DARWIN COLLEGE
CAMBRIDGE
ANNUAL REPORT AND ACCOUNTS
FOR THE YEAR ENDED 30 JUNE 2023
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **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 2023
## **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 2022-23 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 Professor C van Ruymbeke Ms C L Edmonds (from 1 October 2022) Ms S Maziliaukas (from 1 October 2022) Mr M Schneider (from 15 November 2022)
## **Principal Advisers:**
**Auditors: Bankers:** Peters, Elworthy & Moore Barclays Bank plc (Corporate Banking) Salisbury House Mortlock House Station Road Histon Cambridge CB1 2LA 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
University of Cambridge Investment Management Limited The Old Schools Trinity Lane Cambridge CB2 1TN
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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **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:
- Promoting and fostering excellence in academic education and learning through providing a community of scholarship for its graduate students.
- Creating and nurturing a vibrant and supportive research community for its Fellows, graduate students, other members, and visitors.
- Maintaining and enhancing the endowment, benefactions, buildings, grounds, and facilities of the College for the continuing benefit of current and future generations of members.
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 79 other countries from which the membership is currently drawn. Although only sixty years old, the College already numbers Nobel prize winners amongst its Fellows and alumni.
In particular, the College provides:
- Physical and technical facilities supporting its students in their individual study regimes, as well as supporting teaching activities in the wider University, and for seminars and a public lecture series of international renown;
- Pastoral, well-being, administrative, and academic support for its students through the Deanery with tutoring and mentoring provided by Fellows; and
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- Social, cultural, sporting, musical and recreational facilities, enabling students to balance fully their academic and personal lives, and develop their potential, whilst studying in Cambridge.
The College advances research by:
- Providing currently 25 research fellowships and around 50 post-doctoral research associateships to outstanding researchers in the early stages of their careers; these appointments enable them to develop and focus intensively on their post-doctoral research work, in that crucially formative period prior to their taking on teaching duties in an academic post or research leadership roles elsewhere;
- Demonstrating the value of research degrees for addressing global challenges, and their potential impact on the knowledge economy both in the UK and internationally;
- Supporting the work of all its Fellows by creating and promoting international and interdisciplinary contact both informally and in seminars and lectures;
- Fostering academic networking, and access to and involvement in cutting-edge research, particularly by providing facilities for outstanding academics from other universities all over the world to make extended stays as Visiting Fellows and Visiting Researchers;
- Inducting the next generation of academics and researchers into a research culture which is inclusive and diverse; and
- Offering access to invaluable resources for all members of the College, particularly in the provision and maintenance of a Study Centre and Library, and extensive IT facilities.
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 College Lecture Series, now in its 38th 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. The theme of the 2023 lectures series was “Isolation” which explored the concept from a variety of angles. The lectures are collated, edited and published by the College, and the volumes entitled _Blood_ (2021) and _Isolation_ (2023) appeared during the year. The College has now added a series of termly public seminars known as the Erasmus Seminars in reference to the eighteenth-century example of Erasmus Darwin as a natural philosopher unconstrained by artificial disciplinary boundaries.
The College’s pursuit of public benefit has been enhanced with the implementation of an Equity Diversity and Inclusion plan which seeks to ensure its policies and practices meet or exceed societal expectations in this area, and through the recent improvement and professionalisation of its communications function and a relaunch of its communication channels for better engagement with society more widely.
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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.
## **ACHIEVEMENTS AND PERFORMANCE**
## **Academic Results and Student Body Profile**
College members graduating in the 2022-23 academic year achieved 72 PhDs and 263 Masters-level degrees (2022: 85 and 240 respectively). 29 former students who had graduated in absentia during the COVID-19 pandemic returned to Cambridge to attend celebrations of the award of their degrees. Graduations at the end of the 2023 were affected by a marking and assessment boycott undertaken by academic staff as part of industrial action on pay and conditions. Students for whom marks were not available, and who were thus unable to proceed to graduate in the summer, were able to participate in graduation ceremonies by way of a celebration of their completion of studies. 9 College members did so.
In the 2022-23 academic year there were 788 student members of the College (for all or part of the year) (2022: 825). Of these 574 were fee-paying post-graduate students (including 35 who paid fees directly to the Judge Business School) and 214 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 512.77 (2022: 549.67). 49.13% of fee-paying students were fully funded and 3.14% 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 2022-23 year the College made a surplus on its general operational activities (before donations, grants and other gains and losses) of £44,604 (2022: deficit of £232,693). Donations of £565,101 (2022: £1,542,152) and a grant from the Colleges Fund of £184,000 (2022: £164,000) were gratefully received in the year.
The net assets of the College at 30 June 2023 were £81,818,712 (2022: £81,008,862).
The College’s restricted and endowment reserves at 30 June 2023 were £30,003,829 having increased by £135,533 in the year from £29,868,296. The restricted reserves comprise £9,989,693 of restricted
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or trust funds for defined educational purposes and £20,014,136 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 £674,317 from £51,140,566 to £51,814,883. 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 £1,082,530 (2022: £1,215,064).
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 been applied to the purchase of the 44 flats known as Causewayside on Fen Causeway, Cambridge.
## **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 College Lecture Series, and for its physical estate. Current priorities include fundraising for studentships and student hardship, research fellowships, promoting and acting on global challenges, as well as improving elements of the estate for students staff and Fellows, and increasing the stock of student accommodation close to the College site.
Over the course of the year £320,253 (2022: £1,739,114) was raised. A total of 407 (2022: 332) individual and organisational donors contributed in the year at a variety of levels. The College is immensely grateful to them for their support.
The College spent £331,989 (2022: £247,984) on fundraising and alumni relations in the year. Increased costs relate to staffing changes in the year and preparation for a forthcoming fundraising campaign. 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.
The College is registered with Fundraising Regulator and follows its Code of Fundraising Practice. The following information is provided under the Code and in line with Charity Commission guidance. The College raises money through telephone fundraising, direct mail (by post and email) and in person one-to-one meetings. The College employs a professional Director of Development to lead fundraising activity. The work of the Director and development team is overseen by an internal committee and the Director reports directly to the Master of the College. New staff and others involved with fundraising are trained on the Code as part of induction and are required to comply with the Code. There were no compliance issues or complaints about fundraising during the year. The College did not employ any ‘on behalf of’ fundraising staff or contractors during the year. The College protects vulnerable people and members of the public from undue pressure to make donations and intrusion into their privacy by:
- Training staff involved in fundraising activities about what vulnerabilities might be encountered and how to recognise them;
- Allowing potential donors (usually alumni) to opt-out in advance of any or all fundraising campaigns – through sending email and postal notifications with details of how to inform the College;
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- Maintaining contact preferences for alumni on a database and checking this when selecting people to approach to ask for donations;
- Training anyone who asks for donations how to ask and (if during a telephone fundraising call) to ask only once; and
- Not persisting with requests for meetings about fundraising when no response is consistently received after several attempts to make contact.
## **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 2.1% 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 increased year-on-year to £789,932 (2022: £651,299). 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, 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 £5,067,785, being its unrestricted reserves and long-term debt totalling £64,814,883 less the amount committed to functional assets (represented by the total of its tangible fixed assets) of £59,747,098. Free reserves provide a notional measure of resources available for general purposes which are not restricted or committed. The College seeks to ensure that its free reserves approximate or exceed one year’s expenditure at current levels. Free reserves at the year-end represented 70% of expenditure incurred during the year. Long-term debt is
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excluded from the calculation on the basis that the College will accrue sufficient additional reserves to repay the debts when due.
## **Capital Expenditure**
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 on 30 June 2022 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.
## **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. There was a particular focus during the year on the inherited maintenance backlog at Causewayside, with work carried out in relation to fire safety, electricity upgrading, removal of redundant plant, flat refurbishments, and painting and decorating.
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.
A Public Sector Decarbonisation Fund grant was awarded to the College for degasification work at the College’s Frank Young House 26 bed hostel on Wordsworth Grove and the work to replace the glazing, upgrade insulation and install air source heat pumps is underway.
The intercollegiate study to monitor the River Cam’s temperature and flow initiated by the College was completed during the year and confirmed in principle the viability of river source heat as the main replacement for gas for the College’s main site and possibly for the Newnham Road / Causewayside cluster. A Public Sector Low Carbon Skills Fund grant has been awarded to the College to enable it to commission the engineering and architectural design work required to advance this scheme.
## **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 2023, 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.
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The most recent actuarial review of the CCFPS was as at 30 June 2023. The College’s overall benefit funding liability has decreased to £824,307 (2022: £838,630).
## **Principal Risks and Uncertainties**
The main risks and uncertainties facing the College are those connected with the following matters:
- Economic factors, including the rising cost of living, which might adversely affect the affordability for students and funders of graduate study and College’s ability to provide its services to members and to maintain its sources of income, particularly endowment income, donations, fees and rents;
- The medium- and longer-term impact of the United Kingdom leaving the European Union, particularly where Brexit has affected research funding arrangements and student enrolments;
- Any re-emergence of the threat to public health represented by the COVID-19 global pandemic;
- The impact of climate change generally including the College’s need to undertake major and expensive decarbonisation work and meet its net carbon zero commitment by 2032;
- External political and economic threats to the continuing attractiveness of the University to the diverse global academic elite, whether as applicant students, post-doctoral researchers, or academics;
- Increasing societal concerns regarding student mental health and well-being where the College must ensure that its pastoral functions adapt and remain effective;
- The need to minimise reputational risk through high standards and appropriate policies in areas in which the College might be the focus of activism or media attention;
- The escalating costs of providing and maintaining buildings and accommodation which are of suitable quality and in the best locations to meet the needs of students;
- Reductions in the sources of funding for post-graduate study and changes in the relative attractiveness of study at Cambridge may affect future enrolments; and
- Local factors relating to the City of Cambridge, including a shortage of affordable housing, congestion, and deficiencies in public transport will add to the challenges of recruiting and retaining College staff and will increase operating costs.
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.
## **Plans for the future**
In 2022-23 the College began to implement the Strategic Plan for Darwin College 2022-2032, as approved by College Council and endorsed by the Governing Body in 2022. 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. To celebrate the College’s achievements and contribution to education,
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research and society more widely since its foundation in 1964, a number of in-person and on-line events are planned for College members, alumni and the general public in 2024.
## **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 2023 are indicated at Page 2.
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
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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 2023 and throughout the period to the date of approval of the financial statements.
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:
- Select suitable accounting policies and apply them consistently;
- Make judgements and estimates that are reasonable and prudent;
- State that applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- Prepare the financial statements on a 'going-concern' basis, unless inappropriate to presume that the College would continue in operation.
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 15[th] November 2023**
> **[J T Dix, Bursar ]**
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## **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 2023 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:
- give a true and fair view of the state of the College’s affairs as at 30 June 2023 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.
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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:
- 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 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:
- 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 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
13
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
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;
- 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; and
14
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
- reviewing correspondence with relevant regulators and the College’s legal advisors.
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: 2023
Peters Elworthy & Moore is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006.
15
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **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 2023 year-end up to December 2024. The College has also set a detailed budget plan for the financial year 2023-24. 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.
16
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## _Donations and endowments_
Non exchange transactions without performance related conditions are donations and endowments. Donations and endowments with donor-imposed restrictions are recognised within the Statement of Comprehensive Income and Expenditure when the College is entitled to the income. Income is retained within restricted reserves until such time that it is utilised in line with such restrictions at which point the income is released to general reserves through a reserve transfer.
Donations and endowments with restrictions are classified as restricted reserves with additional disclosure provided within the notes to the accounts.
There are four main types of donations and endowments with restrictions:
1. Restricted donations – the donor has specified that the donation must be used for a particular objective.
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 2022-23, payment of the Cambridge Bursaries to eligible students was made directly by the Student Loans Company (SLC). As a consequence, the College reimbursed the SLC for the full amount paid to their eligible students and the College subsequently received a contribution from the University of Cambridge towards this payment.
The net payment of £2,800 is shown within the Statement of Comprehensive Income and Expenditure as follows: Income (see note 1) £2,800 Expenditure £5,600
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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **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.
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DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **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.
19
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
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 2023
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.
## _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
21
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
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 2023
## **STATEMENT OF COMPREHENSIVE INCOME AND EXPENDITURE**
|**Income**
Academic fees & charges
Residences & catering
Investment Income
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**|**2023**
**Unrestricted**
**Restricted**
**Endowment**
**Total**
Note
1
2,504,087
-
-
2,504,087
2
4,138,712
-
-
4,138,712
3
685,618
217,250
-
902,868
7,328,417
217,250 - 7,545,667
396,755
168,347
565,102
-
-
-
-
184,000
-
-
184,000
-
1,106
1,106
7,909,172
386,703
-
8,295,875
4
2,455,328
310,257
-
2,765,585
5
4,110,522
-
-
4,110,522
624,956
-
-
624,956
7,190,806
310,257
-
7,501,063
718,366
76,446
-
794,812
-
-
-
-
(5,720)
(4,952)
65,145
54,473
712,646
71,494
65,145
849,285
(39,435)
-
-
(39,435)
673,211
71,494
65,145
809,850|**2022**
**Unrestricted**
**Restricted**
**Endowment**
**Total**
£
£
£
£
2,520,074
-
-
2,520,074
3,105,753
-
-
3,105,753
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|
|||2,462,417
292,013
-
2,754,430
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|
23
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **STATEMENT OF CHANGES IN RESERVES**
## **Income and Expenditure reserve**
|**Balance at 1 July 2022**
Surplus/(Deficit) from income and
expenditure statement
Other comprehensive income
Release of restricted capital funds
spent in year
**Balance at 30 June 2023**|Unrestricted
£
51,140,566
712,646
(39,435)
1,106
51,814,883|Restricted
£
5,020,128
71,494
-
(1,106)
5,090,516|Endowment
£
24,848,168
65,145
-
-
24,913,313|**Total**
£
81,008,862
849,285
(39,435)
-|
|---|---|---|---|---|
|||||81,818,712|
## **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|
24
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **BALANCE SHEET AS AT 30 JUNE 2023**
|||**2023**|**2022**|
|---|---|---|---|
||Note|**£**|**£**|
|**Fixed Assets**||||
|Tangible Assets|8|59,747,098|43,107,489|
|Investment Assets|9|35,796,023|35,934,564|
|||95,543,121|79,042,053|
|**Current Assets**||||
|Stock|10|49,561|46,045|
|Debtors|11|1,066,780|667,827|
|Cash|12|613,300|16,798,885|
|||1,729,641|17,512,757|
|**Creditors**|13|1,371,521|1,330,884|
|**Net Current Assets/(Liabilities)**||358,120|16,181,873|
|**Creditors: more than one year**|14|(13,000,000)|(13,000,000)|
|**Provisions**||||
|Pension provision|15|(1,082,530)|(1,215,064)|
|**Net Assets**||81,818,712|81,008,862|
|**Restricted Reserves**||||
|Income and expenditure reserve - endowment reserve|16|24,913,313|24,848,168|
|Income and expenditure reserve - restricted reserve|17|5,090,516|5,020,128|
|||30,003,829|29,868,296|
|**Unrestricted Reserves**||||
|Income and expenditure reserve - unrestricted||51,814,883|51,140,566|
|||51,814,883|51,140,566|
|||||
|**Total Reserves**||81,818,712|81,008,862|
These accounts were approved by the Trustees on 15[th] November 2023 and are signed on their behalf by:
……………………………………………… Dr M Rands, Master
25
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **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|**2023**
**£**
651,955
(17,232,835)
395,295
(16,185,585)
16,798,885
613,300|**2022**
**£**
1,843,584
4,754,224
395,885|
|---|---|---|
|||6,993,693
9,805,192|
|||16,798,885|
26
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **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)**|**2023**
**£**
26,432
58,100
2,382,465
37,090
2,504,087
**2023**
**£**
3,426,118
722,595
4,138,712
**2023**
**£**
95,374
789,932
17,562
902,868
**2023**
**£**
176,651
408,992
606,828
344,777
400,550
827,788
2,765,585|**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|
27
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
|**5**
**Accommodation and Catering Expenditure**
Accommodation College members
Catering College members
**Total (Note 6)**|**2023**
**£**
2,742,270
1,368,252
4,110,522|**2022**
**£**
2,183,932
1,056,338|
|---|---|---|
|||3,240,270|
## **6a Analysis of 2022/2023 expenditure by activity**
|**Analysis of 2022/2023 expenditure**|**by activity**||||
|---|---|---|---|---|
||**Staff costs**
**(note 7)**|**Other**
**operating**
**expenses**|**Depreciation**|**Total**|
||**£**|**£**|**£**|**£**|
|Education|1,233,717|1,130,736|401,132|2,765,585|
|Accommodation and catering|1,430,152|1,744,394|935,976|4,110,522|
|Other|86,345|538,611|-|
624,956|
|**Total**|2,750,214|3,413,741|1,337,108|7,501,063|
Expenditure includes fundraising costs of £331,989. This expenditure includes the costs of alumni relations.
## **6b Analysis of 2021/2022 expenditure by activity**
|Education
Accommodation and catering
Other
**Total**|**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.
|**6c**|**Auditors’ remuneration**|**2023**|**2022**|
|---|---|---|---|
|||**£**|**£**|
||Other operating expenses include:|||
||Audit fees payable to the College’s external auditors|27,396|21,978|
||Other fees payable to the College's external auditors|1,572|2,220|
28
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **7a Staff costs**
|**Staff costs**|||||
|---|---|---|---|---|
|**Staff costs:**
Salaries
National Insurance
Pension costs
Academic
Non-academic
**Total**|**Academic**
**£**
456,745
35,692
(46,071)
446,366
**2023**
**Number of**
**Fellows**
23
23|**Non-**
**Academic**
**£**
1,823,314
217,001
263,533
2,303,848
**2023**
**Full-time**
**equivalents**
56
56|**2023**
**Total**
**£**
2,280,059
252,693
217,462
2,750,214
**2022**
**Number**
**of Fellows**
26
26|**2022**
**Total**
**£**
1,963,420
149,764
714,568|
|||||2,827,752|
|||||**2022**
**Full-time**
**equivalents**
52|
|||||52|
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 23 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:
|||**2023**||**2022**||
|---|---|---|---|---|---|
|||**Total**||**Total**||
|£110,001
£120,000|-
||1||1|
|£120,001
£130,000|-
||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**|||
|---|---|---|
||**2023**|**2022**|
||**£**|**£**|
|Aggregated remuneration of key management personnel|257,147|245,237|
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 2023
## **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
Transfer to current assets
Charge for the year
Written back on disposal
At end of year
**Net book value**
At end of year
At beginning of year|**Land**
**£**
22,391,754
-
13,046,500
(175,000)
36,263,254
-
64,108
-
64,108
35,199,146
22,391,754|**College**
**Buildings**
**£**
24,565,123
1,103,719
5,203,259
(50,000)
30,822,101
5,285,066
1,051,869
(10,137)
6,326,798
24,495,303
19,280,057|**Assets**
**Under**
**Construction**
**£**
1,435,440
(1,103,719)
228,010
-
559,731
-
352,000
207,731
-
559,731
-
1,435,440|**Fixtures,**
**Fittings &**
**Equipment**
**£**
36,788
-
65,811
-
102,599
36,788
13,162
-
49,950
52,649
-|**Motor**
**Vehicles**
**£**
10,524
-
-
-
10,524
10,286
238
-
10,524
-
238|**2023**
**Total**
**£**
48,439,629
-
18,543,580
(225,000)
66,758,209
5,332,140
352,000
1,337,108
(10,137)
7,011,111
59,747,098
43,107,489|**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|
Land includes long-leasehold land purchased in the year costing £12,821,500 on a 200 year lease. The insured value of freehold buildings as at 30 June 2023 was £56,895,658 (2022: £42,997,019). Capital expenditure contracted for at the balance sheet date but not recognised in the financial statements in respect of assets under construction was £nil (2022: £207,700)
30
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
|**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|**2023**
**£**
35,934564
35,909,748
(35,479,201)
(408,792)
(160,296)
35,796,023
2,580,000
2,052,668
-
1,222,818
29,940,537
35,796,023
**2023**
**£**
49,561
**2023**
**£**
429,259
-
369,197
268,324
1,066,780
**2023**
**£**
-
618,541
(6,435)
1,194
613,300|**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|
31
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **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|**2023**
**£**
290,673
198,834
288,179
107,932
485,903
1,371,521
**2023**
**£**
13,000,000|**2022**
**£**
216,829
182,052
366,441
76,404
489,158
1,330,884
**2022**
**£**
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**
**£**
838,630
253,783
(307,541)
-
39,435
824,307|**USS**
**£**
376,434
(38,476)
(79,735)
-
-
258,223|**2023**
**Total**
**£**
1,215,064
215,307
(387,276)
-
39,435
1,082,530|**2022**
**Total**
**£**
2,055,234
720,520
(389,391)
-
(1,171,299)|
|||||1,215,064|
32
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
|**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**
**£**
4,902,697
-
(3,520)
-
4,899,177
2,834,016
1,127,332
652,618
258,476
26,735
-
4,899,177|**Unrestricted**
**permanent**
**endowments**
**£**
19,945,471
-
68,665
-
20,014,136
-
-
-
-
-
20,014,136
20,014,136|**2023**
**Total**
**£**
24,848,168
-
65,145
-
24,913,313
2,834,016
1,127,332
652,618
258,476
26,735
20,014,136
24,913,313
2,580,000
22,333,313
-
24,913,313|**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|
33
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **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**
**£**|**Permanent**
**unspent &**
**other**
**restricted**
**income**
**£**|**Restricted**
**expendable**
**endowment**
**£**
2,020,875|**Restricted**
**expendable**
**endowment**
**£**
2,020,875|**2023**
**Total**
**£**
5,020,128|**2023**
**Total**
**£**
5,020,128|**2022**
**Total**
**£**|
|---|---|---|---|---|---|---|---|
||-|2,999,253|||||5,201,055|
||-|-|-||-||-|
||1,066|167,872|474||169,453||52,667|
||-|-|-||-||-|
||-|173,175|44,075||217,250||245,476|
||-|(3,310)|(1,642)||(4,952)||(185,991)|
||-|(255,062)|(55,195)||(310,257)||(292,013)|
||(1,066)|-|-||(1,106)||(1,066)|
||-|-|-||-||-|
||-|3,081,928|2,008,588||5,090,516||5,020,128|
||-
-
-
-
-
-
-|1,274,035
1,205,154
535,081
51,192
16,466
-
3,081,928|32,021
1,976,567
-
-
-
-
2,008,588||1,306,056
3,181,721
535,081
51,192
16,466
-
5,090,516
-
4,467,883
622,633
5,090,516||1,309,137
3,121,498
535,118
34,344
20,030
-|
||||||||5,020,128|
||||||||-
4,471,092
549,036|
||||||||5,020,128|
34
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **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**|**2023**
**£**
809,850
1,337,108
-
(54,473)
(3,516)
(398,952)
40,635
(132,534)
(902,868)
(395,295)
-
651,955
**2023**
**£**
36,157,329
902,868
(35,909,748)
160,296
(18,543,580)
(17,232,835)
**2023**
**£**
395,295
-
-
395,295|**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|
35
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **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 2022**
**£**
16,798,885
-
13,000,000
3,798,885|**Cash flows**
**£**
(16,185,585)
-
-
(16,185,585)|**At 30 June 2023**
**£**
613,300
-
13,000,000|
|---|---|---|---|
||||(12,386,700)|
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**|||
|---|---|---|
||**2023**|**2022**|
||**£**|**£**|
|**Financial Assets**|||
|_Financial assets at fair value through Statement of Comprehensive income_|||
|Listed equity investments|31,983,202|31,961,450|
|_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|613,300|16,798,885|
|Cash in hand at investment managers|1,222,818|1,383,114|
|Other debtors|714,780|667,827|
|**Financial Liabilities**|||
|_Financial liabilities measured at amortised cost_|||
|Loans|13,000,000|13,000,000|
|Trade creditors|290,673|216,829|
|Other creditors|1,080,848|1,114,055|
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**|||
|---|---|---|
||**2023**|**2022**|
|At 30 June 2023 the College had annual commitments under non-cancellable
operating leases as follows:|**£**|**£**|
|Land and buildings:|||
|Expiring within one year|185,207|179,813|
|Expiring between two and five years|589,632|774,840|
|Expiring in over five years|-|-|
36
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **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 2023 was £277,303 (2022: £281,202).
## **24a** _**Universities' Superannuation Scheme**_
The total cost charged to the profit and loss account is £79,735 (2022: £76,080).
Deficit recovery contributions due within one year for the institution are £42,472 (2022: £47,798).
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 2023
## _**Note 24a (USS) cont.**_
The current life expectancies on retirement at age 65 are:
||**2023**|**2022**|
|---|---|---|
|Males currently aged 65 (years)|24.0|23.9|
|Females currently aged 65 (years)|25.6|25.5|
|Males currently aged 45 (years)|26.0|25.9|
|Females currently aged 45 (years)|27.4|27.3|
A new deficit recovery plan was put in place as part of the 2020 valuation, which requires payment of 6.2% of salaries over the period 1 April 2022 to 31 March 2024, at which point the rate will increase to 6.3%. The 2023 deficit recovery liability reflects this plan. The liability figures have been produced using the following assumptions:
||**2023**|**2022**|
|---|---|---|
|Discount rate|5.52%|3.31%|
|Pensionable salary growth|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 2023, for the purposes of FRS102 using a valuation system designed for the Management Committee, acting as Trustee of the Cambridge Colleges’ Federated Pension Scheme, but allowing for the different assumptions required under FRS102 and taking fully into consideration changes in the plan benefit structure and membership since that date.
The principal actuarial assumptions at the balance sheet date were as follows:
||**2023**|**2022**|
|---|---|---|
||**% p.a.**|**% p.a.**|
|Discount rate|5.20|3.80|
|Increase in salaries|3.30|3.24|
|RPI assumption|3.40|3.45|
|CPI assumption|2.80|2.75|
|Pension increases in payment (RPI Max 5% p.a.)|3.30|3.30|
|Pension Increases in payment (CPI Max 2.5% p.a.)|2.05|2.05|
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 (2022: 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:
- Male age 65 now has a life expectancy of 21.4 years (previously 21.9 years).
- Female age 65 now has a life expectancy of 23.9 years (previously 24.3 years).
- Male age 45 now and retiring in 20 years has a life expectancy of 22.6 years (previously 23.2 years).
- Female age 45 now and retiring in 20 years has a life expectancy of 25.3 years (previously 25.7 years).
38
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## _**Note 24b (CCFPS) cont.**_
|Members are assumed to retire at their normal retirement age (65) apart from in the following indicated|Members are assumed to retire at their normal retirement age (65) apart from in the following indicated|Members are assumed to retire at their normal retirement age (65) apart from in the following indicated|
|---|---|---|
|cases:|||
||**Male**|**Female**|
|Active Members – Option 1 Benefits|64|64|
|Deferred Members – Option 1 Benefits|63|62|
Allowance has been made at retirement for non-retired members to commute part of their pension for a lump sum on the basis of the current commutation factors in these calculations.
## **Employee Benefit Obligations**
The amounts recognised in the Balance Sheet as at 30 June 2023 (with comparative figures as at 30 June 2022) are as follows:
|Present value of plan liabilities
Market value of plan assets
**Net defined benefit asset/(liability)**|**2023**
**£**
(4,809,499)
3,985,192
(824,307)|**2022**
**£**
(5,357,246)
4,518,616|
|---|---|---|
|||(838,630)|
The amounts to be recognised in the Statement of Comprehensive Income and Expenditure for the year ending 30 June 2023 (with comparative figures for the year ending 30 June 2022) are as follows.
|Current service cost
Administrative costs
Interest on net defined benefit (asset)/liability
(Gain)/Loss on plan changes
Curtailment (gain)/loss
**Total**|**2023**
**£**
201,958
19,152
32,673
-
-
253,783|**2022**
**£**
360,532
19,152
34,726
-
-|
|---|---|---|
|||414,410|
Changes in the present value of the plan liabilities for the year ending 30 June 2023 (with comparative figures for the year ending 30 June 2022) are as follows:
|**Present value of plan liabilities at beginning of period**
Current service cost
Employee contributions
Benefits paid
Interest on plan liabilities
Actuarial (gains)/losses
(Gain)/Loss on plan changes
Curtailment (gain)/loss
**Present value of plan liabilities at end of period**|**2023**
**£**
5,357,246
201,958
21,872
(261,993)
202,866
(712,450)
-
-
4,809,499
|**2022**
**£**
6,932,120
360,532
26,791
(137,633)
126,702
(1,951,266)
-
-|
|---|---|---|
|||5,357,246|
39
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## _**Note 24b (CCFPS) cont.**_
Changes in the fair value of the plan assets for the year ending 30 June 2023 (with comparative figures for the year ending 30 June 2022) are as follows:
|**Market value of plan assets at beginning of period**
Contributions paid by the College
Employee contributions
Benefits paid
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|**2023**
**£**
4,518,616
307,541
21,872
(261,993)
(25,013)
170,193
(746,024)
3,985,192
(575,831)|**2022**
**£**
5,023,290
313,311
26,791
(137,633)
(22,427)
91,976
(776,692)|
|---|---|---|
|||4,518,616|
|||(684,716)|
The major categories of plan assets for the year ending 30 June 2023 (with comparative figures for the year ending 30 June 2022) are as follows:
|Equities
Bonds & Cash
Property
**Total**|**2023**
49%
38%
13%
100%|**2022**
52%
34%
14%|
|---|---|---|
|||100%|
The plan has no investments in property occupied by, assets used by or financial instruments issued by the College.
Analysis of the remeasurement of the net defined benefit liability recognised in Other Comprehensive Income (OCI) for the year ending 30 June 2023 (with comparative figures for the year ending 30 June 2022) are as follows:
|Return on assets, less interest included in 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**|**2023**
**£**
(746,024)
(5,861)
(521,444)
1,233,894
(39,435)|**2022**
**£**
(776,692)
(3,275)
(262,232)
2,213,498|
|---|---|---|
|||1,171,299|
40
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## _**Note 24b (CCFPS) cont.**_
Movement in net defined benefit asset/(liability) during the year ending 30 June 2023 (with comparative figures for the year ending 30 June 2022) are as follows:
|figures for the year ending 30 June 2022) 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**|**2023**
**£**
(838,630)
(253,783)
307,541
(39,435)
(824,307)|**2022**
**£**
(1,908,830)
(414,410)
313,311
1,171,299|
|||(838,630)|
## Funding Policy
Actuarial valuations are carried out every three years on behalf of the Management Committee, acting as the Trustee of the Scheme, by a qualified independent actuary. The actuarial assumptions underlying the actuarial valuation are different to those adopted under FRS102.
The last such actuarial valuation was as at 31 March 2020. This showed that the plan’s assets were insufficient to cover the liabilities on the funding basis. A Recovery Plan has been agreed with the College, which commits the College to paying contributions to fund the shortfall.
These deficit reduction contributions are incorporated into the plan’s Schedule of Contributions dated 21 May 2021 and are as follows:
- Annual contributions of not less than £64,837 per annum payable for the period from 1 July 2021 to 31 March 2030.
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 2023
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**
**2023**
**2022**
6
6
-
-
-
-
-
-
1
1
1
1
-
-
-
-
1
1
9
9|**Number of Fellows**
**2023**
**2022**
6
6
-
-
-
-
-
-
1
1
1
1
-
-
-
-
1
1
9
9|
|---|---|---|
|||9|
The total Trustee salaries were £212,381 for the year (2022: £196,160)
The Trustees were also paid other taxable benefits (including associated employer National Insurance contributions and employer contributions to pensions) which totalled £63,742 for the year (2022: £59,038)
42
DARWIN COLLEGE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED 30 JUNE 2023
## **27 Supplemental Schedule as required by US Department for Education**
43