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2023-03-31-accounts

Charity number: 1169061 Company number: 09988314

NMRN Operations (A company limited by guarantee)

Trustees' report and Consolidated financial statements

for the year ended 31 March 2023

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NMRN Operations (A company limited by guarantee) Company number: 09988314

Contents

Foreword .................................................................................................................................................................. 4 Performance Report ................................................................................................................................................. 5 Accountability Report ............................................................................................................................................ 17 Statement of Trustees’ and Accounting Officer’s responsibilities ......................................................................... 20 Independent auditors' report to the members of NMRN Operations ................................................................... 21 Consolidated Statement of financial activities (incorporating the income and expenditure account) ................. 25 Consolidated Balance sheet ................................................................................................................................... 26 Consolidated Cash Flow Statement for the year ended 31 March 2023 ............................................................... 27 Notes to the financial statements…………………………………………………………………………………………………………………….28

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NMRN Operations (A company limited by guarantee) Company number: 09988314

Legal and administrative information

Charity number 1169061
Company registration number 09988314
Registered office HM Naval Base PP66
Portsmouth
Hampshire PO1 3NH
Business address HM Naval Base PP66
Portsmouth
Hampshire PO1 3NH
Director General and Accounting Officer Matthew Sheldon (appointed 1 December 2023)
Dominic Tweddle (resigned 30 November 2023)
Trustees Mr Richard Hatfield
Mrs Emma Allen (resigned 27 July 2022)
Mrs Kathleen Barnes (appointed 5 December 2022)
Mr Michael Bedingfield
Mrs Jane Dean
Ms Carol Marlow (resigned 17 March 2022)
Mr Mark Pemberton
Rear Admiral Jonathan P Pentreath CB OBE (appointed 1
September 2023)
Mr Matthew Sheldon (appointed 1 December 2023)
Professor Dominic Tweddle (resigned 30 November 2023)
Accountants Compass Accountants Limited
Venture House, The Tanneries, East Street, Titchfield,
Hampshire PO14 4AR
Auditors PKF Littlejohn LLP
15 Westferry Circus, Canary Wharf, London, E14 4HD
Bankers Natwest Bank Plc
130 Commercial Road, Portsmouth, Hampshire PO1 1ES

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NMRN Operations (A company limited by guarantee) Company number: 09988314

Trustees’ annual report (incorporating the directors’ report) and Strategic report

Foreword

The charitable objectives of NMRN Operations (the company), as defined in the Articles of Association (as amended by Special Resolution 9 August 2016), are:

The promotion of the efficiency and effectiveness of charities for the benefit of the public, in particular by supporting and assisting the charitable work of the National Museum of the Royal Navy.

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NMRN Operations (A company limited by guarantee) Company number: 09988314

Performance Report

Overview

The company was formed as the operating company for the National Museum of the Royal Navy Group and operates the Fleet Air Arm Museum, the Royal Marines Museum, Explosion! Museum of Naval Firepower, NMRN Portsmouth (the Royal Naval Museum), HMS Caroline, NMRN Hartlepool, the Royal Navy Submarine Museum, HMS Victory, HMS M33, HMS Warrior, Portsmouth Historic Dockyard and Action Stations.

The National Museum of the Royal Navy (“the National Museum”) is the sole corporate member of the company.

The formation of NMRN Operations enabled the National Museum to simplify the governance structure and consolidate all operations and project delivery for the National Museum Group. The company is the main employer for the National Museum. This structure realises the benefits of operation of the museums through a large organisation, improving visitor experience, enhancing access to the collections and providing greater cohesion and efficiency in the delivery of the charitable objectives.

The National Museum is one of the few national museums headquartered outside London, acquiring key sites also outside the capital, enabling people to learn, enjoy and engage with the story of the Royal Navy, and its impact in shaping the modern world. Its vision is to become the world’s most respected Naval Museum and its goal is to promote the public understanding of the Royal Navy past, present and future. Its strategy for the period set out to increase its:

Resilience , improving its financial position and skilling the team so that it is able to adapt to threats to ensure its survival;

Scale , to grow the collections and the range of activities they support so that the National Museum has marked impact on society as a whole;

Scope , to develop the range of activities which together better help protect and improve access to the naval heritage, including its own collections; and

Reach , to develop a greater physical and virtual presence so that more people engage with the Royal Navy story.

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

Activities and Achievements

Visitors

During this period, our museum 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

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NMRN Operations (A company limited by guarantee) Company number: 09988314

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.

We 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.

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NMRN Operations (A company limited by guarantee) Company number: 09988314

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.

Our subsidiary company, 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 trading 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, we have 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.

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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NMRN Operations (A company limited by guarantee) Company number: 09988314

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NMRN Operations (A company limited by guarantee) Company number: 09988314

Portsmouth University Volunteering Fair and Global Fair to engage with the local student communities. Our volunteers are involved in a diverse range of projects and activities. Notably, volunteers were integral to the reopening of HMS Caroline, having returned to the ship to support the deep clean prior to opening the doors to visitors. Volunteers have supported a 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 reached an audience of 24 billion, with 3,921 media mentions across print, broadcast and online channels.

Special mention should be made of the sad passing of Her 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 the National Museum’s 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,

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NMRN Operations (A company limited by guarantee) Company number: 09988314

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 long-awaited 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 best-selling 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.

Exhibitions and Programming

Within this difficult financial environment, we have drawn on a mixture of external grant funding, partnership support, our restricted funds and grant funding from the charitable trusts within the National Museum group 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:

We delivered improvement to the National Museum’s permanent galleries and exhibitions, including 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 that we delivered included:

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NMRN Operations (A company limited by guarantee) Company number: 09988314

Collections and Research

This year we have made 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

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NMRN Operations (A company limited by guarantee) Company number: 09988314

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.

Our 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.

Our 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.

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

Conservation and Historic Ships

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NMRN Operations (A company limited by guarantee) Company number: 09988314

of the key messages of the project and directional signage to support the visitors moving around the structure.

Joint Venture with the Mary Rose Trust

Our joint venture vehicle, Portsmouth Historic Dockyard Operations Ltd (company number: 127998360), has continued to act as agent for the sale of tickets for NMRN Operations and the Mary Rose Trust, with the distribution of sales revenue and share of costs on an agreed split. The rolling 3-year agreement has gone from strength to strength, providing stability and a shared stake in improvement and development of the business.

Through the joint venture, and the efforts of the teams from the Mary Rose Trust and NMRN Operations working in close partnership, we were able to provide a revised and simplified ticket offer, new pricing, single point of entry for visitors and refreshed branding for Portsmouth Historic Dockyard. The ticket and pricing strategy has also delivered increases in yield which has been vital in a period when capacities have been limited by government restrictions and when many visitor markets were not operating. The push of website sales increased ticket sales and gift aid conversion rates. Key marketing campaigns for the period were based on investments made by each charitable company: the permanent new gallery ‘HMS Victory: the Nation’s Flagship’ and a dramatic new immersive experience ‘1545: When Their World Ended’.

Post balance sheet events

There are no post balance sheet events.

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NMRN Operations (A company limited by guarantee) Company number: 09988314

Plans for Future Periods

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

In 2022, the National Museum of the Royal Navy’s Trustees took a step back to develop 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 www.nmrn.org.uk/news/national-museum-royal-navy-strategy-2022-2027-andbeyond. 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 the annual business planning cycle that sets out the priority and phasing of operational and project delivery for NMRN Operations each year.

Sustainability

Our key focus 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.

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

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 Environmental Sustainability Strategy, to deliver environmentally and financially sustainable operations, and reduce our carbon footprint.

Audiences

We will continue to grow and diversify our audiences onsite and online and explore different Royal Navy story perspectives through our diverse communities and the National Museum’s 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 implement the National museum’s 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

The National Museum’s commitment to any new capital projects or large acquisitions will be limited to only for those essential to its purpose. We will support the National Museum by prioritising 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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NMRN Operations (A company limited by guarantee) Company number: 09988314

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 Uncertainty

A principal risk faced by the company centres around the ongoing uncertainty of future income streams arising from the residual impact of the Covid-19 pandemic combined with the economic recession, and a reduction in the Grant In Aid funding that will be available to the National Museum in future years. We will seek to mitigate this risk by continuing to support the National Museum in development of group strategies to diversify income streams, grow revenue and seek support through fundraising activities.

The risk of major project delivery failure, through delays, cost overrun, excessive operating costs, fundraising shortfall, impact on cash flow, and quality of project, will be mitigated as we continue to develop and embed governance and oversight of key projects through our Programme Board and ensure all major projects follow our standard project management methodology. Improvements will continue to be made to project cashflow forecasting and “in operation” business cases and budgeting for all major projects.

The risk of failure to meet our legislative obligations under the Environment Act will be mitigated through supporting the National Museum in 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. We will embed environmental objectives and risks into our decision making and project evaluation processes.

Financial Review

Statement of Financial Activities for the Year Ended 31 March 2023

Total incoming resources for NMRN Operations in 2022-23 amounted to £28,493,678 (2021-22: £13,712,182). This included operating grants and project grants, admissions income (including gift aid), voluntary donations and trading activity through the subsidiary National Museum of the Royal Navy Trading. The movement on the prior year reflects the increased grant funding we have received for project delivery as we have recommenced project activities in the post-pandemic environment.

Total resources expended for 2022-23 amounted to £20,673,034 (2021-22: £14,701,220), representing operating and project costs, trading and fundraising activity. Again, the movement reflects increased project delivery activity.

After gains of £2,802,634 (2021-22: gains of £1,276,129) on the revaluation of fixed assets and actuarial gains on defined benefit pension schemes, the net movement in funds for the year was an increase of £10,623,278 (2021-22: £287,091).

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NMRN Operations (A company limited by guarantee) Company number: 09988314

Balance sheet

The net assets as at 31 March 2023 amounted to £35,746,098 (2022: £25,122,820). Of this total, £18,084,292 related to restricted funds, £16,860,734 was unrestricted funds and £507,462 was designated funds. A further £293,610 related to non-charitable trading funds.

Reserves

The Trustees regularly monitor the levels of reserves and seek to take correction action as necessary. 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 £3,408,493 (31 March 2022: £2,267,323).

Under the Group’s governance structure, as nearly the entire Group’s operating costs now flow through NMRN Operations, the policy is that sufficient free reserves are accumulated within 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 (target £3,930,000), increasing to six months’ operating expenditure for the entire National Museum by 31 March 2030 (target £6,950,000). 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 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.

Auditors

The accounts have been audited by PKF Littlejohn LLP. A resolution to reappoint the auditor will be put to the members at the Annual General Meeting.

So far as the Trustees and Accounting Officer are aware, there is no relevant audit information of which the company’s auditors are unaware. Trustees have taken all the steps necessary to make themselves aware of any relevant audit information and to establish that the company’s auditors are aware of that information.

Approved by the Board and signed on its behalf by

Mr Richard Hatfield Matthew Sheldon Chairman on Behalf of the Board of Trustees Director General and Accounting Officer

Date: 19[th] December 2023 Date: 19[th] December 2023

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NMRN Operations (A company limited by guarantee) Company number: 09988314

Accountability Report

Trustees Report and Governance Statement

This report sets out the arrangements for the governance of the NMRN Operations, including the Board structure for Trustees. The Trustees, who are also the directors of NMRN Operations (the company) for the purposes of company law and who served during the year and up to the date of this report are set out on page 3.

The Trustees have due regard to guidance issued by the Charity Commission on public benefit and in its charitable objects, the charity seeks to promote the efficiency and effectiveness of other charities for the public benefit. The charitable company operates fee paying attractions and endeavours to ensure that ticket prices are set at an accessible level, which includes the availability of several types of concessions. The charitable company offers workshops to schoolchildren in support of the National Curriculum, operates community outreach programmes in the local areas for children, their parents and carers, and hosts foreign language school pupils. NMRN Operations’ activities are supported by a team of volunteers numbering 380 who deliver a variety of tasks across the museum.

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

The Governance Framework

NMRN Operations is a charity registered with the Charity Commission (registration number 1169061). It is governed by its Memorandum and Articles of Association dated 9 August 2016, which incorporate its charitable objects, the powers of the company and provides for the appointment and re-appointment of directors. Trustees are appointed in accordance with the Charity Commission guidance ‘Finding new trustees: what charities need to know’ and appointments are guided by the principles of the Cabinet Office guidelines ‘Governance Code on Public Appointments’.

The Trustees ensure the distinct legal responsibilities and charitable objectives of NMRN Operations are fulfilled while acting within an overall policy and strategy framework developed by the National Museum of the Royal Navy. The day to day operation of the charitable company within that framework is delegated to the National Museum’s Director General and Executive Directors.

A formal induction process for Trustees is in place which combines all the necessary background reading material including items such as the Memorandum and Articles of Association, copies of minutes of recent meetings, a copy of the Charity Commission publication “The Essential Trustee: what you need to know”, a copy of the National Museum’s strategy and corporate plan and a copy of the Museum Association publication “Code of Ethics for Trustees”, with visits to the National Museum’s sites to meet key members of staff and to discuss current issues. Recent appointees continue to confirm their satisfaction with this process.

Register of Interests

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

Equity, Diversity and Inclusion

Our vision is to be the world’s most inspiring Naval Museum, Linking Navy to Nation. Our staff are pivotal in realising our vision. To support this, we are committed to creating a great place to work where people feel

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NMRN Operations (A company limited by guarantee) Company number: 09988314

happy, can be themselves and want to achieve their best. We embrace diversity and want everyone to feel valued and have a sense of belonging.

Equity, Diversity and Inclusion is a priority, we know we have much work to do, and we are accelerating our commitment to inclusion and diversity in our workplace and National Museum, improving this in the collections we share and the stories we tell. One of our key strategic objectives for 2022-2027 is to, ‘explore different Royal Navy story perspectives with our diverse communities and collections’. Our Trustees recently approved a set of principles which will guide the Museum in work on, ‘Addressing Empire’. These are:

Personal data related incidents

There have been no incidents of data loss involving personal information during the period which required formal reporting to the Information Commissioner’s Office.

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 charity’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 National Museum of the Royal Navy’s Audit and Governance Committee. This Committee is chaired by a Trustee of the National Museum’s Board of Trustees and draws expertise from other Trustees and committee members, with the executive in attendance as required. The Committee also has access to the independent accountants and internal and external auditors engaged for all companies within the Group, providing review and oversight of the financial control systems and the creation of company and consolidated group accounts.

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NMRN Operations (A company limited by guarantee) Company number: 09988314

Risk Management

The company’s risk register and the responses to risk are managed by the Executive team and overseen by the National Museum’s Audit and Governance Committee as well as the company’s board. In addition, the company has a system of internal review and checks which link to plans and risks.

Mr Richard Hatfield Matthew Sheldon Chairman on Behalf of the Board of Trustees Director General and Accounting Officer Date: 19[th] December 2023 Date: 19[th] December 2023

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NMRN Operations (A company limited by guarantee) Company number: 09988314

Statement of Trustees’ and Accounting Officer’s responsibilities for the year ended 31 March 2023

The Board of Trustees (who are also directors of NMRN Operations for the purposes of company law) and the Accounting Officer are responsible for preparing the Trustees’ Annual Report (including the Strategic Report) and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Company law requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and of the incoming resources and application of resources, including the income and expenditure, of the charitable company for that period. In preparing these financial statements, the Trustees are required to:

The Trustees are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the charitable company and which enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the charitable company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Mr Richard Hatfield Matthew Sheldon Chairman on Behalf of the Board of Trustees Director General and Accounting Officer

Date: 19[th] December 2023 Date: 19[th] December 2023

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NMRN Operations (A company limited by guarantee) Company number: 09988314

Independent auditors' report to the members of NMRN Operations

Opinion

We have audited the financial statements of NMRN Operations (the ‘parent charitable company’) and its subsidiary (the ‘group’) for the year ended 31 March 2023 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Parent Charitable Company Balance Sheets, the Consolidated Cash Flow Statement and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

Other information

The other information comprises the information included in the trustees’ annual report, other than the financial statements and our auditor’s report thereon. The trustees are responsible for the other information contained within the trustees’ annual report. Our opinion on the financial statements does not cover the other information and except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

Page 21

NMRN Operations (A company limited by guarantee) Company number: 09988314

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, except for the possible effects of the matters described in the basis for qualified opinion section of our report, based on the work undertaken in the course of the audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent charitable company and their environment obtained in the course of the audit, except for the possible effects of the matters described in the basis for qualified opinion section of our report, we have not identified material misstatements in the strategic report or the directors’ report included within the trustees’ annual report.

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

Responsibilities of trustees

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

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

Auditor’s responsibilities for the audit of the financial statements

We have been appointed auditor under the Companies Act 2006 and report in accordance with this Act, and relevant regulations made or having effect thereunder.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise

Page 22

NMRN Operations (A company limited by guarantee) Company number: 09988314

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.

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

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This

Page 23

NMRN Operations (A company limited by guarantee) Company number: 09988314

risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our 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 our auditor’s report.

Use of our report

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

Alastair Duke (Senior Statutory Auditor) 15 Westferry Circus For and on behalf of PKF Littlejohn LLP Canary Wharf Statutory Auditor London E14 4HD

Date: 20 December 2023

Page 24

NMRN Operations (A company limited by guarantee) Company number: 09988314

Consolidated Statement of financial activities (incorporating the income and expenditure account) For the year ended 31 March 2023

Unrestricted
funds
Notes
£
Income from:
Donations and legacies
Grant (operating)
2
5,462,465
Grant (projects)
2
-
Grant (capital)
2
-
Other grants and donations
2
336,200
Legacies
-
Charitable activities
Admissions
3
5,489,241
Charges for services
600,806
Other trading activities
Trading company
4
2,251,208
Investments
889
Other
5
268,477
Total income
14,409,286
Expenditure on:
Raising funds
Fundraising and publicity
6
1,318,892
Trading company
4
1,776,261
Charitable activities:
Museum and visitor operations
7
10,862,548
Grants
9
4,000
Total expenditure
13,961,701
Net losses on investments
(60,000)
Net income/(expenditure)
387,585
Transfers between funds
5,322,995
Other recognised gains/(losses):
Impairment on revaluation of properties
-
Gains on revaluation of fixed assets
1,127,646
Actuarial gains/(losses) on defined
benefit pension schemes
485,000
Net movement in funds
7,323,226
Reconciliation of funds:
Total funds brought forward
10,391,204
Total funds carried forward
17,714,430		 Restricted
funds
£
-
800,000
-
13,127,278
5,395
-
-
-
-
-
13,932,673
-
-
3,936,467
53,484
3,989,951

-
9,942,722
(5,322,995)
-
1,920,452
-
6,540,179
14,731,616
21,271,795		 2023
Unrestricted Restricted
2022
Total
funds
funds
Total
£
£
£
£
5,462,465
4,870,023
- 4,870,023
800,000
-
-
-
-
91,089
-
91,089
13,463,478
397,338
1,093,121 1,490,459
5,395
22,580
6,300
28,880
5,489,241
5,062,792
- 5,062,792
600,806
243,928
-
243,928
2,251,208
1,639,523
- 1,639,523
889
464
-
464
268,477
285,024
-
285,024
28,341,959
12,612,761
1,099,421 13,712,182
1,318,892
1,017,531
- 1,017,531
1,776,261
1,625,806
- 1,625,806
14,799,015
9,616,535
2,249,723 11,866,258
57,484
167,500
24,125
191,625
17,951,652
12,427,372
2,273,848 14,701,220
(60,000)
-
-
-
10,330,307
185,389 (1,174,427 )
(989,038 )
-
885,379
(885,379)
-
-
(948,096)
-
(948,096 )
3,048,098
152,669
1,826,556 1,979,225
485,000
245,000
-
245,000
13,863,405
520,341 (233,250)
287,091
25,122,820
9,870,863 14,964,866 24,835,729
38,986,225
10,391,204 14,731,616 25,122,820

All recognised gains and losses are included in the statement of financial activities

The notes on pages 28 to 52 form an integral part of these financial statements.

Page 25

NMRN Operations (A company limited by guarantee) Company number: 09988314

Consolidated Balance sheet as at 31 March 2023

Notes
Fixed assets
Tangible fixed assets
14
Investment properties
14
Current assets
Stocks
15
Debtors
16
Cash at bank and in hand
Liabilities:
Creditors falling due within one year
17
Net current assets/(liabilities)
Total assets less current liabilities
Net assets excluding pension asset/liability
Defined benefit pension scheme asset/liability
11
Net assets including pension fund liability
Funds
18
Unrestricted funds
Revaluation reserve
Designated funds
Total unrestricted funds
19
Restricted funds
Restricted revaluation reserve
Total restricted funds
20
Non charitable trading funds
Total funds		 Group
Group
Charity
Charity
2023
2022
2023
2022
£
£
£
£
32,394,512
23,305,870
32,159,740
22,980,157
590,000
-
590,000
-
32,984,512
23,305,870
32,749,740
22,980,157
662,994
538,251
233,286
214,605
5,053,623
3,110,194
5,571,350
3,076,728
2,448,883
1,397,417
2,043,540
1,333,759
8,165,500
5,045,862
7,848,176
4,625,092
(2,320,787)
(2,955,912)
(2,062,301)
(2,558,704)
5,844,713
2,089,950
5,785,875
2,066,388
38,829,225
25,395,820
38,535,615
25,046,545
38,829,225
25,395,820
38,535,615
25,046,545
157,000
(273,000)
157,000
(273,000)
38,986,225
25,122,820
38,692,615
24,773,545
15,440,168
9,360,323
15,440,168
9,360,323
1,473,190
345,544
1,473,190
345,544
507,462
340,862
507,462
340,862
17,420,820
10,046,729
17,420,820
10,046,729
16,691,895
12,072,168
16,691,895
12,067,368
4,579,900
2,659,448
4,579,900
2,659,448
21,271,795
14,731,616
21,271,795
14,726,816
293,610
344,475
-
-
38,986,225
25,122,820
38,692,615
24,773,545

The financial statements were approved by the Trustees and signed on their behalf by

Mr Richard Hatfield Chairman

Date:

The notes on pages 28 to 52 form an integral part of these financial statements.

Page 26

NMRN Operations (A company limited by guarantee) Company number: 09988314

Consolidated Cash Flow Statement for the year ended 31 March 2023

Group Group
2023 2022
Notes £ £
Cash flows from operating activities:
Net cash provided by/(used in) operating activities 9,751,095 1,236,042
Cash flows from investing activities:
Income from investments 889 464
Purchase of fixed assets (8,050,518) (1,147,124)
Purchase of investments (650,000) -
Net cash (used in)/provided by investing activities (8,699,629) (1,146,660)
Increase/(Decrease) in cash and cash equivalents in the year 1,051,466 89,382
Cash and cash equivalents at 1 April 2022 1,397,417 1,308,035
Cash and cash equivalents at 31 March 2023 26 2,448,883 1,397,417
Net income/(expenditure) for the reporting period 10,330,307 (989,038)
Depreciation and impairment 1,894,491 1,016,206
Loss on disposal of fixed assets 115,483 236,210
Loss on investments 60,000 -
Income from investments (889) (464)
(Increase)/Decrease in stocks (124,743) 134,894
(Increase)/Decrease in debtors (1,943,429) 1,842,237
(Decrease)/Increase in creditors (635,125) (1,067,003)
Increase/(Decrease) in provisions for liabilities 55,000 63,000
Net cash provided by/(used in) operating activities 9,751,095 1,236,042

Page 27

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements for the year ended 31 March 2023

1. Accounting policies

1.1. Company information

NMRN Operations 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.

NMRN Operations and its group meet 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 accounting

The financial statements have been prepared in accordance with Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) issued in October 2019, the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102), the Charities Act 2011, the Companies Act 2006 and UK Generally Accepted Accounting Practice.

The financial statements have been prepared on a going concern basis as the trustees believe that no material uncertainties exist. The trustees have considered the level of funds held and the expected level of income and expenditure for 12 months from authorising these financial statements. The budgeted income and expenditure is sufficient with the level of reserves for the charity to be able to continue as a going concern.

The financial statements are presented in sterling which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.

Consolidated financial statements have been prepared in respect of the charitable company, its wholly owned subsidiary, the National Museum of the Royal Navy (NMRN) Trading, and its Joint Venture, Portsmouth Historic Dockyard (PHD) Operations Limited. The Consolidated Statement of Financial Activities includes the results of NMRN Trading and the company’s share of the results of PHD Operations Limited as single line items. The consolidated balance sheet includes the net assets of NMRN Trading on a line by line basis and the company’s share of the net assets of PHD Operations Limited as an item within Fixed Asset Investments.

1.3. Going concern

In addition to the revenue it generates, the company receives grant funding from the parent company, the National Museum of the Royal Navy, and other subsidiary trusts within the Group, in respect of its operation of the group’s museums and conservation of heritage assets. 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 company’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. Income

Income is recognised when the charity has entitlement to the funds, any performance conditions attached to the items of income have been met, it is probable that the income will be received and the amount can be measured reliably.

Page 28

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

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

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

1.5. Grants receivable

Revenue grants are credited to incoming resources on the earlier date of when they are received or when they are receivable. If a grant of donation is subject to conditions that require a level of performance before the charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met, or the fulfilment of those conditions is wholly within the charity’s control and it is probable those conditions will be met in the accounting period.

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

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

1.6. Expenditure

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.

1.7. Basis of allocation

Cost of generating funds comprises costs incurred in encouraging people and organisations to contribute financially to the charity's work and to promote the Naval Service Museums as visitor attractions.

Governance costs include those incurred in the governance of the charity and its assets and are primarily associated with constitutional and statutory requirements.

Charitable expenditure includes expenditure associated with Operations, Collections & Research, and Learning, and include 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 in proportion to staff costs incurred in the following percentages:

incurred in the following percentages:
Operations
Collections & research
Learning		 2023
%
75
15
10
100		 2022
%
74
14
12
100

Support costs include central functions and have been allocated to cost categories on a basis consistent with the use of resources.

1.8. Foreign currency transactions

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate ruling at the end of the month preceding the transaction. Exchange differences are taken into account in arriving at the net incoming/(outgoing) resources.

1.9. Funds

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.

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

Page 29

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements for the year ended 31 March 2023

1.10. 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 derived indices.

Land and buildings are stated at a valuation of depreciated replacement cost and depreciated over the lease term. A professional valuation is obtained at least every 5 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:

as follows:
Leasehold buildings - over the lease term
Property improvements - over the lease term
Computer and office equipment - 3 - 10 years
Fixtures and fittings - 3 - 20 years
Plant and machinery - 3 - 30 years
Exhibitions - 3 - 10 years
Assets under construction are not depreciated.

Significant Historic Ships

Significant ships are held by separate charitable Trusts within the National Museum group.

Accounting policy for recognition of subsequent expenditure on significant ships

As the National Museum’s operating company, NMRN Operations is responsible for the restoration, preservation, and maintenance of each ship under the terms of the operator agreement. Expenditure incurred by the operating company is recognised 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.

1.11. Assets held by the National Museum of the Royal Navy Trading

The tangible fixed assets of the National Museum of the Royal Navy Trading are stated in the group accounts at historic cost less accumulated depreciation. Depreciation has been provided at rates calculated to spread the cost of each asset over its expected useful life as follows:

Property Improvements - over the lease term
Fixtures and Fittings - 5 years
Plant and machinery - 5 years
Office Equipment - 5 years
Exhibitions - 4 years

1.12. Leased assets

Rentals applicable to operating leases are charged to the Statement of Financial Activities as incurred.

1.13. 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.

1.14. Stock

Stocks are valued 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.

1.15. Basic financial Instruments

The charity's financial assets and liabilities consist of cash and cash equivalents, trade and other debtors, and trade and other creditors. 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.

Page 30

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements for the year ended 31 March 2023

Term deposits of less than one year are classified as investments within current assets.

1.16. Pensions

The majority of staff of NMRN Operations and its subsidiary 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 NMRN Operations under the Transfer of Undertakings (Protection of Employment) Regulations 1981 have retained membership of their former employers' pension schemes, which provide benefits based on final pensionable pay and include the Principal Civil Service Pension Scheme (PCSPS) and the Local Government Pension Scheme (LGPS).

Group Pension Plan

The National Museum operates a Group Pension Plan with employer's contributions being payable at 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).

1.17. 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.

Page 31

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements for the year ended 31 March 2023

2. Grants and donations received

During the year the following grants and donations were received:

Unrestricted Unrestricted Restricted **Total ** Unrestricted Restricted Total
funds funds 2023
funds		 funds 2022
£ £ £
£		 £ £
National Museum of the Royal Navy
Operations 5,462,465 - 5,462,465
4,870,023		 - 4,870,023
Projects - 887,000 887,000
-		 - -
Purchase of exhibits - - -
91,089		 - 91,089
5,462,465 887,000 6,262,465
4,961,112		 - 4,961,112
Other grants and donations
Heritage Lottery Fund Grant - LCT 7074 - 804,994 804,994
-		 - -
Coronavirus Job Retention Scheme - - -
-		 121,628 121,628
Coastal Forces Heritage Trust - - -
-		 87,000 87,000
Fleet Air Arm Museum Trust - 635,815 635,815
-		 56,255 56,255
Lady Cobham - - -
-		 150,000 150,000
Hartlepool Borough Council 309,667 3,524,918 3,834,585
359,563		 - 359,563
HMS Victory Preservation Endowment Fund
-		 7,783,648 7,783,648
-		 750,000 750,000
HMS Victory Preservation Company - 97,079 97,079
-		 809,358 809,358
Maritime Archaeology Sea Trust - 61,890 61,890
-		 53,516 53,516
RMA The Royal Marines Charity - - -
-		 (1,000,000) (1,000,000)
))
Royal Navy Submarine Museum Trust - - -
-		 6,692 6,692
Society of Friends of Fleet Air Arm Museum - - -
-		 20,000 20,000
Society of Nautical Research - 100,000 100,000
-		 - -
Miscellaneous donations and grants 26,533 118,934 145,467
37,775		 38,672 76,447
336,200 13,127,278 13,463,478
397,338		 1,093,121 1,490,459

3. Admissions

Unrestricted
funds
£
Portsmouth Historic Dockyard
4,393,792
Fleet Air Arm Museum
809,289
Hartlepool
279,921
HMS Caroline
6,239
5,489,241		 Total
Unrestricted
2023
funds
£
£
4,393,792
4,092,030
809,289
734,733
279,921
236,029
6,239
-
5,489,241
5,062,792		 Total
2022
£
4,092,030
734,733
236,029
-
5,062,792

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

Page 32

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

4. Income and expenses from trading activities of subsidiaries

National Museum of the Royal Navy Trading

The company controls the National Museum of the Royal Navy Trading (NMRNT), a company limited by guarantee incorporated in England and Wales. NMRNT operates a number of souvenir shops within the Museums and the corporate events.

At the discretion of its directors, NMRNT distributes its net profit to NMRN Operations (the parent).

A summary of the company's trading results is shown below:

Turnover
Cost of sales
Gross Profit
Administration expenses
Other income
Net profit / (loss)
Tax on ordinary activities
Available for distribution
Amount gifted to NMRN Operations
Reserves brought forward
Reserves carried forward
Assets
Liabilities
Retained earnings		 2023
2022
£
£
2,131,520
1,620,298
(744,604)
(707,153 )
1,386,916
913,145
(1,048,843)
(863,610 )
119,688
19,225
457,761
68,760
17,186
(55,043)
474,947
13,717
(525,812)
-
(50,865)
13,717
344,475
330,758
293,610
344,475
1,235,134
813,126
(941,524)
(468,651)
293,610
344,475

5. Other income

Unrestricted
funds
£
Education workshops
22
CLRA events
5,020
Hires
13,657
Collections
1,883
Media
5,227
Museum & Galleries Exhibition Tax Relief
170,110
Sundry income
72,558
268,477		 Total
Unrestricted
2023
funds
£
£
22
375
5,020
4,212
13,657
11,277
1,883
1,540
5,227
585
170,110
219,821
72,558
47,214
268,477
285,024		 Total
2022
£
375
4,212
11,277
1,540
585
219,821
47,214
285,024

Page 33

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

6. Cost of generating funds

Unrestricted
funds
£
Staff costs
890,146
Premises expenses
279,802
Fundraising operating costs
88,200
Printing, postage and stationery
4,544
Telephone
11,492
Events and functions
43,703
Membership scheme
1,005
1,318,892		 Total
Unrestricted
2023
funds
£
£
890,146
702,395
279,802
174,888
88,200
112,741
4,544
5,934
11,492
9,227
43,703
10,650
1,005
1,696
1,318,892
1,017,531		 Total
2022
£
702,395
174,888
112,741
5,934
9,227
10,650
1,696
1,017,531

7. Museum and visitor operations

Staff costs
Other staff costs
Marketing
Site costs
Computer costs
Curatorial
Purchase of exhibits
Exhibition costs
Waterbus operating costs
Depreciation
Loss on disposal of fixed assets
Governance and support costs
Project costs
HMS Invincible
HMS Victory Preservation
Landing Craft (Tank) LCT7074
Royal Marines Museum relocation
Hartlepool project costs
Fleet Air Arm Museum project costs
Coastal Forces Gallery
Other project costs		 Collections
Total
Total
Operations & Research
Learning
2023
2022
£
£
£
£
£
3,555,838
693,279
491,494
4,740,611
4,211,490
131,134
26,227
17,484
174,845
235,166
672,672
-
-
672,672
306,042
218,518
-
-
218,518
304,435
351,831
-
-
351,831
375,110
-
423,754
-
423,754
939,274
-
450
-
450
17,220
-
66,746
-
66,746
14,133
119,807
-
-
119,807
80,647
1,364,955
272,993
181,993
1,819,941
860,984
18,311
3,662
2,442
24,415
215,955
2,431,885
475,284
335,346
3,242,515
2,691,227
8,864,951
1,962,395
1,028,759
11,856,105
10,251,683
39,316
-
-
39,316
76,506
2,381,127
-
-
2,381,127
1,318,819
49,278
-
-
49,278
59,037
37,113
-
-
37,113
(38,730)
249,571
-
-
249,571
101,792
25,983
-
-
25,983
5,068
-
-
-
-
83,545
160,522
-
-
160,522
8,538
2,942,910
-
-
2,942,910
1,614,575
11,807,861
1,962,395
1,028,759
14,799,015
11,866,258

Page 34

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

8. Governance and support costs

Collections
Operations & Research
£
£
Governance costs
Legal and professional
45,454
9,091
Consultancy
81,133
16,227
Accountancy & payroll
35,220
7,044
Auditors' remuneration
14,090
2,818
Internal auditors' remuneration
28,485
5,697
Support costs
Repairs and maintenance
476,511
95,302
Insurance
344,895
68,979
Premises costs
1,101,722
209,852
Printing, postage and stationery
17,892
3,408
Telephone
45,248
8,619
Travelling
117,889
23,578
Bank charges and interest
63,702
12,740
Health and safety
13,180
2,636
Sundry expenses
5,253
1,051
Subscriptions
41,211
8,242
2,431,885
475,284		 Learning
£
6,061
10,818
4,696
1,879
3,798
63,535
45,986
157,389
2,556
6,464
15,719
8,493
1,757
700
5,495
335,346		 Total
2023
£
60,606
108,178
46,960
18,787
37,980
635,348
459,860
1,468,963
23,856
60,331
157,186
84,935
17,573
7,004
54,948
3,242,515		 Total
2022
£
177,314
96,408
38,890
37,887
34,383
684,844
248,499
1,074,314
36,451
56,683
55,556
98,314
20,192
8,403
23,089
2,691,227

9. Grants payable

Unrestricted Restricted
funds
funds
£
£
Royal Naval Museum
-
-
National Museum of the Royal Navy
4,000
53,484
4,000
53,484		 Total
Unrestricted Restricted
2023
funds
funds
£
£
£
-
167,500
20,000
57,484
-
4,125
57,484
167,500
24,125		 Total
2022
£
187,500
4,125
191,625

Page 35

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

10. Employee costs

Employment costs
Wages and salaries
Social security costs
Defined contribution pension costs
Defined benefit pension costs
Recharges		 Group
2023
£
6,163,311
506,694
407,067
61,525
-
7,138,597		 Group
2022
£
5,037,972
370,750
349,057
71,448
-
5,829,227		 Charity
2023
£
6,163,311
506,694
407,067
61,525
(610,440)
6,528,157		 Charity
2022
£
5,037,972
370,750
349,057
71,448
(312,203)
5,517,024

Key management personnel

Key management personnel are employed by the parent charity.

Higher paid employees

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

2023 2022
£60,001 to £70,000 3 2
£70,001 to £80,000 1 1

Number of employees

The average monthly number of employees during the period was as follows:

Fundraising
Charitable activities
Governance		 2023
4
353
3
360		 2022
4
294
3
301

During this financial year Nil (2022: 7) redundancies were identified and contractual/redundancy costs of £Nil (2022: £19,367) were paid in the year with £Nil (2022: £Nil) being accrued at 31 March 2023.

Trustees' emoluments

No trustees received remuneration during the period. Five trustees were reimbursed for travel expenses totalling £898 (2022: £906).

Page 36

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements for the year ended 31 March 2023

11. Pensions

NMRN Operations contributes to a Group Pension Plan and is a participating employer in the Principal Civil Service Pension Scheme and the Local Government Pension Scheme (including Hampshire Pension Fund and Teesside Pension Fund).

Principal Civil Service Pension Scheme (PCSPS)

The PCSPS is an unfunded multi-employer defined benefit scheme but NMRN Operations 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 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 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:

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)

Page 37

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

Amounts recognised in the Statement of Financial Activities

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 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 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.

Page 38

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

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

Page 39

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

Changes to the fair value of assets during the accounting period

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

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:

Defined contribution schemes
Group scheme
PCSPS
Defined benefit schemes
LGPS - Hampshire Pension Fund
LGPS - Teesside Pension Fund
12.
Net outgoing resources for the year
Net outgoing resources for the year is stated after charging:
Depreciation and other amounts written off tangible assets
Auditors' remuneration		 2023
£
389,966
17,493
35,000
26,525
468,984
2023
£
1,528,071
18,787		 2022
£
334,216
15,073
37,000
34,448
420,737
2022
£
1,076,939
37,887

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. The company's trading subsidiary is subject to corporation tax.

Page 40

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

14. Fixed assets

Group

Group
Cost or valuation
At 1 April 2022
Additions
Transfers
Revaluation
Disposals
At 31 March 2023
Depreciation
At 1 April 2022
Charge for the year
Revaluation
On disposals
At 31 March 2023
Net book values
At 31 March 2023
At 31 March 2022		 Investme
nt
Short
leasehold
Assets
under
Improvem
ents
propertie
s
land &
buildings
constructi
on
to
property
£
£
£
-
4,475,000
188,720
7,967,248
650,000
2,820,242
-
-
-
31,580 (188,720)
-
(60,000 )
540,456
-
971,646
-
-
-
-
590,000
7,867,278
-
8,938,894
-
-
-
316,278
-
174,921
-
234,400
-
-
-
352,964
-
-
-
-
-
174,921
-
903,642
590,000
7,692,357
-
4,475,000
188,720
7,650,970		 Computer
&
office
Fixtures &
Plant &
Exhibition
equipme
nt
fittings
machinery
costs
Total
£
£
£
£
£ £
529,681
3,184,335
8,416,831
2,358,023
27,119,838
95,022
852,051
3,289,505
993,698
8,700,518
-
-
-
157,140
-
40,658
872,128
1,381,055
377,632
4,123,575
(2,785)
(495,451)
(42,803)
(348,984)
(890,023)
662,576
4,413,063
13,044,588
3,537,509
39,053,908
358,094
1,440,013
943,635
755,948
3,813,968
107,951
251,228
770,614
355,377
1,894,491
24,368
575,779
122,914
59,452
1,135,477
(2,785)
(482,408)
(27,317)
(262,030)
(774,540)
487,628
1,784,612
1,809,846
908,747
6,069,396
-
8,035,252
174,948
2,628,451
11,234,74
2
2,628,762
32,984,5
12
171,587
1,744,322
7,473,196
1,602,075
23,305,870
-

Page 41

NMRN Operations

(A company limited by guarantee) Company number: 09988314

Notes to the financial statements for the year ended 31 March 2023

Page 42

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements for the year ended 31 March 2023

Charity

Charity
Cost or valuation
At 1 April 2022
Additions
Transfers
Revaluation
Disposals
At 31 March 2023
Depreciation
At 1 April 2022
Charge for the year
Revaluation
On disposals
At 31 March 2023
Net book values
At 31 March 2023
At 31 March 2022		 Computer
Investment
Short leasehold
Assets under
Improvements
&
office
Fixtures
&
Plant &
Exhibition
properties
land & buildings
constructi
on
to
property equipment
fittings
machinery
costs
Total
£
£
£
£
£
£
£
£ £
-
4,475,000
188,720
7,967,248
529,681
3,067,598
8,167,372
2,010,213
26,405,832
650,000
2,820,242
-
-
95,022
802,888
3,263,991
993,698
8,625,841
-
31,580
(188,720)
-
-
-
-
157,140
-
(60,000)
540,456
-
971,646
40,658
872,128
1,381,055
377,632
4,123,575
-
-
-
-
(2,785)
(443,442)
(26,685 )
(1,174)
(474,086)
590,000
7,867,278
-
8,938,894
662,576
4,299,172
12,785,733
3,537,509
38,681,162
-
-
-
316,278
358,094
1,378,590
877,621
495,092
3,425,675
-
174,921
-
234,400
107,951
228,449
718,843
355,377
1,819,941
-
-
-
352,964
24,368
575,779
122,914
59,452
1,135,477
-
-
-
-
(2,785)
(433,930)
(11,782 )
(1,174)
(449,671)
-
174,921
-
903,642
487,628
1,748,888
1,707,596
908,747
5,931,422
590,000
7,692,357
-
8,035,252
174,948
2,550,284
11,078,1
37
2,628,762
32,749,74
0
-
4,475,000
188,720
7,650,970
171,587
1,689,008
7,289,751
1,515,121
22,980,157

Land and buildings previously owned by the Royal Navy Submarine Museum were revalued at 6 May 2022 by Avison Young in accordance with the stated accounting policy. The revaluation was conducted by a qualified surveyor on a depreciated replacement cost basis and in accordance with the RICS Valuation – Global Standards 2022

Page 43

NMRN Operations

(A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

(the Red Book). The Investment Property was revalued at 31 March 2023 by Lambert Smith Hampton on the basis of market value in accordance with the RICS Red Book Global Standards.

Page 44

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

15. Stocks

Group
2023
£
The amounts attributable to the different categories are as follows:
Goods for resale
472,389
HMS Victory arisings
190,605
662,994
16.
Debtors
Group
2023
£
Amounts falling due within one year:
Trade debtors
225,570
Other debtors
217,900
Prepayments and accrued income
592,610
VAT
223,512
Amount due from associated companies
3,794,031
5,053,623		 Group
2022
£
347,646
190,605
538,251
Group
2022
£
106,811
65,741
731,210
301,777
1,904,655
3,110,194		 Charity
2023
£
42,681
190,605
233,286
Charity
2023
£
141,118
155,535
574,959
280,418
4,419,320
5,571,350		 Charity
2022
£
24,000
190,605
214,605
Charity
2022
£
81,915
55,824
705,266
260,778
1,972,945		 Charity
2022
£
24,000
190,605
214,605
3,076,728

17. Creditors: amounts falling due within one year

Trade creditors
Other taxes and social security
Other creditors
Deferred income
Amounts due to associated companies
Accruals		 Group
2023
£
631,567
124,740
243,913
142,981
23,918
1,153,668
2,320,787		 Group
2022
£
801,361
110,188
157,695
43,469
68,837
1,774,362
2,955,912		 Charity
2023
£
609,449
124,740
199,589
36,298
23,918
1,068,307
2,062,301		 Charity
2022
£
701,485
110,188
93,743
43,469
68,837
1,540,982
2,558,704

Page 45

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

18. Analysis of net assets between funds

Tangible
Fixed
Assets
£
Restricted funds
19,383,892
Unrestricted funds
13,365,848
Designated funds
-
32,749,740
Non charitable trading funds
234,772
Total
32,984,512
Included in the above figures is the revaluation reserve:
Revaluation reserve
6,053,090
Tangible
Fixed
Assets
£
Restricted funds
15,268,613
Unrestricted funds
7,711,544
Designated funds
-
22,980,157
Non charitable trading funds
325,713
Total net assets
23,305,870
Included in the above figures is the revaluation reserve:
Revaluation reserve
3,004,992
Unrestricted funds
At
Incoming
Outgoing
1 April 2022
Resources
Resources
£
£
£
Unrestricted funds
9,705,867
12,683,890 (12,185,440)
Designated funds
340,862
-
-
10,046,729
12,683,890 (12,185,440)
Non charitable trading funds
344,475
2,251,208
(2,302,073)
Consolidation adjustments
-
(525,812)
525,812
10,391,204
14,409,286 (13,961,701)		 Net
Pension
Current
Scheme
Total
Assets
Asset
2023
£
£
£
1,887,903
-
21,271,795
3,390,510
157,000
16,913,358
507,462
-
507,462
5,785,875
157,000
38,692,615
58,838
-
293,610
5,844,713
157,000
38,986,225
-
-
6,053,090
Net
Pension
Current
Scheme
Total
Assets
Liability
2022
£
£
£
(536,997)
-
14,731,616
2,267,323
(273,000)
9,705,867
340,862
-
340,862
2,071,188
(273,000)
24,778,345
18,762
-
344,475
2,089,950
(273,000)
25,122,820
-
-
3,004,992
Gains and
At
Transfers
Losses 31 March 2023
£
£
£
5,156,395 1,552,646
16,913,358
166,600
-
507,462
5,322,995 1,552,646
17,420,820
-
-
293,610
-
-
-
5,322,995 1,552,646
17,714,430		 Total
2023
£
21,271,795
16,913,358
507,462
38,692,615
293,610
38,986,225
6,053,090
Total
2022
£
14,731,616
9,705,867
340,862
24,778,345
344,475
25,122,820
3,004,992

19. Unrestricted funds

Page 46

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

At
Incoming
1 April 2021
Resources
£
£
Unrestricted funds
9,459,099
10,973,238
Designated funds
81,006
-
9,540,105
10,973,238
Non charitable trading funds
330,758
1,639,523
Consolidation adjustments
-
-
9,870,863
12,612,761		 Outgoing
Resources
£
(10,801,566)
-
(10,801,566)
(1,625,806)
-
(12,427,372)		 Gains and
At
Transfers
Losses 31 March 2022
£
£
£
625,523
(550,427 )
9,705,867
259,856
-
340,862
885,379
(550,427 )
10,046,729
-
-
344,475
-
-
-
885,379
(550,427 )
10,391,204

Designated funds represent funds designated for the PHD Masterplan, NMRN Site Improvement, Preservation of the Historic Fleet and the Kochan Collection.

20. Restricted funds

At
1 April 2022
£
RNM Development fund
5,898,588
HMS Alliance fund
44,894
HMS Caroline fund
55,849
HMS Invincible fund
4,351
HMS M33 fund
50,579
HMS Warrior 1860 fund
91,252
HMS Victory Preservation fund
4,621,840
LCT 7074 fund
(734,325)
RMM New Museum
53,689
Hartlepool development fund
(129,544)
Airships Collection fund
19,146
Barracuda project fund
20,490
Coastal Forces Gallery fund
(9,511)
Cobham Hall & Leading Edge
150,000
Dommett Archive fund
6,000
FAAM Carrier fund
-
Kochan Collection fund
53,484
Trincomalee fund
29,778
Other restricted funds (projects)
39,007
Centennial fund
17,077
Fieldhouse fund
4,448,972
14,731,616		 Incoming
Outgoing
Resources Resources
£
£
-
(217,926)
102
-
-
-
61,890
(39,316)
-
-
800,000
(26,610)
7,980,727 (3,032,937)
804,994
(49,278)
7,881
(37,113)
3,524,918
(249,571)
-
-
65
(1,389)
-
-
-
-
-
-
658,867
(25,983)
-
(53,484)
-
-
93,229
(57,331)
-
(515)
-
(198,498)
13,932,673 (3,989,951)		 Gains and
At
Transfers
Losses 31 March 2023
£
£
£
-
544,844
6,225,506
-
-
44,996
-
-
55,849
(20,144)
-
6,781
-
-
50,579
(773,277)
-
91,365
(457,852)
969,997
10,081,775
-
-
21,391
-
-
24,457
(3,470,243)
-
(324,440)
-
-
19,146
-
-
19,166
9,511
-
-
-
-
150,000
-
-
6,000
(632,884)
-
-
-
-
-
-
-
29,778
21,894
693
97,492
-
1,476
18,038
-
403,442
4,653,916
(5,322,995) 1,920,452
21,271,795

Page 47

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

In 2000 the Royal Naval Museum completed phase I of a major capital development programme to redesign and refit existing galleries and bring new display and office space into use. The movements on the Development fund shown represent the income raised by donations and grants from the National Heritage Memorial Fund and other organisations, less the revenue expenditure and depreciation incurred up to the balance sheet date.

The HMS Alliance fund consisting of funding received for the ongoing maintenance of HMS Alliance.

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.

The HMS Invincible 1744 fund relates to a National Heritage Lottery Funded joint project with the Maritime Archaeological Sea Trust (MAST) for activities and an exhibition based on a new dive and excavation of the wreck site.

The HMS M33 fund is for the conservation and presentation/interpretation of the ship, work which has been primarily funded by the Heritage Lottery Fund (HLF), and supported by funding from Hampshire County Council.

The HMS Warrior 1860 Preservation fund is for the conservation of the bulwarks, work which has been primarily funded by the HLF.

The HMS Victory Preservation fund is for the conservation and ongoing maintenance of the ship, work which is funded by grants from the HMS Victory Preservation Company and the HMS Victory Preservation Endowment Fund.

The LCT7074 fund relates to the restoration of the last Landing Craft (Tank) to take part in Operation Neptune and is primarily funded by the National Lottery Heritage Fund with match funding from other donors.

The RMM New Museum fund represents funding received for the relocation of the new Royal Marines Museum to Portsmouth Historic Dockyard.

The Hartlepool Development fund includes grant funding from the Tees Valley Combined Authority for the joint redevelopment of NMRN Hartlepool and the surrounding waterfront area, to support the regeneration of Hartlepool.

The Airships Collection fund was received from the Mrs L D Rope Fourth Charitable Settlement towards supporting work on an airship heritage trust collection at Fleet Air Arm Museum.

The Barracuda Project Fund is made up of donations to restore a Barracuda and provides for expenses such as materials.

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

The Dommett Archive fund was donated by the Dommett family towards the cost of archiving the papers of Roy Dommett CBE.

Other restricted funds were received towards funding specific projects across the group’s museums.

The following restricted funds related to the purchase of tangible fixed assets:

The Centennial Project fund, created to mark the anniversary of Holland I, and to be used for improving buildings on the Royal Navy Submarine Museum site; the Fieldhouse fund consisting of funding received for the improvement and construction of buildings housing exhibits in the Royal Navy Submarine Museum.

Transfers between funds

The transfers from restricted to unrestricted funds reflect costs recharged to projects, and the value of tangible fixed assets which have been purchased using restricted funds, but are held for general purpose, in accordance with SORP 2019 section 2.26.

Page 48

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

Restricted funds (Continued)

At
Incoming
Outgoing
1 April 2021 Resources Resources
£
£
£
RNM Development fund
5,865,979
-
(199,318)
HMS Alliance fund
46,490
(1,500)
(96)
HMS Caroline fund
61,191
-
(5,342)
HMS Invincible fund
72,635
54,576
(76,506)
HMS M33 fund
50,579
-
-
HMS Warrior 1860 fund
91,173
(3,155 )
3,234
HMS Victory Preservation fund
4,557,371
1,559,356 (1,556,911)
LCT 7074 fund
(468,826)
(400 )
(59,037)
RMM New Museum
-
53,689
-
RMM RMC fund
1,000,000
(1,000,000 )
-
Hartlepool development fund
-
(25,856 )
(100,854)
Hartlepool projects fund
28,878
1,151
(939)
Airships Collection fund
19,146
-
-
Barracuda project fund
22,033
301
(1,844)
Coastal Forces Gallery fund
276,878
110,000
(83,545)
Cobham Hall & Leading Edge
-
150,000
-
Dommett Archive fund
6,000
-
-
FAAM Carrier fund
-
56,255
(1,078)
Kochan Collection fund
53,484
-
-
Coronavirus Job Retention Scheme
-
121,628
(121,628)
Other restricted funds (projects)
68,210
23,376
4,512
Centennial fund
10,263
-
-
Fieldhouse fund
3,203,382
-
(74,496)
14,964,866
1,099,421 (2,273,848)		 Gains and
At
Transfers
Losses 31 March 2022
£
£
£
(83,313)
315,240
5,898,588
-
44,894
-
-
55,849
(46,354)
-
4,351
-
-
50,579
-
-
91,252
(122,172)
184,196
4,621,840
(206,062)
-
(734,325)
-
-
53,689
-
-
-
(2,834)
-
(129,544)
688
-
29,778
-
-
19,146
-
-
20,490
(312,844)
-
(9,511)
-
-
150,000
-
-
6,000
(55,177)
-
-
-
-
53,484
-
-
-
(57,311)
220
39,007
-
6,814
17,077
- 1,320,086
4,448,972
(885,379) 1,826,556
14,731,616

The RMM RMC Fund relates to a pledge from the Royal Marines Association – The Royal Marines Charity that had been made in 2019 to support delivery of a new museum in 2022. This pledge was subsequently withdrawn owing to the delays in project delivery and in securing other funding streams.

21. Revaluation reserve

Revaluation reserve
At 1 April 2022
Revaluation of fixed assets
At 31 March 2023
At 1 April 2021
Revaluation of fixed assets
At 31 March 2022		 £
3,004,992
3,048,098
6,053,090
£
1,025,767
1,979,225
3,004,992

22. Commitments and contingent liabilities

Page 49

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

The company had capital commitments contracted but not provided for in the financial statements amounting to £900,495 (2022: £778,342). There were no contingent liabilities at 31 March 2023 (2022: £Nil).

23. Financial commitments

The charity had outstanding commitments for future minimum lease payments under non-cancellable operating leases as follows:

Within one year
Between one and five years
Greater than five years		 2023
£
406,808
1,627,232
21,745,056
23,779,096		 2022
£
406,808
1,625,732
22,146,364
24,178,904

24. Related party transactions

Parent charitable company

NMRN Operations considers the National Museum of the Royal Navy (the “National Museum”), a charitable company (charity number 1126283, company number 06699696), to be its ultimate parent undertaking. NMRN Operations receives grant funding from the National Museum which is separately disclosed in the Statement of Financial Activities.

Subsidiary company

Company Percentage
Company name number shareholding Description
National Museum of the Royal Navy Trading 01261270 N/A Souvenir shops & corporate events

Joint Venture

NMRN Operations is a related party of Portsmouth Historic Dockyard Operations Limited (PHD Operations Limited), a company limited by shares (company number 12799836) and a Joint Venture with the Mary Rose Trust. In the consolidated financial statements, PHD Operations Limited has been treated as a Joint Venture in which the company has a 50% interest.

A summary of the results for the year are as follows:

2023 2022
Company share Total Company share **Total **
£ £ £ **£ **
Trading income 9,842 19,684 - -
Deficit contribution 91,667 183,334 70,664 141,328
Expenditure (101,509) (203,018 ) (70,664) (141,328)
Net income - - - -
Balance Sheet
Current assets 197,548 395,097 44,985 89,970
Current liabilities (197,547) (395,095 ) (44,984) (89,968)
Net assets 1 2 1 2

Page 50

NMRN Operations (A company limited by guarantee) Company number: 09988314

Notes to the financial statements

for the year ended 31 March 2023

PHD Operations Limited is responsible for the collection and distribution of ticketing income for the two members. The company contributes towards the deficit. During the year this totaled £127,435 (2022: £98,506) and is included within site costs shown in note 9.

25. Ultimate parent undertaking

NMRN Operations considers the National Museum to be its ultimate parent undertaking. Control is exercised by the National Museum being the corporate member of NMRN Operations.

The National Museum was established in 2008 as a holding company of the National Museum Group which operates a number of naval service museums. Its vision is to become the world's most respected Naval Museum. The National Museum’s strategy sets out to increase the scale, scope and reach and resilience of the museum. The goal is to promote the public understanding of the Royal Navy past, present and future.

Consolidated accounts can be obtained from the National Museum’s registered office: National Museum of the Royal Navy, HM Naval Base PP66, Portsmouth, Hampshire, PO1 3NH.

26. Analysis of cash and cash equivalents

26.
Analysis of cash and cash equivalents
Cash and cash equivalents
27.
Analysis of changes in net debt
Cash and cash equivalents		 Group
2023
£
2,448,883
Group
2023
£
2,448,883		 Group
2022
£
1,397,417
Group
2022
£
1,397,417		 Charity
2023
£
2,043,540
Charity
2023
£
2,043,540		 Charity
2022
£
1,333,759
Charity
2022
£
1,333,759

28. Financial instruments

The carrying amounts of the charity's financial instruments are as follows:

2023
£
Financial assets
Debt instruments measured at amortised cost:
- Trade debtors (note 16)
141,118
- Amounts owed by group undertakings (note 16)
4,419,320
- Other debtors (note 16)
155,535
- Accrued income (note 16)
327,221
- VAT (note 16)
280,418
5,323,612
Financial liabilities
Measured at amortised cost
- Trade creditors (note 17)
609,449
- Amounts owed to associated companies (note 17)
23,918
- Other creditors (note 17)
199,589
- Other taxes & social security (note 17)
124,740		 2022
£
81,915
1,972,945
55,824
8,862
260,778
2,380,324
701,485
24,901
93,743
110,188

Page 51

NMRN Operations (A company limited by guarantee) Company number: 09988314

957,696 930,317

Notes to the financial statements

for the year ended 31 March 2023

Page 52