[original page numbering, forwards]

HEADING:
OUP logo with the legend: DOMINUS ILLUMINATIO MEA Oxford University Press
Walton Street, Oxford OX2 6DP
Telephone 0865 567767 Cables clarendon press oxford Telex 837330
Secretary and Chief Executive G. B. RICHARDSON

G. B. R.

Your ref: X36506/DCM/McR

2 August 1977

Dear Sir,

OXFORD UNIVERSTTY PRESS

Further to your letter of 28 April I now enclose our submission in respect of our application for exemption from Corporation Tax. I trust that it contains the information you require; should you require any further details I shall be happy to endeavour to provide them.

Yours faithfully,

G. B. Richardson

H.M. Inspector of Taxes,
Claims Branch,
Magdalen House,
Stanley Precinct,
Bootle,
Merseyside L69 9BB.

[page 1]

(i) O.U.P.'s trade is carried on by a charity;

(ii) its trade is exercised in the course of the actual carrying out of a primary purpose of the charity;

(iii) the profits of its trade are applied solely for the purposes of the charity.

The following pages summarize facts which we consider to be relevant, under the following heads:

A. Oxford University Press

1. Status and Constitution

2. Organization

3. Financial Arrangements

4. Business Structure

5. Tax and Corporate Status

B. Major Activities

1. Overall Summary

2. U.K. Publishing

3. U.K. Printing

4. Wolvercote Paper Mill

5. Overseas Branches

6. Overseas Companies

7. General Fund [page 2]

8. Associated Companies

9. New York Business

C. Summary

D. Appendix
There are attached:

1. The Latin text of the relevant portions of the Preamble to the 1636 Charter.

2. Sections of the current University Statutes dealing with the Delegacy of the University Press, and with the Finance Committee.

3. List of Delegates at July 1977.

4. Annual Report for the year ended 31 March 1976

5. General Catalogue 1977.

6. Oxford University Press - Some Important Dates [page 3]

A. Oxford University Press

1. Status and Constitution

The Oxford University Press (OUP) is a Department of the University of Oxford. The constitutional relationship to the University is virtually identical with that of Cambridge University Press to Cambridge University.

The University is of course a charitable institution, its purpose being the furtherance of sound learning and religion. Frorm early times this has included the storage, production, and dissemination of manuscripts and latterly of printed books. The first extant book printed in Oxford, from which OUP traces its ultimate origin, is dated 1478 - two years after Caxton brought the Printing Press to England. (OUP's early development is described in Volume I of Mr. Harry Carter's A History of the Oxford University Press, 1975.)

The status of the two Universities and their Presses was largely taken for granted in those early years. Though their exceptional status is acknowledged in Orders in Council, Parliamentary Enactments, and other official papers, a formal statement of their legal status seems not to have been attempted for Oxford until 1461 in the reign of Edward IV, and the more comprehensive Great Charter prepared by Cardinal Wolsey for Henry VIII in 1523. The latter document was in time felt to be in need of further clarification and amplification, aimed at securing beyond a peradventure the status of the two Universities. Accordingly an Act for their Incorporation was passed in 1571. The last of the four major enactments in this sphere was the Great Charter of March 1636, incorporating the Laudian Statutes, issued by Charles I.

The 1571 Act of incorporation established the position of both [page 4] Oxford and Cambridge Universities - a clear indication that the nature and functions of both were considered to be in all important particulars identical. The Act includes 'the maintenance of good and godly literature' as one of their prime purposes.

The Great Charter of 1636 makes specific mention of printing as one duty of Oxford University, confirming the long-standing practice of both Universities' being involved in publishing and printing. The Charter authorizes the University to print and publish 'books of all kinds' (cujuscunque generis libros). That the dissemination of such books, as of learning in general, was without geographical restriction is evidenced by the Preamble which recognizes and confirms the situation already existing:

' ... in order that this our University, which diffusing on all sides glowing beams of herself (as it were shining torches of virtues of all kinds, liberal. arts and sciences) has from so great a time past to the present day illuminated not merely this glorious Kingdom of ours but also other regions of the whole earth around it abroad and without (and daily shall give ever greater illumination), may view herself at home and within in the same clear radiance, as conspicuously shining in her privileges as she is distinguished in the kinds of teaching given ... ' (The Latin text forms Attachment 1.)

The subsequent history of OUP has been one of development and expansion, under the direction of the Delegacy, in Britain and overseas, - 'not merely this glorious Kingdom of ours, but also other regions of [page 5] the whole earth'. Throughout this development the aims of the Press have remained fundamentally unchanged; these aims are those of the University itself, which the Press seeks to realize through publishing. The status of the Press has likewise remained unchanged as a department of the University controlled by the University through a body of Delegates. Appendix 6 sets out the dates of some important events in the history of the Press,

Throughout its existence OUP has concentrated upon publishing, printing, and disseminating works of scholarly distinction and educational purpose. It has also continued to fulfil its obligation to print and distribute the Holy Bible, the Book of Common Prayer, etc. OUP's determined pursuit of its charitable and educational objects is shown by the wide extension of its publishing effort, which has been pursued with vigour throughout its existence. The composition of the current List is discussed in a later section; its emphasis remains firmly upon:

(a) Works which are of undoubted scholarly distinction in a variety of fields;

(b) The Bible and allied works of theological and religious import;

(c) Books for use in educational institutions at home and abroad, at primary, secondary, and college level;

(d) Books and music of high quality and general interest both as a service to education, including adult education, and as a means of disseminating and maintaining high standards in literature, arts, and science;

(e) Especially in this century, books for the use of those for whom English is not the mother tongue. [page 6]

Some notable examples of major pubications have been:

The Oxford English Dictionary and its allied and derivative volumes

The Dictionary of National Biography

The New English Bible (undertaken jointly with Cambridge University Press)

The Oxford Advanced Learners' Dictionary of Current English

Current adult fiction is, in general, eschewed as being outwith the purposes of a charitable institution such as O.U.P. Of course, OUP does sponsor and maintain scholarly editions of the classics of English literature, as of major works of literary, historical, and Scientific merit in other fields, as it must do in order to carry its educational effort beyond the area of mere formal education. It also publishes in the 'Three Crowns Series' original contributions to the English literature of their countries by writers of the 'Third World'. There is also a distinguished list of books for children, published in the U.K. and distributed world-wide, in recognition of the need of young people to be instructed by reading well-written, imaginative literature.

2. Organization

As a Department of the University, the Press has no separate corporate status. It operates, as do other Departments, under the general terms of the 1636 Charter (as modified by later Statutes) in the style of 'The Chancellor, Masters, and Scholars of the University of Oxford'. Since there is no separate body corporate, the University's liability for the Press's obligations is unlimited. It is therefore necessary that the University exert direct and continuing control over all aspects of its activities.

It does so by a Delegacy, first established in 1633. Its composition is prescribed in the University Statutes, Title VIII, Section II. (A copy of the relevant Statute forms Attachment 2, [page 7] together with a copy of Title III of the University Decrees, Section LXXVII setting forth the composition and terms of reference of Finance Committee.) It may be appropriate to outline briefly the membership and functions of these bodies.

Delegates are senior members of the University and full-time academics. The Vice-Chancellor, Proctors, and Assessor are ex officio Delegates, the Vice-Chancellor being Chairman. Fifteen others are appointed by the Council and General Board of the Faculties of the University. The Delegates, who are scholars of distinction, are chosen to represent as far as practicable the major fields of learning. A list of current Delegates is appended as Attachment 3.

Delegates serve without remuneration. (The Chairman of Finance Committee, who is much involved with the week-to-week affairs of OUP, receives a modest honorarium.) The Statutes lay down that the Delegacy 'shall have charge of the affairs of the Press'. Though day-to-day management is carried on by salaried officers and employees, the Statutes are unequivocal that the responsibility remains the Delegates'. They may and do delegate current duties to salaried staff, but, in the words of the Statutes, Title VIII, Section II, paragraph 7, 'Such delegations shall not relieve the Delegates of the general responsibility for the matters delegated'.

In fulfilling their responsibilities the Delegates may be said to exercise control in seven main ways:

(i) They appoint the Secretary to the Delegates (Chief Executive), the Printer to the University, the two Deputy Secretaries (Academic Publisher and General Publisher), and the Finance Director. All these officers are members of Finance Commiteee (sic). The Delegates are not obliged to choose a scholar to be Secretary, and have not always done so; nevertheless, both the present Secretary and his predecessor were teaching members of the University who served for several years as Delegates before their Appointment. [page 8]

(ii) They appoint, and establish the remuneration for, all Senior Officers and all senior employees of the Press in the U.K. and Overseas. Some 70 senior positions in all sectors of the Press are subject to their direct control, as regards remuneration, promotion, discharge, etc.

(iii) They form a permanent majority on Finance Committee. By Decree, Delegate members include the Vice-Chancellor and the Senior Proctor (senior officers of the University), and seven others selected from the Delegacy at large. (The Delegacy elects the Chairman from among those selected.) In addition to the five salaried Officers mentioned above, membership also includes 'a person possessing high qualifications in business and finance'. Though there is provision for the holder of this post to receive an honorarium, the present incumbent, Mr M. W. Jacomb, a Director of Kleinwort, Benson Ltd., has served without remuneration since his appointment in 1972.

(iv) Finance Committee establishes business policy, and regularly monitors Officers' conduct of the Press's affairs. At monthly meetings its (sic) reviews all phases of OUP's operations, and receives periodic reports from the Heads of each operating Division. It also reviews and authorizes all major investments, annual budgets, remuneration policies, etc.

(v) Additionally, Finance Committee may, and does, establish specialized Sub-committees for specific areas, such as Appointments, Salaries, and Pensions, North American affairs, etc. The proceedings of Finance Committee are regularly reported to and reviewed by the Delegacy as a whole.

(vi) While Finance Committee is thus charged with the direction of the business aspects of the Press on behalf of the Delegates, the Delegacy itself maintains direct control of the publishing, and the choice of books to receive the Press's imprint. The Delegates [page 9] meet fortnightly during each academic term for that purpose. Every book to be published from the United Kingdom has to be considered by the Delegates at these meetings and to obtain their prior approval. All overseas publications are reported to and scrutinized by the Delegates but, given the need to avoid undue delay in decision, they are not all approved in advance. For all sectors of the List, however, the Delegates establish guidlines(sic): titles for publication are reviewed in the light thereof.

(vii) In addition to these formal procedures, individual Delegates are in active touch with OUP staff. There are frequent consultations between Editors and Delegates with a particular relevant expertise. There are also visits by Delegates to the various locations of the Press in this country and abroad. These informal contacts constitute a further effective means of control over all aspects of OUP's activities.

3. Financial Arrangements

As stated earlier, the University's liability for the Press is unlimited. It is therefore one of the Delegates' prime obligations to ensure that the Press does not embarrass the University. The most recent reiteration of that duty is in the 'Report of the Committee on the University Press', appointed by the University and chaired by Sir Humphrey Waldock and published in 1970. The Waldock Committee was established on the recommendation of the Franks Commission of Inquiry and commenced its investigations in 1968.

Having no shareholders, the Press does not distribute dividends. Equally, however, it has no access to capital markets, and the Delegates are understandably reluctant to incur substantial debt. The earnings generated by the Press's activities are entirely devoted to maintaining and improving its ability to perform its charitable [page 10] functions. There is no profit for distribution. The calls on OUP's resources, taking one year with another, consistently equal the resources themselves. On some occasions they may temporarily exceed them so that there is modest recourse to borrowing; in others, surplus is used to repay debt. In recent years academic publishing has been made more difficult both by sharp cost inflation and by cutbacks in educational spending. Commercial publishers have been obliged to decline books that they would previously have accepted; it has therefore become more important than ever that the Press should be able to publish worthwhile scholarly books which, because of high costs and a limited market, cannot find a profitable sale.

It is clear, of course, that not every 'good book' is a worst-seller, or saleable only in uneconomic quantities or in on (sic) inadequate terms. OUP publishes many titles on terms which permit adequate margins. The earnings from them, however, are not distributed but are applied to the acceptance, sponsorship, and publication of books of educational value and scholarly distinction from which there is no expectation of a 'normal commercial return', and which would otherwise, it may be confidently supposed, not be published at all.

Likewise, the Delegates are conscious of the Press's obligation not only to publish such books, but to maintain them in print. The Oxford List is the most extensive of any University or Academic Press. It keeps some 10,000 titles in print, together with some 7,000 items of sheet music, many at a loss, as a deliberate and integrated part of the University's charitable aims, because they are needed for scholarly and educational purposes. It maintains, for example, the supply of titles necessary for the study of 'minority subjects' (the Classics, for example, and certain aspects of Science) at prices which are 'uneconomic' due to relatively small volume demand. [page 11]

4. Business Structure

The Press is a department of the University devoted to fulfilling the University's aims through the medium of the printed word (and of printed music and, more recently, of audio-visual means). Its particular function as well as its size and international scope cause it to have an internal structure comparable with that of a conventional corporation (though OUP is neither conventional nor a corporation). It is neither profit-maximizing nor profit- distributing; yet it must constantly conduct its business in a 'busineses-like' way. The Press does not of course have the privilege of limited liability and could therefore cause financial embarrassment to the University of which it is a part; this circumstance gives reason for the Delegates to be even more conscious of their responsibilities in this respect than might be the Board of Directors of a conventional commercial enterprise.

This circumstance, among others, led the University to accept the recommendation of the Waldock Report that the Delegates should publish an Annual Report on publishing and other activites, as a concrete token of their 'Public Accountability'. This is issued in an annual Supplement to the University Gazette. Audited accounts are shown on a consolidated basis, including those of OUP Inc., the New York Business. Since its re-organization in 1973, OUP Inc. has not been formally a part of the Press as such, but a separate 'not-for-profit' corporation registered in the State of Delaware, U.S.A., owned directly by the University (Chancellor, Masters, and Scholars) via nominee members, and administered by Trustees. The U.S. authorities have recognized that OUP Inc. is entitled to exemption from U.S. taxes, by virtue of its charitable status and aims. The Press's latest Annual Report, for the year ended 31 March 1976 (Attachment 4), includes the figures for for (sic) OUP Inc.; this document does not discuss them in detail. [page 12]

Apart from the associated U.S. business, the Press has four main activities which are referred to in more detail in Section B below. These are:

U.K. Publishing

U.K. Printing

Wolvercote Paper Mill

Overseas Branches (distribution and publishing)

Additionally, the General Fund manages fixed assets and other investments on behalf of the Chancellor, Masters, and Scholars, and there are certain associated activities. In the pages which follow all these activities are discussed.

5. Tax and Corporate Status

As mentioned above, the American business is exempt from U.S. taxes (see Section B.9 below). OUP Branches in Australia, Canada, South Africa, and New Zealand do not pay national taxes, but their earnings are included in OUP's consolidated return for purposes of U.K. Corporation Tax. This situation is clearly unsatisfactory, and one which we are loth to raise in discussion with the authorities of those countries. If it were fully appreciated that earnings of OUP Australia, for example, were subject to tax in the U.K., the Australian authorities might well decide that tax should rather be paid in Australia.

Other overseas operations are currently subject to national taxes. It is the Delegates' intention to seek exemption in certain of these as circumstances permit, since it is OUP's policy, practice, and intention to fulfil its charitable aims in all countries where it operates. They are reluctant to do so, however, while tax continues to be levied in the U.K. itself. Since Branches' remittances are an important part of the cash flow to Oxford, the present situation constitutes a serious diminution of OUP's ability to carry out its [page 13] charitable aims.

In certain countries - indeed in most of those where it operates - OUP is recognized as 'different'. In Nigeria, it is unique in having secured exemption from the 1972 Indgenization Decree, whereby foreign publishers have been obliged to dispose of 40% of their equity to Nigerian nationals. A similar exemption may be obtained from the more recent Decree whereby the proportion of equity to be indigenized will be raised to 60%. Despite the fact that OUP has a turnover in Nigeria (largely in school textbooks) greater than that of any other publishing house, either 'foreign' or 'indigenous', the authorities in that country have been prepared to recognize its special status.

The Indian Branch of the Press has so far not been obliged (as have foreign commercial companies) to incorporate and accept local shareholding. Discussions have been proceeding, until interrupted by recent political events, towards securing formal recognition of OUP's special status, and possibly exemption from the penal rates of tax, applied to foreign-owned firms. Exemption from U.K. taxes, on similar charitable grounds, would obviously help in such negotiations. A successful outcome would materially enhance the Press's ability to fulfil its role in the U.K. and elsewhere, as well as in India.

The possibility of exemption from U.K. Corporation Tax has been mooted on several occasions. The most recent was in 1952, when discussions with the Inland Revenue were informal. They concluded with the ruling that earnings accruing to OUP from 'unrelated activities' - i.e. income from investments other than in the publishing or printing business, and rental income from University properties administered by but not occupied by the Press - would be exempt, since those monies would be available for the general charitable purposes of the University. Capital gains are similarly exempted. The present application is made on the ground that the specific purposes of the Press, as a Department of the University, are no less qualified for exemption. [page 14]

B Major Activities

1. Overall

The following pages show summarized statistics for the major activities of the Press in the fiscal year ended 31/3/76 (audited accounts), and for the fiscal year ended 31/3/77 (preliminary). The analysis covers all the University's activities in the field of publishing, printing, and paper-making, although two major components are not included in this application for exemption from tax: OUP Inc. and Wolvercote Paper Mill. Their figures are included for the sake of completeness, since they are also included for administrative purposes in the Annual Report published in the University Gazette (Attachment 4).

2. U. K. Publishing

This is OUP's central activity, in financial as well as cultural terms. Sales accounted for 30% of gross turnover in 1975/76, and 54% of net (excluding OUP Inc. and Wolvercote Mill). For 1976/77 the preliminary figures are respectively 28% and 49%.

Approximately one half of Sales are to institutions, libraries, schools and, via bookshops, to individuals in the U.K. with the balance being exported; approximately one fourth directly throughout the world, and one fourth to Branches and OUP Inc. for distribution in their national markets. The General Catalogue for 1977 (Attachment 5) shows all titles currently stocked in the U.K., with the exception of Bibles (available in several hundred styles), and individual Music Sheets. In all, OUP's current List includes some 10,000 book-titles and 7,000 items of Sheet Music.

The major components of U.K. publishing revenues are shown in the following statement: [page 16]

3. U.K. Printing

Printing is a service activity for the publishing, particularly of the learned list and the Bible, but also of educational books, dictionaries, etc., and for other Departments of the University.

The learned nature of the Oxford Press, the particular skills of readers and compositors, and educational printing, made it natural to develop contacts with other such bodies, and with Examination Councils.

As the following tables show, though only two thirds of the Division's turnover is directly for OUP and other University Departments, less than 10% is for strictly 'commercial' outside customers. Even that reflects primarily the need to maintain a balanced work-load despite fluctuations in OUP's own demand. It also makes sound sense (we believe) to keep in touch with the general state of the printing industry, both as a supplier and as customer, rather than to maintain a completely in-house operation, insulated from market pressures. [page 19]

4. Wolvercote Paper Mill

The Mill was acquired by the Press in 1872, as supplier of book-papers. This early essay in 'vertical integration' gave satisfaction until 1956/57, when the Mill was re-equipped. The result was a reduced capacity to produce thin and other grades of paper used by the Press, and a substantial increase in the output of heavier grades used in labels, food packaging, stationery, etc. [page 21]

From that date it has become increasingly clear that the Mill, as now equipped, is no longer an integral part of the operations of the Press; its supervision has indeed been kept distinct, being exercised by a special standing committee. The proportion of Wolvercote's output supplied to the Printing and Publishing Divisions declined steadily. It is now barely 10% - fiscal 1976 7.8%; fiscal 1977 13.4%. The balance is sold to the food and beverage packaging industries, stationery manufacturers, etc.

Charitable status is not claimed for the business and it is indeed the Delegates' intention to disengae from it at the earliest opportunity.

5. Overseas Branches

OUP books are read throughout the world, and the Delegates have pursued a policy of establishing offices in major markets, to maintain stocks, improve distribution, etc. The New York Branch (now OUP Inc.) was set up in 1896, closely followed by Branches in Canada, Australia, India, etc. (See Attachement 6). The development of most Branches has followed a logical pattern: from representative office, to stock-holding distributor, to distributor-cum-publisher; and to some extent, from imported books to Iocally-reprinted and to locally-adapted or locally-commissioned books written in English or one of the languages of the country of publication. Although the Branches have an arms-length trading relationship to Oxford they are fully subject in all their activities to Delegates' control.

In every country the aims of OUP are the same, and the same concentration is apparent in the Catalogues and Lists of each OUP Branch: Scholarly and Academic works (mainly from the U.K.); educational books and texts at all levels, imported from the U.K., or locally adapted, or locally commissioned. The Delegates further recognize the University's obligation to contribute to high standards of learning and scholarship throughout the world: works of distinction by authors of many nationalities are actively sought for publication either in the Branches, or in the Centre, for world-wide distribution. [page 22]

The following statement summarizes Branch Revenues in the last two years:

The dramatic growth in Nigeria reflects OUP's participation in the supply of primary textbooks in English for the programme of Universal Primary Education. It is evident from the figures that OUP makes a significant contribution in the cultural and educational life of many other nations also. Of total sales, over 50% are of titles imported from the U.K. or reprinted/adapted from U.K. originals, and a further 40%+ represent titles originated by the Branches themselves (or by other Branches). The small 'Miscellaneous' category includes co-publication programmes, e.g. with the Auckland University Press in New Zealand. [page 23]

Barely 5% of total revenues are derived from sales of other publishers' books on an agency basis. Such business is concentrated in a few Branches, primarily Canada and Australia, and to a lesser extent India. Agencies are held not for their own sake, but to support OUP's own programme in two main ways:

(a) by supporting larger distribution overheads than could otherwise be afforded;

(b) by supplementing OUP's List with books of high quality which are in particular demand in certain markets.

All Agency arrangements are subject to the approval of the Delegates and the List to be handled must in no way be inconsistent with the objectives and standards of OUP. Main agencies are those of Messrs. Faber & Faber in Australia and Canada.

Of the surplus generated from operations, enough is retained by each Branch to finance its approved local programme. The balance is remitted to Oxford to sustain the general development of the Press and enable it to fulfil its scholarly purposes.

6. Overseas Companies

In general, it has been (and is) the Delegates' policy to avoid fragmenting the OUP by separately incorporating individual portions of what is regarded as an integrated international charitable institution. There are certain exceptions to that general rule, however, of which the most notable - that of OUP Inc. - has already been discussed. Four other, much smaller, cases require brief mention.

While U.K. properties are owned by the Chancellor, Masters, and Scholars, that has not been an appropriate arrangement for properties overseas. Accordingly the OUP Realty Corporation was established to hold the freehold of the premises occupied by OUP Inc. in Fairlawn, New Jersey, and Walton Investments Ltd. to hold that of the building occupied by the New Zealand Branch in Wellington. The entire share capital of these corporations is owned by the Chancellor, Masters, and Scholars, and net rental income is subject to tax on the basis that the companies are resident in the U.K.

In Japan, OUP's normal Branch structure encountered legal obstacles. Accordingly, this office is incorporated as Oxford University Press K.K., all of the shares being owned by the Chancellor, Masters, and Scholars. In all other respects the conduct of affairs under the supervision of the Delegates is identical with that of other Branches. The Japanese company is also regarded as resident in the U.K. for taxation purposes. [page 24]

In Malaysia the medium of instruction is increasingly the Malay language. OUP Malaysia is an importsnt supplier of textbooks at primary, and more recently, secondary level in Malay. In 1969 OUP incorporated Penerbit Fajar Bakti SDN. Berhad (PFB) to handle the publishing and distribution of such books under an operating agreement with OUP's Branch in Kuala Lumpur. All the shares of PFB are held by OUP's Branch Manager for South East Asia, as nominee for the Chancellor, Masters, and Scholars. In all material respects the conduct of its affairs is identical with that of other Branches and is similarly subject to Delegates' supervision.

7. General Fund, under the Delegates' supervision, administers the properties owned by the Chancellor, Masters, and Scholars, together with other investments. It also provides a wide range of management services to OUP offices at home and abroad, administers central banking arrangements, pension and personnel policies, etc. A key activity is to receive remittances from publishing and printing units, Branches, and associates, for recycling within the OUP in accordance with budgetary programmes established by Finance Committee.

The General Fund staff also administer the Special Capital Reserve which receives the income exempt from tax under the 1952 ruling, as not arising directly from the Press's own activities, and being available for the general charitable purposes of the University. Such income is not identified in the published statement of earnings, but is reflected in movement in the Capital Reserve accounts. Periodically the Delegates, after consultation with Hebdomadal Council, review the accumulated reserve and determine appropriations.

8. Associated Companies

In furtherance of their purposes, the Delegates have entered into co-operative ventures in certain areas of direct importance to the Press's aims. They judge it desirable to make arrangements of this kind where, in order to achieve their aims, it is necessary to have partners with very specific skills and experience.

University Bookshops (Oxford) Ltd. (1964) is owned 50/50 with Messrs. B. H. Blackwell Ltd., Booksellers. Its purpose is to encourage and support good bookshops serving the academic and student communities in areas where there are institutions of higher education. Ten University Bookshops are run, several of which have been saved from liquidation and/or substantially expanded. By engaging in this [page 25] enterprise, which has annual sales of £3.68m (1976), The Press sought to maintain a weak but essential link between the academic publisher and those whom it serves; co-operation with Messrs. Blackwell provided the required expertise.

Cornelsen & Oxford University Press GmbH, Berlin (1971) was jointly established with Messrs. Cornelsen-Velhagen & Klasing GmbH. Its aim is 'the development, production, and distribution of all kinds of teaching media for the study of foreign (i.e. non-German) languages and in particular English'. It is of great importance in the development of OUP's programme of ELT publishing for Continental markets. A link with a local educational publisher was deemed essental to the successful development and marketing of the list. Sales were DM 2.25m. in 1976.

The Lexden Centre (Oxford) Ltd. was established in 1969 as a joint venture with ELT experts, to develop books, techniques, and systems of English Language Teaching, and to run courses for overseas institutions and individuals.

Dividend income from these holdings is exempt from tax under the 1952 ruling and the tax credits are therefore recovered.

9. The New York Business

For the sake of completeness, the major components of O.U.P. Inc.'s publishing are listed below:

C. SUMMARY

The University of Oxford is a charity the purposes of which are the advancement of learning and education in the widest sense; the Press is that part of the University which seeks to fulfil these purposes through publishing. Both the general activities of the University and the publishing of the Press further religion, education, scholarship, science, and the arts without territorial limit. The trading surplus of the Press is earned in direct pursuit of its charitable objectives and is devoted entirely to their furtherance. Responsibility for the affairs of the Press is entrusted by the University in the Delegacy, a body of scholars serving gratuitously who exercise close control over the books published. Under their direction the Oxford University Press has so developed over the centuries as to assume an internationally recognized place and function in the world of learning and education.

July 1977