Reports and Financial Statements - Goldsmiths, … · Reports and Financial Statements ... Ms Jess...

Reports and Financial Statements for the year ended 31 July 2009

Reports and Financial Statements 1

Contents

Page

Composition and Membership of the Council 2

Composition and Membership of the Audit Committee and Senior Management Team; and Financial Advisors 3

Statement of Responsibilities of the Council 4

Report of the Warden 6

Independent Auditors’ Report 16

Income and Expenditure Account 19

Statement of Corporate Governance and Internal Control 14

Note of Historical Cost Surpluses and Deficits 19

Statement of Total Recognised Gains and Losses 20

Balance Sheet 21

Cash Flow Statement 22

Notes to the Accounts 23

2 Reports and Financial Statements

Council, Audit Committee,

Senior Management Team and

COMPOSITION AND MEMBERSHIP OF THE COUNCIL 2008-09

Chair MrChristopherJonas

Ex officiomembers:

•Warden: ProfessorGeoffreyCrossick

•DeputyWarden: ProfessorSimonMcVeigh

•Pro-Wardens: DrPhilipBroadhead ProfessorJanePowell

•ClerktotheGoldsmiths’Company: MrDickMelly

•PresidentoftheStudents’Union. MsJessTratt

Elected members:

•threemembersoftheAcademicBoard: ProfessorAlanDownie DrRichardGrayson ProfessorCarriePaechter

•onememberoftheSeniorAcademicStaff: DrGarethStanton

•onememberoftheNon-AcademicStaff,bythat MrPádraigO’Connor staffinaccordancewithproceduresprescribed bytheOrdinances:

•onestudent[UnionChair]: MrManojKerai

External appointed members:

•14persons,notbeingmembersofstaff MrMarkBaillacheorstudentswhoshallberepresentativeof MrJackBarneseducational,economic,social,cultural, DrDavidBarrettcharitable,communityandotherinterests DrVirginiaBrookerelevanttotheworkoftheCollege: MsAltheaEfunshile

LadyGoodhart TheEarlofHarrowby MrKennethMay MrsAlysonMcGarrigle BaronessMorrisofYardley MsMaryStacey MsColleenToomey 2vacancies

Additional member:

•atthediscretionoftheCouncil,onefurther vacancypersonwhomayormaynotbeamemberofstafforastudent:

Financial Advisors 2008-09


COMPOSITION AND MEMBERSHIP OF THE AUDIT COMMITTEE 2008-09

Chair:anindependentmemberof MrJackBarnesCouncilappointedbyCouncil:

ThreemembersofCouncilappointedbyCouncil: DrVirginiaBrooke LadyGoodhart vacancy

TwomembersappointedbyCouncil: TheEarlofHarrowby(SpringandSummertermsonly)

vacancy

Uptotwoco-optedmembers: 2vacancies

Secretary: MissRosemaryHarrison

COMPOSITION AND MEMBERSHIP OF THE SENIOR MANAgEMENT TEAM 2008-09

Chair:Warden: ProfessorGeoffreyCrossick

DeputyWarden: ProfessorSimonMcVeigh

Pro-Wardens: DrPhilipBroadhead ProfessorJanePowell

RegistrarandSecretary: MrHughJones

DirectorofFinance: MrBarryDouglasto30November2008 MrBarryBenjamin(InterimDirector)

from15December2008to24May2009 MsSallyTownsendfrom25May2009

Secretary:Administrator(Warden’sOffice): MsReevaCharles

AUDITORS BANkERSDeloitteLLP NationalWestminsterBankPLCCharteredAccountantsandRegisteredAuditors 65PeckhamHighStreetStAlbans,UK LondonSE155RZ


Statement of Responsibilities

of the Council


InaccordancewiththeCharterandrelatedStatutes,CouncilisresponsiblefortheadministrationandmanagementoftheCollege’saffairs,includingensuringaneffectivesystemofinternalcontrol,andisrequiredtopresentauditedFinancialStatementsforeachfinancialyear.Councilisresponsibleforkeepingproperaccountingrecordswhichdisclosewithreasonableaccuracy,atanytime,thefinancialpositionoftheCollegeandenableittoensurethattheFinancialStatementsarepreparedinaccordancewiththeCharterandStatutes,theStatementofRecommendedPractice:AccountingforFurtherandHigherEducationandotherrelevantaccountingstandards.Inaddition,withinthetermsandconditionsoftheFinancialMemorandumagreedwithHEFCE,theCouncil,through

itsdesignatedOfficeHolder1 ,isrequiredtoprepareFinancialStatementsforeachfinancialyearwhichgiveatrueandfairviewoftheCollege’sstateofaffairs,andofthesurplusordeficitandcashflowsforthatyear.

IncausingtheFinancialStatementstobeprepared,theCouncilhastoensurethat:

•suitableaccountingpoliciesareselectedandappliedconsistently;

•judgementsandestimatesaremadethatarereasonableandprudent;

•applicableaccountingstandardshavebeenfollowed;

and

•FinancialStatementsarepreparedonthegoingconcernbasisunlessitisinappropriatetopresumethattheCollegewillcontinueinoperation.

Councilissatisfiedthatithasadequateresourcestocontinueinoperationfortheforeseeablefuture:forthisreasonthegoingconcernbasiscontinuestobeadoptedinthepreparationoftheFinancialStatements.

TheCouncilhastakenreasonablesteps,includingreceiptofadvicefromitsFinanceandResourcesCommitteeontheallocationofresourcesandgeneralfinancialmanagement,andfromitsAuditCommitteewhichhasawideindependentremitoveritsaffairs,to:

•ensurethatfundsfromHEFCEareusedonlyforthepurposesforwhichtheyhavebeengivenandinaccordancewiththeFinancialMemorandumwithHEFCEandanyotherconditionswhichthatFundingCouncilmayfromtimetotimeprescribe,andsimilarlywithregardtofundingagreementswiththeTeacherDevelopmentAgency(whichisresponsibleforthefundingofInitialTeacherEducation)andtheLearningSkillsCouncilfromwhichtheCollegereceivesasmallgrantforfurthereducationprovision;

•ensurethatthereareappropriatefinancialandmanagementcontrolsinplacetosafeguardpublicfundsandfundsfromothersources;

•safeguardtheassetsoftheCollegeandpreventanddetectfraud;

•securetheeconomical,efficientandeffectivemanagementoftheCollege’sresourcesandexpenditure.

ThekeyelementsoftheCollege’ssystemofinternalfinancialcontrol,whichisdesignedtodischargetheresponsibilitiessetoutabove,includethefollowing:

•acomprehensivemediumandshort-termplanningprocess,supplementedbydetailedannualincome,expenditure,capitalandcashflowbudgets;

•regularreviewsofkeyperformanceindicatorsandbusinessrisksandatleastthreetimesperyearreviewsoffinancialresultsinvolvingvariancereportingandupdatesofforecastout-turns;

•cleardefinitionsoftheresponsibilitiesof,andtheauthoritydelegatedto,HeadsofAcademicandAdministrativeDepartments,CentresandUnits;

•clearly-definedandformalisedrequirementsforapprovalandcontrolofexpenditure,withinvestmentdecisionsinvolvingcapitalorrevenueexpenditurebeingsubjecttoformaldetailedappraisalandreviewaccordingtoapprovedlevelssetbytheCouncil;

•FinancialRegulations,approvedbytheFinanceandResourcesCommitteeandCouncil,supportedbymoredetailedfinancialcontrolsandprocedurespublishedbytheFinanceDepartment,andspecialistpolicydocuments(eg.FraudPolicy)approvedbyCouncil,AuditCommitteeorFinanceandResourcesCommitteeasappropriate;

•aprofessionalInternalAuditteamwhoseannualprogrammeisapprovedbytheAuditCommitteeandendorsedbyCouncilandwhoseHeadprovidestheAuditCommitteewithareportontheinternalauditactivitywithintheCollegeandanOpinionontheadequacyandeffectivenessoftheCollege’ssystemofinternalcontrol,includinginternal financialcontrol.

Anysystemofinternalfinancialcontrolcan,however,onlyprovidereasonable,butnotabsolute,assuranceagainstmaterialmisstatementorloss.

1 InaccordancewiththeFinancialMemorandum,theCollegehastodesignateaprincipalOfficeHolder,acceptabletotheFundingCouncil, whoisrequiredto:

• satisfytheCollege’sCouncilthatallconditionsrelatingtotheuseoffundsprovidedbytheFundingCouncilarecompliedwith;

• advisetheCollege’sCouncilifatanytimeanyactionorpolicyunderconsiderationbyitappearstothedesignatedofficeholdertobeincompatiblewiththetermsoftheFinancialMemorandum.

ThedesignatedOfficeHolderisrequiredtoinformtheChiefOfficeroftheFundingCouncilinwritingshouldtheCollege’sCouncildecideneverthelesstoproceed.TheWardenoftheCollege,ProfessorGeoffreyCrossick,isitsdesignatedOfficeHolder


Report of the Warden


Truetoourheritage,wecontinuetoofferopportunitiestomanytowhomauniversityeducationwouldotherwisebeinaccessible.OurlocationinadisadvantagedpartofLondonenablesustohelpraiseaspirationsamongsttalentedyounglocalpeopleandprovidethemwiththechancetostudyintheinternationalenvironmentofGoldsmiths.

Goldsmithshasconsistentlyperformedstronglyagainstgovernmenttargetsforparticipationfromunder-representedgroupsandlow-participationneighbourhoods.Currently40%ofourstudentscomefromhouseholdswithincomeslessthan£25,000.

ToachievethisdiversityweofferfoundationprogrammesleadingtoourBachelordegrees;weworkinpartnershipwithlocalschools,collegesandtheLondonBoroughofLewishamtoraiseaspirations;andwehosttheOpenBookproject,whichworkswiththosefromoffendingandaddictionbackgroundstoencouragethemtotakeupeducation,offeringthemongoingemotionalandpracticalsupportthroughouttheircourse.Ithasanoutstandingrecordinplacingex-offendersinhighereducation:over100studentsarecurrentlyregisteredontheproject,47ofthematGoldsmiths.

Staff and StudentsGoldsmithshasaround4,500full-timeequivalentundergraduatesandaround2,000full-timeequivalentpostgraduates,12%ofthemfromoutsidetheEuropeanUnion.TheCollegeemploysapproximately1,600staff,includingalmost600professionalacademics–manyofthemleadingresearchersintheirfield–inadditiontovisitingtutorsandsupportstaff.Itaimstobeattheforefrontofaccreditedstaffdevelopment,andarangeofopportunitiesisopentoallstaff.Newacademicstafftakepartinanin-houseprogrammetodevelopteachingskillsandenhancethelearningexperience.

Goldsmithscurrentlyoffersabroadrangeofundergraduate,postgraduateandcontinuing&professionaldevelopmentcourses.Theserangefromtheartsandhumanitiesincludingart,design,drama,history,Englishandcomparativeliteratures,mediaandcommunications,music,visualcultures;thesocialandbehaviouralsciences–anthropology,politics,sociologyandpsychology;computing;andeducation,withinterdisciplinaryworkacrossallareas.Theunifyingfactorsspanningthisrangeofdiversesubjectsarealiberalandcreativeapproachtoteachingandlearning,withtheemphasisonfreedomofthoughtandexpressionalongsidehighandrigorousstandards,andaresearch-ledteachingethos.Aboveall,weaimtomaximisethebenefitsthatourrelativelysmallsizebrings,creatingastimulatingbutsupportiveatmosphere,inwhichstudentsknoweachother,andareknownbytheirtutors.

INTRODUCTION TheFinancialStatementscomprisetheresultsofGoldsmiths’College,UniversityofLondonalsoknownbythebrandname“Goldsmiths,UniversityofLondon”.

TheCollegehasonesubsidiarycompany, PureGoldsmithsLtd,whichdidnottradeinthefinancialyear.

MISSION AND VALUESGoldsmithsisaresearch-intensiveinstitutionwithadistinctiveacademicprofile,acommitmenttothequalityofthelearningexperiencethatweofferourstudents,andaninfluencethatisbothglobalandlocal.

Goldsmiths’Missionistoofferatransformativeexperience,generatingknowledgeandstimulatingself-discoverythroughcreative,radicalandintellectuallyrigorousthinkingandpractice.

InpursuingthisMission,wearecommittedtoasetofcorevaluesthatincludeachievingacademicexcellence,embracingcomplexity,encouragingradicalthinking,andcreatingchangelocallyandglobally.

ThecombinedeffectofourMissionandValuesisaninstitutionthatproduceshigh-qualityresearchandresearch-ledteachingthatisverydistinctive.

OPERATIONSGoldsmithsisauniqueinstitutionwithaglobalreputationforitsinnovativeandchallengingworkinthecreativeandperformingarts,humanitiesandsocialsciences.Notwithstandingourinternationalreachtoday,weremainproudofouroriginsin1891asaTechnicalandRecreativeInstitutetoeducatetheworkingclassofSouth-EastLondon,andourSouthLondonrootshelpshapeourcharactertoday.AsSirSteveBullock,MayorofLewisham,hassaid,“GoldsmithsisknittedintothefabricofLewisham”.

Thesuccessofouralumniinartiswelldocumented–eg,thesixwinnersoftheTurnerPrizewhohavestudiedhere–butwemakeequallystrongcontributionstomanyotherareas,forexample,throughourinternationally-recognisedDepartmentofMediaandCommunications;ourDepartmentofSociologywhoseresearchplacesittopintheUK;ourDepartmentofProfessionalandCommunityEducationwhichisaUKleaderinprofessionaldevelopmentandwideningparticipation;andourDepartmentofComputingwhosestrikingworkontheboundariesofcomputingandthecreativeandperformingartshasexcitedtheinterestofbusinessandculturalorganisationsalike.

TheacademicsuccessofGoldsmithsstemsfromauniquephilosophywhichiscreative,radicalandintellectuallyrigorous,alliedtoastudentbodywhosebreadthanddiversityhelpsnourishthecreativityoftheinstitution.TheriseofGoldsmithsoverthelasttwentyyearstoitscurrentpositionasoneofthecountry’sleadingresearch-intensiveuniversitiesisremarkable.IntherecentofficialassessmentofresearchinallUKuniversities,Goldsmithscameninthinthecountryfortheproportionofitsresearchthatreceivedtheveryhighestfourstargradeof‘world-leading’.Oursuccesshoweverhasbroughtwithitconsequenceswithwhichwestruggle,aboveallanageingcampusthathasfailedtokeeppacewithGoldsmiths’excitinggrowth.


7000

6000

5000

4000

3000

2000

1000

0

Year

Nu

mb

er

of

Fu

ll T

ime

Eq

uiv

ale

nts

2006-072004-05 2005-06 2007-08 2008-09

Wehaveexperiencedasteadygrowthinstudentnumbersoverthepastasillustratedinthechartbelow:

Goldsmiths student FTE

Overthefiveyearperiod,wehaveseenstudentnumbersincreaseby12%.

Ourgraduationceremoniesareauniqueblendoftradition,ceremony,informalityandwarmcelebration.In2008-09around1,200studentsgraduatedatfiveceremoniesheldintheGreatHalloftheRichardHoggartBuilding.

Overallacademicperformanceissummarisedinthefollowingchart:

Undergraduate students successfully completing degree by classification 2008-09

WearekeentoimprovethestudentexperiencebyworkingcloselywiththeStudents’Unionandcanvassingtheviewsofstudentsdirectly.Duringtheyearinquestion,studentsweregiventheopportunitytocommentviatheNationalStudentSurvey(NSS)andtheInternationalStudentBarometersurvey.ThefeedbackfrombothsurveyshashadadirectinfluenceonCollegedecision-makingandhasledtotheenhancementofthestudentsupportprovided.

Student achievementsStudentachievementsincludethefollowing:

In the medals at the International Radio FestivalAnnScantlebury(MARadio2007-2008)wasawardedaSilverMedalatthisyear’sInternationalRadioFestivalofNewYorkforherfinalproductionradiodrama–anoriginalscriptwhichshedirectedandproducedherself.

Her15minutecontemporarymysteryachievedoneofthehighestawardsgivenbytheFestival.TheawardsareofaworldprofessionalstandardandherworkwasrankedinthesamefieldattheBBC,leadingindependentsandotherinternationalbroadcasters.

Glastonbury successLauraBettinson,2009PopularMusicStudiesgraduate,performedatthisyear’sGlastonburyFestivalontheBBCIntroducingStageunderherperformingpersonaDimblebyandCapper.TippedbyBBCRadio1’sHuwStevens,sheperformedalongsideSimonWheeler(nowgoingintohisthirdyearofPopularMusicStudiesatGoldsmiths)andfellowgraduateSamBeste.

Students bring the WI to campusGoldsmithsstudentsIndiaVolkersandKateHutchinsfoundthemselvesflungintothemedialimelightwhentheyputplansinmotiontoestablishabranchoftheWomen’sInstituteatGoldsmiths–thefirstbranchatauniversity.

ThestorywascoveredintheEveningStandard,LondonLite,theMetro,theDailyMailandTheTimes,aswellasthestudentsfeaturingonITV’sGMTVandtheBBC’sOneShow.Indiatoldthepress:“Iwantedtoformagroupwherepeoplecouldgettogetheranddocreativethings.”

Students design routers of the futureDesignstudentswerefeaturedonmultipleinternetnewssitesandblogsafterworkingwiththecountry’slargesthomebroadbandprovider,TalkTalk,todesignanewgenerationoffuturisticrouters.Theyexploredwhatthe‘RoutersoftheFuture’mightlooklikeandhowtheycouldtakeprideofplaceinourhouseholds.

TalkTalkaskedGoldsmithstoconsiderfourfactors:signalstrength,homestyle,energyefficiencyand,finally,pureenjoyment.MarkSchmidfromTalkTalksaid:“WorkingwiththedesignspecialistsatGoldsmiths,wewantedtotransformthehumblerouterintosomethingthatpeoplewouldwanttoshoutabout.WiththeveryfirstRoutersoftheFuturecollection,ourvisionofmakingtherouteranintegralpartofourcustomers’lifestylesandinteriorscomestolife.”

Literary accoladeTomMcMullan(BAEnglish)haswonfirstplaceintheTheLiteraryEncyclopedia’sEmoryElliottMemorialPrize2009.Hiswinningessaywastitled‘WithreferencetoThe OutsiderbyAlbertCamus,discussJean-FrancoisLyotard’sdefinitionof(post)modernistliteratureinrelationtothequestionoftheunpresentable’.

Goldsmiths/BAA Expo Award at Terminal 570studentsfromalllevelsanddisciplines,in28teams,putideasforwardforinnovativeinstallationsforTerminal5,culminatinginthecommissionoftwoartworksforDepartures.SevenoftheseteamswereinvitedtodeveloptheirconceptsandpresentationswithsupportfromBAA,Goldsmiths,world-leadingdesignandcommunicationagencyImagination,andcutting-edgeartorganizationaf2012.TheprojectwasshortlistedforaTimesHigherEducationAward.

Thirdclasshonours

First classhonours

Lower secondclass honours

Upper secondclass honours


RESEARCHGoldsmithsisamemberofthe1994Group,comprisingnineteeninternationally-renowned,research-intensiveuniversities,whichwasestablishedtopromoteexcellenceinresearchandteaching,toenhancestudentandstaffexperiencewithinthememberuniversities,andtohelpsettheagendaforhighereducation.

During2008-09thenationalResearchAssessmentExercise(RAE)evaluatedthequalityoftheresearchoutputofacademicstaffatalluniversities.TheoutcomeisimportantbothforourreputationandfortheleveloffutureHEFCEQRfundingthatwereceiveforresearch.Reflectingourstatusasaresearch-intensiveuniversity,ahighproportionofoureligibleacademicstaffwereentered.

GoldsmithscontinuedtheupwardstrajectoryobservedoverconsecutiveRAEs,movingfrom40thto33rdpositionnationallyintermsofthemostwidelyusedglobalindicators;itcameanimpressive9thintermsofthepercentageofresearchjudgedtobeofthehighest‘world-leading’grade.Reflectingtheirimprovedperformance,severaldepartmentssawincreasesintheirQRfundingthoughthiswasoffsetbyreductionsforothersasaresultlargelyofarelativedecreasenationallyintheproportionoftotalfundingallocatedtoarts,humanitiesandsocialsciencesubjects.Recent grant successes include:

•InDesign,aprestigious£1.7mAdvancedGrantfromtheEuropeanResearchCounciltoProfessorBillGaver.Theproject,‘ThirdWaveHumanComputerInteraction’,integratesdesign-ledresearchmethodswithembeddedandubiquitoustechnologiestocreateprototypeproducts.

•InDrama,a£440KawardfromtheArtsandHumanitiesResearchCouncil(AHRC)toProfessorRobertGordonfora3-yearproject,‘BeyondtheLinearNarrative’.BasedinthePinterCentre,itinvestigateslinksbetweeninter-culturalandpoliticalchangeandtheemergenceofnon-linearandfracturednarrativeincontemporaryartforms.

•InVisualCultures,a£330KAHRCprojectcalled‘PerformanceMatters’ledbyDrGavinButt.Thisbringstogetherartists,curatorsandacademicsfromGoldsmiths,RoehamptonUniversity,andtheLiveArtDevelopmentAgencytoinvestigatetheculturalvalueofperformance.

•InEducationalStudies,anawardof£640KfromtheEconomicandSocialResearchCouncil(ESRC)toProfessorEveGregory,HeadoftheCentreforLanguage,CultureandLearning.Thisproject,‘Becomingliteratethroughfaith’investigateshowchildrenlearnlanguageandliteracyindifferentfaithcommunitiesinLondon.

•InProfessionalandCommunityEducation,anESRCawardof£340KtoProfessorMarjorieMayo,HeadoftheCentreforLifelongLearningandCommunityEngagement,tosupportherteam’skeypartnerroleintheUKResearchClusterforActiveLearningforActiveCitizenship.Thiscollaborativeresearchprogrammeaimstobuildresearchskillsandcapacityrelatingtoactivecitizenshipandcommunityempowerment.

•InPsychology,anESRCawardofover£500KtoProfessorJulesDavidoff,DirectoroftheCentreforCognition,ComputationandCulture,fora3-yearstudyofperceptualprocessingintheremoteHimbatribeinNamibia.

ENTERPRISE AND kNOwLEDgE TRANSFERDuring2008-9theBusinessDevelopmentOfficehasbeenadjustingtoshiftsinfunding,astheCentresforKnowledgeExchangewinddown,andwerelyonHEIFformulafundingandCollegesupport.OurHEIFallocationfor2009-10willriseby29%to£322,000(buildingontheincreasein2007-08of66%),leavingGoldsmithsinastrongpositiontocontinuetodevelopenterpriseandknowledgetransferactivities,andwehavecarefullyhusbandedadditionalresourcestoallocatethisyear.Wehavestrengthenedstaffingfurthertodevelopresearchcollaborations,andhaveseenapplicationsforKnowledgeTransferPartnershipsriseasaresult.In2009-10wewilllooktobuildonsuccessesinthisarea,aswellasinengagementwithResearchCouncilsandtheTechnologyStrategyBoard.

TheCollege’ssubjectmix,withitsemphasisonthecreativeandperformingarts,media,thehumanitiesandsocialsciencesmeansthatourbusinessengagementiscurrentlygearedtowardssmallandmedium-sizedenterprise.Wearenonethelessdevelopingaframeworkforidentifyingandmanagingstrategicpartnershipswithlong-termcollaborativeresearchpartners,regardlessofsize.WewillincreasetheuseofourInternalInvestmentFund,toexpandourcollaborativeandcontractresearchactivity.Wecontinuetomakeuseofpre-commercialfundsandrelationshipswithventurecapitalistsintheHEIF4period.

DEVELOPMENT ACTIVITy During2008-09,theDevelopmentandAlumniOfficehasmadeanumberofimportantadvances.Relationshipswithseveralpotentialmajordonorshavebeenestablishedanditishopedthatthesewillleadtosignificantsupportintheyearstocome.PlanshavealsobeenmadefortheCollege’sfirstalumnitelephonefundraisingcampaigninOctober2009,whiletendersweresoughtfortheCollege’sfirstrelationshipfundraisingdatabaseandthisiscurrentlybeingimplemented.OvertimetheseandotherinitiativeswillleadtosustainablefundraisingincomefortheCollege.Wewelcomethegovernment’smatchfundinginitiativewhichwillprovideadditionalincentivesforthoseinterestedinsupportinguniversities.

RISk MANAgEMENTTheCollege’sriskmanagementprocessaimstohelpCouncilMembersandstafftoconsiderrisk,itsprobabilityandimpact,andthecontrolsinplaceformanagementandmitigationpurposesinaconsistentmanner.Undertheguidanceofourinternalauditors,theKingstonCityGroup,andourPlanningOfficewehaveoverhauledandimprovedourriskmanagementprocess,settingupanewRiskManagementsub-committeewhichwillhaveresponsibilityforembeddingriskmanagementprocesseswithintheCollege,developingriskpolicy;monitoringdepartmentalriskregistersandfeedingtheseintotheCollege’sriskregisterasappropriateforoverallreviewandconsiderationbySMT.TheriskregisterwillthenbediscussedatAuditCommitteeandalsoatCouncil,Goldsmiths’governingbody.


Alongsidethisworktoimprovetheprocessofriskmanagement,wewillbedevelopinganenhancedreportingformatwhichwillbeusedacrosstheCollege,togetherwithtraininginriskmanagementforthoseresponsibleinacademicandsupportdepartments.Thisframeworkwillprovidearobustandcomprehensivesystemofriskmanagement,toenableCounciltocontinuetofulfilitsresponsibilitiestotheFundingCouncilunderthetermsoftheFinancialMemorandum.

ThefollowingrisksarecurrentlyrankedhighestbyGoldsmithsSeniorManagementTeam.

Financial SustainabilityThecurrentfinancialenvironmentthattheCollegeisoperatingwithin,hasanumberofsignificantfinancialchallengeswhichincludelikelyreductionsinpublicfunding,theneedtoworktowardsanddeliversustainablesurpluses,andtheneedtoestablishandeffectivelymaintainthelong-termcapitalprogramme.Weneedtohaveafinancialpositionthatenablesustoinvest,tomaintainthequalityofourworkandtooperatesuccessfullyindifficulttimes.Ourfinancialstrategyfocusesonanumberofkeyelements:increasingincomeandreducingoverallandunitcosts;improvingtheefficiencyofouroperationanddevelopingacapitalplanwhichenablesustoinvestintheestatewithoutfinanciallyover-committingourselves.

Pressure on Research IncomeTheoverallreductiononfundingforresearchcoupledwiththeGovernmentfocusonSTEMsubjects(whichdisadvantagesGoldsmithsbecauseofoursubjectmix)hasputpressureonourabilitytogenerateresearchincome.ResearchisafundamentalpartoftheCollege’smission,andwemustthereforeensurethatmembersofacademicstaffhavetimeandresourcestoconductresearchoftheveryhighestquality.ItisalsoasignificantelementofpublicincomeandreductionswouldhaveasignificantimpactontheCollege.Wearetakingactiontomitigatetheimpactofchangesintheresearchfundingenvironment,byrevisingtheresourceallocationmodeltoimproveincentivestodepartmentstogainexternalresearchfunding(whereverpossibleonafulleconomiccostbasis),andwewillinvestfurtherwhenpossibleinResearchOfficecapability.

AdmissionsWeneedtoensurethatweattractstudentsofthequalityandattributestosustainandenhancetheCollege’sacademicmissionandprofile,withabalanceacrossdepartmentsandprogrammesandlevelsandthatwealsomeetouradmissionstargets.Thestrategicre-organisationoftheRegistrycreatesamarketingdepartmentgivingusabetterstrategicfocustoattractandrecruitgoodstudents.Thereisacontinuedfocusoninternationalstudentrecruitment;marketingplansforeachdepartment’sprogrammesarebeingdevelopedandwecontinuewithourreviewofprogrammeportfolio.

Organisational delivery and supportAsarelativelysmallinstitution,wemustmakethebestofourresources.Thismeansthatwecannotaffordtobeinefficientorineffectiveinhowwesupportouracademicactivities.Weareinvestingininformationsystemstoensurethatweareabletooperatesmoothlyandeffectively,andtoensurethatwehavegoodandreliablemanagementinformation.WehaveputinplacebetterstaffdevelopmentsupportandarefocusingonmanagementandleadershipwithintheCollege.Wehavesignificantlyimprovedtheorganisationandqualityofthesupportdepartments,butfurtherstrengtheningisneeded.

Learning and TeachingThequalityofstudents’learningisattheheartoftheCollege’smission.Wearedeterminedtomaintainitatahighlevel.Additionally,students’satisfactionwiththeirtimeatGoldsmithsimpactsontheirwillingnesstoratetheCollegehighlyandalsoontheirpropensitytorecommendittoothers.Bothofthesehavesignificantreputationalconsequences.Weareinvestinginsupportforacademicpracticeandforthelearninginfrastructure,forexampleinvestinginthelibrary(intermsofprint,digitalandonlinematerials,aswellasthephysicallearningenvironment).

Reputational RiskOurreputationandbrandarestrong,andcontributetoourabilitytosucceed.WeneedtoensurethatwecontinuetodevelopexternalrelationshipswhichsecuretheCollege’spositionwithawidernetworkofstakeholders,suchaslocalgovernmentandcommunitylinks;fundingbodies;Government;culturalorganisations;andpotentialdonors.Seniorstaff,inparticular,looktodevelopexternalcontacts.Wehaveaneffectiveandproactivecommunicationsteamwhoworkhardtomanageanddevelopourbrandandtoensurethatwetellastrongstory.


14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

Inc

om

e 0

00

’s2006-072004-05 2005-06 2007-08 2008-09

UndergraduatefeesPostgraduatefeesInternationalfees

FINANCIAL HIgHLIgHTS

Summary Outturn statement 2008-09

2008-09 2007-08 Change £’000 £’000 %

Income 75,149 71,862 4.6%

Staff 47,083 42,735 10.2%Non-staff 26,134 26,360 (0.9)%

Expenditure 73,217 69,095 6.0%

Operating surplus/(deficit) 1,932 2,767 (30.2)%

Historical cost surplus 2,726 3,557 (23.4)%

SURPLUS Thehistoriccostsurplushasremainedstrongat£2.7m(from£3.6min2007-08).Thisrepresentsawelcomeboosttoourreservesparticularlyinthelightofthelikelyfuturechallenges.Thesurplusfor2008-09confirmstheimprovedperformanceandthedeliveryofourfinancialobjectives,asnotedinthe2007-08accounts.Goldsmithsaimstoachievesurplusesofatleast3%ofturnoverperannum.Goldsmithswillreinvestthesesurplusesinitsinfrastructureinordertocontinuallyimprovethefacilitiesforitsstudents,staffandvisitorstothecampus.

INCOME Incomein2008-09hasincreasedby£3.3m[4.6%]over2007-08.

Goldsmithsincomeismadeupasfollows:

Income 2008-09

FUNDINg COUNCIL gRANTSGoldsmithsreceivesgrantsfromtheHigherEducationFundingCouncilforEngland(HEFCE),theTeacherDevelopmentAgency(TDA)andtheLearningandSkillsCouncil.However,HEFCEgrantsaccountforover85%ofthetotalfundingcouncilgrants.TheHEFCEgrantforresearchaccountsforoveronethirdofthetotalmainstreamgrantreflectingtheCollege’sresearch-intensivecharacter.Overall,fundingcouncilgrantsroseby2.8%comparedto2007-08.

TUITION FEES

Analysed Fee Income

Total tuition fee income growth over the past five years:

Tuitionfeeshaverisenby13%againstthepreviousyearto£27.9min2008-09.95%ofthegrowthinoverallfeeincomeisaccountedforbytheincreaseinfull-timehomeandEUfeeincomewhichispartiallyexplainedbythethirdyearofthevariablefeeregime.

£’000 15,484 16,523 20,932 24,597 27,878

%increaseonpreviousyear

1% 7% 27% 18% 13%

YEA

R

2004-05

2005-06

2006-07

2007-08

2008-09

Other2.9%

Internationalstudent fees

11.5%

Funding bodygrants 43.8%

Home studentfees 25.8%

InterestandEndowment

Income0.8%

Residences7.7%

Research7.4%


7000

6000

5000

4000

3000

2000

1000

02006-072004-05 2005-06 2007-08 2008-09

Inc

om

e 0

00

’sRESEARCHInthepast,partlyasaconsequenceofitssubjectmix,Goldsmiths’incomefromresearchgrantsandcontractshasbeenarelativelylowproportionofoverallturnover.However,followingthelaunchofanewstrategyandadecisionbytheSeniorManagementTeamin2004-05toplaceagreateremphasisonsecuringadditionalgrantincome,Goldsmithshasgeneratedsignificantincreasesinresearchincome.2008-09hasshownadropofresearchincomeof8%.Thisdrophasresultedfromverychallengingconditionswherebyfundingforscience,technologyandengineering,mathematicsandmedicinehavebeenprioritised.ThishaseffectivelyreducedfundingavailableforartsandhumanitiesinstitutionssuchasGoldsmiths.

Detailsofourperformanceoverthelast5yearsareinthechartbelow.

Research Income - 5 Years to 31.7.2009

ThegrowthofresearchgrantandcontractincomehasbeenpartofastrategytodiversifyourincomestreamsandreduceGoldsmiths’relianceonfundingfromHEFCE.Theintroductionoffundingbasedontheprinciplesof‘fullEconomicCosting’(fEC)hasimmediatelyimprovedthefundingavailablefromresearchcouncilandgovernmentgrants,andhasenabledusbettertocostourothergrantsandcontracts;itislikelytohaveapositiveinfluencemoregenerallyinthelongerterm.ThereceiptoffECgrantshascontributed,andwillcontinuetocontribute, toimprovementsintheCollege’slong-termfinancialsustainability.

OTHER OPERATINg INCOMEOtheroperatingincomeremainedbroadlyconstantat£8m.IncomefromourResidences,CateringandConferencesoperationsrosebyaround5%takingthetotalto£5.7m.‘Otherincome’decreasedby£222kresultinginatotalof£1.4m.

INVESTMENT INCOME INCLUDINg ENDOwMENTSCashbalanceshaveremainedhealthyallyear.However,lowerinterestrateshaveresultedinadecreaseinearningsof40%to£564k.

EXPENDITUREStaff costs Goldsmiths’long-termsuccessisverydependentonitsabilitytomaintainitsinvestmentintheexcellentstaffrequiredtodeliver,andtosupportthedeliveryof,high-qualityteachingandresearch.

During2008-09staffcostsroseby10.2%to£47.1mandaccountedfor64%ofexpenditure.Itshouldbenotedthatanelementofthissignificantincrease(comparedtoinflation)resultedfromthere-gradingofpostsundertheHigherEducationRoleAnalysis(HERA).

Other Operating ExpenditureOtheroperatingexpenditurefellbyalmost4.3%.Thishasresultedfromcontinuedfocusongeneratingefficienciesinnon-paycostsandalsobecauseofthereductioninexpenditureonresearchgrantsandcontracts.Therelativelylowlevelofincreaseinnon-payexpenditurehascontributedtothemaintenanceoftheCollege’slevelsofsurplus.

BALANCE SHEETCapital expenditure Goldsmithsinvested£7.2minbuildingsandequipmentassetsduring2008-09.Themostsignificantitemofcapitalexpenditureisthenewcutting-edgebuildingwhichisbeingconstructedtohousetheDepartmentofMediaandCommunicationsandtheInstituteforCreativeandCulturalEntrepreneurshipatGoldsmiths.Thisproject,knownastheNewAcademicBuildingwillalsoprovidemuchneededfacilitiesforthewholeCollegeandaprestigiousvenueformajoreventsandwillreleasespaceforotherdepartmentstoexpand.TheoverallcostoftheNewAcademicBuildingisbudgetedatjustover£20m.Sitesetupisestimatedtofinishinsummer2010toensurethatthebuildingisreadyforthestartofthenewacademicyear.

ThenewbuildingwillbesituatedatthetopoftheCollegeGreen,replacingprevioustemporaryaccommodation.AsthenewcentrefortheDepartmentofMediaandCommunicationsandtheInstituteforCreativeandCulturalEntrepreneurshipitwillallowdifferentsectionsofthedepartment,currentlyscatteredacrossthecampus,tocentraliseintoasinglepurpose-builtspace.Thenewbuildingwillalsohousealargelecturetheatre,meetingspacesandacaféwithoutsideseating.EndowmentsGoldsmithsendowmentsareinvestedinbondsandinapooledequityfundtoearnincometocontributetoacademicpostsetc.andtoenablethecapitalvalueofthefundtogrowovertime.In2008-09however,duetopoorstockmarketperformancethefundhad anegativereturnof£13kovertheyear.

PensionsAsignificantaspectoftheFinancialStatementsisa£6.4mincreaseintheFRS17(RetirementBenefits)pensiondeficitoftheLondonPensionFundAuthority(LPFA)pensionschemeofwhichtheUniversity’sadministrativeandsupportstaffaremembers.Thisincreaseddeficitarisesfromnegativeinvestmentreturnsfortheyear(consistentwiththeunder-performingequitymarkets)whiletheschemesliabilitiesrelatingtoGoldsmithsincreasedby20%.Thelatterreflectsanincreaseinthepresentvalueofthescheme’sliabilitiesasaresultofalowerdiscountrate.Thedeteriorationinthepensiondeficitcontributestoadecreaseinnetassets(afterthepensionliability)with


100

80

60

40

20

0

27

2006-07

14

58

91

2004-05 2005-06 2007-08

85

2008-09

Da

ys

netassetsat31July2009of£47.2m(2008:£52.3m).Itcanalsobeseenthattheincomeandexpenditurereserveshowsadeficitat31July2009afterthepensionreserveisincludedof£0.6m(2008:£2.9msurplus).However,netassetsremainstrongoverall.

CashAfteralowpointin2004-05,Goldsmiths’cashbalanceshaveremainedhealthy.Netcashinflowsfromoperatingactivitiesremainedstrongintheyearat£7.2m(2008:£6.9m)andnetdebtincreasedto£2.1m(2008:£1.8m).Externalborrowingsof£8.8mare12%ofincome(2007-08£8.4m,12%ofincome).Wearecurrentlyfinalisingaloanof£10mtopartfinancetheconstructionoftheNewAcademicBuilding,alongsidethefundingprovidedbyHEFCE.

Thechartbelowshowstheamountofcashheldattheyearendexpressedintermsofnumberofdaysofexpenditure.

Cash & short-term investments/Total expenditure (days)

OurFinancialStrategyincludesatargetminimumcashbalanceof40daysofexpenditureandthetableshowsthatithasbeencomfortablyexceededinthepastthreeyears.

OUTLOOkGoldsmithswillcontinuetoprovideresearch,research-ledteaching,knowledgetransferandengagementwiththelocal,nationalandinternationalcommunities.Itwillbeinnovativeandcreativeinitsapproach.Incommonwithotheruniversities,however,weareoperatinginanincreasinglydifficultandchallengingenvironment.IndicationsarethattherewillbepressureonfundingforallpublicorganisationsandthehighereducationsectorismodellingtheimpactofvaryinglevelsofHEFCEcuts.

Expenditurehasalsobeensubjecttoupwardpressure,asnationally-negotiatedpayincreaseshaveinthepastthreeyearsincreasedsalaryratesbywellaheadofgeneralinflation.Therisingcostsofpensionsandhighinflationaryincreasestonon-payitemssuchasenergyalsoputpressureonoverallfinances.Additionallythechangesingovernmentpolicytowardsfundingforstudentswithequivalentorlowerlevelqualifications,hasincreasedthestrainonourfinances.

Wearecurrentlyrevisingourstrategiesinthecontextofincreasingpressureonpublicfunding.Wearecontinuingourdrivetoincreasenetincomewhilemaintainingcontrolonexpenditure,generatingnecessaryefficiencysavings.Wehavealsoundertakenanumberofchangestoouradministrativeandoperationalstructurestoenablecostreductionstoberealised.WeremainconfidentthatthestrategicandoperationalmeasuresthatwearetakingwillensurethatwecanrespondtothechallengesandgeneratethesurplusesnecessaryforGoldsmiths’futuresustainabilityandsuccess.

TheCouncilhasareasonableexpectationthattheCollegehasadequateresourcestocontinueinoperationalexistencefortheforeseeablefuture.Thustheycontinuetoadoptthegoingconcernbasisofaccountinginpreparingthefinancialstatements.

CONCLUSIONGoldsmithsaimstogrowitsactivitiesoverthemedium-term.TheSeniorManagementTeam,guidedbytheStrategyforGoldsmithsandtheFinancialStrategy,willcontinuetoinvestinitsstaffandfacilitiestoensureimprovedoverallfinancialandacademicperformanceinthemedium-termwhilstmaintainingtheessentialcharacteristicsthatmakeGoldsmithsaleadingandverydistinctiveUKhighereducationinstitution.

TheCollegereliesheavilyuponallofitsstafftorealiseitsobjectives,andIwouldliketotakethisopportunitytorecordmythankstothemallfortheirsupportandendeavouroverthepastyear.SpecialthanksareduetoourindependentmembersofCouncil,whoseadviceandsupporthavebeeninvaluableduringthisperiodofchange.

ProfessorGeoffreyCrossickWarden


Statement of Corporate Governance

and Internal Control


Council,theGoverningBodyoftheCollege,hasresponsibilityformaintainingasoundsystemofinternalcontrolthatsupportstheachievementofitsstrategicaims,whilstsafeguardingthepublicandotherfundsandassetsforwhichitisresponsible.ItdoesthisinaccordancewiththeresponsibilitiesassignedtotheGoverningBodyintheCollege’sStatutesandtheFinancialMemorandumwithHEFCE,andtakingintoaccountgoodpracticeguidancepublishedforuniversitiesandforthepublicsectorgenerally.Thesystemofinternalcontrolisdesignedtomanageratherthaneliminatetheriskoffailuretoachievestrategicaims;itcanthereforeonlyprovidereasonableandnotabsoluteassuranceofeffectiveness.Thesystemisbasedonanongoingprocessdesignedtoidentifytheprincipalriskstotheachievementofpolicies,aimsandobjectives,toevaluatethenatureandextentofthoserisksandtomanagethemefficiently,effectivelyandeconomically.Thisprocesshasbeeninplacefortheyearended31July2009anduptothedateofapprovaloftheFinancialStatements,andaccordswithHEFCEguidance.Councilhasresponsibilityforreviewingtheeffectivenessofthesystemofinternalcontrolandhasestablishedthefollowingprocesses:

•Meetingsatleastthreetimesperyeartoconsider

theplansandstrategicdirectionoftheinstitution;2

•thereceiptofAuditCommitteeMinutes,detailingtheCommittee’soversightofinternalcontrolprocedures,includingreceiptofregularreportsfromtheHeadofInternalAudit;

•thereceiptofreportsfrommanagersconcerningprogressonkeyprojects,includingriskmanagement;

•continuinginitiativestodevelopamorerobustapproachtothemanagementofrisk,mostrecentlythroughtheEffectivenessReviewofCouncil2008-09,tobefollowedupbyanewstructureofriskmanagementarrangementsin2009-10;

•oversightbyAuditCommitteeofissuesrelatedtodataquality;

•asystemofkeyperformanceindicatorsregularlyreviewedbyCouncil;

and

•aConflictsofInterestsPolicywhichdealswiththedeclarationandhandlingofalltypesofconflict,andapublishedregisterofinterests.

OntherecommendationoftheExternalAuditors,AuditCommitteeandCouncilrevisedtheConflictsofInterestsPolicywitheffectfrom1September2009,toensureasufficientlyrigorousapproachtorelatedpartytransactions.

Council’songoingreviewoftheeffectivenessofthesystemofinternalcontrolisinformedbytheinternalauditunit,whichoperatestostandardsdefinedintheHEFCEAuditCodeofPracticeandwhichhasbeenreviewedforeffectivenessbytheHEFCEAuditService.TheinternalauditorssubmitregularreportswhichincludetheHeadofInternalAudit’sindependentOpinionontheadequacyandeffectivenessoftheCollege’ssystemofinternalcontrol,withrecommendationsforimprovement.Itshouldbenotedthatthesereportsareinformedbytheknowledgeandexpertisetheinternalauditorsgainfromtheirworkinotherinstitutions.

Councilisalsoinformedabouttheeffectivenessofthesystemofinternalcontrolbytheworkoftheexecutivemanagerswithintheinstitution,whohaveresponsibilityforthedevelopmentandmaintenanceoftheinternalcontrolframework,andbycommentsmadebytheexternalauditorsintheirmanagementletterandotherreports.

Councilconductsquinquennialreviewsofitsowneffectivenessandcompletedsuchareviewduring2008-09,takingintoaccountbothinternalprioritiesandrecognisedsectoralgoodpracticeguidelines.Thereviewidentifiedanumberofareasforminorenhancementintheconductofbusiness,butnomajordefects.ItgaveparticularattentiontoreviewingtheCollege’scompliancewiththeCUCCodeofPracticeonGovernance.MorespecificareasofgovernanceidentifiedforfuturedetailedreviewweretheStatementofPrimaryResponsibilities,keyperformanceindicators,stakeholdermanagement,riskmanagement,andtheeffectivenessoftherelationshipbetweenCouncilandAcademicBoard.Inaddition,inthelightoftheEffectivenessReviewCouncilmodifieditspreviousposition(December2006)concerningtheCUCrecommendationforfourmeetingsperyear:CouncilhasnowagreedthatafourthmeetingshouldbeheldinthoseyearswherethebusinessoftheCollegegivesaclearrationaleforthis,andthefirstsuchmeetingwasheldinOctober2009.

2 DuringitsDecember2006reviewofcompliancewithCUCCodeofPractice,CouncilgaveexplicitconsiderationtotheCUCCoderecommendation(clause4)toholdfourmeetingsayear.ItconcludedthatinthelightofthesizeandoverallpatternofbusinessoftheCollege,thecurrentconventionofholdingthreemeetingsayearwasnormallysufficient.However,oneoftheoutcomesofthe2008-09EffectivenessReviewofCouncilwasthedecisionthatadditionalmeetingsofCouncil(includingduring2009-10)shouldbeheldasnecessarytodiscussparticularstrategicissuesoutsidethescheduleofroutinebusiness


Independent auditors’ report

to the Council of Goldsmiths,

University of London


WehaveauditedtheFinancialStatementsofGoldsmiths,UniversityofLondon(the“College”)fortheyearended31July2009whichcomprisetheIncomeandExpenditureAccount,theStatementofTotalRecognisedGainsandLosses,theNoteofHistoricalCostSurplusesandDeficits,theCollegeBalanceSheet,theCashFlowStatementandtherelatednotes1to38.TheseFinancialStatementshavebeenpreparedundertheaccountingpoliciessetouttherein.

ThisreportismadesolelytotheCounciloftheCollege,asabody,inaccordancewiththeFinancialMemorandumdatedJune2008.OurauditworkhasbeenundertakensothatwemightstatetotheCouncilthosematterswearerequiredtostatetotheminanauditors’reportandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthantheCouncilandtheCouncil’smembersasabody,forourauditwork,forthisreport,orfortheopinionswehaveformed.

RESPECTIVE RESPONSIBILITIES OF THE COUNCIL

AND AUDITORSTheCouncil’sresponsibilitiesforthepreparingtheAnnualReportandtheFinancialStatementsinaccordancewiththeCollege’sstatute,theStatementofRecommendedPracticeonAccountingforFurtherandHigherEducationandotherapplicablelawandUnitedKingdomaccountingstandards(UnitedKingdomGenerallyAcceptedAccountingPractice)aresetoutinthestatementoftheCouncil’sresponsibilities.

OurresponsibilityistoaudittheFinancialStatementsinaccordancewithrelevantlegalandregulatoryrequirementsandInternationalStandardsonAuditing(UKandIreland).

WereporttoyououropinionastowhethertheFinancialStatementsgiveatrueandfairviewandhavebeenproperlypreparedinaccordancewiththeStatementofRecommendedPracticeonAccountingforFurtherandHigherEducation.Wealsoreportwhetherincomefromfundingbodies,grantsandincomeforspecificpurposesandfromotherrestrictedfundsadministeredbytheCollegehavebeenproperlyappliedonlyforthepurposesforwhichtheywerereceivedandwhetherincomehasbeenappliedinaccordancewiththeStatutesand,whereappropriate,withtheFinancialMemorandumwiththeHigherEducationFundingCouncilforEngland,theTrainingandDevelopmentAgencyforSchoolsandtheLearningandSkillsCouncil.

Wealsoreportif,inouropinion,theinformationgivenintheCouncil’sreportisnotconsistentwiththeFinancialStatements,iftheCollegehasnotkeptadequateaccountingrecords,theaccountingrecordsdonotagreewiththeFinancialStatementsorifwehavenotreceivedalltheinformationandexplanationswerequireforouraudit.

WereadtheotherinformationcontainedintheCouncil’sReport,includingtheCorporateGovernanceStatementandconsiderwhetheritisconsistentwiththeauditedFinancialStatements.WeconsidertheimplicationsforourreportifwebecomeawareofanyapparentmisstatementsormaterialinconsistencieswiththeFinancialStatements.OurresponsibilitiesdonotextendtoanyfurtherinformationoutsidetheAnnualReport.

Wearenotrequiredtoconsiderwhetherthestatementofinternalcontrol(includedaspartoftheCorporateGovernanceStatement)coversallrisksandcontrols,ortoformanopinionontheeffectivenessoftheCollege’scorporategovernanceproceduresoritsriskandcontrolprocedures.

BASIS OF OPINIONWeconductedourauditinaccordancewithInternationalStandardsonAuditing(UKandIreland)issuedbytheAuditingPracticesBoardandtheAuditCodeofPracticeissuedbytheHigherEducationFundingCouncilforEngland.Anauditincludesexamination,onatestbasis,ofevidencerelevanttotheamountsanddisclosuresintheFinancialStatements.ItalsoincludesanassessmentofthesignificantestimatesandjudgementsmadebytheCouncilinthepreparationoftheFinancialStatementsandofwhethertheaccountingpoliciesareappropriatetotheCollege’scircumstances,consistentlyappliedandadequatelydisclosed.

WeplannedandperformedourauditsoastoobtainalltheinformationandexplanationswhichweconsiderednecessaryinordertoprovideuswithsufficientevidencetogivereasonableassurancethattheFinancialStatementsarefreefrommaterialmisstatement,whethercausedbyfraudorotherirregularityorerror.Informingouropinion,wealsoevaluatedtheoveralladequacyofthepresentationofinformationintheFinancialStatements.

OPINIONInouropinion:(a)theFinancialStatementsgiveatrueandfairview

ofthestateofaffairsoftheCollegeasat31July2009andofthesurplusoftheCollegefortheyearthenended;

(b)theFinancialStatementshavebeenproperlypreparedinaccordancewithUnitedKingdomGenerallyAcceptedAccountingPracticeandtheStatementofRecommendedPracticeonAccountingforFurtherandHigherEducationInstitutions;

(c)inallmaterialrespectsincomefromHigherEducationFundingCouncilforEngland,theTrainingandDevelopmentAgencyforSchools,theLearningandSkillsCouncil,grantsandincomeforspecificpurposesandfromotherrestrictedfundsadministeredbytheCollegehavebeenappliedonlyforthepurposesforwhichtheywerereceived;

and

(d)inallmaterialrespectsincomehasbeenappliedinaccordancewiththeCollege’sstatutesand,whereappropriate,withtheFinancialMemorandum,datedJune2008withtheHigherEducationFundingCouncilforEngland,thefundingagreementwiththeTrainingandDevelopmentAgencyforSchoolsandthefundingagreementwiththeLearningandSkillsCouncil.

Deloitte LLPCharteredAccountantsandStatutoryAuditorsStAlbans,UK


Income and Expenditure Accountfor the year ended 31 July 2009

Note 2009 2008 £’000 £’000

INCOME

Fundingbodygrants 2 32,906 32,024Tuitionfeesandsupportgrants 3 28,040 24,708Researchgrantsandcontracts 4 5,582 6,039Otheroperatingincome 5 7,987 8,073Endowmentandinvestmentincome 6 634 1,018

Total Income 75,149 71,862

EXPENDITURE

Staffcosts 7 47,083 42,735Otheroperatingexpenses 9 20,318 20,907Depreciationoftangiblefixedassets 12 3,952 3,919Interestandotherfinancecosts 10 1,864 1,534

Total Expenditure 73,217 69,095

Surplus on continuing operations after depreciation

of tangible fixed assets at valuation and before taxation 1,932 2,767

Taxation 11 - -

Surplus after depreciation of tangible fixed assets

at valuation and taxation 1,932 2,767

Transfer(to)/fromaccumulatedincomewithinspecificendowments (12) 4

Surplus for the year retained within general reserves 1,920 2,771

Note of Historical Cost Surpluses and Deficitsfor the year ended 31 July 2009

Note 2009 2008 £’000 £’000

Surplus on continuing operations after depreciation

of tangible fixed assets at valuation and taxation 1,932 2,767

Differencebetweenhistoricalcostdepreciationcharge

andtheactualdepreciationchargefortheyear

calculatedontherevaluedamount 22 794 790

Historical cost surplus for the period after taxation 2,726 3,557

NoneoftheCollege’smajoractivitieswereacquiredordiscontinuedduringtheabovefinancialyears

Statement of Total Recognised Gains and Lossesfor the year ended 31 July 2009

Note 2009 2008 £’000 £’000

Surplusoncontinuingoperationsafterdepreciation

oftangiblefixedassetsatvaluationandtax 1,932 2,767

Depreciationofendowmentassetinvestment 20 (13) (46)

Newendowmentfund 20 188 483

Actuariallossrecognisedinpensionscheme 31 (6,202) (1,981)

Total recognised (losses)/gains relating to the year (4,095) 1,223

Reconciliation

Openingreservesandendowments 30,309 29,086

Totalrecognised(losses)/gainsfortheyear (4,095) 1,223

Closing reserves and endowments 26,214 30,309


Balance Sheetas at 31 July 2009

Note 2009 2008 £’000 £’000

Fixed Assets

Tangibleassets 12 75,003 71,797Investments 13 28 28 75,031 71,825

Endowment Assets 14 1,978 1,791

Current Assets

Stock 34 36Debtors 15 4,430 5,191Investments - 8,467Cashatbankandinhand 15,993 7,760 20,457 21,454Less:Creditors-amountsfallingduewithinoneyear 16 (14,900) (14,623)

Net current assets 5,557 6,831

Total assets less current liabilities 82,566 80,447

Less:Creditors-amountsfallingdueaftermorethanoneyear 17 (18,835) (18,695)Less:Provisionsforliabilities 18 (1,381) (699)

Total net assets excluding pension liability 62,350 61,053Netpensionliability 31 (15,104) (8,725)

TOTAL NET ASSETS INCLUDING PENSION LIABILITY 47,246 52,328

Represented by:

Deferred capital grants 19 21,032 22,020

Endowments

Expendable 20 230 72Permanent 20 1,748 1,719 1,978 1,791Reserves

IncomeandExpenditureAccountexcludingpensionreserve 14,522 11,631Pensionreserve (15,104) (8,725)IncomeandExpenditureAccountincludingpensionreserve 21 (582) 2,906

Revaluationreserve 22 24,818 25,611 24,236 28,517 TOTAL FUNDS 47,246 52,328

SignedandapprovedonbehalfofCouncilby:

MrMarkBaillache ProfessorGeoffreyCrossick

ChairofFinanceandResourcesCommittee Warden

Date: Reports and Financial Statements 21


Cash Flow Statementfor the year ended 31 July 2009

Note 2009 2008 £’000 £’000

Netcashinflowfromoperatingactivities 25 7,154 6,901

Returnsoninvestmentsandservicingoffinance 26 (754) (493)

Capitalexpenditureandfinancialinvestment 27 (6,646) 941

Managementofliquidresources 28 8,467 (2,357)

Financing 29 211 (274)

Increase in cash in the period 8,432 4,718

Reconciliation of net cash flow to movement in net debt

Increaseincashintheperiod 8,432 4,718

(Decrease)/Increaseinliquidresources (8,467) 2,357

(Increase)/Decreaseinloans (211) 274

Change in net debt (246) 7,349

Openingnetdebtat1August (1,874) (9,223)

Closing netdebtat 31 July (2,120) (1,874)


Notes to the Accounts for the year ended 31 July 2009

1. PRINCIPAL ACCOUNTING POLICIES

BASIS OF PREPARATION ThesefinancialstatementshavebeenpreparedinaccordancewiththeStatementofRecommendedPractice

(SORP):AccountingforFurtherandHigherEducation2007andinaccordancewithapplicableaccounting

standards.Thefinancialstatementsarepreparedinaccordancewiththehistoricalcostconventionmodifiedby

therevaluationofcertainfixedassets.

BASIS OF CONSOLIDATIONTheFinancialStatementsdonotincludethoseoftheStudents’UnionbecausetheCollegedoesnotcontrolthose

activities.TheCollege’ssubsidiary,PureGoldsmithsLtd,hasnotyetbeguntotradeandsonoconsolidationisrequired.

INCOME RECOgNITIONFundingcouncilblockgrantsareaccountedforintheperiodtowhichtheyrelate.

Feeincomeisstatedgrossandcreditedtotheincomeandexpenditureaccountovertheperiodinwhich

studentsarestudying.Wheretheamountofthetuitionfeeisreduced,byadiscountforpromptpayment,income

receivableisshownnetofthediscount.Bursariesandscholarshipsareaccountedforgrossasexpenditureand

notdeductedfromincome.

Recurrentincomefromgrants,contractsandotherservicesrenderedareaccountedforonanaccrualsbasisand

includedtotheextentofthecompletionofthecontractorserviceconcerned;anypaymentsreceivedinadvance

ofsuchperformancearerecognisedonthebalancesheetasliabilities.

Non-recurrentgrantsreceivedinrespectoftheacquisitionorconstructionoffixedassetsaretreatedasdeferred

capitalgrants.Suchgrantsarecreditedtodeferredcapitalgrantsandanannualtransfermadetotheincomeand

expenditureaccountovertheusefuleconomiclifeoftheasset,atthesamerateasthedepreciationchargeon

theassetforwhichthegrantwasawarded.Incomefromthesaleofgoodsorservicesiscreditedtotheincome

andexpenditureaccountwhenthegoodsorservicesaresuppliedtotheexternalcustomersorthetermsofthe

contracthavebeensatisfied.

Increasesordecreasesinvaluearisingontherevaluationordisposalofendowmentassetsietheappreciation

ordepreciationofendowmentassets,isaddedtoorsubtractedfromthefundsconcernedandaccountedfor

throughthebalancesheetbydebitingorcreditingtheendowmentasset,creditingordebitingtheendowment

fundandisreportedinthestatementoftotalrecognisedgainsandlosses.

Donationswithrestrictionsarerecognisedwhenrelevantconditionshavebeenmet;inmanycasesrecognitionis

directlyrelatedtoexpenditureincurredonspecificpurposes.Donationswhicharetoberetainedforthebenefit

oftheCollegearerecognisedinthestatementoftotalrecognisedgainsandlossesandinendowments;other

donationsarerecognisedbyinclusionasotherincomeintheincomeandexpenditureaccount.

Endowmentandinvestmentincomeiscreditedtotheincomeandexpenditureaccountonareceivablebasis.

Incomefromrestrictedendowmentsnotexpendedinaccordancewiththerestrictionsoftheendowment,is

transferredfromtheincomeandexpenditureaccounttorestrictedendowments.Anyrealisedgainsorlossesfrom

dealingintherelatedassetsareretainedwithintheendowmentinthebalancesheet.

Anyincreaseinvaluearisingontherevaluationoffixedassetinvestmentsiscarriedasacredittotherevaluation

reserve,viathestatementoftotalrecognisedgainsandlosses;adiminutioninvalueischargedtotheincomeand

expenditureaccountasadebit,totheextentthatitisnotcoveredbyapreviousrevaluationsurplus.

AgENCy ARRANgEMENTSFundstheinstitutionreceivesanddisbursesaspayingagentonbehalfofafundingbodyareexcludedfrom

theincomeandexpenditureoftheinstitutionwheretheinstitutionisexposedtominimalriskorenjoysminimal

economicbenefitrelatedtothetransaction.

LEASES AND HIRE PURCHASE CONTRACTSCostsinrespectofoperatingleasesarechargedonastraight-linebasisovertheleaseterm.Financeleases,

whichsubstantiallytransferallthebenefitsandrisksofownershipofanassettotheCollege,aretreatedasifthe

assethadbeenpurchasedoutright.Theassetsareincludedinfixedassetsandthecapitalelementsoftheleasing

commitmentsareshownasobligationsunderfinanceleases.Theleaserentalsaretreatedasconsistingofcapital

andinterestelements.Thecapitalelementisappliedinordertoreduceoutstandingobligationsandtheinterest

elementischargedtotheincomeandexpenditureaccountinproportiontothereducingcapitalelement

outstanding.Assetsheldunderfinanceleasesaredepreciatedovertheleaseterm.



TAXATIONTheCollegeisaneducationalcharityincorporatedunderaRoyalChartergrantedon1January1990.Itisanexempt

charitywithinthemeaningofSchedule2oftheCharitiesAct1993andassuchisacharitywithinthemeaningof

Section506(1)oftheIncomeandCorporationTaxesAct1988(ICTA1988).Accordingly,theCollegeispotentially

exemptfromtaxationinrespectofincomeorgainsreceivedwithincategoriescoveredbySection505ofICTA1988

orSection256oftheTaxationofChargeableGainsAct1992,totheextentthatsuchincomeorgainsareappliedto

exclusivelycharitablepurposes.TheCollegereceivesnosimilarexemptioninrespectofValueAddedTax.

Inregardtoincomefromresearchandconsultancyandfromnon-studentlettingsandassociatedincome,the

CollegehasappliedtheInlandRevenueguidelinesandhasconsideredthatthelevelofactivityineachofthose

areasdoesnotconstituteatradeandsowillnotgiverisetoachargetotax.Accordingly,noprovisionhasbeen

madeintheAccountsfortaxation.

TANgIBLE FIXED ASSETS InaccordancewiththetransitionalarrangementsofFRS15,alllandandbuildingsexistingat31July1993and

revaluedat31July1994byFrankDurrantWestmoreandReeves,CharteredSurveyors,willberetainedatthose

valuesascost.PropertiesusedforeducationalandhostelpurposeshavebeenvaluedontheDepreciated

ReplacementCostbasisandresidentialpropertiesonthebasisofOpenMarketValueForExistingUse.

Subsequentadditionssince1994arestatedatcost.

Allplantandequipmentbelowaninitialcostof£15,000perindividualitemorgroupofrelateditemshavebeen

expensedintheyearofacquisition.Plantandequipmentcosting£15,000andoverarecapitalisedandwrittenoff

overtheirusefullivesasindicatedinthedepreciationtablebelow.

Wherefixedassetsareacquiredwiththeaidofspecificgrants,theyarecapitalisedanddepreciatedaccordingto

thecategoriesinwhichtheyfall.Therelatedgrantsaretreatedasdeferredcapitalgrantsandreleasedtoincome

overtheirexpectedusefullives.Fixedassetsinthecourseofconstructionarenotdepreciateduntiltheiryear

ofcompletion.

Depreciationisprovidedoncostorvaluationonastraight-linebasissoastowriteofftheassetsovertheir

estimatedusefullives.Theratesofdepreciationusedareasfollows:

Land and Buildings Per Fixtures, Fittings Per Annum and Equipment AnnumFreehold

Land NIL Librarystacks 10%

Buildings(long-term) 2.5% Administrativecomputersystems 20%

Buildings(short-termrefurbishments) 10% Otherplantandequipment 33.33%

Buildings(long-termrefurbishments) 5%

Leasehold

Assetheldunderfinancelease 4%

Worksofartandothervaluableartefactsarenotcapitalisedbecausetheyarenotofmaterialvalue.TheCollege

hasnoheritageassets.

REPAIRS AND MAINTENANCEExpendituretoensurethatatangiblefixedassetmaintainsitspreviouslyrecognisedstandardofperformance

isrecognisedintheincomeandexpenditureaccountintheperioditisincurred.TheCollegehasaplanned

maintenanceprogramme,whichisreviewedonanannualbasis.

INVESTMENTSFixedAssetInvestmentsandEndowmentAssetInvestmentsareshownatmarketvaluewhereknown.Endowment

andrestrictedfundsheldontemporarydepositoronshort-termmoneymarketformpartoftheliquidfunds.

Thesefundsareshownascapitalcontributedplusnetaccumulatedinterest.

STOCkStockisstatedattheloweroftheircostandnetrealisablevalue.Wherenecessary,provisionismadefor

obsolete,slow-movinganddefectivestocks.



CASH FLOwS AND LIQUID RESOURCESCashflowscompriseincreasesordecreasesincash.Cashincludescashinhand,cashatbank,anddeposits

repayableondemand.Depositsarerepayableondemandiftheyareavailablewithin24hourswithoutpenalty.

Nootherinvestments,howeverliquid,areincludedascash.Liquidresourcescompriseassetsheldasreadily

disposablestoreofvalue.Theyincludetermdeposits,governmentsecuritiesandloanstockheldaspartofthe

College’streasurymanagementactivities.

FOREIgN CURRENCy TRANSLATIONSAssetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedattheratesofexchangerulingattheend

ofthefinancialyear,withallresultingexchangedifferencesbeingtakentotheincomeandexpenditureaccountin

theperiodinwhichtheyarise.

ACCOUNTINg FOR CHARITABLE DONATIONSUnrestricted donationsCharitabledonationsarerecognisedintheaccountswhenthecharitabledonationhasbeenreceivedorif,before

receipt,thereissufficientevidencetoprovidethenecessarycertaintythatthedonationwillbereceivedandthe

valueoftheincomingresourcescanbemeasuredwithsufficientreliability.

Endowment fundsWherecharitabledonationsaretoberetainedforthebenefitoftheCollegeasspecifiedbytheDonors,theseare

accountedforasendowments.Therearethreemaintypes:

1. Unrestrictedpermanentendowments-thedonorhasspecifiedthatthefundistobepermanentlyinvestedto

generateanincomestreamforthegeneralbenefitoftheCollege;

2.Restrictedexpendableendowments-thedonorhasspecifiedaparticularobjectiveotherthanthepurchaseor

constructionoftangiblefixedassets,andtheCollegecanconvertthedonatedsumintoincome;

3.Restrictedpermanentendowments-thedonorhasspecifiedthatthefundistobepermanentlyinvestedto

generateanincomestreamtobeappliedtoaparticularobjective.

PENSIONSThetwopensionschemesinwhichtheCollegeparticipatesaretheUniversitiesSuperannuationScheme(USS)

foracademicandacademic-relatedstaffandtheLondonPensionFundAuthority(LPFA)forotheradministrative,

technical,clericalandmanualstaff.Bothschemesaredefinedbenefitschemeswhichareexternallyfundedand

contractedoutoftheStateSecondPension(S2P).

Theliabilitiesarevaluedeverythreeyearsbyactuariesusingtheprojectedunitmethod,theratesofcontribution

payablebeingdeterminedbythetrusteesontheadviceoftheactuaries.Intheinterveningyearsactuariesreview

theprogressoftheschemes.Pensioncostsareassessedinaccordancewithadviceoftheactuaries,basedonthe

latestactuarialvaluationsoftheschemes.

TheCollegeaccountsforpensionschemecostsinaccordancewithFRS17‘RetirementBenefits’.UnderFRS17

thenetpensionfundassetorliabilityfortheLPFAschemeisdisclosedontheBalanceSheetandthemovement

onthescheme’snetassets/liabilitiesintheyearisreflectedpartlythroughtheIncomeandExpenditureAccount

(totheextenttheyrelatetocurrentservicecostsandtheexpectedreturnonschemeassetslessinterestcharges

onschemeliabilities)andpartlythroughtheStatementofTotalRecognisedGainsandLosses(totheextentthey

relatetochangesintheactuarialassumptions).

TheCollegeisunabletoidentifyitsshareoftheunderlyingassetsandliabilitiesintheUSSschemeona

consistentandreasonablebasisandthereforeasrequiredbyFRS17‘RetirementBenefits’,accountsfor

theschemeasifitwereadefinedcontributionscheme.Asaresult,theamountchargedtotheIncomeand

Expenditureaccountrepresentsthecontributionspayabletotheschemeinrespectoftheaccountingperiod.

Theannualemployers’pensioncontributionsbornebytheCollegeareincludedinsalarycostschargedtothe

variousheadsofexpenditure.FurtherdetailsoftheschemesaregiveninNote31totheAccounts.Costsrelating

toprematureretirement,restructuringandunfundedpensionsaretreatedasadditionalsalarycosts.

PROVISIONSProvisionsarerecognisedinthefinancialstatementswhentheCollegehasapresentobligation

(legalorconstructive)asaresultofapastevent,itisprobablethatatransferofeconomicbenefitswillbe

requiredtosettletheobligationandareliableestimatecanbemadeoftheamountoftheobligation.


2009 2008 £’000 £’000

2. FUNDING BODY GRANTS Recurrent grants

HigherEducationFundingCouncil 26,695 25,339TeacherDevelopmentAgency 3,362 3,405LearningandSkillsCouncil 198 280

Specific grants

HigherEducationFundingCouncil 1,157 952TeacherDevelopmentAgency 194 512LearningandSkillsCouncil - 2

Deferred capital grants released in year

Buildings(note19) 1,010 1,046Equipment(note19) 290 488

32,906 32,024

3. TUITION FEES AND SUPPORT GRANTS Full-timeHomeandEUstudentfees 16,969 13,897Internationalstudentfees 8,714 8,518Part-timestudentfees 1,846 1,819Shortcoursefees 349 363Researchtrainingsupportgrants 162 111

28,040 24,708

FeesfundedthroughtheUnitedStatesFamilyEducationLoanProgramme

amountedto£821kandrepresented3.21%oftotalfull-timefees.

4. RESEARCH GRANTS AND CONTRACTS ResearchCouncils 2,643 2,771UK-basedcharities 785 1,511Othergrantsandcontracts 2,154 1,757

5,582 6,039



2009 2008 £’000 £’000

5. OTHER OPERATING INCOME

Residences,CateringandConferences 5,787 5,527Otherservicesrendered 802 926Otherincome 1,398 1,620

7,987 8,073

6. ENDOWMENT AND INVESTMENT INCOMEIncomefromexpendableendowments(note20) 11 1Incomefrompermanentendowments(note20) 59 70Otherinterestreceivable 564 947

634 1,018

7. STAFF COSTS

Theaverageweeklynumberofpersons(includingseniorpost-holders)

employedbytheCollegeduringtheperiod,expressedasfull-time

equivalents,was:

Number Number

Teachingandresearch 454 456

Administrative 353 362Other 117 123

924 941 £’000 £’000

Salariesandwages 38,334 34,801Socialsecuritycosts 3,447 2,962Otherpensioncosts(note31) 4,768 4,376Restructuringcosts 534 596

47,083 42,735

Academicdepartments 28,495 25,124Academicservices 2,924 2,854Researchgrantsandcontracts 2,990 3,077Residences,CateringandConferences 688 681Premises 2,454 2,281Administration 8,085 6,846Generaleducational 699 688Otherservicesrendered 527 458Other 221 726

47,083 42,735


Notes to the Accounts for the year ended 31 July 2009 2009 2008 £’000 £’000

8. REMUNERATION OF DIRECTORS

AND HIGHER PAID EMPLOYEES

TheemolumentsoftheWarden’spostwere: Remuneration 212 194USSpensioncontributions(paidatthesameratesasforotheracademicstaff) 30 26

242 220Remunerationofotherhigherpaidstaff,excludingemployer’s Number Number

pensioncontributions,fallinthefollowingband:

£100,000-£109,999 1 1

9. OTHER OPERATING EXPENSES £’000 £’000

Academicdepartments 3,019 3,192Academicservices 1,564 1,264Researchgrantsandcontracts 1,276 1,766Residences,CateringandConferences 3,043 3,131Premises 4,498 4,900Administration 3,606 3,433Generaleducational 3,204 2,871Otherservicesrendered 108 350

Total 20,318 20,907

Otheroperatingexpensesinclude:

Externalauditors’remunerationinrespectoftheauditoftheFinancialStatements 47 47Externalauditors’remunerationinrespectofotherauditservices 7 7Externalauditors’remunerationinrespectofnon-auditservices(tax) 26 5Internalauditors’remunerationinrespectofauditservices 79 83Operatingleases(property) 612 590

10. INTEREST AND OTHER FINANCE COSTS Loansnotwhollyrepayablewithinfiveyears 413 525Financeleases 975 986NetinterestonLPFApensionschemeliabilities(note31) 476 23

1,864 1,534

11. TAXATION ThecharitablestatusoftheCollegeandtheapplicationoftheInlandRevenueguidelinestoitsother

quasi-commercialactivitiesdonotrendertheCollegeliabletoCorporationTax.Accordinglynoprovision

hasbeenmadefortaxation.




12. TANGIBLE ASSETS

Land & Buildings Fixtures Assets in Total Freehold Assets held Fittings & course of under finance Equipment construction leases £’000 £’000 £’000 £’000 £’000

Valuation/cost

At1August2008

Valuation 44,350 - - - 44,350Cost 44,055 10,404 5,855 1,256 61,570

Additionsatcost 1,028 - 447 5,683 7,158Transfers 228 - 26 (254) -Disposals (869) - - - (869)

At 31 July 2009

Valuation 44,350 - - - 44,350 Cost 44,442 10,404 6,328 6,685 67,859

Total 88,792 10,404 6,328 6,685 112,209

Depreciation

At1August2008 24,519 4,577 5,027 - 34,123Chargeforyear 2,883 417 652 - 3,952Disposals (869) - - - (869)

At 31 July 2009 26,533 4,994 5,679 - 37,206

Net book value

At 31 July 2009 62,259 5,410 649 6,685 75,003

At 1 August 2008 63,886 5,827 828 1,256 71,797

AvaluationoftheCollege’slandandbuildingswasmadein1994anddetailsofthemethodofvaluationwiththe

nameandqualificationsofthevalueraregiveninAccountingPolicies(note1).Thehistoriccostoftheproperties

valuedin1994is£7,587k.

2009 2008 £’000 £’000

13. INVESTMENTS Investmentsareshownatcostandrepresent27,782ordinaryshares,fullypaid,

inCVCPPropertiesplcand240£1sharesini2MediaLtd. 28 28

TheCollegehasonesubsidiarycompany,PureGoldsmithsLtd.Thiscompany

wasdormantat31July2009andatthatdatehadissuedsharecapitalofone

ordinaryshareat£1.



2009 2008 £’000 £’000

14. ENDOWMENT ASSET INVESTMENTS Balanceat1August 1,791 1,358Additions 200 479Depreciationinmarketvalue (13) (46)

Balanceat31July 1,978 1,791

Representedby:

UKEquities 861 873Cashbalances 1,117 918

1,978 1,791

15. DEBTORS Amountsfallingduewithinoneyear

Studentdebtors 1,031 1,656Otherdebtors 1,462 2,132Prepaymentsandaccruedincome 1,893 1,391

4,386 5,179Otherdebtors-amountsfallingdueaftermorethanoneyear 44 12

4,430 5,191

16. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Mortgagesandunsecuredloans 168 153Obligationsunderfinanceleases(note23) 227 171Tradecreditors 6,105 4,437Socialsecurityandothertaxationpayable 1,110 1,013Accrualsanddeferredincome 7,290 8,849

14,900 14,623

17. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Unsecuredloansandmortgagesecuredonresidentialproperty 8,611 8,237Obligationsunderfinanceleases(note23) 10,224 10,458

18,835 18,695

A25yearmortgagetakenoutinMarch1996withCapitalBankplc(partoftheBankofScotland)onRaymont

HallwasrepaidinJune2009.Theaveragerateofinterestpaidintheyearwas5%.

A30yearloanfromLloydsTSBplcwastakenoutinDecember2006atafixedinterestrateof4.995%forthe

acquisitionofthefreeholdsofSurreyHouseandChestermanHouse.Afurtheradvanceof£2,150kwasmadein

June2009topartfinancetheconstructionoftheNewAcademicBuilding.Thetermoftheloanis28yearswith

interestchargeableat0.2%abovebaserate.

ThesefacilitieshavebeenprovidedunsecuredsubjecttotheCollegeprovidinganegativepledgeoverallassets.




2009 2008 £’000 £’000

18. PROVISIONS FOR LIABILITIES Staff pensions and re-grading

At1August 699 255Utilisedinyear (97) (101)ChargedtotheIncomeandExpenditureAccount 779 545

At31July 1,381 699

Theprovisionismainlyforprobableclaimsunderthenewpayframeworkagreementand

hasbeencalculatedusingtheaveragesettlementpercentageforstaffwhohavealreadybeen

paidarrears.Thisprovisionhasbeenincreasedtotakeaccountofthecostoftransferring

hourlypaidstafftofractionalposts.Weexpectthemajorityoftheexpendituretobe

incurredinthenexttwoyears.

19. DEFERRED CAPITAL GRANTS FROM FUNDING COUNCILS At 1 August:

Buildings 21,537 16,271Equipment 483 640 Total 22,020 16,911

Cash received:

Buildings 312 6,312Equipment - 331Total 312 6,643

Released to Income and Expenditure Account:

Buildingsdepreciation(note2) 1,010 1,046Equipmentdepreciation(note2) 290 488Total 1,300 1,534

At 31 July:

Buildings 20,839 21,537Equipment 193 483Total 21,032 22,020



2009 2008 Restricted Restricted Restricted Restricted Expendable Permanent Total Total £000 £000 £000 £000

20. ENDOWMENTS

At1August

Capital 72 1,669 1,741 1,344Accumulatedincome - 50 50 14 72 1,719 1,791 1,358Incomeforyear(note6) 11 59 70 71Expenditure (34) (24) (58) (75)Newfunds 181 7 188 483Decreaseinmarketvalueofinvestments - (13) (13) (46)

At 31 July 230 1,748 1,978 1,791

Represented by:

Capital 1,880 1,740Accumulatedincome 98 51

1,978 1,791

2009 2008

£’000 £’000

21. INCOME AND EXPENDITURE ACCOUNT

Balanceat1August 2,906 1,326Releasesfromrevaluationreserve(note22) 794 790Surplusafterdepreciationofassetsatvaluationandtax 1,920 2,771ActuariallossonLPFApensionscheme(note31) (6,202) (1,981)

(582) 2,906

22. REVALUATION RESERVE

Landandbuildingsat1August 25,612 26,401Contributionstodepreciation(note21) (794) (790)

As at 31 July 24,818 25,611



2009 2008 £’000 £’000

23. LEASE OBLIGATIONS

Obligationsunderfinanceleasesfalldueasfollows:

Betweentwoandfiveyears 1,599 1,306Overfiveyears 8,625 9,152

Theanalysisfor2008hasbeenamendedforconsistencywiththe2009analysis

Totaloveroneyear(note17) 10,224 10,458Withinoneyear(note16) 227 171

Total 10,451 10,629

Operatingleasecommitmentsfortheforthcoming

financialyearareasfollows:

Landandbuildings-leasesexpiringafter5years 627 612

627 612

24. CAPITAL COMMITMENTS

Commitmentscontractedasat31July 17,763 125Authorisedbutnotcontractedasat31July 3,666 19,676(TobepartiallyfundedbyHEFCEcapitalgrantof£9.1m)

21,429 19,801

25. RECONCILIATION OF OPERATING SURPLUS TO

NET CASH FROM OPERATIONS

Surplusfortheyear 1,920 2,771Pensioncostslesscontributionspayable 177 153Depreciation 3,952 3,919Contributiontodepreciationfromcapitalgrants (1,300) (1,534)Investmentincome (634) (1,018)Loaninterestpaid 1,388 1,511Decreaseinstock 2 46Decrease/(increase)indebtors 761 (1,041)Increaseincreditors 206 1,650Increaseinprovisions 682 444

Net cash inflow from operations 7,154 6,901



2009 2008 £’000 £’000

26. RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Incomefromendowmentsandspecificfunds(note6) 70 71Otherinterestreceivable(note6) 564 947Interestpaid(note10) (1,388) (1,511)

(754) (493)

27. CAPITAL EXPENDITURE AND FINANCIAL INVESTMENTS Paymentstoacquiretangiblefixedassets (7,158) (6,006)Deferredcapitalgrantsreceived(note19) 312 6,643Endowmentandspecificfundadditionsandincome 200 304

(6,646) 941

28. MANAGEMENT OF LIqUID RESOURCES Paymentsfrom/(to)shorttermdeposits 8,467 (2,357)

8,467 (2,357)

29. FINANCING Newloanandexistingloanredemptions 382 (153)Capitalelementoffinanceleasecapital (171) (121)

211 (274)

At 1 August Cash Other At 31 July 2008 Flow Changes 2009 £’000 £’000 £’000 £’000

30. ANALYSIS OF CHANGES IN NET DEBT Cashatbankandinhand

EndowmentAssetInvestment 918 199 - 1,117 Other 7,760 8,233 - 15,993CurrentAssetInvestments 8,467 (8,467) - -

Debtsduewithinoneyear (324) 324 (395) (395)Debtsdueaftermorethanoneyear (18,695) (535) 395 (18,835)

(1,874) (246) - (2,120)



31. PENSION SCHEMES ThetwoprincipalpensionschemesfortheCollege’sstaffaretheUniversitiesSuperannuationScheme(USS)and

theLondonPensionFundAuthority(LPFA).Theassetsoftheschemesareheldinseparatetrustee-administered

funds.Theschemesaredefinedbenefitschemeswhichareexternallyfundedandarevaluedeverythreeyearsby

actuariesusingtheprojectedunitmethod,theratesofcontributionpayablebeingdeterminedbythetrusteeson

theadviceoftheactuaries.

University Superannuation SchemeTheCollegeparticipatesintheUniversitiesSuperannuationScheme(USS),adefinedbenefitsschemewhich

iscontractedoutoftheStateSecondPension(S2P).Theassetsoftheschemeareheldinaseparatefund

administeredbythetrustee,UniversitiesSuperannuationSchemeLtd.USShasover130,000activemembersand

theCollegehas675activemembersparticipatinginthescheme.

Theappointmentofdirectorstotheboardofthetrusteesisdeterminedbythecompany’sArticlesofAssociation.

FourofthedirectorsareappointedbyUniversitiesUK;threeareappointedbytheUniversityandCollegeUnion,

ofwhomatleastonemustbeaUSSpensionermember;oneisappointedbytheHigherEducationFunding

Councils;andaminimumoftwoandamaximumoffourareco-opteddirectorsappointedbytheboard.Under

theschemetrustdeedandrules,theemployercontributionrateisdeterminedbythetrustee,actingon

actuarialadvice.

Becauseofthemutualnatureofthescheme,theCollegeisunabletoidentifyitsshareoftheunderlying

assetsandliabilitiesoftheschemeonaconsistentandreasonablebasisandtherefore,asrequiredbyFRS

17‘Retirementbenefits’,accountsfortheschemeasifitwereadefinedcontributionscheme.Asaresult,the

amountchargedtotheincomeandexpenditureaccountrepresentsthecontributionspayabletotheschemein

respectoftheaccountingperiod.

Thelatestactuarialvaluationoftheschemewasat31March2008.ThiswasthefirstvaluationforUSSunderthe

newscheme-specificfundingregimeintroducedbythePensionsAct2004,whichrequiresschemestoadopta

statutoryfundingobjective,whichistohavesufficientandappropriateassetstocovertheirtechnicalprovisions.

Thevaluationwascarriedoutusingtheprojectedunitmethod.Theassumptionswhichhavethemostsignificant

effectontheresultofthevaluationarethoserelatingtotherateofreturnoninvestments(ie,thevaluation

rateofinterest),theratesofincreaseinsalaryandpensionsandtheassumedratesofmortality.Thefinancial

assumptionswerederivedfrommarketyieldsprevailingatthevaluationdate.An‘inflationriskpremium’

adjustmentwasalsoincludedbydeducting0.3%fromthemarket-impliedinflationonaccountofthehistorically

highlevelofinflationimpliedbygovernmentbonds(particularlywhencomparedtotheBankofEngland’starget

of2%forCPIwhichcorrespondsbroadlyto2.75%forRPIperannum).

Tocalculatethetechnicalprovisions,itwasassumedthatthevaluationrateofinterestwouldbe6.4%perannum

(whichincludesanadditionalassumedinvestmentreturnovergiltsof2%perannum),salaryincreaseswould

be4.3%perannum(plusanadditionalallowanceforincreasesinsalariesduetoageandpromotionreflecting

historicSchemeexperience,withafurthercautionaryreserveontopforpastserviceliabilities)andpensions

wouldincreaseby3.3%perannum.

Standardmortalitytableswereusedasfollows:

Malemembers’mortality PA92MCYoBtables-rateddown1year

Femalemembers’mortality PA92MCYoBtables-Noagerating

UseofthesemortalitytablesreasonablyreflectstheactualUSSexperiencebutalsoprovidesanelementof

conservatismtoallowforfurthersmallimprovementsinmortalityrates.Theassumedlifeexpectationson

retirementatage65are:

Males(females)currentlyaged65 22.8(24.8)years

Males(females)currentlyaged45 24.0(25.9)years



31. PENSION SCHEMES (CONTINUED)

Atthevaluationdate,thevalueoftheassetsoftheschemewas£28,842.6millionandthevalueofthescheme’s

technicalprovisionswas£28,135.3millionindicatingasurplusof£707.3million.Theassetsthereforewere

sufficienttocover103%ofthebenefitswhichhadaccruedtomembersafterallowingforexpectedfuture

increasesinearnings.

Theactuaryalsovaluedtheschemeonanumberofotherbasesasatthevaluationdate.Onthescheme’s

historicgiltsbasis,usingavaluationrateofinterestinrespectofpastserviceliabilitiesof4.4%perannum(the

expectedreturnongilts)thefundinglevelwasapproximately71%.UnderthePensionProtectionFundregulations

introducedbythePensionsAct2004itwas107%funded;onabuy-outbasis(ie,assumingtheSchemehad

discontinuedonthevaluationdate)theassetswouldhavebeenapproximately79%oftheamountnecessary

tosecurealltheUSSbenefitswithaninsurancecompany;andusingtheFRS17formulaasifUSSwasasingle

employerscheme;usingaAAbonddiscountrateof6.5%perannumbasedonspotyields,theactuaryestimated

thatthefundinglevelat31March2008was104%.

Thetechnicalprovisionsrelateessentiallytothepastserviceliabilitiesandfundinglevels,butitisalsonecessary

toassesstheongoingcostofnewlyaccruingbenefits.Thecostoffutureaccrualwascalculatedusingthesame

assumptionsasthoseusedtocalculatethetechnicalprovisionsexceptthatthevaluationrateofinterestassumed

assetoutperformanceovergiltsof1.7%perannum(comparedto2%perannumforthetechnicalprovisions)

givingadiscountrateof6.1%perannum;alsotheallowanceforpromotionalsalaryincreasewasnotashigh.

Thereiscurrentlyuncertaintyinthesectorregardingpaygrowth.Analysishasshownveryvariablelevelsof

growthoverandabovegeneralpayincreasesinrecentyears,andthesalarygrowthassumptionbuiltintothe

costoffutureaccrualisbasedonmorestable,historic,salaryexperience.However,whencalculatingthepast

serviceliabilitiesofthescheme,acautionaryreservehasbeenincluded,inaddition,onaccountofthevariability

mentionedabove.

Theinstitutioncontributionraterequiredforfutureservicebenefitsaloneatthedateofthevaluationwas16%

ofpensionablesalariesbutthetrusteecompany,ontheadviceoftheactuary,agreedtoincreasetheCollege

contributionrateto16%ofpensionablesalariesfrom1October2009.

Since31March2008globalinvestmentmarketshavecontinuedtofallandat31March2009theactuaryhas

estimatedthatthefundinglevelunderthenewschemespecificfundingregimehadfallenfrom103%to74%.

Thisestimateisbasedonthefundinglevelat31March2008,adjustedtoreflectthefund’sactualinvestment

performanceovertheyearandchangesinmarketconditions(marketconditionsaffectboththevaluationrateof

interestandalsotheinflationassumptionwhichinturnimpactsonthesalaryandpensionincreaseassumptions).

OntheFRS17basis,usingaAAbonddiscountrateof7.1%perannumbasedonspotyields,theactuaryestimated

thatthefundinglevelat31March2009was86%.Anestimateofthefundinglevelmeasuredonabuy-outbasisat

thatdatewasapproximately46%.

SurplusesordeficitswhichariseatfuturevaluationsmayimpactontheCollege’sfuturecontribution

commitment.Adeficitmayrequireadditionalfundingintheformofhighercontributionrequirements,where

asurpluscould,perhaps,beusedtosimilarlyreducecontributionrequirements.Thesensitivitiesregardingthe

principalassumptionsusedtomeasuretheschemeliabilitiesaresetoutbelow:




Assumption Change in Assumption Impact on scheme liabilitiesValuationrateofinterest Increase/decreaseby0.5% Decrease/increaseby£2.2billion

Rateofpensionincreases Increase/decreaseby0.5% Increase/decreaseby£1.5billion

Rateofsalarygrowth Increase/decreaseby0.5% Increase/decreaseby£0.7billion

Rateofmortality Moreprudentassumption Increaseby£1.6billion

(movetolongcohortfuture

improvementsfromthemedium

cohortadoptedatthevaluation)

USSisa‘lastmanstanding’schemesothatintheeventoftheinsolvencyofanyoftheparticipatingemployers

inUSS,theamountofanypensionfundingshortfall(whichcannototherwiseberecovered)inrespectofthat

employerwillbespreadacrosstheremainingparticipantemployersandreflectedinthenextactuarialvaluation

ofthescheme.

Thetrusteebelievesthatoverthelong-termequityinvestmentandinvestmentinselectedalternativeasset

classeswillprovidesuperiorreturnstootherinvestmentclasses.Themanagementstructureandtargetssetare

designedtogivethefundabiastowardsequitiesthroughportfoliosthatarediversifiedbothgeographicallyand

bysector.Thetrusteerecognisesthatitwouldbepossibletoselectinvestmentsproducingincomeflowsbroadly

similartotheestimatedliabilitycashflows.However,inordertomeetthelong-termfundingobjectivewithina

levelofcontributionsthatitconsiderstheemployerswouldbewillingtomake,thetrusteehasagreedtotakeon

adegreeofinvestmentriskrelativetotheliabilities.Thistakingofinvestmentriskseekstotargetagreaterreturn

thanthematchingassetswouldprovidewhilstmaintainingaprudentapproachtomeetingthefund’sliabilities.

Beforedecidingtotakeinvestmentriskrelativetotheliabilities,thetrusteereceivesadvicefromitsinvestment

consultantandtheschemeactuary,andconsiderstheviewsoftheemployers.Thestrongpositivecashflowof

theschememeansthatitisnotnecessarytorealiseinvestmentstomeetliabilities.Thetrusteebelievesthatthis,

togetherwiththeongoingflowofnewentrantsintotheschemeandthestrengthofcovenantoftheemployers

enablesittotakealong-termviewofitsinvestments.Short-termvolatilityofreturnscanbetoleratedandneed

notfeedthroughdirectlytothecontributionrate.Theactuaryhasconfirmedthatthescheme’scashflowislike

toremainpositiveforthenexttenyearsormore.

Thenextformaltriennialactuarialvaluationisdueasat31March2011.Thecontributionratewillbereviewedas

partofeachvaluationandmaybereviewedmorefrequently.

ThetotalpensioncostfortheCollegewas£3,679k(2008:£3,200k).Thisincludes£459k(2008:£410k)

outstandingcontributionsatthebalancesheetdate.ThecontributionratepayablebytheCollegeintheyearto

31July2009was14%ofpensionablesalaries.

London Pension Fund Superannuation Scheme TheLondonPensionFundSuperannuationSchemeisvaluedeverythreeyearsbyaprofessionallyqualified

independentactuaryusingtheprojectedunitcreditmethod,therateofcontributionpayablebeingdetermined

bytheactuary.Thelatestformalvaluationofthefundwasat31March2007,withthenextformalvaluation

dueasat31March2010.InaccordancewithFinancialReportingStandard(‘FRS’)17,theactuarialvaluationat

31July2008hasbeenreviewedandupdatedasat31July2009basedupontheannualfinancialassumptions

shownbelow:

Theassumedlifeexpectationsfromage65are:

Males Females Retiringtoday 19.6years 22.5yearsRetiringin20years 20.7years 23.6years

2009 2008 Priceincreases 3.6% 3.8%Salaryincreases 5.1% 5.3%Pensionincreases 3.6% 3.8%Discountrate 6.0% 6.7%




Theemployer’spensionfundassetsandexpectedrateof

returnasat31Julyareasfollows:

Expected rate Fair value as at: of return

2009 2008 2009 2008

% per % per £’000 £’000

annum annum

Equities 7.5% 7.6% 13,503 11,8651TargetReturnPortfolio 6.2% 6.3% 2,039 3,979AlternativeAssets 6.7% 6.8% 2,910 4,515Cash 3.0% 4.8% 1,346 (78)

Total (weighted average) 6.9% 7.2% Total 19,798 20,281

ThefollowingresultsweremeasuredinaccordancewiththerequirementsofFRS17,basedontheassumptions

summarisedabove.

Present value of Fair value of Net liability defined benefit scheme assets recognised in obligation the balance sheet

2009 2008 2009 2008 2009 2008

£’000 £’000 £’000 £’000 £’000 £’000

Opening (29,006) (28,742) 20,281 22,151 (8,725) (6,591)Currentservicecost (1,089) (854) - - (1,089) (854)Interestcost (1,962) (1,680) - - (1,962) (1,680)Contributionsbymembers (471) (337) 471 337 - -Actuarialgain/(loss) (3,385) 1,856 (2,817) (3,837) (6,202) (1,981)Pastservicecost - (288) - - - (288)Impactofsettlementsandcurtailments - (34) - - - (34)Contributionsbyemployer - - 1,388 1,022 1,388 1,022Contributions-unfundedbenefits (24) - 24 24 - 24Expectedreturnonassets - - 1,486 1,657 1,486 1,657Estimatedunfundedbenefitspaid 24 24 (24) (24) - -Estimatedbenefitspaid 1,011 1,049 (1,011) (1,049) - -

Closing defined benefit obligation (34,902) (29,006) 19,798 20,281 (15,104) (8,725)


Notes to the Accounts for the year ended 31 July 2009 2009 2008 £’000 £’000


Analysis of the amount charged to staff costs within the operating surplus

Currentservicecost 1,089 854Pastservicecost - 288Curtailmentsandsettlements - 34

Total operating charge 1,089 1,176

Analysis of the amount that is charged to interest payable

Expectedreturnonpensionschemeassets 1,486 1,657Interestonpensionschemeliabilities (1,962) (1,680)

Net charge (476) (23)

2009 2008 2007 2006 2005

£’000 £’000 £’000 £’000 £’000Amount recognised in Statement of

Total Recognised Gains and Losses (STRGL)Cumulativeactuarialgains/(losses)at1August 566 2,547 (564) (351) (38)Actuarial(losses)/gainsrecognisedinSTRGL (6,202) (1,981) 3,111 (213) (313)

Cumulative actuarial gains/(losses) at 31 July (5,636) 566 2,547 (564) (351)

TheCollege’scontributionfornon-academicstaffasapercentageofpensionablesalarieswas19.8%fromApril

2008.Thepensionchargefortheyearto31July2009was£1,089k,(2008:£1,176k).

2009 2008 £’000 £’000

32. HARDSHIP FUNDS Balanceat1August 33 38HEFCEgrantreceived 206 273Interestearned 3 6Disbursedtostudentsandadministration (226) (284)

Underspent at 31 July 16 33

33. TDA TRAINING BURSARIES

Balanceat1August 186 415Grantreceived 2,797 3,173Paymentstotrainees (2,905) (3,402)




2009 2008 £’000 £’000

34. TDA SECONDARY SHORTAGE SUBJECT SCHEME Balanceat1August 3 -Grantrepaid (3) 30Paymentstotrainees - (27)

Underspent at 31 July - 3

Fundingbodygrantsshowninnotes32-34areavailablesolelyforstudents,theCollegeactsonlyas

apayingagent.ThegrantsandrelateddisbursementsarethereforeexcludedfromtheIncomeand

ExpenditureAccount.Thebalanceat31JulyisincludedinCreditors.

35. TDA MINORITY ETHNIC RECRUITMENT (MAINSTREAM) Balanceat1August 18 16Grantreceived 13 19Expenditure (19) (17)


36. TDA MINORITY ETHNIC RECRUITMENT (EBITT) Balanceat1August 17 -Grantreceived - 18Expenditure (13) (1)


37. STUDENT ASSOCIATE SCHEME Balanceat1August 68 54Grantreceived 70 89Expenditure (81) (75)


38. RELATED PARTY TRANSACTIONS DuetothenatureoftheCollege’soperationsandthecompositionoftheCouncil(beingdrawnfromlocalpublicandprivate

sectororganisations)itispossiblethattransactionstakeplacewithorganisationsinwhichamemberofCounciloramemberof

staffmayhaveaninterest.TherearenotransactionsofwhichtheCollegeisawarebutanysuchtransactionsthatmayarisewould

beconductedatarm’slengthandinaccordancewiththeCollege’sConflictsofInterestPolicy.

goldsmiths, University of LondonNew Cross London SE14 6NwT 020 7919 7171 www.goldsmiths.ac.uk

Reports and Financial Statements - Goldsmiths, … · Reports and Financial Statements ... Ms Jess...

Documents

Transcript of Reports and Financial Statements - Goldsmiths, … · Reports and Financial Statements ... Ms Jess...