Trustees’ Report and Accounts april 2015 – march 20 16 Front Page Image: Brain scan illustrating the work of Neuroscientist and RSE Fellow Professor Richard Morris CBE. Image © Dr Mark Bastin ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

Contents

Council of the RSE 2015 –16 2

Trustees’ Annual Report Highlights of the year 3 Activity report 4 Financial review 14 Structure, governance and management 15 Policies 17 Future plans 18

Independent Auditors’ Report to the Council of The Royal Society of Edinburgh 20

Accounts Group statement of financial activities 22 (incorporating the income and expenditure account) Group balance sheet 23 RSE balance sheet 24 RSE statement of financial activities 25 (incorporating the income and expenditure account) Group cash flow statement 26 Notes to the financial statements 27

Legal and Administrative Information 52

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The Royal Society of Edinburgh is registered in Scotland as Scottish Charity No. SC000470 The Trustees are the Council Members elected during the financial year (1 April 2015 to 31 March 2016)

Council

President Dame Jocelyn BELL BURNELL DBE Vice-Presidents Professor T S DURRANI OBE Professor N E HAITES OBE Mr I C RITCHIE CBE Sir David WALLACE CBE Professor J W WALLACE CBE General Secretary Professor A ALEXANDER OBE*

Treasurer Mr G R WILSON CB* Fellowship Secretary Professor J M C CONNELL Councillors Professor D A CANTRELL CBE Professor R J CORMACK Professor B E CRAWFORD OBE Sir Muir RUSSELL KCB Professor Dame Joan STRINGER DBE*

Officers and Staff

Curator Dr I G BROWN Research Awards Convener Professor S P BEAUMONT OBE Programme Convener Sir Andrew CUBIE CBE Young People’s Programme Convener Dr C R D VAN DER KUYL Chair of RSE Scotland Foundation Professor D A RITCHIE CBE* Education Committee Convener Professor S A BROWN OBE Chair of RSE Scotland SCI0 Professor P H HOLMES OBE Chief Executive Dr W DUNCAN* Director of Finance Miss K F M ELLIS* Director of Corporate Services Mr G HERBERT* Director of Development and Communications Mr G ADAM*

* Member of Executive Committee

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Highlights of the year In the year 201 5–16 the RSE engaged in a wide and Some of the notable events of the year took place in a varied range of activities, developed and delivered by its short space of time in the autumn, when Sir David Fellows and staff, illustrated by the following table of the Attenborough and Peter Higgs spoke at RSE events on year in numbers: consecutive days, followed only days later by the RSE Christmas Lecture, given by the You tube star Stampycat that filled the Caird Hall in Dundee in the afternoon and evening of St Andrew’s Day. The Year in numbers: As a partner in Connected Scotland, the RSE was • 58 Research awards pleased to welcome many international visitors, including • 22 five-year Research Fellows in post the visits by Professor Chunli Bai, President of the Chinese Academy of Science (CAS) and Professor Liu Congqiang, • 11 Enterprise Fellowship awards VP National Science Foundation of China. In December • 21 Enterprise Fellows in post 2015, Sir David Wallace and Professor Durrani lead a • 15 companies formed by Enterprise Fellows high-level delegation to Beijing with three of the Innovation Centres, Stratified Medicine, CENSIS and IBioIC. • 22 international research awards The expertise of Fellows was used to inform and • 16 international connections, delegations influence in areas ranging from GM crops to Scotland’s and events Fiscal Framework; our evidence was widely referred to by • 6,631 school pupils at Talk Science@Irvine Bay, politicians and the press. The RSE Education Committee RSE@Borders and RSE@/Dumfries and continued to contribute to the debate on raising Galloway events standards in Scotland’s schools, particularly in science, engineering and mathematics. Through the new Quiz a • 3,606 school pupils at Schools talks and Whiz You tube channel initiated as part of the RSE Christmas Lecture activities for young people, Fellows are inspiring and • 368,740 views of Stampy’s RSE Christmas informing school pupils and the public. Lecture on iplayer Enterprise Fellows-past and current-have continued to • 4,748 Quiz A Whiz views online develop successful businesses; for example: Viocare – a bioengineering company run by a 2004 Enterprise Fellow, • 2,238 people at RSE events develops smart sensors that help prevent diabetic foot • 3,106 people at RSE@ public events and ulcers and athletic injuries. The company’s first Prosthetic Christmas Lecture and Orthotic Centre, in Glasgow, was opened by the First Minister in September 2015. Another Enterprise Fellow’s • 35 reports of public events audio technology company, Two Big Ears, was recently • 29 consultation responses acquired by Facebook, which will facilitate scaling of the • 5 pro-active position statements technology. • 4 joint responses of Learned Societies Group • 18 policy meetings and oral evidence sessions • 3 meetings of cross-party group on Science and Technology • 9 issues of academic journals • 2 issues of Science Scotland

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Financial Highlights Activity report The results for the year are presented for the first Aims and Objectives time in accordance with the revised Statement of Recommended Practice (Charities SORP (FRS102)) In fulfilling its Royal Charter for the ‘advancement of implementing current Financial Reporting Standards learning and useful knowledge’ the RSE seeks to applicable in the UK. This has required revision of the contribute to the social cultural and economic wellbeing comparative figures and the details of this transition of Scotland. The RSE vision is to continue to build a are set out in note 23 to the accounts. dynamic and relevant National Academy for Scotland, The overall result at the operational level, before through a Fellowship of proven excellence that is unique investment gains and losses, was a deficit of £19,943, in its breadth across the Sciences, Arts & Humanities and compared to the revised figure of £864 for 2015. This Commerce, and to serve as an independent source of was impacted not only by the effect of SORP FRS102 public inspiration, engagement and expertise in Scotland adjustments, but also by the utilisation of surpluses from and beyond. previous years on the CRF fund. The Health, Happiness The objectives, as set out in the RSE Strategic and Wellbeing project, initiated in 201 4–15, made Framework , are: awards of £98,000 of grants, reducing the result for the year, net of CRF income, by £73,000. Inspiration • To stimulate, support and reward excellence in learning The main change from implementation of SORP FRS102 and research in Scotland and the translation of new is in relation to the accounting for pension costs arising from the RSE’s membership of defined benefit schemes. knowledge to business, wealth creation and economic The new method has resulted in significant additional and social wellbeing non-cash costs being included in the accounts, as • To support the development of emerging Scottish explained in more detail in the Financial Review on talent that will be central to the future leadership and page 14. vitality of Scottish society

The net assets of the RSE and its connected charities Engagement have reduced in the period, due to the unrealised • To communicate with a wide audience, including investment losses of £2.3m in the year and the internationally, providing an important window on the recognition of pension liabilities totaling £559,000 at world for Scotland and being a conduit for relationships 31 March 2016. with other organisations on matters of national importance Resources expended • To enhance the public profile of Scottish intellectual achievement

Expertise • To provide independent and authoritative advice on matters affecting the wellbeing of Scotland and its people, and to initiate and lead public discussion on these matters • To share, with others, knowledge and information on matters of scientific, economic, social and cultural importance Cost of raising funds 3% The core public benefit programme activities are Sustaining and utilising Fellowship 2% described in more detail below, according to the outcomes to which they contribute. Supporting World Class researchers 41% Recognising excellence 1% Strengthening connections with business 20% Reaching out 9% Informing and influencing public decisions 8% Public appreciation of science and culture 15% RSE Young Academy of Scotland 1%

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Activity report 1 Enhancing the capacity of world-class • A study on the discrimination faced by Black and science and culture researchers Minority Ethnic Scots working in Scotland • A calculation that the 2010 Icelandic volcano eruption emitted “on average three times as much toxic gas as RSE Research Awards continued to support some of all European industry combined” the most outstanding young scientists and innovators working in Scotland today. The 11 Personal Fellows who completed their tenure in the last two years have collectively published 151 papers and Key activities initiated 56 collaborations during the five-year fellowships. The following awards in science were made during They have successfully bid individually and jointly for a total the year: of £17m of additional funding in this period. Five of the two • Scottish Government five–year Personal Research cohorts are in lecturer or senior lecturer positions, four are Fellowships, three awards in life and physical sciences senior research fellows and two are working in private from 51 applicants sector consultancy. • CRF Personal Research Fellowship, one award in Previous recipients of the workshops, networks and small biomedical science from seven applicants grants supported in the Arts & Humanities programme demonstrated and achieved impact in a diverse range of • Cormack awards: one Undergraduate Prize, one subjects: Postgraduate Prize and six Vacation Research Scholarships, plus one small research grants in • Conserving and cataloguing an important but unknown astronomy collection of C T R Wilson’s photographic work dating • John Moyes Lessells Scholarship, five travel grants for from the key years of 1911, 1912 and 1913. (approx. 60 engineering graduates. A total of 17 Research Fellows items); and mounting a small exhibition at the Highland continued to be supported by RSE through funding Institute of Contemporary Art (HICA), at Dalcrombie near from the Scottish Government, CRF and the BP Trust. Inverness in July 2015, along with “Wilson Cloud Chamber Workshops.” The Arts & Humanities programme funded by Scottish • Recording the nation’s Great War Memorials and, using Government grant supported the award of: archival sources to provide basic life stories of a selection • Eleven Research Workshops, from 34 applications of the ‘fallen’, an exhibition called “A Stirling 100” of photographs and bibliographical information about 100 • Thirteen Small Research Grants, from 48 applications, fallen service men was held at the University of Stirling and and the Stirling Smith Art Gallery and Museum. • Seven Research Networks from 25 applications • A project examining how changing ideas of theatre were There were seven awards of CRF European Visiting given built form in post-war Britain – short articles on Research Fellowships, in Arts, Humanities and Social aspects of theatre design were included in Theatres Sciences. Magazine , the magazine of The Theatres Trust, and In addition to existing CRF activities, the Trustees of the MoMoWorld 2015 , the magazine of Docomomo Foundation have developed a major new research project Scotland. Both have a wide readership, the latter online for the CRF Fund. The aim is to improve the understanding and open access. of the factors that enable young people to make a • Knitting in the Round: Hand Knitted Textiles and the successful transition from adolescence to adulthood. Economies of Craft in Scotland. This two-year network Two grants were made in the year, for systematic literature aimed to develop collaborations between a range reviews of population interventions and of non-clinical of sectors: business, heritage, education, tourism interventions targeted at vulnerable adolescents, with and culture and arts. It explored how historical the outcome of improving mental health, happiness or understandings of knit as an economic, creative and wellbeing. cultural practice inform modern and contemporary uses of this textile practice. The ‘Knitter in Residence’ at the Performance in the year University of Glasgow brought together knitters, old The recipients of these awards have contributed to useful and young, experienced and beginners. The ‘Knitter knowledge in many areas – some highlights of the work in Residence’ designed knitting patterns inspired by of current and recent RSE Personal Research Fellows the heritage of Glasgow University and using yarns include: produced by some of our heritage producers, Jamieson and Smith and New Lanark. • The “first three-dimensional computer model of how a solid tumour grows, mutates and evolves,” which will help to understand how lethal cancers develop resistance to drugs and chemotherapy.

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Activity report 2 Strengthening connections amongst International Research Awards academia, business, the public and The International Bilateral exchange schemes, arranged the voluntary sectors through sister academies, support researcher exchanges Enterprise Fellowships that lead to collaborative projects and further research The RSE administers three Enterprise Fellowship Schemes , funding from other sources. International joint project funded separately by Scottish Enterprise (SE), the Science awards, run over two years, are awarded with partners and Technology Facilities Council (STFC) and the such as the National Natural Science Foundation of China Biotechnology and Biological Sciences Research Council (NSFC) and the Ministry of Science and Technology (BBSRC). The schemes are designed to encourage (MoST) in Taiwan. commercialisation of technology-based business ideas from academic institutions into spin-out companies; they Key activities aim to help create sustainable companies with high-value • 15 Bilateral Exchange Scheme grants were awarded, jobs and contribute to the economy in the long term. which amounted to 45 person-weeks of researcher support (for visits between Scotland and universities Key activities and institutions worldwide) Appointments made during the year were: • Five joint project awards were made with NSFC on the • Six SE Enterprise Fellows (one funded by Highlands topic of Sensors and Imaging Systems – Hyper spectral & Islands Enterprise) imaging technologies: for use in remote surveying of • Two BBSRC Enterprise Fellows marine energy sites; land use monitoring; and water • One STFC Enterprise Fellow body surveying, including flood monitoring and prevention • Two Enterprise Fellows with joint funding from SE/ BBSRC and STF C/ BBSRC • Two joint project awards were made with MoST on The phasing of the appointments, including those from Sensors and Imaging systems and their applications previous rounds, resulted in 21 Enterprise Fellows being in in medical areas. post for at least part of the year. The key criteria for these Performance in the year awards are: • The RSE/MoST (Taiwan) workshop, November 2015 • Effectiveness of technology – what is it and does it work? resulted in a collaboration to transfer image data • Market potential – what problem is it providing a solution acquired from large studies involving the Universities for? of Edinburgh and Aberdeen to Taipei for analysis using • Commercialisation – what business model and how will the connectogram software outlined at the workshop. the technology be commercialised? • The RSE bilateral exchanges have stimulated a • Success in business – does the applicant have the drive successful formal collaboration with Taiwanese partners, and ambition to succeed? generating a 2M Euro EU Fish4Knowledge project, Performance in the year following the first introduction visit funded via RSE Enterprise Fellows past and present continue to develop grant to Taiwan. their businesses – some highlights are as follows: • An incoming recipient of a bilateral exchange from India commented “To me this is one of the best programmes • Scotrenewables, founded by Barry Johnston with a for a mid-career researcher to pursue further work using 2002 Enterprise Fellowship, received $8.4 million in cutting age technologies. The scheme also allows us to private investment and 10 million Euros from the engage directly with research leaders and develop Horizon 2020 programme. Led by Scotrenewables, collaborative proposals.” FloTEC (The Floating Tidal Energy Commercialisation project) brings together a unique partnership of the most

• Following year one of a NSFC joint project, a colleague experienced and committed commercial, industrial of the lead researcher “has been awarded a prestigious and research organisations involved in tidal energy today. Chinese Scholarship Council (CSC) grant to spend a • Christos Kapatos’ (2004 SE Enterprise Fellow) business, fully paid one-year visit at Strathclyde as a post-doctoral Viocare – a bioengineering company that develops Fellow, to work on the topic in the area of “Broadband smart sensors that help prevent diabetic foot ulcers and Signal Processing for Underwater Hydrophone Arrays”. athletic injuries – opened its first Prosthetic and Orthotic The awardees also intend to make a joint application to Centre, in Glasgow. The clinic, the first of its kind in the Newton Cooperation Fund. Scotland, was opened by the First Minister in September 2015. The company already employs five people and expects to add to its workforce in the coming months. 6 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

Activity report The RSE’s BP Hutton Prize in Energy Innovation was awarded to Dr Cairong Jiang of the School of Chemistry • Dr Oliver Hardick was a 2012 STFC Enterprise Fellow at the University of St Andrews. This prize, funded by the and is cofounder of Puridify. Last year, the commercialisation BP Trust, is awarded to an early-career researcher based in company Imperial Innovations gave £850,000 of seed Scotland, who has shown a significant individual contribution funding for Puridify with support from GlaxoSmithKline’s to energy innovation through research and knowledge venture capital fund, SR One, and co‐investors UCL exchange. Dr. Jiang has made a major contribution to Business. In addition, the companyrecently received a energy development through her extensive work on direct £100,000 Smart Award fromInnovate UK to support the carbon fuel cells (DCFCs). She has developed a practical development of a novel technology, FibroSelect, which system of converting the chemical energy of solid carbon uses nanomaterial for advanced filtration of enzymes. into electricity. • Dr Michael Gilroy, 2008 SE Enterprise Fellow, founded Silent Herdsman Limited. His company was acquired in February 2016 by Afimilk, Ltd, a global provider of dairy 3 farm management solutions. Enhancing the RSE Young Academy of • Two Big Ears, a company founded by 2013 Enterprise Scotland’s capacity to contribute to the Fellow, Abesh Thakur, has recently been acquired by future of Scotland Facebook. The company designs immersive and Key activities interactive virtual reality audio applications and has been In 2015 – 2016, the Young Academy (YAS) held three aided by the enterprise support ecosystem in Scotland, plenary events. Themes discussed at these meeting in which the RSE's Enterprise Fellowship scheme is a include: “Developing a five-year strategy” and key component. “Communicating to influence policy,” and guest speakers A recent Enterprise Fellow commented on the scheme: included Commonwealth Games Chief Executive David “The Enterprise Fellowship is a must for any scientist, Grevemberg, RSE President Professor Dame Jocelyn Bell engineer or technology person who wants to take an idea Burnell FRSE, and Professor Simon Szreter. or research and learn how to make it a commercial In autumn 2015, YAS launched its first five-year strategic opportunity. The training provided is exceptional and very plan, 2020 Vision. The document lays out six core societal relevant; rarely do you get people so committed to helping themes which reflect the YAS vision and mission. The six you make a success of an idea. “ core societal themes are Healthier, Smarter, Enterprising, RSE Business Innovation Forum Sustainable, Equal and International. Activities of the YAS • Following on from the publication of the joint are undertaken by a series of Working Groups. To help RSE/SFE/ICAS Working Group report on Growth Working Groups engage with the six core societal Capital, a seminar was held in April 2015. Participants themes, the Strategic Plan introduces the roles of theme represented included representatives of major ambassadors. Theme ambassadors will be accomplished institutional investors, pension funds, the business individuals, external to YAS, with the capacity to open angel and venture capital communities and business doors and to provide contacts to the Working Groups incubator organisations, as well as experienced when requested. entrepreneurs and business managers. • Entrepreneurial Education: a series of events followed up the publication of the Forum’s paper on Entrepreneurial Education, including a discussion on Radio Edutalk.

Prizes and Awards The IEEE/RSE/Wolfson James Clerk Maxwell Award for 2015 was awarded to Professor Lynn Conway, University of Michigan, USA for contributions to and leadership in design methodology and pedagogy enabling rapid advances and dissemination of VLSI design tools and systems.

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Activity report In 2015 – 2016, the Arts Humanities and Society group Performance in the year delivered the following two public workshops on creating Over the past year, the working groups have continued ties between academics and their wider communities: to progress their aims for public benefit, with notable “Building Meaningful Links with Communities,” which was activities being: held in Dundee; and “University-Prisons Partnerships in Since launching in August 2013, the Research the International” Context, which was held in Edinburgh. The Headlines blog has published 242 posts and had 138,964 group also contributed to the Landscapes and Lifescapes views. There were 64,356 views of blog pieces between Project, which was funded by the RSE. 1st April 2015 and 31st March 2016 and 88 blog pieces The new International Links group sent YAS members to were published during that period. The Rewrite the the third annual meeting of all European Young Academies Headlines competition rolled out to 95 primary schools held in Brussels and the second annual meeting of across Scotland; 2,500 school children participated in Worldwide Young Academies in Stockholm. Several new workshops given by YAS members. In addition, many initiatives resulted from these meetings, including a study teachers received training and resources to deliver the about diversity in the existing young academies, an workshops themselves, and it is estimated that the opportunity to engage with the Global STEM Alliance’s competition reached a total of 5,100 children. new “Junior Academy,” and joint policy statements on The Excellence in Education group hosted the Open Access and Open Data. #Aspirational Advice social media campaign in spring and summer 2015. This campaign asked all Scots to share a piece of advice to young people to help them aim high, dream big, lift their aspirations and achieve their hopes 4 Enhancing the public’s contribution to and goals. It is estimated that the campaign reached over and understanding of science, economic 4,500 people. High-profile contributors included Nicola and cultural issues Sturgeon, Heather ‘the weather’ Reid, and Ian Rankin. (i) Events

The Computing in Schools group collaborated with not- Key activities for-profit organisation, Lambda Jam, to run FIRST LEGO The multidisciplinary programme of events aimed at a League 2015 – 2016 in Scotland. Teams in the league wide variety of audiences comprised: research a real-world problem such as food safety, recycling, energy, etc., and are challenged to develop Seven Lectures a solution. They also must design, build and program • Removing the Fossil from the Fuel a robot using LEGO technology, then compete on a • Making a difference: how to reduce cancer occurrence table-top playing field. The competition expanded to and recurrence include five tournaments in Edinburgh, Glasgow, • Burns: 'A Fiddler and a Poet' St Andrews, Aberdeen and Dundee. In addition to the 500 students who competed in the tournaments, 1,000 • The Twist in Light’s Tail non-competing students received robotics classes in their • Sleeping sickness in sub-Saharan Africa schools. • Scientific generalisations: What’s so good about missing In October, the Industry Working Group helped to out all the differences? organise the second annual Connecting Scotland’s • Glasgow and Scotland’s Gold Medal Moment: Entrepreneurial Network event at the RSE. This evening The Chairman’s Perspective brought together over 80 RSE Fellows, RSE Enterprise Fellows, YAS members, Saltire Fellows, entrepreneurs, Two Annual Lectures investors and organisations that support commercialisation • RSE Christmas Lecture Stampy's Christmas Cake in Scotland. The event also included a pitching competition, Caper (An Adventure in YouTubing) which allowed 27 attendees to practise their business • MacCormick European Lecture: Enlightenment: pitches in front of a supportive audience. A Matter of Urgency

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Activity report Performance in the year Four Joint Lectures in partnership with the The numbers of people attending the events shown following organisations: above are summarised as follows: • Edinburgh International Festival: Lanark: in • Lectures and Annual lectures 2,811 conversation with Graham Eatough • Joint lectures 512 • Royal Society/RSE at Edinburgh International Science • Discussion forums 348 Festival: Jocelyn Bell Burnell in conversation • Conferences 780 • RSE/RAEng Joint Annual Lecture: Investing in • Wider outreach events 1,249 Innovation – Fintech for the Future • RSE/SCRR Peter Wilson Lecture: Lost in Translation The initial reach of RSE public events can be measured Three Discussion forums through the numbers of people attending; but, importantly, reports, audio and, where possible, video on the website, • Ethics and Professions: Banking makes this material available to anyone with access to • Life in the Soil: Does it Matter? the internet. • The UK in Europe. In or Out? The events cover a wide range of subject areas. To determine the value of our programme, attendees are Seven Conferences asked whether they have learned something new and, if • Climate Change: Science and Society so, what they are going to do with that knowledge. Some • Social science in Scotland over the next decade – of that feedback is shown below: joint event with the Academy of Social Sciences • Removing the Fossil from the Fuel • Constitutional Change in Canada and the UK – “This is complementary to the work I do in Renewable Challenges to Devolution and federalism Energy. So I will be interested to follow the progress of • SUPA Cormack day conference this technology.” • Inspiring Brilliance – celebrating Maxwell’s genius • Climate Change: Science and Society and legacy “The understanding gained will be disseminated back • The Science of Beauty to others in the company. This knowledge will be used • Understanding European Challenges to improve our climate resilience services for clients.”

RSE@Dumfries & Galloway public lecture • The Making, Keeping and Losing of Memory • Gravitational Wave Astronomy “I will use it to assist when working with patients who have memory problems.” RSE@Borders: seven public lectures • Bygone Borderlands Festival • A Good Man in Africa • Women and the Stars • Bordering on the Supernatural • Who Killed Lord Darnley? • The Thirty Nine Steps to Governor General • Scots & English

Talk Science@Irvine Bay: five public lectures • The Making, Keeping and Losing of Memory • The Large Hadron Collider • Ian Rankin and Sue Black: in conversation • Scotland Rocks • Do Zoos have a place in today’s society?

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Activity report Those interviewed so far include: Peter Higgs (theoretical physicist, Nobel Laureate); Sir David Attenborough (ii) Schools (broadcaster, author); Jocelyn Bell Burnell (astrophysicist); Key activities Ian Rankin (writer); Dame Sue Black (forensic anthropologist); Stampy Cat (YouTube star); Jim Al-Khalili (theoretical 2015 Christmas Lecture physicist, author, and broadcaster); Roger Penrose The 2015 Christmas Lecture Stampy's Christmas Cake (mathematical physicist, mathematician); Lari Don Caper (An Adventure in YouTubing) was delivered by (children’s author); Iain Stewart (geologist and BBC Joseph Garrett AKA Stampy Cat on St Andrew’s Day in presenter); James Blake (journalist); Victoria Martin the Caird Hall, Dundee. Stampy is one of the world’s (physicist working at CERN); Victoria Crowe (artist). most successful YouTube stars. His brand of Let’s Play videos based around popular games such as Minecraft Performance in the year attract an audience of millions every day. At this unique The Christmas Lecture was recorded by the BBC and event, Stampy gave insights into how he creates his reported viewing figures were: videos and what it takes to be a successful YouTuber. • Views on iPlayer 368,740 The Schools Programme continues to use RSE Fellows and other experts to share their knowledge and • The BBC promo for the show 468,998 views understanding of science and culture with pupils, with a • Stampy’s afternoon and particular focus on enthusing those already “engaged”, evening Let’s Play videos 108,655 times and and reaching those pupils who are not in close proximity 61,567 times to Scottish Universities and Science Centres, and who therefore have more limited opportunity to participate • Three clips on the RSE and meet with experts. YouTube site 6,187 views The programme comprised: • Stampy’s Quiz a Whiz video over 1,637 views The event went into the top 10 on iPlayer across all • 31 Science Master Classes for S1 and S2 science subjects, hosted at four Universities, attended by 205 programmes and the BBC social media accounts also students from 78 schools performed very well, with over 400,000 interactions on the @bbcscotlearn account. • 19 Schools Talks where the content was agreed with teachers in line with their curriculum, attended by 1204 Feedback from parents attending with their children was students from 36 schools that the event succeeded in being both exciting and informative, and gave a message to the young people • Talk Science@Irvine Bay: 73 Schools Talks attended by 4,659 students that, with hard work, success at something you enjoy is achievable. • RSE@Dumfries & Galloway: 16 Schools Talks attended by 1,172 students The feedback from the rest of the Schools Programme emphasized the value of the presentations given and the • RSE@Borders: 13 Schools Talks attended by 800 students extent of engagement of the pupils with a wide variety of subject matter delivered by experts. • RSE Discussion Forum , supported by the Darwin Trust of Edinburgh – If I ran the news

Quiz a Whiz YouTube channel (formerly known as Digital Broadcasting Project). In December 2015, the RSE launched a new digital project for school pupils called Quiz a Whiz . School children are invited to submit questions to quiz 'whizzes' who are RSE Fellows, Young Academy members, experts, and RSE event speakers. We film the responses of the whizzes and upload the videos to YouTube. 21 videos were uploaded in the period to March 2016.

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Activity report 5 Informing and influencing public (iii) International events policy decisions

Key activities Key activities The RSE informs policy and debate through its Advice RS E–NSFC Workshop Papers, Briefing Papers, Inquiries, Education Committee The RSE and the NSFC have a formal agreement, work and also through its support of the Learned Societies established to support research collaborations between Science Education Group. Scotland and China. Under the terms of this agreement, the RSE and NSFC organised a workshop in Beijing in Key outputs of the RSE’s Policy Advice unit were: August 2015 in the area of Sensors and Imaging systems. • Five briefing or position papers on GM Crops, Workshop participants presented their work in this area Curriculum for Excellence, Options for Scotland’s Gas and explored opportunities for international collaboration future, Entrepreneurial Education and the debate on the between researchers based in Scotland and China. Education (Scotland) Bill. • 29 Advice papers, including nine to the Scottish RS E–MoST Workshop Parliament, five to the Scottish Government and five to The RSE held a joint workshop with the Ministry of Science House of Commons Select committees. These papers and Technology, Taiwan in November 2015 on the topic of included the following: the Demographics of Scotland Neuroscience. The workshop consisted of two days of and the Implications for the Financing of Devolution; a presentations followed by two days of laboratory visits to Review of Qualifications & Assessment; Public Service the Kaohsiung Chang-Gung Memorial Hospital, National Television; the Renewable Energy Sector; and the EU Yang-Ming University and National Taiwan University. Regulatory Impact on Life Sciences. Franc o–Scottish Science Seminar Series • A Science and the Parliament event was held in In partnership with the French Embassy in London, a partnership with the Royal Society of Chemistry, seminar entitled Energy Conversion and Storage . The focusing on Science Education in Scotland. series consists of events run for early-career scientists to • The RSE Education Committee continued to provide explore and publicly present areas of science where both evidence and comment on all levels of education. Scotland and France have strengths and to stimulate • The Learned Societies Group on Scottish Science Franco-Scottish collaboration. Education , facilitated by the RSE, published the findings Constitutional Change in Canada and the UK – of research work on the resourcing of science in Challenges to Devolution and Federalism Scottish schools in School Science Review , as well as This event, held jointly with the Royal Society of Canada, contributing submissions to topics such as the review considered the challenges facing Canadian federalism of qualifications and assessment and the National and British devolution. The conference brought together Improvement Framework. scholars from Canada and Scotland for a comparative analysis of the questions and what each country can learn Performance in the year from the other. The adoption/mention of recommendations from RSE policy work highlights the impact made and some examples Performance in the year are shown below. Relationships built through the international events result in • The reports on education matters were cited in building collaborations through follow-on joint project Parliamentary debates on education issues and higher research grants with NSFC and MoST. Delegate feedback education governance; also in the Scottish Parliament on the workshops was positive: ”the workshop was a great Education and Culture Committee Official Report on success. An integrated project proposal is now to be spending decisions of the Scottish Funding Council. developed, in collaboration with our China counterparts, • On financial matters, RSE advice was quoted in the incorporating the three elements of satellite, airborne and Scottish Parliament Finance Committee Report on UAV remote sensing capabilities”. Scotland’s Fiscal Framework and in the parliamentary “A model of good practice – well planned and hosted by debate on the Scottish Fiscal Framework. RS E–NSFC. A revelation – fascinating insights into aspects • RSE Fellows gave oral evidence on four occasions, of applied research at the cutting-edge of technology.” there were three meetings of the Cross-party group on Science and Technology and fourteen other meetings and seminars to discuss the RSE's policy work across all areas. 11 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

Activity report RSE/Makdougall Brisbane Medal: Dr Malcolm Macdonald, Reader of Space Technology, University of 6 Recognising Excellence Strathclyde, for his outstanding research in the (i) The Fellowship Programme development and application of space mission systems to The RSE’s Fellowship includes men and women from challenge conventional ideas and advance new concepts all parts of Scotland, the UK and overseas, and in the exploration and exploitation of space. Dr Macdonald encompasses the full range of disciplines, including is also a Member of the RSE Young Academy of Scotland. science, engineering, social sciences, arts, humanities, RSE/Henry Duncan Medal: Mr Adam Purvis, Founder law, education, business and industry. and Director, Power of Youth, Edinburgh, for his outstanding work in promoting entrepreneurship across In March 2016, the RSE announced the election of seven the globe to build a better world through business. new Corresponding Fellows, four Honorary Fellows and 45 new Fellows. This followed the scrutiny in 2015 of 198 RSE/Thomas Reid Medal: Dr Nasar Meer, Reader in candidates through a four-stage committee process, Comparative Social Policy and Citizenship, University of culminating in the postal ballot in December to the entire Strathclyde, for his ground-breaking research work on Fellowship. The addition of new Fellows in 2016 brought Muslim identities, race equality and nationalism. In the numbers in the Fellowship up to 1,628 – 71 Honorary addition to this, he has an outstanding record in media Fellows; 74 Corresponding Fellows; 1,483 Fellows. and public engagement. Dr Meer is a current RSE Personal Research Fellow. The discipline balance of the Fellowship can be broadly , initiated in 2011, represented by four cognate sectors. In the Fellowship RSE Prizes for Public Engagement recognise and reward the advancement of high-quality (excluding Honorary & Corresponding) the current public engagement with research. The prizes are balance of these sectors is: supported by a donation from the James Weir Foundation. • 35.3% Life Sciences The RSE Senior Public Engagement Prize for 2015: • 34.7% Physical Engineering and Informatic Sciences Professor Iain Stewart, Professor of Geosciences • 21.1% Arts, Humanities, and Social Sciences Communication, University of Plymouth, for his • 8.9% Business, Public Service and Public Engagement exceptional, wide-ranging public engagement through The RSE holds an Induction Day each year for the new the medium of broadcasting and his work with school Fellows. This provides an opportunity for new Fellows to pupils and teachers. meet with members of Council, the Executive Board and RSE Innovator’s Public Engagement Prize: Dr Helen RSE staff, and to be formally admitted to the Society. Bridle, Assistant Professor, School of Engineering & There were also events primarily for Fellows, including the Physical Sciences, Heriot-Watt University, for her Fellows’ Summer Reception, the Royal Medals Award innovative and original contributions to public Ceremony and the Annual Statutory Meeting. engagement as an ambassador for (young women) engineers and engineering and her work, delivering the (ii) Prizes “Ingenious!” outreach scheme to schools. In Spring 2016, the following RSE prizes were awarded: RSE/Sir James Black Medal: Professor Thomas 7 Reaching out Simpson FRS FRSE, Alfred Capper Pass Professor of (i) International relations Chemistry, University of Bristol, for his outstanding Since 2003, Scottish Government funding has supported contribution to the biosynthesis of natural products as a activities arising from Memoranda of Understanding pioneer in the interdisciplinary field of chemical biology (MoUs) (13) and informal agreements (9) between the RSE/Lord Kelvin Medal: Professor Anthony Doyle, RSE and overseas sister Academies. These support SUPA, School of Physics & Astronomy, University of develop and maintain relationships and activities,and act Glasgow, for his outstanding contribution to the field of as a catalyst for other international engagement described experimental particle physics and for his extensive public earlier in this report. engagement activities. The RSE is one of eight partners in Connected Scotland, RSE/Patrick Neill Medal: Dr Asier Unciti-Broceta, a grouping of higher education institutions, government PI/Group Leader, Cancer Research UK Edinburgh and its agencies and British Council Scotland. It aims to Centre, MRC Institute of Genetics & Molecular Medicine, draw together the knowledge, expertise, networks and University of Edinburgh, for his outstanding research work resources of each of the partners to develop collaborative in biomedical technologies and innovative therapeutics ventures in support of the Scottish Higher Education through multi-disciplinary collaboration. sector international activities in teaching, research and knowledge exchange. A current priority country identified

12 by Connected Scotland is China. ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

Activity report Science Scotland continues to increase people’s awareness of cutting-edge science and technology Key activities activities in Scotland. Two issues of Science Scotland were published in the year, in hard copy and on the Science Scotlan d–China relations Scotland website: Computational Science and Engineering In May 2015, Professor Bai Chunli HonFRSE, President, and a second issue entitled Focus on the RSE Young CAS, visited the RSE to be formally admitted as an Academy of Scotland illustrating the multidisciplinary Honorary Fellow (the RSE’s highest category of Fellowship) approaches and collaborations by the YAS members. and to sign the Fellows Roll Book. During his visit, he met Fellows also received a monthly e-bulletin, which enabled with Scottish Government First Minister, Nicola Sturgeon, in them to keep up to date with and, if appropriate, Glasgow. disseminate information on the RSE and its work. In A delegation from NSFC led by Vice-President, Professor addition, eight public e-bulletins were sent out during the Liu Congqiang, visited the RSE from 1–3 July 2015. year to advertise various events and schools activities. During their visit They met with two of the Scottish Innovation Centres in Glasgow (CENSIS and IBioC) and (iii) Journals met with the Cabinet Secretary for Education and Lifelong The RSE, through the Foundation, publishes two journals Learning, Angela Constance. They also visited the Scottish Earth and Environmental Science Transactions of the Royal Funding Council (SFC) and the Scottish Alliance for Society of Edinburgh and Proceedings A: Mathematics . Geoscience, Environment and Society (SAGES). They are distributed worldwide, to the Americas, Europe, Australasia, the Middle East, Africa and Asia, and the peer The RSE hosted the second high-level forum in the review process draws on an international bank of referees NSF C–RS E–CAS New Paradigms for Future Collaboration and editors. Six issues of Proceedings A were published in Science and Innovation series in Scotland in December during the 201 5–16 year. Two issues of Transactions were 2015. A two-day workshop, involving key high-level experts, published. was held by the RSE and three of the Scottish Innovation Centres; namely, Centre for Sensor and Imaging Systems, The journals are well regarded by academics as publication Industrial Biotechnology and Stratified Medicine Scotland. vehicles for their research: Proceedings A has a five-year impact factor of 0.961, placing the journal 63rd out of 312 Other countries in the mathematics category; and Transactions’ five-year The RSE signed an MOU with the Brazilian Academy of impact factor of 1.686 places it of 95th out of 175 in the Sciences, in November 2015 in Vienna, and the next steps geosciences multi-disciplinary category. are to be determined; there is potential for in/outward visits The digital versions of the RSE’s archive journals – and workshops to foster collaboration. In addition, the RSE Transactions (178 5–1979) , Transactions: Earth Sciences may be able to help the Academy of Sciences Malaysian (198 0– 2000) , Proceedings (183 2 –1940) , Proceedings A (ASM) set up an Enterprise Fellowship Scheme with (194 1– 1999) and Proceedings B (194 1– 1996) continue to potential for reciprocal training. be marketed for sale to the public by Cambridge University The Head of the Bureau for Cooperation at the Indonesian Press. The RSE’s highly regarded journal archive is thus Institute of Sciences (LIPI) and the Project Manager at the more easily accessible to a world-wide audience, and British Council – Indonesia met with representatives from generates useful additional income. Universities Scotland and the RSE in March 2016 to learn more about research in Scotland and opportunities for (iv) Friends of the Society collaboration. In 2009, the RSE launched a corporate engagement initiative entitled Friends of the Society ; with the aim of (ii) Communications strengthening relations with the Scottish business sector. Four issues of ReSourcE , the RSE newsletter, were A number of prominent organisations continue to support published and distributed to the Fellowship and around the project, which provides the Friends with an opportunity 3,000 others, including business leaders, journalists, to find out more about the RSE and the important work we research institutes, schools, MPs, MSPs and interested carry out. Details of the Friends in the year are shown in individuals. note 28 to the financial statements.

13 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

Financial review Income and Expenditure Result for the year Income The results for the year are presented for the first time in Total income was £5.37m (2015 – £5.33m), a similar level accordance with the revised Statement of Recommended overall to the previous year, including an uplift of 0.5% in Practice (Charities SORP (FRS102)), implementing current Government grant-in-aid provided through the Scottish Financial Reporting Standards applicable in the UK. This Funding Council. has required revision of the comparative figures and the Donations and legacies of £0.36m, including Fellows’ details of this are set out in note 23 to the accounts. subscriptions and donations from Friends of the Society, As required by SORP FRS102, the statement of financial increased by 19% over last year. Rental income remained activities includes realised and unrealised gains and losses stable due to successful re-letting of the third floor of the building. Investment income decreased by 4%, reflecting on investments in the total of net income. At this level, the more difficult market conditions. result for the year was a loss of £2.37m and the movement on funds after actuarial movements on pension liabilities Income for charitable activities was broadly stable at was £1.99m. £3.94m (2015 £3.92m). The overall result at the operational level, before investment gains and losses, was a deficit of £19,943, compared to the restated figure of £864 for 2015. However, this was Income by source impacted not only by the effect of SORP FRS102 adjustments, but also by the utilisation of £73,000 of past surpluses on the CRF fund, enabling the award of grants for work on the Health Happiness and Wellbeing project.

Accounting for pensions and other adjustments The RSE is an admitted member of two defined benefit scheme s–Lothian Pension Fund and USS. In the past these have been accounted for on different bases, as permitted by the financial reporting standards then in force. As a result of the implementation of FRS102, and to reflect more accurately the inherent risk in these schemes, a full calculation and disclosure has been carried out for both Fellows 4% schemes at 31 March 2016 (see note 21). Individuals 2% The resulting adjustments to pension costs in the Legacies <1% statement of financial activities and the liability disclosed in the balance sheet have been reflected in the opening Companies 2% balance sheet at 1 April 2014 and the results for the prior Charitable trusts 2% year to March 2015. The effect on the current year has Scottish Government – research funding 28% been to charge an additional £123,000 of non-cash pension cost over and above the employer contribution Scottish Government – other 16% paid in cash. Other Public sector bodies 19% FRS102 also requires the recognition of a provision for the Operating income from activities 7% value of staff holiday earned but not taken at the year end. Rental and investment income 20% This has also been treated as an FRS102 adjustment. (see note 23). The effect on the current year was small (£3,700) as the outstanding amount at each year end was fairly stable.

14 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

Expenditure recognised, because it was unlikely that such an asset Total expenditure increased by £64,000 as a result of could be realised. The deficit of £559,000 at 31 March increased expenditure on charitable activities. 2016 is thus in relation to the USS scheme. It is probable that this liability will crystallise in the foreseeable future, as The cost of raising funds (note 6) includes the cost of the the active membership of the scheme reduces. Fellowship office, the costs of building management in respect of income from letting of surplus space, as well as fundraising costs, both direct and management time in Structure, Governance and management securing funding. In 2015, this category included the costs The RSE Council, chaired by the President, comprises of refurbishment of the second floor of the building. fourteen Trustees, including five Vice-Presidents, the Grants payable increased by 4%, including £183,000 General Secretary, the Treasurer, the Fellowship Secretary additional expenditure on Enterprise Fellowships arising and five Councillors. Subject to nomination and annual from additional appointments. Expenditure on developing re-election by the Fellowship, Council members serve for relationships internationally was 9% up on the previous three years; except for the General Secretary and Treasurer, year, reflecting the variety of activities and visits during who may serve for up to four years. All are unpaid. the year, both incoming and outgoing. Other categories The Council is responsible for the strategic direction and of expenditure remained broadly stable, other than the policies of the RSE, and normally meets quarterly. impact of changes to pension accounting in the allocation In addition to the fourteen members of Council, there are of overheads. five elected office-bearers who are not Trustees of the RSE: Governance costs are now shown as part of support costs the Education Convener, the Programme Convener, and allocated to activities. The total allocated has remained the Research Awards Convener, the Young People’s at a similar level to previous years, representing less than Programme Convener and the Curator. With the exception 3% of total recurring income. of the Curator, these office-bearers are conveners of Investment losses are now included in net income. operational committees . Any or all of the office-bearers are The position at 31 March reflected the high volatility and able to attend meetings of Council, when there is business poor performance of the UK equity market in the first at Council relevant to their responsibilities. The Council quarter of 2016. The losses realised of £97,187 represented members and the office-bearers are all elected annually 0.3% of the total portfolio value, but unrealised losses at the by the Fellowship in a postal ballot. balance sheet date amounted to £2.257m or 9.9% of the New members of Council and the office-bearers are given opening value. an extensive induction through briefing notes and Transfers between funds shown in the Statement of discussions with the Chief Executive and senior staff. Financial Activities comprise the recurring transfers from the The Executive Committee is chaired by the General Capital Asset Reserve of a total of £102,000 to match the Secretary and has as its members the Treasurer, the depreciation of buildings and the capital repayment of the Convener of the RSE Scotland Foundation, one Trustee loan to the Foundation; and a transfer on consolidation from (other than the President) chosen by the Council, the Chief the Foundation restricted fund balance to the General Fund, Executive and up to three other members of the senior staff equivalent to the net inter-entity income received in the RSE. chosen by the Chief Executive. All are entitled to vote. The Executive Committee has power to co-opt other relevant Balance Sheet members, but they are not entitled to vote. Consolidated net assets on a restated basis have decreased The Audit & Risk Committee (see Risk Management), by £1.99m, from £26.73m to £24.74m, mainly as a result of Fellowship Committee, Investment Committee and Prizes the unrealised investment losses at 31 March 2016. & Medals Committee report directly to Council. Net current assets increased from £1.56m to £1.73m. The operational committees include the Education Debtors have increased by £0.06m, and creditors have also Committee, the International Committee, the Business decreased, mainly reflecting the repayment of an unspent Innovation Forum, various Research and Enterprise Awards European research award. Committees, the Meetings Committee and the Young People’s Committee. These Committees largely, but not The restated pension liability of £820,000 at 31 March 2015 exclusively, comprise Fellows of the RSE and are concerned improved to £559,000 at 31 March 2016, mainly as a result with the operational delivery of the RSE’s varied activities. of the reversal of the Lothian Pension Fund liability. The All Fellows are actively encouraged to participate in the FRS102 pension position calculated by the fund actuary RSE’s activities. for accounts purposes was an asset, which was not

15 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

Structure, Governance and management Related parties Material transactions with related parties are disclosed in Three other charities founded by and closely connected to the the notes to these financial statements. The RSE’s policy is RSE, the BP Research Fellowship Trust (the BP Trust), the for trustees, executive and advisers to declare their interest RSE Scotland Foundation (the Foundation), and The RSE and exempt themselves from all relevant discussions and Scotland SCIO (the SCIO), are included in the consolidated decisions which may involve a transaction with a related financial statements. party or in which they may have a conflict of interest. The BP Trust was created following a donation of £2m in 1988 from BP to support a scheme of post-doctoral research Risk management fellowships in specified subjects and which are awarded at the The Audit and Risk Committee, operating on a joint basis sole discretion of the RSE. The RSE President, General with the Foundation, the SCIO and the BP Trust, reports Secretary and Treasurer are the BP Trustees, ex-officiis . directly to the Council and the Trustees of the Foundation, During the year, the Trustees of the BP Trust took steps to the SCIO and the BP Trust. Its Chair, who cannot be a wind up the Trust and transfer its assets to the RSE. After Trustee or other office-bearer of the RSE, is invited to obtaining the agreement of BP, and consent of OSCR, this attend Council meetings as an observer. Its remit includes took place on 31 May 2016. Further details are shown in keeping under review the effectiveness of internal control note 22 to the financial statements. and risk management systems of the RSE and its connected charities. The Council believes that the existing systems The Foundation plays a leading role in the RSE’s public and the structure of decision taking and reporting through outreach activities and manages the premises in senior staff, the Executive Committee and the Council Edinburgh. Five of the Trustees of the Foundation are continue to provide assurance that risks are assessed appointed ex-officio of positions held on RSE Council and a and carefully managed. minimum of four nominated Trustees are appointed for a three-year term by the RSE Council. Following a transfer The principal risks included in the risk register include: of assets in 2009, the Foundation is also responsible for managing the programme of activities in support of research in Scotland, funded by the Caledonian Research Fund. Description of risk Action to manage risk The RSE Scotland SCIO (the SCIO), was incorporated in June 2012. Its purposes are: (a) the advancement of Risk that pension Council has reviewed education; (b) the advancement of the arts, heritage, costs and liabilities pension policy and culture or science; and (c) the advancement of citizenship will become has determined to or community development. unaffordable make a phased withdrawal from The SCIO utilises the broad intellectual resources and defined benefit talents of the Fellowship of the RSE and related bodies, schemes as appropriate, to enhance the intellectual and cultural advancement of Scotland. The SCIO currently oversees the Loss of opportunity Plans to develop the development of the RSE Young Academy of Scotland. Its to redevelop RSE’s fundraising Trustees are appointed by RSE Council and serve for up to buildings as capability and three years in the first instance, and may serve for a further envisaged due to capacity during 2016 three years thereafter. funding constraints The actvity report describes the achievements of the RSE, the Foundation, the SCIO and the BP Trust, reflecting the fact that the financial statements are presented on a consolidated basis for this group of connected charities. Going concern The performance of the RSE and its connected charities in The Trustees have considered the Group’s reserves and the year, as compared to the output targets set in the cash position and the secured and expected incoming Operational Plan, is reported to the Executive Committee, resources over the next 12 months, and consider that it is and thereafter to RSE Council and to the Trustees of the appropriate to prepare the financial statements on a going other connected bodies. These reports have again shown concern basis. that the majority (>95%) of the targets were reached or exceeded. In many areas, additional targets, not in the initial Operational Plan, were also delivered.

16 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

Policies including support for travel connected with research or Investment powers and policy scholarship, small-scale specialist meetings, to assist research visitors to Scotland to undertake collaborative The management of the investment funds of the RSE, research work with a Fellow, to assist a visiting lecturer to the Foundation and the BP Trust is carried out by Speirs come to Scotland, to assist research collaboration & Jeffrey & Co on a discretionary basis. The objectives set between two institutions in Scotland or between by the Council are to ensure a sufficient level of income to universities and industry, and to assist in the publication of meet the target set annually by the Council, and to invest books written by Fellows. These grants are funded by the for real capital growth over the long term. The Council has RSE’s designated Grants Fund. The Grants Committee is delegated the detailed monitoring of performance to an responsible for making awards in accordance with the Investment Committee, which includes at least one ordinary detailed rules set out by the Council for the disbursement member of Council and two experienced investment of the Grants Fund. professionals, and which makes comparisons against a composite benchmark reflecting the mix of assets held and Reserves policy and funds the WM Charities Income Constrained Index. The total funds are as follows:

The performance of the portfolios in the year was as follows: £’000 Income Actual Total Benchmark Total funds 24,735 Target income return Less restricted (14,625) £’000 £’000 % % Less: Designated RSE 350 349 (6.7) (2.6) Capital Asset reserve (3,285) BP Trust 130 125 (6.6) (2.6) Development Fund (5,074) Foundation 350 344 (6.0) (2.6) Building Fund (600) The Investment Committee meets twice annually with the Staff Development Fund (277) investment managers to discuss their compliance with the Other designated funds (738) constraints set by the Committee and risk environment. In the year under review, no compliance issues arose which General Fund Balance 136 required to be reported to the Committee. Although the income return was broadly satisfactory, the capital performance in the final quarter of the financial year was The RSE holds a number of restricted funds resulting from poor and the total return in the year to March 2016 did not bequests for particular purposes, details of which are set meet the composite benchmark of a deficit of 2.6% total out in note 2 to the financial statements. The Council has return. This shortfall has also impacted the annualised allocated designated funds, witin its unrestricted funds, performance over three and five years. A periodic review the purposes of which are also set out in note 2 to the of investment management arrangements will be carried financial statements. The General Fund represents the out in 201 6–17. balance of unrestricted funds arising from past operations. The Council has reviewed the purposes and amounts of Operating policies – grant making each of the designated funds, which comprise allocations The RSE makes grants to individuals in higher education for specific purposes of sums that had been donated in institutions in support of research activities in the prior periods, together with the Development Fund, the categories of postdoctoral Research Fellowships, Support Building Fund and the Capital Asset Reserve. The Building Research Fellowships, Postgraduate Studentships, Fund provides support for non-routine maintenance and Undergraduate Vacation Scholarships, Enterprise development of the buildings in George Street. The Staff Fellowships and international exchange grants. Each of Development Fund is used to provide flexibility in staffing these categories is specifically funded from various structure and remuneration, including pensions. It is also sources, including the RSE’s restricted funds. The basis of the Council’s intention to strengthen the RSE’s financial eligibility and selection varies according to the detailed independence by using major donations and legacies to scheme regulations, which are published on the RSE’s build the Development Fund as an endowment to be used website (www.royalsoced.org.uk). Grants are also made in for both income and capital projects. support of research activities of Fellows of the RSE,

17 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

The Council has examined the requirement to hold Future plans unrestricted funds, and concluded that the present level of the General Fund of £136,000 is satisfactory, taking into As the current Strategic Framework reached its end date account the potential for reallocation of the designated in 2015, the Council has been working to refresh the plans reserves. It would, however, be desirable to have a General for the next five years. The outcome of this review will Fund reserve in the range of six months’ expenditure on determine the detail of objectives for the period. central costs, or approximately £1m. As resource becomes Key priorities, of course, remain unchanged: in particular, available, steps will be taken to replenish the Fund. the need to continue to promote excellence through nominations to the Fellowship and research awards; to Pay policy ensure we are well placed to make an authoritative and The Trustees and the senior management team, independent contribution to discussion of important public comprising the Chief Executive, Director of Finance, policy issues, notably regarding the Scottish economy and Director of Communications and Business Development society; and to continue efforts to diversify our sources of and the Director of Corporate Services, are the key funding. management personnel. No Trustees receive remuneration; In addition, however, the Council are looking at ways: details of the reimbursement of Trustees expenses are in • to ensure that the range of expertise represented in the Note 24 to the financial statements. All staff are joint Fellowship is well balanced; employees of the RSE, the Foundation and the RSE • to improve communications within the Fellowship and Scotland SCIO. Their terms and conditions of employment with the wider community, especially the business are set by a Staffing Committee, chaired by the General community and public authorities, to ensure that the Secretary, and including the Treasurer and a Vice-President Society’s role and the value of its contribution are better and an external adviser. The pay of all staff is reviewed understood; and annually by the RSE Staffing Committee, taking account of inflation and the level of awards in other relevant sectors • to explore ways to develop more fully the revenue- and benchmarked on a biennial basis against similar generating potential of the George Street building; organisations. Where this shows a pay level compared for example, by improving the building’s information to the benchmark that is outside the tolerance set by the technology and audio visual facilities and by better Staffing Committee, adjustments may be made, subject to managing the use of space. affordability. • The work on all these areas will be proceeding in the current year in the context of the strategic review. Any initiatives arising from the Council’s reflections, particularly regarding the use of the building, are likely to involve additional expenditure and will, where necessary, be the subject of consultation with the Fellowship.

18 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

Statement of Council’s responsibilities

The Council is responsible for preparing the Annual Report Approval of the Report and the financial statements in accordance with applicable At the time of approving this report: law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). Under • so far as each Trustee is aware, there is no relevant charities legislation applicable in Scotland, the Council is audit information of which the Auditors are unaware; required to prepare accounts for each financial year that and give a true and fair view of the state of affairs of the RSE • each Trustee has taken all the steps that they ought to itself and of its consolidated connected charities and of have taken as a Trustee to make themselves aware of the incoming resources and application of resources of any relevant audit information and to establish that the the RSE itself and of its consolidated connected charities Auditors are aware of that information. for that period. In preparing these financial statements, the Council is required to:

• select suitable accounting policies and apply them consistently; • observe the methods and principles of the Charities Signed on behalf of the Council SORP; Gerald Wilson CB • make judgements and estimates that are reasonable Treasurer and prudent; 6 September 2016 • state whether applicable accounting standards have been followed, subject to any departures disclosed and explained in the financial statements; and • prepare the financial statements on a going-concern basis, unless it is inappropriate to presume that the RSE will continue in operation. The Council is responsible for keeping accounting records that disclose, with reasonable accuracy at any time, the financial position of the RSE and which enable it to ensure that the financial statements comply with the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and RSE’s own Laws. It is also responsible for safeguarding the assets of the RSE and, hence, for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Council is also responsible for the maintenance and integrity of the charity and financial information included on the RSE’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

19 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

Independent Auditors’ Report to Opinion on financial statements the Council of the Royal Society In our opinion the financial statements: of Edinburgh • give a true and fair view of the state of the Group's and We have audited the financial statements of the Royal Charity’s affairs as at 31 March 2016 and of the Society of Edinburgh for the year ended 31 March 2016 Group's and Charity's incoming resources and on pages 21 to 50 The financial reporting framework that application of resources, for the year then ended; has been applied in their preparation is applicable law and • have been properly prepared in accordance with United United Kingdom Accounting Standards (United Kingdom Kingdom Generally Accepted Accounting Practice; and Generally Accepted Accounting Practice including FRS 102 “The Financial Reporting Standard applicable in the • have been prepared in accordance with the UK and Republic of Ireland”. requirements of the Charities and Trustee Investment (Scotland) Act 2005, regulation 8 of the Charities This report is made solely to the charity’s Trustees, as a Accounts (Scotland) Regulations 2006 (as amended). body, in accordance with section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005, and Matters on which we are required to report regulation 10 of the Charities Accounts (Scotland) by exception Regulations 2006 (as amended). Our audit work has We have nothing to report in respect of the following been undertaken so that we might state to the charity’s matters where the Charities Accounts (Scotland) Trustees those matters we are required to state to them in Regulations 2006 (as amended) requires us to report to an auditor’s report and for no other purpose. To the fullest you if, in our opinion: extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and its • the information given in the Trustees’ Report is not Trustees as a body, for our audit work, for this report, or consistent with the financial statements; or for the opinions we have formed. • the Group and Charity has not kept proper accounting records; or Respective responsibilities of Trustees and Auditor • the financial statements are not in agreement with the As explained more fully in the Statement of Trustees’ accounting records and returns; or responsibilities [set out on page 19] the Trustees are responsible for the preparation of the financial statements • we have not received all the information and and for being satisfied that they give a true and fair view. explanations we require for our audit. We have been appointed auditors under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act RSM UK Audit LLP (formerly Baker Tilly UK Audit LLP) 2005 and report in accordance with regulations made Statutory Auditor under that Act. Our responsibility is to audit and express Chartered Accountants an opinion on the financial statements in accordance with First Floor, Quay 2 applicable law and International Standards on Auditing 139 Fountainbridge (UK and Ireland). Those standards require us to comply Edinburgh with the Auditing Practices Board’s (APB’s) Ethical EH3 9QG Standards for Auditors. (RSM UK Audit LLP is eligible to act as an auditor in terms Scope of the audit of the financial statements of section 1212 of the Companies Act 2006) A description of the scope of an audit of financial statements is provided on the Financial Reporting Edinburgh Council’s website at 20 September 2016 http://www.frc.org.uk/auditscopeukprivate

20 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

accounts

21 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

Group statement of financial activities (incorporating the income & expenditure account) for year ended 31 March 2016

Unrestricted Restricted Note General Designated Fund Funds Income Funds 2016 Total 2015 Total £ £ £ £ £ £

Income Legacies – 5,468 – – 5,468 10,325 Other donations 262,534 58,984 – 35,263 356,781 293,328

Donations and legacies 4(a) 262,534 64,452 – 35,263 362,249 303,653 Charitable activities 4 121,743 – 3,442,383 373,256 3,937,382 3,916,738

Rental income 4 – – – 243,865 243,865 242,426 Investment income 4 22,771 256,772 – 547,239 826,782 864,423

Total income 407,048 321,224 3,442,383 1,199,623 5,370,278 5,327,240

Expenditure Raising funds 6 (163,617) (4,325) – (112,110) (280,052) (401,000) Charitable activities 6 (581,484) (93,752) (3,442,383) (992,550) (5,110,169) (4,925,376)

Total Expenditure (745,101) (98,077) (3,442,383) (1,104,660) (5,390,221) (5,326,376)

Net operating (deficit )/surplus (338,053) 223,147 – 94,963 (19,943) 864

Gains/(losses) on investment assets Realised gain s 13 (1,186) (20,423) – (75,578) (97,187) 91,974 Unrealised (losses)/gains 13 (41,756) (719,662) – (1,496,123) (2,257,541) (848)

Net (expenditure )/income (380,995) (516,938) – (1,476,738) (2,374,671) 91,990

Transfers between funds 18,19 217,294 (101,818) – (115,476) – –

Other recognised gains/(losses) Actuarial gains/(losses) losses on defined benefit pension funds 21 384,000 – – – 384,000 (202,000) Net movement in funds 220,299 (618,756) – (1,592,214) (1,990,671) (110,010) Reconciliation of funds:

Balance brought forward at 1 April 2015 20 (84,281) 10,592,843 – 16,217,325 26,725,887 26,835,897

Balance carried forward at 31 March 2016 20 136,018 9,974,087 – 14,625,111 24,735,216 26,725,887

There were no acquired or discontinued activities in the year. The notes on pages 27 to 51 form part of these financial statements.

22 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

Group balance sheet at 31 March 2016

Note 2016 2016 2015 2015 £ £ £ £

Fixed assets Tangible fixed assets 12(a) 3,259,824 3,357,388 Heritage assets 12(b) 42,920 23,920 Investments at fair value 13 20,265,222 22,604,986 Total fixed assets 23,567,966 25,986,294

Current assets Debtors 14 310,788 241,867 Cash at bank and in hand 151,054 127,150 Deposits – Designated funds – – Deposits – Restricted funds 919,673 1,041,613 Deposits – General funds 1,420,546 1,454,182

Total current assets 2,802,061 2,864,812

Current liabilities Creditors: amounts falling due within one year 15 (1,075,811) (1,305,219)

Net current assets 1,726,250 1,559,593

Total assets less current liabilities 25,294,216 27,545,887

Provision for liabilities and charges 16 – –

Net assets excluding pension fund 25,294,216 27,545,887

Defined benefit pension schemes liability 21 (559,000) (820,000)

Net assets after pension fund liability 24,735,216 26,725,887

Funds

Restricted Funds 19 14,625,111 16,217,325 Unrestricted Funds Designated Funds 18 9,974,087 10,592,843 General Fund 17 136,018 (84,281) 10,110,105 10,508,562

Total funds 20 24,735,216 26,725,887

The accounts were approved by the Council on 6 September 2016 and signed on its behalf by:

Gerald Wilson, CB Treasurer

23 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

RSE balance sheet at 31 March 2016

Note 2016 2016 2015 2015 £ £ £ £

Fixed assets Tangible fixed assets 12(a) 1,827,680 1,878,613 Heritage assets 12(b) 42,920 23,920 Investments at fair value 13 8,836,273 9,790,368

Total Fixed Assets 10,706,873 11,692,901

Current assets Loan to RSE Scotland Foundation 14(a) 1,469,864 1,516,672 Debtors 14(b) 211,950 164,815 Cash at bank and in hand 69,334 53,403 Deposits – Designated funds – – Deposits – Restricted funds 919,673 1,041,613 Deposits – General funds 1,420,546 1,454,182

4,091,367 4,230,655

Current liabilities Creditors: amounts falling due within one year 15 (2,032,058) (2,319,931)

Net current assets 2,059,309 1,910,754

Total assets less current liabilities 12,766,182 13,603,655

Provision for liabilities and charges 16 – –

Net assets excluding pension fund 12,766,182 13,603,655

Defined benefit pension schemes liability 21 (559,000) (820,000)

Net assets after pension fund liability 12,207,182 12,783,655

Funds Restricted Funds 19 2,097,077 2,275,093 Unrestricted Funds Designated Funds 18 9,974,087 10,592,843 General Fund 17 136,018 (84,281)

10,110,105 10,508,562

Total funds 20 12,207,182 12,783,655

The accounts were approved by the Council on 6 September 2016 and signed on its behalf by:

Gerald Wilson, CB Treasurer

24 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

RSE statement of financial activities (incorporating the income & expenditure account) for year ended 31 March 2016

Unrestricted Restricted Note General Designated Fund Funds Income Funds 2016 Total 2015 Total £ £ £ £ £ £

Income Donations and legacies 4 262,532 64,452 – 42,738 369,722 288,879 Charitable activities 4 178,427 – 3,914,946 3,854 4,097,227 3,979,351 Investment income 4 81,565 256,772 – 77,743 416,080 432,942

Total income 522,524 321,224 3,914,946 124,335 4,883,029 4,701,172

Expenditure Raising funds (163,617) (4,325) – (30,554) (198,496) (231,265) Charitable activities (581,484) (93,752) (3,914,946) (49,285) (4,639,467) (4,456,742)

Total expenditure 6 (745,101) (98,077) (3,914,946) (79,839) (4,837,963) (4,688,007)

Net operating surplus/(deficit) (222,577) 223,147 – 44,496 45,066 13,165

Gains/(losses) on investment assets

Realised gains 13 (1,186) (20,423) – (6,141) (27,750) 64,232 Unrealised losses 13 (41,756) (719,662) – (216,371) (977,789) (3,961)

Net income/(expenditure) (265,519) (516,938) – (178,016) (960,473) 73,436

Transfers between funds 18 101,818 (101,818) – – – –

Other recognised gain s/(losses)

Actuarial gains/(losses) on Lothian Pension Fund 21 384,000 – – – 384,000 (202,000)

Net movement in funds 220,299 (618,756) – (178,016) (576,473) (128,564)

Reconciliation of funds

Balance brought forward at 1 April 2015 (84,281) 10,592,843 – 2,275,093 12,783,655 12,912,219

Balance carried forward at 31 March 2016 136,018 9,974,087 – 2,097,077 12,207,182 12,783,655

There were no acquired or discontinued activities in the year. The notes on pages 27 to 51 form part of these financial statements.

25 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

Group cash flow statement for the year ended 31 March 2016

2016 2016 2015 2015 £ £ £ £

Cash flow statement Net cash used in operating activities (907,663) (792,627)

Cash flows from investing activities Interest received 8,418 8,239 Dividends received 818,364 856,184 Purchase of property, plant and equipment (48,837) (43,808) Proceeds from sale of investments 3,782,764 1,965,386 Purchases of investments (3,797,728) (1,965,386)

Net cash provided by investing activities 762,981 820,615

Cash flows from financing activities New Enlightenment Fund receipts 13,010 19,397

Change in cash in the year (131,672) 47,385

Reconciliation of net cash flow to movement in net funds

Cash at beginning of year 2,622,945 2,575,560 (Decrease)/increase in cash in the year (131,672) 47,385

Cash at end of year (note 29) 2,491,273 2,622,945

Net income/(expenditure) for the year (as per the statement of financial activities)

Net income before transfers (2,374,671) 91,990 Losses/(gains) on investments 2,354,728 (91,126) Retirement benefit scheme current service cost 293,000 242,000 Retirement benefit scheme contributions (198,000) (202,000) Retirement benefit scheme finance cost 28,000 24,000 Development Fund receipts (13,010) (19,397) Dividends receivable (818,364) (856,184) Interest receivable (8,418) (8,239) Depreciation 127,401 121,886 Loss on disposal of fixed assets – 2,769 Decreas e/(Increase) in debtors (68,921) 89,730 (Decrease )/ Increase in creditors (229,408) (136,466) Movement on provision for liabilities – (51,590)

Net cash outflow from operating activities (907,663) (792,627)

26 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

1 Accounting basis Basis of consolidation The consolidated financial statements are prepared The RSE is a public benefit entity, registered as a using acquisition accounting and include the financial Scottish charity (SC 000470). The financial statements statements of the RSE and of entities which are under have been prepared in £ sterling, in accordance with its control: RSE Scotland Foundation, RSE Scotland Accounting and Reporting by Charities: Statement of SCIO and BP Research Fellowship Trust. As the Recommended Practice (Charities SORP (FRS102)) objectives of each of these entities are narrower than applicable to charities preparing their accounts in those of the RSE, they have been treated as restricted accordance with the Financial Reporting Standard funds. applicable in the UK and the Republic of Ireland (FRS102), with FRS102, and with the Charities and Trustee Critical accounting estimates and areas Investment (Scotland) Act 2005 and the Charity of judgement Accounts (Scotland) Regulations 2006 (as amended). Estimates, assumptions and judgement are necessarily The financial statements comprise three primary part of the preparation of the financial statements. financial statements: the statement of financial There are no critical estimates or assumptions included activities, which incorporates the income and in the financial statements. There are no critical expenditure account, the balance sheet and the judgements that have been made in applying the statement of cash flows. The financial statements RSE's accounting policies that would have a significant have been prepared under the historical cost effect on the amounts recognised in the financial accounting rules as modified to include the statements. revaluation of investments. Going concern On the basis of the RSE's reserves and cash position and the secured and expected income for the next twelve months the Council considers that it is appropriate to prepare the financial statements on a going-concern basis. Transition to FRS102 The Trustees have considered whether, in applying the accounting policies required by FRS102 and the Charities SORP FRS102, the revision of comparative items was required. Adjustments to holiday pay and pension provision have been made. On transition, opening fund balances at 1 April 2014 and the previously reported balances for the year ended 31 March 2015 have been restated. Details are set out in note 23.

27 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

2 Funds Restricted Funds Robert Cormack Bequest – to promote astronomical The RSE’s funds are classified in accordance with the knowledge and research in Scotland. definitions in SORP into Restricted Funds, where there are restrictions placed by a donor as to the use of income or Lessells Trust – to fund scholarships abroad for engineers. capital; Designated Funds, where the Council has set Auber Bequest – to fund research in Scotland and England aside sums within its unrestricted funds for a particular by naturalised British citizens over 60 years of age. purpose; and the remaining General (unrestricted) Fund. The classifications made are as follows: Prizes Fund – to fund various prizes. General Fund Dryerre Fund – to fund postgraduate scholarships in medical or veterinary physiology. A discretionary Fund available to the Council to meet the ordinary activities of the Society. Fleck Bequest Fund – to promote interest, knowledge and appreciation of science and its applications Designated Unrestricted Funds throughout Scotland. Capital Asset Reserve Fund – representing the book cost Piazzi Smyth Legacy Fund – to fund high altitude of the buildings at 22 – 24 George Street and 26 George astronomical research. Street, together with the building project loan to the RSE Scotland Foundation. Sillitto Fund – to promote interest in physics among young people. Building Fund – a fund to provide support for non-routine maintenance and development of the Buildings in CASS Fund – to fund academic/industrial liaison. George Street. Retailing Seminar Fund – to fund a programme Development Fund – to provide development finance of seminars on retailing. to implement the RSE Strategic Framework. Edinburgh Drug Absorption Foundation Fund – to fund a Staff Development Fund – to provide flexibility in staffing series of conferences on the broad theme of ‘Drugs Futures’. structures and remuneration. RSE Scotland Foundation – a trust to advance the education C H Kemball Fund – income from this fund is used to provide of the public in Scotland in science, engineering and hospitality for distinguished visitors from other learned technology, incorporating assets transferred from the societies and Academies. Caledonian Research Fund (CRF). Dr James Heggie Fund – income from this fund supports the RSE Scotland SCIO – incorporated in June 2012 with RSE’s activities with young people. charitable purposes of the advancement of education; the arts, heritage, culture or science; and of citizenship or Grants Fund – a fund created by contributions and legacies community development. The SCIO co-ordinates the from Fellows and used to provide grants to support research development of the RSE Young Academy of Scotland. activities to Fellows. BP Research Fellowship Trust – a trust to fund postdoctoral Restricted Income Fund – income funds received research fellowships in Scotland. for expenditure on current projects. James Clerk Maxwell Fund – Balance of the funds received to facilitate the commissioning and maintenance of the statue of James Clerk Maxwell in George Street.

28 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

3 Accounting policies Expenditure Expenditure and support costs Income All expenditure is included on an accruals basis, having Donations and Legacies regard to any constructive obligations created by multi-year Subscription income for the subscription year to October is grant commitments. recognised proportionally to the period to which it relates and Where directly attributable, expenditure is allocated to the includes income tax recoverable on the subscriptions paid relevant activity. Overhead and support costs are allocated to under Gift Aid. Amounts relating to the period from 1 April to activities on the basis of direct staff costs in each area of activity. 31 October are shown as deferred income. Governance costs incurred in connection with the Revenue or capital grants from government and other management of RSE assets, organisational administration and sources are recognised when the RSE becomes entitled compliance with constitutional and statutory requirements are to the funds, the amount can be measured reliably and included in support costs and allocated to activities. it is probable that the income will be received. Cost of raising funds Donations of a recurring nature from other charitable The cost of raising funds includes expenditure incurred in foundations and one-off gifts included in other income supporting the Fellowship and incurred on fundraising and are taken to revenue in the period to which they relate. development initiatives. Legacy income is recognised when there is sufficient Grants payable evidence to provide necessary certainty that it will be received Grants payable are recognised as a liability when the RSE is and the value can be measured with sufficient reliability. under an actual or constructive obligation to make a transfer Investment income to a third party. Where grants are time related to future Interest and dividends are accounted for in the year in which periods and are to be financed by specific grants receivable they are received. in those future periods, they are treated as liabilities of those periods and not as liabilities at balance sheet date. Such Income for charitable activities grants are disclosed as future commitments . Income for activities is accounted for on an accruals basis. Operating Leases Publication income receivable in foreign currencies is converted Rental costs under operating leases are charged on a into sterling at rates of exchange ruling at the date of receipt. straight line basis over the lease period. Income for research fellowships is accounted for in the period in which the RSE becomes entitled to the resources. Tangible fixed assets, depreciation and repairs Income received for specific projects, and received in advance The RSE’s principal assets are its buildings in George Street, of the commencement of the project, is deferred. If the project Edinburgh. The cost of the buildings is depreciated on a were not to proceed as planned, the RSE would not be entitled straight line basis assuming a 50-year life. It is the policy to retain the funds. For performance-related grants, where of the RSE Council to maintain the buildings to a high terms or conditions have not been, or may not be, met, the standard. Any permanent diminutions in value are reflected income is deferred and included in the balance sheet as in the statement of financial activities. Costs of repairs and deferred income. maintenance are charged against revenue. Expenditure incurred by the RSE Scotland Foundation in the improvements to 26 George Street is held at cost and is being depreciated on a straight line basis from the date of completion of the refurbishment over the period of the lease to the RSE Scotland Foundation to 30 June 2047. Minor equipment up to £500 is charged against revenue in the year of purchase. Computer and audio-visual equipment is depreciated on a straight line basis over 3–20 years.

29 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

Heritage Assets Creditors The historical records of the RSE from its formation in 1783, Trade and other creditors are measured at the amount including papers and minute books, are placed on deposit payable. Provisions are recognised when the charity has an with the National Library of Scotland, where they are obligation at the reporting date as a result of a past event catalogued and accessible to the public on request. which it is probable will result in the transfer of economic benefits and that obligation can be estimated reliably. Portraits, furniture, publications and other artefacts held in Provisions are measured at the best estimate of the the George Street premises have been acquired in the amounts required to settle the obligation. ordinary course of business over the years prior to 2009 and have not been capitalised. These items may have intrinsic Pensions historical value, but they are not held principally for their contribution to knowledge and culture nor directly in The RSE participates in two defined benefit pension furtherance of the charitable objectives of RSE. Reliable schemes which are externally funded. The cost of providing estimates of cost or value are not available on a basis that pensions as calculated in accordance with FRS102 is would justify the costs of establishing them. The category allocated over employees’ working lives with the RSE of heritage assets shown in fixed assets comprises portraits and is included in staff costs. acquired since that time at cost and donated assets at Both defined benefit schemes are currently open to new valuations carried out on acquisition. These assets are entrants. Council has decided that both will be closed to not depreciated. new entrants as soon as practicable. In the event that the RSE withdrew completely from either of these schemes, Investments there would be significant exit liabilities. The policy adopted Investments are stated at their fair value at the balance sheet is to build a reserve in a designated fund, in addition to the date. Gains and losses on disposal and revaluation of FRS102 pension adjustments, to provide for this risk over investments are charged or credited in the statement of a period of time. financial activities and allocated to funds in accordance with Pension fund assets arising from valuations under FRS their proportionate share of the investment portfolio. 102 are recognised only to the extent that the asset is Financial Instruments recoverable in the foreseeable future.

Financial assets and liabilities are recognised when a Foreign exchange contractual right or obligation arises and are stated gross Assets and liabilities denominated in foreign currencies are unless there is a legally enforceable right to set off the translated at the rate of exchange ruling at the balance sheet recognised amounts, which is intended to be exercised. date, while transactions arising during the year are translated Loans receivable due over one year are stated at fair value at the spot rate prevailing when the transaction arises. unless they may be regarded as concessionary, when they Exchange gains or losses arising in the year are recognised are valued at cost. in the statement of financial activities. Debtors Trade and other debtors receivable within one year are measured at the amount receivable, unless there is an impairment. Provision for impairment is made when there is evidence that the amounts due will not be collected in accordance with the related contract. Prepayments are valued at the amount prepaid. Accrued income is measured at the amount recoverable.

30 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements 4 Income

C u rrent year 2016 Donation Promotion of Other Total Rental Investment 2016 (Note 4a) research and charitable charitable income income innovation activities activities GROUP £ £ £ £ £ £ £

Fellows 231,818 – – – – – 231,818 Individuals 71,175 – 16,637 16,637 – – 87,812 Legacies 5,468 – – – – – 5,468 Companies 28,500 1,200 65,490 66,690 – – 95,190 Charitable Trusts 25,288 6,224 94,864 101,088 – – 126,376 Scottish Government – 1,477,448 881,265 2,358,713 – – 2,358,713 Public Sector Bodies – 1,018,110 3,650 1,021,760 – – 1,021,760 Journal Publications – – 199,585 199,585 – – 199,585 Conference Facilities – – 172,909 172,909 – – 172,909 Rental Income – – – – 243,865 – 243,865 Dividends & Interest – – – – – 826,782 826,782 362,249 2,502,982 1,434,400 3,937,382 243,865 826,782 5,370,278 RSE

Fellows 231,818 – – – – – 231,818 Individuals 60,222 – 16,637 16,637 – – 76,859 Legacies 5,468 – – – – – 5,468 Companies 28,500 1,200 65,490 66,690 – – 95,190 Charitable Trusts 43,714 478,788 94,864 573,652 – 58,795 676,161 Scottish Government – 1,477,448 881,265 2,358,713 – – 2,358,713 Public Sector Bodies – 1,018,110 3,650 1,021,760 – – 1,021,760 Other Income – – 59,775 59,775 – – 59,775 Dividends & Interest – – – – – 357,285 357,285 369,722 2,975,546 1,121,681 4,097,227 – 416,080 4,883,029

Donation Promotion of Other Total Rental Investment 2015 Prior year 2015 (Note 4a) research and charitable charitable income income innovation activities activities GROUP £ £ £ £ £ £ £

Fellows 241,877 – – – – – 188,609 Individuals 18,213 – 21,218 21,218 – – 39,431 Legacies 10,325 – – – – – 10,325 Companies 22,500 – 68,572 68,572 – – 91,072 Charitable Trusts 10,738 7,000 86,980 93,980 – – 104,718 Scottish Government – 1,607,878 749,759 2,357,637 – – 2,357,637 Public Sector Bodies – 976,051 6,866 982,917 – – 982,917 Journal Publications – – 224,958 224,958 – – 224,958 Conference Facilities – – 167,456 167,456 – – 167,456 Rental Income – – – – 242,426 – 242,426 Dividends & Interest – – – – – 864,423 864,423 303,653 2,590,929 1,325,809 3,916,738 242,426 864,423 5,327,240 RSE

Fellows 241,877 – – – – – 241,877 Individuals 3,439 – 14,017 14,017 – – 17,456 Legacies 10,325 – – – – – 10,325 Companies 22,500 – 68,572 68,572 – – 91,072 Charitable Trusts 10,738 358,402 190,606 549,008 – 60,667 620,413 Scottish Government – 1,607,878 749,759 2,357,637 – – 2,357,637 Public Sector Bodies – 976,051 6,866 982,917 – – 982,917 Other Income – – 7,200 7,200 – – 7,200 Dividends & Interest – – – – – 372,275 372,275 288,879 2,942,331 1,037,020 3,979,351 – 432,942 4,701,172

31 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

4 Income (continued) 4a Donations and legacies 2016 2015 £ £

Contributions from RSE Fellows Admission fees 13,500 12,880 Annual subscriptions 202,964 190,217 Fellows’ donations 58,993 8,172 Income tax recoverable under Gift Aid 15,354 30,608 290,811 241,877 Lessells Trust additional receipt 9,847 9,837 Legacies 5,468 10,325 Friends of the Society – corporate partners 28,500 22,500 Other income 2,207 4,340 RSE 336,833 288,879 Young Academy of Scotland – subscriptions and donations 15,020 14,542 Other income 10,396 232

GROUP 362,249 303,653

In addition to the donations set out above, the RSE receives donations made specifically in support of activities which are included in activities income (see note 28(b)).

5 I n c o m i n g r e s o u r c e s f r o m c h a r i t a b l e a c t i v it i e s 2016 2015 Group RSE Group RSE £ £ £ £

Scottish Government Grant – research fellowships 1,166,174 1,166,174 1,308,445 1,308,445 Scottish Government Grant – arts & humanities awards 311,274 311,274 299,433 299,433 Marie Curie COFUND – – 84,850 84,850 Scottish Enterprise 665,156 665,156 595,960 595,960 BBSRC Enterprise Fellowships 245,806 245,806 158,074 158,074 STFC Enterprise Fellowships 108,548 108,548 137,167 137,167 Charitable Trusts 6,024 478,588 7,000 358,402

Promotion of research and innovation – restricted 2,502,982 2,975,546 2,590,929 2,942,331 Scottish Government Grant – Engagement and expertise 480,994 480,994 366,042 366,042 Scottish Government Grant – International activities 400,271 400,271 378,917 378,917 IEE E/ RS E/ Wolfson James Clerk Maxwell Award 22,515 22,515 15,390 15,390 Wider out reach income 39,475 39,475 – – Policy and advice income – – 4,800 4,800

Total restricted income 3,446,237 3,918,801 3,356,078 3,707,480 Policy and advice income 29,745 29,745 41,592 41,592 Meetings 49,614 49,614 61,962 61,962 Wider outreach activities 3,650 3,650 47,110 47,110 International income 13,322 13,322 5,382 5,382 Educational activities 22,320 22,320 5,000 5,000 Other sundry income – – 7,200 7,200 Journal publications 199,585 59,775 224,958 103,625 Conference facilities letting 172,909 – 167,456 – 3,937,382 4,097,227 3,916,738 3,979,351

Further information relating to grants, donations and receipts and their application is set out in note 28.

32 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

6 Expenditure

2016 2015

GROUP Direct costs Support costs Total 2016 Direct costs Support costs Total 2015 (Note 10) (Note 10) £ £ £ £ £ £ Costs of generating funds Fundraising 17,147 63,719 80,866 9,482 108,995 118,477 Fellows’ subscriptions – 117,630 117,630 – 112,788 112,788

17,147 181,349 198,496 9,482 221,783 231,265 Building management – 76,648 76,648 81,383 83,312 164,695 Investment fees 4,908 – 4,908 5,040 – 5,040

Total costs of generating funds 22,055 257,997 280,052 95,905 305,095 401,000

Charitable activities Enhancing World-Class Research (note 8) 1,957,311 254,670 2,211,981 2,107,605 220,852 2,328,457 Strengthening connections among academia, business, public and voluntary sector (note 9) 906,219 190,767 1,096,986 813,814 152,267 966,081 RSE Young Academy of Scotland 19,373 61,491 80,864 30,943 46,529 77,472 Enhancing public contribution to science, economic and cultural issues 161,790 630,764 792,554 174,744 525,758 700,502 Informing and influencing policy decisions 38,865 376,316 415,181 21,577 364,336 385,913 Recognising excellence 24,974 11,558 36,532 29,226 6,461 35,687 Reaching out 200,804 275,267 476,071 179,492 251,772 431,264

Total cost of charitable activities 3,309,336 1,800,833 5,110,169 3,357,401 1,567,975 4,925,376

Total Expenditure 3,331,391 2,058,830 5,390,221 3,453,306 1,870,070 5,326,376

Support costs as set out in note 10 have been allocated to activities in proportion to the employment cost in each area of activity.

33 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

6 Expenditure (continued)

2016 2015

RSE Direct costs Support costs Total 2016 Direct costs Support costs Total 2015 (Note 10) (Note 10) £ £ £ £ £ £ Costs of generating funds Fundraising 17,147 63,719 80,866 9,482 108,995 118,477 Fellows’ subscriptions – 117,630 117,630 – 112,788 112,788

Total costs of generating funds 17,147 181,349 198,496 9,482 221,783 231,265

Charitable activities Enhancing World-Class Research (note 8) 1,866,226 250,680 2,116,906 1,985,860 218,980 2,204,840 Strengthening connections among academia, business, public and voluntary sector (note 9) 895,630 190,767 1,086,397 803,661 152,267 955,928 RSE Young Academy of Scotland 61,491 – 61,491 50,122 – 50,122 Enhancing public contribution to science, economic and cultural issues 140,213 455,889 596,102 155,634 367,972 523,606 Informing and influencing policy decisions 38,865 376,316 415,181 21,577 364,336 365,913 Recognising excellence 15,115 11,558 26,673 24,342 6,461 30,803 Reaching out 109,826 226,891 336,717 98,011 207,519 305,530

Total cost of charitable activities 3,127,366 1,512,101 4,639,467 3,139,207 1,317,535 4,456,742

Resources expended 3,144,513 1,693,450 4,837,963 3,148,689 1,539,318 4,688,007

Support costs as set out in note 10 have been allocated to activities in proportion to the employment cost in each area of activity.

7 Grants payable 2016 2015 £ £

Promotion of research (note 8) 2,097,050 2,209,988 International grants (note 8) 114,931 118,469

2,211,981 2,328,457 Prizes and grants 69,422 35,687 Promotion of Innovation (Note 9) 1,096,986 911,669

3,378,389 3,275,813

34 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

8 Enhancing World-Class Research Group RSE Group RSE 2016 2016 2015 2015 £ £ £ £

Promotion of Research Scottish Government Fellowships 1,049,096 1,049,096 1,180,424 1,180,424 Marie Curie COFUND actions – – 73,341 73,341 Arts & Humanities Workshop Grants 273,348 273,348 269,301 269,301 BP Research Fellowship Trust 125,593 125,593 129,216 129,216 CRF European Fellowships 18,090 18,090 44,341 44,341 CRF Health Happiness and Wellbeing 87,952 87,952 – – CRF Personal Fellowships 179,055 179,055 138,315 138,315 CRF Post graduate studentships 91,085 – 121,745 – Lloyds TSB Foundation for Scotland Studentship – – 6,090 6,090 Robert Cormack Bequest 6,555 6,555 6,154 6,154 Piazzi Smyth Bequest 870 870 870 870 John Moyes Lessells Scholarship 18,665 18,665 25,684 25,684 Auber Bequest Awards – – – – Henry Dryerre Scholarship 20,502 20,502 12,846 12,846 RS E/ IASH Susan Manning Workshop Award 3,000 3,000 3,000 3,000 Other direct costs 4,613 4,613 5,394 5,394

1,878,424 1,787,339 2,016,721 1,894,976

Support costs (note 6) 218,626 214,636 193,267 191,395

2,097,050 2,001,975 2,209,988 2,086,371

International exchange grants 78,887 78,887 90,884 90,884 Support costs (note 6) 36,044 36,044 27,585 27,585

114,931 114,931 118,469 118,469

2,211,981 2,116,906 2,328,457 2,204,840

An analysis of institutions and individual awards made under this expenditure heading is included in the Society’s Review 2015, obtainable from the address on the back cover. All awards are made to individuals and payable to their institutions.

35 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

9 Strengthening connections between business and academia

2016 2015 £ £

Scottish Enterprise Fellowships 561,221 520,216 STFC Enterprise Fellowships 94,352 120,436 BBSRC Enterprise Fellowships 204,838 140,180

860,411 780,832 Support costs (Note 6) 168,484 130,837

1,028,894 911,669 Business Innovation Forum 12,852 13,523 Policy partnerships 1,611 4,069 BP Hutton Prize for innovation 10,000 – IE E/ RSE /Wolfson James Clerk Maxwell Awaard 21,345 15,390

45,808 32,982 Support costs (Note 6) 22,283 21,430

GROUP 1,096,986 966,081

10 Support costs – Current year

Group 2016 RSE 2016 TOTAL Support Governance TOTAL Support Governance £ £ £ £ £ £

Staff costs (including secondments) (note 11) 1,331,828 1,291,521 40,308 1,107,286 1,066,978 40,308 Staff training, agency and recruitment costs 27,851 8,584 15,578 24,163 8,585 15,578 Other staff costs – 3,688 – 3,688 3,688 – Non-cash pension cost adjustments (FRS 17) 123,000 123,000 – 123,000 123,000 –

1,482,679 1,426,793 55,886 1,258,137 1,202,251 55,886 Other costs Establishment expenses 200,752 193,173 7,579 206,862 199,282 7,579 Computer and equipment costs 57,952 52,889 5,063 21,260 16,197 5,063 Communication, stationery and printing costs 48,063 37,620 10,443 25,949 15,507 10,443 Travel and subsistence, hospitality 29,902 24,488 5,414 29,488 24,485 5,003 Publicity 42,002 36,459 5,543 42,002 36,459 5,543 Miscellaneous 7,348 5,789 1,559 7,287 5,760 1,527 Professional fees and subscriptions 45,055 18,845 26,210 35,481 9,271 26,210 Audit fee 17,676 – 17,676 9,216 – 9,216 Depreciation 127,401 122,240 5,161 57,768 52,607 5,161

576,151 491,503 84,648 435,313 359,569 75,744

Total central costs 2,058,830 1,918,296 140,534 1,693,450 1,561,819 131,631

36 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

10 Support costs – Prior year 2015 Group 2015 RSE 2015 TOTAL Support Governance TOTAL Support Governance £ £ £ £ £ £

Staff costs (including secondments) (note 11) 1,258,298 1214,040 44,258 1,047,736 1,003,478 44,258 Staff training, agency and recruitment costs 22,290 7,968 14,322 22,290 7,968 14,322 Other staff costs 13,155 13,155 – 13,156 13,156 13,155 Non-cash pension cost adjustments (FRS 17) 64,000 64,000 – 64,000 64,000 –

1,357,744 1,299,163 58,580 1,147,182 1,088,602 58,580 Other costs Establishment expenses 186,774 177,553 9,221 216,565 207,344 9,221 Computer and equipment costs 61,933 56,846 5,087 7,009 1,922 5,087 Communication, stationery and printing costs 50,351 38,464 11,887 30,715 18,828 11,887 Travel and subsistence, hospitality 25,064 14,518 10,546 24,157 14,204 9,953 Publicity 33,416 29,592 3,824 33,416 29,592 3,824 Miscellaneous 6,276 3,934 2,342 3,468 1,125 2,342 Professional fees and subscriptions 11,939 7,178 4,761 10,627 5,865 4,761 Audit fee 17,688 – 17,688 9,096 – 9,096 Depreciation 121,886 115,570 6,316 57,083 50,767 6,316

515,327 445,815 69,512 392,136 329,649 62,487

Total central costs 1,873,070 1,744,978 128,092 1,539,318 1,418,251 121,067

Support costs have been allocated to activities in proportion to the employment cost in each area of activity as set out in note 6.

11 Employees

2016 Total RSE Support Funded Funded Funded by RSE Payroll Project costs costs by Foundation by SCIO 2016 £ £ £ £ £ £

Wages and salaries 1,065,847 – 1,065,847 142,498 38,537 884,812 Social security costs 59,450 – 59,450 8,947 2,445 48,058 Other pension costs 206,531 – 206,531 24,964 7,151 174,416

1,331,828 – 1,331,828 176,409 48,133 1,107,286

Employees

2015 Total RSE Support Funded Funded Funded by RSE Payroll Project costs costs by Foundation by SCIO 2015 £ £ £ £ £ £

Wages and salaries 1,018,727 (29,706) 989,021 144,313 27,933 816,775 Social security costs 75,025 (1,646) 73,379 9,273 1,877 62,229 Other pension costs 200,946 (5,048) 195,898 22,379 4,787 168,732

1,294,698 (36,400) 1,258,298 175,965 34,597 1,047,736

The average number of employees of the RSE including those employed under joint contracts with the RSE Scotland Foundation and the RSE Scotland SCIO was 36 (201 5– 33). One member of staff earned over £80,000 per year and another earned over £60,000. Both are members of a defined benefit pension scheme. The total remuneration including pension contributions of four key management personnel (the Chief Executive, the Directors of Finance, Corporate Services and Communications & Business Development) was £277,998 (2015 £271,366).

37 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

12 (a) Tangible fixed assets 22 – 24 George Street 26 George Street Computer Total & equipment Leasehold Purchase Cost Purchase Cost Improvements GROUP £ £ £ £ £ Cost At 1 April 2015 1,103,038 1,647,468 2,136,070 319,291 5,205,867 Additions – – – 29,837 48,837 Disposals – – – (3,352) (3,352)

At 31 March 2016 1,103,038 1,647,468 2,136,070 345,776 5,232,352

Depreciation At 1 April 2015 352,974 527,188 705,040 263,277 1,848,479 Disposals – – – (3,352) (3,352) Charge for the year 22,061 32,949 44,467 27,924 127,401

At 31 March 2016 373,035 560,137 749,507 287,849 1,972,528

Net book value At 31 March 2016 728,003 1,087,331 1,386,563 57,926 3,259,824

At 31 March 2015 750,064 1,120,280 1,431,030 56,014 3,357,388

RSE £ £ £ £ £ Cost At 1 April 2015 1,103,038 1,647,468 – 90,862 2,865,288 Additions – – – 6,834 6,834

At 31 March 2016 1,103,038 1,647,468 – 97,696 2,848,202

Depreciation At 1 April 2015 352,974 527,188 – 82,593 962,755 Charge for the year 22,061 32,949 – 2,757

At 31 March 2016 373,035 560,137 – 85,350 1,020,522

Net book value At 31 March 2016 728,003 1,087,331 – 12,345 1,827,680

At 31 March 2015 750,064 1,120,280 – 8,269 1,878,613

1 2 ( b ) H e r i t a g e a s s e t s GROUP RSE £ £ Assets acquired Before 2009 7,795 7,795 2013 15,135 15,135 2014 990 990

At 1 April 2015 23,920 23,920 Additions 19,000 19,000 Disposals – –

At 31 March 2016 42,920 42,920

These assets are not depreciated. Additions in 2016 comprise a portrait of the President, Dame Jocelyn Bell Burnell, at cost.

38 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

13 Fixed asset investments Value at Investments Proceeds on sale Gain / (Loss) Revaluation Fair value at 1 April 2015 made at cost of investments 31 March 2016 £ £ £ £ £ £ RSE Managed Funds 2,475,956 51,442 (59,006) (655) (213,735) 2,254,002 Fixed interest 1,518,114 532,692 (699,636) (16,000) (15,300) 1,319,870 UK equities 5,722,715 890,018 (733,623) (11,094) (748,753) 5,119,263 Cash deposits 73,583 (1,422,710) 1,492,265 – – 143,138

9,790,368 51,442 – (27,749) (977,788) 8,836,273 BP Research Fellowship Trust Managed Funds 882,655 21,901 (52,639) (311) (70,374) 800,532 Fixed interest 522,952 359,212 (345,053) (9,646) (3,995) 523,570 UK equities 1,948,674 268,424 (270,588) (8,594) (261,196) 1,657,420 Cash deposits 21,317 (686,115) 668,280 – – 3,482

3,375,598 (36,478) – (18,551) (335,565) 2,985,004 RSESF Caledonian Research Fund Managed Funds 2,482,119 56,225 (157,082) (136) (208,733) 2,172,393 Fixed interest 1,481,848 690,364 (818,097) (27,158) (14,438) 1,312,519 UK equities 5,406,643 815,600 (647,040) (23,593) (721,017) 4,830,593 Cash deposits 68,410 (1,562,189) 1,622,219 – – 128,440

9,439,020 – – (50,887) (944,188) 8,443,945

GROUP 22,604,986 14,964 – (97,187) (2,257,541) 20,265,222 The loss on sale of investments measured against their historical cost was £122,705 (2015: gain £427,634) The historical cost of investments was £19,049,185 (2015: £19,156,927). (RSE £8,505,888, 2015: £8,542,900). Investments comprising more than 5% of the market value of the portfolio were: Aberdeen Asia Income Fund. All investments are held within the UK.

14(a) Current Assets – Loan by RSE to RSE Scotland Foundation 2016 2015 £ £

Due within one year 46,808 46,808 Due after one year 1,423,056 1,469,864

1,469,864 1,516,672

The loan bears interest at 4% per annum, capped at the amount of rent received by the Foundation and is repayable over the period to 30 June 2047, the expiration of the lease of 26 George Street. The interest rate on the loan, made to advance the charitable purposes of RSE, is below current market rate and thus the loan is regarded as concessionary and the amount stated does not take account of the time value of money.

14(b) Current Assets – Debtors 2016 2015 GROUP RSE GROUP RSE £ £ £ £

GROUP General debtors 253,041 190,856 199,296 129,192 Prepayments and accrued income 41,140 4,486 7,162 214 Income Tax Recoverable 16,608 16,608 35,409 35,409

310,788 211,950 241,867 164,815

39 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

15 Creditors: Amounts falling due within one year 2016 2015 GROUP RSE GROUP RSE £ £ £ £

General creditors 120,962 100,629 174,172 132,620 Research awards payable 333,789 333,789 625,995 625,995 Accruals 125,045 70,627 91,322 42,064 VAT payable 46,216 – 49,561 – Other taxes and social security 23,038 23,038 25,397 25,397 Deferred income 308,284 308,284 196,681 196,681 Event income deferred – – 24,759 24,759 Advance receipts – Publications 118,477 – 117,332 –

1,047,516 RSE Scotland Foundation Current Account – 1,184,915 – 1,254,640 RSE Scotland SCIO Current Account – 10,776 – 17,775

1,075,811 2,032,058 1,305,219 2,319,931

Deferred income and advance receipts analysis At 1 April 2015 Received in year Recognised in year At 31 March 2016 £ £ £ £

Friends of the Society 4,250 32,500 (28,500) 8,250 Computing Project 14,245 – (8,086) 6,159 RSE @ Project 13,845 5,000 (13,845) 5,000 Talk Science @ Invine Bay 7,500 – (7,500) – International Activities 37,163 30,000 (37,163) 30,000 BBSRC Enterprise Fellowships – 387,596 (251,338) 136,058 Subscription income 119,678 206,103 (202,964) 122,817

196,681 661,199 (549,396) 308,284

Journal receipts 117,332 197,181 (196,036) 118,477

Event income 24,759 – (24,759) –

16 Provision for liabilities and charges 2016 2015 £ £

Commitments for research fellowships At 1 April 2015 – GROUP & RSE – 51,590 RSE@Scottish Borders – (10,000) Grants paid in the year – (6,955) Repaid to Lloyds TSB Foundation for Scotland – (34,635) At 31 March 2016 – –

40 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

17 General Fund £

At 1 April 2015 – GROUP & RSE 543,564

Adjustments for FRS102 (note 23) (627,845)

Adjusted amount brought forward (84,281)

Net movement in funds for the year from statement of financial activities 220,299

At 31 March 2016 136,018

18 Designated Funds At 1 April 2015 Investment Other income Expenditure Gains /(Losses) Transfers At 31 March 2016 income GROUP & RSE £ £ £ £ £ £ £

Capital Asset Reserve 3,387,018 – – – – (101,818) 3,285,200 Development Fund 5,497,098 195,883 13,010 (66,874) (564,589) – 5,074,528 Building Fund 588,546 20,972 51,442 (353) (60,448) – 600,159 Staff Development Fund 297,052 10,585 – (178) (30,509) – 276,950 CH Kemball Fund 33,143 1,181 – (20) (3,404) – 30,900 Grants Fund 504,910 17,992 – (14,038) (51,858) – 457,006 Dr James Heggie Fund 285,076 10,159 – (16,614) (29,277) – 249,344

10,592,843 256,772 64,452 (98,077) (740,085) (101,818) 9,974,087

The transfers represent the release from the Capital Asset Reserve of a total of £101,818 to match the depreciation of buildings and the amount of capital repayment of the loan to the Foundation.

19 Restricted Funds At 1 April 2015 Investment Other income Expenditure Gains /(Losses) Transfers At 31 March 2016 income £ £ £ £ £ £ £

Robert Cormack Bequest 116,998 4,169 3,854 (10,110) (12,017) – 102,894 Lessells Trust 537,795 19,164 9,847 (26,249) (55,235) – 485,322 Auber Bequest 599,082 21,348 – (8,449) (61,530) – 550,451 Prizes Fund 84,659 3,017 – (1,304) (8,695) – 77,677 Dryerre Fund 598,787 21,337 – (28,947) (61,499) – 529,678 Fleck 136,404 4,861 – (1,924) (14,010) – 125,331 Piazzi Smyth 16,006 570 – (1,096) (1,644) – 13,836 Sillitto 40,242 1,434 – (1,244) (4,133) – 36,299 Others 36,511 1,300 – (515) (3,750) – 33,546 Edinburgh Drug Absorption Foundation 108,609 543 – – – – 109,152 James Clerk Maxwell Fund – – 32,891 – – – 32,891

Restricted Income Fund – – 3,442,383 (3,442,383) – –

RSE 2,275,093 77,743 3,488,975 (3,522,221) (222,513) – 2,097,077 RSE Scotland Foundation 10,554,164 344,173 590,772 (853,595) (995,072) (115,476) 9,524,966 RSE Scotland SCIO 12,626 – 15,020 (19,373) – – 8,273 BP Research Fellowship Trust 3,375,442 125,323 – (151,854) (354,116) – 2,994,795

GROUP 16,217,325 547,239 4,094,767 (4,547,043) (1,571,701) (115,476) 14,625,111

41 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

19 Restricted funds (continued) “Prizes Fund” comprises The Keith Fund, The Neill Fund, The Makdougall-Brisbane Fund, The Gunning-Victoria Fund, The James Scott Prize Fund, the Bruce-Preller Lecture Fund, The Dr DA Berry Fund, The Henry Duncan Prize Lecture Fund and The BP Prize Lecture in the Humanities Fund. “Others” comprise the Retailing Seminars Fund and The CASS Fund (see note 2 for further descriptions of the restricted funds.). The Restricted Income Fund represents restricted income received and expended in the year. Under the terms of the Lessells Trust the University of Glasgow is entitled to 10% of additional amounts received by the RSE from the Trust. The funds of the RSE Scotland Foundation are treated as restricted in respect of the consolidated accounts and comprise the CRF fund of £8,731,360 and the balance of the Foundation general fund of £793,606.

20 Analysis of assets between funds

General Designated Funds Restricted Funds 2016 2015 GROUP £ £ £ £ £

Fund balances at 31 March 2016 are represented by: Tangible fixed assets 55,266 1,815,334 1,432,144 3,302,744 3,381,308 Investments 192,350 6,688,889 13,383,983 20,265,222 22,604,986 Loan to RSE Scotland Foundation – 1,469,864 (1,469,864) – – Current assets 211,950 – 98,838 310,788 241,867 RSE Scotland Foundation current account (1,184,915) – 1,184,915 – – RSE Scotland SCIO current account (10,776) – 10,776 – – Deposits 1,420,546 – 919,673 2,340,219 2,495,795 Cash 69,334 – 82,720 151,054 127,150 Current liabilities (58,737) – (1,017,074) (1,075,811) (1,305,219) Pension fund liability (559,000) – – (559,000) (820,000)

136,018 9,974,087 14,625,111 24,735,216 26,725,887

General Designated Funds Restricted Funds 2016 2015 RSE £ £ £ £ £

Fund balances at 31 March 2016 are represented by: Tangible fixed assets 55,266 1,815,334 – 1,870,600 1,902,533 Investments 192,350 6,688,889 1,955,034 8,836,273 9,790,368 Loan to RSE Scotland Foundation – 1,469,864 – 1,469,864 1,516,672 Current assets 211,950 – – 211,950 164,815 RSE Scotland Foundation current account (1,184,915) – – (1,184,915) (1,254,640) RSE Scotland SCIO current account (10,776) – – (10,776) (17,775) Deposits 1,420,546 – 919,673 2,340,219 2,495,795 Cash 69,334 – – 69,334 53,403 Current liabilities (58,737) – (777,630) (836,367) (1,047,516) Pension fund liability (559,000) – – (559,000) (820,000)

136,018 9,974,087 2,097,077 12,207,182 12,783,655

42 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

21 Pension costs

(a) Universities Superannuation Scheme The RSE participates in the Universities Superannuation Scheme (USS), which is a funded defined benefit arrangement. Under UK pensions legislation, the RSE is responsible for funding the Scheme's benefits and for paying contributions to make up any shortfall between the assets and the liabilities of the Schemes. The Scheme's liabilities are assessed at least every three years by the Scheme's actuary. It is the RSE's funding policy to annually contribute an amount agreed between the Organisation and the Trustees of the Scheme in accordance with UK legislative requirements if a funding deficit exists. Because of the mutual nature of the scheme, the scheme's assets are not hypothecated to individual institutions and a scheme-wide contribution rate is set. The RSE is therefore exposed to actuarial risks associated with other institutions' employees. The amount of contributions required depends on the assumptions used by the actuary. The volatility of the Scheme's liabilities against the assets held impacts on the RSE’s balance sheet.

The last formal actuarial valuation of USS was as at 31 March 2014. At the valuation date the market value of the scheme’s assets was £41.6billion and the value of the scheme’s technical provisions was £46.9 billion. The value of the assets represented 89% of the benefits that had accrued to members, after allowing for expected future increases in earnings. The 2014 valuation incorporates the effect of the benefit changes due with effect from 1 April 2016. For the period up to 1 April 2016, the Employers’ deficit contributions amount to 16% p.a. of salaries less the employer future service cost of accrual and the expenses of administering the Scheme including PPF levies. On the assumptions made, this gives rise to a deficit contribution of 0.7% p.a. of salaries over this period.

For the period from 1 April 2016 to 31 March 2031 the Employers’ deficit contributions will amount to 18% p.a. of salaries less the employer’s share of the cost of accrual in the defined benefit section together with the employer contribution to the defined contribution section and the expenses of administering the Scheme including PPF levies. On the assumptions made and once the salary threshold and DC section are introduced this gives rise to deficit contributions of at least 2.1% p.a. of salaries over the period to 31 March 2031. From 1 April 2016 until the salary threshold and DC section are introduced (to be implemented as soon as practicable and in any case no later than 6 months after 1 April 2016) the deficit contributions amount to 2.5% p.a. of salaries.

At 31 March 2016, USS had over 145,000 active members and the RSE had two active members and eight deferred or pensioner members participating in the scheme. The contribution rate payable by the RSE in the year was 16.0% of pensionable salaries amounting to £19,182.

For employers participating in non-segregated multi-employer schemes such as USS, FRS102 has changed how defined benefit pension liabilities must be disclosed. Under FRS 17, employers were permitted to account for these schemes on a defined contribution basis, by recording the contributions paid to the scheme and making no allowance for any deficit that may exist. Under FRS 102 this is no longer an option. Where it is not possible to identify a liability share, employers are required to record the net present value of any deficit contributions payable in the balance sheet, an allowance must also be made in the P&L for interest accruing on the deficit over the year. Where it is possible to identify a liability share, a full FRS 102 disclosure must be produced. Based on information provided by USS and the following assumptions, an RSE specific valuation on an FRS102 basis has been prepared that more fully reflects the risk to RSE of its status as a small employer in the scheme. All monetary figures are shown in £000s sterling. No assets included in the fair value of plan assets are the entity's own financial instruments or are properties occupied or used by the entity.

31 March 2016 31 March 2015

Discount rate 3.36% 3.1% Salary increases 2.0% 2.0% Inflation RPI 3.16% 3.14% Inflation CPI 3.14% 2.64%

Male mortality assumptions at 31 March 2015 and 2016 were: 98% S1NMA_L; CMI 2014 F1.5%; Birth Year 99% S1NFA_L with a -1 adjustment; CMI 2014 Female mortality assumptions at 31 March 2015 and 2016 were: F1.5%; Birth Year99 F1.5%; Birth Year99

2016 2015 The major categories of USS Scheme assets as a percentage of total plan

Equities 44% 44% Property 28% 28% Bonds 7% 7% Alternatives 19% 19% Other 2% 2%

100% 100% 43 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

21 Pension costs (continued)

(a) Universities Superannuation Scheme continued The RSE pension fund liability arising from the USS scheme at 31 March and the movements of its component parts comprise:

USS Pension fund asse t/(liability) 2016 2015

Assets Obligations Net (liability)/ Assets Obligations Net (liability)/ asset asset £’000 £’000 £’000 £’000 £’000 £’000 Fair value of plan assets 1,616 – 1,616 1,369 – 1,369 Present value of liabilities – 2,222 (2,222) – 1,923 (1,923)

Opening Position as at 31 March 1,616 2,222 (606) 1,369 1,923 (554)

Service cost Current service cost* – 18 (18) – 18 (18) Past service cost (including curtailments) – – – – – – Effect of settlements – – – – – –

Total Service Cost – 18 (18) – 18 (18)

Net interest Interest income on plan assets 50 – 50 58 – 58 Interest cost on defined benefit obligation – 69 (69) – 82 (82) Impact of asset ceiling on net interest – – – – – –

Total net interest 50 69 (19) 58 82 (24)

Total defined benefit cost recognised in Profit or (Loss) 50 87 (37) 58 100 (42)

Cashflows Plan participant's contributions 9 9 – 9 9 – Employer contributions 19 – 19 18 – 18 Contributions in respect of unfunded benefits – – – – – – Benefits paid (41) (41) – (41) (41) – Unfunded benefits paid – – – – – –

Expected closing position (13) (32) 19 (14) (32) 18

Remeasurements Changes in demographic assumptions – – – – – – Changes in financial assumptions – (104) 104 231 (231) Other experience – – – – – – Return on assets excluding amounts included in net interest (39) – (39) 203 – 203

Total remeasurements recognised in SOFA (39) (104) 65 203 231 (28)

Fair value of plan assets 1,614 – 1,614 1,616 – 1,616 Present value of funded liabilities – 2,173 (2,173) – 2,222 (2,222) Present value of unfunded liabilities – – – – – –

Closing position as at 31 March 1,614 2,173 (559) 1,616 2,222 (606)

44 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements 21 Pension costs (continued) (b) Lothian Pension Fund The RSE also participates in the Lothian Pension Fund, a defined benefit pension scheme established under Local Government Pension Fund Regulations. This scheme has determined that it is possible to ascertain the shares of assets and liabilities relating to individual admitted bodies. The assets of the scheme are held in a separate trustee-administered fund. The fund is valued every three years by a professionally qualified independent actuary using the projected unit method, the rates of contribution payable being determined by the trustee on the advice of the actuaries. In the intervening years the actuaries review the progress of the scheme. At the latest valuation date the market value of the scheme’s assets was £4,379 million and the value of past service liabilities was £4,796 million. The value of the assets represented 91.3% of the benefits that had accrued to members, after allowing for expected future increases in earnings. The contribution rate payable by the RSE was: 18.6% plus a fixed amount of £7,500 per annum. The actuary has confirmed that it is appropriate to take the pension charge to be equal to the actual contribution paid during the year, amounting to £182,682.

Lothian Pension fund asse t/(liability) 2016 2015 restated

Assets Obligations Net (liability)/ Assets Obligations Net (liability)/ asset asset £’000 £’000 £’000 £’000 £’000 £’000 Fair value of plan assets 4,246 4,246 3,354 3,354 Present value of liabilities 4,460 (4,460) 3,333 (3,333)

Opening Position as at 31 March 4,246 4,460 (214) 3,354 3,333 21

Service cost Current service cost* – 275 (275) – 224 (224) Past service cost (including curtailments) – – – – – – Effect of settlements – – – – – –

Total Service Cost – 275 (275) – 224 (224)

Net interest Interest income on plan assets 143 - 143 148 - 148 Interest cost on defined benefit obligation – 152 (152) – 148 (148) Impact of asset ceiling on net interest – – – – – –

Total net interest 143 152 (9) – 148 –

Total defined benefit cost recognised in Profit or (Loss) 143 427 (284) 148 372 (224)

Cashflows Plan participant's contributions 59 59 – 55 55 – Employer contributions 179 – 179 184 – 184 Contributions in respect of unfunded benefits – – – – – – Benefits paid (36) (36) – (37) (37) – Unfunded benefits paid – – – – – –

Expected closing position 4,591 4,910 (319) 3,704 3,723 (19)

Remeasurements Changes in demographic assumptions – – – – 167 (167) Changes in financial assumptions – (633) 633 532 (532) Other experience – (28) 28 – 38 (38) Return on assets excluding amounts included in net interest 71 – 71 542 – 542

Total remeasurements recognised in SOFA (see note below) 71 (661) 732 542 737 (195)

Fair value of plan assets 4,662 – 4,662 4,246 – 4,246 Present value of funded liabilities – 4,249 (4,249) – 4,460 (4,460) Present value of unfunded liabilities – – – – – –

Closing position as at 31 March 4,662 4,249 413 4,246 4,460 (214)

45 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements 21 Pension costs (continued) (b) Lothian Pension Fund continued As at 31 March 2016 the balance sheet shows the fair value of the employer assets in the Lothian Pension Fund to be greater than the present value of the funded liabilities. Under FRS102, there is a limit on the amount of this surplus which can be recognised in the balance sheet. RSE policy is that pension fund assets arising from valuations under FRS 102 are recognised only to the extent that the asset is recoverable in the foreseeable future, thus the re-measurement amount recognised in the SOFA has been restricted to the amount necessary to extinguish the liability brought forward. No pension asset has thus been recognised.

Principal actuarial assumptions (expressed as weighted averages) at the year end were as follows:

2016 2015

Inflation/pension increase rate 2.2% 2.5% Salary increase rate 4.2% 4.4% Discount rate 3.6% 3.3%

The assumptions relating to longevity underlying the pension liabilities at the balance sheet date as based on the Fund’s Vita Curves including an allowance for future improvements in longevity in line with the CMI2012 assuming current rates of improvement have peaked and will converge to a long term rate of 1.25%p.a.

The major categories of LPF scheme assets as a percentage of total plan assets:

2016 2015

Equities 67% 69% Bonds 20% 17% Property 9% 8% Cash 4% 6%

100% 100%

(c) Summary of FRS102 pension movements recognised in the restated Statement of Financial Activities

Statement of Financial Activities 2016 2015 restated

Year ending 31 March USS LPF Total USS LPF Total £’000 £’000 £’000 £’000 £’000 £’000 Support costs – service costs 1 (96) (95) – (40) (40) Support costs – net interest (19) (9) (28) (24) – (24)

(18) (105) (123) (24) (40) (64)

Actuarial gains/losses as above 65 732 797 (28) (195) (223) Less asset unrecognized – (413) (413) – 21 21

Movement per SOFA 65 319 384 (28) (174) (202)

Balance sheet 2016 2015 restated

USS LPF Total USS LPF Total £’000 £’000 £’000 £’000 £’000 £’000 Brought forward at 1 April (606) (214) (820) (554) – (554) Carried forward at 31 March (559) – (559) (606) (214) (820)

The total pension charge for the year, before the FRS102 pension movements was £201,864 (2014: £200,946).

46 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

22 Events after the balance sheet date

During 2015, the Trustees of the BP Research Fellowships Trust resolved that the purposes of the Trust would be better served if the Trust were to wind itself up and transfer the assets to the RSE. An amendment to the Trust Deed to permit the winding up was made, with consent from BP, on 31 March 2016. The Trustees then applied to OSCR for approval of the proposal, which was granted on 10 May 2016. The transfer of assets was made on 31 May 2016.

23 Adjustments required on transition to FRS102

The introduction of FRS102 and SORP 2015 has required the adjustment of figures as follows:

Pension schemes a) Lothian Pension Fund- FRS102 differs from FRS17 in that it requires the recognition of net interest as an operating cost in the statement of financial activities. The net interest is determined by multiplying the net defined benefit liability by the discount rate used to calculate the defined benefit obligation. Previously FRS17 recognised the expected return on assets and the unwinding of the discount on scheme liabilities. In the year to March 2015, this change resulted in an expense of £40,000 being included in the restated staff costs, rather than the credit of £23,000 taken under FRS17. A corresponding adjustment has been made to the actuarial movement for the year.

b) USS pension scheme-For employers participating in non- segregated multi- employer schemes, and where it is not possible to identify a liability share, FRS17 permitted accounting as if it were a defined contribution scheme. Under FRS102 this is no longer an option. In view of the current RSE pension policy in relation to the risk of exit from this scheme, information has been obtained from USS to facilitate a full FRS102 disclosure for the scheme, which was previously accounted for as it were a defined contribution scheme. This change of policy has required restatement of figures to include the net liability at transition on 1 April 2014 of £554,000 and adjustments to reflect the movement during the year ended March 2015 to a net liability of £606,000.

Employee benefits The requirement to recognise liabilities arising from employee benefits resulted in a liability being recognised in the RSE at the date of transition, 1 April 2014 in relation to employee entitlement to paid annual leave. The initial liability recognised (of £25,315) at 1 April 2014, was for the holiday entitlement carried forward and for the entitlement arising in the year which was due but not taken. By the end of the 201 4–15 financial year, the liability for the outstanding holiday entitlement decreased by £3,470 resulting in total liability of £21,845 as at 31 March 2015. The amount increased again by £3,688 in the year to 31 March 2016, resulting in the total included as an accrual of £25,533.

Governance Additionally, in applying the accounting policies required by FRS 102 there has been a change in the analysis of governance costs. Previously, these had been separately analysed on the face of the statement of financial activities. Governance costs are now classified as a support cost and have therefore been allocated between fundraising activities and charitable activities on the basis of estimated time spent by the appropriate support service. There is no effect on the total expenditure for either the financial year to 31 March 2015 or the financial year to 31 March 2016

In accordance with the requirements of FRS 102 a reconciliation of opening balances (to those previously reported) is set out below:

Reconciliation of Group funds 1st April 2014 31 March 2015

Fund balances as previously reported 27,415,212 27,353,732 USS pension adjustment (554,000) (606,000) Short-term compensated absences (holiday pay) (25,315) (21,845)

Adjusted Fund balances 26,835,897 26,725,887

Reconciliation of RSE funds 1st April 2014 31 March 2015

Fund balances as previously reported 13,491.534 13,411,500 USS pension adjustment (554,000) (606,000) Short-term compensated absences (holiday pay) (25,315) (21,845)

Adjusted Fund balances 12,912,219 12,783,655

47 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

23 Adjustments required on transition to FRS102 (continued)

GROUP RSE £ £ Net income as reported 2015 84,394 96,695 Less adjustments for Lothian Pension fund costs (63,000) (63,000) USS pension cost (24,000) (24,000) Reduction in holiday pay provision 3,470 3,470 Net income as adjusted 864 13,165

24 Transactions with related parties

(a) Council members No member of Council received any payments other than reimbursements of expenditure on travel and subsistence costs actually and necessarily incurred in carrying out their duties as Councillors and Officers. The aggregate of such reimbursements, including payments on behalf of six (2015 – twelve) Council members, amounted to £15,042 (2015: £26,483).

(b) Other related parties The RSE Director of Finance is also a part-time employee of the Carnegie Trust for the Universities of Scotland, which administers postgraduate scholarships on behalf of the Foundation. In 2015 –16 the Foundation made payments in support of the studentship scheme amounting to £91,085 (2015: £119,555).

25 Connected charities

(a) RSE Scotland Foundation The RSE Scotland Foundation is a charitable trust, recognised in Scotland as Scottish charity number SC024636. It was created in March 1996 with the object of advancing the education of the public in Scotland in science and engineering and in so doing to conserve the scientific and cultural heritage of Scotland. The President, General Secretary, Treasurer, Curator and a Vice-President of the RSE are ex officiis Trustees of the Foundation, which draws on the resources of the RSE in carrying out its objects. The Foundation also has five nominated Trustees appointed by the RSE Council. The Foundation became publisher of the RSE’s journals under a Publications Rights License effective from 1 January 1997.

On 1 July 1997, the RSE granted to the Foundation a 50-year lease over 26 George Street carrying an obligation to refurbish the building within a three-year period. The Council of the RSE agreed to make a loan of up to £2.3 million available to the Foundation in support of the refurbishment. The agreed terms of the loan are as described in note 14(a).

The Foundation plays a leading role in the RSE’s public outreach activities and manages the premises in Edinburgh. It also manages the programme of research activities funded by the Caledonian Research Fund.

(b) BP Research Fellowships Trust The BP Research Fellowships Trust is a charitable trust recognised in Scotland as Scottish Charity Number SC008420. It funds a scheme of post doctoral research fellowships administered by the RSE. Its Trustees are the President, General Secretary and Treasurer ex officiis .

48 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

25 Connected charities (continued)

(c) RSE Scotland SCIO

RSE Scotland SCIO – incorporated in June 2012 as Scottish Charity Number SC043194, with charitable purposes of the advancement of education; the arts, heritage, culture or science; and of citizenship or community development. The SCIO co-ordinates the development of the RSE Young Academy of Scotland.

The summary results for the year and net assets in each of the connected charities were: Income Expenditure Surplus/Deficit Net Assets £ £ £ £ RSE Scotland Foundation 1,123,847 (1,157,973) (34,126) 9,524,967 RSE Scotland SCIO 76,511 (80,864)) (4,353) 8,273 BP Trust 125,323 (151,854) (26,531) 2,994,793

Intragroup transactions recognised in the RSE comprise: Income Expenditure Debtor/(Creditor) Loan account balance £ £ £ £ RSE Scotland Foundation 472,589 (156,012) (1,184,915) 1,469,864 RSE Scotland SCIO – (61,491) (10,776) – BP Research Fellowship Trust 148,343 – – –

All purchases for the group are settled by RSE on behalf of the connected charities. Cash is transferred between the charities to fund purchases.

26 Financial commitments – operating leases

The financial commitment at 31 March 2016 in respect of operating leases for printing and copying equipment was £9,419, (£7,895 on leases expiring in less than one year and £1,524 within two to five years) ( 2015: £18,227; less than one year £8,808; within two to five years £9,419 ).

27 Contingent liabilities

Current RSE pension policy, as determined by the Council, is to make an exit from both of the defined benefit pension schemes, USS and Lothian Pension Fund, as soon as practicable. If this policy is implemented an exit liability may crystallise when the last active member leaves the scheme. As RSE has only two active members in the USS scheme, it is possible that this will be triggered in the foreseeable future. The most recent estimate available from USS in January 2016 indicated that at a USS buyout funding level of 50%, the liability was £1.9m.

49 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

28 Supplementary information: grants, donations and receipts

(a) Scottish Government Grants Income 2016 2015 £ £

Science Research Fellowships 1,166,174 1,308,445 Arts and Humanities Award 311,274 299,433 Engagement and Expertise 480,994 366,042 International Grants and Relationships 363,108 336,080

Grant–in-aid 2,321,550 2,310,000

SFC Grant for Liaison with China (amount expended) 37,163 42,837

2,358,713 2,352,837

The funding for 2015 –16 was grant-in-aid under S23 Natural Heritage (Scotland) Act 1985 in support of two programmes of activity: Inspiration, comprising: Research Fellowships, Arts & Humanities Awards; International grants & relations and Engagement and Expertise, administered through the Scottish Funding Council. A further grant of £30,000 was made by SFC in support of developing relationships in China. This was expended in 201 5–16, together with the balance of an earlier grant for work with China.

At 31 March 2016 the financial commitment in respect of Personal and Support Fellowships awarded subject to Scottish Government funding in the years, 2016 –17, 2017–18, 2018 –19, 2019 –20 and 202 0–21 amounted to £1,173,500, £1,158,300, £884,900, £459,100 and £121,200 respectively. These amounts are treated as obligation of future years to be financed by specific funding expected to be made available from the Scottish Government.

The amount paid to Universities in respect of the Research Fellowships represented approximately 50% of the full economic cost of employing the Research Fellows. The support of the Universities in funding the balance of the cost is essential to the success of the scheme.

50 ROYAL SOCIETY OF EDINBURGH Trustees’ Report & Accounts 2015 –2016

notes to the financial statements

28 Supplementary information: grants, donations and receipts (continued)

(b) Other donations in support of activities The RSE gratefully acknowledges all those who make donations in support of activities. The companies, trusts and other bodies which made donations of £1,000 or more in support of activities in the year ended 31 March 2016 were as follows:

Academy of Social Sciences James Hutton Institute Association of Commonwealth Universities James Weir Foundation British Computer Society M Squared Lasers Cambridge University Royal Academy of Engineering Centre on Constitutional Change Royal Institute of Philosophy Cirrus Logic Inc Royal Society of Chemistry Darwin Trust of Edinburgh Scottish Cancer Foundation Edinburgh Mathematical Society Scottish Natural Heritage French Embassy Society of Biology Google UK Ltd University of Edinburgh Holywood Trust University of Glasgow Institute of Physics Wellcome Trust Irvine Bay Regeneration Company Wolfson Microelectronics plc James Clerk Maxwell Foundation

(c) Council members The Friends of the Society – corporate partners of the RSE, during the year ended 31 March 2016 were as follows:

Aberdeen Asset Management Optos Plc Arup Group Shell UK Limited Baillie Gifford Scottish Council for Development and Industry BP Plc Shepherd & Wedderburn BT PLC Tesco Bank Chiene & Tait Toshiba Medical 4 G Scotland Herald & Times Group

29 Analysis of net fund s At 31 March 2016 Cash flows At 1 April 2015 £ £ £

Cash at bank 151,054 23,904 127,150 Deposits – general 1,420,546 (33,636) 1,454,182 Deposits – restricted funds 919,673 (121,940) 1,041,613

2,491,273 (131,672) 2,622,945

51 Legal and Administrative Information:

Auditors RSM UK Audit LLP First Floor, Quay 2 139 Fountainbridge Edinburgh EH3 9QG

Bankers Bank of Scotland plc 38 St Andrew Square Edinburgh EH2 2AD

Stockbrokers /Investment Advisers Speirs & Jeffrey & Co Ltd George House 50 George Square Glasgow G2 1EH

Solicitors Shepherd & Wedderburn WS 1 Exchange Crescent Conference Square Edinburgh EH3 8UL

Further information about the activities of the Royal Society of Edinburgh and additional copies of this Trustees' Report may be obtained from:

Dr W Duncan Chief Executive The Royal Society of Edinburgh 22 – 26 George Street Edinburgh EH2 2PQ

52 © The Royal Society of Edinburgh 2016 This publication is available online at www.rse.org.uk

The Royal Society of Edinburgh is registered in Scotland as Scottish Charity No. SC000470 The RSE Scotland Foundation is a connected charity, registered in Scotland as Scottish Charity No. SC024636 The RSE Scotland SCIO is a connected charity, registered in Scotland as Scottish Charity No. SC043194 Inland Revenue Claim Board Reference CR 18102

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