OpenCharities

This text was generated using OCR and may contain errors. Check the original PDF to see the document submitted to the regulator.

2021-03-31-accounts

Trustees' Report and Consolidated Financial Statements of the National Museum of the Royal Navy 2020-21

HC 1075

The National Museum of the Royal Navy

Annual report and accounts 2020-2021 For the period 1 April 2020 to 31 March 2021

Presented to Parliament pursuant to the Government Resources and Accounts Act 2000 (Audit of Public Bodies) Order 2012

Ordered by the House of Commons to be printed on 31 January 2022

HC 1075

© National Museum of the Royal Navy copyright 2022

This publication is licensed under the terms of the Open Government Licence v3.0 except where - - otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open government licence/version/3.

Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.

This publication is available at www.gov.uk/official-documents.

Any enquiries regarding this publication should be sent to us at governance@nmrn.org.uk

ISBN 978-1-5286-3155-6

E02713316 01/22

Printed on paper containing 75% recycled fibre content minimum

Printed in the UK by HH Associates Ltd. on behalf of the Controller of Her Majesty’s Stationery Office

Charity number: 1126283 Company Number: 06699696

The National Museum of the Royal Navy

A company limited by guarantee

Trustees’ annual report and consolidated financial statements

for the year ended 31 March 2021

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

----- Start of picture text -----
||| |---|---| |Contents| |The National Museum of|.................................................................................................................................2| |the Royal Navy|..................................................................................................................................................2| |Legal and administrative information|.................................................................................................................3| |Foreword|...............................................................................................................................................................4| |Group structure chart|...........................................................................................................................................5| |Performance Report|.............................................................................................................................................6| |Overview|..........................................................................................................................................................6| |Covid-19 Pandemic|..........................................................................................................................................7| |Activities and Achievements|...........................................................................................................................7| |Plans for Future Periods|................................................................................................................................10| |Financial Review|............................................................................................................................................13| |Accountability Report|.........................................................................................................................................16| |Trustees’ Report and Governance Statement|..............................................................................................16| |Assurance Statement by the Audit and Governance Committee|...............................................................20| |Statement of Board of Trustees’ and Accounting Officer’s responsibilities|...............................................21| |Remuneration and Staff Report|....................................................................................................................22| |Parliamentary accountability and audit report|...........................................................................................26| |The Certificate and Report of the Comptroller and Auditor General to the Members| |of the National Museum of the Royal Navy|.................................................................................................27| |Consolidated Statement of financial activities (incorporating the income and expenditure account)|..........31| |Consolidated Balance Sheet|...............................................................................................................................33| |Consolidated Cash flow statement|....................................................................................................................34|

----- End of picture text -----

Page 2

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Legal and administrative information

Charity number		 1126283
Company registration number 06699696
Registered office H M Naval Base PP66
Portsmouth
Hampshire PO1 3NH

Director General and
Accounting Officer Professor Dominic Tweddle
Chairman Admiral Sir Philip Jones GCB ADC DL (Appointed 29 May 2020)
Dr Caroline Williams (Resigned as Chair 29 May 2020)
Trustee directors of NMRN Rear Admiral Mark Anderson CB (Appointed 1 September 2020)
Mr Michael J Bedingfield
Ms Katherine Biggs (Appointed 1 September 2020)
Dr Andrew Burnett CBE FBA (Appointed 25 October 2020)
Mr Philip G Dolling (Appointed 1 September 2020)

Mr Mike Gambazzi (Resigned 2 December 2021)
Ms Helen Jackson
Vice Admiral Sir Adrian Johns KCB CBE KStJ ADC (Resigned 20 October 2020)
Councillor Donna Jones
Major General Jeffrey S Mason
Mrs Mary Montagu-Scott DL

Rear Admiral Jonathan P Pentreath CB OBE (Appointed 1 September 2020)
Mr Tim Schadla-Hall (Resigned 25 October 2020)
Mr John Michael E Scott (Appointed 1 September 2020)
Mrs Alison Start (Appointed 1 September 2020)
Mr Gavin Whitter
Dr Caroline Williams (Resigned 13 July 2020)
Auditors Comptroller and Auditor General

National Audit Office, 157 - 197 Buckingham Palace Road, Victoria, London SW1W 9SP
Accountants Compass Accountants Limited
Venture House, The Tanneries, East Street, Titchfield, Hampshire PO14 4AR
Bankers Lloyds TSB Bank Plc
38 London Road, North End, Portsmouth, Hampshire PO2 0LR

Page 3

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Foreword

The charitable objectives of the National Museum of the Royal Navy, as defined within its Articles of Association are:

In order to deliver its objects, the vision of the National Museum of the Royal Navy is to be the world’s most respected naval museum. This will be achieved by:

Page 4

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Group structure chart

----- Start of picture text -----
National
Museum of the
Royal Navy
CharitableTrusts: Linked CharitableTrusts: Operations NMRN Limited by Guarantee: Charitable Companies
Royal Marines HMS Victory Preservation
Royal Naval Museum Company & Trust
Museum Royal Navy HMS Caroline Preservation
HMS M33 Submarine Company & Trust
Trust Museum Warrior Preservation Trust
Fleet Air Arm Portsmouth Foudroyant Trust
Museum Historic Dockyard
NMRN Operations HMS Trincomalee Trust
Trading Ltd NMRN Hartlepool
(Joint Venture) NMRN Services
----- End of picture text -----

Inactive charitable companies awaiting strike off and dissolution:

Portsmouth Historic Dockyard Operations Ltd is a joint venture company incorporated on 7 August 2020 and owned equally (50:50) by NMRN Operations and the Mary Rose Trust.

Page 5

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Performance Report

Overview

The National Museum of the Royal Navy (“the National Museum”) was established in 2008 and is the holding company of the National Museum of the Royal Navy Group. The Group includes the Royal Naval Museum, the Fleet Air Arm Museum, the Royal Navy Submarine Museum with HMS Alliance , Explosion! The Museum of Naval Firepower, the Royal Marines Museum, HMS Victory , HMS Caroline , HMS M33 , HMS Warrior and NMRN Hartlepool (including HMS Trincomalee ). In August 2020, its subsidiary company, NMRN Operations, created an equally owned joint venture company with the Mary Rose Trust, Portsmouth Historic Dockyard Operations Ltd, to act as agent for the sale of tickets to Portsmouth Historic Dockyard attractions, with the distribution of sales revenue and share of costs on an agreed split.

The National Museum’s vision is to become the world’s most respected Naval Museum and its goal is to promote the public understanding of the Royal Navy past, present and future. Its strategy sets out to increase its: resilience , improving its financial position and skilling the team so that it is able to adapt to threats to ensure its survival; scale, to grow the collections and the range of activities they support so that the National Museum has marked impact on society as a whole; scope , to develop the range of activities which together better help protect and improve access to the naval heritage, including its own collections; and reach , to develop a greater physical and virtual presence so that more people engage with the Royal Navy story.

The National Museum’s strategy is delivered through its professional and dedicated team of staff and volunteers, working within a framework of values that supports the culture of the organisation, guiding our everyday actions and being integral to our performance management framework:

M aking Things Happen, proactively, effectively and collaboratively

A chieving the best possible outcomes and celebrating our success, acting on what is important and adds value R especting others and valuing diversity, acting with honesty, integrity and reliability

I nspiring our visitors and users by putting them at the centre of our business and building strong relationships T rusting each other, taking responsibility, communicating effectively and sharing knowledge and expertise I nnovating and embracing change through our open mindedness and willingness to take calculated risks M otivating, encouraging and empowering, acting as ambassadors for the National Museum E xcellence – continually seeking to improve the quality of our work and the services we deliver

The National Museum’s day-to-day operation is overseen by the Executive Directors within the context of an overarching strategy framework, and underpinned by a suite of Group policies, procedures and operating models. Operational activity has been consolidated into NMRN Operations, a wholly owned charitable subsidiary of the National Museum, simplifying the governance structure and allowing the benefits of operation of the museums through a single large organisation to be realised, improving visitor experience, enhancing access to and care of the collections and demonstrating greater cohesion in the delivery of the charitable objectives. The National Museum’s heritage assets are retained within independent charitable trusts, with the National Museum of the Royal Navy as the sole corporate trustee and the Warrior Preservation Trust will be seeking to transfer the ship and its heritage assets into a yet to be formed trust in the same model.

The National Museum is one of the few headquartered outside London, acquiring key sites also outside the capital, and enabling people to learn, enjoy and engage with the naval story in the regions. The National Museum’s reach is further extending through its network of naval heritage partnerships and cooperations. New cooperation agreements established during this reporting period include the Shipwreck Museum (Hastings); the Haslar Heritage Group and Haslar Developments Ltd (Gosport); and the Unicorn Preservation Society (Dundee).

The Ministry of Defence (MOD) concluded its review of its Services Museums in July 2016 and confirmed that the functions of the National Museum of the Royal Navy continued to support MOD objectives. It recommended that the National Museum should remain as a Non-Departmental Public Body sponsored by the MOD.

Page 6

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Covid-19 Pandemic

During the reporting period, each of the National Museum’s sites has been subject to various enforced closures, according to location, in response to the government’s regional advice regarding the Covid-19 pandemic. All major projects were stalled and trading activity ceased for the three major lockdown periods, losing over 80% of trading days and significantly impacting upon the National Museum’s self-generated income (a loss of £9,993,000 compared to the previous period).

Under the terms of its Financial Framework for the receipt of Grant in Aid, the National Museum has not been permitted to build or carry forward a significant unrestricted “free” reserve. Although it holds restricted reserves, special trusts and endowments within charitable trusts within the group, the significant majority (91%) of this relates to investments designed to generate income specifically for the conservation and preservation of HMS Victory, with a further 2% held in relation to the group’s other historic ships. The trustees have considered seeking the derestriction of other funds held (£3,394,000), however, the majority of these funds have significant restrictions on their use put in place by the donors. Whilst in theory, the trustees could apply to the donors (where they still exist) or the Charity Commission to repurpose the funds, they considered that this would be highly inappropriate where the purpose of the funds was for the long‐term safeguarding of historic assets.

The National Museum took urgent steps to engage with HM Treasury and its sponsor, the Ministry of Defence (MOD), to secure additional grant in aid funding to replace lost trading income and to provide financial stability during the period. A funding bid by the National Museum to effectively underwrite financial performance and support cashflows for 2020-21 was successful and confirmation of a grant in aid uplift of up to £5,240,000 for the National Museum Group was received from Navy Command on 27 July 2020. In reality, as a result of effective costs management and stronger than anticipated performance during the open periods, the National Museum was able to drawdown significantly less than this, claiming £4,690,000 in the reporting period to support cash flows, of which £1,004,000 will be repayable to the MOD as cash flows permit.

The National Museum undertook a thorough review of its cost base, enabling it to reduce expenditure by £4,893,000 against the previous reporting period, through cessation of non-contractual spend, negotiating reductions in property rents and service charges, suspension or reduction of contractual services and reduction in staff costs. The latter included the National Museum’s operating company, NMRN Operations, making use of the Coronavirus Job Retention (Furlough) Scheme, placing the majority of its eligible staff on “furlough leave” from 1 April 2020, leaving just 30% of its staff working on revenue activities from that date, falling to 11% by 31 May 2020. Furloughed staff voluntarily took a pay reduction during this period, receiving 80% of their previous contractual salaries. The scheme has been used in response to the various lockdowns throughout the reporting period.

The National Museum undertook quick actions to put arrangements in place to reopen its sites safely in accordance with the government’s guidance, returning staff to the business under the flexible furlough scheme. Some attractions, such as Action Stations and the Horrible Histories® Pirates exhibition, were unable to reopen in accordance with Covid19 secure requirements to manage the risk of transmission. It was not possible to reopen HMS Caroline in Belfast, owing to inability to reach an appropriate operating and funding agreement with the NI Department for the Economy (DfE), with the original agreement expiring 30 June 2020.

Activities and Achievements

Conservation and Collections

During 2020-21, over 350 offers of groups of material were reviewed by the Museum’s Acquisitions Panel. There were 149 formal acquisitions to our collections from donation, transfer and purchase.

The single most important addition, of international significance, was ‘The Armada Maps’ which are a wonderful, rather beautiful, set of ten ink and watercolour drawings of the progress and defeat of the Spanish Armada, likely to have been made in 1589. They are an exceptional primary source for understanding both the event and its contemporary

Page 7

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

representation. The Maps were offered for public sale for £600,000, but the Waverley Committee blocked their export until October 2020; following a ‘serious expression of interest’ by the National Museum, this block was extended until 9 January 2021. The Museum’s Director of Fundraising led a successful campaign to raise funds which included: public donations of just under £100k; £212k from the National Heritage Memorial Fund (NHMF); and £200k from the Art Fund; with the balance provided through the Museum’s Purchase of Exhibits Fund. Exhibition and other programming by the National Museum as part of these applications is under discussion.

Other important additions to the collections in the period include:

The significant move of collections from the former Royal Marines Museum site was completed in March 2020. Through 2020-21, there has been a major effort by the team to complete this work and decant collections from temporary cages into their permanent storage locations in the new collections centre in Storehouse 12. This now stores key artefacts, medals, archives and photograph collections; a new research room, conservation and photographic studios have been fitted out. This project is now complete.

Visitor Services

In the period 2020-21, NMRN Operations delivered the visitor services for the National Museum. In this heavily disrupted year, the National Museum sold 58,205 tickets to its sites, many of which offer visitors the opportunity to return at no extra cost. We have slightly amended the methodology for the reporting of visits to reflect the new joint ticket offer with Mary Rose Museum and ensure data reflects true engagement with the National Museum’s attractions. Ticket sales generated 73,586 visits (2019-20: 1,725,428 visits) to museums and attractions across the group based on scanned ticket data. This represents a significant reduction in sales and visits in line with the enforced closures of sites in accordance with the Covid-19 restrictions.

The scanning data also provides detailed data on the number of visits to each of the individual attractions which showed that 36% of visits were made to HMS Victory, 20% to the Fleet Air Arm Museum, 13% to the NMRN Portsmouth Galleries, 9% to HMS Warrior, and 4% visits to the National Museum of the Royal Navy Hartlepool (despite only being able to open for a matter of weeks).

A combination of scanned ticket data, issued ticket data collection and monitoring and evaluation surveys and data dives, continue to inform the marketing strategy and admissions targets. External sector intelligence from the Association of Leading Visitor Attractions and Visit Britain has also provided valuable insight in the wake of the Covid19 pandemic.

In terms of digital reach, the National Museum has adopted a new ‘meaningful engagement’ model to measure its digital reach and engagement, which reflects not just views of digital content but meaningful interactions with it. The National Museum sought to maintain a strong digital presence through the period, with its Facebook accounts reaching 4.1 million (2020: 1.3 million) users and had 824.6k engagements, and there were 2 million (2020 1.4 million) Twitter interactions through tweets and had 5.5k engagements. Press, PR and media coverage realised nearly £10,500,000 in Advertising Value Equivalent.

Page 8

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Learning and Access

The learning offer was severely impacted by Covid-19 throughout the period, with the museum sites closure requiring different ways of working and at a significantly reduced capacity. Despite these limitations, 18 formal learning sessions were still delivered to 416 students and 595 participants took part in 33 informal learning sessions. The National Museum also responded by developing online learning resources, which were downloaded 8,328 times.

Volunteers

The National Museum’s team of Volunteers was stood down as sites closed in March 2020, with the exception of virtual volunteering related to the Diving Deep project. A small number of volunteers returned to assist with access to Concorde at the Fleet Air Arm Museum in the Autumn, prior to the second lockdown period. Nevertheless, a total 1,545 hours of volunteer time was generously given to support the museum’s activities.

Exhibitions

Despite the Covid challenges, the National Museum has delivered three principal new exhibitions in 2020-21:

Publications and Scholarship

This has been another difficult period for publications and scholarship, with the team furloughed for a significant period and still occupied with project delivery when on site. Very significant research has, however, been carried out by the

Page 9

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Conservation Team relating to several aspects of the HMS Victory project, and research continues to take place in support of LCT 7074, The Night Hunters (formerly Spitfires of the Seas): The Story of the RN’s Coastal Forces, Diving Deep: HMS Invincible 1744, and the new Victory Gallery. A new Research Policy and Research Strategy will be delivered in the next reporting period.

Charitable Fundraising

The National Museum is committed to fundraising in an honest and transparent way, and relies on the generosity of our donors to fund our work. The National Museum is registered with the Fundraising Regulator and adheres to the Code of Fundraising Practice. We are committed to our fundraising promise, produced to assure donors and potential donors of our accountability and integrity, and which is published on our website https://www.nmrn.org.uk/getinvolved/donor-charter

To maintain the highest standards of fundraising ethics, the Director of Fundraising oversees the National Museum’s fundraising activities and ensures our compliance with the Codes of Fundraising Practice (Fundraising Regulator). The Trustees have overall responsibility and accountability for our fundraising and income generation activities and monitors such activities through a Fundraising Committee.

The National Museum employs an in-house fundraising team and did not use any non-directly employed fundraisers, nor any commercial participators to carry out any fundraising activities during the period. In 2020-21, the National Museum did not receive any complaints about its fundraising activities or practices and no complaints were made to the Fundraising Regulator.

Over the coming period, we aim to work with the Telephone, Mail and Fundraising Preference Services to improve our processes around proactively identifying those who choose not to receive specific types of communication. We will also seek to improve our procedures for dealing with people in vulnerable circumstances and we will make this freely available on our website. We will also join the Data and Marketing Association and work in accordance with the associated code.

Trading

The National Museum of the Royal Navy Trading operates across all of the National Museum’s sites as a single trading entity, delivering non-primary purpose commercial activities such as cafés, retail, guidebooks, weddings, corporate and private hires, and wholesale and brand licensing. It has delivered very limited trading during the period as a result of the Covid-19 pandemic. In 2020-21, the company turned over £183,000 (2019-20: £2,920,000) generating a loss after tax of £161,000 (2019-20: loss £53,000).

Post balance sheet events

Post balance sheet events are disclosed in note 30 to the accounts. There are no post balance sheet events.

Plans for Future Periods

Responding to the Covid-19 Pandemic

The National Museum continues to respond to government advice, adopting appropriate working practices to ensure that it remains able to operate its sites safely, whilst also regenerating income potential. The National Museum’s operating company, NMRN Operations, continued to make appropriate use of the Coronavirus Job Retention Scheme in 2021-22 until the scheme ended on 30 September 2021. Closed attractions, such as Action Stations and the Horrible Histories® Pirates exhibition have reopened as and when it was safe operationally and commercially viable to do so.

The key focus for the National Museum group throughout 2021-22 and into 2022-23 will be on financial stability through cost management and replacement of the income lost as a result of the pandemic. It is anticipated that the National Museum’s self-generated income streams and visitor markets will continue to be severely impacted by ongoing and

Page 10

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

future Covid restrictions, and in particular, overseas and education visitor markets cannot be expected to fully recover before 2023-24.

Meanwhile, the National Museum continues to engage with Navy Command to ensure it has sufficient funds to maintain its operations into 2022-23, and has shared its budget projections based on its market recovery assumptions, and although there remains uncertainty over the level of funding to be provided (as is the case for all government bodies at this stage in the funding cycle), the Trustees and Directors take comfort from the legislative foundation within the National Heritage Act 1983 that underpins the group’s operations and the Navy Command’s reassurances that it will work with the National Museum of the Royal Navy to ensure that the Museum remains a going concern and can deliver its strategy. The National Museum also continues its dialogue with the NI Department for the Economy (DfE) to ensure that the debts outstanding in respect of the operating and maintenance costs of HMS Caroline can be recovered and to develop an appropriate agreement to secure the ship’s future as a museum and visitor attraction in Belfast.

In the event that no further additional grant in aid funding was made available to the National Museum of the Royal Navy beyond 31 March 2022, and the charitable group was unable to achieve its self-generated income targets, it would seek to further reduce its operating costs through cessation of its operations, and would ultimately be obliged to cease trading. The Trustees and Directors are, however, content that based on the assurances provided to the National Museum by its sponsor, the Royal Navy, grant in aid funding will be made available, the going concern basis continues to apply, and the impact of the COVID-19 pandemic does not create a material uncertainty around going concern to the charity.

Major Projects

The following major projects will be the focus of significant work for the National Museum, with impacts to be shared in future reporting periods:

Page 11

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

generous donation has allowed final additional audio-visual content to be commissioned and the exhibition named as ‘The Robert Hichens Memorial Exhibition’.

To create a world class new attraction revealing the story of Commandos from their origins in Britain’s darkest days of 1940 to the Future Commando Force. Within Boathouse 6, our dynamic experience will take visitors into the physical, mental and technical reality of Commando selection and training. It will reveal the drama of the Royal Marines Commandos and Combined Operations and Royal Navy Special Warfare in the past, present and future. Through cutting edge design which gets people hands-on and showcases military innovation and creativity we will provide an inspirational, unforgettable experience.

To deliver a full upgrade of the Aircraft Carrier Experience at the Fleet Air Arm Museum. The new experience will immerse our visitors in the sights, sounds and smells of carrier flight and in the complexity of carrier operations. It will connect the heyday of jet aviation to the operations and deployment of the Queen Elizabeth Class carriers and F35 aircraft which will be the heart of the Royal Navy from 2021 onwards. The upgrade will create a new immersive experience which blends the best of digital technology with the scale of a carrier flight deck and our incredible aircraft. It will showcase the Fleet Air Arm’s ‘Air Power from the Sea’ in past, present and future. It will provide an inspirational, unforgettable visitor experience.

Page 12

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Financial Review

Statement of Financial Activities for the Year Ended 31 March 2021

Total incoming resources for the National Museum in 2020-21 amounted to £16,985,000 (2019-20 restated: £23,231,000) and relates largely to Grant in Aid, payments under the Coronavirus Job Retention Scheme and donations, with a significant reduction in admissions income and trading income. The decrease in incoming resources from the previous reporting period resulted directly from the impact of Covid-19 on the National Museum’s ability to trade. This included a decrease in restricted grants funds, donations and legacies to NMRN Operations, with £5,121,000 received to support major projects including LCT7074, HMS Victory and the Sir Donald Gosling Gallery redevelopment, and our plans for a new Royal Marines Museum (2019-20 restated: £8,008,000).

The National Museum received £7,198,000 revenue grant in aid for the year (2019-20: £3,375,000), plus £128,000 capital grant in aid (2019-20: £126,000) for the purchase of exhibits. This uplift reflected the generous support from the Royal Navy to offset the impact of Covid-19 on the National Museum’s ability to trade.

Legacy donations totalling £16,000 (2019-20: restated £1,414,000) were received by NMRN Operations, the Fleet Air Arm Museum and the Royal Marines Museum.

Admissions income for 2020-21 at £1,170,000 (2019-20: £5,584,000) showed a 79% decrease, reflecting the loss of over 80% of trading days in the period.

Income generated by the trading company on non-charitable activities was £183,000 (2019-20: £2,920,000), which after expenditure of £344,000 (2019-20: £2,973,000) resulted in an operating deficit of £161,000 for the year arising from the impact of the pandemic on all trading activities.

Total resources expended for 2020-21 amounted to £13,792,000 (2019-20: £18,685,000) with the reduction in costs reflecting the cost-savings measures taken in response to the pandemic. The majority of costs related to core charitable activities and included expenditure of £3,685,000 on projects (2019-20 £4,814,000). Expenditure on fundraising and publicity decreased to £805,000 (2019-20: £935,000).

A total of £735,000, made up from £709,000 from restricted funds (including linked charities) and £26,000 from endowment funds, was transferred to unrestricted funds as assets capitalised and where there were no restrictions on the use of those assets.

After adjustment for net gains on investments totalling £6,413,000 and losses on revaluation of fixed assets of £3,602,000, the net movement in funds for the year was an increase of £6,004,000 (2019-20 restated: an increase of £3,559,000). The total funds carried forward at 31 March 2021 was £188,534,000 (31 March 2020 restated: £182,530,000).

Balance Sheet

The net assets as at 31 March 2021 amounted to £188,534,000 (31 March 2020 restated: £182,530,000).

The value of heritage assets (over the capitalisation threshold and accessioned since 1 April 2000) represents 55% of the National Museum’s net assets at £104,743,000. Movements in fixed assets are shown in notes 15-16 to the accounts. Fixed assets acquired by either purchase or donation, with a value of £2,500 and over are capitalised in accordance with the accounting policies set out in note 1.9. Heritage assets added to the collection are included in the accounts at acquisition cost or on the basis of internalvaluations estimated by the curatorial staff and determined bytheir experience and judgement as set out in note 1.10.

The National Museum held £6,632,000 cash in bank and in hand at 31 March 2021 (2020: £3,696,000).

Page 13

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Reserves

The Trustees regularly monitor the levels of the Group's reserves and seek to take correction action as necessary. As at 31 March 2021, the company’s unrestricted funds (excluding the revaluation reserve) stood at £nil (31 March 2020: £11,000).

As at 31 March 2021, the level of the company's free reserves (defined as net current assets attributable to unrestricted reserves) stood at £1,000 (31 March 2020: £11,000). Under the Group’s governance structure, the company receives no funding other than Grant in Aid from the MOD. This grant is used to defray the company’s own expenses before granting the balance onto its operating subsidiary, NMRN Operations, and subsidiary trusts on the basis of need. Under the terms of the financial framework (agreed 6 December 2019), the company is only permitted to carry over a maximum 2% of the total Grant in Aid into the next financial year and any carry forward may be taken into account in reducing the following year’s Grant in Aid. If not carried forward, the balance of Grant in Aid not spent must be repaid to the MOD. Based on the year’s Grant in Aid of £7,198,000 the maximum carry forward is £143,960. Under the terms of the agreement with Navy Command for additional Grant in Aid funding, however, it is not possible to build free reserves, with any surplus reducing the drawdown of Grant in Aid funding.

The Group’s free reserves (including designated funds) stood at £5,258,000 (31 March 2020 restated: £2,209,000). As nearly the entire Group’s operating costs now flow through NMRN Operations, the Group policy is that sufficient free reserves are accumulated within the charitable subsidiary NMRN Operations to provide three months’ operating expenditure for the greatest potential area of exposure (Portsmouth Historic Dockyard, including the Gosport sites). There is no need to accumulate additional free reserves in either the company or the subsidiary trusts and any such reserves held will be appropriately used, as approved by the Board, for the furtherance of the trusts’ charitable objects. The free reserves held by NMRN Operations (including within its trading subsidiary, National Museum of the Royal Navy Trading) stood at £1,792,000, of which £1,266,000 was cash in the bank, and are insufficient to meet long-term development needs and there are risks associated with unanticipated short-term cash demands; the impact of the Covid19 pandemic clearly exposed this.

The additional Grant In Aid received for 2021-22 will support NMRN Operation’s cash position, but the nature of the funding agreement, based on need, will not permit the free reserves to be built up and maintained to eliminate the requirement for further financial support in 2022-23. As such, the Trustees will continue to work with Navy Command to bid for additional funding to support the Group’s financial performance in 2022-23. The free reserves position will need to be rebalanced once a normal pattern of business has resumed, at which point the Trustees will seek to improve the free reserves position in NMRN Operations in accordance with the reserves policy through the delivery of a budget each year that will deliver a modest surplus.

The company holds a number of restricted funds with a total net current asset value of £1,182,000 (31 March 2020: £1,182,000). These restricted funds relate to the linked charity, Royal Naval Museum, and to major capital projects (HMS Caroline and the new Royal Marines Museum).

The net current assets in the Group’s restricted funds stood at £12,908,000 (31 March 2020 restated: £11,930,000). The restricted funds will reduce in future years with increasing expenditure on the preservation of HMS Victory, HMS Caroline, HMS Warrior, LCT 7074, RML 497, the new Royal Marines Museum and depreciation on capital expenditure. The endowment funds surplus should remain on the Balance Sheet for the foreseeable future, as will the gifts of the Ships, as the Ships are held as heritage assets and not depreciated.

Investment Policy

The National Museum’s investment policy seeks to produce the best possible financial return within an acceptable level of risk. The majority of the National Museum’s investment activity is undertaken by its subsidiary the HMS Victory Preservation Company which holds the most significant investment funds. The company’s investment objective is to

Page 14

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

generate a total return of inflation plus 3% per annum over the long term. This was reviewed in January 2020 and the objective amended to generate a total return of CPI plus 4% per annum over the long term. Returns from these funds are required to maintain HMS Victory in perpetuity and it is therefore essential to invest with a long-term perspective. If achieved, the charitable company should be able to maintain the real value of its investment portfolio whilst funding annual expenditure for the maintenance and repair on the ship in the region of 3% of its capital per annum.

The company adopts a total return approach to investment, generating the investment return from income and capital gains and losses. It is expected that if in any one year the total return is insufficient to fund the ongoing expenditure, in the long term the value of the portfolio will still be maintained in accordance with the investment objective stated above. Capital gains may be used to provide cash for the objective provided that the original investment has been preserved.

The key risk to the long-term achievement of the investment objective is inflation and the assets are invested accordingly. The Trustees understand that this will mean that investments are likely to be predominantly invested in equities, where dividends can be expected to grow, and that capital value will fluctuate. The company’s attitude to risk is therefore described as progressive.

The assets can be invested widely and are expected to be diversified by asset class, by manager and by security. Asset classes can include cash, bonds, equities, property funds, hedge funds, structured products, private equity, commodities and any other asset class that is deemed suitable for the company. The Trustees do not wish to invest in property directly. The HMS Victory Investment Committee is charged with agreeing a suitable asset allocation framework with two appointed professional fund managers.

For the year ending 31 March 2021, income from investments totalled £383,000 with management fees of £147,000 and unrealised gains of £6,413,000, resulting from market volatility in response to the Covid-19 pandemic, representing growth of 10.6% (against 12-month CPI of 1%).

Page 15

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Accountability Report

Trustees’ Report and Governance Statement

This report sets out the arrangements for the governance of the National Museum of the Royal Navy, including the Board and committee structure for the Trustees. The Trustees, who are also the Members and Directors of the National Museum of the Royal Navy for the purposes of company law and who served during the year and up to the date of this report are set out on page 3. Overall control of the National Museum is the responsibility of the Board of Trustees.

The Trustees have had due regard to the guidance issued by the Charity Commission on public benefit. A core principle of the National Museum’s strategy is to initiate, develop and extend regional partnerships and affiliations thereby allowing the story of the Royal Navy to be told across the UK. Through its charitable objects, the National Museum seeks to promote the education of the general public about the history, deeds and traditions of the Royal Navy and encourages the public to commemorate and recognise the sacrifice of those members of the Naval Service who have died on active service. The National Museum operates fee-paying attractions and endeavours to ensure that ticket prices are set at a reasonable level, including several types of concessions. The National Museum offers workshops to schoolchildren in support of the National Curriculum, operates community outreach programmes in the local areas for children, their parents and carers, and hosts foreign language school pupils. The National Museum’s activities are supported by a team of around 366 volunteers who deliver an important contribution through a variety of tasks across the museum.

This report demonstrates how the system of governance and internal control is maintained within the National Museum and how the major risks to which the company and group is exposed, as identified by the Trustees, have been reviewed and systems have been established to mitigate those risks.

The Governance Framework

The National Museum of the Royal Navy is a company limited by guarantee (company number: 06699696) and a charity registered with the Charity Commission (registration number: 1126283). It is governed by its Articles of Association dated September 2018, which incorporate its charitable objects, the powers of the company and provides for the appointment and reappointment of Directors. Trustees are appointed in accordance with the Charity Commission guidance ‘Finding new trustees: what charities need to know’ and appointments are guided by the principles of the Cabinet Office guidelines ‘Governance Code on Public Appointments’.

The National Museum of the Royal Navy is also a Non-Departmental Public body, sponsored by the Ministry of Defence, and as such is obliged to comply with HM Treasury financial reporting requirements. The Financial Framework, which defines the arrangements between the National Museum and its sponsor, was updated in light of the department’s 2016 Service Museums review and agreed in December 2019.

The Trustees ensure the distinct legal responsibilities and charitable objectives of the company are fulfilled within an overall policy and strategy framework. The day-to-day operation of the company within that framework is delegated to the Director General and Accounting Officer and to the Executive Directors. The Board of Trustees meets periodically through the year to set the long-term strategic objectives of the Group, agree the Corporate Priorities and review performance against previous objectives set.

The Trustees of the National Museum aim to stay abreast of good governance and practice and have well-developed plans to ensure compliance with the Charity Governance Code. During 2018, the Board conducted an evaluation of its performance, composition, effectiveness, skills and diversity. The Board has taken steps to improve its governance through the simplification of its group structure to improve transparency and effectiveness of delivery.

Board decisions are informed by appropriately detailed management reports, which have passed through the relevant subsidiary boards or committees as appropriate, and which in turn have the specific membership and skill sets to enable close scrutiny and challenge before reaching the Board. The flow of information, its quality and accuracy and the process of review is considered sufficient for the Board to ensure that it fulfils its responsibilities effectively.

Page 16

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

A full formal induction process is in place for new Trustees and committee members, which combines all the necessary background reading material, including items such as: the Articles of Association; committees’ terms of reference; minutes of recent meetings; the Charity Commission publication “The Essential Trustee: what you need to know”; the National Museum’s strategy and corporate plan; and the Museum Association publication “Code of Ethics for Trustees”. New Trustees and committee members are encouraged to visit the National Museum’s sites to meet key members of staff, see the collection and to discuss current issues and projects. Tailored training may also be arranged. Recent appointees continue to confirm their satisfaction with this process.

Each Board of Trustees of the respective subsidiary companies remains responsible for their governance issues, which are clearly set out between the National Museum and its constituent members. The NMRN Operations Board is charged with responsibility for operational delivery of the Corporate Priorities to meet the National Museum’s strategic objectives. The Chair of the NMRN Operations Board is invited to attend the main Board of Trustees and to report on progress.

In addition to the Board of Trustees, there are several committees covering the key areas of operations. The majority of Board decisions are only taken after the appropriate committee has met and discussed the issue and made their recommendations. The committees of the Board include:

Audit and Governance Committee – with delegated responsibility on behalf of the Board of Trustees for overseeing all auditing, risk management and governance aspects of the Group, reporting back to the Board when necessary.

Nomination and Remuneration Committee - responsible for leading the process for Board appointments and for identifying and nominating for Board approval, candidates for appointment to the Board and its constituent Committees; and determining and making recommendations to the Board on the performance and remuneration of the National Museum’s Director General and Executive Directors, including the award of personal performance related bonuses.

– Collections, Research, Learning and Access Committee responsible for articulation of the Acquisitions, Disposals and Loans Policy for the National Museum, the Collections Strategy and all Collections Management, Conservation, Access and Research policies and priorities.

– Fundraising Committee with responsibility to lead on all aspects of fundraising for the National Museum, constructing a strategy that supports the agreed Corporate Priorities of the National Museum in terms of its scale, scope and reach and to coordinate the approach to the private, public and corporate sectors. The Fundraising Regulator requires Trustees to receive a report annually on the operation of the fundraising function, especially in relation to complaints received through the Regulator regarding the National Museum. No complaints have been made. The Trustees in turn are required to monitor the approach undertaken to fundraising, which is set out in reports to the Committee and Board.

Day to day operation of the National Museum is the responsibility of the Director General who is appointed by the Trustees and who is also the Accounting Officer of the organisation. The Director General attends the meetings of the main Board and subsidiaries and also attends the National Museum’s committees.

A register of Trustees’, Committee Members’ and Executives’ interests is maintained, requiring declaration of any interest, pecuniary or otherwise, in any matter being considered by the Board, subsidiary board or the committees.

Page 17

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Membership and attendance of key meetings Board of
Trustees		 Audit and
Governance
Committee		 Nomination and
Remuneration
Committee		 Collections
Research Learning
and Access		 Fundraising
Committee
Total number of meetings in the period: 5 4 1 3 4
Chairman:
Admiral Sir PhillipJones GCB ADC DL 5/5 - - - -
Trustees:
Mrs Emma Allen - 2/4 - - -
Mr Michael Bedingfield 5/5 - 1/1 - 4/4
Rear Admiral Mark Anderson 2/2 - - - -
Miss Katherine Biggs 2/2 - - 1/1 -
Andrew Burnett 2/2 2/2 - 2/2 -
Mr PhillipDolling 2/2 - - - 2/2
Mr Mike Gambazzi 3/5 4/4 1/1 - -
Ms Helen Jackson 5/5 - - - 4/4
Vice Admiral Sir Adrian Johns KCB CBE KStJ ADC 1/1 - - - -
Councillor Donna Jones 5/5 - 1/1 - -
Major General JeffreyMason 4/5 - - - -
Mrs MaryMontagu-Scott 5/5 - 1/1 - 4/4
Rear Admiral Jon Pentreath 2/2 - - - -
Mr Mike Scott 2/2 - 1/1 - -
Mrs Alison Start 2/2 - - - 2/2
Mr Tim Schadla-Hall 5/5 - - 1/1 -
Mr Gavin Whitter 5/5 4/4 - - -
Dr Caroline Williams 2/3 - - - -
Mr Charles Wilson 1/1 - - - -
Non-Trustees:
Mr Stephen Bradley - - - - 4/4
Ms EmilyClarke - - - 3/3 -
Vice Admiral Sir AnthonyDymock KBE CB FRSA - - - - 4/4
Mrs Sarah Dhanjal - - - 2/3 -
Ms Sarah Humphrey - 4/4 - - -
Ms Jackie Keily - - - 3/3 -
Professor Andrew Lambert - - - 3/3 -
Ms Tiva Montalbano - - - 3/3 -
Mr Alex Patterson 2/3
Dr Amara Thornton - - - 3/3 -
Mr RoyStephenson - - - 2/3 -

Personal data loss

The National Museum identified one personal data related incident that required reporting to the Information Commissioners Office (ICO) during 2020-21. The matter was also reported as a Serious Incident to the Charity Commission. An incident is defined as a loss, unauthorised disclosure or insecure disposal of personal data. Protected personal data is information which links an identifiable living person with information about them which, if released would put the individual at significant risk of harm or distress; the definition includes sources of information that because of the nature of the individuals or the nature, sources or extent of the information, is treated as protected personal data by the company. The incident involved a ransomware attack against Blackbaud, a previous software supplier, where the museum’s database has been copied and encrypted. The data was released back to Blackbaud and assurances were given that no copies had been retained. The Museum’s relationship with this supplier ended in 2014. No action was taken against the National Museum by the ICO.

Page 18

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

System of internal control

The system of internal control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives. It can therefore only provide reasonable and not absolute assurance of effectiveness. The system of internal control is based on an ongoing process designed to identify and prioritise the risks to the achievement of the National Museum's policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically.

The review of the effectiveness of the system of internal controls is exercised through the Audit and Governance Committee. This Committee is chaired by a Trustee of the Board and draws expertise from other Trustees and committee members, with the Director General and the Executive Director of Resources in attendance, and other members of the executive attending as required. The Committee also has access to the independent accountants, internal and external auditors engaged for all companies within the Group, providing review and oversight of the financial control systems and the creation of the companies’ and trusts’ consolidated group accounts. The Committee reports directly to the Board of Trustees.

Internal Audit

The National Museum has an independent internal audit function, provided through RSM Risk Assurance Services LLP (appointed in November 2019), which undertakes a rolling programme of risk based audit activity across the Group, agreed at the start of each financial year with the Accounting Officer and the Audit and Governance Committee. Internal audit provides assurance to management and the Audit and Governance Committee on the adequacy of internal control arrangements, including risk management and governance. The internal audit conforms to the Public Sector Internal Audit Standards.

RSM Risk Assurance Services LLP were appointed following a joint tender exercise with our sister Service Museums, the National Army Museum and the Royal Airforce Museum, to support the sharing of best practice and economies of scale, including an agreed annual thematic review across each of the museums.

In their annual report to the Audit and Governance Committee for the year ended 31 March 2021, the internal auditor’s opinion was that they were able to provide moderate assurance on the governance, risk management and control framework and the mitigating controls over the risk to delivery of objectives. In the auditor’s opinion, some improvements were required to enhance the adequacy and effectiveness of governance, risk management and control. There were no issues resulting from their work that the auditor considered should be referenced in the annual governance statement. The internal audit work for 2020-21 had been undertaken through the substantial operational disruptions caused by the Covid-19 pandemic. In undertaking the audit work, they recognised that there had been a significant impact on both the operations of the organisation and its risk profile, and advised the annual opinion should be read in this context. Planned internal audit work for 2020-21 had been subject to some delay and cancellation. The auditor was, however, of the view that sufficient internal audit coverage has been performed to allow the provision of the annual Head of Internal Audit Opinion.

External Audit

The external auditor for the National Museum of the Royal Navy is the Comptroller and Auditor General, with the audit conducted by Grant Thornton UK LLP on behalf of the National Audit Office. The external audit of the subsidiary companies is conducted by PKF Littlejohn LLP. The Audit and Governance Committee receives and reviews all external auditor reports.

Risk Management

For the year ended 31 March 2021, a comprehensive suite of uniformly presented Strategic, Operational and Project Risk Registers have been in place, which identify the risks relevant to the successful continuation of the company and group's current operations and its future development.

Page 19

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Risk Management is incorporated into the National Museum’s corporate planning, with the risk of failure and severity of the failure being applied to key activities. The Audit and Governance Committee oversees the development and implementation of the National Museum’s risk management strategy and framework.

The day-to-day management of risk is exercised through the National Museum's Executive Board, which regularly reviews the National Museum's principal activities and events, with associated risks. The Audit and Governance Committee, subsidiary boards and the Board of Trustees receive reports to each meeting on the principal risks and the steps being taken to manage them effectively, including risks relating to new project proposals.

The most significant risk faced by the National Museum centres around its self-generated income streams. The government’s response to control the Covid-19 pandemic resulted in an extended period of full site closure to visitors and reduced operating capacity upon reopening, significantly affecting these income streams and placing the National Museum under immense financial pressure and threatening its very existence. Additional grant in aid funding from the Royal Navy has been essential to ensure the National Museum’s survival throughout 2020-21 and beyond, until a stable trading and operating base can be resumed. The National Museum has not been complacent during this period, seeking to minimise costs and develop strategies to strengthen brand loyalty and ensure appropriate pricing to balance visitor attraction with revenue generation and to develop the commercial offering. Funding shortfalls impact the ability of the National Museum to adequately fund the conservation and maintenance of its historic ships and collections and prioritised conservation management plans are being put in place to understand and manage this risk. The National Museum continues to review and consolidate its governance and operating structure to ensure it remains fit for purpose, with sound control of operating costs within a sustainable but flexible staffing model for future years. Funding and effective control of major capital projects will always present a risk to the National Museum and is mitigated through the establishment of a robust project management framework, appropriate governance and oversight for all major projects, and cash flow forecasting that reflects operational and major project demands and fundraising requirements.

Assurance Statement by the Audit and Governance Committee

The Audit and Governance Committee is reasonably confident that:

Based on the above, the Board and Accounting Officer of the National Museum of the Royal Navy believe that the organisation complies with the Corporate Governance in Central Government: Code of Good Practice 2011, to the extent that it is relevant to the company and as far as the Charities Act 2011 and Companies Act 2006 permit.

In our view, the information received was sufficient to enable us to review and confirm the effectiveness of the National Museum of the Royal Navy's system of internal control in accordance with Treasury guidance and recommendations. The system of internal control has been in place in the National Museum of the Royal Navy for the year ended 31 March 2021 and up to the date of approval of the annual report and accounts, and accords with Treasury guidance.

Gavin Whitter Chair of the Audit and Governance Committee on behalf of the Board of Trustees

Professor Dominic Tweddle Director General and Accounting Officer

Date: 20[th ] January 2022 Date: 20[th ] January 2022

Page 20

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Statement of Board of Trustees’ and Accounting Officer’s responsibilities

The Board of Trustees of the National Museum of the Royal Navy is required to prepare financial statements for each financial year in accordance with the Companies Act 2006, which give a true and fair view of the statement of affairs of the parent and the group and of the net expenditure of the group for that year.

The Secretary of State for the Ministry of Defence (with the consent of HM Treasury) has also directed the Accounting Officer to prepare for each financial year a statement of accounts in the form, and on the basis, set out in the Accounts Direction.

The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the National Museum of the Royal Navy and of its income and expenditure, Balance Sheet and cash flows for the financial year.

In preparing the accounts, the Trustees and Accounting Officer are required to comply with the requirements of FRS

102 and the Accounting and Reporting by Charities: Statement of Recommended Practice (FRS 102) and in particular to:

The Principal Accounting Officer has appointed the Chief Executive (the ‘Director General’) as Accounting Officer of the National Museum of the Royal Navy. The responsibilities of an Accounting Officer, including responsibility for the propriety and regularity of the public finances for which the Accounting Officer is answerable, for keeping proper records and for safeguarding the National Museum of the Royal Navy’s assets, are set out in Managing Public Money published by the HM Treasury.

In preparing the accounts, the Accounting Officer is also required to comply with the requirements of the Government Financial Reporting Manual and in particular to:

The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the parent and group and enable them to ensure that the financial statements comply with applicable law and the provision of the National Museum of the Royal Navy’s constitution. They are also responsible for safeguarding the assets of the parent and group and hence for taking reasonable steps for the prevention and detection of fraud and other non-compliance with laws and regulations. The Trustees are also responsible for the maintenance and integrity of the corporate and financial information included on the National Museum of the Royal Navy’s website.

Admiral Sir Philip Jones Chair on behalf of the Board of Trustees Date: 20[th ] January 2022

Professor Dominic Tweddle Director General and Accounting Officer Date: 20[th ] January 2022

Page 21

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Remuneration and Staff Report

for the year ended 31 March 2021

This report has been prepared in accordance with the Government Financial Reporting Manual, which requires the disclosure of certain information about directors’ remuneration, where “directors” is interpreted to mean those persons in senior positions having authority or responsibility for directing or controlling the major activities of the National Museum of the Royal Navy.

Remuneration Policy

The Nomination and Remuneration Committee meets annually to consider the pay award for the Director General and the Executive Directors. The Director General is entitled to a non-consolidated performance related payment, based on performance objectives set by the Committee annually against the Objectives and Key Priorities in the Corporate Plan and personal contribution towards the achievement of key areas of work. Non-consolidated payments are based on the previous financial year’s performance and may also be awarded to the Executive Directors based on exceptional performance against objectives set.

Staff salaries, including salaries for Directors and Deputy Executive Directors, are set within a new “Salary Grading Structure and Pay Progression Scheme” that was introduced on 29 February 2020 and backdated to 1 April 2019. The new scheme and pay awards received Ministerial approval on 15 January 2020. The Structure introduced a single pay scale consisting of 50 pay points across 10 pay grades. The new pay scale was set with the lowest pay point at £9.00 per hour (£17,550 FTE per annum) for all staff regardless of their age. The annual “cost of living” review to be undertaken in November each year which will consider affordability of UK Living Wage minimum pay recommendations, with any recommendations arising from the review subject to Board and Ministerial approval before implementation, was delayed as a result of the pandemic and the numbers of staff on furlough. Any pay progression awards will be effective from 1 November each year, with the first approved awards to be effective from 1 November 2021 (subject to Board and Ministerial approval before implementation).

Jobs were matched, under the National Museum’s job grading scheme, to a pay grade according to a range of factors, including: professional knowledge and experience; management of resources (finance, people, physical assets); responsibility for information systems; problem solving and decision making; planning and organising; policy and service development; freedom to act; communication and influence; and, teamwork. Staff have been paid at the closest appropriate pay point within this pay grade. The new Pay Progression Scheme enables staff to move up through the pay points within their pay grade as they demonstrate that they meet agreed performance criteria.

None of the directors received any non-cash benefits (benefits in kind). Pension benefits are provided through a defined contribution group pension scheme at the rate of 10% or 6% of salary (see note 1.17). None of the directors is a member of the Principal Civil Service Pensions Scheme (PCSPS).

The Director General and the Executive Directors have permanent contracts of employment with 6 months’ notice. The Deputy Executive Directors and Directors have permanent contracts of employment with 3 months’ notice.

Page 22

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Total remuneration table (subject to audit):

Employee Salary
£’000		 Salary
£’000		 Non-consolidated
payments
£’000		 Non-consolidated
payments
£’000		 Pension benefits
£’000		 Pension benefits
£’000		 Total
£’000		 Total
£’000
2020-21 2019-20
2020-21		 2019-20 2020-21 2019-20 2020-21 2019-20
D Tweddle,
Director General		 125-130 125-130 Nil Nil 13 13 135-140 135-140
S Dennis, Executive
Director of Resources		 90-95 90-95 Nil Nil 9 9 100-105 100-105
J Rawlinson,
Executive Director of
Visitor Experience		 Nil 50-551 Nil Nil Nil 5 Nil 55-60

M Sheldon,
Executive Director of
Heritage		 75-80 75-80 Nil Nil 8 8 85-90 85-90
V Turner, Deputy
Executive Director of
Resources		 60-65 65-70 Nil Nil 4 4 65-70 65-70
Andrew Baines,
Deputy Executive
Director of Heritage		 60-65 65-70 0-5 0-5 4 4 70-75 75-80
H McKenna-Aspell,
Director of
Fundraising		 70-75 15-202 Nil Nil 4 1 75-80 15-20
B Hubbard, Director
of Marketing		 60-65 5-103 Nil Nil 4 1 60-65 10-15
T Ash, Partnerships
Director		 40-454 55-604 Nil Nil 3 3 40-45 60-65

1J Rawlinson to 30 November 2019 – full year equivalent £80-85k

2H McKenna-Aspell from 6 January 2020 – full year equivalent £70-75k

3B Hubbard from 10 February 2020 – full year equivalent £65-70k

4T Ash 0.8FTE from 1 November 2019 to 31 March 2020 (FTE £60-65k). Furlough, including flexible furlough from 1 April 2020 to 31 October 2020, resulted in pay below 0.8 FTE full year salary (FTE £60-65k). Employed to 31 March 2021.

Median Pay Disclosure (subject to audit)

Reporting bodies are required to disclose the relationship between the remuneration of the highest paid director in their organisation and the median (mid-point) remuneration of the organisation’s workforce. The banded remuneration of the highest paid director in 2020-21 (the Director General) was £125-130k (2020: £125-130k). This was 6.33 times (2020: 5.60) the median remuneration of the workforce, which was £20,140 (2020: £22,785). In 2020-21, no employees (201920: Nil) received remuneration in excess of the highest paid executive director. Excluding the highest paid director, remuneration ranged from £14,040 to £90,000 (2020: £17,550 to £90,000).

The variation of both the remuneration ratio and median pay on the previous year arises from the significant number of staff (66 post holders) furloughed or flexibly furloughed under the Coronavirus Job Retention Scheme on the reference

Page 23

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

date and who had voluntarily accepted a change in terms and conditions to reduce pay by 20% during the furlough period.

Staff costs for the National Museum Group year total £5,823,000 (2019-20: £7,392,000). Further details on employee costs can be found in note 11 to the financial statements.

Sickness absence

Periods of sickness absence are recorded in full days. The average number of days of sickness absence for 2020-21 was 0.89 per employee (2019-20: 2.3 per employee) excluding days lost due to long-term sickness absence. This is due to fewer staff working as a result of the impact of the Coronavirus pandemic with up to 80% of staff being placed on furlough during periods of the year.

Exit packages table - reporting civil service and other compensation schemes (subject to audit)

Exit package cost band Number of compulsory
redundancies		 Number of other
departures agreed		 Total number of exit
packages by cost band
<£10,000 18 Nil 18
£10,000-£25,000 4 Nil 4
Total number of exitpackages 22 Nil 22
Total resource cost/£ 129,692 Nil 129,692

Exit costs are accounted for in full in the year the employee was confirmed redundant. All compensation was paid as statutory (capped) redundancy plus pay in lieu of notice.

Other staff costs

Further details relating to the National Museum’s other staff costs can be found in note 11 to the financial statements.

Equality, Diversity and Access

The National Museum is committed to providing a working environment in which all workers are able to realise their full potential and contribute to the Museum’s success, ensuring all individuals will be treated in a fair and equal manner and in accordance with the law regardless of gender, marital status, race, religion, colour, age, disability or sexual orientation. The National Museum takes all reasonable steps to provide a work environment in which all workers are treated with dignity and respect and that is free of harassment.

Employee Consultation and Involvement

The Director General and the Executive Directors consult with staff through project-focused staff consultation groups, set up to encourage increased levels of communication and consultation across the whole of the National Museum and establishing a delivery-focused culture of working, exchanging views and ideas, discussing problems and planning for the future.

Consultation and involvement with staff is also maintained through various forums including the Safety, Health, Environment and Quality Committee, regular directorate and team meetings, the National Museum’s intranet “Ahoy! Workplace”, and the performance appraisal and “check in” system.

Page 24

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Trade Union facility time report 2020-21 2019-20
Relevant union officials Nil Nil
Percentage of time spent on facilitytime Nil Nil
Percentage ofpaybill spent on facilitytime 0% 0%
Paid trade union activities Nil Nil

Page 25

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

Parliamentary accountability and audit report

All expenditure is regular and has been applied as intended by donors and the National Museum’s sponsor body. There are no contingent liabilities, gifts, fees, charges or losses and special payments requiring further disclosure that have not been reported elsewhere in these financial statements. This paragraph is subject to audit.

Expenditure trends over the past five years are shown below.

----- Start of picture text -----
25
23
21
19
17
15
13
2016-17 2017-18 2018-19 2019-20 2020-21
Financial period
Expenditure/ £millions
----- End of picture text -----

The increase of expenditure to the peak in 2017-18 was a result of the growth and expansion of the National Museum of the Royal Navy as it pursued its strategy to increase its scale, scope and reach. During the five-year period, the National Museum has successfully delivered a number of significant capital projects, enabling it to increase its visitor numbers, reaching a peak of 1.87 million visits in 2018-19, dropping back to just 74 thousand visits in 2020-21 as the Covid-19 pandemic took hold.

Grant in Aid received from the sponsor body had remained broadly static in cash terms up to 2019-20 at £3,501,000 (including purchase of exhibits grant) and the National Museum’s growth had been funded through self-generated income, grants and donations. Additional Grant in Aid of £3,825,000 was awarded in 2020-21 to replace income lost as a direct result of the pandemic. At the same time, the National Museum undertook a rapid cost reduction exercise to ensure it remained a going concern.

Admiral Sir Philip Jones Chair on behalf of the Board of Trustees

Date: 20[th ] January 2022

Professor Dominic Tweddle Director General and Accounting Officer Date: 20[th ] January 2022

Page 26

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

The Certificate and Report of the Comptroller and Auditor General to the Members of the National Museum of the Royal Navy

Opinion on financial statements

I certify that I have audited the financial statements of the National Museum of the Royal Navy for the year ended 31 March 2021 which comprise the group and parent charity Statement of Financial Activities, Balance Sheet, Cash Flow Statement and the related notes, including the significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and the United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

In my opinion the financial statements:

Opinion on regularity

In my opinion, in all material respects the income and expenditure recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

Basis for opinions

I conducted my audit in accordance with International Standards on Auditing (ISAs) (UK), applicable law and Practice Note 10 ‘Audit of Financial Statements of Public Sector Entities in the United Kingdom’. My responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of my report.

Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2019. I have also elected to apply the ethical standards relevant to listed entities. I am independent of the National Museum of the Royal Navy in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK. My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion

Conclusions relating to going concern

In auditing the financial statements, I have concluded that the National Museum of the Royal Navy’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the National Museum of the Royal Navy'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.

My responsibilities and the responsibilities of the Trustees and the Accounting Officer with respect to going concern are described in the relevant sections of this report.

Other Information

The other information comprises information included in the annual report, but does not include the parts of the of the Remuneration Report and Staff Report and the Parliamentary accountability and audit report described in that report as having been audited, the financial statements and my auditor’s report thereon. The Trustees and the Accounting Officer are responsible for the other information. My opinion on the financial statements does not cover the other information and except to the extent otherwise explicitly stated in my report, I do not express any form of assurance conclusion thereon. In connection with my audit

Page 27

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

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

I have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

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

Matters on which I report by exception

In the light of the knowledge and understanding of the National Museum of the Royal Navy and its environment obtained in the course of the audit, I have not identified material misstatements in the Performance Report or the Accountability Report.

I have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires me to report to you if, in our opinion:

Responsibilities of the trustees for the financial statements

As explained more fully in the Statement of Board of Trustees’ and Accounting Officer’s responsibilities, the Trustees are responsible for:

Auditor’s responsibilities for the audit of the financial statements

My responsibility is to audit, certify and report on the financial statements in accordance with applicable law.

My 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 a report that includes my 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 the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Page 28

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

I design procedures in line with my responsibilities, outlined above, to detect material misstatements in respect of noncompliance with laws and regulation, including fraud.

My procedures included the following:

I also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists and significant component audit teams and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Page 29

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696 Charity number: 1126283

A further description of my responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of my report.

In addition, I am required to obtain evidence sufficient to give reasonable assurance that the income and expenditure reported in the financial statements have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them.

I 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 I identify during my audit.

Gareth Davies 21 January 2022 Comptroller and Auditor General

National Audit Office

157-197 Buckingham Palace Road

Victoria

London

SW1W 9SP

Page 30

The National Museum of the Royal Navy

(A company limited by guarantee) Company number: 06699696

Consolidated Statement of financial activities (incorporating the income and expenditure account) for the year ended 31 March 2021

Unrestricted
funds
Notes
£’000
Income from:
Donations and legacies
Grant in Aid (revenue)
2
7,198
Grant in Aid (capital)
2
128
Donations
2
2,516
Legacies
3
16
Charitable activities
Admissions
4
1,170
Memberships
30
Other trading activities
Trading subsidiary
5
183
Investments
6
303
Other
240
Total income
11,784
Expenditure on:
Raising funds
Fundraising and publicity
7
805
Investment management costs
-
Trading subsidiary
5
344
Charitable activities
8
8,811
Total expenditure
9,960		 Restricted
funds
£’000
-
-
5,121
-
-
-
-
-
-
5,121
-
-
-
3,685
3,685		 Linked Endowment
Charities
funds
£’000
£’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
80
-
-
-
80
-
-
-
147
-
-
-
-
-
147		 2021
Total
£’000
7,198
128
7,637
16
1,170
30
183
383
240
16,985
805
147
344
12,496
13,792		 Unrestricted
funds
£’000
3,375
126
891
414
5,584
46
2,920
518
192
14,066
935
-
2,973
9,720
13,628		 Restricted
funds
£’000
-
-
8,008
1,000
-
-
-
-
-
9,008
-
-
-
4,814
4,814		 Linked
Charities
£’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 Endowment
funds
£’000
-
-
-
-
-
-
-
157
-
157
-
243
-
-
243		 Restated
2020
Total
£’000
3,375
126
8,899
1,414
5,584
46
2,920
675
192
23,231
935
243
2,973
14,534
18,685

The notes on pages 35 to 64 form an integral part of these financial statements.

Page 31

The National Museum of the Royal Navy

(A company limited by guarantee) Company number: 06699696

Consolidated Statement of financial activities (incorporating the income and expenditure account) for the year ended 31 March 2021

Unrestricted
funds
£’000
Net gains/(losses) on
investments
-
Net income/(expenditure)
1,824
Transfer between funds
735
Other recognised gains/(losses):
(Losses)/gains on revaluations of
fixed assets
(3,358)
Net movement in funds
(799)
Reconciliation of funds:
Total funds brought forward
21,272
Total funds carried forward
20,473		 Restricted
funds
£’000
-
1,436
(1,356)
(244)
(164)
123,336
123,172		 Linked
Charities
£’000
Endowment
funds
£’000
-
6,413
-
6,346
647
(26)
-
-
647
6,320
3,390
34,532
4,037
40,852		 2021
Total
£’000
6,413
9,606
-
(3,602)
6,004
182,530
188,534		 Unrestricted
funds
£’000
-
438
1,322
133
1,893
19,379
21,272		 Restricted
funds
£’000
-
4,194
(1,292)
172
3,074
120,262
123,336		 Linked
Charities
£’000
-
-
83
-
83
3,307
3,390		 Endowment
funds
£’000
(1,292)
(1,378)
(113)
-
(1,491)
36,023
34,532		 Restated
2020
Total
£’000
(1,292)
3,254
-
305
3,559
178,971
182,530

The notes on pages 35 to 64 form an integral part of these financial statements.

Page 32

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Consolidated and Parent Balance Sheet

as at 31 March 2021

Fixed assets
Tangible assets
Heritage assets
Investments
Notes
15
15/16
17
Current assets
Stocks
Debtors
Cash at bank and in hand
18
19
Creditors falling due within one year
21
Net current assets
Debtors falling due after one year
20
Total assets less current liabilities
Creditors falling due after more than one year
22
Net assets
Funds
Unrestricted funds
Designated funds
Revaluation reserve
Total unrestricted funds
Restricted funds
Revaluation reserve
Linked charities
Total restricted funds
Total endowment funds
Total funds
23		 Group
2021
£’000
27,606
104,743
39,930
172,279
7,321
3,371
6,632
17,324
(4,416)
12,908
3,443
188,630
(96)
188,534
20,083
81
309
20,473
78,191
44,981
4,037
127,209
40,852
188,534		 Restated
Group
2020
£’000
32,059
104,096
33,602
169,757
7,357
5,244
3,696
16,297
(4,367)
11,930
939
182,626
(96)
182,530
20,619
72
581
21,272
78,086
45,250
3,390
126,726
34,532
182,530		 Company
2021
£’000
-
4,013
-
4,013
-
630
1,447
2,077
(894)
1,183
-
5,196
-
5,196
-
-
1
1
1,158
-
4,037
5,195
-
5,196		 Company
2020
£’000
-
3,366
-
3,366
-
1,903
361
2,264
(1,071)
1,193
-
4,559
-
4,559
10
-
1
11
1,158
-
3,390
4,548
-
4,559

The National Museum of the Royal Navy is exempt from an audit under Part 16 of the Companies Act 2006 under section 485 (non-profitmaking companies subject to public sector audit) of the Companies Act 2006, but subject to audit under the Government Resources and Accounts Act 2000.

The financial statements were approved and authorised for issue by the board and signed on its behalf by

Admiral Sir Philip Jones Chair of the Board of Trustees Date: 20[th ] January 2022

Professor Dominic Tweddle Director General and Accounting Officer Date: 20[th ] January 2022

The notes on pages 35 to 64 form an integral part of these financial statements.

Page 33

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Consolidated and Parent Cash flow statement for the year ended 31 March 2021

Notes
Cash flows from operating activities:
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Dividends and interest from investments
Purchase of property, plant and equipment
Sale of property, plant and equipment
Purchase of investments
Net cash (used in) investing activities
Cash flows from financing activities:
Repayment of borrowing
Net cash provided by (used in) financing activities
Change in cash and cash equivalents in the reporting period
31
Cash and cash equivalents at 1 April 2020
Total cash and cash equivalents at 31 March 2021
31
Net income/(expenditure) for the year
Depreciation
Loss on disposal of fixed assets
(Gains)/losses on investments
Adjustment for non-cash fees from gains/losses
Dividends and interest from investments
Decrease/(increase) in stocks
Decrease/(increase) in debtors
Increase/(decrease) in creditors
Increase/(decrease) in long term liabilities
Net cash provided by (used in) operating activities		 Group
2021
£’000
4,273
383
(3,228)
1,7171
(79)
(1,207)
(130)
(130)
2,936
3,696
6,632
9,606
1,375
341
(6,413)
164
(383)
36
(632)
179
-
4,273		 Restated
Group
2020
£’000
3,002
675
(4,895)
4
(158)
(4,374)
(130)
(130)
(1,502)
5,198
3,696
3,254
1,337
20
1,292
241
(675)
(6)
(2,673)
186
26
3,002		 Company
2021
£’000
1,863
-
(647)
-
-
(647)
(130)
(130)
1,086
361
1,447
637
-
-
-
-
-
-
1,273
(47)
-
1,863
Company
2020
£’000
(445)
-
(83)
-
-
(83)
(130)
(130)
(658)
1,019
361
(462)
1
-
-
-
-
-
494
(478)
-
(445)

The notes on pages 35 to 64 form an integral part of these financial statements.

Page 34

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

1. Accounting policies The principal accounting policies are summarised below. The accounting policies have been applied consistently throughout the year and the preceding year.

1.1. Charity information The National Museum of the Royal Navy (“the National Museum”) is a private company limited by guarantee and incorporated in England and Wales. The registered office is the National Museum of the Royal Navy, HM Naval Base PP66, Portsmouth, Hampshire, PO1 3NH. The members of the company are the Trustees named on page 3. Every member of the company undertakes to contribute such an amount as may be required not exceeding £1 to the assets of the company in the event of its being wound up while they are a member, or within one year after they cease to be a member. The National Museum meets the definition of a public benefit entity under section 34 of FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value, unless otherwise stated in the relevant accounting policy. The principal objectives of the charity are detailed in the Trustees report.

1.2. Basis of preparation of the financial statements The financial statements have been prepared in accordance with Accounting and Reporting by Charities: 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) issued in October 2019, the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102), the Charities Act 2011, the Companies Act 2006, and guidance issued by HM Treasury. The results of the company include the results of the two linked charities of the National Museum: Royal Naval Museum and HMS M33 Trust.

The financial statements are presented in sterling which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £’000. 1.3. Going concern In addition to the revenue it generates, the company receives grant in aid funding from the Ministry of Defence under a Financial Framework Agreement in respect of its operation of the group’s museums. Additional grant funding was awarded by the Royal Navy in response to the National Museum’s assessment of the impact of the Covid-19 pandemic on its financial position. The funding was based what would be necessary to ensure the National Museum remained a going concern, with forecasts reflecting a range of possible operating scenarios that included: full museums closure; a low opening scenario with very limited ability to generate revenue; and a high opening scenario with a strong recovery from enforced closures. Neither “opening” scenario considered that the National Museum would be in a position to return to pre-pandemic levels of operations or self-generated revenue within 202021 or 2021-22. The additional funding from the Royal Navy has effectively underwritten the Group’s financial performance and supported cashflows for 2020-21 and 2021-22. Although performance during periods of opening has been strong, it remains the Trustees’ view that the National Museum’s self-generated income streams and visitor markets will continue to be adversely impacted by any continuing or new Covid restrictions, and that its markets cannot be expected to fully recover before 2023-24. The level of cash available within free reserves to support operating activity is insufficient to meet long-term development needs and there are risks associated with unanticipated short-term cash demands; the immediate impact of the Covid-19 pandemic clearly exposed this. Whilst the additional grant funding supports the operating cash position, the nature of the funding agreement, based on need, will not permit the free reserves to be built up and maintained to eliminate the requirement for further cash support in 2022-23. The National Museum therefore continues to engage with Navy Command to ensure it has sufficient funds to continue to operate through 2022-23 and has shared its budget projections based on a full year’s operation across all sites, with slowly improving market recovery, cost pressures arising outside the National Museum’s direct control (including increasing costs of staff pay, rents, utilities and insurance), together with the need to address a range of essential site maintenance and IT investment requirements that were stalled during the closure periods. Although there remains uncertainty over the level of funding to be provided (as is the case for all government bodies at this stage in the funding cycle), the Trustees and Directors take comfort from the legislative foundation within the National Heritage Act 1983 that underpins the NMRN group’s operations and the Navy Command’s reassurances that it will work with the National Museum of the Royal Navy to ensure that the Museum remains a going concern and can deliver its strategy. The National Museum also continues to engage with the Department for the Economy (NI) to ensure that the debts outstanding in respect of the operating and maintenance costs of HMS Caroline can be recovered and that a new agreement can be shaped to ensure the ship’s future as a key visitor attraction in Belfast. The Trustees and Directors are therefore content that, based on the assurances provided to the National Museum by its sponsor, the Royal Navy, grant funding will be made available, the going concern basis continues to apply, and the impact of the COVID-19 pandemic does not create a material uncertainty around going concern to the charity. As such, the financial statements have been prepared on a going concern basis as the Trustees believe that no material uncertainties exist. The Trustees have considered the level of funds held and the expected level of income and expenditure for 12 months from authorising these financial statements. With additional grant support, the budgeted income and expenditure is sufficient for the charity to be able to continue as a going concern.

Page 35

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements

for the year ended 31 March 2021

1.4. Basis of consolidation

Consolidated financial statements have been prepared which include the following charities over which the National Museum has a controlling interest:

NMRN Operations (company 9988314, charity 1169061) inc. the National Museum of the Royal Navy Trading (company 1261270) and the Joint Venture, Portsmouth Historic Dockyard Operations Limited (company 12799836)

Royal Navy Submarine Museum (company 07637385, charity 1142123) and Trust (charity 1169371) Royal Marines Museum (company 07635447, charity 1142186) and Trust (charity 259422)

Fleet Air Arm Museum (company 07570620, charity 1143023) and Trust (charity 250079) NMRN Hartlepool (company 09997836, charity 1165917)

HMS Trincomalee Trust (company 02678419, charity 1007784) inc. the Foudroyant Trust (company 00628111, charity 306082) Warrior Preservation Trust (company 00936870, charity 256756)

HMS Victory Preservation Company (company 07935358, charity 1146376) incorporating HMS Victory Preservation Trust HMS Caroline Preservation Company (company 08303946, charity 1149930) incorporating HMS Caroline Preservation Trust

The Consolidated Statement of Financial Activities and the Consolidated Balance Sheet include the results and assets of each charity on a line by line basis. The individual results of the company can be found in the detailed statements of financial activities (Note 33).

1.5. Fund accounting

Unrestricted funds are donations and other incoming resources received or generated for general purposes.

Restricted funds are to be used for specified purposes as laid down by the donor. Expenditure which meets these criteria is identified to the fund, together with a fair allocation of overheads and support costs.

Endowment funds are funds which the donor has stated are to be held as capital and expendable over the long term. It is the intention that the capital value of the donation will be maintained in real terms. However, if it becomes necessary, no more than 5% of the capital will be spent at any one time.

1.6. Incoming resources

All incoming resources are included in the statement of financial activities when the company is legally entitled to the income, any performance conditions attached to the items of income have been met, and the amount can be quantified with reasonable accuracy and it is probable that the income will be received. The following specific policies are applied to particular categories of income:

Voluntary income is received by way of grants, donations and gifts and is included in full in the statement of financial activities when receivable. Grants where entitlement is not conditional on the delivery of a specific performance by the company, are recognised when the company becomes unconditionally entitled to the grant. Gifts in kind are included in the accounts at their current market value where this is readily identifiable. Where current market value is unavailable then gifts in kind are included in the accounts on the basis of internal valuations estimated by relevant staff and determined by their experience and judgement, unless this is not possible without incurring a cost disproportionate to the benefit of the information reported to the readers of the accounts. Where gifts in kind are services, these are measured at the price that would ordinarily be paid for that service, which is not always equivalent to market value.

Grant in Aid funding is received from the Ministry of Defence (MoD) as a contribution towards the operating costs of the National Museum Group. The majority of the Grant in Aid is received by the National Museum and then distributed to NMRN Operations on the basis of need, with the remainder, which is specifically a contribution towards wage costs, paid direct to staff by the Defence Business Services (DBS) on behalf of the National Museum.

Income from investments is included in the year in which it is receivable.

Legacies are included when the company is advised by the personal representative of an estate that payment will be made, or property transferred, and the amount involved can be quantified.

1.7. Grants receivable

Revenue grants are credited to incoming resources on the earlier of the date of when they are received or when they are receivable, unless they relate to a specified future period, in which case they are deferred.

Grants for the purchase of restricted fixed assets are credited to restricted incoming resources when receivable. Depreciation on the fixed assets purchased with such grants is charged against the restricted fund.

Government grants for the Coronavirus Job Retention Scheme are credited to the restricted incoming resources when receivable.

Page 36

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

1.8. Resources expended

Expenditure is recognised on an accruals basis as a liability is incurred. Expenditure includes any VAT which cannot be fully recovered and is reported as part of the expenditure to which it relates.

Costs of generating funds comprise costs incurred in encouraging people and organisations to contribute financially to the work of the National Museum and to promote each of the individual museums as a heritage and visitor attraction.

Charitable expenditure includes expenditure associated with Collections and Exhibitions, Curatorial Matters and Education and includes costs directly attributable to each activity. Costs not directly attributable to one activity, including the proportion of support costs relating to charitable expenditure, have been allocated on a reasonable basis of resources used.

Governance and support costs include those costs incurred in the governance of the company and its assets, and central functions, and have been allocated to cost categories on a basis consistent with the use of resources or the floor space occupied, as applicable.

1.9. Tangible fixed assets

Tangible fixed assets with a cost or value greater than £2,500 and a useful life exceeding one year are capitalised at historic cost and revalued annually using Ministry of Defence Modified Historic Cost Accounting (MHCA) indices.

Land and buildings held by the Fleet Air Arm Museum, Royal Navy Submarine Museum Trust, and NMRN Operations are stated at a valuation of depreciated replacement cost and depreciated over the lease term. These charities obtain a professional valuation at least every five years and indices are used to reflect the change in value in the intervening years.

Depreciation has been provided at rates calculated to spread the cost of each asset over its expected useful life as follows:

Improvements to property over the lease term
Short leasehold property over the lease term
Exhibitions 10 years
Fixtures and fittings 3 - 25 years
Computer and office equipment 3 - 10 years
Plant and machinery 3 - 30 years
Motor vehicles 5 years

The heritage assets are held in trusts and have been included in the consolidated financial statements as set out below.

Background

Each trust holds artefacts comprising its collection. The main and reserve collections (other than assets acquired since 1 April 2000 - see below) have not been included in the financial statements due to their historic and inalienable nature and, due to the specific and individual nature of the artefacts held, it is not believed to be possible to obtain a reliable value of the collection without incurring a cost disproportionate to the benefit of the information reported to the readers of the accounts.

Assets acquired prior to 1 April 2000 have not been capitalised and included in the accounts but with effect from 1 April 2000, additions to the collection with a cost in excess of £2,500, have been capitalised. These assets are carried at cost, or deemed cost, and not depreciated due to infinite useful economic lives. An annual review for impairment is carried out in accordance with the Charities SORP, with any impairment recognised in the Statement of Financial Activities. The exception to this is the Fleet Air Arm Museum where aircraft acquired prior to 1 April 2000 have also been capitalised. Note that this treatment is inconsistent with the accounts of the Fleet Air Arm Museum where the assets acquired prior to 1 April 2000 are excluded from the balance sheet.

Heritage assets donated to the trusts with a value in excess of £2,500 are included in the accounts on the basis of internal valuations estimated by the relevant curatorial staff and determined by their experience and judgement. Where this information is not available and cannot be obtained at a cost commensurate with the benefits to users of the financial statements, the assets will not be recognised in the Balance Sheet and the disclosure required by the Charities SORP will be made.

Heritage assets: policies for maintenance, management, acquisition and disposal

In October 2015, a single set of Collections Management policies for the NMRN Group was approved by the Board. These policies were the basis of a new single application to the Arts Council for Museum Accreditation to the higher standards required of a national museum collection, replacing the individual accreditations of the subsidiary museums. These policies set out a common approach for the maintenance and management of collections at different museum sites and will be subject to regular review as directed by the Collections, Research, Learning and Access Committee (CRLA).

Page 37

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements

for the year ended 31 March 2021

Acquisitions to the museums are now guided by a single Collections Development Policy (2015) and Strategy (2019); this sets out priorities and processes for acquisition. There are two principal methods of acquisition:

Acquisition by gift - Curators have authority to propose collecting in line with the 'Themes and Priorities for Future Collecting'. Offers of donations are passed to an Acquisitions Panel, chaired by the Registrar. This Committee sits on a monthly basis to assess offers. Decisions are reviewed by the Head of Collections and Research.

Acquisition by purchase - Collections and other staff can recommend and where appropriate make purchases of material from any source up to their authorisation levels in accordance with the NMRN scheme of delegation. Purchases of up to £25,000 are reviewed by the Head of Collections & Research and/or the Deputy Executive Director of Museum Operations. Any purchases of a value above £50,000 go to the Director General for assessment.

Significant acquisitions are discussed at the Collections, Research, Learning and Access Committee. This Committee also receives quarterly reports on key acquisitions and an annual report of all items added to the collection.

Subject to the approval of the Trustees, the Museum may dispose of items from the collection, although this will only happen in exceptional circumstances, for example:

Significant Historic Ships

Accounting policy for initial recognition of the Heritage Asset

The methodology of valuation of significant historic ships by the National Museum group is total rebuild basis, discounted for the ship’s current state of repair.

The values are calculated by the staff of the National Museum. Where the current build cost or market value of a similar ship is known and can be relied upon, this is used as the basis for establishing the value of the ship. Where this information is unavailable, the original build cost of each ship is grossed up to a modern-day value using a provider of historic economic data. This value is then discounted to take account of the ship’s current state of repair, using the estimated costs to bring the ship to the final condition (being in most cases something close to ‘as new’). For ships which are gifted to the National Museum, the discounted value becomes the ‘deemed cost’ of the ship.

Accounting policy for recognition of subsequent expenditure on significant ships

The National Museum’s operating company, NMRN Operations, is responsible for the restoration, preservation, and maintenance of the ship under the terms of the operator agreement. Expenditure incurred by the operating company is recognised in that entity on an accruals basis as a liability is incurred. Capital expenditure on plant and machinery not integral to the fabric of the ship is capitalised on the balance sheet of the operating company.

HMS Victory

During the restoration project the ship will be subject to a formal revaluation at least every five years, with the next scheduled for 2022. The progress of the project will be reviewed annually with any material change being reflected by an interim valuation.

Rentals applicable to operating leases, where substantially all of the benefits and risks of ownership remain with the lessor, are charged against incoming resources on a straight line basis over the life of the lease.

1.12. Investments

Investments held as fixed assets are revalued at mid-market value at the balance sheet date and the gain or loss taken to the statement of financial activities.

The Company adopts a total return approach to investment, generating the investment return from income and capital gains or losses. It is expected that if in any one year the total return is insufficient to fund the on-going expenditure, in the long term the value of the portfolio will still be maintained in accordance with the investment objective above.

Page 38

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements

for the year ended 31 March 2021

Attitude to Risk

The Company relies on the investment return to fund its objective. The key risk to the long term achievement of its objective is inflation, and the assets are invested accordingly. The Trustees understand that this will mean that investments are likely to be predominantly invested in equities, where dividends can be expected to grow, and that capital value will fluctuate. The Company's attitude to risk is therefore described as progressive.

The activities of the company fall within the exemptions afforded by the provisions of the Corporation Tax Act 2010. Accordingly, there is no tax charge in these accounts. The company's trading subsidiary is subject to corporation tax.

The tax expense represents the current tax expense. Current tax assets are recognised when tax paid exceeds the tax payable. Current tax is charged or credited to the SOFA.

Current tax assets and current tax liabilities are offset, if and only if, there is a legally enforceable right to set off the amounts and the entity intends either to settle on the net basis or to realise the asset and settle the liability simultaneously.

Current tax is based on taxable profits for the year. Taxable profit differs from total comprehensive income because it excludes items of income or expense that are taxable or deductible in other periods. Current tax assets and liabilities are measured using tax rates that have been enacted or substantively enacted by the reporting period.

Stocks are usually stated at the lower of cost and estimated selling price less costs to complete and sell, after making due allowance for obsolescence and slow moving items.

The valuation of the timber stock is an exception, based on an estimate of the open market value that could be achieved in the event of a sale (please see note 1.16). Oak and elm donated by four Scottish Estates is excluded and will be valued at market value once the final seasoned quantity is known (please see note 18).

1.15. Basic financial Instruments

The company's financial assets and liabilities consist of cash and cash equivalents, short term investments, trade & other debtors, trade & other creditors and accrued expenses. The fair value of these items approximates their carrying value due to their short term value. Unless otherwise noted, the company is not exposed to significant interest, foreign exchange or credit risks arising from these instruments.

In applying the above accounting policies the following judgements (apart from those involving estimates) have been made that have had the most significant effect on amounts recognised in the financial statements:

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a

The estimation techniques that have been used in the consolidated financial statements are set out below.

Page 39

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

Estimate Assumption
Valuation of
Historic Ships		 The valuations of historic ships acquired by the group has been based on an estimate of current costs of
rebuilding the vessels, as the actual costs of doing so are unknown.
This assumes that the same materials and methods of construction would be utilised with the same cost
profile as the original, and, on the same basis, adjusted proportionately for those parts of the vessel that
would not be replaced (for example, guns and engines).
Valuation of
Heritage Assets
(not Historic
Ships)		 The valuations of heritage assets donated to the group after 1 April 2000 with a value in excess of £2,500
are based on internal estimates of market value by the relevant curatorial staff and determined by their
experience and judgement. Where this information is not available and cannot be obtained at a cost
commensurate with the benefits to users of the financial statements, the assets will not be recognised in
the Balance Sheet.
Valuation of Land
and Buildings		 The valuations of land and buildings are based on professional market valuations at least every five years
and indices are used to reflect the change in value in the intervening years.


Valuation of
HMS Victory
Preservation
Company
timber stock		 The valuations of the timber stock has been carried out by a professional valuer based on the assumption
that the open market value could be achieved in the event of a sale.
Although the stock of timber has been professionally valued, this can only be considered an estimate
because, due to the nature and quantity of timber held, if it were ever to be sold on the open market, there
would likely be a negative impact on the market price (please see note 18).

1.17. Pensions

During the year, contributions for the Director General only, totalling £13,000 (excluding salary exchange amounts) (2019-20 £13,000), were paid into a defined contribution group pension scheme. There were no outstanding or prepaid contributions at the balance sheet date. The pension cost charged to the Statement of Financial Activities represents the contributions paid.

The majority of staff of the National Museum and the subsidiaries are covered by the provisions of a defined contributions group pension plan, the assets of which are held in an independently administered fund and which provides benefits based on the value of the fund. A small number of staff, who have transferred into the National Museum under the Transfer of Undertakings (Protection of Employment) Regulations, have retained membership of their former employers' pensions schemes which provides benefits based on final pensionable pay, and include the Principal Civil Service Pension Scheme (PCSPS) and the Local Government Pension Scheme (LGPS).

Group Pension Plan

The National Museum operates a Group Pension Plan with employer's contributions being payable at either 6% or 10%. Under this plan a "salary exchange" scheme exists whereby employees may elect to give up the right to receive part of their salary remuneration in return for an additional employer's contribution into the Group Pension Plan of the same amount. The pension cost charged to the Statement of Financial Activities represents the contributions paid.

Principal Civil Service Pension Scheme (PCSPS)

The PCSPS is an unfunded multi employer defined benefit scheme but the National Museum of the Royal Navy is unable to identify its share of the underlying assets and liabilities. A full actuarial quadrennial valuation was carried out at 31 March 2016. Details can be found in the resource accounts of the Cabinet Office; Civil Superannuation: (www.civilservicepensionscheme.org.uk/about- us/scheme valuations/)

For 2020-21, employer contributions were payable to the PCSPS at one of four rates in the range 26.6% to 30.3% of pensionable earnings, based on salary bands. The scheme actuary reviews employer contributions every four years following a full scheme valuation. The contribution rates are set to meet the cost of the benefits accruing during 2020-21 to be paid when the member retires and not the benefits paid during this period to existing pensioners.

Local Government Pension Scheme (LGPS)

The LGPS is a multi-employer defined benefit scheme. The National Museum of the Royal Navy is an admitted member of the Hampshire Pension Fund but is unable to identify its share of the underlying assets and liabilities. An actuarial valuation was carried out at 31 March 2019 with revised rates of contributions being payable from 1 April 2020. Details can be found in the Hampshire Pension Fund annual report and accounts: (https://www.lgpsboard.org/index.php/schemedata/scheme-annual-report). The next valuation date is 31 March 2022, with revised contributions being payable from 1 April 2023.

Page 40

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

The National Museum of the Royal Navy is also an admitted member of the Teesside Pension Fund but is unable to identify its share of the underlying assets and liabilities. An actuarial valuation was carried out at 31 March 2019 with revised rates of contributions being payable from 1 April 2020. Details can be found in the Teesside Pension Fund annual report and accounts: (https://www.lgpsboard.org/index.php/schemedata/scheme-annual-report). The next valuation date is 31 March 2022, with revised contributions being payable from 1 April 2023.

The pension cost charged to the Statement of Financial Activities is represented by the contributions payable under the LGPS including a past service deficit contribution at 0% (Hampshire) and 17% (Teesside) of pensionable pay.

1.18. Termination benefits

The group recognises a liability for termination benefits at the point where the group is committed to making the payments in return for employee redundancy.

1.19. Restatement of comparative information

Comparative information for 2020 has been restated to reflect the changes described below:

The Fleet Air Arm Museum was awarded a legacy from Sir Donald Gosling, through The Gosling Foundation in February 2020, the legacy being received in July 2020. Comparative information has been restated to accrue the income as at 31 March 2020.

Page 41

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements

for the year ended 31 March 2021

2. Voluntary income (Company and Group)

Unrestricted
funds
£’000
Grant (operating)
7,198
Grant (capital)
128
Total Grant in Aid
7,326
Other donations and grants
Coastal Forces Heritage Trust
-
Ministry of Defence
-
Miscellaneous donations
and grants
1
1
Gifts in kind:
Transferred from NMRN Operations
-
-
Received by company
1
Received by:
NMRN Operations
2,481
Royal Navy Submarine Museum
16
Royal Marines Museum
15
HMS Victory Preservation Co
1
HMS Trincomalee Trust
1
Warrior Preservation Trust
1
Consolidation adjustments:
NMRN Operations (1)
-
2,515
Received by group
2,516		 Restricted
funds
£’000
-
-
-
-
135
-
135
-
-
135
3,790
-
1,189
-
7
-
-
4,986
5,121		 Linked
charities
£’000
-
-
-
-
-
-
-
647
647
647
-
-
-
-
-
-
(647)
(647)
-		 2021
Unrestricted Restricted
Total
funds
funds
£’000
£’000
£’000
7,198
3,375
-
128
126
-
7,326
3,501
-
-
-
140
135
-
328
1
2
-
136
2
468
647
-
-
647
-
-
783
2
468
6,271
838
7,540
16
1
-
1,204
44
-
1
5
-
8
-
-
1
1
-
(647)
-
-
6,854
889
7,540
7,637
891
8,008		 Linked
charities
£’000
-
-
-
-
-
-
-
83
83
83
-
-
-
-
-
-
(83)
(83)
-		 2020
Total
£’000
3,375
126
3,501
140
328
2
470
83
83
553
8,378
1
44
5
-
1
(83)
8,346
8,899

Page 42

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

3. Legacies (Group)


Received by:
NMRN Operations
Fleet Air Arm Museum
Royal Marines Museum
Royal Navy Submarine Museum
Unrestricted
funds
£’000
14
1
1
-
Restricted
Funds
£’000
-
-
-
-
16
-		 2021
Total
£’000
14
1
1
-
Unrestricted
funds
£’000
341
-
2
71
Restricted
funds
£’000
-
1,000
-
-
16
414
1,000		 Restated
2020
Total
£’000
341
1,000
2
71
1,414

There are no equivalent balances for the company.

4. Admissions (Group)

Museum admissions
Portsmouth Historic Dockyard
Fleet Air Arm Museum
Hartlepool
HMS Caroline
Unrestricted
funds
£’000
895
215
20
2
Other site income
Portsmouth Historic Dockyard
1,132
38
1,170		 2021
Total
£’000
895
215
20
2
Unrestricted
funds
£’000
4,333
776
250
190
1,132
38
5,549
35
1,170
5,584		 2020
Total
£’000
4,333
776
250
190
5,549
35
5,584

There are no equivalent balances for the company.

Portsmouth Historic Dockyard includes: HMS Victory ; HMS Warrior ; Royal Naval Museum; Royal Navy Submarine Museum; and Explosion!

Admissions income includes amounts reclaimed from HM Revenue and Customs under the Gift Aid Scheme.

Page 43

The National Museum of the Royal Navy

(A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

5. Income and expenses from trading activities of subsidiaries

The National Museum has control of NMRN Operations (NMRNO), NMRN Hartlepool (NMRNH), the HMS Victory Preservation Company (HMSVPC), the HMS Caroline Preservation Company (HMSCPC), the HMS Trincomalee Trust (HMSTT), the Warrior Preservation Trust (WPT), the Royal Navy Submarine Museum Trust (RNSM), the Royal Marines Museum Charitable Trust (RMM), and the Fleet Air Arm Museum (FAAM). NMRN Operations also has a non-charitable trading subsidiary. Dormant subsidiaries awaiting strike off are not included below (these have £Nil balances).

Note: the results for FAAM Trust and WPT include consolidation adjustments of £2,222,000 and £250,000 respectively, to increase reserves brought forward and heritage assets.

5.1
Statement of Financial Activities
(Subsidiaries)
Income from:
Donations and legacies
Charitable activities
Other trading activities
Trading subsidiary
Investments
Other
Total income
Expenditure on:
Raising funds
Trading subsidiary
Investment management
Charitable activities
Total expenditure		 NMRNO
£’000
14,889
1,200
183
-
236
16,508
805
344
-
12,175
13,324		 NMRNH
£’000
-
-
-
-
-
-
-
-
-
-
-		 HMSVPC
£’000
1
-
-
379
-
380
-
-
147
246
393		 HMSCPC
£’000
-
-
-
-
-
-
-
-
-
-
-		 HMSTT
£’000
9
-
-
4
-
13
-
-
-
11
11		 WPT
£’000
1
-
-
-
1
-
-
-
45
45		 RMM
£’000
1,205
-
-
-
-
1,205
-
-
-
1,382
1,382		 RNSM
£’000
16
-
-
-
1
17
-
-
-
95
95		 FAAM
£’000
1
-
-
-
-
1
-
-
-
321
321		 2021
£’000
16,122
1,200
183
383
237
18,125
805
344
147
14,275
15,571		 Restated
2020
£’000
15,104
5,630
2,920
675
192
24,521
935
2,973
243
15,364
19,515

Page 44

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

5.1
Statement of Financial Activities (continued)
(Subsidiaries)
NMRNO
£’000
Net (loss)/ gain on investments
-
Net income/(expenditure)
Other recognised gains/(losses)
Revaluation of fixed assets
3,184
(267)
Net movement in funds
2,917
Reconciliation of funds
Fund balances brought forward
22,373
Fund balances carried forward
25,290
5.2
Balance Sheet
(Subsidiaries)
Fixed assets
Tangible fixed assets
Heritage assets
Investments
NMRNO
£’000
22,380
-
-
Current assets
Current liabilities
Long term liabilities
22,380
7,011
(4,101)
-
Total Funds
25,290		 NMRNH
£’000
-
-
-
-
4
4
NMRNH
£’000
-
-
-
-
4
-
-
4		 HMSVPC
£’000
6,413
6,400
1
6,401
60,255
66,656
HMSVPC
£’000
139
19,375
39,930
59,444
7,260
(48)
-
66,656		 HMSCPC
£’000
-
-
-
-
12,560
12,560
HMSCPC
£’000
-
12,560
-
12,560
1
(1)
-
12,560		 HMSTT
£’000
-
2
-
2
21,384
21,386
HMSTT
£’000
-
21,008
-
21,008
486
(12)
(96)
21,386		 WPT
£’000
-
(44)
-
(44)
26,420
26,376
WPT
£’000
-
25,290
-
25,290
1,089
(3)
-
26,376		 RMM
£’000
-
(177)
(3,176)
(3,353)
6,142
2,789
RMM
£’000
-
734
-
734
3,182
(1,127)
-
2,789		 RNSM
£’000
-
(78)
-
(78)
19,016
18,938
RNSM
£’000
-
18,651
-
18,651
375
(88)
-
18,938		 FAAM
£’000
-
(320)
(160)
(480)
9,816
9,336
FAAM
£’000
5,086
3,111
-
8,197
1,141
(2)
-
9,336		 2021
£’000
6,413
8,967
(3,602)
5,365
177,970
183,335
2021
£’000
27,605
100,729
39,930
168,264
20,549
(5,382)
(96)
183,335		 Restated
2020
£’000
(1,292)
3,714
306
4,020
173,950
177,970
Restated
2020
£’000
32,058
100,729
33,602
166,389
17,954
(6,277)
(96)
177,970

Page 45

The National Museum of the Royal Navy (A company limited by guarantee)

Company number: 06699696

Notes to the financial statements

for the year ended 31 March 2021

5.3 National Museum of the Royal Navy Trading

National Museum of the Royal Navy Trading (NMRNT) is a company limited by guarantee, incorporated in England & Wales. NMRNT operates a number of retail outlets and cafes within the Museums and the corporate events.

At the discretion of its directors, NMRNT distributes its net profit to NMRN Operations (the parent). A summary of the company's trading results is shown below:

Turnover
Cost of sales
Gross Profit
Administration
Commissioning fee from NMRN Operations
Other income
Net (loss) / profit
Tax on ordinary activities
(Loss) / Profit for the Financial Year
Amount gifted to NMRN Operations
Retained (loss)/profit for the period
Retained profit brought forward
Retained profit carried forward		 2021
£’000
167
(122)
45
(235)
-
16
(174)
55
(119)
-
(119)
450
331		 2020
£’000
2,902
(1,243)
1,659
(1,753)
-
19
(75)
22
(53)
(41)
(94)
544
450

5.4 Agency funds

The National Museum group was responsible for the collection and distribution of ticketing income for the destination Portsmouth Historic Dockyard on behalf of Portsmouth Naval Base Property Trust and the National Museum until August 2020. A summary of the agency fund activity for the year is shown below. These balances are excluded from the accounts. The ticket income due to the National Museum is included in admissions income on the SOFA.

Statement of financial activities
Income received
Distributions
Net incoming resources
Balance Sheet
Current assets
Current liabilities
Net assets		 2021
Total
£’000
17
(17)
-
-
-
-		 2020
Total
£’000
5,107
(5,107)
-
702
(702)
-

Page 46

The National Museum of the Royal Navy (A company limited by guarantee)

Company number: 06699696

Notes to the financial statements

for the year ended 31 March 2021

6. Investment income (Group)

Investment income (Group)
Unrestricted Endowment
funds
funds
£’000
£’000
Interest income
2
13
Dividend income
301
67
303
80		 2021
Unrestricted Endowment
Total
funds
funds
£’000
£’000
£’000
15
3
14
368
515
143
383
518
157		 2020
Total
£’000
17
658
675

7. Fundraising costs (Group)

Unrestricted
funds
£’000
Staff costs
605
Fundraising and publicity
200
805		 2021
Unrestricted
Total
funds
£’000
£’000
605
530
200
405
805
935		 2020
Total
£’000
530
405
935

There were no fundraising costs to the company during the period, with all fundraising activities undertaken elsewhere with the Group.

8. Costs of charitable activities - by fund type (Company)

Unrestricted
funds
£’000
Operations
396
Collections & research
85
Learning
48
Grant funding
6,811
7,340		 Restricted
funds
£’000
-
-
-
135
135		 2021
Unrestricted
Total
funds
£’000
£’000
396
420
85
107
48
40
6,946
2,806
7,475
3,373		 Restricted
funds
£’000
-
-
-
1,143
1,143		 2020
Total
£’000
420
107
40
3,949
4,516

Costs of charitable activities - by fund type (Group)

Unrestricted
funds
£’000
Operations
6,617
Collections & research
1,502
Learning
692
8,811		 Restricted
funds
£’000
3,053
580
52
3,685		 2021
Unrestricted
Total
funds
£’000
£’000
9,670
7,249
2,082
1,883
744
588
12,496
9,720		 Restricted
funds
£’000
4,626
152
36
4,814		 2020
Total
£’000
11,875
2,035
624
14,534

Page 47

The National Museum of the Royal Navy (A company limited by guarantee)

Company number: 06699696

Notes to the financial statements

for the year ended 31 March 2021

9. Costs of activities in furtherance of the objects of the charity (Company)

Collections
Operations
& research
£’000
£’000
Staff costs
277
59
Governance and support costs
119
26
396
85
Grant funding:
NMRN Operations
-
-
396
85		 Learning
£’000
34
14
48
-
48		 Grant
funding
£’000
-
-
-
6,946
6,946		 2021
Total
£’000
370
159
529
6,946
7,475		 2020
Total
£’000
437
130
567
3,949
4,516

Costs of activities in furtherance of the objects of the charity (Group)

Collections
Operations
& research
£’000
£’000
Staff costs
3,439
713
Operating costs
442
-
Marketing
276
-
Curatorial
-
364
Purchase of exhibits
-
10
Depreciation
833
316
Loss on disposal of fixed assets
64
269
Governance and support costs
1,910
410
6,964
2,082
Project costs:
HMS Caroline
9
-
HMS Victory
1,094
-
HMS Warrior
43
-
HMS Invincible
85
-
Landing Craft (Tank) - LCT7074
1,000
-
Royal Marines Museum relocation
277
-
Fleet Air Arm Museum
10
-
Royal Navy Submarine Museum
-
-
NMRN Hartlepool
131
-
Other project costs
57
-
2,706
-
9,670
2,082		 Learning
£’000
408
-
-
-
-
100
8
228
744
-
-
-
-
-
-
-
-
-
-
-
744		 Grant
funding
£’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 2021
Total
£’000
4,560
442
276
364
10
1,249
341
2,548
9,790
9
1,094
43
85
1,000
277
10
-
131
57
2,706
12,496		 2020
Total
£’000
4,617
459
758
302
35
1,207
20
2,619
10,017
265
1,036
296
210
1,762
316
199
42
58
333
4,517
14,534

Page 48

The National Museum of the Royal Navy (A company limited by guarantee)

Company number: 06699696

Notes to the financial statements

for the year ended 31 March 2021

10.
Analysis of governance and support costs (Company)
Collections
Operations
& research
£’000
£’000
Accountancy & payroll
13
3
Auditor remuneration
1
-
Auditor remuneration - NAO
45
10
Legal and professional
6
1
Insurance
35
7
Travelling expenses
3
1
Bank charges & interest
2
1
Depreciation
-
-
Sundry expenses
14
3
119
26
Analysis of governance and support costs (Group)
Collections
Operations
& research
£’000
£’000
Accountancy & payroll
50
12
Auditor remuneration
62
15
Auditor remuneration - NAO
45
10
Legal and professional
101
22
Repairs and maintenance
689
147
Insurance
151
32
Premises expenses
624
134
Travelling expenses
20
4
Communication and IT
48
10
Printing, postage and stationery
24
5
Bank charges & interest
33
7
Depreciation
11
-
Sundry expenses
52
12
1,910
410		 Learning
£’000
2
-
5
1
4
-
-
-
2
14
Learning
£’000
5
7
5
12
83
18
77
2
6
3
4
-
6
228		 2021
Total
£’000
18
1
60
8
46
4
3
-
19
159
2021
Total
£’000
67
84
60
135
919
201
835
26
64
32
44
11
70
2,548		 2020
Total
£’000
20
2
49
18
-
20
12
1
8
130
2020
Total
£’000
84
48
49
101
384
215
1,336
127
62
58
107
11
37
2,619
11.
Employees
Employment costs
Wages and salaries
Social security costs
Pension costs
Employee benefits		 Group
2021
£’000
5,065
335
412
11
5,823		 Group
2020
£’000
6,445
437
494
16
7,392		 Company
2021
£’000
260
33
68
11
372		 Company
2020
£’000
306
35
76
16
433

Key management personnel

Employee benefits received by key management personnel total £288,000 for the year to 31 March 2021 (31 March 2020: £349,000).

The total received by the group from the Coronavirus Job Retention Scheme in the period was £1,570,000 (Company only - £Nil).

Page 49

The National Museum of the Royal Navy (A company limited by guarantee)

Company number: 06699696

Notes to the financial statements

for the year ended 31 March 2021

Higher paid employees

The number of employees who earned more than £60,000 during the year was as follows:

Group Group Company Company
2021 2020 2021 2020
£60,001 to £70,000 3 2 - -
£70,001 to £80,000 1 1 - 1
£80,001 to £90,000 1 - 1 -
£90,001 to £100,000 1 1 1 1
£120,001 to £130,000 1 1 1 1

Number of employees

The average monthly numbers of employees during the year, was as follows:

Charitable expenditure
Cost of generating funds
Governance costs		 Group
2021
312
3
6
321		 Group
2020
401
4
7
412		 Company
2021
-
-
3
3		 Company
2020
-
-
4
4

The above includes workers engaged under Casual Worker Agreements. The average full-time equivalent number of staff for the year was 177 (2020: 226).

Staff costs for the charity for the year include an accrual of £8,000 (2020: £3,000), and for the group include £96,000 (2020: £41,000), for short-term compensated absences arising from employee entitlement to annual leave.

During the financial year 22 redundancies (2020: 4) were identified within the group and contractual/redundancy costs of £146,000 were paid (2020: £50,000). No further amounts were accrued at 31 March 2021 (2020: £Nil).

Pensions contributions

The contributions made to each scheme during the year are set out below. There were no outstanding or prepaid contributions at the balance sheet date:

Group Schemes
£’000
National Museum of the Royal Navy
68
NMRN Operations
315
NMRN Trading (reported within trading expenditure)
-
383		 2021
PCSPS
£’000
-
17
-
17		 LGPS
Group Schemes
£’000
£’000
-
76
11
371
-
9
11
456		 2020
PCSPS
£’000
-
22
-
22		 LGPS
£’000
-
16
-
16

12. Trustees' emoluments

No trustees received remuneration during the year (2020: Nil). Four trustees from the National Museum of the Royal Navy were reimbursed for travel expenses totalling £1,000 (2020: Nine trustees - £4,000).

13. Net outgoing resources for the year

Net outgoing resources for the year
2021 2020
Net outgoing resources is stated after charging: £’000 £’000
Depreciation and other amounts written off tangible fixed assets 1,716 1,360
Auditors' remuneration - National Audit Office 60 49
Auditors' remuneration - Subsidiary Auditors 84 48

The National Audit Office fee for the year ended 31 March 2021 is £59,500, including £6,000 additional costs relating to 2020 (2020: £49,000). There is no remuneration for non-audit work.

Page 50

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

14. Taxation

The activities of the company and the individual charities fall within the exemptions afforded by the provisions of the Corporation Tax Act 2010. Accordingly, there is no taxation charge in these accounts.

NMRN Operations’ wholly owned, non-charitable subsidiary, trading company is subject to Corporation Tax.

15.
Tangible fixed assets (Company)
Fixtures,
Plant and
fittings and
machinery
equipment
£’000
£’000
Cost or valuation
At 1 April 2020
4
9
Additions
-
-
At 31 March 2021
4
9
Depreciation
At 1 April 2020
4
9
Charge for the year
-
-
At 31 March 2021
4
9
Net book values
At 31 March 2021
-
-
At 31 March 2020
-
-		 Heritage
assets
£’000
3,366
647
4,013
-
-
-
4,013
3,366		 Total
£’000
3,379
647
4,026
13
-
13
4,013
3,366

Tangible fixed assets (Group)

Assets under
construction
£’000
Cost or valuation
At 1 April 2020
4,154
Additions
1,707
Transfers
(5,678)
Disposals
-
Revaluation
-
At 31 March 2021
183
Depreciation
At 1 April 2020
-
Charge for the year
-
Disposals
-
On revaluation
-
At 31 March 2021
-
Net book values
At 31 March 2021
183
At 31 March 2020
4,154		 Short
Freehold Leasehold
£’000
£’000
17,029
11,334
-
72
-
-
(2,038)
-
(3,851)
(323)
11,140
11,083
3,211
2,157
223
333
(66)
-
(425)
(50)
2,943
2,440
8,197
8,643
13,818
9,177		 Computer
and office
equipment
£’000
2,655
108
-
(97)
201
2,867
2,465
77
(93)
187
2,636
231
190		 Fixtures,
Plant and fittings and
machinery equipment Exhibitions
£’000
£’000
£’000
2,493
7,750
1,602
280
-
414
5,678
-
-

-
(133)
(31)
53
78
31
8,504
7,695
2,016
1,123
5,491
511
290
224
228
-
(51 )
(31)
(3)
60
21
1,410
5,724
729
7,094
1,971
1,287
1,370
2,259
1,091		 Heritage
assets
£’000
104,096
647
-
-
-
104,743
-
-
-
-
-
104,743
104,096		 Total
£’000
151,113
3,228
-
(2,299 )
(3,811 )
148,231
14,958
1,375
(241 )
(210 )
15,882
132,349
136,155

Page 51

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

Land and buildings owned by the Fleet Air Arm Museum were revalued in 2015 by DVS Property Specialists, in accordance with the stated policy. Land and buildings owned by the Royal Navy Submarine Museum (and subsequently transferred to NMRN Operations) were revalued in 2017 by Hellier Langston, in accordance with the stated policy. The revaluations were conducted by qualified surveyors on a depreciated replacement cost basis and in accordance with the RICS Valuation Professional Standards.

Land and buildings owned by the Royal Marines Museum were previously valued at depreciated replacement cost, with a professional valuation being obtained at least every five years. The Museum closed on 1 April 2017 and the land and buildings were revalued to market value on 18 May 2017, and subsequently sold on 25 November 2020.

16. The Collections

The collections are held by each trust individually and consist of artefacts - physical, written and oral - reflecting the history of the Royal Navy and its people throughout the area of its worldwide operations. In addition to covering the Royal Navy as a whole, the particular branches of the service (Surface Fleet, Submarines, Royal Marines and Fleet Air Arm) are also well represented.

The collections are subject to an ongoing programme of audit, review and documentation as they are integrated into the National Museum’s collection management systems, and the numbers of artefacts held within the Explosion! and Royal Marines Museum collections have been amended within this reporting period. The number of artefacts held by each trust is summarised below, by category:

Category Royal Naval
Museum		 Explosion! Royal Navy
Submarine
Museum		 Royal
Marines
Museum		 Fleet Air
Arm
Museum		 HMS
Trincomalee
Trust		 Warrior
Preservation
Trust		 HMS M33
Trust		 HMS Caroline
Pres. Trust		 HMS Victory
Pres. Trust		 Total
Large Items 86 13 8 17 181 1 1 1 1 1 310
Works of Art/Models 5,330 260 957 10,824 1,310 8 155 - - - 18,844
DocumentaryArchive 35,365 4,109 22,000 36,000 1,034,148 4 1,427 - - - 1,133,128
Uniforms/Badges & Insignia 7,543 - 848 15,817 4,403 - 45 - - - 28,656
Orders & Decorations 5,418 - 235 2,564 1,556 19 12 - - - 9,804
Weapons/Armaments 297 1,251 64 1,694 194 - 20 - - - 3,520
Photograph/Microfilm/Fiche 165,804 2,978 60,793 2,000,000 881,452 - 315 - - - 3,111,342
Film and Sound Recordings 700 22 825 1,382 164 - 1 - - - 3,094
Other 4,412 5,057 3,600 3,347 17,265 2 1,154 - - - 34,837
Total 224,955 13,690 89,330 2,071,645 1,940,673 34 3,130 1 1 1 4,343,460

Royal Naval Museum

In 2011-12 the title to, and beneficial ownership of, the collection relating to HMS Caroline passed to the Royal Naval Museum. This collection consists of around 400 items including pictures, photographs, flags and other items. Information regarding cost or value of this collection is not readily available and the charity considers that the cost of obtaining such valuation for the collection of assets held is significant and is not commensurate with the benefit obtained by including the additional capitalised value in the financial statements.

On 28 March 2013 the title to, and beneficial ownership of, the collection belonging to the Explosion! Museum, Gosport, passed to the Royal Naval Museum. This extensive collection includes small arms, cannon and guns, shells and munitions, mines, torpedoes, modern missiles, and an atom bomb. The collection has been included within heritage asset additions at the purchase price of £145,000.

One other significant Second World War item accessioned to the collection of the Royal Naval Museum is Landing Craft (Tank) Mk III, LCT 7074, gifted to the National Museum of the Royal Navy (NMRN) from the Mersey Docks and Harbour Company Limited on 7 November 2014. The methodology of valuation of significant ships should be consistent with that used by NMRN, using the total rebuild basis discounted for the ship's current state of repair. Whilst the cost of rebuild can be established using the original cost of building uplifted for today's value, information regarding the cost or value of the conservation required to bring the ship to an 'as new' condition is not readily available, therefore no value has been applied to the gift at this stage. The value will be revisited in future years when further information regarding the costs of conservation have been established.

Page 52

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

On 31 March 2017, a gift for charitable purposes was made to the Royal Naval Museum of 777 items from the Ministry of Defence Art Collection, including paintings, objects d’art, ship figureheads, engravings and furniture. Given the diverse nature of the collection and the uniqueness of some items, comparables are not readily available to the National Museum for valuation purposes. The collection is dispersed across Ministry of Defence buildings throughout the United Kingdom and abroad and will remain in situ for the foreseeable future. As such, there are considerable practical difficulties associated with accessing such a large volume of items to determine their quality, authenticity, condition and value. The supporting information made available to the National Museum by the Ministry of Defence is limited in terms of making a realistic valuation and would take significant work to generate e.g. condition reports, imagery, etc. The Trustees consider that the costs of obtaining a reliable valuation for this collection would be significant and is not commensurate with the benefit obtained by including the additional capitalised value in the accounts. Additionally, given the circumstances described, any attempt to value the collection would be considerably arbitrary, to the extent that such a valuation would be potentially misleading to a user of the financial statements.

On 13 March 2020, the National Museum received a gift of 12 figureheads from the Ministry of Defence. This was the first tranche of a gift for charitable purposes of The Devonport Collection. The charity considers that the cost of obtaining a valuation for this gift is significant, as such items rarely come on the market, and is not commensurate with the benefit obtained by including the capitalised value in the financial statements.

Five-year summary of transactions
Purchased additions
Royal Naval Museum
Royal Navy Submarine Museum
Fleet Air Arm Museum
Donated additions
Royal Naval Museum
Fleet Air Arm Museum
HMS Trincomalee Trust
1
Total additions
1
Significant historic ships		 2021
£’000
648
-
-
648
-
-
-
-
648		 2020
£’000
83
-
-
83
-
-
-
-
83		 2019
£’000
114
-
-
114
4
-
-
4
118		 2018
£’000
137
-
-
137
3
-
-
3
140		 2017
£’000
5
-
3
8
264
-
8
272
280
Ship
(for reporting
entity please
see below)		 Donor Date
ofgift		 Uplifted original
build cost
apportioned
for value on
**completion **		 Estimated
cost of
repair at
time of
gifting		 Value
of gift		 Value at
1 April
2020		 Increase
inyear		 Value at
31 March
2021
£’000 £’000 £’000 £’000 £’000 £’000
HMS_Alliance_ Ministry of Defence 1979 £18,480 N/A N/A £18,480 - £18,480
HMS_Caroline_ Ministry of Defence 2013 £12,560 £5,004 £7,556 £12,560 - £12,560
HMS_M33_ Hampshire County 2014 £1,775 £683 £1,092 £1,775 - £1,775
HMS_Trincomalee_ Purchased for £1 N/A £21,000 N/A N/A £21,000 - £21,000
HMS_Victory_ Ministry of Defence 2012 £50,000 £30,625 £19,375 £19,375 - £19,375
HMS_Warrior 1860_ Purchased for £1 N/A £25,040 N/A N/A £25,040 - £25,040

The Royal Navy Submarine Museum Trust – HMS Alliance

The submarine, HMS Alliance , was constructed in Barrow-in-Furness in 1947. She is a Royal Navy A Class submarine and is the only surviving example of the class. The ship was transferred to the Royal Navy Submarine Museum in 1979 where she has been on display since the transfer. HMS Alliance is valued at £18,480,000 to reflect its estimated rebuild cost. The valuation was carried out in 2015.

The original build cost of the submarine is estimated to be £304,495 based on the cost of a similar T Class submarine - HMS Triumph - built in 1936. Uplifted for current value (2015), this cost was equivalent to £18,480,000. HMS Alliance was completely refurbished and reopened to the public in April 2014. The renovation work carried out was an extensive project costing around £7,000,000 to complete, and included repairing damage to the hull, in addition to completely restoring the interior of the submarine. As a result of these works it was not felt that any deductions to the original cost for disrepair was necessary.

Page 53

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

HMS Caroline Preservation Trust – HMS Caroline

The ship, HMS Caroline , was constructed at the Cammell Laird shipyard in Birkenhead in 1914. She was one of eight C-Class light cruisers and is the last remaining British WW1 light cruiser still afloat and the sole survivor of the Battle of Jutland. The ship was gifted to the Trust on 18 November 2013 by the Ministry of Defence. HMS Caroline was initially recognised in the accounts at a value of £7,556,000, calculated on a total build basis discounted to take account of the ship's state of repair at the time of gifting.

In 1914, the original build cost of HMS Caroline was £300,000. Uplifted for current value (2013), this cost was the equivalent of £25,120,000. The ship would be brought to sound and original condition, as far as possible, in the course of the refurbishment programme. However substantial elements of the original ship including the boilers, and armaments, would not be replaced. It was therefore the view of the project management team that 50% of the original value was a reasonable measure of the heritage asset value of the ship on completion of these works, the discounted value being £12,560,000.

Based on the above, the ship was initially recognised in the accounts at a value of £7,556,000, reflecting the value on completion of £12,560,000, discounted back for the expenditure anticipated to be required to achieve that outcome. The value was then increased in the year to 31 March 2016 by £1,079,000, and in the year to 31 March 2017 by £3,925,000, to the final valuation of £12,560,000 on completion of the scheduled programme of works.

HMS M33 Trust – HMS M33

Monitor HMS M33 was built by Harland and Wolff, Belfast, in 1915. She is one of only three surviving Royal Navy warships of the First World War and the only surviving ship from the Gallipoli Campaign. The ship was gifted to the Trust on 19 May 2014 by Hampshire County Council. HMS M33 was initially recognised in the accounts at a value of £1,092,000, calculated on a total build basis discounted to take account of the ship's current state of repair.

In 1915, the original build cost of HMS M33 was £40,000. Uplifted for current value (2014), this cost was the equivalent of £2,863,000. The ship has been brought to sound and original condition, as far as possible, in the course of the conservation programme. However substantial elements of the original ship, notably the boilers and engines, were removed in the past and will not be replaced. It is therefore the view of the project management team that 62% of the original value is a reasonable measure of the heritage asset value of the ship on completion of these works, the discounted value being £1,775,000.

HMS Trincomalee Trust – HMS Trincomalee

The ship, HMS Trincomalee , is the oldest surviving Royal Navy Frigate and the oldest warship still afloat in the UK. She was acquired by the Trust for a nominal £1. HMS Trincomalee has been included at a valuation designed to reflect the estimated rebuild costs of the ship.

The value of HMS Trincomalee , on the basis of a full renewal cost of rebuild, discounted to take account of the ship's current state of repair, has been calculated at £21,000,000. The calculation is based on the comparable cost of the Frigate Hermione project, completed in 2012. This cost was pro-rated for the relative displacement tonnages. L’ Hermione ’s displacement tonnage was 1,166 tonnes and the rebuild cost was £16,700,000 in 2012. HMS Trincomalee’s displacement tonnage is 1,447 tonnes (per ‘Great Sailing Ships of the World’ by Otmar Schauffelen) therefore the rebuild cost is approximately £21,000,000.

The restoration to restore her to her original condition was completed in 2001, prior to this revaluation to her full rebuild cost.

HMS Victory Preservation Trust – HMS Victory

The ship, HMS Victory , was floated out of the Old Single Dock in Chatham's Royal Dockyard in 1765. In 1805 she achieved lasting fame as the flagship of Vice-Admiral Nelson in Britain's greatest naval victory, the defeat of the French and Spanish at the Battle of Trafalgar. She is the oldest commissioned warship in the world and remains a commissioned warship of the Royal Navy and the Flag Ship of the First Sea Lord. The ship was gifted to the Trust on 29 March 2012 by the Ministry of Defence.

HMS Victory has been included in the accounts at a value of £19,375,000 calculated on a total rebuild basis discounted to take account of the ship's current state of repair. This value was calculated by staff of the National Museum by reference to the costs incurred by the Association Hermione-La Fayette in their construction of the replica frigate, Hermione, on a pro-rata basis on respective tonnage displacement of the two ships.

The value of HMS Victory , on the basis of full renewal cost of rebuild, has been calculated as £50,000,000. The calculation is based on the comparable cost of the frigate 'Hermione' project, completed in 2012. This cost was pro-rated for the relative displacement tonnages. L’ Hermione ’s displacement tonnage was 1,166 tonnes and the rebuild cost was £16,700,000 in 2012. HMS Victory’s displacement tonnage is 3,500 tonnes therefore the rebuild cost is approximately £50,000,000.

HMS Victory today is far from 'new build' condition and during the next 10-20 years, it is projected that a sum in the region of £30,625,000 (at current costs) will be expended in bringing the Ship to (something close to) new condition. Whilst HMS Victory will not then be literally 'as good as new', any lower value would be offset by it being, at least in perception, the original ship.

Based on the above, the ship has been recognised in the accounts at a valuation of £19,375,000 reflecting an 'as new' value, discounted back for the expenditure anticipated to be required to achieve that outcome. An increasing value, over time, as renovations are carried out, will reflect the improving condition of the ship.

Page 54

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

Warrior Preservation Trust – HMS Warrior 1860

The original hull of the ship, HMS Warrior , was laid down at the Thames Iron Works and Shipbuilding Company based at Blackwall, London. Completed in 1861, she was the world’s first ocean-going, iron-hulled, armoured warship. The original hull of HMS Warrior was acquired by the Maritime Trust from the Ministry of Defence for £1 in August 1979, and transferred to the Warrior Preservation Trust in 1983. HMS Warrior 1860 has been included at a valuation designed to reflect the estimated rebuild costs of the hull.

In 1861, the original cost of the hull was £282,284. Uplifted for current value (2017) this cost was the equivalent of £25,040,000. The ship was brought to sound and original condition, as far as possible, during the restoration between 1979 and 1987 therefore it was not felt that any deductions to the original cost for disrepair was necessary.

Investment assets
Valuation
At 1 April 2020
Additions
Gains and losses before management fees
Less management fees deducted
Realised and unrealised gains and losses
At 31 March 2021
Historical cost as at 31 March 2021
Historical cost as at 31 March 2020
Investments By fund:
Endowment funds
Included in the above investments are:		 Group
Listed
Unlisted
2021
2021
£’000
£’000
33,602
-
79
-
6,413
(164)
6,249
-
39,930
-
31,411
-
31,331
-
39,930
-		 Group
Listed
Unlisted
2021
2021
£’000
£’000
33,602
-
79
-
6,413
(164)
6,249
-
39,930
-
31,411
-
31,331
-
39,930
-
-
-
-
-

17. Investment assets

HMS Victory Preservation Company:

The HMS Victory Preservation Company holds two portfolios of investments, managed by Ruffer and Cazenove respectively. The investment objective is to generate a total return of inflation plus 3% per annum over the long term. The market valuation at the year end is provided by the Fund Managers, the results of which are summarised as follows:

UK
UK government and fixed interest securities
UK bonds
UK equities
Portfolio funds
Others
Capital account
Overseas
Fixed interest
International bonds
International equities
Others		 2021
£’000
729
657
4,550
-
4,063
1,013
11,012
1,388
1,333
23,473
2,724
28,918
39,930		 2020
£’000
2,338
1,183
5,586
524
8,555
864
19,050
3,817
737
9,998
-
14,552
33,602

Page 55

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

18. Stocks

Stocks
Held by:
HMS Victory Preservation Company
NMRN Operations
Trading subsidiaries		 Group
2021
£’000
6,648
215
458
7,321		 Group
2020
£’000
6,650
215
492
7,357

Stock is valued at the lower of cost, (or at net current replacement cost, if materially different), and net realisable value after making due allowance for obsolescence and slow-moving items.

In March 2012, along with the gift of HMS Victory, the HMS Victory Preservation Trust received approximately 500m³ of teak, procured by MoD and valued by Timbmet, in order to undertake repairs to the Ship's planking. At the HMS Victory Preservation Company Board meeting of 13 November 2014, the Board endorsed the Technical Committee's recommendation that, for planning purposes, oak be used as the candidate timber for the conservation of the Ship. Samples of oak are presently being subject to material trials to assess their durability in the Ship's structure. Completion of the Phase 1 Trials (static accelerated weathering and UV trials of paint schemes, fixings and caulking) and Phase 2 Trials (dynamic trials of caulking), which will confirm the use of the oak, were delayed as a result of the pandemic. A contract is now in place with Southampton University’s nc2 Engineering Consultancy to complete the materials testing in 2021.

The teak timber stocks held are in laminated board form; that is, the boards have been manufactured from smaller pieces of timber. The University of Ljubljana and BMTRADA (formerly the Timber Research and Development Agency) were contracted to undertake testing of the quality of the laminates, both with a view to the use of teak in the Ship (should oak prove unable to meet the conservation objectives), and also to understand the timber's value should disposal be considered. The teak has been tested and found to have a durability test score of class one and a laminate strength of 'strength three' which is adequate for cladding but not necessarily marine usage. Should oak prove unsuitable for the conservation project, it is estimated that around 50% of the 500m³ of teak in stock will be required for use on the Ship over the next twenty years.

Although the stock of timber has been professionally valued, this can only be considered an estimate because due to the nature and quantity of the timber held, if it were ever to be sold in its entirety on the open market, there would likely be a negative impact on the market price. In 2021, the Board will set out an appropriate disposal policy for the surplus stock, which may include open market disposal in small quantities so as not to saturate the market.

In addition to the timber gifted by the MoD, a further amount of timber is also held for use in the preservation of the Ship. This timber remains the property of the Crown. Although the Trust has day to day use of this timber, ultimate control remains with the Crown. Accordingly, movements of this stock are recorded to recognise the donation of timber by the Crown as it is used on the Ship.

In 2016, 93 tonnes of oak and elm were donated by four Scottish Estates towards the conservation of HMS Victory . The logs were surveyed over winter 2016/17 and sawn into planks. The timber is being stored and seasoned by a timber specialist with the anticipated seasoning period expected to be between 4-5 years for the oak, and 3-7 years for the elm. When the final seasoned quantity is known, the timber will be valued at market value and brought onto the balance sheet.

Page 56

The National Museum of the Royal Navy (A company limited by guarantee)

Company number: 06699696

Notes to the financial statements

for the year ended 31 March 2021

19. Debtors: amounts falling due within one year

Trade debtors
Amounts owed by group undertakings
Other debtors
Prepayments & accrued income
VAT
Debtors: amounts falling due after more than one year
Other debtors
Accrued income		 Group
2021
£’000
707
-
37
2,355
272
3,371
Group
2021
£’000
443
3,000
3,443		 Restated
Group
2020
£’000
490
-
595
3,853
306
5,244
Group
2020
£’000
439
500
939		 Company
2021
£’000
-
503
7
120
-
630
Company
2021
£’000
-
-
-		 Company
2020
£’000
-
1,902
1
-
-
1,903
Company
2020
£’000
-
-
-

20. Debtors: amounts falling due after more than one year

The accrued income relates to the sale of the Royal Marines Museum, and a grant to NMRN Operations from RMA The Royal Marines Charity and payable in four annual instalments.

21. Creditors: amounts falling due within one year

Other loans
Trade creditors
Other creditors
Ministry of Defence
Other taxes and social security
Accruals and deferred income		 Group
2021
£’000
-
955
774
1,004
98
1,585
4,416		 Group
2020
£’000
128
1,732
876
-
126
1,505
4,367		 Company
Company
2021
2020
£’000
£’000
-
128
-
53
706
716
96
-
9
17
83
157
894
1,071

22. Creditors: amounts falling due after more than one year

Other loans Group
2021
£’000
96
96		 Group
2020
£’000
96
96		 Company
2021
£’000
-
-		 Company
2020
£’000
-
-

Page 57

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

23. Analysis of net assets between funds

Restricted funds:
Restricted funds
Royal Naval Museum
HMS M33 Trust
Unrestricted funds
Total Company funds at 31 March 2021
Funds held by:
NMRN Operations
NMRN Hartlepool
HMS Victory Preservation Company
HMS Caroline Preservation Company
HMS Trincomalee Trust
Warrior Preservation Trust Limited
Royal Navy Submarine Museum Trust
Royal Marines Museum Charitable Trust
Fleet Air Arm Museum
Total Group funds at 31 March 2021
Restricted funds:
Restricted funds
Royal Naval Museum
HMS M33 Trust
Unrestricted funds
Total Company funds at 31 March 2020
Funds held by:
NMRN Operations
NMRN Hartlepool
HMS Victory Preservation Company
HMS Caroline Preservation Company
HMS Trincomalee Trust
Warrior Preservation Trust Limited
Royal Navy Submarine Museum Trust
Royal Marines Museum Charitable Trust
Fleet Air Arm Museum
Total Group funds at 31 March 2020		 Tangible
Fixed Assets
£’000
-
2,238
1,775
4,013
-
4,013
22,380
-
19,514
12,560
21,008
25,290
18,651
735
8,198
132,349
Tangible
Fixed Assets
£’000
-
1,591
1,775
3,366
-
3,366
21,376
-
19,525
12,560
21,009
25,290
18,651
5,882
8,496
136,155		 Investments
£’000
-
-
-
-
-
-
-
-
39,930
-
-
-
-
-
-
39,930
Investments
£’000
-
-
-
-
-
-
-
-
33,602
-
-
-
-
-
-
33,602		 Net current
assets
£’000
1,158
24
-
1,182
1
1,183
2,911
4
7,212
-
474
1,086
287
2,055
1,139
16,351
Net current
assets
£’000
1,158
24
-
1,182
11
1,193
998
4
7,128
-
471
1,130
365
260
1,320
12,869		 Long term
liabilities
£’000
-
-
-
-
-
-
-
-
-
-
(96)
-
-
-
-
(96)
Long term
liabilities
£’000
-
-
-
-
-
-
-
-
-
-
(96)
-
-
-
-
(96)		 Total
2021
£’000
1,158
2,262
1,775
5,195
1
5,196
25,291
4
66,656
12,560
21,386
26,376
18,938
2,790
9,337
188,534
Restated
Total
2020
£’000
1,158
1,615
1,775
4,548
11
4,559
22,374
4
60,255
12,560
21,384
26,420
19,016
6,142
9,816
182,530

Page 58

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

24. Restricted and endowment funds

Restricted funds:
At
1 April 2020
£’000
HMS Caroline fund
104
LIBOR Royal Marines Museum relocation fund
1,054
Ministry of Defence Projects
-
Linked charities:
Royal Naval Museum
1,615
HMS M33 Trust
1,775
Total company restricted funds
4,548
NMRN Operations (excluding CJRS – see below)
14,615
Coronavirus Job Retention Scheme
-
HMS Victory Preservation Company
26,173
HMS Caroline Preservation Company
12,560
HMS Trincomalee Trust
21,028
Warrior Preservation Trust
25,060
Royal Navy Submarine Museum
18,590
Royal Marines Museum
459
Fleet Air Arm Museum
3,693
Consolidation adjustments
-
Total group restricted funds
126,726
Restricted funds (comparatives):
At
1 April 2019
£’000
HMS Caroline fund
104
LIBOR Royal Marines Museum relocation fund
1,729
Ministry of Defence Projects
-
Coastal Forces Heritage Trust
-
Linked charities:
Royal Naval Museum
1,532
HMS M33 Trust
1,775
Total company restricted funds
5,140
NMRN Operations
11,797
HMS Victory Preservation Company
26,180
HMS Caroline Preservation Company
12,560
HMS Trincomalee Trust
21,036
Warrior Preservation Trust
25,060
Royal Navy Submarine Museum
18,594
Royal Marines Museum
460
Fleet Air Arm Museum
2,742
Consolidation adjustments
-
Total group restricted funds
123,569		 Incoming
resources
£’000
-
-
135
647
-
782
3,741
1,570
-
-
7
-
-
1,189
-
(2,168)
5,121
Incoming
resources
£’000
-
-
328
140
83
-
551
9,932
-
-
-
-
-
-
1,000
(2,475)
9,008		 Outgoing
resources
£’000
-
-
(135)
-
-
(135)
(2,125)
(1,570)
(13)
-
(6)
-
-
(1,543)
(70)
1,777
(3,685)
Outgoing
resources
£’000
-
(675)
(328)
(140)
-
-
(1,143)
(4,720)
(10)
-
(8)
-
(4)
(5)
(78)
1,154
(4,814)		 Transfers
£’000
-
-
-
-
-
-
(1,100)
-
-
-
-
-
-
-
-
391
(709)
Transfers
£’000
-
-
-
-
-
-
-
(2,530)
-
-
-
-
-
-
-
1,321
(1,209)		 Gains and
At
losses
31 March 2021
£’000
£’000
-
104
-
1,054
-
-
-
2,262
-
1,775
-
5,195
(165)
14,966
-
1
26,161
-
12,560
-
21,029
-
25,060
-
18,590
-
105
(80)
3,543
-
-
(244)
127,209
Restated
Gains and
At
losses
31 March 2020
£’000
£’000
-
104
-
1,054
-
-
-
-
-
1,615
-
1,775
-
4,548
136
14,615
3
26,173
-
12,560
-
21,028
-
25,060
-
18,590
4
459
29
3,693
-
-
172
126,726		 Gains and
At
losses
31 March 2021
£’000
£’000
-
104
-
1,054
-
-
-
2,262
-
1,775
-
5,195
(165)
14,966
-
1
26,161
-
12,560
-
21,029
-
25,060
-
18,590
-
105
(80)
3,543
-
-
(244)
127,209
Restated
Gains and
At
losses
31 March 2020
£’000
£’000
-
104
-
1,054
-
-
-
-
-
1,615
-
1,775
-
4,548
136
14,615
3
26,173
-
12,560
-
21,028
-
25,060
-
18,590
4
459
29
3,693
-
-
172
126,726
4,548
14,615
26,173
12,560
21,028
25,060
18,590
459
3,693
-
126,726

The restricted and endowment funds of the individual museums are detailed in the accounts of the respective organisations.

Page 59

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

The HMS Caroline fund is for the conservation of the ship and its development as a visitor attraction. This work has been fully funded by HLF and the Northern Ireland Tourist Board (NITB) to the National Museum.

The LIBOR Royal Marines Museum relocation fund represents funding received for the Royal Marines Museum project which will include the relocation of the Royal Marines Museum to Portsmouth Historic Dockyard.

The Ministry of Defence Project fund represents funding received for five projects: D-Day 75th Anniversary Commemoration; Securing the Small Arms Collection; Improving the use of the Art Collection; Pirates and Anti-Piracy Exhibitions; and Digital Transformation.

The Coastal Forces Heritage Trust donation relates to a joint project to develop a major permanent exhibition on the Royal Navy’s Coastal Forces and is granted by the Coastal Forces Heritage Trust.

Consolidation adjustments reflect funds received by, and paid to, other group entities by the National Museum.

Endowment funds:
HMS Victory Preservation Co
HMS Trincomalee Trust
Warrior Preservation Trust Limited
Total group endowment funds
Endowment funds (comparatives):
HMS Victory Preservation Co
HMS Trincomalee Trust
Warrior Preservation Trust Limited
Total group endowment funds		 At
1 April 2020
£’000
33,541
5
986
34,532
At
1 April 2019
£’000
34,919
5
1,099
36,023		 Incoming
resources
£’000
80
-
-
80
Incoming
resources
£’000
157
-
-
157		 Outgoing
resources
£’000
(147)
-
-
(147)
Outgoing
resources
£’000
(243)
-
-
(243)
Transfers
£’000
-
-
(26)
(26)

Transfers
£’000
-
-
(113)
(113)		 Gains and
At
losses
31 March 2021
£’000
£’000
6,413
39,887
-
5
-
960
6,413
40,852
Gains and
At
losses
31 March 2020
£’000
£’000
(1,292)
33,541
-
5
-
986
(1,292)
34,532		 Gains and
At
losses
31 March 2021
£’000
£’000
6,413
39,887
-
5
-
960
6,413
40,852
Gains and
At
losses
31 March 2020
£’000
£’000
(1,292)
33,541
-
5
-
986
(1,292)
34,532
34,532

Endowment funds include funds donated by the Gosling Foundation for the maintenance and upkeep of HMS Victory.

24.1 Linked charities of the National Museum

SORP FRS 102 requires the activities of linked charities to be shown separately within these accounts in a manner similar to the presentation of restricted funds. The Royal Naval Museum and HMS M33 Trust are made up of the following:

Royal Naval Museum
1
Unrestricted funds
Restricted funds -RML 497 Fairmile (the ship)
Endowment funds- Johnstone Library fund
Total funds of the Royal Naval Museum
1
Unrestricted funds
Restricted funds -RML 497 Fairmile (the ship)
Endowment funds- Johnstone Library fund
Total funds of the Royal Naval Museum		 At
April 2020
£’000
1,508
83
24
1,615
At
April 2019
£’000
1,425
83
24
1,532		 Incoming
resources
£’000
647
-
-
647
Incoming
resources
£’000
83
-
-
83		 Outgoing
resources
£’000
-
-
-
-
Outgoing
resources
£’000
-
-
-
-		 At
Transfers 31 March 2021
£’000
£’000
-
2,155
-
83
-
24
-
2,262
At
Transfers 31 March 2020
£’000
£’000
-
1,508
-
83
-
24
-
1,615		 At
Transfers 31 March 2021
£’000
£’000
-
2,155
-
83
-
24
-
2,262
At
Transfers 31 March 2020
£’000
£’000
-
1,508
-
83
-
24
-
1,615
1,615

Page 60

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements

for the year ended 31 March 2021

Royal Naval Museum Balance Sheet summary
Heritage assets
Current assets
Net assets
Funds
Unrestricted funds
Restricted funds
Endowment funds
Total funds of the Royal Naval Museum
HMS M33 Trust
HMS M33 Trust Balance Sheet summary
Heritage assets
Funds
Unrestricted reserves
Revaluation reserve
Total funds of the HMS M33 Trust		 2021
£’000
2,238
24
2,262
2,155
83
24
2,262
2021
£’000
1,775
1,092
683
1,775		 2020
£’000
1,591
24
1,615
1,508
83
24
1,615
2020
£’000
1,775
1,092
683
1,775

25. Transfers between funds

NMRN Operations

A total of £1,100,000 (2020: £2,530,000) was transferred to unrestricted funds from restricted funds to compensate for project funds initially funded by unrestricted funds and to reflect the value of tangible fixed assets which were purchased using restricted funds, but are held for general purpose, in accordance with SORP FRS 102 section 2.26.

Warrior Preservation Trust

A total of £26,000 (2020: £113,000) was transferred to unrestricted funds from the Ward legacy endowment fund. This fund was to be used for the furtherance of education and to be maintained as a permanent endowment fund. On 6 October 2019, the Trust received approval from the Charity Commission to amend the objects of the fund under section s275 of the Charities Act 2011 to include funding of capital works on board the ship, this being in the best interests of the charity and its beneficiaries, ensuring the proper safeguarding of the asset. The trustees are satisfied that the capital works constitute an educational purpose to allow the ship to remain open and educate visitors.

Consolidation adjustments

The consolidation adjustments eliminate grants made between group entities.

26. Financial commitments

At 31 March 2021 the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Within one year
Between one and five years
In over five years		 Group
2021
£’000
427
1,586
23,076
25,089		 Group
2020
£’000
175
60
864
1,099

Page 61

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements

for the year ended 31 March 2021

27. Capital commitments and contingent liabilities

The company had capital commitments contracted but not provided for in the financial statements amounting to £424,000 (2020: £2,896,000). There were no contingent liabilities at 31 March 2021 (2020: £Nil).

28. Losses and special payments

28.1 Losses statement

There were no cases of losses occurring during the financial year (2020: No cases).

28.2 Special payments

There were no cases of special payments during the year (2020: No cases).

29. Related party transactions

The National Museum is a Non Departmental Public Body, sponsored by the Ministry of Defence (MoD). The MoD is regarded as a related party. Grant in Aid Funding from the MoD is disclosed in the Statement of Financial Activities.

The National Museum is a related party of: NMRN Operations; NMRN Hartlepool; HMS Victory Preservation Company; HMS Caroline Preservation Company; HMS Trincomalee Trust; Warrior Preservation Trust; Royal Navy Submarine Museum; Royal Marines Museum; and Fleet Air Arm Museum by virtue of the effective control over each organisation. A number of trustees of the National Museum of the Royal Navy are also trustees of the following charities:

Mr Michael J Bedingfield NMRN Operations, Warrior Preservation Trust Mr Mike Gambazzi NMRN Hartlepool Councillor Donna Jones Warrior Preservation Trust Ms Helen Jackson HMS Victory Preservation Company (appointed 24 February 2021) Mrs Mary-Montagu-Scott HMS Victory Preservation Company Rear Admiral Jonathan Pentreath HMS Caroline Preservation Company

The related parties of the individual museums are disclosed in the accounts of those organisations.

30. Events after the Balance Sheet date

These accounts have been authorised for issue by the Accounting Officer on the same date as the Comptroller and Auditor General's audit certificate.

31. Analysis of cash and cash equivalents

Analysis of cash and cash equivalents
Group Group Company Company
2021 2020 2021 2020
£’000 £’000 £’000 £’000
Cash at bank and in hand 6,632 3,696 1,447 361

Page 62

The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

32. Analysis of changes in net debt

Company
At
1 April 2020
£’000
Short-term borrowings
(130)
Total liabilities
(130)
Cash and cash equivalents
361
Total net debt
231
Group
At
1 April 2020
£’000
Short-term borrowings
(130)
Total liabilities
(130)
Cash and cash equivalents
3,696
Total net debt
3,566		 Cash
At
flows
31 March 2021
£’000
£’000
130
-
130
-
1,086
1,447
1,216
1,447
Cash
At
flows
31 March 2021
£’000
£’000
130
-
130
-
2,936
6,632
3,066
6,632		 Cash
At
flows
31 March 2021
£’000
£’000
130
-
130
-
1,086
1,447
1,216
1,447
Cash
At
flows
31 March 2021
£’000
£’000
130
-
130
-
2,936
6,632
3,066
6,632
-
6,632
6,632

33. Statement of financial activities (Company only, including the Royal Naval Museum and HMS M33 Trust as linked charities) for the year ended 31 March 2021

Unrestricted Restricted
funds
funds
Note
£’000
£’000
Income from:
Donations and legacies
Grant in Aid (revenue)
2
7,198
-
Grant in Aid (capital)
2
128
-
Donations
2
1
135
Other income
3
-
Total income
7,330
135
Expenditure on:
Charitable activities
8
529
-
Grant funding
8
6,811
135
Total expenditure
7,340
135
Net income/(expenditure)
(10)
-
Transfer between funds
-
-
Net movement in funds
(10 )
-
Reconciliation of funds:
Total funds brought forward
11
1,158
Total funds carried forward
1
1,158		 Linked
charities
£’000
-
-
647
-
647
-
-
-
647
-
647
3,390
4,037		 2021 Unrestricted Restricted
Linked
Total
funds
funds charities
£’000
£’000
£’000
£’000
7,198
3,375
-
-
128
126
-
-
783
2
468
83
3
-
-
-
8,112
3,503
468
83
529
567
-
-
6,946
2,806
1,143
-
7,475
3,373
1,143
-
637
130
(675)
83
-
-
-
-
637
130
(675)
83
4,559
(119) 1,833
3,307
5,196
11 1,158
3,390		 2020
Total
£’000
3,375
126
553
-
4,054
567
3,949
4,516
(462)
-
(462)
5,021
4,559

Page 63

The National Museum of the Royal Navy

(A company limited by guarantee) Company number: 06699696

Notes to the financial statements for the year ended 31 March 2021

34. Prior period adjustment

The Fleet Air Arm Museum was awarded a legacy from Sir Donald Gosling, through The Gosling Foundation in February 2020, the legacy being received in July 2020. Comparative information has been restated to accrue the income as at 31 March 2020.

The effect of this change on reserves is as follows:


Unrestricted
funds
£’000
Total funds brought forward as previously stated
21,272
Prior period adjustment
-
Total funds brought forward as restated
21,272
Net movement in funds
(799)
Total funds carried forward
20,473		 Restricted
funds
£’000
122,336
1,000
123,336
(164)
123,172		 Linked Endowment
Charities
funds
£’000
£’000
3,390
34,532
-
-
3,390
34,532
647
6,320
4,037
40,852		 2021
Total
£’000
181,530
1,000
182,530
6,004
188,534		 Unrestricted
funds
£’000
19,379
-
19,379
1,893
21,272		 Restricted
funds
£’000
120,262
-
120,262
3,074
123,336		 Linked
Charities
£’000
3,307
-
3,307
83
3,390		 Endowment
funds
£’000
36,023
-
36,023
(1,491)
34,532		 Restated
2020
Total
£’000
178,971
-
178,971
3,559
182,530

Page 64

E02713779 978-1-5286-3155-6