College Finances ....................................................................................................................
Nigel Prout Director of Finance t: +44 (0)20 8299 9300 e: proutn @ dulwich.org.uk Income & Expenditure
pledges at the time of writing) and £2.8m contributed from annual surpluses. The Governors had also sold endowment investments so as to hold £10.6m of endowment cash in preparation for the planned borrowing from the endowment. It can be seen from the financial statements for the year that ended 31 July 2014 that all the College’s funds are committed to the pursuit of its charitable objects. Indeed, the College had negative free reserves of £3.4m because all of its unrestricted funds, plus its short-term borrowing facilities, are committed to new projects. While it is financially strong, the College therefore continues to operate on relatively small margins. This position will continue over the period of the College’s Strategic Development Plan, including the Masterplan for the development of the campus. Other than by fundraising, all major improvements to the campus will have to be funded from College funds. With the Masterplan providing a framework, much work has been done recently to refine the priorities for the next five years. The total cost of major priority projects is currently estimated at £29m, including £21.4m for The Laboratory. Even if the College is able to continue to achieve annual surpluses of around £2m before fundraising, it would take very many years to achieve the funding required. Balance Sheet The College does have a strong balance sheet, totalling £54m at 31 July 2014. However, £34m of this represented capitalised building works on the campus and other assets that cannot be realised. There were realisable endowment assets of £22m but these need to cover the debt and pension deficit, which totalled £16m. The cash balance of £14m represented monies built up to pay for The Laboratory. This included the endowment cash of £10.6m and fundraising not yet spent, but it is all due to be spent in the coming year and so is not available for anything else.
The College was pleased to record a surplus of £3.5m for the year that ended 31 July 2014. This represented a £0.9m decrease on the surplus for the previous year, but the surplus for 2012-13 included a capital endowment distribution of £1.8m from the Dulwich Estate, which is added to endowment rather than being expendable income. Excluding this distribution, the 2013-14 surplus represented an increase of £0.9m on the previous year. This increase was partly as a result of fundraising revenue being increased from £1.1m to £1.6m, made possible by the continued work of the College’s Development Office and the generosity of our benefactors. It was also the result of a decrease in depreciation of £0.2m; something that will be reversed when The Laboratory comes into use. All of the College’s surpluses are used to fund capital projects and the 2013-14 surplus helped fund capital expenditure of £7.5m during the year, including £5.1m on The Laboratory. Total expenditure on The Laboratory to 31 July 2014 was £6m, with a further £0.9m of accrued expenditure liable for payment after the end of the financial year. The Governors wish to proceed with the Phase 2 of The Laboratory upon completion of Phase 1 in order to make whole this urgent educational priority as soon as possible. The total cost of the project is budgeted at £21.4m and it is planned to fund this by borrowing £10.6m from the College’s endowment, fundraising of £5.9m, annual surpluses and borrowing from the banks. To 31 July 2014, £3.2m had been received in philanthropic support (£4m in donations and
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