LONDON’S GLOBAL UNIVERSITY
Annual Report and Financial Statements
for the year ended 31 July 2009
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
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.
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 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.
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
CONTENTS
Page
1
Committee Membership
2
Financial Highlights
3
Operating and Financial Review
11
Corporate Governance
13
Responsibilities of the Council of UCL
15
Independent Auditors Report to the Members of the Council of UCL
17
Statement of Principal Accounting Polices
22
Consolidated Income and Expenditure Account
23
Statement of Total Recognised Gains and Losses
24
Consolidated Balance Sheet
25
UCL Balance Sheet
26
Consolidated Cash Flow Statement
27
Notes to the Accounts
55
Financial Summaries (unaudited)
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
COMMITTEE MEMBERSHIP
Council
Lay Members:
Sir Stephen Wall* (Chair)
Sir John Birch* (Vice-Chair until
31/8/2008)
Ms Vivienne Parry* (Vice-Chair from
1/9/2008)
Ms Anne Bulford (Treasurer)
Mr Victor Chu (until 31/8/2008)
Ms Philippa Foster-Back (from 1/9/2008)
Lord Hart of Chilton*
Mr Rob Holden
Mr Mark Knight
Ms Catherine Newman
Ms Katharine Roseveare
Professor Chris Thompson
Dr Gill Samuels
Academic
Members:
Professor Malcolm Grant* (Provost)
Professor Iain Borden
Professor Robert Brown*
Professor Richard Catlow
(until
31/8/2008)
Dr Nikos Konstantinidis (from 1/9/2008)
Dr Mark Lancaster* (until
31/8/2008)
Dr Benet Salway*
Dr Andrea TownsendNicholson
Professor Maria Wyke
UCL Union:
Mr Andrew Fernando (until 31/8/2008)
Mr Ed Steward (from 1/9/2008)
Mr Jim Hunkin (until
31/8/2008)
Mr Nathanael Macdonald
(from 1/9/2008)
Finance Committee
Lay Members:
Ms Anne Bulford (Chair)
Mr Nigel Buchanan
Mr David Dutton
Mr Robin Fox
Mr Derek Thomas
Sir Stephen Wall
Mr Mark Clarke (from
01/03/2009)
Academic
Members:
Professor Malcolm Grant (Provost)
Dr Robert Barber
Professor Dame Hazel Genn
Professor David Ingram
Dr Andrea TownsendNicholson
Professor Jonathan Wolff
UCL Union:
Ms Olivia Alford (until 31/8/2008)
Mr Nathanael Macdonald (from 1/9/2008)
Audit Committee
Lay Members:
Mr Mark Knight (Chair)
Sir John Birch (until 31/8/2008)
Mr Rob Holden (from 1/9/2008)
Mr John Hustler
Mr Nigel Smith
Investments Committee
Lay Members:
Ms Anne Bulford (Chair)
Mr Nigel Buchanan
Mr David Dutton
Mr Robin Fox
Mr Nigel Thomas

denotes also member of Remuneration Committee
* denotes also member of Nominations Committee
1
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
FINANCIAL HIGHLIGHTS
2009
£m
2008
£m
CONSOLIDATED INCOME & EXPENDITURE ACCOUNT
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Endowment income and interest receivable
Total income
Share of income from joint ventures
NET INCOME
209.9
126.7
248.6
124.0
8.2
193.8
107.8
211.2
112.3
10.7
717.4
(3.7)
713.7
635.8
(0.4)
635.4
TOTAL EXPENDITURE
701.9
634.8
(0.7)
(6.1)
0.1
(0.6)
5.2
0.2
0.1
0.5
(0.5)
5.1
5.5
Fixed assets
Endowment asset investments
Net current assets
Total assets less current liabilities
599.4
57.2
30.9
687.5
581.7
65.5
35.5
682.7
Non-current liabilities and provisions
Provision for liabilities and charges
Pension assets/(liabilities)
(80.1)
(1.3)
(8.1)
(81.5)
(5.9)
TOTAL NET ASSETS
Represented by:
598.0
595.3
Deferred grants
Endowments
Reserves
Minority interest
349.5
57.2
192.3
(1.0)
341.9
65.5
189.0
(1.1)
(5.0)
6.3
4.6)
(1.7)
2009
No.
2008
No.
21,126
9,385
20,170
9,037
Share of operating loss in joint ventures and associates
Profit on disposal of subsidiary
Profit/(loss) on disposal of tangible fixed assets
Profit on disposal of fixed asset investments
Taxation
Minority interest
Transfer to accumulated income within specific endowments
SURPLUS FOR THE YEAR
CONSOLIDATED BALANCE SHEET
OTHER KEY STATISTICS
Consolidated recognised gains
Consolidated (decrease)/increase in cash flow
Student numbers
Average payroll numbers
2
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
OPERATING AND FINANCIAL REVIEW
The Council of UCL is responsible for this operating and financial review together with the
financial statements, as described on page 13. The format follows the Statement of
Recommended Practice (SORP): Accounting for Further and Higher Education.
The financial statements include the consolidated results of UCL’s subsidiary companies,
details of which are shown at Note 38 and whose commercial activities are, for legal and
taxation reasons, more appropriately channelled through limited companies.
These accounts have been prepared on a going concern basis as described in more detail in
note 1 of the Accounting Policies.
This Operating and Financial Review has been prepared for UCL as a whole and therefore
gives greater emphasis to those matters which are significant to UCL when viewed as a
whole.
Long term strategy & objectives
In June 2007 UCL published a new White Paper “Modernising UCL” laying out UCL’s strategy
and aims for 2007–2012. 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 responsibilities
from the centre to faculty level supported by investment in staff and facilities. These themes
continue to be central to UCL’s strategy going forward as we face the uncertainty of public
spending cuts.
UCL is one of the world's prestige, research-led universities. It operates in a global context
and is committed to excellence, innovation, and the promotion of global understanding and
co-operation. This spirit of radical idealism has been at the heart of UCL since the university
was founded in 1826.
UCL's global vision is informed by four clear principles of intent that form the basis of all it
does:

To enhance UCL's educational and research environment by promoting the global
context in which UCL operates.

To contribute throughout the range of UCL activity (research, teaching, learning,
business links, and community engagement) to the resolution of problems of global
significance.

To contribute to UCL's financial stability by maximising income generation from all
aspects of global activity where the potential to do so exists.

To engage with public bodies, including UK Government, in matters of support for
British Higher Education in a global market.
3
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
OPERATING AND FINANCIAL REVIEW
Financial Results for the year ended 31 July 2009
UCL’s summary consolidated Income and Expenditure results for the year ended 31 July
2009 are shown in the table below:
£m
Operating Income
Deferred grants released
Total income
Operating Expenditure
Depreciation
Total Expenditure
Surplus before exceptional items & deferred grants
Net Share in joint ventures, associates, tax & minority
interests
Profit/(Loss) on disposal of subsidiary & fixed/tangible fixed
assets
Surplus on continuing operations
Transfer from accumulated income within specific
endowments
Surplus retained within general reserves
2009
680.7
33.0
713.7
(662.0)
(39.9)
(701.9)
11.8
2008
611.8
23.6
635.4
(596.1)
(38.7)
(634.8)
0.6
(0.7)
(0.1)
(6.1)
5.5
5.0
6.0
0.1
(0.5)
5.1
5.5
Total income for the year exceeded £700m for the first time and stood at £714m, an increase
of £79m (12%) over the previous year. Expenditure rose £67m (11%) to £702m. As a result
the surplus for the year before exceptional items was £11m, up from only £1m in 2007-08.
However a significant proportion of the increase (£9.4m) is from HEFCE deferred grants
released offset by only a small increase in depreciation charged (£1.2m). The large increase
in deferred grants released relates primarily to the purchase of UCL’s interest in the land
acquired for the UK Centre for Medical Research and Innovation which was transferred from
Current Assets Investments to Fixed Assets during the year.
Funding Council grants increased 8% over the previous year but if the increase in deferred
grants is excluded the increase is only 3%. Academic Fees and Research Income both rose
by 18% in the year reflecting success both in attracting additional students and research
applications. Endowment income and interest receivable fell from £10.7m to £8.2m almost all
of which was from a fall in interest receivable.
Staff costs went up £33m (8.5%) to £417m and make up 59% of total expenditure (60% in
previous year).
On the Group Balance Sheet Net Assets are now at £598m up £4m from the previous year.
UCL Net Assets stand at slightly more (£604m), the reduction at group level reflecting
intercompany debt of £10m. The value of endowments has fallen from £65m to £57m
reflecting market conditions. Fixed Asset additions for the year totalled £66m. The university
continues to have a healthy net cash position with cash at bank and in short term deposits up
£14m at £96m.
Total reserves increased during the year by £5.0m to £174.6m. This change was made up of
an increase in departmental reserves of £11m and in earmarked reserves of £2.3m offset by
a decrease of £8.3m in revenue reserves.
4
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
OPERATING AND FINANCIAL REVIEW
Operations
Partnerships and Collaborations
In March 2009 UCL Partners was confirmed as one of five Academic Health Science Centres
(AHSC) being established in England. UCL Partners has brought together UCL with Great
Ormond Street Hospital for Children NHS Trust, Moorfields Eye hospital NHS Foundation
Trust, the Royal Free Hampstead NHS Trust and University College London Hospitals NHS
Foundation Trust. The AHSC’s, partnerships between world-class Universities and leading
NHS organisations, have been recognised as having the potential to compete globally with
established centres such as those in the United States, Canada, Singapore, Sweden and the
Netherlands.
The AHSC will be well-placed to compete on the world stage for talent and funding, drawing
in economic benefits for the UK as a whole. The selection process was carried out by a panel
of internationally renowned clinicians and researchers. The award of AHSC status will enable
the centre to speed up the process of taking research breakthroughs into NHS patient care the aim is to improve treatments in the NHS and across the world. UCL and its partners will
work together to deliver world-class research, education and patient care for the benefit of
their local communities, and then promote the application of their discoveries in the NHS and
across the world. Seven priority programme areas for co-investment have been identified,
from cardiovascular medicine to paediatrics, and work has already started on early themes.
Work has continued on the UK Centre for Medical Research and Innovation (UKCMRI)
announced last year that brings UCL together with Cancer Research UK, the Medical
Research Council and the Wellcome Trust, to build and operate this new centre to be built
behind the British Library adjacent to St. Pancras station. In August 2008 a leading
architecture practice were commissioned to design the building. In parallel the Scientific
Planning Group comprising scientists from the four consortium members and led by Sir Paul
Nurse, Nobel Laureate and President of Rockefeller University, New York, is working together
to determine the shape and direction of the future research work to be carried out in the
Centre.
UCL has been working closely over the past two years with Arup, the Thames Gateway
Development Corporation and several other partners to develop a new concept for London,
the Institute for Sustainability. It has been set up as an independent charitable company to
promote sustainability research, demonstration and knowledge dissemination. It is made up of
a collaboration of world class commercial and academic partners and has strong links with a
sister institute in Shanghai. It will focus initially within the Thames Gateway – Europe’s largest
regeneration area and home to many of the UK’s development needs and opportunities. The
Institute’s core activities are establishing close-to-market, collaborative research and
demonstration projects and using the learning to promote best practice and support
regeneration.
UCL SERAus, first announced last year, is the outcome of a partnership agreement between
UCL, the Government of South Australia, and Santos Limited, one of Australia’s largest
energy companies. It will provide a range of programmes, designed for both new graduates
and established professionals, to address areas of skill shortage identified by industry and
government, and provide scientists and engineers with management skills through courses
designed specifically for the energy sector. Staff are now in place in Australia and students
have been recruited for courses starting in autumn 2009.
League Tables & Rankings
In the 2008 Research Assessment Exercise (RAE), the results of which were published in
December 2008, UCL was rated the best research university in London, and third in the UK
overall, for the number of its submissions which were considered of ‘world-leading quality’.
The RAE confirmed UCL’s multidisciplinary research strength with outstanding results
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UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
OPERATING AND FINANCIAL REVIEW
achieved across the subjects, ranging from Biomedicine, Science and Engineering, and the
Built Environment to Laws, Social Sciences, Arts and Humanities. UCL put forward over
1,800 submissions in 49 of the 67 Units of Assessment. In the vast majority of UCL’s
submissions, at least 50% were ranked at either the highest grade of 4* (‘of world-leading
quality’), or 3* (‘internationally excellent’).
In October 2008 the THE-QS university league tables showed UCL has risen from 9th place
to 7th in the world. On the 6 indicators used, UCL was equal top in the UK for citations per
staff, a powerful accomplishment for a university of all disciplines.
A Times Higher Education analysis league table published in September 2009 showed that
UCL won the most research council grants in 2008-09. It is thought to be the first time that
neither Cambridge nor Oxford has topped the table. UCL secured 174 awards from 651
applications in the 2008-09 financial year, compared with 162 secured by Cambridge and 153
won by Oxford.
Research
Collaboration and impact were central features of major developments in UCL's research in
2008/2009. While results in the Research Assessment Exercise 2008 clearly demonstrated
the strength and breadth of UCL's research within disciplines, the UCL Research Strategy
recognises that the university can address the world's major problems most effectively by
working across and beyond conventional boundaries.
May 2009 saw the impact of this approach, with the publication of a major report launched
jointly by ‘The Lancet’ and UCL, asserting that climate change is the biggest global-health
threat of the 21st century. 'Managing the Health Effects of Climate Change’ was the work of
UCL academics from many disciplines across the university – including health, anthropology,
geography, engineering, economics, law and philosophy. It also formed the basis of a set of
briefing papers commissioned for Commonwealth Health Ministers, prepared as part of UCL's
Grand Challenge of Global Health.
The second of UCL's Grand Challenges, that of Sustainable Cities, was formally launched to
mark the university's commitment to deploying the breadth of its expertise – in imaginative,
interdisciplinary collaborations and partnerships with policymakers and practitioners – to
make our cities fit for purpose.
Other cross-disciplinary groups formally launched included the UCL Institute of Origins, the
UCL Centre for Stem Cells & Regenerative Medicine and the UCL Energy Institute. UCL
'Town Meetings' prepared the way for further thematic collaboration this year on Digital
Humanities, Infectious Diseases, Developmental Cognitive Neuroscience and Risk & Disaster
Reduction.
In order to prepare the next generation of researchers, eight Centres for Doctoral Training
were funded or renewed, creating hundreds of PhD positions in: Energy Demand Reduction &
the Built Environment; Financial Computing; Security Science; Photonic Systems
Development; Virtual Environments, Imaging & Visualisation; Molecular Modelling & Materials
Science; Urban Sustainability & Resilience; and Bioprocess Engineering Leadership.
UCL also introduced an open access policy to ensure that its research is made freely
accessible to all, becoming the first European university ranked in the global top ten to do so.
Students
Student numbers for 2008-09 reached a total of 21,126, an increase of 956 on 2007-08, 545
over the target for the year.
Approximately half of the increase was in UK/EU
undergraduates, the result of a higher conversion of offers to acceptances than has been
experienced in previous years. Taught postgraduate numbers also exceeded the target set
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UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
OPERATING AND FINANCIAL REVIEW
for the year, whilst research postgraduate numbers showed a small increase over 2007-08
but fell slightly short of the target.
Compared with the position in 2004-05, prior to the implementation of UCL’s 2004 White
Paper proposals, UCL has seen an increase in its overseas student population of
approximately 1,000 students which has resulted in a shift in the UK/EU:overseas student
ratio from 80:20 in 2004-05 to 77:23 in 2008-09, with a 33% increase in overseas
undergraduate students and a 15% increase in overseas postgraduates over the period.
During spring 2009 a £3.8m package of activity designed to prepare UCL students for entry
into an unprecedentedly difficult employment market, and to support London businesses
during the economic downturn was implemented. The package includes a number of
measures, such as:






The opportunity for up to 135 students to spend 8–12 weeks on fully-funded internships
with local businesses in London to gather valuable work experience and boost the local
economy by tackling real-world business problems in science, engineering and
technology;
560 places for students and local people on intensive business language training courses
in Arabic, Japanese, Mandarin and European languages;
an intensive, week-long, summer ‘boot camp’ in entrepreneurship to teach UCL
graduates the basics of starting up a business, reading balance sheets and producing a
solid business plan. Other workshops will develop business skills and general commercial
awareness;
additional investment in UCL’s Careers Service to ensure graduates have access to
professional careers support for at least one year following graduation;
500 individual coaching and mentoring places will be provided, supported by major
employers including Deloitte, National Rail and Siemens;
£1,000 fee discount for returning UCL graduates is being introduced. By providing this
discount, UCL hope both to strengthen the employment prospects of our 2009 graduates,
and to encourage outstanding graduates to continue their studies, helping to nurture the
next generation of world-class scholars and scientists.
In the 2009 National Student Survey 87% (88% in 2008) of UCL final-year students
responding declared themselves satisfied with the quality of their courses. This compared
with a national figure of 81% (83% in 2008). Amongst the Russell Group universities
satisfaction fell 1% to 85%.
Staff and Their Involvement
Staff involvement and satisfaction has been evaluated this year, through a staff survey
undertaken in March 2009. A set of questions measured employee engagement which, when
aggregated, gave an overall index of engagement which was 11 percentage points above the
average benchmark derived from a group of 370 comparator organisations employing 1.5
million staff. In particular a high proportion of respondents reported being proud to work at
UCL and that they would recommend UCL as a good place to work. Overall there were high
levels of satisfaction with corporate communication and the opportunities for flexible working
and autonomy. Progress from the previous survey in 2005 included improved opportunities
for training and development and a sense of feeling valued and recognised for work well
done. Inevitably there were also areas requiring attention and action plans are being drawn
up to focus on identified areas for improvement, both across UCL and more locally.
This year UCL has introduced revised pay arrangements for professors which are linked more
closely and transparently to individual achievement and contribution. An equal pay audit
showed that the new arrangements have had a positive impact on closing historical
differentials between the pay of women and men at this level.
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UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
OPERATING AND FINANCIAL REVIEW
UCL has revised and updated its organisational development strategy over the last year,
better embedding management competencies and leadership behaviours into training
programmes. The proportion of managers undertaking management training over the last
year has increased.
In respect of its workforce equality targets, UCL has maintained the percentage of black and
minority ethnic support staff in support roles and has increased the percentage of women in
senior posts by 2%.
Estates
The year saw considerable activity on student residences with completion of refurbishment
work to Campbell House East and Hawkridge House together with completion of Ian Baker
House, a new student residence block in the courtyard of Ramsay Hall. Also delivered in the
year were some important accessibility improvements including a new lift provided to link the
Jeremy Bentham Room with the South Cloisters and Refectory and a project to provide
disabled access via a ramp to the Rockefeller building.
Work also started in the year on the public realm with remodelling of the front entrance from
Gower Street and the first phase of improvements in Malet Place and in the rear approaches
to the Anatomy and Darwin buildings.
Also underway this year was the refurbishment including reroofing of 20-21 Gordon Square
together with external cleaning and restoration along the front façade of 16-26 Gordon Square
and a second phase of learning laboratory work on the ground floor in the science library.
Many other projects are under way or imminent across the whole estate with continued focus
particularly where there is more urgent need for maintenance or refurbishment.
Environmental sustainability has continued to increase in prominence within UCL. The
existing 10% reduction target within our Carbon Trust Management Programme has been
accelerated via a successful bid to the HEFCE-Salix Revolving Green Fund to provide
investment worth £250k repayable via energy savings.
Estates Division has continued to make progress in increasing recycling and avoiding waste
to landfill. The newly let cleaning and waste contract gives UCL access to mixed waste
recycling offsite which has improved our recycling performance to 50% Estates is also
working within the Faculties by promoting 'Green Champions' to develop and implement
recycling initiatives.
The expiry of the existing two year deal on energy procurement through the HE 'Energy
Consortium' coincided with a spike in worldwide energy prices driven by crude oil and gas
prices. This created a 50% increase in electricity costs over 2007-2008 prices on contracts for
July 2008; this spike has reversed for contracts let in July 2009 so the benefits will be felt in
2009-2010.
Estates & Facilities Division is now working with the UCL Faculty of the Built Environment, the
largest interdisciplinary faculty of the built environment in the UK, UCL Procurement Services
and the UCL Environment Institute to implement a long term plan to reduce UCL’s impact on
the environment.
Fundraising & UCL Campaign
The work of the Development & Corporate Communications Office (DCCO) includes
fundraising (major gifts, annual fund, trusts and foundations, and legacy initiatives), alumni
relations, media relations and all other print and electronic communications programmes and
internal development services operations. Despite the challenges associated with the current
economic climate, the fundraising teams continue to make good progress in attracting support
for UCL. New programmes to involve alumni in the current life of the institution have been
8
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
OPERATING AND FINANCIAL REVIEW
well-received, and amongst graduates of all decades there exists a sense of pride and
ownership in the institution with an understanding that UCL must seek private philanthropic
support in order to remain a world-leader in higher education. Total commitments to the
Campaign for UCL now exceed £156m toward the £300m goal by 2014. Total gift income
generated by D&CCO exceeded £6.15m in 2008/2009 and Annual Fund income crossed the
£500,000 level for the first time in UCL history.
Future Outlook
UCL’s total HEFCE recurrent grant for 2009-10, including other smaller funding streams, is to
be £173m, up only 1.5% from last year. This represents a cut in real terms when compared
with staff costs, which are the main driver of university’s cost base, and is notwithstanding an
improved performance in the RAE 2008 on which the new figure for research funding is
based. However this is only the beginning as we – and other universities – face the prospect
of real and significant cuts in funding over the next few years as part of the reductions in
public expenditure expected after the 2010 General Election.
At this time it is not clear where and how these cuts will fall – either through teaching grant, or
QR funding or research council funding – or all three. We are already seeing evidence of cuts
on the latter as individual research councils start to tackle their own funding problems.
Financial planning has started on the impact of various scenarios on our funding levels over
the next three years and how we might cope with them. All the essential back office support
processes and systems will need to be reviewed to ensure they are delivering best value for
money and are as streamlined and cost effective as possible. The work will not just to focus
on areas for potential savings but also on areas that need investment to sustain our pursuit of
excellence.
Where we have the ability directly to influence our income – particularly on student fees and
research income – we need to redouble our efforts to ensure we hit our student framework
numbers and to continue to win as much research income as possible. The appointment of
Research Facilitators over a year ago has been highly successful and is reflected in our
research grants success rates. We will shortly be appointing Industry Research Facilitators to
improve our performance in this area where we fall behind our competitors.
Arising from the proposals set out in the UCL’s 2004 White Paper, the Student Number
Framework aims, by 2012-13, to reduce UK/EU undergraduate numbers in order to reflect
more closely the level fully funded by HEFCE. It also proposes more investment in the
promotion of UCL as a global institution by increasing the number and proportion of
international students studying at UCL and to increase postgraduate numbers. Although
significant progress has been made with certain aspects of the framework, most notably the
increase in taught postgraduate and overseas student numbers, other elements have proved
more challenging. The increase in demand for undergraduate places and improved ‘A’ level
results mean that it has been difficult to achieve the reduction in UK/EU undergraduate
numbers, whilst success in other areas has led to an increase in the overall student
population beyond that previously envisaged. It has also proved difficult to increase
significantly research postgraduate numbers although steps are now being taken to try to
address this. Achievement of the original Student Number Framework remains a top priority
for UCL.
Staff costs continue to account for around two thirds of our total expenditure. In 2009-10 we
will see the full year impact of the two pay rises of 3% and 5% in 2008 which without any
change in headcount will mean a minimum increase in staff costs in 2009-10 of over 6%. This
is before any guaranteed movements through scales and promotions. It is therefore vital that
the final employer offer of 0.5% for the August 2009 pay round stays at that level.
Since our last Annual Report was published the results of the USS Actuarial Valuation for
31st March 2008 have been published. The funding position under the four different bases
was as follows:-
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UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
CORPORATE GOVERNANCE
UCL is committed to exhibiting best practice in all aspects of corporate governance and
endeavours to conduct its business in accordance with the seven principles identified by the
Committee on Standards in Public Life (selflessness, integrity, objectivity, accountability,
openness, honesty and leadership).
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 June 2008 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 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, has taken account of the CUC’s governance code of
practice and general principles within the CUC Guide for Higher Education Governing Bodies
in the UK issued in 2004. UCL’s practices are consistent with the provisions of the code,
except that the reports of governance effectiveness reviews are not at present published
widely.
The Council is responsible for the system of internal control operating within UCL and its
subsidiary undertakings (“the Group”) and for reviewing its effectiveness. Such a system can
only provide reasonable, and not absolute, assurance against material misstatement or loss,
and cannot eliminate business risk. The Council identifies areas for improvement in the
system of internal control, based on reports and views from the Audit Committee, Academic
Board and other committees.
At its November 2009 meeting, the Council will carry out an annual assessment for the year
ended 31 July 2009 by considering a report from the Audit Committee, and taking account of
events since 31 July 2009. 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 2009, 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 four times annually, and is chaired by the
Treasurer. Inter alia it recommends to the Council UCL's annual revenue and capital budgets
and monitors performance in relation to the approved budgets and reviews UCL's annual
financial statements. It also reviews UCL's accounting policies which are applied in the
preparation of those financial statements. The Committee also receives and considers
11
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
CORPORATE GOVERNANCE
reports from the Higher Education Funding Council for England as they affect UCL's business
and monitors adherence with the regulatory requirements.
The Investments Committee, which reports to Finance Committee, is chaired by the Treasurer
and comprises four other lay members with investment expertise appointed by Council. It
governs, manages and regulates the investments of UCL.
The Audit Committee, which meets at least three times annually, is chaired by a lay member
of Council and comprises lay members only. The Committee considers reports from the
Internal Auditors arising from their audits, which highlight significant issues and
management’s response thereon and reviews the conclusions of the work. The Audit
Committee also approves the annual programme of UCL’s Internal Audit Services 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 and
data quality, 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 Committee is 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.
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 Internal and
External Auditors on their own for independent discussions.
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 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 the 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.
12
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
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) applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements;
(iv) financial statements are prepared on the going concern basis. The Council is
satisfied that it has adequate resources to continue in operation for the foreseeable
future and for this reason the going concern basis continues to be adopted in the
preparation of the financial statements.
The Council has taken reasonable steps to:
(i) ensure that funds from the Higher Education Funding Council for England are used
only for the purposes for which they have been given and in accordance with the
Financial Memorandum with the Funding Council and any other conditions which the
Funding Council may from time to time prescribe;
(ii) ensure that there are appropriate financial and management controls in place to
safeguard public funds and funds from other sources;
(iii) safeguard the assets of UCL and prevent and detect fraud;
(iv) secure the economical, efficient and effective management of UCL's resources and
expenditure.
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;
13
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
RESPONSIBILITIES OF THE COUNCIL OF UNIVERSITY COLLEGE LONDON
(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 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 misstatement or loss.
The Council is responsible for the maintenance and integrity of the corporate and financial
information included on the company's website. Legislation in the United Kingdom governing
the preparation and dissemination of financial information differs from legislation in other
jurisdictions.
14
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF THE COUNCIL OF
UNIVERSITY COLLEGE LONDON
We have audited the financial statements of University College London (UCL) for the year
ended 31 July 2009 which comprise the statement of principal accounting policies, the
consolidated income and expenditure account, the statement of total recognised gains and
losses, the consolidated and entity balance sheets, the consolidated cash flow statement, and
the related notes 1 to 38. These financial statements have been prepared under the
accounting policies set out therein.
This report is made solely to the Council of UCL, as a body, in accordance with the Financial
Memorandum dated June 2008. Our audit work has been undertaken so that we might state
to the Council 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
The Council’s responsibilities for preparing the Annual Report and the financial statements in
accordance with UCL’s statute, the Statement of Recommended Practice on Accounting for
Further and Higher Education and other applicable law and United Kingdom accounting
standards (United Kingdom Generally Accepted Accounting Practice) are set out in the
statement of the Council’s responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant 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 have been 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 if, in our opinion, the information given in the Council’s report is not consistent
with the financial statements, if UCL has not kept adequate 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 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 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 Annual Report and consider whether it is
consistent with the audited financial statements. This other information comprises only the
Council’s Report, the Corporate Governance Statement and the Operating and Financial
Review. We consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the financial statements. Our responsibilities
do not extend to any further information outside the Annual Report.
15
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
1. Basis of Preparation
The financial statements are prepared under the historical cost convention as modified by the
revaluation of investments and in accordance with both the Statement of Recommended
Practice: Accounting for Further and Higher Education (SORP) 2007 and applicable United
Kingdom Generally Accepted Accounting Practice.
UCL’s business activities, together with the factors likely to affect its future development,
performance and position are set out in the Operational and Financial Review on pages 3 to
10. The financial position of UCL, its cash flows, liquidity position and borrowing facilities are
also described here. UCL has considerable financial resources, along with funding from
HEFCE, for research grants and other teaching contracts across different geographic areas
and industries. As a consequence, Council believe that UCL is well placed to manage its
risks successfully despite the current uncertain economic outlook. The members of Council
have a reasonable expectation that UCL has adequate resources to continue in operational
existence for the foreseeable future. Thus they continue to adopt the going concern basis of
accounting in preparing the annual financial statements.
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 results of subsidiaries acquired or disposed of during the period are included in the
consolidated income and expenditure account from the date of acquisition or up to the date of
disposal. Intra-group transactions are eliminated on consolidation.
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.
Funding Council block grants are accounted for in the period to which they relate.
Funding Council grants to fund special initiatives are credited to the income and expenditure
account in line with the delivery of each initiative. Any payments received in advance of
service delivery are recognised in the balance sheet as liabilities.
Tuition fee income is stated gross and credited to the income and expenditure account over
the period in which students are studying. Bursaries and scholarships are accounted for gross
as expenditure and not deducted from income.
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.
Other income and income in respect of other services rendered are accounted for on an
accruals basis and credited to the income and expenditure account to the extent of the
completion of the contract or service concerned. Any payments received in advance of
service delivery are recognised in the balance sheet as liabilities.
Income from the sale of goods or services is credited to the income and expenditure account
when the goods or services are supplied to the external customer or the terms of the contract
have been satisfied.
17
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
Income from general donations to support revenue expenditure is credited to the income and
expenditure account in full in the year in which it is receivable. Any portion remaining unspent
at the end of the financial year is credited to an earmarked income and expenditure reserve in
the balance sheet.
Income is deferred only when the Group has to fulfil conditions before becoming entitled to it
or where it has been specified by the donor that the money can be expensed in a future
period.
Income received from endowments is credited to the income and expenditure account in the
period in which it is earned. Income from endowments not expended in the year is transferred
from the income and expenditure account to an endowment reserve fund. Realised gains or
losses arising from dealing in assets underlying endowment funds are retained within the
endowment in the balance sheet.
Increases or decreases in value arising on the revaluation or disposal of endowment assets is
added to or subtracted from the funds concerned and accounted for through the balance
sheet by debiting or crediting the endowment asset, crediting or debiting the endowment fund
and is reported in the statement of total recognised gains and losses.
Any increase in value arising on the revaluation of fixed asset investments is carried as a
credit to the revaluation reserve, via the statement of total recognised gains and losses; a
diminution in value is charged to the income and expenditure account as a debit, to the extent
that it is not covered by a previous revaluation surplus.
Expenditure incurred relates to the receipt of goods and services. A provision for bad debts is
included on the basis that as debts become older a higher percentage become irrecoverable.
Where the Group disburses funds it has received as paying agent on behalf of the Funding
Council or other body, and has no beneficial interest in the funds, the receipt and subsequent
disbursement of the funds has been excluded from the income and expenditure account.
4. Pension Arrangements
The Group contributes to three principal pension schemes on behalf of its employees: the
Universities Superannuation Scheme (USS), the Superannuation Arrangements of the
University of London (SAUL) and the National Health Service Pension Scheme.
Contributions are also made to two smaller schemes, the Federated Pension Scheme (FPS)
and the Royal Free Hospital School of Medicine Pension and Assurance Scheme (RFHSM)
both of which are closed to new members.
All are defined benefit schemes. The USS, SAUL and the NHS Pension Scheme are multiemployer schemes and it is not possible to identify UCL’s share of the underlying assets and
liabilities. Therefore, as required by FRS 17, the contributions are charged directly to the
income and expenditure account as if the schemes were defined contribution schemes.
The FPS and RFHSM are single employer defined benefit schemes accounted for in
accordance with FRS 17. The amounts charged to the income and expenditure account 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.
18
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
The FPS and RFHSM schemes are funded, with the assets of the schemes 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. The resulting exchange differences
are dealt with in the determination of income and expenditure for the financial year unless
such funds are held for onward transmission to a research partner under an agency
agreement, in which case they are included in creditors.
7. Taxation
UCL enjoys charitable status and is therefore potentially exempt from taxation in respect of
most income under Section 505 of the Income and Corporation Taxes Act 1988 and in
respect of capital gains under 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 where purchased or constructed
by the Group, or valuation where acquired through donation or via the exchange of nonmonetary consideration. 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. Equipment
Expenditure on furniture and equipment costing less than £25,000 is written off to the income
and expenditure account in full in the year of acquisition.
19
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
Equipment and furniture costing more than £25,000 is capitalised at cost, and depreciated
over its expected useful life as follows:
Equipment funded by research grants
Other furniture and equipment
Term of grant
5 years
10. Acquisition with the aid of specific grants
Where tangible fixed assets, excluding freehold land, 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.
Specific grants received to fund the purchase of freehold land are credited directly to the
income and expenditure account in the year of the purchase.
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. Assets held under finance leases are capitalised and depreciated over the
shorter of the lease term or the expected useful lives of equivalent owned assets.
Operating lease costs are charged to the income and expenditure account in the year in
which they are incurred.
12. Heritage Assets
Individual objects, collections, specimens or structures with historic, artistic, scientific,
technological, geophysical or environmental qualities that are held and maintained principally
for their contribution to knowledge and culture are termed heritage Assets.
Heritage assets acquired on or after 1st July 2006, whether donated, purchased or on loan,
are capitalised and recognised in the balance sheet at cost or valuation, where such cost or
valuation is reasonably obtainable or reliable and amounts to £25,000 or more.
Items donated or on loan are valued by internal valuers. In exceptional cases, where items
are of a rare or unusual nature, an external valuation may be sought.
Heritage assets acquired prior to 1st July 2006 have not been capitalised due to the difficulty
and cost of attributing a reliable cost or value to them, in particular due to the significant cost
involved in the reconstruction and analysis of past accounting records required to do so.
The useful economic lives of assets capitalised are considered and depreciation provided
accordingly where they are considered to be finite.
13. Patents, licences, rights, trade marks and other similar rights over assets
Expenditure on patents, licenses, rights, trade marks and other similar rights over assets is
charged to the income and expenditure account in full, in the year in which they are incurred.
14. Investments
Endowment Asset Investments and fixed asset investments in listed securities are stated at
market value in the Balance Sheet. Subsidiary and associate company investments are
stated at cost less provision for impairment.
20
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
STATEMENT OF PRINCIPAL ACCOUNTING POLICIES
Current asset investments are shown at the lower of cost or net realisable value.
In the consolidated accounts the Group’s share of the results in joint ventures is 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.
15. Stocks
Stocks are made up of goods for resale, centrally held stocks holdings and major stocks held
by academic departments and are stated at the lower of cost or net realisable value.
16. 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.
21
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT
YEAR ENDED 31 JULY 2009
INCOME
Funding Council grants
Academic fees and support grants
Research grants and contracts
Other operating income
Endowment and investment income
Note
1
2
3
4
5
Total Income
Less: Share of income from joint ventures
15
Net Income
EXPENDITURE
Staff costs
Other operating expenses
Interest and other finance costs
Depreciation
6
7
8
9
Total Expenditure
SURPLUS AFTER DEPRECIATION OF TANGIBLE FIXED
ASSETS AT COST AND BEFORE TAX
Share of operating loss in joint ventures
Share of operating loss in associates
Taxation
Share of taxation in associates
15
16
10
16
SURPLUS AFTER DEPRECIATION OF ASSETS AT COST AND
TAX
Minority interest
SURPLUS BEFORE EXCEPTIONAL ITEMS
Exceptional items: continuing operations
Profit on disposal of subsidiary
Profit on disposal of fixed asset investments
(Loss)/profit on disposal of tangible fixed assets
SURPLUS ON CONTINUING OPERATIONS AFTER
DEPRECIATION OF ASSETS AT COST, DISPOSAL OF
ASSETS AND TAX
Deficit/(surplus) for the year transferred to accumulated income in
endowment funds
SURPLUS FOR THE YEAR RETAINED WITHIN GENERAL
RESERVES
2009
£'000
2008
£'000
209,895
126,736
248,640
124,026
8,164
193,832
107,753
211,217
112,255
10,705
717,461
635,762
(3,725)
(348)
713,736
635,414
416,540
232,700
12,722
39,921
383,607
205,130
7,371
38,659
701,883
634,767
11,853
647
(312)
(374)
2
11
(73)
(525)
62
3
11,180
114
(52)
462
11,128
576
(6,149)
5,180
113
170
4,979
6,039
139
(511)
5,118
5,528
11
25
The consolidated income and expenditure of the Group relates wholly to continuing activities.
22
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
STATEMENT OF GROUP TOTAL RECOGNISED GAINS AND
LOSSES
2009
£'000
2008
£'000
25
25
25
4,979
(3,864)
(5,659)
1,320
6,039
(6,105)
(638)
(2,491)
26
(24)
(135)
26
-
34
26
26
26
32
8
1,203
(2,979)
73
(2,452)
18,000
(7,772)
(5,016)
4,553
RECONCILIATION TO CLOSING RESERVES AND
ENDOWMENTS
Opening reserves and endowments
Total recognised (losses)/gains for the year (as above)
254,552
(5,016)
249,999
4,553
Closing reserves and endowments
249,536
254,552
Surplus on continuing operations after depreciation of assets at cost
and disposal of assets and tax
Diminution of endowment asset investments
Net realised loss from sale of endowment asset investments
Net endowments received/(disposed of) in year
Adjustment to income and expenditure reserve for previously
unconsolidated associates
Adjustment to income and expenditure reserve for joint venture
reclassified as investment
Adjustment to income and expenditure reserve for change in
percentage holdings in associates
Unrealised gain/(loss) on revaluation of fixed asset investments
Unrealised gain on acquisition of new property
Actuarial loss in respect of pension schemes
23
Note
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
CONSOLIDATED CASH FLOW STATEMENT
Note
2009
£'000
2008
£'000
Net cash inflow from operating activities
28
24,066
26,791
Returns on investments and servicing of finance
30
225
3,081
Taxation
10
2
62
Capital expenditure and financial investment
31
(7,774)
(31,040)
Acquisitions and disposals
32
(138)
7,416
16,381
6,310
Cash inflow/(outflow) before use of liquid resources and financing
Management of liquid resources
29
(8,673)
(6,682)
Financing
33
(1,379)
(1,373)
6,329
(1,745)
6,329
7,567
1,106
1,330
(1,745)
64
(647)
12,887
(6,205)
1,271
16,332
5,625
5,921
296
22,253
5,921
Increase/(decrease) in cash in the year
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN
NET DEBT
Increase in cash in the period
Cash brought forward in previously unconsolidated subsidiary
Cash in subsidiary disposed of during the year
Increase in deposits repayable at short notice
Increase/(decrease) in cash within endowment assets
Decrease in debt
Change in net debt
Net funds/(debt) at 1 August
Net funds at 31 July
29
26
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
1. FUNDING COUNCIL GRANTS
HEFCE recurrent grant:
Teaching
Research
Other (including special funding)
Deferred Capital Grants released in year:
Buildings
Equipment
Share of joint venture income
2. ACADEMIC FEES AND SUPPORT GRANTS
Full-time students
Full-time students charged overseas fees
Part time fees
Other fees
Research training support grants
Short course fees
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
2009
£'000
2008
£'000
68,751
104,115
12,677
66,492
100,359
11,867
15,869
8,483
8,425
6,539
-
150
209,895
193,832
2009
£'000
2008
£'000
38,985
61,539
7,241
5,390
5,183
8,398
31,941
52,615
6,125
5,132
4,428
7,512
126,736
107,753
2009
£'000
2008
£'000
88,173
86,097
27,835
10,050
16,162
3,315
15,843
1,165
79,026
78,132
19,393
6,283
11,519
2,032
14,152
680
248,640
211,217
209,971
38,669
178,431
32,786
248,640
211,217
Income from research grants and contracts includes deferred capital grants released in the year of
£8,602,000 (2008 - £8,657,000).
27
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
4. OTHER OPERATING INCOME
Note
Residences and catering
Other services rendered
Health authorities
Donations and sundry grants
Released from deferred capital grants
Other income
Share of joint venture income
2009
£'000
2008
£'000
22,836
24,244
33,996
14,415
3,442
21,387
3,706
19,634
30,432
29,561
13,071
3,316
16,137
104
124,026
112,255
Income from residences and catering includes deferred capital grants released in the year of £41,000
(2008 - £13,000).
5. ENDOWMENT AND INVESTMENT INCOME
Income from expendable endowments
Income from permanent endowments
Other interest receivable and investment income
Net return on pension scheme assets and liabilities
Share of joint venture income
25
25
35
6. INFORMATION REGARDING EMPLOYEES
Staff costs:
Salaries and wages
NI contributions
Other pension costs
35
Emoluments of the Provost and President:
Salary
Non pensionable lump sum payment
Benefits
Payment in lieu of pension scheme contributions
Pension contributions
2009
£'000
2008
£'000
2,254
393
5,498
19
2,639
357
7,420
195
94
8,164
10,705
2009
£'000
2008
£'000
345,361
30,264
40,915
318,483
27,753
37,371
416,540
383,607
303,492
20,000
12,280
40,418
28,552
284,265
11,356
36,808
-
404,742
332,429
The emoluments of the Provost are shown on the same basis as for higher paid staff. The Provost
rejoined the USS pension scheme on 1 December 2008.
There were no payments to higher paid employees in respect of compensation for loss of office during
the year (2008 - £80,710 to one employee).
28
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
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 nonHEFCE funds, but excluding employers pension contributions:
2009
2008
No.
No.
£100,001 - £110,000
64
63
£110,001 - £120,000
49
35
£120,001 - £130,000
33
1
£130,001 - £140,000
28
52
£140,001 - £150,000
27
22
£150,001 - £160,000
23
22
£160,001 - £170,000
19
23
£170,001 - £180,000
23
14
£180,001 - £190,000
14
12
£190,001 - £200,000
13
7
£200,001 - £210,000
8
9
£210,001 - £220,000
3
2
£220,001 - £230,000
1
2
£230,001 - £240,000
2
1
£240,001 - £250,000
1
£250,001 - £260,000
1
1
£260,001 - £270,000
1
£330,001 - £340,000
1
£360,001 - £370,000
1
The average number of individuals paid through the payroll during the year was 9,385 (2008 – 9,037).
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
2009
£'000
2008
£'000
12,999
21,160
33,015
7,083
16,963
13,609
8,632
12,571
7,332
9,591
7,242
1,711
2,401
7,719
16,315
11,285
143
13
2,278
8,421
32,217
11,006
17,916
29,610
6,082
14,556
12,176
7,729
8,979
6,838
11,162
6,048
1,758
2,756
7,566
13,551
14,315
148
159
2,021
7,940
22,814
232,700
205,130
The increase in other costs is due to increased expenditure on Research, as reflected Note 9, in line
with the increase in income from Research Grants and Contracts (Note 3).
29
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
8. INTEREST AND OTHER FINANCE COSTS
Note
Bank loans and other loans wholly repayable within five years
Loans not wholly repayable within five years
Finance leases
Realised and unrealised losses on shares held as fixed assets
Net charge on pension scheme assets and liabilities
35
2009
£'000
2008
£'000
221
3,729
3,452
5,219
101
38
3,626
3,445
262
-
12,722
7,371
The appropriate classification for realised/unrealised losses on shares held as fixed asset investments
is within interest and other finance costs. The prior year comparatives have been reclassified for
consistency, having previously been classified under exceptional items.
9. ANALYSIS OF EXPENDITURE BY ACTIVITY
2009
Academic departments
Academic services
Research grants and contracts
Residences and catering
Premises
Administration
Other expenses
Staff
Costs
£'000
Other
Operating
Expenses
£'000
Interest
Payable
£'000
Depreciation
£'000
Total
£'000
202,354
19,896
118,306
2,844
8,047
37,598
27,495
30,657
15,741
83,063
11,565
46,470
28,200
17,004
1,964
3,838
6,920
7,535
2,128
8,602
1,138
20,114
268
136
240,546
37,765
209,971
17,511
78,469
66,066
51,555
416,540
232,700
12,722
39,921
701,883
The depreciation charge has been funded from:
Deferred capital grants released
General income
30,025
9,896
39,921
2008
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
187,265
17,510
106,462
2,592
7,002
34,649
31,083
11,029
63,312
11,006
45,532
25,262
1,829
3,801
-
6,100
1,987
8,657
1,383
19,928
259
224,448
30,526
178,431
16,810
76,263
60,170
28,127
17,906
1,741
345
47,857
383,607
205,130
7,371
38,659
634,505
The depreciation charge has been funded by:
Deferred capital grants released
General income
26,950
11,709
38,659
30
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
10. TAXATION
2009
£'000
2008
£'000
Taxation charges and credits are in respect of UK corporation tax in the following subsidiary
companies:
UCL Trading Ltd
UCL Business Plc
2
(26)
88
Total tax credit
2
62
2009
£'000
2008
£'000
-
113
5,180
-
5,293
(5,951)
(198)
500
(330)
(6,149)
170
11. EXCEPTIONAL ITEMS
Profit/(loss) on disposal of fixed asset investments:
Profit on disposal of interest in investment property
Profit on disposal of shares in subsidiary - Stanmore Implants Worldwide Ltd
Profit/(loss) on disposal of tangible fixed assets:
Profit on disposal of hall of residence - Goldsmid House
Loss on disposal of work in progress – Institute of Cultural Heritage
Loss on disposal of equipment
See Note 8 regarding the reclassification of realised/unrealised losses on fixed asset investments.
12. TANGIBLE ASSETS
Consolidated
Cost
At 1 August 2008
Reclassification of category
Additions at cost
Transfers
Disposals
At 31 July 2009
Freehold
Land and
Buildings
£'000
Leasehold
Land and
Buildings
£'000
Equipment,
Plant and
Machinery
£'000
Assets in the
course of
construction
£'000
Total
£'000
498,911
(46)
43,969
170
543,004
173,931
4,521
178,452
132,604
16,496
(4,143)
144,957
14,113
46
1,456
(170)
(6,138)
9,307
819,559
66,442
(10,281)
875,720
Depreciation
At 1 August 2008
Reclassification of category
Charge for year
Disposals
At 31 July 2009
Net Book Value
At 31 July 2009
123,978
(9)
17,424
141,393
50,927
9
5,449
56,385
101,246
17,048
(3,914)
114,380
-
276,151
39,921
(3,914)
312,158
401,611
122,067
30,577
9,307
563,562
At 1 August 2008
374,933
123,004
31,358
14,113
543,408
31
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
UCL
Cost
At 1 August 2008
Reclassification of category
Additions at cost
Transfers
Disposals
At 31 July 2009
Freehold
Land and
Buildings
£'000
Leasehold
Land and
Buildings
£'000
Equipment,
Plant and
Machinery
£'000
Assets in the
course of
construction
£'000
Total
£'000
498,911
(46)
43,969
170
543,004
172,795
4,490
177,285
131,799
16,457
(4,049)
144,207
14,113
46
1,456
(170)
(6,138)
9,307
817,618
66,372
(10,187)
873,803
Depreciation
At 1 August 2008
Reclassification of category
Charge for year
Disposals
At 31 July 2009
Net Book Value
At 31 July 2009
123,978
(9)
17,424
141,393
50,600
9
5,408
56,017
100,797
16,953
(3,886)
113,864
-
275,375
39,785
(3,886)
311,274
401,611
121,268
30,343
9,307
562,529
At 1 August 2008
374,933
122,195
31,002
14,113
542,243
The declared value of buildings for insurance purposes (day one basis) as at 1 August 2009 was
£2,176m (2008 - £2,206m).
At 31 July 2009, freehold land and buildings included £32.7m (2008 - £26.3m) in respect of freehold
land which is not depreciated.
The above includes assets held under finance leases. At 31 July 2009 the net book value of the assets
held under finance leases was £25.9m (2008 - £26.5m) with a depreciation charge for the year of
£638,000 (2008 - £638,000).
13. HERITAGE ASSETS
Since its foundation in 1826 UCL has acquired and established a number of significant collections of
heritage assets representative of its interests in the arts, humanities, sciences and medicine. Many of
the items contained therein are of international as well as national importance.
UCL’s collections have made, and continue to make, a significant contribution to the furtherance of
scholarship promotion of innovation and the dissemination of knowledge for public benefit.
UCL recognises that its status as a first class international university requires the adoption of
internationally-recognised standards of conduct in the acquisition, preservation, management and
disposal of heritage assets, as well as meeting the requirements of United Kingdom legislation. Policies
to ensure appropriate standards are maintained are set out in the Cultural Property Policy, approved by
the Museums and Heritage Committee at its meeting on 13th November 2008. The terms of reference
of the Committee have been expanded to include the oversight of all UCL’s activities in relation to
heritage assets, and in recognition of this the committee has been re-named the Museums, Heritage
and Cultural Property Committee. The committee is responsible for advising Council on all issues
relating to heritage assets.
No assets have been capitalised in the balance sheet for the year ended 31 July 2009 as the volume of
items, the elapsed time since acquisition and the information available on acquisition methods render
the cost of identifying the appropriate accounting treatment disproportionate to the benefit to be derived
by users of the financial statements. Further, there have been no additions in the year under review
which met the capitalisation threshold of £25,000.
32
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
The principal collections are as follows:
Petrie Collection of Egyptian and Sudanese Archaeology.
The collection comprises over 86,000 objects acquired over a period spanning 1892 to the present day,
via a combination of donations, bequests, purchases and direct collection.
William Petrie was appointed to the first British Chair of Egyptology and Philology in 1892 at UCL. He
conducted numerous excavations from 1884 to 1924 from which many of the objects in the collection
derive.
At any time, a number of objects from the collection are on display in the Petrie Museum which is open
to the public Tuesday to Friday from 13.00 to 17.00 hours and on Saturdays from 11.00 to 14.00 hours.
Special arrangements can be made to accommodate school visits and individual researchers. The
museum also offers a range of teaching and learning resources and services.
UCL Art Collections
The collection comprises over 10,000 fine art objects acquired from 1847 to the present day, via a
combination of donations bequests, purchase and direct collection.
Sub collections include the Flaxman sculpture collection, the Flaxman drawings, the Painting
Collection, European Print Collection, European Drawing Collection, Slade Print Collection, Slade
Drawing Collection, The collections include prize-winning student work from the Slade School of Fine
Art, prints and drawings by Old Master artists such as Durer, Rembrandt, Turner and Constable and
sculpture models by the Neo-Classical artist John Flaxman.
UCL Art Collections operates a study centre, a gallery with public exhibitions and a range of education
programmes. There is an on-line catalogue where many of the items in the collection can be viewed.
Grant Museum of Zoology
The Grant Museum is the only remaining university zoological museum in London. It was founded as a
teaching collection and currently houses around 62,000 specimens, covering the whole Animal
Kingdom, collected from 1827 to the present day.
The Museum contains many skeletons, mounted animals and specimens preserved in fluid. Many of
the species are now endangered or extinct including the Tasmanian tiger or thylacine, the quagga, and
the dodo.
Further items of particular interest and beauty include a selection of spectacular glass models made by
the Blaschka family in the late 1800s, many of Robert Grant's original specimens as well as those of
Thomas Henry Huxley, and the collection of Sir Victor Negus's bisected heads which have been
described as “both arresting and beautiful”.
Acquisitions have been by way of donation and bequest, purchase and direct collection by staff and
students.
The museum is open to the public every week day afternoon from 13.00 to 17.00 hours.
Library Special Collections of Books and Manuscripts
UCL Library Special Collections is one of the foremost university collections of manuscripts, archives
and rare books in the UK. It includes fine collections of medieval manuscripts and early printed books,
notably from the C.K Ogden Collection and Graves Library, as well as significant holdings of 18th
century works, and highly important 19th and 20th century collections of personal papers, archival
material, and literature, covering a vast range of subject areas, notably Latin American archives, Jewish
collections and the George Orwell Archive.
33
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
The collections have been built up since 1826 to the present day by way of donation,
purchase and direct collection.
bequest,
In addition to the above, there are a number of smaller collections covering a range of subjects
including archaeology, geography and biomedicine.
14. INVESTMENTS
Monies held
on long term
deposit
£'000
Other
Investments
£'000
Investment in
subsidiaries
£'000
Total
£'000
Consolidated
At 1 August 2008
Additions
Revaluation
Impairments
Disposals
8,971
844
-
28,803
2,140
(1,659)
(611)
(2,788)
-
37,774
2,984
(1,659)
(611)
(2,788)
At 31 July 2009
9,815
25,885
-
35,700
UCL
At 1 August 2008
Additions
Revaluations
Impairments
Disposals
8,971
844
-
27,571
1,768
(1,659)
(2,723)
2,712
-
39,254
2,612
(1,659)
(2,723)
At 31 July 2009
9,815
24,957
2,712
37,484
Included in monies held on long term deposits is £9.82m (2008 - £8.97m) over which there is a legal
charge.
The deposit represents a security fund to meet the obligations under finance leases (Note 21).
15. INVESTMENTS IN JOINT VENTURES
UCLBS Limited is a joint venture company of London Business School (LBS) and University College
London (UCL). The objects of the company are to advance education by the promotion and support of
collaborative educational ventures entered into by or on behalf of LBS and UCL.
Two collaborative educational ventures have been established, namely The Centre for Scientific
Enterprise Ltd (CSE) and London Technology Network Ltd (LTN). The CSE, initially funded by a £4.6m
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 £4m government grant, aims to improve business links and encourage
interaction and research between industry and London-based academia. With effect from 1 April 2008,
LTN changed its legal status to be a Community Interest Company, at which date it ceased to be a joint
venture and became an associate company.
Bio-Nano Centre Limited is a joint venture company of Imperial College London (ICL) and UCL.
EuroTempest Limited is a joint venture company of Benfield, Royal & Sun Alliance and UCL Business
Plc.
Interbiomedica Ltd is a joint venture company of CP Biomedica and UCL Business Plc.
34
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
During the year, UCL together with its three partners (Cancer Research UK, the Medical Research
Council and the Wellcome Trust) established UKCMRI Constructions Ltd to manage construction of the
UK Centre for Medical Research and Innovation. Each of UCL and its three partners holds one of the
four issued ordinary shares, has the right to veto decisions and the right to appoint one director.
These joint venture investments are disclosed in the financial statements as follows:
Share of income:
CSE
Bio-Nano
EuroTempest
Interbiomedica
UKCMRI Construction Ltd
Share of operating loss:
CSE
Bio-Nano
EuroTempest
Interbiomedica
UKCMRI Construction Ltd
Share of gross assets:
CSE
Bio-Nano
EuroTempest
Interbiomedica
UKCMRI Construction Ltd
Share of gross liabilities:
CSE
Bio-Nano
EuroTempest
Interbiomedica
UKCMRI Construction Ltd
Share of reserves:
CSE
Bio-Nano
EuroTempest
Interbiomedica
UKCMRI Construction Ltd
35
2009
£'000
2008
£'000
25
309
68
3,323
200
139
9
-
3,725
348
(321)
9
-
(165)
(8)
100
-
-
(312)
(73)
350
271
17
5,572
568
392
25
-
6,210
985
(146)
(271)
(10)
(36)
(5,572)
(43)
(392)
(3)
(36)
(6,035)
(474)
204
7
(36)
-
525
22
(36)
175
511
-
-
-
-
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
16. INVESTMENTS IN ASSOCIATES
The UCL group has interests in the following associate companies:
(a)
47.4% 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)
46% holding in 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.
(c)
33.7% holding in Domainex Ltd. 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.
(d)
34.8% holding in Multilyte Ltd. The principal activity of he 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.
(e)
33.3% holding in London Technology Network CIC. The principal activity of the company is to
encourage interaction between industry and the regional academic research base. The company
was reclassified from a joint venture to an associate during the year.
(f)
27.9% holding in ordinary shares of Bloomsbury DSP Limited. The principal activity of the
company is the development and marketing of advanced sonar equipment.
(g)
38% holding in ordinary shares of Senceive Limited. The company provides information delivery
services and products to industry.
(h)
27.1% holding in ordinary shares (10%) and preference shares (17.1%) in Genex Biosystems
Limited. The shares carry equal voting rights. The principal activity of the company is life
sciences research and development.
(i)
20% holding in NPComplete Ltd
The investment in associates is disclosed in the financial statements as follows:
Share of operating profit/(loss):
Pentraxin Therapeutics Ltd
Canbex Therapeutics Ltd
Domainex Ltd
Multilyte Ltd
London Technology Network CIC
Bloomsbury DSP Ltd
Senceive Ltd
Genex Biosystems Ltd
NPComplete Ltd
Share of taxation:
Multilyte Ltd
Bloomsbury DSP Ltd
Senceive Ltd
36
2009
£'000
2008
£'000
65
(70)
(141)
(13)
(141)
(12)
(43)
(12)
(7)
(117)
(70)
(203)
(42)
(62)
(6)
(21)
(4)
-
(374)
(525)
11
1
2
-
11
3
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
Share of net assets/(liabilities):
Pentraxin Therapeutics Ltd
Canbex Therapeutics Ltd
Domainex Ltd
Multilyte Ltd
London Technology Network CIC
Bloomsbury DSP Ltd
Senceive Ltd
Genex Biosystems Ltd
NPComplete Ltd
Purchase of investments in associates:
Senceive Ltd
Genex Biosystems Ltd
Bloomsbury DSP Ltd
17. ENDOWMENT ASSET INVESTMENTS (Consolidated and UCL)
Note
2009
£'000
2008
£'000
(433)
(261)
234
107
1
36
(1)
(7)
(498)
(191)
357
120
141
13
(49)
1
-
(324)
(106)
127
10
-
23
137
23
2009
£'000
2008
£'000
65,512
74,235
75
(5,659)
(3,864)
1,106
4,225
(638)
(6,105)
(6,205)
Balance at 31 July
57,170
65,512
Represented by:
Fixed interest securities and equities
Cash
49,581
7,589
59,029
6,483
Total endowment asset investments
57,170
65,512
Endowment assets at cost
62,253
63,821
Balance at 1 August
Net purchase of investments
Net realised loss from sale of investments
Decrease in market value of investments
Increase/(decrease) in cash balances held for endowment funds
37
31
25
25
29
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
18. DEBTORS
Consolidated
2009
2008
£'000
£'000
Amounts falling due within one year:
Invoiced debtors
Research grants and contracts
Local health authorities/hospitals
Halls of residence debtors
Tax recoverable from Inland Revenue
Advances to members of staff
Intercompany debtors
Other debtors and prepayments
Amounts falling due after one year:
Other debtors and prepayments
Loans to associate companies
UCL
2009
£'000
2008
£'000
10,765
65,844
17,324
410
2,765
63,574
9,877
54,786
17,399
427
2,451
32,279
8,582
65,844
17,324
410
2,756
10,510
60,341
7,726
54,786
17,399
427
2,451
1,474
344
418
1,474
-
-
162,500
117,637
167,241
120,657
8,427
29,441
19. CURRENT ASSET INVESTMENTS
UCL and the other consortium partners of the UK Centre for Medical Research and Innovation
(UKCMRI) have made significant progress during the year towards entering into formal arrangements
for the construction of a building for UKCMRI. UCL's share of the cost of land (£6.4m) acquired by the
consortium for the UKCMRI was transferred to tangible fixed assets during the year.
20. CREDITORS: AMOUNTS
FALLING DUE WITHIN ONE YEAR
Overdrafts
Bank loans
Private Finance Initiative loans
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
Note
21
21
21
38
Consolidated
UCL
2009
£'000
2008
£'000
2009
£'000
2008
£'000
3,210
1,278
13
92,405
13,391
26
1,278
68,962
20,022
3,209
1,278
13
92,405
12,598
1,278
68,962
19,201
32,695
246
87,993
-
28,657
160
52,392
-
31,624
246
83,733
16
27,732
160
49,085
595
231,231
171,497
225,122
167,013
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
21. CREDITORS: AMOUNTS FALLING DUE AFTER MORE
THAN ONE YEAR (Consolidated and UCL)
Note
Obligations under finance leases
Cruciform building - Private Finance Initiative
Long term bank loan
Analysis of Loan repayments:
In less than one year:
Finance leases
Loans
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
In less than one year
20
20
2009
£’000
2008
£’000
42,140
16,850
21,087
42,327
16,814
22,365
80,077
81,506
246
1,291
160
1,278
350
1,364
251
1,291
1,786
4,661
1,409
4,361
40,004
31,912
40,667
33,527
81,614
(1,537)
82,944
(1,438)
80,077
81,506
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 £3.6m per annum. Security is provided to the Lessors by
way of annual payments into a security deposit (Note 14).
The loan facility of £22.4m has a fixed rate of interest of 5.69% for the remaining term of the loan, until
August 2026.
22. OPERATING LEASES
At 31 July 2009 UCL had annual commitments under non-cancellable operating leases as set out
below:
2009
2008
Land &
Land &
Buildings
Other
Buildings
Other
£
£
£
£
Operating leases which expire :
within one year
59,088
36,729
46,793
20,394
In the second to fifth years inclusive
1,234,441
122,595
1,086,454
129,778
Over five years
2,292,875
4,885
2,499,950
34,430
Total
3,586,404
164,209
3,633,197
184,602
39
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
23. PROVISIONS FOR LIABILITIES AND CHARGES (Consolidated and
UCL)
2009
£’000
2008
£’000
Balance at 1 August
Provided in year
Balance at 31 July
1,250
1,250
-
The provision represents our best estimate, based on expert advice, of a sum payable in respect of
construction of a building following the outcome of adjudication proceedings which occurred during
2009.
It is expected a transfer of economic benefits will take place within twelve months of the balance sheet
date.
24. DEFERRED CAPITAL GRANTS
Funding
Council
£’000
Other
Grants
£’000
Total
£’000
Freehold buildings
Leasehold buildings
Equipment
Investments
195,275
41,100
15,850
-
37,798
40,459
9,340
2,050
233,073
81,559
25,190
2,050
At 1 August 2008
252,225
89,647
341,872
(5,425)
(250)
(5,675)
(5,425)
(250)
(5,675)
33,036
1,194
7,474
1,172
1,461
5,884
34,208
2,655
13,358
41,704
8,517
50,221
-
(190)
(197)
(190)
(197)
-
(387)
(387)
(14,176)
(1,693)
(8,483)
(4,727)
(1,625)
(5,733)
(18,903)
(3,318)
(14,216)
(24,352)
(12,085)
(36,437)
Freehold buildings
Leasehold buildings
Equipment
Investments
208,710
40,601
14,841
-
33,803
40,295
9,491
1,853
242,513
80,896
24,332
1,853
At 31 July 2009
264,152
85,442
349,594
Consolidated
Transfer to creditors
Freehold land
Cash receivable:
Freehold buildings
Leasehold buildings
Equipment
Disposals:
Freehold buildings
Investments
Released to income and expenditure account:
Freehold buildings
Leasehold buildings
Equipment
40
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
Funding
Council
£'000
Other
Grants
£'000
Total
£'000
Freehold buildings
Leasehold buildings
Equipment
195,275
41,100
15,850
37,798
39,570
9,340
233,073
80,670
25,190
1 August 2008
252,225
86,708
338,933
(5,425)
(250)
(5,675)
(5,425)
(250)
(5,675)
33,036
1,194
7,474
1,172
1,461
5,884
34,208
2,655
13,358
41,704
8,517
50,221
-
(190)
(190)
-
(190)
(190)
(14,176)
(1,693)
(8,483)
(4,727)
(1,589)
(5,733)
(18,903)
(3,282)
(14,216)
(24,352)
(12,049)
(36,401)
Freehold buildings
Leasehold buildings
Equipment
208,710
40,601
14,841
33,803
39,442
9,491
242,513
80,043
24,332
A 31 July 2009
264,152
82,736
346,888
UCL
Transfer to Creditors
Freehold land
Cash receivable:
Freehold buildings
Leasehold buildings
Equipment
Disposals:
Freehold Buildings
Released to income and expenditure account:
Freehold buildings
Leasehold buildings
Equipment
41
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
25. ENDOWMENTS
(Consolidated and
UCL)
Unrestricted
Permanent
£’000
Restricted
Permanent
£’000
Total
Permanent
£’000
Restricted
Expendable
£’000
2009
Total
£’000
2008
Total
£’000
Capital
Accumulated income
At 1 August 2008
504
22
526
7,234
150
7,384
7,738
172
7,910
55,755
1,847
57,602
63,493
2,019
65,512
72,360
1,875
74,235
Reclassifications
Additions
Disposals
Investment income
Expenditure
-investment
management fees
- other
21
1,742
47
372
1,742
47
393
(1,742)
1,273
2,254
1,320
2,647
316
(2,807)
2,996
(1)
(2)
18
(28)
(203)
141
(29)
(205)
159
(169)
(2,383)
(298)
(198)
(2,588)
(139)
(256)
(2,229)
511
Net realised gain
from sale of
investments
Decrease in market
value of investments
(45)
(803)
(848)
(4,811)
(5,659)
(638)
(31)
(533)
(564)
(3,300)
(3,864)
(6,105)
At 31 July 2009
468
7,978
8,446
48,724
57,170
65,512
Represented by:
Capital
Accumulated income
427
41
7,637
341
8,064
382
46,490
2,234
54,554
2,616
63,493
2,019
At 31 July 2009
468
7,978
8,446
48,724
57,170
65,512
26. RESERVES
Consolidated
2009
2008
£'000
£'000
UCL
2009
£'000
2008
£'000
Income and expenditure reserve
At 1 August
169,595
163,687
175,559
166,881
5,118
(24)
-
5,528
(135)
34
7,183
-
8,270
-
8
550
(678)
73
1,120
(712)
550
(678)
1,120
(712)
At 31 July
174,569
169,595
182,614
175,559
The Income and Expenditure account is designated
as follows:
Departmental Reserves
Earmarked reserves
Revenue reserves
132,790
99,605
(57,826)
121,814
97,264
(49,483)
132,790
99,605
(49,781)
121,814
97,264
(43,519)
Income and Expenditure account at 31 July
174,569
169,595
182,614
175,559
Surplus for the year
Adjustment for previously unconsolidated associates
Adjustment for joint venture reclassified as investment
Adjustment for change in percentage holdings in
associates
Transfer from revaluation reserve
Less pension surplus
42
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
UCL
2009
£'000
2008
£'000
Pension reserve (Consolidated and UCL)
At 1 August
(5,832)
1,228
Actuarial loss
Surplus retained within reserves
(2,979)
678
(7,772)
712
At 31 July
(8,133)
(5,832)
25,277
10,849
(50)
150
1,253
-
(2,602)
18,000
(190)
(760)
(360)
(360)
25,930
25,277
2009
£'000
2008
£'000
31,087
73,079
36,517
58,444
104,166
94,961
2009
£'000
2008
£'000
11,853
647
39,921
(36,437)
5,633
102
(45,036)
48,201
1,250
(779)
38,659
(26,950)
262
618
(255)
(13,746)
(6,412)
37,987
(517)
(5,498)
7,503
(2,647)
(7,615)
7,109
(2,996)
24,066
26,791
Revaluation reserve (Consolidated and UCL)
At 1 August
Revaluation of fixed asset investment property
Revaluation of fixed asset investments portfolio to
market value
Unrealised profit on acquisition of Goldsmid House
Transfer to general reserve in respect of depreciation
of Examination Halls
Transfer to general reserve in respect of depreciation
of Goldsmid House
At 31 July
27. CAPITAL COMMITMENTS (Consolidated and UCL)
Commitments contracted at 31 July
Authorised but not contracted at 31 July
28. RECONCILIATION OF CONSOLIDATED OPERATING SURPLUS TO
NET CASH INFLOW FROM OPERATING ACTIVITIES
Operating surplus after depreciation of tangible fixed
assets at cost and before tax
Items not involving cash movements:
Depreciation
Deferred capital grants released to income
Impairment of fixed asset investments
Minority interests acquired
Decrease in stocks
Decrease in debtors
Decrease in investments
Increase in creditors
Increase/decrease in provisions
Pension cost less contributions payable (Note 35)
Items which are not operating activities:
Interest receivable
Interest payable
Investment income
43
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
29. ANALYSIS OF CHANGES IN NET FUNDS
/(DEBT)
1 August
2008
£’000
Cash
Flows
£’000
Other
Changes
£’000
31 July
2009
£’000
6,483
13,669
(26)
20,126
1,106
9,513
(3,184)
7,435
-
7,589
23,182
(3,210)
27,561
Short term deposits
68,739
7,567
-
76,306
Debt due within one year (Note 20)
(1,438)
1,438
(1,537)
(1,537)
Debt due after one year (Note 21)
(81,506)
7,103
(5,674)
(80,077)
5,921
23,543
(7,211)
22,253
Cash at bank and in hand
Endowment assets (Note 17)
Deposits repayable on demand
Overdrafts (Note 20)
The decrease in debt is due to interest payable charges of £7,214,000 less payments of £7,165,000 for
interest paid and £1,379,000 for capital repaid, giving a net decrease in debt of £1,330,000.
Management of liquid resources comprises short term deposits and endowment cash balances.
30. RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
2009
£'000
2008
£'000
2,647
4,969
(3,860)
(3,531)
2,996
6,840
(3,240)
(3,515)
225
3,081
2009
£'000
2008
£'000
(57,417)
(2,283)
(75)
(59,775)
(73,395)
(2,525)
(4,225)
(80,145)
Proceeds from disposal of fixed asset investments
Proceeds from disposal of tangible fixed assets
Capital grants received towards the purchase of tangible assets
Net loans to associate companies repaid
Net endowments (disposed of)/received
432
28
50,221
1,320
163
500
49,996
937
(2,491)
Net cash outflow from capital expenditure and financial investment
(7,774)
(31,040)
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
31. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of tangible fixed assets
Purchase of fixed asset investments
Net purchase of endowment asset investments
Total payments to acquire fixed and endowment assets
44
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
32. ACQUISITIONS AND DISPOSALS
2009
£’000
2008
£’000
Purchase of investment in associate – Senceive Ltd
Purchase of investment in associate – Genex Biosystems Ltd
Purchase of investment in subsidiary – Evexar Medical Ltd
Purchase of investment in associate – Bloomsbury DSP Ltd
Cash received from sale of subsidiary – Stanmore Implants Worldwide Ltd
(127)
(10)
(1)
-
(23)
7,439
Total acquisitions and disposals
(138)
7,416
33. FINANCING
2009
£'000
2008
£'000
Mortgages and loans acquired
Mortgage and loan capital repayments
(1,379)
(1,373)
Net cash outflow from financing
(1,379)
(1,373)
34. HARDSHIP AND ACCESS BURSARY FUNDS (UCL & Consolidated)
2009
£'000
2008
£'000
At 1 August 2008
Funding Council grants
Interest earned
44
287
2
333
(303)
1
454
8
463
(419)
30
44
Disbursed to students
At 31 July 2009
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.
35. PENSION FUNDS
2009
£’000
2008
£’000
28,802
5,644
5,774
398
297
26,013
5,123
5,463
405
367
40,915
37,371
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
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 either scheme and hence
contributions are accounted for as if they were defined contribution schemes. The schemes are defined
benefit schemes which are externally funded and contracted out of the State Second Pension (S2P)
and valued every three years by professionally qualified independent actuaries using the Projected Unit
Method.
The rates of contribution for both schemes are determined by the Trustees on the advice of actuaries,
the cost recognised for the year in the Income and Expenditure account being equal to the contribution
to the scheme.
Outstanding contributions to USS, SAUL and the NHS pension scheme were £5.3m at 31 July 2009.
45
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
Universities Superannuation Scheme (USS)
The latest actuarial valuation of the scheme was at 31 March 2008 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
Future 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 from (1 October
2009)
4.4%
4.3%
3.3%
6.1%
4.3%
3.3%
£28,843m
103.0%
16.0%
Superannuation Arrangement of the University of London (SAUL)
The latest actuarial valuation of the scheme was at 31 March 2008 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
Future Service
Investment returns per annum
- before retirement
6.9%
7.0%
- after retirement
4.8%
5.0%
1
4.85%
4.85%
Salary scale increases per annum*
Pension increases per annum
3.35%
3.35%
Market value of assets at last actuarial valuation date
£1,266m
Proportion of members’ accrued benefits covered by the
actuarial value of assets
100.0%
Current Employers contribution rate
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 2004. 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.
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.
46
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
The last triennial valuation of the FPS was undertaken on 31 March 2007 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 2009, and details are
given below.
FPS (1645)
Valuation method
Valuation date (31 July)
Projected Unit
2008
2009
2007
Inflation assumption
Increase for pensions
Increase for deferred pensions
Investment return
Salary scale increase per annum
Discount rate for liabilities
3.40%
3.30%
3.40%
6.29%
4.40%
6.00%
3.75%
3.75%
3.75%
6.50%
5.25%
6.30%
3.30%
3.30%
3.30%
6.42%
4.30%
5.80%
Projected over-funding
£1.8m
£3.3m
£5.9m
Funding level
109%
116%
129%
£20.9m
£22.7m
£20.7m
£24.0m
£20.1m
£26.0m
nil
nil
nil
Present value of liabilities
Fair value of the scheme assets
Current Employers contribution rate
Disclosure of fair values of assets and expected rates of return
Expected
rate of
return
Expected rate
of return
Fair Value
2009
£000
8,529
Holding
Fair Value
2008
£000
10,596
Holding
£000
%
£000
%
Equities
7.50%
38
7.30%
44
Property &
2
5.50%
923
4
infrastructure*
Annuities
6.00%
7,163
32
6.30%
6,379
27
Gilts
4.50%
3,478
15
4.75%
3,545
15
Bonds
6.00%
2,462
11
5.50%
3,213
13
Cash
0.50%
111
4.80%
248
1
Total
22,666
23,981
*2 in previous years the property assets have not been separately disclosed but included within the
equity figure
Reconciliation of the present value of the scheme liabilities
to the asset and liability recognised in the balance sheet
Fair value of assets
Value of liabilities (defined benefit obligations)
Funded status
Recognised pension asset
Unrecognised pension asset
47
2009
£'000
2008
£'000
22,666
20,871
1,795
23,981
20,686
3,295
571
1,224
746
2,549
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
Total expense recognised in the income and expenditure
Current service cost
Interest cost on obligation
Expected return on scheme assets
Effect on restriction on expected return
Total income and expenditure charge
2009
£'000
2008
£'000
297
1,291
(1,530)
-
367
1,158
(1,648)
123
58
-
Amounts for the current and previous four periods
2009
£'000
2008
£'000
2007
£'000
2006
£'000
2005
£'000
Fair value of scheme assets
Value of liabilities (funded obligations)
Surplus
22,666
20,871
1,795
23,981
20,686
3,295
26,009
20,069
5,940
24,805
19,370
5,435
24,164
18,556
5,608
Experience (loss)/gain on liabilities
Experience (loss)/gain on assets
(1,967)
(37)
(2,837)
468
90
646
1,787
2009
£'000
2008
£'000
Opening defined benefit obligation
Interest cost on obligation
Current service cost
Actuarial gain on obligation
Members contributions
Benefits paid
20,686
1,291
297
(525)
30
(908)
20,069
1,158
367
(69)
33
(872)
Closing defined benefit obligation
20,871
20,686
Opening fair value of scheme assets
Expected return
Actuarial loss
Members contributions
Benefits paid
23,981
1,530
(1,967)
30
(908)
26,009
1,648
(2,837)
33
(872)
Closing fair value of scheme assets
22,666
23,981
746
(58)
(117)
5,940
(5,194)
571
746
Changes in the present value of the defined benefit obligation
Changes in the fair value of scheme assets
Movements in surplus during the year
Recognised pension asset at the start of the year
Income and expenditure charge
STRGL losses
Recognised pension asset at the end of the year
48
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
RFHSM Pension & Assurance Scheme
Valuation method
Valuation date (31 July)
Projected Unit
2008
2009
2007
Inflation assumption
Increase for pensions
Increase for deferred pensions
Investment return
Salary scale increase per annum
Discount rate for liabilities
3.40%
3.40%
3.40%
6.12%
4.40%
6.00%
3.60%
3.60%
3.60%
6.32%
4.60%
6.10%
3.30%
3.30%
3.30%
6.40%
4.30%
5.80%
Projected under-funding
£(8.7)m
£(6.6)m
£(4.7)m
59%
65%
73%
Present value of liabilities
Fair value of the scheme assets
£21.2m
£12.5m
£18.7m
£12.1m
£17.3m
£12.6m
Current Employers contribution rate
105.9%
105.9%
105.9%
Funding level
Disclosure of fair values of assets and expected rates of return
Expected
rate of
return
Fair Value
2009
£’000
£’000
Holding
Expected
rate of
return
%
£’000
81
19
6.90%
4.00%
Fair Value
2008
£’000
Holding
9,739
2,417
12,156
80
20
Fair value of assets
Value of liabilities (defined benefit obligations)
Funded status
2009
£'000
12,500
21,204
(8,704)
2008
£'000
12,156
18,734
(6,578)
Recognised pension liability
(8,704)
(6,578)
Total expense recognised in the income and expenditure
2009
£'000
2008
£'000
Current service cost
Interest cost on obligation
Expected return on scheme assets
398
1,152
(812)
405
1,014
(842)
738
577
Equities
Bonds
Total
6.70%
3.70%
10,086
2,414
12,500
Reconciliation of the present value of the scheme liabilities to the
asset and liability recognised in the balance sheet
Total income and expenditure charge
49
%
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
Amounts for the current and previous four periods
2009
£’000
2008
£'000
2007
£'000
2006
£'000
2005
£'000
12,500
12,156
12,605
10,871
8,917
(21,204)
(8,704)
(18,734)
(6,578)
(17,317)
(4,712)
(16,732)
(5,861)
(13,023)
(4,106)
1,329
(1,844)
33
(2,513)
(294)
266
1,104
77
1,002
2009
£'000
2008
£'000
Opening defined benefit obligation
Interest cost on obligation
Current service cost
Actuarial loss on obligation
(Gain)/loss arising from changes in assumptions underlying the scheme
liabilities
Members contributions
Benefits paid
18,734
1,152
398
1,329
17,317
1,014
405
33
(311)
84
(182)
32
79
(146)
Closing defined benefit obligation
21,204
18,734
Opening fair value of scheme assets
Expected return
Actuarial loss
Employers contributions
Members contributions
Benefits paid
12,156
812
(1,844)
1,474
84
(182)
12,605
842
(2,513)
1,289
79
(146)
Closing fair value of scheme assets
12,500
12,156
Recognised pension liability at the start of the year
Income and expenditure charge
STRGL losses
Employer contributions
(6,578)
(738)
(2,862)
1,474
(4,712)
(577)
(2,578)
1,289
Recognised pension liability at the end of the year
(8,704)
(6,578)
Fair value of scheme assets
Value of liabilities (funded
obligations)
Deficit
Experience gain/(loss) on liabilities
Experience (loss)/gain on assets
Changes in the present value of the defined benefit obligation
Change in the fair value of scheme assets
Movements in liability during the year
50
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
36. RELATED PARTY TRANSACTIONS
The operating statements of UCL include transactions with related parties. In accordance with FRS 8
‘Related Party Transactions’ these are disclosed where members of UCL’s Council and Senior
Management Team (SMT) disclose an interest in a body with whom UCL undertakes transactions
which are considered material to UCL’s Financial Statements and / or the other party. Due to the
nature of UCL’s operations and the composition of Council (being drawn from local and private sector
organisations) and SMT, it is inevitable that transactions will take place with organisations in which
members of the Council or SMT may have an interest. All transactions involving organisations in which
members of Council or SMT may have an interest, including those identified below, are conducted at
arms length and in accordance with UCL’s Financial Regulations and usual procurement procedures.
An updated register of the interests of members of Council and SMT is maintained.
UCL has taken advantage of the exemption within FRS 8 and not disclosed transactions with other
group entities where it holds more than 90% of the voting rights.
The Provost was appointed to the HEFCE Board on 1 December 2008. UCL receives £209.9m of
funding from HEFCE (see Note 1), these transactions are conducted at arms length and in the normal
course of business.
During the year, Professor Robert Brown and Professor Dame Hazel Genn had close family members
who were employed by UCL. Their remuneration was based on UCL’s standard terms and conditions
applicable to other staff employed in similar capacities.
Richard Furter and Catherine Newman had children who attended UCL as students in 2008-09. Their
attendance is in line with normal UCL policies and procedures and conducted at arm’s length.
Evexar Medical Ltd, a subsidiary of UCL, has received a loan from Stephen Barker, one of its directors.
The balance outstanding at 31 July 2009 was £27,562 (2008 £30,000). Also, income includes £7,510
(2008 nil) for sale of goods to Evexar Compression Advisory Limited, an investee in Evexar Medical
Ltd. There was an outstanding debtor balance of £8,636 at 31 July 2009 (2008 nil).
Canbex Therapeutics Limited has also received a loan of £183,000 (2008 £183,00) from Esperante AB.
Mr Deal Slagel, a director of Canbex Therapeutics Limited, is also an officer of Esperante. The balance
outstanding at 31 July 2009 including associated interest was £219,095 (2008 £204,455).
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:
Pentraxin Therapeutics
Limited
Canbex Therapeutics
Limited
Bloomsbury DSP Limited
Total debtors
Balance
at 1
August
£'000
Cash
transfers
Income
Expenditure
Other
£'000
£'000
£'000
£'000
Balance
at 31
July
£'000
1,062
(321)
172
-
-
913
1
(52)
(1)
68
-
-
-
16
-
1,063
(374)
240
-
-
929
51
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
Additionally, the Group has granted loans to the following associate companies:
Canbex Therapeutics Limited
Genex Biosystems Limited
Senceive Limited
UKCMRI Construction Ltd
2009
£'000
314
37
1,768
2008
£'000
329
37
52
Total loans
2,119
418
-
The following parties are related to UCL by virtue of having a shared director with a UCL subsidiary.
Transactions were as follows:
Transactions in Transactions in
Balance at 31
Balance at 31
2008-09
2007-08
July 2009
July 2008
£
£
£
£
The Anthony Nolan Trust
12,370
9,541
London Genetics Ltd
14,780
726
853
Licensing Executives
963
305
Society Ltd
Albion Ventures LLP
3,750
Close Ventures Ltd
3,750
9,375
37. 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 £10m accumulated from the net contributions of Members;
(b) £15m 'internal' loan facility from Member institutions (UCL is not a participating institution);
(c) £600m aggregate layer of 'excess' cover obtained through a selection of insurers and reinsurers (structured as £300m for any one loss or in the aggregate, followed by a further loss of
£300m 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 10.08% of the total contributions received by the Association.
No claims were notified to the Association for the year 2008-2009.
As at 31 July 2009 UCL was involved in a dispute with a building contractor concerning the final
amount of construction of a building. Our best estimate of the outcome of adjudication has been
included in the amounts as a provision, disclosed at Note 23. A negotiated settlement is being sought
in respect of a further amount. No disclosure of this amount will be made in these accounts on the
grounds that to do so may prove prejudicial to the eventual outcome.
52
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
38. SUBSIDIARY UNDERTAKINGS
The following UCL 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:
Company
Principal Activity
Status
UCL Trading
Ltd
Contracting,
consultancy and other
commercial activities.
Property investment.
UCL
Investments
Ltd
UCL
Properties Ltd
UCL
Residences
Ltd
UCL
Enterprises
Ltd
UCL
Cruciform Ltd
UCL
Consultants
Ltd
Somers Town
Community
Sports Centre
100% owned
Class of
Shares
Ordinary
100% - UCL
100% owned
Ordinary
100% - UCL
Property development
and investment.
Commercial lettings of
accommodation.
100% owned
Ordinary
100% - UCL
100% owned
Ordinary
100% - UCL
General commercial
trading.
100% owned
Ordinary
100% - UCL
Exploitation of
intellectual property in
the field of biomedicine.
Provision of
administrative support
to staff engaged in
consultancy.
Operation of sports
centre.
100% owned
Ordinary
50% - UCL
50% - UCL
Cruciform Trust
100% owned
Ordinary
100% - UCL
Ltd by guarantee.
UCL has the
power to appoint 5
of the 9 trustees
and so has
effective control
100% owned
-
-
Ordinary
Ordinary 'A'
Redeemable
Preference
Ordinary
100% - UCL
100% - UCL
100% - UCL
UCL Business
Plc
Exploitation of
intellectual property.
UCL Bio(3)
Ltd
Developing interactive
teaching and learning
solutions.
100% owned
Ordinary 'A'
Ordinary 'B'
Free Clinical
Research
Holdings Ltd
(FCRH)
Free Clinical
Enterprises
Ltd
UCL Clinical
Research
Management
Centre Ltd
Proportion Held
100% - UCL
Business
100% - UCL
Business
100% - UCL
Business
100% - UCL
Business
Holding company.
100% owned
Ordinary
Testing of new drugs in
the final approval stage.
100% owned
Ordinary
100% - UCL
Business
Conducting clinical
trials in the field of
analgesia.
100% owned
Ordinary
100% - UCL
Business
53
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
NOTES TO THE ACCOUNTS
UCL
Advanced
Diagnostics
Ltd
Stanmore
Clinical
Research
Facility Ltd
Nervation Ltd
Conducting medical
and clinical diagnostics.
100% owned
Ordinary
100% - UCL
Business
Conducting clinical
studies and trials.
100% owned
Ordinary
100% - UCL
Business
Holding company.
100% owned
Ordinary
100% - UCL
Business
100% - UCL
Business
100% - UCL
Business
100% - Nervation
Ordinary 'A'
Nervation
Vascular
Technologies
Ltd
Bloomsbury
Bioseed Fund
Ltd (BBSF)
Proaxon Ltd
Evexar
Medical Ltd
Dormant following
disposal of business.
100% owned
Redeemable
Preference
Ordinary
Investment in
biotechnology start ups.
70% owned
Ordinary
70% - UCL
Developing and
commercialising
medical treatments.
Developing and
commercialising
medical and surgical
devices.
83% owned
A Preferred
Ordinary
96% owned
Ordinary 'A'
Ordinary 'B'
100% - BBSF
72% - UCL
Cruciform
2% - UCL Business
100% - UCL
Business
FCRH’s shareholding in Free Clinical Enterprises Ltd was transferred to UCL Business Plc during the
year.
UCL Business Plc increased its shareholding in Evexar Medical Ltd from 36% to 96% during the year.
54
UNIVERSITY COLLEGE LONDON
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2009
FINANCIAL SUMMARIES (unaudited)
2009
£'000
2008
£'000
2007
£'000
2006
£'000
2005
£'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
209,895
126,736
248,640
124,026
8,164
193,832
107,753
211,217
112,253
2
10,705
178,773
97,795
201,698
111,944
9,352
166,964
86,308
184,136
115,148
915
6,952
153,201
79,782
167,425
104,908
1,332
7,199
Total income
717,461
635,762
599,562
560,423
513,847
(3,725)
(348)
(1,167)
-
-
Net Income
713,736
635,414
598,395
560,423
513,847
EXPENDITURE
Staff costs
Other operating expenses
Interest payable
Depreciation
416,540
232,700
12,722
39,921
383,607
205,130
7,371
38,659
364,073
183,738
7,469
35,070
347,803
167,451
7,857
30,895
325,636
155,467
7,778
27,924
Total expenditure
701,883
634,767
590,350
554,006
516,805
11,853
647
8,045
6,417
(2,958)
(312)
(374)
2
11
(73)
(525)
62
3
(137)
(536)
(245)
(1)
(282)
(264)
(57)
6
(226)
(122)
80
1
11,180
114
7,126
5,820
(3,225)
(52)
462
25
45
68
11,128
576
7,151
5,865
(3,157)
-
5,180
-
-
-
(6,149)
-
113
170
-
352
(195)
-
(104)
-
(392)
7,732
4,979
6,039
7,308
5,761
4,183
139
(511)
(398)
613
424
5,118
5,528
6,910
6,374
4,607
Less: Share of income from joint ventures
SURPLUS AFTER DEPRECIATION OF
TANGIBLE
FIXED ASSETS AT COST AND BEFORE
TAX
Share of operating loss in joint ventures
Share of operating loss in associates
Taxation
Share of taxation in associates
SURPLUS AFTER DEPRECIATION OF
ASSETS AT COST AND TAX
Minority interest
SURPLUS BEFORE EXCEPTIONAL ITEMS
Exceptional items: continuing operations
Profit on disposal of subsidiary
(Loss)/profit on disposal of fixed asset
investments
Profit/(loss) on disposal of tangible fixed assets
Profit on disposal of operations
SURPLUS ON CONTINUING OPERATIONS
AFTER DEPRECIATION
OF ASSETS AT COST, DISPOSAL OF
ASSETS AND TAX
Surplus for the year transferred to
accumulated income in endowment funds
SURPLUS FOR THE YEAR RETAINED
WITHIN GENERAL RESERVES
55