Clare College, Cambridge · Clare College, Cambridge Financial Statements for the year ended 30...

Clare College, Cambridge

Financial statementsfor the year ended 30 June 2017

Clare College, Cambridge Financial Statements for the year ended 30 June 2017

Contents

Contact Information and Advisors 2

Governing Body and Committees 3 - 4

Aims and Objectives of the College 5

Operating and Financial Review 6-10

Statement of Corporate Governance 11

Statement of Internal Control 12

Statement of Responsibilities of the Trustees of the College 13

Independent Auditors Report to the Trustees of the College 14-15

Statement of Principal Accounting Policies 16 -19

Consolidated Statement of Comprehensive Income and Expenditure 20

Consolidated Statement of Change in Reserves 21

Consolidated and College Balance Sheets 22

Consolidated Cash Flow Statement 23

Notes to the Financial Statements 24 - 36

1


Contact Information and Advisors

AddressClare CollegeTrinity LaneCambridge CB2 ilL

Key officersMaster: Lord A S GrabinerSenior Tutor: Dr P Fara (to 3009.16)

DrJ ATasioulas (from 01.10.16)Bursar: Mr P C Warren

Registered charity number1137531

VAT number125 498496

Professional advisors:

Independent auditorsPeters Elworthy & MooreSalisbury HouseStation RoadCambridge CB1 2LA

Principal bankersBarclays Bank plc9-11 St Andrew’s StreetCambridge CB2 3AA

Principal solicitorsAshton KCJ LLPChequers House77-81 Newmarket RoadCambridge CBS BEU

Property managersBidwells Property ConsultantsTwmpington RoadCambridge CB2 2LD

Principal investment managersState Street Global Advisors25 Bank StreetLondon E14 5LE

2


Governing Body and Committeesfor the year ended 30 June 2017

StatusThe College is a corporate body consisting of the Master, the Fellows and the Scholars of Clare College, Cambridge as provided by theCollege’s charter in 1359 and Statutes that were updated in 2013. The College is a registered charity with registration number 1137531and registered office at Clare College, Trinity Lane, Cambridge, CB2 1TL.

The names of the members of the Goveming Body and the Committees charged with the governance of the College during the yearended 30 June 2017 were as follows:

Governing BodyMaster:Senior Tutor:

Bursar:

Lord A S GrabinerDr P Fara (to 30.09.16)Dr J A Tasioulas (from 01.10.16)Mr P C Warren

Professor P M AllmendingerProfessor N H AndrewsProfessor A P BalmfordDr P D BristoweMrTC BrownMr S J BuczackiProfessor W J ByrneDr R C CachoDr J CarrollDrA P CarterProfessor P A CartledgeDr A D ChambersDr T ChestersProfessorCJ ClarkeProfessor N S ClaytonDr L J CoIwellProfessor C CorsettiDr N CrillyDr A do Gispert RamisDrC H DuffDr M DunajskiDr MT Dunstan (from 01.10.16)Dr PAW EdwardsDr P B FaulknerDrA J Ferguson (to 30.09.16)Professor P C FletcherDr T FolliniDr W A FosterDr E A FoysterProfessor S C FranklinMrs E M FreemanDrA D FriendProfessor M Frolova-WalkerDrJS GibsonDr J GlaurdicProfessor R C GlenDr P T Gonzalez-BellidoProfessor J M GoodmanProfessor N C Greenham

Professor H GriffithsDrJ A GuyDr R M HamsProfessor W A HarrisThe Rev’d Dr J D T HawkeyDr R 0 HedleyProfessor D A HodellDr N B HoldstockProfessor A B HolmesProfessor D R HowarthDr K E HughesDr H F JahnMrA LJohnsonProfessor P H JonesDr M Kenzie (from 01.10.16)Dr P F KnewstubbDr D LabonteDr M B M LahrDr H LamanDr S LazarProfessor P F LeadlayDr R K LearyDr I C LestasProfessor T M LewensProfessor Dame H M 0 LeyserDr K E McDougallMs F Malarée (to 17.04.17)Mr L Maniscalco (from 01.10.16)Mr C Matthiesen (to 30.09.16)Dr T MooreProfessor G I OgilvieDr G F ParkerProfessor L C PaulsonProfessor R T PhillipsProfessor A PhilpottProfessorJ C PrabhuProfessor AM PrestonProfessor W A PullanDr K F Riley

Professor J C RobertsonMrGAC RossDr C A RussellDr H L SansonDr T SchindlerDr R S SchofieldDr R K SempleProfessor A S SinclairMr B C SlingoProfessor M SprikProfessor R SterckxDr A M StillmanDrA LTappDr J A TasioulasProfessor A G ThomasonProfessor H E ThompsonDr F M 0 ToxvaerdDr E C TurnerProfessor L K TylerDr H W van VeenProfessor J E VinualesMr P C WarrenDr R I WatsonDrM WeeksDr C G WeissDr TA H WilkinsonDr N H WoodcockProfessor J WoodhouseDrG H WrightMsJ MWyburdMs C J Legrand (MCR President)Mr M M C Lugten (MCR Vice President)Ms LB Minoli (UCS President to 01.04.16)Ms M Glynn (UCS President from 01.04.16)Mr J J Surkes (UCS Vice President to01.04.16)Mr J S Gilbey (UCS Vice President from01.04.16)

All members of the Finance Committee and Council are trustees and are given, on appointment, copies of the Statutes of the College,together with a note drawing attention to the policy for the management of conflicts of interest, and the requirements of the CharityCommission regarding such conflicts of interest.


Governing Body and Committeesfor the year ended 30 June 2017

*CounciILord A S Grabiner (Master)Dr J A Tasioulas (Senior Tutor)DrJ CarrollDrAde GispertDr M DunajskiDrJ S GibsonProfessor J M GoodmanThe Rev’d Dr J D T HawkeyDr S LazarDrG F Parker(from 14.11.17)Dr T SchindlerMr P C WarrenMr 0 W T McMillan (MCR President)Ms M Glynn (UCS President from 01.04.17)Ms LB Minoli (UCS President to 01.04.17)

In Attendance: Miss ER Easterbrook (Secretary)

*Finance CommitteeLord AS Grabiner (Master)Mr P C Warren (Bursar)Dr J A Tasioulas (Senior Tutor)Professor P M AlimendingerDr A D ChambersProfessor R C GlenProfessor N C GreenhamDr H LamanProfessor A PhilpottDr C A RussellMs R Fell (MCR Treasurer)MrA G Harding (UCS Treasurer to 01 .04.17)Mr AX A Cargill (UCS Treasurer from 01.04.17)


Investment CommitteeLord A S Grabiner (Master)Mr P C Warren (Bursar)Dr A D ChambersMr N Cumming (Clare alumnus)Professor N C GreenhamDrJAGuyMr D Haynes (Clare alumnus)Mr C Smout (Clare alumnus)Mr J Spiers (Clare alumnus)


In Attendance: Miss ER Easterbrook (Secretary)Stipends and Salaries CommitteeDrA D ChambersProfessor R C GlenProfessor H M 0 LeyserProfessor G I OgilvieMr P C Warren

In Attendance: Ms S Hewings (Secretary)

Audit CommitteeProfessorJ CPrabhuDr P B FaulknerMr A Smith (Clare alumnus)Mr C Moulder (Clare alumnus)

In Attendance: Mrs J Lince (Secretary)

Estates CommitteeProfessor P M AllmendingerProfessor A P BalmfordDrA CarterDr P B FaulknerDr T FolliniProfessor H GñffithsDr S LazarDr J A TasioulasMr P C WarrenMr M M C Lugten (MCR representative)Ms E Sbairani (UCS representative to 01 .04.17)Mr I E Epanomeritakis (UCS representative from 01 .04.17)

In Attendance: Miss ER Easterbrook (Secretary to 08.02.77)Mr PM Burton (Secretary from 08.02.77)

* All members of Council and Finance Committee are charitytrustees.

4


Aims and Objectives of the Collegefor the year ended 30 June 2017

The Colleges strategic plan sets out the Colleges long term aims in the context of national and global changes as follows:

- to maintain its emphasis on the individual in academic and pastoral provision; to deliver a world-class undergraduateeducation by feguarding the provision of small-group teaching through the College-based supervision system and toachieve excellence in education at both undergraduate and postgraduate levels.

- to support a community of Fellows, students and staff, allowing the benefits of a large, intemationally renowned universityto be realised in a small-scale and close-knit community;

- to foster and support a community of active alumni contributing to the life and future of the College;

- to promote academic research of the highest quality; and

- to maintain and enhance the endowments and benefactions, historic buildings and grounds of the College for the benefitof current and future generations.

Remaining an independent foundation within a collegiate university is fundamental to the College’s long-term strategy. The Collegeendorses the University’s mission and core values and agrees that the partnership between the University and the Colleges is centralto Cambridge’s future development. The College will continue to play an active role in University bodies and in formulating Universitypolicy.

Within the collegiate University, Clare offers distinctive strengths. The College is committed to sustaining and enhancing its particularcontribution to Cambridge and to society in general, by:

- maintaining and developing its long-standing commitment to encouraging applications from the most talented students,irrespective of background, in tandem with a needs-blind admissions system supported by a comprehensive programmeof financial assistance;

- building on the College’s strong intemational links to provide students with opportunities for educational and culturalexchanges, recognising the importance of such exchanges in an increasingly global society;

- supporting active engagement by the College and its members in the local community and in community activitiesnationally and internationally; and

- fostering excellence in music, through support of the College Choir, the choral and organ scholarships, and instrumentalawards.

5


Operating and Financial Review

for the year ended 30 June 2017

During the year, the College has continued to pursue its charitable aims in promoting learning, study, and teaching in a community ofscholars in the University of Cambridge. The intense pressure on students to achieve the highest academic standards placescorresponding demands on the College. Clare alumni, who were themselves taught by the leading academics of their generation inone-to-one supervisions or small groups, understand those pressures and the need for financial resources to maintain this standard ofeducation. Clares financial resources are provided both by our alumni, through donations which are increasingly important if we are tomaintain our high standards, and also by our own operations as we recognise a need to run the College as an efficient organisation.

Standards at the top of Higher Education are continuing to rise and Clare is determined to stay in the top echelon globally. During theyear this meant spending £10,810 on each undergraduate student, mainly on the intensive support provided by each student’sDirector of Studies and supervisors. The total cost of educating 476 undergraduates and supporting 203 graduate students increasedto £6,107,000 (2016: £5,499,000), which can only be sustained through the generosity of benefactors. The College receives acontribution equating to £4,500 for each undergraduate by way of the College Fee, but this leaves a shortfall of £6,310 for eachundergraduate student, amounting to 58% of the total cost.

The changes to Higher Education funding and student finance have resulted in increased levels of debt for students which will alsoinevitably lead to heavy pressure on Clares hardship funds. During the year the College made total bursaries of £563,106 (2016:£555,159) to students. In addition to the payment of bursaries and other grants, the College also offers subsidies on the cost of foodand accommodation as additional undergraduate and graduate student support.

The College aims to raise sufficient funds from benefactors to preserve small-group teaching for undergraduates, provide bursaries insupport of Clare undergraduates from low income backgrounds, and also support graduate study through scholarships and hardshipgrants. This will all entail a significant challenge in raising additional income, while continuing to exercise tight constraints onspending.

Financial Results

A new form of financial accounts was introduced in 2016 following the adoption of Financial Reporting Standard (FRS) 102. This sameRCCA format has also been adopted in the preparation of the 2017 financial accounts. On page 20, the Statement of ComprehensiveIncome and Expenditure (SOCIE) shows a surplus of £24,666,000 (2016: £6,723,000). The SOCIE is a statement of all movements in thenet assets of the College between one year and the next. It therefore takes account of all operating income and expenditure, investmentgains and losses and other adjustments, including total return and pension provisions. The boxed sections (headed unrestricted) on page20 is, in effect, the operating result on continuing operations before other gains and losses but including endowment drawdown andunrestricted donations. On this “operating before other gains and losses” basis the College reported a surplus of £36,000 for 2017compared to a surplus of £97,000 for 2016.

This operating before other gains and losses result was achieved after total unrestricted income increased by 11.2% to £12.6 million andexpenditure increased by 11.8% to £12.6 million. The increase in total income was largely attributable to a 27% increase in endowmentincome to £31.1 million and a 12.8% increase in accommodation, catering and conference income to £7.4 million during the year. TheCollege continued to experience strong growth in conference business and as a result was able to report a net surplus of £246,000 inresidences, catering and conferences activity.

The financial environment for the College remains challenging and it will be necessary to address a number of significant financial issues,including the need to refurbish Old Court, in coming years. Undergraduate fees, which had remained unchanged since 2012, will beallowed to increase in line with inflation from 2018. However, the long term outlook for academic fees remains very uncertain. Therefore,without the generous support of our alumni and donors, the College’s financial performance is likely to be under considerable stress overthe next several years.

6


Operating and Financial Reviewfor the year ended 30 June 2017

Benefactions and Donations

The College is very grateful for the many donations and bequests it has received over the past year from Clare members, corporatedonors, twsts and foundations which totalled £5,566,000 including the recovery of Gift Aid. This sum included significant gifts towards therefurbishment of Old Court, the establishment of new student bursanes, and the endowment of postgraduate studentships. The Collegereceived £428,063 in legacy income during the year and the Annual Fund raised a further £430,364. 17% of alumni make an annualdonation to the College; this is one of the highest participation rates in Cambridge and is twice the Oxbridge college average, reflectingthe loyalty of Clare alumni and the College’s sustained investment in development. Total donation income and fund raising costs over thelast five years were:

2017 2016 2015 2014 2013Year ended 30 June

Donations

Lemer Court - -

- 0.1

Old Court 3.9 0.5 0.4 0.4 0.2

Other 29 4i5.6 1.8 3.3 4.5 3.7

Fundraising costs 0.4 0.5 0.5 0.4 0.4

Costs as % of donations 8% 28% 15% 9% 11%

The College has approved a fundraising strategy to launch a new Development Campaign for Clare. The campaign will aim toincrease the overall size of the College’s unrestricted funds to support teaching and bursades by adding at least £25 million to theCollege’s endowment. Following the completion of the feasibility design work for the refurbishment of Old Court and the creation of anew, much larger buttery, the College also aims to raise more than half of the £38 million costs by increasing the overall levels ofdonations to the College from alumni and other individuals, as well as from foundations and corporations.

The College Endowment

The market value of the endowment investment portfolio at 30 June 2017 was £125.5 million (note 9a), with 64% invested in globalequities, 22% in commercial and agricultural property in the UK, 5% in cash deposits and short-dated bonds, 2% in private equity, 2%in alternative assets and 5% in the Cambridge University Endowment Fund. The College’s global equity investments are mainly heldin regional tracker funds with 28% invested in the UK, 24% in the US, 17% in Europe, 15% in Japan, 13% in Emerging Markets, and3% in the Pacific Rim. Foreign currency exposures are not hedged.

The Endowment benefited from strong returns in 2017 having achieved a total retum of 17.5% (2016: 8.8%) net of all investmentmanagement costs. Over the same time period the FTSE All Share index showed a return of 18% and the UK CommercialProperty index showed a return of only 4%. The value of the endowment and total retums over the last five years were:

Yearended30June 2017 2016 2015 2014 2013£m £m £m £m

Investment assets 125.5 106.4 98.0 88.8 81.1

Actual Net Income 3.1 3.1 2.5 2.6 2.8

Gains/(losses) 15.5 5.5 6.2 3.4 9.9

Total retum 18.6 8.6 8.7 6.0 12.7

Endowment drawdown 2.9 2.8 2.8 2.8 2.8

Drawdown as a % of Endowment 3.0% 3.1% 3.5% 3.9% 4.2%

The Endowment is invested on a ‘Total Return” basis. The actual income and gains and losses in the year are taken into a reservefrom which the planned Endowment drawdown, calculated as a percentage of the average value of the Endowment over the threeprevious financial years, is released to the Income and Expenditure Account. The remaining balance of the Total Return, afterdeducting the drawdown, is accumulated within the reserves as set out in note 21 which shows an accumulated surplus of £54.7million on the main Endowment. From 2013 until 2015 the planned Drawdown rate was set at 3.5% of the three year average value ofthe Endowment and in 2016 this percentage was reduced to 3.0% to reflect the expected total retums that will be achieved in future.

The drawdown, which is the amount taken out of the Endowment as spendable income, amounted to £2,910,000 in 2017 compared to thenet investment income actually received of £3,091,000. The realised and unrealised gains on the portfolio amounted to £15,501,000resulting in a positive total return of £18,592,000 as set out in note 3a. The Endowment drawdown of £2,910,000 represented 3.0% of theaverage value of the Endowment over the three preceding years, consistent with the 3.0% target that was set in 2016. The aim is to drawdown sufficient funds each year to support the specific activities designated by the donors, while protecting the real value of theEndowment against inflation and preserving the capital for the future, consistent with the perpetual nature of the College Endowment.

7



Liquidity

The College generated positive cash flow from its operating activities during the year after drawing down cash of £2,910,000 from theEndowment. The operational cash balances available at 30 June 2017 amounted to £18,286,000 (2016: £855,000). The College issued aprivately placed bond with a 35 year maturity in January 2017 to fund the redevelopment of its main graduate accommodation site at StRegis. Work on this project will commence in August 2016 and in anticipation of this major development the College issued £15,000,000of bonds with a fixed coupon of only 2.93% per annum. These cash holdings are deposited in high interest accounts with the College’s twoprincipal banks to obtain beneficial interest rates.

Inflation Swap Investments

In October 2008 the College borrowed £15 million in the form of a conventional loan from Santander and an inflation swap contract withHSBC, structured to provide 40 year index-linked funding. The interest payments on the Santander loan are set at 4.4% per annum andthe HSBC swap contract converts this into a real rate of 1.1% per annum. The annual inflation adjustment to the value of the loan onrepayment is capped at a rate of 7%. Through this structure the College was able to take advantage of its ability to invest over the verylong term at a time of very low real interest rates. The £15 million is invested in global equity tracker funds and will be left to accumulateover the 40 year period in a ring-fenced fund, over which HSBC has a security charge to cover the inflation liability. The liability toSantander for the conventional loan of £15 million is secured on the College’s outlying operational properties valued at £35 million. Duringthe year to 30 June 2017 the 2048 Fund generated a total retum of 22.1% gross and 18.5% net of the increase in inflation-linked liabilitiesand interest payments. The resulting surplus of £4,623,000 was added to the Total Retum reserves as set out in Note 21. The cumulativeinflation swap investment net unapplied Total Retum increased to £11,492,000 at 30 June 2017 (note 21).

During the first period of the 40 year inflation swap (from October 2008 to June 2017) the level of RPI has risen by 24.9%, with the resultthat the College’s liability to Santander and HSBC at June 2017 has increased to £18.7 million. At June 2017 the market value of globalequity tracker fund investments held in the 2048 Fund amounted to £29.2 million and the outstanding cash balance stood at £1.2 million.The total value of inflation swap investments amounted to £30.4 million at 30 June 2017.

The complex financial structure of the inflation linked swap, and changes to accounting standards, has made it necessary to value theswap on a mark to market basis in the financial statements, resulting in a significant increase in liabilities and a reduction in reserves. Theestimated value of the inflation linked swap liability based on derivatives valuations as of 30 June 2017 shows a break cost of £9.5 million.As at 30 June 2017 a provision for £9.5 million has been included as a liability in the Balance Sheet (see note 16). However, at thepresent time the College has no intention to unwind the inflation swap facility.

Based on historical experience, the Goveming Body considered that this investment in global equity tracker funds should make a positivereal return of more than 4% per annum compound, consistent with the performance of global equity markets over each 40 year periodsince 1900. The Governing Body considered that this positive return would represent a significant addition to the College’s Endowment,helping to achieve the goal of financial independence in the long term, and that it outweighed the risks involved. In the event that changedeconomic circumstances make it appropriate, the College has the right to terminate the loan with Santander and the inflation swap withHSBC early at the prevailing cost of termination.

8



Capital Expenditure and Buildings Refurbishment

In 2016-17 the College constrained refurbishment activity to relatively small scale projects in an effort to conserve cash flow ahead of thecommencement of the Old Court project and the redevelopment of St Regis in 2018. Capital expenditure relating to buildings amounted to£1,403,000 and a further £66,000 of equipment capital expenditure was also made. These figures include £459,000 of expenditure ondesign work in anticipation of the restoration of Old Court and a further £172,000 on feasibility and design work related to theredevelopment of St Regis. The planning application for the redevelopment of St Regis was made in July 2017 and for the restoration ofOld Court will be made in the final quarter of the year. The planning application for the Old Court work will include the restoration of thestonework and roof, the refurbishment of the public spaces, the creation of additional en suite facilities, and the construction of a newenlarged buttery space and cafe. It is now anticipated that the entire project to restore Old Court will cost approximately £38 million.

The cost of repairing the College’s historic buildings represents a substantial financial commitment and the Governing Bodyrecognises the need to set aside adequate sums to ensure that the historic buildings are properly maintained over the long term. Aprofessional survey of the condition of all College buildings has confirmed that more than £2.5 million must be committed each year tothe maintenance of the College’s historic fabric and buildings. The Finance Committee has approved a longer term target to spend asum equal to 1.5% of the insurance replacement value of the College’s operational buildings each year on the repair and maintenanceof the operational estate. The insurance replacement value of the College’s operational buildings increased to £189 million as of 30June 2017 and the value of fixed asset investment on building is expected to increase to more than £2.8 million in coming years.

Reserves Policy

The College takes a long-term view in the management of the investment portfolio using a total return basis for deciding on theappropriate amount to draw down each year. This is intended to protect the value of the investment portfolio in real terms and, as aresult, to strike an equitable balance between the interests of the current members of the College and those of future generations. AtJune 2017 the College had £78.3 million in restricted reserves and unrestricted reserves of £183.9 million of which £133.4 million isrepresented by fixed assets

Any new donations or bequests received during the year are added to unrestricted funds, unless the donor has made it clear that thefunds are to be spent on a specific project.

Risk Assessment

As part of its supervision of the College’s activities, the Finance Committee identifies and considers the major risks to which theCollege is exposed, and establishes procedures to manage those risks. Although risks can be identified and managed, the College isexposed to a number of risks which cannot be covered by insurance or mitigated in other ways. The age of the historic buildingsmeans that problems can occur without warning and at considerable expense.

Public Benefit as a Charity

The College has met its responsibilities regarding public benefit by providing, in conjunction with the University, an education for some679 undergraduate and graduate students which is recognised internationally as being of the highest standard. This educationdevelops students academically and advances their leadership qualities and interpersonal skills, preparing them to play full andeffective roles in society. In particular, the College provides:

- teaching facilities and individual or small-group supervision, as well as pastoral, administrative, and academic supportthrough its tutorial and graduate mentoring systems;

- social, cultural, musical, recreational, and sporting facilities to enable each of its students to realise as much aspossible of their academic and personal potential whilst studying at the College; and

- specialist choral musical education for those students in the College’s internationally renowned choir.

The College advances research through:

- providing Research Fellowships to outstanding academics at the early stages of their careers, enabling them to develop andfocus on their research in this formative period before they undertake the full teaching and administrative duties of anacademic post;

- the employment of College Teaching Officers who, in addition to their role as Directors of Studies and supervisors ofundergraduate students, maintain important research interests within the University;

- supporting research work pursued by Fellows through promoting interaction across disciplines, providing facilities andproviding grants for national and international conferences, research trips and research materials;

- encouraging visits from outstanding academics from abroad; and- encouraging the dissemination of research undertaken by members of the College through the publication of papers in

academic journals or other suitable means.

9



The College maintains an extensive Library (including important special collections), that provides a valuable resource for studentsand Fellows of the College, for members of other Colleges and the University more widely, and for external scholars and researchers.

The Colleges students are the primary beneficiaries of its educational activities. Students are selected in an open application process,based solely on academic merit, and hence form a section of the public that is not unreasonably restricted. The College operates aneeds-blind admissions process and provides a significant level of bursary support to students who might otherwise be deterred fromapplying by financial concerns. The educational benefits provided by the College extend to students from other Colleges, to visitingschoolchildren, and to alumni who have the opportunity to attend educational events at the College. The College also supports anextensive access and outreach programme to primary and secondary schools in the London Boroughs of Tower Hamlets andHackney, and also in Coventry and Warwickshire, through which it aims to raise the aspirations of younger people in these parts of thecountry. Furthermore, the public benefit of the provision of high-quality education goes beyond the benefits to the students themselves.Whether through the vocational skills or the broader intellectual development acquired at the College, its students are able to makevaluable and distinctive contributions in the public sphere.

The research advanced by the College is disseminated through publications and oral presentations. Its results are therefore publiclyavailable and constitute a clear public benefit. The beneficiaries include the international community of scholars in the fieldsconcerned, and the wider public who benefit through the intellectual, economic, civic and cultural development that is facilitatedthrough the dissemination of high-quality research.

The College withinthe Community

The College makes a particular point of sharing its facilities with the local community. The College’s sports grounds on Bentley Roadand the Boathouse on the Cam are used extensively by cricket, soccer and rowing clubs within the city.

The College is committed to reducing its carbon, water and waste footprint. The College is participating in the Carbon ReductionCommitment scheme, and is actively promoting environmental awareness among Fellows, students, and staff. In 2017 Clare was oneof only three colleges in Cambridge to receive a Platinum award in the NUS Green Impact Award scheme.

Lord A S Grabiner, Master Mr P Warren, Bursar

I November2017

10


Statement of Corporate Governancefor the year ended 30 June 2017

1. The following statement is provided by the Trustees of the College to enable readers of the financial statements to obtain abetter understanding of the arrangements in the College for the management of its resources and for its audit. The Trusteesof the College are all members of the Council and Finance Committee.

2. The College is a registered charity (registered number 1137531) and is subject to regulation by the Charity Commission forEngland and Wales.

3. The Governing Body, which consists of the Master, the Fellows in Classes A, B, C, D and E, and four Student Members,holds at least three meetings each year. The Council, consisting of the Master, the Senior Tutor and ten Fellows elected bythe Goveming Body at its annual meeting, together with two Student Members, is responsible for the administration of theCollege in all matters not specifically assigned to the Governing Body or the Finance Committee. The Finance Committee,consisting of the Master, the Bursar, the Senior Tutor and seven Fellows elected by the Governing Body at its annualmeeting, together with two Student Members, oversees the management of the College estates and investments andadministers the revenues in accordance with the College Statutes, under the overall direction of the Governing Body. Sincethe Council and the Finance Committee exercise general control and management of the College, their members are thetrustees of the charity and are responsible for ensuring compliance with charity law.

4. The Governing Body, Council, and Finance Committee are advised in carrying out their duties by a number of Committeesincluding the Audit Committee, Investments Committee, Stipends and Salaries Committee, and Estates Committee.Membership of these Committees is set out on page 4. The Audit Committee includes two Clare alumni with extensiveexperience in professional auditing. While the Investments Committee is chaired by the Master and serviced by the Bursar,most of the other members are seasoned City professionals with extensive experience in managing global investments. TheStipends and Salaries Committee advises on the remuneration and benefits of Fellows and staff; the members are notemployed by the College and as such are able to make a disinterested assessment of the College’s remuneration policies.The Estates Committee is chaired by a member of the Finance Committee. It advises on the effective care and maintenanceof all the College buildings and oversees the environmental aspects of the College’s work.

5. The key officers of the College are the Master, Senior Tutor and Bursar. These officers meet each week during term, togetherwith the President of the Fellowship, the Dean of Chapel and the Academic Dean, to review the business of the College.

6. ft is the duty of the Audit Committee to keep under review the effectiveness of the College’s internal systems of financial andother controls; to advise on the appointment of external auditors; to consider reports submitted by the auditors; to monitor thenplementation of recommendations made by the auditors; and to make an annual report to Council and the FinanceCommittee.

7. There is a Register of Interests for members of the Finance Committee and Council, including all the senior officers.Declarations of interest are made systematically at meetings.

8. The College’s Members of the Governing Body, Council and Finance Committee during the year ended 30 June 2017 are setout on page 3.

11


Statement of Internal Controlfor the year ended 30 June 2017

The Finance Committee is responsible for maintaining a sound system of internal control that supports the achievement of theCollege’s policies, aims and objectives, while safeguarding funds and assets for which the Governing Body is responsible, inaccordance with the College Statutes.

2. The system of internal control is designed to manage, rather than eliminate, the risk of failure to achieve College policies,aims and objectives; it therefore provides reasonable, but not absolute, assurance of effectiveness. The system of internalcontrol is designed to identify the principal risks to achieving those policies, aims and objectives, to evaluate the nature andextent of those risks, and to manage them efficienfly, effectively, and economically. This process was in place for the yearended 30 June 2017, and up to the date of approval of the financial statements.

3. The Members of the Finance Committee and Council are responsible for reviewing the effectiveness of the system of internalcontrol. The following processes have been established:

a) The Finance Committee meets six times per year.

b) The Council meets seven times per year.

c) The Audit Committee normally meets twice each year. It receives reports from the external auditors, including theirobservations on the College’s system of internal control and risk management, together with recommendations forimprovement. In 2014 an internal audit group, with input from an external firm of auditors, was created to reviewdepartmental policies and procedures. Reports from this group are submitted to the Audit and Finance Committees forfurther review.

d) The Members of the Finance Committee and Council, as Trustees of the College, review the effectiveness of thesystem of internal control as informed by the work of the Audit Committee, Bursar and College officers, who haveresponsibility for the development and maintenance of the internal control framework, and by comments made byexternal auditors in their management letter and other reports.

e) The Finance Committee compares the College’s costs and operational performance against the key performanceindicators produced for all Cambridge Colleges to identify those areas where improvements can best be made.

4. The Finance Committee and the Audit Committee review the Risk Register which is checked and updated each year by thesenior administrative staff and which is considered in detail by the College officers.

12


Statement of Responsibilities of the Trustees of the Collegefor the year ended 30 June 2017

1. The Members of the Finance Committee and Council, as Trustees of the College, are responsible for preparing the financialstatements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally AcceptedAccounting Practice).

2. In accordance with the College Statutes, the Finance Committee is responsible for the management of the College’s estatesand the administration of the College’s revenues, subject to the overall control of the Trustees of the College. The FinanceCommittee is responsible for ensuring that there is an effective system of intemal control and that accounting records areproperly kept.

3. The College Statutes and the Statutes and Ordinances of the University of Cambridge require the Trustees of the College toprepare financial statements for each financial year, which give a true and fair view of the state of affairs of the College and ofthe surplus or deficit of the College for that year. In preparing those financial statements the Trustees of the College arerequired to:

- select suitable accounting policies and apply them consistently; make judgements and estimates that are reasonable andprudent;

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

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the College willcontinue in operation.

4. The Trustees of the College are responsible for keeping proper accounting records which disclose with reasonable accuracy atany time the financial position of the College, and enables them to ensure that the financial statements comply with the Statutesof the University of Cambridge. They have general responsibilities for taking such steps as are reasonablyopen to them to safeguard the assets of the College and to prevent and detect fraud and other irregularities.

5. The Trustees of the College are responsible for the maintenance and integrity of the charity and financial information includedon the College’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differfrom legislation in other jurisdictions.

13


Independent auditor’s report to the Trustees of Clare College

Opinion

We have audited the financial statements of Clare College (the College) for the year ended 30 June 2017 which comprise theconsolidated statement of comprehensive income and expenditure, the consolidated statement of changed in reserves, the consolidatedbalance sheet, the consolidated cash flow statement and notes to the financial statements, including a summary of significant accountingpolicies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom AccountingStandards, including Financial Reporting Standard 102 the Financial Reporting Standard applicable in the UK and Republic of Ireland(United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements;

- give a true and fair view of the state of the Colleges affairs as at 30 June 2017 and of its incoming resources and applicationof resources for the year then ended;

- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;- have been prepared in accordance with the requirements of the Charities Act 2011 and the Statutes of the University of

Cambridge; and- the contribution due from the College to the University has been correctly computed as advised in the provisional assessment

by the University of Cambridge and in accordance with the provisions of Statute GIl, of the University of Cambridge.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISA5 (UK)) and applicable law. Our responsibilitiesunder those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.We are independent of the College in accordance with the ethical requirements that are relevant to our audit of the financial statements inthe UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

- the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or- the trustees have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt

about the College’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve monthsfrom the date when the financial statements are authorised for issue.

Other information

The other information comprises the information included in the report of the trustees other than the financial statements and our auditor’sreport thereon. The trustees are responsible for the other information. Our opinion on the financial statements does not cover the otherinformation and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusionthereon.

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

We have nothing to report in this regard.

Matters on which we are required to report by exception

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

- The information given in the financial statements is inconsistent in any material respect with the report of the Trustees; or- sufficient accounting records have not been kept; or- the financial statements are not in agreement with the accounting records; or- we have not received all the information and explanations we require for our audit.

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement set out on page 13. the trustees are responsible for the preparation ofthe financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine isnecessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

14


Auditor’s responsibilities for the audit of the financial statements

We have been appointed as auditor under section 151 of the Charities Act 2011 and report in accordance with the Act and relevantregulations made or having effect thereunder. Our objectives are to obtain reasonable assurance about whether the financial statementsas a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) willalways detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis ofthese financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s websiteat:responsibilities-for. This description forms part of our auditor’s report.

Use of our report

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

PETERS ELWORTHY & MOOREChartered Accountants and Statutory Auditors

Salisbury HouseStation RoadCambridgeCB1 2LADate: 21 November 2017

15


Statement of Principal Accounting Policiesfor the year ended 30 June 2017

Basis of preparationThe financial statements have been prepared in accordance with the provisions of the Statutes of the College and of the University ofCambridge and applicable United Kingdom accounting standards. In addition, the financial statements comply with the Statement ofRecommended Practice: Accounting for Further and Higher Education (the SORP).

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

Basis of accounting

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

Basis of consolidation

The consolidated financial statements include the College and its subsidiary undertakings. Details of the subsidiary undertakingsincluded are set out in note 10. Intra-group balances are eliminated on consolidation.The consolidated financial statements do not include the activities of student societies as these are separate bodies in which theCollege has no financial interest and over whose policy decisions it has no control.

Recognition of income

Academic Fees

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

Donations and endowmentsNon exchange transactions without performance related conditions are donations and endowments. Donations and endowments withdonor imposed restrictions are recognised within the Statement of Comprehensive Income and Expenditure when the College isentitled to the income. Income is retained within restricted reserves until such time that it is utilised in line with such restrictions atwhich point the income is released to general reserves through a reserve transfer.Donations and endowments with restrictions are classified as restricted reserves with additional disclosure provided within the notesto the accounts.

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

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

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

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

4.Restncted permanent endowments - the donor has specified that the fund is to be permanently invested to generate anincome stream to be applied to a particular objective.

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

Investment income and change in value of investment assets

Investment income and change in value of investment assets is recorded in income in the year in which it arises and as eitherrestricted or unrestricted income according to the terms or other restrictions applied to the individual endowment fund.

Total returnThe College has adopted a total return policy where total return means investment return in terms of both income, whether received oraccrued, and capital appreciation, whether realised or unrealised. The Finance Committee may appropriate and distribute forexpenditure so much of the fair value of the endowment fund as it in its absolute discretion considers prudent,having regard to the availability of any surplus income, the total return achieved and reasonably to be expected in the long-term of theendowment.

Other income

hcome is received from a range of activities including residences, catering, and conferences. Income is recognised on the exchangeof the relevant services.

16



Cambridge Bursary Scheme

In 2016-17, payment of the Cambridge Bursaries to eligible students was made directly by the Student Loans Company (SLC). As aconsequence, Cambridge University reimbursed the SLC for the full amount and each College paid their portion (based on their owneligible students) to the University.

However, to remain consistent with previous years’ presentation as well as the system agreed for 2017/18 (where the College paysCambridge Bursaries to eligible students, via the SLC, and receives a contribution from the University), for 2016/17 the College hasshown the gross payment made to eligible students and a contribution from the University as Income under ‘Academic Fees andCharges’, although strictly speaking this was not a College transaction for this year.

The net payment of £54,000 is shown within the Consolidated Statement of Comprehensive Income and Expenditure as follows:

Income (see note 1) £135,000

Expenditure £189,000

Foreign currency translation

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

FixedAssetsLand and buildings

In accordance with FRSO2, the land and buildings held for operational purposes are stated at depreciated replacement cost, asdetermined by professional valuers. A full revaluation of all College property assets was conducted by Gerald Eve as at 30 June 2014,being the transition date to the 2015 RCCA.

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

When buildings are acquired with the aid of restricted bequests or donations, the policy for accounting for that income is as in the noteabove under Income Recognition, donations and endowments.

Finance costs that are directly attributable to the construction of buildings are capitalised as part of the cost of those assets.A review for impairment of a fixed asset is carried out if events or changes in circumstances indicate that the carrying amount of thefixed asset may not be recoverable.Costs incurred in relation to land and buildings after initial purchase or construction, and prior to valuation, are capitalised to the extentthat they increase the expected future benefits to the College.

Maintenance and renewal of premises

The College has a five-year rolling maintenance plan, which is reviewed on an annual basis. The cost of routine maintenance ischarged to the Statement of Comprehensive Income and Expenditure as it is incurred.

Furniture, fittings and equipment

Furniture, fittings and equipment costing less than £3,000 per individual item or group of related items is written off in the year ofacquisition. All other assets are capitalised and depreciated over their expected useful life as follows:

Boiler room and chapel 4% per annum

Furniture and fittings 10% per annum

Motor vehicles and general equipment 20% per annum

Computer equipment 20% and 25% per annumWhen fumiture, fittings and equipment are acquired with the aid of restricted bequests or donations, the policy for accounting for thatincome is as in the note above under Income Recognition, donations and endowments.

Heritage assetsThe College holds and conserves a numbers of collections, exhibits, artefacts and other assets of historical, artistic and scientificimportance. Heritage assets acquired before 1 July 1999 have not been capitalised since reliable estimates of cost or value are notavailable on a cost-benefit basis. Acquisitions since 1 July 1999 have been capitalised at cost, or in the case of donated assets, atexpert valuation on receipt. Heritage assets are not depreciated since their long economic life and high residual value mean that anydepreciation would not be material.

17


Statement of Principal Accounting Policiesforthe year ended 30 June 2017

histments

Investments are included in the balance sheet at mid-market value. Investments that ate not listed on a recognised stock exchangeare carried at historical cost less any provision for impairment in their value. Investment properties are valued annually based on openmarket values provided by third party valuers.

StocksStocks are valued at the lower of cost and net realisable value.

Provisions

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

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

A contingent asset arises where an event has taken place that gives the College a possible asset whose existence will only beconfirmed by the occurrence or otherwise of uncertain future events not wholly within the control of the College.Contingent assets and liabilities are not recognised in the balance sheet but are disclosed in the notes.

Taxation

The College is a registered charity (number 1137531) and also a charity within the meaning of Section 506 (1) of the Taxes Act 1988.Accordingly, the College is exempt from taxation in respect of income or capital gains received within the categories covered bySection 505 of the Taxes Act 1988 or Section 256 of the Taxation of Chargeable Gains Act 1992 to the extent that such income orgains are applied to exclusively charitable purposes. The College receives no similar exemption in respect of Value Added Tax.

Contribution under Statute G, IIThe College is liable to be assessed for Contribution under the provisions of Statute G, II of the University of Cambridge. Contributionis used to fund grants to colleges from the Colleges’ Fund. The liability for the year is advised to the College by the University basedon an assessable amount derived from the value of the College’s assets as at the end of the previous financial year.

Pension schemesThe College participates in the Universities Superannuation Scheme (the scheme) for all academic employees. Throughout thecurrent and preceding periods, the scheme was a defined benefit only pension scheme until 31 March 2016 which was contracted outof the State Second Pension (S2P). The assets of the scheme are held in a separate trustee-administered fund. Because of themutual nature of the scheme, the scheme’s assets are not hypothecated to individual institutions and a scheme-wide contribution rateis set. The College is therefore exposed to actuarial risks associated with other institutions’ employees and is unable to identify itsshare of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore, as required bySection 28 of FRS 102 ‘Employee benefits’, accounts for the scheme as if it were a defined contribution scheme. As a result, theamount charged to the Statement of Comprehensive income and Expenditure represents the contributions payable to the scheme, inrespect of the accounting period. The College has entered into an agreement (the Recovery Plan that determines how each employerwithin the scheme will fund the overall deficit) and the College recognises a liability for the contributions payable that arise from theagreement to the extent that they relate to the deficit and the resulting expense in the Statement of Comprehensive Income andExpenditure.

FRS1O2 makes the distinction between a Group Plan and a multi-employer scheme. A Group Plan consists of a collection of entitiesunder common control typically with a sponsoring employer. A multi-employer scheme is a scheme not under common control andrepresents (typically) an industry-wide scheme such as that provided by USS. The accounting for a multi-employer scheme where theemployer has entered into an agreement with the scheme that determines how the employer will fund a deficit results in therecognition of a liability for the contributions payable that arise from the agreement (to the extent that they relate to the deficit) and theresulting expense is recognised as profit or loss. The trustees are satisfied that the scheme provided by USS meets the definition of amulti-employer scheme and has therefore recognised the discounted fair value of the contractual contributions under the funding planin existence at the date of approving the financial statements.

The College also operates a defined contribution pension scheme, mainly for permanent non-academic employees, which iscontracted into the State Second Pension (S2P), and also uses the govemment established National Employment Savings Trust(NEST) scheme for temporary staff. The assets of both schemes are held in separate trustee-administered funds. As a result, theamount charged to the Statement of Comprehensive Income and Expenditure Account represents the contributions payable to theschemes in respect of the accounting period.

18



Employment benefitsShort term employment benefits such as salaries and compensated absences are recognised as an expense in the year in which theemployees render service to the College. Any unused benefits are accwed and measured as the additional amount the Collegeexpects to pay as a result of the unused entitlement.

Reserves

Reserves are allocated between restricted and unrestricted reserves. Endowment reserves include balances which, in respect ofendowment to the College, are held as permanent funds, which the College must hold to perpetuity.Restricted reserves include balances in respect of which the donor has designated a specific purpose and therefore the College isrestricted in the use of these funds.

19

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20


Statement of Changes in Reserves

Income and expenditure reserveNotes Unrestricted Restricted Endowment

£000 £000 £000

176,600 24,200 38,159

6,823 8,167 6,220

income and expenditure reserveNotes Unrestricted Restricted Endowment

£000 £000 £000

173,381 22,712 35,101

2,507 2561 2,697

Inflation Swap

£000

(1,437)

4,623

Total

£000

237,522

25,832

459 (459)

t274) 274

Balance at 1 July 2016

Surplus/(deficit) from income and expenditure statement

Other comprehensive income

Release of restricted capital funds spent in year

Transfers between reserves

Balance at 30 June 2017

Balance at 1 July 2015

Surplus/(deficit) from income and expenditure statement

Other comprehensive income

Release of restricted capital funds spent in year

Transfers between reserves

Balance at 30 June 2016

The notes on pages 24 to 36 form part of the financial statements

(1,166) (1,166)

183,882 31,635 44,652 2,019

Inflation Swap

£000

(395)

1,237

262,188

Total

£000

230,799

9,002

712 (712) -

- (361) 361

(2,279) (2,279)

176,600 24,200 38,159 (1,437) 237,522

21


Balance Sheet

Notes Group College Group College2017 2017 2016 2016

£‘OOO £‘OOO £‘OOO £000Noncurrent AssetsFixed assets 8 133453 133427 134128 134094Heritage assets 8a 62 62 62 62Investments 9a 125,495 125,495 106,368 106,368Inflation swap investments 9b 30,430 30,430 24,973 24,973

289,440 289,414 265,531 265497

Current assetsStock 10 232 232 247 247Trade and other receivables 11 865 1,487 784 1,158Short term investments 12 14,000 14,000 - -

Cash and cash equivalents 13 4,286 3,063 870 2

19,383 18,782 1,901 1,407Creditors: amounts falling due within one year 14 (3,166) (2,558) (3255) (2,761)

Netcurrentassets 16,217 16,224 (1,354) (1,354)

Total assets less current liabilities 305,657 305,638 264,177 264,143

Creditors amounts falling due after more than oneyear 15 (33,734) (33,734) (18,102) (18,102)

ProvisionsInflation swap provisions 16 (9,474) (9,474) (8,308) (8,308)Pension provisions 17 (261) (261) (245) (245)

TOTAL NET ASSETS 262,188 262,169 237,522 237,488

Restricted reservesIncome and expenditure reserve - endowment reserve 19 44,652 44,652 38,159 38,159Income and expenditure reserve - restricted reserve 20 31,635 31,635 24,200 24,200Income arid expenditure reserve - inflation swap 15 2,019 2,019 (1,437) (1,437)

78,306 78,306 60,922 60,922Unrestricted reservesIncome and expenditure reserve - unrestricted reserve 183,882 183,863 176,600 176,566

TOTAL RESERVES 262,188 262,169 237,522 237,488

The financial statements on pages 19 to 34 were approved by the Governing Body on 1 November 2017 and signedon ther behalf by:

Lord AS Grabiner, Master

Pc,iJo ckWQMr P Warren, Bursar


22


Consolidated Cash Flow Statement

Notes 2017 2016£‘OOO £‘OOO

Net cash inflow from operating activities 22 5,856 3,173

Cash flows from investing activities 23 (2,590) (2,982)

Cash flows from financing activities 24 165 (432)

Increaselfdecrease) in cash in the year 3,431 (241)

Cash at beginning of the year 855 1,096

Cash at end of the year 25 4,286 855


23


Notes to the financial statements

I Academic fees and charges2017 2016

£‘OOO £‘OOOFee income received at the Regulated 1,960 1,927Fee income received at the Unregulated 292 263Fee income received at the Graduate rate 630 569Cambridge Bursary Scheme 135 174

3,017 2,933

2 Income from residences,catering and conferences 2017 2016£‘OOO £‘OOO

Accommodation College members 2,722 2,640Conferences 1,655 1,477

Catering College members 989 627Conferences 2,076 1,855

7,442 6,599

3 Endowment return and investment income 2017 2016£000 £000

3a AnalysisActual income from:Land and buildings 998 722Quoted equity securities 1,774 1,999Fixed interest securities 306 379Other interest receivable 14 38

3,091 3,138

Gains on endowment assets:Land and buildings 995 711Quoted and other securities and cash 14,641 4,938

Investment management costs (note 3b) (135) (204)

Total return on investments 18,592 8,583

Total return transferred to income and expenditure reserve 2,910 2,849Unapplied total return for the year includedwithin Statement of Comprehensive Income and 15,683 5,734

Total return on investments 18,592 8,583

The endowment and fixed assets investments are accounted for on a total return basis. The total actualincome and gains in the year are taken to a reserve, from which the planned endowment drawdown is releasedto the income and expenditure account. The remaining balance of the total return, after deducting thedrawdown, is accumulated within the reserves, as set out in note 21.

3b Investment management costs

Land and buildings 17 39Quoted securities 22 12Other investments 96 153

Total 135 204

24



2017 2016£‘OOO £000

3c Total return on inflation swap contracts

Actual income from:Quoted securities 120 276Other interest receivable 134 93

254 369

Gains on inflation swap asset: 5,266 1,323

Inflation-linked amount due to HSBC (note 15) (631) (235)

Interest and fees (note 3d) (266) (220)

Total return on inflation swap contracts (note 21) 4,623 1,237

The inflation swap contracts are accounted for on a total return basis. The total actual income andgains/losses in the year is accumulated within the reserves, as set out in note 21. There is no drawdownpermitted under the terms of the inflation swap.

3d Interest and fees on inflation swap investments

Interest paid to HSBC (204) (197)Interest paid to Santander (666) (668)

(870) (865)

Interest received from HSBC 666 668

(204) (197)Fees on inflation swap investments (62) (23)

(266) (220)

Interest paid to Santander and to/from HSBC is calculated on the £15 million loan and inflation swaprepayable in 2048 (note 15).

25


Notes to the financial statements2017 2016

£‘OOO £0004 Education expenditure

Teaching 2654 2,419Tutorial 972 871Admissions 981 1009Research 691 573Scholarships and awards 577 371Other educational facilities 232 256

6,107 5,499

5 Residences,catering and conferences expenditure

Accommodation College members 2,923 2,765Conferences 1,755 1,719

Catering College members 980 805Conferences 1,537 1,260

7,196 6,549

6a Analysis of 2017 expenditure by activityStaff costs Other

(note 7) expenses Depreciation 2017£‘OOO £000 £000 £000

Education 2,963 2,093 1,051 6,107Residences,catering and conferences 3,073 2,473 1,650 7,196Other 55 1,281 66 1,402Contribution under statute C, Il

____________

64

_____________

646,091 5,911 2,767 14,769

6b Analysis of 2016 expenditure by activityStaff costs Other

(note 7) expenses Depreciation 2016£000 £000 £000 £000

Education 2,779 1,675 1,045 5,499Residences,catenng and conferences 2,759 2,124 1,666 6,549Other - 911 66 977Contribution under statute C, II - 62 0 62

5,538 4,772 2,777 13,087

26



6c Auditors remuneration2017 2016£000 £000

Other operating expenses include:Audit fees payable to the College’s external auditors (inclusive of VAT) 25 24Other fees payable to the College’s external auditors (inclusive of VAT) 19 -

44 24

7 Staff costsOther Non-

College Fellows academic academic 2017 2016£‘OOO £‘OOO £‘OOO £‘OOO

Emoluments 1,021 263 3,896 5,180 4,727Social security costs 111 - 299 410 362Other pension costs (see note 25) 160 - 341 501 449

1,292 263 4536 6,091 5,538

Average numbers:College Fellows who are also members of the Governing Body, 104 114of whom 71 were remunerated (2016 :70)Non-academic staff: full time equivalents 129 121

Total 233 235

No College officer or employee, including the Head of House, received emoluments of over £100,000.2017 2016

Key management personnel £‘OOO £000

Key management personnel being the Master, Bursar and Senior Tutor 195 181

During the year, emoluments paid to Trustees in their capacity as College Officers were:2017 2016£000 £‘OOO

Aggregate Emoluments 413 481

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8 Tangible Fixed Assets

Land& Assets inGroup Buildings construction Equipment 2017 2016

£000 £000 £000 £000 £000CostAtstartof year 137,129 1,437 3,037 141,603 138,219Additions and improvements at cost 773 630 66 1,469 3,414Disposals at cost (401) - (11) (412) (30)Transferred from investment properties 1,000 - - 1,000 -

Atend of year 138,501 2,067 3,092 143,661 141,603

DepreciationAt start of year 5,094 - 2,381 7,475 4,703Chargefortheyear 2,557 - 210 2,767 2,802Eliminated on disposals (24) - (10) (34) -

At end of year 7,627 - 2,581 10,208 7,475

Net book valueAt end of year 130,873 2,067 512 133,453

Atstartofyear 132,035 1437 656 134,128

Land & Assets inCollege buildings construction Equipment 2017 2016

£000 £000 £000 £000 £000CostAtstartofyear 137,095 1,437 3,037 141,569 138,185Additions and improvements at cost 781 630 66 1,477 3,414Disposals at coat (401) - (11) (412) (30)Transferred from investment properties 1,000 - - 1,000 -

At end of year 138,475 2,067 3,092 143,635 141,569

DepreciationAt start of year 5,094 - 2,381 7,475 4,703Chargefortheyear 2,557 - 210 2,767 2,802Eliminated on disposals (24) - (10) (34) (30)

Atendofyear 7,627 - 2,581 10,208 7,475

Net book valueAtendofyear 130,847 2,067 512 133,427

Atstartof year 132,001 1,437 656 134,094

The insured value of all the College’s operational buildings as at 30 June 2017 was £189 million (2016 : £185 million).

The Santander loan, as set out in note 17, is secured against certain outlying properties with a market value of £24 million as at October 2008.

28



8a Heritage Assets

The College holds and conserves certain collections, artifacts and other assets of historical, artistic or scientificimportance. As stated in the statement of principal accounting policies, heritage assets acquired since 1999 have beencapitalised. However, the assets held in the College’s collections were acquired prior to this date. As reliable estimatesof cost or valuation are not available for these on a cost-benefit basis, they have not been capitalised. As a result thetotal included in the balance sheet is partial.

Amounts for the current and previous years were as follows:2017 2013-2016

£‘OOO £‘OOOAcquistions purchased with specific donations -

Acquisitions purchased with College funds 12

Total cost of acquisitions purchased 12

Value of acquistions by donation

Total acquisitions capitalised 62 62

9a InvestmentsSecurities and

cash Property 2017 2016£‘OOO £‘OOO £‘OOO £‘OOO

Market value at start of year 81,356 25,012 106,368 98,021Additions 7,917 2,846 10,763 18,284Transferred to fixed assets 0 (1,000) (1,000) 0Disposal (6,173) (983) (7,157) (9,101)Gain/(loss) 14,000 979 14,979 5,464Increase in cash balances held at fund managers 1,541 0 1,541 (6,300)

Market value at end of year 98,641 26,854 125,495 106,368

Represented by:Property investment 26,854 25,012Quoted securities - equities 80,703 65,519Quoted securities - fixed interest 945 2,302Quoted - CUEF 6,249 4,982Unquoted securities - equities 2,526 1,953Alternative assets 2,509 2431Cash held for reinvestment 5,709 4,169

Total 125,495 106,368

29



9b Inflation swap investments

Securities Cash 2017 2016£000 £000 £‘OOO £000

Market value at start of year 22,189 2,784 24,973 23,500Additions 4,182 - 4182 10,981Disposal (2,202) - (2,202) (7,888)Gain/(loss) 5,070 - 5,070 858Increase in cash balances held at fund managers - (1,593) (1,593) (2,478)

Market value at end of year 29,239 1,191 30,430 24,973

Represented by:Quoted securities - equities 29,239 22.189Cash held for reinvestment 1,191 2,784

Market value at end of year 30,430 24,973

The inflation swap investments are secured against the inflation-linked liability payable to HSBC in 2048, as set out in note 15.

9c Principal Subsidiary Undertakings

Country of ProportionIncorporation and Cost Class of of sharesOperation £ shares held

Clare College Ltd United Kingdom 20,001 Ordinary 100%Clare College Conferences Ltd United Kingdom 1 Ordinary 100%

Clare College Ltd was incorporated in 1994. The principal activity of the company is that of design and construction of buildings.

Clare College Conferences Ltd was incorporated on 29 Febwary 2012. The principal activity of the company is

that of conference accomodation and catering for non-educational clients.

10 Stocks 2017 2016

Group and college £‘OOO £‘OOO

Goods for resale 230 245Other stocks 2 2

Total 232 247

30



11 Trade and other receivables Group College Group College2017 2017 2016 2016

£‘OOO £000 £000 £000

Members of the College 115 115 76 76Other receivables 315 95 435 214Amounts due from subsidiary undertakings - 842 - 595Prepayments and accrued income 435 435 273 273

865 1,487 784 1,158

12 Short term investments Group College Group College2017 2017 2016 2016£000 £000 £000 £000

Bank deposits 14,000 14,000 - -

14,000 14,000 - -

13 Cash at bank and in hand Group College Group College2017 2017 2016 2016

£000 £000 £‘OOO £000

Current accounts 4,281 3,058 868 -

Cashinhand 5 5 2 24,286 3,063 870 2

14 Creditors: amounts falling due within one year Group College Group College2017 2017 2016 2016£000 £000 £000 £000

Bank overdraft 0 0 15 15Trade creditors 441 424 391 377Members of the College 186 186 110 110College student societies 159 159 170 170Contribution to Colleges’ fund 64 64 69 69Other creditors 279 276 383 383Amounts due to subsidiary undertakings - - - -

Accruals and deferred income 2,036 1449 2,117 1,6373,166 2,558 3,255 2,761

The College holds investments of £118,000 (2016: £136,000) on behalf of student societies which is included within the £159,000 (2016: £170,000)owed to College student societies.

31



15 Creditors: amounts falling due after more than one year 2017 2016Group and college £‘OOO £‘OOO

Loan repayable in 2048 to Santander 15,000 15,000Inflation-linked amount due to HSBC 3,734 3,102Other loans 15,000 0

33,734 18,102

On October 2008 the College entered into a contract with Santander to borrow £15 million at 4.4% repayable in full in October 2048 andwith HSBC for an inflation swap to turn the conventional loan into an index-linked loan at a teal interest rate of 1.1%. This inflation swapincludes a 7% inflation cap. The Santander loan of £15 million is secured against outlying operational properties with a market value of £24million (net book value £7.5 million). The HSBC inflation swap is secured on the £15 million investment fund over which HSBC has a lien.The College is investing the £15 million in global equity tracker funds, accumulating income over the next 40 years to meet the RPI index-linked liability to HSBC and the £15 million liability to Santander.

At 30 June 2017 the value of the investments was £30,430,000 (2016: £24,973,000) and the liabilities to Santander and HSBC totalled£18,734,000 (2016: £18,102,000). The increase of £632,000 in the inflation-linked liability during the year is shown as a reduction on totalreturn as set out in note 3c and the liability is included in creditors as set out above.

In January 2017 the College entered into a private unsecured bond placement to borrow £1 5m at 2.93% repayable in full in 2045. Interestis paid semi-annually.

16 Inflation swap provisions

Group and college 2017 2016£000 £‘OOO

Balance at beginning of year 8,308 6,029Charge to comprehensive income 1,166 2,279

Balance at end of year 9,474 8,308

Derivatives mark to market valuation on inflation linked swap.

17 Pension provisions2017 2016

Group and college £‘OOO £000

Balance at beginning of year 245 245Movement in year:Contributions (20) (8)Change in expected contributions 27 1Other finance cost 9 7

Balance at end of year 261 245

18 Capital and other commitments2017 2016

Group and College £000 £‘OOOAuthorised and contracted 2,718 4,295Authorised and but not yet contracted for 381 2,167

32

Care College, Cambridge Financial Statements for the year ended 30 June 2017

Notes to the financia’ statements

Balance at start of year:Capital

New donations and endowmentsTransfer from restricted reservesIncrease in market value ot investments

Balance at end of year

Analysis by type ot purpose

Restricted UnrestrictedPermanent Permanent 2017 2016

£000 £000 £000 £000

38,759 -. 38,159 35,101

607 - 607 460274 - 274 361

5,612 - 5,612 2,237

44,652 - 44,652 38,159

Fellowship fundsScholarship fundsPrize fundsHardship fundsBurnary fundsTravel grant tundsBuilding renewals fundOther fundsGeneral funds

Analysis by asset

3,065 - 3,065 2,0878,155 - 8,155 7,078

653 - 653 5706,837 - 6,837 2,2882,624 - 2,624 5,896

601 - 601 5247,104 - 7,104 6,2008,846 - 8,846 7,6116,766 - 6,766 5,905

44,652 - 44,652 38,159

PropertyInvestmentsCash

20 Restricted ReservesReserves with restrictions are as tollows:

9,555 - 9,555 9,00633,066 - 33,066 27,857

2,031 - 2,031 1,296

44,652 - 44,652 38,159

PermanentCapital unspent and Restrictedgrants other restricted expendable

unspent income endowment£000 £000 £000

1,454 22,025 721 24,200 22,712

3,891 - - 3,891 470- 17 259 275 178- - -

- 17444 1,763 22 1,828 1,994

(274) - - (274) (361)- 3,213 105 3,319 1,087- (975) (171) (1,146) (1,342)

(459) - - (459) (712)

4,656 26,044 936 31,635 24,200

- 6,907 52 6,959 5,957- 9,457 132 9,589 8,314- 1,309 10 1,318 1,110- 525 253 778 2,754- 3,258 17 3,275 539- 414 5 419 348

4,656 187 1 4,844 1,455- 3,988 466 4,453 3,723

4,656 26,044 936 31,635 24,200

Within the reserves representing investments held by the College, the following are the cumulative surpluses of total return on themain investment portfolio and on the inflation swap investments and liabilities (after deducting the drawdowns( since 1 July 1999

Unapplied Total Return at start ot year

Surplus of total return for year (note 3)

Unapplied total Return at end of year

Main Inflation swapendowment investments 2017 2016

£000 £000 £000 £000

39,054 6,869 45,923 38,952

15,683 4,623 20,305 6,971

54,737 11,492 66,228 45,923

19 Endowment FundsRestricted net assels relating to endowments are ss’tolfows:

2017 2016£000 £000

Balance at start of year:Accumulated income

New grantsNew donationsOther incomeEndowment return transferredTransfer to endowment fundsIncrease in market value of investmentsExpenditureCapital grants utilised

Balance at end of year

Analysis by type of purpose

Fellowship fundsScholarship fundsPrize fundsHardship fundsBursary fundsTravel grant fundsBuilding renewals fundOther funds

21 Memorandum of Unapplied Total Return

33



22 Reconciliation of consolidated surplus for the year to net cash inflow/(outflow) from operating activities

2017 2016£‘OOO £‘OOO

Surplus for the year 24,666 6,723

Adjustment for non-cash itemsDepreciation 2,767 2,802(Gain)/Loss on disposal of non-current assets (35) -

(Gain)ñoss on endowments, donations and investment property (20,902) (6,972)Decrease in stocks 15 35Decrease/f Increase) in debtors (81) 49(Decrease)/lncrease in creditors 557 1,105

Pension costs less contributions payable 16

Movement in provisions 1,166 2,279

Adjustment for investing or financing activities

Investment income (3,091) (3,138)

Inflation swap income (254) (369)Interest payable 1,501 1,100Interest receivable (666) (668)Management fees 197 227Net cash inflow from operating activities 5,856 3,173

23 Cash flows from investing activities2017 2016£000 £‘OOO

Proceeds on disposal of investments 7,814 9,286Proceeds on disposal of inflation swap investments 2,396 8,353Investment income 3,345 3,507Investment costs (197) (227)Endowment funds invested (12,304) (11,984)Inflation swap invested (2,589) (8,503)Proceeds on disposals on non-current assets 413 -

Payments made to acquire non-current assets (1,469) (3,414)Total cash flows from investing activities (2,590) (2,982)

24 Cash flows from financing activities2017 2016£000 £‘OOO

Interestpaid (1,501) (1,100)Interest received 666 668New loans 15,000 -

Cash held on short term deposit (14,000) -

Total cash flows from financing activities 165 (432)

25 Analysis of cash and cash equivalentsAt beginning At end of

of year Cash flows year£‘OOO £000 £000

Bank overdrafts (15) 15 -

Cash at bank and in hand 870 3,416 4,286Net funds 855 3,431 4,286

34



26 Related Party Transactions

Owing to the nature of the Colleges operations and the composition of the Governing Body it is inevitable that transactionswill take place with organisations in which a member of the Governing Body may have an interest. All transactions involvingorganisations in which a member of the Governing Body may have an interest are conducted at arm’s length and inaccordance with the Colleges normal procedures.

Transactions totalling £274,000 relating to the subscription of units in The Diversified Property Fund for Charities took placewith Sanne Group Nominees and Eskmuir FM Limited. The Bursar represents the College as a member of the InvestmentAdvisory Board of the Diversified Property Fund for Charities. No compensation is received for acting in this capacity. Thereare no transactions outstanding at the balance sheet date.

27 Pension Schemes

(a) Universities Superannuation Scheme

The total cost charged to the Statement of Comprehensive Income and Expenditure is £159,000 (2016: £135,000) as shownin note 27c.The latest available full actuarial valuation of the scheme was at 31 March 2014 (‘the valuation date’), which was carried outusing the projected unit method. The valuation at 31 March 2017 is underway.Since the College cannot identify its share of the scheme assets and liabilities, the following disclosures reflect thoserelevant for the scheme as a whole.

The 2014 valuation was the third valuation for USS under the scheme-specific funding regime introduced by the PensionsAct 2004, which requires schemes to adopt a statutory funding objective, which is to have sufficient and appropriate assetsto cover their technical provisions. At the valuation date, the value of the assets of the scheme was £41.6 billion and thevalue of the scheme’s technical provisions was £46.9 billion indicating a shortfall of £5.3 billion. The assets therefore weresufficient to covet 89% of the benefits which had accrued to members after allowing for expected future increases inearnings.Defined benefit liability numbers for the scheme have been produced using the following assupmtions:

2017 2016Discount rate 2.57% 3.6%Pensionable salary growth n/a n/aPension increases (CPI) 2.41% 2.2%

The main demographic assumption used relates to the mortality assumptions. Mortality in retirement is assumed to be in linewith the Continuous Mortality Investigation’s (CMI) SI NA tables as follows:Male members’ mortality 98% of SI NA (‘light’) YoB tables - No age ratingFemale members’ mortality 99% of Si NA (‘light’) YoB tables - rated down I year

Use of these mortality tables reasonably reflects the actual USS experience. To allow for further improvements in mortalityrates the CMI 2014 projections with a 1.5% pa long term rate were also adopted. The current life expectancies on retirementat age 65 are:

2017 2016Males currently aged 65 (years) 24.4 24.3Females currently aged 65 (years) 26.6 26.5Males currently aged 45 (years) 26.5 26.4Females currently aged 45 (years) 29.0 28.8

2017 2016Scheme assets £60.Obn £49.8bnTotal scheme liabilities £77.5bn £58.3bnFRS1O2 total scheme deficit £17.Sbn £8.5bnFRSIO2 total funding level 77% 85%

35



27 Pension Schemes (continued)

(b) Clare College Contributory Pension Scheme and NESTThe College operates a defined contribution pension scheme, mainly for permanent contracted non-academic employees whichcomplies with the requirements of the Pensions Act 2006 and Auto Enrolment. This scheme is provided by Prudential and hasbeen in operation since July 2016. The previous Occupational Pension Scheme is being officially wound up; the process isanticipated to be completed by the end of 2017.

Temporary employees are offered the National Employment Savings Trust (NEST) scheme, a defined contribution scheme setup by the Government. The assets of both schemes are held in separate trustee-administered funds. The amount charged to theStatement of Comprehensive Income and Expenditure represents the contributions payable to the respective schemes in respectof the accounting year.

(c) Summary of pension costs2017 2016

£000 £000Universities Superranuation Scheme 175 135Clare Contributory Pension Scheme 326 312NEST - 2Total pension costs (note 7) 501 449

36

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