2010 Trustees’ report

and accounts
Patron Senior management team External auditors
Her Majesty The Queen BDO LLP
Chief executive Emerald House
President Sir Nicholas Young East Street
His Royal Highness The Prince of Wales Epsom
KG KT GCB OM Managing director of operations Surrey KT17 1HS
Michael Adamson (from 11 October
Deputy presidents 2010) Bankers
Her Royal Highness Princess Alexandra National Westminster Bank plc
The Hon Lady Ogilvy LG GCVO Director of international City of London Office
The Countess Mountbatten of Burma David Peppiatt PO Box 12258
CBE CD JP DL 1 Princes Street
Director of UK service development London EC2R 8PA
Honorary vice-presidents Margaret Lally
Lord Barnard TD Investment managers
The Rt Hon Baroness Chalker of Wallasey UK director, Northern Territory
Sylvia, Countess of Limerick CBE Jean Henderson Lazard Asset Management Ltd
Professor John McClure OBE 50 Berkeley Street
Mrs Elspeth Thomas CBE DL UK director, Scotland, Northern London W1J 8HA
Ireland and the Isle of Man Territory
Vice-presidents Gerry McLaughlin (until 13 August 2010)
Legal & General Investment Management
Mr Anthony Andrews Helen Bath (acting director from 16
One Coleman Street
Ms Angela Rippon OBE August until 15 October 2010)
London EC2R
Mrs Maria Shammas MBE Norman McKinley (from 18 October 2010)

BlackRock
Board of trustees UK director, South Eastern Territory 33 King Wiilliam Street
Liz Page London EC4R 9AS
Chairman
Mr James M. T. Cochrane UK director, Wales and External legal advisers
Western Territory Withers
Vice-chairmen Annie Bibbings 15 Old Bailey
Mr Terrence Collis
London EC4M 7EG
(until 31 December 2010)
Director of human resources
Mr David Fall CMG (from 1 January 2011)
and education
Mrs Beryl Hutchinson MBE
Roger Smith FCIPD
(until 31 December 2010)

Mrs Victoria Peterkin

Director of fundraising
Mark Astarita
Treasurer
Mr Russell Walls Director of communications
Philip Talbot
Other trustees
Mrs Sue Brown Director of strategy and
Mrs Stella Cummings corporate performance
Mr Stanley Fitches MBE Kate Lee (until 30 April 2010)
Ms Amy Foan
Mr Christopher Hedges Interim director of strategy
Mr Michael Herriot MBE Julian Mason (from 1 May 2010)
Mr Steve John (from 1 January 2011)
Mr Afzal Khan CBE Director of finance and
Lady Lamport business development
Dr Lise Llewellyn Rohan Hewavisenti ACA
Mr Gordon Low (from 1 January 2011)
Dr J. Kay Richmond
Mr Graham Stegmann CBE
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
1
 Herline Jasmina,
36, is a resident of
the Automeca camp
for displaced people
in Haiti, who we are
supporting with
cash grants

2 British Red Cross Trustees’ report and accounts 2010

Chairman and chief executive’s statement 4

Objectives 5

Activities 6

Plans for 2011 12

Review of finances 14

Structure and governance 16

Independent auditors’ report to the trustees of the

British Red Cross Society 19

Accounts for the year ended 31 December 2010 21

Thank you 42

3
 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.
4 British Red Cross Trustees’ report and accounts 2010
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
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.
5
 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.
Our involvement in the wider Red
Cross response has included:
Haiti
A devastating earthquake measuring 7.3 > sending experts in mass sanitation and
on the Richter scale struck Haiti on 12 logistics to Haiti from the UK
January 2010. It was the worst to strike
the country in 200 years. The Haitian > distributing emergency relief items
government estimates that 1.3 million such as blankets, tarpaulins and
people were displaced and more than mosquito nets
200,000 people died.
The International Red Cross and Red > supporting Red Cross basic healthcare
Crescent Movement response in Haiti units and mobile clinics.
is its largest ever response in a single
country. Among other activities, as The British Red Cross is now mainly
of December 2010, it had distributed working on sanitation and livelihoods in
more than a million relief items, reached four locations: Automeca and La Piste
288,000 people with health services, camps, the Delmas 19 area of Port-au-
and was producing and distributing 2.5 Prince – the Haitian capital – and the
million litres of clean water each day. Les Cayes region, which many people
The British Red Cross raised £17.5 fled to after the earthquake.
million for Haiti (£11.9 million from The scale of the disaster means
our Haiti Earthquake Appeal, £1 million recovery will be a long process for the
from the Department for International people of Haiti, so we expect to be
Development (DFID) and £4.6 million working there for two or three more
drawn down from the Disasters years.
Emergency Committee (DEC) during redcross.org.uk/haiti
the year).

6 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.

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 Red Cross relief A Red Cross nurse Fatima, 85, ran with her a whole had reached 2.3 million people
worker, from one of asks a child in Pakistan family from their village
more than 30 Red Cross to breathe deeply so she in Pakistan as the flood
in Pakistan with food, and 1.4 million
National Societies working can check the condition waters breached the people with other relief items such as
in Haiti, carries a child of his lungs nearby levees tarpaulins or blankets.
redcross.org.uk/pakistanfloods

7
 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. outside King’s Cross station in London.
They ferried critically ill patients to In Northern Ireland, we helped deliver
hospital, made sure discharged patients drinking water to vulnerable residents
got safely home and delivered essential after 40,000 people were left without
medical equipment. water supplies during power cuts.
In December, they also gave out In May, volunteers and staff provided
blankets and pillows to passengers first aid and emotional support to
stuck at Glasgow Airport, and offered passengers and their families after a
support to around 500 people stranded fatal school coach crash near Keswick

8 British Red Cross Trustees’ report and accounts 2010

>
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,
shelters. We also worked with victims
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.
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
Staff and volunteers, Volunteers treat The earthquake in Chile
equipped with specialised a casualty during a in February 2010 damaged
4x4 vehicles, were a simulated emergency or destroyed around
lifeline for people in response exercise 200,000 homes
isolated communities
cut off by heavy snowfall
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
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.
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
9
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
10
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
 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 A participant signs

course specially designed during an inclusive first
for young carers in aid course, aimed at
Ross-shire, Scotland people with disabilities

11
 Plans for 2011
Despite the tough economic climate,
during the second year of our five-
year 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:
> 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
12
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,
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 Emergency response People under 26

in the home service talks volunteers clocked up make up 18 per cent of
to a beneficiary hundreds of hours helping our volunteers
vulnerable people during
bad weather

13
 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.
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.
14
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 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).
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 Investments

Lives, outlines plans to draw down on As at 31 December 2010, we held fixed
our free available reserves by 2015. asset investments of £58 million (2009:
We plan to draw down £18 million of £37.8 million). Our investments reported
reserves in 2011 and a further £7 million gains of £1.7 million in 2010.
in 2012. An investment sub-committee of the
finance and audit committee regularly
reviews our investment portfolio and
Pensions performs an annual review of our
The British Red Cross operates two investment policy. Our investment
defined benefit pension schemes, which objective is to seek yield subject to a
are both closed to new members. The net requirement of capital preservation.
pension surplus reported in our accounts The investment sub-committee has
is £1.1 million as at 31 December 2010 reviewed, and is satisfied with, the overall
(2009 deficit: £1.6 million) and the performance of the investment portfolio
actuarial gain during the year was £2 against its benchmarks.
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.

15
 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.
16
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
British Red Cross Trustees’ report and accounts 2010

education programmes, supporting
refugees and asylum seekers, and
fundraising. Without them, we could
not carry out this life-saving and life-
changing work.
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.
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
> 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,
17
 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.
18
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
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.
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
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;
19
 > have been properly prepared in
accordance with United Kingdom
Generally Accepted Accounting
Practice; and

> have been prepared in accordance with BDO LLP

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:
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).

> 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.

20 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 £119.9m

6 7
2. Trading activities £24.8m
5

3. Emergency response and recovery £9.3m

4
4. Resilence £15.3m
3
5. Health and social care £25.1m
1
2
6. Supporting and strengthening the Movement £7.9m

7. Other income £3.4m

Expenditure £199.2m

1. Fundraising £40.3m
6 7
1
2. Trading activities £23.5m

5 3. Emergency response and recovery £46.8m

4. Resilence £36.3m
2

5. Health and social care £41.4m

4
6. Supporting and strengthening the Movement £8.3m
3
7. Governance costs £2.6m

22 British Red Cross Trustees’ report and accounts 2010

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

Restated
2010 2009
Unrestricted Restricted Total Total
Notes £m £m £m £m

Incoming resources

Incoming resources from generated funds

Voluntary income 2 86.6 33.3 119.9 95.6
Trading activities 24.8 – 24.8 24.9
Investment income 0.2 0.4 0.6 1.8
Total incoming resources from generated funds 111.6 33.7 145.3 122.3

Incoming resources from charitable activities

Emergency response and recovery 2.7 6.6 9.3 7.0
Resilience 14.0 1.3 15.3 15.4
Health and social care 24.9 0.2 25.1 27.5
Supporting the Movement 0.3 7.6 7.9 7.7
Total incoming resources from charitable activities 3 41.9 15.7 57.6 57.6

Other incoming resources

Miscellaneous income 1.1 – 1.1 0.8
Net gains on disposal of fixed assets 1.7 – 1.7 1.4

Total incoming resources 156.3 49.4 205.7 182.1

Resources expended

Costs of generating funds

Voluntary income 39.5 0.8 40.3 30.1
Trading activities 23.5 – 23.5 23.6
Total resources expended on generating funds 63.0 0.8 63.8 53.7

Costs of charitable activities

Emergency response and recovery 22.8 24.0 46.8 39.0
Resilience 27.0 9.3 36.3 32.5
Health and social care 39.7 1.7 41.4 45.1
Supporting the Movement 1.6 6.7 8.3 7.6
Total resources expended on charitable activities 91.1 41.7 132.8 124.2

Governance costs 2.6 – 2.6 3.1

Total resources expended 4 156.7 42.5 199.2 181.0

Net incoming / (outgoing) resources before transfers (0.4) 6.9 6.5 1.1
Transfers between funds 7 – – – –

Net incoming / (outgoing) resources before

recognised gains and losses (0.4) 6.9 6.5 1.1

Losses on current asset investments (0.2) – (0.2) –

Gains on fixed asset investments 9 1.7 – 1.7 6.3
Actuarial gains / (losses) on defined benefit pension schemes 14 2.0 – 2.0 (1.6)

Net movement in funds 3.1 6.9 10.0 5.8

Total funds – 1 January 7 107.3 38.5 145.8 140.0

Total funds – 31 December 7 110.4 45.4 155.8 145.8

All the activities relate to continuing operations.

23
Consolidated balance sheet for the year ended 31 December 2010

2010 2009
Notes £m £m 

Fixed assets
Tangible assets 8 63.8 67.9
Investments 9 58.0 37.8

121.8 105.7

Current assets
Stocks 3.3 2.9
Debtors 10 29.0 27.5
Investments 9 11.2 21.1
Cash at bank and in hand   10.4 11.7

53.9 63.2

Current liabilities
Creditors: amounts falling due within one year 11 (17.4) (15.7)

Net current assets 36.5 47.5

Total assets less current liabilities 158.3 153.2

Creditors: amounts falling due after more than one year (0.3) (0.3)
Provision for liabilities and charges 12 (3.3) (5.5)

Net assets before pension scheme surplus / (deficit) 154.7 147.4

Defined benefit pension scheme surplus / (deficit) 14 1.1 (1.6)

Net assets   155.8 145.8

Funds:

Restricted funds 7 45.4 38.5

Designated funds 7 – 11.4

General fund tangible fixed assets 54.6 54.2

Defined benefit pension scheme fund 1.1 (1.6)
Free available reserves   54.7 43.3

General funds 7 110.4 95.9

Total funds   155.8 145.8

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 Russell Walls

Chairman, board of trustees Chairman, finance and audit committee
10 March 2011 10 March 2011

24 British Red Cross Trustees’ report and accounts 2010

Consolidated cash flow statement for the year ended 31 December 2010

2010 2009
Notes £m £m

Net cash inflow / (outflow) from operating activities (see below) 8.4 (7.0)
Capital expenditure and financial investment 16 (19.4) 16.3

(11.0) 9.3

Decrease / (increase) in current asset investments 17 9.7 (2.3)

(Decrease) / increase in cash   (1.3) 7.0

Reconciliation of net incoming resources to net cash outflow from operating activities

Net incoming resources 6.5 1.1

Depreciation charge 6.5 6.8

Surplus on sale of tangible fixed assets (1.7) (1.4)

Increase in stocks (0.4) (0.2)

Increase in debtors (1.5) (8.1)

Increase / (decrease) in creditors 2.0 (4.3)

Decrease in provisions for liabilities and charges (2.2) (0.1)

Net charges for defined benefit pension scheme   (0.8) (0.8)

Net cash inflow / (outflow) from operating activities   8.4 (7.0)

Reconciliation of net funds to movement in short-term funds less borrowing

(Decrease) / increase in cash in the period (1.3) 7.0
(Decrease) / increase in current asset investments   (9.7) 2.3

(11.0) 9.3

Unrealised (losses) / gains on current asset investments   (0.2) 0.1

(11.2) 9.4

Net short-term funds less borrowing at 1 January 32.5 23.1

Net short term funds less borrowing at 31 December 17 21.3 32.5

The accompanying notes form an integral part of these consolidated financial statements.

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.
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.

The results and balance sheet of the British Red Cross’ Direct costs are those specifically related to producing the
subsidiary, Britcross Limited, have been consolidated on a output of an activity, for example the costs incurred in direct
line by line basis. Britcross Limited makes up accounts to contact with beneficiaries.
31 December. Separate statements of financial activities and
balance sheet have not been presented for the charity alone Support costs are those which provide indirect support to
as these are not considered to be materially different from the front-line output provision – examples are central finance,
consolidated statement of financial activities and consolidated human resources and management information systems.
balance sheet. Support costs not attributable to a single activity have been
allocated on a basis consistent with identified cost drivers for
The financial statements incorporate the results of all material that cost category such as staff head count, floor space and
activities overseas where the British Red Cross has operational expenditure.
responsibility. The results and net assets of Red Cross
operations in eight British Overseas Branches have been Governance costs relate to the direct running of the charity,
included in the financial statements. allowing the charity to operate and generate the information
required for public accountability. They include the costs of
(b) Fund accounting subscriptions related to membership of the International Red
Cross and Red Crescent Movement, as well as the costs of
General unrestricted funds are available for use at the trustee meetings and internal and external audits.
discretion of the trustees in furtherance of the general
charitable objectives. A pension reserve is included within (e) Tangible fixed assets and depreciation
unrestricted funds to reflect the pension surplus.
All tangible fixed assets costing more than £1,000 are
Designated funds are those unrestricted funds transferred capitalised and included at cost, including any incidental
from the general fund for particular purposes or projects at expenses of acquisition and irrecoverable VAT. Depreciation
the discretion of trustees. The creation of designated funds is is provided on a straight-line basis over their useful economic
approved by the trustees before the year end to meet specific lives as follows:
future plans. Amendments to estimates used in calculating the
level of designated funds are made up to the date of approval Freehold properties 50 years
of the accounts.
Leasehold properties
Restricted funds are donated for either a particular area or > Shop premises the shorter of the term of the
purpose, the use of which is restricted to that area or purpose. lease and five years
Such donations are principally for international purposes. > Other premises the shorter of the term of the
lease and 50 years
(c) Incoming resources
Freehold premises ten years
All income is accounted for when the British Red Cross has improvements
entitlement to the funds, the amount can be quantified and Leasehold premises the shorter of the term of the
there is certainty of receipt. Where income is received in improvements lease and ten years
advance of providing goods and/or services, it is deferred until Ambulances Seven years
the British Red Cross becomes entitled to that income.
Other vehicles five years
Unless there is evidence of uncertainty of receipt, residuary Equipment and furniture five years
legacies are recognised from the date of probate where
a reliable estimate can be made. Income from will or Computer equipment between one and three years
reversionary trusts is not recognised until the life interest has and software
passed away. Income from pecuniary legacies is recognised Freehold land Nil
upon notification.
Assets in course Nil
Disasters Emergency Committee (DEC) appeal income is of construction

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.
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.

(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.

27
Notes to the consolidated financial statements for the year ended 31 December 2010

2. Voluntary income
Restated
2010 Restated Restated 2009
Unrestricted Restricted Total Unrestricted Restricted Total
£m £m £m £m £m £m

Regular giving 34.6 – 34.6 28.3 – 28.3

Public donations,
appeals and fundraising 17.6 20.7 38.3 15.0 8.2 23.2
Service donations 2.4 0.1 2.5 2.2 0.1 2.3
Gift aid 10.5 1.8 12.3 8.8 0.4 9.2
Legacies 21.5 0.6 22.1 29.0 0.5 29.5
Disasters Emergency Committee appeals – 8.4 8.4 – 2.0 2.0
Grants – 1.7 1.7 – 1.1 1.1

Total 86.6 33.3 119.9 83.3 12.3  95.6

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

Restated
2010 2009
Grants Other Total Total
£m £m £m £m  

Emergency response and recovery

UK 0.2 2.8 3.0 2.8
International 6.1 0.2 6.3 4.2

6.3 3.0 9.3 7.0 

Resilience
UK 0.6 14.0 14.6 14.2
International 0.5 0.2 0.7 1.2

  1.1 14.2 15.3 15.4

Health and social care

Medical equipment services 0.3 10.7 11.0 12.1
Care and support programmes 3.3 10.8 14.1 15.4

    3.6 21.5 25.1 27.5

Supporting the Movement   6.2 1.7 7.9 7.7

Total   17.2 40.4 57.6 57.6

‘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
Restated
Direct Support 2010 2009
costs costs Total Total
£m £m £m £m

Costs of generating funds

Voluntary income 39.3 1.0 40.3 30.1
Trading activities 22.7 0.8 23.5 23.6

62.0 1.8 63.8 53.7

Charitable activities

Emergency response and recovery

UK 19.5 1.2 20.7 18.4
International 25.4 0.7 26.1 20.6

  44.9 1.9 46.8 39.0

Resilience
UK 23.2 2.0 25.2 24.6
International 10.9 0.2 11.1 7.9

34.1 2.2 36.3 32.5

Health and social care

Medical equipment services 15.2 1.0 16.2 17.8
Care and support programme 22.5  2.7 25.2 27.3 

37.7 3.7 41.4 45.1

Supporting the Movement 8.2 0.1 8.3 7.6

  124.9 7.9 132.8 124.2

Governance costs
Subscription to Federation 1.6 – 1.6 1.6
Staff 0.6 – 0.6 1.0
Audit fees – accounts 0.1 – 0.1 0.1
Fees to auditors for other services – – – –
Other 0.2 0.1 0.3 0.4

2.5 0.1 2.6 3.1

Total 189.4 9.8 199.2 181.0 

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

Emergency Restated
Generating response and Health and Supporting 2010 2009
funds recovery Resilience social care the Movement Governance Total Total
£m £m £m £m £m £m £m £m

Finance 0.8 0.6 0.5 0.5 – – 2.4 2.6

Human resources
and central facilities 0.6 0.6 0.8 1.5 0.1 – 3.6 3.5
Management
information systems 0.3 0.6 0.8 1.6 – 0.1 3.4 3.7
Central management 0.1 0.1 0.1 0.1 – – 0.4 0.3

Total 1.8 1.9 2.2 3.7 0.1 0.1 9.8 10.1

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 2009
£m £m

Turnover 1.4 1.3

Expenditure (0.9) (0.8)

Net income donated to British Red Cross           0.5 0.5 

The assets and liabilities of Britcross Limited consolidated within the balance sheet are:

2010 2009
£m £m

Current assets 0.7 0.4

Current liabilities (0.7) (0.4)

Net assets             – –

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 Net Actuarial gains Balance 31
1 January investment on defined December
2010 Income Expenditure gains benefit pension Transfers 2010
£m £m £m £m £m £m £m

General funds 95.9 156.3 (152.9) 1.5 2.0 7.6 110.4

Designated funds 11.4 – (3.8) – – (7.6) –

Total unrestricted funds 107.3 156.3 (156.7) 1.5 2.0 – 110.4

Total United Kingdom restricted funds 21.0  3.9  (7.5) – – (0.3) 17.1

Haiti earthquake – 17.5 (8.5) – – – 9.0

Pakistan floods – 12.0 (9.1) – – – 2.9
Other international restricted funds 13.5 15.5 (15.3) – – (3.3) 10.4

Total international restricted funds 13.5 45.0 (32.9) – – (3.3) 22.3

Disaster Fund 4.0 0.5  (2.1)  – – 3.6 6.0

Total restricted funds 38.5 49.4 (42.5) – – – 45.4

Total funds 145.8 205.7 (199.2) 1.5 2.0 – 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
Vehicles, Assets in the
Freehold Leasehold equipment course of
property property and furniture construction Total
Cost £m £m £m £m £m

At 1 January 2010 46.2 34.0 38.7 2.4 121.3

Completions 1.6 0.1 0.1 (1.8) –
Additions 0.6 0.3 3.0 – 3.9
Disposals (2.5) (0.2) (0.6) – (3.3)

At 31 December 2010 45.9 34.2 41.2 0.6 121.9

Accumulated depreciation

At 1 January 2010 13.3 10.3 29.8 – 53.4

Charge for year 1.0 1.4 4.1 – 6.5
Disposals (1.2) (0.1) (0.5) – (1.8)

At 31 December 2010  13.1 11.6 33.4 – 58.1

Net book value

At 31 December 2010 32.8 22.6 7.8 0.6 63.8

At 31 December 2009 32.9 23.7 8.9 2.4 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
Total
Fixed assets investments £m

Market value – 1 January 2009 37.8

Additions at cost 44.8
Disposals at market value (26.3)
Net investment gains in the year 1.7

Market value – 31 December 2010       58.0

Cost – 31 December 2010       54.2

Market value Per cent Market value Per cent

2010 of 2010 2009 of 2009
The portfolio consists of the following:  £m portfolio £m portfolio

UK equities 8.6 15 17.7 47

Overseas equities 6.3 11 5.6 15
UK fixed income 43.1 74 12.8 34
Cash – – 1.7 4

  58.0 100 37.8 100

The following investments represented more than five Number Market value Per cent of
per cent of the value of the portfolio at 31 December 2010   of units £m portfolio

Lazard Thematic Global Institutional Share Class 66,313 6.3 11%

Legal & General CAF UK Equitrack 12,988,700 8.1 14%
Black Rock Ultra short Bond Fund 348,049 43.1 74%

2010 2009
Current asset investment   £m £m

Royal Bank of Scotland Global Treasury Funds PLC 4.1 2.5

Black Rock – Institutional Sterling Liquidity Fund 1.0 5.0
CCLA – COIF Charities Deposit Fund – 2.5

      5.1 10.0

Deposits 5.4 9.9

Investment property in the UK 0.7 1.2

Total     11.2 21.1

33
Notes to the consolidated financial statements for the year ended 31 December 2010

10. Debtors

2010 2009
  £m £m

Trade debtors 6.5 5.5

Accrued income 4.6 3.7
Other debtors 0.4 0.7
Prepayments 3.3 3.2
Investment income receivable 0.1 0.2
Tax recoverable 4.0 4.5
Legacies receivable 10.1 9.7

    29.0 27.5

11. Creditors: amounts falling due within one year

2010 2009
      £m £m

Trade creditors 3.1 3.8

Accruals 11.0 7.8
Deferred income 2.0 2.6
Taxes and social security costs 1.3 1.5

      17.4 15.7

2010 2009
Movements in deferred income during the year were as follows:   £m £m

At 1 January 2.6 2.5

Income recognised during the year (2.6) (2.5)
Income deferred during the year 2.0 2.6

At 31 December   2.0 2.6

12. Provisions for liabilities and charges

Rehabilitation Leasehold
commitments dilapidations Others Total
    £m £m £m  £m 

At 1 January 2010 3.5 1.5 0.5 5.5

Payments during the year (0.5) (1.0) (0.5) (2.0)
Amounts released during the year (3.0) – – (3.0)
Increase in provision 1.2  1.6  – 2.8

At 31 December 2010 1.2 2.1 – 3.3

Amounts expected to be incurred:

– within one year 1.2 1.0 – 2.2
– beyond one year – 1.1 – 1.1

  1.2  2.1  – 3.3

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

2010 2009
Total staff emoluments (including casual staff) for the year were as follows:       £m  £m

Salary costs 63.0 62.8

National insurance costs 5.4 5.3
Pensions costs 1.2 1.3

    69.6 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:

2010 2009
£60,001 – £70,000 8 9
£70,001 – £80,000 6 2
£80,001 – £90,000 5 8
£90,001 – £100,000 2 1
£100,001 – £110,000 1 1
£110,001 – £120,000 1 0
£170,001 – £180,000 1  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:  2010 2009

In the UK
Fundraising 147 147
Retail 544 570
UK services 1,417 1,418
First aid services 379 357
International services 66 65
Other 249 257

Overseas
International services 54 56
Total employed by FTE   2,856 2,870
Total employed by headcount 3,364 3,398

The average number of volunteers working for the British Red Cross during year was as follows:
In the UK
Fundraising 3,758 3,774
Retail 6,020 5,299
UK services 12,380 10,906
First aid services 8,315 7,897
International services 409 328
Other 2 4
Total   30,884  28,208

2010 2009
Trustees’ expenses:        £000  £000
Expenses incurred by trustees and reimbursed by the British Red Cross 12 13
Expenses incurred by the British Red Cross on behalf of trustees 16 23
Trustees’ indemnity insurance cover cost 15 15
   
2010  2009
Number of trustees receiving expenses 15 15

None of the trustees received any remuneration during the year (2009: nil).

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.

UK Office Scottish 2010 2009

The amounts charged to statement scheme scheme Total Total
of financial activities are: £m £m £m £m

Current service cost: 0.2 0.1 0.3 0.3

Interest cost on scheme liabilities 1.1 0.4 1.5 1.3

Expected return on assets in the scheme (1.3) (0.4) (1.7) (1.3)

Net finance charge / (credit) (0.2) – (0.2) –

Actual return less expected return on pension assets 1.1 0.2 1.3 1.6

Experience gains on liabilities – 0.7 0.7 –

Actuarial gain arising from government changes to

statutory pension increases 1.1 0.5 1.6 –

Other changes in assumption underlying the present

value of scheme liabilities (1.1) (0.5) (1.6) (4.6)

Total actuarial gain / (loss) 1.1 0.9 2.0 (3.0)

Less movement in restriction of surplus – – – 1.4

Net actuarial gain / (loss) recognised 1.1 0.9 2.0 (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.)

UK Office Scottish 2010 2009

The amounts recognised scheme scheme Total Total
in the balance sheet are: £m £m £m £m

Fair value of plan assets 23 5.8 28.8 25.7

Present value of scheme obligations (19.8) (6.4) (26.2) (25.8)
Restriction of scheme surplus (1.5) – (1.5) (1.5)

Net surplus/(deficit) 1.7 (0.6) 1.1 (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.

UK Office scheme Scottish scheme

Changes in present value of scheme 2010 2009 2010 2009
obligation during the year: £m £m £m £m

At 1 January 19.1 15.5 6.7 4.8

Service cost 0.2 0.2 0.1 0.1

Interest cost 1.2 1.0 0.4 0.3
Member contributions 0.1 0.1 – 0.1
Benefits paid (0.8) (0.8) (0.1) (0.1)
Actuarial loss/(gain) due to government
changes to statutory pension increases (1.1) – (0.5) –
Actuarial loss/(gain) due to
changes in assumptions 1.1 3.1 0.5 1.5
Actuarial loss/(gain) due to experience – – (0.7) –

At 31 December 19.8 19.1 6.4 6.7

UK Office scheme Scottish scheme

Change in value plan assets 2010 2009 2010 2009
during the year: £m £m £m £m

At 1 January 20.6 18.4 5.1 4.2

Expected return 1.3 1.0 0.4 0.3

Employer contributions 0.7 0.7 0.2 0.2
Member contributions 0.1 0.1 - 0.1
Benefits paid (0.8) (0.8) (0.1) (0.1)
Actuarial (gain)/loss on plan assets 1.1 1.2 0.2 0.4

At 31 December 23.0 20.6 5.8 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.

Per cent of Per cent of

The major categories of plan assets as UK Office scheme Scottish scheme
percentage of total plan assets are: 2010 2009 2010 2009

Equities 52 51 68 68
Bonds 47 49 31 32
Cash 1 – 1 –

100 100 100 100

37
Notes to the consolidated financial statements for the year ended 31 December 2010

14. Pensions (cont.)

Principal actuarial assumptions 2010 2009

at the balance sheet date were: % pa % pa

Discount rate 5.4 5.8

Retail price inflation 3.8 3.8
Consumer price inflation 3.1 –
Salary increases 4.8 4.8
Pension increases
– Pre-2005 increases (5%) 3.1 3.7
– Post-2005 increases (2.5%) 2.4 2.5
Expected return on equities 7.7 8.0
Expected return on bonds 4.2 4.5
Expected return on cash 0.8 0.5

Mortality assumptions adopted at the year end

imply the following life expectancy at 65: Years Years

Pensioners: male 21.6 21.5

Pensioners: female 24.0 23.9
Non-pensioners: male 23.5 23.4
Non-pensioners: female 25.9 25.8

UK Office scheme

2010 2009 2008 2007 2006

History for current and previous periods: £m £m £m £m £m

Present value of scheme obligations (19.8) (19.1) (15.5) (19.1) (19.7)

Fair value of plan assets 23.0 20.6 18.3 21.1 20.2

Surplus 3.2 1.5 2.8 2 0.5

Restriction of surplus (1.5) (1.5) (2.8) (2.0) –

Reported surplus 1.7 – – – 0.5

Experience gains/(losses)
– on liabilities – – (0.5) (0.1) 0.1
– on assets 1.1 1.2 (3.7) 0.1 0.6

Scottish scheme

2010 2009 2008 2007 2006

History for current and previous periods: £m £m £m £m £m

Present value of scheme obligations (6.4) (6.7) (4.8) (5.5) (5.4)

Fair value of plan assets 5.8 5.1 4.2 4.7 4.4

Deficit (0.6) (1.6) (0.6) (0.8) (1.0)

Experience gains/(losses)
– on liabilities 0.7 – – 0.2 (0.1)
– on assets 0.2 0.4 (1.1) (0.3) 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

2010 2009
Property Other Total Total
£m £m  £m  £m  

The amount payable within the next twelve months

on leases expiring :
Within one year 1.4 0.3 1.7 1.8
In two to five years 1.8 0.9 2.7 3.1
After five years 2.8 – 2.8 2.5

     6.0  1.2  7.2 7.4

16. Gross cash flows

2010 2009
Capital expenditure and financial investment        £m  £m

Sales of fixed asset investments 26.3 31.8

Purchase of fixed asset investments (44.8) (10.0)
Sale of tangible fixed assets 3.2 1.9
Purchase of tangible fixed assets (4.1) (7.4)

Net cash inflow / (outflow)     (19.4) 16.3

39
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 At 31
January Investment December
2010 Cash flow losses 2010
  £m £m £m £m

Cash at bank and in hand 11.7 (1.3) – 10.4

Loan due after one year (0.3) – – (0.3)
Current asset investments 21.1 (9.7) (0.2) 11.2

Total 32.5 (11.0) (0.2) 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 2009
£m £m 

Capital commitments 1.8 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).

40 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

2010 2009
Unrestricted Restricted Total Total
£m  £m  £m £m 

Tangible fixed assets 54.6 9.2 63.8 67.9

Fixed asset investments 19.5 38.5 58.0 37.8
Net current assets 38.0 (1.5) 36.5 47.5
Creditors: amounts falling due in more than one year – (0.3) (0.3) (0.3)
Provisions for liabilities and charges (2.8) (0.5) (3.3) (5.5)
Defined benefit pension scheme deficit 1.1 – 1.1 (1.6)

Net assets 110.4  45.4  155.8  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 Balance 31
January December
2010 Income Expenditure 2010
Purpose of grant £000 £000 £000 £000 

Refugee orientation – Bradford 18 25 (23) 20

Refugee orientation – Portsmouth 25 99 (96) 28
Refugee orientation – Manchester (Reaching communities) 5 78 (84) (1)
Dawn patrol – Merseyside 11 38 (33) 16
Dawn patrol – Wigan 25 45 (45) 25
Young carers ‘have a say’ in Shropshire 14 55 (54) 15
Leicester Refugee Service – 27 (13) 14
Notts/Derby Refugee Service – 65 (38) 27
Awards for All – WSN First Aid Partnership Project – 10 (10) –

Total 98  442 (396) 144

Balances as at 31 December 2010 are included within our restricted funds.

41
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.

42 British Red Cross Trustees’ report and accounts 2010

We would like to give special Thanks also to:
thanks to:
AVIVA Europe
Sir Arnold Elton CBE and the International Medical Balmain Charitable Trust
and Scientific Committee for their support of our
The Bernard Lewis Family Charitable Trust
health projects across the world.
Bloomberg
The European Commission for generously supporting Bombardier
our work to raise awareness of development and Dr E Boyd and Miss JA Boyd
migration issues in the UK and across Europe.
Bupa
Soroptimist International Wales South Health The Cargill Trust
Education and Hygiene Trust for their ongoing Mrs Henrietta Cayzer
support of our community-based health programme in
Sierra Leone. City of London Corporation
The Constance Travis Charitable Trust
The Wellington Hospital and The Wellington Mr Terry Cross of Delta Print and Packaging
Appeal Committee for their support of orphans and
Deloitte
vulnerable children in South Africa.
The Dowager Countess Eleanor Peel Trust
Allen & Overy LLP Miss Evelyn M Murdoch Charitable Trust
AstraZeneca The Herbert and Peter Blagrave Charitable Trust
Barclays The Herd Lawson and Muriel Lawson Charitable Trust
Bliss Family Charity Nathan Holland and family
The Bradbury Foundation Isle of Man Overseas Aid Committee
Brit Insurance J L Seddon Trust
BT JMP Wilcox
Canon Europe and Canon UK LifeScan Scotland
The Freemasons’ Grand Charity Mr John Maclean
GlaxoSmithKline Amanda Nicholson, President of Buckinghamshire
Guernsey Overseas Aid Commission Nomura
Jersey Overseas Aid Commission Pfizer and Pfizer Foundation
John Lewis Partnership The Redfern Charitable Trust
John Nike OBE DL The Rt. Hon Earl of Portsmouth
The Kwok Charitable Trust Scouloudi Foundation
Land Rover The Sir James Reckitt Charity
The Scottish Government The Tula Trust
Tesco Mr Boyd Tunnock OBE
v The National Young Volunteers Service Wales Council for Voluntary Action
The Vodafone Foundation 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

43
 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

44 British Red Cross Trustees’ report and accounts 2010

British Red Cross
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Fax: 020 7562 2000
redcross.org.uk

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Published in April 2011

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