# **Welshpool & Llanfair Light Railway Preservation Co. Ltd.** 

## **Annual Report and Accounts 2023** 

## **Contents** 

Notice of Annual General Meeting … _Page_ 3 

Report of the Board of Trustees … _Page_ 4 Independent financial examiner’s report … _Page_ 20 Consolidated statement of financial activities… _Page_ 22 Consolidated and charity balance sheets … _Page_ 23 Consolidated cash flow statement … _Page_ 24 Notes to the accounts … _Page_ 25 Minutes of the Annual General Meeting held on 13 May 2023 … _Page_ 40 



## **Administrative details** 

Registered office The Station Llanfair Caereinion Welshpool Powys SY21 0SF Phone 01938 810441 Web www.wllr.org.uk Accountants Cadwallader & Co LLP Chartered Accountants Eagle House 25 Severn Street Welshpool Powys SY21 7AD 

Auditor W R Partners Hafren House 10 St. Giles Business Park Newtown Powys SY16 3AJ Solicitors Lanyon Bowdler LLP 4 St Martin’s Street Hereford HR2 7RE 

## **Officers and managers** 

Company Secretary Michael Reilly General Manager James Brett Operations and Kevin Heywood Infrastructure Manager Engineering Manager James Mander 

Company number 00646238 (Wales) 

Registered charity number 1000378 

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## **NOTICE OF ANNUAL GENERAL MEETING** 

The Annual General Meeting of the Company will be held at the station, Llanfair Caereinion, on Saturday 18 May 2024 at 3.30 p.m. for the purpose of transacting the following business:- 

## **Ordinary Resolutions** 

1. To receive and adopt the audited consolidated financial statements and the report of the trustees for the year ended 31 December 2023. 

2. To elect directors. The Articles of Association stipulate that one-third of directors shall retire annually. Helen Ashby, Simon Bowden, Andrew Charman and Iain McLean retire by rotation. There are four vacancies. Details of those offering themselves for election are given in a separate leaflet sent to members. 

3. To elect a president. The Earl of Powis has indicated his willingness to be re-elected. 

4. To elect vice presidents. Alan Higgins, Tony Thorndike and Sir Philip Williams have confirmed their willingness to be re-elected. Michael Whitehouse has indicated his willingness to be elected. 

## **Special Resolution** 

5. To amend article 3 (1) of the Memorandum of Association of the Company by renumbering the existing clause (g) as clause (h) and inserting a new clause (g) to read: 

   - _To collect, conserve and display locomotives, rolling stock and any other artefacts from railways or tramways, create displays, establish museums and/or archives._ 

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 Meeting, 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 form 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 

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## **REPORT OF THE BOARD OF TRUSTEES** 

## **Our mission** 

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 preservation of railway locomotives and/or rolling stock and/or historic railway lines._ 

The trustees who served during 2023 were: 

|The trustees who served during|2023 were:|
|---|---|
||_Number of trustees’ meetings attended_|
||_Actual/Possible_|
|Steve Clews_Chairman_|<br>5          5|
|Iain McLean_Vice Chairman_|<br>5          5|
|Helen Ashby|5          5|
|William Bickers-Jones|1          1|
|(_resigned in January)_||
|Simon Bowden|<br>4          5|
|Andrew Charman|2          5|
|Oliver Edwards|3          3|
|_(until 13 May)_||
|John Forman|5          5|
|Peter Green|4          5|
|David Jones|4          5|
|Bob Mason|5          5|
|Ryk Parkinson|2          2|
|_(from 13 May)_||
|Robert Robinson|4          5|
|Anne-Marie Wright|1          2|
|_(from 13 May)_||



The trustees cover the following skill areas: staff, appeals, mechanical 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 2023. It meets the requirements for charity accounting prescribed in the Charities SORP. It also meets the Directors’ Report requirements prescribed in company law._ 

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## **Status of the charity** 

The Welshpool & Llanfair Light Railway Preservation Company was incorporated as a company limited by guarantee in 1960 and obtained charitable status in 1990.  The charity 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 board and accounts. Its profits are 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 financial 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 financial 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 financial statements. 

The trustees 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 

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financial statements the trustees are required to: 

- select suitable accounting policies and then apply them consistently; 

- observe the methods and principles in the Charities SORP 2019 (FRS 102); 

- make judgements and estimates that are reasonable and prudent; 

- state whether applicable UK accounting standards have been followed, subject to any material departures 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 and other irregularities. 

In so far as the trustees are aware: 

- there is no relevant audit information of which the charitable company’s independent examiner is unaware; and 

- the trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the independent examiner 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 remuneration in the light of annual objectives and performance appraisal. 

On appointment, trustees are provided with the Charity Commission’s current guidance for new trustees. Trustees are allocated specific responsibilities according to their individual skills. Induction to the charity’s operations is not considered necessary as trustees are usually drawn from the ranks of working members.  However, they are encouraged to identify their own training needs. Trustees are provided with the updates and relevant information from regulatory bodies, including the Charity Commission, Office of Rail and Road (ORR), Rail 

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Accident Investigation Branch and the Heritage Railway Association (HRA). 

## **Risk management** 

The company has a formal risk management process, identifying in detail the risks to which it is exposed. The board of trustees keeps six registers of risks to the business. These cover company level risks 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 2023. 

The railway management reviews and manages operational risk through a documented risk assessment and mitigation process. The process is managed by the officer responsible for safety with heads of department providing departmental input. These risk assessments continued to be reviewed and updated during 2023 and are key elements in the safety audits. 

## **Health and safety** 

The safety and welfare of visitors, staff and volunteers takes precedence over all other activities. During 2023 the railway had three reportable incidents, all were signals passed at danger (SPAD). There were several operational incidents, near misses, and minor injuries which were recorded and investigated using our internal processes, with reporting to the Safety Management Team at each meeting, and relevant safety improvements instigated and notices and briefings issued to staff. Incident numbers and details of higher level incidents were reported to trustees at board meetings. 

In response to the external safety audit conducted in January 2023, an action plan, led by the general manager and safety officer, saw further improvements to document control, competence management, risk assessments and other measures. The Document Management System was moved to a new web based system specifically developed for heritage railways, meeting industry best practice and General Data Protection Regulations (GDPR) requirements. 

The Safety Management Team was re-formed in April with an updated remit and commitment to meet five times per year. Projects to update the operating rule book and revise the level crossing risk assessments were started. 

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The safety officer resigned in August due to pressure of work and despite advertising the post several times has not yet been replaced. 

Railway staff continue to work with the HRA, ORR, other railways, and industry to share changes and best practice. Staff attended a variety of safety related training courses throughout the year including working at height, ladder safety, manual handling, risk management models, and food hygiene. The railway continues to invest in new equipment to provide a safe and efficient working environment. 

## **Objectives** 

The principal objective of the company continues to be to advance the education of the public in the history and development of railway locomotion. 

This encompasses the following three subsidiary objectives: 

- the preservation and operation of the eight-mile narrow gauge light railway between Welshpool and Llanfair Caereinion; 

- the generation of funds to finance the acquisition and restoration of fixed 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. 

## **Public benefit** 

The board has had regard to the Charity Commission’s guidance on public benefit. Of the charitable purposes set out in the Charities Act 2011, the railway principally contributes to _b) the advancement of education…_ and _f) 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 education 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 harm to the environment. 

Any member of the public may: 

- travel on the public scheduled services; 

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- 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 of 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 charity. 

## **Achievements and performance** 

The railway built upon the experience of the past three years to continue rebuilding passenger numbers and revenue with an expanded programme of special events and experiences. Trains operated on 169 days with most services operating the full length of the line. Online booking continued to be encouraged to aid us in managing capacity, thereby helping to improve the visitor experience, with Llanfair boarding being promoted for catering and first class services. 

Despite the impact of the rising cost of living and an uncertain economic climate on visitors’ disposable income, passenger numbers met our target for the year, with an increase of 5% on 2022. Revenue from railway operations exceeded budget by £30,000 and marked an increase of £70,000 on 2022. This was despite operating 18% fewer trains, helping improve our efficiencies and manage operating costs across the organisation. Our special events programme expanded, with a second ‘enthusiasts’ event’ to celebrate the 120[th] anniversary of opening and 60 years of preservation of the line, alongside our traditional Steam Gala weekend, Santa Specials and an increased range of family events. Premium experiences continue to help fill trains at traditionally quieter times and increase our income per visitor. Alongside Afternoon Tea and evening Fish & Chips specials, a Gin & Whisky tasting train was introduced in partnership with a local distillery. Our station tearoom at Llanfair opened on more dates with an expanded menu of hot food and the provision of pre-booked picnic boxes. Following experience with an external caterer since 2020, the railway purchased and began operating its own mobile catering unit, both to provide an additional outlet at Llanfair on busy days and give us the ability to offer hot food at Welshpool station on select dates. 

All departments at the railway contributed to this success, often adapting to operational changes at short notice. Timetables for the year were planned around predicted available staff levels but despite this short notice cover during the peak season remained a challenge. The engineering team worked hard to keep both No.1 _The Earl_ and ZB2 _Zillertal_ in service. One of the major highlights of the year was the return 

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of No. 10 _Sir Drefaldwyn_ to traffic after a long and extensive overhaul. Our civil engineering and buildings departments worked year-round to maintain the railway infrastructure and estate, ensuring its safety and operational reliability. As well as tackling the backlog of deferred maintenance, notable achievements included the external repainting of Raven Square Station building and renewal of a section of line between Heniarth and Schoolmistress’ Cottage with composite recycled plastic sleepers. 

Our museum continues to develop its interpretation and range of displays on offer, bolstered by the separate Cloverlands Model Car Museum which helps attract a different clientele to the railway. Welshpool display shed was opened regularly on operating days and saw the addition of No. 14, ex-Sierra Leone Hunslet 85, and Sentinel locomotive _Nutty_ (formerly W&L No. 5) which arrived on long-term loan from the narrow gauge railway museum in Tywyn. 

Behind the scenes, our staff worked to ensure that safety regimes were maintained, marketing and administration conducted, and rosters managed. Recruitment and training of sufficient staff to support activities across all areas of the organisation, however, remains a constant priority. 

## **Track, infrastructure and buildings** 

Significant work included a relay west of Heniarth Mill Bridge using plastic sleepers and S30 rail (all new), the purchase of an S30 turnout for Cyfronydd (scheduled for installation in early 2024) and the ordering of 400 plastic sleepers for future work.  Diseased and dangerous trees have been removed, new fencing installed at Welshpool station and, following the return to service of locomotive No.7 _Chattenden_ , extra flailing took place. Problems with wagon availability were eased considerably by the refurbishment of the two Bowaters wagons and the introduction of two new tool vans. 

An in-house survey of the Tanllan retaining wall was carried out, leading to the decision to commission a scour survey of the river bank over a longer frontage and an external consultant was recruited to survey the former Colinette building to determine what will be required to re-roof it. 

The midweek gang continued to be busy throughout the year with tasks that are often unseen but essential to the maintenance of the railway estate, including repainting the Llanfair Caereinion signal box and other painting, plumbing, drainage and maintenance work. 

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## **Steam locomotives** 

In 2023 the steam locomotive fleet accumulated a total of 6978 miles of which No. 1 _The Earl_ completed 4660 miles, No. 10 _Sir Drefaldwyn_ 722 miles and ZB2 _Zillertal_ , on-hire from the Zillertalbahn, 1596 miles. Including for test and running-in purposes, No. 1 was in steam on 133 days with Nos. 10 and ZB2 on 30 days each. 

The highlight of the year was No. 10 being outshopped in May for testing and running-in prior to entering service on 17[th] June at the 60[th] year of preservation event.  Later in the year No. 2 _The Countess_ was taken into the workshop to commence a 10-year overhaul and boiler lift. 

Procuring solid fuel of adequate quality and acceptable cost is becoming increasingly challenging.  In 2022 and 2023 we took a number of deliveries of both coal and bio-fuels of widely differing characteristics with consequent difficulties for crews.  Our last full season (i.e. not Covidaffected) on good quality Welsh steam coal throughout was 2019, since when we have seen average fuel consumption per trip increase by some 35%, while the last two years’ fuel costs have been more than double those of 2019 and earlier. 

## **Rolling stock** 

The carriage fleet accumulated 27126 miles in passenger service during 2023 plus 318 miles on engineering trains due to withdrawal of the mess coach. 

SLR carriage 1066 was returned from Statfold on 15[th] December following conversion from 3[rd] to 2[nd] class to an in-house design, rather than according to the Gloucester Carriage original.  The work included a full repaint plus reinstating the interior lighting and steam heating, and the installation of a battery-powered refrigerator to assist with the provision of light refreshments. 

Carriage C572 returned to traffic in April following replacement of the Llanfair end headstock.  The wheelsets of both B14 and C572 were reprofiled by the VoR at Aberystwyth and reinstalled.  MÁV carriage 430 was returned to traffic in December following a lengthy wait for repairs to the braking system. 

Our old tool van – ex-RNAD No. 210 – was withdrawn earlier in the year with the bodywork condemned and replaced by our two ex-RNAD ammunition vans, given W&L numbers 86 & 87, now refurbished.  The vendor was unable to advise us of the original RNAD numbers. 

The track gang’s mess coach which featured the original body from B17 mounted on ex-RNAD bogie wagon No. 41 was also withdrawn due to life- 

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expired bodywork.  Work commenced in the autumn to overhaul the wagon with replacement of corroded structural members and adapting it to mount a custom-designed welfare unit. 

Our two Butterley-built ex-Bowater wagons Nos. 610 & 631 were despatched in turn to Alan Keef Ltd. for overhaul and refurbishment following which both were available for use from mid-November. 

Two of our Cravens-built, ex-RNAD bogie flat wagons Nos. 35 & 38, which in stripped-down condition have been used as rail carriers for many years, were withdrawn from service due to excessive corrosion. 

## **Diesel locomotives** 

Locomotive No. 7 _Chattenden_ returned to traffic on engineering trains in March following wheel turning and overhauling of the axleboxes.  It completed 624 miles on passenger services, the majority in April, due to non-availability of steam locomotives early in the season. Locomotive No. 17 was also used on engineering trains as well as completing 112 miles in passenger service. 

Alishan Forest Railway diesel locomotive DL-34 (W&L No. 22) was delivered to Llanfair on 1[st] February.  It was subjected to a full examination and test running in late-March, and in September was despatched to Industrial & Heritage Rail Services at Darley Dale for fitting a vacuum brake system.  At the same time work was underway at Llanfair producing the components necessary to fit Grondana couplings. 

## **Education and heritage** 

The railway meets its formal charitable purpose by preserving the heritage and providing learning opportunities for all visitors. Our educational experiences include a varied timetable of heritage train rides, special events and activities showcasing the story of the W&LLR since1903 and its connections with other 2ft 6in gauge railways. 

In 2023 ‘Llanfair Connections’ and the Cloverlands Model Car Museum were open to the public throughout the operating season and welcomed 2,317 visitors. Opening of both facilities continued to be restricted by the lack of volunteer stewards. Our goal is to open daily when trains are running. Work continued to update and enhance the displays, including adding more objects to them from the historic collections. The 16mm. scale model railway was improved to enable it to be visitor operated, making it a very popular exhibit.  The Cloverlands Model Car Museum team also started a major redisplay of at the end of the season. 

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Family events during the year included the Carrot Express at Easter, Fireman Sam, Peter Rabbit visits, Paddington Bear and the Santa Specials, which were enhanced with trails, quizzes and educational activities. 

In September we were awarded a small grant from Kids in Museums, which included a family friendly audit and £500 towards the implementation of some new activities and the improvement of signposting our family friendly offer both online and on site. 

A small number of duplicate objects, and items which did not fit the Collections Development policy, were disposed of at public auction and some new acquisitions were made.  A painting of _The Earl_ on Banwy Bridge was accepted from the daughter of one of the railway’s founding members and is now on display in Llanfair Connections. 

## **Environment** 

With UK mined coal coming to an end we have continued to try alternative fuels, revising firing techniques as necessary and giving feedback to fuel suppliers.  With its varied and frequent changes of gradient, our railway presents significant firing challenges, and we will remain engaged in the development of alternative fuels to help ensure future supplies of effective coal substitutes. 

The catering team has switched to recyclable packaging materials for retail stock, further reducing our dependence on single use plastics. We have adopted modern paint systems with a reduced environmental impact for repainting buildings and continually seek to adopt best practice to reduce energy consumption. 

The use of recycled plastic sleepers has now become the established standard when relaying track, with the permanent way team having developed new techniques for the handling and use of them. 

Ash dieback has become prevalent in wider areas around the railway and will be a major challenge in coming years.  More positively, we are seeing a wider range of lineside flora arising from the steady cutting back and coppicing of otherwise dominant species. 

## **Fundraising** 

The railway continued to benefit from generous donors and legacies. Income during the year was £118,311 from donations (including £34,789 in Gift Aid reclaimable), £78729 from legacies, and £7847 in grants. The specific appeals during the year were for the overhaul of locomotive No.7 _Chattenden,_ and for improvements to our carriage fleet for premium 

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services. An order was placed for refurbishment of ex-Sierra Leone carriage 1066, which returned in splendid condition after the year end. The arrival on loan of Taiwanese diesel DL-34 will permit No.7 to be released for overhaul once a costed plan has been drawn up. 

The appeals team worked on several events to reward donors and to publicise our fund-raising progress. The appeals director sang the Welsh national anthem in Welsh, the Sierra Leone national anthem in English, and a jaunty song about the Salzkammergut Lokalbahn in German, in an authentic Austrian accent according to our former general manager. 

## **W&L Sales** 

Step changes in the tearoom and catering more broadly meant that W&L Sales income was significantly higher. So too, however, were costs and after allowing for rent and administrative charges this resulted in a net loss. Steps are being taken to avoid this situation in 2024. 

Shop sales remained buoyant and ahead of 2022, due to careful buying and pricing, and generous donations of items to be sold.  This has been helped by the service given by our enthusiastic and dedicated shop volunteers, which is much appreciated and for which W&L Sales is very grateful. 

## **Membership and volunteers** 

The railway is fortunate in having the consistent support of its members, many of them of 25 years plus standing. We welcomed 376 new members in 2023 (2022 150) after deciding to give recruitment at the railway additional focus. New members are encouraged to attend a New Members’ Day where they can get to know the railway and its people. Total membership at the end of 2023 was 2,104, a net increase of 188. We do gain many new members through our social media presence as well as at the railway. Members are also encouraged to invite friends and colleagues to join. 

The volunteer liaison committee completed another survey identifying how many active volunteers we have and where there is need for more recruitment. 

## **Staff** 

In 2023 the company employed seven full-time and one-part time staff; plus there are around 250 part-time volunteer staff contributing about 14 full-time equivalent staff, and some seasonal staff in the tea-room. Although this was a slight increase in volunteer numbers on previous 

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years, it still resulted in an unavoidable reduction in services. Trustees and management are grappling with the problem of recruiting sufficient volunteers. 

Publication of a comprehensive staff guide, work on which started in 2022, has been delayed by supply issues. 

In January, Sara Jones was appointed as catering manager. In August, Carys Evans was recruited to the grant funded position of community engagement officer, only to resign in September. Recruitment to fill this post will be re-run in 2024. 

In August Paul Wixey stepped down as volunteer safety officer and the following month William Bickers-Jones stepped down as volunteer buildings manager. Despite active advertising, both positions remain unfilled and replacements will now be sought externally. 

The trustees are most grateful to the paid full-time and seasonal and volunteer staff for their forbearance, patience, and hard work during another challenging year for the heritage sector. 

## **Financial review** 

## **Results and financial position** 

The trustees are of the opinion that in preparing the financial statements and related notes, appropriate accounting policies have been consistently applied, supported by reasonable and prudent estimates and judgments, and that 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 financial statements. 

2023 was an eventful year. Traffic income, boosted by increasing experience in operating a wide range of successful events, was up an impressive 15%. Visitor generosity also led to £29,000 Gift Aid from fares, (2022 £27,000), representing a 30% take-up after allowing for events and group visits not eligible to be gift-aided. With better timetabling meaning fewer but fuller trains, coal costs were £8,000 lower and learning from 2022 experiences in events meant that spending on special events was £22,000 lower. 

Broadening our tearoom offering and bringing the mobile catering unit operation in-house doubled catering income to £172,000. However, it has taken time to assess the appropriate staffing levels for different days with different trading patterns. Catering staff costs were £88,000 and reducing 

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these will be a top priority for 2024. Similarly, while visitor feedback on new menu options has been excellent, we need to raise gross margins on these items. In a good year W & L Sales contributes £20,000 profit to the company and also pays cross-charges for its use of station space, share of utilities, repairs, bank fees and administrative support totalling some £30,000. In 2023 W & L Sales had a loss of £14,000 due to the work on expanding catering and that needs to be reversed in 2024. 

Total incoming resources (consolidated statement of financial activities) were £968,000. As well as traffic, retail and catering income, this included £8,000 of grants supporting key day-to-day projects, £90,000 in donations to the upcoming overhaul of No. 7 _Chattenden_ and other projects, and £79,000 in legacies from Hugh Appleton, Marshall Cresswell, Ian Dettner, Charles Fisher, Peter Hempson, David Leigh and Alan Willmott (Windjammer Films). Appropriately generous interest rates (4.5%) on our deposits with CCLA also helped generate £52,000 in investment income. 

Note 3 shows the railway's operation and preservation costs. In addition to the main capital projects capitalised separately, major project expenditure included the remaining mechanical engineering costs relating to assessing and reassembling for display No.14 (ex-SLR 85) and the civil engineering winter trackwork. The external track costs in 2023 were modest; the excellent work achieved over the winter being due to the dedicated and capable energies of the track gang using materials already to hand. Within working expenses, civil engineering included the many building maintenance smaller projects ably progressed earlier in 2023. 

Administrative costs (Note 6) detail the expenditure on operating the railway, on W&L Sales’ trading activities and on membership and governance costs. Staff costs in railway operation reflect the full year impact from having two paid workshop staff and the events assistant. W&L Sales includes our catering manager and the casual staff engaged to operate the tearoom and mobile catering unit, including successfully supporting our many events. Electricity costs were £16,000 higher due to 2023 contract prices; the 2024 contracts will have lower unit costs. 

The CCLA investments (Notes 7 and 13) delivered £8,000 in dividends and a valuation gain of £18,000 (2022 £33,000 loss, 2021 £35,000 gain). This investment is held for the long-term as a buffer against unforeseen adverse events and the 2020/2021 pandemic showed the benefit of such a reserve. 

Our consolidated statement of financial activities follows the format required of all charities. It shows all income and expenditure on one sheet but does mix long-term and short-term activities. Note 25 summarises the income and costs for our different activities in a management accounts format. This shows both day-to-day income and costs by activity, including those donations and grants given to cover 

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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 generosity of members and other supporters meant that donations and legacies received in 2023 contributed £165,000 that can be applied to the many priorities within the recent business plan update. 

Capital expenditure in 2023 was £184,000. In heritage fixed assets this was the comprehensive overhaul of Bowater wagons 610 and 631, completing the work on converting carriage SLR 1066 to second class and completing the overhaul of No. 10 _Sir Drefaldwyn._ In other fixed assets, the capital spend was the fully-fitted mobile catering unit and completing the new bogies for carriage MÁV 430. 

## **Contingent income** 

The charity is expecting further payments from two legacies already notified. The amounts cannot be estimated with reasonable certainty at the date of this report, but the total could be £20,000. 

## **Restricted funds** 

The charity has accepted donations and legacies for restricted funds only when the aims of the fund fit within its overall objectives. 

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_ are for longer term projects. 

## **Designated fund** 

The trustees have a designated fund earmarked for fitting out and displays as our interpretation centre plans evolve. 

## **Reserves policy** 

At the year end, the charity faces four months with little income but with expenditure running higher than normal. This is when major work is undertaken on civil and mechanical engineering, refurbishments, capital items, and when W&L Sales restocks the shops and tearoom. 

Reserves, in the form of freely available funds, are 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 months’ unrestricted fund expenditure, plus any approved capital expenditure not already received in the form of a restricted fund, as an 

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appropriate level of seasonal reserve. This is calculated to be £610,000. 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 Commission guidelines bearing in mind the railway’s risk management, the overall condition of the infrastructure and the level of insurance cover we purchase. The trustees consider £310,000 to be an appropriate additional reserve. Adding these two figures, reserves of £920,000 were required at 31st December 2023; whilst actual investments, cash and working capital available stood at £1,500,000. 

## **Investment policy** 

The charity’s Memorandum of Association gives the trustees discretion in the investment of funds. The trustees consider that investments in CCLA Investment Management’s funds, designed specifically for charities, offer appropriate investment vehicles. The short-term reserves are invested in a deposit fund, which has consistently provided a better return than a commercial bank or building society. Longer-term funds are invested in the investment fund, which is an ethical fund. 

The investment managers remain positive on the medium- and long-term prospects for equities with their investments spread across regions and sectors to help manage risk. 

## **THE FUTURE** 

Faced with the challenge, as in 2022, of attracting sufficient volunteers a reduced timetable was implemented. This resulted in an increase of income for an 18% decrease in number of trains. The operating model has therefore been carried over into 2024. The updated business plan was published in May, and this will form the basis for the company’s activities over the next three years. The plan will next be updated in 2026. The major strategies that had been signed off are being reexamined through the Major Projects Advisory Group. 

An external safety audit will be completed early in 2024 and the reconstitution of the Safety Management Team will add impetus to addressing the audit recommendations. 

The commercial challenges of 2023 will continue throughout 2024 as we face the cost-of-living crisis but should be mitigated by our progression to the new standard operating environment. Planning for the 2024 season has concentrated on ensuring that we can cope with the timetable even with reduced resources; our high end offering and events have been further prioritised to increase spend per visitor. We will still need to ensure we can cope with short term commercial and operating upsets, so a degree of flexibility in our operations will become normal.  As in 2023, 

18 



this will need excellent operational communication and marketing with a focus on regular updates. We will consolidate the range of offerings that were provided in 2023, including increasing the range of catering as we bring on-train catering in house. The lessons learned from the last three years and considerable visitor and volunteer feedback will be built on in 2024 as we push towards increased operational income and contributions to the charity. 

During 2024 we will continue to build on networking and lobbying through our membership of the HRA and Great Little Trains of Wales, and expansion of our liaisons with other railways and organisations. Efforts to preserve and improve the appearance of the railway to ensure it remains attractive to visitors will continue. The condition of buildings and significant infrastructure and their maintenance will be priorities. 

Volunteer recruitment has now become critical to the future of the company and our ability to maintain the current levels of operation so there will be an increased focus on it in 2024. 

The charity remains extremely grateful for legacies and donations received over past years. Where an indication of possible use for such finances has been given, consideration will be given 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** 

Chairman 16 March 2024 

19 



## **Independent Financial Examiner’s report to the Trustees of Welshpool & Llanfair Light Railway Preservation Co. Ltd.** 

I report to the charity Trustees on my examination of the accounts of the Charitable Company for the year ended 31 December 2023. 

## **Responsibilities and basis of report** 

As the Trustees of the Charitable Company (and its directors for the purposes of company law) you are responsible for the preparation of the accounts in accordance with the requirements of the Companies Act 2006 ('the 2006 Act'). 

Having satisfied myself that the accounts of the Charitable Company are not required to be audited under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of the Charitable Company's accounts carried out under section 145 of the Charities Act 2011 ('the 2011 Act'). In carrying out my examination I have followed the Directions given by the Charity Commission under section 145(5)(b) of the 2011 Act. 

## **Independent examiner's statement** 

Since the Charitable Company's gross income exceeded £250,000 your examiner must be a member of a body listed in section 145 of the 2011 Act. I confirm that I am qualified to undertake the examination because I am a member of ICAEW, which is one of the listed bodies. 

I have completed my examination. I confirm that no matters have come to my attention in connection with the examination giving me cause to believe: 

1. accounting records were not kept in respect of the Charitable Company as required by section 386 of the 2006 Act; or 

2. the accounts do not accord with those records; or 

3. the accounts do not comply with the accounting requirements of section 396 of the 2006 Act other than any requirement that the accounts give a 'true and fair' view which is not a matter considered as part of an independent examination; or 

4. the accounts have not been prepared in accordance with the methods and principles of the Statement of Recommended Practice for accounting and reporting by charities [applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102)]. 

20 



I have no concerns and have come across no other matters in connection with the examination to which attention should be drawn in this report in order to enable a proper understanding of the accounts to be reached. 

This report is made solely to the Charitable Company's Trustees, as a body, in accordance with Part 4 of the Charities (Accounts and Reports) Regulations 2008. My work has been undertaken so that I might state to the Charitable Company's Trustees those matters I am required to state to them in an Independent examiner's report and for no other purpose. To the fullest extent permitted by law, I do not accept or assume responsibility to anyone other than the Charitable Company and the Charitable Company's Trustees as a body, for my work or for this report. 

John Fletcher BA (Hons) FCA 15 April 2024 

WR Partners Belmont House Shrewsbury Business Park Shrewsbury Shropshire SY2 6LG 

21 



## **Consolidated statement of financial activities** for the year ended 31 December 2023 

(incorporating the income and expenditure account) 

|||**Unrestricted**|**Restricted**|**Total**|Total|
|---|---|---|---|---|---|
|||**funds**|**funds**|**2023**|2022|
|Income from:|**Note**|**£**|**£**|**£**|£|
|_Voluntary income_||||||
|Donations, legacies, and grants|**_2_**|118,564|86,323|**204,887**|634,459|
|_Charitable activities_||||||
|Railway operation and preservation|**_3_**|445,680|-|**445,680**|387,705|
|Membership subscriptions||23,367|-|**23,367**|21,629|
|_Other trading activities_||||||
|Commercial trading operations|**_4_**|242,544|-|**242,544**|153,800|
|_Investment income_|**_7_**|44,406|7,404|**51,810**|17,390|
|**Total income**||874,561|93,727|**968,288**|1,214,983|
|Expenditure on:||||||
|_Charitable activities_||||||
|Railway operation and preservation|**_3_**|563,062|1,600|**564,662**|513,665|
|– working||||||
|Railway operation and preservation|**_3_**|200,298|32,725|**233,023**|269,903|
|– projects||||||
|Membership and governance|**_5_**|22,375|**-**|**22,375**|28,269|
|expenses||||||
|_Other trading activities_||||||
|Commercial trading operations|**_4_**|256,448|-|**256,448**|141,486|
|**Total expenditure**||1,042,183|34,325|**1,076,508**|953,323|
|Net gain/(loss) on investments|**_13_**|18,000|_-_|**18,000**|(33,000)|
|**Net income/(expenditure)**||(149,622)|59,402|**(90,220)**|228,660|
|**for the year**||||||
|Gross transfers between funds|**_20_**|-|-|**-**|-|
|**Net movement in funds for the**||(149,622)|59,402|**(90,220)**|228,660|
|**year**||||||
|_Reconciliation of funds:_||||||
|Total funds brought forward||2,996,420|193,213|**3,189,633**|2,960,973|
|**Total funds carried**||2,846,798|252,615|**3,099,413**|3,189,633|
|**forward**||||||



_The above results are all derived from continuing activities. All gains and losses recognised in the period are included above. The surplus/(deficit) for the year for Companies Act purposes comprises the net income for the year including the gain on the revaluation of the investments and amounts to a loss of £(90,220),(2022 £228,660 surplus)._ 

22 



## **Consolidated and charity balance sheets** as at 31 December 2023 

|||**Group**|**Group**|**Charity**|**Charity**|
|---|---|---|---|---|---|
|**Company Registration**||**2023**|2022|**2023**|2022|
|**No.00646238**||||||
|**Fixed assets**|**Note**|**£**|**£**|**£**|**£**|
|Heritage fixed assets|**_11_**|**874,253**|854,285|**874,253**|854,285|
|Other tangible fixed assets|**_12_**|**672,497**|709,949|**672,497**|709,949|
|Investments|**_13_**|**274,000**|256,000|**304,000**|286,000|
|||**1,820,750**|1,820,234|**1,850,750**|1,850,234|
|**Current assets**||||||
|Stocks|**_14_**|**101,100**|104,100|**73,000**|79,000|
|Debtors|**_15_**|**107,680**|179,473|**132,145**|179,473|
|COIF deposit account||**1,033,844**|984,035|**1,033,844**|984,035|
|Bank accounts and cash balances|**_16_**|**177,122**|201,865|**164,661**|188,030|
|||**1,419,746**|1,469,473|**1,403,650**|1,430,538|
|**Creditors:**amounts falling due|within one|year||||
|Trade creditors||**49,884**|11,230|**49,884**|11,230|
|Other creditors including tax and|**_17_**|**4,696**|3,289|**4,696**|6,668|
|social security||||||
|Accruals and deferred income|**_18_**|**53,642**|54,285|**53,642**|54,285|
|||**108,222**|68,804|**108,222**|72,183|
|**Net current assets**||**1,311,524**|1,400,669|**1,295,428**|1,358,355|
|**Creditors:**amounts falling due|<br>**_18_**|**32,861**|31,270|**32,861**|31,270|
|after more than one year||||||
|**Total net assets**||**3,099,413**|3,189,633|**3,113,317**|3,177,319|
|**The funds of the charity:**||||||
|Unrestricted funds||**2,793,363**|2,944,541|**2,807,267**|2,932,227|
|Designated funds||**53,435**|51,879|**53,435**|51,879|
|Total unrestricted funds|**_19_**|**2,846,798**|2,996,420|**2,860,702**|2,984,106|
|Restricted income funds|**_20_**|**252,615**|193,213|**252,615**|193,213|
|**Total funding provided**||**3,099,413**|3,189,633|**3,113,317**|3,177,319|



The entity was entitled to exemption from audit under section 477 of the Companies Act 2006. The members have not required the entity to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006. 

No audit is required in accordance with section 144 of the Charities Act 2011. The trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements. 

The financial statement shave been prepared in accordance with the provisions applicable to entities subject to the small companies regime. The financial statements were approved and authorised for issue by the Trustees on 17 March 2024 and signed on their behalf 

**Steve Clews** (Chairman of the Trustees) **Iain McLean** (Vice Chairman) 

23 



## **Consolidated cash flow statement** 

for the year ended 31 December 2023 

||||**2023**||2022|
|---|---|---|---|---|---|
||**Note**|**£**|<br>**£**|**£**|**£**|
|**Net cash provided by/(used in)**|**_23_**||**201,683**||367,364|
|**operating activities**||||||
|**Cash flows from investing activities:**||||||
|Dividends from investments|**_23_**||**7,783**|7,663||
|Acquisition of heritage and other tangible|**_11_**|**(184,400)**||(224,790)||
|fixed assets|**_12_**|||||
|Disposal of tangible fixed assets|||**-**||-|
|(Acquisition) / divestment of investment|**_13_**||**-**||-|
|assets||||||
|**Net cash provided by / (used**|||**(176,617)**||(217,127)|
|**in) investing activities**||||||
|**Cash flow from financing activities:**||||||
|Financing activities in year|||_-_||**-**|
|**Net cash provided by/(used in)**|||**-**||-|
|**financing activities**||||||
|**Change in cash and cash**|**_22_**||**25,066**||150,237|
|**equivalents in the year**||||||
|Cash and cash equivalents at beginning of|**_22_**||1,185,900||1,035,663|
|year||||||
|**Cash and cash equivalents at**|**_22_**||**1,210,966**||1,185,900|
|**end of year**||||||



24 



## **Notes to the accounts** 

## 31 December 2023 

## **1. Accounting policies** 

The Welshpool & Llanfair Light Railway Preservation Co Ltd is a limited company domiciled and incorporated in England and Wales. The registered office is at The Station, Llanfair Caereinion, Welshpool, Powys, SY21 0SF. The company is registered as a charity (Number 1000378) with the Charity Commission. It is limited by guarantee and controlled equally by all its members. The company meets the definition of a public benefit entity under FRS102. 

## **(a) Basis of preparation** 

These financial statements have been prepared in accordance with the Statement of Recommended Practice (SORP) of the Charity Commission (revised 2015), Financial Reporting Standard (FRS) 102 and the Companies Act 2006, under the historical cost convention, modified to include financial instruments at fair value where appropriate. 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 material uncertainties about the charitable group's ability to continue as a going concern. The company therefore continues to adopt the going concern basis in preparing these financial statements. 

## **(b) Judgements in applying accounting policies and key sources of estimation uncertainty** 

Estimates and judgements are continually evaluated and are based on historical experience and other 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, seldom equal the related actual results. In the opinion of the trustees there are no estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. 

## **(c) Group financial statements** 

These financial statements consolidate the results of the charity and its wholly-owned subsidiary, W&L Sales Ltd (registered in England and Wales:03037235), on a line by line basis. 

A separate Statement of Financial Activities (SOFA) for the charity itself 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 4(1) of Schedule 1 of the Companies Act 2006 and adapted the Companies Act formats to reflect the special nature of the charity's activities. 

## **(d) Income** 

## _(i) Charitable activities_ 

Income from railway fares is included in income in the period in which the relevant journey takes place. 

Subscriptions are brought into income in equal monthly instalments for each length of membership. Life membership income is spread over twenty years. 

## _(ii) Other trading activities_ 

Income from the commercial trading operations of W&L Sales Limited is included in income in the period in which the sale is made. 

25 



## _(iii) Donations, legacies, and grants_ 

These are included in income when the charity is legally entitled to the income and the amount can be quantified with reasonable accuracy. 

## _(iv) Intangible income_ 

The group is heavily dependent on members who give their time to assist in the activities 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. 

## **(e) Expenditure** 

All expenditure is included on an accruals basis and is recognised when there is a legal or constructive obligation to pay for the goods or service. Rental 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 incurred. A major repair or refurbishment, which gives rise to a significant and continuing economic benefit to the charity by extending the useful life of the asset, is capitalised. 

## _(ii) Overhead allocation_ 

Administration and management costs comprise those overhead expenses which, whilst mainly related to the charitable activities, are not wholly so attributable. The proportion relating to the organisational management of the charity and its compliance with constitutional and statutory requirements is shown separately as Governance. 

## _(iii) Pension costs_ 

Retirement benefits for certain employees are funded by defined contributions from the group. Payments are made to approved pension providers. The group's contributions are treated as expended in the period in which they become payable. 

## **(f) Tangible fixed assets and depreciation** 

The railway’s fixed assets are categorised into Heritage and Other. 

Heritage fixed assets are land, buildings, permanent way, locomotives and rolling stock which are of historical significance in the preservation of the railway or otherwise integral to the broader objective of educating the public in the history and development of railway locomotion. Other fixed assets are integral to the operation of the railway, but of lesser historical significance and in some form replaceable. 

Acquisitions are made by purchase or donation and assets 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 full working order are charged to the income and expenditure account when incurred. Subject to the trustees’ approval, the company may dispose of fixed assets; though in the case of heritage fixed assets this will only happen in very exceptional circumstances. 

The company’s policy and programme of maintenance is summarised in the trustees’ report and the company’s website has details of its collection of locomotives and rolling stock and the history of the line. 

No depreciation is charged in respect of freehold land. Other assets are depreciated, so as to write their cost down to estimated residual value. Depreciation is normally charged in equal annual instalments over their anticipated useful lives, as follows: 

Permanent way 2% Site works 4% Buildings 2% - 3% 

Locomotives and rolling stock 5% 

Plant and equipment 10% - 20% 

26 



## **(g) Investments** 

Fixed asset investments are stated at market value at the balance sheet date. The statement of financial activities (SOFA) includes the net gains and losses arising on revaluations and disposals throughout the period. 

## **(h) Stocks** 

These are stated at the lower of cost or net realisable value, due allowance being made for obsolete and slow-moving items. Donated items are included at estimated cost. 

## **(i) Cash and cash equivalents** 

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Any bank overdrafts are shown within borrowings in current liabilities. 

## **(j) Financial assets and liabilities** 

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments. Trade debtors, trade creditors and amounts 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. 

## **(k) Equity instruments** 

There were no equity instruments issued in the year. 

## **(l) Fund accounting** 

Funds held by the charity are either: 

_Unrestricted funds_ – these are funds which can be used in accordance with the charitable objects at the discretion of the trustees; 

_Designated funds_ – these are unrestricted funds that have been set aside by the trustees for particular purposes; or 

_Restricted funds_ – these funds, which 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. The balances of the funds represent the unspent balances. 

## **(m) Contingent income** 

The charity sometimes benefits from legacies with payment received over several years. When further receipt is uncertain, amounts may be shown as contingent income. 

27 



## **2. Donations, legacies, and grants** 

|**Unrestricted**<br>**Restricted**<br>**2023**<br>2022|**Unrestricted**<br>**Restricted**<br>**2023**<br>2022|**Unrestricted**<br>**Restricted**<br>**2023**<br>2022|**Unrestricted**<br>**Restricted**<br>**2023**<br>2022|**Unrestricted**<br>**Restricted**<br>**2023**<br>2022|**Unrestricted**<br>**Restricted**<br>**2023**<br>2022|
|---|---|---|---|---|---|
|**£**<br>**£**<br>**£**<br>**£**||||||
|Gift aided donations<br>1,876<br>77,620<br>**79,496**<br>49,538||||||
|Other donations<br>1,497<br>8,703<br>**10,200**<br>6,181||||||
|Legacies<br>78,729<br>-<br>**78,729**<br>535,271||||||
|Gift Aid on fares<br>28,615<br>-<br>**28,615**<br>26,896||||||
|Grants – Powys Council<br>7,328<br>-<br>**7,328**<br>-||||||
|Grants – Welsh Govt<br>519<br>-<br>**519**<br>673||||||
|Grants – Heritage<br>Lottery Fund<br>-<br>-<br>**-**<br>15,900||||||
|||||||
|||||||
|Total 2023<br>118,564<br>86,323<br>**204,887**<br>634,459||||||
|Total 2022<br>622,400<br>12,059<br>634,459||||||



28 



## **3. Railway operation and preservation** 

||||**2023**||2022||
|---|---|---|---|---|---|---|
|**Turnover**|**Note**|**£**||**£**|£|£|
|Fares||||**435,631**||378,845|
|Keyse Cottage receipts||**3,824**|||923||
|Solar panels and EV charging||**4,420**|||4,472||
|income|||||||
|Sale of surplus materials and||**1,805**|||3,465||
|parking|||||||
|Other operating income||||**10,049**||8,860|
|Income from railway operation||||**445,680**||387,705|
|and preservation|||||||
|**Working expenses**|||||||
|Fuel||**62,736**|||70,650||
|Repairs and maintenance:|||||||
|Mechanical engineering||**51,606**|||45,736||
|Civil engineering||**42,675**|||25,632||
|Costs for special trains & events||**45,655**|||67,953||
|Loco hire fees||**15,169**|||13,401||
|Keyse Cottage running expenses||**2,035**|||1,667||
|Administration and|**_6_**|**344,786**|||288,626||
|management costs|||||||
|Total working expenses of railway operation<br>and preservation||||**564,662**||513,665|
|**Major project expenditure**|||||||
|Mechanical engineering||**8,500**|||2,000||
|Civil engineering||**22,639**|||96,523||
|Depreciation|**_11_**|**201,884**|||171,380||
||**_12_**||||||
|(Gain)/loss on disposal||**-**|||-||
|Total major project spend on railway<br>and preservation|operation|||**233,023**||269,903|
|**Net cost of railway operation and**<br>**preservation**||||**352,005**||395,863|



29 



## **4. Subsidiary's trading activities** 

|**Note**<br>Income – Consultancy<br>Income – Catering<br>Income – Shops<br>Total trading income<br>Less: Catering cost of sales<br>Gross tearoom profit<br>Less: Shops cost of sales<br>Gross shops profit<br>Less: Administration and<br>management costs<br>**_6_**<br>Total trading expenditure|**2023**<br>**£**<br>**£**<br>**-**<br>**171,502**<br>**71,042**|2022<br>£<br>£<br>1,550<br>87,850<br>64,400<br>153,800<br>45,612<br>_48.1%_<br>34,260<br>_46.8%_<br>61,614<br>141,486|
|---|---|---|
||**242,544**<br>**98,160**<br>_42.8%_<br>**38,784**<br>_45.4%_<br>**119,504**<br>**256,448**||
|Net (loss)/profit for the year<br>**(13,904)**<br>**Subsidiary’s balance sheet at year-end**<br>**2023**<br>Current assets -other<br>**40,561**<br>Current (liabilities) – other<br>**-**<br>Current assets / (liabilities) – inter-company<br>balance with parent company<br>**(24,465)**||12,314<br>2022<br>38,935<br>-<br>3,379|
|**Net assets**<br>**16,096**||42,314|



_W&L Sales Limited is a 100% owned subsidiary, with £30,000 share capital._ 

## **5. Membership and governance expenses** 

|||**£**|£|
|---|---|---|---|
||**_Note_**|**2023**|2022|
|The Llanfair Railway Journal||**12,982**|11,954|
|Membership expenses|**_6_**|**5,659**|5,753|
|Governance costs|**_6_**|**3,734**|10,562|
|||**22,375**|28,269|



30 



## **6. Administration and management costs** 

||**Railway**|**Commercial**|**Membership**|**Total 2023**|Total 2022|
|---|---|---|---|---|---|
||**operation &**|**trading W&L**|**and**|||
||**preservation**|**Sales Ltd**|**governance**|||
||**£**|**£**|**£**|**£**|**£**|
|**Establishment**||||||
|Rent, rates, water and|41,804|-|-|**41,804**|38,386|
|insurance||||||
|Electricity and heating|25,320|-|-|**25,320**|8,966|
|Equipment rental and|5,340|-|-|**5,340**|4,419|
|maintenance||||||
|Cleaning and hygiene|13,634|-|-|**13,634**|12,928|
|supplies||||||
|Rent charged to trading|(19,887)|19,887|-|**-**|-|
||66,211|19,887|-|**86,098**|64,699|
|**Selling**||||||
|Advertising and publicity|26,283|-|-|**26,283**|31,120|
|**Administrative**||||||
|Staff costs**_(Note 9)_**|199,513|87,617|-|**287,130**|187,186|
|Travelling|1,422|-|-|**1,422**|1,017|
|External training|3,130|-|-|**3,130**|6,873|
|Telephone and radio|4,671|-|-|**4,671**|4,084|
|Postage, stationery, and|6,872|-|-|**6,872**|4,381|
|IT costs||||||
|Independent audit/|-|-|1,500|**1,500**|8,500|
|examination fees||||||
|Accountancy fees|19,265|-|-|**19,265**|17,690|
|General expenses|5,237|-|7,893|**13,130**|15,270|
|Admin recharge to trading|(12,000)|12,000||**-**|-|
||228,110|99,617|9,393|**337,120**|245,001|
|**Financial**||||||
|Bank charges and booking|24,182|-|-|**24,182**|25,735|
|processing costs||||||
|**2023 Total**|**344,786**|**119,504**|**9,393**|**473,683**|366,555|
|2022|288,626|61,614|16,315|366,555||



31 



## **7. Investment income** 

||**2023**|2022|
|---|---|---|
||**£**|£|
|CCLA Charity Investment Funds:|||
|– Investment fund shares|**7,783**|7,663|
|CCLA Deposit Fund|**44,027**|9,693|
|– Interest|||
|Interest on tax|**-**|34|
||**51,810**|17,390|
|Of which: restricted|**7,404**|4,520|
|unrestricted|**44,406**|12,870|



## **8. Taxation** 

No liability arises to corporation tax for the financial period by reason of the company’s charitable status and the donation by gift aid of its net profits by the subsidiary. There is no deferred taxation to be recognised. 

## **9. Information regarding trustees/directors and employees** 

||**2023**|2022||
|---|---|---|---|
||**£**|£||
|_(a) Staff costs during the period_||||
|_were:_||||
|Wages and salaries|**261,791**||170,067|
|Social security costs|**14,411**||9,659|
|Other pension costs|**10,928**||7,460|
||**287,130**||187,186|



No member of staff received emoluments in excess of £60,000 (2022: Nil). Key Management received emoluments of £48,710 (2022 £46,872). In addition to its paid staff, the charity benefits from the substantial efforts of over 250 working volunteers. 

|_(b) Average number of persons employed_|**Number 2023**|Number 2022|
|---|---|---|
|Charity (full time equivalent)|**6**|6|
|Subsidiary (full time equivalent)|**4**|2|
||**10**|8|



The group employed 23 (2022 18) different employees during the year. 

## _(c) Trustees_ 

As a charity, the company is precluded from providing any emoluments for its trustees/directors and the Articles of Association of the subsidiary contain a similar provision. 

Trustees received £Nil as reimbursement of travel expenses (2022: £Nil). 

32 



## **10. Related party transactions** 

There were no related party transactions in the year. Of the trustees, Steve Clews is a director of Oswestry and Borderlands Tourism Ltd, Shropshire Union Canal Society, the Heritage Railway Association and the Heritage Rail Charitable Trust. Robert Robinson is town clerk to Llanfair Town Council. Helen Ashby is chair of the Friends of Sierra Leone National Railway Museum. Andrew Charman is chair of Cloverlands Museum and editor of Narrow Gauge World. These trustees have recused themselves from any discussions or decisions on topics that may have given rise to a conflict of interest. In 2023, the Friends of Sierra Leone National Railway Museum made a donation of £8,500 to the railway towards costs related to locomotive No 85. 

## **11. Heritage fixed assets: group and charity** 

||**Freehold land,**|**Locomotives**|**Other**|**Total**|
|---|---|---|---|---|
||**site works,**|**and rolling**|**plant and**||
||**buildings, and**|**stock**|**equipment**||
||**permanent**||||
||**way**||||
||**£**|**£**|**£**|**£**|
|**Cost**|||||
|At 31 December 2022|596,266|1,400,101|12,507|2,008,874|
|Additions|-|101,878|-|101,878|
|(Disposals)|-|-|-|-|
|At 31 December 2023|596,266|1,501,979|12,507|2,110,752|
|**Depreciation**|||||
|At 31 December 2022|424,345|717,737|12,507|1,154,589|
|Charges for the period|15,118|66,792|-|81,910|
|(Disposals)|-|-|-|-|
|At 31 December 2023|439,463|784,529|12,507|1,236,499|
|**Net book amount**|||||
|**31 December 2023**|**156,803**|**717,450**|**NIL**|**874,253**|
|31 December 2022|171,921|682,364|NIL|854,285|



There was no capital expenditure contracted for at the period end (2022: Nil). 

## **Five-year summary of heritage fixed asset transactions:** 

**Year Purchases Major items Year £** 2019 147,662 No. 10 _Sir Drefaldwyn_ No. 1 _The Earl_ 2020 190,183 No. 10 _Sir Drefaldwyn_ No. 1 _The Earl_ 2021 144,619 No. 10 _Sir Drefaldwyn_ No. 1 _The Earl_ 2022 77,342 _No. 10 Sir Drefaldwyn Sierra Leone carriage 1066_ 2023 101,878 _Bowater wagons 610 and 631 Sierra Leone carriage 1066_ 

33 



## **12. Other tangible fixed assets: group and charity** 

|**Freehold land,**|**site works,**|**Locomotives**|**Other plant &**|**Total**|
|---|---|---|---|---|
|**buildings & permanent way**||**& rolling stock**|**equipment**||
|**Cost**<br>|**£**|**£**|**£**|**£**|
|At 31 December 2022|878,624|475,717|357,545|1,711,886|
|Additions|-|26,243|56,279|82,522|
|(Disposals)|-|-|(2,180)|(2,180)|
|At 31 December 2023|**878,624**|**501,960**|**411,644**|**1,792,228**|
|**Depreciation**|||||
|At 31 December 2022|464,995|318,785|218,157|1,001,937|
|Charge for the period|36,998|33,898|49,078|119,974|
|(Disposals)|-|-|(2,180)|(2,180)|
|At 31 December 2023|**501,993**|**352,683**|**265,055**|**1,119,731**|
|**Net book amount**|||||
|**31 December 2023**|**376,631**|**149,277**|**146,589**|**672,497**|
|31 December 2022|413,629|156,932|139,388|709,949|



There was £24,000 of capital expenditure contracted for at the period end (2022: £105,000). 

## **13. Investments** 

|**COIF charity funds**|||**Group**||**Charity**||
|---|---|---|---|---|---|---|
||**Number**|**2023**||2022|**2023**|2022|
|**Investment Fund shares**||**£**||£|**£**|£|
|At 1 January|14,119|**256,000**||289,000|**256,000**|289,000|
|at market value|||||||
|Disposals|-|**-**||-|**-**|-|
|Gain/(loss) on investment||**18,000**||(33,000)|**18,000**|(33,000)|
|from change in value|||||||
|At 31 December|14,119|**274,000**||256,000|**274,000**|256,000|
|at market value|||||||
|**Shares in subsidiary**|||||||
|At 31 Decemberat cost|30,000||||**30,000**|30,000|
|||**274,000**||256,000|**304,000**|286,000|
|Historic cost|||||||
|at 31 December||**147,000**||147,000|**177,000**|177,000|



The investment in the subsidiary represents the whole of the issued share capital, comprising ordinary shares, of W&L Sales Ltd (company number 03037235). W&L Sales Ltd carries on the commercial trading activities of the group through shops and refreshment facilities at stations and away from the line and donates its entire net profit to the parent company by Gift Aid. The total of its capital and reserves is £16,096 (2022: £42,314). Further details on W&L Sales Ltd are shown in Note 4. 

34 



## **14. Stocks** 

||**Group**|**Group**||**Charity**|**Charity**|
|---|---|---|---|---|---|
||**2023**|2022||**2023**|2022|
||**£**|£||**£**|£|
|Stores|**73,000**|79,000|**73,000**||79,000|
|Goods for resale|**28,100**|25,100||**-**|-|
||**101,100**|104,100|**73,000**||79,000|
|**15. Debtors**||||||
||**Group**|||**Charity**||
||**2023**|2022||**2023**|2022|
||**£**|£||**£**|£|
|Trade debtors|**17,440**|<br>11,860||<br>**17,440**|<br>11,860|
|Prepayments and|**42,725**|<br>110,427||<br>**42,725**|<br>110,427|
|accrued income||||||
|VAT|**12,726**|<br>28,829||<br>**12,726**|<br>28,829|
|Gift Aid recoverable|**34,789**|<br>28,357||<br>**34,789**|<br>28,357|
|Amount due from|**-**||-|<br>**24,465**|<br>-|
|subsidiary company||||||
||**107,680**|<br>179,473||<br>**132,145**|<br>179,473|



## **16. Bank overdraft** 

The group has overdraft facilities of £Nil (2022 - £Nil). 

## **17. Other creditors including tax and social security** 

|||**Group**||**Charity**||
|---|---|---|---|---|---|
||**2023**||2022|**2023**|2022|
||**£**||£|**£**|£|
|PAYE|**4,696**||3,289|**4,696**|3,289|
|Amount due to subsidiary|**-**||-|**-**|3,379|
|company||||||
||**4,696**||3,289|**4,696**|6,668|



## **18. Accruals and deferred income** 

||**Group**||**Charity**||
|---|---|---|---|---|
||**2023**|2022|**2023**|2022|
||**£**|£|**£**|£|
|Subscriptions in advance|**50,603**|46,495|**50,603**|46,495|
|Less: falling due after|**(32,861)**|(31,270)|**(32,861)**|(31,270)|
|more than one year|||||
||**17,742**|15,225|**17,742**|15,225|
|Accruals and deferred|**35,900**|39,060|**35,900**|39,060|
|income|||||



35 



**53,642** 54,285 **53,642** 54,285 

## **19. Unrestricted funds** 

||Balances|**Income**|**(Expenditure)**|**Transfers/**|**Balances**|
|---|---|---|---|---|---|
||31 Dec|||**revaluation**|**31 Dec**|
||2022||||**2023**|
||**£**|**£**|**£**|**£**|**£**|
|_General funds_|2,944,541|**873,005**|**(1,042,183)**|**18,000**|**2,793,363**|
|_Designated funds – future capital_|_projects_|||||
|Museum/Interpretation|51,879|1,556|-|-|53,435|
|Centre||||||
||51,879|**1,556**|**-**|**-**|**53,435**|
|Total unrestricted funds|2,996,420|**874,561**|**(1,042,183)**|**18,000**|**2,846,798**|



_Many donations and legacies fund the purchase of fixed assets, which are then depreciated over future years. At 31 December 2023, £1,250,151 (2022: £1,345,684) of General funds represents reserves that will match future depreciation of the assets bought with those donations and legacies._ 

## **20. Restricted funds** 

||Balances|**Income**|**(Expenditure)**|**Transfer**|**Balances**|
|---|---|---|---|---|---|
||31 Dec 2022|||from/(to)|**31 Dec**|
|||||unrestricted|**2023**|
|||||funds||
||£|**£**|**£**|**£**|**£**|
|Restoration of|6,952|337|-|-|**7,289**|
|No.6_Monarch_||||||
|Restoration of No.14|28,292|9,541|(8,500)|-|**29,333**|
|Restoration of  No. 8_Dougal_|1,621|821|-||**2,442**|
|Zillertal carriages|3,740|112|(1,600)|-|**2,252**|
|maintenance||||||
|Carriage improvement fund|47,899|14,536|(24,225)|-|**38,210**|
|Heritage wagon fund|4,145|124|-|_-_|**4,269**|
|Overhaul of  No. 7|24,663|63,661|-||**88,324**|
|_Chattenden_||||||
|Diesel maintenance|5,668|170|-|-|**5,838**|
|Viaduct and bridges|22,752|683|-|-|**23,435**|
|protection||||||
|2020 appeal|47,481|3,742|-|-|**51,223**|
||193,213|93,727|(34,325)|-|**252,615**|



36 



## **21. Analysis of group net assets by fund** 

||**Unrestricted**|**Restricted**|**Total**|
|---|---|---|---|
||**funds**|**funds**|**31 Dec 2023**|
||**£**|**£**|**£**|
|Tangible heritage and other fixed assets|1,546,750|-|**1,546,750**|
|Investments|234,936|39,064|**274,000**|
|Net current assets|1,097,973|213,551|**1,311,524**|
|Long term liabilities|(32,861)|-|**(32,861)**|
||2,846,798|252,615|**3,099,413**|



## **22. Analysis of changes in net funds** 

||At|Cash flows|**At**|
|---|---|---|---|
||31 Dec||**31 Dec**|
||2022||**2023**|
||**£**|**£**|**£**|
|Bank and cash balances|201,865|(24,743)|**177,122**|
|COIF Deposit account|984,035|49,809|**1,033,844**|
||1,185,900|**25,066**|**1,210,966**|



## **23. Net cashflow from operating activities** 

||**2023**|2022|
|---|---|---|
||**£**|**£**|
|Net income/(expenditure) per|**(90,220)**|228,660|
|Statement of Financial Activities|||
|Adjust for non-cash items:|||
|Depreciation|**201,884**|171,380|
|Net (gain)/loss on investments|**(18,000)**|33,000|
|Adjust for working capital changes:|||
|(Increase)/decrease in stocks|**3,000**|(8,900)|
|(Increase)/decrease in debtors|**71,793**|(21,228)|
|(Decrease)/increase in creditors|**41,009**|(27,885)|
|Adjust for dividends received:|**(7,783)**|(7,663)|
|(shown separately in Cashflow)|||
||**201,683**|367,364|



37 



## **24. Statement of financial activities:** 

Prior year comparisons by fund type 

||Unrestricted|Restricted|Total 2022|
|---|---|---|---|
||funds|funds||
||£|£|£|
|**Income from:**||||
|_Voluntary income_||||
|Legacies and donations|622,400|12,059|634,459|
|_Charitable activities_||||
|Railway operation and preservation|387,705|-|387,705|
|Membership subscriptions|21,629|-|21,629|
|_Other trading activities_||||
|Commercial trading operations|153,800|-|153,800|
|_Investment income_|12,870|4,520|17,390|
|**Total income**|1,198,404|16,579|1,214,983|
|**Expenditure on:**||||
|_Raising funds_|-|-|-|
|_Charitable activities_||||
|Railway operation and preservation –|509,061|4,604|513,665|
|working||||
|Railway operation and preservation –|208,678|61,225|269,903|
|projects||||
|Membership and governance expenses|28,269|**-**|28,269|
|_Other trading activities_||||
|Commercial trading operations|141,486|-|141,486|
|**Total expenditure**|887,494|65,829|953,323|
|Net gain/(loss) on investments|(33,000)|_-_|(33,000)|
|**Net income/(expenditure) for the**|277,910|(49,250)|228,660|
|**year**||||



38 



## **25. Management accounts summary financials by activity** 

||**Railway**|**W&L**|**Appeals &**|**Membership**|**2023**|2022|
|---|---|---|---|---|---|---|
||**operation**|**Sales**|**investment**|**and**|||
||**and**|**-Retail &**|**income**|**governance**|||
||**preservation**|**catering**|||||
||**£**|**£**|**£**|**£**|**£**|**£**|
|Income from daily|445,680|242,544|51,810|23,367|**763,401**|580,524|
|operating activities|||||||
|Gift Aid on fares|28,615|-|-|-|**28,615**|26,896|
|Donations – earmarked|3,750|-|-|-|**3,750**|10,800|
|to running cost items|||||||
|Grants  - for running|7,847|-|-|-|**7,847**|15,900|
|costs: local engagement|||||||
|/audience research|||||||
|Daily operating (costs)|(564,662)|(256,448)|-|(22,375)|**(843,485)**|(675,920)|
|**Net income: Daily**|(78,770)|(13,904)|51,810|992|**(39,872)**|(41,800)|
|**operations**|||||||
|**_Long term income_**|||||||
|Donations, Legacies, Grants|||164,675||**164,675**|580,863|
|(Loss)/Gains on investments|||18,000||**18,000**|(33,000)|
|(Audit fee) – due to legacy income|||-||**-**|(7,500)|
|**_Long term project expenditure_**|||||||
|Major project (spend)|(31,139)|-||-|**(31,139)**|(98,523)|
|(Depreciation)|(201,884)|-||-|**(201,884)**|(171,380)|
|**Net income/**|(311,793)|(13,904)|234,485|992|**(90,220)**|228,660|
|**(expenditure) by**|||||||
|**activity**|||||||



39 



## **Minutes of 2023 Annual General Meeting** 

## **WELSHPOOL & LLANFAIR LIGHT RAILWAY PRESERVATION CO LTD** 

**Sixty fourth Annual General Meeting held at 5.00pm on Saturday 13 May 2023 at the Station, Llanfair Caereinion, Powys** 

**Present:** Tony Thorndike (Vice President)                   David Jones Steve Clews (Chairman)                                Bob Mason Andrew Charman                                         James Brett (General Manager) John Forman                                               Michael Reilly (Company Secretary) and 28 other members, including 15 by video-link Steve Clews chaired the meeting 

## **Apologies for Absence** 

Apologies were received from the Earl of Powis (President), Alan Higgins (Vice-President), Sir Philip Williams (Vice-President), Helen Ashby, Dick Johnson, Annora Johnson, Mervyn Pritchard and Richard Thomas. 

## **1.  Minutes of the Annual General Meeting on 15 May 2022** 

The minutes of the previous AGM were agreed as a true record. There were no matters arising. 

## **2.  Audited Consolidated Financial Statements and Report of the Trustees for the year ended 31 December 2022** 

Steve Clews highlighted the main points of the annual report. 

In some ways 2022 had been more difficult than 2021, the main difficulties being high inflation and instability in the supply of coal. But passenger numbers were encouraging, at 96% of 2019 levels, with operating income 38% higher, due in part to an increased uptake of premium and add-on experiences. Shop income held up well, tearoom income less so although we again received a useful contribution from the mobile catering unit. We welcomed the Cloverlands model car museum as an additional attraction at Llanfair and unlike some railways we had been able to continue operating with steam traction during the hot, dry days of the summer. Paid staff and volunteers alike had all worked hard to make this possible and Steve Clews thanked them all for their important contributions. 

Bob Mason then summarised the main features of the Consolidated Financial Statements. The headline was a very impressive 78% increase in income due mainly to income from special events. The success of these varied, however, and we aimed to build on the successful ones and learn from the others in 2023. Other important points to note were the importance of the contribution made by W&L Sales to income, although this had been lower in 2022 than in ‘normal’ years; and the £27,000 contribution from Gift Aid, which covered roughly two-thirds of the cost of our coal for the year. While we had recorded a deficit on day-to-day activities this year, the £100,000 insurance payout in 2021 from our pandemic cover had provided a useful buffer. The goal was still to balance the books on day-to-day operations. We had received more helpful support from the National Lottery Heritage Fund and some more generous bequests. Our reserves were a healthy £1.6 million at year-end although this would reduce significantly as the business plan progressed. 

40 



In subsequent questions, Kate Billmore asked how ‘Steambricks’ was expected to make a profit in 2023, given that it had not done so in 2022. Bob Mason explained that it would be advertised more and held in Welshpool not Llanfair. James Brett added that the focus would be on ‘hands-on interaction’ rather than an expensive static display, so the overall cost would be roughly one-third of the previous year’s event. Steve Davidson noted that railway operating costs were higher than revenue and asked for an explanation, expressing concern that this suggested that income from donations and legacies was being used to cover running costs. Bob Mason said that this was why revenue from W&L Sales was so important. In common with almost all heritage railways, income from ticket sales alone was insufficient to cover railway operating costs. Almost 30% of traffic income went on coal and basic locomotive running repairs alone. We therefore looked to our sales subsidiary and membership subscriptions to cover the difference. Note 25 in the accounts explained day-to-day income and expenditure in more detail. Income from legacies was used for investment and capital spending, not to cover running costs. 

The adoption of the Annual Report of the Trustees and the Audited Consolidated Financial Statements was then proposed by Steve Davidson, seconded by Tony Thorndike, and passed unanimously. 

## **3.  Election of Trustees** 

John Forman and Robert Robinson were retiring from the board by rotation and standing for re-election. Ryk Parkinson and Anne-Marie Wright were standing for election. Since there were four candidates for four places the Articles required a singlestage ballot. The ballot was held, all four candidates received more votes in favour than against and were therefore elected or re-elected to the board. 

## **4.  Election of President** 

Steve Clews proposed that the Earl of Powis be elected President, which was seconded by Steve Davidson and agreed unanimously. 

## **5.  Election of Vice Presidents** 

The following nominations were made: Alan Higgins, Tony Thorndike, and Sir Philip Williams. With the consent of the meeting, the nominations were put collectively and agreed unanimously, Andrew Charman proposing and Anne-Marie Wright seconding. 

There being no further business, Steve Clews thanked those responsible for organising the meeting and all who attended or joined by video-link and the meeting closed at 5.40pm. 

41