St Peter’s College Foundation Annual Report

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The St PetersCollege FoundationReport & FinancialStatements / 2011


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1 Chairmans Statement 52 Investment Committee Report 93 Legal and Administrative

Information 104 Report of the Board 115 Statement of Financial Activities 146 Balance Sheet 157 Notes forming part of the

Financial Statements 168 Independent Examiners Report 20

Contents


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This has been a slower year as regards the growth of theFoundation. In part this reflects the continuing adverseeconomic climate. It also results from changes at the Collegewhere Bernadette Benati, the College Development Director,moved on to new challenges. Against this background I am pleased to be able to reportthat the Foundation has greatly increased the support it has

given to the College from 40,500 in 2010 to 167,821 in2011. Given this background it is also pleasing to note that ournet funds fell during the year by less than 50,000.

TrusteesAs ever, the Foundation remains dependant on the energyand commitment of its Trustees for which we remainextremely grateful. Two formal meetings were held duringthe year, but there were countless other meetings held duringwhich ways in which the Foundation could be developed andthe College supported were discussed and progressed.

AdministrationAs the Foundation has grown in its size and its ambitionsit has been agreed that coordination of the Foundationsefforts in support of the College would be better achieved if

the Foundations administrative back up were provided fromwithin the Colleges Development Office. This has taken alittle time to arrange but we have recently welcomed KateLongworth to the role and look forward to working with her.

Investment PolicyA major reason for the maintenance of the Foundationsfunding position, despite the greatly increased supportof the College, has been the excellent performance of theFoundations investment portfolio. For this we are grateful to the Investment Committee underCharles Ind, whose report is set forth on page 9.

Left

Linton Quad close by the siteof the new boilerinstallationfor which theFoundationprovided substantialfunding.

Chairmans Statement

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Projects SupportedThe Foundation exists to help the Colleges growth anddevelopment in the broadest sense. Some projects which theFoundation supports have a certain glamour, others less so.

Our major contribution in 2011 fell into the latter category!For some time the Colleges boiler system and the structure

that houses it have been under strain, and the replacementof both has become an increasingly pressing need. Boilerreplacement is not the sort of project which will exciteindividual donors, so the Foundation agreed to help get theproject under way with a donation of 100,000. Thislead gift inspired others to give, and the project is nownearing completion. An important focus of the Foundations charitable activitiesis, of course, investing in people at undergraduate, graduateand Senior Common Room level. Fran Lambrick is now in thefinal year of her doctoral research on community forestry inCambodia. We have continued to meet the costs of the weeklygraduate research seminars. Topics in the past year havebeen as diverse as the Assessment of Borderline PersonalityDisorder and Bipolar Disorder Patients, the DimensionalConventions of Space, and Digital Hardware Design for

Very Large Scale Radio Astronomy Arrays. These seminarscontinue to be well attended by the Fellows, several of whomhave also received travel costs from the Foundation, enablingthem to take their work into an increasingly global researchcommunity. Once again the Foundation has funded intensiverevision weeks for finalists in Modern Languages, History andGeography. A further priority for the Foundation is to promote socialmobility by providing financial support for students therebyenabling as broad a range of society as possible to attend StPeters. The impact of the Schools Liaison Officer post, fundedby the Foundation, has been felt not only at the College,

Chairmans Statement(contd)

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in preparationfinals.


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2011 was a turbulent year for financialmarkets, driven by renewed concernsabout global economic growth, the ongoingeurozone debt crisis, doubts over the solvencyof European banks, the loss of AAA status bythe US government and flagging confidencein policy-makers and political leadershipacross the globe. As a consequence, riskassets generally under-performed in 2011and, despite a rebound in the fourth quarter,the MSCI World equity index finished theyear down 4.3%.

Against this background, the Foundationsinvestment portfolio generated a positivereturn of 8.2% in 2011 (excluding cashon deposit). This was a good outcome inthe circumstances, with each of the assetclasses in the Foundations portfolio makinga positive contribution to the overall return,in particular alternative investments (+14%)and private equity (+13%). There werealso smaller positive contributions fromthe investments in fixed income (+4%) andquoted equity (+3%).

St Peters Foundation

Net Assets 2011

(100% = 1.5m)

1 Alternative investments 35%

2 Quoted equity 31%

3 Fixed income 12%

4 Private equity 12%

5 Cash 10%

Two of the strongest performers in theportfolio were hedge fund investmentsgenerously donated by a former member ofthe College in 2008 the Vulpes LAVA Fund,a market neutral, equity arbitrage, Asianfund, and the Vulpes Russian OpportunitiesFund, a value-oriented fund focusing onRussian infrastructure stocks which wereup 12% and 24% respectively in 2011.The other major positive contributor wasthe Foundations investment in SpecialOpportunities Fund III, a fund-of-funds

investing in Bain-managed private equityand hedge funds, which continued to recoverfrom its difficult start, and generated a returnof 17% during the year. Other highlightsincluded the realisation of the Foundationssmall direct private equity investment in EISOptics, a manufacturer of optical components also generously donated by a former StPeters member which has more thandoubled in value over the past two years.

As at 31 December 2011, the Foundationsnet assets amounted to approximately 1.5million, of which approximately 35% wasrepresented by alternative investments,31% by quoted equity, 12% by fixed income,12% by private equity and 10% by cash.This is broadly in line with the Foundationsstrategic asset allocation target, although weare currently overweight in quoted equities,and underweight in fixed income, relative toour long-term target which is a reflectionof our medium-term view on the relative

attractiveness of these two asset classes.

Overall, markets remain fragile and theeconomic outlook is uncertain. In thiscontext, we are maintaining our long-terminvestment focus and balanced portfoliostrategy, which we feel confident will deliverabove-average capital appreciation over thelonger term whilst also generating sufficientincome to fund meaningful projects forthe College.

but across Oxford and beyond. In the past year Alice Wilbyhas run over 100 events around two thirds at schools indeprived areas, the rest bringing groups to St Peters. Alicewas recently awarded further funding of 50,000 from theSutton Trust for her cross-collegiate Pathways programme,which is designed to help year 10-13 students from stateschools and colleges make competitive applications to the

University. Again it is another example where a lead gift fromthe Foundation has enabled further fundraising success.

The FutureThe Trustees remain confident that there are many amongthe Colleges alumni who would be attracted to theopportunity to find projects in which they could take a closepersonal interest the concept of venture philanthropy.

We look forward to working with the Development Office andthe College to provide funding for imaginative projects whichwill add to the Colleges growing reputation.

Robin HodgsonLord Hodgson of Astley Abbotts, CBE19 June 2012

Investment CommitteeReport

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Chairmans Statement(contd)

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Report of the Board

The Board presents its report and financialstatements for the year ended on 31 stDecember 2011.

Structure, Governanceand Management

Governing DocumentThe organisation is a charitable companylimited by guarantee, incorporated on2 December 2004 and registered as a

charity on 3 February 2005. The companywas established under a Memorandum ofAssociation which established the objectsand powers of the charitable company andis governed under its Articles of Association.In the event of the company being woundup members are required to contribute anamount not exceeding 1.

Recruitment and Appointment of the BoardThe directors of the company are also charitytrustees for the purposes of charity lawand under the companys Articles comprisethe Board. Under the requirements of theMemorandum and Articles of Association themembers of the Board are elected to serve fora period of three years after which they mustbe re-elected at the next Annual GeneralMeeting and may be reappointed such thatthey can serve for a maximum of three termsin all.

The members of the Board have been selected

for their knowledge of and desire to supportSt Peters College.Trustee Induction and TrainingAll of the members of the Board are familiarwith charitable organisations in general.They have been made familiar with theactivities of the Foundation and of itsaccounts. No further inductionwas necessary.

Risk ManagementThe Board are aware of the potential risks ofoperating the charity and, in the early stageof its activities, all transactions are approvedby them. Appropriate systems or proceduresto mitigate the risks that the charity faces willbe introduced as the need arises.

Organisational StructureThe Board may have up to 10 memberswho meet half-yearly, or more frequentlyas necessary, and are responsible for thestrategic direction and policy of the charity.At present the Board has 8 members from avariety of professional backgrounds relevantto the work of the charity.

The Secretary also attends Board meetingsbut has no voting rights. The charity isof recent formation and all activities are

handled by Board members.

Objectives and Activities

In planning our activities for the year we keptin mind the Charity Commission guidance onpublic benefit at our trustee meetings.

The companys objects and principal activitiesare to promote the advancement of educationand learning including but not limited to:

supporting initiatives which attract thewidest range of potential students to applyto and join St Peters College;

providing financial assistance to studentsin residence by grants or loans; and

supporting and increasing financialresources available for teaching

The main objectives and activities for theperiod focused on the establishment of the

Foundation and raising initial donations.

Achievements and Performance

The Foundation has funded College activitiesand has continued with building its funds.

Reference andAdministrative Information

Charity NameThe St Peters College Foundation

Charity registration number1107938

Company registration number05303218

Registered Office4 Grosvenor PlaceLondon SW1X 7HJChairmans OfficeNova Capital Management Limited1st FloorCayzer House30 Buckingham GateLondon SW1E 6NN

Independent ExaminersWingrave Yeats Partnership LLP101 Wigmore Street, L ondon, W1U 1QU

BankersKleinwort Benson Bank(Isle of Man) LimitedSt Georges Court, Upper Church Street,Douglas, Isle of Man, IM99 1RB

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Legal & AdministrativeInformation

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Board of Directors

Secretary

Lord Hodgson of AstleyAbbotts CBE*

Mark Damazer Stephen Diggle*

Dr LawrenceGoldman

Jocelin Harris*

Charles Ind*

Dr Balaz s Szendr oi C harlesWilkinson*

Howard Long, FCA.4 Grosvenor Place, LondonSW1X 7HJ

*Member of Investment Committee


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Financial Review

Outcome for the period.The Foundation has been funded bydonations amounting to 23,579 and interestand dividends have been earned of 41,606.Expenditure has been incurred of 179,006,of which 167,821 was for grants to St PetersCollege, leaving a deficit in the year of113,821, after gains on investments. Thiswill be deducted from unrestricted reserves.

Investment PolicyThe Foundation has established anInvestment Committee from among itsTrustees. This includes individuals with along-term record of senior involvement in thefinancial sector.

The strategy is to accept some exposure toshort term volatility. This allows a moreambitious investment style which it isbelieved should, over time, provide aboveaverage growth in value. This is explainedin more detail in the InvestmentCommittees report.

Reserves PolicyThe Board intends to build the reserves ofthe Foundation, by seeking major donations,so as to create a fund that will generate asustainable income to enable them to meetits objectives. Unless specific restrictionsare placed by donors, the reserves of theFoundation will be unrestricted in nature.

However, the Trustees are likely to designatethe reserves to match their investmentstrategy and to that extent, reserves willnot be regarded as available for meetingexpenditure.

Plans for Future Periods

The charity plans to continue the activitiesoutlined above in the forthcoming yearssubject to satisfactory funding arrangements.

Responsibilities of the Board

Company law requires the Board to preparefinancial statements for each financial year

which give a true and fair view of the stateof the affairs of the charitable company as atthe balance sheet date and of its incomingresources and application of resources,including income and expenditure, for thefinancial year. In preparing those financialstatements, the Board should follow bestpractice and:

select suitable accounting policies andthen apply them consistently;

make judgments and estimates that are

reasonable and prudent; and prepare the financial statements on the

going concern basis unless it isinappropriate to assume that thecharitable company will continue onthat basis.

The Board is responsible for maintainingproper accounting records which disclosewith reasonable accuracy at any time thefinancial position of the charitable companyand to enable it to ensure that the financialstatements comply with the CompaniesAct 2006. The Board is also responsible forsafeguarding the assets of the charitablecompany and hence for taking reasonablesteps for the prevention and detection offraud and other irregularities.

Members of the BoardMembers of the Board, who are directors forthe purpose of company law and trusteesfor the purpose of charity law, who served

during the year and up to the date of thisreport are set out on page 10.

Mr Diggle is a Director of a companythat manages two of the investmentfunds where units in them are held by theFoundation. These investments were donatedby him. Lord Hodgson was a shareholder andMr. Harris was a director and shareholderof companies in which the Foundation heldshares, funded by donations received fromthem.

The Board ensures that any conflicts ofinterest are appropriately disclosed. Directorsdo not take part in discussions or decisionswhere they have a conflict of interest.

Independent Examiners

Wingrave Yeats Partnership LLP remainsas the charitable companys independentexaminers and have expressed theirwillingness to continue in that capacity.

This report has been prepared in accordancewith the Statement of RecommendedPractice: Accounting and Reporting byCharities (issued in March 2005).

Approved by the Board on 19 June 2012and signed on its behalf by:

Robin HodgsonLord Hodgson of Astley Abbotts, C.B.EDirector

Report of the Board(contd)

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Balance Sheetas at 31 December 2011

Fixed assetsInvestments 8 1,355,850 1,335,823

Current AssetsCash at bank and in hand 138,723 200,318Debtors 9 7,418 10,175

Creditors: amounts fallingdue within one year 10 (4,000) (2,106)

Net Current Assets 142,141 208,387

Net Assets 1,497,991 1,544,210

Unrestricted FundsGeneral funds 1,497,991 1,544,210

Total Funds 11 1,497,991 1,544,210

Notes2011

2010

For the year ending 31 December 2011 the company was entitled to exemption from auditunder section 477 of the Companies Act 2006. The members have not required the companyto obtain an audit in accordance with section 476 of the Companies Act 2006. The accountshave been prepared in accordance with the provisions applicable to companies subject to thesmall companies regime.

The directors acknowledge their responsibility for:

i) ensuring the company keeps accounting records which comply with section 386; andii) preparing accounts which give a true and fair view of the state of affairs of the companyas at the end of the financial year, and of its profit or loss for the financial year, in accordancewith the requirements of section 396, and which otherwise comply with the requirements ofthe Companies Act relating to accounts, so far as is applicable to the company.

Approved by the Board on 19 June 2012 and signed on its behalf by:

Robin HodgsonLord Hodgson of Astley Abbotts, C.B.EDirector

Statement of Financial Activities (includingIncome & Expenditure Account) for the Year Ended31 December 2011

Incoming ResourcesIncoming Resources from generated funds

Voluntary income:Donations 2 23,579 78,213

Activities for generating funds:Investment Income 41,606 31,194

Total incoming resources 65,185 109,407

Resources expended

Costs of generating fundsCosts of generating voluntaryincome and administration 9,325 24,139

Charitable activities 167,821 40,500

Governance costs 1,860 1,621

Total resources expended 3 179,006 66,260

Net (outgoing)/incoming resourcesbefore other recognised gainsand net movement on funds (113,821) 43,147

Realised gain on investments 36,325 20,506

Unrealised gain/(loss) on investments 31,277 (38,553)

Total funds brought forward 1,544,210 1,519,110

Total funds carried forward 11 1,497,991 1,544,210

The statement of financial activities includes all gains and losses in the period. All incomingresources and resources expended derive from continuing activities.

Unrestricted

Funds 2011

Notes

UnrestrictedFunds 2010

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Basis ofallocation

Voluntaryincome

Support to StPeters College

Governance

2011Total

2010Total

Costs directly allocated

to activities

Reading parties Direct 6,750 6,750 5,000

Bursaries, tuition and

undergraduate support

Direct 4,500 4,500 4,500

Graduate support Direct 11,000 11,000 11,000

Schools liaison officer Direct 27,000 27,000 -

College building project Direct 100,000 100,000 -

Overseas research support Direct 18,571 18,571 20,000

Independent review Direct 1,860 1,860 1,621

Support costs allocated

to activities

Staff costs Usage 4,115 4,115 16,189

Accountancy fees Usage 2,520 2,520 2,400

Insurance Usage 375 375 794

Office costs Usage 548 548 4,403

Bank charges and sundries Transactions 56 56 446

Exchange loss/(gain) Transactions 1,711 1,711 (93)

Totals 9,325 167,821 1,860 179,006 66,260

1 / Accounting Policies

The principal accounting policies aresummarised below. The accounting policieshave been applied consistently throughoutthe year.

a) Basis of accountingThe financial statements have been preparedunder the historical cost convention, asmodified by the inclusion of fixed assetinvestments at market value, and in

accordance with the Companies Act 2006and the Statement of Recommended Practice:Accounting and Reporting by Charities issuedin March 2005.

b) Fund accounting Unrestricted funds are available for use at

the discretion of the trustees infurtherance of the general objectives of thecharity. Unrestricted funds includea revaluation reserve representing therestatement of investment assets atmarket values.

Designated funds are unrestric ted fundsearmarked by the Board for particularpurposes.

Restricted funds are subjected torestrictions on their expenditure imposedby the donor or through the terms ofan appeal.

c) Incoming resourcesAll incoming resources are included in the

statement of financial activities when thecharity is entitled to the income and theamount can be quantified with reasonableaccuracy. The following specific policies areapplied to particular categories of i ncome:

Voluntary income is received by way ofgrants, donations and gifts and is includedin full in the Statement of FinancialActivities when receivable. Grants, whereentitlement is not conditional on thedelivery of a specific performance by thecharity, are recognised when the charitybecomes unconditionally entitled tothe grant.

Donated services and facilities areincluded at the value to the charity wherethis can be quantified. The value of

services provided by volunteers has notbeen included in these accounts.

Investment income is included whenreceivable.

Incoming resources from grants, whererelated to performance and specificdeliverables, are accounted for as thecharity earns the right to consideration byits performance.

d) Resources expendedExpenditure is recognised on an accrual basis

as a liability is incurred. Expenditure includesany VAT which cannot be fully recovered,and is reported as part of the expenditure towhich it relates:

Costs of generating funds comprise thecosts associated with attractingvoluntary income.

Charitable expenditur e comprises thosecosts incurred by the charity in thedelivery of its activities and services for itsbeneficiaries. It includes both costs thatcan be allocated directly to such activitiesand those costs of an indirect naturenecessary to support them.

Governance costs include those costsassociated with meeting the constitutionaland statutory requirements of the charityand include the audit fees and costs linkedto the strategic management of the charity.

All costs are allocated between theexpenditure categories of the SoFA on abasis designed to reflect the use of the

resource. Costs relating to a particularactivity are allocated directly; others areapportioned on an appropriate basis.

e) Fixed assetsFixed assets (excluding investments) arestated at cost less accumulated depreciation.The costs of minor additions or thosecosting below 1,000 are not capitalised.Depreciation is provided at rates calculatedto write off the cost of each asset over itsexpected useful life, which in all cases isestimated at 4 years.

Investments held as fixed assets are revaluedat mid-market value at the balance sheet dateand the gain or loss taken to the Statement ofFinancial Activities.

f) Cash flow statementThe trustees have taken advantage of theexemption in Financial Reporting StandardNo 1 (revised) from including a cash flowstatement in the financial statements on thegrounds that the charity is small.

g) Foreign currenciesAssets and liabilities in foreign currenciesare translated into sterling at the rates ofexchange ruling at the balance sheet date.Transactions in foreign currencies are

translated into sterling at the rate of exchangeruling at the date of the transaction.Exchange differences are taken into accountin arriving at the net incoming resources forthe year.

2 / Donations

All donations received in the period wereunrestricted and were received fromcorporate or private donors.

3 / Total Resources Expended

See table below

Notes forming part of the Financial Statementsfor the Year Ended 31 December 2011

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4 / Net Incoming Resourcesfor the Period

This is stated after charging:

Fee for Independent Examiners Review:1,860 (2010 - 1,621)

5 / Staff Costs and Numbers

There was one part time member of staff

employed for the first quarter of the year,at a cost of 4,115. (2010 employed for 12months, cost 16,189).

6 / Trustee Remuneration & RelatedParty Transactions

No members of the Board received anyremuneration during the period.No trustee or other person related to thecharity had any personal interest in anycontract or transaction entered into by thecharity during the period. No allowancesor reimbursed expenses were made to theTrustees during the period.

7 / Taxation

As a charity, The St Peters CollegeFoundation is exempt from tax on incomeand gains falling within sections 471 488

of the Corporation Tax Act 2010 or s256 ofthe Taxation of Chargeable Gains Act 1992to the extent that these are applied to itscharitable objects. No tax charges have arisenin the Charity.

8 / Investments

At Valuation

At 31 December 2010 1,335,823

Investments purchased in year -

Proceeds of sale during the year (47,575)

Realised gains during the year 36,325

Revaluation adjustmentduring the year 31,277

At 31 December 2011 1,355,850

The equivalent cost of the investments as at31 December 2011 was 1,401,029 (2010:1,415,923).

All shares held have been revalued to marketvalue at the year end and foreign currencyvalues have been restated at year endexchange rates. Where possible, the marketvalues for investments have been takenfrom latest fund manager reports or frompublished sources. Where they are not readilyavailable, the Board has taken estimates ofvaluation.

See note 12 for details of investmentcommitments.

All investments are held for the purposes ofthe General Fund.

9 / Debtors

Other debtors

2011 () 7,418

2010 () 10,175

10 / Creditors: Amounts Falling Duewithin One Year

Other creditors and accruals

2011 () 4,000

2010 () 2,106

Notes forming part of the FinancialStatements for the Year Ended 31 December 2011(contd)

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11 / Movement in Funds

There is only one fund, which is unrestrictedand the movements on that fund are shownon the face of the Statement of FinancialActivities.

12 / Commitments

The Foundation is committed to aninvestment of up to US$500,000 in Special

Opportunities Fund III Limited. At the yearend US$495,000 had been invested, leavinga forward commitment of US$5,000 orapproximately 3,200.

13 / Ultimate controlling party

In the opinion of the Trustees there is no oneultimate controlling party of the Charity.


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Independent examiners report to the trusteesof The St Peters College Foundation

We report on the accounts of the company forthe year ended 31 December 2011 which areset out on pages 14 to 19.

Respective responsibilities of trusteesand examiner

The trustees (who are also the directors ofthe company for the purposes of companylaw) are responsible for the preparation of theaccounts. The trustees consider that an audit

is not required for this year under section144(2) of t he Charit ies Act 2011 (the 2011Act) and that an independent examinationis needed. We are qualified to undertake theexamination by being a qualified memberof the Institute of Chartered Accountants ofEngland and Wales.

Having satisfied ourselves that the charity isnot subject to an audit under company lawand is eligible for independent examination,it is our responsibility to:

examine the accounts under section 145of the 2011 Act;

follow the procedures laid down in thegeneral Directions given by the CharityCommission under section 145(5)(b) ofthe 2011 Act; and

state whether particular matters havecome to my attention.

Basis of independent examiners statement

Our examination was carried out inaccordance with general Directions given bythe Charity Commission. An examinationincludes a review of the accounting recordskept by the charity and a comparison of theaccounts presented with those records. It alsoincludes consideration of any unusual itemsor disclosures in the accounts, and seekingexplanations from you as trustees concerningany such matters. The procedures undertakendo not provide all the evidence that wouldbe required in an audit, and consequently noopinion is given as to whether the accountspresent a true and fair view and the reportis limited to those matters set out in thestatement below.

Independent examiners statement

In connection with our examination, nomatter has come to our attention:

1) which gives me reasonable cause tobelieve that, in any material respect, therequirements:

to keep accounting records in accordancewith section 386 of the Companies Act2006; and

to prepare accounts which accord with theaccounting records, comply with theaccounting requirements of section 396 ofthe Companies Act 2006 and with themethods and principles of the Statement ofRecommended Practice: Accounting andReporting by Charities

have not been met; or

2) to which, in our opinion, attention shouldbe drawn in order to enable a properunderstanding of the accounts to bereached.

Wingrave Yeats Partnership LLPMember of the Institute of CharteredAccountants of England and Wales101 Wigmore Street, L ondon W1U 1QU

Date: 22 June 2012

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Charity number1107938Company number05303218

www.spc.ox.ac.uk

Documents

St Peter’s College Foundation Annual Report