Annual Report and Accounts 2011

Report of the Council of Management 2011

The Council of Management presents its Report and the Financial Statements for the year ended 31 December 2011.

The Society is a company limited by guarantee (having no share capital), registered in England and Wales No. 2167853, and a charity registered in England and Wales (No. 298328) and in Scotland (SC037603). The Society is governed by its Memorandum and Articles of Association (adopted on 16 May 1987 and last amended on 17 November 2007) which set out its objects which may be summarised as to preserve in operation paddle steamers, to educate the public in their historical significance and to preserve relics and other materials associated with paddle steamers. The Society’s principal activities are to assist in the preservation in sailing condition of the Paddle Steamers Waverley and Kingswear Castle and to maintain a collection of historical material relating to paddle steamers. The Society also supports the preservation of Motor Vessel Balmoral while she sails in support of paddle steamers.

The Society provides public benefit by making grants to charities so they may maintain their vessels; by maintaining a collection of artefacts accessible for research purposes; by holding public meetings relating to paddle steamers; and by publishing current and historical information relating to paddle steamers. The trustees have paid due regard to Charity Commission guidance on public benefit in deciding what activities the Society should undertake.

The Society operates both at UK and local levels, through five area Branches. The Council of Management controls the Society and normally meets four times a year in London. The five Branch Committees are given delegated authority over 20% of the subscription income attributed to their areas and promote the Society and organise activities locally.

The five Branches organise public meetings in winter and assist in promoting sailings and carry on fund raising in summer. Members also participate in working parties on P.S. Waverley at Glasgow, M.V. Balmoral at Bristol and P.S Kingswear Castle at Chatham.

Branch	Venues of public meetings
Bristol Channel	Bristol and Cardiff
London and Home Counties	Central London and Southend
North of England and North Wales	Bury, Manchester and York
Scottish	Glasgow
Wessex	Bournemouth, East Cowes and Southampton

The Council of Management are the Society’s charity trustees. The Articles of Association allow up to 18 members, appointed as follows:

Method of Appointment	Number
Members of the Society elected by postal ballot of the membership	8
One member of the Society from each Branch of the Society nominated by the member’s Branch Committee	5
The Chairman of and one other representative appointed by Waverley Steam Navigation Co Limited	2
The Chairman of and one other representative appointed by Paddle Steamer Kingswear Castle Trust Limited	2
One representative appointed by Loch Lomond Steamship Company	1
Total:	18

 
P.S. Waverley is owned on behalf of the Society by Waverley Steam Navigation Co. Ltd. (WSN) (itself a registered Scottish charity – SC005832) and operated by Waverley Excursions Ltd., a wholly owned subsidiary of WSN. P.S. Kingswear Castle is owned on behalf of the Society by Paddle Steamer Kingswear Castle Trust Ltd. (PSKCT) (a charity registered in England and Wales as no. 299931) and operated by Paddle Steamer Kingswear Castle Trust (Trading) Ltd. The Society also supports financially the preservation of P.S. Maid of the Loch, which is owned by Loch Lomond Steamship Company (LLSC), an independent Scottish charity (SC024062). Links are also maintained with the New Medway Steam Packet Company Ltd (NMSPC) (a charity registered in England and Wales as no. 296236 – also known as Medway Queen Preservation Society) which is reconstructing P.S. Medway Queen at Bristol.

The Society largely fulfils its aim of supporting the steamers by fund raising to restore and preserve them. The Society is fortunate to benefit from sometimes very substantial bequests from its members and supporters and in 2011 a total of £34,263 was received.

In 2011 the Society has continued its policy of providing financial support to WSN to help keep Waverley and Balmoral in sailing condition. Apart from an additional loan of £50,000, the Society made a grant of £135,000 to help finance Waverley’s dry docking. An appeal to members raised £91,307 in aid of all three ships and £28,289 was paid on in grants for specific pieces of work. The balance remains available as a reserve. The plan to convert a proportion of the outstanding loans to WSN to grant in exchange for a second mortgage over Waverley is being pursued and the proposal awaits the consent of the Heritage Lottery Fund. In addition, the net proceeds of the Grand Draws held in 2010 (£30,114) and 2011 (£39,618) were distributed for the benefit of the ships on which the tickets were sold.

In 2010 the Society pledged to contribute £50,000 towards LLSC’s planned major appeal to return P.S. Maid of the Loch to service. During 2011, £9,000 was paid over towards the cost of creating specifications and schemes necessary to return the Maid to steam. In addition, small grants totalling £2,200 were made, one of which was to fund the preparation of three sets of technical drawings essential to obtain a Passenger Certificate. The full amount of £20,000 pledged to NMSPC in 2010 was paid over during the year as a contribution towards a new condenser for P.S. Medway Queen.

The Society’s has a specialised Museum Collection and it is currently valued at £58,637. The Collection has been accumulated over the 52 years of the Society’s existence and includes over 44,000 items, of which 27,000 are catalogued, ranging from ship models to ship’s furniture and company records. Disappointingly the opportunities for public exhibition continue to diminish as further museum closures occur. The Society has the ambition to create its own public display if an affordable basis can be found. In the meantime, secure storage has been rented for the bulk of the collection. The website created to provide greater access to the Collection (www.heritagesteamers.co.uk) has continued to be refreshed and expanded throughout the year.

The Society Accounts show net resources expended of £133,363 in 2011. Loan transactions with WSN are summarised in the Notes to the Accounts. At 31 December 2011 the General Fund stood at £103,630, the Streatfield Bequest at £58,414 and the Restoration and Preservation Fund (devoted to Paddle Steamers Waverley and Kingswear Castle) at £10,118 and the Balmoral Fund at £1,645. The ring fenced sum to safeguard the long term future of P.S. Kingswear Castle stood at £366,447 and the Society has entered into discussions with PSKCT with a view to concluding a long term funding agreement to agree its planned uses. There were also funds in hand raised by the 2009 Appeal (£6,186) and 2011 Appeal (£62,717) which are available for some or all of the vessels, as specified by the donors or the terms of the Appeal.

The Society has no paid employees so most of its achievements reflect members’ voluntary efforts. These cover a wide range of skills and are essential to the continued successful operation of the Society. The Council of Management acknowledges gratefully all contributions great and small.

The Society’s policy is to maintain reserves to fund future restoration of and specific projects for the paddle steamers it supports. The events of 2011 led to the severe depletion of its reserves and ideally, they should be rebuilt to a level approaching £500,000 to provide for possible future requirements. As needs can arise in a relatively short term, the majority of the reserves are invested as cash in Common Investment Funds and banks. There are also lesser investments in Index Linked Treasury Stock and an equity based Common Investment Fund.

The members of the Council of Management (the Society’s Trustees and Directors) during the year, who received no remuneration for their services, are listed below.

Elected Members
Myra Allen (Chairman) (1) (2)
John Anderson (Secretary)
David Haddleton (Vice-Chairman)
Martin Longhurst (Treasurer) (2)
Stuart Mears (Resigned 3.7.11)
Douglas McGowan (Appointed 19.11.11)
Patrick Murrell
Paul Semple (Appointed 19.3.11)
Gavin Stewart (Resigned 26.6.11)
Terry Sylvester (Appointed 10.12.11)

Branch Representatives
Richard Engert (Wessex)
David Green (London)
Alan Hopson (Bristol Channel) (Died 16.3.11)
Noel Kemp (Bristol Channel) (Appointed 18.6.11)
Robert Whitelaw (North)
Gordon Wilson (Scottish)

Representatives of Waverley S. N. Co. Ltd. (May appoint two trustees)
Nick James (1)
Alec Lewis (1) (Resigned 6.2.12)

Representatives of P.S. Kingswear Castle Trust Ltd. (May appoint two trustees)
Jeremy Gold (3) (4)
John Megoran (3) (4)

Representative of Loch Lomond Steamship Co. (May appoint one trustee)
Michael Hughan (5) (Resigned 26.6.11)

Directorships of related party companies: (1) Waverley Steam Navigation Co Ltd (2) Waverley Excursions Ltd (3) PS Kingswear Castle Trust Ltd (4) PS Kingswear Castle Trust (Trading) Ltd (5) Loch Lomond Steamship Company

JOHN ANDERSON Secretary 10 March 2012   Registered Office: 17 Stockfield Close, Hazlemere, HIGH WYCOMBE, HP15 7LA

Statement of Financial Activities for the Year ended 31 December 2011

 

All of the above results are derived from continuing activities. All gains and losses recognised in the year are included above. The surplus/deficit for the year for Companies Act purposes comprises the net incoming resources/net resources expended for the year before realised gains/losses on investments and was a deficit of £133,363 (2010 – deficit of £209,614).

Balance Sheet at 31 December 2011

 

For the year ending 31 December 2011 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
Directors’ responsibilities:

• the members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476;
• the directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts;
• these accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies’ regime.

The Accounts were approved by the Council of Management on 10 March 2012 and signed on its behalf by Martin Longhurst.

Notes to the Accounts

1. Format of Accounts and Accounting Policies
   1. Basis of accounts: These Accounts have been prepared in accordance with the Charity Commission’s publication “Accounting and Reporting by Charities – Statement of Recommended Practice” (SORP 2005), the Accounting Standards Board’s “Financial Reporting Standard for Smaller Entities” (FRSSE), the Companies Acts and the historic cost basis of accounting, except for investments and the Museum Collection, which have been included at revalued amounts. The accounts are prepared on an income and expenditure basis.
   2. Restatement of 2010 Comparative Figures: Errors in the opening position have been corrected by restating the 2010 comparative figures. The errors related to the allocation of certain receipts to the wrong fund. The material adjustment reduces the Streatfield Bequest by £29,099 and increases the Restoration and Preservation Fund Waverley Division by £17,738 and the Balmoral Fund by £11,361.
   3. Donations, legacies and subscriptions: These items of income, including life subscriptions, are taken into account in full in the year of receipt. No allowance is made for the undistributed part of any legacies due.
   4. Netted off expenses and related income: Where sufficient information is available the netting off of expenses and the related income has been eliminated.
   5. Stocks: Stocks of unsold goods are valued at the lower of cost or realisable value.
   6. Investments: Investments are valued at market value, except as described in Notes 3 and 4.
   7. Gains/losses on investments: Gains and losses are recognised in the year they arise. Unrealised gains or losses are added to or deducted from the Fund to which the investment relates.
   8. Grants: Liabilities arising from grant commitments made by the Society are recognised by creating a provision pending the fulfilment of conditions at which point the obligation becomes binding.
   9. Group accounts: As permitted by Section 405 of the Companies Act 2006, the Council of Management has not prepared group accounts on the grounds that as the subsidiaries are constituted as charities there are severe long-term restrictions over the assets of the subsidiaries and that disproportionate expense would be incurred in the preparation of group accounts.
2. Museum Collection: The Society owns a collection of relics relating to paddle steamers. It was valued at market value at 31 December 2001 and is now depreciated over 20 years on a straight line basis. Movements in 2011 may be summarised as follows:

	Cost or Valuation	Depreciation	Net Book Value
	£	£	£
Balance at 1 January 2011	79,754	(23,691)	56,063
Acquisitions	6,907	–	6,907
Charge for year	–	(4,333)	(4,333)
Balance at 31 December 2011	86,661	(28,024)	58,637

1. Subsidiary Undertakings:
   1. The holding of shares in Paddle Steamer Kingswear Castle Trust Limited, the owner of P.S. Kingswear Castle, represents 83% of shares issued. They are held in equal lots by five nominees as representatives of and on behalf of the Society. The shares are shown in the Accounts at their nominal value as shareholders in the Trust cannot benefit from their holdings, as it is constituted as a charity (registered in England and Wales as no. 299931). At 30 April 2011 the aggregate amount of its capital and reserves were £534,678 and its excess of expenditure over income for the year then ended was £15,107.
   2. The holding of shares in Waverley Steam Navigation Company Limited (WSN), the owner of P.S. Waverley, represents 61% of shares issued. The shares are shown in the Accounts at their nominal value as shareholders in the Company cannot benefit from their holdings, as it is constituted as a charity (registered in Scotland as no. SC005832). At 31 October 2010 the aggregate amount of its group capital and reserves were £4,565,459 and its group excess of expenditure over income for the year then ended was £731,114.
2. Loans to Waverley Steam Navigation Co Ltd (WSN): The Society’s loan transactions with WSN during 2011 may be summarised as follows:

    

   	£
   Balance at 1 January 2011	317,201
   Advances	50,000
   	367,201
   Repayments	–
   Balance at 31 December 2011	367,201

   
    
   The outstanding loans are interest free and are repayable on 31 January 2018. It is planned to convert £250,000 to a grant in consideration of a mortgage over P.S. Waverley and provision has made been made to allow for this and to reflect the likelihood of repayment.

3. The Restricted Funds comprise the Restoration and Preservation Fund, which holds funds received for or allocated to P.S. Waverley and P.S. Kingswear Castle and the Balmoral Fund, which holds funds received for or allocated to M.V. Balmoral. The 2009 Appeal proceeds are available for P.S. Waverley, P.S. Kingswear Castle and M.V. Balmoral. The 2011 Appeal proceeds are available for some or all of the vessels, as specified by the donors or the terms of the Appeal documentation.
4. The Streatfield Bequest is available for the general purposes of the Society.
5. Museum Collection Reserve: This represents the net value of donated items, after deducting accumulated depreciation.
6. Commitments: At 31 December 2011 there were no unprovided commitments (2010: Nil).
7. Related Party Transactions: The Society is related to the following companies because it has a significant interest through interlocking directorships.
   1. Paddle Steam Kingswear Castle Trust Ltd (PSKCTL)
      1. During the year the Society made grants totalling £5,133 to PSKCTL.
   2. Waverley Steam Navigation Co Ltd (WSN)
      1. The Society has loaned £367,201 to WSN as explained in Note 4.
      2. During the year the Society made grants of £196,949 to WSN in respect of P.S. Waverley.
      3. During the year the Society made grants of £31,944 to WSN in respect of M.V. Balmoral.
   3. c. Loch Lomond Steamship Co (LLSC)
      1. The interest free loan of £5,000 to LLSC was repaid on 15 September 2011.
      2. During the year the Society made a grant of £9,000 to LLSC out of the provision of £50,000 towards LLSC’s planned major appeal to return P.S. Maid of the Loch to service.
      3. During the year the Society made grants totalling £2,200 to LLSC from other resources.
8. Commitment to P.S. Medway Queen: During the year the Society fully discharged its pledge to contribute £20,000 to New Medway Steam Packet Company (NMSPC) as a contribution towards a new condenser for P.S. Medway Queen.
9. Trustee Remuneration: No Trustee received any remuneration during the year (2010 – Nil). 1 person connected with a Trustee received remuneration of £210 (2010 – £175).
10. Trustee Expenses: 16 trustees received reimbursements of fares totalling £3,803 (2010 – £2,493). There were five trustees’ meetings in 2011 but only three in 2010.
11. Staff Costs and Emoluments: Nil (2010 – Nil).
12. Cost of Reporting Accountant and Other Financial Services: Adey Fitzgerald and Walker received £1,154 for reporting accountant services (2010 – £1,004) and provided no other services to the Society (2010 – Nil).

Independent Accountants Report to the Trustees of the Paddle Steamer Preservation Society

I report on the accounts of the company for the year ended 31 December 2011.

Respective Responsibilities of Trustees and Examiner

The trustees (who are also the directors of the company for the purposes of company law) are responsible for the preparation of the accounts. The trustees consider that an audit is not required for this year under section 43(2) of the Charities Act 1993 (the 1993 Act) or under Regulation 10 (1)(a) to (c) of The Charities Accounts (Scotland) Regulations 2006 (the 2006 Accounts Regulations) and that an independent examination is needed. The charity’s gross income exceeded £250,000 and I am qualified to undertake the examination by being a qualified member of Association of Chartered Certified Accountants.

Having satisfied myself that the charity is not subject to audit under company law and is eligible for independent examination, it is my responsibility to:

• examine the accounts under section 43 of the 1993 Act and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 (the 2005 Act);
• to follow the procedures laid down in the general Directions given by the Charity Commission under section 43(7)(b) of the 1993 Act; and
• to state whether particular matters have come to my attention.

Basis of Independent Examiner’s Report

My examination was carried out in accordance with the general Directions given by the Charity Commission and is in accordance with Regulation 11 of the Charities Accounts (Scotland) Regulations 2006. An examination includes a review of the accounting records kept by the charity and a comparison of the accounts presented with those records. It also includes consideration of any unusual items or disclosures in the accounts, and seeking explanations from you as trustees concerning any such matters. The procedures undertaken do not provide all the evidence that would be required in an audit and consequently no opinion is given as to whether the accounts present a ‘true and fair view’ and the report is limited to those matters set out in the statement below.

Independent Examiner’s Statement

In connection with my examination, no matter has come to my attention:

1. which gives me reasonable cause to believe that in any material respect the requirements:
   • to keep accounting records in accordance with section 386 of the Companies Act 2006 and section 44(1)(c) of the 2005 Act; and
   • to prepare accounts which accord with the accounting records, comply with the accounting requirements of section 396 of the Companies Act 2006, section 44(1)(b) of the 2005 Act and Regulation 8 of the 2006 Accounts Regulations; and
   • which are consistent with the methods and principles of the Statement of Recommended Practice: Accounting and Reporting by Charities

have not been met; or

1. to which, in my opinion, attention should be drawn in order to enable a proper understanding of the accounts to be reached.

Peter Walker
Fellow of the Association of Chartered Certified Accountants
26 High Street
Barry
South Glamorgan
CF62 7EB

Date: 20 April 2012