2007 annual report & accounts

The Physiological Society Annual Report and Accounts for the year ended 31 December 2007

The Physiological Society Annual Report and Accounts for the year ended 31 December 2007

Contents

Page

Report of the Trustees 2

Independent Auditors’ report 17

Statement of financial activities 18

Balance sheet 19

Cash flow statement 20

Accounting policies 21

Notes to the financial statements 23

Standing information 33 This is the Trustees’ Annual Report and Accounts for the year ended 31 December 2007 for The Physiological Society. In preparing this report the Trustees have complied with the Charities Act 1993, the Accounting and Reporting by Charities: Statement of Recommended Practice (Revised 2005) (’SORP’) applicable accounting standards, and also the Companies Act 1985. The Physiological 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 governing document is the Memorandum and Articles of Association of the Company and the members of the Council of Trustees are the Directors of the Company.

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INTRODUCTION Our mission and purpose Physiology is the science of how humans and other animals function in an integrated way and is the basis for many biological and clinical sciences. The Physiological Society was founded in 1876 and is a learned society with over 2600 Members (including 14 Nobel Laureates) and Affiliates (younger scientists) drawn from 60 countries. The majority of Members are engaged in research, in universities or industry. The Society's charitable objectives are to promote, for the benefit of the public, the advancement of physiology, and facilitate the intercourse of physiologists both at home and abroad, and thereby contribute to the progress and understanding of biomedical and related sciences and the detection, prevention and treatment of disease, disability and malfunction of physical processes in all forms of life. The Society’s main strategic objectives are:

• to support physiological research through publications and scientific meetings • to support education in physiology • to communicate the importance of physiology • to support our membership and maintain our operations

Review of the year The Physiological Society’s activities support physiology education and research, which ultimately benefit healthcare and underpin the prevention and treatment of disease. This year’s annual report illustrates the wide range of charitable activities with which The Society supports its Members, physiologists around the world and teachers in universities, medical schools and secondary schools. Publishing high quality research papers and disseminating advances in scientific knowledge is a major activity of The Society. Our two journals are frequently cited and highly regarded by the scientific community, both showing an increase in impact factor in 2007. The journals give immediate free public access to review articles on publication and free access to all content one year after publication. Institutions in designated developing countries are granted immediate free access to both journals. The Society runs a variety of scientific meetings, providing an ideal environment for scientists to share information and discuss new discoveries. In 2007 we held our main meeting in conjunction with the Biochemical Society and the British Pharmacological Society. The translation of basic science discoveries into benefits to health requires collaboration between biologists with a range of expertise and specialisation and the joint meeting reflected this admirably. We also organised four focused scientific meetings in the UK and a joint international meeting with the Slovakian Physiological Society and FEPS. International workshops were held in Krakow and Yaremche to promote the involvement of young physiologists worldwide. A new initiative was the first in a series of public workshops focusing on the contribution of physiology to translational research, Cystic fibrosis: latest advances in medical research and implications for patients and their families, which we organised in partnership with EuroCareCF. The expansion of our membership base to a wider range of physiologists is an important target for The Society. During 2007 our membership increased to 2683. We introduced new membership categories for non-academics who use physiology in their jobs, such as those working in health and wellbeing, and for undergraduate students. We also encouraged teachers in schools and universities to join and participate actively in our meetings. Members benefit from reduced or free access to our meetings and publications and can apply for a variety of grants to support attendance at scientific meetings, vacation research projects and seminar schemes. The Society aims to enthuse the next generation of physiologists by supporting education in schools, universities and research institutes, providing resources, practical training courses and careers advice. A highlight in 2007 was the successful launch and distribution of our free DVD for schools on animal research, Make up your own mind. Where appropriate, we work with other learned societies. We are active supporters of the Biosciences Federation and collaborate with other member organisations on educational and careers events, enhancing public awareness of science, especially on animal research issues and science policy matters. Our income in 2007 was £3.29 million, virtually the same as in 2006. Expenditure reflected our charitable objectives with publications, scientific events, membership services and education accounting for 88%. Ongoing reviewing of our procedures, income streams and governance have continued throughout the year. We have modelled future financial scenarios for The Society and set up a working group to examine new income sources.

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Introduction >>> The Society has built up healthy reserves to fund future major commitments such as the 2013 IUPS meeting and to provide an income for The Society if our publishing income is reduced by open access. Our governance structure has been reviewed by a working group of trustees who have proposed important changes to clarify decision making. A publications committee has been set up to oversee this important aspect of our activities and our major income source. An important infrastructure activity throughout the year has been the development of a new website, which will go live in 2008. In 2008 we will continue to build on our range of charitable activities and will strive to be more cost-effective in our operations. Both our journals will be seeking to increase the quality of papers they publish with further increases in impact factor. Experimental Physiology celebrates its centenary in 2008 and there will be a number of events and activities throughout the year to celebrate this milestone. It will move to monthly on-line publication, increasing the speed with which its papers are made available to the scientific community. We will review our publication processes seeking increased efficiency to allow more of our income to be spent on charitable activities. A major new initiative in education is the development of PHILTER a web-based, educational resource for university teachers. We will run more events for schools and the general public such as Fit4Life which encourages family participation in exercise and sports and a follow-up event on Cystic Fibrosis at the BA Festival of Science. We will continue our drive to expand membership, particularly at undergraduate level. The launch of our new website will streamline processes for grant and membership applications and provide more information about our activities. The governance of The Society will be updated with the combination of the roles of Chair of the Executive committee and President, giving a clear line of authority and responsibility. Our meetings will be organised within scientific themes to allow all Members to have regular opportunities to present their work and there will be a greater emphasis on teaching and education. On the international scene, 2008 will be China year with a joint meeting, a workshop and a Journal of Physiology symposium in that important centre of developing science.

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Governance >>>

GOVERNANCE Council of Trustees The Trustees are legally responsible for the overall governance, management and policy of The Society, ensuring that the charitable objectives for which it has been set up are met. The Trustees are also the Directors of the company. The Council of Trustees meets three times a year. Elections to the Council take place each year, and any Member of The Society is eligible to stand. The normal length of service on Council is four years. The current size of the Council is 20. Meetings of the Council are chaired by the President. Administrative support is provided to the Council and its committees by The Society’s staff based in our offices in London and Cambridge. Trustees’ responsibilities Company law requires the Council of Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of The Society and the income or expenditure for that year. In preparing those financial statements, the Council of Trustees has:

• selected suitable accounting policies and then applied them consistently • made judgements and estimates that are reasonable and prudent • followed applicable accounting standards and statements of recommended practice without any material

departures • prepared the financial statements on the going concern basis

The Council of Trustees is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of The Society and which ensure that the financial statements comply with the Companies Act 1985. 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. The Trustees have confirmed that as far as they are aware there is no relevant audit information of which The Society’s auditors are unaware, and that they have taken all the steps that they ought to have taken as Directors of the company in order to make themselves aware of any relevant audit information and to establish that The Society’s auditors are aware of that information. Trustee induction and training On appointment each Trustee is sent a Trustee Handbook which includes Charity Commission leaflet CC3 and Companies House leaflet GBA1. In 2007, one Trustee attended a Charity Finance Directors' Group training course. Trustees have a legal duty to avoid conflicts of interest so that they can focus exclusively on the best interests of The Society. If and when any conflicts of interest arise, Trustees are required to make a declaration to be recorded on The Society’s Register of Interests, which is maintained by the Company Secretary and reviewed by the Council on an annual basis. Executive Committee The Executive Committee oversees the day-to-day operations of The Society and meets frequently throughout the year. Members of the Executive Committee are drawn from, and elected by, the Council. The Council can delegate any of its powers to the Executive Committee as it sees fit. The normal term of office on the Executive Committee is 4 years. The Executive Committee in 2007 comprised:

David Eisner Clive Orchard William Large Graham McGeown Ian McGrath Prem Kumar Ole Petersen

International Secretary Vice-Chairman Editor-in-Chief, The Journal of Physiology Treasurer Chairman Meetings Secretary President

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Governance >>>

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Committees and Working Groups The Council also has committees and working groups to which it delegates powers, and these groups report back to the Council via the Executive Committee. Membership of these committees and working groups is drawn from the Council but can also include other invited members. Committees are aligned with the various functional groups in the London and Cambridge offices. The main committees and working groups are:

Committees Audit & Risk Education External Relations Policy History & Archives Meetings Nominations Publications

Working Groups Alternative Income Grants Membership

Management and administration The Society employs a Chief Executive who reports on performance against the strategic and operational plans approved by the Trustees. The Society has two offices. The Administration Office in London provides central direction for all aspects of policy and strategy implementation. The Publications Office in Cambridge supports the publishing activities of The Society, including The Journal of Physiology and Experimental Physiology. Annual General Meeting The Society’s Annual General Meeting, open to all Ordinary and Honorary Members, was held on 11 July 2007 at the Scottish Exhibition and Conference Centre during the Life Sciences meeting in Glasgow. Minutes of the meeting are available on The Society’s website. Risk management The Trustees continuously review potential risks to The Society. The Audit and Risk Committee reviews the effectiveness of internal financial controls and risk management systems, the effectiveness of our internal audit function and the clarity and completeness of disclosures in the financial statements of The Society. The main area of identified risk is the potential reduction in publishing income that may be caused by open access. We are working with Wiley-Blackwell to assess the risk to income so as to ensure that The Society has preventative measures in place.

Objects and activities >>>

OBJECTS AND ACTIVITIES The major activities we undertake to achieve our charitable objectives are:

• Publishing • Events (Scientific Meetings) • Membership services • Education • External relations • Resources, administration and infrastructure

Publishing To maximise the value of publication activities to The Society and to the wider physiological community

The Society publishes original scientific literature online and in print in its two highly regarded journals, The Journal of Physiology and Experimental Physiology, through our publisher Wiley-Blackwell. The journals are also published online on HighWire Press. The Society publishes a Members’ quarterly magazine, Physiology News and the proceedings of Society meetings, and is developing its publishing outlets through the Publications Committee.

The Journal of Physiology

In 2007 The Journal of Physiology continued to attract submissions and readers by maintaining a competitive time to first report, publishing high quality research papers in all areas of physiology as well as invited articles in new and exciting areas. 24 issues of The Journal were published containing Research Papers, Rapid Reports, Topical Reviews, Symposium Reports, Perspectives, Journal Club reviews, Letters to the Editor and Editorials. The impact factor, a measure for ranking journals according to the number of times their articles are cited in later publications, increased to 4.407, and The Journal moved from 11th to 10th in the physiology list. The half life of articles remained high at 9.1 years.

Six symposia were sponsored at international meetings in the USA and Australia. Changes in editorial board structure were introduced to help achieve a key goal of reducing the acceptance rate by accepting only those papers likely to make a significant impact in the field. A new Techniques for Physiology section will be introduced in January 2008.

In the coming year it is hoped to further improve the impact factor by maintaining fast review times and a rigorous review process for original research papers and continuing to commission state-of-the art reviews by leaders in the field.

Experimental Physiology

In 2007 submissions to Experimental Physiology rose by 40%. In order to maintain the high standard of published articles and reinforce the remit of the journal, a stricter triage policy was adopted and the rejection rate increased. Competitive review turnaround times were maintained. The impact factor rose by 13.5% to 2.339 and Experimental Physiology moved from 41st to 34th in the physiology list.

Six issues were published containing Research Papers, Lectures, Hot Topic Reviews, Review Articles, five sets of Symposium Reports and one set of Themed Issue Papers. Viewpoint, a new article type highlighting selected papers, was introduced.

Experimental Physiology was promoted at a number of scientific meetings including Experimental Biology 2007. The US profile was successfully raised, with submissions from the US increasing from 14% to 21% of the total.

In 2008 Experimental Physiology will celebrate its centenary. From January the journal will be published monthly online, with print issues continuing to be produced bimonthly. Special centenary branding has been commissioned, and an updated history of the journal and a series of Historical Perspective Articles will be published. The journal will also sponsor a Festschrift for K Michael Spyer in March and a symposium at The Society’s main meeting in Cambridge in July, when a celebratory dinner for past Chairmen of the Editorial Board will be held.

Physiology News

The quarterly magazine continued to promote physiology by publishing news, views and articles prepared by Members and other physiologists, as well as providing information on Society and other related activities. Soapbox and From the Archives were introduced as new regular features and the 25th anniversary year in 2008 will see an enhanced web presence.

Proceedings of The Physiological Society

Nearly 700 general abstracts and 230 symposium abstracts from the LifeSciences meeting were published as Proc LifeSciences. Abstracts from Society meetings held in Edinburgh, Belfast, Manchester and Bristol were also published. Abstracts are reviewed, but corrections are not allowed after the submission period closes (except in

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response to ethical omissions). A submitted abstract may be ‘Accepted as submitted’, ‘Accepted as title only’ or ‘Rejected’. This has resulted in a shorter period from abstract submission to the meeting, something that is welcomed by all.

Key achievements in 2007 • increase in the impact factor of both journals • Journal of Physiology sponsorship of 6 successful symposia at major international meetings and

publication of the proceedings as high-quality reviews • 40% increase in submissions for Experimental Physiology

Key goals for 2008

• further increase in the impact factor of both journals • increased awareness of Experimental Physiology by publicising its centenary and changing to monthly

online publication • enhanced online publication of Physiology News

Events (Scientific meetings) To recognise and promote excellence in physiology through scientific meetings Scientific meetings are one of the original activities of The Society and remain of the highest importance. Our meetings facilitate the dissemination and discussion of the latest scientific advances, supporting and promoting physiology. The Society visited Glasgow in July to take part in LifeSciences 2007, along with the British Pharmacological Society and the Biochemical Society. The meeting was attended by over 1500 participants, and comprised 62 symposia, seven plenary and prize lectures, and over 600 free communications. Four smaller focused meetings were held in Edinburgh, Belfast, Manchester and Bristol. In total, over 400 participants attended these meetings and over 145 free communications were presented. The Society made a large impact on international physiology throughout 2007. A joint international meeting was held in Bratislava in partnership with the Slovakian Physiological Society and FEPS, attracting 500 participants who enjoyed 15 symposia, three plenary lectures and over 230 free communications. Two International Workshops were held in Krakow (Poland) and Yaremche (Ukraine) where all participants presented a free communication. We also honoured the contributions to physiology of three distinguished scientists, Vladimir Skok, Richard Olver, and Sir Andrew Huxley, by supporting three special symposia during the year. The Society contributed over £8000 in support of non-Society symposia covering a wide range of topics of interest to physiologists. In 2008, The Society will return to hosting its own annual Main Meeting, Physiology 2008, which will take place in Cambridge from 14–16 July. A thematic approach is being introduced to our meetings, with the creation of six overarching themes. Focused meetings are to be renamed themed meetings, and will be hosted in Leeds (Cardiac & Respiratory), Oxford (Metabolism & Endocrinology) and London (Vascular & Smooth Muscle). Internationally, The Society’s focus shifts to China with a joint meeting in Beijing in October preceded by an International Workshop in Shanghai. Key achievements in 2007

• successful organization of LifeSciences 2007 and four focused meetings • collaboration with colleagues in Slovakia, Poland and Ukraine to produce three high quality international

meetings Key goals for 2008

• organisation of Physiology 2008 in Cambridge and three themed meetings • organisation of joint international meeting in Beijing and an international workshop in Shanghai, in

partnership with colleagues in China Membership services To promote membership of The Society among the physiological community and support physiologists at a formative stage in their careers The Society strives to attract new members whilst continuing to support its established membership base. In 2007 criteria for Ordinary membership was reviewed and three new membership categories, Associates, Undergraduate Associates and School and College Associates, were introduced.

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Teaching specialists applying for Ordinary membership are now able to submit teaching products in place of peer reviewed publications, demonstrations or communications. In 2007 The Society gained 306 new Members, of which 76 were Ordinary Members and 180 were Affiliates. This brings The Society membership to a total of 2683, a figure that we hope to build on in 2008. The Society continues to provide excellent benefits for Members. Regular, informative contact through Physiology News ensures our Members are kept up to date with the latest news and developments. The Society provides a range of funding opportunities for personal and departmental support, and these will continue to evolve to best suit the needs of our Members. In 2007 The Society awarded £93,175 through its travel grant scheme. In 2008, our new online application process will allow The Society to move towards monthly consideration of travel grants. To ensure that The Society has a focused approach to membership, a strategy document has been developed to consider methods of extending the membership and raising awareness of The Society and associated benefits. Membership recruitment and retention have both been highlighted as areas for focus in 2008. With regards attracting new members, targeted advertising will be a key area for development. Improved services offered by the new website, such as online payment and discussion forums, will help retain our current membership base. Key achievements in 2007

• membership rose to 2683 • three new membership categories introduced and criteria updated for teaching specialists

Key goals for 2008

• increase membership especially at undergraduate level • implementation of a one month deadline for travel grants

Education To foster and support the learning and teaching of physiology at the secondary and tertiary stages of education The future of physiology lies within the hands of young scientists and The Society’s activities and resources reflect this. In 2007 we participated in the general meeting of the Association for Science Education, interacting with teachers at the frontline of secondary and college education. During the meeting we raised the profile of physiology, discussed the career opportunities that studying physiology brings, and distributed resources for teachers and students. We also co-organised a lecture series to provide new ideas for teaching the GCSE and A-level curriculum. The Society provided hands on, practical support to teachers with a workshop at Coventry University designed to update knowledge and practical skills. In previous years we have also organised sixth form workshops which provide students with an insight into higher education and studying within a university setting. In 2008, we hope to organise two sixth form workshops. Each year The Society supports the BA, both during National Science and Engineering Week (NSEW), and at the National Festival of Science. In 2007 we sponsored events on performance enhancement, The bionic ear and experimental approaches to understanding diseases and developing treatment. 2008 will be the eighth year that The Society has co-organised the Life Science careers conferences, under the umbrella of the Biosciences Federation. These conferences aim to raise the awareness of the many career opportunities open to science graduates. 2007 saw three events in Leeds, Bristol and London attended by over 300 students. Affiliates benefit from a wealth of funding opportunities and educational support in the form of techniques workshops. In 2007, The Society ran workshops on microelectrode techniques, molecular techniques and real-time PCR. In 2008, these workshops will be reviewed to enable The Society to determine their relevance and value to our Members. In 2007, The Society supported Young Physiologists’ Symposia (YPS), arranged entirely by early careers scientists for their peers, in Bratislava and Glasgow. In 2008, meetings have been arranged by students at Manchester and Cambridge Universities. The Society supports development overseas through grants for junior physiologists and laboratories whose research is hindered by the lack of funds. In 2007, Junior Fellowships were awarded to two physiologists from Ukraine and one from Romania; a Centre of Excellence grant was made to the Kazan State Medical University in Russia.

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The Society aims to encourage young scientists to study physiology and in 2007 46 undergraduates were awarded Vacation Studentships to work on a physiology-related research project in a Member’s laboratory. A review of this scheme in 2008 will further ensure funding is allocated in the best possible way. In 2007, the profile of physiology teaching was highlighted with the introduction of membership criteria specific to teaching specialists. The Society’s Teaching Special Interest Group held a workshop to discuss the challenges and successes associated with teaching physiology. The Society’s commitment to teaching will be continued into 2008 with a teaching specific symposium at Physiology 2008. Other teaching-related activities planned for 2008 include the development of PHILTER (Physiologists Image Library and Teaching Resource), a web-based educational resource. Key achievements in 2007

• supported 2 YPS in Bratislava and Glasgow, and 3 techniques workshops • co-organised 2 Life Sciences careers conferences

Key goals for 2008

• establish Teaching SIG symposia and workshop at Physiology 2008 • continue planning and developing of PHILTER

External relations To identify external relations policy matters of relevance to physiologists, and to promote for the benefit of the public the advancement of physiology by influencing government policy The Society aims to raise the external profile and promote the interests of physiology to as wide an audience as possible. This involves running events and creating educational and other promotional materials for the general public, lobbying government and other organisations on issues of concern to physiologists, fostering relationships with like minded organisations and liaison with the media. The first in a series of workshops focusing on the contribution of physiology to translational research, Cystic fibrosis: latest advances in medical research and implications for patients and their families took place in partnership with EuroCareCF at the Royal Society in November. The workshop attracted people from the health professions who would not normally have attended a Society event. A working group on medical training issues, set up in partnership with the British Pharmacological Society, identified the need to develop a core curriculum in physiology to help inform the training of medical students and health professionals. Following strong support from heads of UK medical, dental, nursing and allied health profession schools, a consultant has been engaged to work on a core curriculum in 2008. The Society is actively represented on a number of external bodies. The Animal Welfare and Legislation working group contributed to a well received BSF/ABPI report on in vivo training skills. Legislation activities included lobbying for sensible provisions in the proposed revision of EU Directive 86/609 on animal research. Our new DVD for schools on the ethics of animal experimentation, Animal research: make up your own mind, received excellent feedback from teachers at the Association of Science Education conference and was distributed to all UK schools. A welcome surprise was the large number of requests received from organisations abroad, feedback from them indicating that there was no equivalent material available internationally. A major activity throughout the year was responding to science policy consultations, many in conjunction with the BSF. High notes were the witness statements in Parliamentary Committee reports by Ole Petersen to the House of Commons Education and Skills Committee, and Ian McGrath to the House of Commons Science and Technology Committee. The Society will continue to work with the BSF and other organisations on responses to consultations in 2008. Other planned projects for 2008 are an external relations event for schools, media and the general public in April at Essex University. The event, Fit4Life, will look at how exercise affects the body and explore issues of how to pursue a healthy active lifestyle. We will also be following up contacts made with the World Bank and others by drafting a discussion paper with the Royal Society on opportunities for learned society involvement in science and technology capacity building in developing countries. Key achievements in 2007

• Make up your own mind DVD received excellent feedback in the UK and internationally • a joint Working Group on Medical Training issues was set up with the British Pharmacological Society

Key goals for 2008

• draft a core physiology curriculum for medical training for medical, dental and nursing schools

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• explore opportunities for learned society involvement in science and technology capacity building in developing countries.

Resources, administration and infrastructure To ensure that the administrative structure and finances of The Society are adequate to achieve the charitable objects The Society’s new website has been developed over the last year in conjunction with Fisher Technology. It will incorporate our rebranded image, resulting in a fresh modern look and improved navigation. The website will be fully integrated with our existing membership database, providing Members with the facility to apply and pay for membership, grants and events online, update their personal information, and preview subscription dues and forthcoming events. It will also offer additional features including a searchable Member directory, bulletin boards and forums, online voting and questionnaires, personalised content, news and jobs listings, mailing list signup, and secure online payments by card or direct debit. Originally planned for launch in 2007, the site will now go live in 2008 due to the increased complexities of the project and our desire to deliver a fully operational site. In 2008, our entire financial accounting and banking systems will be reviewed. We will look at options for greater integration between the Sage accounting system and the iMIS membership database. In addition we will be transferring from the modem based banking system to a new internet-based service. The governance of The Society was reviewed by a working group of Council. The major recommendation was to combine the role of President with that of Chair of the Executive Committee in order to clarify lines of authority and responsibility in The Society. These recommendations will be voted on by the membership at an EGM in 2008 to allow implementation by the following AGM, at which time the current Chairman of Executive and President will step down and the new system can be introduced. A formal terms of reference was introduced for each of The Society’s committees. The future financial position of The Society is unclear and potentially threatened by a reduction in publishing income, as a result of open access directives from a number of research funders. During the year a working group reviewed alternative income streams for The Society. The major recommendations were to (a) build up reserves to provide an alternative income stream; (b) introduce registration fees for meetings to supplement income; and (c) introduce new membership categories and increase Member numbers. We reviewed our investment strategy and changed from a relatively high risk portfolio in trackers to one with less risk and less correlation with the stock market. In the London and Cambridge offices we have rationalised the production of documents and promotional materials such as meetings programmes so that those staff most involved in preparing the content are also actively involved in the production of the document. Looking to the future and building on our successful joint meeting in 2007 with the British Pharmacological Society and the Biochemical Society, we are actively discussing how the three societies could work more closely together in the future, to the benefit of all our Members and of the UK biomedical sciences. Key achievements in 2007

• introduction of formal terms of references for all Society committees • modelling future financial scenarios including loss of journal income, and preparing contingency plans

Key goals in 2008 • implementation of revised governance structure • financial integration between Sage accounting system and iMIS membership database

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OTHER ACTIVITIES History & Archives Committee The History & Archives Committee actively promotes interest in all aspects of the history of physiology. The Committee oversees The Society’s various archival collections which are currently held at the Wellcome Trust Library and the Science Museum. The collections mainly comprise paper records of The Society’s activities, a photographic and film collection showing individuals, laboratories and experiments, and a growing collection of oral history interviews conducted with both academic and technical staff who have contributed to physiology and to The Society. The Committee publicises the need for institutions and departments to identify and maintain any historically important physiological equipment. Additionally it encourages individual physiologists to donate relevant personal and professional records to an appropriate repository. The Committee’s commemoration of the work of Sydney Ringer culminated in October at a special ceremony at St Mary’s Church, Lastingham. Several members of The Society attended as guests of the Lastingham Society. David Miller gave an entertaining lecture in the church on the life of Ringer and his legacy to physiological science while David Eisner demonstrated (with video clips) why ions are so important for physiological mechanisms. A memorial plaque to Ringer was unveiled, together with the launching of David Miller’s booklet, A solution for the heart, which describes Ringer’s life and his contribution to physiology. During the year:

• The Committee re-activated the Paton Prize Bursary. The prize, which encourages the study of major ideas and concepts that have shaped modern physiology, takes the form of a bursary with funding of up to £1,000. The bursaries are financed by interest from the Paton Fund, which originated as a donation from Professor Sir William Paton, with a matching donation from The Society. The first Paton Prize was awarded in 2007 to David Miller for research into the life and work of Sydney Ringer.

• The Committee exhibited historical equipment from the Glasgow laboratories at the LifeSciences Meeting in July and a continuous cycle of photographs of past and present Members was projected.

• A temporary archivist was appointed to catalogue the records of The Society that have accrued over the past 10 years. This work, for which the Committee secured special funding, will start in April 2008.

• Several Oral Histories were recorded and transcribed for the archives and photograph portraits of the subjects were taken by Martin Rosenberg.

Goals for 2008 include the continuation of the Oral History programme, further efforts to ensure the preservation of items of historical interest; active promotion of the availability of the Paton Prize and dealing with the problems of digitising images and storing electronic records. Benevolent Fund of The Physiological Society The Benevolent Fund was established in 1976 ‘for the purpose of assisting Members of The Society, staff and former staff (who by the nature of their employment can be considered to have contributed to the advance of physiology) employed at teaching, research and industrial establishments who are in necessitous circumstances, and their dependants”.’ Income in 2007 was £5,849 of which £4,071 came from charitable giving, £156 from raffles and the remainder from investment income and bank interest. In 2007 one grant totalling £1,000 was made and £150 of book tokens and vouchers were given to children of current or recent beneficiaries. The Society is connected by virtue of common object and administration with The Benevolent Fund of The Physiological Society (Registered Charity No. 272800) and may be contacted at the registered office of The Society. The Society supports The Benevolent Fund by the provision of employees' time and administrative resources free of charge. Biosciences Federation The Society continues to support the Biosciences Federation (BSF) as a powerful umbrella and lobbying organisation for the life sciences in the UK, and provides office accommodation, IT support and funding for the organisation. The BSF is one of the channels for submitting The Society's responses to public consultations. The Society is closely involved with the BSF Animal Sciences Group that is tackling difficult issues concerning legislation and the activities of animal rights activists.

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Plenary and Prize Lectures supported by The Society Annual Review Prize Lecture Thomas Bolton (St Georges Hospital, London, UK) Smooth muscle excitation Michael de Burgh Daly Prize Lecture Michael J Joyner (Mayo Clinic College of Medicine, USA) A sympathetic view of the sympathetic nervous system and human blood pressure regulation Paton Prize Lecture Denis Noble (University of Oxford, UK) Claude Bernard, the first systems biologist, and the future of physiology G L Brown Prize Lecture Nina Balthazar (University of Bristol, UK) Feeding signals to the hungry mind UK/Australian Visiting Lectureship Scheme David Allen (University of Sydney, Australia) Invited Society Lecture in Bratislava, Slovakia Ian McGrath (University of Glasgow, UK) Regulation of all cell types in blood vessels by catecholamines?

FINANCIAL REVIEW Basis of accounting The annual financial statements of The Physiological Society are attached to this report. These are fully SORP compliant including a full analysis and allocation of support costs across the charitable activities. Review of the year Overall summary The Society’s total income increased by 1% in 2007 to £3,290k (2006: £3,259k). However, expenditure fell by £154k to £2,917k (2006: £3,071k) and, as a result, net incoming resources increased by £185k to £373k (2006: £188k). A mixed performance by our investments in 2007 led to net losses of £60k (2006: net gains of £975k). Consequently, The Society’s reserves increased during the year by £313k (2006: £1,163k). Publications Journal of Physiology total income increased by a disappointing 1% to £2,527k (2006: £2,492k). The shift towards online only subscriptions continues with a 43% share of total institutional subscriptions in 2007 (2006: 30%). Consortia income increased by £10k (7%). Experimental Physiology subscription income increased slightly to £113k (2006: £111k). Increased consortia, rights and colour revenue increased total income to £140k (2006: £136k). Publication costs for the two journals also increased slightly to £1,493k (2006: £1,484k). Savings in distribution (£25k) and office costs (£20k) were mostly offset by increases in production (£24k), editorial costs (£17k) and staff costs (£30k). Events In 2007, all income associated with the Joint Life Sciences Meeting was administered by the British Pharmacological Society with the three Societies sharing equally the net cost. However, income from other meetings increased by a considerable £33k contributing to an overall total of £50k (2006: £47k). This was mostly due to an increase in sponsorship activity. Events expenditure decreased by £173k (25%) to £508k (2006: £681k). The net cost of The Society’s major meeting, Life Sciences 2007, was £17k (2006: £100k); this fall was due to both the increased registration fees and economies achieved by the three Societies. Ring-fenced international meeting grants were discontinued and rolled in the general member grant scheme (2006: £26k). Apportioned support costs fell by £47k but staff costs increased by £15k (11%). Membership services Total membership subscriptions were constant at £127k. Costs associated with the provision of membership services increased by £22k (9%) to £270k (2006: £248k). Grants payable in 2007 were £95k (2006: £71k). Direct costs associated with Physiology News fell by £2k to £23k. Staff costs increased by £26k (33%) but this was offset by a fall in apportioned support costs of £25k (48%). Education Educational activities increased by £12k (4%) to £312k. Expenditure on schools fell by £2k and universities by £1k. Costs associated with international activities increased by £13k. Staff costs increased by £14k (18%) but this was offset by a fall in apportioned support costs of £14k (28%). External relations Resources expended on activities associated with external relations policy fell by £33k (23%) to £110k (2006: £143k). The main reason for the decrease was the cost, in 2006, of the Schools' DVD project (£27k). In addition, apportioned support costs fell by £10k (43%).

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Financial Review >>>

Governance Costs relating to the general running of The Society fell by 5% to £191k (2006: £201k). Legal and professional fees fell by £15k and apportioned support costs by £16k. This was offset by an increase in staff costs of £20k (25%). Apportioned support costs Shared overhead costs associated with the London office fell by £134k (41%) to £196k (2006: £330k). The main reason for the fall was the ongoing website/rebranding project which incurred costs of £28k in 2007 (2006: £126k). In addition, VAT write-offs (£17k) and membership debtor provisions (£10k) were not required in 2007. Other incoming resources Investment income increased slightly by £6k (1%) over the previous year. Fund income fell by £33k (14%) as a result of increased holdings in 'accumulation units' following the switch from Legal & General Investment Management (LGIM) to BestInvest. Rental income increased by £22k (14%) due to a number of completed rent reviews in the year. Bank interest increased by £17k (61%) mostly as a result of the new IUPS long term fixed deposit account. Balance sheet The balance sheet remains in good shape ensuring that The Society has the assets required to meet its charitable objects. The performance of The Society’s investments was mixed. The investment fund increased by £452k (6%) to £8,207k although the post year-end period has seen considerable volatility in the investment markets. The investment property portfolio saw a devaluation of £275k (2006: revaluation of £510k) to reflect the climate in the commercial property markets. Total debtors decreased by £131k to £1,804k (2006: £1,935k). This was mostly to do with the timing and magnitude of transactions with Wiley-Blackwell. Cash balances at the year-end decreased by £439k to £1,013k (2006: £1,452k). In December 2006, a voluntary VAT disclosure required The Society to collect £607k from Wiley-Blackwell and pass over to HM Revenue & Customs in January 2007. This had the effect of inflating both cash balances and creditors around the 2006 year-end. As well as the VAT aspect, the £712k fall in creditors to £1,712k can also be explained by a £194k reduction in deferred income. Investment policy and performance Investment funds In March 2007, the Trustees approved a proposal to transfer the investment funds managed by LGIM to BestInvest. This proposal was put forward following a lengthy investment review and tendering process. The Trustees agreed that while the tracker funds had provided an excellent return over the period since July 2005, the lack of diversification needed to be addressed and the portfolio could offer little protection against a falling market. BestInvest proposed a well diversified growth-cautious model and the transfer was carried out throughout the middle of 2007. In addition, the Trustees approved that all income would be reinvested, to build up reserves, and that it would not be practical to pursue an ethical investment policy. The number of funds in the portfolio has increased from 6 to 22 and will be judged against the FTSE APCIMS Income benchmark for each subsequent calendar year following the transfer. While issues relating to investment management and ethicality were considered in 2007, the Trustees will fully review and update the Statement of Investment Principles (SIP) at the July 2008 Council Meeting. Property The Society continues to hold a portfolio of four properties. At 31 December 2007 the portfolio was re-valued downwards by £275k (2006: re-valued upwards by £510k), following an independent valuation, giving a market value of £2,595k (2006: £2,870k). Total rental income during the year was £178k (2006: £156k). The rental yield (based on the opening market value) was 6.2% (2006: 6.6%). Standard property managers fees (5% of rental income) were £10k in 2007 (2006: £9k). During 2007, The Society resolved two rent reviews and completed a lease renewal in respect of the Sudbury property; legal and professional costs associated with these were £23k.

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Reserves policy The Trustees have adopted a reserves policy which they consider appropriate to ensure the continued ability of The Society to meet its charitable objects. The free reserves are defined as unrestricted funds less designated funds less fixed assets. The free reserves as at 31 December 2007 were £10,859k (2006: £10,549k) and equate to 44.7 months’ worth of expenditure (2006: 41.2 months). Following the revised Wiley-Blackwell contract, The Trustees will fully review The Society’s requirements for free reserves in line with the guidance issued by the Charity Commission. This will be carried out at the July 2008 Council Meeting along with a review of the SIP. Free reserves are needed to allow for the development of new initiatives, to meet the working capital requirements of The Society and to compensate for a significant drop in publishing income. The Trustees consider it prudent that free reserves, which essentially represent the value of investments, should be sufficient to generate £550,000 of investment income, if required, to offset the possible loss of publishing income. Using a notional yield of 5%, the level of free reserves required is ~ £11 million. Free reserves are currently below that range by approximately £100k; The Society will re-invest investment income and make periodic cash injections to attain the target level. In addition, the Trustees agreed to designate £1million to underwrite potential commitments for the XXXVII IUPS Congress in 2013. In February 2007, £400,000 was transferred to a one year fixed term deposit account for this purpose. A further injection of £100k was made in January 2008. Grant making policy The Society awards grants to support the careers of physiologists in the UK and internationally. Assessment criteria for applications include the benefit of funding an application to the applicant and to the furtherance of physiology. Details of the policy and application procedures are available to Members and are listed on The Society’s website. The types of grants available are:

• Travel Grants for attendance at meetings, workshops and laboratory visits • Vacation Studentships to support undergraduate summer research projects • Departmental Seminar Schemes to attract visiting speakers to take part in department-run seminars • Non-Society Symposium to provide up-to-date presentations on a specified symposium topic at a non-

Society meeting • Centres of Excellence Support Scheme and Junior Fellowships to support physiologists in Eastern

Europe and developing countries ** ** International grants not available to physiologists based in the UK Treasurer’s statement The statements presented here confirm that The Society remains strong financially. Although gross income showed little growth, at 1% (£31k) for the year, a reduction in net expenditure resulted in an increase in net income from £188k to £373k, while free reserves grew to £10,859k. These funds should help assure that The Society can fulfill its charitable and academic objectives for the foreseeable future. While surpluses are always reassuring, the increase in net income for the year is a matter of some concern and reflects difficulties in accurately budgeting for each year’s activities ahead of time. The budget approved by Council for 2007 actually showed a small net deficit but several cost areas spent considerably less than predicted. It is the Trustees’ intention that The Society’s income should be used to support and improve The Society’s activities and one important goal is to balance income and expenditure more closely in future. I would also like to draw members’ attention to a number of other trends highlighted in these financial statements.

• Publication income, which continues to generate 81% of total income, shows little growth, and is falling in real terms. On the positive side, however, there is no indication that Open Access is having any major effect on journal income as yet, although this situation will continue to be monitored. Following review by a working group, it appears unlikely that alternative income streams can be developed in the short-term, other than from registration fees for meetings, which have already been introduced. These fees have initially been set at a low level, however, and meetings remain free to Retired and Honorary Members, and to Affiliate Members who register early. The impact of this change, which brings Society events into line with the vast majority of other scientific meetings, will be reviewed at the end of 2008.

• Staff costs accounted for 28% of total expenditure for the year (23% in 2006). This rising trend reflects

both payrises and staff appointments, eg to cover maternity leave. These costs are of course necessary if The Society is to carry out it’s activities and were only 2% higher than budgeted for the year. Active

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16

management of the total salary bill will be ever more important, however, since income is unlikely to grow substantially.

• Income from membership fees remained stable at £127k, which was less than half of the total

expenditure on membership services (£270k). This represents a 9% increase over the Membership Services expenditure in 2006. Despite this, it is proposed to leave membership fees unchanged for 2009, partly in recognition of the introduction of registration fees for Society meetings. Overall, we believe the services offered to Members represent excellent value for the fee paid.

• The Society’s investments showed a small net loss in capital value over 2007, with increases in

Securities being more than offset by the down-valuation of our rental property. Investment funds were transferred from LGIM ‘Tracker funds’ to more active management using BestInvest as financial advisers in mid-2007. This was done with a view to increasing investment diversification and attempting to reduce the impact of a downturn in equities. Investment policy will be reviewed regularly in the light of performance and the balance of need between growth and income generation.

• Free reserves at the end of 2007 were close to the target set in our Reserves’ Policy. These reserves

include funds designated for use in support of the XXXVII IUPS Congress to be organized by The Society in 2013. Given the current instability in the financial markets, it seems likely that our reserves, which reflect the capital value of our investments, will fall in 2008. This should not affect the activities of The Society in the short term, however, assuming income is maintained.

Overall, The Society is in good financial health. Capital investments such as the new Website help keep us relevant to the needs of members and the outside world. It is up to all of us to ensure that the considerable resources available are used imaginatively to promote and develop the scientific and educational profile of physiology both nationally and internationally. Finally, I would like to acknowledge the staff who manage the finances of The Society from day to day, particularly Casey Early, our Finance Manager, and Mike Collis, the Chief Executive Officer. It is a pleasure to work with such highly motivated professionals, without whom The Society could not carry out its activities. This report was approved by the Trustees of The Physiological Society and signed on this 29th day of April 2008 on their behalf by:

J C McGrath Chairman of the Executive Committee

J G McGeown Honorary Treasurer

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF THE PHYSIOLOGICAL SOCIETY We have audited the financial statements of The Physiological Society for the year ended 31 December 2007 which comprise the Statement of Financial Activities, the Balance Sheet, the Cash Flow Statement and the related notes. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the charitable company’s members, as a body, in accordance with Section 235 of the Companies Act 1985. 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. Respective responsibilities of Trustees and Auditors As described in the Statement of Trustees’ Responsibilities the charity’s Trustees are responsible for the preparation of the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The Trustees are also directors of The Physiological Society for the purposes of company law. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies Act 1985 and whether the information given in the Trustees’ Report is consistent with the financial statements. We also report to you if, in our opinion the charitable company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding trustees’ remuneration and other transactions is not disclosed. We read the Trustees’ Report and consider the implications for our report if we become aware of any apparent misstatements within it. Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Trustees in the preparation of the financial statements, and of whether the accounting policies are appropriate to the charitable company’s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion:

• the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the charitable company’s affairs as at 31 December 2007 and of its incoming resources and application of resources in the year then ended, including its income and expenditure;

• the financial statements have been properly prepared in accordance with the Companies Act; and • the information given in the Trustees report is consistent with the financial statements.

haysmacintyre Chartered Accountants Registered Auditors Fairfax House 15 Fulwood Place London WC1V 6AY

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STATEMENT OF FINANCIAL ACTIVITIES FOR THE YEAR ENDED 31 DECEMBER 2007

Unrestricted Restricted Total Total Notes Funds Funds 2007 2006 £'000 £'000 £'000 £'000

Incoming Resources Activities to further the Charity's objects:

Journal sales and subscriptions 1a 2,667 - 2,667 2,628 Membership subscriptions 127 - 127 127 Events and education income 58 - 58 58 Other incoming resources 1b 5 - 5 19

Activities for generating funds: Investment income 1c 433 - 433 427

Total incoming resources 3,290 - 3,290 3,259

Resources Expended Cost of generating funds: Investment management fees 33 - 33 14 Charitable expenditure: Costs of activities to further the Charity’s objects:

Publications 1,493 - 1,493 1,484 Events 507 1 508 681 Membership Services 269 1 270 248 Education 312 - 312 300 External Relations 110 - 110 143

Governance costs 191 - 191 201

Total resources expended 2 2,915 2 2,917 3,071

Net incoming resources before transfers 375 (2) 373 188 Transfer between funds (11) 11 - -

Net incoming resources 3 364 9 373 188 Realised losses on investments (32) - (32) - Unrealised gains on investments 8 247 - 247 465 Revaluation of investment property 9 (275) - (275) 510 Net movement in funds 304 9 313 1,163 Fund balances as at 1 January 2007 11,564 39 11,603 10,440

Fund balances as at 31 December 2007 13 11,868 48 11,916 11,603

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 has not been prepared. The accounting policies on pages 21 to 22, the notes on pages 23 to 32 and the standing information on page 33 form part of these accounts.

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BALANCE SHEET AS AT 31 DECEMBER 2007

Note 2007 2006 £'000 £'000

Fixed Assets

Tangible assets 7 9 15

Investments

Securities 8 8,207 7,755

Investment properties 9 2,595 2,870

10,802 10,625

Current Assets

Debtors 10 1,804 1,935

Cash at bank and in hand 1,013 1,452

2,817 3,387

Liabilities

Creditors: Amounts falling due within one year 11 (1,712) (2,424)

Net Current Assets 1,105 963

Net Assets 11,916 11,603

Funds

Unrestricted Funds:

10,868 10,564 General (including revaluation reserves of £1,298k (2006: £2,517k))

Designated 1,000 1,000

11,868 11,564

Restricted 48 39

Total Funds 12 11,916 11,603

The accounting policies on pages 21 to 22, the notes on pages 23 to 32 and the standing information on page 33 form part of these accounts. Approved and authorised for issue by the Trustees of The Physiological Society this 29th day of April 2008 and signed on their behalf by:

J C McGrath Chairman of the Executive Committee

J G McGeown Honorary Treasurer

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CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007

2007 2006 £'000 £'000

Net Cash (Outflow)/Inflow from Operating Activities 15a (636) 174

Returns on Investments and Servicing of Finance

Income from listed investments received 207 243

Interest received 48 28

Rent received 178 156

Capital Expenditure and Financial Investment

Payments to acquire tangible fixed assets (3) (2)

Purchase of fixed asset investments (8,096) -

Disposal of fixed asset investments 7,935 -

(Decrease)/Increase in Cash in the Year 15c (367) 599

The accounting policies on pages 21 to 22, the notes on pages 23 to 32 and the standing information on page 33 form part of these accounts.

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ACCOUNTING POLICIES FOR THE YEAR ENDED 31 DECEMBER 2007 a) Basis of preparation of accounts The financial statements have been prepared under the historic cost convention, with the exception of investment assets which are included at market value. The financial statements have been prepared in accordance with Statement of Recommended Practice (SORP), ‘Accounting and Reporting by Charities: Statement of recommended practice’, published in March 2005, applicable accounting standards and also the Companies Act 1985. b) Fund accounting Unrestricted funds are available for use at the discretion of the Trustees in furtherance of the general charitable objects of The Physiological Society. Designated funds are those funds transferred from the unrestricted fund for particular purposes for projects at the discretion of the Trustees. Restricted income funds are created when donations are made for a particular area or purpose, the use of which is restricted to that area or purpose. The purpose and use of restricted funds is set out in the notes to the financial statements. c) Incoming resources All income is accounted for as soon as The Society has entitlement to the income and there is certainty of receipt and the amount is quantifiable. Publication and membership income is accounted for on an accruals basis. Income received by The Society in the current year that related to journals to be published after the year end, and membership subscriptions to commence after the year end, are treated as deferred income. Dividends and interest on securities are included in the Statement of Financial Activities on a receivable basis, at an amount which includes the tax credit recoverable from HM Revenue & Customs. Bank interest receivable is included in the Statement of Financial Activities on an accruals basis. d) Resources expended All expenditure is accounted for on an accruals basis and has been listed under headings that aggregate all the costs related to that activity. Where the costs cannot be directly attributed they have been allocated to activities on a basis consistent with the use of resources. Direct costs, including directly attributable salaries are allocated on an actual basis to the key strategic areas of activity. Overheads and other salaries are allocated between expenses headings on the basis of time spent. Governance costs include the costs of governance arrangements which relate to the general running of The Society. These activities provide the governance infrastructure that allows The Society to operate and include the strategic planning processes that contribute to the future development of The Society. e) Grants payable Grants payable have been accounted for on an accruals basis upon authorisation unless they are attached to a specific future Society event or activity. f) Pension contributions Contributions to The Society’s Occupational Pension Scheme, which is a defined contribution scheme, are paid annually in advance and are accounted for on an accruals basis. Contributions to personal pensions are paid annually in arrears and are also accounted for on an accruals basis. The Stakeholder Pension Scheme continued for the remainder of staff during the year. This is paid on a monthly basis. g) Fixed assets Assets with a cost in excess of £1,000 intended to be part of ongoing use to The Society in carrying out its activities are capitalised as fixed assets. Depreciation is charged on tangible fixed assets at 25% of cost per annum, so as to write them off over their expected useful lives.

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Accounting policies for the year ended 31 December 2007 >>>

h) Investments Investments are included at market value at the Balance Sheet date. Net gains and losses arising on revaluations and disposals during the year are included in the statement of financial activities. i) Stock No value has been placed on stocks of unsold copies of the journals published by The Society. j) Academic support A number of Trustees and the Senior Editors of The Journal of Physiology spend significant time on Society business which takes them away from their normal duties. The Society makes ex gratia payments for specific purposes to the host institution of some of these persons. It is emphasised that these payments are grants to be used for specified purposes and not an expectation as of right by the institutions concerned. Trustees and Senior Editors are still expected to perform their functions for The Society, whether or not their host institution is provided with such a grant. Therefore, there is no intention to create any legal obligation to make these payments and consequently no contractual agreements are entered into with the institutions in relation to this support. k) Publication arrangements The Society has a publishing agreement with Blackwell Publishing Limited (Blackwell) to print, publish, market and distribute The Journal of Physiology (JP) and Experimental Physiology (EP). The agreement, which commenced on 1 January 2004, shall continue for an initial period of 5 years, plus a 2-year extension, which may be terminated subject to agreed notice. Any annual gross profit shall be apportioned to The Society in the following proportions: 75% for JP and 50% for EP. The Society maintains an office in Cambridge where The Society administers the peer review of manuscripts and copy-edits accepted manuscripts. Word files are then passed to Blackwell to typeset for print and online publication. The annual financial transactions with Blackwell constitute, therefore, a substantial part of the annual turnover. During 2007, Blackwell published JP and EP on behalf of The Society. Blackwell markets and collects the institutional subscriptions. The Publisher pays The Society 80% of The Society’s share of the budgeted gross profit in quarterly instalments. The balance of The Society’s share of the gross profit is paid on acceptance of the Annual Statement. Gross income and costs are identified in the statement of financial activities. 2008 income received in advance has been treated as deferred income and has not been included in the statement of financial activities.

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2007 1. INCOMING RESOURCES

a) Journal sales and subscriptions 2007 2006 £'000 £'000

The Journal of Physiology 2,527 2,492

Experimental Physiology 140 136

2,667 2,628

b) Other incoming resources 2007 2006 £'000 £'000

Royalties 1 1

Donations - 14

Advertising 1 -

Sundry income 3 4

5 19

c) Investment income 2007 2006 £'000 £'000

Income from listed investments held in the UK 203 243

Income from listed investments held abroad 4 -

Income from freehold investment property in the UK 178 156

Interest on cash held by investment managers 3 -

Interest on cash held in bank 45 28

433 427

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Notes to the financial statements for the year ended 31 December 2007 >>>

2. RESOURCES EXPENDED

Grant funding of activities

Activities undertaken

directly Direct staff

costs Direct

support costs

Allocated support

costs Total 2007

Total 2006

£'000 £'000 £'000 £'000 £'000 £'000 £'000

Cost of generating funds:

Investment management fees - - - 28 5 33 14

Charitable activities:

Publications - 836 321 317 19 1,493 1,484

Events 9 236 156 51 56 508 681

Membership Services 95 24 105 13 33 270 248

Education 106 53 92 25 36 312 300 External

Relations - 42 47 9 12 110 143

Governance: - - 102 54 35 191 201

213 1,188 823 497 196 2,917 3,071

b) Analysis of allocated support costs

Generating Publications Events Membership Education External Governance Total Total

Funds Services Relations 2007 2006

£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000

Premises - 5 22 16 14 5 14 76 78

Communications & IT - 3 13 10 8 3 8 45 144

Postage, printing and stationery - 1 4 3 2 1 2 13 10

Other staff costs - 2 6 4 4 1 4 21 29

Financial costs 5 3 10 (1) 7 2 6 32 60

Depreciation - 5 1 1 1 - 1 9 9

5 19 56 33 36 12 35 196 330

Cost allocation includes an element of judgement and The Society has had to consider the cost benefit of detailed calculations and record keeping. To ensure accurate accounting The Society adopts a policy of allocating costs to the respective cost headings throughout the year. This allocation includes support costs where they are directly attributable. Therefore the support costs shown are a best estimate of the costs that have been so allocated. Support costs are allocated on the basis of staff time.

c) Analysis of governance costs 2007 2006

£'000 £'000

Legal and professional fees 7 14

Audit fee 9 8

Other auditors’ remuneration 1 2

Trustee’s meetings 27 28

Other governance costs - 7

Academic support 10 11

Direct staff costs 102 82

Apportionment of support costs 35 49

Total governance costs 191 201

3. NET INCOMING RESOURCES

This is stated after charging: 2007 2006 £'000 £'000

Depreciation 9 19

Audit fee 9 9

Other auditors’ remuneration 1 2

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4. ANALYSIS OF GRANTS

a) Grants to institutions

Non-Society Centres of Departmental Establishment Symposia Excellence Seminar

Grants Support Scheme Total United Kingdom and Republic of Ireland £ £ £ £ British Society for Cardiovascular Research 500 - - 500 Imperial College London 500 - 740 1,240 Queen's University Belfast 500 - 1,099 1,599 Royal Society of Edinburgh 1,000 - - 1,000 The Society for Experimental Biology 500 - - 500 University College Cork - - 980 980 University College Dublin - - 800 800 University of Birmingham - - 1,000 1,000 University of Bristol - - 930 930 University of Cambridge - - 822 822 University of Dundee - - 1,651 1,651 University of Edinburgh - - 900 900 University of Glasgow - - 1,000 1,000 University of Leeds - - 987 987 University of Leicester - - 307 307 University of Manchester - - 1,000 1,000 University of Newcastle upon Tyne 500 - 1,000 1,500 University of Nottingham 690 - 745 1,435 University of Oxford - - 800 800 University of Sheffield - - 763 763 University of Southampton 500 - 430 930 University of Strathclyde - - 750 750 University of York - - 422 422 4,690 - 17,127 21,817 Foreign Grants Bogomoletz Institute of Physiology, Ukraine 500 - - 500 European Cystic Fibrosis Society 500 - - 500 Gordon Research Conferences, USA 500 - - 500 Institute of Biophysics and Cell Engineering, Minsk - 5,000 - 5,000 Institute of Pharmacology and Toxicology, Kiev - 5,000 - 5,000 Kazan State Medical University, Russia - 5,000 - 5,000 Medizinische Universität Wien, Austria 750 - - 750 The Seoul National University College of Medicine, South Korea 1,000 - - 1,000 Universität Basel, Switzerland 250 - - 250 University of Belgrade, Serbia - 5,000 - 5,000 Universitatea din Bucureşti, Romania 500 - - 500 4,000 20,000 - 24,000 Grand total 8,690 20,000 17,127 45,817

b) Grants to individuals 2007 2006 £ £ Events Travel Grants Grants to 0 individuals (42 in 2006) - 25,500

Membership Services Member Grants Grants to 222 individuals (151 in 2006) 93,175 66,045 Network Interaction Grant Grant to 1 individual (4 in 2006) 1,960 5,374

Education Junior Fellowship Grants to 4 individuals (4 in 2006) 20,300 12,100 Vacation Studentships Grants to 46 individuals (41 in 2006) 48,866 45,900

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5. EMPLOYEE INFORMATION The average number of persons employed including part-time staff, calculated on a full-time equivalent basis analysed by office, was:

Staff numbers 2007 2006

Number Number Administration office 12 9 Publications office 9 9

21 18

Staff costs 2007 2006 £'000 £'000 Gross salaries 673 575 Employer's national insurance costs 71 61 Pension costs 61 45 Agency staff costs 7 14 Copy-editor support costs 11 15

823 710

Emoluments of employees The number of employees of The Physiological Society whose emoluments fell within the following bands: 2007 2006

Number Number £60,001 - £70,000 1 -

Pension scheme The Society made payments during the year in respect of defined contribution pension schemes totalling £61k (2006: £45k). At 31 December 2007, an amount of £-k (2006: £7k) was included within creditors in respect of contributions due for the year.

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6. 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 £92,500 (2006: £90,000) and Trustees (19 in total) were also reimbursed expenses totalling £29,945 (2006: £31,217). Academic support The following Trustees’ institutions received academic support payments during the year: Trustee Institution Amount £ D A Eisner The University of Manchester 13,750 P Kumar University of Birmingham 15,000 W A Large St George's University of London 18,750 J C McGrath University of Glasgow 15,000 J G McGeown Queen's University Belfast 15,000 C H Orchard University of Bristol 15,000

Payments to Trustees for non-Trustee duties During the year four Trustees received expenses as speakers at conferences outside of their Trustee duties totalling £1,223. Editorial benefits The following Trustees received free basic membership (worth £90) and/or a hard copy of JP (+ £120) or EP (+ £75) in respect of their current or past status as an editor of one of The Society’s journals. D A Eisner (EP) P L Greenhaff (JP) J W Hanrahan (JP) P Kumar (JP) W A Large (JP) G L Smith (EP) Other related party payments The spouse (S M Wray) of a Trustee (D A Eisner) was reimbursed £226 in respect of speaker duties at the Edinburgh Focused Meeting. 7. TANGIBLE FIXED ASSETS Fixtures,

Fittings and Office

Equipment £'000 Cost At 1 January 2007 83 Additions 3 Disposals (44) At 31 December 2007 42 Accumulated depreciation At 1 January 2007 68 Charge for the year 9 Disposals (44) At 31 December 2007 33 Net book value at 31 December 2007 9

Net book value at 31 December 2006 15 All fixed assets are used for charitable purposes.

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8. INVESTMENTS – SECURITIES

2007 2006 £'000 £'000 Analysis of investments at 31 December by category of holding Listed investments 8,135 7,755 Cash held as part of the portfolio 72 - 8,207 7,755

Analysis of investments at 31 December by location Investments held in the UK 7,051 7,755 Investments held outside the UK 1,156 -

8,207 7,755

Analysis of movements in securities portfolio Valuation at 1 January 2007 7,755 7,290 Additions 8,096 - Disposals in the year (proceeds £7,931 (2006: £-)) (7,963) - Net unrealised gains 247 465

Valuation at 31 December 2007 8,135 7,755

The value of the following investments represented more than 5% of the total market value as at 31 December 2007. Market Number Value £'000 Axa Framlington Monthly Income (5.1%) 151,873 421 Babcock & Brown Public Partnerships (6.7%) 490,000 546 BH Macro (6.7%) 42,132 548 Invesco Perpetual Income (10.2%) 59,470 839 LGIM All Stocks Gilt Index Trust (6.2%) 529,596 508 Liontrust First Growth (6.9%) 250,325 565 Matrix Alternative Investment Strategies Horizon (6.1%) 332,043 501 Resolution Argonaut European Income (5.5%) 341,239 452 Taube Hodson International Growth & Value FD Inc A&Y (5.2%) 150,830 428

All investments (other than freehold investment properties) are quoted on a recognised Stock Exchange. These investments are managed by Bestinvest (Brokers) Ltd. The historical cost of listed investments at 31 December 2007 was £7,891k (31 December 2006: £6,576k). 9. INVESTMENTS - FREEHOLD PROPERTIES

2007 2006 Analysis of movements in investment properties £'000 £'000 Valuation at 1 January 2007 2,870 2,360 Net unrealised (loss)/gain (275) 510 Valuation at 31 December 2007 2,595 2,870

The valuation of freehold investment properties has been undertaken by Bidwells, Chartered Surveyors. The valuation was made at the open market value as of 31 December 2007. The valuation was prepared in accordance with the Royal Institution of Chartered Surveyors Appraisal and Valuation Manual. The increase in valuation was incorporated in the Balance Sheet and has been reported in the Statement of Financial Activities. The historical cost of the freehold investment property at 31 December 2007 was £1,480k (2006: £1,480k).

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10. DEBTORS

2007 2006 £'000 £'000 Other debtors 1,646 1,796 Prepayments and accrued income 158 139

1,804 1,935

11. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2007 2006 £'000 £'000 Trade creditors 9 37 Other creditors 119 626 Accruals 168 151 Deferred income 1,416 1,610 1,712 2,424

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12. STATEMENT OF FUNDS

1 Jan Incoming Outgoing 31 Dec 2007 resources resources Gains Transfers 2007 £'000 £'000 £'000 £'000 £'000 £'000 General reserve 10,564 3,290 (2,915) (60) (11) 10,868 Designated funds: IUPS Fund 1,000 - - - - 1,000 Total designated funds 1,000 - - - - 1,000 Total unrestricted funds 11,564 3,290 (2,915) (60) (11) 11,868

Restricted funds: Sharpey-Schafer Legacy 15 - - - - 15 Paton Fund 13 - (1) - 11 23 Pfizer Prize Fund 7 - - - - 7 M de Burgh Daly Prize Lecture Fund 4 - (1) - - 3 Total restricted funds 39 - (2) - 11 48 Total funds 11,603 3,290 (2,917) (60) - 11,916

In November 2006, the Trustees agreed to set aside £1m to underwrite potential commitments for the XXXVII IUPS Congress in 2013. The Trustees will review the level of designation in 2008. The Sharpey-Schafer Legacy supports a triennial lecture to be given in London alternately by an established physiologist and by a young physiologist. There was no Sharpey-Schafer Lecture in 2007. The Paton Fund awards not more than one annual bursary to promote the study of the history of major concepts that have shaped modern physiology. In 2007 Dr David Miller received the award for his booklet on the life of Sydney Ringer, A solution for the heart. A transfer from the general reserve, totalling £10,802, was made to the Fund to reflect the accrued interest in the twelve year period from 1995. The Pfizer Prize is used to fund up to nine annual Pfizer Awards to postgraduate students for Oral or Poster Communications presented in Designated Sessions of The Society's Special Interest Groups. There were no Pfizer Prizes awarded in 2007. The Michael de Burgh Daly Prize Lecture is given biennially in memory of the distinguished physiologist under the auspices of the Cardiovascular, Respiratory and Autonomic Control Special Interest Groups. The 2007 Michael de Burgh Daly Prize Lecture was given by Dr Michael Joyner at the Joint Life Sciences 2007 Meeting, in Glasgow.

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13. ANALYSIS OF TOTAL FUNDS

General Designated Restricted Funds Funds Funds Total Analysis by type of asset and liability £'000 £'000 £'000 £'000 Fixed assets 9 - - 9 Investments 10,802 - - 10,802 Current assets 1,769 1,000 48 2,817 Liabilities (1,712) - - (1,712) 10,868 1,000 48 11,916

14. FINANCIAL COMMITMENTS At 31 December 2007, The Society had annual commitments under non-cancellable operating leases as follows:

Land and Land and Building Other Building Other 2007 2006 2007 2006 £'000 £'000 £'000 £'000 Leases expiring within 1 year - - - - 2–5 years 69 - 81 - Over 5 years - - - -

69 - 81 -

Status The Society is a company limited by guarantee and is a registered charity. The liability to the Members is limited to £1 each. The number of Members (excluding Honorary Members) at 31 December 2007 stood at 1,836 (2006: 1,817). Its activities are exempt from taxation under section 505 of the Income and Corporation Taxes Act 1988.

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15. NOTES TO THE CASH FLOW STATEMENT

2007 2006 a) Reconciliation of net incoming resources to net cash outflow from operating activities £'000 £'000 Net incoming resources 373 188 Depreciation 9 19 Loss on disposal of fixed asset - 3 Investment income (434) (427) Decrease/(increase) in debtors 130 (218) (Decrease)/increase in creditors (714) 609 Net cash (outflow)/inflow from operating activities (636) 174

b) Reconciliation of net cash flow to movement in net funds 2007 2006 £'000 £'000 (Decrease)/increase in cash during the year (367) 599 Net funds at 1 January 2007 1,452 853 Net funds at 31 December 2007 1,085 1,452

c) Analysis of changes in net funds 1 Jan 31-Dec 2007 Cash Flows 2007 £'000 £'000 £'000 Cash held as part of the investment portfolio - 72 72 Short term deposits 300 (100) 200 Long term deposits - 400 400 Cash at bank and in hand 1,152 (739) 413

1,452 (367) 1,085

STANDING INFORMATION The Physiological Society is registered in England as a company limited by guarantee, No. 323575. Registered Charity No. 211585. Head Office and Registered Office Peer House, Verulam Street, London WC1X 8LZ, UK Tel: 020 7269 5710 Fax: 020 7269 5720 www.physoc.org Publications Office PO Box 502, Cambridge CB1 0AL, UK Tel: 01223 400180 Fax: 01223 246858 Trustees in 2007 J F Ashmore D R Corfield (to July 2007) D A Eisner (to Nov 2007) * V F Gladwell P L Greenhaff S K Hall (to July 2007) P T Harrison (to July 2007) J W Hanrahan A E King P Kumar * W A Large * S L Lightman J G McGeown * J C McGrath * C H Orchard * O Petersen * C J Schwiening S V Smirnov (to July 2007) G Smith (from July 2007) D Sugden A V Tepikin K D Thornbury (to July 2007) J T Tiffert J Winpenny (from July 2007) D J A Wyllie * Executive Committee Chief Executive Michael Collis Company Secretary Simon Kellas Finance Manager Casey Early Auditors haysmacintyre, Fairfax House, 15 Fulwood Place, London WC1V 6AY, UK Solicitors Russell-Cooke, 2 Putney Hill, Putney SW15 6AB, UK Bankers Child & Co, 1 Fleet Street, London EC4Y 1BD, UK Investment managers Bestinvest (Brokers) Ltd, 6 Chesterfield Gardens, London W1J 5BQ, UK Property consultants Bidwells, Trumpington Road, Cambridge CB2 2LD, UK Pension advisors Punter Southall Financial Management Ltd, 126 Jermyn Street, London SW1Y 4UJ, UK

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2007 annual report & accounts

Documents

Transcript of 2007 annual report & accounts