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2020-10-31-accounts

Registered number: 01007871 Charity number: 262481

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Trustees' report and financial statements

for the year ended 31 October 2020

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Financial Headlines 31 October 2020

· The Company's consolidated income for the year ended 31st October 2020 was £1,750,167 compared with £2,273,677 in 2019.

· Colonel Stephens Railway Enterprises Ltd, the wholly owned trading subsidiary, which includes all the commercial activities, achieved sales of £173,843 compared with £877,288 in the previous year and a deficit of £75,366 compared with £152,064 in 2019 (page 48).

· The total net cash in the balance sheet at the year-end was £76,082 compared with £270,823 in 2019 (see below).

· Total visitor numbers during the year fell by 64.4% (see below), due to the national lockdown imposed as a result of COVID-19.

6-Year Net Cash and Debt Profile (year end)

2020 2019 2018 201 2016 2015
CAF Bank Loan (339,936) (357,008) (390,890) (424,141) (456,788) (487,718)
Other Loans (79,000) (34,000)
Total Capital (418,936) (391,008) (390,890) (424,141) (456,788) (487,718)
Cash at Bank and In Hand 495,018 661,831 597,968 793,063 490,833 460,006
Total Net Cash/ (Debt) 76,082 270,823 207,078 368922 34,045 (27,712)

The figures for cash include Advance Bookings.

Visitor Numbers

2020 2019 2018 2017 2016 2015
Serice Trains / Admissions 30,362 83,907 77,491 85270 76,670 76,291
Pulman Dining Trains 647 3,085 3,404 3,091 3,617 3,198
31,009 86,992 80,895 88,361 80,287 79,89

Platform Tickets = Nil 2020

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Contents

Page
Reference and administrative detis of the Charit, it Trustees and Advisers
Trustees' repor 2 - 6
Independent auditor's repor on the fnancial statements 7 - 1 0
Consolidated statement of fnancial activities 11
Consolidated balance sheet 12
Company balance sheet 13
Consoldated statement of cash fows 14
Notes to the fnancial statement 1 5 - 4 3
The folowing pages do not frm par of the statutor fnancial statements:
Appendix I - Consolidated detaied Income and Expenditure Account 44
Appendix II - Detailed Income and Expenditure Account 45
Appendix I - Schedule to the detaied Income and Expenditure Account 46
Appendix IV - Colonel Stephens Raiway Enterprises Lmited Account 47-48

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Reference and administrative details of the Charity, its Trustees and Advisers for the year ended 31 October 2020

Constitution

The Kent and East Sussex Railway Company Limited is a company limited by guarantee and a registered charity. Charity Number: 262481. Company Number 01007871.

Directors and Trustees

The Directors of the Charitable Company ('the Charity') are its Trustees for the purposes of charity law and throughout this report are collectively referred to as the Trustees.

The Trustees serving during the year and at the date of this report were as follows:

S A Marsh.1 Chairman G A Crouch 1 Finance Director I C Legg 1 M J Hyner D J Nibloe ( appointed 16 November 2019) P D Shaw 1 N DSime P E Vidler (appointed 16 November 2019) R MWhite B R Atkins (resigned 16 November 2019)

1 also directors of Colonel Stephens Railway Enterprises Limited at the date of this report

Registered office

Tenterden Town Station, Station Road, Tenterden, Kent, TN30 6HE

Company Secretary and Assistant Company Secretary

C H Mavor and R Styles

Senior management team

S Dewey (General Manager), A Freeman (Commercial Manager), H Douglas (Marketing Manager), P Salmon (Operations Manager), P Wilson (Carriage & Wagon Delivery Manager), D Brenchley (Locomotive Delivery Manager)

Independent auditor

Kreston Reeves LLP, Chartered Accountant, Statutory Auditor, Montague Place, Quayside, Chatham Maritime, Chatham, Kent, ME4 4QU

Bankers

CAF Bank Limited, PO Box 289, West Malling, Kent, ME19 4TA National Westminster Bank pie, 58 High Street, Tenterden, Kent, TN30 6AX

Solicitors

Rix & Kay LLP, The Courtyard, River Way, Uckfield, East Sussex, TN22 1SL

Page 1

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Trustees' report

For the year ended 31 October 2020

The Trustees are pleased to present their report together with the financial statements of the Charity for the year ended 31 October 2020. The Trustees have adopted the provisions of the Statement of Recommended Practice (SORP) 'Accounting and Reporting by Charities' (FRS 102) in preparing the annual report and financial statements of the Charitable Company.

Legal and administrative information set out on pages 1 and 2 forms part of this report. The financial statements comply with Charities Act 2011, the Companies Act 2006, the Memorandum and Articles of Association, and Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019).

Our purposes and activities

The purposes of the Charity are to preserve, restore and operate the whole or parts of the railway from Tenterden in Kent to Robertsbridge in Sussex (known as The Kent & East Sussex Railway) as a permanent public exhibition and museum, which includes the preservation, display and operation of steam and other locomotives, rolling stock, equipment, and other relics. The Charity thereby aims to contribute to technical, historical, and general education concerning the operation of a rural light railway.

The Trustees consider that the Charity's objectives are for the public benefit and that its activities, achievements, and performance are consistent with its objectives having had regard to Charity Commission

guidance, including the guidance "Public Benefit: running a charity (PB2)".

To achieve its objects the Charity:­

operates a heritage railway service with authentic locomotives and rolling stock.

The major area of activity of the Charity continues to be the operation of a heritage railway service as a means of demonstrating and exhibiting steam and other railway locomotives, rolling stock etc., which provides funding for the restoration of engines, carriages and wagons and the railway itself.

The Charity offers people the opportunity to experience the delights of the steam age, and to understand this historic means of travel which changed the face of Britain. For others it offers the opportunity to volunteer their time, helping us maintain and renovate the locomotives, carriages, and other infrastructure.

Page2

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Trustees' report For the year ended 31 October 2020

Our purposes and activities (continued)

For many years, the Charity has also run special events, principally "Santa Specials" at Christmas and "Days out with Thomas" at various other times of the year. While providing a valuable source of income to assist with various preservation and other similar projects, such events are important in encouraging and promoting the interest of young people in the railway. In furtherance of this aim the Charity has close links with the education departments of local authorities, as illustrated by our "Evacuation Experience" and now regarded by many schools in Kent and East Sussex as an essential ingredient in their teaching of this aspect of modern history. These activities had to be suspended due to the Covid 19 lockdown.

Members and volunteers

The Trustees greatly value the support given by the members. At 31 October 2020, the membership stood at 2,467, including approximately 600 active volunteers. The Charity and its wholly owned trading subsidiary is grateful for the continued efforts of their volunteers whose contributions are integral to the growth, development, and operation of activities.

Colonel Stephens Museum

The museum offers free admission to all visitors when the railway is operational.

Financial review

The Company achieved a modest surplus of£ 13,449 ( on unrestricted funds before transfers between funds) for the year compared with an unrestricted a surplus of £12,162 the previous year. Total income, before legacies and share of associated company profits, was £1,224,049 (2019: £2,155,849). In 2019, our highly regarded Santa Specials achieved an income of £398, 135. Our net cash in hand at the end of the year was £495,018 (2019: £661,831), and total cash net of debt was £76,082 (2019: £270,823). Our low point for cash is usually April, when we have incurred the cost of the winter overheads, but the season has yet to get under way. The total number of passengers carried in 2020 was 31,009 compared with 86,992 in 2019.

Our total unrestricted costs were £1,593,525 compared with £2,178,695 in 2019.

Outlook for 2021

The Covid-19 lockdown resulted in the total suspension of the Charity's activities in the first 6 months of the current financial year ending October 2021. This included the cancellation of the Santa Specials. We are due to resume service on Saturday 22 May in accordance with Government guidelines. We have been successful in our application for a number of Government grants. The immediate future remains uncertain, although our predicted cash resources should be adequate to meet budgeted obligations. Our catering activities will, in future, be focused more "on train, and station catering will be simplified to minimise costs and food wastage. Our highly acclaimed Pullman dining services will be resumed as soon as possible.

Investment powers and policy

Under the memorandum and articles of association, the Charity has the power to make any investment which the Trustees see fit.

Reserves policy

The Trustees have reviewed the reserves of the Charity. The review considered the nature of the income and expenditure streams and the need to match variable income with fixed commitments and the nature of the reserves.

Page 3

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Trustees' report

For the year ended 31 October 2020

Reserves policy (continued)

The unrestricted reserves of the Group increased in the year by £147,597 to £1,314,613 (see Note 22). The unrestricted reserves are maintained to meet the Charity's ongoing unrestricted charitable expenditure as we as the longer-term financing of the Charity.

Restricted reserves have decreased by £92,580 to £1,605,787 and the purpose of these funds is detailed in Note 21 in the financial statements.

The Group normally meets its day to day working capital requirements through internally generated revenues. The nature of the Group's activities is such that there can be considerable variation in the timing of cash inflows. The Trustees have prepared projected cash flow information for the year ending October 2021 incorporating additional loan and overdraft support from our bankers as well as Government schemes introduced to mitigate the effect of the Covid-19 lockdown.

At 31 October 2020, the Charity had net current assets of £151,007, which include cash at bank and in hand of £495,018. These funds include amounts held to enable the Charity to operate during the winter months when income levels are much reduced; sums received in advance for future bookings; and balances in respect of restricted funds. Further details in respect of the latter are provided in note 21.

Structure, governance, and management

Governing document

The Kent and East Sussex Railway Company Limited is a company limited by guarantee governed by its memorandum and articles of association. It is registered as a charity with the Charity Commission. Anyone can apply to become a member of the Company. At the year-end there were 2,467 members (2019: 2,565) each of whom undertakes to contribute an amount not exceeding £1 in the event of the winding up or dissolution of the Charity.

Recruitment and appointment of Trustees

As set out in the articles of association the Chairman of the Trustees is elected by them. Every Trustee who has served for a term of three years must retire from office. A retiring Trustee is eligible for re-election by the Members. The Trustees have the power at any time to appoint any member to be a Trustee, either to fill a casual vacancy or as an addition to the existing Trustees.

Trustee induction and training

New Trustees are briefed informally on their legal obligations under charity and company law, the content of the memorandum and articles of association, the committee, and decision-making processes, and recent financial performance of the Charity. Trustees are encouraged to attend appropriate external training events where these will facilitate the undertaking of their role.

Organisation

A Board of Trustees of up to ten members, who meet or communicate monthly, administers the Charity. There are subcommittees covering individual areas of activity and individual Trustees have taken responsibility for monitoring the activities in specific operational areas. They report points for action at Trustee meetings. A General Manager is appointed by the Trustees to manage the day to day operations of the Charity.

The non-charitable trading activities are conducted through the wholly owned trading subsidiary, Colonel Stephens Railway Enterprises Limited.

A wholly owned subsidiary, Robertsbridge 20/20 Limited, has been incorporated to investigate the long­ term objective of operating the railway to Robertsbridge. This Company is dormant.

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The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Trustees' report

For the year ended 31 October 2020

Organisation (continued)

The Company has 4 subsidiary companies which are listed in note 15, together with the relevant shareholdings.

Key management personnel

The Board of Trustees is responsible for setting Policies and Instructions including those relating to Safety. The Board monitors the performance of the Management team against these Policies and Instructions and directs the General Manager accordingly. Key Management consists of the General Manager who oversees day to day operations, as well as Departmental Managers, some of whom are remunerated. The remuneration of the General Manager and the Employed Departmental Managers is set by the Board.

Related parties

Details of related parties are provided in Note 26 to the accounts.

Principal risks and uncertainties

The Trustees actively review the strategic business and operational risks to which the Charity is exposed and systems have been established to enable regular reports to be submitted to them. Arising from these regular reporting procedures the Trustees can take all necessary steps to lessen any risk to the Charity. The principal risks and uncertainties facing the Charity are as follows:

Competing tourist attractions - the market in which the Charity operates is

The Charity also regularly issues policy documents dealing with risk management.

Trustees

The Trustees in office during the year and at the date of this report are set out on page 1. No Trustee is remunerated by the Charity or its trading subsidiary.

Post balance sheet events

The Trustees are aware of the potential economic and social effects of the Covid-19 virus outbreak and have taken appropriate measures to mitigate the effect on the Charity's finances.

Page 5

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Trustees' report For the year ended 31 October 2020

Trustees' responsibilities in relation to the financial statements

The Trustees as Directors are responsible for preparing the Report of the Trustees and the financial statements in accordance' with applicable law and regulation.

Company law requires the trustees to prepare financial statements for each financial period. Under that law the Trustees have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the situation of the Charity and of the results of the Charity for that period. In preparing these financial statements, the trustees are required to:­

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the Charity's transactions and disclose with reasonable accuracy at any time the financial position of the Charity and enable them to ensure that the financial statements comply with Companies Act 2006 and the Charities Act 2011. They are also responsible for safeguarding the assets of the Charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In accordance with company law, as the Company's Directors, we confirm that:

All Directors have signed declarations to the effect that they are fit and proper persons to act for the Charity in accordance with the requirements of the Finance Act 2010.

Auditor

The auditor, Kreston Reeves LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

By order of the Trustees: $/

S A Marsh Chairman

Date: 26 June 2021

Page6

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Independent auditor's report to the Members of The Kent and East Sussex Railway Company Limited for the year ended 31 October 2020

Opinion

We have audited the financial statements of The Kent and East Sussex Railway Company Limited (the 'Parent Charitable Company') and its subsidiaries (the 'Group') for the year ended 31 October 2020 which comprise the Consolidated statement of financial activities, the Consolidated balance sheet, the Company balance sheet, the Consolidated statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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's in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

Page 7

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Independent auditor's report to the Members of The Kent and East Sussex Railway Company Limited for the year ended 31 October 2020 (continued)

Other information

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

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

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the Group and Parent Charitable Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees' report including the Strategic report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 and the Charities Act 2011 requires us to report to you if, in our opinion:

Page 8

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Independent auditor's report to the Members of The Kent and East Sussex Railway Company Limited for the year ended 31 October 2020 (continued)

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 financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Trustees are responsible for assessing the Group's 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 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

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

As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Page 9

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Independent auditor's report to the Members of The Kent and East Sussex Railway Company Limited for the year ended 31 October 2020 (continued)

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

Use of our report

This report is made solely to the Charitable Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the 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 its members, as a body, for our audit work, for this report, or for the opinions we have formed.

S Robinson BA FCA FCIE DChA MCMI (Senior statutory auditor)

for and on behalf of Kreston Reeves LLP

Chartered Accountants Statutory Auditor Chatham Maritime

Date: 5 July 2021

Page 10

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Consolidated Statement of financial activities (incorporating income and expenditure account) for the year ended 31 October 2020

Unrestricted Restricted Total Total
funds funds funds funds
2020 2020 2020 2019
Note £ £ £ £
Income from:
Donatons and legacies 6 469,670 143,119 612,789 232,47
Charitable activities 6 64,662 64,662 1,156,211
Goverment grants 6 317,235 317,235
Other trading activites 6 173,909 173,909 877,288
Share of associate net income 1,572 1,572 7,706
Total income 1,607,048 143,119 1,750,167 2,273,677
Expenditure on:
Raising funds 259,486 259,486 462,988
Charitable actvites 7 - 1 0 1,334,113 101,551 1,435,664 1,824,073
Total expenditure 1,593,599 101,551 1,695,150 2,287,061
Net income/(expenditure) 13,449 41,568 55,017 (13,384)
Transfers beteen funds 134,148 (134,148)
Net movement in funds 147,597 (92,580) 55,017 (13,384)
Reconciation of funds:
Total funds brought forard 22 1,289,599 1,698,367 2,987,966 2,878,767
Net movement in funds
atributable to the parent 147,589 (92,580) 55,009 109,199
Total funds 1,437,188 1,605,787 3,042,975 2,987,966
Non-controlng interest brought
forard 20 (122,583) (122,583)
Non-controlng interest
movement in the year 20 8 8 (122,583)
1,314,613 1,605,787 2,920,400 2,865,383

The notes on pages 15 to 43 form part of these financial statements.

Page 1 1

L

The Kent and East Sussex Railway Company Limited (A company limited by guarantee) Registered number: 01007871

Consolidated balance sheet as at 31 October 2020

2020 2019
Note £ £
Fixed assets
Intangible assets 13 4,985 6,646
Tangible assets 14 3,202,057 3,197,609
Heritage assets 14 16,511 16,511
Investments 15 11,361 9,789
3,234,914 3,230,555
Current assets
Stocks 16 20,79 33,159
Debtors 17 257,985 107,043
Cash at bank and in hand 28 495,018 661,951
73,782 802,153
Creditor:amounts falng due
within one year 18 (622,75) (722002)
Net current asset 151,007 80,151
Total assets less current labilities 3,385,921 3310706
Creditor:amounts falng due
afer more than one year 19 (342,946) (322740)
Net asset 3,042,975 2,987,966
Charit funds
Restricted funds 21 1,605,787 1,698,367
Unrestricted funds 22 1,314,613 1,167,016
Total funds 2,920,400 2,865,383
Non-controlng interest 20 122,575 122,583
3,042,975 2,987,966

The Trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.

The financial statements were approved and authorised for issue by the Trustees on xxxx 26 June 2021 and signed on their be If by: S A Marsh G A Crouch Chairman Trustee

The notes on pages 15 to 43 form part of these financial statements.

Page 12

The Kent and East Sussex Railway Company Limited (A company limited by guarantee) Registered number: 01007871

Company balance sheet as at 31 October 2020

2020 2019
Note £ £
Fixed asset
Tangible assets 14 3,004,235 3,001,576
Heritage assets 14 16,511 16,511
Investments 15 147,212 145,640
3,167,958 3,163,727
Curent assets
Debtors 17 315,709 103,375
Cash at bank and in hand 41,808 601,683
757,517 705,058
Creditor:amounts falng due
within one year 18 (531,259) (625,034)
Net current assets 226,258 80,024
Total assets less current labites 3,394,216 3,243751
Creditor:amounts flng due
afer more than one year 19 (342,946) (322,740)
Net assets 3,051,270 2921,011
Charit funds
Restricted funds 21 1,605,787 1,698,367
Unrestricted funds 22 1,45,483 1,222,644
Total funds 3,051,270 2,921,011

The Trustees acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and preparation of financial statements.

The financial statements were approved and authorised for issue by the Trustees on xxxx 26 June 2021 and signed on their behalf by:

----- Start of picture text -----
c
S A Marsh G A Crouch
Chairman Trustee
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The notes on pages 15 to 43 form part of these financial statements.

Page 13

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Consolidated statement of cashflows for the year ended 31 October 2020

2020 2019
£ £
Cash fows from operating actvities
Net cash used in operating actvities (note 27) (53,265) 175,178
Cash fows from investing activities
Purchase of tangible fxed assets (143,249) (87,840)
Purchase of investments, net of cash acquired (15,767)
Share of associates proftI(loss) 1,572 (7,706)
Net cash used in investing activities (141,67) (111,313)
Cash fows from fnancing activities
Cash infows from new borrowing 50,000 34,000
Repayments in borrowing (21,991) (33,882)
Net cash provided by / (used in) fnancing activies 28,009 1 1 8
Changes in cash and cash equivalents in the year (166,933) 63,983
Cash and cash equivalents at the beginning of the year 661,951 597,968
Cash and cash equivalent at the end of the year 495,018 661,951

The notes on pages 15 to 43 form part of these financial statements.

Page 14

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

1 General information

The Kent and East Sussex Railway Company Limited is a company limited by guarantee in the United Kingdom. In the event of the Charitable Company being wound up, the liability in respect of the guarantee is limited to £1 per member of the Charitable Company. The address of the registered office is given in the Charity information on page 1 of these financial statements. The nature of the Charitable Company's operations and principal activities are set out on page 2.

2 Accounting policies

2.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with the Charities SORP (FRS 102) - Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019), the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006.

The Kent and East Sussex Railway Company Limited meets the definition of a public benefit entity under FRS 102. Assets and liabilities are initially recognised at historical cost or transaction value unless otherwise stated in the relevant accounting policy.

The consolidated statement of financial activities (SOFA) and consolidated balance sheet consolidate the financial statements of the Company and its subsidiary undertakings Colonel Stephens Railway Enterprises Limited, Robertsbridge 20/20 Limited, Tenterden Railway Company Limited and the Company's controlling interest in 6619 Limited. The results of the subsidiaries are consolidated on a line by line basis.

2.2 Group financial statements

The financial statements consolidate the results of the Charity and its wholly-owned subsidiary companies, Colonel Stephens Railway Enterprises Limited, Robertsbridge 20/20 Limited and Tenterden Railway Company Limited, as well as the 51 % owned 6619 Limited, on a line by line basis. A separate Statement of Financial Activities, or income and expenditure account, for the Charity itself is not presented because the Charity has taken advantage of exemptions afforded by section 480 of the Companies Act 2006.

2.3 Going concern

After reviewing the Charity's forecasts and projections, the Trustees are taking the necessary steps to ensure as far as is possible in the current economic climate that the Charity has adequate resources to continue to function in "lockdown mode", and then resume operating services when safe to do so. The Charity therefore continues to adopt the going concern basis in preparing its consolidated financial statements.

Page 1 5

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

2 Accounting policies (continued)

2.4 Income

Charitable activities

Income from fares and charter trains is included in income in the period in which the journey is taken.

Donations, Subscriptions, Grants, Legacies and Similar Income

Income from donations, subscriptions (including life), grants, legacies and similar income is included when receivable, except as follows:

-when donors specify that donations and grants, including capital grants, are for particular purposes, which do not amount to pre-conditions regarding entitlement, the income is included in restricted funds when receivable.

Income from commercial trading operations

The trading subsidiary's income is recognised as earned when goods and services are provided, net of value added tax.

2.5 Volunteers and donated services and assets

The value of voluntary services provided by members and others is not incorporated into these financial statements on the basis that no financial cost is borne by a third party.

Where assets are provided to the Charity as a donation that would normally be purchased from a third party, the donated asset is included in the financial statements at an estimated valuation.

2.6 Expenditure

Expenditure is recognised when a liability is incurred on an accruals basis. Costs are classified as follows:-

Page 16

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

2 Accounting policies (continued)

2.7 Intangible assets and amortisation

Intangible assets costing £Nil or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Amortisation is provided on intangible assets at rates calculated to write off the cost of each asset on a straight-line basis over its expected useful life.

Amortisation is provided on the following basis:

Goodwill 5 years straight line

2.8 Tangible fixed assets and depreciation

Tangible fixed assets costing £1,000 or more are capitalised and recognised when future economic benefits are probable and the cost or value of the asset can be measured reliably.

Depreciation is provided on all tangible fixed assets, other than freehold land and assets in the course of reconstruction, at annual rates calculated to write off the cost, less estimated residual value, of each asset over its expected useful life, as follows:-

Permanent way, bridges and buildings 2%/ 10% straight line Car park 10% straight line Railway locomotive and rolling stock 2%/ 10% straight line Plant 10% straight line Furniture and equipment 10% / 25% / 33% straight line

The railway loco stock includes costs associated with work arising from ten year boiler inspections of locomotives on long term loan to the railway from third parties.

At each reporting date, the Charity reviews the carrying amounts of its tangible fixed assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss.

Recoverable amount is the higher of fair value less costs to sell and value in use.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in the Statement of Financial Activities.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in the Statement of Financial Activities.

Page 17

The Kent and East Sussex Railway Company Limited {A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

2 Accounting policies {continued)

2.9 Heritage assets

Since April 2001 the Charity has held many thousands of papers and artefacts comprising the Colonel Stephens Railway Museum collection. The collection in existence at the date of transfer to the Charity is not recognised in the balance sheet as cost information is not readily available and the Trustees believe that the benefits of obtaining valuations for these items would not justify the cost. The vast majority of items in the collection were acquired by individuals on behalf of, and subsequently donated to, Colonel Stephens Railway Museum over a period of 30 years.

The Charity's management policy in respect of its heritage assets is summarised in Note 14. Individual heritage assets acquired after April 2011 and costing up to £1,000 (up to 31 December 2014 £500) or more have been capitalised. The capitalised cost is not subject to depreciation in view of the nature of the collection.

2.10 Investments

Investments in subsidiary and associate undertakings are recognised at cost less any provisions for impairment.

(i) Subsidiary undertakings

Investments in subsidiaries are valued at cost less provision for impairment.

(ii) Associated undertakings

Investments in associates are stated at the amount of the Company's share of net assets. The Statement of financial activities includes the Company's share of the associated companies' profits after taxation using the equity accounting basis.

2.11 Stocks

Stocks are valued at the lower of cost and net realisable value. Cost comprises direct costs of purchase that have been incurred in bringing the stock to its present location and condition.

2.12 Debtors

Trade and other debtors are recognised at the settlement amount after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due.

2.13 Cash at bank and in hand

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

Page 18

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

2 Accounting policies (continued)

2.14 Liabilities and provisions

Liabilities are recognised when there is an obligation at the Balance sheet date as a result of a past event, it is probable that a transfer of economic benefit will be required in settlement, and the amount of the settlement can be estimated reliably. Liabilities are recognised at the amount that the Company anticipates it will pay to settle the debt or the amount it has received as advanced payments for the goods or services it must provide. Provisions are measured at the best estimate of the amounts required to settle the obligation. Where the effect of the time value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount rate that reflects the risks specific to the liability. The unwinding of the discount is recognised in the Consolidated statement of financial activities as a finance cost.

2.15 Leasing and hire purchase

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risk and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance lease are recognised as assets at the lower of each asset's fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the Balance Sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to the Statement of Financial Activities so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The Group has taken advantage of the optional exemption available on transition to FRS 102 which allows lease incentives on leases entered into prior to the date of transition of the standard to continue to be charged over the period to the first market rent review rather than the term of the lease.

Page 19

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

2 Accounting policies (continued)

2.16 Fund accounting

General funds are unrestricted funds which are available for use at the discretion of the Trustees in furtherance of the general objectives of the Group and which have not been designated for other purposes.

Designated funds comprise unrestricted funds that have been set aside by the Trustees for particular purposes. The aim and use of each designated fund is set out in the notes to the financial statements.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the Group for particular purposes. The costs of raising and administering such funds are charged against the specific fund. The aim and use of each restricted fund is set out in the notes to the financial statements.

2.17 Taxation

The Kent and East Sussex Railway Company Limited is a registered charity and accordingly no provision is considered necessary for taxation.

2.18 Employee benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

The pension scheme cost charged in the period represents contributions payable by the Charity or its trading subsidiary into individual stakeholder pension schemes.

Page 20

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements

for the year ended 31 October 2020

3 Critical accounting estimates and areas of judgement

In the application of the Charity's accounting policies, the trustees are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from their sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

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

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

Critical judgements

The critical judgements that the trustees have made in the process of applying the Company's policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below.

Assessing indicators of impairment

In assessing whether there have been any indicators of impairment of assets, the trustees have considered both external and internal sources of information such as market conditions, counter­ party credit ratings and experience of recoverability. There have been no material indicators of impairments identified during the current financial period.

Provisioning for dilapidations

No provision has been made for dilapidations on hired assets. This is on the basis that at the end of the year trustees had not been notified by any of the owners of the hired assets that they wished to terminate their agreements and, where applicable, therefore require the Charity to undertake repairs to put the hired asset back into its state of repair at he time it was first made available to the Charity.

While it is recognised that during the course of the operation of hired assets, wear and tear will occur, no provision is made because:

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Estimating value in use

Where an indication of impairment exists the trustees will carry out an impairment review to determine the recoverable amount, which is the higher of fair value less cost to sell and value in use. The value in use calculation requires the trustees to estimate the future cash flows expected to arise from the asset and a suitable discount rate in order to calculate the present

Page 21

The Kent & East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

3 Critical accounting estimates and areas of judgement (continued)

Determining residual values and useful economic lives of tangible assets (property, plant and equipment)

The Charity depreciates tangible fixed assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation and maintenance programmes.

Judgement is applied by management when determining the residual values for tangible fixed assets. When determining the residual value management aim to assess the amount that the Charity would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life. Where possible this is done with reference to

4 Financial activities of the Charity

YearEnded YearEnded
31.10.2020 31.102019
£
£
Gross income 1,565,923 1,807,624
Total expenditure on charitable activities (1,305,925) (1,662,617)
Cost of raising funds (117,722) (147,90)
Interest payable and simiar charges (net of interest received) (12,017) (14,094)
Net income/(expenditure) 130,259 (16,57)
Total funds brought forard 2,921,011 2,937,588
Total funds carried forard 3,051,270 2,921,011
Represented by:
Restricted income funds 1,605,787 1,698,367
Unrestricted income funds 1,45,483 1,222,644
3,051,270 2,921,011

Page 22

---

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

5 Raising funds - commercial trading operations

The wholly-owned trading subsidiary, Colonel Stephens Railway Enterprises Limited, pays all of its profits to the Charity under a deed of covenant. A summary of its trading results is shown below:

YearEnded YearEnded
31.10.2020 31.102019
£
£
Summar of proft and loss account
Turover 173,843 877,288
Goverment grants 67,789
Cost of sales and administraton expenses
(incuding group recharges) (316,998) (725224)
Net (loss)/proft (75,366) 152064
Payments to charit.- deed of covenant (152,064)
Retained in subsidiar (75366)

Colonel Stephens Railway Enterprises Limited paid the Charity £57,590 in respect of train charter charges during the year (2019- £259,171).

The assets and liabilities of the subsidiary were:

YearEnded YearEnded
31.10.2020 31.10.2019
£
£
Current assets 79,164 131,552
Creditors: amounts faling due within one year (154,523) (131,545)
Aggregate of share capitl and reseres (75,359) 7

Page 23

I

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

6 Income
YearEnded YearEnded
31.10.2020 31.10.2019
£
£
Unrestricted funds
Income from charitable actvites 64,662 1,156,211
Donatons 39,789 47,359
Legacies 381,361 27,302
Gif aid 15,145 32,342
Membership subscriptions 33,375 39,584
Goverment grants 317,235
Other trading actvites 173,909 877,288
1,605,476 2,180,086
Restricted funds
Donations 143,119 85,885
1,748,595 2,265,971

Government grants includes £174,398 of furlough grants in relation to staff that were furloughed as a result of COVID-19. A further £142,837 relates to funding specifically for heritage organisations that have been significantly affected by COVID-19.

Page 24

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

7 Analysis of expenditure on charitable activities

Analysis of expenditure on charitable activities
Year Ended YearEnded YearEnded
31.10.2020 31.10.2020 31.10.2020
Unrestricted Restricted Total
funds funds funds
£ £
£
Locomotve and rolng stock operating expenses 257,127 52,707 309,834
Permanent way and building upkeep 41,385 41,385
Insurance costs 47,134 47,134
Rent and rates 3,129 3,129
Salaries and wages 493,625 493,625
Event expenses 119,212 119,212
Depreciaton 85,414 48,84 134,258
Museum expenses 13,274 13,274
Suppor costs (note 8) 123,133 123,133
Goverance costs (note 9) 20,941 20,941
1,204,374 101,551 1,305,925
Year Ended YearEnded YearEnded
31.102019 31.1.2019 31.10.2019
Unrestricted Restricted Total
funds funds funds
£ £ £
Locomotive and roling stock operating expenses 446,147 62,875 509,022
Permanent way and buiding upeep 33,941 33,941
Insurance costs 51,833 51,833
Rent and rates 10,009 10,009
Salaries and wages 460,974 460,974
Event expenses 270,612 270,612
Depreciation 89,007 48,556 137,563
Museum expenses 9,712 9,712
Suppor costs (note 8) 150,084 150,084
Goverance costs (note 9) 27,078 27,078
1,549,397 111,431 1,660,828

Page 25

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The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year _ended 31 October 2020

8 Allocation of support costs

Alocation of suppor costs
Year Ended Year Ended Year Ended
31.10.2020 31.10.2020 31.10.2020
Operation Costs of Total
of raiway raising funds funds
£ £
£
Administrative salaries etc. 75,293 72,649 147,942
Adverising and publicit 10,789 10,789 21,578
Telephone, postage and statoner 7,661 7,661 15,322
Membership, magazine printng and distributon 5,740 5,740
Ofce and other expenses 12,704 12,705 25,409
Training 12,655 12,655
Depreciaton 4,031 512 4,543
123,133 110,056 233,189
Year Ended Year Ended Year Ended
31.102019 31.10.2019 31.10.2019
Operation Costs of Total
of raiway raising funds funds
£ £ £
Administrative salaries etc. 85,633 82,627 168,260
Adverising and publicit 22942 22942 45,884
Telephone, postage and stationer 8,780 8,780 17,560
Membership, magazine printng and distributon 9,067 9,067
Ofce and other expenses 14,590 14,588 29,178
Training 14,001 14,001
Depreciation 4,138 526 4,664
150,084 138,530 288,614

Page 26

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

9 Goverance costs
Year Ended Year Ended Year Ended
31.10.2020 31.10.2020 31.10.2020
Operation Cost of Total
of railway raising funds funds
£ £
£
Audit fees 4,325 4,325 8,650
Legal and professional fees 1,945 1,945 3,890
Bank and credit card charges 14,671 1,396 16,067
20,941 7,666 28,607
Year Ended Year Ended Year Ended
31.102019 31.10.2019 31.10.2019
Operation Costs of
Total
of railway raising funds funds
£ £
£
Audit fees 4,000 4000 8,000
Legal and professional fees 3,046 3,046 6,092
Bank and credit card charges 20032 1,786 21,818
27,078 8,832 35,910
10 Interest payable and simiar charges
YearEnded YearEnded
31.10.2020 31.10.2019
£
£
Interest on bank loan repayable afer more than fve years 12,017 14,094

Page 27

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

11 Staff costs

Staf cost
Group Group Company Company
2020 2019 2020 2019
£ £ £ £
Wages and salaries 729,227 742,074 579,121 571,648
Social securit costs 56,070 54,403 49,949 46,180
Other pension costs 14,207 13,322 12,497 11,406
799,504 809,799 641,567 629,234

The average number of full-time equivalents employed by the Group and Company during the year, excluding the Trustees, was:

2020 2019
No. No.
Ofce, management and commercial 15 20
Maintenance, restoraton and operation 11 13
26 33

The corresponding average monthly headcount expressed was:

2020 2019
No. No.
51 49

No employee received remuneration equal to or in excess of the statutory maximum for disclosure of £60,000 in either year.

The Trustees received no remuneration or benefits in kind for the year ended 31 October 2020 (2019 - £Nil) and were reimbursed for expenses of £694 (2019 - £25) incurred on behalf of the Charity in the year.

The key management personnel of the Charity comprise the Trustees, the General Manager and other Managers. The total employee remuneration of the key management personnel of the Charity, including employer's national insurance contributions, for the year ended 31 October 2020 was £148,526 (2019 - £159,199).

Page 28

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

12 Retirement benefit schemes

Defined contribution schemes

The Charity pays into individual pension schemes for the benefit of employees. The assets of the schemes are held separately from those of the Charity in independently administered funds. The pension cost and charge represents contributions payable by the Charity to the funds and amounts to £14,207 (2019 -13,322). At 31 October 2020 there were outstanding pension contributions of £2,570 (2019- £2,293).

13 Intangible assets

Group
Goodwi
£
Cost
At 1 November 2019 8,307
At 31 October 2020 8,307
Amorisaton
At 1 November 2019 1,661
Charge fr the year 1,661
At 31 October 2020 3,322
Net book value
At 31 October 2020 4,985
At 31 October 2019 6,646

Page 29

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

14 Tangible fixed assets

Group
Railway
locomotive and
Freehold land, rolng stock
peranent (including)
way, bridges expenditure on Furiture&
&buidings hired items) Plant equipment Total
£ £ £ £ £
Cost or valuation
At 1 November 2019 3,550,884 1,787,957 272,974 179,017 5,790,832
Additions 143,249 143,249
At 31 October 2020 3,550,884 1,931,206 272,974 179,01 5,934,081
Depreciation
At 1 November 2019 1,301,855 930,255 196,79 164,334 2,593,223
Charge for the year 79,227 43,704 11,327 4,53 138,801
At 31 October 2020 1,381,082 973,959 208,106 168,87 2,732,024
Net book value
At 31 October 2020 2,169,802 957,247 64,868 10,140 3,202,057
At 31 October 2019 2,249,029 857,702 76,195 14683 3,197,609

Page 30

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

Company
Railway
locomotve and
Freehold land, rolng stock
permanent (including)
way, bridges expenditure on Furiture&
&buidings hired items) Plant equipment Total
£ £ £ £ £
Cost or valuaton
At 1 November 2019 3,640,333 1,537,957 272,974 179,01 5,630,281
Additions 143,249 143,249
At 31 October 2020 3,60,333 1,681,206 272,974 179,017 5,73,530
Depreciation
A 1 November 2019 1,337,337 930,255 196,79 164,334 2,628,705
Charge for the year 81,016 43,704 11,327 4,543 140,590
At 31 October 2020 1,418,353 973,959 208,106 168,87 2,769,295
Net book value
At 31 October 2020 2,221,980 707,247 64,868 10,140 3,004,235
At 31 October 2019 2,302,996 607,702 76,195 14,683 3,001,576

Page 31

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

14 Tangible fixed assets (continued)

Heritage assets

The Charity has, since April 2011, been entrusted with the papers and artefacts comprising the Colonel Stephens Railway Museum collection. No value is, however, recognised in the balance sheet in respect of the collection in existence at the date of transfer to the Charity, as explained in note 2.9. A member of the Board who is appointed by the Board on an annual basis administers this collection. The museum had 3024 visitors during the year.

Funding for further acquisitions will come from donations. The Museum will continue to dispose of donated goods, which have no relevance to the collection (principally books) to help fund its operations. The Museum committee has delegated powers to use these funds to acquire significant items that will enhance the collection

Cost of the museum collection:

£

At 1 November 2019 and 31 October 2020 16,511

Summary analysis of heritage asset transactions in excess of £1,000 (£500 prior to 1 January 2015):

31.10.2020 31.10.2019 31.10.2018 31.10.2017 31.10.2016 31.10.2015 £ £ £ £ £ £ Purchases at cost 2,300 2,300 1,250

Page 32

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

15 Fixed asset investments

Group Investments
in associates
£
Market value
At 1 November 2019 9,789
Share of associates prof /(loss) 1,572
At 31 October 2020 11,361
Historical cost 10,000

The investment costing £11,361 (2019 - £9,789) represents the fair value of the Company's investment in Kent and East Sussex Railway Adventures Company Limited comprising 40 (2019­ 40) ordinary shares. The Company is currently dormant.

Subsidiaries

i). The wholly-owned trading subsidiary, Colonel Stephens Railway Enterprises Limited, which is incorporated in England, pays all its profits to the Charity by deed of covenant. Colonel Stephens Railway Enterprises Limited operates the Wealden Pullman and other dining trains, the buffet and other catering facilities, the book and gift shop, and all commercial trading operations carried on by the group.

ii). Robertsbridge 20/20 Limited, which is incorporated in England, continues to be dormant. The investment cost is shown as £1.

i ). Tenterden Railway Company Limited, the Company formerly known as The Kent and East Sussex Railway Company Limited, a company limited by guarantee and incorporated in England, also continues to be dormant. The investment cost is shown as £7.

iv). The investment costing £135,843 (2019 - £135,843) represents the Company's investment in 6619 Limited comprising 2,058 (2019- 2,058) ordinary shares, which represents a 51 % (2019­ 51%) interest. This company owns a former GWR locomotive with the same number. G A Crouch is a director of, and has an interest in, the shares of 6619 Limited.

Page 33

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

15 Fixed asset investments (continued)

15 Fixed asset investents (continued)
Investmentsin
Company Shares in group paricipating
underakings interest Total
£ £ £
Market value
At 1 November 2019 135,851 9,789 145,640
Share of associates proft /(loss) 1,572 1,572
At 31 October 2020 135,851 11,361 147,212
Historical cost 135,851 10,000 145,851
16 Stocks
Group Group Company Company
2020 2019 2020 2019
£ £ £ £
Goods for resale 20,79 33,159
17 Debtor
Group Group Company Company
2020 2019 2020 2019
£ £ £ £
Trade debtors 1,611 5,010 59 1,965
Amounts owed by group underakings 63,007
VAT and gif aid 12,269 29,844 12,269 29,844
Other debtors 2,401 2,401 2,401 2401
Prepayments and accrued income 241,704 69,788 237,973 69,165
257,985 107,043 315,709 103,375

Page 34

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

18 Creditors: amounts falling due within one year

Group Group Company Company
2020 2019 2020 2019
£
£		 £
£
Bank loans and overdrafs 46,990 34,268 46,990 34,268
Other loans 29,000 34,000 29,000 34,000
Trade creditors 113,804 144,663 103,548 124202
Amounts owed to group underakings 34,57
Other taxation and social securit 10,73 46,093 13,306
Other creditors 2,570 2,293 2,570 2,293
Accruals and deferred income 419,638 460,685 349,151 382,388
622,75 7 ,002 531,259 625,034
Group Grup Company Company
2020 2019 2020 2019
£
£		 £
£
Deferred income
Deferred income at.1 November 2019 394,40 405708 324,513 324,330
Resources deferred during the year 369,160 394, 0 307,714 324,513
Amounts released from previous periods (394,40) (405,708) (324513) (324,330)
Deferred income at 31 October 2020 369,160 394,440 307,714 324,513

Page 35

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

19 Creditors: amounts falling due after more than one year

Group Group Company Company
2020 2019 2020 2019
£ £
£
£
Bank loans 342,946 322,740 342,946 322,740
Included within the above are amounts falng due as flows:
Group Group Company Company
2020 2019 2020 2019
£ £ £
£
Due in to to fve year
Bank loans 212,203 152,020 212,203 152,020
Over fve years
Bank loans 130,743 170,70 130,743 170,70

The aggregate amount of liabilities payable or repayable wholly or in part more than five years after the reporting date is:

Group Group Company Company
2020 2019 2020 2019
£ £ £
£
Repayable by instalments 130,743 170,70 130,743 170,720

The current portion of the secured loan amounts to £37,483 (2019 - £34,268) and this is included under creditors falling due within one year. The CAF Bank loan is repayable in monthly instalments of £3,901, which commenced in August 2013, and interest is charged at a rate of 3.0% per annum over bank base rate.

All property of the Charity is subject to either a fixed or floating charge in favour of CAF Bank Limited as security for the bank loan.

The Statement of Recommended Practice requires disclosure of the amount of the secured loans as a proportion of the value of the assets charged. However, in the opinion of the Trustees, obtaining an up-to-date version of these assets would not provide benefits commensurate with the costs involved.

20 Non-controlling interests

Non-controlng interests
2020
£
At 1 November2019 122,583
Non-controlnginterests recognised in the year (8)
At 31 October 2020 122,575

Page 36

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

21 Restricted funds - group and company - 2020

The income funds of the group include restricted funds arising from grants, donations etc. received for specific purposes. The movements during the year were as follows:

Balance at Income Expenditure Transfers Balance at
01.11.2019 in/(out) 31.10.2020
£ £ £ £ £
Bodiam extension 791,978 (26,181) 765,797
Rolvenden carriage shed 449,737 (10,438) 439,299
6619 Lmted 13,617 13,617
Aries Pulman Car 7,963 1,118 (655) 78,426
Terrier 150 36,914 16,490 (20,331) 33,073
Oher projects 328,158 125,511 (64,27) (113,817) 275,575
1,698,367 143,119 (101,551) (134,148) 1,605,787

The funds for other projects relate to grants and donations in respect of work for individual projects of restoration and improvement of rolling stock and infrastructure.

Included in other projects is a fund for the Blue RU No. 1987. This fund was overdrawn at year end by £9,081. £29,000 (2019 - £34,000) of loans have been provided by individuals in relation to this fund and can be seen in Note 18 under other loans. These loans do not form part of the income of the fund however expenditure has been offset against the fund and so a deficit can be seen. The Charity is aiming to generate enough funds to repay the loans.

The balance at 31 October 2020 amounting to £308,648 (2019 - £365,072) includes unspent cash balances of £146,998 (2019 - £170,737). The movements in the restricted fund cash balances, which form part of the 'other projects' fund, are analysed as follows:

Cash Cash Cash spent Cash spent Cash
balance at received capital other balance at
01.11.2019 expenditure expenses 31.10.2020
£ £ £ £ £
Aries Pulman Car 24,419 1,118 (655) 24,882
Balcony Saloon 1,690 1,690
BodiamLoco 3 500 500
C~veVan 9,132 9,132
Distric Coach 100 350 350
Funded Expenditure - Signal Frame 1,250 1,250
GWRRailcar Appeal 6,388 6,766 (1,889) 11,265
KitKatVan 2,226 (64) 2,162
Marcia 3,660 37,605 (41,265)
Museum- MierLegacy 35,615 35,615
PulmanDonations 62,588 2,808 (29,154) 36,242
Readyfr Robersbridge 22,564 991 23,555
StafAccommodation 355 - 355
170,737 49,288 (73,027) 146,998

Page 37

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

Restricted funds - group and company - 2019

The income funds of the group include restricted funds arising from grants, donations etc. received for specific purposes. The movements during the year were as follows:

Balance at Income Expenditure Balance at
01.11.2018 31.10.2019
£ £ £ £
Bodiam exension 818,159 (26,181) 791,978
Rolvenden carriage shed 459,075 (9,338) 449,737
6619 Lmted 13,61 13,617
Aries Pulman Car 76,626 2,243 (906) 7,963
Other projects 356,436 83,642 (75,006) 365,072
1,723,913 85,885 (111,431) 1,698,367

The funds for other projects relate to grants and donations in respect of work for individual projects of restoration and improvement of rolling stock and infrastructure. The balance at 31 October 2019, amounting to £365,072 includes unspent cash balances of £170,737.

22 Unrestricted funds - 2020

Group Company
2020 2020
£ £
General funds
At 1 November 2019 1,131,114 1,186,743
Surplus for the year 9,398 84,640
Transfersin 134,148 134,148
At 31 October 2020 1,274,660 1,405,531
Designated funds
At 1 November 2019 35,902 35,901
Surplus for the year 4,051 4,051
At 31 October 2020 39,953 39,952
Total 1,314,613 1,45,483

There are also funds held by non-controlling minority interests, in respect of the investment in 6619 Limited, amounting to £122,575 at the balance sheet date.

Page 38

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

Unrestricted funds - 2019

Group Company
2019 2019
£ £
General funds
At 1 November 2018 1,131,956 1,190,778
Defcit fr the year (842) (4,035)
At 31 October 2019 1,1 3 1 , 1 1 4 1,186,743
Designated funds
At 1 November 2018 22,898 22,897
Surplus for the year 13,004 13,004
At 31 October 2019 35902 35,901
Total 1,167,016 1,222,644

The movements in the unrestricted designated fund cash balances are analysed as follows:

Cash Cash Cash spent Cash
balance at received other balance at
01.11.2019 expenses 31.10.2020
£ £
£		 £
Museum 30,564 4,678 (627) 34,616
C&W exension 5,338 5,338
35,902 4,678 (627) 39,954

The movements in the 2019 unrestricted designated fund cash balances are analysed as follows:

Cash Cash Cash spent Cash
balance at received other balance at
01.11.2018 expenses 31.10.2019
£ £ £ £
Museum 17,560 14,236 (1,232) 30,564
C&W exension 5,338 5,338
22,898 14,236 (232) 35,902

Page 39

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

23 Analysis of net assets between funds

Analysis of net assets between funds - current year:

Unestricted Restricted Total
funds funds funds
2020 2020 2020
£ £ £
Intangible fxed assets 4,985 4,985
Tangible fxed assets 1,758,891 1,43,166 3,202,057
Heritage assets 16,511 16,511
Fixed asset investments 11,361 11,361
Current assets 639,033 134,749 73,782
Creditors due within one year (622,75) (622,75)
Creditors due in more than one year (342,946) (342,946)
1,437,188 1,605,787 3,042,975

Analysis of net assets between funds - prior year:

Unrestricted Restricted Total
funds funds funds
2019 2019 2019
£ £ £
Intangible fxed assets 6,646 6,646
Tangible fxed assets 1,726,851 1,470,758 3,197609
Heritage assets 16,511 16,511
Fixed asset investments 9,789 9,789
Current assets 600,844 201,309 802,153
Creditors due within one year (7 ,002) (7 ,002)
Creditors due in more than one year (322740) (322740)
1,289,599 1,698,367 2,987,966

Page40

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The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

24 Related party transactions

i). The Charity as a mutual body receives annual subscriptions from its members.

ii). G A Crouch and the former Director B R Atkins, have personal interests in certain items of locomotive and rolling stock, which are made available to the Charity and, in consideration, are maintained by the Charity.

iii). G A Crouch, I C Legg, S A Marsh, P D Shaw, N D Sime, C H Mavor, the company secretary, and the former Director B R Atkins are members or shareholders of organisations which own certain items of locomotive, rolling stock and other equipment, which are made available to the Charity, and in consideration, are maintained by the Charity.

iv). The Charity is a member of The Terrier Trust and has a 25% interest in the Terrier locomotive 'Bodiam' owned jointly by the Trust which has been included in fixed assets. D J Nibloe, P E Vidler, R M White and M J Hyner are also members of the Terrier Trust.

v). G A Crouch and M J Hyner are Directors of 6619 Limited, a company that the Charity has a 51% controlling interest of, which owns a locomotive which is made available to the Charity.CH Mavor, the company secretary, is secretary of 6619 Limited.

i ). I C Legg, S A Marsh, P D Shaw, N D Sime, P E Vidler and M J Hyner are all members of the Kent and East Sussex Locomotive Trust. At the Balance sheet date The Kent and East Sussex Railway Company Limited owe a balance of £20,000 (2019: £20,000) to this organisation in respect of a loan received to assist the Charity with the completion of the Kitchen Car.

vii). other than expenses reimbursed to Trustees, as per note 1 1 , which were deemed to be undertaken within the ordinary course of business, there were no additional related party transactions.

25 Contingent liabilities

i). Articles 8 to 1 O of the British Railways Board (Kent and East Sussex) Light Railway (Transfer and Amendment) Order 1973 have imposed upon the Charity certain obligations for the protection of County Councils and landowners through whose jurisdiction and land the Railway passes.

26 Operating lease commitments

As at 31 October 2020 the Group and the Charity had commitments to make future minimum lease payments under non-cancellable operating leases as follows:

2020 2019
£ £
Not later than 1 year 9,869 8,006
Later than 1 year and not later than 5 years 18,650 16,040
28,519 24,046

Page 41

The Kent and East Sussex Railway Company Limited (A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

27 Reconciliation of net movement in funds to net cash flow from operating activities

Group Group
2020 2019
£ £
Net income/(expenditure) fr the year (as per Statement of fnancial actvitie 55,01 (13,384)
Adjustments fr:
Depreciaton charges 138,801 142,355
Amorisaton charges 1,661
Share of associate (proft) / loss (1,572)
Decrease in stocks 12,380 4,019
DecreaseI(increase) in debtors (150,942) 52,165
Increase/ (decrease) in creditors (106,949) (11,638)
Net cash provided by operating activies (53,265) 175,178
28 Analysis of cash and cash equivalents
Group Group
2020 2019
£ £
Cashin hand 495,018 661,951

Page42

The Kent and East Sussex Railway Company Limited

(A company limited by guarantee)

Notes to the financial statements for the year ended 31 October 2020

29. Principal subsidiaries and associates

The principal subsidiaries of the Company were:

Names Company Registered ofce or Principal actvit Class of Holding Included in
number principal place of shares consoldation
business
Colonel Stephens 02668156 Tenterden Town The provision of Ordinar 100%
Yes
Raiway Enterprises Staton, Tenterden, catering serices
Lmited Kent, TN30 6HE and a smal gif
shop, on behalf of
its parent
company.
Robersbridge 20/20 03838535 Tenterden Tow Dormant Ordinar 100%
Yes
Lmited Staton, Staton Road,
Tenterden, Kent, TN30
6HE
T enterden Railway 04319270 Tenterden Town Dormant Ordinar 100%
Yes
Company Lmited Station, Station Road,
Tenterden,Kent, TN30
6HE
6619 Lmited 08012491 Tenterden Town The restoraton of Ordinar 51%
Yes
Station, Station Road, the 6619
Tenterden, Kent, TN30 Locomotive
6HE

The financial results of the subsidiaries for the year were:

Names Income Expenditure Proft(Loss)/ Net asset
£ £ Surplus/ £
(Defcit) for
the year
£
Colonel Stephens Raiway 241,632 (316,998) (75,366) (75,366)
Enterprises Lmited
Robersbridge 20/20 Lmited 1
Tenterden Raiway Company
Lmited
6619 Lmited 66 (78) (12) 250,107

The following was an associate of the Company:

Name Fair value of Registered Class of Holding
investment ofce or shares
at 31 prncipal place
October of business
2020
£
Kent and East Sussex Raiway Adventures 56,806 Rolvenden Layne, Ordinar 20%
Company Lmited TN17 4NL

Page 43

The Kent & East Sussex Railway Company Limited {A company limited by guarantee)

Consolidated detailed Income and Expenditure Account for the year ended 31 October 2020

Parent
Company		 Designated
Funds		 Colonel
Intra-Group
Stephens Transactions		 Colonel
Intra-Group
Stephens Transactions		 Total 2020 Total 2019
Income before legacies:
Fares and donatons to
travel 222,76 (57,590) 165,136 588,852
Santa Special receipts 398,135 398,135 381,933
Day out with Thomas 148,05
Lego event (58) 58 610
Membership subscrptons 33,375 33,375 39,58
Donations 35,111 4,678 39,789 47,359
Gif aid 15,145 15,145 32,342
Wealden Pulman 79,783 79,783 274,242
Gif shop takings 26,880 26,880 95,838
Bufet and catering 62,67 62,672 464,976
Railway Experience Days 2,979 2,979 32482
Footplate Tasters 1,529 1,529 9,750
Hire of locomotve 17,875
Sundr income 81,449 81,49 18,536
Goverment suppor 249,446 67,789 317,235
1,035,329 4,678 241,632­
57,590		 1,224,049 2,152,784
Covenant from subsidiar 3,065
1,035,329 4,678 241,632 (57590) 1,224,049 2,155,849
Direct operating
expenses 1,142,780 627 241,420 - 1,384,827 1,935,566
Train charer costs 57,590 (57,590)
Administration expenses 90,397 17,988 108,385 133,575
Finance charges (net of
interest received) 12,017 12,017 14,094
Depreciation 90,085 128 89,957 95,60
1,335,279 627 316,998­
57,718		 1,595,186 2,178,695
Defcit before legacy
income (299950) 4,051 75,366 128 {371,137) (22,846)
Add:legacy income 381,361 381,361 27,302
Share of associates proft/
(loss) 1,57 1,57 7,706
Total surplus for the year 82,983 4,051 (5,366) 128 11,796 12162

Page 44

The Kent & East Sussex Railway Company Limited (A company limited by guarantee)

Detailed Income and Expenditure Account for the year ended 31 October 2020

Schedules Total 2020 Total 2019
Income before legacies:
Fares and donations to travel 222,726 848,023
Santa Special receipts 398,135 381,933
Day out with Thomas 148,05
Lego event (58) 610
Membership subscriptions (including lfe) 33,375 39,584
Donations 35,111 33,123
Gif aid 15,145 32,342
Museum income (donations) 179 4,179
Fiming income 9,900 7,500
Sundr income 7,370 6,857
Goverment suppor 249,46
Hire of locomotives 17,875
Enterprises Lmited - covenanted prfts 152,064
1,035,329 1,672,495
Direct operating expenses 1 1,142,780 1,96,140
Administration expenses 2 90,397 105,716
Finance charges 3 12,017 14,094
Depreciation and amorisation 4 90,085 97,249
1,335,279 1,713,199
Defcit befre legacy income (299,950) (40,704)
Add:legacy income 381,361 27,302
Total surplus/(defcit) for the year 81,411 (3402)

Page 45

The Kent & East Sussex Railway Company Limited (A company limited by guarantee)

Schedules to the detailed Income and Expenditure Account for the year ended 31 October 2020

Total 2020 Tota 2019
1. Direct operating expenses
Cost, fuel, oi and water 42,101 122,158
Hire of locomotves 13,788 38,587
Operating deparment expenses 13,735 26,193
Signals and telegraph expenses 5,880 8,970
Permanent way and civil engineering expenditure 34,305 22,705
Forestr and conseraton 3,767 3,634
Loco deparment costs 52,946 92,242
Carriage and wagon deparments costs 36,604 53,690
Rent 3,129 10,009
Repair and maintenance of buildings 31,906 16913
JCB Lease Hire 5,156 11,059
Electricit and power 40,623 62071
Cleaning 17,082 20,634
Insurance 47,13 51,833
Wages, national insurance and pension 641,567 629,234
Adverising and publicit 20,571 45,387
Event expenses:
Santa and Day Out with Thomas 109,394 190,976
Other 9,818 80,133
119,212 271,109
Museum overheads 13,274 9,712
1,142,780 1,96,140
2. Administration expenses
Audit 8,650 8,000
Telephone, postage and stationer 15,322 17,559
Membership, magazine printing and distribution expenses 5740 9,067
Legal and professional fees 3,890 6,092
Training and personnel costs 12,655 14,002
Ofce and other expenses 8,536 7,822
Computer expenses 19,537 21,357
Bank charges 2,792 3,571
Credit card charges 13,275 18,246
90,397 105716
3. Finance charges
Bank loan interest 12,017 14,094
4. Depreciaton and amorisation
Charge for the period (grss of eliminating adjustment) 140,590 145,805
Goodwi amorisation (1,661)
Less: amorisation of capital grants and donations received in (48,84) (48,556)
90,085 97,249

Page 46

The Kent & East Sussex Railway Company Limited (A company limited by guarantee)

Colonel Stephens Railway Enterprises Limited Balance sheet As at 31 October 2020

Colonel Stephens Raiway Enterprises Lmited
Balance sheet
As at31October2020
Year ended Year ended
31/10/2020 31/10/2019
Current assets
Stock 20,79 33,159
Trade debtors 1,552 3,045
Oher debtors 3,731 624
Amounts owed by parent underakings 34,57
Cash at bank and in hand 53,102 60,147
79,16 131,552
Creditors: amount falng due within one year
Trade creditors 10,256 20461
Amounts owed to group underakings 63,007
Other taxation and social securit 10,73 32,787
Accruals and deferred income 70,487 78,297
(154,523) (131,545)
Net (labities)/assets (75,359) 7
Capital and reseres
Caled up share capital 7 7
Proft and loss account (75,366)
Shareholders funds (75,359) 7

Page47

The Kent & East Sussex Railway Company Limited (A company limited by guarantee)

Colonel Stephens Railway Enterprises Limited Trading and profit and loss account For the year ended 31 October 2020


Trading and proft and loss account
For the year ended 31 October 2020
Year ended Year ended
31/10/2020 31/10/2019
Sales 1 173,843 877288
Less:cost of sales 2 298,975 697929
Gross trading (loss)/prft (125132) 179359
Less: Overhead expenses
Audit 8,650 8000
Repairs and maintenance 1,962 9275
Lght and heat 694 2,188
Printng,postage and stationer 37 250
Credit card charges 6,287 5,579
Bank charges 393 2003
18,023 27295
Plus: Goverment grants 67,789
Net (loss)/prft before charitable donation (75,366) 152064
Less: charitable donation (152064)
Netloss (75,366)
Schedules to te trading and profit and loss account
For the year ended 31 October 2020
Year ended Year ended
31/10/2020 31/10/2019
1. Sales
Wealden Pulman and Sunday lunches 79,783 274232
Gif shop takings 26,880 95838
Bufet and catering 62,672 464,976
Railway Experience Days 2,979 32482
Footplate Tasters 1,529 9,750
173,843 877278
2. Costs of sales
Wealden Pulman purchases and expenses 23,460 68,162
Gif shop purchases and expenses 13,607 44,382
Bufet purchases and expenses 46,381 141,084
Train charer costs and fres 57,590 259171
Raiway Experience Days expenses 4,565
Wagesand natonal insurance 156,227 178,649
Stafpension scheme costs 1,710 1,916
298,975 697,929

Page 48