ANNUAL REPORT AND FINANCIAL STATEMENTS FITZWILLIAM COLLEGE - PDF

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ANNUAL REPORT AND FINANCIAL STATEMENTS 2009 FITZWILLIAM COLLEGE ANNUAL REPORT AND FINANCIAL STATEMENTS 2009 CONTENTS Page Organisation and Governance 1 Governing Body and Professional Advisors 2-3 Bursar
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ANNUAL REPORT AND FINANCIAL STATEMENTS 2009 FITZWILLIAM COLLEGE ANNUAL REPORT AND FINANCIAL STATEMENTS 2009 CONTENTS Page Organisation and Governance 1 Governing Body and Professional Advisors 2-3 Bursar s Report 4 Statement of Responsibilities of the Governing Body 5 Independent Auditors Report 6 Statement of Principal Accounting Policies 7-9 Consolidated Income and Expenditure Account 10 Consolidated Statement of Total Recognised Gains and Losses 11 Balance Sheets 12 Consolidated Cash Flow Statement 13 Notes to the Financial Statements 14-30 ORGANISATION AND GOVERNANCE Fitzwilliam College is an independent College of the University of Cambridge and was formed under Royal Charter granted on 9 September 1966 by Queen Elizabeth The Second. Although the College has history going back to 1869 it was only in 1966 that the then existing Fitzwilliam House was constituted as a Corporate Body under the name and style of The Master, Fellows and Scholars of Fitzwilliam College in the University of Cambridge. The College has exempt charitable status. The Objectives of the College are as follows: (a) To advance education, religion, learning and research in the University. (b) To provide a College wherein members of the University may work for Degrees in the University or may carry out postgraduate or other special studies at Cambridge provided that no member of the College or any candidate for membership thereof shall be subject to any test of a religious, political or social character. (c) To apply the moneys of the College as prescribed in the Statutes of the College. (d) To administer any trust or scheme for purposes connected with the objects of the College. (e) To do all such things as are incidental or conducive to the carrying out of the above objects. The Governing Body is responsible for the government of the College in accordance with its Statutes. At least one Ordinary College meeting is held in each University term and a Special College meeting takes place every year. The Governing Body has delegated some duties to the College Committee which is chaired by the Master and includes the Bursar and the Senior Tutor so that it can control key issues and monitor the overall performance of the College. The Governing Body decides on organisational strategy and authority is delegated to the Bursar for implementing strategy and for managing the College. At the Special College meeting (called the Audit Meeting) the Governing body reviews the Annual Report and Financial Statements following detailed review by internal and external auditors and satisfies itself that the reports present a balanced and understandable assessment of the College s position and prospects. 1 GOVERNING BODY AND PROFESSIONAL ADVISORS Governing Body Members of the Governing Body receive no remuneration for acting in that capacity. However remuneration is paid to those members holding specific positions as College officers. Members of the Governing Body during the year were as follows: Master: Professor R D Lethbridge* Bursar: Mr C L Pratt* (retired 30/09/09) Mr R A Powell (appointed 01/10/09) Senior Tutor: Dr P A Chirico* Other Members: Dr M D Potter* Dr A G Kovalev Professor D M Thompson* Dr S Mukherji (retired 30/09/09) Dr J R A Cleaver Dr D R E Abayasekara* Dr G G Pooley* Dr J A Elliott Professor N K H Slater* Dr A E H Wheatley Professor G I Davies* Dr K Saeb-Parsy Dr W Allison Dr J I Alcantara* Dr A Clark* Dr P Lio Dr D M Scott Professor D M Glover Professor R J A Hooley Dr E A Guse (resigned 30/09/08) Mrs N M Padfield* Dr M J Arends Dr D J Cole Dr S S Owen Professor D A Cardwell Dr A S Tavernor* Dr R E Horrox* Mr J M Adams (resigned 30/09/08) Dr J D Leigh Dr P J Rentfrow* Professor K M Brindle Dr S Westenhoff (resigned 30/09/08) Dr K W Platts Dr W Seabrooke Dr D Keown Dr D P Nally Dr M J S Holly Mr R J Moules Dr B Vira Dr S J Gathercole Professor R S Langley Dr N Bukhari Dr R E Ansorge Dr E M S Newby Dr I Moller Dr N Grigorian Professor R P Haining Dr M B Wingate* Professor E Mastorakos Ms M C Young (appointed 01/10/08) Dr E Perreau-Saussine Dr N MacSweeney (appointed 01/10/08) Dr D A Coomes Dr J Tankebe (appointed 01/10/08) Professor M J Millett* Dr A Y Chau (appointed 01/10/08) Dr R D Camina Dr I Reid (appointed 22/10/08) *Also served on the College Committee. 2 GOVERNING BODY AND PROFESSIONAL ADVISORS (Continued) Professional Advisors Bankers Barclays Bank plc Bene t Street Branch P O Box 2 Cambridge CB2 3PZ Solicitors Hewitsons Shakespeare House 42 Newmarket Road Cambridge CB5 8EP Auditors Peters Elworthy & Moore Chartered Accountants and Statutory Auditors Salisbury House Station Road Cambridge CB1 2LA Investment Managers Sarasin & Partners LLP Juxon House 100 St. Paul s Churchyard London EC4M 8BU 3 BURSAR S REPORT General The principal purpose of the College is to advance education, religion, learning and research in the University of Cambridge. In the year under review, academic fees and charges amounted to 2.13 million (2008: 2.06 million) and academic expenditure to 2.97 million (2008: 2.43 million). The deficit of 0.84 million (2008: 0.37 million) in respect of academic activity was met from endowment and other income and the overall result was a deficit of 0.24 million. Donations Donations of 1,091,366 were received during the year (2008: 1,236,593), including 304,300 from the Colleges Fund (2008: 287,900), for which the College is extremely grateful. Grants from the Colleges Fund are added to permanent capital, as is required by the terms of grant. 702,358 of other donations was for specific purposes (2008: 821,021). Financial Review There was a deficit for the year of 237,150 (2008: surplus of 228,526), after depreciation of 781,958 (2008: 764,028). Income from fees, from student rents and from investments and funds was higher by 3.2%, 5.9% and 34.4% respectively than in the preceding year, but conference income fell by 5.7% due to the tough worldwide trading conditions mostly due to the credit crunch. Following significant market falls, Unrestricted funds fell by 9.7% to million (2008: million) and Restricted funds by 6.6% to 9.83 million (2008: million). Within the net assets total of million (2008: million), cash reserves decreased from million to 1.37 million (2008: increase of 9.46 million). A commercial property was acquired during the year for the amount of 2.45million. The total return on investments was -6.95%, (2008: -4.30%).The College expects a small surplus in Risk Management The College has a strong system of financial and management controls. Monthly management accounts, incorporating profiled budget comparisons and forecasts are prepared and are scrutinised by the College Committee and its Finance Sub-Committee, which also review five-year projections. There is an internal Audit Committee, reporting directly to the Governing Body and a comprehensive risk assessment programme across departments. In view of the relatively small endowment of the College, a highly prudential approach is taken towards investment. R A Powell Bursar Date: 25 November STATEMENT OF RESPONSIBILITIES OF THE GOVERNING BODY The Governing Body is responsible for preparing the Annual Report and financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The College s Statutes and the Statutes and Ordinances of the University of Cambridge require the Governing Body to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the College and of the surplus or deficit of the College for that period. In preparing those financial statements the Governing Body is required to: Select suitable accounting policies and then apply them consistently; Make judgements and estimates that are reasonable and prudent; State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the College will continue in operation. The Governing Body is responsible for keeping accounting records which disclose with reasonable accuracy at any time the financial position of the College and to enable it to ensure that the financial statements comply with the Statutes of the University of Cambridge. It is also responsible for safeguarding the assets of the College and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Governing Body is responsible for the maintenance and integrity of the corporate and financial information included on the College s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 5 INDEPENDENT AUDITORS REPORT TO THE GOVERNING BODY OF FITZWILLIAM COLLEGE We have audited the financial statements of the Fitzwilliam College for the year ended 31 July 2009 which comprise the consolidated income and expenditure account, the consolidated statement of total recognised gains and losses, the consolidated and College balance sheets, the consolidated cash flow statement and related notes. The financial statements have been prepared under the accounting policies set out therein. This report is made solely to the College s Governing Body, as a body, in accordance with College s Statutes and the Statutes of the University of Cambridge. Our audit work has been undertaken so that we might state to the College s Governing Body 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 College and the College s Governing Body as a body, for our audit work, for this report, or for the opinions we have formed. Respective Responsibilities of the Governing Body and Auditors The Governing Body s responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of Responsibilities of the Governing Body. 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 prepared in accordance with United Kingdom Generally Accepted Accounting Practice, the College s Statutes and the Statutes of the University of Cambridge. We also report to you if, in our opinion, the Report of the Governing Body is not consistent with the financial statements, if the College has not kept proper accounting records or if we have not received all the information and explanations we require for our audit. We are not required to consider whether the statement in the Report of the Governing Body concerning the major risks to which the College is exposed covers all existing risks and controls, or to form an opinion on the effectiveness of the College s risk management and control procedures. We read other information contained in the Report of the Governing Body and consider whether it is consistent with the audited financial statements. We consider the implications for our report if we become aware of any apparent misstatements within it. Our responsibilities do not extend to any other information. Basis of Audit Opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Governing Body in the preparation of the financial statements, and of whether the accounting policies are appropriate to the College s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of the information in the financial statements. Qualified opinion arising on non-compliance with FRS17 Financial Reporting Standard 17 Retirement Benefits (FRS 17) requires disclosure of the cost of providing retirement benefits and the related gains, losses, assets and liabilities. As explained in note 28 the College has not obtained and disclosed the necessary information for the year ended 31 July 2009 and it is therefore not possible to quantify the effect of this departure. Except for the effect of not complying with FRS 17, in our opinion: The financial statements give a true and fair view of the state of the group s and the College s affairs as at 31 July 2009 and of the group s income and expenditure for the year then ended; They have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice and in accordance with the College s Statutes and the Statutes of the University of Cambridge; and the information given in the Report of the Governing Body is consistent with the financial statements. In our opinion the contribution due from the College to the University has been correctly computed as advised in the provisional assessment by the University of Cambridge and in accordance with the provision of Statute G, II of the University of Cambridge. PETERS ELWORTHY & MOORE Chartered Accountants and Statutory Auditors CAMBRIDGE Date: 11 December STATEMENT OF PRINCIPAL ACCOUNTING POLICIES Basis of preparation The financial statements have been prepared in accordance with the provisions of the Statutes of the College and of the University of Cambridge and applicable Accounting Standards. In addition, the financial statements accord with the Statement of Recommended Practice for accounting in Further and Higher Education (The SORP) with the exception of the balance sheet which has been presented in the different format set out in the relevant section of Statutes and Ordinances of the University of Cambridge (RCCA). The provisions of the SORP require Endowments, Deferred Grants, and Revaluation Reserves to be disclosed on the face of the balance sheet, whereas RCCA requires that part of this information be disclosed in the notes to the financial statements (notes 16 to 19). Basis of accounting The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment assets. Basis of consolidation These financial statements consolidate the financial statements of the College and its two subsidiaries, Fitzwilliam College Services Limited and Kawakawa Bay Limited for the year ended 31 July The two companies are wholly owned subsidiaries of the College. Inclusion of the results of the subsidiaries does not materially change the view presented in the financial statements. The activities of student societies have not been consolidated. Recognition of income Income from permanent capital funds, short term deposits and the investment of unrestricted funds is credited to the income and expenditure account on a receivable basis. Benefactions and donations accepted on condition that only the income may be spent are credited to the balance sheet as permanent capital funds. The income from a permanent capital fund is shown as income in the year that it is receivable. Income from a permanent capital fund that is not expended in the year in which it is receivable is, at the year-end, transferred from the income and expenditure account to a restricted or unrestricted expendable capital fund, as appropriate. When there is subsequent expenditure of accumulated income from a restricted capital fund, income is credited back to the income and expenditure account from the restricted expendable capital fund to match the expenditure. Unrestricted donations are allocated to capital or income at the discretion of the Governing Body on a receivable basis. Restricted benefactions and donations that are used to fund capital projects are initially credited to a restricted expendable capital fund, and then released over the same estimated useful life that is used to determine the depreciation charge for the capital project. College fee income is recognised in the period for which it is received and includes all fees chargeable to students or their sponsors. Pension schemes The college pays contributions to two pension schemes which provide benefits to its members based on final pensionable salary. The assets of these schemes are held separately from those of the College. Universities Superannuation Scheme The College participates in the Universities Superannuation Scheme (USS), a defined benefit scheme which is contracted out of the State Second Pension (S2P). The assets of the scheme are held in a separate trusteeadministered fund. Because of the mutual nature of the scheme,the College is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore, as required by FRS 17 Retirement benefits, accounts for the scheme as if it were a defined contribution scheme. As a result, the amount charged to the income and expenditure account represents the contributions payable to the scheme in respect of the accounting period. 7 STATEMENT OF PRINCIPAL ACCOUNTING POLICIES Pension schemes (continued) Fitzwilliam College Assistant Staff Superannuation Fund The College also contributes to the Fitzwilliam College Assistant Staff Superannuation Fund, which is a similar defined benefit pension scheme. Pension costs are recognised on a systematic basis so that the costs of providing retirement benefits to employees are matched evenly, so far as possible, to the service lives of the employees concerned. Tangible fixed assets a. Land and buildings Freehold buildings within the College main site are stated at depreciated replacement cost ascertained as at 31 July 2003 plus subsequent additions at historical cost. External properties are stated at historical cost. All freehold buildings are depreciated on a straight line basis over their expected useful economic life of 50 years. Freehold land is not depreciated. Where land and buildings are acquired with the aid of specific bequests or donations they are capitalised and depreciated as above. The related benefactions are credited to a deferred capital 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. A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that the carrying amount of the fixed asset may not be recoverable. Buildings under construction are valued at cost, based on the value of architects certificates and other direct costs incurred during the year. They are not depreciated until they are brought into use. b. Maintenance of premises The cost of major refurbishment is capitalised and depreciated over the expected useful economic life of the asset concerned. The cost of routine maintenance is charged to the Income and Expenditure account as it is incurred. c. Furniture, fittings and equipment Furniture, fittings and equipment are capitalised at cost. Depreciation is provided on a straight line basis over the expected useful life of the assets as follows: Library books Furniture, fittings and general equipment Catering an
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