PADDLE STEAMER PRESERVATION SOCIETY

REPORT OF THE COUNCIL OF MANAGEMENT 2001

The Council of Management presents its Report and the Financial Statements for the year ended 31 December 2001.

The Society is a company limited by guarantee (having no share capital), registered in England and Wales No. 2167853, and a registered charity (No. 298328). The Society is governed by its Memorandum and Articles of Association 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 operates both at national and local levels, through five area Branches. The Council of Management controls the Society and meets four times a year around the country. 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.

P.S. Waverley is owned on behalf of the Society by Waverley Steam Navigation Co. Ltd. (WSN) (itself a charity) and operated by Waverley Excursions Ltd. P.S. Kingswear Castle is owned on behalf of the Society by Paddle Steamer Kingswear Castle Trust Ltd. (also a charity) 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, an independent Scottish charity. These companies are classified as related parties as there are reciprocal arrangements to nominate trustees. Links are also maintained with the Medway Queen Preservation Society.

The Society largely fulfils its aim of supporting the steamers by fund raising for specific projects to restore and preserve them. In 2001 the Society made its final contribution of £48,624 to the First Phase of P.S. Waverley's Heritage Rebuild, mainly for timber decking to the Main Deck and the Engine Room skylight. The remaining unspent provision of £51,691 has been carried forward to the Completion Phase, to which the Society has committed a total of £200,000. The Heritage Lottery Fund has given Stage 1 approval to the project, which is planned to take place during the winter of 2002-03. The Society's total contribution to the entire project is expected to be £1,174,000.

The project to re-boiler P.S. Kingswear Castle was completed in time for the start of the season. The new boiler has performed well and has reduced coal consumption. The Society contributed £8,521 to the project in 2001, giving a total of £9,456. The unspent balance of our commitment of £544 has been transferred to the P.S. Kingswear Castle division of the Restoration and Preservation Fund. In addition, the starboard sponson has been renewed at a cost of £24,848, drawn from the Evans Bequest.

The Society has, for the first time, valued its Museum Collection and it is now shown in the Accounts at £34,875. The Collection has been accumulated over the 43 years of the Society's existence and includes over 3,100 items ranging from ship's wheels to postcards. As many objects as possible have been loaned to museums for public exhibition and secure storage has been rented for the remainder. The Society is very lucky to have such an enthusiastic and energetic Museums Officer as Andrew Gladwell.

The Society Accounts show a net outflow of funds of £29,793 in 2001, mainly to fund the Completion Phase of the Waverley Heritage Rebuild. At 31 December 2001 the General Fund stood at £132,284, the Streatfield Bequest at £117,451 and the Restoration and Preservation Fund (devoted to Paddle Steamers Waverley and Kingswear Castle) at £24,409. These Funds are stated after deducting the £200,000 contribution towards the cost of the Completion Phase of the Waverley Heritage Rebuild.

As the Society has no paid employees 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 and maintenance requirements of the paddle steamers it supports. As these requirements are mainly relatively short term, the majority of the reserves are invested as cash in Common Investment Funds. A proportion is invested in Index Linked Treasury Stock as a hedge against inflation. The Council of Management has identified and reviewed the major risks to which the Society is exposed and established systems to mitigate those risks.

The members of the Council of Management (the Society's Trustees) during the year, who received no remuneration for their services, were:

Elected Members	Branch Representatives
Myra Allen (Vice-Chairman)	Stuart Cameron (Scottish) (appointed 24.11.01)
John Anderson (Secretary)	Don Hiett (Wessex)
Ian Burrows (5)	Roddy McKee (London) (4)
David Haddleton (co-opted 24.2.01)	Pat Murrell (Bristol Channel)
Graham Hand (resigned 24.1.01) (2)	Robert Whitelaw (North)
Nick James (Chairman) (1) (2)
Martin Longhurst (Treasurer) (2)	Representative of Loch Lomond Steamship Co.
Peter Tambling	Michael Hughan (5)
Representatives of Waverley S. N. Co. Ltd.
Alan MacDonald (resigned 24.1.01) (2)	Representatives of P.S. Kingswear Castle Trust Ltd.
Iain MacLeod (1)	John Megoran (3) (4)
Terry Sylvester (resigned 17.4.01) (1)	Alan Peake (3) (4)
Directorships of related party companies:		JOHN ANDERSON Secretary 9 March 2002 Registered Office: 17 Stockfield Close, Hazlemere, HIGH WYCOMBE, HP15 7LA
(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

PADDLE STEAMER PRESERVATION SOCIETY

Statement of Financial Activities for the Year ended 31 December 2001

	Unrestricted	Restricted	Total Funds	Total Funds
	Funds	Funds	2001	2000
	£	£	£	£
Income and Expenditure
Incoming Resources
Donations and gifts	10,002	14,808	24,810	118,714
Fund raising proceeds	39,636	8,870	48,506	25,357
Membership subscriptions	41,811	-	41,811	40,231
Legacies	21,190	44,606	65,796	92,654
Investment income	11,025	1,239	12,264	30,772
Trading Activities	6,980	-	6,980	3,874
Total Incoming Resources	130,644	69,523	200,167	311,602
Resources Expended
Direct charitable expenditure
Grants in respect of:
P.S. Waverley	-	-	-	250
P.S. Kingswear Castle	300	24,848	25,148	-
P.S. Maid of the Loch	-	-	-	1,304
Commitment - P.S. Waverley Heritage Rebuild	30,177	118,132	148,309	681,000
Commitment - P.S. Kingswear Castle Reboilering	-	(545)	(545)	10,000
Paddle Wheels Journals and Newsletters	20,046	-	20,046	18,573
Museum Collection	2,029	-	2,029	1,836
Public Meetings	3,939	-	3,939	2,761
Fund Raising	14,465	4,200	18,665	4,453
Publicity	2,231	-	2,231	1,246
Trading Activities	4,265	-	4,265	3,234
Management and administration of the charity
Council and Committee Meetings	2,101	-	2,101	1,980
General Expenses	3,254	-	3,254	5,891
Audit Charges	517	-	517	487
Total Resources Expended	83,324	146,635	229,960	733,015
Net Incoming Resources/(Resources Expended) re Transfers	47,320	(77,112)	(29,793)	(421,413)
Transfers between funds	(7,937)	7,937	-	-
Net Incoming Resources/(Resources Expended) for the Year	39,383	(69,175)	(29,793)	(421,413)
Other Recognised Gains and Losses
Gains/(losses) on investments
Realised	-	-	-	-
Realised	-	-	-	143
Unrealised	(2,297)	(682)	(2,979)	682
Net Movement in Funds	37,086	(69,857)	(32,771)	(420,588)
Balances brought forward at 1 January 2001	212,650	94,265	306,915	727,612
Creation of Museum Collection Reserve	34,875	-	34,875	-
Balances carried forward at 31 December 2001	284,611	24,408	309,019	307,024

All of the above results are derived from continuing activities. All gains and losses recognised in the year are included above. The deficit for the year for Companies Act purposes comprises the net resources expended for the year less realised gains on investments and was £29,793 (2000 - £387,067).

PADDLE STEAMER PRESERVATION SOCIETY

Balance Sheet at 31 December 2001

	Note	2001	2000
		£	£
Fixed Assets
Shares in Owning Companies
Paddle Steamer Kingswear Castle Trust Ltd.	2	55	55
Waverley Steam Navigation Co. Limited	3	12	12
Loan to Loch Lomond Steamship Company	8	13,745	-
Museum Collection	6	34,875	-
Investment - Treasury Stock		40,203	43,182
		88,890	43,249
Current Assets
Short term deposits
Bank		10,393	10,454
Common Investment Funds		406,164	365,921
Cash at bank and in hand		389	846
Sales Stocks		7,515	626
Accrued interest		530	529
		424,991	378,376
Liabilities
Amounts falling due within one year
P.S. Waverley Heritage Rebuild		200,000	100,315
P.S. Kingswear Castle Reboilering		-	9,065
Sundry creditors		4,862	5,221
		204,862	114,601
Net Current Assets		220,129	263,775
Net Assets		309,019	307,024
Funds
Unrestricted
General		132,284	90,220
Streatfield Bequest	4	117,451	122,538
Museum Collection Reserve		34,875	-
		284,610	212,758
Restricted	5
Restoration & Preservation		-	39,524
P.S. Waverley		-	7,329
P.S. Kingswear Castle		24,409	47,413
		24,409	94,266
		309,019	307,024

These financial statements were prepared in accordance with the special provisions of Part VII of the Companies Act 1985 relating to small companies. They were approved by the Council of Management on 9 March 2002 and signed on its behalf by Martin Longhurst.

NOTES TO THE ACCOUNTS

1. 1. Format of Accounts and Accounting Policies

a. a. 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 2000) and accounting standards, the Companies Act 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.

b. b. 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.

c. c. Netted off expenses and related income: Where sufficient information is available the netting off of expenses and the related income has been eliminated.

d. d. Stocks: Stocks of unsold goods are valued at the lower of cost or realisable value.

e. e. Investments: Investments are valued at market value, except as described in Notes 2 and 3.

f. f. 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.

g. g. Grants: Liabilities arising from grant commitments made by the Society are recognised by creating a provision pending completion of Funding Agreements or fulfilment of conditions at which point the obligation becomes binding.

h. h. Cash Flow Statement: The Society has taken advantage of Sections 246 to 249 of the Companies Act 1985 in deciding not to prepare a Cash Flow Statement.

2. 2. The holding of shares in Paddle Steamer Kingswear Castle Trust Limited, the owner of P.S. Kingswear Castle, represents a controlling interest. 55 shares (out of an authorised 100) 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.

3. 3. The holding of shares in Waverley Steam Navigation Company Limited, the owner of P.S. Waverley, represents 29% 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.

4. 4. The Streatfield Bequest is available for the general purposes of the Society.

5. 5. 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 Evans Bequest, which is reserved for P.S. Kingswear Castle.

6. 6. Museum Collection: The Society owns a collection of relics relating to paddle steamers. In accordance with SORP 2000, the collection has been valued at realisable value and included in the Balance Sheet (for the first time) at £34,875. A Museum Collection Reserve has been created as most items were donated or paid for many years ago. The Collection will be depreciated over 20 years on a straight line basis.

7. 7. Commitments:

a. a. During 2001 the Society agreed to commit £200,000 to Waverley Steam Navigation Co. Ltd. towards the cost of the Completion Phase of the Heritage Rebuild, subject to the completion of a Funding Agreement. Only £148,309 has been charged to 2001 as £51,691 has been carried forward from the First Phase.

b. b. During 2001 the reboilering of Paddle Steamer Kingswear Castle was completed and the total contribution required of the Society was £9,455. The £545 balance of the £10,000 commitment to the project has been added back to the Restoration and Preservation Fund.

8. 8. Loan to Loch Lomond Steamship Company: The Society has granted an interest free 20 year loan of up to £20,000, subject to the Steamship Company raising an equal sum of donations.

9. 9. Related Party Transactions: The Society is related to the following companies as there are reciprocal arrangements to nominate trustees.

a. a. Waverley Steam Navigation Co Ltd (WSN)

i) i) The Society made grants totalling £48,080 towards the cost of the First Phase of the Waverley Heritage Rebuild.

ii) ii) The Society offered WSN an interest free loan of £75,000 between February and July 2001 but the offer was not taken up.

iii) iii) The Society has agreed, subject to contract, to grant to WSN £200,000 in 2002 and 2003 towards the cost of the Completion Phase of the Waverley Heritage Rebuild.

b. b. Paddle Steam Kingswear Castle Trust Ltd (PSKCTL)

i) i) The Society made grants totalling £8,520 towards the cost of reboilering Kingswear Castle.

ii) ii) The Society applied £24,848 of the Evans Bequest to renewing the starboard sponson of Kingswear Castle.

iii) iii) The Society made miscellaneous grants totalling £300 to PSKCTL.

c. c. Loch Lomond Steamship Co (LLSC) - The Society has granted an interest free 20 year loan of up to £20,000, subject to LLSC raising an equal sum of donations.

10. 10. Trustee Remuneration: No Trustee received any remuneration during the year (2000 - Nil). 2 persons connected with a Trustee received remuneration of £258 in total (2000 - £232).

11. 11. Trustee Expenses: 10 trustees received reimbursements of fares totalling £2,077 (2000 - £1,275).

12. 12. Staff Costs and Emoluments: Nil (2000 - Nil).

13. 13. Cost of Audit and Other Financial Services: Adey Fitzgerald and Walker received £517 for audit work (2000 - £487) and provided no other services to the Society (2000 - Nil).

REPORT OF THE AUDITORS

TO THE PADDLE STEAMER PRESERVATION SOCIETY

FOR THE YEAR ENDED 31 DECEMBER 2001

The Accounts and Notes have been prepared on the basis of the modifications available to small companies under Section 6 of the Companies Act 1985.

In our opinion the Society is entitled under Sections 246 and 247 (247 to 249) of the Companies Act 1985 to the exemption conferred by Part 1 of Schedule 8 to that Act in respect of the year ended 31 December 2001 and have been prepared properly from the full financial statements.

On 12 April 2002 we reported as auditors of Paddle Steamer Preservation Society on the full financial statements required by Section 226 (227) of the Companies Act 1985 for the year ended 31 December 2001 and our audit report was as follows:-

We have audited the accounts in accordance with auditing standards.

In our opinion, the financial statements give a true and fair view of the state of the charitable company's state of affairs at 31 December 2001 and of its incoming resources and application of resources, including its income and expenditure, in the year then ended, and have been properly prepared in accordance with the Companies Act 1985.

Adey Fitzgerald & Walker

Accountants and Registered Auditors

Barry

12 April 2002

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