Oxford college accounts 2002/3
Digest of governing body reports etc.

This year, preceding its set of spreadsheets, each college account includes a Report of the Governing Body, a list of the Responsibilities of the Governing Body (identical for all colleges, omitted by Corpus, Lady Margaret Hall), an Independent Auditors' Report (identical for all colleges, auditors listed below), and a Statement of Principal Accounting Policies (similar for all colleges). A few colleges include an index and a few include further information (bankers, fellows, so forth). The order, format and typography varies from college to college, sometimes wildly. Several colleges' GB reports are one-page, University's is spread over five. New and University Colleges are notably barmy on detail, others are notably scant. As a sample, Akme has scanned into html the above items of a typical college, Brasenose, to serve as a model (click for Brasenose Report etc.).

For each college, the Report of the Governing Body is divided into a number of subheadings: Status, Objects, Governance, Scope of financial statements, Review of operations and finance, Investment performance, Reserves, Risk Management. Under Status, every college states that it is "an exempt charity under s3(5a) Charities Act 1993 (as listed in Schedule 2(b) to that Act)".

The following colleges further describe themselves as "eleemosynary chartered charitable corporation aggregates": Brasenose, Exeter, Harris Manchester, Hertford, Jesus, Lady Margaret Hall, Lincoln, Mansfield, New College, Oriel, The Queen's, St Catherine's, St Edmund Hall, St Hilda's, St John's, St Peter's, Templeton, Wadham and Worcester. Corpus Christi is "a chartered charitable corporative aggregate". Christ Church is "a joint foundation - of a college in the University of Oxford and of the Cathedral Church of the Diocese of Oxford - supported by a single corporate endowment". Nuffield, St Antony's, Wolfson and University College are "chartered charitable corporations". Pembroke is "an independent self-governing charitable institution". Somerville is "an (sic) tax exempt higher educational institution governed by a Charter and Statutes". Trinity is "an eleemosynary chartered corporation". Merton is merely "a charitable corporation", while the rest (Balliol, Linacre, Magdalen, Keble, St Anne's and St Hugh's) make no further such claims.

Under Scope of financial statements, the following colleges state that they wholly own subsidiary trading companies, whose accounts are consolidated with the college's: All Souls (The Chichele Property Co. Ltd.); Balliol (Balliol College Developments Ltd.); Brasenose (Brasenose Utilities Ltd.); Exter (Collexonco Ltd. and Collexoncotoo Ltd.); Jesus (Jesus Accommodation Ltd.); Keble (Conference Keble Ltd.); Lady Margaret Hall (LMH Conference Services Ltd. and LMH Properties Ltd.); Lincoln (Lincoln College Enterprises Ltd.); Magdalen (Magdalen Development Co. Ltd., Magdalen College Law Tutorship Co. Ltd. and The Fleet Tutorship Co. Ltd.); Merton (Merton Enterprises Ltd.); Nuffield (Nuffield Properties Ltd.); Oriel (Land Estates & Property Ltd. and Tean Ltd.); St Anne's (St Anne's College Services Co. Ltd.); St Antony's (St Antony's Trading Ltd.); St Catherine's (St Catherine's College Management Ltd. and St Catherine's College Development Ltd.); St Hilda's (The Jacqueline du Pre Music Building Ltd. and St Hilda's Properties Ltd.); St John's (The Lamb & Flag (Oxford) Ltd.); St Peter's (Crossed Keys Ltd.); Templeton (Templeton (Oxford) Ltd.); University (Fleximist Ltd. and Micklehall Ltd.); Wadham (Wadham Energy Supplies Ltd.); and Wolfson (Wolfson College Developments Ltd.).

Most of the Responsibilities of the Governing Body sections end with this paragraph:

"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."

In the Accounting Policies section, the following paragraphs (or similar) recur under the subheading Taxation Status:

As an exempt charity within the meaning of Schedule 2 of the Charities Act 1993, the College is potentially [Akme's italics] 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.

The following auditors are used: Grant Thornton, Oxford (All Souls, Brasenose, Christ Church, Corpus Christi, Keble, LMH, Oriel, Pembroke, St Anne's, St Hugh's, St Peter's, University); Critchleys, Oxford (Jesus, Linacre, Lincoln, Magdalen, Mansfield, Merton, New, Nuffield, The Queen's, Templeton, Trinity); Wenn Townsend, Oxford (St Hilda's); Wellers, Oxford (wolfson); Edmund Hill, Oxford (Harris Manchester); Pricewaterhouse Coppers, Reading (Balliol); Deloitte & Touche, Reading (St Catherine's); Horwath Clark Whitehill, London (Exeter, Hertford, St Edmund Hall, Somerville); Everett & Son, London (St Antony's, Worcester); Ernst & Young, Southampton (St John's); RSM Robson Rhodes, Hemel Hempstead (Wadham).

The colleges' core financial bulletins are contained in the Governing Body report sections Scope of financial statements, Review of operations and finance, Investment Performance and Reserves. Akme has scanned these four sections college-by-college, together with each college's summary Statement of Recognised Gains and Losses, and collated them below into a single file, indexed above. For the reports' full details and the spreadsheets themselves, go to the colleges' 2003 accounts in PDF format.

All Souls College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of All Souls College and its sole subsidiary undertaking, the Chichele Property Company Limited. The latter owns property in Stanton Harcourt, Oxford, the income from which is used exclusively for charitable purposes. The Chichele Property Company represents the only factor which distinguishes 'College' and 'Consolidated' figures in the financial statements.

Review of operations and finance
All Souls College is unusual in that virtually all of its income is derived from its endowment. The College has no students, and therefore attracts no income, either from government or private bodies associated with the provision of teaching for graduate or undergraduate students. It does not actively engage in fund-raising, nor does it provide conferencing facilities for outside bodies.
The Estates & Finance Committee, with assistance from its Investment and Property Sub-Committees, oversees the management of the endowment and the finances of the College. It meets once a term, and reviews an investment report and management accounts prepared by the Bursar and Accountant. The endowment is managed on a "total return" basis, and the College is indifferent to whether gains are achieved through capital growth or income. College expenditure is budgeted according to a programme of sustainable spending, derived from a formula based on the size of the College's endowment over a number of years.
The College maintains cash balances sufficient to enable it to operate flexibly at any point in time. It has undertaken one major project involving capital expenditure in the past five years, namely the renovation of the Codrington Library between 2001 and 2002, at a cost of nearly £3 million. It plans in the next fiscal year to replace four flats sold in January 2003 with four new flats to house its Visiting Fellows, for a total cost of approximately £1.7 million. Such capital expenditure is depreciated over a 20-year period.
The majority of the College's buildings are Grade I listed buildings dating from the 15th and 18th Centuries. The Warden and Fellows take their collective responsibility for the preservation and sensitive maintenance of these buildings extremely seriously. In past years, the College, in addition to insuring its buildings, has deemed it prudent to build and maintain reserves equal to at least 5% (approximately £2.2 million) of the insured value of its buildings. Under the new form of accounts introduced this year, such provisioning is no longer possible.
Expenditure of the College is divided into six main categories. In the most recent fiscal year it paid an amount equal to 12% of its total income to outside advisors for the management of its endowment (both for its securities and property portfolios). Its largest category of expenditure was for academic purposes, which comprised 48% of its net income after endowment expenses. Administration, which is responsible for both academic and endowment-related expenditure, was 7% of net income. Residences and catering accounted for 18%, and premises 20%, of net income. The final major area of expenditure for the College, and one not within its control, is the levy payable under the University's College Contribution Scheme. For the previous fiscal year, this was calculated at 7.4% of College expenditure (an amount that is being contested by the College).

Investment Performance
The endowment of the College was valued at £129,660,000 at 31st July 2003, and was invested as follows: UK-listed equities 21%, international equities 15%, private equity 3%, absolute return investments 7%, bonds 9%, cash 1% and a diversified property portfolio 44%. The College maintains an investment strategy committed to diversification, both in terms of asset classes and geographic spread, along with a relatively low risk profile, due to the importance it places on the preservation of capital. It seeks to achieve the highest total return in any asset class commensurate with the risk profile of such asset.

Balliol College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of the Financial Statements
The Financial Statements consolidate the accounts of Balliol College and its subsidiary undertakings, ie the Appeal Trustees' Funds and Balliol College Developments Ltd. Balliol College Developments Ltd is the wholly-owned vehicle for the building activities of Balliol College. The Appeal Trustees' Funds are an exempt UK charity engaged in raising and providing funds for educational and related facilities at Balliol College.

Review of Operations and Finance
The College ran a substantial deficit during the year, due to a combination of factors. The steady decline in real terms of the undergraduate capitation fee has become increasingly damaging, as has the College's diminishing ability to reclaim Advance Corporation Tax on its UK equity income. The large fall in the stockmarket has reduced the amount of money that can prudently be drawn from the endowment. Furthermore, staff costs (both academic staff and support staff) have continued to outpace the Retail Price Index, due - in part - to the increase in National Insurance Contributions and the further rise of the employer's contribution to the Oxford University Staff Pension Scheme. The Oxford tutorial system - with all its many advantages - is of course costly. This, combined with the expense of maintaining listed buildings, puts a financial burden on colleges like Balliol that other Higher Education establishments do not bear. To counter these adverse trends, the College has agreed to put in place a substantial rise in room rents for Freshers with effect from October 2004. Such a rise will ensure that rental income covers a much greater proportion of the cost of provision, so allowing more of the endowment income to be used for academic purposes and the provision of scholarships and bursaries. This change, together with a number of economy measures, is designed to bring the College's budget back into balance over the next four years.
As far as capital spending is concerned, the College decided in December 2002 to build two more student accommodation blocks at Jowett Walk to ensure that more undergraduates can be offered a room in College for each of their years at Balliol. The project is currently underway, and is designed to be self-financing over 25 years; the Accounts reflect those arrangements.

Investment Performance
The College has adopted a total return policy for investment income, by drawing 4% pa from the endowment, based on its value at the end of each financial year. On this basis the contribution from College capital was £90k during the year, with an additional £100k being provided by the Fairfax Fund Trustees to compensate for their underfunding of Fellowships in previous years.
As the Accounts demonstrate, the greater part of the endowment is invested in the stockmarket; some 10% is held in a Property Fund; and a similar amount is held in cash. During the period between the beginning of their mandate in 2000 and 31st December 2002, our Investment Managers (Deutsche Asset Management) underperformed the benchmark by 1.3%, but during the first of three months of 2003, dicy outperformed the revised (equity only) benchmark by 0.6%. The College's investment in the Charities Property Fund (a Collective Investment Fund approved by the Charity Commission) has not only provided an excellent income (with a yield of almost 6%), but has also provided capital gain of some 2.6% on each the units of investnent. Most of the College's cash is held in the University Deposit Pool, where the College has received an excellent return of almost 4.5% over the year.

Reserves
The balance on consolidated reserves at the end of the year amounted to £15,266,453 (College £12,259,413). After allowing for the amounts invested in or committed to tangible fixed assets and the designated reserves for special purposes, the consolidated and the College's general reserve was £435,831. The governing body has reviewed the reserves of the College and has concluded that a general reserve of some £500,000 should be maintained to allow the College to be managed efficiently and to provide a buffer for uninterrupted services. This equates to approximately one month's expenditure. In addition, the College maintains a designated reserve of over £1.6 million for repairs, maintenance and housing.

Brasenose College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of the 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.

Christ Church 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
Christ Church is required to produce accounts annually in compliance with Statute XV of the University of Oxford. The financial statements consolidate the accounts of the constituent parts of Christ Church: the College, the Cathedral, Christ Church Cathedral School and Christ Church Library Services Limited. Christ Church Library Services Limited was dormant in the period covered by this report.
These financial statements are the first produced by Christ Church in compliance with the recently revised Statute XV of the University of Oxford. Accordingly, comparative figures for the year ended 31 July, 2002 are not available in this format and the opening balance sheets as at 1 August, 2002 have not been re-stated from the format of accounts previously used.

Review of operations and finance
The consolidated surplus for the year was £1,094,456, which will go toward reducing the deficit on general reserve. This surplus includes an exceptional gain of £344,264 on the realisation of a long-standing corporate holding of Gilt-edged stocks.
The severe deterioration in equity market values experienced in 2002 - accelerating the declines of the last three years - was of increasing concern as the largest part of Christ Church's income comes from its endowments. While an average of historic market values is used to determine spending from the endowment, and this has the effect of smoothing short-term fluctuations, a prolonged and significant fall in values of the kind which has now occurred puts pressure on finances.
Large sums of money need to be spent on maintaining and improving facilities. The development Campaign for Christ Church aims to contribute to this, as well as to secure funding for the long-term for academic posts critical to the continuation of the tutorial system.

Investment Performance
The market value of the endowment grew from £163.6 million to £173.4 million during the year, of which £2 million is attributable to new contributions. The gross total return achieved, before spending, was 9.0 per cent., which compares with the total return from the FT All-Share index Of 3.4 per cent., and reflects the large exposure of the endowment portfolio to investment in property.
The endowment is invested for the long term and it would be misleading to focus on one year's performance, particularly as much ground still has to be made up to begin to repair falls in value incurred in the last three years, in both nominal and real terms.

Reserves
The total amount of designated and general reserves at the year end amounted to £281,810. After allowing for the amount of designated reserves for special purposes, Christ Church has a deficit on general reserve Of £2,272,125. The policy of the Governing Body is to pre-fund expenditure programmes within designated reserves and to establish a general reserve to cover a reasonable level of contingency, budget variances and working capital for operations. The target level for the general reserve is one-third of the higher of projected gross income or expenditure for the next financial year. It is hoped to eliminate the current deficit and establish the targeted reserve by achieving a surplus over a number of years.

Corpus Christi College 2002 a/c html , 2003 a/c pdf, Fellows list

Review of operations and finance
Total income for the year amounted to £4.2m, £1m of this being received from academic fees and tuition, £1.3m from accommodation and catering charges, and £1.9m coming from endowment and investment returns. Expenditure for the year amounted to f4m, leaving a net surplus of £200k. This amount has been transferred to the designated reserve for the maintenance of College buildings.

Investment policy
The College operates an investment policy that provides adequate levels of income whilst preserving capital. The portfolio is spread over most asset categories and is low to medium risk. Regular review is taken of the performance of fund managers.

Reserves
The balance on reserves at the year end amounted to £4m (note 14). After allowing for the amounts invested in fixed assets and designated reserves for special purposes, the College's general reserve was £1,497k. The Governing Body has reviewed the reserves of the College and has concluded that they are adequate at this time.

Exeter College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of Financial Statements
The financial statements consolidate the accounts of Exeter College and its subsidiary undertakings, Collexonco Ltd and Collexoncotoo Ltd. These are wholly-owned vehicles for trading activities of Exeter College.

Review of operations and finance
The College showed a surplus for the year of approximately £200k; but the greater part of this, £180k, results from donations credited to the income for the year. The College plans over the next three years to make significant improvements to its functional property, particularly in catering facilities and student hostels. This will be funded in part by the sale of functional properties which have been identified as surplus to current requirements.

Investment Performance
The College has reviewed its investment policy, and agreed to move to a total return policy for investment income as soon as the necessary change in Statutes has been obtained. During the year, having taken professional external advice, the College has completely restructured its investment portfolio so as to obtain a better return on its assets.

Reserves
The balance on reserves at the year end amounted to £5.9 million (note 19). After allowing for the amounts invested in fixed assets and designated reserves for special purposes, the College's general reserve was £1.15 million. The Governing Body has reviewed the reserves of the College and has concluded that a general reserve of £2.0 million should be maintained to allow the College to be managed efficiently and to provide a buffer for uninterrupted services. This equates to approximately six months of expenditure. The College expects to achieve the required balance on the general reserve (as defined above) over the short to medium term, partly through the sale of surplus functional properties and party through the inflow of new funds.

Harris Manchester College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The College has no subsidiary or associated undertakings.

Review of operations and finance
The College ended the year with an operating deficit of £23K compared with a surplus of over £30K in 2002. The total income for the year was £l.2m of which £455k was from College fees (2002: £355k), the increase in which was largely the result of increased student numbers. Income from accommodation was £246k, conferences £206k and donations £203k. The increase in salary costs is a result in part of the loss of sponsorship of one teaching fellow and by the decision of the Governing Body to bring all academic and related salaries in to line with the University scales. The only addition to investments in the year has been a £33k grant from the College Contribution Fund. There has been no major capital expenditure in the year. The College policy is that capital projects are only undertaken when funds are given specifically for the purpose. A provision of £50k is set aside each year for general property maintenance. There are no mortgages on any of the properties which includes a 50% interest in a house outside the curtilage of the College.

Investment Performance
In consequence of low and diminishing income yields on equities, the Investment Committee is now pursuing a total return policy for investment income. The main endowment fund rose in value by 9.3% in the year.

Reserves
The balance on reserves at the year end amounted to £(0.1)m (note 19). After allowing for the amounts invested in fixed assets and designated reserves for special purposes, the College's general reserve was £(145)k. The Governing Body has reviewed the reserves of the College and has concluded that a general reserve of £400k should be maintained to allow the College to be managed efficiently and to provide a buffer for uninterrupted services. This equates to approximately 4 months of expenditure. Current forecasts indicate that the required balance on the general reserve will be achieved by the year 2007/8.

Hertford College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements comprise the accounts of Hertford College. There are no active subsidiary companies or undertakings.

Review of operations and finance
The major sources of income for the College are: endowment income; fees and charges to members; accommodation and catering charges; conference income and donations. As in previous years the College is heavily dependent upon its external conference income and student programmes. There were no significant variations in income for the year. During the financial year, the College purchased an additional property to house a member of College at a cost of £295,000. This is being depreciated over 10 years.

Investment Performance
Over the year 2002-3, the College made an overall return (capital gain plus income) of 8.4% on its non-cash invested funds, which was satisfactory, given that the comparator FTSE 100 index declined 2.1 % and at the year end yielded only 3.9%. Over each of the last three years the College has done better than this comparator, and has had the benefit of keeping a substantial cash reserve at a time of declining markets. The College faces the difficulties of low return, in historical terms, on its cash, the loss of its ability to claim back the tax on dividend income and reduced dividends by several companies.

Reserves
General reserves at the year end amounted to £9,403,744 of which £9,395,376 was needed as a fixed asset reserve, leaving the College with free general reserves of £8,368. In future years the College intends to increase free reserves to a level which will allow the College to be managed efficiently and to provide a buffer for uninterrupted services.

Jesus College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of Jesus College and its subsidiary undertaking, Jesus Accommodation Ltd.

Review of operations and finance
During the course of 2002/3, the College sold or agreed to sell a number of pieces of endowment or residential property. These sales have released capital to fund replacement student accommodation and certain money investments.
As regards expenditure, particular reference is made to capital expenditure on one of its farms and the undertaking of substantial refurbishment of three of its staircases.
As regards income, an overall increase of about 5.7% was very largely a function of 2002/3 being the first full year in which rent has been payable on commercial properties purchased in January 2002. In any event, the income on those particular properties is very largely offset by the interest payments on the sum borrowed to enable them to be purchased.

Investment Performance
The College pays continuing attention to investment performance, with a view to achieving maximum overall return.
Overall, the capital value of the College's investments increased by 4.4%. The income yield, from that capital was 3.97%.

Reserves
The Governing Body seeks to keep its Reserves at a reasonable level, given its predicted future commitments. It makes provisions out of Reserves for various purposes.

Keble College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of Keble College and its subsidiary undertaking, Conference Keble Limited. Conference Keble Limited is the wholly-owned vehicle for the conference activities of Keble College.

Review of operations and finance
The surplus for the year of £l,449k includes grants and donations of £l,116k and a surplus on the sale of a house of £252k. Net of these, the operating surplus was £81k. Academic income, including Visiting Student fees, broadly matched the operating costs of academic provision (including administration but excluding premises costs). Residential income from College members fell short of related operating costs by approximately £200k. This shortfall, and the costs of maintaining the curtilage buildings and outside properties, was covered by investment income and the surplus on conference activities.
Two major projects, the Sloane Robinson Building and the refurbishment of the Hayward and De Breyne Quads, were completed during the year. The former, costing £6,773k, is being funded largely from donations from Old Members and others; the latter, costing £1,252k, from College resources.

Investment Performance
The College manages its Endowment assets and other investments for total return. It invests chiefly in sterling cash deposits and UK equities (through a tracker fund). Interest receivable, investment income and revaluation gains amounted in aggregate to £736k.

Reserves
The balance on reserves at the year end amounted to £18,180k. After allowing for the amounts invested in fixed assets, the College's general reserve was £6,997k.

Lady Margaret Hall 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of the College and its subsidiary undertakings, LMH Conference Services Limited and Lady Margaret Hall Properties Limited. LMH Conference Services Limited is the wholly owned vehicle for trading activities of the College, and Lady Margaret Hall Properties Limited is a wholly-owned vehicle for managing the letting of rooms in the College's properties.

Review of operations and finance
The accounts for the year - the first prepared under new regulations, derived from the Higher Education Statement of Recommended Practice, rather than "Franks" format - show a surplus of £195,174 (4.2% of turnover). The Governing Body consider this to be disappointing, because such surpluses and accumulated endowment income are the only source of funds (other than specific donations and grants) for refurbishment and expansion of the College's capital stock of freehold buildings and equipment. The target minimum annual surplus is £250,000.
During the year, new endowments of £639,394 were received and £74,389 of endowment income was retained (out of total endowment income of £679,882).
The major part of additions to tangible fixed assets (freehold land and buildings £407,879) represents improvements to the Toynbee building.
In October 2003 HM Customs and Excise conceded a repayment claim in respect of Value Added Tax overpaid for prior years, following a Court decision. The net effect, after costs, is a one-off receipt of approximately £107,000, which has been included in opening and closing prepayments and accrued income and general reserves.

Investment policy and performance
The Investment Committee pursues a risk-averse investment policy, which is designed to preserve or increase the real value of the endowment over the long term while generating an income yield of 3 to 4%. The endowment funds are currently chiefly held in pooled vehicles, with a total return policy for assessing investment performance.
Over the year, the fund achieved a total return of 5.45% relative to its benchmark of 5.13%. The corresponding three year figures are -6.07% and -6.19% and the five year figures 0.43% and 0.37%. The long-term strategic benchmark comprises 56% UK quoted equities, 19% overseas quoted equities, 20% bonds and 5% cash (although for short term tactical reasons it was decided from December 2001 to hold a minimum of 10% in cash).

Reserves
The balance on reserves at the year end amounted to £4.3m (note 17). After allowing for the amounts invested in fixed assets and designated reserves for special purposes, the College's general reserves amounted to £l.3m. The Governing Body has reviewed the reserves of the College and has concluded that a general reserve of at least £2.5m should be maintained to allow the College to be managed efficiently and to provide a buffer for uninterrupted services. This equates to a little over six months of expenditure.

Linacre College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements comprise the accounts of Linacre College. The College has no subsidiary companies

Review of operations and finance
The College launched its 40th Anniversary Campaign in October 2002. Donations received in the financial year totalled £290k which included £76k for Student accommodation and £149k for unrestricted purposes, the latter being reflected in the surplus for the year. Major capital expenditure continued on the renovation of 201 Iffley Road - Holloway House - which was ready for occupation by students in Michaelmas term 2002. The College expects to co-operate with the University in the growth of the number of graduate students and has a policy of increasing the amount of student accommodation available.

Investment Performance
Following a disappointing period for stockmarkets since September 2001, the value of the portfolio began to pick up in the latter part of the year. Cash balances invested in the University Deposit Pool earned a good interest rate.

Reserves
The balance on reserves at the year end amounted to £l.9m. After allowing for the amounts invested in fixed assets and designated reserves for special purposes, the College's General Reserve was £83k. The Governing Body is looking at ways to increase this reserve by increasing income and reducing expenditure. Provision for long term maintenance is separately provided for under Designated Reserves.

Lincoln College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of Lincoln College, its subsidiary undertaking Lincoln College Enterprises Limited and The Lincoln College Michael Zilkha Fund (registered charity no 1095113).

Review of operations and finance
The College managed its operations so as to produce a financial surplus in the year 2002-2003 of £344,982. This represented an improvement from the previous year. In 2002-2003 the College derived higher revenues from student fees, particularly graduate students; and expenditure on repairs and maintenance was reduced as a long-standing programme of repairs and refurbishment began to be scaled down. Also during 2002-03 additional provision was made for a liability to the Lincoln College Staff Pension Scheme,
The College's net asset position showed an improvement over the previous year. This was a consequence of the sale of two properties, one a farm and one a separate farm house, at prices substantially in excess of the yield-based valuations previously applied to them. In addition the College underwent a triennial valuation of its property holdings: although indexed adjustments to property valuations had been made in the intervening years since the previous revaluation, the latest exercise did result in an uplift in the value of some of the College's commercial property assets, particularly in central Oxford.
In November 2001 the College commenced implementation of a Strategic Plan designed to ensure that the College achieves its academic aims in the future. The financial implications of the Strategic Plan are dealt with in a Resources Strategy, the centrepiece of which is the aim of rebuilding of the College's pool of endowment assets following a period in which those assets suffered some relative erosion. In addition the Resources Strategy calls both for a significant fund-raising effort, so the College continues to devote resources to this activity; and for the disciplined financial management of operations, such as was achieved during 2002-03. Implementation of the Strategic Plan, including the Resources Strategy, continues, a review due in the autumn of 2004 and the projected end date of autumn 2006.
In the autumn of 2003 the College commences work on a major building project at its properties in Museum Road. The new Lincoln/EPA Science Centre, financed in large part by a donation from the EPA Trust, will provide accommodation for post graduate students in the life sciences. The project includes the refurbishment of a row of Victorian houses, presently used for undergraduate accommodation, and it is intended that this block together with the meeting and social facilities in the new centre will provide the nucleus of a new conference centre for the College.

Investment Performance
The College's investments are under the direction of the Governing Body which acts on the recommendations of the Finance Committee (which is in turn chaired by the Rector, and convened by the Bursar). Consistent with an investment plan approved in October 2001, financial investment strategy is focused on the maintenance of a core portfolio (currently comprising UK and international equities and cash) supplemented by various satellite investment strategies (private equity, hedge funds etc). The core portfolio is managed by JP Morgan Fleming Asset Management, and the satellites by a variety of investment managers. In the management of its property portfolio the College is advised by Laws and Fiennes of Broughton, Banbury.
During the year the College's investments generated an income yield of approximately 5%. This was in excess of the 4% assumed for operational budgets.

Magdalen College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of Magdalen College and the following connected bodies:

Magdalen Development Company Limited
Magdalen College Development Trust
Magdalen College Law Tutorship Company Limited
The Fleet Tutorship Company Limited

Review of operations and finance
The College, together with its subsidiary and connected bodies, generated a deficit of of £173K and an overall cash inflow of £514K. After excluding Net Realisation of Endowment Assets and the receipt of new Endowments there was an operating cash outflow of £1,924K.
There has been substantial capital and refurbishment expenditure during the year on the College's buildings.

Investment Performance
The College's invested assets generated a total return during the year to 31st July 2003 of 0.6%.

Reserves
The balance on reserves at the year end amounted to £12.7m (note 13). After allowing for the amounts invested in fixed assets and the liability relating to the Pension Scheme, the Consolidated General Reserve was £3,867k. The Governing Body will be reviewing the level of reserves which should be maintained to allow the College to be managed efficiently.

Mansfield College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consist entirely of the accounts of Mansfield College. There are no active trading subsidiaries.

Review of operations and finance
The major sources of income for the College came from fees, followed by board and lodging charges, conferences, investment income and a range of miscellaneous income. The major expenditure headings were academic, domestic and catering, administration and development, and maintenance.
The final position on the income and expenditure account was an initial deficit of £58,052 compared with a budget forecast deficit for 2002-03 of £62,456. However new accounting rules for buildings depreciation required an additional amount of £42,461 to be added for this purpose, and this brought the final total to £100,513.
The College is developing a ten year financial recovery plan which, on current available information, is designed to provide for a surplus on the income and expenditure account within five years. The main element of this plan is the anticipated increased conference income to be achieved together with a reduction of student private rental subsidy costs, as a result of the building of new accommodation on the main site. There will be continued growth of the College's endowment, and on-going fundraising activity for both recurrent and capital purposes. The College is also reviewing operational costs and will seek to reduce these where it is practicable to do so.

Investment Performance
After a period of significant failing values arising from falls in the stockmarket the capital value of the College endowment portfolio sustained a small overall loss in 2002-03. However the capital value has now grown consistently since March 2003 and these losses have been recovered.
Despite fluctuations in the capital value of the investments, the anticipated income levels from the endowments were maintained.
£500,000 was received from the College Contribution Fund and was invested in the University's Trust Pool.
The College's Finance Committee meets twice yearly to review the performance of the College's investment portfolio in conjunction with Rathbones Investment Management Limited who are contracted to manage the portfolio. The Finance Committee sets growth and income targets which are reviewed on an annual basis. The current policy is for a total return over a three year period which should be at least that of the FTSE all share index.

Reserves
The College balance sheet shows a surplus of £90,045 of current assets over current liabilities with a total figure of £8,515,133 of total assets less current liabilities. Total net assets taking into account amounts falling due after more than one year are £8,467,247.

Merton College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of Merton College, Merton College Charitable Trust and Merton Enterprises Limited. Merton College Charitable Trust (registration number 1078622) makes grants to the College from donations received for College purposes. The trustees include members of the Governing Body of the College and third parties. Merton Enterprises Limited (registration number 3934410) undertakes trading activities on behalf of the College and any profits are paid to the College under gift aid. The audited accounts of Merton College Charitable Trust and Merton Enterprises Limited at 31 December 2002, adjusted for transactions between 1 January 2003 and 31 July 2003, have been used as the basis for consolidation.

Review of operations and finance
For the year ended 31 July 2003, the consolidated surplus on income and expenditure account was £790,116, and the increase in consolidated net cash funds was £1,592,959. At 31 July 2003, consolidated net assets were £104,540,566 (2002 £101,702,029), consolidated endowments and reserves were £100,980,701 (2002 £99,281,726) and the College was contracted for capital commitments of £2,150,412 in respect new building projects and programmes of improvement to fixed assets and endowment properties.

Endowment assets and investment performance
Endowment funds are invested in assets which fundamentally underpin and sustain the operations of the College at the desired level of activity in the long term. At 31 July 2003, endowment assets were £92,314,137 (2002 £89,329,247). For the year ended 31 July 2003, income from endowment assets of £3,747,195 was credited to income and expenditure account, and the appreciation in value of endowment assets was £1,894,010. A transfer of £1,086,137 was made from general reserves to general endowment to underpin and sustain prospective growth in the operations of the College.

Reserves
At 31 July 2003, consolidated reserves were £8,666,564 (2002 £9,952,479) and, after allowing for amounts invested in fixed assets net of deferred capital, consolidated general reserves were £1,314,944 (2002 £2,278,462), of which £568,698 (2002 £1,259,657) was attributable to the College and £746,246 (2002 £1,018,805) to subsidiary undertakings. The overall decline in general reserves during the year is mainly attributable to the transfer of £1,086,137 to endowment, referred to in the preceding paragraph. College policy is to maintain endowment to sustain operations at the desired level in the long term. The Governing Body intends that the College should maintain a small general reserve, equivalent to up to three months revenue expenditure, as a contingency, but general reserves are subject to fluctuation in accordance with variations in endowment income and repairs expenditures in particular. Designated and general reserves in Merton College Charitable Trust may be paid to the College as grants at the discretion of the trustees. Capital grants made by Merton College Charitable Trust are credited to deferred capital.

New College 2002 a/c html , 2003 a/c pdf, Fellows list

Review of operations and finance
The annual report and financial statements have been drafted in accordance with the new reporting requirements for Oxford colleges as contained in Statute XV made by the University of Oxford under the Universities of Oxford and Cambridge Act, 1923. The new accounting format replaces the previous "Franks" model which had remained largely unchanged since its introduction in 1967, and complies in all material respects with recognised accounting standards. The basis used for the preparation of the figures is more fully explained in the statement of accounting policies and in the notes to the financial statements. Figures for the year ended 31 July 2002 have also been restated for comparative purposes.
The income and expenditure account on page 9 of the financial statements shows a surplus for the year of £833k, but, after allowing for an exceptional surplus of £736k relating to the sale of residential accommodation, this reduces to £97k. Over the year, the total net assets of the College increased from £67.2m to £71.9m as detailed in the statement of total recognised gains and losses.
The College continues to operate in difficult conditions. The abolition of tax credit on dividend income has damaged charities such as New College in reducing investment income by some twenty percent. At the same time, the reduction of the College Fee paid on behalf of undergraduate students represents a loss of a third of fee income over a ten year period. Since fees had not kept pace with inflation for the previous fifteen years, the loss is difficult to absorb. Where actual damage has not been inflicted by public policy, there is persisting uncertainty about public funding for higher education; the bitterly contested plans for increased tuition fees will in themselves only slightly reduce the extent to which undergraduate education is a loss-making activity.
Given those circumstances, the College has pursued a three-fold policy: first, seeking additional revenue where it can be achieved without threatening its core activities; second, eliminating indiscriminate subsidies and replacing them with more carefully targetted assistance; third, building up funds through the activities of the College's Development Office.
As to the first, the College has for some years had a programme for Visiting Students, who are full members of the College for a year, and who receive instruction as for other undergraduates; in addition, the College provides social and sporting and some library facilities for Associate Students who are in Oxford under the auspices of organizations that provide a year or semester abroad for American students. These programmes produce turnover currently in excess of £150k per annum. In addition, the College makes year-round use of its accommodation and catering facilities by hosting conferences of many kinds, from Philosophers of Education to the Howard League, and looking after summer schools from Duke University who have been with us for thirty-five years, to Human Rights Summer Schools for law students and practitioners from Eastern Europe, who have been with us for a decade.
As to the second, the College has particularly worked to change its policy on the cost of accommodation; where the College once charged uneconomic rents, it is moving towards charging economic rents and putting a proportion of the money thus saved towards student aid. Over the past three years, the indiscriminate subsidy has been reduced from £300k to £90k per annum, and will be eliminated in 2004-5. Meanwhile, the College has, both on its own and with help from the University provided bursaries for students who have no, or a reduced, fee liability; these bursaries provided a maximum of £750 per annum in 2001-2, and have risen to a maximum of £1250 in 2003-4. Unlike all other schemes with which the College is acquainted, the College scheme does not limit assistance to students with no fee liability at all, but provides reduced assistance to students who receive any fee reduction. A quarter of all undergraduates received some assistance in 2002-3. A rather different scheme provides assistance to graduate students.
As to the third, the College has an active fund-raising campaign. Note 21 describes the relationship between the College and the Development Fund; most gifts to the College are made to the Development Fund or to The American Friends of New College, a separate charity in the United States. In 2001-2, the College received some £750,000 towards the refurbishment of the 14th Century Hall from the Fund, as well as a further £360,000 for the support of ten Junior Research Fellowships in subjects ranging from English to engineering and Medicine, and tutorial fellowships in law, classics, English, and ancient philosophy. In 2002-3, the bulk of the support was in this second category. The Fund also provides a proportion of the resources devoted to College bursaries. As a small institution of higher education, the College cannot mount a very elaborate fund-raising operation, and relies heavily on the student body to assist with telephone fund-raising - 'Telethons.' Fund-raising forms a major part of the duties of the head of the College.
The College has almost finished a ten-year programme of modernising its stock of student accommodation and faculty offices. This has cost close to £15 million in total; the College can now accommodate every undergraduate who wishes to live in College accommodation, and most graduates who so wish. All rooms have modern levels of fire protection, are centrally heated, and have facilities that are, at worst, shared between two rooms. The College has taken advantage of the refurbishment campaign to instal telephones and ethernet connections throughout, as well as to provide central computer facilities for both undergraduate and graduate use.
The College's primary purpose is the teaching of students and the fostering of research, and it is worth recording that in recent years the College's undergraduates have been among the top performers in University-wide examinations, and that several Fellows of the College have been elected to the Royal Society and to the British Academy. As a choral foundation, the College has delighted in the success of the College Choir, which is now to be heard all over the world, as well as in the College Chapel six evenings a week during term.
To sustain this excellence in difficult times, the College manages its endowment with an eye both to the prudent husbanding of resources and to increasing capital and income by all safe means. Over the past century, the College has like other colleges sold much of the original estate, some of it dating back to the foundation in 1379, and now holds a diversified portfolio of assets including equities, fixed-interest securities, agricultural land, and a small amount of commercial property.

Investment powers and performance
The investments held by the College are managed in accordance with the powers given to the Warden and Fellows by Statutes XX (Investment Powers) and XXI(Delegation of Investment Management), and also in accordance with the Universities and College Estates Act 1925 (as amended in 1964). The investment strategy for endowment assets is to produce income equivalent to a spend rate of between 3.5% and 4.5% of asset value per annum whilst also preserving the real value of capital. The investments are held mainly in a portfolio of shares and securities, the day-to-day management of which is delegated to SG Asset Management. Regular review of the portfolio is conducted by an Endowment Committee which meets with the investment managers half-yearly and assesses their performance against agreed benchmarks and in the light of the income target advised for the year. Since their appointment in July 2000, the investment managers have achieved the performance target set by the Governing Body.

Reserves
The balance on reserves at the year end amounted to £7.2m. After allowing for the amounts invested in fixed assets and amounts designated for special purposes, the College's general reserve was £244k (note 18). The Governing Body has reviewed the reserves of the College and has concluded that, ideally, a minimum balance of £500k should be maintained in such a "free" reserve to allow the College to be managed efficiently and to provide for the risk of interruption to the sources of College income or for the need to make emergency expenditure. Current forecasts indicate that the required balance on this general reserve is unlikely to be achieved until the year 2005/6.

Nuffield College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of Nuffield College and its subsidiary undertaking, Nuffield Properties Limited, which is a wholly-owned property development company.

Review of operations and finance
Income from the College's endowment and interest remain of overwhelming importance in supporting day-to-day activities. Income from these sources account for 83% of total income. On the expenditure side, 'Academic Expenditure' accounted for 55% of total expenditure, a figure of £3.38m. There have been no additions to endowment during the year, but endowment asset investments have appreciated by £5.01 m.
Capital expenditure on tangible fixed assets is represented by properties acquired under the Fellows' Shared Equity Housing Scheme and the purchase by the College from Nuffield Properties Limited of an interest in the lease at 5 George Street (14 units of student accommodation). Sales of College tangible fixed assets included student accommodation that was surplus to requirement due to reprovision closer to main College site. The surplus on these disposals had the effect of reducing the operating deficit from £497,000 to £129,000. This deficit is after assessment of the liability to contribute £357,000 to the fund established under University Statute XV for making grants and loans to colleges. The Governing body has approved a number of measures intended to bring the income and expenditure account into balance by 2008.
The adopted format of accounts draws attention to cash in and out flows during the year. Overall, cash in hand = including endowment cash - has increased by £2.6m. Operating activities, acquisitions and disposals of tangible fixed assets and financing were responsible for cash outflows of £5.3m, whereas returns on investments and the realisation of investments led to cash inflows of £7.9m.

Investments
The College's endowment assets are invested in securities and cash deposits (59%) and land and property (41%). This was another difficult year for equity investments; lows were reached in March 2003 but the markets seem to have settled since then and have moved into positive territory. The investments in property benefited from capital appreciation and strong income flows so that the total return on property of 12.6% outperformed the Investors Property Databank (IPD) monthly index by 3.2%.

Reserves
As at 31 July 2003, the College had negative free general reserves of approximately £1.68m. However, the College's endowment consists primarily of general endowment with expendable capital and income. Therefore, in the short term, if cash was needed to meet operational requirements, general endowment cash would be drawn upon. At the year end date, general endowment held in cash amounted to approximately £5.6m.

Oriel College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of Oriel College, Land Estates and Property Limited and Tean Limited. Land Estates and Tean are wholly-owned vehicles for managing College investment property.

Review of operations and finance
The College accounting systems have been upgraded to coincide with the new SORP format. The various ledgers have been integrated and we are now able to produce real-time management accounts and cash flow forecasts. The endowment assets of the College were substantially increased in 2002-2003 by purchases of investment properties financed by cash and long term fixed interest bank loans. There has been a corresponding increase in income from these assets and expenditure from servicing the loans reflected in a much increased cash flow. College liquidity is good and will improve next financial year when some underperforming properties are realised. Many College rooms need upgrading and a pilot project is underway to enable a cost/benefit analysis to be made of different levels of upgrading.

Investment Performance
The net investment assets of the College increased from £28.02m to £49.49m in the financial year 2002-2003. Property increased from £19.16m to £44.14m; securities decreased from £8.86m to £5.35m. The value of development land has been written down by £1.8m. Securities are invested with Gerrard and Sarasin with fairly conservative mandates. Gerrard has been investing cash over the year and its performance has been in line with the market. The College has invested with Sarasin for many years and its performance this year has been very satisfactory.

Reserves
The balance on reserves at the end of the financial year was £12.24m. The Governing Body has sufficient reserves for it to be managed efficiently and to provide a buffer for uninterrupted services.

Pembroke College 2002 a/c html , 2003 a/c pdf, Fellows list

Review of operations and finance
These Financial Statements present the accounts of Pembroke College and include all operational income and expenditure, donations and investment income and all the assets and liabilities of the College.
The Profit and Loss account shows a surplus of £414,571. However, it should be emphasised that £400,000 of this surplus has been allocated to the Designated Reserve in the context of the College's requirement to invest in its infrastructure of listed buildings, the estimated expenditure of which is in excess of £12M over a medium term period.
Income at £4,558,710 benefits from the College's efforts to raise income from external sources by way of Conference and other activities.
Expenditure has been carefully managed and benefits from the non recurrence of certain one-off cost items incurred in the previous year.
The reserves of the College have risen from £24,475,438 to £26,531,358 as a result of donations, growth in the endowment and the operating surplus.
During the year steps were taken to strengthen the management team of the College, including the appointment of a new Bursar.

Investment performance
Investments are managed by our Fund Managers Merrill Lynch, under the direction of the Investment Committee and the performance of the funds has been satisfactory given market conditions. Cash reserves are deposited with the University deposit pool.

Reserves
The balance on reserves at the year end amounted to £5,397,914. This comprises a general reserve of £4,054,843 and a designated reserve of £1,343,071. The funds in the designated reserve are to be applied to the future renovation works to the College's historic buildings. The Governing Body considers that a general reserve of £4million should be maintained in future years to allow the College to be managed efficiently and to provide a buffer for uninterrupted services. Its intention is that any annual surpluses will be allocated to the designated reserve until the back-log of deferred maintenance had been cleared.

The Queen's College 2002 a/c html , 2003 a/c pdf, Fellows list

Review of operations and finance
The College ran a deficit of £233,398. This deficit is being addressed by a combination of cutting costs, raising income and trying to attract additional endowment. Nevertheless, the College is likely to run some deficit for a number of years before moving back into surplus. There are no other particular aspects to which we wish to draw attention this year.

Investment Performance
In order to sustain the College's general level of activity into the future, the College has set itself the target of growing the endowment by 2.% in real terms per annum. The Governing Body calculates the sustainable income that may be drawn from endowment in a manner that is consistent with this policy. Over the last year, the endowment (excluding expendable balances) grew by 3.4% above the retail price index. Over the past five years, the endownment (sic) (excluding expendable balances) grew by an average of 0.26% above the retail price index.

Reserves
The balance on reserves at the year end amounted to £5,471,747 (note 13). After allowing for the amounts invested in fixed assets and designated reserves for special purposes, the College's general reserve was £553,173. The College seeks to maintain the general reserve at a level that will meet any short-term requirements. This is achieved by transfers to and from General Endowment.

St Anne's College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of St Anne's College and its subsidiary undertaking, St Anne's College Services Company Ltd. St Anne's College Services Company Ltd is the wholly-owned vehicle for trading activities of St Anne's College.

Review of operations and finance
The College produced an operating surplus for the year of £0.1m, representing 1.8% of income. The total recognised gains for the year (taking account of the appreciation of endowment asset investments and new endowments) amounted to £0.7m, resulting in an increase in total funds of 2.5% over the year.
The College's three principal sources of income were academic fees and tuition income (31 %), residential income from College members (22%), and investment income (17%). More than three quarters of academic fee income was in respect of UK and European Union publicly funded students. The fees paid in respect of these students fall significantly (and increasingly) short of the cost of providing the level and pattern of teaching which the College offers through the tutorial system, and it is only its investment income which allows the College to maintain this distinctive educational provision.
The College's largest category of expenditure was staff costs, which represented rather more than half of annual expenditure. In common with other organisations the College faced increasing costs of pension provision in 2002/03 and these will continue to rise in subsequent years.
The College continued its programme of planned maintenance and refurbishment of accommodation. The renovation and refurbishment of 39/41 Banbury Road was completed in December 2002, and work began on the renovation of 50 Woodstock Road in July 2003 (the project was completed in October 2003).
Work on the design of a new building on the College site to provide 113 student rooms, a lecture theatre and three seminar rooms culminated in the submission of a business plan for the project to Governing Body in June 2003. Governing Body agreed to proceed with the project which is scheduled for completion in January 2005 and will enable almost all undergraduates to live on site. The cost of design and development works and preparatory site works for the new building amounted to £1.4m in 2002/03. This was financed from donations and benefactions received in previous years. The remaining cost of the new building will be met from the sale of the College's four off-site houses in north Oxford, further pledged donations and benefactions, and loan finance.
The heavy programme of capital expenditure during the year resulted in a cash outflow of £1.9m in respect of College buildings. Although most of this expenditure was met from accumulated donations, a delay in the sale of the first of the College's off-site houses to be marketed (eventually achieved in November 2003) meant that the College had to draw heavily on its liquid resources at the end of the year.

Investment Performance
The Investment Committee pursues a total return policy for investment income, subject to the generation of a target level of income each year. The main endowment fund produced a total return of 9.66% over the year, and income generated exceeded the target by 6.9%. No capital gains were withdrawn during the year.

Reserves
The balance of reserves at the year end amounted to £8.03m (2002 £7.93m) (note 18). After allowing for reserves designated for special purposes, the consolidated general reserve was £5.94m (2002 £6.18m). The Governing Body has reviewed the reserves of the College and has concluded that a liquid general reserve of £750k should be maintained to allow the College to be managed efficiently and to provide a buffer for uninterrupted services. This equates to approximately one and a half month's expenditure. Current forecasts indicate that the required balance on the general reserve will be achieved by the year 2005/06.

St Antony's College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements have been prepared in accordance with the Statement of Principal Accounting Policies detailed on pages 3 and 4. The Governing Body wishes to draw attention to the fact that the Statement of Recommended Practice on Accounting in Further and Higher Education Institutions has been followed to the extent appropriate to these financial statements.
The financial statements do not consolidate the accounts of the College's wholly owned subsidiary undertaking, St Antony's Trading Ltd with those of the College because that company was dormant throughout the year ended 31 July 2003.

Review of operations and finance
The Income and Expenditure account shows a surplus of £76,220. This result reflects the College's efforts to increase its income and reduce its expenditure.

Investment performance
In consequence of low and diminishing income yields on equities, the Management Executive Team is now pursuing a total return policy for investment income.

Reserves
The balance on reserves at the year end amounted to £(166,587) (note 19). After allowing for the amounts invested in fixed assets and designated reserves for special purposes, the College's general reserve was an adverse balance of £944,022. The Governing Body has reviewed the reserves of the College and has concluded that no general reserve needs to be maintained because the general endowment provides a balance which could be used to deal with temporary loss of income or unanticipated but essential expenditure

St Catherine's College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of St Catherine's College and its subsidiary undertakings, St Catherine's College Management Ltd and St Catherine's College Development Ltd. St Catherine's College Management Ltd is the wholly-owned vehicle for trading activities of St Catherine's College, and St Catherine's College Development Ltd is a wholly-owned vehicle for providing development, design and construction services to the College.

Review of operations and finance
Since the accounts are presented for the first time this year in the new format prescribed by Statute XV of the University, prior year comparables are not shown for the Income and Expenditure Account. However, key income indicators for which comparables are available show Academic fees rising 5.8%, and Endowment income failing by 12%. Overall operating income and expenditure for the year were substantially as budgeted for During the year a major programme of refurbishment to Staircases 1-16 continued and a start was made on Phase II of the new building project which comprises 131 more student rooms, and a new reception and seminar block. It should be noted that the Surplus for the year includes interest on deferred capital for building projects, and that the increase in tangible fixed assets includes capital projects under way, which are not yet attracting their associated depreciation charge. These projects are being financed to completion by a combination of benefactions, loans from endowment, and external loans, and as they are brought into use the depreciation and financing charges on the Income and Expenditure Account will rise accordingly in future.

Return on Endowment and Investment performance
The Investment Subcommittee pursues a total return policy for the investment of endowment and uses as its benchmark a long term real return of 4.5%. Investment performance is measured by calendar quarters and the total return on quoted endowment securities and cash was -2.5% in the year to 30 June which fell 9.9% below benchmark, but exceeded the performance of the FTA All Share index by 7.2%. The Subcommittee's general direction from the Governing Body and its Finance Committee is to provide for a prudent and substainable (sic) percentage of the expected long run return on endowment to fund the College's objectives while at the same time aiming for some growth in real endowment capital. In accordance with current accounting standards, the transfer from General Endowment to the Income and Expenditure Account is made up of dividends, interest and rent in full on a receivable basis. The Governing Body intends to keep under review the adoption of a policy of transferring to the Income and Expenditure Account a proportion of total return consistently derived from a sustainable long term spending policy.

Reserves
The balance on reserves at the year end amounted to £11,273,527. After allowing for the amounts invested in fixed assets, the College's cash reserves were £3,878,387, of which £3,293,763 was designated chiefly for maintenance and refurbishment. The Governing Body has reviewed the reserves of the College which will be depleted in 2003/04 as a result of capital projects under way. The College is not projecting surpluses over the next five years because of the increase in financing and depreciation charges associated with current and planned capital projects but ideally the Governing Body considers that a general reserve of £3 million should be built up as circumstances permit, in order to to allow for optimal financial management and provide a buffer for uninterrupted services.

St Edmund Hall 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consist of the accounts of St Edmund Hall.

Review of operations and finance
Income rose by 2.9%, compared with a 3.0% rise in the previous year. Expenditure was up by 7.1 %, compared with 5.5% in the previous year. This means that the surplus on the Income and Expenditure Account, which (on the SORP definition) had been £374k in 2001/2, fell to £209k in 2002/3. It was derived from total income from all sources (student teaching and accommodation, endowment and other investments, and conferences) of £4.7million (endowment and other investment income being £803k). The surplus of £209k will be applied to the development of college facilities in future years.
The total recognised gains relating to the year were £1.6million. Net assets at the year end amounted to £25.7 million, having risen from £24.1 million at the previous year end.
Numbers of students were: undergraduates 396, graduates 109 and visiting students 35, totalling 540, an increase of 40 over the previous year. Currently we can accommodate about 70% of our students. However, the College is in the process of a major development of additional student accommodation, which will increase the proportion accommodated to about 85%. This project, funded largely by donations, will cost about £3.9million, of which £1.7million was spent in the year and the outstanding commitment was £2.2 million at 31 July 2003.

Investment Performance
The Investment Committee pursues a total investment return (from income and capital combined) objective of at least 4.2% in real terms taking one year with another. The main portfolios of stocks and shares yielded a total investment return of 5.2% in nominal and 2.1% in real terms.
The main portfolios are divided between two investment managers, which have discretion within the overall policy and report quarterly, in writing and in person. The main portfolios and other investments are kept under review by the Investment Bursar and the Investment Committee.
The property revaluation reported in the accounts is based on a change in market expectations.

Reserves
The balance on reserves at the year end amounted to £7.0 million (note 19). After allowing for amounts invested in fixed assets and designated reserves for special purposes, the College's general reserve was £684k. The Governing Body has reviewed the reserves of the College and has concluded that the general reserve was sufficient to allow the College to be managed efficiently and to provide a buffer for uninterrupted services.

St Hilda's College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of St Hilda's College and its subsidiary undertakings, The Jacqueline du Pre Music Building Limited and St Hilda's Properties limited. The Jacqueline du Pre Music Building Limited is the wholly-owned vehicle for promoting Music at St Hilda's College; St Hilda's Properties was founded to promote acquisition of residences for students of St Hilda's, but did not trade in 2002-03.

Review of operations and finance
The combined operations of the College and its subsidiaries posted an operating deficit of £550,353 for the year ended 31 July 2003, after taking account of the changes in SORP accounting policy. These increased depreciation charges by £63,193, after allowing for equipment purchase costs. Endowment income declined for the second successive year, by £207,193, a 23.1% fall, reflecting poor stock market returns and low interest rates.
On the positive side, fee income rose with extra graduate students, and conference income grew by 21% as a result of both pricing and booking levels. There were concomitant increases in staff expenditure as a result of increased activity levels and the 50% increase in OSPS contribution rates.
The College invested £719,177 in endowment property and equipment which will contribute new revenue streams in 2004 when the new student accommodation and Nursery facility opens. Further investments will continue in the next financial year, with the commencement of the £1.46 million Library extension, completion of which is scheduled for September 2004.
2004 will post some significant windfall gains from the sale of Frenchay Road, £173,000 and a once-off recovery of retrospective VAT of £149,122; these will mitigate the deficit £343,467 projected for 2004. Significant management effort is being exerted by all areas of College to develop revenue growth and cost reduction programmes which will restore continuing activities to a break-even position, while longer-term strategies are being evaluated.

Investment Performance
The low returns on investment have had a significant effect on College income in 2 of the last 3 years; during which the College has operated a total return policy on investment income. The main endowment fund yielded a return of -6.1% over the financial year, on a par with the CAPS median for the period. Over a 5 year period the fund managers have fallen short of the benchmark by 0.3%, and the College Investment Committee is reviewing investment strategy options with HSBC.

Reserves
The balance on reserves at the year end stood at £773,301. After allowing for amounts invested in fixed assets and designated reserves, the General reserve had a negative balance of (£666,771), reflecting the accumulated deficits of the last 2 years. The Governing Body has identified that he most significant financial priority is to build the level of Endowment investment by an additional £10 million, in order to support the long-term costs of tuition and predicted reductions in central government funding for student fees, a growing part of which will need to be supported with endowment.
The time period for reaching balance sheet equilibrium is uncertain, but current strategic plan developments anticipate a three to five year cycle of expanded fund-raising and revenue expansion to secure a positive and growing level of income for expansion of College activities.

St Hugh's College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements comprise the accounts of the College.

Review of operations and finance
The College generated a deficit of £801,306 and an overall cash outflow of £1,203,751. Bank loans taken out in 1999 to finance a building were restructured. Bad debts amounting to £121,875 were written off. It was agreed that Estatebend Projects Ltd, a wholly-owned subsidiary company, would cease to supply energy to the College and would repay £1,118,438 prepaid by the College, which in turn repaid a loan of £1,115,791 to the company; debtors and creditors were reduced by these amounts.

Investment Performance
In 2002-03 a change to the College's statutes permitted the College to pursue a total return investment policy, and the College's investments were moved from active management to indexed funds. The market value of investments fell by 0.1% over the year.

Reserves
The balance on reserves at the year end amounted to £631,217 (note 15). After allowing for the amounts invested in fixed assets and designated reserves for special purposes, the College's general reserve was £452,456. The Governing Body will be reviewing the level of reserves that should be maintained to allow the College to be managed efficiently.

St John's College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of St John's College and its subsidiary undertaking, The Lamb & Flag (Oxford) Ltd. The Lamb & Flag (Oxford) Ltd is the wholly-owned vehicle for the trading activities of the Lamb & Flag public house in St Giles. The College is applying the profits from this public house towards the financing of graduate studentships.

Review of operations and finance
The College level of endowment income has increased to £7.3m. Under the new format of the accounts exchange loss relating to foreign currency cash balances is included in the income & expenditure account and has had an adverse effect on the results of the year compared with the exchange gain last year. Under statute XV of the University College contribution rates have increased by 12.5% and this has resulted in a charge against income of £659k. The College has been able to commence a number of new initiatives which include the St John's research centre. The College is devoting increased resources to the support of graduates and undergraduates. The College is planning a major development of the Queen Elizabeth site from 2005 onwards, which will include residential and academic support for graduates. At an undergraduate level the College is participating in the new Oxford Bursary Scheme. In addition, the College has introduced its own scheme named after Sir Richard Southern (a former President of St John's) to make maintenance awards to candidates Of Outstanding academic excellence who show substantial and continuing financial need. Major building works have commenced during the year which include the new student accommodation at 111 Woodstock Road which was completed in September 2003 and the work on College meeting rooms and kitchens which is due to be completed in July 2004.

Investment Performance
During the year the main portfolio achieved a total return of 12.6%. During this period bond markets outperformed equity markets. The endowment investments, which include bonds and equities in the UK and overseas all outperformed their respective indices over the year. Overseas bonds (total return 22.8% over the year) and UK equities (total return 6.5% over the year) in particular made a significant contribution. The College's property portfolio shows a total return of 10.5% before fees and other costs. During the year the College has appointed two additional advisors to manage their overseas investment portfolio, one in New York who manage the College's US equity portfolio and one in London who manage part of the College's Bond portfolio. Both Managers report positive results for the period of their management.

Reserves
The balance on reserves at the year end amounted to £17.8m (note 14). After allowing for the amounts invested in fixed assets the College's general reserve was £2.04m. The Governing Body has reviewed the reserves of the College and has concluded that the general reserve at this level should be maintained to allow the College to be managed efficiently and to provide a buffer for uninterrupted services. This equates to approximately 2 months of expenditure. The College has transferred £3,000,000 from the Endowment Fund to its General Reserve.

St Peter's College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of St Peter's College and its subsidiary undertaking, Crossed Keys Limited. Crossed Keys Limited is the wholly-owned vehicle for property development activities of St Peter's College.

Review of operations and finance
Where previously the accounts made no reference to working buildings, these accounts incorporate the value of those buildings incorporated less than 50 years ago. These are not realisable and are included as tangible fixed assets. Their value in the accounts will reduce over time as they are depreciated. The 'residual' value of these buildings contributes to the relatively high sums on the balance sheets. The introductions of £147,035 of depreciation accounts for this year's surplus of expenditure over income.
No major capital works were undertaken in the 2002-2003 financial year, but the modernisation of the kitchens (estimated at £0.6m), work to build 50+ rooms on Paradise Street (estimated at £2.4m) and the possible acquisition of an annexe of study/bedrooms (estimated at £2.8m are planned to begin before the end of the 2002-2004 accounting year. These projects are likely to be financed by bank loans.

Investment Performance
The College's policy of making provision not only for the present but also for the future led the Investment Committee to pursue a total return policy in favour of one geared to investment income. The income from these investments allows the College to supplement fee income. The management of the College's equity and fixed interest portfolio changed in the year under review. That fund yielded income of 2.8% and showed capital growth of 3.9%. Cash on the moneymarket produced an income of 3.5%.

Reserves
The balance on reserves at the year end amounted to £4m (note 19) and consists largely of property acquired or built within the last 50 years. Were this property to be discounted (i.e. depreciated to zero) there would be no general reserve funds. The Governing Body has concluded that a general reserve of £2m should be the long term aim to allow the College to be managed efficiently and to provide a buffer for uninterrupted services. This equates to approximately 6 months of expenditure.

Somerville College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of Somerville College. There are no subsidiary undertakings or a wholly-owned vehicle for trading activities.

Review of operations and finance
The major sources of income are the academic fees, residential, catering and conference charges and donations and legacies. The major sources of expenditure are the staff costs, particularly for academic teaching and for support staff providing residential and catering services, the costs of maintaining the College premises and the costs of providing residential and catering services. There was a deficit of £233,399 for the year excluding restricted donations and legacies to the endowment. This compares with a surplus of £355,674 in the year ending 31 July 2002. The main reasons for the worsening performance were a decrease in the return from the endowment fund due to the decline in the stock market, a decrease in unrestricted donations and legacies, continued significant expenditure on buildings for repairs and renewals, increased staffing costs and higher depreciation. Management of cash flow was satisfactory and improved financial controls and procedures were put in place in the Treasury department. However, the loss incurred in the year to 31 July 2003, due to the need for the College to subsidise the cost of all the essential services provided to students, is very substantial and cannot continue. There will be a major review of costs and charges in the coming year to see where savings can be made or further income obtained. A major building project to add 9 student rooms in Darbishire Building has just been completed though the full cost has not yet been incurred in these accounts. There are further plans to provide additional student accommodation but these will require significant new money to be raised through development activities or from loans against assets.

Investment Performance
As a result of the low and diminishing income yields on equities, the Finance Committee is now considering a move during the coming year to a total return policy for investment income. A new fund manager was appointed from August 2002 with a discretionary mandate. This represented a move from the previous situation where the majority of the investments were held under an advisory mandate with one manager and a minority of the investments were held under a discretionary mandate with another manager. The main endowment fund yielded a total return of 4.5% over the 11 months to 31 July 2003, which exceeded the performance benchmark set for the new fund managers by 0.8%. It is not yet possible to give a performance report over a longer period due to the recent change of fund managers and the move from an advisory to discretionary mandate.

Reserves
The balance on reserves at the year-end amounted to £3.5m (note 19). After allowing for the amounts invested in fixed assets and designated reserves for special purposes, the College's general reserve was £0k. The Governing Body has reviewed the reserves of the College and has concluded that a general reserve of £2.2m should be maintained to allow the College to be managed efficiently and to provide a buffer for uninterrupted services. This equates to approximately 6 months of expenditure. Current forecasts indicate that the required balance on the general reserve will not be achieved for several years and will require a significant surplus of income in future years.

Templeton College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of Templeton College and its subsidiary undertaking, Templeton (Oxford) Limited. Templeton (Oxford) Limited is the wholly-owned vehicle for trading activities of Templeton College.

Review of operations and finance
Difficult trading conditions for executive programmes were experienced during the year. Despite cost reductions that took place throughout the year, there was a deficit of £567,356 on continuing operations. New endowments received during the year amounted to £1,252,342. Cash and Investments at the balance sheet date amounted to £1,518,698 an increase of £851,763 for the year.

Investment Performance
During the year the Rosemary Stewart Scholarship Endowment Fund (£98,932) was invested in the Global Growth & Income Fund for Charities, which is managed by Newton Fund Managers Limited. During the period that Newton's managed the investment, the minimum target yield of 3% was not achieved, but the fund performed better than the benchmarked WM Total Charity Universe.

Reserves
The Governing Body seeks to keep its reserves at a reasonable level, given its predicted future commitments.

Trinity College 2002 a/c html , 2003 a/c pdf, Fellows list

Review of operations and finance
The financial statements have been prepared in accordance with the new reporting requirements for Oxford Colleges as set out in Statute XV made by the University under the Universities of Oxford and Cambridge Act, 1923.
The College had an operating surplus of £254k as shown in the Income and Expenditure Account on page 7, but after allowing for a benefaction of £100k this reduces to £154k. In addition the total expenditure on maintenance items and provision for depreciation reduced by £70k reflecting a smaller maintenance programme compared with previous years. The planned programme for future years will return to the levels seen previously.
The College continues to be affected by changes in public policy. In particular the phased abolition of the tax credit on dividend income will be completed in April 2004. By then, the College will be losing in a full year £130k of income compared to 1999.
Over the year the total net assets of the College increased from £48.2m to £50m as detailed in the Statement of Total Recognised Gains and Losses

Investment Performance
During the year the endowment fund was managed in accordance with Statute XIX. The investment strategy for endowment assets is to allow expenditure of at least 3% of the endowment per annum. The endowment comprises an equity/bond portfolio managed by Deutsche Asset Management and a property portfolio managed by the College land agent, Laws and Fiennes. Performance is reviewed termly by an Investment Management Committee.

Reserves
The balance on reserves at the year end amounted to £4.35m (note 15) of which £4.l m was general reserve. After allowing for amounts invested in freehold properties and designated reserves for special purposes, the College's general reserve was 250k. The Governing Body has reviewed the reserves of the College and has concluded that a general reserve of £500k should be maintained to allow the College to be managed efficiently and to provide a buffer for uninterrupted services.

University College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of University College and its wholly owned subsidiary undertakings, Fleximist Limited and Micklehall Limited. Fleximist Limited has now ceased trading as a supplier of fuel and power while Micklehall Limited is a vehicle for property development activities of the College.

Review of operations and finance
The revenue and expenditure figures for 2001/02 were previously prepared on the principles of the Franks accounts. To generate figures for comparison with 2002/03, the Governing Body's review of operations and finance is based on the un-audited management accounts of the College.
Operating income and expenditure In view of the uncertainties over fee income, the College has made considerable efforts to restrain expenditure. In 2002/03 operating expenditure grew by 0.5%. Operating matters are divided into academic ("Tutorial") and non-academic ("Domus").
Tutorial Direct teaching costs were stable, after allowing for a non-recurring item of expense in the previous year. These teaching costs comprise the costs of Tutorial Fellows, plus Lecturers' costs, less specific payments received by the College in relation to Fellows.
Within a Senior Tutor's budget that was largely unchanged, we managed to increase grants to students from £144,000 to £183,000. These grants are for academic purposes as well as hardship.
The amount the Colleges receive as fee income in respect of publicly-funded undergraduates is calculated by the Quantum formula agreed with the University. Last year the rate rose by 1.87% to £3,508.08. For 2003/04 a substantial rise is in the pipeline (5.97%). Beyond that, the range of possible outcomes is wide.
At Univ in 2002/03, the total number of junior members declined from 520 to 499 and total fee income was down by 0.84%. Net Tutorial Expenditure rose by 2.8% to £1.013m.
Non-Tutorial (Domus) Total expenditure on the Domus account was largely unchanged last year. Expenditure rose by 0.6%.
Premises maintenance costs continue to rise strongly. These costs are allocated 20% to the Tutorial account and 80% to the Domus account. Besides maintaining the fabric and interior decoration, the College has to meet new regulations as they arise. Nevertheless, it has been possible to make some additional investments in lasting improvements, notably the first five new kitchen/dining rooms in the Greenwood building at Staverton.
Staff costs were contained, despite the underlying pressures from increased National Insurance costs and rising pension contribution costs.
The College achieved increases in Domus income. In particular, conferences had another record year. Accordingly, despite rising premises costs, net Domus expenditure was reduced.
Drawing on endowment We draw on endowment income to fund Tutorial expenditure to the extent that it exceeds fees and other academic income, Domus expenditure to the extent that it exceeds accommodation/catering/conference income, and the College Contribution charge under Statute XV of the University. Such drawings totalled £2.071m (previous year £2.105m).
Investment Income Investment income grew a little in 2002/03. Adjusting for a substantial non-recurring item of £89,000 in this year, the underlying rise in income was 1.5%. Substantial asset allocation adjustments into lower-yielding assets were made during the year, and there was a continued decline in short-term interest rates. These factors were offset by favourable rent reviews for investment properties.
External costs (property repairs, professional fees, VAT thereon etc) are about 1.0% p.a. for property, and about 0.6 % p.a. for equities.
Donations Donations received amounted to £279,000 in the form of income, plus £886,000 in the form of capital added to endowment. This generous support is greatly appreciated by the College.
Surplus The College's consolidated surplus was £408,961 in 2002/03. From this sum, funds have to be set aside to strengthen the endowment and provide for capital expenditure. Funding capital expenditure on functional buildings remains a considerable challenge.
Cash flow As will be seen from note 18 of the accounts, the surplus plus depreciation generated cash of £459,731. From this inflow, £351,040 was absorbed by changes in debtors and creditors, but these were largely due to the effect of specific non-recurring items.
After allowing for new investments that were a little greater than donations, the total cash balances of the College declined from £12.6 million to £12.4 million.
Outlook The College faces significant financial challenges. As matters stand now, if the Government's fee proposals are carried, we face deficits within a decade; if they are not, within five years. Against this uncertain background, the College has to plan appointments on the long timescale required in an academic institution. The College will endeavour to combine a lively academic strategy with limited growth in total expenditure.

Investment Performance
Investment Strategy Our investment objectives are:

• funding current spending at an appropriate drawing rate; our guideline rate is a maximum of 4% of a rolling 3-year average of endowment and general reserves;
• growing the capital sufficiently in the long term to keep pace with our own inflation rate; our guideline rate is Retail Price Inflation + 2% p.a.;
• seeking to earn additional returns to contribute to the cost of capital expenditure on functional assets.

Reserves
The balance on reserves at the year end amounted to £5.30m (note 17). After allowing for the amounts invested in fixed assets and designated reserves for special purposes, the College's general reserve was £2.27m. The Governing Body has reviewed the reserves of the College and has concluded that this level of general reserve should be maintained to allow the College to be managed efficiently and to provide a buffer for uninterrupted services. This equates to approximately 4 months of expenditure.

Wadham College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of the College and its subsidiary undertaking, Wadham Energy Supplies Ltd. The subsidiary was established to provide energy supplies for the College.

Review of operations
There have been no major movements in the College's sources of income and expenditure, and the out-turn is in line with expectations. In the year, two Fellows left and three joined. In addition, the College appointed 10 new Fellows, who joined after the year-end, and 9 Fellows have left after the year-end.
The Warden announced his early retirement early in the year, and the College pre-elected Sir Neil Chalmers as Warden w.e.f. lst October 2004. In the interim, Mr. Hackney (tutor in law) has been appointed Acting Warden.
In the year, the College extended its residential complex (Merifield) in North Oxford, having purchased additional land from the adjacent owner. Completed after the year-end at a total cost of £1,759,578 (including furniture), the new block will house a further 30 students. The project was funded from a bequest, designated reserves, and internal borrowing.

Reserves
The balance on reserves at the year end amounted to £21,809,166. After allowing for the amounts invested in fixed assets, the revaluation reserve and designated reserves for special purposes, the College's general reserve was £2,100,000. The Finance Committee has reviewed the reserves of the College and has concluded that a general reserve of £2M should be maintained which, along with the Academic Purposes Contingency Reserve, and bad debts reserves, will allow the College to be managed efficiently and to maintain uninterrupted services. These equate to approximately 12 months of expenditure.

Wolfson College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of Wolfson College and its subsidiary undertaking Wolfson College Developments Limited which is a wholly owned vehicle for trading activities of the College, particularly in respect of building works. Within the accounts is a Development Fund for the purposes of raising funds for educational and related facilities at the College.

Review of operations and finance
The three major sources of income in the year remain:

From the investment pool which includes the endowment	£732,175
From academic fees	£652,614
From residential income	£1,138,699

The catering account is run as a distinct profit centre within the accounts and shows a deficit of £107,280. The College accepts that some degree of cost is always likely to accrue to the College in order to provide what is a core facility to further collegiate life. Nevertheless, steps are in hand to contain the deficit for the future.
Expenditure remains on course dictated by the annual estimates incorporating 5 year plans.
The sale of the freehold of 14 Linton Road raised £2,121,430. Those monies will be expended in a contract with Wolfson College Developments Limited to build new student accommodation with a projected cost of £2,060,435. Project completion is expected August 2004.
There are market increases in employment costs which, in addition to annual pay rises have included a 2.5% increase in employer contribution to OSPS. It is anticipated that further rises will be felt next year and the added 1% employer NI charge will also bite.

Investment Performance
The market value of investments has dropped. This is also reflected in the income received and the Investment Committee has determined that a total return policy should apply with an annual cash sum required of the Investment Manager which will not normally exceed 4% of capital. The main portfolio yielded a total return of 7.7% in the year against an indexed return of 6.4%. It is early days to judge performance from Chiswell Associates who manage our main portfolio. A number of changes in strategy have been introduced which are almost complete and are showing some promise.
The Investment Committee has committed a portion of investment funds to alternative investments. Due diligence is provided by Cambridge Associates. These funds are managed directly by the College; £2,335,311 is committed in 6 funds and £l,713,872 is called down to date.

Reserves
The balance on reserves at the year end amounted to £4,386,086. The Governing Body has reviewed the reserves of the College and has concluded that a general reserve of £2,000,000 should be maintained to allow the College to be managed efficiently and to provide a buffer for uninterrupted services. This equates to approximately 7 months of expenditure.

Worcester College 2002 a/c html , 2003 a/c pdf, Fellows list

Scope of financial statements
The financial statements consolidate the accounts of Worcester College and associated charitable entities of which the College is the sole beneficiary, the Amplett of Clent Scholarships Trust Fund, the Wilkinson Trust, and the Worcester College Society. The Worcester College Society is a registered UK charity engaged in raising and providing funds for educational and related facilities at Worcester College.

Review of operations and finance
Endowment account income fell by £127,000 in 2002/3, a reduction of 18% over the previous year: this was in line with the change in investment policy outlined below. Education account income, including fees paid by students on the College's Junior Year Abroad programme, rose by 3%, but expenditure rose by over 6%, so that the deficit on the education account rose by over £110,000: £88,000 of this increased net expenditure was attributable to increased student support in scholarships and grants. A disappointing year for conferences, with several major cancellations of bookings, and reduced numbers on Summer Schools, in the aftermath of the Iraq war, saw the net surplus on the housekeeping account fall by £83,000. Elsewhere expenditure was tightly controlled, falling in real terms on premises and fund-raising expenditure, and rising on administration only as a consequence of the move to new offices, which greatly improve the efficiency of interaction between the academic and financial administrative staff. The new office development had, in the previous year, necessitated the creation of ten extra undergraduate rooms to replace those taken over by the new offices: this year the move of the offices made possible to creation of three new sets for teaching Fellows and two new seminar rooms, reflecting the need for the incorporation of new teaching technology for small classes and seminars. After the end of the financial year the College received a major report on the state of its historic buildings. These reports are commissioned every five years and form the basis of the priorities for maintenance expenditure over the next period.

Investment Performance
During the year the invest sub-committee has continued to work towards the long term portfolio allocation agreed with and monitored by Cambridge Associates. This has resulted in a reduction in the previous high allocation to fixed income in favour of investment in hedge funds and in increased holdings in equities in Europe and Asia. These shifts, together with the reduction in interest rates, have resulted in a significant reduction in the income generated on the endowment account.

Reserves
The balance on reserves at the year end amounted to £9m (note 19). After allowing for the amounts invested in fixed assets and designated reserves for special purposes, the College's general reserve was £7m.