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PART 1 : MANAGEMENT COMMENTARY

Chairman’s statement..................... 1
Chief Executive’s report....................  2
A healthy UK science base .................... 4
  Providing the environment for world-leading research.................... 4
  Ensuring our operations are fit for purpose.................... 5
  Maintaining the UK’s research portfolio.................... 6
     Sponsored institutes.................... 8
     Opening new avenues in bioscience.................... 10
     Capturing scientific opportunities.................... 12
     Tackling major challenges.................... 14
     New international opportunities.................... 16

Economic and social impact.................... 18
   Technology Strategy ....................19
   Collaborative research with industry.................... 20
   Commercialising research outputs.................... 21
   Securing the skills base ....................23
   People and knowledge flow ....................25
   Industry-relevant training ....................25
   Career development ....................26
Embedding our science in society ....................28
   Opinion gathering and public dialogue.................... 29
   Outreach and engagement ....................30
   Engaging young people in science.................... 31
Corporate information.................... 32
   Council.................... 32
   Boards, Panels and Committees ....................33
   Organisational developments ....................38
       Efficiency, Research Council harmonisation, Risk management, Staff report, environmental policy, Health and Safety, Diversity Financial review.................... 40
       Financial highlights, Pensions, Creditor payment policy, Audit Information
       Remuneration report ....................42

PART 2 : ANNUAL ACCOUNTS
Financial statements for the year ended 31 March 2007....................  45