Report of the Governing Body 1-2
Responsibilities of the Governing Body 3
Report of the Independent Auditors 4
Statement of principal accounting policies 5-7
Consolidated income and expenditure account 8
Consolidated statement of total recognised gains and losses 8
Balance sheets 9
Consolidated cash flow statement 10
Notes to the financial statements 11-19
(the pages are then not numbered)
The Governing Body of Brasenose College presents the annual report and financial statements for the year ended 31 July 2003.
Status
Brasenose College is an eleemosynary chartered charitable corporation aggregate. It was founded by William Smyth, Bishop of Lincoln, and Sir Richard Sutton, Knight, under a Charter of King Henry the Eighth, dated the 15th of January in the third year of his reign. The corporation comprises the Principal and Fellows. The College is an exempt charity under s3(5a) Charities Act 1993 (as listed in Schedule 2(b) to that Act).
Objects
The College exists to provide and promote undergraduate and graduate education within the University of Oxford, and also to support University academic research. Within these objects, the College also has various permanently endowed trust funds held for their special purposes in connection with the development of College facilities and for scholarships, bursaries, prizes and other educational purposes.
Governance
The Governing Body of the College comprises the Principal and Fellows. This body is constituted and regulated in accordance with the College Statutes, which are as made from time to time by order of Her Majesty in Council in accordance with the Royal Charter of 1512, and the Universities of Oxford and Cambridge Act 1923.
The Governing Body holds to itself the responsibilities for the ongoing strategic direction of the College, for its administration and for the management of its finances and assets. It meets regularly under the chairmanship of the Principal and is advised by a range of committees which include the Finance Committee.
Scope of financial statements
The financial statements consolidate the accounts of Brasenose College and its subsidiary, Brasenose Utilities Limited. Brasenose Utilities Limited is the wholly-owned vehicle for trading activities of Brasenose College.
Review of operations and finance
The College Revenue Surplus of £387,817 (2002 £175,991) includes amounts earmarked for specific expenditure in respect of the Main College Buildings.
The College receives three main sources of income. Academic Fees and Tuition Income amounted to £l,469,359; Student accommodation, food and conference income amounted to £1,561,715; and Endowment income amounted to £1,971,790 all of which compare with the figures for 2002 and the approved budget.
Staff salaries amounted to £2,495,559, which is less than budgeted, as the starting date of the College Principal was delayed until October 2003. The other operating costs of the College include an increase in Insurance premiums. Major differences from the previous years (sic) accounts are due to the capitalisation of computer, equipment and major fabric repairs, and the depreciation of these items. The treatment of College provisions for future major expense is no longer a revenue expense.
Major fabric works during the year, include the completion of the conversion to student accommodation at 17/19 St Michael Street, Oxford, and the modernisation of the Principal lodgings. Work has begun in 2003/2004 on changes to the Bursary area, to accommodate the future appointment of a Development Officer and a Secretary.
The College investments continue to be managed by four Investment Managers and the College also has an in-house investment portfolio. The performance of these funds started to show an improvement during the second part of the year, in line with the main share Index.
Investment performance
In consequence of low and diminishing income yields in equities, the Finance Committee has been satisfied that the income received is sufficient to meet current commitments. It had decided against converting some of its accumulation holding into income holding for the immediate future. The current yield amounts to 2.71%.
Reserves
The balance on Reserves at the year end amounted to £15,296,563 (note 19). After allowing for the amounts invested in fixed assets and designated reserves for special purposes, the College general reserve was £14,914,458.
The Governing Body has reviewed the reserves of the College and has concluded that they are sufficient for the current need of the College.
Risk Management
The major risks to which the College is exposed, as identified by the Governing Body, have been reviewed and systems have been established to mitigate these risks.
Approved by the Governing Body on 14th January 2004
Prof. R. Cashmore - Principal
In accordance with the College's Statutes, the Governing Body is responsible for the administration and management of the College's affairs.
It is responsible for ensuring that there is an effective system of internal control and that accounting records are properly kept. It is required to present audited financial statements for each financial year, prepared in accordance with the Statutes of the University.
In preparing the financial statements, the Governing Body has ensured that:
The Governing Body has taken reasonable steps to:
Any system of internal financial control, however, can only provide reasonable, not absolute, assurance against material misstatement or loss.
Under the Charities Act 1993 the College is an exempt charity and the members of the Governing Body must ensure that the property and income of the College are applied only in support of purposes which are charitable in law.
We have audited the financial statements of Brasenose College for the year ended 31 July 2003 which comprise the principal accounting policies, the consolidated income and expenditure account, the consolidated statement of total recognised gains and losses, the balance sheets, the consolidated cash flow statement, and notes 1 to 28. These financial statements have been prepared under the accounting policies set out therein.
This report is made solely to the Governing Body, in accordance with the College's statutes. Our audit work has been undertaken so that we might state to the Governing Body those matters we are required to state to it 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 College's Governing Body, for our audit work, for this report, or for the opinions we have formed.
Respective resonsibilities (sic) of the Govening (sic) Body and Auditors
The Governing Body's responsibilities for preparing the Report of the Governing Body and the financial statements in accordance with the provisions of Statute XV made by the University of Oxford under the Universities of Oxford and Cambridge Act, 1923, and of Regulations for the accounts of the colleges made thereunder, are set out in the Responsibilities of the Governing Body.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and United Kingdom auditing standards.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the provisions of Statute XV made by the University of Oxford under the Universities of Oxford and Cambridge Act, 1923, and of Regulations for the accounts of the colleges made thereunder. We also report to you if, in our opinion, the Report of the Governing Body is not consistent with the financial statements, if the College has not kept proper accounting records, or if we have not received all the information and explanations we require for our audit.
We read the other information contained in the Report of the Governing Body and consider whether it is consistent with the audited financial statements. We consider the implications for our report if we become aware of any apparent misstatements, or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.
Basis of opinion
We conducted our audit in accordance with United Kingdom auditing standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Governing Body in the preparation of the financial statements, and of whether the accounting policies are appropriate to the College's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
Opinion
In our opinion:
a) the financial statements give a true and fair view of the state of affairs of the College, and of the College consolidated with its subsidiary, as at 31 July 2003 and of its consolidated surplus for the year then ended and have been properly prepared in accordance with the provisions of Statute XV made by the University of Oxford under the Universities of nOxford and Cambridge Act, 1923, and of Regulations for the accounts of colleges made thereunder, and
b) in all material respects, income received from the University of Oxford out of grants from the Further and Higher Education Funding Council for England during the year ended 31 July 2003 has been applied to the purposes for which it was received.
GRANT THORNTON
REGISTERED AUDITORS
CHARTERED ACCOUNTANTS
Oxford
30 January 2004
Basis of preparation
The financial statements have been prepared under the historical cost convention, as modified by the revaluation of endowment asset investments, and in accordance with both applicable accounting standards (up to and including Financial Reporting Standard 19) and, to the extent appropriate, the Statement of Recommended Practice on Accounting in Further and Higher Education Institutions ("the SORP").
The financial statements consolidate the accounts of the College and of its subsidiary undertaking, Brasenose Utilities Limited.
The accounts of the affiliated student bodies (Junior and Middle Common Rooms) have not been consolidated because the College does not control these activities.
Prior year comparator figures
As annual accounts have not previously been prepared on this basis, the accounts for the year ending 31 July 2004 will be the first to carry comparators for the previous year [untrue, see 2001/02 accounts, e.g. Brasenose - A.M.].
Recognition of income
Fees and other income for services provided are credited to the income and expenditure account on a receivable basis. Income from specific endowments and other restricted income is (sic) included to the extent of the relevant expenditure incurred during the year. Income receivable from investment of funds representing general endowments (the use of which is not legally restricted to a specific purpose or activity) is included in full.
General donations
Unrestricted donations and benefactions are credited to income and expenditure account on receipt. Annual fundraising expenditure is included in the income and expenditure account.
Pension costs
Contributions to the pension schemes provided for employees of the College are charged to the income and expenditure account over the period during which the College benefits from the employees' services. Variations from the regular cost are spread over the expected average remaining working lives of members of the schemes.
Tangible fixed assets
Tangible fixed assets are stated at cost and are depreciated on a straight line basis over the following periods:
Freehold buildings 50 years
Equipment 4 years
Computer Systems 4 years
Freehold land is not depreciated.
The opening figure for freehold land and buildings at historic cost has been derived by summing the figures for capitalised expenditure stated in the previous form of accounts, for the 50 years prior to 1 August 2002. The cost of major renovation projects which increase the service potential of buildings is capitalised and depreciated over applicable periods.
The opening figure for equipment at historic cost represents only those assets in the accounts of subsidiaries as at 1 August 2002. The College operates a "de minimis" limit of £5,000 for the capitalisation of expenditure on equipment but subject to that, all such expenditure is capitalised as from 1 August 2002.
Donations received to finance the acquisition of tangible fixed assets are treated as deferred capitalised capital and released to income on a straight line basis over the same period as the related asset is depreciated.
Works of art and other valuable artefacts that can be regarded as inalienable are not included in the financial statements.
Investments
Endowment asset investments are included in the balance sheet at market value. Current asset investments are stated at the lower of cost and net realisable value.
Surpluses or deficits arising on the revaluation or realisation of endowment asset investments are added to or subtracted from the funds concerned.
The College Policy is to obtain an external prfessional (sic) valuation of its properties every three years, the next valuation due in 2004.
Stocks
Stocks are stated at the lower of their cost and net realisable value. Where necessary, provision is made for obsolete, slow moving and defective stocks.
Maintenance of premises
The cost of routine corrective maintenance is charged to the income and expenditure account in the period it is incurred.
Provisions
Provisions are recognised when the College has a present legal or constructive obligation as a result of a past event, it is probable that a transfer of economic benefit will be required to settle the obligation, and a reliable estimate can be made of the obligation,
Leases
Assets acquired under finance leases are capitalised and the outstanding future lease obligations are shown in creditors. Rental costs under operating leases are charged to expenditure in equal annual amounts over the periods of the leases.
Foreign currencies
Transactions denominated in foreign currencies are recorded at the rate of exchange ruling at the dates of the transactions. Monetary assets and liablilities denominated in foreign currencies are translated into sterling at year-end rates of exchange or, where there are related forward foreign exchange contracts, at contract rates. The resultant exchange differences are included in the income and expenditure account for the year.
Taxation status
As an exempt charity within the meaning of Schedule 2 of the Charities Act 1993, the College is potentially exempt from taxation in respect of income or capital gains received within categories covered by Section 505 of the Taxes Act 1988 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, general exemption from Value Added Tax by virtue of its charitable status, although the provision of education is exempt under group 6, schedule 9, Value Added Tax
Trading activities undertaken by the College are administered through its subsidiary companies, which, as commercial organisations, are liable to Corporation Tax. Profits made by these companies are, however, transferred to the College by Gift Aid, income tax being deducted from the Gift Aid payments and recovered by the College.
College Contribution Scheme
The College is potentially liable to be assessed for Contribution under the provisions of Statute XV of the University of Oxford. The Contribution Fund is used to make grants and loans to colleges on the basis of need. Contribution is calculated annually in accordance with regulations made by Council. The College has been liable for Contributions in the past and expects to be liable in the immediate future.