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2021-12-31-accounts

and Accounts

Company number: 323575 Registered charity: 211585 www.physoc.org

Annual Report and Accounts Company No. 323575

Contents

1 Introduction from President and Chief Executive
1.1 Report of the Trustees
1.2 Financial Highlights
1.3 Charitable objects and public benefit
1.4 Strategic aims and performance
1.5 Structure, governance and management
1.6 Signing of report
2 Independent auditor’s report
3 Statement of financial activities
4 Balance sheet
5 Statement of cash flows
6 Accounting policies
7 Notes to the financial statements
7.1 Income from charitable activities
7.2 Income from investments
7.3 Analysis of expenditure
7.4 Analysis of support and governance costs
7.5 Analysis of grants
7.6 Staff costs
7.7 Related party transactions
7.8 Tangible fixed assets
7.9 Investment property
7.10 Investments
7.11 Debtors
7.12 Creditors
7.13 Deferred income
7.14 Analysis of net funds
7.15 Reconciliation of net movement in funds to net cash flow from operating activities
7.16 Analysis of cash and cash equivalents
7.17 Comparative SoFA per FRS 102 (SORP 2015)
8 Standing information

Annual Report and Accounts

1 Introduction from President and Chief Executive

Enhancing the visibility of physiology in an inclusive and sustainable manner

As we look back at 2021, despite the backdrop of the pandemic, we are pleased to report on what has been an exciting and highly productive year for The Society, as we strive to increase the visibility of physiology in an inclusive and sustainable way.

Equality, Diversity and Inclusion

Earlier this year we held the first event to launch our ‘roadmap for change’ where we discussed The Society’s vision for Diversity and Inclusion. Led by our Equality, Diversity and Inclusion (EDI) Taskforce, we are now collaborating with a consultant to produce an EDI strategy that reflects the communities we serve and is inclusive of all cultures, experiences, and identities.

As part of building a strong community, we continued to work to improve our equality, diversity and inclusion. Our new video, ‘Being Black in Physiology: Diversity for Scientific Excellence’ has already been watched over 5,000 times, and our Aspiring Black Physiologist Competition shows young, Black individuals that the way to scientific research is open to them.

Strong community

The arrival of the Omicron variant was a stark reminder, should one have been needed, that the pandemic is not over. Since the pandemic began our focus has been to support our members through this unprecedented period. This support has continued throughout 2021 with a growing array of online professional development webinars to support members to progress their career. These are now held in our video library making them more accessible and searchable.

Being a member of The Physiological Society is being part of a community and we look to support members across all stages of their careers – providing a space for collaboration, connection, networking, and friendships to occur. As well as unlocking the potential for knowledge exchange.

This sense of community has always been a strength of The Society, and COVID-19 showed us the importance of facilitating this in new ways. Therefore, at the beginning of 2021 we launched our Member Community an online platform that allows all members to stay connected through forums and personalised content.

The Theme Leads have taken an active role in the Member Community and have begun to engage their Theme members in theme-specific discussions. We encourage all members to log on and introduce yourself to your fellow Theme members so that you can continue to develop your network.

Blue Plaques

This has been a fantastic first year for our new commemorative Blue Plaque scheme which was launched in June. This initiative honours outstanding physiologists who have contributed to the advancement of physiology through their discoveries, while leaving a legacy beyond their lifetime.

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Annual Report and Accounts

With the blue plaques we aim to increase the prestige associated with the university departments, demonstrating the legacy of physiology academia to potential students as well as raising the visibility of physiology, giving the wider public an insight into the positive role that “the science of life” plays in their everyday lives.

The unveiling of the Blue Plaques has been accompanied by scientific lectures and Member Roadshows, where Trustees have had the opportunity to discuss recent Society activities with local members. We are planning an exciting programme of visits for 2022.

Recognising and celebrating excellence in physiology

2021 also saw The Society deliver its first in person and online Member Forum, President’s Lecture and Award ceremony at the Royal Society – the UKs oldest scientific academy in continuous existence.

The 2021 President’s Lecture was delivered by NASA astronaut and physiologist, Dr Jessica Meir, on the topic of ‘Experimenting in microgravity: Full circle for a scientist turned astronaut’. Our awards ceremony recognised the 2021 Rob Clarke recipients, and the Fellows and Honorary Fellows who received their awards in 2021. Honorary Fellowship is the highest honour that The Physiological Society presents to an individual and it recognises persons of distinction in science who have contributed to the advancement of physiology. Our 2021 Honorary Fellows were:

Disseminating research

The Society’s publishing plays a significant role in our mission through the dissemination of leading-edge research. We have continued to ensure our journals remain flagships for physiology, where any researcher is proud to publish. During 2021 author and reader engagement via social media, newsletters and videos kept the community informed of our activities and we continued to make any COVID-19-related articles free to read to support the response effort. In 2021 we were pleased to appoint Peter Kohl as the next Editor-in-Chief of The Journal of Physiology (JP) and look forward to his term starting in 2022. Peter will be the first Editor-in-Chief of JP based in continental Europe. We use the surplus from our international publishing operation to support our community of physiologists, advance physiology and increase the influence of The Society with the public, policymakers, and other stakeholders.

We continued to deliver a portfolio of scientific events and conferences. While ongoing uncertainties around the pandemic meant we had to hold Physiology 2021 online rather than in Birmingham, as ever our Annual Conference brought together an exceptional scientific and professional development program. During the five days, hundreds of physiologists, at all stages of their career, came together in a true celebration of physiology. The enthusiasm of all our members and the wider physiology community was evident, and we would like to thank them for bringing such energy combined with high quality science to the week.

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Increasing our influence

Despite the pandemic, 2021 saw our most successful year in policy yet. We published a range of reports:

The final report in the list was produced in the run up to the COP26 meeting in Glasgow and highlights the vital role physiology and physiologists play in the fight against climate change. This has led to our COP26 Hub and a workshop with Wellcome Trust, who now have ‘Climate Change and Health’ as a strategic priority, with further work planned early next year.

Looking ahead to 2022

With a packed conference programme, new professional development activities, and even more opportunities to engage with the community, we have an exciting year ahead. 2022 also marks the final year of our strategy. It has enabled us, since 2018, to provide a clear framework to support The Society delivering its Vision of Physiology Flourishing. The next phase of our strategy will come into effect from January 2022 with a clear focus on raising the visibility of physiology, with the public, policy makers and physiologists, in an inclusive and sustainable manner

We thank you for you continued support.

David Paterson Dariel Burdass President Chief Executive

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Annual Report and Accounts

1.1 Report of the Trustees

The Trustees are pleased to submit this report and the financial statements for the year ended 31 December 2021.

This is the Trustees’ Annual Report and Accounts for the year ended 31 December 2021 for The Physiological Society (“The Society”). In preparing this report, the Trustees have complied with the Charities Act 2011, the Companies Act 2006, the Articles of Association (“Articles”), and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102).

The Society was incorporated by guarantee on 27 January 1937 under number 323575. It has no share capital and is registered with the Charity Commission for England and Wales under number 211585. The liability of each Member is limited to £1.

The Society’s Board of Trustees (“the Board”) are also Directors of the Company. The governing document is the Articles of Association, and the Regulations is a Board document that complements the Articles in order to demonstrate greater clarity and transparency in The Society’s processes. These documents can be found on The Society’s website

“The Physiological Society” and The Physiological Society logo are trademarks belonging to The Society and are registered in the UK and in the EU, respectively.

Trustees’ responsibilities

The Trustees, as Directors of the charitable company, are responsible for preparing the Trustees’ Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Trustees to prepare financial statements for each financial year. Under that law, the Trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of The Society and the income and expenditure for that year. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain The Society’s transactions and disclose with reasonable accuracy at any time the financial position of The Society and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of The Society and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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Annual Report and Accounts

The Trustees have confirmed that as far as they are aware at the time the report is approved, there is no relevant audit information of which The Society’s auditors are unaware. They have taken all steps necessary to make themselves aware of any relevant audit information and to establish that The Society’s auditors are aware of that information.

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1.2 Financial Highlights

Our principal funding sources were from publications - £3,628,000 (2020: £4,023,000), events - £26,000 (2020: £3,000) and investments and investment property - £326,000 (2020: £365,000).

Overview of the year

Charitable expenditure of £3,769,000 (2020: £3,565,000) was incurred during the year and has supported our charitable objects as set out in the statement of financial activities on page 26 of this report.

Publishing income (88% of total income) fell by £394,000 (9.8%).

Events income in 2021 increased by £23,000, from £3,000 in 2020 which included Physiology 2021, The Society’s Annual Conference. In 2020, the impact of the COVID-19 pandemic led to the cancellation and delay of The Society’s portfolio of events as face-to-face meetings were not possible.

Investment fund income, which is all reinvested, fell by £39,000 (11%). Rental income associated with the rental of space in Hodgkin Huxley House fell by £18,000 (9%) to £186,000 compared to £204,000 in 2020. To help safeguard the property asset, £500,000 has been designated to reflect the ten-year building maintenance programme.

In 2020, the impact of COVID-19 pandemic led to the postponement of number of external and internal meetings, public engagement, policy and communication activities alongside the awarding of travel grants. Some of these activities have been resumed with an overall increase in charitable spend of £213,000 over the period.

Overall, this has led to an operating surplus of £330,000 compared to £865,000 in the prior year. The surplus has arisen because of the continued impact of the COVID-19 pandemic on the planned expenditure for the year and the Trustees have therefore designated the total surplus for the year to the COVID-19 fund. This fund was originally set up in 2020.

Investment performance

In 2021 the Board set up an Investment Policy Working Group and appointed consultants PWC to assist in reviewing and developing a new Investment Policy Statement to better support The Society’s goals including incorporating a more robust Ethics, Sustainability and Governance Policy Statement (Responsible Investment Policy). The primary financial objective is to maintain and enhance the real value of the assets, through a combination of capital growth and income. The target rate of return will be to achieve UK CPI + 4% per annum, after fees and costs.

PWC were also appointed to assist in reviewing the Society’s current investment management and assist in appointing new managers if appropriate. Following a robust process, the Board of Trustees took the decision to transfer the Society’s portfolio to Rathbone Investment Management. The transfer was carried out in quarters three and four of 2021.

Following the net gain of £464,000 from the investment portfolio in 2020, the current turbulent year ended up returning a £968,000 gain representing a 8.3% return. As a result of this gain the total value of listed investments and cash held within the portfolio increased from £9,524,000 to £11,620,000. Since the end of the year there has been continued uncertainty and turmoil in the market due to the Russian invasion of Ukraine. At the end of May the investment portfolio was £10,435,270.

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Annual Report and Accounts

The Society’s investment policy, which takes into account the underlying investment in Hodgkin Huxley House, is to achieve long-term capital growth which can ultimately provide a significant income stream, regardless of fluctuations in our publishing income, to support key charitable activities.

The long-term investment target is inflation, as measured by Consumer Price Index (CPI), plus 4%. A composite benchmark, across three asset classes, is used in the quarterly valuations. In 2021, the managed portfolio returned a gain of 10.2% while the inflation target (CPI + 4.0%) amounted to a gain of 9.6%. The composite benchmark returned a gain of 13.1% for the same period. The Society invests in collective investments (unit and investment trusts). This is designed to give a protective broad level of diversification across all major asset classes. Rathbone Greenbank Investments, our fund managers, have general discretion over the asset allocation and selection of investments within pre-agreed investment parameters as set out in our Investment Policy Statement.

Reserves Policy

The Society review’s our reserves policy regularly. Our aim is to maintain our reserves at a sufficient level to ensure our financial resilience and sustainability, including protecting us against risks identified in the Risk Register. The Reserves policy balances the need to hold back reserves to ensure a sustainable financial position but also signals intentions to fulfil charitable objects to support current and future beneficiaries over the longerterm.

The major exposure in The Society's income portfolio is its dependence on publishing income, which represents around 88% of annual turnover. The high commitment to expenditure allied to substantial exposure to a single source of income is a major risk to the organisation. The Society has designated a Continuity Fund (£7.1m) to mitigate this risk and provide medium-term stability. The Continuity Fund ensures sufficient time to transition to alternative operating models, in an orderly fashion, should publishing income collapse. The Continuity Fund was initially established to represent 24 months operating costs excluding publishing, grants expenditure and one-off costs. These are around 40% staff costs that cannot be immediately adjusted in a new operating environment. However, in light of the strong investment performance and increased uncertainty over publishing the Board of Trustees agreed in 2021 to increase the continuity fund to cover an additional 6 months operating costs.

The Society has further designated a HHH Property Fund (£4,681,000) comprising the current carrying value of The Society's freehold property in London, currently split between tangible fixed assets (held at depreciated cost) and investment property (held at market value), and as such it is not available to meet the general running costs of The Society. As well as non-property fixed assets, £0.5m has been designated to an HHH Maintenance Fund to recognise essential future spending associated with the maintenance of the freehold property.

The Strategic Investment Fund will be allocated to new activities and specific major projects specified in the 201822 Strategic Plan, for example, an Innovation Fund to support sustainability, for which a sum of £1,075,000 has been designated. In 2022 this Fund was used to trial The Society’s first in person Member Forum, President’s Lecture and Award ceremony a celebration of physiology, physiologists and The Society.

COVID-19 Fund

Due to the ongoing COVID-19 pandemic, the Society has designated the surplus arising in 2020 and 2021 into a specific COVID-19 fund. The fund has been set aside for the following purposes:

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Annual Report and Accounts

The Society holds the balance of reserves to ensure it can meet its operational needs and working capital requirements (the free reserve). The free reserve aims to hold approximately six months operating costs, currently £1.9m excluding third party operating costs and grants, to provide operational cash flow. At 31 December 2021 free reserves held totalled £2.9m, however since the Balance Sheet date the growing uncertainty in the academic publication sector means there is likely to be an ongoing reduction in income and these available reserves may need to be utilised.

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Annual Report and Accounts

1.3 Charitable objects of The Society

The objects of The Society as set out in its Articles are:

‘to promote for the benefit of the public the advancement of Physiology, and facilitate the interaction of physiologists, both at home and abroad, and thereby contribute to the progress and understanding of bio-medical and related sciences and the detection, prevention and treatment of disease, disability and malfunction of physical processes in all forms of life. ’

Public benefit

In reviewing The Society’s performance during the year, the Board has had regard to the guidance on public benefit issued by the Charity Commission. The benefits provided by The Society to realise our objects and promote the advancement of physiology are in the form of:

Vision, purpose

To further the objects of The Society, The Society has developed a five-year strategic plan with a clear vision. For over 140 years, The Society has been at the forefront of the life sciences, and the increasing pace of change in the modern world demands a clear strategic focus in how it will meet the challenges that current political, economic and societal uncertainty brings.

Vision Physiology flourishing

Purpose

To advance physiology in order to foster the understanding and improvement of life

Strategic aims

In the next 3 – 5 years, increase recognition that physiology is essential to solving the health challenges faced throughout life.

Underpinning the Vision, Purpose and the overall objective for The Society are four distinctive but interconnecting strands which are the key strategic aims reported on in this document.

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Annual Report and Accounts

The members are at the heart of The Society. They are the passionate advocates for the cause, and key to the success of our strategy is to inspire and empower them to engage with others about physiology. Physiology is the science of life, and everyone involved in this field owes it to future generations to ensure it continues to thrive; to do this The Society must ensure it meets the needs of the next generation of physiologists.

Values

To achieve our Purpose, we use three guiding principles which apply to the way we work, both internally and externally.

  1. Act with integrity; being fair and transparent in our processes, taking time to listen and being respectful of different viewpoints, and being accountable for our actions and ensuring our decisions are evidence-based.

  2. Be inspiring; expanding horizons and being open to new opportunities, being innovative and forwardthinking in our approach to work, realising potential by sharing skills, knowledge and ideas.

  3. Be collaborative; providing opportunities for networking, being supportive of our colleagues to deliver our Vision, enriching physiology to enhance the future of the discipline.

1.4 Strategic aims and performance

Publications

Making our journals flagships for physiology, where any researcher is proud to publish

As noted in previous reports, although the publishing strategy largely applies to all three journals, Physiological Reports (PR) is owned and published jointly with the American Physiological Society and its strategy is set by the Joint Management Board rather than solely by The Society.

Although the day-to-day operations of publishing the journals continued efficiently in 2021, the effects of the pandemic were felt with lower submissions of original research to both The Journal of Physiology (JP) and Experimental Physiology (EP) in 2021 compared to 2020 (-15% and -12% respectively). The causes of the decrease are unknown but is likely in part caused by the reduced time researchers were able to spend in the lab, supply issues with lab materials and equipment, and the restrictions placed on human-participation research in clinical settings due to the pandemic. Both journals saw a more marked decrease in submissions in subject areas that are usually associated with human studies. If these are the reasons for the decline in submissions, the journals are likely to see sustained decline into 2022.

By contrast Physiological Reports showed strong growth, with total submissions increasing by 6%, to 558 from 528 in 2020. Of these submissions 40% were direct and 60% were transfers from The Society’s and the APS’s other journals.

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Annual Report and Accounts

Invited content of JP and EP also declined. Sponsoring symposia and inviting reviews from speakers has been a long-term source of reviews for JP in particular, so the postponement/cancellation of events may have resulted in a corresponding decline in the number of reviews submitted over the past two years.

In 2021 we were pleased to appoint Peter Kohl as the next Editor-in-Chief of JP and look forward to his term starting in 2022. Peter will be the first Editor-in-Chief of JP based in continental Europe.

# Objective Activity Performance/impact
1 Building the community  The JP Editorial Board Fellowship scheme,
which invites early-career-stage
physiologists to apply to join the Editorial
Board of JP under the mentorship of a
Senior Editor, continued to attract many
outstanding applications.		  Out of 50 applications in
2021, 10 new Fellows
were appointed. The 2019
cohort of Fellows proved
to be of such a high calibre
that four of them were
appointed as Reviewing
Editors. The ‘promotion’ of
eight Fellows to the main
Board since the scheme
was launched has helped
to diversify the
composition of the Board.
 Promoted JP to readers and authors in
India via a publishing webinar aimed at
Early Career Researchers (ECRs). This
showcased_The Journal_’s strengths, the
quality of the peer review process and the
benefits offered to authors.		  Improved quality of
submissions from India.
2 Developing the brands  The JP Virtual Journal Club (VJC)
continued in 2021 after its successful
launch in 2020. This has helped engage
ECRs with journal content and showcased
our research to a wider community.		  We hosted 13 VJCs
webinars in 2021 and a
had good number of
attendees participating in
discussions.
 In 2021 JP rolled out the introduction of
Abstract Figures for all original research
papers. Authors have access to a premium
BioRender account to ensure a consistent
and visually appealing style is used.		  Clear, professional and
journal-branded schematic
figures in articles, which
when shared and re-used
promote JP’s brand and
commitment to authors by
offering this service.
3  Improved Information for Authors.  Clearer and more
straightforward
instructions given to
authors on how they can
write the most compelling
articles byconformingto
Raising the bar for
scientific integrity

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Annual Report and Accounts

3 journal standards and
requirements.
 EP launched a new statistics policy for the
reporting and presentation of data.		  Increased transparency
and rigor in the reporting
and analysis of data in
published articles.
 Open Science Badges introduced for both
JP and EP.		  Clear visual cue for
readers and an ‘award’ for
authors who promote the
principles of the Open
Science movement.
Raising the bar for
scientific integrity
 JP introduced the publication of the peer
review history of all accepted
manuscripts.		  Increased transparency of
editorial decision-making
and an educational tool
for researchers, especially
ECRs.
4 Transition to Open
Access		  More ‘Read and Publish’ deals negotiated
by Wiley.		 Increased proportion of Open
Access papers published in JP
and EP as the fees for
publication are covered by
deals at both at a country and
an institutional level.
 In-principle decision made to ‘flip’ EP to
Open Access in 2023.		 Another Open Access journal
in The Society’s portfolio,
ensuring EP remains a viable
and competitive journal for
researchers requiring Open
Access publishing venue.
5  Appointment and training of new Editors-
in-Chief for all three journals.
Future Plans – 2022 and
beyond
 Position EP to flip to Open Access.
 Attract increased good-quality
submissions for all three journals.
 Improved pipeline of invited content.
 Add clarity on/streamline journal and
editorial policy.
 More effective conference attendance.

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Annual Report and Accounts

Conferences

Advancing physiology through our conferences: excellent science, wide and active participation, lasting impact

Researchers attend scientific conferences to present new work and receive feedback from their peers, to make connections with other scientists, to learn about new research, techniques and ideas, and to catch up with friends and colleagues. Conferences also have a role in setting the direction of research, particularly by highlighting hot topics. Through its programme of meetings, The Society showcases physiological research, spotlights new areas of discovery, delivers training for early career researchers and provides an opportunity for physiologists to interact.

Much of the 2021 programme of conferences, meetings and symposia was populated by events that had been postponed from 2020. While the first half of 2021 was a continuation of 2020 and was dominated by online conferences, the second half (when restrictions were lifted) enabled The Society to work with other teams internally in running smaller Member Roadshows to explore what a return to in-person meetings could look like.

The Society built on its experience from 2020 in running online conferences and was able to offer more sophisticated and complex meetings. Contracting the virtual event platform EventsAIR enabled live or prerecorded presentations with panel discussions and audience Q and A, poster sessions with live presentations, and networking in the meeting hub.

The Society’s strategy for 2018–21 referred to “a prediction that rising travel costs and the advent of social-media communities would signal the end of the academic conference” but it also countered “face-to-face interaction, live presentation and the chance to visit a new city still have immense appeal”. The members’ warm anticipation of in-person events resuming suggests that there is indeed still plenty of scope for in-person conferences. For example, from the Physiology 2021 feedback: ‘I appreciate that online conferences are convenient and easy to deliver but nothing beats the randomness of in-person meetings’.

# Objective Activity Performance/impact
1 Be innovative in our
approach to meetings		  The decision to move the Annual
Conference, Physiology 2021, from an in-
person conference in Birmingham to
online only was made early in 2021
following the rise in the alpha variant of
COVID-19.
 This early decision by the Board enabled
the Events Team to review, select and test
the right virtual event portal for The
Society’s Annual Conference. This portal
was tested during Future Physiology 2021
and the feedback meant that changes
could be made to ensure the best
experience for those attending P21.
 The virtual and innovative platform
enabled live or pre-recorded
presentations with panel discussions and
audience Q and A, poster sessions with
live presentations, and also networking in
the meeting hub.		  88% of people attending
rated the conference as
excellent or good
 90% of people attending
rated the virtual event
platform as excellent or
good
 89% of people attending
felt that the online format
worked well for the
conference
 98% of people attending
would recommend this
conference to a colleague,
collaborator or peer
 Comments from the
feedback included:
– ‘Well run, preferred it
being online’

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Annual Report and Accounts

– ‘Physiology 2021 was
an excellent
experience!’
– ‘Engaging and
inspiring!’
2 Play a leadership role in
developing strategic
partnerships that
advance the knowledge
and understanding of
physiology		  To build on the success of the 2020 online
conference, COVID-19: Lessons Learned
from the Frontline, The Society made
plans for the online conference, ‘Long
COVID: Mechanisms, Risk Factors, and
Recovery’.
 Bringing together physiologists and
clinicians helps to better understand the
underlying mechanisms and identify
potential therapies for long COVID.
 Conferences Committee identified
strategic partners to work with including
the Intensive Care Society, Academy of
Medical Sciences, Academy of Healthcare
Sciences, the UK Clinical Virology network
and LongCOVID SOS.		  As of 31 December 2021,
97 people had registered
for the conference.
 Registrants include those
from NHS trusts across the
UK.
3 Coordinate with The
Society’s other
activities		  The Events team worked across all teams
on the 2021 Member Forum and
President’s Lecture, which was a hybrid
event.		  These events brought
together membership,
professional development
and engagement,
communications and
governance.
4  Collecting data, both quantitative and
qualitative, is critical in evaluating and
assessing the role in The Society’s
portfolio of events that the new style of
conferences and meetings offered.		  39% of those that
attended Physiology 2021
felt that the Annual
Conference should be held
online again.
 34% of those that
attended Physiology 2021
would not have attended
the in-person event.
Ensure evaluation is
embedded into our
programmes
5  The virtual events platform allowed the
allocation of points to people attending
the meeting to encourage attendees to
engage with the online platform, sessions,
and each other. This gamification was
useful in helping generate a feeling of
community rather than being a passive
attendee.		  Comments from the
feedback for Physiology
2021 included:
– ‘Most of all, however, it
has been wonderful to
connect with science
and scientists through
this conference after a
year or more of home
working. I loved the
meetinghub;it made
Introduce more
audience participation

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Annual Report and Accounts

it feel almost like a
'proper' meeting!’
6 Research opportunities
for new styles of
meeting		  The 2021 Member Forum and President’s
Lecture was held as a hybrid meeting in
person at the Royal Society and also
online.		  Around 60 people
attended in person at the
Royal Society for the
Member Forum and
President’s Lecture.
 18 people attended the
Member Forum online.
 86 people attended the
President’s Lecture online.
7  With many conferences in 2021 and 2022
postponed from 2020 the work on this
will be a priority for 2022.		  After a successful trial run,
the role of online events
will considered in The
Society’s planning either
as stand-alone events or
as part of hybrid events
which could have in-
person and virtual
components.
Agree a sustainable
business model for our
meetings programme
8 Online frees events
from geographical
constraints other than
time zones and
differences in access to
technology.		  For all online conferences that were held
on the virtual event platform, each talk
was recorded and made available to
watch on demand.
 Similarly, all live streams had two back-up
streams where the content was recorded.
If an attendee experienced technical
issues, the streams could be watched on a
30-second delay.		  The Annual Review Prize
Lecture increased the
audience by 35% with the
lecture being available to
view on demand.
 The Annual Conference,
Physiology 2021, was
attended by a vibrant
community of close to 600
scientists from 45
countries.
9  The newly appointed Early Career Theme
Leads organised Future Physiology 2021
and the programme spanned all Society
Themes.
 Conferences Committee recruited a
member with clinical expertise.		  The programme for Future
Physiology 2021 was the
most balanced and
inclusive to date.
Review the roles of the
Theme Leads and
Meetings Committee to
ensure that we are
using the right group to
decide on programmes
and content

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Annual Report and Accounts

Communities: Engagement

Engage for success – improving our two-way commitment and communication to increase recognition of the importance of physiology

The goal of the engagement strategy is to increase awareness of physiology to strengthen the pipeline of physiologists across the discipline. The successful achievement of this goal will be measured by an increase in The Society’s membership numbers and the number of engaged members.

The COVID-19 pandemic continues to challenge long-established methods of communication amongst members and the wider physiological community. The obstacles it presents push The Society to continue innovating and, in 2021, a new online Member Community was launched. Whilst the infrastructure is there, we recognise the need to nurture new and existing communities who, through shared experience or situation, would benefit from being connected and using an online forum to network.

In 2021 we reflected this drive to encourage peer support and networking with the introduction of a Communities Committee. The Communities Committee, together with a newly formed Policy Committee, will continue the work of the Education, Public Engagement and Policy Committee. The Communities Committee will continue to support the career progression of physiologists through the provision of careers information, training and professional development, and the reward and recognition of excellence.

The Policy Committee was established in December 2021 and is responsible for overseeing the delivery of The Society’s strategic priority on policy – working to ensure that physiology is a well-funded, high-profile discipline where physiologists can operate in a supportive policy landscape.

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Annual Report and Accounts

# Objective Activity Performance/impact
1 Increasing the level
of engagement of our
members and the
number delivering
engagement
activities		  The new membership categories
were introduced in 2021 and all
members were required to actively
renew onto the most appropriate
category for them. The categories
have been designed to increase
inclusivity and engagement, with
only first year undergraduates now
eligible for a fee waiver.		  With the introduction of
membership fees to
undergraduate and
retired categories, The
Society saw a large
reduction of members in
these categories – 92%
of Undergraduates and
73% of Retired members
lapsed, respectively.
However, all members in
these categories have
now taken an active
decision and
commitment to be with
The Society boosting
confidence the overall
engagement levels are
increased on previous
years.
 In 2021, The Society ran three online
programmes of professional
development. The programmes, each
of which had at least three sessions,
were designed to support career
progression at key points in a
members’ career.		  The professional
development
programmes throughout
2021 were attended by:
53 individuals
(Knowledge Exchange),
61 (Teaching and
Learning webinars), and
51 (Public Engagement
Training).
 In 2021, The Society, visited six
institutions across the UK to unveil
Blue plaques to honour the
physiologists who have contributed
to the advancement of the discipline
and left a legacy beyond their
lifetime.		  The Society was
represented by the
President and Chief
Executive Officer at each
of the six universities,
and usually accompanied
by additional Board
members. The events
provided an opportunity
to showcase local
science (past and
present), visit the
membership, highlight
some of the benefits of
membershipand raise

17

Annual Report and Accounts

the profile of physiology
on an institutional level.
2 Increasing the
number of young
people choosing to
study physiology-
based courses
through traditional
routes and emerging
educational options.		  In 2021, 37 undergraduate members
were awarded and undertook a
summer studentship; this scheme
provides undergraduates with
funding to undertake an 8-week
research project in the lab of a
member.		  The summer studentship
provides an important
opportunity for students
to validate or inform
their plans for a research
career in physiology.
 We ran a series of undergraduate
webinars to support undergraduate
research and inform career choices.		  163 individuals attended
the undergraduate
series.
3 Developing a policy
and funding
environment
favourable to
physiology		  We carried out policy projects
focused on i) knowledge exchange
activity related to physiology; ii)
improving the interdisciplinary
research environment; iii) informing
public health advice emerging from
the COVID-19 pandemic; (iv) the
contribution of physiologists to
tackling climate change.		  During 2021 The Society
met with nearly 200
stakeholders
representing over 100
organisations to advance
the cause of physiology.
This includes, for
example, informing
spending review bids,
submitting consultation
responses and engaging
directly with physiology
funding organisations.
4 Increasing the
understanding of
physiology among
our target audience
and increase the
visibility of
physiological
research in the media
– in particular, the
importance of
physiology to lifelong
health		  The Society produced a 3-minute
animation called ‘Being Black in
Physiology: Diversity for Scientific
Excellence’, which interviews three
Black academics about their
experiences in academia and
highlights the fantastic research that
they are carrying out to improve our
understanding of how the body
works in health and disease.		  The video was watched
on social media 4,500
times and generated
43,837 impressions.
5 Future Plans – 2022
and beyond		  The new grants programme will
complete its first cycle in 2021; this
programme has been designed to
support career development and
reward membership loyalty.
 Six more plaques will be unveiled in
Universities across the UK and
Ireland, with additional visits made
to institutions that do not have blue
plaques.

18

Annual Report and Accounts

5  Our policy plan for 2022 builds
directly on our 2021 activities, with
further projects focused on key areas
required for the delivery of our
strategic objectives. This will include
a focus on healthy ageing, climate
change and health, knowledge
exchange and interdisciplinary
research environment.
Future Plans – 2022
and beyond

1.5 Structure, governance and management

Board of Trustees

We are governed by our Board of Trustees, members of which are elected or appointed in accordance with our Articles of Association and Regulations. The Trustees are ultimately responsible for the overall strategy, governance, management and Board policies of The Society, ensuring that the charitable objects for which it has been set up are met. The Trustees are also the Directors of the company. The Board meets four times a year. The normal length of service on the Board is four years. The current size of the Board is thirteen, including two independent Trustees and an Early Career Trustee. Board meetings are chaired by the President. From 2021 the General Trustees shall always include in their number one-person resident in the Republic of Ireland. Its full composition is detailed on page 44 of this report.

Trustee induction and training

On appointment new Trustees are provided with an induction pack which includes various information and resources such as the Charity Commission leaflet CC3, the governing documents and Board policies. They are also required to sign a Trustee Code of Conduct agreement and complete a Conflicts of Interest declaration survey. Trustees attend introductory meetings with each member of the Senior Management Team to familiarise themselves with The Societies activities, strategy, and priorities. In addition, all trustees are encouraged to attend training courses, for example, those targeted for Trustees run by the Civil Society. In 2021 an Induction Day was held with the President and Chief Executive for all new Trustees of The Society.

Governance structure

It is the Board of Trustees’ collective responsibility to set the strategy to deliver The Society’s charitable objects and to ensure the effective governance of the charity. The Board then in turn delegates details of the governance oversight and delivery of the strategy to a series of committees and smaller groups which report back to the Board quarterly. The four advisory committees are Conferences, Publications, Communities, and Policy. Each Advisory committee has a Membership Champion at established career level; An early career Membership Champion; A Diversity and Inclusion Champion. This person may also be one of the two Membership Champions. The three governance committees are Finance, Nominations, and Remuneration.

Further details regarding the governance of The Society including the Articles of Association, Regulations, Trustee Annual Reports and Board make-up can be found on the governance pages of The Society’s website.

Management and administration

The Society operates out of Hodgkin Huxley House, which was acquired in 2012. The Chief Executive is the senior executive of The Society appointed by the Board and is accountable to the Board through the Chair. The Board has delegated day to day responsibility for the operational decisions and administration of The Society to the

19

Chief Executive to manage The Society’s activities for optimal performance, including the plans, setting balanced budgets, property and staffing and other resources of The Society in accordance with the strategic and budgetary parameters and risk management strategy. All decisions, apart from those delegated to the Chief Executive as set out in the Delegated Authority Framework are made by the Board. Anything outside the approved Strategic Framework or Budget must be approved by the Board. For the efficient and effective management and proper operation of The Society, the Chief Executive delegates at their discretion a number of their responsibilities to the Senior Management Team (SMT) and other employees. This further delegation of responsibilities does not release the Chief Executive from the overall responsibility which has been delegated to them by the Board.

Key management personnel remuneration

The key management personnel of The Society comprise the Board of Trustees, the Chief Executive and all other members of the SMT in charge of directing and controlling The Society and running and operating The Society on a day-to-day basis. All Trustees give of their time freely, and no Trustee remuneration was paid in the year. Details of all Trustee expenses and related party transactions are disclosed in note 7.7 to the accounts.

Trustees have a legal obligation under Charity Law to act in the best interests of The Society, in accordance with The Society’s Articles, and to effectively manage situations where there may be a potential conflict of interest. The Society adopted a Conflicts of Interest policy in 2019 which details how to identify, manage and report conflicts of interest. Trustees and SMT are required to disclose all relevant interests and register them with the Governance and Risk Manager and manage them in accordance with The Society’s Conflicts of Interest Policy. Trustees complete an annual declaration of related party interests which informs the Society’s Register of Interests. The Articles of Association also include a section on Conflicts of interests and conflicts of loyalty which stipulate what trustees must do when they arise.

The pay of the Chief Executive is reviewed annually by the Remuneration Committee, and normally increased in accordance with average earnings to reflect a cost-of-living adjustment. In view of the nature of The Society, the remuneration is also benchmarked against similar membership organisations in the sector and the relevant location, or with reference to sector reports to ensure that the remuneration set is fair and not out of line with that generally paid for similar roles. While the Chief Executive is responsible for determining staff salaries, within the approved salary budget set by the Board, the provision of such information could be required for due diligence purposes.

Member Forum

On 19 November 2021, The Society hosted its second annual Members Forum (and first in-person Member Forum) at The Royal Society which provided members with an opportunity to hear from the President, Chief Executive, Honorary Treasurer, Incoming Trustees and Editors-in-Chief about our activities and future plans. To retain transparency and enable open discussion between the Board and the membership there was opportunity for members to ask questions. An awards ceremony recognised new Honorary Members, Fellows and Rob Clarke Award winners. The event was recorded and can be viewed on The Society’s YouTube Channel.

Principal risks and uncertainties

The Trustees identify their approach to risk as aiming to minimise adversity and maximise opportunities to balance the successful advancement of The Society’s charitable objects with appropriate due diligence and financial prudence to safeguard a sustainable future for The Society and for the physiology discipline. Trustees acknowledge that risk-taking at a strategic level is necessary for innovation and opportunity and consider a balance of prudence and venture essential to successful management of the organisation and realisation of its objectives.

In 2021 The Society adopted a new online risk management platform Decision Time , after the original spreadsheet approach became unwieldy. The scoring remains the same (Likelihood x Impact + Impact) as do the

20

risk categories (Governance, Regulatory, Financial, Environmental and External, and Law and Regulation Compliance).

A major improvement of the platform includes a new Implications section which allows for the input of Causes and Consequences associated with a risk. This enables broader, more concise, risk categories with the various causes and consequences sitting beneath. The risk controls are then mapped directly to the risk causes so that all controls address the known causes. The platform also includes deadlines and review dates for actions and controls, which are automatically flagged to risk owners.

The highest risk to The Society remains its dependency on a single source of income (publishing income), the expiry of The Society’s publishing contract in 2026, changes to the publishing landscape (for example, Open Access) and threats from COVID-19. To address this risk Trustees have established a Publishing Strategy Task and Finish Group (PST&FG). The role of this group is to develop a publishing strategy that will best protect The Society’s income stream while maintaining the reputation of our journals.

Other key risks include the long-term future of the investment property Hodgkin Huxley House and the implementation of a new strategy post-2022. Trustees will be heavily involved in the strategy review 2022-2025 which will build on the President’s Road map of Visibility, Inclusion and Sustainability and set out new priorities for the post-COVID era.

Diversity & Inclusion

In April 2021, The Society launched a “Roadmap for Change” highlighting a commitment to pursuing a more diverse and inclusive membership. An external consultant was engaged to drive this work forward, starting with a piece of research to identify The Society’s current position and benchmark it against the wider sector. The work will conclude in 2022 and will inform The Society’s new strategy.

In October 2021, The Society produced a 3-minute animation called ‘ Being Black in Physiology: Diversity for Scientific Excellence’ . The video was watched on social media 4,500 times and generated 43,837 impressions. The Society’s magazine, Physiology News, ran a second themed issue on Diversity and Inclusion. The Society supported an allyship training workshop for its members, which was run by Ladders4action.

The Journal of Physiology and Experimental Physiology also adopted a new policy relating to the colour accessibility of our published content. The Publisher for The Society’s journals, Wiley, has also adopted a new author name change policy.

Volunteers

We could not achieve our charitable objectives without the commitment and hard work of our volunteers, both members and non-members, many of whom give freely of their time to act as journal editors, committee members, grant reviewers and volunteers to support our events and activities. The Trustees wish to thank all those who have supported The Society over the last year.

21

1.6 Signing of report

This report was approved and authorised for issue by the Trustees of The Physiological Society and signed on this 24th day of June 2022 on their behalf by:

David Paterson President

Frank Sengpiel Honorary Treasurer

22

2 Independent auditor’s report to the members of The Physiological Society

Opinion

We have audited the financial statements of The Physiological Society for the year ended 31 December 2021, which comprise the statement of financial activities, the balance sheets, the statement of cash flows and the notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the Trustee’s Annual Report Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

23

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the charitable company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

24

and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), the Companies Act 2006 and the Charities Act 2011.

We did not identify any irregularities, including fraud.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the trustees and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the charitable company's members 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 charitable company and the charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Hugh Swainson (Senior Statutory Auditor) For and on behalf of Buzzacott LLP, Statutory Auditor 130 Wood Street London EC2V 6DL

25

3 Statement of financial activities

For the year ended 31 December 2021

Note Unrestricted
funds
£’000		 Restricted
funds
£’000		 2021
Total
£’000		 2020
Total
£’000
Income from:
Donations
Charitable activities
7.1
Investments
7.2
Other trading activities
Total
Expenditure on:
Raising funds:
Investment management costs
Charitable activities:
Publications
Events
Engagement
Other
Total
7.3
Net income / (expenditure) before
gains on investments
Net gains on investments
(Losses) on revaluation of investment
property
Net movement in funds
Reconciliation of funds
Fund balances as at 1 January 2021
Fund balances as at 31 December 2021
3,804
326
-
4,130

31
1,426
564
1,613
153
3,787
343
968
-
1,311
16,395
17,706

-
-
-
-


-
-
1
12
-
13
(13)
-
-
(13)
97
84


3,804

326

-
4,130




31


1,426

565

1,625

153
3,800


330

968

-

1,298



16,492


17,790		 -
4,087
365
-

4,452
22
1,487
455
1,444
179

3,587

865
464
(514)

815
15,677

16,492

All the above results are derived from continuing activities. All gains and losses in the year are included above; accordingly, a statement of total realised gains and losses and not been prepared. The accounting policies on page 29 to 31 and the notes on pages 32 to 43 form part of these accounts.

26

4 Balance sheet (Company Number: 323575)

As at 31 December 2021

Note Unrestricted
funds
£’000		 Restricted
funds
£’000		 2021
Total
£’000		 2020
Total
£’000
Fixed assets
Tangible assets
7.8
Investment Property
7.9
Investments
7.10
Current assets
Debtors
7.11
Cash & cash equivalents
7.16
Liabilities
Creditors falling due within one year
7.12
Net current assets
Net assets
Unrestricted funds - General
7.14
Designated funds
7.14
Restricted funds
7.14
Total funds
1,811
2,900

11,620
16,331


148

5,080
5,228
(3,853)
1,375
17,706

2,970

14,736

-
17,706

-
-
-
-


-
84
84


-
84

84
-
-
84
84

1,811

2,900

11,620
16,331



148

5,164
5,312
(3,853)
1,459

17,790


2,970

14,736

84

17,790		 1,926
2,900
9,524

14,350
458
5,791

6,249

(4,107)

2,142

16,492
3,497
12,898
97

16,492

The accounting policies on page 29 and the notes on pages 32 form part of these accounts.

This report was approved and authorised for issue by the Trustees of The Physiological Society and signed on this 24th day of June 2022 on their behalf by:

David Patterson

President

Frank Sengpiel Honorary Treasurer

27

5 Statement of cash flows

For the year ended 31 December 2021

Note 2021
Total
£’000		 2020
Total
£’000
Cash flows from operating activities:
7.15
Cash flows from investing activities:
Dividends and interest
Purchase of investments
Movement in cash awaiting investment
Proceeds from sale of investments
Net cash provided by investing activities
Change in cash and cash equivalents in the year
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year		 176
326
(12,700)
177
11,394
(803)
(627)
5,791
5,164		 722
365
(2,340)
1,093
2,140
1,258
1,980
3,811
5,791
01/01/2020
£’000		 Cashflows
£’000		 31/12/2021
£’000
Analysis of Net Debt
Cash at Bank
Cash held by investment manager
Total		 5,791
267
6,058
(627)

(176)
(803)
5,164

91
5,255

28

Accounting policies

For the year ended 31 December 2021

Basis of preparation of accounts

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102), second edition of the Charities SORP (published October 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006. The Physiological Society meets the definition of a public benefit entity under FRS102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy notes.

Going concern

Given the level of free reserves available at the year end and its publishing contract with John Wiley & Sons Limited, and after considering future I&E and cashflow forecasts, the Trustees consider that The Society has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the financial statements have been prepared on a going concern basis. The trustees have assessed whether the use of the going concern assumption is appropriate in preparing these financial statements. The trustees have made this assessment in respect to a period of one year from the date of approval of these financial statements and have considered the impact of the coronavirus pandemic on the charity’s operations. In particular the trustees have considered the charities forecasts and projections and have taken account of pressures on publishing and investment income. After making enquiries the trustees have concluded that there is a reasonable expectation that the charity has adequate resources to continue in operational existence for the foreseeable future. The charity therefore continues to adopt the going concern basis in preparing its financial statements.

Judgements and estimates

Judgements made by the Trustees, in the application of these accounting policies that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are deemed to be in relation to the valuation of both listed investments (Note 7.10) and investment properties (Note 7.9) and are discussed below.

Fund accounting

Unrestricted funds are available for use at the discretion of the Trustees in furtherance of the charitable objects of The Society. Restricted income funds are funds subject to specific restrictions imposed by donors or by the purpose of the appeal, as per note 7.14.

Income

All income is recognised once The Society has entitlement to income, it is probable that income will be received, and the amount of income receivable can be measured reliably. This applies to income from investments, publishing, events, membership subscriptions and other income, which are all recognised on a receivable basis. Income received in advance, such as membership and publication income, is deferred on the balance sheet to future periods.

Expenditure

Expenditure is recognised on an accrual basis as a liability is incurred. Expenditure includes any irrecoverable VAT, and is reported as part of the expenditure to which it relates. Raising funds consist of investment management fees and certain legal and professional fees. Charitable expenditure comprises those costs incurred by The Society in the delivery of its activities and services for its beneficiaries. It includes both costs that can be allocated directly

29

to such activities and those costs of an indirect nature necessary to support them. Governance costs include those costs associated with meeting the constitutional and statutory requirements of The Society. These costs include the audit and legal fees, costs linked to the strategic management of The Society together with an apportionment of overhead and support costs. Governance costs are included within support costs, apportioned. All costs are allocated between the expenditure categories of the accounts on a basis designed to reflect the use of the resource. Costs relating to a particular activity are allocated directly; others are apportioned on the basis of time spent.

Grants payable

Expenditure on grants is recorded once The Society has made an unconditional commitment to pay the grant and this is communicated to the beneficiary or the grant has been paid, whichever is the earlier. The Society has not made any grant commitments of more than one year. Fixed assets Tangible fixed assets are stated at cost less accumulated depreciation. Minor additions to fixed assets, defined as those costing less than £2,000 each, are expensed in the year in which the cost is incurred. Depreciation is provided to write off the cost of assets by equal monthly instalments over their estimated useful lives as follows:

Investment Property

Investment properties are included in the balance sheet at fair value and are not depreciated. Any change in fair value is recognised in the statement of financial activities. The valuation method used to determine fair value will be stated in the notes to the accounts. In 2018, there was a change in the use of property, and so a proportion of Tangible fixed assets was re-classified as investment property and revalued.

Listed investments

Investments listed on a recognised stock exchange are stated at mid-market value at the balance sheet date.

Realised gains and losses

All gains and losses are taken to the Statement of Financial Activities as they arise. Realised gains and losses on investments are calculated as the difference between sale proceeds and opening market value (purchase date if later). Unrealised gains and losses are calculated as the difference between the market value at the year end and opening market value (purchase date if later).

Debtors

Trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

Cash &cash equivalents

Cash at bank and cash in hand includes cash and short term highly liquid investments.

Creditors and provisions

Creditors and provisions are recognised where The Society has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

Employee short term benefits

Short term benefits including holiday pay are recognised as an expense in the period in which the service is received.

30

Employee termination benefits

Termination benefits are accounted for on an accruals basis and in line with FRS 102.

Pensions

The Society operates defined contribution pension scheme. The assets of which are held separately from those of The Society in independently administered funds. The pension cost charge represents contributions payable by The Society, which has no other liability under the scheme.

31

6 Notes to the financial statements

For the year ended 31 December 2021

6.1 Income from charitable activities

Unrestricted Restricted 2021
Total
£’000		 2020
Total
£’000
Publications
Events
Membership subscriptions		 3,629
26
149

3,804		 -
-
-
-
3,629

26

149


3,804		 4,023
3
61
4,087

Prior year income from charitable activities

Unrestricted Restricted 2020
Total
£’000
Publications
Events
Membership subscriptions		 4,023
3
61		 -
-
-
-
4,023

3

61

4,087
4,087

The Physiological Society is a registered charity and, therefore, is not liable to income tax or corporation tax on income derived from and applied to its charitable activities, as it falls within the various exemptions available to registered charities.

6.2 Income from investments

2021
Total
£’000		 2020
Total
£’000
Dividend income

Investment property rental

Bank deposit interest

 139
186
1		 151
204
10

365
326

32

Notes to the financial statements (cont.)

For the year ended 31 December 2021

6.3 Analysis of expenditure

Grants
costs
£‘000		 Other
direct
costs
£’000		 Support &
governance
costs
£’000		 2021
Total
£’000		 2020
Total
£’000
Raising funds:
Investment management costs
Charitable activities:
Publications
Events
Engagement
Other		 -
-
-
208
-
208		 31
1,166
414

965
83
2,659		 -
260
151
452
70
933
31

1,426

565

1,625
153		 22
1,487
455
1,444
179
3,587
3,800

Prior year Analysis of expenditure

Grants
costs
£‘000		 Other
direct
costs
£’000		 Support &
governance
costs
£’000		 2020
Total
£’000
Raising funds:
Investment management costs
Charitable activities:
Publications
Events
Engagement
Other		 -
-
-
177
-
177		 22
1,232
291
815
92
2,452		 -
255
164
452
87
958		 22
1,487
455
1,444
179
3,587

Charitable expenditure was £3,769,000 (2020: £3,565,000) of which £3,756,000 was unrestricted (2020: £3,535,000) and £13,000 was restricted (2020: £30,000).

33

Notes to the financial statements (cont.) For the year ended 31 December 2021

6.4 Analysis of support costs

The Society initially identifies the costs of its support functions. It then identifies those costs that relate to the governance function. Having identified its governance costs, the remaining support costs together with the governance costs are apportioned between the primary activities undertaken (see note 7.3) in the year. The Trustees have decided to meet all the governance costs from unrestricted fund and so no allocation is made to restricted fund for any governance related costs. Refer to the table below for the basis for apportionment and the analysis of support and governance costs.

General
support
£‘000		 Governance
Support
£’000		 2021
Total
£’000		 2020
Total
£’000
Basis of
apportionment
Staff costs
Employee-related costs
Premises – office
Technology
Insurance
Irrecoverable VAT
Financial costs
Depreciation
AGM, Council and committee
expenses
Auditors remuneration
Legal and professional		 125
36
136
107
22
7
6
103

51
8
119
720		 138
5
17
13
3
1
1
13
6
1
15
213
263
41
153
120
25
8
7
116
57
9
134
933		 319
Allocated on time
57
Allocated on time
150
Allocated on time
114
Allocated on time
25
Allocated on time
15
Allocated on time
6
Allocated on time
126
Allocated on time
50
Governance
9
Governance
87
Governance
958

Prior year analysis of support and governance costs

General
support
£‘000		 Governanc
e function
£’000		 2020
Total
£’000
Staff costs
Employee-related costs
Premises – office
Technology
Insurance
Irrecoverable VAT
Financial costs
Depreciation
AGM, Council and committee
expenses
Auditors remuneration
Legal and professional		 173
50
131
100
22
13
5
110

44
8
76
732
146

7

19

14

3

2

1

16
6

1

11
226
319
57
150
114
25
15
6
126
50
9
87
958

34

Notes to the financial statements (cont.)

For the year ended 31 December 2021

6.5 Analysis of grants

2021
Number		 2020
Number		 2021
Total
£’000		 2020
Total
£’000
Travel grants
Research grants
Summer studentships
Public engagement grants
Departmental seminar scheme
The David Jordan Teaching Awards
The Rob Clarke Awards
Grants written back in year		 6
9
30
7
6
3
1
(23)

39		 6
9
30
7
6
3
-
(23)
38		 14

74

50
48
27
15
1

(21)

208		 5
92
43
26
3
27
-
(18)

178

6.6 Staff costs

2021
Total
£’000		 2020
Total
£’000
Gross wages and salaries

Social security costs

Pension costs

 1,145
117
109
1,371		 1,108
118
111

1,337

Included in the above were sums relating to redundancy or termination payments totalling £10,791 (2020: £nil). There were no unpaid sums at the year end.

The key management personnel of The Society comprises the board of Trustees, the Chief Executive and all other members of the Senior Management Team. Trustees received no remuneration in respect of their services to The Society. The total employment benefits including employer pension contributions of the key management personnel were £547,545 (2020: £536,000).

The average number of persons employed including part-time and agency staff, calculated on a average head-count basis analysed by activity, was:

2021
Number		 2020
Number
CEO

Scientific programmes

Operations

Professional development & engagement

Policy & communications

 1.0
8.8
4.0
3.6
7.8
25.2		 1.0
9.4
4.6
3.0
7.4

25.4

35

Notes to the financial statements (cont.)

For the year ended 31 December 2021

Emoluments of employees

The number of employees of The Physiological Society whose emoluments fell within the following bands:

2021
Number		 2020
Number
£60,001 – £70,000

£70,001 – £80,000

£80,001 – £90,000

£90,001 – £100,000

£100,001 – £120,000

£120,001 – £130,000

£130,001 – £140,000

£140,001 – £150,000

 2
-
1
-
-
1
-
-
4		 1
-
1
-
-
1
-
-
3

The total pension contributions for the above higher paid staff were £38,659 (2020: £28,780).

6.7 Related party transactions

All Trustees are Members of The Physiological Society. The Trustees received no remuneration in respect of their services to The Society but certain host departments received academic support amounting to £40,721 (2020: £38,000) and Trustees (12 in total) incurred expenses totalling £3,567 (2020: 12, £14,000).

Academic support

The following Trustees’ institutions received academic support payments during the year:

Trustee 2021
£’000		 2020
£’000
D. Atwell
University College London
D Baines
St George's, University of London
S Deuchars
University of Leeds
L Green
University of Southampton
B Lumb
University of Bristol
F Sengpiel
University of Cardiff
D Paterson
University of Oxford		 7
3
7
3
-
7
14
41		 -
3
7
-
14
7
7
38

Editorial support

During the year, payments totalling £115,101 (2020: £125,022) were made to senior journal editors in respect of honoraria and institutional editorial support.

Travel Grants

One trustee was awarded a travel grant totalling £700 (2020: Nil)

36

Notes to the financial statements (cont.)

For the year ended 31 December 2021

6.8 Tangible fixed assets

Freehold
property
£’000		 Freehold
improvements
£’000		 Fixtures,
fittings &
equipment
£’000		 Total
£’000
Cost:
At 1 January 2021
Additions
Disposals
At 31 December 2021
Accumulated depreciation
At 1 January 2021
Charge for the year
Disposals
At 31 December 2021
Net book value at 31 December 2021
Net book value at 31 December 2020
1,937
-
(19)
1,918


298
39
(15)
322

1,596

1,639

467
-
-
467
251
31
-
282
185
216
405
-
-
405
334
41
-
375

30

71		 2,809
-
**(19) **

2,790
883
111
(15)

979

1,811

1,926

6.9 Investment properties

2021
Total
£’000		 2020
Total
£’000
Fair value at the start of the year
Transfer from Tangible Fixed Assets
Revaluation during the year
Fair value at the end of the year		 2,900
-
-
2,900		 3,414
-
(514)

2,900

The trustees requested a desktop revaluation (by Charlie Browne (Daniel Watney LLP)) in March 2022 and no adjustment was required as the value was not materially different.

37

Notes to the financial statements (cont.)

For the year ended 31 December 2021

6.10 Investments

2021
Total
£’000		 2020
Total
£’000
Analysis of investments at 31 December by category of holding
Market value of listed investments
Cash held as part of the portfolio
Analysis of investments at 31 December by location
Investments held in the UK
Investments held outside the UK
Analysis of movements in investments
Market value at 1 January 2021
Additions
Opening market value of disposals in the year (proceeds: £11,394k (2020:
£3,157k))
Net unrealised gains
Market value at 31 December 2021
Historic cost at the year end
11,529
91
11,620
5,382
6,238
11,620
9,257
12,700
(10,580)
152
11,529

11,461		 9,257
267
9,524
3,319
6,205
9,524
8,598
2,340
(2,327)
645
9,257
7,735

The Trustees do not consider any particular investment holding to be material in the context of the investment portfolio.

6.11 Debtors

2021
Total
£’000		 2020
Total
£’000
Trade debtors
Other debtors
Prepayments
Accrued income		 2
-
106
40
148		 4
155
241
58

458

6.12 Creditors

2021
Total
£’000		 2020
Total
£’000
Trade creditors
Other taxes and social security costs
Other creditors
Accruals
Deferred income		 167
521
223
128
2,814
3,853		 222
565
68
172
3,080

4,107

38

Notes to the financial statements (cont.)

For the year ended 31 December 2021

6.13 Deferred income

2021
Total
£’000		 2020
Total
£’000
At January 2021
Amount released in the year
Amount deferred in the year
At 31 December 2021		 3,080
(3,080)
2,815
2,815		 3,006
(3,006)
3,080

3,080

Deferred income is made up of membership and publishing income received in advance.

6.14 Movement in funds

Opening
balance
£'000

3,497
12,898
10
4,823
500
5,600
1,100
865
16,395
42
6
19
14
16
97
16,492
Income
£'000		 Expenditure
£'000		 Net
gains
£'000

968
-
-
-
-
-
-
-
968
-
-
-
-
-
-
968		 Transfers
£'000		 Closing
balance
£'000
Unrestricted funds

General funds
Designated funds
Bannister Legacy
HHH Property Fund
HHH Maintenance Fund
Continuity Fund
Strategic Investment Fund
COVID fund
Total unrestricted funds
Restricted funds
Bayliss and Starling Society
fund
David Jordan international
teaching fellowship fund
Paton prize bursary fund
Inclusion and Diversity
fund
Other restricted funds:
Total restricted funds
Total funds
4,130

-

-

-

-

-

-

-

4,130


-
-
-
-
-
-

4,130		 (3,613)
(174)
-
(97)
(22)
-
(25)
(30)
(3,787)
(1)
(6)
(1)
(5)
-
(13)
(3,800)


(2,012)

2,012

-

(45)

22

1,500

-

535
-



-

-

-

-

-
-


-		 2,970

14,736
10
4,681
500
7,100
1,075
1,370

17,706
41
(0)
18
9
16

84

17,790

39

Notes to the financial statements (cont.)

For the year ended 31 December 2021

Unrealised gains included above: 2021
Total
£’000		 2020
Total
£’000
Unrealised gains included above:
On listed investments
On investment property
Total unrealised gains at 31 December 21:
Reconciliation of movements in unrealised gains
Unrealised gains at January 2021
Difference between historical cost and realised gains/losses on listed investments
and the actual realised gains/losses there on calculated on the revalued amounts
Unrealised (losses) gains on listed investments arising in the year
Revaluation of investment property in the year
Market value at 31 December 2021
160
994
1,154
2,783
(1,781)
152
-
1,154		 1,789
994
2,783
2,929
(277)
645
(514)
2,783

Prior Year Movement in funds

Opening
balance
£'000

2,878
12,672
10
5,462
500
5,600
1,100
-
15,550
42
6
19

44
16
127
15,677
Income
£'000		 Expenditure
£'000		 Net
gains
£'000

464
(514)
-
(514)
-
-
-
-
(50)
-
-
-
-
-
-
(50)		 Transfers
£'000		 Closing
balance
£'000
Unrestricted funds

General funds
Designated funds
Bannister Legacy
HHH Property Fund
HHH Maintenance Fund
Continuity Fund
Strategic Investment Fund
COVID fund
Total unrestricted funds
Restricted funds
Bayliss and Starling Society
fund
David Jordan international
teaching fellowship fund
Paton prize bursary fund
Inclusion and Diversity fund
Other restricted funds:
Total restricted funds
Total funds

4,452


-

-

-

-

-

-

-

4,452



-

-

-

-

-

-


4,452		 (3,432)
(125)
-
(125)
-
-
-
-
(3,557)
-
-
-
(30)
-
(30)
(3,587)


(865)

865






865
-

-

-

-

-

-

-
-
3,497

12,898
10
4,823
500
5,600
1,100
865

16,395

42

6

19

14

16

97

16,492

40

Notes to the financial statements (cont.) For the year ended 31 December 2021

Designated funds

The Society has designated a HHH Property Fund (£4,681,000) comprising the carrying value of The Society's freehold property in London, currently split between tangible fixed assets (held at depreciated cost) and investment property (held at market value), and as such it is not available to meet the general running costs of The Society.

As well as non-property fixed assets, £0.5m has been designated to a HHH Maintenance Fund to recognise essential future spending associated with the maintenance of the freehold property.

The major exposure in The Society's income portfolio is its dependence on publishing income, which represents around 88% of annual turnover. The high commitment to expenditure allied to substantial exposure to a single source of income is a major risk to the organisation. The Society has designated a Continuity Fund (£7.1m), an increase of £1.5 million on the previous year, to mitigate this risk and provide medium-term stability. The Continuity Fund ensures sufficient time to transition to alternative operating models, in an orderly fashion, should publishing income collapse. The Continuity Fund represents 30 months operating costs excluding publishing, grants expenditure and one-off costs. These are around 40% staff costs that cannot be immediately adjusted in a new operating environment.

The Strategic Investment Fund will be allocated to new activities and specific major projects specified in the 201822 Strategic Plan, for example, an Innovation Fund to support sustainability and income diversification, to which a sum of £1,100,000 has been designated. In 2020 disruption of plans due to the COVID-19 pandemic meant that that The Society did not allocate funds from the Strategic Investment Fund to finance new activities. However, during 2021 the first £25k was allocated from the fund and the Trustees are considering how this fund will be utilised in the longer term.

The Society had designated the surplus arising in 2020 because of the impact of the COVID-19 pandemic on the planned expenditure for the year to a COVID-19 fund. As a result of the pandemic continuing throughout 2021 the result for this year has been added to the designated fund. As restrictions lift and The Society returns to "greater normality" the COVID-19 fund will be used to enhance the visibility of physiology in an inclusive and sustainable manner by focusing on key areas as set out in the Trustee Annual Report.

Restricted funds

In 2014, The Society received assets from the Bayliss and Starling totalling £147,000 of which £50,000 was restricted to the Bayliss–Starling Prize Lecture and Focussed Symposium Grant, for the period of ten years from 2016.

In 2008, The Society received a bequest from the estate of Professor David Jordan. As a fitting tribute to his memory, the Trustees proposed a new scheme, which commenced in 2010, that will help support physiology teaching worldwide. Funds of up to £10,000 are awarded per year. The fund was fully utilised in 2021.

The Paton Prize Bursary Fund awards bursaries to promote the study of the history of major concepts that have shaped modern physiology. The fund totals £18,000.

41

Notes to the financial statements (cont.) For the year ended 31 December 2021

Restricted funds (cont)

In 2018, The Society was gifted the net assets, totalling £44,000, of The Benevolent Fund of The Physiological Society. This donation has been allocated to a restricted Inclusion and Diversity fund and will support individuals that have contributed to the advancement of physiology, and/or their dependents, either by promoting diversity and inclusivity in activities aligned with The Society’s objectives or supporting those who are in necessitous circumstances. The balance on the fund at 31 December 2021 is £9,000.

There are three other restricted funds: the Sharpey-Schafer Prize Lecture Fund, the Otto Hutter Physiology Teaching Prize Fund and the Mike Rennie Physiology Communication Prize Fund.

There is one designated fund: the R Jean Banister Prize Lecture. Further details can be found at - www.physoc.org/grants prizes

.

6.15 Reconciliation of net movement in funds to net cash flow from operating activities

2021
Total
£’000		 2020
Total
£’000
Net movement in funds
(gains)/losses on investments
Losses/(gains) on Investment Property
Revaluation
Depreciation charges
(Loss)/profit on disposal of fixed assets
Decrease/(increase) in debtors
(Decrease)/increase in creditors
Dividends and interest
Net cash used in operating activities		 1,298
(968)
-
112
4
310
(254)
(326)
176		 815
(464)
514
122
4
(90)
186
(365)

722

6.16 Analysis of cash and cash equivalents

2021
Total
£’000		 2020
Total
£’000
Cash in hand 5,164
5,164
5,791

5,791

42

Notes to the financial statements (cont.)

For the year ended 31 December 2021

6.17 Comparative SoFA per FRS 102 (SORP 2015)

Unrestricted
funds
£’000		 Restricted
funds
£’000		 2020
Total
£’000
Income from:
Donations
Charitable activities
Investments
Other trading activities
Total
Expenditure on:
Raising funds:
Investment management costs
Charitable activities:
Publications
Events
Engagement
Other
Total
Net (expenditure)/income before gains on
investments
Net (losses) / gains on investments
(Losses) / gains on revaluation of investment
property
Net movement in funds
Reconciliation of funds
Fund balances as at 1 January 2020
Fund balances as at 31 December 2020
-
4,087
365
-
4,452

22
1,487
455
1,414
179
3,557
895
464
(514)
845
15,550
16,395
-
-
-
-
-

-
-
-
30
-
30
(30)
-
-
(30)
127
97
-

4,087

365

-

4,452

22

1,487

455

1,444

179

3,587

865

464

(514)

815

15,677

16,492

43

7 Standing information

Registered Office

Hodgkin Huxley House, 30 Farringdon Lane, London EC1R 3AW

Trustees

David Attwell Deborah Baines (until November 2021) Daniel Brayson John Cripps Sue Deuchars (until November 2021) Heidi de Wet (from November 2021) Lucy Green Charlotte Haigh (until November 2021) Catherine Hall (from November 2021) Áine Kelly (from November 2021) Raheela Khan Paul McLoughlin (from November 2021) David Paterson Frank Sengpiel Elizabeth Sheader (until November 2021) Matt Taylor Mike Tipton (from November 2021) Stefan Trapp (until November 2021)

Key management personnel

Dariel Burdass, Chief Executive Sally Howells, Publisher Andrew Mackenzie, Head of Strategy, Policy and Communications Liam McKay, Head of Operations Simon Rallison, Director of Scientific Programmes Chrissy Stokes, Head of Professional Development and Engagement

Bankers

Royal Bank of Scotland, Child & Co, 1 Fleet Street, London EC4Y 1BD

Solicitors

BDB Pitmans LLP, 50 Broadway, Westminster, London SW1H 0BL

Auditors

Buzzacott, St Peters House, 130 Wood St, London EC2V 6DL

Investment fund managers

Rathbone Greenbank Investments, 8 Finsbury Circus, London EC2M 7AZ

44

020 7269 5710 The 2 Physiological Society www.physoc.org

The ? Physiological - Society 46