trustees’ report & accounts april 2009 – march 2010

8/6/2019 Trustees Report & Accounts April 2009 March 2010

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Trustees Report & Accounts

April 2009 March 2010


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In fulfillingourRoyal Charterfor the advancement of learning

anduseful knowledge,theSociety contributes to thesocial, cultural andeconomicwellbeingofScotland.


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R O Y A L S O C I E T Y O F E D I N B U R G H

Trustees Report&Accounts 20092010

Contents

Council of the RSE 2009 10 2

Trustees Annual Report

Structure, governance and management 3

Objectives and activities 4

Achievements in the year 5

Financial review and policies 9

Future plans 11

Independent Auditors Report to the Council of The Royal Society of Edinburgh 12

Accounts

Group statement of financial activities(incorporating the income and expenditure account) 13

Group balance sheet 14

RSE balance sheet 15

RSE statement of financial activities(incorporating the income and expenditure account) 16

Group cash flow statement 17

Notes to the financial statements 18

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The Trustees are the Council Members elected during the financial year(1 April 2009 to 31 March 2010)

Council

Until 5 October 2009 From 5 October 2009

President Lord WILSON of TILLYORN KT GCMG Lord WILSON of TILLYORN KT GCMG

Vice-Presidents Lord PATEL of DUNKELD Professor J D BEGGS CBE

Professor T S DURRANI OBE Professor T S DURRANI OBE

Professor Sir Tom McKILLOP Mr J F McCLELLAND CBE

Professor H L MacQUEEN Professor H L MacQUEEN

General Secretary Professor G S BOULTON OBE Professor G S BOULTON OBE

Treasurer Mr E BROWN CBE Mr E BROWN CBE

Fellowship Secretary Professor P H HOLMES OBE Professor P H HOLMES OBE

Councillors Sir John ARBUTHNOTT Sir John ARBUTHNOTT

Professor S BLACK OBE Professor A DOMINICZAK OBE

Dr I G HALLIDAY CBE Dr I G HALLIDAY CBE

Professor A McMAHON Professor S L MANNING

Professor C WHATLEY Professor R C CRAIG OBE

Executive BoardUntil 5 October 2009 From 5 October 2009

General Secretary and Chair Professor G S BOULTON OBE Professor G S BOULTON OBE

Treasurer Mr E BROWN CBE Mr E BROWN CBE

Curator Professor J D MACMILLAN Professor J D MACMILLAN

Research Awards Convener Professor Alan MILLER Professor Alan MILLER

International Convener Sir David EDWARD PC KCMG Sir David EDWARD PC KCMG

Programme Convener Professor D S INGRAM OBE Professor J S RICHARDSON

Young Peoples Programme Convener Professor M BOWNES OBE Professor M BOWNES OBE

Chair of RSE Scotland Foundation Professor Andrew MILLER CBE Professor J R COGGINS OBE

Education Committee Professor S A BROWN OBE

Chief Executive Dr W DUNCAN Dr W DUNCAN

Director of Finance Miss K F M ELLIS Miss K F M ELLIS

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Structure, governance and managementThe RSE Council, chaired by the President, comprisesthirteen Trustees, including four Vice-Presidents, the GeneralSecretary, the Treasurer, the Fellowship Secretary and fiveordinary members. Subject to annual re-election, Councilmembers serve for three years, except for the GeneralSecretary and Treasurer, who may serve for up to four years.

All are unpaid.

The Council is responsible for the strategic direction andpolicies of the RSE, and normally meets quarterly.

An Executive Board has delegated responsibility from theCouncil for delivery of the RSEs activities. It is chaired by

the General Secretary, and has as its elected members,the Treasurer, the Convenors of the main operationalcommittees and the Curator, as well as the Chair of theRSE Scotland Foundation and senior executive staff.

The Executive Board normally meets quarterly andreports to the Council.

The Council members and the office-bearers serving on theExecutive Board are all elected annually by the Fellowship ina postal ballot. New members of Council and the ExecutiveBoard are given an extensive induction through discussionswith the Chief Executive and senior staff.

Reporting to the Council through the Executive Board

are operational committees, including the EducationCommittee, International Committee, various Research

Awards Committees, the Meetings Committee and theYoung Peoples Committee. These Committees largely,but not exclusively, comprise Fellows of the RSE and areconcerned with the operational delivery of the RSEsvaried activities. All Fellows are actively encouraged toparticipate in the RSEs activities.

Two other charitable trusts founded by and closelyconnected to the RSE, the BP Research Fellowship

Trust (the BP Trust) and the RSE Scotland Foundation(the Foundation), are included in the consolidated accounts.

The Foundation plays a leading role in the RSEs public

outreach activities and manages the premises in GeorgeStreet. Its Trustees are appointed for three years bythe RSE Council.

Following a transfer of assets in 2009, the Foundation is alsoresponsible for managing the programme of activities insupport of research in Scotland, funded by the CaledonianResearch Fund.

The BP Trust was created following a donation of 2min 1988 from BP to support a scheme of post-doctoralresearch fellowships in specified subjects and which areawarded at the sole discretion of the RSE. The RSEPresident, General Secretary and Treasurer are the BP

Trustees, ex officiis.

Statement of Councils responsibilities

Under charities legislation applicable in Scotland, the Councilis required to prepare accounts for each financial year thatgive a true and fair view of the RSEs financial activities duringthe year and of its financial position at the end of the year.

The Council is responsible for preparing the annual reportand the financial statements in accordance with applicableLaw and United Kingdom Generally Accepted AccountingPractice (UK GAAP).

In preparing accounts giving a true and fair view, the Councilshould follow best practice and:

select suitable accounting policies and apply themconsistently;

make judgements and estimates that are reasonableand prudent;

state whether applicable accounting standards andstatements of recommended practice have been followed,subject to any departures disclosed and explained in theaccounts; and

prepare the accounts on a going concern basis unlessit is inappropriate to presume that the RSE will continuein operation.

The Council is responsible for keeping accounting records

which disclose with reasonable accuracy the financialposition of the RSE and which enable it to ensure that theaccounts comply with the Charities and Trustee Investment(Scotland) Act 2005, the Charities Accounts (Scotland)Regulations 2006 and the RSEs own Laws. It is alsoresponsible for safeguarding the assets of the RSE andhence for taking reasonable steps for the prevention anddetection of fraud and other irregularities.

Risk managementThe Audit and Risk Committee, operating on a joint basiswith the Foundation and the BP Trust, reports directly to theCouncil, the Foundation and the BP Trust. Its Chair, who

cannot be a Trustee or other Office Bearer of the RSE, isinvited to attend Council meetings as an observer. Its remitincludes keeping under review the effectiveness of internalcontrol and risk management systems of the RSE and itsconnected charities. The Council believes that the existingsystems and the structure of decision taking and reportingthrough senior staff, the Executive Board and the Councilcontinues to provide assurance that risks are properlyassessed and carefully managed.

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Trustees Report&Accounts 20092010Objectives and Activities

Mission and Role

In keeping with its Royal Charter, the mission of the RSE isto provide public benefit through the continued advancementof learning and useful knowledge. To fulfil this, it promoteslearning and puts the multidisciplinary expertise of its Fellowsto work for the good of Scotland and its people. Its role is to:

promote and recognise excellence in, and its applicationto, all areas of learning

be a source of independent and expert advice onmatters affecting the wellbeing of Scotland and itspeople

advance public discussion on matters of nationaland international importance

The difference the RSE aims to makeAll of the Societys activities aim to contribute to the followingpublic benefit outcomes:

increasing the number of world-class science andculture researchers working in Scotland

increasing Scotlands research and developmentconnections internationally

improving connections between business and academia

increasing the number of people in Scotlandwho adopt science as a career

enhancing the publics appreciation and understandingof science and culture issues

informing and influencing public policy decisions

Strategic Priorities

The Society seeks to make a difference through itsprogrammes of Core Public Benefit, Fellowship andSupport services. Overarching these are the followingstrategic priorities:

developing partnerships and connections with others

providing independent advice on major issues affectingpublic policy

developing arts and humanities activities and theirinterface with science

broadening public engagement diversifying funding sources

OverviewThis section describes the main achievements of RSE, theFoundation and the BP Trust, reflecting the fact that theFinancial Statements are presented on a consolidated basis.

Their Core Public Benefit programme activities are describedin more detail on pages 511, according to the outcomes towhich they contribute.

The highlights of the successful year and which are detailedin the report include:

Award of a further six Scottish GovernmentPersonal Research Fellowships, each of up to fiveyears length, also eligible for the Marie Curie COFUNDtravel funding awarded in 2008. There are now a totalof 14 Personal Research Fellows in post

The second year of the Phase III scheme ofEnterprise Fellowships resulting in 10 awards,including four to be held in 201011, from twenty-eightapplications received

Friends of the Society initiative initially with eightcorporate partners of the RSE

A series of 12 discussions and talks as partof the Edinburgh International Festival on the themeofThe Enlightenment

Launch of the independent Inquiry entitledFacingup toClimate Change in October 2009, commencingwith the gathering of evidence throughout Scotland

Visit of HRH The Duke of Edinburgh in August 2009to present the 2009 Royal Medals and theIEEE/Wolfson/ James Clerk Maxwell Award

Significant growth in the RSEs internationalactivities, including a visit in October 2009 from thenew US Ambassador to Britain as part of his first visit toScotland, and an increase in the number of internationalexchanges

Launch of the Business Innovation Forum inJanuary 2010 in the presence of Cabinet Secretary forFinance and Sustainable Growth, John Swinney

Celtic Cossack Connections project (supportedthrough our arts and humanities programme) resultedin public performances, in both Russia and Scotland,of the original version of Prokofievs opera War andPeace, attended by 7,000 people

A two-day programme of film, theatre and debateabout nuclear weapons, centred on Michael Frayns playCopenhagen

Performance MonitoringThe performance of the RSE and its connected charities,compared to the output targets set in the Operational Plan,is reported quarterly to the Executive Board, and to Counciland to the Trustees of the other connected bodies. As inprevious years, the overwhelming majority (>95%) of thetargets were reached or exceeded; those that were not,arose either through external factors or not being able tosecure or apply the necessary resources.

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Trustees Report&Accounts 20092010Achievements in the year

1 Increasing the number of world-class scienceand culture researchers working in Scotland

RSE Research Awards continued to support some of themost outstanding young scientists and innovators workingin Scotland today. The Research Fellowships AwardsProgramme seeks to enhance the capacity of world-classscience and culture researchers working in Scotland; andincrease Scotlands research and development connectionsinternationally. It creates conditions that attract those withoutstanding potential conducive to becoming researchleaders, to establish their careers in Scotland and makelong-term contributions to the Science, Technology,Engineering and Mathematics base and its application inScotland. All played their part in advancing the social andeconomic wellbeing of Scotland. It is only through valuable

partnerships with key bodies such as BP, the Lloyds TSBFoundation for Scotland and the Scottish Governmentthat we were able to provide these awards and we offerour sincere thanks to each of these partners, for theircontinuing support.

A Reception to announce the following awards made duringthe year, was held in September 2009 at the Royal Societyof Edinburgh:

one BP Personal Research Fellowship

six new Personal Research Fellowships, awardedfrom 65 applicants and started during the year

three new Support Research Fellowships, awarded

from 13 applicants nine Scottish Enterprise Enterprise Fellowships awarded

in calendar year 2009 and commencing in the financialyear

eight BBSRC Enterprise Fellowships

one Science & Technology Facilities Council EnterpriseFellowship

one Lloyds TSB Foundation for Scotland PersonalResearch Fellowship

eight CRF European Visiting Research Fellowshipsin Arts, Humanities & Social Sciences

ten Arts & Humanities Small Grants

five Arts & Humanities Research Workshops Cormack awards: one Undergraduate Prize, one

Postgraduate Prize and three Vacation ResearchScholarships plus one Piazzi Smyth Vacation Scholarship

six Lessells Travel Scholarships

The Scottish Government-funded Personal ResearchFellowship scheme offers six, five-year fellowships per yearand is the largest fellowship scheme administered by the RSEfor postdoctoral researchers. More than 84% of the ResearchFellows supported by RSE remain in research in Scotland and30% of them now hold professorships. They have alsolevered benefits for Scottish research. Since 2003, 4.6m ofgovernment grant supported fellowships has generated more

than 40m of further research funding. Through the RSEsrecent successful application to the Marie Curie COFUNDscheme under the EU Framework Programme 7, the RSE hasbeen awarded 0.9 million over four years to internationaliseits existing Research Fellowships and encourage greaterinternational mobility of researchers.

The Royal Medals of the Royal Society of Edinburgh areits most prestigious award, recognising outstandingresearch excellence and scholarship. The 2009 medalswere awarded, with the approval of Her Majesty TheQueen, to Sir James Mirrlees FBA HonFRSE, for hisoutstanding contribution to economic theory which hashad a global impact on economic development; ProfessorWilson Sibbett CBE FRS FRSE, for his outstandingcontribution to physics in Scotland and Scottish science,through his Chairmanship of the Scottish Science AdvisoryCommittee; and to Professor Karen Vousden CBE FRSFRSE, for her outstanding contribution to cancer research.

The Medals were presented by HRH The Duke ofEdinburgh at a ceremony at the Royal Society of Edinburgh.His Royal Highness also presented the IEEE / RSE /James

Clerk Maxwell Award to Professor AlbertoSangiovanni-Vicentelli FIEEE for his pioneeringinnovation and leadership in Electronic Design Automation.

2 Increasing Scotlands research and developmentconnections internationally

This programme seeks to increase Scotlands research anddevelopment connections internationally; and increase thenumber of world-class science and culture researchersworking in Scotland. It helps create conditions for talentedpeople to live, learn, visit, work and remain in Scotland;and supports Scotlands reputation as a distinctive globalidentity, an independent-minded and responsible nation athome and abroad and confident of its place in the world.

Since 2003, Scottish Government funding has supportedthe establishment of formal Memoranda of Understanding(MoUs) between the RSE and 11 overseas sister National

Academies, and also supported the development andmaintenance of relationships and activities with otheroverseas Academies. The programme comprises theBilateral and Open exchange schemes and also jointresearch projects, which run over two years betweenScottish and overseas Institutes (currently the NationalNatural Science Foundation of China (NSFC)), supportinglonger-term collaborations and levering further funding.

During the year, 50 Bilateral and 34 Open Exchange

Scheme grants were awarded, which amounted to 229.5person weeks of researcher support for visits betweenScotland and over 20 countries worldwide. Six new jointprojects with the NSFC were awarded for two years fromSpring 2010 in the area of Life Sciences and 11 existing

joint projects in management science, engineering andpublic policy, and biological sciences were supported intheir first and second years. Funding was also awardedfor a collaboration between the University of Stirling andthe Institute of Automation, The Chinese Academy ofSciences, to support a Scotland China Higher EducationResearch Partnership for PhD Studies in the area of

Telecommunications and Information Technologies.

In partnership with the American Consulate in Edinburgh, alecture was given in October by the new US Ambassador tothe UK, Louis B Susman, on his first official visit to Scotland,in which he praised the independent and adventurousspirit of Scotland and discussed the challenges facing theUS and Scotland.

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3 Improving connections between business

and academiaThe Enterprise Fellowship schemes are run by the RSE to

encourage commercialisation of technology-based business

ideas from academic institutions into spin-out companies.

This activity helps create sustainable companies with

high-value jobs and contributes to the economy in the long

term. The RSE administers three Enterprise Fellowship

Schemes, funded separately by Scottish Enterprise (SE),

the Science and Technology Facilities Council (STFC,

formerly PPARC) and the Biotechnology and Biological

Sciences Research Council (BBSRC).

The RSE/SE Enterprise Fellowships programme, whichaims to appoint 60 Fellowships over the next five years

has appointed 21 over the first two years. The third roundtook place in Spring 2009 and six Fellows were appointedand took up post in October 2009. The fourth round tookplace in Autumn 2009 and four Fellows were appointedwho took up post in Spring 2010.

Both of the Research Council schemes operate on a UK-wide basis and encourage the commercialisation of researchpreviously funded by BBSRC and STFC. The BBSRCscheme attracted an encouraging number of applicationsand, following a rigorous selection process, two BBSRCEnterprise Fellows took up post in April 2009, with anothersix taking up post in October 2009. One STFC EnterpriseFellowship awarded in June 2009 began in October 2009.

RSE Business Innovation Forum

In response to the Scottish Governments Science Strategy and its

Innovation Framework, the Society has also created a high level

Business Innovation Forum. Its remit includes trying to improve

research & development activity by Scotlands businesses. Its

findings will be presented to Scottish Ministers and be more widely

disseminated and discussed at events with others.

The Business Innovation Forum comprises 10 seniorbusiness people and academics. A reception to launch theForum was held in January 2010 in the Scottish Parliamentand was hosted by the Convener of the Cross-Party Groupon Science and Technology, with a keynote speech by the

Scottish Governments Cabinet Secretary for Finance andSustainable Growth. Over 100 people from government,parliament, business and academia attended this receptionthat also showcased some of the successful innovation andenterprise awards that the RSE has made in recent years.

Friends of the Society

The RSE has invited a number of chosen organisations tobecome Friends of the Society, with the aim of bringingbusiness and academia closer together. As well asparticipating in the launch of the Business Innovation Forum,key executives from these corporate partners have met withthe President and other office bearers, giving an opportunity

for wide-ranging discussions of topics of concern tobusiness. In 2009 10, the Friends of the Society were

Aegon UK, BP, Lloyds Banking Group, Royal Bank ofScotland, Scottish Enterprise, Scottish Power, Shell UKand the Wood Group.

4 Increasing the number of people in Scotlandwho adopt science as a career

The schools programme aims to enthuse school pupils acrossScotland with science and culture by using RSE Fellowsand other experts in the field to share their knowledge andunderstanding with pupils, with a particular focus on nurturingthose already engaged in science and culture, and pupils whoare not in close proximity to Scottish Universities and ScienceCentres, and who therefore have more limited opportunity toparticipate and meet with the experts.

The activities this year were held throughout the length andbreadth of Scotland and comprised 69 events 62 wereplanned. 3,022 school pupils attended 2,600 had beenforecast to attend. These were:

Two all-day Discussion Forums, Darwin 200 for S5 and

S6 students from 12 schools in East Kilbride andEdinburgh, with associated material distributed to allschools in Scotland via GLOW and the final Report.

Christmas Lecture Adapting to Climate Change oneadult and one schools lecture in Fort William.

32 interactive Start-up Science Masterclasses in universityvenues around Scotland for S1 and S2 pupils.

RSE@Schools 15 talks and one workshop on appliedscience and technology for S3, S5 and S6 pupils.

Languages in Scotlandevent (jointly with the Internationalprogramme) held at Oban High School. A public eventand two schools workshops.

SET Summer Camp 14 workshops.

Following the success last year of the RSE@ programme pilot Arbroath, it was decided to take this outreach programmeto Dumfries & Galloway in 2010 11. Plans were made andfunding sought and obtained during the year.

5 Enhancing the publics appreciation and

understanding of science and culture issues

(i) Events

The RSE planned and organised the delivery and promotionof a multidisciplinary programme of events aimed at a wide

variety of audiences. 37 events were attended by 5,667people the targets were 35 events attended by 5,000.More than 75% of the participants were first-time attendees.

four Conferences covering Science and Society topics

33 Lectures and Discussion Forums, including 12 lecturesas part of the Edinburgh International Festival

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Thirty-three Public Lectures and discussion forums

were attended by 5,207 people comprising:

Lectures

Meet Danny Airborne Initiative public lecture

MacCormick European Lecture: Todays EU:all passion spent

Science, drama and politics: The life of Sir Joseph Rotblat,nuclear physicist and peace campaigner

Gunning Victoria Jubilee Prize Lecture: Ripples from thedark side of the universe the search for gravitationalwaves

Malaria, Mosquitoes and Models

The Financial Sector after the Credit Crunch

Edinburgh International Book Festival Lecture:The Enlightenment the international influence

and impact of Scotland and the Scots

Henry Dryerre Prize Lecture: Making Eyes: lessonsfrom failed miracles

Believing in Change: Darwin, Lincoln, Obama

Edinburgh Lecture Series: Inching Towards Peace:A New International Humanitarian Order

Henslows legacy, Darwins Inheritance

Credit Crunch and Recession; What have we Learnt?

BP Prize Lecture: The Apocryphal Gospels Then

and NowEnvironmental Choices Lecture: The technology-policychallenges to address climate change and biodiversity loss

ECRR Peter Wilson Lecture: Energy

David Anderson Berry Medal Lecture: The importanceof being red

RAEng/ RSE Joint Lecture The simplicity and complexityof wind an engineers tale

Twelve Lectures as part of Edinburgh InternationalFestival 2009 The Enlightenment an 18th CenturyRevolution of thought

Visual Art and the Enlightenment

Scotland Exports the Enlightenment

Islam and the Enlightenment

The Ages of Optimism and Pessimism:Utopian and Dystopian Ideas

Science and Tolerance

Music and the Enlightenment:Classical and Vernacular Traditions

On the Dark Side: Witchcraft and the Theatre

Science and the Enlightenment

The Face of the Enlightenment

Moral Universals and Moral Progress:

The New Science of Good and EvilThe Enlightenment and the Academies

Political Economy: Adam Smith and Others

Discussion Forums

The Higgs boson: what, why, how?

Science, drama and politics: Copenhagen

Science, drama and politics: Operation Epsilon readingsfrom the Farm Hall transcripts

Science, drama and politics: The drama of nuclear physics

Four conferences were attended by 460 people:

Drugs of the Future for the Elderly.Personalised Medicines for the over-65s

Scottish Aquaculture A sustainable future, in partnershipwith Scottish Aquaculture Research Forum

Stem cells as therapy. Where have we been; where arewe now and where are we going (and how fast?) the CRFBiomedical Conference

Darwin and Lincoln on Race and Society, in partnershipwith the Institute for Advanced Studies, University ofEdinburgh

(ii) Communications

The RSE website provided information for the public andfor Fellows. Improvements are planned in 2010 to facilitateinteraction with the new computer database and updatethe design and ease of use. 35 written summary reports ofactivities in the public events and schools programme wereposted on the RSE website soon after the events had takenplace. 11 audio recordings of events were also madeavailable on the website. A printed report of the Darwin 200,Schools Discussion Forum was distributed to 279 schools.

Media briefings and press releases were provided for mostmajor events and launches, and there was appreciablemedia coverage of many of the activities in the RSEprogramme.

Four issues ofReSourcE, the RSE newsletter werepublished and distributed to the Fellowship and around2,000 others, including business leaders, journalists,research institutes, schools, MPs, MSPs and interestedindividuals.

Fellows also received a monthly e-bulletin, which enabledthem to keep up to date with and, where appropriate,disseminate information on the RSE and its work. Inaddition, four public e-bulletins were sent out during theyear via the Work with us website, to advertise variousevents and schools activities.

The eighth issue ofScience Scotland(on Life Science) waspublished in December 2009. Science Scotland aims topromote the excellence of Scottish research, particularly toan overseas audience, and the publication was distributedacross the UK and worldwide to more than 2,500 peopleand available on the Science Scotlandwebsite. TheScience Scotlandwebsite is being accessed by peoplein 70 countries and had 8,000 unique visitors last year.

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(iii) Journals

The RSE, through the Foundation, publishes two journals Earthand Environmental Science Transactions of the Royal Societyof Edinburgh and Proceedings A: Mathematics. Copies of thejournals are sent to 350 University Libraries, Academies andInstitutions world wide, as part of the Societys exchangeprogramme. The journals are highly regarded by academics aspublication vehicles for their research, and they both maintaineda respectably high impact factor in comparison with similarjournals in their fields.

Six issues ofProceedings A were published during the2009/10 year. Three issues of Transactions were published.

The Society signed a contract with Cambridge UniversityPress in 2009 for the digitisation of the RSEs journal archive

comprising Transactions 17851979; Transactions:Earth Sciences 1980 2000; Proceedings 18321940;Proceedings A: Mathematics 19411999; and ProceedingsB: Biological Sciences 19411994. It is hoped that thevolumes will be available online by the end of 2010, thusmaking the Societys highly regarded journal archive moreeasily accessible to a world-wide audience.

6 Informing and influencing public policy decisions

Key outputs of the RSEs Policy Advice unit were four briefingpapers on Scottish Parliament debates covering climatechange, energy, and influenza; 19 consultation responses,11 to the Scottish Parliament and/or the Scottish Government,seven to Westminster and one to the EU, on a range of topicsincluding: the Marine (Scotland) Bill; the Alcohol (Scotland) Bill;the Climate Change (Scotland) Act; the Scottish SentencingCouncil; and the Public Services Reform Act.

Oral evidence to Scottish Parliamentary Committees wasprovided on a range of subjects, including: the CriminalJustice and Licensing Bill; Future Reform of the EU Budget;the Treaty of Lisbon Inquiry; the Alcohol Bill; and the EfficientDelivery of Public Services. RSE Fellows also providedwitness evidence to the UK Parliamentary Committee onsetting Science and Technology Research Funding Priorities.

RSE Inquiry, Facing Up to Climate Change

In October 2009 the RSE launched a major inquiry, Facing up

to Climate Change. The Inquiry Committee is headed byclimate scientist Professor David Sugden, Professor ofGeography from the School of Geosciences at the Universityof Edinburgh and a world leader in ice sheets and globalclimate change. The RSE Inquiry seeks to raise awareness ofthe challenges ahead, both from global warming and from amove to a low carbon economy and identify how individuals,communities and industries can turn these challenges into apositive opportunity. During the year the Inquiry commencedgathering evidence and plans to report in early 2011.

Liaison with the Scottish Parliament, Westminsterand the European Parliament

The RSE continued to engage with politicians and policy

makers in all of the Parliaments of relevance to Scotland, onsubjects within the expertise of the Fellowship. Each PolicyAdvice Paper produced by the RSE was distributed to thosepolicy makers with a close interest in the subject, and whereappropriate, face-to-face briefings were arranged. The RSEalso offered expert witnesses to Parliamentary Committees.

The submissions made by the RSE on climate change wereinfluential in encouraging MSPs to set the challengingemission reduction targets in the Climate Change (Scotland)

Act. MSPs were receiving many recommendations over thisAct, but the intervention of the RSE from the work of anexpert team of scientists was significant in advising theScottish Parliament that an ambitious programme of emissionreductions was both achievable and recommended on thelatest scientific analysis.

RSE Education Committee

The RSE supported an Education Committee whosemembers contributed to the development of policy in relationto education in a number of ways, most specifically in relationto improving science education in schools. Members of thisCommittee were active members at the School Science

Summit and senior members engaged with the CabinetSecretary for Education & Lifelong Learning as well as withsenior officials from the same Directorate.

In partnership with the Royal Society of Chemistry, the RSEundertook a Chemistry exemplification project to supportCurriculum for Excellence implementation. This involved therecruitment of an enthusiastic chemistry teacher who hasbeen developing materials for use in the classroom. This isdue to conclude in late summer 2010 and the output will bemade available to teachers across Scotland.

The Fellowship Programme

The Societys Fellowship includes men and women from allparts of Scotland, the UK and overseas, and encompassesthe full range of disciplines, including science, engineering,social sciences, arts, humanities, law, education, businessand industry.

In March 2010, the Society announced the election of fivenew Corresponding Fellows, two Honorary fellows and 40new Ordinary Fellows. This followed the scrutiny in 2009 of182 candidates through a four-stage committee process,culminating in the postal ballot in December to the entireFellowship. The addition of new Fellows in 2010 brought thenumbers in the Fellowship up to 1527 65 Honorary Fellows;57 Corresponding Fellows and 1405 Ordinary Fellows.

The discipline balance of the Fellowship can be broadlyrepresented by four cognate sectors. In the OrdinaryFellowship the current balance of these sectors is 36.1%(Life Sciences Sector A), 36.6% (Physical, Engineeringand Informatic Sciences Sector B), 18.8% (Humanitiesand Creative Arts Sector C) and 8.5% (Social Sciences,Education and Public Service Sector D).

The Society holds an Induction Day each year for the newFellows. This provides an opportunity for new Fellows tomeet with members of Council, the Executive Board andRSE staff, and to be formally admitted to the Society.

There were also events primarily for Fellows, including the

New Fellows Admission Ceremony and Induction, the RoyalMedals Award Ceremony and the Annual Statutory Meeting.The Fellows Dining Club met four times in April, June,September and December.


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Trustees Report&Accounts 20092010RSE Scotland Foundation

In addition to the publication of the RSE Journals, the

Foundation successfully facilitated the dissemination of usefulknowledge through letting the conference facilities in George

Street. Income from this activity was higher than the previous

year. The Foundation was also responsible for letting surplus

space to tenants; rooms were occupied by Universities

Scotland, the Institute of Conservation (ICON) and Lakeland

Ltd. The income generated from these rentals supported

public benefit programmes.

Caledonian Research Fund (CRF)

On 11 March 2009 the Foundation received a transfer of

assets from the Caledonian Research Foundation. At the time

of the transfer the existing schemes of the CRF comprised:

Research Fellowships for younger academic staff

carrying out advanced work in the biomedical sciences

of Scottish higher education institutes.

European Visiting Fellowships to enable scholars of the

Arts and Letters from continental Europe to spend short

periods working in Scotland and vice-versa.

Postgraduate Scholarships for students undertaking

research leading to a PhD degree in Scotland.

An annual International Conference on aspects

of the biomedical sciences.

Under the transfer agreement the Trustees agreed to honour

the existing financial commitments of the CRF in support of

scientific research, and thereafter to apply the assets at their

discretion, with the proviso that they should have regard tothe existing activities of the CRF, but that this should not

place any restrictions on the purposes for which the assets

may be used.

The Trustees have determined that they intend to continue all

the existing schemes, but to take steps to bring into balance

the costs of the schemes and the income earned from the

investment portfolio.

Accordingly, in addition to the five postdoctoral research

fellows and six postgraduate students already holding

positions which conclude between July 2010 and

September 2011, one postdoctoral Fellowship and one

postgraduate studentship have been awarded during the

year. Other commitments made comprised three grants forEuropean Visiting Research Fellowships totalling 9,500 and

a Conference entitled Diabetes and obesity: getting to the

heart of the matter planned as a joint event with the

Academy of Medical Sciences.

All of the activities of the CRF are administered on behalf of

the Foundation by the RSE, except the administration of the

postgraduate Scholarship scheme which remains with the

Carnegie Trust for the Universities of Scotland.

Scottish Bioinformatics Forum

In January 2008, the Scottish Bioinformatics Forum (SBF)

began operating under the governance of the Foundation.

The SBF is funded by the Scottish Funding Council andScottish Enterprise, and has the objective of establishing

Scotland as a globally-recognised and leading location for

conducting cutting-edge bioinformatics research and

sustainable commercial activity. SBF performs an important

role in promoting bioinformatics as a key enabling technology

in Life Science research and development. Activities include

promoting training and knowledge transfer of bioinformatics

skills, including facilitating multi-centre collaborations,

industry and academic joint ventures, partnering, knowledgetransfer, and bioinformatics training.

During the year 2009, SBF held 17 events all aimed attraining and knowledge exchange, in various locationsacross Scotland. The flagship event was a successfulsummer school which attracted participants worldwide.

The two networks: the Next Generation SequencingNetwork and the Scottish Biosystems Modelling Networkwhich were created over two years ago, have been veryactive with new ventures and a regular increase in newattendees. SBF has also maintained a good relationshipwith the European Bioinformatics Institute, resulting inanother two very popular workshops and another

successful three-day workshop for the third year with thePrince Felipe Research Centre in Valencia, Spain.

BP Research Fellowship Trust

After discussion with BP, the Trustees of the BP Trustdecided at their annual meeting to improve theattractiveness and value of the postdoctoral fellowship byextending the duration to a maximum of five years. Thefellowship would be awarded in alternate years and in theintervening years a Hutton prize would be awarded forachievement in the physical sciences. Trevor Garlick,Director & VP Renewal at BP in Dyce, Aberdeen becamethe BP Observer to the Selection Panel for the postdoctoralfellowships. The contribution and support by BP for the BP

Research Fellowship is strongly valued by the RSE.

Financial Review and Policies

Investment powers and policy

The management of the investment funds of the RSE,the Foundation and the BP Research Fellowship Trust iscarried out by Speirs & Jeffrey Ltd on a discretionary basis.

The objectives set by the Council are first to ensurea sufficient level of income to meet the target set annuallyby the Council, and thereafter to invest for capital growth.

The Council has delegated the detailed monitoring ofperformance to an Investment Committee, which includesat least one ordinary member of Council and two

investment advisers and which makes comparisons againsta composite benchmark reflecting the mix of assets heldand the WM Charities Income Constrained Index.

The performance of the portfolios was as follows:

Income Actual Total BenchmarkTarget income return

3 years to 31 March 2010

000 000 % %

RSE 211 196 4.0 1.7

BP Trust 125 131 2.4 1.7

Foundation 315 305 * 1.7

* figure for CRF not available

The Investment Committee meets twice annually with theinvestment managers to discuss their compliance with thepolicies set by the Committee and the risk environment. Inthe year under review, no compliance issues arose whichrequired to be reported to the Committee.


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Operating policies grant making

The RSE makes grants to individuals in highereducation institutions in support of research activitiesin the categories of postdoctoral Research Fellowships,Support Research Fellowships, Post-graduateStudentships, undergraduate Vacation Scholarships,Enterprise Fellowships and international exchange grants.Each of these categories is specifically funded from varioussources, including the RSEs restricted funds. The basisof eligibility and selection varies according to the detailedscheme regulations, which are published on the RSEswebsite (www.royalsoced.org.uk). Grants are also made insupport of research activities of Fellows of the RSE, includingsupport for travel connected with research or scholarship,small scale specialist meetings, to assist research visitors toScotland to undertake collaborative research work with a

Fellow, to assist a visiting lecturer to come to Scotland, toassist research collaboration between two institutions inScotland or between universities and industry and to assist inthe publication of books written by Fellows. These grants arefunded by the RSEs designated Grants Fund. The GrantsCommittee is responsible for making awards in accordancewith the detailed rules set out by the Council of the RSE forthe disbursement of the Grants Fund.

Reserves policy and funds

The RSE holds a number of restricted funds resulting frombequests for particular purposes, details of which are setout in note 2 to the financial statements. The Council has

created designated funds, from its unrestricted funds, thepurposes of which are also set out in note 2 to the financialstatements. The General Fund represents the balance ofunrestricted funds arising from past operations. The Councilhas examined the requirement to hold unrestricted funds,and concluded that, whilst the present level of reservesgives adequate working capital for core costs, it would bedesirable to increase the General Fund reserve from sixmonths expenditure on central costs towards nine monthsexpenditure, or approximately 1.12 million. The current fundbalance is 762,000, before deduction of the FRS17pension reserve. The Council has also reviewed thepurposes and amounts of each of the designated funds andagreed that in future the designated funds should comprise

allocations for specific purposes of those sums that hadbeen donated, rather than generated from past surpluses,together with the Capital Asset Reserve.

Result for the year

The deficit of consolidated net incoming resources for theyear was 62,000, compared to the 39,000 underlyingsurplus, excluding non-recurring items, achieved last year.

The main reason was the use of capital to support ongoingexpenditure previously committed in the CRF and plannedexpenditure on computer systems taken from theDevelopment Fund.

Offsetting this were investment gains, comprising 0.34mrealised in the year and 2.87m unrealised at the year end.

The net movement on funds for the year after the FRS17actuarial adjustment was 2.54m.

Income and Expenditure

Total incoming resources

Total incoming resources were 5.29 m (2009 6.76m).On a like-for-like basis, excluding the major legacy in 2009(2.16m), total income increased by 15%. The increasearose mainly from increases in income received fromcharitable activities, of which the increase in funding for theEnterprise Fellowships and Scottish Government ResearchFellowships was the largest contribution.

Voluntary income (note 4) of 0.43m includes a final transferto the Foundations CRF fund from the winding up of theCaledonian Research Foundation and the first contributionsfrom the Friends of the Society corporate partnersof the RSE.

Incoming resources from charitable activities of 3.94m

increased by 16% from the 2008-09 level of 3.38m. Theincreases for research funded by the Scottish Governmentand in all the Enterprise Fellowship schemes were offset bydecreases as a result of the conclusion of a series of grantsfrom Lloyds TSB Foundation for Scotland and the Gannochy

Trust Innovation Award not being awarded in 2009.

Resources expended

Total resources expended increased by 15% (0.70m). Thisreflects the increased expenditure on grant-giving charitableactivities. Governance and costs of generating funds weresimilar to previous years.

Cost of generating funds (note 6) includes the cost of theFellowship office, the costs of building management as wellas fundraising costs, both direct and management time insecuring funding.

Overall, expenditure on charitable activities has increasedby 0.68m. Grants payable in support of research andinnovation made up the major part of this increase, risingfrom 2.67m to 3.64m. This reflected the increase inEnterprise Fellowships, both those funded by ScottishEnterprise and by the Research Councils, and the increasednumber of Scottish Government Research Fellowsappointed. Expenditure on international researchconnections and influencing public policy also increased,the latter due to an increase in staff resource. In 2009,expenditure included 0.21m on the James Clerk Maxwellstatue and this, and a small decrease in expenditure onpublic engagement, offset the other increases.

Governance costs, which have remained at a similar levelto previous years, represent around 2.9% of total income.

Transfers between funds shown in the Statement of FinancialActivities comprise the recurring transfer from the CapitalAsset Reserve of a total of 101,000 to match thedepreciation of buildings and the capital repayment of theloan to the Foundation; and a transfer on consolidation fromthe Foundation restricted fund balance to the General Fund,to reflect the actual RSE General Fund balance.

10




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14/40

Independent Auditors Report to theTrustees of the Royal Society of Edinburgh

We have audited the financial statements of The Royal Society of

Edinburgh (RSE) for the year ended 31 March 2010 which

comprise the group statement of financial activities, the charity

statement of financial activities, the group balance sheet, the

charity balance sheet, the cashflow statement and the related

notes. These financial statements have been prepared in

accordance with the accounting policies set out therein.

This report is made solely to the charitys Trustees, as a body, inaccordance with section 44 (1)(c) of the Charities and Trustee

Investment (Scotland) Act 2005 and regulation 10 of the Charities

Accounts (Scotland) Regulations 2006 and the Laws of the RSE.

Our audit work has been undertaken so that we might state to

the charitys Trustees those matters we are required to state to

them in an auditors report and for no other purpose. To the fullest

extent permitted by law, we do not accept or assume

responsibility to anyone other than the charity and its Trustees as

a body, for our audit work, for this report, or for the opinions we

have formed.

Respective responsibilities of trustees and auditors

The Trustees responsibilities for preparing the Trustees Annual

Report and the financial statements in accordance with

applicable law and United Kingdom Accounting Standards

(United Kingdom Generally Accepted Accounting Practice) are

set out in the Statement of Trustees Responsibilities.

We have been appointed as auditors under section 44(1)(c) of the

Charities and Trustee Investment (Scotland) Act 2005 and report

in accordance with regulations made under that Act. Our

responsibility is to audit the financial statements in accordance

with relevant legal and regulatory requirements and International

Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial

statements give a true and fair view and are properly prepared inaccordance with the Charities and Trustee Investment (Scotland)

Act 2005 and regulation 8 of the Charities Accounts (Scotland)

Regulations 2006.

We also report to you if, in our opinion, the information given in

the Trustees Annual Report is not consistent with the financial

statements, if the charity has not kept proper accounting records,

if the charitys financial statements are not in agreement with

these accounting records, or if we have not received all the

information and explanations we require for our audit.

We read the Trustees Annual Report and consider the

implications for our report if we become aware of any apparent

misstatements within it.

Basis of audit opinion

We conducted our audit in accordance with International

Standards on Auditing (UK and Ireland) issued by the Auditing

Practices Board. An audit includes examination, on a test basis,

of evidence relevant to the amounts and disclosures in the

financial statements. It also includes an assessment of the

significant estimates and judgments made by the Trustees in

the preparation of the financial statements and of whether the

accounting policies are appropriate to the charitys

circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the

information and explanations which we considered necessary inorder to provide us with sufficient evidence to give reasonable

assurance that the financial statements are free from material

misstatement, whether caused by fraud or other irregularity or

error. In forming our opinion we also evaluated the overall

adequacy of the presentation of information in the financial

statements.

Opinion

In our opinion:

the financial statements give a true and fair view, in accordance

with United Kingdom Generally Accepted Accounting Practice,

of the state of the groups and the charitys affairs as at 31March 2010 and of the groups and charitys incoming

resources and application of resources for the year then

ended; and

the financial statements have been properly prepared in

accordance with the Charities and Trustee Investment

(Scotland) Act 2005, regulation 8 of the Charities Accounts

(Scotland) Regulations 2006 and the Laws of the RSE.

Henderson LoggieChartered Accountants and Statutory Auditors

(Eligible to act as an auditorin terms of section 1212 of the Companies Act 2006).

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Group statement of financial activities(incorporating the income & expenditure account)

for year ended 31 March 2010

Note General Fund Designated Funds Restricted income Restricted funds 2010 Total 2009 Total

Income

Voluntary income 4 231,577 202,234433,811 2,615,665

Activities for generating income 4 258,362 258,362 256,030

Investment income 4 32,568 131,439 499,681 663,688 503,826

Incoming resources from generated funds 264,145 131,439 960,277 1,355,861 3,375,521

Incoming resources

from charitable activities 5 60,474 3,562,354 314,428 3,937,256 3,388,119

Total incoming resources 324,619 131,439 3,562,354 1,274,7055,293,117 6,763,640

Expenditure

Cost of generating funds 6 (188,083) (9,468) (70,387) (267,938) (252,372)

Charitable activities 6 (201,057) (104,807) (3,562,354) (1,065,190) (4,933,408) (4,245,512)

Governance 6 (114,751) (39,438) (154,189) (157,946)

Total resources expended (503,891) (114,275) (3,562,354) (1,175,015)(5,355,535) (4,655,830)

Net (outgoing)/incoming resources

before transfers (179,272) 17,164 99,690 (62,418) 2,107,810

Transfers between funds 197,824 (101,818) (96,006)

Other recognised gains/(losses)

Gains/(losses) on investment assets

Realised gains/(losses) 1,562 83,093 256,974 341,629 (101,176)

Unrealised gains/(losses) 10,848 576,923 2,285,521 2,873,292 (1,345,064)

Actuarial losses on

Lothian Pension Fund (607,000) (607,000) (212,000)

Net movement in funds (576,038) 575,362 2,546,179 2,545,503 449,570

Transfer of assets from the CRF 4 6,290,710

Net movement in funds after

transfer of assets (576,038) 575,362 2,546,179 2,545,503 6,740,280

Balance brought

forward at 1 April 2009 923,552 6,911,644 10,774,886 18,610,082 11,869,802

Balance carried forward at31 March 2010 347,514 7,487,006 13,321,065 21,155,585 18,610,082

13




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Group balance sheetat 31 March 2010

Note 2010 2010 2009 2009

Fixed assets

Tangible fixed assets 14 3,880,489 3,984,587

Fixed asset investments

Investments at market value 15 16,083,212 12,884,518

19,963,701 16,869,105

Current assets

Debtors 16 770,792 462,559

Cash at bank and in hand 310,904 372,913

Money Market deposits Designated funds 95,864 95,388

Money Market deposits Restricted funds 1,499,620 1,167,068

Money Market deposits General funds 636,180 687,790

3,313,360 2,785,718

Current liabilities

Creditors: amounts falling due within one year 17 (1,316,484) (553,513)

Net current assets 1,996,876 2,232,205

Total assets less current liabilities 21,960,577 19,101,310

Provision for liabilities and charges 18 (389,992) (630,228)

Net assets excluding pension fund 21,570,585 18,471,082

Lothian Pension Fund definedbenefit Scheme (liability) /asset 23 (415,000) 139,000

Net assets after pension fund (liability) /asset 21,155,585 18,610,082

Funds

General Fund 762,514 784,552

Add: Pension reserve (415,000) 139,000

19 347,514 923,552

Designated Funds 20 7,487,006 6,911,644

Restricted Funds 21 13,321,065 10,774,886

Total funds 21,155,585 18,610,082

The accounts were approved by the Council on 6 September 2010 and signed on its behalf by:

Ewan Brown, CBE

Treasurer

14


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RSE balance sheetat 31 March 2010

Note 2010 2010 2009 2009

Fixed assets

Tangible fixed assets 14 2,171,157 2,228,585

Fixed asset investments

Investments at market value 15(a) 5,242,639 4,214,788

Loan to RSE Scotland Foundation 15(b) 1,750,712 1,797,520

9,164,508 8,240,893

Current assets

Debtors 16 604,866 348,946

Cash at bank and in hand 195,667 224,400

Money Market deposits Designated funds 95,864 95,388

Money Market deposits Restricted funds 1,499,620 1,167,068

Money Market deposits General funds 636,180 687,790

3,032,197 2,523,592

Current liabilitiesCreditors: amounts falling due within one year 17 (1,709,422) (925,467)

Net current assets 1,322,775 1,598,125

Total assets less current liabilities 10,487,283 9,839,018

Provision for liabilities and charges 18 (389,992) (630,228)

Net assets excluding pension fund 10,097,291 9,208,790

Lothian Pension Funddefined benefit scheme (liability)/asset 23 (415,000) 139,000

Net assets after pension fund (liability) /asset 9,682,291 9,347,790

Funds

General Fund 762,514 784,552

Add: Pension reserve (415,000) 139,000

19 347,514 923,552

Designated Funds 20 7,487,006 6,911,644

Restricted Funds 21 1,847,771 1,512,594

Total funds 9,682,291 9,347,790

The accounts were approved by the Council on 6 September 2010 and signed on its behalf by:

Ewan Brown, CBE

Treasurer

15


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General Fund Designated Funds Restricted income Restricted funds 2010 Total 2009 Total

Income

Voluntary income 231,576 48,966280,542 2,487,761

Investment income 118,907 131,439 63,274 313,620 385,635

Incoming resources from generated funds 350,483 131,439 _ 112,240 594,162 2,873,396

Incoming resources

from charitable activities 70,142 4,052,633 4,122,775 3,399,204

Total incoming resources 420,625 131,439 4,052,633 112,2404,716,937 6,272,600

Expenditure

Cost of generating funds (188,083) (9,468) (197,551) (190,442)

Charitable activities (201,057) (104,807) (4,052,633) (91,687) (4,450,184) (3,815,434)

Governance (114,751) (114,751) (125,410)

Total resources expended (503,891) (114,275) (4,052,633) (91,687)(4,762,486) (4,131,286)

Net incoming/(outgoing) resources

before transfers (83,266) 17,164 20,553 (45,549) 2,141,314

Transfers between funds 101,818 (101,818)

Other recognised gains/(losses)

Gains/(losses) on investment assets

Realised gains/(losses) 1,562 83,093 39,610 124,265 (101,942)

Unrealised gains/(losses) 10,848 576,923 275,014 862,785 (837,223)

Actuarial gains (losses) on

Lothian Pension Fund (607,000) (607,000) (212,000)

Net movement in funds (576,038) 575,362 335,177 334,501 990,149

Balance brought

forward at 1 April 2009 923,552 6,911,644 1,512,594 9,347,790 8,357,641

Balance carried forward at

31 March 2010 347,514 7,487,006 1,847,771 9,682,291 9,347,790



RSE statement of financial activities(incorporating the income & expenditure account)

for year ended 31 March 2010

16


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17



Group cash flow statementfor the year ended 31 March 2010

2010 2010 2009 2009

Cash flow statement

Net cash outflow from operating activities (490,497) (364,340)

Returns on investments and servicing of finance:

Interest received 31,429 73,228

Dividends received 632,459 430,598

663,688 503,826

Capital expenditure and financial investment:

Purchase of tangible fixed assets (18,110) (37,328)

Proceeds from sale of investments 4,008,894 2,816,886

Purchases of investments (3,951,866) (2,790,704)

Capital receipt 157 190,560

39,075 179,414

Net cash flow before financing: 212,266 318,900

Appeal receipts 7,143 8,910

Increase in cash in the year 219,409 327,810

Reconciliation of net cash flow to movement in net funds

Increase in cash in the year 219,409 327,810

Net funds at beginning of year 2,323,159 1,995,349

Net funds at end of year (note 27) 2,542,568 2,323,159

Reconciliation of net movement in funds

to net cash outflow from operating activities

Net (outgoing)/ incoming resources before transfers (62,418) 8,398,520

Retirement benefit scheme current service cost 61,000 61,000

Retirement benefit scheme contributions (120,000) (94,000)Retirement benefit scheme finance cost 6,000 (26,000)

Appeal receipts (7,143) (8,910)

Dividends receivable (632,259) (430,598)

Interest receivable (31,429) (73,228)

Depreciation 122,208 120,299

Capital receipt in cash (157) (190,560)

Capital receipt in shares (40,801) (8,253,887)

Increase in debtors (308,233) (244,603)

Increase in creditors 762,971 99,676

Movement on provision for liabilities (240,236) 277,951

Net cash outflow from operating activities (490,497) (364,340)


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1 Accounting basis

The accounts have been drawn up to

comply with the provisions of the Charities &

Trustee Investment (Scotland) Act 2005 and

the Charities Accounts (Scotland) Regulations

2006, and follow the recommendations of the

Statement of Recommended Practice for

charities (SORP) approved by the Accounting

Standards Board in February 2005 and

applicable accounting standards. Theaccounts have been prepared under the

historical cost accounting rules as modified

to include the revaluation of investments.

The accounts comprise five primary financial

statements: the Group and RSE statement of

financial activities incorporating the income

and expenditure account, the Group and

RSE balance sheet and the Group cash flow

statement.

The consolidated financial statements include

the financial statements of the RSE and

of entities which are under its control: RSE

Scotland Foundation and BP ResearchFellowship Trust. As the objectives of each of

these entities are narrower than those of the

RSE, they have been treated as restricted

funds.

2 Funds

The RSEs funds are classified in accordance

with the definitions in SORP into Restricted

Funds, where there are restrictions placed by

a donor as to the use of income or capital,

Designated Funds where the Society has set

aside sums from its unrestricted funds for a

particular purpose and the General(unrestricted) Fund. The classifications made

are as follows:

General Fund

A discretionary Fund available to the Council

to meet the ordinary activities of the Society.

Designated Funds

Capital Asset Reserve Fund representing

the book cost of the buildings at

22-24 George Street and 26 George Street

together with the building project loan to the

RSE Scotland Foundation.

Development Appeal Fund to provide

development finance to implement the RSE

Strategic Framework.

Programme Fund a fund created to act as

a source of funding for meetings activities.

C H Kemball Fund income from this fund is

used to provide hospitality for distinguished

visitors from other learned societies and

Academies.

Dr James Heggie Fund income from this

fund supports the RSEs activities with

young people.

Grants Fund a fund created by contributions

and legacies from Fellows and used toprovide grants to support research activities

to Fellows.

Restricted Income Fund income funds

received for expenditure on current projects.

Restricted Funds

Robert Cormack Bequest to promote

astronomical knowledge and research

in Scotland.

Lessells Trust to fund scholarships abroad

for engineers.

Auber Bequest to fund research in Scotlandand England by naturalised British citizens

over 60 years of age.

Prizes Fund to fund various prizes.

Dryerre Fund to fund postgraduate

scholarships in medical or veterinary

physiology.

Fleck Bequest Fund to promote interest,

knowledge and appreciation of science and

its applications throughout Scotland.

Piazzi Smyth Legacy Fund to fund high

altitude astronomical research.

Sillitto Fund to promote interest in physics

among young people.

CASS Fund to fund academic / industrial

liaison.

Retailing Seminar Fund to fund a

programme of seminars on retailing.

Edinburgh Drug Absorption Foundation Fund

to fund a series of conferences on the broad

theme of Drugs Futures.

RSE Scotland Foundation a trust to

advance the education of the public inScotland in science, engineering and

technology, incorporating assets transferred

from the CRF. The CRF funds remain

restricted until pre-existing awards and

appointments are concluded.

BP Research Fellowship Trust a trust

to fund postdoctoral research fellowships

in Scotland.

3 Accounting policies

Incoming resources

Voluntary incomeSubscriptions are accounted for on the basis

of the subscription year to October 2010

and include income tax recoverable on the

subscriptions paid under Gift Aid.

Revenue grants are credited to income in

the period in which the RSE becomes entitled

to the resources.

Donations of a recurring nature from other

charitable foundations and one-off gifts and

legacies included in other income are taken

to revenue in the period to which they relate.

Investment incomeInterest and dividends are accounted for

in the year in which they are receivable.

Incoming resources for charitable activities

Incoming resources for activities are

accounted for on an accruals basis.



notes to the financial statements

18


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19

Publication income receivable in foreign

currencies is converted into sterling at rates

of exchange ruling at the date of receipt.

Incoming resources for research fellowships

are accounted for in the period in which the

RSE becomes entitled to the resources.

Income received for specific projects, and

received in advance of the commencement

of the project, is deferred. If the project were

not to proceed as planned, the RSE would

not be entitled to retain the funds. For

performance-related grants, where entitlement

to the incoming resource only arises with the

performance of the specific outputs agreed

under the contracts, income is deferred.

Resources expended

Expenditure and support costs

All resources expended are included on

an accruals basis, having regard to any

constructive obligations created by

multi-year grant commitments.

Where directly attributable, resources

expended are allocated to the relevant

functional category. Overhead and support

costs are allocated to functional category

on the basis of direct staff costs in each

area of activity.

Cost of generating funds

The cost of generating funds includes

expenditure incurred in supporting the

Fellowship and incurred on fundraising

and development initiatives.

Charitable activities

Grants payable are recognised as a liability

when the RSE is under an actual or

constructive obligation to make a transfer to

a third party. Where grants are time related

to future periods and are to be financed by

specific grants receivable in those future

periods, they are treated as liabilities of those

periods and not as liabilities at balance sheet

date. Such grants are disclosed as future

commitments.

Governance costs

Governance costs are those incurred in

connection with the management of RSE

assets, organisational administration and

compliance with constitutional and statutory

requirements.

Tangible fixed assets, depreciation

and repairs

The RSEs principal assets are its buildings in

George Street, Edinburgh. Under FRS15 the

Society depreciates the buildings assuming

a 50-year life. It is the policy of the Council to

maintain the buildings to a high standard. Any

permanent diminutions in value are reflected in

the statement of financial activities. Costs of

repairs and maintenance are charged against

revenue.

Expenditure incurred by the RSE Scotland

Foundation in the improvements to

26 George Street is being depreciated from the

date of completion of the refurbishment over

the period of the lease to the RSE Scotland

Foundation to 30 June 2047.

Minor equipment is charged against revenue

in the year of purchase. Computer and

audio-visual is depreciated on a straight line

basis over 320 years.

Investments

Investments are stated at their market value

at the balance sheet date. Gains and losses

on disposal and revaluation of investments

are charged or credited in the statement offinancial activities and allocated to funds in

accordance with their proportionate share

of the investment portfolio.

Pensions

The RSE participates in defined benefit

pension schemes which are externally funded.

The cost of providing pensions is allocated

over employees working lives with the RSE

and is included in staff costs.


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notes to the financial statements4 Incoming resources

Current year 2010 Voluntary income Activities for Investment Promotion of Other charitable Total 2010

generating income research and activitiesinnovation

Fellows 206,940 _ 206,940

Individuals 8,386 8,747 17,133

Legacies

Companies 16,250 33,262 49,512

Charitable trusts 48,966 22,383 52,315 123,664

Scottish Government 1,578,362 679,755 2,258,117

Public sector bodies 1,235,751 12,253 1,248,004

Bank interest 31,429 31,429

Dividends 195,853 195,853

RSE 280,542 227,282 2,836,496 786,332 4,130,652


-dividends and interest 131,224 131,224

RSE Scotland Foundation

grant re SBF 120,620 120,620

rental income 258,362 258,362

charitable activities 314,428 314,428

dividends and interest 305,182 305,182

401,162 258,362 663,688 2,836,496 1,100,760 5,260,468 Transfer of assets from the CRF 32,649 32,649

433,811 258,362 663,688 2,836,496 1,100,760 5,293,117

Voluntary income Activities for Investment Promotion of Other charitable Total 2009Prior year 2009 generating income research and activities

innovation

Fellows 196,615 196,615

Individuals 45,495 47,746 93,241

Legacies 2,158,734 2,158,734

Companies 30,894 30,894

Charitable trusts 86,918 518,937 182,318 788,173

Scottish Government 1,126,993 645,580 1,772,573

Public sector bodies 471,822 81,893 553,715

Bank interest 73,228 73,228

Dividends 224,197 224,197

RSE 2,487,762 297,425 2,117,752 988,431 5,891,370


-dividends and interest 152,304 152,304

RSE Scotland Foundation

grant re SBF 127,903 127,903

rental income 256,030 256,030

charitable activities 281,936 281,936 dividends and interest 54,097 54,097

2,615,665 256,030 503,826 2,117,752 1,270,367 6,763,640 Transfer of assets from the CRF 6,290,710 6,290,710

8,906,375 256,030 503,826 2,117,752 1,270,367 13,054,35020


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notes to the financial statements4 Incoming resources (continued)

4a Voluntary income

21

2010 2009

Contributions fromRSEFellows

Admission fees 11,200 12,320

Annual subscriptions 167,280 160,576

Income tax recoverable under Gift Aid 28,460 23,719

206,940 196,615

Lessells Trust additional receipt 8,008 12,160

Appeal receipts 7,143 8,910

Legacies 2,158,735

Fleck Trust transfer 40,958 Receipts for James Clerk Maxwell Statue 109,580

Friends of the Society corporate partners 16,250

Other income 1,243 1,762

280,542 2,487,762

In addition to the donations set out above, the RSE receives donations made specifically in support of activities which are included in activitiesincome (see note 26(b)).

5 Incoming resources from charitable activities2010 2009

Scottish Government Grant research fellowships 1,456,169 1,050,130

Scottish Government Grant arts & humanities awards 122,193 76,863

Franco-Scottish PhD scholarships 12,000

Caledonian Research Foundation 21,237

Scottish Enterprise 719,598 228,148

BBSRC Enterprise Fellowships 449,060 201,812

STFC Enterprise Fellowships 65,593 29,862

Lloyds TSB Foundation for Scotland 22,383 497,700

Scottish Crucible 1,500

2,836,496 2,117,752

Scottish Government Grant generating & communicating knowledge 372,358 372,161Scottish Government Grant International activities 307,398 273,419

Gannochy Trust 2,607 105,000

Scottish Funding Council 37,316

Meetings 41,457 102,652

Policy and advice income 33,672 73,577

IEEE / RSE / Wolfson James Clerk Maxwell Award 20,776 19,494

Educational activities 7,803 4,597

Sale of sundry publications 261 215

786,332 988,431

RSE Scotland Foundation Journal publications 148,165 134,390RSE Scotland Foundation Conference facilities letting 150,623 147,546RSE Scotland Foundation Science and society 15,640

314,428 281,936

3,937,256 3,388,119

Further information relating to grants, donations and receipts and their application is set out in note 26.


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notes to the financial statements6 Resources expended

2010 2009

Direct costs Support costs Total 2010 Direct costs Support costs Total 2009

(Note 12) (Note 12)

Costs of generating funds

Fundraising 2,893 106,903 109,796 49,863 34,199 84,062

Fellows subscriptions 78,286 78,286 100,842 100,842

Appeal donations 9,468 9,468 5,538 5,538

2,893 194,657 197,550 49,863 140,579 190,442

RSE Scotland FoundationBuilding management 70,032 70,032 61,592 61,592

BP Research Fellowship TrustInvestment fees 356 356 338 338

Total costs of generating funds 3,249 264,689 267,938 50,201 202,171 252,372

Charitable activities

Enhancing World-Class Research 2,132,356 277,395 2,409,751 1,914,665 276,830 2,191,495

Increasing International Research Connections 193,765 114,980 308,745 178,995 97,437 276,432

Improving Connections Between

Business and Academia 1,126,786 107,858 1,234,644 482,772 95,896 578,668Increasing Numbers Taking Science as a Career 8,865 46,928 55,793 12,757 60,553 73,310

Enhancing Public Appreciationof Science and Culture 128,357 239,151 367,508 165,680 227,887 393,567

Informing and Influencing Public Policy 40,667 179,065 219,732 53,644 125,327 178,971

3,630,796 965,377 4,596,173 2,808,513 883,930 3,692,443

RSE Scotland FoundationJournal Publications 86,602 36,181 122,783 95,594 32,390 127,984

James Clerk Maxwell Statue 1,247 1,247 208,586 208,586

SBF 105,620 15,000 120,620 112,903 15,000 127,903

Conference facilities letting 92,585 92,585 88,596 88,596

193,469 143,766 337,235 417,083 135,986 553,069

Total cost of charitable activities 3,824,265 1,109,143 4,933,408 3,225,596 1,019,916 4,245,512

Governance (note 11)

RSE 6,956 107,795 114,751 6,612 118,798 125,410

RSE Scotland Foundation 3,345 34,897 38,242 3,250 28,041 31,291

BP Research Fellowships Trust 1,196 1,196 1,245 1,245

Total governance costs 11,497 142,692 154,189 11,107 146,839 157,946

Resources expended 3,839,011 1,516,524 5,355,535 3,286,904 1,368,926 4,655,830

Central support costs as set out in note 12 have been allocated to activities in proportion to the employment cost in each area of activity.

22


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notes to the financial statements7 Grants payable

23

2010 2009

Promotion of research (note 8) 2,351,920 2,124,730

Prizes and grants 57,831 66,765

Promotion of Innovation (Note 9) 1,234,644 482,772

3,644,396 2,674,267

8 Increasing Numbers of World-Class Researchers

2010 2009

Promotion of Research 2,351,920 2,124,730

Scottish Government Fellowships 1,347,903 975,263

Marie Curie COFUND actions 1,240

Arts & Humanities Workshop Grants 106,428 71,582

Franco-Scottish PhD scholarships 12,000

CRF European Fellowships 21,881 17,364CRF Personal Fellowships 272,654

Lloyds TSB Foundation for Scotland Fellowships 476,925

Robert Cormack Bequest 4,901 4,610

John Moyes Lessells Scholarship 19,166 18,412

Auber Bequest Awards 3,000

Henry Dryerre Scholarship 19,543 19,340

1,795,476 1,596,736

Library 200

RSE 1,795,476 1,596,936

BP Research Fellowship Trust 198,728 171,082

RSE Scotland Foundation CRF 88,615 91,520

2,082,819 1,859,538

Support costs (note 6) 269,101 265,192

Prizes and Grants 49,537 55,127

Support costs (note 6) 8,294 11,638

57,831 66,638

2,409,751 2,191,495

An analysis of institutions and individual awards made under this expenditure heading is included in the Societys Review 2009,obtainable from the address on the back cover.


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notes to the financial statements9 Increasing connections between business and academia

2010 2009

Scottish Enterprise Fellowships 647,032 187,695

STFC Enterprise Fellowships 57,616 23,625

BRSRC Enterprise Fellowships 414,515 186,452

Gannochy Trust 7,623 85,000

1,126,786 482,772

Support costs (Note 6) 107,858 95,896

1,234,644 578,668

10 Enhancing public appreciation of science and culture

Meetings 79,621 115,308

Publications 48,736 50,372

128,357 165,680

Support costs (Note 6) 239,151 227,887

367,508 393,567

The RSE Scotland Foundation became publisher of the RSEs journals and year book with effect from the 1997 volumes. The RSE retainscopyright and incurs editorial costs in respect of these publications. The RSE has made a donation to the RSE Scotland Foundation equivalentto its net deficit on publications.

11 Governance

2010 2009

Management and secretariat 105,045 116,416

Audit fee 11,497 11,107

Other professional advice from auditors 2,750 2,382

119,292 129,905

RSE Scotland Foundation Management and secretariat 34,897 28,041

154,189 157,946

24


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notes to the financial statements12 Support costs

25

2010 2009

Salaries (note 13) 1,007,318 914,868

Staff training, agency and recruitment costs 37,522 38,918

Non-cash pension cost adjustments (FRS 17) (53,000) (59,000)

991,840 894,786Other costs

Establishment expenses 191,555 193,476Computer and equipment costs 107,875 29,119

Communication, stationery and printing costs 40,833 59,957

Travel and subsistence, hospitality 28,531

Publicity 18,793 17,923

Miscellaneous 1,209 8,992

Professional fees 13,680 22,543

Depreciation 122,208 120,299

524,684 474,140

Total central costs 1,516,524 1,368,926

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

13 EmployeesTotal 2010 Funded Funded by RSE Total

by Foundation 2010 2009

Wages and salaries 806,728 102,954 703,774 741,632

Social security costs 60,591 6,690 53,901 55,701

Other pension costs 139,999 19,103 120,896 117,535

1,007,318 128,747 878,571 914,868

The average number of employees of the RSE including those employed under joint contracts with the RSE Scotland Foundation was 29 (2009:28).

One member of staff earned over 60,000 per year and is a member of a defined benefit pension scheme.


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27

15 Fixed asset investments (continued)

(b) Loan by RSE to RSE Scotland Foundation 2010 2009

Due within one year 46,808 46,808

Due after one year 1,703,904 1,750,712

1,750,712 1,797,520

The loan bears interest at 4% per annum, capped at the amount of rent received by the Foundation and is repayable over the period

to 30 June 2047, the expiration of the lease of 26 George Street.

16 Debtors2010 2009

General debtors 563,664 309,874

Prepayments and accrued income 15,144 14,795

Income tax recoverable 26,058 24,277

RSE 604,866 348,946

RSE Scotland Foundation - Debtors 151,363 82,909

RSE Scotland Foundation - Prepayments 10,228 21,879

BP Research Fellowships Trust 4,335 8,825

Group 770,792 462,559

17 Creditors: Amounts falling due within one year

Group 2010 2009

General creditors 550,887 378,026

Accruals 61,713 69,535

VAT payable 34,131 18,098

University of Glasgow (note 22) 7,612 6,723

Deferred income 510,486 29,165

Event income deferred 47,130 30,000

Advance receipts Publications 104,525 21,966

1,316,484 553,513

Deferred income and advance receipts analysis

At 1 April 2009 Receivedin year Recognisedin year At31 March 2010

Marie Curie COFUND 444,518 444,518

Friends of the Society 24,250 (16,250) 8,000

Climate Change Inquiry 11,209 56,750 (12,485) 55,474

Chemistry Project 17,956 (15,462) 2,494

29,165 525,518 (44,197) 510,486

Journal receipts 21,966 230,724 (148,165) 104,525

Symposia income 30,000 30,744 (13,614) 47,130


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notes to the financial statements17 Creditors: Amounts falling due within one year (continued)

RSE 2010 2009

General creditors 483,950 367,036

RSE Scotland Foundation current account 660,244 492,543

Deferred income 510,486 29,165

University of Glasgow (note 22) 7,612 6,723

Symposia income deferred 47,130 30,000

1,709,422 925,467

18 Provision for liabilities and charges

Commitments for research fellowships

At 1 April 2009 Group & RSE

New commitments:

Lloyds TSB Foundation for Scotland Research Fellowships

Grants paid in the year (240,236)

At 31 March 2010

The provision represents amounts payable under a constructive obligation in respect of research fellowships due as follows:

2010-11 165,868; 2011-12 111,370; 2012-13 48,899

19 General Fund

At 1 April 2009

Net movement in funds for the year from statement of financial activities (576,038)

At 31 March 2010

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29

20 Designated Funds

At 1 April 2009 Investment Other income Expenditure Gains/ (Losses) Transfers At 31 March 2010

income

Capital Asset Reserve 3,997,926 (101,818) 3,896,108

Development Appeal Fund 2,143,228 95,160 477 (89,099) 479,578 2,629,344

Programme Fund 90,192 4,191 21,122 115,505

CH Kemball Fund 20,300 943 4,754 25,997

Grants Fund 478,376 22,229 (16,530) 112,030 596,105Dr James Heggie Fund 181,622 8,439 (8,646) 42,532 _ 223,947

6,911,644 130,962 477 (114,275) 660,016 (101,818) 7,487,006

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

21 Restricted Funds

At 1 April 2009 Investment Other income Expenditure Gains/ (Losses) Transfers At 31 March 2010

income

Robert Cormack Bequest 89,737 4,170 (5,882) 21,014 109,039

Lessells Trust 364,899 16,956 8,008 (26,087) 85,455 449,231

Auber Bequest 345,357 16,048 (9,550) 80,878 432,733

Prizes Fund 58,940 2,739 (5,568) 13,803 69,914

Dryerre Fund 405,855 18,859 (27,240) 95,046 492,520

Fleck 46,193 2,146 40,958 (876) 10,818 99,239

Piazzi Smyth 11,722 545 (941) 2,745 14,071

Sillitto 34,024 170 (148) 34,046

Others 20,772 965 (394) 4,865 26,208

trustees’ report & accounts april 2009 – march 2010

Documents