**1**
Trustees’ report and financial statements for the year ended 31 March 2021
## **Science in a pandemic**
Adapting to the present and preparing for the future
THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE
**2**
**3**
## Contents **About us**
## **STRATEGIC REPORT**
About us 2
President’s foreword 6 Executive Director’s report 8 Public benefit statement 10
Our strategy at a glance 12
Where our income comes from and how we spend it 14
## STRATEGY IN ACTION
Promoting excellence in science 16 How researchers have responded to the pandemic 20
Supporting international scientific collaboration 22
Commonwealth science conference 2021 26
Demonstrating the importance of science to everyone 28 Pandemic policy response 32
## **GOVERNANCE**
People 34 Financial review 40
Principal risks and uncertainties 46 Governance 51
Statement of Trustees’ responsibilities 54 Independent auditor’s report 55
## **FINANCIAL STATEMENTS**
Consolidated statement of financial activities 58 Consolidated and charity balance sheet 59
Consolidated statement of cash flows 60 Accounting policies 61 Notes to the financial statements 66
**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 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.**
## Charity
As a registered charity, the Royal Society undertakes a range of activities that provide public benefit either directly or indirectly. These include providing financial support for scientists at various stages of their careers, funding programmes that advance understanding of our world, organising scientific conferences to foster discussion and collaboration, and publishing scientific journals.
## Fellowship
**The Society has three roles that are key to performing its purpose:**
As a fellowship of outstanding scientists embracing the entire scientific landscape, the Society recognises excellence and elects Fellows and Foreign Members from all over the world.
## National academy
As a national academy, the Society represents the UK and collaborates with international partners to advocate for science and its benefits. It provides authoritative and independent advice on matters of science that support the public good, including policies that promote excellent science and scientific issues that inform public policy.
Reference and administrative details 90 **Discover more online at: royalsociety.org**
**4 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS**
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **5**
## Our heritage
**1736** The Copley Medal is established **1693** from an endowment of £100 Edmond Halley FRS publishes his received from the estate of Sir Godfrey **1660** ‘Estimate of the degrees of the mortality Copley FRS in 1709. It is the world’s oldest The Royal Society is of mankind’, a pioneering contribution scientific honour, a prestigious forerunner founded, following a lecture to demography and actuarial science, of the Nobel Prize. by Christopher Wren. in _Philosophical Transactions_ .
**1673**
**1714**
Dutch microscopist Antoni van Leeuwenhoek FRS, the first person to observe microbes through a lens, writes to the Royal Society. His letter begins a 50-year correspondence vital in establishing the new discipline of microbiology.
A letter sent from Constantinople, written by Emanuel Timonius FRS and giving an early account of smallpox inoculation, is read to the Royal Society. The practice becomes widespread in Britain in the 1720s.
**1797**
Edward Jenner through a lens, writes to the Royal the Royal Society. The practice becomes FRS unveils a new Society. His letter begins a 50-year widespread in Britain in the 1720s. weapon in the fight correspondence vital in establishing against smallpox – the new discipline of microbiology. vaccination. It will eventually lead to **1904 1902 1851** the eradication of the The Tropical Diseases Committee Joseph Lister FRS, instrumental The UK Government disease in humans. of the Royal Society, originally in developing practical applications of awards the Society its intended to assist the Government germ theory, is awarded the Copley first annual Government in the study of malaria and Medal ‘in recognition of the value of grant of £1,000 to be its prevention, is extended to his physiological and pathological distributed for ‘private investigate all diseases prevalent researches in regard to their influence individual scientific in tropical regions. on the modern practice of surgery’. research’.
The Tropical Diseases Committee of the Royal Society, originally intended to assist the Government in the study of malaria and its prevention, is extended to investigate all diseases prevalent in tropical regions.
## At a glance
**£138.4m**
total expenditure, 4% increase from 2019/20
**300**
participants from 31 countries joined the first virtual Commonwealth Science Conference
Papers from our journals were downloaded over
**37m** times
**68,500**
people watched our COVID-19 themed online panel discussion, The race for a vaccine, with Professor Brian Cox
**1,083**
researchers currently supported by the Royal Society through its research fellowships
**62**
new Fellows and Foreign Members elected, including 14 women
**1941 1897**
The Royal Society’s Buchanan Medal is first awarded ‘in recognition of distinguished contribution to the medical sciences’. Sir Richard Doll FRS would go on to receive the medal in 1972 for his work in epidemiology and cancer prevention.
Howard Florey FRS, later President of the Royal Society, carries out the first clinical trials on penicillin. Four years later, he shares the Nobel Prize in Physiology or Medicine with Ernst Chain and **1947** Alexander Fleming. Two years after the election of the first women to **1964** the Royal Society, Muriel Robertson Royal Society Wolfson Research becomes a Fellow Professor Dorothy Hodgkin FRS for her contributions becomes the UK’s only female Nobel to protozoology Prize-winning scientist. She used X-ray and immunology, crystallography to solve the structure including important of penicillin. research into the life cycles of **1983** trypanosomes.
**2011**
The Society publishes _Open Biology_ , its first fully open access journal.
**1983 LOOKING FORWARD: 2022**
The Royal Society University Research Fellowships are established to create opportunities for early career scientists with UK universities.
The Royal Society will continue to promote science and its benefits through its roles as a charity, Fellowship and National Academy.
**45%** of published papers were open access
The Society’s videos in partnership with _BBC Ideas_ received more than **500,000**
views on the BBC website and our social channels
**873**
downloads of our _Nuclear cogeneration_ report
**223**
staff organised into programmes, services and trading sections
THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **7**
**6**
## **President’s foreword**
The spectacular success in developing such effective vaccines, at speed, has been a testament to the strength of the UK science base.”
“ Scientists have also played a crucial part in helping public understanding of the pandemic through public events and media work.”
I became President of the Royal Society in a year when the role of science in society has come into sharp focus. The pandemic has had terrible consequences in the UK and across the globe but it would have been worse were it not for the scientists who have done so much to understand COVID-19 and how to tackle it, and ultimately to produce effective vaccines. Many Fellows of the Royal Society and people funded by the Society have been involved in that work.
the sharing of information among scientists, feeding the spectacular level of international cooperation and collaboration.
the sharing of information among the modelling community, shaped scientists, feeding the spectacular the debate on face coverings and the level of international cooperation reopening of schools and provided and collaboration. reviews of the evidence on issues such as herd immunity and the The Society also convened a genetics of the virus. number of expert groups to help provide the evidence and the The spectacular success in assessment of that evidence that developing such effective vaccines, has been central to policy-making. at speed, has been a testament to The independence of that advice, the strength of the UK science base presented in an open manner and and international collaboration. We fully recognising the uncertainty have also seen that in improvements involved in science and in particular in treatments and our ability to in the science of a virus that no one sequence genomes and identify had ever heard of two years ago, has variants. None of this happened by been core to the Society’s work over accident – it has been the result of the last year. decades of investment in people,
The spectacular success in developing such effective vaccines, at speed, has been a testament to the strength of the UK science base and international collaboration. We have also seen that in improvements in treatments and our ability to sequence genomes and identify variants. None of this happened by accident – it has been the result of decades of investment in people, ideas and facilities. That is why the Royal Society has continued to press for increased investment in science.
Some of those scientists have also played a crucial part in helping public understanding of the pandemic through public events and media work. The Royal Society’s peer-reviewed journals have helped
Among a wide range of contributions, these expert groups have supported
The past year has been difficult for those holding the public purse. However, the Government has remained committed to increasing funding in research, declaring the intention to ensure the UK is a global scientific superpower. That has seen a commitment to increase investment in research to £22 billion a year by 2025, meeting the Royal Society’s call to increase investment to 2.4% of GDP as a step towards reaching a target of 3%.
grants, including our Future Leaders – African Independent Research (FLAIR) programme. These cuts, which will impact the Society in 2021/22, have damaged the UK’s reputation as an international partner.
continued to recognise and support excellence in science; support international scientific collaboration; and demonstrate the importance of science to everyone. I am immensely proud of all that has been achieved in these difficult circumstances.
The first year of my Presidency is also the last year of the Society’s Strategic Plan for 2017 – 2022. Over the coming year we will not only be reflecting on the many successes over recent years but also looking forward to shaping a new path for the Society. A lot has changed over the past year and science has never been more central to the public consciousness. Science has delivered a huge amount but there is more to come as we build back after the pandemic. Challenges such as tackling climate change and the loss of biodiversity lie ahead and the science community and the Royal Society will once again have a huge role to play in finding solutions.
A lack of diversity in the scientific workforce is another issue the Society has looked at this year by commissioning reports to examine racial inequalities in higher education and career progression in science, technology, engineering and maths. The data revealed that people from Black backgrounds have poorer degree outcomes and lower rates of career progression than other ethnic groups. They are more likely to drop out of university, more likely to get lower grades and more likely to drop out at all stages of career progression.
Another goal of the Society was also achieved this year when, as part of the Brexit agreement announced on Christmas Eve, the Government committed to the UK associating to the EU research funding programme, Horizon Europe. The past year has highlighted the benefits of international scientific cooperation, and with science and innovation at the heart of rebuilding after the pandemic we need to be working together with European partners.
These differences are unacceptable and the Society will be bringing together people from across the higher education sector, science funders and diversity and inclusion groups to step up action to redress these inequalities.
While this news showed a clear commitment to supporting international collaboration, there were also setbacks, the largest of which was devastating cuts to the UK’s Official Development Assistance. This cut future funding for international research by around £400m, including a 70% reduction to the Royal Society’s international
**Sir Adrian Smith**
Like many organisations the past year has presented many challenges for the Royal Society. In this report you will see all of the work that has been carried out, despite having to close our building and have everyone working remotely. We have
President of the Royal Society
Science has delivered a huge amount but there is more to come as we build back after the pandemic.”
THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **9**
**8**
## **Executive Director’s report**
A large part of our work has been dedicated to supporting the response to the pandemic.”
“ As a Society we have been able to adapt and change in order to continue with much of what we do from home.”
new Fellows and Foreign Members. Four of this year’s Nobel Prize winners have links to the Society, and you can find out more on page 18.
scientific topics relevant to the pandemic. You can read more about the work of these groups on page 32.
This year has been marked by the severe disruption caused by the global pandemic, but has nevertheless been a busy and productive one for us. As a Society we have been able to adapt and change in order to continue with much of what we do from home. This has been a challenge, but one we have met thanks to our staff, who have been critical in ensuring a smooth transition to virtual working.
we have been able to adapt and One of our key areas of work change in order to continue with continues to be our Grants much of what we do from home. programme. In the past financial This has been a challenge, but year the Society increased its grant one we have met thanks to our expenditure by 12% to more than staff, who have been critical in £115 million. The Society supported ensuring a smooth transition to over 1,000 researchers, along virtual working. with hundreds of PhD students, postdoctoral research assistants and A large part of our work has technicians. Important, too, is our been dedicated to supporting Entrepreneurs in Residence scheme, the response to the pandemic. linking universities with industry. We used our convening power to establish three independent groups We continue to elect exceptional to draw on expertise and respond scientists to the Fellowship with 14 to requests for rapid advice on women in this year’s intake of 62
Many of our Fellows and researchers have been working on areas linked to the pandemic, and you can read the details of their work on page 20.
We are continuing to make the transition to a sustainable open access publishing model for our journals, and our papers were downloaded over 37 million times during the past year.
The international nature of science runs through much of what we do. This year we hosted our first ever
virtual Commonwealth Science Conference, which saw attendees from 31 countries come together to explore how science can help the world build resilience in the face of global environmental crises. The conference helped to build new links between early career researchers and influence the Commonwealth policy agenda. You can read about it in more detail on page 26.
We also continued our international collaboration on the regulation of heritable human genome editing.
This year our scientific meetings programme has also been adapted to take account of the global pandemic and has continued virtually.
Alongside our pandemic response we have continued to increase scientific advice for policy-makers this year with, for example, a report on animate materials and other key reports focusing on climate change and biodiversity. We launched reports on digital technology and the planet, green ammonia and nuclear cogeneration, and a series of essays on biodiversity. This work is crucial to informing pathways to meeting the UK’s commitment to net zero emissions by 2050 and to the UK providing leadership on climate change. We have also had 32 schools join our Tomorrow’s Climate Scientists programme.
We have had two excellent winners in our book prizes. This year’s Royal Society Insight Investment Book Prize was awarded to postdoctoral scientist and debut author Dr Camilla Pang for _Explaining Humans: What Science Can Teach Us About Life_ . More than 13,000 young judges selected Izzi Howell’s _Cats react to Science Facts_ as the Young People’s Book Prize winner.
With so many of our events moving online we were pleased to be able to evolve our Summer Science Exhibition into a virtual event this year. One highlight was the Big Summer Science Online Quiz, in which more than 2,600 people took part on the day.
We also ran a series of COVIDthemed online events which proved very popular with our audiences on social media and featured subjects such as communicating statistics in the time of COVID and the race for a COVID vaccine.
Our archives were key during this year’s Black History Month in October. We launched a new online exhibition with Google Arts and Culture, _A Celebration of Black Science_ , which explores the scientific contributions and achievements of people of African and AfricanCaribbean descent, drawing on the Royal Society archives.
We could never have foreseen how much the Society would have to change over the course of this year, but I am pleased with the way that we have adapted to the challenges and been able to continue with so much of our core work, albeit remotely.
As we look ahead to 2021, the Society will continue to play its part in supporting excellence in science and also maintaining and developing its international reach. It will seek to influence agendas on net zero and biodiversity at the G7 and COP26 meetings, both of which are to be held in the UK.
**Dr Julie Maxton**
Executive Director of the Royal Society
## **Our strategic plan**
## **Promoting excellence in science**
The Society’s aim is to harness the expertise of its Fellowship to ensure that excellence in science is recognised and supported and that scientific work is of the highest quality.
**Read more on page 16.**
## **Supporting international scientific collaboration**
Science is an inherently international activity. The Society’s aim is to reinforce the importance of science to build partnerships between nations and to promote international relations and science’s role in culture and society.
**Read more on page 22.**
## **Demonstrating the importance of science to everyone**
Science is influenced by culture and other developments in society, just as scientific thinking and innovation influence how people live their lives. It is important that the Society engages with different groups in society and with the public in general to find out about their experiences, to listen to their views and to make science part of wider conversation.
**Read more on page 28.**
**10** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **11**
## **Public benefit statement**
The Society’s mission is to recognise, promote and support excellence in science and to encourage the development and use of science for the benefit of humanity. Research and innovation advance our economic, social and cultural well-being, provide health benefits and are key to sustainable long-term economic growth. The Society is concerned with excellent science, wherever and by whomever it is done, and is committed to increasing diversity in science, technology, engineering and mathematics (STEM).
**The Society has a number of attributes that help to further its mission:**
**The activities that the Society undertakes to promote science and its benefits, for the ultimate benefit of humanity, include:**
- the expertise of its Fellowship, which includes world leaders across all scientific fields;
- recognising scientific excellence;
- the breadth of its scientific disciplines; this removes • providing financial support for barriers and enables leading scientists at various stages scientists in different fields to of their careers in the UK and come together; internationally;
- its independence from Government and other organisations allows the Society to provide science advice that is unfettered by other interests;
- funding programmes and research that advance understanding of our world;
- organising discussion meetings to advance scientific collaboration and discovery;
The Society furthers its mission through its three key roles: as a fellowship of the world’s most eminent scientists; as the UK national academy of science; and as a registered charity.
- its ability to convene groups of individuals in key roles and with relevant expertise to address major issues in science and wider society; and
- providing expert scientific advice to policy-makers;
- promoting excellence in the teaching of STEM subjects and supporting teachers to be part of the scientific community;
- its history and the successes of the Society’s Fellows act as a source of inspiration for what science can achieve.
- promoting the importance of science internationally; and
- staging programmes to engage the public with science.
**Above:** A lab at Liverpool School of Tropical Medicine, carrying out experiments on SARS CoV-2 samples – the virus that causes COVID-19. The lab is now a focal point for COVID-19 research and includes looking at how wastewater, including sewage, can be used as an early warning system to spot outbreaks.
THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE
**12**
**13**
## **Our strategy at a glance**
## **Our mission Strategic priorities**
## **To promote Promoting excellence science and in science its benefits.** • Elect exceptional scientists to the Fellowship.
- Elect exceptional scientists to the Fellowship.
- Advise on the research landscape.
- Demonstrate the economic impact of science investment.
Read more **Our motto** on pages 16 – 19. **Nullius in verba – take nobody’s word for it.**
- Fund outstanding researchers.
- Recognise scientific achievements.
- Encourage and support innovation.
- Publish scientific research.
## **Our principles**
**Independence**
**Integrity**
## **Supporting international scientific collaboration**
**Diversity and inclusion**
- Proactive engagement on major issues.
**Collaboration**
- Address global challenges.
- Partner with leading scientific nations on new technologies.
**Inspiration**
- Implement Commonwealth programmes.
Read more on pages 22 – 25.
- Convene leading international meetings to advance science.
## **Our roles**
**Charity**
**Fellowship**
**National academy**
## **Demonstrating the importance of science to everyone**
- Increase scientific advice for policy-makers.
- New programme of public dialogue and engagement.
- Integrate science into public debate and culture.
Read more • Promote the value of STEM education. on pages 28 – 31. • Inspire through historic collections.
- Promote the value of STEM education.
## **What have we achieved?**
- Increased spending on grants from £102.5 to £115.1 million and increased international collaborations.
- Shown the value of science investment, with the Government’s budget for research and development increasing to £14.6 billion next year.
- Prioritised participation in science through the publication of two diversity reports using data to highlight inequalities in STEM.
- Delivered scientific events remotely, despite the pandemic.
- Implemented rapid peer review for COVID-19 research papers and made them immediately open access.
- Increased engagement with industry through our Entrepreneurs in Residence (EiR) scheme.
## **What have we achieved?**
- Delivered the first virtual Commonwealth Science Conference with over 300 participants from 31 countries.
- Campaigned for the UK Government to associate to the EU’s Horizon Europe programme and called for confirmation on funding.
- Launched an official values statement on academic freedom.
- Continued to work with international partners on the regulation of heritable human genome editing.
- Held the first joint Frontiers of Science meeting with the Chilean Academy of Science.
- Awarded Royal Society Yusuf Hamied Visiting Professorships to five UK-based scientists.
## **What have we achieved?**
- Supported the response to the pandemic through the work of our RAMP, DELVE and SET-C groups.
- Partnered with _BBC Ideas_ to produce a series of online educational films.
- Moved the Summer Science Exhibition online, reaching new UK and international audiences.
- Hosted a series of COVID-19 themed online discussions highlighting key topics, including vaccine development and communicating statistics.
- Published reports on soil structure, nuclear cogeneration and harnessing computing to achieve net zero, along with essays on biodiversity.
## **Goals for 2021/22**
- Continue to fund research fellowship schemes to attract and retain senior and early career researchers to the UK.
- Recognise scientists’ achievements through election to the Society’s Fellowship, and medals and awards programme.
- Encourage and support innovation through industry fellowship and EiR schemes.
- Deliver a programme of scientific events that foster collaboration and networking.
- Continue to broaden participation in science and increase the diversity of the scientific workforce.
- Continue to transition our publishing to a sustainable open access model.
- Advocate for increased investment in research and innovation.
## **Goals for 2021/22**
- Promote the three Science 7 (S7) statements to the UK Government in advance of the G7, G20, COP26, COP15 and Commonwealth Heads of Government (CHOGM) meetings.
- Work with the US National Academy of Sciences on a third international summit on human genome editing.
- Bring conclusions from the Commonwealth Science Conference to CHOGM.
- Hold international scientific meetings such as the UK-V4 Frontiers of Science virtual meeting.
- Develop our links with leading scientific nations through policy, workshops and meetings.
- Promote academic freedom, through advocacy work and as a member of the UK and international human rights committees.
## **Goals for 2021/22**
- Support the response to the pandemic and provide new scientific advice as it emerges.
- Provide evidence to policy-makers on climate, biodiversity and emerging technologies.
- Host our second virtual Summer Science Exhibition, with increased interactivity.
- Continue to host public engagement activities online, moving to hybrid and real-life events when possible.
- Support schools and students to act on climate and biodiversity issues through Partnership Grants and the Tomorrow’s Climate Scientists scheme.
- Produce a further series of _People of Science_ films.
- Launched a digital version of Robert Hooke’s _Micrographia_ , after restoration.
**Relationships**
## **Government, parliament and key influencers and funders**
## **Industry, academia, education and civil society**
**The public, including children and young people Engaged Fellows, staff, volunteers and the science community**
**Royal Charter and strong governance framework**
**Robust systems, policies and procedures**
**Resources**
**14** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE
**15**
## **Where our income comes from and how we spend it**
Other trading activities (£0.1 million) The Society acquired Chicheley Hall in 2008 with the aim of operating the property as a centre for scientific and academic conferences. In addition to its mission-related activities, the Hall hosted conferences and other events, and Royal Society Trading Limited was established to process activities at the property. In line with Government advice, Chicheley Hall closed on 23 March 2020; it did not reopen in the year and the property was sold in March 2021.
Expenditure on charitable activities (£136.3 million)
## **Income**
The Society receives income from a number of sources, including the Government, trusts, foundations, companies, individuals, trading activities and income from investments. Its income enables the Society to deliver a wide range of programmes in support of its strategic aims. Income for the year before exceptional items totalled £133.9 million.
The Society’s charitable expenditure is categorised in the statement of financial activities as follows:
- promoting science and its benefits;
- supporting and recognising excellence in science;
- providing scientific advice for policy;
- fostering international and global cooperation; and
Income and endowments from donations and legacies (£1.9 million) The Society has relied on the generous support of philanthropists throughout its history. This year the Society received funding from trusts, foundations, companies and individuals in addition to the contributions made by Fellows. The Society is grateful to all its donors and their names can be found on the Society’s website.
- education and public engagement.
Royal Society (London) Ltd was established to process other noncharitable trading activities including income from sponsorship agreements.
Each of the areas above supports established to process other nonthe delivery of the three strategic charitable trading activities including objectives as set out in the current income from sponsorship agreements. strategic plan. The expenditure chart Income from investments on the following page illustrates (£4.9 million) expenditure by both strategic The Society holds a significant objective and expenditure category. investment portfolio which was valued at £297.3 million at 31 March 2021. Many The expenditure to further the of these funds held were bequeathed strategic objective of promoting to the Society as endowments or excellence in science includes the gifted as a restricted fund for a specific majority of grant awards, the costs purpose. The investment objective of of the Society’s publishing operation the Society is to at least maintain the and the costs associated with lettings real value of its investment assets while at Carlton House Terrace which are generating a stable and sustainable in furtherance of charitable objects. return to fund charitable activities, thus Expenditure in this area also includes being even-handed between current costs arising from recognition of the and future beneficiaries. excellence and creativity of scientists
The expenditure to further the strategic objective of promoting excellence in science includes the majority of grant awards, the costs of the Society’s publishing operation and the costs associated with lettings at Carlton House Terrace which are in furtherance of charitable objects. Expenditure in this area also includes costs arising from recognition of the excellence and creativity of scientists by election to the Fellowship and Foreign Membership and the awards to scientists to recognise excellence in science and technology.
Grants for charitable activities (£119.0 million)
The Society receives the majority of its funding from the UK Government’s Department for Business, Energy and Industrial Strategy (BEIS). In the year, a grant was also received from the Department for International Development. In addition to Government funding, the Society receives valuable contributions towards charitable activities from long-term partners such as the Wolfson Foundation and the Leverhulme Trust, as well as other external bodies.
## Exceptional net income from property sale (£2.2 million)
The sale of Chicheley Hall was completed in March 2021. The net income from the sale is shown as an exceptional item in the statement of financial activities.
Expenditure to further the objective of supporting international scientific collaboration mainly constitutes grant awards on international schemes, providing scientific advice for areas of international policy and expenditure on events convening scientists from across the world.
## **Expenditure**
Trading in furtherance of charitable activities (£8.0 million)
Expenditure for the year totalled £138.4 million. Expenditure is incurred on raising funds and charitable activities.
The Society undertakes trading activities in the form of publishing journals and hosting conferences that further its charitable objectives. In March 2020, the Society’s buildings were closed to Fellows, staff, conferencing clients and other visitors and there were no in-person conferencing activities in the 2020/21 year.
The majority of the Society’s expenditure to demonstrate the importance of science to everyone is in the form of providing scientific advice for policy and education and public engagement work.
## Expenditure on raising funds
(£2.1 million)
Expenditure on raising funds includes the direct costs of raising funds, associated support costs, costs of trading and investment management fees.
**----- Start of picture text -----**
Income from investments Income and
£4.9m endowments
from donations
Other trading activities
and legacies
£0.1m
£1.9m
Trading in furtherance
of charitable activities
£8.0m
Total
income
£133.9m
Grants for charitable
activities
£119.0m
**----- End of picture text -----**
**----- Start of picture text -----**
Demonstrating the Expenditure on raising
importance of science funds total £2.1m
to everyone total £8.5m Direct costs
Supporting and on raising funds
recognising excellence £0.4m
in science Support costs
£1.6m on raising funds
Education and public £0.5m
engagement Costs of trading
£2.9m £0.2m
Providing scientific Investment manager
advice for policy fees
£4.0m Total £1.0m
Supporting international Promoting excellence
expenditure
scientific collaboration in science total £109.4m
total £18.4m £138.4m Promoting science
Supporting and and its benefits
recognising £0.3m
excellence in science
Supporting and
£5.3m
recognising excellence
Education and public in science
engagement £107.7m
£0.2m
Education and public
Fostering international engagement
and global cooperation £1.0m
£12.9m
Fostering international
and global cooperation
£0.3m
Providing scientific
Expenditure is shown by strategic objective in the outer ring and by expenditure category as shown in the advice for policy
statement of financial activities in the inner ring. £0.1m
FINANCIAL STATEMENTS
OTHER INFORMATION
**----- End of picture text -----**
Read more on page 40.
**16** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **17**
## **Strategy in action**
## **Promoting excellence in science**
## **By harnessing the expertise of its Fellowship, the Society’s aim is to ensure that excellence in science is recognised and supported and that scientific work is of the highest quality.**
The Society supports both early career and senior scientists through a range of schemes which include both discovery-led and applied research. We work with partners overseas to support international collaborations and are involved in industry and innovation schemes.
The next generation of research leaders are supported with opportunities including training, mentoring and networking. These schemes are funded by the Government, in partnership with other funding organisations, philanthropic gifts and through the Society’s own funds.
## **Fund outstanding researchers**
In 2020/21 the Society awarded £115.1 million to fund exceptional researchers and outstanding scientists. This is an increase in funding of 12% from last year, as we have continued to increase the scale of our grants programmes.
## **Number of grants awarded**
||2020/21|2019/20|2018/19|2017/18|2016/17|Change over
four-year period|Change over
four-year period|
|---|---|---|---|---|---|---|---|
|Early career researchers|262|287|345|627|290|-10%||
|International collaborations
and travel|347|292|328|394|280|24%||
|Capacity building|101|98|103|157|135|-25%||
|Industry, innovation and translation|63|47|59|49|26|142%||
|Established researchers|25|52|48|67|64|-61%||
|Equipment and infrastructure|–|–|–|6|8|-100%||
|Total|798|776|883|1,300*|803|-1%||
|**Total value**|**£115.1 m**|**£102.5m**|**£84.7m**|**£73.3m**|**£61.2m**|**88**%||
* 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.
## **Priorities:**
## **Some of the people we fund:**
**----- Start of picture text -----**
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.
**----- End of picture text -----**
Professor Adekunle Adeyeye is a Professor Jenny Nelson FRS is a Wolfson Fellow at Durham University. Royal Society Research Professor Adekunle works to understand at Imperial College London. Jenny the magnetic properties of 3D works to understand and improve the nanomagnets with applications in efficiency of solar energy conversion information processing and storage. in different materials. In her research When designing future high-density she will study the parallels between storage devices, it is essential to natural photosynthetic systems understand how altering the size of and solar cells based on molecular magnetic elements involved in the semiconductors. She aims to learn storage system affects the other from nature to design better materials properties of these magnets. for solar energy conversion.
Dr Rucha Karnik is a University Research Fellow at the University of Glasgow. Rucha’s research addresses the overarching mechanics of how plants coordinate growth with environmental cues. She investigates how the pathways underpinning shoot growth overlap with disease immunity. This research will inform future efforts to enhance crop productivity, safeguarding agriculture to cope with climate changes.
## **Priorities**
**Priorities Priorities**
**Above:** Dr Diego Altamirano is a University Research Fellow at the University of Southampton. Diego’s research involves developing a network of stateof-the-art fast cameras to virtually ‘slow down time’ to allow astrophysical processes to be visualised. The technology will allow him to study how black holes and neutron stars devour nearby stars and what happens with the gas that is ripped from stars.
**4 6**
**4 6**
**4 6**
**18** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **19**
**Strategy in action** continued
## **Advise on research landscape**
## **Elect exceptional scientists to the Fellowship**
Supporting scientists from ethnic minority backgrounds is a key priority. This year the Society published two diversity reports using data highlighting inequalities in UK STEM higher education over the past 10 years, and in the pool of UK-based researchers eligible for the Society’s own early career Fellowship grants.
The Royal Society elected 62 new Fellows and Foreign Members, including 14 women and one Honorary Fellow. New Fellows have been elected from institutions across the UK and around the world.
Four of the 2020 Nobel Prize winners have links to the Royal Society. Foreign Member and previous winner of the Croonian Medal and Prize, Jennifer A Doudna, was joint winner of the Nobel Prize in Chemistry for her work on the development of a method of genome editing which enables researchers to change the DNA of animals, plants and microorganisms with extremely high precision.
The report on ethnic minority students and academic staff, and the Careers Research and Advisory Centre reports were published in March 2021, receiving widespread media coverage.
The Society is working to take forward the recommendations in the reports and has arranged the first in a proposed series of roundtables in conjunction with UK Research and Innovation to discuss the findings and identify next steps with key partners.
Fellow of the Royal Society, Sir Roger Penrose, was awarded the Nobel Prize in Physics along with Foreign Member Reinhard Genzel and Andrea Ghez. Ghez was previously awarded the Society’s premier physical sciences prize, the Bakerian Medal and Lecture.
## **Priorities**
## **2 5**
Read more: List of our new Fellows on pages 34 – 36.
## **Demonstrate economic impact of science investment**
## **Priorities**
This year the Government reaffirmed its commitment to increase investment in research and development to at least 2.4% of GDP by 2027, with £14.6 billion to be invested in the coming year.
**1**
**----- Start of picture text -----**
28% 34% 23%
**----- End of picture text -----**
of grants were of grants were of new Fellows and awarded to women awarded to women Foreign Members (2019/20: 29%). in our early career were women schemes (2019/20: 40%). (2019/20: 21%).
The Chancellor also announced a focus on innovation, support for improving the UK visa offer and a proactive global outreach strategy to attract scientists to the UK. The Government confirmed that investing in science, while attracting science talent from research leaders to early career scientists and technicians, is going to be crucial this year as we recover from the pandemic. Innovation was also highlighted as key to the Government’s focus on levelling up.
In addition to this, the UK’s focus on climate change and biodiversity, through COP26 and green projects, reflects the importance of environmental sustainability and the transition to net zero.
## **Priorities**
## **2 3**
## **Encourage and support innovation**
Sixty-four business leaders and senior industry scientists have been appointed as Royal Society Entrepreneurs in Residence (EiRs) since the scheme launched in 2017.
The BEIS-funded scheme aims to increase the knowledge and awareness in UK universities of cutting-edge industrial science, support the translation of ideas and build confidence in business and entrepreneurship.
In 2020, the Society conducted a review of outcomes from the first two cohorts of 34 award holders. EiRs have supported successful grant applications of £13.5 million, been directly involved in the launch of 15 companies developed from university research, advised on 133 commercially relevant projects and supported 57 students into industrial science roles.
## **Priorities**
**Above:** A selection of Royal Society journals from 2020/21.
## **Recognise scientific achievements**
## **Publish scientific research**
The Society publishes high-quality, cutting-edge research and supports open access publishing as part of its commitment to the widest possible dissemination of research outputs.
Fellow Sir Alan Fersht was awarded the Copley Medal 2020 for developing and applying the methods of protein engineering to provide descriptions of protein folding pathways at atomic resolution, revolutionising our understanding of these processes.
In 2020/21, 45% of the papers published were open access (2019/20: 41%), which is well above the 26% of papers published globally that are open access.
Papers from our journals were downloaded over 37 million times (2019/20: 30 million).
The Society has worked with other science publishers to provide open access to any COVID-19 research, and to encourage authors to post preprints of their articles to make vital information available globally as soon as possible. These were made available in a special collection of COVID-19 articles.
Professor Alice Roberts (above) was awarded the inaugural Royal Society David Attenborough Award and Lecture 2020 for outstanding contributions to public engagement through lectures, television, books and other media, as well as her advocacy as Professor of Public Engagement at the University of Birmingham and as the President of the British Science Association.
The Society was also a founding partner of an innovative crosspublisher collaboration to expedite rapid peer review of COVID-19 articles. This was one of several measures which enabled us to publish such research more quickly.
## **Priorities**
## **Looking forward 2021/22**
The Society will:
- Continue to fund research fellowship schemes to attract and retain senior and early career researchers to the UK.
- Recognise scientists’ achievements through election to the Society’s Fellowship and medals and awards programme.
- Encourage and support innovation through industry fellowship and Entrepreneurs in Residence schemes, promoting interaction between academia and industry.
- Deliver a programme of scientific events that foster collaboration and networking.
- Continue to broaden participation in science and increase the diversity of the scientific workforce.
- Continue to transition our publishing to a sustainable open access model.
- Advocate for increased investment in research and innovation.
**Priorities 5**
**7**
**1**
**3 6**
**20** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **21**
**Strategy in action** continued
## **How researchers have responded to the pandemic**
This year the scientists we fund have continued with the global effort for solutions to the pandemic, working in all areas of the response. These areas include research into the development of vaccines, identification of variants of the disease, the study of fluid mechanics to enable work on the production of ventilators and epidemiological modelling.
**22** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **23**
**Strategy in action** continued
## **Supporting international scientific collaboration**
**----- Start of picture text -----**
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.
**----- End of picture text -----**
**Above:** Biodiversity loss and climate change were two of the key issues highlighted in the three S7 statements published by the Society and launched by the Presidents of the G7 science academies in March 2021.
## **The Society’s aim is to reinforce the importance of science to build partnerships between nations and to promote international relations and science’s role in culture and society.**
**Proactive engagement in major issues** In December 2020, as part of the Brexit deal, it was announced that the UK would associate to the EU’s Horizon Europe programme. This was welcome news to the Society and scientific community, both of which had campaigned hard for this association to continue. The Government, however, failed to clarify where the cost of association would come from. Since then, the Royal Society has consistently called on the Government to explain how this will be funded.
**Above:** Social media card to promote the _Heritable human genome editing report_ .
areas where science could help provide solutions to the severe and urgent crises the world currently faces. The statements include policy recommendations on the three inter-related crises of climate change, biodiversity loss and health.
## **Partner with leading scientific nations on new technologies**
The Society continued to work with the US National Academy of Medicine and US National Academy of Sciences regarding the regulation surrounding heritable human genome editing. In September 2020, the commission published its final report, which concluded that human embryos whose genomes have been edited should not be used to create a pregnancy until it is established that precise genomic changes can be made reliably without introducing undesired changes — a criterion that has not yet been met by any genome editing technology.
The Government has a stated intention of the UK being a global science superpower and to achieve that we must strengthen our relationships with global partners. In early 2021, the Government made deep cuts to the Official Development Assistance’s (ODA) R&D budget. This reduced the funding available to Royal Society programmes, such as FLAIR fellowships, by around 70%. Royal Society ODA funding was cut from £25.1 million to £8.1 million for the year ending 31 March 2022.
## **Priorities**
**----- Start of picture text -----**
1 3 1
**----- End of picture text -----**
## **Address global challenges**
The Society considers academic freedom to be central to the practice of science, and believes it is key to the Society’s purpose. In December 2020, the Society launched its official values statement on academic freedom at a panel discussion co-hosted with the Council for At-Risk Academics (CARA) on the subject _Are threats to academic freedom damaging global science?_
These grants amounted to investment in future leaders in science, who were carrying out research that could have had a global benefit. The Royal Society continues to make a strong case to the Government for continued investment in science.
The Society led the development of three S7 statements aimed at the G7 leadership with its sister academies in the other G7 countries. These were launched by the Presidents of the G7 science academies in March 2021. The topics were selected as
## **Priorities**
**2**
**24** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **25**
**Strategy in action** continued
**Left:** Participants at the Society’s first virtual Commonwealth Science Conference.
In September 2020, the Royal Society and the Chinese Academy of Sciences held the third of their UK-China Policy Dialogues on Emerging Technologies. The meeting, which was chaired from the UK side by Professor Adrian Smith, was on artificial intelligence and was the first in the series of meetings to be held virtually.
Five scientists, based in the UK, were awarded the Royal Society Yusuf Hamied Visiting Professorships, which enabled them to collaborate with research institutions in India. Running since 2017, the Yusuf and Farida Hamied Foundation funds outstanding Fellows and Foreign Members of the Society to exchange knowledge and expertise with Indian scientists and build connections with India’s science communities.
## **Implement Commonwealth programmes**
Jointly organised by the Royal Society and the African Academy of Sciences, the first fully virtual Commonwealth Science Conference took place on 22 – 26 February 2021 with the objectives of building new links between early career researchers and influencing the Commonwealth policy agenda. The conference was held virtually because of the pandemic. You can read more about the conference on pages 26 – 27.
Chile has become an increasingly important player in global science. It is one of the leading scientific nations in its region, regularly producing high-quality research across a diverse range of scientific disciplines. The Society delivered the first joint Frontiers of Science meeting with the Chilean Academy of Science. This meeting focused on innovative science and on bringing together scientific leaders of the future.
## **Priorities**
**2 3 Priorities**
**4**
**453 £13.2m 31** international grants awarded spent on fostering global and countries represented in the international collaboration Commonwealth Science Conference through our grant schemes
**Convene leading international meetings to advance science** The Society runs a series of internationally renowned scientific meetings that bring together leading experts to discuss the latest research and to develop knowledge of their field. This year the meetings were adapted to take account of the global pandemic and became virtual events.
**Above:** Social media card for the Science+ meeting, _Energy-environment-society interactions._
**5**
Meetings have included a two-day event – _Scientific applications of high performance computing and machine learning_ and _Understanding brain structure and function: from molecules to mind_ .
meetings were held with
**1,399** attendees and
Other topics this year included: _A cracking approach to inventing tough new materials: fracture stranger than friction_ ; _Understanding the endosomal network in neurodegeneration_ ; _T cell/B cell collaboration in autoimmunity; New perspectives on quantum_ **Priorities** _many-body chaos;_ and _Energy-_ **5** _environment-society interactions_ .
**113**
speakers, Chairs, panellists and organisers
## **Chicheley Hall**
The Kavli Royal Society International Centre at Chicheley Hall has been the venue for over 1,100 scientific meetings. These meetings have brought together experts from all over the world and advanced global scientific understanding. However, the **Priorities** Society’s meetings are increasingly being held internationally and involve **2** more virtual participation. Combined
with the fact that the venue has struggled financially, the Society took the decision to sell the property. The pandemic meant that Chicheley Hall was closed in March 2020 and a sale was completed this year.
## **Looking forward 2021/22**
The Society will:
- Promote the three S7 statements to the UK Government in advance of the G7, G20, COP26, COP15 and CHOGM meetings in 2021.
- Work with the US National Academy of Sciences on a third international summit on human genome editing
- Bring conclusions from the Commonwealth Science Conference to CHOGM.
- Hold international scientific meetings such as the UK-V4 Frontiers of Science virtual meeting.
- Develop our links with leading scientific nations through policy, workshops and meetings.
- Promote academic freedom through advocacy work and as a member of the UK and international human rights committees.
**26** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE
**27**
**Strategy in action** continued
## **COMMONWEALTH SCIENCE CONFERENCE** 2021
Owing to COVID-19 restrictions, the Commonwealth Science Conference 2021 was transformed into a fully virtual event which included many scientists from around the world. It took place on 22 – 26 February and was organised by the Royal Society and the African Academy of Sciences.
• Nurturing resilient ecosystems – challenges and opportunities for the blue economy; trajectories, challenges and solutions for biodiversity; and adaptation and mitigation challenges for coastal states in the era of climate change.
• Building resilient societal systems – pandemic preparedness before and after COVID-19; climate change adaptation and disaster risk reduction; and a ‘just’ transition to a sustainable Commonwealth.
Over 300 participants from 31 countries and across a wide range of scientific disciplines came together to explore how science can help the world build resilience in the face of the challenges posed by global environmental crises. Participants were primarily early career researchers, joined by eminent keynote speakers and panellists including Nobel Prize winners Donna Strickland and Peter Doherty, along with Nobel Peace Prize nominee Anote Tong and palaeoanthropologist Richard Leakey. The opening keynote address was given by HRH The Prince of Wales.
## Commonwealth researchers
were able to showcase scientific expertise, develop new collaborative links and discuss ideas about how policies should be developed to build more resilient societies.
Donna Strickland and Peter Following the conference, several Doherty, along with Nobel Peace exchange grants were awarded to Prize nominee Anote Tong and enable participants to take their palaeoanthropologist Richard thinking about collaborative research Leakey. The opening keynote forward. Sir Adrian Smith and address was given by HRH The Professor Felix Dakora, Presidents Prince of Wales. of the Royal Society and the African Academy of Sciences, joined with The overarching theme of the other Commonwealth Academy conference was ‘Science for a Presidents in bringing together resilient future’ and the programme some of the policy conclusions focused on three thematic areas of of the conference in a letter to science: the Commonwealth Secretary• Developing resilient energy General with a view to making systems – climate resilient recommendations to Commonwealth infrastructure; decarbonising leaders. The Society also hopes energy systems; and a circular to take forward other activities economy for the Commonwealth. which support the development of links made at the Conference through regional, thematically focused, meetings.
**----- Start of picture text -----**
Canada 20
**----- End of picture text -----**
**----- Start of picture text -----**
29 United Kingdom
Sierra
2 Bahamas Leone 1
8 Bangladesh
2 Barbados
Pakistan 4
19 Malaysia
Jamaica 15 9 Trinidad and Tobago
13 Kenya
Ghana 6 16 Singapore
Nigeria 26 4 Uganda Fiji 4
3 Rwanda
Cameroon 3
India 17
9 Sri Lanka
Guyana 2 Zambia 2 1 Mauritius
5 Tanzania
Botswana 1
2 Malawi
Namibia 1
2 Mozambique
Australia 22
18 South Africa
New Zealand 5
**----- End of picture text -----**
## **Notable speakers included:**
## **Dr Gagandeep Kang**
## **Professor Julie Makani FRS**
## **Dr Agnes Kalibata**
## **His Excellency Anote Tong**
One of India’s leading medical scientists known for her work on the development and prevention of enteric infections in children.
Winner of the Royal Society Africa Award 2011 – _Can Genomics Improve Health in Africa?_ She established gene therapy treatments for sickle cell disease in Tanzania.
President of the Alliance The former President of for a Green Revolution in Kiribati is well known for Africa spoke about building his efforts to raise global resilient food systems awareness on the threat to achieve sustainable posed by climate change. development goals.
**Above:** Map showing the number of delegates attending the Commonwealth Science Conference 2021 grouped by the country they are affiliated with.
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **29**
**Strategy in action** continued
**28** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
## **Demonstrating the importance of science to everyone**
## **Priorities:**
**----- Start of picture text -----**
1 Increase scientific advice for
policy- makers.
2 Implement a programme of public
dialogue and engagement.
3 Integrate science into public debate
and culture.
4 Promote the value of STEM education.
5 Inspire through historic collections.
**----- End of picture text -----**
**Above:** The Society convened three groups to help inform decisions about the pandemic. Reports published by these groups have been key to influencing public policy in areas such as the benefits of wearing face coverings.
**Scientific thinking influences how people live their lives, never more so than now. The Society engages with the public in many different settings to hear their experiences and views and to make science part of the wider conversation.**
**----- Start of picture text -----**
Digital technology
and the planet
Harnessing computing
to achieve net zero
**----- End of picture text -----**
discussing how digital technologies can provide support in the fight against climate change and biodiversity loss.
**Increase scientific advice for policy-makers** During the past year, the Society has published a number of reports to influence policy-makers in some key areas of science, with a particular focus on biodiversity and climate change.
The Society hosted an online panel event to support the launch of the Government-commissioned Dasgupta Review, _Economics of biodiversity_ , published in February. The review presented a new economic framework, grounded in ecology and earth sciences, in order to understand the sustainability of our engagement with nature and identify the options humanity has to enhance biodiversity and prosperity.
In April last year the Society published a report on soil structure, which focused on the delivery of four key benefits: biodiversity, agricultural productivity, clean water and flood prevention, and climate change mitigation. The report also provided illustrative examples of what a future policy on soil could look like.
**----- Start of picture text -----**
FIGURE 3
Illustration showing how an active, colour-changing bandage could help combat antimicrobial resistance.
KEY
Drug-sensitive bacteria Drug-resistant bacteria Antibiotics Oxidants
Smart bandage is able todetect bacterial infection
**----- End of picture text -----**
A series of essays by leading international biodiversity researchers were published as part of a Royal Society project to explore the challenges and solutions to tackling global species loss, threatening ecosystems and the life that depends on them.
October’s report on nuclear cogeneration considered how a new generation of nuclear reactors could help the UK cut carbon emissions by harnessing surplus energy to heat homes, produce hydrogen and decarbonise industry. The policy briefing set out how planned and future nuclear projects can complement renewables and help the UK meet its net zero carbon emissions pledge by 2050.
**----- Start of picture text -----**
Bacterial infection detected The green smart bandage turns yellow when it detects a bacterial infection and releases antibiotics.
Drug-resistant bacteria still present When drug-resistant bacteria are present, the bandage turns red. Doctors can then shine a light on the bandage, causing it to produce oxidants that weaken or kill the bacteria. materialsAnimatePE RS PEC TIVE
Light shone onto bandage
PERSPECTIVE – Animate materials 19
**----- End of picture text -----**
The essays included leading figures writing about different aspects of biodiversity loss, including the Amazon’s hydrological The Society’s report on animate cycle approaching a tipping point, materials – human-made materials where deforestation could that emulate the properties of living irreparably damage the patterns systems – outlines the potential of of rainfall and evaporation that this technology to deliver major shape this unique ecosystem. change in sectors from infrastructure Another of the essays examines to medicine and clothing. Animate the global food system and how materials could signal a future in marketing and behavioural science which roads can self-heal and living approaches can help mainstream buildings can harvest carbon dioxide biodiversity conservation in all areas to generate power and purified water. of life. The report sets out a roadmap to make this technology a reality.
The Society’s report on harnessing computing to achieve net zero was launched in December. The report shows that digital technology, from smart meters to supercomputers, weather modelling and AI, is vital to unlocking net zero transition. It sets out a roadmap for how maximising digital technology could deliver nearly one-third of the carbon emission reductions required by 2030. The launch of the report was accompanied by an online event featuring a panel of experts
## **Priorities**
**1 3 2**
**30** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **31**
**Strategy in action** continued
## **Implement a programme of public dialogue and engagement**
As a result of the pandemic, this year’s Summer Science Exhibition went fully online for the first time with a weeklong digital programme premiering live video content streamed on social media channels.
One of the most popular events with virtual visitors was a family-friendly Summer Science quiz with special guests including Professor Brian Cox and former _Blue Peter_ presenter Konnie Huq. More than 2,600 viewers joined the livestream to take part. Other popular sessions included an interactive Q&A with a panel of space experts and videos on the science of pets and Antarctica exploration.
**Above:** An image from the BBC Ideas video, _What would a world without vaccines be like?_
**Integrate science into public** In October 2020, actor, comedian and **debate and culture** author Stephen Fry joined Nobel This year the Society has been Prize-winning biologist and former working in partnership with President of the Royal Society Venki educational video platform Ramakrishnan in an online event to _BBC Ideas_ to produce a series explore establishing trust in science of five videos focusing on and how individuals can make rational different aspects of science. and objective decisions. The event has received more than 26,000 views The most popular video focuses on our channels so far.
## **Integrate science into public debate and culture**
This year’s series of online COVID-19 themed events proved popular. December’s lecture by Professor David Spiegelhalter, _Communicating statistics in the time of COVID_ , had more than 16,800 views as of April 2021. Professor Brian Cox’s discussion on the race for a COVID vaccine, which took place in January 2021, has now been watched by more than 68,500 people on our website or YouTube channel.
The most popular video focuses on the eradication of smallpox and has received over 160,000 views on the BBC’s website and the Society’s social media channels.
## **Priorities**
## **2 3 4**
Other videos in the series include _A world without vaccines_ , which examines the history of vaccines and the impact they have had on eradicating disease, a look at the magic of soil and the digital traces we leave in everyday life. The series has received a total of 500,000 views so far.
## **Promote the value of STEM education**
The Partnership Grants scheme aims to offer students aged 5 – 18 a first glimpse of scientific research in the classroom. The grant offers up to £3,000 to UK schools or colleges to buy equipment to carry out research projects in partnership with a STEM professional.
On social media we have increased our followers on Facebook and Twitter. Our website had 1.8 million users, down 1.8% on last year, but our YouTube channel was up 91% on last year with 101,000 subscribers.
## **Priorities**
**2 3**
The 2020 funding round was impacted by the pandemic and saw over 45% of applications unfinished or withdrawn as teachers coped with competing priorities. In total, 55 schools received funding, 32 of which are part of the Tomorrow’s climate scientists programme, which supports students with climate change and biodiversity research projects.
**320,000** Twitter followers **253,000**
Facebook fans
## **Book prizes**
More than 13,000 young judges from 500 schools selected _Cats React to Science Facts_ by Izzi Howell to be the winner of this year’s Royal Society Young People’s Book Prize. The book offers children an opportunity to explore the scientific world with humorous meme-like felines and a stream of fascinating science facts.
The winner of this year’s Royal Society Insight Investment Science Book prize was postdoctoral scientist and debut author Dr Camilla Pang (above) for her book _Explaining Humans: What Science Can Teach Us about Life, Love and Relationships_ .
Dr Pang was diagnosed with autism spectrum disorder and attention deficit hyperactivity disorder. Her book set out to create a ‘manual’ for humans by showing readers how proteins, machine learning and molecular chemistry can teach us about the complexities of human behaviour and the world around us.
## **Priorities**
**2 4**
## **Inspire through historic collections**
This year the Society launched the digital version of the first edition of Robert Hooke’s 1665 work, _Micrographia_ . The book contains detailed illustrations of some of the specimens Hooke viewed under the microscopes he designed. The blog and video sharing its history proved very popular with our online audiences.
The latest addition to the Society’s portrait collection is a painting of astrophysicist Dame Jocelyn Bell Burnell (below). The portrait, by artist Stephen Shankland, was commissioned as part of an ongoing project to increase the number of female scientists represented in our art collection of Fellows.
During Black History Month in October we launched a new online exhibition with Google Arts and Culture, _A Celebration of Black Science_ , which explores the scientific contributions and achievements of people of African and African-Caribbean descent, drawing on the Royal Society archives.
**Priorities**
**5**
## **Looking forward 2021/22**
The Society will:
- Support the response to the pandemic and provide new scientific advice as it emerges.
- Provide evidence to policy-makers on climate, biodiversity and emerging technologies.
- Host our second virtual Summer Science Exhibition, with increased interactivity.
- Continue to host public engagement activities online, moving to online, hybrid and real-life events when possible.
- Support schools and students to act on climate and biodiversity issues through Partnership Grants and the Tomorrow’s climate scientists scheme.
- Produce a further series of People of Science films.
**32** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE
**33**
**Strategy in action** continued
## **Pandemic policy response**
The Royal Society responded rapidly **Data Evaluation and Learning for** to COVID-19 by convening researchers **Viral Epidemics (DELVE)** to help inform policy decisions on It was critical to analyse emerging data managing the global pandemic. from countries around the world to Fellows of the Royal Society and identify the most important factors that scientists funded by the Society also could help slow the spread of the virus worked together with researchers and find long-term solutions. across the globe to rapidly help us DELVE was a multi-disciplinary group better understand the virus and convened by the Society to support discover the best ways to tackle it.
It was critical to analyse emerging data from countries around the world to identify the most important factors that could help slow the spread of the virus and find long-term solutions.
DELVE was a multi-disciplinary group convened by the Society to support a data-driven approach to learning from the different ways countries are managing the pandemic. The group provided input to the Government’s Scientific Advisory Group for Emergencies (SAGE).
## **Rapid Assistance in Modelling the Pandemic (RAMP)**
The Society issued a call for volunteers to support efforts to model the COVID-19 pandemic and guide the UK’s response. The response was overwhelming with 1,800 individuals and teams offering to help.
Some of the areas the group published influential reports on included: the effectiveness of wearing face coverings; the spread of infection in hospitals; the risk of pupils returning to school; the economic impacts of lockdown; and how the test, trace and isolate strategy could be most effective. The DELVE team also looked at how data can be accessed and used in an emergency.
The outcome was RAMP. An initiative that brought modelling expertise from a diverse range of disciplines, in businesses and academia, to support the pandemic modelling community, which was already working intensively to understand the pandemic.
The RAMP initiative was developed to enhance modelling capacity to create a clearer understanding of the impact of the pandemic and to help with the efficient flow of information to Government advisors. Many of the RAMP volunteers and projects are still providing expertise, and this has led to a range of longer-term research projects, from understanding aerosol transmission to modelling transport use and understanding its impact on infection patterns.
**Science in Emergencies Tasking – COVID (SET-C)**
SET-C was established to draw on the expertise of the Society’s Fellows, and others, to respond to requests for rapid science advice on topics relevant to tackling the pandemic. The group was initially convened in response to a request from the Government Office for Science.
The initiative has published a range of rapid reviews of the latest evidence on topics including: vaccine passports; herd immunity; long COVID; vaccine deployment and behavioural influences on uptake; and the genetics of the virus.
In the spring of 2020, the British public were behind their European and US counterparts when it came to wearing a mask or face covering to help tackle the global pandemic. The Royal Society published reports from DELVE and SET-C which reinforced the benefits of face coverings.
Two reports from DELVE examined a wide range of evidence on the effectiveness of wearing face coverings in reducing the risk of transmission and suggested that face coverings could provide protection. The work was submitted to the Government’s SAGE group.
The second report, by SET-C, looked at the effectiveness of different types of face mask and identified behavioural factors that may have generated the public’s reluctance to wear a face mask or covering.
The reports secured nearly 2,000 pieces of press coverage, reaching 90% of adults in the UK. In July 2020, not long after these reports were published, the Government made it mandatory to wear face masks in shops and supermarkets in England, and further policy changes saw masks become mandatory in airports and on public transport. Face coverings remain a key element in the UK’s fight against the pandemic.
THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
SCIENCE IN A PANDEMIC: ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE
**34**
**35**
## **People**
**At the core of the Society are people, from Fellows and staff to generous donors and the scientists who are supported through the Society’s funding programmes.**
## **Fellows of the Society elected in 2020**
## **Professor Gordon Brown FMedSci FRS**
## **Dr Francois Guillemot FMedSci FRS**
**Professor Timothy Behrens FRS** Professor of Computational Neuroscience, Wellcome Centre for Integrative Neuroimaging, Nuffield Department of Clinical Neurosciences, University of Oxford and Honorary Principal Investigator, Wellcome Centre for Human Neuroimaging, University College London
Professor in Immunology, MRC Centre for Medical Mycology, University of Exeter
Senior Group Leader, The Francis Crick Institute
## **Professor David Harel FRS**
## **Professor William Campbell FRS**
Professor, Department of Computer Science and Applied Mathematics, Weizmann Institute of Science, Israel
Emeritus Fellow, Drew University (New Jersey), USA
## **Professor Henry Chapman FRS**
## **Professor Marian Holness FRS**
## **Professor Yoshua Bengio OC FRS**
Director, Centre for Free-Electron Laser Science, Deutsches ElektronenSynchrotron (DESY) and Universität Hamburg, Germany
Professor, Department of Earth Sciences, University of Cambridge
Full Professor, Département d’informatique et de recherche opérationnelle, Université de Montréal, Canada
## **Professor Ehud Hrushovski FRS**
Professor of Mathematical Logic, Mathematical Institute, University of Oxford
## **Dr G Marius Clore FRS**
**Professor Malcolm Bennett FRS** Professor of Plant Science, School of Biosciences, University of Nottingham
NIH Distinguished Investigator and Chief of the Protein Nuclear Magnetic Resonance Section, Laboratory of Chemical Physics, National Institute of Diabetes and Digestive and Kidney Diseases, National Institutes of Health, USA
**Professor Andrew Jackson FRS** Professor of Human Genetics, MRC Human Genetics Unit, Institute of Genetics and Molecular Medicine, University of Edinburgh
## **Professor Ben Berks FRS**
Professor of Biochemistry, Department of Biochemistry, University of Oxford
**Professor Zulfiqar Bhutta FRS** Robert Harding Inaugural Chair in Global Child Health & Policy, Centre for Global Child Health, Toronto, Canada and Distinguished University Professor and Founding Director, Institute for Global Health & Development, Aga Khan University, South-Central Asia, East Africa and the UK
**Professor George Jackson FRS** Professor of Chemical Physics, Department of Chemical Engineering, Imperial College London
## **Professor Vikram Deshpande FRS**
Professor of Materials Engineering, Department of Engineering, University of Cambridge
## **Professor Xin Lu FMedSci FRS**
## **Professor John Endler FRS**
Director, Ludwig Institute for Cancer Research, Nuffield Department of Medicine, University of Oxford
Emeritus Professor, School of Life and Environmental Sciences, Deakin University, Australia
## **Dr Alexander Makarov FRS**
## **Professor Adam Eyre-Walker FRS**
## **Professor Kevin Brindle FMedSci FRS**
Director of Global Research, Thermo Fisher Scientific, Germany and Professor of High Resolution Mass Spectrometry, Utrecht University, Netherlands
Professor of Biology, School of Life Sciences, University of Sussex
Professor, Department of Biochemistry and Senior Group Leader, Cancer Research UK Cambridge Institute, University of Cambridge
## **Professor Daniel Frost FRS**
Professor and Deputy Director, Bayerisches Geoinstitut, Universität Bayreuth, Germany
## **Professor Keith Matthews**
## **FMedSci FRS**
Professor of Parasite Biology, Institute of Immunology and Infection Research, University of Edinburgh
## **Professor Iain McCulloch FRS**
Professor of Polymer Materials, Department of Chemistry, Imperial College London and Director, KAUST Solar Center, King Abdullah University of Science and Technology, Saudi Arabia
## **Professor Linda Nazar OC FRS**
Professor and Canada Research Chair in Solid State Energy Materials, Department of Chemistry, and Waterloo Institute of Nanotechnology, University of Waterloo, Canada
## **Professor Peter Nellist FRS**
Professor of Materials and Joint Head of Department, Department of Materials, University of Oxford
**Professor Giles Oldroyd FRS** Russell R Geiger Professor of Crop Science, Crop Science Centre and Group Leader, Sainsbury Laboratory, University of Cambridge
**Professor Hugh Osborn FRS** Emeritus Professor, Department of Applied Mathematics and Theoretical Physics, University of Cambridge
**Professor Oliver Phillips FRS** Professor of Tropical Ecology, School of Geography, University of Leeds
## **Professor Raymond**
## **Pierrehumbert FRS**
Halley Professor, Atmospheric, Oceanic and Planetary Physics, Department of Physics, University of Oxford
## **Professor John Plane FRS**
Professor of Atmospheric Chemistry, School of Chemistry, University of Leeds
## **Professor Catherine Price**
**FMedSci FRS**
Wellcome Trust Principal Research Fellow and Director, Wellcome Centre for Human Neuroimaging, University College London
## **Professor Carol Prives FRS**
DaCosta Professor of Biology, Department of Biological Sciences, Columbia University, USA
## **Professor Didier Queloz FRS**
Professor, Cavendish Laboratory, University of Cambridge
## **Professor Nicholas Read FRS**
Henry Ford II Professor of Physics and Professor of Applied Physics and Mathematics, Department of Physics, Yale University, USA
## **Dr Michael Rudnicki OC FRS**
Senior Scientist and Program Director, Ottawa Hospital Research Institute, Canada
## **Dr William Schafer FMedSci FRS**
Group Leader, Divison of Neurobiology, MRC Laboratory of Molecular Biology
## **Professor Nigel Scrutton FRS**
Director, UK Future Biomanufacturing Research Hub and Manchester Synthetic Biology Research Centre and Professor of Molecular Enzymology, University of Manchester
## **Professor John Shine AC FRS**
Emeritus Professor, Garvan Institute of Medical Research, Australia
## **Professor Stephen Smartt FRS**
Professor of Astrophysics, School of Mathematics and Physics, Queen’s University Belfast
## **Professor Sir Ralf Speth KBE FREng FRS**
CEO, Jaguar Land Rover
## **Professor Molly Stevens FREng FRS**
Professor of Biomedical Materials and Regenerative Medicine and Research Director for Biomedical Material Sciences, Department of Materials and Department of Bioengineering, Imperial College London
## **Professor Donna Strickland FRS**
Professor of Physics, Department of Physics and Astronomy, University of Waterloo, Canada
Physics and Astronomy, University of Waterloo, Canada **Professor Andrew Stuart FRS** Bren Professor of Applied and Computational Mathematics, Department of Computing and Mathematical Sciences, California Institute of Technology, USA
Affiliations at the time of election in April 2020.
**36 THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS**
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **37**
## **People** continued
## **Dr Sarah Teichmann FMedSci FRS**
Cellular Genetics Programme Head, Wellcome Sanger Institute, Director of Research, Cavendish Laboratory, University of Cambridge and Senior Research Fellow, Churchill College, Cambridge
## **Professor Richard Thompson OBE FRS**
Professor of Marine Biology and Director of Marine Institute, University of Plymouth
## **Professor Jack Thorne FRS**
Professor, Department of Pure Mathematics and Mathematical Statistics, University of Cambridge
**Professor Nicholas Turner FRS** Professor of Chemical Biology and Director of the Centre of Excellence in Biocatalysis (CoEBio3), Department of Chemistry, Manchester Institute of Biotechnology, University of Manchester
## **Professor Jane Visvader FRS**
Division and Laboratory Head, The Walter and Eliza Hall Institute of Medical Research, Australia
## **Professor Alan Wilson FRS**
Professor of Locomotor Biomechanics, Structure and Motion Laboratory, Royal Veterinary College, University of London
## **Professor Steve Young FRS**
Emeritus Professor of Information Engineering, Department of Engineering, University of Cambridge
## **Foreign Members elected in 2020**
## **Professor Frances Arnold**
## **ForMemRS**
Linus Pauling Professor of Chemical Engineering, Bioengineering and Biochemistry and Director, Donna and Benjamin M Rosen Bioengineering Center, Caltech, USA
## **Dr Francis Collins ForMemRS**
Director, National Institutes of Health, USA
## **Professor Kerry Emanuel ForMemRS**
Cecil and Ida Green Professor of Atmospheric Science, Department of Earth, Atmospheric and Planetary Sciences, Massachusetts Institute of Technology, USA
**Professor Ben Feringa ForMemRS** Jacobus van’t Hoff Distinguished Professor of Molecular Science and Academy Professor, Royal Netherlands Academy of Science, Netherlands
## **Professor Else Marie Friis ForMemRS**
Emeritus Professor, Department of Geoscience, Aarhus University, Denmark and Emeritus Professor of Palaeobotany, Department of Palaeobiology, Swedish Museum of Natural History, Sweden
## **Professor Regine Kahmann ForMemRS**
Emeritus Scientific Member, Max Planck Institute for Terrestrial Microbiology, Germany
## **Professor Margaret Kivelson ForMemRS**
Distinguished Research Professor, Department of Earth, Planetary, and Space Sciences, University of California, Los Angeles, USA and Research Professor, Department of Climate and Space Sciences and Engineering, University of Michigan, USA
**Professor Ramamoorthy Ramesh ForMemRS**
Purnendu Chatterjee Chair in Energy Technologies, Department of Physics and Department of Materials Science and Engineering, University of California, Berkeley, USA and Lawrence Berkeley National Laboratory, USA
## **Professor Wendelin Werner**
**ForMemRS**
Professor, Department of Mathematics, ETH Zürich, Switzerland
## **Professor Ada Yonath ForMemRS**
The Martin S and Helen Kimmel Professor of Structural Biology, The Helen and Milton A Kimmelman Center for Biomolecular Structure and Assembly, Weizmann Institute of Science, Israel
## **Honorary Fellow elected in 2020**
## **Sir David Cooksey FRS**
Founding Chair, Diamond Light Source and Founding Chair, Francis Crick Institute
Further information is available online.
Scientists and researchers, including Fellows of the Royal Society and people we fund, are working together across the globe to help us better understand COVID-19 and discover the best ways to tackle it.
The Society is leading and convening researchers to work together to inform policy decisions on managing the pandemic, and creating opportunities for experts from a broad range of disciplines to consider matters together so that the full range of issues can be considered concurrently.
**Above:** The Society’s IT and digital teams supported the move to a fully virtual Summer Science exhibition, as the annual event moved online for the first time.
under the Government’s Coronavirus Job Retention Scheme.
through its research fellowships. These researchers receive long-term funding from the Society and range from early career researchers just starting their independent careers to some of the most distinguished senior researchers in the country.
## **Fellows**
Fellows are elected through a These researchers receive long-term peer-review process on the basis funding from the Society and range of their contribution to science. It is from early career researchers just from the eminence of its Fellowship starting their independent careers and Foreign Membership and its to some of the most distinguished independence from Government senior researchers in the country. that the Society derives its authority **Staff** in scientific matters. Fellows and The Society aims to offer fair pay Foreign Members fulfil a range of to attract and retain appropriately responsibilities for the Society on qualified staff to lead, manage, a voluntary basis. Many others, support and deliver the Society’s scientists and non-scientists, also aims on behalf of its Fellows and contribute to the work of the Society Council. As at 31 March 2021, the on a voluntary basis. The Fellowship Society had 223 staff. The Society’s is supported by staff based in staff are organised into programmes, London. services and trading sections.
The well-being of staff has been an important consideration for the Trustees and Senior Management Team throughout the year. The Senior Management Team at the Society agreed plans to provide immediate support for staff physically, emotionally and financially when the Society’s offices closed. Employee advice and mental health helplines were already available, and the Society introduced new initiatives to support staff working outside of the building with the necessary equipment and support. This included the introduction of Mental Health First Aiders and a programme of mental health talks.
## **Scientists**
In March 2020, the Society’s buildings were closed to Fellows, staff, conferencing clients and other visitors. The decision was taken in the interests of all our stakeholders. Although the building is closed, the business of the Society has continued with staff working remotely. The Society’s IT and Digital teams accelerated plans to move to greater use of virtual platforms and services to meet the needs of staff working outside of the Society’s offices. Some areas of the business were affected more than others and, through consultation with staff, the Society considered where it was appropriate to furlough a small proportion of staff
The Society has played a part in some of the most fundamental, significant and life-changing discoveries in scientific history and the Society’s scientists continue to make outstanding contributions to science in many research areas. The Society is currently supporting
Planning for the 2022 – 2026 strategy began in the year and a review of the structure and operations of the Society was completed. The objective of the review was to create a more efficient and effective organisation that is fit for the future and optimal for the delivery of our new strategy. This led to some changes in the structure of teams and the introduction of a new Strategy department involving the recruitment of two new roles, but no jobs were put at risk as part of the
1,083 (2020: 1,065) researchers
**1,083** researchers currently supported by the Royal Society through its research fellowships (2020: 1,065)
restructure.
Affiliations at the time of election in April 2020
**38** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **39**
## **People** continued
## **Volunteers**
A number of our public engagement events and other work would not be possible without the contribution of our volunteers and the Society is grateful to all those who have contributed to its work over the past year. We also recognise the contributions of the many scientists who have supported our work on the response to COVID-19 by lending their expertise to panels and discussions. Finally, we are fortunate to have volunteer committee members across several of our committees. Their experience and expertise is invaluable to the operation of the charity.
## **Equality, diversity and inclusion**
As the UK’s national academy of science, engineering, technology and mathematics, the Society has a particular responsibility to ensure that diversity and inclusion are embedded across all of its activities and are part of the culture of the organisation.
The Society’s Diversity Committee regularly monitors statistics on diversity across the Society’s activities and publishes an annual data report. The Society is committed to making diversity and inclusion a priority, both within our own organisation and across the scientific landscape. The Society’s Diversity Strategy for 2019 – 2022 sets out how the Royal Society will use its convening power and leadership, in partnership with others, to increase diversity in STEM and build a more inclusive scientific community. The Diversity Committee, a Standing Committee of Council, keeps under review and makes recommendations to Council on the diversity strategy. The Committee also oversees the delivery of a programme of activities by the Society in line with this strategy.
As an employer, the Society is committed to providing an environment free from discrimination,
bullying, harassment or victimisation and to creating a culture of inclusivity where individual differences and the contributions of all staff are recognised and valued. The Society provides equality of opportunity for all and will not tolerate discrimination on grounds of age, disability, gender reassignment, marriage and civil partnership, pregnancy and parenthood, race, religion or belief, sex or sexual orientation. The Society regularly surveys staff in staff surveys and in exit interviews on matters of diversity and inclusion, specifically any issues they have witnessed or would like to report.
There are new challenges with recruiting staff during the COVID-19 pandemic, particularly where a key part of the recruitment and selection process is the ability for both the candidate and employer to have the opportunity to meet in person. Recruitment processes have been amended to ensure they still meet the high standards of good recruitment practice; these processes now include a greater use of the digital and online platforms available to us. The Society’s recruitment and selection process has been adjusted to reflect practical requirements to uphold our commitment to equal opportunities and continue to attract candidates from diverse backgrounds.
## **Remuneration policy**
The aim of the Society’s remuneration policy is to maintain sustainable, fair levels of pay at the same time as attracting and retaining the right people to deliver our charitable objectives. In setting appropriate levels of senior management pay, the Society considers the skills, experience and competencies required for each role, and the remuneration level for those roles in sectors where suitable candidates would be found.
Remuneration packages for all staff are benchmarked from time to time using proprietary pay surveys. The annual inflationary increase provided to all staff and senior management pay are agreed by the Society’s Remuneration Committee. The last review of pay structures was undertaken during 2018.
All Trustees are unremunerated.
## **Gender pay gap reporting**
The Society has voluntarily completed gender pay gap reporting in order to better understand how it compares with other organisations. At the ‘snapshot’ date of 5 April 2020, the mean gender pay gap was −2.54% and the median gender pay gap was 9.32% compared with the national average of 16.62% and 16.55% respectively, as reported on the Gender Pay Gap website as at 29 April 2021.
## **Gender gap reporting**
On 5 April 2020, we employed 208 full-pay relevant employees (2019:212):
**62.5% 37.5%** Women (2019: 64%) Men (2019: 36%)
## **Median**
## **Lower quartile:**
## **Lower middle quartile:**
**----- Start of picture text -----**
men earn Women paid 1% less than men Women paid 1% less than men
9.32% more (2019: 6% less than men) (2019: 2% less than men)
than women
(2019: 10.41%)
62% 38% 71% 29%
UK median
16.55% less
than men
(2019: 15.89%)
(2019: 68%) (2019: 32%) (2019: 70%) (2019: 30%)
**----- End of picture text -----**
## **Upper middle quartile:**
## **Upper quartile:**
## **Mean**
**----- Start of picture text -----**
women earn Women paid 2% more than men Women paid 8% more than men
2.54% more (2019: 1% more than men) (2019: 22% more than men)
than men
(2019: 4.61%)
54% 46% 63% 37%
UK average
16.62% less
than men
(2019: 16.80%)
(2019: 55%) (2019: 45%) (2019: 64%) (2019: 36%)
**----- End of picture text -----**
**Note:** gender pay gap percentages referenced in quartiles are based on mean calculations. The reported quartiles represent an equal number of employees in each quartile, from the highest paid to the lowest paid. The upper quartile represents the highest paid employees.
THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **41**
**40**
## **Financial review**
## **Overview**
In the year to 31 March 2021, the Society’s income before exceptional items increased by 3%, from £129.8 million to £133.9 million. The majority of the Society’s income came from charitable activities, which increased by 6% during the year to £127.1 million (2020: £120.1 million). Total expenditure increased by 4% on the prior year from £133.7 million to £138.4 million, as the Society has continued to expand its charitable programme. Expenditure on charitable activities increased from £129.3 million to £136.3 million and has risen to around 98.5% of total expenditure from around 97% in 2020. Income from investments has decreased from the previous year to £4.9 million (2020: £6.9 million).
In March 2020, due to the COVID-19 pandemic, the Society closed its buildings to Fellows, staff, conferencing clients and other visitors. Although the building closed, the business of the Society has continued with staff working remotely, wherever possible. In line with Government advice, Chicheley Hall closed on 23 March 2020 and did not reopen during the financial year. The sale of Chicheley Hall was completed in March 2021. The net income on the sale was £2.2 million.
**----- Start of picture text -----**
Total income before exceptional item
**----- End of picture text -----**
**----- Start of picture text -----**
Change
£129.8m £133.9m
3%
2020 2021
**----- End of picture text -----**
**----- Start of picture text -----**
Total expenditure
**----- End of picture text -----**
**----- Start of picture text -----**
Change
£133.7m £138.4m
4%
2020 2021
**----- End of picture text -----**
## **Grants for charitable activities**
**----- Start of picture text -----**
Change
£108.5m £119.0m
10%
2020 2021
Income from investments
£6.9m £4.9m
Change
−29%
2020 2021
**----- End of picture text -----**
The financial impact of the building closure was relatively small and work was replanned where possible, however there was a significant reduction in some of the Society’s activities. The areas most affected are those that perform trading or public-facing programmatic activities. Some meetings and events were moved to virtual platforms, however others were cancelled or postponed. There was a significant upturn in investment markets following the fall in the prior year caused by the COVID-19 pandemic, resulting in a net gain in investments and overall net income for the year.
||**2021**|2020|
|---|---|---|
||**£m**|£m|
|Expenditure on raisingfunds|**2.1**|4.4|
|Expenditure on charitable activities|**136.3**|129.3|
|**Total expenditure**|**138.4**|133.7|
Income from donations and legacies Income from donations and legacies increased by £1.1 million to £1.9 million, mainly due to a donation received to support the Society’s COVID-19 response work.
## **Income**
Income from charitable activities
Most of the year-on-year increase in income relates to the increase in grants for charitable activities, which rose to £119.0 million (2020: £108.5 million). There were increases in the Society’s core grant from BEIS from £47.1 million in 2020 to £48.0 million in 2021, the Investment in Research Talent Fund (IRTF) from £31.6 million in 2020 to £39.3 million in 2021 and under the BEIS Global Challenges Research Fund (GCRF) from £15.0 million in 2020 to £18.6 million in 2021. Additional funding of £0.9 million (2020: £Nil) was received from BEIS to fund costed extensions to ease the impact of the COVID-19 pandemic on researchers funded by the Society.
## **Expenditure**
The Society undertakes a broad range of activities that provide public benefit either directly or indirectly, in line with our strategic priorities. Read more on the Society’s public benefit statement on page 10.
Expenditure on charitable activities The majority of the Society’s charitable expenditure relates to grant awards, this year accounting for £115.1 million (2020: £102.5 million). The expansion of the grant programme included an increase in the value of grants awarded under existing schemes, most significantly in the University Research Fellowships (URF) programme, which increased by £7.6 million to £52.6 million (2020: £45.0 million); the FLAIR Fellowships, which rose by £4.9 million to £9.6 million (2020: £4.7 million); the Dorothy Hodgkin Fellowships, which increased by £1.3 million to £7.7 million (2020: £6.4 million); and Royal Society Research Professorships, which rose by £1.3 million to £15.2 million (2020: £13.9 million).
The increase in the IRTF expanded the number of grants awarded under existing programmes. The GCRF supports the Future Leaders – African Independent Research (FLAIR) Fellowships, which launched in May 2018; in the year ended 31 March 2021, the number of FLAIR Fellows increased from 29 in 2020 to 59 in 2021, although the coming year will be the last year of the scheme.
Trading in furtherance of charitable objectives decreased by £3.5 million to £8.0 million (2020: £11.5 million) due to the closure of the Society’s buildings and suspension of conferencing activities.
**42** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **43**
**Financial review** continued
## **Expenditure on charitable activities, £m**
**----- Start of picture text -----**
140
Promoting science
and its benefits
120
Providing scientific
advice for policy
100
Education and public
engagement
80 Fostering international
and global cooperation
Supporting and recognising
60 excellence in science
40
20
0
2017 2018 2019 2020 2021
**----- End of picture text -----**
The funding received under GCRF has enabled the Society to fund more international URFs and establish a new grant programme for funding and supporting research in sub-Saharan Africa called Future Leaders – African Independent Research (FLAIR) Fellowships. FLAIR aims to support early career researchers who are transitioning into an independent research career. In March 2021, the Society was notified that the UK Government’s overseas development aid budget was to be cut, leading to a decrease in the Society’s BEIS ODA funding for the 2021/22 year and therefore a reduction in the Society’s ODA funded programmes.
Aside from grants activity, expenditure on providing scientific advice for policy decreased slightly from £4.3 million in 2020 to £4.0 million in 2021. The Society’s work in this area focused particularly on biodiversity and climate change, animate materials, and on work to develop and provide advice to the UK Government through the COVID-19 pandemic.
digitally at a lower cost as a result of the pandemic. Spend in the year includes expenditure on a number of events, including the first online Summer Science Exhibition, a series on online COVID-19 themed events and a series of five videos focusing on different aspects of science in partnership with _BBC Ideas_ .
Expenditure on education and public engagement decreased slightly from £4.5 million in 2020 to £4.1 million in 2021. The decrease in spend is due to the delay in public engagement events or events replanned to take place
## **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. Further information is available online.
**----- Start of picture text -----**
1. Applicants submit
8. The grant programmes are their proposal.
evaluated on a routine basis (approx.
every five 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.
**----- End of picture text -----**
Further information is available at royalsociety.org/grants/applications
**----- Start of picture text -----**
OTHER INFORMATION
**----- End of picture text -----**
THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **45**
**44**
**Financial review** continued
Grants made by the Society fall into two broad classes as follows:
## (1) Fellowships
- early career fellowships, professorships;
- senior fellowships, and support for innovation; and
- (2) Research grants
- research grants, collaboration;
- travel grants;
- capacity-building grants;
- education-related grants.
Grant applications are assessed by means of a peer-review process and consideration by a panel of experts comprising Fellows of the Royal Society and other senior scientists. Each panel is chaired by a Fellow of the Society.
## **Chicheley Hall – Royal Society Trading Limited**
The trading subsidiary recorded a loss of £0.2 million in the year (2020: loss of £0.2 million). In the prior year, Council decided to progress with the sale of Chicheley Hall and the sale was completed in March 2021. In line with Government advice, Chicheley Hall closed on 23 March 2020 and did not reopen during 2020/21.
Following several years of trading losses and Council’s decision to sell Chicheley Hall, it was no longer deemed possible to recover payment of the intercompany debtor between the Society, as the parent charity, and Royal Society Trading Limited. The outstanding debt was formally waived in both the parent and subsidiary accounts and the Society agreed to support the winding down of activities of the trading company. During 2020/21, costs were incurred in arrangements
for the closure of the Chicheley Hall business and the preparation for the sale of the property. The debt waiver has been treated as a capital contribution directly to shareholders’ funds in the subsidiary of £0.5 million (2020: £0.8 million).
As the company has ceased trading, the financial statements of Royal Society Trading Limited for the year ended 31 March 2021 have been prepared on a basis other than that of the going concern basis.
## **Royal Society (London) Ltd**
Royal Society (London) Ltd was set up in 2013 to process corporate sponsorships at the Society. The company commenced trading in 2019 and had income of £0.1 million (2020: £0.1 million).
## **Pension and Life Assurance Plan of the Royal Society**
The Society operates a defined benefit pension scheme which was closed to new members in 2014.
The valuation of the scheme at 31 March 2021 showed a deficit of £12.2 million (2020: £10.7 million). This represents the difference between the assets and the obligations of the fund rather than an immediate cash liability. The increase in deficit was mainly driven by changes to actuarial assumptions resulting from changes in market conditions increasing the liabilities partly offset by assets returning in excess of interest; a change in mortality assumptions used reducing the liabilities; and the payment of deficit funding contributions in the year of £1.3 million. In accordance with FRS 102, the actuarial losses on the scheme of £2.5 million (2020: £0.8 million gain) have been taken to unrestricted funds.
A triennial valuation of the scheme at 1 January 2019 was agreed during 2019/20. This showed an increase in the ‘technical provisions’ deficit from £3.7 million to £8.7 million and it was agreed with the Trustees that the Society will pay deficit payments of £1.3 million per annum under a seven-year recovery plan. Current budgets and forecasts indicate that the Society will be able to meet these contributions as they arise.
## **Investment policy and performance**
On 23 March 2016, Council passed a resolution under Section 104A(2) of the Charities Act 2011 to adopt the use of total return in relation to its permanent endowments with the exception of the Theo Murphy Australia Fund in order to best enable it to be even-handed between current and future beneficiaries.
The Society does not invest in organisations which conflict with the charity’s purpose, or where Council deem that to do so would hamper the charity’s work, for example by alienating those who support the Society financially. Council resolved that the Society should not invest in companies or funds that derive a significant portion of their income from the sale or manufacture of tobacco products. The Society ensures that performance is managed against appropriate benchmarks. Income from investments for the year was £4.9 million (2020: £6.9 million). The value of the Society’s investment portfolio increased in the year, from £234.1 million in 2020 to £297.3 million in 2021. The increase was due to a recovery in investment markets, which had fallen at the end of the previous financial year due to the COVID-19 pandemic.
## **Reserves**
The total funds of the Society increased by £57.3 million to £334.6 million during the financial year, mainly due to the gain on investments. Free reserves are unrestricted reserves (after the pension deficit) less heritage assets and fixed assets. The Society holds free reserves so that it can respond to unforeseen charitable opportunities and continue to honour existing commitments in the event of a shortfall of income. The Society’s policy is to review its income streams and expenditure commitments on an annual basis, and assess the main financial risks faced by the Society and their associated likelihood in order to develop a risk-based reserves level. The target level was set cognisant of the risks associated with the changes in the publishing landscape and volatility in investment markets which may affect returns.
At the balance sheet date, the value of the Society’s free reserves was £26.2 million (2020: £16.8 million), well above the target level of £15.0 million. The Society continues to develop longer-term strategies to increase its charitable activities in a sustainable way, which will reduce the level of reserves while ensuring that it has adequate resources to enable it to respond to emerging risks and opportunities.
||**2021**|2020|
|---|---|---|
||**£m**|£m|
|Unrestricted funds|**85.4**|80.4|
|Unrestricted intangible and tangible fxed assets|**(10.0)**|(14.1)|
|Heritage assets|**(49.2)**|(49.5)|
|**Free reserves**|**26.2**|16.8|
## **Enterprise Fund (Amadeus RSEF LP)**
## **Modern Slavery Act**
The Society is committed to taking the appropriate measures to reduce the risk of slavery and human trafficking taking place in our organisation or our supply chains. Pursuant to Section 54 of the Modern Slavery Act 2015, the Society has published its slavery and human trafficking statement for the financial year ended 31 March 2021.
The Royal Society Enterprise Fund was created with the aim of becoming a financially successful contributor to early-stage sciencebased companies in the UK and a role model for the translation of excellent science for commercial and social benefit. Due to the dual benefits expected to be received, the fund is accounted for as a mixed motive investment in the financial statements. The Society entered into a Limited Partnership Agreement with Amadeus Capital Partners in 2014 to create the Amadeus RSEF LP.
Further information is available online.
## **Going concern**
During 2019/20, Council decided to progress a sale of Chicheley Hall and, as a result of the pandemic, the trading activities of Royal Society Trading Limited ceased. The sale of Chicheley Hall was completed in March 2021. As the company has ceased trading, the financial statements of Royal Society Trading Limited for the year ended 31 March 2021 have been prepared on a basis other than that of the going concern basis.
## **Statement of policy on fundraising**
Section 162a of the Charities Act 2011 requires the Society to make a statement regarding fundraising activities because it is subject to an external audit. We do not use professional fundraisers or ‘commercial participators’ or indeed any third parties to solicit donations. We are therefore not subject to any regulatory scheme or relevant codes of practice, nor have we received any complaints in relation to fundraising activities nor do we consider it necessary to design specific procedures to monitor such activities.
The Trustees consider that there are no material uncertainties about the Society and Royal Society (London) Ltd to continue as a going concern. This conclusion has been reached after careful consideration of future forecasts which take into account the ongoing impact of COVID-19. The Society manages uncertainties through risk management processes with mitigations in place for key risk areas, and has a robust reserves position and availability of liquid assets in cash at hand and as cash within the investment portfolio.
**46** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **47**
## **Principal risks and uncertainties**
Key strategic Status Risk priorities at risk Management of risk
Council is responsible for ensuring that proper arrangements are in place for risk management. Council relies principally on the Audit Committee, supported by the internal auditors, KPMG LLP, to assess those arrangements and to advise it accordingly.
The Audit Committee considers regular reports on risk-management systems and management of major risks. Council considers regular reports from the Audit Committee and reviews management of major risks, including using its own risk register. The risk registers of the Society’s sections are also updated periodically and used in managing and monitoring risks and communicating information about risks across the organisation.
Council and senior staff reflect frequently on uncertainties and risks to achieving the Society’s goals and the effectiveness of the various means it employs to mitigate those risks. They are also vigilant in identifying new risks and taking steps to address them. Actions and processes often contribute to mitigation of several risks simultaneously. The Society works assiduously to develop and maintain relationships to ensure that its activities remain relevant, that its contributions are effective and that the value of its work is recognised. The Society enjoys many beneficial relationships through its Fellows, Foreign Members and staff.
In March 2020, due to the COVID-19
pandemic, the Society closed its buildings to Fellows, staff, conferencing clients and other visitors. Although the buildings closed, the business of the Society continued with staff working remotely, wherever possible. In line with Government advice, Chicheley Hall closed on 23 March 2020. Following the decision to dispose of Chicheley Hall in 2020, the property was sold in March 2021. The risk register was regularly reviewed during the period in response to developments in the external landscape, in particular the COVID-19 pandemic and the operational changes required to continue the Society’s work and support the Society’s staff. The findings of these reviews were that the impact did not expose the Society to unduly high levels of risk.
The main risks identified by Council and actions taken to manage them, including ongoing actions, are described in the table.
## **Key**
Status of risk
High risk
Medium risk
Only significant risks are presented in the table, therefore none have been rated as low risk
Change of status
Increased risk
No change
Decreased risk
Key strategic priorities at risk
- Promoting excellence in science
- Supporting international scientific collaboration
Demonstrating the importance of science to everyone
## **Business continuity**
Events adversely impact reputation and/or operations, including loss of operations due to a major incident (cyber-attack, serious data security breach, a serious fraud, major health and safety incidents, internal control failures or an outbreak of a communicable disease).
## **Strategy delivery**
The Society’s strategy does not clearly articulate objectives to allow effective prioritisation of work, which means the Society commits to work beyond its resource capacity; therefore, the Society does not deliver against its mission and does not act effectively in its three key roles as a charity, fellowship and national academy of science.
## **Public benefit recognition**
The Society does not ensure the effectiveness of its work, fails to remain relevant and/or address important issues as they arise, including Environmental, Social and Governance considerations, and does not ensure that its public benefit is recognised by stakeholders.
- Engage senior-level management, committees and Council in policy setting and monitoring.
- Regular review and update of information security policies and procedures.
- Regular review and update of business continuity and disaster recovery plans to help minimise disruption to operations from unexpected events.
- The Society has a system of committees that report to Council and are responsible for key areas of the Society’s work.
- • Early planning for the formulation of the 2022 – 2027 strategy with increased focus on financial and risk considerations.
- • Regular meetings of the Officers and regular communication from the Officers to Council.
- • Specifically during the current pandemic, the Officers actively consider the latest Government advice and the impact on the Society’s work programme with reprioritisation and diversion of resources to the areas of the biggest current need.
- Internal audit of Governance arrangements was performed in the year and actions for improvements were agreed.
- As the national academy of science, the Society has provided science policy advice to Government during the pandemic.
- The Society has run public engagement activities to communicate with the public on key areas in relation to the pandemic.
- The Society’s role in providing science policy advice to Government and the publication of science policy reports during the pandemic has been communicated through mainstream media and to key stakeholder groups through targeted communication.
- New programmes of work are approved by Council, who have oversight over all work at the Society and set the Society’s strategy.
- Regular meetings of the Officers and regular communication from the Officers to Council.
- Oversight of the Society’s activities by Fellows with relevant experience.
- Early planning for the formulation of the 2022 – 2027 strategy to include considerations of ways of demonstrating public benefit effectively.
- Effective project initiation and project management processes.
- Specifically during the pandemic, engagement with Fellows and peers to enable participation in initiatives to support scientific analysis and provide scientific advice to the Government.
**48** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **49**
**Principal risks and uncertainties** continued
||Key strategic||Status|Status|
|---|---|---|---|---|
|Risk|priorities at risk|Management|of risk||
|**International collaboration**||• Continue to work with many partners, in the UK, the rest of|||
|Political developments in major||Europe and globally.|||
|international science partners, or||• Advocate and promote future arrangements for international|||
|between UK and major international||collaboration and the desire to work globally, and the ability of|||
|science partners, have negative impacts||the UK to continue to attract outstanding scientists from|||
|on the UK science system. This could||overseas, funding for UK science and regulatory matters.|||
|lead to funding cuts to foreign partners||• Maintain strong dialogue with the Government on the most|||
|or their withdrawal from international||challenging issues.|||
|agreements and collaboration||• Promote good research culture and values of science which|||
|arrangements and a drop in foreign||promote good collaboration.|||
|applications for Royal Society grant||• Provide advice and build relationships.|||
|awards.|||||
|**Governance structure**||• Oversight of election process by Ofcers and other Council|||
|Governance structure fails to provide||members.|||
|the right level and diversifcation of||• Clear role descriptions for Ofcers and Council members.|||
|expertise to make decisions and run the||• Identify potential members with broad Trustee experience.|||
|Society efectively.||• Include non-Fellows with relevant expertise on Society|||
|||committees.|||
|||• Continue to enable willing Fellows to contribute to the Society’s|||
|||work.|||
|||• Provide induction and ongoing training and workshops from|||
|||legal and audit specialists.|||
|||• Complete regular board efectiveness reviews.|||
|||• Engage with internal and external audit functions to provide|||
|||support as appropriate.|||
|||• Specifcally, internal audit review of Governance arrangements|||
|||began in the year and actions for improvements will be agreed.|||
|**Employees**||• External consultancy frm engaged to review the efectiveness|||
|Talented staf not recruited, developed||of the structure of the organisation and structure change|||
|and retained.||recommendations implemented.|||
|||• Ongoing benchmarking of compensation and benefts to the|||
|||rest of the sector.|||
|||• Employee engagement surveys informing areas of change.|||
|||• Schedule of internal courses available for employees.|||
|**Quality of the science**
Dilution in the quality of the science||• Grants Committee formed of experts in subject area, making
them best placed to select applications of ‘excellent science’.|||
|funded by grants and/or failure to apply||• Ongoing review of performance against strategy.|||
|the available resources to activities that||• Policies and procedures in place to govern decision-making|||
|are of the highest quality and are likely||processes.|||
|to have the most valuable impact to||• Periodic scheme evaluations to ensure oferings remain relevant|||
|further the Society’s strategic aims.||and competitive.|||
||Key strategic||Status|Status|
|---|---|---|---|---|
|Risk|priorities at risk|Management|of risk||
|**Safeguarding**||• Processes adapted to refect safeguarding considerations for|||
|The Society does not efectively||activities performed in a newly virtual format.|||
|safeguard its people or those with||• Relevant and appropriate policies are in place, and regular|||
|whom it comes into contact.||review of such policies.|||
|||• Internal safeguarding working group and safeguarding ofcers|||
|||appointed.|||
|||• Council member with designated responsibility for|||
|||safeguarding.|||
|||• Agree a code of conduct for staf, Fellows and other relevant|||
|||stakeholders.|||
|||• Specifcally during the pandemic, monitor Government advice|||
|||and opportunities for support, and produce plans for a return to|||
|||work in the ofce based on advice and scientifc evidence once|||
|||available.|||
|**Reduction in funding**||• Strengthen existing relations and develop new relationships,|||
|Funding reduced or remaining static has||seeking to secure additional funding and diversify sources of|||
|a negative impact on the Society’s||funding.|||
|ability to support excellent science. A||• Improve arrangements for fnancial planning.|||
|reduction of income could be due to a||• High levels of discretionary expenditure that do not have a|||
|reduction in funding from Government,||long-term commitment attached to them and grant awards|||
|reduced income generated by||include termination clauses in the event of funding withdrawal.|||
|publishing activities due to open access||• Contingency planning for potential future changes in funding.|||
|journals strategy, failure of trading||• Specifcally during the current pandemic, the Ofcers actively|||
|activities to perform and/or reduced||consider the latest Government advice and the impact on the|||
|investment returns due to fnancial||Society’s work programme with reprioritisation and diversion of|||
|crises.||resources to the areas of the biggest current need, and|||
|||utilisation of opportunities for support where appropriate.|||
|**Investment performance**||• Review of investment-management arrangements.|||
|The economic climate and inherent||• Regularly review the investment portfolio and performance of|||
|uncertainties in performance give rise to||the investment manager.|||
|the risk that investments are not||• Appropriate legal advice sought and followed.|||
|properly safeguarded or perform poorly,||• Trained and competent staf in senior positions, and professional|||
|including those in the DB pension||pension Trustees appointed.|||
|scheme.|||||
|**Diversity**||• Active agenda to positively infuence and encourage|||
|Narrow representation due to lack of||engagement from under-represented groups.|||
|diversity in the Fellowship, Council,||• Unconscious bias training provided to those in positions|||
|grant applicants and general science||to make decisions.|||
|arena.||• Continual consideration and engagement with experts in|||
|||relevant felds.|||
**50** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **51**
**Principal risks and uncertainties** continued
## **Governance**
||Key strategic||Status|
|---|---|---|---|
|Risk|priorities at risk|Management|of risk|
|**Infuence and support**||• Regular communication with the Fellowship and other||
|The Society loses infuence and
support, and the Fellowship does not||key stakeholders.
• Implement a new customer relationship management||
|support the activities of the Society.||system to more efectively track and monitor communications||
|||and contributions.||
|||• Specifcally during the pandemic, engagement with Fellows||
|||and peers to enable participation in initiatives to support||
|||scientifc analysis and provide scientifc advice to the||
|||Government.||
|**Legal and regulatory requirements**||• Appropriate legal advice sought and followed.||
|The Society does not comply with legal
and regulatory requirements.||• Trained and competent staf in senior positions.
• Approved policies and procedures with signifcant exceptions||
|||reported to the Audit Committee.||
|||• Internal and external audit functions in place.||
|**National decision making**||• Regular communication with the Fellowship and other||
|Decisions and actions by the UK||key stakeholders.||
|Government have a negative impact on||• Strengthen existing relations with key stakeholders,|(New)|
|the Society’s work and ability to||including partners and funders.||
|achieve its strategy.||• Transparent communication on the Society’s position on||
|||key areas.||
## **Council**
## **Structure and management**
The Charter specifies that Council must have between 20 and 24 members, each of whom must be a Fellow of the Society. Council determines the strategic direction of the Society and in particular approves the Society’s strategic plan. Council also approves plans for specific charitable programmes on the recommendation of relevant committees, and those committees oversee activities within the programmes on behalf of Council. There are currently 23 members.
The Society is a registered charity and Council is the Trustee body under charity law. The Society was founded in 1660 and incorporated by Royal Charter. A Supplemental Charter was granted in 2012, and that now serves as the Society’s governing document. The governing body of the Society is its Council, whose members are elected by and from the Fellowship.
Under the Charter, Council ‘shall and may have full authority, power, and faculty from time to time to draw up, constitute, ordain, make, and establish such laws, statutes, acts, ordinances, and constitutions as shall seem to them, or to the major part of them, to be good, wholesome, useful, honourable, and necessary, according to their sound discretions, for the better Government, regulation, and direction of the Royal Society aforesaid, and of every Member of the same, and to do and perform all things belonging to the Government, matters, goods, faculties, rents, lands, tenements, hereditaments, and affairs of the Royal Society aforesaid.’
Members of Council are all Fellows, and therefore bring primarily scientific expertise to the role. The Society works to ensure that Council has access to excellent advice from staff and other professional advisers in providing them with support that is needed to perform the range of their duties as Trustees.
## **Membership of Council**
Among the members of Council are the President, who is the Chair of Council, and four Officers: the Biological Secretary, the Foreign Secretary, the Physical Secretary and the Treasurer. During the year there were also 18 so-called Ordinary
Members. The President and the
Officers normally serve five-year terms and the Ordinary Members serve three-year terms.
With a view to increasing the diversity of Officers, the Charity Commission approved the application submitted by Council to make grants to Officers’ parent institutions to reimburse some of the costs that arise from the significant time commitment involved in Officers’ roles. This initiative is expected to bring more diversity to the field from which Officers, who will continue to be unpaid by the Society, is drawn.
Changes in the membership of Council took place as usual on 30 November, which is the Society’s Anniversary Day. The new members received an induction that included a review of relevant documents and presentations on Trustee duties by a partner in a leading charity-law practice. During the year, Council also received guidance from professional advisers on specific matters and updates on relevant developments affecting charities and Trustees. Council delegates responsibility for day-to-day management of the Society’s affairs to the Executive Director.
There have been 62 Presidents of the Royal Society since it was founded in 1660. Previous Presidents of the Royal Society have included Christopher Wren, Samuel Pepys, Isaac Newton, Joseph Banks, Humphry Davy and Ernest Rutherford. The new President of the Society, Sir Adrian Smith, took up the post on 30 November 2020 as the term of the previous President, Sir Venki Ramakrishnan, came to an end.
**Left:** The Royal Society’s Charter Book features the signatures of its founding members.
**52** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **53**
## **Governance** continued
## **Public benefit**
Fellows are not remunerated for serving as Trustees. Council has complied with its duty to have due regard to the Charity Commission’s public benefit guidance when exercising any powers or duties to which that guidance is relevant. Information about public benefit provided by the Society is presented in this report.
## **Committees**
The Society is supported by a wide range of committees and working groups. These include committees that oversee key strands of the Society’s work, committees that make recommendations to Council of recipients of medals and awards and committees that assess applications for and make grant awards. All Standing Committees have terms of reference agreed by Council that set out the delegations of responsibility to that committee and, for the majority, a member of Council sits on the committee. The committee structure diagram on the following page illustrates the Society’s committee structure by type of business and provides additional information on committees relevant to central business on finance, planning and subsidiaries.
## **Key business in the year**
In the year, Council received regular reports from the Executive Director and Board as well as reports from key committees, including Audit Committee; Diversity Committee; Education Committee; Hooke Committee; Nominations Committee; Planning and Resources Committee; Public Engagement Committee; Publishing Board; Science, Industry and Translation Committee; and Science Policy Committee.
In line with Government advice, Chicheley Hall closed on 23 March 2020. The Society concluded a review of operations at Chicheley Hall in the previous financial year and Council decided to progress with a sale of the property. The sale of Chicheley Hall was completed in March 2021.
All of the considerations of Council in the year have been made in the context of the COVID-19 pandemic and the rapidly evolving landscape of significant change in ways of working, the research system and the UK’s position globally. The Society has played a significant role in the development and provision of advice to the UK Government through the COVID-19 pandemic. Council has continually supported and reviewed the Society’s work in this area and has reflected on issues that have arisen from the pandemic.
Over 1,100 mission related meetings COVID-19 pandemic. Council has were held at Chicheley Hall by the continually supported and reviewed Royal Society and others. There were the Society’s work in this area and has reflected on issues that have no meetings or in-person events held during the 2020/21 year and plans for arisen from the pandemic. 2021/22 include the continued use of The President and Officers of the virtual platforms until it is safe to allow Society increased the frequency of in-person meetings. Going forward their meetings to enable rapid the Society will consider use of a consideration of emerging advice and broader range of venues for its the ability for rapid decision making. meetings and events with the aim In October 2020, a limited reopening of encouraging broader and more of the Society’s buildings to staff was diverse participation and reducing agreed. The decision was made environmental impact. following review of UK Government and scientific advice and in Council continued to review the consideration of staff for whom processes surrounding the election of Fellows and Foreign Members with working at home is most challenging. The advice from Government is under a focus on increasing the diversity of the Fellowship, and equality, diversity continuous review and plans to and inclusion was also considered reopen and close the Society’s offices have been amended in the wider context of the research system. There was also further accordingly, with a precautionary consideration of the impact on approach applied to minimise the risk to Fellows, staff and the general science and science funding following the UK’s decision to leave public.
and scientific advice and in Council continued to review the consideration of staff for whom processes surrounding the election of Fellows and Foreign Members with working at home is most challenging. The advice from Government is under a focus on increasing the diversity of the Fellowship, and equality, diversity continuous review and plans to and inclusion was also considered reopen and close the Society’s offices have been amended in the wider context of the research system. There was also further accordingly, with a precautionary consideration of the impact on approach applied to minimise the risk to Fellows, staff and the general science and science funding following the UK’s decision to leave public. the EU and the latest Comprehensive In the previous financial year, Spending Review by the Government. following careful consideration of the Council reviewed the Society’s course of the COVID-19 pandemic at safeguarding policy, considered and the time, Council made the decision agreed the Council risk register, and to implement a closure of the Society’s buildings to Fellows, staff, approved the Society’s budget for the 2021/22 financial year. conferencing clients and other visitors. During the 2020/21 financial year, Council was given frequent updates and consulted upon the Society’s policy response to COVID-19 and the impact of COVID-19 on Royal Society business.
## **Committee structure**
## **Council**
The Trustee body under charity law. Council has a system of committees and determines the memberships of committees, which comprise Fellows and many non-Fellows with relevant expertise. Delegations of authority by Council are explicit in the terms of reference of committees.
**Board Fellowship** A subcommittee of **committees** Council comprising The members of Council, the President and the Fellows and Foreign Officers. Board oversees Members are elected by fundraising and considers the Fellowship. Council on behalf of Council determines the candidates matters that require urgent for election on the attention and matters, advice of its Nominations such as international Committee and sectional affairs, that span many committees. programmes. The sectional committees span the scientific disciplines and a committee to advise on general and honorary candidates whose contributions to science are not primarily in research.
**Financial, planning Programme and subsidiary committees committees** There are programmes Committees make and associated recommendations to committees in diversity, Council for approval in a range of areas, and translation, prizes, including financial public engagement, planning and budgeting, publishing, science policy the effectiveness of the and scientific meetings, Society’s internal control among others. If they are system, external audit not themselves members and financial statements, pay-related matters and committees are invited to trading activities. attend specific Council
There are programmes and associated committees in diversity, education, grants, industry and translation, prizes, public engagement, publishing, science policy and scientific meetings, among others. If they are not themselves members of Council, Chairs of these committees are invited to attend specific Council meetings to present reports.
**Audit Committee Investment Planning and Remuneration Trading** The Audit Committee **Committee Resources Committee subsidiary** approves the internal The Society’s **Committee** The Remuneration **boards** audit programme; Investment The Planning Committee considers The Board of Royal reviews internal audit Committee and Resources pay-related Society Trading reports and tracks advises Council Committee matters, including Limited oversees the implementation on investment monitors financial remuneration of activities undertaken of any actions policy, determines performance, key management by the trading arising; approves investment strategy oversees the personnel. subsidiary, whose the external audit and oversees the Society’s trading primary purpose is to plan; discusses the performance of the activities and the manage the running audit and matters Society’s investment provision of services of operations at arising from it with managers. and recommends the Chicheley Hall. the external auditors Society’s financial The Board of Royal and management; plan and its annual and makes budgets to Council Society (London) Ltd recommendations for approval. oversees the trading to Council in relation activities processed to the financial by the trading statements and subsidiary. associated matters.
**54** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **55**
## **Statement of Trustees’ responsibilities**
In preparing these financial statements, the Council members are required to:
The Council members (who are the Trustees of the Society) are responsible for preparing the Trustees’ annual report and the financial statements in accordance with applicable law and regulations.
Financial statements are published on the charity’s website in accordance with legislation in the UK governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the charity’s website is the responsibility of the Council. The Council's responsibility also extends to the ongoing integrity of the financial statements contained therein.
- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
Charity law requires the Council to prepare financial statements for each financial year in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under charity law the Council members must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and charity and of the incoming resources and application of resources, including the income and expenditure, of the group for that period.
- state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
The current Council members, having made enquiries of fellow Council members and the charity’s auditors, confirm that:
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in business.
- so far as they are aware, there is no relevant audit information of which the charity’s auditors are unaware; and
The Council members are responsible for keeping adequate accounting records that are sufficient to show and explain the charity’s transactions and disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 2011. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
- they have taken all reasonable steps they ought to have taken as Trustees in order to make themselves aware of any relevant audit information and to establish that the charity’s auditors are aware of that information.
This report was approved by Council on 6 July 2021 and signed on their behalf by:
**Adrian Smith** President of the Royal Society
## **Independent auditor’s report**
## **Opinion on the financial statements**
## **Basis for opinion**
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group and the Parent Charity in accordance with the ethical requirements relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In our opinion, the financial statements:
- give a true and fair view of the state of the Group’s and of the Parent Charity’s affairs as at 31 March 2021 and of the Group’s incoming resources and application of resources for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
- have been prepared in accordance with the requirements of the Charities Act 2011.
We have audited the financial statements of The Royal Society (‘the Parent Charity’) and its subsidiaries (‘the Group’) for the year ended 31 March 2021 which comprise the consolidated statement of financial activities, the consolidated and charity balance sheets, the consolidated statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
## **Conclusions related**
## **to going concern**
In auditing the financial statements, we have concluded that the Trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
## Based on the work we have
performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group and the Parent Charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
## **Opinion on other matter as required by BEIS grant letter**
Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.
In our opinion, in all material respects, the core and Investment in Research Talent Funding grant payments received from the Department for Business, Energy & Industrial Strategy (“BEIS”) have been applied for the purposes set out in the grant letters and in accordance with the terms and conditions of the grants.
## **Other information**
The Trustees are responsible for the other information. The other information comprises the information included in the Trustees’ report and financial statements, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
**56** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **57**
**Independent auditor’s report** continued
## **Matters on which we are required to report by exception**
We have nothing to report in respect of the following matters in relation to which the Charities Act 2011 requires us to report to you if, in our opinion:
- the information contained in the financial statements is inconsistent in any material respect with the Trustees’ report and financial statements; or
- adequate accounting records have not been kept by the Parent Charity; or
- the Parent Charity financial statements are not in agreement with the accounting records and returns; or
- we have not received all the information and explanations we require for our audit.
## **Responsibilities of Trustees**
As explained more fully in the Statement of Trustees’ responsibilities, the Trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Trustees are responsible for assessing the Group’s and the Parent Charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the Group or the Parent Charity or to cease operations, or have no realistic alternative but to do so.
## **Auditor’s responsibilities for the audit of the financial statements**
We have been appointed as auditor under Section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
## **Extent to which the audit was capable of detecting**
**irregularities, including fraud** Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
Based on our understanding of the Group and the industry in which it operates, we identified that the principal laws and regulations that directly affect the financial statements to be the relevant Charities Acts and the financial reporting framework in the UK. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement
items. We considered the Group’s and Parent Charity’s own assessment of the risks that irregularities may occur either as a result of fraud or error. We also considered financial performance, key drivers for bonus or other performance targets. We also considered the risks of noncompliance with other requirements imposed by the Charity Commission and we considered the extent to which non-compliance might have a material effect on the Group financial statements.
In addition, the Group and Parent Charity are subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: employment law, data protection and fundraising regulations. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of Those Charged with Governance and other management and inspection of regulatory and legal correspondence, if any.
Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries of the Audit Committee, management and internal audit, and a review of minutes of meetings of Those Charged with Governance. We made enquiries regarding any matters identified as a Serious Incident as reportable to the Charity Commission. We also performed analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.
We challenged assumptions made by management in their significant accounting estimates, in particular in relation to the assumptions related to the valuation of the defined benefit pension scheme and the assumptions related to the valuation of heritage assets.
We did not identify any matters relating to irregularities, including fraud. As in all of our audits, we also addressed the risk of management override of internal controls, including testing journals including those which potentially impact remuneration and other performance targets and evaluating whether there was evidence of bias by management or Those Charged with Governance that represented a risk of material misstatement due to fraud.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/ auditorsresponsibilities
This description forms part of our auditor’s report.
## **Use of report**
This report is made solely to the Charity’s Trustees, as a body, in accordance with the Charities Act 2011. Our audit work has been undertaken so that we might state to the Charity’s Trustees those matters we are required to state to them in an auditor’s 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 the Charity’s Trustees as a body, for our audit work, for this report, or for the opinions we have formed.
BDO LLP, statutory auditor Gatwick
Date:
BDO LLP is eligible for appointment as auditor of the Charity by virtue of its eligibility for appointment as auditor of a company under section 1212 of the Companies Act 2006.
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
**58** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **59**
## **Consolidated statement of financial activities** For the year ended 31 March 2021
## **Consolidated and charity balance sheets** As at 31 March 2021
(incorporating an income and expenditure account)
|||||Expendable|Permanent|2021|2020|
|---|---|---|---|---|---|---|---|
|||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|734|1,124|–|–|**1,858**|805|
|**Income from charitable activities**||||||||
|Grants for charitable activities|4|1,181|117,850|–|–|**119,031**|108,529|
|Tradingin furtherance of charitable activities|3|7,522|522|–|–|**8,044**|11,543|
|||8,703|118,372|–|–|**127,075**|120,072|
|Other tradingactivities|3|110|–|–|–|**110**|1,975|
|Income from investments|2|786|654|802|2,615|**4,857**|6,851|
|Other income||–|23|–|–|**23**|76|
|**Total income before exceptional item**||**10,333**|**120,173**|**802**|**2,615**|**133,923**|129,779|
|Exceptional net income frompropertysale|5|2,247|–|–|–|**2,247**|–|
|**Total income**||**12,580**|**120,173**|**802**|**2,615**|**136,170**|129,779|
|||||||||
|Expenditure on raisingfunds|6|1,191|303|127|474|**2,095**|4,412|
|**Expenditure on charitable activities**|7|||||||
|Promotingscience and its benefts||261|81|–|–|**342**|245|
|Supportingand recognisingexcellence in science||8,275|106,397|–|–|**114,672**|104,091|
|Providingscientifc advice forpolicy||1,945|2,099|–|–|**4,044**|4,265|
|Fosteringinternational andglobal cooperation||885|12,279|–|–|**13,164**|16,166|
|Education andpublic engagement||2,998|1,107|–|–|**4,105**|4,525|
|||14,364|121,963|–|–|**136,327**|129,292|
|**Total expenditure**||**15,555**|**122,266**|**127**|**474**|**138,422**|133,704|
|||||||||
|**Net (expenditure)/income before**||||||||
|**netgains/(losses) on investments**||**(2,975)**|**(2,093)**|**675**|**2,141**|**(2,252)**|**(3,925)**|
|Netgains/(losses)on investments|18|8,462|4,015|11,275|38,346|**62,098**|(23,774)|
|**Net income/(expenditure) for theyear**||**5,487**|**1,922**|**11,950**|**40,487**|**59,846**|**(27,699)**|
|Gross transfers between funds|23|1,986|1,834|(1,331)|(2,489)|–|–|
|Actuarial (losses)/gains on defned beneft||||||||
|pension scheme|25|(2,504)|–|–|–|**(2,504)**|780|
|**Net movement in funds**||**4,969**|**3,756**|**10,619**|**37,998**|**57,342**|**(26,919)**|
|||||||||
|Total funds brought forward||80,445|36,729|36,989|123,085|**277,248**|304,167|
|**Total funds carried forward**||**85,414**|**40,485**|**47,608**|**161,083**|**334,590**|**277,248**|
All of the above results are derived from continuing activities except those from Royal Society Trading Limited, which ceased trading on 23 March 2020. There are no other gains or losses other than those stated above. The income and expenditure in the consolidated statement of financial activities for the Group that relate to the discontinued trading subsidiary were £Nil (2020: £1.8m) and £0.2m (2020: £2.3m).
|Notes|Group
**2021**
**£’000**
2020
£’000|Charity|
|---|---|---|
|||**2021**
**£’000**
2020
£’000|
|**Fixed assets**|||
|Tangible assets
15B|9,727
14,074|9,727
14,074|
|Intangible assets
15A|228
–|228
–|
|Heritage assets
17|49,163
49,476|49,163
49,476|
|Investments
18|297,310
234,075|297,310
234,075|
||**356,428**
297,625|**356,428**
297,625|
|**Current assets**|||
|Stocks|21
40|21
26|
|Debtors receivable within oneyear
19|2,564
3,420|2,540
3,479|
|Cash at bank and in hand|6,790
4,759|6,788
4,487|
||**9,375**
8,219|**9,349**
7,992|
|Creditors: amounts fallingdue within oneyear
20|(18,951)
(17,750)|(18,925)
(17,253)|
|**Net current liabilities**|**(9,576)**
(9,531)|**(9,576)**
(9,261)|
|**Total assets less current liabilities**|**346,852**
288,094|**346,852**
288,364|
|Creditors: amounts falling due after
more than oneyear
20|(45)
(129)|(45)
(129)|
|**Net assets beforepension scheme liability**|**346,807**
287,965|**346,807**
288,235|
|Defned beneftpension scheme liability
25|(12,217)
(10,717)|(12,217)
(10,717)|
|**Total net assets**|**334,590**
277,248|**334,590**
277,518|
|Permanent endowment funds
23|161,083
123,085|161,083
123,085|
|Expendable endowment funds
23|47,608
36,989|47,608
36,989|
|Restricted funds
23|40,485
36,729|40,485
36,729|
||||
|**Unrestricted funds**|||
|Revaluation reserve
23|47,541
47,856|47,541
47,856|
|Defned beneftpension reserve
23|(12,217)
(10,717)|(12,217)
(10,717)|
|Unrestricted income funds
23|50,090
43,306|50,090
43,576|
|**Total funds**|**334,590**
277,248|**334,590**
277,518|
The financial statements were approved and authorised for issue by Council on 6 July 2021 and signed on its behalf by
**Sir Andrew Hopper** Treasurer
The consolidated statement of financial activities is for the Group as a whole. The Charity’s total income for the year was £136.1m (2020: £129.3m). The Charity’s total funds increased by £57.1m in the year (2020: £27.6m decrease).
The notes that follow form part of the financial statements.
**60** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **61**
## **Consolidated statement of cash flows** For the year ended 31 March 2021
|Notes|2021
2020
**£’000**
**£’000**
£’000|
|---|---|
|**Net cash used in operating activities**
A|**(6,432)**
(13,744)|
|||
|**Cash fows from investing activities**||
|Investment income
2|4,857
6,851|
|Purchase of intangible fxed assets
15A|(207)
–|
|Purchase of tangible fxed assets
15B|(492)
(1,983)|
|Proceeds from disposal of tangible fxed assets
15B|6,460
–|
|Purchase of heritage assets
17|(2)
(20)|
|Proceeds from disposal of heritage assets
17|14
–|
|Purchase of investments
18|(52,552)
(31,616)|
|Proceeds from sale of investments
18|50,385
33,863|
|**Net cashprovided by investment activities**|**8,463**
7,095|
|**Increase/(decrease) in cash and cash equivalents**|**2,031**
(6,649)|
|Cash and cash equivalents at 1 April|4,759
11,408|
|**Cash and cash equivalents at 31 March**|**6,790**
4,759|
A. Reconciliation of net income/(expenditure) to net cash flow from operating activities
||**2021**|2020|
|---|---|---|
||**£’000**|£’000|
|**Net income/(expenditure) asper the statement of fnancial activities**|**59,846**|(27,699)|
|Adjustments for:|||
|Depreciation and amortisation charges|15
1,172|1,262|
|(Gains)/losses on investments|18
(62,098)|23,774|
|Investment income|2
(4,857)|(6,851)|
|(Gains)/losses on the disposal of fxed assets|15B
(2,814)|1|
|Loss on the disposal of heritage assets|17
301|–|
|Investment management fees charged toportfolio|18
1,030|1,164|
|Decrease in stocks|19|3|
|Decrease in debtors|19
856|3,088|
|Increase/(decrease)in creditors|20
1,117|(8,362)|
|Donated heritage assets|17
–|(40)|
|Diference betweenpension charge and cash contributions|25
(1,004)|(84)|
|**Net cash used in operating activities**|**(6,432)**|(13,744)|
B. Analysis of changes in net debt
|B. Analysis of changes in net debt||||
|---|---|---|---|
||Balances at||**Balances at**|
||1 April||**31 March**|
||2020|Cash fows|**2021**|
||£’000|£’000|**£’000**|
|Cash at bank and in hand|4,759|2,031|6,790|
|**Total**|**4,759**|**2,031**|**6,790**|
## **Accounting policies** For the year ended 31 March 2021
The accounts of the subsidiary Royal Society Trading Limited have been prepared on a basis other than that of the going concern basis. This basis includes, where applicable, writing the company’s assets down to net realisable value. Provisions have also been made in respect of contracts which have become onerous at the reporting date. No provision has been made for the future costs of terminating the business unless such costs were committed at the reporting date.
The principal accounting policies adopted in the preparation of these financial statements are as follows.
## **Accounting convention**
The financial statements have been prepared in accordance with Financial Reporting Standard 102 – ‘The Financial Reporting Standard applicable in the 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 2019 (‘the SORP 2019 2nd Edition’) together with the reporting requirements of the Charities Act 2011.
## **Basis of consolidation**
These financial statements consolidate
the results of the Royal Society and its active wholly owned subsidiaries, Royal Society Trading Limited and Royal Society (London) Ltd, on a line-by-line basis. In the consolidated financial statements uniform accounting policies have been used, with the exception of Royal Society Trading Limited. A separate statement of financial activities for the charity itself is not presented.
The financial statements have been prepared under the historical cost convention with items recognised at cost or transaction value unless otherwise stated in the relevant accounting policy or note.
The accounts have been prepared on a going concern basis. This conclusion has been reached after careful consideration of future forecasts which take into account the ongoing impact of COVID-19. The Society manages uncertainties through risk management processes with mitigations in place for key risk areas, and has a robust reserves position and availability of liquid assets in cash at hand and as cash within the investment portfolio. The Royal Society (‘the Society’) is a Public Benefit Entity as defined by FRS 102. The accounting policies have been applied consistently throughout the financial statements and the prior year.
## **Cash flow statement**
The Society meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemption in relation to presentation of a cash flow statement in respect of its separate financial statements, which are presented alongside the consolidated financial statements.
## **Critical accounting judgements and key sources of estimation uncertainty**
In the application of the Group’s accounting policies the Trustees are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Judgements, estimates and associated assumptions are reviewed on an ongoing basis and are based on historical experience and other factors that are considered to be relevant, including expectations of future events that are believed to be reasonable under the circumstances.
Critical judgements relate to the accounting treatment of the multiemployer defined benefit scheme. Critical accounting estimates and assumptions relate to the defined benefit pension scheme and the valuation of heritage assets.
## Multi-employer defined benefit scheme
Certain employees participate in a multi-employer defined benefit scheme with other organisations. In the judgement of the Trustees, the Society does not have sufficient information on the plan assets and liabilities to be able to reliably account for its share of the defined benefit obligation and plan assets. In accordance with FRS 102 this is therefore accounted for as though it were a defined contribution scheme.
**62** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **63**
## **Accounting policies** continued
Defined benefit pension scheme The cost of the defined benefit pension scheme and the present value of the scheme liability depend on a number of factors, including assumptions about inflation, discount rates and mortality, which are taken by actuarial specialists. The valuation of the scheme is particularly sensitive to discount rate assumptions, with a 0.1% movement in the discount rate resulting in a £2.3m change in the value of the scheme liabilities.
Impairment of heritage assets Heritage assets held at valuation or cost totalled £49.2 million at 31 March 2021 (2020: £49.5 million) and a detailed impairment assessment was last performed in 2015. The valuation assumes that since 2015: (a) the physical condition of the assets has not deteriorated; and (b) there have not been any significant changes in the markets of these assets. A review of the indicators of impairment is undertaken annually and should this review identify any indicators, then a detailed impairment assessment would be undertaken. No indicators of impairment were identified in this annual review.
Royal Society Trading Limited Royal Society Trading Limited ceased to trade on the closure of Chicheley Hall on 23 March 2020 following Government advice due to the COVID-19 pandemic. Following the decision to progress with the sale of Chicheley Hall in 2020, the property was sold in March 2021. As the company has ceased trading, the financial statements of Royal Society
Trading Limited for the year ended 31 March 2021 have been prepared on a basis other than that of the going concern basis.
During the year, costs were incurred in arrangements for the closure of the Chicheley Hall business and the preparation for the sale of the property. Following several years of trading losses and Council’s decision to sell Chicheley Hall, it was no longer deemed possible to recover payment of the intercompany debtor between the Society, as the parent charity, and Royal Society Trading Limited. The debt was formally waived in both the parent and subsidiary accounts. The debt waiver has been treated as a capital contribution directly to shareholders’ funds in the subsidiary of £0.5 million (2020: £0.8 million).
## **Income**
Income is accrued and recognised when conditions on entitlement are met, receipt can be quantified reliably and is probable.
## Donations and legacies
Donated goods and services are included at the value to the Society where these can be quantified. No amounts are included in these financial statements for the services donated by volunteers or Fellows.
Donations are accounted for on a receivable basis where receipt is probable and there is entitlement to the income. Donations include Gift Aid based on amounts receivable at the accounting date.
Legacy income is recognised on a receivable basis when there is sufficient evidence to assess that receipt is probable and receipt can be quantified reliably. Receipt of a legacy, in whole or in part, is only considered probable when the charity has been notified of the executor’s intention to make a contribution.
Fellows’ annual contributions are recognised in the year in which they become due.
Grants for charitable activities
Grants are recognised when all conditions for receipt are met. Where donor-imposed restrictions apply to the timing of the related expenditure as a precondition of its use the grant is treated as deferred income until those restrictions are met. Grants received for specific purposes are accounted for as restricted funds.
Income from trading activities Income from conferencing activities is recognised when the event takes place. Income from publishing activities is recognised when the publication or service is provided. Income for the sales of subscriptions, package subscriptions and consortium deals is recognised evenly over the period of subscription or service.
## Income from investments
Investment income and interest on deposits is recognised on an accruals basis. Investment income arising on endowment funds is credited to the appropriate fund in accordance with the prescribed conditions.
## **Expenditure**
Expenditure, including irrecoverable VAT, is accounted for on an accruals basis. Expenditure is allocated to the particular activity where the cost relates directly to that activity. Support costs, which cannot be directly attributed to a particular activity, are apportioned based on the costs of staff engaged in direct activities.
Expenditure on raising funds Costs of raising funds include those costs incurred in raising donations and legacies.
Expenditure on charitable activities Charitable expenditure includes all expenditure incurred on grants awarded and on other schemes run in pursuance of the Society’s objectives under its Charter, including Fellowship activities and primary purpose trading.
The direct costs of supporting these activities, including staff and other overhead costs, are separately analysed and shown as support costs under this heading.
Grants are recognised as a liability when the Society formally notifies the recipient of the award. Due to the nature of the funding source for the majority of grant awards, the liability is measured as the total of expected payments for the period to the next confirmation of income due. Payments due in future periods are disclosed as grant commitments. Any termination liabilities are recognised when a decision to cease the grant is made. Liabilities for awards where more than one year of expected payments are provided at the outset are discounted to current value using a rate equivalent to the opportunity cost from investments foregone.
## **Leased assets**
Rentals payable under operating leases are charged to the statement of financial activities evenly over the term of the lease.
## **Tangible fixed assets**
Tangible fixed assets are capitalised at cost, including purchase price and any other costs of bringing the asset into working condition for its intended use. The Society only capitalises items costing more than £5,000. Batches of items below this threshold are capitalised if forming part of a larger asset or project and together cost more than £5,000.
Depreciation is provided on all assets, excluding freehold land and assets under development, to write off the cost of tangible fixed assets on a straight-line basis over their expected useful lives as follows:
|Freehold property||
|---|---|
|and improvements:|20 – 50years|
|Freehold fxtures||
|and fttings:|3 – 10years|
|Leasehold||
|improvements:|20 – 30years|
|Leasehold fxtures||
|and fttings:|3 – 10years|
|Computers and AV||
|equipment:|3 – 5years|
|Other equipment:|10 – 20years|
On completion, assets under development are transferred to the relevant category and depreciated.
## **Intangible assets**
Intangible assets consist of computer software that is not an integral part of its related hardware. Intangible assets are capitalised at cost, including purchase price of computer software licences and any other costs directly
attributable to bringing the licences
into use, such as configuration or implementation costs. Software development costs are recognised as an intangible asset when all of the conditions of FRS 102 are met.
The Society only capitalises items costing more than £5,000. Batches of items below this threshold are capitalised if forming part of a larger asset or project and together cost more than £5,000.
Intangible assets are measured at cost less accumulated amortisation and any impairment losses.
Amortisation is charged to write off the cost of the intangible asset on a straight-line basis over the estimated useful life of between 3–10 years.
## **Heritage assets**
Heritage assets comprise:
- printed books;
- archives;
- pictures, sculptures and other works of art; and
- other artefacts.
Printed books and archives are included on the balance sheet at deemed cost using a valuation performed in 2003. Pictures, sculptures and other works of art, and other artefacts are included on the balance sheet on a valuation basis. The valuation reflects their fair value and was last performed in 2015. Impairment reviews of these collections are undertaken every 5 – 10 years and when changes in circumstances indicate. A review of indicators of impairment is undertaken annually.
**64** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **65**
## **Accounting policies** continued
Additions to heritage assets are made by purchase or donation. Purchases are initially recorded at cost and donations are recorded at a fair value where practicable. The Society holds and maintains these assets principally for their contribution to knowledge and culture in line with its charitable aims.
The Trustees do not consider that a reliable estimate of the fair value can be obtained for a large part of the archives collection without incurring costs that would exceed the benefits provided. The Society was founded in 1660 and the collection has been built up throughout its existence and the number of assets held in the collection is extensive and diverse in nature. Reliable and relevant information on the cost of many of the assets is therefore not readily available and there is a lack of comparable market values. As such, these assets are not recognised in the accounts.
## **Investments**
Listed investments are held at fair value. Unlisted investments are held at cost as an approximation to fair value where the fair value is not obtainable. Private equity investments are valued at fair value based on the latest information from the fund managers. Realised gains and losses on investments sold in the year and unrealised gains and losses on revaluation of investments are included in the statement of financial activities.
Investment management fees are allocated proportionally against the funds under investment.
The core endowment represents the part of the assets which the Trustees seek to maintain in real terms. It is based on the value of the endowments at 31 March 2012, together with an allowance for inflation (UK consumer price index (CPI) as determined by the Office for National Statistics).
The Enterprise Fund is accounted for as a mixed motive investment, owing to the dual benefits expected to be received.
The investments in subsidiary undertakings are held at cost on the Society-only balance sheet.
## **Impairment of fixed assets**
Tangible fixed assets, intangible assets and investments are subject to review for impairment when there is an indication of a reduction in their carrying value.
## **Total return accounting**
The Society adopts the use of total return in relation to its permanent and expendable endowments with the exception of the Theo Murphy Australia Fund. Income from the endowments and investment gains and losses are recognised in the endowment column of the statement of financial activities. Unapplied total return that is allocated to income funds is presented as an allocation between endowment funds and income funds as a transfer on the face of the statement of financial activities.
Investments held at cost are reviewed annually for impairment. Any impairment is recognised in the corresponding statement of financial activities category in the year in which it occurs.
Heritage assets are reviewed for impairment at the end of each reporting period to ensure that the carrying value reflects their carrying amounts.
The amount of any unapplied total return fund is included as part of the relevant endowment together with the value of the trust for investment on the balance sheet.
## **Foreign currency**
Transactions in foreign currencies are recorded at the exchange rate at the date of the transaction. Assets and liabilities in foreign currency are translated into sterling at the exchange rate at the balance sheet date. Resulting gains or losses are included in the statement of financial activities.
The Trustees’ policy is to distribute translated into sterling at the exchange up to 4% of the rolling five-year rate at the balance sheet date. average capital value of the fund. In Resulting gains or losses are included determining that the charity should in the statement of financial activities. adopt a total return approach, the **Financial instruments** Trustees considered the Charities The Society has financial assets (Total Return) Regulations 2013 and and financial liabilities of a kind received advice from Stone King LLP that qualify as basic. Basic financial and Cazenove Capital Investment instruments are initially recognised at managers. transaction value and subsequently measured at their settlement value.
## **Fund accounting**
Restricted funds can only be used for particular purposes specified or agreed by the donor. Permanent endowment funds are funds where the capital must be retained and invested. Expendable endowment funds are funds that must be invested to produce income. Unrestricted funds may be used for any purpose in the furtherance of the general objectives of the charity.
## **Pension costs**
Defined benefit pension scheme assets are measured at fair value and liabilities on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a highquality corporate bond of equivalent currency and term to the Scheme liabilities. The actuarial valuations are obtained triennially and updated under FRS 102 rules at each balance sheet date. Any surplus or deficit is shown in the balance sheet as an asset or liability.
The charge to the statement of financial activities is calculated so as to spread the cost of pensions over employees’ working lives with the Society. The charge comprises the administration costs of running the scheme, the current service cost computed by the actuary under FRS 102 and gains and losses on settlements and curtailments. Past service costs or credits are recognised immediately if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until vesting occurs. The interest on the assets and liabilities for the period is shown as a net amount of other finance costs or credits
charged or credited to the statement of financial activities. Actuarial gains and losses are recognised immediately under the description ‘Actuarial losses on defined benefits pension scheme’.
Multi-employer schemes are accounted for as defined contribution schemes as it is not possible to identify the Society’s share of the underlying assets and liabilities on a reasonable and consistent basis. Contributions payable relating to funding of the deficit are included as a liability on the balance sheet and charged to the statement of financial activities.
The amounts charged to the statement of financial activities for defined contribution pension schemes represent the employer’s contributions payable in the year. The method for allocation of pension costs between funds is to allocate on a pro rata basis using departmental salary costs as a base.
## **Termination benefits**
Termination benefits are payable when employment is terminated by the Society, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The amounts charged to the statement of financial activities represent the best estimate of the expenditure required to settle the obligation at the balance sheet date.
## **Taxation**
The Society is a charity within the meaning of Paragraph 1 Schedule 6 of the Finance Act 2010. Accordingly, the Society is exempt from income and corporation taxes on income and gains to the extent that they are applied to charitable purposes. The trading subsidiaries do not generally pay UK corporation tax because their policy is to pay taxable profits to the Society as Gift Aid.
## **Prior year comparatives**
In accordance with FRS 102, prior year comparative figures can be found as follows:
- consolidated statement of financial activities – note 27;
- analysis of net assets between funds – note 28;
- movement on trust and specific funds in year – note 29.
**66** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **67**
**Notes to the financial statements** For the year ended 31 March 2021
## **1 Income and endowments from donations and legacies**
|**1 Income and endowments from**|**donations and legacies**||||||
|---|---|---|---|---|---|---|
||||Expendable|Permanent|**2021**|2020|
||Unrestricted|Restricted|endowment|endowment|**Total**|Total|
||funds|funds|funds|funds|**funds**|funds|
||£’000|£’000|£’000|£’000|**£’000**|£’000|
|Gifts and donations|19|1,124|–|–|**1,143**|520|
|Legacies|486|–|–|–|**486**|26|
|Fellows’ contributions|229|–|–|–|**229**|259|
|**Total**|734|1,124|–|–|**1,858**|805|
## **2 Income from investments**
||||Expendable|Permanent|**2021**|2020|
|---|---|---|---|---|---|---|
||Unrestricted|Restricted|endowment|endowment|**Total**|Total|
||funds|funds|funds|funds|**funds**|funds|
||£’000|£’000|£’000|£’000|**£’000**|£’000|
|Dividends and interest|782|654|802|2,615|**4,853**|6,817|
|Bank deposit interest|4|–|–|–|**4**|34|
|**Total**|786|654|802|2,615|**4,857**|6,851|
## **3 Trading**
|**3 Trading**||||||
|---|---|---|---|---|---|
|||Recharged||**2021**|2020|
||External|internal|Gross|**Net surplus/**|Net surplus/|
||income|lettings|expenditure|**(defcit)**|(defcit)|
||£’000|£’000|£’000|**£’000**|£’000|
|**Trading activities through subsidiary companies**||||||
|Kavli Royal SocietyInternational Centre(ChicheleyHall)|–|–|(185)|**(185)**|(187)|
|Sponsorships|110|–|(4)|**106**|122|
||110|–|(189)|**(79)**|(65)|
|**Trading in furtherance of charitable activities**||||||
|Publishing|7,494|–|(3,256)|**4,238**|4,417|
|Conferencingactivities in furtherance of objectives – Carlton House Terrace|2|–|(827)|**(825)**|1,539|
|Other|548|–|–|**548**|669|
||8,044|–|(4,083)|**3,961**|6,625|
|**Total**|8,154|–|(4,272)|**3,882**|6,560|
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.
## **4 Grants for charitable activities**
|**4 Grants for charitable activities**|||||||
|---|---|---|---|---|---|---|
||||Expendable|Permanent|**2021**|2020|
||Unrestricted|Restricted|endowment|endowment|**Total**|Total|
||funds|funds|funds|funds|**funds**|funds|
||£’000|£’000|£’000|£’000|**£’000**|£’000|
|**From Government and otherpublic bodies**|||||||
|Core grant from Department for Business, Energy and Industrial|||||||
|Strategy (BEIS)|992|47,030|–|–|**48,022**|47,101|
|BEIS Investment in Research Talent Fund|–|39,267|–|–|**39,267**|31,629|
|BEIS Newton Fund|–|4,364|–|–|**4,364**|6,137|
|BEIS Global Challenges Research Fund|–|18,551|–|–|**18,551**|15,033|
|BEIS COVID Costed Extensions Fund|–|941|–|–|**941**|–|
|Department for International Development|–|1,686|–|–|**1,686**|1,990|
|Othergrants from Government andpublic bodies|189|230|–|–|**419**|182|
|**From other external bodies**|||||||
|Contribution to charitable activities|–|5,781|–|–|**5,781**|6,457|
|**Total**|1,181|117,850|–|–|**119,031**|108,529|
Other grants from Government and public bodies includes income of £189,000 (2020: £Nil) from the Coronavirus Job Retention Scheme.
Details of the income to and movement of individual funds are disclosed in note 23.
## **5 Property sale – exceptional item**
||||Expendable|Permanent|**2021**|2020|
|---|---|---|---|---|---|---|
||Unrestricted|Restricted|endowment|endowment|**Total**|Total|
||funds|funds|funds|funds|**funds**|funds|
||£’000|£’000|£’000|£’000|**£’000**|£’000|
|Exceptional net income frompropertysale|2,247|–|–|–|**2,247**|–|
|**Total**|2,247|–|–|–|**2,247**|–|
During the year, the Society completed on the sale of Chicheley Hall in Milton Keynes for £6.5 million with a net book value of £3.6 million and costs associated with the sale of £0.3 million. Heritage assets (mainly portraits and paintings) with a net book value of £0.3 million were also disposed of during the year as part of the Chicheley Hall sale. The portraits and paintings had heritage association with Chicheley Hall and so they were sold with the building.
## **6 Expenditure on raising funds**
|**6 Expenditure on raising funds**|||||||
|---|---|---|---|---|---|---|
||||Expendable|Permanent|**2021**|2020|
||Unrestricted|Restricted|endowment|endowment|**Total**|Total|
||funds|funds|funds|funds|**funds**|funds|
||£’000|£’000|£’000|£’000|**£’000**|£’000|
|Direct costs on raisingfunds|431|–|–|–|**431**|473|
|Support costs on raisingfunds|449|–|–|–|**449**|464|
|Cost of trading|185|–|–|–|**185**|2,311|
|Investment management fees|126|303|127|474|**1,030**|1,164|
|**Total**|1,191|303|127|474|**2,095**|4,412|
**68** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **69**
## continued **Notes to the financial statements**
## **7 Expenditure on charitable activities**
|**7 Expenditure on charitable activities**|||||||
|---|---|---|---|---|---|---|
|||Grant||Support|||
||Staf|costs|Other direct|costs|**2021**|2020|
||costs|£’000|costs|£’000|**Total**|Total|
||£’000|(note 10)|£’000|(note 8)|**£’000**|£’000|
|**Charitable activities**|||||||
|Promotingscience and its benefts|15|60|36|231|**342**|245|
|Supportingand recognisingexcellence in science|3,974|104,063|2,489|4,146|**114,672**|104,091|
|Providingscientifc advice forpolicy|1,791|–|308|1,945|**4,044**|4,265|
|Fosteringinternational andglobal cooperation|815|10,696|768|885|**13,164**|16,166|
|Education andpublic engagement|1,444|312|779|1,570|**4,105**|4,525|
|**Total for costs of charitable activities**|8,039|115,131|4,380|8,777|**136,327**|129,292|
## **8 Support costs**
||Media||||||
|---|---|---|---|---|---|---|
||relations and|Facilities and|||||
||public|building|Support||**2021**|2020|
||engagement|management|services|Governance|**Total**|Total|
||£’000|£’000|£’000|£’000|**£’000**|£’000|
|**Support costs on raising funds**|29|99|289|32|**449**|464|
||||||||
|**Charitable activities**|||||||
|Promotingscience and its benefts|15|51|148|17|**231**|3|
|Supportingand recognisingexcellence in science|272|914|2,662|298|**4,146**|4,452|
|Providingscientifc advice forpolicy|127|429|1,249|140|**1,945**|1,966|
|Fosteringinternational andglobal cooperation|58|195|568|64|**885**|905|
|Education andpublic engagement|103|346|1,008|113|**1,570**|1,608|
||575|1,935|5,635|632|**8,777**|8,934|
||||||||
|**Total support costs**|604|2,034|5,924|664|**9,226**|9,398|
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.
## **9 Staff costs**
|**9 Staf costs**|||
|---|---|---|
||**2021**|2020|
||**£’000**|£’000|
|**Costs by type **|||
|Salaries|**10,155**|10,154|
|Social securitycosts|**1,036**|994|
|Pension costs|**1,018**|1,314|
|**Total**|**12,209**|12,462|
As required by FRS 102, included in 2021 staff costs is an amount of £297,000 (2020: £238,000) relating to holiday pay owed to staff at 31 March 2021.
Pension costs include employer contributions to two Royal Society pension schemes, a defined contribution scheme and a defined benefit scheme, and the Universities Superannuation Scheme (USS) pension scheme as follows:
- The Royal Society Group Personal Pension Plan (defined contribution): £633,000 (2020: £594,000);
- The Pension and Life Assurance Plan of the Royal Society (defined benefit): £377,000 (2020: £337,000);
• USS: £26,000 (2020: £41,000).
The following numbers of employees of the Royal Society earning £60,000 per annum or more received total emoluments within the bands shown:
||**2021**|2020|
|---|---|---|
|£60,001 – £70,000|**10**|8|
|£70,001 – £80,000|**6**|8|
|£80,001 – £90,000|**3**|3|
|£90,001 – £100,000|**5**|1|
|£100,001 – £110,000|**1**|1|
|£110,001 – £120,000|**1**|2|
|£120,001 – £130,000|**2**|–|
|£140,001 – £150,000|**–**|1|
|£150,001 – £160,000|**2**|1|
|£160,001 – £170,000|**–**|1|
|£360,001 – £370,000|**–**|1|
|£380,001 – £390,000|**1**|–|
The 12 key management personnel of the Royal Society (2020: 14) received total remuneration of £1,832,000 including employer’s NIC (2020: £1,850,000).
The average number of employees, analysed by function, was:
|The average number of employees, analysed by function, was:|||
|---|---|---|
||**2021**|2020|
|Expenditure on raisingfunds|**6**|6|
|Expenditure on charitable activities|**162**|160|
|Support(including governance)|**51**|46|
|**Total**|**219**|212|
The average full-time equivalent was 214 (2020: 209).
Redundancy and termination payments were made to 2 employees during the year (2020: 1). Total redundancy and termination payments in respect of these employees were £15,000 (2020: £100,000).
**70** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **71**
## continued **Notes to the financial statements**
## **10 Grants**
|**10 Grants**|||||
|---|---|---|---|---|
||Grants to|Grants to|**2021**|2020|
||institutions|individuals|**Total**|Total|
||£’000|£’000|**£’000**|£’000|
|**Fellowships**|||||
|UniversityResearch Fellowships|–|52,621|**52,621**|45,037|
|Royal SocietyResearch Professorships|–|15,240|**15,240**|13,856|
|FLAIR Fellowships|–|9,602|**9,602**|4,738|
|DorothyHodgkin Fellowships|–|7,689|**7,689**|6,396|
|Newton International Fellowships|–|4,237|**4,237**|6,361|
|Sir HenryDale Fellowships|–|4,214|**4,214**|3,892|
|RS VisitingResearch Professorship|–|3,794|**3,794**|3,835|
|RS Challenge Grants|–|2,873|**2,873**|2,871|
|Newton Advanced Fellowships|–|2,433|**2,433**|3,457|
|IndustryFellowships|–|2,152|**2,152**|1,764|
|Wolfson Advanced Fellowships|1,931|–|**1,931**|1,380|
|Wolfson Research Merit Award|1,285|–|**1,285**|1,822|
|Leverhulme Trust Senior Research Fellowships|–|387|**387**|486|
|International FellowshipGrants|–|182|**182**|200|
|Professorshipof Public Engagement|–|26|**26**|22|
|**Education schemes**|||||
|Partnership grants scheme|142|–|**142**|144|
|Education Research Fellowships|–|3|**3**|6|
|Other educationgrants|–|5|**5**|4|
|**Othergrantprogrammes**|||||
|International Exchanges|–|2,518|**2,518**|1,558|
|DFID Africa Awards|–|1,392|**1,392**|1,576|
|Entrepreneur in Residence|–|897|**897**|874|
|Leverhulme Trust APEX Awards|–|673|**673**|579|
|Wolfson LaboratoryRefurbishment Grants|258|–|**258**|558|
|Other GCRF Programmes|–|–|**–**|227|
|Australian Academyof Science Think Tank|–|103|**103**|200|
|Paul Instrument Fund|–|101|**101**|199|
|Awards andprizes|–|223|**223**|191|
|Newton International Exchanges|–|(20)|**(20)**|138|
|Brian Mercer Awards|–|61|**61**|14|
|Other|–|109|**109**|111|
||||||
|**Total**|**3,616**|**111,515**|**115,131**|**102,496**|
## **10 Grants** continued
|**10 Grants**continued||||
|---|---|---|---|
|||**2021**|2020|
|||**Total**|Total|
||Number|**£’000**|£’000|
|**Recipients of institutionalgrants**||||
|Universityof Glasgow|12|**485**|292|
|Imperial College London|14|**393**|313|
|UniversityCollege London|9|**188**|316|
|Universityof Birmingham|12|**176**|175|
|Universityof Southampton|7|**146**|141|
|King's College London|4|**143**|101|
|Universityof Cambridge|15|**135**|208|
|Universityof Nottingham|6|**132**|175|
|Universityof Leicester|4|**123**|108|
|Universityof Bristol|9|**121**|132|
|Universityof Edinburgh|8|**111**|143|
|Universityof Leeds|8|**111**|113|
|Nottingham Trent University|2|**106**|–|
|Universityof York|5|**97**|52|
|Universityof Shefeld|2|**91**|–|
|Universityof Oxford|5|**83**|85|
|Liverpool School of Tropical Medicine|3|**81**|–|
|Durham University|5|**71**|–|
|Universityof St Andrews|3|**68**|113|
|Universityof Warwick|10|**65**|108|
|Universityof Manchester|5|**58**|50|
|Universityof Bath|5|**56**|68|
|The Francis Crick Institute|1|**53**|–|
|Brunel UniversityLondon|1|**43**|–|
|Universityof Portsmouth|1|**38**|–|
|Queen's UniversityBelfast|2|**34**|–|
|Diamond Light Source Ltd|1|**34**|–|
|Universityof Sussex|5|**30**|–|
|Cardif University|4|**29**|40|
|Universityof Exeter|3|**26**|51|
|Queen MaryUniversityof London|2|**21**|30|
|Swansea University|1|**15**|–|
|Newcastle University|1|**15**|21|
|Keele University|–|**–**|62|
|London School of Hygiene and Tropical Medicine|–|**–**|50|
|Other organisations|67|**238**|957|
|**Total**|242|**3,616**|3,904|
Grants are generally awarded to particular individuals, although the actual award is made to the host organisation. Details of individual grants awarded during the year analysed by organisation are available from the finance department on request.
**72** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **73**
## continued **Notes to the financial statements**
## **11 Reconciliation of grants payable**
|**11 Reconciliation of grants payable**|||
|---|---|---|
||**2021**|2020|
||**Total**|Total|
||**£’000**|£’000|
|Liabilityat 1 April|**4,785**|12,191|
|Newgrants awarded inyear|**116,751**|104,968|
|Grantspaid inyear|**(114,242)**|(109,902)|
|Grants refunded to the Society|**(1,569)**|(2,472)|
|**Liability at 31 March**|**5,725**|4,785|
All grants payable fall due within one year.
## **12 Payments to Trustees and related party transactions**
|**12 Payments to Trustees and related party transactions**|||
|---|---|---|
||**2021**|2020|
||**Total**|Total|
||**£’000**|£’000|
|Expenses: Travel and subsistence|**2**|83|
No Trustees received remuneration from the Society in the year (2020: Nil). Expenses were reimbursed to or paid on behalf of 5 Trustees (2020: 24 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 £10,000 (2020: £9,000). No claims have been made under this policy.
## **Grants and awards**
Professor Peter Bruce FRS is an award holder of an International Exchanges Cost Share (NSFC) grant. The total value of the award is £12,000. This was awarded in March 2021. No payment was made in 2020/21. He was also a co-applicant on a Newton Advanced Fellowship grant. The total value of the award is £111,000. This was awarded and taken up in the 2018/19 financial year. No payment was made in 2020/21. Professor Nora de Leeuw, spouse of Professor Peter Bruce FRS, holds a grant as part of the Africa Capacity Building Initiative programme funded by the Department for International Development (DFID) (now the Foreign, Commonwealth and Development Office (FCDO)) and administered by the Royal Society grants team.
Professor Sheena Radford FRS is an award holder of a Royal Society Research Professorship grant. The total value of the award is £1,054,000. This was awarded and taken up in 2021. A payment of £206,000 was made in 2020/21 to the University of Leeds.
Professor Jennifer Thomas FRS is an award holder of a Royal Society Research Professorship grant. The total value of the award is £1,120,000. This was awarded and taken up in 2020. A payment of £402,000 was made in 2020/21 to University College London.
## **Other**
Sir Adrian Smith, President of the Royal Society, has use of the President’s flat at Carlton House Terrace.
With a view to increasing the diversity of Officers, the Charity Commission approved the application submitted by Council to make grants to Officers’ parent institutions to reimburse some of the costs that arise from the significant time commitment involved in Officers’ roles. The grants paid this year were £50,000 (2020: £Nil).
## **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).
## **13 Total expenditure includes the following amounts:**
|**13 Total expenditure includes the following amounts:**|||
|---|---|---|
||**2021**|2020|
||**Total**|Total|
||**£’000**|£’000|
|**Operating lease rentals**|||
|Plant and machinery|**71**|79|
|Rent|**490**|490|
||**561**|569|
|**Feespayable to the Charity’s auditors for:**|||
|The audit of the Charityand Groupaccounts|**46**|35|
|The audit of the Charity’s subsidiaries’ accountspursuant to legislation|**5**|6|
|Tax returns of the Charityand tradingsubsidiaries|**6**|6|
|**Total auditors’ remuneration**|**57**|47|
||||
|**Charges on owned assets**|||
|Depreciation and amortisation|**1,172**|1,262|
||**1,172**|1,262|
## **14 Financial memoranda**
Income and expenditure relating to Government grants during the year was as follows:
|||**2021**|2020|
|---|---|---|---|
|||**Total**|Total|
|||**£’000**|£’000|
||**Department for Business, Energy and Industrial Strategy – coregrant**|||
||Income|**48,022**|47,101|
||Expenditure|**(48,022)**|(47,101)|
|||**–**|–|
||**Department for Business, Energy and Industrial Strategy – Investment in Research Talent Fund**|||
||Income|**39,267**|31,629|
||Expenditure|**(39,267)**|(31,629)|
|||**–**|–|
||**BEIS Global Challenges Research Fund**|||
||Income|**18,551**|15,033|
||Expenditure|**(18,551)**|(15,033)|
|||**–**|–|
||**BEIS Newton Fund**|||
||Income|**4,364**|6,137|
||Expenditure|**(4,364)**|(6,137)|
|||**–**|–|
||**BEIS COVID Costed Extensions Fund**|||
||Income|**941**|–|
||Expenditure|**(941)**|–|
|||**–**|–|
||**Department for International Developmentgrant**|||
||Income|**1,686**|1,990|
||Expenditure|**(1,686)**|(1,990)|
|||**–**|–|
Details of transactions with these subsidiaries are set out in note 26.
**74** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **75**
## continued **Notes to the financial statements**
## **15 Intangible and tangible fixed assets**
## 15A Intangible assets – Group and charity
|**15 Intangible and tangible fxed assets**
15A Intangible assets – Group and charity||||
|---|---|---|---|
||Software|**2021**|2020|
||£’000|**£’000**|£’000|
|**Cost**||||
|At 1 April|–|**–**|–|
|Additions|207|**207**|–|
|Transfers|43|**43**|–|
|**At 31 March**|250|**250**|–|
|||||
|**Accumulated amortisation**||||
|At 1 April|–|**–**|–|
|Charge foryear|22|**22**|–|
|**At 31 March**|22|**22**|–|
|||||
|**Net book value at 31 March 2021**|228|**228**|–|
|Net book value at 31 March 2020|–|**–**|–|
During the year, a customer relationship management (CRM) system was completed and went live. Once completed, the asset costs were reviewed and it met the criteria of an intangible asset. The costs incurred on the CRM system in the previous year were transferred out of assets under development into intangible assets during the year.
Amortisation of intangible fixed assets is included within the expenditure on charitable activities in note 7.
There were no contractual commitments for acquisitions of intangible assets as at 31 March 2021 (2020: £Nil).
## **15 Intangible and tangible fixed assets** continued
## 15B Tangible fixed assets – Group and charity
||Chicheley|Chicheley|Chicheley||||||
|---|---|---|---|---|---|---|---|---|
||Hall||Hall||||||
||freehold|computers|||Computers|Assets|||
||and property|and other||Leasehold|and other|under|||
||improvement|equipment||improvements|equipment|development|**2021**|2020|
||£’000||£’000|£’000|£’000|£’000|**£’000**|£’000|
|**Cost**|||||||||
|At 1 April|17,954||684|21,855|4,161|92|**44,746**|43,419|
|Additions|8||–|100|375|9|**492**|1,983|
|Disposals|(17,961)||(674)|(65)|(286)|–|**(18,986)**|(656)|
|Transfers|(1)||(10)|–|20|(52)|**(43)**|–|
|**At 31 March**|–||–|21,890|4,270|49|**26,209**|44,746|
||||||||||
|**Depreciation**|||||||||
|At 1 April|14,259||638|13,001|2,774|–|**30,672**|30,065|
|Charge foryear|90||11|714|335|–|**1,150**|1,262|
|Disposals|(14,348)||(642)|(65)|(285)|–|**(15,340)**|(655)|
|Transfer|(1)||(7)|–|8|–|–|–|
|**At 31 March**|–||–|13,650|2,832|–|**16,482**|30,672|
||||||||||
|**Net book value at 31 March 2021**|–||–|8,240|1,438|49|**9,727**||
|Net book value at 31 March 2020|3,695||46|8,854|1,387|92||14,074|
All tangible fixed assets are used for the support of charitable activities within the Society.
Depreciation of tangible fixed assets is included within the expenditure on charitable activities in note 7.
During the year, the Society completed on the sale of Chicheley Hall in Milton Keynes for £6.5 million with a net book value of £3.6 million and costs associated with the sale of £0.3 million (see note 5).
## **16 Capital commitments – Group and charity**
|**16 Capital commitments – Group and charity**|||
|---|---|---|
||**2021**|2020|
||**£’000**|£’000|
|Authorised and contracted for|**225**|182|
|Authorised but not contracted for|**1,660**|1,497|
|**Total commitment**|**1,885**|1,679|
At the balance sheet date, £811,000 (2020: £712,000) of capital commitments was authorised for refurbishment of 6 – 9 Carlton House Terrace. A further spend of £646,000 (2020: £576,000) had been authorised on IT projects. Other general capital items total £428,000 (2020: £391,000). Of these commitments £225,000 (2020: £182,000) has been contracted for by the year end.
**76** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **77**
## continued **Notes to the financial statements**
## **17 Heritage assets – Group and charity**
The Society holds an extensive collection of heritage assets relating to the history of the Society itself and the wider history of scientific endeavour. The collection has four main components:
**Printed works:** The Library contains over 70,000 titles, published from the 1470s to the present day. The main strength of the collection is in the 17th and 18th centuries; from the 1680s to the mid-19th century, the policy of the Library was to acquire every important scientific publication.
**Archives:** These comprise an extraordinary and unrivalled record of the development of science that spans nearly 350 years. The archive collection is a unique resource for historians, particularly historians of science, containing over 250,000 items. It includes the Society’s Charter Book and the manuscript of Isaac Newton’s _Principia Mathematica_ .
**Pictures, sculptures and other works of art:** The collection includes over 200 original works (primary collection) and approximately 10,000 photographs and engravings (secondary collection), many of them portraits of past and present Fellows.
**Other artefacts:** The collection comprises approximately 250 items and includes scientific instruments, furniture and furnishings, and the Society’s Charter Book.
The collections are accessible to scholars and the wider public through the Royal Society’s History of Science Centre, which includes a reference library and an extensive online presence, including a fully searchable catalogue and image library.
||Assets held|Assets held|||
|---|---|---|---|---|
||at cost|at valuation|**2021**|2020|
|**Summary of heritage asset transactions**|£’000|£’000|**£’000**|£’000|
|**Purchases/donations**|||||
|At 1 April|36,268|13,208|**49,476**|49,416|
|Additions|2|–|**2**|60|
|Disposals|–|(315)|**(315)**|–|
|**Valuation or cost at 31 March**|36,270|12,893|**49,163**|49,476|
|**The heritage assets comprise:**|||||
|Printed books|||**13,278**|13,278|
|Archives|||**22,965**|22,965|
|Pictures,sculptures and other works of art|||**9,164**|9,462|
|Other artefacts|||**3,756**|3,771|
|**Total**|||**49,163**|49,476|
## **17 Heritage assets – Group and charity** continued
||**17 Heritage assets – Group and charity**continued||||||
|---|---|---|---|---|---|---|
|||**2021**|2020|2019|2018|2017|
||**Five-year fnancial summary of heritage asset transactions**|**£’000**|£’000|£’000|£’000|£’000|
||**Purchases/donations**
Printed books|**–**|1|7|1|13|
||Archives|**–**|37|51|–|23|
||Pictures,sculptures and other works of art|**2**|22|37|20|9|
||Other artefacts|**–**|–|–|–|4|
||**Totalpurchases/donations**|**2**|60|95|21|49|
Donated heritage assets are recognised in the year they are received. Heritage assets valued at £315,000 were disposed of during the year as part of the Chicheley Hall sale (2020: £Nil). Portraits and paintings valued at £300,000 had heritage association with Chicheley Hall and so they were sold with the building. Other artefacts held at valuation of £15,000 were sold for proceeds of £14,000. There have been no other 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.
The printed books and archives were valued in August 2003 by Roger Gaskell, a rare book dealer, and the pictures and other artefacts by Weller King, Fine Art Dealers, in 2015. The valuations are on a fair market/replacement basis on those parts of the collection where it is felt such a valuation can be reasonably made. Assets are held at valuation as a proxy for cost.
The paintings and furniture at Chicheley Hall were valued in March 2015 by Weller King, Fine Art Dealers. The valuations are on a fair market/replacement basis on those parts of the collection where it is felt such a valuation can be reasonably made. The Trustees consider there to be no material impairment on the present market values/ replacement values compared with those stated.
**78** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **79**
## continued **Notes to the financial statements**
## **18 Investments – Group and charity**
|**18 Investments –Group and charity**|||
|---|---|---|
||**2021**|2020|
||**£’000**|£’000|
|**Valuation at 1 April**|**234,075**|261,260|
|Additions of investments|**53,397**|31,616|
|Disposal of investments|**(50,385)**|(40,903)|
|Net change in cash invested for trades withinportfolio|**(3,673)**|8,527|
|Investment management costs|**(1,030)**|(1,164)|
|Net cash added to/(withdrawn from) portfolio|**2,828**|(1,487)|
|Netgains/(losses)on valuation at 31 March|**62,098**|(23,774)|
|**Valuation at 31 March**|**297,310**|234,075|
|**Total historical cost at the end of theyear**|**200,562**|190,245|
||||
|**The valuation at 31 March comprises:**|||
|Investments listed on a recognised stock exchange includinginvestments and unit trusts:|||
|UK|**139,807**|104,101|
|Overseas|**130,046**|97,277|
|Other unlisted securities:|||
|UK|**8,642**|9,633|
|Overseas|**3,076**|4,540|
|Cash:|||
|UK|**11,699**|13,094|
|Overseas|**4,040**|5,430|
|**Total**|**297,310**|234,075|
Overseas investments comprise equities, unit/investment trusts and fixed interest funds.
The Society owns 100% of the issued share capital of Royal Society Trading Limited (note 26). The principal activity of the company was conferencing activities at Chicheley Hall. The company ceased trading on 23 March 2020.
The Society owns 100% of the issued share capital of Royal Society (London) Ltd (note 26). The principal activity of the company is corporate sponsorships.
Funds are invested as follows:
|Funds are invested as follows:|||
|---|---|---|
||**2021**|2020|
||**£’000**|£’000|
|Specifc investments – Amadeus RSEF|**7,555**|8,621|
|Specifc investments – Theo MurphyAustralia Fund|**3,982**|2,720|
|Pooled investments|**285,773**|222,734|
|**Total**|**297,310**|234,075|
## **19 Debtors**
|**2021**|**2021**|2020|2020|
|---|---|---|---|
|**Receivable**|**Receivable**|Receivable|Receivable|
|**within**|**after**|within|after|
|**one year**|**one year**|one year|one year|
|**£’000**|**£’000**|£’000|£’000|
|Trade debtors
**683**|**–**|1,450|–|
|Grants receivable
**1,115**|**–**|1,159|–|
|Legacyreceivable
**14**|**–**|96|–|
|Other debtors
**72**|**–**|100|–|
|Accrued income
**97**|**–**|188|–|
|Prepayments
**583**|**–**|427|–|
|**Total**
**2,564**|**–**|3,420|–|
Included in the Group debtors are debtors of £132,000 (2020: £Nil) of Royal Society (London) Ltd. All other debtors relate to the Charity.
## **20 Creditors**
|**20 Creditors**||||
|---|---|---|---|
|**2021**|**2021**|2020|2020|
|**Due within**|**Due after**|Due within|Due after|
|**one year**|**one year**|one year|one year|
|**£’000**|**£’000**|£’000|£’000|
|Trade creditors
**538**|**–**|2,094|–|
|Publications advanced sales
**3,586**|**–**|3,586|–|
|Chicheleyadvanced sales
**–**|**–**|232|–|
|Grantspayable
**5,725**|**–**|4,785|–|
|Other creditors
**1,657**|**–**|359|–|
|Accruals andprovisions
**611**|**45**|935|129|
|Deferred income
**6,834**|**–**|5,759|–|
|**Total**
**18,951**|**45**|17,750|129|
Included in the Group creditors are creditors of £26,000 (2020: £9,000) relating to Royal Society (London) Ltd. All other creditors relate to the Charity.
As required by FRS 102, included within accruals and provisions in 2021 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 £50,000 (2020: £140,000) has been provided for, comprising £5,000 (2020: £11,000) due within one year and £45,000 (2020: £129,000) due within more than one year.
## **Reconciliation of deferred income**
||**2021**|2020|
|---|---|---|
||**£’000**|£’000|
|Deferred income brought forward|**5,759**|5,590|
|Amount released frompreviousyear|**(5,759)**|(5,590)|
|Income deferred in theyear|**6,834**|5,759|
|**Total**|**6,834**|5,759|
**80** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **81**
## continued **Notes to the financial statements**
## **21 Statement of total returns**
|**21 Statement of total returns**||||
|---|---|---|---|
||Expendable|Permanent|**2021**|
||endowment|endowment|**Total**|
||£’000|£’000|**£’000**|
|**Investment returns**||||
|Investment Income|802|2,615|**3,417**|
|Capitalgains|11,275|37,147|**48,422**|
|Investment management costs|(127)|(474)|**(601)**|
|**Total return foryear**|11,950|39,288|**51,238**|
|Indexation|(295)|(969)|**(1,264)**|
|Less application of total return|(1,331)|(2,489)|**(3,820)**|
|**Net total return for theyear**|10,324|35,830|**46,154**|
|||||
|**Unapplied total return**||||
|At 31 March 2021|17,799|59,937|**77,736**|
|At 31 March 2020|7,475|24,107|**31,582**|
## **22 Analysis of net assets between funds – Group**
||||Expendable|Permanent|**2021**|2020|
|---|---|---|---|---|---|---|
||Unrestricted|Restricted|endowment|endowment|**Total**|Total|
||funds|funds|funds|funds|**funds**|funds|
||£’000|£’000|£’000|£’000|**£’000**|£’000|
|**Funds balances at 31 March are represented by:**|||||||
|Intangible assets|228|–|–|–|**228**|**–**|
|Tangible fxed assets|9,727|–|–|–|**9,727**|14,074|
|Heritage assets|49,163|–|–|–|**49,163**|49,476|
|Investments|48,134|40,485|47,608|161,083|**297,310**|234,075|
|Net current liabilities|(9,576)|–|–|–|**(9,576)**|(9,531)|
|Creditors: due after oneyear|(45)|–|–|–|**(45)**|(129)|
|Defned beneftpension scheme liability|(12,217)|–|–|–|**(12,217)**|(10,717)|
|**Net assets**|85,414|40,485|47,608|161,083|**334,590**|277,248|
The net current liabilities in 2021 are funded by investments, which could be realised to meet the net liabilities as they fall due.
All net current liabilities in the Group accounts relate to the Charity. Included in the 2020 Group net current liabilities are liabilities of £270,000 of Royal Society Trading Limited.
There is no material difference in net assets between funds for the Charity.
## **23 Movements on trust and specific funds in year – Group and charity**
|||||||||Transfers/|**Unapplied**||
|---|---|---|---|---|---|---|---|---|---|---|
|||||Unapplied||||application|**total return**|**Total at**|
|||||total return||Investment||of total|**at 31**|**31 March**|
|**Permanent**|Relevant||**Relevant**|at 1 April|Income|gain|Expenditure|return|**March**|**2021**|
|**endowment funds**|value b/f|Indexation|**value c/f**|2020|£’000|£’000|£’000|Indexation
£’000|**2021**|**£’000**|
|Life Sciences Trust|11,483|115|**11,598**|3,028|314|4,454|(57)|(115)
(596)|**7,028**|**18,626**|
|Maths and Physical|||||||||||
|Sciences Trust|10,534|105|**10,639**|2,802|288|4,093|(52)|(105)
(548)|**6,478**|**17,117**|
|RW Paul|||||||||||
|Instrument Fund|11,294|113|**11,407**|3,067|310|4,408|(56)|(113)
(175)|**7,441**|**18,848**|
|Theo Murphy– UK|54,136|541|**54,677**|13,260|1,456|20,686|(264)|(541)
(855)|**33,742**|**88,419**|
|Other permanent|||||||||||
|endowments|9,479|95|**9,574**|1,950|247|3,506|(45)|(95)
(315)|**5,248**|**14,822**|
|**Total permanent**|||||||||||
|**endowments part**|||||||||||
|**of the unapplied**|||||||||||
|**total return**|96,926|969|**97,895**|24,107|2,615|37,147|(474)|(969)
(2,489)|**59,937 **|**157,832**|
|Funds not part of|||||||||||
|the unapplied total|||||||||||
|return|||||||||||
|Theo Murphy –|||||||||||
|Australia|2,052||**2,052**|||1,199||||**3,251**|
|**Total permanent**|||||||||||
|**endowments**|98,978|969|**99,947**|24,107|2,615|38,346|(474)|(969)
(2,489)|**59,937 **|**161,083**|
||||||||||Transfers/|**Unapplied**||
|---|---|---|---|---|---|---|---|---|---|---|---|
|||||Unapplied|||||application|**total return**|**Total at**|
|||||total return||Investment|||of total|**at 31**|**31 March**|
|**Expendable**|Relevant||**Relevant**|at 1 April|Income|gain|Expenditure||return|**March**|**2021**|
|**endowment funds**|value b/f|Indexation|**value c/f**|2020|£’000|£’000|£’000|Indexation|£’000|**2021**|**£’000**|
|General Trust||||||||||||
|Fund|11,011|110|**11,121**|3,825|322|4,522|(51)|(110)|(481)|**8,027**|**19,148**|
|Life Sciences Trust|6,730|67|**6,797**|1,749|184|2,585|(29)|(67)|(349)|**4,073**|**10,870**|
|Maths and Physical||||||||||||
|Sciences Trust|3,664|37|**3,701**|973|100|1,413|(16)|(37)|(192)|**2,241**|**5,942**|
|Other expendable||||||||||||
|funds|8,109|81|**8,190**|928|196|2,755|(31)|(81)|(309)|**3,458**|**11,648**|
|**Total expendable**||||||||||||
|**endowment**||||||||||||
|**funds**|29,514|295|**29,809**|7,475|802|11,275|(127)|(295)|(1,331)|**17,799**|**47,608**|
Indexation has been applied using the annual CPI rate to March 2021 (1.0%).
**82** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **83**
## continued **Notes to the financial statements**
## **23 Movements on trust and specific funds in year – Group and charity** continued
||Brought||Investment|||**Carried**|
|---|---|---|---|---|---|---|
||forward at||and actuarial|||**forward at 31**|
||1 April 2020|Income|gain/(loss)|Expenditure|Transfers|**March 2021**|
||£’000|£’000|£’000|£’000|£’000|**£’000**|
|**Restricted funds**|||||||
|Life Sciences Trust|4,819|67|582|(1,394)|772|**4,846**|
|Maths and Physical Sciences Trust|3,766|70|754|(1,044)|511|**4,057**|
|Enterprise Fund|8,621|–|(866)|(200)|–|**7,555**|
|Nutrition in Old Age Fund|5,916|116|1,257|(19)|(18)|**7,252**|
|Other restricted funds|13,607|119,920|2,288|(119,609)|569|**16,775**|
|**Total restricted funds**|36,729|120,173|4,015|(122,266)|1,834|**40,485**|
||||||||
|**Unrestricted funds**|||||||
|General Trust Fund|15,348|310|3,172|(483)|483|**18,830**|
|BEIS Science and Research|–|992|–|(992)|–|**–**|
|Revaluation Reserve|47,856|–|–|–|(315)|**47,541**|
|Defned Beneft Pension Reserve|(10,717)|–|(2,504)|1,004|–|**(12,217)**|
|Generalpurpose|27,958|11,883|5,290|(15,689)|1,818|**31,260**|
|**Total unrestricted funds**|80,445|13,185|5,958|(16,160)|1,986|**85,414**|
## **Purposes of funds**
The objects of the Life Sciences Trust are to promote and advance for the general benefit of the public, including the scientific (science, medicine, engineering and technology) community, the study and investigation of, and research into, all areas of life sciences and other science at the interface between this area and other areas of science. This shall be done in particular by supporting scientists working in this area, advancing engagement of the public in all matters relating to such science and providing the best possible scientific advice and information to those making policy in the area of life science.
The objects of the Mathematics and Physical Sciences Trust are to promote and advance for the general benefit of the public, including the scientific (science, medicine, engineering and technology) community, the study and investigation of, and research into, all areas of mathematics and physical sciences and other science at the interface between this area and other areas of science. This shall be done in particular by supporting scientists working in this area, advancing engagement of the public in all matters relating to such science and providing the best possible scientific advice and information to those making policy in the area of mathematics and physical science.
Following the Deed of retirement of the other Trustees the property and investments of the RW Paul Instrument Fund were transferred to the sole remaining Trustee, being the Royal Society. The application of the income from the portfolio is restricted to the provision of grants under the Paul Instrument Grants Scheme.
The Theo Murphy Funds (in the UK and Australia) were created through a bequest from the estate of the late Theo Murphy. The funds ‘shall be used or applied to further scientific discovery in the fields of medicine, science, technology and engineering’. The Australia Fund will carry out activities in Australia in accordance with the will.
The objects of the General Trust Fund are to promote and advance for the general benefit of the public, including the scientific (science, medicine, engineering and technology) community, the efficiency and effectiveness of the Royal Society and its Fellowship. This shall be done in particular by establishing, promoting, supporting and maintaining, for the general benefit of the public and the scientific community, its activities, premises, fixtures and fittings, equipment, libraries and archives, general publications and the history of science.
The Enterprise Fund was created by generous donations in support of the Society in making equity investments in innovative early-stage businesses emerging from the science base in the UK and elsewhere.
The Revaluation Reserve relates to the revaluation of the heritage assets.
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 2021 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, are as follows for each of the following periods:
|House Terrace, London, are as follows for each of the following periods:|||
|---|---|---|
||**2021**|2020|
||**£’000**|£’000|
|Less than oneyear|**490**|490|
|One to fveyears|**1,960**|1,960|
|Over fveyears|**18,620**|19,110|
|**Total**|**21,070**|21,560|
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 at 31 March 2021 totalled £130,000,000 (2020: £171,000,000). Of these, £59,000,000 (2020: £92,000,000) are due in less than one year, and £71,000,000 (2020: £79,000,000) in between two and five years. There are no grants payable in more than five 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 £462,000 (2020: £510,000) 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 FRS 102 was carried out as at 31 March 2021. The valuation of the Plan used the projected unit method and was carried out by Barnett Waddingham LLP, professionally qualified actuaries.
The Employer expects to make contributions to the Plan during the year to 31 March 2022 of around £1,850,000 (2021: £1,700,000).
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 2019 showed an increase in the deficit from £3,716,000 to £8,732,000. It has been agreed with the Trustees that the Employer will pay £652,000 on or before each 30 April and 31 October in the years 2020 to 2026 inclusive to meet the deficit.
Contributions payable by the Employer in respect of future benefit accrual and expenses are at the rate of 28% 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. Contributions payable by the Employer in respect of expenses are at the rate of £13,750 per month.
The Nutrition in Old Age Fund was established following the receipt of a legacy for the study of nutrition in old age.
Other restricted funds comprise monies received to fund separate restricted projects in line with our charitable activites and are held as separate individual funds in our accounts. No individual balance is in excess of £4 million on 31 March 2021.
**84** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **85**
## continued **Notes to the financial statements**
## **25 Pension obligations – Group and charity** continued **The principal assumptions used to calculate Plan liabilities include:**
|**25 Pension obligations – Group and charity**continued
**The principal assumptions used to calculate Plan liabilities include:**||
|---|---|
|**2021**|2020|
|**%pa**|%pa|
|Infation(RPI)
**3.50**|2.80|
|Infation(CPI)
**2.90**|2.00|
|Salaryescalation
**2.00**|2.00|
|Increase topensions inpayment* – subject to LPI minimum 4%
**4.20**|4.10|
|Increase topensions inpayment* – subject to LPI
**3.30**|2.70|
|Statutoryrevaluation
**2.90**|2.00|
|Discount rate(pre- andpost-retirement)
**2.05**|2.30|
|Pre-retirement mortalitytable
**105% of**
**S3NA**|105% of
S3NA|
|Post-retirement mortalitytable
**105% of**
**S3NA**|105% of
S3NA|
|Post-retirement mortality projection
**CMI_2020**
**projections**
**with LTR of**
**1.25% pa**
**and initial**
**addition of**
**0.25% pa**
**and the**
**2020 weight**
**parameter is**
**25%**|CMI_2019
projections
with LTR of
1.25% pa and
initial addition
of 0.25%pa|
|Tax-free cash
**20% of**
**pension**|20% of
pension|
|Withdrawals
**None**|None|
* Pensions in payment increase by the lesser of the annual increase in the retail price index (RPI) or 5%. For service prior to 1 November 2001 this is subject to a minimum increase of 4%.
Under the mortality tables and projections adopted, the assumed future life expectancy at age 60 is as follows:
||**2021**|2020|
|---|---|---|
|Male currentlyaged 40|**27.8years**|28.2years|
|Female currentlyaged 40|**30.6years**|30.8years|
|Male currentlyaged 60|**26.3years**|26.8years|
|Female currentlyaged 60|**29.2years**|29.4years|
## **25 Pension obligations – Group and charity** continued
|The assets in the Plan were:|**Value at 31**|Value at 31|
|---|---|---|
||**March 2021**|March 2020|
||**£’000**|£’000|
|Equities|**14,941**|16,916|
|LDIportfolio|**11,097**|10,793|
|Multi-asset fund|**17,153**|4,266|
|Cash|**5,877**|1,056|
|Diversifedgrowth|**–**|8,874|
|Annuity policies|**4,821**|6,448|
|**Total market value of Plan assets**|**53,889**|48,353|
|Present value of scheme liabilities|**(66,106)**|(59,070)|
|**Netpension liability**|**(12,217)**|(10,717)|
The assets do not include any investment in the Employer.
## **Reconciliation of present value of scheme liabilities**
|**Reconciliation of present value of scheme liabilities**|||
|---|---|---|
||**Year to 31**|Year to 31|
||**March 2021**|March 2020|
||**£’000**|£’000|
|**Defned beneft obligation at 1 April**|**59,070**|59,080|
|Current service cost|**412**|450|
|Contributions byPlanparticipants|**94**|103|
|Interest cost|**1,337**|1,462|
|Beneftspaid|**(2,026)**|(1,323)|
|Experience(gain)/loss on liabilities|**(541)**|111|
|Changes to demographic assumptions|**(1,014)**|86|
|Changes to fnancial assumptions|**8,774**|(899)|
|**Defned beneft obligation at 31 March**|**66,106**|59,070|
## **Sensitivity analysis of the scheme deficit**
The sensitivity of the present value of the scheme deficit to changes in the principal assumptions used is set out below.
|||Change in|
|---|---|---|
||Change in|liabilities|
||assumption|£’000|
|Discount rate|–0.10%|2,341|
|Rate of infation*|–0.10%|(222)|
|Commutation|No commutation|2,499|
||1% pa long-term||
||rate of mortality||
|Mortality|improvements|(769)|
* Other assumptions linked to the rate of inflation are also assumed to change appropriately.
**86** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **87**
## continued **Notes to the financial statements**
## **25 Pension obligations – Group and charity** continued **Reconciliation of fair value of scheme assets**
|**25 Pension obligations – Group and charity**continued
**Reconciliation of fair value of scheme assets**||
|---|---|
|**Year to 31**|Year to 31|
|**March 2021**|March 2020|
|**£’000**|£’000|
|**Fair value of scheme assets at 1 April**
**48,353**|47,499|
|Interest on assets
**1,110**|1,182|
|Contributions bythe Employer
**1,832**|1,054|
|Contributions byschemeparticipants
**94**|103|
|Beneftspaid
**(2,026)**|(1,323)|
|Administration costs
**(189)**|(240)|
|Return on Plan assets less interest
**4,715**|78|
|**Fair value of scheme assets at 31 March**
**53,889**|48,353|
The actual return on Plan assets in the year was £5,825,000 (2020: £1,260,000).
## **Analysis of the amount charged to the statement of financial activities – operations**
|**Analysis of the amount charged to the statement of fnancial activities – operations**||
|---|---|
|**Value at 31**|Value at 31|
|**March 2021**|March 2020|
|**£’000**|£’000|
|Current service cost
**412**|450|
|Administration costs
**189**|240|
|Interest cost
**1,337**|1,462|
|Interest on assets
**(1,110)**|(1,182)|
|**Total charge**
**828**|970|
## **Actuarial gains and losses**
|**Actuarial gains and losses**||
|---|---|
|**Value at 31**|Value at 31|
|**March 2021**|March 2020|
|**£’000**|£’000|
|Gains on scheme assets in excess of interest
**(4,715)**|(78)|
|Experience(gains)/losses on liabilities
**(541)**|111|
|(Gains)/losses from changes to demographic assumptions
**(1,014)**|86|
|Losses/(gains)from changes to fnancial assumptions
**8,774**|(899)|
|**Actuarial losses/(gains)**
**2,504**|(780)|
The Royal Society (‘the Employer’) operates two pension schemes and contributes to the Royal Society Group Personal Pension Plan (defined contribution). During the year ended 31 March 2021, employer contributions to this scheme totalled £633,000 (2020: £594,000).
During the year, one member of the Society’s staff was a member of the Universities Superannuation Scheme (USS), a defined benefit scheme (2020: one member). During the year ended 31 March 2021, employer contributions to this scheme totalled £26,000 (2020: £41,000). The employer contribution rate at the year end was 21% (2020: 21%).
USS is a defined benefit scheme which is externally funded and valued every three years by professionally qualified independent actuaries using the Projected Unit Method. The scheme is a ‘last man standing’ scheme, which means that in the event that another member institution becomes insolvent the other participating members will pick up any funding shortfall.
At the date of the latest actuarial valuation of the scheme (31 March 2020), the assets were sufficient to cover 84% of the benefits that had accrued to members; the deficit at 31 March 2020 was £12.9 billion (2019: £5.4 billion).
## **25 Pension obligations – Group and charity** continued
Based on expected contributions until 31 March 2028, 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 company, as a tool for estimating the liability under the recovery plan for accounting purposes. An initial liability of £184,000 was charged to the statement of financial activities during 2015/16 and recorded as a liability on the balance sheet to be unwound over time (initially over the period to 2031) as the liability is discharged; to 31 March 2021, £134,000 of this provision has been released. Further information can be found at www.uss.co.uk
## **26 Subsidiary undertakings**
The Society owns 100% of the £1 called-up and issued share capital of Royal Society Trading Limited (registered number 06967016). Royal Society Trading Limited has been set up to process the activities that occur at Chicheley Hall. On 23 March 2020, the Directors of Royal Society Trading Limited agreed to cease operations immediately and the company has not traded since this date. On 10 March 2021, Chicheley Hall was sold. The Charity (parent) agreed to waive the debt owed by the subsidiary and to support the winding down of activities. This has been treated as a capital contribution directly to shareholders’ funds in the subsidiary in 2020 and 2021. The annual accounts for the financial year ended 31 March 2021 were not prepared on a going concern basis.
The Society also owns 100% of the £1 called-up and issued share capital of Royal Society (London) Ltd (registered number 08808518). Royal Society (London) Ltd has been set up to process corporate sponsorships at the Society.
||Royal Society
(London)Ltd
Royal Society Trading
Limited
**2021**
**£’000**
2020
£’000
**2021**
**£’000**
2020
£’000|
|---|---|
|**Results for theyear ended 31 March:**||
|**Trading income**||
|Internal income|**–**
–
**–**
296|
|External income|**110**
127
**–**
1,848|
|Cost of sales|**–**
–
**(176)**
(2,273)|
|**Grossproft/(loss)**|**110**
127
**(176)**
(129)|
|Administrative expenses|**(4)**
(5)
**(9)**
(46)|
|**Operating proft/(loss)**|**106**
122
**(185)**
(175)|
|Interest on loan account toparent|**–**
–
**–**
(12)|
|Gift Aidpayable toparent charity|**(106)**
(122)
**–**
–|
|**Result for theperiod**|**–**
–
**(185)**
(187)|
|Total funds brought forward at 1 April|**–**
–
**(270)**
(925)|
|Capital contribution fromparent charity|**–**
–
**455**
842|
|**Total funds carried forward at 31 March**|**–**
–
**–**
(270)|
|**Balance sheet as at 31 March:**||
|**Current assets**||
|Stock|**–**
–
**–**
14|
|Debtors|**132**
–
**–**
64|
|Cash at bank and in hand|**2**
132
**–**
140|
||**134**
132
**–**
218|
|Creditors: amounts fallingdue within oneyear|**(134)**
(132)
**–**
(488)|
|**Net current liabilities**|**–**
–
**–**
(270)|
|**Capital and reserves**||
|Called-upshare capital|**–**
–
**–**
–|
|Proft and loss reserve|**–**
–
**(1,297)**
(1,112)|
|Capital reserve|**–**
–
**1,297**
842|
|**Shareholder’s funds**|**–**
–
**–**
(270)|
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. At 31 March 2021 its net assets were £3,982,000 (2020: £2,720,000).
**88** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
**SCIENCE IN A PANDEMIC:** ADAPTING TO THE PRESENT AND PREPARING FOR THE FUTURE **89**
## continued **Notes to the financial statements**
## **27 Prior year comparison – Consolidated statement of financial activities**
(incorporating an income and expenditure account) For the year ended 31 March 2020
|
(incorporating an income and expenditure account)
For the year ended 31 March 2020|||||||
|---|---|---|---|---|---|---|
|||||Expendable|Permanent|**2020**|
|||Unrestricted|Restricted|endowment|endowment|**Total**|
|||funds|funds|funds|funds|**funds**|
||Notes|£’000|£’000|£’000|£’000|**£’000**|
|Income and endowments from donations and legacies|1|536|269|–|–|**805**|
|**Income from charitable activities**|||||||
|Grants for charitable activities|4|992|107,537|–|–|**108,529**|
|Tradingin furtherance of charitable activities|3|10,905|638|–|–|**11,543**|
|||11,897|108,175|–|–|**120,072**|
|Other tradingactivities|3|1,975|–|–|–|**1,975**|
|Income from investments|2|1,249|1,004|1,070|3,528|**6,851**|
|Other income|5|–|76|–|–|**76**|
|**Total income**||15,657|109,524|1,070|3,528|**129,779**|
|Expenditure on raisingfunds|6|3,388|413|127|484|**4,412**|
|**Expenditure on charitable activities**|7||||||
|Promotingscience and its benefts||72|173|–|–|**245**|
|Supportingand recognisingexcellence in science||10,845|93,246|–|–|**104,091**|
|Providingscientifc advice forpolicy||1,966|2,299|–|–|**4,265**|
|Fosteringinternational andglobal cooperation||905|15,261|–|–|**16,166**|
|Education andpublic engagement||3,108|1,417|–|–|**4,525**|
|||16,896|112,396|–|–|**129,292**|
|**Total expenditure**||20,284|112,809|127|484|**133,704**|
|**Net (expenditure)/income before net (losses)/gains**|||||||
|**on investments**||(4,627)|(3,285)|943|3,044|**(3,925)**|
|Net(losses)/gains on investments|18|(2,212)|(1,634)|(4,645)|(15,283)|**(23,774)**|
|**Net(expenditure)/income for theyear**||(6,839)|(4,919)|(3,702)|(12,239)|**(27,699)**|
|Gross transfers between funds|23|2,822|1,218|(735)|(3,305)|**–**|
|Actuarialgains/(losses)on defned beneftpension scheme|25|780|–|–|–|**780**|
|**Net movement in funds**||(3,237)|(3,701)|(4,437)|(15,544)|**(26,919)**|
|**Total funds brought forward**||83,682|40,430|41,426|138,629|**304,167**|
|**Total funds carried forward**||80,445|36,729|36,989|123,085|**277,248**|
## **28 Prior year comparison – Analysis of net assets between funds – Group**
||||Expendable|Permanent|**2020**|
|---|---|---|---|---|---|
||Unrestricted|Restricted|endowment|endowment|**Total**|
||funds|funds|funds|funds|**funds**|
||£’000|£’000|£’000|£’000|**£’000**|
|**Funds balances at 31 March 2020 are represented by:**||||||
|Tangible fxed assets|14,074|–|–|–|**14,074**|
|Heritage assets|49,476|–|–|–|**49,476**|
|Investments|37,272|36,729|36,989|123,085|**234,075**|
|Net current liabilities|(9,531)|–|–|–|**(9,531)**|
|Creditors: due after oneyear|(129)|–|–|–|**(129)**|
|Defned beneftpension scheme liability|(10,717)|–|–|–|**(10,717)**|
|**Net assets**|80,445|36,729|36,989|123,085|**277,248**|
There is no material difference in net assets between funds for the Charity.
## **29 Prior year comparison – Movements on trust and specific funds in year – Group**
|||||||**Carried**|
|---|---|---|---|---|---|---|
|||||||**forward at**|
||Brought||||Investment|**31 March**|
||forward at 1|Income|Expenditure|Transfers|gain/(loss)|**2020**|
|**Permanent endowment funds**|April 2019|£’000|£’000|£’000|£’000|**£’000**|
|Life Sciences Trust|16,483|428|(59)|(587)|(1,754)|**14,511**|
|Maths and Physical Sciences Trust|15,148|394|(54)|(540)|(1,612)|**13,336**|
|RW Paul Instrument Fund|15,969|415|(57)|(266)|(1,700)|**14,361**|
|Theo Murphy– UK|75,388|1,960|(269)|(1,658)|(8,025)|**67,396**|
|Theo Murphy– Australia|2,887|–|–|–|(835)|**2,052**|
|Otherpermanent endowments|12,754|331|(45)|(254)|(1,357)|**11,429**|
|**Totalpermanent endowments**|138,629|3,528|(484)|(3,305)|(15,283)|**123,085**|
|**Expendable endowment funds**|||||||
|General Trust Fund|16,292|421|(50)|–|(1,827)|**14,836**|
|Life Sciences Trust|9,691|250|(30)|(345)|(1,087)|**8,479**|
|Maths and Physical Sciences Trust|5,299|137|(16)|(189)|(594)|**4,637**|
|Other expendable funds|10,144|262|(31)|(201)|(1,137)|**9,037**|
|**Total expendable endowment funds**|41,426|1,070|(127)|(735)|(4,645)|**36,989**|
||||||||
|**Restricted funds**|||||||
|Life Sciences Trust|5,963|173|(1,712)|452|(57)|**4,819**|
|Maths and Physical Sciences Trust|4,783|125|(1,339)|414|(217)|**3,766**|
|Enterprise Fund|9,536|–|(310)|–|(605)|**8,621**|
|Other restricted funds|20,148|109,226|(109,448)|352|(755)|**19,523**|
|**Total restricted funds**|40,430|109,524|(112,809)|1,218|(1,634)|**36,729**|
|**Unrestricted funds**|||||||
|General Trust Fund|15,698|406|(47)|47|(756)|**15,348**|
|BEIS Science and Research|–|992|(992)|–|–|**–**|
|Revaluation Reserve|47,856|–|–|–|–|**47,856**|
|Defned Beneft Pension Reserve|(11,581)|–|84|–|780|**(10,717)**|
|Generalpurpose|31,709|14,259|(19,329)|2,775|(1,456)|**27,958**|
|**Total unrestricted funds**|83,682|15,657|(20,284)|2,822|(1,432)|**80,445**|
|**Total for all trusts**|||||||
|Life Sciences Trust|32,137|851|(1,801)|(480)|(2,898)|**27,809**|
|Maths and Physical Sciences Trust|25,230|656|(1,409)|(315)|(2,423)|**21,739**|
|RW Paul Instrument Fund|15,969|415|(57)|(266)|(1,700)|**14,361**|
|Theo Murphy– UK|75,388|1,960|(269)|(1,658)|(8,025)|**67,396**|
|Otherpermanent endowments|12,754|331|(45)|(254)|(1,357)|**11,429**|
|Theo Murphy– Australia|2,887|–|–|–|(835)|**2,052**|
|General Trust Fund|31,990|827|(97)|47|(2,583)|**30,184**|
|Other expendable endowments|10,144|262|(31)|(201)|(1,137)|**9,037**|
|Enterprise Fund|9,536|–|(310)|–|(605)|**8,621**|
|Other restricted funds|20,148|109,226|(109,448)|352|(755)|**19,523**|
|BEIS Science and Research|–|992|(992)|–|–|–|
|Revaluation Reserve|47,856|–|–|–|–|**47,856**|
|Defned Beneft Pension Reserve|(11,581)|–|84|–|780|**(10,717)**|
|Generalpurpose|31,709|14,259|(19,329)|2,775|(1,456)|**27,958**|
|**Total**|304,167|129,779|(133,704)|–|(22,994)|**277,248**|
There is no material difference in movements on trust and specific funds in year for the Charity.
**90** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
## **Reference and administrative details**
## **President**
Sir Adrian Smith** Sir Venki Ramakrishnan*
## **Treasurer**
Sir Andrew Hopper
## **Physical Secretary**
Professor Peter Bruce
## **Foreign Secretary**
Sir Richard Catlow
**Biological Secretary** Dame Linda Partridge
## **Members of Council**
Professor Judith Armitage** Professor Michael Ashfold
Professor David Beerling Dr Mariann Bienz*
Sir Leszek Borysiewicz*
Baroness Brown of Cambridge (Professor Dame Julia King)**
Sir Steven Cowley**
Professor Christl Donnelly
Dr Christopher Dye
Professor Chris Hawkesworth
Dame Sue Ion*
Professor Richard Jones Professor Jane Langdale Professor Thomas McLeish
Professor Richard Morris
Professor James Naismith**
Professor Sheena Radford
Sir Jim Smith**
Professor Maria Grazia Spillantini
Professor Karen Steel*
Professor Jennifer Thomas**
Professor Ulrike Tillmann* Professor Veronica van Heyningen Professor Julia Yeomans*
* Retired 30 November 2020
- ** Appointed 30 November 2020
## **Executive Director**
Dr Julie Maxton
## **Key Management Personnel**
Andrew Allen, Director of International Affairs Jennifer Cormack, Director of Development Mary Daly, Chief Financial Officer Richard Gascoigne, Director of IT Bill Hartnett, Director of Communications Linda Kelly, Director of Human Resources Rupert Lewis, Chief Science Policy Officer Dr Paul McDonald, Director of Grants Programmes Lesley Miles, Chief Programmes, Partnerships and Engagement Officer
Dr Alan Pitt, Director of Fellowship, Strategy and Governance
Dr Stuart Taylor, Director of Publishing
## **Statutory Auditor**
BDO LLP 2 City Place, Gatwick RH6 0PA
## **Bankers**
Natwest Group 1 Princes Street, London EC2R 8BP
## **Investment Managers**
Rathbone Brothers PLC 8 Finsbury Circus, London EC2M 7AZ
## **Internal Auditors**
KPMG LLP 15 Canada Square, London E14 5GL
## **Lawyers**
Stone King LLP 91 Charterhouse Street, London EC1M 6HR Withers LLP 20 Old Bailey, London EC4M 7AN
## **Registered Charity Number 207043**
## **Registered address**
6 – 9 Carlton House Terrace London SW1Y 5AG
## **royalsociety.org**
**Audit Committee Chair** Sir John Beddington
**92** THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS
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 collaboration
- Demonstrating the importance of science to everyone
For furth **er information** The Royal Society 6 – 9 Carlton House Terrace London SW1Y 5AG
**T** +44 20 7451 2500 **E** science.policy@royalsociety.org **W** royalsociety.org
Registered Charity No 207043 Issued: August 2021 DES7464