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2023-06-30-accounts

Annual Report & Financial Statements Year Ended 30 June 2023

PEMBROKE COLLEGE

Trumpington Street Cambridge CB2 1RF

Registered Charity No. 1137492

Pembroke College – Year Ended 30 June 2023

INDEX

Contact information 1
Trustees of the charity 2
Operating and Financial Review 3 - 11
Corporate Governance and Public Benefit 12 - 14
Responsibilities of the Governing Body 15
Auditors' Report 16 - 18
Statement of Accounting Policies 19 - 25
Statement of Comprehensive Income and Expenditure 26
Statement of Change in Reserves 27
Balance Sheet 28
Cash Flow Statement 29
Notes to the Accounts 30 - 42

Pembroke College – Year Ended 30 June 2023

Pembroke College Contact Information

Address

Pembroke College Trumpington Street Cambridge CB2 1RF

Key officers

Master - Rt. Hon. Lord Smith of Finsbury Treasurer and Bursar – Dr.A.Cates Senior Tutor –Dr R Mayhew

Registered charity number

1137492

VAT number 214 2442 08

Professional advisors:

Actuaries

Cartwright Group Limited Suite 7, 2[nd] Floor The Hub IQ Farnborough Farnborough Hants, GU14 7JP

Auditors

Peters Elworthy and Moore Salisbury House Station Road Cambridge CB1 2LA

Bankers

Barclays Bank Plc 9-11 St Andrew’s Street Cambridge CB2 3AA

Principal solicitors

HCR Hewitsons Shakespeare House 42 Market Road Cambridge CB5 8EP

Principal property managers Bidwells Trumpington Road Cambridge CB2 2LD

Cheffins Limited Clifton House 1-2 Clifton Road Cambridge CB1 7EA

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Pembroke College – Year Ended 30 June 2023

Pembroke College Trustees of the charity

Rt Hon Lord Smith of Finsbury Professor NA Fleck Professor MC Payne Professor JP Parry Dr MR Wormald Professor D Robertson Dr T Meissner Professor CJ Young Mr NJ McBride Professor N Cooper Professor KGC Smith Professor V Deshpande Dr DN Tambakis Professor N Datta Professor AC Ferrari Professor RP Blakesley Professor AW Tucker Dr S Learmount Professor S Barrett Dr A Shadrin Revd Dr J Gardom Dr K Ettenhuber Mr M Mellor Professor Sir S O’Rahilly Professor G Csanyi Professor M Clatworthy Dr A Houen Professor R Gagne Dr M Gorji Dr C Burt Professor R Johnson Dame Professor C Grey Dr M Abreu Dr S John Dr A Cates Dr P Cavill Professor J Durrell

Dr MJ Sternberg Dr HGM Diemberger Dr S Cottaar Dr TT Weil Professor TG Micklem Dr IRM Hussin Professor P Warde Professor M Wyatt Dr A Madhavapeddy Dr G Hennequin Dr D Passolt Dr R Laemmle Professor N Jones Dr M Arbabzadah Professor M Hulme Dr J Kromdijk Dr A Ashraf Dr A Prorok Dt C Tonooka Professor A Cardona Professor H Bronstein Dr A Asseraf Professor R Kilner Dr R Mayhew Professor R Morieux Dr S Ward Dr C Kamal Dr S Mohamed Dr M Colla Dr N Crisafi Dr C Bloomfield-Gadelha (Start 1 October 2022) Dr T Chaffey (start 1 October 2022) Dr Z Toprakcioglu (start 1 October 2022) Dr L Di Michele (start 8 November 2022) Dr F Mancini (start 8 November 2022) Dr D Ezerova (start 24 January 2023)

2

Pembroke College – Year Ended 30 June 2023

Pembroke College Operating and Financial Review For the financial year ended 30 June 2023

Status

Marie de St. Pol founded the College or Hall of Valence-Mary in the University of Cambridge, more commonly known as Pembroke College, in 1347. The College is an autonomous, self-governing community of scholars, and one of the thirty-one Colleges within the University of Cambridge. The College is a registered charity and its registered charity number is 1137492.

Aims and objectives

The College is an institution of higher education. Its purposes are the promotion of education, religion, learning, research and scholarship, and the personal and intellectual development of its members. The College admits (as junior members) undergraduate and postgraduate students matriculated in the University of Cambridge. It provides financial and other support to those of its members who require it in order to achieve its purposes, and it supports teaching and research in the University. In furtherance of its objectives, the College maintains and manages an investment portfolio, including properties. Besides financial and tutorial support, it provides accommodation, catering, and other services to its members and to others. Governance arrangements for the College are set out on page 12.

Overview of the Year

On page 26, the College Statement of Comprehensive Income and Expenditure (SOCIE) shows a surplus of £14.9m (2021-22 surplus £6.7m). The SOCIE is a statement of all movements of the net assets of the College between one year and the next. Therefore, it reports all operating income and expenditure, investment gains and losses and other adjustments, e.g. total return and pension adjustments. Investment gains were £2.4m (2021-22 £3.8m). Mill Lane restricted gifts were £12.9m (2022-23 £7.7m). In the year, the USS pension provision remained as 21-22 level (202122 increase of £1.3m) and the CCFPS actuarial deficit also increased by £0.1m (2021-22 decrease of £1.2m). The boxed section on page 26 is, in effect, the operating result as reported for the year. Therefore, the College reported a deficit of £734k for 2022-23 compared to £4.7m shortfall for 2021-22, a strong variation principally due to the International Programmes back in the summer 2022 and a full programme of semester students (total income £3.8m)

The College management accounts for the year reported an almost breakeven position (2021-22 deficit of £0.9m). The difference between that and the RCCA deficit of £734k is as follows:

The College had planned for a shortfall of c.£670k for 2022-23 in its management accounts. Although activity has been slow to recover since the COVID pandemic, this financial year has seen a small recovery in conference and events. The Development team and the Master had successful tours to the East ands West coasts of the US and Singapore and Hong Kong. 4 Mill Lane opened in July 2022 and was used by the International Programmes for their summer programmes. During the academic year, some rooms were also let to the university of Cambridge which contributed to the increase in external income. Further in-year savings were made as the College carried staff vacancies in some departments; recruitment is proving challenging and the College is always looking at how to attract and retain staff. Sickness absences have drastically reduced over the last couple of years and the staff survey carried out during the year showed some very positive steps have been achieved in recent years.

The first phase of the Mill Lane development was officially opened in June 2023 and benefactors were very impressed by the buildings. The completion of the second phase is planned for April 2024 with students occupying premises next

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Pembroke College – Year Ended 30 June 2023

Pembroke College Operating and Financial Review (continued)

academic year.

The Balance Sheet shows net assets of £302.5m (2021-22 £287.6m), including investments of £114.4m (2021-22 £113.4m), where £100.6m relates to endowment assets. Total assets include short-term investments of £11.8m (202122 £19.4m) which consist of gifts (net of expenditure) to fund the Mill Lane project.

Students

The College admits as students those who have the greatest potential to benefit from the education provided by the College and the University, and recruits as academic staff those who are able to contribute most to the academic excellence of the College, regardless of background.

The 2022-2023 year has had its challenges with regard to admissions, as England returns to pre-COVID grading levels, whilst the devolved nations have taken a more staggered approach. Shortlisting for interview also remained challenging, as this cohort of applicants were awarded GCSEs (rather than having sat exams). The vast majority of applicants would have sat GCSEs in 2021, when the highest number of students achieved top grades (c.30%). This, in addition to the College receiving more applicants than ever before, meant that the College conducted more interviews, and that competition for places was more intense.

The undergraduate selection process remained online, including interviews and both the Summer and Winter Pools. The number of students accepted by Pembroke in 2023 dropped marginally below the usual levels of admittance, despite cover ratios being adapted according to the circumstances. This is due to the difficulty in setting cover ratios in such unprecedented circumstances.

Undergraduate student applications are shown below, showing the level of diversity of students attending Pembroke.

Applicants

Offers

The College charges the following fees:

Widening Participation

The College’s work in the area of widening participation helps young people from backgrounds which are traditionally under-represented at Cambridge to have confidence in their ability and to consider applying to top universities, including Cambridge. It equips the students with information relevant to their stage in the student life cycle, and about how to understand the additional elements of the application process at Cambridge. In particular we work to debunk myths about what we are looking for in successful applicants. The events that we deliver are targeted according to the stage participants are at; for example, sixth formers benefit from sessions targeted at the application process and super curricular exploration, whilst key stage 4 students receive support on A level selection and early preparation. In addition, we work with teachers to help them more fully understand what we are looking

4

Pembroke College – Year Ended 30 June 2023

Pembroke College Operating and Financial Review (continued)

for in applicants, and how our application process works, enabling them to better advise the students with whom they are working. Our programme includes both events that work with school groups, and those with a focus on individual applicants.

The 2022-2023 academic year saw a continuation of a hybrid offering, that was first implemented the previous year: many events continued or returned to being delivered in person, whilst others remained online. The format was decided according to selection criteria: the more intensive in person events were more specifically targeted at those with widening participation characteristics, with the exception of participation in the university-wide open days.

Our event programme is frequently reviewed and updated as appropriate; in the coming year it will include masterclasses, personal statement workshops, visit days, open days, remote interview sessions, residential events, virtual tasters, and participation in a collaborative project with The Gurdon Institute and St Catharine’s College – amongst other activities. Within total admissions and access costs of £1m shown on page 31, £0.5m was spent on Access and Widening Participation activity in the year.

Student Support

In order to assist undergraduates entitled to Student Support, the College provides, through the Cambridge Bursary Scheme operated in common with the University and other Colleges, bursary support for those of limited financial means. That scheme was approved by the Office of Fair Access (OFFA) and provides benefits at a substantially higher level than the minimum OFFA requirement. In total £1m has been provided to students through this and other College provision over the last three years as detailed in the table. The majority of bursary support is provided through the Cambridge Bursary Scheme. In addition, undergraduate studentships have been supported over the same period with £56k of funding.

The College also provides substantial financial support to its postgraduate students. This has amounted to £1.3m over the past three years and includes scholarships to fund fees and living costs, as well as `top-up´ funding to fill shortfalls in students´ funding packages.

The College supports all students through a grant scheme to assist with the purchase of books and equipment, attendance at conferences, childcare support, vacation study, counselling and travel grants. Additional counselling support continues to increased and has increased by 25% in 2022-23 to c.£70k, in addition to the other support offered to students such as via the University/College counselling services. Due to the Marking Boycott within the University of Cambridge, not all Prizes and Scholarships have been awarded for the Academic year 2022-23. The figures below include an estimate and will be adjusted with the 2023-24 accounts. The final awards will be distributed to Students in November 2023.

In addition to its other programmes, the College operates a maintenance/hardship scheme for students in financial hardship which has provided £0.4m of assistance in the past 3 years.

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Pembroke College – Year Ended 30 June 2023

Pembroke College Operating and Financial Review (continued)

The following table shows the awards made to students over the three years to June 2023:

Support (£'000)
2020-21
Postgraduate studentships
467
Undergraduate studentships
19
Cambridge Bursaries & other support
319
Prizes and scholarships
96
Maintenance/rent rebates
133
Book grants
17
Research expenses
6
Counselling support
40
Vacation study
56
Other awards
27
Total awards
1,180		 2021-22
2022-23
3 Year
Total
334
432
1,233
23
30
72
343
329
991
57
97
250
128
107
368
9
13
39
22
67
95
56
69
165
49
41
146
47
66
140
1,068
1,251
3,499

The College’s aims in the area of student funding are to support academic excellence irrespective of financial background, in a diverse and interdisciplinary community. We wish to attract the most able students and enable them to reach their academic potential. This area is managed by the Student Finance Committee reflecting the growing complexity and budget of student funding. In order to achieve the greatest possible accountability, the committee shall: 1) support strategic and budgetary planning; 2) allow for adaptability in light of changes to University and national/external funding policy landscape; and 3) respond to the needs of other sections of the College including, for example, the Admissions, Postgraduate, and Development Offices. What is covered by the student funding policy falls into three broad areas: 1) Means tested undergraduate student support, in partnership and in addition to the Cambridge Bursary scheme; 2) non-means tested postgraduate studentships awarded at entry in partnership with the University complemented by a Pembroke MPhil Scheme; 3) General support available to all students. General support for undergraduates includes vacation study grants and academic enrichment, hardship funds, counselling and medical fee support, general travel awards as well as subject specific expenses. Postgraduates have the opportunity to apply for research specific travel and conference support, as well as support-in-kind for Pembroke student led symposia/conferences in Cambridge, academic enrichment and hardship funds; counselling and medical fee support

Academic performance

In 2022-23, Pembroke College continued its excellent performance for undergraduate examination results despite the difficult operating environment throughout the year, including a marking boycott.

Employees

In order to fulfil its charitable purposes, the College employs as Fellows: College Lecturers, Supervisors, Director of Studies, Tutors, Clergy and senior administrative officers, all of whom, along with the Master, serve as charity trustees through being members of the College´s Governing Body. The employment of the Master and Fellows is undertaken with the intention of furthering the College´s objectives and their employment directly contributes to the fulfilment of those aims (although paying Fellows who are trustees is allowed by the Charity Commission). The benefit accruing to the Master and Fellows through salaries, stipends and employment related benefits is objectively reasonable, measured against academic stipends generally; furthermore, annual pay increases normally follow national settlements applying to the university sector. Without the employment of Fellows, the College could not fulfil its charitable aims as a College in the University of Cambridge. The total number of Fellows in the year was 73 (2021-22 72) excluding Life Fellows. The College also employs 148 other FTE (2021-22 142) members of staff to provide the professional, academic and service support necessary to run the College. The increase is mainly due to the fact that College’s operations are gradually going back to pre-pandemic levels and the College has started to fill vacancies where necessary.

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Pembroke College – Year Ended 30 June 2023

Pembroke College Operating and Financial Review (continued)

College Decarbonisation

The College is committed to the decarbonisation agenda and has a strong record in its actions to protect the environment.

Its Investments :

Its buildings, gardens and lands :

The college was a pioneer in decarbonising its current building stock, managing the challenges of medieval buildings. This began with Solar PV installation on the ports pavilion in 2008, followed by the roof of Foundress Court, in 2011, and a borehole to allow watering the College gardens without using scarce local water supplies. The college invested £1.5m in renewing its heating system and insulating rooms to better energy efficiency, and we continue to add insulation and secondary glazing when we refurbish properties. A third of our student bedrooms, and most of our offices now have heat movement detectors, so the rooms are not heated when they are not occupied. Most of the College is now fitted with LED lightbulbs. The first Air Source Heat Pump was installed in 2022 in one of its hostels after a successful a SALIX grant application. In 2023, the College was successful with two new SALIX applications for larger air source heat pumps, one for the Foundress building and one for 26 Barton Road to a total of over £0.7m

The flagship Mill Lane development has also been designed with the environment in mind, with a significant area of additional Solar PV and with air source heat pumps providing hot water and heating to all the student rooms and the Auditorium and teaching spaces. The new Student block has high spec insulation, and carefully designed recessed windows, with Solar glass to reduce the need for cooling in summer (the main structure can be cooled using heat pumps transferring excess heat to the Hot Water).

The college also owns 170 acres of woodland in Cambridgeshire as well as some allotments offered to Cambridge residents which contribute to the general wellbeing of its members and the public in general.

Its sportsgrounds on the edge of Cambridge have hedgerows of wildflowers; the head gardener has also dedicated some areas of the college to wildflowers to promote insects and bees’ population.

Its operations:

The Consultative Committee on Sustainably and the Environment meet at least one a term and includes members representing the whole college: Undergraduates, Postgraduates, Staff and Fellows. The committee is very active and has contributed to the college’s actions.

All departments of the college understand their part to play in tackling environmental challenges.

The Development Office has resumed its in-person activities with members and alumni post-COVID. This poses some challenges as travel is indispensable to meet overseas alumni of which 10% live in the US. However, all marketing is moving towards electronic only, with the Martlet sent electronically to all alumni matriculated from the year 2000 and all Christmas cards are now sent via email.

The Catering department is reducing the use of disposable containers for staff and students by asking them to bring their own containers should they wish to have takeaways. They also display prominently in the servery posters with relative carbon footprint of various food contributors. There will always be a daily offer of plant-based dishes as well as a vegetarian option. Food wastage is reduced as much as possible with either re-using unconsumed items to make other dishes and if not possible by recycling what needs to be thrown away. Students are encouraged to recycle when possible and recycling bins are prominent in the Hall as well as in gyp rooms.

IT is moving more and more of its provision onto the Cloud and chooses suppliers with good carbon footprint credentials. The team have also installed power management in most equipment and where possible air cooling is to be replaced by water cooling (mitigating risks of flooding). HR is introducing environment training in its induction to new staff and all documents are now electronic.

The college has been an advocate of flexible working for a long time, thus reducing cars on the roads. It was the first college to introduce an Electric Vehicle salary sacrifice scheme to all staff and fellows who qualify. Charging points have been installed in the college. The cycle to work scheme is also very popular.

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Pembroke College – Year Ended 30 June 2023

Pembroke College Operating and Financial Review (continued)

When replacing machinery, the college will buy/lease electric options is available. It has recently bought a new battery sit-on mower which also reduces noise pollution.

Beneficiaries

The Master and Fellows of the College receive a number of benefits as beneficiaries. These include accommodation, loans, research grants, conference grants and book grants. These benefits are provided with the intention of furthering the College´s aims and primarily that of advancing research. The amounts of the benefits provided are objectively reasonable, measured against the academic benefits made available to others in the sector.

Funding of the College

Pembroke College is funded from a series of sources. Including endowment gifts, the principal elements of income are as follows:

as follows:
Income Source
Student fees
Student rents
Student catering and bar
Bequests & Donations
Endowment
International Programmes
Conference
Other
Total		 2020-21 2021-22
2022-23
£'000
%
£'000
%
3,319
22%
3,295
17%
2,753
18%
3,171
17%
382
2%
552
3%
2,574
17%
3,373
18%
3,534
23%
3,727
20%
1,741
11%
3,736
20%
191
1%
466
2%
831
5%
763
4%
15,325
100%
19,082
100%
£'000
%
3,231
28%
1,984
17%
355
3%
1,647
14%
3,422
29%
(1)
0%
12
0%
960
8%
11,610
100%

Financial performance

The College manages its finances through a set of management accounts. During the year, the College managed its budget breaking even, bettering the forecast. This is mainly due to increased unrestricted donations and legacies from the Development office and carrying a number of vacancies throughout the year as it is still challenging to fill posts in some areas of the College. International Programmes saw the return of in-person summer programmes and full Semester activities, resulting in very encouraging performances. Catering income has increased by £200k after remaining flat for 2 years, showing a slow recovery following the COVID years. Conference and events income is gathering pace as in-person events too place on site; the college also started renting some of the Mill Lane site to third parties.

During the year, the College’s net assets increased to £302.5m (see pages 27 and 28). Donations and legacies to the endowment amounted to £0.6m. Investment assets, including private placement funds invested, increased by £1m despite a challenging from £113.4m to £114.4m investment environment.

College income was £31m in 2022-23 (2021-22: £21.4m). Whilst Academic Fees and Charges increased by 8%, Income from Catering & Accommodation rose significantly (+£2.4m), reflecting the return to more normal operations for the College (with semester Programmes restarting and students back in College accommodation). The College also recorded £12m income for the Mill Lane site, although £5.5m will be received over the next few years. Expenditure (see page 26), in the boxed section, reports a net deficit of £0.7m (2021-22 deficit £4.8m). Depreciation accounted for £2.3m and the USS pension provision remained stable for 2022-23

Other financial issues of note from the RCCA are:

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Pembroke College – Year Ended 30 June 2023

Pembroke College Operating and Financial Review (continued)

Development activity

The total income from donations received was £16.2m (2021-22 £10.4m). This includes income detailed on page 26 (donations, endowment gifts and capital donations). The breakdown is as follows:

£'000
Annual Giving & Unrestricted Legacies 1.6
Restricted fund Annual Gifts 0.9
Unrestricted Endowment Gifts 0.4
Corporate Donations 0.4
Capital Gifts - Mill Lane 12.9
Total 16.2

Within total College expenditure of £19.9m, a total of £1m was spent on fundraising, corporate partnerships and alumni relations, including £0.5m on general fundraising.

Staffing costs and pension schemes

The College makes pension-fund contributions on behalf of its employees to two defined-benefit schemes: the Cambridge Colleges Federated Pension Scheme (CCFPS) on behalf of some non-academic staff, and the Universities Superannuation Scheme (USS) on behalf of academic and other staff. Notes in respect of pension schemes are shown on pages 37 to 40 of the accounts. New non-academic staff are auto-enrolled into the NOW:Pension Scheme (a defined contribution scheme) when they become eligible.

Payroll costs (academic and non-academic) in note 6 increased to £8.8m (2021-22 £8.3m); despite the College seeing in-person activities back on site (College events, Alumni events, Summer Programmes), due to a challenging labour market, the College has carried a number of vacancies in some departments which resulted in in-year savings.

Capital projects 2022-23 and future works/discretionary projects

During the year, the main projects were to refurbish several student hostels and V staircase. Expenditure on the Mill Lane project in the year totalled £16m which mainly related to the development of plans for the finalisation of Phase 1 of the project and the construction of Phase 2. 4 Mill Lane was completed in time for the International programme students to use the premises in the summer 2022; The Auditorium and Millstein House were officially opened in June 2023.

The major projects planned in 2023-24 include: Continued work to develop Mill Lane site with completion of Phase 2 planned for April 2024. Budgets for 2022-23 include work to renovate O Staircases, student hostels (11 and 12 Fitzwilliam Street). The College was successful in applying for two substantial Air Source Heat Pump grants, one for Foundress Court and one for 26 Barton Road, totalling c.700k which will contribute to the decarbonisation of the College.

9

Pembroke College – Year Ended 30 June 2023

Pembroke College Operating and Financial Review (continued)

General investment performance and cash management

The College holds a well-diversified portfolio covering most asset classes. The breakdown of assets in the investments portfolio at 30 June 2023 and 30 June 2022 is as follows:

Investment vehicle
Managed cash (other than operating balance)
Equities
Alternative investments (hedge funds, derivatives)
Property funds
College property – shops, land and commercially held properties
Private equity, venture capital
Other investments
Total endowment investments
Overall investment growth
Drawdown for spending
Total return
Private placement investments (note 9)
Managed cash
Equities
Total other investments
Total investment portfolio (note 9)		 2021-22
£'000
3,322
49,100
-.-
12,536
33,469
1,367
763
100,557

The College general investments are reviewed at two meetings a year by the Investments Committee. External managers are employed to manage specific elements of the investment portfolio. The College has a challenging long-term target total return of CPI plus 4%, i.e. to support investment drawdown plus educational inflation. During 2022-23, the investments remained flat at £100.6m. In addition, the College holds £13.8m of investments in respect of private placement loan proceeds invested (with a further £1.4m still to invest). The loan repayment terms are described on page 34 (total loans £12.9m).

The College has a target of ensuring the investment portfolio has at least 5% invested in liquid funds (realisable in 0- 10 days) and 9% in semi-liquid (realisable in 11 days to 6 weeks). The level of drawdown in 2022-23 was 3.7% of the 4-year weighted average investment level (or 3.8% of the actual investments at 30 June 2022).

The College’s current investment approach, last updated in October 2019, is that the College has no direct investments in businesses which are predominantly involved in tobacco, arms, or fossil fuels. When considering whether to invest in pooled funds, where it is often impossible to specify exceptions, the level and materiality of investment is carefully considered. All College investment holdings (and the investment policy) are declared regular intervals on its website here: https://www.pem.cam.ac.uk/college/about-pembroke/legal-information/investment-statement

A divestment statement was also made here: https://www.pem.cam.ac.uk/college/news/statement-divestment. The College is also committed to regularly challenging its bankers and investment managers in respect of such areas as fossil fuel lending, exercise of voting rights and other ESG matters.

Reserves policy

The College unrestricted reserves total £183.3m (2021-22 £166.8m) (page 28). This total does not include £44.5m of unrestricted endowment reserves in note 16. These reserves exist to support future generations of students, both through the provision of operational buildings and also income to partially support educational services. Reserves of

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Pembroke College – Year Ended 30 June 2023

Pembroke College

Operating and Financial Review (continued)

£44.5m are insufficient to meet the income needs of the College and as such are supplemented by other income such as from International Programmes and fundraising. As the College is a long-term institution, reserves are held with a long-term view but an element of the unrestricted reserves could be spent as permissible by Statute and Ordinances. The Governing Body has set a minimum level of unrestricted endowment reserves of £35m that it would prefer to remain above, notwithstanding short-term stock market fluctuations. The College has an aim to repay from future surpluses any annual deficits incurred during the pandemic, but that the timing of this repayment will be assessed as more normal conditions return over the next two or three years.

Restricted reserves total an additional £74.7m (excluding £44.5m above), which includes unspent Mill Lane gifts (£17.2m). The restricted reserves can only be spent on purposes set down by the donor.

Challenges Ahead

Due to the COVID-19 pandemic, the financial implications for the coming few years are likely to be significant and farreaching. The College’s budget of a £0.7m deficit was set for 2022-23. The College aims to return to an operational surplus in due course. However, the current geopolitical situation creates challenges in many respects.

(a) Investment performance is likely to be negatively impacted

(b) Although the College plans to increase student rents by an average of 7% per year, underlying inflation is well ahead of this.

(c) It is becoming increasingly challenging to recruit staff in some areas (catering in particular) and pressure on salaries are mounting. The College constantly reviews its offering to staff and strive to improve and enhance support on mental health, training and development

(d) Building refurbishment programmes would continue as planned.

The College will continue to review how the financial deficits for 2021-2023 will be managed. The deficit is likely to be funded over a number of years, in particular to ensure that the College is not borrowing operating cash for longer than necessary so as to spread the deficit recovery over several generations of members. The College has sufficient cash reserves to fund the deficit for at least the next two years as it decides how to manage the longer-term implications of the deficit and is therefore considered by the Trustees as a going concern. However, it will be important to ensure sufficient unrestricted, i.e. non-Mill Lane and endowment cash, exists to avoid the need for external borrowing. There appears to be no immediate need to change reserves policy and the drawdown policy remains broadly the same, although the College is reducing the percentage drawdown to 3.5% of the weighted average endowment over a 5- year period (from 4%).

In addition to its normal operations, the College is managing a major expansion of its operations on the Mill Lane site, which is adjacent to the Medieval footprint of the College. The Mill Lane site Phase 1 opened in 2023 with an Auditorium with Foyer, Gallery, Wellness Centre, new café, and Partnership centre. The next phase of the project due to open in April 2024 will include nine teaching and General purpose rooms, a Gym, offices, two shop-front commercial units and over a hundred student rooms. The total capital cost of these facilities will be around £85m (including land acquisition on a 200-year lease). The College is not intending to increase its student numbers, but these facilities will enable it to accommodate more students close to its centre and improve the quality of its operations.

Approved by: ...................................................… Dr A Cates (Treasurer and Bursar)

Date of approval: 7[th] November 2023

11

Pembroke College – Year Ended 30 June 2023

Pembroke College Corporate Governance and Public Benefit Statement

Governance

The Master and Fellows constitute the Governing Body of the College, to whose meetings are invited Junior Member representatives (for open business). The Governing Body is constituted and regulated in accordance with the College Statutes. The body is responsible for the strategic direction of the College, for its on-going administration, and for the management of its finances and assets. Meetings are held ten times a year under the chairmanship of the Master. Supporting the Governing Body is a range of committees including: Finance & Scrutiny, Development, Planning, Fellowship, Investment, Consultative, Teaching, Buildings and International Programme. Responsibilities of the Governing Body are more fully described on page 15.

The Governing Body members are also the Trustees of the charity and are listed on page 2. The principal officers are listed on page 1. There are Registers of Interests of Trustees and declarations of interest are made systematically at meetings.

Risk assessment

The major risks to which the College is exposed are reviewed regularly by the various College committees named above and reported to the Governing Body. Systems are in place, or are in the process of being established, to mitigate identified risks. The College Health & Safety Policy Statement is reviewed regularly and endorsed by the Governing Body and is displayed throughout the College. As part of this policy, the process for reporting accidents at work is described. The College maintains a general risk register which is updated and reviewed regularly with consideration of the necessary controls to mitigate those risks. The College also carries insurance against key business and financial risks. College departments have also carried out their own risk analysis with assistance from an outside consultant, which includes a review of critical systems and allowable recovery times. Furthermore, the project management of the Mill Lane project also includes a detailed risk register. Aside from the Mill Lane project, examples of (among many) key risk areas include:

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Pembroke College – Year Ended 30 June 2023

Pembroke College

Corporate Governance and Public Benefit Statement (continued)

Environmental policy

In achieving excellence in teaching and research, Pembroke College manages its activities, buildings and estates to promote environmental sustainability, conserves and enhances natural resources and prevents environmental pollution to bring about a continual improvement in its environmental performance.

The College has an environmental policy statement which is reviewed regularly and endorsed by the Governing Body and is displayed in the College. The College has a Consultative Committee for Sustainability and the Environment which meets twice termly to discuss related issues.

Equal opportunities

Many matters relating to recruitment and employment matters are covered in the Staff Handbook. The College is committed to the principle and practice of equal opportunities and aims to be an equal opportunities employer. The College’s employment policy seeks to ensure that no job applicant or employee receives less favourable treatment on any grounds that are unjustified in terms of equality of opportunities for all.

Public benefit statement

In accordance with its Founding Charter and Statutes, the College’s charitable purpose is to advance education, religion, learning and research for the public benefit by the provision, support and maintenance of a College in the University of Cambridge. A full statement of the public benefit it provides has been lodged with the Charity Commission. It is summarised as follows:

Education:

Research:

The College also carries forward the tradition, continuous since its foundation, of being a place of spiritual and ethical reflection on the Christian faith and its implications for the individual and society. In particular, it maintains and supports a Chapel and holds services which are open to the general public and visitors. Through the College Dean of Chapel, it supports the emotional, mental and spiritual well-being of all members of the College whatever their faith tradition or none. It is also the Patron of 14 parishes and maintains its historic link with Pembroke House, in Walworth, South London, a Charity whose aims overlap with those of Pembroke College, working in an area of high deprivation.

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Pembroke College – Year Ended 30 June 2023

Pembroke College Corporate Governance and Public Benefit Statement (continued)

The College maintains an extensive library, so providing a valuable resource for members of Pembroke, other Colleges, and the University of Cambridge more widely as well as external scholars and researchers and the public through regular exhibitions and the digitization of special collections materials.

The resident members of the College, both students and academic staff, are the primary beneficiaries and are directly engaged in education, learning or research. However, beneficiaries include students and academic staff from other Colleges in Cambridge and from Cambridge University more widely, visiting academic staff from other higher education institutions and visiting school children who have an opportunity

to attend educational events at the College or use its academic facilities. The general public are also able to attend educational activities in the College such as exhibitions.

Development

The College has a Development and Corporate Partnership team of around 12 FTE which includes permanent staff and student telephone fundraisers. This team provides support for all fundraising, alumni relations and corporate partnership activities of the College. A Development Committee consisting of Fellows oversees Development activities and meets twice a term. There is also a Campaign Board which includes up to 20, mainly external, members and meets once per term. The College uses an external organisation to assist with the annual telephone fundraising campaign. On a less formal basis, the College also has a number of Alumni Chapters around the world which helps to support and promote the College. In addition, the College will soon create a number of Campaign Ambassadors to assist with networking and develop prospects around the world. During the year, there were no complaints. Pembroke College subscribes to the Fundraising Regulator’s Code of Fundraising Practice.

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Pembroke College – Year Ended 30 June 2023

Pembroke College

Responsibilities of the Governing Body

The Governing Body is responsible for the administration and management of the College’s affairs.

The Governing Body presents audited financial statements for each financial year. These are prepared in accordance with the provisions of the Statutes of the College and of the University of Cambridge and applicable United Kingdom Accounting Standards, including the Statement of Recommended Practice ‘Accounting for Further and Higher Education Institutions’, as interpreted by the University of Cambridge in their Recommended Cambridge College Accounts.

With reference to the above provisions, the Governing Body is responsible for ensuring that there is an effective system of internal control and that accounting records are properly kept. It is required to present audited financial statements for each financial year, prepared in accordance with the Statutes of the University.

In causing the financial statements to be prepared, the Governing Body has sought to ensure that:

The Governing Body is satisfied that the College has adequate resources to continue in operation for the foreseeable future. The financial statements are accordingly prepared on a going concern basis.

The Governing Body has taken reasonable steps to ensure that there are appropriate financial and management controls in place to safeguard the assets of the College and prevent and detect fraud.

Any system of internal financial control, however, can only provide reasonable, not absolute, assurance against material misstatement or loss.

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.

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Pembroke College – Year Ended 30 June 2023

Pembroke College

Independent auditors’ report to the Governing Body of Pembroke College, Cambridge

Opinion

We have audited the financial statements of Pembroke College (the ‘College) for the year ended 30 June 2023 which comprise the Statement of Comprehensive Income and Expenditure, Statement of Changes in Reserves, the Balance Sheet, the Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We are independent of the College in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the College's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.

Other information

The Governing Body are responsible for the other information. The other information comprises the information included in the Annual Report other than the financial statements and our auditors’ report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matters prescribed by the Statutes of the University of Cambridge

In our opinion based on the work undertaken in the course of the audit:

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Pembroke College – Year Ended 30 June 2023

Pembroke College

Independent auditors’ report to the Governing Body of Pembroke College, Cambridge (continued)

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the College and its environment obtained in the course of the audit, we have not identified material misstatements in the Operating and Financial Review.

We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion:

Responsibilities of the Governing Body

As explained more fully in the responsibilities of the Governing Body statement set out on page14, the Governing Body are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Governing Body determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Governing Body are responsible for assessing the College’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the College or to cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

We assessed the susceptibility of the College’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

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Pembroke College – Year Ended 30 June 2023

Pembroke College Independent auditors’ report to the Governing Body of Pembroke College, Cambridge (continued)

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilties. This description forms part of our auditors’ report.

Use of our report

This report is made solely to the College’s Governing Body as a body, in accordance with College’s statutes, the Statutes of the University of Cambridge and the Charities Act 2011. Our work has been undertaken so that we might state to the 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.

PETERS ELWORTHY & MOORE

Chartered Accountants and Statutory Auditors

Salisbury House Station Road Cambridge CB1 2LA Date: 16 November 2023

Peters Elworthy & Moore is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006.

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Pembroke College – Year Ended 30 June 2023

Pembroke College Statement of Principal Accounting Policies

1. 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, using the Recommended Cambridge College Accounts (RCCA) format; and applicable United Kingdom Accounting Standards, including Financial Reporting Standard 102 (FRS 102) and the Statement of Recommended Practice (SORP): Accounting for Further and Higher Education issued in 2019.

The Statement of Comprehensive Income and Expenditure includes activity analysis in order to demonstrate that all fee income is spent for educational purposes. The analysis required by the SORP is set out in note 7.

The College is a public benefit entity and therefore has applied the relevant public benefit requirement of the applicable UK laws and accounting standards.

Going concern

The COVID pandemic impact is still being felt by the College. International Programmes started again in person in 2022-23, and the Pembroke Summer Programmes were held in July and August 2022 in the new buildings on Mill Lane. However, the global geo-political situation is putting further pressures on the College, with general inflation increasing rapidly, investment performance likely to be negatively impacted and staff recruitment proving challenging in some departments.

The Trustees have prepared forecasts for the period to 2027 based on high level assumptions regarding inflation and investment performance. The College reviews its cost base on a regular basis in order to combat the reduction in revenues and to extend financial headroom. The College has made use of the Government Job Retention Scheme. The College also has significant investments which could be realised if required.

Based upon their review the Trustees believe that the College will have sufficient resources to meet its liabilities as they fall due for the foreseeable future and therefore have continued to adopt the going concern basis in preparing the financial statements.

2. Basis of accounting

The financial statements have been prepared under the historical cost convention, modified in respect of the treatment of investments and operational property which are included at valuation.

3. Basis of consolidation

The activities of student societies have not been consolidated on the basis that the College does not have control over the operation of the societies.

4. Recognition of income

Donations and endowments

Non-exchange transactions without performance related conditions are donations and endowments. Donations and endowments with donor imposed restrictions are recognised within the Statement of Comprehensive Income and Expenditure when the College is entitled to the income. Income is retained within restricted reserves until such time that it is utilised in line with such restrictions at which point the income is released to general reserves through a reserve transfer.

Donations and endowments with restrictions are classified as restricted reserves with additional disclosure provided within the notes to the accounts.

There are four main types of donations and endowments with restrictions:

  1. Restricted donations – the donor has specified that the donation must be used for a particular objective.

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Pembroke College – Year Ended 30 June 2023

Pembroke College

Statement of Principal Accounting Policies (continued)

  1. Unrestricted permanent endowments – the donor has specified that the fund is to be permanently invested to generate an income stream for the general benefit of the College.

  2. Restricted expendable endowments – the donor has specified a particular objective and the College can convert the donated sum into income.

  3. Restricted permanent endowments – the donor has specified that the fund is to be permanently invested to generate an income stream to be applied to a particular objective.

Donations with no restrictions are recorded within the Statement of Comprehensive Income and Expenditure when the College is entitled to the income.

Grant income

Grants received from non-government sources (including research grants from non-government sources) are recognised within the Statement of Comprehensive Income and Expenditure when the College is entitled to the income and performance related conditions have been met.

Income received in advance of performance related conditions is deferred on the balance sheet and released to the Statement of Comprehensive Income and Expenditure in line with such conditions being met.

Investment income and change in value of investment assets

Investment income and change in value of investment assets is recorded in income in the year in which it arises and as either restricted or unrestricted income according to the terms or other restrictions applied to the individual endowment fund.

Total return

The College calculated its income requirements (based on a percentage of the 4-year weighted average investment value) and that amount was transferred to investment income in the Statement of Comprehensive Income and Expenditure. The income is stated net of investment management and property fees. All returns from cash or property held in respect of operating assets are treated as income as received.

Academic fees

Academic fees are recognised in the period to which they relate and include all fees chargeable to students or their sponsors.

Other income

Income is received from a range of activities including accommodation, catering conferences and other services rendered.

Cambridge Bursary Scheme

In 2022-23, payment of the Cambridge Bursaries to eligible students was made directly by the Student Loans Company (SLC). As a consequence, the College reimbursed the SLC for the full amount paid to their eligible students and the College subsequently received a contribution from the University of Cambridge towards this payment.

The net payment of £178k is shown within the Statement of Comprehensive Income and Expenditure as follows: Income (see note 1) £147k Expenditure £325k

5. Foreign currencies

Transactions denominated in foreign currencies are recorded at the rate of exchange ruling at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into sterling at year end rates or, where there are forward foreign exchange contracts, at contract rates. The resulting exchange differences are dealt with in the determination of the comprehensive income and expenditure for the financial year.

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Pembroke College – Year Ended 30 June 2023

Pembroke College

Statement of Principal Accounting Policies (continued)

6. Fixed assets

a) Land and buildings

During 2018/19 the accounting policy for College land and buildings used for operational purposes changed. Following a review carried out by professional valuers Gerald Eve these land and buildings are now held at an updated depreciated replacement value. The valuation is reviewed annually with a full valuation at least every five years. Freehold buildings are depreciated on a straight-line basis over their expected useful economic lives with a range for the different buildings averaging between 30 to 55 years, where building structure is depreciated up to 150 years and fit-out/M&E services up to 40 years. Freehold land is shown separately and is not depreciated. Assets under construction are valued at cost, based on the value of architects’ certificates and other direct costs incurred. They are not depreciated until they are brought into use.

Where parts of a fixed asset have different useful lives, they are accounted for as separate items of fixed assets.

When land and buildings are acquired with the aid of restricted bequests or donations, the policy for accounting for that income is described in accounting policy 4 above.

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.

Costs incurred in relation to land and buildings after initial purchase or construction, and prior to valuation, are capitalised to the extent that they increase the expected future benefits to the College.

b) Maintenance of buildings

The cost of routine maintenance is charged to the Statement of Comprehensive Income and Expenditure as it is incurred.

c) Furniture and equipment

Furniture and equipment is not capitalised if an individual item costs less than £5k. Such expenditure is written off in the year of acquisition. All other assets are capitalised and depreciated over their expected useful life as follows:

Computer equipment/photocopiers 33% p.a. (3 years)
Boats 7% p.a. (15 years)
Heating systems 5% p.a. (20 years)
Other furniture and equipment 10% p.a. (10 years)

When furniture and equipment is acquired with the aid of specific bequests or donations, the policy for accounting for that income is described in accounting policy 4 above.

d) Leased assets

Leases in which the College assumes substantially all the risks and rewards of ownership of the leased asset are classified as finance leases. Leased assets acquired by way of finance leases are stated at an amount equal to the lower of their fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation and less accumulated impairment losses. Lease payments are accounted for as described below.

Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Costs in respect of operating leases are charged on a straight-line basis over the lease term. Any lease premiums or incentives are spread over the minimum lease term.

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Pembroke College – Year Ended 30 June 2023

Pembroke College

Statement of Principal Accounting Policies (continued)

e) Heritage assets

The College holds and conserves a number of collections, exhibits, artefacts and other assets of historical, artistic or scientific importance. Heritage assets acquired before 1[st] July 2003 or with a cost below £5k have

not been capitalised since reliable estimates of cost or value are not available on a cost-benefit basis. Acquisitions since 1[st] July 2003 have been capitalised at cost or, in the case of donated assets, at expert valuation on receipt. Heritage assets are not depreciated since their long economic life and high residual value mean that any depreciation would not be material.

7. Investments

Non-current investment assets are included in the balance sheet at market value. Investments that are not listed on a recognised stock exchange (except estate properties) are carried at net asset value.

While College hostels and other properties treated as operational assets are re-valued as stated in 6a) above, other properties and agricultural land held for their investment value are treated and valued as investment assets. Such investment assets are valued annually, at least by desktop valuation, by a professional valuer (Bidwells and Cheffins) and revalued on the balance sheet accordingly. Every five years, a full valuation is carried out.

8. Stocks

Stocks are stated at the lower of cost and net realisable value after making provision for slow moving and obsolete items.

9. Provisions

Provisions are recognised when the College has a present legal or constructive obligation as a result of a past event. It is probable that a transfer of economic benefit will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

10. Taxation

The College is a registered charity (number 1137492) and also a charity within the meaning of Section 467 of the Corporation Tax Act 2010. Accordingly, the College is exempt from taxation in respect of income or capital gains received within the categories covered by Sections 478 to 488 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that such income or gains are applied to exclusively charitable purposes.

The College receives no similar exemption in respect of Value Added Tax.

11. Contribution under Statute G, II

The College is liable to be assessed for Contribution under the provisions of Statute G,II of the University of Cambridge. Contribution is used to fund grants to colleges from the Colleges Fund. The College may from time to time be eligible for such grants. The liability for the year is as advised to the College by the University based on an assessable amount derived from the value of the College’s assets as at the end of the previous financial year.

12. Pension schemes

The College participates in Universities Superannuation Scheme. The assets of the scheme are held in a separate trustee-administered fund. Because of the mutual nature of the scheme, the assets are not attributed to individual institutions and a scheme-wide contribution rate is set. The College is therefore exposed to actuarial risks associated with other institutions’ employees and is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis. As required by Section 28 of FRS 102 “Employee benefits”, the College therefore accounts for the scheme as if it were a defined contribution scheme. As a result, the amount charged to the

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Pembroke College – Year Ended 30 June 2023

Pembroke College Statement of Principal Accounting Policies (continued)

Statement of Comprehensive Income and Expenditure represents the contributions payable to the scheme. Since the College has entered into an agreement (the Recovery Plan) that determines how each employer within the scheme will fund the overall deficit, the College recognises a liability for the contributions payable that arise from the agreement (to the extent that they relate to the deficit) with related expenses being recognised through the Statement of Comprehensive Income and Expenditure.

The College participates in the Cambridge Colleges Federated Pension Scheme (CCFPS), a defined benefit scheme which is externally funded and until 31 March 2016 was contracted out of the State Second Pension (S2P). As CCFPS is a federated scheme and the College is able to identify its share of the underlying assets and liabilities, the College values the fund as required by Section 28 Employee Benefits of FRS 102 ‘Retirement Benefits’. As a result, the amount charged to the Statement of Comprehensive Income and Expenditure represents the amount calculated under FRS102 guidelines.

The College operates a defined contribution pension scheme and the pension charge represents the amounts payable by the College to the fund in respect of the year.

Contingent assets and liabilities are not recognised in the balance sheet but are disclosed in the notes.

13. Financial instruments

The College has elected to adopt Sections 11 and 12 of FRS 102 in respect of the recognition, measurement and disclosure of financial instruments. Financial assets and liabilities are recognised when the College becomes party to the contractual provision of the instrument and they are classified according to the substance of the contractual arrangements entered into.

A financial asset and a financial liability are offset only when there is a legally enforceable right to set off the recognised amounts and an intention either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

14. Financial assets

Basic financial assets include trade and other receivables, cash and cash equivalents and investments in commercial paper (i.e. deposits and bonds). These assets are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Such assets are subsequently carried at amortised cost using the effective interest rate method. Financial assets are assessed for indicators of impairment at each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in the Statement of Comprehensive Income.

For financial assets carried at amortised cost the impairment loss is the difference between the carrying amount of the asset and the present value of the estimated future cash flows, discounted at the asset’s original effective interest rate.

Other financial assets, including investments in equity instruments, which are not subsidiaries or joint ventures, are initially measured at fair value which is typically the transaction price. These assets are subsequently carried at fair value and changes in fair value at the reporting date are recognised in the Statement of Comprehensive Income. Where the investment in equity instruments is not publicly traded and where the fair value cannot be reliably measured, the assets are measured at cost less impairment. Investments in property or other physical assets do not constitute a financial instrument and are not included.

Financial assets are de-recognised when the contractual rights to the cash flows from the asset expire or are settled or substantially all of the risks and rewards of ownership are transferred to another party.

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Pembroke College – Year Ended 30 June 2023

Pembroke College Statement of Principal Accounting Policies (continued)

15. Financial liabilities

Basic financial liabilities include trade and other payables, bank loans and intergroup loans. These liabilities are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost using the effective interest rate method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest rate method.

Derivatives, including forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date the derivative contract is entered into and are subsequently re-measured at their fair value at the reporting date. Changes in the fair value of

derivatives are recognised in the Statement of Comprehensive Income in finance costs or finance income as appropriate, unless they are included in a hedging arrangement.

To the extent that the College enters into forward foreign exchange contracts which remain unsettled at the reporting date the fair value of the contracts is reviewed at that date. The initial fair value is measured as the transaction price on the date of inception of the contracts. Subsequent valuations are considered on the basis of the forward rates for those unsettled contracts at the reporting date. The College does not apply any hedge accounting in respect of forward foreign exchange contracts held to manage cash flow exposures of forecast transactions denominated in foreign currencies.

Financial liabilities are de-recognised when the liability is discharged, cancelled, or expires.

16. Contingent liabilities and assets

A contingent liability arises from a past event that gives the College a possible obligation whose existence will only be confirmed by the occurrence or otherwise of uncertain future events, not wholly within the control of the College. Contingent liabilities also arise in circumstances where a provision would otherwise be made but either it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured reliably.

A contingent asset arises where an event has taken place that gives the College a possible asset whose existence will only be confirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the College.

Contingent assets and liabilities are not recognised in the balance sheet but are disclosed in the notes.

17. Employment benefits

Short term employment benefits such as salaries and compensated absences are recognised as an expense in the year in which the employees render service to the College. Any unused benefits are accrued and measured as the additional amount the College expects to pay as a result of the unused entitlement.

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Pembroke College – Year Ended 30 June 2023

Pembroke College Statement of Principal Accounting Policies (continued)

18. Reserves

Reserves are allocated between restricted and unrestricted reserves. Endowment reserves include balances which, in respect of endowment to the College, are held as permanent funds, which the College must hold to perpetuity. Restricted reserves include balances in respect of which the donor has designated a specific purpose and therefore the College is restricted in the use of these funds.

19. Critical accounting judgements

The preparation of the College’s accounts requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. These judgements, estimates and associated assumptions are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results.

Management consider the areas set out below to be those where critical accounting judgements have been applied and the resulting estimates and assumptions may lead to adjustments to the future carrying amounts of assets and liabilities.

Income recognition – Judgement is applied in determining the value and timing of certain income items to be recognised in the accounts. This includes determining when performance related conditions have been met and determining the appropriate recognition timing for donations, bequests and legacies. In general, the later are recognised when at the probate stage.

Useful lives of property, plant and equipment – Property, plant and equipment represent a significant proportion of the College’s total assets. Therefore, the estimated useful lives can have a significant impact on the depreciation charged and the College’s reported performance. Useful lives are determined at the time the asset is acquired and reviewed regularly for appropriateness. The lives are based on historical experiences with similar assets, professional advice and anticipation of future events. Details of the carrying values of property, plant and equipment are shown in note 8.

Investment property – Properties are revalued to their fair value at the reporting date by Cheffins. The valuation is based on the assumptions and judgements which are impacted by a variety of factors including market and other economic conditions. Only those residential properties deemed to be out- with the core housing stock of the College are included in investment property. This status is regularly reviewed.

Recoverability of debtors – The provision for doubtful debts is based on the College’s estimate of the expected recoverability of those debts. The provision is based on the current situation of the customer, the age profile of the debt and the nature of the amount due

Retirement benefit obligations – The costs of defined benefit pension plans are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and the long-term nature of these plans, such estimates are subject to significant uncertainty. Further details are given in note 20.

Management are satisfied that Universities Superannuation Scheme meets the definition of a multi-employer scheme and has therefore recognised the discounted fair value of the contractual contributions under the funding plan in existence at the date of approving the accounts.

As the College is contractually bound to make deficit recovery payments to USS, this is recognised as a liability on the balance sheet. The provision is currently based on the USS deficit recovery plan agreed after the 2018 actuarial valuation, which defines the deficit payment required as a percentage of future salaries until 2028. These contributions will be reassessed within each triennial valuation of the scheme. The provision is based on management’s estimate of expected future salary inflation, changes in staff numbers and the prevailing rate of discount. Further details are set out in note 20.

All other accounting judgements and estimates are detailed under the appropriate accounting policy.

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Pembroke College

Statement of Comprehensive Income and Expenditure Year ended 30th June 2023

Note
Income
Academic fees and charges
1
Accommodation, catering and conferences
2
Investment income
3a
Endowment return transferred
3a
Other income
3c
Total income before donations and endowments
Donations
New endowments
Other capital donations for Mill Lane project
Total income
Expenditure
Education
4
Accommodation, catering and conferences
5
Other expenditure
7d
USS Provision
7d
Contribution under Statute G,II
Total expenditure
(Deficit)/surplus before other gains and losses
Gain/(loss) on investments
3a
Gain/(loss) on disposal of fixed assets
(Deficit)/surplus for the year
Other comprehensive income
Actuarial profit/(loss) in respect of pension schemes
15
Total comprehensive income for the year		 2023
Restricted
Endowment
Total
£000
£000
£000
178
-
5,163
-
-
6,743
197
2,035
2,721
2,048
(3,669)
(10)
60
-
142
2,483
(1,634)
14,759
781
-
2,843
-
552
552
12,861
-
12,861
16,125
(1,082)
31,015
2,765
-
9,242
-
-
8,213
88
365
2,550
-
-
(99)
6
-
25
2,859
365
19,931
13,266
(1,447)
11,085
32
2,395
2,462
-
-
1,416
13,298
948
14,963
-
-
(92)
13,298
948
14,871		 2022
Unrestricted
£000
4,985
6,743
489
1,611
82		 Restricted
Endowment
Total
£000
£000
£000
178
-
5,163
-
-
6,743
197
2,035
2,721
2,048
(3,669)
(10)
60
-
142		 Unrestricted
£000
4,643
4,305
142
1,592
100		 Restricted
Endowment
Total
£000
£000
£000
148
-
4,791
2
-
4,307
39
1,574
1,755
1,929
(3,529)
(8)
37
-
137
13,910
2,062
-
-		 2,483
(1,634)
14,759
781
-
2,843
-
552
552
12,861
-
12,861		 10,782
780
-
-		 2,155
(1,955)
10,982
794
-
1,574
-
1,170
1,170
7,664
-
7,664
15,972 16,125
(1,082)
31,015		 11,562 10,613
(785)
21,390
6,477
8,213
2,097
(99)
19		 2,765
-
9,242
-
-
8,213
88
365
2,550
-
-
(99)
6
-
25		 6,233
6,731
2,011
1,346
26		 2,172
-
8,405
-
-
6,731
232
926
3,169
-
-
1,346
8
-
34
16,707 2,859
365
19,931		 16,346 2,412
926
19,684
(735) 13,266
(1,447)
11,085		 (4,784) 8,201
(1,711)
1,706
35
1,416		 (809) 118
4,527
3,836
716
(92)		 (5,593)
1,144		 8,319
2,816
5,542
-
-
1,144
624 (4,449) 8,319
2,816
6,686

The notes on pages 30 to 42 form part of these accounts.

26

Pembroke College Statement of Changes in Reserves Year ended 30th June 2023

Pembroke College
Statement of Changes in Reserves
Year ended 30th June 2023
Balance at 1 July 2022
(Deficit)/surplus from income and expenditure statement
Other comprehensive income
Release of restricted capital funds spent in the year
Transfer between reserves
Balance at 30 June 2023
Balance at 1 July 2021
(Deficit)/surplus from income and expenditure statement
Other comprehensive income
Release of restricted capital funds spent in the year
Transfer from endowment to unrestricted funds
Balance at 30 June 2022		 Unrestricted
Revaluation
Restricted
Endowment
Total
£000
£000
£000
£000
£000
90,731
76,084
30,387
90,396
287,598
716
-
13,299
948
14,963
(92)
-
-
-
(92)
15,801
-
(15,801)
-
-
90
-
(2,549)
2,459
-
Income and expenditure reserve
107,246
76,084
25,335
93,804
302,469
(note 17)
(note 16)
Unrestricted
Revaluation
Restricted
Endowment
Total
£000
£000
£000
£000
£000
76,110
76,084
41,139
87,580
280,913
(5,593)
-
8,319
2,816
5,542
1,144
-
-
-
1,144
19,071
-
(19,071)
-
-
-
-
-
-
Income and expenditure reserve
90,731
76,084
30,387
90,396
287,599
(note 17)
(note 16)

27

Pembroke College Balance Sheet Year ended 30th June 2023

Note
Non-current assets
Fixed assets
8a
Heritage assets
8b
Investments
9
Total non-current assets
Current assets
Stock
10
Trade and other receivables
11
Cash and cash equivalents
12
Short-term investments
13
Total current assets
Creditors: amounts falling due within
one year
14a
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after
more than one year
14b
Provisions
Pension provisions
15
Total net assets
Restricted reserves
Income and expenditure reserve - endowment reserve
16
Income and expenditure reserve - restricted reserve
17
Unrestricted reserves
Income and expenditure reserve - unrestricted reserve
Revaluation reserve
Total reserves		 2023
2022
£000
£000
192,688
179,810
673
644
114,444
113,439
307,805
293,893
678
688
9,890
2,608
0
0
11,783
19,387
22,351
22,683
(8,831)
(10,008)
13,520
12,675
321,325
306,568
(14,275)
(14,440)
307,050
292,128
(4,582)
(4,530)
302,468
287,598
93,803
90,396
25,335
30,387
119,138
120,783
107,246
90,731
76,084
76,084
183,330
166,815
302,468
287,598

The financial statements were approved by the Governing Body on 7th November 2023 and signed on its behalf by:

Approved by:

Rt Hon Lord Smith of Finsbury (Master)

_______Dr. A Cates (Treasurer and Bursar)

The notes on pages 30 to 42 form part of these accounts.

28

Pembroke College Cash Flow Statement Year ended 30th June 2023

Pembroke College
Cash Flow Statement
Year ended 30th June 2023
Note
Cash flows from operating activities
21
Cash flows from investing activities
22
Cash flows from financing activities
23
(Decrease) in cash and cash equivalents in the year
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
24		 2023
2022
£000
£000
15,362
16,555
(10,772)
(16,275)
(608)
(602)
3,982
(322)
(5,275)
(4,952)
(1,293)
(5,275)

The notes on pages 30 to 42 form part of these accounts.

29

Pembroke College Notes to the accounts Year ended 30th June 2023

1. Academic fees and charges
1. Academic fees and charges
College fees
Fee income received at the Regulated Undergraduate rate
Fee income received at the Unregulated Undergraduate rate
Fee income received at the Postgraduate rate
Fee income received at the International Programme rate
Other income
Cambridge Bursary Scheme
Total
2. Income from accommodation, catering and conferences income
International Programmes
Accommodation
College members
Conferences
Catering
College members
Conferences
Total
3a. Endowment and investment income
Income from investments and donations:
Income drawdown from endowment
Freehold land and buildings
Other interest receivable
Private placement investment income
Mill Lane investment income
Summary of total return:
Income from:
Land and buildings
Quoted and other securities and cash
Gains on endowment assets:
Land and buildings
Quoted and other securities and cash
Investment management costs in respect of:
Land and buildings
Quoted and other securities and cash
Total return for the year
Total return transferred to income and expenditure reserve (see above)
Unapplied total return for year included within Statement of Comprehensive Income
and Expenditure (note 18)
Gains on other assets:
Quoted and other securities and cash
3b. Investment management costs
Quoted securities - equities
Other investments
3c. Other income
Lease of operational buildings
Income from sports facilities and equipment
HMRC Job Retention Scheme grant
Other income		 2023
£000
1,971
463
860
1,633
4,927
89
147
5,163
2023
£000
2,102
3,605
270
563
203
6,743
2023
£000
3,659
9
379
102
197
4,346
609
1,426
783
532
(241)
(125)
2,984
(3,669)
(685)
1,146
2023
£000
4
121
125
2023
£000
-
20
-
122
142		 2022
£000
1,973
451
895
1,206
4,525
101
165
4,791
2022
£000
535
2,957
78
625
112
4,307
2022
£000
3,520
1
67
76
39
3,703
454
1,119
3,114
1,532
(490)
(436)
5,293
(3,529)
1,764
(809)
2022
£000
294
142
436
2022
£000
-
13
43
81
137

30

Pembroke College Notes to the accounts Year ended 30th June 2023

4. Education expenditure

Education expenditure
Teaching
Tutorial
Admissions and Access
Scholarships and awards
Other educational facilities
Academic community
Research
Total
Total expenditure on student support during the year included above was £1.2m (2022 £1.1m).
Accommodation, catering and conferences expenditure
International Programmes
Accommodation
College Members
Conferences
Catering
College Members
Conferences
Total
taff costs
Academic
2022-23
£000
Staff costs
Salaries
1,570
National insurance
134
Other pension costs (see note 20 (d) )
365
2,069
Average staff no.s (full time equivalent)
2022-23
Number of Fellows
Academic
68
-
Non-academic
5
-
73		 Non-academic
2022-23
£000
5,427
496
873
6,796
2022-23
Full-time
equivalents

2

146
148		 2023
£000
2,238
1,518
956
600
1,939
831
8,082
1,160
9,242
2023
£000
1,791
4,245
87
1,870
220
8,213
Total
2022-23
£000
6,997
630
1,238
8,865
2021-22
Number of
Fellows
67
5
72		 2022
£000
1,659
1,639
973
497
1,781
784
7,333
1,072
8,405
2022
£000
1,029
4,161
6
1,535
-
6,731
Total
2021-22
£000
6,689
545
1,051
8,285
2021-22
Full-time
equivalents
2
140
142

5. Accommodation, catering and conferences expenditure

6. Staff costs

The number of officers and employees of the College, including the Head of House, who received remuneration in the following ranges was:

2023 2022
£100,000 - £109,999 0 0
£110,000 - £119,999 1 1
£120,000 - £129,999 1 1
£130,000 - £139,999 1 2
£140,000 - £149,999 2 0

Remuneration includes salary, employer’s national insurance contributions, employer’s pension contributions plus any taxable benefits either paid, payable or provided, gross of any salary sacrifice arrangements.

Of the 73 (2021-22- 72) College Fellows and Trustees declared above who are members of the Governing Body, 68 (2021-22 - 72) receive remuneration. The Trustees receive no emoluments in their role as trustees of the charity.

Key management personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the College. This includes aggregated remuneration paid to key management personnel.

During the year, remuneration paid to Trustees in their capacity as Key Management Personnel were:

2023 2022
£000 £000
2,388 1,788

Aggregate remuneration

31

Pembroke College Notes to the accounts Year ended 30th June 2023

7a. Analysis of expenditure by activity 2022-23

Education (Note 4)
Accommodation, catering, and conferences (Note 5)
Other expenditure (Note 7d)
USS pension Provision
Contribution under Statute G,II		 Staff & Fellows
Other
payroll costs
operating
Total
(note 6)
expenses
Depreciation
2023
£000
£000
£000
£000
4,757
3,902
583
9,242
3,180
3,501
1,532
8,213
928
1,476
146
2,550
-
(99)
-
(99)
-
25
-
25
8,865
8,805
2,261
19,931

Loan interest payable for the year to 30th June 2023 was £472k. Other expenditure includes governance, investment management fees, fundraising and alumni relations expenditure. Fundraising costs were £504k.

7b. Analysis of expenditure by activity 2021-22

Education (Note 4)
Accommodation, catering, and conferences (Note 5)
Other expenditure (Note 7d)
USS pension provision
Contribution under Statute G,II
Loan interest payable for the year to 30th June 2022 was £482k.
Other expenditure includes governance, investment management fees, fundraising and alumni relations expenditure.
Fundraising costs were £413k.		 Staff & Fellows
Other
payroll costs
operating
Total
(note 6)
expenses
Depreciation
2022
£000
£000
£000
£000
4,428
3,401
576
8,405
2,862
2,353
1,516
6,731
995
2,030
144
3,169
1,346
1,346
-
34
-
34
8,285
9,164
2,236
19,684

7c. Auditors' remuneration

Auditors' remuneration
Audit fees payable to the College's external auditors
Other fees payable to the College's external auditors
. Other expenditure
Interest charges
Investment management fees
Loan interests
Other expenditure
Fixed assets
Cost/valuation
At 1 July 2022
Additions
Disposals
Transfer to investments
Cost/valuation as at 30 June 202
Depreciation
At 1 July 2022
Provided for the year
Disposals
Depreciation at 30 June 2023
Net book value
At 30 June 2023
At 30 June 2022		 College site
Assets in
College site
Houses for
Sportsground &
Land
Buildings
Course of
Foundress
College
Boathouse
Construction
Court
Members
£000
£000
£000
£000
£000
£000
66,062
28,953
15,010
19,622
820
55,990
90
15,831
-
244
-
-
-
-
-
(1,280)
-
-
16,415
(16,425)
-
10
-
-		 2023
2022
£000
£000
33
27
8
1		 Total
2022
£000
170,774
19,454
-
-
2023
2022
£000
£000
472
475
365
926
397
390
1,316
1,378
2,550
3,169
Furniture &
Total
Equipment
2023
£000
£000
3,771
190,228

155
16,320

-
(1,280)

-
-
82,567
28,359
15,010
18,596
820
55,990		 3,926
205,268		 190,228
5,114
-
1,224
1,525
106
-
1,346
-
310
392
26
-
-
-
-
(96)
-
-		 2,449
10,418

184
2,258

-
(96)		 8,182
2,236
-
6,460
-
1,534
1,821
132
-		 2,633
12,580		 10,418
76,107
28,359
13,476
16,775
688
55,990		 1,293
192,688		 179,810
60,948
28,953
13,786
18,096
714
55,990		 1,322
179,810		 162,592

7d. Other expenditure

8a. Fixed assets

The insured value of freehold land and buildings as at 30 June 2023 was £207m (2021 £191m). All of the above assets are used for Collegiate purposes.

32

Pembroke College Notes to the accounts Year ended 30th June 2023

8b. Heritage assets

The College holds and conserves certain collections, artefacts and other assets of historical, artistic or scientific importance.

As stated in the statement of principal accounting policies, heritage assets acquired since 1 July 2003 have been capitalised. However, the majority of assets held in the College's collections were acquired prior to this date. As reliable estimates of cost or valuation are not available for those on a cost-benefit basis, they have not been capitalised. As a result, the total cost included in the balance sheet is partial.

Amounts for the current and previous four years were as follows:

Total value 1st July
Acquisitions purchased with specific donations
Acquisitions purchased with College funds
Total cost of acquisitions purchased
Value of acquisitions by donation
Total acquisitions capitalised in year
Total value 30th June
9. Investments
Balance at 1 July
Additions
Disposals
Transfer from fixed assets
Gain
(Decrease)/Increase in cash held by investment ma
Less: change in amount owed to Pembroke House
Balance at 30 June
General investments
Private placement investments
Balance at 30 June
Long-term investments:
Commercial shops
Agricultural land
Residential property
Total investment properties
Equities
Other investments
Cash in hand and at investment managers
Loans to Fellows
Less: amount owed to Pembroke House
10. Stock
Kitchen
Cellar wine
Bar
Porters' Lodge		 2023
£000
644
-
-
-
29
29
673
nagers		 2022
£000
574
-
70
70
70
644		 2021
£000
481
-
13
13
80
93
574		 2020
£000
206
275
-
275
-
275
481
2023
£000
113,439
4,988
(6,808)
2,428
408
(11)
114,444
100,665
13,779
114,444
2023
£000
2,660
10,062
22,146
34,868
62,944
11,736
4,416
758
(278)
114,443
2023
£000
28
626
24
-
678		 2019
£000
136
-
-
-
70
70
206
2022
£000
110,818
2,290
(785)
3,088
(1,958)
(14)
113,439
100,559
12,880
113,439
2022
£000
2,637
9,631
21,200
33,468
61,631
13,908
3,936
763
(267)
113,439
2022
£000
26
656
2
4
688

33

Pembroke College Notes to the accounts Year ended 30th June 2023

11. Trade and other receivables
Trade debtors
Members of the College
Debtors and prepayments - Other
Debtors due over 1 year
Trade and other receivables due within one year
12. Cash and cash equivalents
Current accounts
Bank deposits
Cash
Less: amount owed to Pembroke House
13. Short-term investments
Mill Lane deposits
14a. Creditors: amounts falling due within one year
Bank overdrafts (see note below)
Bank loan
Trade creditors
Members of the College
Accruals and deferred income
University fees
Contribution to College Fund
Taxes and social security
Holiday & Bonus accrual
Other creditors		 2023
£000
169
283
7,278
2,160		 2022
£000
72
224
1,664
648
9,890 2,608
2023
£000
-
-
0
-		 2022
£000
-
-
0
(0)
0 0
2023
£000
11,783		 2022
£000
19,387
11,783 19,387
2023
£000
1,293
107
1,481
858
4,389
10
25
62
288
318		 2022
£000
5,275
135
527
888
2,817
4
25
37
241
59
8,831 10,008
14b. Creditors: amounts falling due after more than one yea
Bank loan
Members of the College
Other loans		 r
2023
£000
1,061
314
12,900		 2022
£000
1,168
372
12,900
14,275 14,440

The original unsecured bank loan was for £2.3 million repayable over 20 years, at a floating rate of interest for the two years until 30 January 2012 and a fixed rate of 6.21% p.a. thereafter.

During 2013-14, the College borrowed from institutional investors, collectively with other Colleges, with the College's share amounting to £2.9 million. The loans are unsecured and repayable during the period 2043-2053, and are at fixed interest rates of approximately 4.4%. The College has agreed a financial covenant of the ratio of Borrowings to Net Assets, and has been in compliance with the covenant at all times since incurring the debt.

During 2017-18, the College borrowed from institutional investors, collectively with other Colleges, with the College's share amounting to £10 million. The loans are unsecured and repayable during 2058, and are at a fixed interest rate of 2.62%. The College has agreed a financial covenant of the ratio of Borrowings to Net Assets, and has been in compliance with the covenant at all times since incurring the debt.

34

Pembroke College Notes to the accounts Year ended 30th June 2023

15. Pension provisions

(Deficit) in schemes in beginning of the year
Movement in year:
Recognised in income and expenditure
Contributions paid by the College
Actuarial (loss)/profit recognised in the Statement of
Comprehensive Income and Expenditure
(Deficit) in schemes at end of the year		 CCFPS
£000
(2,131)
(205)
226
(92)		 USS
£000
(2,399)
19
-
-		 2023
£000
(4,530)
(186)
226
(92)		 2022
£000
(4,333)
(1,618)
277
1,144
(2,202) (2,380) (4,582) (4,530)
note 20b note 20a

16. Endowment funds

Endowment funds
Balance at beginning of year:
Capital
New donations and endowments
Transfers
Increase in market value of investments
Balance at end of year
Representing:
Fellowship Funds
Scholarship Funds
Prize Funds
Bursary/Hardship Funds
Travel Grant Funds
Graduate Funds
Other Funds
General endowments
Total
Analysis by asset:
Property
Investments
Cash		 Restricted
Permanent
£000
46,130		 Unrestricted
Permanent
£000
44,266		 2023
£000
£000
90,396		 2022
£000
£000
87,580
46,130
540
2,459
207		 44,266
12
-
189		 90,396
552
2,459
396		 87,580
1,170
1,645
49,336 44,467 93,803 90,396
13,948
6,667
1,041
-
5,986
1,791
11,065
8,838		 -
-
-
-
1,330
-
-
43,137		 13,948
6,667
1,041
-
7,316
1,791
11,065
51,975		 12,609
7,313
1,033
6,771
1,775
8,117
9,837
42,941
49,336 44,467 93,803 90,396
15,031
32,401
1,904		 13,119
29,805
1,543		 28,150
62,206
3,447		 26,670
3,136
60,590
49,336 44,467 93,803 90,396

35

Pembroke College Notes to the accounts Year ended 30th June 2023

17. Restricted reserves

Capital grants
unspent
£000
Balance at beginning of year:
Capital
-
Accumulated income
20,039
20,039
Transfers between funds in year
-
Increase in market value of investments
-
Capital grants
12,861
Donations
-
Endowment return transferred
-
Other investment income
197
Expenditure
(93)
Capital grants utilised
(15,801)
Movement in the year
(2,836)
Balance at end of year
17,203
Balance at end of year:
Capital
-
Accumulated income
17,203
17,203
Representing:
Fellowship Funds
-
Scholarship Funds
-
Prize Funds
-
Bursary/Hardship Funds
-
Travel Grant Funds
-
Graduate Funds
-
Other Funds
17,203
Total
17,203
18. Memorandum of unapplied total return
Included within reserves the following amounts represent the unapplied total return of the College:
Unapplied total return at the beginning of the year
Unapplied total return for the year (see note 3a)
Unapplied total return at end of year
19. Capital commitments
Capital commitments contracted for at 30th June		 Capital grants
unspent
£000
-
20,039		 Unspent
Permanent
£000
-
3,245		 Restricted
Expendable
£000
6,518
585
7,103
(2,489)
19
-
913
159
-
(804)
-
(2,202)
4,901
4,379
522
4,901
1,562
317
-
517
15
841
1,649
4,901		 2023
Total
£000
6,518
23,868
30,387
(2,549)
32
12,861
1,019
2,047
197
(2,858)
(15,801)
(5,052)
25,335
4,379
20,956
25,335
2,183
1,132
135
1,156
244
1,365
19,120
25,335
2023
£000
50,153
(685)
49,468
2023
£000
20,366		 2022
Total
£000
6,055
35,084
20,039 3,245 41,139
-
-
12,861
-
-
197
(93)
(15,801)		 (60)
13
-
106
1,888
-
(1,961)
-		 -
118
7,664
794
1,929
226
(2,412)
(19,071)
(2,836) (14) (10,752)
17,203 3,231 30,387
-
17,203		 -
3,231		 6,518
23,868
17,203 3,231 30,387
-
-
-
-
-
-
17,203		 621
815
135
639
229
524
268		 3,221
1,099
948
579
231
1,264
23,045
17,203 3,232 30,387
2022
£000
48,389
1,764
50,153
2022
£000
177

Other commitments

The College has committed to invest in various private equity/venture capital funds over the next few years. Commitments, excluding distributions which may be made total $290k (c £210k).

36

Pembroke College Notes to the accounts Year ended 30th June 2023

20. Pension schemes

(a) Universities Superannuation Scheme

DEFICIT RECOVERY LIABILITY

The latest available completed actuarial valuation of the Retirement Income Builder is at 31 March 2020 (the valuation date), which was carried out using the projected unit method.

Since the institution cannot identify its share of USS Retirement Income Builder (defined benefit) assets and liabilities, the following disclosures reflect those relevant for those assets and liabilities as a whole.

The 2020 valuation was the sixth valuation for the scheme under the scheme-specific funding regime introduced by the Pensions Act 2004, which requires schemes to have sufficient and appropriate assets to cover their technical provisions. At the valuation date, the value of the assets of the scheme was £66.5 billion and the value of the scheme’s technical provisions was £80.6 billion indicating a shortfall of £14.1 billion and a funding ratio of 83%.

The key financial assumptions used in the 2020 valuation are described below. More detail is set out in the Statement of Funding Principles ( uss.co.uk/about-us/valuationand-funding/statement-of-funding- principles ).

CPI assumption Term dependent rates in line with the difference between
the Fixed Interest and Index Linked yield curves less:
1.1% p.a. to 2030, reducing linearly by 0.1% p.a. to a long-
term difference of 0.1% p.a. from 2040
Pension increases(subject to a floor of 0%) CPI assumptionplus 0.05%
Discount rate (forward rates) Fixed interest gilt yield curve plus:
Pre-retirement: 2.75% p.a.
Post retirement: 1.00%p.a.

The main demographic assumptions used relate to the mortality assumptions. These assumptions are based on analysis of the scheme’s experience carried out as part of the 2020 actuarial valuation. The mortality assumptions used in these figures are as follows:

2020 valuation
Mortality base table 101% of S2PMA “light” for males and 95% of S3PFA for females
Future improvements to mortality CMI 2019 with a smoothing parameter of 7.5, an initial
addition of 0.5% p.a.
and a long-term improvement rate of 1.8% pa for males and
1.6% pa for females

The current life expectancies on retirement at age 65 are:

2023 2022
Males currently aged 65 (years) 24.0 23.9
Females currently aged 65 (years) 25.6 25.5
Males currently aged 45 (years) 26.0 25.9
Females currently aged 45 (years) 27.4 27.3

A new deficit recovery plan was put in place as part of the 2020 valuation, which requires payment of 6.2% of salaries over the period 1 April 2022 until 31 March 2024, at which point the rate will increase to 6.3%.

The 2023 deficit recovery liability reflects this plan. The liability figures have been produced using the following assumptions:

2023 2022
Discount rate* 5.52% 3.31%
Pensionable salary growth Year 1 5.00% 4.50%
Pensionable salary growth Year 2 5.00% 5.00%
Pensionable salary growth Year 3 to 4 4.00% 3.00%
Pensionable salary growth Year 5 to 17 3.00% 3.00%

37

Pembroke College Notes to the accounts Year ended 30th June 2023

20. Pension schemes

(b) Cambridge Colleges Federated Pension Scheme

The College operates a defined benefit pension plan for the College’s employees of the Cambridge Colleges’ Federated Pension Scheme. The liabilities of the plan have been calculated, at 30 June 2023, for the purposes of FRS102 using a valuation system designed for the Management Committee, acting as Trustee of the Cambridge Colleges’ Federated Pension Scheme but allowing for the different assumptions required under FRS102 and taking fully into consideration changes in the plan benefit structure and membership since that date.

The principal actuarial assumptions at the balance sheet date (expressed as weighted averages) were as follows:

30 June 30 June
2022 2022
Discount rate 5.20% 3.80%
Increase in salaries 3.30% 3.25%
RPI assumption 3.40% 3.45%
CPI assumption 2.80% 2.75%
Pension increases in payment (RPI Max 5% p.a.) 3.30% 3.30%
Pension Increases in payment (CPI Max 2.5% p.a.) 2.05% 2.05%

For 1 year only, we have assumed that RPI will be 9% and CPI will be 7% (2022: 11% and 9% respectively). The caps under the Rules are applied to assumed pension increases.

The underlying mortality assumption is based upon the standard table known as S3PA on a year of birth usage with CMI_2022 future improvement factors and a long-term rate of future improvement of 1.25% p.a., a standard smoothing factor (7.0) and no allowance for additional improvements (2022: S3PA with CMI_2021 future improvement factors and a long-term future improvement rate of 1.25% per annum ,a standard smoothing factor (7.0) and no allowance for additional improvements). This results in the following life expectancies:

Male age 65 now has a life expectancy of 21.4 years (previously 21.9 years). Female age 65 now has a life expectancy of 23.9 years (previously 24.3 years). Male age 45 now and retiring in 20 years has a life expectancy of 22.6 years (previously 23.2 years). Female age 45 now and retiring in 20 years has a life expectancy of 25.3 years (previously 25.7 years).

Members are assumed to retire at their normal retirement age (65) apart from in the following indicated cases:

Male Female
Active members - Option 1 benefits 64 64
Deferred members - Option 1 benefits 63 62

Allowance has been made at retirement for non-retired members to commute part of their pension for a lump sum on the basis of the current commutation factors in their calculations.

Employee Benefit Obligations

The amounts recognised in the balance sheet as at 30 June 2023 (with comparative figures as at 30 June 2022) are as follows.

Present value of scheme liabilities
Total market value of assets
Net pension liability		 2023
2022
£000
£000
(9,525)
(10,847)
7,323
8,716
(2,202)
(2,131)

The amounts to be recognised in the Statement of Comprehensive Income and Expenditure for the year ended 30 June 2023 (with comparative figures for the year ended 30 June 2022) are as follows:

Current service cost
Administration expenses
Interest on net defined benefit liability
Loss on plan changes
Total		 2023
2022
£000
£000
108
189
16
16
82
59
-
-
206
264

Changes in the present value of the Scheme liabilities for the year ending 30 June 2023 (with comparative figures for the year ended 30 June 2022) are as follows:

Present value of plan liabilities at beginning of period
Current service cost
Employee contributions
Benefits paid
Interest on plan liabilities
Actuarial (profits)/losses
Loss on plan changes
Present value of plan liabilities at end of period		 2022
2022
£000
£000
10,847
13,737
108
189
4
6
(468)
(513)
405
244
(1,371)
(2,816)
9,525
10,847

38

Pembroke College Notes to the accounts Year ended 30th June 2023

20. Pension schemes

(b) Cambridge Colleges Federated Pension Scheme (continued)

Changes in the fair value of the plan assets for the year ending 30 June 2023 (with comparative figures for the year ending 30 June 2022) are as follows:

Market value of plan assets at beginning of period
Contributions paid by the College
Employee contributions
Benefits paid
Administration expenses
Interest on plan assets
Return on assets, less interest included in Comprehensive Income and Expenditure
Market value of plan assets at end of period
Actual return on plan assets		 2023
2022
£000
£000
8,717
10,449
226
277
4
6
(468)
(513)
(23)
(22)
324
185
(1,457)
(1,665)
7,323
8,717
(1,133)
(1,481)

The major categories of plan assets as a percentage of total plan assets for the year ending 30 June 2023 (with comparative figures for the year ended 30 June 2022) are as follows:

Equities
Bonds and cash
Property
Total		 2023
2022
£000
£000
49%
52%
38%
34%
13%
14%
100%
100%

The plan has no investments in property occupied by, assets used by or financial instruments issued by the College.

Analysis of the remeasurement of the net defined benefit liability recognised in Other Comprehensive Income (OCI) for the year ending 30 June 2023 (with comparative figures for the year ending 30 June 2022) are as follows:

Return on assets, less interest included in Comprehensive Income and Expenditure
Expected less actual plan expenses
Experience gains and losses arising on plan liabilities
Changes in assumptions underlying the present value of plan liabilities
Actuarial gain/(loss) recognised in OCI (page 25)		 2023
2022
£000
£000
(1,457)
(1,665)
(7)
(6)
(804)
(945)
2,176
3,760
(92)
1,144

Movement in (deficit) during the 12 months ending 30 June 2023 (with comparative figures for the year ended 30 June 2022) are as follows:

(Deficit) in plan at beginning of year
Recognised in Statement of Comprehensive Income and Expenditure
Contributions paid by the College
Actuarial gain/(loss) recognised in OCI
(Deficit) in plan at the end of the year		 2023
2022
£000
£000
(2,131)
(3,288)
(206)
(264)
226
277
(92)
1,144
(2,202)
(2,131)

Funding Policy

Actuarial valuations are carried out every three years on behalf of the Management Committee, acting as the Trustee of the Scheme, by a qualified independent actuary. The actuarial assumptions underlying the actuarial valuation are different to those adopted under FRS102. The last such valuation was as at 31 March 2020. This showed that the plan’s assets were insufficient to cover the liabilities on the funding basis. A Recovery Plan has been agreed with the College, which commits the College to paying contributions to fund the shortfall. These deficit reduction contributions are incorporated into the plan’s Schedule of Contributions dated 21 May 2021 and are as follows:

These payments are subject to review following the next funding valuation, due as at 31 March 2023.

39

Pembroke College Notes to the accounts Year ended 30th June 2023

20. Pension schemes

(c) NOW:Pensions scheme

The College operates a defined contribution scheme in respect of certain employees. The scheme and its assets are held by independent managers. The pension charge represents contributions due from the College amounting to £229k (2020 £195k) of which £32k (2020 £22k) was outstanding at the year end. Contributions are collected by Now Pensions by Direct debit a month in arrears

(d) Summary of pension costs

Universities Superannuation Scheme
Universities Superannuation Scheme - pension provision
Cambridge Colleges Federated Pension Scheme
NOW:Pension Scheme
Death in service
Total pension costs (note 6)
Reconciliation of surplus for the year to cash flows from operating activities
Surplus for the year
Adjustment for non-cash items:
Depreciation (note 8)
(Gain) on endowments, donations and investment property
Donations in kind
(Increase) in stocks
(Increase) in trade and other receivables
(Increase)/decrease in short-term investments
Increase/(decrease) in creditors
Pension costs less contributions payable
Adjustment for investing or financing activities
Investment income
Investment management costs
Interest payable
Endowment funds invested
Gift of heritage asset
Total cash flows from operating activities
Cash flows from investing activities
Non-current investment disposal
Investment income
Endowment funds invested
Payments made to acquire non-current assets
Disposal of non-current assets
Total cash flows from investing activities
Cash flows from financing activities
Interest paid
Repayments of amounts borrowed
Total cash flows from financing activities		 2023
2022
£000
£000
822
636
(19)
1,354
198
209
229
195
8
10
1,238
2,404
2023
2022
£000
£000
14,963
5,542
2,261
2,236
(2,462)
(3,836)
(29)
10
32
(7,282)
5,138
7,603
5,685
2,774
1,942
(40)
1,341
(2,721)
(1,755)
365
926
472
475
(552)
(1,170)
15,362
16,555
2023
2022
£000
£000
3,669
3,529
686
181
552
1,170
(16,820)
(21,155)
1,142
(10,772)
(16,275)
2023
2022
£000
£000
(472)
(475)
(136)
(127)
(608)
(602)

21. Reconciliation of surplus for the year to cash flows from operating activities

22. Cash flows from investing activities

23. Cash flows from financing activities

40

Pembroke College Notes to the accounts

Year ended 30th June 2023

24. Analysis of cash and cash equivalents

Bank overdrafts
Cash at bank and in hand
Net Funds (page 28)
Lease obligations
At 30 June 2022 the College had commitments under non-cancellable operating leases as follows:
Land and buildings:
Expiring within one year
Expiring between two and five years
Expiring in over five years		 At beginning of
year
Cashflows
At end of year
£000
£000
£000
(5,275)
3,982
(1,293)
0
0
0
(5,275)
3,982
(1,293)
2022
2022
£000
£000
301
301
301
151
-
-

25. Lease obligations

26. Reconciliation and analysis of net debt

Cash and cash equivalents
Borrowings:
Amounts falling due within one year:
Bank overdraft
Unsecured loans
Borrowings:
Amounts falling due after more than one year:
Unsecured loans
Total net debt		 At 1 July
Cashflows
New finance
leases
Other non-cash
changes
At 30 June
2022
2023
£000
£000
£000
£000
£000
0
0
-
-
0
(5,275)
3,982
(1,293)
(135)
29
-
-
(106)
(5,410)
4,011
-
-
(1,399)
(14,068)
107
-
-
(13,961)
(14,068)
107
-
-
(13,961)
(19,478)
4,118
-
-
(15,360)

27. Financial instruments

2023 2022
£000 £000
Financial assets
Financial assets at fair value through Statement of Comprehensive income
Listed equity investments (note 9) 62,666 61,364
Other investments (note 9) 11,736 13,908
Financial assets that are debt instruments measured at amortised cost
Other investments (note 9) 758 763
Cash and cash equivalents (note 9, 12, 13) 16,199 23,322
Other debtors (note 11) 545 267
Financial liabilities
Financial liabilities measured at amortised cost
Bank overdraft (note 14a) 1,293 5,275
Loans (notes 14a, 14b) 14,068 14,203
Trade creditors (note 14a) 1,481 527
Other creditors (notes 14a, 14b) 1,586 1,394

41

Pembroke College Notes to the accounts Year ended 30th June 2023

28. Related party transactions

Owing to the nature of the College’s operations and the composition of the College Council (or equivalent), it is inevitable that transactions will take place with organisations in which a College Council member may have an interest. All transactions involving organisations in which a member of the College Council may have an interest are conducted at arm’s length and in accordance with the College’s normal procedures.

The College maintains a register of interests for all College Council members and where any member of the College Council has a material interest in a College matter they are required to declare that fact.

During the current and preceding year no fees or expenses were paid to Fellows in respect of their duties as Trustees.

Fellows are remunerated for teaching, research and other duties within the College as permitted by the Statutes. Fellows are billed for any private catering. The Trustees remuneration is overseen by the Stipends Committee

In addition, the College has provided loans to its Fellows for personal use, and also as part of equity share arrangements. The following amounts are included in Investments in note 9:

Loans to Fellows
The salaries paid to Trustees in the year are summarised in the table below:
From
To
£0
£10,000
£10,001
£20,000
£20,001
£30,000
£30,001
£40,000
£40,001
£50,000
£50,001
£60,000
£60,001
£70,000
£70,001
£80,000
£80,001
£90,000
£90,001
£100,000
£100,001
£110,000
£110,001
£120,000
£120,001
£130,000
Total		 2023
2022
£000
£000
758
763
2023 Number
2022 Number
34
44
9
9
6
4
3
2
0
0
1
2
4
5
2
2
1
1
1
1
3
1
0
0
0
1
64
72

The total Trustee salaries were £1,550k for the year (2022 £1,450k).

The trustees were also paid other taxable benefits (including associated employer National Insurance contributions and employer contributions to pensions) which totalled £770k for the year (2022 £725k).

42