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Transition in challenging times An annual review of the work of JISC Collections 2009-2010

SELECtIoN • NEGotIatIoN • rESEarCH • KNoWLEdGE SHarING


JISC Collections

JISC Collections is a membership organisation that supports the provision of digital materials for education and research in the UK. Board of Directors Chair David House Core Member Director Martin Harrow Institutional Member Directors David Scott We would like to thank Hazel Woodward and Deborah Shorley, who will complete terms as Institutional Member Directors in November 2010. Newly elected board members will be announced at the Annual General Meeting.

Executive Directors Lorraine Estelle Paul Harwood

We are uniquely placed to provide HE libraries with: • high-quality e-resource collections selected for academic research, teaching and learning • expertise in negotiating and procurement, within the scholarly communications sector, to save librarians time and money • best pricing and licensing, using our collective influence to obtain value for money • environmental scanning and research into innovative resources, licensing models and evaluation tools • shared knowledge about e-resource acquisition, developments and challenges.

The Board of Management would also like to extend special thanks to Ryan Curry, our Head of Finance, who has provided excellent financial management, and sadly now is leaving us to return home to Australia

www.jisc-collections.ac.uk 2


Contents

Chair’s Report … … … … … … … … … … … … … … … … 4 CEO’s Report … … … … … … … … … … … … … … … … … 5 Project Highlights… … … … … … … … … … … … … … … 6 Financial Statements … … … … … … … … … … … … … 8 Current Project List … … … … … … … … … … … … … … 18

“In challenging financial times, JISC Collections is well-placed to help us get more information resources for our money by purchasing collaboratively.” Janet Peters, Director of University Libraries and University Librarian, Cardiff University 3


From the Chair daVId HoUSE Chair of JISC Collections

Working with our members in challenging times

developing management tools to support acquisitions

We may not yet know the precise impact of the impending cuts, but our members are already making difficult decisions about cancellations. More than ever, they need our help – to deliver efficiency gains through collaborative purchasing, and in collating, analysing and applying usage statistics to evaluate licensed resources.

Working in partnership to increase value and reach

as changes in scholarly communication gather pace, it becomes even more important that we understand our members’ requirements. We continue to research, develop and maintain tools to support and inform acquisitions, such as the Journal Usage Statistics Portal (a true shared service for the harvesting and delivery of NESLi2 publishers’ journal usage statistics), the JISC Electronic Licence Comparison and Evaluation tool (also launching in the next few months, with approximately 80 of the most common JISC Collections electronic licences) and the academic database assessment tool (which received over 100,000 hits in 2009-10). We are also increasing collaboration with other organisations, such as Mimas, the British Library and the Scottish Higher Education digital Library, to deliver best value both by increasing our purchasing power and by reducing potential duplication.

Introducing internal efficiencies and improving web infrastructure

during 2009–10, we have introduced internal efficiencies to ensure that our members’ return on their investment in JISC Collections is maximised. this has included redeveloping our website to provide members with a better view onto their ‘account’ with JISC Collections, including information about current subscriptions and those due for renewal. at the request of members, the new website supports more transactions, including online subscription ordering; in its first 4 months, the new website has processed over 1,500 orders compared to 1,121 orders placed during the entirety of 2009, and has increased page views by 134% against the same period in 2009.

Continuing to develop NESLi2 as an effective consortium

We have now completed the integration of staff and offices following our acquisition of Content Complete Ltd in 2009, and continue to develop NESLi2 as an effective e-journals consortium. Major resources purchased during 2009–10 include the digital archive of Cambridge University Press journals and the BIoSIS Previews archive, both of which are now permanently available to our members. Efficiency gains to the sector from NESLi2 central negotiations and licensing activity exceeded £13m in 2009-10. additionally, we made a contribution on behalf of UK HE to the arXiv Collaboration Support Plan, which will help to ensure the continued development and stability of this valuable physics resource.

Looking ahead

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I am pleased to present our fourth annual review of JISC Collections. this year, we have delivered efficiency gains to our members of over £50 million. In last year’s report, I wrote about the impact of the economic crisis on libraries’ ability to maintain access to digital content. there has certainly been no respite from this situation and, as we go to press, our new government has announced that higher education funding will be cut by 40% by 2014-15.

In 2010–11, we will work to grow our understanding of our members’ changing needs, further develop our website and increase the quality of our customer service. these objectives will support our continued strategic focus on selection, negotiation, research and knowledge sharing, to help our members deliver value for money.


CEO’s Report LorraINE EStELLE CEo, Executive director of JISC Collections

Selection and negotiation

research and knowledge sharing

With the value of consortia purchasing being questioned by some publishers, and some of our biggest licensing agreements due for renewal in the coming year, we have invested in 2009–10 in gathering the evidence we need – such as usage statistics and cost-per-download figures – to evaluate our current deals. the new Journal Usage Statistics Portal, for example, not only serves individual institutions, but also enables us to see which journal agreements are providing comparative value, and which titles as a community our members are using and which they are not. this puts us in a strong position to define and negotiate the best agreements for our members. our analysis suggests that efficiencies in reduced duplication of effort and legal review of licences can save the academic community up to £300,000 per agreement renewed. at the most conservative estimate, the cost to publishers for dealing with each of our members individually would be 12 times higher than the costs of dealing with JISC Collections.

In addition to calculating our value in financial terms, we continue to carry out surveys to assess customer satisfaction, and to meet with library directors and interest groups to explore priorities and needs. this helps us develop tailored services around the evolving challenges and needs within our member organisations. We aim to put customer service at the heart of what we do, and this coming financial year will see us commence the Customer Service Excellence programme. as part of our service to institutions, we this year launched our new transactional website, which provides a personalised facility to academic libraries. In 2010-11 we are developing our new platforms to provide long-term access to the major archives we have purchased on behalf of our members, and considering how that content could be delivered directly into institutional library and virtual learning systems to provide users with a more integrated research experience. the e-books for fE Project is a special service for further Education colleges, delivering access to a Core Collection of e-books on a platform that provides functionality suitable to the needs of their users.

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Project highlights E-books for further Education (fE)

a £1.8 million award from the Learning Skills Council has enabled JISC Collections to supply e-books to over 370 participating fE colleges. Collective procurement and the transition from print to e-books have created significant cost efficiencies; purchasing print copies of the 3000 e-textbooks would have cost over 20 times more. Usage has been high (over 3 million page views in the first year), with students able to view e-books remotely and teachers able to re-use content in virtual learning environments and course material. this project has not only allowed us to evaluate usage and value of e-books within fE, but has also helped to increase the pace of technological engagement and change in this sector, with an increase of 40% in the number of colleges offering off-campus access. during 2011, we will continue to work with colleges through our federated access support scheme to increase 24/7 access to learning and teaching materials.

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Examining the economics of bloc payments for journals

In difficult financial times, and as we move closer to an online-only environment for journal access, there is increased appetite for consortium purchasing in the expectation that this will reduce administrative costs. Building on our previous work in the area of business and pricing models for online journals, we commissioned research during 2010 into cost allocation of “lump sum” payments made to publishers by library consortia. our “Bloc Payment Methods for online Journals agreements” study, published in July, used evidence from 14 non-UK consortia that have considered or used different cost apportionment methodologies, and attempted to model the impact of a range of different variables on cost allocation to institutions. the report highlights the complexities of bloc payment allocation, and provides an evidence-based overview of the advantages and disadvantages of the different approaches for any group considering cost allocation amongst members.

digital Images in Education

following stringent quality control of the images and metadata, the digital Images in Education collection amounts to over 500 hours of film and 56,000 images capturing local, UK and world history during the last 25 years. the collection will become available to UK higher and further education institutions from January 2011. delivered on a newly developed multimedia platform at EdINa, the films and images will not only be easy to find, use and integrate into teaching, learning and research, but will be cross searchable with content from Newsfilm online and film & Sound online, which will also be on the new platform. our high quality assurance processes have greatly improved this ability to find and use the collection.


Museum libraries

following the success of our 2008–2009 pilot licensing initiative for museum libraries in London, which developed model licences and negotiated initial content agreements, we secured funding from MLa in 2010 to continue this initiative into a second stage, and achieved three major aims: 1. museum libraries nationwide are now eligible, and new participants include National Museums Scotland, National Museum Wales, and the National Coal Mining Museum 2. additional resources have been licensed, including a fifth collection from oUP, and negotiations are almost complete for other packages requested by members, including Internet archaeology, ECCo and art Sales Catalogues online 3. the project website has been refreshed and agreements have been integrated into the main JISC Collections website, which supports online ordering. In 2010–11, JISC Collections will continue to explore suggestions for new agreements, to support and review existing agreements, and to promote the initiative to the wider museum and gallery community, in the hope of attracting more participating institutions.

oaPEN-UK

one of our newest projects, oaPEN-UK will experiment with scholarly monographs in the humanities and social sciences to find out if an open access business model is sustainable, and to explore the impact of open access on the readership and reach of scholarly monographs. oaPEN-UK will collaborate with publishers, research councils, researchers and institutions in a practical, real-time experiment that will gather qualitative and quantitative data to allow all stakeholders to make informed decisions about open access monograph publishing. an invitation to tender was released in october 2010, inviting publishers to participate in the project and to submit scholarly monograph titles published for inclusion in the experiment.

MErIt

the MErIt project collated every UK institution’s submissions to the 2008 research assessment Exercise. the resulting database is freely available on the JISC Collections website; submissions can be viewed by publisher or by institution, enabling (for example) an institution to assess which publishers accept and publish work by that institution’s faculty.

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Financial statements For The Year Ended 31st July 2010 THE JISC CONTENT PROCUREMENT COMPANY LIMITED Company Registration Number 5747339

dIrECtorS, offICErS aNd adVISErS directors/Board of Management david House

Chair

appointed by Core Members

Martyn Harrow

Core Member director

appointed by Core Members

dr Hazel Woodward

Institutional Member director

appointed by Institutional Members

deborah Shorley

Institutional Member director

appointed by Institutional Members

david Scott

Institutional Member director

appointed by Institutional Members

Lorraine Estelle

CEo

appointed by the Board of Management

Paul Harwood

Secretary

appointed by the Board of Management

Secretary and registered office Paul Harwood Ground floor Brettenham House South 5 Lancaster Place London WC2E 9EN registered Number 5747339 Principal place of business Ground floor Brettenham House South 5 Lancaster Place London WC2E 9EN auditors Knox Cropper 8/9 Well Court London EC4M 9dN

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directors’ report for the Year Ended 31st July 2010 the directors present their report and the financial statements of the Company for the year ended 31st July 2010. Principal activities JISC Collections is a membership organisation, established by the UK Higher and further Education funding councils, to support the procurement of digital content for education and research in the UK. We are uniquely placed to provide our members with: • expertise in negotiating and procurement, within the scholarly communications sector, to save librarians time and money • high-quality e-resource collections selected for academic research, teaching and learning • best pricing and licensing, using our collective influence to obtain value for money • environmental scanning and research into innovative resources, licensing models and evaluation tools • shared knowledge about e-resource acquisition and research. Now, more than ever, librarians must show value for money. We provide annual efficiency gains to our members of approximately £50 million, and enable scholars and learners to use each resource to its fullest potential. Business review the Company commenced trading on the 1st october 2006 and in the fourth year of trading the turnover was £12,987,052. the turnover is generated from grant income from HEfCE and from trading activity with its members and publishers of digital content. trading profits generated by the Company are earmarked for investment in digital content and strengthening the future sustainability of the organisation. the Company’s profit before tax for the period was £684,585 after administrative expenses of £1,164,485 and Interest Income of £26,357. taxation on profit on ordinary activities was £9,207, resulting in retained profits for the year of £675,378. the Profit and Loss account can be found on Page 11. the Company had negative cash flows of £2,587,595 for the year after the repayment of a £250,000 instalment of the repayable grant from HEfCE. Key risks through its risk register, the Company identifies keys risks and the necessary mitigating actions. It is likely that HEfCE will reduce the grants on which JISC Collections relies and the Company has appropriate contingency plans in place. the Company had a repayable grant to HEfCE of £818,119 to support its day to day cash flows, and in the current year the Company repaid £250,000. the Company’s assets include perpetual licences for archives of scholarly material. these licences were acquired on behalf

of the UK academic community with Grant in aid received from HEfCE. although JISC Collections holds perpetual licence, the assets are amortised over five years. this is to mitigate the impact of two possible events: the first is that the licensors might also sell licences to an organisation that would make the content openly accessible via the Internet; the second is a transformation in technology that would make the current file formats redundant. Key Performance Indicators as a publicly funded company, demonstrating the value of the Company’s activities, both to its funders and its members is essential. JISC Collections’ UK National academic archive currently includes 25 resources and provides members with annual savings in excess of £10.5 million. the Cambridge Journals digital archive, purchased this year (2009/2010) has 126 subscribers providing members with annual savings of over £780,000. there are over 150 online resources available at discounted rates through JISC Collections. these agreements cover resources of all types such as e-journals, maps, images, film, databases and e-books. JISC Collections renewed 16 NESLi2 agreements and 22 database agreements in the 2009-2010 year. JISC Collections works to a target of zero percent price increase and for 7 NESLi2 and 16 database agreements it has been achieved. the renewal of just one of these agreements this year saved the higher education a collective total of £316,000 in terms of negotiated reductions in price and an estimated £259,000 in the effort that would have been duplicated without JISC Collections. directors’ responsibilities Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company as at the financial year end and of the profit or loss of the Company for that period. In preparing those financial statements, the directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and estimates that are reasonable and prudent; • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. the directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them

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to ensure that the financial statements comply with the Companies act. It is also their responsibility to safeguard the assets of the company and hence to take reasonable steps to prevent and detect fraud and other irregularities. directors’ Interests None disclosure of Information to auditors to the knowledge and belief of the directors, there is no relevant information that the company’s auditors are not aware of, and the directors have taken all the steps necessary

to ensure that they are not aware of any relevant information, and to establish that the company’s auditors are aware of the information. auditors a resolution to reappoint Knox Cropper Chartered accountants as auditors of the company will be proposed at the forthcoming annual general meeting.

approved by the Board of Management on 28 october 2010

Independent auditor’s report to the Members of the JISC Content Procurement Company Limited We have audited the financial statements of the JISC Content Procurement Company Limited for the year ended 31st July 2010 which comprise the Profit and Loss account, the Balance Sheet, the Cash flow Statement and the related notes. the financial reporting framework that has been applied in their preparation is applicable law and United Kingdom accounting Standards (United Kingdom Generally accepted accounting Practice). respective responsibilities of directors and auditors as explained more fully in the directors’ responsibilities Statement set out on page 9, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. our responsibility is to audit the financial statements in accordance with applicable law and International Standards on auditing (UK and Ireland). those standards require us to comply with the auditing Practices Board’s (aPB’s) Ethical Standards for auditors. Scope of the audit a description of the scope of an audit of financial statements is provided on the aPB’s web-site at www.frc.org.uk/apb/scope/ UKNP. opinion on financial statements In our opinion the financial statements: • give a true and fair view of the state of the company’s affairs as at 31st July 2010 and of the company’s profit for the year then ended; • have been properly prepared in accordance with United Kingdom Generally accepted accounting Practice; and • have been prepared in accordance with the requirements of the Companies act 2006.

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opinion on other matters prescribed by the Companies act 2006 In our opinion the information given in the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements. opinion on other matters required by HEfCE In all material respects, income from Higher Education funding Council for England, grants and income for specific purposes and from other restricted funds administrated by the company have been properly applied only for the purposes for which they are received. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept, or • the company financial statements are not in agreement with the accounting records and returns; or • certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit.

Kevin Lally (Senior statutory auditor) for and on behalf of: Knox Cropper, Statutory auditor 8/9 Well Court London EC4M 9dN


Profit and Loss Account for the Year Ended 31 July 2010 Notes

2010 Total £ 12,987,052 (11,164,339) _____________

2009 Total £ 12,925,389 (10,866,354) ____________

1,822,713

2,059,035

administrative Expenses

(1,164,485) _____________

(1,254,278) ____________

Operating Profit Interest receivable

658,228 26,357 _____________

804,757 127,502 ____________

turnover Cost of Sales

2

Gross Profit

Profit on Ordinary Activities before taxation

3

684,585

932,259

taxation on profit on ordinary activities

6

(9,207) _____________ 675,378 _____________ _____________

(34,810) ____________ 897,449 ____________ ____________

Retained Profit for the financial period

there were no recognised Gains or Losses other than those reported above. None of the Company’s activities were acquired or discontinued during this period.

Balance Sheet at 31 July 2010

Fixed Assets Intangible assets tangible assets Investments Current Assets debtors Cash at Bank and in Hand

Creditors: amounts falling due within one year

Notes

2010 Group £

2010 Parent £

2009 Parent £

7 8 9

9,661,216 114,638 ____________-

9,661,216 112,949 30,605 ____________

8,037,151 5,207

9,775,854

9,804,770

____________ 8,042,358

5,012,743 6,220,076 ____________

5,012,067 6,168,307 ____________

5,015,716 8,807,671 ____________

11,232,819 ____________

11,180,374 ____________

13,823,387 ____________

(11,472,536)

(11,445,618)

(12,786,410)

(239,717) ____________

(265,244) ____________

1,036,977 ____________

9,536,137

9,539,526

9,079,335

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(6,003,208) ____________ £3,532,929 ____________ ____________

(6,003,208) ____________ £3,536,318 ____________ ____________

(6,221,784) ____________ £2,857,551 ____________ ____________

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3,532,929 ____________ £3,532,929 ____________ ____________

3,536,318 ____________ £3,536,318 ____________ ____________

2,857,551 ____________ £2,857,551 ____________ ____________

10

11

Net Current Assets Total Assets Less Current Liabilities Creditors: amounts falling due after one year

Capital And Reserves Profit and Loss account

11


Cash Flow Statement for Year Ended 31 July 2010 2010 total

2009 total £ 7,467,687 127,502 (58,453) (4,975,089) _________

Notes Net Cash Inflow from operating activities return on Investments taxation Capital Expenditure

20(b)

£ 1,586,736 26,357 (34,810) (3,915,878) __________

financing

20(c)

(2,337,595) (250,000) __________

2,561,647 (250,000) _________

£(2,587,595) __________ __________

£2,311,647 _________ _________

(decrease)/Increase in Cash in the year Cash (inflow)/outflow from repayable HEfCE grant Net funds at beginning of period

(2,587,595) 250,000 7,989,552 __________

2,311,647 250,000 5,427,905 _________

Net funds at end of period

£5,651,957 __________ __________

£7,989,552 _________ _________

20(a)

Increase in Cash Reconciliation of Net Cash Flow to Movement in Net Funds

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20(d)


Notes to the financial Statements for the Year Ended 31st July 2010 1. ACCOUNTING POLICIES (a) Basis of Accounting the financial statements are prepared under the historical cost convention and in accordance with United Kingdom accounting Standards (United Kingdom Generally accepted accounting Practice). (b) Turnover Subscription income relating to the provision of electronic content to member institutions is recognised for the period it relates to. Income received relating to future financial periods is treated as deferred income in the Balance Sheet. revenue Grants supporting the activities of the company are accounted for in the year in which they are receivable in the Profit and Loss account. Capital Grants are released to the Profit and Loss account over the estimated useful lives of the related assets purchased with these grants. the balance of grants, not yet released, is carried forward in the Balance Sheet as deferred income. Income from consulting, courses, events, advertising, and other fees are recognised in the period to which they relate. (c) Depreciation of Fixed Assets (1) depreciation of tangible fixed assets is charged to Profit and Loss account on a straight line basis as follows: furniture & fixtures over 5 years office and Computer Equipment over 3 years (2) amortisation of intangible assets is charged to Profit and Loss account on a straight line basis over 5 years from the date of the contract. (d) Pension Scheme the company participates in the Universities Superannuation Scheme (USS), a defined benefit scheme which is externally funded and contracted out of the State Second Pension (S2P). the assets of the scheme are held in a separate trustee-administered fund. Because of the mutual nature of the scheme, the scheme’s assets are not hypothecated to individual institutions and a scheme-wide contribution rate is set. the institution is therefore exposed to actuarial risks associated with other institutions’ employees and is unable to indentify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore, as required by frS 17 “retirement benefits”, accounts for the scheme as if were a defined contribution scheme. as a result, the amount charged to the income and expenditure account represents the contributions payable to the scheme in respect of the accounting period.

3. PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION this is stated after charging: 2010 £ 2,178,870 2,664 12,800 1,200 ============

2009 £ 1,161,895 2,455 12,500 1,100 ============

£131,078 ============ Number of directors who are accruing benefits under defined benefit pension scheme 2 ============

£102,280 ============

amortisation of Intangible fixed assets depreciation of tangible fixed assets auditors’ remuneration – audit fee – other Services

4. DIRECTORS’ EMOLUMENTS aggregate directors’ remuneration

1 ============

5. EMPLOYEE INFORMATION the average number of employees was Staff Costs: Wages and Salaries Social Security Costs other Pension Costs

2010 15

2009 12

572,538 48,809 ____76,143 _______

521,088 43,745 ___62,993 _______

£697,490 ============

£627,826 ============

6. TAX ON PROFIT ON ORDINARY ACTIVITIES United Kingdom Corporation tax

_____9,207 ______ ___34,810 _______ £9,207 £34,810 ============ ============ the tax assessed for the period is difference from the standard rate of corporation tax (28%). the difference is explained below: Profit on ordinary activities before tax

684,585 ============

Profit on ordinary activities multiplied by standard rate of tax (28%) 191,684 Effects of: Mutual trading Profits (179,408) Marginal relief ____(3,069) _______ Current tax charge for the period £9,207 ============

1,520,633 ============ 425,777 (379,364) _(11,603) _________ £34,810 ============

2. TURNOVER the whole of the turnover and profit before taxation is attributable to the principal activity of the Company and arises solely in the United Kingdom.

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7. INTANGIBLE FIXED ASSETS

Net Book Value at 31st July 2009

Group and Parent

Cost at 1st august 2009 additions

rights to Electronic Content £ 9,896,826 3,549,385 ____________

Goodwill £ 0 253,550 ________

total £ 9,896,826 3,802,935 ___ _________

at 31st July 2010

13,446,211 ____________

253,550 ________

13,699,761 ____________

at 31st July 2010

Amortisation at 1st august 2009 Charge for the year

1,859,674 2,149,290 ____________

0 29,581 ________

1,859,674 2,178,871 ___ _________

at 31st July 2010

4,008,964 ____________

29,581 ________

4,038,545 ___ _________

Net Book Value at 31st July 2009 at 31st July 2010

£8,037,151 ============= £9,437,247 =============

0 ======== £223,969 ========

£8,037,151 ============== £9,661,216 ==============

8. TANGIBLE FIXED ASSETS furniture & fixtures £

Website

total

£

£

at 31st July 2010

12,274 3,582 ____________ 15,856 ____________

0 109,361 ________ 109,361 ________

12,274 ___112,943 _________ ___125,217 _________

Depreciation at 1st august 2009 Charge for the year

7,067 3,512 ____________

0 0 ________

at 31st July 2010

10,579 ____________

0 ________

7,067 ______3,512 ______ ____10,579 ________

£5,207 ============= £5,277 =============

0 ======== 109,361 ========

£5,207 ============== £114,638 ==============

Net Book Value at 31st July 2009 at 31st July 2010

TANGIBLE FIXED ASSETS Parent furniture & fixtures £

Website

total

£

£

Cost at 1st august 2009 additions

12,274 1,045 ____________

0 109,361 ________

12,274 110,406 ____________

at 31st July 2010

13,319 ____________

109,361 ________

___122,680 _________

£5,207 ============== £112,949 ==============

Shares in Group Undertakings

2010 £

2009 £

Cost at 1st august 2009 additions

0 _30,605 _______ £30,605 ________

0 _______0_ _______0_

at 31st July 2010

during the year, the JISC Content Procurement Company Limited acquired 100% of the share capital of Content Complete Limited, a company incorporated in England and Wales. fair value of the assets acquired Goodwill

30,605 253,550 ________ £284,155 ________

Immediately on acquisition the majority of contracts and operations of the subsidiary were transferred up to the parent company and the Goodwill has therefore been disclosed as a separate asset in the parent company accounts.

10. DEBTORS 2010 £ trade debtors 1,650,063 Prepayments and accrued income 3,210,188 other debtors _____152,492 ________ £5,012,743 ===============

7,067 2,664 ____________

0 0 ________

at 31st July 2010

9,731 ____________

0 ________

7,067 ______2,664 ______ ______9,731 ______

2009 £ 1,639,639 3,126,675 _____249,402 _________ £5,015,716 ================

11. CREDITORS: Amounts Falling Due Within One Year trade Creditors taxation and Social Security other Creditors accruals and deferred Income repayable grant from HEfCE

2,902,231 350,549 26,702 7,943,054 _____250,000 ________ £11,472,536 ===============

3,759,649 79,533 2,814 8,694,414 _____250,000 _________ £12,786,410 ================

12. CREDITORS: Amounts Falling Due After One Year other Creditors deferred Income repayable grant from HEfCE

34,666 5,650,423 _____318,119 ________ £6,003,208 ===============

Depreciation at 1st august 2009 Charge for the year

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0 ======== £109,361 ========

9. INVESTMENTS

Consideration

Group

Cost at 1st august 2009 additions

£5,207 ============= £3,588 =============

5,653,665 _____568,119 _________ £6,221,784 ================


13. RECONCILIATION OF MOVEMENT IN FUNDS (PROFIT AND LOSS RESERVE) funds at 1st august 2009 Profit for the year

2,857,551 _____675,378 _________

funds at 31st July 2010

£3,532,929 ================

14. PENSION COSTS the company participates in the Universities Superannuation Scheme (USS), a defined benefit scheme which is externally funded and contracted out of the State Second Pension (S2P). the assets of the scheme are held in a separate fund administered by the trustees, Universities Superannuation Scheme Limited. the appointment of directors to the board of the trustees is determined by the company’s articles of association. four of the directors are appointed by Universities UK; three are appointed by the University and College Union, of whom at least one must be a USS pensioner member; one is appointed by the Higher Education funding Councils; and a minimum of two and a maximum of four are co-opted directors appointed by the board. Under the scheme trust deed and rules, the employer contribution rate is determined by the trustee, acting on actuarial advice. Because of the mutual nature of the scheme, the scheme’s assets are not hypothecated to individual institutions and a scheme-wide contribution rate is set. the institution is therefore exposed to actuarial risks associated with other institutions’ employees and is unable to indentify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore, as required by frS 17 “retirement benefits”, accounts for the scheme as if it were a defined contribution scheme. as a result, the amount charged to the income and expenditure account represents the contributions payable to the scheme in respect of the accounting period. the latest triennial actuarial valuation of the scheme was at 31 March 2008. this was the first valuation for USS under the new scheme-specific funding regime introduced by the pension’s act of 2004, which requires schemes to adopt a statutory funding objective, which is to have sufficient and appropriate assets to cover their technical provisions. the actuary also carries out a review of the funding level each year between triennial valuations and details of his estimate of the funding level at 31 March 2010 are also included in this note. the triennial valuation was carried out using the projected unit method. the assumptions which have the most significant effect on the result of the valuation are those relating to the rate of return on investments (i.e. the valuation rate of interest), the rates of increase in salary and pensions and the assumed rates of mortality. the financial assumptions were derived from market yields prevailing at the valuation date. an ‘inflation risk premium’ adjustment was also included by deducting 0.3% from the market implied inflation on account of the historically high level of inflation implied by government bonds (particularly when compared to the Bank of England’s target of 2% for CPI which corresponds broadly to 2.75% for rPI per annum).

to calculate the technical provisions, it was assumed that the valuation rate of interest would be 6.4% per annum (which includes an additional assumed investment return over gilts of 2% per annum), salary increases would be 4.3% per annum (plus an additional allowance for increases in salaries due to age and promotion reflecting historic Scheme experience, with a further cautionary reserve on top for past service liabilities) and pensions would increase by 3.3% per annum. Standard mortality tables were used as follows: Male members mortality Pa92 MC YoB tables – rated down one year female members mortality Pa92 MC YoB tables – No age rating Use of these mortality tables reasonably reflects the actual USS experience but also provides an element of conservatism to allow for further improvements in mortality rates. the assumed life expectations on retirements at age 65 are: Males (females) Currently aged 65 22.8 (24.8) Years Males (females) Currently aged 45 24.0 (25.9) Years at the valuation date, the value of the assets of the scheme was £28,842.6 million and the value of the scheme’s technical provisions was £28,153.3 million indicating a surplus of £707.3 million. the assets therefore were sufficient to cover 103% of the benefits which had accrued to members after allowing for expected future increases in earnings. the actuary also valued the scheme on a number of other bases as at the valuation date. on the scheme’s historic gilts basis, using a valuation rate of interest in respect of past service liabilities of 4.4% per annum (the expected return on gilts) the funding level was approximately 71%. Under the Pension Protection fund regulations introduced by the Pensions act 2004 the scheme was 107% funded; on a buy-out basis (i.e. assuming the Scheme had discontinued on the valuation date) the assets would have been approximately 79% of the amount necessary to secure all the USS benefits with an insurance company; and using the frS17 formula as if USS was a single employer scheme, using a aa bond discount rate of 6.5% per annum based on spot yields, the actuary estimate that the funding level at 31 March 2008 was 104%. the technical provisions relate essentially to the past service liabilities and funding levels, but it is also necessary to assess the ongoing cost of newly accruing benefits. the cost of future accrual was calculated using the same assumptions as those used to calculate the technical provisions except that the valuation rate of interest assumed asset outperformance over gilts of 1.7% per annum (compared to 2% per annum for technical provisions) giving a discount rate of 6.1% per annum; also the allowance for promotional salary increases was not as high. there is currently uncertainty in the sector regarding pay growth. analysis has shown very variable levels of growth over and above general pay increases in recent years, and the salary growth assumption built into the cost of future accrual is based on more stable, historic, salary experience. However, when calculating the past service liabilities of the scheme, a cautionary reserve has been included, in addition, on account of the variability mentioned above. the scheme-wide contribution rate required for future service benefits alone at the date of the valuation was 16% of pensionable

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salaries and the trustee company, on the advice of the actuary, increased the institution contribution rate to 16% of the pensionable salaries from 1 october 2009. Since 31 March 2008 global investment markets have continued to fall and at 31 March 2010 the actuary estimated that the funding level under the new scheme specific funding regime had fallen from 103% to 91% (a deficit of £3,065 million). this estimate is based on the funding level at 31 March 2008, adjusted to reflect the fund’s actual investment performance over the two years and changes in market conditions (market conditions affect both the valuation rate of interest and also the inflation assumption which in turn impacts on the salary and pension increase assumptions). on the frS17 basis, using aa bond discount rate of 5.6% per annum based on spot yields, the actuary estimated that the funding level at 31 March 2010 was 80%. an estimate of the funding level measured on a buy-out basis at that date was approximately 57%. Surpluses or deficits which arise at future valuations may impact on the companies’ future contribution commitment. a deficit may require additional funding in the form of higher contribution requirements, where a surplus could, perhaps, be used to similarly reduce contribution requirements. the sensitivities regarding the principal assumptions used to measure the scheme: liabilities are set out below: Assumption

Change in Assumption

Impact on scheme Liabilities

Valuation rate of interest

Increase/decrease by 0.5%

decrease/Increase by £2.2 Billion

rate of pension increases

Increase/decrease by 0.5%

Increase/decrease by £1.5 Billion

rate of salary growth

Increase/decrease by 0.5%

Increase/decrease by £0.7 Billion

rate of mortality

More prudent assumption (move to long cohort future improvements from the medium cohort adopted at the valuation)

Increase by £1.6 Billion

USS is a “last man standing” scheme so that in the event of the insolvency of any of the participating employers in USS, the amount of any pension funding shortfall (which cannot otherwise be recovered) in respect of that employer will be spread across the remaining participant employers and reflected in the next actuarial valuation of the scheme. the trustee believes that over the long term equity investment and investment in selected alternative asset classes will provide superior returns to other investment classes. the management structure and targets set are designed to give the fund a major exposure to equities through portfolios that are diversified both geographically and by sector. the trustee recognises it would be theoretically possible to select investments producing income flows broadly similar to the estimated liability cash flows. However, in order to meet long-term funding objective within a level of contributions that it considers the employers will be willing to make, the trustee needs to take on a degree of

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investment risk relative to its liabilities. this taking of investment risk seeks to target a greater return than matching assets would provide whilst maintaining a prudent approach to meeting the fund’s liabilities. Before deciding what degree of investment risk to take relative to the liabilities, the trustee receives advice from its internal investment team, its investment consultant and the scheme actuary, and considers the views of employers. the strong positive cash flow of the scheme means that it is not necessary to realise investments to meet liabilities. the trustee believes that this, together with ongoing flow of new entrants into the scheme and the strength of covenant of the employers enables it to take a long-term view of it investments. Short term volatility of returns can be tolerated and need not feed through directly to the contribution rate although the trustee is mindful of the desirability of keeping the funding level on the scheme’s technical provisions close to or above 100% thereby minimizing the risk of the introduction of deficit contribution. the actuary has confirmed that the scheme’s cash flow is likely to remain positive for the next 10 years or more. the next formal triennial actuarial valuation is due as at 31st March 2011. the contribution rate will be reviewed as part of each valuation and may be reviewed more frequently. as at 31 March 2010, USS had over 135,000 active members and the company had 16 active members participating in the scheme. the total pension cost for the institution was £76,143 (2009: £62,993). the contribution rate payable by the institution was 16% of pensionable salaries.

15. LEASING COMMITMENTS operating Leases the Company’s annual commitments for rental payments under non-cancellable operating leases at 31 July 2010 were as set out below Land and Buildings £ operating leases which expire Within two to five years £57,195

16. SHARE CAPITAL the Company has no share capital.

17. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES there were no capital commitments or contingent liabilities at 31st July 2010.

18. RELATED PARTY DISCLOSURES HEfCE supports the work of the Company through the payment of capital and revenue grants and these amounted to £3,227,265 (2009:£7,672,330). In addition, HEfCE has funded the company through a repayable grant amounting to £568,119 (2009: £818,119).


19. APPROVAL OF FINANCIAL STATEMENTS

20(b) Capital Expenditure

these financial statements were approved by the Board of directors on 28 october 2010.

20(a) Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities

operating Profit amortisation Charges depreciation Charges Increase in debtors (decrease)/Increase in Creditors Net Cash Inflow from operating activities

2010 £ 658,228 2,178,871 3,512 2,973 (1,256,848) ____________

2009 £ 804,757 1,161,895 2,455 601,666 4,896,914 ____ _________

£1,586,736 ==============

£7,467,687 ===============

acquisition of Intangible assets acquisition of tangible assets

3,802,935 ____112,943 ________

4,974,343 _________746 ____

£3,915,878 ==============

£4,975,089 ===============

repayment of repayable grant from HEfCE (£250,000)

(£250,000)

20(c) Financing

20 (d) Analysis of Changes in Net Funds

Cash at Bank repayable Grant from HEfCE

At 01.08.09 8,807,671 (818,119)

at the end of the Period 7,989,552

Cash Flow (2,587,595)

At 31.07.10 6,220,076

____250,000 ________ (2,337,595) ==============

(568,119) ___ __________ 5,651,957 ===============

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Current projects Developing effective and sustainable business models for e-resources E-textbook business models for FE www.fe.jiscebooksproject.org E-textbook business models for HE www.jiscebooksproject.org/business-models Examining the economics of bloc payments for journals www.jisc-collections.ac.uk/reports/Bloc-Payment-for-onlinejournals/ Open Access Fees Project www.jisc-collections.ac.uk/our-projects/open-access-fees-Project/ Open Access scholarly e-monographs business model pilot (OAPEN UK) www.jisc-collections.ac.uk/News/oapen-uk/ Museum Libraries www.jisc-collections.ac.uk/about-JISC-Collections/Services-toother-sectors/Museum-libraries/

Examining the needs and behaviours of modern students and researchers to inform resource development and licensing E-books for FE www.fe.jiscebooksproject.org National e-books observatory www.jiscebooksproject.org Service provider interface study www.jisc-collections.ac.uk/Global/Service%20Provider%20 Interface%20Study.pdf

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Exploring how innovative tools and technology can support efďŹ cient procurement Copyright Advice and Support Project for Electronic Resources (CASPER) www.jisc-casper.org Journal Usage Statistics Portal www.jusp.mimas.ac.uk Academic Database Assessment Tool (ADAT) www.jisc-adat.com A practical guide to e-journal archiving solutions www.jisc-collections.ac.uk/reports/Guide-to-e-journal-archiving-/ Pilot for Ensuring Continuity of Access via NESLi2 (PECAN) www.edina.ac.uk/projects/pecan/ JISC Electronic Licence Comparison and Evaluation tool www.jisc-collections.ac.uk/News/licence-comparison-tool/ Service Provider Support Project Extending Access Management to Business and Community Engagement www.jisc-collections.ac.uk/our-projects/EaM2BCE/ Digital images in education www.imagesforeducation.org.uk MERIT www.jisc-collections.ac.uk/Project-Merit/

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JISC Collections Annual Review 2009-2010