Annual report 2015: Financial report
Karolinska Institutet’s (KI) finances remain strong. In 2015 turnover, measured in revenues, increased by SEK 318 million or 5.2 per cent compared with 2014. The largest increase in revenues is in the category of external grants, SEK 269.4 million compared with 2014. Research activity is still dominant and amounts to approximately 84 per cent of the total turnover. The positive change in capital for the year amounted to a total of SEK 75.9 million (SEK 62.7 million), of which KI activities accounted for SEK 80.4 million (SEK 78.3 million) and Karolinska Institutet Holding AB accounted for minus SEK 4.5 million (minus SEK 15.7 million).
The source of information in this chapter is the financial system Agresso, unless otherwise specified. Last year’s figures in brackets.
Sources of funding
The funding of KI’s activities in 2015, divided into sources of funding, as shown in the pie chart on the right. There is a decrease in the category of direct government funding from 45 to 43 per cent, while research councils and other government agencies increased by the corresponding percentage. The percentages for the other sources are unchanged between the years.
The combined government funding of KI’s activities amounts to 64 per cent, which is at the same level as in 2014.
Education at bachelor’s and master’s level
KI did not reach the funding cap through the settlement for full-time equivalent (FTE) students and annual performance equivalents (APEs) in 2015. KI can nevertheless appropriate the entire funding cap by allocating funds for December performances from 2014 and by settling previous years’ surplus production of approximately SEK 0.6 million.
KI’s appropriation document was revised in the middle of 2015 and KI’s funding cap was increased by approximately SEK 9 million.
The government appropriation has been adjusted for prices and salaries by 0.79 per cent (2.06 per cent).
Revenues under the item Fees and other remuneration increased in comparison with 2014, which is attributable to an increase in revenues from tuition fees and contract education.
Revenues from grants consist mostly of grants from other government agencies transferred to KI for activities in the field of education, in accordance with the appropriations document of each agency.
This year’s expenses for education are at the same level as in 2014. Education activities account for approximately 16 per cent of KI’s total expenses.
Staff costs decreased somewhat compared with last year. The figures for 2014 contain a reallocation of staff costs from research to education, which negatively affected education activities in 2014.
The decrease in costs for premises, compared with 2014, is also due to a reallocation of SEK 22 million made in 2014 between research and education, which has affected costs for premises.
Financial costs consists of interest on overdue payments and the negative interest on the cash and bank balances.
The difference in depreciation between 2014 and 2015 is due to a correction of approximately minus SEK 7 million that was made in 2014. Apart from the correction, depreciation is at the same level as the previous year.
|Direct goverment funding||833.1||874.8||870.6||906.4|
|Fees and other remunerations||100.6||97.3||118.0||123.9|
|Other operating expenses||335.7||350.3||340.1||373.6|
|Funding from other government agencies||0.0||0.0||0.0||0.1|
|Change in capital:|
|For the year||-11.4||41.1||-22.8||20.4|
|Balance brought forward||139.1||127.8||168.9||146.1|
|Total (balance carried forward)||127.8||168.9||146.1||166.4|
Research and education at doctoral level
Research revenue for the year amounted to SEK 5,424.4 million (SEK 5,148.9 million). The direct government funding decreased by SEK 22.8 million or 1.2 per cent compared with 2014, which is in accordance with the appropriations document. The government appropriation has been adjusted for prices and salaries by 0.79 per cent (2.06 per cent).
Fees and other remuneration decreased by SEK 7.3 million compared with the previous year, which is primarily explained by a decrease in government-funded contract research.
The largest increase is in the item Revenues from grants, which increased by SEK 268 million or 10.3 per cent. A larger share of external resources funded research in 2015 compared with the previous year. The Swedish Research Council is behind an increase in revenues of SEK 112 million compared with 2014. In the category Foundations and organisations, the biggest increase is seen in the Wallenberg Foundations. In the category of companies, AstraZeneca has accounted for a significant increase in 2015.
Financial revenues increased by SEK 37.6 million in 2015 compared with 2014. In 2015, the annual average Interest rate on the interest account with the National Debt Office was minus 0.25 per cent (0.47 per cent). Interest income from the Swedish National Debt Office is approximately SEK 1.5 million and is due to negative interest rates on KI’s loans for fixed assets Other financial revenues consist of an appreciation of approximately SEK 31 million on the value of financial fixed assets within asset management and of a capital gain of approximately SEK 32 million from the sale of securities within asset management.
Total expenses for the year increased by SEK 316 million or 6.3 per cent compared with 2014.
Staff costs increased in total by SEK 239.7 million or 9.3 per cent compared with the previous year. There was a salary review during the year with an outcome of 4.67 per cent. The number of employees has also increased during the year, and these factors explain the increase in staff costs. The figures for 2014 contain a reallocation of staff costs from research to education, which affects the comparison between the years.
KI’s total costs for premises decreased somewhat compared with 2014. The explanation for this is that KI has during the year begun to apply improvement expenditure on property owned by others, which has had a positive effect on premises costs as some costs are dealt with as depreciations instead of rent surcharges. A correction of SEK 22 million for premises costs was made in 2014 between research and education, which affects the comparison between the years. Apart from the correction, these costs are at the same level as the previous year.
Increased other operating expenses, 2.4 per cent, is a result of expansion of activities and the increase is mainly in the cost category Purchase of services.
Financial costs consist primarily of exchange rate losses of SEK 8.9 million (SEK 7.9 million) and interest expenses of SEK 8.9 million (SEK 2.6 million), on our balance in the Swedish National Debt Office. The annual average interest rate on the deposit account for 2015, is minus 0.25 per cent (0.47 per cent). Exchange rate losses were mainly attributable to currency hedging of SEK 3.6 million (SEK 4.3 million) and SEK 5.3 million (SEK 3.6 million) is due to a stronger exchange rate, in particular for the US dollar and the Euro, linked to supplier invoices.
Depreciation increased, mainly due to increased investments.
|Direct goverment funding||1,732.4||1,762.8||1,919.5||1,896.7|
|Fees and other remunerations||670.1||612.2||601.1||593.8|
|Staff costs||2363,5||2507,0||2568,5||2 808,2|
|Other operating expenses||1433,2||1494,2||1604,5||1643,6|
|Funding from other government agencies||34.7||42.2||40.5||68.8|
|Change in capital:|
|For the year||150.9||-42.3||101.1||60.0|
|Balance brought forward||954.5||1,105.4||1,063.2||1,164.3|
|Total (balance carried forward)||1,105.4||1,063.2||1,164.3||1,224.3|
Loans at the National Debt Office
Each year new loans are taken in the National Debt Office for the fixed assets that are funded by the government. This takes place twice a year, in June and December, on investments made up to May and November respectively. At the time of the loan, a repayment is simultaneously made that corresponds to the year’s depreciation and retirements. New investments were made in 2015 equivalent to SEK 148.5 million and depreciation amounted to SEK 148.5 million. Total loan debt in the National Debt Office is SEK 612.1 million. The annual average interest rate in 2015 was minus 0.25 per cent (0.47 per cent).
Accumulated agency capital, including the change in capital for the year, amounted to SEK 1,434.8 million (SEK 1,358.8 million). Subsidiaries were responsible for SEK 44.1 million (SEK 48.6 million), asset management SEK 98.9 million (SEK 53.9 million) and core activities SEK 1,291.8 million (SEK 1,256.3 million).
Karolinska Institutet manages individual donations intended for medical science at KI. Donations are divided into:
- Funds, which are included in the accounts of KI.
- Independent foundations, which are their own legal entities with administration linked to KI.
For funds that are managed and reported within KI, both yield and capital may be utilised. The independent foundations are individual legal entities and issue their own separate annual reports. Any yield the foundations distribute to KI is included as external grants in KI’s accounts. Summaries of KI’s foundations’ accounts are shown in order to provide a complete picture of KI’s donated assets, regardless of their legal format.
At the end of the year, the market value of the fund portfolio reported in KI asset management amounted to SEK 640.9 million (SEK 247.1 million). This big increase is attributable to the Ming Wai Lau Center (MWLC). The donation for MWLC has been placed in its own portfolio with only interest-bearing securities. At the end of the year, the market value of the MWLC portfolio amounted to SEK 424 million. The following comments on the fund portfolio are excluding MWLC.
In 2015, net outflow (the difference between purchased and sold funds) was minus SEK 23.9 million (minus SEK 48.4 million) and the total change in value was SEK 13.1 million (SEK 27.4 million).
The total yield of the portfolio excluding MWLC was 5.2 per cent in 2015. The relative yield compared to the market index was 0.4 percentage points. The positive outcome is attributable to Swedish and foreign shares and to alternative investments. In 2015 interestbearing securities have had a negative yield of minus 0.7 per cent.
Investments regarding the MWLC portfolio were started in December, which means that it is not possible to state any annual yield.
Yield is stated net, i.e. including dividends and deductions for administrative costs. Share indices are stated inclusive of reinvested dividends.
|Swedish fixed interest||OMRX Bond||30 %|
|Shares||MS CI World Net Div (SEK)||40 %|
|Alternative Investments||OMRX T-Bill + 3 %||30 %|
Dividend from KI’s funds
In 2015, SEK 76.3 million was allocated to core activities within KI, according to purpose as shown in the table below.
|Bachelor’s and Master’s education||0.1||0.4||0.1||0.7|
External resources to asset management
In 2015, KI received a total of SEK 502.6 million (SEK 70.3 million) from external donations. Individual donations of SEK 2.0 million or more are reported below.
|Research purpose||Donor||Amount (SEK million)|
|Research within regenerative medicine incl. establishing the Ming Wai Lau Center for Regenerative Medicine||Ming Wai Lau||422.7|
|The Endre A. Balazs Professorship in Innnovation and Entrepreneurship||Dr Endre A. Balazs och Dr Janet L. Denlinger||17.2|
|Medical research and doctoral education||Gustaf and Tyra Svensson Memorial Fund||15.1|
|Professorship in clinical treatment||MEDA AB||7.0|
|Cognitive neurosciences, with a specific focus on brain aging||Stichting af Jochnick Foundation||5.0|
|Support for young research assistants||Hållsten Research Foundation||4.0|
|Scientific research primarily concerning cancer||Sune and Charlotta Hays Foundation||3.9|
|Support for young research assistants||William K. Bowes Jr. Foundation||3.3|
|Haematological research||Dr Åke Olsson’s Foundation for Haematological Research||2.5|
|Research concerning gastoenterology and hepatology||Ruth and Richard Julin Foundation||2.3|
|Support for Igor Adameykos reseach||Hållsten Research Foundation||2.0|
|Investor's Professorship in Innovative Care||Investor AB||2.0|
|Support for Sten Eirik Jacobsens research||Tobias Foundation||2.0|
|Support for the AMORIS database at IMM||Gunnar and Ingmar Jungner Foundation for Laboratory Medicine||2.0|
There are 178 (192) associated foundations that issue annual accounts and reports that are separate to that of the agency. Three (0) new foundations were established in 2015. The asset value of these is SEK 20.4 million. Seventeen foundations have been wound up following decisions, either from the Swedish Legal, Financial and Administrative Services Agency or KI’s Board of Research, that all of the assets may be released with the aim of fulfilling the foundation’s purpose.
New donations totalling SEK 4.1 million (SEK 2.9 million) were invested in existing foundations. The value of the foundations’ assets, SEK 1,683 million, increased by SEK 77 million or 4 per cent compared with 2014 after dividends but including new donations.
The foundation value at the end of the year consisted of Swedish shares 19 per cent (19 per cent), foreign shares 42 per cent (46 per cent), hedge funds 19 per cent (19 per cent), interest-bearing securities 18 per cent (16 per cent) and cash and cash equivalents 2 per cent (0 per cent). During the year, SEK 28.8 million (SEK 33 million) was distributed to KI from the foundations, SEK 2.9 million (SEK 4.6 million) of which consisted of released restricted assets. The purpose and direction of the grant is determined by the aim of each foundation. For foundations with associated administration, KI received remuneration of SEK 1.4 million (SEK 1.0 million) for administrative costs.
Statement of financial performance
|Outcome 01/01/2015 - 31/12/2015||Outcome 01/01/2014 - 31/12/2014|
|Direct government funding||2,803,083||2,790,123|
|Fees and other remuneration||717,751||719,165|
|Other operating expenses||-2,017,193||-1,944,673|
|Profit/loss from holdings in associated companies and subsidiary||-4,472||-15,683|
|Collection of general revenue|
|Revenue from fees etc. and other revenue not at the authority’s disposal||2,279||2,306|
|General revenue transferred to the Government budget||-2,277||-2,267|
|Funding received from the Government budget for the financing of grants||17,675||17,005|
|Funding received from Government agencies for the financing of grants||68,869||40,496|
|Other funding received for the financing of grants||136,119||91,391|
|CHANGE IN CAPITAL FOR THE YEAR||75,909||62,680|
|Intangible fixed assets|
|Capitalised expenditure for development||4,346||6,002|
|Rights and other intangible fixed assets||6,634||4,187|
|Total intangible fixed assets||10,980||10,190|
|Tangible fixed assets|
|Expenditure for improvements to leased property||31,557||26,061|
|Machinery, equipment, installations etc.||783,715||824,764|
|Fixed assets under construction||110,140||81,590|
|Total tangible fixed assets||925,412||932,415|
|Financial fixed assets|
|Holdings in associated companies and subsidiary||44,127||48,599|
|Other long-term securities holdings||640,932||199,421|
|Total financial fixed assets||685,060||248,021|
|Receivables from other Government agencies||109,701||113,022|
|Accrued grant revenue||332,012||244,378|
|Other accrued revenue||9,973||7,396|
|Total cut-off items||506,055||419,516|
|Settlement with the Government|
|Settlement with the Government||-399||-405|
|Total settlement with the Government||-399||-405|
|Cash and bank balances|
|Balance of the interest-bearing account at the Swedish National Debt Office||3,617,853||3,599,344|
|Cash and bank||176,151||109,263|
|Total cash and bank balances||3,794,004||3,708,607|
|CAPITAL AND LIABILITIES||31/12/2015||31/12/2014|
|Shares of earnings in associated companies and subsidiary||43,599||59,282|
|Capital brought forward||1,310,010||1,231,647|
|Change in capital according to the statement of financial performance||75,909||62,680|
|Total agency capital||1,434,757||1,358,847|
|Provisions for pensions and similar obligations||3,562||5,088|
|Loans at the Swedish National Debt Office||612,091||612,138|
|Liabilities to other Government agencies||139,429||136,363|
|Total liabilities etc.||1,219,462||1,168,857|
|Other prepaid revenue||293,916||269,198|
|Total cut-off items||3,495,328||3,013,685|
|TOTAL CAPITAL AND LIABILITIES||6,186,323||5,577,234|
|Other contingent liabilities||84,062||58,595|
|Total contingent liabilities||84,062||58,595|