2022-12-31-accounts

Welshpool & Llanfaxr Llght Rallway Preservation Co. Ltd. Annual Report and Aeeounts 2022 Contents Notice of Annual General Meeting ... Page 3 Report of the Board of Trustees ... Page 4 Independent auditor's report . . Page 19 Consolidated statement of fmancial activities...Page 22 Consolidated and ch￿lty balallce sheets ... Page 23 Consolidated cash flow statement ... Page 24 Notes to the accounts . . Page 25 Minutes of the Annual General Meeting held on 15 May 2022 ... Page 40

Admlnlstratxve details Registered office The Station LI9￿(aIr CaereinioTL We15hpool Powys SY21 OSF Phone [phone] Web www.wl]r.org.uk Aeeountants Cadwallader & Co LLP Chartered Accountants Eagle House 25 Severn Street Welshpool Pomys SY2 17AD Auditor W R Partner8 Hafren House 10 St. Giles Business Park Newtown Powys SY16 3AJ Solicitors Lanyon Bowdler LLP 4 St Martin's Street Hereford HR2 7RE C¢)mpany Secretary Michael Reilly General Manager J8rnC5 Brett Operations and Infrastructure Manager Kevin Heywood Engineering Manager James Mander Company number 00646238(Wale5) Registered charity nutnber 1000378

NOTICE OF ANIqUAL GENERAL MEETING The Annual General Meeting of the Company will be held at the station, Llanfair Caereinion on Saturday 13 May 2023 at 5.00 p.m. for the purpose of tr8fAsacting the following business:_ Ordinary Resolutions To receive and adopt the audited consolidated fmancial statements and the report of the trustees for the year ended 31 December 2022. To appoint WR Partners as auditors of the Company and to authorise the directors to determine their remuneration. To elect directors. The Articles of Association stipulate that one- third of directors shall retire annually. Oliver Edwards, John Forman and Robert Robinson retire by rotation and William Bickers-Jones has resigned. There are four vacancies. Details of those offering themselves for election are given in a separate leafiet sent to members. To elect a president. The Earl of Powis has indicated his willingness to be re-elected. To elect vice presidents. Alan Higgins, Tony Thorndike, and Sir Philip Williams have indicated their willingness to be re-elected. Immediately after the end of this meeting, a members, forum will be held. Any member entitled to attend, but not able to be present at the Annual General Meetin& may appoint a proxy to attend and vote on a poll in his or her stead and that proxy need not be a member of the company. A forni of proxy will be sent to all members eligible to vote and should be deposited at the Registered Office at least forty-eight hours before the meeting. Associate members may attend but not vote at the Annual General Meeting. Only persons producing their current membership cards or duly appointed proxies will be admitted to the Meetings. By order of the Board Michael Reilly, Company Secretary

REPORT OF THE BOARD OF TRUSTEES Our mlsslon The company is a registered charity whose formal charitable purpose is- to advance the education of the public in the history and development of railway locomotion by the preseruation of roilwoy IocoTnotives and/or rolling stock and/or historic milway lines. The trustees who served during 2022 were: Number of trystees, meetings t2ttended Actual/Possible Steve Clews Chairnian lain McIEan Vice Chairnian Helen Ashby William Bickers-Jones Simon Bowden Andrew Charman Oliver Edwards John Fornian Peter Green David Jones Bob Mason Robert Robinson The trustees cover the following skill areas: staff, appeals, mechanicaj and civil engineering, finance. health and safety, education, heritage, product marketing, business management and legal. Professional advice is sought as appropriate. This report sets out the trustees, account of the company's work in 2022. It meets the requirements for charity accounting prescribed in the Charities SORP. It also meets the Directors, Report requirenlents prescribed in company law.

Status of the ¢harity The Welshpool & Llanfair Light Railway Preservation Company was incorporated as a company limited by guarantee in 1960 and obtained Ch￿Itable status in 1990. The chaJity has no share capital and the liability of each member, in the event of winding up, is limited to £1. The governing documents are the Memorandum and Articles of Association of the company. Anyone may become a member by payment of the annual subscription. The company has a wholly owned subsidiary, W&L Sales Ltd, which is not a charity and has its own b0￿d and accounts. Its profits gift aided to the preservation company. The charity can have up to twelve trustees. Members of the board of trustees are directors of the company for Companies Act purposes. The articles prescribe that the trustees are elected by the members. As a courtesy to local government, which has been supportive of the company throughout its history, customarily local councils have been invited to nominate a trustee, whose appointment is Subject to approval by members in the usual way. Governance and management The trustees are required by law to prepare financi81 statements, which give a true and fair view of the affairs of the charity and the group at the end of the financial year and of the fmancial activities, total recognised gains or losses and cash flows of the group for the year. The trustees are of the opinion that in Preparing the financial statements on the following pages appropriate accounting policies have been consistently applied, supported by reasonable and prudent estimates and judgments, and all applicable accounting standards have been followed. They are also satisfied that the group has adequate resources to meet its operational needs for the foreseeable future and accordingly they continue to adopt the going concern basis in preparing the flnancial statements. The trustees (who are also directors of Welshpool & Llanfair Light Railway Preservation Co. Ltd for the purposes of company lawl are responsible for preparing the Trustees, Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice}. Company law requires the trustees to prepare financial statements for each financial year. Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the

charitable company for that period. In preparing these fmancial statements the trnstees are required to: select suitable accounting policies and then apply them consistently. observe the methods and principles in the Charlties SORP 2019 {FRS make judgements and estimates that are reasonable and prudent. state whether applicable UK Accounting Standards have been followed, subject to any material dep8Jtures disclosed and explained in the financial statements. prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable company will continue in operation. The trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud arAd other irregularities. In so far as the trustees are aware: there is no relevant audit inforniation of which the charitable company's auditor is unaware. and the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit inforniation and to establish that the auditor is aware of that information. The board meets regularly during the year and subgroups of board members meet from time to time as business requires. The general manager is appointed by the trustees to carry out the policies laid down by the board and to manage the day-to-day operations of the charity. To facilitate effective operations, the general manager has been given authority, within terms of delegation approved by the trustees, for operational matters, including the employment of other staff. The trustees have agreed a written schedule of matters reserved to the board, copies of which may be obtained from the company secretary. The board sets the general manager's rernuneration in the light of annual objectives and perfonnance appraisal. On appointment, trustees are provided with the Charity Commission's current guidance for new trustees. Trustees allocated specific responsibilities according to their individual skills. Induction to the ch￿Ity'S operations is not considered necessary as trustees usually drawn from the ranks of working members. However, they are encouraged to identify their own training needs. Trustees are provided wÉth the updates and relevant information from regulatory bodies, including the Ch￿lty Commlssion, Office of Rail and Road IORRI, Rail Accident Investigation Branch and the Heritage Railway Association.

Rlsk management The company has a formal risk management process, identitying in detail the risks to which it is exposed. The board of trustees keep six registers of risks to the business. These cover risks at a company level relating to commercial, external, finance, governance, operations, and personnel matters, both short- and long-term. A trustee takes the lead responsibility for the process and a representative from the board or management takes ownership of each register. Emergent and changed risks are identified, discussed, and documented at each board meeting. An annual review of all six registers was held in January 2022. The railway management reviews and manages operational risk through a documented risk assessment and mitigation process. The process is managed by the safety officer with heads of department providing departmental input. These risk assessments were extensively reviewed and updated during 2022 following the 202 1 safety audit. Health and safety The safety and welfare of visktors, staff and volunteers takes precedence over all other activities. There were no reportable incidents on the railway in 2022. There were several operational incidents, ne￿ misses, and injuries which were recorded and investigated using our internal processes with reporting to the board at each meeting, relevant safety improvements instigated and notices and briefings issued to staff. Restrictions imposed in response to the Covid- 19 pandemic were gradually phased out during the first half of the year in line with Welsh Government guidance but screens at Se￿iCe points, hand sarLitiser stations and the continued encouragement of advance booking to prevent overcrowding were retained to provAde rèassurance. In response to the 2021 safety audit an action plan, led by the general manager and safety officer, has seen improvements to document control. competence management, a new incident and near miss reporting system, internal auditing and other progressive measures. Railway staff continue to work with the Heritage Railway Association, other railways, and industry to share changes and best practice. Staff attended a variety of safety-related training courses throughout the year including rirst aid, asbestos awareness, food hygiene and allergy awareness. The railway continues to invest in new equipment to provide a safe and efficient working environment. A new tractor with front loader was purchased to mechanise several manual handling tasks.

ObJe¢tlves The principal objective of the company continues to be to advance the education of the public in the history a￿d development of railway locomotion. This encompasses the following three subsidiary objectives: the preservation and operation of the eight-mile narrow gauge light raklway between Welshpool and Llanfair Caereinion. the generation of funds to finance the acquisition and restoration of r￿ed assets and for the operation of the railway, including the necessary maintenance, renewals and replacements. the continued encouragement of an active membership to provide the necessary volunteer manpower and to preserve or acquire the appropriate skills. Publlc beneflt The board has had regard to the Ch￿lty Commission's guidance on public benefit. Of the charitable purposes set out in the Charities Act 2011, the r￿lWaY principally contributes to bj the advance￿ent of education... and 11 the advancement of the arts, culture, heritage, or science... The public benefits of the charity are: the preservation of one of the first British railways built under the auspices of the Light Railways Act 1896; the conservation of its heritage assets and equipment for public enjoyment. the educatÉon of the public in the history of railway locomotion; the preservation and passing down of craft skills. In carrying out these benefits to the public, the charity seeks to minimise harni to the environment. Any member of the public may: travel on the public scheduled services. view the stations and buildings without payment whenever the railway is open. view how the railway and its operations feature in the landscape at any time. All members ol the company are eligible to train for any volunteer job on the line, including skilled and safety-critical jobs, subject only to health and safety assessments. Company members enjoy concessionary travel on the railway, but all other private benefits of membership are incidental to the aims and objectives of the Ch￿lty.

Aehlevements and perfornianee The railway built upon the successful service developed during 2021 to rebuild passenger numbers and revenue wlth an expanded programme of special events and experiences. A timetable was delivered that could be operated in line with Covid-secure precautions if restrictions had been reintroduced. Trains operated on 179 days with a mixture of one- and two- hour trips from Llanfair Caereinion proving popular with visitors. Welshpool station was opened on more days than during the previous two years, with more trains serving it arAd the reintroduction of regular passenger boarding there from June. Despite the impact of the rising cost of living on customer spending, passenger numbers were 92% of 2019 levels. Revenue from r￿lWaY operations exceeded the budget and marked an increase of over £lOO,000 compared with 20 19. The year saw the welcome return of our Steam Gala and Santa Specials in their traditional formats alongside the introduction of new events which drew in different audiences. Premium experiences, catering and special events helped increase our income per passenger, ensuring the company ended the year in a stable financial position. Our station tearoom reopened at the start of the year serving its traditional fare. A cooperative Model was operated 8longside the outside catering unit provided by 4 Seasons which offered alternative hot food, bringing in additional revenue and providing a service to the wider community on days the te￿00M was not open. All departments at the railway contributed to these successes, often adapting to operational changes at short notice. Operating staff shortages during the peak season required short notice reductions in the timetabled services. The engineering team worked hard to keep both No. l The Earl and ZB2 Zillertal in service, alongside m81(ing substantial progress on major overhaul projects and supporting the work of other departments. Our civil engineering and buildings departments worked year-round to maintain the railway infrastructure and estate, ensuring its safety and operational reliability. Alongside taclding the backlog of tasks due to various restrictions of the past two years, the major notable success was the rebuild and commissioning of Sylfaen station passing loop to increase our operational flexibility. Our Ilanfair Connections, VASitor centre welcomed a regular flow of visitors, boosted by the arrival of Cloverlands Model Car Museum from its previous premises in Montgomery. Its collection was installed and opened in stages during the year, enhancing the scope of displays for our VASitors. Behind the Scenes, our staff worked to ensure that safety regimes were maintained, marketing and administration e￿icientIY conducted, and roster8 managed. Recruitment and training of sufficient volunteers to

support activities across all areas of the railway remains a constant priority however. Track. infrastrnctllre and bulldlngs The railway now has a qualified civil engineer on the team, enabling progress in more areas. Significant work included re-railing at Tanllan, Cwm Curves, Llanfair station area, Castle loop, and Mill Curves. Tree maintenance and removal of storni damaged trees obstructing the line continues to be a major feature. One drawback was a shortage of rolling stock for works trains but recommissioning of our Baguley-Drewry railear The Wasp aided flexibility, especiajly for lighter work. The midweek gang was busy all year, with projects including refurbishment of S&T equipment, numerous instances of drain clearance and assorted plumbing repairs, supplementary work to the shop and ticket office counter at Llanfair, and the perennial grass cutting, shrub taming, and gutter clearance. Roof leaks were a major contributor to problems in 2022, and quotations are now being sought for re-roofing the fonner Colinette building. Welshpool station was repainted, &nd drainage work to reduce the persistent flooding at the rear of the Colinette building and around the ashpit area undertaken. This involved laying a new drain, new manholes and a connection to the dr8in which previously discharged straight from the A458 road onto our track bed. Steam locomotlves In 2022 the steam locomotive fleet accumulated a total of 7476 miles of which No. l The Earl completed 5418 rniles (72%) and locomotive ZB2 Zillertal, on-hire from the Zillertalbahn, 2058 miles128%1. Including for test 8￿d running-in purposes, No. I was in steam on 167 days. ZB2 on 60 days. The number of steaming days for one loco is a W&L record in preservation, this previously being 149 for No. 2 in 2019, but the Tnileage is not, the record being 59 15, also for No. 2 that year. The difference is due to the significarLt number of trip8 run only to Castle in 2022. Work continued at Llanfair on the overhaul of No. 10 &r Drefaldwyn. Due to difficulties with the supply of steam coal, much of the year was spent running the locomotives on ajternative fuels as described below in Environment., These operations included extensive trialling of the various types available. Whether coal or ally forni of ￿10-fUel,, towards the end of the year our solid fuel costs were more than twice those of 202 1. io

Rojling stock The carriage fleet accumulated a mileage of 27405 in passenger service during 2022. SLR carriage 1066 was dispatched to Statfold on 4th April for conversion from 3rd to 2nd class. Carriage C572 was withdrawn in October due to corrosion to the Llanfair end headstock, upon which repair work started before the ye￿-end. The two ex-RNAD ammunition wans - W&L numbers 86 & 87 - had Grondana couplings fitted and the majority of the bodywork refurbishment has been completed. Diesel locomotlves Diesel locomotive No. 7 Chattenden was failed during the year due to unacceptably worn tyre profiles. The wheelsets were subsequently removed and dispatched to the VOR workshops at Aberystwyth for reprofiling. With the wheelsets removed, the opportunity was being taken towards the end of the year to recondition the a￿eboXeS. Diema locomotive No. 17 saw extensive service on engineering trains in addition to accumulating 704 miles on passenger trains. No. 20 The Wasp had not seen service during 2020-21 but with No. 7 unavailable our small personnel carrier proved of use to the track gang towards the end of the year. Educatlon and heritage The railway meets its formal charitabIe purpose by preserving the heritage and providing learning opportunities for all visitors. tn 2022 Llanfair Connections was open to the public between Febru8ry half term and October half terni and welcomed 3,389 visitors during the year. Opening continued to be restricted by the lack of volunteer stewards and our goal for the future is to open daily when trains running. Mid-year saw volunteer steward Dave Plume take over responsibility for the maintenance and operation of Llanfair Connections as manager, leavAng Helen Ashby as head of department to concentrate on collections development and management. During 2022 a new exhibition about wool was added, reflecting the original purpose of the railway and the forn)er use of the Colinette building as a wool factory. A new display on the early years of preservation was also added, and the children's activities that had been removed during the Covid restrictions were reinstated. Family activities and education resources linked to the Paddington Bear event proved very popul￿ and will be used as a template for future special events. li

The transfer of the Cloverlands Model Car Museum from Montgomery has added to the displays in Llanfair Connections and is proving very successful. Collections management standards were improved through the transfer of the collections inventory into the HOPS database and through the setting up of a collections working group to discuss and agree potential acquisitions, disposals and new interpretation across the railway. Envlronment We continued to take steps to reduce our carbon footprint, conducting trials with two types of smokeless coal briquettes alld one bio-fuel alternative. Our engineering team and loco crews adapted our locomotives and their operating techniques accordingly and we subsequently gave feedback to the producers to help improve their products. With heavy overhauls of our diesel locomotives planned, consideration is being given to adapting them to run on altematives to fossil-based ￿e1. Similarly in the refurbishment of buildings, consideration has been given to improving the fabric and their services to ensure we adopt the best of current practices and ensure their longevity. In 2022 we started using sleepers made from recycled plastic. Though more expensive than timber or concrete and needing the track gang to develop new methods of handling and use, they are predicted to have a very long life) good performance and reduce our C￿bOn footprint over the long term. We have moved away from reactive cutting back of lineside vegetation 8nd aim to become more pro-active in its management, paying attention to the impact on flora and fauna and our legacy to future generations. Fundratslng It was another good Ye￿ for voluntary income. The llailway Transfornied, appeal, for coaches and diesel locomotive Cl￿ttenden, contributed over £55,000 donation income. Outline drawings for a new first-class coach were drawn up, and we sent ex-sierra IEone Railway coach 1066 to a contractor for an upgrade. Legacy income was no less than £467,000, with more to come in 2023 as some estates were being wound up. We also received a small amount of grarkt and consultancy income. W85L Sales The further relaxation of Covid restrictions in 2022 allowed both the shops and the tearoom to be open. The departure of the tearoom manager in early August, while saving salary costs, reduced the ability to manage them as 12

effectively as hoped. The contracted mobile catering unit remained in place at Llanfair. The result was an overall contribution to the parent charity of almost £37.000. In 2023 we will operate our own catering unit, and this should increase sales considerably. Staffing of both shops proved problematic but a rebuild of the shop counter at Llanfair will allow Station Masters to cover the shop as well as ticket sales, easing staffing requirements. The trustees would like to thank all those who contributed over the year to the running of the shops and tearoom. Membershlp and volunteers The railway is fortunate in having the consistent support of its members, many of them of 25 ye￿8 plus standing. Total membership at the end of 2022 was 1,916, which is 100 fewer than in December 202 1. We had 176 new members but 267 left, including 26 who passed away. Lower recruitment is attributable to visitors who, having already booked online, e less inclined to join as members on the day. We do gain many new members through our social media presence, but recruitment at the railway will receive additional focus in 2023. Members also encouraged to invite friends and colleagues to join. The volunteer liaison committee completed a survey gKving it a clear picture as to how many volunteers we have and where there is need for more recruitment. A more flexible approach to training was adopted, so it should be easier for volunteers to progress in their chosen area of interest. Staff In 2022 the company employed seven full-time and one part-time staff. plus there are around 220 part-time volunteer staff contributing about 24 full-time equivalent staff 3nd some seasonal staff in the tea-room. This is a considerable reduction in volunteers on previous years and resulted in an unavoidable reduction in services. Trustees are grappling with the problem. During the year the Covid safe operations strategy and rules were slowly reduced to zero in line with government guidance. Development of a comprehensive staff guide was started. In February Ruth Davies was appointed as events apprentice, a new role enabling us to organise more events. In March James Mander was appointed as engineering manager and has settled into his role well with a noticeable increase in volunteers in the department. 13

Also in March, Stephen Garner was appointed as catering supervisor but left at the end of August. Recruitment of his replacement started towards the end of the ye￿. The trustees are most grateful to all the staff, paid, seasonal and volunteer, for their forbearance, patience, and h￿d work during another difficult year. Marketlng The year 2022 saw continued development of our marketing efforts. Online marketing is now central to our promotional efforts using our website and social media channels to good effect. We contknue to see high levels of engagement with offers for special occasions such as afternoon tea. Our leajlet layout was revised and improved with new artwork produced to celebrate the 120th anniversary of the construction of locomotive Nos. I and 2. Limited options in the leallet distribution market mean that we are bringing in a more local focus, with direct contact between the railway and individual attractlons and accommodation providers. Introduced in 202 1 with our new booking system, our anonymous post-visit survey collection continued to give us considerable evidence about the views of our visitors. Senior management and trustees review these to ensure that our events. experiences and facilities continue to meet visitors, expectations. Flnanclal revlew Results and flnanclal posltlon The trustees are of the opinion that in prep￿ing the financial statements and related notes, appropriate accounting policies have been consistently applied, supported by reasonable and prudent estimates and judwents, and that all applicable accounting Stand￿dS have been followed. They are also satisfied that the group has adequate resources to meet its operational needs for the foreseeable future and accordingly they continue to adopt the going concern basis in preparing the fmancial statements. Traffic income, boosted by experimenting with a wide range of events and special experiences of on-train catering and first-class travel was up an impressive 57 % ' 260/0 {£78,0001 if we allow for 202 1 still being affected by the pandemic. For the first time we offered vÈsitors the opportunity to Gift Aid their fares, this generated an additional £27,000. Unfortunately cost increases absorbed much of the extra income, with coal and alternative solid fuels £50,000 higher while events cost £60,000 to put on. Re-opening the tearoom, while a great step fOrnv￿d, involved costs of £25,000, including recruiting our own catering manager. 14

W&L Sales, surplus, which the railway relies on as a contribution to day- to-day operations, was £37,0001202 1 £33,000), some £20,000 lower than the amount typically contributed in past yea￿. The railway's electricity prices for 2022 were still on a f￿ed price contract. For 2023 these will treble, resulting in an additional £20,000 cost. Total incoming resources (consolidated statement of financial activities) were again above £1 million at £1,215,000 due to: Traffic income recovering after the pandemic and rising a further 26 % due to new events and other initiatives: More operating days resulting in more retail sales and catering benefAtting from the tearoom re-opening. National Lottery Heritage Fund support on audience research and training. £83,000 in donations from our many supporters, including donations with fares and supplernented by Gift Aid. £535,000 in legacies from ch￿leS Fisher, David Th0n￿s, Ian Waters, Roger Pattie and Roy Laverick. Rising interest rates, so that the funds we hold for reserves and upcoming major projects generated an extra £10,000. Note 3 shows the railway's operation and preservation costs. In addition to the main capital projects capitalised separately, major project expenditure here includes winter track relays and costs relatÉng to assessing locomotive No.14 (ex-SLR 851. Costs for special trains and events include the incrementaL costs for events such as hiring in locomotives, artists, fees and Christmas presents for Santa trains. Administrative costs {Note 61 show marketing £22,000 lower as 202 1 had one-off costs for the new website 8nd online booking. External training is £4,000 higher as we made more use of this with some topics supported by the NLHF gr8llt. Hygiene costs include PPE; we include the cost here even when the relevant volunteer makes a contribution, which goes to donations. Thanks are due to those who have helped in this way. IT costs are £10,000 lower as 202 1 had the Solidworks sOftw￿e purchase, but in the sub-section Financial, we have extra costs on card processing and online booking due both to the higher volume of sales and the greater level of inforniation and control we have with our new EPOS system. Staff costs were higher than 2021 as we had two additional permanent staff: a catering manager and an events apprentice. The CCLA investments (Notes 7 and 131 delivered &8,000 in dividends, but the valuation at 31 December 2022 was £33,000 lower {2021 had a £35,000 gain). The valuation has improved since Ye￿-end and this investment is held for the long-tenn. 15

Our consolidated statement of financial activities follows the forniat required of all Ch￿ItIeS. It shows all incorne and expenditure on one sheet but does mix long-term and short-tenn activities. Note 25 summarÈses the income and costs for our different activities in a management accounts forniat. This shows both day-to-day income and costs by activity, including those donations and grants given to cover specific operating expenses. Long-term donations are shown separately below, along with how they are spent, sometimes in a different period from when they were received. The additional cost of our audit is also shown as an audit is only required when Income exceeds £lmillion. The generosity of members and other supporters meant that donations and legacies received in 2022 earmarked for long-tenn projects contributed £581,000 that can be applied to the many priorities within the business plan. Capital expenditure in 2022 was £225,000. In ￿eritage r￿ed assets, this was work on converting carriage SLR 1066 to second class and towards completing No. 10 Sir Drefaldwyn. In 'Other tangible r￿ed assets, it was improvement works to enable us to rent part of our units to Cloverlands museum, overhauled bogies for caThiage MAV 430, work on the tool vans, a new tractor, two defibrillators, our EPOS systern, a new air compressor and other replacement equipment. We have also capitalized transport costs for locomotive DL-34 (paid in advance of delivery) and will amorttze these over its expected loan period from 2023. Contlngent Income The charity is expecting further payTnents from two legacies already notified. The amounts could not be estimated with reasonable certainty at the date of this report, but the total could be £40.000. Restrlcted funds The charity has accepted donations arAd legacies for restricted funds only when the aims of the fund fit within its overall objectives and business plan. During the ye￿, £49,000 was transferred to the carriage improvement fund from unrestricted funds as the original donor was known to have an interest in caJriage improvement though the funds were not donated with any restriction specified. Existing restricted funds for No.7 Chattenden and other diesels, carriage improvements and maintenance, and viaduct protection are planned to be used in the coming years. The 2020 appeal and heritage wagon funds are awaiting approval of suitable projects. Funds for the restoration of locomotives No. 14, No. 8 Dougal and No. 6 Monarch for longer term projects. 16

Designated fund The trustees have a designated fund earmarked for fLtting out and displays as our interpretation centre plans evolve. R¢8erves poll¢y At the year end, the charity faces four months with little income but with expenditure rnnning higher thaji norn]al. This is when major work is undertaken on civil and mechanical engineering, refurbishment, and capital items, when coal stocks are replenished and when W&L Sales restocks the shops and te￿00m. Reserves, in the forni of freely available funds, therefore needed to cover this period and the start of the operating season until an adequate cash flow builds up from takings, usually in June. The trustees consider six rnonths, unrestricted fund expendkture, plus any approved capital expenditure not already received in the form of a restricted fL￿d, as an appropriate level of seasonal reserve. This is cajculated to be £550,000. The trustees have also decided to retain long term investments, not only to provide bridging finance for restoration, capital projects or purchases until any relevant appeal generates the required money, but also to provide a margin for contingencies. This figure is calculated in line with Charity CommÈssion guidelines bearing in mind the railway's risk management, the overall condition of the infrastructure and the level of insurance cover we purchase. The trustee8 consider £250,000 to be an appropriate additional reserve. Adding these two figures. reserves of £800,000 were required at 31st December 2022, whilst actual investments, eash and working capital readily available (so excluding stock) stood at £1,560,000. Investment pollcy The charity's Memorandum of Association gives the trustees discretion in the investment of ftmds. The trustees consider that investments in the CCLA Investment Ma￿agement'S funds, destgned specifically for charities, offer appropriate investment vehicles. The short-tern] reserves are invested in a deposit account. which has consistently provided a better return tha a commercial bank or building society. Longer-term funds are invested in the investment fund untts which is an ethical fund. The investment managers remain positive on the medium- and long-tenn prospects) preferring equities to fixed income assets. THE FUTURE 2022 carried on in presenting the company with major challenges. We were fortunate to have returned an excellent performance Compared to 20 19 but with very different operations. Because of the pandemic and subsequent 17

commercial uncertainty, the pl8nned update of the business plan was further delayed into 2023. The major strategies that had been signed off are being rebased due to the reduction in numbers of operational staff. Development of the next ten-year business plan will be completed during the first half of 2023. A safety audit will be completed early in 2023 to allow off-season time to address the recommendations from the last audit. There will be a focus on addressing the subsequent recommendations prior to a follow up audit at Ye￿ end. Uncertainties and commercial chajlenge will continue throughout 2023 as we face the cost-of-living crisis and a knorm81' that has changed since 20 19. Planning has concentrated on ensuring that reduced resources can cope with the timetable. our high end offering and events have been further prioritised to increase spend per visitor. However, some flexibility, with a degree of short-range planning will still be needed. As in 2022, this will need excellent operational communication and marketing with a focus on regular updates. We will consolidate the range of offerings that were given in 2022, including increasing the range of catering as we bring our mobile catering unlt into operation. The lessons leamed from the last three years and considerable visitor and volunteer feedback will be built on as we push towards increased operational income and contribution to the charity. The major projects advisory group was reactivated during 2022 and this will be invaluable in infonning the business plan as we continue to evaluate our options for site development. During 2023 we will continue to build on networking and lobbying through connections with HRA, GLTW and expansion of our liaison railways and organisations. The efforts to preserve and improve the appearance of the railway to ensure it remains attractive to visitors will be prioritised in 2023 and beyond, with efforts made to further catch up on previously deferred maintenance. During 2023 there will be an increased focus on volunteer recruitment as this has now become critical to the future of the company. This will involve a more focused campaign to volunteer posts. The charity remains extremely grateful for legackes and donations received over past years. Where an indication of possible use for such finances has been given, consideration will be gkven to accede to those wishes. It must be stressed however, that unrestricted legacies and donations give the railway considerably more flexibility of purpose in these difficult financial times. Steve Clews Chairm8n 18 m￿ch 2023 18

Independent Audltor's report to the Trust¢¢s of Welshpool & Llanfair Llght Raliway Preserntlon Co. Lt(L OpknAon Wc have audited the financial statements of Welshpool & Llanfair Light Railway Preservation Co. Ltd. Ithc frarent charitable company) and its subsidiaries Ithe 'group'l for the year ended 31 December 2022 which comprise the consolidated statement of rinancial activities, the con801idat¢d bajance sheet, the parent charitable company balance sheet. the consolidated cash flow statement and notes to the financi8J statements, including significant accounting policies. The fjnancial reporting framework that has been applied in their preparation 18 applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practicel. In our opinion the f￿anCIal statcrnents". givc a true and fair view ofthe state of the ￿0up'S and parent charitable company'$ affairs as at 3 1 December 2022, and of the group's incoming resources and application of rcsources, including its incorne and expenditurc, for thc ycar thcn cnd¢d. have been properly prepared in accordance United Kingdom Generally Accepted Accounting Practice. and have been prepared in accordance with the requirements of the Companies Act 2006 and the Charities Act 2011. Basis for oplnlon We eondueted our audit in accordance with International Standards on Auditing IUKI {ISAs IUKII and applicable law. Our reswnsibilities under those standards are further described in the auditor rcsponsibilities for the audit of the financial statements section of our report. We are independent of the group and parent charitablc company in accordance with the cthical requirements that are relevant to our audkt of the financial statement$ in the UK, including the FRC'S Ethic￿ Standard. and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that thc audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Con￿ll$10n6 relatlng to golng concern In auditing the financial statements. we have concluded that the trustees. use of the going concern basis of accounting in the preparation of the financi8] statements is appropriate. Based on the work we have perforrned, we have not identified any rnaterial uncertainties relating to events or conditions that, individually or collectively, may cast $ignifLcant doubt on the group and parent charitable company's ability to continue as a going concern for a pcriod of at least twelve months from when the financial statements are authorised for issue. Our responsibtlities and the responsibilities of the twstees with respect to going concern are described in the relevant sections of this report. Other Infornwtlon The other information compri8e$ the infonnation included in the Report of the BoO￿ of Trustees, other than the financial statements and our auditor's report thereon. The trustees are responsible for the other information contained within the Report of the Board of Trustccs. Our opinion on the financial statements does not cover the other information and. except to the cxtent othe￿iSe explicitly stated in our report, we do not expre$$ any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing 80. eonsider whether the othcr inforTnation is materially inconsistent with the financial statements OT our knowledge obtained in the course of the audit or othcrwise appe￿ts to be materially misstated. If wc identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise tr) a mateTial misstatement in the financial statements themselves. If, based on the work wc 19

have pcrfgrmed. we conclude that there is a matcrial rnisstatcmcDt of this other infonnation, we required to report that fact. We have nothing to report in this regard. Oplnlon on other Iiiatter8 pre8¢rlbed by the Companles Act 2006 In our opinion, based on the work undertaken in the course of the audit: the information given in the tru$tee$' report lor the financial year for which the financial statements are prepared is consistent with the financial statetnents. and the annual report has been prepared in accordance with applicable legal rcquirements. Matters on which we are requlred to report by exception We have nothing to report in rc$pect of the following matters in relation to which the Charities Aet 2011 requires us to report to you if, in our opinion: adequate and sufficient accounting records have not been kept by thc parent charitable coLnpany> or returns adequate for our audit have not been received from branches not visited by us. or the parent charitable company's f￿anCIal statements are not in agreement with the accounting records and returns,. or certain disclosures of directors, remuneration specified by law are not made. or wc have not received all the inforniation 8J)d explanations we require for our audit" or the trustees were not entitlcd to prepare the financial st&tements in accordance with the small cornpanies, regime and take advantage of th¢ small COTnpanies' exemptions in preparing the Report of thc Board of T￿SteeS and from the requirement to prepare a strategic report. Respon81bllltle8 of trustees As explained more fully in the trustees, responsibilities statement included in the Report of the Board of Trustees, the trustees (who aJe also the directors of the parent charitablc company for the pury)oses of cornpany lawl are responsible for the preparation of the rinancial statements and for being satisfied that they give a t￿e and fair view. and for such internal control as the trustees detennine is necc88ary to enable the preparation of financial statements that are free frorn rnaterial misstatement. whether due to fraud or error. In preparing the financial Statements. the trustees are responsible for asse88ing the group and parent charitable company's ability to continu¢ as a going concern. disclosing> a8 applicable. matters related to going ¢oncern and using the going concern basis of accounting unless the trustees either intend to liquidate the group or parent charitable company or to cease operations. or have no realistic alternative but to do 80. Audltor re8pon¥lbllltle$ fr•r the audlt of the flnanelal 8tat¢ment8 We have been appointed auditor under section 151 of the Charities Act 2011 and report in accordance with this Act. Our objectives are to obtain reasonable assurance about whether the financial statement8 as a whole arc free from material rnisstaternent, whether due to fraud or error, and to issuc an auditor's report that includes our opinion. Reasonable assurance is a high level of assuTance, but is not a guarantee that an audit conducted in accordance with ISAS IUK) will always dctcct a rnaterial misstatemcnt whcn it cxists. Misstatements can arise from fraud or error and considered material il, individually or in the aggregate, they could reasonably be expected to infIuence the economic decisions of users taken on the basis of these financial statements. Irregularities. including fraud, instances ofnon-compliance with laws and rcgul&tions. We design procedures in line with our resp)nsibilities. outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irrcgulayities. including fraud is detailed below: The audit tearn obtained an understanding of the legal and regulatory frameworks that are applicable to the charitable company 8nd determined that the m08t significant are those that relatc to the reporting framework (Charities SORP IFRS 1021, the Companies 20

Act 2006 and the Charities Act 2011, the relevant tsx compjiance regulations, employ￿¢At law, Health and S8lety Regulations and the EU General Data Protection Regulation IGDPRI. Wc understood how the charitable Company and group complying with these framework8 by ll￿1ng enquiries of managernent. those charged with governarlce and th0￿ responsible lor legal and compliance procedures. We also reviewed board Minutes to identify any recorded instances of irrcguiarity or non-compliance that thight have a material impact on the financial statements. We as8es8ed the susceptibility of the charitable company and group's fujancial statements to material misstatement, including how fraud might occur by meeting with key rnanagcment and those charged with governance to understand where they considered there was 8usceptibility to fraud. Based on our understandingj procedures involved enquiries of management and those charged with governance, tuanual journal entry testing, cashbook rcviews for large and unusual items and the challenge of significant accounting estimates used in preparing the financial statements. Because of the inherent litnitations of an audit. there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk incrca8C8 the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become awarc of instances of non- compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery. collusion, omission or misrepresentation. A further description of our responsibilities is av8ilable on the FRC'S website at: https.'//www.frc.org.uk/auditors/audit-assurance/auditor-s-re8ponsibilities-for-the- audit-of-thc-r1ldescription-of-the-audito￿/oE2OA8o % 99s-responsibilities-for. This description form8 part of our auditor's rcport. Use of our report This rewrt is madc solely to the charitablc cornpany's trustees, as a body> in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. Our audit work has been undertaken so that we might state to the charitable company's trustccs those matters we are required to state to them in an auditor's rcp)Tt and for no other purpose. To the fullest extent permttted by law, we do not accept or assume responsibility to anyone other than the charitable company and the charitable Company's t￿SteeS as a body. for our audit work, for this report. or for the opinions we have formed. WR Partners Chartered Accountants Statutory Auditors Hafren House 10 St. Giles Business Park Newtown Powys SY16 3AJ 24 March 2023 21

Consolidated statement of fuAncial actlvltles for the year ended 3 1 December 2022 (incorporating the income and expenditure account} UDrestricted funds Re5trirted Totsl 2022 Total 2021 Income from: No VoluRtsrylncoFné Donarions, legacies, and grants 622,400 12.059 634,459 IJ)S0,SS6 Churttobleactj￿tIe5 Railwayop¢ratioll andprEservatio Membership subsaiptions 387.705 387,705 348,660 21,629 21.629 20.861 Otfvertroding activjties Commercial tradlng (kperatiODS 153.BOO 153.800 84.239 lnve5bnentln￿￿È 12,870 4,520 17.390 7,576 Total income I,J98.404 16.579 1214,983 I,Sll,892 Expenditure on: ChcritGbleoctivitiÉs Railway operation and pre5e]*aOon - WOTking Railway operatiortand preservation projects Membership and governanee expenses 509,061 4,604 $13,665 SZ2,266 208,678 61.225 269.903 316,88B 28.269 28269 20,Z23 OthertrGdlng octivitles Jmmercial tradingopeiition$ 141.486 141.486 66,20B Total expenditure 887,494 65,829 953.323 925.585 Net8alrt/[los$l oti investynents Net Ancome/(espenditure) for the year Gross transfersbetween fi]nds 13 (33,000) {33,0001 35,000 277,910 [49,ZS0] 228,660 621.307 zo 148,5331 48,533 Net movettkeniln futsd$forthe year Reconciliotton offynd5". Total funds brou8hiforward 229,377 (7171 228,660 621.307 2.767,043 193.930 2.960.973 1339,666 Total funds carried forward 2,996,420 193,213 3,189,633 2,960,973 The above resultsareallderivedfrofft£orttillUiTrg activittes Allgoins and105sesrecG9Ntsedln theperlodore included above. Thesurplus/(deficitJfor they¢arforComponlesActpurposescomprises thenetincomefortheyeorincludlrtg thegain on the revaluation oftheinvescmentsondumountsto asurplusof£228,660 {2021 £6ZIJ07suryltssJ. 22

Consolidated and charity balance sheets as at 3 1 December 2022 Group Charity Company RegLsEratioii No￿0646238 2022 2021 2022 2021 Fixed assets Note Herltage fixed assets li 85S350 85&350 Othertsn￿b[e fixedassets 12 655474 655,474 Investroents 13 2￿1￿10 289,OtK) 286JM 319,(NJO I￿0￿34 L799BZ4 USO334 29,824 Current assets Stocks 14 104100 9SZOO 73WO Debtor5 15 179hTJ 15&245 179,473 1598 COIFdepositaccount 984035 8OQ679 98¢￿35 800.679 Bankaccvuntsandcash b31ances 16 2￿￿65 234984 IW30 216014 IA69ArJ 1209.100 L430.530 1249.S71 Creditors: amounts f311in8 due within onEyear 'rrade creditors 1¥230 37,703 IV30 37Tr7 Othercredirors Indudingtsx at social security 3289 1608 n￿l$and deferred income 18 54285 $1,059 72.183 10%364 Net current assets 1191238 135WS I1442O7 Creditors: aniounts Fallin8due aftorrnoTC than Dneyear 18 31270 31.fE9 3LO89 Total net8ssets 3,189fi33 2,960.973 3,177J19 1941942 The funds ofthe charlty: Unrestricted fi]nds 2,91WI 51.879 171fi675 Z,934227 2*99fj44 5Q368 Designated funds Totsl unrestritted funds 19 19W20 I767,￿3 19B4.106 2.749X>I2 Restricted Èncome tunds 20 193213 191930 193213 193,930 Total funding provided IIWJW3 1960,973 &177J19 1941942 The entitywHS entitled to èxÈmpti(bn fmm #tsdltU￿dèrIÈthftn 477 thft￿ r￿Mpan1è¢Act2￿Qfi. rhe members have not requiredthe entityto obtain atLauditfortheyearin question inaccordance ￿thsectiOn 476 ofthe Companie5 Art 2006. HoweveT, an audit isrequlred In accordance wirh settion L44ofthe CharitiesAcr2011. The W$￿e$ acknowledge their responsibilities FOT comply￿8 with thc requircTDentsoFthe Artwith resp¢cttoaccDunting Tetord5and preparation of financial ststomenr& The financial staternentshave bcen PTppared illa¢¢tsrdancewththE provislonsappl(cable to entitiessubjertto the Small companies regime. The financial statements were approved and authorised for issue by the Trustees on 18 March 2023 and ssgned on their b Ifb Steve Cle s (Chakrman of the Trustees) lain McLean (Vice Chairman) 23

Consolldated cash flow statement for the year ended 3 1 December 2022 202Z 2021 Nute Net cash provided by/(used In) operating activities 23 367.364 538.988 Cash flows from Anvesting activities: 25 Dividends inv¢stnLents 7.663 7.466 Acqui*titrnof herita￿ and othertsnDble flKed assers t224.790J 1169.B27) 12 Di5PDsal oftsnglble fix¢dassets (Acquisltton) / divestment ofinvesttnent a55ets 13 Net cash provlded by l (used In] Investing a¢tivities (217.127) 1162,3611 Cash flow from flnanclng activities: Pinancingacbvities Inyear Net cash provfided by/{used in) rinanclng activities Change in cash and cash equivalents in the year Cash and cash equivalentsatbeginnin8of year 22 150,Z37 376,6Z7 22 L035,663 659,036 Cash and cash equivalents at end of year zz 1,185,900 1,03S,663 24

Notes to the aeeounts 31 December 2022 l. A¢¢ountlng poll¢le$ The Welshpool & Llanfair Light Railway Preservation Co Ltd 1$ a limited company dorniciled and incorporated in England and Wales. The registered office is at The Station, Llanfair Caereinion, Welshpool, Powys, SY21 OSF. The company is rc8iStcred as a charity (Numbcr 10003781 with thc Charity Commission. It is limited by guarantee and controlled equally by all its members. The company meets the definition of a public bcncfit cntity undcr FRS 102. lal Basls of preparation These financial statements have been prepared in accordance with the Statement of Recommended Practice ISORW of the Charity Cornmission (revised 20151, Financial Reporting Standard IFRSI 102 and the Companies Act 2006, under the historical cost convention, modified to include financial instruments at fair value where approprtate. Investments are included at market value. The company's functional currency is GBP sterling. After reviewing the company's forecasts, the trustees have a reasonable expectation that the Company has adequate resources to continue operating for the foreseeable future and there are no rnaterial uncertainties about the Charitable group's ability to contrnue as a going concern. The company thcrefore continues to adopt the going concem basis in prcparing these financial statements. (b) Judgements in applyAng a¢¢ountitig poli¢ie8 and key tsources of estimation un¢ertalnty Estimates and judgements are continually evaluated and are based on historical experience and othcr factors, including expectations of future events that are believed to be reasonable under the circumstances. The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldo￿ equ8J the related actual results. In the opinion of the trustees there are no estimates and assumptions that have a significant risk of causing a tnaterial adjustsnent to the carrying amounts of assets and liabilities within the next financial year. Icl Group fmancial statements These financial statements consolidate the results of the charity and its wholly-owned subsidiary. W&L Sales Ltd (registered in England and Wales:030372351. on a line by line basis. A scparate Statement of Financial Activities ISOFAI for the ch￿lty itsell is not presented because it has taken advantage of the exemptions afforded by section 408 of the Companies Act 2006. The charity has also availed itself of paragraph 411) of Schedule I of the Companies Act 2006 and adapted the Companies Act forrnats to reflect the special nature of the Charity's activities. Id) Income li) Charitable activt£ies Income from railway fares is included in income in the period in which the relevant joumey takes place. Subscriptions are brought into income in equal monthly instalment8 for each length of rnembership. Life rncmbership income ts spread over twenty years. ij Other trading activities Income from the cornmercial trading operations of W&L Sale8 Limited is included in income in thc pcriod in which the sale is rnade. 25

{uiJ Donations, legacies, and gmnts These are included in income whcn the eharity is legally entitled to thc income and the amount can be quantified with reasonable accuracy. ftu) Inttmgible incoTne The group is heavily dependent on members who give their time to assist in th¢ a¢tivities and running of the charity and in staffing the trading outlets of W&L Sales Ltd. No monetary value is placed on this time in these financial statements" nor is any value attributed to individual gifts in kind valued at less than %1.000. le) EKpendlture All cxpcnditure is included on an accruals basis and is recognised when there is a legal or constructive obligation to pay for the gO￿lS or scrvice. Rentsl payments are charged to income on a straight-line basis over the period to which they relate. (i) Repairs and maintenance Expenditure is written off in the period in which it is incurrcd. A rnajor repair or refurbishment, which gives rise to a significant and continuing economic bencfit to the charity by extendÉng the useful life of the asset, AS capitalised. (iij Ouerheod allocation Administration and rnanagement Costs comprise those overhead expenses which, whilst rnainly related to the charitable activities, are not wholly so attributable. The proportion relating to the organisational management of the ¢harity and its compliance with constitutional and statutory requirements L8 shown separately as Govemance. (iiij PensTon costs Rctirement benefits for certain employees are funded by defined contributions from the group. Payments are made to approved pension provider8. The group'ts contributions are treated as expended in the period in which they become payable. lfj Tangibkc r￿d assets and depre¢iation The railway's fixed assets are categorised into Heritage and Other. Heritage r￿ed assets are land, buildings. permanent way> locomotives and rollxng stock which are of historical significance in thc preservation of the railway or otherwise integral to the broader objective of educating the public in the history and development of railway locomotion. Other fLYd assets are integral Éo thc 0￿ration of the railway> but of lesser historical sigrLificance and in some form replaceable. Acquisitions are made by purchase or donation and assct$ are included at cost. or estimated cost if donated. Major restoration work to assets that have been out of use for some time is also capitalised at cost. Maintenance costs to keep assets in lull working order are charged to the income and expenditure account when incurred. Subject to the tru8tees' approval, the company may dispose of r￿ed assets. though in the case of heritage f￿¢d assets this will only happen in very exceptional circumstances. The company's policy and programme of maintenance is summarised in the trnstees, report and the company's website has details of its collection of loeomotives and rolling stock and the history of the line. No depreciation is charged in respect of freehold land. Other assets are depreciatcd. so as to write their cost down to estitnatcd residuat value. Depreciation is nornially Cha￿ed in equal annual instsjments over their anticipated useful lives, as follows.. 26

Permanent way 20/0 Site 40 WQTks Locomotives and rolling stock 5¥0 Plant and equipment IOQA - 20Q/o Igl Investments Fixed asset investments are stated at market value at the balance shcet date. The statement of financial activities ISOFAI includes the net gains and losses arising on revaluations and disposals ti]roughout the period. Ihl Stocks These are stated at the lower of cost or net realisable value, due allowance being rnade for obsolete and slow-moving items. Donated items are included at estimated cost. 111 Cash and cash equlvalentB Cash and cash equivalents include cash in hand. deposits held at call with banks. other short-terni liquid investments with original maturities of three months or le$$, and bank ovcrdrafts. Any bank overdrafts are shown within borrowings in currcnt liabilitics. l Flnaneial assets and liabilities The company has elected to apply the provisions of Section I I Sasic Financial InSt￿mentS, and Section 12 '0ther Financial Instruments Issues, of FRS 102 to all of its f￿anCIal instruments. Tradc debtors. trad¢ crcditors and aEnounts due from the subsidiary company are recognised initially at transaction price. These obligations are intended to be settled within one year and are therefore not discounted using the effective interest method. Transaction cost represents their fair value. Ikl EquAty knstruments There were no equity instrnments issued in the year. 11) Fund ac¢ountlng Funds held by the charity ￿e either: Unrestiictedfimds- these are funds which can be used in accordance with the charitable objects at the discretion of the tNstees' Des￿natedfvnds- these are unrestricted funds that have been set aside by the trustees for particular puryo$es' or Restrictedfvnds- these funds. whxeh arise from grants or donations made for a Specific purpose, can only be used for that particular purpose within the objects of the charity. Restrictions arise when stipulated by the donor or grantor or where funds are raised for a specified purpose. Thc balanccs of the fuThds repTesent the unspent balanccs. Iml Contlttgent Income The charity will benefit from further fxnal payments from two legacies already received in large part. The amounts are not certain but could total £40,000. 27

1. Donatlons. lega¢les. and grnnts Vnrestri(ted RÈstrirtèd 2022 2021 Glftald¢d donatlons 39,445 10.093 49,538 83,886 Odierdonatitslls 4,215 L966 181 23J14 Legaries 535271 S35,271 580,302 GiftAid on fares 26096 Z6M96 Furlough support 2.083 Grants- EU TAIS 673 673 58.705 Grants- Powys Countil Is.000 Grants- Heritsge iAittery Fund 15.900 1&900 22.900 Grants- Cultural Recovery Furtd 264,366 Totsl 2022 62Z,400 12.059 634,459 1,050,556 Yotal 2021 987,804 62,752 1.050.556 28

2. RaAhvay operatlon and preservation 202Z Z021 Turnover Note Fares 378.845 241,532 Keyse co￿ge receipts 923 2,664 Solar pancls LllCDThe 4.472 L681 Sale ofsurplus materiaLsand parkin& Insurance rec¢lpt 3.465 102.783 OrheroperatingincDme 8.860 107.128 Income from railway operation 3nd prese￿atron 387.705 348.660 Working expenses Fuel 70,650 zi,zzo Repairs and mainteft2nce'. Mechanieal engine¢ring 45,736 89.2Z7 engineerin8 25.632 70.255 Co$ts for specia] trains&events 67.953 7.260 co hire fees 13,401 18.498 Keyse Cottage Tunningcxpebses J*67 1,299 Mministration and managetnentCOSts yo￿1 working expenses ofr3ilwayoperation and preserwdtion 288.626 314,5Q7 513,66S 5Z2,266 Major project expendlture MEchanical en￿Theeylng 2.000 15.629 Ciwl engineering 96,523 126,986 Depredation 171,380 174,273 J2 IGainl}loss on dw05al To131 major prolertspend on rallwayoperatioll and preservation 269.903 316,888 Net cost of rallway operation and preservation 395￿63 490.494 29

3. Sllbsldlary's tradlng actAvities 2022 2021 Note Income- Consultancy 1,550 Income- Caterlt)g 77,850 28,7SS Sncornc- Shops 74.400 5S,484 Total trading income 153.800 84,239 Less.. CateringcostGfsalcs 40.112 17,488 Cmss tearoom profit 48.596 39.Z% Less: Shopsc05tofsalEs 39,760 26.237 Grossshops proftt 46.6% 52.7% t*ss: Administration and managementcosts 61,614 22,4B3 Totsi trad5ngexpendl￿re 141,486 66,208 Net profit for the year. to bedonatedto parent cotnpanyby8iftald 12.314 18,031 Subsidiary's balance sheet at year-end 2022 2021 Currentassets-other 3&935 41.170 Cu￿ent Iliabilitiesj-other (7.139] Currentassets/ Iliabilitiesl- inter-COllLpany b31ance with parentcotnparty 3.379 14000 Net assets 4Z.314 48,031 W&LSolosknmit¢d iso IIIO% own¢d5vbsidiary. with £30.0005hcrecapitol.

4. Membershlp and governance expenses Ilots 2022 2021 The Llanfair Railwaylourrtal 11.954 11,921 Membership expense5 5.753 1,230 Governance costs 10,562 7.072 28,269 20,223 30

5. Admlnistratlon and n￿nagernent costs ilailway operation& preseyvatlon Mtmbershlp and govermance Total 2022 Total 2021 tradin8W&L SalesLtd Establishment RenL rat¢s. waterand Insurance 38,386 38386 32.896 Electriciryand heaong 8.966 4966 10,957 Equiptnentrental alld maintenance 4,419 4A19 5.267 Cleaningand hygiene supplie5 12,928 12.928 16,820 Rentcharged to trading 112,5281 12,528 52.171 ia528 64.699 65.940 Selling AdvertlslnE and publicity 31,120 31,120 52,794 Administrative stsff etssts {Note 9) 151,637 35.549 187,186 162,785 Travelling 1,017 1.017 670 External training 6￿73 6.873 3.236 Tolephone3nd radio 4.084 4.084 3,447 PostrgÈ.statiottery.and IT cosrs 4.381 4,381 14.362 Independentaudirl examination fee5 8,500 8,500 7,072 Aceountsncy fees 17,690 17,690 16.485 General expenses 5.918 1,537 7AIS 15.270 7.813 Adwin recharge to tradlng (iioooi 12,000 179.600 49,086 16.315 245,001 215.870 Financial Bank chargesand booiart8 protrsslng costs 25.735 25,735 10,688 Z022 Total 288.626 6L614 14315 366.555 345,29Z 2021 314,507 22,483 8J02 5.292 31

6. Investment income 2022 2021 CCLALharity Invesbnentfunds..

7. Investsnentfundshaies 7,663 7,466 CCLA DewsitAccount-Intsrest 9.693 57 Banklttteresr Intereston t3X 34 53 17.390 7,576 OFwhi¢h.. restricted 4.5ZO 164B nresthcted IZ,870 1,928
8. Taxatlon No liability arises to corporation tsx on the surplus for the fmancial period by reason of the company's charitable status and the donation by gift aid of its net profLts by the subsidiary. There is no deferred taxation to be recognised.

9. Infornwtlon regardlng tTU8tee8ldirectora and employee$ 20Z2 Z021 [a)Stttffcosts duriRgtheperit were.. WaEesandsalarie$ 170.067 146.811 Sotial security costs 9,659 9,242 Otherpension costs 7.460 6,732 IW7.186 162,785 No mcmber ofsraff received etDolurnents incxccss of E60.000 IZQZI: Nill. The Cenerdl Managerfse]nolutnents wore in the rangc £40,001 to E45.000. In addition to its tyaid stafCtho£baTity bejjefirs fvom th¢ subsrantlal efforts ofover 250 workingw)lunteEf5. (bJAveruoenumberOfpe￿0￿Se￿￿1Dyed NuMberZOZZ Number2021 Charity Ifull titne equivaleni) Subsid23ry Ifull titno equ2valent) Thegroup ernpioyed 18 differon¢ompioyees duringtheyeaT. A5 a chaTity, the companyis precludedfrotn pr￿dIng8j)YeMo1UMentsfOr its trusteesldirertors andtheArticle5 oFAs50ciation ofthe subsTdiary containasirnilarprovisiort. TrLJsrees received £Nil a5 reimbursementoftravel expenses [2021-. £Nil). 32

10. Relr4ted party transaetlons There were no related party transactions in the year. Of the trustees, Steve Clews is a director/trustee of Oswestry Borderlands Tourism Ltd, the Heritage Railway Association, the Heritage Rail Charitable Trust and the Shropshire Union Canal Society. Robert Robin80n is town clerk to Llanfair Town Council. Helen Ashby is chair 0£ the Friends of Sierra Leone National Railway Museum and William Bickcrs Jones is also a trustcc of that organisation. Andrew Charman is a trustee of Cloverlands modcl car museum and editor of Narrow Gauge World and Helen Ashby and Oliver Edward8 are heritage consultants to several railways. If any of these perceived a conflict of interest, thcy would have withdrawn from discussions and decisions on that topic.

11. Heritage tlxed a88etB: group and ehaTIty Freeholdlan slte work btslldltlgs. and perm2hent way Locomotlves aTLd rolliDg stock Other plantand equipmeDt Total Cost At 31 Dettmber 2021 596,266 L322.759 12,507 1,931,53Z Addimons 77,342 77,342 IDi5P05als) At31 DecembEr2022 596.266 1.400,101 12.507 2,008,874 Depreciation At 31 December 2021 409,228 654A47 12507 1.076.182 Charges for the ptTfjod 15.117 63,290 78,407 IDisposalsl Ar31 DecernberZO22 424,345 717,737 12.507 1,154,589 Net book amount 31 December 2022 171.921 682.364 NIL 854.285 31 DeceThber 2021 187,03B 668.312 NIL 855,350 There was £85,000 capital expend5wre contracted foratthe perlod end[2021: Nill. Flve-year summary of herltage tlxed a$s¢t transactions: Year year Purchases Malorilettis Z018 S3,783 No. lOSlrDrefa1d￿ Welshpoolshed No. 10 SirDrefvldwy No. l The Eurl 2019 147,662 2020 190.183 No. 10 SirDrefvldwyn Nth l The Eorl 2021 144.619 IOStrDrefaldwJ No. l ThtEurl 2022 77,342 No. 10 S7rD￿f41dwyn Slena Leone ￿rriage 1066 33

12. Other tangible r￿d a88etb: group and Charlty Freehold land, siteworks, bulldings & pernjanentvray Loeomotives &rolling5tock Other plant& equip]nent Total Cost At31 DecetnbEr2021 882.945 391,174 300,940 1,575,059 Additions 3,999 84.543 5&906 147.449 IDisposa151 18,3201 12,3011 110.6211 At 31 Decernber 2022 878.624 4YS.717 357.54S L711.886 Depreciatio At 31 Dcccrnber 2021 437,769 289,023 192.793 919,585 Charge for the period 35,546 29.76Z 27,665 92,973 IDlsposL%l 18,3201 12,3011 (10,6211 At31 Do¢tstnber2022 Net book amount 464.995 318.78S ZI&IS7 1001,937 31 December 2022 413,629 156.932 139.388 709,949 31 December 2021 445,176 102,151 108,147 655.474 Therewa$ £20.000 ofupital expendirure collrrarted forthe period end (2021.. £30,000].

13. Investments COIF charity (unds Group N￿￿ljer 2022 2021 2022 2021 InvestmentFund shares At I january 14,119 289.000 2S4,000 289.000 254,000 ))arketv￿Ue Disposa15 Gainlllossl on invesrment fr(rfnchahEe5nvalue (33.0001 35,000 (33.QOO) 35,000 Ai31 J)ecember 14,119 299,000 2S6,000 289,000 almatrkelwalue Shares In subsidiary At31 December 30,000 30.000 30.000 2S6.000 289.000 286.000 319.000 Hlstoi4ccostat31 D¢wNbor 147JJOO 147.000 177.000 177.000 The investment In the subsidiary represents the whole ofthe issued share capltal, comprlsSng ordlnary shares. of W&L Sale5 Ltd (company number 030372351. W&L Sales Ltd carries on the ￿mMerCIal trading activities of the group through sliop5 and refreshment facilities at stations and away from the line and donates its entire net profit to the paint compatty by Clit Aid. The totsl OF its capital and reservesis£42,31412021.. E46,0311. further derails on W&LSalesLtdare showzL in NDte4. 34

14. Stock8 Group Ch•rity 20ZZ 2021 2022 2021 Store5 79,1100 73,000 79,000 73,000 Goods forresale 25,100 21200 104,100 95.200 79,000 73,000 IS. Debtors Group Ch•rfty 2022 2021 2022 2021 Trade debtors 11.860 163 11,860 163 Prepayments and acerned Income IIOA27 90,395 110.427 90,395 VAT 28.829 50,659 28,829 52.292 GIftAid recoverdble 28.357 17.028 28.357 17.028 179.473 158,245 179.473 IS9,878

15. Bank overdraft The group has overdraftfacilitiesof£Nil (2021- £Nill.
16. Other credltor8 Including tax and tsQ¢Aal $e¢urity Group ChaTftv 2022 2021 2022 2021 PAYE 3.Z89 2,608 3.Z89 2,608 Amountdue ro subsldlary pany 3,379 14.000 3.289 2.608 6,668 16.608

17. Accruals and defezred in¢ome fjroup Charity 2022 20ZI 20ZZ zozi Subscriptions inadvan 4&49S 46.148 46,495 46.148 Less.. falling due atiei. more d13n one year (3LZ701 131.0891 (31.270) (31,089] 15.ZZS 15,059 15.225 IS.059 Accruals and deferred income 39.060 41,500 39,060 36.000 S4,285 56.559 54.285 51,059 35

18. Unrestrlcted funds Baknces 310Éc 2021 l]KoThe IExpÈndlturel Transfers/ revaluation B313nre$ Xl Dec 21122 Generol[unds 2.716fi75 1,194893 (887.494] (81,S33) 2.944.541 pe￿￿atedfvnd5-￿lureC￿pIt￿lpr0]eCts Museum/lrtterpreratyon Centre 50.368 1.511 51079 50.368 1.511 51,879 Totsl unrestricted 2,767.043 1.198,404 (8B7.494) (81.S33) 2,996.420 manydonotionsand1egacl￿fytt4 thepurchoseoir￿ed￿sSets. whkh ore then depreclotEdoverfutvrèyears.AÈ31 DEceFRber2022, EI.345.684 (Z021.. £1,340,154J olGÉnemlfvnds r¢presentsreserves thut will ￿0t(h￿tUre depreciutiON of the otsets bought wrth thosedonoÈTonsondlE9aciÉs.

19. Restricted fvttds BaLince5 31 Dec2021 Income (ExpendltUTel Tran5f¢r Iroml[tol B¥ianr¢ 31 Der 202Z fvnds REttoratiort of No.6 Monurch 6.700 252 6.9S2 Restorarion of No.14 29.ZUO L012 11000) 28292 Restoration of No. 8 Dougal 824 797 1.621 Zillortal cartia@es malotenance 3.631 109 3.740 Carriage itnprtrvemenifvnd 49,889 B.70Z 159,2251 48,533 47.899 Heritsge wagon fund Overhaul of No. 7 Chattenden 4.024 121 4,145 ZL370 3,293 Z4.663 Dl¢sel ma5ntsnan 7,693 247 12,2721 5.668 Viadurtand brldges prorecuon 24,421 663 12,3321 22.752 2020 appeal 46.098 1,383 47,481 193,930 1&579 (65029J 48.533 193,213 36

20. Analysis of group net a88et8 by fund Unrestrirted funds Restrtrted funds Totsl 31 Dec2022 Tan￿ble heritsgeand other fixed assets 1.564,234 L564,Z34 Investments 219,135 3AB65 Z56.000 Nelcurrenta￿ets 1,244,321 156.348 1,400.669 tA)ll8teT]n Ilabillues (31,Z70) {31.270} 2.996.420 193,Z13 3.189.633

21. AJalysls of changes In net funds Al 31 Dec 2021 Cash flows At 31 Dec 2022 Bankand Cash balances 234.9B4 133,1191 20L865 COIF Deposltaccount 800,679 193.356 9￿,03s I,D35,663 150,237 1,185.900

22. Net ca8hllow fronL operating activities 2022 2021 Net incomellexpcnditurel per Statstnentof Flnancia] AcDwties 228,660 621,307 Adjust for non-cash items.. Depreciarion 171,380 174.273 Net16ainl/loss on invesbnents 33,000 135,0001 Adjusiforworkin8 capital changew. Ilntrease)/decrease in5tods (8,900) IZO,7001 {InLTeasellde£rease In debtots (21,228) (51,8591 1141,S671 IDecreasell)Trcrea52 in creditors (27,885) Adjust For dividends recelved.. (shOwnSeparate￿Y in C3shflowl 17.663) (7.466) 367364 538.988 37

23. Statement of flnanclal activities: Prlor year comparisons by fund type UnTestrictod nds RestFirted fuDds Total 2021 Income from: VoluRthryincoffle Legacles3nd donabons 9B7,804 62,752 1,050,556 Charitableo¢tivittes Railway op6ratson and preservation MetnbeTship subscrSpUons 348.66 348,660 20,861 20￿61 Orhertn7ding UCttvitiEs Cu]nllrcial tradlngoperations 84.239 84,Z39 Investmentincorne 1,928 5.648 7,576 Total income 1,443.492 6B.400 1,511.892 Expendlture on: Raisingfvnds Ch6riÉublÉottfvlUes Railway operdtion andpresÈTVa150n- WOT￿￿8 518.676 3.590 522,266 F2ilwayoperation and preservatiOtI- projects 275,094 41.794 316,888 Membership andgoVern3n￿ expertses 20,223 20.223 Other tradingactivities Commercial tradingoperions 66,208 66.208 Total expenditure Netgain/llossl ort investments 6811,201 15.384 925,585 35,000 35,000 Net income/(expenditure) for the year 59&291 23,016 62L307 38

24. Management accounts summary tlnan¢lals by activity Rallway opera￿on aTLd preservatson W&L Sales Appea15 & Membershlp Investment income 2022 2021 goverllance Income frotn daily operatingactiwties 397.705 153,800 17,390 21,629 580.524 461,336 GiftAid on fare5 26,896 26,896 DDnauons- earmarked to running cortitems 6250 4,SSO 10.800 Granrs - forrunning 05rs. audTreneE research / pandemic 15,900 15.900 149.266 DallyopEraUn8 (costs) (513h651 {141,4861 120,7691 [675.920) 1602,6971 Net kncome.. Dally operndons (76,9141 11314 17.390 &410 (41.800) 7,905 Long term income DOnatt0￿. Le8athesGrants 580.863 580,863 901,290 ILoss)IGaSns onlnvesEtnetsts 133.OOQ) (33.000) 35,000 IAudltfeel- IncreasedcD5tOueto ￿£￿tr (7,500) (7,500) 16,000) l•ngtem proJertexp¢ndithre M4orproiect [spcndl t9&5231 198.523) 11416151 [DepreclatiOrtI 1171.380) (171,380J 1174,273) Net Inromel (expEnd5ture) by activlty 1346,8171 12314 565.2S3 (2,090) 228.660 621.307 39

M3nutes of 2022 Annual General Meetlng WELSHPOOL & LLATIFAIR LIGHT RAILWAY PRESERVATIOII CO LTD SIKty tlthd Annual General Meetlng held at l.oop on Sunday IS May 2022 at the Statlon. Llanfair Caerelnion. Powy8 Present: Sir Philip William$ (Vice President) David Jone$ Stevc Clews (Chairman Bob Mason Oliver Edwards James Brett (General Manager) John Fornian Michael Reilly Icompany Secretary) and 27 othcr members, including 18 by video-link Steve Clews chaired the meeting Apologles for Absence Apologics were received from the Earl of Powis IPrcsidentl, Tony Thorndike (Vice- Pr¢5Ldentl, William Bickers-Jones. John Davies. Wendy Elliott, Kaye Forn]an, Peter Green, Rowan Joachim, lain McIEan, Meianie-Jane Martin, John Nunn, Elizabeth and Ruth Parkinson, Richard Pearson. Robert Robinson. Richard Thomas. and Chris and Ros Tigwell. l. Minute$ of the Annual General Meetlng on 16 May 2021 The minutes of the previous AGM were agreed as a true record. There were no matter8 aTising. 2. Audlted Consolldated Financlal Statenwnts and Report of the Tyu8tee8 for the year ended 31 December 2021 Steve Clews highlighted the main points of the annual report. Trains began operating from lat May but continued social distancing restrictions meant that we carried fewer passengers than in 2019 and with most trains only running to Castle Caereinion and return. Although the tea-room remained closed, the mobile catering unit at Llanfair was a continued success and irnproved efficiency meant operating income showed an improvement over 2019. LA)comotive No. I returned from overhaul at the Vale of Rheidol Railway and work continued on the overhaul of No. 10. The extension to the Welshpool shed was largely completed, while the Fenc¢2Fence, Buildings and Midweek tearns plus the track gang had continued thcir vital maintenance work. The company thanked all volunteers and paid staff for their support. most of the latter having been furloughed for a period at the start of the year. St811 changes had seen Charl¢s Spencer replaced as General Manager by James Brett and the departure of Engineering Manager Richard Featherstone, while Matthew Dawe had spent six months with us as Community Development oificer. They were all thanked for their contributions to the railway. In response to a question from Steve Everett, Steve Clews explained that all departments had been asked to identify arrears of malntenance for inclusion in the ncxt business plan. These would be ranked by priority for attention as the plan was implemented. Steve Davidson then expressed concern about the votsng procedures for annual meetings, claiming that encouraging mernbers to vote by proxy meant the ballot was no longer secret. The secretary explained that under the Companies Act we had a legal obligation to offer proxy voting. This was also more democratic as it allowed all members a vote. We had encouraged its use during thc pandemic whcn attendance at the meetings was restricted but precautions were taken to maintain confidentiality and 40

voting at the Tnccting itself continued to be po88iblc. Following further discussion about proxy votingj the secretary undertook to produce a report providing a breakdown of voting patterns. Bob Mason then summarised the main features of the Consolidated Financial Statetnents. Although we had expected 202 1 to be a tough year. traffic income frorn regular operations was higher than in 2019. thanks to several innovations, espeeially the introduction of a First-class option. This had enabled us to make a srnall operating surplus which, combined with more pandemic-related grant income plus some generous legacies and donations? placed us in a very strong position. In response to Tom Brady, he said that our overall performance placed us in the upper quartile of heritage railways in tems of financial sustainability ULanagement. The railway was well run, and the future looked rosy. In reply to Malcolm Elliot. he said that the new business plan should be ready by September. Malcolm Elliot also observed that the company was the only orga￿lSatiOll of which he was a rnember that did not issue a printed annual report. In reply> the secretary pointed out that the move to place the report on the website had b¢cn approved by members at the 20 19 AGM and printed copies continued to be available on reouest. Bruce Lawson asked why we used two sets of aeeountants, to which Bob Mason explained that Cadwalladers acted as our book-keepers and WR Partners were our auditors. John Forman, spcaking on behalf of Dick Johnson, askcd whether the AGM could be held on a Saturday rather than a Sunday in alternate years. Th¢ chairman agreed to consider this. The adoption of the Annual Report of the Trustees and the Audited Consolidated Financial Statements was then proposed by Stephen Everett and seconded by Bruce Lawson. On a vote, adoption was approved by 372 in favour and 2 ag8inst, with six votes withheld. Steve Clews then gave a brief report on developments in the first half of 2022. Jarnes Mander, Ruth Davies and Stephen Garner had all joined the paid staff as Engineering Manager, Events Apprentice and Catering Supervi80r respectively. A new Extended Leadership Team had been Sct up and held an 'awayday' to improvc collaboration and collectively look for ways of improvement. we had opcrated successfully at th¢ Fcbruary half-tenn despite bad weather including local flooding and progre$$ had been made with csscntial maintenance and overhauls. With the availability of Welsh coal incr¢asingly uncertain. trials had takcn placc with alternative fuel, so far with reasonable result8 although it was considerably more expensive. 3. Election of TruBteeB As he was a candidate for re-election, Steve Clews stepped down for this itern and John Forman took the chair. Since there were four eandidates for four places the Articles required a single-stage ballot. The ballot was held, and all four e8ndidate8 received more votes in favour than against. Steve Clews, Peter Green, David Jones, and Bob Mason were therefore all re-elected to the board. 4. Ele¢tlon of Pre8ldent Steve Clews resumed the chair and proposed that the Earl of Powis be elected President, which was seconded by Richard Green and a￿eed ur￿n[mouS1y. 5. Eleetlon of Vlee Presidents Th¢ following nominations were made: Alan Higgins. Tony Thorndike, and Sir Philip Williams. With the consent of the ￿eCting, the nominations were put collectively and a8reed, Malcoltn Elliot proposing and Steve Davidson seconding. There being no further business, the meeting closed at 2. 10pm. 41