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Trustees' Report and Financial Statements Trustees’ report and financial statements For the year ended 31 March 2012 Trustees Executive Director Statutory Auditor The Trustees of the Society are the Dr Julie Maxton PKF (UK) LLP members of its Council, who are Farringdon Place Registered Address elected by the Fellowship. As laid 20 Farringdon Road 6 – 9 Carlton House Terrace down in the Society’s Royal Charter, London EC1M 3AP London SW1Y 5AG 10 of the 21 members of Council retire each year. Council is chaired by royalsociety.org the President of the Society. During Bankers Registered charity No 207043 2011/12, the members of Council were Natwest as follows: 1 Princess Street London EC2R 8BP President Sir Paul Nurse Foreign Secretary Investment Managers Professor Lorna Casselton* Rathbone Brothers PLC Professor Martyn Poliakoff** 1 Curzon Street London W1J 5FB Physical Secretary Professor John Pethica Biological Secretary Internal Auditors Dame Jean Thomas PricewaterhouseCoopers LLP Cornwall Court Treasurer 19 Cornwall Street Sir Peter Williams Birmingham B3 2DT Members of Council Professor David Barford* Professor Gillian Bates** Professor Andrew Blake Dr Simon Campbell** Professor Richard Catlow* Professor Anthony Cheetham Professor John Collinge** Professor Peter Donnelly Dr Matthew Freeman* Professor Brian Greenwood* Professor Alexander Halliday** Professor Andrew Hopper* Professor Judith Howard** Dame Louise Johnson* Dr Robin Lovell-Badge** Professor John McWhirter Professor Kim Nasmyth** Dame Linda Partridge Professor John Pyle* Professor Trevor Robbins Professor Wilson Sibbett Sir Christopher Snowden** Professor Nicholas Tonks** Professor Veronica van Heyningen * Sir Alan Wilson* * Member until 30 November 2011 ** Member since 30 November 2011 Front cover image: plan of the water- powered engine for the fifth arch of Old London Bridge, by John Smeaton, 1768. 2 I Trustees’ report and financial statements Contents President’s foreword 4 Trustees’ report 5 Independent Auditor’s Report to the Council of the Royal Society on the financial statements 19 Consolidated statement of financial activities 21 Consolidated balance sheet 23 Consolidated cash flow statement 24 Accounting policies 26 Notes to the financial statements 30 Trustees’ report and financial statements I 3 President’s foreword This report of the Royal Society’s activities during the year to 31 March 2012 combines the previous Review of the year with a detailed set of financial statements and a description of the governance arrangements under which the Society is run. It thus provides in one place an account of what the Society does and how it is organised. During the year we initiated the process of securing a The Society’s audited accounts for 2011/12 are set Supplemental Charter that will allow Council members out in accordance with legal requirements. The to be elected for terms of up to three years instead headline figures show total income of £70.8 million of the previous one or two. This will enable them and expenditure of £68.2M, as against £71.4 million to exercise their responsibilities as Trustees more and £69.9 million respectively for 2010/11 which effectively, and will enhance overall governance. This included additional activity associated with the 350th Supplemental Charter is the first to be sought since anniversary celebrations. There has also been a the original three Charters were granted in the 1660s, small reduction of 3% in the value of the Society’s and the first to be written in English rather than Latin. investments. In addition, we reconstituted the Finance Committee, strengthened the Audit Committee, established an The report summarises the range of activities that the Advisory Board to support the Society’s external Society undertakes to advance its objectives. These relations, and – following a review of how best to reach diverse audiences – both professional research deepen engagement of the Fellowship in the work of scientists and others interested in science – and the Society – established a Nominations Committee illustrate the impact that the Society has in promoting to support the process of identifying candidates for science and the place of science in national life. This key positions in the Society’s committee structure. impact owes much to the Society’s position as an We completed a review of strategy for the next five authoritative, independent body at the heart of British years, expressing the aspirations of the Society in science. It equally owes much to the many volunteers, terms of recognising and supporting excellence in within and beyond the Fellowship, who give their time science, providing scientific advice to policy-makers, freely to the Society. fostering international cooperation, stimulating public engagement with science, and generally promoting The Society’s staff led by the Executive Director play a science and its benefits. major role in carrying forward the work of the society, and on behalf of the Trustees I am glad to recognise here their dedication and professionalism. 4 I Trustees’ report and financial statements Trustees’ report Science and the Royal Society The Royal Society of London for Improving Natural Knowledge, commonly known as the Royal Society, is a self-governing Fellowship of many of the world’s most distinguished scientists drawn from all areas of science, engineering, and medicine. The Society’s fundamental purpose, reflected in its founding Charters of the 1660s, is to recognise, promote, and support excellence in science and to encourage the development and use of science for the benefit of humanity. The Society is the national Academy of science in and the rest of the world. As a Funder, the Society the UK, and its core is its Fellowship and Foreign supports the work of outstanding individual scientists Membership. The Fellowship comprises the most at various stages of their careers, primarily in the eminent scientists of the UK, Ireland, and the UK, and also encourages collaborations between UK Commonwealth. Fellows are elected through a peer scientists and scientists throughout the world. As review process on the basis of their excellence in an Academy, the Society provides authoritative and science. There are approximately 1,350 Fellows and independent advice on scientific matters, including a further 150 Foreign Members, including more policies that promote excellent science and scientific than 80 Nobel Laureates. It is from the eminence issues that inform public policy. The Society also of its Fellowship and Foreign Membership and its represents UK science internationally and advocates independence from government and particular the use of science as a medium for improving interests that the authority of the Society in scientific relations between nations. The Society also works to matters derives. Fellows and Foreign Members are ensure that science in the UK is funded at a level to invited to fulfil a range of responsibilities for the allow it to remain at the forefront of development and Society on a voluntary basis. Many others, scientists use of science throughout the 21st century. and non-scientists, also contribute to the work of the Society on a voluntary basis. The Fellowship is Scientific knowledge is a public good, contributing supported by a staff based mainly in London. profoundly to human culture and leading to wide economic and social benefits. Science, technology, A major activity of the Society is identifying and and innovation are vital to improving health and the supporting the work of outstanding scientists. The quality of life and for economic growth. The Society Society supports researchers through a range of has played a part in some of the most fundamental, schemes funded by Government, foundations, significant, and life-changing discoveries in scientific trusts, research councils, industrial organisations, history, and Royal Society scientists continue to make gifts, and from the Society’s own resources. The outstanding contributions to science in many research Society facilitates interaction and communication areas. In recent years these have included graphene, among scientists via its discussion meetings and organic light emitting diodes, the World Wide disseminates scientific advances through its journals. Web, quantum matter and information, magnetic The Society also engages beyond the research resonance imaging, IVF, monoclonal antibodies, DNA community, through independent policy work, the sequencing, genetic fingerprinting, and understanding promotion of high quality science education, and of the cell cycle. The Society has also developed communication with the public. the use of science for the benefit of humanity, as seen today in its engagement in global challenges The Society thus combines several roles. As a such as climate change, energy security, food and Fellowship of outstanding scientists embracing the water security, biodiversity, poverty, and population entire scientific landscape, the Society recognises growth. These environmental and social pressures scientific excellence and takes a lead in promoting alter how people live and the balance of the risks they science in the UK, Europe, the Commonwealth, face, prompting consideration of how a more inter- Trustees’ report and financial statements I 5 dependent world is governed. These are all issues to 2017. This report therefore contains references to the which science can make major contributions. headings (1) – (5) under which expenditure is reported in the Statement of Financial Activities (SOFA). The complexity of nature
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