Sa i lor s ’ s oc i e t y
AT HOME
IN PORT
AT SEA
spent transforming seafarers’ lives
sh i p vis it s Chaplains & Ship Visitors
seafarers given transport
UK seafarers active at sea
seafarers given news from home
seafar er s at tending wo rs hip s ervices
g rant Recipient s
piracy attacks against ships worldwide
s eafarers reached bibles distributed se afarers employed by t h e g loba l s h i p p i n g i ndu s try
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CONTENTS C H A I R M A N ’ S S TATE M E N T 3 C H I E F E X E C U TI V E ’ S S TATEM E N T 5 ADM I NI S TR ATI V E D E TA I L S, TR U S TE E S A ND A DVI S O RS 7 OB JE C TI V E S A ND AC TI V I T I E S 9 G OV E R NA NC E A ND S TR ATE G I C L E A DE R S H I P 1 0 S TR ATE G I C R E P O RT 1 2 YEAR IN REVIEW - ACHIEVEMENTS AND PERFORMANCE 13 LOOKING FORWARD - FUTURE PLANS 17 PRINCIPAL RISKS & UNCERTAINTIES 19 FINANCIAL REVIEW 20
AC C OUN T S 2 4
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SA I LOR S ’ S OC I E T Y
CHAIRMAN’S STATEMENT 2014
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Firstly I would like to say thank you to Ross Sinclair for his 12 years of leadership as chairman of the Society. I am honoured and delighted to be taking over the helm as we enter our 197th year and, in this my first short period as chairman, I am excited by the progress being made and the development opportunities we are pursuing. Seafarers, both men and women, often work in challenging conditions, spending many months away from family and friends, sometimes living in daily fear of piracy or at risk of abandonment. We have continued to meet the changing needs of seafarers and provide support to them and their families and we will continue to improve our responsiveness in the future as we strive to remain at the forefront of welfare innovation. Our current five-year strategic plan, which started this year, has the aim of increasing the positive impact on the lives of seafarers and their families at home, at sea and in port. In this Annual Report we share the achievements we have made over the past twelve months, outlining key objectives reached and challenges faced. We also share our vision for the next twelve months as shown in the strategic plan. During this year we have placed substantial emphasis on diversifying our charitable activities, growing the reach and extent of the charitable programme as well as building a strong and experienced team so that we are in a strong position to achieve the strategic goals in the plan period. We are already innovating in our approaches to delivering welfare. This can be seen through our investment in mobile and web-based support systems for our chaplains such as the new App and the significant development of our welfare and education programmes in particular the imminent wellbeing
programme. We are also continuing our work in the Philippines in the wake of Typhoon Haiyan in 2013 to assist seafaring families to live and work. This is made possible by the increased team for delivery and strong, proactive fundraising. Coupled with a drive for operational efficiency, we believe we will continue to lead the way in welfare provision for seafarers. Sailors’ Society has a privileged and highly regarded position in the maritime world, for which we thank the many stakeholders, trusts and grant giving organisations that provide financial support. Our trustees, CEO Stuart Rivers, senior leaders and staff along with our chaplains are committed to the work and goals of the Society and our efforts are fuelled by the passion of these people. Our supporters in the
industry and the church make all this progress possible, and we are grateful for their on-going support. I would also like to thank our volunteers and ambassadors who give their time freely so that we can raise the profile of our work, and the need for our work, around the world. We are just at the beginning of an exciting time of development and change and I am proud of the achievements made so far. On behalf of the Trustees of the Society, I commend the Sailors’ Society Trustees Annual Report and Accounts to you.
Alastair Fischbacher 18 June 2015
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SA I LOR S ’ S OC I E T Y
CHIEF EXECUTIVE’S STATEMENT 2014
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2014 has been a year of investment in our programme, both domestically and internationally, spending funds raised and drawing down on reserves to support increased charitable activity. our partnerships with Habitat for Humanity and the Homer Foundation we have rebuilt homes for seafaring families, built schools and medical facilities, and provided financial and welfare support to thousands of seafarers in the Philippines.
During the year significant organisational changes were made, including the formation of a Programme Team to develop our charitable activity and an extended fundraising team. 2014 was a year of innovation and implementation. Having spent considerable time during 2013 developing a strategy for growth and sustainability, Sailors’ Society has successfully commenced its expansion around the world. Despite a tough economic environment again in 2014, we saw a slight increase in total incoming resources, if the surplus on the sale of fixed assets is excluded. We also invested in the development of new income streams for the future and
expect to see the benefit of this over the next two to three years. Total expenditure also increased from £3.760M to £4.003M, with an additional £352K invested in our programme. New appointments in South America, Asia, Africa and Europe, and improved support for our programme staff means that our reach is extended and our service quality improved around the world. Based on where the need is greatest, we have added eight new chaplains, established regional offices in Southern Africa and Singapore, and put staff in place to support our growing programme.
In 2014, we started developing our scholarship programme, offering educational funding to cadets in in the UK, Singapore and Greece. This programme will be launched in 2015, and will offer new funding opportunities to students who otherwise would not be able to pursue a seafaring career. We have continued to invest in digital technologies during the year and in 2015 we will launch our chaplaincy platform and integrated mobile application. The platform will provide real-time welfare reporting, improved continuity between port-based responders and the ability to track ships using the AIS vessel tracking system.
Stuart Rivers CEO 18 June 2015
We ended 2013 with sadness at the devastation caused when Typhoon Haiyan made landfall in the Philippines. Millions of lives were changed by the super typhoon and, as a nation that provides over a quarter of the world’s seafarers, we knew our staff would be busy during 2014 providing support to the many families affected. Through
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ADMINISTRATIVE DETAILS, TRUSTEES AND ADVISORS PATRONS Her Majesty the Queen His Royal Highness The Duke of Edinburgh KG KT – Honorary President of International Sailors’ Society, Canada VICE PRESIDENTS The Free Churches’ Moderator for England The Right Reverend the Moderator of the General Assembly of the Church of Scotland The Right Reverend & Right Honourable the Lord Bishop of London The Right Reverend the Moderator of the General Assembly of the Presbyterian Church in Ireland David Morris BSc FRICS Captain Reg Kelso MBE Ross Sinclair FCA Appointed 19 June 2014 Frank Taylor BA CA J DIP MA Captain Andrew Tyrrell SAILORS’ SOCIETY TRUSTEE BOARD (and serving DIRECTORS) Ross Sinclair FCA •Δ◊†* Chairman - retired 19 June 2014 Alastair Fischbacher * Chairman - from 19 June 2014 Michael Drayton •◊* Joint Vice-Chairman from 11 December 2014 Dr Peter Swift •Δ* Joint Vice-Chairman from 11 December 2014 Mike Burridge •† Peter Goldberg •Δ* Jonathan Holloway † Appointed 19 June 2014 Colin McMurray ◊ Shyam Sharma JP MSc FCA •* Natalie Shaw †* Captain Jonathan Stoneley Δ Ian Ward Δ†* Vice Chairman until 11 December 2014 Reverend Jake Watson † Retired 11 December 2014 Reverend Tim Wilkinson RN † Appointed 11 December 2014 Only the above persons served as a trustee and director of the Sailors’ Society during 2014. Key to membership of standing Policy and Strategy committees of the Society (See symbols above) • Finance and General Purposes Committee Δ Fundraising Committee † Chaplaincy and Welfare Committee * Remuneration Committee Other Responsibilities ◊ Trustee of Sir Gabriel Wood’s Mariners’ Home charity
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Individuals responsible for the International Sailors’ Societies who reside outside the UK George Adams Larry Robbins Barry Haley
Canada New Zealand Southern Africa
MANAGEMENT & ADMINISTRATION Registered office of the Sailors’ Society and its principal operational address: 350 Shirley Road, Southampton, Hampshire, England SO15 3HY. Registered Charity No. 237778 The Sailors’ Society is a charitable company limited by guarantee. Company Registration No. 86942 The members of the Strategic Leadership Team are: Stuart Rivers DMS, DipTh, FInstSMM Chief Executive Scot Bower Director of Media & Advocacy Ann Brogan Head of Executive Relations & Programme Operations Andrew Pitcher FCCA Director of Finance & Administration Jan Webber MinstF Director of Fundraising Sandra Welch BTh, MIPD Director of Programme (from May 2014) Auditors Saffery Champness, Midland House, 2 Poole Road, Bournemouth, BH2 5QY Principal bankers National Westminster Bank plc, PO Box 309, Chandlers Ford, Eastleigh, Southampton SO53 3UD Bank of Scotland, Pentland House, 8 Lochside Avenue, Edinburgh, EH12 9DJ Investment managers Investec Wealth & Investment Limited, 2 Gresham Street, London, EC2V 7QN Cazenove Capital Management (formerly Schroder & Co Limited), 12 Moorgate, London EC2R 6DA Solicitors Blake Morgan (formerly Blake Lapthorn), New Kings Court, Tollgate, Chandler’s Ford, Eastleigh SO53 3LG Anderson Strathern LLP, 1 Rutland Court, Edinburgh EH3 8EY
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OBJECTIVES AND ACTIVITIES Our vision is a day when we transform the life of every seafarer and his or her family. Our mission is to improve the lives of seafarers and their families in ports, at sea and at home through chaplaincy, education and relief of poverty and distress. Our objectives are to provide beneficial Christian chaplaincy and outreach services, support educational development, and make interventions when poverty and distress affect the welfare of seafaring families. We provide chaplains in ports around the world where the need for welfare provision is greatest. We provide educational grants to those wanting to pursue a career at sea, but who do not have the means. We provide educational support to the children of seafarers to increase future living standards of seafaring families. We act when the welfare of seafarers and their families is affected by tragedy, incident or accident, and make interventions that relieve poverty and distress. We actively educate the public about our cause and promote our activity to raise awareness within our audiences of the ongoing needs of seafarers and their families. We regularly assess welfare provision in the locations where we are working and in locations that have limited or no welfare provision to find new opportunities to achieve our mission.
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We work collaboratively with other agencies and International Christian Maritime Association members where there is a common purpose to impact the lives of our beneficiaries. We work in partnership with the maritime industry and its corporate personnel to ensure that we fully understand and respond to changing welfare needs. Whilst our ministry is motivated by a Christian faith, through our network of chaplains and programme of activity we provide our services to those of all nationalities and those of any faith or no faith. Each year we review the aims and objectives that we set as we develop our future plans. We look at our achievements during the year and refine our plans accordingly. We regularly assess the cost of delivering our services to our beneficiaries. Our charitable activities are strategically linked to our goals to ensure that we continually meet the range of our charitable objects and are usefully serving those in the maritime community for whom we work.
PUBLIC BENEFIT In conducting this review and in assessing the public benefit of the activities we undertake, as trustees of the charity we confirm that we have complied with our duty under Section 17 of the Charities Act 2011. We also state that we have given due and proper regard to the guidance issued by the Charity Commission on delivery of public benefit, including the Supplementary Guidance.
GOVERNANCE AND STRATEGIC LEADERSHIP The Society is governed by its memorandum and articles of association. The Board of Trustees provides governance for the Society. Trustees are also directors of the registered company limited by guarantee. The Board meets four times a year to consider matters of policy and to review the strategy and performance of the Society. The Chief Executive is responsible for recommending the Society’s strategy to the Board and for all ongoing operations of the Society, ensuring its resources are used effectively and its assets are safeguarded. COMMITTEES The Board operates four committees and sets out the terms of reference for each in accordance with best practice. The current committees are: • • • •
Finance & General Purposes Chaplaincy & Welfare Fundraising Remuneration
The first three committees are made up of trustees, professional advisors and members of the Strategic Leadership Team, reviewing areas of opportunity and challenge to add value to the Society’s work. The appointed chair of each committee reports to the Board four times a year. The Remuneration Committee meets annually and consists of the Chairman, the Joint Vice-Chairmen and the chairs of the other committees. Its recommendations are taken to the Board as part of the annual budget-setting process. The Chief Executive attends all board and committee meetings. The members of the Strategic Leadership Team attend all board meetings and the respective committee meetings relating to their area. BOARD DEVELOPMENT There is no requirement for any trustee to stand down upon reaching a particular age or term of office. The Board maintains and regularly reviews the skills of trustees, in accordance with best practice, to ensure the needs of the charity are well supported through the collective skillset and experience. The Board considers nominations for new trustees and candidates are interviewed prior to appointment to ensure they can add value and bring relevant skills and experience. The Board considers nominations for new trustees and members of the Board are duly elected. Upon election, a trustee participates in a formal induction plan tailored to individual needs. This covers an understanding of the Society’s business and the aspects of ministry, welfare, education support, and the relief of poverty and distress. Familiarisation visits are arranged to a port where we operate. New trustees meet our key staff and stakeholders and receive information about their trustee responsibilities and committee work. Our trustees are required to maintain and develop their knowledge and governance skills throughout their period of office. The Society supports them through regular information covering developments in governance matters, charity legislation and any changes in regulation by the Charity Commission together with attendance at appropriate training opportunities and governance conferences to keep them informed and abreast of developments in governance matters, charity legislation and any changes in regulation by the Charity Commission.
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BOARD CHANGES DURING THE YEAR In June Ross Sinclair announced his retirement from the Society after 22 years of service, 12 of which were as Chairman of the Board of Trustees. Upon this announcement Ross commented that, over his time as chairman, the Society’s fundraising activity had developed significantly with many successes and, as a result, the Society’s profile had been raised considerably. This put it in prime position to increase its charitable work with a number of exciting new initiatives. The Society is grateful to Ross for his efforts over many years and to his wife Mary who has been an invaluable supporter. In recognition of his achievements Ross has been made a Vice-President of the Society. During the year Reverend Jake Watson also retired after over 16 years’ valued service, particularly his input as a member of the Chaplaincy & Welfare committee. His replacement is Reverend Tim Wilkinson. Tim is currently a chaplain in the Royal Marines having served since 1997. Prior to that he was a Methodist minister serving three churches in North-East England. We also welcome Jon Holloway onto the Board. Jon is a Chartered Marine Engineer who has worked in the oil and gas sector for 25 years. STRATEGIC LEADERSHIP TEAM The day-to-day management and operation of the organisation is delegated to the Chief Executive Officer of Sailors’ Society, who discharges this responsibility through the Strategic Leadership Team. The Chief Executive works with the Board and sub-committees to agree strategy, policy and direction in order to deliver the objects of the charity. The Strategic Leadership Team is responsible for implementing the strategy agreed.
CHIEF EXECUTIVE
STUART RIVERS
DIRECTOR OF FUNDRAISING
DIRECTOR OF PROGRAMME
JAN WEBBER
SANDRA WELCH
HEAD OF EXECUTIVE RELATIONS & PROGRAMME OPERATIONS
ANN BROGAN
DIRECTOR OF MEDIA & ADVOCACY
SCOT BOWER
DIRECTOR OF FINANCE & ADMINISTRATION
ANDREW PITCHER
Strategic Leadership Team Structure In May 2014 Sandra Welch was appointed as Director of Programme to develop our charitable work, manage our existing chaplaincy programme and provide strategic direction for new project opportunities. Sandra previously worked in a similar capacity for The Salvation Army and also has editorial, communications and HR experience which are considered a pre-requisite for the role.
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SA I LOR S ’ S OC I E T Y
STRATEGIC REPORT 2014
S TR AT E G I C R E P O RT
YEAR IN REVIEW AC HIE V E M E NT S A N D P ERF O RMA N C E
2014 has been a year of investment in our programme, both domestically and internationally, drawing down on reserves to support increased charitable activity. During the year significant organisational changes were made, including the formation of a Programme Team to develop our charitable activity and an extended Fundraising Team.
2014. The increase was due to the creation of a new fundraising structure that will focus on church engagement, committed giving and key relationships that will enable us to grow our income to support development plans in the next four years.
governing document, which are as follows: • • •
Advancement of the Christian Religion; Advancement of Education; Relief of Poverty and Distress.
We have provided welfare support to seafarers and their families around the world, working collaboratively with kindred organisations and other maritime missions. We have continued to move away from centre-based ministry towards a more flexible approach, in response to the changing needs of seafarers. We have successfully maintained our charitable operations around the world during 2014, as well as continuing to pursue the growth plans agreed by Trustees in 2013. We expect the initiatives we have put in place over these 12 months to begin to show a return within the following twelve months once the organisational changes and programme development are fully functional. Again this year we have a new model to help us benchmark our year on year performance and identify the impact of efficiency initiatives. Net surpluses from our charity shops and fundraising events are again treated as income for this purpose. Using this model, our net cost of fundraising increased from 18% of income in 2013 to 24% in
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Net income Net fundraising costs The newly formed Media and Advocacy Team successfully delivered a programme of events to engage with the church audience, and we expect to see rewards from this activity in the future. The team also increased the quality of resource development to support the Fundraising Team with marketing materials and an impact report, and increased circulation of Chart and Compass, our magazine for seafarers. In reporting our impact and progress through the year, we have assessed our activities against the charitable objectives for the benefit of seafarers and their families, as laid out in our
CHAPLAINCY New operations have been started in the UK, Brazil, Philippines and Southern Africa, with the appointment of eight new chaplains. In addition, we have appointed a family outreach chaplain in Tacloban, Philippines, and a project coordinator to oversee our aid developments in the region. Plans to establish chaplaincy work in St. Petersburg, Murmansk and Sebastopol, were postponed due to civil unrest between Russia and Ukraine.
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We have pursued our regional development strategy with the appointment of a development manager in Singapore to support our operations in Asia. In South Africa, we have established a regional office to provide support across Southern Africa, Madagascar and Reunion. EDUCATION A substantive project was undertaken to develop welfare awareness training, in response to a defined need from the maritime sector. At a round table discussion in December 2013, industry leaders shared their concern that seafarers were not fully equipped to deal with long contracts at sea from a welfare perspective. Work has been ongoing through the year to develop a programme that promotes on board wellbeing, and this will be launched in partnership with key industry leaders early in 2015. We have continued to provide education grants to intending seafarers. In total, we supported 44 students by providing financial assistance to enable educational development. Written applications
are assessed with reference to financial circumstances and the relevance of the qualifications being sought and external advice is obtained where necessary. Additionally, we have started development of a scholarship programme to make maritime education more accessible. POVERTY AND DISTRESS Much of our financial resources have been focused in the Philippines during the year in response to Typhoon Haiyan, which devastated parts of the country in November 2013. In partnership with Habitat for Humanity Philippines, we coordinated and funded the construction of 50 new homes, three school rooms, two community spaces and two medical centres, as well as providing ten fishing boats through the Homer Foundation. Our local chaplains have worked with families affected by the disaster to distribute grants for house repairs and general welfare needs. During the year 5,054 seafarers benefitted from welfare grants, many of whom were referred by partner agencies. Cases are individually assessed on the grounds of need and length of service in the Merchant Navy, liaising with other agencies where appropriate. Our chaplains have also provided support to seafaring families who have been affected by piracy, abandonment and unemployment.
We have been able to continue to support 19 ex-seafarers (or their dependants) residing in the UK through regular monthly payments of £52 (£12 per week) from the Leith Aged Mariners’ Fund. Sir Gabriel Wood’s Mariners’ Home, our retirement home for seafarers in Greenock, Scotland continued to provide accommodation and care for retired ex-seafarers and those who have worked in maritime related industries. The Home is a Grade A listed building that dates back to 1854. Preference for entry is given to natives of the Scottish counties of Renfrew, Ayr, Dumbarton and Argyll & Bute. The Home also offers care for persons suffering from Korsakoff’s Syndrome, which is an alcohol related disease resulting in dementia and which is particularly prevalent amongst seafarers. At the end of 2014 the number of residents remained at 41, as at the end of 2013, and varied from 37 to 44 throughout the year.
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S TR AT E G I C R E P O RT
INCOME & EXPENDITURE 2014
HOW WE SPENT OUR FUNDS
Charitable Activity
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Fundraising
Charity Shops
Governance
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Corporate support has once again been strong during the year, and we are grateful to our many supporters in the industry. However, we are starting to feel the effects of increased economic pressure within the shipping industry, and this heightens the need to diversify our income and look for new sources.
Support of our key events has continued, although it is apparent that we have to work harder to meet attendance quotas. Costs associated with events have also risen and there is pressure on the surpluses being achieved.
HOW WE RAISED OUR FUNDS
Residential Home & Flats Charity Shops
Legacies
Events
Donations & Grants Donations solicited by telephone
Investments Centres
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S TR AT E G I C R E P O RT
LOOKING FORWARD FU TURE P LA NS
Our work in 2015 will continue to build on the foundations laid down in 2014, enabling us to further develop our charitable programme and extend our reach to locations where welfare provision is limited. We will continue to focus our activities to support our beneficiaries in port, at sea and at home to provide a rounded portfolio of services. In order to maximise the growth of our international operations, we will seek to identify and implement partnerships that offer cost effective
ways of delivering support. We will also look to formalise arrangements with our sister societies in Canada and New Zealand in order that their respective programmes can be further developed in the future. We will diversify our income sources in 2015, focusing on the church and community audience, and expanding our retail operations. We will also develop our individual giving initiatives, by building major donor support, legacy giving and committed giving. CHAPLAINCY In line with our commitment to provide international chaplaincy & welfare support where it is most needed, we aim to expand our chaplaincy operations during the year. We will appoint ten new chaplains in locations where support is currently limited or non-existent. Additionally, we will establish an affiliate programme to promote closer working and improved support through our honorary chaplains around the world. We will continue to work towards a fully flexible and balanced chaplaincy and welfare service, continuing to move away from centre-based ministry and looking for innovative new ways of delivering our service.
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We will launch the next stage of our Mobile Chaplaincy App to provide real-time reporting and locationbased services. The ambition for this project is to improve the consistency of reporting and continuity of service provision so that seafarers receive improved support. EDUCATION During the first half of 2015 we will launch our Wellness at Sea initiative in partnership with industry sponsors. The vast majority of incidents occurring at sea are often attributed to ‘human error’, a term that disguises a variety of underlying problems. Wellness at Sea seeks to combat these issues by addressing ‘wellness’ as a holistic concept made up of five specific areas of wellbeing: Social, Emotional, Physical, Intellectual and Spiritual. Fatigue, poor mental health, stress and many
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other issues all affect seafarers going about their daily work. They can be the difference between safe transit and a major incident. During the year we will launch our scholarship programme in the UK, Singapore, Greece and Philippines, providing access to education for intending seafarers across a range of roles and disciplines. We intend to develop our digital resources for seafarers, providing helpful content and information that will help to address the concerns of industry leaders about the welfare of their crews. These materials will be designed to encourage conversation and discussion between crew members, creating a sense of community and relieving the isolation of seafarers at sea.
POVERTY AND DISTRESS We will continue to develop our project approach in responding to the needs of our beneficiaries around the world. During the year we will fund projects that support schools, medical centres and transport, to ensure the quality of life for seafaring families is positively impacted. The appointment last year of our family outreach chaplain in the Philippines means that improved support to seafaring families will be available. The chaplain will be able to identify and respond to welfare needs more effectively, and offer financial and practical assistance. To improve support in West Africa, a regional manager will be appointed to ensure operational effectiveness, develop key partnerships and provide monitoring and evaluation for our activities. Similarly we will be appointing a regional superintendent in India to coordinate our activities and develop new initiatives in that country.
We will continue to manage the Leith Aged Mariners’ Fund, providing regular financial support for exseafarers and relieving the burden of poverty, looking to extend its reach to more beneficiaries. We will likewise continue our work at the Sir Gabriel Wood’s Mariners’ Home for retired seafarers, helping to build a sense of community and relief from distress, loneliness and isolation.
We will look to further develop our programme of emergency welfare for cases of abandonment and piracy and it is our intention to establish a crisis centre in Africa to coordinate our response to piracy, abandonment, incident and accident across the region. Through this initiative we will work collaboratively with key partners to ensure a seafarer-centred response and end-to-end support in the future.
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S TR AT E G I C R E P O RT
PRINCIPAL RISKS AND UNCERTAINTIES We operate a formal risk management process where trustees and management together identify and review the main risks to the Society, their probability of occurrence, the possible impact and the consequent actions necessary to manage, reduce exposure or eliminate the risk. We look at these key areas: a) Financial, including money laundering, investment risk and risk to revenue income streams; b) Operations and personnel; c) Legal and statutory including Health & Safety; d) IT systems integrity and resilience, database backup and data protection; e) Society reputation. We also review our attitude to accepting levels of financial and operational risk. The main risks are identified in our corporate risk register. Management implement our risk avoidance policy and report any near incidence arising. The main financial risk to the Society is having enough funds readily available to meet our planned operational and administrative needs to deliver our services to our core beneficiaries. We believe that maintaining readily realisable free reserves at the level stated in this report will provide sufficient resource in the event of any unplanned, adverse conditions arising. The likelihood of this main risk occurring is affected by a number of other subsidiary risks such as: • • • • •
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Appetite diminishing for participants taking part in our fundraising events; Over-reliance on a number of key sponsors and supporters; Circumstances out of our control affecting the ability of supporters, primarily in or related to the shipping industry, to donate to us (e.g. economic downturn); Reduction in income caused by stock market decline; Adverse fluctuation in foreign exchange rates, particularly as these can affect the cost of funding of our overseas operations.
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FINANCIAL REVIEW REVIEW OF THE 2014 FINANCIAL RESULTS The consolidated statement of financial activities (SOFA) shows an operating deficit in 2014 of £294,000, (2013: surplus £572,000). The stock markets gave a smaller boost than in 2013 with unrealised gains on investments of £241,000 countered by losses of £23,000 on investments sold in the year. An improvement in the property market in the year increased the value of investment property by £60,000. These items together resulted in a drawdown on reserves of £16,000 (2013: £2,318,000 addition). Our total income, excluding surpluses on disposal of fixed assets, was £3,698,000 compared with £3,660,000 in 2013 an increase of £38,000. The main elements to note are: •
Fundraising events & sponsorship – decreased by £65,000 (7%) on 2013 to £878,000. This income level varies due to the changing events programme year on year with the last comparative year (2012) raising £888,000.
•
Charity shops – decreased by £16,000 (7%) to £221,000. This continued decline in income has resulted in a new strategy being formulated during 2015 relating to the future of our three existing shops and will also cover the potential development of this type of fundraising.
•
Donations and grants – decreased by £21,000 (3%) to £589,000. The Haiyan Typhoon Appeal which commenced at the end of 2013 raised £136,000 in 2013 and £89,000 in 2014, accounting for £47,000 of the reduction across the two years. There was a reduction in donations from corporate and trust supporters of £45,000 countered by increased grant income, particularly in respect of improvement works at Sir Gabriel Wood’s Mariners’ Home, of £58,000. Donations from other sources improved by £13,000.
•
Sir Gabriel Wood’s residential home income – increased by £128,000 (11%) to £1,250,000. Fee income relating to the main home rose by this amount in the year. The Home has continued to raise additional revenue from shortterm stays for respite care. Rents generated from the court flats reduced by £3,000 and were offset by an increase in income from the residents’ tuck shop.
Total expenditure was £4,003,000 compared to £3,760,000, an increase of £243,000. The main elements are: •
Cost of generating funds – reduced by £61,000 (6%) on 2013 to £961,000 across the three expense headings. This includes a £57,000 swing in unrealised foreign exchange differences on our US dollar investments and a £79,000 reduction in events costs, the majority due to the different events schedule compared to 2013. General fundraising expenses have increased by £72,000 due to staff changes and recruitment costs focussing particularly on the church and community based audiences as well as infrastructure changes including the development of our fundraising database.
•
Charitable costs have increased by £352,000 (14%) to £2,923,000. Within this figure:
•
Expenditure on Chaplaincy and welfare projects increased by £276,000 (45%) to £896,000. This increase includes further grants and welfare payments of £178,000 expended in rebuilding seafarer communities in the Philippines following Typhoon Haiyan. In addition direct chaplaincy and welfare costs increased by £71,000 representing new posts in Brazil, Philippines and the UK (Tilbury & Invergordon). Changes to the infrastructure at Head Office supporting new initiatives and ongoing work increased costs by £57,000 and additional depreciation on new vehicles amounted to £30,000. The international Sailors’ Society chaplains’ conference was staged during 2013 at a cost of £40,000 which has not recurred in 2014.
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S TR AT E G I C R E P O RT
•
Seafarers’ Centre costs have reduced by £108,000 (49%) to £113,000. Much of this change is the result of nonrecurring items such as the running costs of the Grangemouth Centre which was closed in July 2013 (£14,000), the external redecoration of the Moorings Retirement units in Wallaroo (£22,000) and the running costs of the Port Adelaide Centre until its sale in August 2013 (£7,000). Other non-recurring items include the management time spent on the sale and the rationalisation of the Australian operations including the running down of the Australianregistered charity (£33,000) and the establishment of a formally registered overseas branch in its place. The remaining £32,000 is primarily due to reductions in running costs of the remaining two seafarers’ centres and the Moorings units, some of which is as a result of the strengthening of Sterling against Australian and Ghanaian currencies.
•
Costs at Sir Gabriel Wood’s Mariners’ Home increased by £59,000 (5%) to £1,257,000. £49,000 relates to increased staff costs which have assisted in generating the additional income.
•
Contributions to partner organisations increased by £30,000 (37%) to £112,000. The relationship with our sister society in South Africa has been strengthened and a £37,000 additional grant was awarded in relation to a number of projects under their management.
•
Costs of promoting the charitable purpose have increased by £116,000 (28%) to £525,000. This represents a full year of the work of the Media & Advocacy Team which came into being in July 2013 and includes continued attendance at Christian exhibitions and conferences, travel to gather and record stories of the Society’s work around the world together with a general increase in digital media output and impact reporting to the outside world. All departments contribute to this output and a proportion of their costs is included.
•
Governance costs have reduced by £48,000 (29%) to £119,000. This is as a direct result of the change in Chief Executive and executive staff structure during 2013. It is also due to one-off items expended in 2013 not recurring in 2014.
REVIEW OF THE 2014 INVESTMENT PERFORMANCE In managing our financial reserves and regularly assessing market risk, our Finance Committee draws up the investment policy and we review this annually. The Board endorses the recommended asset mix and the class weighting and after review approves any necessary policy change. Our investment strategy is to accept a level of medium risk with a balance sought between realising a target income and achieving capital growth. Investments are divided amongst equities, bonds, property and cash. Investec Wealth and Investment Limited actively manage our main and subsidiary portfolios whilst Cazenove Capital Management manages our investment in its Schroder Charity Multi-Asset Fund. Updates on the value of the portfolio are provided to us quarterly and in the case of the main and subsidiary portfolios, details of purchases and sales are given to us when they occur. Each investment portfolio manager is required to attend one meeting of our Board annually, and to attend a separate meeting of the Finance & General Purposes Committee. We discuss the performance of the investments at this meeting, the prevailing and anticipated economic conditions, a forecast of future trends and we look at our future cash requirements to be funded by these investments. Investec managed funds (£7.6 million) The total return for invested funds managed by Investec during the year was: Year Actual Benchmark General fund +5.1% +6.8% Leith Aged Mariners’ Fund +6.2% +5.8% US Dollar Fund +5.9% +8.3%
Last three years Actual Benchmark +36.4% +33.3% +45.0% +25.8% +45.0% +42.9%
Whilst the underperformance against benchmark is disappointing on two of the funds for the year in isolation, the three year compounded result shows performance ahead of the benchmark.
21
STR ATEGIC R EPO RT
The Schroder Charity Multi-Asset Fund (£6.5 million) The fund is a ‘pooled investment’ vehicle. The investment mix is determined by the fund manager and based upon tactical ranges for the different investment types. The fund’s total return target is the rate of inflation plus 4% over an economic cycle (typically 5 to 7 years) whilst aiming to meet this target with around two-thirds of equity market volatility. A total return of 3.5% was achieved in the year (2013: 13.6%) with 31.1% cumulatively over the last three years (inflation + 4%: 21.0%). REVIEW OF THE 2014 LEVEL OF FINANCIAL RESERVES Level of reserves held At the end of 2014 our free reserves stood at £14.8 million and this includes £13.7 million of unrestricted quoted investments, which we expect to produce an income in the region of £450,000 to £480,000 in the year ahead. Our financial projection assumes that this amount continues to flow from our investments as we rely upon this as a key source of our funding. Removing investments from the calculation leaves around £1.1 million in reserve, which is ten months’ unrestricted charitable spend. At our last review we assessed that the level of reserves being held was wholly appropriate whilst we continued to seek additional sources of reliable income to sustain our present level of activity and this is still the position now based on the reasons set out in our policy below. Our Reserves Policy This Policy is set to ensure that our financial reserves will be maintained at an adequate level so that our core activities can continue during a prolonged period of unforeseen difficulty, and to be certain that a reasonable amount of these reserves will be maintained in a readily realisable form. While there remains uncertainty with the level of voluntary donations, the level of future participation in our fundraising events, the surplus realised from our other active fundraising activities and the amount expected from legacies, we believe controlled drawdown of these reserves to fund any future expansion of our charitable work is critical to the Society’s survival. Calculation of the required level of reserves is an integral part of our overall financial planning, budgeting and our outline forecasts for the next few years. Our policy takes into account: • Risks associated with each stream of income and expenditure being different from that budgeted; • Our planned activity level and any likely need to draw on reserves as a result; • Our immediate organisational commitments; • The level of our current reserves. The policy shows the level of reserves needed to enable our Society: • To fund its working capital; • To fund unexpected expenditure if unplanned events occur or unforeseen financial difficulty arises; • To fund any unexpected shortfall in budgeted income; • To manage a controlled wind-up over a reasonable period in the event of enforced closure. Reviewing the Reserves Policy We revisit our policy annually in conjunction with setting our budgets and reviewing progress against our strategic plans. We discuss the levels of realisable reserves, any major commitments to be financed by the Society and our future obligations. We consider the risks to future income, the level of predicted expenditure and the impact of any adverse effect on investment fund movements. Looking ahead, we recognise the need to balance the requirement to fund our existing level of work for today’s beneficiaries with our desire to progress the future extension of our charitable work to more world ports.
22
S TR AT E G I C R E P O RT
STATEMENT OF THE FINANCIAL DUTIES AND RESPONSIBILITIES OF TRUSTEES Company law requires that the trustees prepare financial statements for each financial year which give a true and fair view of the state of affairs of the charitable company and the Society group as at the balance sheet date and of its net incoming resources and application of those resources, including the net income and expenditure of the group for the financial year. In preparing these financial statements, the trustees are required to: select suitable accounting policies and apply them consistently, observe the methods and principles in the Charities SORP, make judgments and estimates that are reasonable and prudent and prepare the financial statements on the going concern basis unless it is not appropriate to assume that the charitable company will continue on that basis. We also state here that applicable accounting standards have been followed, subject to any material departures being disclosed and explained in the financial statements. As trustees (who are also the directors of the Sailors’ Society for the purpose of Companies Law) we are responsible for preparing this annual report and the associated financial statements in accordance with applicable law and accounting standards of the United Kingdom – known as the United Kingdom Generally Accepted Accounting Practice. We are responsible for keeping accounting records which disclose with reasonable accuracy the financial position of our Charity and which enable us to ascertain its financial position and to ensure that we comply with the Companies Act 2006 and comply with the requisite statutes and other charity and company legislation as required. We are responsible for safeguarding the assets of the Charity and for taking all reasonable measures to detect and prevent fraud and any other irregularities that may arise. AUDITORS A resolution to re-appoint Saffery Champness as our auditors for a further year will be proposed at the General Meeting to be held on 18 June 2015. STATEMENT OF DISCLOSURE BY TRUSTEES TO THE SOCIETY’S AUDITOR The trustees state that, so far as we know, there is no relevant audit information about which the Society’s auditors are unaware, and that the trustees have taken all necessary steps that ought to have been taken as trustees and directors of the charitable company to be aware of any relevant audit information and to ensure that the Society’s auditors are aware of that information. This report, including the strategic report, was approved by the Trustees on 18 June 2015 and signed on their behalf by:
Alastair Fischbacher Chairman of the Board of Trustees
23
SA I LOR S ’ S OC I E T Y
ACCOUNTS 2014
AC C O U N TS 2 0 14
INDEPENDENT AUDITORS’ REPORT TO MEMBERS AND TRUSTEES We have audited the financial statements of Sailors’ Society for the year ended 31 December 2014 on pages 27 to 52. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the company’s members and the trustees, 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 company’s members and trustees those matters we are required to state to them in an auditors’ 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 company, the company’s members and trustees as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of trustees and auditors As explained more fully in the Statement of Trustees’ Responsibilities, the trustees (who are also the directors of the 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. We have been appointed as auditors under the Companies Act 2006 and report in accordance with those Acts. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group’s and the parent charity’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the trustees; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Trustees’ Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on the financial statements In our opinion the financial statements: • give a true and fair view of the state of the group’s and the parent charity’s affairs as at 31 December 2014 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 Companies Act 2006. Opinion on other requirement of the Companies Act 2006 In our opinion the information given in the Trustees’ Annual Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
25
ACCOUNTS 2014
Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: • the parent charity has not kept adequate and sufficient accounting records, or returns adequate for our audit have not been received from branches not visited by us; or • the parent charity financial statements are not in agreement with the accounting records and returns; 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.
Nicholas Fernyhough (Senior Statutory Auditor) For and on behalf of Saffery Champness Chartered Accountants Statutory Auditors Midland House 2 Poole Road Bournemouth BH2 5QY Date: 7 July 2015
26
AC C O U N TS 2 0 14
CONSOLIDATED OF FINANCIAL ACTIVITIES Consolidated StatementSTATEMENT of Financial Activities [INCORPORATING AN INCOME AND EXPENDITURE ACCOUNT] FOR THE YEAR ENDED 31 DECEMBER 2014
(incorporating an Income and Expenditure account)
for the year ended 31 December 2014
Unrestricted Funds
Incoming resources Generated funds - Voluntary funding Donations and grants Telephone donor canvassing Legacies
Notes
3
- Activities to generate funds Charity shop income Fundraising events and sponsorship - Investment income
4
Charitable activities Sales of goods and services at Seafarers' centres Residential home fees and flat rental income
£000's
£000's
159 70 143
430 10
221 867
-
Endowment Funds
Total
2013 £000's
-
589 70 153
610 77 157
11
-
221 878
237 943
481
15
-
496
456
41
1,250
-
41 1,250
58 1,122
11
-
-
11
672
1,716
-
3,709
4,332
-
-
673 303 (15)
749 234 39
2,923
2,571
119
167
4,003
3,760
Other incoming resources Surplus on sale of functional fixed assets
1,993
£000's
2014 £000's
-
Total incoming resources
Restricted Funds
Resources expended Cost of generating funds Fundraising costs Costs of generating voluntary income Investment costs
673 303 (15)
Charitable activities Governance costs Total resources expended
5
Net (outgoing)/incoming resources before gains
1,561
111
8
2,376
1,569
(383)
Gains/(losses) on investment assets Realised (shares) Unrealised (property) Unrealised (shares)
(23) 60 235
Net movement in funds Transfers between funds
1,304
(111) 17 (e)
-
58 58
147
(58)
(294)
572
-
-
5
(23) 60 241
50 263 1,433
148
(53)
(16)
2,318
(69)
69
1
-
-
Reconciliation of funds Fund balances brought forward
15,536
1,092
1,379
18,007
15,689
Fund balances carried forward
15,425
1,171
1,395
17,991
18,007
All of the above results are derived from continuing activities. All gains and losses in the year are included above. The deficit for the year for Companies Act purposes comprises the net outgoing resources for the year adjusted for realised gains on investment assets and excluding the deficit on the permanent endowment fund and was £259,000 (2013: surplus £680,000). The accompanying notes are an integral part of the financial statements.
27
SAILORS' SOCIETY
23
ACCOUNTS 2014
CONSOLIDATED AND SOCIETY BALANCE SHEETS AT 31 DECEMBER Consolidated and Society Balance2014 Sheets
at 31 December 2014 Consolidated Notes
The Society
2014
2013
2014
2013
£000's
£000's
£000's
£000's
Fixed assets Tangible assets Investments Investment in subsidiary undertaking
10
2,312
2,286
2,223
2,263
11
14,140
14,105
13,747
13,707
-
-
4
4
19 (b)
Freehold investment properties
12
445
385
445
385
Interest free loans
13
16
16
16
16
16,913
16,792
16,435
16,375
Current assets Stocks 14
Debtors Cash at bank and in hand
7
4
4
2
628
448
642
312
1,499
1,667
805
1,248
2,134
2,119
1,451
1,562
(620)
(406)
(433)
(292)
1,514
1,713
1,018
1,270
18,427
18,505
17,453
17,645
(436)
(498)
(443)
(510)
17,991
18,007
17,010
17,135
Creditors: amounts falling due 15
within one year Net current assets Total assets less current liabilities Creditors: amounts falling due after more than one year
16
Net assets Capital funds Endowment funds
17(a)(d)
1,395
1,379
1,325
1,379
Income funds Restricted funds
17(b)(d)
1,171
1,092
465
445
Unrestricted funds - General reserve - Non charitable funds
17(c)(d) 17(c)
15,441 (16)
15,552 (16)
15,220 -
15,311 -
17,991
18,007
17,010
17,135
The accompanying notes are an integral part of the financial statements. The accounts were approved by the Board of Directors on 18 June 2015 and signed on its behalf by:
Alastair Fischbacher Chairman
SAILORS' SOCIETY - Company no. 86942
24
28
AC C O U N TS 2 0 14
CONSOLIDATED CASHFLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2014 Consolidated Cashflow Statement for the year ended 31 December 2014 2014 £000's Net cash outflow from operating activities
2013 £000's
£000's
(707)
£000's (393)
Returns on investments Interest and rents received Dividends received
26
4
476
450 502
454
Capital expenditure and financial investment Payments to acquire tangible fixed assets Purchase of investments
(204)
(142)
(1,241)
(1,195)
13
1,123
1,469
797
Receipts from sale of tangible fixed assets Receipts from sale of fixed asset investments
(Decrease)/increase in cash in the year
37
583
(168)
644
Reconciliation of changes in resources to net cash outflow from operating activities Income (excluding investment income) Expenditure (excluding interest paid and similar charges) Changes in resources before revaluations
3,213
3,876
(4,003)
(3,760)
(790)
116
Depreciation
176
161
Unrealised foreign exchange (gains)/losses on investments
(45)
12
Increase in stock
(3)
-
(Increase)/decrease in debtors
(186)
41
Increase/(decrease) in creditors
148
(70)
Movement in Leith Aged Mariners' Fund net assets Surplus on disposal of fixed assets Net cash outflow from operating activities
4
19
(11)
(672)
(707)
(393)
Analysis of cash movement Bank and cash balances at 1 January 2014
1,667
1,023
Bank and cash balances at 31 December 2014
1,499
1,667
Cash flow
SAILORS' SOCIETY
29
(168)
644
25
ACCOUNTS 2014
NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Notes forming part of the financial statements for the year ended 31 December 2014 1. Accounting policies a) Basis of preparation The financial statements have been prepared on a going concern basis and under the historical cost convention, other than Sir Gabriel Wood's Mariners' Home, listed investments and investment properties which are included on a market value basis. The financial statements have been prepared in accordance with the statement of Recommended Practice - Accounting and Reporting by Charities (SORP 2005) issued in March 2005, applicable UK Accounting Standards and the Companies Act 2006. The principal accounting policies adopted in the preparation of the financial statements are set out below. b) Group financial statements These financial statements consolidate the results of the Society and its subsidiary undertakings. The results of the subsidiaries are consolidated on a line by line basis. The subsidiaries are detailed in note 19. A separate detailed statement of financial activities and income and expenditure account (SOFA) is not presented for the charity itself following the exemption afforded by section 408 of the Companies Act 2006 and paragraph 397 of the SORP. A summarised SOFA is shown in note 2. c) Company status The Society is a company limited by guarantee. The members of the Society are the directors named on page 1. In the event of the Society being wound up, the liability in respect of the guarantee is limited to ÂŁ1 per member. d) Fund accounting Unrestricted funds are available for use at the discretion of the directors in furtherance of the general objectives of the Society. Restricted funds are funds subject to specific restrictive conditions imposed by donors or through the terms of an appeal. The cost of raising and administering such funds are charged against the specific funds. The purpose and use of restricted funds is set out in the notes to the financial statements. Permanent endowment funds relate to Sir Gabriel Wood's Mariners' Home which is held in trust by the Society. The terms of the trust mean that the Home must be held indefinitely. Expendable endowment funds relate to the investments held by the Leith Aged Mariners' Fund. Under the terms of the trust deed the capital as well as the income can be applied to the charitable purpose. Each of the above funds include a revaluation reserve representing the restatement of certain assets at market values. e) Incoming resources All incoming resources are included in the SOFA when the Society is legally entitled to the income and the amount can be quantified with reasonable accuracy. The following specific policies are applied to particular categories of income :- Entitlement to legacy income is based on probate being granted before the year end. The amounts included as income are based on actual receipts or notification of intended payment in the following year.
SAILORS' SOCIETY
26
30
Notes forming part of the financial statements AC C O U N TS 2 0 14 for the year ended 31 December 2014 e) Incoming resources (continued) - Voluntary income received by way of grants, donations and gifts is included in full in the SOFA when receivable. Grants, where entitlement is not conditional on the delivery of a specific perfomance by the Society, are recognised when the charity becomes unconditionally entitled to the grant. Grants, where entitlement is related to performance, are recognised when the Society earns the right to the grant through performance of the specified activity. - Donated services, facilities and goods for internal use are included at the value to the Society where this can be quantified. The value of services provided by volunteers has not been included in these financial statements. Goods donated for resale in the Society's charity shops are included as income when they are sold. - Incoming resources from charitable trading activity and activities to generate funds are accounted for when earned. - Investment income is included when receivable. f) Resources expended Expenditure is accounted for on an accruals basis as a liability is incurred. Expenditure includes any VAT which cannot be fully recovered and is reported as part of the expenditure to which it relates: - Costs of generating funds comprise the costs associated with attracting voluntary income and the costs of trading for fundraising purposes including the Society's charity shops. - Charitable expenditure comprises those costs incurred by the Society in the delivery of its activities and services for its beneficiaries. It includes both costs that can be allocated directly to such activities and those costs of an indirect nature necessary to support them. Grants payable are accounted for when a legal or constructive obligation arises. A constructive obligation arises when the other party has a reasonable expectation of receipt. - Support costs include central functions and have been allocated to activity cost categories on a basis consistent with the use of resources, i.e. allocating property costs by space occupied, office facilities by head count and management and accounting support on a time spent basis. - Governance costs includes those costs associated with meeting the constitutional and statutory requirements of the Society and include the audit fees and costs linked to the strategic management of the Society. Where fundraising is part of a multi-purpose activity and promotes the charitable purpose, a proportion of those costs are allocated to the charitable activity. The basis of the split used is the estimated time spent on the activity. g) Tangible fixed assets and depreciation Tangible fixed assets costing more than ÂŁ250 are capitalised. Depreciation is calculated to write off the cost or valuation of tangible fixed assets, other than freehold land, by annual instalments over their expected useful lives as follows: Motor vehicles
33% of the reducing balance
Furniture, fittings and equipment
25% of the reducing balance
Short and long leasehold properties
period of lease
Freehold buildings and Sir Gabriel Wood's Mariners' Home and Court
SAILORS' SOCIETY
31
2%-5% of building cost or valuation
27
Notes forming part of the financial statements for the year ended 31 December 2014
ACCOUNTS 2014
h) Fixed asset investments & investment management fees Listed investments have been stated at market value at the balance sheet date. Realised gains/(losses) are calculated as the difference between market value at the date of disposal and market value at the previous balance sheet date. Unrealised gains/(losses) are calculated as the difference between the market value at the balance sheet date and the market value at the previous balance sheet date (or date of acquisition if later). Investment management fees are accounted for as follows :General and endowment portfolios - percentage of the portfolio value on a quarterly basis shown under costs of generating funds in the SOFA. Schroder Charity Multi-Asset Fund - percentage of the portfolio value deducted from the market value of the fund on a daily basis and therefore effectively deducted from realised or unrealised gains or losses on investments. The fee structure was changed for the last quarter of 2014 and is now charged on the same basis as the general and endowment portfolios. Freehold investment properties are stated at open market value and are not depreciated in accordance with Statement of Standard Accounting Practice No 19. This is a departure from the requirements of the Companies Act 2006. In the opinion of the directors this departure is required in order to show a true and fair view in these financial statements. Investments in subsidiary undertakings are stated at cost less provision for permenent diminution in value. i) Stock Stock consists of goods for resale held at Head Office, seafarers' centres and charity shops (where purchased for resale). Stock is valued at the lower of cost and net realisable value. Unsold donated items are excluded. j) Pensions The Society operates a defined contribution group personal pension scheme with Aegon for the benefit of its UK based employees. Based upon gross salary, employees contribute at the rate of 4% net (5% including tax credit) and the Society at 10.75%. Contributions are charged to the SOFA when they fall due. Some employees, who are not eligible to join the above scheme, have personal pension plans into which the Society contributes under the terms of their employment contracts. Details of the Society's previous pension scheme (Federated Flexiplan No 1 scheme) and the Society's contributions to a recovery plan relating to this scheme are detailed in note 24. k) Foreign currency translation Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. All differences are taken to the SOFA. l) Operating leases Rentals paid under operating leases, where substantially all the benefits and risks of ownership remain with the lessor, are charged against income on a straight line basis over the term of each lease. m) Maintenance of reserves The Society's worldwide operations are complex and wide-ranging. The Society's policy is to always ensure that adequate reserves are maintained to finance operations and to avoid any interruption of services to seafarers. A detailed review of the level of reserves is included in the Trustees Report annually.
SAILORS' SOCIETY
28
32
Notes forming part of the financial statements for the year 31 December 2014 AC C O U N TS ended 2 0 14 2. Financial activities of the Society The financial activities shown in the consolidated SOFA also contain those of the Society's subsidiaries. A summary of the financial activities undertaken by the Society alone is set out below : 2014 £000's Gross incoming resources
2013 £000's
2,048
2,745
(1,666)
(1,372)
Fundraising costs
(388)
(486)
Costs of generating voluntary income
(303)
(234)
16
(39)
Total expenditure on charitable activities
Investment costs Governance costs
(105)
(154)
Investment gains
273
1,705
(125)
2,165
Total funds brought forward
17,135
14,970
Total funds carried forward
17,010
17,135
15,220
15,311
Net (outgoing)/incoming resources
Represented by:Unrestricted income funds Restricted income funds Endowment funds
3. Donations and grants Trust and corporate donations
465
445
1,325
1,379
17,010
17,135
2014
2013
£000's
£000's
478
473
111
137
589
610
Other donations & grants including gifts from churches and individuals
4. Investment Income Listed investments
2014
2013
£000's
£000's
470
452
Property rents
16
1
Interest receivable
10
3
496
456
SAILORS' SOCIETY
33
29
Notes forming part of the financial statements for the year ended 31 December 2014 5. Analysis of total resources expended
Fundraising costs Charity shop costs Fundraising events and sponsorship
Staff Costs £000's (Note 8)
Other Support direct costs costs £000's £000's (Note 6) 11 61
185 488
182 567
199
402
72
673
749
123 33
100 7
30 10
253 50
181 53
156
107
40
303
234
-
30 (45)
-
30 (45)
27 12
-
(15)
-
(15)
39
335 20 786 20 226
427 60 13 455 66 211
134 33 7 16 26 88
896 113 20 1,257 112 525
620 221 41 1,198 82 409
1,387
1,232
304
2,923
2,571
2
31
86
119
167
1,744
1,757
502
4,003
3,760
Charitable activities Chaplaincy and welfare costs Seafarers' centres costs Leith Aged Mariners' Fund commitment Residential home and flat running costs Contributions to partner organisations Promoting the charitable purpose
Governance
Support staff costs
296
(296)
2,040
206
Net incoming resources are stated after charging/(crediting) :-
Surplus on disposal of fixed assets Foreign exchange differences Depreciation
SAILORS' SOCIETY
Total 2013 £000's
84 318
Investment costs Investment management fees Foreign exchange differences on investments
Remuneration paid to the Society's auditors: - audit fee - other services Remuneration paid to other auditors Operating lease rentals
Total 2014 £000's
90 109
Costs of generating voluntary income Other fundraising costs Telephone donor canvassing
Total resources expended
ACCOUNTS 2014
- land & buildings - equipment
2014 £000's 16 4 8 50 9 (11) (65) 176
2013 £000's 16 2 7 47 7 (672) 53 161
30
34
NotesACforming part of the financial statements C O U N TS 2 0 14 for the year ended 31 December 2014 6. Allocation of support costs
Basis of allocation
Premises
Office
Finance,
Management
2014
2013
running
facilities
accounting &
& audit
total
total
costs
costs
IT £000's
£000's
£000's
£000's
£000's
£000's
Floor area
Head count
Time spent
Time spent
5
2 28
9 21
5
30
30
3
19 1
8 9
3
20
17
5 1
1 6
32 4 1 2 3 40
64 21 6 7 9 9
13
82
3 24
Fundraising costs Charity shop costs Fundraising events and sponsorship
Costs of generating voluntary income Other fundraising costs Telephone donor canvassing
-
-
7
11 61
13 67
7
72
80
-
30 10
31 12
-
40
43
7 13 33
134 33 7 16 26 88
134 38 7 18 25 92
116
93
304
314
12
35
36
86
118
144
198
136
502
555
2014 £000's
2013 £000's
21 9 1 5 20 12 2
25 9 1
Charitable activities Chaplaincy, welfare and bethel costs Seafarers' centres costs Leith Aged Mariners' Fund Residential home and flat costs Contributions to partner organisations Promoting the charitable purpose
Governance
-
7. Grant expenditure (a) Grants to institutions
33 7 -
Within contributions to partner organisations (for seafarers' welfare):Milford Haven International Seafarers' Centre Port of Bristol Seafarers' Centre Montrose Seafarers' Centre Sailors' Society Southern Africa - chaplaincy - piracy unit - regional management - general purposes International Sailors' Society - New Zealand
-
2
1 2
Within chaplaincy & welfare:Grants to rebuild seafarers' communities after Typhoon Haiyan, Philippines Habitat for Humanity - rebuilding seafarers' families homes Homer Foundation - replacement fishing boats to help seafarers and their families
148 5 225
SAILORS' SOCIETY
35
38
31
Notes forming part of the financial statements for the year ended 31 December 2014 7. Grant expenditure (b) Grants to individuals Within chaplaincy & welfare costs (for seafarers' welfare) Educational grants Welfare grants
8. Staff costs and numbers
Salaries and wages Social security costs Pension costs
ACCOUNTS 2014
2014 £000's
2013 £000's
12 38
5 7
50
12
2014
2013
£000's
£000's
1,860
1,676
127
114
53
55
2,040
1,845
Total pension contributions accrued and not paid at 31 December 2014 amounted to £11,730 (2013: £11,624). The number of employees receiving total emoluments over £60,000, as defined for taxation purposes, were as follows
£60,000 to £69,999 £80,000 to £89,999
2014 Number 1 1
2013 Number 2 -
The average number of employees, calculated on a full time equivalent basis, analysed by function was : 2014
2013
Number
Number
Chaplaincy and welfare
29
23
Seafarers' centres
11
14
Fundraising and charity shops
14
15
Residential home
50
50
Contributions to joint operations
1
1
Promoting the charitable cause (direct)
4
2
Management and administration of the charity
6
7
115
112
9. Transactions with Directors The Directors do not receive any remuneration. Travel expenses reimbursed to 7 directors amounted to £2,922 (2013: 6 directors - £3,207).
SAILORS' SOCIETY
32
36
Notes forming part of the financial statements AC C O U N TS 2 0 14 for the year ended 31 December 2014 10. Tangible fixed assets a) Consolidated Sir Gabriel Freehold
Wood's
Furniture
property &
Home &
Leasehold
fittings &
Motor
improvements
Court
property
equipment
vehicles
Total
£000's
£000's
£000's
£000's
£000's
£000's
Cost or valuation At 1 January 2014 Additions Disposals
918 -
1,540 74 -
358 (92)
366 23 (15)
469 107 (47)
3,651 204 (154)
At 31 December 2014
918
1,614
266
374
529
3,701
Depreciation At 1 January 2014 Charge for year Disposals
206 18 -
161 58 -
354 1 (92)
293 24 (14)
351 75 (46)
1,365 176 (152)
At 31 December 2014
224
219
263
303
380
1,389
Net book value At 31 December 2014
694
1,395
3
71
149
2,312
Net book value At 31 December 2013
712
1,379
4
73
118
2,286
Sir Gabriel Wood's Mariners' Home and Court were valued in January 2011 by Millar Surveying Services, Chartered Surveyors on an open market value for existing use basis. As the home is an historic building and the property is held in trust, it has been shown separately from other freehold property. If it had not been revalued it would have been included at the following amounts:
Cost Depreciation Net book value
2014 £000's 1,418 (732)
2013 £000's 1,344 (683)
686
661
Compared to the depreciation calculated by reference to historical cost, the figure in the financial statements is greater by £9,716 (2013: £9,716). b) Capital Commitments (Group) There were capital commitments of £47,000 at 31 December 2014 (2013 - £38,000).
SAILORS' SOCIETY
37
33
Notes forming part of the financial statements for the year ended 31 December 2014
ACCOUNTS 2014
10. Tangible fixed assets (Continued) c) The Society
Sir Gabriel Freehold
Wood's
Furniture
property &
Home &
Leasehold
fittings &
Motor
improvements
Court
property
equipment
vehicles
Total
£000's
£000's
£000's
£000's
£000's
£000's
Cost or valuation At 1 January 2014 Additions Disposals
918 -
1,540 -
264 (16)
216 20 (3)
417 107 (47)
3,355 127 (66)
At 31 December 2014
918
1,540
248
233
477
3,416
At 1 January 2014 Charge for the year Disposals
206 18 -
161 54 -
260 1 (16)
160 18 (2)
305 74 (46)
1,092 165 (64)
At 31 December 2014
224
215
245
176
333
1,193
Net book value At 31 December 2014
694
1,325
3
57
144
2,223
At 31 December 2013
712
1,379
4
56
112
2,263
Depreciation
c) Analysis of freehold property and improvements (including Sir Gabriel Wood's)
Net book value - Consolidated At 31 December 2014
Land £000's
Buildings £000's
Total £000's
372
1,717
2,089
372
1,719
2,091
At 31 December 2014
372
1,647
2,019
At 31 December 2013
372
1,719
2,091
At 31 December 2013 Net book value - Society
d) Capital Commitments (Society only) There were no capital commitments at 31 December 2014 (2013 - Nil).
SAILORS' SOCIETY
34
38
Notes forming part of the financial statements AC C O U N TS ended 2 0 14 for the year 31 December 2014 11. Fixed asset investments a) Consolidated
Schroder
General
Endowment
Fund
Fund
Fund
Total
£000's
£000's
£000's
£000's
Market value At 1 January 2014 Additions Disposals Unrealised gains on revaluation Unrealised foreign exchange differences
6,511 10 19 -
7,416 1,228 (1,478) 217 45
178 3 (14) 5 -
14,105 1,241 (1,492) 241 45
Market value at 31 December 2014
6,540
7,428
172
14,140
Historical cost at 31 December 2014
5,166
6,100
102
11,368
Listed investments UK fixed interest securities Overseas fixed interest UK equity shares Overseas equity shares Property funds Alternative investments Cash
131 222 2,558 1,615 569 1,288 157
1,063 264 3,244 2,264 393 200 -
67 91 9 5 -
1,261 486 5,893 3,888 967 1,488 157
Market value at 31 December 2014
6,540
7,428
172
14,140
Market value At 1 January 2014 Additions Disposals Unrealised gains on revaluation Unrealised foreign exchange differences
6,291 10 18 -
7,416 1,228 (1,478) 217 45
-
13,707 1,238 (1,478) 235 45
Market value at 31 December 2014
6,319
7,428
-
13,747
Historical cost at 31 December 2014
4,965
6,100
-
11,065
Listed investments UK fixed interest securities Overseas fixed interest UK equity shares Overseas equity shares Property funds Alternative investments Cash
126 215 2,470 1,561 550 1,245 152
1,063 264 3,244 2,264 393 200 -
-
1,189 479 5,714 3,825 943 1,445 152
Market value at 31 December 2014
6,319
7,428
-
13,747
-
b) The Society
SAILORS' SOCIETY
39
35
Notes forming part of the financial statements for the year ended 31 December 2014
ACCOUNTS 2014
11. Fixed asset investments (continued) There were no investments in individual holdings at 31 December 2014 representing more than 5% of the value of the combined portfolio. The Schroder Fund is the Schroder Charity Multi-Asset Fund which is a Common Investment Fund. This investment forms part of the Society's unrestricted funds. The consolidated total includes £220,116 in relation to restricted funds in the name of Sir Gabriel Wood's Mariners' Home. 12. Freehold investment properties Consolidated and the Society - at valuation
£000's
At 1 January 2014
385
Revaluation in the year
60
At 31 December 2014
445
The valuation consists of: Freehold property - Beattie Rise, Hedge End, Southampton
400
Land at Durham Hill - Dover
45
445 The land at Durham Hill, Dover has been owned by the Society since 1957 and was formerly thought to have been of negligible value. The land has been valued in February 2011 by Watson Day, Chartered Surveyors on an open market value basis. The valuation has been reviewed at 31 December 2014 by the directors of the Society in whose opinion the value has not changed.
The freehold property at Beattie Rise was valued at 31 December 2014 at £400,000 on an open market basis by White & Guard, estate agents. The historical net book value of the properties is £77,062 (2013: £77,062).
SAILORS' SOCIETY
36
40
Notes forming part of the financial statements AC C O U N TS ended 2 0 14 for the year 31 December 2014 13. Interest free loans
Loans to joint operations
Consolidated 2014 2013 £000's £000's 16 16
The Society 2014 2013 £000's £000's 16 16
These loans are to finance the operations of the borrowers and are not repayable within twelve months. 14. Debtors The Society
Consolidated
Trade debtors Amounts owed by subsidiary undertakings Other debtors, prepayments and accrued income
2014
2013
2014
2013
£000's 201 427
£000's 249 199
£000's 5 265 372
£000's 3 148 161
628
448
642
312
At the year end £265,182 was owed by Sailors' Beneficial Enterprises Limited to Sailors' Society including £193,848 gift aid payment payable before 30 September 2015. Against the remaining £71,334 outstanding the Society has a floating charge to secure £30,000 of the loan. 15. Creditors: amounts falling due within one year Consolidated 2014 2013 £000's £000's Trade creditors
The Society 2014 £000's
2013 £000's
181
79
117
43
26
18
26
18
Taxes and social security Pension contributions owed
12
12
12
12
Amounts owed to other funds
38
38
38
38
Other creditors and accruals
165
111
137
71
Deferred income
118
71
29
7
Amounts owed to subsidiary undertakings
-
7
39
-
Obligations for future payments under the Leith Aged Mariners' Fund (see note 16)
13
13
Federated Flexiplan pension scheme liability
67
64
67
64
620
406
433
292
Amounts owed to other funds relates to the Macaulay Educational and Benevolent Trusts. These are trusts established under Canadian law and the amounts shown represent accumulated investment income collected by the Society on behalf of the fund trustees. The capital of the funds is invested in Canada and separately managed. The Society acts as custodian of the income and disburses grants to beneficiaries at the direction of the fund trustees who are separate from the trustees of the Society. The balance of undistributed income is repayable at the demand of the fund trustees and carries no interest charge. The Federated Flexiplan Scheme liability is based upon the monthly instalments due in the next year under the Recovery Plan. Full details of the liability are shown in note 24.
SAILORS' SOCIETY
41
37
Notes forming part of the financial statements for the year ended 31 December 2014
ACCOUNTS 2014
16. Creditors: amounts falling due after more than one year Consolidated
Federated Flexiplan pension scheme liability Amount owed to subsidiary undertaking
The Society
2014
2013
2014
2013
£000's
£000's
£000's
£000's
245 -
312
245
312
-
198
198
191
186
-
-
436
498
443
510
Obligations for future payments under the Leith Aged Mariners' Fund
Amounts payable in the next twelve months are shown as creditors due within one year. The amount owed to the subsidiary undertaking has no fixed repayment period. Consolidated
Federated Flexiplan pension scheme liability
Amounts payable between 1 and 2 years Amounts payable between 2 and 5 years Amounts payable over 5 years
The Society
2014
2013
2014
2013
£000's
£000's
£000's
£000's
67
64
67
64
178
201
178
201
245
47 312
47 245
312
Full details of the liability are shown in note 24. Leith Aged Mariners' fund commitment The obligations for future payments under the Leith Aged Mariners' Fund were calculated on an actuarial basis to be £98,916 at 31 December 2014, using 2011-2013 life tables for Scotland supplied by the Office of National Statistics The weekly pension is £12 with a further £12 given as a Christmas bonus in December. The annual cost is £636 per person. It is anticipated that the weekly payment level will increase at some point in the future in line with the other almonising societies. If the payment was £14 per week from 1 January 2015 the actuarial liability would be £115,402. The liability shown in the financial statements is £202,641 and represents the net assets of the fund at 31 December 2014. This is the maximum liability of the fund to its beneficiaries, the actuarial liabilities ranging from £98,916 to £115,402 based on a number of assumptions. The Trustees will continue to review the current strategy of the Fund in 2015 to see if further charitable payments can be made. Movements in the net assets of the fund are reflected in the SOFA and reflect the increase in the value of investments during the year. There were 19 beneficiaries at 31 December 2014.
SAILORS' SOCIETY
38
42
Notes forming part of the financial statements AC C O U N TS ended 2 0 14 for the year 31 December 2014 17. Reserves Movement in Funds (a) Endowments - consolidated
Balance
Incoming
1 January 2014
resources
Permanent endowments
£000's
£000's
Sir Gabriel Wood's Mariners' Home
1,379
-
Expenditure,
Balance
gains, losses
31 December
and transfers
2014
£000's
£000's
16
1,395
Expendable endowments The Leith Aged Mariners' Fund investments had unrealised gains of £4,532 at 31 December 2014. These have been transferred to restricted funds as detailed in note 17 (e). Included within the above are the following movements on revaluation reserves: Leith Aged Mariners' Fund - investments Sir Gabriel Wood's Mariners' Home
73
-
(3)
70
718
-
(10)
708
791
-
(13)
778
(b) Restricted funds - consolidated Sailors' Society Capital grants and donations
295
41
(37)
299
Donations & events income
150
307
(301)
156
Legacies
-
10
-
10
Sailors' Society Scotland Capital grants and donations
2
-
(1)
Legacies
7
-
(7)
Other donations - restricted use only
-
1 -
19
(17)
2
1,326
(1,261)
703
13
(13)
1,716
(1,637)
1,171
1
20
Sir Gabriel Wood's Mariners' Home General funds including grants
638
Leith Aged Mariners' Fund
1,092
-
Included within the above are the following movements on revaluation reserves: Sir Gabriel Wood's - investments
19
-
Sir Gabriel Wood's Mariners' Home The Sir Gabriel Wood's Mariners' Home in Greenock provides accommodation for retired seafarers and their dependants. The original assets and adminstration of the home were transferred, under a Deed of Trust to the Society in 1968. The value of the Home itself is shown as an endowment fund. The day to day administration of the Home is carried out by the subsidiary charity whose own net assets are shown under restricted funds. SAILORS' SOCIETY
43
39
Notes forming part of the financial statements for the year ended 31 December 2014
ACCOUNTS 2014
17. Reserves (b) Restricted funds - consolidated (continued) Grants
Grants relate to unexpended revenue grants and capital grants (both expended and unexpended). Depreciation on assets purchased with capital grants is charged against this restricted fund. Leith Aged Mariners' Fund
The administration of the Leith Aged Mariners' Fund was passed to the Society by The Trinity House of Leith in 2000. The fund is a separate Scottish registered charity and was formed in 1943 for the benefit of aged seamen and their widows belonging to or connected with the port of Leith who, because of their financial position, are deemed to have been deserving of charitable help. The capital of the fund is available to be used for this purpose as well as the income. The fund is a separate legal entity and is treated as a subsidiary undertaking. Details of financial obligations of the fund are shown in note 16. (c) Unrestricted funds - consolidated Movement in Funds Balance 1 January 2014 £000's Sailors' Beneficial Enterprises Ltd (note 19) General reserve
(16)
Incoming Resources £000's
Expenditure gains, losses and transfers £000's
Balance 31 December 2014 £000's
438
(438)
(16)
15,552
1,555
(1,666)
15,441
15,536
1,993
(2,104)
15,425
Included within the above are the following movements on revaluation reserves: Investment properties
308
-
60
Investments (note 18)
2,776
-
(94)
2,682
3,084
-
(34)
3,050
SAILORS' SOCIETY
368
40
44
Notes forming part of the financial statements AC C O U N TS 2 0 14 for the year ended 31 December 2014 17. Reserves (continued) (d) The Society
Movement in funds Expenditure Balance
gains, losses
Balance 31 December
1 January
Incoming
transfers and
2014
Resources
revaluations
2014
£000's
£000's
£000's
£000's
Endowment funds Sir Gabriel Wood's Mariners' Home
1,379
-
(54)
1,325
Restricted funds Capital grants and donations
295
41
(37)
299
Donations, legacies & events income
150
307
(301)
156
Legacies
-
Unrestricted Funds - General reserve General reserve
10
-
10
445
358
(338)
465
15,311
1,690
(1,781)
15,220
17,135
2,048
(2,173)
17,010
Included within the above are the following movements on revaluation reserves: Investment properties Sir Gabriel Wood's Mariners' Home Investments (note 18)
SAILORS' SOCIETY
45
308 717 2,776
-
60 (8) (94)
368 709 2,682
3,801
-
(42)
3,759
41
Notes forming part of the financial statements for the year ended 31 December 2014
ACCOUNTS 2014
17. Reserves (continued) (e) Transfers between funds Unrestricted Funds £000's Leith Aged Mariners' Fund
Restricted Funds £000's
Endowment Funds £000's
Total Funds £000's
-
5 (74)
(5) 74
-
-
(69)
69
-
Sir Gabriel Wood's Mariners' Home - improvements
Leith Aged Mariners' Fund
The transfer between funds represents the unrealised gains on investments held by the Leith Aged Mariners' Fund. The increase in value of the endowment fund caused by these gains results in a corresponding increase within restricted funds in the potential liability due to pay future charitable payments. Sir Gabriel Wood's Mariners' Home During the year the Sir Gabriel Wood's Mariners' Home charity spent £73,983 on improvements to the Home which is owned by the Society and treated as an endowment. As the charity is treated as a restricted fund, a transfer is required from restricted to endowment funds to recognise the increased value of the endowment by this amount. 18. Analysis of consolidated net assets between funds Unrestricted
Restricted
Endowment
Total
Funds
Funds
Funds
Funds
£000's
£000's
£000's
£000's
Fund balances at 31 December 2014 are represented by: Tangible fixed assets Investment properties Investments Interest free loans Current assets
601 445 13,747 16
316
1,395
-
-
221
172
-
-
2,312 445 14,140 16
1,421
687
26
Current liabilities
(555)
(53)
(12)
(620)
Long term liabilities
(245)
-
(191)
(436)
(5)
-
5
Interfund balances Total net assets at 31 December 2014
SAILORS' SOCIETY
15,425
1,171
1,395
2,134
17,991
42
46
Notes forming part of the financial statements AC C O U N TS ended 2 0 14 for the year 31 December 2014 18. Analysis of consolidated net assets between funds (continued) Unrestricted
Restricted
Endowment
Total
Funds
Funds
Funds
Funds
£000's
£000's
£000's
£000's
Unrealised gains included above On investment properties (note 12) On Sir Gabriel Wood's Mariners' Home
368
-
-
-
-
368
708
708
On investments (see below)
2,682
20
70
2,772
Unrealised gains at 31 December 2014
3,050
20
778
3,848
Unrealised gains at 1 January 2014 Disposals in the year Net gains arising on revaluations in year
2,776 (329) 235
19 1
73 (7) 4
2,868 (336) 240
Unrealised gains at 31 December 2014
2,682
20
70
2,772
Society Unrealised gains at 1 January 2014 Disposals in the year Net gains arising on revaluations in year
2,776 (329) 235
-
-
2,776 (329) 235
Unrealised gains at 31 December 2014
2,682
-
-
2,682
Reconciliation of movements in unrealised gains on investment assets (excluding property) Consolidated
SAILORS' SOCIETY
47
43
Notes forming part of the financial statements for the year ended 31 December 2014
ACCOUNTS 2014
19. Subsidiary undertakings (a) Details of subsidiaries
(1) The Society owns 100% of the issued ordinary share capital of Sailors' Beneficial Enterprises Ltd, a company limited by shares and registered in England and Wales (no. 3652955). The company arranges corporate sponsorship on behalf of the Sailors' Society and organises selected overseas fundraising events. (2) Sir Gabriel Wood's Mariners' Home and Court in Greenock is a registered charity in Scotland (no. SC003763) managed by a committee acting under powers delegated to it by the Society. (3) Leith Aged Mariners' Fund is a registered charity in Scotland (no. SC003014) managed by the Board of Directors as nominated trustees of the fund on behalf of the Society. (4) Sailors' Society Scotland is a registered charity in Scotland (no. SC041887) and a company limited by guarantee registered in Scotland (no. SC387850). This charity carries out some of the fundraising and charitable activity in Scotland. All results of the above subsidiaries are consolidated in the group financial statements. Interest on loans between group members is charged at the appropriate rates of interest. (b) Investment in subsidiary - 20,000 ordinary ÂŁ1 shares in Sailors' Beneficial Enterprises Limited Cost At 1 January 2014 and 31 December 2014
ÂŁ000's 20
Provision for diminution in value At 1 January 2014 Provision in year
16 -
At 31 December 2014
16
Net book value At 31 December 2014
4
At 31 December 2013
4
SAILORS' SOCIETY
44
48
Notes forming part of the financial statements AC C O U N TS 2 0 14 for the year ended 31 December 2014 19. Subsidiary undertakings (continued)
(c) Financial details Leith Aged Mariners' Fund 2014 2013 £000's £000's Donations & grants Fundraising income Legacies Residential home & flat fees
7 -
Governance Net (deficit)/surplus Investment gains Donation to parent charity Retained in subsidiary
7
67
-
-
20 -
-
Sailors' Beneficial Enterprises Ltd 2014 2013 £000's £000's 438 -
406 -
Sailors' Society Scotland 2014 2013 £000's £000's 19 59
12 66 18
-
6
6
1,250 9
1,122 12
-
-
13
13
1,326
1,154
438
406
78
96
(14) -
(16) -
(1,254)
(1,125)
(8)
(8)
(241) (3)
(220) (3)
(58) (45) (3)
(59) (45) (3)
(14)
(16)
(1,262)
(1,133)
(244)
(223)
(106)
(107)
(1) 5
(3) 22
64 1
21 19
194 (194)
183 (183)
(28) -
(11) -
(28)
(11)
4
214 (2)
242 (2)
4
212
240
Investment income
Charitable expenditure Fundraising costs
Sir Gabriel Wood's Mariners' Home 2014 2013 £000's £000's
-
-
4
19
65
40
-
-
-
-
The aggregate of the assets, liabilities and funds was: Assets Liabilities
203 -
199 -
756 (53)
702 (64)
Funds
203
199
703
638
4 4
In the consolidated financial statements, the net assets of the Leith Aged Mariners' Fund are treated as a liability to reflect the obligation to pay future pensions which was recognised when administration of the fund passed to the Society.
SAILORS' SOCIETY
49
45
Notes forming part of the financial statements for the year ended 31 December 2014
ACCOUNTS 2014
20. Financial commitments a) Operating leases At 31 December the Society had annual commitments under non-cancellable operating leases as follows: Consolidated Land and Buildings Expiry date:
Other
2014
2013
2014
2013
£000's
£000's
£000's
£000's
Within one year Between two and five years More than five years
9
9
30
30
-
9
1 39
9
-
40
9
9
The Society Land and Buildings Expiry date:
Other
2014
2013
2014
2013
£000's
£000's
£000's
£000's
Within one year Between two and five years More than five years
9
9
18
18
-
1 27
28
-
9
-
9 -
9
9
b) Other contractual commitments At 31 December 2014 the Society was committed to annual payments estimated at £22,320, expiring 2018, in respect of outsourced IT services. The Society was also obliged to give one month's notice on IT support contracts totalling £900. 21. Related party transactions The Society has made financial contributions in the current year and in the past, to kindred organisations that are separate legally registered organisations and of which the Society is a joint trustee or was a participating party on formation of such organisations. (a) Legal details Name Port of Bristol Seafarers' Centre Milford Haven International Seafarers' Centre Seaham Seafarers' Society Felixstowe & Haven Ports Seafarers' Service Port Hedland Seafarers' Centre Flying Angel Club, Fremantle Centres for Seafarers Ltd Humber Seafarers' Service
Activity Seafarers' Centre Seafarers' Centre
Country of registration England
Society relationship Joint Trustee Joint Trustee
Seafarers' Centre
England
Participating party
Seafarers' Centres Seafarers' Centre Seafarers' Centre Seafarers' Centres Seafarers' Centre
England
Joint Trustee Participating party Participating party Joint Trustee Joint Trustee
England
Australia Australia England England
As each of these organisations is a separate legal entity the net assets are protected and on the dissolution of the organisation there is specific direction in the constitution as to how net assets are to be distributed.
SAILORS' SOCIETY
46
50
Notes forming part of the financial statements AC C O U N TS 2 0 14 for the year ended 31 December 2014 21. Related party transactions (continued) (b) Financial transactions in the year The major contributions towards running costs are disclosed in note 7. (c ) Balances owed at balance sheet date Balances due from such organisations were as follows :2014 £000's 3 12
Port Hedland Seafarers' Centre Flying Angel Club, Fremantle
2013 £000's 3 12
(d) Financial details Financial details of organisations in which the Society is a Joint Trustee and involved in the management are :Centres Humber Felixstowe Port of for Seafarers Bristol
Milford Haven
Proportion of controlling influence
33.3%
Proportion of net assets on dissolution - property - other
33.3% 33.3%
33.3%
-
33.3%
33.3%
33.3%
33.3% 33.3%
33.3% 33.3%
25.0% 33.3%
Last published accounts date
31 December 2013
31 January 2014
31 March 2014
31 March 2014
31 December 2013
Net surplus/(deficit) in £000's Net assets in £000's
(36) 635
15 242
34 665
(22) 108
(4) 321
Except for Centres for Seafarers and Humber Seafarers' Service, the Society is custodial trustee for the freehold/leasehold properties of the above-mentioned joint centres and legal title to such properties is held in the Society's name. Separate trust agreements exist between the trustees to ensure that the properties cannot be disposed of without the agreement of all parties concerned. The net assets above include the net book value of these properties. Upon dissolution, the net assets of the Humber Seafarers' Service can be transferred to an external body with agreement by the members. This may be, but not necessarily, one of the participating societies. 22. Unrecorded legacies The following estimated amounts relate to legacies notified to the Society but not yet accounted for in the financial statements:2014
2013
£000's
£000's
Pecuniary legacies
1
Residual legacies
74
68
Legacies subject to a life-tenant interest
72
99
147
167
SAILORS' SOCIETY
51
-
47
Notes forming part of the financial statements for the year ended 31 December 2014
ACCOUNTS 2014
23. Contingent liabilities a) Liability arising out of joint operations The Society has a contingent liability which could arise from some of its joint operations (detailed in note 21). In instances where the Society recognises such a potential liability, full provision has been made in the financial statements and is shown within creditors. b) Liability arising out of grant conditions Sir Gabriel Wood's Mariners' Home received the following grants from the Merchant Navy Welfare Board. The grants are repayable if the Home is disposed of within a five year period from the date the grant was made. Year received
Amount £
2009
20,278
2010
20,982
2011
12,757
2012
11,300
2013
12,500
2014
18,000
24. Pension scheme provision - Federated Flexiplan No. 1 pension scheme
’The Federated Flexiplan No.1 (‘’the Plan’’) is a defined benefit pension scheme. The Plan closed to further accrual in January 2010 and following two Court hearings, for interpretation of the Plan rules, the entitlement of members has been definitively established. An actuarial valuation at 31 March 2009 revealed a significant deficit and, in the 2010 financial statements, the Society made full provision of its estimated liability of £523,840. A consequent Recovery Plan required the Society to contribute £53,788 p.a. for the three years commencing 1 April 2011 in respect of its share of the deficit. A further actuarial valuation, at 31 March 2012, showed that the overall deficit at that date was approximately £18.3 million. In line with the approach used for the 2009 valuation, the basis used to calculate the deficit was chosen to produce a level for the liabilities which was anticipated to be broadly in line with the cost of securing the Plan benefits with an insurer. A new Recovery Plan was issued which took account of the 31 March 2012 actuarial valuation and subsequent changes in assets and liabilities up to the date of signing the valuation in June 2013. Following the outcome of the court case the Trustee of the Plan decided to adjust each employer’s liability in the new Recovery Plan to reflect the extent to which each employer had either underpaid or overpaid contributions during the course of the existing Recovery Plan. The Society is required to pay £67,069 p.a. for three years from 1 April 2014 and £66,744 p.a. for two years from 1 April 2017 as its share of the deficit. The instalments made since 2011 have reduced the liability to £312,175 at 31 December 2014. The next formal triennial actuarial valuation, which is due at 31 March 2015, may result in another revised Recovery Plan which in turn may change the amount the Society is required to contribute for its share of the deficit.
SAILORS' SOCIETY
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Sailors’ Society
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