The trustees are pleased to present their report together with the financial statements of the charity for the year ended 31st December 2008.

Reference and administrative details

Charity number: 209629

Principal office: 14 Stephenson Way, London NW1 2HD

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Trustees

All Members of Council of the Royal Asiatic Society are its trustees for the purposes of charity law and throughout this report are collectively referred to as the trustees. In some cases Members of Council serve as Honorary Officers.

Members of Council serving as Honorary Officers during the year ended 31{st} December 2008 were as follows:

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Other Members of Council not serving as Honorary Officers during the year ended 31{st} December 2008:

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Structure, Governance and Management

Governing Document

The Royal Asiatic Society was established in 1823 for the investigation and encouragement of science, literature and the arts in relation to Asia. It was granted a Royal Charter in 1824. The Society is a charity registered with the Charity Commission (registration number 209629).

Appointment of Trustees

The Society is governed by a Council. Members of the Council are treated as trustees for the purposes of the Charities Acts. Council is elected from among the Members (or Fellows) of the Society. Elections are governed by the provisions of Chapter IV of The Byelaws of the Society with vacancies being filled by vote upon nominations placed in May each year before the Members of the Society at the Anniversary General Meeting. Honorary Officers are similarly elected from within the Members of the Council. No one shall be elected to the Council who has not been a Member of the Society for at least one year. An Ordinary Member of Council is elected for a term of four years and is eligible for re-election after a lapse of one year. Honorary Officers normally serve for three years.

Trustee induction and training

New trustees are briefed by the President on their duties and on their legal obligations under charity law, the content of the Constitution and Byelaws of the Society, the Council and its decision-making processes and the recent financial performance of the charity. Before their first Council Meeting they meet employees and other trustees.

Organisation

Council Members administer the charity. The Council can have up to ten Honorary Officers (a President, a Director, four Vice-Presidents, an Honorary Secretary, an Honorary Treasurer, an Honorary Librarian, and an Honorary Editor) and up to fifteen Ordinary Members. The Council meets normally five times each year, between October and June inclusive. The Council is responsible for taking all significant decisions relating to the Society's affairs. The Society is managed by certain Members of Council, appointed as Honorary Officers, and acting through the Curator who is responsible for the day to day management of the Society, with the assistance of a number of other remunerated employees. The management of the Society is monitored through separate sub-committees for Finance, Investments, Fundraising, Library, Events and House, Publications and a separate Editorial Board, which meet regularly according to defined schedules at meetings chaired by the President (or an Honorary Officer), against an annual budget approved by the Council. The transactions of the sub-committee meetings are submitted to Council meetings for such approvals as may be appropriate.

Related parties

The charity is an independent body in the sense of being self-standing and administering, although it aims to foster collaborative arrangements with other organisations with similar or overlapping interests and aims.

Risk Management

The trustees regularly monitor and assess ongoing risks through the appropriate sub-committees responsible for areas in which risks, in whatever form, might arise. Wherever considered necessary, those risks are managed or mitigated through a combination of changed or updated procedures and with the purchase of insurance products, where appropriate.

Objectives and Activities

The objects of the charity are to investigate and encourage science, literature and the arts in relation to Asia. The Society promotes a number of activities in this field, including programmes of lectures, research workshops and student events. It also publishes works of scholarship and a journal of high international standing. The Society maintains an important library including prints, drawings and manuscripts relating to the history, religions, languages, art and customs of Asia.

Achievements and Performance

The lecture programme and the student series have continued to be successful attracting large and varied audiences. Other events have included several book launches and a joint student event with the Royal Society for Asian Affairs held in November 2008. Students who were the recipients of prizes from both societies delivered talks on a variety of topics; Dr Alasdair Pinkerton, finalist in the first RAS Staunton Prize lectured on ‘Radio and the Raj: Broadcasting in British India’. In May, the Society in conjunction with Christie's held an exhibition entitled In Good Company, the Royal Asiatic Society and India of paintings and drawings from its collections. A Kazakh Study Day was also held in October in partnership with the British Museum, the British Kazakh Society and the Central Asian Forum, Cambridge University. Several Kazakh archaeologists, anthropologists and art historians gave papers along with British colleagues. The opportunity of the Kazakh visit was used to set up links between Kazakh and British academic institutions with a round table discussion being held at the Society's premises and a further meeting with the University of Cambridge. Groups of students from the Courtauld Institute of Art, the Victoria and Albert Museum and the School of Oriental and African Studies attended the Society for study visits viewing items from the collection.

The library abandoned the daily charge for non-fellows in September, after a trial period, as this was not felt to be of any real benefit to the Society. The library catalogue is now partially on–line and the Society is busy with grant applications for funds to employ cataloguers in order to accelerate the progress that has been made so far. We have continued to benefit from assistance with cataloguing and conservation given by our volunteers – notably, Roger Parsons, Sahar Bayad, Charlotte Haydon, Anna Lisa Recklies, Calvin Cheng and Sophie Austin. The Society is also extremely grateful to A.H. Morton who is cataloguing the Persian manuscripts and to the team from the National Association of Decorative and Fine Arts Societies who do minor repairs and help conserve the book collection.

In 2008 the Society published two books; the second volume in the Ibrahim Pasha Fund Series, An Ottoman Protocol Register containing ceremonies from 1736 to 1808:BEO Sadaret Defterleri 350 in the Prime Ministry Archives, Istanbul by Hakan T. Karateke which is the first volume of the series in collaboration with the Ottoman Bank Archive and Research Centre, Istanbul. The second publication of 2008 was entitled The Development of Medicine in Non-Western Countries by Hormoz Ebrahimnejad.

The journal continued to produce four volumes a year and the Staunton Prize was awarded to Dr Nile Green for his article entitled ‘Jack Sepoy and the Dervishes: Islam and the Indian Soldier in Princely India’. In addition, arrangements were made with Cambridge University Press for the digitisation of all back issues of the journal so they will soon be made available on-line; a facility which will be made available to all Fellows.

The Society has initiated a major fund-raising campaign which it intends to launch formally in due course. It produced a fund-raising brochure in April which has been distributed to all members. It has also submitted several applications for the cataloguing, conservation and digitisation of its collections.

Financial Review

The financial results for 2008 show a contrast between, on the one hand, the progress achieved in developing the Society's various income-streams and moving closer towards financial equilibrium from ongoing activities and, on the other, the damaging effects on the market value of the Society's portfolio of investment assets caused by the major downturn in international capital markets during the year.

The Society's various sources of income registered increases, with the exception of investment and interest income, as the Society continued to develop its profile, activities and performance. In particular, the results show the positive overall impact of rental income for almost a full year, enhanced income-streams from donations, increased business from the hiring out of the Society's facilities and the benefits of wider distribution of the Society's Journal. Investment income diminished, but by a lesser proportion than the decline in the market values of the underlying securities. Interest income shrank as a result of the combination of smaller cash balances held for outstanding commitments and lower market interest rates.

The Society's total holdings of long-term investments, including cash, suffered a 25% loss in value during the year. This mirrors the situation in the vast majority of charities in a similar position to ours; only the exact quantum of loss will have varied. No assets were sold in 2008 although cash holdings were reduced slightly by a £25,000 transfer in mid-2008 to meet a cash-flow need.

The Society's building was valued in February 2007. A further valuation will not be required before 2012.

Incoming resources

The elections of new Fellows and enhanced collections enabled income from subscriptions to increase by 14%, subscription rates remaining unchanged during the year. Investment and interest income declined by approximately 22% from 2007, reflecting reduced yields and dividends from bonds and equities, as well as lower interest rates. Net income from the Journal registered an exceptionally strong performance owing to a combination of increased consortia sales and higher Rights revenue. Donations continued to improve during 2008, although dedicated fund-raising has yet to develop critical mass. Almost 2/3rds of total donations in 2008 was attributable to one donation for general purposes from Barclays Bank plc, to whom the Society would like to record its gratitude, along with our thanks to all our other donors during the year. Rental income shows the positive impact of rental receipts for a full year and revenue from the hire of facilities grew almost five-fold as the Society developed a solid and growing base of regular hirers. The variety and balance of the Society's sources of income is a very positive feature of our overall income profile. In summary, total incoming resources showed a 31% increase over 2007.

Resources Expended

Costs in 2008 registered a slight (2%) decline, partly due to the non-recurrence of a few residual costs incurred in 2007, such as some storage costs and a raft of up-front legal and agency costs relating to the tenancy. After netting out the distortions in staff costs attributable to a donation in 2007, which was applied to one cataloguing project involving staff costs, staff costs in 2008 actually rose by just under 11% in 2008, which was the product of a long overdue revision of overall staff remuneration and which brought consistency and standardisation to the Society's human resources regime, at the same time as confirming a proper value to the staff's contribution to the work of the Society. Other costs were contained and the Society has no intention of losing its focus on the efficient and cost-effective management of its physical and administrative infrastructure and continuing to ensure value for money from all our suppliers.

Policy on Reserves and Investments

Every charity in the UK with an asset base including investments will have had the effectiveness of its investment policy severely stress-tested in 2008. In the Society's case, our portfolio with HSBC Investments is invested in accordance with a prudent asset allocation, including a minimum 20% allocation to cash and fixed income securities. Furthermore, over the course of the last two years the investment manager has been endeavouring gradually to move the portfolio to holdings in various funds, rather than individual holdings, in the interests of further risk-spreading, so that at present most holdings of various asset classes are made up of funds, rather than of individual stocks. However, the investment manager's choice of fund within this policy, particularly with regard to its holdings of equity funds, has been influenced by certain policy decisions agreed between us, such as a preference for high-income over high-growth funds, or a preparedness to invest a prudent amount of available funds in Asian economies, in accordance with the Society's confident, but measured view of the bright economic future of that continent.

The value of the Society's total holdings of investments and cash on deposit fell by 25% in 2008. Each charity's goals are different, depending on the needs of its constituents. In the Society's case, our major constraint is the need to generate income from our portfolio, while preserving value, and funds with an emphasis on income generation have suffered greater declines in value than the market overall. It should also be noted that the 25% decline in value is greater than the 22% decline in income and the portfolio continues to generate significant income, which we expect to continue, albeit at a lower level, in 2009.

We are confident that our investment policy remains a solid long-term basis for the Society's investments.

Future Financial Plans

The Society is reasonably confident of the resilience of its various income-streams for the year ahead. The rental agreement with our tenants is in place until at least mid-2012. Income from the sales of our Journal is reasonably predictable, as are subscription revenues from Fellows. Our policy for hiring out the facilities at 14 Stephenson Way is based on pricing for value and should hold the Society in good stead when potential hirers are seeking to economise. We are reasonably confident that we will effect a further reduction in the Society's deficit in the coming year, but this does depend to a large extent on how successful we are in enhancing the Society's income from donations and fundraising.

Plans for future periods

It is difficult to forecast future developments in such highly uncertain times, so it is prudent for the Society, firstly, to budget for reduced levels of investment and interest income and, secondly, to ensure that our financial assets are not sold into the bottom or near-bottom of the market. Thus the Society will retain its emphasis on retaining adequate levels of cash for the coming year and avoiding the need to sell any financial assets or make any other major cash outlay which is not fully funded.

The goal for 2008 was to achieve an operating surplus for the year, before depreciation. While this has not been quite achieved in 2008, the operating deficit has been greatly reduced and we are confident of closing in on this goal in 2009, provided that we continue to combine income growth with effective cost control. In 2009 we will build on the considerable success we have already achieved in improving usage of the Society's facilities, expanding the number of our activities and enhancing their content and delivery even further.

However, these actions alone are not sufficient to cover the anticipated cost of the increased services and facilities which the Society aspires to provide. Accordingly, transformation of the Society's capacity to meet its core objectives requires the Society to make renewed efforts to implement a successful fund-raising campaign in 2009 and beyond.

Trustees' responsibilities in relation to the financial statements

Charity law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the charity's incoming resources and application of resources during the year and of its state of affairs at the end of the year. In preparing those financial statements the trustees are required to

• • select suitable accounting policies and then apply them consistently;

• • make judgements and estimates that are reasonable and prudent;

• • state whether applicable accounting standards and statements of recommended practice have been followed, subject to any material departures disclosed and explained in the financial statements; and

• • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charity will continue in operation.

The trustees are responsible for keeping proper records which disclose with reasonable accuracy the financial position of the charity and enable them to ensure that the financial statements comply with the Charities Act 1993. They are also responsible for safeguarding the charity's assets and hence taking reasonable steps for the prevention and detection of fraud and breaches of law and regulations.

Statement of disclosure to auditor

So far as the Board of Trustees is aware:

1. a) there is no relevant audit information of which the charity's auditors are unaware; and

2. b) they have taken all steps that 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.

Approved by the trustees on 2009 and signed on their behalf by:

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