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2021-06-30-accounts

MAGDALENE COLLEGE CAMBRIDGE

REPORTS AND ACCOUNTS

FOR THE YEAR ENDED 30 JUNE 2021

Registered Charity Number 1137542

MAGDALENE COLLEGE, CAMBRIDGE FINANCIAL STATEMENTS YEAR ENDED 30 JUNE 2021

Contents Page
Fellowship 2
Principal Officers and Professional Advisers 6
Report of the Governing Body 7
Statement of Public Benefit 16
Statement of Internal Control 19
Responsibilities of the Governing Body 20
Independent Auditors’ Report to the Governing Body 21
Statement of Principal Accounting Policies 24
Consolidated Statement of Comprehensive Income and Expenditure 31
Statement of Changes in Reserves 32
Consolidated Balance Sheet 33
Consolidated Statement of Cash Flows 34
Notes to the Financial Statements 35

Page 1

MAGDALENE COLLEGE, CAMBRIDGE FELLOWSHIP YEAR ENDED 30 JUNE 2021

FELLOWSHIP

Governing Body (Trustees of the charity)

Sir Christopher Greenwood, GBE, CMG, QC, MA, LLM (from 1 October 2020) The Rt Revd & Rt Hon the Lord Williams of Oystermouth, PC, DD, Hon DCL (Oxford), FBA (until 30 Professor M A Carpenter, ScD September 2020) J R Patterson, MA, PhD M E J Hughes, MA, PhD Professor T Spencer, MA, PhD Professor B J Burchell, MA and PhD (Warwick) S Martin, MA, PhD K Patel, MA, MSc and PhD (Essex) (until 30 September 2021) Professor T N Harper, MA, PhD N G Jones, MA, LLM, PhD Professor H Babinsky, MA and PhD (Cranfield) Professor P Dupree, MA, PhD S K F Stoddart, MA, PhD T A Coombs, MA, PhD H Azérad, MA, PhD A L Hadida, MA, PhD C S Watkins, MA, MPhil, PhD A L Du Bois-Pedain, MJur (Oxon) S C Mentchen, MA S J Morris, BA (Newcastle), FCA, IPFA R M Burnstein, MB, BS, PhD G P Pearce, MA, PhD C Brassett, MB, BChir, MChir, FRCS M J Waithe, MA (Leeds), PhD C D Lloyd, MA (Kent) R L Roebuck, BA, MEng, PhD Professor A K Bennison, BA, PhD (London) L C Skinner, BSc, MPhil, PhD E So, MEng, PhD, CEng W T Khaled, MA, PhD A Ercole, BA, MA, PhD, PG Dipl, MB BChir, FRCA T G Euser, PhD, MSc (Twente) J M Munns, MA (Durham), MPhil (Bristol), PhD, FRSA S A Bacallado, PhD Professor S Dubow, BA (Hons), DPhil (Oxon) Professor S J Eglen, DPhil N R Carroll, MA, MB, BChir J J Orr, PhD The Revd S Atkins, MA Professor P J Lane, MA, PhD M F Ahmed, MPhil, MSc, PhD (until 31 August 2021) A Meghji, MA, MPhil, PhD M C Skott, PhD A Mills, DipABRSM, MA,BCL (Oxon), Barrister at Law (Gray’s Inn) (from 1 September 2021)

Page 2

MAGDALENE COLLEGE, CAMBRIDGE FELLOWSHIP (continued) YEAR ENDED 30 JUNE 2021

Emeritus Fellows

Professor P J Grubb, ScD R Hyam, LittD P E Reynolds, ScD Professor J E Field, OBE, PhD, FRS (deceased 21 October 2020) His Honour C F Kolbert, MA, PhD Professor N Boyle, LittD, FBA Professor R J S Spence, MA, PhD R Luckett, MA, PhD (deceased 19 November 2020) Professor E Duffy, DD, FBA Professor N Rushton, MD Professor H A Chase, ScD, FREng

Research Fellows

F Exeler, PhD (Princeton), MA (Princeton), MA (Humboldt) (until 31 July 2021) O F R Haardt, PhD (until 30 September 2020) J C Jarrett, PhD (until 30 September 2021) A L Gregory, PhD (until 11 June 2021) S Caputo, BA (Cardiff), MSc (Edinburgh) L M Kreusser, MSc (Kaiserslautern) (until 31 July 2021) Glazer-Eytan, PhD (from 1 October 2020) A Baez-Ortega, PhD (from 1 October 2020)

Senior Research Fellows

P M Steele, BA, MPhil, PhD C N Spottiswoode, BSc, PhD Professor J R Raven, MA, PhD A P Coutts, BSc, MSc, PhD A Neumann, MA, PhD S Caddy, PhD Professor F Aigbirhio, BSc, MA, DPhil, CChem, FRSC

Life Fellows

M D Billinge, MA, PhD Professor W R Cornish, Hon QC, LLD, FBA A R Thompson, MBE, MA, MPhil Professor T H Clutton-Brock, ScD, FRS S Halper, PhD Professor E H Cooper, LittD, FBA Professor T A J Cockerill, MA, MPhil (Leeds), PhD (Manchester) Professor E Rothschild, CMG, MA M Hughes, MB, BChir, PhD (deceased 10 August 2020)

Page 3

MAGDALENE COLLEGE, CAMBRIDGE FELLOWSHIP (continued) YEAR ENDED 30 JUNE 2021

Bye-Fellows

D Gaffney, MA (until 30 September 2020) J Bodey, BA (until 30 September 2020) O F R Haardt, PhD (from 1 October 2020) Y P G Poon, MSc (from 1 October 2020 until 30 September 2021) E Karayiannides, MPhil (from 1 October 2020 until 30 September 2021) C Woodall, MA (from 1 October 2020 until 30 September 2021)

Visiting Fellows

There were no Visiting Fellows during the year

Honorary Fellows

HRH the Duke of Gloucester, KG, GCVO, MA Professor Sir John Boardman, MA, FBA, Hon RA Professor Sir David Hopwood, MA, PhD, DSc (Glasgow), FRS A B Gascoigne, MA, FRSL Professor H H Vendler, AB, PhD (Harvard), Hon Litt D J C F-Simpson, CBE, MA, FRGS Sir Colin Corness, MA Professor Sir Richard Jolly, KCMG, MA, PhD (Yale) Professor Sir John Gurdon, PhD, Hon ScD, Hon DSc (Oxon), FRS D J H Murphy, MA Professor D C Clary, ScD, FRS The Rt Hon Lord Malloch Brown, KCMG, MA R W H Cripps AM The Rt Hon Lord (Igor) Judge, Kt, PC, MA Sir Christopher Greenwood, GBE, CMG, QC, MA, LLM (until 30 September 2020) The Rt Hon Sir Andrew Morritt, PC, CVO, MA R H Vignoles, BA, BMus, ARCM, Hon RAM, Hon FRCM The Hon Yan Lung Wong, SC, MA, JP Khoon Hong Kuok, BA (Singapore) D D Robinson, CBE, MA and MA (Yale), FSA, DL Professor S Springman, CBE, PhD, FREng C I von Christierson, MA HRH Sultan Nazrin Shah, BA (Oxon), PhD (Harvard) L L Cardozo Kindersley, MBE Dame C A Duffy, DBE, BA (Liverpool) A Tennant, BA, MIB T Cripps, BA, MBA The Rt Revd & Rt Hon the Lord Williams of Oystermouth, PC, DD, Hon DCL (Oxford), FBA Professor the Lady Williams of Oystermouth, MA M C Newell, BA The Very Revd Dr D M Hoyle, MBE, MA, PhD C B M Derham, MA The Rt Hon Brenda Marjorie Hale, Baroness Hale of Richmond, DBE, PC, FBA

Page 4

MAGDALENE COLLEGE, CAMBRIDGE FELLOWSHIP (continued) YEAR ENDED 30 JUNE 2021

Fellow-Commoners

R L Skelton, MA A I J Fitzsimons, Diplômée de l'ISIT (Paris) J J Hellyer Jones, MA, FRCO B Fried, MBA (Pennsylvania) N Raymont, BSc (Econ), FCA M R W Rands, BSc, DPhil (until 30 September 2020) P J Marsh, MPhil, Honorary PhD (University of Central England) R V Chartener, AB (Princeton), MPhil, MBA (Harvard) C H Foord, MAAT, Assoc CIPD A Ritchie, QC, MA C V S Brasted-Pike, MA, MSci, PhD G H Walker, MA, LRAM, PGDip (RAM) H Critchlow, PhD S Ravenscroft, PhD J Woodall, MA (Oxon) (until 30 September 2020) L Masuda-Nakagawa, PhD (Tokyo) F Schuery, MA

Page 5

MAGDALENE COLLEGE, CAMBRIDGE PRINCIPAL OFFICERS AND PROFESSIONAL ADVISERS YEAR ENDED 30 JUNE 2021

Address

Address
Magdalene College
Cambridge
CB3 0AG
Officers
Master: Sir Christopher Greenwood, GBE, CMG, QC, MA, LLM (from 1 October
2020)
President: Dr M E Jane Hughes, MA, PhD (until 30 September 2021)
Professor B J Burchell, MA and PhD (Warwick) (from 1 October 2021)
Senior Tutor: Dr Stuart Martin, MA, PhD
Senior Bursar: Mr Steven Morris, BA (Newcastle), FCA, IPFA
Development Director: Mrs Corinne Lloyd, MA (Kent)
Professional Advisers
Auditors: Peters Elworthy & Moore
Salisbury House
Station Road
Cambridge CB1 2LA
Bankers: Lloyds Bank
3 Sidney Street
Cambridge CB2 3HQ
Property Managers: Cheffins Commercial
(Commercial) Clifton House
1-2 Clifton Road
Cambridge CB1 7EA
Property Managers: Savills
(Agricultural) Olympic House
Doddington Road
Lincoln LN6 3SE
Securities Managers: Baillie Gifford & Co
Calton Square
1 Greenside Row
Edinburgh EH1 3AN
Solicitors: Ashtons Legal
Chequers House
77-81 Newmarket Road
Cambridge CB5 8EU

Page 6

MAGDALENE COLLEGE, CAMBRIDGE REPORT OF THE GOVERNING BODY YEAR ENDED 30 JUNE 2021

The Governing Body of Magdalene College presents its Reports and Accounts for the year ended 30 June 2021.

STATUS

The College of Saint Mary Magdalene, one of 31 Colleges in the University of Cambridge, commonly called Magdalene College, was re-founded by Lord Audley of Walden in 1542. The 1542 Charter provides that the College is ‘ for the advancement of knowledge, arts, learning and virtue and for the advancement of moral studies in the University of Cambridge. ’ The College became a registered charity on 18 August 2010. The Charity Commission of England and Wales is therefore the principal regulator for the College.

The College is a legally independent corporation within the collegiate University of Cambridge. A system of University-wide committees exists to plan and discuss the joint affairs of the collegiate University.

AIMS AND OBJECTIVES

The Governing Body has adopted a Strategic Plan to determine the future direction and size of the College. This plan identifies the priorities to be addressed to maintain and enhance teaching provision and the College’s academic resources, and to provide appropriate residential and recreational amenities.

The College’s charitable purpose as a place of religion, education, learning and research is clearly reflected by objectives in the Strategic Plan:

GOVERNANCE

The Governing Body of the College comprises the Master and the Fellows (Classes A, B and C, if aged below 67 years) and they are de facto the trustees of the College. This body is constituted and regulated in accordance with the College Statutes (revised 1997) and is responsible for the strategic direction of the College, for its administration and for the management of its finances and assets. It meets at least seven times a year under the chairmanship of the Master. The Presidents of the Middle Common Room (MCR) and the Junior Common Room (JCR) attend for unreserved business.

The Governing Body acknowledges its responsibility to act with prudence and care and to ensure the College complies with relevant laws and regulations. The Governing Body elects all Fellows of the College. Information is given to new Fellows regarding the College and how it is governed.

The principal committees of the Governing Body include the:

Page 7

MAGDALENE COLLEGE, CAMBRIDGE REPORT OF THE GOVERNING BODY (continued) YEAR ENDED 30 JUNE 2021

As secretary to the Governing Body, the Senior Bursar maintains a register of interests for members of the Governing Body. Declarations of interest are standing items on the agendas of the Governing Body and its principal committees. The Governing Body has established a Remuneration Committee, with a membership which is independent from it, to review and to advise on the benefits appertaining to Fellows. This Committee had no requirement to meet during the financial year given there were no changes affecting Fellows benefits during the year. The Committee’s role is to review relevant policy proposals, review its own remit and then advise the Governing Body accordingly. In terms of the College’s pay policy, including that of senior management, a formal triennial review against comparative roles is undertaken to benchmark pay and subsequent recommendations appertaining to Fellows / College Officers are made to the Remuneration Committee, which will advise the Governing Body accordingly. Additional disclosure on the salaries of Fellows of the College who form the trustee body is given in the Notes to the accounts.

The Master is the chairman of the trustees and has a duty to promote the welfare of the College and to ensure the College maintains an appropriate learning environment for its members. The President, as a senior fellow, supports the interests of the fellowship and acts as the vice-master. The Senior Tutor has day-to-day responsibility for the admission, education and welfare of undergraduate and postgraduate students and supporting the research activities of the College. The Governing Body appoints Admissions Tutors to support the Senior Tutor in the selection of suitable students for admission to the College. The Senior Bursar has responsibility for the estates, finance and administration of the College.

The College appoints a Director of Studies for each undergraduate and provides small group teaching in addition to the teaching provided by the University. The College also provides a Tutor for each student and access to other forms of pastoral care, including a Chaplain, Nurse and Counsellors. Together, the Dean and the Tutors have responsibility for maintaining standards of behaviour and good order in the College.

Members of the MCR and the JCR elect annually an executive committee to support and promote their welfare. The College makes grants to these student bodies, as well as to sports and cultural societies.

COVID-19 VIRUS: THE GLOBAL PANDEMIC

The Covid-19 virus, which has caused a global health pandemic resulting in several ’lockdowns’, initially in March 2020, and then subsequently in December 2020 and until March 2021, has had a profound impact on the citizens of the UK. This has included the University of Cambridge and the constituent colleges of the collegiate University. The effect was immediate as the University and colleges closed all but essential operational buildings and transferred teaching and research online from March 2020 and for the remainder of that academic year. Most resident students, in accordance with government travel advice at that time, returned home whilst the University and colleges ensured all remaining resident students were permitted to stay in college accommodation and supported them accordingly.

The University has significantly contributed to the national effort to overcome the challenges presented by the virus through its research efforts to extend knowledge of the virus and by developing significant testing capacity. The clinical school and medical Fellows across the colleges were part of the clinical care effort during the first wave and the immediate months thereafter.

During the ‘lockdown’ periods the College has maintained its essential operational services, given it had significant numbers of students resident, whilst providing online teaching and examination assessment to all of its students wherever they were located. College staff have been otherwise sent home as part of the government’s prevailing advice. As the lockdown measures have been steadily relaxed the College responded by returning its staff to work in College, whilst staff who were able to work from home have been working in a hybrid fashion.

Whilst the Michaelmas Term 2020 started with hope and a range of social, pastoral and in person teaching services, Covid-19 cases in the student population were numerous and this led to the curtailment of facilities and services in College and the wider University in order to contain the outbreak. The government then mandated a return to home

Page 8

MAGDALENE COLLEGE, CAMBRIDGE REPORT OF THE GOVERNING BODY (continued) YEAR ENDED 30 JUNE 2021

protocol for students for the Christmas vacation 2020 and then the majority of students were studying from home until Easter 2021.

The University and the colleges have worked collaboratively since the start of the pandemic with joint planning and subsequent recovery streams. This included sharing resources over student support, medical advice and scenario planning. The aim has been to protect and support the University’s students and to provide a fair means of assessment in the absence of a normal examination process. A comprehensive plan for reopening the University was formulated in close consultation with the City Council and local Public Health agencies. The University and the colleges have together established a comprehensive weekly testing programme for resident students as a key tool to identify and prevent infections during the University terms. Participation rates amongst the student population have been high and generally students have acted in a highly responsible manner. The College established a senior officers’ ‘Gold’ team from the outset of the pandemic to respond in a rapid manner to the issues arising from the pandemic.

The pandemic has had a significant financial impact on the College. The principal matters up to 30 June 2021 included the loss of student rental income following the departure of the majority of students during the lockdown phases and far lower commercial rental income for each quarter of the financial year. The value of the College’s commercial property portfolio has also been adversely affected but substantially recovered from the low point in June 2020. Finally, revenues from conferences during the summer 2020 were negligible.

PROGRESS MADE DURING THE YEAR

The pandemic has had a highly disruptive influence on students and academics and college life in general. The College has had to adjust its plans and future intentions to direct its attention to the core activities of supporting its students. Financial support funds have not been reduced and indeed have been increased to help to support our students.

The College is always striving to improve its own academic standards and is active in promoting the wider collegiate University’s standing in terms of teaching and research and the position of the colleges within it. The College aims to build upon its existing academic strengths by recruiting Fellows who are outstanding in their field of study and by admitting talented students.

The new Master Sir Christopher Greenwood took up his office in September 2020 and was warmly welcomed back to the College, and has since been leading the College through this difficult period.

Construction works on the College’s New Library building were completed in February 2021, some six months later than anticipated due to the disruptive impact of the pandemic. Site operations recommenced in May 2020 following the first lockdown and a revised completion timetable agreed with the contractor. Although the construction period has exceeded two years the new facility provides a significant enhancement to the College’s estate for its current and future members. Following its opening for use it has been necessary to restrict numbers of readers and their access at times in the new library in order to maintain a safe environment.

The success of the Future Foundations fundraising campaign has made the New Library possible and, thanks to extremely generous support from donors, the campaign has in fact exceeded the College’s own expectations. The College has now exceeded the £25m total target when cash donations and future pledges are taken into account.

The Governing Body had previously decided to match, for its permanently employed staff, pay rates set by the Living Wage Foundation (outside of London), excluding other generous benefits provided to employees of the College. The College will continue to keep its pay policy under regular review, taking account of local and national recruitment conditions and requirements. The national lockdowns have led to the need for the College to require the vast majority of its staff to remain at home. Given the sudden financial loss of income and now spanning two financial years, the College, along with other Cambridge colleges, has participated in the government Coronavirus Job Retention Scheme. It did decide to top-up the salaries of all staff on furlough to 100% of their normal salary. At the height of the lockdowns the College had over two-thirds of its staff on the furlough scheme but since then staff have steadily returned to their roles in College. The income from this Job Retention Scheme is shown under Other Income within the accounts.

Page 9

MAGDALENE COLLEGE, CAMBRIDGE REPORT OF THE GOVERNING BODY (continued) YEAR ENDED 30 JUNE 2021

FINANCIAL REVIEW

Scope of Financial Statements

The financial statements include the accounts of Magdalene College and its subsidiary undertaking.

Sources of Funding

The principal sources of income of the College are:

Results for the Year

The financial results for the year are given as follows:

Total Income
Total Expenditure
Surplus before investment gains or changes to pension schemes
Gain/(loss) on investments
Actuarial (loss)/gain on pensions
Total Comprehensive Income		 2021
£000
10,561
(9,526)
1,035
9,445
653
11,133		 2020
£000
% Change
19,749
-46.5%
(10,310)
-7.6%
9,439
-89.0%
(3,548)
+166.2%
(187)
+449.2%
5,704
+77.6%

The College deems it prudent to plan for a modest recurrent surplus to provide stability and to allow for new funds for reinvestment.

Income

Overall income (before investment gains and actuarial pension changes) has decreased by 46.5% when compared to the previous year. This was due to receipt of capital donations for the New Library during 2019-20 given towards the ‘Future Foundations, The Campaign for Magdalene’ as well as the full year impact of the pandemic on the College’s accommodation, conferences and commercial property revenues. It is, however, offset by the reversal of the capital losses on investment values measured at June 2020 if Comprehensive Income is compared year on year.

Income from academic fees and research income was higher than the previous year given more students were admitted and given that research income was slightly higher.

Income from College-provided accommodation and catering was £1,861k (£3,508k for 2019-20), a reduction of 46.9% on last year. Conference revenues were decimated due to the pandemic as the conference period is predominantly summer 2020. Whilst college member accommodation income was largely comparable to 2019-20, catering sales to members was much reduced during the extensive lockdown periods falling within the year. As stated above the College has participated in the government’s job retention scheme and received £310k during this financial year.

Page 10

MAGDALENE COLLEGE, CAMBRIDGE REPORT OF THE GOVERNING BODY (continued) YEAR ENDED 30 JUNE 2021

Investment income decreased by 11.9% to £3,526k (£4,003k previous year). Whilst new endowment capital invested into securities combined with positive market returns has led to higher actual income, in anticipation of reduced future real investment returns the spending rate on a total return basis was reduced in 2020. Rental income from the commercial property estate substantially decreased (by 11.6%) due to the adverse impact of the pandemic on rents throughout the year. The portfolio has significant exposure to restaurant and retail tenants. Whilst it has been possible to re-let void units following the business failure of several restaurant groups it will take some years before the market recovers to pre-pandemic levels and consequently this income stream.

Total donation income was £1,657k (£8,870k 2019-20), representing a natural reduction as the fundraising campaign reached maturity during 2019-20.

Expenditure

Expenditure on education has slightly decreased to £4,454k (£4,610k previous year), which compares to £2,773k received (£2,604k previous year) directly from academic fees, providing a calculated deficit on educational activity of £1,681k (£2,006k previous year). This derives from a fall in teaching costs as teaching was largely online but offset to some extent by providing more scholarships and awards. Still expenditure on education accounts for 46.8% (previous year 44.7%) of total expenditure.

Expenditure on College-provided accommodation and catering decreased to £4,119k (£5,195k previous year) again due to minimal activity in the year due to Covid-19 related restrictions. Staff costs related to accommodation and catering and conferences decreased by over 20% in line with the massive curtailment of catering and conference activity.

Total staffing costs decreased in the year by 12%, amounting to £4,249k (£4,822k previous year) or 44.6% of total costs (46.8% the previous year). This reflects the large-scale disruption by the pandemic on normal college site based activities and the need to both cease or minimise the scale of services. The College continued to pay staff at 100% of salaries despite a significant proportion being unable to work and thus ‘on furlough’ as explained above. Towards the beginning of the financial year the College made no general pay award in line with the policy of the higher education sector for all employees, but with an amount given to staff on lower pay rates in accordance with the College’s policy position to match the ‘Real Living Wage’ (outside of the London area).

The Governing Body remains concerned about the long term costs of providing defined benefit pensions, and whilst it has taken steps to try to limit future liabilities by ceasing to offer a defined benefit scheme to new non-academic staff, many current employees participate in a defined benefit salary scheme . There has been a decrease in the FRS 102 pension deficit, £1,878k (£2,628k 2019-20), with the deficits for CCFPS and USS schemes decreasing. The USS pension provision movement is included in Other Expenditure.

Depreciation costs for operational buildings remained similar at £1,349k (£1,347k previous year).

College net assets increased by £11.1m to £195.4m from £184.3m in 2019-20. As the construction phase of the New Library completed during the year, the costs associated with the build have been transferred to fixed assets. New donations received, principally for the New Library or for new endowment capital, were also added to net assets. Despite the longer-term economic uncertainty financial markets have seen a very positive year and therefore there has been an increase in valuations over the course of the year. This amounted to £11.9m for both investment portfolios within the endowment, and a partial reversal of the 2019-20 decrease in the capital value of commercial property.

Capital Expenditure and Maintenance

The College's operational assets, the largest asset class of the College, remain a financial pressure for the College. Capital expenditure (separate from building maintenance) for the year amounted to £5.7m. The College commissions a rolling five-year condition survey of its operational estate which informs its forward looking five-year maintenance plan. The maintenance programme is designed to maintain and improve the estate and additional resources have been allocated to it in recent years, recognising the need to increase investment in the long-term maintenance of its operational estate. The programme has had to be reviewed and partially restored as the College aims to recover from the pandemic.

Page 11

MAGDALENE COLLEGE, CAMBRIDGE REPORT OF THE GOVERNING BODY (continued) YEAR ENDED 30 JUNE 2021

Investment Policy and Performance

The College manages its investments in securities or its financial assets and property to produce the highest return consistent with the preservation of capital value in real terms for the long term and given the associated risks. The principal responsibility of the Governing Body in investing the College's endowment is to ensure the real value of the endowment is maintained after spending, consistent with the risk/return profile adopted and within a suitably diversified portfolio. The Governing Body expects, within the scope of this fiduciary duty, its fund managers to engage actively with companies to promote and support acceptable standards of practice in respect of their business activities and how they impact on their employees, the environment and the communities in which they operate. The Investments Committee undertakes an ongoing review of its responsible investment policy and made a substantive review of its policy during the year. The Governing Body approved a statement of investment principles, which clearly sets out the investment objectives, risk appetite and responsible investment policy, during the year. The purpose of the endowment is to preserve the real value after making distributions and inflation and to provide a steady reliable cashflow to support the college. The College expects its fund managers to integrate responsible investment approach and to align with the principles of the UN Compact.

The College holds securities based portfolio which was valued at £51.5m (£41.6m previous year). Its principal fund manager is Baillie Gifford (managing £46.3m in 2020-21 and £38m previous year). The College has a duty to maximise return from its investments, but it does so in a manner to be consistent with the College’s charitable mission. The College also has direct property and agricultural land holdings (£40.9m in 2020-21). The direct property, which is managed by Cheffins, is held as a long-term strategic asset, with the policy of maximising yield, whilst the agricultural land is managed by Savills.

The Investments Committee agreed to reduce the total return policy from 3.25% to a 3.0% spending rule in 2020 which resulted in a drawdown (from capital and income) of £1,109k (£1,093k in 2019-20). The unapplied return fund provides a contingency sum in the event of falling values in financial markets and permits drawn down in adverse market conditions.

The College has been delighted with the performance of the Baillie Gifford responsible equity fund over the course of the year and during the period of the pandemic. The fund returned 23.3% against a market index of 25.1%. This performance was improved further by the performance of the multi-asset Baillie Gifford fund which returned14.6%. The responsible equity fund policy is to exclude certain sectors such as fossil fuel producers, thermal coal and tar sands, and the production or sale of alcohol, tobacco, armaments, and gambling. The fund also only invests with businesses which operate in a manner which is consistent with the UN’s Global Compact Principles. The fund, therefore, has a strong engagement aspect to it and the fund manager sets broad engagement themes at the start of each year. The fund manager has been working with the College to develop a responsible variant of the multi asset fund, which is expected to be launched in 2022.

College endowment stood at £92.5m (£80.6m in the previous year). The property portfolio (the Cambridge properties), valued at £39.2m at the year end date, and returned 9.0% over the course of the year. This performance follows on from a difficult period early on in the pandemic and a subsequent recovery over the course of the year. The portfolio still has very few voids and has experienced a difficult disruptive period as several restaurant businesses failed and the retail sector was largely closed. The portfolio has significant retail and hospitality sector exposure and therefore experienced a challenging period but new tenants have emerged and units have been successfully re-let. It has, though, meant rent collection for the year has been difficult with tenants needing to close their premises due to lockdown restrictions.

Donations and Fundraising

Magdalene’s primary fundraising efforts are directed at raising monies through major donations as well as by regular giving, to add to the College’s endowment. Key objectives for the College include teaching, research and student support and in the short-term, the construction of a New Library, which now provides exceptional learning resources for the students. In 2017 an ambitious fundraising campaign was launched to raise £25m over a five-year period. The central themes being student support; the New Library; the restoration of the Pepys Library; and an improvement of the fabric of the College Estate. At this stage the College has achieved its campaign target of both cash donations and future pledges are combined, which is an excellent result.

Page 12

MAGDALENE COLLEGE, CAMBRIDGE REPORT OF THE GOVERNING BODY (continued) YEAR ENDED 30 JUNE 2021

The ongoing support of our Members, friends and the Fellowship is particularly welcome and appreciated during these trying economic times. Over the course of 2020-21, donations to the College exceeded expectations in the midst of the pandemic, and which led to another excellent year for the Campaign and the College is immensely grateful to its members and supporters. The costs of fundraising efforts were lower at £240k compared with £273k for 2019-20. The significant progress made with the campaign to-date is very pleasing and this acts as a sound basis for meeting the College’s campaign objectives.

As a result of the pandemic, the College initially launched a new Emergency Fund aimed at raising new donations for its students and to support the operations of the College with donations being unrestricted in nature. This was further adapted to an unrestricted giving fund. The College has also decided to defer, for the time being, its plans to fundraise for the restoration of the Pepys building.

The College is registered with the Fundraising Regulator and continues to develop a shared understanding and agreement for activities concerning alumni, be it communications, attendance of events and use of data. The College has a Data Protection Statement which governs the use of any personal data held and how it is used and the College insists alumni grant their consent in holding personal data. The College did not engage professional fundraisers during the year and does not seek to raise funds from members of the public.

Reserves, Endowment Funds and Associated Policy

Total College reserves and funds amounted to £195.4m. Within the College's endowment funds there are almost 100 trust funds supporting the College in achieving its aims.

These reserves are represented by the College’s operational estate and to a large extent, the permanent endowment assets and therefore are not available as income funds to be spent. Collectively the College’s maintains its free revenue reserves and its earmarked designated reserves, after taking account of the pension deficit. These are liquid unrestricted funds. The Governing Body considers it prudent to hold sufficient unrestricted reserves and appropriate earmarked reserves in the event of major variations to the College’s income and expenditure and has concluded that its general unrestricted free reserves should be 20% of annual income and that its building reserve should represent 1% of the insurable value of the operational estate. Together this amounts to £3.6m.

Unrestricted Reserves shown in the Balance sheet £117.6m Of which constitute fixed and heritage assets £108.3m Less pension provisions £ 1.9m Leaving unrestricted liquid reserves £ 7.4m Target Free Reserves in accordance with College Policy £ 3.6m

After taking these specific funds into account and a specific building repairs fund for its commercial and operational property, the College has a sufficient level of general funds available as a contingency measure to support its operations during the pandemic.

Cash Flow and Treasury Management

The College’s treasury management policy requires cash deposits to be spread across a range of counterparties, all of which must be at least Fitch A credit-rated. Net cash funds decreased by £6,151k, from £10,446k to £4,295k over the year, following expenditure on the final construction phase of the new library and investment of new endowment capital. Cash levels have reduced but still remain elevated as a result of the need to maintain liquidity given the uncertainty caused by the pandemic.

Going Concern

A statement in respect of the College and its financial sustainability is given in the Statement of Principal Accounting Policies and explains that the financial statements have been prepared on a going concern basis. The college plans ahead and prepares detailed budgets looking three years ahead and has undertaken some financial scenario planning. The college also holds a healthy level of liquid funds to meet unexpected demands or changes in income streams.

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MAGDALENE COLLEGE, CAMBRIDGE REPORT OF THE GOVERNING BODY (continued) YEAR ENDED 30 JUNE 2021

PRINCIPAL RISKS

The College maintains a Major Risks Register that identifies what it considers the major risks to which the College is exposed and their assessed impact and probability of occurrence. As outlined in the Governing Body’s statement on Internal Controls the risk register is reviewed regularly by the principal College Officers and the Finance & General Purposes Committee, and then final consideration by the Governing Body. As far as is practical the College then takes additional measures to mitigate key risks and where appropriate insurance cover is put in place. Nevertheless, the College is exposed to a variety of risks. Presently the principal known risks include

The global pandemic initially has taken the world by surprise and has had an immediate adverse impact on the College’s finances through a fall in its income. Although this was unexpected and the 2020-21 academic year has been challenging and disruptive, the College has taken steps to manage the financial impact and has sufficient unrestricted liquid assets to fund revenue shortfalls over the coming years. The College has also, again in collaboration with the University and other colleges, planned a number of measures to provide a safe environment for its staff and students. Relevant new policies have been developed to reduce contact between individuals and limit any spread of the virus and thus any consequential operational impact.

The College through its own financial planning and operational management aims to mitigate the impact or set aside resources in the event of such risks taking place. The risk register is due to be reviewed. Across the collegiate university the University and the colleges work collectively to identify and manage common risks and share steps to manage known risks.

FINANCIAL OUTLOOK AND PLANS FOR THE FUTURE

The pandemic has led to a health and accompanying economic crisis for the UK. The recovery process though has started with vaccination levels across the population now mature which is permitting economic activity to broaden and deepen. However, uncertainty in respect of the impact of the virus on the economy is significant making longer term planning difficult. Central banks and governments across developed economies have lowered interest rates and provided significant fiscal and monetary measures to provide confidence and replace lost demand. Short-term falls in commodity prices have completely reversed and this coupled with resurgent economic demand is pushing inflation higher. Supply chain disruption is adding to price demand tensions which has been acute in the cost of supply to natural gas.

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MAGDALENE COLLEGE, CAMBRIDGE REPORT OF THE GOVERNING BODY (continued) YEAR ENDED 30 JUNE 2021

The pandemic has been, and is expected to continue to be, a challenge for the Higher Education sector, be it uncertainty over admissions by international students, loss of charitable research income, or loss of endowment income. Recovery though is well under way and the long term prospects remain positive.

The College set a deficit budget for 2020-21 and in 2021-22 due to the financial losses from Covid-19. Whilst significant cost reductions were made, additional resources have been planned in the budget as part of the recovery period. The level of uncertainty remains elevated and thus the College has significant liquidity funds in the event of adverse financial effects arising from the virus.

As the College uses its endowment to subsidise the costs of education and research, as well as the costs of accommodation and catering for its members, the performance of its investments continues to be central to the very long-term financial stability of the College. The longer term costs of defined benefit pension schemes are of concern and the financial predicament of USS is of particular concern and increased deficit recovery contributions expected in 202122.

A feasibility study for the Pepys Building’s restoration has been undertaken, and following the appointment of architects, a pre-planning application has been submitted to the local authority. However, this project has had to be deferred due to the pandemic and no new financial commitments will be made until the wider financial position for the College is clearer.

More immediately much effort has gone into preparations for the new academic year ensuring the teaching and general College communal facilities and services are ready for returning students and compliant with government Covid regulations. It is expected to be a challenging period as infection rates from the virus continue to be high.

Approved by the Governing Body on 21 October 2021

C J Greenwood S J Morris Master Senior Bursar

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MAGDALENE COLLEGE, CAMBRIDGE STATEMENT OF PUBLIC BENEFIT YEAR ENDED 30 JUNE 2021

The Governing Body is satisfied that the activities as described in these reports and accounts meet the public benefit requirements of a registered charity and to its regulator the Charity Commission.

Objects

By maintaining an academic community of the Master, Fellows, Scholars and other students the College is fulfilling its charitable objects as a place of religion, education, learning and research within the University of Cambridge.

Education

The College provides an education for some 391 (2020: 375) undergraduate and 149 (2020: 132) postgraduate feepaying students which is recognised internationally as being of the highest standard. The education develops students intellectually and advances their leadership qualities and interpersonal skills, and so prepares them to play full and effective roles in society. In particular, the College provides:

Research

In the same way the College advances knowledge and learning through:

Libraries

The College Library provides a valuable resource for students and Fellows of the College. The College also maintains an Old Library for its members and members of other Colleges and the University of Cambridge more widely, and for external scholars and researchers.

The Pepys Library, which is a collection of international significance, provides an educational resource for academics, allows access to organised tours by local children and institutions, and is regularly open for visits by the general public.

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MAGDALENE COLLEGE, CAMBRIDGE STATEMENT OF PUBLIC BENEFIT (continued) YEAR ENDED 30 JUNE 2021

Beneficiaries

The resident members of the College, both students and academic Fellows/staff, are the primary beneficiaries and are directly engaged in education, learning or research.

However, beneficiaries also include: students and academic staff from other Colleges in Cambridge and the University of Cambridge more widely, visiting academics from other higher education institutions, and alumni of the College who have an opportunity to attend educational events at the College or use its academic facilities and take meals at the common table. The general public are also able to attend various educational activities in the College such as Open Garden exhibitions, and the College’s educational festivals. Subject to certain reasonable restrictions, the grounds of the College are open to the general public on most days of the year without charge.

Admissions

The College admits as students those who have the highest potential for benefiting from the education provided by the College and the University and recruits as Fellows and academic staff those who are able to contribute most to the academic excellence of the College, regardless of their financial, social, religious or ethnic background:

The focus of the College is strongly academic and students need to satisfy high academic entry requirements.

The College charges the following fees:

Student Support

In order to assist undergraduates entitled to student support the College provides, through a scheme operated in common with the University and other Colleges (the Cambridge Bursary Scheme), bursary support for those of limited financial means. (For the academic year 2020-21, the number of awards made was 81, out of a Home/EU undergraduate population of 308; 57 of the awards were at the maximum value of £3,500; and the average value of the awards was £3,026.) The scheme is approved by the Office of Fair Access and provides benefits at a substantially higher level than the minimum OFFA requirement. Supplementing the Cambridge Bursary Scheme, the College is committed to raising funds to award an enhanced bursary to every undergraduate eligible for the scheme’s maximum £3,500 award. During 2020-21 the College was able to support 55 undergraduate students through this enhanced bursary scheme and a further 34 first, second and third year undergraduates were assisted through the ‘top-up’ bursary trial scheme.

To support postgraduate students, the College provides substantial financial support. This includes several scholarships to fund fees and living costs and ‘top-up’ to fill shortfalls in students’ funding packages. The College has also established a Postgraduate Research Fund to assist postgraduates with expenses associated with research conferences and activities, usually in conjunction with the University. Awards are based upon academic criteria as well as the financial position of students. During the year the College provided financial assistance amounting to £455k from these schemes.

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MAGDALENE COLLEGE, CAMBRIDGE STATEMENT OF PUBLIC BENEFIT (continued) YEAR ENDED 30 JUNE 2021

The College also offers support to all students through a grant scheme to assist with academic materials, supporting the costs of related short courses (e.g. language studies), and attendance at conferences. These awards are given following an evaluation of the academic relevance and the financial means of the student. The College usually also provides a range of annual travel awards to provide opportunities to travel to complement academic study however, due to the pandemic all travel and vacation study grants have been suspended.

The Governing Body also approves annual prizes and scholarships for undergraduates obtaining outstanding examination success. In total £36.5k of scholarships and awards were granted to 117 students during the year.

Finally, the College operates a hardship scheme, which also partially contributes to the cost of the Cambridge Bursary Scheme, for all students in financial hardship and is actively campaigning to raise additional funds from its members. Awards are assessed by the student’s Tutor and are based upon the specific financial situation of the student. The combined costs for these financial awards were £34k for the year.

Access

To raise educational aspiration and attract outstanding applicants who might not otherwise have considered applying the College operates an outreach programme. This programme includes an extensive programme of visits to schools, annual outreach events outside College which schools are invited to attend, visits by schools to the College, open days, and admissions symposia for teachers, as well as guidance and information on the College website for prospective applicants.

In the year College Fellows, staff and existing students supported the access programme of events which led to contact with a number of prospective students. The College holds a series of outreach events each year however, due to the pandemic these activities were restricted to being provided online. In total the College spent £13.8k during the year directly on outreach programmes. With the easing of pandemic restrictions, the College is planning to reintroduce inperson outreach and residential events.

Religion

The College 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, the College:

There is no geographical, age or religious restriction on who may attend Chapel in the College and in practice those attending are highly varied and include those who do not follow the Christian faith. The pastoral services of the clergy of the College are available to all members of the College whatever their faith traditions or none.

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MAGDALENE COLLEGE, CAMBRIDGE STATEMENT OF INTERNAL CONTROL YEAR ENDED 30 JUNE 2021

The Governing Body is responsible for maintaining a sound system of internal control that supports the achievement of policies, aims and objectives, while safeguarding the public and other funds and assets for which the Governing Body is responsible, in accordance with the College’s Statutes, the requirements of the Charity Commission and the Education Memorandum with the University of Cambridge.

The system of internal control is designed to manage rather than eliminate the risk of failure to achieve these policies, aims and objectives; it therefore provides reasonable but not absolute assurance of effectiveness.

The system of internal control is designed to identify the principal risks to the achievement of policies, aims and objectives, to evaluate the nature and extent of those risks and to manage them efficiently, effectively and economically. The process was in place for the year ended 30 June 2021 and up to the date of approval of the financial statements.

The Governing Body is responsible for reviewing the effectiveness of the system of internal control. The following processes have been established:

The Governing Body’s review of the effectiveness of the system of internal control is informed by the work and advice of College Officers and Heads of Department, who have operational responsibility for the maintenance and development of the internal control system.

The Governing Body’s review of the effectiveness of the system of internal control is also informed by the work of the external auditors, through their comments in the management letter and other reports.

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MAGDALENE COLLEGE, CAMBRIDGE RESPONSIBILITIES OF THE GOVERNING BODY YEAR ENDED 30 JUNE 2021

The Governing Body is responsible for preparing the Annual Report and financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The College’s Statutes and the Statutes and Ordinances of the University of Cambridge require the Governing Body to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the College and of the surplus or deficit of the College for that period. In preparing these financial statements, the Governing Body is required to:

The Governing Body is responsible for keeping accounting records which disclose with reasonable accuracy at any time the financial position of the College and enable them to ensure that the financial statements comply with the Statutes of the University of Cambridge. They are also responsible for safeguarding the assets of the College and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Governing Body is responsible for the maintenance and integrity of the corporate and financial information included on the College’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

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MAGDALENE COLLEGE, CAMBRIDGE INDEPENDENT AUDITORS’ REPORT TO THE GOVERNING BODY YEAR ENDED 30 JUNE 2021

Opinion

We have audited the financial statements of Magdalene College, Cambridge (the ‘College’) for the year ended 30 June 2021 which comprise the Statement of Comprehensive Income and Expenditure, the 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 is responsible for the other information. The other information comprises the information included in the Report of the Governing Body 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.

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MAGDALENE COLLEGE, CAMBRIDGE INDEPENDENT AUDITORS’ REPORT TO THE GOVERNING BODY (continued) YEAR ENDED 30 JUNE 2021

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:

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 page 16, the Governing Body is 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 trustees 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:

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MAGDALENE COLLEGE, CAMBRIDGE INDEPENDENT AUDITORS’ REPORT TO THE GOVERNING BODY (continued) YEAR ENDED 30 JUNE 2021

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

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 trustees, as a body, in accordance with College’s statutes, the Statutes of the University of Cambridge and the Charities Act 2011. Our audit 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

22 October 2021

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

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MAGDALENE COLLEGE, CAMBRIDGE STATEMENT OF PRINCIPAL ACCOUNTING POLICIES YEAR ENDED 30 JUNE 2021

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 (FRS102) and the Statement of Recommended Practice (SORP): Accounting for Further and Higher Education issued in 2019.

The Consolidated 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 6.

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 financial statements have been prepared on a going concern basis. The College has prepared forecasts beyond the 30 June 2021 year end up to financial year end 2023 using three different scenarios as part of a wider collegiate University financial planning exercise. The College has also set a detailed budget plan for the 2021-22 financial year and an outline budgets up to financial year end 2024. This financial planning work has included an analysis of the College’s unrestricted liquid resources, and together these financial plans, demonstrate that the College has sufficient resources to meet liabilities as they fall due for a period of no less than 12 months from the date these financial statements are approved. The Governing Body, as the trustee body of the College, considers preparation of these financial statements using a going concern basis to be appropriate.

Basis of accounting

The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment assets and certain operational land and buildings at deemed cost.

Basis of consolidation

The Consolidated Financial Statements include the College and its subsidiary undertaking, Cloverleaf Limited. Intragroup transactions are eliminated upon consolidation. The activities of student societies have not been consolidated. A separate balance sheet and related notes for the College only are not included because Cloverleaf Limited is a design and build company and therefore the balance sheet of the College would not be materially different to the one included in these accounts. Some details of the subsidiary undertaking are given in note 26.

Recognition of income

Academic fees

Academic fees are recognised in the period to which they relate and include all fees chargeable to students or their sponsors. The costs of any fees waived or written off by the College are included as expenditure.

Restricted research grant income

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

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 Consolidated 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 and additional details are provided within the notes to the accounts.

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MAGDALENE COLLEGE, CAMBRIDGE STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (continued) YEAR ENDED 30 JUNE 2021

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.

  2. 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.

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

  4. 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 Consolidated Statement of Comprehensive Income and Expenditure when the College is entitled to the income.

Total return

The College invests its securities investment portfolio and allocates a proportion of the related earnings and capital appreciation to the income and expenditure account in accordance with the total return investment concept. The allocation to income is determined by a spending rule, currently 3.0%, which is designed to stabilise annual spending levels from the endowment. The income transferred to the consolidated Statement of Comprehensive Income and Expenditure on this total return basis is calculated by a formula that uses the weighted average value of the College’s securities portfolio over a three-year period up to the commencement of the current accounting year. Details are given in note 3.

Investment income and change in value of investment assets

Investment income and any 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.

Other income

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

Cambridge Bursary Scheme

In 2020-21, 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 £115k is shown within the Consolidated Statement of Comprehensive Income and Expenditure as follows:

Income (see note 1): £145k Expenditure: £260k

Pension schemes

The College participates in the Universities Superannuation Scheme. With effect from 1 October 2016, the scheme changed from a defined benefit only pension scheme to a hybrid pension scheme, providing defined benefits (for all members), as well as defined contribution benefits. 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 schemewide 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 FRS102 “Employee benefits”, the College therefore accounts for the scheme as if it were a wholly defined contribution scheme. As a result, the amount charged to the profit and loss account 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) and therefore an expense is recognised.

The College also contributes to the Cambridge Colleges Federated Pension Scheme, which is a similar defined benefit pension scheme. Unlike the Universities Superannuation Scheme, this scheme has surpluses and deficits directly

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MAGDALENE COLLEGE, CAMBRIDGE STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (continued) YEAR ENDED 30 JUNE 2021

attributable to individual Colleges. Pension costs are accounted for over the period during which the College benefits from the employees’ services.

Because of the mutual nature of the Church of England Funded Pension Scheme, the College is unable to identify its share of the underlying assets and liabilities of each scheme on a consistent and reasonable basis and therefore accounts for the scheme as if it were a defined contribution scheme. As a result, the amount charged to the Statement of Comprehensive Income and Expenditure represents the contributions payable to the scheme in respect of the accounting period and expenses accrued in that year, plus any impact of deficit contributions. Since the College has entered into a 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 and the resulting expense in the Statement of Comprehensive Income and Expenditure in accordance with Section 28 of FRS 102.

The College offers a defined contribution pension scheme for non-academic staff. For staff employed before 1 April 2014 this was the Cambridge Colleges Group Pension Scheme. For staff employed after that date it is the NOW: Pensions Scheme. The assets of both those defined contribution schemes are held separately from those of the College. The annual contributions payable are charged to the Statement of Comprehensive Income and Expenditure.

Tangible fixed assets

Land and buildings

Fixed assets are stated at deemed cost less accumulated depreciation and accumulated impairment losses.

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.

Freehold land is not depreciated as it is considered to have an indefinite useful life. Freehold operational buildings are depreciated on a straight line basis over their expected useful lives as follows:

the mechanical and electrical services between 10 and 35 years

Buildings under the course of construction are valued at cost, based on the value of architects’ certificates and any other direct costs incurred. They are not depreciated until they are brought into use. The cost of additions to operational property shown in the balance sheet includes the cost of land.

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.

Maintenance of premises

The College has a five year rolling maintenance plan which is reviewed on an annual basis. The cost of routine maintenance is shown in the consolidated Statement of Comprehensive Income and Expenditure as it is incurred. The cost of major refurbishment and maintenance which restores or improves value is capitalised and depreciated over the expected useful economic life of the asset concerned. The College also sets aside sums periodically to meet future maintenance costs, these being disclosed within unrestricted reserves.

Equipment

Equipment costing less than £5,000 per individual item or group of related items is written off in the year of purchase. All other equipment is capitalised and depreciated over their expected useful life as follows:

Furniture and equipment 10 years
Energy regeneration 20 years
Library books 15 years
Information technology 3 or 5 years
Specialist software 10 years
Catering & conference equipment 5, 10 or 20 years

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MAGDALENE COLLEGE, CAMBRIDGE STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (continued) YEAR ENDED 30 JUNE 2021

Where equipment is acquired with the aid of specific bequests or donations it is capitalised and depreciated. The related benefactions are credited to income in the year it arises.

Heritage assets

The College holds and conserves two book collections which are of historical and cultural importance. The majority of assets held in the College’s collections were acquired before 1st July 1999 and, because reliable estimates of cost or valuation are not available for these on a cost-benefit basis, they have not been capitalised. During the year ended 30 June 2021, the College was gifted artworks of cultural importance. The College commissioned an expert valuation on the artworks and as such the assets have been capitalised and this has been taken as the deemed cost. Heritage assets are not depreciated since their long economic life and high residual value mean that any depreciation would not be material.

Investments

Securities

Securities are shown at their fair value on 30 June each year, except for investments in the subsidiary undertakings which are stated in the College’s balance sheet at cost and eliminated on consolidation.

Direct property

Investment properties are included at fair valuation and the aggregate surplus or deficit is transferred to Unrestricted Reserves. A formal valuation is performed at least every 5 years. For commercial property holdings, a formal valuation is currently undertaken every year and this year was carried out by Cheffins, Chartered Surveyors, as at 30 June 2021. The last formal valuation for agricultural land was carried out by FPD Savills as at 30 June 2018.

Stocks

Stocks are valued at the lower of cost and net realisable value.

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.

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.

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.

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

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MAGDALENE COLLEGE, CAMBRIDGE STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (continued) YEAR ENDED 30 JUNE 2021

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.

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.

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.

Page 28

MAGDALENE COLLEGE, CAMBRIDGE STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (continued) YEAR ENDED 30 JUNE 2021

Foreign currency translation

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

Taxation

The College is a registered charity (number 1138143) 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 to 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 the Value Added Tax.

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.

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 in 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.

Critical accounting estimates and 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 latter 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 8a.

Investment property

Properties are revalued to their fair value at the reporting date by the College’s Property Agent, Cheffins. Any valuation is based on the assumptions and judgements which are influenced by a variety of factors including market and other economic changes.

Page 29

MAGDALENE COLLEGE, CAMBRIDGE STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (continued) YEAR ENDED 30 JUNE 2021

Pensions

FRS102 makes the distinction between a group plan and a multi-employer scheme. A group plan consists of a collection of entities under common control typically with a sponsoring employer. A multi-employer scheme is a scheme for entities not under common control and represents (typically) an industry-wide scheme such as USS. The accounting for a multi-employer scheme where the employer has entered into an agreement with the scheme that determines how the employer will fund a deficit results in the recognition of a liability for the contributions payable that arise from the agreement (to the extent that they relate to the deficit) and the resulting expense in profit or loss in accordance with section 28 of FRS 102. The Governing Body is satisfied that the scheme provided by USS and the Church of England Funded Pension Scheme meet 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 financial statements.

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

Page 30

MAGDALENE COLLEGE, CAMBRIDGE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND EXPENDITURE YEAR ENDED 30 JUNE 2021

Note
Income
Academic fees and charges
1
Accommodation, catering and conferences
2
Investment income
3
Endowment return transferred
3
Other income
Total income before donations and
endowments
Donations
New endowments
Other donations for assets
Total income
Expenditure
Education
4
Accommodation, catering and conferences
5
Investment management costs
3
Other expenditure
Contribution under Statute G, II
Total expenditure
6
Surplus/(deficit) before other gains / losses
Gain/(loss) on investments
Surplus/(deficit) for the year
Other comprehensive income
Actuarial (loss)/gain in respect of pension
schemes
15
Total comprehensive income for the year
Unrestricted
£000
2,984
1,861
2,282
345
363
7,835
439
-
10
8,284
3,458
4,104
61
689
14
8,326
(42)
274
232
653
885		 2021
Restricted
£000
Endowment
£000


145
-
-
-
8
1,236
764
(1,109)
25
-
942
127
492
-
-
290
426
-
1,860
417


996
-
15
-
-
164
25
-
-
-
1,036
164
824
253
415
8,756
1,239
9,009


-
-
1,239
9,009		 Total
£000

3,129
1,861
3,526
-
388		 Unrestricted
£000

2,693
3,508
2,693
372
511
9,777
391
-
99
10,267
3,616
5,180
71
167
32
9,066
1,201
37
1,238
(187)
1,051		 2020
Restricted
£000
Endowment
£000
133
-
-
-
70
1,240
721
(1,093)
31
-
955
147
1,201
-
-
1,050
6,129
-
8,285
1,197


994
-
15
-
-
128
107
-
-
-
1,116
128
7,169
1,069
70
(3,655)
7,239
(2,586)


-
-
7,239
(2,586)		 Total
£000
2,826
3,508
4,003
-
542
8,904
931
290
436		 10,879
1,592
1,050
6,228
10,561 19,749

4,454
4119
225
714
14		 4,610
5,195
199
274
32

9,526		 10,310
1,035 9,439
9,445 (3,548)
10,480 5,891

653		 (187)
11,133 5,704

The notes on pages 35 to 53 form part of these accounts

Page 31

MAGDALENE COLLEGE, CAMBRIDGE STATEMENT OF CHANGES IN RESERVES YEAR ENDED 30 JUNE 2021

Balance at 1 July 2020
Surplus/(Deficit) from income and expenditure statement
Other comprehensive income
Release of capital funds spent in year
Transfers
Balance at 30 June 2021
Balance at 1 July 2019
Surplus/(Deficit) from income and expenditure statement
Other comprehensive income
Release of capital funds spent in year
Transfers
Balance at 30 June 2020		 Unrestricted
£000
112,879
232
653
4,801
(991)
117,574
Unrestricted
£000
106,543
1,238
(187)
6,349
(1,064)
112,879		 Income and expenditure reserve
Restricted
Endowment
£000
£000
10,404
60,977
1,239
9,009
-
-
(4,801)
-
8
983
6,850
70,969
Income and expenditure reserve
Restricted
Endowment
£000
£000
9,394
62,619
7,239
(2,586)
-
-
(6,349)
-
120
944
10,404
60,977		 Total
£000
184,260
10,480
653
-
-
195,393
Total
£000
178,556
5,891
(187)
-
-
184,260

The notes on pages 35 to 53 form part of these accounts

Page 32

MAGDALENE COLLEGE, CAMBRIDGE CONSOLIDATED BALANCE SHEET YEAR ENDED 30 JUNE 2021

Note
Non-current assets
Fixed assets
8a
Heritage Assets
8b
Investments
9
Current assets
Stocks
10
Trade and other receivables
11
Cash and cash equivalents
12
Creditors: amounts falling due within one year
13
Net current assets
Creditors: amounts falling due after more than one year
14
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
Total reserves		 2021
£000
108,262
109
92,474
200,845
195
1,790
4,295
6,280
(2,970)
3,310
(6,884)
(1,878)
195,393
70,969
6,850
77,819
117,574
195,393		 2020
£000
103,905
99
80,593
184,597
209
2,175
10,446
12,830
(3,433)
9,397
(7,106)
(2,628)
184,260
60,977
10,404
71,381
112,879
184,260

These financial statements were approved by the Governing Body on 21 October 2021 and are signed on their behalf by:

C J Greenwood Master

S J Morris Senior Bursar

The notes on pages 35 to 53 form part of these accounts

Page 33

MAGDALENE COLLEGE, CAMBRIDGE CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED 30 JUNE 2021

Note
Net cash inflow from operating activities
18
Cash flows from investing activities
19
Cash flows from financing activities
20
Increase 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
12		 2021
£000
(835)
(4,627)
(689)

(6,151)
10,446
4,295		 2020
£000
5,623
(3,664)
(704)
1,353
9,191
10,446

The notes on pages 35 to 53 form part of these accounts

Page 34

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS YEAR ENDED 30 JUNE 2021

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
Research income
Cambridge Bursary scheme
Total
2.
Income from accommodation, catering and conferences
Accommodation
College members
Conferences
Catering
College members
Conferences
Total
3.
Endowment return and investment income
3a.
Analysis
Total return contribution (see note 3b)
Income from:
Freehold land and buildings
Unit Trust Scheme
Cash Deposits
Total
3b.
Summary of total return
Income from:
Quoted and other securities and cash
Gains on endowment assets:
Quoted and other securities and cash
Investment management costs (see note 3c)
Total return for year
Total return transferred to income and expenditure reserve (see note 3a)
Unapplied total return for year included within Statement of Comprehensive
Income and Expenditure
Unapplied total return at beginning of year
Unapplied total return at end of year		 2021
£000
1,423
783
567
211
145
3,129
2021
£000
1,627
59
174
1
1,861
2021
£000
1,109
2,275
-
14
3,398
2021
£000
1,236
7,655
(164)
8,727
(1,109)
7,618
15,008
22,626		 2020
£000
1,343
771
490
89
133
2,826
2020
£000
1,592
767
565
584
3,508
2020
£000
1,093
2,659
-
104
3,856
2020
£000
1,240
956
(128)
2,068
(1,093)
975
14,033
15,008

Page 35

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

3c.
Investment management costs
Quoted security – equities
Pooled investments
Fixed interest securities
Investment management costs included within note 3b
Freehold Land and Buildings
Total
4.
Education expenditure
Teaching
Tutorial
Admissions
Research
Scholarships and awards
Other educational facilities
Total (note 6)
5.
Accommodation, catering and conferences expenditure
Accommodation
College members
Conferences
Catering
College members
Conferences
Total (note 6)		 2021
£000
-
164
-
164
61
225
2021
£000
1,690
555
484
630
865
230
4,454
2021
£000
2,827
264
742
286
4,119		 2020
£000
-
128
-
128
71
199
2020
£000
1,840
596
584
660
690
240
4,610
2020
£000
2,249
1,031
984
931
5,195

Page 36

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

6a.
Analysis of 2020/21 expenditure by activity
Staff costs
(note 7)
Other
operating
expenses
£000
£000
Education (note 4)
2,217
1,976
Accommodation, catering and conferences
(note 5)
1,797
1,238
Investment management costs (note 3c)
-
225
Other expenditure
235
475
Contribution under Statute G, II
-
14
4,249
3,928
Expenditure includes fundraising costs of £240k. This expenditure does not include
6b.
Analysis of 2019/20 expenditure by activity
Staff costs
(note 7)
Other
operating
expenses
£000
£000
Education (note 4)
2,249
2,099
Accommodation, catering and conferences
(note 5)
2,301
1,804
Investment management costs (note 3c)
-
199
Other expenditure
272
(3)
Contribution under Statute G, II
-
32
4,822
4,131		 Depreciation
Total
£000
£000
261
4,454
1,084
4,119
-
225
4
714
-
14
1,349
9,526
the costs of alumni relations.
Depreciation
Total
£000
£000
262
4,610
1,090
5,195
-
199
5
274
-
32
1,357
10,310		 Total
£000
4,454
4,119
225
714
14
9,526
10,310

Expenditure includes fundraising costs of £273k. This expenditure does not include the costs of alumni relations.

6c.
Auditors remuneration
Other operating expenses include:
Audit fees payable to College’s external auditors		 2021
2020
£000
£000
23
22

Page 37

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

7. Staff

Staff Costs
Salaries
National Insurance
Pension costs (note 24)
Average staff numbers (full-time equivalents)
Academic
Non-academics		 Academic
Non-
academics
2021
2021
£000
£000
952
2,604
79
216
152
246
1,183
3,066

Average staff number 2021
Number of
Fellows
Full-time
equivalents
59
3
92
62
92		 Total
Total
2021
2020
£000
£000
3,556
4,080
295
329
398
413
4,249
4,822
Average staff number 2020
Number
of Fellows
Full-time
equivalents
57
4
98
61
98		 Total
2020
£000
4,080
329
413
4,822
98

At the Balance Sheet date there were 43 members of the Governing Body. During the year the number receiving remuneration was 39 who are included in the 62 remunerated Fellows shown above.

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

2021 2020
Number Number
£100,001 - £110,000 1 1
£110,001 - £120,000 1 1
£120,001 - £130,000 - -
£130,001 - £140,000 1 -
£140,001 - £150,000 - 1

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.

Key management personnel

Key management personnel are those persons having authority and
responsibility for planning, directing and controlling the activities of the
College. The key management personnel of the College are therefore the
trustees.
The aggregated remuneration paid to key management personnel consists of
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.		 Total
Total
2021
2020
£000
£000
866
894

Aggregated remuneration

The Trustees received no remuneration in their capacity as Trustees of the Charity, these payments relate to their capacity as College Officers.

Page 38

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

8a.
Fixed assets
Original
cost/valuation
At beginning of year
Additions at cost
Disposals
Reclassification
At end of year
Depreciation
At beginning of year
Charge for the year
Eliminated on
disposals
At end of year
Net book value
At end of year
At beginning of year		 Freehold
Land
£000
40,020
-
40,020
-
-
-
-
40,020
40,020		 Buildings
£000
58,265
99
-
17,823
76,187
7,336
1,248
-
8,584
67,603
50,929		 Assets
under the
course of
construction
£000
12,237
5,586
-
(17,823)
-
-
-
-
-
-
12,237		 Furniture
and
Equipment
£000
1,352
7
(14)
-
1,345
849
67
(6)
910
435
503		 Energy
Regenera
tion
£000
75
-
-
-
75
17
3
-
20
55
58		 Library
Books
£000
173
14
(15)
-
172
75
11
(13)
73
99
98		 Information
Technology
£000
350
9
(19)
-
340
298
19
(20)
297
43
53		 Motor
Vehicles
£000
Total
£000
17
112,489
-
5,715
(7)
(55)
-
-
10
118,149
9
8,584
1
1,349
(7)
(46)
3
9,887
7
108,262
7
103,905

The insured value of freehold land and buildings at 30 June 2021 was £150,039k (2020: £125,159k).

Page 39

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

8b. Fixed assets (continued)

Heritage assets

The College holds and conserves two book collections which are of historical and cultural importance. These comprise the Pepys Library and the Old Library, which provide a valuable research and educational resource. In respect of these collections, the College’s practice is to preserve, conserve and manage the items in its care; to augment the collections where appropriate and within the limited resources available; to enable and encourage access to and use of the collections for teaching and research; and to enable access to and engagement with the Pepys library collection of books by members of the public.

The College holds and conserves a collection of artwork that is of cultural importance. In respect of this collection, the College’s practice is to preserve, conserve and manage the items in its care; to augment the collection where appropriate and within the limited resources available; to enable and encourage access to and use of the collection for teaching and research; and to enable access to and engagement with the College's collections by members of the public.

The majority of assets held in the College’s collections were acquired before 1st July 1999 and, because reliable estimates of cost or valuation are not available for these on a cost-benefit basis, they have not been capitalised. During the year ended 30th June 2021, the College was gifted artworks of cultural importance. The College commissioned an expert valuation on the artworks and as such the assets have been capitalised and this has been taken as the deemed cost. Heritage assets are not depreciated since their long economic life and high residual value mean that any depreciation would not be material.

9.

Balance at beginning of year
Acquisitions gifted
Total cost of acquisitions
At end of year
Investments
Balance at beginning of year
Additions
Disposals proceeds
Appreciation on revaluation
Increase in cash balances held at fund managers
Balance at end of year
Represented by:
Property
Unit Trust Scheme
Quoted securities - Equities
Other investments
Cash held for reinvestment		 2021
Total
£000
99
10
10
109
2021
Total
£000
80,593
2,473
-
9,445
(37)
92,474
40,924
3,807
-
47,743
-
92,474		 2021
Total
£000
-
99
99
99
2020
Total
£000
82,883
1,105
-
(3,548)
153
80,593
39,001
3,231
-
38,330
31
80,593

Investments held by the College also include an additional £1 (2020: £1) investment in the subsidiary company at cost (see note 26).

Page 40

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

10.
Stocks
Goods for resale:
Catering
Fellows Wine
Merchandise
11.
Trade and other receivables
Members of the College
Rents
Conferences
Other receivables
12.
Cash and cash equivalents
Short-term deposits
Bank deposits
Current accounts
Cash in hand
13.
Creditors: amounts falling due within one year
Bank loans
Due to tradesmen and others
University fees
Advance deposits - students
Caution money
Contribution to Colleges Fund
Other creditors
Accruals and deferred income
Deferred research income		 2021
£000
26
159
10
195
2021
£000
82
1,030
1
677
1,790
2021
£000
-
1,640
2,654
1
4,295
2021
£000
470
815
4
373
195
23
152
839
99
2,970		 2020
£000
37
159
13
209
2020
£000
51
685
4
1,435
2,175
2020
£000
1,420
1,630
7,395
1
10,446
2020
£000
470
1,355
60
258
182
32
120
825
131
3,433

Page 41

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

14. Creditors: amounts falling due after more than one year

Creditors: amounts falling due after more than one
year
Bank loans
Fee deposits		 2021
£000
6,345
539

6,884		 2020
£000
6,815
291
7,106

15. Pension provisions

Balance at beginning of year
Movement in the year
Current service cost including life assurance
Contributions
Other finance (income)/cost
Actuarial loss/(gain) recognised in Statement
of Comprehensive Income and Expenditure
Remaining change in balance sheet liability
recognised in SoCIE
Balance at end of year		 CEFPS
£000
6
-
(3)
-

-
1
4		 CCFPS
£000
2,033
22
(66)
29
(653)
1,365		 USS
£000
589
194
(278)
4
-
-
509
2021

£000
2,628
216
(347)
33
(653)
1
1,878		 2020
£000
3,089
(323)
(376)
61
187
(10)
2,628

Page 42

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

16. Endowment funds Restricted net assets relating to endowments are as follows:

Consolidated
Balance at beginning of year
Capital
New donations and endowments
Fund transfers
Increase/(decrease) in market value of
investments
Balance at end of year
Analysis by type of purpose
Fellowships
Student Hardship and Bursaries
Postgraduate Scholarships
Undergraduate Scholarships and Prizes
Travel Awards
Music, Chapel and Choir
Student Sports and Culture
Library Funds
Other Funds
Corporate Capital
Analysis by asset
Property
Less Bank loan
Securities
Cash		 Restricted
permanent
endowments

£000
24,843
289
983
4,831
30,946
11,092
6,080
5,898
1,543
342
424
979
3,599
989
-
30,946
-
-
30,946
-
30,946		 Unrestricted
permanent
endowments
£000
36,134
1
-
3,888
40,023
-
-
-
-
-
-
-
-
-
40,023
40,023
40,791
(6,815)
6,014
33
40,023		 2021
Total
2020
Total

£000
£000
60,977
62,619
290
1,050
983
944
8,719
(3,636)
70,969
60,977
11,092
9,206
6,080
4,813
5,898
4,848
1,543
1,600
342
289
424
357
979
832
3,599
2,056
989
842
40,023
36,134
70,969
60,977
40,791
39,001
(6,815)
(7,285)
36,960
28,795
33
466
70,969
60,977

Fund transfers during the year to restricted permanent endowments of £983k comprise £1m unrestricted legacy received in 2017/18 to form a permanent endowment for the New College Library. The balance of £17k relates to a prior year donation initially being treated as a permanent endowment, but subsequently, and according with the donor’s revised wishes, has been divided between permanent endowment and restricted expendable endowment (see also note 17).

Page 43

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

17. Restricted Reserves

Reserves with restrictions are as follows:
Consolidated
Capital
grants
unspent
£000
Balance at beginning of year
Capital
4,377
Accumulated income
-
4,377
New donations
426
Fund transfer
2
Endowment return transferred
-
Other income
2
Increase/(decrease) in market value of
investments
-
Transfers
3
Release of capital funds spent in year
(4,801)
Expenditure
-
Balance at end of year
9
Capital
9
Accumulated income
-
9
Analysis of other restricted
funds/donations by type of purpose
Fellowships
-
Student Hardship and Bursaries
-
Postgraduate Scholarships
-
Undergraduate Scholarships and Prizes
-
Travel Awards
-
Music, Chapel and Choir
-
Student Sports and Culture
-
Library Funds
-
New Library Funds
9
Other Funds
-
9		 Permanent
unspent and
other
restricted
income
£000
-
2,178
2,178
-
3
704
170
-
(13)
-
(416)
2,626
-
2,626
2,626
841
1,166
273
144
49
48
33
70
-
2
2,626
Restricted
expendable
endowment

£000
3,849
-
3,849
492
13
60
6
415
-
-
(620)
4,215
4,215
-
4,215
1,934
170
411
737
68
-
2
14
-
879
4,215		 2021
Total
£000
8,226
2,178
10,404
918
18
764
178
415
(10)
(4,801)
(1,036)
6,850
4,224
2,626
6,850
2,775
1,336
684
881
117
48
35
84
9
881
6,850		 2020
Total

£000
7,387
2,007
9,394
7,330
(50)
721
234
70
170
(6,349)
(1,116)
10,404
8,226
2,178
10,404
2,344
978
630
694
116
43
27
55
4,377
1,140
10,404

Page 44

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

18. Reconciliation of consolidated surplus for the year to net cash inflow from operating activities

Surplus for the year
Adjustment for non-cash items
Depreciation
Investment income
(Increase) in stocks
(Increase) in trade and other receivables
Increase in creditors
Movement in pension deficit
(Gain)/loss on investment
Donated Heritage Assets
Adjustment for investing or financing activities
Investment income
Interest paid
Net cash inflow from operating activities
19.
Cash flows from investing activities
Investment income
Endowment funds invested
Payments made to acquire non-current assets
Total cash flows from investing activities
20.
Cash flows from financing activities
Interest paid
Repayments of amounts borrowed
Total cash flows from financing activities		 2021
£000
10,480
1,358
1
14
385
(214)
(97)
(9,445)
(10)
(3,526)
219
(835)
2021
£000
3,526
(2,438)
(5,715)
(4,627)
2021
£000
(219)
(470)
(689)		 2020
£000
5,891
1,357
(2)
(15)
(11)
(629)
(648)
3,548
(99)
(4,003)
234
5,623
2020
£000
4,003
(1,255)
(6,412)
(3,664)
2020
£000
(234)
(470)
(704)

Page 45

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

21. Consolidated reconciliation and analysis of net debt

Cash and cash equivalents
Borrowings:
amounts falling due within
one year
Unsecured loans
Bank overdraft
Obligations under finance
leases
Derivatives
Borrowings:
Amounts falling due after
more than one year
Unsecured loans
Obligations under finance
leases
Derivatives		 At July
2020
Cash
Flows
Acquisitions
& Disposal
of
subsidiaries
New
finance
leases
Other
non-cash
changes
Changes in
market
value and
exchange
rates
At 30
June
2021
£000
£000
£000
£000
£000
£000
£000
10,446
(6,151)
-
-
-
-
4,295
(470)
-
-
-
-
(470)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(470)
-
-
-
-
(470)
(6,815)
470
-
-
-
-
(6,345)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,815)
470
-
-
-
-
(6,345)
3,161
(5,681)
-
-
-
-
(2,520)

22. Financial Instruments

2021 2020
£000 £000
Financial assets
Financial assets that are equity instruments measure at cost less impairment
Other investments 51,549 41,561
Financial assets that are debt instruments measure at amortised cost
Cash and cash equivalents 4,295 10,476
Other debtors 1,663 1,042
Financial liabilities
Financial liabilities measure at amortised cost
Loans 6,815 7,285
Trade creditors 815 1,355
Other Creditors 1,286 943
23. Capital commitments
2021 2020
£000 £000
Capital commitments at 30 June are as follows:
Authorised and contracted - 5,581

Page 46

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

24. Pension Schemes

The College participates in three defined benefit schemes and two defined contribution schemes. The defined benefit schemes are the Universities Superannuation Scheme (USS), the Cambridge Colleges’ Federated Pension Scheme (CCFPS) and the Church of England Funded Pensions Scheme (CEFPS). The defined contribution schemes are the NOW: Pensions scheme and the Cambridge Colleges Group Pension Scheme. The details of the schemes are as follows:

Universities Superannuation Scheme

The latest available completed actuarial valuation of the Retirement Income Builder is at 31 March 2018 (the valuation date), which was carried out using the projected unit method. The valuation as at 31 March 2020 was signed and filed with The Pensions Regulator with an effective date of 14 October 2021. As the new valuation had not been completed by 30 June 2021, any adjustment in the deficit provision will be reflected in the financial statements for the year ended 30 June 2022. See note 27 for details of the changes.

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 2018 valuation was the fifth valuation for the scheme under the scheme-specific funding regime introduced by the Pensions Act 2004, which requires schemes to adopt a statutory funding objective, which is to have sufficient and appropriate assets to cover their technical provisions. At the valuation date, the value of the assets of the scheme was £63.7 billion and the value of the scheme’s technical provisions was £67.3 billion indicating a shortfall of £3.6 billion and a funding ratio of 95%.

The key financial assumptions used in the 2018 valuation are described below. More detail is set out in the Statement of Funding Principles.

Pension increases (CPI) Term dependent rates in line with the difference between the Fixed Interest and Index Linked yield curves, less 1.3% p.a.

Discount rate (forward rates) Years 1-10: CPI + 0.14% reducing linearly to CPI – 0.73% Years 11-20: CPI + 2.52% reducing linearly to CPI + 1.55% by year 21 Years 21 +: CPI + 1.55%

The main demographic assumption used relates to the mortality assumptions. These assumptions are based on analysis of the scheme’s experience carried out as part of the 2018 actuarial valuation. The mortality assumptions used in these figures are as follows:

2018 valuation

Mortality base table Pre-retirement:

71% of AMC00 (duration 0) for males and 112% of AFC00 (duration 0) for females Post-retirement:

97.6% of SAPS S1NMA “light” for males and 102.7% of RFV00 for females Future improvements to CMI_2017 with a smoothing parameter of 8.5 and a long term improvement rate of mortality 1.8% pa for males and 1.6% pa for females

Page 47

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

24. Pension Schemes continued

The current life expectancies on retirement at age 65 are:

2021 2020
Males currently aged 65 (years) 24.6 24.4
Females currently aged 65 (years) 26.1 25.9
Males currently aged 45 (years) 26.6 26.3
Females currently aged 45 (years) 27.9 27.7

A new deficit recovery plan was put in place as part of the 2018 valuation, which requires payment of 2% of salaries over the period 1 October 2019 to 30 September 2021 at which point the rate will increase to 6%. The 2021 deficit recovery liability reflects this plan. The liability figures have been produced using the following assumptions:

2021 2020
Discount rate 0.87% 2.59%
Pension increases (CPI) 2.5% 4.2%

Cambridge Colleges’ Federated Pension Scheme

The College is a member of the Cambridge Colleges’ Federated Pension Scheme which is a defined benefits plan.

The liabilities of the plan have been calculated, at 30 June 2021, 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 were as follows:

2021 2020
% p.a. % p.a.
Discount rate 1.80 1.45
Increase in salaries 3.10 2.70
Retail Prices Index (RPI) assumption 3.40 3.10
Consumer Prices Index (CPI) assumption 2.60 2.20
Pension Increases in payment (CPI Max 2.5% p.a.) 1.95 1.80

The underlying mortality assumption is based upon the standard table known as S3PA on a year of birth usage with CMI_2020 future improvement factors and a long-term rate of future improvement of 1.25% per annum, a standard smoothing factor (7.0) and no allowance for additional improvements (2020: S3PA with CMI_2019 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:

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 064 64
Deferred Members – Option 1 Benefits 63 62

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MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

24. Pension Schemes continued

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 these calculations.

The amounts recognised in the balance sheet as at 30 June 2021 (with comparative figures as at 30 June 2020) are as follows:

Present value of plan liabilities
Market value of plan assets
Net defined benefit asset/(liability)		 2021
2020
£
£
(8,101,861)
(8,581,688)
6,736,394
6,548,515
(1,365,467)
(2,033,173)

The amounts to be recognised in profit and loss for the year ending 30 June 2021 (with comparative figures for the year ending 30 June 2020) are as follows:

Current service cost
Administrative expenses
Interest on net defined benefit (asset)/liability
Loss/(gain) on plan changes
Total		 2021
2020
£
£
8,511
14,430
13,562
13,562
29,631
41,828
-
-
51,704
69,820

Changes in the present value of the plan liabilities for the year ending 30 June 2021 (with comparative figures for the year ending 30 June 2020) are as follows:

Present value of plan liabilities at beginning of period
Current service cost
Employee contributions
Benefits paid
Interest on plan liabilities
Actuarial losses/(gains)
Loss/(gain) on plan changes
Present value of plan liabilities at end of period		 2021
2020
£
£
8,581,688
8,065,689
8,511
14,430
401
1,153
(366,944)
(223,205)
121,784
179,160
(243,579)
544,461
-
-
8,101,861
8,581,688

Changes in the fair value of the plan assets for the year ending 30 June 2021 (with comparative figures for the year ending 30 June 2020) are as follows:

Market value of plan assets at beginning of period
Contributions paid by the College
Employee Contributions
Benefits paid
Administrative expenses paid
Interest on plan assets
Return on assets, less interest included in Profit & Loss
Market value of plan assets at end of period
Actual return on plan assets		 2021
2020
£
£
6,548,515
6,217,173
66,022
72,405
401
1,153
(366,944)
(223,205)
(20,659)
(20,275)
92,153
137,332
416,906
363,932
6,736,394
6,548,515
509,059
501,264

Page 49

MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

24. Pension Schemes continued

The major categories of plan assets for the year ending 30 June 2021 (with comparative figures at 30 June 2020) are as follows:

Equities
Bonds & Cash
Property
Total		 2021
2020
48%
49%
42%
41%
10%
10%
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 2021 (with comparative figures for the year ending 30 June 2020) are as follows:

Return on assets, less interest included in Profit & Loss
Expected less actual plan expenses
Experience gains and losses arising on plan liabilities
Changes in assumptions underlying the present value of plan liabilities
Remeasurement of net defined benefit liability recognised in OCI		 2021
2020
£
£
416,906
363,932
(7,097)
(6,713)
104,648
202,282
138,931
(746,743)
653,388
(187,242)

Movement in net defined benefit asset/(liability) during the year ending 30 June 2021 (with comparative figures for the year ending 30 June 2020) are as follows:

Net defined asset/(liability) at beginning of year
Recognised in Profit and Loss
Contributions paid by the College
Remeasurement of net defined benefit liability recognised in OCI
Net defined benefit asset/(liability) at end of year		 2021
2020
£
£
(2,033,173)
(1,848,516)
(51,704)
(69,820)
66,022
72,405
653,388
(187,242)
(1,365,467)
(2,033,173)

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 actuarial 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:

Annual contributions of not less than £48,974 per annum payable for the period to 30 June 2021.

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

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MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

24. Pension Schemes continued

Other Pension Schemes

The College participates in three other pension schemes:

NOW: Pensions

The College appointed NOW: Pensions to provide its workplace pension scheme for its non-academic staff from 1 April 2014. NOW: Pensions provides a defined contribution scheme which invests employer and employee contributions to provide a member specific fund that will be converted into pension on the member’s retirement. There were contributions of £20k (2020: £19k) outstanding as at the year end due to NOW: Pensions.

Cambridge Colleges Group Personal Pension Scheme

The College offered a defined contribution pension scheme to its non-academic staff until April 2014. The pension cost for this scheme represents contributions payable by the College, plus the set-up costs. There were contributions of £nil (2020: £3k) outstanding as at the year end due to the Cambridge Colleges Group Personal Pension Scheme.

Church of England Funded Pensions Scheme

Magdalene College (Cambridge) participates in the Church of England Funded Pensions Scheme for stipendiary clergy, a defined benefit pension scheme. This scheme is administered by the Church of England Pensions Board, which holds the assets of the schemes separately from those of the Responsible Bodies.

Each participating Responsible Body in the scheme pays contributions at a common contribution rate applied to pensionable stipends..

The scheme is considered to be a multi-employer scheme as described in Section 28 of FRS 102. This means it is not possible to attribute the Scheme’s assets and liabilities to each specific Responsible Body, and this means contributions are accounted for as if the Scheme were a defined contribution scheme.

A valuation of the Scheme is carried out once every three years. The most recent Scheme valuation completed was carried out as at 31 December 2018. The 2018 valuation revealed a deficit of £50m, based on assets of £1,818m and a funding target of £1,868m, assessed using the following assumption:

Following the 31 December 2018 valuation, a recovery plan was put in place until 31 December 2022 and the deficit recovery contributions (as a percentage of pensionable stipends) are set out in the table below.

% of pensionable stipends Jan-18 to Dec-20 Jan-21 to Dec-22
Deficit repair contributions 11.9% 7.1%

As at 31 December 2018 the deficit recovery contributions under the recovery plan in force at that time were 11.9% of pensionable stipends until December 2025. As at 31 December 2019 and 31 December 2020 the deficit recovery contributions under the recovery plan in force were as set out in the above table.

For senior office holders, pensionable stipends are adjusted in the calculations by a multiple, as set out in the Scheme’s rules.

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MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

24. Pension Schemes continued

Section 28.11A of FRS 102 requires agreed deficit recovery payments to be recognised as a liability. The movement in the balance sheet liability over 2017 and over 2018 is set out in the table below.

Balance sheet liability at 1 January
Deficit contribution paid
Remaining change to the balance sheet liability* (recognised in SOCIE)
Balance sheet liability at 31 December		 2020
6,000
(3,000)
1,000
4,000		 2019
19,000
(3,000)
(10,000)
6,000

This liability represents the present value of the deficit contributions agreed as at the accounting date and has been valued using the following assumptions set by reference to the duration of the deficit recovery payments:

Dec-20 Dec-19 Dec-18
Discount rate 0.2% pa 1.1% pa 2.1% pa
Price inflation 3.1% pa 2.8% pa 3.1% pa
Increase to total pensionable payroll 1.6% pa 1.3% pa 1.6% pa

The legal structure of the scheme is such that if another Responsible Body fails, Magdalene College (Cambridge) could become responsible for paying a share of that Responsible Body’s pension liabilities.

The total pension cost, after personal health insurance contributions, for the year to 30 June (see note 7) was as follows:

USS: Contributions
CCFPS: Charged to SOCIE
Other Schemes		 2021
2020
£000
£000
250
278
6
8
142
127
398
413

25. Related Party Transactions

Owing to the nature of the College’s operations and the composition of the Governing Body, it is inevitable that transactions will take place with organisations in which a Governing Body member may have an interest. All transactions involving organisations in which a member of the Governing Body 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 Governing Body members and where any member of the Governing Body has a material interest in a College matter they are required to declare that fact.

During the 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. Fellows are billed for any private catering. The Trustees remuneration is overseen by the Remuneration Committee.

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MAGDALENE COLLEGE, CAMBRIDGE NOTES TO THE FINANCIAL STATEMENTS (continued) YEAR ENDED 30 JUNE 2021

25. Related Party Transactions continued

The salaries paid to Trustees in the year are summarised in the table below:

From
To
£1
£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
Total		 2021
2020
23
25
7
5
2
2
2
-
1
3
-
-
1
1
1
1
1
1
-
-
1
1
39
39

The total Trustee salaries were £697k for the year (2020: £699k).

The trustees were also paid other taxable benefits (including associated employer National Insurance contributions and employer contributions to pensions) which totalled £185k for the year (2020 £194k).

The College has one trading subsidiary, Cloverleaf Limited, which are consolidated into these accounts. Cloverleaf Limited is 100% owned by the College and are registered and operating in England and Wales.

The College has taken advantage of the exemption within section 33 of FRS 102 not to disclose transactions with wholly owned grouped companies that are related parties.

26. Principal subsidiary and associated undertakings and other significant investments

Cost Class of shares Holding
£
Cloverleaf Limited 1 Ordinary 100%

The principal activity of the above company is the development of the grounds and buildings of Magdalene College, Cambridge. This company is included in these consolidated financial statements.

27. Post balance sheet event – non-adjusting

Since the year end, following completion of the 2020 actuarial valuation, a new deficit recovery plan has been agreed in respect of the USS pension scheme. A new Schedule of Contributions based on the 2020 actuarial valuation has been agreed, and become effective, post year end. This results in an increase of £841k in the provision for the obligation to fund the deficit on the USS pension which would instead be £1,350k. As the Schedule of Contributions was not in place at the financial year end this adjustment will be reflected in the Financial Statements for the year ended 30 June 2022. If the Joint Negotiating Committee (JNC) recommended deed on benefit changes has not been executed by 28 February 2022 then a different Schedule of Contributions would become applicable. If this were to happen then there would be an increase of £1,714k in the provision for the obligation to fund the deficit on the USS pension which would instead be £2,223k.

Page 53