london’s global university
financial
statements 2007
0506 Annual Report Coverfinal.indd 1
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Mission 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.
▲ ▲ ▲
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
•
•
•
▲ ▲
We are committed
•
to the pursuit of excellence and sustainability;
•
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.
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CONTENTS
PAGE
1
2
3
5
7
8
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
9
11
12
13
14
15
16-36
37
Statement of Principal Accounting Policies
Consolidated Income and Expenditure Account
Statement of Total Recognised Gains and Losses
Consolidated Balance Sheet
UCL Balance Sheet
Consolidated Cash Flow Statement
Notes to the Accounts
Financial Summaries (Unaudited)
COMMITTEE MEMBERSHIP
Council 2006–07
Finance Committee 2006–07
Lay Members:
Lord Woolf of Barnes*◆ (Chair)
Sir John Birch*◆ (Vice-Chair)
Ms Anne Bulford◆ (Treasurer)
Lord Hart of Chilton
Mr Victor Chu
Mr Rob Holden
Mr Mark Knight◆
Ms Vivienne Parry*
Ms Janet Salmon
Sir Stephen Wall*
Lay Members:
Ms Anne Bulford (Chair)
Sir John Birch
Mr Nigel Buchanan
Mr David Dutton
Mr Robin Fox
Mr Derek Thomas
Lord Woolf of Barnes
Academic Members:
Professor Malcolm Grant*◆ (President and Provost)
Professor Richard Catlow
Professor Mary Fulbrook*
Professor Katherine Homewood
Dr Mark Lancaster*
Dr Benet Salway
Dr Andrea Townsend-Nicholson
UCL Union:
Mr Nick Barnard
Ms Zoe Davies
Investments Committee 2006–07
Lay Members:
Ms Anne Bulford (Chair)
Mr Nigel Buchanan
Mr David Dutton
Mr Robin Fox
Mr Nigel Thomas
Academic Members:
Professor Malcolm Grant (President and Provost)
Dr Peter Brett
Professor David Bogle
Professor Hazel Genn
Dr Andrea Townsend-Nicholson
Dr Mark Williams (resigned January 2007)
Vice-Provosts:
Professor David Delpy
Professor Richard Frackowiak
Miss Marilyn Gallyer
Professor Michael Spyer
Professor Michael Worton
UCL Union:
Ms Eleanor Fletcher
Audit Committee 2006–07
Lay Members:
Mr Mark Knight (Chair)
Sir John Birch
Mr John Hustler
Mr Nigel Smith
◆
denotes also member of Remuneration Committee
* denotes also member of Nominations Committee
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FINANCIAL HIGHLIGHTS
CONSOLIDATED INCOME & EXPENDITURE ACCOUNT
2007
£m
2006
£m
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
178.6
97.8
201.7
110.0
9.0
167.0
86.3
184.1
115.1
0.9
7.0
28.6
TOTAL INCOME
597.1
560.4
6.5
TOTAL EXPENDITURE
590.0
554.0
6.5
Share of operating loss in joint ventures and associates
Loss on disposal of tangible fixed assets
Profit on disposal of fixed asset investments
Taxation
Minority interest
Transfer (to)/from accumulated income within specific endowments
Change
%
6.9
13.3
9.6
(4.4)
(0.7)
(0.2)
0.3
(0.2)
0.1
(0.8)
(0.5)
(0.1)
0.6
5.6
6.4
Fixed assets
Endowment asset investments
Net current assets
503.6
105.1
42.5
480.1
97.1
43.3
4.9
8.2
(1.8)
Total assets less current liabilities
651.2
620.5
4.9
Non-current liabilities and provisions
Minority interest
Pension assets/(liabilities)
(82.9)
0.7
1.2
(83.3)
0.6
(0.4)
(0.5)
TOTAL NET ASSETS
570.2
537.4
6.1
338.5
105.1
126.6
321.2
97.1
119.1
5.4
8.2
6.3
570.2
537.4
6.1
SURPLUS FOR THE YEAR
CONSOLIDATED BALANCE SHEET
Represented by:
Deferred grants
Endowments
Reserves
OTHER KEY STATISTICS
Consolidated recognised gains
Consolidated increase/(decrease) in cash flow
Student numbers
Average payroll numbers
2
15.5
13.0
11.7
(3.5)
2007
No.
2006
No.
19,365
8,904
19,299
8,929
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TREASURER’S REPORT
Scope of Financial Statements
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.
full-time study (capped under statute at £1,175 in 2005/06)
subject to agreement of a suitable access strategy with OFFA
(the Office of Fair Access). Under this scheme, UCL
generated additional fee income of £3.9 million of which one
third was committed to expenditure under bursary schemes
and other initiatives to enhance the students’ experience.
Investment Performance
The financial statements include the consolidated results of
UCL’s subsidiary companies, details of which are shown at
Note 12 and whose commercial activities are, for legal and
taxation reasons, more appropriately channelled through
limited companies.
World stock markets continued to present a degree of
challenge to investors in 2006/07 with a sharp downward
re-alignment in February followed by recovery and have now
entered a period of uncertainty brought on by the sub-prime
lending crisis in the USA.
Results for the year
UCL consolidated Income and Expenditure results for the
year ended 31 July 2007 are summarised as follows:
Income
Expenditure
Share of losses in joint venture
and associated companies
Profit/(loss) on disposal of assets
Taxation and minority interest
Transfer (to)/from endowments
Surplus for the year
2007
£m
2006
£m
597.1
(590.0)
560.4
(554.0)
(0.7)
0.1
(0.1)
(0.8)
5.6
(0.5)
(0.1)
0.6
6.4
Against this backdrop, the value of endowment asset
investments increased to £105 million, compared to £97 million
the year before, of which £5 million was represented by the
appreciation of the underlying investments.
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.
In 2006/07 returns across the portfolio were good, with income
significantly above the target set by the Investments
Committee for the year (£4.413 million actual against £3.210
million target) and slightly ahead of external benchmarks.
Cash Flow
The reported surplus of £5.6 million has been achieved against
a back-drop of significant resourcing constraint, continuing the
challenge of maintaining UCL as a vibrant, globally competitive
and research intensive university. In particular, the challenge
of generating sufficient funds to invest in the maintenance of
UCL’s extensive estate remains a key issue. Expenditure has
been kept in line with available funding through the setting of
strict targets via the Resource Allocation Model (RAM).
UCL’s cash balances remained healthy throughout the year,
closing at £69 million, £16 million held as cash at bank and in
hand and £53 million as short-term investments (2006: total
cash balances £51 million with £14 million held as cash at
bank and in hand and £37 million as short-term investments).
This level of cash balances has arisen, to some extent, from
the long-term underinvestment in the maintenance of the
estate and the timing of capital expenditure commitments.
The financial highlights, as detailed on page 2 include: total
income increasing 7% to £597 million; an increase of £11
million in Academic Fees and Support Grants to £98 million;
and an £18 million increase in Research Grants & Contract
Income to £202 million. The majority of UCL’s sponsored
research income is derived from two prominent sources, with
income from UK charities and Office of Science and
Technology (OST) Research Councils, representing 37%
and 35% respectively, of total research income.
During the year, the loan facility with Royal Bank of Scotland
was re-negotiated and the unused element (£25 million)
cancelled. An improved cost of borrowing was achieved and
the interest rate fixed at 5.69% until August 2021. Total
borrowing under this arrangement remained at £25 million.
UCL’s cash position is monitored daily and surplus funds placed on
deposit, to achieve optimum returns to UCL from its cash balances.
Capital Projects
The balance sheet reflects continuing investment in
infrastructure, with tangible fixed asset additions totalling £58
million. This now brings fixed asset additions to £402 million
in the last six years.
It should be noted that this is the first year in which universities
in England have been allowed to charge the new variable
tuition fee of up to £3,000 to new Home/EU undergraduates in
Total additions to land and buildings in the year amounted
to £58 million, of which £29 million related to freehold
academic properties, £7 million to leasehold property and
£22 million to equipment.
Major projects progressed during the year included completion
of the UCL Cancer Institute (the Paul O’Gorman Building) on
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TREASURER’S REPORT (continued)
Huntley Street, the refurbishment of Foster Court and other
buildings on the east side of Malet Place, commencement of
the new wing of the Roberts Engineering Building, fronting
onto Torrington Place, continuation of the redevelopment of the
Institute of Child Health, the building of new laboratories at the
Mullard Space Science Laboratory and refurbishment of the
historic quadrangle in Gower Street.
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
In the course of the year, UCL has further developed the
partnership with its trade unions which so effectively enabled
the modernisation of its pay and grading structures. Joint
working on the improvement of redeployment arrangements
and creation of a new framework for change management
have provided a sound base on which UCL’s White Paper
agenda can be carried forward.
With an international reputation, and a workforce and student
population drawn from around the world, UCL places great
store on equality of opportunity and the celebration of diversity.
Staff from across UCL have participated in the creation of a
Gender Equality Scheme which gave UCL the opportunity to
review its policies and practices and ensure that any perceived
barriers to the recruitment or progression of women (or men)
were addressed. Initiatives benefiting academic staff and those
in support roles have produced an exciting action plan for the
coming few years. Workforce equality monitoring for the year
shows that UCL has again made positive strides towards
increasing the number of black and minority ethnic staff in
support roles with the aim of mirroring the profile of the
population of the Greater London Area by 2010. A target for
gradually increasing the number of women in senior roles is
also now in place.
In the run up to the Research Assessment Exercise over the
last year, UCL has welcomed many new colleagues attracted
by our groundbreaking research agenda and the lure of
tackling problems of global significance. UCL is truly a
community of ‘global citizens’ and all are welcomed most warmly.
responsibilities from the centre to faculty level supported by
investment in staff and facilities.
The review of faculty structures has continued throughout the
year. The specialist Post Graduate Institutes and former
Faculty of Clinical Sciences were combined to create the
Faculty of Biomedical Sciences and the review of the Faculty
of Life Sciences was completed. The new structures have
re-positioned this vitally important area of UCL’s work to
respond effectively to changes in the organisation and
demands of its collaborative partners and customer base,
including the NHS, Department of Health and Research
Councils. During the year, several important collaborative
arrangements with NHS Trusts were explored and progressed
to ensure UCL is well placed to benefit from the new funding
arrangements for medical research when these are finally
confirmed and implemented.
Sustainability has also been high on the agenda with
development of a waste disposal strategy and carbon
management programme both reviewed by the Estates
Management Committee at their meeting in September 2007.
The external environment in which we operate remains
challenging – although the introduction of variable tuition fees
was successfully negotiated without detrimental effect to UCL’s
student recruitment. The institution has continued to attract
applications several times higher than the number of places
available, assisted by a bursary scheme that is one of the most
generous in the English Higher Education sector. The greatest
area of challenge is now the future of research funding. The
Research Assessment Exercise, with a census date of October
2007, is due to report in 2008, settling the shape of funding
until 2012.
The implementation of improvements to administrative support
systems and procedures was strongly reinforced by the
introduction of the new Student Records and Fees system,
Portico, which went live in August 2006. The system was
delivered on time and on budget and has enabled significant
modernisation of the way student records are managed from
the point of application through to graduation and beyond.
Major improvements to the management, payment and
reporting of student tuition fees has been possible with the
introduction of online payment and the facility for students to
review their accounts through the UCL website.
Throughout the year, work has continued to determine UCL’s
future course and strategy, to ensure the continued delivery
and development of world-class teaching and research within
a sustainable financial environment.
During the year a project was launched to review UCL’s
financial reporting and production of financial management
information. This project is on-going and expected to deliver
significant improvements in the quality and relevance of
financial information delivered on a regular basis to all
stakeholders in UCL’s system of financial management.
The Council’s White Paper ‘Modernising UCL’, addressing the
next five years of UCL’s development was published in June
2007. The focus is wholly on strengthening UCL’s world-class
academic excellence in a financially disciplined way. Themes
include modernisation of administrative structures and
information systems, and devolution of certain management
UCL has continued to produce outstanding research of an
internationally recognised standard of excellence, despite
continuing uncertainty around the future of funding streams.
2006/07 was a successful year with an outstanding crop of
awards and research grants. Financially, this is the first year
in which a substantial contribution has been received from the
Other Major Activity
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OST Research Councils under Full Economic Costing (FEC).
Overheads of around £17 million were received from the OST
Research Councils compared to about £12 million last year,
in addition to the £5.6 million lump sum payment under the
transitional funding arrangements. However, it was
disappointing that there was not a further lump sum payment
and that substantial funds allocated to the Research Councils
to support FEC were clawed back by the DTI. The international
reputation of UCL is confirmed by the increasing funding of
research from sponsors outside the UK – up 35% in 2006/07
compared with an overall increase in research income of circa
8%.
Conclusion
Once again, it is encouraging that UCL has been able to
record a surplus position for the year – this reflects the
substantial efforts made by staff across the whole of UCL
towards achieving challenging targets on the operating budget.
However, the underlying position continues to demand further
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.
Anne Bulford
Treasurer
CORPORATE GOVERNACE
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 and revised in July 2003
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 2007 meeting, the Council carried out an
annual assessment for the year ended 31 July 2007 by
considering a report from the Audit Committee, and taking
account of events since 31 July 2007. The Council is of the
view that there is an ongoing process for identifying, evaluating
and managing the Group’s key risks and internal controls,
and that it has been in place for the whole of the year ended
31 July 2007, 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
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CORPORATE GOVERNANCE (continued)
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.
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 was 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
6
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.
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RESPONSIBILITIES OF THE COUNCIL
OF UNIVERSITY COLLEGE LONDON
In accordance with UCL’s Charter and Statutes, the Council is
responsible for the administration and management of the
affairs of UCL, including ensuring an effective system of
internal control, and is required to present audited financial
statements for each financial year.
The Council is responsible for the keeping of proper
accounting records which disclose with reasonable accuracy at
any time the financial position of UCL and for ensuring that the
financial statements are prepared in accordance with UCL’s
Charter and Statutes, the Statement of Recommended
Practice: Accounting for Further and Higher Education and
other relevant accounting standards. In addition, within the
terms and conditions of the Financial Memorandum agreed
between the Higher Education Funding Council for England
and the Council of UCL, the Council, through the Provost, its
designated office holder, is required to prepare financial
statements for each financial year which give a true and fair
view of the state of affairs of UCL and of the surplus or deficit
and cash flows for that year.
In causing the financial statements to be prepared, the Council
has ensured that:
(i)
suitable accounting policies are selected and applied
consistently;
(ii)
judgments and estimates are made that are reasonable
and prudent;
(iii) safeguard the assets of UCL and prevent and
detect fraud;
(iv) secure the economical, efficient and effective
management of UCL’s resources and expenditure.
The key elements of UCL’s system of internal control, which is
designed to discharge the responsibilities set out above,
include the following:
(i)
clear definitions of the responsibilities of, and authority
delegated to, heads of academic and administrative
departments;
(ii)
comprehensive Financial Regulations, detailing
financial controls and procedures, approved by
the Council;
(iii) a professional Internal Audit Service whose annual
programme of work is approved by Audit Committee,
endorsed by the Council, and whose head provides the
Provost, Audit Committee and Council with a report on
internal audit activity within UCL and an opinion on the
adequacy and effectiveness of UCL’s system of internal
control, including internal financial control;
(iv) regular reviews of financial performance and key
business risks, and termly reviews of financial
forecasts including variance reporting and updating;
(iii) applicable accounting standards have been followed;
(v)
(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)
(ii)
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;
ensure that there are appropriate financial and
management controls in place to safeguard public
funds and funds from other sources;
a comprehensive planning process for the short term to
medium term supported by detailed income,
expenditure, capital and cash flow budgets and
forecasts, including review and refresh of strategic
objectives, the key risks affecting their achievement
and key performance indicators of progress;
(vi) embedded risk management policies and procedures
incorporating identification, monitoring and review of
internal controls moderating and mitigating key risks,
covering all categories of risk at all levels of the
organisation;
(vii) clearly defined procedures for the approval and control
of expenditure, with investment decisions involving
capital or recurrent expenditure being subject to formal
detailed review according to levels set by the Council.
Any system of internal control can only provide reasonable,
and not absolute, assurance against material mis-statement
or loss.
7
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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
THE COUNCIL OF UNIVERSITY COLLEGE LONDON
We have audited the financial statements of University College
London for the year ended 31 July 2007 which comprise the
statement of principal accounting policies, the consolidated
income and expenditure account, the consolidated statement
of total recognised gains and losses, the consolidated and
entity balance sheets, the consolidated cash flow statement,
and the related notes 1 to 32. 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 July 2006. 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 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 UCL’s statute, the
Statement of Recommended Practice on Accounting for
Further and Higher Education and other applicable United
Kingdom law and accounting standards (United Kingdom
Generally Accepted Accounting Practice).
Our responsibility is to audit the financial statements in
accordance with relevant United Kingdom legal and regulatory
requirements and International Standards on Auditing (UK and
Ireland).
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 University College London 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 if, in our opinion, the Treasurer’s report is not
consistent with the financial statements, if the Group 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
8
statements on internal control cover all the 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 mis-statements or material inconsistencies with the
financial statements.
Basis of opinion
We conducted our audit in accordance with International
Standards on Auditing 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 Board of Governors in the preparation of the financial
statements and of whether the accounting policies are
appropriate to the Group’s circumstances, 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 mis-statement, 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 the University and the Group as at 31
July 2007 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;
(b) in all material respects income from Higher Education
Funding Council for England grants and income for
specific purposes and from other restricted funds
administered by the University have been applied only 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 July 2006, with
the Higher Education Funding Council for England.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
St. Albans
United Kingdom
5 December 2007
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STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
The Principal Accounting Policies have not changed from the
previous published Financial Statements.
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.
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
For defined benefit schemes the amounts charged to operating
surplus are the current service costs and gains and losses on
settlements and curtailments. They are included as part of staff
costs. Past service costs are recognised immediately in the
income and expenditure account if the benefits have vested in
the scheme membership. If the benefits have not vested
immediately, the costs are recognised over the period until
vesting occurs. The interest cost and the expected return on
assets are shown as a net amount of other finance costs or
credits adjacent to interest. Actuarial gains and losses are
recognised immediately in the statement of total recognised
gains and losses.
Defined benefit schemes are funded, with the assets of the
scheme held separately from those of the group, in separate
trustee administered funds. Pension scheme assets are
measured at fair value and liabilities are measured on an
actuarial basis using the projected unit method and discounted
at a rate equivalent to the current rate of return on a high
quality corporate bond of equivalent currency and term to the
scheme liabilities. The actuarial valuations are obtained at
least triennially and are updated at each balance sheet date.
The resulting defined benefit asset or liability, net of the related
deferred tax, is presented separately after other net assets on
the face of the balance sheet.
5. Accounting for Research and Development
Expenditure on pure and applied research is expensed, and
is treated as part of the continuing activities of the Institution.
Expenditure on development activities is carried forward and
amortised over the period expected to benefit, where the
conditions of SSAP 13 are met.
6. Foreign Currencies
Transactions denominated in foreign currencies are recorded
at the rate of exchange ruling at the dates of the transactions.
Monetary assets and liabilities denominated in foreign
currencies are translated into sterling at year end rates unless
such funds are held for onward transmission to a research
partner under an agency agreement. The resulting exchange
differences are dealt with in the determination of income and
expenditure for the financial year.
7. Taxation
UCL enjoys charitable status and is therefore potentially
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, to the extent that they are applied for its
charitable purposes.
Subsidiary companies are liable to corporation tax.
UCL is partially exempt for the purposes of Value Added Tax
and is only able to reclaim a minor element of VAT charged on
goods and services bought in.
8. Land and Buildings
Land and Buildings are stated in the Balance Sheet at cost.
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
9
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Page 10
9. Equipment
13. Investments
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.
Endowment Asset Investments are stated at market value in
the Balance Sheet. Subsidiary and associate company
investments are stated at cost less provision for impairment.
Equipment and furniture costing more than £25,000 is
capitalised at cost, and depreciated over its expected useful
life as follows:
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 gross assets
and liabilities is recognised on the Balance Sheet.
Equipment funded by research grants
Other furniture and equipment
Term of grant
5 years
10. Acquisition with the aid of specific grants
Where tangible fixed assets are acquired with the aid of
specific grants, they are capitalised and depreciated as above.
The related grants are credited to a deferred capital grant
account, and are released to the income and expenditure
account over the expected useful economic life of the related
asset on a basis consistent with the depreciation policy.
11. Leased Assets
Finance lease obligations are included within creditors.
Financing amounts are charged to the Income and Expenditure
Account so as to produce a constant periodic charge on the
balance outstanding.
Operating lease costs are charged to the Income and
Expenditure Account in the year in which they are incurred.
12. Patents, licences, rights, trade marks and other
similar rights over assets
Expenditure on patents, licences, 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.
10
14. Stores
Stores are made up of goods for resale, centrally held stores
holdings and major stores held by academic departments and
are stated at the lower of cost or net realisable value.
15. Cash Flows and Liquid Resources
Cash flows comprise increases or decreases in cash. Cash
includes cash in hand and overdrafts.
Liquid resources comprise assets held as a readily disposable
store of value. They include current asset investments and
endowment cash balances.
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Page 11
CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT
YEAR ENDED 31 JULY 2007
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
Note
2007
£’000
2006
£’000
1
2
3
4
178,623
97,795
201,698
110,055
8,965
166,964
86,308
184,136
115,148
915
6,952
597,136
560,423
364,073
183,377
7,469
35,070
347,803
167,451
7,857
30,895
589,989
554,006
7,147
6,417
5
Total Income
(In addition, income of £1,167,000 (2006 - £1,132,000) has been derived from
joint ventures as explained in note 12)
EXPENDITURE
Staff costs
Other operating expenses
Interest payable
Depreciation
6
7
8
9
Total Expenditure
GROUP OPERATING SURPLUS
Share of operating loss in joint ventures
Share of operating loss in associates
12
12
6,474
SURPLUS FOR THE YEAR BEFORE PROFIT/(LOSS)
ON DISPOSAL OF FIXED ASSETS AND BEFORE TAX
Profit on disposal of fixed asset investments
Loss on disposal of tangible fixed assets
10
10
32
12
Minority interest
SURPLUS FOR THE YEAR AFTER DISPOSAL
OF FIXED ASSETS, TAX AND MINORITY INTERESTS
Transfer (to)/from accumulated income within specific endowments
337
(195)
6,616
SURPLUS FOR THE YEAR AFTER PROFIT/(LOSS)
ON DISPOSAL OF FIXED ASSETS BUT BEFORE TAX
AND MINORITY INTERESTS
Taxation charge
Share of taxation in associates
(137)
(536)
18
SURPLUS FOR THE YEAR
(282)
(264)
5,871
(104)
5,767
(245)
(1)
(57)
6
25
45
6,395
5,761
(837)
5,558
613
6,374
The consolidated income and expenditure of the Group relates wholly to continuing activites.
11
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STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Note
Surplus for the year after disposal of fixed assets, tax and minority interests
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 associates
Unrealised surplus on revaluation of fixed assets
Disposal of revalued fixed asset investments
Actuarial gain/(loss) in respect of pension schemes
2007
£’000
2006
£’000
18
18
18
6,395
4,651
2,948
53
5,761
5,199
1,594
1,453
19
20
20
29
133
(50)
1,324
10
(2,308)
15,454
RECONCILIATION TO CLOSING RESERVES AND ENDOWMENTS
Opening reserves and endowments
Total recognised gains and losses for the year (as above)
216,233
15,454
Closing reserves and endowments
231,687
12
11,709
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Page 13
CONSOLIDATED BALANCE SHEET AS AT 31 JULY 2007
FIXED ASSETS
Tangible assets
Investments in joint ventures:
Share of gross assets
Share of gross liabilities
Investments
Note
2007
£’000
2006
£’000
11
492,402
469,399
12
12
12
ENDOWMENT ASSET INVESTMENTS
13
CURRENT ASSETS
Stores
Debtors
Current asset investments
Cash at bank and in hand
14
CURRENT LIABILITIES
Creditors: amounts falling due within one year
Share of net liabilities in associate
15
12
NET CURRENT ASSETS
TOTAL ASSETS LESS CURRENT LIABILITIES
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR
16
MINORITY INTEREST
NET ASSETS EXCLUDING PENSIONS ASSET/(LIABILITY)
29
29
PENSIONS ASSET
PENSIONS LIABILITY
NET ASSETS
TOTAL
503,639
480,096
105,084
97,119
1,702
106,054
52,565
16,437
1,648
120,659
36,874
14,066
176,758
173,247
(133,921)
(354)
(129,703)
(232)
42,483
43,312
651,206
620,527
(82,882)
(83,315)
656
639
568,980
537,851
5,940
(4,712)
5,435
(5,861)
537,425
338,521
321,192
105,084
-
96,765
354
18
105,084
97,119
19
20
117,103
9,500
109,564
9,550
126,603
119,114
570,208
537,425
ENDOWMENTS
Specific
General
RESERVES
Income and expenditure account
Revaluation reserve
1,229
(132)
9,600
570,208
17
DEFERRED CAPITAL GRANTS
1,159
(149)
10,227
Approved by Council on 5 December 2007
Anne Bulford
Treasurer
Professor Malcolm Grant
President and Provost
Alison Woodhams
Director of Finance
13
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Page 14
UCL BALANCE SHEET AS AT 31 JULY 2007
FIXED ASSETS
Tangible assets
Investments
Note
2007
£’000
2006
£’000
11
12
490,505
12,002
467,759
11,083
502,507
478,842
105,084
97,119
326
109,534
52,564
10,646
345
120,765
36,873
8,969
173,070
166,952
(129,079)
(123,714)
43,991
43,238
651,582
619,199
(82,882)
(83,315)
568,700
535,884
ENDOWMENT ASSET INVESTMENTS
13
CURRENT ASSETS
Stores
Debtors
Current asset investments
Cash at bank and in hand
14
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
15
NET CURRENT ASSETS
TOTAL ASSETS LESS CURRENT LIABILITIES
CREDITORS: AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR
16
NET ASSETS EXCLUDING PENSIONS ASSET/(LIABILITY)
29
29
PENSIONS ASSET
PENSIONS LIABILITY
NET ASSETS
535,458
335,047
317,682
105,084
-
96,765
354
18
105,084
97,119
19
20
120,297
9,500
111,107
9,550
129,797
120,657
569,928
535,458
ENDOWMENTS
Specific
General
RESERVES
Income and expenditure account
Revaluation reserve
TOTAL
Approved by Council on 5 December 2007
Anne Bulford
Treasurer
14
Professor Malcolm Grant
President and Provost
5,435
(5,861)
569,928
17
DEFERRED CAPITAL GRANTS
5,940
(4,712)
Alison Woodhams
Director of Finance
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Page 15
CONSOLIDATED CASH FLOW STATEMENT
Note
2007
£’000
2006
£’000
Net cash inflow from operating activities
Returns on investments and servicing of finance
Taxation
Capital expenditure and financial investment
Acquisitions and disposals
22
25
32
26
12
46,671
168
(245)
(11,157)
(252)
22,225
(1,396)
(57)
(62,149)
(145)
Cash inflow/(outflow) before use of liquid resources and financing
Management of liquid resources
Financing
23
27
35,185
(22,479)
320
(41,522)
38,287
(295)
Increase/(decrease) in cash in the year
23
13,026
(3,530)
15
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Page 16
NOTES TO THE ACCOUNTS
1. FUNDING COUNCIL GRANTS
HEFCE recurrent grant
- Teaching
- Research
- Other
Deferred capital grants released in year
2007
£’000
2006
£’000
63,846
97,703
5,404
11,670
61,125
92,990
4,469
8,380
178,623
166,964
2007
£’000
2006
£’000
25,694
49,143
6,523
4,915
3,585
7,935
26,408
41,542
4,790
5,341
2,643
5,584
97,795
86,308
2007
£’000
2006
£’000
70,274
74,644
19,771
9,011
12,502
2,307
12,410
779
66,065
73,776
16,598
7,430
9,700
1,445
8,846
276
201,698
184,136
174,702
26,996
159,455
24,681
201,698
184,136
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
Source of income:
OST Research Councils
UK based charities
UK central government, local/health authorities, hospitals
UK industry, commerce and public corporations
EU government bodies
EU other
Other overseas
Other sources
Research income relating to direct expenditure incurred during the year
Contribution towards overhead costs
Income from research grants and contracts includes deferred capital grants released in the year of £9,284,000
(2006 - £7,787,000).
16
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Page 17
4. OTHER OPERATING INCOME
Residences and catering
Other services rendered
Health authorities
Donations and sundry grants
Released from deferred capital grants
Other income
2007
£’000
2006
£’000
19,193
30,559
31,644
10,968
3,240
14,451
17,257
28,804
32,963
15,367
3,609
17,148
110,055
115,148
Income from residences and catering includes deferred capital grants released in the year of £9,000 (2006 - £9,000).
5. ENDOWMENT INCOME AND INTEREST RECEIVABLE
Income from endowment asset investments (Note 18)
Other interest receivable
Net return on pension scheme assets and liabilities (Note 29)
2007
£’000
2006
£’000
4,365
4,216
384
2,789
3,734
429
8,965
6,952
2007
£’000
2006
£’000
302,389
26,559
35,125
289,816
25,869
32,118
364,073
347,803
£
£
268,103
-
240,390
21,739
268,103
262,129
6. INFORMATION REGARDING EMPLOYEES
Staff costs:
Salaries and wages
NI contributions
Other pension costs
Emoluments of the President and Provost:
M Grant
Salary
Pension
The emoluments of the Provost are shown on the same basis as for higher paid staff.
The Provost has opted out of the USS pension scheme with effect from April 2006.
Compensation for loss of office in respect of six higher paid employees totalled £612,000 (2006 - £Nil).
17
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Page 18
NOTES TO THE ACCOUNTS
Remuneration of higher paid staff:
The following sets out the remuneration of all higher paid staff including distinction awards paid to clinical academic staff and
payments relating to consultancy work, both of which are funded from non-HEFCE funds, but excluding employers pensions
contributions:
2007
2006
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
£220,001
£230,001
£240,001
£250,001
£260,001
£280,001
-
£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
£230,000
£240,000
£250,000
£260,000
£270,000
£290,000
120
91
59
59
37
28
19
20
19
15
14
10
9
11
1
2
3
2
1
1
124
79
47
43
21
34
23
29
18
14
11
11
11
5
4
3
4
1
2
1
-
The average number of individuals paid through the payroll during the year was 8,904 (2006 - 8,929).
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
Auditors’ remuneration - audit fees
Other fees paid to auditors
Grants to Students Union and other student bodies
Payments to non contract staff and agencies
Other costs
2007
£’000
Restated
2006
£’000
10,358
16,879
28,022
5,397
12,825
10,930
8,295
8,712
7,628
5,518
5,709
1,684
2,183
7,356
12,319
9,920
130
61
1,936
6,938
20,577
10,743
16,058
25,262
5,008
11,271
9,738
7,040
8,337
5,098
7,869
4,687
1,889
2,009
7,366
11,646
8,099
113
175
1,750
5,770
17,523
183,377
167,451
The 2006 figure for repairs and general maintenance has been reduced by £1,941,000 in respect of cleaning and laundry
costs, which have been reclassified as other costs.
18
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Page 19
8. INTEREST PAYABLE
2007
£’000
2006
£’000
30
3,942
3,497
151
4,199
3,507
7,469
7,857
Interest
Payable Depreciation
£’000
£’000
Total
£’000
Bank loans and other loans wholly repayable within five years
Loans not wholly repayable within five years
Finance leases
9. ANALYSIS OF EXPENDITURE BY ACTIVITY
2007
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
173,191
16,357
105,044
2,490
6,150
32,057
28,784
21,796
9,654
60,374
10,358
40,153
24,057
16,985
1,897
3,850
1,722
4,920
1,706
9,284
1,412
17,208
254
286
199,907
27,717
174,702
16,157
67,361
56,368
47,777
364,073
183,377
7,469
35,070
589,989
The depreciation charge has been funded by:
Deferred capital grants released (Note 17)
General income
24,203
10,867
35,070
2006
Academic departments
Academic services
Research grants and contracts
Residences and catering
Premises
Administration and central services
Other expenses
The depreciation charge has been funded by:
Deferred capital grants released
General income
Staff
Costs
£’000
Other
Operating
Expenses
£’000
169,959
16,113
99,544
2,488
6,261
29,191
24,247
23,229
9,383
52,124
10,743
36,731
20,017
15,224
1,936
3,815
2,106
3,046
1,538
7,787
1,412
16,512
299
301
196,234
27,034
159,455
16,579
63,319
49,507
41,878
347,803
167,451
7,857
30,895
554,006
Interest
Payable Depreciation
£’000
£’000
Total
£’000
19,785
11,110
30,895
19
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Page 20
NOTES TO THE ACCOUNTS
10. PROFIT/LOSS ON DISPOSAL OF FIXED ASSETS
Disposals of equipment during the year resulted in a loss of £195,000.
Disposals of shares held as fixed asset investments, and one investment property, resulted in a profit of £337,000.
(2006 - disposal of capital expenditure relating to refurbishment projects which had subsequently been the subject
of further major development resulted in a loss of £104,000).
11. TANGIBLE ASSETS
UCL
Land and Buildings
Freehold
Leasehold
£’000
£’000
Equipment
£’000
Assets in the
course of
construction
£’000
Total
£’000
Cost
At 1 August 2006
Additions at cost
Transfers
Disposals
383,743
15,424
40,971
-
135,306
5,640
19,891
-
102,938
21,785
(6,549)
59,824
14,894
(60,862)
-
681,811
57,743
(6,549)
At 31 July 2007
440,138
160,837
118,174
13,856
733,005
92,458
15,134
-
39,981
4,985
-
81,613
14,665
(6,336)
-
214,052
34,784
(6,336)
At 31 July 2007
107,592
44,966
89,942
-
242,500
Net Book Value
At 31 July 2007
332,546
115,871
28,232
13,856
490,505
At 1 August 2006
291,285
95,325
21,325
59,824
467,759
Equipment
£’000
Assets in the
course of
construction
£’000
Total
£’000
Depreciation
At 1 August 2006
Charge for year
Disposals
Consolidated
Land and Buildings
Freehold
Leasehold
£’000
£’000
Cost
At 1 August 2006
Additions at cost
Transfers
Disposals
383,779
15,424
40,971
-
136,406
5,640
19,891
-
104,688
22,328
(6,549)
59,824
14,894
(60,862)
-
684,697
58,286
(6,549)
At 31 July 2007
440,174
161,937
120,467
13,856
736,434
92,512
15,135
-
40,244
5,013
-
82,542
14,922
(6,336)
-
215,298
35,070
(6,336)
At 31 July 2007
107,647
45,257
91,128
-
244,032
Net Book Value
At 31 July 2007
332,527
116,680
29,339
13,856
492,402
At 1 August 2006
291,267
96,162
22,146
59,824
469,399
Depreciation
At 1 August 2006
Charge for year
Disposals
The declared value of buildings for insurance purposes (day one basis) as at 1 August 2007 was £1,916 million (2006 - £1,166 million).
The above includes building assets held under finance leases. At 31 July 2007 the net book value of the assets held under
finance leases was £27.2 million (2006 - £27.8 million) with a depreciation charge for the year of £638,000 (2006 - £638,000).
20
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12. INVESTMENTS HELD AS FIXED ASSETS
Joint Ventures
All Joint Venture companies are incorporated in the United Kingdom.
University College London (UCL) holds a 50% share in UCLBS Limited, which is a joint venture company owned equally by 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.
UCL Business PLC (UCLB) holds a 50% share in RMS Innovations (U.K.) Limited, which is a joint venture company owned
equally by UCLB and Sweon Cellontech Limited. The principal activity of the company is the generation of regenerative
therapeutic treatments based on advanced techniques for cellular and tissue engineering.
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
RMS Innovations (U.K.) Ltd
Share of operating loss:
The Centre for Scientific Enterprise Ltd
London Technology Network Ltd
RMS Innovations (U.K.) Ltd
Share of gross assets:
The Centre for Scientific Enterprise Ltd
London Technology Network Ltd
RMS Innovations (U.K.) Ltd
Share of gross liabilities:
The Centre for Scientific Enterprise Ltd
London Technology Network Ltd
RMS Innovations (U.K.) Ltd
Share of reserves:
The Centre for Scientific Enterprise Ltd
London Technology Network Ltd
RMS Innovations (U.K.) Ltd
Purchase of investments in joint ventures:
RMS Innovations (U.K.) Ltd
2007
£’000
264
903
1,167
(169)
66
(34)
(137)
742
386
31
1,159
(52)
(82)
(15)
(149)
2006
£’000
204
928
1,132
(184)
(98)
(282)
913
316
1,229
(54)
(78)
(132)
690
304
16
1,010
859
238
1,097
50
50
-
21
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NOTES TO THE ACCOUNTS
Associates
The UCL Group has interests in the following associate companies which are all incorporated in the United Kingdom:
(a) 47% holding in ordinary ‘A’ shares of 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, synthesising and
developing novel therapeutic drugs.
(b) 33% holding in ordinary ‘B’ shares of Evexar Medical Ltd. The principal activity of the company is to develop and
commercialise medical and surgical devices.
(c) 46% holding in ordinary ‘A’ shares of Canbex Therapeutics Ltd. The principal activity of the company is research and
development on two novel chemical series aimed at cannabinoid receptors. The disease targets are spasticity and pain.
(d) 40.5% holding in Domainex Ltd (20.5% in ordinary shares and 20% in ‘A’ preferred shares. Shares rank pari passu in respect
of voting rights). The principal activity of the company is to exploit its technology platform in the field of protein domain hunting,
gene expression and protein structure analysis.
(e) 34.8% holding in ordinary ‘A’ shares of Multilyte Ltd. The principal activity of the company is the development of a ubiquitous
microanalytical technology (based on the use of microassays) for diagnostic applications in the medical research and other fields.
The Group disposed of its holding in NCE Discovery Ltd during the year.
The investment in associates is disclosed in the financial statements as follows:
Share of operating loss:
Pentraxin Therapeutics Ltd
NCE Discovery Ltd
Evexar Medical Ltd
Canbex Therapeutics Ltd
Domainex Ltd
Multilyte Ltd
Share of taxation:
NCE Discovery Ltd
Multilyte Ltd
Share of net liabilities:
Pentraxin Therapeutics Ltd
NCE Discovery Ltd
Evexar Medical Ltd
Canbex Therapeutics Ltd
Domainex Ltd
Multilyte Ltd
Share of reserves:
Pentraxin Therapeutics Ltd
NCE Discovery Ltd
Evexar Medical Ltd
Canbex Therapeutics Ltd
Domainex Ltd
Multilyte Ltd
Purchase of investments in associates:
Evexar Medical Ltd
Canbex Therapeutics Ltd
Domainex Ltd
22
2007
£’000
(104)
(217)
(61)
(67)
(87)
(536)
(1)
(1)
2006
£’000
(42)
(97)
(65)
(60)
(264)
6
6
(381)
(282)
(121)
269
161
(354)
(277)
25
(45)
65
(232)
(381)
(282)
(121)
269
161
(354)
(277)
25
(45)
65
(232)
202
202
20
125
145
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Other fixed asset investments
UCL
Monies held
on long
term deposits
£’000
Balance at 1 August 2006
Additions
Disposals
Consolidated
Investment in
subsidiaries
£’000
Total
£’000
7,596
628
-
375
350
(51)
3,112
(8)
11,083
978
(59)
8,224
674
3,104
12,002
Other
investments
£’000
Total
£’000
Monies held
on long
term deposits
£’000
Balance at 1 August 2006
Additions
Investment converted to associate
Disposals
Other
investments
£’000
7,596
628
-
2,004
350
(250)
(101)
8,224
2,003
9,600
978
(250)
(101)
10,227
Included in monies held on long term deposits is £8.2 million (2006 - £7.60 million) over which there is a legal charge.
The deposit represents a security fund to meet the obligations under finance leases (Note 16).
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 Business PLC (formally UCL Biomedica PLC)
UCL Bio(3) Ltd (100% sub of Business PLC)
Free Clinical Research (Holdings) Ltd (100% sub of Business PLC)
Free Clinical Enterprises Ltd (100% sub of Business PLC)
UCL Analgesia Centre Ltd (100% sub of Business PLC)
UCL Advanced Diagnostics Ltd (100% sub of Business PLC)
Stanmore Clinical Research Facility Ltd (100% sub of Business PLC)
Nervation Ltd (88% sub of Business PLC)
Nervation Vascular Technologies Ltd (100% sub of Nervation Ltd)
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 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.
Holding company.
Testing of new drugs in the final approval stage.
Conducting clinical trials in the field of analgesia.
Conducting medical and clinical diagnostics.
Conducting clinical studies and trials.
Holding company.
Dormant following disposal of business.
Investment in biotechnology start-ups.
Developing and commercialising medical treatments.
23
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NOTES TO THE ACCOUNTS
13. ENDOWMENT ASSET INVESTMENTS
Consolidated and UCL
Balance at 1 August 2006
Net (disposals)/additions (Note 26)
Net realised gain from sale of investments (Note 18)
Increase/(decrease) in cash balances (Note 23)
Appreciation on valuation (Note 18)
Represented by:
Fixed interest securities
Equities
Cash
Total endowment asset investments
Endowment assets at cost
2007
£’000
2006
£’000
97,119
(3,527)
53
6,788
4,651
89,486
44,888
1,453
(43,907)
5,199
105,084
97,119
16,190
72,919
15,975
14,239
73,693
9,187
105,084
97,119
93,920
89,101
All endowment asset investments are held in trust for specific purposes.
14. DEBTORS
Consolidated
Amounts falling due within one year:
Invoiced debtors
Research grants and contracts
Local health authorities/hospitals
Halls of residence debtors
Advances to members of staff
Inter company debtors
Other debtors and prepayments
Amounts falling due after one year:
Inter company debtors
Loan to associate company
UCL
2007
£’000
2006
£’000
2007
£’000
2006
£’000
9,767
53,491
13,910
384
2,340
24,807
14,295
51,134
14,809
442
1,983
37,696
6,100
53,491
13,910
384
2,340
8,521
23,126
9,801
51,134
14,809
442
1,983
9,023
32,282
1,355
300
1,662
-
1,291
-
106,054
120,659
109,534
120,765
15. 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
24
UCL
2007
£’000
2006
£’000
2007
£’000
2006
£’000
1,278
466
55,602
8,671
23,296
55
44,553
-
304
11,121
47,833
13,092
24,261
45
33,047
-
1,278
55,602
8,249
22,311
55
41,120
464
304
10,923
47,833
12,234
23,480
45
28,550
345
133,921
129,703
129,079
123,714
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16. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
UCL
Consolidated
Obligations under finance leases
Cruciform building - Private Finance Initiative
Long term bank loan
2007
£’000
2006
£’000
2007
£’000
2006
£’000
42,527
16,712
23,643
42,498
16,565
24,252
42,527
16,712
23,643
42,498
16,565
24,252
82,882
83,315
82,882
83,315
55
1,278
-
45
304
2,474
55
1,278
-
45
304
-
141
1,278
54
365
141
1,278
54
365
Analysis of Loan repayments:
In less than one year:
Finance leases
Loans
Other
In more than one year but no more than two years:
Finance leases
Loans
In more than two years but no more than five years:
Finance leases
Loans
In more than five years:
Finance leases
Loans
1,024
4,104
708
1,606
1,024
4,104
708
1,606
41,362
34,973
41,736
38,846
41,362
34,973
41,736
38,846
In less than one year (Note 15)
84,215
(1,333)
86,138
(2,823)
84,215
(1,333)
83,664
(349)
82,882
83,315
82,882
83,315
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 12).
UCL entered into an arrangement with the National Westminster Bank PLC in August 2001 which provided for access to a term
loan facility of up to £50m, with draw down of the loan anticipated within three years. As provided in the agreement, UCL fixed
the interest rate on the £50m facility for a ten year period ending August 2011, at a rate of 5.93%. In May 2007, UCL amended the
agreement with the bank by reducing the loan facility to £24.9m, with a fixed rate of interest of 5.69% for the remaining term of
the loan, until August 2026. The costs associated with breaking the initial fixed term loan facility, consequent upon amending the
agreement, have been wound into the overall borrowing and are being amortised over the remaining term of the loan.
25
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NOTES TO THE ACCOUNTS
17. DEFERRED CAPITAL GRANTS
UCL
Land and Buildings
Freehold
Leasehold
£’000
£’000
Balance at 1 August 2006
Grants received in year
Disposals
234,866
17,398
252,264
Equipment
£’000
Total
£’000
67,166
5,193
72,359
15,650
18,959
(18)
34,591
317,682
41,550
(18)
359,214
(2,606)
(11,767)
(24,167)
242,470
69,753
22,824
335,047
Land and Buildings
Freehold
Leasehold
£’000
£’000
Equipment
£’000
Investments
£’000
Total
£’000
Contribution to depreciation for the year
(9,794)
Balance at 31 July 2007
Consolidated
Balance at 1 August 2006
Grants received in year
Disposals
Contribution to depreciation for the year
Balance at 31 July 2007
234,866
17,398
252,264
68,126
5,193
73,319
15,650
18,959
(18)
34,591
2,550
2,550
321,192
41,550
(18)
362,724
(9,794)
(2,642)
(11,767)
-
(24,203)
242,470
70,677
22,824
2,550
338,521
18. ENDOWMENTS
Consolidated and UCL
Specific
£’000
Balance at 1 August 2006
Transfers to I&E reserve
Additions
Disposals
Appreciation of endowment asset investments
Income for the year (Note 5)
Net realised gain from sale of investments
Expenditure
Balance at 31 July 2007
Representing:
Fellowships scholarships and prize funds
Chairs and lectureships funds
Other funds
26
96,765
(323)
3,151
(50)
4,651
4,365
53
(3,528)
General
£’000
354
(201)
(153)
-
Total
£’000
97,119
(524)
3,151
(203)
4,651
4,365
53
(3,528)
105,084
-
105,084
19,279
15,533
70,272
-
19,279
15,533
70,272
105,084
-
105,084
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19. INCOME AND EXPENDITURE ACCOUNT
Consolidated
2007
£’000
2006
£’000
UCL
2007
£’000
2006
£’000
Balance as at 1 August 2006
Transfer from endowments
Adjustment for previously unconsolidated associates
Surplus for the year
Actuarial gains/(losses)
109,564
524
133
5,558
1,324
105,498
6,374
(2,308)
111,107
524
7,342
1,324
106,320
7,095
(2,308)
Balance at 31 July 2007
117,103
109,564
120,297
111,107
Departmental reserves
Earmarked reserves
Revenue reserves
91,809
66,979
(42,913)
80,545
61,665
(32,220)
91,809
66,979
(39,719)
80,545
61,665
(30,677)
Income and Expenditure account excluding
Pension assets and liabilities
Pension reserve
115,875
1,228
109,990
(426)
119,069
1,228
111,533
(426)
Income and Expenditure account at 31 July 2007
117,103
109,564
120,297
111,107
The Income and Expenditure account is designated as follows:
20. REVALUATION RESERVE
Consolidated and UCL
Balance at 1 August 2006
Revaluation of fixed asset investments
Disposal of revalued fixed asset investments
Balance at 31 July 2007
2007
£’000
2006
£’000
9,550
9,540
(50)
9,500
10
9,550
21. CAPITAL COMMITMENTS
Consolidated and UCL
Commitments contracted at 31 July
Authorised but not contracted at 31 July
2007
£’000
2006
£’000
75,870
24,223
24,934
76,598
100,093
101,532
27
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NOTES TO THE ACCOUNTS
22. RECONCILIATION OF CONSOLIDATED OPERATING SURPLUS
TO NET CASH INFLOW FROM OPERATING ACTIVITIES
2007
£’000
2006
£’000
7,147
6,417
35,070
(24,203)
(54)
15,842
14,311
54
30,895
(19,785)
155
(470)
(5,869)
9,928
49
Items which are not operating activities:
Interest receivable
Interest payable
Investment income
(4,216)
7,469
(4,749)
(3,734)
7,857
(3,218)
Net Cash inflow from Operating Activities
46,671
22,225
Cash
Flows
£’000
Other
Changes
£’000
31 July 2007
£’000
9,187
14,066
(11,121)
6,788
2,371
10,655
-
15,975
16,437
(466)
12,132
19,814
-
31,946
Current asset investments
36,874
15,691
-
52,565
Debt due within one year (Note 15)
(2,823)
2,823
(1,333)
(1,333)
Debt due after one year (Note 16)
(83,315)
6,521
(6,088)
(82,882)
(37,132)
44,849
(7,421)
Operating surplus before tax
Items not involving cash movements:
Depreciation
Deferred capital grants released to income
Impairment of fixed asset investments
Increase in stores
Decrease/(increase) in debtors
Increase in creditors
Pension cost less contributions payable (Note 29)
23. ANALYSIS OF CHANGES IN NET FUNDS/(DEBT)
1 August 2006
£’000
Cash at bank and in hand
Endowment assets (Note 13)
Deposits repayable on demand
Overdrafts (Note 15)
296
The decrease in debt is due to interest payable charges of £7,421,000 plus new loan of £510,000, less payments of
£7,190,000 for interest paid, £190,000 for capital repaid and £2,474,000 in respect of amounts owed following the sale of
operations in UCL Bio(3) Ltd, giving a net decrease in debt of £1,923,000.
Management of liquid resources comprises current asset investments and endowment cash balances.
28
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24. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2007
£’000
2006
£’000
Increase/(decrease) in cash in the period
Increase in current asset investments
Increase/(decrease) in cash within endowment assets
Decrease/(Increase) in debt
13,026
15,691
6,788
1,923
(3,530)
5,620
(43,907)
(10)
Change in net debt
37,428
(41,827)
(37,132)
4,695
Net debt at 1 August 2006
Net funds/(debt) at 31 July 2007
296
(37,132)
25. RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
2007
£’000
Income from endowments
Other interest received
Interest paid
Interest element of finance lease rental payment
Net cash inflow/(outflow) from returns on investments and servicing of finance
4,365
3,622
(629)
(7,190)
2006
£’000
2,789
3,344
(378)
(7,151)
168
(1,396)
2007
£’000
2006
£’000
Purchase of tangible fixed assets
Purchase of fixed asset investments
Net purchase of endowment asset investments
(58,127)
(377)
-
(86,128)
(349)
(44,888)
Total payments to acquire fixed and endowment assets
(58,504)
(131,365)
Proceeds from disposal of fixed asset investments
Net proceeds from sale of endowment asset investments
Capital grants received towards the purchase of tangible assets
Loans to associate companies
Net endowments received
377
3,527
41,550
(1,055)
2,948
67,622
1,594
Net cash outflow from capital expenditure and financial investment
(11,157)
(62,149)
26. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
29
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NOTES TO THE ACCOUNTS
27. FINANCING
2007
£’000
Mortgages and loans acquired
Mortgage and loan capital repayments
Net cash inflow/(outflow) from financing
2006
£’000
510
(190)
(295)
320
(295)
28. HARDSHIP AND ACCESS BURSARY FUNDS
Consolidated and UCL
Balance at 1 August 2006
Funding Council grants
Interest earned
Disbursed to students
Balance at 31 July 2007
2007
£’000
2006
£’000
64
435
4
179
554
10
503
(502)
743
(679)
1
64
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.
29. PENSION FUNDS
The total pension costs for UCL were:
Contribution to USS
Contribution to SAUL
Contribution to NHS
Charged to I&E in respect of RFHSM Pension & Assurance Scheme
Charged to I&E in respect of FPS
Contribution to other pension schemes
2007
£’000
2006
£’000
24,281
4,870
5,236
429
298
11
22,650
3,593
5,114
329
420
12
35,125
32,118
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 the
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 for the 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.
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Page 31
Universities Superannuation Scheme (USS)
The latest actuarial valuation of the scheme was at 31 March 2005 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
4.5%
Salary scale increases per annum
3.9%
Pension increases per annum
2.9%
Market value of assets at last actuarial valuation date
Proportion of members’ accrued benefits covered by the actuarial value of assets
Current Employer’s contribution rate
Future Service
6.2%
3.9%
2.9%
£21,739.7 million
77.0%
14.0%
Superannuation Arrangements of the University of London (SAUL)
The latest actuarial valuation of the scheme was at 31 March 2005 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
5.5%
Salary scale increases per annum *1
4.15%
Pension increases per annum
2.65%
Market value of assets at last actuarial valuation date
Proportion of members’ accrued benefits covered by the actuarial value of assets
Current Employer’s contribution rate
Future Service
6.5%
4.15%
2.65%
£982.38 million
93.0%
13.0%
*1 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 last valuation of the scheme took place as at 31 March 2003. Between valuations, the Government Actuary provides an
update of the scheme liabilities on an annual basis. On advice from the actuary the employer’s contributions were increased from
7% to 14% from the 1st April 2004.
The scheme is a multi-employer scheme, where the asset and liabilities for UCL cannot be identified.
31
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NOTES TO THE ACCOUNTS
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 2005 and for the Royal Free Hospital School of Medicine
Pension and Assurance Scheme on 1 August 2006. For the purposes of reporting under FRS17 a valuation of both schemes
was undertaken on 31 July 2007, 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
Projected Unit
2007
2006
2005
3.30%
3.30%
3.30%
5.99%
4.30%
5.80%
3.10%
2.90%
3.10%
5.99%
4.60%
5.10%
2.70%
2.70%
3.00%
5.99%
4.00%
5.00%
£5.9 million
£5.4 million
£5.6 million
Funding level
129.00%
128.00%
130.00%
Present value of liabilities
Fair value of the scheme assets
£20.1 million
£26.0 million
£19.4 million
£24.8 million
£18.6 million
£24.2 million
Current Employer’s contribution rate
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 Employer’s contribution rate
32
Projected Unit
2007
3.30%
3.30%
3.30%
6.40%
4.30%
5.80%
£(4.7) million
73.00%
£17.3 million
£12.6 million
48.7
2006
3.20%
3.20%
3.20%
6.90%
3.20%
5.10%
£(5.9) million
65.00%
£16.7 million
£10.8 million
2005
2.70%
2.70%
2.70%
6.90%
2.70%
5.10%
£(4.1) million
68.00%
£13.0 million
£8.9 million
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Disclosure of fair values of assets and expected rates of return
FPS
Expected
rate of return
2007
Equities
Annuities
Bonds
Cash
7.70%
5.80%
5.00%
5.00%
11,688
6,631
7,416
274
Total
RFHSM Pension
& Assurance Scheme
Expected
rate of return
2006
Fair Value
2007
£’000
Fair Value
2006
£’000
7.10%
5.10%
5.10%
4.75%
11,037
6,489
6,999
280
26,009
Expected
rate of return
2007
Equities
Bonds
Expected
rate of return
2006
10,132
2,473
Total
7.00%
5.00%
5.00%
4.00%
24,805
Fair value
2007
£’000
6.90%
4.20%
Expected
rate of return
2005
Fair value
2006
£’000
7.50%
4.30%
12,605
8,682
2,189
10,871
Fair Value
2005
£’000
10,405
6,928
6,586
245
24,164
Expected
rate of return
2005
7.50%
4.20%
Fair value
2005
£’000
7,170
1,747
8,917
Amounts included within operating profit
2007
£’000
FPS (1645)
2006
£’000
Current service cost
Past service costs
298
-
329
53
Total Operating Charge
298
382
RFHSM Pension & Assurance Scheme
2007
2006
£’000
£’000
Current service cost
429
420
Total Operating Charge
429
420
Amounts to be included on other finance costs
FPS (1645)
2007
2006
£’000
£’000
Expected return on scheme assets
Interest on scheme liabilities
Net finance return
1,463
(983)
1,389
(919)
480
470
RFHSM Pension & Assurance Scheme
2007
2006
£’000
£’000
Expected return on scheme assets
Interest on scheme liabilities
Net finance charge
769
(865)
630
(671)
(96)
(41)
33
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NOTES TO THE ACCOUNTS
Amounts to be included in the statement of Total Recognised Gains and Losses (STRGL)
FPS (1645)
Difference between actual and expected
return on 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 Pension
& Assurance Scheme
2007 % asset or
£’000
liability
value
468
-
(2% on
assets)
-
(145)
323
266
Experience gains/(losses) arising on
scheme liabilities
294
90
-
(2% on
liabilities)
(2% on
assets)
(2% on
(314)
2006
£’000
777
(1,014)
liabilities)
Effects of changes in assumptions
underlying the present value of scheme
liabilities
Total actual gains and (losses)
recognised in the STRGL
34
441
1,001
% asset or
liability
value
(0% on
assets)
-
(404)
2007 % asset or
£’000
liability
value
Difference between actual and expected
return on scheme assets
2006
£’000
(1,994)
% asset or
liability
value
(2% on
liabilities)
% asset or
liability
value
% asset or
liability
value
2003
£’000
% asset or
liability
value
(7% on
assets)
(799)
(-4% on
assets)
2,166
(10% on
assets)
646
(3% on
liabilities)
406
(2% on
liabilities)
508
(3% on
liabilities)
266
2005
£’000
(7% on
assets)
1,002
(6% on
assets)
-
722
(1% on
liabilities)
% asset or
liability
value
(11% on
assets)
-
329
2004
£’000
184
863
(612)
(2% on
liabilities)
% asset or
liability
value
2,062
2003
£’000
(3% on
assets)
26
(8% on
518
liabilities )
(814)
(12% on
liabilities)
2004
£’000
1,787
(2,167)
(1,757)
(6% on
liabilities)
2005
£’000
188
(1% on
liabilities)
(12% on
liabilities)
% asset or
liability
value
(0% on
assets)
(4% on
liabilities )
1,052
(1,667)
2,099
(19% on (1,123)
liabilities)
(9% on
liabilities)
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Movements in surplus during the year
Surplus in scheme at beginning of the year
Movement in year:
Current service cost
Contributions
Past service costs
Other finance income
Actuarial gain/(loss)
Surplus in scheme at end of the year
2007
£’000
FPS (1645)
2006
£’000
5,435
5,608
(298)
480
323
(329)
53
(53)
470
(314)
5,940
5,435
RFHSM Pension & Assurance Scheme
2007
2006
£’000
£’000
Deficit in scheme at beginning of the year
(5,861)
(4,106)
Movement in year:
Current service cost
Contributions
Other finance cost
Actuarial gain/(loss)
(429)
673
(96)
1,001
(420)
700
(41)
(1,994)
Deficit in scheme at end of the year
(4,712)
(5,861)
30. RELATED PARTY TRANSACTIONS
Transactions with subsidiaries of UCL have been eliminated on consolidation and no disclosure of these transactions
has therefore been given.
The Group has year end debtor balances with the following associate and joint venture companies:
Balance at
1 August 2006
Cash transfers
Income
Expenditure
Balance at
31 July 2007
£’000
£’000
£’000
£’000
£’000
Pentraxin Therapeutics Limited
Domainex Limited
Canbex Therapeutics Limited
Evexar Medical Limited
RMS Innovations (U.K.) Limited
137
50
4
320
-
163
(31)
(328)
-
189
99
38
129
13
(2)
-
489
118
42
119
13
Total debtors
511
(196)
468
(2)
781
35
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NOTES TO THE ACCOUNTS
Additionally, the Group has granted loans to the following associate companies:
Pentraxin Therapeutics Limited
Canbex Therapeutics Limited
Evexar Medical Limited
Total loans
2007
£’000
2006
£’000
300
250
805
300
-
1,355
300
31. 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 exceeding £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) £600 million aggregate layer of ‘excess’ cover obtained through a selection of insurers and re-insurers (structured as
£300 million for any one loss or in the aggregate, followed by a further loss of £300 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.
32. TAXATION
Taxation charges and credits are in respect of UK corporation tax in the following subsidiary companies:
2007
£’000
2006
£’000
UCL Trading Ltd
Proaxon Ltd
UCL Business PLC
UCL Advanced Diagnostics Ltd
Stanmore Implants Worldwide Ltd
25
53
(1)
168
18
1
37
1
Total Tax charge
245
57
36
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Page 37
FINANCIAL SUMMARIES (unaudited)
2007
£’000
2006
£’000
2005
£’000
2004
£’000
2003
£’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
178,623
97,795
201,698
110,055
8,965
166,964
86,308
184,136
115,148
915
6,952
153,201
79,782
167,425
104,908
1,332
7,199
145,766
76,480
161,860
99,837
5,833
131,847
69,695
159,779
92,694
4,503
Total income
597,136
560,423
513,847
489,776
458,518
EXPENDITURE
Staff costs
Other operating expenses
Interest payable
Depreciation
364,073
183,377
7,469
35,070
347,803
167,451
7,857
30,895
325,636
155,467
7,778
27,924
305,010
146,521
7,811
26,544
286,760
137,283
7,274
26,139
Total expenditure
589,989
554,006
516,805
485,886
457,456
7,147
6,417
(2,958)
3,890
1,062
SURPLUS/(DEFICIT) FOR THE YEAR BEFORE
DISPOSAL OF FIXED ASSETS AND BEFORE TAX
Share of operating loss in joint ventures
Share of operating (loss)/profit in associates
(137)
(536)
(282)
(264)
(226)
(122)
(144)
30
(54)
(61)
Profit on disposal of operations
Profit/(loss) on disposal of fixed asset investments
(Loss)/profit on disposal of tangible fixed assets
337
(195)
(104)
7,732
(392)
55
4,054
(56)
1,164
4,034
7,885
2,055
SURPLUS FOR THE YEAR AFTER DISPOSAL
OF FIXED ASSETS BUT BEFORE TAX
Taxation
Share of taxation in associates
Minority interest
SURPLUS FOR THE YEAR AFTER DISPOSAL
OF FIXED ASSETS AND TAX
Transfer (to)/from accumulated income within
specific endowments
SURPLUS FOR THE YEAR
6,616
5,767
(245)
(1)
(57)
6
80
1
(106)
(1)
(17)
(6)
25
45
68
489
41
6,395
5,761
4,183
8,267
2,073
(837)
613
424
(585)
(589)
5,558
6,374
4,607
7,682
1,484
37
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.
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