2010

Trustees’ report and accounts

Patron Her Majesty The Queen President His Royal Highness The Prince of Wales KG KT GCB OM Deputy presidents Her Royal Highness Princess Alexandra The Hon Lady Ogilvy LG GCVO The Countess Mountbatten of Burma CBE CD JP DL Honorary vice-presidents Lord Barnard TD The Rt Hon Baroness Chalker of Wallasey Sylvia, Countess of Limerick CBE Professor John McClure OBE Mrs Elspeth Thomas CBE DL Vice-presidents Mr Anthony Andrews Ms Angela Rippon OBE Mrs Maria Shammas MBE Board of trustees Chairman Mr James M. T. Cochrane Vice-chairmen Mr Terrence Collis
(until 31 December 2010)
Mr David Fall CMG (from 1 January 2011)
Mrs Beryl Hutchinson MBE
(until 31 December 2010)
Mrs Victoria Peterkin
Treasurer Mr Russell Walls Other trustees Mrs Sue Brown Mrs Stella Cummings Mr Stanley Fitches MBE Ms Amy Foan Mr Christopher Hedges Mr Michael Herriot MBE Mr Steve John (from 1 January 2011) Mr Afzal Khan CBE Lady Lamport Dr Lise Llewellyn Mr Gordon Low (from 1 January 2011) Dr J. Kay Richmond Mr Graham Stegmann CBE

Senior management team Chief executive Sir Nicholas Young Managing director of operations Michael Adamson (from 11 October 2010) Director of international David Peppiatt Director of UK service development Margaret Lally UK director, Northern Territory Jean Henderson UK director, Scotland, Northern Ireland and the Isle of Man Territory Gerry McLaughlin (until 13 August 2010)
Helen Bath (acting director from 16
August until 15 October 2010)
Norman McKinley (from 18 October 2010)
UK director, South Eastern Territory Liz Page UK director, Wales and Western Territory Annie Bibbings Director of human resources and education Roger Smith FCIPD Director of fundraising Mark Astarita Director of communications Philip Talbot Director of strategy and corporate performance Kate Lee (until 30 April 2010) Interim director of strategy Julian Mason (from 1 May 2010) Director of finance and business development Rohan Hewavisenti ACA

External auditors BDO LLP Emerald House East Street Epsom Surrey KT17 1HS Bankers National Westminster Bank plc City of London Office PO Box 12258 1 Princes Street London EC2R 8PA Investment managers Lazard Asset Management Ltd 50 Berkeley Street London W1J 8HA Legal & General Investment Management One Coleman Street London EC2R BlackRock 33 King Wiilliam Street London EC4R 9AS External legal advisers Withers 15 Old Bailey London EC4M 7EG

The British Red Cross is required at all times to act in accordance with the fundamental principles of the International Red Cross and Red Crescent Movement, the world’s largest independent humanitarian organisation:

Humanity Impartiality Neutrality Independence Voluntary service Unity Universality
For more information about the Movement, visit redcross.org.uk/movement
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Herline Jasmina, 36, is a resident of the Automeca camp for displaced people in Haiti, who we are supporting with cash grants

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British Red Cross Trustees’ report and accounts 2010

Chairman and chief executive’s statement Objectives Activities Plans for 2011 Review of finances Structure and governance Independent auditors’ report to the trustees of the
British Red Cross Society Accounts for the year ended 31 December 2010 Thank you

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21 42

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Chairman and chief executive’s statement
Emergency response is at the core of what we do, but it is the nature of the work that some years are quieter than others. 2010 was not a quiet year. It was dominated by two of the worst disasters in years overseas, along with bouts of ice and snow here in the UK that caused problems for many vulnerable and isolated people. January’s earthquake in Haiti and the summer floods in Pakistan affected 20 million people between them and will continue to mark many people’s lives for years to come. The International Red Cross and Red Crescent Movement responded in full force to both disasters, and the British Red Cross played a key role in both responses, providing vital relief items and experts in fields like logistics and sanitation. It will be a hard road to recovery for both countries. In Haiti’s case the British Red Cross will be there for two or three more years, working with our Movement partners. Meanwhile, our UK volunteers and staff battled through the snow in January and again in November and December, supporting hundreds of vulnerable people in tough conditions. They also demonstrated our flexibility and resolve in supporting communities by providing support after floods, shootings and a bus crash in Cumbria. Alongside these exceptional events, our day-to-day work has to continue, whether it’s emergency response, health and social care, improving people’s ability to cope with disasters or supporting the Movement’s humanitarian work overseas. 2010 was a particularly important year for us as we embarked on our new five-year strategy, Saving Lives, Changing Lives. For example, we started to review the way we deliver our health and social care services, to provide beneficiaries and commissioners with a more integrated, consistent national offer. And we have started to advocate more strongly on behalf of vulnerable people, for example with our report and call to action about destitution among asylum-seekers. It is humbling to see that, even in tough economic times, our supporters continue to put their faith in us, confident that we will use their money responsibly and effectively. This is not a trust we take lightly, and we continue to keep our costs under tight control. Our volunteers and staff also continue to display unparalleled commitment and professionalism, and this is of vital importance in maintaining our effectiveness. We would like to thank them all for everything they have done in 2010. James M. T. Cochrane

Chairman of the board of trustees Sir Nicholas Young

Chief executive

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British Red Cross Trustees’ report and accounts 2010

Objectives

The legal objects of the British Red Cross, as laid out in its revised Royal Charter, are to provide assistance to victims of armed conflicts and to work for the improvement of health, the prevention of disease and the prevention and alleviation of human suffering in the UK and throughout the world. Our vision is of a world in which everyone receives the help they need in a crisis. Our core purpose is to mobilise the power of humanity so that individuals and communities have the capacity to prepare for, deal with and recover from a crisis. Our corporate strategy, Saving Lives, Changing Lives, sets out the organisation’s objectives and provides the framework for our core activities for the period 2010-2015.

Our plans for 2010 included: > strengthening our emergency response to ensure that more individuals and communities affected by emergencies have the practical and emotional support they need during and immediately after the event > responding to the Haiti earthquake by meeting people’s immediate needs and assessing how we can best support the transition from relief to recovery > building resilience in individuals and communities to help them prepare for and withstand disasters. We also planned to explore and define what the term resilience may mean in a wider UK context > increasing the impact of the International Red Cross and Red Crescent Movement in meeting the needs of the most vulnerable people, by being an active, supportive and influential member of the Movement.

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Activities

Two of the worst natural disasters in recent memory marred 2010. The Haiti earthquake in January and Pakistan’s floods in the summer affected nearly 20 million people between them, displacing millions of people from their homes and leaving them vulnerable to hardship and disease. The British public responded generously to our appeals for both disasters and our responses, working with the wider International Red Cross and Red Crescent Movement, were swift and extensive.

Haiti A devastating earthquake measuring 7.3 on the Richter scale struck Haiti on 12 January 2010. It was the worst to strike the country in 200 years. The Haitian government estimates that 1.3 million people were displaced and more than 200,000 people died. The International Red Cross and Red Crescent Movement response in Haiti is its largest ever response in a single country. Among other activities, as of December 2010, it had distributed more than a million relief items, reached 288,000 people with health services, and was producing and distributing 2.5 million litres of clean water each day. The British Red Cross raised £17.5 million for Haiti (£11.9 million from our Haiti Earthquake Appeal, £1 million from the Department for International Development (DFID) and £4.6 million drawn down from the Disasters Emergency Committee (DEC) during the year).

Our involvement in the wider Red Cross response has included:

> sending experts in mass sanitation and logistics to Haiti from the UK > distributing emergency relief items such as blankets, tarpaulins and mosquito nets > supporting Red Cross basic healthcare units and mobile clinics.
The British Red Cross is now mainly working on sanitation and livelihoods in four locations: Automeca and La Piste camps, the Delmas 19 area of Port-auPrince – the Haitian capital – and the Les Cayes region, which many people fled to after the earthquake. The scale of the disaster means recovery will be a long process for the people of Haiti, so we expect to be working there for two or three more years. redcross.org.uk/haiti

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British Red Cross Trustees’ report and accounts 2010

Pakistan The worst floods in Pakistan for 80 years affected more than 20 million people, many of whom lost their homes, and severely damaged the country’s infrastructure, including healthcare and sanitation facilities. Our appeal, plus money drawn down from the DEC and from DFID, has raised £12 million to date. We also donated £50,000 from our Disaster Fund in the first few days of severe flooding. As soon as the floods hit, the British Red Cross gave thousands of relief items and helped the Movement provide around 60,000 families with food, emergency shelter and household goods.

A Red Cross relief worker, from one of more than 30 Red Cross National Societies working in Haiti, carries a child

A Red Cross nurse asks a child in Pakistan to breathe deeply so she can check the condition of his lungs

Fatima, 85, ran with her family from their village in Pakistan as the flood waters breached the nearby levees

We have sent 25 delegates to Pakistan so far, including logistics and sanitation specialists. Our logistics teams helped more than 90,000 people a week receive relief items and food in south Pakistan. As of January 2011, the Movement as a whole had reached 2.3 million people in Pakistan with food, and 1.4 million people with other relief items such as tarpaulins or blankets. redcross.org.uk/pakistanfloods

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Emergency response

UK During 2010, we responded to 2,000 emergencies in the UK (950 in Scotland), including 40 major incidents. The year began and ended with severe winter weather across the country. The snowfall in January and February, and again in November and December, caused major disruption, cutting off communities and endangering the lives of some of the most vulnerable people. Our volunteers, equipped with Land Rover 4x4 vehicles, worked round the clock to support the emergency services. They ferried critically ill patients to hospital, made sure discharged patients got safely home and delivered essential medical equipment. In December, they also gave out blankets and pillows to passengers stuck at Glasgow Airport, and offered support to around 500 people stranded

outside King’s Cross station in London. In Northern Ireland, we helped deliver drinking water to vulnerable residents after 40,000 people were left without water supplies during power cuts. In May, volunteers and staff provided first aid and emotional support to passengers and their families after a fatal school coach crash near Keswick

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British Red Cross Trustees’ report and accounts 2010

>

Staff and volunteers, equipped with specialised 4x4 vehicles, were a lifeline for people in isolated communities cut off by heavy snowfall

in Cumbria. Then we provided practical and emotional support after the shootings in June, again in Cumbria. We also provided first aid cover at 9,500 public events (1,900 in Scotland), including marathons and music festivals. We also continued our work with vulnerable refugees and asylum seekers,
providing them with emergency help, as well as advice on accessing statutory support. In 2010, we helped 39,900 refugees and asylum seekers (800 in Scotland), of whom 21,200 were destitute. In June, we published Not gone, but forgotten, a report on destitution among this group, calling for a more humane asylum system.

International In 2010, we responded to 25 overseas disasters, including the Haiti earthquake and Pakistan floods. They ranged from food shortages in Niger in April to a tropical storm in Guatemala in June that left almost 76,400 people living in shelters. We also worked with victims of conflict, including people affected by ethnic violence in Kyrgyzstan in June. We donated £290,000 from our Disaster Fund in November alone, to help people in Asia and Africa affected by a spate of disasters, including an earthquake and volcano eruption in Indonesia, a typhoon in the Philippines and floods in Vietnam and Burkina Faso.

The volunteers were absolute life-savers. They
came down a very dodgy
hill to get the supplies to
us and it was such a relief.
They even came back to
deliver Pete’s medication.
I’m so grateful

Sue Smith from Cornwall, who was nursing her
sick husband at home during heavy snow

Volunteers treat a casualty during a simulated emergency response exercise

The earthquake in Chile in February 2010 damaged or destroyed around 200,000 homes

We also launched an appeal in the aftermath of February’s earthquake in Chile, to help fund search and rescue and medical assistance, as well as basic amenities like water, sanitation and shelter, for some of the two million people affected.
redcross.org.uk/emergencyresponse redcross.org.uk/refugees

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Resilience
The most resilient communities are the ones where everyone knows how to save a life. In 2010, 335,500 people attended our first aid courses in the UK, including 56,200 on courses tailored to vulnerable people, such as those with disabilities. We also launched a major campaign to encourage young people to learn simple first aid skills and to have the confidence to use them when needed. Our Life. Live it. campaign, launched in September, talks to 11-16-year-olds across the UK through social media, youth press, schools, competitions and events. Premier League football clubs Blackburn Rovers and Newcastle United signed up to support us, holding first aid football events for lucky competition winners. The campaign will continue and expand throughout 2011. Our education programme teaching young people about humanitarian issues and international humanitarian law continued, with our volunteers and staff reaching 178,400 young people. Overseas, we support resilience programmes reaching over 950,000 people in over 20 countries in Africa, Central Asia, South Asia, the Middle East, and Eastern Europe. Our programmes cover areas including health and social care, water and sanitation, disaster preparedness and risk reduction, food and economic security, and shelter.
redcross.org.uk/education redcross.org.uk/firstaid redcross.org.uk/lifeliveitnow

Health and social care

Our UK health and social care services give short-term help to vulnerable people who cannot cope at home alone, possibly following a stay in hospital or to avoid them being admitted in the first place. We work with commissioners and referrers from NHS organisations, social care services, voluntary organisations and local authorities to deliver these services. In 2010, we supported 439,600 people (28,200 in Scotland) with services including care in the home, loans of medical equipment such as wheelchairs, and transport to and from hospital appointments, or simply to run errands. We also started a review of our health and social care services, which will continue into 2011. Our aim is to incorporate our existing services as far as possible into one national health and social care offer, tailored to meet local need, that should in principle be available throughout the UK.
redcross.org.uk/healthandsocialcare

>

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It was the Red Cross volunteer who encouraged me to take my treatment regularly. I want to work at the clinic as a counsellor. I want to tell people that if they have HIV it is not the end of the world
Boniswe, 30, (above) lives with HIV in South Africa and was bedridden when we started working with her

A first aid training course specially designed for young carers in Ross-shire, Scotland

A participant signs during an inclusive first aid course, aimed at people with disabilities

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Plans for 2011
Despite the tough economic climate, during the second year of our fiveyear corporate strategy, Saving Lives, Changing Lives, we will draw down on our reserves to invest significantly in our services, ensuring we have an even greater impact on the lives of people vulnerable to crisis. Our main priorities for 2011 include:

need during and immediately after an emergency

> strengthening the quality of all our services for refugees and asylum seekers > increasing the reach and quality of the Federation’s disaster response, including continuing to provide assistance to communities in Haiti and Pakistan as people begin to rebuild their lives, as well as supporting those affected by the forgotten or ongoing disasters that do not attract media attention > building resilience, helping people and communities prepare for and withstand disasters. We will do this through first aid and humanitarian education programmes in the UK,

> strengthening our ability to draw together resources from across the UK to respond to large emergencies. This forms part of the continual improvement of our emergency response offer, to ensure more people affected by emergencies have the practical and emotional support they

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British Red Cross Trustees’ report and accounts 2010

The Red Cross support was a godsend in these conditions. We really appreciated their co­ ordinated response
Tim Slater, East Midlands Ambulance Service, following our snow response

and through strengthening the capacity of our partners within the International Red Cross and Red Cresent Movement to implement high-quality resilience programmes in their own countries

> playing a leading role in the development of the Federation’s strategy for improving the capabilities of National Societies, and supporting the development of a resource mobilisation strategy for the Movement.

A volunteer for our care in the home service talks to a beneficiary

Emergency response volunteers clocked up hundreds of hours helping vulnerable people during bad weather

People under 26 make up 18 per cent of our volunteers

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Review of finances

Our total expenditure in 2010 increased from £181 million to £199.2 million. This was supported by a 13 per cent increase in our total income to £205.7 million. Our individual supporters donated more than ever before, throughout challenging economic times, with income from regular giving increasing by 22 per cent to £34.6 million.

Charitable expenditure Our charitable expenditure increased by seven per cent to £132.8 million in 2010 with the increase mostly in our emergency response and resilience activities. Our response to the Haitian earthquake and Pakistan floods resulted in our international emergency response expenditure increasing by 26 per cent to £26.1 million. We also invested further in our UK emergency response activities, increasing expenditure by 13 per cent to £20.7 million. Expenditure on resilience increased 12 per cent to £36.3 million with the principal increase being in our international partnership development with National Societies. Our health and social care work is primarily UK-based, and our expenditure on this activity decreased to £41.4 million due to the decision to transfer our care homes to Heritage Care Limited at the start of the year, and the transfer of community equipment service contracts. Fundraising Voluntary income, which includes income from emergency appeals, fundraising, regular giving, cash donations and legacies, increased by 25 per cent from £95.6 million to £119.9 million.

Charitable income Around 28 per cent of our total income comes directly from our charitable activities including first aid training fees, health and social care contracts and grants to support our international work. In 2010, £5.1 million of our charitable income related to grants from the Department for International Development in relation to the Haiti earthquake and Pakistan floods. Income from first aid training, which is included within our UK resilience income, remained steady at £12.9 million. Reserves Our reserves policy is set to ensure that there is no disruption of British Red Cross services in the event of an unforeseen reduction in income or increase in expenditure. We released the remaining balance in designated reserves as at 31 December 2010, which increased free available reserves by £3.6 million. Our reserves policy sets our minimum free reserves level at £15 million excluding our legacy accrual. As at 31 December, excluding our legacy accrual of £10.1 million (2009: £9.7 million), our free available reserves amounted to £44.6 million (2009: £33.6 million), equivalent to 2.5 months’ expenditure (2009: 1.9 months).

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British Red Cross Trustees’ report and accounts 2010

Volunteer Amy Spedding with assistant shop manager Chris Rafferty aboard the Big Red Bus, which travelled the UK in June to celebrate Volunteers Week

Our strategy, Saving Lives, Changing Lives, outlines plans to draw down on our free available reserves by 2015. We plan to draw down £18 million of reserves in 2011 and a further £7 million in 2012.

Pensions The British Red Cross operates two defined benefit pension schemes, which are both closed to new members. The net pension surplus reported in our accounts is £1.1 million as at 31 December 2010 (2009 deficit: £1.6 million) and the actuarial gain during the year was £2 million (2009: £1.6 million loss). While the accounts show a net surplus on an FRS 17 basis, both schemes are showing a deficit on an actuarial basis and payment plans are in place to reduce this deficit. We also have contingent liabilities in relation to the membership of the Pension Trust’s Growth Plan. The British Red Cross has sole liability for £4.3 million and joint liability with the Order of St John for £1.9 million pension liabilities of the Joint Committee of the Order of St John of Jerusalem and British Red Cross Society.

Investments As at 31 December 2010, we held fixed asset investments of £58 million (2009: £37.8 million). Our investments reported gains of £1.7 million in 2010. An investment sub-committee of the finance and audit committee regularly reviews our investment portfolio and performs an annual review of our investment policy. Our investment objective is to seek yield subject to a requirement of capital preservation. The investment sub-committee has reviewed, and is satisfied with, the overall performance of the investment portfolio against its benchmarks.

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Structure and governance

Legal status The British Red Cross was founded in 1870 and incorporated by Royal Charter in 1908. A Supplemental Royal Charter took effect on 1 January 1998, and this was revised by HM The Queen in Council on 17 July 2003. The governing instruments under which the British Red Cross operates comprise this revised charter, the standing orders and other policies agreed from time to time by its governing body, the board of trustees. Organisation The board of trustees comprises nine elected members and up to eight members co-opted by the board itself. Their terms of office last for three years, and they can serve two consecutive three-year terms, after which they must stand down from the board for at least one year. A nominations group is convened to oversee trustee recruitment. The recruitment for elected trustees is conducted via a national electoral college of eight volunteer council chairs; the board of trustees ratifies the election result. This is part of the board’s commitment to ensuring that its governance arrangements are effective and relevant, as well as ensuring that over time its diversity reflects the breadth of the services we provide and the communities in which we operate. When recruiting co-opted trustees, the nominations group is responsible for nominating new trustees to the board. During 2010 the British Red Cross recruited two new trustees, one elected and one co-opted, who will join the board at the start of 2011.
The board has an appointed finance and audit committee to oversee its financial transactions, including investments. This committee has been given specific responsibilities and makes relevant recommendations to the board. While the approval of policy is a matter for the board, that body works closely with the chief executive and his colleagues on the senior management team, which is charged with the implementation of policy. The senior management team, shown on the inside front cover, is representative of our organisational structure. A wholly-owned trading subsidiary, Britcross Limited, supports the fundraising activities of the British Red Cross. The assets, liabilities and trading results of this company, which is incorporated in the UK, are consolidated into the financial statements. As its activities are integral to the British Red Cross, the commentary on fundraising on page 14 also covers the activities of this subsidiary. The British Red Cross has eight Overseas Branches in British Overseas Territories and these have been included in these financial statements. The British Red Cross is a prominent member of the International Red Cross and Red Crescent Movement, with volunteers and staff contributing to a number of initiatives within both the International Federation of Red Cross and Red Crescent Societies (Federation) and the International Committee of the Red Cross (ICRC). Volunteers carry out a wide range of activities including responding to emergencies, first aid, delivering health and social care and humanitarian

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British Red Cross Trustees’ report and accounts 2010

The first thing I am going to do with this money is buy food so we can all eat. After that, I will try to send my children to school. I am very happy
Demitrus, after receiving a Red Cross cash grant in Haiti

education programmes, supporting refugees and asylum seekers, and fundraising. Without them, we could not carry out this life-saving and lifechanging work.

> The senior management team reviews key organisational risks at monthly meetings. > A strategic risk management group, including senior managers, reviews risks and processes to mitigate risk. > An operational risk management group, including managers with specific responsibilities for risks such as insurance and security, has been established to co-ordinate activities and approaches. > A risk and audit function delivers an internal audit programme. Action plans are developed with management to counter weaknesses. Recommendations are systematically followed up.
During the year, trustees and management articulated their risk appetite. Further work in this area is continuing. Key risks to the organisation are the impact of government policy, finances, reputation, security of beneficiaries, staff and volunteers,

Risk management Achievement of the charity’s objectives entails taking risks. Strategic and operational risks are identified and ranked in terms of impact and likelihood. The trustees are satisfied that appropriate systems are in place to manage the organisation’s exposure to risk. They consider the following framework provides the British Red Cross with adequate measures to reduce the effects of risk and sufficient resources to deal with adverse conditions: > The finance and audit committee reviews risk and controls and receives reports from management, the strategic risk management group, and audit reports. The committee approves the internal audit programme covering the major risks as identified by management and trustees.

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management information and the challenges of operating major relief programmes.

Trustees’ responsibilities The trustees prepare consolidated financial statements for each financial year. These give a true and fair view of the state of the British Red Cross and of the annual results. In preparing the financial statements, the trustees have: > selected suitable accounting policies and applied them consistently > made judgements and estimates that are reasonable and prudent > followed applicable accounting standards without any material departures > prepared the accounts on a going concern basis.
Financial statements are published on the organisation’s website (redcross. org.uk) in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The trustees’ responsibilities also extend to the ongoing integrity of the financial statements contained therein. Trustees participated in a range of development activities for their formal induction programme and ongoing development. From visits to British Red Cross Areas, services and events, to external conferences, the British Red Cross ensures that its board members are kept abreast of developments in the sector as well as given the opportunity to broaden their skills and experiences to assist them in discharging their duties effectively.

Our Future Trustee programme was launched in 2010 to nurture existing talent from within the volunteer base. Though the programme does not guarantee future trusteeship, it should equip volunteers with the skills and knowledge required of trustees.

Governance and standards In 2010, the British Red Cross undertook a self-assessment of governance against standards including the UK Corporate Governance Code and Good Governance Code. In all but one of the 350 areas covered, our performance exceeded 90 per cent. We have increased the focus on improving accountability and effectiveness, throughout the organisation as well as in our governance arrangements. Public benefit The board of trustees has given regard to the legislative and regulatory requirements for disclosing how its charitable objectives (as set out in our Royal Charter) have provided benefit to the public. The board of trustees has complied with the duty set out in Section 4 of the Charities Act 2006. This report outlines how our achievements during 2010 have benefited the public, either directly or indirectly.
On behalf of the trustees

James M. T. Cochrane Chairman of the board of trustees 10 March 2011

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British Red Cross Trustees’ report and accounts 2010

Independent auditors’ report to the trustees of the British Red Cross Society
We have audited the financial statements of the British Red Cross Society for the year ended 31 December 2010, which comprise the Consolidated Statement of Financial Activities, the Consolidated Balance Sheets, the Consolidated Cash Flow Statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the charity’s trustees, as a body, in accordance with the Charities Act 1993 and the Charities and Trustee Investment (Scotland) Act 2005. 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. statements and for being satisfied that they give a true and fair view. We have been appointed as auditor under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and under section 43 of the Charities Act 1993 and report in accordance with regulations made under those Acts. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/ scope/private.cfm Opinion on financial statements In our opinion the financial statements: > give a true and fair view of the state of the group’s and the parent charity’s affairs as at 31 December 2010 and of the group’s incoming resources and application of resources for the year then ended;

Respective responsibilities of trustees and auditor As explained more fully in the Trustees’ Responsibilities Statement (set out on page 18), the trustees are responsible for the preparation of the financial

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> have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and > have been prepared in accordance with the Charities Act 1993, the Charities and Trustee Investment (Scotland) Act 2005 and regulations 6 and 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended). Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Charities Act 1993 and the Charities Accounts (Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion: > the information given in the Trustees’ Annual Report is inconsistent in any material respect with the financial statements; or > proper and sufficient accounting records have not been kept; or > the parent charitable company’s financial statements are not in agreement with the accounting records or returns; or > we have not received all the information and explanations we require for our audit.
BDO LLP Statutory Auditor Epsom United Kingdom Date: 8 April 2011 BDO LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006. BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

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British Red Cross Trustees’ report and accounts 2010

Accounts for the year ended 31 December 2010

Summary of income and expenditure for the year ended 31 December 2010

Income £205.7m
1. Voluntary income
6 7 5

£119.9m £24.8m £9.3m £15.3m £25.1m £7.9m £3.4m

2. Trading activities 3. Emergency response and recovery

4 3 1

4. Resilence 5. Health and social care 6. Supporting and strengthening the Movement 7. Other income

2

Expenditure £199.2m
1. Fundraising
6 7 1 5

£40.3m £23.5m £46.8m £36.3m £41.4m £8.3m £2.6m

2. Trading activities 3. Emergency response and recovery
2

4. Resilence 5. Health and social care

4 3

6. Supporting and strengthening the Movement 7. Governance costs

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British Red Cross Trustees’ report and accounts 2010

Consolidated statement of financial activities for the year ended 31 December 2010

Notes Incoming resources Incoming resources from generated funds Voluntary income Trading activities Investment income Total incoming resources from generated funds Incoming resources from charitable activities Emergency response and recovery Resilience Health and social care Supporting the Movement Total incoming resources from charitable activities Other incoming resources Miscellaneous income Net gains on disposal of fixed assets Total incoming resources 2

Unrestricted £m

Restricted £m

2010 Total £m

Restated 2009 Total £m

86.6 24.8 0.2 111.6 2.7 14.0 24.9 0.3 41.9 1.1 1.7 156.3

33.3 – 0.4 33.7 6.6 1.3 0.2 7.6 15.7 – – 49.4

119.9 24.8 0.6 145.3 9.3 15.3 25.1 7.9 57.6 1.1 1.7 205.7

95.6 24.9 1.8 122.3 7.0 15.4 27.5 7.7 57.6 0.8 1.4 182.1

3

Resources expended Costs of generating funds Voluntary income Trading activities Total resources expended on generating funds Costs of charitable activities Emergency response and recovery Resilience Health and social care Supporting the Movement Total resources expended on charitable activities Governance costs Total resources expended 4 39.5 23.5 63.0 22.8 27.0 39.7 1.6 91.1 2.6 156.7 0.8 – 0.8 24.0 9.3 1.7 6.7 41.7 – 42.5 40.3 23.5 63.8 46.8 36.3 41.4 8.3 132.8 2.6 199.2 30.1 23.6 53.7 39.0 32.5 45.1 7.6 124.2 3.1 181.0

Net incoming / (outgoing) resources before transfers Transfers between funds Net incoming / (outgoing) resources before recognised gains and losses Losses on current asset investments Gains on fixed asset investments Actuarial gains / (losses) on defined benefit pension schemes Net movement in funds Total funds – 1 January Total funds – 31 December All the activities relate to continuing operations.

7

(0.4) – (0.4)

6.9 – 6.9 – – – 6.9 38.5 45.4

6.5 – 6.5 (0.2) 1.7 2.0 10.0 145.8 155.8

1.1 – 1.1 – 6.3 (1.6) 5.8 140.0 145.8

9 14

(0.2) 1.7 2.0 3.1

7 7

107.3 110.4

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Consolidated balance sheet for the year ended 31 December 2010

Notes Fixed assets Tangible assets Investments 8 9

2010 £m 63.8 58.0 121.8

2009 £m  67.9 37.8 105.7 2.9 27.5 21.1 11.7 63.2 (15.7) 47.5 153.2 (0.3) (5.5) 147.4 (1.6) 145.8

Current assets Stocks Debtors Investments Cash at bank and in hand

10 9  

3.3 29.0 11.2 10.4 53.9

Current liabilities Creditors: amounts falling due within one year Net current assets Total assets less current liabilities Creditors: amounts falling due after more than one year Provision for liabilities and charges Net assets before pension scheme surplus / (deficit) Defined benefit pension scheme surplus / (deficit) Net assets

11

(17.4) 36.5 158.3 (0.3) (3.3) 154.7

12

14  

1.1 155.8

Funds: Restricted funds Designated funds General fund tangible fixed assets Defined benefit pension scheme fund Free available reserves General funds Total funds 7 7 45.4 – 54.6 1.1 54.7 7   110.4 155.8 38.5 11.4 54.2 (1.6) 43.3 95.9 145.8

 

The British Red Cross has not prepared a separate balance sheet for the charity as this is not considered to be materially different to the consolidated balance sheet. For and on behalf of the British Red Cross,

James Cochrane Chairman, board of trustees 10 March 2011

Russell Walls Chairman, finance and audit committee 10 March 2011

24

British Red Cross Trustees’ report and accounts 2010

Consolidated cash flow statement for the year ended 31 December 2010

Notes Net cash inflow / (outflow) from operating activities (see below) Capital expenditure and financial investment 16

2010 £m 8.4 (19.4) (11.0)

2009 £m (7.0) 16.3 9.3

Decrease / (increase) in current asset investments (Decrease) / increase in cash  

17

9.7 (1.3)

(2.3) 7.0

Reconciliation of net incoming resources to net cash outflow from operating activities
Net incoming resources Depreciation charge Surplus on sale of tangible fixed assets Increase in stocks Increase in debtors Increase / (decrease) in creditors Decrease in provisions for liabilities and charges   Net charges for defined benefit pension scheme Net cash inflow / (outflow) from operating activities  

6.5 6.5 (1.7) (0.4) (1.5) 2.0 (2.2) (0.8) 8.4

1.1
6.8
(1.4)
(0.2)
(8.1)
(4.3)
(0.1)
(0.8)
(7.0)

Reconciliation of net funds to movement in short-term funds less borrowing (Decrease) / increase in cash in the period (Decrease) / increase in current asset investments  

(1.3) (9.7) (11.0)

7.0 2.3 9.3 0.1 9.4

Unrealised (losses) / gains on current asset investments

 

(0.2) (11.2)

Net short-term funds less borrowing at 1 January Net short term funds less borrowing at 31 December The accompanying notes form an integral part of these consolidated financial statements. 17

32.5 21.3

23.1 32.5

25

Notes to the consolidated financial statements for the year ended 31 December 2010

1. Accounting policies
(a) Scope and basis of the financial statements The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of investments at market value, and are in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice (Revised 2005) (‘the SORP’), applicable accounting standards in the United Kingdom and the reporting requirements of the Charities Act 1993. The results and balance sheet of the British Red Cross’ subsidiary, Britcross Limited, have been consolidated on a line by line basis. Britcross Limited makes up accounts to 31 December. Separate statements of financial activities and balance sheet have not been presented for the charity alone as these are not considered to be materially different from the consolidated statement of financial activities and consolidated balance sheet. The financial statements incorporate the results of all material activities overseas where the British Red Cross has operational responsibility. The results and net assets of Red Cross operations in eight British Overseas Branches have been included in the financial statements. (b) Fund accounting General unrestricted funds are available for use at the discretion of the trustees in furtherance of the general charitable objectives. A pension reserve is included within unrestricted funds to reflect the pension surplus. Designated funds are those unrestricted funds transferred from the general fund for particular purposes or projects at the discretion of trustees. The creation of designated funds is approved by the trustees before the year end to meet specific future plans. Amendments to estimates used in calculating the level of designated funds are made up to the date of approval of the accounts. Restricted funds are donated for either a particular area or purpose, the use of which is restricted to that area or purpose. Such donations are principally for international purposes. (c) Incoming resources All income is accounted for when the British Red Cross has entitlement to the funds, the amount can be quantified and there is certainty of receipt. Where income is received in advance of providing goods and/or services, it is deferred until the British Red Cross becomes entitled to that income. Unless there is evidence of uncertainty of receipt, residuary legacies are recognised from the date of probate where a reliable estimate can be made. Income from will or reversionary trusts is not recognised until the life interest has passed away. Income from pecuniary legacies is recognised upon notification. Disasters Emergency Committee (DEC) appeal income is

recognised to the extent that resources have been committed on programmes funded through the DEC appeals. Gifts donated for resale are included as income when they are sold. Donated assets and services are included at the value to the British Red Cross where this can be reliably quantified. Donated services from our volunteers are not included within the financial statements. (d) Resources expended and basis of allocation of cost All expenditure is accounted for on an accruals basis. Direct costs are those specifically related to producing the output of an activity, for example the costs incurred in direct contact with beneficiaries. Support costs are those which provide indirect support to front-line output provision – examples are central finance, human resources and management information systems. Support costs not attributable to a single activity have been allocated on a basis consistent with identified cost drivers for that cost category such as staff head count, floor space and expenditure. Governance costs relate to the direct running of the charity, allowing the charity to operate and generate the information required for public accountability. They include the costs of subscriptions related to membership of the International Red Cross and Red Crescent Movement, as well as the costs of trustee meetings and internal and external audits. (e) Tangible fixed assets and depreciation All tangible fixed assets costing more than £1,000 are capitalised and included at cost, including any incidental expenses of acquisition and irrecoverable VAT. Depreciation is provided on a straight-line basis over their useful economic lives as follows: Freehold properties Leasehold properties > Shop premises > Other premises Freehold premises improvements Leasehold premises improvements Ambulances Other vehicles Equipment and furniture Computer equipment and software Freehold land Assets in course of construction the shorter of the term of the lease and five years the shorter of the term of the lease and 50 years ten years the shorter of the term of the lease and ten years Seven years five years five years between one and three years Nil Nil 50 years

26

British Red Cross Trustees’ report and accounts 2010

Notes to the consolidated financial statements for the year ended 31 December 2010

(f) Pensions The defined benefit pension scheme current service costs, together with the scheme interest cost less the expected return on the scheme assets for the year, are charged to the relevant expenditure heading within the consolidated statement of financial activities in line with the salary costs of the related employees. The defined benefit scheme assets are measured at fair value at the balance sheet date. Scheme liabilities are measured on an actuarial basis at the balance sheet date using the projected unit method and discounted at a rate equivalent to the current rate of return on a high-quality corporate bond of equivalent term to the scheme liabilities. The change in value of assets and liabilities arising from asset valuation, changes in benefits, actuarial assumptions, or change in the level of deficit attributable to members is recognised in the consolidated statement of financial activities within actuarial gains/losses on defined benefit pension schemes. The resulting defined benefit asset or liability is presented separately on the face of the balance sheet. The British Red Cross recognises assets for its defined benefit pension schemes to the extent that it is considered recoverable with reference to expected future current service costs for active scheme members. Pension costs in respect of defined contribution schemes are charged to the consolidated statement of financial activities for the period in which they are payable. (g) Investments Investments are stated at market value at the balance sheet date and the consolidated statement of financial activities shows net investment gains and losses arising from revaluation of the investment portfolio and disposals during the year. (h) Stocks Stocks are stated at the lower of cost and net realisable value. Provision is made for obsolete, slow-moving or defective stock where appropriate. Items donated for resale and distribution are not included in the financial statements until they are sold or distributed. Emergency stocks held for disaster response are transferred from stock to resources expended when issued from the warehouse. (i) Value added tax Irrecoverable value added tax is allocated to the category of expenditure to which it relates. (j) Provisions Provisions are recognised when the British Red Cross has a legal or constructive financial obligation, that can be reliably estimated and for which there is an expectation that payment will be made. (k) Operating leases Rentals under operating leases are charged on a straight-line basis over the lease terms, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are, similarly, spread on a straight-line basis over the lease term, except where the period to the review date on which the rent is first expected to be adjusted to the prevailing market rate is shorter than the full lease term, in which case the shorter period is used. (l) Foreign currencies Transactions in foreign currencies are recorded at the rate of exchange prevailing at the date of the transaction. Monetary assets and liabilities are translated into sterling at the exchange rate ruling on the balance sheet date. The British Red Cross uses forward exchange contracts to hedge some of its known foreign exchange exposure. Foreign exchange gains or losses on forward contracts are recognised when the contracts are exercised. Foreign exchange gains are recognised as other income and foreign exchange losses are recognised in the consolidated statement of financial activities within the relevant charitable activity expenditure for the period in which they are incurred. (m) Prior year restatement The 2009 income and expenditure comparatives have been restated to reflect the classification of our activities in the corporate strategy 2010-15 Saving Lives, Changing Lives. This reclassification of income and expenditure does not affect total income or total expenditure.

27

Notes to the consolidated financial statements for the year ended 31 December 2010

2. Voluntary income
2010 Total £m 34.6 38.3 2.5 12.3 22.1 8.4 1.7 119.9 Restated Unrestricted £m 28.3 15.0 2.2 8.8 29.0 – – 83.3 Restated Restricted £m – 8.2 0.1 0.4 0.5 2.0 1.1 12.3  Restated 2009 Total £m 28.3 23.2 2.3 9.2 29.5 2.0 1.1 95.6

Unrestricted £m Regular giving Public donations, appeals and fundraising Service donations Gift aid Legacies Disasters Emergency Committee appeals Grants Total 34.6 17.6 2.4 10.5 21.5 – – 86.6

Restricted £m – 20.7 0.1 1.8 0.6 8.4 1.7 33.3

Legacy income is not recognised until the British Red Cross has entitlement to the funds, the amount can be quantified and there is certainty of receipt. The estimated value of legacies which have been notified but not recognised at 31 December 2010 was £9.2 million (2009: £10.5 million) of which £6.6 million (2009: £5.2 million) are assets bequeathed to the British Red Cross but subject to life tenancy. The charity v supports four of our projects to develop youth volunteering opportunities. Grant income accounted for in 2010 includes support from v of £86,000 (2009: £122,000). The total value of grants from v over the period of support is £524,000. Disasters Emergency Committee (DEC) appeal income is recognised to the extent that resources have been committed on programmes funded through the DEC appeals. Subject to our agreed allocation, the value of DEC appeal income not drawn down as at 31 December 2010 was £5.5 million (2009: nil).

3. Incoming resources from charitable activities
2010 Total £m 3.0 6.3 9.3 14.6 0.7 15.3 11.0 14.1 25.1 7.9 57.6 Restated 2009 Total £m   2.8 4.2 7.0  14.2 1.2 15.4 12.1 15.4 27.5 7.7 57.6

Grants £m Emergency response and recovery UK International 0.2 6.1 6.3 Resilience UK International   Health and social care Medical equipment services Care and support programmes   Supporting the Movement Total       0.6 0.5 1.1 0.3 3.3 3.6 6.2 17.2

Other £m 2.8 0.2 3.0 14.0 0.2 14.2 10.7 10.8 21.5 1.7 40.4

‘Supporting the Red Cross Movement’ grant income is mainly from the Department for International Development (DFID). £1.1 million (2009: £0.9 million) was received as part of our Strategic Framework agreement, which provides core funding for our international work to strengthen further the effectiveness of the Red Cross Movement as a key pillar of the international humanitarian system. £5.1 million (2009: £5.1 million) was received as part of our Institutional Strategy agreement with the International Federation of Red Cross and Red Crescent Societies (IFRC), which provides funding for their programmes and operations.

28

British Red Cross Trustees’ report and accounts 2010

Notes to the consolidated financial statements for the year ended 31 December 2010

4. Resources expended
Direct costs £m Costs of generating funds Voluntary income Trading activities 39.3 22.7 62.0 Charitable activities Emergency response and recovery UK International   Resilience UK International 19.5 25.4 44.9 23.2 10.9 34.1 Health and social care Medical equipment services Care and support programme 15.2 22.5 37.7 Supporting the Movement   Governance costs Subscription to Federation Staff Audit fees – accounts Fees to auditors for other services Other 8.2 124.9 1.6 0.6 0.1 – 0.2 2.5 Total 189.4 1.2 0.7 1.9 2.0 0.2 2.2 1.0  2.7 3.7 0.1 7.9 – – – – 0.1 0.1 9.8 20.7 26.1 46.8 25.2 11.1 36.3 16.2 25.2 41.4 8.3 132.8 1.6 0.6 0.1 – 0.3 2.6 199.2 18.4 20.6 39.0 24.6 7.9 32.5 17.8 27.3  45.1 7.6 124.2 1.6 1.0 0.1 – 0.4 3.1 181.0  Support costs £m 1.0 0.8 1.8 2010 Total £m 40.3 23.5 63.8 Restated 2009 Total £m 30.1 23.6 53.7

The basis of allocation of support costs is described in note 1(d) and further analysis is provided in Note 5.
Our total resources expended includes irrecoverable VAT of £2.1 million (2009: £1.8 million).
Included under the 2010 direct costs are grants to the International Federation of Red Cross and Red Crescent Societies (IFRC) and International
Committee of the Red Cross (ICRC) of £19.5 million (2009: £6.6 million) and grants to other National Societies of £6.6 million (£2.1 million).

29

Notes to the consolidated financial statements for the year ended 31 December 2010

5. Support costs by activity
Generating funds Emergency response and recovery Health and Supporting social care the Movement

£m 0.8 0.6 0.3 0.1 1.8

£m 0.6 0.6 0.6 0.1 1.9

Resilience

£m 0.5 0.8 0.8 0.1 2.2

£m 0.5 1.5 1.6 0.1 3.7

£m – 0.1 – – 0.1

Governance

£m – – 0.1 – 0.1

2010 Total £m 2.4 3.6 3.4 0.4 9.8

Restated 2009 Total £m 2.6 3.5 3.7 0.3 10.1

Finance Human resources and central facilities Management information systems Central management Total

Support costs have been allocated on the basis of the accounting policy set out in note 1 (d).

6. Trading subsidiary
Britcross Limited, the British Red Cross’ wholly owned trading subsidiary incorporated in the United Kingdom, engages in the sale of cards and gifts as well as corporate sponsorship in aid of the British Red Cross. The turnover and expenditure included within trading activities are:

2010 £m Turnover Expenditure Net income donated to British Red Cross           1.4 (0.9) 0.5

2009 £m 1.3 (0.8) 0.5 

The assets and liabilities of Britcross Limited consolidated within the balance sheet are: 2010 £m Current assets Current liabilities Net assets             0.7 (0.7) – 2009 £m 0.4 (0.4) –

30

British Red Cross Trustees’ report and accounts 2010

Notes to the consolidated financial statements for the year ended 31 December 2010

7. Funds
Balance 1 January 2010 Net investment gains Actuarial gains on defined benefit pension Balance 31 December 2010

£m

Income

£m

Expenditure

£m

£m 1.5 – 1.5

£m 2.0 – 2.0

Transfers

£m

£m

General funds Designated funds Total unrestricted funds

95.9 11.4 107.3

156.3 – 156.3

(152.9) (3.8) (156.7)

7.6 (7.6) –

110.4 – 110.4

Total United Kingdom restricted funds Haiti earthquake Pakistan floods Other international restricted funds Total international restricted funds Disaster Fund Total restricted funds Total funds

21.0 – – 13.5 13.5 4.0 38.5 145.8

 3.9  17.5 12.0 15.5 45.0 0.5 49.4 205.7

(7.5) (8.5) (9.1) (15.3) (32.9)  (2.1) (42.5) (199.2)

– – – – –  – – 1.5

– – – – – – – 2.0

(0.3) – – (3.3) (3.3) 3.6 – –

17.1 9.0 2.9 10.4 22.3 6.0 45.4 155.8

Designated funds Designated funds relate to transformational projects that the British Red Cross developed to ensure delivery of its UK, international and information systems strategies. These projects began in 2006 and were largely completed by 31 December 2010. Therefore, all designated assets and reserves balances at year end were transferred to general funds.

Restricted funds a) UK restricted funds include: > £9.2 million of properties and other assets held for restricted purposes > a variety of local, national and European funding sources to deliver projects over the next two to three years > funds raised through our partnership with Tesco which are being used to deliver a wide range of community-based services > legacies with a geographical and/or service restriction. The balance of funds is held for the provision of locally agreed services. Expenditure plans have been agreed for all material restricted funds. b) Significant programmes of work are planned for the disbursement of international restricted fund balances as at 31 December 2010. Other international restricted funds include £1.3 million for an HIV programme in South Africa. c) The Disaster Fund allows us to prepare for and respond to humanitarian disasters abroad and in the UK. We fundraise specifically for the Disaster Fund and – as stated on emergency appeal materials – it can also contain funds donated to emergency appeals where we raise more than can be reasonably and efficiently spent on that specific response. The transfer from international restricted funds includes £2.8 million from our Maldives fund to our Disaster Fund.

31

Notes to the consolidated financial statements for the year ended 31 December 2010

8. Tangible assets
Freehold property Leasehold property Vehicles, equipment and furniture Assets in the course of construction

Cost At 1 January 2010 Completions Additions Disposals At 31 December 2010

£m

£m

£m

£m

Total £m 121.3 – 3.9 (3.3) 121.9

46.2 1.6 0.6 (2.5) 45.9

34.0 0.1 0.3 (0.2) 34.2

38.7 0.1 3.0 (0.6) 41.2

2.4 (1.8) – – 0.6

Accumulated depreciation At 1 January 2010 Charge for year Disposals At 31 December 2010  13.3 1.0 (1.2) 13.1 10.3 1.4 (0.1) 11.6 29.8 4.1 (0.5) 33.4 – – – – 53.4 6.5 (1.8) 58.1

Net book value At 31 December 2010 At 31 December 2009 32.8 32.9 22.6 23.7 7.8 8.9 0.6 2.4 63.8 67.9

32

British Red Cross Trustees’ report and accounts 2010

Notes to the consolidated financial statements for the year ended 31 December 2010

9. Investments
Fixed assets investments Market value – 1 January 2009 Additions at cost Disposals at market value Net investment gains in the year Market value – 31 December 2010 Cost – 31 December 2010            

Total £m 37.8 44.8 (26.3) 1.7 58.0 54.2

The portfolio consists of the following: UK equities Overseas equities UK fixed income Cash  

Market value 2010
 £m

Per cent of 2010 portfolio

Market value 2009

£m

Per cent of 2009 portfolio

8.6 6.3 43.1 – 58.0

15 11 74 – 100

17.7 5.6 12.8 1.7 37.8

47 15 34 4 100

The following investments represented more than five per cent of the value of the portfolio at 31 December 2010 Lazard Thematic Global Institutional Share Class Legal & General CAF UK Equitrack Black Rock Ultra short Bond Fund

 

Number of units

Market value

£m

Per cent of portfolio

66,313 12,988,700 348,049

6.3 8.1 43.1

11% 14% 74%

Current asset investment Royal Bank of Scotland Global Treasury Funds PLC Black Rock – Institutional Sterling Liquidity Fund CCLA – COIF Charities Deposit Fund  

 

2010 £m 4.1 1.0 –

2009 £m 2.5 5.0 2.5 10.0

 

 

5.1

Deposits Investment property in the UK Total    

5.4 0.7 11.2

9.9 1.2 21.1

33

Notes to the consolidated financial statements for the year ended 31 December 2010 10. Debtors
  Trade debtors Accrued income Other debtors Prepayments Investment income receivable Tax recoverable Legacies receivable     2010 £m 6.5 4.6 0.4 3.3 0.1 4.0 10.1 29.0 2009 £m 5.5 3.7 0.7 3.2 0.2 4.5 9.7 27.5

11. Creditors: amounts falling due within one year
  Trade creditors Accruals Deferred income Taxes and social security costs           2010 £m 3.1 11.0 2.0 1.3 17.4 2009 £m 3.8 7.8 2.6 1.5 15.7

Movements in deferred income during the year were as follows: At 1 January Income recognised during the year Income deferred during the year At 31 December  

 

2010 £m 2.6 (2.6) 2.0 2.0

2009 £m 2.5 (2.5) 2.6 2.6

12. Provisions for liabilities and charges
Rehabilitation commitments Leasehold dilapidations Others

  At 1 January 2010 Payments during the year Amounts released during the year Increase in provision At 31 December 2010 Amounts expected to be incurred: – within one year – beyond one year  

 

£m

£m

£m

Total  £m  5.5 (2.0) (3.0) 2.8 3.3 2.2 1.1 3.3

3.5 (0.5) (3.0) 1.2 1.2 1.2 – 1.2

1.5 (1.0) –  1.6 2.1 1.0 1.1  2.1

0.5 (0.5) –  – – – –  –

The provision for rehabilitation commitments as at 31 December 2010 includes amounts committed in Haiti and Bangladesh for livelihood grants and construction. Leasehold dilapidations relate to properties where the British Red Cross has a legal responsibility as tenant for such costs.

34

British Red Cross Trustees’ report and accounts 2010

Notes to the consolidated financial statements for the year ended 31 December 2010

13. Staff emoluments and trustee expenses
Total staff emoluments (including casual staff) for the year were as follows:    Salary costs National insurance costs Pensions costs        2010 £m 63.0 5.4 1.2 69.6 2009  £m 62.8 5.3 1.3 69.4

The number of employees whose emoluments, as defined for taxation purposes (basic pay, vehicle and medical insurance benefits), amounted to over £60,000 in the year were as follows: £60,001 – £70,000 £70,001 – £80,000 £80,001 – £90,000 £90,001 – £100,000 £100,001 – £110,000 £110,001 – £120,000 £170,001 – £180,000 2010 8 6 5 2 1 1 1 2009 9 2 8 1 1 0  1

Five (2009: six) of the above employees have retirement benefits accruing to them under defined benefit pension schemes. The total cost of the contributions to these defined benefit schemes made by the British Red Cross for these employees was £94,000 (2009: £76,000). Fourteen (2009: 13) of the above employees are members of a defined contribution scheme. The total cost of the contributions to this scheme made by the British Red Cross for these employees was £61,000 (2009: £76,000).

The average number of full-time equivalent staff employed by the British Red Cross during the year was as follows:  In the UK Fundraising Retail UK services First aid services International services Other Overseas International services Total employed by FTE Total employed by headcount

2010 147 544 1,417 379 66 249 54 2,856 3,364

2009 147 570 1,418 357 65 257 56 2,870 3,398

 

The average number of volunteers working for the British Red Cross during year was as follows: In the UK Fundraising Retail UK services First aid services International services Other Total 3,758 6,020 12,380 8,315 409 2 30,884 2010 £000 12 16 15   Number of trustees receiving expenses
None of the trustees received any remuneration during the year (2009: nil).

 

3,774 5,299 10,906 7,897 328 4  28,208 2009  £000 13 23 15  2009 15

Trustees’ expenses:  

 

  

Expenses incurred by trustees and reimbursed by the British Red Cross Expenses incurred by the British Red Cross on behalf of trustees Trustees’ indemnity insurance cover cost  

2010 15

35

Notes to the consolidated financial statements for the year ended 31 December 2010 14. Pensions
New British Red Cross staff are entitled to join either the Pensions Trust’s Unitised Ethical Plan or the Pensions Trust’s Flexible Retirement Plan. Staff had previously been entitled to join the British Red Cross Pension Fund (“UK Office Scheme”), Scottish Branch British Red Cross Society Retirement Benefits Scheme (“Scottish Scheme”) or the Pensions Trust’s Growth Plan. These three schemes are all closed to new entrants.

UK Office and Scottish defined benefit pension schemes The assets of these pension schemes are held in separate trustee-administered funds. The schemes are subject to triennial valuations with the last full valuation being carried out as at 31 December 2007 for the UK Office scheme and 1 January 2009 for the Scottish scheme. These valuations were updated at 31 December 2009 and 2010 by independent actuaries on a Financial Reporting Standard 17 – Retirement Benefits (FRS 17) basis. The amounts charged to statement of financial activities are: Current service cost: Interest cost on scheme liabilities Expected return on assets in the scheme Net finance charge / (credit) Actual return less expected return on pension assets Experience gains on liabilities Actuarial gain arising from government changes to
statutory pension increases Other changes in assumption underlying the present
value of scheme liabilities Total actuarial gain / (loss) Less movement in restriction of surplus Net actuarial gain / (loss) recognised UK Office scheme £m 0.2 1.1 (1.3) (0.2) 1.1 – 1.1 (1.1) 1.1 – 1.1 Scottish scheme £m 0.1 0.4 (0.4) – 0.2 0.7 0.5 (0.5) 0.9 – 0.9 2010 Total £m 0.3 1.5 (1.7) (0.2) 1.3 0.7 1.6 (1.6) 2.0 – 2.0 2009 Total £m 0.3 1.3 (1.3) – 1.6


(4.6)
(3.0) 1.4 (1.6)

The current service cost will increase as the members of the schemes approach retirement because the schemes are closed to new members. As the scheme rules link increases in British Red Cross pensions to statutory revaluation orders, the assumptions underlying the FRS17 calculation are now linked to Consumer Price Inflation (CPI). This change in assumption has resulted in a credit of £1.6 million which has been recognised within the actuarial gain in the Statement of Financial Activities.

36

British Red Cross Trustees’ report and accounts 2010

Notes to the consolidated financial statements for the year ended 31 December 2010 14. Pensions (cont.)

The amounts recognised in the balance sheet are: Fair value of plan assets Present value of scheme obligations Restriction of scheme surplus Net surplus/(deficit)

UK Office scheme £m 23 (19.8) (1.5) 1.7

Scottish scheme £m 5.8 (6.4) – (0.6)

2010 Total £m 28.8 (26.2) (1.5) 1.1

2009 Total £m 25.7 (25.8) (1.5) (1.6)

The British Red Cross has recognised the UK Office scheme surplus to the extent that it is considered recoverable through the future service costs of the remaining members. Changes in present value of scheme obligation during the year: At 1 January Service cost Interest cost Member contributions Benefits paid Actuarial loss/(gain) due to government changes to statutory pension increases Actuarial loss/(gain) due to changes in assumptions Actuarial loss/(gain) due to experience At 31 December UK Office scheme 2010 2009 £m £m 19.1 0.2 1.2 0.1 (0.8) (1.1) 1.1 – 19.8 15.5 0.2 1.0 0.1 (0.8) – 3.1 – 19.1 Scottish scheme 2010 2009 £m £m 6.7 0.1 0.4 – (0.1) (0.5) 0.5 (0.7) 6.4 4.8 0.1 0.3 0.1 (0.1) – 1.5 – 6.7

Change in value plan assets during the year: At 1 January Expected return Employer contributions Member contributions Benefits paid Actuarial (gain)/loss on plan assets At 31 December

UK Office scheme 2010 2009 £m £m 20.6 1.3 0.7 0.1 (0.8) 1.1 23.0 18.4 1.0 0.7 0.1 (0.8) 1.2 20.6

Scottish scheme 2010 2009 £m £m 5.1 0.4 0.2 (0.1) 0.2 5.8 4.2 0.3 0.2 0.1 (0.1) 0.4 5.1

The British Red Cross expects to make employer contributions in 2011 of £745,000 for the UK Office scheme and £539,000 for the Scottish scheme. The major categories of plan assets as percentage of total plan assets are: Equities Bonds Cash Per cent of UK Office scheme 2010 2009 52 47 1 100 51 49 – 100 Per cent of Scottish scheme 2010 2009 68 31 1 100 68 32 – 100

37

Notes to the consolidated financial statements for the year ended 31 December 2010 14. Pensions (cont.)
Principal actuarial assumptions at the balance sheet date were: Discount rate Retail price inflation Consumer price inflation Salary increases Pension increases – Pre-2005 increases (5%) – Post-2005 increases (2.5%) Expected return on equities Expected return on bonds Expected return on cash 2010 % pa 5.4 3.8 3.1 4.8 3.1 2.4 7.7 4.2 0.8 2009 % pa 5.8 3.8 – 4.8 3.7 2.5 8.0 4.5 0.5

Mortality assumptions adopted at the year end imply the following life expectancy at 65: Pensioners: male Pensioners: female Non-pensioners: male Non-pensioners: female

Years 21.6 24.0 23.5 25.9

Years 21.5 23.9 23.4 25.8

UK Office scheme History for current and previous periods: Present value of scheme obligations Fair value of plan assets Surplus Restriction of surplus Reported surplus Experience gains/(losses) – on liabilities – on assets 2010 £m (19.8) 23.0 3.2 (1.5) 1.7 – 1.1 2009 £m (19.1) 20.6 1.5 (1.5) – – 1.2 2008 £m (15.5) 18.3 2.8 (2.8) – (0.5) (3.7) 2007 £m (19.1) 21.1 2 (2.0) – (0.1) 0.1 2006 £m (19.7) 20.2 0.5 – 0.5 0.1 0.6

Scottish scheme History for current and previous periods: Present value of scheme obligations Fair value of plan assets Deficit Experience gains/(losses) – on liabilities – on assets 2010 £m (6.4) 5.8 (0.6) 0.7 0.2 2009 £m (6.7) 5.1 (1.6) – 0.4 2008 £m (4.8) 4.2 (0.6) – (1.1) 2007 £m (5.5) 4.7 (0.8) 0.2 (0.3) 2006 £m (5.4) 4.4 (1.0) (0.1) 0.1

38

British Red Cross Trustees’ report and accounts 2010

Notes to the consolidated financial statements for the year ended 31 December 2010 14. Pensions (cont.)
Other schemes The British Red Cross also contributes to the Pensions Trust schemes and other contribution schemes for certain employees. In 2010 the total cost of these contributions was £909,000 (2009 £926,000). The Pensions Trust schemes which are offered to all staff are the Unitised Ethical Plan or the Flexible Retirement Plan. Both of these schemes are defined contribution schemes. Staff were able to join the Pensions Trust’s Growth Plan until April 2007. The Pensions Trust’s Growth Plan is a multi-employer defined benefit pension plan. The assets of the scheme are co-mingled for investment purposes and as a result it is not possible to break down scheme assets by participating employer and it is not possible to analyse the on going funding deficit by individual employer. Accordingly, due to the nature of the plan, the accounting charge for the year under FRS 17 represents only the employer contribution payable. There is a contingent liability in the event that the British Red Cross were to withdraw its membership of the Pensions Trust’s Growth Plan. The Pensions Trust’s Growth Plan’s actuaries valued the withdrawal liability at £4.6 million as at 30 September 2009. This valuation has been rolled forward, assuming actuarial assumptions and membership are consistent, to 31 December 2010, resulting in an estimated £4.3 million contingent liability (2009: £4.6 million). The British Red Cross and the Order of St John are jointly liable for the pension liabilities of the Joint Committee of the Order of St John of Jerusalem and British Red Cross Society (‘Joint Committee’). The Joint Committee is a separate charity (charity number 225753) for the purposes of charity regulation. The Pensions Trust’s Growth Plan’s actuaries valued the withdrawal liability at £2 million as at 30 September 2009. This valuation has been rolled forward, assuming actuarial assumptions and membership are consistent, to 31 December 2010 resulting in an estimated £1.9 million contingent liability (2009: £2 million). The Joint Committee holds assets of £1.1 million which are held solely for settling the pension liability. The British Red Cross also contributes to the NHS Pension Agency’s defined benefit pension scheme for seven (2009: seven) permanent employees and certain approved nursing and medical staff employed on a short-term contract basis. It is not possible to identify the British Red Cross’ underlying share of the assets and liabilities. Contributions to the scheme for the year ended 31 December 2010 were £25,000 (2009 £27,000).

15. Obligations under operating leases
Property £m The amount payable within the next twelve months on leases expiring : Within one year In two to five years After five years     Other £m 2010 Total  £m 2009 Total  £m  

1.4 1.8 2.8  6.0

0.3 0.9 –  1.2

1.7 2.7 2.8  7.2

1.8 3.1 2.5 7.4

16. Gross cash flows
Capital expenditure and financial investment Sales of fixed asset investments Purchase of fixed asset investments Sale of tangible fixed assets Purchase of tangible fixed assets Net cash inflow / (outflow)            2010 £m 26.3 (44.8) 3.2 (4.1) (19.4) 2009  £m 31.8 (10.0) 1.9 (7.4) 16.3

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Notes to the consolidated financial statements for the year ended 31 December 2010

17. Analysis of changes in net short–term funds less borrowing
At 1 January 2010 Investment losses At 31 December 2010

  Cash at bank and in hand Loan due after one year Current asset investments Total

£m

Cash flow

£m

£m

£m

11.7 (0.3) 21.1 32.5

(1.3) – (9.7) (11.0)

– – (0.2) (0.2)

10.4 (0.3) 11.2 21.3

18. Related parties
The partner of one of the trustees, Mr Christopher Hedges, was an employee of the British Red Cross during this period, with remuneration of £22,585 (2009: £22,143). Mr Hedges’ partner was an employee prior to Mr Hedges’ election as trustee. Mr Stanley Fitches is a trustee and a pensioner member of the society’s closed defined benefit pension scheme, and received payments in the year of £31,824 (2009: £31,754).

19. Capital commitments
2010 £m Capital commitments 1.8 2009 £m  0.3

20. Contingent liabilities
The British Red Cross has pledged support to a Sichuan (China) earthquake programme led by the International Federation of Red Cross and Red Crescent Societies, and a South African Red Cross-led HIV programme in South Africa. Full payment of the pledges is contingent on the outcome of British Red Cross reviews of the programmes. The outstanding balance on the pledges is £0.7 million for the Sichuan (China) earthquake programme (2009: £1.1 million), and £0.9 million for the HIV programme in South Africa (2009: £1.5 million).

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British Red Cross Trustees’ report and accounts 2010

Notes to the consolidated financial statements for the year ended 31 December 2010

21. Analysis of net assets between funds
Unrestricted £m  Tangible fixed assets Fixed asset investments Net current assets Creditors: amounts falling due in more than one year Provisions for liabilities and charges Defined benefit pension scheme deficit Net assets 54.6 19.5 38.0 – (2.8) 1.1 110.4  Restricted £m  9.2 38.5 (1.5) (0.3) (0.5) – 45.4  2010 Total £m 63.8 58.0 36.5 (0.3) (3.3) 1.1 155.8 2009 Total £m  67.9 37.8 47.5 (0.3) (5.5) (1.6)  145.8

22. Big Lottery Fund and Awards for All

During the year the Big Lottery Fund and Awards for All provided grants for the following projects:
Balance 1 January 2010 Balance 31 December 2010

Purpose of grant Refugee orientation – Bradford Refugee orientation – Portsmouth Refugee orientation – Manchester (Reaching communities) Dawn patrol – Merseyside Dawn patrol – Wigan Young carers ‘have a say’ in Shropshire Leicester Refugee Service Notts/Derby Refugee Service Awards for All – WSN First Aid Partnership Project Total
Balances as at 31 December 2010 are included within our restricted funds.

£000 18 25 5 11 25 14 – – – 98

Income

£000 25 99 78 38 45 55 27 65 10  442

Expenditure

£000 (23) (96) (84) (33) (45) (54) (13) (38) (10) (396)

£000  20 28 (1) 16 25 15 14 27 – 144

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Thank you

The British Red Cross would like to thank every individual and organisation who supported our work in 2010. They responded with great compassion and speed at times of emergency as well as maintaining our ongoing work in the UK and overseas. We would particularly like to thank all those who support us regularly, enabling us to plan ahead with confidence. We remember with gratitude the generosity of donors who left gifts to us in their wills. We would also like to thank all our local fundraising committees and volunteers for their hard work.

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British Red Cross Trustees’ report and accounts 2010

We would like to give special thanks to:
Sir Arnold Elton CBE and the International Medical and Scientific Committee for their support of our health projects across the world. The European Commission for generously supporting our work to raise awareness of development and migration issues in the UK and across Europe. Soroptimist International Wales South Health Education and Hygiene Trust for their ongoing support of our community-based health programme in Sierra Leone. The Wellington Hospital and The Wellington Appeal Committee for their support of orphans and vulnerable children in South Africa. Allen & Overy LLP AstraZeneca Barclays Bliss Family Charity The Bradbury Foundation Brit Insurance BT Canon Europe and Canon UK The Freemasons’ Grand Charity GlaxoSmithKline Guernsey Overseas Aid Commission Jersey Overseas Aid Commission John Lewis Partnership John Nike OBE DL The Kwok Charitable Trust Land Rover The Scottish Government Tesco v The National Young Volunteers Service The Vodafone Foundation

Thanks also to:
AVIVA Europe Balmain Charitable Trust The Bernard Lewis Family Charitable Trust Bloomberg Bombardier Dr E Boyd and Miss JA Boyd Bupa The Cargill Trust Mrs Henrietta Cayzer City of London Corporation The Constance Travis Charitable Trust Mr Terry Cross of Delta Print and Packaging Deloitte The Dowager Countess Eleanor Peel Trust Miss Evelyn M Murdoch Charitable Trust The Herbert and Peter Blagrave Charitable Trust The Herd Lawson and Muriel Lawson Charitable Trust Nathan Holland and family Isle of Man Overseas Aid Committee J L Seddon Trust JMP Wilcox LifeScan Scotland Mr John Maclean Amanda Nicholson, President of Buckinghamshire Nomura Pfizer and Pfizer Foundation The Redfern Charitable Trust The Rt. Hon Earl of Portsmouth Scouloudi Foundation The Sir James Reckitt Charity The Tula Trust Mr Boyd Tunnock OBE Wales Council for Voluntary Action WH & A Hawkins Charitable Trust

Thanks also to members of the following committees:
Mr Andrew Baudains and the Jersey Fundraising Committee Mrs June Clague and the Isle of Man Committee East Herts Ladies Fundraising Committee Mrs Flora Walker and the Lothian Ball Committee Maria Shammas MBE and the International Fundraising Committee

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Photos top to bottom: Front cover: © Valérie Batselaere/IFRC, Page 2-3 © Amanda George/BRC, Page 6-7 © Talia Frenkel/American Red Cross, © Valérie Batselaere/IFRC, © Valérie Batselaere /IFRC, Page 8-9 © Derek Gordon/BRC, © Derek Gordon/BRC, © Daniel Rojas/ICRC, Page 10 -11 © Sarah Oughton/BRC, © Lloyd Sturdy/BRC, © BRC, Page 12-13 © Layton Thompson/ BRC, © Derek Gordon/BRC, © Tim George/UNP, Page 15 © John Millard/BRC, Page 17 © Amanda George/BRC, Page 21 © James Hensby/BRC, Page 45 © Derek Gordon/BRC

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British Red Cross Trustees’ report and accounts 2010

British Red Cross 44 Moorfields London EC2Y 9AL Tel: 0844 871 1111 Fax: 020 7562 2000 redcross.org.uk Ref No: PEP1069 Published in April 2011
The British Red Cross Society, incorporated by Royal Charter 1908, is a charity registered in England and Wales (220949) and Scotland (SC037738) Printed on a mixture of FSC accredited paper from well managed and sustainable forests and 100 percent recycled FSC accredited papers.

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