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2022-06-30-accounts

DARWIN COLLEGE CAMBRIDGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

TABLE OF CONTENTS

Contents Page
Preliminary Information 2
Annual Report of the Trustees 3
Report of the Independent Auditors 12
Statement of Principal Accounting Policies 16
Statement of Comprehensive Income and Expenditure 23
Statement of Changes in Reserves 24
Balance Sheet 25
Cash Flow Statement 26
Notes to the Accounts 27

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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

PRELIMINARY INFORMATION

Body Corporate:

The Master and Fellows of Darwin College in the University of Cambridge

Address:

Silver Street, Cambridge CB3 9EU

Charity Registration Number: 1141105

Charity Trustees:

The College’s Trustees for Financial Year 2021-22 were:

Dr M R W Rands Master Professor F E Karet Vice-Master Dr S Baker Vice-Master Dr D J Needham Dean Mr J T Dix Bursar Professor A F Blackwell Professor R P Cowburn Professor J B Rowe Dr A S C Cloots (to 30 September 2021) Professor C van Ruymbeke (from 1 October 2021)

Principal Advisers:

Auditors: Peters, Elworthy & Moore Salisbury House Station Road Cambridge CB1 2LA

Bankers:

Barclays Bank plc (Corporate Banking) Mortlock House Histon Cambridge CB4 9DE

Property Managers:

Cheffins, Chartered Surveyors Clifton House 1 & 2 Clifton Road Cambridge CB1 7EA

Investment Fund Managers:

Cazenove Capital Management Ltd 12 Moorgate London EC2R 6DA

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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

REPORT OF THE TRUSTEES

INTRODUCTION

The College

Darwin College was founded in 1964 as the first graduate college in the University of Cambridge. The College was created an Approved Foundation on 29 January 1965, and was incorporated by Royal Charter dated 9 June 1976 as a Body Politic and Corporate under the name and style of "The Master and Fellows of Darwin College in the University of Cambridge". The College is an educational charity. It enjoyed exemption from registration from its foundation until 2010 when changes in charity law required it to become registered with the Charity Commission, which it has been since 4 April 2011. The main College site is at Silver Street, Cambridge, CB3 9EU.

Aims and Objectives of the College

The College's principal object under its Charter is to advance education, learning and research in the University of Cambridge. It pursues this objective by:

The maintenance of the College's financial viability for the present and long term, and of its independence and autonomy within the collegiate university, are consistent with and necessary conditions for the fulfilment of its charitable purposes.

Public Benefit

The College provides, in conjunction with the University of Cambridge, an educational and support base for over 700 post-graduate students, and very occasionally undergraduate-status students in specific disciplines. The education under the Cambridge collegiate system is recognised internationally as being of the very highest standard. The teaching and research challenges and develops students academically, fosters leadership qualities and interpersonal skills, and prepares them to play full and effective roles in society, whether in the UK or in the 76 other countries from which the membership is currently drawn. Although only half a century old, the College already numbers Nobel prize winners amongst its Fellows and alumni.

In particular, the College provides:

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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

The College advances research by:

Members of, and academic visitors to, the College, both students and Fellows, are the prime beneficiaries. They are directly engaged in education, learning and research and the College's students are the recipients of such direct financial support as the College is able to provide to those of limited financial means. More widely, other beneficiaries include students and academic staff from other Cambridge Colleges and the University of Cambridge. Academics from other higher-education institutions and returning alumni members of the College are given opportunities to undertake interdisciplinary research and establish contacts, attend educational events at the College, and make use of its academic facilities; in parallel, the wider public is encouraged to attend certain educational activities provided by the College such as lectures, seminars and concerts. These activities serve to reinforce and underpin life-long learning. A particular example is the Annual Darwin Lecture Series, now in its 37th year, which runs for eight weeks each Lent Term, and attracts audiences of many hundreds drawn from the general public as well as the student and academic community. Since 2007 most of the lectures have been made available online for a global audience, and cumulative downloads to date exceed one million. This year as the COVID-19 pandemic abated the lectures successfully reverted to being given in person and were simultaneously live-streamed for the first time.

In fulfilling its charitable purposes of advancing education, learning and research, the College draws on its senior officers such as Master, Vice-Masters, Dean, and Bursar who receive stipends. These serve with other Fellows as charity trustees through being members of the College Council. Other stipendiary senior officers include the Development Director. Any employment and remuneration of the Master and Fellows is undertaken with the intention of furthering the College’s aims and such employment directly contributes to the fulfilment of those aims. The private benefit accruing to the Master and Fellows through stipends and related benefits is objectively reasonable, measured against academic stipends generally; moreover, annual pay increases normally follow national settlements applying to the university sector. Without the services of its Master and Fellows, the College could not fulfil its charitable aims as a College in the University of Cambridge.

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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

ACHIEVEMENTS AND PERFORMANCE

Academic Results and Student Body Profile

College members graduating in the 2021-22 academic year achieved 85 PhDs and 240 Masters-level degrees (2021: 70 and 79 respectively). The high numbers graduating reflect the backlog caused by the COVID-19 pandemic. A further 26 former students who had graduated in absentia during the pandemic returned to Cambridge to attend celebrations of the award of their degrees.

In the 2021-22 academic year there were 825 student members of the College (for all or part of the year) (2021: 833). Of these 619 were fee-paying post-graduate students (including 76 who paid fees directly to the Judge Business School) and 206 were post-graduate students writing up or under examination (from whom the College receives no fees). The College’s fee income in the year, under current arrangements within the collegiate University, is based on its number of fee-paying postgraduate students adjusted to a full-time equivalent, which for the year was 549.67 (2021: 551.47). 34% of fee-paying students were fully funded and 3% partially funded as to their combined graduate fees from sources of which the University or College is aware; the balance were self-funded or funded from sources of which the College is not formally aware.

Financial Overview

The College's income comprises academic fees, charges for student accommodation and catering services, investment income, and individual and corporate donations and bequests. Its expenditure comprises the costs of education, of providing and maintaining student residences and catering, of investment and property management, and of development fundraising and alumni relations; and expenditure includes all staff costs and depreciation. In the 2021-22 year the College made an unrestricted surplus after donations and new endowments but before other gains and losses of £1,468,396 (2021: deficit of £48,534). Excluding donations and new endowments the College recorded an unrestricted deficit of £186,156 (2021 unrestricted deficit: £371,215). In 2021-22 the College made a restricted surplus after donations but before other gains and losses of £6,130 (2021: £1,399,237). No new endowments were recorded in the year (2021: £182,000). The College’s fund grant of £164,000 was received in the year and was held in unrestricted funds at the year end.

The net assets of the College at 30 June 2022 were £81,008,862 (2021: £79,852,725).

The College’s restricted and endowment reserves at 30 June 2022 were £29,868,296 having reduced by £990,028 in the year from £30,858,324. The restricted reserves comprise £9,922,825 of restricted or trust funds for defined educational purposes and £19,946,537 of endowment funds or general corporate capital funds, the income from which is essential to fund the deficit which would otherwise arise on the College's academic activities and student services. The College's unrestricted reserves have increased by £2,146,165 from £48,994,401 to £51,140,566. This total includes the College's cash reserves and some investment assets, but the great majority of such funds are fixed assets in the form of the College's operational land and buildings. The College's total reserves are reduced by a provision for pension liabilities of £1,215,064 (2021: £2,055,234).

The College has issued £13million of unsecured fixed interest rate debt raised by way of private placings. The weighted average rate of interest is 3.06% and repayment of the capital is due in the period 2043-2058. This funding was raised for the purpose of further investment in revenue generating operational assets for the College and has now been applied to the purchase of the Causewayside flats referred to below.

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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

Benefactions and Donations

The College is most grateful for donations and bequests (including of royalties), from alumni and from other supporters and organisations. This generosity enables the College to extend and enhance its support for students and Fellows, for the Darwin Lecture Series, and for its physical estate. Current priorities include fundraising for studentships and student hardship, research fellowships, as well as improving elements of the core site (for example the new lift in the Hermitage), and increasing the stock of student accommodation close to the College site.

Over the course of the year £1,739,114 (2021: £1,551,091) was raised, including documented pledges of £56,357. A total of 332 (2021: 386) individual and organisational donors contributed in the year at a variety of levels. The College is immensely grateful to them for their support. In particular, the College acknowledges with immense gratitude the bequest from César and Celia Milstein of their family house on Hills Road in Cambridge.

The College spent £247,984 (2021: £235,174) on fundraising and alumni relations in the year. These costs are incurred as the College supports a fast-growing – and global – community of alumni. During the year, the College’s events programme has had a mixture of in-person and online events. The College invests in communicating with alumni and other supporters through the College magazine, The Darwinian, as well as making use of electronic and social media.

Endowment and Investment Performance

The College’s financial investments are comprised of its invested endowment. The College, as a permanently endowed charity, adopts a long-term time horizon when making investments of its endowment. The College is advised on investment matters, via the Finance (and Investments) Committee, by its fund managers and independent external members co-opted to the Committee.

The return in the year on the College’s corporate capital (unrestricted endowment) fund and on its (restricted endowment) trust pool fund was -2.6% net of fees. No withdrawal of invested capital from these funds was required or made in the year. Dividends and income received on quoted securities decreased year-on-year to £651,299 (2021: £671,882). All investment income received is applied in the pursuit of the charitable objects of the College.

The College encourages socially responsible investment, and monitors its investments against environmental, social and governance standards. Under its investment policy it will not invest in entities where: the investment may conflict, or be inconsistent, with primary aims, objectives and activities of the College; the investment might alienate the College’s supporters or potential supporters; the investment may be reputationally damaging; the investment is considered by the Trustees to be unethical; or the investment might otherwise hamper the work of the College. In pursuance of this policy the College recognises that climate change is a real and present danger, and encourages debate on the appropriate response by the College to the risks climate change represents. The College seeks to support sustainability, carbon reduction, the development of renewable energy sources, and action to mitigate the effects of adverse climate change. Consequently, it has divested from fossil fuel companies in which it held shares, has invested in positive investment opportunities,

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and maintains its direct and indirect holdings under review to ensure these remain consistent with its investment policy.

Reserves policy

The College intends to continue to pursue its objectives in perpetuity. It therefore aims to protect and maintain the real value of its permanent corporate and trust capital, and to continue to increase its unrestricted funds and reserves for the long term, whilst seeking an equitable funding balance between the interests and aspirations of present members and those yet to come, and also retaining an ability to cope with sudden unforeseen financial upheavals and to take advantage of unexpected opportunities. Any new donations or bequests to the College are added to the unrestricted funds unless the donor has made it clear that the funds are to be used for a specific purpose.

The College’s free reserves stood at the year end at £8,033,077 (2021: £6,741,122), being its total unrestricted reserves of £51,140,566 less that part of those reserves committed to functional assets (represented by the total of its tangible fixed assets) of £43,107,489. The College seeks to ensure that its free reserves stand in excess of one year’s expenditure at current levels. Free reserves at the yearend represented 127% (2021: 116%) of expenditure incurred during the year.

Capital Expenditure

The main items of capital expenditure in the year related to the purchase of 47 Newnham Road and the comprehensive refurbishment of 53 Newnham Road as a new College gym.

The purchase of 47 Newnham Road, when taken with the purchase in recent years of numbers 51 and 53, has enabled the College to complete its exclusive ownership of the entire site with a frontage from 45 to 53 Newnham Road and including Gwen Raverat House to the rear. 47 Newnham Road comprises tenanted shop premises and two flats above.

The refurbishment of 53 Newnham Road will enable the College to offer its members and staff a fully equipped, spacious and centrally located gym for the first time. These works and other maintenancerelated projects have been capitalised in line with the fixed asset accounting policy, to the extent that they increase the expected future benefits to the College.

Building Renewals and Maintenance

The College’s buildings on its main site are mainly eighteenth and nineteenth century with modern additions, and adapted houses and purpose-built student hostels off-domus. The buildings are maintained according to a comprehensive long-term rolling maintenance programme which seeks to ensure timely refurbishment, to a standard to minimise unplanned and costly remedial works, carried out within tight budget controls.

The College has developed a decarbonisation strategy focussing on degasification, as gas consumption for heating and hot water represents over 90% of the College’s direct carbon emissions. Initial energy demand reduction measures with regard to glazing and lighting were undertaking in the year. Plans have been prepared for the replacement of gas by air source heat pumps in Frank Young House. An intercollegiate study to monitor the River Cam’s temperature and flow initiated by the College is underway, as the viability is tested of river source heat as the main replacement for gas for both the College’s main site and for the Newnham Road / Causewayside cluster.

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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

Pensions

The College has members of staff in the Universities' Superannuation Scheme (USS), a defined contribution workplace pension scheme, and the Cambridge Colleges' Federated Pension Scheme (CCFPS) (closed to new members).

The College had 17 active USS members at 30 June 2022, although many Fellows will be USS members though their employment by the University. The USS valuation as at 31 March 2020 valued the assets of the scheme at £66.5 billion and valued its technical provisions at £80.6 billion, indicating a shortfall of £14.1 billion (and a funding ratio of 83%). The College is, taken apart from the University, a very small employer within the scheme. It has considered how to deal with the issues of conflict of interest for Fellows and Trustees should the College wish to take an active part in USS consultations regarding the scheme.

The most recent actuarial review of the CCFPS was as at 30 June 2022. The College’s overall benefit funding liability has decreased to £838,630 (2021: £1,908,830).

COVID-19

The Novel Coronavirus (COVID-19) pandemic abated towards the end of the year, as the virus remained in circulation but with reduced virulence and impact on society. Most of the arrangements put in place in March 2020, under which teaching, welfare support and examinations were delivered online were adjusted to revert to normal or gradually withdrawn as circumstances allowed. The safety and welfare of College members and staff remained the highest priority. The financial impact of the pandemic on the College continued to be felt with reduced catering income both from routine student catering and from the many events and activities which take place in a normal year.

Principal Risks and Uncertainties

The main risks and uncertainties facing the College are those connected with the following matters:

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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

The College reviews risks generally at an institutional level and at an operational level. Major risks to which the College is or may be exposed from time to time are reviewed regularly by all College committees within their terms of reference, and reported to College Council and Governing Body. A risk register is maintained to monitor, mitigate or remove major risks as they are identified. Operational risks are reviewed at a departmental level and appropriate procedures put in place to monitor and control such risks. During the year, in relation to the specific risks the College associated with COVID-19, the College’s working group (comprising Bursar, Dean, Second Bursar, and Head Porter) continued to meet regularly and reported to College Council. The group acted as a conduit for advice and support emanating centrally in the collegiate University and consider the measures required in College and the communications required to keep College members and staff duly informed. Its work was wound down as the pandemic abated at the end of the year.

Post Balance Sheet Event

On 13 July 2022 the College completed the purchase, on a 200-year lease from the University of Cambridge, of the property known as Causewayside, Cambridge. Causewayside comprises 44 flats, built in the mid twentieth century, on a large riverside site adjacent to the College’s existing properties at Gwen Raverat House and on Newnham Road. The flats were tenanted on purchase and as flats become vacant priority will be given to College members seeking accommodation. The total consideration was £17,325,000, to which the major part of the cash on the balance sheet at the yearend was applied. The purchase completes the deployment in revenue generating accommodation assets of the proceeds of the long-term fixed interest debt raised by the College in private placings.

Plans for the future

Implementing the Strategic Plan for Darwin College 2022-2032, as approved by College Council and endorsed by the Governing Body, is a priority for 2022-23. The Plan sets out five strategic priority areas: strengthening the College’s contribution to academic excellence and research impact; fostering a diverse and inclusive College community; enhancing the College estate, facilities and services; expanding and diversifying College revenue; and acting on and promoting solutions to global challenges, including sustainability. Key to delivering these will be developing and launching a College fundraising campaign.

GOVERNANCE

Corporate Governance

The following statement is provided by the Trustees to enable readers of the financial statements to obtain a better understanding of the management of the College's resources and audit oversight.

The College is a registered charity (Registered Number 1141105) and subject to regulation by the Charity Commission for England and Wales. The College Council provides the trustees of the charity and they are responsible for ensuring compliance with charity law. The Trustees are advised in meeting those duties by a number of Committees, and internal and external professionally qualified advisers. Members of the College Council forming the Trustee Body during the year to 30 June 2022 are indicated at Page 2.

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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

The Principal Officers of the College under Statute are the Master, Vice-Master, Dean, and Bursar, and the holders of these offices during the year are identified on Page 2. Two joint Vice-Masters continue to share the duties of the office, and of whom Professor F E Karet serves as Vice-Master for statutory purposes.

The Governing Body, comprising the Master and Fellows under Titles A, C, D, and E, holds at least six meetings a year, with the November/December meeting being the Annual Meeting.

The College Council comprises the Master, Vice-Masters, Dean, and Bursar ex-officio, four Fellows elected by the Governing Body, and three students. The current Student Association President is a member ex-officio, and two further student members are elected directly by the student body each year. The College Council meets on a regular basis throughout the year and is responsible for the everyday administration of the College in all matters not allocated by Statute to the Governing Body or the Finance Committee. The College Council makes regular reports to each meeting of the Governing Body.

The Finance (and Investments) Committee, composed of the Master, Vice-Master, and Bursar exofficio, and three Fellows elected by the Governing Body to serve from the beginning of a given academic year, manages the College investments and, with a directly elected student representative, controls and administers the revenues and expenditures in accordance with College Statutes, Ordinances, and the Charities Act. When acting as the Investment Committee, the membership is reinforced by up to three external members, and the College's investment managers are in attendance.

It is the specified duty of the Finance Committee to keep under constant review the effectiveness of the College’s internal systems of financial and other controls; to advise the Trustees on the appointment of external auditors; to give initial consideration to reports submitted by the auditors; to monitor the implementation of recommendations made by the auditors; and to make periodic formal Reports to the Trustees and Governing Body.

Registers of Interests in a form prescribed by the College's Conflicts of Interest Policy are maintained for the Trustees, and Related Party forms are obtained from the Trustees and senior staff as part of the annual audit. The declaration of interests is a formal agenda item at the beginning of every College meeting.

Statement on Internal Control

The Trustees are responsible for ensuring a sound system of internal control that supports the achievement of policies, aims and objectives while safeguarding public and other funds and assets for which the charity holds responsibility, in accordance with College Statutes and Ordinances, and the Charities Act 2006.

The systems of internal control are designed to identify the principal risks bearing on the achievement of aims, objectives and policies, to evaluate the nature and extent of those risks, and to ameliorate and control them efficiently, effectively and economically. The systems of internal control are structured realistically to identify and control most of the risks of failure to achieve aims, objectives and policies, rather than attempt to eliminate risk entirely; it therefore provides reasonable, but not absolute, assurance of effectiveness. These processes were in place for the year ended 30 June 2022 and throughout the period to the date of approval of the financial statements.

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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

The Trustees are responsible for reviewing the effectiveness of the systems of internal control. The Trustees’ continual review of the effectiveness of the systems is informed by the work of the various Committees, the Bursar, and the College Officers who hold responsibility for the development and application of an internal control framework and for the investigation and resolution of any comments raised by the external auditors in their post audit and other reports.

General Responsibilities of the Trustees

The Trustees are responsible for the preparation of the Annual Report and financial statements in accordance with applicable law and having regard to United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The College Statutes and Ordinances, and those 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 Trustees are required to:

The Trustees are responsible for keeping accounting records which, at any time, disclose with reasonable accuracy 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.

Approved by the Trustees on 16 November 2022

J T Dix Bursar

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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

INDEPENDENT AUDITORS’ REPORT TO THE TRUSTEES OF DARWIN COLLEGE

Opinion

We have audited the financial statements of Darwin College (the ‘College’) for the year ended 30 June 2022 which comprise the Statement of Comprehensive Income and Expenditure, the Statement of Changes in Reserves, the Balance Sheet, the Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion, the financial statements:

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Other information

The Governing Body 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.

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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

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

We have nothing to report in this regard.

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

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

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 Annual Report of the Trustees.

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

Responsibilities of the trustees

As explained more fully in the responsibilities of the trustees’ statement set out on page 11, the trustees 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 trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when

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it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

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

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

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

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

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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 trustees 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 trustees 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 trustees 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: 28 November 2022

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

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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

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 Statement of Comprehensive Income and Expenditure includes activity analysis in order to demonstrate that all fee income is spent for educational purposes. The analysis required by the SORP is set out in note 6.

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

Basis of accounting

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

Going Concern

The financial statements have been prepared on a going concern basis. The College has prepared forecasts beyond the 30 June 2022 year-end up to December 2023. The College has also set a detailed budget plan for the financial year 2022-23. This financial planning work has included an analysis of the College's unrestricted liquid resources, and together these financial plans demonstrate that the College has sufficient resources to meet liabilities as they fall due. The Trustees consider preparation of these financial statements using a going concern basis to be appropriate.

Recognition of income

Academic fees

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

Restricted grant income

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

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

Donations and endowments

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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

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

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

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

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

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

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

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

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

Investment income and change in value of investment assets

Investment income and change in value of investment assets are recorded in income in the year 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 residences, catering conferences and other services rendered.

Cambridge Bursary Scheme

In 2021-22, payment of the Cambridge Bursaries to eligible students was made directly by the Student Loans Company (SLC). As a consequence the College reimbursed the SLC for the full amount paid to their eligible students and the College subsequently received a contribution from the University of Cambridge towards this payment.

The net payment of £4,550 is shown within the Statement of Comprehensive Income and Expenditure as follows: Income (see note 1) £4,550 Expenditure £9,100

17

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

Tangible fixed assets

Land and buildings

Fixed assets are stated at deemed cost less accumulated depreciation and accumulated impairment losses. Certain items of fixed assets that had been revalued to fair value on or prior to 1 July 2014, the date of transition to FRS 102, are measured on the basis of deemed cost, being the revalued amount at the date of that revaluation.

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

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

Freehold land is not depreciated as it is considered to have an indefinite useful life. Freehold buildings are depreciated on a straight-line basis over their expected useful lives of between 50 and 100 years.

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.

Furniture, Fittings and Equipment

Furniture, fittings and equipment in excess of £5,000 are capitalised and depreciated over their estimated useful lives.

Leased assets

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

Investments

Fixed asset investments are included in the balance sheet at fair value. Investments that are not listed on a recognised stock exchange are carried at historical cost less any provision for impairment in their value/market value.

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 College 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.

18

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

Contingent liabilities and assets

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

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

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

Financial Instruments

The College has elected to adopt Sections 11 and 12 of FRS 102 in respect of the recognition, measurement and disclosure of financial instruments. Financial assets and liabilities are recognised when the College becomes party 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 and Expenditure.

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 and Expenditure. 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.

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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

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

Financial Liabilities

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

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

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

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

Taxation

The College is a registered charity (number 1141105) and also a charity within the meaning of Section 467 of the Corporation Tax Act 2010. Accordingly, the College is exempt from taxation in respect of income or capital gains received within the categories covered by Sections 478 to 488 of the Corporation Tax Act 2010 or Section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that such income or gains are applied to exclusively charitable purposes.

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

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

Universities Superannuation Scheme (USS)

The institution participates in Universities Superannuation Scheme. The scheme 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 institution is therefore exposed to actuarial risks associated with other institutions’

20

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

employees and is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis. As required by Section 28 of FRS 102 “Employee benefits”, the institution therefore accounts for the scheme as if it were a wholly defined contribution scheme. As a result, the amount charged to the Statement of Comprehensive Income and Expenditure represents the contributions payable to the scheme. Since the institution has entered into an agreement (the Recovery Plan) that determines how each employer within the scheme will fund the overall deficit, the institution recognises a liability for the contributions payable that arise from the agreement (to the extent that they relate to the deficit) with related expenses being recognised through the income and expenditure account.

Cambridge Colleges Federated Pension Scheme (CCFPS)

The College participates in the Cambridge Colleges Federated Pension Scheme, a defined benefit scheme. Pension costs are assessed in accordance with the advice of the actuary, based on the latest actuarial valuation of the Scheme and are accounted for on the basis of providing pensions over the period during which the College benefits from the employees’ services.

Employment benefits

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

Reserves

Reserves are allocated between restricted and unrestricted reserves. Endowment reserves include balances which, in respect of endowment to the College, are held as permanent funds, which the College must hold in perpetuity.

Restricted reserves include balances in respect of which the donor has designated a specific purpose and therefore the College is restricted in the use of these funds.

Critical accounting judgements

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

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

21

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

Income recognition

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

Useful lives of property, plant and equipment

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

Retirement benefit obligations

The cost of defined benefit pension plans is 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 24.

FRS 102 makes the distinction between a group pension plan and a multi-employer pension 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 Universities Superannuation Scheme. The accounting for a multi-employer scheme where the employer has entered into an agreement with the scheme that determines how the employer will fund a deficit results in the recognition of a liability for the contributions payable that arise from the agreement (to the extent that they relate to the deficit) and the resulting expense in income and expenditure in accordance with section 28 of FRS 102. The Trustees are satisfied that Universities Superannuation Scheme meets the definition of a multiemployer scheme and has therefore recognised the discounted fair value of the contractual contributions under the funding plan in existence at the date of approving the financial statements.

22

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

STATEMENT OF COMPREHENSIVE INCOME AND EXPENDITURE

Income
Academic fees & charges
Residences & catering
Investment Income
Other income (Coronavirus Job Retention
Scheme)
Total income before donations
& endowments
Donations
New endowments
Capital grant from Colleges Fund
Other capital grants for assets
Total income
Expenditure
Education
Residences & catering
Other expenditure
Total Expenditure
Surplus/(Deficit) before
other gains and losses
Gains/(Losses) on disposal of fixed assets
Gains/(Losses) on investments
Surplus/(Deficit) for the year
Other comprehensive income
Actuarial gain/(loss) in respect
of pension schemes
Total comprehensive income for the
year		 2022
Unrestricted
Restricted
Endowment
Total
Note
1
2,520,074
-
-
2,520,074
2
3,105,753
-
-
3,105,753
3
509,259
245,476
-
754,735
-
-
-
-
6,135,086
245,476 - 6,380,562
1,490,552
51,601
1,542,153
-
-
-
-
164,000
-
-
164,000
-
1,066
1,066
7,789,638
298,143
-
8,087,781
4
2,462,417
292,013
-
2,754,430
5
3,240,270
-
-
3,240,270
618,555
-
-
618,555
6,321,242
292,013
-
6,613,255
1,468,396
6,130
-
1,474,526
-
-
-
-
(494,596)
(185,991)
(809,101)
(1,489,688)
973,800
(179,861)
(809,101)
(15,162)
1,171,299
-
-
1,171,299
2,145,099
(179,861)
(809,101)
1,156,137		 2021
Unrestricted
Restricted
Endowment
Total
£
£
£
£
2,255,887
-
-
2,255,887
2,182,247
-
-
2,182,247
618,246
159,465
-
777,711
114,994
-
-
114,994
5,171,374
159,465
- 5,330,839
322,681
1,506,892
-
1,829,573
-
-
-
-
-
-
182,000
182,000
-
1,149
-
1,149
5,494,055
1,667,506
182,000
7,343,561
2,113,365
268,269
-
2,381,634
2,833,091
-
-
2,833,091
596,133
-
-
596,133
5,542,589
268,269
-
5,810,858
(48,534)
1,399,237
182,000
1,532,703
-
-
-
-
1,007,194
535,501
2,441,258
3,983,953
958,660
1,934,738
2,623,258
5,516,656
671,721
-
-
671,721
1,630,381
1,934,738
2,623,258
6,188,377

23

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

STATEMENT OF CHANGES IN RESERVES

Income and Expenditure reserve

Balance at 1 July 2021
Surplus/(Deficit) from income and
expenditure statement
Other comprehensive income
Release of restricted capital funds
spent in year
Balance at 30 June 2022		 Unrestricted
£
48,994,401
973,800
1,171,299
1,066
51,140,566		 Restricted
£

5,201,055
(179,861)

-

(1,066)
5,020,128		 Endowment
£

25,657,269
(809,101)
-
-

24,848,168		 Total
£
79,852,725
(15,162)
1,171,299
-
81,008,862
Balance at 1 July 2020
Surplus/(Deficit) from income and
expenditure statement
Other comprehensive income
Release of restricted capital funds
spent in year
Balance at 30 June 2021		 Income and Expenditure
Unrestricted
Restricted
£
£
47,343,393
3,286,944
958,660
1,934,738
671,721
-
20,627
(20,627)
48,994,401
5,201,055		 reserve
Endowment
£
23,034,011
2,623,258
-
-
25,657,269		 Total
£
73,664,348
5,516,656
671,721
-
79,852,725

24

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

BALANCE SHEET AS AT 30 JUNE 2022

Note
Fixed Assets
Tangible Assets
8
Investment Assets
9
Current Assets
Stock
10
Debtors
11
Cash
12
Creditors
13
Net Current Assets/(Liabilities)
Creditors: more than one year
14
Provisions
Pension provision
15
Net Assets
Restricted Reserves
Income and expenditure reserve - endowment reserve
16
Income and expenditure reserve - restricted reserve
17
Unrestricted Reserves
Income and expenditure reserve - unrestricted
Total Reserves		 2022
£
43,107,489
35,934,564
79,042,053
46,045
667,827
16,798,885
17,512,757
1,330,884
16,181,873
(13,000,000)
(1,215,064)
81,008,862
24,848,168
5,020,128
29,868,296
51,140,566
51,140,566
81,008,862		 2021
£
42,253,279
43,114,379
85,367,658
44,870
856,854
9,805,192
10,706,916
1,166,615
9,540,301
(13,000,000)
(2,055,234)
79,852,725
25,657,269
5,201,055
30,858,324
48,994,401
48,994,401
79,852,725

These accounts were approved by the Trustees on 16 November 2022 and are signed on their behalf by:

……………………………………………… Dr M Rands, Master

25

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

CASH FLOW STATEMENT

Note
Net cash inflow from operating activities
18
Cash flows from investing activities
19
Cash flows from financing activities
20
Increase/(Decrease) in cash and cash equivalents in the year
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
12		 2022
£
1,843,584
4,754,224
395,885
6,993,693
9,805,192
16,798,885		 2021
£
1,070,084
786,102
395,222
2,251,408
7,553,784
9,805,192

26

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

NOTES TO THE ACCOUNTS

1
Academic fees and charges
Colleges fees:
Fee income received at the Regulated undergraduate rate
Fee income received at the Unregulated rate
Fee income received at the Graduate fee rate
Other income
Total
2
Income from Accommodation and Catering
Accommodation College members
Catering College members
Total
3
Endowment return and investment income
Income from:
Land and buildings
Quoted securities
Other interest receivable
Total
4
Education expenditure
Teaching
Tutorial
Admissions
Research
Scholarships and awards
Other educational facilities
Total (Note 6)		 2022
£
10,998
23,700
2,462,328
23,048
2,520,074
2022
£
2,669,588
436,165
3,105,753
2022
£
84,713
651,299
18,723
754,735
2022
£
131,084
498,729
659,183
374,969
360,743
729,722
2,754,430		 2021
£
24,920
30,000
2,199,409
1,558
2,255,887
2021
£
2,019,749
162,498
2,182,247
2021
£
79,489
671,882
26,340
777,711
2021
£
125,736
402,682
559,018
350,869
278,796
664,533
2,381,634

27

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

5
Accommodation and Catering Expenditure
Accommodation College members
Catering College members
Total (Note 6)		 2022
£
2,183,932
1,056,338
3,240,270		 2021
£
2,030,992
802,099
2,833,091

6a Analysis of 2021/2022 expenditure by activity

ctivity
Staff costs
(note 7)
£
1,430,742
1,302,315
94,695
2,827,752		 Other
operating
expenses
£
1,072,760
1,352,455
523,860
2,949,075		 Depreciation
£
250,928
585,500
-
836,428		 Total
£
2,754,430
3,240,270
618,555
6,613,255

Expenditure includes fundraising costs of £247,984. This expenditure includes the costs of alumni relations.

6b Analysis of 2020/2021 expenditure by activity

Education
Accommodation and catering
Other
Total		 Staff costs
(note 7)
£
1,230,613
1,139,291
76,630
2,446,534		 Other
operating
expenses
£
908,919
1,128,895
519,503
2,557,317		 Depreciation
£
242,102
564,905
-
807,007
 Total
£
2,381,634
2,833,091
596,133
5,810,858

Expenditure includes fundraising costs of £235,174. This expenditure includes the costs of alumni relations.

6c Auditors’ remuneration 2022 2021
£ £
Other operating expenses include:
Audit fees payable to the College’s external auditors 21,978 20,538
Other fees payable to the College's external auditors 2,220 2,100

28

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

7a Staff costs

Staff costs
Staff costs:
Salaries
National Insurance
Pension costs
Academic
Non-academic
Total		 Academic
£
419,594
33,025
283,925
736,544
2022
Number of
Fellows
26
26		 Non-
Academic
£
1,543,826
116,739
430,643
2,091,208
2022
Full-time
equivalents
52
52		 2022
Total
£
1,963,420
149,764
714,568
2,827,752
2021
Number
of Fellows
29
29		 2021
Total
£
1,795,454
136,467
514,613
2,446,534
2021
Full-time
equivalents
51
51

At the Balance Sheet date the Governing Body comprised of 70 Fellows, of which 9 served as Trustees on College Council. During the year the average number of Fellows receiving remuneration was 26 as shown above. The Trustees received no remuneration in their capacity as Trustees of the Charity.

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

2022 2021
Total Total
£100,001 - £110,000 0 1
£110,001 - £120,000 1 0

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

7b Key Management Personnel

Key Management Personnel
2022 2022
£ £
Aggregated remuneration of key management personnel 245,237 235,356

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the College. The aggregated remuneration paid to key management personnel consists of salary, employer's national insurance contributions, employer's pension contributions, plus any taxable benefits either paid, payable or provided, gross of any salary sacrifice arrangements. For Darwin College, key management personnel are the Master, the Bursar and the Dean.

29

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

8 Fixed assets

Tangible fixed assets

Cost or valuation
At beginning of year
Transfer from assets under
construction
Additions at cost
Disposal at cost
At end of year
Depreciation
At beginning of year
Charge for the year
Written back on disposal
At end of year
Net book value
At end of year
At beginning of year		 Land
£
21,108,421
-
1,283,333
-
22,391,754
-
-
-
-
22,391,754
21,108,421		 College
Buildings
£
22,815,712
420,984
1,328,427
-
24,565,123
4,454,528
830,538
-
5,285,066
19,280,057
18,361,184		 Assets
Under
Construction
£
2,777,546
(420,984)
486,878
(1,408,000)
1,435,440
-
-
-
-
1,435,440
2,777,546		 Fixtures,
Fittings &
Equipment
£
36,788
-
-
-
36,788
32,787
4,001
-
36,788
-
4,001		 Motor
Vehicles
£
10,524
-
-
-
10,524
8,397
1,889
-
10,286
238
2,127		 2022
Total
£
46,748,991
-
3,098,638
(1,408,000)

48,439,629
4,495,712
836,428
-

5,332,140

43,107,489
42,253,279		 2021
Total
£
46,384,691
-
364,300
-
46,748,991
3,688,705
807,007
-
4,495,712
42,253,279
42,695,986

The insured value of freehold buildings as at 30 June 2022 was £42,997,019 (2021: £39,821,237).

30

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

9
Investments
Balance at beginning of year
Additions
Disposals
Gain/(Loss)
Increase/(Decrease) in cash balances held at fund managers
Balance at end of year
Represented by:
Property
Quoted securities - equities
Fixed interest securities
Cash in hand at investment managers
Other
10
Stocks
Goods for resale
11
Trade and other receivables
Members of the College
University fees
Other receivables
Prepayments and accrued income
12
Cash and cash equivalents
Short-term money market investments
Bank deposits
Current accounts
Cash in hand		 2022
£
43,114,379
8,688,394
(9,641,845)
(1,075,262)
(5,151,102)
35,934,564
2,580,000
24,737,883
2,558,187
1,383,114
4,675,380
35,934,564
2022
£
46,045
2022
£
417,434
-
11,509
238,884
667,827
2022
£
-
16,398,263
397,660
2,962
16,798,885		 2021
£
39,503,118
9,452,124
(9,519,001)
3,301,924
376,214
43,114,379
2,530,000
27,459,587
2,698,154
6,533,967
3,892,671
43,114,379
2021
£
44,870
2021
£
302,867
-
2,079
551,908
856,854
2021
£
4,017,223
5,789,615
(4,161)
2,515
9,805,192

31

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

13 Creditors: amounts falling due within one year

Trade creditors
Members of the College
University fees
Other creditors
Accruals and deferred income
14
Creditors: amounts falling due after more than one year
Private Placement		 2022
£
216,829
182,052
366,441
76,404
489,158
1,330,884
2022
£
13,000,000		 2021
£
292,238
266,203
235,522
43,961
328,691
1,166,615
2021
£
13,000,000

During 2013-14, the College borrowed from institutional investors, collectively with other Colleges, the College's share being £3 million. The loans are unsecured and repayable during the period 2043-2053, and are at fixed interest rates of approximately 4.4%. The College has agreed a financial covenant of the ratio of Borrowings to Net Assets and has been in compliance with the covenant at all times since incurring the debt.

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

15 Pension provisions

Pension provisions
Balance at beginning of year
Movement in year:
Current service cost including life
assurance
Contributions
Other finance (income)/cost
Actuarial loss/(gain) recognised in
Statement of Comprehensive
Income and Expenditure
Balance at end of year		 CCFPS
£
1,908,830
414,410
(313,311)
-
(1,171,299)
838,630		 USS
£
146,404
306,110
(76,080)
-
-
376,434		 2022
Total
£
2,055,234
720,520
(389,391)
-
(1,171,299)
1,215,064		 2021
Total
£
2,543,508
530,296
(346,849)
-
(671,721)
2,055,234

32

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

16
Endowment funds
Balance at beginning of year:
Capital
New donations and endowments
Increase/(Decrease) in market
value of investments
Transfer of funds
Balance at end of year
Analysis by type of purpose
Fellowship Funds
Scholarship and Studentship
Funds
Bursary Funds
Travel Grant Funds
Other Funds
General endowments
Analysis by asset
Property
Investments
Cash		 Restricted
permanent
endowments
£
5,114,116
-
(211,419)
-
4,902,697
2,836,052
1,128,142
653,087
258,662
26,754
-
4,902,697		 Unrestricted
permanent
endowments
£
20,543,153
-
(597,682)
-
19,945,471
-
-
-
-
-
19,945,471
19,945,471		 2022
Total
£
25,657,269
-
(809,101)
-
24,848,168
2,836,052
1,128,142
653,087
258,662
26,754
19,945,471
24,848,168
2,480,000
22,368,168
-
24,848,168		 2021
Total
£
23,034,011
182,000
2,441,258
-
25,657,269
2,958,351
1,176,791
681,250
269,816
27,908
20,543,153
25,657,269
2,530,000
23,127,269
-
25,657,269

33

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

17 Restricted Reserves

Reserves with restrictions are
as follows:
Balance at beginning of year:
New grants
New donations
Endowment return
transferred
Other investment income
Increase/(Decrease) in
market value of investments
Expenditure
Capital grants utilised
Transfer to unrestricted
Balance at end of year
Analysis of other restricted
funds/donations by type of
purpose
Fellowship Funds
Scholarship and Studentship
Funds
Bursary Funds
Travel Grant Funds
Other Funds
General
Analysis by asset
Property
Investments
Cash		 Capital
grants
unspent
£
-
-
1,066
-
-
-
-
(1,066)
-
-
-
-
-
-
-
-
-		 Permanent
unspent &
other
restricted
income
£
3,124,051
-
34,202
-
200,497
(109,157)
(250,340)
-
-
2,999,253
1,268,420
1,141,341
535,118
34,344
20,030
-
2,999,253		 Restricted
expendable
endowment
£
2,077,004
-
17,399
-
44,979
(76,834)
(41,673)
-
-
2,020,875
40,718
1,980,157
-
-
-
-
2,020,875		 2022
Total
£
5,201,055
-
52,667
-
245,476
(185,991)
(292,013)
(1,066)
-
5,020,128
1,309,137
3,121,498
535,118
34,344
20,030
-
5,020,128
-
4,471,092
549,036
5,020,128		 2021
Total
£
3,286,944
-
1,508,040
-
159,465
535,501
(268,268)
(20,627)
-
5,201,055
1,348,717
3,248,851
558,751
30,589
14,147
-
5,201,055
-
4,663,898
537,157
5,201,055

34

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

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

Surplus/(Deficit) for the year
Adjustment for non-cash items
Depreciation
Investment management costs
(Gain)/loss on endowments and investment property
(Increase)/Decrease in stocks
(Increase)/Decrease in trade and other receivables
Increase/(Decrease) in creditors
Pension costs less contributions payable
Adjustment for investing or financing activities
Investment income
Interest payable
Loan fees paid
Net cash inflow from operating activities
19
Cash flows from investing activities
Non-current investment disposal
Investment income
Endowment funds invested
(Increase)/Decrease in cash balances held at fund managers
Payments made to acquire non-current fixed assets
Total cash flows from investing activities
20
Cash flows from financing activities
Interest paid
New loan
New loan fees paid
Total cash flows from financing activities		 2022
£
1,156,137
836,428
-
1,489,688
(1,175)
189,027
164,271
(840,169)
(754,735)
(395,885)
-
1,843,584
2022
£
10,635,419
754,735
(8,688,394)
5,151,102
(3,098,638)
4,754,224
2022
£
395,885
-
-
395,885		 2021
£
6,188,377
807,007
-
(3,983,953)
(2,340)
(241,274)
(36,526)
(488,274)
(777,711)
(395,222)
-
1,070,084
2021
£
10,201,029
777,711
(9,452,124)
(376,214)
(364,300)
786,102
2021
£
395,222
-
-
395,222

35

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

21 Consolidated reconciliation and analysis of net debt

Cash and cash equivalents
Borrowings - amounts due within
one year
Borrowings - amounts due after
more than one year
Unsecured loans
Net total		 At 1 July 2021
£
9,805,192
-
13,000,000
(3,194,808)		 Cash flows
£
6,993,693
-
-
6,993,693		 At 30 June 2022
£
16,798,885
-
13,000,000
3,798,885

See note 14 for further details of the £13m unsecured debt, raised by private placements, at fixed interestrates and repayable 2043 - 2058.

22 Financial Instruments

Financial Instruments
2022 2021
£ £
Financial Assets
Financial assets at fair value through Statement of Comprehensive income
Listed equity investments 31,961,450 34,040,411
Financial assets that are equity instruments measured at cost less impairment
Other equity investments 10,001 10,001
Financial assets that are debt instruments measured at amortised cost
Cash and cash equivalents 16,798,885 9,805,192
Cash in hand at investment managers 1,383,114 6,533,967
Other debtors 667,827 856,854
Financial Liabilities
Financial liabilities measured at amortised cost
Loans 13,000,000 13,000,000
Trade creditors 216,829 292,238
Other creditors 1,114,055 874,377

The fair values of the assets and liabilities held at fair value through profit and loss at the balance sheet date are determined using quoted prices.

23 Lease obligations

Lease obligations
2022 2021
At 30 June 2022 the College had annual commitments under non-cancellable
operating leases as follows:		 £ £
Land and buildings:
Expiring within one year 179,813 174,531
Expiring between two and five years 774,840 752,271
Expiring in over five years - 202,382

36

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

24 Pensions

The College participates in two defined benefit schemes, the Universities' Superannuation Scheme (USS) and the Cambridge Colleges' Federated Pensions Scheme (CCFPS). The assets of the schemes are held in separate trustee‑administered funds. The total pension cost for the 12 months to 30 June 2022 was £281,202 (2021: £267,234).

24a Universities' Superannuation Scheme

The total cost charged to the profit and loss account is £76,080 (2021: 74,215).

Deficit recovery contributions due within one year for the institution are £47,798 (2021: £39,543).

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

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

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

The key financial assumptions used in the 2020 valuation are described below. More detail is set out in the Statement of Funding Principles.

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

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 2020 actuarial valuation. The mortality assumptions used in these figures are as follows:

2020 valuation

Mortality base table 101% of SAPS S2PMA “light” for males and 95% of S3PFA for females

Future improvements to CMI_2019 with a smoothing parameter of 7.5 and a long term improvement mortality rate of 1.8% pa for males and 1.6% pa for females.

37

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

Note 24a (USS) cont.

The current life expectancies on retirement at age 65 are:

2022 2021
Males currently aged 65 (years) 23.9 24.6
Females currently aged 65 (years) 25.5 26.1
Males currently aged 45 (years) 25.9 26.6
Females currently aged 45 (years) 27.3 27.9

A new deficit recovery plan was put in place as part of the 2020 valuation, which requires payment of 6.2% of salaries over the period 1 April 2022 to 31 March 2024, at which point the rate wil increase to 6.3%. The 2022 deficit recovery liability reflects this plan. The liability figures have been produced using the following assumptions:

2022 2021
Discount rate 3.31% 0.87%
Pensionable salary growth n/a n/a

24b Cambridge Colleges' Federated Pension Scheme

The College operates a defined benefit pension plan for the College’s employees of the Cambridge Colleges’ Federated Pension Scheme.

The liabilities of the plan have been calculated, at 30 June 2022, for the purposes of FRS102 using a valuation system designed for the Management Committee, acting as Trustee of the Cambridge Colleges’ Federated Pension Scheme, but allowing for the different assumptions required under FRS102 and taking fully into consideration changes in the plan benefit structure and membership since that date.

The principal actuarial assumptions at the balance sheet date were as follows:

2022 2021
% p.a. % p.a.
Discount rate 3.80 1.80
Increase in salaries 3.24 3.10
RPI assumption 3.45 3.40
CPI assumption 2.75 2.60
Pension increases in payment (RPI Max 5% p.a.) 3.30 3.30
Pension Increases in payment (CPI Max 2.5% p.a.) 2.05 1.95

The underlying mortality assumption is based upon the standard table known as S3PA on a year of birth usage with CMI_2020 future improvement factors and a long-term rate of future improvement of 1.25% per annum, a standard smoothing factor (7.0) and no allowance for additional improvements (2021: S3PA with CMI_2019 future improvement factors and a long-term future improvement rate of 1.25% per annum, a standard smoothing factor (7.0) and no allowance for additional improvements). This results in the following life expectancies:

38

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

Note 24b (CCFPS) cont.

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

cases:
Male Female
Active Members – Option 1 Benefits 64 634
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.

Employee Benefit Obligations

The amounts recognised in the Balance Sheet as at 30 June 2022 (with comparative figures as at 30 June 2021) are as follows:

Present value of plan liabilities
Market value of plan assets
Net defined benefit asset/(liability)		 2022
£
(5,357,246)
4,518,616
(838,630)		 2021
£
(6,932,120)
5,023,290
(1,908,830)

The amounts to be recognised in the Statement of Comprehensive Income and Expenditure for the year ending 30 June 2022 (with comparative figures for the year ending 30 June 2021) are as follows.

Current service cost
Administrative costs
Interest on net defined benefit (asset)/liability
(Gain)/Loss on plan changes
Curtailment (gain)/loss
Total		 2022
£
360,532
19,152
34,726
-
-
414,410		 2021
£
401,829
13,773
35,111
-
-
450,713

Changes in the present value of the plan liabilities for the year ending 30 June 2022 (with comparative figures for the year ending 30 June 2021) are as follows:

Present value of plan liabilities at beginning of period
Current service cost
Employee contributions
Benefits paid
Interest on plan liabilities
Actuarial (gains)/losses
(Gain)/Loss on plan changes
Curtailment (gain)/loss
Present value of plan liabilities at end of period		 2022
£
6,932,120
360,532
26,791
(137,633)
126,702
(1,951,266)
-
-
5,357,246
 2021
£
6,782,990
401,829
28,706
16,218
101,521
(399,144)
-
-
6,932,120

39

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

Note 24b (CCFPS) cont.

Changes in the fair value of the plan assets for the year ending 30 June 2022 (with comparative figures for the year ending 30 June 2021) are as follows:

Market value of plan assets at beginning of period
Contributions paid by the College
Employee contributions
Benefits paid
Administrative expenses paid
Interest on plan assets
Return on assets, less interest included in the Statement of
Comprehensive Income and Expenditure
Market value of plan assets at end of period
Actual return on plan assets		 2022
£
5,023,290
313,311
26,791
(137,633)
(22,427)
91,976
(776,692)
4,518,616
(684,716)		 2021
£
4,380,518
272,634
28,706
16,218
(18,865)
66,410
277,669
5,023,290
344,079

The major categories of plan assets for the year ending 30 June 2022 (with comparative figures for the year ending 30 June 2021) are as follows:

Equities
Bonds & Cash
Property
Total		 2022
52%
34%
14%
100%		 2021
48%
42%
10%
100%

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

Analysis of the remeasurement of the net defined benefit liability recognised in Other Comprehensive Income (OCI) for the year ending 30 June 2022 (with comparative figures for the year ending 30 June 2021) are as follows:

Return on assets, less interest included in the Statement of
Comprehensive Income and Expenditure
Expected less actual plan expenses
Experience gains and losses arising on plan liabilities
Changes in assumptions underlying the present value of plan liabilities
Remeasurement of net defined benefit liability recognised in OCI		 2022
£
(776,692)
(3,275)
(262,232)
2,213,498
1,171,299		 2021
£
277,669
(5,092)
302,410
96,734
671,721

40

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

Note 24b (CCFPS) cont.

Movement in net defined benefit asset/(liability) during the year ending 30 June 2022 (with comparative figures for the year ending 30 June 2021) are as follows:

figures for the year ending 30 June 2021) are as follows:
Net defined benefit asset/(liability) at beginning of year
Recognised in the Statement of Comprehensive Income and
Expenditure
Contributions paid by the College
Remeasurement of net defined benefit liability recognised in OCI
Net defined benefit asset/(liability) at end of year		 2022
£
(1,908,830)
(414,410)
313,311
1,171,299
(838,630)		 2021
£
(2,402,472)
(450,713)
272,634
671,721
(1,908,830)

Funding Policy

Actuarial valuations are carried out every three years on behalf of the Management Committee, acting as the Trustee of the Scheme, by a qualified independent actuary. The actuarial assumptions underlying the actuarial valuation are different to those adopted under FRS102.

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

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

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

25 Related Party Transactions

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

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

Fellows are remunerated for teaching, research and other duties within the College. Fellows are billed for any private catering. The Trustees remuneration is overseen by a Remuneration Sub-Committee of the College's Finance Committee, whose membership comprises independent external members, Fellows who are not Trustees, and the Bursar.

41

DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2022

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

From:
To:
£0
£10,000
£10,001
£20,000
£20,001
£30,000
£30,001
£40,000
£40,001
£50,000
£50,001
£60,000
£60,001
£70,000
£70,001
£80,000
£80,001
£90,000
Total		 Number of Fellows
2022
2021
6
6
-
-
-
-
-
-
1
1
1
1
-
-
-
-
1
1
9
9		 Number of Fellows
2022
2021
6
6
-
-
-
-
-
-
1
1
1
1
-
-
-
-
1
1
9
9
9

The total Trustee salaries were £196,160 for the year (2021: £187,134)

The Trustees were also paid other taxable benefits (including associated employer National Insurance contributions and employer contributions to pensions) which totalled £59,038 for the year (2021: £55,592)

26 Post Balance Sheet Event

On 13 July 2022 the College completed the purchase of a 200 year lease from the University of Cambridge of the property known as Causewayside, Cambridge, a development of 44 flats close to the main College site. The total consideration was £17,325,000, to which the major part of the cash on the balance sheet at the year-end was applied.

42