financial statementsfor the year ended 31 July 2011

introductionThe Financial Statements for the year ended 31st July 2011 represent another

strong financial performance for the University. The University has continued

to invest in key areas of activity with a common focus to enhance the positive

experience of students studying at our institution.

Despite the financial climate the University has continued to invest in its capital

programme with significant advances in supporting the Tom Reilly Building,

supporting Sport and Exercise Sciences, and the Redmonds’ Building that will

open in the summer of 2012 and provide excellent general teaching facilities

for Business, Law, Media, Arts and the Social Sciences.

The Balance Sheet has maintained its strength. Income and Expenditure

Reserves are showing a significant increase compared with the previous year.

Total reserves have been strengthened.

We are entering a period of decline in public spending and this is likely to

continue for some years. In addition, the introduction of the new student fees

regime in 2012, and other changes to core funding, contribute to further

financial uncertainty. The University will be required to make some significant

decisions in the near future both in terms of its future strategy and direction

and how it will continue to be able to finance its plans. We are not alone in

facing such challenges, but we are in a strong position moving forward and we

will deal with the challenges and look to capitalise on new opportunities.

I want to thank the staff across the University for the excellent results achieved

this year – academic, financial and strategic. As already commented, these are

uncertain times, but we can build upon our sound base and look to the future

with confidence.

Professor Nigel P. Weatherill, FREng, DSc

Vice-Chancellor and Chief Executive

contentsOperating and Financial Review 2

Public Benefit Statement 32

Board of Governors 40

Officers and Advisors ofthe University 41

Responsibilities of the Boardof Governors 42

Corporate Governance 43

Report of the Auditors 47

Statement of PrincipalAccounting Policies 49

Consolidated Income andExpenditure Account 51

Balance Sheets 53

Consolidated Cash Flow Statement 54

Statement of Consolidated TotalRecognised Gains and Losses 55

Notes to the Financial Statements 56

1

scope of the

2

operating and financial review

Financial StatementsThese are the consolidated statutoryaccounts of Liverpool John MooresUniversity and its subsidiaries for theyear ended 31 July 2011.

3

Our mission is to serve and enrich our students, clientsand communities by providing opportunities foradvancement through education, training, research and thetransfer of knowledge.

LJMU is working towards a new future where it will berecognised nationally and internationally for its graduatecareer opportunities, a university of choice fororganisations in search of research and consultancy thatwill help them compete in an increasingly global economy.

We believe we can achieve these goals. The foundationsare already in place, and the supporting structures welldeveloped.

mission

4

7

strategic objectivesThe mission, core purpose and values are

the explicit platform for the University's

Strategic Statement and Plan for the period

2007-2012; and articulate the Fundamental

Concepts of Excellence, as defined by the

European Foundation for Quality

Management (EFQM), in ways meaningful

to LJMU.

We have introduced a major new initiative

that will deliver to our students high quality

academic programmes connected to the

world of work and business plus a range of

measures and cer tified experiences and

personal skills that will best equip them for

successful careers. Specifically, the strategic

plan focuses on an innovative concept,

which, internally, we call World of Work

(WoW®) that centres on employer

engagement and graduate careers. For this

reason World of Work has been devised as

the means by which our students can

accumulate broader high-level ‘world-of-

work’ skills; to have these assessed and

certified independently of their academic

study, giving prospective employers absolute

confidence of the value of an LJMU

graduate, whether this be in the private,

public, or voluntary and social employment

sectors. To achieve this successfully we

believe that it is critical that employers are

actively involved in the process.

We are also continuing to maintain growth

in our traditional public income sources

whilst increasing significantly growth rates

in income from non-public sources, such as

contract research, commercial enterprise

and knowledge transfer.

We are also focussed on maintaining our

reputation for excellence in governance

and management, through continuous

development and improvement against the

rigours of the EFQM Excellence Model, and

through the continued development of a

strong strategic management focus.

7

studentsLJMU is the tenth largest University in the UK with 25,068students in Liverpool plus a further 4,500 studentsenrolled on accredited University courses overseas.Actual full time equivalent numbers for 2010/11 were19,658 a decrease of 4% compared with 2009/10.

The drop in numbers is primarily due to the large cohortsat levels 2 and 3 in 2009/10 now only occurring at level 3.Actions were taken in respect of recruitment targets for2010/11 onwards which caused the contraction byaround 5% per annum in the coming years to reflect theplanning intention for a managed reduction in studentnumbers. The large actual intake at level 1 for 2011/12may however counteract this.

8

9

05/06 10/11

35000

30000

25000

20000

15000

10000

5000

0

Student Applications

05/06 10/11

17000

18000

19000

20000

21000

16000

Student FTEs

The WoW Programme continuesto be recognised as a best practicecase study in nationally importantpublications and conferences in2011 including CBI and COGENT:(Sector Skills Council for theScience Based Industries) andNational Union of StudentsNational Report and hosting manyVIP visitors who have been keento see what LJMU is doing.

During the year 5,500 students,from all year groups, voluntarilyregistered for the WoW skillscertificate module with studentssubmitting 1600 Bronze, Silver orGold statements. The WoWcertificate continues to bedesigned, developed and deliveredcollaboratively with many employerpartners and is being modified andimproved following feedback.

Over 3,500students are

actively engagedin reflecting onand recording

key graduate skills.

Several key business decisions have been taken inrelation to the academic portfolio. These includechanges to the Academic Framework and theclosure of a number of programmes all designedto ensure the efficient delivery of a quality offeringthat is fit for purpose as we enter a period ofuncertainty within an increasingly competitivemarket place.

Graduate Skills and the WOW Programme haveseen significant successes this year:

10

11

The Graduate DevelopmentCentre has received outstandingfeedback from student users e.g.96% (665) said they wouldrecommend GDC sessions to afriend, 98% (924) said thesession were well delivered, 89%agreed that they were moreconfident about managing theirfuture and moving their careerforward etc.

In a successful qualityassurance visit conducted by the

Department of Business,Innovation and Skills the Assessor

said: “The GDC puts studentsfirst and this approach provides a

platform of excellence andsupport”. A student said:

“The support for students hereis very good. It’s much more than

just a careers service”.

Collaborative relationships with theWoW National Employers Groupcontinue to flourish with members ofNational and Local WoW EmployerAdvisory Groups including Barclays,Royal Mail, GKN, Oracle, LiverpoolChamber of Commerce, Co-operativeGroup, Enterprise Rent-A-Car andFord. Over 160 Employee Verifiers havebeen trained and are delivering thecritical final 1:1 interview stage of theWoW certificate.

In 2011 LJMU recordedits highest number of

graduates in employmentor education/training for 3

years at 89.1%, the numberin graduate jobs rose by

1.6% and unemploymentfell by 1.6%

The European SocialFund supported

Graduate AcceleratorProgramme has

delivered all outputsand developed the

employability of 450unemployed graduates.

The Graduate DevelopmentCentre has achieved majorsuccesses in employer relationsbrokerage and work relatedlearning including placements withLovell Construction, Liverpool CityCouncil, Datel Group Computing,and Lake Technologies (SME). Anew job vacancy portal hasattracted over 1,500 vacanciesfrom 1,000 different employers.

LJMU is exporting its knowledge and

enhancing its international reputation

by running a Malaysian Ministry of

Higher Education funded WoW skills

certificate pilot programme at

Malaysia’s largest public university –

Universiti Teknologi Mara. This was

successfully completed in the autumn

of 2011. The GDC has delivered

WoW related sessions in the USA,

Vietnam, Spain, and France, The

Philippines and Thailand

Following on from the results of RAE2008, the University continues to focus itsresearch efforts and resources in areas of demonstrable research excellence.Core HEFCE research funds are devolved to Faculties and are now largely usedto support academic staff costs in research-active schools. In 2010 (to reflect thecurrent economic climate), the target for future year on year growth wasreduced to 5%.

research

A high reliance on public-sectorfunding (research council, NHSand local authority) and thebudget constraints imposed onthose external funding streamscoupled with ever-increasing inter-University competition has hadconsiderable impact on the levelsof external funding available. LJMUis also heavily reliant on a smallnumber of research areas / stafffor the bulk of its grant income.

Particular research strengthsremain in STEM (e.g., electricaland general engineering,maritime, astrophysics, builtenvironment, life sciences, publichealth) and STEM-relatedsubjects (e.g., biologicalanthropology, sports sciences).Together these account for>90% of external researchincome to LJMU.

The institutional target forresearch income has not beenmet. External research grantincome fell by 16.5% in 2010/11compared to the previous year.HESA research income (a morebroadly defined measure includingcommercial (contract research)and KTP income) fell by 17.5%.

12

R-coded research expenditure HESA R income

Ex

pe

nd

itu

re/In

co

me

(£’0

00

)

Year

Despite the fall in grant incomeover recent years, LJMU remains54th in the UK for research grantincome (as measured bybenchmarking HESA researchincome for 2009/10 – the latestcomparative dataset available),well ahead of the majority ofpost-1992 HEIs and ahead ofsome well-established research-led Universities.

UK Research Councilincome (the most

competitive source ofresearch funding)

accounts forapproximately 16%

of our totalresearch income.

13

02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

0

5000

10000

15000

Research grantincome is asignificant driverfor LJMU’sHEIF income.

Academic staffcontinue to submitsubstantive researchgrant bids to externalorganisations at arate in excess of 230grant bids per annum.

Planning for the next round ofresearch assessment (theResearch ExcellenceFramework, REF2014) is wellunderway and all Units ofAssessment being consideredfor submission have beensubject to at least one roundof expert external reviewsover the last 12 months.

Plans for the use of HEFCERCIF2 funds for researchcapital were approved.These will be used tostrengthen selected areas ofresearch excellence withinthe institution and use ofthese funds will, whereappropriate to do so, alignwith on-going capital.

LJMU continues tolever externalresearch grant

income using coreHEFCE research

income at a rate at> 3.3:1 (well ahead of

the sector average).

The 5-year averagerate of growth of

external research grantincome is second

highest of North WestUniversities and

remains amongst thehighest in the UK.

14

15

The University combines Higher Education Innovation Fund (HEIF) funding and core

funds to ensure continuation of a range of support for Commercial Enterprise,

Technology Transfer and Student Entrepreneurship activity across the University.

Successful complementary European Union funding bids are used to further develop

the support for student and alumni start-up businesses.

During the year the annual Higher Education Business and Community Interaction

survey (HEBCIS) was published and showed the total annual value of LJMU’s

interaction with business and the community reached £16.6m. Ranked against the

165 UK HEIs in the survey, LJMU was 46th (2009 48th) for the total value of

interaction with business and the community.

commercial enterprise,technology transfer andstudent entrepreneurship

03/04

Enterprise Income

0

2

4

6

05/06 07/08 09/10

£m

16

In 2010/11 the University’s commercial

enterprise turnover reached £4.5m.

During the year, 26% of income from commercial enterprise and

technology transfer activity came from international contracts.

Average contract value was £25.6k (up from £20.5k in 2009/10)

During the year, preparations were made for the opening

of LJMU’s dedicated Centre for Entrepreneurship.

A Knowledge Transfer Partnership between LJMU’s School of Engineering,Technology and Maritime Operations and Risktec Solutions won NW RegionalPartnership Award 2011.The project saw the development of a range ofaccredited qualifications (Certificate, Diploma and MSc) in Risk and SafetyManagement for high hazard industries. Other successful KTPs completed duringthe year included 2 year partnerships with Alder Hey Children’s NHS FoundationTrust, Merseyside Fire and Rescue Service and the British Red Cross.

In 20010/11 the number of students undergoing bespoke

entrepreneurship training grew to over 1,600, the high

profile and popular Start-Up Network attracted 249 new

members (making membership of nearly 1,500) and

Enterprise Fellowships were awarded to support the

establishment of more than 21 student businesses.

During the year, LJMU partnered with Cheshire Constabulary to jointly designa Postgraduate Certificate in Forensic CCTV Analysis. This unique, accreditedprogramme will be delivered by practitioners from Cheshire Constabulary andacademics from the School of Computing and Mathematical Sciences.

17

The year saw a rationalisation of the LJMU spin out company portfolioand a number of encouraging developments with remaining companies,including Forsigs and Microsense. A range of commercialisationopportunities also emerged for the Pharmalucia technology which useslight-activated compounds principally for the infection control market.

LJMU secured contracts relating to public health, such

as the development of a partnership with Liverpool

Primary Care Trust and Liverpool City Council to

develop strategies to improve the nutritional value of

takeaway foods and work with Liverpool First for

Health and Wellbeing Partnership to train nursery staff

around nutrition for the under 5’s.

Academic partnerships strengthened through geographically

targeted initiatives in, for example, Malaysia and China. Academic

Partnership income showed 9% growth since 2009/10.

Conference and Events Services income showed 21% growth since2009/10 and the team’s expertise in event management wasdemonstrated in three successful graduation events during the year.

LJMU was the provider of choice for over 70 SMEs whoengaged with the University via the NWDA InnovationVouchers Scheme which drew to a close during the year.

LJMU’s Summer Semester programme was the most successful ever

with nearly 700 students from seven partner institutions studying at

LJMU for 14 weeks to top up their current awards to Honours level.

18

resourcescapital development highlights

Despite the financialclimate the Universityhas continued toinvest in its capitalprogramme andwork has beenongoing at all threeCampus areas.

Continuing on from the opening of the £25.5m Tom Reilly Buildingduring 2009/10, this state-of-the-art building, which houses theSchool of Sports and Exercise Sciences and the School of NaturalSciences and Psychology, offers some of the best facilities in theworld. These include appetite laboratories, psychology testing labs,neuroscience labs, an indoor 70-metre running track, physiologysuites, a DEXA scanner for measuring body fat, muscles and bonedensity, a driving simulator and a chronobiology lab.

19

Development of the Redmonds’ Building, a £34m generalteaching and screen academy development for the Facultiesof Business and Law and Media, Arts and Social Science, isongoing. Demolition of the existing building has beencompleted and the new build work has commenced. Theproject is on time and cost and is due for completion inJune 2012. Students and staff will be using the building andits facilities from the beginning of the 2012 academic year.

The University has now acquiredthe former Royal Mail Site atCopperas Hill for the sum of £2.6million. The acquisition of thismajor building now provides asolution to the challenge ofrelocation of the Faculty ofEducation Community and Leisure,currently located in the IM MarshCampus for which the Masterplanning work is now underway.

On City Campus the window replacement and cladding project,3rd floor refurbishment of teaching accommodation, 2 lecturetheatre refurbishment projects and the high voltage infrastructureare complete. A further £2m funding has been released to continuewith the next phase of this refurbishment work and this will includerefurbishment of all general teaching accommodation on the firstfloor and also a number of lecture theatre enhancements. MaxPerutz Building - the University has received confirmation fromLiverpool City Council that planning approval has been granted. It isanticipated that the total project cost will be £6.5 million and workwill commence on site in January 2012.

20

resourcesIT developments

Significant progress has beenmade on the new studentsystem, Campus Solutions,

with some modules going livein September 2010 and the

remainder over the course ofthe academic year with allstudents enrolling through

the system for the 2011/12.

IT resilience has been further secured by the purchase andinstallation of an innovative Hewlett Packard PerformanceOptimised Datacenter (POD). The overall system ofpower supply and storage, the first of its kind deployed inthe UK, represents a huge step forward for LJMU’scomputing network users, not only in terms of energyefficiency and sustainability, but also reliability and peace ofmind for its end users.

21

resourcesenvironmental sustainability

A Carbon ManagementProject Board is establishedto oversee the University’scommitment to the carbonmanagement programme,carbon reductioncommitment, Ecocampus andthe ‘People and Planet’ greenleague table, as part of theUniversity’s corporate andsocial responsibility agenda.

The University has developed andapproved a comprehensive CarbonManagement Plan and Programmewhich is assisting the University toface the future challenges, such asrising utility costs and compliancewith legislation. It will also assist incontrolling operating costs andmaking a significant contribution togovernment and HEFCE carbonreduction targets.

The Plan is underpinned byvarious policies and strategiesincluding the EnvironmentalPolicy, the Procurement Strategy,the Sustainable ProcurementPolicy, the Travel Plan, theBiodiversity Policy, the CarbonManagement Policy, the EnergyPolicy, the Waste and RecyclingPolicy and the Print Strategy.

22

We haveregistered as amandatoryparticipant to theCarbon ReductionCommitment(CRC) scheme.

The first two yearsof the carbon

management planshould deliver a saving

of approximately2,620 tonnes CO2

which equates to 70%of our 25% target.

An additional year has been added to the project plan

which increases our target from 25% by 2013/14 to

28% (4,190 tonnes CO2) by 2014/15. (This continues

to move our target closer to the governments targets

of 34% by 2020 and 80% by 2050 based on 1990

emissions, and HEFCE targets of 43% by 2020 and 83%

by 2050 based on 2005/6 Scope 1 and 2 emissions.)

During the year our efforts have been rewarded through beingawarded the Ecocampus environmental management systemBronze award in April 2011 (just six months after registering),

received a First Class Honours in the People and Planet GreenLeague Table (the highest rating of the Liverpool based

Universities), we were also presented with a certificate by theChief Executive of the Carbon Trust in recognition of our work

in reducing emissions, cutting costs and the mitigation of climatechange during 2010 and we are finalists in the 2011 North West

Excellence Awards within the Sustainability category.

The majority of2010/11 carbonreduction projectshave beencompleted and the2011/12 programmeis underway.

23

sports facilitiesAn agreement with Liverpool City Council’s Sports and Leisure Division provides the following facilities to studentsand staff:

The provision ofgeneral access toa range of sportsand leisurefacilities across theLife Style venues.

To progressively allowthe relocation of thoseacademic programmesthat have a sport relatedcomponent which arecurrently delivered at theIM Marsh Campus to theWavertree Centre.

To enable the LSU toprovide facilities forits club and societies,presently providedeither at IM Marsh orpurchased fromprivate providers.

24

26

results for the yearThe University’s consolidated Income, Expenditure and Resultsfor the year to 31 July 2011 are summarised as follows:

2010/11 2009/10

£000 £000

Income 176,267 178,971

Expenditure 167,270 176,672

Surplus after depreciation of assets at valuation and before tax 8,997 2,299

Loss on disposal of fixed assets - (3,114)

Surplus/(deficit) after depreciation of tangible fixed assets at 8,997 (815)valuation and disposal of fixed assets and before tax

Share of Operating (loss)/profit in associate 15 58

Taxation - -

Surplus/(deficit) before Exceptional Item 9,012 (757)

Fundamental Restructuring Costs - (8,009)

Surplus/(deficit) on continuing operations after depreciation of 9,012 (8,766)tangible fixed assets at valuation, disposal of assets and tax

Surplus/(deficit) for the year transferred to accumulated income 96 (153)in endowment funds

Surplus/(deficit) for the year 9,108 (8,919)

Surplus/(deficit) for the year on a historical cost basis 9,838 (5,180)

An underlyingoperatingsurplus of£12.7m

Historicalcost surplusfor the year

£9.84m

Capitalexpenditure

£21.1m

Incomedecreaseof 1.5% to£176.3m

Decreasedexpenditureof 5.3% to£167.3m

Net worthat £101mbeforepensionliabilities

27

income and expenditure account2010/11 has been an excellent year as a result of the continuing

strategic approach to the finances of the university with an outturn

surplus of £9.8m for the year. An underlying operating surplus of

£12.7m was achieved. The annual FRS17 charge was £2.86m with

the Pension liabilities in the Balance Sheet increasing by £1.1m.

Total Income decreased by 1.5% to £176.3m. The main decrease

was due to HEFCE core funding of £5.2m, research income and

capital grants. This was partly compensated by HEFCE and TDA

earmarked grant increase of £1.5m. Decreases in Research

Council, and Health contracts were compensated by equivalent

increase in collaborative income.

Expenditure decreased by 5.3% to £167.3m. Staff costs have

decreased by 5.5% which reflects the fundamental restructuring

which took place last year and has assisted with the delivery of

significant savings in this and future years. Other operating costs

also decreased as part of the overall savings targets achieved

throughout the university. The impact of FRS17 (Retirement

Benefits) was a decrease to group surplus of £2.86 (2009/10

£4.2m).

28

balance sheetThe Balance Sheet has maintained its strength. Income and Expenditure Reserves excluding the

Pension Reserve (associated with FRS17) are £53.9m showing a significant increase of £12.7m

compared with the previous year. However following the increase in revaluation reserve last year

as a result of the property valuation, the revaluation reserve has decreased this year by £0.7m to

match depreciation with the revaluation. The pension liability reserve has increased by £1.1m. Total

reserves are now £36.3m compared to £25.4m the previous year.

Fixed Assets have increased by £11.7m. Assets under Construction are £17.3m (09/10 £6.7m)

following the reclassification of the building works at Tithebarn and Byrom Street and the current

value reflects in the main the spend on the Redmonds’ Building.

Cash deposits have increased by £6.83m during the year and a further tranche of £10m of

borrowing was drawn down. Capital expenditure was £21.1m.

200

150

100

50

003/04 05/06 07/08 09/10

Income and Expenditure

£m

29

governance and riskThe University’s governance practices are

consistent with the revised “Guide for

Membership of Higher Education Governing

Bodies in the UK” by the Committee of

University Chairman (CUC), published in

November 2004.

The University remains strongly committed

to adopting best practice in terms of

Governance and Management. The

management system has been developed and

improved since 2002 using the EFQM

Excellence model framework. Building on the

success of becoming the only university in

Europe ever to reach the standard required

to win a full excellence award (winning the

UK Excellence Award in 2008) The University

has since been a finalist in the European

Excellence Award, going on to be announced

as a Prize Winner in the category of ‘Building

Partnerships’ at the awards ceremony in

Munich in October 2011.

Risk management has been incorporated into

the corporate planning and decision making

processes of the University. The Institutional

Risk Register is reviewed on a regular basis in

conjunction with the periodic assessment of

performance against objectives.

30

futureDuring the last 12 months the political and economic climate hascontinued to change significantly. The university has determined its fee levelto be £9,000 and acknowledges that there remains continued uncertaintysurrounding funding levels, costs and tuition fees. The next 4 years will bean extremely difficult period.

The University is however determined to deliver its strategic plan andcontinue with its ambitious capital programme. This will require focus andhard decisions. The SMG have a plan of activities over the next 6 monthswhich will have both short and medium term impact on sustainability.

conclusion2010/11 has been an extremely successful year and this along with ourstrong leadership and strategic direction places LJMU in a strong androbust position to deal with the challenges and difficulties we will face inthe financial climate ahead.

Sir M Thornton, Chairman

31

delivering the public benefitLiverpool John Moores University (LJMU) is a Higher

Education Corporation (HEC), as defined by the Education

Reform Act 1988.

The powers of the HEC are defined in Section 124 of the

1988 Act as amended by the Further and Higher Education

Act 1992, and subject thereto any relevant regulations, orders

or directions made by the Secretary of State or Privy Council.

These powers include the power to provide higher and

further education and to carry out research and to publish

the results of such research.

The corporation has exempt charitable status as defined under

the Charity Act 1993. As an exempt charity the University is

regulated by HEFCE by virtue of the Charities Act 2006.

statement of public benefitThe Board of Governors has complied with its duty to have

due regard to the guidance on public benefit published by

the Charity Commission and particularly to its

supplementary public benefit guidance on the advancement

of education, in accordance with the requirements of

HEFCE acting as principal regulator of English higher

education institutions under the Charities Act 2006.

32

mission, vision and valuesThe University’s mission, vision and values reflect LJMU’s

commitment to the public benefit. LJMU’s mission is to

serve and enrich our students, clients and communities by

providing opportunities for advancement through

education, training, research and the transfer of knowledge.

Since becoming a university, LJMU has grown substantially to

extend the scope and accessibility of higher education in

the UK. From around 8,000 students in 1988, LJMU now

has more than 25,000 students studying across its 5 faculties,

with approximately 8,000 students graduating this year.

LJMU’s core values are embedded in the University’s

Strategic Plan which illustrates clearly the University’s

commitment to the public benefit:

To create appropriate high

quality opportunities that

enable learning,

advancement, development,

and employment, and that

are open to as many

individuals and

communities as is

achievable and sustainable.

To create and support

opportunities for

successful participation by

under-represented groups,

as well as for continuing

personal, professional and

skills development for all

members of the

University.

33

To create an environment inwhich staff and students canengage in research that isinnovative; that contributes toknowledge or to professionalpractice; that encouragespersonal and professionaldevelopment; that enhanceslearning; or that is of social oreconomic importance tocommunities.

To reinforce the entirerange of activities with

a culture ofscholarship, and with a

growing body ofspecific research that isconsistently of national

and internationalstanding and benefit.

To endeavour throughpartnership andenterprise to impactupon economicdevelopment andregeneration, as well associal and culturaladvancement, whetherat local, national orinternational levels.

34

This section highlights areas in which LJMU has carried out its activities for the

public benefit during the year in furtherance of its mission to serve and enrich

students, clients and communities.

Research: LJMU is one of the leading UK Universities for Sport & Exercise Sciences;General Engineering; Public Health; and Astrophysics research; for example, LJMU designed,built, and now operates the world’s largest robotic astronomical telescope.

The Liverpool Science Park is a joint venture with the University of

Liverpool and Liverpool City Council, fostering and facilitating growth

in the knowledge economy in Liverpool.

University academic staff are expected to publish the results of research they have

undertaken in peer reviewed academic journals, to publish books, to submit and present to

research conferences and to feed that research into their teaching. The University makes

available publicly, via its website, access to its research archive and has collaborative and

reciprocal arrangements in place with other university libraries for access or borrowing

facilities for students and academic staff.

Economic Development: LJMU manages European Development

Fund Contracts worth £34m for the benefit of the regional economy, and

generates about 4 pence in every pound of Liverpool’s economic output per

head of population. Since 2003, LJMU graduates have started over 40 companies.

Student Access: Under the Government fair access initiative two-thirds of students are eligible

for LJMU bursaries, of which 65% come from low income households. The University was accredited by the

Frank Buttle Trust in recognition of its record of providing higher education to young people leaving social care.

In 2009, the University received an endowment of £260,000 from Yoko Ono, widow of John Lennon who was

a student at a predecessor institution to LJMU, to continue this work.

The University also provides funds to support students experiencing financial hardship and is part of an

initiative set up by the Financial Services Authority to improve the financial management/awareness of students.

The University provides a range of personal support services to its students, such as

guidance and advice on essential academic and personal skills, individual teaching and

learning plans for students with a declared disability, and student counselling.

35

Excellence: LJMU has been using the principles of Business Excellence since 1997,when the University became EFQM Member. LJMU has been actively using the EFQMExcellence as the basis for its management system since 2002. LJMU won the UKExcellence Award in October 2008 and were Finalists in the EFQM (European level)Excellence Award in 2009 and 2010, going on to be announced as a Prize Winner in thecategory of ‘Building Partnerships’ at the awards ceremony in Munich in October 2011.

LJMU continues to offer public benefits under the terms and guidance of the

Charity Commission, to students, staff, the local community and wider society by

way of a number of activities and initiatives:

Responsible Employer: LJMU was the first University ever to achieve the Investors inPeople Work Life Balance recognition, features in the 2011 Stonewall 100 list of Britain’s topemployers for lesbian, gay and bisexual staff, and has recently been awarded the Migrant WorkersCharter Certificate.

LJMU has invested in a ground breaking partnership with Liverpool City Council toprovide all students and staff with free access to the City Council’s Lifestyles fitnesscentres, thus encouraging students and staff to adopt a healthy lifestyle.

Trading with Integrity: As one of the largest employers in the Greater

Merseyside region, LJMU continues to develop its approach to ethical trading. This is done

through the purchase of Fairtrade goods where possible and appropriate, balancing always

the benefits of developing educational opportunities for the citizens of the world with a

careful consideration of the political, ethical and human rights records of the governments

of those countries in which LJMU operates or recruits students.

Community: As a major employer in the region, with some 2,500 staff and 25,000

students in Liverpool, LJMU contributes significantly to the local economy. The University is

mindful of its obligations to be a good neighbour, and engages frequently with the Local

Authority and community groups to consult on the impact of LJMU operations. This

includes an imaginative partnership with the Liverpool Students’ Union through which

student community representatives help to manage the relationship between local residents

and the student population. There is also a staff and student volunteering scheme, which

helps teams of LJMU people to work on valuable projects for the benefit of the community.

36

LJMU takes an active role in supporting the region, with many LJMU staff taking roles in

local companies, agencies, arts groups, charities, schools and colleges, thereby contributing

to economic growth, as well as the social and cultural wellbeing of the region.

LJMU’s World of Work (WoW®) is a strategic employability initiative thatengages hundreds of local employers and provides the City/Regional economywith a graduate talent pipeline that produces talented workers who have theskills employers are looking for. Business and other employers, (international,national and local) work with the University through visiting lectures, work-basedopportunities and assessing and certifying the skills students have developed.

As a flag-ship of LJMU’s community engagement, the Roscoe Foundation for Citizenship

promotes good citizenship amongst the young people in the Greater Merseyside region. More

than 900 schools are engaged in the scheme, to promote good citizenship to school children by

making awards to role models in society. The Foundation also runs the prestigious Roscoe

Lecture series, securing high profile speakers from the national and international community to

present thought-provoking public lectures that are free and open to the community in the

North West. Audiences typically number over 1,000 (and sometimes reach 2,500) and tickets

are free of charge. Speakers have included notable people from the fields of national and

international politics and diplomacy, academe, religion and belief, journalism and entertainment.

LJMU’s academic activity also has many public benefits. For example, LJMU’s world-leading

Astrophysics Research Institute owns and operates the World’s largest and most sophisticated

Robotic Telescope, based in the Canary Islands, and time on this telescope is made available to

the National Schools' Observatory alongside its function as a National Facility for research.

The LJMU-led project in turn brings leading edge astronomy into British classrooms in over

1,000 schools in order to stimulate and enhance young peoples’ enthusiasm for science and

technology. The Institute also helped found, and continues to provide knowledge input to

‘Spaceport’, a locally based major tourist attraction, owned by Mersey Travel.

Sustainable Environment: Liverpool John Moores University (LJMU) has long

recognised the importance of sustainability and it is integral to the University’s Corporate Social

Responsibility (CSR) agenda. For many years, LJMU has demonstrated best practice within the

Higher Education sector across a wide range of sustainability activities. These include:

n Reducing LJMU’s adverse impact on the environment

n Being a positive force in Liverpool and the wider community

n Being a responsible employer and a trusted and ethical trading partner

n Striving for continuous environmental improvement throughout all staff and student activities

37

In 2007 the University established a sustainability web site and a Sustainability Facilitators

Group. The aims of the group are to assist in implementing the Environmental Policy by

raising awareness and assist in minimising the university’s impact on the environment.

The group of volunteers comprises of representatives of staff and students.

The LJMU estate portfolio includes a wide range of buildings of various ages, type, andconstruction within the vibrant city of Liverpool. The three main campus areas consistof over 45 buildings, 24,500 students and 2,500 staff. Our operations have a local,national and global environment impact. The role of sustainability is to reduce thisimpact through an extensive programme of environmental improvements and carbonreduction initiatives that impact on all activities and stakeholders across the institution.

LJMU also won the Best Travel Plan Award in 2007 from Merseyside Integrated Transport Authority for its work in

promoting sustainable travel choices. Work on these plans has continued and the results of the 2009 Travel Survey

showed reductions in single car occupancy rates between 2005 and 2009 (16% for staff and 7% for students).

LJMU is currently participating in the Carbon Trust’s Higher Education Carbon Management Programme (Phase 5

2009/10). LJMU has already gained accreditation from the Carbon Trust Energy Efficiency Scheme (2007) and was

awarded the Carbon Trust Standard in 2009. LJMU has a successful Waste and Recycling programme, a PRINT

strategy to reduce paper and energy consumption, a Sustainable Procurement Policy and has Fairtrade status. These

improvements are consolidated into LJMU’s Carbon Management Plan, which addresses the need to conserve

energy and water, save money, maintain finite resources for longer and contribute towards reducing climate change.

LJMU also won the Best Travel Plan Award in 2007 from Merseyside Integrated Transport Authority for its work in

promoting sustainable travel choices. Work on these plans has continued and the results of the 2009 Travel Survey

showed reductions in single car occupancy rates between 2005 and 2009 (16% for staff and 7% for students).

LJMU is currently participating in the Carbon Trust’s Higher Education Carbon Management Programme (Phase 5

2009/10). LJMU has already gained accreditation from the Carbon Trust Energy Efficiency Scheme (2007) and was

awarded the Carbon Trust Standard in 2009. LJMU has a successful Waste and Recycling programme, a PRINT

strategy to reduce paper and energy consumption, a Sustainable Procurement Policy and has Fairtrade status. These

improvements are consolidated into LJMU’s Carbon Management Plan, which addresses the need to conserve

energy and water, save money, maintain finite resources for longer and contribute towards reducing climate change.

The Carbon Management Plan brings together policies into a cohesive framework with ongoing

rolling targets. The targets seek to exceed existing governmental targets. The Carbon Management

Plan acts as the catalyst for driving forward further improvements and cultural change across the

University, demonstrating LJMU’s commitment to becoming a low carbon university. In addition,

LJMU is currently moving towards ISO14001 accreditation via the nationally recognised EcoCampus

scheme and the development of an Environmental Management System.

38

The initial target was a 25% reduction in carbon emissions against abaseline year of 2008/09 over a period of five years to 2013/2014.

The CMP is a rolling programme of initiatives and a further year has been added to

the plan which has increased the target from 25% by 2013/14 to 32% by 2014/15.

This continues to move our target closer to the government’s targets of a 34%

reduction by 2020 and 80% reduction by 2050.

LJMU received a First Class Honours in the People and Planet Green League table,

with a rating of 31st out of 142 universities. This was a move up from the previous

year’s award of a 2:1 and the highest rating of all the Liverpool-based universities.

LJMU works closely with the Liverpool Students Union(LiverpoolSU) with regards to all sustainability issues and assistedthem in gaining their Silver Award in the environmental SoundImpact Awards in 2010. This work is ongoing and being furtherdeveloped through the Getting Greener campaign.

The University achieved its Bronze EcoCampus award in

April 2011 just 6 months after registering on the scheme.

This completed the planning stage of the phased approach

towards ISO14001 (Platinum Stage) and a fully developed

Environmental Management System.

The Carbon Management Plan (CMP) was approved by the Strategic Management

Group and the Board of Governors in March 2010. This demonstrates the senior

level of commitment and monitoring. The main objectives of the Plan are to

establish a strategic implementation of carbon reduction measures and embed

awareness into all processes and practices.

39

board of governorsThe University is an independent Higher Education Corporation whose

authority derives from the Education Reform Act 1988, and the Further

and Higher Education Act 1992.

The Board of Governors derive their authority from the University’s

Instrument and Articles of Government which was approved by the Privy

Council on 5 March 1993, and revised in 1995 and 2002.

The Instrument and Articles of Government states that the Board shall

consist of not less than twelve and not more than twenty-four appointed

members. The Board must decide what size it wishes to be. The Board

currently consists of twenty members, of whom up to thirteen would be

independent members, one nominee each from the Academic Board and

students, two staff governors and two co-opted members. The

membership of the Board is completed by the Vice Chancellor, who is the

Chief Executive.

In the period from 1 August 2010 membership of the Board of Governors

has been as follows: -

40

Ex-officio Members

Professor M A Brown Vice Chancellor & Chief Executive

(Retired 31st August 2011)

Professor Vice Chancellor & Chief ExecutiveNigel Weatherill (Appointed 1st September 2011)

External Independent Members

Sir M Thornton Chairman and Pro ChancellorChairman of Remuneration CommitteeChairman of Nominations CommitteeFinal term extended upon approval of the Board on 20th September 2010

Ms K Byrne

Mr J Carson

Ms C Dove Re-appointed 1 August 2010

Sir J Dwyer Retired 11 September 2011

Sir D Henshaw

Mr R Hill Chairman of Finance Committee

Mr A Holroyd

Sir B Massie Re-appointed 1 February 2011

Mr G Morris Deputy Chairman Finance Committee

Mrs A Redmond Deputy Chairman Audit Committee

Ms D Shackleton Chairman of Audit Committee

Judge Elizabeth Steel Chairman of Employment CommitteeFinal term extended upon approval of the Board on 20 September 2010

External Co-opted Members

Mr A Bell Co-opted Governor from Health Sector

Mr P Holme Co-opted Governor from Education Sector Deputy Chairman of Employment Committee

Nominee Members

Ms K Johnston Staff Governor (Academic Board Nominee)(Retired 17 April 2011)

Ms L Rumsey Student Governor (Student President)(Retired 13 June 2011)

Dr T Livsey Staff Governor (Academic Board Nominee) Appointed 18 April 2011

Mr D McCabe Student Governor (Student President)Elected 27 June 2011

Staff Members

Mr M Grayshon Staff Governor (Non Teaching Staff)Retired 25 September 2011

Professor P Lisboa Staff Governor (Teaching Staff)

The Board of Governors are the Trustees of the University.

officers and advisors of the universityVice-Chancellor and Chief Executive: Professor Michael Brown (retired 31st August 2011)

Professor Nigel Weatherill (appointed 1st September 2011)

Bankers: Barclays Bank plc, 6th Floor, 1 Marsden Street, Manchester M2 1HW

External Auditors: KPMG LLP, St James’ Square, Manchester M2 6DS

Solicitors: Davies Wallis Foyster, 5 St Pauls Square, Old Hall Street, Liverpool L3 9AE

Internal Auditors: Deloitte & Touche LLP, Horton House, Exchange Flags, Liverpool L2 3PG

41

RESPONSIBILITIES OF THE BOARD OF GOVERNORS

OF LIVERPOOL JOHN MOORES UNIVERSITY

In accordance with the Education Reform Act 1988, the Board of Governors of the University is responsible for the administration andmanagement of the affairs of the University and is required to present audited financial statements for each financial year.

The Board of Governors is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financialposition of the University, and to enable it to ensure that the financial statements are prepared in accordance with the Education Reform Act,the Statement of Recommended Practice on Accounting for Further and Higher Education Institutions and relevant Accounting Standards. Inaddition, within the terms and conditions of a Financial Memorandum agreed between the Higher Education Funding Council for England andthe Board of Governors of the University, the Board of Governors, through its designated office holder, is required to prepare financialstatements for each financial year which give a true and fair view of the state of affairs of the University and of the surplus or deficit and cashflows for that year.

In causing the financial statements to be prepared, the Board has ensured that:

n Suitable accounting policies are selected and applied consistently.

n Judgements and estimates are made that are reasonable and prudent.

n Applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements.

n Financial statements are prepared on the going concern basis unless it is inappropriate to presume that the University will continue inoperation. The Board is satisfied that the University has adequate resources to continue in operation for the foreseeable future; for thisreason the going concern basis continues to be adopted in the preparation of the financial statements.

The Board has taken reasonable steps to:

n Ensure that funds from the Higher Education Funding Council for England and the Training and Development Agency are used only for thepurposes for which they have been given and in accordance with the Financial Memorandum with the relevant Funding Council and anyother conditions which the Funding Council may from time to time prescribe.

n Ensure that there are appropriate financial and management controls in place to safeguard public funds and funds from other sources.

n Safeguard the assets of the University and prevent and detect fraud.

n Secure the economical, efficient and effective management of the University's resources and expenditure.

Sir M Thornton

Chairman

21 November 2011

42

43

CORPORATE GOVERNANCE

The University is committed to adopting good practice in all aspects of

corporate governance. It aims to conduct its business in accordance with

the principles identified in the Committee on Standards in Public Life

(selflessness, integrity, objectivity, accountability, openness, honesty and

leadership) and the Committee of University Chairmen (CUC) Guide for

Members of Higher Education Governing Bodies in the UK, known as the

Combined Code. The Board of Governors has adopted the CUC’s

Governance Code of Practice and works to ensure that governance

practice remains consistent with the principles of the Code. The Combined

Code was superseded by the UK Corporate Governance Code in May

2010 and applies to year ends beginning on or after 29 June 2010.

Therefore the new Code is applicable to the higher education (HE) sector

for the first time for the year ended 31 July 2011. The Board of Governors

has considered the new Code and how this applies to the University.

Summary of the University’s Structure of Corporate

Governance

The University is an exempt charity and as such is required to undertake

activities which are in accordance with its aims and objectives and which

are for the public benefit. The University has had regard to the Charity

Commission’s guidance on public benefit, and information on how the

University has delivered its charitable purposes for the public benefit is set

out on page 32.

The University’s Board of Governors comprises lay, academic, student and

other staff persons appointed under the provisions of the Education

Reform Act 1988, the majority of whom are independent and non-

executive. The composition of the Board of Governors is set out on page

41. The role of Chairman of the Board of Governors is separate from the

role of the University’s Chief Executive, the Vice Chancellor. The matters

reserved specifically to the Board of Governors for decision are set out in

the Articles of Government of the University, the Scheme of Delegation

and under the Financial Memorandum (FM) with the Funding Council for

England (HEFCE).

The Board of Governors holds to itself the responsibilities for the educational

character, the ongoing strategic direction and the financial solvency of the

University. The Board, in addition to its formal Board and Committee

meetings, holds a number of strategic workshops and a residential strategic

event each year, affording it the opportunity to influence strategic issues at an

early stage in their development. The Board is also responsible for approval

of major developments, including property developments, and is in receipt

of regular reports from Executive Officers on the day-to-day operations of

the University’s business and its subsidiary companies.

The Board of Governors has a strong and independent non-executive

element and no individual or group dominates its decision-making process.

The Board is independent of management and free from any business or

other relationship which could materially interfere with the exercise of its

independent judgement.

Upon commencing appointment, Governors are required to declare any

pecuniary, family or other personal interest, direct or indirect, and this is

noted in the Register of Members’ Interests. Governors are expected to

update their entry at any time as and when their circumstances change

and the University conducts an annual update in accordance with the

recommendations of the CUC. The Registers of Interests for both the

Board and University’s Senior Management are published on the

University website. Upon appointment, Governors are also required to

sign a statement of confidentiality.

In accordance with the introduction of the new Bribery Act 2010 the

Governors have taken responsibility for establishing an anti-corruption

culture formulated around the six general principles of: Proportionate

procedures; Top-level commitment; Risk Assessment; Due diligence;

Communication (including training); and Monitoring and review.

A statement of commitment from the Chairman of the Board of

Governors outlines that the Board of Governors expects that all staff,

associates and agents will conduct business in accordance with the highest

standards of ethical behaviour and that any bribery, or any form of

corruption, by a member of staff of the University will be considered gross

misconduct and the member of staff may face dismissal. Agents,

consultants and business partners who work with, or on behalf of the

University, must act with integrity and behave ethically. The University will

terminate agreements with such agents, consultants and business partners

in the event of any breach of anti-bribery law, corruption or unethical

behaviour.

The Board of Governors meets a minimum of four times a year and has

several Committees: a Finance Committee; an Employment Committee;

a Remuneration Committee; a Nominations Committee and an Audit

Committee. All of these Committees are formally constituted with terms

of reference and comprise lay members of the Board of Governors. The

Chairman is not a member of the Audit Committee and there is no

overlap in membership of the Audit and Finance Committees. The Vice-

Chancellor is not a member of the Audit Committee and attends that

Committee in his capacity of Chief Executive. The Board of Governors

and its Committees review their terms of reference on a regular basis

with a view, inter alia, to ensuring that they are embedding risk effectively

into their work. In addition to its formal meetings, the Board holds

workshops and a residential strategic event during the year, at which items

of strategic importance are disclosed. The Chairman of the Board of

Governors is Sir Malcolm Thornton. The full Board of Governors met on

44

20 September 2010, 11 October 2010 (Governors Workshop), 22

November 2010, 6 December 2010, 10 January 2011 (Networking

Event), 26 and 27 January 2011 (Overnight Strategic Event), 14 February

2011, 28 March 2011 and 4 July 2011.

The Finance Committee meets at least three times a year and

recommends to the Board of Governors the University’s annual revenue

and capital budgets after giving consideration to the financial health of the

University. It also receives at each meeting reports on the University’s

performance in relation to approved budgets, estate related capital

investment plans and treasury management. The Chairman of the Finance

Committee is Mr Rod Hill and the Deputy Chairman is Mr Graham

Morris. The Finance Committee met on 8 November 2010, 14 March

2011, and 20 June 2011.

The Employment Committee meets at least 4 times a year and considers

issues related to staffing and employment in the University. The

responsibilities of the Committee also encompass equality and diversity

monitoring and the regulatory aspects of the University’s relationship with

the student body. The Chairman of the Employment Committee is Her

Honour E Steel DL and the Deputy Chairman is Mr Paul Holme. The

Employment Committee met on 23 September 2010, 18 October 2010,

14 February 2011, 7 March 2011 and 6 June 2011.

The Remuneration Committee, which meets at least once a year,

considers the performance and determines the annual remuneration of

the Vice Chancellor and Senior Officers of the University. The Chairman

of the Remuneration Committee is Sir Malcolm Thornton. The

Remuneration Committee met on 9 February 2011 and 9 March 2011.

The Nominations Committee meets at least once a year, more regularly

if necessary, and considers membership issues and appointments to

vacancies on the Board for non-executive members. The Committee also

advises the Board of Governors of attendance statistics on an annual basis

and supports any necessary intervention that the Chairman of the Board

should make in instances of low attendance. Issues around attendance are

discussed by the Chairmen of Committees as part of performance review

meetings with individual Governors. The Chairman of the Nominations

Committee is Sir Malcolm Thornton. The Nominations Committee met

on 16 September 2010.

The Audit Committee, which meets at least four times a year, is

responsible for overseeing the work of the external auditors and internal

auditors and considers detailed reports together with recommendations

for the improvement of the University’s systems of internal control and

management’s responses and implementation plans. The Committee also

receives and considers reports from HEFCE as they affect the University’s

business, monitors adherence with the regulatory requirements and

reviews the University’s accounting policies. Whilst the Vice-Chancellor

and other managers attend meetings of the Audit Committee as

necessary, they are not members of the Committee. The Committee is

empowered to meet any auditors on their own for independent

discussions should this be decided to be necessary by either party. In

2010 the Terms of Reference for the Audit Committee were reviewed

and amended to take account of the new requirements within the FM for

regulation under the Charities Act 2006 and its specific implications for the

work and responsibilities of the Audit Committee. The FM sets out the

formal relationship HEFCE and the governing bodies and designated

officers of higher education institutions (HEIs) it funds. It reflects HEFCE’s

responsibility to provide annual assurances to Parliament that: Funds are

being used for the purposes for which they were given; risk management,

control and governance in the sector are effective; and value for money

is being achieved. The Chairman of the Audit Committee is Ms Deborah

Shackleton and the Deputy Chairman is Mrs Alexis Redmond. The Audit

Committee met on 4 October 2010, 1 November 2010, 21 February

2011, 13 June 2011 and 18 July 2011.

In the opinion of the Board of Governors, the governance practices of the

University are consistent with the “Guide for Membership of Higher

Education Governing Bodies in the UK”, published by the CUC in

February 2009, and superseded by the UK Corporate Governance Code

in May 2010, with the following exception: that in light of the

unprecedented challenge in the HE sector, it is clearly of fundamental

importance that the Board should ensure continuity, stability and

continuing effective governance, and this need was heightened

exceptionally at LJMU when, during the same period, the critically

important succession to the position of Vice Chancellor and Chief

Executive took place. In this respect, therefore, it was agreed at the Board

of Governors Meeting on 20 September 2010 that the University’s 7

most experienced Governors, (which included the Chairman), defined as

those serving in their (final) third term as at 1 September 2010, would be

extended in office by 2 years from the date when their individual term of

office normally would have concluded. Without this action 3 of the

Governors would have completed their final term before 31 July 2011.

The Board of Governors approved the appointment of the new Vice-

Chancellor and Chief Executive at its meeting held on 14 February 2011

and he took up post on 1 September 2011.

During 2009 the Board of Governors conducted an in-depth review of

the effectiveness of institutional governance arrangements of the

University. Such an intensive improvement review is conducted every 4

years with any actions/enhancements implemented in the meantime and

as and when the need arises. The review determined that there continues

to be a high level of satisfaction within the Board of Governors and the

Executive with the current governance arrangements within the University,

alongside a commitment to self-evaluation and continuous improvement.

The recommendations arising from the review were implemented during

2009/10. The Board recognises that the maintenance of good corporate

45

governance arrangements is an ongoing process and a programme of

governance work was undertaken in 2010/11, in addition to the

implementation of the recommendations of the Governance Effectiveness

Review. 2010/11 saw an exceptionally busy year for Governors during a

period of great change for the HE sector with particular reference to the

external environment, including the decision on fees and the access

agreement.

Internal Control

The University’s Board of Governors is responsible for the University’s

system of internal control and for reviewing its effectiveness. Such a

system is designed to manage rather than eliminate the risk of failure to

achieve policies, aims and objectives; it can therefore only provide

reasonable and not absolute assurance of effectiveness. It is based on a

framework of regular management information, administrative procedures

including the segregation of duties, and a system of delegation and

accountability.

The system of internal control is based on an ongoing risk management

process designed to identify the principal risks to the achievement of the

organisation’s objectives; to evaluate the nature and extent of those risks,

and to manage them efficiently, effectively and economically. It is

underpinned by compliance with the requirements of the core standards:

n Governance

n Financial Management

n Risk Management

Processes and control arrangements:

The University has the following processes in place:

1. The University remains committed to best practice in Governance

and Management. In 2002 the University adopted the EFQM

Excellence Model Framework and a strong strategy is in place, based

on the core business processes of Student Recruitment;

Development and Support; Learning, Teaching and Assessment;

Research and Scholarship; and Commercial Enterprise and

Knowledge Transfer. The Strategic Management Group (SMG)

continues to test the strength of its management system through

both internal and external award assessment.

2. The Strategic Management System ensures a regular review of the

University’s strategic direction. This has been reviewed over the last

18 months in response to the change of HE funding policy under the

coalition government and a new strategic plan for the period 2012

to 2017 is in preparation.

3. The Board of Governors and its Committees review their terms of

reference on a regular basis with a view, inter alia, to agreeing how

best to embed risk assessment activity into their work. The terms of

reference for the Audit Committee were reviewed and amended in

November 2010 to take into account the new reporting

requirements within HEFCE’s Financial Memorandum for regulations

under the Charities Act 2006.

4. The Board of Governors’ agenda includes a regular item for

consideration of risk. The Board receives reports on risk and the

Enterprise Risk Management arrangements from SMG and the Audit

Committee.

5. The Internal Audit Plan is derived from a high level risk assessment of

the University’s operations in consultation with University management

and the assessment makes detailed reference to the University Strategic

Plan, risk register and previous internal audit reports.

6. SMG, the Audit Committee and the Board of Governors receive

regular reports from internal audit, which include recommendations

for improvement. The Internal Auditors, who operate to the

standards defined in the HEFCE Accountability and Audit Code of

Practice, submit regular reports including independent opinion on

the adequacy and effectiveness of the system of internal control, with

recommendations for improvement.

7. SMG receives reports setting out key risk indicators and considers

possible control issues brought to its attention by early warning

mechanisms, which are embedded within the operational units and

reinforced by risk awareness training.

8. All SMG members included a section on identification, evaluation and

management of risk areas in their monthly reports to the Vice-

Chancellor during 2010/2011.

9. Risk management is incorporated into the corporate planning and

decision making process of the institution. The Enterprise Risk

Management Strategy contains a description of the institution’s risk

appetite, reflecting informal advice from the University’s internal

auditors.

10. The Risk Moderation Panel has formal terms of reference as a

working group of SMG. A combination of core and rotating

membership ensures consistency whilst at the same time as allowing

fresh perspectives on risk issues.

11. The Institutional Risk Register is reviewed on a regular basis and

procedures for identifying risks refined.

12. The principles of PRINCE2 methodology are applied in the

management of institutional projects.

46

Particular indicators of the effectiveness of the internal

control systems during 2010/11

These include:

1. The overall assessment from the HEFCE Assessment of Institutional

Risk, dated 3 June 2011, is that LJMU is not at higher risk and is

meeting the accountability obligations set out in the Financial

Memorandum between HEFCE and Institutions.

2. A UK Excellence Award winner in 2008, the University has also been

a finalist in the EFQM (European level) Excellence Award in 2009

and 2010, going on to be announced as a Prize Winner in the

category of ‘Building Partnerships’ at the awards ceremony in Munich

in October 2011. This ongoing achievement of high-level external

recognition represents a positive independent assessment of the

University’s approach to governance and management.

3. The most recent annual assessment statement by the Internal

Auditors of the University’s system of internal control, including risk

management and governance concludes that ‘Liverpool John Moores

University has a basically sound system of internal controls, which

should provide substantial assurance regarding the effective

achievement of the University’s objectives’.

4. Assessment gradings for all audits in 2010/11 were either full or

substantial. A review by the Internal Auditors into ‘Information for

Decision Making’ focussed on information required by Governors to

discharge their roles and responsibilities, with specific attention to

decision making in the current climate and assessing whether the

information currently provided is timely, accurate and appropriate to

facilitate an informed and efficient decision making process. This

review, together with a review of Performance Management KPIs,

received a full assessment grading.

5. The Carbon Management Project Board received the first year

report, for 2009/10, on progress with the Carbon Management

Programme (CMP). This showed that the potential to save carbon

amounting to 45% of the five years 25% target has been identified and

may be realised through the projects completed within the

programme’s first year. The Project Board reports to SMG and to the

Board of Governors or its Committees because of the importance

of the CMP and in accordance with requirements of the HEFCE

Financial Memorandum and HEFCE Good Practice Guidance

2010/12 on Carbon Management strategies and plans.

6. An Anti-Bribery Policy was agreed by the Board of Governors on 28

March. A Working Group has been established to identify high risk

areas and to prepare plans for implementing the policy. References

to the Bribery Act 2010 have been included in documents and

policies and a programme of communication about the Act has been

finalised ready for delivery in autumn 2011. In addition, Internal Audit

ran a workshop on identifying fraud risks. A further workshop in

2011/12 will help to consolidate a comprehensive framework of

counter-fraud and anti-corruption arrangements.

7. The University has met the reporting requirements of both the

Freedom of Information Act and the Data Protection Act for the

requests received.

8. Liverpool John Moores University continues to manage its health and

safety risks effectively and further consolidated its statutory

occupational health provision for staff and students, having made

significant progress against the targets contained in the LJMU Health

and Safety Action Plan 2010/11. The University’s insurer concluded

in its audit report that there has been an improvement in health and

safety management since its previous visit in 2009. There was a slight

increase in the total number of workplace accidents resulting in minor

injuries. However, the number of accidents that were reported to the

Health and Safety Executive (HSE) fell, along with the corresponding

staff incidence rates (used by HSE as an indicator of an organisation’s

Health and Safety performance).

9. There has been continued low referral of cases to the Office of the

Independent Adjudicator in relation to student complaints and

appeals.

10. Planning and Information (PLN) have put in place a policy that all

requests for software solutions and developments are to be

submitted to the PLN Service Desk and where appropriate go with

a business case to the Development Programme Steering Group

(DPSG) for consideration.

11. A P2P (Procure to Pay) project has introduced an e-marketplace

system: i-procurement and i-buy. Two faculties are the pilot areas for

the system that improves the efficiency of purchasing, receipting and

invoice matching, relies upon workflow processes and strengthens

controls.

12. The Audit Committee conducted a self assessment. The undertaking

of the self assessment is a demonstration that the Committee is

committed to ensuring that it is continuing to fulfil its obligations as

set out in its Terms of Reference and continuing to find ways of

enhancing its effectiveness.

The Board is of the view that there is an ongoing process for identifying,

evaluating and managing the University’s significant risks, that it has been

in place for the year ended 31 July 2011, that it is regularly reviewed by

the Board of Governors and that it accords with the internal control

guidance for directors on the Combined Code as deemed appropriate

for HE.

47

Going Concern

After making appropriate enquiries, the Board of Governors considers

that the University has adequate resources to continue in operational

existence for the foreseeable future. For this reason the Board continues

to adopt the ‘going concern’ basis in preparing the financial statements.

Independent Auditor’s Report to the Board of Governors of

Liverpool John Moores University

We have audited the group and University financial statements (the

‘‘financial statements’’) of Liverpool John Moores University for the year

ended 31 July 2011 which comprise the Group Income and Expenditure

Account, the Group and University Balance Sheets, the Group Cash Flow

Statement, the Group Statement of Total Recognised Gains and Losses

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).

This report is made solely to the Board of Governors, in accordance with

paragraph 13(2) of the University's Articles of Government and section

124B of the Education Reform Act 1988. Our audit work has been

undertaken so that we might state to the Board of Governors those

matters we are required to state to it in an auditor’s report and for no

other purpose. To the fullest extent permitted by law, we do not accept

or assume responsibility to anyone other than the Board of Governors for

our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the Board of Governors

and auditor

As explained more fully in the Statement of Responsibilities the Board of

Governors on page x the Board of Governors is responsible for the

preparation of financial statements which give a true and fair view. Our

responsibility is to audit, and express an opinion, on 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 Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures

in the financial statements sufficient to give reasonable assurance that the

financial statements are free from material misstatement, whether caused

by fraud or error. This includes an assessment of: whether the accounting

policies are appropriate to the groups and University’s circumstances and

have been consistently applied and adequately disclosed; the

reasonableness of significant accounting estimates made by the Board of

Governors; and the overall presentation of the financial statements. In

addition, we read all the financial and non-financial information in the

Operating and Financial Review to identify material inconsistencies with

the audited financial statements. If we become aware of any apparent

material misstatements or inconsistencies we consider the implications

for our report.

Opinion on financial statements

In our opinion the financial statements:

n give a true and fair view of the state of the affairs of the Group andUniversity as at 31 July 2011 and of the Group’s income andexpenditure, recognised gains and losses and cash flows for the yearthen ended;

n have been properly prepared in accordance with United KingdomGenerally Accepted Accounting Practice; and

n have been prepared in accordance with the Statement ofRecommended Practice – Accounting for Further and HigherEducation.

Opinion on other matters prescribed in the HEFCE Audit

Code of Practice issued under the Further and Higher

Education Act 1992

In our opinion, in all material respects:

n funds from whatever source administered by the University forspecific purposes have been properly applied to those purposes

n funds provided by HEFCE have been applied in accordance withthe Financial Memorandum and any other terms and conditionsattached to them.

48

Matters on which we are required to report by exception

We have nothing to report in respect of the following matter where the HEFCE Audit Code of Practice issued under the Further and Higher Education

Act 1992 requires us to report to you if, in our opinion:

n the statement of internal control included as part of the Corporate Governance Statement is inconsistent with our knowledge of the Universityand group.

Stephen Clark

For and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants

St James’ Square

Manchester

M2 6DS

Date: 28th November 2011

The maintenance and integrity of the Liverpool John Moores University website is the responsibility of the Board of Governors; the work carried out

by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have

occurred to the financial statements since they were initially presented on the website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

49

STATEMENT OF PRINCIPAL

ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with thestatement of recommended practice (SORP – 2007): Accounting forFurther and Higher Education Institutions and in accordance withapplicable accounting standards.

Basis of accounting

The financial statements have been prepared under the historical costconvention, modified by the revaluation of certain land and buildings.

Basis of consolidation

The consolidated financial statements include the University and itssubsidiary undertakings for the financial year to 31 July 2011. Intra-group sales and purchases are eliminated fully on consolidation. Inaccordance with FRS2, the activities of the Students Union have notbeen consolidated because the University does not control nor havesignificant influence over their managerial and financial policy decisions.

Recognition of income

Income from research grants, contracts and other services rendered isincluded to the extent of the completion of the contract or serviceconcerned. This is generally equivalent to the sum of the relevantexpenditure incurred during the year and any related contributionstowards overhead costs. All income from short-term deposits iscredited to the income and expenditure account in the period in whichit is earned.

Income from specific endowments and donations is included to theextent of the relevant expenditure incurred during the year, togetherwith any related contributions towards overhead costs.

Recurrent grants from the Funding Council are recognised in theperiod in which they are receivable.

Non-recurrent grants from Funding Council or other bodies receivedin respect of the acquisition or construction of fixed assets are treatedas deferred capital grants and amortised in line with depreciation overthe life of the assets.

Pension schemes

The three pension schemes for the University's staff are the TeachersPension Scheme (TPS), Universities Superannuation Scheme (USS) andthe Merseyside Pension Fund (MPF). The schemes are defined benefitschemes, which are externally funded and contracted out of the StateEarnings-Related Pension Scheme. The Funds are valued every fiveyears (TPS) by actuaries using the entry age method, or three years(MPF and USS) by actuaries using the projected unit method, the ratesof contribution payable being determined by the trustees on the adviceof the actuaries. Pension costs are assessed on the latest actuarialvaluations of the Schemes and are accounted for on the basis ofcharging the cost of providing pensions over the period during whichthe institution benefits from the employees' services. Variations fromregular cost are spread over the expected average remaining workinglifetime of Members of the Schemes after making allowances for futurewithdrawals.

Tangible fixed assets

a. Land and buildings

Land and Buildings are stated at valuation. The basis of valuation iseither open market value for existing use or depreciatedreplacement cost. CB Richard Ellis, Chartered Surveyors, revaluedthe freehold and leasehold land and buildings at 30 June 2010.Valuations normally take place every 5 years. Freehold land is notdepreciated. Buildings are depreciated over their expected usefullives of 50 years and leasehold buildings over the life of the lease.Assets in the course of construction are not depreciated.

Where buildings are acquired with the aid of specific grants they arecapitalised and depreciated as above. The related grants are treatedas deferred capital grants and released to income over the expecteduseful life of the buildings.

b. Maintenance of premises

The cost of routine corrective maintenance is charged to the incomeand expenditure account in the period in which it is incurred.

c. Telescope

The Liverpool Telescope has been capitalised at cost and is beingdepreciated over 20 years.

50

d. Equipment

Equipment, including computers and software, costing less than£10,000 per individual item, or group of related items, is written offto the income and expenditure account in the year of acquisition. Allother equipment is capitalised at cost and depreciated over 4 years.

Where equipment is acquired with the aid of specific grants it iscapitalised and depreciated in accordance with the above policy, withthe related grant being credited to a deferred capital grant accountand released to the income and expenditure account over theexpected useful life of the equipment.

e. Leases

Fixed assets held under finance leases and the related lease obligationsare recorded in the balance sheet at the shorter of the fair value of theleased assets at the inception of the lease or the life of the asset asappropriate. The excess of lease payments over recorded leaseobligations is treated as finance charges, which are amortised over eachlease term to give a constant rate of charge on the remaining balanceof the obligations.

Rental costs under operating leases are charged to expenditure in equalannual amounts over the period of the leases.

Investments

Fixed asset investments that are not listed on a recognised stockexchange are carried at historical cost less any provision for impairmentin their value.

Current asset investments are included at the lower of their originalcost and net realisable value.

Stocks

Stocks are valued at the lower of their cost and net realisable value.Where necessary, provision is made for obsolete, slow moving anddefective stocks.

Taxation status

The University is considered to pass the tests set out in Paragraph 1Schedule 6 Finance Act 2010 and therefore it meets the definition ofa charitable company for UK corporation tax purposes. Accordingly,the University is potentially exempt from taxation in respect of incomeor capital gains received within categories covered by Chapter 3 Part11 Corporation Tax Act 2010 or Section 256 of the Taxation ofChargeable Gains Act 1992, to the extent that such income or gains areapplied exclusively to charitable purposes. Subsidiary companies areliable to corporation tax.The University is partially exempt in respect of Value Added Tax, sothat it can only recover a minor element of VAT charged on its inputs.Irrecoverable VAT on inputs is included in the costs of such inputs andadded to the cost of tangible fixed assets as appropriate, where theinputs themselves are tangible fixed assets by nature.

The University’s subsidiary companies with the exception of JMUBuilding Services and Maintenance Ltd (which has the same taxationstatus as the University) are subject to corporation tax and VAT in thesame way as any commercial organisation.

Cash flows and liquid resources

Liquid resources include sums on short-term deposits with recognisedbanks and building societies and government securities.

Provisions

Provisions are recognised when the University has a present legal orconstructive obligation as a result of a past event, it is probable that atransfer of economic benefit will be required to settle the obligationand a reliable estimate can be made of the amount of the obligation.

CONSOLIDATED INCOME AND EXPENDITURE ACCOUNT For the year ended 31 July 2011

Note 2010/11 2009/10 £000 £000 Income Funding council grants Tuition fees and education contracts Research grants and contracts Other income Endowment and Investment income

1 2 3 4 5

78,192 74,809 10,320 12,661

285

82,173 73,181 12,509 10,907

201

Total income

176,267 178,971

Expenditure Staff costs Other operating expenses Depreciation Impairment Interest payable

6 8

12 11

7

101,984 52,957

7,877 -

4,452

107,881 54,282

7,578 1,492 5,439

Total expenditure

8

167,270

176,672

Surplus after depreciation of tangible fixed assets at valuation and before tax Loss on disposal of fixed assets

12

8,997

-

2,299

(3,114)

Surplus/(Deficit) after depreciation of tangible fixed assets at valuation and disposal of fixed assets and before tax Share of operating profit in Associates Taxation

9

8,997

15

-

(815)

58

-

Surplus/(Deficit) before exceptional items Fundamental Restructuring Costs

10

9,012

-

(757)

(8,009)

Surplus/(Deficit) after depreciation of tangible fixed assets at valuation and tax Transferred from/(to) endowment funds

21

9,012

96

(8,766)

(153)

Surplus/(Deficit) for the year

23

9,108

(8,919)

The income and expenditure account has been prepared in respect of continuing operations.

financial statements 2

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51

52

CONSOLIDATED STATEMENT OF HISTORICAL COST SURPLUSES AND DEFICITS For the year ended 31 July 2011 Note 2010/11

£000 2009/10

£000 Surplus/(Deficit) after depreciation of fixed assets at valuation and tax

9,108

(8,919)

Difference between historical cost depreciation charge and the actual depreciation charge for the year calculated on the revalued amount Realisation of property revaluation gains of previous years on disposal of assets

22

22

730

-

751

2,988

Historical cost surplus/(deficit) for the period after tax

9,838

(5,180)

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BALANCE SHEETS As at 31 July 2011 Note Group University

2011 2010 2011 2010 £000 £000

£000 £000

Fixed assets Tangible assets Investments Investment in associate: Share of net assets/(liabilities)

12 13

13

174,463

39

61

162,771

39

25

174,463

16,383

-

162,771

16,372

- 174,563 162,835 190,846 179,143 Endowment asset investments

14

1,979

1,646

1,979

1,646

Current assets Assets held for resale Stocks and work in progress Debtors Short-term deposits Cash at bank and in hand

12

15 18 18

1,081

51 9,108

32,128 5,253

-

45 11,460 27,854

2,710

1,081

49 8,786

32,128 4,851

-

40 10,800 27,854

1,923 47,621

42,069

46,895

40,617

Creditors: Amounts falling due within one year

16 38,734 41,450 37,744 39,753

Net current assets

8,887

619

9,151

864

Total assets less current liabilities 185,429 165,100 201,976 181,653

Creditors: Amounts falling due after more than one year

17

36,666

26,963 52,824 43,121

Provisions for liabilities and charges

19

14,996

17,323

14,996

17,323

Net assets excluding pension liability

133,767

120,814

134,156

121,209

Pension Scheme liability

27

(62,908)

(61,763)

(62,908)

(61,763)

Net assets including pension liability

70,859

59,051

71,248

59,446

Represented by: Deferred capital grants 20 32,609 31,958 32,609 31,958 Endowments Permanent Expendable

21 21

12

1,967

12

1,634

12

1,967

12

1,634

Total Endowments 1,979 1,646 1,979

1,646

Reserves

Income and Expenditure Account excluding pension reserve Pension Reserve

23

27

53,897

(62,908)

41,199

(61,763)

54,286

(62,908)

41,594

(61,763)

Income and Expenditure Account including pension reserve (9,011) (20,564) (8,622) (20,169)

Revaluation Reserve 22

45,282

46,011

45,282

46,011

Total Reserves

36,271

25,447

36,660

25,842

70,859

59,051

71,248

59,446

The financial statements on pages 21 to 45 were approved by the Board of Governors on 21 November 2011. Sir M Thornton Professor Nigel Weatherill Chairman Vice Chancellor & Chief Executive

53

financial statements 2

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CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 July 2011 Note 2010/11

£000 2009/10

£000 Net cash inflow from operating activities Returns on investments and servicing of finance Taxation Capital expenditure and financial investment

24

25

25

17,290

(1,813)

-

(18,256)

9,425

(1,395)

-

(17,930)

Cash outflow before use of liquid resources and financing

(2,779)

(9,900)

Management of liquid resources Financing Increase in cash in the year

25

25

(4,274)

9,807

(7,413)

19,462

2,754

2,149

Reconciliation of net cash flow to movement in net debt 2010/11

£000 2009/10

£000 Increase in cash in the year Cash (outflow)/inflow from increase in debt and lease financing Cash inflow from movement in liquid resources

26

26

26

2,754

(9,807)

4,274

2,149

(19,462)

7,413

Change in net debt resulting from cash flows Non cash movement on Endowments

26

(2,779)

15

(9,900)

14

Movement in net debt for year 2011 Net debt at 1 August 2010

(2,764)

4,709

(9,886)

14,595

Net debt at 31 July 2011

26

1,945

4,709

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STATEMENT OF CONSOLIDATED TOTAL RECOGNISED GAINS AND LOSSES For the year ended 31 July 2011 Note 2010/11

£000 2009/10

£000 Surplus/(deficit) after depreciation of fixed assets at valuation and tax Endowment additions Endowment reclassification Actuarial gain/(loss) in respect of pension scheme Actuarial gain in respect of RPI to CPI adjustment * Unrealised surplus released on revaluation of assets

14 14 23 23 22

9,012

681 (252)

1,715 - -

(8,766)

130 -

(5,886) 12,324

8,983 Total recognised gains relating to the year

11,156

6,785

Reconciliation

2010/11 £000

2009/10 £000

Opening reserves and endowments Total recognised gains in year

27,092

11,156

20,307

6,785

Closing reserves and endowments

38,248

27,092

* In its June 2010 budget, the government announced that it intended for future increases in public sector pension schemes to be linked to changes in the Consumer Prices Index (CPI) rather than, as previously, the Retail Price Index (RPI). In the year ended 31st July 2010 the University considered the LGPS scheme rules and associated members’ literature and concluded that, as a result, a revised actuarial assumption about the level of inflation indexation should be made, with the resulting gain recognised through the Statement of Total Recognised Gains and Losses (‘STRGL’) in the 2009/10 financial statements. Following the issue of Urgent Issues Task Force (‘UITF’) Abstract 48 in December 2010, the University has reconsidered its position in respect of the above and has concluded that the above treatment of the gain remains appropriate.

financial statements 2

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 1 Funding Council grants HEFCE

£000 TDA

£000

2010/11 £000

2009/10 £000

Recurrent grant Specific grants Deferred capital grants released in year Buildings (note 20) Equipment (note 20)

67,020

3,301

837 982

5,061

979

- 12

72,081

4,280

837 994

74,617

5,429

753 1,374

72,140

6,052

78,192

82,173

2 Tuition fees and education contracts 2010/11 2009/10

£000 £000 Full-time students (UK and European Union) Full-time students charged overseas fees and other fees Part-time fees (UK and European Union) Other fees and NHS education contracts

49,253

8,988 2,533

14,035

47,600

9,038 2,942

13,601

74,809

73,181

3 Research grants and contracts 2010/11 2009/10 £000 £000 Research councils UK based charities Health & Hospitals Central and Local Government Other research grants and contracts

1,541

294 4,290 1,791 2,404

1,611

672 5,469 3,081 1,676

10,320

12,509

4 Other income 2010/11 2009/10

£000 £000

Residences and Catering Other Services rendered Released from deferred capital grant (note 20) Other Income

897

9,881 353

1,530

1,008 7,223

371 2,305

12,661

10,907

5 Endowment and Investment income 2010/11 2009/10 £000 £000 Income from expendable endowments Income from permanent endowments Income from short-term deposits

15

- 270

12

- 189

285

201

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2010 (continued) 6 Staff Costs 2010/11 2009/10 £000 £000 Salaries and wages Social security costs Pension costs (including FRS17 adjustment)

81,769

6,268 11,443

88,717

6,947 11,731

99,480 107,395 Severance: Restructuring costs 1,624 322

101,104 107,717 Pension costs relating to enhanced pension provision (note 19) 880 164

101,984

107,881

2010/11 £

2009/10

£ Emoluments of the Vice Chancellor Salary Benefits in kind

229,626 1,788

270,000 714

231,414

270,714

Pension contributions

25,380

38,070

The Vice Chancellor opted out of the Teacher’s Pension Scheme as at 31st March 2011. From 1 April 2011 to 31 July 2011 he chose to take a reduced salary. The average number of persons employed by the University during the year as expressed in full time equivalents was:

2010/11 Number

2009/10 Number

Academic Support Other

1,002 1,130

166

1,055 1,234

176

2,298

2,465

2010/11 Number

2009/10 Number

Remuneration of higher paid staff other than the Vice Chancellor, excluding pension contributions: £100,000 - £109,999 £110,000 - £119,999 £120,000 - £129,999 £130,000 - £139,999 £140,000 - £149,999 £150,000 - £159,999

3 3 2 - 4 6

2 1 3 1 7 4

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) 7 Interest payable 2010/11

£000 2009/10

£000 On bank loans, overdraft and other loans:

Wholly repayable within five years Not wholly repayable within five years

Interest on VAT Assessment

3

2,093 2

32 1,541

-

FRS17 Adjustment: Net interest on pension liabilities (note 27)

2,098

2,354

1,573

3,866

4,452

5,439

8 Analysis of 2010/11 expenditure by activity

2010/11 £000

2009/10 £000

Academic Academic services Research grants & contracts Residences & catering Premises Administration & central services General education Staff student facilities Other expenses

77,515 18,813

9,267 1,982

24,187 11,516 15,705

4,775 3,510

81,183 19,880 11,066

2,093 24,447 12,935 15,659

4,549 4,860

Total per income and expenditure account 167,270

176,672

Other operating expenditure includes: 2010/11

£000 2009/10

£000 Auditors remuneration External audit (of this amount £49k relates to the University) External auditors provision of non audit services: Taxation Grant audits Other work Grant audits Internal audit Operating leases Special support bursaries

50

91 - -

26 90

504 8,202

42

42 7 8

15 89

497 7,643

The total expenses paid to or on behalf of 24 governors was £10,000 (2010 - £8,000 on behalf of 24 governors). This represents travel and subsistence expenses incurred in attending Board of Governors, Committee meetings and Charity events in their official capacity. 9 Taxation 2010/11 2009/10

Group University Group University £000 £000 £000 £000 Current Tax: UK Corporation taxation at 30% Under/(Over) provision of taxation in prior years

- -

- -

- -

- -

-

-

-

-

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) 10 Fundamental Restructuring Costs 2010/11

£000 2009/10

£000 Restructuring costs

-

8,009

Restructuring costs incurred in the prior year relate to the cost of payments to staff under the University’s voluntary severance scheme, including any pension liabilities. The scheme came into effect in the first half of 2010 and closed at the end of May 2010 and was a proactive exercise to prepare for significant reductions in funding. There is further reference to restructuring in the operational and financial review. 11 Impairments During 2009-10 the freehold and some leasehold land and buildings of the University were revalued in accordance with accounting policy at open market value for existing use or depreciated replacement cost. This revaluation resulted in an impairment in the cost of three buildings totalling £1.492m. This amount was written off in the Income and Expenditure account for the year. 12 Tangible fixed assets Group and University

Freehold Land and Buildings

£000

Leasehold Land and Buildings

£000

Assets Under

Construc- tion

£000

Telescope

£000

Equipment

£000

Total

£000 Cost or valuation At 1 August 2010 Additions Re-classified Disposals Write off

140,495 2,278 1,162

- -

7,703 -

1,685 - -

6,652 16,093 (5,039)

- (456)

4,334 279

- - -

16,816 2,456 1,087

- -

176,000 21,106 (1,105)

- (456)

At 31 July 2011 143,935

9,388

17,250

4,613

20,359

195,545 Depreciation At 1 August 2010 Charge for the year Re-classified Disposals

1,103 3,246

(24) -

1,313 331

- -

- - - -

1,510 260

- -

9,303 4,040

- -

13,229 7,877

(24) -

At 31 July 2011 4,325

1,644

-

1,770

13,343

21,082 Net book value Inherited Financed by capital grant Other

41,976 28,059 69,575

6,213 1,204

327

- -

17,250

- 1,655 1,188

- 1,691 5,325

48,189 32,609 93,665

At 31 July 2011 139,610 7,744

17,250 2,843 7,016 174,463

At 1 August 2010

139,392

6,390

6,652

2,824

7,513

162,771

The University’s freehold and some leasehold land and buildings were valued at 30 June 2010 at open market value for existing use or depreciated replacement cost at £136.442m. In addition the remaining leased buildings are shown at the value of the lease. Included in land and buildings is land to the value of £12.85m that is not depreciated. At 31st July 2011 property with a net book value of £1.081m has been transferred to current assets. The University sold this property in September 2011.

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) 12 Tangible fixed assets (continued) During the year ended 31st July 2010 a building with a net book value of £3.235m (historic cost £0.247m) was disposed of by way of demolition as part of the University’s Property Strategy. A grant of £0.121m was released on disposal. The resulting loss on disposal is £3.114m. Should land and buildings that have been financed by exchequer funds be sold, the University may be required, under the terms of the Finance Memorandum with HEFCE, to surrender the proceeds. As at 31st July 2011 the net value of assets financed by exchequer funds is:

2011 £000

2010 £000

Freehold Land and Buildings Leasehold Land and Buildings Telescope Equipment

23,357 1,000

679 1,686

22,879 -

440 2,150

26,722

25,469

The University holds heritage assets, donated to the University with an insurance value of £57,000, and loaned to the University with an insurance value of £26,500. Heritage assets include paintings, vases and ceremonial maces. These assets are not recognised on the balance sheet. 13 Investments Group

Other Investments

£000

Cost or valuation At 1 August 2010 and 31 July 2011

39

Other investments are in respect of shares in CVCP Properties PLC (1.0%) and Amaze Ltd (250,000 preference shares, redemption value £nil). University

Interest in Group

Undertakings £000

Other

Investments £000

Investment in

Associates £000

Total £000

Cost or valuation Net book value at 1 August 2010 Additions

15,990

-

39

-

343

11

16,372

11 Net book value at 31 July 2011

15,990

39

354

16,383

During the year the University made further investments in Microsense Limited, Forsigs Limited and Pharmalucia Limited. These companies are spinout companies which have been set up as a vehicle for exploiting proof of concept ideas. Investments in Associates are in respect of shares in: Company Principal Activity Share Holding Microsense Limited Non invasive blood monitoring medical 83.33 % owned

devices Pharmalucia Limited Antimicrobial photodynamic therapies 49.97% owned Hotwaves Innovations Ltd Novel energy efficient water heating systems 49.97% owned Microwaste Ltd Novel microwave waste management system 49.97% owned Forsigs Ltd Developing forensic software applications 62.50% owned

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) 13 Investments (continued) Liverpool Science Park Limited is a company limited by guarantee. The company was incorporated on the 13 June 2003. Liverpool John Moores University, University of Liverpool and Liverpool City Council’s interest in the company is 24.5%, 24.5% and 51% respectively. The company commenced trading in November 2005. The net assets of the company for the year ended 31 March 2011 are £229,910 (2010 £133,162), the group share of these being £56,328 (2010 £9,189). The company’s financial year end was 31st March 2011. Investment in associate - group

Share of net assets/

(liabilities) at 1 August 2010

Share of net assets/

(liabilities) for the year

Share of net assets/ (liabilities) at 31 July 2011

Liverpool Science Park Limited Pharmalucia Limited Microwaste Limited Microsense Limited Hotwaves Innovations Limited Forsigs Limited

9

5

(1)

4

1

7

47

(2)

-

(2)

(1)

(6)

56

3

(1)

2

-

1

25

36

61

14 Endowment asset investments

2011 £000

2010 £000

Group and University At 1 August 2010 Additions for the year Expenditure for the year Interest for the year Re-classification

1,646

681 (111)

15 (252)

1,363

389 (118)

12 -

Balance at 31 July 2011

1,979

1,646

Represented by:

Cash Deposits Debtors

1,872

107

1,443

203 1,979 1,646

15 Debtors Group University Amounts falling due within one year

2011 £000

2010 £000

2011 £000

2010 £000

Trade debtors Prepayments Other debtors Amounts due from associated company Amounts due from subsidiary companies

3,123 2,671 3,262

52 -

4,129 1,734 5,448

149 -

2,394 2,662 3,261

52 417

3,202 1,717 5,442

149 290

9,108

11,460

8,786

10,800

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) Group University 16 Creditors: Amounts falling due within one year

2011 £000

2010 £000

2011 £000

2010 £000

HEFCE grants not applied Accruals - research grants Payroll deductions Bank loan Salix loan Amounts due to subsidiary companies Trade creditors Other creditors

5,497

13,743 2,907

538 104

- 3,261

12,684

9,302

12,540 3,363

538 - -

4,016 11,691

5,497

13,061 2,907

538 104

1,156 3,246

11,235

9,302

11,868 3,363

538 -

670 3,932

10,080

38,734

41,450

37,744

39,753

Group University 17 Creditors: Amounts falling due after one year

2011 £000

2010 £000

2011 £000

2010 £000

Bank loan Salix Loan Intercompany leases

36,425

241 -

26,963

- -

36,425

241 16,158

26,963

- 16,158

36,666

26,963

52,824

43,121

18 Interest rate risk profile of financial liabilities

Cash at Bank and in hand Short Term Deposits Group University Group University

2011 £000

2010 £000

2011£000

2010 £000

2011 £000

2010 £000

2011 £000

2010 £000

Floating Rate Fixed Rate

5,253

-

2,710

-

4,851

-

1,923

-

-

32,128

-

27,854

-

32,128

-

27,854

As at 31 July 2011

5,253

2,710

4,851

1,923

32,128

27,854

32,128

27,854

The short-term deposits are placed with banks at rates based on prevailing market rates at the time of the deposit. All balances were held in sterling. 2011 2010 £000 £000 Maturity of financial liabilities Within 1 year or on demand Between 1 & 2 years Between 3 & 5 years Over 5 years

642 642

1,718 34,306

538 538

1,614 24,811

37,308

27,501

All financial liabilities relate to bank and loan debt.

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) 18 Interest rate risk profile of financial liabilities (continued) The Bank loans are as follows:

Original Value

£m

Term Years

Fixed/Variable Security

Interest rate

10.4 3.0 3.0

20.0 10.0

25 25 25

25 from 2013 18 from 2015

Fixed to 2009 Variable Variable Fixed to 2038 Fixed to 2033

Aldham Robarts LRC Assorted Properties Avril Robarts LRC Art and Design Academy Art and Design Academy

8.11% 6.41% 6.86%

6.065% 6.36%

There is also a 21 year lease in respect of the Avril Robarts Learning Resource Centre. Borrowing facilities The group has £30m undrawn borrowing facility available as at 31 July 2011. Total

£000

Floating Rate Financial

Liabilities £000

Fixed Rate Financial

Liabilities £000

As at 31 July 2011

37,308

2,940

34,368

As at 31 July 2010

27,501

3,180

24,321

All the group’s creditors falling due within 1 year (other than bank and other borrowings) are excluded from the above table. 19 Provisions for liabilities and charges Group and University Pension

Enhancements

Other

Total £000 £000 £000 At 1 August 2010 Utilised in the year Transfer from/(to) income and expenditure account

11,759

(733)

880

5,564

(3,043)

569

17,323

(3,776)

1,449

At 31 July 2011

11,906

3.090

14,996

The pension provision is in respect of pension enhancements payable to staff that have taken early retirement. The provision has been revalued at 31 July 2011. Included within other provisions is a provision for restructuring costs of £2.793m (2010 £5.117m). Restructuring costs incurred in the current year totalled £1.624m (2010 £8.009m) and relate to the cost of payments to staff under the University’s voluntary severance scheme, including any pension liabilities. The scheme came into effect in the first half of 2010 and closed at the end of May 2010 and was a proactive exercise to prepare for significant reductions in funding. During the year £2.884m (2010 £2.892m) was paid out.

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) 20 Deferred capital grants

Group and University

Funding Council £000

Other £000

Total

£000 At 1 August 2010 Buildings Equipment

22,879

2,150

5,474 1,455

28,353

3,605 Total

25,029

6,929

31,958

Income Buildings Equipment

2,315 517

- 18

2,315 535

Total

2,832

18

2,850

Adjustment to Other Equipment Released to income and expenditure Buildings (notes 1 and 4) Equipment (note 1 and 4)

-

(837) (982)

(27)

(110) (243)

(27)

(947) (1,225)

Total

(1,819)

(353)

(2,172)

At 31 July 2011 Buildings Equipment

24,357

1,685

5,364 1,203

29,721

2,888 Total

26,042

6,567

32,609

Included in the Buildings total of £29,721k is £1,655k relating to the Telescope enclosure which is shown in the Telescope category in Fixed Assets (Note 12). 21 Endowments Group and University

Restricted

Permanent £000

Restricted Expendable

£000

Total 2011 £000

Total 2010

£000 Balances at 1 August 2010 Capital Accumulated income

12

-

1,542

92

1,554

92

1,283

80 12 1,634 1,646 1,363 Additions for the year Interest for the year Expenditure for the year

-

- -

681

15

(111)

681

15

(111)

389

12

(118) Net - (96) (96) (106) Reclassification Balances at 31 July 2011

-

12

(252)

1,967

(252)

1,979

-

1,646 Represented by: Capital Accumulated income

12 -

1,860 107

1,872 107

1,554 92

12

1,967

1,979

1,646

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) 22 Revaluation reserve Group and University Revaluations

2011 £000

2010 £000

At 1 August 2010 Revaluation during the year Disposals (note 23) Contributions to depreciation: Released in year (note 23)

46,011 - -

(730)

40,767 8,983

(2,988) (751)

At 31 July 2011

45,281

46,011

23 Income and expenditure account Group

2011 £000

Group 2010

£000

University 2011

£000

University 2010

£000

At 1 August 2010

(20,564) (21,822) (20,169)

(21,385)

Surplus/(deficit) retained for the year Transfer from revaluation reserve Actuarial gain/(loss) in respect of pension scheme Actuarial gain in respect of RPI to CPI adjustment

9,108 730

1,715

-

(8,919) 3,739

(5,886)

12,324

9,102 730

1,715

-

(7,469) 2,247

(5,886)

12,324

At 31 July 2011

(9,011)

(20,564)

(8,622)

(20,169)

Balance represented by: Pension Reserve Income and Expenditure account excluding pension reserve

(62,908) 53,897

(61,763) 41,199

(62,908) 54,286

(61,763) 41,594

(9,011) (20,564)

(8,622)

(20,169)

24 Reconciliation of consolidated operating surplus to net cashflow from operating activities 2010/11

£000 2009/10

£000

Operating Surplus/(deficit) before taxation Redundancy Costs

8,997 -

(815) (8,009)

FRS 17 Depreciation (note 12) Impairment Loss on disposal of fixed assets Deferred capital grants released to income (note 20) Interest receivable (note 5) Interest payable less net interest on pension liabilities (increase)/ decrease in stock (Increase)/ decrease in debtors (Decrease)/ increase in creditors (Decrease)/ increase in provisions (note 19) Endowment reclassification Fixed assets write off Share of profits of associates

2,860 7,877

- -

(2,172) (285)

2,098 (6)

2,375 (2,820) (2,327)

252 456 (15)

4,242 7,578 1,492 3,114

(2,496) (201)

1,573 -

(3,187) 1,630 4,388

116 - -

Net cash inflow from operating activities

17,290

9,425

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) 25 Analysis of cash flows for headings netted in the cashflow statement

2010/11 £000

2009/10 £000

Returns on investments and servicing of finance Interest received Interest paid

285

(2,098)

178

(1,573)

(1,813)

(1,395) Capital expenditure and financial investment Purchase of tangible fixed assets (note 12) Receipt of deferred capital grants (note 20)

(21,106) 2,850

(25,636) 7,706

(18,256) (17,930)

Management of liquid resources Cash placed on short term deposit (note 26)

4,274

7,413 Financing Repayment of secured loan Repayment of Salix Loan Salix Loan received in year Secured bank loan drawn down in year

(538) (53) 398

10,000

(538) - -

20,000

9,807

19,462

26 Analysis of net debt At 1

August 2010 £000

Cash

Flow £000

Non Cash Change £000

At 31 July 2011 £000

Cash in hand and at bank: Endowments General

1,646 2,710

211

2,543

15

-

1,872 5,253

4,356 2,754 15 7,125 Debt due after one year Debt due within one year

(26,963)

(538)

(10,241)

434

538

(538)

(36,666)

(642) (27,501) (9,807) - (37,308) Current asset investments

27,854

4,274

-

32,128

4,709

(2,779)

15

1,945

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) 27 Pension schemes The pension schemes for the University’s staff are the Teachers’ Pension Scheme (TPS), which is administered by the Teachers’ Pension Agency (TPA), the Universities Superannuation Scheme (USS), which is administered by Universities Superannuation Scheme Limited and the Merseyside Pension Fund (MPF), which is administered by Wirral Metropolitan Borough Council. Teachers’ Pension The Teachers’ Pension Scheme is an unfunded defined benefit scheme. Contributions for the year ended 31 July 2011 amount to £5,271,737 (2010 – £5,795,271). Contributions on a pay as you go basis are credited to the exchequer under arrangements governed by the Superannuation Act 1972. The pensions cost is assessed every five years in accordance with the advice of the government actuary. The assumptions and other data that have the most significant effect on the determination of the contribution levels are as follows: Latest actuarial valuation Actuarial method Gross rate of return Rate of real earnings growth Market value of assets at date of last valuation Proportion of members’ benefits covered by the actuarial value of the assets

31 March 2004 Prospective Benefits 6.5% per annum 1.5% per annum £163,240m 100%

Following the implementation of Teachers’ Pensions (Employers’ Supplementary Contributions) Regulations 2000 the government actuary carried out a further review on the level of employers’ contributions. With effect from 1 January 2007 the employers and employees contributions were 14.1% and 6.4% respectively, Under the definitions set out in Financial Reporting Standard 17 (Retirement Benefits), the TPS is a multi-employer pension scheme. The University is unable to identify its share of the underlying assets and liabilities of the scheme. Accordingly, the University has taken advantage of the exemption in FRS 17 and has accounted for its contributions to the scheme as if it were a defined contribution scheme. Universities Superannuation Scheme (USS) The University participates in the Universities Superannuation Scheme (USS), a defined benefit scheme which is contracted out of the State Second Pension (S2P). The assets of the scheme are held in a separate fund administrated by the trustee, Universities Superannuation Scheme Limited. USS has over 130,000 active members and the University has 27 active members participating in the scheme. Because of the mutual nature of the scheme, the University is unable to identify 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 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 Pensions Act 2004, which requires schemes to adopt a statutory funding objective, which is to have sufficient and appropriate assets to cover their technical provisions. 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 £28,135.3 million indicating a surplus of £707.3 million. The assets therefore were sufficient to cover 103% of the benefits which had accrued to members allowing for expected future increases in earnings. The University contribution rate required for future service benefits alone at the date of the valuation was 16% of pensionable salaries and the trustee company, on the advice of the actuary, agreed to increase the University contribution to 16% of pensionable salaries from 1 October 2009. Since 31 March 2008 global investment markets have continued to fall and at 31 March 2009 the actuary has estimated that the funding level under the new scheme specific funding regime had fallen from 103% to 75%. By comparison the 12 months from April 2009 to March 2010 has shown an improvement in the funding level from 75% to 91% as at 31 March 2010. This estimate is based on the funding level at 31 March 2008, adjusted to reflect the fund’s actual investment performance over the year 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).

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) On the FRS17 basis, using an 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 University’s 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. 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 next formal triennial actuarial valuation is due as at 31 March 2011. The contribution rate will be reviewed as part of each valuation and may be reviewed more frequently. The total pension contribution to USS for the University was £219k (2010 £185k). The employer contribution rate payable by the University for the financial year was 16%. Surpluses or deficits, which arise at future valuations, may impact on universities’ future contribution commitment. Local Government Pension Scheme (LGPS) - Merseyside Pension Fund The LGPS is a funded defined benefit scheme, with the assets held in separate trustee administered funds. The total contribution made for the year ended 31 July 2011 was £5,231,423 (2010 £5,373,973). The agreed contribution rate for employers for the financial year was 14.8% from 1 August 2010 to 31 March 2011, and 10.5% thereafter. The employee rate paid is based on the whole time equivalent pensionable pay in accordance with the following table:

Salary

Pension Contribution Rate

£0 – 12,000 £12,000.01 – 14,000 £14,000.01 – 18,000 £18,000.01 – 30,000 £30,000.01 – 40,000 £40,000.01 – 75,000 More than £75,000.01

5.5% 5.8% 5.9% 6.5% 6.8% 7.2% 7.5%

The pensions cost is assessed every three years in accordance with the advice of a qualified independent actuary. All revisions to contributions were implemented from 1 April 2008. The assumptions and other data that have the most significant effect on the determination of the contribution levels are as follows: Latest actuarial valuation Actuarial method Investment returns per annum Pension increases per annum Salary scale increases per annum Market value of assets at date of last valuation Proportion of members’ accrued benefits covered by the actuarial value of the assets

31 March 2010 Projected Unit 6.75% per annum 3.0% per annum 4.5% per annum £4,706 million 78%

The following information is based upon a full actuarial valuation of the Fund at 31 March 2008 updated to 31 July 2011 by a qualified independent actuary. At 31 July

2011 At 31 July

2010 Inflation Rate of increase in salaries Rate of increase for pensions Discount rate for liabilities

3.4% 4.4% 2.9% 5.3%

3.3% 4.55%

2.8% 5.5%

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) The current mortality assumptions include sufficient allowance for future improvements in mortality rates. The assumed life expectations on retirement age 65 are: At 31 July

2011 At 31 July

2010 Retiring today Males Females Retiring in 20 years Males Females

Years

21.4 24.1

22.8 25.7

Years

20.4 23.2

21.3 24.1

The University’s share of the assets in the scheme and the expected rates of return were: Long term

rate of return

expected at

31 July 2011

Value at 31 July 2011

£000

Long term rate of return

expected at

31 July 2010

Value at 31 July 2010

£000

Equities Government Bonds Other Bonds Property Cash/liquidity Other

7.0% 3.9% 4.9% 6.0% 0.5% 7.0%

82,862 17,404

4,935 11,689

2,987 10,001

7.5% 4.2% 5.1% 6.5% 0.5% 7.5%

70,321 17,438

4,787 7,750 2,735

10,941

Total Market Value of assets

129,878

113,972

Analysis of the amount charged to income and expenditure account Year Ended

31 July 2011 £000

Year Ended 31 July

2010 £000

Employer Service cost Curtailment costs/Past service

5,787 408

5,641 88

Total operating charge

6,195

5,729

Analysis of net pension finance (costs) Year Ended

31 July 2011 £000

Year Ended 31 July

2010 £000

Expected return on pension scheme assets Interest on pension liabilities

7,373 (9,727)

6,242 (10,108)

Net pension finance (costs)

(2,354)

(3,866)

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) Amount recognised in the statement of total recognised gains and losses (STRGL) Year Ended

31 July 2011 £000

Year Ended 31 July

2010 £000

Actual return less expected return on pension scheme assets Change in financial and demographic assumptions underlying the scheme liabilities

6,380 (4,665)

9,124 (15,010)

Actuarial gain/(loss) recognised in STRGL

1,715

(5,886)

Actuarial gain in respect of RPI to CPI adjustments

-

12,324

Total effect of Actuarial gains on STRGL

1,715

6,438

Movement in deficit during the year Year Ended

31 July 2011 £000

Year Ended 31 July

2010 £000

Deficit in scheme at 1 August 2010 Movement in year: Current service charge Contributions Past service/Curtailment cost Actuarial gain in respect of RPI to CPI adjustment Net interest on assets Actuarial gain/(loss)

(61,763)

(5,787) 5,689 (408)

- (2,354) 1,715

(63,959)

(5,641) 5,353

(88) 12,324 (3,866) (5,886)

Deficit in scheme at 31 July 2011

(62,908)

(61,763)

In accordance with the revised FRS17 accounting standard, assets have been valued at realisable (i.e. bid) values for the year ended 31 July 2011. Previously assets were valued at fair (in effect mid market) value. Given the immaterial nature of the adjustments, a prior period adjustment has not been made for the change in valuation method. Analysis of the movements in the present value of the scheme liabilities Year Ended

31 July 2011 £000

Year Ended 31 July

2010 £000

At the beginning of the year Current service cost Interest cost Contributions by scheme participants Actuarial losses and (gains) Benefits paid Past service cost Curtailments

175,735 5,787 9,727 2,297 4,665

(5,833) -

408

158,024 5,641

10,108 2,548

15,010 (3,360)

(12,324) 88

At the end of the year

192,786

175,735

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued Analysis of movement in the market value of the scheme assets Year Ended

31 July 2011 £000

Year Ended 31 July

2010 £000

At the beginning of the year Expected rate of return on scheme assets Actuarial (losses) and gains Contribution by the employer Contributions by scheme participants Benefits paid

113,972 7,373 6,380 5,689 2,297

(5,833)

94,065 6,242 9,124 5,353 2,548

(3,360) At the end of the year

129,878

113,972

Reserves Year

Ended 31 July

2011 £000

Year Ended

31 July 2010 £000

Year Ended

31 July 2009 £000

Year Ended

31 July 2008 £000

Year Ended

31 July 2007 £000

University’s estimated asset share Present value of scheme liabilities

129,878 (192,786)

113,972 (175,735)

94,065 (158,024)

95,784 (159,440)

94,546 (122,055)

Deficit in the scheme

(62,908)

(61,763)

(63,959)

(63,656)

(27,509)

History of experience gains and losses Year

Ended 31 July

2011 £000

Year Ended

31 July 2010 £000

Year Ended

31 July 2009 £000

Year Ended

31 July 2008 £000

Year Ended

31 July 2007 £000

Difference between the expected and actual return on assets: Amount

(6,380)

(7,124)

12,591

9,249

2,774 % of scheme assets 4.9% 8% 13.4% 9.7% 2.9% Change in assumptions Amount % of scheme liabilities

(4,665)

2.4%

(15,010)

8.5%

17,202 10.9%

(23,614)

14.9%

4,264 3.5%

Total amount recognised in STRGL Amount

1,715

(5,886)

4,611

(32,863)

7,038

% of scheme liabilities 0.9% 3.3% 2.9% 20.7% 5.8%

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) 28 Access funds 2010/11

£000

2009/10 £000

Balance at 1 August 2011 Funding Council grants Interest earned

39 537

-

190 579

3 576

772

Disbursed to students (484)

(733)

Balance at 31 July 2011

92

39

Funding Council grants are available solely for students; the University acts only as paying agent. The grants and related disbursements are therefore excluded from the Income and Expenditure Account. 29 Training and Development Agency bursaries

2010/11 £000

2009/10 £000

Balance at 1 August 2010 Training and Development Agency grants

(239) 3,045

295 2,560

University administration fee Disbursed to students

2,806

(55) (2,785)

2,855

(56) (3,038)

Balance at 31 July 2011

(34)

(239)

30 Operating Leases Non-cancellable operating lease rentals are payable as follows:

2010/11 £000

2009/10 £000

Less than one year Between one and five years More than five years

508 889

-

505 1,397

-

1,397

1,902

31 Capital commitments

2010/11 £000

2009/10 £000

Capital expenditure contracted for, but not provided for in the financial statements Capital expenditure authorised by Board of Governors, but not yet contracted for

21,000 9,100

26,000 4,100

Balance at 31 July 2011

30,100

30,100

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NOTES TO THE FINANCIAL STATEMENTS 31 July 2011 (continued) 32 Related party transactions No transactions in 2010/11 were identified which should be disclosed under Financial Reporting Standard 8 ‘Related Party Disclosures’. The Group has taken advantage of the exemption set out in FRS 8 and has not disclosed intra-group transactions. 33 Subsidiary undertaking The subsidiary companies, with the exception of Liverpool John Moores (Malaysia) SDN.BHD are registered in England and Wales. Liverpool John Moores (Malaysia) SDN.BHD is registered in Malaysia and ownership in the UK is via circular transaction. All the subsidiary companies, wholly owned or effectively controlled by the University, are as follows: Company Principle Activity Status JMU Property Development Company Ltd Property Development Company 100% owned JMU Services Ltd Academic enterprise 100% owned JMU Learning Resource Centre Ltd Leasing of the Avril Robarts Learning 100% owned

Resource Centre JMU Building Services and Maintenance Ltd Promotion of the advancement of education -

By provision of funds to the University Liverpool Business School Ltd Dormant 100% owned Liverpool John Moores (Malaysia) SDN.BHD Promote and support collaborations within 100% owned

Malaysia The University exercises a significant influence over the operations of JMU Building Services and Maintenance Limited, a company limited by guarantee. The University is the guarantor and the directors of the company must be appointed from officers or governors of the University, or members of the Company. 34 Ultimate Parent Organisation Liverpool John Moores University is the ultimate parent organisation. Copies of the group accounts are obtainable from the Finance Director, 4th Floor, Kingsway House, Hatton Garden, Liverpool, L3 2AJ. 35 Post Balance Sheet Events On 30 August 2011, the University drew down £10m, as part of a £60m loan facility, agreed with Barclays Bank Plc. This loan facility was arranged as part of the University’s Property Strategy. On 26 September 2011, the University sold a property on Myrtle Street for £1.316m. This sale was arranged as part of the University’s Property Strategy.

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74

www.ljmu.ac.ukLiverpool John Moores University, Egerton Court, 2 Rodney Street, Liverpool L3 5UX

© Corporate Communications

Date of publication March 2010