LONDON’S GLOBAL UNIVERSITY
CELEBRATING 180 YEARS
Financial Statements
2004–2005
Misson Statement
UCL – London’s Global University
We are
• a world-class centre of research and teaching, dedicated to
developing and disseminating original knowledge to benefit the
world of the future.
We believe
• in engaging fully with the world around us;
• in breaking new ground through challenging convention;
• in progress through partnership.
We value
• creativity and innovation;
• independent thought;
• integrity;
• energy;
• perseverance.
We commit
• to unswerving pursuit of excellence;
• to maintaining rich academic diversity embracing the Arts
and Sciences;
• to equality of opportunity and fulfilment of potential for all our staff
and students.
We strive always
• to lead;
• to inspire;
• to achieve.
Contents
1
2
3
5
7
8
9
Committee Membership
Financial Highlights
Treasurer’s Report
Corporate Governance
Responsibilities of the Council of University College
London
Independent Auditors’ Report to the Members of the
Council of University College London
Statement of Principal Accounting Policies
11
12
13
14
15–35
36
Consolidated Income and Expenditure Account
Consolidated Balance Sheet
UCL Balance Sheet
Statement of Total Recognised Gains and Losses and
Statement of Consolidated Cash Flow
Notes to the Accounts
Financial Summaries (unaudited)
Committee Membership
Council 2004/2005
Finance Committee 2004/2005
Lay Members:
Lord Young of Graffham◆* (Chair)
Lord Woolf of Barnes◆* (Vice-Chair)
Mr Kerry Hawkins◆ (Treasurer)
Sir John Birch*
Ms Adele Biss◆*
Sister Teresa Finn
Baroness Flather of Windsor and Maidenhead
Lord Hart of Chilton
Mr Christopher Jonas
Mr Roger Lyons
Miss Margaret Rudland
Ms Janet Salmon
Dr Paul Williams
Lay Members:
Mr Kerry Hawkins (Chair)
Mr Nigel Buchanan
Ms Anne Bulford
Mr David Dutton
Mr Robin Fox
Mr Derek Thomas
Lord Woolf of Barnes
Lord Young of Graffham
Academic Members:
Professor Malcolm Grant◆* (Provost)
Professor Mary Fulbrook*
Professor Katherine Homewood
Dr Mark Lancaster
Professor Peter Mobbs*
Professor Richard Munton
Professor Santa Ono
Professor David Price
Dr Andrea Townsend-Nicholson
Dr Nicholas Tyacke
UCL Union:
Ms Victoria Green
Mr David Renton
Audit Committee 2004/2005
Lay Members:
Ms Adele Biss (Chair)
Sir John Birch
Mr John Hustler
Mr Mark Knight
Dr Paul Williams
Academic Members:
Professor Malcolm Grant (Provost)
Professor David Bogle
Professor Hazel Genn
Dr Azara Janmohamed
Dr David MacManus
Professor Santa Ono
Dr Laura Vaughan
Vice-Provosts:
Professor David Delpy
Professor Richard Frackowiak
Miss Marilyn Gallyer
Professor Michael Spyer
Professor Michael Worton
UCL Union:
Ms Victoria Green
Investments Committee 2004/2005
Lay Members:
Mr Kerry Hawkins (Chair)
Mr Nigel Buchanan
Mr David Dutton
Mr Robin Fox
Mr Hugh Stevenson
◆
denotes also member of Remuneration Committee
* denotes also member of Nominations Committee
1
Financial Highlights
CONSOLIDATED INCOME & EXPENDITURE ACCOUNT
2005
£m
Restated
2004
£m
Change
%
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Profit on disposal of current asset investments
Endowment income and interest receivable
153.2
82.5
167.4
104.9
1.4
6.9
145.8
76.5
161.9
99.8
–
5.8
5.1
7.8
3.4
5.1
–
19.0
TOTAL INCOME
516.3
489.8
5.4
TOTAL EXPENDITURE
519.5
485.9
6.9
Share of operating loss in joint ventures and associates
(Loss)/profit on disposal of tangible fixed assets
Profit on disposal of operations
Taxation
Minority interest
Transfer from/(to) accumulated income within specific endowments
(0.4)
(0.4)
7.7
0.1
0.1
0.4
(0.1)
4.1
–
(0.1)
0.5
(0.6)
4.3
7.7
Fixed assets
Endowment asset investments
Net current assets
429.0
89.5
60.5
373.8
77.6
63.5
14.8
15.3
(4.7)
Total assets less current liabilities
579.0
514.9
12.4
Non-current liabilities and provisions
(87.7)
(85.2)
2.9
0.6
(0.6)
–
SURPLUS FOR THE YEAR
CONSOLIDATED BALANCE SHEET
Minority interest
TOTAL NET ASSETS
491.9
429.1
14.6
290.7
89.5
111.7
251.1
77.6
100.4
15.8
15.3
11.3
23.2
41.5
9.9
2.7
2005
No.
2004
No.
19,414
8,954
18,991
9,055
Represented by:
Deferred grants
Endowments
Reserves
OTHER KEY STATISTICS
Consolidated recognised gains
Consolidated movement in cash flow
Student numbers
Average payroll numbers
2
Treasurer’s Report
Scope of Financial Statements
of the underlying investments.
The Council of UCL is responsible for these financial
statements, as described on page 7. The format of the
financial statements follows the Statement of Recommended
Practice: Accounting for Further and Higher Education
Institutions.
The Investments Committee, aided by a specialist consultancy
service, actively monitors performance of the Investment Fund
Manager against standard benchmarks and within their peer
group. Following a full review and tender exercise in the early
Summer, the Investments Committee appointed Newton
Investment Managers to take over as Investment Fund
Managers from 1 August 2005.
The financial statements include the consolidated results of
UCL’s subsidiary 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.
Results for the year
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
and operations
Taxation and minority interest
Transfer from/(to) endowments
Surplus for the year
2005
£m
2004
£m
516.3
519.5
489.8
485.9
Cashflow
UCL’s cash balances remained healthy throughout the
year, notwithstanding the backdrop of a significant capital
programme, and UCL did not need recourse to draw down
further against the borrowing facility with the Royal Bank of
Scotland. Total borrowing under this arrangement remained 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
(0.4)
(0.1)
7.3
0.2
0.4
4.3
4.1
0.4
(0.6)
7. 7
Although it is encouraging to report that the outturn for the
year is again a surplus, the Income and Expenditure Account
continues to show an underlying operating deficit position,
made good this year by a £7.7 million contribution from the
sale of intellectual property rights in one of UCL’s subsidiary
companies. This operating deficit has required the
continuation of a robust programme for reducing costs,
including staff reductions, and wherever possible, the
identification of activities for increased income generation.
The financial highlights, as detailed on page 2, reveal some
positive aspects: total income increasing by 5.4% to £516
million; an increase of 7.8% in Academic Fee income to £82.5
million; and a 3.4% increase in Research Grants & Contract
Income to £167.4 million. The majority of UCL’s sponsored
research income is derived from two prominent sources,
with income from UK Charities and Research Councils,
representing 46% and 32%, respectively, of total research
income.
The balance sheet also reflects yet another year of very
significant investment in infrastructure with tangible fixed asset
additions totalling £83.4 million of which £70 million relates to
new and refurbished buildings. This now brings fixed asset
additions to £296 million in the last 5 years.
In May 2005, UCL submitted its bid for funding under round 3
of the Science Research Investment Fund (SRIF) allocation for
Capital Funding for Learning and Teaching, Research and
Infrastructure. It is very pleasing to note that UCL benefited by
£76.9 million from this initiative, and the funds awarded were
one of the highest allocations. This provides evidence of
UCL’s outstanding performance, both in the quality and
volume of teaching and research in recent years, upon which
HEFCE’s allocation of funds was based. UCL had also
received significant sums, achieving the highest award, in
both rounds 1 and 2 of SRIF.
During the year UCL’s substantial capital programme, in
excess of £200 million, saw the completion of four new
developments. I reported last year that work had been
completed on the new four storey Molecular Neuroscience
building, and I am now pleased to report that the building
has been named in honour of one of UCL’s former Nobel
Laureates, Sir Andrew Huxley, in recognition of his
achievements and contribution to UCL and physiology. It
was formally opened in his presence in March 2005,
by Lord Sainsbury.
In December 2004, the departments of Computer Science,
Medical Physics and Mechanical Engineering moved to the
new nine storey extension to the main Engineering building,
and in January 2005, the Centre for Auditory Research,
established to conduct major research initiatives into deafness,
opened in its new building in the Gray’s Inn Road.
Work was substantially completed on the new SSEES (School
of Slavonic and East European Studies) building with staff
moving in during the summer.
Investment Performance
Creditors Policy
Stock markets world-wide have continued to show
improvement in recent years. The value of endowment asset
investments increased to £89 million, compared to £78 million
the year before, and includes £6 million from the appreciation
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.
3
Staff and their Involvement
Considerable value is placed on the involvement of employees
at all levels and on improving communication across a large
and complex organisation, and all staff are encouraged to
participate in discussion about the future strategic direction of
UCL. UCL’s first Staff Survey showed that it has a body of
staff with high job satisfaction and positive attitudes towards
UCL’s working environment. Priorities for further improvement
have been incorporated in an action plan, the implementation
of which will be overseen by the Provost’s Senior Management
Team. A comprehensive staff training and development
programme provides general, management and specialist
training to all staff and in the last year training targets have
been established to ensure that all staff benefit from the
training available.
A major review of pay and grading structures and conditions
of employment within a new national Pay Framework has now
been negotiated. This will modernise and simplify UCL’s pay
and grading arrangements, ensure equal pay and that UCL’s
pay and benefits packages enable it to compete effectively in
a global market. A recent survey showed UCL average
academic salaries to be amongst the highest in the UK and
UCL will continue to benchmark salaries against those of its
competitors.
As an internationally renowned university, UCL seeks to
employ a diverse workforce that reflects its student
population and the many regions of the world from which
it recruits. Monitoring data has led to the establishment of
workforce equality targets in relation to the workforce profile
and 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 monitors
the implementation of a broad range of employment
policies to ensure that they do not have a discriminatory
impact on particular groups of staff.
Other Major Activity
In my report last year I mentioned the wide-ranging
consultation process being undertaken with a view to
determining UCL’s future course and strategy – the Provost
and his Senior Management Team have made significant
in-roads towards the achievement of a sustainable long-term
financial position. This includes the introduction of a new
Resource Allocation Model which, with devolvement to
Faculties, will allow greater influence in the management of
finances within Faculties and Departments, and the
achievement of challenging financial targets, including a
reduction in staffing costs. Also fundamental to longer-term
financial stability is the increased Government funding for
research which is to flow in the medium term from additional
HEFCE Charity-QR funding, and from the introduction of full
economic costing, particularly the funding by the UK Research
Councils.
UCL has been successful in securing funding for two Centres
for Excellence in Teaching and Learning (CETL) as part of
HEFCE’s nationwide initiative to promote excellence in
teaching and learning across all subjects. UCL’s Faculty of
Arts and Humanities and SSEES, in collaboration with the
School of Oriental and African Studies (SOAS), will research
and develop methods of learning and teaching languages,
4
particularly the less commonly taught languages of Africa,
Asia, the Middle East and Europe. UCL is also a partner with
the Universities of Leicester and Nottingham in the CETL for
Spatial Literacy and Teaching (SPLINT).
Earlier in the year plans were announced for the partnering of
the National Institute for Medical Research (NIMR) with UCL,
involving its co-location to a site enabling close interaction with
UCL researchers and UCL’s associated hospital trusts. The
NIMR enjoys an international reputation as a centre for
excellence in infection and immunity, development biology and
neuroscience, and has produced five Nobel prize winners.
Although considerable synergies already exist between our
two institutions, we are very excited by the prospect that
existing collaborations can be expanded and future
partnerships developed.
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. An extensive teaching
programme is in place comprising 230 undergraduate
programmes, more than 190 taught Masters’ programmes,
and research teaching to MPhil or PhD level across all UCL’s
academic departments.
UCL’s strength in research and its position as a ‘powerhouse’
of research was evidenced by the 2005-06 HEFCE grant
allocation for research, which was the highest of any university
in the UK. The introduction of full economic costing of
research in 2005-06 is the beginning of a process for ensuring
that research is more realistically funded, with the result that
UCL’s financial position should be strengthened, and progress
made towards true sustainability of its activities.
Advancing London’s Global University – the Campaign for
UCL was launched in the Autumn 2004 in London and Hong
Kong, and in January 2005 in the United States. Sir Digby
Jones (Laws 1977; Fellow 2004), Director-General of the CBI,
is its President with fifty more illustrious Alumni and friends of
UCL as Vice-Presidents. The campaign aims to raise £300m
over the next decade towards new facilities, academic posts,
bursaries, scholarships and other forms of support. It has had
a very promising start, with some £10m of new donations and
pledges received in its first year, as well as significant new
legacy pledges.
Conclusion
It is encouraging that UCL has been able to record a surplus
position on its Income and Expenditure Account – this reflects
the substantial efforts made by staff across the whole of UCL
to achieve challenging targets on the operating budget, and
the receipt of one-off income derived from exploitation of
UCL’s intellectual property. The underlying position continues
to be demanding, and requires a significant effort to manage
more effectively the resources at our disposal, whilst
maintaining our vision of enhanced academic quality through
the pursuit of international excellence. UCL’s strategy remains
critically dependent on the delivery by Government of
promised additional funding during the course of the next
few years.
Kerry J Hawkins
Treasurer
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, in common with all Russell Group
Universities, keeps under careful review its organisation and
arrangements to ensure that the best principles of
Governance and Management are maintained in a manner
appropriate to the nature and character of the institution. In so
doing, it takes into careful account such guidance as set out
for example in the Combined Code, the Reports of the
Committee on Standards in Public Life and the CUC
Governance Code of Practice.
UCL’s Governing Body, the Council, is 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 2005 meeting, the Council carried out an
annual assessment for the year ended 31 July 2005 by
considering a report from the Audit Committee, and taking
account of events since 31 July 2005. 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 2005,
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.
In accordance with the Statutes of UCL, the Council
comprises lay members, the President and Provost (Provost
hereafter), academic staff members and student members (in
numbers specified by Statute). The Statutes provide for the
distinct roles of Chair and Vice-Chair of the Council, the
Treasurer, and of UCL’s Chief Executive, the Provost. The
powers and duties of the Council are set out in Statutes; by
custom and under the Financial Memorandum with the Higher
Education Funding Council for England, the Council holds to
itself the responsibilities for the ongoing strategic direction of
UCL, approval of major developments and the receipt of
regular reports from UCL officers on the day to day operations
of its business and its subsidiary companies. The Council has
formally identified those items of business which it retains to
itself for collective decision. The Council meets at least three
times each year; it has several committees, including an
Academic Board, Finance Committee, Audit Committee, Risk
and Efficiency Committee, Remuneration Committee and
Nominations Committee. All of these Committees are formally
constituted with Terms of Reference.
In accordance with the Regulations for Management of UCL,
the Finance Committee comprises lay members, the Provost
and academic staff members (in numbers specified by
regulation). The Committee meets at least 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 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 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 reports 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 Services 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 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.
5
The Risk and Efficiency Committee includes the Vice-Provosts
for Administration and Academic/International Matters, the
Dean of Students, and the heads of UCL’s Corporate Support
Services; 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).
6
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.
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.
designed to discharge the responsibilities set out above,
include the following:
(i)
clear definitions of the responsibilities of, and
authority delegated to, heads of academic and
administrative departments;
(ii)
comprehensive Financial Regulations, detailing
financial controls and procedures, approved by the
Council;
(iii)
a professional Internal Audit Service whose
annual programme of work is approved by Audit
Committee endorsed by the Council, and whose
head provides the Provost, Audit Committee and
Council, with a report on internal audit activity
within UCL and an opinion on the adequacy and
effectiveness of UCL’s system of internal
control, including internal financial control;
(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.
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.
Any system of internal control can only provide
reasonable, and not absolute, assurance against
material misstatement or loss.
The Council has taken reasonable steps to:
(i)
ensure that funds from the Higher Education
Funding Council for England are used only for
the purposes for which they have been given
and in accordance with the Financial
Memorandum with the Funding Council and any
other conditions which the Funding Council may
from time to time prescribe;
(ii)
ensure that there are appropriate financial and
management controls in place to safeguard
public funds and funds from other sources;
(iii)
safeguard the assets of UCL and prevent and
detect fraud;
(iv)
secure the economical, efficient and effective
management of UCL’s resources and
expenditure.
The key elements of UCL’s system of internal control, which is
7
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 2005 which comprise the
statement of principal accounting policies, the consolidated
income and expenditure account, the consolidated and UCL
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
Memorandum dated October 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 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.
8
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 2005 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 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 October 2003 with
the Higher Education Funding Council for England.
Deloitte & Touche LLP
Chartered Accountants
and Registered Auditors
London
13 December 2005
Statement Of Principal Accounting Policies
The Principal Accounting Policies have not changed from the
previous published Financial Statements, other than the
treatment of Intangible Fixed Assets (see 10 below).
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.
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
partner under an agency agreement. The resulting exchange
differences are dealt with in the determination of income and
expenditure for the financial year.
6. Taxation
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.
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.
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
Fixtures and fittings
20 years
10 years
8. Equipment
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.
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
9
9. Leased Assets
12. Stocks
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.
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 charged to the Income and Expenditure
Account in full, in the year in which they are incurred.
11. 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.
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.
10
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 2005
2005
£’000
Restated
2004
£’000
153,201
82,502
167,425
104,908
1,332
6,906
145,766
76,480
161,860
99,837
5,833
516,274
489,776
Note
INCOME
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Profit on disposal of current asset investments
Endowment income and interest receivable
1
2
3
4
5
Total Income
In addition, income of £2,110,000 (2004 – £1,706,000 has been derived from joint ventures as explained in note 13)
EXPENDITURE
Staff costs
Other operating expenses
Interest payable
Depreciation
6
7
8
9
Total Expenditure
(DEFICIT)/SURPLUS FOR THE YEAR BEFORE
DISPOSAL OF FIXED ASSETS AND BEFORE TAX
325,512
158,187
7,867
27,924
305,010
146,521
7,811
26,544
519,490
485,886
(3,216)
3,890
Share of operating loss in joint ventures
Share of operating (loss)/profit in associates
13
13
(226)
(122)
Profit on disposal of operations
Profit on disposal of fixed asset investments
(Loss)/profit on disposal of tangible fixed assets
10
10
10
7,732
(392)
55
4,054
3,776
7,885
SURPLUS FOR THE YEAR AFTER DISPOSAL
OF FIXED ASSETS BUT BEFORE TAX AND
MINORITY INTERESTS
(144)
30
Taxation credit/(charge)
Share of taxation in associates
80
1
(106)
(1)
Minority interest
68
489
3,925
8,267
SURPLUS FOR THE YEAR AFTER DISPOSAL
OF FIXED ASSETS, TAX AND MINORITY INTERESTS
Transfer from/(to) accumulated income within specific endowments
SURPLUS FOR THE YEAR
424
4,349
(585)
7,682
The consolidated income and expenditure of the Group relate wholly to continuing activities.
2004 figures have been restated. Details of restatements are provided at Note 7 and resulted in a decrease in
surplus for 2004 of £15,000 from £7,697,000 to £7,682,000.
11
Consolidated Balance Sheet
as at 31 July 2005
FIXED ASSETS
Tangible assets
Investments in joint ventures:
Share of gross assets
Share of gross liabilities
Investments in associates
Investments
Note
2005
£’000
Restated
2004
£’000
11
418,471
363,481
13
13
13
13
ENDOWMENT ASSET INVESTMENTS
14
CURRENT ASSETS
Stores
Debtors
Short 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
1,597
(218)
9,207
1,745
(140)
2
8,695
429,057
373,783
89,486
77,598
1,178
123,613
31,254
14,250
991
109,216
40,709
7,668
170,295
158,584
(109,716)
(119)
(95,041)
-
60,460
63,543
579,003
514,924
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR
17
(85,833)
(83,278)
PROVISIONS FOR LIABILITIES AND CHARGES
18
(1,878)
(1,964)
MINORITY INTEREST
594
NET ASSETS
DEFERRED CAPITAL GRANTS
491,886
429,092
290,742
251,102
89,126
360
77,238
360
20
89,486
77,598
21
22
23
102,118
9,540
-
98,292
2,100
111,658
100,392
491,886
429,092
19
ENDOWMENTS
Specific
General
RESERVES
Income and expenditure account
Revaluation reserve
Other reserves
TOTAL
(590)
Approved by Council on 13 December 2005
Kerry J. Hawkins
Treasurer
12
Professor Malcolm Grant
President and Provost
Jack W. Foster
Director of Finance
Balance sheet as at 31 July 2005
FIXED ASSETS
Tangible assets
Investments
Note
2005
£’000
Restated
2004
£’000
11
13
416,916
10,563
361,990
10,079
427,479
372,069
89,486
77,598
260
127,710
30,708
4,542
329
110,669
40,708
3,171
163,220
154,877
(106,035)
(92,480)
57,185
62,397
574,150
512,064
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
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR
17
(83,359)
(83,278)
PROVISIONS FOR LIABILITIES AND CHARGES
18
(1,878)
(1,964)
NET ASSETS
DEFERRED CAPITAL GRANTS
488,913
426,822
286,947
250,071
89,126
360
77,238
360
20
89,486
77,598
21
22
102,940
9,540
99,153
-
112,480
99,153
488,913
426,822
19
ENDOWMENTS
Specific
General
RESERVES
Income and expenditure account
Revaluation reserve
TOTAL
Approved by Council on 13 December 2005
Kerry J. Hawkins
Treasurer
Professor Malcolm Grant
President and Provost
Jack W. Foster
Director of Finance
13
Statements of Total Recognised Gains
and Losses and of Cash Flow
STATEMENT OF CONSOLIDATED TOTAL RECOGNISED GAINS AND LOSSES
2005
£’000
Restated
2004
£’000
20
20
20
21
3,925
5,937
2,082
3,018
752
8,267
218
1,269
103
-
22
23
9,540
(2,100)
Note
Surplus after depreciation of assets
Appreciation of endowment asset investments
Net new endowments
Net realised gain from sale of endowment asset investments
Adjustment to income and expenditure reserve for
previously unconsolidated subsidiaries
Unrealised surplus on revaluation of fixed assets
Bloomsbury Bioseed Fund Ltd – Government grants reclassified
from other reserves to deferred grants
23,154
-
9,857
RECONCILIATION TO CLOSING RESERVES AND ENDOWMENTS
Opening reserves and endowments
Total recognised gains and losses for the year
177,990
23,154
Closing reserves and endowments
201,144
RECONCILIATION OF MOVEMENT IN FUNDS TO THE LAST ANNUAL REPORT
Total recognised gains and losses relating to the year
Prior year adjustment for revised treatment of patent expenditure (Note 21)
23,154
(1,229)
Total movement in funds since last annual report
21,925
STATEMENT OF CONSOLIDATED CASH FLOW
Note
Net cash inflow from operating activities
Returns on investments and servicing of finance
Taxation
Capital expenditure and financial investment
Restated
2004
£’000
29
8,139
(935)
80
25,002
27,462
(1,823)
(106)
137
Cash inflow before use of liquid resources and financing
Management of liquid resources
Financing
26
30
32,286
9,455
(239)
25,670
(22,756)
(203)
Increase in cash in the year
26
41,502
2,711
14
25
28
2005
£’000
Notes to the Accounts
1. FUNDING COUNCIL GRANTS
HEFCE Recurrent Grant - Teaching
- Research
- Other
Deferred Capital Grants released in year
2005
£’000
2004
£’000
57,332
81,455
8,686
5,728
53,693
77,324
10,213
4,536
153,201
145,766
2005
£’000
2004
£’000
24,746
37,808
4,456
4,489
4,285
6,718
24,627
35,159
4,076
3,885
2,119
6,614
82,502
76,480
2005
£’000
2004
£’000
130,616
36,809
126,747
35,113
167,425
161,860
53,772
76,844
14,896
7,050
7,360
1,092
6,411
-
48,943
77,804
12,202
8,378
7,183
1,076
6,223
51
167,425
161,860
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
Income from research grants and contracts includes deferred capital grants released in the year of
£8,790,000 (2004 – £9,544,000).
15
Notes to the Accounts
4. OTHER OPERATING INCOME
Residences and catering
Other services rendered
Health authorities
Donations and sundry grants
Released from deferred capital grants
Other income
2005
£’000
2004
£’000
16,584
26,774
30,351
11,836
2,560
16,803
15,704
25,988
25,884
16,721
1,812
13,728
104,908
99,837
2005
£’000
2004
£’000
2,936
3,970
2,953
2,880
6,906
5,833
2005
£’000
2004
£’000
271,211
23,997
30,304
255,345
22,291
27,374
325,512
305,010
£
£
216,004
28,858
210,213
28,000
244,862
238,213
-
25,000
-
-
25,000
Income from residences and catering includes deferred capital
grants released in the year of £9,000 (2004 – £9,000).
5. ENDOWMENT INCOME AND INTEREST RECEIVABLE
Income from endowment asset investments (Note 20)
Other interest receivable
6. INFORMATION REGARDING EMPLOYEES
Staff costs:
Salaries and wages
NI contributions
Other pension costs
Emoluments of the Provost and President:
M Grant (started 01/08/03)
D Roberts (left 30/09/03)
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 one higher paid employee totalled £117,250 (2004 - two employees
totalled £152,069).
16
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:
2005
2004
No.
No.
£70,001
£80,001
£90,001
£100,001
£110,001
£120,001
£130,001
£140,001
£150,001
£160,001
£170,001
£180,001
£190,001
£200,001
£210,001
£250,001
£260,001
£290,001
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
£80,000
£90,000
£100,000
£110,000
£120,000
£130,000
£140,000
£150,000
£160,000
£170,000
£180,000
£190,000
£200,000
£210,000
£220,000
£260,000
£270,000
£300,000
126
67
62
48
24
19
18
22
19
9
16
7
7
5
2
1
1
110
80
43
39
16
32
12
15
9
5
3
1
1
1
-
For the year ended 31 July 2005, UCL paid arrears of salary under the new Clinical Consultant contracts, backdated
to April 2003, and these arrears are reflected in the above salary bandings. In most cases, the element of pay
relating to NHS clinical work is fully reimbursed by the NHS.
The average number of individuals paid through the payroll during the year was 8,954 (2004 - 9,055).
7. OTHER OPERATING EXPENSES
Residences and catering
Furniture, computer and other equipment costs
Academic consumables and laboratory expenditure
Books, publications and periodicals
Scholarships and prizes
General educational expenditure
Rents, rates and insurance
Heat, light, water and power
Service charges
Repairs and general maintenance
Long term maintenance
Telephone
Advertising and recruitment
Printing, postage, stationery and other office costs
Conference, travel and training
Professional fees
Audit fees
Other fees paid to auditors
Grants to Students Union and other student bodies
Payments to non contract staff and agencies
Other costs
2005
£’000
Restated
2004
£’000
8,118
15,813
25,657
4,863
12,489
7,108
8,395
4,948
5,774
9,575
4,736
1,882
1,579
6,985
10,922
7,090
100
88
1,675
5,636
14,754
7,392
15,490
25,623
4,694
10,951
5,891
8,354
4,111
5,144
9,902
3,519
2,476
1,560
7,073
10,495
5,299
78
47
1,495
4,420
12,507
158,187
146,521
Following a change in accounting policy, patent costs are now charged to the Income and Expenditure Account in
full, in the year in which they are incurred. A prior year adjustment has been made to other costs in 2004 charging
£566,000 of patent costs, and reversing the charge of £551,000 for patent amortisation, a net increase in costs
of £15,000.
17
Notes to the Accounts
8. INTEREST PAYABLE
Bank loans and other loans wholly repayable within five years
Loans not wholly repayable within five years
Finance leases
2005
£’000
2004
£’000
246
4,122
3,499
307
3,969
3,535
7,867
7,811
9. ANALYSIS OF EXPENDITURE BY ACTIVITY
2005
Academic departments
Academic services
Research grants and contracts
Residences and catering
Premises
Administration and central services
Other expenses
Staff
Costs
£’000
Other
Operating
Expenses
£’000
Interest
Payable
£’000
Depreciation
£’000
Total
£’000
162,354
14,491
89,586
2,644
6,139
27,185
23,113
23,994
9,257
49,517
8,118
34,572
17,794
14,935
1,986
3,773
2,108
2,476
1,235
8,790
1,412
13,549
282
180
188,824
24,983
147,893
14,160
58,033
45,261
40,336
325,512
158,187
7,867
27,924
519,490
The depreciation charge has been funded by:
Deferred capital grants released (Note 19)
General income
17,087
10,837
27,924
2004 Restated
Academic departments
Academic services
Research grants and contracts
Residences and catering
Premises
Administration and central services
Other expenses
Staff
Costs
£’000
Other
Operating
Expenses
£’000
Interest
Payable
£’000
Depreciation
£’000
Total
£’000
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
15,254
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
37,825
305,010
146,521
7,811
26,544
485,886
The depreciation charge has been funded by:
Deferred capital grants released
General income
15,901
10,643
26,544
10. PROFIT/(LOSS) ON DISPOSAL OF OPERATIONS AND FIXED ASSETS
During the year UCL aquired the minority interest in Medic-to-Medic Limited, and the business of Medic-to-Medic Limited was
subsequently sold, resulting in a profit of £7,732,000. Following the sale, the company has changed its name to UCL Bio(3)
Limited.
Equipment scrapped and sold during the year resulted in a loss on disposal of £392,000 (2004 – nil).
18
11. TANGIBLE ASSETS
UCL
Land and Buildings
Freehold
Leasehold
£’000
£’000
Equipment
£’000
Total
£’000
Cost
At 1 August 2004
Additions at cost
Disposals
330,124
52,440
-
114,445
17,528
-
91,704
13,184
(15,590)
536,273
83,152
(15,590)
At 31 July 2005
382,564
131,973
89,298
603,835
Depreciation
At 1 August 2004
Charge for year
Disposals
72,493
12,332
-
28,044
3,741
-
73,746
11,671
(15,108)
174,283
27,744
(15,108)
At 31 July 2005
84,825
31,785
70,309
186,919
Net Book Value
At 31 July 2005
297,739
100,188
18,989
416,916
At 1 August 2004
257,631
86,401
17,958
361,990
Land and Buildings
Freehold
Leasehold
£’000
£’000
Equipment
£’000
Total
£’000
Consolidated
Cost
At 1 August 2004
Additions at cost
Disposals
330,160
52,440
-
115,545
17,528
-
92,847
13,454
(15,639)
538,552
83,422
(15,639)
At 31 July 2005
382,600
133,073
90,662
606,335
Depreciation
At 1 August 2004
Charge for year
Disposals
72,537
12,337
-
28,252
3,769
-
74,282
11,818
(15,131)
175,071
27,924
(15,131)
At 31 July 2005
84,874
32,021
70,969
187,864
Net Book Value
At 31 July 2005
297,726
101,052
19,693
418,471
At 1 August 2004
257,623
87,293
18,565
363,481
The declared value of buildings for insurance purposes (day one basis) as at 1 August 2005 was £1,086 million
(2004 – £986.6 million).
The above includes building assets held under finance leases. At 31 July 2005 the net book value of the assets
held under finance leases was £28.440 million (2004 – £29.078 million) with a depreciation charge for the year of
£638,000 (2004 – £638,000).
19
Notes to the Accounts
12. INTANGIBLE ASSETS (PATENTS)
Following a change in accounting policy, patent costs are now charged to the Income and Expenditure Account in full, in the
year in which they are incurred. A prior year adjustment has been made (Note 21).
13. INVESTMENTS HELD AS FIXED ASSETS
Joint Ventures
UCLBS Limited is a joint venture company of University College London (UCL) and London Business School (LBS). 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
research between industry and London-based academia.
These joint venture investments are disclosed in the financial statements as follows:
2005
£’000
2004
£’000
1,217
893
917
789
2,110
1,706
2005
£’000
2004
£’000
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
(180)
(46)
(243)
99
(226)
(144)
2005
£’000
2004
£’000
1,140
457
1,293
452
1,597
1,745
2005
£’000
2004
£’000
Share of gross assets:
The Centre for Scientific Enterprise Ltd
London Technology Network Ltd
Share of gross liabilities:
The Centre for Scientific Enterprise Ltd
London Technology Network Ltd
(97)
(121)
(70)
(70)
(218)
(140)
2005
£’000
2004
£’000
1,043
336
1,223
382
1,379
1,605
Share of reserves:
The Centre for Scientific Enterprise Ltd
London Technology Network Ltd
20
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 investment in associates is disclosed in the financial statements as follows:
2005
£’000
2004
£’000
Share of operating profit/(loss):
Pentraxin Therapeutics Ltd
NCE Discovery Ltd
(101)
(21)
(29)
59
(122)
30
2005
£’000
2004
£’000
Share of taxation:
Pentraxin Therapeutics Ltd
NCE Discovery Ltd
1
(1)
1
(1)
2005
£’000
2004
£’000
Fixed asset investment/(share of net liabilities):
Pentraxin Therapeutics Ltd
NCE Discovery Ltd
(235)
116
(119)
2005
£’000
(134)
136
2
2004
£’000
Share of reserves:
Pentraxin Therapeutics Ltd
NCE Discovery Ltd
(235)
116
(119)
(134)
136
2
21
Notes to the Accounts
Other fixed asset investments
UCL
Balance at 1 August 2004
Additions
Reevaluations
Impairments
Consolidated
Balance at 1 August 2004
Additions
Reevaluations
Impairments
Monies held
on long
term deposits
£’000
Other
investments
£’000
Investment in
subsidiaries
£’000
6,684
446
(57)
273
65
40
-
3,122
(10)
10,079
511
40
(67)
7,073
378
3,112
10,563
Monies held
on long
term deposits
£’000
Other
investments
£’000
Total
£’000
6,684
446
(57)
2,011
283
40
(200)
8,695
729
40
(257)
7,073
2,134
9,207
Total
£’000
Included in monies held on long term deposits is £7.07 million (2004 – £6.63 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
UCL Consultants Ltd
Stanmore Implants Worldwide Ltd
Somers Town Community
Sports Centre (Ltd by Guarantee)
UCL Biomedica Plc
UCL Bio(3) Ltd (formerly
Medic-to-Medic Ltd, now dormant)
Free Clinical Enterprises Ltd (100%
subsidiary of UCL Biomedica Plc)
UCL Analgesia Centre Ltd (100%
subsidiary of UCL Biomedica Plc)
UCL Advanced Diagnostics Ltd
(100% subsidiary of UCL Biomedica Plc)
Nervation Ltd (88% subsidiary
of Biomedica Plc)
Nervation Vascular Technologies
Ltd (100% subsidiary of Nervation Ltd)
Bloomsbury Bioseed Fund Ltd (70%)
Proaxon Ltd (83%) (44% UCL
Cruciform Ltd, 39% BBF Ltd)
22
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 support to staff engaged in consultancy.
Design and manufacture of orthopaedic implants.
Operation of sports centre.
Exploitation of intellectual property.
Developing interactive teaching and learning solutions.
Testing of new drugs in the final approval stage.
Conducting clinical trials in the field of analgesia.
Conducting medical and clinical diagnostics.
Holding company.
Dormant following disposal of business.
Investment in biotechnology start-ups.
Developing and commercialising medical treatments.
14. ENDOWMENT ASSET INVESTMENTS
Consolidated and UCL
2005
£’000
2004
£’000
77,598
5,951
5,937
75,423
1,957
218
89,486
77,598
Represented by:
Fixed interest securities
Unit trusts (fixed interest)
Equities
Cash
36,392
53,094
24
34,341
29,258
13,975
Total endowment asset investments
89,486
77,598
Endowment assets at cost
82,683
76,283
Balance at 1 August 2004
Net additions
Appreciation on valuation
Following a tender exercise in 2005, new investment managers were appointed with effect from 1 August 2005.
Unit trusts and fixed interest securities were sold at the end of July 2005, to facilitate the transfer of the portfolio,
resulting in an unusually high cash balance at 31 July 2005.
15. DEBTORS
UCL
Consolidated
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
2005
£’000
2004
£’000
2005
£’000
2004
£’000
9,626
58,600
15,557
326
477
1,896
36,831
10,270
49,567
12,202
236
183
1,699
34,759
6,392
58,600
15,557
326
477
1,896
11,647
31,691
7,453
49,567
12,202
236
183
1,699
4,290
34,180
300
300
1,124
-
859
-
123,613
109,216
127,710
110,669
23
Notes to the Accounts
16. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
UCL
Consolidated
2005
£’000
2004
£’000
2005
£’000
2004
£’000
Bank loans
248
Overdrafts
7,775
Research grants received on account
44,185
Purchase ledger creditors
11,191
Other creditors including taxation and social security 19,461
Obligations under finance leases
47
Accruals and deferred income
26,809
Inter-company creditors
-
196
3,599
32,982
12,106
18,343
43
27,772
-
248
7,561
44,185
10,705
18,605
47
24,616
68
196
3,489
32,982
10,887
17,967
43
26,834
82
109,716
95,041
106,035
92,480
17. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
UCL
Consolidated
Obligations under finance leases
Cruciform building - Private Finance Initiative
Long term bank loan
Accruals and deferred income
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
2005
£’000
2004
£’000
2005
£’000
2004
£’000
42,422
16,381
24,556
2,474
42,308
16,166
24,804
-
42,422
16,381
24,556
-
42,308
16,166
24,804
-
85,833
83,278
83,359
83,278
2,823
1,734
81,276
295
1,316
81,667
349
1,734
81,276
295
1,316
81,667
85,833
83,278
83,359
83,278
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 £3.5 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 PENSION PROVISION
Consolidated and UCL
2005
£’000
2004
£’000
Balance at 1 August 2004
Utilised in year
Transfer from I and E account
1,964
(175)
89
2,050
(175)
89
Balance at 31 July 2005
1,878
1,964
24
19. DEFERRED CAPITAL GRANTS
UCL
Balance at 1 August 2004
Grants received in year
Disposals
Contribution to depreciation for the year
Balance at 31 July 2005
Consolidated
Balance at 1 August 2004
Adjustment (see below)
Grants received in year
Disposals
Contribution to depreciation for the year
Balance at 31 July 2005
Land and Buildings
Freehold
Leasehold
£’000
£’000
Equipment
£’000
Total
£’000
191,560
31,502
-
47,748
11,913
-
10,763
10,628
(116)
250,071
54,043
(116)
223,062
59,661
21,275
303,998
(1,518)
(8,617)
(17,051)
58,143
12,658
286,947
Land and Buildings
Freehold
Leasehold
£’000
£’000
Equipment
£’000
Investments
£’000
(6,916)
216,146
Total
£’000
191,560
31,502
-
48,779
11,913
-
10,763
10,628
(116)
3,000
(200)
251,102
3,000
54,043
(316)
223,062
60,692
21,275
2,800
307,829
(1,554)
(8,617)
-
(17,087)
59,138
12,658
2,800
290,742
(6,916)
216,146
Following a change in accounting treatment in Bloomsbury Bioseed Fund Ltd, £3 million of Government grants received for seed
funding have been reclassified from other reserves to deferred grants.
20. ENDOWMENTS
Consolidated and UCL
Specific
£’000
General
£’000
Total
£’000
Balance at 1 August 2004
Transfer from Income and Expenditure reserve (Note 21)
Additions
Disposals
Appreciation of endowment asset investments
Income for the year (Note 5)
Net realised gain from sale of investments
Expenditure
77,238
1,275
2,217
(135)
5,937
2,936
3,018
(3,360)
360
9
(9)
-
77,598
1,275
2,226
(144)
5,937
2,936
3,018
(3,360)
Balance at 31 July 2005
89,126
360
89,486
Representing:
Fellowships scholarships and prize funds
Chairs and lectureships funds
Other funds
14,594
11,643
62,889
360
14,594
11,643
63,249
89,126
360
89,486
25
Notes to the Accounts
21. INCOME AND EXPENDITURE ACCOUNT
Consolidated
Restated
2005
2004
£’000
£’000
UCL
2005
£’000
Restated
2004
£’000
99,386
90,012
Balance at 1 August as previously stated
Prior year adjustment for revised treatment of
patent expenditure
99,521
91,824
(1,229)
(1,214)
Balance as at 1 August as restated
98,292
90,610
99,153
89,745
7,682
(1,275)
5,062
9,408
Transfer to endowments
(1,275)
Adjustment for previously unconsolidated subsidiaries
752
Surplus for the year
4,349
(233)
(267)
Balance at 31 July
102,118
98,292
102,940
99,153
The Income and Expenditure account is
designated as follows:
Departmental Reserves
Earmarked reserves
Revenue reserves
75,902
52,372
(26,156)
78,558
40,389
(20,655)
75,902
52,372
(25,334)
78,558
40,389
(19,794)
102,118
98,292
102,940
99,153
£1,275,000 of the accumulated Income and Expenditure reserve has been transferred from departmental reserves
to specific endowments, and invested to provide income for research postgraduate studentships.
22. REVALUATION RESERVE
Consolidated and UCL
2005
£’000
2004
£’000
Balance at 1 August 2004
Revaluation of fixed asset investments
Valuation of Examination Halls transferred from University of London
40
9,500
-
Balance at 31 July 2004
9,540
-
Examination halls belonging to the University of London have been transferred to UCL as part of an agreement
to relocate the School of Slavonic and East European Studies from University of London property.
26
23. OTHER RESERVES
Consolidated
Balance at 1 August 2004
Reclassified as deferred grants (Note 19)
Balance at 31 July 2005
2005
£’000
2004
£’000
2,100
(2,100)
2,100
-
-
2,100
Following a change in accounting treatment in Bloomsbury Bioseed Fund Ltd, £3 million of Government Grants received
for seed funding have been reclassified from other reserves to deferred grants (Note 19). Bloomsbury Bioseed Fund Ltd
is a 70% owned subsidiary, consequently £2.1 million was previously consolidated as other reserves, the remaining
£900k being attributable to minority interests.
24. CAPITAL COMMITMENTS
Consolidated and UCL
Commitments contracted at 31 July
Authorised but not contracted at 31 July
2005
£’000
2004
£’000
93,859
25,696
71,633
48,186
119,555
119,819
2005
£’000
Restated
2004
£’000
25. RECONCILIATION OF CONSOLIDATED OPERATING SURPLUS
TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Operating (deficit)/surplus before tax
Items not involving cash movements:
Depreciation
Deferred capital grants released to income
Impairment of fixed asset investments
Increase in stocks
(Increase)/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
(3,216)
3,890
27,924
(17,087)
57
(187)
(16,365)
16,227
(175)
26,544
(15,901)
405
(177)
5,259
5,639
(175)
(3,970)
7,867
(2,936)
(2,880)
7,811
(2,953)
8,139
27,462
27
Notes to the Accounts
26. ANALYSIS OF CHANGES IN NET DEBT
1 August
2004
£’000
Cash at bank and in hand
Endowment assets (Note 14)
Deposits repayable on demand
Overdrafts (Note 16)
Deposits repayable at short notice
Debt due within one year (Note 16)
Cash
Flows
£’000
Other
Changes
£’000
13,975
7,668
(3,599)
18,044
39,119
6,559
(4,176)
41,502
23
23
40,709
(9,455)
-
31 July
2005
£’000
53,094
14,250
(7,775)
59,569
31,254
(239)
239
(295)
(295)
(83,278)
7,017
(9,572)
(85,833)
(24,764)
39,303
(9,844)
4,695
2005
£’000
2004
£’000
Increase in cash in the period
Cash brought forward in previously unconsolidated subsidiary
(Decrease)/increase in deposits repayable at short notice
Increase in debt
41,502
23
(9,455)
(2,611)
2,711
22,756
(276)
Change in net debt
29,459
25,191
Net debt at 1 August
(24,764)
(49,955)
Net debt at 31 July
4,695
(24,764)
2005
£’000
2004
£’000
2,936
3,596
(7,467)
2,953
2,484
(7,260)
(935)
(1,823)
Debt due after one year (Note 17)
27. RECONCILIATION OF NET CASH FLOW TO
MOVEMENT IN NET DEBT
28. RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Income from endowments
Other interest received
Interest paid
Net cash outflow from returns on investments and servicing of finance
28
29. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
2005
£’000
Purchase of tangible fixed assets
Purchase of fixed asset investments
Net purchase of endowment asset investments
Total payments to acquire fixed and endowment assets
Restated
2004
£’000
(72,779)
(2,269)
(75,048)
(68,306)
(142)
(280)
(68,728)
Proceeds from disposal of operations
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
Endowments received
6,270
36,186
55,512
2,082
298
4,054
63,244
1,269
Net cash inflow from capital expenditure and financial investment
25,002
137
2005
£’000
2004
£’000
30. FINANCING
Mortgage and Loan Capital repayments
(239)
(203)
Net cash outflow from financing
(239)
(203)
31. HARDSHIP AND ACCESS BURSARY FUNDS
Consolidated and UCL
2005
£’000
Balance at 1 August
Funding Council grants
Interest earned
Disbursed to students
Balance at 31 July
(8)
701
12
705
(526)
179
2004
£’000
74
561
12
647
(655)
(8)
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.
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
2005
£’000
2004
£’000
21,473
3,244
4,855
723
9
20,419
3,189
3,089
649
28
30,304
27,374
29
Notes to the Accounts
The three principal pension schemes for UCL’s staff are the Universities Superannuation Scheme (USS), the Superannuation
Arrangements of the University of London (SAUL) and the National Health Service Pension Scheme. Assets of each scheme
are held in separate trustee administered funds. It is not possible to identify UCL’s share of the underlying assets and liabilities
of these schemes 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 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.
Universities Superannuation Scheme (USS)
The latest actuarial valuation of the scheme was at 31 March 2002 using the projected unit method. The assumption and other
data which have the most significant effect on the determination of the contribution levels are as follows:
Past Service
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
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 assumption and other
data which have the most significant effect on the determination of the contribution levels are as follows:
Past Service
Investment returns per annum
Salary scale increases per annum *1
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
6.0%
5.0%
4.2%
Future Service
7.0%
5.0%
4.2%
£941million
121.0%
10.5%*2
*1 excludes an allowance for promotional increases
*2 from 1 August 2006 this will increase to 13%
National Health Service Pension Scheme
The NHS Pension Scheme is an unfunded defined benefit scheme available to staff who immediately prior to appointment at
UCL were members of this scheme.
The last valuation of the scheme took place as at 31 March 1999. Between valuations, the Government Actuary provides an
update of the scheme liabilities on an annual basis. On advice from the actuary 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.
30
Federated Pension Scheme (FPS) and the Royal Free Hospital School of Medicine (RFHSM) Pension and
Assurance Scheme
The Federated Pension Scheme (FPS) for non academic staff of Middlesex Hospital Medical School which since merger with
UCL on 1 August 1987 has become closed to new entrants. This scheme is a defined benefit scheme.
The Royal Free Hospital School of Medicine (RFHSM) Pension and Assurance Scheme, operated for non academic staff at the
Royal Free Hospital School of Medicine. On merger with UCL on 1 August 1998 this scheme has been closed to all new
entrants. This scheme is a defined benefit scheme.
As a consequence of both FPS and the RFHSM Pension & Assurance Scheme being closed to new entrants, it is likely that the
current service cost will increase as the members approach retirement.
The last triennial valuation of the FPS was undertaken on 31 March 2002 and for the Royal Free Hospital School of Medicine
Pension and Assurance Scheme on 1 August 2003. For the purposes of reporting under FRS17 a valuation of both schemes
was undertaken on 31 July 2005, and details are given below.
FPS (1645)
Valuation method
Valuation date (31 July)
Inflation assumption
Increase for pensions
Increase for deferred pensions
Investment return
Salary scale increase per annum
Discount rate for liabilities
Projected over-funding
Funding level
Present value of liabilities
Fair value of the scheme assets
Current Employers contribution rate
Projected Unit
2005
2004
2003
2002
2.70%
2.70%
3.00%
5.99%
4.00%
5.00%
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%
£5.6 million
£5.2 million
£4.7 million
£2.7 million
130.00%
131.00%
128.00%
116.90%
£18.6 million
£24.2 million
£16.5 million
£21.7 million
£16.9 million
£21.6million
£15.9 million
£18.6 million
-
-
nil
-
RFHSM Pension & Assurance Scheme
Valuation method
Valuation date (31 July)
Inflation assumption
Increase for pensions
Increase for deferred pensions
Investment return
Salary scale increase per annum
Discount rate for liabilities
Projected under-funding
Funding level
Present value of liabilities
Fair value of the scheme assets
Current Employers contribution rate
Projected Unit
2005
2004
2003
2002
2.70%
2.70%
2.70%
6.90%
2.70%
5.10%
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%
£(4.1) million
£(4.5) million
£(6.3) million
£(5.1) million
68.00%
60.20%
50.00%
51.90%
£13.0 million
£8.9 million
£11.3 million
£6.8 million
£12.6 million
£6.3 million
£10.6 million
£5.5 million
48.7
-
-
-
31
Notes to the Accounts
Disclosure of fair values of assets and expected rates of return
FPS (1645)
Expected
rate of return
2005
Fair Value
2005
Deposit Admin contract
Equities
Annuities
Bonds
Cash
Equities
Annuities
Bonds
Cash
Fair Value
2004
7.50%
5.75%
5.50%
3.50%
Total
RFHSM Pension and
Assurance Scheme
Expected
rate of return
2004
10,405
6,928
6,586
245
7.50%
4.20%
2.50%
Total
Fair value
2003
7.50%
5.75%
5.50%
3.50%
24,164
Expected
rate of return
2005
Expected
rate of return
2003
9,060
6,716
5,729
196
7.00%
5.25%
5.00%
3.00%
21,701
8,714
7,117
5,502
259
Fair value
2002
6.50%
11,568
5.50%
-
6,979
-
21,592
Fair Value
2005
Expected
rate of return
2004
Fair Value
2004
Expected
rate of return
2003
Fair value
2003
7,170
1,747
-
7.90%
4.90%
2.90%
5,425
1,374
-
7.40%
4.50%
2.40%
5,075
1,205
-
8,917
Expected
rate of return
2002
6,799
6,280
18,547
Expected
rate of return
2002
7.30%
4.70%
2.30%
Fair value
2002
4,352
1,101
66
5,519
Under the transitional arrangements of FRS17 the effect of the standard is included by note only. The effects on the financial
statements, when FRS17 is fully adopted, will be as follows:
Amounts included within operating profit
FPS (1645)
Current service cost
Past service costs
(Gains)/losses on any settlements and curtailments
Total Operating Charge
2005
£’000
2004
£’000
2003
£’000
2002
£’000
261
261
272
272
272
272
177
500
677
RFHSM Pension & Assurance Scheme
2005
£’000
Current service cost
Past service costs
(Gains)/losses on any settlements and curtailments
Total Operating Charge
411
411
2004
£’000
2003
£’000
2002
£’000
509
138
647
355
355
459
459
Amounts to be included on other finance costs
FPS (1645)
Expected return on scheme assets
(Discount) on scheme liabilities
Net finance return
2005
£’000
2004
£’000
2003
£’000
2002
£’000
1,387
(951)
436
1,267
(885)
382
1,136
(873)
263
1,248
(672)
576
RFHSM Pension & Assurance Scheme
2005
£’000
Expected return on scheme assets
(Discount) on scheme liabilities
Net finance charge
32
518
(661)
(143)
2004
£’000
424
(686)
(262)
2003
£’000
2002
£’000
382
(642)
(260)
472
(605)
(133)
Amounts to be included in the statement of Total Recognised Gains and Losses (STRGL)
FPS (1645)
2005
£’000
% asset or
liability
value
2004
£’000
% asset or
liability
value
2003
£’000
% asset or
liability
value
2002
£’000
% asset or
liability
value
Difference between
1,787
actual and expected
return of scheme assets
Experience gains/(losses)
646
arising on scheme
liabilities
Effects of changes in
(2,167)
assumptions underlying
the present value of
scheme liabilities
(7% on
assets)
(799)
(-4% on
assets)
2,166
(10% on
assets)
(1,063)
(5.7% on
assets)
(3% on
liabilities)
406
(2% on
liabilities)
508
(3% on
liabilities)
(658)
(4.1% on
liabilities)
Total actual gains and
(losses) recognised
in the STRGL
RFHSM Pension and
Assurance Scheme
(612)
(2,984)
266
(1% on
liabilities)
329
(2% on
liabilities)
2,062
(12% on
liabilities)
(4,705)
(29.6% on
liabilities)
2005
£’000
% asset or
liability
value
2004
£’000
% asset or
liability
value
2003
£’000
% asset or
liability
value
2002
£’000
% asset or
liability
value
(11% on
assets)
184
(3% on
assets)
2,166
(0% on
assets)
(1,755)
(31.8% on
assets)
863
(8% on
liabilities)
518
(4% on
liabilities)
(538)
(5.1% on
liabilities)
Difference between
1,002
actual and expected
return of scheme assets
Experience gains/(losses)
arising on scheme
liabilities
Effects of changes in
(2,167)
assumptions underlying
the present value of
scheme liabilities
Total actual gains and
(losses) recognised
in the STRGL
722
188
-
722
(1% on
liabilities)
2,099
(612)
(19% on
liabilities)
(1,123)
(2,984)
(9% on
liabilities)
(1,394)
(13.1% on
liabilities)
33
Notes to the Accounts
Movements in surplus during the year
FPS (1645)
Surplus in scheme at beginning of the year
Movement in year:
Current service cost
Contributions
Past service costs
Curtailment costs
Other finance income
Actuarial gain/(loss)
Surplus in scheme at end of the year
2005
£’000
2004
£’000
2003
£’000
2002
£’000
5,167
4,728
2,675
7,481
(272)
263
2,062
(177)
(500)
576
(4,705)
4,728
2,675
(261)
436
266
5,608
(272)
382
329
5,167
RFHSM Pension & Assurance Scheme
Deficit in scheme at beginning of the year
Movement in year:
Current service cost
Contributions
Past service costs
Curtailment costs
Other finance cost
Actuarial gain/(loss)
Deficit in scheme at end of the year
2005
£’000
2004
£’000
2003
£’000
2002
£’000
(4,463)
(6,302)
(5,092)
(3,619)
(411)
723
(143)
188
(509)
649
(138)
(262)
2,099
(355)
528
(260)
(1,123)
(459)
514
(133)
(1,395)
(4,106)
(4,463)
(6,302)
(5,092)
2005
£’000
Restated
2004
£’000
Net assets
Net pension asset
Net assets including FRS17 disclosure
491,886
1,502
493,388
429,092
704
429,796
Reserves
Net pension asset
111,658
1,502
100,392
704
Reserves including FRS 17 disclosure
113,160
101,096
Balance sheet presentation
34
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 (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 shortfall in any one year, members are liable for
their pro rata share, by way of a supplementary contribution. 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) £550 million aggregate layer of ‘excess’ cover obtained through the Bermudan and Lloyds insurance market
(structured as £275 million for any one loss or in the aggregate, followed by a further loss of £275 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; and in the event of any member being unable, due to insolvency, to
meet any such call, the Board is likely to call for further Supplementary Contributions from the remaining Members.
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. UCL’s Advance Contributions currently constitute approximately 7% of the total
contributions received by the Association.
35. CONTINGENT ASSET
UCL Bio(3) Limited is due to receive further consideration from the disposal of its business of up to £4.893 million in
March 2007, of which £363,000 is deferred and the balance of £4.53 million is contingent on the level of sales achieved by
the purchaser.
35
Financial Summaries (unaudited)
2005
£’000
2004
£’000
2003
£’000
2002
£’000
2001
£’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
153,201
82,502
167,425
104,908
1,332
6,906
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
Total income
516,274
489,776
458,518
433,444
412,283
EXPENDITURE
Staff costs
Other operating expenses
Interest payable
Depreciation
325,512
158,187
7,867
27,924
305,010
146,521
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
Total expenditure
519,490
485,886
457,456
432,762
415,100
3,890
1,062
682
(2,817)
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 associates
(3,216)
(226)
(122)
(144)
30
(54)
(61)
(202)
-
-
Profit on disposal of operations
Profit/(loss) on disposal of fixed asset investments
(Loss)/profit on disposal of tangible fixed assets
7,732
(392)
55
4,054
(56)
1,164
478
1,493
2,206
SURPLUS FOR THE YEAR AFTER
DISPOSAL OF FIXED ASSETS BUT BEFORE TAX
3,776
7,885
2,055
958
882
Taxation credit/(charge)
Share of taxation in associates
80
1
(106)
(1)
(17)
(6)
(10)
-
(2)
-
Minority interest
68
489
41
48
13
3,925
8,267
2,073
996
893
-
-
996
893
SURPLUS FOR THE YEAR AFTER
DISPOSAL OF FIXED ASSETS AND TAX
Transfer from/(to) accumulated income within
specific endowments
SURPLUS FOR THE YEAR
36
424
4,349
(585)
7,682
(589)
1,484
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