**REGISTERED COMPANY NUMBER: 01914825 (England and Wales) REGISTERED CHARITY NUMBER: 292569**
## **REPORT OF THE TRUSTEES AND**
## **FINANCIAL STATEMENTS**
## **FOR THE YEAR ENDED 31 OCTOBER 2021**
## **FOR**
## **ARTHRITIS ACTION**
LMDB Limited t/a LMDB Accountants Statutory Auditors Railview Lofts 19c Commercial Road Eastbourne East Sussex BN21 3XE
**ARTHRITIS ACTION**
**CONTENTS OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2021**
||**Page**|
|---|---|
|**Report of the Trustees**|1 to 11|
|**Report of the Independent Auditors**|12 to 14|
|**Statement of Financial Activities**|15|
|**Statement of Financial Position**|16 to 17|
|**Statement of Cash Flows**|18|
|**Notes to the Statement of Cash Flows**|19|
|**Notes to the Financial Statements**|20 to 33|
**ARTHRITIS ACTION**
## **REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 OCTOBER 2021**
The trustees who are also directors of the charity for the purposes of the Companies Act 2006, present their report with the financial statements of the charity for the year ended 31 October 2021. The trustees have adopted the provisions of 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) (effective 1 January 2019).
## **REFERENCE AND ADMINISTRATIVE DETAILS Registered Company number**
01914825 (England and Wales)
## **Registered Charity number**
292569
## **Registered office**
One Upperton Gardens Eastbourne East Sussex BN21 2AA
## **Trustees**
Mr R H Nye – Chair Mr G C Allen Mr R Badiani Mr C Beever Ms A C Godfrey Mrs K Hoban Ms C J Jones Ms S E Jones Mr T O McLaughlan Mr D G S Torjussen-Proctor Mrs D M C Rose Prof S A Vickerstaff Mrs P M Woodhouse
Appointed 29 April 2021 Appointed 26 November 2020 Resigned 7 April 2021
Appointed 7 February 2022 Appointed 14 March 2022
Appointed 8 February 2021 Resigned 4 February 2021
## **Chief Executive**
Miss S Irwin
## **Company Secretary**
Mr G Weir
## **Auditors**
## **Accountants**
LMDB Limited Breeze & Associates t/a LMDB Accountants Limited Statutory Auditors 5 Cornfield Terrace Railview Lofts Eastbourne 19c Commercial Road East Sussex Eastbourne, East BN21 4NN Sussex, BN21 3XE
**Solicitors Bankers Financial Advisors** So Legal NatWest Schroders 15 Gildredge Rd Eastbourne Branch 1 London Wall Eastbourne 96 Terminus Road Place East Sussex East Sussex London BN21 4RB BN21 3LX EC2Y 5AU
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**ARTHRITIS ACTION**
## **REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 OCTOBER 2021**
## **TRUSTEES' REPORT**
## Structure
Arthritis Action was set up in 1942 and is a charitable company limited by guarantee as defined by the Companies Act 2006. It is governed by its Articles of Association, which were last amended on 13 June 2019.
## **Trustees**
The Trustees who served on the Board of Trustees during the year are shown on page 1. The Trustees did not receive any remuneration in their capacity as Trustees during the year ended 31 October 2021 (2020: nil); however, they have the option of being reimbursed for costs incurred in attending meetings on behalf of Arthritis Action.
In accordance with Article 8.5 of the Articles of Association the Board of Trustees appointed Thomas McLaughlan as a Trustee on 7 February 2022 and appointed Daniel Torjussen-Proctor as a Trustee on 14 March 2022. They shall be eligible for election at the next Annual General Meeting.
## **Objects and Key Aims**
Our vision is for people to live active lives, free from the impact of arthritis. To achieve this we aim to:-
- Help and support people with arthritis through the provision of the best available evidence-based approaches and techniques for managing arthritis;
- Monitor arthritis related developments and initiatives, and promote efforts to gain a better understanding of arthritis and its impact on people's lives; and
- Raise awareness of arthritis and disseminate evidence-based information about all matters relating to the condition
## **Overview of Activities**
During 2021, the Charity spent £825,184 (2020: £852,794) on delivering its self-management health programme and £150,091(2020: £133,542) on research Member-related grants.
Arthritis Action is the UK charity giving hands-on, practical help to improve the quality of life of people affected by arthritis. We offer an integrated self-management approach, which looks at both the physical and mental health impact of living with arthritis. Whilst we are a membership charity, we have transformed our services to benefit our membership and wider communities affected by arthritis and other musculoskeletal (MSK) conditions across the UK. As one size does not fit all, we will continue to develop and offer a range of services so that people can find what works best for them.
Although over ten million people live with arthritis in the UK, each person is unique in the way they manage their symptoms. Our approach enables people to choose the techniques that work for them best. Our self-management approach includes: healthy eating and nutritional consultations; access to clinical appointments with our network of osteopaths, physiotherapists, and acupuncturists; mental health resources; pain management techniques; Groups; exercise advice and resources; and a personalised pathway for goal setting and self-management support, to help people take control of their arthritis, manage the pain it can cause, and enjoy life to the full. We are pleased that 95% of our Members are satisfied with our services, based on our survey in 2021.
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**ARTHRITIS ACTION**
## **REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 OCTOBER 2021**
There have been many challenges to overcome in 2021 with the ongoing impact of Covid-19, and we missed running our usual face-to-face Arthritis Action Groups and Self-Management Events in England. It was important for us to continue supporting people, especially with many feeling more isolated at home. We took the opportunity in 2020 to trial new online services and we are proud to have moved our Groups and events online very quickly. This enabled attendees to continue to receive peer support online and we continued to build on this in 2021. Over 240 Group meetings and presentations were organised this past year, spread over 10 different regions and 23 locations. Our Groups and presentations were attended by 3,610 people, including patients, carers, community organisations, corporate staff, healthcare professionals and diverse communities. We have also provided much-needed telephone support to more than 3,000 people and introduced a new volunteer-led telephone service, called Arthritis Action Connect, to link members with one another to offer peer support. The new online exercise class was a big success, so we continued to offer this service in 2021. We will continue to develop new ways of working, featuring both online and in-person services, to share self-management information and support people's physical health and mental wellbeing.
We have continued to build on the success of our existing services. Our clinical support service continues to be useful in helping people to manage their pain and to see a clinician without delay, although the service was used less this year with many members self-isolating or shielding through 2021. Our nutritional consultations service has also been much sought-after. Our Registered Dietitian conducted 75 consultations, as well as giving over 100 people additional support outside of the more structured consultations. This helped people better manage their symptoms and meet their weight and dietary goals. We are pleased that 92% of our Members are satisfied or very satisfied with the nutrition and weight management service, with three in four saying the service brought them closer to reaching their weight and nutritional goals. One hundred percent also said they are more knowledgeable about their arthritis and that their symptoms have improved. The Personalised Member Pathway has given members additional support during the pandemic, and we are pleased that 100% of members agreed that the Pathway has improved their confidence to self-manage their arthritis.
In 2021 we hired a new staff member to conduct research on how Arthritis Action can best support young adults living with arthritis. We gained valuable insight through surveys and focus groups, and launched a new Young Adults Hub on our website.
We have extended our networks and partnerships across the UK, and delivered a variety of presentations online throughout the year. These have helped to spread the knowledge and raise awareness of our self-management approach amongst people living with arthritis and other long-term conditions.
We have continued to proactively publicise the activities of Arthritis Action, and estimate that we have reached almost 34 million people through PR activities, and national and local press coverage. Our social media activity reached 1.7 million people across all our channels. Our website generated 311,000 visits with 606,000 page views, which is a 50% increase from 2020.
The Trustees have also paid due regard to the Charity Commission's guidance on public benefit and its general guidance when deciding what activities Arthritis Action should undertake.
## **Self-Management Approach**
We are the UK charity giving hands-on, practical help to improve the quality of life for people affected by arthritis. We offer an integrated self-management approach to help people with arthritis gain the knowledge and confidence to manage their condition themselves, and live life to the full.
We tailor our self-management approach to meet individual needs, and our approach encompasses the following services:-
- Personalised Member Pathway, a service that helps members access the services that meet their needs;
- Nutritional and weight management consultations with our registered Dietitian;
- Arthritis Action Groups in locations across the country;
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**ARTHRITIS ACTION**
## **REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 OCTOBER 2021**
- Self-management educational events to learn about various techniques for managing both the physical and mental aspects of arthritis;
- Arthritis Action Connect telephone service;
- Online Exercise sessions for rehabilitation or for people who have not exercised for a long period of time;
- Free, easy to follow online self-management videos;
- Quarterly webinars with expert speakers, covering a wide range of topics;
- Identification of the most suitable exercises for people with arthritis and other musculoskeletal conditions;
- Subsidised clinical appointments with our registered Osteopaths, Physiotherapists and Acupuncturists; and
- Factsheets, our Members' magazine, E-newsletters and informational leaflets on a variety of topics including self-management, physical activity, and mental well-being.
We are proud to have continued to offer all of these services throughout the Covid-19 pandemic, running our Groups and presentations to external audiences online. We also ran our popular Self-Management Events online and these events were well attended by our members and the general public. This clearly demonstrates that people living with arthritis want to gain a significant benefit from learning about managing their arthritis on a day-to-day basis.
## **Governance and Management**
Members of the Board of Trustees are responsible, on behalf of their fellow Members and people living with arthritis generally, for the good governance of the Charity. Board Members set and review the Charity's strategic objectives on a regular basis and establish policy for staff to implement in a manner that is in keeping with Arthritis Action's objectives.
The Articles of Association permit the appointment of up to 15 Trustees, one of whom should be the Chair of the Board of Trustees. The Chair is elected by the Trustees for a period of three years and can be re-elected by mutual consent. All Trustees are elected by members at the Charity's Annual General Meeting and are appointed for a period of three years. In accordance with the Articles of Association, new Trustees can be appointed by the existing Trustees during the year, but must then stand for election by the members at the next Annual General Meeting. Trustees can put themselves forward for re-election at the end of each three year period.
The Board of Trustees is committed to continually improving its governance of the Charity, and meets as a whole on a minimum of four occasions in each calendar year. For efficient operational purposes, the Board of Trustees is also sub-divided into two working Committees - the Finance & Risk Committee and the Remuneration & Nominations Committee.
The Finance & Risk Committee ("FRC") comprises three Trustees as well as the Chief Executive and the Company Secretary. The purpose of the FRC is to oversee and brief the Board of Trustees on all aspects of financial, budgetary and risk management. In particular, the FRC:
- Reviews the management accounts;
- Oversees the preparation of the annual budget;
- Monitors the performance of the Charity's Investments;
- Formulates the Charity's Risk Management Policy;
- Oversees the preparation of the annual financial statements;
- Monitors the Charity's Information Technology requirements;
- Oversees the process of selection or re-selection of an Auditor.
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The FRC ensures that effective systems of accounting and internal control are established and maintained, and that the Board of Trustees is aware of any matters that might have a significant impact on the financial condition or affairs of the Charity.
The Remuneration & Nominations Committee ("RNC") comprises four Trustees and the Chief Executive. The main purpose of the RNC is to oversee and brief the Board of Trustees on all aspects of Human Resources. It is also required to advise and make recommendations to the Board of Trustees with regard to appointments to the Board, its Committees and Advisory Groups, and to ensure that the skills and experience required for these roles are identified.
The RNC considers the appointment of all staff for Arthritis Action following presentation of a formal proposal for recruitment by the Chief Executive. The RNC then recommends agreed proposals to the Board for approval. Any changes in organisation structure are similarly proposed by the Chief Executive to the RNC before being submitted to the Board of Trustees for approval.
The RNC regularly appraises the employee remuneration structure, and makes recommendations to the Board regarding salary reviews and any other proposals which affect pay, benefits and conditions. The RNC also leads on appraising the Chief Executive's performance and salary.
The RNC is also responsible for ensuring that all employment policies and practices comply with current UK Employment Law, and regularly reviews HR strategy and the implementation of HR policies & practices. Any significant changes to HR policies & practices are proposed for approval by the Board.
## **Trustee Induction**
On appointment to the Board of Trustees, each Trustee completes a "Register of Interests" and receives appropriate induction. Further training needs are met, both individually and collectively, through regular Board training sessions and by Trustees attending training days conducted by external training providers as and when appropriate.
## **Professional Services**
During the year ended 31 October 2021, Arthritis Action retained the professional services of Breeze & Associates, Chartered Accountants, to ensure effective segregation of accounting duties. They were responsible for maintaining the financial records, while the Company Secretary was responsible for statutory and other financial matters. The names and addresses of organisations which provide banking services and professional advice to the Charity are detailed on page 1 of this report.
## **Staff and Trustee Changes**
Arthritis Action continues to broaden its organisation structure to cope with increased activity and the development of more Arthritis Action Groups, in line with its strategic objectives. We hired a member of staff in April 2021 on a six month contract through the Government's Kickstart Scheme and extended his contract for a further six months to research the needs of young adults living with arthritis and to work with the team to adapt content and develop services for young adults. There are now 18 full and part time members of staff.
The Charity has a multi skilled Board of Trustees which provides a pool of specialist knowledge that the Executive Management Team and the Charity as a whole can call upon for help and advice, and which is capable of continuing the development of Arthritis Action as a leading arthritis charity in the UK.
Anne Godfrey has announced that she does not intend to seek re-election to the Board of Trustees at the end of her current three-year term of office in June. The Trustees and Staff would like to thank Anne for her considerable support and guidance over the past seven years.
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Tom McLaughlan joined the Board of Trustees in February 2022. Tom enjoyed a 33 year career, working in government relations and broader communications in the public, private and third sector in the UK and Belgium along with a spell as a senior diplomat in Japan. He was a managing director at Accenture for 15 years and for the last four he led the European government relations function. He is a Trustee of Epilepsy Research UK and The Orpheus Centre Trust, an independent specialist college that increases the confidence and skills of young disabled adults through the performing arts and works as a crisis volunteer at Shout. Tom's interest in arthritis developed after an ankylosing spondylitis diagnosis in 2015.
Dan Torjussen-Proctor re-joined the Board of Trustees in March 2022, having previously served as a Trustee for six years between 2013 and 2019. After a long corporate career involving several leadership positions in membership organisations and professional services firms, Dan set up his own company and acts as a freelance Executive Coach and Management Consultant. Dan has osteoarthritis in both shoulders, which he believes is related to his rugby playing career in younger years. However, his love of the game is undiminished, and he is Chair of youth rugby at Guildford RFC. Dan is passionate about raising awareness of arthritis, particularly amongst those who may be at an early stage or are considered 'at risk' of developing arthritis. He was therefore keen to re-join the Board to support Trustees and the staff in taking the Charity forward with the expressed aim of supporting more people who live with arthritis.
We are always looking to recruit Trustees with a suitable skill set in order maintain an efficient, effective and diverse Board of Trustees. Please contact Shantel Irwin, our CEO, if you are interested in finding out more.
## **Risk Management**
The Trustees have a duty to identify and review the risks to which Arthritis Action is exposed and to ensure appropriate controls are in place to provide effective corporate governance and reasonable assurance against fraud and error. The principal risks are: -
- Loss of Funds: the majority of Arthritis Action's funds are managed by an accredited UK charity fund manager, and other funds are held with suitable first tier banks on a short-term basis. As a result, there is little risk in the short or medium term.
- Loss of Income: the Charity is dependent on income from legacies, donations, and membership fees, and remains actively engaged in fundraising activities in order to ensure the continuing flow of income from these sources. Efforts are being made to broaden the income sources to further reduce this risk.
- Loss of Reputation: the Charity takes great care to preserve the professionalism of the services it provides to its members and others who seek help with their arthritis condition. It also actively monitors its interaction and relationships with third parties and other stakeholders to ensure that high standards are maintained.
Other identified risks include cash flow management, health & safety of staff and members, maintaining the IT infrastructure, and staff retention/development.
The Trustees are satisfied that appropriate internal control systems and risk management processes are in place to help to identify, evaluate and manage these risks. The Executive Management Team reviews key strategic and operational risks on a regular basis, and considers new and emerging risks. These risks are recorded on a 'Risk Register' and the Board reviews this Register and receives updates on any changes to or re-assessments of all recorded risks on a regular basis.
The impact and potential threats associated with the COVID-19 pandemic to staff, our members and other stakeholders have been included in these risk management identification and control procedures. We are satisfied that all reasonable steps, that we can implement, have been taken to identify and mitigate these risks.
A rigorous set of financial authorities and procedures is also in place.
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## **Volunteers**
The Trustees volunteer their time and individual expertise freely to the governance and management of the Charity. The Charity also benefits from the help of a small number of volunteers. We benefitted from the valuable skills of our volunteers making calls to members through the Arthritis Action Connect service and from a volunteer who supported the Fundraising Team in 2021 and 2022. We also have a pool of expert patient volunteers who are interested in getting involved with research projects in their areas of expertise.
Arthritis Action maintains an Employer Supported Volunteering scheme which is aimed at supporting employees who wish to volunteer or continue to volunteer to support a wide range of community activities such as a local community group, another charity or school. The purpose of this policy is to encourage and support employees of Arthritis Action who wish to become involved in, or continue to be involved with, volunteering.
## **Assistance and Support for Members & People Living With Arthritis**
We have continued to expand our services and the extent and methods by which we provide information to our members and others living with arthritis, who are seeking help and advice.
The videos on our online Self-Management Resource continue to be popular. The resource includes 27 evidence-based videos, to help people with arthritis self-manage different aspects of their condition and improve their daily life. The resource has been viewed on our website over 46,000 times, with average session times reaching 5 minutes. Topics range from X-rays, Medication, Aids and Devices, Work and Arthritis, to Weight Management and Positive Thinking.
We developed quick exercise videos for our social media channels, to encourage people to keep active while staying at home for prolonged periods due to the pandemic. The videos featured our Services Development Manager and Therapies Manager & Exercise Lead. In 2021 and 2022 we collaborated with Good Boost, a social enterprise that provides affordable and accessible therapeutic exercise programmes, through cutting-edge technology, to test their exercise app with our members and service users. We also ran our Online Exercise Classes again.
We also continued to update the dedicated Covid-19 hub on our website, including content and advice for people spending more time indoors, and frequently asked questions about Covid-19, the vaccine and arthritis. This attracted over 70,000 visits and is still one of our most visited website sections. Our online mental health and exercise directories were visited over 5,000 times, proving to be a useful resource for people affected by arthritis. Our webinar series was also a great success, with over 450 attendees engaging in topics including the Covid-19 Vaccine and Arthritis; Exercise and Mental Wellbeing; Managing Pain in a Pandemic; Hand Therapy; and Pregnancy, Parenting & Arthritis.
During 2021, we secured national media coverage in The Independent and The Daily Express, with mentions on BBC Breakfast and in various regional and local media outlets. Following the launch of our own online electronic newsletter 'eNews' in 2017, we now have over 2,700 subscribers who receive it via a monthly email, a 40% increase from last year.
We have also continued the development of Online Arthritis Action Groups which meet on a regular basis and enable like-minded people to share their experiences of living with arthritis. With the aim of increasing confidence and improving mental well-being, these Groups were more important than ever to support people who were isolated at home, giving them a space to meet, learn from each other and our speakers. We are pleased that 97% of attendees at Groups felt less isolated during the pandemic and 88% reported improved confidence in 2021. Four in five reported improved sense of control of their arthritis and managed their symptoms better during the pandemic.
Arthritis Action has continued to expand the availability of therapies which complement our objective of relieving the pain of arthritis, and we also provide mental wellbeing support and a flexible healthy eating and weight management service. We raise awareness, disseminate information and give presentations around the country to people living with, and impacted by, arthritis. To improve the way we communicate with external audiences we have also continued developing our social media channels such as Twitter, Facebook, Instagram, LinkedIn, and YouTube.
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## **Research**
The Board of Trustees is keen for research to form an integral part of the Charity's activities and a budget allocation for research has been made available year-on-year for the last eight years. Through our research funding we are constantly looking for ways to support people with arthritis and develop a better understanding of arthritis and its effects on people's lives.
We were approached by over 50 university undergraduates and postgraduates, Health Watch organisations and the NHS to ask our members if they would be willing to help with their research. We have also been approached by universities to support their research.
## **Fundraising**
Arthritis Action is committed to good fundraising practice and is registered with the Fundraising Regulator. We voluntarily subscribe to the Fundraising Regulator's Code of Fundraising Practice and have a Donations Acceptance Policy approved by the Board of Trustees, which can be viewed on our website. Our Fundraising Manager and Corporate Partnerships Manager adhere to all applicable laws and codes such as the Fundraising Regulator's Code of Fundraising Practice and data protection laws. Both staff members report directly to our Executive Management Team who, with regards to all members of the public, ensure that all fundraising activities do not result in unreasonable intrusions, unreasonably persistent approaches or any undue pressure being exerted. We do not use any external fundraising organisations or professional fundraisers and did not receive any complaints about fundraising activities carried out by Arthritis Action during 2020/21.
Our Fundraising Manager is focused on developing new fundraising activities to diversify our income streams, covering most areas of fundraising: individual giving, legacy fundraising, trust fundraising, and challenge events. Our Corporate Partnerships Manager is investing time in developing new corporate relationships and raising awareness of arthritis and its prevalence in the workplace. Our largest income source continues to be legacies; therefore, we are exploring new ways of leveraging this area of fundraising alongside other activities.
The pandemic restricted opportunities for in-person sponsored events because marathons were once again cancelled, but we organised our first ever fundraising trek in Snowdon in September. This event received excellent feedback from all participants. For a second year running we have secured funding from the National Lottery in support of our Online Groups and additional grants from the following trusts and organisations: Active Essex, Matrix, Joan Ainslie Charitable Trust and Tula Trust. Income from in-memory donations and charity-led donations increased thanks to a number of larger gifts. We are very grateful to all of these grant awarding bodies and donors for these extremely generous financial contributions.
## **Financial Review**
Arthritis Action's financial performance is set out on page 17 and the key accounting policies remain unchanged.
Income for the year ended 31 October 2021 was £606,007 (2020: £390,826) an increase of £215,181. Expenditure was maintained at a broadly similar level and composition to the previous year and amounted to £1,108,175 (2020: £1,106,089), an increase of £2,086. As a result, the deficit from operational activities was £502,168 (2020: £715,263), a decrease of £213,095.
The increase in income can primarily be attributed to an increase of £189,424 in legacy receipts from £192,939 to £382,363. Legacy Receipts are the Charity's single most important source of income and, by their very nature, their timing is unpredictable. As the Charity receives a relatively small number of individual bequests, volume fluctuations have a marked effect on the amount of legacy receipts from one year to the next. Over the last 10 years annual legacy receipts have averaged £370,000, a fall of £15,000. Income from Donations increased by £34,014 to £75,493 and our income from Grants increased by £14,434 to £24,394 and reflects our efforts to develop new fundraising activities to diversify our income streams.
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**ARTHRITIS ACTION**
## **REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 OCTOBER 2021**
After including a net unrealised gain on investments of £588,379 (2020: £256,134 loss) the net surplus for the year ended 31 October 2021 was £86,211 (2020: £971,397 deficit). This resulted in Arthritis Action's total funds increasing to £5,174,814 (2020: £5,088,603).
## **Reserves Policy**
Arthritis Action aims to utilise its reserves to help people live active lives, free from the effects of arthritis and raise awareness of the impact of arthritis. The Trustees' underlying policy is, therefore, to closely monitor the reserves position to ensure that the level of cash reserves is appropriate to the operating costs and other commitments of the Charity, and to maintain an adequate level of reserves to cover the inherent volatility and uncertainty surrounding legacy income, upon which the Charity is highly dependent. The Trustees will continue to review this policy to ensure that it reflects the Charity's circumstances, external climate, and future plans.
## **Anticipated Funding Deficits**
To achieve our strategy for the next three years, which is to increase the level of assistance we provide to the growing number of people living with arthritis across the UK, the Trustees have set an ambitious budget that involves incurring expenditure which will exceed operating income by approximately 250% over this period. In turn, this will result in annual operating deficits of between £650,000 and £850,000 and a corresponding reduction in our reserves. Therefore, to enable the Charity to continue to run its vital services to meet the everyday needs of people living with the debilitating effects of arthritis, senior management are making strenuous efforts to identify and secure additional revenue streams.
## **Investment Policy**
The Charity has approximately £4.7m of reserves for investment. A portion of these (currently 90% or £4.2m) is regarded as long-term reserves, with the remainder being held as shorter-term reserves. When making investment decisions and placing deposits, careful consideration is given to credit, liquidity and cash flow risk and the Charity seeks to obtain the best financial return within an acceptable level of risk. The investment objective for our long-term reserves is to preserve capital in real terms whilst producing a reasonable income, with an intermediate attitude to risk. Schroders, our financial advisors, have discretion to manage our investment within this framework. The Charity expects our financial advisors, as part of their normal investment research and analysis process, to take account of social, environmental, ethical and governance considerations in the selection, retention and realisation of investments.
## **Plans for the Future**
Arthritis Action's strategic priorities are:-
- To empower people living with arthritis to better self-manage their condition.
There can be a physical and emotional burden when living with the pain of arthritis, and many people with the condition can feel lonely. They will spend the majority of their time managing the symptoms of their condition on their own. Arthritis Action is here to support people with information and advice they can trust; connect them with each other through events and Groups; and give hands-on help to improve their symptoms. Ensuring people have the information and resources they need to self-manage their condition is key to improving their wellbeing.
- To reach more people across the UK who are motivated to lead a healthy lifestyle and self-manage the symptoms of arthritis.
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Arthritis Action offers people with all forms of arthritis a holistic self-management approach that can be tailored to suit each individual based on their condition, pain level, activity levels, eating habits and lifestyle. Arthritis and MSK conditions affect people of all ages, and we know that each person is unique in the way they manage their symptoms. This is precisely why we tailor our self-management approach to meet individual needs. We will proactively reach out to people of working age, especially those aged 20-45 years, adapting our current services to ensure value to young adults, while continuing to be innovative and offer a valuable service to those over the age of 65. Working alongside our Corporate Partnerships Manager, we will focus on developing relationships with organisations that are keen to build a healthier workforce and promoting the self-management approach to encourage people of working age to lead a healthy lifestyle.
## • To have a self-management approach that attracts referrals from healthcare professionals.
We promote evidence-based approaches that help control the symptoms of arthritis and manage its effects. We work with experts in health, therapies and nutrition and the wider sector, and follow the latest NICE guidelines, to ensure that we give the most up-to-date information about arthritis. We will work alongside healthcare professionals to promote the wider adoption of our self-management approach, to improve the daily life of those living with arthritis.
- To raise awareness of the Charity and that of arthritis and MSK conditions.
We aim to generate awareness of arthritis, both nationally and regionally, and the importance of adopting a supported self-management approach, to empower communities living with arthritis to take control of their health and care.
We will also continue to monitor our investments and develop our income sources to ensure that our income can fund and sustain our ambitious development programme which we are currently implementing, without adversely affecting our overall financial standing.
In line with our strategic aim of reaching young adults, we will continue to devote greater resource to support them. In 2020 we set aside £110,000 as a designated reserve entitled the Young Adults Fund. During the year we used £13,000 of this Fund and this was used to undertake research and develop new services for young adults under the age of 45. Learning from the valuable research we gathered from surveys and focus groups of young adults in 2021, we will develop specific content to support the physical health and mental well-being of young adults, and it will complement Arthritis Action's self-management approach and services that are suitable for all ages. We introduced a new Self-Management Event in 2021 for the under forties, and we will continue sharing this new content for this service to appeal to this age group. We launched a new Group for young adults in early 2022. We aim to continue gaining a better understanding of issues affecting younger people living with arthritis, and to develop new services to support this important cohort.
In response to the heightened health inequalities brought about by the covid pandemic, the Charity set up a Health Inequalities Working Group which includes the Executive Management Team and four members of staff. The purpose of the Working Group is to set out the Charity's aims of: understanding the needs of diverse communities affected by arthritis; building a diverse and inclusive culture within the organisation; challenging racism and discrimination in its work internally and externally; and continuing to learn, improve and implement best practices in equality and inclusion. The Charity will launch its first ever Equality, Diversity and Inclusion Strategy in Spring 2022.
We will continue to improve the way in which the Trustees govern Arthritis Action, particularly through the continuing ongoing development of the role and function of our Committees, increased risk awareness, and by ensuring that Board Members have the collective skills which enhance the overall effectiveness of the Board of Trustees. We will recruit new Trustees to ensure a diverse range of skills and experience on the Board.
Working together, the Board of Trustees and the Executive Management Team will ensure the continued growth of Arthritis Action as it delivers upon its strategic objectives to existing and future beneficiaries of the Charity.
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**REPORT OF THE TRUSTEES FOR THE YEAR ENDED 31 OCTOBER 2021**
## **COVID-19**
As a result of the ongoing coronavirus pandemic and the UK Government's lockdown announcement on 23rd March 2020, Arthritis Action took all the necessary steps to revise its operations in order to safeguard staff and members. We immediately closed our offices and arranged for all staff to work from home and changed the ways in which we deliver our services to members and the public. We are pleased to report that all of these arrangements have worked well and we are continuing to develop new ways of providing effective remote interaction to support our members and stakeholders. However, the restrictions on large gatherings meant that unfortunately we had to cancel our 2021 Annual Members’ Conference, and once again run our Annual General Meeting, differently by asking our members to provide their proxies rather than attend in person.
Unlike many other charities, we are not reliant on merchandise sales to support our work. Accordingly, while the pandemic has adversely affected the value of investments and will probably reduce the income that these investments generate over the next few years, we have not suffered the cash flow difficulties experienced by others in the sector.
## **STATEMENT OF TRUSTEES' RESPONSIBILITIES**
The trustees (who are also the directors of Arthritis Action for the purposes of company law) are responsible for preparing the Report of the Trustees and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".
Company law requires the trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing those financial statements, the trustees are required to:
- select suitable accounting policies and then apply them consistently;
- observe the methods and principles in the Charity SORP;
- make judgements and estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
- charitable company will continue in business.
The trustees are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
## In so far as the trustees are aware:
- there is no relevant audit information of which the charitable company's auditors are unaware; and
- the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit
- information and to establish that the auditors are aware of that information.
## **AUDITORS**
The Auditors, LMDB Accountants, will be proposed for re-appointment at the forthcoming Annual General Meeting.
Report of the trustees, incorporating a strategic report, approved by order of the board of trustees, as the company directors, on 18th May 2022 and signed on the board's behalf by:
R H Nye - Trustee
Page 11
**REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF ARTHRITIS ACTION**
## **Opinion**
We have audited the financial statements of Arthritis Action (the 'charitable company') for the year ended 31 October 2021 which comprise the Statement of Financial Activities, the Statement of Financial Position, the Statement of Cash Flows and 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 (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
## In our opinion the financial statements:
- give a true and fair view of the state of the charitable company's affairs as at 31 October 2021 and of its incoming resources and application of resources, including its income and expenditure, for the year then ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'; and
- have been prepared in accordance with the requirements of the Companies Act 2006.
## **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 Auditors' 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 charitable company'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 trustees are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Report of the Independent Auditors thereon.
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.
In connection with our audit of the financial statements, 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 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.
## **Opinions on other matters prescribed by the Companies Act 2006**
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Report of the Trustees for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Report of the Trustees has been prepared in accordance with applicable legal requirements.
Page 12
**REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF ARTHRITIS ACTION**
## **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 Report of the Trustees.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of trustees' remuneration specified by law are not made; or
-
- we have not received all the information and explanations we require for our audit.
## **Responsibilities of trustees**
As explained more fully in the Statement of Trustees' Responsibilities, 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.
## **Our 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 a Report of the Independent Auditors 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.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
- Enquiry of management and those charged with governance on the actual and potential litigation and claims, and also any instances of non-compliance with laws and regulations.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
- Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.
- Professional scepticism in the course of the audit and with audit sampling in material audit areas.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
Page 13
**REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF ARTHRITIS ACTION**
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Independent Auditors.
## **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 auditors' 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.
S Jaquet FCCA (Senior Statutory Auditor) for and on behalf of LMDB Limited t/a LMDB Accountants Statutory Auditors Railview Lofts 19c Commercial Road Eastbourne East Sussex BN21 3XE
Date: ............................................. `23 May 2022`
Page 14
**ARTHRITIS ACTION**
## **STATEMENT OF FINANCIAL ACTIVITIES (INCORPORATING AN INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 OCTOBER 2021**
|Notes
**INCOME AND ENDOWMENTS FROM**
Donations and legacies
4
**Charitable activities**
5
Research and other grants
Membership subscriptions
Other trading activities
6
Income from investments
7
**Total**
**EXPENDITURE ON**
Raising funds
8
**Charitable activities**
9
Research and other grants
Self-management health programme
**Total**
Net gains/(losses) on investments
**NET INCOME/(EXPENDITURE)**
**RECONCILIATION OF FUNDS**
**Total funds brought forward**
**TOTAL FUNDS CARRIED FORWARD**|Unrestricted
funds
£
460,159
6,394
16,570
-
104,884
588,007
132,900
150,091
820,863
1,103,854
588,379
72,532
5,084,752
5,157,284|Restricted
funds
£
-
18,000
-
-
-
18,000
-
-
4,321
4,321
-
13,679
3,851
17,530|2021
Total
funds
£
460,159
24,394
16,570
-
104,884
606,007
132,900
150,091
825,184
1,108,175
588,379
86,211
5,088,603
5,174,814|2020
Total
funds
£
235,930
9,960
15,335
45
129,556
390,826
119,753
133,542
852,794
1,106,089
(256,134)
(971,397)
6,060,000
5,088,603|
|---|---|---|---|---|
The notes form part of these financial statements
Page 15
**ARTHRITIS ACTION**
## **STATEMENT OF FINANCIAL POSITION 31 OCTOBER 2021**
|Unrestricted
funds
Notes
£
**FIXED ASSETS**
Tangible assets
15
276,568
Investments
16
4,192,189
4,468,756
**CURRENT ASSETS**
Debtors
17
254,512
Cash at bank and in hand
502,880
757,392
**CREDITORS**
Amounts falling due within one year
18
(67,365)
**NET CURRENT ASSETS**
690,027
**TOTAL ASSETS LESS CURRENT LIABILITIES**
5,158,784
**PROVISIONS FOR LIABILITIES**
20
(1,500)
**NET ASSETS**
5,157,284
**FUNDS**
21
Unrestricted funds:
General fund
Revaluation reserve
Young People Fund
Restricted funds
**TOTAL FUNDS**|Restricted
funds
£
-
-
-
-
17,530
17,530
-
17,530
17,530
-
17,530|2021
Total
funds
£
276,568
4,192,189
4,468,757
254,512
520,410
774,922
(67,365)
707,557
5,176,314
(1,500)
5,174,814
4,343,141
716,643
97,500
5,157,284
17,530
5,174,814|2020
Total
funds
£
310,948
4,074,292
4,385,240
164,505
612,985
777,490
(73,377)
704,113
5,089,353
(750)
5,088,603
4,655,223
319,029
110,500
5,084,752
3,851
5,088,603|
|---|---|---|---|
The notes form part of these financial statements
continued...
Page 16
**ARTHRITIS ACTION**
## **STATEMENT OF FINANCIAL POSITION - continued**
## **31 OCTOBER 2021**
The financial statements were approved by the Board of Trustees and authorised for issue on 18th May 2022 and were signed on its behalf by:
R H Nye - Trustee
S E Jones - Trustee
The notes form part of these financial statements
Page 17
**ARTHRITIS ACTION**
## **STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 OCTOBER 2021**
|Notes
**Cash flows from operating activities:**
Cash generated from operations
A
Provisions for liabilities
**Net cash provided by (used in) operating**
**activities**
**Cash flows from investing activities:**
Purchase of tangible fixed assets
Purchase of fixed asset investments
Sale of fixed asset investments
Interest received
Dividends received
**Net cash provided by (used in) investing**
**activities**
**Change in cash and cash equivalents in the**
**reporting period**
**Cash and cash equivalents at the beginning of**
**the reporting period**
**Cash and cash equivalents at the end of the**
**reporting period**
**Cash and cash equivalent comprises the following:-**B
Fixed asset investments – other deposits
Cash at bank and in hand|2021
£
(662,770)
750
(662,020)
(5,923)
(916,901)
1,374,474
100
104,784
556,534
(105,486)
642,965
537,479
17,069
520,410
537,479|2020
£
(753,493)
(1,770)
(755,263)
(6,961)
(984,050)
1,636,747
1,120
128,436
775,292
20,029
622,936
642,965
29,980
612,985
642,965|
|---|---|---|
The notes form part of these financial statements
Page 18
**ARTHRITIS ACTION**
## **NOTES TO THE STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 OCTOBER 2021**
## **A. RECONCILIATION OF NET INCOME/(EXPENDITURE) TO NET CASH FLOW FROM OPERATING ACTIVITIES**
|**Net income/(expenditure) for the reporting period (as per the**
**Statement of Financial Activities)**
**Adjustments for:**
Depreciation charges
(Gain)/losses on investments
Interest received
Dividends received
(Increase)/decrease in debtors
(Decrease)/increase in creditors
**Net cash used in operations**
B.
**ANALYSIS OF CHANGES IN NET FUNDS**
At 1.11.20
£
**Net cash**
Cash at bank and in hand
642,965|2021
£
86,211
40,302
(588,379)
(100)
(104,784)
(90,007)
(6,013)
(662,770)
Cash flow
£
(105,486)|2020
£
(971,397)
40,699
256,134
(1,120)
(128,436)
44,647
5,980
(753,493)
At 31.10.21
£
537,479|
|---|---|---|
The notes form part of these financial statements
Page 19
**ARTHRITIS ACTION**
**NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 OCTOBER 2021**
## **1. STATUTORY INFORMATION**
Arthritis Action is a Charity registered in England and Wales. The Charity's registered number and registered office address can be found within the trustee report.
The financial statements are presented in £ Sterling.
## **2. ACCOUNTING POLICIES**
## **Basis of preparing the financial statements**
The financial statements of the Charity, which is a public benefit entity under FRS 102, have been prepared in accordance with the Charities SORP (FRS 102) '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) (effective 1 January 2015)', Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006. The financial statements have been prepared under the historical cost convention with the exception of investments which are included at market value, as modified by the revaluation of certain assets.
## **Going concern**
There are no material uncertainties that cast doubt on the charity's ability to continue as a going concern.
## **Income**
All income is recognised in the Statement of Financial Activities once the Charity has entitlement to the funds and it is probable that the income will be received, except where it cannot be measured with sufficient certainty.
Donations, legacies and other forms of voluntary income are recognised as incoming resources when receivable, except in so far as they cannot be measured with with sufficient certainty. Tangible fixed assets donated or left in legacies are recognised at market value at the time title passes to the Charity.
Subscriptions received and Interest receivable is calculated on an accruals basis.
## **Expenditure**
Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the Charity to that expenditure, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably. Expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all cost related to the category. Where costs cannot be directly attributed to particular headings they have been allocated to activities on a basis consistent with the use of resources.
Grants offered subject to conditions which have not been met at the year-end date are noted as a commitment but not accrued as expenditure.
## **Allocation and apportionment of costs**
The Charity's operating costs include staff costs, premises and other related costs. Such costs are allocated between different expenditure categories including fundraising, publicity, management and administration. Where costs cannot be directly attributable to direct charitable expenditure or other expenditure, they have been apportioned based on an estimate of time spent in each of these categories.
The cost of generating funds is the direct cost spent on fundraising activity. A proportion of central support cost is allocated to the cost of generating funds.
continued...
Page 20
**ARTHRITIS ACTION**
**NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 OCTOBER 2021**
## **2. ACCOUNTING POLICIES - continued**
## **Allocation and apportionment of costs**
Governance costs are the costs associated with governance of the Charity which relate to the general running of the charity as opposed to those costs associated with fundraising or charitable activity.
Support costs, which comprise central office functions such as general management, administration, budgeting and accounting, information technology and human resources are allocated across the cost of generating funds, grant making and charitable activities costs.
## **Tangible fixed assets**
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Freehold property - 2% on cost Short leasehold - 20% on cost Fixtures and fittings - 20% on cost Computer hardware - 50% on cost Computer software - 20% on cost
Included within freehold property is land at a historical cost of £76,667 (2020: £76,667) which is not depreciated.
Tangible fixed assets are included at historical cost and assets are capitalised on a historical cost basis of value. Items costing less than £500 are generally not capitalised.
Bequeathed and donated assets are recognised at market value at the time title passes to the Charity. Gains or losses are recognised on disposal.
The Charity holds title to financial assets subject to life tenancy interests held by third parties. Therefore no values for these assets are shown on the balance sheet.
At each balance sheet date, the company reviews the carrying amounts of its property, plant and equipment to determine whether there is any indication that any items of property, plant and equipment have suffered an impairment loss. If any such indication exists, the recoverable amount of an asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not possible to estimate the recoverable amount of the asset, the company estimates the recoverable amount of the cash generating unit which the asset belongs.
Impairment losses are recognised in the year of impairment.
## **Taxation**
The Charity is exempt from corporation tax on its charitable activities.
## **Fund accounting**
General funds are unrestricted funds which can be used at the discretion of the trustees in furtherance of the general objectives of the charity and have not been designated for other purposes.
Restricted funds are funds which have to be used in accordance with specific restrictions imposed by donors or which have been raised by the charity for particular purposes.
continued...
Page 21
**ARTHRITIS ACTION**
**NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 OCTOBER 2021**
## **2. ACCOUNTING POLICIES - continued**
## **Pension costs and other post-retirement benefits**
The Charity operates a defined contribution pension scheme. Contributions payable to the Charity pension scheme are charged to the Statement of Financial Activities in the period to which they relate. Pension costs are allocated to activities on the same basis as set out in the allocation and apportionment of costs policy stated above.
## **Investments**
Investments are initially recorded at cost and thereafter restated to market value as at the relevant reporting date. The aggregate value of these investments may fluctuate significantly in line with prevailing market conditions.
## **Cash and cash equivalents**
Cash and cash equivalents comprise cash on hand and other short term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk to changes in value.
## **Provisions**
Provisions are recognised when the company has a legal or constructive obligation at the reporting date as a result of a past event, it is probable that the company will be required to settle the obligation and the amount of the obligation can be reliably estimated.
## **Financial instruments**
The Charity recognises a financial asset or liability when it becomes party to the contractual provisions of the instrument. It initially measures the financial instrument at fair value.
## **Subsidiary Undertakings**
Arthritis Action has two subsidiary companies, The Arthritis Association and The Arthritic Association. These subsidiaries have no assets or liabilities and are both dormant. As a result, the Charity is exempt from preparing group accounts under the Companies Act 2006 and under FRS 102.
## **3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY**
In the application of the company's accounting policies, management is required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates are underlying assumptions and are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Following a review of the financial statements it is deemed there are no areas of estimation uncertainty.
continued...
Page 22
**ARTHRITIS ACTION**
## **NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 OCTOBER 2021**
## **4. DONATIONS AND LEGACIES**
|Donations
Gift aid
Legacies|2021
£
75,493
2,303
382,363
460,159|2020
£
41,479
1,512
192,939
235,930|
|---|---|---|
## **Contingent Legacy assets**
The Charity has received notification of 10 (2020: 13) legacies which are regarded as contingent assets and for which income is expected to be received in future years but which had not met the income recognition criteria as at 31 October 2021. The actual timing of receipt and amounts to be received are unknown. The Charity maintains a record of expected legacies receivable based on the most recent correspondence received in relation to the estate. The value of legacies receivable has been estimated at £306,000 (2020: £440,000).
## **5. INCOME FROM CHARITABLE ACTIVITIES**
|Research and other grants
Membership subscriptions
Grants received, included in the above, are as follows:
Kickstart YMCA
National Lottery
Essex County Council
Matrix Chamber
Covid Support Grant
**6.**
**OTHER TRADING ACTIVITIES**
Income from treatment consultations
**7.**
**INCOME FROM INVESTMENTS**
Income from listed investments
Interest receivable|2021
£
24,394
16,570
40,964
2021
£
6,394
10,000
3,000
5,000
-
24,394
2021
£
-
2021
£
104,784
100
104,884|2020
£
9,960
15,335
15,335
2020
£
-
-
-
-
9,960
9,960
2020
£
45
2020
£
128,436
1,120
129,556|
|---|---|---|
continued...
Page 23
**ARTHRITIS ACTION**
## **NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 OCTOBER 2021**
## **8. RAISING FUNDS**
|Cost of generating donations and legacies
Investment management costs
Support costs|2021
£
11,130
20,482
101,288
132,900|2020
£
12,525
22,291
84,937|
|---|---|---|
|||119,753|
## **9. CHARITABLE ACTIVITIES COSTS**
|**CHARITABLE ACTIVITIES COSTS**|||||
|---|---|---|---|---|
|Research and other grants
Self-management health programme|Direct
Costs
£
84,758
372,001
456,759|Grant
funding of
activities
(see note
10)
£
6,780
-
6,780|Support
costs (see
note 11)
£
58,553
453,183
511,736|Totals
£
150,091
825,184|
|||||975,275|
## **10. GRANTS PAYABLE**
|**GRANTS PAYABLE**|||
|---|---|---|
||2021|2020|
||£|£|
|Net subsidies paid to assist with physical therapy|6,780|1,920|
During the year ended 31 October 2021 the temporary suspension of the subsidised consultations service due to the COVID-19 pandemic ended. As a result, subsidies paid to members in respect of physical therapy consultations amounted to £6,030 (2020 £3,690) and the provision to cover unclaimed subsidies had to be increased from £750 to £1,500.
continued...
Page 24
**ARTHRITIS ACTION**
## **NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 OCTOBER 2021**
## **11. SUPPORT COSTS**
|**SUPPORT COSTS**|||
|---|---|---|
|Information
Management
technology
£
£
Raising donations and
legacies
92,792
-
Research and other grants
58,553
-
Self-management health
programme
158,978
47,113
310,323
47,113|Governance
Premises
costs
£
£
-
8,496
-
-
187,214
59,878
187,214
68,374|Totals
£
101,288
58,553
453,183|
|||613,024|
Support costs, included in the above, are as follows:
## **12. NET INCOME/(EXPENDITURE)**
Net income/(expenditure) is stated after charging/(crediting):
||2021|2020|
|---|---|---|
||£|£|
|Auditors' remuneration|5,406|5,208|
|Depreciation - owned assets|40,302|40,698|
## **13. TRUSTEES' REMUNERATION AND BENEFITS**
None of the Trustees received remuneration or received any other benefits in respect of the performance of their duties as a Trustee for either year ended 31 October 2021 or for the year ended 31 October 2020.
## **Trustees' expenses**
|**Trustees' expenses**|||
|---|---|---|
||2021|2020|
||£|£|
|Trustees' expenses|270|429|
During the year, two (2020: three) Trustees were reimbursed for travel and subsistence expenses which were incurred wholly, exclusively and necessarily in the performance of their duties as a Trustee.
continued...
Page 25
**ARTHRITIS ACTION**
## **NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 OCTOBER 2021**
## **14. STAFF COSTS**
|Wages and salaries
Social security costs
Other pension costs|2021
£
657,488
65,655
50,614
773,757|2020
£
641,147
61,090
45,325
747,562|
|---|---|---|
The average monthly number of employees during the year was as follows:
|Executive staff
Support staff|2021
3
16
19|2020
3
14|
|---|---|---|
|||17|
One employee was paid emoluments of between £80,000 and £90,000. This employee is the Chief Executive and is the only employee who is regarded as key management for the purpose of FRS102. The total remuneration paid to this employee during the year was £85,700 (2020: £84,023).
This employee also participated in the defined contribution pension scheme and the employer's contributions for the year total £6,381 (2020: £6,256).
Included in defined contribution pension costs is an accrual for unpaid pensions of £5,832 (2020: £5,403).
Pension costs are allocated between activities within the statement of Financial Activity based on staff hours dedicated to the relevant activity.
continued...
Page 26
**ARTHRITIS ACTION**
## **NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 OCTOBER 2021**
## **15. TANGIBLE FIXED ASSETS**
|Freehold
property
Short
leasehold
Total
£
£
**COST**
At 1 November 2020
517,694
99,283
Additions
-
-
Disposals
-
-
At 31 October 2021
517,694
99,283
**DEPRECIATION**
At 1 November 2020
259,969
69,197
Charge for year
5,285
19,857
Elimination on disposal
-
-
At 31 October 2021
265,254
89,054
**NET BOOK VALUE**
At 31 October 2021
252,440
10,229
At 31 October 2020
257,725
30,086
**COST**
At 1 November 2020
616,977
128,284 49,354
33,144
Additions
-
- 5,923
-
Disposals
-
(9,504) (5,158)
(32,136)
At 31 October 2021
616,977
118,780 50,119
1,008
**DEPRECIATION**
At 1 November 2020
329,166 107,990 46,853
32,802
Charge for year
25,142 11,970 3,077
114
Elimination on disposal
-(9,504) (5,158)
(32,136)
At 31 October 2021
354,308 110,456 44,773
780
**NET BOOK VALUE**
At 31 October 2021
262,669
8,324 5,347 228
At 31 October 2020
287,811
20,294 2,051 342
Total land
and buildings
Fixtures and
fittings
Computer
hardware
Computer
software
£
£
£
£|land and
buildings
£
616,977
-
-
616,977
329,166
25,142
-
354,308
262,669
287,811
827,759
5,923
(46,798)
786,884
516,811
40,303
(46,798)
510,317
276,568
310,948
Totals|
|---|---|
|||
|||
|||
Included within freehold property is land at a historical cost of £76,667 (2020: £76,667), which is not depreciated.
continued...
Page 27
**ARTHRITIS ACTION**
## **NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 OCTOBER 2021**
## **16. FIXED ASSET INVESTMENTS**
|Shares
Other deposits
Additional information as follows:
**MARKET VALUE**
At 1 November 2020
Additions
Disposals
Revaluations
At 31 October 2021
**NET BOOK VALUE**
At 31 October 2021
At 31 October 2020|Listed
investments
£
4,010,562
916,901
(1,374,472)
588,379
4,141,370
4,141,370
4,010,562|2021
£
4,158,439
33,750
4,192,189
Other
deposits
£
29,980
-
(12,911)
-
17,069
17,069
29,980|2020
£
4,040,542
33,750
4,074,292
Totals
£
4,040,542
916,901
(1,387,383)
588,379
4,158,439
4,158,439
4,040,542|
|---|---|---|---|
Cost or valuation at 31 October 2021 is represented by:
|||Listed|Other||
|---|---|---|---|---|
|||investments|deposits|
Totals|
|||£|£|£|
|Valuation in|2021|4,141,370|17,069|4,158,439|
There were no investment assets outside the UK.
Listed investments are accounted for at market value. The historical cost of listed investments and unit trusts is £3,436,263(2020 - £3,691,531).
Investments (neither listed nor unlisted) were as follows:
||2021|2020|
|---|---|---|
||£|£|
|Investment property|33,750|33,750|
Investment property comprises land bequeathed to the Charity. The land was valued at market value in July 2009 when title passed to the Charity and the Trustees are satisfied that there has been no significant change in the fair value of the land since that date.
continued...
Page 28
**ARTHRITIS ACTION**
## **NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 OCTOBER 2021**
## **17. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR**
|**DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR**|||
|---|---|---|
|Legacies receivable
Rent deposits
Prepayments and accrued income|2021
£
180,145
26,260
48,107
254,512|2020
£
90,479
26,260
47,766|
|||164,505|
## **18. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR**
|Trade creditors
Social security and other taxes
Other creditors
Accruals and deferred income|2021
£
9,591
19,411
3,747
34,616
67,365|2020
£
8,407
18,532
2,777
43,661|
|---|---|---|
|||73,377|
## **19. LEASING AGREEMENTS**
Minimum lease payments under non-cancellable operating leases fall due as follows:
|Within one year
Between one and five years|2021
£
60,270
-
60,270|2020
£
121,080
60,540|
|---|---|---|
|||181,620|
The Charity entered into a five year operating lease agreement in respect of its London premises in May 2017. The aggregate lease and service charge payment commitments are £60,270, until the end of the lease.
## **20. PROVISIONS FOR LIABILITIES**
||2021|2020|
|---|---|---|
||£|£|
|Provisions|1,500|750|
All members are entitled to claim subsidies for physical therapy consultations. Everyone who was a member as at 31 October 2021 is entitled to claim for subsidies of up to £30 each for up to two physical therapy consultations until their next annual membership expiry date. The provision is an estimate, based on the latest uptake statistics, of the likely aggregate amount of subsidy claims that the Charity will be obliged to honour in respect of members as at 31 October 2021.
continued...
Page 29
**ARTHRITIS ACTION**
## **NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 OCTOBER 2021**
## **21. MOVEMENT IN FUNDS**
|**Unrestricted funds**
General fund
Revaluation reserve
Young People Fund
**Restricted funds**
Restricted
**TOTAL FUNDS**
Net movement in funds, included in the above a
**Unrestricted funds**
General fund
Revaluation reserve
Young People Fund
**Restricted funds**
Restricted
**TOTAL FUNDS**|re as follows:
Incoming
resources
£
588,007
-
-
588,007
18,000
606,007|At
1.11.20
£
4,655,221
319,031
110,500
5,084,752
3,851
5,088,603
Resources
expended
£
(1,090,854)
-
(13,000)
(1,103,854)
(4,321)
(1,108,175)|Net
movement
in funds
£
(312,080)
397,612
(13,000)
72,532
13,679
86,211
Gains and
losses
£
190,767
397,612
-
588,379
-
588,379|At
31.10.21
£
4,343,141
716,643
97,500
5,157,284
17,530
5,174,814
Movement
in funds
£
(312,080)
397,612
(13,000)
72,532
13,679
86,211|
|---|---|---|---|---|
continued...
Page 30
**ARTHRITIS ACTION**
**NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 OCTOBER 2021**
## **21. MOVEMENT IN FUNDS - continued**
## **Comparatives for movement in funds**
|At
1.11.19
£
**Unrestricted funds**
General fund
5,449,434
Revaluation reserve
610,566
Young People Fund
-
6,060,000
**Restricted funds**
Restricted
-
**TOTAL FUNDS**
6,060,000
Comparative net movement in funds, included in the above are
Incoming
resources
£
**Unrestricted funds**
General fund
385,626
Revaluation reserve
-
385,626
**Restricted funds**
Restricted
5,200
**TOTAL FUNDS**
390,826|Net
movement
in funds
£
(683,711)
(291,537)
-
(975,248)
3,851
(971,397)
as follows:
Resources
expended
£
(1,104,740)
-
(1,104,740)
(1,349)
(1,106,089)|Transfers
between
funds
£
(110,500)
-
110,500
-
-
-
Gains and
losses
£
35,403
(291,537)
(256,134)
-
(256,134)|At
31.10.20
£
4,655,223
319,029
110,500
5,084,752
3,851
5,088,603
Movement
in funds
£
(683,711)
(291,537)
(975,248)
3,851
(971,397)|
|---|---|---|---|
continued...
Page 31
**ARTHRITIS ACTION**
**NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 OCTOBER 2021**
## **21. MOVEMENT IN FUNDS - continued**
The movement in funds for the 2 years between 1 November 2019 and 31 October 2021 is as follows:
|**Unrestricted funds**
General fund
Revaluation reserve
Young People Fund
**Restricted funds**
Restricted
**TOTAL FUNDS**|At
1.11.19
£
5,449,434
610,566
-
6,060,000
-
6,060,000|Net
movement
in funds
£
(995,791)
106,075
(13,000)
(902,716)
17,530
(885,186)|Transfers
between
funds
£
(110,500)
-
110,500
-
-
-|At
31.10.21
£
4,343,143
716,641
97,500
5,157,284
17,530
5,174,814|
|---|---|---|---|---|
The movement in funds for the 2 years between 1 November 2019 and 31 October 2021, included in the above are as follows:
|**Unrestricted funds**
General fund
Revaluation reserve
Young People Fund
**Restricted funds**
Restricted
**TOTAL FUNDS**|Incoming
resources
£
973,633
-
-
973,633
23,200
996,833|Resources
expended
£
(2,195,594)
-
(13,000)
(2,208,594)
(5,670)
(2,214,264)|Gains and
losses
£
226,170
106,075
-
332,245
-
332,245|Movement
in funds
£
(995,791)
106,075
(13,000)
(902,716)
17,530
(885,186)|
|---|---|---|---|---|
During the year realised investment gains amounted to £190,767 (2020 £124,284).
continued...
Page 32
**ARTHRITIS ACTION**
**NOTES TO THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 OCTOBER 2021**
## **22. RELATED PARTY DISCLOSURES**
During the year two (2020: three) Trustees provided services to the Charity for which they received payment.
R Nye received £2,800 (2020: £2,525) for human resource services. The balance due to R Nye at 31 October 2021 was £nil (2020: £nil).
D Rose received £3,350 (2020: £1,750) for member events services. The balance due to D Rose at 31 October 2021 amounted to £1,150 (2020: £800). In accordance with normal commercial terms of trade, the balance outstanding was payable within 30 days of receipt of invoice.
K Young resigned as a trustee on 15 July 2020 and during the financial year to 31 October 2020 he received £1,680 for physiotherapy services.
## **23. SUBSIDIARY UNDERTAKINGS**
On 7 October 2014 Arthritis Action incorporated the following subsidiary companies:
The Arthritis Association The Arthritic Association
These subsidies, which were created to protect the trading names, have no assets or liabilities and were both dormant during the year. It is anticipated that these subsidiaries will remain dormant for the foreseeable future.
Exemption has been claimed from preparing consolidated group accounts under section 9 of FRS102.
Page 33