Science is Global Trustees’ report and financial statements for the year ended 31 March 2019 The Royal Society’s fundamental purpose, reflected in its founding Charters of the 1660s, is to recognise, promote, and support excellence in science and to encourage the development and use of science for the benefit of humanity.

The Society is a self-governing Fellowship of distinguished scientists drawn from all areas of science, technology, engineering, mathematics and medicine.

The Society has played a part in some of the most fundamental, significant, and life-changing discoveries in scientific history and Royal Society scientists – our Fellows and those people we fund – continue to make outstanding contributions to science and help to shape the world we live in.

Discover more online at: royalsociety.org BELGIUM AUSTRIA 3 1 NETHERLANDS GERMANY 5 12 CZECH REPUBLIC SWITZERLAND 3 2 CANADA POLAND 8 1

Charity Case study: Africa As a registered charity, the Royal Society Professor Cheikh Bécaye Gaye FRANCE undertakes a range of activities that from Cheikh Anta Diop University 25 provide public benefit either directly or in Senegal, Professor Daniel Olago from the University of indirectly. These include providing financial SPAIN UNITED STATES Nairobi in Kenya, Dr Michael OF AMERICA 18 support for scientists at various stages Owor from Makerere University of their careers, funding programmes 33 in Uganda and Professor Richard that advance understanding of our world, Taylor from University College organising scientific conferences to foster London are working on ways to discussion and collaboration, and publishing sustain low-cost, urban water supply and sanitation systems scientific journals. MEXICO CUBA in Africa. They are funded by 26 1 the Royal Society-DFID Africa Capacity Building Initiative. Fellowship As a fellowship of outstanding scientists Case study: Cuba GHANA embracing the entire scientific landscape, Dr Tania Farías Piñeira from the 8 the Society recognises excellence and University of Havana in Cuba elects Fellows and Foreign Members is working with Dr Francisco Garcia-Garcia from the ECUADOR from all over the world. University of Edinburgh on 1 improvements to the industrial process of conversion of BRAZIL National Academy methane to methanol, in order 32 As a national academy, the Society represents to create more sustainable and the UK and collaborates with international affordable sources of energy. This work is funded through partners to advocate for science and its the Society’s International benefits. It provides authoritative and CHILE Exchanges Scheme. 3 independent advice on matters of URUGUAY science that support the public good, 1 including policies that promote excellent science and scientific issues that inform public policy. ARGENTINA 12

Our heritage 1660 1673 1736 The Royal Society is Dutch microscope-maker and natural The Copley Medal is established from an founded, following a historian Antonie van Leeuwenhoek endowment of £100 received from the estate of lecture by Christopher FRS (1632 – 1723) sends the first Sir Godfrey Copley in 1709. It is the world’s oldest Wren at Gresham College. letter of observations to the Society, scientific honour, a prestigious forerunner of the commencing a ground-breaking Nobel Prize. 50 years of original research from the Netherlands.

Philosophical Transactions The first Foreign Secretary President of the Society, Joseph Banks, of the Royal Society is of the Society is appointed, begins ‘conversaziones’ as an opportunity published. This journal 59 years before the UK for Fellows to demonstrate their cutting- established the concepts Government appoints its edge research to the rest of the Fellowship. of scientific priority and first Foreign Secretary. These have since developed into the peer review. annual public Summer Science Exhibition. 1665 1723 1778 UNITED Case study: United Kingdom KINGDOM Understanding how bones AUSTRIA 2,016 1 respond to stress during growth and development is the area GERMANY 12 of research of Professor Kate SWEDEN Robson Brown from the SWITZERLAND University of Bristol. She is an 3 FINLAND 2 Apex award holder. 3 RUSSIA IRELAND 12 35 DENMARK 3 UKRAINE 1

FRANCE ROMANIA 25 12 UZBEKISTAN TURKEY 1 SOUTH KOREA ITALY 12 SPAIN 18 2 18 CYPRUS JAPAN MOROCCO 1 CHINA 19 ISRAEL 1 204 EGYPT 10 2 BANGLADESH HONG KONG TAIWAN UNITED ARAB SENEGAL 1 8 9 Case study: India 3 EMIRATES Professor Bimal Roy of the 1 MYANMAR THE GAMBIA (FORMERLY VIETNAM Indian Statistical Institute, 1 INDIA BURMA) 4 PHILIPPINES Kolkata and Professor Feng Hao 78 1 THAILAND 2 of the University of Warwick NIGERIA 11 were awarded an International GHANA 4 CAMEROON Collaboration Award to combine 8 2 UGANDA their cryptography and statistical 5 MALAYSIA INDONESIA expertise to develop a new KENYA 12 4 generation of e-voting systems in DRC 7 India that are secure, dependable 1 TANZANIA and easy to use. They also aim to 2 make the new e-voting system ZAMBIA MALAWI accessible to voters with low or 1 2 no literacy, and to disabled and MADAGASCAR older voters. ZIMBABWE 7 BOTSWANA 1 MAURITIUS 1 7 AUSTRALIA 13

SOUTH AFRICA 24

NEW ZEALAND 2

Map showing the number of researchers holding a Royal Society grant award in 2018/19

1787 1851 1946 Astronomer, Caroline Herschel, The British Government awards the Society The Society hosts the first of its is the first female scientist to its first annual government grant of £1,000 conferences for Commonwealth have a paper published in to be distributed for ‘private individual scientists, opened by the then Princess Philosophical Transactions. scientific research’. Elizabeth. Among the discussions are contributions on ‘methods of improving interchange of scientists’.

The British Government approves the first of what will The Society’s Tropical Diseases Committee The Society establishes a research become a global network of observatories, attempting begins to research malaria and other ailments, base at Halley Bay, Antarctica. Here in to measure the Earth’s magnetic field. Led by Edward particularly in Africa. As a result, Sir David 1985, dramatic losses in the ozone layer Sabine FRS (1788 – 1883), later President of the Bruce FRS (1855 – 1931) elucidates the role are observed and the base remains an Society, the scheme enables Sabine to link variations of the tsetse fly in sleeping sickness. important location for climate research. in the Earth’s magnetism with solar cycles. 1839 1904 1956 SCIENCE IS GLOBAL 1 At a glance Contents

Strategic report

At a glance 1 STRATEGIC REPORT President’s foreword 2 £114.7m 1,477 Executive Director’s report 4 total expenditure, 13% increase Fellows Public benefit statement 6 from 2017/18 Our strategy at a glance 8 Where our income comes from 10 and how we spend it Strategy in action: promoting 12 excellence in science 1,176 170 Strategy in action: career tracker 16 researchers currently supported Foreign Members Strategy in action: supporting 18 through research fellowships international scientific collaboration Strategy in action: science and 22

the European Union GOVERNANCE Strategy in action: demonstrating 24 883 212 the importance of science to grants awarded employees everyone Strategy in action: science in 28 Africa Governance £84.7m 1,664 People 30 Financial review 34 grants awarded, 16% increase downloads of Greenhouse Principal risks and uncertainties 40 from 2017/18 gas removal report Governance 42 Statement of Trustees’ 44 responsibilities Independent auditor’s report 45 65 4.5m Financial statements FINANCIAL STATEMENTS Consolidated statement 48 countries where the Society people reached by of financial activities supported researchers #SummerScience Consolidated and Charity 49 in 2018/19 on social media balance sheets Consolidated statement 50 of cash flows Accounting policies 51 40m 38 Notes to the financial statements 54 downloads of papers from scientific meetings Other information our journals Reference and administrative 78 details

Content TBC OTHER INFORMATION 1964 2011 2018/19 The Society increases funding for researchers by 16% to £84.7 million. Royal Society Wolfson The Society publishes The Society publishes a review of the success of 35 years of its Research Professor, Open Biology, its first University Research Fellowships supporting early career researchers. Dorothy Hodgkin, fully ‘open access’ The Society co-hosts, along with the US National Academy of becomes the UK’s only journal. © Godfrey Sciences and the Academy of Sciences of Hong Kong, a second female Nobel Prize Argent Studio international summit on human genome editing. winning scientist.

Royal Society University Research Fellow, The Society will increase its funding for researchers to over £100 million. Kostya Novoselov, shares the Nobel Prize in Looking Physics with Andre Geim for their work on forward The Society will announce the first recipients of its FLAIR Fellowships graphene. This new form of carbon is only one supporting early career researchers in sub-Saharan Africa. atom thick but could lead to the manufacture of The Society will jointly convene an international commission to develop innovative electronics. principles, criteria, and standards for the possible clinical use of human 2010 germline genome editing. 2 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

President’s foreword

2018 marked 35 years of the Society’s University Research Fellowship scheme and 23 years of our Dorothy Hodgkin Fellowships.

The UK needs a Brexit deal that: • Keeps highly-skilled scientists working in the UK and ensures that international talented people still choose to come here and contribute to our globally competitive science. • Keeps access to money and networks that support the UK to work with scientists around the world. • Maintains regulatory alignment that allows access to new medicines and technologies.

Science helps shape almost every has helped the UK become a part of large-scale projects such as aspect of our lives. It has contributed genuine world leader in research and clinical trials of new medicines made to improving our health, wealth and innovation – despite having less than possible by shared regulations. happiness and offers the prospect of 1% of the world’s population and less However, as with many other sectors more ways to tackle global problems than 3% of global research spending, impacted by Brexit, it has been difficult such as disease, food security and researchers in the UK produce over to get the politicians or the media to climate change. The Fellows of the 15% of the most highly cited research. focus on science in the face of more Royal Society and the researchers Over half of UK scientific research contentious issues. The Society has who we fund are at the forefront of involves international collaboration. continued to do everything we can this effort. Anything that threatens international to secure the best possible deal for research collaboration is bad for science including leading a group Interactions between people have science and bad for the country. of 29 Nobel Prize winners and six become increasingly global in recent It is why the vast majority of the Fields medallists from across Europe decades and this is even more the science community wanted to in writing to the Prime Minister and case for scientific exchange. The UK remain in the European Union (EU). President Juncker. has been successful in attracting the UK research benefits from the finest researchers from all over the Read more about the Society’s international flow of people and ideas, world to come and work here. The commitment to minimise any from being part of world-leading EU international nature of UK science negative impact on UK science research programmes and from being as a result of leaving the EU on page 22. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 3

SCIENCE ISGLOBAL Venki Ramakrishnan Venki President of the Royal Society Society use clinical that any believes heritableof editing genome be would irresponsible at this time and that is why establishing are we a commission with the National Sciences US of Academies other of number Medicineand a and scientific the around academies from establishworld to international an governance framework that has broad international, support. societal Some of the challenges have we faced this year will remain priorities in 2019/20, many will be priorities for many years come. to Science will be vitala part tackling global of many the and challenges individuals that the Society continues fund to will, I believe, a major make contribution. a broader, more balanced and balanced more broader, a education.interconnected must That 18 maths and to science include subjectsalongside English, as such geography history, modern languages, theand arts. are technologies New the of the and jobs nature changing economy and if want we prepare to young people the for jobs of the A-level thefuture, current system, that young forces people narrow to down their options at 16, is not fitfor purpose. In February the Society independent an call for a launched review of post-16 education take to the in nextplace parliament with a view delivering to reform within 10 building the necessary are years. We reality. that a make to alliances Human genome editing has both implications social technological and that society must attempt discuss an in forward way sensible a that reach to benefits potential balances and risks. In November co-hosted, we along with the National Sciences US of Academy and Academy of Sciences of Hong summit international on second a Kong, the editing. was genome This human focus of global attention with a claim by scientist Chinese a about the birth of the first genetically edited babies. The Read more about the difference difference about the more Read the Society’s support has made thoseto supported these by 16. page on schemes

The year 2018 marked 35 years of the Society’s University Research Fellowship (URF) and scheme years23 of our Dorothy Hodgkin Fellowships. these schemes, Through supportwe outstanding early career are researchers These researchers. pushing the scientific boundaries of knowledge applying and the resulting understanding lives. improving to the mark anniversaries, we To find out to research commissioned what the people have we supported have achieved. Around of our 70% URFs have gone on become to professors and include a Nobel Prize Fieldswinner a medallist. and There highly successful entrepreneurs,are shaped whose has work researchers domestic policy international and science in figures leading making and communication. Science helps shape almost every contributed It has lives. our aspect of and wealth health, our improving to happiness and offers the prospect global tackle to ways more of food as such disease, problems security and change.” climate In order ensure to that the UK scientists great produce continues to scientifically a and population literate grapplethat can with understanding the potential and pitfalls of new peopletechnologies, young need 4 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Executive Director’s report 16% The Society has increased expenditure on grants from £73.3 million to £84.7 million.

During the year, the Society helped establish a network of scientific advisers in Commonwealth countries.

This has been another year of of Sciences and supported by the and social good with the American growth at the Royal Society. We have Government’s Global Challenges Academy of Arts and Sciences at increased our expenditure by 13% to Research Fund. The scheme will Stanford University; the publication of over £114 million. Much of that growth support early career researchers a report from a Royal Society-National has been in our grants programmes in sub-Saharan Africa who have Academies meeting on dealing which are supporting outstanding the potential to become leaders in with carbon dioxide at scale; and a researchers. The Government’s their field, undertaking cutting-edge subsequent 2018 forum on climate Investment in Research Talent Fund scientific research that will address change and ecosystems. With China, has allowed us to increase the number global challenges facing developing the Society hosted the UK-China joint of early career and established countries. We also helped establish commission in November, convening researchers that we support. a network of scientific advisers in representatives from the UK and Researchers that are working on a Commonwealth countries. Chinese governments to discuss a wide range of areas from delivering bilateral plan of activity for the future, Read more about the Society’s low-cost, urban water supplies and and held a second policy dialogue grant schemes to support sanitation in Africa to understanding with the Chinese Academy of Sciences science in Africa on page 28. the moons in our solar system. focusing on low-carbon energy. On the international stage, aside Read more about the Society’s We have also continued our work on from our work on Brexit, we have income and expenditure on how to deliver low-carbon futures continued to build relationships with page 10. including publishing a report with the leading scientific nations such as the Royal Academy of Engineering on We have also launched our Future USA and China. With the USA, along greenhouse gas removal and briefing Leaders – African Independent with our work on the governance of the Government’s Chief Scientific Research (FLAIR) scheme in human genome editing, highlights Advisers on the 1.5 degree climate association with the African Academy include: a joint workshop on AI, society STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 5

SCIENCE ISGLOBAL Read more on page 24. page on more Read Read more on page 18. page on more Read Read more on page 12. page on more Read    in science the expertiseits of Fellowship to science in that excellence ensure supported and and recognised is Demonstrating the importance of science to everyone cultureby influenced is Science otherand developments society in just scientific as thinking and people how innovation influence theirlive lives. It important is that the Society engages with different groups in society and with the find out about general to public in theirtheir experiences, listen to part science make views to and wider conversation.of Promoting excellence excellence Promoting The Society’s aim is harness to that scientific work is of the highest quality. Supporting international collaborationscientific the importance to science of Science is an inherently an is Science activity.international The Society’s aim is reinforce to build partnerships between nations, international promote in role science’s and relations society. and culture Our strategic plan

meetings have brought series of films. Dr Julie Maxton Executive Director of the Royal Society together researchers with researchers together businesses localand policy our and makers regional mapping project has shown the impact investment of the across UK. In 2019/20 expect we increase to outstanding funding to grant our scientists £100 over which million to will the include announcement of our first FLAIRfellows, 43 new University Fellows eight and Research Industry Fellowships. Society The will continue its work with other national establish academies to anscience framework governance international humanfor genome editing. will We be buildtaking to China delegation a to scientificon partnerships. addition,In 2019/20 will see a major series of events focusing on humanity’s withrelationship and planet our the launch of our second People of science and development (R&D) 13% are more productive than firms that do not invest continue We in R&D. to its deliver on Government to press commitment delivering investment to of GDPof 2.4% research for development. Our Creatingand connections change target. Our work on artificial (AI)intelligence data governance and has included a series public of events with Demis including presenters Hassabis of Google DeepMind, Nobel Prize-winning economist Joseph Public for Stiglitz Professor our and Brian Cox. Science, in Engagement Our collaboration with the Royal Society of Edinburgh and the judiciary that the best ensure scientificto the in courts available is guidance strength. to strength from gone has This year have we held meetings topicson the including of autonomy robots, whether and psychopathy is For the wider public brain disorder. a hadwe almost 12,000 people through our doors at the Society’s Summer Exhibition.Science For those who person, in there be not therecould 240,000were page views on the people 4.5 million Exhibition’s website, withreached #SummerScience theand Exhibition featured also prominently TV on other in media. and It is impossible all cover to of the work of the Society here and so I will finishreview my with the work havewe done highlight to just how contributionimportant to is science’s together Society, The the economy. with the British the Academy, Royal Engineering the and of Academy Academy of Medical Sciences, has published factsheet a highlighting that of the world’s25% top 100 prescription and discovered were medicines developed in the UK and that firms that consistently research invest in 25% of the world’s top 100 top the world’s of 25% prescription medicines were the in developed and discovered invest consistently UK… firms that and (R&D)development in research firms than productive 13% more are R&D.” in invest not do that 6 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Public benefit statement

The Society’s mission is to recognise, promote and support excellence The Society has a number of The activities that the Society in science and to encourage the attributes that help to further undertakes to promote science development and use of science for its mission: and its benefits, for the ultimate the benefit of humanity. Research and benefit of humanity, include: innovation advance our economic, social and cultural well-being, • the expertise of its Fellowship, • recognising scientific provide health benefits and are key which includes world leaders excellence; to sustainable long-term economic across all scientific fields; growth. The Society is concerned • providing financial support with excellent science, wherever • the breadth of its scientific for scientists at various stages and by whomever it is done and is disciplines. This removes of their careers in the UK committed to increasing diversity in barriers and enables leading and internationally; science, technology, engineering scientists in different fields to come together; • funding programmes that and mathematics (STEM). advance understanding The Society furthers its mission • its independence from of our world; through its three key roles: as a government and other • organising discussion fellowship of the world’s most eminent organisations allows the meetings to advance scientific scientists; as the UK national academy Society to provide science discussion and discovery; of science; and as a registered charity. advice with no other influence; • its ability to convene • providing expert scientific groups of individuals in key advice, including on science roles and with relevant education, to policy makers; expertise to address major • promoting the importance of issues in science and wider science internationally; and society; and • staging programmes • its history and the successes of to engage the public the Society’s Fellows act as a with science. source of inspiration for what science can achieve. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 7

SCIENCE ISGLOBAL Below: Exhibition Science Summer The Society’s the is public flagship selectedevent, showcasing UK, the across from research the of one of work the including schools funded by the Royal Society Partnership Grants funds scheme This scheme. schools to carry out scientific classroom the in research partner STEM a alongside from industry. or academia 8 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Our strategy at a glance

Our mission Strategic priorities To promote Promoting excellence What have we achieved? Goals for 2020 The Society has increased funding to scientists by 16% The Society will increase spending on grants from science and in science to £84.7 million, and a review of 35 years of our flagship £84.7 million to over £100 million, including increasing its benefits. • Elect exceptional scientists to the Fellowship. funding schemes for early career researchers has shown the number of early career researchers and the value • Advise on research landscape. how successful they have been, with 70% of our University of awards across its flagship programmes, including Read more • Demonstrate economic impact of science Our motto Research Fellows going on to become professors. Royal the URF, Dorothy Hodgkin and Research Professorship on pages investment. Society Fellow, Sir Greg Winter was awarded the 2018 schemes. Ahead of the Government’s spending review Nullius in verba – take 12 – 15. • Fund outstanding researchers. Nobel Prize in Chemistry. Scientific papers published by the the Society will show the value investment in research nobody’s word for it. • Recognise scientific achievements. Society were downloaded 40 million times, an 18% increase brings to the UK. The Society will increase engagement • Encourage and support innovation. on the previous year. Eight new Royal Society Industry with industry, holding two Creating connections events. • Publish scientific research. Our principles Fellows have been appointed to support collaboration The Society will seek to increase the nominations of between academics and employers such as Rolls-Royce, candidates for the Fellowship from underrepresented Independence AstraZeneca and IBM. groups and those working in industry. Integrity Supporting international What have we achieved? Goals for 2020 The Society has joined with other scientific academies The Society will convene an international commission Diversity and inclusion scientific collaboration from around the world in creating a commission to establish to develop principles, criteria and standards for the • Proactive engagement in major issues. an international governance framework for research into possible clinical use of human germline genome editing. Collaboration • Address global challenges. heritable genome editing. We increased our funding of With the African Academy of Sciences, the Society Read more • Partner with leading scientific nations on international research by 7% to £14.8 million, funding work will award the first FLAIR Fellowships and select the Inspiration on pages new technologies. in 65 countries including Brazil, Ghana and India. We second cohort of awardees. On Brexit, the Society will 18 – 21. • Implement Commonwealth programmes. hosted the inaugural meeting of Commonwealth Science continue to call for the best possible deal for research. • Convene leading international meetings to Advisers. We have worked with the US National Academy The Society will also take a delegation to China to build Our roles advance science. of Sciences on issues including climate change and the on scientific partnerships and host the 5th joint science impact of AI and hosted the UK-China joint commission, conference of the Western Balkans process. Charity convening representatives from the UK and Chinese governments to explore scientific collaborations. Fellowship

National academy Demonstrating the What have we achieved? Goals for 2020 The Society’s report on greenhouse gas removal, produced The Society will stage a You and the planet series importance of science jointly with the Royal Academy of Engineering, showed how of public events, the Summer Science Exhibition and to everyone technology can be used to help meet climate targets, in the a series of events outside London. Reports will be Read more • Increase scientific advice for policy makers. UK and globally. The Society’s Summer Science Exhibition published to inform how the UK manages its land. on pages • New programme of public dialogue and saw close to 12,000 people through our doors. We have The Society will publish a report on neural interfaces, 24 – 27. engagement. over 230,000 followers on Twitter, up 29.6% on 2017/18, including a look at public attitudes. The Society will • Integrate science into public debate and 206,000 fans on Facebook, up 8.4% on last year. also press for a review of post-16 education in the and culture. Our You and AI series of public events exploring artificial next parliament and publish two science primers for • Promote value of STEM education. intelligence culminated with a sell-out crowd of 1,900 courts. A second series of People of science films • Inspire through historic collections. people at the Barbican in London and the lectures have will be launched. had over 230,000 views on YouTube.

Relationships Government, parliament and key influencers and funders

Royal Charter and strong Robust systems, policies Resources governance framework and procedures STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 9

films . series SCIENCE ISGLOBAL

The public, including children and young people young and children public, including The of public events, the Summer Science Exhibition and a series events of outside London. Reports will be published inform to how the UK manages its land. SocietyThe will report publish a interfaces, neural on public attitudes. look at a including Society The will also press a review for of post-16education in the next publish parliament two and primers science for courts. A second series of People science of will launched. be Goals for 2020 Goals for SocietyThe commission international an will convene principles, develop standards the criteria and to for germline editing. genome human possible of use clinical With the African Academy of Sciences, the Society the firstwill award FLAIR selectFellowships and the second cohort of awardees. On Brexit, the Society will continue call to the for best possible deal research. for The Society will also take a delegation China to build to scientificon partnerships host and 5th joint sciencethe conference of the Balkans Western process 2020 Goals for The Society will and the planet stage a You Goals for 2020 Goals for SocietyThe grants spending on will increase from £100 over increasing including million, to £84.7 million the and value earlythe researchers of number career its across awards flagship of programmes, including Professorship Hodgkin Dorothy Research and the URF, schemes. the spending Ahead review Government’s of the Society the investment will value show research in the brings UK. to Society The engagement will increase with industry, holding two Creating connections events. Society theThe nominations of increase will to seek the Fellowship underrepresented from for candidates those and working industry.groups in

,

and the science community science the and Engaged Fellows, staff, volunteersEngaged Fellows, Industry, academia, education and civil society civil and education academia, Industry, You and public events AI of series exploring artificialYou What have we achieved? we What have The Society has increased funding scientists to by 16% £84.7to million, and a review 35 of years of our flagship shown has early researchers funding career for schemes how successful they have been, with of our 70% University Research Fellows going on become to professors. Royal Society Fellow, Sir Greg Winter was awarded the 2018 Chemistry. in ScientificNobel Prize papers by published the Society downloaded 40 times, million 18% were an increase on the previous Eight new Royal year. Society Industry support been appointed to Fellows have collaboration between academics Rolls-Royce, as employers and such AstraZeneca IBM. and convening representatives from the representatives from UK Chinese and convening scientificgovernments explore collaborations. to hosted the inaugural meeting of Commonwealth Science Advisers. have worked with We the US National Academy the and change issues climate including on Sciences of impact of AI and hosted the UK-China joint commission from around the world in creating a commission to establish to commission a the creating world in around from into research framework for governance international an heritable funding our of editing. genome increased We £14.8 7% funding million, by to work research international India. Ghana countries and We Brazil, including 65 in achieved? we What have Society’sThe report produced removal, gas greenhouse on jointly with the Royal Academy of Engineering, showed how targets, climate the meet in help technology can used be to Society’s The Exhibition Science Summer UK globally. and saw close 12,000 to people through our doors. have We over 230,000 on up followers 2017/18, 29.6% on Twitter, and 206,000 fans on Facebook, up 8.4% on last year. Our with culminated sell-out a intelligence 1,900 of crowd people at the Barbican in London and the lectures have had over 230,000 views on YouTube. The SocietyThe with joined has other scientific academies What have we achieved? we What have

Increase scientificIncrease for advicepolicy makers. New programme of public dialogue and engagement. public debate into science Integrate and culture. Promote value of STEM education. collections. historic through Inspire Proactive engagement in major issues.Proactive major in engagement challenges. global Address Partner with scientific leading nations on new technologies. programmes. Commonwealth Implement meetings international leading Convene to advance science. Elect exceptional scientistsElect exceptional the Fellowship. to landscape. Advise research on Demonstrate impact economic science of investment. outstandingFund researchers. scientificRecognise achievements. support and Encourage innovation. scientificPublish research. Demonstrating the Demonstrating importance of science everyone to • • • • • Supportinginternational collaboration scientific • • • • • Promoting excellence excellence Promoting in science • • • • • • • Read more on pages 18 – 21. Read more on pages – 27. 24 Read more on pages – 15.12    Strategic priorities 10 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Where our income comes from and how we spend it

Income Other trading activities (£1.9 million) Expenditure on charitable activities The Society has a number of income The Society acquired Chicheley Hall (£110.5 million) sources including the Government, in 2008 with the aim of operating The Society’s charitable expenditure trusts, foundations, companies, the property as a centre for scientific is categorised in the statement of individuals, trading activities and and academic conferences. In addition financial activities in the following income from investments. Its income to its mission-related activities, the categories: enables the Society to deliver a wide Hall is available for conferences • promoting science and its benefits; range of programmes in support of and other events, and Royal Society • supporting and recognising its strategic aims. Income for the year Trading Limited was established to excellence in science; totalled £111.7 million. process the activities of the Hall. • providing scientific advice for policy; Royal Society (London) Ltd was • fostering international and global Income and endowments established to process other cooperation; and from donations and legacies trading activities including income • education and public engagement. (£0.8 million) from sponsorship agreements. The Society has relied on the Each of the areas above supports Income from investments generous support of philanthropists the delivery of the three strategic throughout its history. This year (£8.1 million) objectives as set out in the current the Society received funding from The Society holds a significant strategic plan. The expenditure chart trusts, foundations, companies investment portfolio which was on the following page illustrates and individuals in addition to the valued at £261.3 million at 31 March expenditure by both strategic contributions made by Fellows. The 2019. A number of the funds held objective and expenditure category. Society is grateful to all its donors were bequeathed to the Society as and their names can be found on the endowments or gifted as a restricted The expenditure to further the Society’s website. fund for a specific purpose. The strategic objective of promoting investment objective of the Society is excellence in science includes the Further information is available to at least maintain the real value of its majority of grant awards, the costs online. investment assets whilst generating of the Society’s publishing operation a stable and sustainable return to and the costs associated with lettings Grants for charitable activities fund charitable activities, thus being in furtherance of charitable objects. (£89.2 million) even handed between current and Expenditure in this area also includes The Society receives the majority of future beneficiaries. costs arising from recognition of the its funding from the UK Government’s excellence and creativity of scientists Department for Business, Energy Other income (£0.1 million) by election to the Fellowship and and Industrial Strategy (BEIS). The majority of other income sources Foreign Membership and the awards In the year, a grant was also relates to financial contributions made to those scientists who are making a received from the Department to projects led by the Society. major contribution to society. for International Development. Expenditure Expenditure to further the objective In addition to government funding, Expenditure for the year totalled of supporting international scientific the Society receives valuable £114.7 million. Expenditure is collaboration mainly constitutes grant contributions towards charitable incurred on raising funds and awards on international schemes, activities from long-term partners charitable activities. providing scientific advice for areas of such as the Wolfson Foundation Expenditure on raising funds international policy and expenditure on events convening scientists from and the Leverhulme Trust, as well (£4.2 million) across the world. as other external bodies. Expenditure on raising funds includes Trading in furtherance of charitable the direct costs of raising funds, The majority of the Society’s activities (£11.6 million) associated support costs, costs of expenditure to demonstrate the The Society undertakes trading trading and investment management importance of science to everyone activities in the form of publishing fees. The costs of the subsidiaries are is in the form of providing scientific journals and conferencing activities included in expenditure on raising advice for policy and education and that further its charitable objectives. funds within costs of trading. public engagement work. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 11

raising funds £0.4m Education and public engagement £1.0m Direct costs on raising funds £0.5m Support costs on Costs of trading £2.3m fees £1.0m recognising excellence in science £78.4m and its benefits £0.2m Grants for charitable activities £89.2m SCIENCE ISGLOBAL Income and endowments from donation legacies £0.8m  

Investment manager Promoting science Supporting and  Expenditure on raising fund total £4.2m Promoting excellence Promoting excellence in science total £79.6m

T T £111.7m £114.7m

Supporting and recognising in science excellence £4.2m and global cooperation £17.4m advice for policy Education and public engagement £3.8m recognising excellence recognising excellence in science £4.3m £1.1m £1.1m and its benefits £0.1m Other trading activities £1.9m Read more on page 34. page on more Read £8.1m Income from investments Income from Other income £0.1m Trading in furtherance Trading of charitable activities £11.6m Fostering international

Providing scientific Supporting and Promoting science        

Supporting international scientific collaboration total £21.6m Demonstrating the importance of science to everyone total £9.3m Charitable expenditure is shown by strategic objective in the outer ring and by expenditure category as shown in the statement of financial activities in the inner ring. 12 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS Strategy in action Promoting excellence in science

Priorities:

1 Elect exceptional scientists to the Fellowship.

2 Advise on research landscape.

3 Demonstrate economic impact of science investment.

4 Fund outstanding researchers.

5 Recognise scientific achievements.

6 Encourage and support innovation.

7 Publish scientific research.

Above: Dr Asel Sartbaeva, University Research Fellow (2011 – 2019), conducts research into making vaccines thermally stable at room temperature without refrigeration, which is particularly relevant to low-income developing countries where cold storage and transport are not possible. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 13 21% 18% 28% 22% 30% 69% 100% 269% year period year Change over five 6 16 79 67 731 270 293 2014/15 £50.1m SCIENCE ISGLOBAL 6 6 10 49 73 278 700 284 4 2015/16 £53.5m Professor Martin is Warren a Royal Society Industry Fellow, at Mologic and the University of Kent, developing vitamin rapid testa for deficiency B12 humans. deficiency B12 in linked is neuralto tube defects in unborn babies, the brain atrophy in elderly, diabetes. and disease cardiovascular Priorities Government’s newlyGovernment’s established Fund Talent Investment Research in however from 2018/19 additional funding incorporated largely into is existing grants increase to order in the attractiveness the Society’s of outstanding to schemes early career researchers.

8 26 64 135 803 280 290 2016/17

£61.2m 6 49 67 157 627 394 2017/18 1,300* 7 £73.3m 4 – 59 48 1 103 345 328 883 Royal Society Professor Royal Research Corinne Quéré Le is Professor of the at Change Science Climate University of East Anglia. She instigated 13 years an for led and the global carbon of update annual budget, an international effortkeepto track global carbon of emissions and the in environment.their fate Priorities science, technology, engineering technology, science, mathematics.and Although the value of funding has decrease been a has there increased in the number awards. In 2017/18 University Professors, Research all Fellows Dorothy and Research one-Hodgkin offered Fellows were off additional grants as part of the 2018/19 £84.7m

4 In 2017/18 270 one off additional grants were awarded alongside a range of other new and one off grants. From 2018/19 additional funding is largely incorporated into existing grants. Total value Total * Total Equipment and infrastructure and Equipment Industry, translation and innovation Established researchers International collaborationsInternational and travel Capacity building Dr Anastasia Fialkov is a Royal Society University Fellow Research at the University of Sussex, who is astrophysicsconducting into research and cosmology from the dark ages to the including nature day the present transient phenomena dark matter, of such as Fast Radio Bursts and low frequency radio observations. Priorities Some the of people fund: we Early career researchers career Early Number of grants awarded £84.7 million in funding to outstanding funding in to £84.7 million scientists pushing the who are understanding. human of boundaries This is an increase in funding16% of 2017/18. from supportWe discovery- in researchers across applied and led research Fund outstandingFund researchers In 2018/19 the Society awarded is of the highest quality. The Society’s aim is to harness the expertise the its of harness to is aim Society’s The is science in excellence that ensure to Fellowship recognised and supported and that scientificwork 14 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS Strategy in action continued

Elect exceptional scientists Advise on research landscape Demonstrate economic impact to the Fellowship A programme of work on research of science investment 24% of new Fellows and 20% of culture culminated this year with Financial support for research is new Foreign Members were women the Research culture: Changing key to driving productivity and and this year the Society established expectations conference which therefore crucial to the future of the special groups to oversee the 2019/20 brought together intertwined debates UK’s economy. Having secured a nomination process for Fellows to around research assessment, career Government commitment for the UK ensure that the best candidates progression, researcher development, to invest 2.4% of GDP in Research by are put forward for election research dissemination and research 2027, the Society has been continuing regardless of gender, ethnicity integrity. The programme reflected to press the Government to deliver. or where someone works. the Society’s commitment to ensuring a working culture for scientists that We have been making the case at Royal Society Fellow, Sir Greg Winter, allows them to be the best that they the highest levels of Government was awarded the 2018 Nobel Prize in can be regardless of who they are or including with the Chancellor, Philip Chemistry for his work, which led to where they come from. Hammond, who visited the Society the development of new medicines for in November. The commitment to diseases such as rheumatoid arthritis. The theme of the Society’s annual investing in R&D was reinforced in diversity conference was achieving his Spring Statement, reaffirming the Read more: List of our new diverse leadership in a research additional £7 billion for science and Fellows on pages 30 – 31. environment. Keynote speeches innovation since 2016. from Jacky Wright, Chief Digital and Information Officer at HMRC and Our Creating connections meetings Court of Appeal Judge, Lady Justice in Manchester, Newcastle and Cardiff Rafferty showcased such diversity in have been bringing together leading leadership in other sectors. experts from academia, industry, government and charities to explore issues around supporting and maximising R&D, with specific focus on local strengths and challenges.

29% 39% 23%

Recognise scientific achievements of grants were of grants were of new Fellows and Professor Jeffrey Gordon was awarded to women awarded to women Foreign Members awarded the Royal Society’s Copley (2017/18: 28%). in our early career were women Medal, the world’s oldest scientific schemes (2017/18: 35%). (2017/18: 25%). prize. His work is in understanding the role of the microbes that live in our intestines and their impact on our health. Priorities 5 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 15

events around events SCIENCE ISGLOBAL Increase grant expenditure grant Increase £100 over to million including increasing the number of early career researchers and the value awards across of its flagship programmes, Dorothyincluding the URF, Hodgkin and Research Professorship schemes. withJoin forces the Academy Medicalof Sciences, British the Royal and Academy, to Engineering of Academy publish report a emphasising the investment value in bringsresearch the to UK ahead the of Government’s review. spending with engagement Increase industry holding including another two Creating connections the UK. to proposals Develop progression advance and recognition of groups underrepresented in science, and twoin science, temporary nominating will startgroups their work the increase to nominations candidatesof for election to the Fellowship groups from because underrepresented or gender geography, of ethnicity and from those working industry. in Looking forward Looking 2019/20 The Society will: • • • • Publishresearch scientific The Society’s journals continue to cutting-edge quality, publish high Society The research. supports open access publishing as part of our commitment the widest to possible outputs.dissemination research of In 2018/19 48% of papers were published as open access, up from 43% in 2017/18. In 2018 31% of all papers open published the in UK were Papers journals were access. our from 40 times million downloaded in over 2018/19, up 18% on the previousyear.

A selection of Royal Society journals from 2018/19. Encourage and support innovation Eight new Royal Society Industry been appointed inFellows have 2018/19, linking academic researchers collaborationsin with businesses to technologies the new develop help of the future. Recipients of the awards will work with employers such as Rolls-Royce, AstraZeneca and IBM on a range of areas of research new theincluding of development turbine engines. gas superalloys for Eleven Short Industry Fellowships Residence in 15 Entrepreneurs and support to awarded also greater were interaction between scientists industry.working academia and in Above: 16 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS Strategy in action continued

Career tracker: 35 years 90% of supporting early Over 90% of URF alumni were career researchers currently engaged in international collaboration.

The Society exists to encourage the 80% of URFs had secured their first development and use of science for significant research grant as a principal the benefit of humanity. One of the investigator by the end of their main ways we do that is by investing fellowship. Nine in ten respondents to in outstanding scientists, people who our survey were currently supervising are pushing the boundaries of our at least one postgraduate researcher. understanding of ourselves and the From revolutionary DNA sequencers, world around us and applying that to flexible plastic electronics, ‘bendy’ understanding to improve lives. displays and ‘sonic nets’ which stop birds colliding with aircraft, Thirty-five years ago, the Society many of our fellowship alumni have introduced our University Research commercialised their research with Fellowships (URFs) to support early major economic, environmental and career researchers. We have also societal impacts. been supporting early postdoctoral researchers who need to work Alumni have also made a major flexibly through our Dorothy Hodgkin contribution, at a national and Fellowships (DHFs) for 23 years. Our international level, in policy areas goal in these schemes is to support including: pandemic planning; early career researchers to develop bioterror-related smallpox outbreaks; independent research careers and eradication programmes for diseases give them freedom to pursue new and including malaria and rubella; the more innovative lines of research. potential effects of climate change on marine ecosystems; research on traffic To mark the 35-year milestone we congestion; big data and machine decided to ask those who have been learning and education; and gender supported by these schemes what equality in science. difference it made to them. Of those who responded, 95% of URFs and 84% of the people we have funded 88% of DHFs are still in academia and have come from the UK but our 70% of URFs and 40% of DHFs, still in schemes have become increasingly academia, have become professors. international over the years with a quarter of those completing their Among those we have supported fellowship in the last 10 years coming are a Nobel Prize winner and a Fields from other EU countries. The UK medallist, They include innovators and has had a small net ‘brain gain’ with entrepreneurs, researchers whose more non-UK nationals staying in the work has shaped domestic and UK than UK nationals who are now international policy and scientists who working overseas. inspire the public to engage with the Nobel Prize winner Professor Sir wonder of science. Over 90% of URF alumni were Kostya Novoselov created a new currently engaged in international field of research with his work on collaboration and amongst DHF Graphene, a new material that is alumni the proportion was over 85%. the strongest and most conductive material ever recorded. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 17

SCIENCE ISGLOBAL 70% of URFs and 40% of DHFs, still in academia, have become professors. Professor Claire Spottiswoode Claire Professor time her betweenshares the Universities and of Cape Town biologistCambridge. field A working on the evolution, ecology and conservation of species interactions, has she the Bicentenarybeen awarded theMedal Society Linnean of of London and is the holder of Council Research European a Grant.Consolidator Professor Janet Hemingway Janet Professor was an adviser Sri to Lanka’s malaria-control programme the seen which has disease thateradicated country. in

Professor Dame Professor Nancy Rothwell (main image) is the first Presidentfemale Vice-Chancellorand of the University of Manchester. Solexa, which was sold Professor Sir Shankar Sir Professor co-foundedBalasubramanian the revolutionary DNA sequencing company $600 million.for . series and series Wonders of… Royal Society Professor for Science, in Engagement Public Brian Cox is the presenter of the BBC’s LiveStargazing 18 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS Strategy in action continued Supporting international scientific collaboration

Priorities:

1 Proactive engagement in major issues.

2 Address global challenges.

3 Partner with leading scientific nations on new technologies.

4 Implement Commonwealth programmes.

5 Convene leading international meetings to advance science.

Above: Attendee at the second international summit on human genome editing. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 19 3 SCIENCE ISGLOBAL 2 1 Dr Nipon Pisutpaisal of the King Mongkut’s University of Technology a North awarded was Bangkok Newton Advanced Fellowship to work with Curtis Professor Tom at Newcastle University on developing novel systems remove sulphur to from industrial will allow biogas. award The develop to group Dr Pisutpaisal’s expertise molecular biology in and industrial for bioinformatics research applications energy recoveryfor industrialfrom together and waste, with the Curtis laboratory, work on relevant technologies new developing development. economic Thailand’s to Priorities

convening world, as a means of establishing governance international an into research framework for heritable editing. genome published also During we the year a joint report with the US National dealing on Sciences of Academy with scale carbon and at dioxide held a forum on climate change climate on forum a held ecosystems.and also was There policya with dialogue the Chinese on focusing Sciences, of Academy low-carbon energy. In the November, Society hosted the UK-China joint commission therepresentatives from UK and governmentsChinese discuss a to activity of plan bilateral the future. for

Julie Maxton (left) with Marjan Scharloo (right) at the Teylers Museum in Haarlem, Holland, where watercolours from the Royal Society archive Royal the from watercolours where Holland, Haarlem, in Museum Maxton Julie (left) Teylers the at (right) with Scharloo Marjan US National SciencesUS of Academy and the Academy of Sciences of co-hostedHong Kong the second summit humaninternational on was editing. meeting genome The attention international of focus a scientist Chinese a by claim a to due about the birth of the first genetically babies.edited SocietyThe stated has clinical that any heritable of use editing genome would be irresponsible at this time and has established commission, with a the National SciencesUS of Academies other of number Medicineand a and scientific the around academies from Proactive engagement Proactive In November 2018, the Society, the Above: are on exhibit. issues major in Science is an inherently international activity. The Society’s activity. The international inherently an is Science build to science of importance the reinforce to is aim partnershipsbetween nations, andpromote to international society. and culture in role science’s and relations 20 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS Strategy in action continued

Address global challenges The Society launched the Future Leaders – African Independent Research (FLAIR) scheme in association with the African Academy of Sciences and supported by the Government’s Global Challenges Research Fund (GCRF). The scheme will support early career researchers, who have the potential to become leaders in their field, undertaking cutting-edge scientific research that will address global challenges facing developing countries. It was planned that awards would be made during the year however, being the first scheme of its kind for the Society, due diligence procedures took longer than initially anticipated and FLAIR Fellows were selected in 2018/19 with awards made in 2019/20. The GCRF is a £1.5 billion fund announced by the UK Government to support cutting-edge research that Image credit: monsitj addresses the challenges faced by developing countries. The Fund forms Partner with leading scientific Implement Commonwealth part of the UK’s Official Development nations on new technologies programmes Assistance commitment. As part of In 2018 the Society held a series of The Society is the national the GCRF, the UK national academies, bilateral meetings with the US National science academy for the UK and including the Society, have launched Academy of Sciences (NAS) looking Commonwealth and in 2018 we interdisciplinary challenge-led grants at data and AI. The meetings were hosted the inaugural meeting of with a focus on resilience. The Society designed to create connections Commonwealth Science Advisers. The received just over £6 million from the across research communities. They meeting, part of the Commonwealth GCRF in 2018/19. also generated new insights on Summit, brought together 31 AI and work and explainable AI. Commonwealth nations – from Australia Building on those links, in 2019 the to Vanuatu – to share their experiences Society will work with the US NAS to of bringing science into the world of establish an international dialogue that policy to help address global challenges. identifies areas where international collaboration is necessary to create an Priorities environment of careful stewardship of 1 2 4 5 AI technologies.

431 £14.8m 30 international grants awarded of grants awarded to FLAIR fellows selected foster international and global cooperation Priorities 2 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 21

exploring the exploring SCIENCE ISGLOBAL UK and ensures international UK ensures and talent continues to here. come money to access Keeps and networks that support international collaboration. Maintains regulatory that allowsalignment medicines new to access and technologies. Keeps highly-skilledKeeps scientists working in the – – – – – a delegation China to to Take build on scientific partnerships. Host the 5th joint science the Western of conference process Balkans in supporting science role of peace and prosperity in Work withWork the National US Academies Sciences of and Medicine convene to commission international an criteria principles, develop to and standards for the clinical genome editing of of use society. by withAward, the African Academy Sciences, of the first FLAIR round of address help Fellowships to global challenges facing countries. developing Continue call to for a deal on that: Brexit – the region. the human germline, should germline, human the use the of technology be considered acceptable • • Looking forward Looking 2019/20 The Society will: • • • 5 1 2,102 attendees at the 33 UK meetings and 62% of the 589 speakers were overseas.from Priorities 38 meetingsheld were with ; and CRISPR . A number of energy materials ; the transformative potential potential transformative the Social media card for the scientific discussion meeting, Energy materials for a low carbon new technologiesnew in cancer ; future. Image credit: Saiful Islam, University of Bath. Above: for carbon a low future mechanobiology The Society runs a series of internationally scientific renowned meetings that bring together leading scientificexperts discussto latest the knowledge develop to and research of their field. The meetings are selected, in competitive a process, the scientists international leading by that up the make Society’s Hooke Committee. this year Topics have included: dataof and image analysis for eye care ecology and evolution the scientific meetings year in the heldwere at the Society’s centrefor scientificconferences, academic and Societythe Royal Kavli International Hall. Chicheley Centre at Convene leading international international leading Convene science advance meetings to 22 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS Strategy in action continued

Science and the European Union

Since the Brexit referendum in 2016 of two academies’ networks, EASAC the Society has been committed to and ALLEA. With ALLEA, this included minimising any negative impact on hosting a pan-European conference UK science as a result of leaving the on data governance, with participants EU. One in six researchers in UK from across Europe. universities and research institutions The Society has published a series are from elsewhere in the EU. NHS of factsheets focusing on the value patients have benefited from EU to the UK of maintaining the closest regulatory alignment to allow access possible relationship with EU and on to cutting-edge medical treatments the threat of a no-deal Brexit. We also as part of clinical trials. On leaving published a report on the value of EU the EU, the UK could lose access funding across research disciplines. to over £1 billion a year in EU Our evidence has regularly featured research funding. in the media and in political debate. Over the past year the Society has We have been in regular contact continued to make the case for the with Government, and Royal Society closest possible relationship between Fellows have given evidence to UK and the rest of European science. a range of parliamentary select We have emphasised Brexit’s possible committees and appeared widely in consequence for all European science. the media. The last three Presidents In October the President of the of the Society wrote to The Times Society led a group of 29 Nobel Prize in July 2018 warning that “trashing Winners and six Fields medallists from relationships with the EU and member all over Europe who wrote to Prime states will jeopardise global scientific Minister May and President Juncker progress”. highlighting the growing strength of European science, citing the ease of The Prime Minister gave a speech collaboration nurtured by the EU as a on science in May 2018 in which key factor in this. she spoke of the UK wanting a “deep science partnership with the EU” The Society has continued to engage echoing much of what the Society its partners throughout Europe has been saying. The Government to ensure that ways are found to has also committed that all successful maintain long established scientific UK bids into Horizon 2020 submitted collaboration, whatever the political before exit will be underwritten and circumstances. Building on previous that all UK participation in Horizon years, the Society’s leadership 2020 calls that are open to third- made visits to academies, funding country participants (from the date organisations, universities and of exit to the end of the programme) ministries across Europe. We have will also be underwritten. convened a bilateral international meeting with the Académie des The Society has also been active Sciences in France and loaned in responding to the Government’s collections from our archives to the White Paper on the UK’s future skills Teylers Museum in the Netherlands based immigration system. We are for an exhibition on the Bauer seeking to ensure that the UK has an brothers’ work. immigration system that keeps highly skilled researchers working in the UK The Society has also continued to and ensures that talented people from work closely with partner academies around the world still choose to come across Europe through membership here and work alongside our home- grown scientists.

Image credit: georgeclerk STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 23

Regulatory alignment between the UK and the allows EU NHS patients to access trials clinical many of treatments.new 1 in 6 1 in academic staff in UK Higher Education Institutions from are the in EU. elsewhere SCIENCE ISGLOBAL +£1bn receives UK research over £1 billion a research EU in year funding. georgeclerk Image credit: Image 24 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS Strategy in action continued Demonstrating the importance of science to everyone

Priorities:

1 Increase scientific advice for policy makers.

2 Implement programme of public dialogue and engagement.

3 Integrate science into public debate and culture.

4 Promote value of STEM education.

5 Inspire through historic collections.

Above: Participants at the Summer Science Exhibition, 2018. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 25

SCIENCE ISGLOBAL 3 1 Priorities Professor Gideon Henderson FRS, Chair of the Royal Society f the UK acts now on greenhouse If the UK acts greenhouse on now national reach can we removal, gas targetsemissions a how and show play can economy industrialised major the goals meeting in role a leading theof Paris Agreement.” removal. gas greenhouse on working group Implement programme of public of Implement programme engagement and dialogue The Society has been asking the public about their attitudes towards interfacesneural of series a in the UK. across run sessions dialogue These devices placed on or in the interact with body, human person’s a nervous system can used be to and but hearing, movement or sight restore they raise questions also about human been seeking have enhancement. We the views acceptability on: the public’s of levels of invasiveness in various contexts; criteria used distinguish to between non- and enhancement applications;enhancement definitions made by society of desirable and interfaces; neural undesirable of uses equity, privacy, around issues and the justice to social and relation in technologies. Those views will be helped have and published 2019 in inform our work in the area. Society brought pairing also scheme scientists28 together with MPs and Civil Servants learn about each to work.other’s

The and the full report was Increase scientific advice for advice scientific Increase policy makers The Society has continued engage to policy the and publicabout makers genetic technologies.the of use been also engaging policy have We issues enabling including on makers developmentthe rapid safe and and deployment of all forms of data looking and the at elementsscience, technology and that will science of deliver low-carbon futures. Our report Greenhouse gas removal jointly(right), produced with the Royal Engineering, of Academy identified greenhousethe available range of gas removal methods, the factors that will affectconsiders and use their how they may be deployed together meetto climate targets, both in the UK and globally. The report was featured by the BBC, Financial Times, The Times, The Guardian and Independent, 1,664downloaded times with the times. summary We 820 downloaded the Chief Government’s briefed also ScientificAdvisers event an held and MPsfor and Peers on why the target change 1.5 climate degree matters and what can we do meet to it. unbiased and concise Accurate, important increasingly is evidence to policy makers and the Society has worked with the Academy of Medical outline to theSciences principles by which evidence should be synthesised. TheSociety works with the Policy Institute at College King’s London run to a Policy Primer that understand researchers helps the rapidly policy changing landscape in the UK, scientificresearch how and helps shape, to and is shaped by, Royal annual The Government policy. Science is influenced by culture and byother developmentsand culture by is influenced Science in society just as scientific thinking and innovation influence It important is Society the lives. that their people live how insociety engages withgroups different and with the public to their listen experiences, their about out find to general in part conversation. wider of science make to and views 26 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS Strategy in action continued

Integrate science into public debate and culture The Society’s Summer Science Exhibition saw close to 12,000 people through our doors to meet the scientists doing some of the most exciting and cutting-edge research from across the UK. Over 2 million people had a taste of the Exhibition when it featured on ITV London’s early evening news. We had 240,000 page views on our website and #SummerScience reached 4.5 million people on social media. Beyond the Summer Science Exhibition we held numerous events around the UK. As part of the celebrations for our Young People’s Book Prize, we had 200 children and parents doing hands-on activities at a local library in Strabane, Northern Above: Participants at the Summer Science Exhibition, 2018. Ireland, and Mark Miodownik gave the Royal Society Michael Faraday Lecture Brian Cox, our Professor for Public As part of our ongoing campaign to at the Society and to a packed crowd Engagement in Science, in front of a create the conditions for young people at the Cheltenham Science Festival. sell-out crowd of 1,900 at the Barbican in the UK to receive a broader, more On social media we have over in London. The lectures have had over balanced and connected education, 230,000 followers on Twitter, which 230,000 views on YouTube. including science and maths, beyond is a 29.6% increase on 2017/18. On age 16, the Society has called for Promote value of an independent review of post-16 Facebook, we have 206,000 fans, STEM education up 8.4% on last year. Our YouTube education in the next parliament. This Following the publication of our channel has 43,000 subscribers, up is essential if we want all young people Computing in schools report in almost 30% and will be a focus for to have an engaging and rounded 2018, the Government committed the Society in 2019/20. Our website education that supports academic £100 million to ensure that every had 1.7 million users and 2.6 million achievement but also develops secondary school pupil can study sessions, up 19.1% and 16.7% on last the skills, knowledge and qualities computing. In 2019 the government year respectively. needed to flourish in life, learning and took a step towards delivering on that work. We are also engaging with a The Society has also continued our commitment with the establishment wide range of stakeholders through collaboration with the Royal Society of of the National Centre of Computing a public dialogue on the benefits and Edinburgh and the judiciary to ensure Education. the challenges of changing the post- that the best scientific guidance is 16 education system, particularly for available in the courts. We held a students, teachers and employers. range of meetings covering topics including the autonomy of robots, Priorities and whether psychopathy is a 2 4 brain disorder. A highlight of our work on AI and data governance was our You and AI series of public events. The series was supported by Google Deepmind and included speakers Demis Hassabis of Google DeepMind and Joseph Stiglitz, Nobel Prize-winning economist. 230,000 There were also expert panel events over 230,000 Twitter followers hosted by Professor Jim Al Khalili in Manchester and by Professor 206,000 over 206,000 Facebook fans STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 27

films.

SCIENCE ISGLOBAL regional events to public events to People of science on statistics and collision analysis assist to the judiciary handling in scientific evidence. Launch a second series of six an independent review independent review an post-16of education in the next parliament. primers courtsPublish for You and the Stage a series You of planet onstimulate public debate a can inspire science how positive vision protecting of the health enhancing and of the planet. Showcase the work 22 of most theof UK’s cutting- edge teams at the research Exhibition. Science Summer Hold a series Places of of science demonstrate the relevance communities to science of across the UK. Publish synthesis evidence reports long-term a inform to vision the for how UK manages its land post-Brexit. Publish a report on neural theinterfaces reveal and a publicoutcomes of exercise engagement public attitudesexploring thesetowards technologies. Continue press for to political commitments to • • Looking forward Looking 2019/20 The Society will: • • • • • • , from , explores how the , by Johann Friedrich 5 3 Eight specimens beetles of

3 2 brain develops during adolescence to adolescence during develops brain shape the adults become. we Priorities Inventing Ourselves Zoologischer Atlas Zoologischer Eschscholtz, 1829. Priorities Above:

.

films, Sarah-Jayne Blakemore, winner of the Royal Society Insight Investment Science Book Prize Prize Book Society Investment Insight Science Royal the of winner Sarah-Jayne Blakemore, Inspire throughhistoric collections 2018, with her winning book, Inventing Ourselves. Sarah-JayneProfessor Blakemore was awarded the Royal Society Insight Investment Book Science The formerPrize. Royal Society University book, Fellow’s Research Above: Following the success the of first series of our People science of the Society has been filming a second 2019.series, in which will launch The films see Professor Brian Cox scientists leading joining delve to into the Society’s rich archive of artefactsscience the stories of tell to extraordinary scientists, their science it still is how and influencing our understanding of the world today. The Society also continues add to to collections additions historic and our included the papers have this year of William Hyde Wollaston, Sir James Charles Davidson Sir and Mackenzie acquired also have Boys. We Vernon books by Erasmus Darwin and a pre-publication, proof copy of James bookWatson’s The Double Helix 28 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS Strategy in action continued

Science in Africa

Science is global and supporting international science benefits the whole world. That is why the Royal Society supports international scientific collaboration, improving scientific quality, building scientific capacity and addressing global challenges and the United Nations Sustainable Development Goals. The Society runs a number of grant schemes to support science in Africa. Our Challenge-Led Grants scheme has seen £7 million awarded to 15 interdisciplinary collaborations in Africa, Asia and Latin America. These consortia will generate new approaches to significant and complex resilience problems facing developing countries and each consists of one UK research group and two international research groups. The initiative is a collaboration between the Society, the British Academy, the Royal Academy of Engineering and the Academy of Medical Sciences. Projects in Africa that are funded under the scheme deliver research in sanitation; drought resilience; and developing novel therapeutic approaches for Kaposi’s sarcoma, the most common HIV-associated cancer in sub-Saharan Africa. The Royal Society-DFID Africa In 2018/19 the Society launched Fishery management Capacity Building Initiative aims to our FLAIR scheme in association Professor Andrew Brierley from the strengthen research and training with the African Academy of University of St Andrews, will be capacity across sub-Saharan Africa Sciences and supported by working with Dr Safari Methusela by creating sustainable scientific the Government’s GCRF. The Kinung’hi from the National Institute networks. The model incorporates scheme will support early career for Medical Research in Tanzania and integrated PhD scholarships and researchers in sub-Saharan Africa Dr Robert Jeremiah Kayanda from the shared supervision between UK- who have the potential to become Lake Victoria Fisheries Organization in based and African consortia members. leaders in their field undertaking Uganda. The project is a collaboration Funded by DFID, 10 awards of up to cutting-edge scientific research between fisheries scientists, experts £1.2 million each have been awarded that will address global challenges on parasite infection, social scientists to support over 30 postgraduate facing developing countries. and healthcare providers from students from sub-Saharan Africa. Tanzania, Kenya, Uganda and the UK. Projects include low-cost urban The goal is to produce better informed water supply and sanitation systems, fishery management and healthier developing materials for solar cells human populations with a more secure and unravelling the role of animals in food supply. African soil ecology. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 29 SCIENCE ISGLOBAL Renewable energy technologyRenewable image) (main development Professor Joshua Meyer of the University of Pretoria in South Africa, Dr Mohammad Elahee of the University of Mauritius and Dr Olabode Olakoyejo from the University of Lagos in Nigeria working are with Professor Christos Markides of Imperial College advanced an on solar-energyLondon the environmentaltechnology to suited and developmental conditions of Africa. They part are of the Royal Society-DFID Africa Capacity Building Initiative. Meeting Energy needs Energy Meeting Mrs Mary Abbo Suzan from Makerere University Uganda, in Professor M’Passi-MabialaBernard Marien from Ngouabi University of the in Republic the Congo and Dr Consalva Msigwa from the Dar es Salaam Institute of working are Tanzania in Technology with Professor Jon Lovett and Dr Andrew Ross from the University of Leeds on solar treatment of biomass generation. power to is goal The for shortage chronic Africa’s address help energy. renewable clean of 30 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

People

At the core of the Society are people, from Further information is available online. Fellows and staff to generous donors and the scientists who are supported through the Society’s funding programmes.

Fellows of the Society elected in 2018 Jim Al-Khalili Robert Crabtree Demis Hassabis Professor of Physics and Professor Whitehead Professor of Chemistry, Founder and CEO, DeepMind of Public Engagement in Science, Department of Chemistry and Energy Department of Physics, University Sciences Institute, Yale University Judy Hirst of Surrey Deputy Director, MRC Mitochondrial Philip Dawid Biology Unit, University of Cambridge Polly Arnold Emeritus Professor of Statistics, Crum Brown Chair of Chemistry, Department of Pure Mathematics Graeme Jameson EaStCHEM School of Chemistry, and Mathematical Statistics, Laureate Professor and Director of University of Edinburgh University of Cambridge the Centre for Multiphase Processes, University of Newcastle (Australia) Jillian Banfield Peter Dayan Professor, University of California, Professor of Computational Harren Jhoti Berkeley, Lawrence Berkeley Neuroscience, Gatsby President and CEO, Astex National Laboratory and University Computational Neuroscience Pharmaceuticals of Melbourne Unit, University College London Sophien Kamoun Margaret Brimble Richard Dixon Senior Scientist, Distinguished Professor, Distinguished Research Professor, The Sainsbury Laboratory Chair of Organic Chemistry and Department of Biological Sciences, Andrew King Director of Medicinal Chemistry, University of North Texas Wellcome Trust Principal School of Chemical Sciences and Gregory Edgecombe Research Fellow and Professor School of Biological Sciences, of Neurophysiology, Department University of Auckland Merit Researcher, Department of Earth Sciences, The Natural History Museum of Physiology, Anatomy and Neil Brockdorff Genetics, University of Oxford Wellcome Trust Principal Research Wenfei Fan Professor of Web Data Dimitri Kullmann Fellow, Department of Biochemistry, Professor of Neurology, Department University of Oxford Management, School of Informatics, University of Edinburgh of Clinical and Experimental Epilepsy, Frank Caruso Institute of Neurology, University Melbourne Laureate Professor Roger Goody College London and NHMRC Senior Principal Emeritus Director, Max-Planck-Institute of Molecular Physiology Dominic Kwiatkowski Research Fellow, Department Head of Parasites and Microbes of Chemical Engineering, Robin Grimes Programme, Wellcome Sanger The University of Melbourne Professor of Materials Physics, Institute and Professor of Vincenzo Cerundolo Department of Materials, Genomics and Global Health, Director, MRC Human Immunology Imperial College London University of Oxford Unit, Weatherall Institute of Molecular and Chief Scientific Adviser, Foreign & Commonwealth Office Richard Marais Medicine, University of Oxford Director, The CRUK Manchester Kevin Costello Gregory Hannon Institute, University of Manchester Royal Society Wolfson Research Krembil Foundation William Rowan Catherine Martin Hamilton Chair in Theoretical Professor of Molecular Cancer Biology and Director, Cancer Project Leader, Department of Physics, Perimeter Institute for Metabolic Biology, John Innes Centre Theoretical Physics Research UK, Cambridge Institute, University of Cambridge Elon Musk Engineer, inventor and entrepreneur STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 31

SCIENCE ISGLOBAL Honorary Fellow 2018 elected in WillettsDavid Executive Chair of the Resolution Foundation, Visiting Professor member of the House of Lords Fabiola GianottiFabiola Physicist, Director-General, CERN Albrecht Hofmann Emeritus the at Max Institute Planck Chemistryfor Visiting Senior and ScientistResearch Adjunct and Lamont-DohertyProfessor, Earth Observatory, Columbia University Butler Lampson Microsoft Fellow, Corporation Technical Pozzan Tullio DepartmentDirector, Biomedical of ItalianSciences, National Research General of Professor Council and Pathology, University of Padova Joachim Sauer Professor of Physical and Theoretical Chemistry, Department Chemistry, of Humboldt-Universität Berlin zu Adi Shamir Applied and Computer Science InstituteMathematics, Weizmann The Science of and London College, King’s at Foreign Members 2018 elected in Carolyn Bertozzi Anne T andRobert M Bass Professor Chemistry,of Department of Chemistry Hughes Howard and Medical Institute, University Stanford Martin Chalfie University Professor, DepartmentBiological of Sciences, Columbia University Sebsebe Demissew Professor of Plant Systematics and Biodiversity, College of Natural Ababa Addis Sciences, University Gullele Executiveand Director, Botanic Garden Jeffrey Friedman Marilyn Simpson Professor, M Laboratory Molecular of Genetics, University Rockefeller Investigator, and HughesHoward Medical Institute

McGill University McGill of Physics, University of Oxford Mathematicsof Statistics, and University of Sydney WiseDaniel Department McGillJames Professor, Mathematicsof Statistics, and Zheludev Nikolay Deputy Optoelectronics Director, University Centre, Research of Southampton Co-Director, and PhotonicsThe Institute, Nanyang UniversityTechnological Professor and Chair of Quantitative in Program Genetics Director, and Genomics, University Trait Complex Guy Wilkinson Professor of Physics, Department GeordieWilliamson Mathematics, of Professor School Angela Strank BP Chief Scientist and Head of Downstream, BP plc Technology, Charles Swanton CRUK UCL/ManchesterDirector, Lung UCLCancer Centre, Cancer Institute Francis Leader, Group Senior and Crick Institute VisscherPeter of Queensland Pro-Vice-Chancellor (Research Knowledgeand Transfer), University Birmingham of John Speakman Chair Institute in Zoology, of Genetics University Developmental Biology, and of Aberdeenand ‘1000 talents’ InstituteProfessor, of Genetics and Chinese Developmental Biology, Sciences of Academy Graeme Stephens Sciences, Climate for Center Director, California Laboratory, Propulsion Jet Institute Technology of John Smol DepartmentProfessor, of Biology Environmental School Studies,and of Queen’s University (Canada) SoftleyTimothy

Michelle SimmonsMichelle Professor of Physics and Director, Quantum for Excellence Centre of Computation Communication and University of Technology, New South Wales Chair of Paediatric Neurology, The University Melbourne, Honorary of Fellow, PrincipalSenior Research The Florey Institute of Neuroscience and Mental Health, and Director of Paediatrics, Austin Health Director, Institute GravitationalDirector, for UniversityResearch, Glasgow of Ingrid Scheffer Sheila Rowan David Richardson Deputy Optoelectronics Director, University Centre, Research Graham Richards Oxford Drug Founder, Chairman and Department Professor, and Ltd Design of Chemistry, University of Oxford Southamptonof University Professor of Statistical Chair, Canada and Research Sciences Department Statistical of Sciences, University and Director, of Toronto, Canadian Statistical Institute Sciences Nancy Reid and Climate Impacts, Climate and Imperial Lalita Ramakrishnan Professor of Immunology and Infectious Diseases and Head of Molecular Immunity Unit, Department of Medicine, University of Cambridge AXA Professor of Biosphere of Dundee of Colin Prentice College London Tracy Palmer Tracy Molecular Microbiology, of Professor Division Molecular Microbiology, of School of Life Sciences, University Vassilis Pachnis Vassilis Development Leader, Group Senior and Homeostasis of the Nervous Francis The Laboratory, System Research Scientist,Research Facebook, and Professor Computer of Science, University College London Crick Institute Peter O’HearnPeter 32 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS People continued

Above: Royal Society Fellows and Foreign Members elected in 2018.

Fellows to science in many research areas. Fellows are elected through a The Society is currently supporting peer-review process on the basis 1,176 (2018: 1,111) researchers through of their contribution to science. It is its research fellowships. These 1,176 from the eminence of its Fellowship researchers receive long-term funding Researchers currently supported and Foreign Membership and its from the Society and range from early- by the Royal Society through its independence from government career researchers just starting their research fellowships that the Society derives its authority independent careers to some of the in scientific matters. Fellows and most distinguished senior researchers Foreign Members fulfil a range of in the country. responsibilities for the Society on a Staff voluntary basis. Many others, scientists 1,111 The Society aims to offer fair pay and non-scientists, also contribute to Researchers in 2018 supported to attract and retain appropriately the work of the Society on a voluntary by the Royal Society through its qualified staff to lead, manage, support basis. The Fellowship is supported by research fellowships and deliver the Society’s aims on staff based in London. behalf of its Fellows and Council. As A new fellowship election process was at 31 March 2019, the Society had 212 implemented during the year, moving staff. The Society’s staff are organised it from a paper-based process to an into programmes, services and trading online system. This change facilitated sections. a significant increase in the number of votes received. Volunteers A number of our public engagement Scientists events, including the Society’s The Society has played a part in Summer Science Exhibition, and other some of the most fundamental, work would not be possible without significant, and life-changing the contribution of our volunteers and discoveries in scientific history and the Society is grateful to all those who the Society’s scientists continue have contributed to its work over the to make outstanding contributions past year. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 33

than men

than men

26% 30% paid Women more 1% paid Women less 3% SCIENCE ISGLOBAL 74% 70% Gender pay gap reporting gap Gender pay The Society has voluntarily completed reporting gap pay gender to order in better understand how compare we with other organisations. the At ‘snapshot’ date of 5 April 2018, the -0.2% was gap pay gender mean and the median gender pay gap was 11.4% thenational average to compared of 14.35% and 11.8% respectively, as reported the on Gap Gender Pay website March as at 28 2019. Quartile 2: Quartile 4: 30% Men

than men than men

24% 40% paid Women 12% more paid Women 4% less 76% 60% pregnancy parenthood, and race, sexual or sex belief, or religion orientation. Remuneration policyRemuneration the Society’s of aim The remuneration policy maintain sustainable, to is fair levels of pay at the same time attractingas the right retaining and charitable deliver our people to objectives. In setting appropriate levels of senior management pay, the Society considers the skills, required competencies and experience the and remuneration role, each for level those for roles in sectors where suitable found. be would candidates staff all for Remuneration packages proprietary using benchmarked are pay surveys and external advisers. The last review of pay structures was undertaken during 2018. unremunerated. are All Trustees gender pay gap referenced in quartiles are based on mean calculations. mean on quartiles based in are referenced Note: gap pay gender Quartile 3: Quartile 1: 70% Women

less more more than men Mean earnwomen 0.2% than men UK median 11.8% more than more women Median men earn 11.4% Gender pay gap reporting gap Gender pay On 5 April 2018, full-pay employed we 174 relevant employees. UK average 14.34% less than men As the UK’s national academy of engineering, technologyscience, mathematics,and the Society a has particular responsibility that ensure to diversity embedded are inclusion and across all of its activities and partare of the culture of the organisation. The Society diversity annual publishes an data report. As the an employer, Society is committed providing to an discrimination, from environment free bullying, harassment victimisation or inclusivity of culture a creating to and individual and where the differences contributions of all staffrecognised are valued.and The Society provides equality of opportunity tolerate will not and all for age,discrimination of grounds on reassignment, gender disability, marriage civil and partnership, Equality, diversityEquality, and inclusion 34 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Financial review

Overview Total income In the year to 31 March 2019, the Society’s income increased by 14%, from £98.3 million to £111.7 million. Change The majority of the Society’s income £98.3m £111.7m came from charitable activities, which 13.6% increased by 15% during the year to £100.8 million (2018: £87.6 million). Total expenditure increased by 13% 2018 2019 on the prior year from £101.7 million to £114.7 million, as the Society has Total expenditure continued to expand its charitable programme. Expenditure on charitable activities increased from £97.3 million to £110.5 million, and remains around Change £101.7m £114.7m 95% of total expenditure, in line 12.8% with 2018. Income from investments has increased from the previous year 2018 2019 to £8.1 million (2018: £5.6 million). Income Income from charitable activities Most of the year-on-year increase in income relates to the increase Grants for charitable activities in grants for charitable activities which rose to £89.2 million (2018: £76.1 million). The Society’s Change core grant from BEIS was £47.1 million £76.1m £89.2m 17.2% (2018: £47.1 million). BEIS also provided a grant to the Society of £21.7 million under the Investment in Research 2018 2019 Talent fund to expand the number of grants awarded under existing grant programmes and income in support of the Newton Fund Academies’ Income from investments Programme of £6.5 million (2018: £6.6 million). There was also an increase in the grant from Change £5.6m £8.1m the Department for International 44.6% Development of £0.5 million to £2.4 million (2018: £1.9 million). 2018 2019 Trading in furtherance of charitable objectives remained at a similar level Income from donations and legacies to the previous year with a small Income from donations and legacies increase in income of £0.2 million to decreased from the prior year to £11.6 million (2018: £11.4 million) due £0.8 million (2018: £3.5 million), this to successful trading years for both was mainly driven by larger legacy publishing and conferencing. income received in 2018. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 35 £m 4.4 2018 e d s 97.3 c

t n 101.7 i t

n l a i n d a dvi g g o e n n a c n i g al n i i n t c a l g i g o y n s c i b t o i n i i b t n c n r t ra emen fi e e i i t i l n e a u ri l t o g a d l g i glo p e n a c pe

t rn e m v po o e enc enc u ppo s o d d c e i i o o c r t u r r d x o n n o c c e o n c a sci f eng i r e s P s benefits P E a F S £m 4.2 2019 114.7 110.5 SCIENCE ISGLOBAL events and the Society’s 019 2 Aside grants from activity, expenditure providing scientificon foradvice policy broadly consistent remained with £4.3 at the million prior year (2018: million). £4.4 The Society’s work focussed particularly thisin area on the governance of data use and AI, editing genome human education. and Expenditure education on and frompublic engagement increased in million £4.8 to 2018 in million £4.5 2019. This includes expenditure on a number events of including the You and AI lecture series, the Transforming future our Summer Science annual flagship Exhibition. 8 1 0 2 7 1 0 2

The funding received under GCRF under funding received The has enabled the Society fund to more URFsinternational establish and a funding and for programme grant new supporting sub-Saharan in research Africa called Future Leaders – African FellowshipsIndependent Research (‘FLAIR’). FLAIR aims support to who areearly researchers career transitioning independent an into which scheme, The career. research was launched in May 2018, is operated partnershipin with the African Academy of Sciences. Being the first scheme of its kind the for Society, taken have procedures diligence due longer than initially anticipated and, as a result, the firstawards were made in April 2019, which was later than originally planned. Expenditure on raising funds Expenditure raising on Expenditure charitable on activities Total expenditure Total 6 1 0

2

5* 1

0 2

0 40 80 60 20 120 100 Read more on the Society’s the on more Read benefit public onstatement 6. page

2015 reported under UK GAAP, 2016 restated under FRS 102. E * The SocietyThe range undertakes broad a of activities that provide public benefit either directly with line in indirectly, or our strategic priorities. Expenditure Expenditure on charitable activities charitable on Expenditure The majority of the Society’s charitable grant awards; to expenditure relates £84.7 million for accounting this year (2018: £73.3 million). The expansion the grantof programme included grants the in of value increase an existingunder schemes,awarded most significantly in the URF programme of £8.0 million to (2018:£37.6 million £29.6 million) the in of number increase an and the in Newton awards international International Fellowships programme of £1.7 million £6.6 to million (2018: million) £4.9 and DFID African awards of £0.3 million £2.0 to million (2018: £1.7 million). 36 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS Financial review continued

Grants The primary purposes of the Society’s grant-giving activities are to support the work of outstanding individual scientists at various stages of their careers, primarily in the UK, and to encourage collaborations between UK scientists and scientists throughout the world.

1. Applicants submit 8. The grant programmes are their proposal. evaluated on a routine basis (approx. every 5 years), which helps to inform us whether the programmes are delivering their intended objectives, 2. Once submitted, and what steps can be made to applications are checked improve them. to ensure they meet the eligibility criteria for that programme.

3a. For fellowships, longlisted applications are sent for peer review and are then shortlisted Grant making by the Committee. process

3b. For research support grants, the 7. Once an award has Committee assesses been initiated, we monitor the applications, the progress of the award which are then holder by requesting an considered by the annual progress report (or Chair(s). in the case of short awards, final report) each year. 4a. For fellowships, shortlisted candidates are invited to interview and recommendations are made to the Grants Committee. 6. Offer letters are sent 5. All recommendations to the candidate and host are then presented to 4b. For research organisation. The offer will the Grants Committee support grants, only become an award once for approval. the Chair(s) make both the applicant and host recommendations organisation have accepted on consideration the offer online. of the Committees’ assessments.

Further information is available online STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 37 SCIENCE ISGLOBAL A number of scientific meetings the Hall in Chicheley at held were Frontiers Science a including of year, meeting between the Society and the University of the West Indies, the inaugural meeting in a 3-year the advancementprogramme of for the in Caribbeanscience the and problems solve big to science of use affecting region.the Royal Society (London) Ltd Society (London) Royal Royal Society (London) Ltd was set up in 2013 process to corporate sponsorships the at Society and trading activities during commenced the year with million income of £0.1 (2018: £nil).

Chicheley Hall – Royal Society HallChicheley – Royal Limited Trading FebruarySince 2013, the Venues. been Vere outsourced De to tradingThe subsidiary recorded management of the property has milliona loss of £0.1 in the year (2018: £0.2 million). This has been attributed a difficult to trading environment, with than lower expected higher and rates room costs largely due to staffcostsshortages to due largely in the local area. The Society progressed with a review of operations Hall during Chicheley at optionsof year;number a the financial have been identified and advice will be taken from relevant professionals a months determine thein coming to longer term strategy the for property theand company. meeting, held at Chicheley Hall. Chicheley at meeting, held

Frontiers of science Frontiers the of at Delegates early fellowships, career professorships; support and fellowships, senior for innovation; and innovation; for grants,research collaboration; travel grants; capacity-building grants; grants.education related Above: Grants made by the Society fall into two broad classes as follows: (1) Fellowships • • (2) Research grants Research (2) • • • • Grant applications assessed by are means of a peer-review process and consideration by a panel of experts comprising Fellows of the Royal Society scientists. other and senior Each panel is chaired by a Fellow of the Society. 38 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS Financial review continued

Pension and Life Assurance Plan 2019 2018 of the Royal Society £m £m The Society operates a defined benefit Unrestricted funds 83.7 84.1 pension scheme which was closed to Unrestricted tangible fixed assets (13.4) (14.3) new members in 2014. The valuation of Heritage assets (49.4) (49.3) the scheme at 31 March 2019 showed a Free reserves 20.9 20.5 deficit of £11.6 million (2018: £11.0 million). This represents the difference between Investment policy and Reserves the assets and the obligations of performance The total funds of the Society the fund rather than an immediate On 23 March 2016, Council passed a increased by £14.5 million to cash liability. The increase in deficit resolution under Section 104A(2) of the £304.2 million during the financial was mainly driven by changes to the Charities Act 2011 to adopt the use of year, mainly due to the gains on assumptions resulting from changes total return in relation to its permanent investments. in market conditions which increased endowments with the exception of the liabilities by £3.1 million, the change Free reserves are unrestricted the Theo Murphy Australia Fund in reserves (after pension deficit) less in the mortality assumptions used order to best enable it to be even- reduced the liabilities by £1.3 million, heritage assets and fixed assets. The handed between current and future Society holds free reserves so that it assets returned £0.8 million in excess beneficiaries. of interest, and the payment of deficit can respond to unforeseen charitable reduction contributions during the The Society does not invest in opportunities and continue to honour year of £0.7 million. In accordance with organisations which conflict with the existing commitments in the event of FRS102, the actuarial losses on the charity’s purpose, or where Council a shortfall of income. The Society’s scheme of £0.7 million (2018: £1.1 million) deem that to do so would hamper policy is to review its income streams have been charged to unrestricted the charity’s work, for example by and expenditure commitments on an funds. A triennial valuation of the alienating those who support the annual basis, and assess the main scheme will be undertaken during Society financially. Council have financial risks faced by the Society and 2019/20, which will determine the resolved that the Society should not their associated likelihood in order to long-term liability of the scheme for the invest in companies or funds that develop a risk-based reserves level. coming years, but under the current derive a significant portion of their The target level was set cognisant of valuation, the Society will make deficit income from the sale or manufacture the risks associated with the changes contributions to the pension scheme of tobacco products. in the publishing landscape and of £0.7 million during the next financial volatility in investment markets which The Society ensures that may affect returns. year. Current budgets and forecasts performance is managed against indicate that the Society will be able to appropriate benchmarks. Income At the balance sheet date, the value meet these contributions as they arise. from investments for the year was of the Society’s free reserves was £8.1 million (2018: £5.6 million). The £20.9 million (2018: £20.5 million), well value of the Society’s investment above the target level of £14.8 million. portfolio increased in the year, from The Society continues to develop £239.5 million in 2018 to £261.3 million longer-term strategies to increase its in 2019. The increase was due to charitable activities in a sustainable improvement in the performance of way which will reduce the level of markets. During the year, Investment reserves whilst ensuring that it has Committee appointed consultants to adequate resources to enable it consider the ongoing appropriateness to respond to emerging risks and of the investment strategy. opportunities. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 39 SCIENCE ISGLOBAL Further available is information online.

Going concern that are there consider Trustees The uncertainties material no about the Society and its subsidiaries continue to concern. going a as Modern Slavery Act The Society is committed taking to the appropriate measures reduce to the risk of slavery and human trafficking organisation our our or taking in place supply chains. Pursuant section to 54 of the Modern Slavery Act 2015, the Society has published its slavery and traffickinghuman for the statement 2019. ended year 31 March financial

Section of the 162a Charities Act 2011 requires the Society make to fundraising statementa regarding activities because it is subject anto external audit. do not We fundraisers or professional use participators’ indeed or ‘commercial parties third any solicit donations. to therefore are notWe subject any to codesregulatory relevant or scheme of practice, nor have received we any fundraisingcomplaints to relation in activities nor do consider we it necessary specific design to procedures to monitor activities. such Statement of policy of Statement on fundraising The Royal Society Enterprise Fund was created with the aimof becoming successful financiallycontributor a to early-stage based companies science in the UK and a role model the for for science translation excellent of benefit. social and commercial Due theto dual benefitsexpected to be received, the fund is accounted for as a mixed motive investment in the financial statements. SocietyThe Partnership Limited a into entered Agreement with Amadeus Capital thePartners create to 2014 in Amadeus RSEF LP. Enterprise fund (Amadeus fund Enterprise RSEF LP) 40 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Principal risks and uncertainties

Council is responsible for ensuring in projects, to supplement the review that proper arrangements are in place on risk management arrangements Key for risk management. Council relies undertaken by the previous internal principally on the Audit Committee, auditors. Status of risk supported by the internal auditors, Council and senior staff reflect High risk to assess those arrangements and frequently on uncertainties and risks to advise it accordingly. During Medium risk to achieving the Society’s goals and the year, KPMG LLP replaced Only significant risks are presented in the the effectiveness of the various means PricewaterhouseCoopers LLP as the table below therefore none have been it employs to mitigate those risks. Society’s internal auditors following a rated as low risk They are also vigilant in identifying competitive tender process. new risks and taking steps to address Change of status The Audit Committee considers them. Actions and processes often Increased risk regular reports on risk-management contribute to mitigation of several systems and management of major risks simultaneously. The Society No change risks. Council considers regular works assiduously to develop and Decreased risk reports from the Audit Committee and maintain relationships to ensure that Key strategic priorities at risk reviews management of major risks, its activities remain relevant, that its including using its own risk register. contributions are effective, and that Promoting excellence The risk registers of the Society’s the value of its work is recognised. in science sections are also updated periodically The Society enjoys many beneficial Supporting international scientific and used in managing and monitoring relationships through its Fellows, collaboration risks and communicating information Foreign Members and staff. The main Demonstrating the importance of about risks across the organisation. risks identified by Council and actions science to everyone The internal audit plan for the year taken to manage them, including included a review of risk management ongoing actions, are described below.

Key strategic priorities Status Risk at risk Management of risk

Broad political context in which the • Continue to work with many partners, in the UK, in the rest of Society operates remains unsettled Europe, and globally. making short-term planning difficult, in • Advocate for and promote future arrangements for international particular because of uncertainty related collaboration, and the ability of the UK to continue to attract to Brexit. outstanding scientists from overseas, funding for UK science, and regulatory matters. • Provide advice and build relationships.

Funding reduced or remaining static has • Strengthen existing relations and develop new relationships, a negative impact on the Society’s seeking to secure additional funding and diversify sources ability to support excellent science. of funding. • Improve arrangements for financial planning. • Increased investment in primary-purpose trading activity. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

41 Status of risk

SCIENCE ISGLOBAL Active agenda to positivelyActive encourage and to agenda influence groups. underrepresented from engagement Unconscious bias training provided to those in positions to decisions. make with engagement Continual and consideration experts in fields. relevant Review of investment-management of arrangements.Review the investment portfolio review Regularly performance and of the investment manager. triennialComplete valuation. Regular review of service delivery. Undertake system planned implementation. upgrades and efficiencies. gain and control increase Continual to improvement management, committees in Council and senior-level Engage policy-setting monitoring. and Regular review and update of information security policies and procedures. Regular review and update of business continuity and disaster recoveryplans to help minimise disruption to operations from unexpected events. benefits compensation and Ongoing benchmarking of against the rest of the sector. change. of areas surveys engagement informing Employee available courses internal of schedule of Development employees. for Identify potential members with broad trustee experience. Include non-Fellows with relevant expertise on Society committees. Continue to enable willing Fellows to contribute to the Society’s work. Grants Committee formed of experts in subject area making them best placed to select applications of ‘excellent science’. Ongoing review ofperformance against strategy. Policies and procedures in place to govern decision making processes. strategy. Continual of review funding.Diversify of sources advice fromTake relevant professionals to determine a longer term strategy. Management • • • • • • • • • • • • • • • • • • • • • • • •

Key strategic Key priorities risk at

Narrow representation due to lack of diversity Council, the Fellowship, in applicantsgrant science general and arena. Governance structure fails to provide the right level and diversification of expertise to make decisions and run the effectively. Society Talented staff not recruited, developed staff not Talented and retained. and Events adversely impact reputation and operations (cyber-attack, serious data security serious a fraud, breach, major health safety incidents and internal or failures). process Technology and change across the across change and Technology organisation does not reflect growth and support the delivery of the strategy. The economic climate and inherent inherent and climate economic The uncertainties in performance give rise to the risk that investments are not properly safeguarded or perform poorly, the thoseincluding defined in benefit scheme. pension Trading subsidiary fails to contribute subsidiary to fails Trading funds to support research and/or carry out activities to further the Society’s objectives. Reduced income generated by generated income Reduced publishing activities due to open access strategy. journals Dilution the quality in thescience of funded by grants and/or failure to apply activities to resources the that available the highest quality likely of are are and to have the most valuable impact to further the Society’s strategic aims. Risk 42 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Governance

Structure and management Council has reflected on the new Public benefit The Society is a registered charity Charity Governance Code for larger Fellows are not remunerated for and Council is the trustee body under charities and supports the principles serving as trustees. Council has charity law. The Society was founded set out and the model for continuous complied with its duty to have due in 1660 and incorporated by Royal improvement, with a self-evaluation regard to the Charity Commission’s Charter. A Supplemental Charter was due to be undertaken in the next public benefit guidance when granted in 2012, and that now serves financial year. exercising any powers or duties as the Society’s governing document. to which that guidance is relevant. Membership of Council The governing body of the Society Information about public benefit Among the members of Council is its Council, whose members are provided by the Society is presented are the President, who is the Chair elected by and from the Fellowship. in this report. of Council, and four Officers: the Under the Charter, Council ‘shall Biological Secretary, the Foreign and may have full authority, power, Secretary, the Physical Secretary, and faculty from time to time to draw and the Treasurer. During the year up, constitute, ordain, make, and there were also 18 so-called Ordinary establish such laws, statutes, acts, Members. The President and the ordinances, and constitutions as shall Officers normally serve 5-year terms seem to them, or to the major part and the Ordinary Members serve of them, to be good, wholesome, 3-year terms. useful, honourable, and necessary, Changes in the membership of according to their sound discretions, Council took place as usual on for the better government, regulation, 30 November, which is the Society’s and direction of the Royal Society Anniversary Day. The new members aforesaid, and of every Member of received an induction that included the same, and to do and perform all a review of relevant documents and things belonging to the government, presentations on trustee duties by matters, goods, faculties, rents, lands, a partner in a leading charity-law tenements, hereditaments, and affairs practice and on internal control by a of the Royal Society aforesaid.’ partner from the Society’s auditors Council BDO. During the year, Council also The Charter specifies that Council received guidance from professional must have between 20 and 24 advisers on specific matters and members, each of whom must be a updates on relevant developments Fellow of the Society. affecting charities and trustees. Council determines the strategic Council delegates responsibility direction of the Society and in for day-to-day management of the particular approves the Society’s Society’s affairs to the Executive strategic plan. Council also approves Director. plans for specific charitable programmes on the recommendation of relevant committees, and those committees oversee activities within the programmes on behalf of Council. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 43

Boards Trading Trading subsidiary. reports. Subsidiary by the trading the by by the trading the by Chicheley Hall.Chicheley Society Trading Society Trading of operations at subsidiary, whose subsidiary, The Board of Royal The Board of Royal Programme activities processed and associatedand manage the runningmanage Society (London) Ltd Committees oversees the tradingoversees Limited oversees the oversees Limited activities undertaken primary purpose is to meetings to present public engagement,public and translation, and prizes, attend specific Council There are programmes are There committees diversity, in and scientificmeetings, and among others.among are they If committees are invited to not themselves membersnot SCIENCE ISGLOBAL publishing, science policy, policy, publishing, science of Council, Chairs of these Chairs Council, of of education, grants, industry personnel. pay-related Committee remuneration of remuneration key management key matters, including The remunerationThe Remuneration committee considers Committees trading activities. including financialincluding Committees make in a range of areas and Subsidiary Council for approval for Council recommendations to to recommendations system, external audit the effectiveness of the pay related matters and Financial, PlanningFinancial, planning and budgeting, and planning Society’s internal control and financial financial statements,and Council for approval. The Planning The Resources Resources Committee and Resources Resources and Society’s trading Planning andPlanning activities the and and oversees the oversees and Society’s financial plan and its and plan annual budgets to Council Committee monitors provision of services and recommends the recommends and financial performancefinancial research. Committees. Fellowship Committees disciplines, a and span the scientificspan for election on the candidates whosecandidates are not primarily not in are Fellows and ForeignFellows and general and honorary and general the Fellowship. Councilthe Fellowship. committee to advise on contributions to science Members are electedMembers by are The members of Council, members of The advice of its Nominations Committee and Sectional and Committee The SectionalThe Committees determines the candidates determines by Council are explicit in the terms of references of committees. of references of the terms in explicit are Council by managers. Investment Committee The Society’s The Committee on investmenton Investment Investment advises Council and oversees the oversees and policy, determines determines policy, performance of theperformance of investment strategy, Society’s investment The trustee body under charity law. Council has a system of committees and determines the memberships system committees a determines trustee of has and The Council body charity under law. of committees, which comprise Fellows and many non-Fellows with relevant expertise. Delegations of authority Board programmes. and makes makes and of any actions A subcommittee of Council comprising Council to the financial to on behalf of Council of behalf on statements and implementation such as international as such the President and the and the President attention matters, and arising; approves approves arising; affairs, that span many audit and matters the external audit audit programme; programme; audit arising from it with recommendations recommendations and management;and reports, tracks and plan; discusses theplan; associated matters.associated Officers. Board overseesOfficers. Board to Council in relation the external auditors fundraising and considers and fundraising approves the internal approves reviews internal audit The Audit Committee Audit The Audit CommitteeAudit matters that require urgent Committee structure 44 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Statement of Trustees’ responsibilities

The Council members (who are The Council members are responsible the Trustees of the Society) are for keeping adequate accounting responsible for preparing the Trustees’ records that are sufficient to show and Annual Report and the financial explain the charity’s transactions and statements in accordance with disclose with reasonable accuracy at applicable law and regulations. any time the financial position of the charity and enable them to ensure Charity law requires the Council that the financial statements comply to prepare financial statements for with the Charities Act 2011. They are each financial year in accordance also responsible for safeguarding with United Kingdom Generally the assets of the charity and hence Accepted Accounting Practice (United for taking reasonable steps for the Kingdom Accounting Standards and prevention and detection of fraud applicable law). Under charity law the and other irregularities. Council members must not approve the financial statements unless they Financial statements are published on are satisfied that they give a true the charity’s website in accordance and fair view of the state of affairs with legislation in the United Kingdom of the group and charity and of the governing the preparation and incoming resources and application of dissemination of financial statements, resources, including the income and which may vary from legislation in expenditure, of the group for other jurisdictions. The maintenance that period. and integrity of the charity’s website is the responsibility of the Council. The In preparing these financial Councils’ responsibility also extends statements, the Council members to the ongoing integrity of the financial are required to: statements contained therein. • select suitable accounting policies The current Council members, having and then apply them consistently; made enquiries of fellow Council • make judgements and accounting members and the charity’s auditors, estimates that are reasonable and confirm that: prudent; • state whether applicable UK • so far as they are aware, there is no Accounting Standards have been relevant audit information of which followed, subject to any material the charity’s auditors are unaware; departures disclosed and explained and in the financial statements; and • they have taken all reasonable steps • prepare the financial statements on they ought to have taken as trustees the going concern basis unless it is in order to make themselves aware inappropriate to presume that the of any relevant audit information and charity will continue in business. to establish that the charity’s auditors are aware of that information. This report was approved by Council on 2 July 2019 and signed on their behalf by:

Venki Ramakrishnan President of the Royal Society STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 45

SCIENCE ISGLOBAL the the information contained in financial statements ininconsistent is respect material withany the AnnualTrustees’ Report; or have records accounting adequate Charity; the Parent by been kept not or Charitythe Parent financial statements agreement in not are with and the records accounting returns; or havewe not received all the explanationsinformation and we require for our audit. Our the on opinion financial statements the other cover does not the extent to information and, except otherwise explicitly stated our in report, do we not express any form of thereon. conclusion assurance In connection with our audit of the financial statements,responsibility our is read the to other information and, in whether consider the other so, doing inconsistent materially information is with the financial statements our or knowledge obtained in the audit or otherwise appears materially be to misstated. identify If we material such material apparent or inconsistencies misstatements, required are we whether a is there determine to misstatement thematerial in financial statements misstatement material a or of the other information. If, based on the work have we performed, material a that is there conclude we misstatement this other of information, required are we report to that fact. have nothingWe report to in this regard. Matters on required which are we report exception to by have nothingWe report to in respect of the following matters in relation to which the Charities Act 2011 requires us report to you if, to in our opinion: • • • •

the Trustees’ usethe of the Trustees’ going the in accounting of basis concern thepreparation financial of statements or appropriate; not is disclosed in not have the Trustees the financial statements any identified uncertaintiesmaterial that castmay significant about doubt the Charity’s the or Group Parent ability continueto adopt to the going concern basis of accounting a for period of at least twelve months when the the financialfrom date statements authorised issue. are for Basis for opinion for Basis conducted audit accordance our in We with International on Standards Auditing (UK) (ISAs(UK)) and Our responsibilitiesapplicable law. those standardsunder are further described the in Auditor’s responsibilities the for auditof the financial statementssection ourof report. independent of are We Charitythe the and Group Parent with the ethical accordance in requirements relevant our to audit of the financial statements in the UK, Ethical theincluding Standard, FRC’s and have we fulfilled our other ethical withresponsibilities accordance in that believe these requirements. We the audit evidence have we obtained provideto sufficient is appropriate and a basis our for opinion. Other information otherThe information comprises the theinformation included in Trustees’ Report Statements, Financial and other than the financial statements and report auditor’s our thereon. other The information comprises the Trustees’ Report. responsible are The Trustees the other information.for We have nothingWe report to in respect matters the following of relation in whichto the ISAs (UK)require us to report where: you to • • Conclusions related goingto concern

give a true and fair view of the state of the and Group’s of the Parent Charity’s affairs as at 31 2019March incoming the Group’s of and applicationand of resources then the ended; year for resources been in properly prepared have with United Kingdomaccordance Accounting Generally Accepted Practice; and accordance in been prepared have with the the requirements of Charities Act 2011. In our opinion, in all material aspects, material all opinion,In in our the grant core payments received thefrom Department Business, for Industrial and Energy Strategy (BEIS) have been applied the for purposes set out in the Grant Letter and in with and the terms accordance conditions of the grant. core Opinion on other matter as required BEIS by grant letter Opinion audited the financial have We statements of The Royal Society (“the Charity”)Parent its and subsidiaries (“the Group”) the for year ended 31 March 2019 which comprise the statement financial of consolidated activities, balance the consolidated sheet, statement the of consolidated to financialthe cash flows notes and statements, summary a including of significant accounting policies. The reporting financial framework has that been applied their preparation in is United applicable Kingdom and law Standards, includingAccounting ReportingFinancial 102 Standard Reporting Financial The Standard applicable the of in UK Republic and (UnitedIreland Kingdom Generally Practice). Accounting Accepted opinion,In the our financial statements: • • • auditor’s report auditor’s Independent 46 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS Independent auditor’s report continued

Responsibilities of Trustees Auditor’s responsibilities for the Use of report As explained more fully in the audit of the financial statements This report is made solely to the Statement of Trustees’ responsibilities, We have been appointed as auditor Charity’s trustees, as a body, in the Trustees are responsible for the under section 144 of the Charities Act accordance with the Charities Act 2011. preparation of the financial statements 2011 and report in accordance with the Our audit work has been undertaken and for being satisfied that they give a Act and relevant regulations made or so that we might state to the Charity’s true and fair view, and for such internal having effect thereunder. trustees those matters we are required control as the Trustees determines is to state to them in an auditor’s report necessary to enable the preparation of Our objectives are to obtain and for no other purpose. To the fullest financial statements that are free from reasonable assurance about whether extent permitted by law, we do not material misstatement, whether due to the financial statements as a whole accept or assume responsibility to fraud or error. are free from material misstatement, anyone other than the Charity and the whether due to fraud or error, and to Charity’s trustees as a body, for our In preparing the financial statements, issue an auditor’s report that includes audit work, for this report, or for the the Trustees are responsible for our opinion. Reasonable assurance is opinions we have formed. assessing the Group’s and the Parent a high level of assurance, but is not a Charity’s ability to continue as a going guarantee that an audit conducted in concern, disclosing, as applicable, accordance with ISAs (UK) will always matters related to going concern detect a material misstatement when and using the going concern basis of it exists. Misstatements can arise from Fiona Condron accounting unless the Trustees either fraud or error and are considered (Senior Statutory Auditor) intend to liquidate the Group or the material if, individually or in the For and on behalf of BDO LLP, Parent Charity or to cease operations, aggregate, they could reasonably be statutory auditor or have no realistic alternative but to expected to influence the economic Gatwick do so. decisions of users taken on the basis of these financial statements. 3 July 2019 A further description of our BDO LLP is eligible for appointment responsibilities for the audit as auditor of the charity by virtue of its of the financial statements is eligibility for appointment as auditor of located at the Financial Reporting a company under section 1212 of the Council’s (“FRC’s”) website at: Companies Act 2006. https://www.frc.org.uk/ BDO LLP is a limited liability auditorsresponsibilities. partnership registered in England This description forms part and Wales (with registered of our auditor’s report. number OC305127). STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 47 SCIENCE ISGLOBAL Participants Exhibition, Science Summer the at 2018. Above: 48 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Consolidated statement of financial activities For the year ended 31 March 2019 (incorporating an income and expenditure account)

Expendable Permanent 2019 2018 Unrestricted Restricted endowment endowment Total Total funds funds funds funds funds funds Notes £’000 £’000 £’000 £’000 £’000 £’000 Income and endowments from donations and legacies 1 638 194 – – 832 3,462 Income from charitable activities Grants for charitable activities 4 992 88,254 – – 89,246 76,114 Trading in furtherance of charitable activities 3 10,960 608 – – 11,568 11,446 11,952 88,862 – – 100,814 87,560 Other trading activities 3 1,924 – – – 1,924 1,562 Income from investments 2 1,804 1,208 1,172 3,867 8,051 5,624 Other income 5 7 65 – – 72 125 Total income 16,325 90,329 1,172 3,867 111,693 98,333 Expenditure on raising funds 6 3,370 361 114 409 4,254 4,375 Expenditure on charitable activities 7 Promoting science and its benefits 73 203 – – 276 949 Supporting and recognising excellence in science 11,056 72,716 – – 83,772 71,257 Providing scientific advice for policy 1,993 2,305 – – 4,298 4,426 Fostering international and global cooperation 905 16,462 – – 17,367 16,139 Education and public engagement 3,020 1,733 – – 4,753 4,512 17,047 93,419 – – 110,466 97,283 Total expenditure 20,417 93,780 114 409 114,720 101,658

Net (expenditure)/income before net gains/(losses) on investments (4,092) (3,451) 1,058 3,458 (3,027) (3,325) Net gains on investments 18 1,406 2,962 2,903 10,993 18,264 816 Net (expenditure)/income for the year (2,686) (489) 3,961 14,451 15,237 (2,509) Gross transfers between funds 23 2,966 1,099 (671) (3,394) – – Actuarial losses on defined benefit pension scheme 25 (736) – – – (736) (1,091) Net movement in funds (456) 610 3,290 11,057 14,501 (3,600) Total funds brought forward 84,138 39,820 38,136 127,572 289,666 293,266 Total funds carried forward 83,682 40,430 41,426 138,629 304,167 289,666

All of the above results are derived from continuing activities. There are no other gains or losses other than those stated above. The Consolidated Statement of Financial Activities is for the Group as a whole. The Charity’s total income for the year was £111.4m (2018: £96.8m). The Charity’s total funds increased by £14.6m in the year (2018: £3.4m decrease). The notes that follow form part of the financial statements. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 49 21

(161) 2018 £’000 (1,512) 4,450 8,685 48,113 13,156 38,136 47,856 (11,019) (11,019) 49,321 14,305 39,820 (14,668) 127,572 127,572 303,170 301,497 301,658 290,478 290,478 239,544 239,544 Charity 20 2019 (140) £’000 7,513 (7,217) 18,186 49,416 41,426 47,856 10,653 13,354 40,430 48,332 (11,581) (11,581) (25,403) 316,813 316,673 261,260 138,629 324,030 305,092 305,092 SCIENCE ISGLOBAL 42 (161) 2018 £’000 4,697 8,043 (2,324) 47,301 38,136 47,856 12,782 (11,019) (11,019) 49,321 14,305 39,820 (15,106) 127,572 303,170 289,666 289,666 239,544 300,685 300,846 Group 43 2019 (140) £’000 6,508 (8,142) 17,959 49,416 47,407 41,426 47,856 11,408 13,354 40,430 (11,581) (11,581) (26,101) 315,748 304,167 304,167 261,260 315,888 138,629 324,030 17 15 18 19 25 23 23 23 23 23 23 20 20 Notes

Investments Creditors: amounts falling due after more than one year Restricted funds Unrestricted funds reserveRevaluation Expendable funds endowment Current assetsCurrent Stocks liability scheme benefitDefined pension assets net Total funds endowment Permanent Debtors receivable within one year Cash at bank and in hand liabilities current Net liabilities current assets less Total liability scheme pension assets before Net Fixed assets assets Tangible Consolidated and Charity sheets balance 2019 As 31 at March Defined benefit pension reserve pension benefit Defined funds Total Heritage assets Unrestricted funds income Creditors: amounts falling due within one year Treasurer Professor Andrew Hopper Andrew Professor The financial statements were approved and authorisedfor issue by Council on 2 July2019 and signed on its behalf by 50 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Consolidated statement of cash flows For the year ended 31 March 2019

2019 2018 Notes £’000 £’000 £’000 Net cash provided by/(used in) operating activities A 3,790 ( 7,026)

Cash flows from investing activities: Investment income 2 8,051 5,624 Purchase of tangible fixed assets 15 (629) (719) Purchase of heritage assets 17 (33) (20) Purchase of investments 18 (21,484) (21,268) Proceeds from sale of investments 18 17,015 25,452 Net cash provided by investment activities 2,921 9,069 Increase in cash and cash equivalents 6,711 2,043 Cash and cash equivalents at 1 April 4,697 2,654 Cash and cash equivalents at 31 March 11,408 4,697

A. Reconciliation of net income/(expenditure) to net cash flow from operating activities. 2019 2018 £’000 £’000 Net income/(expenditure) as per the statement of financial activities 15,237 (2,509) Adjustments for: Depreciation charges 15 1,580 1,683 Gains on investments 18 (18,264) (816) Investment income 2 (8,051) (5,624) Loss on the disposal of fixed assets 15 – 66 Investment management fees charged to portfolio 18 1,016 952 (Increase)/decrease in stocks (1) 2 Decrease/(increase) in debtors 19 1,535 (1,173) Increase in creditors 20 10,974 539 Donated heritage assets 17 (62) (1) Difference between pension charge and cash contributions 25 (174) (145) Net cash provided by/(used in) operating activities 3,790 ( 7,026) STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 51 SCIENCE ISGLOBAL Income recognised and accrued is Income when conditions entitlement on are can quantified be met,reliably receipt probable. is and legacies and Donations goods services and Donated are the Society theincluded at to value these where can quantified. be No amounts these included in are financial statements for servicesthe donated by volunteers or Fellows. Donations accounted are on for a is receipt where basis receivable entitlement is there and probable to Donations Gift include the income. Aid amountsbased on the at receivable date. accounting on recognised is Legacy income a receivable basis when there is to assess sufficient that evidence can be receipt and probable is receipt quantifiedreliably. Annual ContributionsFellows’ are recognised in the year in which they due. become Grants charitable for activities Grants when all recognised are conditions receipt for met. are Where restrictionsdonor-imposed apply to expenditurethe the timing related of as a precondition of its use the grant is until income those deferred as treated restrictions met. are Grants received specific accounted for purposes are asfor restricted funds. activities trading from Income activities conferencing from Income is recognised when the event takes publishing from Income place. activities when the recognised is publication provided. is investments from Income Investment on interest and income deposits accruals an on recognised is on Investment arising basis. income the to credited fundsendowment is with accordance fund in appropriate the prescribed conditions. Critical accounting judgements accounting Critical estimation of sources and key uncertainty In the application of the group’s policies theaccounting trustees judgements, make to required are estimates assumptions and about the carrying amounts of assets and apparent readily liabilities not that are Judgements, otherfrom sources. estimates assumptions associated and reviewedare on an ongoing basis and historical based on experienceare otherand factors considered that are relevant, be expectations including to of future events that believed are be to the under circumstances.reasonable Critical the to judgements relate treatment theaccounting multi- of defined benefitemployer scheme. Critical estimates accounting and the defined to assumption relate benefit scheme. pension Multi-employer benefit defined scheme Certain participate employees in multi-employera defined benefit withscheme other organisations. In the judgement of the Trustees, the Society does not have sufficient information on the plan assets reliably to able be liabilitiesand to account its for share of the defined benefit obligation assets. and plan In accordance with FRS 102 this is therefore accounted as for though it contribution defined a were scheme. scheme benefitDefined pension The cost of the defined benefit the and of value scheme, pension the scheme of value the present liability factors of number depend a on assumptionsincluding about inflation, mortality and rates discount which actuarial by specialists. taken are The particularly thevaluation is scheme of assumptions, rate sensitive discount to with movement a 0.1% in the discount rate resulting in a £1.2m change in the the liabilities. scheme of value Cash flow Cashstatement flow The Society meets the definition of a qualifying entity and 102 FRS under has therefore taken advantage of the to relation in exemption disclosure presentation of a cash flow statement respectin its of financial separate statements, presented which are financialalongside the consolidated statements. Basis consolidation of financial These statementsconsolidate the results of the Royal Society and its active wholly-owned subsidiaries, and Limited SocietyRoyal Trading Royal Society (London) Ltdon a line by financial basis. Inline the consolidated statements accounting uniform been used. separate A policies have activitiesstatement financial of for the charity itself presented. not is Accounting convention Accounting financial The statementshave with accordance in been prepared ReportingFinancial – 102 Standard ‘The Reporting Financial Standard applicable the in United Kingdom and Republic of Ireland’ (‘FRS 102’) and with the Statement of Recommended Practice: Accounting and Reporting by Charities FRS 102 as revised in 2015 (‘the SORP 2015’) together with the reporting the requirements Charities of Act 2011. financial The statements beenhave the under historicalprepared cost convention with items recognised at cost or transaction value unless otherwise stated the in relevant policyaccounting note. or been prepared accountsThe have on a going concern basis.The Royal Society (‘the Society’) is a Public Benefit Entity as defined by FRS102. been policies have accounting The applied consistently throughout the financial statements and year. priorthe The principalThe policies accounting the in these preparationadopted of follows:financial statements as are Accounting policies Accounting 2019 31 March ended theFor year 52 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Accounting policies continued

Expenditure Tangible fixed assets initially recorded at cost and donations Expenditure, including irrecoverable Tangible fixed assets are capitalised are recorded at a fair value where VAT, is accounted for on an accruals at cost, including purchase price and practicable. The Society holds and basis. Expenditure is allocated to any other costs of bringing the asset maintains these assets principally for the particular activity where the cost into working condition for its intended their contribution to knowledge and relates directly to that activity. Support use. The Society only capitalises items culture in line with its charitable aims. costs, which cannot be directly costing more than £5,000. Batches The Trustees do not consider that a attributed to a particular activity, are of items below this threshold are reliable estimate of the fair value can apportioned based on the costs of capitalised if forming part of a larger be obtained for a large part of the staff engaged in direct activities. asset or project and together costs archives collection without incurring more than £5,000. Expenditure on raising funds costs that would exceed the benefits Costs of raising funds include those Depreciation is provided on all assets, provided. The Society was founded in costs incurred in raising donations excluding freehold land and assets 1660 and the collection has been built and legacies. under development, to write off the up throughout its existence and the cost of tangible fixed assets on a number of assets held in the collection Expenditure on charitable activities straight-line basis over their expected is extensive and diverse in nature. Charitable expenditure includes useful lives as follows: Reliable and relevant information on the all expenditure incurred on grants cost of many of the assets is therefore awarded and on other schemes run in Freehold property not readily available and there is a lack pursuance of the Society’s objectives and improvements: 20-50 years of comparable market values. As such, under its Charter, including Fellowship Freehold fixtures these assets are not recognised in activities and primary purpose trading. and fittings: 3-10 years the accounts. The direct costs of supporting these Leasehold Investments activities, including staff and other improvements: 20-30 years Listed investments are held at fair value. overhead costs, are separately Leasehold fixtures Unlisted investments are held at cost analysed and shown as support costs and fittings: 3-10 years as an approximation to fair value where under this heading. Computers and AV the fair value is not obtainable. Realised Grants are recognised as a liability equipment: 3-5 years gains and losses on investments sold when the Society formally notifies Other equipment: 10-20 years in the year and unrealised gains and the recipient of the award. Due to losses on revaluation of investments On completion, assets under the nature of the funding source for are included in the SOFA. development are transferred to the the majority of grant awards, the relevant category and depreciated. Investment management fees are liability is measured as the total of allocated proportionally against the expected payments for the period to Heritage assets funds under investment. the next confirmation of income due. • Heritage assets comprise: Payments due in future periods are • Printed books The investment in subsidiary disclosed as grant commitments. Any • Archives undertakings are held at cost on termination liabilities are recognised • Pictures, sculptures and other works the Society only balance sheet. when a decision to cease the grant of art Total return accounting is made. Liabilities for awards where • Other artefacts more than one year of expected The Society adopts the use of total payments are provided at the outset Printed books and archives are return in relation to its permanent are discounted to current value using a included on the balance sheet at endowments with the exception of the rate equivalent to the opportunity cost deemed cost using a valuation Theo Murphy Australia Fund. Income from investments forgone. performed in 2003. Pictures, sculptures from the endowment’s investments and other works of art, and other and investment gains and losses are Leased assets artefacts are included on the balance recognised in the endowment column Rentals payable under operating sheet on a valuation basis. The of the SOFA. Unapplied total return leases are charged to the SOFA valuation reflects their fair value and is that is allocated to income funds is evenly over the term of the lease. performed every 5 years. presented as an allocation between endowment funds and income funds Additions to heritage assets are made as a transfer on the face of the SOFA. by purchase or donation. Purchases are STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 53 SCIENCE ISGLOBAL Consolidated statementConsolidated financial of activities – Note 27 Analysis of net assets between funds – Note 28 Movement and specific n Trust funds in year – Note 29 Multi-employer accounted are schemes contribution defined as for schemes as it is not possible identify to the Society’s share the of underlying assets and liabilitiesand reasonable a on Contributions basis. payableconsistent relating funding to of the deficit are liability a included as the on balance sheet and charged the to SOFA. The amounts charged the to for SOFA contributiondefined schemes pension contributions the employer’s represent thepayable in year. The method allocation for of pension costs between funds is allocate to on pro-rataa departmental using basis salary costs as a base. In accordance with FRS prior 102, year following for the comparative figures can be found as follows: • • • Termination benefits Termination benefits payable are Termination bywhen employment terminated is employee an whenever or the Society, accepts voluntary redundancy in these benefits. for exchange The amounts the SOFA to charged the bestrepresent estimate the of settle to expenditure required the date. sheet obligation the at balance Taxation The Society is a charity within the Paragraph Schedule of 1 meaning 6 Finance Act 2010. Accordingly, the Society is from exempt income income on taxes corporation and and gains the to extent that they are charitableapplied to purposes. The trading generally not do subsidiaries pay UK corporation tax because their policy is pay to taxable profitsto the Society as Gift Aid. comparatives year Prior are initially transaction at are recognised at subsequently and value measured their settlement value. Pension costs Defined benefit scheme pension assets measured are at fair value and liabilities actuarial an on the using basis discountedprojected unit method and equivalent rate the rate current a at to of return on a high-quality corporate equivalentbond of currencyterm and the Scheme liabilities.to actuarial The obtained trienniallyvaluations are and each at rules 102 FRS under updated balance sheetAny date. surplus or deficit is shown in the balance sheet as liability. or asset an calculated is the SOFA to charge The so as spread to the cost of pensions over employees’ working lives with comprises charge The the Society. the administration costs running of service thethe current scheme, cost computed by the actuary under FRS 102 and gains and losses on settlements curtailments. and Past service costs or credits recognised are ifimmediately the benefitshave vested. If the benefits have notvested the costs recognised are immediately, the period untilover vesting occurs. the on assets interest The liabilities and thefor period shown are as a net amount of other financecosts or credits the statement to credited or charged activities. financial of Actuarial gains immediately recognised losses are and losses theunder description ‘Actuarial defined on benefitsscheme’. pension Fund accounting Fund Restricted funds can only be used particularfor purposes specified by or agreed by the Permanent donor. funds where fundsendowment are the capital must and retained be Expendableinvested. endowment funds funds are that must be invested Unrestricted income. funds produce to may be used any for purpose in the furtherance the general of objectives of the charity.

Financial instrumentsFinancial SocietyThe assets financial has and a liabilities kind qualifyof financial that instruments basic. financial as Basic Foreign currencyForeign currencies foreign in Transactions rate the at exchange recorded are at the date of the transaction. Assets currency are liabilitiesand foreign in sterling thetranslated at exchange into date. sheet the at balance rate included lossesResulting or are gains in the SOFA. Fixed assets and investments are subject review to impairment for when there is an indication of a reduction their carryingin Investments value. held at cost reviewed are annually impairment.for Any impairment is SOFA the corresponding in recognised category in the year in which it occurs. Heritage assets reviewed are for reporting each impairment the of at end that the carrying ensure period to value reflects carryingtheir amounts. Impairment fixed of assets and investments and and received advice from Stone CapitalKing LLP Cazenove and Investment managers. endowment represents core The the part of the assets which the trustees real maintain in to seek terms. It is based on the value of the endowments 31 2012, at March inflation withtogether for allowance an (UK CPI as determined by the Office Nationalfor Statistics). The amount of any unapplied total any amount of The return fund is included as part of the endowment with together relevant the value of the trust investment for on the sheet.balance policyThe Trustees is distribute to of theup 4% to rolling 5 year average capital value of the fund. In thatthe charitydetermining should approach, the return total a adopt trustees the Charities considered Return) Regulations(Total 2013, 54 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Notes to the financial statements For the year ended 31 March 2019

1 Income and endowments from donations and legacies Expendable Permanent 2019 2018 Unrestricted Restricted endowment endowment Total Total funds funds funds funds funds funds £’000 £’000 £’000 £’000 £’000 £’000 Gifts and donations 170 218 – – 388 417 Legacies 233 (24) – – 209 2,813 Fellows’ contributions 235 – – – 235 232 Total 638 194 – – 832 3,462

2 Income from investments Expendable Permanent 2019 2018 Unrestricted Restricted endowment endowment Total Total funds funds funds funds funds funds £’000 £’000 £’000 £’000 £’000 £’000 Dividends and interest 1,770 1,208 1,172 3,867 8,017 5,598 Bank deposit interest 34 – – – 34 26 Total 1,804 1,208 1,172 3,867 8,051 5,624

3 Trading Recharged 2019 2018 External internal Gross Net surplus/ Net surplus/ income lettings expenditure (deficit) (deficit) £’000 £’000 £’000 £’000 £’000 Trading activities through subsidiary companies Kavli Royal Society International Centre 1,797 413 (2,323) (113) (226) Sponsorships 127 – (4) 123 – 1,924 413 (2,327) 10 (226) Trading in furtherance of charitable activities Publishing 7,682 – (3,454) 4,228 4,746 Lettings in furtherance of objectives – Carlton House Terrace 3,249 1,532 (3,113) 1,668 1,576 Other 637 – – 637 593 11,568 1,532 (6,567) 6,533 6,915 Total 13,492 1,945 (8,894) 6,543 6,689

The costs of the Society’s publishing operation and the costs associated with the lettings in furtherance of charitable objects are included in ‘Supporting and recognising excellence in science’ on the face of the statement of financial activities. The costs of trading through subsidiary companies are included in expenditure on raising funds. The Society was exempt from income tax, corporation tax and capital gains tax on income derived from its primary purpose trading and charitable activities. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 55 66 125 125 498 637 637 953 2018 2018 2018 Total Total funds funds funds £’000 £’000 £’000 9,173 4,375 1,858 5,034 6,587 2,287 6,295 47,101 47,101 76,114 endowment 72 72 214 477 460 Total Total Total 2019 2019 2019 funds funds funds £’000 £’000 £’000 1,016 2,415 5,274 6,541 6,028 2,301 4,254 47,101 21,673 89,246 89,246 – – – – – – – – – – – – – SCIENCE ISGLOBAL 409 409 funds funds funds £’000 £’000 £’000 Permanent Permanent Permanent endowment endowment endowment – – – – – – – – – – – – – 114 114 funds funds funds £’000 £’000 £’000 endowment endowment endowment Expendable Expendable Expendable – – – 65 65 214 361 361 funds funds funds £’000 £’000 £’000 2,415 5,274 6,541 6,028 21,673 46,109 88,254 Restricted Restricted Restricted 7 7 – – – – – – 132 477 992 992 460 funds funds funds £’000 £’000 £’000 3,370 2,301 Unrestricted Unrestricted Unrestricted

Expenditure on raising funds Expenditure raising on Other income Grants for charitable activities

4 5 Details of the income and to movement of individual funds disclosed are in note 23. Industrial Strategy (BEIS) Strategy Industrial From Government and other public bodies public other and Government From Core grant from the Department for Business, Energy and 6 Other Income Total Direct costs on raising funds Support funds raising costs on Cost of trading Cost of fees Investment management BEIS Investment Research Talent Fund Talent BEIS Investment Research Other grants from government and public bodies public and government from grants Other bodies external other From activities charitable to Contribution Total Total Department Development International for BEIS Newton Fund Fund Research BEIS Challenges Global 56 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Notes to the financial statements continued

7 Expenditure on charitable activities Grant Staff costs Other direct Support 2019 2018 costs £’000 costs £’000 Total Total £’000 (Note 10) £’000 (Note 8) £’000 £’000 Charitable activities Promoting science and its benefits 1 161 112 2 276 949 Supporting and recognising excellence in science 3,748 69,531 6,126 4,367 83,772 71,257 Providing scientific advice for policy 1,706 – 599 1,993 4,298 4,426 Fostering international and global cooperation 761 14,766 935 905 17,367 16,139 Education and public engagement 1,385 287 1,468 1,613 4,753 4,512 Total for costs of charitable activities 7,601 84,745 9,240 8,880 110,466 97,283

8 Support costs Media relations and Facilities and public building Support 2019 2018 engagement management services Governance Total Total £’000 £’000 £’000 £’000 £’000 £’000 Support costs on raising funds 26 107 307 20 460 637

Charitable activities Promoting science and its benefits – 1 1 – 2 12 Supporting outstanding and recognising excellence in science 249 1,016 2,915 187 4,367 4,088 Providing scientific advice for policy 113 464 1,331 85 1,993 2,053 Fostering international and global cooperation 52 210 604 39 905 755 Education and public engagement 92 375 1,077 69 1,613 1,753 506 2,066 5,928 380 8,880 8,661

Total support costs 532 2,173 6,235 400 9,340 9,298

Facilities and building management comprises the rent and running costs (maintenance, insurance, cleaning and security) of Carlton House Terrace. Support services comprises finance, IT, HR, pension costs and corporate management. Support costs are allocated on a pro-rata basis using departmental salary costs as a base. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION

57 8 4 9 2 1 2 1 1 1 1 1 – – – – 38 144 190 864 2018 2018 2018 £’000 1,201 8,998 11,063 11,063 6 7 1 2 1 – – – – 2 1 1 1 1 10 44 150 957 200 2019 2019 2019 £’000 1,239 9,534 11,730 SCIENCE ISGLOBAL Staff costsStaff The Royal Society Group Personal Pension Plan (definedcontribution): £472,000 (2018: £363,000) The Pension and Life Assurance Plan of the Royal Society (defined benefit): £396,000(2018: £447,000) £100,000) (2018: £110,000 USS: Total Support (including governance) a defined benefit scheme, and the USS pension scheme as follows:as and defined scheme benefita the USS pension scheme, • • • The following numbers of employees of the Royal Society earning £60,000 per annum or more received total emoluments within the bands shown: As required by FRS102, included in 2019 staffcosts is an amount of £244,000 (2018: relating£241,000) to holiday pay owed staffto at 31 2019.March costsPension contributions Employer include two Society to Royal contribution defined schemes, pension a and scheme The average full time equivalent was (2018: 197 189). redundancy and 1). Total (2018: during the employee Redundancy year 1 payments termination and to made were termination payments in respect of this employee £5,000 were (2018: £2,900). Expenditure on raising funds raising Expenditure on The 12 key management personnel of the Royal Society personnel management £1,694,000 the Royal remuneration of of total 10) (2018: key received including 12 The employer’s NIC (2018: £1,502,000). The average number of employees, analysed by function, was: Pension costsPension Total £70,000 – £60,001 £80,000 – £70,001 £90,000 – £80,001 £100,000 – £90,001 £110,000 – £100,001 £120,000 – £110,001 £130,000 – £120,001 £140,000 – £130,001 £150,000 – £140,001 £160,000 – £150,001 £170,000 – £160,001 £180,000 – £170,001 £330,000 – £320,001 £350,000 – £340,001 Expenditure charitable activities on Costs by type Salaries 9 Social SecuritySocial costs 58 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Notes to the financial statements continued

10 Grants Grants to Grants to 2019 2018 institutions individuals Total Total £’000 £’000 £’000 £’000 Fellowships University Research Fellowships – 37,648 37,648 29,550 Royal Society Research Professorships – 12,437 12,437 10,274 Newton International Fellowships – 6,640 6,640 4,915 Dorothy Hodgkin Fellowships – 4,948 4,948 3,884 Newton Advanced Fellowships – 3,608 3,608 3,584 Sir Henry Dale Fellowships – 3,550 3,550 3,200 RS Visiting Research Professorship – 2,740 2,740 1,772 Wolfson Research Merit Award 2,322 – 2,322 2,807 Industry Fellowships – 1,708 1,708 1,445 RS Challenge Grants – 1,278 1,278 2,019 Leverhulme Trust Senior Research Fellowships – 511 511 317 International Fellowship Grants – 276 276 288 Wolfson Advanced Fellowships 140 – 140 – Professorship of Public Engagement – 37 37 36

Education Schemes Partnership grants scheme 90 – 90 84 Education Research Fellowships – 2 2 10 Other Education grants 2 5 7 5

Other Grant Programmes DFID Africa Awards – 2,046 2,046 1,659 International Exchanges – 1,787 1,787 2,433 Wolfson Laboratory Refurbishment Grants 668 – 668 1,608 Entrepreneur in Residence – 487 487 214 Awards and prizes – 411 411 739 Leverhulme Trust APEX Awards – 354 354 138 FLAIR Fellowships Delivery – 251 251 – Newton International Exchanges – 202 202 742 Paul Instrument Fund – 196 196 197 Brian Mercer Awards – 143 143 751 Australian Academy of Science Think Tank – 106 106 310 Foundation for Science and Technology – 35 35 30 Kavli Scientific Seminars – 25 25 1 Commonwealth Science – – – 162 Other 3 89 92 77 Total 3,225 81,520 84,745 73,251 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 59 – – – – – 59 93 73 55 77 99 110 147 421 271 175 159 157 128 156 326 393 268 344 2018 Total £’000 1,041 4,552 41 42 97 93 55 79 56 48 40 44 119 174 161 127 142 126 125 159 187 156 150 188 203 405 206 Total 2019 £’000 3,223 3 5 4 4 5 9 5 5 8 9 8 9 6 2 1 71 17 12 13 12 13 15 15 14 14 SCIENCE ISGLOBAL 279 Number continued Other organisations Total Newcastle University University Leicester of Queen MaryQueen University London of University of York Cardiff University University Manchester of University of Bath King’s College London College King’s University of Exeter University of Bristol University Birmingham of University of Nottingham University of Glasgow University Southampton of University of Warwick University of St Andrews University of Oxford Leeds University of Imperial College London College Imperial University Edinburgh of London School of Hygiene and Tropical Medicine Tropical and Hygiene of School London University Cambridge of UniversityKeele Grants particular generally to awarded are individuals, although the host the to actual made organisation. is award individualDetails of grantsdepartment the from finance analysed available during the organisation year awarded are by on request. Recipients of institutionalRecipients grants of University London College 10 Grants 60 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Notes to the financial statements continued

11 Reconciliation of grants payable 2019 2018 Total Total £’000 £’000 Liability at 1 April 3,052 882 New grants awarded in year 86,642 75,034 Grants paid in year (75,606) (71,080) Grants refunded to the Society (1,897) (1,784) Liability at 31 March 12,191 3,052

All grants payable fall due within one year. 12 Payments to Trustees and Related Party Transactions 2019 2018 Total Total £’000 £’000 Expenses: Travel and subsistence 131 108

No Trustees received remuneration from the Society in the year (2018: Nil). Expenses were reimbursed to or paid on behalf of 19 Trustees (2018: 23 Trustees). Indemnity insurance With the consent of the Charity Commission, the Society has taken out Trustees’ indemnity insurance. The cost of this insurance for the year was £8,000 (2018: £8,000). No claims have been made under this policy. Grants and awards Professor Peter Bruce FRS was a co-applicant on Newton Advanced Fellowship grant. Professor Richard Catlow FRS was a nominated referee on Newton International Fellowship grant. Other Sir Venki Ramakrishnan, President of the Royal Society, has use of the President’s flat at Carlton House Terrace. Related Party Transactions The Royal Society had two wholly-owned trading subsidiaries during the year, Royal Society Trading Limited (registered number: 06967016) and Royal Society (London) Ltd (registered number: 08808518). STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 61 4 – – – – – 32 36 48 490 538 2018 2018 Total Total £’000 £’000 9,173 1,683 1,683 1,858 5,034 6,587 (9,173) (1,858) (5,034) (6,587) 47,101 (47,101) – – – – – 6 75 33 39 490 565 Total Total 2019 2019 £’000 £’000 2,415 6,541 6,028 1,580 1,580 (6,541) (2,415) (6,028) 47,101 21,673 (47,101) (21,673) SCIENCE ISGLOBAL

Financial memoranda Financial Total expenditure includes the following amounts: Total

Fees payable to the Charity’s auditors for: auditors Charity’s the to payable Fees The audit of the Charity and Group accounts legislation to pursuant Charity’s the accounts of subsidiaries audit The assets owned on Charges Depreciation Expenditure Department for Business, Energy and Industrial Strategy – core grant core – Strategy Industrial and Energy Business, Department for Income 14 grants government follows: to as was expenditure relating during and theIncome year Operating lease rentals lease Operating machinery and Plant 13 Rent Expenditure Department for Business, Energy and Industrial Strategy – Investment in Research Talent Fund Talent Research in Investment – Strategy Industrial and Energy Business, Department for Income Expenditure Expenditure Department for International Development grant Development International Department for Income Fund Research BEIS Challenges Global Income Expenditure BEIS Newton Fund Income 62 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Notes to the financial statements continued

15 Tangible fixed assets – Group and Charity Chicheley Chicheley Hall Hall freehold computers Computers Assets and property and other Leasehold and other under improvement equipment improvements equipment development 2019 2018 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Cost At 1 April 17,595 722 19,871 3,491 1,111 42,790 42,143 Additions 72 – 296 181 80 629 719 Disposals – – – – – – (72) Transfers 15 – 812 254 (1,081) – – At 31 March 17,682 722 20,979 3,926 110 43,419 42,790

Depreciation At 1 April 14,108 604 11,222 2,551 – 28,485 26,808 Charge for year 71 49 1,160 300 – 1,580 1,683 Disposals – – – – – – (6) At 31 March 14,179 653 12,382 2,851 – 30,065 28,485

Net book value at 31 March 2019 3,503 69 8,597 1,075 110 13,354 Net book value at 31 March 2018 3,487 118 8,649 940 1,111 14,305

All tangible fixed assets are used for the support of charitable activities within the Society. The Group and the charity have freehold property with a net book value of £3,503,000 (2018: £3,487,000). 16 Capital commitments – Group and Charity 2019 2018 £’000 £’000 Authorised and contracted for 37 36 Authorised but not contracted for 2,567 2,101 Total Commitment 2,604 2,137

At the balance sheet date, £1,157,000 (2018: £740,000) of capital commitments was authorised for refurbishment of 6-9 Carlton House Terrace. A further spend of £695,000 (2018: £586,000) had been authorised on IT projects. £305,000 (2018: £258,000) had been authorised for the historic maintenance of Chicheley Hall. Other general capital items total £447,000 (2018: £553,000), of which £37,000 (2018: £36,000) has been contracted for by the year end. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 63 21 2018

£’000 3,771 9,403 13,270 49,321 49,321

22,877 49,300 95 2019 £’000 3,771 9,440 49,416 49,416 49,321 13,277 22,928 62 SCIENCE ISGLOBAL £’000 13,168 13,106 at valuation at Assets held 33 £’000 at cost 36,215 36,248 Assets held These comprise an extraordinary comprise an These that nearly spans science the of development of unrivalled and record Heritage assets – Group andCharity Summary of heritage asset transactions asset heritage Summary of history of scientific Thecollection endeavour. fourhas maincomponents: Printedworks: The Library contains over 70,000 titles, published from thethe to 1470s The present main strength day. of the collectionis in the 17th and 18th centuries; from the 1680s the to mid-19th century, the policy of the Library was to everyacquire important scientific publication. Archives: historians, for particularly collection archive The 350 years. resource unique over containing a is science, historians of items. It the includes Society’s250,000 Charter Principia Mathematica. Book Isaac the and Newton’s manuscript of Pictures, sculptures, and other works of art: collection The original works 200 (primary over includes collection) and 10,000approximately photographs engravings and (secondary collection),them portraits of many past of present and Fellows. Other artefacts: scientific includes and items collection instruments, The 250 comprises approximately andfurniture furnishings, and the Society’s Charter Book. scholars the collections and The Society’s wider to public through the accessible Royal History are Centre, Science of library extensive an and on-line reference catalogue fully including which a includes searchable and presence, image library. 17 The Society holds an extensive collection of heritage assets relating the to history of the Society itself and the wider The Printed Books and Archives valued were in August 2003 by Roger Gaskell, a rare book dealer and the pictures and other artefacts King, Fine Art Weller by those on basis market/replacement fair a Dealers, on valuations The 2015. in are parts of the collection where it is felt such a valuation can be reasonably made. Assets held are at valuation as a proxy for cost. King, Fine Art Weller by 2015 March valued in Dealers. paintingsThe Hall valuations were The furniture Chicheley and are at on a fair market/replacement basis on those parts of the collection where it is felt such a valuation can be reasonably made. to compared values values/replacement impairment market the on present material no be to there consider Trustees The those stated. Purchases/donations At 1 April Additions Valuation or cost at 31 March art of works other and Pictures, sculptures The heritage assets comprise heritage The books Printed Archives Other artefacts Total 64 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Notes to the financial statements continued

17 Heritage assets – Group and Charity continued 2019 2018 2017 2016 2015 Five year financial summary of heritage asset transactions £’000 £’000 £’000 £’000 £’000 Purchases/donations Printed books 7 1 13 13 3 Archives 51 – 23 4 – Pictures, sculptures and other works of art 37 20 9 54 – Other artefacts – – 4 – 112 Total Purchases/donations 95 21 49 71 115

Donated heritage assets are recognised in the year they are received. There have been no disposals of heritage assets within the last five years. Preservation and management Expenditure which in the Trustees’ view is required to preserve or clearly prevent further deterioration of individual collection items is recognised in the Income and Expenditure account when it is incurred. The Society has an ongoing cataloguing project and the Society’s major strategic facilities for the long-term preservation of its historic archives, manuscripts and printed books are environmentally-controlled store rooms (conforming to British Standard BS EN 16893:2018). The Society’s modern records have been subject to a full audit, completed in April 2011. This process enabled the full-life management, destruction and permanent archiving of pertinent files. Conservation of both old and new archives is now underway. Each of the Society’s major collections (archives, modern records, printed books, pictures, journals, objects) has a designated member of curatorial staff and exhibited materials are looked after by an exhibitions manager. Collections are managed and recorded in discrete databases and according to the prevailing standard in each area (for example, International Standard Archival Description (ISAD) for archival cataloguing, SPECTRUM for museum standards and picture control). In 2018, the Society’s archives achieved accredited status (for procedures and service quality) with the UK National Archives. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 65 816 2018 2018 (952) £’000 £’000 7,854 6,007 8,543 6,546 6,060 6,060 3,299 (9,450) (3,552) 30,718 92,791 (21,900) 181,175 119,597 228,391 243,864 239,544 239,544 239,544 239,544 239,544 239,544 2019 2019 £’000 £’000 5,109 9,536 5,656 6,499 3,480 5,604 5,604 (1,016) (4,422) 10,652 18,264 25,905 (22,619) 189,708 189,708 261,260 261,260 261,260 261,260 261,260 261,260 103,022 130,322 239,544 248,244 SCIENCE ISGLOBAL Group Charity and Investments – Other Securities: Unlisted UK Overseas Cash: UK Overseas Total Disposal of investments of Disposal historicalTotal cost at the end of the year The valuation at 31 March 2019 comprises: Investments listed on a recognised stock exchange including investments and unit trusts: UK Net change in cash invested for trades within portfolio March 31 at Valuation Overseas Total Pooled investmentsPooled Specific investments – Theo Murphy Australia Fund Specific investments – Amadeus RSEF Overseas investments comprise equities, unit/investment trusts interest funds. fixed and The Society owns 100% of the issued share capital of Royal Society Limited The 26). Trading (note principal activity of the activities conferencing is company Hall. Chicheley at The Society owns 100% of the issued share capital of Royal Society (London) The 26). Ltd (note principal activity of the sponsorships. corporate is company Funds invested are as follows: Valuation at 1 April 18 Additions of investmentsAdditions of March 31 valuation at on gains Net Investment management costsInvestment management portfolio from) to/(withdrawn added cash Net 66 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Notes to the financial statements continued

19 Debtors 2019 2018 Receivable Receivable within one within one year year £’000 £’000 Trade debtors 2,136 4,531 Grants receivable 2,610 250 Legacy receivable 665 1,486 Other debtors 228 182 Accrued income 383 1,253 Prepayments 486 341 Total 6,508 8,043

Included in the Group debtors are debtors of £151,000 (2018: £42,000) of Royal Society Trading Limited and £30,000 (2018: Nil) of Royal Society (London) Ltd. All other debtors relate to the Charity. The Charity holds a loan in respect of the Royal Society Trading Limited of £1,010,000 (2018: £684,000). The loan incurs an annual interest charge at 2% above the Bank of England base rate. 20 Creditors 2019 2019 2018 2018 Due within Due after Due within Due after one year one year one year one year £’000 £’000 £’000 £’000 Trade creditors 1,603 – 1,147 – Publications advanced sales 3,876 – 3,569 – Chicheley advanced sales 211 – 164 – Grants payable 12,191 – 3,052 – Other creditors 328 – 189 10 Accruals and provisions 2,302 140 912 151 Deferred income 5,590 – 6,073 – Total 26,101 140 15,106 161

Included in the Group creditors are creditors of £774,000 (2018: £520,000) relating to Royal Society Trading Limited. All other creditors relate to the Charity. As at 31 March 2019, the Charity owed Royal Society Trading Limited £80,000 (2018: £82,000). As required by FRS102, included within accruals and provisions 2019 is a provision for a liability under the deficit recovery plan for the Universities Superannuation Scheme (USS) multi-employer pension scheme. A total amount of £151,000 has been provided for, comprising £11,000 due within one year and £140,000 due within more than one year. This provision has been calculated using the modeller developed by the British Universities Finance Directors Group (BUFDG), with the support of the USS trustee company, to provide a tool for estimating the liability under the recovery plan for accounting purposes. Reconciliation of deferred income 2019 2018 £’000 £’000 Deferred income brought forward 6,073 6,176 Amount released from previous year (6,073) (6,176) Income deferred in the year 5,590 6,073 Total 5,590 6,073 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 67 (161)

2018 Total Total 2019 (523) funds £’000 £’000 5,039 (2,324) (4,065) (2,322) (11,019) 49,321 11,912 14,305 13,783 52,597 18,299 40,685 40,685 289,666 239,544 239,544 Total 2019 (409) (140) funds £’000 £’000 9,164 3,867 (1,780) (8,142) (3,394) 31,085 14,338 10,880 40,249 49,416 13,354 (11,581) 304,167 261,260 261,260 Permanent endowment – – – – – SCIENCE ISGLOBAL (114) (671) (542) funds £’000 £’000 1,172 2,748 3,961 9,600 2,903 12,348 138,629 138,629 138,629 138,629 Permanent endowment endowment Expendable – – – – – funds £’000 41,426 41,426 endowment Expendable – – – – – funds £’000 40,430 40,430 Restricted (140) funds £’000 (8,142) 49,416 (11,581) 13,354 40,775 83,682 Unrestricted Group Analysis net of assets between funds – Statement total of returns 22 21 Funds balances at 31 March are represented by: Tangible fixed assets Investment management costsInvestment management returnTotal for year Less application of total return Investment returns returns Investment Investment Income Indexation Net total return for the year Unapplied Total return Unapplied Total At 31 March 2019 At 31 March 2018 Heritage assets Net current liabilities current Net Investments All other net current liabilities relate to the Charity. to liabilitiesAll current other relate net The net current liabilities in 2019 funded are investments, by which could be realised meet to the net liabilities as they fall due. Included in the Group net current liabilities liabilities are of £925,000 (2018: £812,000) of Royal Society Limited. Trading Capital gains Creditors: Due after one year Defined benefit pension scheme liability scheme benefitDefined pension Net assetsNet 68 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Notes to the financial statements continued

23 Movements on Trust and specific funds in year – Group Unapplied Transfers Unapplied total return application total return Total at Relevant Relevant at 1 April Investment of total at 31 31 March Permanent value b/f Indexation value c/f 2018 Income gain Expenditure Indexation return March 2019 endowment funds £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 2019 £’000 Life Sciences Trust 11,102 211 11,313 4,174 474 1,338 (50) (211) (555) 5,170 16,483 Maths and Physical Sciences Trust 10,184 194 10,378 3,854 435 1,230 (46) (194) (509) 4,770 15,148 RW Paul Instrument Fund 10,920 207 11,127 3,652 450 1,261 (48) (207) (266) 4,842 15,969 Theo Murphy – UK 52,342 994 53,336 16,930 2,149 6,069 (227) (994) (1,875) 22,052 75,388 Other Permanent Endowments 9,165 174 9,339 2,475 359 982 (38) (174) (189) 3,415 12,754 Total Permanent endowments part of the UTR 93,713 1,780 95,493 31,085 3,867 10,880 (409) (1,780) (3,394) 40,249 135,742 Funds not part of the Unapplied Total return Theo Murphy – Australia 2,774 2,774 113 2,887 Total Permanent endowments 96,487 1,780 98,267 31,085 3,867 10,993 (409) (1,780) (3,394) 40,249 138,629

Unapplied Transfers Unapplied total return application total return Total at Relevant Relevant at 1 April Investment of total at 31 31 March Expendable value b/f Indexation value c/f 2018 Income gain/(loss) Expenditure Indexation return March 2019 endowment funds £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 2019 £’000 General Trust Fund 10,646 202 10,848 4,111 454 1,125 (44) (202) – 5,444 16,292 Life Sciences Trust 6,507 124 6,631 2,451 276 683 (27) (124) (199) 3,060 9,691 Maths and Physical Sciences Trust 3,543 67 3,610 1,424 152 373 (15) (67) (178) 1,689 5,299 Other Expendable funds 7,840 149 7,989 1,614 290 722 (28) (149) (294) 2,155 10,144 Total expendable endowment funds 28,536 542 29,078 9,600 1,172 2,903 (114) (542) (671) 12,348 41,426

Indexation has been applied using the annual CPI rate to March. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 69 – 2019 2019 £’000 4,783 9,536 5,963 Carried 20,148 47,856 47,856 31,709 15,698 (11,581) 31 March 40,430 83,682 forward at – – – – 45 95 516 488 £’000 2,921 1,099 2,966 Transfers – (45) SCIENCE ISGLOBAL 174 (992) (488) (255) £’000 (2,668) (20,417) (19,554) (93,780) (90,369) Expenditure – – 581 670 237 207 760 646 (736) £’000 1,937 2,962 gain/(loss) Investment and actuarialand – – – 261 992 340 606 £’000 Income 14,727 89,728 16,325 90,329

– £’000 5,416 7,854 6,437 20,113 47,856 (11,019) 14,446 Brought 32,855 84,138 39,820 forward at 1 April 2018 Movements on Trust and specific fundsyear – Movements in Group continued on Trust 23 Purposes of funds the general benefit advanceof and for public,the including promote the to are objectsThe Trust Sciences the Life of technology) engineering medicine, and all community, into scientific the (science, studyresearch investigation and and of, in done be shall This the at interface science. other and science of between other sciences and areas life this area of areas particular supporting by scientists advancing working this matters the in all area, engagement such public in of to relating providing the and bestscience possible scientific science. to advicemaking those life information of policy and in area the the general benefit advanceof and for the objectsThe promote to are the Mathematics of Trust Physical and Sciences technology) engineeringpublic, medicine, and the including community, scientificthe (science, study investigation and of, mathematics the of at interface other areas and science physical all between and sciences into and this area research and particularin done be shall This supporting science. by of other areas scientists advancing working this in area, engagement providing the and best matters science the all possible such public in of scientific to relating to advicethose information and making policy mathematics of the in area physical and science. Following the Deed of retirement of the other trustees the property and investments of the RW Paul Instrument Fund transferredwere the to sole remaining trustee being the Royal Society. The application of the income from the portfolio is restricted the to provision of grants under the Paul Instrument Grants Scheme. The Theo Murphy Funds (in the UK and Australia) created were through a bequest from the estate of the late Theo further applied used be or to funds The “shall technologyMurphy. scientific discoveryscience, of medicine, in fields the Theo Murphy The Australia Australia in held carry is Fund used to is and engineering”. and out activities Australia in is and jurisdiction legal the separate to due accounting which it return in operates. total from excluded the objects general benefitThe advanceof and for public,the including promote scientificthe to the General of are Fund engineering technology) medicine, and the efficiencyeffectiveness community, and (science, Royal Society ofthe and its particular in done be Fellowship. shall This establishing, by promoting, supporting the maintaining, general and benefit for the the public and of scientific community, its activities, premises, fixtures and fittings, equipment, archives, librariesand general publications the and history science. of The Enterprise Fund was created by generous donations in support of the Society in making equity investments in innovative early-stage the in UK base elsewhere. and the from science businesses emerging Other Restricted Funds comprise monies received fund to separate restricted projects in line with ourcharitable activities individual separate as held accounts. funds our are in and The Revaluation Reserve the relates to revaluation of the heritage assets. Restricted funds Life Sciences Trust Enterprise Fund Enterprise Maths and Physical Sciences Trust Sciences Physical Maths and Unrestricted funds Fund Trust General Research and BEIS Science Other restricted funds Total restricted funds Total ReserveRevaluation Defined Benefit Pension Reserve Pension Benefit Defined General PurposeGeneral unrestricted funds Total 70 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Notes to the financial statements continued

23 Movements on Trust and specific funds in year – Group continued The Transfers between projects and funds include administration charges of the investments held in the trusts, administration costs reclaimed from projects where applicable, notional interest paid to projects in respect of income held during the year and any income released to the general reserves at the end of projects (where allowed under the gift or grant agreement). 24 Financial Commitments – Group and Charity At 31 March 2019 the Society had the following commitments: Total future minimum lease payments under a non-cancellable operating lease in respect of occupation of 6–9 Carlton House Terrace, London is as follows for each of the following periods: 2019 2018 £’000 £’000 Less than one year 490 490 One to five years 1,960 1,960 Over five years 19,600 20,090 Total 22,050 22,540

The lease is due to expire on 5 January 2064 however the next 10 yearly rent review is due on 5 January 2025. Agreements and commitments to fund research professorships /fellowships and other grants totalling £194,000,000 (2018: £160,800,000). Of these, £79,000,000 (2018: £49,000,000) are due in less than one year, and £115,000,000 (2018: £111,800,000) in between two and five years. There are no grants payable in more than 5 years. As the Society retains the discretion to terminate these grants they are treated as liabilities of future periods and will be financed by specific grants or other income receivable in those periods. The Society has entered into investment contract commitments totalling £489,000 (2018: £576,000) payable at dates yet to be agreed. 25 Pension obligations – Group and Charity The Royal Society (“the Employer”) operates a defined benefit pension arrangement in the UK called the Pension and Life Assurance Plan of the Royal Society (“the Plan”), with assets held in a separately administered fund. The Plan provides retirement benefits on the basis of members’ final salary. The Plan is closed to new members, although remains open to future benefit accrual, and provides benefits on a defined benefit basis. The most recent valuation of the Plan under FRS102 was carried out as at 31 March 2019. The valuation of the Plan used the projected unit method and was carried out by Barnett Waddingham LLP, professionally qualified actuaries. The FRS102 liability does not include any allowance for discretionary benefits. The Employer expects to make contributions to the Plan during the year to 31 March 2020 of around £1,110,000 (2019: £1,128,000). The Plan is subject to the Statutory Funding Objective under the Pensions Act 2004. A valuation of the Plan is carried out at least once every three years to determine whether the Statutory Funding Objective is met. As part of the process the Employer must agree with the trustees of the Scheme the contributions to be paid to address any shortfall against the Statutory Funding Objective and contributions to pay for future accrual of benefits. The full actuarial valuation at 1 January 2016 showed a decrease in the deficit from £4,744,000 to £3,716,000. It has been agreed with the Trustees that the Employer will pay £358,500 on or before each 30 April and 31 October in the years 2016 to 2021 inclusive to meet the deficit. The triennial valuation as at 1 January 2019 is currently in progress. Contributions payable by the Employer in respect of future benefit accrual and expenses are at the rate of 23.9% of Pensionable Salaries. Members’ contributions are 7% of Pensionable Salaries. Life cover and dependants’ pensions in respect of death in service are provided by additional insurance premiums. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 71 3.1 2.7 4.2 2.0 3.2 2.2 2.2 139 % pa 2018 2018 £’000 None 8,814 6,072 S2NA S2NA 20% of (11,019) 10,352 (57,241) 20,845 46,222 1.5% pa pension Value at 31 27.1 year s 31.1 year s CMI_2017 March 2018 March 29.0 years 29.2 years 29.2 with of LTR projections 3.3 2.0 4.2 3.2 2.5 2.3 2.3 134 % pa 2019 2019 £’000 None S2NA S2NA 5,423 9,956 10,166 20% of 47,499 21,820 (11,581) 1.5% pa (59,080) pension Value at 31 March 2019 March CMI_2018 30.6 years 30.6 26.6 years 28.4 years28.4 28.8 years with LTR ofwith LTR projections SCIENCE ISGLOBAL Pension obligations – Group and Charity continued Pensions in payment increase by the lesser of the annual increase in the retail price index or 5%. For service prior to 1 November 2001 this is subject to a minimum increase of 4%. Male currently aged 40 currently aged Male 40 currently aged Female 60 currently aged Male 60 currently aged Female Total marketTotal value of Plan assets Diversified growth Annuity policies liabilities scheme of value Present Equities The assets in the Plan were: * Under the mortality tables and projections adopted, the assumed future life expectancy at age 60 is as follows: Inflation (CPI) Inflation LDI Portfolio Cash liability pension Net Inflation Inflation (RPI) 25 liabilities include: Plan assumptions calculate Principal used to The Salary escalation Tax freeTax cash Increase to pensions in payment* – subject to LPI minimum 4% Increase to pensions in payment* subject – to LPI Statutory revaluation Withdrawals Discount rate (pre-and-post-retirement) rate Discount Pre-retirement mortality table mortalityPost-retirement table mortalityPost-retirement projection 72 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Notes to the financial statements continued

25 Pension obligations – Group and Charity continued Reconciliation of present value of scheme liabilities Value at 31 Value at 31 March 2019 March 2018 £’000 £’000 Defined benefit obligation at 1 April 57,241 55,126 Current service cost 449 484 Contributions by Plan participants 116 131 Past service cost 59 – Interest cost 1,522 1,526 Benefits paid (1,863) (1,369) Experience (gain)/loss on liabilities (161) 186 Changes to demographic assumptions (1,341) 649 Changes to financial assumptions 3,058 508 Defined benefit obligation at 31 March 59,080 57,241

Reconciliation of fair value of scheme assets Value at 31 Value at 31 March 2019 March 2018 £’000 £’000 Fair value of scheme assets at 1 April 46,222 45,053 Interest on assets 1,238 1,257 Contributions by the Employer 1,114 1,164 Contributions by Scheme participants 116 131 Benefits paid (1,863) (1,369) Administration costs (148) (266) Return on Plan assets less interest 820 252 Fair value of scheme assets at 31 March 47,499 46,222

The actual return on Plan assets in the year was £2,060,000 (2018: £1,510,000). Analysis of the amount charged to the statement of financial activities – operations Value at 31 Value at 31 March 2019 March 2018 £’000 £’000 Current service cost 449 484 Administration costs 148 266 Interest cost 1,522 1,526 Interest on assets (1,238) (1,257) Past service cost 59 – Total charge 940 1,019 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 73 186 649 508 (252) £’000 1,091

Value at 31 March 2018 March 736 (161) (820) £’000 3,058 3,058 (1,341) Value at 31 March 2019 March SCIENCE ISGLOBAL Pension obligations – Group and Charity continued Actuarial losses Losses/(gains) on scheme assets in excess of interest of assets excess scheme in on Losses/(gains) 25 Actuarial losses and gains Experience losses (gains) on liabilities on Experience (gains) losses Losses (gains) from changes to demographic assumptions demographic to changes from (gains) Losses assumptions financial to changes from (gains) Losses The Royal Society Royal The (“the Employer”) two operates the contributes Universities and schemes pension to Superannuation Scheme (USS). members of theTwo Society’s staff activeare members of USS, a defined benefit scheme (2018:three members). During the year ended 31 March 2019, employer contributions this to scheme totalled £110,000 (2018: £100,000). The employer contribution rates at the year end was 18% (2018: 18%). USS is a defined benefit scheme which is externally funded and valuedevery three years byprofessionally qualified independent actuaries the using Projected Unit Method. “last standing” a is man that scheme which means The scheme that another the member institutionin event insolvent becomes the other participating members funding any up will pick shortfall. At the date of the latest actuarial valuation of the scheme (31 March 2017), the assets sufficient were cover to 89% of the benefits that had accruedto members; the deficit at£7.5bn 31 (2016: March 2017 was £10.0bn). The triennial valuation as at 31 March 2018 is still pending. Based on expected contributions until 31 March 2031, the net present value of the payment towards the reduction of the deficit is estimated using the modeller developed by the British Universities Finance Directors Group (BUFDG), with the support of the USS trustee as a tool company, estimating for the liability under the recovery plan accounting for purposes. An initial liability £184,000 Activities Financial of of the Statement to charged was liability during 2015/16 a as recorded and on the balance sheet be to unwound over time (initially over the period 2031) to as the liability is discharged; 31 to March 2019, £33,000 of this provision has been released. Further information can be found at https://www.uss.co.uk 74 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Notes to the financial statements continued

26 Subsidiary undertakings The Society owns 100% of the £1 called-up and issued share capital of Royal Society Trading Limited 06967016. Royal Society Trading Limited company has been set up to process the activities that occur at Chicheley Hall. The Society also owns 100% of the £1 called-up and issued share capital of Royal Society (London) Ltd 08808518. Royal Society (London) Ltd company has been set up to process corporate sponsorships at the Society. Royal Society Royal Society Trading (London) Ltd Limited 2019 2018 2019 2018 £’000 £’000 £’000 £’000 Results for the year ended 31 March: Trading income Internal income – – 413 499 External income 127 – 1,797 1,562 Cost of sales – – (2,268) (2,245) Gross profit 127 – (58) (184) Administrative expenses (4) – (43) (30) Operating profit/(loss) 123 – (101) (214) Interest on loan account to parent – – (12) (12) Gift Aid payable to parent charity (123) – – – Result for the period – – (113) (226) Total funds brought forward at 1 April – – (812) (586) Total funds carried forward at 31 March – – (925) (812)

Balance Sheet as at 31 March: Current assets Stock – – 23 21 Debtors 30 – 231 125 Cash at bank and in hand 122 – 632 247 152 – 886 393 Creditors: amounts falling due within one year (152) – (1,811) (1,205) Net Current Liabilities – – (925) (812)

Capital and reserves Called up share capital – – – – Profit & loss reserve – – (925) (812) Shareholder’s funds – – (925) (812)

Royal Society (Australia) Pty Limited ACN 126112678 is the Trustee of the Royal Society Theo Murphy (Australia) Fund. It is an Australian company the shares of which are owned by the Society. STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 75 – 816 125 949 Total Total 2018 funds £’000 4,512 5,624 1,562 4,426 4,375 3,462 (1,091) (3,325) (3,600) (2,509) 76,114 16,139 11,446 11,446 71,257 97,283 87,560 98,333 101,658 289,666 293,266 – – – – – – – – – – – – – 378 378 506 funds £’000 1,786 4,361 2,575 2,953 2,953 (3,855) 127,572 127,572 127,066 Permanent endowment – – – – – – – – – – – – – SCIENCE ISGLOBAL 108 108 792 704 268 900 900 funds £’000 1,496 (1,228) 38,136 37,868 endowment Expendable – – 119 341 570 857 832 funds £’000 1,591 1,792 1,429 2,374 (4,951) (3,159) (1,634) (3,317) 61,166 81,551 75,122 81,210 42,979 75,692 15,384 39,820 78,234 Restricted 6 92 (40) 755 939 992 funds £’000 1,871 1,562 1,562 3,291 2,052 3,083 3,548 (1,091) (1,215) (3,415) (3,375) 84,138 11,868 19,621 10,876 10,091 16,073 16,246 85,353 Unrestricted 3 1 4 2 3 5 6 7 18 25 23 Notes Prior year comparison – Consolidated statement of financial activities financial of statement Consolidated – comparison year Prior

For the ended year 31 March 2018 (incorporating and expenditure an income account) 27 Other trading activities trading Other Income and endowments from donations and legacies and donations endowments from and Income activities charitable from Income Grants charitable activities for Income from investments from Income Trading in furtherance charitable in activities of Trading Other income Total income Total science in Supporting excellence recognising and Raising funds Raising activities charitable on Expenditure its and benefits science Promoting Providing scientific advice for policyfor advice scientific Providing cooperation global and Fostering international Education and public engagement public and Education Net (expenditure)/income for the year the for (expenditure)/income Net transfersGross between funds scheme pension benefit defined on Actuarial losses Total funds carried forward Total Net (expenditure)/income before net (losses)/gains on investments on (losses)/gains net before (expenditure)/income Net Net (losses)/gains on investments on (losses)/gains Net Total expenditure Total Total funds brought forward brought funds Total Net movement in funds in movement Net 76 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS

Notes to the financial statements continued

28 Prior year comparison – Analysis of net assets between funds – Group Expendable Permanent 2018 Unrestricted Restricted endowment endowment Total funds funds funds funds funds £’000 £’000 £’000 £’000 £’000 Funds balances at 31 March 2018 are represented by: Tangible fixed assets 14,305 – – – 14,305 Heritage assets 49,321 – – – 49,321 Investments 34,016 39,820 38,136 127,572 239,544 Net current liabilities (2,324) – – – (2,324) Creditors: Due after one year (161) – – – (161) Defined benefit pension scheme liability (11,019) – – – (11,019) Net assets 84,138 39,820 38,136 127,572 289,666 STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 77 – – 2018 £’000 5,416 2,774 2,774 7,854 7,854 9,454 9,454 6,437 8,959 4,967 Carried 20,113 20,113 38,136 84,138 14,571 14,571 47,856 47,856 47,856 11,640 11,640 14,756 14,038 15,277 29,652 14,446 69,272 69,272 39,820 25,442 29,202 (11,019) (11,019) 32,855 32,855 31 March 127,572 289,666 289,666 forward at 7 – – – – 14 14 91 10 10 48 (50) 174 174 251 166 273 257 273 257 223 704 349 487 204 204 (439) (439) (275) £’000 (1,131) 1,786 1,240 1,240 (1,091) (1,091) (1,703) (1,703) (1,634) gain/(loss) Investment and actuarialand – – – – – – – – – – – (91) SCIENCE ISGLOBAL 401 792 792 552 448 (176) (176) (125) (281) (105) (482) (275) (323) (275) (323) (525) (308) (506) £’000 1,792 3,291 2,890 2,890 (1,228) (3,855) (2,397) (2,397) Transfers – – – – (14) (43) (43) (44) (44) (44) (25) (26) (26) (36) (36) 145 145 (211) (211) (518) (561) (108) (217) (217) (378) (992) (992) (448) (506) £’000 (3,011) (2,943) (81,551) (19,621) ( 77,943) ( 77,943) (18,256) (18,256) (101,658) Expenditure 3 3 – – – – – – 116 412 212 761 271 271 341 341 160 223 783 349 223 992 992 333 363 363 208 609 900 £’000 1,645 1,645 2,953 Income 77,863 77,863 77,863 77,863 14,842 14,842 16,246 98,333 98,333 78,234 – – 2017 1 April £’000 7,551 9,771 8,914 8,914 9,771 3,213 3,213 6,270 4,865 9,406 9,406 25,115 31,674 11,377 11,377 47,856 47,856 37,868 14,201 19,387 14,683 19,387 42,979 14,292 14,292 13,980 Brought 15,209 33,369 85,353 33,369 28,884 68,995 68,995 (10,073) (10,073) 127,066 293,266 forward at Prior year comparison – Movements on Trust and specific funds comparisonyear – – Movements year Prior in Group on Trust Restricted funds Life Sciences Trust Maths and Physical Sciences Trust Sciences Physical Maths and Fund Enterprise Life Sciences Trust funds endowment expendable Total Maths and Physical Sciences Trust Sciences Physical Maths and Other Expendable Endowments Expendable endowment funds Expendable endowment Fund Trust General Other Restricted Funds restricted funds Total BEIS Science and Research and BEIS Science 29 Unrestricted funds Fund Trust General RW Paul Instrument Paul Fund RW Permanent endowment funds endowment Permanent Life Sciences Trust Maths and Physical Sciences Trust Sciences Physical Maths and Revaluation ReserveRevaluation Theo Murphy – Australia Total permanent endowment funds endowment permanent Total Fund Enterprise Defined Benefit Pension Reserve Pension Benefit Defined Theo Murphy – UK EndowmentsOther Permanent Other Expendable Endowments Other Restricted Funds Research and BEIS Science Theo Murphy – Australia RW Paul Instrument Paul Fund RW Total unrestricted funds Total forTotal all trusts Life Sciences Trust General PurposeGeneral Trust Sciences Physical Maths and Other Permanent EndowmentsOther Permanent Fund Trust General Revaluation ReserveRevaluation Theo Murphy – UK Defined Benefit Pension Reserve Pension Benefit Defined Total General PurposeGeneral SCIENCE IS GLOBAL 78

Reference and administrative details President Executive Director Sir Venki Ramakrishnan Dr Julie Maxton Treasurer Key Management Personnel Professor Andrew Hopper Andrew Allen, Interim Director of International Affairs Jennifer Cormack, Director of Development Physical Secretary Dr Claire Craig, Chief Science Policy Officer Professor Peter Bruce** Mary Daly, Chief Financial Officer Foreign Secretary Bill Hartnett, Director of Communications Professor Richard Catlow Linda Kelly, Director of Human Resources Dr Paul McDonald, Director of Grants Programmes Biological Secretary Lesley Miles, Chief Strategy Officer Sir John Skehel Dr Stuart Taylor, Director of Publishing Members of Council Dr David Walker, Executive Assistant to the Executive Professor Michael Ashfold** Director and Governance Officer Professor Keith Ball** Rapela Zaman, Director of International Affairs Professor Gillian Bates Statutory Auditor Professor Jean Beggs BDO LLP Dr Mariann Bienz 2 City Place Sir Leszek Borysiewicz Beehive Ring Road Sir Keith Burnett* Gatwick Professor Eleanor Campbell West Sussex Dr Christopher Dye** RH6 0PA Professor George Efstathiou* Professor Brian Foster* Bankers Professor Russell Foster The Royal Bank of Scotland Professor Chris Hawkesworth** 1 Princes Street Dame Sue Ion London Professor Thomas McLeish** EC2R 8BP Dame Bridget Ogilvie Investment Managers Professor Sheena Radford** Rathbone Brothers PLC Dame Carol Robinson* 1 Curzon Street Professor Maria Grazia Spillantini** London Professor Karen Steel W1J 5FB Professor Cheryll Tickle* Professor Ulrike Tillmann Internal Auditors Sir Richard Treisman* KPMG LLP Professor Simon White* 15 Canada Square Professor Julia Yeomans London

* Retired 30 November 2018 E14 5GL ** Appointed 30 November 2018 Registered Charity Number 207043 Audit Committee Chair Sir John Beddington Registered address 6-9 Carlton House Terrace London SW1Y 5AG

royalsociety.org Consultancy, design and production www.luminous.co.uk

Design and production www.luminous.co.uk The Royal Society is a self-governing Fellowship of many of the world’s most distinguished scientists drawn from all areas of science, engineering, and medicine. The Society’s fundamental purpose, as it has been since its foundation in 1660, is to recognise, promote, and support excellence in science and to encourage the development and use of science for the benefit of humanity.

The Society’s strategic priorities emphasise its commitment to the highest quality science, to curiosity-driven research, and to the development and use of science for the benefit of society. These priorities are: • Promoting excellence in science • Supporting international scientific collaboration • Demonstrating the importance of science to everyone.

For further information The Royal Society 6 – 9 Carlton House Terrace London SW1Y 5AG T +44 20 7451 2500 W royalsociety.org

Registered Charity No 207043 July 2019 DES6258