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2023-03-31-accounts

The National Museum of the Royal Navy

Annual report and accounts 2022-2023

HC 400

The National Museum of the Royal Navy

Annual report and accounts 2022-2023

For the period 1 April 2022 to 31 March 2023

Presented to the 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 18 December 2023

HC 400

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

© The National Museum of the Royal Navy copyright 2023

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 978-1-5286-4624-6

E03041096 12/23

Printed on paper containing 40% recycled fibre content minimum

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

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

Contents

Legal and administrative information ................................................................................................................. 2 Performance Report including the Strategic Report ........................................................................................... 3 Overview .......................................................................................................................................................... 3 Our Charitable Objectives ............................................................................................................................... 3 Our Vision ........................................................................................................................................................ 3 Our Mission ..................................................................................................................................................... 3 Our Strategic Aims .......................................................................................................................................... 3 Audiences ........................................................................................................................................................ 3 Collections: ...................................................................................................................................................... 4 Sustainability: .................................................................................................................................................. 4 Our People ....................................................................................................................................................... 4 How We Work ................................................................................................................................................. 4 Funding Arrangements .................................................................................................................................... 5 Our Group Structure ............................................................................................................................................. 6 Joint Statement from the Chair of Trustees and the Director General ......................................................... 7 Activities and Achievements ........................................................................................................................... 8 Plans for Future Periods ................................................................................................................................ 18 Financial Review ............................................................................................................................................ 21 Accountability Report including the Directors’ Report ..................................................................................... 24 Trustees’ Report and Governance Statement .............................................................................................. 24 Statement of Board of Trustees’ and Accounting Officer’s responsibilities ............................................... 33 Remuneration and Staff Report .................................................................................................................... 35 The Certificate and Report of the Comptroller and Auditor General to the Members of the National Museum of the Royal Navy and the Houses of Parliament ............................................... 43 Consolidated Statement of financial activities (incorporating the income and expenditure account) .......... 48 Consolidated and Company Balance Sheets as at 31 March 2023 ................................................................... 50 Consolidated and Company Cash flow statement ............................................................................................ 51 Notes to the financial statements ………………………………………………….……………………………………………………………. 52

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

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 Matthew Sheldon (appointed 1 December 2023)
Professor Dominic Tweddle (resigned 30 November 2023)
Chairman Admiral Sir Philip Jones GCB ADC DL
Trustee directors Rear Admiral Mark Anderson CB
Mr Michael J Bedingfield (resigned 23 October 2022)
Ms Katherine Biggs
Dr Andrew M Burnett CBE FBA
Mr Philip G Dolling
Mr Colin M Evans (appointed 5 December 2022)
Ms Helen M Jackson
Mrs Donna Jones (resigned 21 March 2023)
Major General Jeffrey S Mason
The Hon. Mrs Mary Montagu-Scott DL
Rear Admiral Jonathan P Pentreath CB OBE
Mr John Michael E Scott
Mrs Alison R Start
Mrs Sarah Whitcher (appointed 12 January 2023)
Mr Gavin Whitter
Mr Thomas C K Wright CBE (appointed 5 December 2022)
Auditors Comptroller and Auditor General
National Audit Office
157 - 197 Buckingham Palace Road
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

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

Performance Report including the Strategic 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’s unique and historically significant Royal Naval collections, ships and aircraft are located and displayed in museums at the National Museum of the Royal Navy in Portsmouth (including HMS Victory, HMS Warrior and HMS M33 and the national collection for the Royal Marines), the Fleet Air Arm Museum in Yeovilton, the Royal Navy Submarine Museum (including HMS Alliance) and Explosion! The Museum of Naval Firepower in Gosport, the National Museum of the Royal Navy Hartlepool (including HMS Trincomalee), and HMS Caroline in Belfast.

Our Charitable Objectives

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:

Our Vision

To be the world’s most inspiring Naval Museum, linking Navy to nation.

Our Mission

Inspiring enjoyment and engagement with the story of the Royal Navy and its role in shaping both our nation and the modern world.

Our Strategic Aims

We will deliver the vision and mission through three aims:

Audiences

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

Collections:

Sustainability:

Our People

We recognise that none of this will be achieved without the skills, dedication and hard work of our people. This requires that we:

Value and empower our people.

Our framework of values supports the culture of the organisation, guiding our everyday actions and being integral to our performance management framework.

How We Work

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 and collections care and access, and demonstrating greater cohesion in the delivery of the charitable objectives. The National Museum’s heritage collections 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 and located outside London, enabling people to learn, enjoy and engage with the naval story in the regions. The National Museum’s reach is further extended through its network of naval heritage partnerships and cooperations.

The Ministry of Defence (MOD) concluded its Independent Public Body review of the Service Museums (National Museum of the Royal Navy, RAF Museum and National Army Museum) in September 2023 and concluded that the National Museum of the Royal Navy is a credit to its respective service as custodian of the nation’s heritage archives of the Royal Navy. It noted that the pandemic exposed the financial weaknesses in the cultural and heritage sector; the closure of all museums led to a significant decline in self-generated income and for the MOD service museums, it exposed weaknesses in their financial models, with low levels of free reserves and no access to capital investment funding to preserve heritage assets. It observed that changes to the demographic mix in the UK, environmental and sustainability concerns, improved technological connectivity and rising inequality meant that the MOD service museums needed to re-evaluate their cultural, heritage and STEM offerings and their business and

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

financial models to ensure they meet future needs. The pace of change has quickened and there is a pressing need to build-up resilience in the sector in terms of financial stability; maintenance and preservation of buildings and assets and rapid digital adoption. It determined that there was no immediate economic value for any of the MOD service museums to cease their operation; merge with other MOD or national museums; transfer to another department or be transferred into the private sector. The last of these would result in significant risk to the national collections of the armed forces. It tested whether the museums had a clear rationale for continuing at arm’s length from government and concluded that the National Museum met the external technical expertise test to remain an arms’ length body, determining it appropriate that it remains in its current form of Non-Departmental Public Body (NDPB) with charitable status and continues to operate as arm’s length body to the MOD. The review made a number of recommendations relating to: building on the Service Museums’ good relationships with their sponsors and with each other; further development of research and STEM activities; good governance; efficiency; and, infrastructure plans to address maintenance backlogs. The Museums are working with their sponsors to determine how the recommendations may be implemented.

Funding Arrangements

The National Museum receives Grant in Aid funding from its sponsor, the Ministry of Defence, and raises other income through grant funding and sponsorship arrangements, legacies, charitable donations and through its commercial activities. Under the terms of its 2019 Financial Framework agreement for the receipt of Grant in Aid, the National Museum is permitted to build and carry forward an unrestricted “free reserve” from those selfgenerated funds over and above the Grant in Aid provided.

The restricted funds held by the National Museum are held in trust, under various agreements with donors, for specific purposes, to safeguard the future of the historic collections. These funds are used by the National Museum where it is appropriate to do so and in accordance with those trust agreements. The Trustees have reviewed the funds and determined that it would not be appropriate to divert them to support revenue activities, nor would it be legal to do so without the express consent of the Charity Commission.

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

Our Group Structure

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

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

Joint Statement from the Chair of Trustees and the Director General

With the COVID crisis receding, 2022-23 focussed on laying the foundations for a strong post-pandemic recovery. The bedrock for this has been the publication of a new strategy focussing on three key strands: sustainability, both financial and environmental; audiences; and collections. The aspiration is to transform the business.

The foundation of our financial sustainability is threefold, Grant in Aid from the Ministry of Defence (MoD), earned income from visitors, and income from fundraising. The MoD generously continued its COVID support package for another year, giving the National Museum a solid financial foundation. Visitors began to return in numbers to our sites, with over 667-thousand visits in all, over 38% up on the previous year. Despite this numbers remained behind projections for the first half of the year, slowly recovering so that we ended up only 1% adrift of our targets. It was a tense year! We continue to focus relentlessly on yield. A strategic review of our trading business has paid real dividends delivering a profit of £475,000 to the National Museum. Fundraising also makes an increasing

contribution with over £1M raised over the last year in donations and legacies. For future years we plan to address environmental sustainability, both because this is the right thing to do, and because it will help us contain spiralling costs. Cost inflation has hit us hard. But it is not all about revenue, a particular highlight has been the take-up of free tickets by those receiving free school meals, 11,000 people have seized this opportunity.

Our audiences are attracted by our fantastic collections, our unique ships and the intriguing ways that these are presented, driven by careful research so that we understand what visitors want, how messages are best communicated to them and how we can help the enjoy themselves. New exhibitions included Her Majesty’s Service, Nelson in his Own Words and Diving Deep: HMS Invincible 1758. More permanent improvements to our museums have included a revamped Carrier Experience in Yeovilton and the Big Repair, allowing visitors to get up close and personal with the work on HMS Victory. Almost the whole ship has been scaffolded for a fascinating major repair programme and our visitors are enjoying a once in a lifetime opportunity to see beneath the skin while still enjoying a traditional visit to the interior. Much planning has been put into the development of new Royal Marines Museum and into reworking our Hartlepool site.

Our collections have continued to expand with especial highlights being the only known contemporary model of HMS Victory, a builder’s-style, model of the torpedo boat destroyer HMS Sturgeon and the sledge flag of Captain Kellett of HMS Resolute 1852. As important has been the massive investment in the digital collections infrastructure.

These are major achievements, but only the icing on the cake, for the rest read on.

None of this could have been achieved without our excellent, hard-working, flexible and dedicated team. Everywhere there is outstanding expertise and relentless dedication to the charity. For proof just read our reviews. And for those who do not interact directly with visitors, well look at all other achievements documented here so thoroughly.

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

Activities and Achievements

Visitors

We received 667,253 visits across the group (2021-22: 482,903 visits)

During this period, the Museum’s sites were able to return to a more standard operation, although we have retained some of the changes, such as 5 day a week opening in off peak period at certain sites and the incentive to prebook online, which made us more efficient as we emerged from the COVID-19 pandemic. In August 2022, the refreshed and revised interactive experience at Action Stations in Portsmouth Historic Dockyard reopened for the first time since spring 2020 but with a new focus on the Royal Marines’ Commando Experience. In March 2023, HMS Caroline, with a newly recruited team, welcomed paying visitors for the first time in 3 years. HMS Warrior was closed from December 2022 to March 2023 to enable essential maintenance to the ship to be completed.

Against a difficult trading environment for the whole heritage sector, both ticket sales and visitor numbers were reasonable, but had not uniformly returned to pre-COVID levels. The opening 6 months of the year, and particularly the peak trading weeks, were disappointing and below targets; in contrast, the final 6 months saw stronger performance and recovery. With the National Museum so dependent on self-generated income, this created significant financial pressures which had to be managed in year, and it is a credit to our General Managers that they were able to adjust and welcome nearly 670,000 visitors to our museums and ships. Of particular note is that visits to the National Museum of the Royal Navy Hartlepool were the strongest they had been since the site became part of the National Museum in July 2016.

----- Start of picture text -----
667,253 Site Visits in 2022-23
Portsmouth Galleries 140k HMS Warrior, 90k HMS Victory, 205k
Fleet Air Arm Museum, 71K NMRN Hartlepool, 50k Royal Navy Submarine Museum 59k
Explosion! 17k HMS M33 34k
----- End of picture text -----

Customer Relationship Management (CRM) is key to ensuring we are able to understand our visitors, improve customer services and communication, and ultimately assist in increasing profitability and sales. During the period, we have made key improvements to our CRM system, growing our mailing lists to help inform visitors of the value of their ticket and to drive return visits, in renewal sales and in data analysis. This key data has helped to inform projects including sustainable travel, accessibility and expansion of our Veterans Offer across all sites. Centralising our customer engagement team, data feeds and reviews has enabled us to use our customer feedback to better inform business decisions and to improve our response rate to phone calls, emails, online customer reviews (TripAdvisor, Google, etc.). Online reviews are managed through a new piece of software that allows us to respond to 100% of reviews, and to share the many excellent reviews focused on our staff and volunteers.

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

The National Museum actively seeks visitors’ feedback on their enjoyment and perception of quality of their visits. Alongside monitoring social media reviews, we also measure visitor satisfaction in a more structured way through the monthly ‘Voice of the Visitor’ survey which is conducted through a mixture of in person and online questionnaires. These measure satisfaction in everything from exhibitions to toilets, and rate visitor experience including the quality of welcome, the friendliness of staff and value for money. Through 2022-23 these have been consistently high but of course provide the essential feedback for making improvements.

The ticket data, 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 been used to provide valuable insight.

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 retail, catering, publishing guidebooks, venue hire, Laser Quest and brand licensing. The return of sites to more normal operation has greatly boosted the performance of the retail and food and beverage functions. A great shop and fantastic café are essential to a visit, a private event in one of our unique venues can be a long-lasting memory, and the profit generated from these activities is an also essential income stream to support our wider purposes. This was the first full year of a new Commercial Strategy for the Trading Company (approved in December 2021). Thanks to strong leadership, key investments (such as the new Warnefords Café at Fleet Air Arm Museum), and a focus on profitability, visual merchandising and product optimisation, the Trading Company’s performance demonstrated a significant improvement and contribution to the National Museum.

In 2022-23, the company delivered a total income of £2,251,000 (2021-22: £1,640,000) generating a profit of £475,000 (2021-22 £13,000).

Social Value and Learning

For the first time this year, the National Museum has sought to quantify the value of our activities within a separate ‘Social Value Report 2022-23’ which is published at www.nmrn.org.uk. This sets out the impact of our work on the Naval Family, on diverse communities across the UK, on families and on individuals. The work is grouped under three key strands: improving health and well-being; strengthening relationships and building diverse communities; and, developing skills and encouraging learning and participation.

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

This reporting will continue to develop in future years and we expect it to have both a core of stable activities and short-term project initiatives which are highlighted in case studies. Notable impacts to highlight this year are:

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

range of gallery handling opportunities, including the ‘Great British Take Off’ aircraft modelling at Fleet Air Arm Museum and transcribing the letters for the exhibition ‘Nelson in his Own Words’.

Communications

In terms of digital communications, our ‘meaningful engagement’ model was used to measure our digital reach and engagement, reflecting not just views of digital content but meaningful interactions with it. Our strong digital presence has grown through the period. Our engagement rate (that is the number of people interacting with a social media post against those who saw it) has increased from 2.8% to 7.6%, significantly above industry average.

Media and filming work across the National Museum this year clearly demonstrated the breadth and variety of our work and ability to capture headlines, broadcast interest and reflect on national events in our role in sharing the Royal Navy’s story. Our press, PR and media coverage realised £7M in Advertising Value Equivalent (2021-22: £8.5M) and a potential audience of 24 billion (based on the reach of every outlet we have featured in), with 3,921 media mentions across print, broadcast and online channels.

Special mention should be made of the sad passing of Her Late Majesty Queen Elizabeth II, to whom we paid our respects in recognition of the unwavering support of her own family to the National Museum and to the Royal Navy family through the display of our touching tribute, Her Majesty’s Service, The Queen’s role at the heart of the Royal Navy family.

We were extremely fortunate to welcome our patron, HRH The Princess Royal, to the official opening of our D-Day veteran LCT 7074 in Southsea.

Our important role in the saving of a rare Arctic sledge flag, used in the hunt for survivors of Captain Sir John Franklin’s doomed expedition, and owned by Vice-Admiral Sir Henry Kellett, saw considerable media interest, greatly helped by support from the ever-popular Michael Palin. Following an export bar, the campaign raised funds just in time to save the flag from going abroad to a private buyer.

Regionally, our media stories covering our newly-refurbished Carrier Experience at Fleet Air Arm Museum and the longawaited reopening of HMS Caroline in Belfast were warmly received.

Broadcast opportunities and online channels including YouTube and podcasts ensured that we reached valuable and varied audiences throughout the year. These included: the BBC’s ‘Inside the Factory’ with a fascinating piece about dazzle camouflage featuring HMS M33; our HMS Victory guides testing mobile phones on ‘The Gadget Show’; features on the popular day time programme ‘Bargain Hunt’; and the US stalwart ‘CBS News’ which featured bestselling author David Grann and his use of our historic ships for research. Popular podcasts from ‘History Hit’ and historian Sam Willis were recorded from our ships and the Fleet Air Arm Museum, whilst the hugely popular YouTube channel ‘Epic History’ filmed a number of episodes with us to reach many millions online.

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

Exhibitions and Programming

Within this difficult financial environment, the National Museum team has drawn on a mixture of external grant funding, partnership support and use of reserves in order to deliver both a special exhibition programme and improvements to our permanent exhibitions. These have helped us reflect on the link between the Navy and the Nation across the centuries and also to improve our representation of the current Royal Navy and its people.

Our special exhibitions included:

Investments into our permanent galleries and exhibitions included the John Fieldhouse Building at the Royal Navy Submarine Museum in Gosport and to the ‘HMS Gallery’ in Portsmouth to update the contemporary Navy story. In Portsmouth, for example this now reflects the strategic context facing the Navy in 2023, and looks ahead to the changes in technology and personnel which are to come in this ‘contested world’. More significant investments included:

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

Hartlepool Borough Council to develop a shared vision for the regeneration of the area around the dock basin for the Waterfront Regeneration Project. A vision document was created that demonstrated the cultural and commercial use of the site, the addition of facilities dedicated to the care and conservation of historic ships, skills training workshops, new galleries that support STEM education (science, technology, engineering, arts and mathematics) and the creation of exciting new experiences to complement the activity taking place both on the National Museum site and the wider Waterfront area. In parallel, Hartlepool Borough Council commissioned a separate study for the Museum of Hartlepool and the Wingfield Castle, offering the opportunity to ensure a holistic approach to proposing future options for the

whole site. The project was successful in securing funding of £8.5M from the Tees Valley Combined Authority for

the cultural component of the Waterfront Regeneration Project. Hartlepool Borough Council will be investing £4M for the conservation of its 1934 paddlesteamer, PS Wingfield Castle, and the essential replacement of the dam board to safeguard HMS Trincomalee, which the Council has assured will be prioritised. A development funding agreement between NMRN Operations and Hartlepool Borough Council was signed on 31 January

2022, releasing £1M to commence the first phase of the project. Further funding was released in June 2022 to enable the purchase of the Vision Retail Park for £3.4M by NMRN Operations, as a key milestone in delivery of the vision, to expand the existing site and to form the core of the major new galleries expansion. The next phase of the project will see NMRN Operations redevelop the William Gray building and the Fighting Ships experience. Hartlepool Borough Council will also develop options studies for replacing the dam board and sealing the dock in which HMS Trincomalee sits.

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

Collections and Research

This year has seen major advances in collections access, collections information, and the external recognition of the National Museum’s standards.

After a period of closure due to the impact of COVID-19 and the very major collection moves into the new Collections Centre, we reopened the Collections Access Service at the start of June 2022. This now supports researcher visits to collections in the Research Room in Portsmouth and remote requests for information on collections elsewhere. The shift in user demand to virtual access is clear and a critical improvement in September 2022 was the opening of our collections portal www.nmrn.org.uk/collections. This now provides access to a growing database of over 400,000 catalogue records from the National Museum’s collection, many with supporting images. The portal is already attracting an average of 2,000 users a month, with multiple searches which help us understand areas of research interest.

Investment and development of the National Museum’s Digital Asset Management System (DAMS) has been fundamental to the success of the collections portal. The DAMS is used both to manage images of our collections and to feed into our collections management software. A small team of curators, boosted by volunteer effort, has focused on ingesting imagery from historic digitisation projects and adding all new collections imaging. This has grown the images held in the DAMS to nearly 33,000; the system will be critical to both collections access and collections information in future years.

The National Museum’s archive collections and service have received welcome external recognition. The National Archives have recognised Storehouse 12 in Portsmouth as a ‘Place of Deposit’ under the Public Records Act, licensing our Portsmouth site to hold Public Records.

The National Museum has continued to loan our collections extensively, with over 100 loan agreements covering in excess of 9,000 items. Our ability to accept new material on loan from private donors for exhibition had been restricted by insurance costs, however, after a number of years, the National Museum now has the support of the Ministry of Defence and Arts Council England to participate in the Government Indemnity Scheme. The scheme provides indemnity for loaned objects made accessible to the public in temporary exhibitions, on long-term loan or loans for study and research and removes the need for commercial insurance for these objects.

In this period, the National Museum considered 835 separate offers to donate material and has acquired just under 400, running to thousands of individual items. Highlights from all donations, purchases and transfers have included:

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

At the same time, then National Museum continues to rationalise our collections so that resources are used most efficiently. This period, the managed disposal of duplicated collections in our library holdings was completed and reduced our stock by over 4,000 individual volumes.

Alongside these successes we have to acknowledge the unfortunate end of the National Museum’s management of the Devonport Collection which is housed at the Devonport Heritage Centre. After much investment in staff and volunteer time in recent years the collection is now better managed and better understood. In current circumstances, however, the National Museum is unable to accept the transfer of ownership of the collection and the financial responsibilities which would follow, and our oversight ended in March 2023.

Our conference, seminar and research activity has grown modestly from 2021-22, highlights have included:

Conservation and Historic Ships

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

the National Museum teams and contractor. The ship was closed to the public during this essential work which also allowed the National Museum’s teams to complete internal painting, deep cleaning, and other crucial maintenance. The ship reopened to the public on the 1 April 2023. This has been a significant investment in our historic fleet and we are hugely appreciative of the grant from the Royal Navy which made this possible.

Charitable Fundraising

The Trustees of the National Museum have overall responsibility and accountability for our fundraising and income generation activities and monitors such activities through a Trustees’ Fundraising Committee that reports to the Board of Trustees.

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

The National Museum has an in-house Fundraising team that raises funds to support our core work. This team develops relationships with donors, grant makers and corporate partners to fund areas of our work including, acquisitions, conservation, public programming and the delivery of our major capital projects.

Notable supporters include the National Lottery Heritage Fund, National Heritage Memorial Fund, The Art Fund, the American Friends of the National Museum of the Royal Navy, Society of the Friends of FAAM, Friends of the Royal Navy Submarine Museum, HMS Victory Preservation Endowment Fund, Airbus, BAE Systems Maritime, Babcock, Lockheed Martin, Newton Europe, Notsew Orms Sands Foundation, Society for Nautical Research, the Gosling Foundation and the Michael Cobham Foundation.

The National Museum of the Royal Navy (Charity number: 1126283) is registered with the Fundraising Regulator and adheres to the Code of Fundraising Practice. We are committed to our Donor Charter, produced to assure donors and potential donors of our accountability and integrity, and an Ethical Fundraising Policy in place.

Whilst the National Museum collects explicit opt-in consent for communications by email, post, phone and text, it chooses to only use email for donation appeals; each email has the option to unsubscribe. Major appeals are raised for significant acquisitions, however, these usually occur no more than once a year, and do not usually include appeals targeted at individuals for the purposes of procuring money or property. The National Museum does not generally conduct proactive solicitation for legacies or gifts in wills but will provide information on request and details on how to create a legacy is available on our website. The exception to this is when the National Museum participates in the UK-wide Free Wills Month; in this instance information about how to leave a legacy may be included in our consent based e-newsletters.

The National Museum did not use any non-directly employed fundraisers, nor any commercial participators to carry out any fundraising activities during the period. In 2022-23, the National Museum did not receive any complaints about its fundraising activities or practices and no complaints were made to the Fundraising Regulator.

Commemoration and Remembrance

The National Museum commemorated the 40[th] anniversary of the Falkland’s conflict in April and May 2022 through a series of talks and blog posts. We were delighted to be able to host a number of talks given by Rear Admiral Chris Parry and worked in conjunction with the National Army Museum and the Royal Airforce Museum to mark this important period in living memory.

HMS Victory is a key focus for remembrance of those members of the Royal Navy who have died while on active service. The Victory Gallery marks remembrance activities on the Ship by telling the story of Queen Victoria placing a wreath on the spot where Nelson fell on Trafalgar Day, 21 October. The laying of a wreath to mark Trafalgar Day as an act of remembrance continues to be an exceptionally important day in the National Museum’s calendar,

Supporting our Sponsor – The Royal Navy

The National Museum provides a unique perspective to the heritage, history, culture and traditions of the Royal Navy, and the close relationship between the museum and its sponsor organisation is essential to the effective delivery of the museum’s purpose. During 2022-23, the National Museum has worked with the Royal Navy to successfully host events, support personnel and help with recruitment. In turn, the Royal Navy has also supported the museum at STEM events, community projects and networking groups. The National Museum established a very effective Royal Navy networking group, which has supported exhibitions, tours of historic vessels, and events, and has also supported veterans to join the National Museum community. Highlights included:

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

Post balance sheet events

Post balance sheet events are disclosed in note 32 to the accounts.

Plans for Future Periods

National Museum of the Royal Navy Strategy: 2022-2027 and beyond

Like many other museums, the COVID-19 pandemic prompted us to reflect on the role we play, not only nationally and internationally in telling the story of the Royal Navy, but at a local and regional level where our museums play a vital role in contributing to the tourist and visitor economy. The backdrop to this reflection is that we know people’s priorities have changed and will go on changing as they come to terms with the new economic and day-to-day challenges. We also know that visitors’ expectations have moved on, what they value in a museum experience is not necessarily the same as it was. The stories they expect us to explore and how we reflect the experiences and perspectives of the protagonists has altered. The expectations about how we present these stories has transformed too, with technology and the integration of physical and virtual exhibitions moving apace, and we need to respond.

In 2022, our Trustees took a step back to understand who we are, who we want to be and what kind of role we want to play in the future; we needed a refreshed approach to lead us into the next 10 years and beyond. This new strategy, containing a long-view vision for the National museum in 2035, is set out at

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

www.nmrn.org.uk/news/national-museum-royal-navy-strategy-2022-2027-and-beyond. It sets out how we will deliver our vision and mission through three strategic aims, sustainability, audiences, and collections, and recognises that none of this will be achieved without the skills, dedication and hard work of our people. The strategy is underpinned through our annual business planning cycle that sets out the priority and phasing of operational and project delivery each year.

Sustainability

The key focus for the National Museum for the year ahead will continue to be on recovering financial resilience and sustainability through cautious cost management, fundraising and regeneration or replacement of the income streams and commercial activities damaged by COVID-19 and the continuing fragile UK economy. The wider economic challenges and cost of living crisis continue to have an impact on public spending and also on our operating costs, and the additional Grant in Aid funding we have been generously awarded by the Royal Navy to ensure our financial survival since the pandemic hit in 2020-21 will not continue beyond 2023-24 (up to £2,000,000 in 2023-24).

The National Museum will continue to engage with Navy Command to renegotiate a financial framework that supports the core operating costs that we incur in delivering activities in the public interest and an agreed capital strategy which delivers specific, shared outputs and outcomes.

We will complete and implement our Governance Review to improve the efficiency and effectiveness of our governance framework, reinforcing the concept of ‘one museum’, and improving programme and project management.

We will continue to build a modest but appropriate free reserve in accordance with our Group Reserves Policy, with the aim of holding the equivalent to 4 months’ core operating costs for the Portsmouth Naval Base activities (the greatest potential area of exposure) as free reserves by the end of 2024-25.

We will develop and implement our Sustainability Strategy, to deliver environmentally and financially sustainable operations, and reduce our carbon footprint.

Audiences

The National Museum will grow and diversify our audiences onsite and online and explore different Royal Navy story perspectives through our diverse communities and collections. We will work closely with the Royal Navy to support their Global Navy initiative and offer embedded opportunities to promote the modern service and its message through our sites and activities.

We will develop and implement our core linked strategies on Interpretation, Research, Audience Development, Digital and Environment/Sustainability to support a shared transformation across our sites and activities, engaging new and diverse local, national and international audiences.

We will implement our Site Improvement Plans and develop new and improve existing exhibitions, to ensure our sites and stories remain exciting and vibrant to a diverse audience.

Collections

Our commitment to any new capital projects or large acquisitions will be limited to only for those essential to our purpose. We will prioritise the care, conservation and presentation of our existing collections and sites, including consolidation of collections with partners where resources are duplicated. We will take forward plans for the development and delivery of funded projects including the HMS Victory, NMRN Hartlepool, the new Royal Marines Museum, HMS Caroline, NMRN Portsmouth and the Armada Maps, ensuring these are financially resilient to secure long-term sustainability and protect our heritage assets.

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

We will continue to progress our work in ensuring our collection is both physically and digitally accessible.

People

We will continue to focus on our people, to ensure that our National Museum is recognised as a great place to work, and delivering on our commitments to equity, diversity and inclusion. We will plan to implement our pay policy to pay a minimum of UK Living Wage to our staff. We will continue to provide our “staff voice” through the excellent work of our ‘Working Together Group’. We will support the development of our teams through our people plans, focusing on health and wellbeing, talent management and workforce planning.

Principal Risks and Uncertainties

The National Museum of the Royal Navy’s approach to risk management is detailed in page 32. The National Museum has operated a robust risk management framework throughout the report period and the trustees formally consider the risks to the delivery of the strategy and corporate plan at each of its meeting. The principal risks and uncertainties are outlined below. These are the most significant risks that may adversely impact our business strategy, financial position or operational performance.

Risk Consequences Planned Mitigation
Insufficient funding
to deliver the
charitable objects		 Funding shortfalls impact ability to
adequately fund services
delivered in the public interest,
including the conservation and
maintenance of historic ships and
the collection		 The most significant risk faced by the National Museum
centres around its self-generated income streams.
Additional Grant In Aid funding from the Royal Navy has
been essential since the pandemic to ensure the National
Museum’s financial resilience and its ability to deliver public
benefits, until stable trading and operating performance
can be resumed. This additional funding will cease in 2024-
25.
The National Museum will continue to engage with Navy
Command to ensure it is funded to continue to deliver
services that are in the public interest but that are not
commercially viable, recognising that it may be necessary to
scale back some of these activities.
The mid to long-term budget plan will continue to focus on
building financial sustainability and flexibility, with a
commitment to building the free reserves in accordance
with the Trustees’policy.
Major project
delivery failure		 Delays, cost overrun, excessive
operating costs, fundraising
shortfall, impact on cash flow,
quality of project		 The National Museum will continue to develop and embed
governance and oversight of key projects through the
Programme Board and ensure all major projects follow the
standard project management methodology. Improvements
will continue to be made to project cashflow forecasting
and “in operation” business cases and budgeting for all
majorprojects.
Over complex
governance
arrangements		 Goal incongruence
Ineffective or inefficient operation
of the National Museum		 The National Museum continues to review and consolidate
its governance and operating structures to ensure these
remain fit for purpose, with sound control of operating
costs within a sustainable but flexible staffing model for
futureyears.

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

Risk Consequences Planned Mitigation
Environmental
sustainability
across the sites		 Failure to meet legislative
obligations under the
Environment Act.
Reputational damage and
negative impact on ability to
attract external funding		 The National Museum is developing its sustainability
strategies to support the net zero targets introduced by the
Government and to work with its partners to reduce its
environmental impact across its whole estate.
Environmental objectives and risks will be embedded into
the decision making and project evaluation processes.
Progress is, however, likely to be constrained by availability
of funding.

Financial Review

Statement of Financial Activities for the Year Ended 31 March 2023

Total incoming resources for the National Museum in 2022-23 amounted to £29,633,000 (2021-22: £27,089,000) and relates to Grant in Aid, donations (restricted and unrestricted), admissions and associated income from charitable activities, trading subsidiary income and investments.

The change in incoming resources from the previous reporting period resulted primarily from the receipt of various restricted grants by NMRN Operations in relation to the HMS Victory conservation project (£7,881,000), the purchase of the Vision Retail Park and the development project in Hartlepool (£3,650,000), completion of the LCT7074 project (£805,000), and the Fleet Air Arm Museum carrier experience (£636,000). In the previous period, significant incoming resources related to the endowment7 for HMS Caroline (£12,500,000).

Admissions income for 2022-23 increased to £5,542,000 (2021-22: £5,307,000) and income generated by the trading company on non-charitable activities showed a stepped improvement to £2,251,000 (2020-21: £1,640,000).

An uplift in Revenue Grant in Aid was received to £6,217,000 (2021-22: £5,476,000) to support recovery from the longterm impact of the pandemic, enabling the National Museum to build its free reserves from self-generated income to ensure future financial sustainability.

An increase in expenditure to £19,040,000 (2021-22: £15,361,000) reflected the increased operations, trading and fundraising costs flowing from the first full year of near-normal activity post-pandemic and also the increase in grantfunded project activity. The net result was an operating surplus of £8,843,000 for the year (2021-22: £14,323,000).

After adjustment for net losses on endowment fund investments totalling £1,690,000, gains on revaluation of fixed assets of £3,507,000 and recognition of actuarial losses on defined benefit pensions schemes of £485,000, the net movement in funds for the year was an increase of £12,835,000 (2021-22: £15,762,000). The total funds carried forward at 31 March 2023 was £217,131,000 (31 March 2022: £204,296,000).

Balance Sheet

The net assets as at 31 March 2023 amounted to £217,131,000 (31 March 2022: £204,296,000).

The value of heritage assets (over the capitalisation threshold and accessioned since 1 April 2000) represents 50% of the National Museum’s net assets at £107,271,000. 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 1.8. Heritage assets added to the collection are included in the accounts at acquisition cost or on the basis of internal valuations estimated by the curatorial staff and determined by their experience and judgement as set out in note 1.9.

The National Museum held £21,166,000 cash in bank and in hand at 31 March 2023 (2022: £16,982,000 Restated ).

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

Reserves

The Trustees regularly monitor the levels of the Group's reserves and seek to take correction action as necessary. As at 31 March 2023, the company’s unrestricted funds (excluding the revaluation reserve) stood at a deficit of £639,000 (31 March 2022: £714,000 deficit). This deficit balances arises from loan amounts falling due after more than one year payable to Hartlepool Borough Council and used to fund the purchase of the Sim Comfort Collection.

As at 31 March 2023, the level of the company's free reserves (defined as net current assets attributable to unrestricted reserves excluding designated funds) stood at £4,000 (31 March 2022: £5,000).

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 and as such, the Grant in Aid is fully expended. 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 revenue Grant in Aid of £6,217,000 the maximum carry forward is £124,000. Free reserves for the Group are not, therefore, built within the parent company but within the subsidiaries from selfgenerated income streams. As such, this free reserves balance does not represent a going concern risk to the company.

The Group’s free reserves stood at £5,200,000 (31 March 2022: £4,780,000).

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 four months’ operating expenditure for the greatest potential area of exposure (Portsmouth Historic Dockyard, including the Gosport sites) by 31 March 2025, increasing to six months’ operating expenditure for the entire National Museum by 31 March 2030. 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, £3,391,000 (31 March 2022: £2,267,000) are insufficient to meet long-term development needs and there are risks associated with unanticipated short-term demands. The Trustees will continue to seek to improve the free reserves position in NMRN Operations in accordance with the reserves policy through consolidation and reduction of costs in future periods and 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 £1,420,000 (31 March 2022: £1,299,000). These restricted funds primarily relate to major capital projects.

The Group’s restricted funds stood at £136,077,000 (31 March 2022: £128,716,000). This includes tangible fixed assets of £132,177,000 and net current assets of £3,900,000. The surplus on 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 Group holds £54,666,000 (31 March 2022: £56,002,000) as endowment funds within its subsidiaries for HMS Victory, HMS Caroline and HMS Warrior and HMS Trincomalee.

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 has been undertaken by its subsidiaries the HMS Victory Preservation Company and the HMS Caroline Preservation Company.

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

HMS Victory Preservation Company aims 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 company should be able to maintain the real value of its investment portfolio while funding annual expenditure for maintenance and repair estimated in the region of 3% of 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.

HMS Caroline Preservation Company aims to generate a total return of CPI plus 3-4% per annum. Returns from these funds are required to support the core costs of delivery of the charitable objectives, equating to approximately £550,000 per annum, with an expectation that the level of financial support will reduce every year as HMS Caroline relaunches and ultimately becomes a self-funding museum. The long-term reserves are to be invested to preserve the long-term real value of the assets, however, the HMS Caroline Preservation Company has full flexibility to spend the capital in the furtherance of its objectives, and the company adopts a total return approach to investment, such that investment returns are to be sought from a combination of capital growth and income but without specific targets for each element. The income generated by the portfolio is to be reinvested. While the capital is available for distribution, the intention is to limit spending from capital by maximizing income from the operation of the ship as a visitor attraction.

The key risk to the long-term achievement of the investment objectives 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 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 companies. Each company has an Investment Committee, charged with agreeing a suitable asset allocation framework with its appointed professional fund managers.

For the year ending 31 March 2023, income from investments totalled £685,000 with investment management costs of £194,000 and unrealised net losses of £1,690,000 resulting from market volatility.

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

Matthew Sheldon Director General and Accounting Officer

15 December 2023

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

Accountability Report including the Directors’ 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, under charity law, 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 2. Overall control of the National Museum is the responsibility of the members who own the company.

The Trustees have had due regard to the guidance issued by the Charity Commission on public benefit. Our strategic aim to grow and diversify our global audiences considers how we may reduce identified barriers to access and engagement at every opportunity. Our ‘Social Value Report 2022-23’, summarised from page 9, sets out the impact of our public benefit delivery under three key strands: improving health and well-being; strengthening relationships and building diverse communities; and, developing skills and encouraging learning and participation.

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 systems described have been in place for the year under review and up to the date of approval of the annual report and accounts.

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 for 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’s financial reporting requirements and guidance on use of public funds, ‘Managing Public Money’. 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 Board of Trustees

The Board is responsible for ensuring leadership through effective oversight and review. It shapes the strategic thinking and sets the tone for the National Museum. The Board has delegated elements of its responsibilities to subcommittees (Audit and Governance; Nomination and Remuneration; Fundraising; Digital; Collections, Research Learning and Access) ensuring the charitable objects are met.

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

Each Board of Trustees of the respective subsidiary companies remains responsible for their governance, which are

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

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 Plan 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.

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. Following the 2021 review that compared governance arrangements against the Charity Governance Code, work continued to progress the action plan. This included the introduction of a Code of Conduct for Trustees and Committee Members, a Trustee Diversity Policy, Trustee Role Profiles and an updated Trustee Recruitment Policy.

The Board completed a review of the group governance structure within the period, with the objective of identifying a simple, clear, directly accountable governance structure that supports board effectiveness, protects the historic assets, removes duplication, is flexible regarding future strategic developments, and maintains and builds stakeholder confidence. The outcome of the review resulted in an agreed direction of travel for a phased approach to simplifying the governance structure, delivering clearer lines of accountability and responsibility, which will be delivered over the medium-term.

A review of the composition of the Board and its committees was completed in 2022, to ensure that the skills mix supported effective decision making. This review also considered the diversity of the Board. As a result of this review, new trustees had been appointed to support the skills balance and to strengthen the Board. The diversity of the Board is being addressed through new initiatives including the development of a Youth Advisory Panel to support the Board and provide guidance from a younger audience. Training has been provided to the Trustees to support their understanding and responsibilities of Equity, Diversity and Inclusion.

The Audit and Governance Committee used the National Audit Office’s ‘Audit and Risk Assurance Committee Effectiveness Tool’ to assess its effectives against good practice. The review, which was completed during August 2022, identified 12 areas for improvement from a possible 178 good practice recommendations and action was taken to address these.

Trustees are recruited and appointed in accordance with the Charity Commission’s guidance “Finding new trustees” (CC30), the principles of the relevant sections of the Governance Code for Public Appointments and the Trustee Recruitment Policy. A 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, projects and risks. Tailored training may also be arranged. Recent appointees continue to confirm their satisfaction with this process.

The Board is comprised of a maximum of 16 Trustees, with the Director General (or his representative), the Executive Directors, the Chair of NMRN Operations, and a senior representative of our sponsor, Navy Command, in attendance. The Board meets quarterly or as and when required in line with its Articles of Association.

Delegated Responsibility to Committees

Board decisions are informed by appropriately detailed management reports, which have passed through the relevant subsidiary boards or committees as appropriate, and that in turn have the specific membership and skill sets to enable 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.

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

The majority of Board decisions are only taken after the appropriate committee has met and discussed the issue and made their recommendations. The Director General also attends the meetings of the National Museum’s committees.

Committee Responsibilities
Audit and Governance Oversight of all auditing, risk management and governance aspects of the Group, reporting
back to the Board when necessary.
Collections, Research,
Learning and Access		 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.
Digital Review and development of the digital vision and infrastructure for the National
Museum.
Fundraising Leading 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 coordinating 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.
Nomination and
Remuneration		 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 performance related bonuses.

Key Focus of the Board for 2022-23

In 2022, the Board undertook a review of its strategy to reflect on the role we play, not only nationally and internationally in telling the story of the Royal Navy, but at a local and regional level where our museums play a vital role in contributing to the tourist and visitor economy. A new National Museum of the Royal Navy Strategy 2022-2027 was published during January 2023:

The aim of the strategy is to “future proof” the National Museum through a greater emphasis on advances in technologies, deeper integration of the relationship with the Royal Navy and partnership working across our regions to increase reach and impact.

The Strategy, underpinned by delivery through a Corporate Plan, has a specific focus of the following three areas:

The Board also delivered the following:

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

Board and Committee Attendance

Membership and attendance Board of Committees Committees
**of key meetings1 ** Trustees
Audit and Collections Digital Fundraising Nomination
Governance Research and
Learning, Remuneration
Access
Total number of meetings in
the period:		 4 4 4 3 4 3

Chairman:
Admiral Sir Phillip Jones GCB 4/4 - - - -
Trustees:
Rear Admiral Mark Anderson 3/4 4/4
Mr Michael Bedingfield 2/3 2/3
Ms Katherine Biggs 4/4 3/4 3/3
Dr Andrew Burnett 2/4 4/4 4/4
Mr Phillip Doling 4/4 3/3 4/4
Mr Colin Evans 1/1 1/1
Ms Helen Jackson 4/4 4/4 2/3
Mrs Donna Jones 2/4 2/3
Major General Jeffrey Mason 2/4
Mrs Mary Montagu-Scott 4/4 4/4
Rear Admiral Jon Pentreath 4/4 2/3
Mr Mike Scott 4/4 2/3
Mrs Alison Start 4/4 3/4 3/4
Mrs Sarah Whitcher 1/1
Mr Gavin Whitter 4/4 4/4
Mr Tom Wright 1/1 0/1
Non-Trustees:
Mr Stephen Bradley 2/4
Ms Louisa Burden 4/4
Ms Emily Clarke 0/4
Mrs Sarah Dhanjal 3/4
Captain Catherine Jordan 3/4
Professor Andrew Lambert 3/4
Ms Tiva Montalbano 3/4
Mr Alex Patterson 1/4
Mr Peter Pantlin 4/4

Register of Interests

A register of interests (available on request from governance@nmrn.org.uk), is maintained for Trustees, Committee Members and the Executive, requiring declaration of any interest, pecuniary or otherwise, in any matter being considered by the Board, subsidiary board or the committees. Declarations of interest are also included as a standing item at the beginning of every agenda as an opportunity for new conflicts of interests to be declared and for existing

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

conflicts of interest to be dealt with.

There were no company directorships or other significant interests held by Board members which may conflict with their responsibilities as trustees. A number of trustees of the National Museum are also trustees of the subsidiary charities and this is disclosed in note 29 Related Party Transactions.

Personal data loss

The National Museum Group identified no personal data related incidents that required reporting to the Information Commissioner’s Office during 2022-23. 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.

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 Government Functional Standard GovS009 Internal Audit, the International Standards for the Professional Practice of Internal Auditing, the wider International Professional Practices Framework (IPPF), and the Internal Audit Code of Practice as published by the Global Institute of Internal Auditors (IIA) and the Chartered IIA.

RSM Risk Assurance Services LLP was appointed following a joint tender exercise with our sister Service Museums, the National Army Museum and the Royal Air Force Museum, to support the sharing of best practice and economies of scale, including an agreed annual thematic review across each of the museums. The following internal audits were completed during the year:

Internal Audit review Assurance Opinion Provided
Business Continuity Partial Assurance
Capital Projects Reasonable Assurance
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The National Museum of the Royal Navy (A company limited by guarantee) Company number: 06699696

Cashflow Reasonable Assurance
Equality,Diversityand Inclusion(Thematic review) Reasonable Assurance
Health and Safety Reasonable Assurance
Heritage Assets Reasonable Assurance
Safeguarding Reasonable Assurance
WhistleblowingPolicy Advisory– no opiniongiven

The outcomes of these reviews are used to inform an annual opinion on the governance, risk management and control framework, and on the mitigating controls over the risk to the delivery of objectives. The Head of Internal Audit concluded that moderate assurance could be provided and that some improvements were required to enhance the adequacy and effectiveness of the framework of governance, risk management and control. Work is underway to address all audit findings and to mitigate the risks identified, with progress on actions tracked by the Audit and Governance Committee to their satisfactory conclusion.

The advisory review of the National Museum’s Whistleblowing Policy concluded that a legally compliant policy and processes were in place with governance and effective staff communications.

External Audit

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

Whistleblowing

The National Museum has a whistleblowing policy and procedures in place, set in accordance with the relevant legislation and good practice, and that complies with the EU Whistleblower Protection Directive introduced in April 2019. The policy is made available of the staff intranet. An advisory review of the policy was undertaken by the internal auditor in October 2022 and concluded that the National Museum has a legally compliant policy and process with governance and effective staff communication in place. Findings and subsequent actions from the report, including amendments to the policy, improved governance and document control, the requirement for additional training in investigation skills for managers and feedback from staff on the effectiveness of the policy communications, are being implemented.

Four concerns were addressed under whistleblowing policy in the period covered by this report and investigations carried out. The whistleblowers received feedback on the conclusion on the investigation and the outcomes, including the actions taken and details of any organisational learnings arising, were reported to the relevant Executive Director(s), the Director General, the Audit and Governance Committee and the Board.

Environmental Policy and Sustainability Plans

The National Museum is committed to operating sustainably, reducing our carbon consumption and transforming our estate. We are developing an ambitious sustainability and environmental strategy to promote a more sustainable future, which applies across all operational activities and ongoing and new projects.

We aim to comply with relevant legislation, mandatory codes of conduct and guidelines. We will conserve energy, water and consumables as far as possible, particularly if they are non-

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

recyclable. We will seek to recycle to reduce wastage, prevent and avoid excessive pollution from our operations and projects, and ensure we dispose of any hazardous materials in the appropriate manner. We will include environmental sustainability in our procurement activities, looking to our contractors, our landlords and other key stakeholders to uphold the same environmental principles as ourselves. We will work with our staff and encourage our visitors, to understand the environmental consequences of decisions, and to deliver our products and services in ways that minimise impact on the environment. We will develop our systems and approach to collect data and report on environmental sustainability indicators and use these to set measured targets for achievement.

To become a sustainable museum with reduced carbon emissions, we recognise that significant changes to our working environment, premises and collections are required, including but not limited to energy use, transport, building infrastructures, and collections management, requiring significant capital investment. Our review will look at all areas across the National Museum of the Royal Navy to identify how we can effectively change our working practices to support the Carbon Net Zero ambition; however, our actions will be constrained by availability of funding.

The National Museum is developing systems to establish, maintain and monitor data and comprehensive records on environmental performance, including calculation of its carbon footprint and greenhouse gas emissions. It is currently collecting historic data to calculate the best estimate of its carbon emissions from its activities to a target base and data-led reduction in emissions. The National Museum is also considering an appropriate ratio to demonstrate annual emissions in relation to its activities.

The following measures and metrics have so far been established to allow the National Museum to report on performance, and this period will therefore be the baseline year to measure performance against in future years:

Waste Management 2022-23 baseline
Non-Financial indicators (Kgs) General Waste (tonne) 383
Recycled (tonne) 100
Total Waste (tonne) 483
% recycled 21%
Alongside regular collections of general waste and recycling, the National Museum is dedicated to recycling metal, wood,
paper, food waste, hazardous waste and redundant computer equipment and will work towards establishing a zero to
landfill policy. General waste is sent to energy recover and mixed recycling is collected at all sites. All hazardous waste is
safely removed and disposed of by licensed and experienced contractors. The museum works with its contractors to
ensure they comply with its waste expectations.
Wastage from the onsite cafes will be identified and reported on in future reports. Not all sites have their own catering
facilities, and third party caterers are responsible for collecting their waste data and reporting accordingly.
The museum has introduced recycling points in their staff rooms and key locations, and this will improve the efficiency of
its recycling programme.
Paper 2022-23 baseline
Non-Financial indicators Sheets used 167,623
Trees consumed % of a tree 22.18
CO2 Produced (kg) 2,348
Equivalent Bulb (hours) 147,021
Financial indicators (£) (including lease) Total cost (£) 21,645
Since opening post COVID-19, digital working initiatives have been introduced including hybrid working and paper usage
has reduced significantly.

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

The National Museum has also introduced online cloud software to share data and continues to review its practices to reduce the need to print. The introduction of the Board governance software, DecisionTime, has resulted in the reduction of printing hard copy meeting packs as trustees and other attendees can access all information online.

The National Museum has also introduced online cloud software to share data and continues to review its practices to
reduce the need to print. The introduction of the Board governance software, DecisionTime, has resulted in the reduction
of printing hard copy meeting packs as trustees and other attendees can access all information online.		 The National Museum has also introduced online cloud software to share data and continues to review its practices to
reduce the need to print. The introduction of the Board governance software, DecisionTime, has resulted in the reduction
of printing hard copy meeting packs as trustees and other attendees can access all information online.		 The National Museum has also introduced online cloud software to share data and continues to review its practices to
reduce the need to print. The introduction of the Board governance software, DecisionTime, has resulted in the reduction
of printing hard copy meeting packs as trustees and other attendees can access all information online.
Travel 2022-23 baseline
Non-Financial indicators (miles) Distance by train To be baselined in 2023-24
Distance by plane To be baselined in 2023-24
Distance by car (miles) 30,554
Total distance travelled (miles) 30,554
Fuel consumed by company vehicles
(litres)		 1,328
Financial indicators (£) Total cost (£) 15,559
The museum is committed to reducing the number of car miles travelled and promotes rail travel where possible. The
museum has introduced conferencing facilities in all of its meeting rooms and continues to encourage hybrid meetings to
reduce the level of travel required.
As part of its efforts to calculate its carbon emissions, the museum will monitor the level of business travel. Emissions will
therefore be reported in the next reporting period. The museum recognises that emissions from travel are a large
contributor to climate change and air pollution. Therefore, the museum will consider the use of electric vehicles when the
company vehicles are due for renewal and the installation of electric vehicle charging points at its sites where possible.
Energy Consumption 2022-23 baseline
Energy Consumption (thousand kWh) Gas 555,947
Electricity 1,748,429
Financial indicators (£) Total Energy Cost £721,721
Water (m3) 6,091
This is the first year the museum has recorded its energy consumption and electricity and gas consumption will be
monitored monthly going forward.
The museum sites continue to make changes to reduce their energy consumption and examples include:
•
Reduction in the number of off peak opening days
•
Adjustment to museum opening routines
•
Investment in internal spaces and closing areas that are not used
•
Installation of energy efficient lighting.
LED lights have been installed where possible within the NMRN Estate, including its hire spaces. Further capital projects
are under consideration at our sites for 2023-24 and will be reported on in future reports.
The Head Office is on a naval base, and the Museum works with the Royal Navy to manage its heating system. During May
– September 2023, the Royal Navy replaced the Head Office heating system to a more sustainable system and
consumption will be recorded in future reports.

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

Risk Management

Our Risk Management Strategy and Policy provides a framework and process that enable the organisation to manage uncertainty in a systematic, consistent and efficient way. It supports informed decision making thereby enabling opportunities to be exploited, or action to be taken to mitigate or manage risk to an acceptable level. Effective management of risk is essential in supporting the National Museum’s culture of innovation and autonomy and in establishing a “risk aware” approach. Risk management is integral to the National Museum’s corporate planning. We have identified the strategic, operational and project risks to our charitable objects and strategic objectives.

The Audit and Governance Committee oversees the development and implementation of the National

Museum’s risk management strategy and framework and

provides assurance to the Board on its effectiveness. 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. Appropriate mitigating actions are identified to address the inherent risks and to enhance the control environment. All risk registers are accessible in real time by Trustees and the executive. The Trustees are satisfied that the risk management system has operated effectively throughout the reporting period.

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

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 2017, 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 2023 and up to the date of approval of the annual report and accounts, and accords with Treasury guidance.

Gavin Whitter Matthew Sheldon Chair of the Audit and Governance Committee Director General and Accounting Officer on behalf of the Board of Trustees

15 December 2023

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 and Charities Act 2011, 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 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:

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

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.

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

Matthew Sheldon Director General and Accounting Officer

15 December 2023

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

Remuneration and Staff Report

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 two Executive Directors. The Director General and the Executive Directors are entitled to a non-consolidated performance related bonus payment, based on performance objectives approved 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.

Staff salaries, including salaries for Directors and Deputy Executive Directors, are set within the “Salary Grading Structure and Pay Progression Scheme” that was introduced from 1 April 2019 and reviewed annually. The Structure provides a single pay scale consisting of 49 pay points across 10 pay grades. An annual “cost of living” review is undertaken in November each year, with any recommendations arising from the review subject to Board and Ministerial approval before implementation. The National Museum adopted the UK Living Wage as its minimum pay point with effect from 1 November 2022. A 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 and contribute to the National Museum’s performance. Any pay progression awards are effective from 1 November each year.

Jobs are 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.

Pension benefits are provided through a defined contribution group pension scheme at the rate of 10% or 6% of salary (see note 1.16) and employees may elect to increase contributions through a salary sacrifice arrangement. The following statements present remuneration before any salary sacrifice is made. None of the directors is a member of the Principal Civil Service Pensions Scheme (PCSPS) and the National Museum did not fund any Civil Service pension contributions for them in 2022-23.

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.

Directors’ remuneration

The salary and pension entitlements set out below include gross salary, performance-related bonuses (if applicable), benefits in kind and any other allowances to the extent that they are subject to UK taxation. The emoluments were as follows:

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Directors’ remuneration table (subject to audit):

2022-23 all figures £k 2022-23 all figures £k 32021-22 all figures £k 32021-22 all figures £k
Director Salary 1Bonus 2Pension TOTAL Salary 1Bonus 2Pension TOTAL
payments benefits payments benefits
(restated) (restated)
D Tweddle,
Director General		 125-130 10-15 - 140-145 125-130 - - 125-130
S Dennis,
Executive Director
of Resources		 90-95 5-10 - 100-105 90-95 - - 90-95
M Sheldon,
Executive Director
of Heritage		 80-85 5-10 - 90-95 75-80 - - 75-80
V Turner, Deputy
Executive Director
of Resources		 65-70 n/a - 65-70 60-65 n/a - 60-65
Andrew Baines,
Deputy Executive
Director of
Heritage		 65-70 n/a - 65-70 60-65 n/a - 60-65
H McKenna-Aspell,
Director of
Fundraising		 75-80 n/a - 75-80 70-75 n/a - 70-75
B Hubbard,
Director of
Marketing		 60-65 n/a - 60-65 60-65 n/a - 60-65

1Bonus payments have been restated to reflect that bonuses relating to performance in 2020-21 were approved in April 2022 and are therefore now disclosed in the 2022-23 bonus payments in the above table. The bonuses relating to performance in 2021-22 and 2022-23 were approved in April 2023 and thus will be recognised and disclosed in the 2023-24 remuneration report.

2 The pension benefits have been restated to reflect that the pension benefits are in relation to defined contribution schemes and are solely disclosable in the pensions benefits table. Employer contributions in 2022-23 are presented in the pensions benefits table below.

3There were no benefits in kind.

Pension benefits table (subject to audit):

Director Real Accrued 1CETV at 1CETV at Real Employer
increase in pension at 31 March 31March increase contribution
pension and pension age 2023 2022 in2CETV to Defined
lump sum at at 31 March Contribution
pension age 2023 Group
and related Pension
lump sum Scheme
£’000
D Tweddle, Director
General		 - - - - - 13
S Dennis, Executive
Director of Resources		 - - - - - 9
M Sheldon, Executive
Director of Heritage		 - - - - - 8
V Turner, Deputy
Executive Director of
Resources		 - - - - - 4

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

Director Real Accrued 1CETV at 1CETV at Real Employer
increase in pension at 31 March 31March increase contribution
pension and pension age 2023 2022 in2CETV to Defined
lump sum at at 31 March Contribution
pension age 2023 Group
and related Pension
lump sum Scheme
£’000
Andrew Baines, Deputy
Executive Director of
Heritage		 - - - - - 4
H McKenna-Aspell,
Director of Fundraising		 - - - - - 4
B Hubbard, Director of
Marketing		 - - - - - 4

1 CETV (a Cash Equivalent Transfer Value) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member of a final salary scheme, required where a pension member wishes to switch to a defined contribution scheme, and is therefore not applicable to the National Museum directors.

Fair Pay Disclosures (subject to audit)

The National Museum is required to disclose the relationship between the remuneration of its highest-paid director and the lower quartile, median and upper quartile remuneration of the workforce, as shown below.

Fair pay bandings and ratios table:

2022-23 2021-22
restated
£000
Highest paid executive salary plus bonuses 140-145 1125-130
Lowest paid staff member remuneration 15-20 15-20
£
Lower quartile salary £18,900 £17,550
Lower quartile total remuneration £18,900 £17,550
Median quartile salary £19,500 £18,800
Median quartile total remuneration £19,500 £18,800
Upper quartile salary £25,300 £26,600
Upper quartile total remuneration £25,300 £26,600
2Ratio
Lower quartile 7.54 7.26
Median quartile 7.31 6.78
Upper quartile 5.63 4.79

1Prior year bonus payments have been restated to reflect that the bonus relating to performance in 2020-21 was approved in April 2022 and thus is disclosed in the 2022-23 bonus payments in the above table. The ratios have been recalculated accordingly to reflect the change in the mid-point of the highest paid director’s banded remuneration. 2 Ratio between the highest-paid director's banded mid-point remuneration and the lower quartile, median and upper quartile of the workforce.

Pay awards made in 2022-23 resulted in a higher percentage increase to the lower quartile pay ranges than other quartiles, represented by the movement in the pay ratios in the lower quartile being less than in the median and

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

upper quartiles. The reduction in upper quartile salary arises from the change in mix of staff as the establishment of the business returned to a steady operating model post-pandemic. In all cases, ratios to the mid-band of the highest paid director’s remuneration have increased due to the non-consolidated performance-related bonus payable to the director in 2022-23, where none were payable in 2021-22.

Percentage change in the total salary and bonuses of the highest-paid director and the workforce average:

Highest-paid director Workforce average Highest-paid director Workforce average
2022-23 22021-22
% change % change
Salary and allowances 0% 4% 0% -7%
Bonuses 100% 1N/A 0% 1N/A

1Non-consolidated performance-related bonus payments are only payable to the Director General and the Executive Directors. Consolidated performance-related pay progression is payable to the rest of the workforce. 2 The prior year bonus payments have been restated to reflect that the bonus relating to performance in 2020-21 was approved in April 2022 and thus is disclosed in the 2022-23 bonus payments in the above table. The bonuses relating to performance in 2021-22 and 2022-23 were approved in April 2023 and thus will be recognised and disclosed in the 2023-24 remuneration report. The percentage changes in respect of the highest paid director have been recalculated accordingly to reflect the changes in their bonus disclosed.

The percentage change in workforce average salary and allowances has increased to reflect the change in distribution of staff wages and a higher median remuneration for the workforce following the pay awards in 2022-23. The highest paid director’s salary has remained consistent with the banding in the prior year and percentage change in bonuses reflect that no bonuses were payable in 2021-22 but were payable in 2022-23.

In 2022-23 and in 2021-22, no employees received remuneration in excess of the highest paid director.

Total Staff costs for the National Museum Group totalled £7,543,000 (2021-22: £6,229,000). Further details on employee costs can be found in note 11 to the financial statements.

Equity, Diversity and Inclusion

The National Museum is committed to improving equity, diversity and inclusion (EDI) across the organisation to become an inclusive museum and workplace for our visitors, trustees, workforce, volunteers and wider delivery partners.

The National Museum is a committed member of Inclusive Employers and made a pledge under the Armed Forces Covenant, holding the silver award.

The National Museum does not tolerate any form of

discrimination and believes that everyone has the right to live without fear or prejudice regardless of race, age, gender, disability, sexual orientation, social class, religion and belief. Practising equality of opportunities can sometimes mean treating people differently in order to treat them fairly, for example, by being flexible to meet the needs of working parents and carers, or making reasonable adjustments for individuals with disabilities at various stages of the selection process. We provide interview questions in advance to support neurodiversity and our careers page includes accessible tools such as being able to change the colour contrast and the option for audio descriptions.

We support people who acquire a disability during the course of employment through making reasonable adjustments, that may include adjustments to job roles, workloads, workplace, etc., or that may include additional

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

training and support, as guided by Occupational Health. We also work with the Access to Work Scheme to implement additional training or equipment required to support people with disabilities. We have enhanced our occupational sick pay so that we can offer financial support in these circumstances. We have also increased the number of Mental Health First Aiders available to provide support.

We are accelerating our commitment to inclusion and diversity in our Museum, improving this in the way that we work, the collections we share and the stories we tell by:

Gender Pay Gap Reporting

Our data is collected on the snapshot date of 5 April 2023, when our workforce consisted of 187 (55%) women and 152 (45%) men.

Gender pay gap reporting requires us to divide our workforce into four equal parts (quartiles) by hourly rate and show the percentage of men and women within each of the quartiles.

The mean gender pay gap is the difference in average hourly rates of pay that men and women receive. This provides an overall indication of the gender pay gap by taking all hourly rates of pay and dividing by the total number of men and women in scope. The median gender pay gap shows the difference in the midpoints of the ranges of hourly rates of pay for men and women by ordering individual rates of pay from lowest to highest and comparing the middle values.

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

The mean (average) hourly rate paid to men in our workforce was -0.6% lower than the mean (average) hourly rate paid to women in April 2023. The difference in hourly rates of pay, as a median average, was 5.1% lower for women. This represents a decrease in our mean gender pay gap of 6.3% and a 0.6% increase as a median average based on our gender pay gap in 2022. A cohort of men was recruited into the upper-mid quartile during the reporting period in an area of work that continues to be a male-dominated profession (shipwrights) increasing the median average pay for men. It is also important to note the April 2021 and 2020 calculations were lower than they would have ordinarily been due to staff being on furlough (reduced pay) and therefore being excluded from the calculation.

There continued to be a higher percentage of women in the upper pay quartile (58%), however, there was an 11% reduction of women in the upper-mid pay quartile (49%) from the last reporting period (2022: 60%). There was a reduction in the percentage of women in the lower pay quartile (48%) from the last reporting period (2022: 64%), but there continued to be the highest percentage of women in the lower-mid quartile (63%).

Our mean gender pay gap is now more favourable to women. We are committed to trying to reduce our median gender pay gap where we can. We accommodate flexible and hybrid working arrangements wherever possible, supporting staff if they need to care for others or those who are returning to work after having a child or those who benefit from more flexible patterns of working. Work continues to be undertaken to support career progression and development. We are committed to offering these opportunities to all staff, regardless of gender.

Sickness absence

Periods of sickness absence are recorded in full days. The average number of sick days per employee (excluding long term sickness absences) was 3.9 (2021-22: 3.8 per employee), this is a 1 day increase per employee compared to prepandemic sick days lost (2019-20: 2.9), with 38% of absences relating to COVID-19. This paragraph is not subject to audit.

Staff Wellness

The average sentiment score for 2022-23 was 3.54 out of 5 (2021-22: 3.49) which indicated our staff on average have felt between okay and good, our target is for our staff to feel good at work (a score of 4 or more).

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 Nil(5) 2(2) 2(7)
£10,000 - £25,000 Nil(Nil) Nil(Nil) Nil(Nil)
Total number of exit
packages		 Nil (5) 2 (2) 2 (7)
Total resource cost/£ Nil(13,675) 5,547(5,692) 5,547(19,367)

NB Comparative data for prior year is shown in brackets)

All compensation was paid as pay in lieu of notice. There were no compulsory redundancies made in 2022-23.

Other staff costs

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

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

Employee Consultation and Involvement

The National Museum actively consults with its staff through the Working Together (Staff Voices) Group, established in February 2021 to improve two-way communication, involving and engaging employees through participation and collaboration, enabling them to contribute to the success of the Museum. The group, representing staff from across the National Museum, also offers senior management the opportunity to consult over business related issues and gain commitment to change. The Working Together Group acts as a communication platform for all staff, enabling them to voice their ideas as well as identifying areas for improvement or development.

Other forums for staff consultation and involvement include: project-specific consultation and working groups that provide a delivery-focused culture of working and change management; the Tactical Action Group, providing an essential link between the working groups charged with delivering key objectives within the Corporate Plan; the Health and Safety Management Group; regular directorate and team meetings; the National Museum’s Workplace intranet which includes weekly updates from the Executive on organisational performance and celebrates the successes of teams and individual; and the performance appraisal and “check in” system.

Trade Union facility time report 2022-23 2021-22
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

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

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 which require disclosure in this report. This paragraph is subject to audit.

Expenditure trends over the past five years are shown below.

The National Museum’s expenditure was reduced significantly in 2020-21 in response to the COVID-19 pandemic on its visitor numbers, which dropped to just 100 thousand visits, and the consequent impact on self-generated charitable and commercial income. The cost base was rigorously managed through cessation of non-contractual spend, suspension or reduction of contractual services, renegotiation of rents and service charges, the furlough of up to 89% of employees, and the freezing of the majority of capital projects. Expenditure has increased as the National Museum has reopened its sites, with 2022-23 seeing a more standard pattern of operation. The trading environment has, however, remained difficult for the whole heritage sector, with ticket sales and visitor numbers still below preCOVID levels, at 667 thousand visits.

Grant in Aid received from the sponsor body had remained broadly static in cash terms up to 2019-20 at £3,501,000 and the National Museum’s growth had been funded through self-generated income, grants and donations. An uplift in revenue Grant in Aid was awarded from 2020-21 through to 2022-23 to support recovery from the long-term financial impact of the pandemic, enabling the National Museum to build its free reserves from self-generated income to ensure future financial sustainability and its ability to continue to operate as a going concern. Revenue Grant in Aid for 2022-23 was £6,217,000, with a further £800,000 grant received to support a capital project.

Admiral Sir Philip Jones Chair on behalf of the Board of Trustees 15 December 2023

Matthew Sheldon Director General and Accounting Officer

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

Opinion on financial statements

I certify that I have audited the financial statements of the National Museum of the Royal Navy and its group for the year ended 31 March 2023 under the Government Resources and Accounts Act 2000.

The financial statements comprise the National Museum of the Royal Navy and its group’s:

The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and the United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) and 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 and Regularity of Public Sector Bodies in the United Kingdom (2022) . My responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of my certificate.

Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2019 . I am independent of the National Museum of the Royal Navy and its group 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.

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

Conclusions relating to going concern

In auditing the financial statements, I have concluded that the National Museum of the Royal Navy and its group’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 and its group'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 Board of Trustees and the Accounting Officer with respect to going concern are described in the relevant sections of this certificate.

Other Information

The other information comprises information included in the Trustees’ Annual Report but does not include the financial statements or my auditor’s certificate and report. 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 certificate, I do not express any form of assurance conclusion thereon.

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

In my opinion the part of the Remuneration and Staff Report to be audited has been properly prepared in accordance with 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 group and its environment obtained in the course of the audit, I have not identified material misstatements in the Performance Report including the Strategic Report or the Accountability Report including the Directors’ Report.

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I have nothing to report in respect of the following matters which I report to you if, in my opinion:

Responsibilities of the Trustees and Accounting Officer for the financial statements

As explained more fully in the Statement of the Board of Trustees’ and Accounting Officer’s Responsibilities, the Trustees and the Accounting Officer 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 and the Government Resources and Accounts Act 2000.

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 certificate 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 45

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

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

In identifying and assessing risks of material misstatement in respect of non-compliance with laws and regulations, including fraud, I:

As a result of these procedures, I considered the opportunities and incentives that may exist within the National Museum of the Royal Navy and its group for fraud and identified the greatest potential for fraud in the following areas: revenue recognition, posting of unusual journals, complex transactions and bias in management estimates. In common with all audits under ISAs (UK), I am also required to perform specific procedures to respond to the risk of management override of controls.

I also obtained an understanding of the National Museum of the Royal Navy and its group’s framework of authority as well as other legal and regulatory frameworks in which the National Museum of the Royal Navy and its group operate. I focused on those laws and regulations that had a direct effect on material amounts and disclosures in the financial statements or that had a fundamental effect on the operations of the National Museum of the Royal Navy and its group. The key laws and regulations I considered in this context included the National Heritage Act 1983, the Companies Act 2006, the Charities Act 2011, Managing Public Money, employment law, pensions legislation and tax legislation.

Audit response to identified risk

To respond to the identified risks resulting from the above procedures:

Page 46

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

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.

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 certificate.

Other auditor’s responsibilities

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.

Report

I have no observations to make on these financial statements.

Gareth Davies Comptroller and Auditor General

18 December 2023

National Audit Office 157-197 Buckingham Palace Road Victoria London SW1W 9SP

Page 47

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 2023

Unrestricted
funds
Notes
£’000
Income from:
Donations and legacies
Grant in Aid (revenue)
2
6,217
Grant in Aid (capital)
2
-
Donations
2
347
Legacies
3
12
Charitable activities
Admissions
4
5,542
Other trading activities
Trading subsidiary
5
2,251
Investments
6
450
Other
298
Total income
15,117
Expenditure on:
Raising funds
Fundraising and publicity
7
1,319
Investment management costs
-
Trading subsidiary
5
1,776
Charitable activities
8
11,667
Total expenditure
14,762		 Restricted
funds
£’000
-
133
14,038
5
-
-
-
-
14,176
-
-
-
4,084
4,084		 Linked
Endowment
Charities
funds
£’000
£’000
-
-
-
-
105
-
-
-
-
-
-
-
-
235
-
-
105
235
-
-
-
194
-
-
-
-
-
194		 2023
Unrestricted
Total
funds
£’000
£’000
6,217
5,476
133
130
14,490
461
17
22
5,542
5,307
2,251
1,640
685
297
298
297
29,633
13,630
1,319
1,018
194
-
1,776
1,626
15,751
10,248
19,040
12,892		 Restricted
funds
£’000
-
-
689
6
-
-
-
-
695
-
-
-
2,265
2,265		 Linked
Charities
£’000
-
-
5
-
-
-
-
-
5
-
-
-
-
-		 Endowment
funds
£’000
-
-
12,500
-
-
-
259
-
12,759
-
204
-
-
204		 2022
Total
£’000
5,476
130
13,655
28
5,307
1,640
556
297
27,089
1,018
204
1,626
12,513
15,361

The notes on pages 52 to 79 form an integral part of these financial statements.

Page 48

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 2023

Unrestricted
funds
£’000
Net gains/(losses) on
investments
(60)
Net income/(expenditure)
295
Transfer between funds
4,681
Other recognised gains/(losses):
(Losses)/gains on revaluations offixed
assets
15
1,349
Actuarial (losses)/gains on defined
benefit pension schemes
12
485
Net movement in funds
6,810
Reconciliation of funds:
Total funds brought forward
23/24
19,578
Total funds carried forward
26,388		 Restricted
funds
£’000
-
10,092
(6,122)
2,158
-
6,128
123,362
129,490		 Linked
Endowment
Charities
funds
£’000
£’000
-
(1,690 )
105
(1,649)
1,128
313
-
-
-
-
1,233
(1,336 )
5,354
56,002
6,587
54,666		 2023
Unrestricted
Total
funds
£’000
£’000
(1,750)
-
8,843
738
-
(934)
3,507
(489)
485
(210)
12,835
(895)
204,296
20,473
217,131
**19,578 **		 Restricted
funds
£’000
-
(1,570)
(378)
2,138
-
190
123,172
123,362		 Linked
Endowment
Charities
funds
£’000
£’000
-
2,595

5
15,150
1,312
-
-
-
-
-
1,317
15,150




4,037
40,852
5,354
**56,002 **		 2022
Total
£’000
2,595
14,323
-
1,649
(210)
15,762


188,534
**204,296 **

The notes on pages 52 to 79 form an integral part of these financial statements.

Page 49

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

Company number: 06699696

Consolidated and Company Balance Sheets as at 31 March 2023

Notes
Fixed assets
Tangible assets
15
Heritage assets
16
Investments
17
Current assets
Stocks
18
Debtors
19
Cash at bank and in hand
Current liabilities
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 excluding pension asset/(liability)
Defined benefit pension scheme asset/(liability)
12
Net assets including pension fund asset/(liability)
Funds
Unrestricted funds
Designated funds
Revaluation reserve
Total unrestricted funds
Restricted funds
Revaluation reserve
Linked charities
23/24
Total restricted funds
24
Total endowment funds
24
24
Total funds		 Group
2023
£’000
45,710
107,271
41,805
194,786
663
2,934
21,166
24,763
(2,784)
21,979
950
217,715
(741)
216,974
157
217,131
23,753
518
2,117
26,388
80,212
49,278
6,587
136,077
54,666
217,131		 Restated*
Group
2022
£’000
35,831
106,038
42,587
184,456
539
4,727
16,982
22,248
(3,266)
18,982
1,948
205,386
(817)
204,569
(273)
204,296
18,469
341
768
19,578
76,242
47,120
5,354
128,716
56,002
204,296		 Company
2023
£’000
-
6,563
-
6,563
-
421
3,520
3,941
(2,493 )
1,448
-
8,011
(643 )
7,368
-
7,368
(640 )
1
-
(639 )
1,420
-
6,587
8,007
-
7,368		 Restated*
Company
2022
£’000
-
5,330
-
5,330
-
36
2,113
2,149
(821)
1,328
-
6,658
(719)
5,939
-
5,939
(715)
-
1
(714)
1,299
-
5,354
6,653
-
5,939

The National Museum of the Royal Navy is exempt from an audit under Part 16 of the Companies Act 2006 under section 482 (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 15 December 2023

Matthew Sheldon Director General and Accounting Officer

The notes on pages 52 to 79 form an integral part of these financial statements.

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 2023

Consolidated and Company Cash flow statement

for the year ended 31 March 2023

Notes
Cash flows from operating activities:
Net cash provided by operating activities
Cash flows from investing activities:
Dividends and interest from investments
6
Purchase of property, plant and equipment
15
Sale of property, plant and equipment
Purchase of investments
17
Net cash used in investing activities
Cash flows from financing activities:
Cash receipts from new borrowing
34
Repayment of borrowing
22/34
Net cash provided by / (used in) financing activities
Change in cash and cash equivalents in the reporting period
33
Cash and cash equivalents at 1 April 2022
33
Total cash and cash equivalents at 31 March 2023
Reconciliation of net income to net cash flow from operating activities:
Net income for the year
Depreciation
15
Loss on disposal of fixed assets
15
Loss/(Gain) on investments
5.1
Adjustment for non-cash fees from gains/losses
17
Dividends and interest from investments
6
Donated fixed assets
16
(Increase)/Decrease in stocks
18
Decrease/(increase) in debtors
19/20
(Decrease)/increase in creditors
21
Increase/(decrease) in long term liabilities
22
(Decrease)/Increase in provisions for defined benefit pension
scheme 12
12
Net cash provided by operating activities		 Group
2023
£’000
14,508
685
(9,827 )
-
(1,102 )
(10,244 )
-
(80)
(80)
4,184
16,982
21,166
8,843
2,152
115
1,750
194
(685 )
(105 )
(124)
2,791
(482 )
4
55
14,508		 Restated
*
Group
2022
£’000
12,263
556
(2,460)
-
(259)
(2,163)
800
-
800
10,900
6,082
16,982
14,323
1,025
261
(2,595)
197
(556)
(49)
134
139
(680)
1
63
12,263		 Company
2023
£’000
2,615
-
(1,128 )
-
-
(1,128 )
-
(80 )
(80 )
1,407
2,113
3,520
1,429
-
-
-
-
-
(105 )
-
(385 )
1,672
4
-
2,615		 Restated
*
Company
2022
£’000
1,738
-

(1,312)
-
-

(1,312)
800

-

800
1,226
887
2,113
743
-
-
-
-
-

(5)
-

594
407
(1)
-
1,738

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 2023

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 2. 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, and the Companies Act 2006.

The National Museum has made an accounting policy decision to apply relevant requirements of HM Treasury's Financial Reporting Manual (FReM) when preparing the financial statements, to the extent this is consistent with the Companies Act and the SORP. This application of the FReM extends to the financial statements only, except for the inclusion of the following specific FReM-derived disclosures within the Annual Report: governance statement, remuneration report and parliamentary and accountability report.

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.

Consolidated financial statements have been prepared in respect of the charitable company, and its wholly owned subsidiaries: NMRN Operations; Royal Navy Submarine Museum; Royal Marines Museum; Fleet Air Arm Museum; NMRN Hartlepool; HMS Trincomalee Trust; Warrior Preservation Trust; HMS Victory Preservation Company; and HMS Caroline Preservation Company. 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).

The results of Portsmouth Historic Dockyard Operations Ltd, a joint venture company owned equally by NMRN Operations and the Mary Rose Trust, are included in these group accounts by virtue of the line-by-line consolidation of the NMRN Operations group. Individual disclosures on the performance of the joint venture are not made on the grounds that the income, expenditure, and net assets of Portsmouth Historic Dockyard Operations Ltd are not material to the group.

The registered office of all subsidiaries and the joint venture company is that of the National Museum (see note 1.1).

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 in Aid funding was awarded to the National Museum by the Royal Navy in response to the ongoing impact of the Covid-19 pandemic, based on projected budgets reflecting a range of possible operating scenarios. This additional funding has supported the National Museums cashflows until 31 March 2023. It is anticipated that the National Museum’s self-generated income streams and visitor markets will continue to recover from the impacts of COVID-19) and the economic recession, and its markets are expected to fully recover before 2024-25. Additional Grant in Aid has been provided to 31 March 2024 and the National Museum will continue to engage with Navy Command to renegotiate a financial framework that supports the core operating costs that we incur in delivering activities in the public interest.

Based on the assurances provided to the National Museum by its sponsor, the Royal Navy, that Grant in Aid funding will continue to be made available, and the work of the Executive on 2024-25 budgets, the Trustees and Directors are content that the going concern basis continues to apply. As such, the financial statements have been prepared on a going concern basis.

1.4. 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.

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 2023

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.

1.5. 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, 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 and other charitable subsidiaries 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.

Deferred income primarily relates to income received in advance for future events.

1.6.

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.

1.7. 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 Operations, Collections & Research, and Learning 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.

1.8. Tangible fixed assets

Timber

In March 2012, along with the gift of HMS Victory, the HMS Victory Preservation Trust received approximately 527m³ of teak, plus some smaller quantities of iroko and Brazilian mahogany, that had originally been procured by MoD for use in the conservation and maintenance of the Ship and that had been valued by Timbmet.

In 2016, 93 tonnes (~39m3) of unseasoned oak and elm were donated by four Scottish Estates for potential use towards the conservation of the Ship. The logs were surveyed over winter 2016-17 and sawn into rough-hewn planks. The timber is being stored and has been seasoned by a timber specialist (W L West) with the seasoning period completing in July 2021. The timber now needs to be converted into boards appropriate for use on the Ship. The conversion process will result in wastage and the final quantity of boards will be significantly less than the unseasoned donation.

In 2022, 370 hoppus feet (~13m3) of unseasoned oak was donated by Portsmouth Water. This is presently at W L West’s yard awaiting conversion and seasoning. It is anticipated that the seasoning will take 4-5 years to complete (not before 2026). Also in 2022, 3000 hoppus feet (~108m3) of unseasoned oak was donated by HS2. This timber is being stored at a yard in the Midlands awaiting conversion and seasoning. Again, it anticipated that the seasoning will take 4-5 years to complete (not before 2026).

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 2023

The seasoned timber, that may be held as logs, bulks, knees or boards, and that will probably be used in the conservation of this Ship is capitalised at the deemed cost provided at the time the asset was received. The useful economic life of the timber is considered to be >100 years and accordingly no depreciation will be recognised. 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 unseasoned or green timber held and that requires further processing (logging, rough sawing and seasoning) before its suitability for use in the conservation project may be approved, is considered to have a modest market value, and the costs of obtaining a reliable valuation would not be commensurate with its value or with the benefit obtained by including the additional value on the balance sheet.

Other 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 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

1.9. Heritage assets held by the group

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 was created for the NMRN Group. This was updated and approved by the Board in January 2023. 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).

Acquisitions to the museums are now guided by a single Collections Development Policy (December 2022) that sets out how the accessioned collection can be developed and expanded and the principles for rationalisation and disposal. There are two principal methods of acquisition:

The Collections and Research Department has delegated authority from the Board to assess, approve or decline new acquisitions; however, there may be instances where the Collections, Research, Access and Learning Committee may be included in the decision making in relation to a ‘major’ acquisition such as:

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 2023

Subject to the approval of the Trustees, the Museum may dispose of items from the collection, undertaken in accordance with

rationalisation and disposal procedures, 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 2027. The progress of the project will be reviewed annually with any material change being reflected by an interim valuation.

1.10. Operating Leases

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.

1.11. Investment properties

Investment properties are measured at fair value at each reporting date with changes in fair value recognised in ‘net gains/(losses) on investments’ in the Statement of Financial Activities.

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.

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.

1.13. Taxation

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.

All taxable activities fall within the operating subsidiary, NMRN Operations and its trading subsidiary, National Museum of the Royal Navy Trading, which are VAT registered. The activities of NMRN Operations also fall within the exemptions afforded by the provisions of the Corporation Tax Act 2010. The company's trading subsidiary is subject to corporation tax.

The tax expense represents the current tax expense. Current tax is charged or credited to the SOFA and 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 are recognised when tax paid exceeds the tax payable. 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 assets and liabilities are measured using tax rates that have been enacted or substantively enacted by the reporting period.

1.14. Stock

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.

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 2023

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.

1.16. Judgements and key sources of estimation uncertainty

In the application of the Group’s accounting policies, the Trustees are required to make judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the Group’s 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 useful lives of tangible fixed assets

When a depreciable asset is purchased the Museum makes an assessment of the estimated useful life of that asset, based on experience and other assets already owned by the Museum.

The valuation of donated tangible fixed assets and heritage assets

When an asset is donated to the Group Trustees make an overall assessment of whether a value can be attributed to that item. Such a valuation will then be subject to the judgement of the curatorial staff based on their experience and any recent commercial sales.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year include:

Valuation of Historic Ships

The valuations of historic ships held by the group have been based on an estimate of the original build cost, uplifted to the current value at the time of donation or acquisition, and discounted for elements of the original build that have not been replaced and to reflect the current state of repair (Note 16). 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

The valuation of the seasoned timber received in 2012 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.

The valuation of the seasoned timber received in 2016 has been carried out by a professional valuer and uses the estimated replacement cost as the deemed cost based on their estimation of the useable quantities and grades of the seasoned timber.

1.17. Pensions

The majority of staff of the National Museum and NMRN Operations 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 provide benefits based on final pensionable pay, and include the Principal Civil Service Pension Scheme and the Local Government Pension Scheme.

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 2023

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. This scheme has therefore been accounted for as if it were a defined contribution scheme in accordance with Charity SORP (FRS102).

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 and the Teesside Pension Fund and is able to identify its share of the underlying assets and liabilities. The schemes have therefore been accounted for as defined benefit schemes in accordance with Charity SORP (FRS102).

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.

2. Voluntary income (Company and Group)

Unrestricted Restricted
funds
funds
£’000
£’000
Grant (operating)
6,217
-
Grant (capital)
-
133
Total Grant in Aid
6,217
133
Other donations and grants
Ministry of Defence
-
800
Miscellaneous donations
and grants
4
1,073
4
1,873
Gifts in kind:
From NMRN Operations
-
-
-
-
Received by company
4
1,873
Received by:
NMRN Operations
338
12,393
HMS Caroline Preservation Co
-
-
Royal Navy Submarine Museum
1
-
Royal Marines Museum
-
-
HMS Victory Preservation Co
3
-
HMS Trincomalee Trust
-
-
Warrior Preservation Trust
1
-
Consolidation adjustments (1):
NMRN Operations
-
(57)
Royal Marines Museum
-
(171)
343
12,165
Received by group
347
14,038		 Linked
charities
’000
-
-
-
-
105
105
-
-
105
-
-
-
-
-
-
-
-
-
-
105		 2023
Unrestricted Restricted
Total
funds
funds

£’000
£’000
£’000
6,217
5,476
-

133
130
-
6,350
5,606
-

800
-
-

1,182
31
431
1,982
31
431
-
-
-
-
-
-
1,982
31
431
12,731
382
261

-
-
-

1
-
-

-
1
-

3
46
-
-
-
1
1
1
-
(57)
-
(4)
(171)
12,508
430
258
14,490
461
689		 Linked Endowment
charities
funds
£’000
£’000
-
-
-
-
-
-
-
-
5
-
5
-
187
-
187
-
192
-
-
-
-
12,500
-
-
-
-
-
-
-
-
-
-
(187)
-
(187 )
12,500
5
12,500		 2022
Total
£’000
5,476
130
5,606
-
467
467
187
187
654
643
12,500
-
1
46
1
1
(191)
13,001
13,655

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 2023

3. Legacies (Group)

Legacies (Group)
Unrestricted
Restricted
Funds
Funds
£’000
£’000
Received by:
NMRN Operations
-
5
Fleet Air Arm Museum
10
-
Royal Marines Museum
1
-
Warrior Preservation Trust
1
-
12
5		 2023
Unrestricted
Restricted
Total
funds
Funds
£’000
£’000
£’000
5
22
6
10
-
-
1
-
-
1
-
-
17
22
6		 2022
Total
£’000
28
-
-
-
28

There are no equivalent balances for the company.

4. Admissions (Group)

Unrestricted
funds
£’000
Museum admissions
Portsmouth Historic Dockyard
4,394
Fleet Air Arm Museum
809
Hartlepool
280
HMS Caroline
6
5,489
Other site income
Charges for services
53
5,542		 2023
Unrestricted
Total
funds
£’000
£’000
4,394
4,092
809
735
280
236
6
-
5,489
5,063
53
244
5,542
5,307		 2022
Total
£’000
4,092
735
236
-
5,063
244
5,307

There are no equivalent balances for the company.

Portsmouth Historic Dockyard includes: HMS Victory; HMS Warrior; Royal Naval Museum; HMS M33; Royal Navy Submarine Museum; and Explosion!

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

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 Trust (RMM), and the Fleet Air Arm Museum Trust (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 in respect of differences in the accounting policies of the individual entities and the NMRN group for assets acquired before 1 April 2000. The adjustments of £2,222,000 and £250,000 respectively, increase the consolidated balances of heritage assets and reserve balances.

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 2023

5.1 Statement of financial activities (subsidiaries)

NMRNO
£’000
Income from:
Donations and legacies
20,279
Charitable activities
5,542
Trading subsidiary
2,251
Investments
1
Other
268
Total income
28,341
Expenditure on:
Raising funds
1,319
Investment management
-
Trading subsidiary
1,776
Charitable activities
14,856
Total expenditure
17,951
Net (loss)/gain on investments
(60)
Net income/(expenditure)
10,330
Revaluation of fixed assets
3,048
Actuarial gains/(losses) on
defined benefit pension
485
Net movement in funds
13,863
Reconciliation of funds
Total funds brought forward
25,123
Total funds carried forward
38,986
Balance Sheet(Subsidiaries)
NMRNO
£’000
Fixed assets
Tangible fixed assets
32,983
Heritage assets
-
Investments
-
32,983
Current assets
8,167
Current liabilities
(2,321)
Net current assets
5,846
Debtors > one year
-
Total assets less current
liabilities
38,829
Long term liabilities
-
Net assets excluding
pension asset/(liability)
38,829
Defined benefit pension
asset/(liability)
157
Total funds
38,986		 NMRNH HMSVPC HMSCPC
£’000
£’000
£’000
6
3
-
-
-
-
-
-
-
-
680
2
-
-
-
6
683
2
-
-
-
-
194
-
-
-
-
6
124
555
6
318
555
-
(1,690 )
-
-
(1,325 )
(553 )
-
16
-
-
-
-
-
(1,309 )
(553 )
-
68,806
25,060
-
67,497
24,507
NMRNH HMSVPC HMSCPC
£’000
£’000
£’000
-
6,831
-
-
19,375
12,560
-
41,805
-
-
68,011
12,560
9
459
12,499
(9 )
(973 )
(552 )
-
(514)11,947
-
-
-
-
67,497
24,507
-
-
-
-
67,497
24,507
-
-
-
-
67,497
24,507		 HMSTT
£’000
42
-
-
2
-
44
-
-
-
35
35
-
9
-
-
9
21,385
21,394
HMSTT
£’000
-
21,008
-
21,008
72
(38)
34
450
21,492
(98 )
21,394
-
21,394		 WPT
£’000
2
-
-
-
-
2
-
-
-
21
21
-
(19 )
-
-
(19 )
26,362
26,343
WPT
£’000
-
25,290
-
25,290
1,060
(7 )
1,053
-
26,343
-
26,343
-
26,343		 RMM
£’000
1
-
-
-
-
1
-
-
-
176
176
-
(175 )
-
-
(175 )
2,811
2,636
RMM
£’000
-
735
-
735
1,411
(10 )
1,401
500
2,636
-
2,636
-
2,636		 RNSM
£’000
1
-
-
-
-
1
-
-
-
5
5
-
(4 )
-
-
(4 )
18,929
18,925
RNSM
£’000
-
18,651
-
18,651
279
(5)
274
-
18,925
-
18,925
-
18,925		 FAAM
£’000
10
-
-
-
30
40
-
-
-
889
889
-
(849)
443
-
(406)
9,881
9,475
FAAM
£’000
5,896
3,089
-
8,985
503
(13)
490
-
9,475
-
9,475
-
9,475		 2023
£’000
20,344
5,542
2,251
685
298
29,120
1,319
194
1,776
16,667
19,956
(1,750)
7,414
3,507
485
11,406
198,357
209,763
2023
£’000
45,710
100,708
41,805
188,223
24,459
(3,928 )
20,531
950
209,704
(98 )
209,606
157
209,763		 2022
£’000
19,074
5,307
1,640
556
296
26,873
1,018
204
1,626
13,037
15,885

2,595
13,583
1,649
(210)
15,022
183,335
198,357
2022
£’000
35,831
100,708
42,587
179,126
22,032
(4,378)
17,654
1,948
198,728
(98)
198,630
(273)
198,357

5.2 Balance Sheet (Subsidiaries)

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 2023

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, the company 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 expenses
Other income
Net profit / (loss)
Tax on ordinary activities
Profit / (loss) for the financial year
Amount gifted to NMRN Operations
Retained profit brought forward
Retained profit carried forward		 2023
£’000
2,131
(745 )
1,386
(1,048 )
120
458
17
475
(526 )
(51 )
344
293		 2022
£’000
1,621
(707)
914
(865)
19
68
(55)
13

-
13
331
344

6. Investment income (Group)

Unrestricted Endowment
funds
funds
£’000
£’000
Interest income
1
26
Dividend income
449
209
450
235
There are no equivalent balances for the company.		 2023
Unrestricted Endowment
Total
funds
funds
£’000
£’000
£’000
27
-
7
658
297
252
685
297
259		 2022
Total
£’000
7
549
556

7. Fundraising costs (Group)

Fundraising costs (Group)
Unrestricted
funds
£’000
Staff costs
890
Fundraising and publicity
429
1,319		 2023
Unrestricted
Total
funds
£’000
£’000
890
703
429
315
1,319
1,018		 2022
Total
£’000
703
315
1,018

There are no equivalent balances for the company, with all fundraising activities undertaken elsewhere within the Group.

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

Unrestricted
Restricted
funds
funds
£’000
£’000
Operations
422
-
Collections & research
84
14
Learning
56
-
Grant funding
5,527
800
6,089
814		 2023
Unrestricted
Restricted
Total
funds
funds
£’000
£’000
£’000
422
380
4
98
73
-
56
62
-
6,327
4,998
-
6,903
5,513
4		 2022
Total
£’000
384
73
62
4,998
5,517

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 2023

Costs of charitable activities - by fund type (Group)

Unrestricted
Restricted
funds
funds
£’000
£’000
Operations
8,645
3,679
Collections & research
2,025
298
Learning
979
107
Grant funding
18
-
11,667
4,084		 2023
Unrestricted
Restricted
Total
funds
funds
£’000
£’000
£’000
12,324
7,092
2,132
2,323
2,144
72
1,086
978
61
18
34
-
15,751
10,248
2,265		 2022
Total
£’000
9,224
2,216
1,039
34
12,513

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

Collections
Operations & research
£’000
£’000
Staff costs
297
59
Curatorial
-
14
Governance and support costs
125
25
422
98
Grant funding:
NMRN Operations
-
-
HMS Trincomalee Trust
-
-
Pride of Bristol Trust (charity 1041341)
-
-
Other grant funding
-
-
422
98
Costs of activities in furtherance of the objects of the charity (Group)
Collections
Operations & research
£’000
£’000
Staff costs
3,983
778
Operating costs
705
-
Marketing
673
-
Curatorial
-
439
Exhibition
-
67
Depreciation
1,365
520
Loss on disposal of fixed assets
18
3
Governance and support costs
2,629
516
9,373
2,323
Grant funding:
Pride of Bristol Trust (charity 1041341)
-
-
Royal Marines Historical Society (charity 274285)
-
-
-
-
Project costs:
HMS Victory
2,389
-
HMS Invincible
39
-
NMRN Hartlepool
250
-
Fleet Air Arm Museum
26
-
Landing Craft (Tank) - LCT7074
49
-
Royal Marines Museum relocation
37
-
Other project costs
161
-
2,951
-
12,324
2,323		 Learning
£’000
40
-
16
56
-
-
-
-
56
Learning
£’000
549
-
-
-
-
182
2
353
1,086
-
-
-
-
-
-
-
-
-
-
-
1,086		 Grant
funding
£’000
-
-
-
-
6,262
41
15
9
6,327
Grant
funding
£’000
-
-
-
-
-
-
-
-
-
15
3
18
-
-
-
-
-
-
-
-
18		 2023
Total
£’000
396
14
166
576
6,262
41
15
9
6,903
2023
Total
£’000
5,310
705
673
439
67
2,067
23
3,498
12,782
15
3
18
2,389
39
250
26
49
37
161
2,951
15,751		 2022
Total
£’000
391
-
128
519
3,975
-
34
3
4,531
2022
Total
£’000
4,835
775
306
939
31
863
240
2,861
10,850
34
-
34
1,333
77
102
5
59
(39 )
92
1,629
12,513

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 2023

10.
Analysis of governance and support costs (Company)
Collections
Operations
& research
£’000
£’000
Governance costs
Accountancy & payroll
11
2
Auditor remuneration - NAO
48
10
Legal and professional
29
6
Support costs
Travelling expenses
7
1
Bank charges & interest
8
2
Sundry expenses
22
4
125
25
Analysis of governance and support costs (Group)
Collections
Operations
& research
£’000
£’000
Governance costs
Accountancy & payroll
53
11
Auditor remuneration
63
22
Auditor remuneration - NAO
48
10
Legal and professional
184
31
Support costs
Repairs and maintenance
477
95
Insurance
345
69
Premises expenses
1,102
210
Travelling expenses
128
25
Communication and IT
52
10
Printing, postage and stationery
18
3
Bank charges & interest
72
14
Depreciation
10
-
Sundry expenses
77
16
2,629
516
11.
Employees
Group
2023
Employment costs
£’000
Wages and salaries
6,433
Social security costs
543
Defined contribution pension costs
495
Defined benefit pension costs
62
Employee benefits
10
7,543
Higher paid employees
The number of employees who earned more than £60,000 during the year was as follows:
Group
2023
£60,001 to £70,000
3
£70,001 to £80,000
1
£80,001 to £90,000
1
£90,001 to £100,000
1
£120,001 to £130,000
1		 Learning
£’000
2
6
4
1
1
2
16
Learning
£’000
6
6
6
21
64
46
157
17
7
2
10
-
11
353
Group
2022
£’000
5,326
402
419
71
11
6,229
Group
2022
2
1
1
1
1		 2023
Total
£’000
15
64
39
9
11
28
166
2023
Total
£’000
70
91
64
236
636
460
1,469
170
69
23
96
10
104
3,498
Company
2023
£’000
270
36
88
-
-
394
Company
2023
-
-
1
1
1		 2022
Total
£’000
16
67
15
12
6
12
128
2022
Total
£’000
66
88
67
312
685
249
1,074
69
67
36
105
9
34
2,861
Company
2022
£’000
288
31
70
-
-
389
Company
2022
-
-
1
1
1

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 2023

Number of employees

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

Group Group Company Company
2023 2022 2023 2022
Charitable expenditure 353 294 - -
Cost of generating funds 4 4 - -
Governance costs 6 6 3 3
363 304 3 3

The above includes workers engaged under Casual Worker Agreements. The average full-time equivalent number of staff for the year was 199 (2022: 175).

Staff costs for the charity for the year include an accrual of £4,000 (2022: £6,000), and for the group include £75,000 (2022: £89,000), for short-term compensated absences arising from employee entitlement to annual leave.

During the financial year Nil redundancies (2022:7) were identified within the group and contractual/redundancy costs of £Nil were paid (2022: £19,000). No further amounts were accrued at 31 March 2023 (2022: £Nil).

Key management personnel

Employee benefits received by key management personnel total £308,000 for the year to 31 March 2023 (31 March 2022: £303,000).

The total received by the group from the Coronavirus Job Retention Scheme in the period was £Nil (31 March 2022: £122,000).

11.1. Trustees' emoluments

No trustees received remuneration during the year (2022: Nil). Five trustees from the National Museum of the Royal Navy were reimbursed for travel expenses totalling £3,000 (2022: Six trustees - £2,000).

12. Pensions

The National Museum contributes to a Group Pension Plan. It is also a participating employer in the multi-employer plans: the Principal Civil Service Pension Scheme and the Local Government Pension Scheme (including Hampshire Pension Fund and Teesside Pension Fund).

The National Museum cannot be held liable to the plan for other entities’ obligations under the terms and conditions of the multiemployer plans.

Principal Civil Service Pension Scheme (PCSPS)

The PCSPS is an unfunded multi-employer defined benefit scheme but the National Museum 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 2022-23, employer contributions were payable to the PCSPS by NMRN Operations 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 2022-23 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.

Hampshire Pension Fund

The National Museum is an admitted member of the Hampshire Pension Fund. This fund has over 191,000 members. The actuaries of the fund are AON Hewitt. In the year ended 31 March 2023, two staff of NMRN Operations participated in the scheme. The disclosures below relate to the funded liabilities within the Hampshire Pension Fund (the ‘Fund’) which is part of the LGPS. The funded nature of the LGPS requires the National Museum and its employees to pay contributions into the Fund, calculated at a level intended to balance the pension’s liabilities with investment assets.

Assumptions

The latest actuarial valuation was carried out at 31 March 2022. Liabilities have been estimated by the independent qualified actuary on an actuarial basis using the roll-forward approach. The principal assumptions used by the actuary in updating the latest valuation of the Fund for FRS 102 purposes were:

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 2023

Period ended 31 March 2023 31 March 2022
% p.a. % p.a.
Pension Increase Rate (CPI) 2.60% 2.80%
Salary Increase Rate 3.60% 3.80%
Discount Rate 4.50% 2.70%
Asset allocation
Period ended 31 March 2023 31 March 2022
Equities 57.6% 56.9%
Property 6.8% 6.9%
Government bonds 16.5% 17.2%
Multi asset credit 0.0% 9.0%
Cash 1.1% 0.9%
Other 18.0% 9.1%
Reconciliation of funded status to the Balance Sheet 31 March 2023 31 March 2022
£(000) £(000)
Fair value of assets 423 444
Present value of funded liabilities 350 520
Pension liability recognised on the balance sheet 73 (76)
Amounts recognised in the Statement of Financial Activities 31 March 2023 31 March 2022
£(000) £(000)
Operating cost:
Current service cost 33 34
Financing cost:
Interest on net defined benefit liability 2 3
Pension expense recognised in the Statement of Financial Activities 35 37
31 March 2023 31 March 2022
£(000) £(000)
Asset gains/(losses) arising during the period (38) 20
Liability gains/(losses) arising during the period 222 80
Gains/(losses) recognised in the Statement of Financial Activities 184 100
Changes made to the present value of the defined benefit obligation during the
accounting period 31 March 2023 31 March 2022
£(000) £(000)
Opening defined benefit obligation 520 550
Current service cost 33 34
Interest expense on defined benefit obligation 14 12
Contributions by participants 5 4
Actuarial (gains)/losses on liabilities (222) (80)
Net benefits paid out - -
Closing defined benefit obligation 350 520
Changes to the fair value of assets during the accounting period 31 March 2023 31 March 2022
£(000) £(000)
Opening fair value of assets 444 411
Interest income on assets 12 9
Remeasurement gains/(losses) on assets (38) 20
Contributions by the employer - -
Contributions by participants 5 4
Net benefits paid out - -
Closing fair value of assets 423 444
Actual return on assets 31 March 2023 31 March 2022
£(000) £(000)
Interest income of assets 12 9
Gain/(loss) on assets (38) 20
Total amount recognised in the Statement of Financial Activities (26) 29

Teesside Pension Fund

The National Museum is an admitted member of the Teesside Pension Fund. This fund has over 71,500 members. The actuaries of the fund are AON Hewitt. In the year ended 31 March 2023, six staff of NMRN Operations participated in the scheme. The disclosures below relate to the funded liabilities within the Teesside Pension Fund (the ‘Fund’) which is part of the LGPS. The

Page 64

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 2023

funded nature of the LGPS requires the National Museum and its employees to pay contributions into the Fund, calculated at a level intended to balance the pension’s liabilities with investment assets.

Assumptions

The latest actuarial valuation was carried out at 31 March 2022. Liabilities have been estimated by the independent qualified actuary on an actuarial basis using the roll-forward approach. The principal assumptions used by the actuary in updating the latest valuation of the Fund for FRS 102 purposes were:

Period ended 31 March 2023 31 March 2022
% p.a. % p.a.
Pension Increase Rate (CPI) 3.00% 3.20%
Salary Increase Rate 4.00% 4.20%
Discount Rate 4.75% 2.70%
Asset allocation
Period ended 31 March 2023 31 March 2022
Equities 70% 68%
Bonds 0% 0%
Property 23% 16%
Cash 7% 16%
Reconciliation of funded status to the Balance Sheet 31 March 2023 31 March 2022
£(000) £(000)
Fair value of assets 618 759
Present value of funded liabilities 534 956
Pension liability recognised on the balance sheet 84 (197)
Amounts recognised in the Statement of Financial Activities 31 March 2023 31 March 2022
£(000) £(000)
Operating cost:
Current service cost 23 27
Financing cost:
Interest on net defined benefit liability 5 7
Pension expense recognised in the Statement of Financial Activities 28 34
31 March 2023 31 March 2022
£(000) £(000)
Asset gains/(losses) arising during the period (169) 71
Liability gains/(losses) arising during the period 470 74
Gains/(losses) recognised in the Statement of Financial Activities 301 145
Changes made to the present value of the defined benefit obligation during the
accounting period 31 March 2023 31 March 2022
£(000) £(000)
Opening defined benefit obligation 956 988
Current service cost 23 27
Interest expense on defined benefit obligation 26 20
Contributions by participants 3 3
Actuarial (gains)/losses on liabilities (470) (74)
Net benefits paid out (4) (8)
Closing defined benefit obligation 534 956
Changes to the fair value of assets during the accounting period 31 March 2023 31 March 2022
£(000) £(000)
Opening fair value of assets 759 672
Interest income on assets 21 13
Remeasurement gains/(losses) on assets (169) 71
Contributions by the employer 8 8
Contributions by participants 3 3
Net benefits paid out (4) (8)
Closing fair value of assets 618 759
Actual return on assets 31 March 2023 31 March 2022
£(000) £(000)
Interest income of assets 21 13
Gain/(loss) on assets (169) 71
Total amount recognised in the Statement of Financial Activities (148) 84

Page 65

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 2023

Group Pension Plan

The National Museum operates a Group Pension Plan with employer's contributions being payable at 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 cost relating to each scheme is set out below. There were no outstanding or prepaid contributions at the balance sheet date:

Pension Schemes (Company)

Defined contribution schemes
Group scheme
Pension Schemes (Group)
Defined contribution schemes
Group scheme
PCSPS
Defined benefit schemes
LGPS - Hampshire Pension Fund
LGPS - Teesside Pension Fund		 2023
£’000
88
2023
£’000
478
17
35
27
557		 2022
£’000
70
2022
£’000
404
15
37
34
490

13. Net outgoing resources for the year

Net outgoing resources for the year
2023 2022
£’000 £’000
Group net outgoing resources is stated after charging:
Operating lease payments 547,739 462,881
Depreciation and other amounts written off tangible fixed assets 2,267 1,286
Auditors' remuneration - National Audit Office 64 67
Auditors' remuneration - Subsidiary Auditors 92 88

The National Audit Office fee for the year ended 31 March 2023 is £65,600 (2022: £61,000). 2023 includes an adjustment of £2,000 relating to 2021-22. There is no remuneration for non-audit work.

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)

Heritage
assets
£’000
Cost or valuation
At 1 April 2022
5,330
Additions
1,278
At 31 March 2023
6,608
Depreciation
At 1 April 2022 and 31 March
2023
-
Net book values
At 31 March 2023
6,608
At 31 March 2022
5,330		 Total
£’000
5,330
1,278
6,608
-
6,608
5,330

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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 2023

Tangible fixed assets (Group)

Assets underInvestment
Short
Office
construction property Freehold leasehold equipment
£’000
£’000
£’000
£’000
£’000
Cost or valuation
At 1 April 2022
189
-
11,786
8,959
2,868
Additions
-
650
2,820
-
95
Transfers
(189)
-
32
-
-
Disposals
-
-
-
-
(3 )
Revaluation
-
(60)
982
971
41
At 31 March 2023
-
590
15,620
9,930
3,001
Depreciation
At 1 April 2022
-
-
1,611
1,308
2,697
Charge for the year
-
-
421
234
108
Disposals
-
-
-
-
(3 )
On revaluation
-
-
-
353
24
At 31 March 2023
-
-
2,032
1,895
2,826
Net book values
At 31 March 2023
-
590
13,588
8,035
175
At 31 March 2022
189
-
10,175
7,651
171		 Plant &
machinery
£’000
8,885
3,288
-
(56 )

1,382
13,499

1,413

769
(41 )

123
2,264
11,235

7,472		 Fixtures &
fittings Exhibitions
£’000
£’000
7,670
2,570
852
994
-
157
(495)
(349)
900
376
8,927
3,748
5,791
968
265
355
(482)
(262)
586
59
6,160
1,120
2,767
2,628
1,879
1,602		 Timber
£’000
6,692
-
-
-
-
6,692
-
-
-
-
-
6,692
6,692		 Heritage
assets
£’000
106,038
1,233
-
-
-
107,271
-
-
-
-
-
107,271
106,038		 Total
£’000
155,657
9,932
-
(903 )
4,592
169,278
13,788
2,152
(788 )
1,145
16,297
152,981
141,869

Land and buildings at the Fleet Air Arm Museum and the Royal Navy Submarine Museum, owned by the Fleet Air Arm Museum and NMRN Operations, were revalued at 6 May 2022 by Avison Young, 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. The carrying value of the property if recognised under the historical cost model cannot be easily identified.

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.

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 Trustees consider that the cost of obtaining a valuation for these collection assets is significant and is not commensurate with the benefit obtained by including the additional capitalised value in the financial statements. The collection has therefore been included within heritage asset additions at the purchase price of £145,000.

On 7 November 2014, Landing Craft (Tank) Mk III, LCT 7074 was gifted to the National Museum by the Mersey Docks and Harbour Company Limited. Information regarding the cost or value of the conservation required to bring the ship to an 'as new' condition was not readily available, therefore no value was applied to the gift at this stage. This significant Second World War item was accessioned to the collection of the Royal Naval Museum.

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

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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 2023

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 heritage asset transactions

Additions
Purchases
Royal Naval Museum
Donations
Royal Naval Museum
1
Total additions
1		 2023
£’000
1,128
105
1,233		 2022
£’000
1,312
5
1,317		 2021
£’000
648
-
648		 2020
£’000
83
-
83		 2019
£’000
114
4
118

Significant historic ships

Ship Donor Date
of gift		 Original build
cost uplifted
for value on
completion
£’000		 Estimated
repair cost
at time of
gifting
£’000		 Value
of gift
£’000		 Value at
1 April
2022
£’000		 Increase
in year
£’000		 Value at
31 March
2023
£’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.

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

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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 2023

£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.

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.

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.

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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 2023

17. Investment assets

Valuation
At 1 April 2022
Additions
Gains and losses before management fees
Less management fees deducted
Realised and unrealised gains and losses
At 31 March 2023
Historical cost as at 31 March 2023
Historical cost as at 31 March 2022
Investments By fund:
Endowment funds		 Group
Listed
Unlisted
2023
2023
£’000
£’000
42,587
-
1,102
-
(1,690)
(194)
(1,884 )
-
41,805
-
32,772
-
31,670
-
41,805
-		 Group
Listed
Unlisted
2023
2023
£’000
£’000
42,587
-
1,102
-
(1,690)
(194)
(1,884 )
-
41,805
-
32,772
-
31,670
-
41,805
-
-
-
-
-

The above investments are those held by the HMS Victory Preservation Company. The company holds two portfolios of investments, one managed by James Hambro and Partners and the other by Cazenove Capital Management. The investment objective for the period was to generate a total return of inflation plus 4% 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
Others
Capital account
Overseas
Fixed interest
International bonds
International equities
Others		 2023
£’000
798
1,189
3,314
5,370
952
11,623
1,791
1,390
23,267
3,734
30,182
41,805		 2022
£’000
804
-
4,498
3,819
1,032
10,153
979
1,814
24,585
5,056
32,434
42,587

18. Stocks

Held by:
NMRN Operations
Trading subsidiaries		 Group
2023
£’000
233
430
663		 Group
2022
£’000
215
324
539		 Company
2023
£’000
-
-
-		 Company
2022
£’000
-
-
-

Page 70

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 2023

19. Debtors: amounts falling due within one year

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
2023
£’000
473
-
1,470
767
224
2,934
Group
2023
£’000
450
500
950		 Group
2022
£’000
107
-
1,071
3,247
302
4,727
Group
2022
£’000
448
1,500
1,948		 Company
2023
£’000
247
24
2
148
-
421
Company
2023
£’000
-
-
-		 Company
2022
£’000
-
25
1
10
-
36
Company
2022
£’000
-
-
-

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

The accrued income relates to the sale of the Royal Marines Museum.

21. Creditors: amounts falling due within one year

21.
Creditors: amounts falling due within one year
Other loans
Trade creditors
Amounts owed to group undertakings
Other creditors
Other taxes and social security
Accruals and deferred income
Deferred income
Balance at 1 April 2022
Amounts released to incoming resources
Amounts deferred in year
Balance as at 31 March 2023
22.
Creditors: amounts falling due after more than one year
Other loans		 Group
2023
£’000
86
690
-
255
134
1,619
2,784
Group
2023
£’000
167
(130)
106
143
Group
2023
£’000
741		 Restated
Group
2022
£’000
86
801
-
211
120
2,048
3,266
Group
2022
£’000
127
(594 )
634
167
Group
2022
£’000
817		 Company
2023
£’000
86
58
2,215
6
10
118
2,493
Company
2023
£’000
-
-
-
-
Company
2023
£’000
643		 Restated
Company
2022
£’000
86
-
550
6
9
170
821
Company
2022
£’000
-
-
-
-
Company
2022
£’000
719

Page 71

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 2023

23. Analysis of net assets between funds

Tangible
Fixed Assets Investments
£’000
£’000
Restricted funds:
Restricted funds
-
-
Royal Naval Museum
4,788
-
HMS M33 Trust
1,775
-
6,563
-
Unrestricted funds
-
-
Total Company funds at 31 March 2023
6,563
-
Funds held by:
NMRN Operations
32,983
-
HMS Victory Preservation Company
26,206
41,805
HMS Caroline Preservation Company
12,560
-
HMS Trincomalee Trust
21,008
-
Warrior Preservation Trust Limited
25,290
-
Royal Marines Museum Charitable Trust
735
-
Royal Navy Submarine Museum Trust
18,651
-
Fleet Air Arm Museum
8,985
-
Total Group funds at 31 March 2023
152,981
41,805
Tangible
Fixed Assets Investments
£’000
£’000
Restricted funds:
Restricted funds
-
-
Royal Naval Museum
3,555
-
HMS M33 Trust
1,775
-
5,330
-
Unrestricted funds
-
-
Total Company funds at 31 March 2022
5,330
-
Funds held by:
NMRN Operations
23,306
-
HMS Victory Preservation Company
26,200
42,587
HMS Caroline Preservation Company
12,560
-
HMS Trincomalee Trust
21,008
-
Warrior Preservation Trust Limited
25,290
-
Royal Marines Museum Charitable Trust
735
-
Royal Navy Submarine Museum Trust
18,651
-
Fleet Air Arm Museum
8,789
-
Total Group funds at 31 March 2022
141,869
42,587		 Net

current
assets
£’000
1,420
24
-
1,444
4
1,448
5,846
(514 )
11,947
34
1,053
1,401
274
490
21,979
Net

current
assets
£’000
1,299
24
-
1,323
5
1,328
2,090
19
12,500
27
1,072
576
278
1,092
18,982		 Long term
assets &
liabilities
£’000
-
-
-
-
(643)
(643)
-
-
-
352
-
500
-
-
209
Long term
assets &
liabilities
£’000
-
-
-
-
(719)
(719)
-
-
-
350
-
1500
-
-
1,131		 Pension
assets &
liabilities
£’000
-
-
-
-
-
-
157
-
-
-
-
-
-
-
157
Pension
assets &
liabilities
£’000
-
-
-
-
-
-
(273 )
-
-
-
-
-
-
-
(273 )		 Total
2023
£’000
1,420
4,812
1,775
8,007
(639)
7,368
38,986
67,497
24,507
21,394
26,343
2,636
18,925
9,475
217,131
Total
2022
£’000
1,299
3,579
1,775
6,653
(714 )
5,939
25,123
68,806
25,060
21,385
26,362
2,811
18,929
9,881
204,296

Page 72

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 2023

24. Funds

Unrestricted funds:
Unrestricted funds
Designated funds
Total company unrestricted funds
NMRN Operations
NMRN Hartlepool
HMS Victory Preservation Company
HMS Caroline Preservation Company
HMS Trincomalee Trust
Warrior Preservation Trust Limited
Royal Marines Museum
Royal Navy Submarine Museum
Fleet Air Arm Museum
Consolidation adjustments
Total group unrestricted funds
Unrestricted funds
Designated funds
Total company unrestricted funds
NMRN Operations
NMRN Hartlepool
HMS Victory Preservation Company
HMS Caroline Preservation Company
HMS Trincomalee Trust
Warrior Preservation Trust Limited
Royal Marines Museum
Royal Navy Submarine Museum
Fleet Air Arm Museum
Consolidation adjustments
Total group unrestricted funds		 At 1 April
2022
£’000
(715)
1
(714)
10,393
-
113
-
351
342
2,667
339
6,087
-
19,578
At 1 April
2021
£’000
1
-
1
10,327
4
608
-
352
356
2,684
348
5,793
-
20,473		 Income Expenditure
£’000
£’000
6,221
(6,089 )
-
-
6,221
(6,089 )
14,408
(13,961 )
6
(6 )
450
(114 )
-
(555 )
44
(35 )
2
(21 )
1
(175 )
1
(5 )
40
(129 )
(6,056)
6,328
15,117
(14,762 )
Income Expenditure
£’000
£’000
5,637
(5,513 )
-
-
5,637
(5,513 )
12,614
(12,428 )
1
(5 )
337
(832 )
2
(2 )
4
(5 )
4
(18 )
-
(17 )
1
(10 )
12
(24 )
(4,982)
5,962
13,630
(12,892 )		 Gains and
losses
£’000
-
-
-
1,553
-
-
-
-
-
-
-
221
-
1,774
Gains and
losses
£’000
-
-
(1,005)
-
-
-
-
-
-
-
306
-
(699)		 At
Transfers
£’000
(57)
-
(57)
5,323
-
(868)
555
-
-
-
-
-
(272)
4,681
At
Transfers
£’000
(840)
1
(839)
885
-
-
-
-
-
-
-
-
(980)
(934)		 31 March
2023
£’000
(640 )
1
(639 )
17,716
-
(419 )
-
360
323
2,493
335
6,219
-
26,388
31 March
2022
£’000
(715)
1
(714)
10,393
-
113
-
351
342
2,667
339
6,087
-
19,578

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

Page 73

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 2023

Restricted funds:
HMS Caroline fund
Royal Marines Museum relocation fund
Purchase of exhibits fund
Kellet Sledge Flag fund
Kochan Collection fund
HMS Victory Model fund
Ministry of Defence Project fund
Linked charities:
Royal Naval Museum
HMS M33 Trust
Total company restricted funds
NMRN Operations
HMS Victory Preservation Company
HMS Caroline Preservation Company
HMS Trincomalee Trust Limited
Warrior Preservation Trust
Royal Marines Museum
Royal Navy Submarine Museum
Fleet Air Arm Museum
Consolidation adjustments
Total group restricted funds
HMS Caroline fund
Royal Marines Museum relocation fund
Death of Nelson painting fund
Sim Comfort Collection fund
Linked charities:
Royal Naval Museum
HMS M33 Trust
Total company restricted funds
NMRN Operations (excluding CJRS – see below)
Coronavirus Job Retention Scheme
HMS Victory Preservation Company
HMS Caroline Preservation Company
HMS Trincomalee Trust
Warrior Preservation Trust Limited
Royal Marines Museum
Royal Navy Submarine Museum
Fleet Air Arm Museum
Consolidation adjustments
Total group restricted funds		 At 1 April
2022
£’000
245
1,054
-
-
-
-
-
3,579
1,775
6,653
14,730
26,156
12,560
21,029
25,060
144
18,590
3,794
-
128,716
At 1 April
2021
£’000
104
1,054
-
-
2,262
1,775
5,195
14,966
-
26,161
12,560
21,029
25,060
105
18,590
3,543
-
127,209		 Income Expenditure
£’000
£’000
-
-
-
-
133
(14 )
153
-
234
-
686
-
800
(800 )
105
-
-
-
2,111
(814 )
13,933
(3,990 )
-
(10 )
-
-
-
-
-
-
-
(1 )
-
-
-
(760 )
(1,763)
1,491
14,281
(4,084 )
Income Expenditure
£’000
£’000
141
-
4
(4 )
275
-
11
-
192
-
-
-
623
(4 )
974
(2,151 )
122
(122 )
-
(10 )
-
-
1
(1 )
-
-
39
-
-
-
-
(56 )
(1,059)
79
700
(2,265 )		 Gains and
losses
£’000
-
-
-
-
-
-
-
-
-
-
-
1,920
16
-
-
-
-
-
222
-
2,158
Gains and
losses
£’000
-
-
-
-
-
-
-
-
1,826
-
5
-
-
-
-
-
307
-
2,138		 At
Transfers
£’000
-
-
(51)
(100)
(234)
(686)
-
-
1,128
-
57
(5,323)
-
-
-
-
-
-
-
272
(4,994)
At
Transfers
£’000
-
-
(275 )
(11 )
1,125
-
839
(885 )
-
-
-
-
-
-
-
-
980
934		 31 March
2023
£’000
245
1,054
68
53
-
-
-
4,812
1,775
8,007
21,270
26,162
12,560
21,029
25,060
143
18,590
3,256
-
136,077
31 March
2022
£’000
245
1,054
-
-
3,579
1,775
6,653
14,730
-
26,156
12,560
21,029
25,060
144
18,590
3,794
-
128,716

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

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 to the National Museum.

Page 74

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 2023

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

Other restricted funds represent funds received towards the purchase of exhibits.

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

Endowment funds:
HMS Victory Preservation Company
HMS Caroline Preservation Company
HMS Trincomalee Trust
Warrior Preservation Trust Limited
Total group endowment funds
Endowment funds:
HMS Victory Preservation Co
HMS Caroline Preservation Co
HMS Trincomalee Trust
Warrior Preservation Trust Limited
Total group endowment funds		 At 1 April
2022
£’000
42,537
12,500
5
960
56,002
At 1 April
2021
£’000
39,887
-
5
960
40,852		 Income Expenditure
£’000
£’000
233
(194 )
2
-
-
-
-
-
235
(194 )
Income Expenditure
£’000
£’000
259
(204 )
12,500
-
-
-
-
-
12,759
(204 )		 Gains and
losses
£’000
(1,690 )
-
-
-
(1,690)
Gains and
losses
£’000
2,595
-
-
-
2,595		 At
Transfers
£’000
868
(555)
-
-
313
At
Transfers
£’000
-
-
-
-
-		 31 March
2023
£’000
41,754
11,947
5
960
54,666
31 March
2022
£’000
42,537
12,500
5
960
56,002

Endowment funds include funds donated by the Gosling Foundation for the maintenance and upkeep of HMS Victory, and funds donated by the Department for the Economy of Northern Ireland and the National Heritage Memorial Fund for the conservation, repair, protection and interpretation of HMS Caroline in Belfast.

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
Unrestricted funds
Restricted funds -RML 497 Fairmile (the ship)
Endowment funds- Johnstone Library fund
Total funds of the Royal Naval Museum
Unrestricted funds
Restricted funds -RML 497 Fairmile (the ship)
Endowment funds- Johnstone Library fund
Total funds of the Royal Naval Museum		 At 1 April
2022
£’000
3,472
83
24
3,579
At 1 April
2021
£’000
2,155
83
24
2,262		 Incoming
resources
£’000
1,233
-
-
1,233
Incoming
resources
£’000
1,317
-
-
1,317		 Outgoing
resources
£’000
-
-
-
-
Outgoing
resources
£’000
-
-
-
-		 At
Transfers
£’000
-
-
-
-
At
Transfers
£’000
-
-
-
-		 31 March
2023
£’000
4,705
83
24
4,812
31 March
2022
£’000
3,472
83
24
3,579

Page 75

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 2023

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		 2023
£’000
4,788
24
4,812
4,705
83
24
4,812
2023
£’000
1,775
1,092
683
1,775		 2022
£’000
3,555
24
3,579
3,472
83
24
3,579
2022
£’000
1,775
1,092
683
1,775

25. Transfers between funds

NMRN

A total of £57,000 (2022: £839,000) and £1,071,000 (2022: £286,000) was transferred from unrestricted funds and restricted funds respectively to reflect the value of heritage assets transferred to the Royal Naval Museum collection.

NMRN Operations

A total of £5,323,000 (2022: £885,000) 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.

Consolidation adjustments

The consolidation adjustments eliminate grants made between group entities.

26. Financial commitments

At 31 March 2023 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
2023
£’000
422
1,687
22,594
24,703		 Group
2022
£’000
422
1,686
22,995
25,103

27. Capital commitments and contingent liabilities

The company had capital commitments contracted but not provided for in the financial statements amounting to £6,941,000 (2022: £778,000). There were no contingent liabilities at 31 March 2023 (2022: £Nil).

Page 76

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 2023

28. Losses and special payments

28.1 Losses statement

28.2 Special payments

There were no cases of special payments during the year (2022: 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.

Subsidiary companies and charities

Subsidiary companies and charities
Company Charity % share
Company name number number holding Description
NMRN Operations 09988314 1169061
N/A		 Operating company for the National Museum Group
NMRN Trading 01261270 - N/A Souvenir shops & corporate events
PHD Operations Limited 12799836 - 50% Ticketing company for Portsmouth Historic Dockyard
NMRN Hartlepool 09997836 1165917
N/A		 Holds the NMRN Hartlepool lease
HMS Victory Preservation Company 07935358 1146376
N/A		 Holds the ship, HMS Victory
HMS Victory Preservation Trust
HMS Caroline Preservation Company 08303946 1149930
N/A		 Holds the ship, HMS Caroline
HMS Caroline Preservation Trust
HMS Trincomalee Trust: 02678419 1007784
N/A		 Holds the ship, HMS Trincomalee
The Foudroyant Trust 00628111 0306082
N/A		 Dormant Charity
Warrior Preservation Trust 00936870 0256756
100%		 Holds the ship, HMS Warrior
Royal Marines Museum - 0259422
N/A		 Holds the Royal Marines Museum collection
Royal Marines Museum 07635447 1142186
N/A		 Dormant Charity
Royal Navy Submarine Museum - 1169371
N/A		 Holds the Royal Navy Submarine Museum collection
Royal Navy Submarine Museum 07637385 1142123
N/A		 Dormant Charity
Fleet Air Arm Museum - 0250079
N/A		 Holds the Fleet Air Arm Museum collection
Fleet Air Arm Museum 07570620 1143023
N/A		 Dormant Charity

A number of trustees of the National Museum are also trustees of the following charities:

Mr Mark Anderson NMRN Hartlepool, HMS Trincomalee Trust Mr Michael J Bedingfield NMRN Operations, Warrior Preservation Trust (resigned as NMRN Trustee 23 October 2022) Mr Philip Dolling NMRN Hartlepool Councillor Donna Jones Warrior Preservation Trust (resigned as NMRN Trustee 21 March 2023) Ms Helen Jackson HMS Victory Preservation Company Mrs Mary-Montagu-Scott HMS Victory Preservation Company Rear Admiral Jonathan Pentreath HMS Caroline Preservation Company (resigned as HMSCPCo trustee 21 October 2022) Mr John Michael E Scott HMS Caroline Preservation Company (appointed 14 October 2022)

The following employees of the National Museum are also trustees and/or directors of the following companies and charities:

Professor Dominic Tweddle NMRN Operations, Royal Marines Museum, Royal Navy Submarine Museum, NMRN Trading, NMRN Services (resigned as trustee and/or director from all companies and charities 30 November 2023). Mercantile Memorial Trust (appointed 23 July 2020) Mr Matthew Sheldon NMRN Operations (appointed 1 December 203), PHD Operations Ltd, NMRN Trading Mrs Sarah Dennis NMRN Operations, NMRN Trading, NMRN Services, PHD Operations Ltd Captain John Rees NMRN Services

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

During the year, no trustees, key managers or other related parties have undertaken any material transactions with the National Museum.

30. Third party funds

The National Museum holds funds on Trust on behalf of the Mercantile Marine Memorial Trust totalling £544,000 (2022: £550,000).

Page 77

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 2023

31. Prior year adjustments

Comparative information for 2022 has been restated to reflect third party funds which had previously been accounted for as funds of the National Museum, with a corresponding liability to the third party. See note 30. This change has no impact on reserves brought forward.

brought forward.
Cash at Bank Current liabilities
£ £
As previously stated at 1 April 2021 1,447 (894 )
Transfer between categories (561) 561
As restated at 1 April 2021 886 (333)
Cash at Bank Current liabilities
£ £
As previously stated at 31 March 2022 2,663 (1,371 )
Transfer between categories (550) 550
As restated at 31 March 2022 2,113 (821 )

32. Events after the Balance Sheet date

The Director General and Accounting Officer, Professor Dominic Tweddle resigned on 30 November 2023. Mr Matthew Sheldon was appointed as Interim Director General and Accounting Officer with effect from 1 December 2023.

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

33. Analysis of cash and cash equivalents

Cash at bank and in hand
34.
Analysis of changes in net debt
Company
Long-term borrowings
Short-term borrowings
Total liabilities
Cash and cash equivalents
Total net debt
Group
Long-term borrowings
Short-term borrowings
Total liabilities
Cash and cash equivalents
Total net debt		 Restated
Group
Group
2023
2022
£’000
£’000
21,166
16,982
Restated
At 1 April
2022
£’000
(720)
(80)
(800)
2,113
1,313
At 1 April
2022
£’000
(720)
(80)
(800)
16,982
16,182		 Company
2023
£’000
3,520
Cash
At
flows
£’000
80
-
80
1,407
1,487
Cash
At
flows
£’000
80
-
80
4,184
4,264		 Restated
Company
2022
£’000
2,113
31 March
2023
£’000
(640 )
(80 )
(720 )
3,520
2,800
31 March
2023
£’000
(640 )
(80 )
(720 )
21,166
20,446

Page 78

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 2023

35. Statement of financial activities (Company only, including the Royal Naval Museum and HMS M33 Trust as linked charities) for the year ended 31 March 2023

Unrestricted Restricted
funds
funds
Note
£’000
£’000
Income from:
Donations and legacies
Grant in Aid (revenue)
2
6,217
-
Grant in Aid (capital)
2
-
133
Donations
2
4
1,873
Total income
6,221
2,006
Expenditure on:
Charitable activities
8
562
14
Grant funding
8
5,527
800
Total expenditure
6,089
814
Net income/(expenditure)
132
1,192
Transfer between funds
(57 )
(1,071 )
Net movement in funds
75
121
Reconciliation of funds:
Total funds brought forward
(714 )
1,299
Total funds carried forward
(639 )
1,420		 Linked
charities
£’000
-
-
105
105
-
-
-
105
1,128
1,233
5,354
6,587		 2023
Unrestricted
Total
funds
£’000
£’000
6,217
5,476
133
130
1,982
31
8,332
5,637
576
515
6,327
4,998
6,903
5,513
1,429
124
-
(839)
1,429
(715)
5,939
1
7,368
(714)		 Restricted

funds

£’000
-
-
431
431
4
-
4
427
(286)
141
1,158
1,299		 Linked
charities

£’000
-
-
192
192
-
-
-
192
1,125
1,317
4,037
5,354		 2022
Total
£’000
5,476
130
654
6,260
519
4,998
5,517
743
-
743
5,196
5,939

Page 79

E03041096 978-1-5286-4624-6