Keele University
Notes to the Accounts For the year ended 31 July 2021
24 Restricted Reserves Reserves with restrictions are as follows : Consolidated and University
Capital Grant Income Unspent
Balances at 1 August 2020 1,488
New capital grant income |
75 |
Capital grants utilised |
( 1,563 ) |
( 1,488 ) |
At 31 July 2021 -
The restricted reserves relate to capital grant income recognised in full in research income as the performance conditions have been met , but with a small balance of expenditure yet to be incurred .
25 Financial instruments
A financial instrument is a contract that gives rise to a financial asset in one entity and a financial liability or equity instrument in another entity . Examples of financial instruments include cash , debtors and creditors , investments , hedging instruments and loans .
Nature and Extent of Risks Arising from Financial Instruments
The university ’ s activities expose it to a variety of financial risks . The main risks to the University ’ s treasury activities are : - Credit and counterparty risk ( security of investments ); - Liquidity risk / refinancing risk ( inadequate cash resources / impact of debt maturing in future years ); - Interest rate risk ( fluctuations in interest rate levels ); - Inflation risk ( exposure to inflation ); and - Foreign exchange risk .
Interest rate risk
The University is exposed to risk in terms of its exposure to interest rate movements on its borrowings and cash equivalent investments . Movements in interest rates have a dual impact on the University . A rise in interest rates would increase the interest payable costs of any variable rate loans , but interest income credited to the surplus or deficit will rise for investments and cash equivalents that are based on a variable interest receivable . The University ‘ hedges ’ its interest rate risk using swaps which provide stability against interest rate fluctuations , as highlighted below .
The carrying values of the Group and University ’ s financial assets and liabilities are summarised by category below :
£’ 000
Categories of financial instruments
At 31 July 2021 |
At 31 July 2020 |
Notes Consolidated |
University |
Consolidated |
University |
£’ 000 |
£’ 000 |
£’ 000 |
£’ 000 |
Financial assets Financial assets at fair value through Statement of Comprehensive income Listed investments |
15 |
25,901 |
25,901 |
20,605 |
20,605 |
Financial assets that are equity instruments |
|
|
|
|
|
measured at cost less impairment |
|
|
|
|
|
Other investments |
15 |
13,453 |
13,453 |
15,517 |
15,517 |
Financial assets that are debt instruments |
|
|
|
|
|
measured at amortised cost |
|
|
|
|
|
Trade and other receivables |
18 |
2,606 |
2,606 |
2,232 |
2,232 |
41,960 41,960 38,354 38,354
Financial liabilities Financial liabilities at fair value through Statement of Comprehensive income Derivatives ( see below ) |
20 |
131 |
131 |
300 |
300 |
Financial liabilities measured at amortised cost |
|
|
|
|
|
Loans |
20 / 21 |
66,793 |
66,793 |
68,755 |
68,755 |
Trade and other payables |
20 |
3,578 |
3,578 |
3,058 |
3,058 |
70,502 70,502 72,113 72,113
58