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Invest in future scientific leaders and in innovation Influence policymaking with the best scientific advice Invigorate science and mathematics education Increase access to the best science internationally Inspire an interest in the joy, wonder and excitement of scientific discovery Invest in future scientific leaders and in innovation Influence policymaking with the best scientific advice Invigorate science and mathematics education Increase access to the best science internationally Inspire an interest in the joy, wonder and excitement of scientific discovery Invest in future scientific leaders and in innovation Influence policymaking with the best scientific advice Invigorate TRUSTEES’ REPORT AND science and mathematics education Increase access to the best science internationally FINANCIAL STATEMENTS Inspire an interest in the joy, wonder and excitement of scientific discovery for the year ended 31 March 2007 TRUSTEES’ REPORT AND FINANCIAL STATEMENTS For the year ended 31 March 2007 CONTENTS Page Trustees’ Report 1-11 Report of the Independent Auditors to the Fellowship of the Royal Society 12 Report of the Audit Committee to Council on the Financial Statements 13 Statement of Financial Activities 14-15 Balance Sheet 16 Cash Flow Statement 17 Accounting Policies 18-19 Notes to the Financial Statements 20-33 Parliamentary Grant-in-Aid 35-38 i TRUSTEES’ REPORT For the year ended 31 March 2007 Registered Charity No 207043 Trustees The Trustees of the Society are the Members of its Council duly elected by its Fellows. Ten of the 21 members of Council retire each year in line with its Royal Charter. President Lord Rees of Ludlow OM Kt * Treasurer and Vice-President Biological Secretary and Vice-President Sir David Wallace CBE * Sir David Read * Physical Secretary and Vice-President Foreign Secretary and Vice-President Professor Martin Taylor * Dame Julia Higgins DBE a Professor Lorna Casselton b* Other Members of Council Dame Jocelyn Bell Burnell DBE c Professor David Lilley * Dr Mariann Bienz c Professor Georgina Mace CBE c Sir Michael Brady d* Professor Angus MacIntyre c Professor Caroline Dean OBE * Sir Tom McKillop d* Professor Eleanor Dodson c Professor Ole Petersen c Professor Athene Donald c Professor John Pethica c Professor Dianne Edwards * Professor Peter Ratcliffe * Professor Roderick Flower d* Professor Dale Sanders c Professor Uta Frith d* Professor John Shepherd * Professor Lynn Gladden OBE d* Professor Adrian Smith d* Sir Peter Knight * Dr Andrew Smith d* Professor Philip Kocienski * Professor James Stirling d* Lord Krebs of Wytham, Vice-President d* Changes The above served as Members of Council throughout the year unless indicated as below. a Foreign Secretary until 30 November 2006 b Foreign Secretary since 30 November 2006 c Other Members of Council until 30 November 2006 d Other Members of Council since 30 November 2006 * Members of Council at both 31 March 2007 and at the date of approval of this Report and Financial Statements Executive Secretary Mr Stephen Cox CVO Registered Address 6–9 Carlton House Terrace London SW1Y 5AG www.royalsoc.ac.uk The Royal Society Trustees' Report and Financial Statements for the year ended 31 March 2007 1 TRUSTEES’ REPORT For the year ended 31 March 2007 Auditors Investment Managers PKF (UK) LLP Rathbone Investment Management Ltd Chartered Accountants and Registered Auditors 159 New Bond Street Farringdon Place London 20 Farringdon Road W1S 2UD London EC1M 3AP UBS AG 1 Curzon Street Solicitors London Darbys W1J 5UB 52 New Hall Street Oxford Internal Auditors OX1 2QD Deloitte & Touche LLP Hill House Bankers 1 Little New Street Barclays Bank plc London Level 28 EC4A 3TR 1 Churchill Place London E14 5HP 2 The Royal Society TRUSTEES’ REPORT For the year ended 31 March 2007 The Royal Society of London for Improving Fellows elected to Council are amongst the world’s leading Natural Knowledge, commonly known as scientists and are well-qualified to provide the Society with the the Royal Society, is an independent necessary guidance and leadership to achieve its objectives. self-governing scientific academy founded in Council holds an annual seminar to ensure that its members have 1660 incorporated by Royal Charter and is a a wider understanding of their responsibilities and duties as Registered Charity. This report and the trustees of a charity. As many members of Council serve for only financial statements attached are presented one year, and others for two, it is not usually possible to provide in the format required by the Statement of extended training. Recommended Practice – Accounting and Reporting by Charities (revised 2005). Council is advised by a wide range of committees, the membership of which and their subcommittees is not always STRUCTURE, GOVERNANCE confined to Fellows. The Strategy and Policy Board, comprising AND MANAGEMENT the President, honorary officers and the Executive Secretary, is responsible for the recommendation to Council and oversight of Organization policy management. The Finance and General Purposes The Society is governed by a Council of Committee, comprising the same and other Fellows selected for 21 Fellows, who are also its trustees for their experience of financial matters, oversees the financial and charity purposes, including five honorary other operational systems and methods of control, including risk officers: President, Treasurer, two Secretaries analysis and management; ensuring the Society complies with all (one drawn from the physical sciences and financial aspects of the law, relevant regulations and good mathematics, and the other from the life practice. The Audit Committee reports direct to Council, reviews sciences) and a Foreign Secretary. Members the audited financial statements and recommends their approval of Council serve for various terms of between to Council, enquires into the Treasurer’s stewardship of Society one and five years. The Royal Charter requires assets, reviews reports from the external and internal auditors, that 10 of the 21 members of Council retire monitors management response thereto and implementation of each year. agreed recommendations. Other Committees advise Council on, amongst other things, the election of new Fellows, publishing The composition of Council comprises three and the administration of activity programmes including the categories of membership – the President award of grants etc. The Investment Advisory Committee, and other officers who hold office for one comprising Fellows and experienced investment professionals, year but are eligible for re-election annually advises the Treasurer on the performance of the investment and normally serve for five years one retiring managers and recommends objectives and benchmarks forming each year by rotation, one representative the basis of the Society’s investment policy. from each of 10 subject area classifications Fellowship who hold office for one year but are eligible for re-election for a second year and The Royal Society is a Fellowship of outstanding scientists drawn members elected to create a balanced and from all areas of science, engineering and medicine. Since its representative Council who also hold office foundation it has embodied and promoted knowledge of the for one year but are eligible for re-election natural world through observation and experiment. Through this for a second. approach – new in 1660 – which we now call science, Fellows of the Society have sought over the centuries to obtain a better All members of Council begin and end their understanding of ourselves and the world in which we live, and tenure on Council on Anniversary Day, which to make that knowledge widely available to benefit society. is 30 November – St. Andrew’s day. The Society’s mission is best described as being to expand the Suggestions for membership of Council are frontiers of knowledge by championing the development and use invited annually from the Fellowship. The of science, engineering and medicine for the benefit of humanity determination of vacancies and nomination and the good of the planet. Fellows of the Society are elected for of candidates is decided by Council in life and designate themselves through the use of the letters FRS accordance with its Standing Orders. after their names. Forty-four new Fellows and eight Foreign Nominees are confirmed by ballot of the Members are elected annually through a peer review process that Fellowship. All members of Council are culminates in a vote by existing Fellows. The main criterion for elected from the Fellowship. election is scientific excellence. Trustees' Report and Financial Statements for the year ended 31 March 2007 3 TRUSTEES’ REPORT For the year ended 31 March 2007 The election process for Fellows and Foreign Council has agreed clear lines of delegation and authority to Members is extremely rigorous and is based staff and has involved staff in recognition of risk in all its upon the established practice of peer review. activities. Council recognises the need to maintain the Society’s Although the identities of the candidates for independence and has approved an income strategy, connected election remain confidential, the identities of to the Society’s 350th anniversary in 2010, to increase its all members of committees involved in the endowment to address the potential risk to its independence election process, together with the full and to ensure the Society’s financial stability well into the regulations governing the process, are 21st century. published annually in the Year Book of the
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