes new build and
renovation projects, exceeds £200 million. The
landscape of UCL’s campus is evolving day by day
with the rapid completion of major developments.
The Andrew Huxley building was completed some
months ago, fostering inter-disciplinarity by housing
researchers in Pharmacology and Physiology, as
well as staff from the Faculty of Social & Historical
Sciences. Staff are currently relocating to the
nine-storey extension to the Engineering building,
also on the main campus, which will accommodate
researchers in Computer Science and Medical
Physics, as well as those in Engineering. New
buildings for Auditory Research and Nanotechnology
are due for completion in December 2004 and early
2005, respectively. Substantial refurbishment is also
underway, embracing such disciplines as Biochemical
Engineering, Chemical Engineering, Anatomy,
Biochemistr y and Chemistry, Pharmacology,
Physiology, Neurology, Geography, Fine Ar t in the
Slade School and Physics. In addition, new buildings
for the School of Slavonic & East European Studies
and Anthropology and an extension to the Institute of
Child Health, are to be constructed. Having acquired
from the UCL Hospitals Trust the former Rockefeller
Nurses’ home, an exciting major development has
just begun to provide first-rate facilities and
accommodation for the Medical School including a
new Institute for Cancer Sciences.
In the autumn of 2003, the new Frances Gardner Hall
at Langton Close was completed, providing en suite
accommodation for 216 of our students within walking
distance from the main campus.
Creditors policy
UCL’s policy is to abide by the terms of business
agreed with suppliers, which typically is to make
payment within 30 days of the invoiced date.
Staff and their involvement
Considerable value is placed on the involvement
of employees at all levels and on impro v i n g
communication across a large and complex
organisation. Staff are informed of new developments
t h rough publication of a regular newsletter and by wide
use of the Intranet, and electronic and Web-based
communications. All staff are encouraged to participate
in formal and informal discussion about the future
strategic direction of UCL. A comprehensive staff
training and development programme provides general,
management and specialist training to all staff.
A major review of pay and grading structures and
conditions of employment within a new national Pay
Framework has commenced. This is being introduced
in partnership with UCL’s three recognised trade
unions with the objective of simplifying grading
structures and ensuring equal pay across all groups of
staff. This is the largest review of pay and conditions
in the last two decades and is underpinned by
evaluation of the content and complexity of all jobs.
It is aimed to implement the new pay structure in
August 2005.
As a globally competitive institution, UCL seeks to
employ a diverse workforce that reflects the
populations from which we recruit. Monitoring data
has led to the establishment of workforce equality
targets in relation to the ethnic and sex profiles of the
organisation and good progress has been made
towards achieving these targets. Monitoring of the
workforce and student profiles to ensure equality of
opportunity is well established and UCL is now
monitoring the implementation of a broad range of
employment policies to ensure that they do not have a
discriminator y impact on particular groups of staff.
An active Equality Action Plan now involves the
majority of departments in developing equality
initiatives (both employment and student related) that
address their own particular needs.
university’s role on regional, national and world stages
and is testament to the excellent work being done by
UCL staff and students.
During the year a wide-ranging consultation process
was undertaken with a view to provoking debate within
and outside UCL on the future course and strategy for
UCL over the next 10 years. This process is resulting
in the establishment of a framework which identifies
the further steps which will need to be undertaken
in order for our goals to be achieved. Against a
background of serious under-funding, which has
required departments to meet income generation and
savings targets year on year, UCL’s objective is to
improve its financial position over the coming years.
This will be assisted by factors such as a review of
student numbers and their composition, the advent of
full economic costing, and the introduction of variable
fees in 2006.
At the time of writing, UCL has just launched
“Advancing London’s Global University – the Campaign
for UCL”. Our aim is to raise £300 million over the
next decade with the strategic aim of providing the
resources to develop a range of ground-breaking new
projects which will enable UCL to further deliver
innovation and research.
U C L’s rolling plan of new and upgraded administrative
computer systems is planned to enhance the
management information across UCL, and to support
academic staff with their teaching, research and
administration. A new HR/payroll system went into
service in September 2004, new Estates and Facilities
systems are being implemented, a major upgrade to
the Finance system is scheduled to go live in Spring
2005, extensive replacements to our admissions
re c o rds and fee systems are being installed over the
next two years and replacement systems for access,
library and ID cards are being considere d .
Conclusion
UCL continues to make significant progress with
infrastructure improvements and it is good to see
some pay-back for the long and continued disruption
which staff and students have suffered. Tribute needs
to be paid to the Estates and Facilities Division for
managing these ver y major projects within the very
tight funding windows imposed by the HEFCE.
Other major activity
The UCL community now includes 28,000 staff and
students including more than 3,800 academic and
research staff working in 72 departments, dedicated
to research and teaching of the very highest standard .
We have the highest number of professors of any
university in the country, in excess of 600, including
the highest number of female professors. An extensive
teaching programme is in place comprising 230
undergraduate programmes, more than 190 taught
Masters’ programmes, and re s e a rch teaching to MPhil
or PhD across all UCL’s academic departments.
UCL’s standing has been evidenced by the award of
the Sunday Times University of the Year, which
recognises excellence in higher education over the
past 12 months. The award takes into account a
range of differing factors, such as the quality of
teaching, research, student dropout rate and a
It is pleasing to note that UCL has achieved a surplus
of £7.7 million (£3.6 million excluding the profit on sale
of assets) on its Income and Expenditure Account. But,
on a turnover of almost £490 million, this serves to
demonstrate the very tight margins within which the
finances are currently managed. Although significant
i n c reases in Government funding can be expected
in future years, next year presents an even bigger
challenge than 2003–04, and it is likely that a deficit
position will be re c o rded in 2004–05 on the Income
and Expenditure Account. UCL there f o re needs to
continue exercising financial stringency with the
objective, in the longer term, of providing more
substantial surpluses to meet on-going reinvestment
needs.
Kerry J Hawkins
Treasurer
University College London Repor ts and Financial Statements 2003/2004
3
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. 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 2004 meeting, the Council carried
out an annual assessment for the year ended 31 July
2004 by considering a report from the Audit
Committee, and taking account of events since
31 July 2004. 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 2004,
and up to the date of approval of the annual repor t
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.
In accordance with the Statutes of UCL, the Council
comprises lay members, the President and Provost
(Provost hereafter) academic staff members and
student members (in numbers specified by Statute).
The Statutes provide for the distinct roles of Chair and
Vice-Chair of the Council, the Treasurer, and of UCL’s
Chief Executive, the Provost. The powers and duties
of the Council are set out in Statutes; by custom and
under the Financial Memorandum with the Higher
Education Funding Council for England, the Council
holds to itself the responsibilities for the ongoing
strategic direction of UCL, approval of major
developments and the receipt of regular repor ts from
UCL officers on the day to day operations of its
business and its subsidiar y 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 Char ter and
Statutes and is in ongoing discussion with officers of
the Privy Council concerning formal approval of these
changes. The Council meets at least three times
each year; it has several committees, including an
Academic Board, Planning and Resources Committee,
Finance Committee, Audit Committee, Risk and
Efficiency Committee, Remuneration Committee and
Nominations Committee. All of these Committees are
formally constituted with Terms of Reference.
4
University College London Reports and Financial Statements 2003/2004
In accordance with Constitution as approved by
Governance Committee on behalf of Council, the
Planning and Resources Committee comprises lay
members, the Provost, Vice-Provosts, staff members
and student members. It makes recommendations
and gives advice to the Council in respect of its
strategic and development responsibilities, including
issues relating to proposals for development and the
resource implications of such. It reports to the
Council at least three times a year.
In accordance with the Regulations for Management
of UCL, the Finance Committee comprises lay
members, the Provost and academic staff members
(in numbers specified by regulation). The Committee
meets at least five times annually, and is chaired by
the Treasurer. Inter alia they recommend to the
Council UCL’s annual revenue and capital budgets
and monitor per formance 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 repor ts from the Higher Education
Funding Council for England as they affect UCL’s
business and monitors adherence with the regulator y
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
consider the nature and scope of the annual
audit and, thereafter discuss audit findings, the
management letter and internal control report arising
out of the audit of the annual financial statements.
The Committee considers repor ts from the Internal
Auditors arising from their audits, which highlight
significant issues and management’s response
thereon. 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 UCL’s Internal Audit Ser vices and reviews the
conclusions of the latter’s work. Audit plans are
drawn up based on assessment of relative risks
and significance of 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 repor ts received from the Risk and
Efficiency Committee, with emphasis given to
obtaining the relevant degree of assurance and not
merely reporting by exception. It repor ts to the
Council the results of this review.
The Risk and Efficiency Committee includes the
Vice-Provosts for Administration and Teaching and
Learning/International Matters, 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 significant
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 throughout UCL, for example on
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 management
and quality enhancement.
The Nominations Committee considers the filling
of vacancies in the lay membership of Council and
of other UCL Committees (except the Nominations
Committee, for which Council itself considers
vacancies in the lay membership).
The Remuneration Committee is chaired by the Chair
of Council and comprises three other members of
Council and the Provost. It determines the annual
remuneration of senior officers of UCL and where
necessary decides on any severance payments.
The Provost is excluded from discussions relating to
his own remuneration package. The Remuneration
Committee also receives a report of the annual
review of all professorial salaries and administrative
equivalents not otherwise considered by it. The
remuneration of these staff is determined by the
Provost in consultation with relevant Vice-Provosts and
Deans and the Director of Human Resources. Salary
levels are set to attract and retain members of staff
for the successful operation of UCL, both academically
and administratively, and incorporate rewards for
individual performance. No remuneration is paid to lay
members of the Council or any of its Committees.
University College London Repor ts and Financial Statements 2003/2004
5
Responsibilities 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 and other
relevant accounting standards. In addition, within the
terms and conditions of the Financial Memorandum
agreed between the Higher Education Funding Council
for England and the Council of UCL, the Council,
through the Provost, its designated office holder, is
required to prepare financial statements for each
financial year which give a true and fair view of the
state of affairs of UCL and of the surplus or deficit
and cash flows for that year.
In causing the financial statements to be prepared,
the Council has ensured that:
(i) suitable accounting policies are selected and
applied consistently;
(ii) judgements and estimates are made that are
reasonable and prudent;
(iii) applicable accounting standards have been
followed, subject to any material depar tures
disclosed and explained in the financial
statements and
(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 and
(iv) secure the economical, efficient and effective
management of UCL’s resources and expenditure.
6
University College London Reports and Financial Statements 2003/2004
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 depar tments;
(ii) comprehensive Financial Regulations, detailing
financial controls and procedures, approved by
the Council;
(iii) a professional Internal Audit Ser vice whose
annual programme of work is approved by the
Audit Committee endorsed by the Council,
and whose head provides the Provost, Audit
Committee and Council, with a report on internal
audit activity within UCL and an opinion on the
adequacy and effectiveness of UCL’s system of
internal control, including internal financial control;
(iv) regular reviews of financial performance and
key business risks, and termly reviews of
financial forecasts including variance reporting
and updating;
(v) a comprehensive planning process for the short
term to medium 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 2004
which comprise the statement of principal accounting
policies, the consolidated income and expenditure
account, the consolidated and college balance
sheets, the consolidated cash flow statement, the
consolidated statement of total recognised gains and
losses, and the related notes 1 to 35. These financial
statements have been prepared under the accounting
policies set out therein.
This report is made solely to the Council of University
College London, as a body, in accordance with
the Financial Memoranda dated June 2000 and
September 2003. Our audit work has been
undertaken so that we might state to the Council’s
members those matters we are required to state to
them in an auditors’ report and for no other purpose.
To the fullest extent permitted by law, we do not
accept or assume any responsibility to anyone other
than the Council and the Council’s members as a
body for our audit work, for this report, or for the
opinions we have formed.
Respective responsibilities of the Council and auditors
As described in the statement of 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. 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
G ro u p ’s compliance with the four provisions of the
Combined Code specified for our review by Council and
we re p o rt if it does not. We are not re q u i red to consider
whether the Council’s statements on internal contro l
cover all risks and controls, or form an opinion on the
effectiveness of the Gro u p ’s corporate govern a n c e
p ro c e d u res or its risk and control pro c e d u res.
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 per formed 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 2004 and of the surplus of the Group for
the year then ended and have been properly
prepared in accordance with the Statement of
Recommended Practice on Accounting for Fur ther
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 memoranda dated
June 2000 and September 2003 with the Higher
Education Funding Council for England.
Deloitte & Touche LLP
Chartered Accountants
and Registered Auditors
London
16 December 2004
University College London Repor ts and Financial Statements 2003/2004
7
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 United Kingdom
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. 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.
5. 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 par tner under an agency agreement. The
resulting exchange differences are dealt with in
the determination of income and expenditure for
the financial year.
6. 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
Income received from research grants and
contracts is included to the extent only of
expenditure incurred during the year, together with
any related overhead contributions towards costs.
Income received from endowments is credited
to the income and expenditure account in the
period in which it is earned. Income from specific
endowments not expended in the year is
transferred from the income and expenditure
account to a specific endowment reserve fund.
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.
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
Fixtures and fittings
8. 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
8
University College London Reports and Financial Statements 2003/2004
20 years
10 years
Term of grant
5 years
9. 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. 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.
13. Cash Flows and Liquid Resources
10. 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.
11. Investments
Both Fixed Asset and Endowment Asset
Investments are stated at market value in the
Balance Sheet. Subsidiar y company investments
are stated at cost less provision for impairment.
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
In the consolidated accounts the Group’s share of
the results in joint ventures are shown each year
in the income and expenditure account and the
group’s share of retained profit and reserves is
added to the cost of the investment in the
balance sheet.
University College London Repor ts and Financial Statements 2003/2004
9
Consolidated Income and Expenditure
Account year ended 31 July 2004
INCOME
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Endowment income and interest receivable
Note
2004
£’000
Restated
2003
£’000
1
2
3
4
5
145,766
76,480
161,860
99,837
5,833
131,847
69,695
159,779
92,694
4,503
489,776
458,518
Total Income
(In addition, income of £1,706,000 (2003 - £1,268,000) has been recognised as explained in note 13)
EXPENDITURE
Staff costs
Other operating expenses
Interest payable
Depreciation
6
7
8
9
Total Expenditure
SURPLUS FOR THE YEAR BEFORE DISPOSAL OF
FIXED ASSETS AND BEFORE TAX
Share of operating loss in joint ventures
Share of operating profit/loss in associates
13
13
Profit/(loss) on disposal of fixed asset investments
Profit on disposal of tangible fixed assets
10
10
SURPLUS FOR THE YEAR AFTER DISPOSAL OF FIXED ASSETS
BUT BEFORE TAX AND MINORITY INTERESTS
305,010
146,506
7,811
26,544
286,760
137,283
7,274
26,139
485,871
457,456
3,905
1,062
(144)
30
(54)
(61)
55
4,054
(56)
1,164
7,900
2,055
Taxation
Share of taxation in associates
(106)
(1)
(17)
(6)
Minority interest
489
41
8,282
2,073
SURPLUS FOR THE YEAR AFTER DISPOSAL OF
FIXED ASSETS, TAX AND MINORITY INTERESTS
Transfer to accumulated income within specific endowments
SURPLUS FOR THE YEAR
(585)
7,697
(589)
1,484
The consolidated income and expenditure of the Group relate wholly to continuing activities.
2003 figures have been restated. Details of restatements are provided at page 13 and Note 5 and resulted in
an increase in surplus for 2003 of £38,000 from £1,446,000 to £1,484,000.
10
University College London Reports and Financial Statements 2003/2004
Consolidated Balance Sheet
as at 31 July 2004
FIXED ASSETS
Tangible assets
Intangible assets
Investments in joint ventures:
Share of gross assets
Share of gross liabilities
Investments in associates
Investments
Note
2004
£’000
Restated
2003
£’000
11
12
363,481
1,229
313,163
1,214
13
13
13
13
1,745
(140)
2
8,695
1,942
(193)
8,844
375,012
324,970
77,598
75,423
991
109,216
40,709
7,668
814
99,784
17,953
6,922
158,584
125,473
ENDOWMENT ASSET INVESTMENTS
14
CURRENT ASSETS
Stores
Debtors
Shor t term deposits and investments
Cash at bank and in hand
15
CURRENT LIABILITIES
Creditors: amounts falling due within one year
Share of net liabilities in associate
16
13
NET CURRENT ASSETS
TOTAL ASSETS LESS CURRENT LIABILITIES
(95,041)
-
(89,087)
(27)
63,543
36,359
516,153
436,752
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR
17
(83,278)
(83,038)
PROVISIONS FOR LIABILITIES AND CHARGES
18
(1,964)
(2,050)
(590)
(1,079)
MINORITY INTEREST
NET ASSETS
DEFERRED CAPITAL GRANTS
430,321
350,585
251,102
181,238
77,238
360
75,066
357
20
77,598
75,423
21
23
99,521
2,100
91,824
2,100
101,621
93,924
430,321
350,585
19
ENDOWMENTS
Specific
General
RESERVES
Income and expenditure account
Other reser ves
TOTAL
Approved by Council on 16 December 2004
Kerry J Hawkins
Treasurer
Professor Malcolm Grant
President and Provost
Jack W Foster
Director of Finance
University College London Repor ts and Financial Statements 2003/2004
11
Balance Sheet as at 31 July 2004
FIXED ASSETS
Tangible assets
Intangible assets
Investments
Note
2004
£’000
2003
£’000
11
12
13
361,990
233
10,079
311,748
267
9,922
372,302
321,937
77,598
75,423
329
100,669
40,708
3,171
335
100,763
17,952
2,634
154,877
121,684
(92,480)
(88,349)
62,397
33,335
512,297
430,695
ENDOWMENT ASSET INVESTMENTS
14
CURRENT ASSETS
Stores
Debtors
Shor t 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
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR
17
(83,278)
(83,038)
PROVISIONS FOR LIABILITIES AND CHARGES
18
(1,964)
(2,050)
NET ASSETS
DEFERRED CAPITAL GRANTS
427,055
345,607
250,071
180,172
77,238
360
75,066
357
20
77,598
75,423
21
99,386
90,012
99,386
90,012
427,055
345,607
19
ENDOWMENTS
Specific
General
RESERVES
Income and expenditure account
TOTAL
Approved by Council on 16 December 2004
Kerry J Hawkins
Treasurer
12
Professor Malcolm Grant
President and Provost
University College London Reports and Financial Statements 2003/2004
Jack W Foster
Director of Finance
Statements of Total Recognised
Gains and Losses and of Cash Flow
STATEMENT OF CONSOLIDATED TOTAL RECOGNISED GAINS AND LOSSES
Note
2004
£’000
Restated
2003
£’000
Surplus after depreciation of assets
Appreciation of endowment asset investments
20
New endowments
20
Net realised gain/(loss) from sale of endowment asset investments 20
Bloomsbury Bioseed Fund Ltd – new Government grants received 23
8,282
218
1,269
103
-
2,073
1,737
890
(968)
952
9,872
4,684
RECONCILIATION TO CLOSING RESERVES AND ENDOWMENTS
Opening reser ves and endowments
Total recognised gains and losses for the year
169,347
9,872
Closing reserves and endowments
179,219
RECONCILIATION OF MOVEMENT IN FUNDS TO THE LAST ANNUAL REPORT
Total recognised gains and losses relating to the year
Share of reserves in associate previously unrecognised at 1 August 2003
9,872
78
Total movement in funds since last annual report
9,950
RECONCILIATION OF RESTATED 2003 FIGURES
Surplus for
the year
£’000
Total net
assets
£’000
Total
funds
£’000
2003 figures as previously stated
Share relating to NCE Discovery Ltd
Share of taxation in NCE Discovery Ltd
1,446
44
(6)
350,507
78
-
350,507
78
-
2003 figures as restated
1,484
350,585
350,585
STATEMENT OF CONSOLIDATED CASH FLOW
Note
2004
£’000
Restated
2003
£’000
25
28
29
28,028
(1,823)
(106)
(429)
26,610
(2,054)
(17)
(11,394)
Cash inflow before use of liquid re s o u rces and financing
Management of liquid resources
Financing
26
30
25,670
(22,756)
(203)
13,145
(17,499)
4,783
Increase in cash in the year
26
2,711
Net cash inflow from operating activities
Returns on investments and servicing of finance
Taxation
Capital expenditure and financial investment
429
University College London Repor ts and Financial Statements 2003/2004
13
Notes to the Accounts
1. FUNDING COUNCIL GRANTS
HEFCE recurrent grant - Teaching
- Research
- Other
Deferred capital grants released in year
2004
£’000
2003
£’000
53,693
77,324
10,213
4,536
54,721
66,789
4,885
5,452
145,766
131,847
2004
£’000
2003
£’000
24,627
35,159
4,076
3,885
2,119
6,614
21,663
31,693
3,848
3,765
1,789
6,937
76,480
69,695
2004
£’000
2003
£’000
126,747
35,113
123,151
36,628
161,860
159,779
48,943
77,804
12,202
8,378
7,183
1,076
6,223
51
47,193
75,958
11,234
9,524
8,205
1,441
6,132
92
161,860
159,779
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
Shor t 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
Income from research grants and contracts includes deferred capital grants released in the year of £9,544,000
(2003 – £8,501,000).
14
University College London Reports and Financial Statements 2003/2004
4. OTHER OPERATING INCOME
Residences and catering
Other ser vices rendered
Health authorities
Donations and sundry grants
Released from deferred capital grants
Other income
2004
£’000
Restated
2003
£’000
15,704
25,988
25,884
16,721
1,812
13,728
13,479
25,629
25,088
13,807
2,146
12,545
99,837
92,694
The 2002-03 figure for other services rendered has been reduced by £2,415,000 in respect of SIFT income, which
has been reclassified as other income.
Income from residences and catering includes deferred capital grants released in the year of £9,000
(2003 – £9,000)
5. ENDOWMENT INCOME AND INTEREST RECEIVABLE
Income from endowment asset investments (Note 20)
Other interest receivable
2004
£’000
Restated
2003
£’000
2,953
2,880
2,247
2,256
5,833
4,503
In line with Statement of Recommended Practice: accounting for fur ther and higher education, income from
endowment asset investments is shown on a receivable basis rather than matched to expenditure as was
previous practice. Income earned in excess of that applied to the specific purposes has been transferred back to
Specific Endowments from the income and expenditure account, after the result for the year has been struck. The
2003 figure for income from endowment asset investments has been increased by £589,000 to reflect the
change in accounting treatment.
University College London Repor ts and Financial Statements 2003/2004
15
Notes to the Accounts
6. INFORMATION REGARDING EMPLOYEES
2004
£’000
2003
£’000
255,345
22,291
27,374
242,071
19,557
25,132
305,010
286,760
£
£
210,213
28,000
-
238,213
-
25,000
-
150,881
-
25,000
150,881
-
28,202
3,948
-
32,150
Staff costs:
Salaries and wages
NI contributions
Other pension costs
Emoluments of the Provost and President:
M Grant (star ted 01/08/03)
D Roberts (left 30/09/03)
C Llewellyn Smith (left 30/09/02)
Salary
Pension
Salary
Pension
Salary
Pension
The emoluments of the Provost are shown on the same basis as for higher paid staff and pension contributions
to the USS are paid at the same rate as for other academic staff.
Compensation for loss of office in respect of two higher paid employees (2003 – one employee), totalled
£152,069 (2003 – £98,708).
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:
£70,001
£80,001
£90,001
£100,001
£110,001
£120,001
£130,001
£140,001
£150,001
£160,001
£170,001
£200,001
£210,001
£250,001
-
£80,000
£90,000
£100,000
£110,000
£120,000
£130,000
£140,000
£150,000
£160,000
£170,000
£180,000
£210,000
£220,000
£260,000
2004
No.
Restated
2003
No.
110
80
43
39
16
32
12
15
9
5
3
1
1
1
117
66
46
25
28
15
15
8
3
5
1
-
In line with HEFCE guidance, the numbers include staff who joined par t way through the year, but who would
have received remuneration in these bands in a full year. The 2003 figures have been restated to reflect this
change in policy.
The average number of individuals paid through the payroll during the year was 9,055 (2003 – 8,986).
16
University College London Reports and Financial Statements 2003/2004
7. OTHER OPERATING EXPENSES
Residences and catering
Furniture, computer and other equipment costs
Academic consumables and laborator y 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
Adver tising and recruitment
Printing, postage, stationer y 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
2004
£’000
2003
£’000
7,392
15,490
25,623
4,694
10,951
5,891
8,354
4,111
15,046
3,519
2,476
1,560
7,073
10,495
5,299
78
47
1,495
4,420
12,492
7,042
16,955
26,392
4,588
8,871
5,815
7,830
4,951
11,548
4,648
2,104
1,561
6,866
8,886
5,131
86
92
1,449
3,966
8,502
146,506
137,283
2004
£’000
2003
£’000
307
3,969
3,535
268
3,466
3,540
7,811
7,274
8. INTEREST PAYABLE
Bank loans and other loans wholly repayable within five years
Loans not wholly repayable within five years
Finance leases
University College London Repor ts and Financial Statements 2003/2004
17
Notes to the Accounts
9. ANALYSIS OF EXPENDITURE BY ACTIVITY
2004
Academic departments
Academic ser vices
Research grants and contracts
Residences and catering
Premises
Administration and central services
Other expenses
Staff
Costs
£’000
Other
Operating
Expenses
£’000
146,734
14,269
89,749
2,632
6,103
25,163
20,360
21,944
8,973
47,121
7,392
31,359
14,478
15,239
1,980
3,774
2,057
2,758
1,237
9,544
1,483
11,136
232
154
171,436
24,479
146,414
13,487
52,372
39,873
37,810
305,010
146,506
7,811
26,544
485,871
Interest
Payable Depreciation
£’000
£’000
The depreciation charge has been funded by:
Deferred capital grants released (Note 19)
General income
Total
£’000
15,901
10,643
26,544
2003
Academic departments
Academic ser vices
Research grants and contracts
Residences and catering
Premises
Administration and central services
Other expenses
Staff
Costs
£’000
Other
Operating
Expenses
£’000
133,761
12,887
87,546
2,594
6,531
22,882
20,559
19,687
9,332
48,250
7,042
28,830
14,267
9,875
2,009
3,700
1,565
3,060
1,058
8,501
1,140
12,119
150
111
156,508
23,277
144,297
12,785
51,180
37,299
32,110
286,760
137,283
7,274
26,139
457,456
The depreciation charge has been funded by:
Deferred capital grants released
General income
Interest
Payable Depreciation
£’000
£’000
Total
£’000
16,109
10,030
26,139
10. PROFIT/LOSS ON DISPOSAL OF FIXED ASSETS
Frances Gardner Hall of Residence (Hampstead) was sold during the year, resulting in a profit of £4,054,000.
Investments in London Biotechnology were sold during the year, resulting in a profit of £55,000.
18
University College London Reports and Financial Statements 2003/2004
11. TANGIBLE ASSETS
UCL
Land and Buildings
Freehold Leasehold
£’000
£’000
Equipment
£’000
Total
£’000
Cost
At 1 August 2003
Additions at cost
Disposals
281,544
50,601
(2,021)
99,446
14,999
-
79,177
12,527
-
460,167
78,127
(2,021)
At 31 July 2004
330,124
114,445
91,704
536,273
Depreciation
At 1 August 2003
Charge for year
Disposals
62,193
10,826
(526)
24,696
3,348
-
61,530
12,216
-
148,419
26,390
(526)
At 31 July 2004
72,493
28,044
73,746
174,283
Net Book Value
At 31 July 2004
257,631
86,401
17,958
361,990
At 1 August 2003
219,351
74,750
17,647
311,748
Consolidated
Land and Buildings
Freehold Leasehold
£’000
£’000
Equipment
£’000
Total
£’000
Cost
At 1 August 2003
Additions at cost
Disposals
281,580
50,601
(2,021)
100,546
14,999
-
80,090
12,757
-
462,216
78,357
(2,021)
At 31 July 2004
330,160
115,545
92,847
538,552
Depreciation
At 1 August 2003
Charge for year
Disposals
62,231
10,832
(526)
24,877
3,375
-
61,945
12,337
-
149,053
26,544
(526)
At 31 July 2004
72,537
28,252
74,282
175,071
Net Book Value
At 31 July 2004
257,623
87,293
18,565
363,481
At 1 August 2003
219,349
75,669
18,145
313,163
The declared value of buildings for insurance purposes (day one basis) as at 1 August 2004 was £986.6 million
(2003 – £944.3 million).
The above includes assets held under finance leases. At 31 July 2004 the net book value of the assets held under
finance leases was £29.078 million (2003 – £29.715 million) with a depreciation charge for the year of £638,000
(2003 – £638,000).
University College London Repor ts and Financial Statements 2003/2004
19
Notes to the Accounts
12. INTANGIBLE ASSETS (PATENTS)
Consolidated
UCL
2004
£’000
2003
£’000
2004
£’000
2003
£’000
Cost
At 1 August 2003
Additions at cost
Disposals
3,301
566
-
2,486
815
-
600
92
-
At 31 July 2004
3,867
3,301
692
Amortisation
At 1 August 2003
Charge for year
Disposals
2,087
551
-
1,647
440
-
333
126
-
At 31 July 2004
2,638
2,087
459
333
Net Book Value
At 31 July 2004
1,229
1,214
233
267
At 1 August 2003
1,214
839
267
839
2,486
121
(2,007)
600
1,647
109
(1,423)
13. INVESTMENTS HELD AS FIXED ASSETS
Joint ventures
UCLBS Limited is a joint venture company of London Business School (LBS) and University College London (UCL).
The objects of the company are to advance education by the promotion and support of collaborative educational
ventures entered into by or on behalf of LBS and UCL.
Two collaborative educational ventures have already been established, namely The Centre for Scientific Enterprise
Ltd (CSE) and London Technology Network Ltd (LTN). The CSE, initially funded by a £4.6 million government grant,
aims to act as the commissioning and funding body to promote the transfer of science and technology ideas into
commercial products and services. LTN, initially funded by a £4 million government grant, aims to improve business
links and encourage interaction and re s e a rch between industry and London-based academia.
These joint venture investments are disclosed in the financial statements as follows:
Share of income:
The Centre for Scientific Enterprise Ltd
London Technology Network Ltd
Share of operating profit/(loss):
The Centre for Scientific Enterprise Ltd
London Technology Network Ltd
20
2004
£’000
2003
£’000
917
789
364
904
1,706
1,268
2004
£’000
2003
£’000
(243)
99
(337)
283
(144)
(54)
Share of gross assets:
2004
£’000
2003
£’000
The Centre for Scientific Enterprise Ltd
London Technology Network Ltd
1,293
452
1,594
348
1,745
1,942
University College London Reports and Financial Statements 2003/2004
Share of gross liabilities:
2004
£’000
The Centre for Scientific Enterprise Ltd
London Technology Network Ltd
2003
£’000
(70)
(70)
(128)
(65)
(140)
(193)
Share of reserves:
2004
£’000
2003
£’000
The Centre for Scientific Enterprise Ltd
London Technology Network Ltd
1,223
382
1,466
283
1,605
1,749
Associates
The UCL group has interests in the following associate companies:
(a) 47% holding in Pentraxin Therapeutics Ltd. The company, which began trading in August 2003, has been
established for the purpose of developing and commercially exploiting certain technology for designing,
synthesizing and developing novel therapeutic drugs.
(b) 55% holding (43% of the voting shares) in NCE Discovery Ltd. The company provides a high quality medicinal
chemistry service to biotechnology companies in the UK and Europe.
The 2003 figures have been restated to include the Group’s share in NCE Discover y Ltd, not previously
recognised.
The investment in associates is disclosed in the financial statements as follows:
2004
£’000
Share of operating profit/(loss):
Pentraxin Therapeutics Ltd
NCE Discover y Ltd
Share of taxation:
Pentraxin Therapeutics Ltd
NCE Discover y Ltd
Fixed asset investment/(share of net liabilities):
Pentraxin Therapeutics Ltd
NCE Discover y Ltd
(29)
59
(105)
44
30
(61)
(1)
(6)
(1)
(6)
(134)
136
(105)
78
2
Share of reserves:
Pentraxin Therapeutics Ltd
NCE Discover y Ltd
Restated
2003
£’000
(134)
136
2
(27)
(105)
78
(27)
University College London Repor ts and Financial Statements 2003/2004
21
Notes to the Accounts
Other fixed asset investments
Consolidated
Monies held
on long term
deposits
Other
investments
£’000
£’000
6,327
357
6,684
2,517
142
(405)
(243)
2,011
Balance at
1 August 2003
Additions
Impairments
Disposals
UCL
Total
Monies held
on long term
deposits
Other
investments
Investment
in
subsidiaries
Total
£’000
£’000
£’000
£’000
£’000
8,844
499
(405)
(243)
8,695
6,327
357
6,684
3,122
3,122
9,922
357
(200)
10,079
473
(200)
273
Included in monies held on long term deposits is £6.63 million (2003 - £6.27 million) over which there is a legal
charge. The deposit represents a security fund to meet the obligations under finance leases (Note 17).
The following UCL wholly owned (unless indicated other wise) 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
UCL
UCL
UCL
UCL
UCL
Trading Ltd
Investments Ltd
Proper ties Ltd
Residences Ltd
Enterprises Ltd
Cruciform Ltd
UCL Consultants Ltd
Stanmore Implants Worldwide Ltd
Somers Town Community Sports Centre
(Ltd by Guarantee)
UCL Biomedica Plc
Medic-to-Medic Ltd (76% subsidiar y
of UCL Biomedica Plc)
Freemedic Clinical Research Ltd (100%
subsidiary of UCL Biomedica Plc)
UCL Analgesia Centre Ltd (100% subsidiary
of UCL Biomedica Plc)
UCL Advanced Diagnostics Ltd (100% subsidiar y
of UCL Biomedica Plc)
Bloomsbury Bioseed Fund Ltd (70%)
Proaxon Ltd (83%) (44% UCL Cruciform
Ltd, 39% BBF Ltd)
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.
Provision of administrative suppor t to staff engaged
in consultancy.
Design and manufacture of orthopaedic implants.
Operation of sports centre.
Exploitation of intellectual property.
Development of an IT solution to integrated patient care.
Testing of new drugs in the final approval stage.
Conducting clinical trials in the field of analgesia.
Conducting medical and clinical diagnostics.
Investment in biotechnology start-ups.
Developing and commercialising medical treatments.
14. ENDOWMENT ASSET INVESTMENTS
Consolidated and UCL
2004
£’000
2003
£’000
75,423
1,957
218
73,175
511
1,737
77,598
75,423
Represented by:
Fixed interest securities
Unit trusts (fixed interest)
Equities
Cash
24
34,341
29,258
13,975
24
35,334
27,664
12,401
Total endowment asset investments
77,598
75,423
Endowment assets at cost
76,283
74,739
Balance at 1 August 2003
Net additions
Appreciation on valuation
22
University College London Reports and Financial Statements 2003/2004
15. DEBTORS
Consolidated
UCL
2004
£’000
2003
£’000
2004
£’000
2003
£’000
10,270
49,567
12,202
236
183
1,699
34,759
8,121
56,910
11,731
334
1,655
20,733
7,453
49,567
12,202
236
183
1,699
4,290
34,180
6,459
56,910
11,731
334
1,655
3,369
20,305
300
300
859
-
-
109,216
99,784
110,669
100,763
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
Loan to associate company
16. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Consolidated
Bank loans
Overdrafts
Research grants received on account
Purchase ledger creditors
Other creditors including taxation and social security
Obligations under finance leases
Accruals and deferred income
Inter-company creditors
UCL
2004
£’000
2003
£’000
2004
£’000
2003
£’000
196
3,599
32,982
12,106
18,343
43
27,772
-
3,990
31,206
9,633
16,021
203
28,034
-
196
3,489
32,982
10,887
17,967
43
26,834
82
3,944
31,206
9,455
15,729
203
27,793
19
95,041
89,087
92,480
88,349
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
2004
£’000
2003
£’000
42,308
16,166
24,804
42,113
15,925
25,000
83,278
83,038
295
1,316
81,667
197
936
81,905
83,278
83,038
It is anticipated that UCL will exercise options under the leasing arrangements between 20 and 25 years into the
term of each lease. The obligations under these long term liabilities will be met from payments which amount to
approximately £3.6 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.
University College London Repor ts and Financial Statements 2003/2004
23
Notes to the Accounts
18. PENSION PROVISION
Consolidated and UCL
Balance at 1 August 2003
Utilised in year
Transfer from Income and Expenditure account
2004
£’000
2003
£’000
2,050
2,136
(175)
89
Balance at 31 July 2004
(175)
89
1,964
2,050
19. DEFERRED CAPITAL GRANTS
UCL
Balance at 1 August 2003
Grants received in year
Disposals
Land and Buildings
Freehold Leasehold
£’000
£’000
Equipment
£’000
Total
£’000
133,369
65,172
(1,495)
35,526
13,413
-
11,277
8,675
-
180,172
87,260
(1,495)
197,046
48,939
19,952
265,937
(5,486)
(1,191)
(9,189)
(15,866)
Balance at 31 July 2004
191,560
47,748
10,763
250,071
Consolidated
Land and Buildings
Freehold Leasehold
£’000
£’000
Equipment
£’000
Total
£’000
Contribution to depreciation for the year
Balance at 1 August 2003
Grants received in year
Disposals
Contribution to depreciation for the year
Balance at 31 July 2004
133,369
65,172
(1,495)
36,592
13,413
-
11,277
8,675
-
181,238
87,260
(1,495)
197,046
50,005
19,952
267,003
(5,486)
(1,226)
(9,189)
(15,901)
191,560
48,779
10,763
251,102
20. ENDOWMENTS
Consolidated and UCL
Specific
General
Total
£’000
£’000
£’000
24
Balance at 1 August 2003
Additions
Disposals
Appreciation of endowment asset investments
Income for the year (Note 5)
Net realised gain from sale of investments
Expenditure
75,066
1,795
(529)
218
2,953
103
(2,368)
357
3
-
75,423
1,798
(529)
218
2,953
103
(2,368)
Balance at 31 July 2004
77,238
360
77,598
Representing:
Fellowships scholarships and prize funds
Chairs and lectureships funds
Other funds
11,355
10,883
55,000
360
11,355
10,883
55,360
77,238
360
77,598
University College London Reports and Financial Statements 2003/2004
21. INCOME AND EXPENDITURE ACCOUNT
Consolidated
UCL
2004
£’000
Restated
2003
£’000
2004
£’000
2003
£’000
Balance at 1 August as previously stated
Share of reserves in associate previously not recognised
91,746
78
88,748
40
90,012
-
86,481
-
Balance as at 1 August as restated
91,824
88,788
90,012
86,481
7,697
-
1,484
1,552
9,374
-
3,531
-
99,521
91,824
99,386
90,012
The Income and Expenditure account is designated as follows:
Departmental reser ves
78,791
Earmarked reserves
40,389
Revenue reser ves
(19,659)
78,607
30,878
(17,661)
78,791
40,389
(19,794)
78,607
30,878
(19,473)
99,521
91,824
99,386
90,012
Surplus for the year
Transfer from revaluation reserve
Balance at 31 July
A prior year adjustment has been made to correct the accounting for the group’s share of reser ves and operating
result in an associate company, previously excluded from the consolidated financial statements.
22. REVALUATION RESERVE
Consolidated
2004
£’000
2003
£’000
Balance at 1 August 2003
-
1,552
Transfer to income and expenditure account
-
(1,552)
Balance at 31 July 2004
-
-
The balance on the revaluation reser ve has been transferred to the income and expenditure reserve following
the disposal of the investment proper ty in 2003.
23. OTHER RESERVES
Balance at 1 August 2003
Bloomsbury Bioseed Fund Ltd – Government grants received
Balance at 31 July 2004
24. CAPITAL COMMITMENTS
Commitments contracted at 31 July
Authorised but not contracted at 31 July
Consolidated
2004
£’000
2003
£’000
2,100
1,148
-
952
2,100
2,100
Consolidated and UCL
2004
£’000
2003
£’000
71,633
48,186
38,402
148,372
119,819
186,774
University College London Repor ts and Financial Statements 2003/2004
25
Notes to the Accounts
25. RECONCILIATION OF CONSOLIDATED OPERATING SURPLUS
TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Operating surplus before tax
Items not involving cash movements:
Depreciation
Amortisation of intangible assets
Deferred capital grants released to income
Impairment of fixed asset investments
Increase in stocks
Decrease in debtors
Increase in creditors
Decrease in provisions
Items which are not operating activities:
Interest receivable
Interest payable
Investment income
Net cash inflow from operating activities
2004
£’000
Restated
2003
£’000
3,905
1,062
26,544
551
(15,901)
405
(177)
5,259
5,639
(175)
26,139
440
(16,109)
(70)
1,068
11,484
(175)
(2,880)
7,811
(2,953)
(2,256)
7,274
(2,247)
28,028
26,610
26. ANALYSIS OF CHANGES IN NET DEBT
1 August 2003
£’000
Cash
Flows
£’000
12,401
6,922
(3,990)
1,574
746
391
-
13,975
7,668
(3,599)
15,333
2,711
-
18,044
Deposits repayable at short notice
17,953
22,756
-
40,709
Debt due within one year (Note 16)
(203)
203
(239)
(239)
(83,038)
6,930
(7,170)
(83,278)
(49,955)
32,600
(7,409)
(24,764)
Cash at bank and in hand
Endowment assets (Note 14)
Deposits repayable on demand (net of overdraft)
Overdrafts (Note 16)
Debt due after one year (Note 17)
Other
Changes 31 July 2004
£’000
£’000
27. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2004
£’000
26
Increase in cash in the period
Increase in deposits repayable at short notice
Increase in debt
2,711
22,756
(276)
Change in net debt
25,191
Net debt at 1 August 2003
(49,955)
Net debt at 31 July 2004
(24,764)
University College London Reports and Financial Statements 2003/2004
28. RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
2004
£’000
Restated
2003
£’000
Income from endowments
Other interest received
Interest paid
2,953
2,484
(7,260)
2,247
1,910
(6,211)
Net cash outflow from returns on investments and servicing of finance
(1,823)
(2,054)
29. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
2004
£’000
Restated
2003
£’000
Purchase of tangible fixed assets
Purchase of intangible fixed assets
Purchase of fixed asset investments
Net purchase of endowment asset investments
(68,306)
(566)
(142)
(280)
(50,212)
(815)
(1,097)
-
Total payments to acquire fixed and endowment assets
(69,294)
(52,124)
298
4,054
63,244
1,269
4,182
3,584
929
30,085
1,360
(300)
890
Proceeds from disposal of fixed asset investments
Proceeds from disposal of tangible fixed assets
Net proceeds from sale of endowment asset investments
Capital grants received towards the purchase of tangible assets
Government grants received by Bloomsbury Bioseed Fund Ltd
Loan to associate company
Endowments received
Net cash outflow from capital expenditure and financial investment
(429)
(11,394)
30. FINANCING
2004
£’000
2003
£’000
Mortgages and loans acquired
Mortgage and loan capital repayments
(203)
5,000
(217)
Net cash inflow from financing
(203)
4,783
31. HARDSHIP AND ACCESS BURSARY FUNDS
Consolidated and UCL
2004
£’000
2003
£’000
Balance at 1 August
Funding Council grants
Interest earned
74
561
12
6
665
9
Disbursed to students
647
(655)
680
(606)
Balance at 31 July
(8)
74
Funding Council grants are available solely for students and UCL acts only as paying agent. The grants and
related disbursements are therefore excluded from the income and expenditure account.
University College London Repor ts and Financial Statements 2003/2004
27
Notes to the Accounts
32. PENSION FUNDS
The total pension costs for UCL were:
Contribution
Contribution
Contribution
Contribution
Contribution
Contribution
to
to
to
to
to
to
USS
SAUL
NHS
RFHSM Pension & Assurance Scheme
FPS
other pension schemes
2004
£’000
2003
£’000
20,419
3,189
3,089
649
28
19,358
3,092
2,141
531
10
27,374
25,132
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 State Second Pension (S2P) and
valued every three years by professionally qualified independent actuaries using the Projected Unit Method.
The rates of contribution for both schemes are determined by the Trustees on the advice of actuaries, the cost
recognised for the year in the Income and Expenditure account being equal to the contribution to the scheme.
University Superannuation Scheme (USS)
The latest actuarial valuation of the scheme was at 31 March 2002 using the projected unit method. The assumptions
and other data which have the most significant effect on the determination of the contribution levels are as follows:
Investment returns per annum
Salary scale increases per annum
Pension increases per annum
Market value of assets at last actuarial valuation date
Proportion of members’ accrued benefits covered by
the actuarial value of assets
Current Employers contribution rate
Past Service
Future Service
5.0%
3.7%
2.7%
6.0%
3.7%
2.7%
£19.938 million
101.0%
14.0%
Superannuation Arrangement of the University of London (SAUL)
The latest actuarial valuation of the scheme was at 31 March 2002 using the projected unit method. The assumptions
and other data which have the most significant effect on the determination of the contribution levels are as follows:
Investment returns per annum
Salary scale increases per annum *
Pension increases per annum
Market value of assets at last actuarial valuation date
Proportion of members’ accrued benefits covered by
the actuarial value of assets
Current Employers contribution rate
Past Service
Future Service
6.0%
5.0%
4.2%
7.0%
5.0%
4.2%
£941million
121.0%
10.5%
* excludes an allowance for promotional increases
National Health Service Pension Scheme
The NHS Pension Scheme is an unfunded defined benefit scheme available to staff who immediately prior to
appointment at UCL were members of this scheme.
The Scheme is subject to a full valuation ever y four years. The last valuation took place as at 31 March 1999.
Between valuations, the Government Actuary provides an update of the scheme liabilities on an annual basis. On
advice from the actuar y the employers contributions were increased from 7% to 14% from the 1st April 2004.
The scheme is a multi-employer scheme, where the asset and liabilities for UCL cannot be identified.
28
University College London Reports and Financial Statements 2003/2004
Federated Pension Scheme (FPS) and the Royal Free Hospital School of Medicine (RFHSM) Pension and
Assurance Scheme
The Federated Pension Scheme (FPS) for non academic staff of Middlesex Hospital Medical School which since
merger with UCL on 1 August 1987 has become closed to new entrants. This scheme is a defined benefit scheme.
The Royal Free Hospital School of Medicine (RFHSM) Pension and Assurance Scheme, operated for non academic
staff at the Royal Free Hospital School of Medicine. On merger with UCL on 1 August 1998 this scheme has been
closed to all new entrants. This scheme is a defined benefit scheme.
As a consequence of both FPS and the RFHSM Pension & Assurance Scheme being closed to new entrants, it is
likely that the current ser vice cost will increase as the members approach retirement.
The last triennial valuation of the FPS was under taken on 31 March 2002 and for the Royal Free Hospital School
of Medicine Pension and Assurance Scheme on 1 August 2003. For the purposes of repor ting under FRS17 a
valuation of both schemes was under taken on 31 July 2004, and details are given below.
Valuation method
Valuation date (31 July)
Inflation assumption
I n c rease for pensions
I n c rease for deferred pensions
Investment re t u rn
Salary scale increase per annum
Discount rate for liabilities
P rojected over/(under)-funding
RFHSM
Projected Unit
Projected Unit
2004
2003
2002
2004
2003
2002
2.75%
2.75%
3.00%
6.40%
4.25%
5.75%
2.50%
2.50%
3.00%
5.90%
4.00%
5.25%
3.00%
3.00%
3.00%
6.50%
4.00%
5.50%
3.10%
3.10%
3.10%
7.30%
3.10%
5.80%
2.60%
2.60%
2.60%
6.80%
4.60%
5.50%
2.50%
2.50%
2.50%
6.70%
4.50%
6.00%
£5.2 million
Funding level
FPS (1645)
131.00%
£4.7 million £2.7 million £(4.5) million £(6.3) million£(5.1) million
128.00%
116.90%
60.20%
50.00%
51.90%
P resent value of liabilities
£16.5 million £16.9 million £15.9 million £11.3 million £12.6 million£10.6 million
Fair value of the scheme assets £21.7 million £21.6million £18.6 million £6.8 million £6.3 million £5.5 million
Current Employers contribution rate
nil
-
-
*45%
-
-
* From 1 September 2004 the rate increased to 48.7%
Disclosure of fair values of assets and expected rates of returns
FPS
Expected
Expected
Expected
rate of re t u rn
Fair value rate of re t u rn
Fair value rate of re t u rn
2004
Deposit Admin. contract
Equities
Annuities
Bonds
Cash
Equities
Annuities
Bonds
Cash
Total
2003
7.50%
5.75%
5.50%
3.50%
Total
RFHSM
2004
9,060
6,716
5,729
196
7.00%
5.25%
5.00%
3.00%
21,701
Fair value
2003
2002
2002
-
6.50%
11,568
8,714
7,117
5,502
259
5.50%
-
6,979
-
21,592
18,547
Expected
Expected
Expected
rate of re t u rn
Fair value rate of re t u rn
Fair value rate of re t u rn
Fair value
2004
2004
2003
2003
2002
2002
7.90%
4.90%
2.90%
5,425
1,374
-
7.40%
4.50%
2.40%
5,075
1,205
-
7.30%
4.70%
2.30%
4,352
1,101
66
6,799
6,280
5,519
University College London Repor ts and Financial Statements 2003/2004
29
Notes to the Accounts
Under the transitional arrangements of FRS 17 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
FPS (1645)
RFHSM
2004
£’000
2003
£’000
2002
£’000
2004
£’000
2003
£’000
2002
£’000
Current ser vice cost
Past service costs
(Gains)/losses on any settlements
and curtailments
272
-
272
-
177
500
509
-
355
-
459
-
-
-
-
138
-
-
Total operating charge
272
272
677
647
355
459
Amounts to be included on other finance costs
Expected return on scheme assets
(Discount) on scheme liabilities
Net finance return/(charge)
FPS (1645)
RFHSM
2004
£’000
2003
£’000
2002
£’000
2004
£’000
2003
£’000
2002
£’000
1,267
(885)
1,136
(873)
1,248
(672)
424
(686)
382
(642)
472
(605)
382
263
576
(262)
(260)
(133)
Amounts to be included in the Statement of Total Recognised Gains and Losses (STRGL)
FPS (1645)
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
Total actual gains and losses recognised
in the STRGL
RFHSM
30
2004 % asset or
£’000
liability
value
(799)
406
(-4% on
assets)
(2% on
liabilities)
722
329
(2% on
liabilities)
Difference between actual and expected
184
return of scheme assets
Experience gains/(losses) arising on scheme
863
liabilities
Effects of changes in assumptions underlying
the present value of scheme liabilities
1,052
(3% on
assets)
(8% on
liabilities)
Total actual gains and losses recognised
in the STRGL
(19% on
liabilities)
University College London Reports and Financial Statements 2003/2004
2,166
508
(10% on
assets)
(3% on
liabilities)
(612)
2004 % asset or
£’000
liability
value
2,099
2003 % asset or
£’000
liability
value
2,062
518
(12% on
liabilities)
(0% on
assets)
(4% on
liabilities)
(1,667)
(1,123)
(1,063) (5.7% on
assets)
(658) (4.1% on
liabilities)
(2,984)
2003 % asset or
£’000
liability
value
26
2002 % asset or
£’000
liability
value
(4,705) (29.6% on
liabilities)
2002 % asset or
£’000
liability
value
(1,755) (31.8% on
assets)
(538) (5.1% on
liabilities)
899
(9% on
liabilities)
(1,394) (13.1% on
liabilities)
Movements in surplus during the year
Surplus/(deficit) in scheme at beginning of the year
Movement in year:
Current ser vice cost
Contributions
Past service costs
Curtailment costs
Other finance income
Actuarial gain/(loss)
Surplus/(deficit) in the scheme at end of the year
FPS (1645)
RFHSM
2004
£’000
2003
£’000
2002
£’000
2004
£’000
4,728
2,675
7,481
(6,302)
(5,092) (3,619)
(272)
263
2,062
(177)
(500)
576
(4,705)
(509)
649
(138)
262
2,099
(355)
(459)
528
514
(260)
(133)
(1,123) (1,395)
4,728
2,675
(3,939)
(6,302) (5,092)
(272)
382
329
5,167
Balance sheet presentation
2003
£’000
2004
£’000
Restated
2003
£’000
Net assets
Net pension asset/(liability)
430,321
1,228
350,585
(1,574)
Net assets including FRS 17 disclosure
431,549
349,011
Reserves
Net pension asset/(liability)
101,621
1,228
93,924
(1,574)
Reserves including FRS 17 disclosure
102,849
92,350
2002
£’000
33. RELATED PARTY TRANSACTIONS
Transactions with subsidiaries of UCL have been eliminated on consolidation and no disclosure of these transactions
has there f o re been given. UCL has no related party transactions which re q u i re disclosure under FRS 8.
34. CONTINGENT LIABILITY
UCL is a member of UM Association (Special Risks) Ltd, a university mutual company limited by guarantee, formed
to provide cover for losses arising from acts of terrorism. If the association suffers a shor tfall 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 of £10 million accumulated from the net contributions of Members;
(b) £15 million ‘internal’ loan facility from Member institutions (UCL is not a participating institution);
(c) £425 million aggregate layer of ‘excess’ cover obtained through the Bermudan and Lloyds insurance market
(structured as £250 million for any one loss or in the aggregate, followed by a further loss of £175 million or
in the aggregate);
(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 supplementar y contributions levied
are to be calculated pro rata to the Advance Contributions (less any return of them) made in the relevant
indemnity year.
35. CONTINGENT ASSET
In October 2004 UCL received £1.5 million relating to a refund of VAT under a partial exemption claim for the period
1 May 2000 to 31 July 2003. The receipt will be recognised at the point payment became virtually certain, which
was after the year end. It will there f o re be included in the Financial Statements for the year ending 31 July 2005.
University College London Repor ts and Financial Statements 2003/2004
31
Financial Summaries (unaudited)
2004
£’000
2003
£’000
2002
£’000
2001
£’000
2000
£’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
145,766
76,480
161,860
99,837
5,833
131,847
69,695
159,779
92,694
4,503
129,796
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
Total income
489,776
458,518
433,444
412,283
381,395
EXPENDITURE
Staff costs
Other operating expenses
Interest payable
Depreciation
305,010
146,506
7,811
26,544
286,760
137,283
7,274
26,139
273,137
129,503
7,119
23,003
258,499
131,096
6,294
19,211
242,118
117,116
5,982
17,376
Total expenditure
485,871
457,456
432,762
415,100
382,592
3,905
1,062
682
(2,817)
(1,197)
(144)
30
(54)
(61)
(202)
-
-
-
Profit/(loss) on disposal of fixed asset investments
55
Profit on disposal of tangible fixed assets
4,054
(56)
1,164
478
1,493
2,206
1,027
SURPLUS/(DEFICIT) FOR THE YEAR AFTER
DISPOSAL OF FIXED ASSETS BUT BEFORE TAX
2,055
958
882
(170)
(2)
-
(12)
-
SURPLUS/(DEFICIT) FOR THE YEAR BEFORE
DISPOSAL OF FIXED ASSETS AND BEFORE TAX
Share of operating loss in joint ventures
Share of operating profit/(loss) in associate
Taxation
Share of taxation in associates
Minority interest
SURPLUS/(DEFICIT) FOR THE YEAR AFTER
DISPOSAL OF FIXED ASSETS AND TAX
Transfer to accumulated income within
specific endowments
SURPLUS/(DEFICIT) FOR THE YEAR
32
University College London Reports and Financial Statements 2003/2004
7,900
(106)
(1)
(17)
(6)
(10)
-
489
41
48
13
8,282
2,073
996
893
(529)
-
-
996
893
(585)
7,697
1,484
-
(182)
-
(182)
Mission Statement
A renowned global leader, generating and disseminating
original knowledge to benefit the world of the future.
Strategic Objectives
UCL is committed to using its excellence in research and
teaching to enrich society’s intellectual, cultural, scientific,
economic, environmental and medical spheres.
UCL’s commitment to excellence and innovation is central
to this vision.
It intends to be:
a world leader in teaching, scholarship and research
across the sciences and arts, serving local, national
and international needs;
at the forefront in tackling humanity’s environmental,
healthcare and communication challenges;
an employer of high calibre staff, whose diversity and
creativity it celebrates and;
true to its founders’ pioneering vision by providing
educational opportunities of the highest quality to
all capable of benefiting, regardless of background.
In pursuit of these objectives UCL will continue to build on
partnerships with scholars around the world; with industry
and the professions; with local and national governments;
with other national and international academic centres of
excellence (including museums, galleries, libraries and
archives); and with its network of former students.
DISCLAIMER
Neither an audit nor a review provides assurance on the maintenance and integrity of the
website, including controls used to achieve this, and in particular whether any changes may
have occurred to the financial information 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
information differs from legislation in other jurisdictions.