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2021-01-31-accounts

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

Registered Office: Sheringham Station, Sheringham, Norfolk, NR26 8RA A Company Limited by Guarantee Registered No. 3355411 Registered Charity No. 1063676/0

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

Reference and Administrative Details Company Information

Board of Trustees (Directors)

N Sharpe (Chairman) K R Ashford A M Barrs A E Dewey D C Greeno P W Mayne N A Scarlett R H Spicker G Wigglesworth

Company Secretary

A E Dewey

Registered Office

Sheringham Station Sheringham Norfolk, NR26 8RA

Registered Company Number 03355411

Registered Charity Number 1063676/0

Working Names

M&GN Joint Railway Society M&GN Society M&GNJRS

Independent Examiner/Auditor

Mr M Hewett ACA DChA Peters, Elworthy & Moore Salisbury House Station Road Cambridge, CB1 2LA

Bankers

Lloyds Bank plc Barclays Bank plc 1 West Street, Cromer P O Box 1, Banbury Norfolk, NR27 9HZ Oxon, OX16 8PS Paypal CCLA Investment Management Limited Ballycoolin Industrial Estate Senator House Dublin 15, Ireland 85 Queen Victoria Street London, EC4V 4ET

Investment Managers

Cazenove Capital Insight Financial Advisors 1 London Wall Place 7a Alkmaar Way London, EC2Y 5AU Norwich International Business Park Norwich, Norfolk, NR6 6BF

1

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

REPORT OF THE BOARD OF TRUSTEES

The Trustees (who are also directors of the charity for the purposes of the Companies Act) present their annual report together with the independently examined financial statements of Midland & Great Northern Joint Railway Society (the Charity/Society) for the year ended 31 January 2021. The Trustees confirm that the Annual Report and financial statements of the Charity comply with the current statutory requirements, the requirements of the Charity’s governing document and the provisions of the Statement of Recommended Practice (SORP), applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (second edition - October 2019).

Since the Charity qualifies as small under section 383, the strategic report required of medium and large companies under The Companies Act 2006 (Strategic Report and Director's Report) Regulations 2013 is not required.

Objectives and Activities

Objectives

The Society’s principal objective is to advance public education by the acquisition, restoration, preservation and exhibition of locomotives, rolling stock and other railway artefacts and, in particular, those of the former Midland & Great Northern Joint Railway (M&GNJR) and its antecedent and successor companies. Its vision for the foreseeable future is to focus on the geographical area of the M&GNJR and other aspects of East Anglian railway history by means of this mission statement (reaffirmed in 2018, 2019 and 2020 in 2018-2023 Strategic Plan):

a) Ownership, restoration and operational display of locomotives appropriate to the Society; b) Ownership, restoration and operational display (where practicable) of historic carriages and wagons; c) Assisting other organisations to restore and display locomotives, rolling stock and other railway structures and artefacts, through the provision of financial support, technical advice or such other appropriate support; d) Ownership and display of museum collections that inform and educate;

e) Assisting other organisations with an interest in educating about railway history, through the provision of advice, access to and loan of artefacts in the Society’s possession and other appropriate support;

f) The North Norfolk Railway (NNR) to be the Society’s preferred (but not necessarily exclusive) partner for pursuing the aims in a) to e) above; and

g) Maximise the Society’s revenue earning capability in order to support the above aims.

Main Activities

The Society’s main activities undertaken in relation to the above purposes are as follows:

Main Activities to Further the Society’s Purposes for the Public Benefit

The Society is based at the NNR, whose aims are to operate a heritage railway for the benefit of the public, currently 5¼ miles from Sheringham via Weybourne to Holt. Train services normally operate on around 280 days of the year for public enjoyment. This enables members of the public to view the Society’s preserved steam and diesel locomotives in operation hauling carriages owned by the NNR but occasionally, particularly at special events, visitors may also travel in the Society’s preserved operational vintage carriages. The NNR’s engineering facilities where Society locomotives and rolling stock are restored and maintained are not generally open to the public for safety reasons but viewing can be arranged, and guided tours are offered at some special events.

2

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

REPORT OF THE BOARD OF TRUSTEES – Continued

Objectives and Activities (continued)

Main Activities to Further the Society’s Purposes for the Public Benefit (continued)

The William Marriott Museum , named after the M&GNJR’s chief engineer, located at Holt houses the Society’s extensive collection of railway objects, artefacts and records. It is open to the public every day when the railway is running and offers free entry to visitors arriving by train.

These activities help to educate and entertain the general public as part of the development and history of railways. They are complemented by the educational reading material in the museum and the publications about railways which are available to purchase from the Society’s Weybourne shop, the museum and online.

Public Benefit

The Society aspires to be a professional charitable organisation, adding historical value to the knowledge of the general public about the “M&GNJR” and East Anglian railways in general, in a manner which is both educational and fun for its members and the general public.

In the exercise of its powers in relation to its objectives and missions, the Board of Trustees has paid due regard to the published guidance from the Charity Commission on the operation of the Public Benefit requirements under the Charities Act 2011.

Volunteers

The Society relies entirely on volunteers to achieve its aims and objectives and has no paid staff. Volunteers are involved with restoration and maintenance projects, running the Society’s Museum, sales and fund-raising, marketing, finance, governance and administration. Volunteers of the Society are normally members who pay an annual subscription, often supplemented by regular or one-off donations to their choice of fund and many are also volunteers for the NNR.

Achievements and Performance

Summary of the Main Achievements

The year had barely begun when the global health crisis caused by COVID-19 emerged and had a significant impact on all businesses. The NNR closed completely on 23 March 2020, reopening with limited non-stop services between Sheringham and Holt from 8 July 2020 through to the end of October 2020. All special events were cancelled and the Norfolk Lights Express and Santa Specials only managed a much-reduced programme.

The closure impacted heavily on the Society’s major income stream of locomotive steaming fees. There were initially cost savings as maintenance, overhaul and restoration stopped. However, expenditure then increased significantly as part of the support package devised to provide the NNR with income.

Fundraising was hindered as both William Marriott Museum and Weybourne Shop remained closed throughout the year. The online shop initially closed but was then able to resume around mid-May 2020.

Support from members was excellent throughout. Unfortunately, it was not possible to distribute the Summer Joint Line but a bumper combined Summer/Autumn volume helped to make up for that.

The values of listed investments placed with legacy money fell significantly at the end of February 2020 in line with global stock markets but recovered impressively to show gains by the year end.

3

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

REPORT OF THE BOARD OF TRUSTEES – Continued

Achievements and Performance (continued)

Summary of the Main Achievements (continued)

The Society Board acted immediately upon notice of lock down and the closure of the railway, realising that the safety of the Society’s collection and survival of the NNR were paramount. Within days some excellent strategic thinking led to devising a support package to provide cash for the railway which was losing its trading income. This has been well documented but the key elements of it were:

This package provided the NNR with much needed cash in the order of £200k.

Restoration – Restoration of the interior of Thompson BSF 1866 continued throughout most of the year but at a slower pace than anticipated due to limits on volunteers permitted to work.

Operation – Due to the reduced number of trains in 2020, the Society’s fleet achieved fewer steamings (111) than in 2019 (194). B12 achieved 58 (2019 66), Y14 34 (2019 45) and WD 19 (2019 83).

Maintenance and overhauls (steam) – Wissington’s ‘bottom-end’ overhaul continued at slow pace pending removal of the boiler for assessment and preliminary works just before the year end. The B12, WD and Y14 all had various maintenance works undertaken, the WD receiving a newly cast blast pipe. Some preliminary assessment work for overhaul was undertaken on Ring Haw.

Class 31 D5631 remained in works throughout the year for works to completion. These were nearly achieved by year end such that loaded test running has subsequently taken place.

Overhaul works started on the Grove-Allen crane, concentrating initially on the outriggers and rams. New hydraulic hoses will need to be fitted and re-painting has progressed when resources allowed.

Legacies - Three legacies totalling £76,130 were received for the year. None came with directions for spending.

4

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

REPORT OF THE BOARD OF TRUSTEES – Continued

Financial Review

The results for the year are set out in the attached financial statements from page 11 onwards. Total incoming resources amounted to £276,515 (2020 £1,319,546) which, after total expenditure of £265,368 (2020 £233,590) and unrealised investment gains of £31,626 (2020 £11,529), resulted in net income before transfers of £42,773 (2020 £1,097,485). At the end of the period, the Society had net assets of £2,931,174 (2020 £2,888,401).

General Fund is the sole purely unrestricted fund. The income amounted to £153,996 with expenditure of £83,943 and net transfers to/from other funds of £100,250 (see note 19). Members’ subscriptions raised £56,810 (including Gift Aid) to meet the Society running costs of £62,981, including Joint Line, asset insurance, premises, equipment, storage, administration and governance. Weybourne shop contributed £1,648 gross margin from sales of purchased goods. Donations (including Gift Aid), bequests, museum entry fees, interest received, and sundry income produced £89,144.

Designated funds have purposes determined by the Board, but these could be changed if considered appropriate. Because of this, they are classified as unrestricted in the Statement of Financial Activities and on the Balance Sheet. Details of these funds, their income and expenditure, balances and purposes are shown in note 20.

Restricted funds are for specific purposes enabling donors, who provide the majority of the income, to direct their donations to the funds in the knowledge they will only be spent on the specified purpose. Details of these funds are shown in note 21. The majority of funds are for locomotives and carriages and wagons restoration and maintenance but also a museum operating fund (which receives visitors’ donations), a fund for developing Holt Goods Yard (also receives donations), a fund for the Heritage Lottery funded carriage sheds (the expense being the depreciation of the sheds’ costs) and a fund for small grants (which receives donations).

Endowment Fund holds no cash and represents the acquisition values of NNR shares and heritage assets.

All funds maintained positive balances at 31 January 2021 (2020 all positive).

Reserves Policy and Going Concern

The Board of Trustees is aware of the need to maintain as a minimum sufficient unrestricted free reserves to meet ongoing direct and administrative expenditure for a period of at least 12 months. At 31 January 2021 the balance on General Fund is £291,051 of which approximately £197,000 is represented by free reserves. This is more than adequate for the Society’s average annual running costs referred to above and so the Board considers its minimum free reserves policy is being achieved and the Society is a going concern.

However, the Board is also aware of the need to generate additional unrestricted free reserves to help meet the costs of specific restoration and ongoing maintenance projects when there are insufficient specific funds. General Fund has provided funds towards steam loco overhaul costs in previous years and the Class 31’s £48,081 costs to date of its steam heating facilities. In 2020-21 it funded the acquisition of the Class 101 DMU and mobile crane and maintenance of the crane, Class O8 shunter and Austin lorry at £118,169.

Investment Policy

Cash which may be required at short notice is held in current and deposit accounts with the Society’s banks except for that not required in the immediate short term which is deposited with CCLA Investment Management Ltd in its COIF Charity Funds. The Board considers this to be the most suitable place to safeguard such funds. However, with the receipt of the large legacy in 2019-20, the trustees reviewed the policy for market investments and sought appropriate investment advice. The new policy was adopted by the Board in their meeting on 21 September 2019.

5

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

REPORT OF THE BOARD OF TRUSTEES – Continued

Financial Review (continued)

Investment Policy (continued)

In formulating the policy, the Board had regard to the guidance given by the Charity Commission. A summary of the policy is as follows:

Other investment is in NNR shares and bonds which are explained elsewhere in this report.

Future Developments

The Society has a 5-year Strategic Plan which is reviewed and updated annually by the Board of Trustees. It is due to be reviewed in November 2021, which will again consider the effects of COVID-19 and the recovery therefrom on the Society’s operations and activities at the time and to the end of the plan in 2023.

Post Balance Sheet Events

At the end of the financial year, it was just over a month into the COVID-19 third Lockdown which had closed the railway prematurely just before Christmas with the loss of the extended Norfolk Lights Express services in the first half of January 2021. However, the railway would normally be closed then until February half term, followed by March weekends and then daily services from April (Easter this year). The Society would normally expect to earn steaming fees in those periods and Weybourne shop and the WMM would be open. The railway remained closed throughout.

However, HM Government’s ‘Roadmap’ for spring and summer provided some hope for a gradual resumption of business activity and release from movement restrictions on the population. The railway reopened with a one-train service on 12 April 2021 and the plans to move to a two-train service as from 17 May 2021 with the full reopening of Weybourne and Holt stations did happen. The Society has earned steaming fees from 12 April 2021 and was hoping to resume business in its Weybourne shop and WMM soon. Some special events are planned on the railway later in the year which should boost both NNR and Society income.

All of the above is subject to HM Government’s assessments at the various stages of its ‘Roadmap’ and of the prevalence of COVID-19. It is to be hoped that the extensive vaccination programme coupled with precautionary behaviour will allow the return to normal business activity and population movement and participation.

The above are positives for the future and do not have any impact on the reported income, expenditure, assets, liabilities and funds, which are fairly described and stated as at 31 January 2021. The Board consider the accounts for this reporting period do show a true and fair view.

6

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

REPORT OF THE BOARD OF TRUSTEES – Continued

Structure, Governance and Management

Governing Document and Constitution

Midland and Great Northern Joint Railway Society (‘the Society’) is a charitable company limited by guarantee, incorporated on 17 April 1997 and registered as a charity on 30 July 1997. The company was incorporated under a Memorandum of Association which established the objects and powers of the charitable company and is governed under its Articles of Association. Each principal member of the Society is, therefore, a member of the company and has a right to attend and vote at company general meetings. In the event of the company being wound up each member undertakes to contribute an amount not exceeding £1

Recruitment and Appointment to Board of Trustees

Under the company’s Memorandum and Articles, the directors are known as members of the Council of Management or Governing Body. The 2012 Strategy Plan introduced the designation Board of Trustees. The articles require all Board members to be members of the company. The Board has power to appoint any person to be a member of the Board and any member (of the Board) so appointed may hold office until the following Annual General Meeting and shall then be eligible for re-election. Members of the Board aged 70 or over are subject to annual re-election. Apart from these and those retiring by choice, one-third of the Board is subject to re-election on an annual basis.

The Board of Trustees is always mindful of the need to maintain skills, knowledge and commitment on the Board and is alert to potential new candidates. When suitable candidates become available, their attributes are considered and where appointment is appropriate and desirable, a vote is taken by the Board. Most candidates are generally already known and have usually held a volunteer role before being elected

Organisational Structure and Decision Making

The Board of Trustees manages the Society. Board members are elected for their knowledge and/or expertise and each has specific unpaid executive responsibilities. The Board meets at least 6 times a year. In between meetings, matters requiring the Board’s authorisation are dealt with by email and/or telephone and then ratified and minuted at its next meeting. Board members have responsibilities for projects and activities and have decision-making and spending authorities within parameters and budgets approved by the Board.

As the Society is entirely voluntarily run, it has no Chief Executive Officer, but the Chairman, Vice-Chairman, Treasurer, Society Secretary and Company Secretary are regarded as senior staff and comprise an informal Executive Board to deal with relevant matters as required.

Risk Management

The Society’s policy when carrying out a project is that there must be sufficient expectation that it will be able to meet all costs from existing funds or new donations, appeals and/or grant applications. No project is allowed to proceed without the Board of Trustees being reasonably satisfied that suitable funds can be or have been raised. The Board also requires regular written reports on progress and ongoing funding of projects.

The Society uses the operations of the NNR as a venue for public exhibition of its assets and provision of facilities for restoration and storage. The Board feels that the level of involvement and general co-operation between the two organisations has justified its investment and reduced the risk of commercial failure.

The Board is responsible for safeguarding the Society’s assets and so ensures that relevant levels of insurance cover are provided where appropriate. The trend has been and will continue to be one of increasing cost and the Society jointly insures its risks with the NNR to ensure that there are no gaps or duplication in cover across the two organisations. The cover held by the Society is reviewed annually and approved by the Board.

7

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

REPORT OF THE BOARD OF TRUSTEES – Continued

Structure, Governance and Management (continued)

Risk Management (continued)

Wherever possible, liability for the protection of Society assets is passed to users and borrowers of assets under formal running/display agreements.

The Society strongly encouraged the formal locomotive inspection documentation, schedules and examinations introduced on the NNR (mainline standard A, B and C exams) in order to help safeguard the condition of its operational locomotives.

The Board is aware of the membership’s ageing profile and seeks to involve younger members at Board level and in restoration projects to help deliver a secure membership base for the future.

The Board considers from time to time the major risks to which the Society may be exposed and where possible takes action or introduces procedures to mitigate those risks. The situation is kept under review.

Relationships with related parties

Under the terms of the Society’s Memorandum of Association, it has the power to subscribe for shares, stocks, debentures or other securities of any other company, enabling it to invest monies not immediately required for furtherance of its objects in such investments, securities or property as the Board may consider fit.

Shares have been subscribed for in the NNR, which is not a charity, as part of the strategic alliance between the two organisations. The Society, which is the major shareholder, is able to appoint up to three Board members to the NNR Board and has other members on strategic committees which helps to strengthen the partnership. This investment has been made purely for the purpose of assisting that company to enhance facilities and equipment, creating a more secure and appropriate base for the Society’s assets and a venue to enable the Society to exhibit its assets to the public. No financial return is anticipated as the NNR does not have authority under its Articles of Association to pay dividends. However, investments in NNR Bonds in February 2014, January 2017 and March 2020 for a similar purpose do earn interest.

The Society continues to support by other means, e.g. grants, specific heritage projects undertaken by the NNR which, in the opinion of the Board of Trustees, are in line with the Society’s charitable activities and objectives.

The Society and NNR are related parties and details of transactions etc. are shown in note 16 to the accounts. The current method of ‘investment’ provides the following non-monetary benefits:

Over time, the investment has aided the provision of a permanent home for the Society’s other equipment, artefacts, documents and records, enabling more of these to be publicly exhibited than had previously been possible due to the lack of adequate display facilities. Thus, the investment continues to be particularly relevant to the Society in meeting its charitable aims although without any dividend or distribution return.

The Society also owns 100% of the issued capital in Midland & Great Northern Heritage Ltd, which was set up as a wholly owned subsidiary for non-charitable trading activities. At the date of publication of the financial statements the company was not trading.

8

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

REPORT OF THE BOARD OF TRUSTEES – Continued

Fundraising Activities

Society Trustees are legally responsible for the Society’s fundraising activities and are committed to comply fully with the Charity Commission guidance CC20 on the duty of Trustees to have oversight of fundraising practices.

Society members are encouraged to donate to Society funds through articles and advertisements in Joint Line . Members of the public travelling on the NNR are invited through leaflets displayed there to become Society members or to contribute to the various funds which support our heritage assets and charitable activities. The Society website, through which our eBay shop operates, also details ways in which supporters can raise funds for the Society by using easyfundraising when they shop online with various retail sites. The Society does not cold call or make public or static collections and has not used the services of a professional fundraiser or commercial participator during the year. All funds raised are used to enable the Society to undertake activities in pursuit of its charitable objectives, and if given for a restricted purpose recorded as such and only used for that purpose.

All fundraising activity by the Society is monitored by the Trustees, who are not aware of any failure to comply with the Fundraising Code of Practice. No complaints about our fundraising were received during the year.

Responsibilities of the Board of Trustees

Company and charity law requires the Board of Trustees to prepare financial statements for each financial year. Under that law the Board has elected to prepare the financial statements in accordance with Generally Accepted Accounting Practice in the UK and Republic of Ireland and applicable law. The financial statements are required by law to give a true and fair view of the state of affairs of the charitable company as at the balance sheet date and of the incoming resources and application of resources, including income and expenditure, of the charitable company for the financial year. In preparing those financial statements, the Board is required to:

The Board of Trustees is responsible for maintaining proper accounting records which disclose with reasonable accuracy at any time the financial position of the charitable company and to enable them to ensure that the financial statements comply with the Companies Act 2006. The Board is 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. Finally, the Board is responsible for the maintenance and integrity of the corporate and financial information included on the Society’s website.

9

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

REPORT OF THE BOARD OF TRUSTEES – Continued

Members of the Board of Trustees

Members of the Board of Trustees, who are directors for the purpose of company law and trustees for the purpose of charity law, who served during the year to 31 January 2021 were:

N Sharpe Chairman P W Mayne K R Ashford M Northway (resigned 7 January 2021) A M Barrs Vice Chairman N A Scarlett A E Dewey Treasurer & Company Secretary R H Spicker Society Secretary D C Greeno G Wigglesworth

Pursuant to Article 37, A E Dewey, D C Greeno and P W Mayne, being age 70 or over at the forthcoming Annual General Meeting, are subject to annual re-election. All three Trustees offer themselves for re-election at that meeting.

Pursuant to Articles 36 and 38 one-third of the remaining directors, A M Barrs and R H Spicker, retire and being eligible offer themselves for re-election at the forthcoming Annual General Meeting.

As at 31 January 2021 N Sharpe, A M Barrs and A E Dewey represented the Society on the NNR Board.

The Society insures against risks to its assets and the various aspects of its activities by way of joint policies with the NNR. These include directors, officers and trustees’ liability, including professional indemnity, cover and the estimated indemnity premium for Society board members is £125 (2020 £115), being a proportion of the total premium £1,140 (2020 £1,036).

Independent Examiner / Auditors

Peters, Elworthy & Moore were appointed Auditors/Independent Examiner at the 2020 Annual General Meeting and the Board of Trustees has elected to dispense with an audit for these financial statements.

Exemption Statement

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 applicable to smaller companies subject to the small company regime.

N Sharpe Chairman 22 May 2021

10

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

STATEMENT OF FINANCIAL ACTIVITIES (INCLUDING INCOME AND EXPENDITURE ACCOUNT) FOR THE YEAR ENDED 31 JANUARY 2021

Note
Unrestricted
funds
Restricted
funds
Endowment
fund
£
£
£
Income and endowments from:
Donations and legacies
3
83,645
26,187
-
Other trading activities
4
-
8,030
-
Investments & interest receivable
5
2,429
21,255
-
Charitable activities:
Conservation activities
7
59,770
2,000
-
Education activities
8
2,005
-
-
Membership subscriptions
9
56,810
-
-
Primary purpose trading
10
8,107
6,277
-
_
_
_
Total income
212,766
63,749
-
Expenditure on:
Raising funds
6
318
7,547
-
Charitable activities:
Conservation activities
7
159,505
60,203
-
Education activities
8
5,149
1,351
-
Membership
9
24,679
-
-
Primary purpose trading
10
5,429
1,187
-
_
_
_
Total expenditure
195,080
70,288
-
Net income (expenditure) before
investment gains
17,686
(6,539)
-
Net gains on investments
15
-
31,626
-
Net income before transfers
12
17,686
25,087
-
Transfers between funds
22
(126,890)
(33,360)
160,250
__
__
_
Net Movement in Funds
(109,204)
(8,273)
160,250
Total Funds brought forward
916,966
1,541,055
430,380
__
__
_
Total Funds carried forward
19
807,762
1,532,782
590,630
_
__
_		 _

The Statement of Financial Activities includes all gains and losses recognised in the year. There has been a reallocation of income and expenditure to better reflect the activities of the Society, which has resulted in a restatement of the 2020 comparative figures to ensure comparability between the years, as detailed in notes 3 to 11 to the financial statements. The result for the 2020 financial year remains unchanged.

The notes on pages 14 to 30 form part of these financial statements.

11

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY Company Limited by Guarantee Registered Number 03355411

BALANCE SHEET AS AT 31 JANUARY 2021

Note
Fixed Assets
Heritage assets
14
Tangible assets
14
Investments
15
Total fixed assets
Current Assets
Stocks
Debtors
17
Cash at bank and in hand
Total current assets
Liabilities
Creditors: Amounts falling due within one year
18
Net current assets
Total assets less current liabilities/net assets
Funds of the charity
Endowment fund
22
Restricted income funds
21
Unrestricted funds
19
Total charity funds		 2021
£
532,450
398,284
1,227,602

_
2,158,336
________
70,393
92,904
619,210
________
782,507
9,669
________
772,838
________
________
2,931,174
 _ _ _
590,630
1,532,782

807,762
___
2,931,174
 _ _ __		 2020
£
418,978
406,557
1,199,637
_
2,025,172
________
58,441
14,445
797,899
________
870,785
7,556
________
863,229
________
________
2,888,401
 _ _ _
430,380
1,541,055
916,966
___
2,888,401
 _ _ __

The Trustees consider that the company is entitled to exemption from the requirement to have an audit under the provisions of section 477 of the Companies Act 2006 (“the Act”) relating to small companies, and members have not required the company to obtain an audit for the period in question in accordance with section 476 of the Act.

The Trustees acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements, which have been prepared in accordance with the provisions applicable to companies subject to the small company regime.

The notes on pages 14 to 30 form part of these financial statements which comprise the Statement of Financial Activities (incorporating Income and Expenditure Account), Balance Sheet, Statement of Cash Flows and Notes thereto.

The financial statements were approved and authorised for issue by the Board of Trustees on 22 May 2021 and signed on its behalf by:

N Sharpe – Chairman A E Dewey - Treasurer

12

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 JANUARY 2021

As Restated As Restated
Note 2021 2020
Total Total
£ £ £ £
Cash flows from operating activities
Net cash (used in)/generated by operating activities 24 (34,932) 1,186,419
Cash flows from investing activities
Dividends, interest and rent from investments 24 23,684 11,332
Purchase of property, plant and equipment 14 (171,102) (72,913)
Proceeds from the disposal of listed investments 15 140,162 18,210
Purchase of listed investments 15 (136,657) (797,167)
Purchase of unlisted investments 15 - (100,000)
__ __
Net cash used in investing activities (143,913) (940,538)
__ __
Change in cash and cash equivalents in the
reporting period (178,845) 245,881
Cash and cash equivalents at the beginning of the 25
reporting period 812,537 566,656
_ _
Cash and cash equivalents at the end of the 25
reporting period 633,692 812,537
__ __

The notes on pages 14 to 30 form part of these financial statements

13

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021

1. Accounting policies

The principal accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are as follows:

Basis of preparation

The financial statements have been prepared in accordance with Charities SORP (FRS 102) (Second Edition – October 2019) - Accounting and Reporting by Charities: 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 (FRS 102) (effective 1 January 2019). The financial statements also comply with the requirements of sections 394 and 395 of the Companies Act 2006, and with the requirements of the Act relating to the financial statements in so far as applicable to the company.

During the year, there have been no discontinued activities or new activities acquired.

The financial statements are prepared in sterling, which is the functional currency of the Society. There are no recognised gains or losses other than those included in net income. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy note(s). Other than the unrealised gains on quoted assets, historical cost surpluses and deficits are as recorded in the Statement of Financial Activities.

Going concern

The Board has explained the scenario facing the Society (and NNR) at the close of the financial year in their report under the heading ‘Post Balance Sheet Events’ on page 6. The third COVID-19 Lockdown was in force causing services to be cancelled earlier than planned, whilst noting the railway is normally closed throughout January followed by a gradual build-up to every day running from April. There was hope from HM Government’s ‘Roadmap’ for re-opening in April and indeed this did happen on the 12 April 2021 with a one-train service. The NNR was able to open more fully on 17 May 2021 with a second train and more station facilities. Special events are being planned for later in the year. COVID-19 still presents risks to business activity, but the Government’s vaccination programme and precautionary social behaviour should reduce these. The NNR and Society are hopeful of a return to more normal activity and income streams, being steaming fees, shop sales and museum admissions for the Society.

The Board has assessed by means of budgets, forecasts and other information that the Society will have adequate reserves and cash twelve months from the date these accounts are approved to maintain the Society’s assets in operational condition. Accordingly, the Board continues to adopt the going concern basis of accounting in preparing these financial statements.

Group accounts

These are the separate financial statements of the company as it is entitled to the exemption under Section 398 of the Companies Act 2006 from the obligation to prepare group accounts.

Income

All income is recognised once the Charity has entitlement to the income, it is probable that the income will be received, and the amount of income receivable can be measured reliably.

Subscriptions, donations etc., income from support clubs, shop and other sales, museum entry fees are recognised upon receipt. Locomotive steaming and rolling stock hire fees represent fees earned during the period exclusive of VAT.

Donation income is recognised when received or, before receipt if it becomes reasonably certain that the donation will be received and the value of the income can be reliably measured. Gift Aid reclaimed is included as received during the period and if claims have been lodged but not settled after the end of the period.

14

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

1. Accounting policies - continued

Income (continued)

For legacies, entitlement is taken as the earlier of the date on which either: the Charity is aware that probate has been granted, the estate has been finalised and notification has been made by the executor(s) to the Trust that a distribution will be made, or when a distribution is received from the estate. Receipt of a legacy, in whole or in part, is only considered probable when the amount can be measured reliably, and the Charity has been notified of the executor’s intention to make a distribution. Where legacies have been notified to the Charity, or the Charity is aware of the granting of probate, and the criteria for income recognition have not been met, then the legacy is treated as a contingent asset and disclosed if material.

Interest represents income received from bank and COIF deposits (with the latter allocated to funds with average balances of at least £10,000 throughout the period), the NNR bond and the steam loco legacy investments. Interest on funds held on deposit is included when receivable and the amount can be measured reliably by the Charity; this is normally upon notification of the interest paid or payable by the bank. Wholesale educational publishing sales are included at the point of invoicing.

Expenditure

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. Expenditure is classified by activity. The costs of each activity are made up of the total of direct costs and shared costs, including support costs involved in undertaking each activity. Direct costs attributable to a single activity are allocated directly to that activity. Shared costs which contribute to more than one activity and support costs which are not attributable to a single activity are apportioned between those activities on a basis consistent with the use of resources. Expenditure is included on an accruals basis, exclusive of any VAT, provided that has been or is expected to be recovered. Costs are allocated to expense headings on a direct cost basis.

Trading costs are those incurred on the Charity’s shops and publications. Costs of generating funds comprise costs associated with running the support clubs.

Charitable activities are costs incurred on the Charity’s conservation and education activities, including support costs and costs relating to the governance of the Charity apportioned to charitable activities. Support costs are those costs incurred directly in support of expenditure on the objects of the Charity and include central costs. Governance costs are those incurred in connection with administration of the Charity and compliance with constitutional and statutory requirements.

Grants payable are charged in the year when the offer is made except in those cases where the offer is conditional, such grants being recognised as expenditure when the conditions attaching are fulfilled. Grants offered subject to conditions which have not been met at the year end are noted as a commitment, but not accrued as expenditure.

Tangible Fixed Assets (including Heritage Assets) and Depreciation

Purchased items are included at cost and donated items are included at no value or cost associated with acquisition. Individual items costing less than £1,000 are not generally capitalised, although exceptional Museum Collection items may be.

Restoration costs of heritage assets are not capitalised as the expense is intended to restore the items to original condition and not enhance or alter them. Steam locomotive boiler overhaul costs have been capitalised as components with effect from 1 February 2012.

Depreciation is only charged on these historic artefacts and items where the carrying value is considered to be greater than the residual value. For operational heritage assets and locomotive boilers, depreciation is provided at the rate of 10% straight line. Other items are depreciated on a straight-line basis as follows: storage facilities 10%, office equipment 33⅓%, shop equipment 10%, museum fittings and equipment 10% and carriage sheds 2%.

Annual impairment reviews of all tangible assets, except the Museum Collection, are carried out at the time of preparation of the financial statements and coinciding with the review of sums assured for insurance purposes.

15

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

1. Accounting policies - continued

Museum lease

The cost of the museum lease premium is being amortised over fifty years from August 2006 when the museum building first came into use. The lease actually runs for fifty years from 11 April 2008. The costs of museum tenant’s improvements are being depreciated over twenty five years.

Investments

Investments are included at fair value except for those not listed on a recognised stock exchange and subsidiary undertakings/associates which are included at cost or par value.

Intangible Income

No income is recognised for donated services etc. unless any cost borne by the donor can be determined. No monetary value is placed on the services of volunteers unless a value can be determined such as in grant claims.

Fund Accounting

The Society’s restricted funds relate to locomotives, rolling stock, museum and educational activities and grants for heritage projects. Restrictions arise when specified by the donor. Where the donor does not specify a particular fund, donations are included in unrestricted funds which are used in accordance with the charitable objects at the discretion of the Board of Trustees. This includes the designation of funds to specific projects, some of which may already be financed partly by restricted funds. Governance costs are charged to the general unrestricted fund. Endowment fund represents investments made by the Society under its Articles of Association, including in heritage assets.

Stock

Stock consists of relevant merchandise for sale and exceptional quantities or items of materials or spares for restoration projects and maintenance which have been purchased to secure special items or to gain a price advantage. All stock has been valued at the lower of cost and net realisable value.

In-house produced educational publications are not valued for stock purposes at the end of the year of publication or subsequently as they are considered as ‘back issues’ with less sales potential.

Donated items for sale are not valued upon receipt or at the year-end due to the large volume of items received and which would be onerous to count and value with limited volunteer resources and in any case most sell fairly quickly and it is considered that the aggregate value at selling price remains reasonably constant.

Cash at bank and in hand

Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account.

Creditors and provisions

Creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

Financial instruments

The society only has financial assets and financial liabilities of a kind that qualify as basic financial instruments. Basic financial instruments are initially recognised at transaction value and subsequently measured at their settlement value.

16

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

2. Status

The Society has no share capital, being a company limited by guarantee incorporated in England and Wales and is a registered charity. Each member in the event of a winding up guarantees to contribute a sum not exceeding £1. Midland and Great Northern Joint Railway Society meets the definition of a public benefit entity under FRS 102.

3. Income from donations and legacies

Unrestricted
funds
Restricted
funds
£
£
Donations
7,515
26,187
Legacies
76,130
-
83,645
26,187		 2021
Total
funds
Unrestricted
funds
Restricted
funds
£
£
£
33,702
3,419
43,832
76,130
285
1,011,621
109,832
3,704
1,055,453		 2020
Total
funds
£
47,251
1,011,906

1,059,157

4. Other trading activities

.
Other trading activities
Unrestricted
funds
Restricted
funds
£
£
Locomotive support
clubs
-
8,030
.
Investments & interest receivable
Unrestricted
funds
Restricted
funds
£
£
UK quoted investments
-
13,019
UK unquoted investments
-
8,014
Bank interest
2,429
222
2,429
21,255		 2021
Total
funds
Unrestricted
funds
Restricted
funds
£
£
£
8,030
-
8,519
2021
Total
funds
Unrestricted
funds
Restricted
funds
£
£
£
13,019
-
1,488
8,014
-
4,759
2,651
3,378
1,707
23,684
3,378
7,954		 2020
Total
funds
£
8,519


2020
Total
funds
£
1,488
4,759
5,085

11,332

5. Investments & interest receivable

6. Expenditure on raising funds

Unrestricted
funds
Restricted
funds
Expenditure
Locomotive support clubs
-
2,362
Marketing
285
-
Investment management
charges
-
5,185
Support costs (note 11)
33
-
318
7,547		 2021
Total
funds
Unrestricted
funds
Restricted
funds
2,362
-
3,201
285
738
-
5,185
-
6,622
33
127
-
7,865
865
9,823		 2020
Total
funds
3,201
738
6,622
127
10,688

17

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

7. Conservation activities

Unrestricted
funds
Restricted
funds
£
£
Income
Locomotive & rolling
stock hire fees
58,770
2,000
Premises licence fee
1,000
-
59,770
2,000
Expenditure
Maintenance & operation
72,635
16,638
Restoration costs
-
35,499
Grant paid
-
-
Insurance
15,592
-
Equipment & storage
1,100
198
Depreciation
53,720
7,868
Support costs (note 11)
16,458
-
159,505
60,203
Net income/(expenditure)
(99,735)
(58,203)		 2021
Total
funds
Unrestricted
funds
Restricted
funds
£
£
£
60,770
121,835
2,000
1,000
1,000
-
61,770
122,835
2,000
89,273
8,709
58,326
35,499
-
11,092
-
2,000
8,000
15,592
6,943
-
1,298
1,100
183
61,588
53,720
7,868
16,458
12,509
-
219,708
84,981
85,469
(157,938)
37,854
(83,469)		 2020
Total
funds
£
123,835
1,000
124,835
67,035
11,092
10,000
6,943
1,283
61,588
12,509
170,450
(45,615)

8. Education activities

. Education activities
Unrestricted
funds
Restricted
funds
£
£
Income
Museum entry fees
2,005
-
2,005
-
Expenditure
Equipment & storage
2,000
325
Subscriptions & donations
-
146
Depreciation
2,618
880
Support costs (note 11)
531
-
5,149
1,351
Net expenditure
(3,144)
(1,351)
 2021
Total
funds
Unrestricted
funds
Restricted
funds
£
£
£
2,005
2,163
-
2,005
2,163
-
2,325
2,000
137
146
-
186
3,498
2,560
220
531
787
-
6,500
5,347
543
(4,495)
(3,184)
(543)		 2020
Total
funds
£
2,163

2,163

2,137
186
2,780
787
5,890

(3,727)

18

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

9. Membership

. Membership
Unrestricted
funds
Restricted
funds
£
£
Income
Membership fees
56,810
-

56,810
-

Expenditure
Joint Line publishing
16,793
-
Administration
5,340
-
Support costs (note 11)
2,546
-
24,679
-
Net income
32,131
-		 2021
Total
funds
Unrestricted
funds
Restricted
funds
£
£
£
56,810
62,462
-

56,810
62,462
-

16,793
19,610
-
5,340
5,926
-
2,546
4,408
-
24,679
29,944
-
32,131
32,518
-		 2020
Total
funds
£
62,462

62,462

19,610
5,926
4,408

29,944
32,518

10. Primary purpose trading

Unrestricted
funds
Restricted
funds
£
£
Income
Shop & publishing sales
8,107
6,277
8,107
6,277
Expenditure
Cost of goods sold
4,296
1,187
Equipment & storage
359
-
Depreciation
214
-
Support costs (note 11)
560
-
5,429
1,187
Net income
2,678
5,090		 2021
Total
funds
Unrestricted
funds
Restricted
funds
£
£
£
14,384
22,779
28,299
14,384
22,779
28,299
5,483
12,980
1,388
359
8
-
214
-
-
560
2,242
-
6,616
15,230
1,388
7,768
7,549
26,911		 2020
Total
funds
£
51,078
51,078
14,368
8
-
2,242
16,618
34,460

19

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

11. Support costs

1. Support costs
2021 2020
Total expenditure Total expenditure
Expenditure
Office rent & charges 9,273 9,020
Bank & credit card charges 1,038 1,401
Subscriptions & donations 66 60
Office equipment depreciation 603 429
Governance 8,606 8,845
Miscellaneous expenditure 542 318
20,128 20,073
Allocated to
Expenditure on raising funds (note 6) 33 127
Conservation activities (note 7) 16,458 12,509
Education activities (note 8) 531 787
Membership (note 9) 2,546 4,408
Primary purpose trading (note 10) 560 2,242
20,128 20,073

Support costs are allocated to expenditure on the same ratio as the direct costs associated with the relevant area of activity.

12. Net income before transfers

This is stated after charging/crediting:

2021 2020
£ £
Depreciation 65,903 64,798
Independent Examiner’s remuneration 2,750 -
Auditor’s Remuneration - 5,000
Expenses reimbursed to Board Members 1,571 2,570
Operating lease rentals 9,100 9,100

13. Staff costs, trustee remuneration and expenses

The Society has no employees. Apart from K R Ashford who is full-time Chief Mechanical Engineer of the NNR, none of the trustees have been paid any remuneration or received any other benefits from employment by the Society or a related entity.

Expenses reimbursed to board members relate to supplies of materials, spare parts and fuel used in the restoration and operation of heritage assets, shop merchandise and other supplies and sundry administration. In all cases the suppliers are those with which the Society does not have credit accounts. The number of trustees reimbursed expenses was 6 (2020 - 4).

Trustees and members of their families make unconditional donations to the Society, either by way of regular monthly payments or occasional lump sums to support projects and public appeals. The aggregate total of such specifically identified donations from trustees and related parties in 2020-21 was £588 (2019-20 £420). There may have been additional unidentified donations placed in collecting boxes located at the Society’s shop and museum.

20

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

14. Tangible Fixed Assets


Cost at start of year
Additions in year
Disposals during year
Cost at end of year
Depreciation at start of year
Charge for year
Disposals during year
Depreciation at end of year
Net book value at end of year
Net book value at start of year		 Collection
Assets
£
466,867
160,250
-
627,117
____
300,000
-
-
300,000
 _
327,117
166,867
_		 Locomotive
Boilers
£
480,704
5,766
-
486,470
____
228,593
52,544
-
281,137
 _
205,333
252,111
_		 Heritage
Assets Total
£
947,571
166,016
-
1,113,587
___
528,593
52,544
-
581,137
__
532,450
__
418,978
__ ___		 Leasehold
Buildings
Fixtures,
Fittings &
Equipment
£
£
520,403
43,496
-
5,086
-
-
520,403
48,582
___
______
124,480
32,862
10,923
2,436
-
-
135,403
35,298
__
___
385,000
13,284
___
______
395,923
10,634
___		 Tangible
Assets Total
£
563,899
5,086
-
568,985
___
157,342
13,359
-
170,701
__
398,284
__
406,557
__ ___		 Total
£
1,511,470
171,102
-
1,682,572
_____
685,935
65,903
-
751,838
__ _
930,734
_ __
825,535
__ _____

Collection assets (and their cost/net book value) comprise historical locomotives (£459,555/£159,555), a diesel multiple unit (£100,000/£100,000), carriages and wagons (£51,732/£51,732), a road vehicle (£9,739/£9,739) and artefacts/collections (£6,091/£6,091) held for preservation and educational purposes. Locomotives and some carriages and wagons are included at cost of acquisition; no value is included for donated items as this is usually not available. The ages range from about 50 to 130 years. Locomotives and some other rolling stock are operational subject to completion of restoration or overhaul; the remainder is for static or museum display. Locomotive boilers are components related to the historical locomotives.

Summary Analysis of Heritage Asset Transactions Summary Analysis of Heritage Asset Transactions
2021 2020 2019 2018 2017
£ £ £ £ £
Purchases & capitalisation:
Locomotives 60,000 - 35,000 - -
Diesel multiple unit 100,000 - - - -
Carriages and wagons - - 35,000 - -
Other collection items 250 1,674 1,417 - 1,806
Locomotive Boilers 5,766 47,332 - 13,850 29,168
Charge for depreciation:
Locomotives - - - - -
Locomotive boilers 52,544 52,543 43,757 39,559 24,901
- -
Disposals carrying amounts:
Carriages and wagons - - 10 - -
Proceeds from disposals:
Carriages and wagons - - 1,000 - -

21

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

15. Investments

Shares in North Norfolk Railway PLC
Total Shares in Associate at cost
North Norfolk Railway PLC Bond Issue 4 (2020 -Issue 3)
Midland & Great Northern Heritage Limited
Zenzic Loan Note
Total Unquoted Investments at cost
Cazenove Charity NURS Fund
Prudential Assurance and LGT Vestra Fund
Total quoted investments at fair value
Total investments at cost or fair value
Movement in quoted fixed asset investments:
Fair value at beginning of the year
Additions at cost
Disposal proceeds
Realised gains (losses)
Disposals at opening fair value
Net unrealised investment gains
Fair value at end of the year
Cash held by investment managers for re-investment
Total quoted investments at fair value		 2021
£
263,513
30,000
1,000
100,000
313,686
519,403		 2021
£
263,513
30,000
1,000
100,000
313,686
519,403		 s Restated
2020
£
263,513
30,000
1,000
100,000
131,000
302,424
502,700
805,124
1,199,637
2020
£
-
797,167		 s Restated
2020
£
263,513
30,000
1,000
100,000
131,000
302,424
502,700
805,124
1,199,637
2020
£
-
797,167

(140,162)
(794)		 (18,210)
75
(140,956) (18,135)
32,420
818,607
14,482
___
833,089		 11,454
790,486
14,638
__
805,124

Purchases of Ordinary Shares of £1 each in North Norfolk Railway PLC (NNR), an unlisted public company, have been at par. In addition, the Society has added to its shareholding by accepting gifts and bequests of shares from members and others and these are also included at par. At 31 January 2020 the total number of shares purchased was 214,090 and the total shareholding was 263,513. During the year no shares were purchased or gifted to the Society, so at 31 January 2021 the total number of shares purchased was 214,090 and the total shareholding including gifted shares was 263,513. The Society is the largest single shareholder owning approximately 31.9% (2020 34.2%) of the issued share capital.

The Society’s approximately 31.9% (2020 34.2%) proportions of the share capital and profits of the NNR are:

2021 2020
£ % £ %
Share Capital 263,513 31.9 263,513 34.2
Profit and loss account (75,617) 31.9
 (30,411) 34.2
Net loss for the year (47,250) 31.9
 (36,087) 34.2

22

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

15. Investments - continued

The not-for-profit constitution of the NNR precludes payment of any dividend or distribution on the Society’s investment. However, the benefits that derive from the investment are considerable and are noted throughout the Report of the Board of Trustees. These include access to covered accommodation and engineering facilities for restoration and storage, a secure and appropriate base for the Society’s assets and a venue to exhibit them to the public either operationally or static in accordance with the charitable objectives. While it is difficult to quantify a monetary value for the benefits, the Board is of the opinion that the value of the investment at cost in these accounts is not in excess of the potential value of the future ongoing benefits so derived.

In February 2014 the Society invested £20,000 in NNR ‘Bonds I’ for a 3-year term of 6% compound interest accrued annually, with £3,820 received at maturity in February 2017. The nominal value of £20,000 was rolled over into a third Bond issue with an additional £10,000 new investment. The term was 3 years at 5% compound interest with £4,735 maturing in February 2020. As part of the Society’s COVID-19 support package to the NNR, this sum has been left outstanding at 1% interest with repayment to be reviewed in 2021. In March 2020 the nominal value of £30,000 was rolled over into a fourth bond issue for a 3-year term of 5% compound interest accruing annually and maturing in February 2023.

The Society holds 1,000 ordinary £1 shares, being 100% of the issued and authorised share capital of Midland & Great Northern Heritage Limited (Company number 04009464). The company was set up to undertake noncharitable trading activities but is not currently trading.

The £100,000 Zenzic Loan note is an unquoted three-year fixed term property and property development bond guaranteeing a return of 8% per annum, interest paid six monthly, over the fixed term, maturing in June 2022.

Quoted investments consist of an initial £800,000 invested in three managed mixed funds, which are stated at market value as at 31 January 2021.

Valuation

Listed investments are carried at their fair value. Investment in equities and fixed interest securities are all traded in quoted public markets, primarily the London Stock Exchange. Holdings in common investment funds, unit trusts and open-ended investment companies are at the bid price. The basis of fair value for quoted investments is equivalent to the market value, using the bid price. Asset sales and purchases are recognised at the date of trade at cost (that is their transaction value). The significance of financial instruments to the ongoing financial sustainability of the Charity is considered in the financial review and investment policy and performance sections of the Trustees' Annual Report.

The main risk to the Charity from financial instruments lies in the combination of uncertain investment markets and volatility in yield. Liquidity risk is anticipated to be low as all assets are traded and the commitment to intervention by central banks and market regulators has continued to provide for orderly trading in the markets and so their ability to buy and sell quoted equities and stock is anticipated to continue. The Charity investments are mainly traded in markets with good liquidity and high trading volumes. The Charity has no material investment holdings in markets subject to exchange controls or trading restrictions.

The Charity manages these investment risks by retaining expert advisors and operating an investment policy that provides for a high degree of diversification of holdings within investment asset classes that are quoted on recognised stock exchanges. The Charity does not make use of derivatives and similar complex financial instruments. Investments are held for their longer term yield and total return. Historic studies of quoted financial instruments have shown that short term volatility in any particular period will normally be corrected in the longterm.

23

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

16. Related Parties

The trustees are the legal directors of the charity and its subsidiary and they do consider themselves part of the day-to-day management and are therefore key management personnel. However, none of the trustees received any remuneration or benefits during the year.

As outlined in note 15, Midland and Great Northern Joint Railway Society is the largest shareholder of the NNR. The following trustees holding office at the year-end are also directors of the NNR:-

A Dewey N Sharpe A Barrs

During the year sales to NNR were £64,128 (2020 £120,019) and purchases from them £293,493 (2020 £50,472) including assets of £162,272 but excluding shares. At the year-end NNR owed the Society £nil (2020 £nil) and the Society owed NNR £nil (2020 £nil). The figures exclude VAT.

There are leases in place between the NNR and the Society in respect to its Museum Building and Carriage Sheds with provision for peppercorn ground rents payable by the Society to the NNR.

17. Debtors

Trade debtors
Prepayments and accrued income
Other debtors
 2021
£
106
91,427
1,371
______

92,904		 2020
£
31
14,401
13
______
14,445

18. Creditors: Amounts falling due within one year

Trade Creditors
Amounts owed to group and associated undertakings
Accruals and deferred income
Taxation and social security		 2021
£
5,809
802
3,058
-
_____
9,669		 2020
£
439
802
5,178
1,137
_____
7,556

24

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

19. Statement of Funds

Statement of Funds –
Current year
Balance at
beginning
of year
£
General Fund
321,248
Designated Funds – Note
20
595,718
_
Total Unrestricted Funds
916,966
Total Restricted Funds –
Note 21
1,541,055
Total Endowment Funds
– Note 22
430,380
__
2,888,401
Statement of Funds –
Prior year
Balance at
beginning of
year
£
General Fund
310,451
Designated Funds –
Note 20
533,293
_
Total Unrestricted
Funds
843,744
Total Restricted Funds –
Note 21 – As Restated
518,466
Total Endowment Funds
– Note 22
428,706
__
1,790,916		 Income Expenditure
Investment
Gains
Transfers
£
£
£
£
153,996
(83,943)
-
(100,250)
58,770
(111,137)
-
(26,640)
_
_
_
_
212,766
(195,080)
-
(126,890)
63,749
(70,288)
31,626
(33,360)
-
-
-
160,250
__
__
_
_
276,515
(265,368)
31,626
-
Income Expenditure
Investment
Gains
Transfers
£
£
£
£
94,807
(74,836)
-
(9,174)
122,515
(61,531)
-
1,441
_
__
_
__
217,322
(136,367)
-
(7,733)
1,102,224
(97,223)
11,529
6,059
-
-
-
1,674
__
__
_
_
1,319,546
(233,590)
11,529
-		 Balance
at end of
year
£
291,051
516,711
_
807,762
1,532,782
590,630
__
2,931,174
Balance
at end of
year
£
321,248
595,718
_
916,966
1,541,055
430,380
__
2,888,401

25

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

20. Designated Funds

Current year
Balance at
beginning of
year
£
‘Loco Pot’
501,434
Locomotive Boilers
21,284
Operation Phoenix
73,000
_
595,718
Prior year
Balance at
beginning of
year
£
‘Loco Pot’
415,725
Locomotive Boilers
42,568
Operation Phoenix
75,000
_
533,293		 _

 Income
Expenditure
£
£
58,770
(109,137)
-
-
-
(2,000)
__
__
58,770
(111,137)
Income
Expenditure
£
£
122,515
(59,531)
-
-
-
(2,000)
_
_____
122,515
(61,531)		 Transfers
Balance at
end of year
£
£
(5,356)
445,711
(21,284)
-
-
71,000
_
_
(26,640)
516,711
Transfers
Balance at
end of year
£
£
22,725
501,434
(21,284)
21,284
-
73,000
_
_
1,441
595,718

The Trustees have established a steam locomotive fund (‘Loco Pot’) which receives the steaming fees of the B12, J15/Y14 and WD when operational. This fund helps defray the costs of repairs and major overhauls of the locomotives with back-up funding from other steam locomotive funds and support clubs as required. With the new Steam Loco Legacy fund available for this purpose, the Society is well funded for repairs and major overhauls of its locomotives. At the board meeting on 18 July 2020, the trustees approved the widening of the fund’s remit to include Ring Haw , Wissington, the Class O8 and the Class 101 DMU.

Locomotive Boilers fund was established from 2012-13 as part of the steam locomotive boiler capitalisation policy. The fund represented at 1 February 2012 £141,891 raised by B12 clubs’ members and other donors specifically for the boiler overhaul which cost £143,101. The fund has been reduced in line with the depreciation of that cost and as at 31 January 2021 it was fully dispensed.

26

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

21. Restricted Funds

Current year
Balance at
beginning
of year
£
Loco Club (all locos)
81,473
J15
5,446
B12
4,940
WD
4,900
Wissington
11,433
Ring Haw
-
Steam Loco Legacy
1,023,437
31 Fund (Class 31)
3,386
Diesel Club
2,732
Heritage Coach Fund
34,404
Quad Art Set
2,467
Museum
38,454
Museum Improvements
21,790
Holt Development
4,179
Carriage Sheds
298,946
Society Grants
3,068
1,541,055
Prior year
As Restated
Balance at
beginning
of year
£
Loco Club (all locos)
63,476
J15
4,079
B12
2,154
WD
3,705
Wissington
50,877
Steam Loco Legacy
-
31 Fund (Class 31)
5,218
Diesel Club
9,120
Heritage Coach Fund
18,632
Quad Art Set
2,410
Museum
45,064
Museum Improvements
-
Holt Development
3,849
Carriage Sheds
306,814
Society Grants
3,068
518,466		 Income Expenditure
Investment
Gains Transfers
Balance at
end of year
£
£
£
£
£
15,731
-
-
(26,960)
70,244
4,193
(1,381)
-
(3,000)
5,258
3,723
(981)
-
(2,500)
5,182
1,170
-
-
(2,900)
3,170
510
(9,069)
-
-
2,874
125
-
-
-
125
21,216
(5,657)
31,626
-
1,070,622
444
(5,028)
-
2,000
802
1,470
-
-
-
4,202
14,664
(38,588)
-
-
10,480
-
-
-
-
2,467
173
(836)
-
-
37,791
-
(880)
-
-
20,910
330
-
-
-
4,509
-
(7,868)
-
-
291,078
-
-
-
-
3,068
63,749
(70,288)
31,626
(33,360)
1,532,782
Income Expenditure
Investment
Gains Transfers
Balance at
end of year
£
£
£
£
£
18,255
(258)
-
-
81,473
4,146
(1,338)
-
(1,441)
5,446
4,103
(1,317)
-
-
4,940
1,195
-
-
-
4,900
760
(40,204)
-
-
11,433
1,018,530
(6,622)
11,529
-
1,023,437
6,875
(16,207)
-
7,500
3,386
1,612
(8,000)
-
-
2,732
28,926
(13,154)
-
-
34,404
57
-
-
-
2,467
5,435
(2,035)
-
(10,010)
38,454
12,000
(220)
-
10,010
21,790
330
-
-
-
4,179
-
(7,868)
-
-
298,946
-
-
-
-
3,068
1,102,224
(97,223)
11,529
6,059
1,541,055		 Income Expenditure
Investment
Gains Transfers
Balance at
end of year
£
£
£
£
£
15,731
-
-
(26,960)
70,244
4,193
(1,381)
-
(3,000)
5,258
3,723
(981)
-
(2,500)
5,182
1,170
-
-
(2,900)
3,170
510
(9,069)
-
-
2,874
125
-
-
-
125
21,216
(5,657)
31,626
-
1,070,622
444
(5,028)
-
2,000
802
1,470
-
-
-
4,202
14,664
(38,588)
-
-
10,480
-
-
-
-
2,467
173
(836)
-
-
37,791
-
(880)
-
-
20,910
330
-
-
-
4,509
-
(7,868)
-
-
291,078
-
-
-
-
3,068
63,749
(70,288)
31,626
(33,360)
1,532,782
Income Expenditure
Investment
Gains Transfers
Balance at
end of year
£
£
£
£
£
18,255
(258)
-
-
81,473
4,146
(1,338)
-
(1,441)
5,446
4,103
(1,317)
-
-
4,940
1,195
-
-
-
4,900
760
(40,204)
-
-
11,433
1,018,530
(6,622)
11,529
-
1,023,437
6,875
(16,207)
-
7,500
3,386
1,612
(8,000)
-
-
2,732
28,926
(13,154)
-
-
34,404
57
-
-
-
2,467
5,435
(2,035)
-
(10,010)
38,454
12,000
(220)
-
10,010
21,790
330
-
-
-
4,179
-
(7,868)
-
-
298,946
-
-
-
-
3,068
1,102,224
(97,223)
11,529
6,059
1,541,055

1,541,055

The income of the funds relates to donations, other contributions, shop retail and donated sales, investment income, bank interest, and designated by the Trustees, Heritage Coach Fund rolling stock hire of £2,000.

At 31 January 2021 the Loco Club fund balance of £70,244 is attributable as follows: General (all locos) £26,991, J15 £3,257, B12 £1,840, W1500 £31,400, WD £3,280, Wissington £3,120 and Class 31 £356. The transfers of £26,960 are to ‘Loco Pot’ towards repairs and maintenance costs of all locomotives which the club supports.

27

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

21. Restricted Funds - continued

A new support fund was established during the year for Ring Haw . As with other such funds it will receive donations etc directed specifically for this locomotive towards maintenance and overhaul costs.

22. Endowment Fund and transfers between funds

Endowment Fund – This is not a cash fund. All heritage assets are represented in Endowment Fund, demonstrating the strategic permanency of the Society’s ownership as they are unlikely to be sold or otherwise disposed of except in exceptional circumstances. Similarly, the investment in NNR shares is represented in Endowment due to the permanent nature and purpose of these in the pursuit of the charitable objectives as explained in note 15 and throughout the Report of the Board of Trustees.

Heritage assets acquired in the year comprise Ring Haw costing £60,000 paid for by ‘Loco Pot’, Class 101 DMU costing £100,000 paid for by General Fund and a donated rail-mounted weighbridge costing £250 for transport paid for by General Fund.

Other Funds

The net transfers totalling £33,360 from restricted funds are to ‘Loco Pot’ as contributions towards repairs and maintenance.

The net transfers totalling £26,640 from designated funds represents the £60,000 purchase of Ring Haw less the £33,360 in from restricted funds. The £26,640 is reduced to £5,356 by £21,284 transfer into ‘Loco Pot’ from Locomotive Boilers, being the release of previous funding for the B12 boiler overhaul released over ten years in line with the annual £21,465 depreciation of the boiler costs. At 31 January 2021 the boiler depreciation has been fully charged and the funds fully released.

The General Funds net transfers out of £100,250 is to Endowment Fund in the second paragraph above.

23. Analysis of net assets between funds

Designated
Funds
General
Fund
Restricted
Funds
Endowment
Fund
£
£
£
£
Tangible fixed assets
228,251
63,378
311,988
327,117
Investments
-
31,000
933,089
263,513
Net Current Assets
288,460
196,673
287,705
-
_
_
_
_
516,711
291,051
1,532,782
590,630
Prior year
Designated
Funds
General
Fund
Restricted
Funds
Endowment
Fund
£
£
£
£
Tangible fixed assets
277,779
60,153
320,736
166,867
Investments
-
31,000
905,124
263,513
Net Current Assets
317,939
230,095
315,195
-
_
_
_
_
595,718
321,248
1,541,055
430,380		 Total
Funds
£
930,734
1,227,602
772,838
_
2,931,174
Total
Funds
£
825,535
1,199,637
863,229
_
2,888,401

28

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

24. Reconciliation of net income to net cash flow from operating activities

Net income for the year (as per the statement of
financial activities)
Depreciation charges
Gains on investments
Dividends, interest and rent from investments
Increase in stocks
(Increase)/decrease in debtors
Increase/(decrease) in creditors		 2021
£
42,773
65,903
(31,626)
(23,684)
(11,952)
(78,459)
2,113
__

(34,932)		 As
Restated
2020
£
1,097,485
64,798
(11,529)
(11,332)
(29)
47,584
(558)
___
1,186,419

25. Analysis of cash and cash equivalents

Cash at bank and in hand
Cash held by investment managers for re-investment
 As
Restated
2021
2020
£
£
619,210
797,899
14,482
14,638
_
_
633,692
812,537

26. Analysis of changes in net debt

As Restated at 1
February 2020
Cash Flows
At 31
£
Cash and cash equivalents
812,537
(178,845_)
_
_
812,537
(178,645)		 January
2021
£
633,692
_
633,692

29

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JANUARY 2021 continued

27. Contracts and Commitments

A contract for the supply, installation and commissioning of a steam heat boiler for Class 31 locomotive no. D5631 was entered into with King’s Boiler Hire Ltd in October 2017 in the sum of £21,996. At 31 January 2021 £2,000 of the contract remained to be completed. It is planned for this work to be concluded by next winter. Small remedial works have continued but after the year end the locomotive made successful test runs which included under load and it is available for use. It awaits its place in the queue for final painting and lining-out.

A contract for the overhaul of the boiler of 0-6-0ST No. 1700 Wissington was entered into with the NNR in December 2020 in the sum of £23,240. The contract provided for a contingency sum of £5,000 to cover unforeseen boiler plate replacement or other repairs pending further assessment on dismantling.

In fact, in February 2021 such additional works were found to be required and £6,085 was added to the original contract, making a new total of £29,325. At 31 January 2021 £25,875 remained to be completed. There also remained about £1,000 of work to complete the previous contract for overhaul of the motion and frames.

A contract for the overhaul phase 2 of Grove Allen H4084 crane NOY 366L was entered into with the NNR in December 2020 in the sum of £13,296. Work started in February 2021.

At 31 January 2021 grants have been awarded or pledges made towards three projects being undertaken or planned to be undertaken on the North Norfolk Railway. The aggregate amount is £16,250 but payments will be dependent upon the projects being completed

28. Commitments under Operating Leases

At 31 January 2021 there were future minimum lease payments under non-cancellable operating leases for land and buildings as follows:

Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years		 2021
£
9,100
26,650
100
______

35,850		 2020
£
9,100
35,650
100
______
44,850

29. Post Balance Sheet Events

Post balance sheet events have already been covered in the Report of the Board of Trustees on page 6 and under going concern in note 1 of the notes to the financial statements on page 14. The events are relevant to a return to more normal activities and income without out of course expenditure and are, therefore, of a positive nature.

The Board has determined that these events do not impact on the financial position and results of operations as of and for the year ended 31 January 2021.

The Board also considers there are no other post balance sheet events that materially affect these financial statements.

30

MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY

INDEPENDENT EXAMINER’S REPORT TO THE TRUSTEES OF MIDLAND AND GREAT NORTHERN JOINT RAILWAY SOCIETY FOR THE YEAR ENDED 31 JANUARY 2021

I report on the accounts of the Charity for the period ended 31 January 2021, which are set out on pages 11 to 30.

Responsibilities and basis of report

As the charity’s trustees of the Company (who are also the directors of the company 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 Company are not required to be audited for this year under Part 16 of the 2006 Act and are eligible for independent examination, I report in respect of my examination of your charity’s accounts as 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

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:

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.

Mr M Hewett ACA DChA

Peters Elworthy and Moore Salisbury House, Station Road Cambridge CB1 2LA

14 June 2021

31