2021-06-30-accounts

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ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021

Registered Charity No. 1138143

Annual Report and Financial Statements for the year ended 30 June 2021

Contents	Page
PART 1: ANNUAL REPORT
Introduction	3
Summary Financial Results	3
Professional Advisers	4
Charity Trustees	5
Objects and Public Benefit	6
Operating and Financial Review	8
Corporate Governance	14
Statement of Internal Control	14
Responsibilities of the Governing Body	15
Independent Auditor’s Report	16
PART 2: FINANCIAL STATEMENTS
Statement of Principal Accounting Policies	20
Consolidated Statement of Comprehensive Income and Expenditure	26
Consolidated Statement of Changes in Reserves	27
Consolidated and College Balance Sheets	28
Consolidated Cash Flow Statement	29
Notes to the Accounts	30

Annual Report and Financial Statements for the year ended 30 June 2021

INTRODUCTION

Wolfson College is one of the 31 colleges in the University of Cambridge. It was founded as University College in 1965, and was renamed Wolfson College in 1973, receiving its Royal Charter in 1977. The primary object of the College is to advance education, learning and research in the University of Cambridge.

The College admits both full-time and part-time postgraduate students studying for PhDs and Masters degrees, and full-time mature undergraduates aged 21 or above. The total number of students as at 1 December 2020 was 1,033. The College has a large Fellowship, which is particularly active in research within the University.

The College occupies a nine-acre site to the west of central Cambridge, consisting of new buildings built since 1972 and older houses absorbed into the site and landscaped gardens. The residential buildings include approximately 450 units of accommodation for students and academic visitors, accommodating over 500 residents in total. Other buildings house a library, a dining hall, seminar and teaching rooms, common rooms, a gym and other shared spaces.

The College is a registered charity, regulated by the Charity Commission and is registered with the Fundraising Regulator.

These accounts are presented in the format of the Recommended Cambridge College Accounts (RCCA), which comply with the Higher Education SORP (Statement of Recommended Practice: Accounting for Further and Higher Education).

SUMMARY FINANCIAL RESULTS

The financial statements consolidate the activities of the College and the College’s trading subsidiary, Wolfson College Cambridge Enterprises Limited.

Total income for the year was £9.16m. Total expenditure for the year (including depreciation of £1.22m but excluding capital expenditure of £0.58m) was £8.93m, leading to a surplus (before other gains and losses) of £0.23m and total comprehensive income for the year of £9.17m. The main sources of income were academic fees (£3.72m) and accommodation and catering (£2.21m). The main area of expenditure was staff costs of £4.14m.

Endowment investments, which are mainly invested in the Cambridge University Endowment Fund (CUEF), were valued at £33.68m at 30 June 2021. In addition, the College held fixed asset investments of £16.43m in the CUEF at the year end, bringing the total of endowment and other investments to £50.11m.

Net assets were £78.25m.

COVID-19

The global COVID-19 pandemic has continued to have a significant effect on the College’s activities and finances throughout 2020-21. Following the end of the 2020 Easter term, during which all face-to-face teaching was cancelled and all teaching and examinations moved online, activity in the College was very much reduced. Around 100 students remained in residence over the summer, mostly due to restrictions on travel. Almost all administrative staff worked from home, a reduced number of “essential workers” remained on site, working in rotas, and all other staff who were eligible, went on furlough leave, under the terms of the Government’s Coronavirus Job Retention Scheme (or “furlough scheme”).

As the summer progressed, and the College prepared for the return of students for the 2020 Michaelmas term, activity increased gradually, although there was still no conference or events business. The College took advantage of developments in the furlough scheme to allow for “flexible furlough” leave, enabling furloughed staff to come back to work on a part-time basis. The College continued to make use of flexible furlough throughout the year, resulting in a total income of £268k under the scheme. Furloughed staff were paid 100% of their salaries throughout the year. The annual cost-of-living increases for all staff, which had previously been put on hold, were implemented with effect from 1 January 2021.

The most significant financial effect of the pandemic has been on accommodation income. Accommodation rental income from student and other College members in 2020-21 was £1.9m compared with £2.1m in 2019-20 and £2.7m in 2018-19 (the most recent financial year unaffected by the pandemic). Accommodation income from conference business for the same periods was £19k, £385k and £463k. The catering income associated with residents and visitors on site has similarly been negatively impacted.

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Annual Report and Financial Statements for the year ended 30 June 2021

COVID-19 (continued)

Whilst approximately 100 students remained in residence throughout the year, occupancy levels fluctuated considerably. College accommodation was full at the beginning of Michaelmas term but as the levels of infection began to rise again in October 2020, locally and nationally, Cambridge entered into “Tier 3” COVID-19 restrictions before a second national lockdown was implemented in November. When infection rates remained high and a third national lockdown started in January 2021, many students remained at home for the Lent term. In March 2021, the Government announced its 4 step roadmap to reduce restrictions. The College, along with the University and all other Cambridge colleges, worked hard to interpret and follow Government and Department for Education guidelines, as they applied to a wide range of College activities – dining, educational and social events, sports, the bar, visitors and many more. Two large marquees, erected in the East and West Courts, served a number of purposes including social spaces, study spaces and the bar.

The Easter term gradually gained momentum as it became possible, first, for research students and, then, For Masters and undergraduate students to return. A large number of international students however were not able to travel and did not return to their accommodation. Examinations were predominantly online although a small number were held in person. A streamlined and socially-distanced format was devised by the University for graduation ceremonies. The May Ball however was cancelled for the second year running owing to the uncertainty over whether certain restrictions would be lifted in time.

Throughout the varying phases of restrictions, the College established the principle that if students were not able to take up or remain in their College accommodation due to the pandemic, they would not be required to pay rent, notwithstanding the terms of their licence agreements. This resulted in substantial rent rebates which, together with lower than normal occupancy rates, caused the consequent significant reduction in accommodation and catering income described above.

With such reduced income from accommodation and catering, cash flow was monitored particularly closely. For the second year running, the Colleges Fund Committee agreed that recipients of the Colleges Fund grant might retain the grant for operational purposes rather than use it to increase their endowments. The College accordingly included the 2020-21 Colleges Fund grant (£785k) in unrestricted income, which relieved some of the pressure on its cash flow. Capital expenditure on the College’s estate and buildings was also kept to the minimum level required to cover essential work only. The College has noted that such reduced levels of investment in its endowment and estate, whilst they have provided temporary relief during the pandemic, are not in the best interests of the College in the longer term. The College’s financial planning aims to restore investment in its endowment and estate as soon as possible.

PROFESSIONAL ADVISERS

Bankers

Auditor Bankers Peters Elworthy & Moore Lloyds Bank plc Salisbury House Endeavour House Station Road Chivers Way, Histon Cambridge CB1 2LA Cambridge CB24 9ZR

Wolfson College Barton Road Cambridge CB3 9BB

Website: www.wolfson.cam.ac.uk Charity Registration No. 1138143

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Annual Report and Financial Statements for the year ended 30 June 2021

CHARITY TRUSTEES

The College Officers and elected Fellow members of the College Council act as the Trustees of the charity. The College Council meets at least eight times in a year. In the financial year 2020-21 the following were members of the College Council:

Five College Officers ex officio

Professor Jane Clarke President; Chair of the Council Mr Graham Allen Vice-President Mrs Joanna Cheffins Bursar; Secretary of the Council Dr Susan Larsen Senior Tutor Ms Sian Cook Development Director

Ten Fellows elected by the Governing Body

Ms Lynette Alcántara (from 1 October 2020) Professor Ian Cross Dr Anna Dempster Professor Stephen Evans (from 1 October 2020) Dr Lesley MacVinish (to 30 September 2020) Dr Guillaume Nataf (to 31 December 2020) Dr Virginia Newcombe (from 1 October 2020) Mr Michael O'Sullivan (to 30 September 2020) Professor Lloyd Peck Professor George Salmond (to 30 September 2020) Dr Frank Tietze (from 10 February 2021) Dr Martin Vestergaard Dr Steve Watson Dr Warwick (Jeremy) Webb (from 1 October 2020) Professor James Wood (to 30 September 2020)

In addition, three Students from the Wolfson College Student Association (WCSA) are non-trustee members of College Council:

President of WCSA: Mr Benjamin Remez (to November 2020) Ms Charlotte Clarke (from November 2020)

Vice-President of WCSA: Mr Kenneth Okwor (to November 2020) Mr Eric Legresley (from November 2020) Treasurer of WCSA: Mr Daniel Sowood (to November 2020) Miss Sheryl Wombell (from November 2020)

The Governing Body, consisting of all Fellows of the College (other than Emeritus, Visiting, Honorary and Bredon Fellows), is required by the College Statutes to be responsible for the approval of the annual audited accounts. There were 99 Governing Body Fellows as at 1 December 2020. The Governing Body meets at least four times in a year. The President is the Chair of the Governing Body and the Bursar is the Secretary.

A full list of the Governing Body Fellows can be found on the College website at: https://www.wolfson.cam.ac.uk/people

The College’s corporate governance arrangements are set out on page 14.

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Annual Report and Financial Statements for the year ended 30 June 2021

OBJECTS

The objects of the College are set out in its Royal Charter, effective from 1 January 1977, as follows:

1. to advance education, learning and research in the University of Cambridge;

2. to provide, for men or women who shall be members of the University, a College wherein they may work for degrees in the University or may carry out postgraduate or other special studies at Cambridge provided that no members of the College or any candidate for membership thereof shall be subject to any test of religious, social, political or racial character;

3. to apply the moneys of the College to the purposes of the College with power to invest as prescribed in the Statutes of the College;

4. to administer any trust or scheme for purposes connected with the objects of the College; and

5. to do all such things as are incidental or conducive to the carrying out of the above objects.

PUBLIC BENEFIT

The College provides, in conjunction with the University of Cambridge, an education which is recognised internationally as being of the highest standard for over 1,000 undergraduate and postgraduate students. This education develops students academically 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:

• teaching facilities and individual or small-group supervision for undergraduates, as well as pastoral, administrative and academic support for all students through its tutorial and mentoring systems; and

• social, cultural, musical, recreational and sporting facilities which enable each of its students to realise their academic and personal potential to the full while studying at the College.

The College advances research through:

• providing Research Fellowships to outstanding young academics in the early stages of their careers, which enables them to develop and focus on their research in this formative period before they undertake the full teaching and administrative duties of an academic post;

• supporting the research work of its students and Fellows by promoting interaction across disciplines, providing facilities for seminars and developing a community of researchers; and

• fostering academic networking by encouraging visits from outstanding academics as Visiting Fellows and Visiting College Research Associates.

The College maintains a Library which is a valuable resource for students and Fellows of the College.

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

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 visiting alumni of the College who have an opportunity to attend educational events at the College or use its academic facilities. The College offers membership with Senior Member status to distinguished members of the local community without an existing College affiliation and membership with College Research Associate status to researchers in Cambridge also without an existing College affiliation. The general public is also able to attend various educational activities in the College such as lectures, seminars, exhibitions and concerts.

The College admits students who have the highest potential for benefiting from the education provided by the College and the University, regardless of their gender or their financial, social, religious or ethnic background:

• there are no geographical restrictions in the College’s objects and students and academic staff of the College are drawn from across the UK and internationally;

• there are no age restrictions in the College’s objects, although the University of Cambridge’s Statutes and Ordinances restrict the College to admitting undergraduates who are aged 21 or above; and

• there are no religious restrictions in the College’s objects and a wide range of faith traditions are represented in the College membership.

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Annual Report and Financial Statements for the year ended 30 June 2021

PUBLIC BENEFIT (continued)

The College has approximately 280 part-time postgraduate students and its encouragement of part-time students allows individuals to benefit from a Cambridge education who might not otherwise have access.

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

The College receives the following income in respect of students:

• (a) fees at externally regulated rates, charged to UK and EU undergraduates (those eligible for loans from Student Finance) and to postgraduate students; and College fees determined by the College annually, charged to Overseas undergraduates and to other UK and EU undergraduates (those not eligible for loans from Student Finance); and

• (b) accommodation charges and meal charges set at reasonable rates.

In order to assist undergraduates of limited financial means, the College provides bursary support through a scheme operated in common with the University and other Colleges. For the academic year 2020-21, awards totalling £393.2k were made to 81 Wolfson undergraduates (£369.6k to 77 undergraduates in 2019-20): 40 were awarded the maximum independent student bursary of £5,600; and a further 41 were awarded an average of £4,126. The net cost to the College for participation in this scheme was £51.4k after contributions by the University and other Colleges of £341.8k. The scheme is widely advertised on the University website, on College websites and in the Admissions Prospectus. Enhanced Bursaries totalling £42.3k in 2020-21, funded by a donation from Santander Universities UK and a grant from Trinity College, were also awarded to undergraduates needing additional support.

To support the costs of both undergraduate and postgraduate students, the College provides various scholarships and bursaries, to help fund fees and living costs. The total awarded in 2020-21 was £573.6k to 158 students (£549.5k to 143 students in 2019-20). Within this amount, £152.2k was awarded to 21 students in receipt of Vice-Chancellor’s Awards worth £439.8k in total. The Vice-Chancellor’s Awards scheme exists to support UK and EU PhD students across the University. In addition to awards made to named students by a College, all Colleges are required to contribute to the Vice-Chancellor’s Awards scheme irrespective of their participation in the scheme, and the amount required to be paid by the College in 2020-21 was £74.0k (£62.3k in 2019-20).

The College supports students through a grant scheme to assist with travel and attendance at conferences. The total awarded in 2020-21 was £9.9k to 41 students, which represented a decrease from the total of £30.1k to 88 students in 2019-20 due to much reduced travel opportunities during the pandemic.

In addition to its other programmes, the College operates a scheme for students in financial hardship. The total awarded in 2020-21 was £27.2k to 63 students (£18.6k to 43 students in 2019-20).

The College awards prizes to its students for academic distinction. The total awarded in prizes in 2020-21 was £25.7k to 81 students (£15.9k to 53 students in 2019-20).

To raise educational aspiration and attract outstanding applicants who might not otherwise have considered applying to Wolfson, the College holds open days, and provides guidance and information for prospective applicants on the College website and through the admissions staff in its Tutorial Office.

In order to fulfil its charitable purposes of advancing education, learning and research, the College employs a number of its Fellows in the following roles: College Teaching Officers, Supervisors, Directors of Studies, Tutors and senior administrative officers such as Bursar, Senior Tutor and Development Director. Several of these serve as charity trustees through being members of the College Council. The employment of the President and Fellows is undertaken with the intention of furthering the College’s aims and their employment directly contributes to the fulfilment of those aims. The private benefit accruing to the President and Fellows through salaries, stipends and employmentrelated benefits is objectively reasonable, measured against academic stipends generally; moreover annual pay increases normally follow national settlements applying to the university sector. Without the employment of Fellows, the College could not fulfil its charitable aims as a College in the University of Cambridge. All salaries are reviewed annually by the Personnel Committee.

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Annual Report and Financial Statements for the year ended 30 June 2021

OPERATING AND FINANCIAL REVIEW

ING	AND FINANCIAL REVIEW
		Page
1	Student Numbers	8
2	Income and Expenditure	9
3	Capital Additions	9
4	Investments	10
5	Reserves	10
6	Fundraising and Alumni Relations	11
7	Principal Risks and Uncertainties	12
8	Future Plans	13

1 Student Numbers

The College admits full-time and part-time postgraduate students studying for PhDs and Masters courses and fulltime mature undergraduate students aged 21 and over. Total student numbers (including part-time postgraduates and postgraduates writing up or under examination) of 1,033 as at 1 December 2020 did not change significantly from the previous year (1,012). The key measure is full-time students, and the College has historically had a strategic target of 525 full-time students per year. The College accepts both postgraduates who have selected the College as part of their application and postgraduates who are allocated to the College through an intercollegiate allocation process, designed to even out the distribution of applications across the Cambridge colleges. The following chart shows the figures for full-time students over the past seven years as at 1 December in each year:

----- Start of picture text -----
700
600
Continuing
134
undergraduates
Target 525 119
119
500
109 60 New undergraduates
110 131
61
109 65
400 60 Continuing
57 49 117 140 postgraduates
53
125
300 120
117 117
110
200
New postgraduates
299 300
266
236 226 229
100 207
0
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Full-time Students
----- End of picture text -----

The target of 525 breaks down into a target of 375 full-time postgraduates and 150 undergraduates, and there is a clearly stated objective to increase the number of PhD and other doctoral level students: increased financial support for students at this level is one of the College’s fundraising priorities. In 2020-21, as in the previous year, in addition to the postgraduate students who selected the College, the College was allocated a significant number of postgraduate students through the allocation system, resulting in 65 students above the College’s target.

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Annual Report and Financial Statements for the year ended 30 June 2021

OPERATING AND FINANCIAL REVIEW (continued)

1 Student Numbers (continued)

Meanwhile, the total number of undergraduates also remained above target at 194. The total full-time student body of 634 was split approximately one-third undergraduates and two-thirds postgraduates. The College’s 279 part-time postgraduates also continued to play an important part in the College’s mix of students.

2 Income and Expenditure

The Statement of Comprehensive Income and Expenditure (SOCIE) shows total income for the year of £9.16m (201920: £10.28m)

Increased student numbers resulted in academic income of £3.72m, which was higher than in the previous year (£3.53m). Of this total, £3.30m is made up of fees paid by or on behalf of students, as set out in detail in note 1. Within academic income are included the contributions from the University and other Colleges for Cambridge Bursaries: £342k appears as income from this source, with a corresponding figure in expenditure of £393k, i.e. there was a net cost to the College of £51k.

Accommodation and catering income, at £2.21m, was again significantly lower than the previous year (£2.99m) as a result of the impact of the COVID-19 pandemic. The College has 409 units of student accommodation, mainly for single occupation, accommodating up to 429 in total. In addition there are five family flats. The remaining 38 units of accommodation are for visiting academics, part-time students and other short-stay visitors. College accommodation is normally full but, during the academic year 2020-21, many full-time students were unable to travel to and/or remain in Cambridge due to the pandemic and courses for part-time students were conducted online, resulting in significantly reduced levels of occupancy.

There was a modest increase in endowment and investment income (from £1.50m to £1.54m), as a result of the purchase of additional units in the Cambridge University Endowment Fund at the end of last year and the improved performance of the Fund.

Donations are classified as one of the following: unrestricted or restricted donations for spending in the current year; new permanent endowments, for spending over the longer term; or capital grants, to support building or refurbishment projects. Total donation, endowment and grant income as shown in the SOCIE was £1.41m, compared to the previous year’s figure of £2.00m. Donations include a grant from the Colleges Fund of £785k in 2020-21 (£920k in 2019-20). This grant is usually added to endowment, however this year, as last year, because of the financial impact of the COVID-19 pandemic, the Colleges Fund Committee agreed that recipients of the grant might use it for operational purposes. The grant is therefore included in unrestricted income.

Total expenditure within the SOCIE was £8.93m, including depreciation of £1.22m (which represents 13.7% of expenditure). The proportion of total expenditure (excluding depreciation) spent on staff costs was 53.6% (£4.14m), however this includes another reduction in costs resulting from a decrease in the USS deficit provision of £100k (2019-20 credit of £400k). The liability is based on the College’s obligation over a number of years to contribute to the USS deficit recovery plan. The cost of the three pension schemes on offer to staff (USS, CCFPS, NOW), excluding the USS deficit provision change, was £516k, representing 12.2% of staff costs before the USS provision change.

3 Capital Additions

A number of capital transactions relating to the College’s estate and equipment, costing £0.58m (2019-20: £1.27m) are shown in note 10. The Porters’ Lodge was refurbished during the 2020 summer, funded mostly by philanthropic funds. Most other expenditure on the estate related to essential work only which was required to remain compliant with health and safety regulations. The annual cycle of refurbishment of accommodation was put on hold, due to reduced levels of income. The College is however prioritising plans to invest in its estate and is working with architects to identify strategic options for refurbishment and new buildings. The resulting estate “masterplan” will inform fundraising initiatives and financial planning for the short and longer term future of the estate.

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Annual Report and Financial Statements for the year ended 30 June 2021

OPERATING AND FINANCIAL REVIEW (continued)

4 Investments

Since 1 July 2010 the major part of the College’s endowment has been invested in the Cambridge University Endowment Fund (CUEF).

The CUEF’s investment objective is to achieve or exceed a long term average annual rate of total return equal to the Consumer Prices Index (CPI) for each calendar year plus 5%, net of investment management costs. The fund has a hybrid rule for its distribution based on a long-term target capital value rate of 4%. Therefore, the overall long term objective of the CUEF is to achieve an increase in asset values, after paying the distributions, of at least 1% above CPI.

In the year to June 2021 the College invested a further £1,232k in the CUEF, made up of £36k of new endowment funds, £111k of existing endowment funds previously invested with Cazenove Capital Management, and £1,085k fixed asset investments funded by current and prior year Colleges Fund Grants.

The College’s investments in the CUEF were as follows:

ollege’s investments in the CUEF were as follows:
Wolfson College investments in the CUEF	30 June 2021	30 June 2020
Unit value	£69.96	£57.44
Number of units (endowment)	474,445	472,461
Number of units (fixed asset investments)	234,888	219,379
Total number of units	709,333	691,840
Value of units (endowment)	£33.19m	£27.14m
Value of units (fixed asset investments)	£16.43m	£12.60m
Total value of units	£49.62m	£39.74m

The College received distributions totalling £1.54m (£1.05m from the endowment units and £0.49m from the fixed asset investment units), giving a distribution yield of 3.88% on the opening capital value.

The CUEF had a total fund value of £3.84 billion at 30 June 2021. The asset allocation of the CUEF was as follows:

CUEF asset classes	30 June 2021	30 June 2020
	%	%
Public equity	43	47
Private equity	20	15
Absolute return	11	8
Credit	3	5
Real assets	10	9
Fixed interest/cash	13	16

In addition to its investment in the CUEF, the College still holds endowment funds in two private equity funds with Cazenove Capital Management which were valued at £484k as at 30 June 2021 (2020: £567k). The College’s strategy is, as and when exit opportunities arise in those private equity funds, to invest the proceeds in the CUEF. The College supports the CUEF’s aims to divest from all direct and indirect investments in fossil fuels by 2030.

5 Reserves

A reserves policy ensures that the College has sufficient financial resources to continue, but also constrains the extent to which reserves are built up from operating surpluses to help maintain intergenerational equity and balance the needs of current and future students.

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Annual Report and Financial Statements for the year ended 30 June 2021

OPERATING AND FINANCIAL REVIEW (continued)

5 Reserves (continued)

Total reserves at 30 June 2021 were £78.25m, of which £43.94m were classed as ‘unrestricted reserves’. However, as these reserves are mainly represented by the College’s operational estate and therefore not available as funds to be spent, a more practical reserves policy has been implemented. The aim is to have realisable unrestricted reserves, being equivalent to fixed asset investments (excluding the investment cost relating to the £10m private placement) plus net current assets, in the range of 25% to 50% of annual expenditure as shown on the Statement of Consolidated Income and Expenditure, for use in the case of unexpected financial downturns or to pursue new opportunities. The figure for realisable unrestricted reserves at 30 June 2021 was £8.92m, above the specified range of £2.23-4.47m, but considered beneficial in the continuing uncertain circumstances to help fund future capital expenditure requirements.

6 Fundraising and Alumni Relations

Fundraising is a major part of the role of the Development & Alumni Relations Office, which was established in 2008. The College is registered with the Fundraising Regulator and does not use third-party professional fundraisers. Fundraising is geared towards: the annual fund, for spending in the current year; the endowment, for spending over the longer term; or capital grants, to support building or refurbishment projects. As set out above, the endowment creates a stream of income also for spending in the current year. Total donations were as follows:

	30 June 2021	30 June 2020
	£’000	£’000
Colleges Fund grant	785	920
Donations above £50k	50	376
Donations up to £50k	206	194
Bequests from individuals’ estates	171	153
The Alborada Trust	160	160
The Frank Jackson Foundation	-	80
Collegiate Development Accelerator Fund	-	50
Geistlich Pharma AG	-	25
Santander Universities UK	29	25
Cambridge University Press	12	12
Total Donations	1,413	1,995

Donations, whether made to the annual fund, to the endowment or as capital grants, make a significant difference to what the College can achieve, especially in the area of student support. Membership of the Morrison Society is given to those who have made a pledge to the College in their Will, and enables the College to recognise and thank such supporters in their lifetime. At 30 June 2021 there were 105 members of the Morrison Society.

In terms of alumni relations and communications, the Development & Alumni Relations Office has continued to build relationships with the wider membership of Wolfson. The College maintains contact details for over 12,000 alumni, of whom more than half live outside the UK in over 150 different countries. An e-bulletin (Ring True) is emailed to over 10,000 members six times a year, who also receive the Wolfson Review magazine annually. More regular newsletters were sent out during the COVID-19 pandemic which helped to keep the community engaged and a COVID-19 Emergency Appeal raised additional funds. A “virtual” reunion weekend for alumni was held in September 2020, and the Development & Alumni Relations Office has found that the large number of on-line events arranged for members throughout the year has reached a significantly increased audience across the world.

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Annual Report and Financial Statements for the year ended 30 June 2021

OPERATING AND FINANCIAL REVIEW (continued)

7 Principal Risks and Uncertainties

The College has a detailed risk register which the College Council reviews regularly. In this register the risks are set out in the following areas: Students; Finance, Funding & Fundraising; College Estate & Infrastructure; Staff, Fellowship, Membership & Governance; The Changing Landscape of Cambridge; Government & Legislation; and Reputation. A number of risks are analysed in each area. As well as setting out the likelihood of occurrence and severity of impact, the risk register also sets out control procedures, monitoring processes, risk owners and further actions. Whilst the risk of a pandemic was not listed as a specific risk, the College’s Critical Incident Management Plan provided an effective framework for governing the College’s response to the pandemic.

The principal risks and uncertainties facing the College are:

COVID-19 - Students : The trajectory of the pandemic and its longer term economic, social and health effects are still unknown. Initial concerns about student numbers for the 2020-21 academic year proved to be unfounded and student numbers for 2021-22 remain above the College’s target. If the pandemic continues, with its related health and financial risks, and levels of vaccination around the world remain variable, it is unclear how this will affect prospective students’ decisions to undertake further study. Many may see the opportunity to continue their education as a more attractive option than to enter the current volatile job market. Others may wish to delay their further studies until the situation is more settled in order to make the most of the “Cambridge experience”. Whilst the Cambridge brand will undoubtedly continue to be extremely strong, predominantly graduate colleges such as Wolfson, with a significant number of international students, may find it more challenging to recruit and maintain target student numbers.

COVID-19 - Staff : Whilst the College has been fortunate that levels of infection amongst College staff have been extremely low, any increase in the rate of infection amongst staff could have an impact on the delivery of services across the College. In some operational areas, there may be a need to take on additional temporary staff, if available. In other areas, service could be delayed.

COVID-19 – Conferences : Whilst the College has received moderate income from external conferences before the pandemic, such business is unlikely to resume and reach previous levels for some time. It is anticipated that many customers will restrict their expenditure on such events until the travel restrictions and economic pressures due to the pandemic are relieved.

External political and economic threats : Withdrawal from the European Union has the potential to affect the College adversely because of major uncertainty in the following areas: international student recruitment; recruitment of post-doctoral researchers as Junior Research Fellows and College Research Associates; and the employment of EU workers. From 2021-2022 EU/EEA/Swiss students will no longer be eligible for Home Fee status or financial assistance from Student Finance England which is likely to impact the number of applications the College will receive from these students.

Economic factors which might affect the College’s sources of income and growth : The student fees, room rents and catering income from members represent the greatest source of income to the College; accordingly achieving the College’s student number targets is critical to the College’s financial model and increasing student numbers is critical to growth. The University has signalled its intention to increase its postgraduate numbers, particularly by way of increasing the number of its MPhil courses, and is in discussions with colleges about the future size and shape of collegiate Cambridge. There is however no guarantee that University graduate numbers will continue to increase and, since decisions on graduate admissions are taken by the University, the College is dependent on the University to obtain the benefit of any increased student numbers. Any reduction in student numbers would have an impact on the College’s finances. The demand for rooms in College normally outstrips supply, so any shortfall in student numbers would have to be significant before affecting rental income. Fee income, however, is more sensitive to shifts in student numbers.

Staff pension costs : The College has a number of staff in two defined benefit schemes – USS and CCFPS – both of which are in deficit (see Note 21). As at 30 June 2021 there were 38 staff members in USS (whose salaries represented 26% of the June 2021 payroll) and 14 members in CCFPS (representing 10% of the June 2020 payroll). The College is making deficit reduction contributions to both schemes. The College closed CCFPS to new entrants in 2008, which has helped markedly to reduce the exposure to uncertainties associated with the scheme. In the case of USS, the number of new entrants has slowed down considerably since the introduction of a defined contribution scheme for non-academic staff, which helps to manage the risk of the College’s liabilities increasing.

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Annual Report and Financial Statements for the year ended 30 June 2021

OPERATING AND FINANCIAL REVIEW (continued)

7 Principal Risks and Uncertainties (continued)

Costs of providing buildings and facilities which are of a suitable quality to meet the needs of students: While the College has maintained a programme of annual refurbishment of its accommodation and main building, substantially funded by the Wolfson Foundation, funding from the Wolfson Foundation has now been spent. Future refurbishment at the same level is dependent on new fund raising or other income generation. In the meantime, expenditure on the estate has been restricted to essential works. Interrupting the annual programme of refurbishment may mean additional expenditure is required at a later date.

8 Future Plans

Looking to the immediate future, the College’s priority is to continue to ensure the safety and wellbeing of its community throughout the pandemic. Contrary to expectations at the start of the pandemic, applications from prospective students for the academic years commencing in October 2020 and 2021 have been above target levels. The College’s accommodation is expected to be full in 2021 and plans are in place to provide students with an educational and social experience that is as fulfilling as possible in the circumstances. The College has taken all appropriate measures to provide a “COVID-Secure” environment for its students and staff and has plans in place to support its community in the event of further outbreaks of the virus.

Whilst responding to the pandemic will continue to take up a significant amount of time and resource, the College is also looking to the future. The disruption caused by the pandemic and discussions about the future size and shape of collegiate Cambridge have presented opportunities to review the College’s strategic priorities for the future and to consider the potential for growth. Any ambition to increase the number of students at Wolfson is dependent upon the College’s ability to offer sufficient accommodation and appropriate facilities. To that end, the College is working with architects to produce a strategic masterplan for its estate, which will offer options to refurbish existing buildings and develop a variety of sustainable new buildings, as funding permits over the short and longer term.

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Annual Report and Financial Statements for the year ended 30 June 2021

CORPORATE GOVERNANCE

• 1 The following statement is provided by the Trustees to enable readers of the financial statements to obtain a better understanding of the arrangements in the College for the management of its resources and for audit.

• 2 The College is a registered charity (registered number 1138143) and subject to regulation by the Charity Commission for England and Wales. The members of the Council are the charity trustees and are responsible for ensuring compliance with charity law.

• 3 The Trustees are advised in carrying out their duties by a number of Committees, including:

Development Educational Policy Fellowship & Membership Finance Health & Safety House & Student Events IT Strategy Personnel Sustainability

• 4 The principal College officers are the President, Vice-President, Bursar, Senior Tutor and Development Director.

• 5 It is the duty of the Finance Committee to keep under review the effectiveness of the College’s internal systems of financial and other controls; to advise the Trustees on the appointment of the external Auditor; to consider reports submitted by the Auditor; to monitor the implementation of recommendations made by the Auditor; and to make regular reports to the Trustees by way of minutes of its meetings. Membership of the Finance Committee includes all the principal College officers, other members of the Governing Body and the Emeritus Fellowship, the Finance Manager and two officers of the Student Association.

• 6 Three members of the Governing Body, who are not members of the Finance Committee, are elected by the Governing Body to act as Inspectors of Accounts to serve a three-year term, with annual rotation of one Inspector.

• 7 There is a Register of Interests of Trustees. Declarations of interest are made systematically at all Governing Body, Council and committee meetings.

The College’s Trustees during the year ended 30 June 2021 are set out on page 5.

STATEMENT OF INTERNAL CONTROL

• 1 The Trustees are responsible for maintaining a sound system of internal control that supports the achievement of policy, 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.

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

• 3 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. This process was in place for the year ended 30 June 2021 and up to the date of approval of the financial statements.

• 4 The Trustees are responsible for reviewing the effectiveness of the system of internal control.

• 5 The Trustees’ review of the effectiveness of the system of internal control is informed by the work of the various Committees, the Bursar, and the College officers, who have responsibility for the development and maintenance of the internal control framework, and by comments made by the external Auditor in their management letter and other reports.

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Annual Report and Financial Statements for the year ended 30 June 2021

RESPONSIBILITIES OF THE GOVERNING BODY

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

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

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the College will continue in operation.

The Governing Body is responsible for keeping accounting records which disclose with reasonable accuracy at any time the financial position of the College and 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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Annual Report and Financial Statements for the year ended 30 June 2021

INDEPENDENT AUDITOR’S REPORT TO THE GOVERNING BODY OF WOLFSON COLLEGE

Opinion

We have audited the financial statements of Wolfson College (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 College 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:

• give a true and fair view of the state of the College’s affairs as at 30 June 2021 and of its incoming resources and application of resources for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Charities Act 2011 and the Statutes of the University of Cambridge.

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

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

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

We have nothing to report in this regard.

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Annual Report and Financial Statements for the year ended 30 June 2021

INDEPENDENT AUDITOR’S REPORT (continued)

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:

• The contribution due from the College to the University has been computed as advised in the provisional assessment by the University of Cambridge and in accordance with the provisions of Statute G,II, of the University of Cambridge.

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:

• sufficient accounting records have not been kept; or

• the financial statements are not in agreement with the accounting records; or

• we have not received all the information and explanations we require for our audit.

Responsibilities of the Governing Body

As explained more fully in the responsibilities of the Governing Body statement set out on page 15, the Governing Body are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Governing Body determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditors’ responsibilities for the audit of the financial statements

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

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

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

• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• we identified the laws and regulations applicable to the College through discussions with Trustees and other management, and from our knowledge and experience of the education sector;

• we obtained an understanding of the legal and regulatory framework applicable to the College and how the College is complying with that framework;

• we obtained an understanding of the College’s policies and procedures on compliance with laws and regulations, including documentation of any instances of non-compliance;

• we identified which laws and regulations were significant in the context of the College. The Laws and regulations we considered in this context were Charities Act 2011, the Statutes of the University of Cambridge and taxation legislation. We assessed the required compliance with these laws and regulations as part of our audit procedures on the related financial statement items;

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Annual Report and Financial Statements for the year ended 30 June 2021

INDEPENDENT AUDITOR’S REPORT (continued)

• in addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which might be fundamental to the College’s and the Group’s ability to operate or to avoid material penalty; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

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

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

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

• tested journal entries to identify unusual transactions;

• assessed whether judgements and assumptions made in determining the accounting estimates set out in the accounting policy were indicative of potential bias; and

• investigated the rationale behind significant or unusual transactions.

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

• agreeing financial statement disclosures to underlying supporting documentation;

• reviewing minutes of meetings of those charged with governance;

• enquiring of management as to actual and potential litigation and claims.

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

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

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

Use of our report

This report is made solely to the College’s Governing Body as a body, in accordance with College’s statutes, the Statutes of the University of Cambridge and the Charities Act 2011. Our work has been undertaken so that we might state to the Governing Body those matters we are required to state to them in an Auditors’ Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the College and the College’s Governing Body as a body, for our audit work, for this report, or for the opinions we have formed.

PETERS ELWORTHY & MOORE

Chartered Accountants and Statutory Auditors

Salisbury House Station Road Cambridge CB1 2LA Date:

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

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Annual Report and Financial Statements for the year ended 30 June 2021

PART 2: FINANCIAL STATEMENTS	Page
Statement of Principal Accounting Policies	20
Consolidated Statement of Comprehensive Income and Expenditure	26
Consolidated Statement of Changes in Reserves	27
Consolidated and College Balance Sheets	28
Consolidated Cash Flow Statement	29
Notes to the Accounts	30

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Annual Report and Financial Statements for the year ended 30 June 2021

STATEMENT OF PRINCIPAL ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared in accordance with the provisions of the Statutes of the College and of the University of Cambridge, using the Recommended Cambridge College Accounts (RCCA) format, and applicable United Kingdom Accounting Standards, including Financial Reporting Standard 102 (FRS 102) and the Statement of Recommended Practice (SORP): Accounting for Further and Higher Education issued in 2019.

The 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 8.

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

Basis of accounting

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

Basis of consolidation

The consolidated financial statements include the College and its active subsidiary undertaking, Wolfson College Cambridge Enterprises Limited. The financial statements of the College’s two other subsidiary companies, Lee Library Limited and Wolfson College Development Limited, have not been consolidated because they are dormant. Details of the subsidiary undertakings are set out in note 22. The activities of student societies have not been consolidated, because they are separate bodies which are not within the financial control of the College.

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.

Grant income

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.

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

Donations and endowments

Donations and endowments are non-exchange transactions. They are recognised within the Consolidated Statement of Comprehensive Income and Expenditure when the College is entitled to the income.

Donations with donor imposed restrictions are held in restricted reserves until such time that expenditure is incurred in accordance with the restrictions.

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 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;

4. Restricted expendable endowments – the donor has specified a particular objective and the College has the power to use the capital element of the fund.

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Annual Report and Financial Statements for the year ended 30 June 2021

STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (continued)

Investment income and changes in value of investment assets

Investment income and changes in the value of investment assets are recorded in income in the period in which they arise 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. It is recognised in the period to which it relates.

Cambridge Bursary Scheme

Payment of the Cambridge Bursaries to eligible students is made directly by the Student Loans Company (SLC). The College reimburses the SLC for the full amount and the University of Cambridge and other Colleges pay their shares to the College. Each College shows the gross payment made to eligible students within education expenditure and the contribution from the University and other Colleges as income within academic fees and charges.

The net payment of £51k is shown within the Consolidated Statement of Comprehensive Income and Expenditure as follows:

Income (see note 1) £342k Expenditure (see note 5) £393k

Foreign currency translation

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

Non-current assets

Freehold land and buildings

Land is included at deemed cost, being its fair value on the date of transition to FRS102. Land is not depreciated as it is considered to have an indefinite useful life.

Buildings are stated at cost less accumulated depreciation. Costs incurred after initial purchase or construction are capitalised to the extent that they increase the expected future benefit to the College. Buildings and capital improvements are depreciated on a straight line basis over their expected useful economic life of 20-50 years (2% - 5% per annum).

Buildings under construction are valued at cost, based on the value of architects’ certificates and other direct costs incurred. They are not depreciated until they are brought into use.

Equipment

Assets are capitalised and depreciated over their expected useful life as follows:

Furniture and fittings 10 years (10% per annum) General equipment 5 years (20% per annum) Computer equipment 4 years (25% per annum)

Leased assets

The College does not currently have any assets acquired under finance leases. Rental costs under operating leases are charged to expenditure in equal amounts over the periods of the leases.

Investments

Fixed asset and endowment asset investments are included in the balance sheet at fair value, except for investments in subsidiary undertakings which are stated in the College’s balance sheet at cost and eliminated on consolidation.

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Annual Report and Financial Statements for the year ended 30 June 2021

STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (continued)

Stocks

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

Provisions

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

Contingent assets and liabilities

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.

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.

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 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.

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Annual Report and Financial Statements for the year ended 30 June 2021

STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (continued)

Financial instruments (continued)

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.

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 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.

Pension costs

The College participates in two defined benefit type schemes, the Cambridge Colleges Federated Pension Scheme (CCFPS) and the Universities Superannuation Scheme (USS); and one defined contribution scheme (NOW: Pensions).

The CCFPS is a defined benefit scheme with the assets held in a separate trustee-administered fund. The College is able to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and a valuation is obtained as at 30 June annually. The amount charged to expenditure represents the amount calculated under FRS102 guidelines and the College’s net liability is shown in the Balance Sheet .

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Annual Report and Financial Statements for the year ended 30 June 2021

STATEMENT OF PRINCIPAL ACCOUNTING POLICIES (continued)

Pension costs (continued)

The USS is 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 scheme-wide contribution rate is set. The College is therefore exposed to actuarial risks associated with other institutions’ employees and is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis. As required by Section 28 of 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 expenditure represents the contributions payable to the scheme. Since the College has entered into an agreement (the Recovery Plan) that determines how each employer within the scheme will fund the overall deficit, the College recognises a liability for the contributions payable that arise from the agreement (to the extent that they relate to the deficit) with related movements being recognised in expenditure.

The College contributes to a defined contribution pension scheme (NOW: Pensions). For defined contribution schemes the amount charged to expenditure is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either debtors or creditors in the Balance Sheet.

Employment benefits

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

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.

Going concern

The global health crisis caused by COVID-19 has had a significant impact on all businesses.

Forecasts have been prepared which consider the College’s cash resources. The College has taken measures to reduce its cost base in order to combat the reduction in revenues and to extend financial headroom. The College has sought to utilise the Coronavirus Job Retention Scheme and has retained the Colleges Fund Grant as unrestricted income. The College also has investments which could be realised if required.

The Trustees consider that the Group will have sufficient resources to meet its liabilities as they fall due for the foreseeable future and therefore have continued to adopt the going concern basis in preparing the financial statements.

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Annual Report and Financial Statements for the year ended 30 June 2021

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of the College’s accounts requires management to make judgements, estimates and assumptions that affect about the application of accounting policies and reported amounts of assets and liabilities and income and expenses that are not readily apparent from other sources. These judgements, estimates and associated assumptions are based on historical experience and other factors, including expectations of future events, which are considered to be reasonable under the circumstances. Actual results may differ from these estimates.

The areas set out below are considered 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 fixed assets

Property and equipment represent a significant proportion of the College’s total assets. The estimated useful lives can therefore 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 fixed assets are shown in note 10.

Recoverability of debtors

The provision for doubtful debts is based on the College’s estimate of the expected recoverability of those debts. Assumptions are made based on the level of debtors which have defaulted historically, coupled with current economic knowledge. The provision is based on the current situation of the debtor, the age profile of the debt and the nature of the amount due.

Retirement benefit obligations

The cost of defined benefit pension plans are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and the long term nature of these plans, such estimates are subject to significant uncertainty. Further details are given in note 21.

Universities Superannuation Scheme (USS)

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 change is recognised in comprehensive expenditure in accordance with section 28 of FRS102. The Governing Body is satisfied that USS meets the definition of a multi-employer scheme and the College has therefore recognised the discounted fair value of the contractual contributions under the recovery plan in existence at the date of approving the financial statements.

As the College is contractually bound to make deficit recovery payments to USS, this is recognised as a liability on the balance sheet. The provision is currently based on the USS deficit recovery plan agreed after the 2018 actuarial valuation, which defines the deficit payment required as a percentage of future salaries until 2028. These contributions will be reassessed within each triennial valuation of the scheme. The provision is based on management’s estimate of expected future salary inflation, changes in staff numbers and the prevailing rate of discount. Further details are set out in notes 16 and 21.

25

Annual Report and Financial Statements for the year ended 30 June 2021

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND EXPENDITURE

For the year ended 30 June Note Income Academic fees and charges 1 Accommodation, catering and conferences 2 Investment income 3 Other income 4 Total income before donations and endowments Donations New endowments Capital grant from Colleges Fund Other capital grants for assets Total income Expenditure Education 5 Accommodation, catering and conferences 6 Other expenditure 7 Total expenditure 8 Surplus / (deficit) before other gains and losses Gain / (loss) on investments 11 Surplus / (deficit) for the year Other comprehensive income Actuarial gain/(loss) in respect of pension schemes 16 Total comprehensive income for the year	2021 Unrestricted Restricted Endowment Total £’000 £’000 £’000 £’000 3,378 342 - 3,720 2,214 - - 2,214 1,309 235 - 1,544 268 - - 268 7,169 577 - 7,746 276 323 - 599 - - 27 27 785 - - 785 - 2 - 2 8,230 902 27 9,159 3,576 912 - 4,488 3,923 - - 3,923 512 9 - 521 8,011 921 - 8,932 219 (19) 27 227 2,745 434 5,507 8,686 2,964 415 5,534 8,913 253 - - 253 3,217 415 5,534 9,166	2020 Unrestricted Restricted Endowment Total £’000 £’000 £’000 £’000 3,211 323 - 3,534 2,986 - - 2,986 1,282 219 - 1,501 259 - - 259
		7,738 542 - 8,280 247 462 - 709 - - 198 198 920 - - 920 - 168 - 168
		8,905 1,172 198 10,275
		3,442 929 - 4,371 3,932 - - 3,932 198 40 - 238
		7,572 969 - 8,541
		1,333 203 198 1,734 (224) (23) (338) (585)
		1,109 180 (140) 1,149 (119) - - (119)
		990 180 (140) 1,030

26

Annual Report and Financial Statements for the year ended 30 June 2021

CONSOLIDATED STATEMENT OF CHANGES IN RESERVES

For the year ended 30 June Balance at 1 July 2019 Surplus for the year Other comprehensive income Release of restricted capital funds spent in the year Balance at 30 June 2020 Surplus for the year Other comprehensive income Release of restricted capital funds spent in the year Balance at 30 June 2021	Unrestricted Restricted Endowment Total £’000 £’000 £’000 £’000 39,566 2,664 25,820 68,050 1,109 180 (140) 1,149 (119) - - (119) 2 (2) - -
	40,558 2,842 25,680 69,080 2,964 415 5,534 8,913 253 - - 253 168 (168) - -
	43,943 3,089 31,214 78,246

27

Annual Report and Financial Statements for the year ended 30 June 2021

CONSOLIDATED AND COLLEGE BALANCE SHEETS

As at 30 June Note Non-current assets Fixed assets 10 Investments 11 Total non-current assets Current assets Stocks Trade and other receivables 12 Cash and cash equivalents 13 Total current assets Creditors: amounts falling due within one year 14 Net current assets Total assets less current liabilities Creditors: amounts falling due after more than one year 15 Provisions Pension provisions 16 Total net assets Represented by: Restricted reserves Income and expenditure reserve - endowment 17 Income and expenditure reserve - restricted 18 Unrestricted reserves Income and expenditure reserve - unrestricted Total reserves	2021 2021 2020 2020 Group College Group College £’000 £’000 £’000 £’000 39,315 39,315 39,957 39,957 50,111 50,111 40,305 40,305
	89,426 89,426 80,262 80,262
	57 57 63 63 890 890 696 755 2,731 2,731 2,846 2,785
	3,678 3,678 3,605 3,603 (1,187) (1,187) (842) (840)
	2,491 2,491 2,763 2,763
	91,917 91,917 83,025 83,025 (11,117) (11,117) (11,115) (11,115) (2,554) (2,554) (2,830) (2,830)
	78,246 78,246 69,080 69,080
	31,214 31,214 25,680 25,680 3,089 3,089 2,842 2,842 43,943 43,943 40,558 40,558
	78,246 78,246 69,080 69,080

The financial statements were approved by the Governing Body on 10 November 2021 and signed on its behalf by:

Joanna Cheffins Bursar

28

Annual Report and Financial Statements for the year ended 30 June 2021

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 30 June Note Cash flow from operating activities: Surplus for the year Adjustment for non-cash items: - depreciation 10 - pension costs less contributions payable - amortisation of placement arrangement fees - (gain) / loss on investments 11 - (increase) in stocks - (increase) /decrease in trade and other receivables - (decrease) in creditors - increase / (decrease) in provisions Adjustment for investing or financing activities: - investment income 3 - new endowments 17 - capital grants for assets 18 - interest payable 7 Net cash inflow from operating activities Cash flows from investing activities: Investment income 3 New endowments 17 Endowment funds invested 11 Payments made to acquire non-current asset investments 11 Capital grants for assets 18 Payments made to acquire fixed assets 10 Cash flows from financing activities: Interest paid 7 Increase / (decrease) in cash and cash equivalents in the year Cash and cash equivalents at beginning of the year 13 Cash and cash equivalents at end of the year 13	2021 £’000 8,913 1,224 74 2 (8,686) 6 (194) 345 (97) (1,544) (27) (2) 328 342 1,544 27 (35) (1,085) 2 (582) (129) (328) (328) (115) 2,846 2,731	2020 £’000 1,149 1,228 65 3 585 (5) (247) (128) (386) (1,501) (198) (168) 328
		725
		1,501 198 (212) - 168 (1,273)
		382
		(328)
		(328)
		779
		2,067 2,846

29

Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

1 Academic fees and charges Fee income Fee income received at the regulated undergraduate rate (a) Fee income received at the unregulated undergraduate rate (b) Fee income received at the postgraduate rate (c) Other income Research Fellow support Cambridge Bursaries Teaching and other income College courses Total	2021 £’000 572 561 2,162 3,295 76 342 7 - 3,720	2020 £’000 507 594 2,062
		3,163 29 323 19 -
		3,534

(a) This rate is received for UK and EU students who are eligible for Student Finance loans. Such students are sometimes referred to as ‘publicly funded’. The total rate is set by the University up to a limit set by the Government, and the College receives a 50% share.

(b) This rate is paid by Overseas students and those UK and EU students not eligible for Student Finance loans. Such students are sometimes referred to as ‘privately funded’. This rate is set by the College.

(c) This rate is a fixed proportion of the course fees set by the University.

2 Accommodation, catering and conferences income Accommodation College members Conferences Catering College members Conferences Total 3 Investment income Income from: Unquoted securities - unit trust - endowment assets - fixed asset investments Cash Total invested in Cambridge University Endowment Fund units	2021 £’000 1,934 19 254 7 2,214 2021 £’000 1,052 488 4 1,544	2020 £’000 2,126 385 316 159
		2,986
		2020 £’000 1,006 473 22
		1,501

30

Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

4 Other income Coronavirus Job Retention Scheme grant Total 5 Education expenditure Teaching Tutorial Admissions Research Scholarships and awards Cambridge Bursaries Other educational facilities College courses Total 6 Accommodation, catering and conferences expenditure Accommodation College members Conferences Catering College members Conferences Total 7 Other expenditure Alumni relations Loan interest Pension schemes’ finance charges (see note 16) Change in USS deficit provision Total	2021 £’000 268 268 2021 £’000 1,123 867 307 391 710 393 696 1 4,488 2021 £’000 2,804 18 1,084 17 3,923 2021 £’000 256 328 37 (100) 521	2020 £’000 259
		259
		2020 £’000 1,051 853 300 452 676 370 668 1
		4,371
		2020 £’000 2,394 286 1,097 155
		3,932
		2020 £’000 248 328 62 (400)
		238

Expenditure on all activities in notes 5, 6 and 7 includes both direct costs and an allocation of overheads.

31

Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

Analysis of expenditure by activity Note Education 5 Accommodation, catering and conferences 6 Other 7	Staff costs (note 9) Other operating expenses Depreciation 2021 2021 2021 £’000 £’000 £’000 2,042 2,011 435 1,997 1,141 785 96 421 4 4,135 3,573 1,224	Total 2021 £’000 4,488 3,923 521
		8,932

8a Analysis of expenditure by activity

Expenditure includes fundraising costs of £256k in addition to the costs of alumni relations which are disclosed in note 7.

Education 5 Accommodation, catering and conferences 6 Other 7	Staff costs (note 9) Other operating expenses Depreciation 2020 2020 2020 £’000 £’000 £’000 1,985 1,939 447 2,091 1,064 777 (224) 458 4 3,852 3,461 1,228	Total 2020 £’000 4,371 3,932 238
		8,541

Expenditure includes fundraising costs of £248k in addition to the costs of alumni relations which are disclosed in note 7.

8b	Auditor’s remuneration	2021	2020
	Other operating expenses include:	£’000	£’000
	Audit fees payable to the Group’s external auditor (including VAT)	18	19
	Other fees payable to the Group’s external auditor (including VAT)	3	1

32

Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

9 Staff costs Fellows Other Staff Total 2021 £’000 £’000 £’000 Salaries 706 2,736 3,442 National Insurance 56 221 277 Pension costs 84 432 516 Change in USS deficit provision (35) (65) (100) 811 3,324 4,135 Average staff numbers (full-time equivalents): Academic 11 1 12 Non-academic 2 96 98 13 97 110	Total 2020 £’000 3,465 277 510 (400)
	3,852
	12 105
	117

There were 99 Fellows (excluding the President) in the Governing Body as at 1 December 2020, 40 of whom were stipendiary, representing 13 full-time equivalent College Fellows included above.

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

as:
		2021	2020
		Number	Number
£100,001	- £110,000	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 and Trustees

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the College. The key management personnel are the members of the College Council, who act as the Trustees of the charity.

The aggregated remuneration (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) paid to key management personnel was:

College Officers_ex officio_ Fellows elected by the Governing Body	2021 £’000 395 35 430	2020 £’000 401 72
		473

The Trustees received no remuneration in their capacity as Trustees.

33

Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

10 Tangible fixed assets Group and College Cost or valuation At beginning of year Additions at cost Disposals At end of year Depreciation At beginning of year Charge for the year Disposals At end of year Net book value As at 30 June 2021 As at 30 June 2020	Freehold land Freehold buildings Equipment Total 2021 £’000 £’000 £’000 £’000 22,000 28,472 5,101 55,573 - 248 334 582 - - (114) (114) 22,000 28,720 5,321 56,041 - 12,263 3,353 15,616 - 729 495 1,224 - - (114) (114) - 12,992 3,734 16,726 22,000 15,728 1,587 39,315 22,000 16,209 1,748 39,957	Total 2020 £’000 54,674 1,273 (374)
		55,573
		14,762 1,228 (374)
		15,616

The declared value of freehold buildings for insurance purposes as at 30 June 2021 was £56,635,528 (2020: £55,798,548).

Capital commitments	Group and College	Group and College
	2021	2020
	£’000	£’000
Capital expenditure contracted but not provided for	-	-

34

Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

11 Non-current investments Balance at beginning of year Additions Gain / (loss) Balance at end of year Represented by: Unquoted securities - unit trust Unquoted securities - equities Total Analysis by asset: Endowments - permanent Endowments - expendable Fixed asset investments Total 12 Trade and other receivables Members of the College Amounts due from subsidiary undertakings Other receivables Prepayments and accrued income Total 13 Cash and cash equivalents Short-term money market investments Bank deposits Bank current accounts Cash in hand Total cash and cash equivalents Analysis by asset: Endowments – permanent capital Endowments – restricted Other cash and cash equivalents Total	Group 2021 £’000 193 1 53 643 890 Group 2021 £’000 200 2,523 8 - 2,731 2 108 2,621 2,731	College 2021 £’000 193 1 53 643 890 College 2021 £’000 200 2,523 8 - 2,731 2 108 2,621 2,731	Group and College 2021 £’000 2020 £’000 40,305 40,678 1,120 212 8,686 (585) 50,111 40,305 49,627 39,738 484 567 50,111 40,305 31,212 25,679 2,466 2,025 16,433 12,601 50,111 40,305 Group 2020 £’000 College 2020 £’000 150 150 1 60 115 115 430 430 696 755 Group 2020 £’000 College 2020 £’000 - - 2,658 2,658 186 125 2 2 2,846 2,785 1 1 61 61 2,784 2,723 2,846 2,785	Group and College 2021 £’000 2020 £’000 40,305 40,678 1,120 212 8,686 (585) 50,111 40,305 49,627 39,738 484 567 50,111 40,305 31,212 25,679 2,466 2,025 16,433 12,601 50,111 40,305 Group 2020 £’000 College 2020 £’000 150 150 1 60 115 115 430 430 696 755 Group 2020 £’000 College 2020 £’000 - - 2,658 2,658 186 125 2 2 2,846 2,785 1 1 61 61 2,784 2,723 2,846 2,785
				40,305
				39,738 567
				40,305
				25,679 2,025 12,601
				40,305
				College 2020 £’000 150 60 115 430
				755
				College 2020 £’000 - 2,658 125 2
				2,785
				1 61 2,723
				2,785

35

Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

14 Creditors: amounts falling due within one year Trade creditors Members of the College University fees Other creditors (PAYE, NI, VAT) Accruals and deferred income Total 15 Creditors: amounts falling due after mo Bank loan Private placement Private placement arrangement fees Total	Group 2021 £’000 428 267 165 76 251 1,187 re than one year	College 2021 £’000 428 267 165 76 251 1,187	Group 2020 £’000 278 208 128 78 150 842 Group 2021 £’000 1,200 10,000 (83) 11,117	College 2020 £’000 278 208 128 79 147
				840
				and College 2020 £’000 1,200 10,000 (85)
				11,115

Interest is payable on the bank loan at 4.8%. The loan is repayable in August 2048. Interest is payable on the private placement at 2.7%. The placement is repayable in June 2053. The placement arrangement fees are being amortised over the duration of the placement.

16 Pension provisions (see note 21) Balance at beginning of year Movement in the year: Current service cost Administrative expenses Contributions Other allocation to staff costs Other finance costs Actuarial (gain) / loss Balance at end of year	Group CCFPS liability £’000 USS deficit provision £’000 Total 2021 £’000 2,343 487 2,830 176 - 176 14 - 14 (150) - (150) - (100) (100) 34 3 37 (253) - (253) 2,164 390 2,554	and College Total 2020 £’000 3,032 169 14 (166) (400) 62 119
		2,830

Post Balance Sheet Event

Since the year end, following the 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 £695k in the provision for the obligation to fund the deficit on the USS pension which would instead be £1,085k. 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 £1,350k in the provision for the obligation to fund the deficit on the USS pension which would instead be £1,740k.

36

Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

17 Permanent endowments Balance at beginning of year New endowments Transfers Gain / (loss) on investments Balance at end of year Analysis by purpose: Fellowship Funds Scholarship Funds Prize Funds Hardship Funds Bursary Funds Travel Grant Funds Library Funds Other Funds General Total Analysis by asset: Investments Cash	Group and College Unrestricted permanent Restricted permanent Total 2021 Total 2020 £’000 £’000 £’000 £’000 21,505 4,175 25,680 25,820 4 23 27 198 - - - - 4,615 892 5,507 (338) 26,124 5,090 31,214 25,680 - 180 180 150 - 2,716 2,716 2,228 - 120 120 98 - 1,231 1,231 1,005 - 125 125 101 - 61 61 51 - 439 439 362 - 218 218 180 26,124 - 26,124 21,505 26,124 5,090 31,214 25,680 26,124 5,088 31,212 25,679 - 2 2 1 26,124 5,090 31,214 25,680	Group and College Unrestricted permanent Restricted permanent Total 2021 Total 2020 £’000 £’000 £’000 £’000 21,505 4,175 25,680 25,820 4 23 27 198 - - - - 4,615 892 5,507 (338) 26,124 5,090 31,214 25,680 - 180 180 150 - 2,716 2,716 2,228 - 120 120 98 - 1,231 1,231 1,005 - 125 125 101 - 61 61 51 - 439 439 362 - 218 218 180 26,124 - 26,124 21,505 26,124 5,090 31,214 25,680 26,124 5,088 31,212 25,679 - 2 2 1 26,124 5,090 31,214 25,680
		25,680
		150 2,228 98 1,005 101 51 362 180 21,505
		25,680
		25,679 1
		25,680

37

Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

18 Restricted reserves

Group and College

Balance at beginning of year Capital Accumulated income Academic income Investment income New donations New grants Expenditure Capital grants utilised Gain / (loss) on investments Balance at end of year Capital Accumulated income Analysis by purpose: Fellowship Funds Scholarship Funds Prize Funds Hardship Funds Bursary Funds Travel Grant Funds Library Funds Other Funds General Total Analysis by asset: Investments Cash	Capital grants Restricted income Restricted permanent endowment income Expendable endowment Total 2021 £’000 £’000 £’000 £’000 £’000 - - - 1,993 1,993 166 590 47 46 849 166 590 47 2,039 2,842 - 342 - - 342 - 1 158 76 235 - 314 - 9 323 2 - - - 2 - (735) (128) (58) (921) (168) - - - (168) - 3 - 431 434 - - - 2,457 2,457 - 515 77 40 632 - 515 77 2,497 3,089 - 10 6 761 777 - 306 28 1,195 1,529 - - 7 1 8 - - - 93 93 - 7 3 221 231 - - 2 10 12 - - - - - - 192 31 216 439 - - - - - - 515 77 2,497 3,089 - 19 - 2,466 2,485 - 496 77 31 604 - 515 77 2,497 3,089	Total 2020 £’000 1,987 677
		2,664 323 219 462 168 (969) (2) (23) 1,993 849
		2,842
		630 1,412 7 75 188 8 - 522 -
		2,842
		2,041 801
		2,842

Some endowments are classified as expendable rather than permanent to reflect the wishes of the donor; when the donor expects their donation to be retained for the benefit of the College with a view to it having an impact over a number of years while also providing flexibility to spend capital as required.

38

Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

19 Consolidated reconciliation and analysis of net debt

				Other non-
		At 1 July		cash	At 30 June
		2020	Cash flows	changes	2021
		£’000	£’000	£’000	£’000
	Cash and cash equivalents	2,846	(115)	-	2,731
	Borrowings due after more than one year
	Unsecured loans	(11,115)	-	(2)	(11,117)
	Net total	(8,269)	(115)	(2)	(8,386)
20	Financial instruments			2021	2020
				£’000	£’000
	Financial assets
	Financial assets at fair value through Statement of Comprehensive Income
	Other investments			50,119	40,305
	Financial assets that are debt instruments measured at amortised cost
	Cash and cash equivalents			2,731	2,846
	Other debtors			247	266
	Financial liabilities
	Financial liabilities measured at amortised cost
	Loans			11,117	11,115
	Trade creditors			428	278
	Other creditors			508	414

The fair values of the assets held at fair value at the balance sheet date are determined using quoted prices.

21 Pension schemes

The College participates in two defined benefit schemes, the Cambridge Colleges Federated Pension Scheme (CCFPS) and the Universities Superannuation Scheme (USS).

21a Cambridge Colleges Federated Pension Scheme

The liabilities of the plan have been calculated at 30 June for the purposes of FRS102 using a valuation system designed for the Management Committee, acting as Trustee of the CCFPS, 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:

	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 (RPI max 5.0% p.a.)	3.30	3.00
Pension increases in payment (CPI max 2.5% p.a.)	1.95	1.80

39

Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

21a Cambridge Colleges Federated Pension Scheme (continued)

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% p.a., 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% p.a., a standard smoothing factor (7.0) and no allowance for additional improvements). This results in the following life expectancies:

Males aged 65 now have a life expectancy of 21.9 years (previously 21.9 years); Females aged 65 now have a life expectancy of 24.3 years (previously 24.2 years);

Males aged 45 now and retiring in 20 years have a life expectancy of 23.2 years on retirement (previously 23.2 years);

Females aged 45 now and retiring in 20 years have a life expectancy of 25.7 years on retirement (previously 25.6 years).

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

	Male	Female
Active Members – Option 1 Benefits	64	64
Deferred Members – Option 1 Benefits	63	62

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

The amounts recognised in the balance sheet as at 30 June are as follows:

Present value of plan liabilities Market value of plan assets Net defined benefit liability	2021 2020 £’000 £’000 (8,115) (7,912) 5,951 5,569
	(2,164) (2,343)

The amounts recognised in expenditure for the year ending 30 June are:

Current service cost Administrative expenses Interest on net defined benefit liability Total	2021 2020 £’000 £’000 176 169 14 14 34 48
	224 231

Changes in the present value of the plan liabilities for the year ending 30 June are:

Present value of plan liabilities at beginning of year Current service cost Employee contributions Benefits paid Interest on plan liabilities Actuarial (gains) / losses Present value of plan liabilities at end of year	2021 2020 £’000 £’000 7,912 7,365 176 169 10 10 (193) (196) 115 166 95 398
	8,115 7,912

40

Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

21a Cambridge Colleges Federated Pension Scheme (continued)

Changes in the fair value of the plan assets for the year ending 30 June are:

Market value of plan assets at beginning of year Contributions paid by the College Employee contributions Benefits paid Administrative expenses paid Interest on plan assets Return on assets, less interest included in income and expenditure Market value of plan assets at end of year Actual return on plan assets	2021 2020 £’000 £’000 5,569 5,206 150 166 10 10 (193) (196) (20) (19) 80 117 355 285
	5,951 5,569
	436 402

The major categories of plan assets as a percentage of total plan assets at 30 June are as follows:

	2021	2020
Equities	48%	49%
Bonds & Cash	42%	41%
Property	10%	10%
Total	100%	100%

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

Analysis of the re-measurement of the net defined benefit liability recognised in Other Comprehensive Income (OCI) for the year ending 30 June:

Return on assets less interest included in comprehensive income Expected less actual plan expenses Experience gains and losses arising on plan liabilities Changes in assumptions underlying the present value of plan liabilities Re-measurement of net defined benefit liability recognised in OCI	2021 2020 £’000 £’000 355 285 (6) (6) (218) 245 122 (643)
	253 (119)

Movement in the net defined benefit liability during the year ending 30 June are:

Net defined benefit liability at beginning of year Recognised in expenditure Contributions paid by the College Re-measurement of net defined benefit liability recognised in OCI Net defined benefit liability at end of year	2021 2020 £’000 £’000 (2,343) (2,159) (224) (231) 150 166 253 (119)
	(2,164) (2,343)

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.

41

Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

21a Cambridge Colleges Federated Pension Scheme (continued)

The last such valuation was as at 31 March 2020. This showed that the plan’s assets were insufficient to cover the liabilities on the funding basis. A Recovery Plan has been agreed with the College, which commits the College to paying contributions to fund the shortfall.

These deficit reduction contributions are incorporated into the plan’s Schedule of Contributions dated 21 May 2021 and are as follows:

• annual contributions of not less that £35,060 p.a. payable for the period to 30 November 2029.

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

21b Universities Superannuation Scheme

The total amount included in the consolidated statement of comprehensive income and expenditure, including changes in the deficit provision, is a charge of £119,106 (2020: credit of £153,967).

Deficit recovery contributions due within one year for the institutions are £47,501 (2020: £22,116)

As at 30 June 2021, the latest available complete actuarial valuation of the Retirement Income Builder (defined benefit) section of the Scheme was 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 1 October 2021. As the new valuation was not in place at the financial year end, any adjustment in the deficit provision will be reflected in the financial statements for the year ended 30 June 2022.

Since the College cannot identify its share of Retirement Income Builder 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 dependant 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 Pre-retirement: females Post retirement:

Mortality base table

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 CMI_2017 with a smoothing parameter of 8.5 and a long term improvement to mortality rate of 1.8% p.a. for males and 1.6% p.a. for females

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Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

21b Universities Superannuation Scheme (continued)

The current life expectancies (in years) on retirement at age 65 are:

	2021	2020
Males currently aged 65	24.6	24.4
Females currently aged 65	26.1	25.9
Males currently aged 45	26.6	26.3
Females currently aged 45	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 2020 deficit recovery liability reflects this plan.

The provision figures have been produced using the following assumptions:

	2021	2020
Discount rate	0.87%	0.73%
Pensionable salary growth – year 1	1.00%	0.00%
Pensionable salary growth – years 2-16	2.50%	2.50%

22 Subsidiary undertakings

The College’s subsidiary undertakings, all of which are companies incorporated in the United Kingdom, are as follows:

re as follows:
Undertaking	Activity	Holding	%
Wolfson College Cambridge	The provision of conferences	1 ordinary share of	100%
Enterprises Limited	and events at Wolfson	£1
	College, Cambridge
Wolfson College Development	Dormant	1,000 ordinary	100%
Limited		shares of £1 each
Lee Library Limited	Dormant	2 ordinary shares of	100%
		£1 each

23 Related party transactions

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

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

During the 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. All salaries are reviewed annually by the Personnel Committee.

43

Annual Report and Financial Statements for the year ended 30 June 2021

NOTES TO THE ACCOUNTS

For the year ended 30 June

23 Related party transactions (continued)

The salaries paid to Trustees in the year, for duties other than serving as a Trustee, are summarised in the table below:

able below:
From To £0 £10,000 £10,001 £20,000 £20,001 £30,000 £30,001 £40,000 £40,001 £50,000 £50,001 £60,000 £60,001 £70,000 £70,001 £80,000 Total	2021 Number 2020 Number 6 4 1 1 - 1 - 1 - - - - 1 1 3 3
	11 11

The total Trustee salaries were £335,432 for the year (2020 £368,791).

The Trustees were also paid other taxable benefits (including associated employer National Insurance contributions and employer contributions to pensions) which totalled £94,324 for the year (2020: £104,474).

Details of subsidiary undertakings are disclosed in note 22. The College has taken advantage of the exemption within section 33 of FRS 102 not to disclose transactions with wholly owned group companies that are related parties.

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