Improving the world through engineering Images: This page: Bloodhound show car; and page 7: Bloodhound Ambassador training, both by Tom Luddington Photography www.tomluddington.com; page 9: Population Challenge team, photography by Peter Luckhurst CONTENTS

02 PRESIDENT’S REVIEW 2011 04 STRENGTHENING LINKS WITH THE MEMBERSHIP AND MEMBERSHIP ENGAGEMENT 08 INTELLECTUAL LEADERSHIP 11 BROADENING AND GROWING THE MEMBERSHIP 12 DEVELOPING AN AWARENESS OF ENGINEERING AND THE PROFILE OF THE INSTITUTION 15 IMPROVING THE FINANCIAL POSITION 16 FINANCIAL REVIEW 2011 AND SUMMARISED ACCOUNTS PRESIDENT’S REVIEW 2011

In 2011, the members looked to the Institution Strengthening links with the membership to support them during continued challenging and membership engagement economic times; delivering the things that As ever, members valued their Institution’s really mattered to them, promoting high profile position as a market leader in the profession with education initiatives that will inspire the next a committed focus on the continual development generation to work in engineering, getting of engineering skill and knowledge worldwide. engineers in the media and being heard by This was further bolstered this year with the government. Members feel passionately that positioning of learning and development at the the Institution should be an organisation with heart of the Institution’s brand. Belonging to an global reach that truly represents and reflects organisation that supports their achievement the profession, and encourages professional or maintenance of professional registration, registration and long-term career development. and demonstrating their status as professional The Institution was able to deliver on these engineers, meant a lot to members. Our volunteers requests, achieving significantly against every one again demonstrated their remarkable commitment of its strategic aims, making 2011 another record- by organising just under 1,000 events for over breaking year. 51,000 people around the world. More than 1,000 members of all ages worldwide now volunteer to Broadening and growing the membership help: advising students and developing engineers. 2011 saw the election of the Institution’s 100,000th member, Nicola McClatchey, an apposite milestone Intellectual leadership in a year in which it returned to the growth of That members’ number one priority continues to paying members and a net number of registered be inspiring the next generation and supporting engineers for the first time in 20 years. Highly high profile global education initiatives was targeted, strategic campaigns delivered sustained demonstrated by the fact that the vast majority membership growth across the board: significantly of the 500 new Ambassadors recruited in 2011 more students becoming Associates; a 38% rise wished to volunteer to promote engineering in in the number of Associates; an increase of just schools and colleges. By supporting Bloodhound below 100% in the number of EngTechs; and SSC as a sponsor until 2013, the Institution double the number of Fellow elections. More through its 130 Bloodhound Ambassadors than 1,000 members based outside the UK has been able to reach out to thousands of joined the Institution, and key partnerships with young people globally and enthuse them about leading multi-national engineering employers engineering, while a popular partnership with were cemented. The successful re-acquisition Primary Engineer meant that over 15,000 of our Engineering Council licence with a total 5–19 year old pupils in 580 schools took part score of 18 out of 20 showed that the Institution in engineering educational events. Also of is fast-growing but also, just as importantly, is importance for members is the Institution’s maintaining its quality and high standards. commitment to ensuring that the views of engineers are well represented in the public domain. Having relaunched Professional Engineering magazine in 2010 as the voice of engineering for Institution members, it was extremely gratifying that precisely one year on from then PE was named as the Association of British Publishing Agencies’ winner of the Best Membership Title.

LANDMARK STRATEGIC ACHIEVEMENTS MEANT 2011 WAS ANOTHER RECORD-BREAKING YEAR FOR THE INSTITUTION.

02 Developing an awareness of engineering and the profile of the Institution Continuing to raise the profile of the Institution in media and with Government, and producing reports and policy of public interest are activities that members applaud. The support by members for investing resources in the development of a media profile, and the readiness of the press to trust the Institution as a source of expert opinion, allowed it once again to achieve record- breaking media coverage of over £17m AVE* in 2011 – the highest ever level. In the aftermath of natural global disasters, the Institution became regarded by media as a trustworthy guide through the waters of complex engineering and an organisation whose voice allayed public fears. Continually sought out by Government as a source of expert opinion, the Institution of Mechanical Engineers was once again ranked as the engineering institution that MPs were most aware of in a Dods commissioned poll.

Much of what we wanted to do could not have been achieved without the excellent support of a number of people whose efforts I very much appreciate. I would personally like to thank the members throughout the world who support the Institution in our Trustee Board, Council, Regions, Branches, Divisions and Groups, and Membership Services. In my time as President, it has been a tremendous privilege to meet many members and to serve such a prestigious Institution.

Professor Rod Smith President, Institution of Mechanical Engineers

*Advertising Value Equivalency (AVE) is what the Institution’s editorial coverage in newspapers, online and on TV and radio would cost if it were advertising space, or time. The value is reached by measuring the space in column inches or time (for radio and television coverage) occupied by a clip, and then multiplying the column inches or time by the advertising rate for that page or time slot. Engineers will recognise it as a measure of activity rather than real money.

03 STRENGTHENING LINKS WITH MEMBERSHIP AND MEMBERSHIP ENGAGEMENT

The Institution could not function without the Regional meetings were held in Texas, Switzerland, tireless support of members in the volunteer Hong Kong, Belgium and the United Arab Emirates network around the world. 2011 saw 26 new and were attended by Institution staff. Their international volunteers; thriving public and purpose is supporting the members in each location member engagement around the world; and a and facilitating co-operation for continued growth doubling of the number of Ambassadors. in international influence.

One thousand members joined the Institution’s Over the course of the year, John Wood, the international community in 2011. Membership outgoing President and Chief Executive Stephen swelled in new areas, particularly under the Tetlow met members all around the globe, making five new member groups launched in 2010: Italy, ground-breaking visits to meet burgeoning Switzerland, Texas, Spain and Greece. The communities of engineers in China, India, Italy, continued growth of the international member base Belgium, the United Arab Emirates and Qatar, to means international representation now exceeds develop the Institution’s already strong bonds with 20% of the Institution’s overall membership. the multi-national and local engineering companies who have operations there. The President, Rod The recruitment of volunteers flourished around Smith, concentrated on UK regional visits including the world: 26 new international recruits joined the high profile events in Cumbria and Loughborough. Institution’s team in locations as diverse as Oman, Bolivia, Russia and Qatar. Volunteers identified Institution volunteers successfully brought together opportunities for members in their local area apprentices, engineering employers, media and to progress within the profession; the Member Parliamentarians for a high profile event which to Fellow events held around the UK helped showcased the skills of some of the country’s top contribute to another record rise in applications for engineering talent to a Government minister. fellowship received by the Institution in 2011. Designed to highlight the best young engineering apprentices in the East of England, and promote The global volunteer network plays a pivotal engineering as a career, the Apprentice Challenge role in delivering the Institution’s face to face featured a line-up of 15 teams from companies engagement with members and the interested and colleges including Bedford College (with public. More than 1,000 active volunteers attracted Vauxhall); Carl Zeiss; West Suffolk College; over 51,000 attendees at just under 1,000 regional MBDA; Hutchinson Ports UK, Port of Felixstowe; events worldwide. For the UK this represented a Sulzer; Lotus Engineering; CLS Offshore; City 10% increase in attendance on 2010 figures. College Norwich; Marshall Aerospace and North Hertfordshire College with EADS Astrium. The An estimated 50% of the event attendees teams had just two hours to design and build a mini comprised non-members, including school students, drag racer entirely from scrap which then had to members of other institutions, and the general cover a distance of two metres in the quickest time public. They were attracted by concepts such as possible while carrying increasingly heavy weights. drilling on Mars, designing for the Flintstones Marshall Aerospace won the Most Innovative and ‘Hollywood Science’. In September, the Design Award, which was presented by Andrew Bath and Bristol Area set a new record with a Lansley CBE MP for South Cambridgeshire and talk on reducing carbon emissions in the UK by Secretary of State for Health, who commented that Professor David MacKay with over 800 squeezed as engineering is one of Britain’s most important into a lecture theatre in Bristol University. The industries, it was heartening to see our next positive interaction with other institutions and the generation of engineers taking to the challenge increased use of digital communication to raise with such innovation and enthusiasm. awareness of events were particularly pleasing. Ninety members came together for the second Volunteer Ambassador Conference at Sheffield University to learn skills relating to all aspects of MORE THAN 1,000 their volunteer roles from chairing committees to ACTIVE VOLUNTEERS inspiring primary school children. Once again the ATTRACTED OVER 51,000 attendees represented the full range of volunteering roles that the Institution has to offer and this ATTENDEES AT JUST meant an excellent chance to network with other UNDER 1,000 REGIONAL members, volunteers and staff and share ideas and EVENTS WORLDWIDE. best practice.

04 The Young Member Board received more During the year, there was continued development nominations than ever before for its annual of digital communications channels to optimise Young Member of the Year Award, reflecting the and facilitate member engagement around breadth, quantity and quality of volunteering the world. The Young Members’ online blog currently undertaken by members under 30. The Developing Engineers went from strength to Board recognised the exceptional contributions strength, receiving a total of 8,488 visits, of of six outstanding young members from UK and which 6,007 were unique visitors. The blog is international regions, with Paul Cummins, a a fresh platform for informal discussions about committee member from the Aberdeen panel, engineering in a forum that invites engineers, ultimately named as the overall winner. whether they are members or non-members or based in or outside the UK alike, to join the debate. 455 new ambassadors were recruited in 2011 Engineers from North America, Asia and Europe meaning that worldwide by the end of the year, were among the most frequent bloggers. Equally, 1080 members were listed as Ambassadors in the digital international newsletter continued total. Demonstrating how passionately members as a means of communicating the Institution’s feel about inspiring the next generation, strategic influence throughout the membership. education was the main focus for these new The Institution will be working to develop further recruits, with many choosing to volunteer with international content across its communications STEMNET, Primary Engineer, Bloodhound and the streams including producing market-specific Smallpeice Trust. collateral for international business.

Over 100 volunteers from the UK received training For the first time, all Corporate Members had to increase press coverage in their local area the opportunity to elect their representatives and help them to hone digital communications in the seven new international regions: for the more effective promotion of events and Americas, Europe, Middle East and Africa, engagement activities near them. North East Asia, Oceania, South East Asia and Southern Asia. This resulted in seven regional chairs and seven regional young member representatives worldwide.

In 2012, the Institution is keen to expand through key relationships with businesses, educational establishments and members worldwide. It will launch a new international development team which, with the International Strategy Board (ISB), will focus on relationship building and business development worldwide, but in particular in the key growth areas of China, Hong Kong, India and the Middle East. In India, a regional director will be responsible for local relationship development while the Hong Kong office will act as the hub for targeted membership development in the North East Asia region. As part of the ongoing development of our activities the ISB will convene in Singapore in April 2012: the first time that it has ever met outside the UK.

455 NEW RECUITS JOINING THE 1,000+ AMBASSADORS, AND 6,000+ ONLINE BLOGGERS, ENSURED SUCCESSFUL GLOBAL ENGAGEMENT.

05 Scholarships and Awards Fifteen undergraduates were awarded a Whitworth Scholarship Award; one graduate was The Institution’s Trust Funds were again elected Whitworth Senior Scholar, ten graduates successful in assisting members during were elected to Whitworth Scholar and received the difficult financial climate with just over their medals and certificates from the President £330,000 being awarded to undergraduates and of the Whitworth Society, David Eaves. The major postgraduates during their degrees at university prizes and awards of the Institution were awarded and conference grants enabling members to as follows: present papers at overseas conferences. Thomas Hawksley Gold Medal 2010 The Annual Vision Awards ceremony took place (Gold medal, bronze medal replica to co authors) to on 28 September 2011, the same day as the Dr Jonathan Ong, Dr Robert Miller and Professor Annual Dinner, to celebrate the achievements John Denton for their paper, ‘The prediction of of engineering technicians, undergraduates hot streak migration in a high-pressure turbine’, and Whitworth Award holders and eminent published in the Journal of Power and Energy. mechanical engineers who received the major prizes and awards. Three Visionaries, each chosen George Stephenson Prize 2010 for their talent, leadership skills, motivation and (£500 + bronze medal to lead author and co a desire to inspire the next generation, were authors) to Dr Brendan Sloan, Dr Jian Wang, presented with a trophy by the President: Dr Stephen Spence, Professor Srinivasan Raghunathan and David Riordan for their • Philip Deakin – Undergraduate Visionary paper, ‘Aerodynamic performance of a bypass • Michael Tetley – EngTech Visionary engine with fan nozzle exit area change by warped chevrons’, published in the Journal of • David Eaves – Whitworth Visionary Aerospace Engineering. The Apprentice of the Year was Jennifer Harvey Safety Award in Mechanical Engineering 2010 from MBDA with Charlotte Ryall from Hamworthy (£500 + certificate) to Francisco J Sáez Nieto, Combustion and Robert Morgan from Unity Mine Rosa Arnaldo Valdés, Eduardo García González, being awarded runner up prizes. Gerard McAuley and Maria Isabel Izquierdo for their paper entitled, ‘Development of a three- President Roderick Smith presented the dimensional collision risk model tool to assess Undergraduate Scholarships – which were safety in high density en-route airspaces’, supported by Rolls-Royce plc and AMEC – the published in the Journal of Aerospace Engineering. first IMechE Land Rover Spen King Sustainability Award and Postgraduate Scholarships. For more information: • Apply for scholarships and awards: www.imeche.org/scholarships • Volunteer as an Ambassador: www.imeche.org/ambassadors • Member activities near you: http://nearyou.imeche.org

OVER £330,000 WAS AWARDED TO HELP UNDERGRADUATES AND POSTGRADUATES THROUGH THEIR UNIVERSITY STUDIES.

06 Of the 455 new Ambassadors, many are choosing to volunteer with Bloodhound.

07 INTELLECTUAL LEADERSHIP

The Institution not only inspired the next Transport generation, but also consolidated its role as a thought leader, providing expert advice to Aerospace 2075 highlighted technological Government and industry. developments as the UK’s strength in the global aerospace sector. Recommendations included: establishing a UK Advanced Technologies Aerospace Research Centre and restoring Education Government research and development funding to pre-recession levels. The thought directional The Institution demonstrated its continued policy statement on Life Cycle Assessment (LCA) support for the Bloodhound Super Sonic Car by was launched at a joint Low CVP and IMechE LCA hosting the historic launch of the car’s genome. seminar attended by leading experts in the field. This project continues to be important for members as 130 are now signed up as Bloodhound Ambassadors, and many are already using it to bring engineering into schools and colleges. Energy and environment

Alongside Bloodhound, we have worked with As governments struggle to balance the need the Smallpeice Trust to create ‘STEM days’ for to deliver secure and affordable energy with

1,000 Year 9 students across England, Wales efforts to reduce CO2 emissions, intellectual and Scotland. These days involve the students leadership on energy remained key for the working together on ‘design and make’ projects Institution. Policy statements on Energy Security to improve their creative thinking and problem- and Cost-Effectiveness in Electricity Generation solving skills. We have also registered 250 underpinned UK focused work in this area while members to work with Primary Engineer on their our innovative thinking on the use of air capture Engineering Maths and Physics Project and their to create negative emissions and enable carbon Leaders Award. The enthusiasm and energy of the recycling was recognised worldwide as cutting- pupils makes education one of the most popular edge. The Institution’s report on the 21st century’s and fastest growing topics within the Institution. defining environmental challenge of population growth catalysed public debate and lead to a Throughout 2011, the Institution continued to follow-on initiative, The Population Challenge. develop its voice on the value of engineering to This competition attracted participants from the economy. Our position statements highlighted nine countries and engaged young engineering the risks posed by the increases in higher professionals with their local public and education fees, and separately on the value of political communities. apprenticeships for skills development irrespective of age. There is much more to do. Our work with partner engineering institutions remains a key contributor to this important agenda. Learned Society events In 2011 the Divisions and Groups organised 300 activities for over 19,000 delegates, ranging from Manufacturing international conferences through to local lectures and student competitions. Events debating The Manufacturing a Successful Economy? survey the social implications of engineering were indicated public support for Government to help very popular including appropriate healthcare UK manufacturing and boost future skills. Over technologies for developing countries, the cost 100 manufacturers and MPs attended the annual of railways, and the impact of Fukushima. ‘Engineering the Future, Manufacturing Summit’ International activities included seminars in India which focused on rebuilding UK manufacturing, and Hong Kong and a technical visit to Sweden communicating that Government need to and Denmark. stick to a coherent plan on delivering a pro- manufacturing strategy.

08 The Population Challenge attracted competitors from nine countries including Trinidad and Tobago.

09 Manufacturing Excellence Formula Student

In 2011 the Manufacturing Excellence Awards A record number of entries ensured that Formula were re-positioned as a business improvement Student 2011 got off to a flying start and this programme for all UK-based manufacturing success continued as over 2,200 students from 34 companies. The aim is to promote and support countries including, for the first time, a team from the best of manufacturing in the UK, as well as Gaza took part in the event. celebrating their achievements at the annual awards ceremony. The re-launch helped secure a The teams from across the globe assembled for 35% increase in entrants over 2010, with 21 new the VIP opening ceremony, featuring a panel companies taking part for the first time. There was discussion with Le Mans-winning race engineer also a 24% increase in the media coverage that Leena Gade from Audi, James Allison from Lotus was generated. Renault GP, and other high-profile engineers. Formula Student’s Patron, Ross Brawn OBE, also The awards ceremony continues to be the pinnacle attended the event to talk to teams. The presence of the Manufacturing Excellence programme and of these well-known engineers helped to increase 2011 was no exception. AESSEAL took home the media coverage, which raises the Institution’s top prize of Overall Winner, with Loadhog being profile internationally. Autocar featured the event the proud recipients of the coveted Best SME for the first time and provided the winners with a trophy. There was much deliberation among the glamorous photo shoot in their London studio. judges over all the winners, and the following companies emerged triumphant: Agfa Graphics, Formula Student has always been regarded by Bombardier Transportation, Carl Zeiss, Draeger employers as a means of delivering industry-ready Safety, Leyland Trucks, MBDA, Pipex px and graduates through the crucial practical experience RFD Beaufort. and transferable skills that competitors gain. As a way of further enhancing links between Mark Prisk, Minister of State for Business and competitors and employers, in 2011, a speed- Enterprise, once again addressed the audience of networking event enabled students to ask recently more than 360 VIPs, manufacturers and IMechE graduated Institution members about what it is members, as he talked about the synergies really like to work in the engineering industry. between Manufacturing Excellence and the ongoing BIS campaign: ‘Make it in Great Britain’. The top prize in Class 1 was presented to the University of Stuttgart, while Delft University of The 2011 programme was supported by our Technology won the Class 1A category for low partner organisations Autodesk, ERA Foundation, carbon vehicles. 2011 was the fourth year of Class Lombard, Power Panels and PwC, and sponsors 1A, which focuses on low carbon emissions and Arup and Barclays Corporate. the sustainability of the design.

For the first time ever, spectator tickets were available to purchase, with almost 2,000 spectators in attendance. Formula Student is grateful for the support in 2011 of Airbus, Autodesk, E.ON, Jaguar Land Rover, Mercedes- Benz HighPerformanceEngines, National Instruments and Shell.

For more information: • Thought leadership: LE MANS-WINNING www.imeche.org/knowledge LEENA GADE OPENED • Formula Student: www.formulastudent.com THE RECORD-BREAKING • Manufacturing Excellence: FORMULA STUDENT www.imeche.org/manufacturingexcellence WHICH FEATURED OVER 2,200 STUDENTS FROM 34 COUNTRIES.

10 BROADENING AND GROWING THE MEMBERSHIP

In 2011, the Institution celebrated an historic The Institution innovated to support existing landmark with the election of its 100,000th members and ensure a positive experience member. More members than ever before were for new applicants. New online functionality elected to paying grades, and crucially, the garnered increased applications across Affiliate number of paying members also increased for the and Associate grades, while the new streamlined first time since 1991. The number of membership process for Chartered and Incorporated Engineers applications collectively grew by an impressive paid dividends with the receipt of 12 completed 13.8% in 2011, building on the 18.5% growth applications within just a few weeks of launch experienced in 2010. in December.

The five yearly Engineering Council licence review The new Career Developer tool proved popular, was highly successful, with the EC commenting receiving 54,000 visits in its first seven months on the quality of the way in which the Institution from 22,000 unique users, of whom 10,000 are maintains its licence. We received a high score of involved with MPDS and 12,000 are members 18/20 with no remedial measures requested. undertaking long-term CPD. The simplified Career Learning Assessments were taken up A number of long-term marketing campaigns were in greater number by older Associate members successfully deployed to grow the membership. who did not meet the full academic requirements Some 350 EngTechs were elected in 2011: an for chartership. increase of just under 90% – making IMechE the fastest growing professional engineering Long term marketing initiatives, the work of the institution for EngTechs – while 955 Fellows were Business Development team and the Institution’s elected: more than double the 2010 figure. The high profile in the world of engineering, should number of Chartered and Incorporated Engineers help us to maintain our members’ prized status as elected also rose to 1,590, while there was a 38% part of a thriving global community of engineers increase in the number of Associates elected: from in 2012. 1,857 in 2010 to 2,578 in 2011.

• Fellow grade grew to total 7,199 with some 955 members migrating or applying. • Over 950 Members migrated to CEng or IEng Member during the year. • There were also almost 640 new direct Member applications during the year. • The Associate campaign delivered a record 2,580 paying members, with 1,140 migrating from Affiliate and 1,440 joining the Institution for the first time. • EngTech numbers are steadily increasing. There are now 130 EngTech approved schemes, with 669 elected EngTechs (versus 369 in 2010).

11 DEVELOPING AN AWARENESS OF ENGINEERING AND THE PROFILE OF THE INSTITUTION

The Institution continued to focus on ensuring that Reacting to the media the views of our engineers and engineering as a whole are heard by the media. Having established The Institution played a crucial role in providing itself as a source of expert impartial advice, when the media and the public with accurate issues concerning engineering are reported, engineering information to reassure or address the Institution can offer real benefit to media their concerns during major disasters which outlets – which can often struggle to ‘explain the affected global society. engineering’ to their readers or viewers – and raise its profile in the process. In March 2011, in the tragic aftermath of the tsunami in Japan and the subsequent issues with the Fukushima Daiichi nuclear power plant, given the dangerous nature of events at Adding value to the media the plant, details were sketchy and journalists were struggling to find out exactly what was After the considerable success of 2010, when happening. The Institution was able to act quickly the Institution reached £16 million in recorded and offer its views and advice regarding the media coverage, it was acknowledged that situation to, among others, the BBC and Sky News. keeping up this momentum would be difficult. As events progressed, the Institution’s ability to However, by growing our relationship with the provide balanced, informed and swift comment media, reacting quickly to breaking stories, and meant that it was established as the reassuring releasing newsworthy reports and statements, and trusted expert voice which enabled news the Institution has once again ensured that the reporting on this ever changing story to be fair work, thought leadership or achievements of its and accurate. members have been consistently in the press throughout 2011. Soon after the disaster in Japan, the Institution was called upon to answer questions on the In summary, the Institution appeared on 82 TV second volcanic ash cloud to hit Europe in a and radio broadcasts, and garnered 106 articles in year. Although the smaller Grimsvötn volcano the national press, 518 articles in the trade press, caused less problems than Eyjafjallajökul in 802 articles in the regional press and 1,104 online 2010, the Institution was again quick to react, articles. In total, this media coverage was worth issuing statements and arranging for engineering just over £17 million.* More importantly, though, experts to speak on TV and radio. The Institution the cumulative effect of these broadcasts and provided clarity and insight into what, to the articles was that for the first time, the Institution’s non-engineering audience, was a story that was thought leadership in engineering reached a global difficult to understand fully. audience in excess of one billion people.

Leading the debate

Reacting to stories in the media is important. However, through its high profile reports, the Institution also creates and leads debate on subjects about which our members feel passionately.

In January 2011, the Institution published its report Population: One Planet, Too Many People? 82 TV AND RADIO which examined the engineering requirement FEATURES, 106 NATIONAL needed over the next century to sustain an PRESS STORIES, AND estimated global population of 9.5 billion. The report highlighted how engineers would address SOME 2,500 TRADE, key issues in the areas of energy, food, water REGIONAL AND and urbanisation. ONLINE ARTICLES GARNERED OVER £17M MEDIA COVERAGE.

12 The report Scottish Energy 2020? featured in First Minister Questions and across national media, including BBC Newsnight.

13 This report received widespread media coverage, Political advice and guidance with much focus on the need for nations to start planning now for their population developments. It A second strand in our communications strategy is also attracted the attention of the Department for engaging with Parliamentarians at Westminster, International Development, which was interested Holyrood, Cardiff and Stormont. in the Institution’s recommendation of Engineering Development Goals as an addition to the UN’s At the most basic level, the Institution hopes Millennium Development Goals. to raise awareness among Parliamentarians to our presence and as a centre of engineering At the end of 2011, the Institution also published knowledge and advice. We do this via our its report Scottish Energy 2020? which provided policy statements, reports and briefings which an engineering-based perspective on Scotland’s in themselves attracted 115 MPs and Peers in ambitious renewable targets and highlighted Westminster and 30 MSPs at Holyrood. The glaring omissions in exactly how the Scottish Institution also uses its extensive membership Government targets were going to be met. knowledge to input to consultations with eight IMechE-only submissions in 2011. The Institution The report received widespread attention from also assisted 393 MPs and Peers with research media and politicians, including two questions at information, help on questions, or general First Minister Questions in Holyrood. Coverage engineering advice. of the report was almost universal, appearing in every national newspaper as well as on BBC1, It is, however, the aim of any organisation to BBC2 and ITV. In addition, IMechE Vice President, ensure that the best policy is developed and best Stuart Cameron, appeared on Newsnight to debate laws enacted. The Institution is always keen to the report with Scotland’s Energy Minister, Fergus be instrumental in the policy creation and our Ewing MSP. continuing work with Scotland’s Energy Minister to ensure they have an engineering-led energy Aside from the reports, the Institution’s prestige policy shows the value that institutions can play events continued to generate good press coverage. when developing national policy. The annual Manufacturing Excellence Awards gained media coverage worth £882,703 in AVE* This successful strategy was reflected in a Dods – its highest ever – with 144 clips in total and commissioned poll which again ranked the particular focus on the People Effectiveness Institution of Mechanical Engineers as the most winner, Bombardier. Formula Student had a aware engineering institution among MPs. bumper year with a number of trade publications extensively covering what is now the biggest For more information: event of its type in the world. • Media coverage for 2011: www.imeche.org/voice2011 Finally, the Institution’s own Engineering Heritage Awards continued to grow year-on-year. In • Informing Government policy: 2011, 13 award presentations were undertaken, www.imeche.org/policy attracting nearly 800 members. Media highlights included national coverage for the Holland 1 submarine award, and TV coverage for the Jaguar E-type award, PS Waverley award and the Talyllyn Railway in Wales thanks to it being the inspiration for Thomas the Tank Engine.

A DODS COMMISSIONED *Advertising Value Equivalency (AVE) is what the Institution’s POLL ONCE AGAIN editorial coverage in newspapers, online and on TV and radio RANKED IMECHE AS would cost if it were advertising space, or time. The value is reached by measuring the space in column inches or time (for THE BEST KNOWN radio and television coverage) occupied by a clip, and then multiplying the column inches or time by the advertising rate for ENGINEERING that page or time slot. Engineers will recognise it as a measure INSTITUTION AMONG MPS. of activity rather than real money.

14 IMPROVING THE FINANCIAL POSITION

2011 proved a challenging year for Learning In only its second year of existence, the and Development’s open course programme, Commercial Services made further progress. In with flat results against the previous year. The effect, it delivered two-fold benefits: new revenues faltering economy has impacted performance for the Institution, but perhaps more importantly with open course, soft skills training considered a valuable service for members which saved to be discretionary spend in uncertain times. them time and money. The Purple Legal free This performance is in line with the market place. telephone helpline and the Wexas travel services Nevertheless, on a positive note we were ahead club have proved particularly successful. It is of 2010 in numbers of attendees hence delivering pleasing that IMechE is now aligned with other training to more people. professional engineering institutions and large professional bodies that support their members As a complement to the open course programme with such services. we were able to offset its weakness through the acquisition of the SIA Group which focuses The decision to outsource PE magazine and on in-company, tailored programmes delivered topengineeringjobs.com to the media specialists throughout the world. Caspian Media has proved very successful with a high satisfaction rate from members in a recent The integration of SIA Group into the Institution’s reader survey and the achievement of 2011 Best Learning and Development unit has been Membership Magazine in the APA awards. very successful in all areas from the transition Along with this positive response we have also of the brand to the development of new achieved our objective of financial stability with business opportunities. predetermined costs and ‘no surprises’.

One Birdcage Walk continued to feel the impact Equally the decision to sell the journals unit to of the economic downturn combined with the Sage Publications has also proved to be successful difficulties of a client base dominated by the public with penetration into new markets that previously sector. However, through strong marketing it had we had attempted to reach with little success such considerable success in attracting new clients as Germany, Turkey and UAE. Crucially, we have with 54% of its revenues from new business; also, high satisfaction rates from the editorial boards both enquiries and site inspections were 12% and authors. higher than in 2010. For more information: • Learning and Development: www.imeche.org/learning • Venue hire: www.onebirdcagewalk.com • Member services: www.imeche.org/services

THE RE-LAUNCHED PE MAGAZINE WAS NAMED 2011 BEST MEMBERSHIP MAGAZINE IN THE APA AWARDS.

15 FINANCIAL REVIEW 2011 AND SUMMARISED ACCOUNTS

From a finance operations point of view, 2011 Summarised Accounts was a successful year. Whilst total revenue was lower, the amount we were able to spend The Summarised Accounts are extracted from the on Learned Society activities increased in line audited Annual Accounts, which were approved with expectations. by the Trustee Board on 18 April 2012. The report of the auditors on the Annual Accounts The volatility of the publishing operation was unqualified. The Summarised Accounts do of previous years was expunged with the not contain sufficient information to allow for a outsourcing of PE magazine to Caspian. The full understanding of the financial affairs of the partnership deal with Sage for the journals yielded Institution. A copy of the full Trustees’ Report royalty revenue of £1.8M and this will continue for and Annual Accounts can be obtained from the the next four years. Trustee Department on +44 (0)20 7973 1311. A copy of the Trustees’ Report and Annual In order to replace the long term profit stream from Accounts will be submitted to the Charity publications the Institution purchased a training Commission in due course. The Summarised business, namely SIA Limited. The purchase price Accounts were approved by the Trustee Board was £1.3M which was taken out of investments on 18 April 2012 and were signed on its behalf by and initial results are very encouraging. The Professor Roderick Smith, President, Institution of Institution is writing the goodwill arising off over Mechanical Engineers. a period of five years. Five months of profitable SIA activity are included in the training results. Auditors’ Statement to the Members of the Institution of Mechanical Engineers Our investments were affected by the general We have examined the Summarised Accounts set stock market turbulence and a loss on our out opposite. investments of £2.0M was experienced. This malaise, together with the low interest rate Respective Responsibility of the environment, had a substantial effect on our Trustee Board and Auditors defined benefit pension scheme: a loss of £4.0M The Summarised Accounts are the responsibility was recorded. of the Trustee Board. Our responsibility is to report to you our opinion on their preparation The conclusion is that the Institution remains and consistency with the Trustees’ Report and financially sound. The Trustee Board is Annual Accounts. committed to maintaining financial prudence and in particular ensuring a positive income from Basis of Opinion activities. Investments in relevant and appropriate We conducted our work in accordance with new activities, as in the case of SIA, will continue Auditing Guidelines The Auditors’ Statement on to be made over the coming years. the Summary Financial Statement adopted by the Auditing Practice Board.

Opinion In our opinion the Summarised Accounts are consistent with the Trustees’ Report and Annual Accounts of the Institution of Mechanical Engineers for the year ended 31 December 2011.

KPMG LLP, Chartered Accountants and Registered Auditors, St Albans THE PARTNERSHIP DEAL WITH SAGE FOR JOURNALS YIELDED ROYALTY REVENUE OF £1.8M, WHICH WILL CONTINUE FOR FOUR YEARS.

16 Financial Summary Income

For the year ended 31 December 2011 2011 2010 £’000 £’000

Income Sundry Publishing 1,790 5,030 Membership Subscriptions 8,056 7,623 Technical 1,846 1,785 Interest & Dividends & Room Hire Training & Venue Hire 1,849 1,171 Professional Development & Membership 109 120 Professional Development & Membership Interest & Dividends 1,092 846 Sundry 125 661 Training & Venue Hire Total Incoming Resources 14,867 17,236

Resources Expended Technical Cost of Generating Funds: Fundraising Trading; Cost of Goods Sold and Other Costs: Membership Subscriptions Publishing 1 3,676 Technical 4,736 4,478 Expenditure Training & Venue Hire 2,028 1,036 Publishing Interest & Dividends 57 58 Regional Activities & Marketing 2,969 2,672 Professional Development & Membership 741 899 Library & Facilities at Birdcage Walk 1,635 922 Prizes, Awards and Scholarships 494 461 Governance Costs 644 544 Membership Subscriptions Membership Subscriptions 942 1,291 Total Resources Expended 14,019 16,037 Governance Costs

Net Income on Activities 848 1,199 Prizes, Awards and Scholarships Pension Costs (4,135) 782 (Losses)/Gains on investments (2,132) 2,089 Library & Facilities at Birdcage Walk Goodwill amortisation (213) – Exceptional item – 11,200 Net Movement in Funds (5,632) 15,270 Professional Development & Membership

Regional Activities & Marketing

Interest & Dividends & Room Hire  Publishing Summarised Consolidated Balance Sheet  Membership Subscriptions At 31 December 2011 2011 2010  Technical Training & Venue Hire £’000s £’000s  Training & Venue Hire Fixed Assets  Interest & Dividends & Room Hire Technical Intangible Assets 852 –  Regional Activities & Marketing Tangible Assets 2,730 2,261  Professional Development Publishing Investments 28,456 31,703 & Membership 32,038 33,964  Library & Facilities Current Assets 3,674 3,002 at Birdcage Walk Current Liabilities (5,092) (4,352)  Prizes, Awards and Scholarships Pension Scheme Liability (6,551) (2,913) Net Assets 24,069 29,701  Governance Costs  Membership Subscriptions Total Charity Funds 24,069 29,701  Sundry

17 Institution of Mechanical Engineers

1 Birdcage Walk Westminster London SW1H 9JJ

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