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2020-12-31-accounts

(A Company Limited by Guarantee)

Company Number: 2848095 Charity Number: 1026357

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2020

The Society for Nautical Research Contents Page

Page
Legal and Administrative information 1
Report of the Council 2 - 10
Report of the Auditor 11 - 13
Statement of Financial Activities 14
Balance Sheet 15
Notes to the Financial Statements 16 - 23

The Society for Nautical Research Legal and Administrative Information

President Vacant

Chairman Dr J D Davies

Hon. Secretary and Company Secretary Mr A B Roach

Hon. Treasurer Dr P V Nash

Editor Dr M Bellamy

Vice Presidents Mr F A Aberg Cdr J M Bingeman Mr J Coad (Senior Vice President) Admiral Sir Kenneth Eaton Professor E J Grove Professor R Harding Professor D G Law Lieut Cmdr F L Phillips Dr S Rose Dr Pieter van de Merwe

Membership Secretary Mrs H Garvey

Auditor Moore Kingston Smith LLP Devonshire House 60 Goswell Road London EC1M 7AD

Bankers Barclays Bank plc 8/9 Hanover Square London W1A 4ZW

Investment Managers Adam & Company 25 St Andrew Square Edinburgh EH2 1AF

Registered Office Devonshire House 60 Goswell Road London EC1M 7AD

Page 1

The Society for Nautical Research Trustees' Report For the year ended 31 December 2020

Status and Administration

The Society is a charitable company limited by guarantee (registration number: 2848095) registered with the Charity Commission number 1026357. The Council sets the policies of the Society and these are administered by the Chairman, Honorary Secretary and Honorary Treasurer. The governing document of the charity is the memorandum and articles of association. There are no restrictions imposed by the governing document except the objects of the charity as stated below.

Objects

The principal activity of the company includes the promotion of research into nautical antiquities and matters relating to the history of seafaring and ship building, languages and customs of the sea and to publish the results of such research and otherwise advance public education in such subjects. In particular this includes the publication of The Mariner's Mirror quarterly. In addition there are two restricted funds, both of which are subsidiary charities, the Save the Victory Fund and the Macpherson Collection Endowment Fund. The Save the Victory Fund has been formed for the restoration and presentation to the public of Nelson's Flag Ship HMS Victory and the Macpherson Collection Endowment Fund acquires works of art for the National Maritime Museum.

Trustees

The Officers of the Society and the Council members are the Charity Trustees of the Society and are listed below:

Dr J D Davies (Chairman of the Society) Dr A Coats (elected 2018, review 2022) Dr P V Nash (Honorary Treasurer) Dr J Davey (elected 2019, review 2023) A Roach (Honorary Secretary ) N Hewitt (elected 2019, review 2023) Dr C Holt (elected 2019, review 2023) R Bateman (re-elected 2017, review 2021) Dr CH McMurray (elected 2017, review 2021) S Bligh (elected 2018, review 2022) Dr K Parker (elected 2017, review 2021) P Bugden (elected 2019, review 2023) Capt P King (elected 2020 review 2024) C. Brandon (elected 2019, review 2023) Dr C Pearce (elected 2018, review 2022)

Trustee appointment, induction and training

The Articles of Association of the Society specify the election procedure for the Officers of the Society and the Council. In accordance with their obligations Council in each year nominates a list of willing candidates for election by the members of the Society at each properly constituted annual general meeting. These may be for the positions of Vice President or for Councillors as well as for the President and other Officers of the society. The Officers are obliged to submit themselves for re-election each year. The Councillors whose four year term of office has expired may stand for re-election. The final say as to which persons serve is made by the membership of the Society who are also asked to nominate candidates for election. All the Vice Presidents, Councillors and Officers are given a copy of the Memorandum of Understanding and the Articles of Association of the Society together with a copy of the Society’s Guide to the Conduct of Business. This includes a reminder that Vice Presidents have a working role and that Councillors and Officers are both Directors and Trustees of the Society and this reminder is reinforced in Council meetings from time to time by the Officers. The Directors and Trustees of the Society are helped to discharge their responsibilities through guidance in Council by the Officers, by receiving necessary papers recording the advice of the Society’s financial advisers and by receiving, at least once a year, a Risk Analysis Review. The Council’s particular contribution is a rigorous annual scrutiny of budget proposals and a quarterly review of progress. In addition, the Finance and General Purposes Committee receive an oral and written briefing every six months by the Society’s financial advisors. The frequency has increased during the difficult market conditions which have prevailed in recent years.

Page 2

The Society for Nautical Research Trustees' Report (Continued) For the year ended 31 December 2020

Key Management Personnel

The key management personnel of the society are the Officers and the Council members. The Officers are reelected every year by the Society at the AGM, and their efforts during the year speak for themselves. Council members have been elected on the basis of the wisdom and experience that they can bring to the Society. The vice presidents bring a wealth of experience across many fields to Council meetings, and are always available to give advice in their particular field of expertise if it is asked for. The Editor of the Mariner's Mirror, Dr Bellamy is remunerated at the rate of £2,000 per edition. The Editor of Topmasts, N Blanchford, is remunerated at the rate of £1,000 per edition.

The Aims of the Society

To promote research into nautical antiquities, into matters relating to sea-faring and shipbuilding in all ages and among all nations, into the language and customs of the sea and into other subjects of nautical interest, to publish the useful results of such research and otherwise advance public education in such subjects (Memo of Association, 1993).

Objectives, Strategies and Achievements

----- Start of picture text -----
Objective Strategy Achievement
Publish The Mariner’s Mirror Support the work of the Editor, This was achieved as usual with electronic
four times per annum the Hon. Reviews Editor and copies of The Mariner’s Mirror targeted at
the Editorial Board. institutional users by Taylor & Francis and
(Operations overseen by the with hard copies for personal members.
Publications Committee)
Publish Topmasts, the Support the work of the Topmasts is available electronically
Society's newsletter, four Topmasts Editor. through the SNR website.
times a year.
Manage the website to reflect The website reflects the Membership figures continue to increase,
the Society and its strengths and achievements of with members joining through activities
achievements. the Society and uses social relating to the Forum, Topmasts and the
media to reach new members. new Mariner's Mirror Podcasts which was
introduced in October 2020.
Advance public education in Provide financial support for at Ten organisations and individuals were
Maritime History. least two conferences annually awarded grants to support research projects
as well as other research and/or conferences - including BCMH,
proposals, the New Researchers Exeter University and Maritime History
Conference and the ICMH North. The Anderson Medal for best book
Seminar Series. in Maritime history (2019) was awarded to
To award the Anderson, Victory Evan Mawdsley for his book The War for the
and Centenary Medals as Seas. The Victory Medal was awarded to
appropriate. Mark Edwards for his dedication to the
preservation and restoration of various
craft particularly those relating to the
Thames.
----- End of picture text -----

Page 3

The Society for Nautical Research Trustees' Report (Continued) For the year ended 31 December 2020

Overview

This year is the eighth to reflect the publishing arrangements between ourselves and Taylor & Francis for The Mariner’s Mirror, an INT1 category international publication in the European List of Humanities with high visibility and influence among researchers in the various research domains in different countries, regularly cited all over the world. Whilst still retaining editorial control of The Mariner’s Mirror and meeting the costs of editing and typesetting, the Society is no longer responsible for the printing and distribution of the journal which continues to be undertaken by Taylor & Francis. Council believes this partnership will continue to secure the Society’s standing in the electronic age. The Mariner’s Mirror is produced in electronic form and targeted by Taylor & Francis at institutional bodies who no longer want to receive publications in paper format. This has not only significantly increased The Mariner’s Mirror‘s exposure to the worldwide institutional market but it has also created online worldwide demand for full text downloads. The Mariner’s Mirror continues to be available in the traditional form to personal members of the Society.

This is sixth year in which the SNR website managed by Burlington Partnership has continued to provide a dynamic and interactive platform covering the activities of the society and its members available to both existing and potential new members worldwide. It has now become the predominant source for securing new members. In addition, our new MARINER'S MIRROR PODCAST and also our electronic newsletter TOPMASTS has become extremely popular for our membership and continues to expand and provide an invaluable if more informal source of information and articles covering a wide spectrum of maritime interests.

Review of Activities and Financial Results

The Society has recorded a surplus for the year ended 31 December 2020 amounting to £2,603 taking into account £(76,384) which represented net losses on investments (2019: net gains£597,440). Investments for both unrestricted and restricted funds decreased in market value by 1.48% from £4,978,523 to £4,904,710. As far as the balance sheet is concerned this decreased the net assets by 0.05% from £5,245,345 to £5,242,952.

Overall, this year has been relatively unique given the impact the COVID 19 pandemic has had on our ability to achieve all that we had hoped and budgeted for in supporting maritime history research. While it has therefore been relatively quiet in terms of activities and grants we have fortunately been able to remain very active in pursuing our publishing endeavours, both print and on the website. Both Mariner’s Mirror and TOPMAST have been very well received and our website has been particularly busy enhanced by the introduction towards the end of the year of a series of podcasts which programme will be accelerated as we move into 2021. Our income remains stable despite a modest decrease in investment income. However, subscriptions have increased significantly. including once again those members resident overseas which is most encouraging. Our contract with Taylor & Francis has enabled a further modest improvement in royalties in lieu of subscription income traditionally derived from our institutional membership subscriptions. Overall administration costs for the year have remained stable and within budget. On the grants funding side, in general those provided through the Anderson and Tomlin portfolios were significantly down on the previous year almost exclusively caused by the impact of lockdowns. Once more the Society has determined that a further £5,000 should be transferred to the contingency fund held with our investment advisers Adam & Co.

Page 4

The Society for Nautical Research Trustees' Report (Continued) For the year ended 31 December 2020

The following comments for each Fund provide some background behind the overall results.

The Society’s Tomlin Fund provided £300 to support Maritime History North.

Both the MacPherson Fund and The Save the Victory Fund (STVF) have had a dormant year in actual grant distribution

The Anderson Fund provided research grants to the following recipients both home and abroad, namely R BlackmanRoberts, Dr P Huddle, S Carballo,J Smith, T Moots and M Blair.

Risk Assessment

The Trustees have examined the financial and operational risks which the charity faces and confirm that systems controls and review procedures have been established to mitigate exposure to these risks.

In order to help manage these risks further, a Reserves Policy was adopted and first published in the Annual Report for 2001. This is reviewed annually and revised if necessary to reflect the financial circumstances in which the Society operates should these change significantly.

Although the Society has no fixed assets, nor places any reliance upon raising funds from new donors to meet commitments, it nevertheless considers the following types of risk to be the most important and the Society has therefore taken over time a number of appropriate steps designed to mitigate their impact.

Loss of reputation, whether through the website or The Mariner's Mirror, is a significant group of risks that would seriously affect the performance of the Society. Although there is a relatively low probability of this happening we nevertheless undertake certain continuing precautions including but not limited to vigilant management at all times, properly exercised moderation on the website as well as making sure we comply with all applicable regulations and legislation. Moreover, we continually monitor performance of Taylor & Francis as well as having in place a proper succession plan to ensure we maintain editorial continuity.

The other major area of risk is financial including significant loss of funds or reserves due to negligence or incompetence by our investment advisers or collapse of investment markets. Again such events would be very serious if they were to happen although their likelihood remains relatively low provided we continue to monitor their performance through regular meetings including agreeing appropriate risk guidelines and performance assessment criteria.

The third broad group of risks are operational including uncontrolled budgetary excesses as well as fraud, theft or dishonesty by staff or third parties. The precautions we have taken for the former include but are not limited to applying a rigorous budgetary procedure that must be approved by the Trustees, and regularly monitored by the Finance & General Purposes committee. For the latter we have instituted liability insurance cover where and when appropriate, we have dual control of payments and disbursements while our payment systems on the website are secured with a ring fenced bank account for transfers via PAYPAL/STRIPE.

Page 5

The Society for Nautical Research Trustees' Report (Continued) For the year ended 31 December 2020

Reserves Policy

The Reserves Policy of the Society has been determined based on the Society’s objectives and the current and expected future activities needed to fulfil these objectives. The trustees have set a policy after taking into account the foreseeable future income and expenditure patterns and associated risks. Its main features are:

Restricted Funds

Unrestricted Funds

The policy is designed to provide resources to fund the rest of the Society’s activities into the foreseeable future, including promotion of research into nautical antiquities and matters relating to the history of seafaring and ship building, languages and customs of the sea and to publish the results of such research and otherwise advance public understanding and education in these subjects. This requires the Society:

However, the major challenge before us remains the need to ensure we have the resources available to invest in the necessary technology to enable the Society to meet the needs of a changing readership market by adopting a number of web-based strategies including the digitization of The Mariner’s Mirror. As such the Farrar Fund continues to provide an assured source of potential funding for such development and has been structured from an investment point of view to provide both liquidity (for potentially sudden or urgent capital requirements) as well as longer term equity type support for the sort of transformation that is now well underway.

Our reserves are therefore derived from two sources. The first is by transferring every year whenever there is a surplus at year end, a sum of £5,000 to a contingency fund held by our investment managers. This currently amounts to £35,607 at the end of the year but remains available at any time to facilitate the Society’s ability to meet an unbudgeted or emergency liability that might prove difficult to fund from available current income at the time. The second source derives from surpluses reached in any year where grants or donations are by nature erratic due to the nature of the underlying purpose. A case in point would be the STVF where there is a very significant surplus amounting to over £173,167 on the income and deposit accounts because the priority for dealing with structural repairs to the hull and deck is outside the remit of the STVF.

Page 6

The Society for Nautical Research Trustees' Report (Continued) For the year ended 31 December 2020

Future plans

The Trustees are mindful that they are responsible for the heritage of the society and also for its healthy future. The commissioning of the new website was the first step towards a more electronically aware future which is already bringing in new members. There are other new projects in hand. The Research and Programs Committee continues to invite our members to suggest areas for new development. Their responses will be analysed, but it is pleasing to note that many members have indicated their approval of the developments which have taken place.

Investment Powers, Policy and Performance

On 31st December 2020, the value of the portfolios overseen by the Society totalled £4.90 million, which represents a decrease of just under 1.5% from the value a year ago. This figure includes the Farrar Fund (c.£152,000) which is managed with a lower risk mandate. The total value above excludes money accumulating in the income accounts of each portfolio. Adjusting for all withdrawals, and the size of the different portfolios, the weighted average performance net of fees over the year (including the Farrar Fund) was 0.28%. In aggregate all 6 portfolios produced income of £113,022 over the year.

By way of comparison, the Societies bespoke benchmark that was agreed with the trustees for all the portfolios bar the Farrar Fund, consisting of 50% FTSE All Share TR/20% FTSE All World ex UK (£) TR/30% Government All Stocks TR, gained 0.52% (gross of fees) during the year. The Retail Price Index (RPI) rose by 1.2% during 2020.

Market Review - Summary

In previous years, investor focus was very much on the manner and nature of the economic social and political policies undertaken by the United States administration and their impact upon world political and economic events. Behind all the rhetoric could be discerned generally positive global economic data with employment up, productivity increasing, moderate prevailing inflation enabling many economies to expand. This positive outlook in early 2020 was reinforced by expectations of a truce in the US China trade war as well as recovery in government spending and dovish central bankers.

All this positivity however rapidly deteriorated during the first quarter of 2020 as an outbreak of a new virus called COVID19, quickly developed into a deadly pandemic resulting in between a third and a half of the world’s population being in some form of ‘lockdown’. This became the most overriding destabilising influence across all stock markets for the rest of the year.

Market Review - Perspectives

Initial market concerns focussed on whether it was possible to achieve sustainable supplies to developed markets, particularly from China – hitherto the main driver of economic growth. But as all economies at the end of March became increasingly battered from the impact of the pandemic, governments struggled to contain the consequences and so market volatility soared to levels not seen since the financial crisis.

Other factors, including the inability of Saudi Arabia and Russia to agree on an appropriate response to cut oil production saw oil prices tumble; this together with other negative factors resulted in all stock markets crashing in spectacular fashion with investor pessimism spread across those sectors of the economies particularly most affected by lockdowns and disrupted commercial air and sea traffic.

Governments announced an array of measures and support packages, while Central Banks assisted by slashing interest rates and stepping into markets to buy both corporate and government debt. Meanwhile many corporates entered survival mode by cancelling dividends, share buybacks and capital expenditure.

Page 7

The Society for Nautical Research Trustees' Report (Continued) For the year ended 31 December 2020

It was not until the end of the second quarter before there was sufficient economic data points to show how dire the situation had become. The UK economy lost a fifth of its GDP with the US economy falling an eyewatering 32%, making this the largest economic contraction ever recorded. Economists from a range of institutions forecast 2020 Global GDP to contract 6%, which if proved accurate would represent the largest fall in economic activity since the 1930s Great Depression.

In the event the third quarter saw one of the swiftest economic rebounds in history growing 6.6% in July alone albeit from a very low base while significant risks to the recovery nevertheless remained. The fourth quarter felt unremarkable until the combination of the outcome of the American elections combined with the announcement of several successful vaccines helped to propel markets to achieve higher positive territory.

Two themes can be ascertained from the behaviour of the stock markets during this year. The record declines in GDP, retail sales, business sentiment and employment were very quickly assimilated into investor analysis during March. Thereafter their focus was on monetary and fiscal policies designed to limit the damage caused by lockdowns. But what also become apparent was that equity markets became inversely correlated to the level of the outbreak – with investors responding positively to declining numbers of coronavirus cases, the gradual easing of lockdown measures and optimism over Covid-19 vaccine developments and vice versa.

Investment Objectives

a) Restricted funds

The investment objective of The Save the Victory Fund is to seek a balanced return from a combination of income and capital growth using a portfolio consisting of UK equities/funds, overseas equities/funds, fixed interest securities and cash. A ‘medium’ risk approach is adopted for the portfolio, with a strategic asset allocation split between equities and fixed interest/cash set at 70:30. The income generated from the portfolio during 2020 was £79,624.

The investment objective of the Macpherson Fund is to seek a balanced return from a combination of income and capital growth using a portfolio consisting of UK equities/funds, overseas equities/funds, fixed interest securities and cash. A ‘medium’ risk approach is adopted for the portfolio, with a strategic asset allocation split between equities and fixed interest/cash set at 70:30. The income generated from the portfolio during 2020 was £13,882.

B) Unrestricted Funds

The investment objectives for the SNR Fund, the Anderson Bequest Fund and the Tomlin Bequest Fund are to seek a balanced return from a combination of income and capital growth using a portfolio consisting of UK equities/funds, overseas funds, fixed interest securities and cash. A ‘medium’ risk approach is adopted for the portfolios, with a strategic asset allocation split between equities and fixed interest/cash set at 70:30. Respectively, the actual income delivered during 2020 was £6,785, £6,962 and £1,748 respectively.

In respect to the Farrar Fund, the benchmark is the Adam Income & Capital Preservation benchmark, which consists of 45% FTSE All Stocks Gilt Index, 40% FTSE All Share Index, 10% FTSE All World excluding UK Index and 5% cash. The income produced from the Farrar Fund in 2020 was £4,021.

Page 8

The Society for Nautical Research Trustees' Report (Continued) For the year ended 31 December 2020

Resources

The reserves are split between unrestricted and restricted funds that relate to the individual funds and unrestricted general funds available to the charity for day-to-day use. The Society’s assets are sufficient to meet its obligations.

Grant Making Policy

Grants will be made within the established objectives of the Society to promote research into nautical antiquities, into matters relating to seafaring and ship building in all ages and among all nations, into the language and customs of the sea and into other subjects of nautical interest, to publish the useful results of such a research and otherwise advance education in such subjects.

The Society holds various Trust Funds and bequests, whose monies are kept, managed and accounted for separately from its own financial affairs, with purposes dedicated to fulfil particular objectives.

• Anderson Bequest Fund

This fund was established by a bequest from the estate of Dr R C Anderson, and its income is available for grant in aid of research on maritime historical affairs in the widest possible sense. The funding of the Anderson Medals is also allocated from this fund for publications of particular merit on maritime history.

• The Tomlin Fund

The Tomlin Fund was created by a legacy from Lt Cmdr R J Tomlin. The income from this fund is used to support research in accordance with the Society's objectives and education in maritime historical affairs.

• Macpherson Trust

This fund is the residue of funds raised by subscription to purchase the Macpherson Collection of Prints for the National Maritime Museum. The income is devoted to grants for the purchase of prints and pictures for the National Maritime Museum.

• The Save the Victory Fund

This fund is the residue of a sum raised by public subscription for the restoration of HMS Victory, and is still open to supplement by donation and a reserved share of profits of the Royal Naval Museum Trading Company. The income is reserved for grants devoted to the restoration of the ship to her 1805 state and to her presentation to the Public as such.

• The Farrar Fund

This fund was created by a legacy from the estate of Austin Farrar and its income and capital is available for projects designed to promote the awareness as well as the objectives of the Society.

Page 9

The Society for Nautical Research Trustees' Report (Continued) For the year ended 31 December 2020

Statement of Council Members' Responsibilities

The trustees (who are also the directors of the Society for Nautical Research for the purposes of company law) are responsible for preparing the Trustees' Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice.)

Company law required trustees to prepare financial statements for each financial year which give a true and fair view of the state of the affairs 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 financial statements, the trustees are required to:

The trustees are responsible for keeping proper 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.

Public benefit

We have referred to the guidance in the Charity Commission’s general guidance on Public Benefit when reviewing our aims and objectives and in planning our future activities. In particular, the Trustees consider how planned activities will contribute to the aims and objectives they have set.

Auditors

Moore Kingston Smith LLP have indicated their willingness to continue in office and in accordance with the provisions of t Companies Act it is proposed that they be re-appointed auditors for the ensuing year

Small company rules

These accounts have been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies.

By Order of the Council

Dr J.D Davies

Chairman of the Society

Date: 9 April 2021

Devonshire House London

Page 10

Independent Auditor's Report to the Trustees of The Society For Nautical Reseach

Opinion

We have audited the financial statements of The Society For Nautical Research (‘the company’) for the year ended 31 December 2020 which comprise the Statement of Financial Activities, the Balance Sheet and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 ‘The Financial Reporting Standard Applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs(UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the audit of the financial statements section of our report. We are independent of the charitable company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going 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 financial statements is appropriate

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the charitable company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the trustees with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Page: 11

Independent Auditors' Report to the Trustees of The Society For Nautical Reseach

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the trustees’ annual report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of trustees

As explained more fully in the trustees’ responsibilities statement set out on page 10, the trustees (who are also the directors of the charitable company for the purposes of company law) are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the trustees are responsible for assessing the charitable company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustees either intend to liquidate the charitable company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the charitable company.

Page: 12

Independent Auditors' Report to the Trustees of The Society For Nautical Reseach

Our approach was as follows:

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Use of our report

This report is made solely to the charitable company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to any party other than the charitable company and charitable company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Neil Finlayson, Senior Statutory Auditor

for and on behalf of Moore Kingston Smith LLP Statutory Auditor

Devonshire House 60 Goswell Road London EC1M 7AD

Date: 9 April 2021

Page: 13

The Society for Nautical Research Statement of Financial Activities

(Incorporating an Income and Expenditure Account) For the year ended 31 December 2020

Notes
INCOME FROM:
Donations and legacies
2
Investments
Investment income and interest received
3
Subscriptions
4
Publications, royalties and copyright sales
Other
Total Income
EXPENDITURE ON:
Investment management costs
Grants and donations payable
5
Publications
6
Advancing interest in nautical research
8
Total Expenditure
Net gains/(losses) on investments
11
Transfers
14
Fund Balances Brought Forward
Fund Balances Carried Forward
14, 15
Net Income/(Expenditure) for the year/Net
movement in funds
Net Income/(Expenditure) before
transfers
9		 Unrestricted
Funds
£
77
19,516
58,498
25,527
84,025
1,141
104,759
5,421
8,702
60,567
17,923
87,192
92,613
(33,404)
-
(21,258)
920,479
899,221
(21,258)		 Restricted
Funds
£
-
93,506
-
-
-
-
93,506
22,775
3,890
-
-
3,890
26,665
(42,980)
-
23,861
4,324,867
4,348,728
23,861		 Total
2020
£
77
113,022
58,498
25,527
84,025
1,141
198,265
28,196
12,592
60,567
17,923
91,082
119,278
(76,384)
-
2,603
5,245,346
5,247,949
2,603		 Total
2019
£
26,434
131,216
51,433
26,102
77,535
1,000
236,185
27,550
431,339
55,554
20,286
507,179
534,729
597,440
-
298,896
4,946,449
298,896
5,245,345

All amounts relate to continuing activities.

The notes on pages 16 to 23 form part of these financial statements.

Page 14

The Society for Nautical Research Balance Sheet

As at 31 December 2020

Notes
Fixed Assets
Tangible fixed assets
10
Investments
11
Current Assets
Debtors
12
Cash at bank and in hand
Creditors: Amounts falling due
within one year
13
Net Current Assets
Net Assets
Unrestricted Funds
14, 15
Restricted Funds
14, 15		 2020
£
5,057
477,699
482,756
(139,522)		 2020
2019
£
£
1
4,904,714
4,904,715
5,716
697,454
703,170
(436,349)
343,234
5,247,949
899,221
4,348,728
5,247,949		 2019
£
1
4,978,523
4,978,524
266,821
5,245,345
920,479
4,324,866
5,245,345

The notes on pages 16 to 23 form part of these financial statements.

These accounts have been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006, relating to small companies.

Approved by the Council Members, and authorised for issue, on 9 April 2021 and signed on their behalf by:

----- Start of picture text -----
……………………………….. ………………………………..
Dr J D Davies - Chairman Peter Nash - Hon Treasurer
----- End of picture text -----

Companies House Number: 2848095

Page 15

The Society for Nautical Research Notes to the Financial Statements For the year ended 31 December 2020

1 Accounting policies

Basis of Preparation

The financial statements have been prepared in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102). The company is a public benefit entity for the purposes of FRS 102 and a registered charity established as a company limited by guarantee in the United Kingdom and therefore has also prepared its financial statements in accordance with the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (The FRS 102 Charities SORP), the Companies Act 2006 and Charities Act 2011.

The charity has taken advantage of the provisions of Schedule 4 of the Companies Act and adapted the Companies Act formats to reflect the special nature of the charity's activities. Figures are rounded to the nearest pound.

Going concern

The trustees have assessed whether the use of going concern and have considered possible events or conditions that might cast significant doubt on the ability of the charitable company to continue as a going concern. The trustees have made this assessment for a period of at least one year from the date of the approval of these financial statements. In particular, the trustees have considered the charitable company’s forecasts and projections and have taken account of pressures on fee income. After making enquiries, the trustees have concluded that there a reasonable expectation that the charitable company has adequate resources to continue in operational existence for the foreseeable future. The charitable company therefore continues to adopt the going concern basis in preparing its financial statements.

A summary of the principal accounting policies adopted, judgements and key sources of estimation uncertainty, is set out below.

All income is recognised when there is entitlement to the funds, the receipt is probable and the amount can be measured reliably.

b) Subscription Income

Subscriptions received in advance of next year are carried forward in the balance sheet and will be included in the Statement of Financial Activities for the following year.

c) Other Income

Other income, including publication sales, advertising, royalty income and conference income, is included in the accounts when receivable.

d) Donations

Donations are recognised as they are received except in the case where they relate to a specific future project, in which case they are deferred until the commencement of that project.

e) Legacies

Legacies include all unsolicited legacies. Legacies are taken into account when capable of financial measurement and receipt is virtually certain.

Page 16

The Society for Nautical Research Notes to the Financial Statements For the year ended 31 December 2020

1 Accounting policies

f) Investments and Gains and Losses on Investment Assets

Investments are stated in the financial statements at market value in accordance with the Statement of Recommended Practice issued by the Charity Commission. Gains or losses on investments are disclosed in the statement of financial activities showing separately realised gains from investment sales in the year (sale proceeds less market value last year) and unrealised gains arising from the increase in value during the year of investments still held. Investment income including the associated income tax recoverable is credited to income on a receivable basis.

g) Cash Flow Statement

The trustees have taken advantage of the exemptions available in Financial Reporting Standard No.1 and have chosen not to prepare a cash flow statement.

h) Resources Expended

Expenditure is included in the Statement of Financial Activities on a accruals basis, inclusive of any VAT which cannot be recovered. Expenditure is recognised once there is a legal or constructive obligation to transfer economic benefit to a third party, it is probable that a transfer of economic benefits will be required in settlement and the amount of the obligation can be measured reliably.

Wherever possible costs are directly attributed to headings that aggregate all costs related to the category. Costs common to more than one area are apportioned on the basis of time spent on each area or on a direct cost basis. The irrecoverable element of VAT is included with the expense item to which it relates.

Costs of generating funds are those costs of seeking potential funders and applying for funding.

Grants payable are accounted for on an accruals basis.

Support costs are those costs incurred in support of the charitable objectives. These have been allocated to the charitable activities on a basis that fairly reflects the true use of those resource within the organisation.

Governance costs are those incurred in the governance of the charity and are primarily associated with the constitutional and statutory requirements. The irrecoverable element of VAT is included with the expense item to which it relates.

i) Critical accounting estimates and areas of judgement

In preparing financial statements it is necessary to make certain judgements, estimates and assumptions that affect the amounts recognised in the financial statements. In the view of the trustees in applying the accounting policies adopted, no judgements were required that have a significant effect on the amounts recognised in the financial statements nor do any estimates or assumptions made carry a significant risk of material adjustment in the next financial year.

j) Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments. Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to reduce the asset and settle the liability simultaneously.

With the exception of deferred income, all other debtor and creditor balances are considered to be basic financial instruments under FRS 102. See notes 12 and 13 for details.

Page 17

The Society for Nautical Research Notes to the Financial Statements (Continued) For the year ended 31 December 2020

Accounting policies (continued)

k) Cash and cash equivalents

Cash and cash equivalents include cash in hand and current and fixed term deposits with banks that are accessible within 3 months.

l) Functional currency

The functional and presentation currency of the company is the pound sterling.

m) Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost net of depreciation and any impairment losses. Depreciation is provided on tangible fixed assets to write off their cost over estimates of their useful lives at the following rates:

Computers - 33 1/3% straight line

n) Fund Accounting

Unrestricted : these are funds which can be used in accordance with the charitable objects at the discretion of the trustees.

Designated : these are funds set aside by the trustees out of unrestricted general funds for specific future purposes or projects.

Restricted : these are funds that can only be used for particular restricted purposes within the objects of the charity. Capital funds with restrictions attached are included in this category. These funds consist of an original endowment and accumulated unspent restricted income.

o) Taxation

The company, as a charity, is exempt from taxation.

2
Voluntary Income
Unrestricted funds
Donations and legacies
3
Investment income and interest received
Unrestricted funds
Restricted funds		 2020
£
77
2020
£
19,516
93,506
113,022		 2019
£
26,434
2019
£
21,607
109,609
131,216

4 Subscriptions

Of the subscription income, £19,579 was received from overseas. This equates to 33.5% of total subscription income (2019: 32%)

Subscription income includes the associated recoverable gift aid.

5
Grants Payable
Unrestricted funds:
Tomlin Conferences
Tomlin Awards and Research Grant
Anderson Bequest - Other
Anderson Awards
National Maritime Museum
Support costs (Note 8)
Restricted funds:
National Museum of the Royal Navy
Support costs (Note 8)
Victory Medal		 2020
£
-
380
-
2,926
-
5,396
-
2,939
951
12,592		 2019
£
750
1,920
-
1,922
17,000
6,812
400,000
2,935
431,339

Page 18

The Society for Nautical Research Notes to the Financial Statements (Continued) For the year ended 31 December 2020

6 Publication Costs
Unrestricted funds
General cost of publications
Support costs (Note 8)
7 Governance Costs
Unrestricted funds
Support costs (Note 8)
Audit and accountancy
Other management costs
Restricted funds
Audit and accountancy
Other management costs
8 Allocation of Other Membership and Support Costs
Grants
Year to 31 December 2020
Payable
£
Membership secretary fees
-
Travel, postage and general expenses
1,091
Lecture and conferences
-
Professional
-
Publicity and Website
-
1,091
Direct governance costs
-
1,091
Allocation of governance support costs
7,244
8,335		 Publications
£
-
1,091
-
-
7,892
8,983
-
8,983
7,244
16,227		 2020
2019
£
£
44,340
37,991
16,227
17,563
60,567
55,554
2020
2019
£
£
10,073
11,804
8,069
8,169
650
350
18,792
20,323
2,085
2,085
854
850
21,731
23,258
Advancing
Interest in
Governance
Nautical Research
Costs
£
£
10,380
-
-
2,181
300
-
-
-
7,892
10,680
10,073
-
11,658
10,680
21,731
7,243
(21,731)
17,923
-

Page 19

The Society for Nautical Research Notes to the Financial Statements (Continued) For the year ended 31 December 2020

8 Allocation of Other Membership and Support Costs Continued

Year to 31 December 2019
Membership secretary fees
Travel, postage and general expenses
Lecture and conferences
Professional
Publicity and Website
Direct governance costs
Allocation of governance support costs		 Grants
Payable
£
-
1,994
-
-
-
1,994
-
1,994
7,753
9,747		 Publications
£
-
1,994
-
-
7,816
9,810
-
9,810
7,753
17,563		 Advancing
Interest in
Governance
Nautical Research
Costs
£
£
10,380
-
-
3,988
2,045
-
109
-
7,816
12,534
11,804
-
11,454
12,534
23,258
7,752
(23,258)
20,286
-

No staff were employed by the charity during 2020 (2019: None).

9 Net Incoming Resources
Are stated after charging:
Auditor's remuneration
Trustee expenses reimbursed		 2020
2019
£
£
6,770
6,670
34
1,739

Trustee expenses related predominantly to travel costs. No trustee received remuneration in 2020 (2019: £Nil).

10 Tangible Fixed Assets
Cost
As at 1 January 2020 and 31 December 2020
Depreciation
As at 1 January 2020 and 31 December 2020
Net Book Value
As at 1 January 2020 and 31 December 2020		 Plant &
Machinery
£
1,485
1,484
1

Page 20

The Society for Nautical Research Notes to the Financial Statements (Continued) For the year ended 31 December 2020

11 Investments

Investments are listed on a recognised stock exchange or are held in units of common investment funds where their values are calculated by reference to investments quoted on a recognised stock exchange.

Unrestricted Funds
General Fund
Designated Funds:
Anderson Bequest Fund
Tomlin Bequest Fund
Farrar Fund
Restricted Funds
Balance at beginning of year
Additions
Disposals at book value
Net gains/(losses) on investments
Add: Cash balances included in investments
Balance at end of year
UK equities
UK Fixed Interest
UK index linked
Overseas equities
Overseas Fixed Interest
Cash		 Market
Cost
Value
£
£
182,612
260,008
201,585
265,427
49,910
64,658
136,893
152,073
571,000
742,166
2,906,263
4,162,548
3,477,263
4,904,714
Unrestricted
Restricted
Funds
Funds
£
£
761,529
4,061,110
73,109
129,807
(65,935)
(51,508)
(33,404)
(42,980)
6,866
66,119
742,165
4,162,548
2020		 Cost
£
180,146
189,833
50,506
132,025
552,510
2,807,273
3,359,783
Unrestricted
Funds
£
671,511
68,096
(76,932)
98,853
11,124
772,652
Market
Value
2020
£
1,897,211
1,289,191
99,003
222,480
1,323,845
72,984
4,904,714
2019		 Market
Value
£
268,404
279,051
66,396
158,801
772,652
4,205,871
4,978,523
Restricted
Funds
£
3,593,812
519,302
(550,595)
498,587
144,765
4,205,871
Market
Value
2019
£
2,175,202
1,225,341
107,462
217,764
1,096,865
155,889
4,978,523

Page 21

The Society for Nautical Research Notes to the Financial Statements (Continued) For the year ended 31 December 2020

12
Debtors
Taxation and social security debtor
Royalty debtor
Other debtors		 2020
£
57
5,000
-		 2019
£
716
5,000
-
5,057 5,716

13 Creditors: Amounts falling due within one year

Creditors: Amounts falling due within one year
Accruals and deferred income
Grant creditor		 2020
£
39,522
100,000		 2019
£
36,349
400,000
139,522 436,349

Of the above, £7,868 relates to deferred income, all of which was deferred in the current year (2019: £7,092). Deferred income relates to subscription income received in advance.

14
Funds
Unrestricted Funds
General Fund
Designated Funds:
Anderson Bequest
Tomlin Bequest
Farrar Fund
Restricted Funds
Save the Victory
Macpherson Collection		 Balance at
1 Jan
2020
£
405,444
290,145
66,393
158,500		 Incoming
Resources
£
92,028
6,962
1,748
4,021
104,759
79,624
13,882
198,265		 Outgoing
Resources
£
(79,142)
(5,519)
(856)
(7,096)
(92,613)
(22,272)
(4,393)
(119,278)		 Transfers
-
-
-
-
-
-
-
-		 Investment
(Losses)
£
(8,397)
(13,615)
(1,739)
(9,653)		 Balance at
31 Dec
2020
£
409,933
277,973
65,546
145,772
920,479
3,618,865
706,002		 (33,404)
(40,044)
(2,936)		 899,221
3,636,173
712,555
5,245,345 (76,384) 5,247,949

Designated Funds

The designated funds will be spent in line with the investment income that becomes available and will be spent in accordance with the designations as per the below:

This fund is used to fund grants for research work on maritime history in general. The transactions of the fund are separately recorded and were created from unrestricted legacies received.

This fund is designated by the Council to augment financial support for conferences and other Society activities.

This fund was created by a legacy from the estate of Austin Farrar and its income and capital is available for projects designed to promote awareness as well as the objectives of the society.

Restricted Funds

The restricted funds comprise two endowment funds which are the Save the Victory Fund and the Macpherson Collection Endowment Fund. The Save the Victory Fund engages in activities that preserve and restore HMS Victory. The Macpherson Collection Endowment Fund purchases works of art for the National Maritime Museum.

Page 22

The Society for Nautical Research Notes to the Financial Statements (Continued) For the year ended 31 December 2020

14 Funds continued Transfers

Transfers in the year represent movements necessary to align fund opening balances to assets held by each fund.

15
Analysis of Net Assets between Funds
Unrestricted funds
Restricted funds:
Save the Victory Fund
Macpherson Collection Endowment Fund		 Fixed Assets
and
Investments
£
751,339
3,513,617
639,759
4,904,715		 Net
Current
Assets
£
147,882
122,556
72,796
343,234		 2020
Total
£
899,221
3,636,173
712,555
5,247,949		 2019
Total
£
920,479
3,618,864
706,002
5,245,345

16 Councils' Liability

In the event of the company being wound up, the liability of each member is limited to £1. At 31 December 2020 there were 15 members.

17 Related party transactions

During the year, Helen Garvey, the membership secretary received fees of £10,380 (2019 - £10,380).

During the year, The British Commission for Maritime History, of which share J Davey and C Pearce as trustees, received fees of £0 (2019 -£1,250)

The key management personnel of the society are the Officers and the Council members. They were not remunerated in the year (2019: £nil).

Page 23