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2021-02-28-accounts

TALL SHIPS YOUTH TRUST

CONTENTS

FOR THE YEAR ENDED 29 FEBRUARY 2021

REGISTERED IN ENGLAND AND WALES NUMBER: 00567460 CHARITY NUMBER: 314229

REPORT AND ACCOUNTS

FOR THE YEAR ENDED

28 FEBRUARY 2021

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TALL SHIPS YOUTH TRUST

CONTENTS

FOR THE YEAR ENDED 28 FEBRUARY 2021

Pages
Reference and Administrative Details 2
Report of the Trustees and Strategic Report 3 - 12
Independent Auditors’ Report 13- 17
Consolidated Statement of Financial Activities 18
Balance Sheets 19
Statement of Cash flows 20
Principal Accounting Policies 21-25
Notes of the Financial Statements 26 – 35

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TALL SHIPS YOUTH TRUST

REFERENCE AND ADMINISTRATIVE DETAILS FOR THE YEAR ENDED 28 FEBRUARY 2021

Tall Ships Youth Trust is a company limited by guarantee and a registered charity.

Charity Number 314229
Company Number 00567460
Principal Office 2A The Hard, Portsmouth, PO1 3PT
Vice-Patrons Admiral of the Fleet the Lord Boyce KG GCB OBE DL
Mr I A Carruthers
Mr P Coleman
Mr D de Laszlo DL
Lord Grade CBE
Lord Greenway
Mr M Le May
Mr J Lennox
Mr O Michaelson
Mr D Tydeman
Mr T Vokos
Mrs C Williams
Trustees Mr D Aisher, Chairman
Mr N Andrews
Mrs E Bradshaw (appointed 18 December 2020)
Mr P D’Ornano
Mr S Edwards
Mr N Jones (Resigned 10 May 2021)
Mr P McDanell
Rear Admiral R Melly
Miss K Nazarin
Mr M Wippell (Resigned 31 May 2021)
Chief Executive Mr A Floyd (Appointed 18 October 2021)
Rear Admiral R Leaman-Grey CB OBE (Resigned 14 August 2021)
Company Secretary Mr P Taylor
Auditors Moore (South) LLP
9 St John’s Place
Newport
Isle of Wight
PO30 1LH
Bankers Clydesdale Bank Plc
Gatwick Business and Private Banking Centre
5 Peveril Court
6-8 London Road
Crawley
West Sussex
RH10 8JE

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Chairman’s Introduction

There is no doubt that 2020/21 was one of the more challenging years in the Trust’s recent history. As was the case for many charities, the Covid pandemic severely affected our operations and our ability to deliver our charitable mission.

Young people from disadvantaged backgrounds have been disproportionately impacted by the pandemic. Education has been disrupted and employment and life prospects have been severely affected.

Unfortunately, despite the massively increased need for our life-changing youth development work, the Government’s lockdown measures meant we were unable to run residential voyages from the end of March 2020 and this continued throughout the 2020-21 financial year. We therefore had to prioritise reducing our overheads whilst working to sustain our fundraising income. Our vessels were laid up for most of the year, and the continued uncertainty with regard to restart dates made it difficult for staff, crew, as well as the young people we seek to help.

However, I am pleased to report that, despite this disruption, we remain well placed to resume our mission. As a result of prudent cost saving measures, coupled with innovation and dedication from our fundraisers, we have managed to report another financial surplus for the year. At the time of writing, we are now fully operational in terms of residential sailing and have all our staff and crews back in place.

Since the financial year-end, we have said goodbye to our CEO, Rear Admiral Richard Leaman-Grey, who served the Tall Ships Youth Trust between May 2017 and August 2021. Taking over at a time of significant financial challenge, the Trust generated operating surpluses for three years in a row under his leadership, whilst still maintaining the number of disadvantaged young people that we support each year until Covid hit. Richard carried out his duties with commitment and passion and played a key role in helping the charity to continue to support young people to reach their potential in life.

We are pleased to welcome Alastair Floyd as Richard’s replacement as CEO. Alastair has had 15 years in the culture and charity sectors after having spent 20 years in the Royal Marines, RAF and leading roles in UK defence.

We have much to feel positive about in the foreseeable future. Our financial position is stable, our donors are passionate about our mission, and we are well set to scale up our supporter base and demonstrate our unique achievements to a national audience. We are also committed to increasing our fleet capacity, to respond to the increased demand. We will do this by seeking to take on an additional vessel of a similar size to those that we already have, as this model has proved to be the most efficient. However, this will require us to grow our fundraising capacity, notably through the new “LifeChanger Appeal” which launched in October 2021. Alastair Floyd is well placed to help us in this regard.

Finally, I would like to thank all our staff, sailing crew, volunteers, donors, partners, trustees and vice patrons for their incredible support and dedication throughout this year. The fact that we are again able to deliver a vital service to our beneficiaries - despite all the challenges caused by the pandemic - is because of each and every one of you.

David Aisher Chair of Trustees, Tall Ships Youth Trust

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HISTORY

Tall Ships Youth Trust, formerly known as The Sail Training Association, is the UK’s oldest and largest sail training charity dedicated to the personal development of young people aged 12 to 25 years.

Formed in 1956, more than 120,000 trainees have sailed over 2 million nautical miles on our vessels. The Trust has built a peerless reputation for delivering outstanding results with young people, most of whom have had an extremely challenging start to their lives.

VISION, MISSION, VALUES AND PURPOSE

Our Vision is a society where all young people have the opportunity to develop their full life potential.

Our Charitable Mission is to enable disadvantaged young people to fulfil their life potential through experiences at sea, and by breaking down the barriers they face in society.

Although our charitable mission is based on giving life-changing experiences to disadvantaged young people, we accept young people of all abilities and backgrounds, based around the values of inclusion , adventure , and excellence .

Our Purpose is to increase young people’s life chances and well-being by supporting them to develop their independent living skills, build self-esteem and aspirations, embrace a healthier more active lifestyle, and get involved in volunteering. We do this using ocean-going ‘residential youth centres’. The Trust’s current fleet comprises four 72ft ocean going yachts, and a 46ft ketch. The development of young people – particularly those who are disadvantaged – is central to everything we do, and we are proud of our reputation amongst education and youth work professionals for delivering effective, high quality services to young people.

In reviewing the Trust’s aims, objectives and planned activities, the Trustees have complied with the duty in section 4 of the Charities Act 2011 to have due regard to the public benefit guidance published by the Charity Commission.

OUR BENEFICIARIES

It’s widely accepted that young people from disadvantaged backgrounds do not always have the same opportunities in life as their more affluent peers and can often feel that they are being defined only by their circumstances. In addition, the impact of Covid and subsequent government restrictions relating to the pandemic have been particularly severe on them.

Many of our beneficiaries had to spend lockdown in unsafe or unhappy environments, often in cramped conditions and with no access to outside space. They have been socially isolated and the disruption to their education is unprecedented. Consequently, the mental health of many of these young people has deteriorated significantly.

A Tall Ships voyage equips young people with life skills and confidence which can be transferred to their everyday lives to help them overcome their problems and thrive. Our highly professional and empathetic crew give them support and encouragement and this helps them to be able to demonstrate their true potential, which gives them a real sense of worth and will help them to move on from the pandemic in a positive way.

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IMPACT

We work with very diverse groups of people, from all over the country. They are often referred to us by third-party youth organisations including special needs schools, pupil referral units, youth offending teams, youth projects and children’s services. Working in this way ensures a continuum of care for the young people, beyond their Tall Ships experience.

Disadvantaged and disabled young people now represent 75% of the young people we work with. Some of the challenges these young people face include learning, physical or mental difficulties; behavioural, emotional or social difficulties. In addition, some are young carers; from ethnically diverse backgrounds; not in employment, education or training, or on the cusp of or already involved in the criminal justice system.

We are meticulous about measuring the impact of our voyages. Post-voyage evaluations carried out in 2019 from our young people indicate:

Youth workers, employers, parents, teachers tell us[1] the impact on voyagers from their perspective is:

Although we were unable to run residential voyages during much of 2020-21, we know from previous surveys undertaken in 2019 that our work is impactful. A survey of 665 young people showed that a remarkable 97% of our young voyagers have gone into or are still in Education, Employment or Training.

Jo Bradley-Fortune, Director of Corporate Development and Fundraising, Notts YMCA: “In 2019 we took 8 groups of young people totalling over 70 in number that worked together to circum-navigate the British Isles. The young people were from a range of backgrounds and ages from across Newark – the 23rd most deprived local authority in the country. The young people said it was ‘life changing, amazing, scary, challenging, wonderful’. To witness these young people, who see every day as a challenge, becoming emboldened, brave and resilient young people in just a matter of days was incredible.

Graham Blair, Head of Campus, Mayesbrook Park School, an alternative provision school. “Our first trip with Tall Ships Youth Trust was two years ago and it proved what a difference your voyages make. Following the four-night voyage, five out of seven of the students who attended went back into mainstream school. The experience instils trust and responsibility in the young people. It’s often their first time away from home and the first time they’ve been given trust and responsibility, which raises their expectations, and they work as a team with routine and structure. It gives them a sense of purpose”.

Jane O’Sullivan, Enrichment Manager – Engagement, George Green’s School : “Our school is a large secondary school in East London with really high indicators of disadvantage. During this awful Coronavirus crisis, students and their families are struggling with traumatic levels of illness, domestic violence, mental health problems, overcrowding and poverty. The voyages build a sense of adventure, resilience and possibility for our students, which they would never usually be able to access in their day to day lives. I have been lucky enough to accompany two group voyages with the Trust, and on both occasions the experience has been truly thrilling and memorable for all the young people. I’ve been a youth worker for over twenty years and it’s probably the best expedition/adventure trip I’ve ever taken kids on, (and believe me, I’ve been on a few…!).

1 Source: Professionals’ feedback questionnaires 2019/2020

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A week learning to sail and bonding as a real-life crew was just the most fantastic adventure for all involved. Vital and excellent programmes such as those provided by Tall Ships, are needed more than ever to help young people re-establish themselves and build their self-confidence after such a difficult and bewildering time.”

ACHIEVEMENTS AND PERFORMANCE

Youth Development

Throughout the period covered by this report, the impact of Covid significantly impacted our ability to deliver our transformational residential youth work with young people. Government restrictions on outdoor education remained in place and curtailed our residential voyage programme from the end of March 2020 for the remainder of the financial year. We were however, when not in lockdown, permitted to offer occasional day sails and were able to take 114 people to sea, of whom 71 were from a disadvantaged background.

Fleet Activity and Maintenance

Our fleet comprises four 72 ft Challengers and a 46 ft Ketch.

Because of Covid Government regulations, our vessels have remained in port at Gunwharf Quays for most of the year, with the exception of the occasional day sail, when permitted.

We made best use of this operational pause by carrying out essential fleet maintenance including new rigging which was installed on all five vessels as well as essential hull repairs. Safety remains paramount to our operation, and we will continue to maintain our vessels to the highest standards. Trustees monitor our safety policy and receive a detailed operational safety report at each Board meeting.

The work on the vessels has only been possible thanks to funds received from our donors and supported by a devoted and enthusiastic team of volunteers who have given hundreds of free hours to help the operations team completing the essential work.

Safeguarding

During this reporting period there were no safeguarding issues. Our Safeguarding policies and procedures were externally audited by a safeguarding professional practitioner in August 2020. Also we were able to continue to offer our online child protection and safeguarding training modules to all head office, volunteer and freelance sailing team staff.

Awareness raising and communications

Despite the communications team being furloughed for most of the financial year, we managed to engage with multiple media outlets and continued showcasing our work to national audiences.

We joined forces with a number of other national outdoor education providers to raise awareness of the sector’s Covid challenges and impact on beneficiaries. Our campaigning work with Government to give us the green light to start residential sailing again was picked up by the BBC, The Times, The Telegraph, industry publications and many local outlets.

We continue to make strides with our digital communications. Content has been relaunched with a focus on short-burst, user-generated content and testimonials of our beneficiaries. Our social media follower numbers continue to grow and engagement rates remain above the industry average according to the Social Media Benchmark Report 2020.

Our customers, sailing team, donors and volunteers were engaged with regularly, including updates on how the charity was navigating our way through the Covid crisis.

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Fundraising

The Covid pandemic significantly impacted our fundraising plans. Sailing restrictions severely reduced our voyage income and social restrictions meant we had to cancel several fundraising events. However, we managed to keep raising vital funds from multiple other sources.

The Trust raised a total of £219k in the year from voyages and bursaries and a significant £1,125k in other fundraising. Included in this total, ‘sustainable’ fundraising raised £504k from 137 grant making trusts and foundations and £268k from over 1,000 individuals, including £155k from our hugely successful Calmer Waters Covid cash appeal. Legacies totalled £26k. We were strongly supported by the Association of Sail Training Organisations (ASTO) who contributed £147k towards our cause, and we also received a further £112k from various individuals and £68k from supporters towards various key projects such as our replacement CRM system.

We are immensely grateful to all the generous individuals, supportive institutions and members who have helped us through the Covid pandemic.

Due to the impact of Covid, and the urgent need to meet the increased demand for our services, our ‘New Flagship Appeal’, which commenced in 2018, is in the process of being relaunched. The aim of the appeal was to increase our sea-going capacity by raising at least £5m in order to purchase and refit a new schooner type flagship vessel, while also reducing our liabilities and establishing a bursary fund. However, the appeal was launched in a pre-Covid world, and none of us could have predicted what 2020 would bring. The impact of the pandemic on our beneficiaries and supporters has been significant, meaning that fundraising for large capital projects in the current climate is extremely challenging. Therefore, after much consideration, our Trustees took the decision to modify the appeal in order to increase our sea-going capacity as quickly as possible. It will be officially relaunched in October 2021, under the new name of the ‘LifeChanger Appeal’. The aim of the appeal will be to raise at least £1.5m in order to purchase and refit a 70-80ft vessel, and cover three years’ running costs, including bursaries for 750 disadvantaged young people and administration costs.

The Tall Ships Youth Trust is a signed-up member of the Fundraising Regulator, and Trustees are satisfied that the charity’s fundraising methods are compliant with both the current regulations and best practice. The Trust is committed to ensuring ethical fundraising practices, and Trustees regularly confirm this is the case. We received zero complaints this year about our fundraising.

Partnerships

We continue to work in partnership with the 1851 Trust on our ‘STEM and the Sea Project’. The project, which has been generously funded by the Lloyds Register Foundation, aims to inspire the next generation of marine engineers by enabling 30 young people a year to participate in a ‘STEM’ (science, technology, engineering and maths), voyage.

Looking forward, we will continue to build links with like-minded charities and commercial companies to support fundraising objectives.

Infrastructure

We were grateful to receive grants from the Gosling Foundation and ASTO to upgrade our CRM database after the existing provider informed us that our current CRM would not be supported from February 2021. The migration was completed on target and the upgrade has improved our data management processes. Voyage bookings, customer records and donor details are saved directly into our database in a GDPR compliant way without the need for manual intervention and the processing of paper-based forms. It also means that, for the first time, we are able to sign up members and regular donors online, via direct debit.

Volunteers

The Trust has many dedicated and loyal volunteers who generously gave over their free time to support our mission and we remain extremely grateful for their efforts – especially during the peak of the pandemic.

We will focus on building up our shore-based volunteers around the country once Covid restrictions have eased, likely later in 2022.

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Tall Ships Academy

The Trust’s training programme gives young people a path from their first experience to volunteering on the Trust’s vessels and, for those who wish it, a nautical career. On average, around 14% of young people are normally recommended to come back as Volunteer Crew every year. The objectives of the Academy and its training programme are:-

“to offer young people more options for enhancing their management skills and earn formal qualifications; to add value and enjoyment to their sailing experience as Volunteer Crew by increasing their knowledge, skills and confidence; and to support the Trust’s aim of maintaining best practice.“

The programme formalises the existing on-board training for our Volunteer Crew – working with young people, vessel familiarisation, safety and safeguarding training – and adds to it the syllabus of the RYA Watch Leader Certificate.

Duke of Edinburgh’s Award

Our Youth & Volunteer Manager is qualified to assess young people for their Duke of Edinburgh’s Award Expedition. Due to Covid, no Duke of Edinburgh expeditions were carried out this year. Under normal circumstances, the groups pay for this assessment service, and it is a valuable addition to our offering. Some planned expeditions have been rescheduled for 2021/22.

RISK REVIEW

The major operational, reputation and financial risks to which the Trust is exposed, as identified by the Board, have been reviewed and systems established to mitigate those risks. They fall into six categories, as described below:

Personnel

Insufficient number of competent and trained staff. Insufficient number of seagoing volunteers. Volunteer branches not performing. Loss of key members of staff threatens effective operations management.

Funding

Cashflow insufficient to operate the charity. Charity’s net assets insufficient to cover restricted funds (note 21). Asset-to-loan ratio inadequate. Voyage income and routine fundraising and special initiatives fails to meet targets. Pension fund repayments exceed our capacity to pay.

Operational

Death or serious accident to crew, staff or the public whilst operating the vessels. Defects prevent vessel sailing. Incident at sea damages a vessel. Illness or medical incident prevents vessel sailing. Certification failure of a vessel threatens programme. Head Office closure due to an incident.

Reputational

Safeguarding incident with beneficiary, voyager, or crew member. Incident at sea leading to bad publicity. Failure of IT system security. GDPR Breach.

Developmental

New Capital Appeal fails to meet target. New ship project to increase capacity fails to deliver.

Covid (new in 2020-21)

A review covering the various aspects of risks affected by the Covid virus has been conducted. These risks include staff or visitors passing the virus on to others, and the considerable human and financial impact.

For all these risks, and their elemental constituents, mitigation has been put in place. Fundraising including the new LifeChanger Appeal, the pension fund deficit (which could increase over time if other fund members become insolvent), volunteers, and the winter voyages as a result of Covid are considered to be uncertain and therefore higher risk. The residual risk at 28 February 2021 for the other risks is assessed to be “low” or “moderate”.

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ENVIRONMENTAL POLICY

The Trust continues in its efforts to reduce its carbon footprint and our overall impact on the environment. Increasing use of teleconferences, Teams and Zoom have reduced travel costs, and we remain conscious of the need to re-cycle, and avoid wasting non-renewable energy. In addition, the transition to a new CRM system has enabled the charity to incorporate paperless fundraising processes.

STRUCTURE, GOVERNANCE AND MANAGEMENT

The Tall Ships Youth Trust is a charitable company limited by guarantee. The governing documents are its Memorandum and Articles of Association. For the purposes of Company Law, the Trustees listed on page 2 are the directors of the company and are elected by resolution of the company at a general meeting. The company is administered under the control of the Trustees, sitting as a Board, who have general control of and responsibility for the strategic direction of the Trust and its subsidiary companies, and delegate day-to-day responsibility to the Executive team.

In recent years, we have opened our membership schemes which had been closed to new members since 2003. We hope to attract new people to take an active role in the Trust, including voting rights, and we have created several tiers of membership levels including life memberships, and we now have 636 Members who are active and engaged.

The trading operations of the Trust are devolved to its wholly owned subsidiary, Tall Ships Limited. As well as appointing directors to the subsidiary company, the Board can establish other committees to deal with different aspects of the Trust’s work, as necessary.

Trustees are conscious of the ACEVO/NCVO/Charity Commission sponsored ‘Code of Charity Governance’ and have been applying considerable effort towards full compliance. In terms of leadership, the board have reviewed our desired skill sets and begun a process of board renewal. The nominations, screening and selection process for new Trustees is managed on the Board’s behalf by a Nomination and Remuneration Committee consisting of four Trustees including the Chairman and Vice Chairman. Candidates are invited to meet at least two Members of the Committee and the Chief Executive. All new Trustees also receive a full briefing on the Trust’s financial performance, business plans and key issues, and meet key employees. On conclusion of this process, the Committee recommend candidates to the Board which decides on the appointment and, if successful, co-opts the individual until the next AGM at which their appointment is ratified by the members.

The Trust has an induction programme for Trustees. In normal times, the programme includes visits to the Trust’s main operating bases (vessels), introduction to new youth initiatives, coverage of the charity’s aims and how they are being fulfilled, the role and duties of the Trustees, company and charity law and governance, and financial and risk management.

We are keen to promote a spirit of openness within the charity – between Trustees, Executives, Beneficiaries, Volunteers and Supporters. We look forward to meeting some of our new members at the next meeting, potentially again to be a virtual one.

During the year, we formally ratified the appointment of Emma Bradshaw as a trustee. We say goodbye with sincere thanks to Bob Evans for his loyal and invaluable service to the charity during his ten-year tenure, and, since the year-end, to Mark Wippell who provided significant expertise particularly during the recent challenges as a result of Covid.

A member of the board has also recently undertaken a review of our operational maintenance plan (particularly safety-related activity), to ensure we are compliant, and we have minimised the risk to young people, crews, and to our reputation.

We delegate responsibility to the Finance, Risk and Audit Committee for reporting to the Board about financial matters including the forecast cash flows. The Committee considers the financial statements, meets regularly with the Chief Executive and Finance Director, and oversees the appointment of the external auditors, and reviews their findings.

Day-to-day management of the Trust is delegated to the Chief Executive, who oversees our small but extremely professional, committed, and hard-working team at Head Office and the crews which have achieved such remarkable success over the last few years with such limited resources. We thank all who gave of their resources, time, and expertise to support the Trust during this year of turmoil. We will need you all, more than ever, in the months and years ahead.

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FINANCIAL ANALYSIS

Clearly during the past year, Covid has had a significant effect on our results. For most of the year, we were unable to sail, with just a handful of day sail voyages undertaken. Fleet costs were correspondingly lower although we were required to complete various maintenance projects to the vessels, in particular rigging replacements. Fundraising income, despite the pandemic, performed extremely well with grant making trusts and foundations and individual giving close to prior year’s figures. Overheads were kept under control, largely due to decisions on furloughing of staff. Overall this year, we achieved a surplus of £40k.

In terms of cashflow, we have maintained a positive position throughout the year. We have continued with our loan repayment obligation with some agreed deferrals, including to the Merchant Navy Officers Pension Fund (MNOPF). We end the year with an underlying bank balance of £472k, excluding the amount held in the capital appeal for the replacement yacht.

Notes
(see below)		 y/e Feb 2021 y/e Feb 2020
Number of voyagers Number Number
Disadvantaged young people 71 754
Other young people 5 245
Adults 38 623
Total 1 114 1,622

Selected Financial results		 £’000 £’000
Voyage income – bursaries 131 693
- Direct payments 88 758
- total 219 1,451
Direct fleet costs (excl. fleet depreciation) (243) (776)
Net Operating surplus/(deficit) 2 (24) 675
Overheads 3 (868) (937)
Operating deficit before fundraising 4 (892) (262)
Fundraising 5
Individual and Regular giving 1,100 928
Legacies 26 291
Capital appeal 62 164
Total fundraising 1,188 1,383
Less: bursaries given for specific voyages (131) (693)
Net donations 1,057 690
Operating surplus 165 428
Fleet depreciation (125) (142)
Asset write down - (75)
Net income for the period 6 40 211

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Notes to the Financial Analysis

1. Number of voyagers

Due to Covid, we were only able to run a small number of day sail voyages. Numbers taken to sea was 114, 71 of whom were disadvantaged young people.

2. Net Operating surplus/(deficit)

Due to the above, fleet income was correspondingly low, matched by low fleet costs. We did, however, continue to ensure that the vessels were maintained to a very high standard in preparation for the green light to sail again. The necessary rigging replacement on all vessels was completed. We utilised volunteers wherever possible for some of this work.

3. Overheads

Overheads were kept under control, with savings in some areas through negotiated cost waivers, cutbacks and deferrals. Marketing costs were kept to the minimum. Certain staff replacements were delayed, and we instigated reduced staff hours and pay where possible. The Government furlough scheme was utilised with significant savings made. Our average staff levels of 14 remains low. We also replaced the obsolete CRM system during the year which was fully funded by our donors.

4. Operating deficit before fundraising

Operating deficit before fundraising has increased to £892k.

5. Fundraising The key success in fundraising was achieving such a high proportion of last year’s income, despite the pandemic. GMTs raised £504k, 95% of prior year. Other individual giving raised a further £268k, including £155k from our hugely successful Calmer Waters cash appeal, plus legacies of £26k. We were also strongly supported by ASTO who contributed a significant £147k towards our cause. A further £112k from various high-level donors and £68k from supporters was also raised towards various key projects such as our replacement CRM system.

A total of £1,188k was raised this year against £1,383 last year (which included a single legacy of £262k). Various Trusts also agreed to release their previously restricted donations to core funds, to support the charity through the crisis. A total of £177k was agreed to be transferred during the year. In addition, donors to the “New Flagship Appeal” also released sums totalling £90k towards core costs.

We are extremely grateful to all these organisations and individuals for helping TSYT during this period.

6. Net Income for the period Both cash from operating activities and net income were positive for the year to 28 February 2021. Despite Covid, we have once again realised a net income surplus for a third year in a row, this year £40k.

FUTURE FINANCIAL PROSPECTS AND RESERVES POLICY

We continued to be adversely affected by Covid until July 2021 when we were able to resume residential voyages. We are now able to plan for the future assuming a return to normal occupancy rates.

Given the pressure that Covid has created on our cashflow, and in order to manage our way through the next few years, the trustees agreed to taking out a £250k CBILS loan through Clydesdale Bank which will be repaid in equal instalments over 5 years. We believe this puts us on a stronger footing and allows us to concentrate on our core mission. We thank Clydesdale for their support and assistance in getting us over the line in terms of approvals for the loan.

In the autumn of 2021, it is planned to re-launch the capital appeal with a new focus in response to the urgent needs following Covid. We aim to raise sufficient funds to acquire a second-hand Challengersized vessel and to complete a refit to enable our youth work to be undertaken and to cover the first three years of running costs. We have a very strong, high profile, and determined appeal committee to lead on this initiative.

Our membership scheme has been reopened and we are developing plans to increase our engagement with our supporters and volunteers.

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REPORT OF THE TRUSTEES AND STRATEGIC REPORT FOR THE YEAR ENDED 28 FEBRUARY 2021

The Trustees’ long-term objective is to build the Trust’s reserves to protect our charitable mission against unexpected events. The Trustees have therefore set a medium-term goal of building available liquid assets of unrestricted funds to meet any potential gap between income and expenditure, to build sufficient assets to cover restricted funds and to such level that unrestricted funds return to positive balance.

The Trust will continue to make progress in terms of the number of young people we take to sea, particularly those who are disadvantaged, our net operating income, and also our fundraising capacity.

STATEMENT OF TRUSTEES’ RESPONSIBILITIES

The Trustees (who are also Directors of Tall Ships Youth Trust for the purposes of company law) are responsible for preparing the Trustees’ Report and the financial statements in accordance with applicable law and regulations. Company law requires the Trustees to prepare financial statements for each financial year. 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 state of affairs of the charitable company and the group and of the incoming resources and application of resources, including the income and expenditure, of the charitable group 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 enable them to ensure that the financial statements comply with the Companies Act 2006. The Trustees are also responsible for safeguarding the assets of the charitable company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as each of the Trustees are aware: -

The Trustees are responsible for the maintenance and integrity of the corporate and financial information included on the charitable company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Auditors

Moore (South) LLP have expressed their willingness to continue in office, and a resolution for their reappointment for the next financial year will be put to the Annual General Meeting.

ON BEHALF OF THE TRUSTEES

David Aisher Chairman of the Board of Trustees

Dated: 23 November 2021

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REPORT OF THE INDEPENDENT AUDITOR FOR THE YEAR ENDED 28 FEBRUARY 2021

Opinion

We have audited the consolidated financial statements of Tall Ships Youth Trust (the ‘charitable parent company’) and its subsidiary (the ‘group’) for the year ended 28[th] February 2021 which comprise the Consolidated Statement of Financial Activities, the Consolidated and Charity Balance Sheets, the Consolidated Statement of Cash Flows and notes to the financial statements, 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 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.

Material uncertainty relating to going concern

We draw your attention to the going concern accounting policy on page 20 in the financial statements. As a result of the on going effect of Covid-19, the restrictions have impacted on the group’s ability to receive funding and accurately forecast the timing of cash flows.

These events indicate that a material uncertainty exists that may cast significant doubt on the groups ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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

Our responsibilities and the responsibilities of the directors 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 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

13

TALL SHIPS YOUTH TRUST

REPORT OF THE INDEPENDENT AUDITOR

FOR THE YEAR ENDED 28 FEBRUARY 2021

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.

We have nothing to report in this regard.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the charitable parent company and their environment obtained in the course of the audit, we have not identified material misstatements in Directors’ Report, included in the Trustees’ 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 set out on page 12, the trustees, who are also the directors of the charitable parent 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 consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the trustees are responsible for assessing the groups and charitable parent 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 and 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 consolidated financial statements.

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.

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.

14

TALL SHIPS YOUTH TRUST

REPORT OF THE INDEPENDENT AUDITOR FOR THE YEAR ENDED 28 FEBRUARY 2021

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the charitable company and the group.

Our approach was as follows:

15

TALL SHIPS YOUTH TRUST

REPORT OF THE INDEPENDENT AUDITOR FOR THE YEAR ENDED 28 FEBRUARY 2021

In response to the risk of fraud through management override we:

In response to the risk of incorrect recognition of income we:

In response to the classification of income between restricted and unrestricted we:

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

16

TALL SHIPS YOUTH TRUST

REPORT OF THE INDEPENDENT AUDITOR FOR THE YEAR ENDED 28 FEBRUARY 2021

Use of our report

This report is made solely to the charitable parent 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 parent 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 parent company and the charitable parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Sue Lucas (Senior Statutory Auditor) for and on behalf of Moore (South) LLP Chartered Accountants Statutory Auditor

9 St Johns Place Newport Isle of Wight PO30 1LH

Dated: 24 November 2021

17

TALL SHIPS YOUTH TRUST

CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 28 FEBRUARY 2021

Income and Endowments from:
Donations and legacies
Other trading activities
Investments
Government grants
Charitable activities
Total income
Expenditure on:
Raising funds
Other trading activities
Charitable activities
Total expenditure
Net movement in funds
Transfer between funds
Fund balances brought forward
At 1 March 2020
Fund balances carried forward
At 28 February 2021		 Note
2
3
4
7
7
7		 Unrestricted
Restricted Endowment
Total
Funds
Funds
Funds
Funds
Year to
2021
2021
2021
28/2/2021
£
£
£
£
827,387
358,487
-
1,185,874
-
-
-
-
246
1,933
-
2,179
70,824
-
-
70,824
87,446
-
-
87,446
985,903
360,420
-
1,346,323
305,662
-
-
305,662
-
-
-
-
719,662
280,640
-
1,000,302
1,025,324
280,640
-
1,305,964
(39,421)
79,780
-
40,359
(83,853)
83,853
-
-
(350,808)
852,732
51,132
553,056
(474,082)
1,016,365
51,132
593,415
=======
=======
======
=======		 Total
Funds
Year to
29/2/2020
£
1,382,158
11,935
2,540
-
757,578
2,154,211
337,392
11,063
1,594,802
1,943,257
210,954
-
342,102
553,056
=======

The accompanying accounting policies and notes form an integral part of these financial statements.

All operations of the Trust and its subsidiaries are classed as continuing.

There was no movement on the endowment funds in either the current or prior year and so no separate income and expenditure account is included.

18

TALL SHIPS YOUTH TRUST

BALANCE SHEET

FOR THE YEAR ENDED 28 FEBRUARY 2021

Fixed assets
Tangible assets
Current assets
Stocks
Debtors
Investments
Cash at bank and in hand
Creditors: amounts falling due
within one year
Net current assets/(liabilities)
Total assets less current liabilities
Creditors: amounts falling due after
more than one year
Capital funds
Endowment funds
Income funds
Restricted funds
Revaluation reserve
Other unrestricted funds		 Note
13

14
15
16
17
18
19

20
20
 Consolidated
Tall Ships Youth Trust
28/2/2021
29/2/2020
28/2/2021
29/2/2020
£
£
£
£
1,287,287
1,400,549
1,287,287
1,400,549
_
_
_
_
9,188
9,705
250
250
96,447
332,126
511,327
310,487
5,585
5,338
5,585
5,338
546,294
241,056
478,021
225,990
657,514
588,225
995,183
542,065
(671,031)
(638,374)
(567,731)
(528,155)
(13,517)
(50,149)
427,452
13,910
1,273,770
1,350,400 1,714,739
1,414,459
(680,355)
(797,344)
(515,000)
(575,500)
593,415
553,056 1,199,739
838,959
======
======
======
======
51,132
51,132
51,132
51,132
1,016,365
852,732
1,016,365
852,732
618,547
624,497
618,547
624,497
(1,092,629)
(975,305)
(486,305)(689,402)
593,415
553,056 1,199,739
838,959
======
======
=======
======

The financial statements were approved by the Trustees on 23 November, 2021

David Aisher Chairman of the Board

Philip McDanell Chairman of Finance

Charity Number: 314229 Company Number: 00567460

The accompanying accounting policies and notes form an integral part of these financial statements.

19

TALL SHIPS YOUTH TRUST

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 28 FEBRUARY 2021

Cashflow from operating activities
Net cashflow from operations
See Below
Total cashflow from operating activities
Cashflow from investing activities
Interest received

Sale proceeds from disposal of fixed assets
Payments to acquire fixed assets
Total cashflow on Investing activities
Cash from financing activities
Repayments of borrowing
Net cash provided by (used in) financing activities
Net Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 March 2020
Cash and cash equivalents at 28 February 2021

Cash and cash equivalents consist of:
Cash at bank and in hand

Cash and cash equivalent at 28 February 2021

Reconciliation of income to net cashflow from operations:
Net income resources

Depreciation charges

Investment income
Change in value of investments
Loss on disposal of fixed asset
(Increase)/decrease in stocks
(Increase)/decrease in debtors

Increase/(decrease) in creditors
Net cash outflow from operations
 28/2/2021
29/2/2020
Group
Group
£
£
361,350
179,471
361,350
179,471
2,179
2,540
32,900
-
(48,360)
(10,101)
(13,281)
(7,561)
(42,831)
(90,492)
(42,831)
(90,492)
305,238
81,418
241,056
159,638
546,294
241,056
======
======
546,294
241,056
546,294
241,056
======
======
28/2/2021
29/2/2020
£
£
40,359
210,954
128,622
219,981
(2,179)
(2,540)
(247)
(257)
100
-
517
773
235,679
(242,096)
(41,501)
(7,344)
361,350
179,471
======
======

20

TALL SHIPS YOUTH TRUST

PRINCIPAL ACCOUNTING POLICIES

FOR THE YEAR ENDED 28 FEBRUARY 2021

ACCOUNTING POLICIES

The principal accounting policies are summarised below. The accounting policies have been applied consistently throughout the period.

General Information and Basis of Accounting

Tall Ships Youth Trust is a charitable company limited by guarantee, registered in England and Wales. In the event of the charity being wound up, the liability in respect of the guarantee is limited to £1 per member of the charity. The address of the registered office, together with the objects of the Charity are given in the charity information on pages 1 and 4 respectively of these financial statements.

The charity constitutes a public benefit entity as defined by FRS 102. 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 United Kingdom issued in October 2019 (FRS 102), the Charities Act 2011, Companies Act 2006, and UK Generally Accepted Accounting Practice.

The financial statements are prepared under the historical cost convention, modified to include certain items at fair value. The financial statements are prepared in sterling which is the functional currency of the charity and rounded to the nearest £1.

Going Concern

The charity depends upon cash flow which is raised mainly from various forms of donations and voyage income. Both sources of income have been impacted by Covid-19. The residential sailing program was suspended in mid-April 2020 and recommenced after the end of the financial year. All sources of our fundraising have also been impacted. In response to this, the charity has launched a new appeal and continues to ask for and receive donations from a variety of generous people and organisations. But it remains a challenge.

The Charity has an operating subsidiary which runs the voyage programme. Tall Ships Limited is not solvent, having a net liability at the year-end of £1,159,933 (2020 - £839,509). This net liability includes the pension deficit of £240,355 (2020 - £241,844). The Charity provides financial support to Tall Ships Ltd of £980,810 (2020 - £553,606) by way of an inter-company loan included in the net liabilities, which it has confirmed it will not seek repayment within the next 12 months so long as the company requires it to continue to trade. The Charity continues to manage its group exposure.

The Charity has a deficit of assets making up the unrestricted funds, as explained in note 21, a situation which stems from the sale of the brig in 2017 for considerably less than had been expected. The charity is focussing on correcting this position.

These situations above therefore create a material uncertainty about the future timing and level of cash flow, and the future financial position of the Charity.

To mitigate this, from the start of the pandemic, the Charity’s Finance Committee has met on a regular basis to evaluate and actively oversee the situation and develop strategies to minimise non-essential expenditure and develop fundraising income. The charity has reduced costs in all areas, whilst planning for future covid-19 safe voyages. The charity has taken advantage of the Government support measure - the coronavirus job retention scheme to protect cash flows and future employment capabilities, and a CBILS loan offer from the Charity’s bank . The finances continue to be reviewed regularly and forecasts amended.

Therefore, due the plans described above, the Trustees have a reasonable expectation that the Charity will continue in operational existence for the foreseeable future and accordingly the accounts are prepared on the going concern basis.

21

TALL SHIPS YOUTH TRUST

PRINCIPAL ACCOUNTING POLICIES

FOR THE YEAR ENDED 28 FEBRUARY 2021

Basis of Consolidation

The group financial statements consolidate those of the charity and of its subsidiary undertaking has drawn up on 28 February 2021. The results of the charity’s trading subsidiary, Tall Ships Limited, have been consolidated on a line by line basis. Surpluses or deficits on intra-group transactions are eliminated in full.

A separate statement of financial activities and income and expenditure account for the charity itself are not presented because the charity was taken advantage of the exemptions afforded by the Companies Act 2006.

Comparative Information

The comparative figures for the Consolidated Statement of Financial Activities have been amended to reflect the change in the way the Trust accounts for certain funding relating to voyages. Designated or restricted income is recognised when the grant or funds are originally received and not again when the voyage occurs.

FUND ACCOUNTING

Unrestricted funds are available for use at the discretion of the Trustees in furtherance of the general objectives of the charity, and which have not been designated for other purposes.

Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the charity for particular purposes. The cost of raising and administering such funds are charged against the specific fund.

Endowment funds represent those assets which must be held permanently by the charity. Expendable Endowments permit the Charity to spend the capital sum on suitable capital projects with the permission of the donor. Income arising on the endowment funds can be used in accordance with the objects of the charity and is transferred to the general funds. Any capital gains or losses arising on the investments form part of the fund. Investment management charges and legal advice relating to the fund are charged against the relevant fund. The purpose and use of each expendable endowment fund is set out in the notes to the financial statements.

INCOME RECOGNITION POLICIES

Donations and Gifts

All monetary donations and gifts are included in full in the statement of financial activities when receivable, provided that there are no donor-imposed performance restrictions, in which case recognition is deferred until the pre-condition has been met.

Legacies are recognised as receivable once probate has been granted, notification has been received and sufficient information is available to make a realistic assessment of the value.

Intangible income is valued and included in income to the extent that it represents goods or services which would otherwise be purchased. An equivalent amount is charged as expenditure. Voluntary help is not included as income.

Life subscriptions are counted in full when received. Annual membership fees are recognised over the period to which they relate.

Donations and any associated income tax recoveries when donated under gift aid are credited as income when the amounts are received.

Activities for Generating Funds

Revenue from activities such as special fundraising events is recognised in the period in which the activity or event occurs.

22

TALL SHIPS YOUTH TRUST

PRINCIPAL ACCOUNTING POLICIES

FOR THE YEAR ENDED 28 FEBRUARY 2021

Investment income

Investment income is recognised when receivable.

Incoming Resources from Charitable Activities

Revenue from voyage fees is recognised in the period in which the voyage commences.

Grants Receivable

Income from Government and other grants are recognised at fair value when the charity has entitlement after any performance conditions have been met, it is probable that the income will be received and the amount can be measured reliably. If entitlement is not met then these amounts are deferred.

Grants for the purchase of fixed assets are initially credited to restricted incoming resources when receivable. On completion of the purchase or construction of the fixed asset towards which the grant was receivable, where grant restrictions permit, the assets are treated as unrestricted, with a corresponding transfer of funds.

RESOURCES EXPENDED

All expenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Expenditure is recognised where there is a legal or constructive obligation to make payments to third parties, it is probable that the settlement will be required, and the amount of the obligation can be measured reliably. It is categorised under the following headings:

➢ Other expenditure represents those items not falling into the categories above. Irrecoverable VAT is charged as an expense against the activity for which expenditure arose.

Allocation of Support Costs

Support costs are those that assist the work of the charity, but do not directly represent charitable activities and include office costs, governance costs, administrative and payroll costs. They are incurred directly in support of expenditure on the objects of the charity and include project management carried out at the Charity's main base in Portsmouth. Where support costs cannot be directly attributed to particular headings, they have been allocated to cost of raising funds and expenditure on charitable activities on a basis consistent with use of the resources. Premises and other overheads have been allocated on a basis relating to use and the proportion of staff time incurred on those matters.

The analysis of these costs is included in note 8.

TANGIBLE FIXED ASSETS AND DEPRECIATION

Tangible fixed assets are stated at cost or valuation, net of depreciation. Depreciation is calculated on all tangible fixed assets to write down the cost or valuation less estimated residual value by annual instalments over their expected useful lives. The periods generally applicable are: -

Yachts 15 years
Computers and Office Equipment 5 years
Display and Exhibition Equipment 5 years

TALL SHIPS YOUTH TRUST

PRINCIPAL ACCOUNTING POLICIES

FOR THE YEAR ENDED 28 FEBRUARY 2021

FOREIGN CURRENCIES

Foreign currency transactions are initially recognised by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.

Monetary assets and liabilities denominated in a foreign currency at the balance sheet date are translated using the closing rate.

INVESTMENTS

Assets held for investment purposes are included at market value.

Traded securities are valued at the mid-point quotation in the Stock Exchange Daily List. Other investment assets are included at the Trustees’ best estimate of market value. Donated shares that come with a requirement that they be held for a fixed period are included in the Balance Sheet at a value assessed by the Trustees at the date of receipt. This value is then reviewed by the Trustees at each balance sheet date.

STOCKS

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing stock to its present location and condition.

Provision is made for damaged, obsolete and slow-moving stock where appropriate.

DEBTORS

Trade and other debtors are recognised at the settlement amount due. Prepayments are valued at the amount prepaid.

CREDITORS

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

RETIREMENT BENEFITS

Defined Contribution Scheme

The pension costs charged in the period represent the amount of the contributions payable to the scheme in respect of the accounting period.

Defined Benefit Scheme

Some former employees of the Trust’s active subsidiary, Tall Ships Limited, were members of a multiemployer scheme. Tall Ships Limited is unable to identify its share of the underlying assets and liabilities of this scheme on a consistent and reasonable basis and therefore, as required by FRS 17 'Retirement Benefits', accounts for it as if it were a defined contribution scheme.

LEASED ASSETS

Operating lease agreements

Rentals payable and receivable under operating leases are charged to the SOFA on a straight-line basis over the period of the lease.

24

TALL SHIPS YOUTH TRUST

PRINCIPAL ACCOUNTING POLICIES FOR THE YEAR ENDED 28 FEBRUARY 2021

TAXATION

No corporation tax has been provided in these accounts because the income of the charity is within the exemption granted by HM Revenue & Customs to the extent that these funds are applied to Charitable objects.

FINANCIAL ASSETS AND LIABILITIES

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

JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the charitable company’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 other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

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

25

TALL SHIPS YOUTH TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 28 FEBRUARY 2021

1. COMPARATIVE STATEMENT OF FINANCIAL ACTIVITIES

Unrestricted

Funds
2020
£
Income and Endowments from:
Donations and legacies
687,869
Other trading activities
11,935
Investments
627
Charitable activities
757,578
Total income
1,458,009
========
Expenditure on:
Raising funds
337,392
Other trading activities
11,063
Charitable activities
1,132,653
Total expenditure
1,481,108
========
Net movement in funds
(23,099)
Fund balances brought forward at 1 March 2019
(327,709)
Fund balances carried forward
At 29 February 2020
(350,808)
======
2.
INCOME FROM DONATIONS AND LEGACIES
Unrestricted

£
Donations
759,076
Legacies
25,556
Membership
42,755
827,387
======
Of the comparative donations figure £694,289 was in respect of restricted
3.
INCOME FROM OTHER TRADING ACTIVITIES
Unrestricted

£
Fundraising events
-
=====		 Restricted
Funds
2020
£
694,289
-
1,913
-
696,202
======
-
-
462,149
462,149
======
234,053
618,679
852,732
======
Restricted
£
358,487
-
-
358,487
======

funds.
Restricted
£
-
=====		 Endowment
Total
Funds
Funds
2020
29/2/2020
£
£
-
1,382,158
-
11,935
-
2,540
-
757,578
-
2,154,211
===== ========
-
337,392
-
11,063

1,594,802
-
1,943,257
===== ========
-
210,954
51,132
342,102
51,132
553,056
=====
======
28/2/2021
29/2/2020
£
£
1,117,563 1,046,954
25,556
290,816
42,755
44,388
1,185,874
1,382,158
======== ========
28/2/2021
29/2/2020
£
£
-
11,935
=====
=====

Of the comparative fundraising events £nil was in respect of restricted funds.

26

TALL SHIPS YOUTH TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 28 FEBRUARY 2021

4. INCOME FROM CHARITABLE ACTIVITIES

4.
INCOME FROM CHARITABLE ACTIVITIES
28/2/2021 29/2/2020
£ £
Gross voyage fees 309,974 1,420,511
Less bursaries utilised from funds
Grants (receivable from Associations of Sea Training
Organisations for Youth Work)		 (222,528)
-		 (693,430)
30,497
87,446 757,578
===== ======

5. NET INCOME FROM ACTIVITIES OF SUBSIDIARIES

The Charity’s only active subsidiary is Tall Ships Limited. A summary of its results for the period is set out below:-

28/2/2021
£
Turnover-voyage fees
309,974
Government grants
45,077
Operating costs
(656,963)

Operating Profit/(loss)
(301,912)
Finance costs
(18,512)
Net profit/(loss)
(320,424)
======
The net assets and liabilities of the active subsidiary are:
28/2/2021
£
Current assets
89,532
Creditors: amounts falling due within one year
(1,249,465)
Total net liabilities
(1,159,933)
Aggregate of share capital and reserves
(1,159,933)
========		 29/2/2020
£
1,451,008
-
(1,203,747)
247,261
(18,847)
228,414
======
29/2/2020
£
46,160
(885,669)
(839,509)
(839,509)
======

6. BRANCHES

The financial results of the branches of Tall Ships Youth Trust are consolidated into these accounts on the basis of returns as at the year-end submitted by each branch. Branches raised £244 as donations in the year to 28 February 2021 (2020: £267), which is classified as unrestricted income in the accounts.

27

TALL SHIPS YOUTH TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 28 FEBRUARY 2021

7. ANALYSIS OF EXPENDITURE

Cost of raising funds:
Fundraising costs
Allocation of governance costs (see below)
Costs of other trading activities
Charitable activities
Charitable activities
Ship related costs
Depreciation and impairment
Loss on disposal of fixed asset
Allocation of governance costs (see below)
Interest payable and similar finance charges
Other voyage and support expenses
=
Restricted funds
Unrestricted funds		 Direct
Support
costs
costs
28/2/2021
£
£
£
284,316
19,449
303,765
-
1,897
1,897
284,316
21,346
305,662
======
=====
======
-
-
-
===
===
===
440,439
-
440,439
128,622
-
128,622
100
-
100
25,000
-
25,000
1,933
-
1,933
322,911
81,297
404,208
919,005
81,297
1,000,302
======
=====
=======
280,640
719,662
1,000,302
========		 29/2/2020
£
333,452
3,940
337,392
======
11,063
=====
956,892
219,981
-
16,724
1,914
399,291
1,594,802
========
462,149
1,132,653
1,594,802
========

8. SUPPORT AND GOVERNANCE COSTS

28/2/2021 29/2/2020 Method Governance Charitable
Activities		 Trading
Activities		 Fundraising
Activities
£ £ £ £ £ £
Payroll and HR 7,610 6,846 Total resources 114 5,327 - 2,169
Property costs 27,284 19,941 Total resources 409 19,099 - 7,776
Office costs 14,960 12,884 Total resources 151 11,936 - 2,873
IT and Website 14,513 13,911 Total resources 218 10,159 - 4,136
Marketing 33,528 47,782 Direct activities - 33,528 - -
Other 4,748 10,592 Total resources 1,005 1,248 - 2,495
102,643 111,956 1,897 81,297 - 19,449
====== ====== ==== ===== === =====
At 28 February 2020 3,940 65,819 236 41,961
==== ===== === =====

Governance costs (included above)

Support Charitable 28/2/2021 29/2/2020
£ £ £ £
Auditors remuneration - 19,000 19,000 16,724
Under provision prior year - 6,000 6,000 -
Administrative expenses 1,897 - 1,897 3,940
1,897 25,000 26,897 20,664
==== ===== ===== =====
At 28 February 2020 3,940 16,724
==== ======

28

TALL SHIPS YOUTH TRUST

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2021

9.
OTHER COSTS
28/2/2021 29/2/2020
£ £
The surplus is stated after charging:
Auditors’ remuneration
Audit services 19,000 18,000
Non-audit services 6,000 7,000
25,000 25,000
Depreciation 128,622 145,305
Impairment of asset - 74,676
Operating lease rentals 10,020 18,606
====== ======
10.
EMPLOYEES
Employee costs during the period were as follows: 28/2/2021 29/2/2020
£ £
Wages and salaries 527,812 557,327
Social security costs 53,371 53,841
Other pension costs 22,194 22,707
603,377 633,875
====== ======
The average number of employees during the period were as follows:
28/2/2021 29/2/2020
Number Number
Management and administration 14 13
== ==

The total costs attributable to senior management personnel amounted to £232,656 for the year to 28 February 2021 (2020: £217,343). Senior management personnel comprise the Chief Executive Officer, Finance Director, and for part of 2021 the Fundraising and Marketing Director. The emoluments of higher paid employees fell within the following ranges:

28/2/2021 29/2/2020
Number Number
£60,001 to £70,000 1 1
£110,001 to £120,000 1 1
== ==

11. PAYMENTS TO TRUSTEES AND CONNECTED PERSONS

No Trustee received remuneration in the period, directly or indirectly, from either the charity or an institution or company controlled by the charity.

Expense reimbursements for travel and subsistence were not paid to Trustees during the year (2020: £nil) and there were no expenses paid on behalf of a trustee.

Trustee indemnity insurance paid on behalf of Trustees and officers in the year was £3,369 (2020: £2,679)

29

TALL SHIPS YOUTH TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 28 FEBRUARY 2021

12. SURPLUS/(DEFICIT) OF EXPENDITURE OVER INCOME

The consolidated Statement of Financial Activities includes the results of the Charity’s wholly owned subsidiary – Tall Ships Limited, which operates voyages. Details of the results of the trading subsidiary are set out in note 5.

The summary financial performance of the Charity alone was:


Income
Income from donations and legacies

Other trading activities
Other income
Government grants
Investment income
Total income

Expenditure
Raising funds
Other trading activities
Charitable activities
Total expenditure
Net income for the year
Total funds brought forward on 29 February 2020
Total funds carried forward at 28 February 2021


13.
TANGIBLE FIXED ASSETS
Consolidated and Tall Ships Youth Trust
Cost or valuation:
At 1 March 2020
Additions in year
Disposals in year
At 28 February 2021

Depreciation:
At 1 March 2020
Provided in the period
Depreciation eliminated on disposal
At 28 February 2021
Net book amount at 28 February 2021
Net book amount at 29 February 2020		 28/2/2021
29/2/2020
£
£
1,271,944
1,382,158
-
11,935
-
188,447
25,747
-
2,179
2,540
1,299,870
1,585,080
(305,050)
(330,312)
-
(17,707)
(634,038)
(1,066,075)
(939,088)
(1,414,094)
360,782
170,986
838,959
667,973
1,199,741
838,959
========
======
Computers,
Fixtures &
Yachts
Equipment
Total
£
£
£
2,131,999
81,280
2,213,279
-
48,360
48,360
(275,879)
-
(275,879)
1,856,120
129,640
1,985,760
========
===== ========
743,630
69,100
812,730
123,741
4,881
128,622
(242,879)
-
(242,879)
624,492
73,981
698,473
======
=====
======
1,231,628
55,659
1,287,287
=======
=====
=======
1,388,369
12,180
1,400,549
=======
=====
=======

The Yachts are given as security against a number of loans included in creditors. The net book value of yachts given as security was £1,181,218 (2020: £1,299,200).

The Challenger Yachts are included above at a net book value of £290,000 based on a professional valuation in 2016. They were professionally valued on 15 August 2020 at £350,000 each.

30

TALL SHIPS YOUTH TRUST

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2021

13. FIXED ASSETS (continued)

The figures stated above for cost or valuation in respect of Yachts comprise assets at:

The figures stated above for cost or valuation in respect of Yachts comprise assets at:
Cost
Valuation

 £
1,370,807
761,192

2,131,999
========

If certain fixed assets had not been re-valued, they would have been included on the historical cost basis at the following amounts:

Cost

Accumulated depreciation

Net book amount at 28 February 2021

14.
DEBTORS
Consolidated
28/2/2021
29/2/2020
£
£
Amounts owed by group undertakings
-
-
VAT recoverable
16,125
21,053
Other debtors
50,121
299,695
Prepayments
30,201
11,378
96,447
332,126
=====
======
15.
CURRENT ASSET INVESTMENTS
Consolidated
28/2/2021
29/2/2020
£
£
UK investments – COIF Funds
5,585
5,388
5,585
5,388
====
====		 Yachts
Yachts
£
£
28/2/2021
29/2/2020
1,370,807
1,370,807
(1,121,386)
(1,029,999)
249,421
340,808
=======
======
Tall Ships Youth Trust
28/2/2021
29/2/2020
£
£
427,205
-
12,909
7,084
48,454
296,255
22,759
7,148
511,327
310,487
======
======
Tall Ships Youth Trust
28/2/2021
29/2/2020
£
£
5,585
5,388
5,585
5,388
====
====

Unlisted investments have been invested in COIF units, held in the name of a supporter’s branch, and are at market value.

31

TALL SHIPS YOUTH TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 28 FEBRUARY 2021

16. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Loans from Trustees and funders
Payments received on account

Trade creditors
Social Security and other taxes
Deferred income
Other creditors and accruals
 Consolidated
Tall Ships Youth Trust
28/2/2021
29/2/2020
28/2/2021
29/2/2020
£
£
£
£
200,500
206,000
200,500
206,000
197,445
212,906
197,445
212,906
46,937
88,439
36,842
23,604
75,485
15,242
75,485
15,242
17,674
51,574
17,674
51,574
132,990
64,213
39,785
18,829
671,031
638,374
567,731
528,155
======
======
======
======

Loans from Trustees and funders are secured by fixed charges over the Trust’s vessels (see note 13).

Deferred income relates to the proportion of membership income relating to the future period.

17. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Loans from Trustees and funders

Other Creditors and accruals
 Consolidated
Tall Ships Youth Trust
28/2/2021
29/2/2020
28/2/2021
29/2/2020
£
£
£
£
515,000
575,500
515,000
575,500
165,355
221,844
-
-
680,355
797,344
515,000
575,500
======
======
======
======

Loans from Trustees and funders are secured by fixed charges over the Trust’s vessels (see note 13).

Included within other creditors is the pension deficit owed by Tall Ships Limited (see note 22).

18. ENDOWMENT FUNDS

Michael
Crocker
£
At 1 March 2020
13,277
At 28 February 2021
13,277
=====		 Nova
Lord
Scotia
Burnham
£
£
12,952
24,903
12,952
24,903
=====
=====		 Total
£
51,132
51,132
=====

The Michael Crocker fund was set up in memory of a yachtsman murdered in February 1982. The income is for contributions to voyage fees for pupils of Henley College. The Nova Scotia fund was set up in memory of trainees who died on the sailing ship “Marques” which sank off Bermuda during the 1984 American Tall Ships race. The income is shared with the American Sail Training Association and is to support a voyage berth. The Lord Burnham fund was set up in his memory following his death in June 1993. Income is for contributions to Voyage fees aboard the Trust’s ships for trainees ideally, but not exclusively, from Eastern Europe.

32

TALL SHIPS YOUTH TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 28 FEBRUARY 2021

19. RESTRICTED FUNDS

Balance at
1/3/2020
£
International fund
193,264
Legacy fund
262,500
Other specific funds
396,968
Total restricted funds
852,732
======		 Income
Expenditure
Transfer
Balance at
28/2/2021
£
£
£
£
1,933 -
-
195,197
-
-
-
262,500
358,487
(280,640)
83,853
558,668
360,420
(280,640)
83,853
1,016,365
======
======
=====
=======

The Specific Funds are donations made to the Trust to be used for specified purposes. At 28 February 2021 there were 340 separate funds (2020: 250). The Trust is reviewing the ongoing obligations of restricted funds.

The International Fund is restricted within the accounts of the Trust for the support of international sail training activities.

The legacy fund is monies received to be used for youth trip voyages in the North Devon. North West Somerset and Exmoor National Park areas.

The transfer between funds relates to the allocation between restricted and designated voyage funds.

Year to 29 February 2020 comparative period
Balance at
1/3/2019
£
International fund
191,351
Legacy fund
-
Other specific funds
427,328
Total restricted funds
618,679
======		 Income
Expenditure
Balance at
29/2/2020
£
£
£
1,913
-
193,264
262,500
-
262,500
431,789
(462,149)
396,968
696,202
(462,149)
852,732
======
======
======

20. UNRESTRICTED FUNDS

Consolidated General Revaluation
Reserve Reserve Total
£ £ £
At 1 March 2020 (975,305) 624,497 (350,808)
Incoming resources
Outgoing resources		 985,903
(1,025,324)		 -
-		 985,903
(1,025,324)
Transfer designated to restricted voyage funds (83,853) - (83,853)
Transfer between funds - revaluation 5,950 (5,950) -
At 28 February 2021 (1,092,629) 618,547 (474,082)
======= ====== ======
Tall Ships Youth Trust General Revaluation
Reserve Reserve Total
£ £ £
At 1 March 2020 (689,402) 624,497 (64,905)
Incoming resources 939,450 - 939,450
Outgoing resources (658,448) - (658,448)
Transfer designated to restricted voyage funds (83,853) - (83,853)
Transfer between funds - revaluation 5,950 (5,950) -
At 28 February 2021 (486,303) 618,547 132,244
====== ====== ======

33

TALL SHIPS YOUTH TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 28 FEBRUARY 2021

21. ANALYSIS OF NET ASSETS BETWEEN FUNDS

Unrestricted
Funds
£
Consolidated at 28 February 2021
Tangible fixed assets
1,287,287
Current assets
(409,983)
Current liabilities
(671,031)
Creditors: due after more than one year
(680,355)
(474,082)
======
Tall Ships Youth Trust at 28 February 2021
Tangible fixed assets
1,287,287
Current assets
(72,314)
Current liabilities
(567,731)
Creditors: due after more than one year
(515,000)
132,242
=======
Period to 29 February 2020 comparative period
£
Consolidated at 29 February 2020
Tangible fixed assets
1,400,549
Current assets
(315,639)
Current liabilities
(638,374)
Creditors: due after more than one year
(797,344)
(350,808)
======
Tall Ships Youth Trust at 29 February 2020
Tangible fixed assets
1,400,549
Current assets
(361,799)
Current liabilities
(528,155)
Creditors: due after more than one year
(575,500)
(64,905)
=====		 Restricted
Endowment
Funds
Funds
Total
£
£
£
-
-
1,287,287
1,016,365
51,132
657,514
-
-
(671,031)
-
-
(680,355)
1,016,365
51,132
593,415
=======
=====
======
-
-
1,287,287
1,016,365
51,132
995,183
-
-
(567,731)
-
-
(515,000)
1,016,365
51,132
1,199,739
=======
=====
=======
£
£
£
-
-
1,400,549
852,732
51,132
588,225
-
-
(638,374)
-
-
(797,344)
852,732
51,132
553,056
======
=====
======
-
-
1,400,549
852,732
51,132
542,065
-
-
(528,155)
-
-
(575,500)
852,732
51,132
838,959
======
=====
======

Most restricted donations are to cover, in part the costs of a voyage and most of the costs of voyages are spent in advance, starting with buying a boat and having the organisation to run the trips. The above note shows a notional allocation of assets between restricted and unrestricted. These assets are not segregated. The analysis shows that after allocating assets to restricted funds, there is a deficit of assets represented by other unrestricted funds. This situation has existed since the sale of the brig in the year to February 2018 for considerably less than had been expected. The charity is focused on correcting this situation.

22. PENSIONS

Defined contribution scheme

The group makes contributions towards individual pension schemes for the benefit of employees. The assets of these schemes are administered by Trustees in funds independent from those of the Tall Ships Youth Trust and its subsidiary companies. Contributions made during the period are disclosed in note 10.

34

TALL SHIPS YOUTH TRUST

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2021

Defined benefit scheme

A number of former employees of the Trust’s subsidiary Tall Ships Limited (“TSL”) have belonged to an industry wide pension scheme. The Trustees of the scheme have advised TSL that part of the scheme is in deficit and it is apportioning the deficit between participating employers. Interest is accruing on the residual of the 2009 and 2012 pension scheme deficits and a payment plan is in operation. At the period end the balance outstanding was £240,355 (2020 - £241,844).

23. LEASING COMMITMENTS

At the reporting date, the Trust had the following minimum future lease commitments:

28/2/2021
Land &
Buildings
Other
£
£
Within one year
25,000
13,386
Between two and five years
-
38,935
25,000
52,321
=====
=====		 29/2/2020
Land &
buildings
Other
£
£
25,000
22,815
25,000
35,821
50,000
58,636
=====
=====

24. RELATED PARTY TRANSACTIONS

During the comparative year, C Lennox, who is the son of J Lennox, the previous chairman of the charity, received remuneration of £Nil (2020: £17,459). The Trustees are of the view that this is at market rate for the job performed.

Loans

Included within the figures in notes 16 and 17 is £156,500 (2020: £172,500) from Trustees and related parties, which are part of the secured charge on fixed assets (see note 13).


are part of the secured charge on fixed assets (see
note 13).
As at As at
28/2/2021 29/2/2020
£ £
Name
M Aiken (Dec’d) - 150,000
R Evans 6,500 12,500
S Hartigan - 10,000
6,500 172,500
===== =====

The aggregate donations from Trustees to the charity during the year was £10,506 (2020 £38,564).

25.
FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Group balances
Financial assets at amortised Cost
Financial liabilities at amortised cost

Net financial liabilities		 28/2/2021
£
618,121
(1,136,267)

(518,146)
======		 29/2/2020
£
567,143
(1,171,238)
(604,095)
======

The Charity’s financial assets comprise investments and cash and bank balances. Financial liabilities include trade creditors, loans, accruals and other creditors.

35