REGISTERED IN ENGLAND AND WALES NUMBER: 00567460 CHARITY NUMBER: 314229 all Ships REPORT AND ACCOUNTS FOR THE YEAR ENDED 28 FEBRUARY 2025 TALL SHIPS YOUTH TRUST CONTENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 Pages Reference and Administrative Details Report of the Trustees and Strategic Report 3-15 Independent Auditors, Report 16-20 Consolidated Statement of Financial Activities 21 Balance Sheets 22 Consolidated Statement of Cash flows 23 Principal Accounting Policies 24-27 Notes to the Financial Statements 28-40 TALL SHIPS YOUTH TRUST REFERENCE AND ADMINISTRATIVE DETAILS FOR THE YEAR ENDED 28 FEBRUARY 2025 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. POI 3PT Vice-Patrons Mr l A Carruthers (deceased 9 October 2025) Mr P Coleman Mr D de Laszlo DL Lord Grade CBE Lord Greenway MrMLeMay 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 Mr J Brown Mr P D'ornano Mr S Edwards Mr M Layng Mr A Martyn Miss K Nazarin (Resigned 8 March 2024) Mr Z Rushdie (Appointed 20 November 2024) Mrs M Verghese-Dipple (Resigned 30 April 2025) Chief Executive MrA Floyd Company Secretary Mr P Taylor Auditor Moore (South) LLP 9 St John's Place Newport Isle of Wight P030 ILH Bankers Clydesdale Bank PIC Gatwick Business and Private Banking Centre 5 Peveril Court 6-8 London Road Crawley West Sussex RHIO 8JE TALL SHIPS YOUTH TRUST REPORT OF THE TRUSTEES AND STRATEGIC REPORT FOR THE YEAR ENDED 28 FEBRUARY 2025 CHAIRMAN'S INTRODUCTION As we close the year ended 28 February 2025, we are preparing to increase our reach across the UK and for the growth of our fleet. Demand continues to increase for our three-voya9e journey for young people. In 2024-25 we turned away over 200 young people due to lack of capacity. As a result of this growing trend, we've been working with funders and supporters to grow our capacity through the addition of Challenger vessels to our fleet. The most significant support has been received from The Worshipful Company of Shipwrights. They, in a co-venture with The Gosling Foundation, are funding the acquisition of Challenger 5, which will join our fleet later in 2025. This is a significant step fomard as we enter year three of our strategy. As Challenger 5 becomes operational it will give us an additional 300 places for young people and over 100 adults each year. Challenger 5 will also provide capacity which will be reduced as we enter our major refit programme for our existing 4 Challengers later in 2026. Despite this capacity constraint, in the year ended 28 February 2025,1,287 young people voyaged with us. This was a significant increase on our previously highest year in 2024. This represents the success of our strategy to voyage more in the winter months to increase utilisation, optimise occupancy and off er a three-voyage programme of Exploration. Empowerment and Leadership over three years. 42/. of these young voyagers were girls and 18% were from the global mojority. This continues to reflect better identification and engagement of young people and their decision makers led by our Youth Development & Outdoor Learning team. We have also increased the quality of our voyage experience across the three-voyage journey and planned better utilisation of our current fleet throughout all 12 months of the year through our Operations and Fleet Readiness team. The development of our UK hubs continues to be a focus, removing the barriers to participation for young people wherever they are in the UK. This increased our voyaging from Plymouth, Belfost, Greenock and Ipswich. As we 9row our fleet in 2025 and 2026, we will continue to increase our hub presence around the UK, including Wales. while maintaining our home hub ot Portsmouth. Throughout the year, 421 adult voyagers si nificantly contributed to the work of the trust through paid voyage experiences. Our adult voya9ers o ten become volunteers and donors as they are so inspired by the young people they interact with. They form part of the donor community who are the lifeblood of Tall Ships Youth Trust. Our crews, supporters and donors continued to support young people voyaging and our work in what was an extremely challenging environment for all. Ongoing conflict in Europe and the Middle East, political instability and rising costs across the UK, created on-going financial challenges which we expect to continue in coming years. As we look ahead, we have secured funding for our fifth Challen er, have positive indications of funding for a sixth vessel and are launching our campaign to refit t e entire fleet from 2026. We are therefore optimistic that our strong growth path will continue towards supporting over 2,000 young people annually over the next few years despite a challenging financial environment. In October this year, we received confirmation of a si nificant donation of £lm over three years from Sandra Dennis and her family, through her fatherfs c aritable foundation. This is a hugely impactful commitment that will support our growth plans across the UK and potentially contribute to the refit of our existing four Challengers. Our trustees have passed a resolution for recognition of the YC Chan Charitable Foundation on two of our Challengers and then two of our future major vessels in perpetuity. If you feel that you could contribute to this work, please do contact us as we rely heavily on volunteers and donors to support all aspects of what we do. David Aisher Chair of Trustees, Tall Ships Youth Trust TALL SHIPS YOUTH TRUST REPORT OF THE TRUSTEES AND STRATEGIC REPORT FOR THE YEAR ENDED 28 FEBRUARY 2025 OUR ONGOING APPROACH We are now in year three of our strategy 2023 to 2028. following the launch of the three-voyage programme. Our Vision is a society where all young people strive to create better outcomes for themselves and for their communities. Our Choritable Mission is to enable young people, particularly those from disadvantaged backgrounds, to change their lives at sea and contribute to the maritime sector and the blue economy. Our Values reflect our changing culture as a team. as a charity and as a society. Nurturing and Inclusive - We care for and encourage the development of all young people and adults who voyage with us,. we include and integrate all people and groups in our work, especially those who are from disadvantaged backgrounds. Positive & Challenging - We are optimistic in all that we do, finding a way forward and making life happier,. we challenge ourselves to seek the best in all of us and our voyagers, stimulating growth & learning. striving for Social Change We relentlessly pursue cultural. behavioural and institutional change through and for young people in society, and for the maritime environment. Our Purpose: Out on the ocean we empower young people to realise their full potential, supporting them on their journey to adulthood and for some, careers in the maritime sector and the blue economy. Our approach from 2025 is to continue to deliver three significant enhancements to the work of the Trust: l. Young Person's Journey through the three-voyage programme (represented in the visual below). Working towards 80 Exploration, 15 Empowerment and 10 Leadership voyages annually. 41 A YdVIJ& PE¢Sa•J•S Tallships JOURNEY Ik NURTURING & INCLUSIVE 41 POSITIVE & CHALLENGING STRIVING FOR SOCIAL CHANGE YOUT EMeLaYME14r • DUKE OF EDINBURGH LEA>E£SIIIP AWARD Empaj ROYAL YACHTING A550CIATION SXP! • ¥7Td•J • YOUTH SCOTLAND AWARDS WORK EXPERIENCE & TRAINING VAI HWAYS IN IU MAIIII IME 12 Life stage of young people 25 TALL SHIPS YOUTH TRUST REPORT OF THE TRUSTEES AND STRATEGIC REPORT FOR THE YEAR ENDED 28 FEBRUARY 2025 2. Increasing our reach across the UK. The visual below represents our continued increase in our reach. In this reporting year we have voyaged tolfrom: our Portsmouth Hub, Plymouth, BelfasL Glasgow and Ipswich. We continue to increase our presence across the UK. removing the barriers to participation in our programme for young people through more extended voyaging in each region. 41 Tall Ships YOUTH TRUST Engagement opportunities across our UK hubs YT ￿Jb - Aug 2024 SCOTLAMD st Jun- Jul 2024 Green￿k W￿7)• EAsr ewcasU& ug 2024 ORTHERN IREiAND Bell Ipswlch hitehaven ummer 2￿￿4 A￿$ ENGLAND +ip . Swor￿¥ London 2024 EAsr COWES WEEK PortSM￿Jth dotes In 2024 Woekty voyaglry th[￿jghcA)t 202415 27th Juty- 3wd August 2024 TALL SHIPS YOUTH TRUST REPOR T OF THE TRUSTEES AND STRATEGIC REPORT FOR THE YEAR ENDED 28 FEBRUARY 2025 Development puthways tor our crews. volunteers and Portsmouth Hub team resulted in three Mates progressing to Skipper and three Watch Leaders progressing to 2nd Mate. For our Portsmouth Hub team.. 2 staff progressed to Manager roles, and 3 new team members joined us to enhance our capability in fundraising. digital engagement & marketing and operations. Additionally, in this past year we continued to develop pathways for young people into adulthood and employment. The visual below represents the entirety of the young person's pathway with us, from the three-voyage journey including personal development, voyage progression, accreditation and qualifications, contribution to sustainable ocean environment and opportunities for apprenticeships and employment. 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. JOURNEY IFIVOYAOE TSYT iJK Nubs YdUW6 41, PAniwA>S TSYT suppofTea over 1200young people to g¢Jin éxpori@ncg4 & accass to tha water in 2023 NVA Leodevshlp7+ d(rys 10 voyoge51 '. 8+ duys D*•@itsFAng mtsritsme knOwlÈdgè. skii$ 15 voyageslyr P8tson'$ Jwtney & 8xpk)rè Exploration 5+ days 80 voyagesl yr . 5U5toiTh)tye MODufacturr . y$tOiryJtAe F(KA1 . w1￿1n￿r￿￿*& L•3al OUR BENEFICIARIES The young people on our three-voyage programme continue to inspire. They come from across the UK and face significant adversity in their daily lives. Many struggle with their personal circumstances, or unmet needs. including mental and physical health struggles, neurodiversity, learning barriers, and socio-economic disadvantages. Too often they feel defined by their circumstances and limited in their life prospects. The current economic crisis is also exacerbating UK youth unemployment. According to the Off ice for National Statistics, in October 2024: 642,000 16-24-year-olds were unemployed (up by136,000 on 2023). TALL SHIPS YOUTH TRUST REPORT OF THE TRUSTEES AND STRATEGIC REPORT FOR THE YEAR ENDED 28 FEBRUARY 2025 This is contributing to a skills shortage, with many young people lacking the technical, personal, and social skills needed to meet the demands of businesses, especially in the STEM fields vital to the UK'S economic growth. An aging workforce threatens progress. risking setbacks in sustainability and innovation on land and at sea. The legacy of the Covid-19 pandemic has further exacerbated these issues, intensifying the need for targeted, long-term interventions like ours. that build resilience. foster aspiration, and provide meaningful pathways forward. Our work directly addresses these challenges by equipping young people with valuable workplace and life skills, while providing pathways for their development. The young people we support come to us independently or are referred to us by third paty youth organisations, including schools, special needs schools, pupil referral units, and children s services. Our voyages empower young people to step outside their comfort zones, discover hidden strengths, strengthen mind set and develop skills that build confidence and self-esteem for adulthood. Alex: "I struggled with interpersonal skills like socialising and communicating effectively, especially as I have a slight processing delay. This resulted in me becoming anxious in unfamiliar environments and social situations, which badly impacted my confidence and self-esteem. Before TSIT, University was not on my radar. Now l in excited for the future.- Each youn person's journey is unique and allows participants to progress at their own pace. Those who comp ete the pro9ramme emerge as young leaders, mentors, and advocates of our work. Many also pursue volunteering opportunities or careers within the maritime and blue economy sectors, including paid positions at TSYT. The programme runs all year round, offering more challenging experiences on our voyages of Empowerment and Leadership to further develop young people's skills. We use the space in between voyages as a time for reflection, with our young people continuing to build on their personal, social and practical skills development while they are back in their communities, as well as planning for their future engagement with Tall Ships Youth Trust (TSYT) through future voyages, to considering further training and career paths. IMPACT Our monitoring and evaluation processes are based on the Association of Sail Training Organisations, Theory of Change and Ofsted's Personal Development framework for education. This includes young people completing digital surveys at the end of each voyage, alon9 Wlth pre-voyage profiles for Empowerment ond Leadership participants. Young people also receive a crew report highlighting their achievements and areas to focus on in between voyages. We have a long-term goal to complete a longitudinal study with a research partner (with expertise in the fields of outdoor learning and sport). This will help us articulate how upstream investment in our programme improves outcomes for young people and therefore reduces the downstream impact and the need for social, health and justice services, resulting in a saving to society. Since the three-voyoge programme was introduced in February 2023, more than 1,200 young people have voyaged with us each year. During 2024125, 82YLb of the young people we supported were experiencing disadvantage, 58Vo were mole, 42/. were female, and almost 20 /. identified as belonging to the global majority, emphasising our dedication to serving diverse and marginalised communities TALL SHIPS YOUTH TRUST REPORT OF THE TRUSTEES AND STRATEGIC REPORT FOR THE YEAR ENDED 28 FEBRUARY 2025 2024125 outcomes for young people include: Just under 900 Royal Yachting Association certificotes were awarded, including 624 Start Yachting, 249 Competent Crew and 6 Watch Leader awards. January 2024 saw TSYT'S first cohort of RYA Day Skipper Theory participants, with 19 successfully completing the course and passing their final exam. More than 140 young people achieved their DofE expeditions and Gold Award residentials. > 25 young people took part in work experience placements with TSYT, including students from local schools and colleges and on thewater placements for thosetraining as Watch Leaders. 20 young people took part in Maritime engagement visits to Harland & Wolff and Babcock shipyards for career development days > 10 young women attended the International Maritime Organizations, International Day for Women in Maritime symposium at their UN Headquarters in London. yron (17). Com his apprentices leted EXP, EMP and LEA voyages and rKently completed the first year of ip with Land and Water Byron is a three-voyage Programme success story, who was so inspired after his first voyage, he returned to progress and although only 14 at the start of our pilot Leadership voyage in 2024, (turned 15 before the end), his mature outlook stood him well with his peers. By 15 hed completed work experience with a former Tsyt sailor turned harbour master ot Chichester harbour. knew he wanted to pursue en left school at16 and secured his Land and Water apprentices ineering and loved the water, 'My experiences with TSYT set me apart from the other candidates. Meaning I secured my apprenticeship at 16 when I completed my GCSES. My apprenticeship is literally based where land and water meet from the sea to rivers and lakes. My employers have been amazing and are supporting me on my next steps to a degree and hopefully further TALL SHIPS YOUTH TRUST REPORT OF THE TRUSTEES AND STRATEGIC REPORT FOR THE YEAR ENDED 28 FEBRUARY 2025 ACHIEVEMEMfs AND PERFORMANCE Youth Development & Outdoor Learning During the period covered by this report, our Youth Development and Outdoor Learning programme continues to serve over 1200 young people a year, maintainin9 our mission with 80/. from disadvantaged backgrounds considering a wide range of influencing factors from young carers, young people at risk of offending, neurodiversity and postcode poverty. As TSYT expands its reach across the UK our 75°A returning client base continue their commitment to regular voyaging with some clients increasing to multiple voyages (Cross Keys Homes, eight,. Naval Children's Charity, four. Thames Valley Police, four) and multi le vessel s (e.g. Jewish Free School Combined Cadet Forces and Cardinal Newman Catholic School our boat charters). With growth areas around Belfast, Greenock and Plymouth, new clients are enabling us to build our programme further beyond our home port, extending our operations elsewhere in areas with high demand together with higher concentrations of disadvantage. As an Approved Activity Provider for Duke of Edinburgh, we continue to see growin interest in completing the Gold Award residential onboard our voya9es (voyages of 4+ nights qualily), resulting in over 100 youn% people completing their qualification with TSYT as part of it. Gold Expeditions have previously been eld onboard the Ketch and with the end of activities for this vessel, these octivities will now move to the Challengers in line with expedition guidelines. In addition, we are expanding our skills set through the completion of Registered and Accredited Practitioners with the Institute of Outdoor Learning, together with extending our RYA offer. This includes RYA Day Skipper Theory courses, with our first two cohorts successfully completing their training by February 2025. Following the success of the youth Fastnet crew in 2023, 2024125 winter saw the start of the training and selection process for Fastnet 2025 as part of our new Ocean Racing Pathway. The initiative included two weekends each month throughout the winter. including racing drills, spinnaker training and team building in the lead up to the selection process taking place in the next reporting year. As part of our annual programme, there is further growth in the 'space-in-between' through event en ement and building our network within the wider maritime sector. In this reporting year, this has inc ed shipyard visits with Babcock in Rosyth and Harland & Wolff in Belfast, and engagement with the International Maritime Or anizations. International Day for Women in Maritime symposium. Furthermore, we also engage with relevant audiences at regional and maritime careers events including Seawork, Southampton International Boat Show and city-wide events for young people in our home hub, Portsmouth. Fleet Activity and Maintenance Our current fleet (four 72-foot Challengers and one 55-foot Ketch) were busy delivering153 voyages. The three-voyage programme is now well embedded and this year 75 Exploration, 14 Empowerment and 4 Leadership voyages were delivered. A number of Hubs were visited includin with extended periods operating out o P Plymouth. Swansea, Belfast. Greenock, Ipswich and Newcastle Belfast and Greenock. Challenger 4 ventured south over the winter to the Canaries including two Youth Voyages around the Canaries. Three Challengers took part in the Round the Island Race, one of which was the culmination of a Youth Voyage. Challenger 2 was taken out of active operations due to an incident in the Solent, returning to the programme approximately seven weeks later. All voyages during this period were successfully reallocated across the fleet or postponed to a later date. TALL SHIPS YOUTH TRUST REPORT OF THE TRUSTEES AND STRATEGIC REPORT FOR THE YEAR ENDED 28 FEBRUARY 2025 2024125 saw the last year of operation for Tenacity of Bolton (our ketch). After 10 years of eff ective service, it has been decided that she does not fit with our future plans of operation and the costs to maintain and operate her over the nexi 5 years can be better utilised in other ureas. Initial implementation of the medium-term maintenonce plan (to keep the Challengers operational until at least 2040) has started and general investment in the fleet continued, in particular with upgrades to navi9ational instruments with support from B&G, new GMDSS communications equipment as well as two sails. In 2025126 the majority of the rest of the Challenger sails are due to be replaced and the final vessel is due to be fitted with new B&G equipment. Larger refit works are scheduled for each Challenger from 2026 onwards. Options to bring another Challenger sized vessel online to meet demand were pursued throughout the year, resulting in Challen9er 5 joining our fleet later in 2025. A significant achievement for our Operations and Fleet Readiness team. Saleguarding and Incidents The now embedded practice of the safety forums monthly and quarterly reviews has created a more robust process of reporting, reviewin9 and developin best practice for safeguarding, and crew and vessel incidents across the organisation. This now Inc udes the reporting of near misses in all areas to improve standards and create learning and development opportunities. Safeguarding remains a priority with in-person training at annual start of season training and regular updates throughout the season for returning crews. We maintain approximately 100 DBS checks per year showing commitment to the safe recruitment and retention of volunteers, freelancers and employed members of the team. The cycle of DBS renewals is maintained and remains compliant with DBS standards. Raising Awareness and Increasing Our Reach We continue to work hard to remove the barriers which prevent young people from accessing our youth development programme. To support this, we have established regional hubs in Plymouth, Swansea, Belfast, Whitehaven, Greenock, Newcastle and Ipswich. and run voyages from these locations for parts of the year, making it easier for young people from all over the country to access our programme. To raise our profile in these locations, we are using our digital platforms for targeted outreach, and have run events from key locations, including Plymouth. Belfast and Greenock, to engage with youth organisations, potential funders, and members of the public locally. Our Digital, Engagement and Marketing team continue to drive growth in terms of our digital presence. The 2024125 financial year saw a total of 91K users visit our website, representing a139/. increase from 38K in 2023124. Of these, 20/0 arrived via organic search and 19°A via organic social, underlining the growing value of people actively finding Tsyt through search engines and highlighting the role of TSYT'S social media content in driving awareness and engagement. In the same period, our total organic reach across social media channels grew to 317K. As of February 2025, our combined organic social media audience across TikTok, Linkedln, Facebook, and Instagram reached 14,240 followers, a 21Yts increase from 11,729 in February 2024. Our Digital, Engagement and Marketing team will continue to focus on building the TSYT digital community, with a focus to engage and communicate with young people, their decision mokers, members, donors, alumni and key stakeholders. 2024125 was another effective year in terms of audience enga9ement, particularly during the summer months, with events including our charity partnership with British Classic Week and Cowes Week. The GSA Group also held their annual Student Living Sailing Regatta in support of Tall Ships Youth Trust for the second year running, raising over £9,000 which funded an explorotion voyage for 10 young people from Addey and Stanhope in London. Off the back of our first ever youth crew competing in the Fastnet race in 2023, we also launched our 2025 Ocean Racing Pathway Fastnet Campaign, engaging more than 40 young people, with 19 going on to compete, and the entire campaign raising almost £140,000. 10 TALL SHIPS YOUTH TRUST REPORT OF THE TRUSTEES AND STRATEGIC REPORT FOR THE YEAR ENDED 28 FEBRUARY 2025 Fundraising The economic climate continues to be challenging but despite this, we achieved a total of £1.2m in fundraising income during 2024125, (compared with £l.Im in 2023124). This includes day-to-day fundraising income of £773k, of which more than £430k was raised from 122 grant making trusts and foundations, as well funds raised from individual donations, events, in-memory donations and corporate support. In addition to our day-to-day income, we secured £500k towards the acquisition of an additional vessel (Challen er 5) which we plan to operate from March 2026 and secured a pledge of £550k for the purchase o Challenger 6. which we intend to purchase within the next 2-3 years. This is an incredible achievement and testament to the significant support we receive from our loyal funders and donors, many of whom support us year on year. In addition, we have received notification of a legacy from the estate of Mr Raymond Trubshaw, a former voyager from Scotland. The mechanism ond timin for disbursement for this legacy to Tsyt are still to be communicated by the executors. Accordin y, the trustees have taken the prudent position of not including the income or receivable in our 2024 25 financial accounts. We hope to receive clarification from the executors of their intent in the near future. We would like to say thank ou to all of the trusts and foundations, companies, individuals and members who continue to und and support our work. This includes the Y C Chan Charitable Foundation, the Hargreaves Foundation, John Lyon's Charity. The Corporation of Trinity House, The Swire Charitable Trust. The Hugo Halkes Charity and the family of Eddie Dunhill. We would like tothank the Worshipful Companyof Shipwrights and the Gosling Foundation in particular for their significant support of our mission to increase our sea-going capacity. Tall Ships Youth Trust is a signed-up member of the Fundraising Regulator. The Trust is committed to ensurin9 ethical fundraising practices, and Trustees regularly confirm this is the case. We received zero complaints this year about our fundraising. Recommendations through Three-voyage Programme Pro ression through the three-voyage programme is supported by a recommendation process, ena ling young people to move to the next appropriate step in their Journey, through Empowerment and Leadership voyages. Commencing in 2024. there is also now the potential to join the Ocean Racing Pathway and to train and apply for a place on Fastnet 2025 and other events surrounding maritime careers opportunities. In 2024125, 227 young people were recommended to return for Empowerment voyages and 87 for Leadership voyages. Beyond the three-voyage Programme we continue to sup ort our young people on their journeys through follow up engagement opportunities in careers, undraising and work experience. Volunteering Pathways into volunteering are varied and estoblished with TSYt. In 2024125 158 persons were recommended to join us as a volunteer (121 as Trainee Watch Leader (TWL), 30 as Watch Leader and 7 as Youth Mentor) with 77 (49/.) of these successfully completing the application process. For our young people under 16, they can return to voyage and support the role within the watch onboard, becoming a TWL when they turn sixteen. In addition. our Young Ambassadors cohort, commencin9 in 2023, continues to grow and we have a number ofyoung people supporting our events and publications through their own journey experiences to guide and inform others. As a result of extending our reach, we are seeing more volunteers joining us throu9h events, talks and presentations through sailing clubs and those who are on RYA trainin courses with members of our freelance teams who are RYA instructors. This additional source of vo unteers is bringing a wealth of expertise in youth work, voyaging and role models to grow our team and support our work. TALL SHIPS YOUTH TRUST REPORT OF THE TRUSTEES AND STRATEGIC REPORT FOR THE YEAR ENDED 28 FEBRUARY 2025 RISK REVIEW The major potential operotionol, reputation and financial risk profiles to which the Trust is exposed, as identified by the Board, are reviewed on an annual basis and systems enhanced to mitigate those risks. They fall into five categories, as described below.. Resource Insufficient number of competent and trained crewlstaff. Insufficient number of seagoing volunteers. Inability to attract and retain crewlstaff, with competitive remuneration and flexible working. Loss of key members of crewlstaff threatens effective voyage operations, donor management and growth plans. Funding Cashflow insufficient to operate the charity. Charity's net assets insuff icient to cover restricted funds (note19). Asset-to-loan ratio inade uate. Voya e income, routine fundraising and special initiatives fail to meet targets. Insufficient new unds identi led to meet growing need. operational Global event impacts on voyage programme. Certification failure of a vessel threatens programme. Crew shortage, medical, illness, or defects preventvesselvoyaging. Incident orserious accident to crew, staff or the public while operating the vessels. Incident at sea damages a vessel. Hub closure due to an onshore incident. Reputational Safeguarding incident with client, YP, voyager or team member as the Trust grows across the UK. Incident at sea leading to bad publicity- Financial sustainability and fundraising ethical risk. Failure of IT system security, CRM. GDPR and data breach. Developmental Development work fails to achieve targets. Hub facilities ineffective. Inability to secure next fleet vessel. For all these risks, and their elemental constituents, mitigation has been put in place. Our Finance, Audit and Risk Committee regularly review our Risk Register, to ensure appropriate mitigation measures are in place and monitored. In turn. our Board support and monitor this process. Fundraising and Resourcing are uncertain and therefore higher risL given environmental and economic conditions in the UK. The residual risk at 28 February 2025. for the other risk areas. is assessed to be low. ENVIRONMENTAL POLICY Our Sustainability Working Group (SWG). led by our management team, is developing our pathway towards ISO accreditation in environment sustainability over the next few years. On our voyages, alongside and on land, our young people are the workforce driving ocean sustainability and protection of our planet for future generations to come. We have committed to the RYA Green Blue Pledge to Respect, Enjoy and Protect our inland and marine waters, wildlife and habitats. We have also committed to supporting a sustainable ocean project with the IMO throughout our thousands of miles voyaging around the UK and internationally 12 TALL SHIPS YOUTH TRUST REPORT OF THE TRUSTEES AND STRATEGIC REPORT FOR THE YEAR ENDED 28 FEBRUARY 2025 STRUCTURE, GOVERNANCE AND MANAGEMENT Tall Ships Youth Trust is a choritable 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 ore the directors of the company and ore elected by resolution of the company at a generol 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. During the financial year it was passed by the Board of Trustees to amend the objects of the charity, to bring them more upto date and fit for purpose to align with the work carried out by the charity, together with some changes to trustee indemnity provisions and dissolution provisions. These chonges were approved by the Charity Commission and then presented to the membership at the AGM, by way of Special Resolution, and passed on 24 March 2025. The objects alteration was lodged ot Companies House on 8 July 2025. The revised Articles were lodged at both Companies House and the Charity Commission on14 July 2025. 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 ACEvoINcvoIcharity Commission sponsored 'Code of Charity Governance, and have been applying considerable effort towards full compliance. In terms of leadership, one new Trustee joined the Trust in this reporting year, following screening and selection on the Board's behalf by a Nomination and Remuneration Committee. This consists of four Trustees includin the Chairman. Candidates are invited to meet at least Members of the Committee and the Chie 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 TrUSt￿s. The programme includes visits to the Trust's Portsmouth hub and main operating base, introduction to new youth initiatives, coverage of the charitws aims and how they are being fulfilled,the role ond duties ofthe 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 ond Supporters. Use of virtual technology for our AGM, combined with a physical meeting, ensured a high level of engagement across our members. This year, we were delighted to appoint Zafar Rushdie to the Trustee Board. With more than 20 years of experience in publicity, events, and marketing, Zafar brin s a wealth of expertise, and we look forward to the valuable contributions he will make. We bid a heart elt farewell and extend our sincere thanks to trustee Mary Verghese-Dipple. Since joining the Board in January 2023. Mary has played a vital role, generously giving her time and sharing her valuable legal expertise. We delegate responsibility to the Finance. Audit and Risk Committee for reporting to the Boord about financial matters including forecast cash flows and our risk profile. The Committee considers the financial statements and risk register, 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 the on-shore and off-shore operations including youth development, voyaging, income generation and business functions. 13 TALL SHIPS YOUTH TRUST REPORT OF THE TRUSTEES AND STRATEGIC REPORT FOR THE YEAR ENDED 28 FEBRUARY 2025 FINANCIAL REVIEW During the year the Trust enerated overall income of £1,872,407 (2024 - £1,893,250). The majority £1,177,591 (2024_ £1,104,351) 8eing donations, legacy income and membership income from supporters. Direct voyage fees of £679,451 (2024 - £781,382) were received from the voyage programme and combined with restricted bursary funds of £971,119 (2024 - £699,227) resulting in £1,650,570 voyage income {2024_ £1,480,609) for the trading subsidiary Tall Ships Limited to run voyages throughout the year. Tall Ships Limited generated a surplus in the year of £354,572 (2024- £322,700). During the financial year, the charity was notified of a legacy of potentially up to £650,000 from the estate of Mr Raymond Trubshaw (a former voyager with the charity) which may accrue to TSYT. The trustees are continuing to engage with the executors of that estate to ascertain the amount and timing of funds which might accrue to the charity- The trustees have not included this income in the financial statements for the year under review. as it does not meet the recognition criteria. The consolidated group result for the year was a deficit on general funds of £155,398 (2024 - surplus £136,933), together with a deficit on restricted voyage funds of £5,105 (2024 - deficit £91,424). Overall, the unrestricted funds reduced to £222,491 (2024 increased to £377,889), however the restricted and bursary funds reduced from £831,034 to £825,929. There was no change in the small balance of endowment funds. The group net asset position was therefore £1,099,552 (2024 £1,260,055) and the Trust entity position decreased from £1,329,343 to £1,119,031. The overall cash flow position was a reduction in cash balances of £43,797 to £148,942 (2024- reduction of £49,081). Whilst the cash flow and cash balances have improved significantly since the year end, the Chority continues to manage cash balances closely to ensure that they are adequate to cover likely obligations under restricted donation reserves. The Charity has a plan in place to continue to address the restricted fund balance, led by the Finance. Audit & Risk Committee.The committee meets re ularly and continues to monitor cash flow forecasts. cash balances, restricted balances and indebte ness. The Trustees believe that the Charity's cash balance and future cash flow projections are such that there is no material risk of the chority not meeting all its obligations (restricted funds and otherwise) for the foreseeable future. FUTURE FINANCIAL PROSPECTS AND RESERVES POUCY Our current operating model is effective, producing a cashflow surplus under normal trading. We continue to repay historic loan debts following the disposal of the brig. We have restructured the loan agreement with The Corporation of Trinity House with repayment plans over longer terms. We are very grateful for their continued support and understanding. The final payment of the liability to the Merchant Naval Officers Pension Fund was made in the prior year, further improving our debt position. Our new Strategic Plan is in full operation, covering the 5-year period 2023-2028. We have a strong and diverse Board of Trustees alongside competent, trained and motivated on-shore and off-shore staff, led by a CEO experienced in fundraising, commercial business and leading change. As part of this work, we have progressed with our plan to raise suff icient funds to acquire an additional vessel to increase our capacity and to meet the demand for our services. Challenger 5 has been added to our fleet and will be operational from 2026. This will further enhance our sustainable financial position going forward. The Trustees. long-term objective is to build the Trust's reserves to protect our charitable mission against unexpected events. We have therefore set a medium-term goal of building ovailoble 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, articularly those who are from disadvantaged backgrounds. our net operating income, and our undraising capacity. 14 TALL SHIPS YOUTH TRUST REPORT OF THE TRUSTEES AND STRATEGIC REPORT FOR THE YEAR ENDED 28 FEBRUARY 2025 STATEMENT OFTRUSTEES. RESPONSIBIUTIES The Trustees, who are also Directors of Toll 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 United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). Company law requires the Trustees to prepare financial statements for each financial year. 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, includin9 the income and expenditure, of the charitoble group for that period. In preparing these financial statements, the Trustees are required to- > select suitable accounting policies and then apply them consistently,. > observe the methods and principles in the Charities SORP 2019 (FRS102); mokejudgements and estimates that are reasonoble and prudent; > state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements,. and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the charitable group will continue in operation. The Trustees are responsible for keepin9 ade uate accounting records that disclose with reasonable accuracy at any time the financial position of t e 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 compony and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. statement as to disclosure of information to Auditors In so far as each of the Trustees are aware:_ > there is no relevant information of which the charitable company's auditors are unaware,. and > the Trustees have taken all necessary steps they ought to have taken to make themselves oware of any relevant audit information and to establish that the auditors are awore of that information. This report, which also meets the requirements of the Directors. Report for company law purposes has been prepared in accordance with the special provisions applicable to small companies and the charities SORP 2019 (FRS 102) Auditors Moore (South) LLP have ex reappointment for the next ON BEHALF OF THE TRUSTEES ressed their willingness to continue in off ice, and a resolution for their inancial year will be put to the Annual General Meeting. David Aisher Chairman of the Board of Trustees Dated: 24 December 2025 15 TALL SHIPS YOUTH TRUST REPORT OFTHE INDEPENDENT AUDITOR FOR THE YEAR ENDED 28 FEBRUARY 2025 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 February 2025 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 preparotion 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: give a true and fair view of the state of the group's and the charitable parent companys affairs as at 28 February 2025, and of the group's incoming resources and application of resources, including its income and expenditure, for the year then ended: have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and,- have been prepared in accordance with the requirements of the Componies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAS (UK)) and applicable low. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit ofthe 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. Emphasis of Matter- material uncertainty relating to going concern We draw your attention to the going concern accounting policy on pages 24 and 25 in the financial statements. The Trustees have implemented a plan to alleviate the cash shortfall on restricted funds and continue to manage the financial commitments of the Charity as they fall due. These events and conditions, along with the other matters as set out in the policy indicate that a material uncertainty exists that may cast significant doubt on the group's 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. 16 TALL SHIPS YOUTH TRUST REPORT OFTHE INDEPENDENT AUDITOR FOR THE YEAR ENDED 28 FEBRUARY 2025 other intormation The other information comprises the information included in the trustees. annual reporL 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 finonciol statements does not coverthe other informotion and, except to the extent otherwise explicitly stated in our reporL we do not express anyform 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 finoncial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact 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 understonding of the group and the choritoble porent compony ond their environment obtained in the course of the audiL 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_. adequate accounting records have not been kept bythe charitable parent company, or returns adequate for our oudit hove not been received from bronches not visited by us= or the charitable parent companys financial statements are not in agreement with the accounting records,. or certain disclosures of Trustees, remuneration specified by law are not made,. or we have not received all the information and explanations we require for our audit: or the Trustees were not entitled to prepare the consolidated financial statements in accordance with the small companies, regime and take advantage of the small companies. exemptions in preparing the Trustees. Report and from the requirements to prepare a Strategic Report. Responsibilities of trustees As explained more fully in the trustees. responsibilities statement set out on page14 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 enoble the preparotion of consolidoted 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. os 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. 17 TALL SHIPS YOUTH TRUST REPORT OFTHE INDEPENDENT AUDITOR FOR THE YEAR ENDED 28 FEBRUARY 2025 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 f urther description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at- www.frc.org.uklauditorsresponsibilities. 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. Explanation as to what extent the audit was considered capable ot detecting irregularities. including traud The objectives of our audit in respect of fraud. are- to identity and assess the risks of material misstatement of the financial statements due to fraud- to obtain suff icient 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 responsibilityfor 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.. The engagement partner selected staff for the audit who had prior knowledge of the client and who had the required competence and skills to be able to identify or recognise non-compliance with laws and regulations. We assessed the risk of irregularities as part of our audit planning, and ongoing review, including those due to fraud, management override was identified as a significantfroud risk. This is due to the ability to bypass controls through inappropriate expenditure and accounting policies adopted. Revenue recognition was also identified as part ofour audit planning as a significant risk to the audit. Although the processing and recording of transactions is straight fo￿ard, there is the risk that revenue might not be recognised within the correct accounting period. Some income received is restricted in its use and a significant risk was identified regarding the correct classification of income between restricted and unrestricted funds and that the expenditure against this income was in line with any specified restrictions. 18 TALL SHIPS YOUTH TRUST REPORT OFTHE INDEPENDENT AUDITOR FOR THE YEAR ENDED 28 FEBRUARY 2025 We obtained an understanding of the legal and regulatory requirements applicable to the charitable company and we considered the most significant to be the Companies Act 2006, the Charites Act 2011, the Charity SORP, UK financial reporting standards as issued by the Financial Reporting Council and UK Taxation legislation. We considered how the charitable company complies with these requirements by discussions with management and those charged with governance. We inquired of management and those charged with governance as to any known instances of non- compliance or suspected non-compliancewith laws and regulations. Consideration was also made of the internal controls in place to mitigate the identified risks. We assessed the control environment, documenting the systems, controls and processes adopted. The audit approach incorporated a combination of controls where appropriate, analytical review and substantive procedures involving tests of transactions and balances. Any irregularities noted were discussed with management and additional corroborative evidence was obtained as required. The consolidated financial statements of the group incorporate the results of the subsidiary company. Moore (South) LLP are auditors to the whole group and the same approach has been adopted to the subsidiary company as is appropriate to that entity. In response to the risk of fraud through management override we: performed analytical procedures to identity any unusual or unexpected relationships,. tested journal entries to identify any unusual transactions- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias- reviewed transactions with related parties. in particular the management charges and transactions with group entities- reviewed the disclosures within the financial statements to ensure they meet the requirements of the accounting standards and relevant legislation; and tested a sample of invoices to ensure expenditure was for bona fide expenses and has been appropriately authorised. In response to the risk of incorrect recognition of income we= performed analytical procedures including comparing revenue received to the prior period and to budgets; vouched a sample of donations and grants received in the year to supporting documentation,. and tested a sample of gifts and donations received around the balance sheet date to agree income has been included within the correct accounting period. In response to the classification of income between restricted and unrestricted we.. agreed a sample of grants and donotions recorded in the nominal ledger to source documentation to ensure any restrictions were correctly identified, agreed a sample of expenses incurred to ensure that they had been allocated to the appropriate fund,. and obtained and reviewed fund analysis workings to ensure that the calculations were correct and agreed to the accounting records. 19 TALL SHIPS YOUTH TRUST ## **REPORT OF THE INDEPENDENT AUDITOR FOR THE YEAR ENDED 28 FEBRUARY 2025** 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 noncompliance. 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. ## **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. 9 St Johns Place Newport Isle of Wight PO30 1LH Sue Lucas (Senior Statutory Auditor) for and on behalf of Moore (South) LLP Chartered Accountants Statutory Auditor 24 December 2025 20 TALL SHIPS YOUTH TRUST CONSOLIDATED STATEMENT OF FINANCIAL ACTIVITIES INCLUDING INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 28 FEBRUARY 2025 Unrestricted Funds Restricted Endowment Funds Funds Total Total Funds Year to Funds Yearto 2025 2025 2025 281212025 291212024 Note Income and Endowments Irom: Donations and legacies Investments Charitable activities 623.587 13.354 679 451 554.004 2,011 1,177,591 1,104,351 15,365 7,517 679 451 781 382 Total income 1316392 556 015 1872 407 1 893 250 Expenditure on: Raising funds Charitable activities 392.517 1079 273 392,517 360,721 1640 393 1487 020 561 120 Total expendlture 1,471,790 561,120 2,032,910 1,847,741 Net movement in funds (155,398) (5,105) (160,503) 45,509 Fund balances brought forward At l March 2024 377.889 831,034 51,132 1,260,055 1,214,546 Fund balances ¢arrled lotword At 28 February 2025 222,491 825,929 51.132 1.099,552 1.260,055 The accompanying accounting policies and notes form an integral part of these financial statements. All operations of the Trust and its subsidiories are clossed os continuing. There was no movement on the endowment funds in either the current or prioryear and so no separate income and expenditure account is included. 21 TALL SHIPS YOUTH TRUST BALANCE SHEErs AS AT 28 FEBRUARY 2025 Consolidated Tall Ships Youth Trust 281212025 291212024 281212025 291212024 Fixed assets Tangible assets 1.606.214 1,745,730 1,606,214 1,745,730 Current assets Stocks Debtors Investments Cash at bank and in hand 8,471 138,357 9,081 86,111 6,642 192 739 250 123,133 250 70,497 6,642 146 057 12 13 148 942 295,770 294,573 200,365 223,446 Creditors: amounts talling due within one year 14 607 802 {500 063 492 918 359 6481 Net current liabilities 312 032 205 490 292 553 136 202 Total assets less current liabilities 1.294.182 1.540,240 1,313,661 1,609,528 Creditors: amounts talling due after more than one year 15 194 630 280 185 194630 280 185 1.099,552 1,260,055 1,119,031 1,329,343 Capitallunds Endowment funds 16 51,132 51,132 51,132 51,132 Income funds Restricted funds Revaluotion reserve other unrestricted funds 17 18 18 825,929 831,034 825,929 831,034 1,504,475 1,620,204 1,504,475 1,620,204 1281 984 1242315 1262 505 1 173 027 1,099,552 1,260,055 1,119,031 1,329,343 The financial statements were approved by the Trustees on 24 December 2025 David Aisher Chairman of the Board Charity Number: 314229 Compony Number.. 00567460 The accomponying occounting policies and notes form on integral port of these financial stotements. TALL SHIPS YOUTH TRUST CONSOLIDATED STATEMENTOF CASH FLOWS FOR THE YEAR ENDED 28 FEBRUARY 2025 281212025 Group 291212024 Group Cashllow from operating activities Net cashflow from operations See Below Total cashflow from operating activities Cashlk*w from Investlng uctlvltles Interest received Payments to acquire fixed assets 15,365 7,517 Total cashflow on Investing activities Cash from financing activities Cash inflows from new borrowing Repayments of borrowing 50,000 Net cosh provided by (used in) financing activities (35,555) 95 556) Net Increasel{decrease) in cash and ￿$h equivalents (43.7971 (49,081 } Cash and cash equivalents at l March 2024 192 739 241 820 Cash and cash equivalents at 28 February 2025 148,942 192,739 Cash and cash equivalents consist ot. Cash at bank and in hand 148 942 192 739 Cash and cash equivalent at 28 February 2025 148,942 192,739 Reconciliation ol income to net cashflowfrom operations: 281212025 291212024 Net income resources Depreciation charges Investment income Change in value of investments (Increase)Idecreose in stocks (Increase)Idecrease in debtors Increasel(decrease) in creditors (160,5031 141,685 (15,365) 6,642 610 {52,246) 45,509 141,733 (7,517) {518} (301} (19,5621 120 006 Net cash inflow from operations (21,438) 39,338 Analysls of ¢hunges In net debt 11312024 Cashflows 281212025 Long term borrowing Bank loan Loar)s from Trustees and funders (115,741) 250 000 55,555 20 000 (60,1861 270 000 Total liabilities Bank and cash balances (365.741 > 192 739 35,555 (330,186} 148 942 Total net debt (173,002) (8,242) (181,244) 23 TALL SHIPS YOUTH TRUST PRINCIPAL ACCOUNTING POLICIES FOR THE YEAR ENDED 28 FEBRUARY 2025 ACCOUNTING POLICIES The principal accounting policies are summarised below. The accounting policies have been applied consistently throughout the period. Ilnf ti untin rm nv nti 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 2 and 4 respectively of these financial statements. The charity constitutes a public benefit entity as defined by FRS102. The financial statements have been prepared in accordance with the charitable companys Articles of Association, the Companies Act 2006, FRS102"The Financial Reporting Standard applicable in the UK and Republic of Ireland" ("FRS102") and the Charities SORP "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Re orting Standard applicable in the UK and Republic of Ireland (FRS 102)" (effective l January 2019 The charitable company is a Public Benefit Entity as defined by FRS 102. 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 charitable company and rounded to the nearest £1. Goin Concern The charity's revenues derive principally from various forms of donation and voyage income. Since the end of COVID, voyage income has picked up encouragingly. However, following the commencement of hostilities in Ukraine and a general weakening of UK economic sentiment, donations across the UK charitable sector have been weaker. The charity has not been immune from this. Notwithstanding this, since the year end the charity received a £1 million pledge from YC Chan Charitable Foundation of which £400,000 was received in November 2025 and the balance is receivable in 2026 and 2027. In addition, the charity was notified of a legacy of potentially up to £650,000 from the estate of Mr Raymond Trubshaw (a former voyager with the charity) which may accrue to TSYT. The trustees are continuing to engage with the executors of that estate to ascertain the amount and timing of funds which might accrue to the charity. The Charity has a deficit of assets making up its unrestricted funds (see note 18). This stems from the sale of the brig -Stavros- in 2017 for £350,000, when the book value was £3.5 million. This resulted in a substantial loss and write-down of the charity's general reserves in that year. This write-down resulted in the charity being in technical breach of trust with donors as its restricted fund balances were not fully covered by cash. The Charity informed the Charity Commission of this event at that time and has operated with restricted funds not fully covered by cash since then. As of 28 February 2025, the restricted fund balance was £825,929 and cash balances were £148,942 leading to a deficit of £676,987. As of 30 November 2025, the restricted fund balance was £706,152 and cash balances (net of a short-term loan repayable in February 2026) were £398,757, leading to o reduced deficit of £307,395. The Charity manages the restricted fund balance by monitoring the usage of individual restricted funds, management of cash flow and cost containment. The Charity ensures that providers of restricted funds are updated wherever appropriate. Historically, the incidence of restricted funds needing to be repaid to donors is extremely low (in both number and value). Furthermore, no funds have been required to be repaid to donors since the end of COVID. Management has a plan to reduce the restricted fund balance. This includes seeking to reclassify long- standing unspent restricted funds and engaging with other donors where the restrictions are difficult to meet (for example due to geographical constraints). The YC Chan Charitable Foundation donation will contribute to the reduction of the restricted fund deficit in the coming financial years. 24 TALL SHIPS YOUTH TRUST PRINCIPAL ACCOUNTING POLICIES FOR THE YEAR ENDED 28 FEBRUARY 2025 The Trustees have received legal advice that their approach with respect to restricted funds is appropriate. The Charity has an operating subsidiary, Tall Ships Limited. which runs the voyage programme. Tall Ships Limited had a net liability at the year-end of £64,416 (down from a net liability in 2024 of £418,988) The Charity provides ongoing financial support to Tall Ships Limited of £44,937 (2024: £349,697) by way of an inter-company loan, which it has confirmed itwill not seek repayment ofwithin the next12 months. The Charity's Finance, Audit and Risk Committee meet regularly to monitor cash flow forecasts, cash balances, restricted fund utilisation, and indebtedness. The Trustees believe that the Charity's cash balance and future cash flow projections are such that there is no material risk of the charity not meeting all its obligations (restricted funds and otherwise) for the foreseeable future. Accordingly, the accounts are prepared on a going concern basis. Basis of Consolidation The group financial statements consolidate those of the charitable company and of its subsidiary undertaking. The results of the choritable company'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 f ull. A separate statement of financial activities and income and expenditure account for the charitoble company itself are not presented because the charitable company has taken advantage of the exemptions afforded by the Companies Act 2006. FUNDACCOUNTING Unrestricted funds are available for use at the discretion of the Trustees in furtherance of the general charitable objectives, 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 receivoble, 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 of the choritable company's entitlement. 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. 25 TALL SHIPS YOUTH TRUST PRINCIPAL ACCOUNTING POLICIES FOR THE YEAR ENDED 28 FEBRUARY 2025 Life subscriptions are counted in full when received. Donations and any associated income tax recoveries when donated under gift aid are credited as income when the amounts are received. Activitiesfor Generating Funds Revenue from activities such as special fundraising events is recognised in the period in which the activity or event occurs. Investment income Investment income is recognised when receivable. Incoming Resources f rom 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. 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- Costs of raising funds includes details of the costs in relation to fundraising events, following up donations, and seeking voluntary contributions and donations from supporters, and available sources; > Expenditure on charitable activities includes the costs of the charity's work with young people, sailing trips and other residential activities including all planning activities. maintenance of the Charitys assets, preparation and follow up: and >Tr Other expenditure represents those items not falling into the categories above. >Tr 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 off ice costs, governance costs,odministrative 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 bosis 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 6. 26 TALL SHIPS YOUTH TRUST PRINCIPAL ACCOUNTING POLICIES FOR THE YEAR ENDED 28 FEBRUARY 2025 TANGIBLE FIXED ASSEfs AND DEPRECIATION Individual assets costing £250 or more are capitalised. Yachts are stated at valuation and other tangible fixed assets are stated at cost, net of depreciation and any impairment losses. 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. Any excess depreciation on revalued assets is transferred to the revaluation reserve on an annual basis. The periods generally applicable are.. - Yachts Computers and Off ice Equipment Display and Exhibition Equipment 15 years Straight line 5 years Straight line 5 years Straight line The gain or loss arising on the disposal of an asset is determined as the difference between the sales proceeds and the carrying value of the asset. and is recognised in the statement of activities. As part of the periodic review of asset useful lives conducted at each reporting date, the charitable company reassessed the estimated useful life of the Challenger yachts. Effective l March 2023, the Challenger yachts have been determined to have a remaining estimated useful life of15 years. IMPAIRMENT OF FIXED ASSETS At each reporting date, the charitable company reviews the carrying amounts of its tangible 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 (if any). 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. 27 TALL SHIPS YOUTH TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 DEBTORS Trade and other debtors are recognised atthe settlement amount due. Prepayments are valued ot 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 reliabty. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due. RETIREMENT BENEFITS Delined Contribution Scheme The pension costs charged in the period represent the amount of the contributions payoble to the scheme in respect of the occounting period. Defined Benefit Scheme Some former employees of the Trust's active subsidiary, Tall Ships Limited, were members of a multi- employer 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. OPERATING LEASE AGREEMENTS Rentals payable and receivable under operating leases are charged as an expense to the SOFA on a straight-line basis over the period of the lease. TAXATION The charity is an exempt charity within the meaning of schedule 3 of the Charities Act 2011 and is considered to pass the tests set out in Paragraph I Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. FINANCIAL ASSETS AND LIABIUTIES 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 charitoble companys 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 diff er 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 ond future periods where the revision affects both current and future periods. 28 TALL SHIPS YOUTH TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 COMPARATIVE STATEMENT OF FINANCIAL ACTivmES Total Funds Unrestricted Restricted Endowment Funds Funds Funds 2024 2024 2024 Yearto 291212024 Note Income and Endowments from: Donations and legacies Investments Government grants Charitable activities 762,637 5,526 341,714 1,991 1,104,351 7,517 781382 781382 Total income Expenditure on: 1549 545 1 893 250 Raising funds Charitoble activities 360,721 1051891 360,721 1487 020 435 129 Total expenditure 1,412.612 435,129 1,847,741 Net movement in funds 136,933 (91,424) 45,509 Transfer be￿een funds other recognlsed galn$ l (lo$$es) Gain or) revaluation of fixed assets Net movement in funds 136,933 (91.4241 45,509 Fund balances brought forward At l March 2023 240.956 922,458 51,132 1,214,546 Fund balances ¢arrled lotward At 29 February 2024 377,889 831,034 51,132 1,260,055 INCOME FROM DONATIONS AND LEGACIES Unrestricted Restri￿ed 281212025 291212024 Donations Legacies Membership Challenger 5 Appeal Other 477,437 101,691 44.428 249,004 726,441 1,047,510 101,691 23,744 44,428 33,045 305,000 31 305,000 31 52 623,587 554,004 1,177,591 1,104,351 Of the comparative donations figure £341,714 was in respect of restricted funds. 29 TALL SHIPS YOUTH TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 INCOME FROM CHARITABLE ACTivrriES 281212025 291212024 Gross voyage fees Less bursaries utilised from funds 1.650,570 971 119 1,480,609 699 2271 679,451 781,382 All income from choritoble octivities for both years was unrestricted. NET INCOME FROM ACTIVITIES OF SUBSIDIARIES The Charity's only active subsidiary is Tall Ships Limited (02844027). Registered office address: 2a The Hard, Portsmouth, Hompshire, POI 3PT. A summory of its results for the period is set out below=_ 281212025 291212024 Turnover-voyoge fees Operating costs 1,650,570 1292 677 1,480,609 1156 025 Operating Profitl(loss) 357,893 324,584 Finance costs Net profitl(loss) 354,572 322,700 The net assets and liabilities of the active subsidiary are- 281212025 291212024 Current assets Creditors.. amounts falling due within one year 95,405 159 821 71,127 490 115} Totol net liabilities 418 988) Aggregate of share capital and reserves {64,416) (418,9881 30 TALL SHIPS YOUTH TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 ANALYSIS OF EXPENDITURE 281212025 291212024 Cost of raising funds: Fundraising costs Allocotion ot support ond governonce costs (see note 6) 358,606 330,231 392,517 360,721 Charitable activities Ship related costs Depreciation Allocotion ot support ond governonce costs (see note 6) Interest payable ond similar finonce charges Other voyage and support expenses 1,068,309 141,686 141,720 20,106 268 572 941,991 141,732 125,691 27,248 250 358 1,640,393 1,487,020 Restricted funds Unrestricted funds 561,120 435,129 1471790 1412612 2,032,910 1,847,741 SUPPORT AND GOVERNANCE COSTS Support Governance 281212025 291212024 Support Costs Payroll and HR Property costs Office costs IT and Website Morketing Other Method Total resources Totol resources Total resources Total resources Direct activities Total resources 7.256 26,880 22.609 14,522 23.950 10,161 7,256 26,880 22.609 14,522 23,950 10,161 10,071 25,762 21,543 11,296 21,379 11,176 Govemance costs Auditors remuneration Administrative expenses Legal Fees 46,915 6,241 46,915 6,241 37,175 6,901 105,378 70,253 175,631 156,181 Support and Governance costs are allocated to Cost of Raising Funds and Charitable activities as follows= Cost of Raising Funds Charitoble octivities 20.346 13.565 33,911 141720 30,490 125 691 105,378 70,253 175,631 156,181 31 TALL SHIPS YOUTH TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 OTHER COSTS 281212025 291212024 The surplus is stated after charging= Auditors, remuneration Audit services Non-audit services 29,650 28,775 46,915 37,175 Depreciation Operoting leose rentals 141,685 6,893 141,733 8,403 EMPLOYEES Employee costs during the period were as follows-. 281212025 291212024 Wages and salaries Social security costs Other pension costs 779,246 69,731 691,201 57,174 885,371 780,105 The average number of full time equivalent employees during the period were as follows= 281212025 Number 291212024 Number Management and administration 21 18 The average number of employees based on heod count was 23 (2024: 21). The total costs attributable to senior management personnel amounted to £349,271 for the yeor to 28 February 2025 (2024= £356,691). Senior management personnel comprise the Chief Executive Off icer, Finance and Business Support Director. Director of Youth Development and Outdoor Learning. Head of Operations. and the Head of Fundraising and Marketing. The emoluments of higher paid employees fell within the following ranges.. 281212025 Number 291212024 Number £60,001 to £70,000 £70,001 to £80,000 £80,001 to £90,000 £90,001 to £lOO,000 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 chority. Expense reimbursements for travel and subsistence were not paid to Trustees during the year (2024.. £nil) and there were no expenses paid on behalf of a trustee. Trustee indemnity insurance paid on behalf of Trustees and officers in the yeor was £3.528 (2024.. £3,553). 32 TALL SHIPS YOUTH TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 io. SURPLusI(DEFIC￿) OF EXPENDITURE OVER INCOME The consolidoted Statement of Financial Activities includes the results of the Charitys wholly owned subsidiary Tall Ships Limited, which operates voyages. Details of the results of the trading subsidiary are set out in note 4. The summary financial performance of the Chority alone was: 281212025 291212024 Income Income from donations and legacies other income Investment income 1.177,591 204,760 1,104,351 203,909 Total income 1397 716 1 315777 Expendlture Raising funds Charitable activities (385.153> 1222 876 (355,078 (1033 988 Total expenditure 1608 029 1389 066 Revaluotion in year Net income tor the year (210.313) (73,289} Total funds brought fonNard on 29 February 2024 1329 343 1402 632 Total funds carried forward at 28 February 2025 1,119.030 1,329,343 TANGIBLE FIXED ASSETS Consolidated and Tall Ships Youth Trust Computers. Fixtures & Yachts Equipment Total Cost or voluation= At l March 2024 Additions in year 1,885,917 100,332 1,986,249 At 28 February 2025 1,885,917 102,501 1.988,418 Depreciation: At l March 2024 Provided in the period 172,690 125 727 67,829 240,519 141 685 At 28 February 2025 298,417 83,787 382,204 Net book amount at 28 February 2025 1,587,500 18,714 1,606,214 Net book amount at 29 February 2024 1,713,227 32,503 1,745,730 The Yachts are given as securi given as security was £780.000 against a number of loans included in creditors. The net book value of yachts 2024. £840.000). The Challenger Yachts are included above at a net book value of £390,000 {2024'. £420,000) based on a professional valuation completed by Berthon International Limited, an international yacht brokers, in 2023. Not all class of yachts were revalued. The Ketch was not revalued due to its bespoke nature. 33 TALL SHIPS YOUTH TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 ii. FIXED ASSETS (continued) The tigures stated above for cost or voluation in respect of Yachts comprise assets at Cost 1,094,928 790 989 Valuation 1,885,917 If certain fixed assets had not been re-valued, they would have been included on the historical cost basis at the following amounts= Yachts Yachts 281212025 291212024 Cost Accumulated depreciation 1.094.928 1012 312 1,094,928 11001905 Net book amount at 28 February 2025 82,616 93,023 12. DEBTORS Consoliduted 281212025 291212024 Tall Shlps Youth Trust 281212025 291212024 VAT recoverable Other debtors Prepayments 13,234 118,359 12,197 65,926 2,893 64,098 116,696 138,357 86,111 123,133 70,497 13. CURRE1￿ ASSET INVESTMENTS Consolidated 281212025 291212024 Tall Ships Youth Trust 281212025 291212024 UK investments- COIF Funds 6,642 6,642 Unlisted investments have been invested in COIF units held in the name of a supporterfs branch, and are at market value. TALL SHIPS YOUTH TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 CREDITORS: AMOUNTS FALUNG DUE WITHIN ONE YEAR Consolidated 281212025 291212024 Tall Ships Youth Trust 281212025 291212024 Bank Loan Loans from Trustees and funders Payments received on account Trade creditors Social Security ond other toxes other creditors and accruals 55.556 80.000 248.340 66,472 32,978 124 456 55.556 30,000 203,625 119,199 14,661 55,556 80,000 248,340 8,466 32,978 55,556 30,000 203,625 5,463 14,661 607.802 500,063 492,918 359,648 Loans from Trustees and funders are secured by fixed charges over the TTUSt's vessels (see note11). The bank loan is secured on fixed and floating charges overthe assets of the charity. 15. CREDITORS: AMOUNTS FALLING DUE A￿ER MORE THAN ONE YEAR Consolidated 281212025 291212024 Tall Ships Youth Trust 281212025 291212024 Loans from Trustees and funders Bank loan 190.000 220,000 190,000 220,000 194,630 280,185 194,630 280,185 Loans from Trustees and funders are secured by fixed charges over the Trust's vessels (see note11). The bonk loan is secured on fixed and tloating charges overthe ossets of the charity- 16. ENDOWMENT FUNDS Michael Crocker Nova Scotia Lord Burnham Total At l March 2024 and at 28 February 2025 13.277 12,952 24,903 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 soiling ship -Morques- which sonk off Bermudo during the 1984 American Tall Ships race. The income is shared with the American Soil Troining Association and is to support o voyage berth. The Lord Burnham fund was set up in his memoryfollowing hisdeath in June1993_ Income is for contributions tovoyagefees aboard the Trusys ships for trainees ideally, but not exclusively, from Eastern Europe_ 35 TALL SHIPS YOUTH TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 17. RESTRICTED FUNDS Balance at 11312024 Income Expenditure Transfer Balanceat 281212025 International fund Legacy fund Other specific funds Challenger 5 Appeal 201.114 53,342 576.578 2,011 203,125 (53.342> (407,778) 100 000 249.004 305 000 417,804 205 000 Totol restricted funds 831,034 556,015 (561,120) 825,929 The Specific Funds are donations madeto the Trust to be used for specified purposes. As at 28 February 2025 there were 227 separate funds (2024.. 326). The Trustees continuously review the ongoing obligations of restricted funds and, given the plan in place. are satisfied obligations can be met as they fall due. Historically, the Chority has operated with cosh balonces not fully covering the value of restricted donations. This was exacerbated by the sale of the -Stavros" brig in 2017 and further cash flow challenges created during Covid. This created a technical breach of trust with some funders and The Charity Commission was notified at the time. The Charity manages the restricted fund balance by monitoring of the usage of individual restricted funds, management of cash flow and cost containment. The Charityensures that providers of restricted funds have been updated wherever appropriate. This has ensured thot suff icient cosh has been available to meet the obligations of restricted funds within their specitied timelines. Historicolly, the incidence of restricted tunds needing to be repaid to donors is extremely low (in both number and value)_ Furthermore, no funds have been required to be repaid since the end of COVID. Management has a plan to address the restricted fund balance. This includes seeking to reclassify long-standing unspent restricted funds as unrestricted. with the consent of the donors or Charity Commission, and engaging with otherdonorswhere the restrictions are difficultto meet (forexomple dueto geogrophical constraints). TheTrustees hove received legol advice thot this opprooch with respect to restricted funds is appropriate. As described in the Going Concern note on page 26, since the year end the restricted fund balance has continued to reduce and cash balances have increased leading to a reduction in the overall deficit on restricted funds. The International Fund is restricted within the accounts of the Trust for the support of international sail training activities. Monagement's plan involves engaging with funders to ogree the movement of long-term, unspent restricted funds into designated or unrestricted funds. Challenger 5 funding secured our ability to acquire the fifth Challenger vessel which was added to the fleet in September 2025. The funding also assists with general fleet maintenance and additional resource to support growth in the voyage programme. Since the year end, The Shipwrights. Company ond Gosling Foundation co-venture funding restriction has been eased following agreement with the funder. This released £300,000 to operational cash flow associated with bringing Challenger 5 on-line and preparatory moves for the existing fleet to commence our major refit programme. 36 TALL SHIPS YOUTH TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 Yearto 28 February 2024 Comparatlve perl¢xl Balance at 11312023 Income Expenditure Transfer Balance at 291212024 International fund Legacy fund Other specific funds 199.123 138.179 1,991 201,114 53,342 576 578 (84,837) 350 292 Totol restricted funds 922,458 343,705 (435,129) 831,034 18. UNRESTRICTED FUNDS Consolidated General Revaluation Reserve Reserve Total At l March 2023 Income Outgoing resources Transfer between reserve5 (1,494,568) 1,735,524 1,549,545 (1,412,612) 115320 240,956 1,549,545 {1,412,612} 115320 At 29 February 2024 (1,242,315) 1,620,204 377,889 Income Outgoing resources Transfer between reserves 1,316,392 (1,471,790) 115729 1,316,392 (1,471,790) 115729 At 28 February 2025 (1,281,984) 1,504,475 222,491 Tall Shlps Youth Trust General Revaluotlon Reserve Reserve Total At l March 2023 Income Expenditure Tronsfer between reserves (1.306,482) 1,735,524 972,072 {953,937) 429,042 972,072 (953,9371 At 29 February 2024 (1.173,027) 1.620.204 447,177 Income Expenditure Transfer between reserves 841,702 (1,046,909) 115729 841,702 (1,046,909) 115729 At 28 February 2025 (1,262,505) 1,504,475 241,970 37 TALL SHIPS YOUTH TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 19. ANALYSIS OF NET ASSETS BETWEEN FUNDS Unrestricted Funds Restricted Endowment Funds Funds Total Consolidated at 28 February 2025 Tangible fixed assets Current assets 1.606.214 (581.291) 1,606,214 295,770 825,929 51.132 Current liabilities Creditors.. due after more than one year (607,802) 194 630 (607,8021 194 630} 222.491 825,929 51.132 1,099,552 Tall Ships Youth Trust at 28 February 2025 Tangible fixed assets Current assets Current liabilities Creditors.. due after more thon one year 1.606.214 (676,696) (492,918) 194 630 1,606,214 200,365 (492,9181 194 630} 825,929 51,132 241.970 825,929 51.132 1,119,031 As mentioned in the accounting policyon page 26 above, there is a shortfall in unrestricted fund balances to fully support restricted cash balance& This is a consequence of the sale of the brig in 2017 at a lower value than expected. We hove a plan in ploce to continue to reduce this deficit and the Trusfs lotest cosh flow projections and future funding options available to it more than adequately cover any immediate or unexpected outflows. As at 30 November, the unrestricted (consolidated) balance above of £222,491 has improved to £704,373, largely as a result of the YC Chan Charitable Foundation donation. In addition. restricted fund balances have changed from £825,929 to £706.151 as a result of utilising donated funds for bursaries on voyages. Given these improvements in net osset bolances. it is the Trustee's opinion that our plon will continue to improve the current situation. Yearto 29 February 2024 comparative period Unrestricted Funds Restricted Endowment Funds Funds Total Consolidated at 29 February 2024 Tangible fixed assets Current assets Current liabilities Creditors.. due after more thon one year 1.745.730 (587.593) (500,063) 280 185 1,745,730 294,573 (500,063) 280 185 831,034 51,132 377,889 831,034 51,132 1,260,055 Toll Shlps Youth Trust at 29 February 2024 Tangible fixed assets Current assets Current liabilities Creditors.. due after more than one year 1.745.730 (658.720) 359.648) 280 185 1,745,730 223,446 (359,6481 280 185 831,034 51.132 447.177 831,034 51.132 1,329,343 38 TALL SHIPS YOUTH TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 Most restricted donations ore to cover, in par¢ the costs of a voyage ond most of the costs of voyages ore 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. 20. 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 mode during the period ore disclosed in note 8. Defined benefit scheme A number of former employees of the Trusys subsidiary Tall Ships Limited ("TSL°) have belonged to an industry wide pension scheme. 21. LEASING COMMITMENTS At the reporting date, the Trust had the following minimum future lease commitments.. 281212025 291212024 Land & Buildlngs Lund & bulldlngs other other Within one year Between two ond five years 25.000 13.817 25.000 13,337 45,833 47,343 70,833 52,288 22. RELATED PARTY TRANSACTIONS The aggregate donations from Trustees to the charity during the year was £7.950 (2024: £12,550). The aggregate Trustee membership subscriptions during the year were £660 (2024= £650). At the year end, a loan of £50,000 (2024= £nil) was outstanding to one of the trustees. No interest is accruing on the loan. 23. FINANCIAL ASSETS AND FINANCIAL UABILrriES Group balances 281212025 291212024 Finoncial assets at amortised cost Finoncial liabilities at amortised cost 280,535 554 092 277,504 576 623} Net financial liabilities (273,557> (299.119} 39 TALL SHIPS YOUTH TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2025 The Choritys financial assets comprise investments and cash and bank bolonces. Financial liobilities include trade creditors, loans, accruals and other creditors. 25. EVENTS AFTER THE REPORTING PERIOD In October 2025, the charity acquired a Challengervessel at a nominal cost. As part ofthis acquisition, the charity has assumed responsibility for an existing loan ond a contribution towards closure costs totalling £197,000. The charity also expects to incur long-term refit costs in the region of £200,000. Unrestricted donation In October 2025, we received confirmation of o significan¢ unrestricted donation of £lm over three years from Sandra Dennis and her family, through her fatherfs charitable foundation_ This is a hugely impactful commitmentthatwill supportourgrowth plans acrossthe UK and potentially contribute to the refit of our existing 4 Challengers. Our trustees have passed a resolution for recognition for the YC Chan Charitable Foundation on two ofour Challengers and then Mo of our future majorvessels in perpetuitythereafter. 40